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<SEC-DOCUMENT>0000825324-06-000004.txt : 20060512
<SEC-HEADER>0000825324-06-000004.hdr.sgml : 20060512
<ACCEPTANCE-DATETIME>20060512152143
ACCESSION NUMBER:		0000825324-06-000004
CONFORMED SUBMISSION TYPE:	10QSB
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20060331
FILED AS OF DATE:		20060512
DATE AS OF CHANGE:		20060512

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			GOOD TIMES RESTAURANTS INC
		CENTRAL INDEX KEY:			0000825324
		STANDARD INDUSTRIAL CLASSIFICATION:	RETAIL-EATING PLACES [5812]
		IRS NUMBER:				841133368
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		10QSB
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-18590
		FILM NUMBER:		06834467

	BUSINESS ADDRESS:	
		STREET 1:		601 CORPORATE CIRCLE
		CITY:			GOLDEN
		STATE:			CO
		ZIP:			80401
		BUSINESS PHONE:		3033841400

	MAIL ADDRESS:	
		STREET 1:		601 CORPORATE CIRCLE
		CITY:			GOLDEN
		STATE:			CO
		ZIP:			80401

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	PARAMOUNT VENTURES INC
		DATE OF NAME CHANGE:	19900205
</SEC-HEADER>
<DOCUMENT>
<TYPE>10QSB
<SEQUENCE>1
<FILENAME>qsbquarter2.htm
<TEXT>
<HTML>
<HEAD>
<META ="Content-Type" CONTENT="text/html; charset=windows-1252">
<META NAME="Generator" CONTENT="Microsoft Word 97">
<TITLE>UNITED STATES</TITLE>
</HEAD>
<BODY>

<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=638>
<TR><TD VALIGN="TOP">
<B><FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">UNITED STATES</B></FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">SECURITIES AND EXCHANGE COMMISSION</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">Washington, D.C. 20549</P>
<P ALIGN="CENTER"></FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<B><FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">FORM 10-QSB</P>
</B></FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">THE SECURITIES EXCHANGE ACT OF 1934</P>
<P ALIGN="CENTER"></FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">For quarterly period ended: <U>March 31, 2006</U></FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">Commission file number: <U>0-18590</P>
</U><P ALIGN="CENTER"></FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">GOOD TIMES RESTAURANTS INC.</U></FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">(Exact name of registrant as specified in its charter)</P>
<P ALIGN="CENTER"></FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">NEVADA</U></FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">(State or other jurisdiction of incorporation or organization)</P>
<P ALIGN="CENTER"></FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">84-1133368</U></FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">(I.R.S. Employer Identification No.)</P>
<P ALIGN="CENTER"></FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">601 CORPORATE CIRCLE, GOLDEN, CO   80401</U></FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">(Address of principal executive offices)</P>
<P ALIGN="CENTER"></FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">(303) 384-1400 </U></FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">(Issuer's telephone number)</P>
<P ALIGN="CENTER"></FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">(Former name, former address and former fiscal year, since last report.)</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.</P>
<P ALIGN="CENTER"></FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">(x)   Yes    (   )   No</P>
<P ALIGN="CENTER"></FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<B><FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">APPLICABLE ONLY TO CORPORATE ISSUERS</P>
</B></FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">Total number of shares of stock outstanding at May 12, 2006.</P>
<P ALIGN="CENTER"></FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">2,531,332 SHARES OF COMMON STOCK, .001 PAR VALUE</P>
<P ALIGN="CENTER">1,240,000 SHARES OF PREFERRED STOCK, .001 VALUE</P>
</U><P ALIGN="CENTER"></FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">Transitional Small Business Disclosure Format (check one):  (   )   Yes    (X)  No</FONT></TD>
</TR>
</TABLE>

<FONT FACE="Courier New" SIZE=1>
<P>&nbsp;</P>
<P>&nbsp;</P>
<B><P>Form 10-QSB</P>
<P>Quarter Ended March 31, 2006</P>
</B></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=619>
<TR><TD WIDTH="11%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="69%" VALIGN="TOP">
<B><U><FONT FACE="Courier New" SIZE=1><P>INDEX</B></U></FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<B><U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">PAGE</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="69%" VALIGN="TOP">
<B><FONT FACE="Courier New" SIZE=1><P>PART I - FINANCIAL INFORMATION</B></FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="JUSTIFY">Item 1.</FONT></TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="JUSTIFY">Financial Statements</P>
<P ALIGN="JUSTIFY"></FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="JUSTIFY">Condensed Consolidated Balance Sheets -</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">3 </FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P>March 31, 2006 and September 30, 2005</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1>
<P>Condensed  Consolidated Statements of Operations - </FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">4</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P>For the three and six months ended March 31, 2006 and 2005</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1>
<P>Condensed Consolidated Statements of Cash Flow -</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">5 - 6</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P>For the three and six months ended March 31, 2006 and 2005</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Notes to Condensed Consolidated Financial Statements</P>
<P ALIGN="JUSTIFY"></FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">7</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="JUSTIFY">Item 2.</FONT></TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="JUSTIFY">Management's Discussion and Analysis</P>
<P ALIGN="JUSTIFY"></FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">8 - 13</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="JUSTIFY">Item 3.</FONT></TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="JUSTIFY">Quantitive and Qualitive Disclosures About Market Risk</P>
<P ALIGN="JUSTIFY"></FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">13</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="JUSTIFY">Item 4.</FONT></TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="JUSTIFY">Controls and Procedures</P>
<P ALIGN="JUSTIFY"></FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">13</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="69%" VALIGN="TOP">
<B><FONT FACE="Courier New" SIZE=1><P>PART II - OTHER INFORMATION</P>
</B></FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="JUSTIFY">Item 1.</FONT></TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="JUSTIFY">Legal Proceedings</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">14</P>
<P ALIGN="RIGHT"></FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="JUSTIFY">Item 2.</FONT></TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="JUSTIFY">Changes in Securities and Use of Proceeds</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">14</P>
<P ALIGN="RIGHT"></FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="JUSTIFY">Item 3.</FONT></TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="JUSTIFY">Defaults Upon Senior Securities</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">14</P>
<P ALIGN="RIGHT"></FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="JUSTIFY">Item 4.</FONT></TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="JUSTIFY">Submission of Matters to a Vote of Security Holders</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">14</P>
<P ALIGN="RIGHT"></FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="JUSTIFY">Item 5.</FONT></TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="JUSTIFY">Other Information</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">14</P>
<P ALIGN="RIGHT"></FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="JUSTIFY">Item 6.</FONT></TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="JUSTIFY">Exhibits and Reports on Form 8-K</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">14</P>
<P ALIGN="RIGHT"></FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="69%" VALIGN="TOP">
<B><FONT FACE="Courier New" SIZE=1><P ALIGN="JUSTIFY">SIGNATURES</B></FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">14</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="69%" VALIGN="TOP">
<B><FONT FACE="Courier New" SIZE=1><P ALIGN="JUSTIFY">CERTIFICATIONS</B></FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">Exhibit 31.1</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="69%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="21%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">Exhibit 32.1</FONT></TD>
</TR>
</TABLE>

<FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER"></P>
<P ALIGN="CENTER">-2-</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<B><P ALIGN="CENTER">GOOD TIMES RESTAURANTS INC. AND SUBSIDIARIES</P>
<P ALIGN="CENTER">CONDENSED CONSOLIDATED BALANCE SHEETS</P>
<P ALIGN="CENTER">ASSETS</P>
<P ALIGN="CENTER">(Unaudited)</P>
</B><P ALIGN="CENTER"></P></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=613>
<TR><TD WIDTH="63%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">March 31,</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">September 30,</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">2006</U></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">2005</U></FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="JUSTIFY">CURRENT ASSETS:</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP"><DIR>

<FONT FACE="Courier New" SIZE=1><P ALIGN="JUSTIFY">Cash and cash equivalents</DIR>
</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">$2,125,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">$1,763,000</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP"><DIR>

<FONT FACE="Courier New" SIZE=1><P ALIGN="JUSTIFY">Available-for-sale investments</DIR>
</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">1,900,000</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP"><DIR>

<FONT FACE="Courier New" SIZE=1><P ALIGN="JUSTIFY">Receivables and other</DIR>
</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">254,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">192,000</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP"><DIR>

<FONT FACE="Courier New" SIZE=1><P ALIGN="JUSTIFY">Inventories</DIR>
</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">147,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">132,000</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP"><DIR>

<FONT FACE="Courier New" SIZE=1><P ALIGN="JUSTIFY">Notes receivable</DIR>
</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">     84,000</U></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">     68,000</U></FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP"><DIR>
<DIR>

<FONT FACE="Courier New" SIZE=1><P ALIGN="JUSTIFY">Total current assets</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">2,610,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">4,055,000</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="JUSTIFY">PROPERTY AND EQUIPMENT, at cost:</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP"><DIR>

<FONT FACE="Courier New" SIZE=1><P ALIGN="JUSTIFY">Land and building</DIR>
</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">4,255,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">3,696,000</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP"><DIR>

<FONT FACE="Courier New" SIZE=1><P ALIGN="JUSTIFY">Leasehold improvements</DIR>
</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">3,026,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">2,826,000</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP"><DIR>

<FONT FACE="Courier New" SIZE=1><P ALIGN="JUSTIFY">Fixtures and equipment</DIR>
</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT"> 6,468,000</U></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">  5,729,000</U></FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">13,749,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">12,251,000</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP"><DIR>

<FONT FACE="Courier New" SIZE=1><P>Less accumulated depreciation and amortization</DIR>
</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">(7,872,000)</U></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">(7,412,000)</U></FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">5,877,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">4,839,000</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P>OTHER ASSETS:</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP"><DIR>

<FONT FACE="Courier New" SIZE=1><P ALIGN="JUSTIFY">Notes receivable, net of current portion</DIR>
</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">480,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">486,000</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP"><DIR>

<FONT FACE="Courier New" SIZE=1><P ALIGN="JUSTIFY">Deposits and other assets</DIR>
</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">_   61,000</U></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">     51,000</U></FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">   541,000</U></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">    537,000</U></FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="JUSTIFY">TOTAL ASSETS</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">$9,028,000</U></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">$9,431,000</U></FONT></TD>
</TR>
</TABLE>

<FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER"></P>
<B><P ALIGN="CENTER">LIABILITIES AND STOCKHOLDERS' EQUITY</P></B></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=613>
<TR><TD WIDTH="63%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="JUSTIFY">CURRENT LIABILITIES:</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP"><DIR>

<FONT FACE="Courier New" SIZE=1><P>Current maturities of long-term debt</DIR>
</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">$  221,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">$   217,000</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP"><DIR>

<FONT FACE="Courier New" SIZE=1><P ALIGN="JUSTIFY">Accounts payable</DIR>
</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">304,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">363,000</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP"><DIR>

<FONT FACE="Courier New" SIZE=1><P ALIGN="JUSTIFY">Deferred income</DIR>
</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">139,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">48,000</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP"><DIR>

<FONT FACE="Courier New" SIZE=1><P ALIGN="JUSTIFY">Other accrued liabilities</DIR>
</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">   860,000</U></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">   705,000</U></FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP"><DIR>
<DIR>

<FONT FACE="Courier New" SIZE=1><P ALIGN="JUSTIFY">Total current liabilities</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">1,524,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">1,333,000</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P>LONG-TERM LIABILITIES:</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP"><DIR>

<FONT FACE="Courier New" SIZE=1><P>Debt, net of current portion</DIR>
</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">410,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">522,000</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP"><DIR>

<FONT FACE="Courier New" SIZE=1><P ALIGN="JUSTIFY">Deferred liabilities</DIR>
</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">   962,000</U></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">   957,000</U></FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP"><DIR>
<DIR>

<FONT FACE="Courier New" SIZE=1><P ALIGN="JUSTIFY">Total long-term liabilities</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">1,372,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">1,479,000</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P>MINORITY INTERESTS IN PARTNERSHIPS</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">584,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">620,000</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P>STOCKHOLDERS' EQUITY:</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P>Convertible preferred stock, $.01 par value; 5,000,000</P><DIR>

<P>shares authorized, 1,240,000 issued and outstanding</DIR>
</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP"><DIR>

<FONT FACE="Courier New" SIZE=1><P>as of March 31, 2006 and September 30, 2005</DIR>
</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">12,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">12,000</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P>Common stock, $.001 par value; 50,000,000 shares</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP"><DIR>

<FONT FACE="Courier New" SIZE=1><P>authorized, 2,529,681 shares issued and outstanding</DIR>
</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP"><DIR>

<FONT FACE="Courier New" SIZE=1><P>as of March 31, 2006 and 2,497,647 shares issued</DIR>
</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP"><DIR>

<FONT FACE="Courier New" SIZE=1><P>and outstanding as of September 30, 2005</DIR>
</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">3,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">2,000</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P>Capital contributed in excess of par value</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">17,113,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">17,053,000</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P>Accumulated deficit</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">(11,580,000)</U></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">(11,068,000)</U></FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP"><DIR>
<DIR>

<FONT FACE="Courier New" SIZE=1><P ALIGN="JUSTIFY">Total stockholders' equity</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">   5,548,000</U></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">   5,999,000</U></FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P>TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">  $9,028,000</U></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">  $9,431,000</U></FONT></TD>
</TR>
</TABLE>

<FONT FACE="Courier New" SIZE=1 COLOR="#000080"><P ALIGN="CENTER"></P>
<P ALIGN="CENTER">See accompanying notes to condensed consolidated financial statements</P>
</FONT><FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">-3-</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<B><P ALIGN="CENTER">GOOD TIMES RESTAURANTS INC. AND SUBSIDIARIES</P>
<P ALIGN="CENTER">CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS</P>
<P ALIGN="CENTER">(Unaudited)</P>
</B><P ALIGN="CENTER"></P></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=600>
<TR><TD WIDTH="40%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="30%" VALIGN="TOP">
<B><FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">Three Months Ended</P>
<P ALIGN="CENTER">March 31,</B></FONT></TD>
<TD WIDTH="30%" VALIGN="TOP">
<B><FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">Six Months Ended</P>
<P ALIGN="CENTER">March 31</B></FONT></TD>
</TR>
</TABLE>

<FONT FACE="Courier New" SIZE=1></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=600>
<TR><TD WIDTH="40%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">
<B><U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">2006</B></U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<B><U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">2005</B></U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<B><U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">2006</B></U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<B><U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">2005</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P>NET REVENUES:</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT"> </FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT"> </FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP"><DIR>

<FONT FACE="Courier New" SIZE=1><P>Restaurant sales, net</DIR>
</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">$4,549,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">$3,673,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">$8,801,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">$7,388,000</FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP"><DIR>

<FONT FACE="Courier New" SIZE=1><P>Franchise revenues</DIR>
</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">   151,000</U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">   102,000</U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">   261,000</U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">   205,000</U></FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP"><DIR>

<FONT FACE="Courier New" SIZE=1><P>Total revenues</DIR>
</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">4,700,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">3,775,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">9,062,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">7,593,000</FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P>RESTAURANT OPERATING COSTS:</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP" HEIGHT=9><DIR>

<FONT FACE="Courier New" SIZE=1><P>Food and packaging costs</DIR>
</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=9>
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">1,475,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=9>
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">1,190,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=9>
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">2,842,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=9>
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">2,483,000</FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP"><DIR>

<FONT FACE="Courier New" SIZE=1><P>Payroll and other employee benefit costs</DIR>
</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">1,554,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">1,235,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">3,013,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">2,461,000</FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP"><DIR>

<FONT FACE="Courier New" SIZE=1><P>Occupancy and other operating costs</DIR>
</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">911,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">680,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">1,763,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">1,353,000</FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP"><DIR>

<FONT FACE="Courier New" SIZE=1><P>Accretion of deferred rent</DIR>
</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">10,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">9,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">19,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">18,000</FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP"><DIR>

<FONT FACE="Courier New" SIZE=1><P>Opening costs</DIR>
</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">35,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">7,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">76,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">7,000</FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP"><DIR>

<FONT FACE="Courier New" SIZE=1><P>Depreciation and amortization</DIR>
</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">   243,000</U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">   192,000</U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">   458,000</U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">   384,000</U></FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP"><DIR>

<FONT FACE="Courier New" SIZE=1><P>Total restaurant operating costs</DIR>
</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">4,228,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">3,313,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">8,171,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">6,706,000</FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP"><DIR>

<FONT FACE="Courier New" SIZE=1><P>General and administrative costs</DIR>
</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">329,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">379,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">774,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">726,000</FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP"><DIR>

<FONT FACE="Courier New" SIZE=1><P>Advertising costs</DIR>
</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">274,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">277,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">540,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">558,000</FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP"><DIR>

<FONT FACE="Courier New" SIZE=1><P>(Gain) loss on sale of restaurant building and equipment</DIR>
</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">   (8,000)</U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">   (2,000)</U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT"> (38,000)</U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">   (8,000)</U></FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P>LOSS FROM OPERATIONS</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">(123,000)</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">(192,000)</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">(385,000)</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">(389,000)</FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P>OTHER INCOME AND (EXPENSES):</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP"><DIR>

<FONT FACE="Courier New" SIZE=1><P>Minority income (expense), net</DIR>
</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">(26,000)</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">(23,000)</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">(58,000)</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">(35,000)</FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP"><DIR>

<FONT FACE="Courier New" SIZE=1><P>Interest, net</DIR>
</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">22,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">10,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">47,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">9,000</FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP"><DIR>

<FONT FACE="Courier New" SIZE=1><P>Other, net</DIR>
</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">  (36,000)</U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">  (24,000)</U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">  (89,000)</U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">  (48,000)</U></FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP"><DIR>

<FONT FACE="Courier New" SIZE=1><P>Total other income and (expenses)</DIR>
</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">  (40,000)</U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">  (37,000)</U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT"> (100,000)</U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">  (74,000)</U></FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P>NET LOSS</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">($163,000)</U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">($229,000)</U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">($485,000)</U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">($463,000)</U></FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP"><DIR>

<FONT FACE="Courier New" SIZE=1><P>Less imputed preferred stock dividend</DIR>
</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">         0</U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">   533,000</U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">         0</U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">   533,000</U></FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P>NET LOSS AVAILABLE TO COMMON STOCKHOLDERS</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">($163,000)</U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">($762,000)</U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">($485,000)</U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">($996,000)</U></FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P>BASIC AND DILUTED NET LOSS PER COMMON SHARE</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">    ($.06)</U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">    ($.32)</U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">    ($.19)</U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">    ($.42)</U></FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P>WEIGHTED AVERAGE COMMON SHARES AND EQUIVALENTS USED IN PER SHARE CALCULATION</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP"><DIR>

<FONT FACE="Courier New" SIZE=1><P>BASIC AND DILUTED</DIR>
</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">2,513,828</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">2,360,861</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">2,502,876</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">2,356,992</FONT></TD>
</TR>
</TABLE>

<FONT FACE="Courier New" SIZE=1 COLOR="#000080"><P ALIGN="CENTER"></P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">See accompanying notes to condensed consolidated financial statements</P>
<P ALIGN="CENTER">-4-</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
</FONT><B><FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">GOOD TIMES RESTAURANTS INC. AND SUBSIDIARIES</P>
<P ALIGN="CENTER">CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS</P>
<P ALIGN="CENTER">(Unaudited)</P>
</B><P ALIGN="CENTER"></P></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=625>
<TR><TD WIDTH="40%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="30%" VALIGN="TOP"><DIR>

<B><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">Three Months Ended March 31,</DIR>
</B></FONT></TD>
<TD WIDTH="30%" VALIGN="TOP">
<B><FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">Six Months Ended March 31,</B></FONT></TD>
</TR>
</TABLE>

<FONT FACE="Courier New" SIZE=1></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=654>
<TR><TD WIDTH="43%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<B><U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">2006</B></U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<B><U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">2005</B></U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<B><U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">2006</B></U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<B><U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">2005</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P>CASH FLOWS FROM OPERATING ACTIVITIES:</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT"> </FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT"> </FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP"><DIR>

<FONT FACE="Courier New" SIZE=1><P>Net loss</DIR>
</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">($163,000)</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">($229,000)</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">($485,000)</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">($463,000)</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP"><DIR>

<FONT FACE="Courier New" SIZE=1><P>Adjustments to reconcile net loss to net cash provided by (used in) operating activities:</DIR>
</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP"><DIR>
<DIR>

<FONT FACE="Courier New" SIZE=1><P>Depreciation and amortization</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">244,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">193,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">461,000</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">388,000</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP"><DIR>
<DIR>

<FONT FACE="Courier New" SIZE=1><P>Accretion of deferred rent</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">10,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">9,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">19,000</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">18,000</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP"><DIR>
<DIR>

<FONT FACE="Courier New" SIZE=1><P>Minority interest</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">26,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">23,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">58,000</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">35,000</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP"><DIR>
<DIR>

<FONT FACE="Courier New" SIZE=1><P>Recognition of deferred (gain) on sale of restaurant building</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">(8,000)</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">(6,000)</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">(14,000)</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">(11,000)</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP"><DIR>
<DIR>

<FONT FACE="Courier New" SIZE=1><P>Loss (gain) on sale of restaurant equipment</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">3,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">(24,000)</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">3,000</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP"><DIR>
<DIR>

<FONT FACE="Courier New" SIZE=1><P>Changes in operating assets and liabilities:</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP"><DIR>
<DIR>

<FONT FACE="Courier New" SIZE=1><P>(Increase) decrease in:</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP"><DIR>
<DIR>
<DIR>

<FONT FACE="Courier New" SIZE=1><P>Receivables and other</DIR>
</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">(120,000)</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">(9,000)</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">(62,000)</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">(84,000)</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP"><DIR>
<DIR>
<DIR>

<FONT FACE="Courier New" SIZE=1><P>Inventories</DIR>
</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">15,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">5,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">(15,000)</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">(6,000)</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP"><DIR>
<DIR>
<DIR>

<FONT FACE="Courier New" SIZE=1><P>Deposits and other</DIR>
</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">(6,000)</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">69,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">(11,000)</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">35,000</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP"><DIR>
<DIR>

<FONT FACE="Courier New" SIZE=1><P>(Decrease) increase in:</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP"><DIR>
<DIR>
<DIR>

<FONT FACE="Courier New" SIZE=1><P>Accounts payable</DIR>
</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">(266,000)</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">174,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">(35,000)</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">26,000</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP"><DIR>
<DIR>
<DIR>

<FONT FACE="Courier New" SIZE=1><P>Accrued liabilities and deferred income</DIR>
</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">  166,000</U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">__309,000</U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">___221,000</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">___318,000</U></FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP"><DIR>
<DIR>

<FONT FACE="Courier New" SIZE=1><P>Net cash provided by (used in) operating activities</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">(102,000)</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">541,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">113,000</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">259,000</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P>CASH FLOWS USED IN INVESTING ACTIVITIES</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP"><DIR>
<DIR>

<FONT FACE="Courier New" SIZE=1><P>Payments for the purchase of property and equipment</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">(258,000)</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">(190,000)</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">(1,512,000)</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">(309,000)</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP"><DIR>
<DIR>

<FONT FACE="Courier New" SIZE=1><P>Sale of investments</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">1,900,000</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">0</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP"><DIR>
<DIR>

<FONT FACE="Courier New" SIZE=1><P>Proceeds from sale of asset</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">14,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">14,000</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">0</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP"><DIR>
<DIR>

<FONT FACE="Courier New" SIZE=1><P>Loans made to franchisees and to others</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">(74,000)</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">0</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP"><DIR>
<DIR>

<FONT FACE="Courier New" SIZE=1><P>Payments received on loans to franchisees and to others</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">   20,000</U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">   13,000</U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">     63,000</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">   24,000</U></FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP"><DIR>
<DIR>

<FONT FACE="Courier New" SIZE=1><P>Net cash provided by (used in) investing activities</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">(224,000)</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">(177,000)</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">391,000</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">(285,000)</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P>CASH FLOWS FROM FINANCING ACTIVITIES:</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP"><DIR>

<FONT FACE="Courier New" SIZE=1><P>Principal payments on notes payable, capital leases, and long term debt</DIR>
</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">&nbsp;</P>
<P ALIGN="RIGHT">(55,000)</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">&nbsp;</P>
<P ALIGN="RIGHT">(52,000)</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">&nbsp;</P>
<P ALIGN="RIGHT">(109,000)</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">&nbsp;</P>
<P ALIGN="RIGHT">(103,000)</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP"><DIR>

<FONT FACE="Courier New" SIZE=1><P>Repayments on line of credit</DIR>
</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">0</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">(305,000)</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP"><DIR>

<FONT FACE="Courier New" SIZE=1><P>Net proceeds from preferred stock offering</DIR>
</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">2,722,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">(14,000)</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">2,722,000</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP"><DIR>

<FONT FACE="Courier New" SIZE=1><P>Proceeds from exercise of options</DIR>
</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">63,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">39,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">75,000</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">65,000</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP"><DIR>

<FONT FACE="Courier New" SIZE=1><P>Net distributions paid to minority interests in partnerships</DIR>
</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">(36,000)</U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">  (48,000)</U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">  (94,000)</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">  (87,000)</U></FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP"><DIR>
<DIR>

<FONT FACE="Courier New" SIZE=1><P>Net cash provided by (used in) financing activities</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">(28,000)</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">2,661,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">(142,000)</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">2,292,000</FONT></TD>
</TR>
</TABLE>

<FONT FACE="Courier New" SIZE=1 COLOR="#000080"><P ALIGN="CENTER"></P>
<P ALIGN="CENTER">See accompanying notes to condensed consolidated financial statements</P>
<P ALIGN="CENTER">-5-</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
</FONT><B><FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">GOOD TIMES RESTAURANTS INC. AND SUBSIDIARIES</P>
<P ALIGN="CENTER">CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS CONTINUED</P>
<P ALIGN="CENTER">(Unaudited)</P>
</B><P ALIGN="CENTER"></P>
<P ALIGN="CENTER">&nbsp;</P></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=613>
<TR><TD WIDTH="41%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="29%" VALIGN="TOP"><DIR>

<B><FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">Three Months Ended March 31,</DIR>
</B></FONT></TD>
<TD WIDTH="29%" VALIGN="TOP"><DIR>

<B><FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">Six Months Ended March 31,</DIR>
</B></FONT></TD>
</TR>
</TABLE>

<FONT FACE="Courier New" SIZE=1></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=613>
<TR><TD WIDTH="41%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">
<B><U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">2006</B></U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP"><DIR>

<B><U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">2005</DIR>
</B></U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP"><DIR>

<B><U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">2006</DIR>
</B></U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP"><DIR>

<B><U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">2005</DIR>
</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT"> </FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT"> </FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT"> </FONT></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P>INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">($354,000)</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">$3,025,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">$362,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">$2,266,000</FONT></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P>CASH AND CASH EQUIVALENTS, beginning of period</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">$2,479,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">$1,037,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">$1,763,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">$1,796,000</FONT></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P>CASH AND CASH EQUIVALENTS, end of period</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">$2,125,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">$4,062,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">$2,125,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">$4,062,000</FONT></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P>SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP"><DIR>

<FONT FACE="Courier New" SIZE=1><P>Cash paid for interest</DIR>
</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">$13,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">$16,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">$27,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">$34,000</FONT></TD>
</TR>
</TABLE>

<FONT FACE="Courier New" SIZE=1 COLOR="#000080"><P ALIGN="CENTER"></P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">See accompanying notes to condensed consolidated financial statements</P>
<P ALIGN="CENTER">-6-</P>
</FONT><FONT FACE="Courier New" SIZE=1>
<P>&nbsp;</P>
<P>&nbsp;</P>
<B><P ALIGN="CENTER">GOOD TIMES RESTAURANTS INC. AND SUBSIDIARIES</P>
<P ALIGN="CENTER">NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</P>
<P ALIGN="CENTER">(Unaudited)</P>
</B><P>1.&#9;UNAUDITED FINANCIAL STATEMENTS</P>
<P ALIGN="JUSTIFY">In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all of the normal recurring adjustments necessary to present fairly the financial position of the Company as of March 31, 2006, the results of its operations and its cash flows for the three and six month periods ended March 31, 2006.  Operating results for the three and six month periods ended March 31, 2006 are not necessarily indicative of the results that may be expected for the year ending September 30, 2006.</P>
<P ALIGN="JUSTIFY">The condensed consolidated balance sheet as of September 30, 2005 is derived from the audited financial statements, but does not include all disclosures required by United States generally accepted accounting principles.  As a result, these financial statements should be read in conjunction with the Company's Form 10-KSB for the fiscal year ended September 30, 2005.</P>
<I><P>Reclassification:</I>  Certain prior quarter balances have been reclassified to conform to the current quarter's presentation.  Such reclassifications had no effect on the net loss.</P>
<I><P ALIGN="JUSTIFY">Stock-based compensation disclosures:</I>  We apply APB Opinion 25 and related interpretations in accounting for stock options and warrants which are granted to employees.  Accordingly, no compensation cost has been recognized for grants of options and warrants to employees since the exercise prices were not less than the fair value of our common stock on the grant dates.  Had compensation cost been determined based on the fair value at the grant dates for awards under those plans consistent with the method of SFAS No. 123, our net loss and net loss per share would have been changed to the pro forma amounts indicated below.</P></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=655>
<TR><TD WIDTH="42%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="30%" VALIGN="TOP">
<B><FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">Three Months Ended<U> March 31,</B></U></FONT></TD>
<TD WIDTH="27%" VALIGN="TOP">
<B><FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">Six Months Ended March<U> 31,</B></U></FONT></TD>
</TR>
</TABLE>

<FONT FACE="Courier New" SIZE=1></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=667>
<TR><TD WIDTH="42%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP"><DIR>

<B><U><FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">2006</DIR>
</B></U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP"><DIR>

<B><U><FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">2005</DIR>
</B></U></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP"><DIR>

<B><U><FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">2006</DIR>
</B></U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<B><U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">2005</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P>Net loss - as reported</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">($163,000)</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">($762,000)</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">($485,000)</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">($ 996,000)</FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P>Effect of employee stock-based compensation per SFAS 123</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">  (34,000)</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">_(20,000)</U></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT"></P>
<U><P ALIGN="RIGHT"> (68,000)</U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT"></P>
<U><P ALIGN="RIGHT">  (41,000)</U></FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P>Net loss applicable to common stock (pro forma)</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">(197,000)</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">(782,000)</U></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">(553,000)</U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">(1,037,000)</U></FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P>Basic and Diluted:</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP"><DIR>

<FONT FACE="Courier New" SIZE=1><P>Loss per common share - as reported</DIR>
</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">$    (.06)</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">$   (.32)</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">$   (.19)</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">$    (.42)</FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P>Per share effect of employee stock-based compensation per SFAS 123</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">$    (.02)</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">$   (.01)</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">$   (.03)</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">$    (.02)</FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P>Loss per share applicable to common stock (pro forma)</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">$    (.08)</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">$   (.33)</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">$   (.22)</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">$    (.44)</FONT></TD>
</TR>
</TABLE>

<FONT FACE="Courier New" SIZE=1>
<P>The assumptions used in calculating the fair value of options granted during the period are as follows:</P>
</FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=619>
<TR><TD WIDTH="63%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="37%" VALIGN="TOP">
<B><FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">Three and Six Months Ended March 31,</B></FONT></TD>
</TR>
</TABLE>

<FONT FACE="Courier New" SIZE=1></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=619>
<TR><TD WIDTH="63%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<B><U><FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">2005</B></U></FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<B><U><FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">2004</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="JUSTIFY">Expected volatility</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">58%</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">68%</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="JUSTIFY">Risk-free interest rate</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">4.19%</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">4.14%</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="JUSTIFY">Expected dividends</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="JUSTIFY">Expected terms (in years)</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">5 - 10</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">5 - 10</FONT></TD>
</TR>
</TABLE>

<FONT FACE="Courier New" SIZE=1>
<P>2.&#9;CONTINGENT LIABILITY</P>
<P ALIGN="JUSTIFY">We remain contingently liable on various restaurant leases that were previously sold.  We are also a guarantor on a Small Business Administration loan to a franchisee.  We have never experienced any losses nor do we anticipate any future losses from these contingent liabilities.</P>
<P ALIGN="JUSTIFY">3.&#9;STOCK TRANSACTIONS</P>
<P>None.</P>
<P ALIGN="CENTER">-7-</P><DIR>
<DIR>
<DIR>

<B><P>ITEM 2.&#9;MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION</P>
<P>&#9;AND RESULTS OF OPERATIONS FOR THE COMPANY</P></DIR>
</DIR>
</DIR>

<U><P>General</P>
</B></U><P ALIGN="JUSTIFY">This Form 10-QSB contains or incorporates by reference forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended.  Also, documents subsequently filed by us with the SEC and incorporated herein by reference may contain forward-looking statements.  We caution investors that any forward-looking statements made by us are not guarantees of future performance and actual results could differ materially from those in the forward-looking statements as a result of various factors, including but not limited to the following:</P><DIR>
<DIR>

<P ALIGN="JUSTIFY">(I)&#9;We compete with numerous well-established competitors who have substantially greater financial resources and longer operating histories than we do.  Competitors have increasingly offered selected food items and combination meals, including hamburgers, at discounted prices, and continued discounting by competitors may adversely affect revenues and profitability of Company restaurants.</P>
<P ALIGN="JUSTIFY">(II)&#9;We may be negatively impacted if we experience consistent same store sales declines.  Same store sales comparisons will be dependent, among other things, on the success of our advertising and promotion of new and existing menu items.  No assurances can be given that such advertising and promotions will in fact be successful.</P></DIR>
</DIR>

<P ALIGN="JUSTIFY">We may also be negatively impacted by other factors common to the restaurant industry such as: changes in consumer tastes away from red meat and fried foods; increases in the cost of food, paper, labor, health care, workers' compensation or energy; inadequate number of hourly paid employees; and/or decreases in the availability of affordable capital resources.  We caution the reader that such risk factors are not exhaustive, particularly with respect to future filings.</P>
<I><P ALIGN="JUSTIFY">Preferred Stock Offering</P>
</I><P ALIGN="JUSTIFY">On February 10, 2005 we closed on the private placement of a total of 1,240,000 shares of Series B Preferred Stock for $2.50 per share, including 60,000 shares issued to one of the investors in consideration for advice and assistance with respect to the sale of 1,000,000 shares of the Series B Preferred Stock.  A current significant stockholder purchased 180,000 of the shares of Series B Preferred Stock. The aggregate purchase price for the 1,180,000 shares issued for cash was $2,950,000.  Net proceeds of approximately $2,666,000 include $133,336 paid to Eric W. Reinhard (Board Chairman) for a fee related to raising capital.  Each share of Series B Preferred Stock will be convertible at the option of the holder into one share of common stock, subject to certain anti-dilution provisions.  Subsequent to February 10, 2006 we have certain mandatory conversion rights. The preferred shares also have additional voting rights, restrictions and provisions as disclosed in our Proxy Statement fil
ed as part of our September 30, 2004 annual report. The preferred shares will accrue dividends at the rate of 6% per annum beginning on the first anniversary of the issuance of the shares.  A declared dividend of $25,000 for the period from February 10, 2006 to March 31, 2006 has been accrued and is payable on May 15, 2006.  The Series B Preferred Stock had a beneficial conversion feature because the quoted market price of Good Times Restaurants' common stock on the commitment date was higher than the conversion price of $2.50.  The imputed preferred stock dividend at the commitment date was $533,000 (1,240,000 shares multiplied by the difference in the market value at the commitment date of $2.93 and the conversion price of $2.50).  This amount was reflected in the September 30, 2005 10-KSB filing as a reduction of net income available to common stockholders.  We are using the net proceeds from the preferred stock offering for the development of new restaurants and for the refurbishment of existing restaura
nts.</P>
<I><P ALIGN="JUSTIFY">Development</P>
</I><P ALIGN="JUSTIFY">We had forty-four restaurants open at March 31, 2006 of which twenty-one were franchised or licensed, eight were joint-ventured and fifteen were company-owned compared to forty restaurants open at March 31, 2005, of which twenty-one were franchised or licensed, eight were joint-ventured and eleven were company-owned.</P>
<P ALIGN="JUSTIFY">During fiscal 2005 we opened one new company-owned Good Times restaurant in Aurora, Colorado in September 2005.  In April, 2005 we purchased one existing Good Times restaurant from a franchisee and converted it to a company-owned restaurant under the co-brand format in June 2005.  We opened one company-owned Good Times restaurant in December 2005 and purchased an additional franchised restaurant and converted it to a company-owned restaurant under the co-brand format in February 2006. Two franchised co-branded restaurants opened in Colorado and North Dakota in December and January, respectively.  One licensed Good Times restaurant opened in the Pepsi Center arena in December 2005.  We remodeled one existing company-owned restaurant to add a Daz Bog coffee kiosk in December 2005.</P>
<P ALIGN="CENTER">-8-</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="JUSTIFY">We anticipate opening three to four additional company-owned restaurants in Colorado during the remainder of 2006, two to three of which will be developed under the co-brand format.  We anticipate purchasing one additional restaurant from a franchisee and converting it to a company-owned restaurant under the co-brand format this year.  We also anticipate finalizing contracts on property for additional company-owned restaurants for opening in late 2006 and 2007.</P>
<P ALIGN="JUSTIFY">We anticipate opening seven additional franchised restaurants in 2006 in Colorado, North Dakota, Montana and Wyoming, five of which will be developed under the co-brand format.  Our co-brand test agreement with Taco John's International for the evaluation and determination of additional co-brand development expires in October, 2006 and we are currently negotiating a structure for further development beyond the test agreement, however there can be no assurance that such an agreement will be completed.</P>
<P ALIGN="JUSTIFY">We expect to complete minor exterior remodeling and patio and landscape improvements on six existing company-owned restaurants during the remainder of 2006.</P>
<P ALIGN="JUSTIFY">The following presents certain historical financial information of our operations.  This financial information includes results for the three and six months ended March 31, 2005 and results for the three and six months ended March 31, 2006.</P>
<B><U><P>Results of Operations</P>
</B></U><I><P>Net Revenues</P>
</I><P ALIGN="JUSTIFY">Net revenues for the three months ended March 31, 2006 increased $925,000 (24.5%) to $4,700,000 from $3,775,000 for the three months ended March 31, 2005.  Same store restaurant sales increased $13,000 (.30%) during the three months ended March 31, 2006 for the restaurants that were open for the full three month periods ending March 31, 2006 and March 31, 2005.  Restaurant sales increased $846,000 due to four new company-owned restaurants, one purchased from a franchisee in April 2005, one opened in September 2005, one opened in late December 2005 and, one purchased from a franchisee in November 2005.  Restaurant sales increased $17,000 due to one non-traditional company-owned restaurant not included in same store sales.  Our same store restaurant sales have continued to show positive trends over the last two years.  We have had same store sales increases in each of the last nine quarters.</P>
<P ALIGN="JUSTIFY">Franchise revenues increased $49,000 to $151,000 from $102,000 for the three months ended March 31, 2006 due to an increase in franchise royalties and franchise fee income compared to the same prior year period.  Same store franchise restaurant sales increased 2.6% during the three months ended March 31, 2006 for the franchise restaurants that were open for the full periods ending March 31, 2006 and March 31, 2005.  Two franchise restaurants that opened in the fourth quarter of fiscal 2004 are not included in the same store sales group as they had not been open for eighteen months as of March 31, 2006.</P>
<P ALIGN="JUSTIFY">Net revenues for the six months ended March 31, 2006 increased $1,469,000 (19.3%) to $9,062,000 from $7,593,000 for the six months ended March 31, 2005.  Same store restaurant sales increased $64,000 (.9%) during the six months ended March 31, 2006 for the restaurants that were open for the full six month periods ended March 31, 2006 and March 31, 2005.  Restaurants sales increased $1,353,000 due to the four new company-owned restaurants, and decreased $4,000 due to one non-traditional company-owned restaurant not included in same store sales.</P>
<P ALIGN="JUSTIFY">Franchise revenues for the six months ended March 31, 2006 increased $56,000 to $261,000 from $205,000 for the six months ended March 31, 2005 due to increases in franchise royalties and franchise fee income.  Same store franchise restaurant sales increased 2.2% during the six months ended March 31, 2006 for the franchise restaurants that were open for the full periods ended March 31, 2006 and March 31, 2005.  Two franchised co-brand restaurants were opened during the six months ended March 31, 2006, one in Ft. Collins, Colorado and one in Bismarck, North Dakota.</P>
<I><P>Restaurant Operating Costs</P>
</I><P ALIGN="JUSTIFY">Restaurant operating costs as a percent of restaurant sales were 92.9% during the three months ended March 31, 2006 compared to 90.2% in the same prior year period and were 92.9% during the six months ended March 31, 2006 compared to 90.8% in the same prior year period.</P>
<P ALIGN="CENTER">-9-</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="JUSTIFY">The changes in restaurant-level costs are explained as follows:</P></FONT>
<P ALIGN="RIGHT"><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=673>
<TR><TD WIDTH="59%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="21%" VALIGN="TOP">
<B><FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">Three Months Ended</P>
<U><P ALIGN="CENTER">March 31, 2006</B></U></FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<B><FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">Six Months Ended</P>
<U><P ALIGN="CENTER">March 31, 2006</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1>
<P>&nbsp;</P>
<P>Restaurant-level costs for the period ended</P>
<P>March 31, 2005</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">90.2%</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">90.8%</FONT></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P>Decrease in food and packaging costs</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">(1.3%)</FONT></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P>Increase in payroll and other employee benefit costs</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">.6%</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">.9%</FONT></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P>Increase in occupancy and other operating costs</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">1.5%</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">1.7%</FONT></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P>Increase in depreciation and amortization</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">.1%</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P>Increase in opening costs</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">.5%</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT">.8%</FONT></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P>Restaurant-level costs for the period ended</P>
<P>March 31, 2006</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">92.9%</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">92.9%</FONT></TD>
</TR>
</TABLE>
</P>

<FONT FACE="Courier New" SIZE=1>
<I><P>Food and Packaging Costs</P>
</I><P ALIGN="JUSTIFY">For the three months ended March 31, 2006 our food and packaging costs increased $285,000 to $1,475,000 (32.4% of restaurant sales) from $1,190,000 (32.4% of restaurant sales) compared to the same prior year period.  During the three months ended March 31, 2006 we ran a discount promotion which ended March 1, 2006 that had a negative effect on cost of sales.  We do not anticipate running the promotion in the future.</P>
<P ALIGN="JUSTIFY">For the six months ended March 31, 2006 our food and packaging costs increased $359,000 to $2,842,000 (32.3% of restaurant sales) from $2,483,000 (33.6% of restaurant sales) compared to the same prior year period.  Food and packaging costs decreased as a percentage of restaurant sales primarily due to: 1) limited menu price increases; 2) menu product engineering in portions and ingredients; 3) new product development; 4) new purchasing agreements; and, 5) increased vendor rebates in the current period compared to the same prior year period.  We anticipate additional moderate decreases to food and packaging costs as a percentage of sales for the balance of fiscal 2006 from purchasing efficiencies and limited menu price increases.</P>
<I><P ALIGN="JUSTIFY">Payroll and Other Employee Benefit Costs</P>
</I><P ALIGN="JUSTIFY">For the three months ended March 31, 2006 our payroll and other employee benefit costs increased $319,000 to $1,554,000 (34.2% of restaurant sales) from $1,235,000 (33.6% of restaurant sales) compared to the same prior year period.  The increase in payroll and other employee benefit expenses is partially the result of increased sales for the period.  Payroll and benefit costs are semi-variable and therefore increase or decrease as sales fluctuate.  Additionally, the current three-month period ending March 31, 2006 includes four additional company-owned restaurants that represent $278,000 of the $320,000 increase compared to the same prior year period.  The new restaurants operate at a higher labor cost as a percent of sales due to higher initial labor costs at new stores until they reach mature staffing levels.  The two co-brand restaurants also have a higher labor cost as a percent of sales.</P>
<P ALIGN="JUSTIFY">For the six months ended March 31, 2006 our payroll and other employee benefit costs increased $552,000 to $3,013,000 (34.2% or restaurant sales) from $2,461,000 (33.3% of restaurant sales) compared to the same prior year period.  The current six month period ending March 31, 2006 includes four additional company-owned restaurants that represent $470,000 of the $552,000 increase compared to the same prior year period.</P>
<I><P ALIGN="JUSTIFY">Occupancy and Other Operating Costs</P>
</I><P ALIGN="JUSTIFY">For the three months ended March 31, 2006 our occupancy and other operating costs increased $231,000 to $911,000 (20% of restaurant sales) from $680,000 (18.5% of restaurant sales) compared to the same prior year period.  For the three months ended March 31, 2006: 1) rent expense increased $95,000 from the same prior year period due to the addition of four company-owned restaurants.  Rent expense will continue to increase as a percent of sales as new company-owned restaurants are developed due to higher rent associated with sale-leaseback operating leases; 2) bank fees increased $13,000 from the prior year period due to increased use of credit cards by our customers as well as the four additional company-owned restaurants; and, 3) utility costs increased $35,000 from the prior year period due to the four additional company-owned restaurants and an overall increase in the cost of utilities.</P>
<P ALIGN="JUSTIFY">For the six months ended March 31, 2006 our occupancy and other operating costs increased $410,000 to $1,763,000 (20% of restaurant sales) from $1,353,000 (18.3% of restaurant sales) compared to the same prior year period.  For the six months ended March 31, 2006; 1) rent expense increased $159,000; 2) bank fees increased $24,000; and, 3) utility costs increased $73,000 from the same prior year period.</P>
<P ALIGN="CENTER">-10-</P>

<P>&nbsp;</P>
<P>&nbsp;</P>
<I><P>Opening Costs</P>
</I><P ALIGN="JUSTIFY">For the three months ended March 31, 2006, new store opening costs were $35,000 (.80% of restaurant sales) compared to $7,000 (.2% of restaurant sales) for the same prior year period.  The costs in the current period are associated with a company-owned restaurant that opened in late December 2005 as well as a company-owned restaurant that was converted to the Taco John's International co-brand and re-opened in February 2006.  Each new company-owned restaurant developed in fiscal 2006 will have approximately $50,000 of pre-open expenses.</P>
<P ALIGN="JUSTIFY">For the six months ended March 31, 2006 new store opening costs were $76,000 (.9% of restaurant sales) compared to $7,000 (.1% of restaurant sales) for the same prior year period.  The costs in the current period are associated with a company-owned restaurant that opened in late December 2005, the remodeling of a company-owned restaurant in Silverthorne, Colorado to add a Dazbog co-branded coffee operation and a company-owned restaurant that was converted to the Taco John's International co-brand in February 2006.</P>
<I><P>Depreciation and Amortization</P>
</I><P ALIGN="JUSTIFY">For the three months ended March 31, 2006 depreciation and amortization increased $51,000 to $243,000 (5.3% of restaurant sales) from $192,000 (5.2% of restaurant sales) compared to the same prior year period.  The $51,000 increase in depreciation and amortization for the three months ended March 31, 2006 is due to the addition of four company-owned restaurants.</P>
<P ALIGN="JUSTIFY">For the six months ended March 31, 2006 depreciation and amortization increased $74,000 to $458,000 (5.2% of restaurant sales) from $384,000 (5.2% of restaurant sales) compared to the same prior year period.  The $74,000 increase for the six months ended March 31, 2006 is due to the addition of four company-owned restaurants.</P>
<I><P ALIGN="JUSTIFY">General and Administrative Costs</P>
</I><P ALIGN="JUSTIFY">For the three months ended March 31, 2006, general and administrative costs decreased $50,000 to $329,000 (7% of total revenues) from $379,000 (10% of total revenues) for the same prior year period.  The decrease in general and administrative costs compared to the same prior year period is primarily attributable to a rebate negotiated with a primary supplier as well as decreases in training costs and professional services.  These decreases were offset by increases in payroll and employee benefit costs and directors' and officers' liability insurance premiums.</P>
<P ALIGN="JUSTIFY">For the six months ended March 31, 2006 general and administrative costs increased $48,000 to $774,000 (8.5% of total revenues) from $726,000 (9.6% of total revenues) for the same prior year period.</P>
<I><P ALIGN="JUSTIFY">Advertising Costs</P>
</I><P ALIGN="JUSTIFY">For the three months ended March 31, 2006 advertising costs decreased $3,000 to $274,000 (6% of restaurant sales) from $277,000 (7.5% of restaurant sales) for the same prior year period.</P>
<P ALIGN="JUSTIFY">For the six months ended March 31, 2006 advertising costs decreased $18,000 to $540,000 (6.1% of restaurant sales) from $558,000 (7.6% of restaurant sales) for the same prior year period.</P>
<P ALIGN="JUSTIFY">The decrease in advertising costs is primarily due to a reduction in the contribution percentage paid to the local advertising cooperative.  Contributions are made to the cooperative based on sales.</P>
<I><P>Loss From Operations</P>
</I><P ALIGN="JUSTIFY">We had a loss from operations of ($123,000) in the three months ended March 31, 2006 compared to a loss from operations of ($192,000) for the same prior year period.</P>
<P ALIGN="JUSTIFY">We had a loss from operations of ($385,000) in the six months ended March 31, 2006 compared to a loss from operations of ($389,000) for the same prior year period.</P>
<P ALIGN="JUSTIFY">The decrease in the loss from operations for the three and six month periods is due primarily to the increase in net revenues offset by other matters discussed in the "Restaurant Operating Costs" and "General and Administrative Costs" sections of Item 2.</P>
<I><P>Net Loss</P>
</I><P ALIGN="JUSTIFY">The net loss was ($163,000) for the three months ended March 31, 2006 compared to a net loss of ($229,000) for the same prior year period.  The change from the three month period ended March 31, 2005 to March 31, 2006 was primarily attributable to the decrease in loss from operations for the three months ended March 31, 2006, as well as: 1) an increase in net interest income of $12,000 compared to the same prior year period; 2) an increase in minority interest expense of $3,000 compared to the same prior year period; and, 3) an increase in other expenses of $12,000</P>
<P ALIGN="JUSTIFY">compared to the same prior year period.  The increase in other expenses is attributable to an increase in franchise support costs.</P>
<P ALIGN="CENTER">-11-</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<P>&nbsp;</P>
<P ALIGN="JUSTIFY">The net loss was ($485,000) for the six months ended March 31, 2006 compared to a net loss of ($463,000) for the same prior year period.  For the six month period ended March 31, 2006 minority interest expense increased $23,000 and other expenses increased $41,000 compared to the same prior year period.  In addition, net interest income increased $38,000 for the six months ended March 31, 2006 compared to the same prior year period.  The increase in other expenses is primarily attributable to an increase in franchise support costs as well as a $17,000 legal expense related to the settlement of a minor civil suit.</P>
<B><U><P>Liquidity and Capital Resources</P>
</B></U><I><P>Cash and Working Capital</P>
</I><P ALIGN="JUSTIFY">As of March 31, 2006, we had $2,125,000 cash and cash equivalents on hand.  We currently plan to use the cash balance and cash generated from operations for increasing our working capital reserves and, along with additional debt and equity financing, for the development of new company-owned restaurants.  We believe that the current cash on hand and additional cash expected from operations in fiscal 2006 will be sufficient to cover our working capital requirements for fiscal 2006. </P>
<P ALIGN="JUSTIFY">As of March 31, 2006, we had working capital of $1,086,000.  Because restaurant sales are collected in cash and accounts payable for food and paper products are paid two to four weeks later, restaurant companies often operate with working capital deficits.  We anticipate that working capital deficits will be incurred in the future as new restaurants are opened.</P>
<I><P>Capital Expenditures</P>
</I><P ALIGN="JUSTIFY">On November 30, 2005 the Company purchased the land, building, improvements and equipment from a franchisee for $1,121,000, for a restaurant located in Colorado Springs, Colorado.  The Company simultaneously sold the land, building and improvements to a third party in a sale-leaseback transaction for $1,115,000 in net proceeds and was re-opened as a co-branded restaurant, under the co-brand test agreement with Taco John's International, in February 2006.</P>
<P ALIGN="JUSTIFY">We are also currently negotiating purchase and lease agreements for additional company-owned and franchise restaurants and are negotiating debt and sale-leaseback financing for the development of those restaurants.  We anticipate opening three company-owned Good Times or co-branded restaurants in the remainder of 2006.  We also anticipate purchasing one existing restaurant from a franchisee and remodeling that restaurant to the co-brand format.  We also anticipate increasing the level of reinvestment in existing company-owned and joint venture restaurants to upgrade the exterior building image and improve the patios.</P>
<I><P ALIGN="JUSTIFY">Financing</P>
</I><P ALIGN="JUSTIFY">In March 2006 we entered into an operating agreement to form a limited liability company with a third party, the intent of which is to jointly develop and operate a Good Times restaurant in downtown Denver, Colorado.  We will own 51% of the entity, will be the managing member and therefore we will fully consolidate the operations in our financial statements.  We will contribute $255,000 to the limited liability company while the other member will contribute $245,000.  The restaurant is anticipated to open in July 2006.</P>
<I><P ALIGN="JUSTIFY">Cash Flows</P>
</I><P ALIGN="JUSTIFY">Net cash used in operating activities was $102,000 for the three months ended March 31, 2006.  The net cash used in operating activities for the three months ended March 31, 2006 was the result of a net loss of ($163,000) and non-cash reconciling items totaling $61,000 (comprised of depreciation and amortization of $244,000, minority interest of $26,000, and a decrease in accounts payable of $266,000 and a net increase in other operating assets and liabilities of $57,000).</P>
<P ALIGN="JUSTIFY">Net cash provided by operating activities was $541,000 for the three months ended March 31, 2005. The net cash provided by operating activities for the three months ended March 31, 2005 was the result of a net loss of ($229,000) and non-cash reconciling items totaling ($770,000) (comprised of depreciation and amortization of $193,000, minority interest of $23,000, an increase in accounts payable of $174,000, an increase in accrued and other liabilities of $309,000, and increases in operating assets and liabilities totaling $71,000).</P>
<P ALIGN="JUSTIFY">Net cash used in investing activities for the three months ended March 31, 2006 was $224,000 which reflects payments of $258,000 for the purchase of property and equipment (including $159,000 for new store development; $74,000 for remodeled restaurant costs; and, $25,000 for miscellaneous restaurant related capital expenditures), $20,000 in principal payments received on loans to franchisees and $14,000 in proceeds from the sale of miscellaneous restaurant equipment.</P>
<P ALIGN="CENTER">-12-</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="JUSTIFY">Net cash used in investing activities for the three months ended March 31, 2005 was $177,000, which reflects payments of $84,000 for new restaurant development costs, $106,000 in restaurant related capital expenditures and $13,000 in principal payments received on loans to franchisees.</P>
<P ALIGN="JUSTIFY">Net cash used in financing activities for the three months ended March 31, 2006 was $28,000, which includes principal payments on notes payable and long term debt of $55,000; distributions to minority interests in partnerships of $51,000; contributions from minority interests of $15,000; and, paid in capital activity of $63,000, related to the exercise of stock options.</P>
<P ALIGN="JUSTIFY">Net cash provided by financing activities for the three months ended March 31, 2005 was $2,661,000, which includes principal payments on notes payable and long term debt of $52,000, distributions to minority interests in partnerships of $48,000, paid in capital activity of $39,000 related to the exercise of stock options and paid in capital activity of $2,722,000 related to the preferred stock offering.</P>
<I><P>Contingencies</P>
</I><P ALIGN="JUSTIFY">We are contingently liable on several ground leases that have been subleased or assigned to franchisees.  We have never experienced any losses nor do we anticipate any future losses from these contingent lease liabilities.  We are also a guarantor on a Small Business Administration loan to a franchisee of approximately $242,000, which is collateralized by a first security interest on the building, equipment and operating assets of the restaurant and the personal guarantee of the franchisee.</P>
<B><U><P ALIGN="JUSTIFY">Impact of Inflation</P>
</B></U><P ALIGN="JUSTIFY">We experienced a significant impact from inflation in the commodity costs for beef, chicken, dairy and produce during fiscal 2004.  We experienced a moderation in the costs of most of these commodities during fiscal 2005.  It is anticipated that we will take moderate price increases during fiscal 2006, which may or may not be sufficient to recover increased commodity costs or increases in other operating expenses.</P>
<B><U><P ALIGN="JUSTIFY">Seasonality</P>
</B></U><P ALIGN="JUSTIFY">Revenues of the Company are subject to seasonal fluctuation based primarily on weather conditions adversely affecting restaurant sales in January, February and March.</P>
<B><P>ITEM 3.&#9;QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK</P>
</B><P ALIGN="JUSTIFY">There were no material changes in our exposure to market risk for the quarter ended March 31, 2006.</P>
<B><P>ITEM 4.&#9;CONTROLS AND PROCEDURES</P>
</B><P ALIGN="JUSTIFY">We maintain a system of disclosure controls and procedures that are designed for the purposes of ensuring that information required to be disclosed in our SEC reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including the Chief Executive Officer and the Controller, who currently performs the functions of principal financial officer for the Company, as appropriate to allow timely decisions regarding required disclosures.</P>
<P ALIGN="JUSTIFY">We have carried out an evaluation, under the supervision and with the participation of our management, including the Chief Executive Officer and the Controller, of the effectiveness of the design and operation of our disclosure controls and procedures.  Based upon that evaluation, the Chief Executive Officer and the Controller concluded that our disclosure controls and procedures are effective for the purposes discussed above as of the end of the period covered by this report.  There have been no significant changes in our internal controls or in other factors that could significantly affect these controls during the quarter ended March 31, 2006.</P>
<P ALIGN="CENTER">-13-</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<B><P>GOOD TIMES RESTAURANTS INC. AND SUBSIDIARIES</P>
</B><P>Part II.&#9;Other Information</P><DIR>
<DIR>
<DIR>

<P>Item 1.&#9;Legal Proceedings</P></DIR>
</DIR>
</DIR>

<P>Good Times Restaurants is subject to legal proceedings which are incidental to its business.  These legal proceedings are not expected to have a material impact on the Company.</P><DIR>
<DIR>
<DIR>

<P>Item 2.&#9;Changes in Securities and Use of Proceeds</P></DIR>

<P>None.</P><DIR>

<P>Item 3.&#9;Defaults Upon Senior Securities</P></DIR>

<P>None.</P></DIR>

<P>Item 4.&#9;Submission of Matters to a Vote of Security Holders</P>
<P ALIGN="JUSTIFY">Proposal #1&#9;Election of the following directors to serve during the ensuring year:</P>
</DIR>
</FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=456>
<TR><TD WIDTH="50%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="28%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">FOR</U></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">WITHHOLD</U></FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P>GEOFFREY R BAILEY</FONT></TD>
<TD WIDTH="28%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">2,232,638</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">31,352</FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P>RON GOODSON</FONT></TD>
<TD WIDTH="28%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">2,234,798</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">29,192</FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P>DAVE GRISSEN</FONT></TD>
<TD WIDTH="28%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">2,234,798</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">29,192</FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P>BOYD E HOBACK</FONT></TD>
<TD WIDTH="28%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">2,232,698</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">31,292</FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P>ERIC REINHARD</FONT></TD>
<TD WIDTH="28%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">2,233,456</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">30,534</FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P>RICHARD J. STARK</FONT></TD>
<TD WIDTH="28%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">2,231,556</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">32,434</FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P>ALAN A TERAN</FONT></TD>
<TD WIDTH="28%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">2,234,810</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">29,180</FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<FONT FACE="Courier New" SIZE=1><DIR>
<DIR>
<DIR>

<P>Item 5.&#9;Other Information</P></DIR>

<P>None.</P><DIR>

<P>Item 6.&#9;Exhibits and Reports on Form 8-K</P></DIR>

<P>(a)&#9;Exhibits.  The following exhibits are furnished as part of this report:</P></DIR>
</DIR>

<P>&#9;<U>Exhibit No.</U>&#9;<U>Description</P><DIR>
<DIR>

</U><P>*31.1&#9;Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350</P>
<P>*32.1&#9;Certification of Controller pursuant to 18 U.S.C. Section 1350</P>
<P>*32.1&#9;Certification of Chief Executive Officer and Controller pursuant to Section 906</P></DIR>
</DIR>

<P>*filed herewith</P>
<B><P ALIGN="CENTER">SIGNATURES</P>
</B>
<P ALIGN="JUSTIFY">In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.</P>
</FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=619>
<TR><TD WIDTH="39%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="61%" VALIGN="TOP">
<B><FONT FACE="Courier New" SIZE=1><P>GOOD TIMES RESTAURANTS INC.</B></FONT></TD>
</TR>
<TR><TD WIDTH="39%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="JUSTIFY">DATE: May 12, 2006</FONT></TD>
<TD WIDTH="61%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="39%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="61%" VALIGN="TOP"><DIR>

<U><FONT FACE="Courier New" SIZE=1><P>/s/ Boyd E. Hoback</DIR>
</U></FONT></TD>
</TR>
<TR><TD WIDTH="39%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="61%" VALIGN="TOP"><DIR>

<FONT FACE="Courier New" SIZE=1><P>Boyd E. Hoback, President and Chief Executive Officer</DIR>
</FONT></TD>
</TR>
<TR><TD WIDTH="39%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="61%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="39%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="61%" VALIGN="TOP"><DIR>

<U><FONT FACE="Courier New" SIZE=1><P>/s/ Susan M. Knutson</DIR>
</U></FONT></TD>
</TR>
<TR><TD WIDTH="39%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="61%" VALIGN="TOP"><DIR>

<FONT FACE="Courier New" SIZE=1><P>Susan M. Knutson, Controller</DIR>
</FONT></TD>
</TR>
</TABLE>

<FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER"></P>
<P ALIGN="CENTER">&nbsp;</P><DIR>

<P ALIGN="CENTER">-14-</P></DIR>
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<TYPE>EX-31
<SEQUENCE>2
<FILENAME>qsbquarter2ex31ceo.htm
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<TITLE>Exhibit 31</TITLE>
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<BODY>

<U><FONT FACE="Microsoft Sans Serif" SIZE=2><P>Exhibit 31.1</P>
</U><B><P ALIGN="CENTER">CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER</P>
</B><DIR>

<P ALIGN="JUSTIFY">I, Boyd E. Hoback, certify that:</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">1.&#9;I have reviewed this quarterly report on Form 10-QSB of Good Times Restaurants Inc.;</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">2.&#9;Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">3.&#9;Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">4.&#9;The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15e and 15d-15e) for the registrant and have:</P>
<P ALIGN="JUSTIFY"></P><DIR>
<DIR>

<P ALIGN="JUSTIFY">a)&#9;Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;</P>
<P ALIGN="JUSTIFY">b)&#9;Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and</P>
<P ALIGN="JUSTIFY">c)&#9;Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.</P>
<P ALIGN="JUSTIFY"></P></DIR>
</DIR>

<P ALIGN="JUSTIFY">5.&#9;The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):</P>
<P ALIGN="JUSTIFY"></P><DIR>
<DIR>

<P ALIGN="JUSTIFY"><A NAME="OLE_LINK1">a)&#9;All significant deficiencies in the design or operation of internal controls which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and</P>
<P ALIGN="JUSTIFY">b)&#9;Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting.</P></DIR>
</DIR>
</DIR>

<P ALIGN="JUSTIFY"></A></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P>&nbsp;</P>
<P>Boyd E. Hoback</P>
<I><P>President and Chief Executive Officer</P>
</I><P>May 12, 2006</P></FONT></BODY>
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<TYPE>EX-31
<SEQUENCE>3
<FILENAME>qsbquarter2ex31controller.htm
<TEXT>
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<HEAD>
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<TITLE>Exhibit 31</TITLE>
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<BODY>

<U><FONT FACE="Microsoft Sans Serif" SIZE=2><P>Exhibit 31.1</P>
</U><B><P ALIGN="CENTER">CERTIFICATION OF THE CONTROLLER</P>
</B><DIR>

<P ALIGN="JUSTIFY">I, Susan M. Knutson, certify that:</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">1.&#9;I have reviewed this quarterly report on Form 10-QSB of Good Times Restaurants Inc.;</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">2.&#9;Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">3.&#9;Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">4.&#9;The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15e and 15d-15e) for the registrant and have:</P>
<P ALIGN="JUSTIFY"></P><DIR>
<DIR>

<P ALIGN="JUSTIFY">a)&#9;Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;</P>
<P ALIGN="JUSTIFY">b)&#9;Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and</P>
<P ALIGN="JUSTIFY">c)&#9;Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.</P>
<P ALIGN="JUSTIFY"></P></DIR>
</DIR>

<P ALIGN="JUSTIFY">5.&#9;The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):</P>
<P ALIGN="JUSTIFY"></P><DIR>
<DIR>

<P ALIGN="JUSTIFY">a)&#9;All significant deficiencies in the design or operation of internal controls which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and</P>
<P ALIGN="JUSTIFY">b)&#9;Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting.</P>
<P ALIGN="JUSTIFY"></P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P></DIR>
</DIR>
</DIR>

<P>Susan M. Knutson</P>
<I><P>Controller</P>
</I><P>May 12, 2006</P></FONT></BODY>
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<TYPE>EX-32
<SEQUENCE>4
<FILENAME>qsbquarter2ex32both.htm
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<TITLE>Exhibit 32</TITLE>
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<BODY>

<U><FONT FACE="Microsoft Sans Serif" SIZE=2><P>Exhibit 32.1</P>
</U><B><P ALIGN="CENTER">CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, </P>
<P ALIGN="CENTER">AS ADOPTED PURSUANT TO</P>
<P ALIGN="CENTER">SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002</P>
</B>
<P ALIGN="JUSTIFY">In connection with the Quarterly Report on Form 10-QSB of Good Times Restaurants Inc. (the &quot;Company&quot;) for the period ended March 31, 2006 as filed with the Securities and Exchange Commission on the date hereof (the &quot;Report&quot;), I, Boyd E. Hoback, Chief Executive Officer and Susan M. Knutson, Controller of the Company, hereby certifies, pursuant to and solely for the purpose of 18 U.S.C. &nbsp;1350, as adopted pursuant to &nbsp;906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge and belief:</P>
<P ALIGN="JUSTIFY">(1)&#9;The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and</P>
<P ALIGN="JUSTIFY">(2)&#9;The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.</P>

<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>Boyd E. Hoback&#9;Susan M. Knutson</P>
<P>Chief Executive Officer&#9;Controller (principal financial officer)</P>
<P>May 12, 2006&#9;May 12, 2006</P>
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