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<SEC-DOCUMENT>0000825324-10-000012.txt : 20100517
<SEC-HEADER>0000825324-10-000012.hdr.sgml : 20100517
<ACCEPTANCE-DATETIME>20100517145255
ACCESSION NUMBER:		0000825324-10-000012
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20100331
FILED AS OF DATE:		20100517
DATE AS OF CHANGE:		20100517

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:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-18590
		FILM NUMBER:		10837841

	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>10-Q
<SEQUENCE>1
<FILENAME>qsecond101.htm
<TEXT>
<html>

<head>
<!-- Document Prepared With E-Services, LLC HTML Software-->
<!-- Copyright 2006 E-Services, LLC.-->
<!-- All rights reserved EDGAR2.com -->



<title>UNITED STATES</title>



</head>

<body lang=EN-US vlink=purple>

















<p class=MsoNormal align=center style='text-align:center'>UNITED
STATES</p>

<p class=MsoNormal align=center style='text-align:center'>SECURITIES
 AND EXCHANGE COMMISSION</p>

<p class=MsoNormal align=center style='text-align:center'>WASHINGTON, D.C. 20549</p>



<p class=MsoNormal align=center style='text-align:center'>FORM 10-Q</p>



<p class=MsoNormal>(Mark One)</p>



<p class=MsoNormal align=center style='text-align:center'>__<u>x</u>__&nbsp;QUARTERLY REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE</p>

<p class=MsoNormal align=center style='text-align:center'>ACT OF
1934</p>



<p class=MsoNormal align=center style='text-align:center'>For the
quarterly period ended March 31, 2010</p>



<p class=MsoNormal align=center style='text-align:center'>OR</p>



<p class=MsoNormal align=center style='text-align:center'>_____&nbsp;TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES</p>

<p class=MsoNormal align=center style='text-align:center'>EXCHANGE
ACT OF 1934</p>

<p class=MsoNormal align=center style='text-align:center'>Commission
File Number: 0-18590</p>



<p class=MsoNormal align=center style='text-align:center'>GOOD
TIMES RESTAURANTS, INC.</p>

<p class=MsoNormal align=center style='text-align:center'>(Exact
Name of Registrant as Specified in Its Charter)</p>



<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='border-collapse:collapse'>
 <tr style='height:15.45pt'>
  <td width=353 style='width:264.6pt;padding:0in 0in 0in 0in;height:15.45pt'>
  <p class=MsoNormal align=center style='text-align:center'>&nbsp;NEVADA &nbsp;</p>
  </td>
  <td width=14 style='width:10.75pt;padding:0in 0in 0in 0in;height:15.45pt'>

  </td>
  <td width=353 style='width:264.6pt;padding:0in 0in 0in 0in;height:15.45pt'>
  <p class=MsoNormal align=center style='text-align:center'>&nbsp;84-1133368</p>
  </td>
 </tr>
 <tr style='height:30.95pt'>
  <td width=353 style='width:264.6pt;padding:0in 0in 0in 0in;height:30.95pt'>
  <p class=MsoNormal align=center style='text-align:center'>(State
  or Other Jurisdiction of &nbsp;</p>
  <p class=MsoNormal align=center style='text-align:center'>Incorporation
  or Organization)</p>
  </td>
  <td width=14 style='width:10.75pt;padding:0in 0in 0in 0in;height:30.95pt'>

  </td>
  <td width=353 valign=top style='width:264.6pt;padding:0in 0in 0in 0in;
  height:30.95pt'>
  <p class=MsoNormal align=center style='text-align:center'>&nbsp;&nbsp;
  (I.R.S. Employer Identification Number)</p>
  </td>
 </tr>
</table>



<p class=MsoNormal align=center style='text-align:center'>601
CORPORATE CIRCLE, GOLDEN, CO 80401</p>

<p class=MsoNormal align=center style='text-align:center'>(Address
of Principal Executive Offices, Including Zip Code)</p>

<p class=MsoNormal align=center style='text-align:center'>(303) 384-1400</p>

<p class=MsoNormal align=center style='text-align:center'>(Registrant's
Telephone Number, Including Area Code)</p>



<p class=MsoNormal>Indicate by check mark whether the registrant: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 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 class=MsoNormal>Yes &nbsp; __<u>x__</u>&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; No
&nbsp;&nbsp;&nbsp; </p>



<p class=MsoNormal>Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer or a smaller
reporting company, as defined in Rule&nbsp;12b-2 of the Exchange Act<a
name="v122293_10q_htm_bm_______"></a> .</p>



<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='border-collapse:collapse'>
 <tr style='height:15.45pt'>
  <td width=356 style='width:266.85pt;padding:0in 0in 0in 0in;height:15.45pt'>
  <p class=MsoNormal style='margin-left:.55in'>Large accelerated filer ___</p>
  </td>
  <td width=106 style='width:79.85pt;padding:0in 0in 0in 0in;height:15.45pt'>

  </td>
  <td width=258 style='width:193.25pt;padding:0in 0in 0in 0in;height:15.45pt'>
  <p class=MsoNormal>Accelerated filer&nbsp;&nbsp; ___</p>
  </td>
 </tr>
 <tr style='height:16.65pt'>
  <td width=356 style='width:266.85pt;padding:0in 0in 0in 0in;height:16.65pt'>
  <p class=MsoNormal style='margin-left:.55in'>Non-accelerated filer ___</p>
  </td>
  <td width=106 style='width:79.85pt;padding:0in 0in 0in 0in;height:16.65pt'>

  </td>
  <td width=258 style='width:193.25pt;padding:0in 0in 0in 0in;height:16.65pt'>
  <p class=MsoNormal>Smaller reporting company&nbsp;&nbsp;&nbsp; __<u>x</u>__</p>
  </td>
 </tr>
</table>



<p class=MsoNormal>Indicate by check mark whether the registrant is a shell company
(as defined in Rule&nbsp;12b-2 of the Exchange Act).</p>

<p class=MsoNormal>Yes &nbsp; _____&nbsp;  No&nbsp; __<u>x</u>__</p>



<p class=MsoFooter align=center style='text-align:center'>As of May
17, 2010, there were 3,898,559 shares of the Registrant's common stock, par
value $0.001 per share, issued and outstanding.<a name=pgbrk></a> </p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade style='color:navy' align=center>

</div>





<br clear=all style='page-break-before:always'>




<p class=MsoNormal style='line-height:1.0pt'><a name=ftr></a><a name=glftr></a><a
name=pn></a><a name=hdr></a><a name=glhdr></a>&nbsp;</p>







<p class=MsoNormal><b>Form
10-Q</b></p>

<p class=MsoNormal><b>Quarter
Ended </b><b>March 31, 2010</b></p>



<div align=center>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='border-collapse:collapse'>
 <tr>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><b>&nbsp;</b></p>
  </td>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><b><u>INDEX</u></b></p>
  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:8.1pt;text-align:right'><b><u>PAGE</u></b></p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><b>PART
  I - FINANCIAL INFORMATION</b></p>
  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Item
  1.</p>
  </td>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>Financial Statements</p>
  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>Condensed Consolidated Balance Sheets -</p>
  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyTextIndent style='margin:0in;margin-bottom:.0001pt'>March
  31, 2010
  (unaudited) and September 30, 2009 (unaudited)</p>
  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyTextIndent align=right style='margin-top:0in;margin-right:
  8.1pt;margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:
  right'>3 - 4</p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyTextIndent style='margin:0in;margin-bottom:.0001pt'>Condensed
  Consolidated Statements of Operations (unaudited)&nbsp; </p>
  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoList2 style='margin-left:0in;text-indent:0in'>For the three and six
  months ended March 31, 2010 and 2009</p>
  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoList2 align=right style='margin-top:0in;margin-right:8.1pt;
  margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:right;
  text-indent:0in'>5</p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoList2 style='margin-left:0in;text-indent:0in'>Condensed
  Consolidated Statements of Cash Flow (unaudited) </p>
  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoList2 style='margin-left:0in;text-indent:0in'>For the three and six
  months ended March 31, 2010 and 2009</p>
  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoList2 align=right style='margin-top:0in;margin-right:8.1pt;
  margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:right;
  text-indent:0in'>6</p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Notes
  to Condensed Consolidated Financial Statements</p>
  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:8.1pt;text-align:right'>7 - 13</p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Item
  2.</p>
  </td>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Management's
  Discussion and Analysis of Financial Condition and Results of Operations</p>
  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:8.1pt;text-align:right'>13 - 22</p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Item
  3.</p>
  </td>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Quantitative
  and Qualitative Disclosures About Market Risk</p>
  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:8.1pt;text-align:right'>22</p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:-.1in'>Item 4T.</p>
  </td>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Controls
  and Procedures</p>
  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:8.1pt;text-align:right'>22</p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><b>PART
  II - OTHER INFORMATION</b></p>
  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><a name="OLE_LINK3">Item 1.</a></p>
  </td>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Legal
  Proceedings</p>
  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:8.1pt;text-align:right'>22</p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:-5.4pt'>Item 1A.</p>
  </td>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Risk
  Factors</p>
  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:8.1pt;text-align:right'>22</p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Item
  2.</p>
  </td>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Unregistered
  Sales of Equity Securities and Use of Proceeds</p>
  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:8.1pt;text-align:right'>22</p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Item
  3.</p>
  </td>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Defaults
  Upon Senior Securities</p>
  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:8.1pt;text-align:right'>23</p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Item
  4.</p>
  </td>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Submission
  of Matters to a Vote of Security Holders</p>
  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:8.1pt;text-align:right'>23</p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Item
  5.</p>
  </td>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Other
  Information.</p>
  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:8.1pt;text-align:right'>23</p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Item
  6.</p>
  </td>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Exhibits
  </p>
  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:8.1pt;text-align:right'>23</p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><b>SIGNATURES</b></p>
  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:8.1pt;text-align:right'>23</p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><b>&nbsp;</b></p>
  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><b>CERTIFICATIONS</b></p>
  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:8.1pt;text-align:right'>Exhibit 31.1</p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><b>&nbsp;</b></p>
  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:8.1pt;text-align:right'>Exhibit 31.2</p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><b>&nbsp;</b></p>
  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:8.1pt;text-align:right'>Exhibit 32.1</p>
  </td>
 </tr>
</table>

</div>



<p class=MsoFooter align=center style='text-align:center'>2</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade style='color:navy' align=center>

</div>





<br clear=all style='page-break-before:always'>












<p class=MsoNormal align=center style='margin-bottom:12.0pt;text-align:center'><b>PART I - FINANCIAL
INFORMATION</b></p>

<p class=MsoNormal style='margin-bottom:12.0pt'><b>ITEM 1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; FINANCIAL STATEMENTS</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>GOOD TIMES
RESTAURANTS INC. AND SUBSIDIARIES</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>CONDENSED
CONSOLIDATED BALANCE SHEETS</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>(Unaudited)</b></p>

<p class=MsoNormal align=center style='margin-top:6.0pt;margin-right:0in;
margin-bottom:12.0pt;margin-left:0in;text-align:center'><b>ASSETS</b></p>

<div align=center>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='margin-left:1.5pt;border-collapse:collapse'>
 <tr>
  <td width=362 valign=top style='width:271.75pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=117 valign=top style='width:87.65pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='margin-right:-7.75pt;text-align:center'>&nbsp;&nbsp;&nbsp; March 31,</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=131 valign=top style='width:98.55pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:-.9pt;text-align:right'>September 30,</p>
  </td>
 </tr>
 <tr>
  <td width=362 valign=top style='width:271.75pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=117 valign=top style='width:87.65pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='margin-top:0in;margin-right:-.9pt;
  margin-bottom:0in;margin-left:12.1pt;margin-bottom:.0001pt;text-align:center'><u>2010</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=131 valign=top style='width:98.55pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='margin-top:0in;margin-right:-.9pt;
  margin-bottom:0in;margin-left:12.1pt;margin-bottom:.0001pt;text-align:center'><u>2009</u></p>
  </td>
 </tr>
 <tr>
  <td width=362 valign=top style='width:271.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>CURRENT
  ASSETS:</p>
  </td>
  <td width=117 valign=top style='width:87.65pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=131 valign=top style='width:98.55pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=362 valign=top style='width:271.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash
  and cash equivalents</p>
  </td>
  <td width=117 valign=top style='width:87.65pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:1.25pt'>$533,000</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=131 valign=top style='width:98.55pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>$815,000</p>
  </td>
 </tr>
 <tr>
  <td width=362 valign=top style='width:271.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Receivables,
  net of allowance for doubtful</p>
  <p class=MsoNormal style='margin-left:18.85pt'>accounts of $0</p>
  </td>
  <td width=117 valign=bottom style='width:87.65pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:8.1pt'>196,000</p>
  </td>
  <td width=18 valign=bottom style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=131 valign=bottom style='width:98.55pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>122,000</p>
  </td>
 </tr>
 <tr>
  <td width=362 valign=top style='width:271.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Prepaid
  expenses and other</p>
  </td>
  <td width=117 valign=top style='width:87.65pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:8.1pt'>81,000</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=131 valign=top style='width:98.55pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>32,000</p>
  </td>
 </tr>
 <tr>
  <td width=362 valign=top style='width:271.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Inventories</p>
  </td>
  <td width=117 valign=top style='width:87.65pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:8.1pt'>201,000</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=131 valign=top style='width:98.55pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>220,000</p>
  </td>
 </tr>
 <tr>
  <td width=362 valign=top style='width:271.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Notes
  receivable</p>
  </td>
  <td width=117 valign=top style='width:87.65pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-top:0in;margin-right:8.1pt;margin-bottom:
  0in;margin-left:8.1pt;margin-bottom:.0001pt'><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 10,000</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'><u>&nbsp;</u></p>
  </td>
  <td width=131 valign=top style='width:98.55pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-left:19.45pt'><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 36,000</u></p>
  </td>
 </tr>
 <tr>
  <td width=362 valign=top style='width:271.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total
  current assets</p>
  </td>
  <td width=117 valign=top style='width:87.65pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:8.1pt'>1,021,000</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=131 valign=top style='width:98.55pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>1,225,000</p>
  </td>
 </tr>
 <tr>
  <td width=362 valign=top style='width:271.75pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=117 valign=top style='width:87.65pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=131 valign=top style='width:98.55pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=362 valign=top style='width:271.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>PROPERTY
  AND EQUIPMENT, at cost:</p>
  </td>
  <td width=117 valign=top style='width:87.65pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=131 valign=top style='width:98.55pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=362 valign=top style='width:271.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Land
  and building</p>
  </td>
  <td width=117 valign=top style='width:87.65pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:8.1pt'>6,598,000</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=131 valign=top style='width:98.55pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>6,596,000</p>
  </td>
 </tr>
 <tr>
  <td width=362 valign=top style='width:271.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Leasehold
  improvements</p>
  </td>
  <td width=117 valign=top style='width:87.65pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:8.1pt'>4,107,000</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=131 valign=top style='width:98.55pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>4,107,000</p>
  </td>
 </tr>
 <tr>
  <td width=362 valign=top style='width:271.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Fixtures
  and equipment</p>
  </td>
  <td width=117 valign=top style='width:87.65pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-top:0in;margin-right:8.1pt;margin-bottom:
  0in;margin-left:8.1pt;margin-bottom:.0001pt'><u>&nbsp;&nbsp;&nbsp; 8,440,000</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'><u>&nbsp;</u></p>
  </td>
  <td width=131 valign=top style='width:98.55pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-left:19.45pt'><u>&nbsp;&nbsp; 8,438,000</u></p>
  </td>
 </tr>
 <tr>
  <td width=362 valign=top style='width:271.75pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=117 valign=top style='width:87.65pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:8.1pt'>19,145,000</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=131 valign=top style='width:98.55pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>19,141,000</p>
  </td>
 </tr>
 <tr>
  <td width=362 valign=top style='width:271.75pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=117 valign=top style='width:87.65pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyTextIndent align=right style='margin-top:0in;margin-right:
  8.1pt;margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:
  right'><u>&nbsp;</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=131 valign=top style='width:98.55pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyTextIndent style='margin-top:0in;margin-right:8.1pt;
  margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt'><u>&nbsp;</u></p>
  </td>
 </tr>
 <tr>
  <td width=362 valign=top style='width:271.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyTextIndent style='margin:0in;margin-bottom:.0001pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Less
  accumulated depreciation and amortization</p>
  </td>
  <td width=117 valign=top style='width:87.65pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyTextIndent style='margin-top:0in;margin-right:.05in;
  margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt'><u>(12,551,000)</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=131 valign=top style='width:98.55pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyTextIndent style='margin:0in;margin-bottom:.0001pt'><u>(11,853,000)</u></p>
  </td>
 </tr>
 <tr>
  <td width=362 valign=top style='width:271.75pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=117 valign=top style='width:87.65pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:8.1pt'>6,594,000</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=131 valign=top style='width:98.55pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>7,288,000</p>
  </td>
 </tr>
 <tr>
  <td width=362 valign=top style='width:271.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <h3 style='margin:0in;margin-bottom:.0001pt'>&nbsp;</h3>
  </td>
  <td width=117 valign=top style='width:87.65pt;padding:0in 5.4pt 0in 5.4pt'>
  <h3 align=right style='margin-top:0in;margin-right:8.1pt;margin-bottom:0in;
  margin-left:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</h3>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <h3 style='margin:0in;margin-bottom:.0001pt'>&nbsp;</h3>
  </td>
  <td width=131 valign=top style='width:98.55pt;padding:0in 5.4pt 0in 5.4pt'>
  <h3 style='margin-top:0in;margin-right:8.1pt;margin-bottom:0in;margin-left:
  0in;margin-bottom:.0001pt'>&nbsp;</h3>
  </td>
 </tr>
 <tr>
  <td width=362 valign=top style='width:271.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <h3 style='margin:0in;margin-bottom:.0001pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Assets
  held for sale</h3>
  </td>
  <td width=117 valign=top style='width:87.65pt;padding:0in 5.4pt 0in 5.4pt'>
  <h3 style='margin-top:0in;margin-right:8.1pt;margin-bottom:0in;margin-left:
  0in;margin-bottom:.0001pt'>1,595,000</h3>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <h3 style='margin:0in;margin-bottom:.0001pt'>&nbsp;</h3>
  </td>
  <td width=131 valign=top style='width:98.55pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>1,595,000</p>
  </td>
 </tr>
 <tr>
  <td width=362 valign=top style='width:271.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <h3 style='margin-top:6.0pt;margin-right:0in;margin-bottom:0in;margin-left:
  0in;margin-bottom:.0001pt'>OTHER ASSETS:</h3>
  </td>
  <td width=117 valign=top style='width:87.65pt;padding:0in 5.4pt 0in 5.4pt'>
  <h3 align=right style='margin-top:0in;margin-right:8.1pt;margin-bottom:0in;
  margin-left:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</h3>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <h3 style='margin:0in;margin-bottom:.0001pt'>&nbsp;</h3>
  </td>
  <td width=131 valign=top style='width:98.55pt;padding:0in 5.4pt 0in 5.4pt'>
  <h3 style='margin:0in;margin-bottom:.0001pt'>&nbsp;</h3>
  </td>
 </tr>
 <tr>
  <td width=362 valign=top style='width:271.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Notes
  receivable, net of current portion</p>
  </td>
  <td width=117 valign=top style='width:87.65pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:8.1pt'>100,000</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=131 valign=top style='width:98.55pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>82,000</p>
  </td>
 </tr>
 <tr>
  <td width=362 valign=top style='width:271.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deposits
  and other assets</p>
  </td>
  <td width=117 valign=top style='width:87.65pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-top:0in;margin-right:8.1pt;margin-bottom:
  0in;margin-left:8.1pt;margin-bottom:.0001pt'><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 131,000</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=131 valign=top style='width:98.55pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-left:19.45pt'><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 64,000</u></p>
  </td>
 </tr>
 <tr>
  <td width=362 valign=top style='width:271.75pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=117 valign=top style='width:87.65pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-top:0in;margin-right:8.1pt;margin-bottom:
  0in;margin-left:8.1pt;margin-bottom:.0001pt'><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 231,000</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=131 valign=top style='width:98.55pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-left:19.45pt'><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 146,000</u></p>
  </td>
 </tr>
 <tr>
  <td width=362 valign=top style='width:271.75pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=117 valign=top style='width:87.65pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=131 valign=top style='width:98.55pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=362 valign=top style='width:271.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>TOTAL
  ASSETS</p>
  </td>
  <td width=117 valign=top style='width:87.65pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:8.1pt'><u>$9,441,000</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=131 valign=top style='width:98.55pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-left:19.45pt'><u>$10,254,000</u></p>
  </td>
 </tr>
</table>

</div>

<h3>LIABILITIES AND STOCKHOLDERS' EQUITY</h3>

<p class=MsoFooter align=center style='text-align:center'>3</p>

<p class=MsoFooter align=center style='text-align:center'>See accompanying
notes to condensed consolidated financial statements</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade style='color:navy' align=center>

</div>



<br clear=all style='page-break-before:always'>












<div align=center>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='border-collapse:collapse'>
 <tr>
  <td width=361 valign=top style='width:270.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText align=left style='margin-right:0in;text-align:left;
  line-height:normal'>&nbsp;CURRENT
  LIABILITIES:</p>
  </td>
  <td width=119 valign=top style='width:89.55pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=127 valign=top style='width:94.95pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=361 valign=top style='width:270.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyTextIndent style='margin-top:0in;margin-right:0in;margin-bottom:
  0in;margin-left:17.55pt;margin-bottom:.0001pt;text-indent:-9.0pt'>&nbsp;&nbsp; Current
  maturities of long-term debt, net of&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;discounts of $149,000 and $27,000
  respectively</p>
  </td>
  <td width=119 valign=top style='width:89.55pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyTextIndent style='margin:0in;margin-bottom:.0001pt'>$1,252,000</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=127 valign=top style='width:94.95pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyTextIndent style='margin:0in;margin-bottom:.0001pt'>$1,027,000</p>
  </td>
 </tr>
 <tr>
  <td width=361 valign=top style='width:270.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts
  payable</p>
  </td>
  <td width=119 valign=top style='width:89.55pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>696,000</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=127 valign=top style='width:94.95pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>355,000</p>
  </td>
 </tr>
 <tr>
  <td width=361 valign=top style='width:270.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deferred
  income</p>
  </td>
  <td width=119 valign=top style='width:89.55pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>50,000</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=127 valign=top style='width:94.95pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>113,000</p>
  </td>
 </tr>
 <tr>
  <td width=361 valign=top style='width:270.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Liabilities
  related to discontinued operations</p>
  </td>
  <td width=119 valign=top style='width:89.55pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>14,000</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=127 valign=top style='width:94.95pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>-</p>
  </td>
 </tr>
 <tr>
  <td width=361 valign=top style='width:270.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other
  accrued liabilities</p>
  </td>
  <td width=119 valign=top style='width:89.55pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-left:7.65pt'><u>&nbsp;&nbsp;&nbsp; 1,146,000</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=127 valign=top style='width:94.95pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-left:12.15pt'><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 930,000</u></p>
  </td>
 </tr>
 <tr>
  <td width=361 valign=top style='width:270.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total
  current liabilities</p>
  </td>
  <td width=119 valign=top style='width:89.55pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:.05in'>3,158,000</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=127 valign=top style='width:94.95pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>2,425,000</p>
  </td>
 </tr>
 <tr>
  <td width=361 valign=top style='width:270.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <h3 style='margin-top:6.0pt;margin-right:0in;margin-bottom:0in;margin-left:
  0in;margin-bottom:.0001pt'>LONG-TERM
  LIABILITIES:</h3>
  </td>
  <td width=119 valign=top style='width:89.55pt;padding:0in 5.4pt 0in 5.4pt'>
  <h3 align=right style='margin:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</h3>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <h3 style='margin:0in;margin-bottom:.0001pt'>&nbsp;</h3>
  </td>
  <td width=127 valign=top style='width:94.95pt;padding:0in 5.4pt 0in 5.4pt'>
  <h3 align=right style='margin:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</h3>
  </td>
 </tr>
 <tr>
  <td width=361 valign=top style='width:270.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyTextIndent style='margin-top:0in;margin-right:0in;margin-bottom:
  0in;margin-left:17.55pt;margin-bottom:.0001pt;text-indent:-17.55pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Debt, net of
  current portion and net of discounts of $66,000 and $0, respectively</p>
  </td>
  <td width=119 valign=bottom style='width:89.55pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyTextIndent style='margin:0in;margin-bottom:.0001pt'>2,399,000</p>
  </td>
  <td width=18 valign=bottom style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=127 valign=bottom style='width:94.95pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyTextIndent style='margin:0in;margin-bottom:.0001pt'>2,478,000</p>
  </td>
 </tr>
 <tr>
  <td width=361 valign=top style='width:270.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Liabilities
  related to discontinued operations</p>
  </td>
  <td width=119 valign=top style='width:89.55pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>103,000</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=127 valign=top style='width:94.95pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>-</p>
  </td>
 </tr>
 <tr>
  <td width=361 valign=top style='width:270.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deferred
  liabilities</p>
  </td>
  <td width=119 valign=top style='width:89.55pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-left:7.65pt'><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 958,000</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=127 valign=top style='width:94.95pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><u>973,000</u></p>
  </td>
 </tr>
 <tr>
  <td width=361 valign=top style='width:270.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total
  long-term liabilities</p>
  </td>
  <td width=119 valign=top style='width:89.55pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>3,460,000</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=127 valign=top style='width:94.95pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>3,451,000</p>
  </td>
 </tr>
 <tr>
  <td width=361 valign=top style='width:270.9pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=119 valign=top style='width:89.55pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=127 valign=top style='width:94.95pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
</table>

</div>

<p class=MsoList2 align=center style='margin-left:0in;text-align:center;
text-indent:0in'><a name="OLE_LINK2">&nbsp;</a></p>

<p class=MsoNormal align=center style='text-align:center'><b>GOOD TIMES RESTAURANTS
INC. AND SUBSIDIARIES</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>CONDENSED
CONSOLIDATED BALANCE SHEETS (Continued)</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>(Unaudited)</b></p>

<p class=MsoNormal align=center style='margin-bottom:12.0pt;text-align:center'><b>&nbsp;</b></p>



<div align=center>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=648
 style='border-collapse:collapse'>
 <tr style='height:13.05pt'>
  <td width=374 valign=top style='width:280.7pt;padding:0in 5.4pt 0in 5.4pt;
  height:13.05pt'>
  <h3 style='margin:0in;margin-bottom:.0001pt'>&nbsp;</h3>
  </td>
  <td width=131 valign=top style='width:98.0pt;padding:0in 5.4pt 0in 5.4pt;
  height:13.05pt'>
  <p class=MsoNormal align=center style='margin-top:0in;margin-right:8.8pt;
  margin-bottom:0in;margin-left:19.9pt;margin-bottom:.0001pt;text-align:center'>March 31,</p>
  </td>
  <td width=19 valign=top style='width:14.0pt;padding:0in 5.4pt 0in 5.4pt;
  height:13.05pt'>

  </td>
  <td width=124 valign=top style='width:93.3pt;padding:0in 5.4pt 0in 5.4pt;
  height:13.05pt'>
  <p class=MsoNormal align=right style='margin-right:-.9pt;text-align:right'>September 30,</p>
  </td>
 </tr>
 <tr>
  <td width=374 valign=top style='width:280.7pt;padding:0in 5.4pt 0in 5.4pt'>
  <h3 style='margin:0in;margin-bottom:.0001pt'>&nbsp;</h3>
  </td>
  <td width=131 valign=top style='width:98.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <h3 align=center style='margin-top:0in;margin-right:8.1pt;margin-bottom:0in;
  margin-left:19.9pt;margin-bottom:.0001pt;text-align:center'><u>2010</u></h3>
  </td>
  <td width=19 valign=top style='width:14.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <h3 align=right style='margin:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</h3>
  </td>
  <td width=124 valign=top style='width:93.3pt;padding:0in 5.4pt 0in 5.4pt'>
  <h3 align=center style='margin-top:0in;margin-right:8.1pt;margin-bottom:0in;
  margin-left:12.6pt;margin-bottom:.0001pt;text-align:center'><u>2009</u></h3>
  </td>
 </tr>
 <tr>
  <td width=374 valign=top style='width:280.7pt;padding:0in 5.4pt 0in 5.4pt'>

  <h3 style='margin:0in;margin-bottom:.0001pt'>STOCKHOLDERS'
  EQUITY:</h3>
  </td>
  <td width=131 style='width:98.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=19 style='width:14.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=124 style='width:93.3pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=374 valign=top style='width:280.7pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Non-controlling
  interest</p>
  </td>
  <td width=131 valign=top style='width:98.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:12.6pt;
  margin-bottom:0in;margin-left:-.9pt;margin-bottom:.0001pt;text-align:right'>389,000</p>
  </td>
  <td width=19 valign=top style='width:14.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=124 valign=top style='width:93.3pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:12.6pt;text-align:right'>428,000</p>
  </td>
 </tr>
 <tr>
  <td width=374 valign=top style='width:280.7pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Preferred
  stock, $.01 par value;</p>
  </td>
  <td width=131 valign=top style='width:98.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=19 valign=top style='width:14.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=124 valign=top style='width:93.3pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=374 valign=top style='width:280.7pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-left:.3in;text-indent:-.3in'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5,000,000
  shares authorized, none issued</p>
  </td>
  <td width=131 valign=top style='width:98.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=19 valign=top style='width:14.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=124 valign=top style='width:93.3pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=374 valign=top style='width:280.7pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; and
  outstanding as of September 30, 2009 and</p>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; March
  31, 2010</p>
  </td>
  <td width=131 valign=bottom style='width:98.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:12.6pt;
  margin-bottom:0in;margin-left:-.9pt;margin-bottom:.0001pt;text-align:right'>-</p>
  </td>
  <td width=19 valign=top style='width:14.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=124 valign=bottom style='width:93.3pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:17.1pt;text-align:right'>-</p>
  </td>
 </tr>
 <tr>
  <td width=374 valign=top style='width:280.7pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=131 valign=top style='width:98.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=19 valign=top style='width:14.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=124 valign=top style='width:93.3pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=374 valign=top style='width:280.7pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Common
  stock, $.001 par value; 50,000,000 shares</p>
  </td>
  <td width=131 valign=top style='width:98.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=19 valign=top style='width:14.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=124 valign=top style='width:93.3pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=374 valign=top style='width:280.7pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Authorized,
  3,898,559 shares issued and</p>
  </td>
  <td width=131 valign=top style='width:98.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=19 valign=top style='width:14.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=124 valign=top style='width:93.3pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=374 valign=top style='width:280.7pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; outstanding
  as of September 30, 2009 and</p>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; March
  31, 2010</p>
  </td>
  <td width=131 valign=bottom style='width:98.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:12.6pt;
  margin-bottom:0in;margin-left:-.9pt;margin-bottom:.0001pt;text-align:right'>4,000</p>
  </td>
  <td width=19 valign=bottom style='width:14.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=124 valign=bottom style='width:93.3pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:17.1pt;text-align:right'>4,000</p>
  </td>
 </tr>
 <tr style='height:4.0pt'>
  <td width=374 valign=top style='width:280.7pt;padding:0in 5.4pt 0in 5.4pt;
  height:4.0pt'>

  </td>
  <td width=131 valign=top style='width:98.0pt;padding:0in 5.4pt 0in 5.4pt;
  height:4.0pt'>

  </td>
  <td width=19 valign=top style='width:14.0pt;padding:0in 5.4pt 0in 5.4pt;
  height:4.0pt'>

  </td>
  <td width=124 valign=top style='width:93.3pt;padding:0in 5.4pt 0in 5.4pt;
  height:4.0pt'>

  </td>
 </tr>
 <tr>
  <td width=374 valign=top style='width:280.7pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyTextIndent style='margin:0in;margin-bottom:.0001pt'>Capital contributed
  in excess of par value</p>
  </td>
  <td width=131 valign=top style='width:98.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyTextIndent align=right style='margin-top:0in;margin-right:
  12.6pt;margin-bottom:0in;margin-left:-.9pt;margin-bottom:.0001pt;text-align:
  right'>18,073,000</p>
  </td>
  <td width=19 valign=top style='width:14.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=124 valign=top style='width:93.3pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyTextIndent align=right style='margin-top:0in;margin-right:
  17.1pt;margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:
  right'>17,751,000</p>
  </td>
 </tr>
 <tr>
  <td width=374 valign=top style='width:280.7pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyTextIndent style='margin:0in;margin-bottom:.0001pt'>Accumulated deficit</p>
  </td>
  <td width=131 valign=top style='width:98.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyTextIndent align=right style='margin-top:0in;margin-right:
  8.1pt;margin-bottom:0in;margin-left:-.9pt;margin-bottom:.0001pt;text-align:
  right'><u>(15,643,000)</u></p>
  </td>
  <td width=19 valign=top style='width:14.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=124 valign=top style='width:93.3pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyTextIndent align=right style='margin-top:0in;margin-right:
  8.1pt;margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:
  right'><u>(13,805,000)</u></p>
  </td>
 </tr>
 <tr>
  <td width=374 valign=top style='width:280.7pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total
  stockholders' equity</p>
  </td>
  <td width=131 valign=top style='width:98.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:12.6pt;
  margin-bottom:0in;margin-left:12.6pt;margin-bottom:.0001pt;text-align:right'><u>&nbsp;&nbsp; 2,823,000</u></p>
  </td>
  <td width=19 valign=top style='width:14.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=124 valign=top style='width:93.3pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:12.6pt;text-align:right'><u>&nbsp;&nbsp; 4,378,000</u></p>
  </td>
 </tr>
 <tr>
  <td width=374 valign=top style='width:280.7pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=131 valign=top style='width:98.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=19 valign=top style='width:14.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=124 valign=top style='width:93.3pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=374 valign=top style='width:280.7pt;padding:0in 5.4pt 0in 5.4pt'>
  <h3 style='margin:0in;margin-bottom:.0001pt'>TOTAL
  LIABILITIES AND STOCKHOLDERS' EQUITY</h3>
  </td>
  <td width=131 valign=top style='width:98.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:12.6pt;text-align:right'><u>$9,441,000</u></p>
  </td>
  <td width=19 valign=top style='width:14.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=124 valign=top style='width:93.3pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:17.1pt;text-align:right'><u>$10,254,000</u></p>
  </td>
 </tr>
</table>

</div>

<p class=MsoFooter align=center style='text-align:center'>4</p>

<p class=MsoFooter align=center style='text-align:center'>See accompanying
notes to condensed consolidated financial statements</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade style='color:navy' align=center>

</div>





<br clear=all style='page-break-before:always'>












<p class=MsoNormal align=center style='text-align:center'><b>GOOD TIMES
RESTAURANTS INC. AND SUBSIDIARIES</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>(Unaudited)</b></p>



<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=948
 style='margin-left:9.9pt;border-collapse:collapse'>
 <tr>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <h3 align=center style='margin:0in;margin-bottom:.0001pt;text-align:center'>&nbsp;</h3>
  </td>
  <td width=234 colspan=3 valign=top style='width:175.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <h3 align=center style='margin:0in;margin-bottom:.0001pt;text-align:center'><b>Three Months Ended March 31,</b></h3>
  </td>
  <td width=264 colspan=4 valign=top style='width:2.75in;padding:0in 5.4pt 0in 5.4pt'>
  <h3 align=center style='margin-top:0in;margin-right:0in;margin-bottom:0in;
  margin-left:8.1pt;margin-bottom:.0001pt;text-align:center'><b>Six Months Ended March 31,</b></h3>
  </td>
 </tr>
 <tr>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='margin-top:0in;margin-right:8.65pt;
  margin-bottom:0in;margin-left:12.6pt;margin-bottom:.0001pt;text-align:center;
  line-height:94%'><b><u>2010</u></b></p>
  </td>
  <td width=31 valign=top style='width:23.6pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='margin-right:-.9pt;text-align:center;
  line-height:94%'><b>&nbsp;</b></p>
  </td>
  <td width=107 valign=top style='width:79.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='margin-top:0in;margin-right:8.65pt;
  margin-bottom:0in;margin-left:12.6pt;margin-bottom:.0001pt;text-align:center;
  line-height:94%'><b><u>2009</u></b></p>
  </td>
  <td width=16 valign=top style='width:11.8pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=116 valign=top style='width:87.2pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='margin-top:0in;margin-right:3.75pt;
  margin-bottom:0in;margin-left:7.55pt;margin-bottom:.0001pt;text-align:center;
  line-height:94%'><b><u>2010</u></b></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:-.9pt;text-align:right;
  line-height:94%'><b>&nbsp;</b></p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='margin-top:0in;margin-right:3.75pt;
  margin-bottom:0in;margin-left:7.55pt;margin-bottom:.0001pt;text-align:center;
  line-height:94%'><b><u>2009</u></b></p>
  </td>
 </tr>
 <tr>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:-.9pt;line-height:94%'>NET
  REVENUES:</p>
  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=31 valign=top style='width:23.6pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=107 valign=top style='width:79.9pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=16 valign=top style='width:11.8pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=116 valign=top style='width:87.2pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:-.9pt;line-height:94%'>&nbsp;&nbsp;&nbsp;&nbsp;
  Restaurant sales, net</p>
  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'>$4,772,000</p>
  </td>
  <td width=31 valign=top style='width:23.6pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=107 valign=top style='width:79.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'>$5,248,000</p>
  </td>
  <td width=16 valign=top style='width:11.8pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=116 valign=top style='width:87.2pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='line-height:94%'>$9,499,000</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='line-height:94%'>$10,585,000</p>
  </td>
 </tr>
 <tr>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:-.9pt;line-height:94%'>&nbsp;&nbsp;&nbsp;&nbsp;
  Franchise revenues</p>
  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'><u>&nbsp;&nbsp;&nbsp; 111,000</u></p>
  </td>
  <td width=31 valign=top style='width:23.6pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:-.9pt;text-align:right;
  line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=107 valign=top style='width:79.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'><u>&nbsp;&nbsp;&nbsp;&nbsp; 135,000</u></p>
  </td>
  <td width=16 valign=top style='width:11.8pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:-.9pt;
  margin-bottom:0in;margin-left:.5in;margin-bottom:.0001pt;text-align:right;
  text-indent:-.25in;line-height:94%'>&#64976;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  <u>&nbsp;</u></p>
  </td>
  <td width=116 valign=top style='width:87.2pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-left:14.3pt;line-height:94%'><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 224,000</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:-.9pt;
  margin-bottom:0in;margin-left:.5in;margin-bottom:.0001pt;text-align:right;
  text-indent:-.25in;line-height:94%'>&#64976;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  <u>&nbsp;</u></p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-left:14.3pt;line-height:94%'><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 274,000</u></p>
  </td>
 </tr>
 <tr>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:-.9pt;line-height:94%'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  Total revenues</p>
  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'>4,883,000</p>
  </td>
  <td width=31 valign=top style='width:23.6pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=107 valign=top style='width:79.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'>5,383,000</p>
  </td>
  <td width=16 valign=top style='width:11.8pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=116 valign=top style='width:87.2pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='line-height:94%'>9,723,000</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='line-height:94%'>10,859,000</p>
  </td>
 </tr>
 <tr>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=31 valign=top style='width:23.6pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=107 valign=top style='width:79.9pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=16 valign=top style='width:11.8pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=116 valign=top style='width:87.2pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:-.9pt;line-height:94%'>RESTAURANT
  OPERATING COSTS:</p>
  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=31 valign=top style='width:23.6pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=107 valign=top style='width:79.9pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=16 valign=top style='width:11.8pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=116 valign=top style='width:87.2pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr style='height:.1in'>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>
  <p class=MsoNormal style='margin-right:-.9pt;line-height:94%'>&nbsp;&nbsp;&nbsp;&nbsp;
  Food and packaging costs</p>
  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'>1,682,000</p>
  </td>
  <td width=31 valign=top style='width:23.6pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=107 valign=top style='width:79.9pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'>1,745,000</p>
  </td>
  <td width=16 valign=top style='width:11.8pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=116 valign=top style='width:87.2pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>
  <p class=MsoNormal style='line-height:94%'>3,248,000</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>
  <p class=MsoNormal style='line-height:94%'>3,538,000</p>
  </td>
 </tr>
 <tr>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:-.9pt;line-height:94%'>&nbsp;&nbsp;&nbsp;&nbsp;
  Payroll and other employee benefit costs</p>
  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'>1,834,000</p>
  </td>
  <td width=31 valign=top style='width:23.6pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=107 valign=top style='width:79.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'>1,893,000</p>
  </td>
  <td width=16 valign=top style='width:11.8pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=116 valign=top style='width:87.2pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='line-height:94%'>3,613,000</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='line-height:94%'>3,881,000</p>
  </td>
 </tr>
 <tr>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:-.9pt;line-height:94%'>&nbsp;&nbsp;&nbsp;&nbsp;
  Occupancy and other operating costs</p>
  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'>1,168,000</p>
  </td>
  <td width=31 valign=top style='width:23.6pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=107 valign=top style='width:79.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'>1,133,000</p>
  </td>
  <td width=16 valign=top style='width:11.8pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=116 valign=top style='width:87.2pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='line-height:94%'>2,322,000</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='line-height:94%'>2,281,000</p>
  </td>
 </tr>
 <tr>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:-.9pt;line-height:94%'>&nbsp;&nbsp;&nbsp;&nbsp;
  Accretion of deferred rent</p>
  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'>-</p>
  </td>
  <td width=31 valign=top style='width:23.6pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=107 valign=top style='width:79.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'>-</p>
  </td>
  <td width=16 valign=top style='width:11.8pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=116 valign=top style='width:87.2pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='line-height:94%'>1,000</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='line-height:94%'>-</p>
  </td>
 </tr>
 <tr>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:-.9pt;line-height:94%'>&nbsp;&nbsp;&nbsp;&nbsp;
  Opening costs</p>
  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'>-</p>
  </td>
  <td width=31 valign=top style='width:23.6pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:-.9pt;text-align:right;
  line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=107 valign=top style='width:79.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'>-</p>
  </td>
  <td width=16 valign=top style='width:11.8pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:-.9pt;text-align:right;
  line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=116 valign=top style='width:87.2pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='line-height:94%'>-</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:-.9pt;text-align:right;
  line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:.05in;line-height:94%'>15,000</p>
  </td>
 </tr>
 <tr>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:-.9pt;line-height:94%'>&nbsp;&nbsp;&nbsp;&nbsp;
  Depreciation and amortization</p>
  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 249,000</u></p>
  </td>
  <td width=31 valign=top style='width:23.6pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:-.9pt;text-align:right;
  line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=107 valign=top style='width:79.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'><u>&nbsp;&nbsp;&nbsp;&nbsp; 304,000</u></p>
  </td>
  <td width=16 valign=top style='width:11.8pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:-.9pt;text-align:right;
  line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=116 valign=top style='width:87.2pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-left:14.3pt;line-height:94%'><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 490,000</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:-.9pt;text-align:right;
  line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-top:0in;margin-right:.05in;margin-bottom:
  0in;margin-left:14.3pt;margin-bottom:.0001pt;line-height:94%'><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 604,000</u></p>
  </td>
 </tr>
 <tr>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:-.9pt;line-height:94%'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  Total restaurant operating costs</p>
  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'>4,933,000</p>
  </td>
  <td width=31 valign=top style='width:23.6pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=107 valign=top style='width:79.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'>5,075,000</p>
  </td>
  <td width=16 valign=top style='width:11.8pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=116 valign=top style='width:87.2pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='line-height:94%'>9,674,000</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='line-height:94%'>10,319,000</p>
  </td>
 </tr>
 <tr>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-top:6.0pt;margin-right:-.9pt;margin-bottom:
  0in;margin-left:0in;margin-bottom:.0001pt;line-height:94%'>&nbsp;&nbsp;&nbsp;&nbsp;
  General and administrative costs</p>
  </td>
  <td width=96 style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-top:6.0pt;margin-right:4.15pt;margin-bottom:
  0in;margin-left:0in;margin-bottom:.0001pt;line-height:94%'>365,000</p>
  </td>
  <td width=31 style='width:23.6pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:-.9pt;line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=107 style='width:79.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-top:6.0pt;margin-right:4.15pt;margin-bottom:
  0in;margin-left:0in;margin-bottom:.0001pt;line-height:94%'>402,000</p>
  </td>
  <td width=16 style='width:11.8pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:-.9pt;line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=116 style='width:87.2pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-top:6.0pt;line-height:94%'>735,000</p>
  </td>
  <td width=18 style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-top:6.0pt;line-height:94%'>891,000</p>
  </td>
 </tr>
 <tr>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:-.9pt;line-height:94%'>&nbsp;&nbsp;&nbsp;&nbsp;
  Advertising costs</p>
  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'>286,000</p>
  </td>
  <td width=31 valign=top style='width:23.6pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=107 valign=top style='width:79.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'>302,000</p>
  </td>
  <td width=16 valign=top style='width:11.8pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=116 valign=top style='width:87.2pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='line-height:94%'>561,000</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='line-height:94%'>612,000</p>
  </td>
 </tr>
 <tr>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:-.9pt;line-height:94%'>&nbsp;&nbsp;&nbsp;&nbsp;
  Franchise costs</p>
  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'>35,000</p>
  </td>
  <td width=31 valign=top style='width:23.6pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=107 valign=top style='width:79.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'>33,000</p>
  </td>
  <td width=16 valign=top style='width:11.8pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=116 valign=top style='width:87.2pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='line-height:94%'>65,000</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='line-height:94%'>73,000</p>
  </td>
 </tr>
 <tr>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:-.9pt;line-height:94%'>&nbsp;&nbsp;&nbsp;&nbsp;
  (Gain) loss on sale of restaurant building and equipment</p>
  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (8,000)</u></p>
  </td>
  <td width=31 valign=top style='width:23.6pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=107 valign=top style='width:79.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (7,000)</u></p>
  </td>
  <td width=16 valign=top style='width:11.8pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=116 valign=top style='width:87.2pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-left:14.3pt;line-height:94%'><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (15,000)</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-left:14.3pt;line-height:94%'><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (15,000)</u></p>
  </td>
 </tr>
 <tr>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-top:6.0pt;margin-right:-.9pt;margin-bottom:
  0in;margin-left:0in;margin-bottom:.0001pt;line-height:94%'>LOSS
  FROM OPERATIONS</p>
  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'>(728,000)</p>
  </td>
  <td width=31 valign=top style='width:23.6pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=107 valign=top style='width:79.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'>(422,000)</p>
  </td>
  <td width=16 valign=top style='width:11.8pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=116 valign=top style='width:87.2pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='line-height:94%'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (1,297,000)</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='line-height:94%'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (1,021,000)</p>
  </td>
 </tr>
 <tr>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=31 valign=top style='width:23.6pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=107 valign=top style='width:79.9pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=16 valign=top style='width:11.8pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=116 valign=top style='width:87.2pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:-.9pt;line-height:94%'>OTHER
  INCOME AND (EXPENSES):</p>
  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=31 valign=top style='width:23.6pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=107 valign=top style='width:79.9pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=16 valign=top style='width:11.8pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=116 valign=top style='width:87.2pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:-.9pt;line-height:94%'>&nbsp;&nbsp;&nbsp;&nbsp;
  Unrealized income (loss) on interest rate swap</p>
  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'>-</p>
  </td>
  <td width=31 valign=top style='width:23.6pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=107 valign=top style='width:79.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'>3,000</p>
  </td>
  <td width=16 valign=top style='width:11.8pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=116 valign=top style='width:87.2pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:8.1pt;line-height:94%'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 10,000</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='line-height:94%'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (116,000)</p>
  </td>
 </tr>
 <tr>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:-.9pt;line-height:94%'>&nbsp;&nbsp;&nbsp;&nbsp;
  Interest income (expense), net</p>
  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'><u>&nbsp;&nbsp;&nbsp;&nbsp; (161,000)</u></p>
  </td>
  <td width=31 valign=top style='width:23.6pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=107 valign=top style='width:79.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (64,000)</u></p>
  </td>
  <td width=16 valign=top style='width:11.8pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=116 valign=top style='width:87.2pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-left:14.3pt;line-height:94%'><u>&nbsp;&nbsp; (240,000)</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-left:14.3pt;line-height:94%'><u>&nbsp;&nbsp; (105,000)</u></p>
  </td>
 </tr>
 <tr>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:-.9pt;line-height:94%'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  Total other income and (expenses)</p>
  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'><u>&nbsp;&nbsp;&nbsp;&nbsp; (161,000)</u></p>
  </td>
  <td width=31 valign=top style='width:23.6pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=107 valign=top style='width:79.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (61,000)</u></p>
  </td>
  <td width=16 valign=top style='width:11.8pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=116 valign=top style='width:87.2pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-left:14.3pt;line-height:94%'><u>&nbsp;&nbsp; (230,000)</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-left:14.3pt;line-height:94%'><u>&nbsp;&nbsp; (221,000)</u></p>
  </td>
 </tr>
 <tr>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=31 valign=top style='width:23.6pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:-.9pt;text-align:right;
  line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=107 valign=top style='width:79.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=16 valign=top style='width:11.8pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:-.9pt;text-align:right;
  line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=116 valign=top style='width:87.2pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:-.9pt;text-align:right;
  line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='line-height:94%'><u>&nbsp;</u></p>
  </td>
 </tr>
 <tr>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:-.9pt;line-height:94%'>LOSS
  FROM CONTINUING OPERATIONS</p>
  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'><u>($&nbsp;&nbsp;&nbsp; 889,000)</u></p>
  </td>
  <td width=31 valign=top style='width:23.6pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:-.9pt;text-align:right;
  line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=107 valign=top style='width:79.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'><u>($&nbsp;&nbsp;&nbsp; 483,000)</u></p>
  </td>
  <td width=16 valign=top style='width:11.8pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:-.9pt;text-align:right;
  line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=116 valign=top style='width:87.2pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='line-height:94%'><u>($1,527,000)</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:-.9pt;text-align:right;
  line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='line-height:94%'><u>($1,242,000)</u></p>
  </td>
 </tr>
 <tr>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=31 valign=top style='width:23.6pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:-.9pt;text-align:right;
  line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=107 valign=top style='width:79.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=16 valign=top style='width:11.8pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:-.9pt;text-align:right;
  line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=116 valign=top style='width:87.2pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:-.9pt;text-align:right;
  line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='line-height:94%'><u>&nbsp;</u></p>
  </td>
 </tr>
 <tr>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:-.9pt;line-height:94%'>&nbsp;&nbsp;&nbsp;&nbsp;
  Loss from discontinued operations</p>
  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'><u>&nbsp;&nbsp;&nbsp;&nbsp; (377,000)</u></p>
  </td>
  <td width=31 valign=top style='width:23.6pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=107 valign=top style='width:79.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (28,000)</u></p>
  </td>
  <td width=16 valign=top style='width:11.8pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=116 valign=top style='width:87.2pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-left:14.3pt;line-height:94%'><u>&nbsp;&nbsp; (421,000)</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-left:33.7pt;text-indent:-21.1pt;line-height:
  94%'><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (69,000)</u></p>
  </td>
 </tr>
 <tr>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=31 valign=top style='width:23.6pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:-.9pt;text-align:right;
  line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=107 valign=top style='width:79.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=16 valign=top style='width:11.8pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:-.9pt;text-align:right;
  line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=116 valign=top style='width:87.2pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:-.9pt;text-align:right;
  line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='line-height:94%'><u>&nbsp;</u></p>
  </td>
 </tr>
 <tr>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:-.9pt;line-height:94%'>NET
  LOSS</p>
  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:-5.4pt;line-height:94%'><u>($1,266,000)</u></p>
  </td>
  <td width=31 valign=top style='width:23.6pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:-.9pt;text-align:right;
  line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=107 valign=top style='width:79.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'><u>($&nbsp;&nbsp;&nbsp; 511,000)</u></p>
  </td>
  <td width=16 valign=top style='width:11.8pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:-.9pt;text-align:right;
  line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=116 valign=top style='width:87.2pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='line-height:94%'><u>($1,948,000)</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:-.9pt;text-align:right;
  line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='line-height:94%'><u>($1,311,000)</u></p>
  </td>
 </tr>
 <tr>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-top:6.0pt;margin-right:-.9pt;margin-bottom:
  0in;margin-left:0in;margin-bottom:.0001pt;line-height:94%'>&nbsp;&nbsp;&nbsp;&nbsp;
  Income
  from non-controlling interest</p>
  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-top:6.0pt;margin-right:4.15pt;margin-bottom:
  0in;margin-left:0in;margin-bottom:.0001pt;line-height:94%'>62,000</p>
  </td>
  <td width=31 valign=top style='width:23.6pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=107 valign=top style='width:79.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-top:6.0pt;margin-right:4.15pt;margin-bottom:
  0in;margin-left:0in;margin-bottom:.0001pt;line-height:94%'>30,000</p>
  </td>
  <td width=16 valign=top style='width:11.8pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=116 valign=top style='width:87.2pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-top:6.0pt;line-height:94%'>110,000</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-top:6.0pt;line-height:94%'>64,000</p>
  </td>
 </tr>
 <tr>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-top:6.0pt;margin-right:-.9pt;margin-bottom:
  0in;margin-left:0in;margin-bottom:.0001pt;line-height:94%'>NET
  LOSS APPLICABLE TO COMMON SHAREHOLDERS</p>
  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-top:6.0pt;margin-right:-5.4pt;margin-bottom:
  0in;margin-left:0in;margin-bottom:.0001pt;line-height:94%'><u>($1,204,000)</u></p>
  </td>
  <td width=31 valign=top style='width:23.6pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-top:6.0pt;margin-right:-.9pt;
  margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:right;
  line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=107 valign=top style='width:79.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-top:6.0pt;margin-right:4.15pt;margin-bottom:
  0in;margin-left:0in;margin-bottom:.0001pt;line-height:94%'><u>($&nbsp;&nbsp;&nbsp; 481,000)</u></p>
  </td>
  <td width=16 valign=top style='width:11.8pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-top:6.0pt;margin-right:-.9pt;
  margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:right;
  line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=116 valign=top style='width:87.2pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-top:6.0pt;line-height:94%'><u>($1,838,000)</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-top:6.0pt;margin-right:-.9pt;
  margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:right;
  line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-top:6.0pt;line-height:94%'><u>($1,247,000)</u></p>
  </td>
 </tr>
 <tr>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=31 valign=top style='width:23.6pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:-.9pt;text-align:right;
  line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=107 valign=top style='width:79.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=16 valign=top style='width:11.8pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:-.9pt;text-align:right;
  line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=116 valign=top style='width:87.2pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:-.9pt;text-align:right;
  line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='line-height:94%'><u>&nbsp;</u></p>
  </td>
 </tr>
 <tr>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:-.9pt;line-height:94%'>Net
  loss per share - basic and diluted</p>
  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=31 valign=top style='width:23.6pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:-.9pt;text-align:right;
  line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=107 valign=top style='width:79.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=16 valign=top style='width:11.8pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:-.9pt;text-align:right;
  line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=116 valign=top style='width:87.2pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-left:9.8pt;line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:-.9pt;text-align:right;
  line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-left:9.8pt;line-height:94%'><u>&nbsp;</u></p>
  </td>
 </tr>
 <tr>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-top:0in;margin-right:-.9pt;margin-bottom:
  0in;margin-left:26.1pt;margin-bottom:.0001pt;line-height:94%'>Continuing
  operations</p>
  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'><u>($&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; .21)</u></p>
  </td>
  <td width=31 valign=top style='width:23.6pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:-.9pt;text-align:right;
  line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=107 valign=top style='width:79.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'><u>($&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; .12)</u></p>
  </td>
  <td width=16 valign=top style='width:11.8pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:-.9pt;text-align:right;
  line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=116 valign=top style='width:87.2pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-left:9.8pt;line-height:94%'><u>($&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; .36)</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:-.9pt;text-align:right;
  line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-left:9.8pt;line-height:94%'><u>($&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; .30)</u></p>
  </td>
 </tr>
 <tr>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-top:0in;margin-right:-.9pt;margin-bottom:
  0in;margin-left:26.1pt;margin-bottom:.0001pt;line-height:94%'>Discontinued
  operations</p>
  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'><u>($&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; .10)</u></p>
  </td>
  <td width=31 valign=top style='width:23.6pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:-.9pt;text-align:right;
  line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=107 valign=top style='width:79.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'><u>($&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; .01)</u></p>
  </td>
  <td width=16 valign=top style='width:11.8pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:-.9pt;text-align:right;
  line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=116 valign=top style='width:87.2pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-left:9.8pt;line-height:94%'><u>($&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; .11)</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:-.9pt;text-align:right;
  line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-left:9.8pt;line-height:94%'><u>($&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; .02)</u></p>
  </td>
 </tr>
 <tr>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:-.9pt;line-height:94%'>Net
  loss applicable to common shareholders&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>
  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'><u>($&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; .31)</u></p>
  </td>
  <td width=31 valign=top style='width:23.6pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:-.9pt;text-align:right;
  line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=107 valign=top style='width:79.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'><u>($&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; .13)</u></p>
  </td>
  <td width=16 valign=top style='width:11.8pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:-.9pt;text-align:right;
  line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=116 valign=top style='width:87.2pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-left:9.8pt;line-height:94%'><u>($&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; .46)</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:-.9pt;text-align:right;
  line-height:94%'><u>&nbsp;</u></p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-left:9.8pt;line-height:94%'><u>($&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; .32)</u></p>
  </td>
 </tr>
 <tr>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=31 valign=top style='width:23.6pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=107 valign=top style='width:79.9pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=16 valign=top style='width:11.8pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=116 valign=top style='width:87.2pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=450 valign=top style='width:337.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:-.9pt;line-height:94%'>WEIGHTED
  AVERAGE COMMON SHARES AND EQUIVALENTS</p>
  <p class=MsoNormal style='margin-right:-.9pt;line-height:94%'>USED
  IN PER SHARE CALCULATION: BASIC AND DILUTED</p>
  </td>
  <td width=96 valign=bottom style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'>3,898,559</p>
  </td>
  <td width=31 valign=bottom style='width:23.6pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=107 valign=bottom style='width:79.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.15pt;line-height:94%'>3,898,559</p>
  </td>
  <td width=16 valign=bottom style='width:11.8pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=116 valign=bottom style='width:87.2pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='line-height:94%'>3,898,559</p>
  </td>
  <td width=18 valign=bottom style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=bottom style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='line-height:94%'>3,898,559</p>
  </td>
 </tr>
</table>

<p class=MsoFooter align=center style='text-align:center'>5</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade style='color:navy' align=center>

</div>





<b><br clear=all style='page-break-before:always'>
</b>











<p class=MsoList2 align=center style='margin-left:0in;text-align:center;
text-indent:0in'><b>GOOD
TIMES RESTAURANTS INC. AND SUBSIDIARIES</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS</b></p>

<p class=MsoNormal align=center style='margin-bottom:12.0pt;text-align:center'><b>(Unaudited)</b></p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=726
 style='margin-left:.9pt;border-collapse:collapse'>
 <tr>
  <td width=480 valign=top style='width:5.0in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=246 colspan=3 valign=top style='width:184.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>For the Six Months
  Ended</p>
  <p class=MsoNormal align=center style='text-align:center'>March 31,</p>
  </td>
 </tr>
 <tr>
  <td width=480 valign=top style='width:5.0in;padding:0in 5.4pt 0in 5.4pt'>

  <p class=MsoNormal>CASH FLOWS FROM
  OPERATING ACTIVITIES:</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <h3 align=center style='margin-top:0in;margin-right:.05in;margin-bottom:0in;
  margin-left:0in;margin-bottom:.0001pt;text-align:center'><u>2010</u></h3>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <h3 align=center style='margin:0in;margin-bottom:.0001pt;text-align:center'>&nbsp;</h3>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <h3 align=center style='margin-top:0in;margin-right:.05in;margin-bottom:0in;
  margin-left:0in;margin-bottom:.0001pt;text-align:center'><u>2009</u></h3>
  </td>
 </tr>
 <tr>
  <td width=480 valign=top style='width:5.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp; Net
  loss </p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:.05in'>($1,948,000)</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:.05in'>($1,311,000)</p>
  </td>
 </tr>
 <tr>
  <td width=480 valign=top style='width:5.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp; Adjustments
  to reconcile net loss to net cash</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=480 valign=top style='width:5.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;
  used in operating activities:</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=480 valign=top style='width:5.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Depreciation
  and amortization</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>490,000</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>627,000</p>
  </td>
 </tr>
 <tr>
  <td width=480 valign=top style='width:5.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Amortization
  of debt issuance costs</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>90,000</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>-</p>
  </td>
 </tr>
 <tr>
  <td width=480 valign=top style='width:5.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Stock
  based compensation expense</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>44,000</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>39,000</p>
  </td>
 </tr>
 <tr>
  <td width=480 valign=top style='width:5.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Unrealized
  loss (gain) on interest rate swap</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>(10,000)</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>116,000</p>
  </td>
 </tr>
 <tr>
  <td width=480 valign=top style='width:5.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accretion
  of deferred rent</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>1,000</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>-</p>
  </td>
 </tr>
 <tr>
  <td width=480 valign=top style='width:5.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Recognition
  of deferred (gain) on sale of restaurant building</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>(15,000)</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>(15,000)</p>
  </td>
 </tr>
 <tr>
  <td width=480 valign=top style='width:5.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Discontinued
  operations costs</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>358,000</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>-</p>
  </td>
 </tr>
 <tr>
  <td width=480 valign=top style='width:5.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Changes
  in operating assets and liabilities:</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=480 valign=top style='width:5.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (Increase)
  decrease in:</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=480 valign=top style='width:5.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Receivables
  and other</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>(74,000)</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>11,000</p>
  </td>
 </tr>
 <tr>
  <td width=480 valign=top style='width:5.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Inventories</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>19,000</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>3,000</p>
  </td>
 </tr>
 <tr>
  <td width=480 valign=top style='width:5.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deposits
  and other</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>(49,000)</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>9,000</p>
  </td>
 </tr>
 <tr style='height:4.0pt'>
  <td width=480 valign=top style='width:5.0in;padding:0in 5.4pt 0in 5.4pt;
  height:4.0pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (Decrease)
  increase in:</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:4.0pt'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:4.0pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:4.0pt'>

  </td>
 </tr>
 <tr>
  <td width=480 valign=top style='width:5.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts
  payable</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>341,000</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>(279,000)</p>
  </td>
 </tr>
 <tr>
  <td width=480 valign=top style='width:5.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accrued
  liabilities and deferred income</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 83,000</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (8,000)</u></p>
  </td>
 </tr>
 <tr>
  <td width=480 valign=top style='width:5.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net
  cash used in operating activities</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>(670,000)</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>(808,000)</p>
  </td>
 </tr>
 <tr>
  <td width=480 valign=top style='width:5.0in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=480 valign=top style='width:5.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>CASH FLOWS USED IN
  INVESTING ACTIVITIES</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=480 valign=top style='width:5.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp; Payments
  for the purchase of property and equipment</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>(24,000)</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>(245,000)</p>
  </td>
 </tr>
 <tr>
  <td width=480 valign=top style='width:5.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp; Loans
  made to franchisees and to others</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>-</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>(31,000)</p>
  </td>
 </tr>
 <tr>
  <td width=480 valign=top style='width:5.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp; Payments
  received on loans to franchisees and to others</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 8,000</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 22,000</u></p>
  </td>
 </tr>
 <tr>
  <td width=480 valign=top style='width:5.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net
  cash used in investing activities</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>(16,000)</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>(254,000)</p>
  </td>
 </tr>
 <tr>
  <td width=480 valign=top style='width:5.0in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=480 valign=top style='width:5.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>CASH FLOWS FROM
  FINANCING ACTIVITIES:</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=480 valign=top style='width:5.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp; Principal
  payments on notes payable, and long-term debt</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>(67,000)</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>(60,000)</p>
  </td>
 </tr>
 <tr>
  <td width=480 valign=top style='width:5.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp; Borrowings
  on notes payable and long-term debt</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>400,000</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>-</p>
  </td>
 </tr>
 <tr>
  <td width=480 valign=top style='width:5.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp; Net
  Proceeds (repayments) on revolving lines of credit</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>-</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>320,000</p>
  </td>
 </tr>
 <tr>
  <td width=480 valign=top style='width:5.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:-9.9pt'>&nbsp;&nbsp;&nbsp;&nbsp; Distributions, net of contributions
  paid to non-controlling interests</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 71,000</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (11,000)</u></p>
  </td>
 </tr>
 <tr>
  <td width=480 valign=top style='width:5.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net
  cash provided by financing activities</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 404,000</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 249,000</u></p>
  </td>
 </tr>
 <tr>
  <td width=480 valign=top style='width:5.0in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=480 valign=top style='width:5.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>NET CHANGE IN CASH AND CASH EQUIVALENTS</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>(282,000)</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>(813,000)</p>
  </td>
 </tr>
 <tr>
  <td width=480 valign=top style='width:5.0in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=480 valign=top style='width:5.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>CASH AND CASH EQUIVALENTS, beginning of period</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:.05in'><u>$815,000</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:.05in'><u>$1,414,000</u></p>
  </td>
 </tr>
 <tr>
  <td width=480 valign=top style='width:5.0in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=480 valign=top style='width:5.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>CASH AND CASH EQUIVALENTS, end of period</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><u>$&nbsp;&nbsp;&nbsp;&nbsp; 533,000</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><u>$&nbsp;&nbsp;&nbsp;&nbsp; 601,000</u></p>
  </td>
 </tr>
 <tr>
  <td width=480 valign=top style='width:5.0in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=480 valign=top style='width:5.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>SUPPLEMENTAL
  DISCLOSURES OF CASH FLOW INFORMATION:</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=480 valign=top style='width:5.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp; Cash
  paid for interest</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><u>$&nbsp;&nbsp;&nbsp;&nbsp; 146,000</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><u>$&nbsp;&nbsp;&nbsp;&nbsp; 133,000</u></p>
  <p class=MsoNormal><u>&nbsp;</u></p>
  </td>
 </tr>
 <tr>
  <td width=480 valign=top style='width:5.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp; Non-cash
  fair value of warrants and beneficial conversion feature issued&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  with debt</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-top:9.0pt'><u>$&nbsp;&nbsp;&nbsp;&nbsp; 277,000</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-top:9.0pt'><u>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</u></p>
  <p class=MsoNormal><u>&nbsp;</u></p>
  </td>
 </tr>
</table>

<p class=MsoNormal align=center style='text-align:center'><b>&nbsp;</b></p>

<p class=MsoFooter align=center style='text-align:center'>6</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade style='color:navy' align=center>

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<br clear=all style='page-break-before:always'>










<p class=MsoNormal align=center style='text-align:center'><b>GOOD TIMES
RESTAURANTS INC. AND SUBSIDIARIES</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS</b></p>

<p class=MsoNormal align=center style='margin-bottom:12.0pt;text-align:center'><b>(Unaudited)</b></p>

<p class=MsoBodyText align=left style='margin-top:0in;margin-right:0in;
margin-bottom:6.0pt;margin-left:0in;text-align:left;line-height:normal'><b>Note 1. Basis of Presentation</b></p>

<p class=MsoBodyText style='margin-right:0in;line-height:normal'>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, 2010, the results of its operations and
its cash flows for the three and six month periods ended March 31, 2010. Operating
results for the three and six month periods ended March 31, 2010 are not
necessarily indicative of the results that may be expected for the year ending
September 30, 2010. The condensed consolidated balance sheet as of September
30, 2009 is derived from the audited financial statements, but does not include
all disclosures required by generally accepted accounting principles.&nbsp; As a
result, these financial statements should be read in conjunction with the
Company's Form 10-K for the fiscal year ended September 30, 2009.</p>

<p style='margin-top:9.0pt;margin-right:0in;margin-bottom:0in;margin-left:0in;
margin-bottom:.0001pt;text-align:justify'>Effective October 1,
2009, we adopted new accounting standards relating to non-controlling interests
in consolidated financial statements. The new accounting guidance established
accounting and reporting standards that require non-controlling interests to be
reported as a component of equity, changes in a parent's ownership interest
while the parent retains its controlling interest to be accounted for as equity
transactions, and any retained non-controlling equity investment upon the
deconsolidation of a subsidiary to be initially measured at fair value. The
adoption of this new accounting guidance primarily resulted in moving the
presentation of non-controlling interest to the &quot;Stockholders' Equity&quot; section
of our condensed consolidated balance sheet. </p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in'><strong>Note
2. Recent Developments</strong></p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-autospace:none'><i>New Loan
Agreement</i></p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify;text-autospace:
none'>As reported on Form 8k dated February 3, 2010, the Company entered
into a loan agreement with W Capital, John T. MacDonald and Golden Bridge, LLC
(collectively &quot;the Lender&quot;), pursuant to which the Lender made a loan of
$200,000, with up to an additional $200,000 loan available through April 30,
2010 (the &quot;Loan&quot;), to be used for restaurant marketing and other working
capital uses of the Company.&nbsp; At March 31, 2010 the entire $400,000 had been
advanced to the Company. </p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify;text-autospace:
none'>The Loan is evidenced by a Convertible Secured Promissory Note
dated February 1, 2010 (the &quot;Note&quot;) made by the Company and shall bear interest
at a rate of 12% per annum on the unpaid principal balance through August 1,
2010.&nbsp; The maturity date for payment of all principal and interest on the Note
is December 31, 2010.&nbsp; However, if and to the extent that any portion of the
Note is still outstanding after August 1, 2010, the interest rate will increase
to 14% per annum from and after August 1, 2010 until the maturity date.&nbsp; All
interest accrues through the maturity date.&nbsp; The Loan Agreement contains
customary event of default provisions and a cross-default provision with
respect to the loan agreement for the Wells Fargo Bank and PFGI II, LLC loans
in the event of payment default on either of those loans.&nbsp; Upon the occurrence
and continuance of an event of default, the Lender may declare all or part of
the unpaid principal and accrued and unpaid interest on the Loan due and
payable.&nbsp; Any amounts not paid to the Lender when due will bear interest from
the due date until paid at a rate of 16% per annum.</p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify;text-autospace:
none'>The Loan Agreement and the Note are subject to the terms of a
Leasehold Deed of Trust Agreement and Security Agreement with respect to
certain of GTDT's restaurants that were not previously pledged as collateral
under the Wells Fargo Bank or PFGI II, LLC borrowings.&nbsp; The Note is convertible
into shares of common stock of the Company (the &quot;Conversion Shares&quot;) at any
time prior to repayment at a conversion price of 25% less than the average
price of the Company's common stock during the 20 days prior to the conversion
date, provided however that the conversion price shall not be below $.75 per share
nor above $1.08 per share (the &quot;Conversion Price&quot;).</p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify;text-autospace:
none'>In connection with the Loan, the Company issued warrants dated
February 1, 2010 (the &quot;Warrants&quot;) to the Lender which provides that the Lender
may at any time from February 1, 2010 until two years from the date of
repayment or conversion of the Loan purchase up to an aggregate of 50,000
shares of the Company's common stock (the &quot;Warrant Shares&quot;) at an exercise
price that is equal to the Conversion Price calculation above.&nbsp; If the Loan is
not repaid prior to August 1, 2010, the Company will issue warrants for the
purchase of 50,000 additional shares of the Company's common stock upon the
same terms as the initial Warrants.&nbsp; The number of Warrant Shares and the
exercise price are subject to customary anti-dilution adjustments upon the
occurrence of any stock dividends, stock splits, reverse stock splits,
recapitalizations, reclassifications, stock combinations or similar events.</p>

<p class=MsoFooter align=center style='text-align:center'>7</p>

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</div>



<br clear=all style='page-break-before:always'>










<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify;text-autospace:
none'>Effective April 1, 2010 and as reported on Form 8k the Company
entered into a First Amendment to Loan Agreement (the &quot;First Amendment&quot;) which
amends that certain Loan Agreement, dated February 1, 2010 (the &quot;Loan
Agreement&quot;). As a result of regulatory concerns, the effect of the First
Amendment was to replace Golden Bridge as a Lender Party under the Loan
Agreement with W Capital and McDonald on the same terms and conditions that
applied to Golden Bridge.&nbsp; </p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify;text-autospace:
none'>The First Amendment provides for the repayment of the entire
principal amount of $150,000 owed to Golden Bridge upon the Effective Date,
whereby Golden Bridge will thereafter cease to be a Lender Party under the Loan
Agreement and to have any rights and obligations there under, except that the
Company shall remain liable for accrued interest to Golden Bridge through the
Effective Date, payable on August 1, 2010.&nbsp; The First Amendment further
provides for additional loans to the Company by W Capital, in the additional
principal amount of $100,000, and McDonald, in the additional principal amount
of $50,000, on the Effective Date.&nbsp;&nbsp; </p>

<p class=Style37 style='margin-bottom:6.0pt;text-align:justify;text-indent:
0in'>Pursuant to the First Amendment, the Secured Convertible
Promissory Note, dated February 1, 2010, issued by the Company and GTDT to
Golden Bridge, W Capital and McDonald, was cancelled in its entirety.&nbsp; The
Company issued a new Secured Convertible Promissory Note (the &quot;New Note&quot;) to W
Capital and McDonald dated April 1, 2010.&nbsp; </p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>The fair value of the
warrants of $38,000 will be accredited to interest over the term of the loan.
The intrinsic value of the embedded beneficial conversion feature of $161,000
will be accredited to interest over the term of the loan.</p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'><i>PFGI II LLC Amended
Loan Agreement</i></p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>Effective January 2,
2010 and as reported on Form 8k, the Company entered into an agreement to amend
its loan with PFGI II LLC.&nbsp; The maturity date was extended to December 31,
2012, the interest rate was increased to 8.65% and monthly payments of
principal and interest are payable beginning January 31, 2010, based upon a 25
year amortization prior to maturity.&nbsp; In connection with the agreement the
Company also issued in January 2010 112,612 warrants exercisable at $1.11. The
fair value of the warrants of $79,000 wll be accredited to interest over the
term of the loan.</p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'><i>Special Committee
Formation</i></p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>On August 14, 2009 and
as reported on our Form 10k for the period ending September 30, 2009, we
announced that our Board of Directors has formed a Special Committee comprised
of directors Richard Stark, Alan Teran and Geoff Bailey to explore and evaluate
strategic alternatives aimed at enhancing shareholder value and explore alternatives
to reduce the cost burdens of being a publicly held entity. The Company has
hired Mastodon Ventures, Inc. to provide strategic advisory services and
explore other strategic alternatives intended to further the
long-term&nbsp;business prospects of the Company and provide incremental value
to its shareholders.&nbsp; </p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>There can
be no assurance regarding the timing of or whether the Board will elect to
pursue any of the strategic alternatives it may consider, or that any such
alternatives will result in changes to the Company's plans or will be
consummated and there is no certainty that any&nbsp;strategic alternative will
involve a transaction for shareholders at a share price&nbsp;equal to&nbsp;or
above the current&nbsp;trading&nbsp;price of the Company's shares, bearing in
mind that the trading market for the Company's shares is relatively inactive
and that the Company has&nbsp;realized losses from operations during recent
periods.&nbsp;&nbsp;The Company does not intend to provide updates or make any
further comment until the outcome of the process is determined or until there
are significant developments.&nbsp; We anticipate that we will extend the agreement with
Mastodon Ventures, Inc. beyond the initial six month engagement period.</p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-autospace:none'><strong>Note 3. Debt Covenant
Compliance</strong></p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>As reported on the
form 8-K filed on January 23, 2009, we are in default of certain technical loan
covenants on our note payable to Wells Fargo Bank, N.A. (&quot;the Bank&quot;). Therefore
all amounts owing under this facility are reflected as current in the
accompanying Condensed Consolidated Balance Sheet as of March 31, 2010. We have
never been in payment default on the note and expect to be able to remain
current on payments in fiscal 2010, depending on our sales trends and cash flow
from operations.&nbsp; On February 9, 2009 we received a Reservation of Rights
letter from the Bank formally notifying us of the default of the Earnings
Before Interest Taxes and Depreciation (&quot;EBITDA&quot;) Coverage Ratio of not less
than 1.5 to 1.0 and the Tangible Net Worth of not less than $5,000,000 as set
forth in the Credit Agreement for the period ending December 31, 2008. The
letter serves as notice that notwithstanding the foregoing events of default,
the Bank is reserving all of its rights and remedies under the Credit Agreement
and related agreements.</p>

<p class=MsoFooter align=center style='text-align:center'>8</p>

<div class=MsoNormal align=center style='text-align:center'>

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</div>



<br clear=all style='page-break-before:always'>










<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>The Bank is not
accelerating the Loan at this time and is continuing to accept regularly
scheduled payments of principal and interest under the Loan, however the
acceptance of payments under the Loan does not constitute a modification of the
Credit Agreement or a waiver of any of the covenants or of the Bank's rights or
remedies under the Credit Agreement, including the right to accelerate the loan
in the future after the giving of notice.&nbsp; We will continue to work with the
Bank on a Required Corrective Action for compliance with existing or modified
loan covenants.&nbsp; There can be no assurance that the Bank will agree to modify
or waive any of the loan covenants or waive any of its rights or remedies under
the Credit Agreement and we would require additional financing to repay the loan
balance.&nbsp; The loan is secured by security agreements in the equipment of four
restaurants.</p>

<p class=MsoNormal style='margin-bottom:6.0pt'><strong>Note 4. Discontinued Operations</strong></p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>Discontinued
operations include results attributable to our Commerce City, Colorado dual-branded
restaurant that was closed in March 2010. The loss from discontinued operations
includes both the current and historical results of operations, the fair value
of all future lease obligations and an impairment charge to write down the
fixed assets to book value. Fixed assets of $403,000 and $403,000 of associated
accumulated depreciation related to discontinued operations are included in the
property and equipment of our condensed consolidated balance sheet. Current and
long-term liabilities related to discontinued operations relate to the
estimated lease obligation.</p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>Following is a
summary of the costs from discontinued operations for the current and prior
year periods:</p>

<div align=center>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=645
 style='border-collapse:collapse'>
 <tr style='height:12.4pt'>
  <td width=232 colspan=2 valign=bottom style='width:173.8pt;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=17 colspan=2 valign=bottom style='width:12.7pt;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=179 colspan=7 valign=bottom style='width:133.95pt;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>Three Months Ended</p>
  </td>
  <td width=7 colspan=2 valign=bottom style='width:5.3pt;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=29 colspan=2 valign=bottom style='width:21.95pt;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=180 colspan=7 valign=bottom style='width:134.85pt;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>Six Months Ended</p>
  </td>
  <td width=1 colspan=2 valign=bottom style='width:1.0pt;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
 </tr>
 <tr style='height:12.4pt'>
  <td width=232 colspan=2 valign=bottom style='width:173.8pt;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=17 colspan=2 valign=bottom style='width:12.7pt;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=179 colspan=7 valign=bottom style='width:133.95pt;border:none;
  border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:12.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>March 31,</p>
  </td>
  <td width=7 colspan=2 valign=bottom style='width:5.3pt;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=29 colspan=2 valign=bottom style='width:21.95pt;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=180 colspan=7 valign=bottom style='width:134.85pt;border:none;
  border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:12.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>March 31,</p>
  </td>
  <td width=1 colspan=2 valign=bottom style='width:1.0pt;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
 </tr>
 <tr style='height:12.4pt'>
  <td width=231 valign=bottom style='width:173.3pt;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=17 colspan=2 valign=bottom style='width:12.7pt;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=79 colspan=3 valign=bottom style='width:59.05pt;border-top:solid windowtext 1.0pt;
  border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
  padding:0in 0in 0in 0in;height:12.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>2010</p>
  </td>
  <td width=12 valign=bottom style='width:9.1pt;border-top:solid windowtext 1.0pt;
  border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
  padding:0in 0in 0in 0in;height:12.4pt'>

  </td>
  <td width=9 valign=bottom style='width:7.1pt;border-top:solid windowtext 1.0pt;
  border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
  padding:0in 0in 0in 0in;height:12.4pt'>

  </td>
  <td width=78 colspan=2 valign=bottom style='width:58.7pt;border-top:solid windowtext 1.0pt;
  border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
  padding:0in 0in 0in 0in;height:12.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>2009</p>
  </td>
  <td width=7 colspan=2 valign=bottom style='width:5.3pt;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=29 colspan=2 valign=bottom style='width:21.8pt;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=79 colspan=3 valign=bottom style='width:59.25pt;border-top:solid windowtext 1.0pt;
  border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
  padding:0in 0in 0in 0in;height:12.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>2010</p>
  </td>
  <td width=3 valign=bottom style='width:2.25pt;border-top:solid windowtext 1.0pt;
  border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
  padding:0in 0in 0in 0in;height:12.4pt'>

  </td>
  <td width=21 valign=bottom style='width:15.65pt;border-top:solid windowtext 1.0pt;
  border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
  padding:0in 0in 0in 0in;height:12.4pt'>

  </td>
  <td width=77 colspan=2 valign=bottom style='width:57.7pt;border-top:solid windowtext 1.0pt;
  border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
  padding:0in 0in 0in 0in;height:12.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>2009</p>
  </td>
  <td width=2 colspan=2 valign=bottom style='width:1.35pt;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td style='border:none;padding:0in 0in 0in 0in' width=0><p class='MsoNormal'>&nbsp;</td>
 </tr>
 <tr style='height:12.4pt'>
  <td width=231 valign=bottom style='width:173.3pt;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal style='margin-left:12.1pt;text-indent:-12.1pt'>Results of
  operations</p>
  </td>
  <td width=17 colspan=2 valign=bottom style='width:12.7pt;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=20 colspan=2 valign=bottom style='width:15.05pt;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>$</p>
  </td>
  <td width=59 valign=bottom style='width:44.0pt;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>43,000</p>
  </td>
  <td width=12 valign=bottom style='width:9.1pt;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=9 valign=bottom style='width:7.1pt;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=22 valign=bottom style='width:16.15pt;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>$</p>
  </td>
  <td width=57 valign=bottom style='width:42.55pt;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>28,000</p>
  </td>
  <td width=7 colspan=2 valign=bottom style='width:5.3pt;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=29 colspan=2 valign=bottom style='width:21.8pt;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=20 colspan=2 valign=bottom style='width:15.25pt;border:none;
  padding:0in 0in 0in 0in;height:12.4pt'>
  <p class=MsoNormal>$</p>
  </td>
  <td width=59 valign=bottom style='width:44.0pt;border:none;border-top:solid windowtext 1.0pt;
  padding:0in 0in 0in 0in;height:12.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>87,000</p>
  </td>
  <td width=3 valign=bottom style='width:2.25pt;border:none;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=21 valign=bottom style='width:15.65pt;border:none;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=20 valign=bottom style='width:15.25pt;border:none;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>$</p>
  </td>
  <td width=57 valign=bottom style='width:42.45pt;border:none;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>69,000</p>
  </td>
  <td width=2 colspan=2 valign=bottom style='width:1.35pt;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td style='border:none;padding:0in 0in 0in 0in' width=0><p class='MsoNormal'>&nbsp;</td>
 </tr>
 <tr style='height:12.4pt'>
  <td width=231 valign=bottom style='width:173.3pt;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal style='margin-left:12.1pt;text-indent:-12.1pt'>Future lease
  obligations, fair value</p>
  </td>
  <td width=17 colspan=2 valign=bottom style='width:12.7pt;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=20 colspan=2 valign=bottom style='width:15.05pt;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=59 valign=bottom style='width:44.0pt;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>117,000</p>
  </td>
  <td width=12 valign=bottom style='width:9.1pt;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=9 valign=bottom style='width:7.1pt;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=22 valign=bottom style='width:16.15pt;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=57 valign=bottom style='width:42.55pt;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>-</p>
  </td>
  <td width=7 colspan=2 valign=bottom style='width:5.3pt;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=29 colspan=2 valign=bottom style='width:21.8pt;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=20 colspan=2 valign=bottom style='width:15.25pt;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=59 valign=bottom style='width:44.0pt;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>117,000</p>
  </td>
  <td width=3 valign=bottom style='width:2.25pt;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=21 valign=bottom style='width:15.65pt;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=20 valign=bottom style='width:15.25pt;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=57 valign=bottom style='width:42.45pt;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>-</p>
  </td>
  <td width=2 colspan=2 valign=bottom style='width:1.35pt;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td style='border:none;padding:0in 0in 0in 0in' width=0><p class='MsoNormal'>&nbsp;</td>
 </tr>
 <tr style='height:12.4pt'>
  <td width=231 valign=bottom style='width:173.3pt;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal style='margin-left:12.1pt;text-indent:-12.1pt'>Asset impairment
  charge</p>
  </td>
  <td width=17 colspan=2 valign=bottom style='width:12.7pt;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=20 colspan=2 valign=bottom style='width:15.05pt;border:none;
  border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:12.4pt'>

  </td>
  <td width=59 valign=bottom style='width:44.0pt;border:none;border-bottom:
  solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:12.4pt'>
  <p class=MsoNormal align=right style='margin-left:-14.9pt;text-align:right'>217,000</p>
  </td>
  <td width=12 valign=bottom style='width:9.1pt;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=9 valign=bottom style='width:7.1pt;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=22 valign=bottom style='width:16.15pt;border:none;border-bottom:
  solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:12.4pt'>

  </td>
  <td width=57 valign=bottom style='width:42.55pt;border:none;border-bottom:
  solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:12.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>-</p>
  </td>
  <td width=7 colspan=2 valign=bottom style='width:5.3pt;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=29 colspan=2 valign=bottom style='width:21.8pt;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=20 colspan=2 valign=bottom style='width:15.25pt;border:none;
  border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:12.4pt'>

  </td>
  <td width=59 valign=bottom style='width:44.0pt;border:none;border-bottom:
  solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:12.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>217,000</p>
  </td>
  <td width=3 valign=bottom style='width:2.25pt;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 0in 0in 0in;height:12.4pt'>

  </td>
  <td width=21 valign=bottom style='width:15.65pt;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=20 valign=bottom style='width:15.25pt;border:none;border-bottom:
  solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:12.4pt'>

  </td>
  <td width=57 valign=bottom style='width:42.45pt;border:none;border-bottom:
  solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:12.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>-</p>
  </td>
  <td width=2 colspan=2 valign=bottom style='width:1.35pt;border:none;
  border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:12.4pt'>

  </td>
  <td style='border:none;padding:0in 0in 0in 0in' width=0><p class='MsoNormal'>&nbsp;</td>
 </tr>
 <tr style='height:24.75pt'>
  <td width=231 valign=bottom style='width:173.3pt;padding:0in 0in 0in 0in;
  height:24.75pt'>
  <p class=MsoNormal style='margin-left:12.1pt;text-indent:-12.1pt'>Loss&nbsp;from
  discontinued operations</p>
  </td>
  <td width=17 colspan=2 valign=bottom style='width:12.7pt;padding:0in 0in 0in 0in;
  height:24.75pt'>

  </td>
  <td width=20 colspan=2 valign=bottom style='width:15.05pt;border:none;
  padding:0in 0in 0in 0in;height:24.75pt'>
  <p class=MsoNormal>$</p>
  </td>
  <td width=59 valign=bottom style='width:44.0pt;border:none;padding:0in 0in 0in 0in;
  height:24.75pt'>
  <p class=MsoNormal align=right style='text-align:right'>377,000</p>
  </td>
  <td width=12 valign=bottom style='width:9.1pt;padding:0in 0in 0in 0in;
  height:24.75pt'>

  </td>
  <td width=9 valign=bottom style='width:7.1pt;padding:0in 0in 0in 0in;
  height:24.75pt'>

  </td>
  <td width=22 valign=bottom style='width:16.15pt;border:none;padding:0in 0in 0in 0in;
  height:24.75pt'>
  <p class=MsoNormal>$</p>
  </td>
  <td width=57 valign=bottom style='width:42.55pt;border:none;padding:0in 0in 0in 0in;
  height:24.75pt'>
  <p class=MsoNormal align=right style='text-align:right'>28,000</p>
  </td>
  <td width=7 colspan=2 valign=bottom style='width:5.3pt;padding:0in 0in 0in 0in;
  height:24.75pt'>

  </td>
  <td width=29 colspan=2 valign=bottom style='width:21.8pt;padding:0in 0in 0in 0in;
  height:24.75pt'>

  </td>
  <td width=20 colspan=2 valign=bottom style='width:15.25pt;border:none;
  padding:0in 0in 0in 0in;height:24.75pt'>
  <p class=MsoNormal>$</p>
  </td>
  <td width=59 valign=bottom style='width:44.0pt;border:none;padding:0in 0in 0in 0in;
  height:24.75pt'>
  <p class=MsoNormal align=right style='text-align:right'>421,000</p>
  </td>
  <td width=3 valign=bottom style='width:2.25pt;border:none;padding:0in 0in 0in 0in;
  height:24.75pt'>

  </td>
  <td width=21 valign=bottom style='width:15.65pt;padding:0in 0in 0in 0in;
  height:24.75pt'>

  </td>
  <td width=20 valign=bottom style='width:15.25pt;border:none;padding:0in 0in 0in 0in;
  height:24.75pt'>
  <p class=MsoNormal>$</p>
  </td>
  <td width=57 valign=bottom style='width:42.45pt;border:none;padding:0in 0in 0in 0in;
  height:24.75pt'>
  <p class=MsoNormal align=right style='text-align:right'>69,000</p>
  </td>
  <td width=2 colspan=2 valign=bottom style='width:1.35pt;border:none;
  padding:0in 0in 0in 0in;height:24.75pt'>

  </td>
  <td style='border:none;padding:0in 0in 0in 0in' width=0><p class='MsoNormal'>&nbsp;</td>
 </tr>
 <tr style='height:3.15pt'>
  <td width=231 style='width:173.3pt;padding:0in 0in 0in 0in;height:3.15pt'>

  </td>
  <td width=17 colspan=2 style='width:12.7pt;padding:0in 0in 0in 0in;
  height:3.15pt'>

  </td>
  <td width=79 colspan=3 style='width:59.05pt;border:none;border-top:double black 2.25pt;
  padding:0in 0in 0in 0in;height:3.15pt'>

  </td>
  <td width=12 style='width:9.1pt;padding:0in 0in 0in 0in;height:3.15pt'>

  </td>
  <td width=9 style='width:7.1pt;padding:0in 0in 0in 0in;height:3.15pt'>

  </td>
  <td width=78 colspan=2 style='width:58.7pt;border:none;border-top:double black 2.25pt;
  padding:0in 0in 0in 0in;height:3.15pt'>

  </td>
  <td width=7 colspan=2 style='width:5.3pt;padding:0in 0in 0in 0in;height:3.15pt'>

  </td>
  <td width=29 colspan=2 style='width:21.8pt;padding:0in 0in 0in 0in;
  height:3.15pt'>

  </td>
  <td width=79 colspan=3 style='width:59.25pt;border:none;border-top:double black 2.25pt;
  padding:0in 0in 0in 0in;height:3.15pt'>

  </td>
  <td width=3 style='width:2.25pt;padding:0in 0in 0in 0in;height:3.15pt'>

  </td>
  <td width=21 style='width:15.65pt;padding:0in 0in 0in 0in;height:3.15pt'>

  </td>
  <td width=77 colspan=2 style='width:57.7pt;border:none;border-top:double black 2.25pt;
  padding:0in 0in 0in 0in;height:3.15pt'>

  </td>
  <td width=2 colspan=2 style='width:1.35pt;padding:0in 0in 0in 0in;height:
  3.15pt'>

  </td>
  <td style='border:none;padding:0in 0in 0in 0in' width=0><p class='MsoNormal'>&nbsp;</td>
 </tr>
 <tr height=0>
  <td width=229 style='border:none'></td>
  <td width=1 style='border:none'></td>
  <td width=16 style='border:none'></td>
  <td width=1 style='border:none'></td>
  <td width=19 style='border:none'></td>
  <td width=59 style='border:none'></td>
  <td width=12 style='border:none'></td>
  <td width=9 style='border:none'></td>
  <td width=21 style='border:none'></td>
  <td width=57 style='border:none'></td>
  <td width=1 style='border:none'></td>
  <td width=6 style='border:none'></td>
  <td width=1 style='border:none'></td>
  <td width=28 style='border:none'></td>
  <td width=1 style='border:none'></td>
  <td width=19 style='border:none'></td>
  <td width=59 style='border:none'></td>
  <td width=4 style='border:none'></td>
  <td width=21 style='border:none'></td>
  <td width=20 style='border:none'></td>
  <td width=56 style='border:none'></td>
  <td width=1 style='border:none'></td>
  <td width=3 style='border:none'></td>
  <td width=1 style='border:none'></td>
 </tr>
</table>

</div>

<p class=MsoNormal style='margin-bottom:6.0pt'><strong>Note 5. Stock-Based Compensation</strong></p>

<p class=MsoBodyText2 style='margin-bottom:6.0pt;text-align:justify'>The Company measures the compensation
cost associated with share-based payments by estimating the fair value of stock
options as of the grant date using the Black-Scholes option pricing model. The
Company believes that the valuation technique and the approach utilized to
develop the underlying assumptions are appropriate in calculating the fair
values of the Company's stock options granted during all years presented.
Estimates of fair value are not intended to predict actual future events or the
value ultimately realized by the employees who receive equity awards.</p>

<p class=MsoBodyText2 style='margin-bottom:6.0pt;text-align:justify'>Our net loss for the six months ended March
31, 2010 and March 31, 2009 includes $44,000 and $39,000, respectively, of
compensation costs related to our stock-based compensation arrangements.</p>

<p class=MsoNormal style='margin-top:0in;margin-right:4.3pt;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>During the six months ended March 31, 2010, we granted
12,000 non-statutory stock options and 30,606 incentive stock options both with
exercise prices of $1.15. The per share weighted average fair value was $.85 for
the non-statutory stock option grants and $.84 for the incentive stock option
grants.</p>

<p class=MsoNormal style='margin-top:0in;margin-right:4.3pt;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>In addition to the exercise and grant date prices of the
awards, certain weighted average assumptions that were used to estimate the
fair value of stock option grants are listed in the following table:</p>

<div align=center>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='border-collapse:collapse'>
 <tr>
  <td width=168 valign=top style='width:1.75in;padding:0in 0in 0in 0in'>

  </td>
  <td width=192 valign=top style='width:2.0in;border:none;border-bottom:solid black 1.0pt;
  padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=center style='margin-right:4.5pt;text-align:center'><strong>Incentive Stock
  Options</strong></p>
  </td>
  <td width=228 valign=top style='width:171.0pt;border:none;border-bottom:solid black 1.0pt;
  padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=center style='margin-right:4.5pt;text-align:center'><strong>Non-Statutory Stock
  Options</strong></p>
  </td>
 </tr>
 <tr>
  <td width=168 valign=top style='width:1.75in;background:silver;padding:0in 0in 0in 0in'>
  <p class=MsoNormal style='margin-right:4.5pt'>Expected term (years)</p>
  </td>
  <td width=192 valign=top style='width:2.0in;background:silver;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=center style='margin-right:4.5pt;text-align:center'><strong>6.5&nbsp;</strong></p>
  </td>
  <td width=228 valign=top style='width:171.0pt;background:silver;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=center style='margin-right:4.5pt;text-align:center'>6.7&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=168 valign=top style='width:1.75in;background:white;padding:0in 0in 0in 0in'>
  <p class=MsoNormal style='margin-right:4.5pt'>Expected volatility</p>
  </td>
  <td width=192 valign=top style='width:2.0in;background:white;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=center style='margin-right:4.5pt;text-align:center'><strong>82.4%</strong></p>
  </td>
  <td width=228 valign=top style='width:171.0pt;background:white;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=center style='margin-right:4.5pt;text-align:center'>81.9%</p>
  </td>
 </tr>
 <tr>
  <td width=168 valign=top style='width:1.75in;background:silver;padding:0in 0in 0in 0in'>
  <p class=MsoNormal style='margin-right:4.5pt'>Risk-free interest rate</p>
  </td>
  <td width=192 valign=top style='width:2.0in;background:silver;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=center style='margin-right:4.5pt;text-align:center'><strong>2.84%</strong></p>
  </td>
  <td width=228 valign=top style='width:171.0pt;background:silver;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=center style='margin-right:4.5pt;text-align:center'>2.90%</p>
  </td>
 </tr>
 <tr>
  <td width=168 valign=top style='width:1.75in;background:white;padding:0in 0in 0in 0in'>
  <p class=MsoNormal style='margin-right:4.5pt'>Expected dividends</p>
  </td>
  <td width=192 valign=top style='width:2.0in;background:white;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=center style='margin-right:4.5pt;text-align:center'><strong>0</strong></p>
  </td>
  <td width=228 valign=top style='width:171.0pt;background:white;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=center style='margin-right:4.5pt;text-align:center'>0</p>
  </td>
 </tr>
</table>

</div>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:4.3pt;margin-bottom:
6.0pt;margin-left:0in;text-align:justify'>We estimate expected volatility based on
historical weekly price changes of our common stock for a period equal to the
current expected term of the options. The risk-free interest rate is based on
the United States treasury yields in effect at the time of grant corresponding
with the expected term of the options. The expected option term is the number
of years we estimate that options will be outstanding prior to exercise
considering vesting schedules and our historical exercise patterns.</p>



<p class=MsoFooter align=center style='text-align:center'>9</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade style='color:navy' align=center>

</div>



<br clear=all style='page-break-before:always'>










<p class=MsoBodyText2 style='margin-top:0in;margin-right:4.3pt;margin-bottom:
6.0pt;margin-left:0in;text-align:justify'>SFAS
123(R) requires the cash flows resulting from the tax benefits for tax
deductions in excess of the compensation expense recorded for those options
(excess tax benefits) to be classified as financing cash flows. These excess
tax benefits were $0 for the three months ended March 31, 2010.</p>

<p class=MsoBodyText2 style='margin-top:0in;margin-right:4.3pt;margin-bottom:
6.0pt;margin-left:0in;text-align:justify'>A
summary of stock option activity under our share-based compensation plan for
the three months ended March 31, 2010 is presented in the following table:</p>

<div align=center>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='border-collapse:collapse'>
 <tr>
  <td width=193 valign=top style='width:144.4pt;padding:0in 5.4pt 0in 5.4pt'><a
  name="OLE_LINK1"></a>
  <p class=MsoNormal style='margin-right:4.5pt'><b>&nbsp;</b></p>
  </td>
  <td width=91 valign=bottom style='width:68.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='margin-right:4.5pt;text-align:center'><b><u>Options</u></b></p>
  </td>
  <td width=126 valign=bottom style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='margin-right:4.5pt;text-align:center'><b>Weighted Average <u>Exercise
  Price</u></b></p>
  </td>
  <td width=132 valign=bottom style='width:99.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='margin-right:4.5pt;text-align:center'><b>Weighted Average
  Remaining Contractual</b></p>
  <p class=MsoNormal align=center style='margin-right:4.5pt;text-align:center'><b><u>Life (Yrs.)</u></b></p>
  </td>
  <td width=97 valign=bottom style='width:72.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='margin-right:4.5pt;text-align:center'><b>Aggregate Intrinsic
  <u>Value</u></b></p>
  </td>
 </tr>
 <tr>
  <td width=193 valign=top style='width:144.4pt;background:silver;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.5pt'>Outstanding-beg of year</p>
  </td>
  <td width=91 valign=top style='width:68.0pt;background:silver;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:4.5pt;text-align:right'>&nbsp;379,231</p>
  </td>
  <td width=126 valign=top style='width:94.5pt;background:silver;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:.3in'>$3.55</p>
  </td>
  <td width=132 valign=top style='width:99.0pt;background:silver;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=97 valign=top style='width:72.9pt;background:silver;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=193 valign=top style='width:144.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.5pt'>Granted</p>
  </td>
  <td width=91 valign=top style='width:68.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:4.5pt;text-align:right'>&nbsp;42,606</p>
  </td>
  <td width=126 valign=top style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:.3in'>$1.15</p>
  </td>
  <td width=132 valign=top style='width:99.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=97 valign=top style='width:72.9pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=193 valign=top style='width:144.4pt;background:silver;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.5pt'>Exercised</p>
  </td>
  <td width=91 valign=top style='width:68.0pt;background:silver;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:4.5pt;text-align:right'>-</p>
  </td>
  <td width=126 valign=top style='width:94.5pt;background:silver;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=132 valign=top style='width:99.0pt;background:silver;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=97 valign=top style='width:72.9pt;background:silver;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=193 valign=top style='width:144.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.5pt'>Forfeited </p>
  </td>
  <td width=91 valign=top style='width:68.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:4.5pt;text-align:right'>&nbsp;-</p>
  </td>
  <td width=126 valign=top style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=132 valign=top style='width:99.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=97 valign=top style='width:72.9pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=193 valign=top style='width:144.4pt;background:silver;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.5pt'>Expired</p>
  </td>
  <td width=91 valign=top style='width:68.0pt;background:silver;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:4.5pt;text-align:right'>&nbsp;<u> (24,431)</u></p>
  </td>
  <td width=126 valign=top style='width:94.5pt;background:silver;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:.3in'><a name="OLE_LINK4"><u>$3.</u></a><u>12</u></p>
  </td>
  <td width=132 valign=top style='width:99.0pt;background:silver;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=97 valign=top style='width:72.9pt;background:silver;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=193 valign=top style='width:144.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.5pt'>Outstanding Mar 31, 2010</p>
  </td>
  <td width=91 valign=top style='width:68.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:4.5pt;text-align:right'><u>397,406</u></p>
  </td>
  <td width=126 valign=top style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:.3in'><u>$3.32</u></p>
  </td>
  <td width=132 valign=top style='width:99.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='margin-right:4.5pt;text-align:center'><u>5.9</u></p>
  </td>
  <td width=97 valign=top style='width:72.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='margin-right:4.5pt;text-align:center'><u>$0</u></p>
  </td>
 </tr>
 <tr>
  <td width=193 valign=top style='width:144.4pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=91 valign=top style='width:68.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=126 valign=top style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=132 valign=top style='width:99.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=97 valign=top style='width:72.9pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=193 valign=top style='width:144.4pt;background:silver;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:4.5pt'>Exercisable Mar 31, 2010</p>
  </td>
  <td width=91 valign=top style='width:68.0pt;background:silver;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:4.5pt;text-align:right'><u>274,510</u></p>
  </td>
  <td width=126 valign=top style='width:94.5pt;background:silver;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:.3in'><u>$3.77</u></p>
  </td>
  <td width=132 valign=top style='width:99.0pt;background:silver;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='margin-right:4.5pt;text-align:center'><u>4.7</u></p>
  </td>
  <td width=97 valign=top style='width:72.9pt;background:silver;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='margin-right:4.5pt;text-align:center'><u>$0</u></p>
  </td>
 </tr>
</table>

</div>

<p class=MsoBodyText2 style='margin-top:12.0pt;margin-right:4.3pt;margin-bottom:
6.0pt;margin-left:0in;text-align:justify'>As
of March 31, 2010, the total remaining unrecognized compensation cost related
to unvested stock-based arrangements was $95,000 and is expected to be
recognized over a period of 2.58 years.</p>

<p class=MsoBodyText2 style='margin-top:0in;margin-right:4.3pt;margin-bottom:
6.0pt;margin-left:0in;text-align:justify'>There
were no stock options exercised during the six months ended March 31, 2010.</p>

<p class=MsoNormal style='margin-top:0in;margin-right:4.3pt;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><strong>Note 6. Comprehensive Income (Loss)</strong></p>

<p class=MsoNormal style='margin-top:0in;margin-right:4.3pt;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>Comprehensive income includes net income or loss, changes
in certain assets and liabilities that are reported directly in equity such as
adjustments resulting from unrealized gains or losses on held-to-maturity
investments and certain hedging transactions.</p>

<p class=MsoNormal style='margin-top:0in;margin-right:4.5pt;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>In May 2007, the Company entered into an interest rate
swap agreement, designated as a cash flow hedge, which hedges the Company's
exposure to interest rate fluctuations on the Company's floating rate
$1,100,000 term loan. The contract requires monthly settlements of the
difference between the amounts to be received and paid under the agreement, the
amount of which is recognized in current earnings as interest expense.</p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>As of December 31,
2008 and continuing through March 31, 2010 we are in default of certain
technical covenants on the underlying term loan (see note 3 above) and we have therefore
recognized an unrealized gain of $10,000 for the six months ended March 31,
2010 in the accompanying Condensed Consolidated Statement of Operations. As
long as the underlying loan is in covenant default we will adjust the
unrealized gain or loss through the statement of operations as non-cash income
or expense.</p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'><b>Note
7. Contingent Liabilities</b></p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>We remain
contingently liable on various land leases underlying restaurants that were
previously sold to franchisees.&nbsp; We have never experienced any losses related
to these contingent lease liabilities, however if a franchisee defaults on the
payments under the leases, we would be liable for the lease payments as the
assignor or sublessor of the lease.&nbsp; Currently we have not been notified nor
are we aware of any leases in default by the franchisees, however there can be
no assurance that there will not be in the future which could have a material
effect on our future operating results.</p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'><b>Note
8. Related Party Transactions</b></p>

<p class=MsoFooter align=center style='text-align:center'>The Company entered
into a loan agreement with Golden Bridge, LLC (&quot;Golden Bridge&quot;), pursuant to
which Golden Bridge made a loan of $185,000 to the Company.&nbsp; Eric Reinhard, Ron
Goodson, David Grissen, Richard Stark, and Alan Teran, who are all members of
the Company's Board of Directors and stockholders of the Company, are the sole
members of Golden Bridge.&nbsp; Eric Reinhard is the sole manager of Golden Bridge.&nbsp; The Company's and GTDT's obtaining of the Loan
from Golden Bridge and related transactions were duly approved in advance by
the Company's Board of Directors by the affirmative vote of members thereof who
did not have an interest in the transaction.&nbsp;&nbsp; See Item 2, <i>Financing
Transactions</i> below for the terms of the loan.&nbsp; Amounts due to related
parties that are included in notes payable are $185,000 and $0 at March 31,
2010 and 2009, respectively. 10</p>

<div class=MsoNormal align=center style='text-align:center'>

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<p class=MsoNormal style='margin-bottom:6.0pt'><b>Note 9. Assets Held for Sale</b></p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>We have classified
$1,595,000 as assets held for sale in the accompanying condensed consolidated
balance sheet. These costs are related to a site in Firestone, Colorado which
has been fully developed. The proceeds of a sale leaseback transaction, if
consummated, are required to be used for the reduction of the line of credit
payable to PFGI II, LLC. The effect on our operating cash flow is not material
as the interest expense on the line of credit is approximately equal to the
proposed rental rate on a sale leaseback transaction.</p>

<p class=MsoNormal style='margin-bottom:6.0pt'><b>Note 10. Impairment of Long-Lived Assets</b></p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>We review our
long-lived assets for impairment in accordance with the guidance of FASB ASC
360-10, Property, Plant, and Equipment, including land, property and equipment
whenever events or changes in circumstances indicate that the carrying amount
of an asset may not be recoverable. Recoverability of assets to be held and
used is measured by a comparison of the capitalized costs of the assets to the
future undiscounted net cash flows expected to be generated by the assets and
the expected cash flows are based on recent historical cash flows at the
restaurant level (the lowest level that cash flows can be determined).</p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>An analysis was
performed on a restaurant by restaurant basis at March 31, 2010. Assumptions used in
preparing expected cash flows were as follows: </p>

<p class=Style84 style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:1.0in;text-align:justify;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Sales projections are as follows: Fiscal 2010 sales are projected to be
down 3-5% with respect to fiscal 2009, for fiscal years 2011 to 2024 we have
used annual increases of 2% to 3%. We believe the 2% to 3% increase in the
years beyond 2010 is a reasonable expectation of growth and that it would be
unreasonable to expect less growth in our sales. These increases include menu
price increases in addition to any real growth. Historically our weighted menu
prices have increased 1.5% to 6% per year.</p>

<p class=Style84 style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:1.0in;text-align:justify;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our variable and semi-variable restaurant operating costs are projected
to increase proportionately with the sales increases as well as increasing an
additional 1.5% per year consistent with inflation.</p>

<p class=Style84 style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:1.0in;text-align:justify;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our other fixed restaurant operating costs are projected to increase 1.5%
to 2% per year.</p>

<p class=Style84 style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:1.0in;text-align:justify;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Food and packaging costs are projected to remain flat in relation to our
current fiscal 2010 food and packaging costs as a percentage of sales.</p>

<p class=Style84 style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:1.0in;text-align:justify;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Salvage value has been estimated on a restaurant by restaurant basis
considering each restaurant's particular equipment package and building size.</p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>Given the results of
our impairment analysis at March 31, 2010 we did not record any impairment as their
projected undiscounted cash flows show recoverability of their asset values.</p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>Our impairment
analysis included a sensitivity analysis with regard to the cash flow
projections that determine the recoverability of each restaurant's assets. The
results indicate that even with a 15% decline in our projected cash flows we
would still not have any potential impairment issues.&nbsp; We have experienced
higher than normal food and packaging costs as a percentage of restaurant sales
in recent years and we do not believe these costs will remain at these levels
in future years. However for purposes of our cash flow projections in the asset
impairment analysis we have assumed our food and packaging costs will remain at
these higher levels.</p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>Each time we conduct
an impairment analysis in the future we will compare actual results to our
projections and assumptions, and to the extent our actual results do not meet
expectations, we will revise our assumptions and this could result in
impairment charges being recognized.</p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>All of the judgments
and assumptions made in preparing the cash flow projections are consistent with
our other financial statement calculations and disclosures. The assumptions
used in the cash flow projections are consistent with other forward-looking
information prepared by the Company, such as those used for internal budgets,
discussions with third parties, and/or reporting to management or the Board of
Directors.</p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>To date we have not
written down any assets due to impairment, however projecting the cash flows
for the impairment analysis involves significant estimates with regard to the
performance of each restaurant, and it is reasonably possible that the
estimates of cash flows may change in the near term resulting in the need to
write down operating assets to fair value. If the assets are determined to be
impaired, the amount of impairment recognized is the amount by which the
carrying amount of the assets exceeds their fair value. Fair value would be
determined using forecasted cash flows discounted using an estimated average
cost of capital and the impairment charge would be recognized in income from
operations.</p>

<p class=MsoFooter align=center style='text-align:center'>11</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade style='color:navy' align=center>

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<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'><b>Note 11. Fair Value
Measurements</b></p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>The Company adopted
the provisions of FASB ASC 820, Fair Value Measurements and Disclosures,
effective October 1, 2008. FASB ASC 820 defines fair value, establishes a
framework for measuring fair value under generally accepted accounting
principles and enhances disclosures about fair value measurements.</p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>Fair value is defined
as the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the
measurement date. Valuation techniques used to measure fair value, as required
by Topic 820 of the FASB ASC, must maximize the use of observable inputs and
minimize the use of unobservable inputs.</p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>FASB ASC 820 defines
three levels of inputs that may be used to measure fair value and requires that
the assets or liabilities carried at fair value be disclosed by the input level
under which they were valued. The input levels defined under FASB ASC 820 are
as follows:</p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>Level 1: Quoted
market prices in active markets for identical assets and liabilities.</p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>Level 2: Observable
inputs other than defined in Level 1, such as quoted prices for similar assets
or liabilities; quoted prices in markets that are not active; or other inputs
that are observable or can be corroborated by observable market data for
substantially the full term of the assets or liabilities.</p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>Level 3: Unobservable
inputs that are not corroborated by observable market data.</p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>The following table
summarizes financial assets and liabilities that are measured at fair value on
a recurring basis as of March
31, 2010:</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:67.5pt;text-align:justify'>Level 2</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:67.5pt;text-align:justify'>Interest Rate Swap liability&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;  $77,000</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b>Note 12. Income Taxes</b></p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify;text-autospace:
none'>We
account for income taxes in accordance with FASB ASC 740, Income Taxes. FASB
ASC 740 prescribes the use of the liability method whereby deferred tax asset
and liability account balances are determined based on differences between the
financial reporting and tax bases of assets and liabilities and are measured
using the enacted tax rates and laws that will be in effect when the
differences are expected to reverse. The Company provides a valuation
allowance, if necessary, to reduce deferred tax assets to their estimated
realizable value. The deferred tax assets are reviewed periodically for
recoverability, and valuation allowances are adjusted as necessary.&nbsp; We believe
it is more likely than not that the recorded deferred tax assets will be
realized.</p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>Although the Company
has not incurred interest and penalties associated with unrecognized tax
benefits; future interest and penalties associated with unrecognized tax
benefits, if any, will be recognized in income tax expense in the Consolidated
Statements of Operations and the corresponding liability in&nbsp;income taxes payable
or income taxes receivable, net on the Consolidated Balance Sheets.</p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>The Company is
currently not undergoing any examinations by any taxing jurisdictions, with the
tax years for the Fiscal Years Ending September 30, 2005 through 2009 remaining
open to examination.</p>

<p class=MsoNormal style='margin-bottom:6.0pt'><b>Note 13. Non-controlling Interests</b></p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>The Company adopted
the provisions of FASB <a name="jump_exp_1"></a>ASC <a name="jump_exp_2"></a>810,
Consolidation, effective October&nbsp;1, 2009. FASB ASC 810 requires non-controlling
interests, previously called minority interests, to be presented as a separate
item in the equity section of the consolidated balance sheet. It also requires
the amount of consolidated net income or loss attributable to non-controlling
interests to be clearly presented on the face of the consolidated income
statement. Additionally, Topic 810 clarifies that changes in a parent's
ownership interest in a subsidiary that do not result in deconsolidation are
equity transactions, and that deconsolidation of a subsidiary requires gain or
loss recognition in net income based on the fair value on the deconsolidation
date. Topic 810 was applied prospectively with the exception of presentation
and disclosure requirements, which were applied retrospectively for all periods
presented, and did not significantly change the presentation of our consolidated
financial statements.</p>

<p class=MsoFooter align=center style='text-align:center'>12</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade style='color:navy' align=center>

</div>





<br clear=all style='page-break-before:always'>












<p class=MsoNormal style='margin-bottom:6.0pt'><b>Note 14. Subsequent Events</b></p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>The Company adopted
the provisions of FASB ASC 855, Subsequent Events, effective October&nbsp;1,
2009.&nbsp;&nbsp;FASB ASC 855 establishes the accounting for, and disclosure
of, material events that occur after the balance sheet date but before the
financial statements are issued.&nbsp;&nbsp;In general, these events will be
recognized if the condition existed at the date of the balance sheet, but will
not be recognized if the condition did not exist at the balance sheet
date.&nbsp;&nbsp;Disclosure is required for non-recognized events if required
to keep the financial statements from being misleading. Subsequent events have
been evaluated through the date our interim financial statements were issued
with the filing of this Quarterly Report on Form 10-Q.</p>

<p class=MsoNormal style='margin-bottom:6.0pt'><b>Note 15. Recent Accounting Pronouncements</b></p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>In June 2009, the
FASB issued FASB ASC 105, Generally Accepted Accounting Principles, which
establishes the FASB Accounting Standards Codification as the sole source of
authoritative generally accepted accounting principles. Pursuant to the
provisions of FASB ASC 105, the Company has updated references to GAAP in its
financial statements issued for the period ended March 31, 2010. The adoption
of FASB ASC 105 did not impact the Company's financial position or results of
operations.</p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>In June 2008, the
FASB issued FASB ASC 815-40, Derivatives and Hedging, that provides guidance on
how to determine if certain instruments (or embedded features) are considered
indexed to a company's own stock, including instruments similar to warrants to
purchase the company's stock. FASB ASC 815-40 requires companies to use a
two-step approach to evaluate an instrument's contingent exercise provisions
and settlement provisions in determining whether the instrument is considered
to be indexed to its own stock and therefore exempt from the application of
FASB ASC 815. Although FASB ASC 815-40 was effective for our fiscal year
beginning October 1, 2009, any outstanding instrument at the date of adoption
will require a retrospective application of the accounting through a cumulative
effect adjustment to retained earnings upon adoption. The adoption of FASB ASC 815-40
did not impact the Company's financial position or results of operations. The
requirements of FASB ASC 815-40 will only impact future derivative or hedging
transactions into which we may enter.</p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>In December 2007, the
FASB issued FASB ASC 805, Business Combinations, which establishes principles
and requirements for how an acquiring entity in a business combination recognizes
and measures the assets acquired and liabilities assumed in the transaction;
establishes the acquisition-date fair value as the measurement objective for
all assets acquired and liabilities assumed; and sets the disclosure
requirements regarding the information needed to evaluate and understand the
nature and financial effect of the business combination.&nbsp; This accounting
pronouncement was effective for our fiscal year beginning October 1, 2009.&nbsp; The
adoption of this guidance did not have any impact on the Company's financial
position or results of operations. The requirements of FASB ASC 805 will only
impact future business combination transactions into which we may enter.</p>

<p class=MsoNormal style='margin-bottom:6.0pt'><b>Note 16. Stock Transactions</b></p>

<p class=MsoBodyText2 style='margin-bottom:12.0pt'>None.</p>

<p class=MsoBodyText2><b>ITEM 2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION</b></p>

<p class=MsoNormal style='margin-bottom:6.0pt'><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; AND RESULTS OF OPERATIONS</b></p>

<h3><u>General</u></h3>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'>This
Form 10-Q contains or incorporates by reference forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended and
the disclosure of risk factors in the Company's form 10-K for the fiscal year
ended September 30, 2009.&nbsp; Also, documents subsequently filed by us with the
SEC and incorporated herein by reference may contain forward-looking
statements.&nbsp; 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>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:.75in;text-indent:-.5in;line-height:normal'>(I)&nbsp;&nbsp;&nbsp;
We compete with
numerous well established competitors who have substantially greater financial
resources and longer operating histories than we do.&nbsp; 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 class=MsoBlockText style='margin-top:0in;margin-right:0in;margin-bottom:
6.0pt;margin-left:.75in;text-align:justify;text-indent:-.5in'>(II)&nbsp; We may be
negatively impacted if we continue to experience consistent same store sales
declines.&nbsp; Same store sales comparisons will be dependent, among other things,
on the success of our advertising and promotion of new and existing menu
items.&nbsp; No assurances can be given that such advertising and promotions will in
fact be successful.</p>

<p class=MsoFooter align=center style='text-align:center'>13</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade style='color:navy' align=center>

</div>





<br clear=all style='page-break-before:always'>












<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'>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.&nbsp; We caution the reader that such
risk factors are not exhaustive, particularly with respect to future filings.</p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:97%'><i>Restaurant
Locations</i></p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'>We
currently operate and franchise a total of fifty Good Times restaurants, of
which forty-six are in Colorado, with forty-one in the Denver greater
metropolitan area, three in Colorado Springs, one in Grand Junction and one in
Silverthorne. Seven of these restaurants are &quot;dual brand&quot;, operated pursuant to
a Dual Brand Test Agreement with Taco John's International, of which there is one
in North Dakota, two in Wyoming, and four in Colorado.</p>



<table class=MsoNormalTable border=1 cellspacing=0 cellpadding=0 width="97%"
 style='width:97.92%;margin-left:5.75pt;border-collapse:collapse;border:none'>
 <tr>
  <td width="37%" valign=top style='width:37.24%;border:solid windowtext 1.0pt;
  padding:0in 5.75pt 0in 5.75pt'>

  </td>
  <td width="6%" valign=bottom style='width:6.82%;border:solid windowtext 1.0pt;
  border-left:none;padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal align=center style='text-align:center'><b>Total</b></p>
  </td>
  <td width="14%" valign=bottom style='width:14.48%;border:solid windowtext 1.0pt;
  border-left:none;padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal align=center style='text-align:center'><b>Denver</b><b>, CO</b></p>
  <p class=MsoNormal align=center style='text-align:center'><b>Greater Metro</b></p>
  </td>
  <td width="11%" valign=bottom style='width:11.08%;border:solid windowtext 1.0pt;
  border-left:none;padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal align=center style='text-align:center'><b>Colorado</b></p>
  <p class=MsoNormal align=center style='text-align:center'><b>Other</b></p>
  </td>
  <td width="7%" valign=bottom style='width:7.66%;border:solid windowtext 1.0pt;
  border-left:none;padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal align=center style='text-align:center'><b>Idaho</b></p>
  </td>
  <td width="11%" valign=bottom style='width:11.9%;border:solid windowtext 1.0pt;
  border-left:none;padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal align=center style='text-align:center'><b>Wyoming</b></p>
  </td>
  <td width="10%" valign=bottom style='width:10.82%;border:solid windowtext 1.0pt;
  border-left:none;padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal align=center style='text-align:center'><b>North Dakota</b></p>
  </td>
 </tr>
 <tr>
  <td width="37%" valign=top style='width:37.24%;border:solid windowtext 1.0pt;
  border-top:none;padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal>Good
  Times co-owned &amp; co-developed</p>
  </td>
  <td width="6%" valign=top style='width:6.82%;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal align=center style='text-align:center'>27</p>
  </td>
  <td width="14%" valign=top style='width:14.48%;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal align=center style='text-align:center'>24</p>
  </td>
  <td width="11%" valign=top style='width:11.08%;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal align=center style='text-align:center'>3</p>
  </td>
  <td width="7%" valign=top style='width:7.66%;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.75pt 0in 5.75pt'>

  </td>
  <td width="11%" valign=top style='width:11.9%;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.75pt 0in 5.75pt'>

  </td>
  <td width="10%" valign=top style='width:10.82%;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.75pt 0in 5.75pt'>

  </td>
 </tr>
 <tr>
  <td width="37%" valign=top style='width:37.24%;border:solid windowtext 1.0pt;
  border-top:none;padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal>Good
  Times franchised</p>
  </td>
  <td width="6%" valign=top style='width:6.82%;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal align=center style='text-align:center'>16</p>
  </td>
  <td width="14%" valign=top style='width:14.48%;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal align=center style='text-align:center'>13</p>
  </td>
  <td width="11%" valign=top style='width:11.08%;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal align=center style='text-align:center'>2</p>
  </td>
  <td width="7%" valign=top style='width:7.66%;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal align=center style='text-align:center'>1</p>
  </td>
  <td width="11%" valign=top style='width:11.9%;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.75pt 0in 5.75pt'>

  </td>
  <td width="10%" valign=top style='width:10.82%;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.75pt 0in 5.75pt'>

  </td>
 </tr>
 <tr>
  <td width="37%" valign=top style='width:37.24%;border:solid windowtext 1.0pt;
  border-top:none;padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal>Dual
  brand co-owned</p>
  </td>
  <td width="6%" valign=top style='width:6.82%;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal align=center style='text-align:center'>2</p>
  </td>
  <td width="14%" valign=top style='width:14.48%;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal align=center style='text-align:center'>2</p>
  </td>
  <td width="11%" valign=top style='width:11.08%;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.75pt 0in 5.75pt'>

  </td>
  <td width="7%" valign=top style='width:7.66%;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.75pt 0in 5.75pt'>

  </td>
  <td width="11%" valign=top style='width:11.9%;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.75pt 0in 5.75pt'>

  </td>
  <td width="10%" valign=top style='width:10.82%;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.75pt 0in 5.75pt'>

  </td>
 </tr>
 <tr>
  <td width="37%" valign=top style='width:37.24%;border:solid windowtext 1.0pt;
  border-top:none;padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal>Dual
  brand franchised</p>
  </td>
  <td width="6%" valign=top style='width:6.82%;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.5pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal align=center style='text-align:center'>5</p>
  </td>
  <td width="14%" valign=top style='width:14.48%;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.5pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal align=center style='text-align:center'>2</p>
  </td>
  <td width="11%" valign=top style='width:11.08%;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.5pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.75pt 0in 5.75pt'>

  </td>
  <td width="7%" valign=top style='width:7.66%;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.5pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.75pt 0in 5.75pt'>

  </td>
  <td width="11%" valign=top style='width:11.9%;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.5pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal align=center style='text-align:center'>2</p>
  </td>
  <td width="10%" valign=top style='width:10.82%;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.5pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal align=center style='text-align:center'>1</p>
  </td>
 </tr>
 <tr>
  <td width="37%" valign=top style='width:37.24%;border:solid windowtext 1.0pt;
  border-top:none;padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal align=right style='text-align:right'><b>Total</b></p>
  </td>
  <td width="6%" valign=top style='width:6.82%;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal align=center style='text-align:center'><b>50</b></p>
  </td>
  <td width="14%" valign=top style='width:14.48%;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal align=center style='text-align:center'><b>41</b></p>
  </td>
  <td width="11%" valign=top style='width:11.08%;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal align=center style='text-align:center'><b>5</b></p>
  </td>
  <td width="7%" valign=top style='width:7.66%;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal align=center style='text-align:center'><b>1</b></p>
  </td>
  <td width="11%" valign=top style='width:11.9%;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal align=center style='text-align:center'><b>2</b></p>
  </td>
  <td width="10%" valign=top style='width:10.82%;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal align=center style='text-align:center'><b>1</b></p>
  </td>
 </tr>
</table>





<table class=MsoNormalTable border=1 cellspacing=0 cellpadding=0
 style='margin-left:22.5pt;border-collapse:collapse;border:none'>
 <tr>
  <td width=220 valign=top style='width:165.3pt;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'><br clear=all style='page-break-before:always'>


  </td>
  <td width=213 colspan=2 valign=top style='width:159.6pt;border:none;
  border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'><b>As of March 31</b></p>
  </td>
 </tr>
 <tr>
  <td width=220 valign=top style='width:165.3pt;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=106 valign=top style='width:79.8pt;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'><b>2009</b></p>
  </td>
  <td width=106 valign=top style='width:79.8pt;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'><b>2010</b></p>
  </td>
 </tr>
 <tr>
  <td width=220 valign=top style='width:165.3pt;border:solid windowtext 1.0pt;
  border-top:none;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>Company-owned restaurants</p>
  </td>
  <td width=106 valign=top style='width:79.8pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>21</p>
  </td>
  <td width=106 valign=top style='width:79.8pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>20</p>
  </td>
 </tr>
 <tr>
  <td width=220 valign=top style='width:165.3pt;border:solid windowtext 1.0pt;
  border-top:none;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>Co-developed restaurants</p>
  </td>
  <td width=106 valign=top style='width:79.8pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>9</p>
  </td>
  <td width=106 valign=top style='width:79.8pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>9</p>
  </td>
 </tr>
 <tr>
  <td width=220 valign=top style='width:165.3pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:solid windowtext 1.5pt;border-right:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>Franchise operated restaurants</p>
  </td>
  <td width=106 valign=top style='width:79.8pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.5pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>22</p>
  </td>
  <td width=106 valign=top style='width:79.8pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.5pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>21</p>
  </td>
 </tr>
 <tr>
  <td width=220 valign=top style='width:165.3pt;border:solid windowtext 1.0pt;
  border-top:none;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'><b>Total restaurants</b></p>
  </td>
  <td width=106 valign=top style='width:79.8pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'><b>52</b></p>
  </td>
  <td width=106 valign=top style='width:79.8pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'><b>50</b></p>
  </td>
 </tr>
</table>

<p class=MsoNormal style='margin-top:12.0pt;margin-right:0in;margin-bottom:
6.0pt;margin-left:0in;text-align:justify'><i>Fiscal 2009:</i> In October 2008 we
opened one new company-owned restaurant in Firestone, Colorado. In December
2008 a Wyoming franchisee terminated their Good Times franchise agreement in
the dual brand concept and has stopped selling Good Times products in one
location.&nbsp; Also in December 2008 a franchisee opened a new dual brand
restaurant in Sheridan, Wyoming.</p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'><i>Fiscal 2010:</i> In October 2009 a
franchisee operating a Good Times restaurant in Thornton, Colorado terminated
their franchise agreement and closed the restaurant.&nbsp; In March 2010 we closed
one company-owned dual branded restaurant in Commerce City, Colorado (see Note
4. above - Discontinued Operations). We anticipate that we may close up to three
low volume franchised restaurants in fiscal 2010. </p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'>The
following presents certain historical financial information of our operations.&nbsp;
This financial information includes results for the three and six months ended March
31, 2010 and results for the three and six months ended March 31, 2009.</p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'><b><u>Results
of Operations</u></b></p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'><i>Net
Revenues</i></p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'>Net
revenues for the three months ended March 31, 2010 decreased $500,000 (9.3%) to
$4,883,000 from $5,383,000 for the three months ended March 31, 2009.&nbsp; Same
store restaurant sales decreased $435,000 (9.4%) during the three months ended March
31, 2010 for the restaurants that were open for the full periods ending March
31, 2010 and March 31, 2009.&nbsp; Restaurants are included in same store sales
after they have been open a full fifteen months and only Good Times restaurants
are included with dual branded restaurants excluded.&nbsp; Restaurant sales decreased
$11,000 due to two company-owned dual branded restaurants not included in same
store sales. Restaurant sales decreased $30,000 due to one non-traditional
company-owned restaurant not included in same store sales.</p>

<p class=MsoFooter align=center style='text-align:center'>14</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade style='color:navy' align=center>

</div>



<br clear=all style='page-break-before:always'>










<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'>Net
revenues for the six months ended March 31, 2010 decreased $1,136,000 (10.5%)
to $9,723,000 from $10,859,000 for the six months ended March 31, 2009.&nbsp; Same
store restaurant sales decreased $950,000 (10.4%) during the six months ended March
31, 2010 for the restaurants that were open for the full periods ending March
31, 2010 and March 31, 2009.&nbsp; Restaurants are included in same store sales
after they have been open a full fifteen months and only Good Times restaurants
are included with dual branded restaurants excluded.&nbsp; Restaurant sales
decreased $63,000 due to three company-owned restaurants not included in same
store sales. Two are dual branded restaurants and one opened in October 2008.&nbsp;
Restaurant sales decreased $73,000 due to one non-traditional company-owned
restaurant not included in same store sales.</p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'>Our
first and second quarter same store restaurant sales declines of 11.4% and
9.4%, respectively, reflect the adverse impact the macroeconomic environment is
having on consumers' discretionary spending and the proliferation of heavy
promotion of $1 value menus and discounting by competitors.&nbsp; In addition adverse
weather conditions in October and December 2009, and February 2010 had a negative
effect on our restaurant sales. October 2009 in Colorado was the second coldest
and fifth snowiest October on record and a late month snow storm caused the
closure of our restaurants for most of one day.</p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'>Our
outlook for fiscal 2010 remains cautious as the economic pressures may continue
to impact consumer spending and we anticipate that we will continue to face
increased competitive pricing pressure.</p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'>While
we are implementing several broad product and brand initiatives during fiscal
2010 to improve our core value proposition, we are not planning to implement a
broader $1 menu and our sales may be adversely affected during the economic
recession.</p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'>Franchise
revenues decreased $24,000 to $111,000 from $135,000 for the three months ended
March 31, 2009 due to a decrease in franchise royalties. Same store Good Times
franchise restaurant sales decreased 14% during the three months ended March
31, 2010 for the franchise restaurants that were open for the full periods
ending March 31, 2010 and March 31, 2009. Dual branded franchise restaurant
sales decreased 23.7% during the three months ended March 31, 2010, compared to
the same prior year period, primarily due to higher opening sales in one new restaurant
that opened in December 2008.</p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'>Franchise
revenues decreased $50,000 to $224,000 from $274,000 for the six months ended March
31, 2010 due to decreases in both franchise royalties and franchise fee income.
Same store Good Times franchise restaurant sales decreased 12.2% during the six
months ended March 31, 2010 for the franchise restaurants that were open for
the full periods ending March 31, 2010 and March 31, 2009. Dual branded franchise
restaurant sales decreased 20.9% during the six months ended March 31, 2010,
compared to the same prior year period.</p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'><i>Restaurant
Operating Costs</i></p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'>Restaurant
operating costs as a percent of restaurant sales were 103.4% during the three
months ended March 31, 2010 compared to 96.7% in the same prior year period and
were 101.8% during six month period ended March 31, 2010 compared to 97.5% in
the same prior year period.</p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'>The
changes in restaurant-level costs are explained as follows:</p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=685
 style='border-collapse:collapse'>
 <tr>
  <td width=415 valign=top style='width:311.4pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=144 valign=top style='width:1.5in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText align=center style='margin-right:.05in;text-align:center;
  line-height:normal'>Three
  Months Ended</p>
  <p class=MsoBodyText align=center style='margin-right:.05in;text-align:center;
  line-height:normal'><u>March
  31, 2010</u></p>
  </td>
  <td width=126 valign=top style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText align=center style='margin-right:.05in;text-align:center;
  line-height:normal'>Six Months
  Ended</p>
  <p class=MsoBodyText align=center style='margin-right:.05in;text-align:center;
  line-height:normal'><u>March
  31, 2010</u></p>
  </td>
 </tr>
 <tr>
  <td width=415 valign=top style='width:311.4pt;padding:0in 5.4pt 0in 5.4pt'><br clear=all style='page-break-before:always'>
  <br clear=all style='page-break-before:always'>

  <p class=MsoBodyText align=left style='margin-right:0in;text-align:left;
  line-height:normal'>Restaurant-level
  costs for the period ended March 31, 2009</p>
  </td>
  <td width=144 valign=top style='width:1.5in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText align=left style='margin-right:.05in;text-align:left;
  line-height:normal'>96.7%</p>
  </td>
  <td width=126 valign=top style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText align=left style='margin-right:.05in;text-align:left;
  line-height:normal'>97.5%</p>
  </td>
 </tr>
 <tr>
  <td width=415 valign=top style='width:311.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText align=left style='margin-right:0in;text-align:left;
  line-height:normal'>Increase
  in food and packaging costs</p>
  </td>
  <td width=144 valign=top style='width:1.5in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText align=left style='margin-right:.3in;text-align:left;
  line-height:normal'>2.0%</p>
  </td>
  <td width=126 valign=top style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText align=left style='margin-right:.05in;text-align:left;
  line-height:normal'>.7%</p>
  </td>
 </tr>
 <tr>
  <td width=415 valign=top style='width:311.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText align=left style='margin-right:0in;text-align:left;
  line-height:normal'>Increase
  in payroll and other employee benefit costs</p>
  </td>
  <td width=144 valign=top style='width:1.5in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText align=left style='margin-right:.05in;text-align:left;
  line-height:normal'>2.4%</p>
  </td>
  <td width=126 valign=top style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText align=left style='margin-right:.05in;text-align:left;
  line-height:normal'>1.4%</p>
  </td>
 </tr>
 <tr>
  <td width=415 valign=top style='width:311.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText align=left style='margin-right:0in;text-align:left;
  line-height:normal'>Increase
  in occupancy and other operating costs</p>
  </td>
  <td width=144 valign=top style='width:1.5in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText align=left style='margin-right:.05in;text-align:left;
  line-height:normal'>2.9%</p>
  </td>
  <td width=126 valign=top style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText align=left style='margin-right:.05in;text-align:left;
  line-height:normal'>2.9%</p>
  </td>
 </tr>
 <tr>
  <td width=415 valign=top style='width:311.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText align=left style='margin-right:0in;text-align:left;
  line-height:normal'>Increase (decrease)
  in depreciation and amortization</p>
  </td>
  <td width=144 valign=top style='width:1.5in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText align=left style='margin-right:.05in;text-align:left;
  line-height:normal'>(.6%)</p>
  </td>
  <td width=126 valign=top style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText align=left style='margin-right:.05in;text-align:left;
  line-height:normal'>(.6%)</p>
  </td>
 </tr>
 <tr>
  <td width=415 valign=top style='width:311.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText align=left style='margin-right:0in;text-align:left;
  line-height:normal'>Decrease
  in opening costs and deferred rent</p>
  </td>
  <td width=144 valign=top style='width:1.5in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText align=left style='margin-right:.05in;text-align:left;
  line-height:normal'>0%</p>
  </td>
  <td width=126 valign=top style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText align=left style='margin-right:.3in;text-align:left;
  line-height:normal'>(.1%)</p>
  </td>
 </tr>
 <tr>
  <td width=415 valign=top style='width:311.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText align=left style='margin-top:0in;margin-right:0in;
  margin-bottom:12.0pt;margin-left:0in;text-align:left;line-height:normal'>Restaurant-level costs for the
  period ended March 31, 2010</p>
  </td>
  <td width=144 valign=top style='width:1.5in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText align=left style='margin-top:0in;margin-right:.05in;
  margin-bottom:12.0pt;margin-left:0in;text-align:left;line-height:normal'>103.4%</p>
  </td>
  <td width=126 valign=top style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText align=left style='margin-top:0in;margin-right:.05in;
  margin-bottom:12.0pt;margin-left:0in;text-align:left;line-height:normal'>101.8%</p>
  </td>
 </tr>
</table>

<p class=MsoBodyText align=left style='margin-top:0in;margin-right:0in;
margin-bottom:6.0pt;margin-left:0in;text-align:left;line-height:normal'><i>Food and Packaging Costs</i></p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>For the three months
ended March 31, 2010 our food and paper costs, decreased $63,000 to $1,682,000
(35.2% of restaurant sales) from $1,745,000 (33.3% of restaurant sales)
compared to the same prior year period.</p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>For the six months
ended March 31, 2010 our food and paper costs, decreased $290,000 to $3,248,000
(34.2% of restaurant sales) from $3,538,000 (33.4% of restaurant sales)
compared to the same prior year period.</p>



<p class=MsoFooter align=center style='text-align:center'>15</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade style='color:navy' align=center>

</div>



<br clear=all style='page-break-before:always'>










<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>During fiscal 2009 we
experienced a moderation in our food and packaging costs when our weighted food
and packaging costs increased approximately 2%. We took cumulative weighted
menu price increases during fiscal 2009 of approximately 2.6%.</p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>During the three
months ended March 31, 2010 we experienced an increase in our weighted average
food and packaging costs of 5.7%, including significant increases in beef,
bacon and soda syrup. We anticipate continued upward pressure on our commodity
costs for the balance of fiscal 2010. We are implementing an approximately 3.8%
weighted average menu price increase in May 2010, however we anticipate that
the effect of the menu price increase to our restaurant sales will be offset by
the implementation of price promotions.</p>

<p class=MsoBodyText align=left style='margin-top:0in;margin-right:0in;
margin-bottom:6.0pt;margin-left:0in;text-align:left;line-height:normal'><i>Payroll and Other Employee Benefit
Costs</i></p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'>For
the three months ended March
31, 2010 our payroll and
other employee benefit costs decreased $59,000 to $1,834,000 (38.4% of
restaurant sales) from $1,893,000 (36.1% of restaurant sales) compared to the
same prior year period.</p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'>For
the six months ended March
31, 2010 our payroll and
other employee benefit costs decreased $268,000 to $3,613,000 (38% of
restaurant sales) from $3,881,000 (36.7% of restaurant sales) compared to the
same prior year period.</p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'>The
increase in payroll and other employee benefit expenses as a percent of
restaurant sales for the three and six month periods ended March 31, 2010 is primarily the result of lower
restaurant sales. Because
payroll costs are semi-variable in nature they increase as a percentage of
restaurant sales when there is a decrease in restaurant sales.&nbsp; </p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'>Beginning
in December 2008 we reduced our labor hours allocation through increased
efficiencies and improved our sales per employee hour efficiencies on service
hours, thereby eliminating approximately $190,000 of annual payroll costs. In
addition, beginning in March 2009 we implemented further reductions in our
employee and other benefit costs totaling approximately $300,000 in annual
costs through the restructuring of regional supervision personnel along with
other reductions in fixed employee benefit costs.</p>

<p class=MsoBodyText align=left style='margin-top:0in;margin-right:0in;
margin-bottom:6.0pt;margin-left:0in;text-align:left;line-height:normal'><i>Occupancy and Other Operating Costs</i></p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'>For
the three months ended March 31, 2010 our occupancy and other operating costs increased
$35,000 to $1,168,000 (24.5% of restaurant sales) from $1,133,000 (21.6% of restaurant
sales) compared to the same prior year period.</p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'>For
the six months ended March 31, 2010 our occupancy and other operating costs increased
$41,000 to $2,322,000 (24.4% of restaurant sales) from $2,281,000 (21.5% of
restaurant sales) compared to the same prior year period.</p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'>For
the three and six month periods ended March 31, 2010 we experienced increases
in rent, utility costs, repairs and maintenance costs, and property taxes
compared to the same prior year period, however these increases were partially offset
by decreases in all other operating costs. Occupancy and other operating costs may
increase as a percent of sales as new company-owned restaurants are developed
due to higher rent associated with sale-leaseback operating leases, as well as
higher property taxes at those locations.</p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'><i>Opening
Costs</i></p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'>For
the three months ended March 31, 2010 and March 31, 2009 our new store opening
costs <a name="OLE_LINK9">were $0.</a> For the six months ended March 31, 2010
our new store opening costs were $0 compared to $15,000 in the same prior year
period. The prior year costs are related to a new company-owned restaurant that
opened in October 2008.</p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'><i>Depreciation
and Amortization</i></p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'>For
the three months ended March
31, 2010, our
depreciation and amortization decreased $55,000 to $249,000 (5.2% of restaurant
sales) from $304,000 (5.8% of restaurant sales) compared to the same prior year
period.</p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'>For
the six months ended March
31, 2010, our
depreciation and amortization decreased $114,000 to $490,000 (5.2% of
restaurant sales) from $604,000 (5.7% of restaurant sales) compared to the same
prior year period.</p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'>The
decrease in depreciation and amortization for the three and six month periods
ended March 31, 2010 is due to declining depreciation
expense in our aging company-owned and co-developed restaurants.</p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'><i>&nbsp;</i></p>

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<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'><i>General
and Administrative Costs</i></p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'>For
the three months ended March
31, 2010, general and
administrative costs decreased $37,000 to $365,000 (7.5% of total revenues)
from $402,000 (7.5% of total revenues) for the same prior year period.</p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'>The
decrease in general and administrative costs for the three months ended March 31, 2010 compared to the same prior year
period is primarily attributable to decreases in: 1) payroll and employee
benefit costs of $30,000 and 2) professional services of $14,000.</p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'>For
the six months ended March
31, 2010, general and
administrative costs decreased $156,000 to $735,000 (7.6% of total revenues)
from $891,000 (8.2% of total revenues) for the same prior year period. </p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'>The
decrease in general and administrative costs for the six months ended March 31, 2010 compared to the same prior year
period is primarily attributable to decreases in: 1) payroll and employee
benefit costs of $87,000, 2) training and recruiting expenses of $18,000 and 3)
professional services of $51,000. </p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'><i>Advertising Costs</i></p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'>For
the three months ended March
31, 2010 advertising
costs decreased $16,000 to $286,000 (6% of restaurant sales) from $302,000 (5.8%
of restaurant sales) for the same prior year period.</p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'>For
the six months ended March
31, 2010 advertising costs
decreased $51,000 to $561,000 (5.9% of restaurant sales) from $612,000 (5.8% of
restaurant sales) for the same prior year period.</p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'>The
decrease in advertising costs for the three and six month periods is primarily
due to the decrease in restaurant sales, as contributions are made to the advertising materials fund
and regional advertising cooperative based on a percentage of sales. In
addition, for the six month period ended March 31, 2010 $9,000 of payroll and
employee benefit costs have been eliminated in the current period due to the
retirement of our Vice President of Marketing in November 2008. We currently
have no plans to fill the position in the immediate future.</p>

<p class=MsoBodyText align=left style='margin-top:0in;margin-right:0in;
margin-bottom:6.0pt;margin-left:0in;text-align:left;line-height:normal'><i>Franchise Costs</i></p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:-.7pt;text-align:justify'>For the three months ended March 31, 2010, franchise
costs increased $2,000 to $35,000 (.7% of total revenues) from $33,000 (.6% of
total revenues) for the same prior year period.</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:-.7pt;text-align:justify'>For the six months ended March 31, 2010, franchise costs decreased
$8,000 to $65,000 (.7% of total revenues) from $73,000 (.7% of total revenues)
for the same prior year period. The decrease in franchise costs for the six
month period is primarily attributable to a reduction in franchise opening
support costs compared to the same prior year period.</p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'><i>Loss
from Operations</i></p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'>We
had a loss from operations of ($728,000) in the three months ended March 31, 2010
compared to a loss from operations of ($422,000) for the same prior year
period.</p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'>We
had a loss from operations of ($1,297,000) in the six months ended March 31, 2010
compared to a loss from operations of ($1,021,000) for the same prior year
period.</p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'>The
increase in loss from operations for the three and six month periods is due
primarily to the decrease in net revenues offset by other matters discussed in
the &quot;Restaurant Operating Costs&quot;, &quot;General and Administrative
Costs&quot; and &quot;Franchise Costs&quot; sections of Item 2.</p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'><i>Loss
from Continuing Operations</i></p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'>The
net loss from continuing operations was ($889,000) for the three months ended March
31, 2010 compared to a net loss from continuing operations of ($483,000) for
the same prior year period. The change from the three month period ended March
31, 2009 to March 31, 2010 was attributable to the increase in loss from
operations for the three months ended March 31, 2010, as well as: 1) an increase
in net interest expense of $97,000 compared to the same prior year period; and 2)
a decrease in the unrealized gain related to our interest rate swap liability
of $3,000 compared to the same prior year period.&nbsp; Net interest expense for the
three months ended March 31, 2010 includes non-cash amortization of debt
issuance costs of $81,000 related to: 1) the extension of the PFGI II loan in
January, 2010; and 2) the loan agreement with W Capital, John T. MacDonald entered into in February 2010. (See
&quot;Note 2. Recent Developments&quot; of Item 1 above).</p>

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<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'>The
net loss from continuing operations was ($1,527,000) for the six months ended March
31, 2010 compared to a net loss from continuing operations of ($1,242,000) for
the same prior year period. The change from the six month period ended March
31, 2009 to March 31, 2010 was attributable to the increase in loss from
operations for the six months ended March 31, 2010, as well as: 1) an increase
in net interest expense of $135,000 compared to the same prior year period; and
2) an increase in the unrealized gain related to our interest rate swap
liability of $126,000 compared to the same prior year period. Net interest
expense for the six months ended March 31, 2010 includes non-cash amortization
of debt issuance costs of $90,000 related to: 1) the extension of the PFGI II
loan in January, 2010; 2) the loan agreement with W Capital, John T. MacDonald entered into in February 2010; and 3)
the loan agreement with Golden Bridge LLC entered into in April, 2009. (See
&quot;Note 2. Recent Developments&quot; of Item 1 above)</p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'><i>Loss
from Discontinued Operations</i></p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'>The
loss from discontinued operations for the three and six month periods ended
March 31, 2010 and 2009 include results attributable to our Commerce City, Colorado
dual-branded restaurant that was closed in March 2010. The three and six month
periods ended March 31, 2010 include the results of operations, the fair value
of all future lease obligations and an impairment charge to write down the
fixed assets to book value. The three and six month periods ended March 31,
2009 represent the results of operations.</p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'><b><u>Liquidity
and Capital Resources</u></b></p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'><i>Cash
and Working Capital</i></p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>As of March 31, 2010,
we had $533,000 in cash and cash equivalents on hand.&nbsp; We currently plan to use
the cash balance and any cash generated from operations for our working capital
needs in fiscal 2010.&nbsp; In February, 2010 we secured a short term loan of
$400,000 to be used as working capital (see &quot;Financing Transactions&quot; below).
Additionally, we may contemplate the sale or sublease of selected underperforming
restaurants in fiscal 2010&nbsp; </p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>As of March 31, 2010,
we had a working capital deficit of $2,137,000 due in part to the entire note
payable to Wells Fargo Bank, N.A. of $786,000 shown as a current liability due
to certain loan covenant defaults that existed as of March 31, 2010. We are not
in payment default under the note and anticipate remaining current on all
principal and interest payments in fiscal 2010, subject to our successfully
raising additional operating capital.&nbsp; We have received a Forbearance and
Reservation of Rights letter from Wells Fargo Bank stating that they are
accepting current principal and interest payments and are not currently
accelerating the note, subject to agreeing to an acceptable Required Corrective
Action for the covenant defaults.&nbsp; It is unlikely that we will have an
acceptable Required Corrective Action until our Earnings Before Interest Taxes
and Depreciation (&quot;EBITDA&quot;) improves.&nbsp; If Wells Fargo were to accelerate the
note payable, we would need additional financing and we do not currently have a
source for such financing.&nbsp; Additionally, we have a $77,000 current liability
related to the unrealized loss on our interest rate swap, as described in Note 10
of the Notes to the Condensed Consolidated Financial Statements above. We have
a current liability of approximately $450,000 related to accrued property taxes
which will be paid out of cash generated from operations through the end of
fiscal 2010.</p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>Due to the
classification of the entire Wells Fargo note payable as a current liability
and the right of Wells Fargo to accelerate the required payment of the note, we
do not show the ability to fully satisfy our liabilities in the normal course
of business without raising additional capital.&nbsp;&nbsp; It is our objective to
acquire additional operating capital through debt and equity offerings and the
possible sale of existing restaurants with such funds to be used for the
repayment of the Wells Fargo note and to increase our working capital.&nbsp; We
believe we will be successful in raising sufficient additional operating
capital and in restructuring our debt obligations; however there can be no
assurance that we will be successful in raising such additional funds
particularly if we are unable to reverse our current negative same store sales trends.
If we are unable to raise additional operating capital during the remainder of
fiscal 2010 we may not be able to satisfy our liabilities as they come due.</p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>In December, 2009 we
entered into an agreement to extend the maturity of the PFGI II, LLC loan to
December 31, 2012 and modified the terms of the loan to include a 25 year
amortization period with a balloon payment on December 31, 2012.&nbsp; As a result,
the majority of the PFGI II LLC loan is shown as a long term liability as of March
31, 2010. We anticipate either developing a new restaurant on the land we own
collateralizing the PFGI II loan and reducing the amount of the loan by the
value of the land or selling the property and using the proceeds to reduce the
loan, with estimated net proceeds of $800,000 to $1,000,000.&nbsp; We will continue
to market the other land and building we own that collateralizes the PFGI II loan
for a sale and leaseback as conditions in the sale leaseback market improve and
plan to use the net proceeds to reduce the loan.</p>

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<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:97%'><i>Financing
Activities</i></p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'><b><i>Wells Fargo Note
Payable</i></b></p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>In May 2007 we
borrowed $1,100,000 from Wells Fargo Bank under a note payable with an eight
year term with a floating interest rate at .50% below prime.&nbsp; We simultaneously
entered into an interest rate swap transaction with Wells Fargo Bank for the
full $1,100,000 with a fixed interest rate of 7.77% for the full eight year
term coinciding with the note payable (see note 5 above). As discussed above we
are in default of certain loan covenants as of March 31, 2010 on this Wells
Fargo note, however we are not currently, and have never been, in payment
default under the note.</p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'><b><i>PFGI II LLC
Promissory Note</i></b></p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>In July 2008, we
entered into a $2,500,000 promissory note with an unrelated third party (PFGI II, LLC) and amended that note on April 20, 2009 extending the maturity to July 10, 2010 and
again on December 14, 2009 extending the maturity to December 31, 2012.&nbsp; The
promissory note originally constituted a revolving line-of-credit for the
development of new restaurants which was advanced and repaid on a monthly basis
from time to time.&nbsp; The promissory note now constitutes a term loan with
monthly payments of principal and interest.&nbsp; The loan is secured by separate
leasehold deeds of trust and security agreements related to six company-owned
restaurants and first deeds of trust on two real properties funded by the line
of credit. The total outstanding balance on the promissory note was $2,495,000
at March 31, 2010.&nbsp; Of the $2,495,000 outstanding balance, $1,595,000 is
related to the construction of one company-owned restaurant in Firestone,
Colorado that opened in October 2008. The fully developed restaurant is
currently being held for sale in the sale-leaseback market.&nbsp; The remaining
balance is related to the purchase, entitlement and other development fees on a
parcel of land in Aurora, Colorado that will be either developed into a
company-owned restaurant, leased or sold.</p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>In connection with
the PFGI II, LLC amendment in December, 2009, the Company issued a three-year
warrant dated January 2, 2010 (the &quot;Warrant&quot;) to PFGI II, LLC which provides
that PFGI II, LLC may at any time from January 2, 2010 until January 2, 2013
purchase up to 112,613 shares of the Company's common stock (the &quot;Warrant
Shares&quot;) at an exercise price of $1.11 per share.&nbsp; The number of Warrant Shares
and the exercise price are subject to customary anti-dilution adjustments upon
the occurrence of any stock dividends, stock splits, reverse stock splits,
recapitalizations, reclassifications, stock combinations or similar events. The
fair value of the Warrant was derived through the application of the
Black-Scholes option pricing model. The fair value of the Warrant issued was
determined to be $82,000 using the following assumptions: 1) risk free interest
rate of 1.7%, 2) an expected life of 3 years, and 3) an expected dividend yield
of zero. The fair value of $82,000 was charged to the note discount and
credited to Additional Paid in Capital. The note discount will be amortized
over thirty-six months and charged to interest expense. Amortization of the
debt discount included in interest expense for the three and six months ended
March 31, 2010 was $7,000 for both periods.</p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'><b><i>Golden Bridge Loan
Agreement</i></b></p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>On April 20, 2009 as
reported on form 8-K, Good Times Restaurants Inc. (the &quot;Company&quot;) and Good
Times Drive Thru Inc. (&quot;GTDT&quot;), a wholly owned subsidiary of the Company,
entered into a loan agreement with Golden Bridge, LLC (&quot;Golden Bridge&quot;),
pursuant to which Golden Bridge made a loan of $185,000 (the &quot;Golden Bridge Loan&quot;)
to GTDT to be used for restaurant marketing and other working capital costs.&nbsp;
Eric Reinhard, Ron Goodson, David Grissen, Richard Stark, and Alan Teran, who
are all members of the Company's Board of Directors and stockholders of the
Company, are the sole members of Golden Bridge.&nbsp; Eric Reinhard is the sole
manager of Golden Bridge.&nbsp; The Company's and GTDT's obtaining of the Golden
Bridge Loan and related transactions with Golden Bridge were duly approved in
advance by the Company's Board of Directors by the affirmative vote of members
thereof who did not have an interest in the transaction.</p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>The Golden Bridge
Loan is evidenced by a promissory note dated April 20, 2009 (the &quot;Golden Bridge
Note&quot;) made by the Company and GTDT, as co-makers, and bears interest at a rate
of 10% per annum on the unpaid principal balance.&nbsp; The Golden Bridge Note
provides for monthly interest payments and will mature and be due and payable
in full on July 10, 2010.&nbsp; The commitment fee for the Golden Bridge Loan was
$3,700.&nbsp; The Golden Bridge Loan Agreement contains customary event of default
provisions and a cross-default provision with respect to the loan agreement for
the PFGI II, LLC loan (as described above).</p>

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<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>The Golden Bridge
Loan Agreement and Note are subject to the terms of an Intercreditor Agreement
dated April 20, 2009 (the &quot;Intercreditor Agreement&quot;), among the Company, GTDT,
Golden Bridge and PFGI II, LLC (&quot;PFGI&quot;).&nbsp; Under the Intercreditor Agreement,
PFGI and Golden Bridge agreed that, upon any payments of principal or interest
on the Golden Bridge Loan or the PFGI Loan by GTDT, PFGI and Golden Bridge
shall each be entitled to its pro rata share of such payments in the amount of
93.1% for PFGI and 6.9% for Golden Bridge.&nbsp; The Intercreditor Agreement also
provides that GTDT and the Company may prepay the Golden Bridge Loan in whole
or in part with the prior consent of PFGI, and that any other indebtedness of
the Company or GTDT to PFGI or Golden Bridge shall be subordinate in payment
and lien priority to the Golden Bridge Loan and the PFGI Loan to the extent of
the proceeds of the collateral.&nbsp; Under the Intercreditor Agreement, all money
received from any foreclosure on the collateral securing the PFGI Loan shall be
applied to PFGI and Golden Bridge for their expenses related to such event and
then on a pari passu basis to PFGI and Golden Bridge in accordance with their
respective pro rata shares.</p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>Prior to the closing
of the Golden Bridge Loan, borrowings under the PFGI Loan were secured by
GTDT's leasehold estates and business assets with respect to certain of GTDT's
restaurants located in Boulder, Adams, Jefferson and Larimer counties in
Colorado and first deeds of trust on real property in Arapahoe and Weld
counties in Colorado developed under the PFGI Loan.</p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>In connection with
the Golden Bridge Loan, the Company issued a three-year warrant dated April 20,
2009 (the &quot;Warrant&quot;) to Golden Bridge which provides that Golden Bridge may at
any time from April 20, 2009 until April 20, 2012 purchase up to 92,500 shares
of the Company's common stock (the &quot;Warrant Shares&quot;) at an exercise price of
$1.15 per share.&nbsp; The number of Warrant Shares and the exercise price are
subject to customary anti-dilution adjustments upon the occurrence of any stock
dividends, stock splits, reverse stock splits, recapitalizations,
reclassifications, stock combinations or similar events. The fair value of the
Warrant was derived through the application of the Black-Scholes option pricing
model. The fair value of the Warrant issued was determined to be $42,000 with
the following assumptions: 1) risk free interest rate of 1.27%, 2) an expected
life of 3 years, and 3) an expected dividend yield of zero. The fair value of
$42,000 was charged to the note discount and credited to Additional Paid in
Capital. The note discount will be amortized over fourteen months and charged
to interest expense. Amortization of the debt discount included in interest
expense for the three and six months ended March 31, 2010 was $8,000 and
$16,000, respectively.</p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-autospace:none'><b><i>New Loan
Agreement</i></b></p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify;text-autospace:
none'>On February 2, 2010, as reported on form 8-K, the Company entered into a loan agreement with W Capital,
John T. MacDonald and Golden Bridge, LLC (collectively &quot;the Lender&quot;), pursuant
to which the Lender made a loan of $200,000, with up to an additional $200,000
loan available through April 30, 2010 to be used for restaurant marketing and
other working capital uses. At March 31, 2010 the entire $400,000 had been
advanced to the Company. The loan agreement was amended on April 1, 2010, as
reported on form 8-K. (See &quot;Note 2 - Recent Developments&quot; above)</p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify;text-autospace:
none'>The Loan is evidenced by a Convertible Secured Promissory Note
dated February 1, 2010 (the &quot;Note&quot;) made by the Company and shall bear interest
at a rate of 12% per annum on the unpaid principal balance through August 1,
2010.&nbsp; The maturity date for payment of all principal and interest on the Note
is December 31, 2010.&nbsp; However, if and to the extent that any portion of the
Note is still outstanding after August 1, 2010, the interest rate will increase
to 14% per annum from and after August 1, 2010 until the maturity date.&nbsp; All
interest accrues through the maturity date.&nbsp; The Loan Agreement contains
customary event of default provisions and a cross-default provision with
respect to the loan agreement for the Wells Fargo Bank and PFGI II, LLC loans
in the event of payment default on either of those loans.&nbsp; Upon the occurrence
and continuance of an event of default, the Lender may declare all or part of
the unpaid principal and accrued and unpaid interest on the Loan due and
payable.&nbsp; Any amounts not paid to the Lender when due will bear interest from
the due date until paid at a rate of 16% per annum. The repayment of the 2009
Golden Bridge Loan and the February 2, 2010 Loan will require additional equity
or debt capital. As described above in Note 2 - Recent Developments, the
Company has hired Mastodon Ventures to seek strategic alternatives and sources
of capital.&nbsp; There can be no assurance that we will be successful in raising
such capital which would require us to renegotiate the repayment terms of these
short term loans.</p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify;text-autospace:
none'>The Loan Agreement and the Note are subject to the terms of a
Leasehold Deed of Trust Agreement and Security Agreement with respect to
certain of GTDT's restaurants that were not previously pledged as collateral
under the Wells Fargo Bank or PFGI II, LLC borrowings.&nbsp; The Note is convertible
into shares of common stock of the Company (the &quot;Conversion Shares&quot;) at any
time prior to repayment at a conversion price of 25% less than the average
price of the Company's common stock during the 20 days prior to the conversion
date, provided however that the conversion price shall not be below $.75 per
share nor above $1.08 per share (the &quot;Conversion Price&quot;).</p>

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<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify;text-autospace:
none'>In
accordance with FASB ASC 470-20, Debt with Conversion and Other Options, the intrinsic value of the embedded beneficial conversion
feature was determined to be $161,000. The value of $161,000 was charged to
note discounts and credited to Additional Paid in Capital. The value will be
amortized over six months and charged to interest expense. Amortization
of the beneficial conversion feature included in interest expense for the three
and six months ended March 31, 2010 was $53,000 for both periods.</p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify;text-autospace:
none'>In connection with the Loan, the Company issued warrants dated
February 1, 2010 (the &quot;Warrants&quot;) to the Lender which provides that the Lender
may at any time from February 1, 2010 until two years from the date of
repayment or conversion of the Loan purchase up to an aggregate of 50,000
shares of the Company's common stock (the &quot;Warrant Shares&quot;) at an exercise
price that is equal to the Conversion Price calculation above.&nbsp; If the Loan is
not repaid prior to August 1, 2010, the Company will issue warrants for the
purchase of 50,000 additional shares of the Company's common stock upon the
same terms as the initial Warrants.&nbsp; The number of Warrant Shares and the
exercise price are subject to customary anti-dilution adjustments upon the
occurrence of any stock dividends, stock splits, reverse stock splits,
recapitalizations, reclassifications, stock combinations or similar events. The fair value of the
Warrants was derived through the application of the Black-Scholes option
pricing model. The fair value of the Warrants issued was determined to be $38,000
with the following assumptions: 1) risk free interest rate of 1.41%, 2) an
expected life of 2.5 years, and 3) an expected dividend yield of zero. The fair
value of $38,000 was charged to the note discount and credited to Additional
Paid in Capital. The note discount will be amortized over six months and
charged to interest expense. Amortization of the debt discount included in
interest expense for the three and six months ended March 31, 2010 was $13,000 for
both periods.</p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in'>Additional
commitments for the development of new restaurants in fiscal 2010 and beyond will
depend on the Company's sales trends, cash generated from operations and our
access to capital including in the sale-leaseback markets.</p>

<p class=MsoBodyText style='margin-top:6.0pt;margin-right:0in;margin-bottom:
6.0pt;margin-left:0in;line-height:normal'><i>Capital
Expenditures</i></p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>We do not have any
plans for any significant capital expenditures for the balance of fiscal 2010,
other than normal recurring capital expenditures for existing restaurants. Additional
commitments for the development of new restaurants in fiscal 2010 and beyond
will depend on the Company's sales trends, cash generated from operations and
our access to additional capital.</p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'><i>Cash Flows</i></p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'>Net
cash used in operating activities was $670,000 for the six months ended March
31, 2010. The net cash used in operating activities for the six months ended March
31, 2010 was the result of a net loss of ($1,948,000) as well as cash and
non-cash reconciling items totaling $1,278,000 (comprised of depreciation and
amortization of $580,000, stock based compensation expense of $44,000, discontinued
operations costs of $358,000 an accounts payable increase of $341,000 and a net
decrease in other operating assets and liabilities of $45,000).</p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'>Net
cash used in operating activities was $808,000 for the six months ended March
31, 2009. The net cash used in operating activities for the six months ended March
31, 2009 was the result of a net loss of ($1,311,000) as well as cash and
non-cash reconciling items totaling $503,000 (comprised of depreciation and
amortization of $627,000, an unrealized loss of $116,000 related to our
interest rate swap liability, an accounts payable decrease of $279,000 and a
net increase in other operating assets and liabilities of $39,000).</p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'>Net
cash used in investing activities for the six months ended March 31, 2010 was $16,000
which reflects payments of $24,000 for miscellaneous restaurant related capital
expenditures and $8,000 in principal payments received on loans to franchisees.</p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'>Net
cash used in investing activities for the six months ended March 31, 2009 was $254,000
which reflects payments of $245,000 for the purchase of property and equipment
(including $205,000 for new store development and $40,000 for miscellaneous
restaurant related capital expenditures), $31,000 in loans made to franchisees
and $22,000 in principal payments received on loans to franchisees.</p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'>Net
cash provided by financing activities for the six months ended March 31, 2010
was $404,000, which includes principal payments on notes payable and long term
debt of $67,000, borrowings on notes payable of $400,000 and receivables from non-controlling
interests of $71,000.</p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'>Net
cash provided by financing activities for the six months ended March 31, 2009
was $249,000, which includes principal payments on notes payable and long term
debt of $60,000; an advance on our revolving line of credit of $320,000; and distributions
to minority interests in partnerships of $11,000.</p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'><i>&nbsp;</i></p>

<p class=MsoFooter align=center style='text-align:center'>21</p>

<div class=MsoNormal align=center style='text-align:center'>

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<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'><i>Contingencies</i></p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>We remain
contingently liable on various land leases underlying restaurants that were
previously sold to franchisees.&nbsp; We have never experienced any losses related
to these contingent lease liabilities, however if a franchisee defaults on the
payments under the leases, we would be liable for the lease payments as the
assignor or sublessor of the lease.&nbsp; Currently we have not been notified nor
are we aware of any leases in default under which we are contingently liable,
however there can be no assurance that there will not be in the future, which
could have a material effect on our future operating results.</p>

<p class=MsoBodyText style='margin-top:6.0pt;margin-right:0in;margin-bottom:
6.0pt;margin-left:0in;line-height:97%'><b><u>Impact
of Inflation</u></b></p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'>We
experienced moderation in commodity costs during fiscal 2005 and 2006 and
significant increases in fiscal 2007 and fiscal 2008.&nbsp; State increases in the
minimum wage resulted in an increase in our average hourly wage of $.60 per
employee hour during fiscal 2007, approximately $.23 per employee hour in
fiscal 2008 and $.07 per employee hour in January 2009. We took moderate price
increases during fiscal 2009 and plan for moderate price increases in fiscal
2010, which may or may not be sufficient to recover increased commodity costs
or increases in other operating expenses.</p>

<p class=MsoBodyText style='margin-top:6.0pt;margin-right:0in;margin-bottom:
6.0pt;margin-left:0in;line-height:normal'><b><u>Seasonality</u></b></p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'>Revenues
of the Company are subject to seasonal fluctuation based primarily on weather
conditions adversely affecting restaurant sales in December, January, February
and March.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in'><b>ITEM
3.&nbsp;&nbsp;&nbsp; QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK</b></p>

<p class=MsoBodyText align=left style='margin-top:0in;margin-right:0in;
margin-bottom:12.0pt;margin-left:.25in;text-align:left;text-indent:-.25in;
line-height:97%'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Not
required.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in'><b>ITEM
4T.&nbsp; CONTROLS AND PROCEDURES</b></p>

<p class=MsoNormal style='margin-top:6.0pt;text-align:justify;background:white'><b>Conclusion Regarding
the Effectiveness of Disclosure Controls and Procedures </b></p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>Based on an
evaluation of the Company's disclosure controls and procedures (as defined in
Rules&nbsp;13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as
amended), as of the end of the period covered by this report on form 10Q, the
Company's Chief Executive Officer and Controller (its principal executive
officer and principal financial officer, respectively) have concluded that the
Company's disclosure controls and procedures were effective.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify;background:white'><b>Changes in Internal Control over
Financial Reporting</b></p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify;background:
white'>There
have been no significant changes in the Company's internal control over
financial reporting that occurred during the Company's fiscal quarter ended March&nbsp;31,
2010 that have materially affected, or are reasonably likely to materially
affect, the Company's internal control over financial reporting.</p>

<p class=MsoNormal align=center style='margin-top:12.0pt;margin-right:0in;
margin-bottom:12.0pt;margin-left:0in;text-align:center;background:white'><b>PART II - OTHER
INFORMATION</b></p>

<p class=MsoHeader style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:45.35pt;text-indent:-45.35pt'><b>ITEM 1.&nbsp;&nbsp; LEGAL PROCEEDINGS</b></p>

<p class=MsoBodyText align=left style='margin-top:0in;margin-right:0in;
margin-bottom:6.0pt;margin-left:0in;text-align:left;line-height:normal'>Good Times Restaurants is subject to
legal proceedings which are incidental to its business.&nbsp; These legal
proceedings are not expected to have a material impact on the Company.</p>

<p class=MsoBodyText align=left style='margin-top:6.0pt;margin-right:0in;
margin-bottom:6.0pt;margin-left:0in;text-align:left;line-height:normal'><b>ITEM 1A. RISK FACTORS</b></p>

<p class=MsoBodyText align=left style='margin-top:0in;margin-right:0in;
margin-bottom:6.0pt;margin-left:.25in;text-align:left;line-height:normal'>Not required.</p>

<p class=MsoBodyText align=left style='margin-top:6.0pt;margin-right:0in;
margin-bottom:6.0pt;margin-left:45.35pt;text-align:left;text-indent:-45.35pt;
line-height:normal'><b>ITEM 2.&nbsp;&nbsp; UNREGISTERED
SALES OF EQUITY SECURITIES AND USE OF PROCEEDS</b></p>

<p class=MsoBodyTextIndent style='margin-left:.5in;text-indent:-.25in'>None.</p>

<p class=MsoFooter align=center style='text-align:center'>22</p>

<div class=MsoNormal align=center style='text-align:center'>

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<p class=MsoBodyText align=left style='margin-top:6.0pt;margin-right:0in;
margin-bottom:6.0pt;margin-left:45.35pt;text-align:left;text-indent:-45.35pt;
line-height:normal'><b>ITEM 3.&nbsp;&nbsp; DEFAULTS
UPON SENIOR SECURITIES</b></p>

<p class=MsoBodyText style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;line-height:normal'>We
are in default of certain technical loan covenants as of March&nbsp;31, 2010 on
our $786,000 note payable to Wells Fargo Bank, N.A. (&quot;the Bank&quot;). We have never
been in payment default on the note. On February 9, 2009 we received a
Reservation of Rights letter from the Bank formally notifying us of the default
of the Earnings Before Interest Taxes and Depreciation (&quot;EBITDA&quot;) Coverage
Ratio of not less than 1.5 to 1.0 and the Tangible Net Worth of not less than
$5,000,000 as set forth in the Credit Agreement for the period ending December
31, 2008. The letter serves as notice that notwithstanding the foregoing events
of default, the Bank is reserving all of its rights and remedies under the
Credit Agreement and related agreements. The Bank is not now accelerating the
Loan and is willing to continue to accept regularly scheduled payments of
principal and interest under the Loan.</p>

<p class=MsoBodyText style='margin-top:6.0pt;margin-right:0in;margin-bottom:
6.0pt;margin-left:0in;line-height:normal'><b>ITEM
4.&nbsp;&nbsp; SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS</b></p>

<p class=MsoList2 style='margin-bottom:6.0pt'>None.</p>

<p class=MsoBodyText align=left style='margin-top:6.0pt;margin-right:0in;
margin-bottom:6.0pt;margin-left:45.35pt;text-align:left;text-indent:-45.35pt;
line-height:normal'><b>ITEM 5.&nbsp;&nbsp; OTHER
INFORMATION</b></p>

<p class=MsoList2 style='margin-bottom:6.0pt'>None.</p>

<p class=MsoHeader style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:45.35pt;text-indent:-45.35pt'><b>&nbsp;</b></p>

<p class=MsoHeader style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:45.35pt;text-indent:-45.35pt'><b>ITEM 6.&nbsp;&nbsp; EXHIBITS</b></p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:.5in'>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibits.&nbsp;
The following exhibits are furnished as part of this report:</p>

<p class=MsoNormal style='margin-bottom:6.0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Exhibit No.</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Description</u></p>

<p class=MsoHeader style='margin-left:31.5pt'>*31.1&nbsp;&nbsp;&nbsp;&nbsp; Certification of Chief Executive
Officer pursuant to 18 U.S.C. Section 1350</p>

<p class=MsoHeader style='margin-left:31.7pt'>*31.2&nbsp;&nbsp;&nbsp;&nbsp; Certification of Controller
pursuant to 18 U.S.C. Section 1350</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:31.7pt'>*32.1&nbsp;&nbsp;&nbsp;&nbsp; Certification
of Chief Executive Officer and Controller pursuant to Section 906</p>

<p class=MsoNormal style='margin-bottom:6.0pt'>*filed herewith</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in'><b>SIGNATURES</b></p>

<p class=MsoBodyText align=left style='margin-top:0in;margin-right:0in;
margin-bottom:6.0pt;margin-left:0in;text-align:left;line-height:normal'>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>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='border-collapse:collapse'>
 <tr>
  <td width=241 valign=top style='width:180.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <h3>&nbsp;</h3>
  </td>
  <td width=378 valign=top style='width:283.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <h3><b>GOOD TIMES RESTAURANTS INC.</b></h3>
  </td>
 </tr>
 <tr>
  <td width=241 valign=top style='width:180.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>DATE:
  May 17, 2010</p>
  </td>
  <td width=378 valign=top style='width:283.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=241 valign=top style='width:180.9pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=378 valign=top style='width:283.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=Byline align=left style='margin-top:0in;margin-right:0in;margin-bottom:
  0in;margin-left:.3in;margin-bottom:.0001pt;text-align:left;line-height:normal'><u>/s/ Boyd E. Hoback</u></p>
  </td>
 </tr>
 <tr>
  <td width=241 valign=top style='width:180.9pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=378 valign=top style='width:283.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoHeader style='margin-left:26.1pt'>Boyd E. Hoback</p>
  <p class=MsoHeader style='margin-left:26.1pt'>President and Chief Executive Officer</p>
  </td>
 </tr>
 <tr>
  <td width=241 valign=top style='width:180.9pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=378 valign=top style='width:283.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoHeader style='margin-left:.3in'><i>&nbsp;</i></p>
  </td>
 </tr>
 <tr>
  <td width=241 valign=top style='width:180.9pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=378 valign=top style='width:283.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=Byline align=left style='margin-top:0in;margin-right:0in;margin-bottom:
  0in;margin-left:.3in;margin-bottom:.0001pt;text-align:left;line-height:normal'><u>/s/ Susan M. Knutson</u></p>
  </td>
 </tr>
 <tr>
  <td width=241 valign=top style='width:180.9pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=378 valign=top style='width:283.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyTextIndent style='margin-top:0in;margin-right:0in;margin-bottom:
  0in;margin-left:26.1pt;margin-bottom:.0001pt'>Susan M. Knutson</p>
  <p class=MsoBodyTextIndent style='margin-top:0in;margin-right:0in;margin-bottom:
  0in;margin-left:26.1pt;margin-bottom:.0001pt'>Controller</p>
  </td>
 </tr>
</table>

<p class=MsoFooter align=center style='text-align:center'>23</p>

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<SEQUENCE>2
<FILENAME>exhibit311certceo1.htm
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<p class=MsoNormal align=center style='text-align:center'><b>&nbsp;</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>&nbsp;</b></p>









<p class=MsoNormal align=center style='text-align:center'><b>Exhibit 31.1</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>CERTIFICATION OF
THE CHIEF EXECUTIVE OFFICER</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>RULE 13a-14(a)
CERTIFICATION</b></p>

<p class=MsoNormal style='margin-left:22.5pt;text-align:justify;text-indent:
- -22.5pt'>I, Boyd E. Hoback, certify that:</p>

<p class=MsoNormal style='margin-left:.5in;text-align:justify;text-indent:-.5in'>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; I
have reviewed this quarterly report on Form 10-Q of Good Times Restaurants
Inc.;</p>

<p class=MsoNormal style='margin-left:.5in;text-align:justify;text-indent:-.5in'>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Based
on my knowledge, this 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 report;</p>

<p class=MsoNormal style='margin-left:.5in;text-align:justify;text-indent:-.5in'>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Based
on my knowledge, the financial statements, and other financial information
included in this 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 report;</p>

<p class=MsoNormal style='margin-left:.5in;text-align:justify;text-indent:-.5in'>4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant
and have:</p>

<p class=MsoNormal style='margin-left:1.0in;text-align:justify;text-indent:
- -.5in'>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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 class=MsoNormal style='margin-left:1.0in;text-align:justify;text-indent:
- -.5in'>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Designed such internal control over financial reporting, or
caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;</p>

<p class=MsoNormal style='margin-left:1.0in;text-align:justify;text-indent:
- -.5in'>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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>



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<p class=MsoNormal style='margin-left:1.0in;text-align:justify;text-indent:
- -.5in'>(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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;
and</p>

<p class=MsoNormal style='margin-left:.5in;text-align:justify;text-indent:-.5in'>5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
registrant's other certifying officer and I have disclosed, based on our most
recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):</p>

<p class=MsoNormal style='margin-left:1.0in;text-align:justify;text-indent:
- -.5in'><a name="OLE_LINK1">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; All significant deficiencies and material
weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize and report financial information; and</a></p>

<p class=MsoNormal style='margin-left:1.0in;text-align:justify;text-indent:
- -.5in'>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's internal
control over financial reporting.</p>

<p class=MsoNormal>Date:&nbsp; May 17, 2010</p>



<p class=MsoNormal><u>/s/ Boyd E. Hoback</u></p>

<p class=MsoNormal><u>&nbsp;</u></p>

<p class=MsoNormal>Boyd E. Hoback</p>

<p class=MsoFooter>President and Chief Executive Officer</p>

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<SEQUENCE>3
<FILENAME>exhibit312certofcontroller1.htm
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<p class=MsoNormal align=center style='text-align:center'><b>&nbsp;</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>&nbsp;</b></p>









<p class=MsoNormal align=center style='text-align:center'><b>Exhibit 31.2</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>CERTIFICATION OF
THE CONTROLLER</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>RULE 13a-14(a)
CERTIFICATION</b></p>



<p class=MsoNormal style='margin-left:22.5pt;text-align:justify;text-indent:
- -22.5pt'>I, Susan M. Knutson, certify that:</p>

<p class=MsoNormal style='margin-left:.5in;text-align:justify;text-indent:-.5in'>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; I
have reviewed this annual report on Form 10-Q of Good Times Restaurants Inc.;</p>

<p class=MsoNormal style='margin-left:.5in;text-align:justify;text-indent:-.5in'>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Based
on my knowledge, this 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 report;</p>

<p class=MsoNormal style='margin-left:.5in;text-align:justify;text-indent:-.5in'>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Based
on my knowledge, the financial statements, and other financial information
included in this 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 report;</p>

<p class=MsoNormal style='margin-left:.5in;text-align:justify;text-indent:-.5in'>4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant
and have:</p>

<p class=MsoNormal style='margin-left:1.0in;text-align:justify;text-indent:
- -.5in'>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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 class=MsoNormal style='margin-left:1.0in;text-align:justify;text-indent:
- -.5in'>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Designed such internal control over financial reporting, or
caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;</p>

<p class=MsoNormal style='margin-left:1.0in;text-align:justify;text-indent:
- -.5in'>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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>



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<p class=MsoNormal style='margin-left:1.0in;text-align:justify;text-indent:
- -.5in'>(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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;
and</p>

<p class=MsoNormal style='margin-left:.5in;text-align:justify;text-indent:-.5in'>5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
registrant's other certifying officer and I have disclosed, based on our most
recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):</p>

<p class=MsoNormal style='margin-left:1.0in;text-align:justify;text-indent:
- -.5in'><a name="OLE_LINK1">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; All significant deficiencies and material
weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize and report financial information; and</a></p>

<p class=MsoNormal style='margin-left:1.0in;text-align:justify;text-indent:
- -.5in'>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's internal
control over financial reporting.</p>

<p class=MsoNormal>Date:&nbsp; May 17, 2010</p>



<p class=MsoNormal><u>/s/ Susan M. Knutson</u></p>

<p class=MsoNormal><u>&nbsp;</u></p>

<p class=MsoNormal>Susan M. Knutson</p>

<p class=MsoFooter>Controller</p>

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<FILENAME>exhibit321certceocont1.htm
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<p class=MsoNormal align=center style='text-align:center'><b>&nbsp;</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>&nbsp;</b></p>









<p class=MsoNormal align=center style='text-align:center'><b>Exhibit 32.1</b></p>

<p class=titlec align=center style='text-align:center'><b>CERTIFICATION
PURSUANT TO 18 U.S.C. SECTION 1350,</b></p>

<p class=titlec align=center style='text-align:center'><b>AS ADOPTED PURSUANT
TO</b></p>

<p class=titlec align=center style='text-align:center'><b>SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002</b></p>

<p class=bodytext5 style='text-align:justify'>In connection with the Quarterly
Report on Form 10-Q of Good Times Restaurants Inc. (the &quot;Company&quot;) for the period
ended March 31, 2010 as filed with the Securities and Exchange Commission on
the date hereof (the &quot;Report&quot;), I, Boyd E. Hoback, as Chief Executive Officer
of the Company, and Susan M. Knutson, as Controller of the Company, each hereby
certifies, pursuant to and solely for the purpose of 18 U.S.C. 1350, as adopted
pursuant to 906 of the Sarbanes-Oxley Act of 2002, that to the best of my
knowledge and belief:</p>

<p class=bodytext5 style='margin-left:.5in;text-align:justify;text-indent:-.5in'>(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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 class=bodytext5 style='margin-left:.5in;text-align:justify;text-indent:-.5in'>(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
information contained in the Report fairly presents, in all material respects,
the financial condition and results of operations of the Company.</p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
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  <p class=MsoNormal><i>/s/ Boyd E. Hoback</i></p>
  </td>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><i>/s/ Susan M. Knutson</i></p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Boyd E. Hoback</p>
  </td>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Susan M. Knutson</p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Chief Executive Officer</p>
  </td>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Controller (principal financial officer)</p>
  </td>
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  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>May 17, 2010</p>
  </td>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>May 17, 2010</p>
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