<SEC-DOCUMENT>0000825324-11-000008.txt : 20110516
<SEC-HEADER>0000825324-11-000008.hdr.sgml : 20110516
<ACCEPTANCE-DATETIME>20110516121555
ACCESSION NUMBER:		0000825324-11-000008
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20110331
FILED AS OF DATE:		20110516
DATE AS OF CHANGE:		20110516

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:		11844723

	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>workingq33111c1.htm
<TEXT>
<html>

<head>
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<title>UNITED STATES</title>


</head>

<body lang=EN-US vlink=purple>

<div class=WordSection1>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='border-collapse:collapse'>
 <tr>
  <td width=638 valign=top style='width:6.65in;padding:0in 5.4pt 0in 5.4pt'>
  <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>UNITED STATES</b></p>
  </td>
 </tr>
 <tr>
  <td width=638 valign=top style='width:6.65in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'><b>SECURITIES AND EXCHANGE COMMISSION</b></p>
  </td>
 </tr>
 <tr>
  <td width=638 valign=top style='width:6.65in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'><b>WASHINGTON, D.C. 20549</b></p>
  </td>
 </tr>
 <tr>
  <td width=638 valign=top style='width:6.65in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'><b>FORM 10-Q</b></p>
  </td>
 </tr>
 <tr>
  <td width=638 valign=top style='width:6.65in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>(Mark One)</p>
  </td>
 </tr>
 <tr>
  <td width=638 valign=top style='width:6.65in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>[x]&nbsp; QUARTERLY REPORT PURSUANT TO
  SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE</p>
  </td>
 </tr>
 <tr>
  <td width=638 valign=top style='width:6.65in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>ACT OF 1934</p>
  </td>
 </tr>
 <tr>
  <td width=638 valign=top style='width:6.65in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=638 valign=top style='width:6.65in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>For the quarterly period ended March 31,
  2011</p>
  </td>
 </tr>
 <tr>
  <td width=638 valign=top style='width:6.65in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=638 valign=top style='width:6.65in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>OR</p>
  </td>
 </tr>
 <tr>
  <td width=638 valign=top style='width:6.65in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=638 valign=top style='width:6.65in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>[&nbsp; ]&nbsp; TRANSITION REPORT PURSUANT TO
  SECTION 13 OR 15(d) OF THE SECURITIES</p>
  </td>
 </tr>
 <tr>
  <td width=638 valign=top style='width:6.65in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>EXCHANGE ACT OF 1934</p>
  </td>
 </tr>
 <tr>
  <td width=638 valign=top style='width:6.65in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>Commission File Number: 0-18590</p>
  </td>
 </tr>
 <tr>
  <td width=638 valign=top style='width:6.65in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=638 valign=top style='width:6.65in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'><b><u>GOOD TIMES RESTAURANTS, INC</u></b><u>.</u></p>
  </td>
 </tr>
 <tr>
  <td width=638 valign=top style='width:6.65in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>(Exact Name of Registrant as Specified
  in Its Charter)</p>
  </td>
 </tr>
</table>



<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='margin-left:-4.5pt;border-collapse:collapse'>
 <tr style='height:15.45pt'>
  <td width=330 style='width:247.5pt;padding:0in 0in 0in 0in;height:15.45pt'>
  <p class=MsoNormal align=center style='text-align:center'>NEVADA</p>
  </td>
  <td width=43 style='width:32.35pt;padding:0in 0in 0in 0in;height:15.45pt'>

  </td>
  <td width=263 style='width:197.15pt;padding:0in 0in 0in 0in;height:15.45pt'>
  <p class=MsoNormal align=center style='text-align:center'>84-1133368</p>
  </td>
 </tr>
 <tr style='height:30.95pt'>
  <td width=330 style='width:247.5pt;padding:0in 0in 0in 0in;height:30.95pt'>
  <p class=MsoNormal align=center style='text-align:center'>(State or Other Jurisdiction of</p>
  <p class=MsoNormal align=center style='text-align:center'>Incorporation or Organization)</p>
  </td>
  <td width=43 style='width:32.35pt;padding:0in 0in 0in 0in;height:30.95pt'>

  </td>
  <td width=263 style='width:197.15pt;padding:0in 0in 0in 0in;height:30.95pt'>
  <p class=MsoNormal align=center style='text-align:center'>(I.R.S. Employer Identification Number)</p>
  </td>
 </tr>
</table>



<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='border-collapse:collapse'>
 <tr>
  <td width=638 valign=top style='width:6.65in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>601 CORPORATE CIRCLE, GOLDEN, CO 80401</p>
  </td>
 </tr>
 <tr>
  <td width=638 valign=top style='width:6.65in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>(Address of Principal Executive Offices,
  Including Zip Code)</p>
  </td>
 </tr>
 <tr>
  <td width=638 valign=top style='width:6.65in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>(303) 384-1400</p>
  </td>
 </tr>
 <tr>
  <td width=638 valign=top style='width:6.65in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>(Registrant's Telephone Number,
  Including Area Code)</p>
  </td>
 </tr>
 <tr>
  <td width=638 valign=top style='width:6.65in;padding:0in 5.4pt 0in 5.4pt'>

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



<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='border-collapse:collapse'>
 <tr>
  <td width=531 valign=top style='width:398.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <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>
  </td>
  <td width=57 valign=bottom style='width:42.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Yes [x]</p>
  </td>
  <td width=50 valign=bottom style='width:37.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>No [&nbsp; ]</p>
  </td>
 </tr>
</table>



<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='border-collapse:collapse'>
 <tr>
  <td width=638 valign=top style='width:6.65in;padding:0in 5.4pt 0in 5.4pt'>
  <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>
  </td>
 </tr>
</table>



<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='margin-left:-4.5pt;border-collapse:collapse'>
 <tr style='height:15.45pt'>
  <td width=282 style='width:211.5pt;padding:0in 0in 0in 0in;height:15.45pt'>
  <p class=MsoNormal style='margin-left:.55in'>Large accelerated filer&nbsp; [&nbsp; ]</p>
  </td>
  <td width=96 style='width:1.0in;padding:0in 0in 0in 0in;height:15.45pt'>

  </td>
  <td width=258 style='width:193.5pt;padding:0in 0in 0in 0in;height:15.45pt'>
  <p class=MsoNormal>Accelerated
  filer&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; ]</p>
  </td>
 </tr>
 <tr style='height:16.65pt'>
  <td width=282 style='width:211.5pt;padding:0in 0in 0in 0in;height:16.65pt'>
  <p class=MsoNormal style='margin-left:.55in'>Non-accelerated filer&nbsp;&nbsp;&nbsp;&nbsp; [&nbsp; ]</p>
  </td>
  <td width=96 style='width:1.0in;padding:0in 0in 0in 0in;height:16.65pt'>

  </td>
  <td width=258 style='width:193.5pt;padding:0in 0in 0in 0in;height:16.65pt'>
  <p class=MsoNormal>Smaller
  reporting company&nbsp;&nbsp;&nbsp;&nbsp; [x]</p>
  </td>
 </tr>
</table>



<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='border-collapse:collapse'>
 <tr>
  <td width=513 valign=top style='width:384.95pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Indicate by
  check mark whether the registrant is a shell company (as defined in Rule 12b-2
  of the Exchange Act).</p>
  </td>
  <td width=70 valign=top style='width:52.3pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Yes [&nbsp; ]</p>
  </td>
  <td width=55 valign=top style='width:41.55pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>No [x]</p>
  </td>
 </tr>
</table>



<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='border-collapse:collapse'>
 <tr>
  <td width=638 valign=top style='width:6.65in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>As of May 16,
  2011, there were 2,726,214 shares of the Registrant's common stock, par value
  $0.001 per share, issued and outstanding.</p>
  </td>
 </tr>
</table>

<p class=MsoNormal><a name=pgbrk></a>&nbsp;</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 March 31,
2011</b></p>



<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=655
 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=510 valign=top style='width:382.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'><b><u>INDEX</u></b></p>
  </td>
  <td width=78 valign=top style='width:58.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='margin-top:0in;margin-right:8.1pt;
  margin-bottom:0in;margin-left:.05in;margin-bottom:.0001pt;text-align:center'><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=510 valign=top style='width:382.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'><b>PART I - FINANCIAL INFORMATION</b></p>
  </td>
  <td width=78 valign=top style='width:58.5pt;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=510 valign=top style='width:382.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=78 valign=top style='width:58.5pt;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=510 valign=top style='width:382.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>Financial
  Statements</p>
  </td>
  <td width=78 valign=top style='width:58.5pt;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=510 valign=top style='width:382.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=78 valign=top style='width:58.5pt;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=510 valign=top style='width:382.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>Condensed
  Consolidated Balance Sheets (unaudited) - March 31,
  2011&nbsp; and September 30, 2010</p>
  </td>
  <td width=78 valign=top style='width:58.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:8.1pt;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=510 valign=top style='width:382.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=78 valign=top style='width:58.5pt;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=510 valign=top style='width:382.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyTextIndent style='margin:0in;margin-bottom:.0001pt'>Condensed Consolidated Statements of Operations
  (unaudited) for the three and six months ended March
  31, 2011and 2010</p>
  </td>
  <td width=78 valign=top style='width:58.5pt;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'>5</p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=510 valign=top style='width:382.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=78 valign=top style='width:58.5pt;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=510 valign=top style='width:382.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoList2 style='margin-left:0in;text-indent:0in'>Condensed Consolidated Statements of Cash Flow
  (unaudited) for the six months ended March 31, 2011and
  2010</p>
  </td>
  <td width=78 valign=top style='width:58.5pt;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=510 valign=top style='width:382.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=78 valign=top style='width:58.5pt;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=510 valign=top style='width:382.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Notes to Condensed
  Consolidated Financial Statements</p>
  </td>
  <td width=78 valign=top style='width:58.5pt;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=510 valign=top style='width:382.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=78 valign=top style='width:58.5pt;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=510 valign=top style='width:382.5pt;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=78 valign=top style='width:58.5pt;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=510 valign=top style='width:382.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=78 valign=top style='width:58.5pt;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=510 valign=top style='width:382.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Quantitative and
  Qualitative Disclosures About Market Risk</p>
  </td>
  <td width=78 valign=top style='width:58.5pt;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=510 valign=top style='width:382.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=78 valign=top style='width:58.5pt;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=510 valign=top style='width:382.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Controls and Procedures</p>
  </td>
  <td width=78 valign=top style='width:58.5pt;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=510 valign=top style='width:382.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=78 valign=top style='width:58.5pt;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=510 valign=top style='width:382.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'><b>PART II - OTHER INFORMATION</b></p>
  </td>
  <td width=78 valign=top style='width:58.5pt;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=510 valign=top style='width:382.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=78 valign=top style='width:58.5pt;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=510 valign=top style='width:382.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Legal Proceedings</p>
  </td>
  <td width=78 valign=top style='width:58.5pt;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=510 valign=top style='width:382.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=78 valign=top style='width:58.5pt;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=510 valign=top style='width:382.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Risk Factors</p>
  </td>
  <td width=78 valign=top style='width:58.5pt;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=510 valign=top style='width:382.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=78 valign=top style='width:58.5pt;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=510 valign=top style='width:382.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Unregistered Sales of
  Equity Securities and Use of Proceeds</p>
  </td>
  <td width=78 valign=top style='width:58.5pt;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=510 valign=top style='width:382.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=78 valign=top style='width:58.5pt;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=510 valign=top style='width:382.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Defaults Upon Senior
  Securities</p>
  </td>
  <td width=78 valign=top style='width:58.5pt;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=510 valign=top style='width:382.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=78 valign=top style='width:58.5pt;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=510 valign=top style='width:382.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>(Removed and reserved)</p>
  </td>
  <td width=78 valign=top style='width:58.5pt;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=510 valign=top style='width:382.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=78 valign=top style='width:58.5pt;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=510 valign=top style='width:382.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Other Information.</p>
  </td>
  <td width=78 valign=top style='width:58.5pt;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=510 valign=top style='width:382.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=78 valign=top style='width:58.5pt;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=510 valign=top style='width:382.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Exhibits </p>
  </td>
  <td width=78 valign=top style='width:58.5pt;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=510 valign=top style='width:382.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=78 valign=top style='width:58.5pt;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=510 valign=top style='width:382.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'><b>SIGNATURES</b></p>
  </td>
  <td width=78 valign=top style='width:58.5pt;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=510 valign=top style='width:382.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><b>&nbsp;</b></p>
  </td>
  <td width=78 valign=top style='width:58.5pt;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=510 valign=top style='width:382.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'><b>CERTIFICATIONS</b></p>
  </td>
  <td width=78 valign=top style='width:58.5pt;padding:0in 5.4pt 0in 5.4pt'>

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



<p class=MsoNormal 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>



</div>

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


<div class=WordSection2>









<p class=MsoNormal align=center style='text-align:center'><b><u>PART I. - FINANCIAL INFORMATION</u></b></p>



<p class=MsoNormal><b>ITEM 1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; FINANCIAL
STATEMENTS</b></p>

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

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



<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='border-collapse:collapse'>
 <tr style='height:11.5pt'>
  <td width=407 valign=top style='width:305.4pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal align=center style='margin-left:18.6pt;text-align:center'><b>March 31,</b></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=108 colspan=2 valign=top style='width:81.0pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal align=center style='margin-right:-.9pt;text-align:center'><b>September 30,</b></p>
  </td>
 </tr>
 <tr style='height:11.5pt'>
  <td width=407 valign=top style='width:305.4pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal align=center style='margin-left:18.6pt;text-align:center'><b><u>2011</u></b></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=108 colspan=2 valign=top style='width:81.0pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal align=center style='margin-left:.05in;text-align:center'><b><u>2010</u></b></p>
  </td>
 </tr>
 <tr style='height:11.5pt'>
  <td width=407 valign=top style='width:305.4pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal>CURRENT ASSETS:</p>
  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
 </tr>
 <tr style='height:11.5pt'>
  <td width=407 valign=top style='width:305.4pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash and cash
  equivalents</p>
  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>$987,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>$429,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
 </tr>
 <tr style='height:11.5pt'>
  <td width=407 valign=top style='width:305.4pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Receivables, net of
  allowance for doubtful accounts of $0</p>
  </td>
  <td width=98 valign=bottom style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>131,000&nbsp;</p>
  </td>
  <td width=18 valign=bottom style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>157,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
 </tr>
 <tr style='height:11.5pt'>
  <td width=407 valign=top style='width:305.4pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Prepaid expenses
  and other</p>
  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>106,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>38,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
 </tr>
 <tr style='height:11.5pt'>
  <td width=407 valign=top style='width:305.4pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Inventories</p>
  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>193,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>201,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
 </tr>
 <tr style='height:11.5pt'>
  <td width=407 valign=top style='width:305.4pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Notes receivable</p>
  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3,000&nbsp;</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9,000&nbsp;</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
 </tr>
 <tr style='height:11.5pt'>
  <td width=407 valign=top style='width:305.4pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total current
  assets</p>
  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>1,420,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>834,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
 </tr>
 <tr style='height:11.5pt'>
  <td width=407 valign=top style='width:305.4pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
 </tr>
 <tr style='height:11.5pt'>
  <td width=407 valign=top style='width:305.4pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal>PROPERTY AND EQUIPMENT, at
  cost:</p>
  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
 </tr>
 <tr style='height:11.5pt'>
  <td width=407 valign=top style='width:305.4pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Land and building</p>
  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>5,475,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>5,653,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
 </tr>
 <tr style='height:11.5pt'>
  <td width=407 valign=top style='width:305.4pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Leasehold
  improvements</p>
  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>3,501,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>3,821,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
 </tr>
 <tr style='height:11.5pt'>
  <td width=407 valign=top style='width:305.4pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Fixtures and
  equipment</p>
  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'><u>&nbsp; 7,637,000&nbsp;</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'><u>&nbsp; 8,229,000&nbsp;</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
 </tr>
 <tr style='height:11.5pt'>
  <td width=407 valign=top style='width:305.4pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>16,613,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>17,703,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
 </tr>
 <tr style='height:11.5pt'>
  <td width=407 valign=top style='width:305.4pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
 </tr>
 <tr style='height:11.5pt'>
  <td width=407 valign=top style='width:305.4pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Less accumulated
  depreciation and amortization</p>
  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal align=right style='text-align:right'><u>(12,217,000)</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal align=right style='text-align:right'><u>(12,828,000)</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
 </tr>
 <tr style='height:11.5pt'>
  <td width=407 valign=top style='width:305.4pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>4,396,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>4,875,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
 </tr>
 <tr style='height:11.5pt'>
  <td width=407 valign=top style='width:305.4pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
 </tr>
 <tr style='height:11.5pt'>
  <td width=407 valign=top style='width:305.4pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Assets held for
  sale</p>
  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>1,595,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>2,445,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
 </tr>
 <tr style='height:11.5pt'>
  <td width=407 valign=top style='width:305.4pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
 </tr>
 <tr style='height:11.5pt'>
  <td width=407 valign=top style='width:305.4pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal>OTHER ASSETS:</p>
  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
 </tr>
 <tr style='height:11.5pt'>
  <td width=407 valign=top style='width:305.4pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Notes receivable,
  net of current portion</p>
  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>16,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>10,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
 </tr>
 <tr style='height:11.5pt'>
  <td width=407 valign=top style='width:305.4pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deposits and other
  assets</p>
  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'><u>79,000&nbsp;</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'><u>154,000&nbsp;</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
 </tr>
 <tr style='height:11.5pt'>
  <td width=407 valign=top style='width:305.4pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>95,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>164,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
 </tr>
 <tr style='height:11.5pt'>
  <td width=407 valign=top style='width:305.4pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
 </tr>
 <tr style='height:11.5pt'>
  <td width=407 valign=top style='width:305.4pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal>TOTAL ASSETS</p>
  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'><u>7,506,000&nbsp;</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'><u>8,318,000&nbsp;</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.5pt'>

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



<p class=MsoNormal align=center style='text-align:center'><b>LIABILITIES AND STOCKHOLDERS' EQUITY</b></p>



<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='border-collapse:collapse'>
 <tr>
  <td width=407 valign=top style='width:305.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;CURRENT LIABILITIES:</p>
  </td>
  <td width=98 valign=top style='width:73.5pt;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=92 valign=top style='width:69.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=16 valign=top style='width:12.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=407 valign=top style='width:305.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-left:17.55pt;text-indent:-.25in'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Current maturities of long-term debt, net of
  discounts of</p>
  <p class=MsoNormal style='margin-left:17.55pt;text-indent:-.25in'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $26,000 and $27,000 respectively</p>
  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.05in;text-align:right'>210,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=92 valign=top style='width:69.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:5.1pt;text-align:right'>702,000&nbsp;</p>
  </td>
  <td width=16 valign=top style='width:12.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=407 valign=top style='width:305.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-left:17.55pt;text-indent:-.25in'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts payable</p>
  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.05in;text-align:right'>622,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=92 valign=top style='width:69.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:5.1pt;text-align:right'>716,000&nbsp;</p>
  </td>
  <td width=16 valign=top style='width:12.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=407 valign=top style='width:305.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-left:17.55pt;text-indent:-.25in'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deferred income</p>
  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.05in;text-align:right'>43,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=92 valign=top style='width:69.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:5.1pt;text-align:right'>89,000&nbsp;</p>
  </td>
  <td width=16 valign=top style='width:12.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=407 valign=top style='width:305.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-left:17.55pt;text-indent:-.25in'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Liabilities related to discontinued
  operations</p>
  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.05in;text-align:right'>14,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=92 valign=top style='width:69.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:5.1pt;text-align:right'>20,000&nbsp;</p>
  </td>
  <td width=16 valign=top style='width:12.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=407 valign=top style='width:305.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-left:17.55pt;text-indent:-.25in'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other accrued liabilities</p>
  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.05in;text-align:right'><u>1,104,000&nbsp;</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=92 valign=top style='width:69.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:5.1pt;text-align:right'><u>1,176,000&nbsp;</u></p>
  </td>
  <td width=16 valign=top style='width:12.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=407 valign=top style='width:305.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-left:17.55pt;text-indent:-.25in'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total current liabilities</p>
  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.05in;text-align:right'>1,993,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=92 valign=top style='width:69.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:5.1pt;text-align:right'>2,703,000&nbsp;</p>
  </td>
  <td width=16 valign=top style='width:12.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=407 valign=top style='width:305.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-left:17.55pt;text-indent:-.25in'>LONG-TERM LIABILITIES:</p>
  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:.05in'><u>&nbsp;</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=92 valign=top style='width:69.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=16 valign=top style='width:12.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=407 valign=top style='width:305.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-left:17.55pt;text-indent:-.25in'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Debt, net of current portion and net of
  discounts of $20,000 and $33,000, respectively</p>
  </td>
  <td width=98 valign=bottom style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.05in;text-align:right'>2,042,000&nbsp;</p>
  </td>
  <td width=18 valign=bottom style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=92 valign=bottom style='width:69.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:5.1pt;text-align:right'>3,005,000&nbsp;</p>
  </td>
  <td width=16 valign=top style='width:12.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=407 valign=top style='width:305.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-left:17.55pt;text-indent:-.25in'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Liabilities related to discontinued
  operations</p>
  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.05in;text-align:right'>89,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=92 valign=top style='width:69.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:5.1pt;text-align:right'>123,000&nbsp;</p>
  </td>
  <td width=16 valign=top style='width:12.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=407 valign=top style='width:305.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-left:17.55pt;text-indent:-.25in'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deferred liabilities</p>
  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.05in;text-align:right'><u>&nbsp;&nbsp;&nbsp; 689,000&nbsp;</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=92 valign=top style='width:69.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:5.1pt;text-align:right'><u>&nbsp;&nbsp;&nbsp; 793,000&nbsp;</u></p>
  </td>
  <td width=16 valign=top style='width:12.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=407 valign=top style='width:305.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-left:17.55pt;text-indent:-.25in'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total long-term liabilities</p>
  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.05in;text-align:right'>2,820,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=92 valign=top style='width:69.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:5.1pt;text-align:right'>3,921,000&nbsp;</p>
  </td>
  <td width=16 valign=top style='width:12.0pt;padding:0in 5.4pt 0in 5.4pt'>

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

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

<p class=MsoList2 align=center style='margin-left:0in;text-align:center;
text-indent:0in'>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'>










<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 BALANCE SHEETS (Continued)</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=643
 style='border-collapse:collapse'>
 <tr style='height:.1in'>
  <td width=383 valign=top style='width:287.4pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=110 valign=top style='width:82.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>
  <p class=MsoNormal align=right style='text-align:right'><b>March 31,</b></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=132 colspan=2 valign=top style='width:99.0pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>
  <p class=MsoNormal align=center style='margin-left:17.1pt;text-align:center'><b>September 30,</b></p>
  </td>
 </tr>
 <tr style='height:.1in'>
  <td width=383 valign=top style='width:287.4pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=110 valign=top style='width:82.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>
  <p class=MsoNormal align=center style='margin-left:24.6pt;text-align:center'><b><u>2011</u></b></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=132 colspan=2 valign=top style='width:99.0pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>
  <p class=MsoNormal align=center style='margin-top:0in;margin-right:-1.7pt;
  margin-bottom:0in;margin-left:12.6pt;margin-bottom:.0001pt;text-align:center'><b><u>2010</u></b></p>
  </td>
 </tr>
 <tr>
  <td width=383 valign=top style='width:287.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>STOCKHOLDERS' EQUITY:</p>
  </td>
  <td width=110 style='width:82.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </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'>

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

  </td>
 </tr>
 <tr>
  <td width=383 valign=top style='width:287.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Non-controlling interest</p>
  </td>
  <td width=110 valign=top style='width:82.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>210,000&nbsp;</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 align=right style='margin-right:.7pt;text-align:right'>274,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=383 valign=top style='width:287.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Preferred stock, $.01 par
  value;</p>
  </td>
  <td width=110 valign=top style='width:82.5pt;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>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=383 valign=top style='width:287.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5,000,000 shares
  authorized, none issued and outstanding</p>
  </td>
  <td width=110 valign=top style='width:82.5pt;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>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=383 valign=top style='width:287.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; as of March 31, 2011
  and September 30, 2010</p>
  </td>
  <td width=110 valign=bottom style='width:82.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>-&nbsp;</p>
  </td>
  <td width=18 valign=top 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 align=right style='margin-right:.7pt;text-align:right'>-&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=383 valign=top style='width:287.4pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=110 valign=top style='width:82.5pt;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>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=383 valign=top style='width:287.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Common stock, $.001 par
  value; 50,000,000 shares authorized</p>
  </td>
  <td width=110 valign=top style='width:82.5pt;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>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=383 valign=top style='width:287.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2,726,214 and
  1,299,520 shares issued and outstanding</p>
  </td>
  <td width=110 valign=top style='width:82.5pt;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>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=383 valign=top style='width:287.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-left:17.1pt;text-indent:-17.1pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; as of March 31, 2011 and September 30, 2010,
  respectively</p>
  </td>
  <td width=110 valign=bottom style='width:82.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>8,000&nbsp;</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 align=right style='margin-right:.7pt;text-align:right'>4,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr style='height:4.0pt'>
  <td width=383 valign=top style='width:287.4pt;padding:0in 5.4pt 0in 5.4pt;
  height:4.0pt'>

  </td>
  <td width=110 valign=top style='width:82.5pt;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>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:4.0pt'>

  </td>
 </tr>
 <tr>
  <td width=383 valign=top style='width:287.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Capital contributed in excess
  of par value</p>
  </td>
  <td width=110 valign=top style='width:82.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>19,946,000&nbsp;</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 align=right style='margin-right:.7pt;text-align:right'>18,153,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=383 valign=top style='width:287.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Accumulated deficit</p>
  </td>
  <td width=110 valign=top style='width:82.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'><u>(17,471,000)</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 align=right style='text-align:right'><u>(16,737,000)</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=383 valign=top style='width:287.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total stockholders'
  equity</p>
  </td>
  <td width=110 valign=top style='width:82.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>2,693,000&nbsp;</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 align=right style='margin-right:.7pt;text-align:right'>1,694,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=383 valign=top style='width:287.4pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=110 valign=top style='width:82.5pt;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>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=383 valign=top style='width:287.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>TOTAL LIABILITIES AND
  STOCKHOLDERS' EQUITY</p>
  </td>
  <td width=110 valign=top style='width:82.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'><u>$7,506,000&nbsp;</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 align=right style='margin-right:.7pt;text-align:right'><u>$8,318,000&nbsp;</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

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



<p class=MsoNormal 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>



</div>

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


<div class=WordSection3>









<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>

<p class=MsoNormal><b>&nbsp;</b></p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='margin-left:5.4pt;border-collapse:collapse'>
 <tr style='height:.1in'>
  <td width=408 valign=top style='width:4.25in;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=212 colspan=3 valign=top style='width:159.0pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>
  <p class=MsoNormal align=center style='margin-top:0in;margin-right:8.1pt;
  margin-bottom:0in;margin-left:30.6pt;margin-bottom:.0001pt;text-align:center'><b>Three Months Ended</b></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=210 colspan=3 valign=top style='width:157.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>
  <p class=MsoNormal align=center style='margin-top:0in;margin-right:8.1pt;
  margin-bottom:0in;margin-left:30.6pt;margin-bottom:.0001pt;text-align:center'><b>Six Months Ended</b></p>
  </td>
 </tr>
 <tr style='height:.1in'>
  <td width=408 valign=top style='width:4.25in;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=212 colspan=3 valign=top style='width:159.0pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>
  <p class=MsoNormal align=center style='margin-top:0in;margin-right:8.1pt;
  margin-bottom:0in;margin-left:30.6pt;margin-bottom:.0001pt;text-align:center'><b>March 31,</b></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=210 colspan=3 valign=top style='width:157.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>
  <p class=MsoNormal align=center style='margin-top:0in;margin-right:8.1pt;
  margin-bottom:0in;margin-left:30.6pt;margin-bottom:.0001pt;text-align:center'><b>March 31,</b></p>
  </td>
 </tr>
 <tr style='height:.1in'>
  <td width=408 valign=top style='width:4.25in;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>
  <p class=MsoNormal align=center style='margin-left:12.6pt;text-align:center'><b><u>2011</u></b></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>
  <p class=MsoNormal align=center style='margin-left:.9pt;text-align:center'><b><u>2010</u></b></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>
  <p class=MsoNormal align=center style='text-align:center'><b><u>2011</u></b></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>
  <p class=MsoNormal align=center style='margin-left:-.9pt;text-align:center'><b><u>2010</u></b></p>
  </td>
 </tr>
 <tr>
  <td width=408 valign=top style='width:4.25in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>NET REVENUES:</p>
  </td>
  <td width=96 valign=top style='width:1.0in;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=98 valign=top style='width:73.5pt;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=94 valign=top style='width:70.5pt;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=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=408 valign=top style='width:4.25in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&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 align=right style='margin-right:.7pt;text-align:right'>$4,607,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>$4,675,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>$9,589,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>$9,313,000&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=408 valign=top style='width:4.25in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&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 align=right style='margin-right:.7pt;text-align:right'><u>&nbsp;&nbsp;&nbsp;&nbsp; 96,000&nbsp;</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'><u>&nbsp;&nbsp;&nbsp;&nbsp; 111,000&nbsp;</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'><u>&nbsp;&nbsp;&nbsp;&nbsp; 199,000&nbsp;</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 224,000&nbsp;</u></p>
  </td>
 </tr>
 <tr>
  <td width=408 valign=top style='width:4.25in;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; Total
  revenues</p>
  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>4,703,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>4,786,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>9,788,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>9,537,000&nbsp;</p>
  </td>
 </tr>
 <tr style='height:.1in'>
  <td width=408 valign=top style='width:4.25in;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
 </tr>
 <tr>
  <td width=408 valign=top style='width:4.25in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>RESTAURANT OPERATING COSTS:</p>
  </td>
  <td width=96 valign=top style='width:1.0in;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=98 valign=top style='width:73.5pt;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=94 valign=top style='width:70.5pt;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=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr style='height:.1in'>
  <td width=408 valign=top style='width:4.25in;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&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 align=right style='margin-right:.7pt;text-align:right'>1,660,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>1,647,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>3,418,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>3,182,000&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=408 valign=top style='width:4.25in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&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 align=right style='margin-right:.7pt;text-align:right'>1,725,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>1,793,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>3,484,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>3,532,000&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=408 valign=top style='width:4.25in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&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 align=right style='margin-right:.7pt;text-align:right'>1,020,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>1,139,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>2,104,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>2,263,000&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=408 valign=top style='width:4.25in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&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 align=right style='margin-right:.7pt;text-align:right'><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 203,000&nbsp;</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'><u>&nbsp;&nbsp;&nbsp; 240,000&nbsp;</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'><u>&nbsp;&nbsp;&nbsp;&nbsp; 408,000&nbsp;</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 472,000&nbsp;</u></p>
  </td>
 </tr>
 <tr>
  <td width=408 valign=top style='width:4.25in;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; 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 align=right style='margin-right:.7pt;text-align:right'>4,608,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>4,819,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>9,414,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>9,449,000&nbsp;</p>
  </td>
 </tr>
 <tr style='height:.1in'>
  <td width=408 valign=top style='width:4.25in;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=96 style='width:1.0in;padding:0in 5.4pt 0in 5.4pt;height:.1in'>

  </td>
  <td width=18 style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;height:.1in'>

  </td>
  <td width=98 style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt;height:.1in'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=94 style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt;height:.1in'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=98 style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt;height:.1in'>

  </td>
 </tr>
 <tr>
  <td width=408 valign=top style='width:4.25in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&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 align=right style='margin-right:.7pt;text-align:right'>332,000&nbsp;</p>
  </td>
  <td width=18 style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=98 style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>365,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>677,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=98 style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>735,000&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=408 valign=top style='width:4.25in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&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 align=right style='margin-right:.7pt;text-align:right'>198,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>280,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>414,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>550,000&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=408 valign=top style='width:4.25in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&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 align=right style='margin-right:.7pt;text-align:right'>19,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>35,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>37,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>65,000&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=408 valign=top style='width:4.25in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Gain on sale of
  restaurant buildings and equipment</p>
  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'><u>(&nbsp; 86,000)</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'><u>(&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=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'><u>(&nbsp;&nbsp;&nbsp; 98,000)</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'><u>(&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 15,000)</u></p>
  </td>
 </tr>
 <tr>
  <td width=408 valign=bottom style='width:4.25in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>LOSS FROM OPERATIONS</p>
  </td>
  <td width=96 valign=bottom style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>( 368,000)</p>
  </td>
  <td width=18 valign=bottom style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=98 valign=bottom style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>( 705,000)</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=bottom style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>(&nbsp; 656,000)</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=98 valign=bottom style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>( 1,247,000)</p>
  </td>
 </tr>
 <tr style='height:.1in'>
  <td width=408 valign=top style='width:4.25in;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
 </tr>
 <tr>
  <td width=408 valign=top style='width:4.25in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>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=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;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=94 valign=top style='width:70.5pt;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=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=408 valign=top style='width:4.25in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Unrealized income
  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 align=right style='margin-right:.7pt;text-align:right'>10,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>10,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>23,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>10,000&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=408 valign=top style='width:4.25in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest expense,
  net</p>
  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'><u>(57,000)</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'><u>(171,000)</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'><u>(&nbsp; 168,000)</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'><u>(240,000)</u></p>
  </td>
 </tr>
 <tr>
  <td width=408 valign=top style='width:4.25in;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; 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 align=right style='text-align:right'><u>(47,000)</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'><u>(161,000)</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'><u>(&nbsp; 145,000)</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'><u>(230,000)</u></p>
  </td>
 </tr>
 <tr style='height:.1in'>
  <td width=408 valign=top style='width:4.25in;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
 </tr>
 <tr>
  <td width=408 valign=top style='width:4.25in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>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 align=right style='text-align:right'><u>($415,000)</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'><u>($&nbsp;&nbsp; 866,000)</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'><u>($801,000)</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'><u>( $1,477,000)</u></p>
  </td>
 </tr>
 <tr style='height:.1in'>
  <td width=408 valign=top style='width:4.25in;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
 </tr>
 <tr>
  <td width=408 valign=top style='width:4.25in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income (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 align=right style='margin-right:.7pt;text-align:right'><u>&nbsp;&nbsp;&nbsp;&nbsp; 27,000&nbsp;</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'><u>(&nbsp;&nbsp;&nbsp;&nbsp; 400,000)</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'><u>&nbsp;&nbsp;&nbsp;&nbsp; 24,000&nbsp;</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'><u>(&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 471,000)</u></p>
  </td>
 </tr>
 <tr style='height:.1in'>
  <td width=408 valign=top style='width:4.25in;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
 </tr>
 <tr>
  <td width=408 valign=top style='width:4.25in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>NET LOSS</p>
  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'><u>($388,000)</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'><u>($1,266,000)</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'><u>($777,000)</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'><u>($1,948,000)</u></p>
  </td>
 </tr>
 <tr>
  <td width=408 valign=top style='width:4.25in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income (expense)
  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 align=right style='text-align:right'><u>(&nbsp;&nbsp;&nbsp; 11,000)</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 62,000&nbsp;</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'><u>(&nbsp;&nbsp;&nbsp; 27,000)</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 110,000&nbsp;</u></p>
  </td>
 </tr>
 <tr>
  <td width=408 valign=top style='width:4.25in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>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 align=right style='text-align:right'>($399,000)</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>($1,204,000)</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>($804,000)</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>($1,838,000)</p>
  </td>
 </tr>
 <tr style='height:.1in'>
  <td width=408 valign=top style='width:4.25in;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
 </tr>
 <tr>
  <td width=408 valign=top style='width:4.25in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>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'>

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

  </td>
  <td width=98 valign=top style='width:73.5pt;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=94 valign=top style='width:70.5pt;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=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=408 valign=top style='width:4.25in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Continuing operations</p>
  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>($.15)</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>($.67)</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>($.37)</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>($1.14)</p>
  </td>
 </tr>
 <tr>
  <td width=408 valign=top style='width:4.25in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Discontinued operations</p>
  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>$.01&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>($.31)</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>$.01&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>($.36)</p>
  </td>
 </tr>
 <tr>
  <td width=408 valign=top style='width:4.25in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Net loss applicable to
  common shareholders</p>
  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>($.15)</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>($.93)</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>($.37)</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>($1.41)</p>
  </td>
 </tr>
 <tr style='height:.1in'>
  <td width=408 valign=top style='width:4.25in;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=98 valign=top style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
 </tr>
 <tr>
  <td width=408 valign=top style='width:4.25in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>WEIGHTED AVERAGE COMMON
  SHARES AND EQUIVALENTS USED IN PER SHARE CALCULATION:</p>
  <p class=MsoNormal>BASIC AND DILUTED</p>
  </td>
  <td width=96 valign=bottom style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>2,726,214&nbsp;</p>
  </td>
  <td width=18 valign=bottom style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=98 valign=bottom style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>1,299,520&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=bottom style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>2,153,938&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=98 valign=bottom style='width:73.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>1,299,520&nbsp;</p>
  </td>
 </tr>
</table>

<p class=MsoList2 align=center style='margin-left:0in;text-align:center;
text-indent:0in'>5</p>



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

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

</div>



</div>

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


<div class=WordSection4>









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

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

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='margin-left:-17.1pt;border-collapse:collapse'>
 <tr>
  <td width=446 valign=top style='width:334.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=200 colspan=3 valign=top style='width:150.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='margin-top:0in;margin-right:-2.4pt;
  margin-bottom:0in;margin-left:6.6pt;margin-bottom:.0001pt;text-align:center'><b>Six Months Ended</b></p>
  </td>
 </tr>
 <tr>
  <td width=446 valign=top style='width:334.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=200 colspan=3 valign=top style='width:150.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='margin-left:15.6pt;text-align:center'><b>March 31,</b></p>
  </td>
 </tr>
 <tr>
  <td width=446 valign=top style='width:334.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=88 valign=top style='width:66.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <h3 align=center style='margin-top:0in;margin-right:-5.4pt;margin-bottom:
  0in;margin-left:17.1pt;margin-bottom:.0001pt;text-align:center'><b><u>2011</u></b></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=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <h3 align=center style='margin-top:0in;margin-right:0in;margin-bottom:0in;
  margin-left:12.6pt;margin-bottom:.0001pt;text-align:center'><b><u>2010</u></b></h3>
  </td>
 </tr>
 <tr>
  <td width=446 valign=top style='width:334.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>CASH FLOWS FROM OPERATING ACTIVITIES:</p>
  </td>
  <td width=88 valign=top style='width:66.0pt;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=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=446 valign=top style='width:334.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net loss</p>
  </td>
  <td width=88 valign=top style='width:66.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>($777,000)</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>($1,948,000)</p>
  </td>
 </tr>
 <tr>
  <td width=446 valign=top style='width:334.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income (loss) from
  discontinued operations </p>
  </td>
  <td width=88 valign=top style='width:66.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'><u>&nbsp;&nbsp;&nbsp; 24,000&nbsp;</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'><u>&nbsp;&nbsp;&nbsp; (471,000)</u></p>
  </td>
 </tr>
 <tr>
  <td width=446 valign=top style='width:334.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net loss from
  continuing operations</p>
  </td>
  <td width=88 valign=top style='width:66.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>(801,000)</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>(1,477,000)</p>
  </td>
 </tr>
 <tr>
  <td width=446 valign=top style='width:334.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=88 valign=top style='width:66.0pt;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=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=446 valign=top style='width:334.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Adjustments to
  reconcile net loss to net cash used in operating activities:</p>
  </td>
  <td width=88 valign=top style='width:66.0pt;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=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=446 valign=top style='width:334.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Depreciation
  and amortization</p>
  </td>
  <td width=88 valign=top style='width:66.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>408,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>472,000&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=446 valign=top style='width:334.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Amortization of
  debt issuance costs</p>
  </td>
  <td width=88 valign=top style='width:66.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>35,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>90,000&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=446 valign=top style='width:334.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Stock based
  compensation expense</p>
  </td>
  <td width=88 valign=top style='width:66.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>30,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>44,000&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=446 valign=top style='width:334.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Unrealized gain
  on interest rate swap</p>
  </td>
  <td width=88 valign=top style='width:66.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>(23,000)</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>(10,000)</p>
  </td>
 </tr>
 <tr>
  <td width=446 valign=top style='width:334.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accretion of
  deferred rent</p>
  </td>
  <td width=88 valign=top style='width:66.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>(31,000)</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>1,000&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=446 valign=top style='width:334.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Recognition of
  deferred gain on sale of restaurant buildings</p>
  </td>
  <td width=88 valign=top style='width:66.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>(79,000)</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>(15,000)</p>
  </td>
 </tr>
 <tr>
  <td width=446 valign=top style='width:334.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Changes in
  operating assets and liabilities:</p>
  </td>
  <td width=88 valign=top style='width:66.0pt;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=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=446 valign=top style='width:334.5pt;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; (Increase)
  decrease in:</p>
  </td>
  <td width=88 valign=top style='width:66.0pt;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=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=446 valign=top style='width:334.5pt;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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Receivables
  and other</p>
  </td>
  <td width=88 valign=top style='width:66.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>26,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>(74,000)</p>
  </td>
 </tr>
 <tr>
  <td width=446 valign=top style='width:334.5pt;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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Inventories</p>
  </td>
  <td width=88 valign=top style='width:66.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>8,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>19,000&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=446 valign=top style='width:334.5pt;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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deposits
  and other</p>
  </td>
  <td width=88 valign=top style='width:66.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>(107,000)</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>(49,000)</p>
  </td>
 </tr>
 <tr style='height:4.0pt'>
  <td width=446 valign=top style='width:334.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:4.0pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (Decrease)
  increase in:</p>
  </td>
  <td width=88 valign=top style='width:66.0pt;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=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:4.0pt'>

  </td>
 </tr>
 <tr>
  <td width=446 valign=top style='width:334.5pt;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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts
  payable</p>
  </td>
  <td width=88 valign=top style='width:66.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>(94,000)</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>341,000&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=446 valign=top style='width:334.5pt;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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accrued
  liabilities and deferred income</p>
  </td>
  <td width=88 valign=top style='width:66.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'><u>&nbsp;&nbsp;&nbsp; 38,000&nbsp;</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'><u>&nbsp;&nbsp;&nbsp; 81,000&nbsp;</u></p>
  </td>
 </tr>
 <tr>
  <td width=446 valign=top style='width:334.5pt;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; Net cash
  used in operating activities from continuing operations</p>
  </td>
  <td width=88 valign=top style='width:66.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>(590,000)</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>(577,000)</p>
  </td>
 </tr>
 <tr>
  <td width=446 valign=top style='width:334.5pt;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; Net cash
  used in operating activities from discontinued operations</p>
  </td>
  <td width=88 valign=top style='width:66.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'><u>(&nbsp; 4,000)</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'><u>(&nbsp; 93,000)</u></p>
  </td>
 </tr>
 <tr>
  <td width=446 valign=top style='width:334.5pt;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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net
  cash used in operating activities</p>
  </td>
  <td width=88 valign=top style='width:66.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>(594,000)</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>(670,000)</p>
  </td>
 </tr>
 <tr>
  <td width=446 valign=top style='width:334.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=88 valign=top style='width:66.0pt;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=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=446 valign=top style='width:334.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>CASH FLOWS USED IN
  INVESTING ACTIVITIES</p>
  </td>
  <td width=88 valign=top style='width:66.0pt;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=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=446 valign=top style='width:334.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Proceeds from the
  sale of fixed assets</p>
  </td>
  <td width=88 valign=top style='width:66.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>946,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>-&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=446 valign=top style='width:334.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Payments for the
  purchase of property and equipment</p>
  </td>
  <td width=88 valign=top style='width:66.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>(10,000)</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>(24,000)</p>
  </td>
 </tr>
 <tr>
  <td width=446 valign=top style='width:334.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Payments received on
  loans to franchisees and to others</p>
  </td>
  <td width=88 valign=top style='width:66.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -&nbsp;</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'><u>&nbsp;&nbsp;&nbsp; 8,000&nbsp;</u></p>
  </td>
 </tr>
 <tr>
  <td width=446 valign=top style='width:334.5pt;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;&nbsp;&nbsp; Net
  cash provided by (used in) investing activities</p>
  </td>
  <td width=88 valign=top style='width:66.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>936,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>(16,000)</p>
  </td>
 </tr>
 <tr>
  <td width=446 valign=top style='width:334.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=88 valign=top style='width:66.0pt;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=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=446 valign=top style='width:334.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>CASH FLOWS FROM FINANCING
  ACTIVITIES:</p>
  </td>
  <td width=88 valign=top style='width:66.0pt;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=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=446 valign=top style='width:334.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Proceeds from common
  stock sale</p>
  </td>
  <td width=88 valign=top style='width:66.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>1,727,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>-&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=446 valign=top style='width:334.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Principal payments on
  notes payable and long-term debt</p>
  </td>
  <td width=88 valign=top style='width:66.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>(1,490,000)</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>(67,000)</p>
  </td>
 </tr>
 <tr>
  <td width=446 valign=top style='width:334.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Borrowings on notes
  payable and long-term debt</p>
  </td>
  <td width=88 valign=top style='width:66.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>-&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>400,000&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=446 valign=top style='width:334.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:-9.9pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Distributions,
  net of contributions paid to non-controlling interests</p>
  </td>
  <td width=88 valign=top style='width:66.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'><u>(21,000)</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'><u>&nbsp;&nbsp;&nbsp; 71,000&nbsp;</u></p>
  </td>
 </tr>
 <tr>
  <td width=446 valign=top style='width:334.5pt;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;&nbsp;&nbsp; Net
  cash provided by financing activities</p>
  </td>
  <td width=88 valign=top style='width:66.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'><u>216,000&nbsp;</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'><u>&nbsp; 404,000&nbsp;</u></p>
  </td>
 </tr>
 <tr>
  <td width=446 valign=top style='width:334.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=88 valign=top style='width:66.0pt;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=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=446 valign=top style='width:334.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>NET CHANGE IN CASH AND CASH
  EQUIVALENTS</p>
  </td>
  <td width=88 valign=top style='width:66.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'>558,000&nbsp;</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>(282,000)</p>
  </td>
 </tr>
 <tr>
  <td width=446 valign=top style='width:334.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=88 valign=top style='width:66.0pt;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=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=446 valign=top style='width:334.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>CASH AND CASH EQUIVALENTS,
  beginning of period</p>
  </td>
  <td width=88 valign=top style='width:66.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'><u>429,000&nbsp;</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'><u>815,000&nbsp;</u></p>
  </td>
 </tr>
 <tr>
  <td width=446 valign=top style='width:334.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=88 valign=top style='width:66.0pt;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=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=446 valign=top style='width:334.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>CASH AND CASH EQUIVALENTS,
  end of period</p>
  </td>
  <td width=88 valign=top style='width:66.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'><u>$987,000&nbsp;</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'><u>$533,000&nbsp;</u></p>
  </td>
 </tr>
 <tr>
  <td width=446 valign=top style='width:334.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=88 valign=top style='width:66.0pt;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=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=446 valign=top style='width:334.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>SUPPLEMENTAL DISCLOSURES OF
  CASH FLOW INFORMATION:</p>
  </td>
  <td width=88 valign=top style='width:66.0pt;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=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=446 valign=top style='width:334.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash paid for
  interest</p>
  </td>
  <td width=88 valign=top style='width:66.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'><u>&nbsp; 141,000&nbsp;</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'><u>146,000&nbsp;</u></p>
  </td>
 </tr>
 <tr>
  <td width=446 valign=top style='width:334.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-cash fair value
  of warrants &amp; beneficial conversion feature</p>
  </td>
  <td width=88 valign=top style='width:66.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; - &nbsp;</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=94 valign=top style='width:70.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:.7pt;text-align:right'><u>277,000&nbsp;</u></p>
  </td>
 </tr>
</table>



<p class=MsoNormal 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>

</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>NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</b></p>

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

<p class=MsoNormal><b>&nbsp;</b></p>

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

<p class=MsoBodyText align=left style='margin-right:0in;text-align:left;
line-height:normal'><b>&nbsp;</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, 2011 and the results of its operations and its cash
flows for the three and six month periods ended March 31, 2011. Operating
results for the three and six month periods ended March 31, 2011 are not
necessarily indicative of the results that may be expected for the year ending
September 30, 2011. The condensed consolidated balance sheet as of September
30, 2010 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, 2010.</p>



<p class=MsoNormal><strong>Note 2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Recent
Developments</strong></p>

<p class=MsoNormal><strong>&nbsp;</strong></p>

<p class=MsoNormal style='text-align:justify'>We
entered into a purchase and sale agreement for the sale of two company-owned
restaurants in Colorado Springs, Colorado that was effective February 1, 2011.
The sale of one restaurant occurred in February, 2011 and the sale of the
second restaurant is anticipated to occur on or prior to May 31, 2011. The net
proceeds from the sale of the first restaurant in February were $99,000 and
resulted in a gain on the sale of $71,000. The net proceeds for the sale of the
second restaurant are estimated to be $169,000 with an estimated gain on the
sale of $62,000.</p>



<p class=MsoNormal style='text-align:justify'>As
previously disclosed in the Company's current report on Form 8-K filed December
17, 2010, we entered into a new Credit and Loan Agreement with Wells Fargo Bank
that modified the loan covenants and provided additional collateral to Wells
Fargo for the remaining loan balance of $642,142. In addition we are using
$90,000 of the proceeds from the sale of the two company-owned restaurants in
Colorado Springs, Colorado to further reduce the note payable over the next ten
months and thereby releasing certain collateral.</p>



<p class=MsoNormal style='text-align:justify'>On
December 31, 2010, following approval by the Company's stockholders at a
special meeting on December 31, 2010, the Company effected a one-for-three
reverse stock split of its issued and outstanding Common Stock. All references
to numbers of shares and share prices in the following paragraphs and
throughout Items 1 and 2 are stated at post-reverse split amounts.</p>



<p class=MsoNormal style='text-align:justify'>As
previously disclosed in the Company's current report on Form 8-K filed on November
3, 2010, the Company entered into a Securities Purchase Agreement (the
&quot;Purchase Agreement&quot;), dated October 29, 2010, with Small Island Investments
Limited, a Bermuda corporation (&quot;SII&quot;), under which the Company agreed to sell,
and SII agreed to purchase, 1,400,000 shares (the &quot;Shares&quot;) of the Company's
common stock, par value $0.001 per share (the &quot;Common Stock&quot;), at a purchase
price of $1.50 per share, or an aggregate of $2,100,000 (the &quot;SII Investment
Transaction&quot;).&nbsp; The Purchase Agreement was amended on December 13, 2010 to
clarify the scope of SII's director designation rights following the Closing.</p>



<p class=MsoNormal style='text-align:justify'>On
December 13, 2010, following approval of the SII Investment Transaction and
related matters by the Company's stockholders at a special meeting called for
such purposes (the &quot;Special Meeting&quot;), the Company and SII completed the
issuance and sale of the Shares to SII.&nbsp; On December 13, 2010, the Company and
SII also entered into a Registration Rights Agreement, pursuant to which the
Company granted SII certain registration rights with respect to resale of the
Shares.</p>



<p class=MsoNormal style='text-align:justify'>The
completion of the SII Investment Transaction resulted in a change of control of
the Company, with SII becoming the beneficial owner of approximately 51.4
percent of the Company's outstanding Common Stock.&nbsp; In addition, pursuant to
the Purchase Agreement, SII designated four new members of the Company's Board
of Directors to replace Richard J. Stark, Alan A. Teran, Ron Goodson and David
Grissen, all of whom resigned as directors effective upon the closing of the
SII Investment Transaction.</p>



<p class=MsoNormal align=center style='text-align:center'>7</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='text-align:justify'>On
February 1, 2010, the Company and GTDT entered into a loan agreement with W
Capital, Inc. (&quot;W Capital&quot;), John T. McDonald (&quot;McDonald&quot;) and Golden Bridge,
LLC (&quot;Golden Bridge&quot;), pursuant to which the lenders made loans totaling
$400,000 to be used for restaurant marketing and other working capital uses of
GTDT.&nbsp; The loan agreement was subsequently amended as of April 1, 2010 to
remove Golden Bridge as a lender, replacing it with additional loans from W
Capital and McDonald.&nbsp; The aggregate principal amount owing to W Capital and
McDonald was paid out of the proceeds of the SII Investment Transaction.&nbsp; In
addition, the accrued interest on such loans through December 13, 2010 of
$39,715 was converted into an aggregate of 26,477 shares of our Common Stock.</p>



<p class=MsoNormal style='text-align:justify'>In
connection with the loans, the Company issued warrants to W Capital and
McDonald which entitle them at any time prior to December 13, 2013 to purchase
up to an aggregate of 33,334 shares of our Common Stock at an exercise price of
25% less than the average price of our Common Stock during the 20 days prior to
exercise, but at not less than $2.25 per share nor more than $3.24 per share.&nbsp;
These warrants remain outstanding and exercisable in accordance with their
terms.</p>



<p class=MsoNormal style='text-align:justify'>Proceeds
of the SII transaction were also used to repay the outstanding principal amount
of $185,000 due to Golden Bridge on a loan Golden Bridge made to the Company in
2009, to reduce our accounts payable and accrued liabilities, to pay the
expenses related to the SII Investment Transaction, and to increase our working
capital.&nbsp; The SII Investment Transaction also allowed us to renegotiate the
terms and covenants of our loan with Wells Fargo Bank, N.A. (&quot;Wells Fargo&quot;) and
to regain compliance with certain financial loan covenants that had been in
default.&nbsp; We had never been in any payment default under the loan and Wells
Fargo agreed to accept additional equipment collateral in exchange for
modifying the covenants of the loan without affecting our interest rate or
repayment term.&nbsp;&nbsp; As a condition to the closing of the SII Investment
Transaction, we entered into a new Credit Agreement and Promissory Note with
Wells Fargo effective as of December 13, 2010.&nbsp; The prior loan covenant defaults
had caused us to show the entire balance of the loan as a short term liability;
however, as of March 31, 2011, it is primarily classified as a long term note
payable under its terms.</p>



<p class=MsoNormal style='text-align:justify'>SII's
affiliates have ownership interests in other full service restaurant chains
that generate approximately $75 million in annual revenues.&nbsp;&nbsp; The SII
Investment Transaction may position the Company to pursue a larger platform in
the restaurant business through acquisitions, new investment and improved
economies of scale.&nbsp; However, there can be no assurance that any acquisitions
or additional investment will occur.</p>



<p class=MsoNormal style='text-align:justify'>The
shorter term objective for the Good Times brand will be to focus on maximizing
its profitability and development in our core market of Colorado.&nbsp; In fiscal 2010,
we closed two Company-operated restaurants and a franchisee closed one
restaurant.&nbsp; We continue to evaluate the near term realizable asset value of
each restaurant compared to its longer term cash flow value and we may choose
to sell, sublease or close additional lower performing restaurants in fiscal
2011as we position the company for growth in new store development.&nbsp; We will
require additional capital sources to develop additional company owned
restaurants.</p>



<p class=MsoNormal><strong>Note 3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Discontinued
Operations</strong></p>



<p class=MsoNormal style='text-align:justify'>Discontinued
operations are presented in accordance with FASB ASC 205-20, Presentation of
Financial Statements. During fiscal 2010 we closed two locations: one
dual-branded restaurant in Commerce City, Colorado in March 2010 and one
co-developed restaurant in Denver, Colorado in June 2010. Fixed assets and
associated accumulated depreciation of $406,000 related to discontinued
operations are included in the property and equipment of our condensed
consolidated balance sheet which are related to the Commerce City location.
Current and long-term liabilities related to discontinued operations relate to
the future estimated lease obligations of the Commerce City location.</p>



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



<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='margin-left:5.4pt;border-collapse:collapse'>
 <tr style='height:1.0pt'>
  <td width=240 valign=top style='width:2.5in;padding:0in 5.4pt 0in 5.4pt;
  height:1.0pt'>

  </td>
  <td width=186 colspan=3 valign=bottom style='width:139.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:1.0pt'>
  <p class=MsoNormal align=center style='text-align:center'>Three Months Ended March 31,</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:1.0pt'>

  </td>
  <td width=174 colspan=3 valign=top style='width:130.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:1.0pt'>
  <p class=MsoNormal align=center style='text-align:center'>Six Months Ended March 31,</p>
  </td>
 </tr>
 <tr style='height:.1in'>
  <td width=240 valign=top style='width:2.5in;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=78 valign=bottom style='width:58.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>
  <p class=MsoNormal align=center style='margin-right:5.4pt;text-align:center'>&nbsp;&nbsp;&nbsp; <u>2011</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>
  <p class=MsoNormal align=right style='margin-left:3.25pt;text-align:right'><u>&nbsp;</u></p>
  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>
  <p class=MsoNormal align=center style='margin-top:0in;margin-right:8.1pt;
  margin-bottom:0in;margin-left:7.6pt;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;
  height:.1in'>
  <p class=MsoNormal align=right style='text-align:right'><u>&nbsp;</u></p>
  </td>
  <td width=72 valign=top style='width:.75in;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>
  <p class=MsoNormal align=center style='margin-right:4.5pt;text-align:center'>&nbsp;&nbsp;&nbsp;&nbsp; <u>2011</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>
  <p class=MsoNormal align=right style='margin-left:2.9pt;text-align:right'><u>&nbsp;</u></p>
  </td>
  <td width=84 valign=top style='width:63.0pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>
  <p class=MsoNormal align=center style='margin-left:11.2pt;text-align:center'><u>2010</u></p>
  </td>
 </tr>
 <tr style='height:.1in'>
  <td width=240 valign=top style='width:2.5in;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>
  <p class=MsoNormal style='text-align:justify'>Results
  of operations and lease obligations</p>
  </td>
  <td width=78 valign=bottom style='width:58.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>
  <p class=MsoNormal align=right style='margin-right:5.4pt;text-align:right'>($4,000)</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>
  <p class=MsoNormal align=right style='margin-right:8.1pt;text-align:right'>($66,000)</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=72 valign=top style='width:.75in;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>
  <p class=MsoNormal align=right style='margin-left:-5.4pt;text-align:right'>($7,000)</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=84 valign=bottom style='width:63.0pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>
  <p class=MsoNormal align=right style='margin-left:2.9pt;text-align:right'>($137,000)</p>
  </td>
 </tr>
 <tr style='height:.1in'>
  <td width=240 valign=top style='width:2.5in;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>
  <p class=MsoNormal style='text-align:justify'>Future
  lease obligations, fair value</p>
  </td>
  <td width=78 valign=bottom style='width:58.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>
  <p class=MsoNormal align=right style='margin-right:5.4pt;text-align:right'>31,000</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>
  <p class=MsoNormal align=right style='margin-right:8.1pt;text-align:right'>(117,000)</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=72 valign=bottom style='width:.75in;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>
  <p class=MsoNormal align=right style='margin-right:.05in;text-align:right'>31,000</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=84 valign=bottom style='width:63.0pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>
  <p class=MsoNormal align=right style='margin-left:2.9pt;text-align:right'>(117,000)</p>
  </td>
 </tr>
 <tr style='height:.1in'>
  <td width=240 valign=bottom style='width:2.5in;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>
  <p class=MsoNormal>Asset impairment charges
  and other costs</p>
  </td>
  <td width=78 valign=bottom style='width:58.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>
  <p class=MsoNormal align=right style='margin-right:5.4pt;text-align:right'><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>
  <p class=MsoNormal align=right style='margin-left:3.25pt;text-align:right'><u>&nbsp;</u></p>
  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>
  <p class=MsoNormal align=right style='margin-right:8.1pt;text-align:right'><u>(217,000)</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>
  <p class=MsoNormal align=right style='text-align:right'><u>&nbsp;</u></p>
  </td>
  <td width=72 valign=bottom style='width:.75in;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>
  <p class=MsoNormal align=right style='margin-right:.05in;text-align:right'><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>
  <p class=MsoNormal align=right style='margin-left:2.9pt;text-align:right'><u>&nbsp;</u></p>
  </td>
  <td width=84 valign=bottom style='width:63.0pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>
  <p class=MsoNormal align=right style='margin-left:2.9pt;text-align:right'><u>(217,000)</u></p>
  </td>
 </tr>
 <tr style='height:.1in'>
  <td width=240 valign=top style='width:2.5in;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=78 valign=bottom style='width:58.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=72 valign=bottom style='width:.75in;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=84 valign=bottom style='width:63.0pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
 </tr>
 <tr style='height:.1in'>
  <td width=240 valign=top style='width:2.5in;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>
  <p class=MsoNormal style='text-align:justify'>Income
  (loss) from discontinued operations</p>
  </td>
  <td width=78 valign=bottom style='width:58.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>
  <p class=MsoNormal align=right style='margin-right:5.4pt;text-align:right'>$27,000</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>
  <p class=MsoNormal align=right style='margin-right:8.1pt;text-align:right'>($400,000)</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=72 valign=bottom style='width:.75in;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>
  <p class=MsoNormal align=right style='margin-right:.05in;text-align:right'>$24,000</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>

  </td>
  <td width=84 valign=bottom style='width:63.0pt;padding:0in 5.4pt 0in 5.4pt;
  height:.1in'>
  <p class=MsoNormal align=right style='margin-left:2.9pt;text-align:right'>($471,000)</p>
  </td>
 </tr>
</table>



<p class=MsoNormal align=center style='text-align:center'>8</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='text-align:justify'>With
respect to the Commerce City closed location, we have continuing lease obligations
of $715,000 and we have subleased the location for $582,000. We have recorded
an estimated discounted liability of $103,000 related to this location. We have
terminated the lease on the Denver location effective February 1, 2011 and no
longer remain liable for any future lease obligations. In the three month
period ended March 31, 2011 we reversed the $31,000 accrued lease liability
associated with the Denver location.</p>

<p class=MsoNormal><strong>&nbsp;</strong></p>

<p class=MsoNormal><strong>Note 4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Stock-Based
Compensation</strong></p>

<p class=MsoNormal><i>&nbsp;</i></p>

<p class=MsoBodyText2 style='text-align:justify'>Following
the guidance of FASB ASC 718-10-30, Compensation - Stock Compensation,
stock-based compensation is measured at the grant date, based on the calculated
fair value of the award, and is recognized as an expense over the requisite
employee service period (generally the vesting period of the grant).</p>



<p class=MsoBodyText2 style='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='text-align:justify'>Our
net loss for the six months ended March 31, 2011 and March 31, 2010 includes
$30,000 and $44,000, respectively, of compensation costs related to our
stock-based compensation arrangements.</p>



<p class=MsoNormal style='margin-right:4.3pt;text-align:justify'>During the six months ended March 31, 2011, we granted
4,000 non-statutory stock options and 53,233 incentive stock options with
exercise prices of $1.56.&nbsp; The per-share weighted average fair value was $1.26
for both the non-statutory stock option grants and incentive stock option
grants.</p>



<p class=MsoNormal style='margin-right:4.3pt;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>



<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='margin-left:22.5pt;border-collapse:collapse'>
 <tr>
  <td width=162 valign=top style='width:121.5pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=114 valign=top style='width:85.75pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=center style='text-align:center'><strong>Incentive</strong></p>
  <p class=MsoNormal align=center style='text-align:center'><strong><u>Stock Options</u></strong></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=center style='margin-right:4.5pt;text-align:center'><strong>&nbsp;</strong></p>
  </td>
  <td width=132 valign=top style='width:99.0pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=center style='margin-right:4.5pt;text-align:center'><strong>Non-Statutory</strong></p>
  <p class=MsoNormal align=center style='margin-right:4.5pt;text-align:center'><strong><u>Stock Options</u></strong></p>
  </td>
 </tr>
 <tr>
  <td width=162 valign=top style='width:121.5pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal style='margin-top:0in;margin-right:4.5pt;margin-bottom:
  0in;margin-left:4.5pt;margin-bottom:.0001pt'>Expected
  term (years)</p>
  </td>
  <td width=114 valign=top style='width:85.75pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=right style='margin-right:.5in;text-align:right'><strong>6.5</strong></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=132 valign=top style='width:99.0pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=right style='margin-right:49.5pt;text-align:right'>6.7</p>
  </td>
 </tr>
 <tr>
  <td width=162 valign=top style='width:121.5pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal style='margin-top:0in;margin-right:4.5pt;margin-bottom:
  0in;margin-left:4.5pt;margin-bottom:.0001pt'>Expected
  volatility</p>
  </td>
  <td width=114 valign=top style='width:85.75pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=right style='margin-right:27.0pt;text-align:right'><strong>98.54%</strong></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=132 valign=top style='width:99.0pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=right style='margin-right:.5in;text-align:right'>97.35%</p>
  </td>
 </tr>
 <tr>
  <td width=162 valign=top style='width:121.5pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal style='margin-top:0in;margin-right:4.5pt;margin-bottom:
  0in;margin-left:4.5pt;margin-bottom:.0001pt'>Risk-free
  interest rate</p>
  </td>
  <td width=114 valign=top style='width:85.75pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=right style='margin-right:27.0pt;text-align:right'><strong>2.46%</strong></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=132 valign=top style='width:99.0pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=right style='margin-right:.5in;text-align:right'>2.52%</p>
  </td>
 </tr>
 <tr>
  <td width=162 valign=top style='width:121.5pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal style='margin-top:0in;margin-right:4.5pt;margin-bottom:
  0in;margin-left:4.5pt;margin-bottom:.0001pt'>Expected
  dividends</p>
  </td>
  <td width=114 valign=top style='width:85.75pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=right style='margin-right:.5in;text-align:right'><strong>0</strong></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=132 valign=top style='width:99.0pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=right style='margin-right:49.5pt;text-align:right'>0</p>
  </td>
 </tr>
</table>



<p class=MsoNormal style='margin-right:4.3pt;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=MsoBodyText2 style='margin-right:4.3pt;text-align:justify'>A summary of stock option activity under our
share-based compensation plan for the six months ended March 31, 2011 is
presented in the following table: (The numbers of options and the exercise
prices shown in this table have been adjusted to effect the one for three
reverse stock split that occurred on December 31, 2010.)</p>



<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='margin-left:11.4pt;border-collapse:collapse'>
 <tr>
  <td width=160 valign=top style='width:120.0pt;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=80 valign=bottom style='width:60.0pt;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>Options</b></p>
  </td>
  <td width=112 valign=bottom style='width:84.0pt;border:none;border-bottom:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='margin-right:4.5pt;text-align:center'><b>Weighted Average Exercise Price</b></p>
  </td>
  <td width=152 valign=bottom style='width:114.0pt;border:none;border-bottom:
  solid windowtext 1.0pt;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 Life (Yrs.)</b></p>
  </td>
  <td width=88 valign=bottom style='width:66.0pt;border:none;border-bottom:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='margin-right:4.5pt;text-align:center'><b>Aggregate Intrinsic Value</b></p>
  </td>
 </tr>
 <tr>
  <td width=160 valign=top style='width:120.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:-1.8pt'>Outstanding-beg
  of year</p>
  </td>
  <td width=80 valign=top style='width:60.0pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:7.6pt;text-align:right'>130,027</p>
  </td>
  <td width=112 valign=top style='width:84.0pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:26.1pt;text-align:right'>$&nbsp; 9.89</p>
  </td>
  <td width=152 valign=top style='width:114.0pt;border:none;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=88 valign=top style='width:66.0pt;border:none;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=160 valign=top style='width:120.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:-1.8pt'>Granted</p>
  </td>
  <td width=80 valign=top style='width:60.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:7.6pt;text-align:right'>57,233</p>
  </td>
  <td width=112 valign=top style='width:84.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:26.1pt;text-align:right'>$&nbsp; 1.56</p>
  </td>
  <td width=152 valign=top style='width:114.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=88 valign=top style='width:66.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=160 valign=top style='width:120.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:-1.8pt'>Exercised</p>
  </td>
  <td width=80 valign=top style='width:60.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:7.6pt;text-align:right'>-</p>
  </td>
  <td width=112 valign=top style='width:84.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=152 valign=top style='width:114.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=88 valign=top style='width:66.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=160 valign=top style='width:120.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:-1.8pt'>Forfeited
  </p>
  </td>
  <td width=80 valign=top style='width:60.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:5.1pt;text-align:right'>(19,371)</p>
  </td>
  <td width=112 valign=top style='width:84.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:26.1pt;text-align:right'>$11.62</p>
  </td>
  <td width=152 valign=top style='width:114.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=88 valign=top style='width:66.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=160 valign=top style='width:120.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:-1.8pt'>Expired</p>
  </td>
  <td width=80 valign=top style='width:60.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:5.1pt;text-align:right'><u>(&nbsp; 1,200)</u></p>
  </td>
  <td width=112 valign=top style='width:84.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:26.1pt;text-align:right'><a
  name="OLE_LINK4"><u>$&nbsp; 4.</u></a><u>14</u></p>
  </td>
  <td width=152 valign=top style='width:114.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=88 valign=top style='width:66.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=160 valign=top style='width:120.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:-1.8pt'>Outstanding
  Mar 31, 2011</p>
  </td>
  <td width=80 valign=top style='width:60.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:7.6pt;text-align:right'><u>166,689</u></p>
  </td>
  <td width=112 valign=top style='width:84.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:26.1pt;text-align:right'><u>$&nbsp; 6.87</u></p>
  </td>
  <td width=152 valign=top style='width:114.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='margin-right:4.5pt;text-align:center'><u>6.5</u></p>
  </td>
  <td width=88 valign=top style='width:66.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:8.1pt;text-align:right'><u>$39,000</u></p>
  </td>
 </tr>
 <tr>
  <td width=160 valign=top style='width:120.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=80 valign=top style='width:60.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=112 valign=top style='width:84.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=152 valign=top style='width:114.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=88 valign=top style='width:66.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=160 valign=top style='width:120.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:-1.8pt'>Exercisable
  Mar 31, 2011</p>
  </td>
  <td width=80 valign=top style='width:60.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:7.6pt;text-align:right'><u>&nbsp; 80,819</u></p>
  </td>
  <td width=112 valign=top style='width:84.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:26.1pt;text-align:right'><u>$11.38</u></p>
  </td>
  <td width=152 valign=top style='width:114.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='margin-right:4.5pt;text-align:center'><u>3.8</u></p>
  </td>
  <td width=88 valign=top style='width:66.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-right:8.1pt;text-align:right'><u>$&nbsp; 3,000</u></p>
  </td>
 </tr>
</table>



<p class=MsoBodyText2 align=center style='margin-right:4.3pt;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-right:4.3pt'>As
of March 31, 2011, the total remaining unrecognized compensation cost related
to unvested stock-based arrangements was $85,000 and is expected to be
recognized over a period of 2.7 years.</p>



<p class=MsoBodyText2 style='margin-right:4.3pt;text-align:justify'>There were no stock options exercised during the six
months ended March 31, 2011.</p>

<p class=MsoNormal style='margin-right:4.3pt;text-align:justify'><strong>&nbsp;</strong></p>

<p class=MsoNormal style='margin-right:4.3pt;text-align:justify'><strong>Note 5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Comprehensive Income (Loss)</strong></p>

<p class=MsoNormal style='margin-right:4.3pt;text-align:justify'><strong>&nbsp;</strong></p>

<p class=MsoNormal style='margin-right:4.3pt;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-right:4.5pt;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. In
addition we have recognized an unrealized gain of $23,000 for the six months
ended March 31, 2011 in the accompanying Condensed Consolidated Statement of
Operations to adjust the liability related to the interest rate swap to fair
market value.</p>



<p class=MsoBodyText style='margin-right:0in;line-height:normal'><b>Note 6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Contingent Liabilities</b></p>

<p class=MsoBodyText style='margin-right:0in;line-height:normal'><b>&nbsp;</b></p>

<p class=MsoNormal style='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-right:0in;line-height:normal'><b>Note 7. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Related Party Transactions</b></p>



<p class=MsoBodyText style='margin-right:0in;line-height:normal'>In fiscal 2009 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 were all members of the Company's Board of
Directors and stockholders of the Company, are the sole members of Golden
Bridge. 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; The Loan was paid in full in December
2010 following the closing of the SII Investment Transaction.&nbsp; Amounts due
to related parties that are included in notes payable are $0 at March 31, 2011
and $185,000 at September 30, 2010.</p>

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

<p class=MsoNormal style='text-align:justify'><b>Note
8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Assets Held for Sale</b></p>

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

<p class=MsoNormal style='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><b>Note 9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Impairment
of Long-Lived Assets</b></p>



<p class=MsoNormal style='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 align=center style='text-align:center'>10</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>An analysis was performed on
a restaurant by restaurant basis at March 31, 2011. Assumptions used in
preparing expected cash flows were as follows:</p>



<p class=MsoNormal style='margin-left:.5in;text-align:justify;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Sales projections are as follows:
Fiscal 2011 sales are projected to increase 3% to 5% over fiscal 2010, for fiscal
years 2012 to 2024 we have used annual increases of 2% to 3%. We believe the 2%
to 3% increase in the years beyond 2011 is a reasonable expectation of growth
and that it would be unreasonable to expect no 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%.</p>

<p class=MsoNormal style='margin-left:.5in;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=MsoNormal style='margin-left:.5in;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=MsoNormal style='margin-left:.5in;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 recent fiscal 2010 food and packaging
costs as a percentage of sales.</p>

<p class=MsoNormal style='margin-left:.5in;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='text-align:justify'>Given
the results of our impairment analysis at March 31, 2011 there are no
restaurants which are impaired as their projected undiscounted cash flows show
recoverability of their asset values.</p>



<p class=MsoNormal style='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; However if we elect
to sublease, close or otherwise exit a restaurant location impairment could be
required. 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='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='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='text-align:justify'>In
fiscal 2010 we closed two company operated restaurants resulting in total
charges of $396,000. 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=MsoNormal style='text-align:justify'><b>Note
10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Fair Value Measurements</b></p>



<p class=MsoNormal style='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='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 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>

</div>



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










<p class=MsoNormal style='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>



<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='margin-left:.2in;border-collapse:collapse'>
 <tr>
  <td width=66 valign=top style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>Level
  1:</p>
  </td>
  <td width=553 valign=top style='width:414.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>Quoted
  market prices in active markets for identical assets and liabilities.</p>
  </td>
 </tr>
 <tr>
  <td width=66 valign=top style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>Level
  2:</p>
  </td>
  <td width=553 valign=top style='width:414.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>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>
  </td>
 </tr>
 <tr>
  <td width=66 valign=top style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>Level
  3:</p>
  </td>
  <td width=553 valign=top style='width:414.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>Unobservable
  inputs that are not corroborated by observable market data.</p>
  </td>
 </tr>
</table>



<p class=MsoNormal style='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, 2011:</p>



<p class=MsoNormal style='text-align:justify'>Level
2:</p>

<p class=MsoNormal style='text-align:justify'>Interest
Rate Swap liability:</p>



<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='margin-left:23.4pt;border-collapse:collapse'>
 <tr>
  <td width=192 valign=top style='width:2.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>Balance
  at December 31, 2010</p>
  </td>
  <td width=65 valign=top style='width:48.6pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>$71,000</p>
  </td>
 </tr>
 <tr>
  <td width=192 valign=top style='width:2.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>Balance
  at March 31, 2011</p>
  </td>
  <td width=65 valign=top style='width:48.6pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'><u>$61,000</u></p>
  </td>
 </tr>
 <tr>
  <td width=192 valign=top style='width:2.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>Net
  change</p>
  </td>
  <td width=65 valign=top style='width:48.6pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>$10,000</p>
  </td>
 </tr>
</table>



<p class=MsoNormal style='text-align:justify'>The
unrealized gains for the three and six month periods ending March 31, 2011 of
$10,000 and $23,000, respectively, are reported in the Condensed Consolidated
Statement of Operations. There were no transfers in or out of Level 3 for the
three or six month periods ending March 31, 2011.</p>

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

<p class=MsoNormal style='text-align:justify'><b>Note
11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income Taxes</b></p>



<p class=MsoNormal style='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='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='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><b>Note 12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-controlling
Interests</b></p>



<p class=MsoNormal style='text-align:justify'>Non-controlling
interests, previously called minority interests, are presented as a separate
item in the equity section of the consolidated balance sheet. The amount of
consolidated net income or loss attributable to non-controlling interests is
presented on the face of the consolidated income statement. Changes in a
parent's ownership interest in a subsidiary that do not result in
deconsolidation are equity transactions, deconsolidation of a subsidiary
requires gain or loss recognition in net income based on the fair value on the
deconsolidation date.</p>



<p class=MsoNormal><b>Note 13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Subsequent
Events</b></p>



<p class=MsoNormal style='text-align:justify'>None.</p>



<p class=MsoNormal 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><b>Note 14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Recent
Accounting Pronouncements</b></p>



<p class=MsoNormal style='text-align:justify'>In
January 2010, the FASB issued an update regarding guidance over the disclosure
requirements of fair value measurements. This update adds new requirements for
disclosure about transfers into and out of Levels One and Two and also adds additional
disclosure requirements about purchases, sales, issuances, and settlements
relating to Level Three measurements.&nbsp; The guidance is effective for reporting
periods beginning after December 15, 2009 for the disclosure requirements
around Levels One and Two measurements, and is effective for reporting periods
beginning after December 15, 2010 for the disclosure requirements around Level
Three.</p>



<p class=MsoNormal><b>Note 15.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Stock
Transactions</b></p>



<p class=MsoBodyText2 style='text-align:justify'>On
December 13, 2010 the company completed a stock sale of 1,400,000 shares of Common
Stock, par value $.001, at a price of $1.50 per share to one investor (see Note
2. above for details of the stock sale).</p>



<p class=MsoBodyText2 style='text-align:justify'>On
December 13, 2010 the company received Board of Directors approval to effect a
one-for-three reverse stock split of its Common Stock no later than December
31, 2010. The reverse stock split was effected on December 31, 2010.
Immediately prior to the reverse stock split the company had 8,177,989 of
Common Stock outstanding and immediately following the reverse split the outstanding
shares were approximately 2,725,996 (subsequently 218 shares have been issued
for rounding of fractional shares resulting from the reverse split).</p>

<p class=MsoBodyText2 style='margin-left:.75in;text-indent:-.75in'><b>&nbsp;</b></p>

<p class=MsoBodyText2 style='margin-left:.75in;text-indent:-.75in'><b>ITEM 2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS</b></p>



<p class=MsoNormal><b>General</b></p>



<p class=MsoBodyText style='margin-right: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, 2010.&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-right:0in;line-height:normal'>(I).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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:0in;margin-bottom:.0001pt;text-align:justify;
text-indent:0in'>(II).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; We may be
negatively impacted if we 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=MsoBodyText style='margin-right: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-right:0in;line-height:normal'><i>&nbsp;</i></p>

<p class=MsoBodyText style='margin-right:0in;line-height:normal'><i>Restaurant Locations</i></p>

<p class=MsoBodyText style='margin-right:0in;line-height:normal'>We currently operate and franchise a total of
forty-seven Good Times restaurants, of which forty-three are in Colorado, with
forty in the Denver greater metropolitan area, two in Colorado Springs and one
in Silverthorne. Six 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 three in Colorado.</p>



<p class=MsoBodyText align=center style='margin-right:0in;text-align:center;
line-height:normal'>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'>












<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=639
 style='margin-left:5.75pt;border-collapse:collapse'>
 <tr>
  <td width=228 valign=top style='width:170.7pt;padding:0in 5.75pt 0in 5.75pt'><br clear=all style='page-break-before:always'>


  </td>
  <td width=50 valign=bottom style='width:37.3pt;border:none;border-bottom:
  solid windowtext 1.0pt;padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal align=center style='text-align:center'><b>Total</b></p>
  </td>
  <td width=106 valign=bottom style='width:1.1in;border:none;border-bottom:
  solid windowtext 1.0pt;padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal align=center style='text-align:center'><b>Denver, CO</b></p>
  <p class=MsoNormal align=center style='text-align:center'><b>Greater Metro</b></p>
  </td>
  <td width=72 valign=bottom style='width:53.8pt;border:none;border-bottom:
  solid windowtext 1.0pt;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=53 valign=bottom style='width:40.1pt;border:none;border-bottom:
  solid windowtext 1.0pt;padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal align=center style='text-align:center'><b>Idaho</b></p>
  </td>
  <td width=71 valign=bottom style='width:53.6pt;border:none;border-bottom:
  solid windowtext 1.0pt;padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal align=center style='text-align:center'><b>Wyoming</b></p>
  </td>
  <td width=60 valign=bottom style='width:44.8pt;border:none;border-bottom:
  solid windowtext 1.0pt;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=228 valign=top style='width:170.7pt;padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal>Good Times co-owned &amp;
  co-developed</p>
  </td>
  <td width=50 valign=top style='width:37.3pt;border:none;padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal align=center style='text-align:center'>25</p>
  </td>
  <td width=106 valign=top style='width:1.1in;border:none;padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal align=center style='text-align:center'>23</p>
  </td>
  <td width=72 valign=top style='width:53.8pt;border:none;padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal align=center style='text-align:center'>2</p>
  </td>
  <td width=53 valign=top style='width:40.1pt;border:none;padding:0in 5.75pt 0in 5.75pt'>

  </td>
  <td width=71 valign=top style='width:53.6pt;border:none;padding:0in 5.75pt 0in 5.75pt'>

  </td>
  <td width=60 valign=top style='width:44.8pt;border:none;padding:0in 5.75pt 0in 5.75pt'>

  </td>
 </tr>
 <tr>
  <td width=228 valign=top style='width:170.7pt;padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal>Good Times franchised</p>
  </td>
  <td width=50 valign=top style='width:37.3pt;padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal align=center style='text-align:center'>16</p>
  </td>
  <td width=106 valign=top style='width:1.1in;padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal align=center style='text-align:center'>14</p>
  </td>
  <td width=72 valign=top style='width:53.8pt;padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal align=center style='text-align:center'>1</p>
  </td>
  <td width=53 valign=top style='width:40.1pt;padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal align=center style='text-align:center'>1</p>
  </td>
  <td width=71 valign=top style='width:53.6pt;padding:0in 5.75pt 0in 5.75pt'>

  </td>
  <td width=60 valign=top style='width:44.8pt;padding:0in 5.75pt 0in 5.75pt'>

  </td>
 </tr>
 <tr>
  <td width=228 valign=top style='width:170.7pt;padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal>Dual brand co-owned</p>
  </td>
  <td width=50 valign=top style='width:37.3pt;padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal align=center style='text-align:center'>1</p>
  </td>
  <td width=106 valign=top style='width:1.1in;padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal align=center style='text-align:center'>1</p>
  </td>
  <td width=72 valign=top style='width:53.8pt;padding:0in 5.75pt 0in 5.75pt'>

  </td>
  <td width=53 valign=top style='width:40.1pt;padding:0in 5.75pt 0in 5.75pt'>

  </td>
  <td width=71 valign=top style='width:53.6pt;padding:0in 5.75pt 0in 5.75pt'>

  </td>
  <td width=60 valign=top style='width:44.8pt;padding:0in 5.75pt 0in 5.75pt'>

  </td>
 </tr>
 <tr>
  <td width=228 valign=top style='width:170.7pt;padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal>Dual brand franchised</p>
  </td>
  <td width=50 valign=top style='width:37.3pt;border:none;border-bottom: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=106 valign=top style='width:1.1in;border:none;border-bottom: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=72 valign=top style='width:53.8pt;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 5.75pt 0in 5.75pt'>

  </td>
  <td width=53 valign=top style='width:40.1pt;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 5.75pt 0in 5.75pt'>

  </td>
  <td width=71 valign=top style='width:53.6pt;border:none;border-bottom: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=60 valign=top style='width:44.8pt;border:none;border-bottom: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=228 valign=top style='width:170.7pt;padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal align=right style='text-align:right'><b>Total</b></p>
  </td>
  <td width=50 valign=top style='width:37.3pt;border:none;padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal align=center style='text-align:center'><b>47</b></p>
  </td>
  <td width=106 valign=top style='width:1.1in;border:none;padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal align=center style='text-align:center'><b>40</b></p>
  </td>
  <td width=72 valign=top style='width:53.8pt;border:none;padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal align=center style='text-align:center'><b>3</b></p>
  </td>
  <td width=53 valign=top style='width:40.1pt;border:none;padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal align=center style='text-align:center'><b>1</b></p>
  </td>
  <td width=71 valign=top style='width:53.6pt;border:none;padding:0in 5.75pt 0in 5.75pt'>
  <p class=MsoNormal align=center style='text-align:center'><b>2</b></p>
  </td>
  <td width=60 valign=top style='width:44.8pt;border:none;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:5.4pt;border-collapse:collapse;border:none'>
 <tr>
  <td width=228 valign=top style='width:171.0pt;border:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'><br clear=all style='page-break-before:always'>


  </td>
  <td width=162 colspan=2 valign=top style='width:121.5pt;border:solid windowtext 1.0pt;
  border-left:none;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=228 valign=top style='width:171.0pt;border:solid windowtext 1.0pt;
  border-top:none;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=78 valign=top style='width:58.5pt;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><u>2011</u></b></p>
  </td>
  <td width=84 valign=top style='width:63.0pt;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><u>2010</u></b></p>
  </td>
 </tr>
 <tr>
  <td width=228 valign=top style='width:171.0pt;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=78 valign=top style='width:58.5pt;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'>19</p>
  </td>
  <td width=84 valign=top style='width:63.0pt;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=228 valign=top style='width:171.0pt;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=78 valign=top style='width:58.5pt;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'>7</p>
  </td>
  <td width=84 valign=top style='width:63.0pt;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=228 valign=top style='width:171.0pt;border:solid windowtext 1.0pt;
  border-top:none;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>Franchise
  operated restaurants</p>
  </td>
  <td width=78 valign=top style='width:58.5pt;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=84 valign=top style='width:63.0pt;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>
 </tr>
 <tr>
  <td width=228 valign=top style='width:171.0pt;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=78 valign=top style='width:58.5pt;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>47</b></p>
  </td>
  <td width=84 valign=top style='width:63.0pt;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='text-align:justify'><i>&nbsp;</i></p>

<p class=MsoNormal style='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 and in June
2010 we closed one co-developed Good Times restaurant in Denver, Colorado (see
Note 3. above - Discontinued Operations). Additionally in June 2010 we sold one
co-developed restaurant in Denver, Colorado to a new franchisee operator.</p>



<p class=MsoNormal style='text-align:justify'><i>Fiscal
2011:</i> In December 2010 a franchisee
operating a Good Times restaurant in Grand Junction, Colorado terminated their
franchise agreement and closed the restaurant. In February 2011 we sold one
dual branded company-owned restaurant in Colorado Springs, Colorado. We
anticipate that franchisees may close up to two low volume franchised
restaurants in fiscal 2011. We have entered into a purchase and sale agreement
for the sale of one additional company-owned restaurant in Colorado Springs,
Colorado that was effective February 1, 2011 and is anticipated to occur on or
prior to May 31, 2011. See the &quot;Liquidity and Capital Resources&quot; section below
for further details.</p>



<p class=MsoBodyText style='margin-right: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, 2011 and results for the three and six
months ended March 31, 2010.</p>



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

<p class=MsoBodyText style='margin-right:0in;line-height:normal'><u>&nbsp;</u></p>

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

<p class=MsoBodyText style='margin-right:0in;line-height:normal'>Net revenues for the three months ended March 31, 2011
decreased $83,000 (1.7%) to $4,703,000 from $4,786,000 for the three months
ended March 31, 2010.&nbsp; Same store restaurant sales increased $224,000 (5.7%)
during the three months ended March 31, 2011 for the restaurants that were open
for the full three month periods ending March 31, 2011 and March 31, 2010.&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. Restaurant sales decreased $177,000 due to one
co-developed store sold to a franchisee in June 2010. Restaurant sales
decreased $105,000 due to two company-owned dual branded restaurants not
included in same store sales, one of which was sold in February 2011.
Restaurant sales also decreased $10,000 due to one non-traditional
company-owned restaurant not included in same store sales.</p>



<p class=MsoBodyText style='margin-right:0in;line-height:normal'>Net revenues for the six months ended March 31, 2011
increased $251,000 (2.6%) to $9,788,000 from $9,537,000 for the six months
ended March 31, 2010.&nbsp; Same store restaurant sales increased $747,000 (9.6%)
during the six months ended March 31, 2011 for the restaurants that were open
for the full six month periods ending March 31, 2011 and March 31, 2010.
Restaurant sales decreased $352,000 due to one co-developed store sold to a
franchisee in June 2010. Restaurant sales decreased $112,000 due to two
company-owned dual branded restaurants not included in same store sales, one of
which was sold in February 2011. Restaurant sales also decreased $7,000 due to
one non-traditional company-owned restaurant not included in same store sales.</p>



<p class=MsoBodyText style='margin-right:0in;line-height:normal'>Our second fiscal quarter same store restaurant sales
were positively affected by better than average weather in March 2011. Same
store sales increased 8.6% in March 2011. Our first fiscal quarter same store
restaurant sales were positively affected by better than average weather in
both October and December 2010. Same store sales increased 20.3% and 14.2% in
October and December 2010, respectively.</p>

<p class=MsoBodyText align=center style='margin-right:0in;text-align:center;
line-height:normal'>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 align=left style='margin-right:0in;text-align:left;
line-height:normal'>The positive same store
sales results for the first and second fiscal quarters of 2011 also reflect the
continuation of the positive momentum we experienced in the last fiscal quarter
of 2010 when same store sales increased 1.8%, after nine consecutive quarters
of same store sales declines.</p>



<p class=MsoBodyText style='margin-right:0in;line-height:normal'>Our outlook for fiscal 2011 is more optimistic based
on the last ten months' sales trends, however our sales trends are influenced
by many factors and the macroeconomic environment remains challenging for
smaller restaurant chains.&nbsp; Our average transaction has increased in fiscal
2011 compared to fiscal 2010 and we are continuing to manage our marketing communications
to balance growth in customer traffic and their average expenditure.</p>



<p class=MsoBodyText style='margin-right:0in;line-height:normal'>Franchise revenues for the three months ended March
31, 2011 decreased $15,000 to $96,000 from $111,000 for the three months ended
March 31, 2010 due to a decrease in franchise royalties. Same store Good Times
franchise restaurant sales increased 3.5% during the three months ended March
31, 2011 for the franchise restaurants that were open for the full periods
ending March 31, 2011 and March 31, 2010. Dual branded franchise restaurant
sales decreased 7.5% during the three months ended March 31, 2011, compared to
the same prior year period. In late fiscal 2010 we elected to terminate the
operations of a Good Times licensee operating in the Pepsi Center in Denver,
Colorado which contributed to the decrease in our franchise royalty income for
the three months ended March 31, 2011 compared to the same prior year period.</p>



<p class=MsoBodyText style='margin-right:0in;line-height:normal'>Franchise revenues for the six months ended March 31,
2011 decreased $25,000 to $199,000 from $224,000 for the six months ended March
31, 2010 due to a decrease in franchise fees and royalties. Same store Good
Times franchise restaurant sales increased 7% during the six months ended March
31, 2011 for the franchise restaurants that were open for the full periods
ending March 31, 2011 and March 31, 2010. Dual branded franchise restaurant
sales decreased 3.8% during the six months ended March 31, 2011, compared to
the same prior year period. Operations of the Good Times licensee operating in
the Pepsi Center in Denver, Colorado that was closed in late fiscal 2010
contributed to the reduction in our franchise royalty income for the six months
ended March 31, 2011 compared to the same prior year period.</p>



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

<p class=MsoBodyText style='margin-right:0in;line-height:normal'>Restaurant operating costs as a percent of restaurant
sales were 100% during the three months ended March 31, 2011 compared to 103.1%
in the same prior year period and were 98.2% during the six months ended March
31, 2011 compared to 101.5% in the same prior year period.</p>



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



<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='margin-left:5.4pt;border-collapse:collapse'>
 <tr>
  <td width=342 valign=top style='width:256.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=132 valign=top style='width:99.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText align=center style='margin-right:.05in;text-align:center;
  line-height:normal'>Three Months Ended <u>March
  31, 2011</u></p>
  </td>
  <td width=132 valign=top style='width:99.0pt;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 <u>March
  31, 2011</u></p>
  </td>
 </tr>
 <tr>
  <td width=342 valign=top style='width:256.5pt;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:-9.9pt;text-align:left;
  line-height:normal'>Restaurant-level costs for
  the period ended March 31, 2010</p>
  </td>
  <td width=132 valign=top style='width:99.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText align=right style='margin-right:30.6pt;text-align:right;
  line-height:normal'>103.1%</p>
  </td>
  <td width=132 valign=top style='width:99.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText align=right style='margin-right:35.1pt;text-align:right;
  line-height:normal'>101.5%</p>
  </td>
 </tr>
 <tr>
  <td width=342 valign=top style='width:256.5pt;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=132 valign=top style='width:99.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText align=right style='margin-right:30.6pt;text-align:right;
  line-height:normal'>.8%</p>
  </td>
  <td width=132 valign=top style='width:99.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText align=right style='margin-right:35.1pt;text-align:right;
  line-height:normal'>1.5%</p>
  </td>
 </tr>
 <tr>
  <td width=342 valign=top style='width:256.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText align=left style='margin-right:0in;text-align:left;
  line-height:normal'>Decrease in payroll and
  other employee benefit costs</p>
  </td>
  <td width=132 valign=top style='width:99.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText align=right style='margin-right:26.1pt;text-align:right;
  line-height:normal'>(&nbsp;&nbsp;&nbsp;&nbsp; .9%)</p>
  </td>
  <td width=132 valign=top style='width:99.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText align=right style='margin-right:30.6pt;text-align:right;
  line-height:normal'>(&nbsp; 1.6%)</p>
  </td>
 </tr>
 <tr>
  <td width=342 valign=top style='width:256.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText align=left style='margin-right:0in;text-align:left;
  line-height:normal'>Decrease in occupancy and
  other operating costs</p>
  </td>
  <td width=132 valign=top style='width:99.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText align=right style='margin-right:26.1pt;text-align:right;
  line-height:normal'>(&nbsp;&nbsp; 2.3%)</p>
  </td>
  <td width=132 valign=top style='width:99.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText align=right style='margin-right:30.6pt;text-align:right;
  line-height:normal'>(&nbsp; 2.4%)</p>
  </td>
 </tr>
 <tr>
  <td width=342 valign=top style='width:256.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText align=left style='margin-right:0in;text-align:left;
  line-height:normal'>Decrease in depreciation
  and amortization</p>
  </td>
  <td width=132 valign=top style='width:99.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText align=right style='margin-right:26.1pt;text-align:right;
  line-height:normal'><u>(&nbsp;&nbsp;&nbsp;&nbsp; .7%)</u></p>
  </td>
  <td width=132 valign=top style='width:99.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText align=right style='margin-right:30.6pt;text-align:right;
  line-height:normal'><u>(&nbsp;&nbsp;&nbsp; .8%)</u></p>
  </td>
 </tr>
 <tr>
  <td width=342 valign=top style='width:256.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText align=left style='margin-right:0in;text-align:left;
  line-height:normal'>Restaurant-level costs for
  the period ended March 31, 2011</p>
  </td>
  <td width=132 valign=top style='width:99.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText align=right style='margin-right:30.6pt;text-align:right;
  line-height:normal'>100.0%</p>
  </td>
  <td width=132 valign=top style='width:99.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText align=right style='margin-right:35.1pt;text-align:right;
  line-height:normal'>98.2%</p>
  </td>
 </tr>
</table>



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

<p class=MsoNormal style='text-align:justify'>For
the three months ended March 31, 2011 our food and paper costs increased
$13,000 to $1,660,000 (36% of restaurant sales) from $1,647,000 (35.2% of
restaurant sales) compared to the same prior year period.</p>



<p class=MsoNormal style='text-align:justify'>For
the six months ended March 31, 2011 our food and paper costs increased $236,000
to $3,418,000 (35.6% of restaurant sales) from $3,182,000 (34.2% of restaurant
sales) compared to the same prior year period.</p>



<p class=MsoNormal style='text-align:justify'>In
fiscal 2010 our weighted food and packaging costs increased approximately 11%.&nbsp;
The total menu price increases taken during fiscal 2010 were 7.1%, all of which
were taken in the last four months of the year. The introduction of the $2.89
Craver combo meals in May 2010 negatively impacted our cost of sales by an
estimated 1% of restaurant sales however we believe the new value offer is a
significant driver of customer traffic.</p>



<p class=MsoNormal 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='text-align:justify'>In
fiscal 2011 our weighted food and packaging costs have increased approximately
4.7%. We took a 1.7% menu price increase in February 2011 and we anticipate
additional limited price increases for the balance of fiscal 2011. We
anticipate continued cost pressure on several core commodities, including beef,
bacon and dairy for the remainder of fiscal 2011. However we anticipate our
food and packaging costs as a percentage of sales will remain at current levels
in fiscal 2011 from a combination of price increases, product sales mix changes
and recipe modifications.</p>



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

<p class=MsoBodyText style='margin-right:0in;line-height:normal'>For the three months ended March 31, 2011 our payroll
and other employee benefit costs decreased $68,000 to $1,725,000 (37.4% of
restaurant sales) from $1,793,000 (38.4% of restaurant sales) compared to the
same prior year period.</p>



<p class=MsoBodyText style='margin-right:0in;line-height:normal'>For the six months ended March 31, 2011 our payroll
and other employee benefit costs decreased $48,000 to $3,484,000 (36.3% of
restaurant sales) from $3,532,000 (37.9% of restaurant sales) compared to the
same prior year period.</p>



<p class=MsoBodyText style='margin-right:0in;line-height:normal'>The decrease in payroll and other employee benefit
expenses as a percent of restaurant sales for the three and six month periods
ended March 31, 2011 is primarily the result of higher restaurant sales.
Because payroll costs are semi-variable in nature they decrease as a percentage
of restaurant sales when there is an increase in restaurant sales.</p>



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

<p class=MsoBodyText style='margin-right:0in;line-height:normal'>For the three months ended March 31, 2011 our
occupancy and other operating costs decreased $119,000 to $1,020,000 (22.1% of
restaurant sales) from $1,139,000 (24.4% of restaurant sales) compared to the
same prior year period.</p>



<p class=MsoBodyText style='margin-right:0in;line-height:normal'>For the six months ended March 31, 2011 our occupancy
and other operating costs decreased $159,000 to $2,104,000 (21.9% of restaurant
sales) from $2,263,000 (24.3% of restaurant sales) compared to the same prior
year period.</p>



<p class=MsoBodyText style='margin-right:0in;line-height:normal'>For the three and six month periods ended March 31,
2011 we experienced decreases in rent, property taxes, utility costs, common
area maintenance costs and repairs and maintenance costs compared to the same
prior year period primarily due to the sale of one co-developed restaurant in
June 2010. We also had a decrease in our accretion for deferred rent of $31,000
compared to the same prior year period due to a lease termination and the sale
of restaurants. Additionally, during fiscal 2010 we successfully negotiated the
reduction of base rents at four company-owned restaurants. The reductions will
result in total savings of approximately $96,000 per year. We are also
continuing to negotiate rent reductions on additional restaurants.</p>



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

<p class=MsoBodyText style='margin-right:0in;line-height:normal'>For the three months ended March 31, 2011, our
depreciation and amortization decreased $37,000 to $203,000 (4.4% of restaurant
sales) from $240,000 (5.1% of restaurant sales) compared to the same prior year
period.</p>



<p class=MsoBodyText style='margin-right:0in;line-height:normal'>For the six months ended March 31, 2011, our
depreciation and amortization decreased $64,000 to $408,000 (4.3% of restaurant
sales) from $472,000 (5.1% of restaurant sales) compared to the same prior year
period.</p>



<p class=MsoBodyText style='margin-right:0in;line-height:normal'>The decrease in depreciation and amortization for the
three and six month periods ended March 31, 2011 is primarily due to the sale
of one co-developed restaurant in June 2010 as well as declining depreciation
expense in our aging company-owned and co-developed restaurants.</p>



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

<p class=MsoBodyText style='margin-right:0in;line-height:normal'>For the three months ended March 31, 2011, general and
administrative costs decreased $33,000 to $332,000 (7.1% of total revenues)
from $365,000 (7.6% of total revenues) for the same prior year period.</p>



<p class=MsoBodyText style='margin-right:0in;line-height:normal'>For the six months ended March 31, 2011, general and
administrative costs decreased $58,000 to $677,000 (6.9% of total revenues)
from $735,000 (7.7% of total revenues) for the same prior year period.</p>



<p class=MsoBodyText style='margin-right:0in;line-height:normal'>The decrease in general and administrative costs for
the six month period ended March 31, 2011 compared to the same prior year
period is primarily attributable to decreases in payroll and employee benefit
costs of $51,000 and a $14,000 decrease in our incentive stock option
compensation expense as well as decreases in other costs. In July 2010 we implemented
salary reductions which resulted in annualized savings in payroll and employee
benefit costs of approximately $89,000. The decreases in payroll and employee
benefit costs were partially offset by an increase in our training and
recruiting costs of $12,000 attributable to our crew incentive programs as well
as an increase of $11,000 in our stock exchange fees and expenses related to
the one for three reverse stock split.</p>

<p class=MsoBodyText align=center style='margin-right:0in;text-align:center;
line-height:normal'>16</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='text-align:justify'><i>Advertising
Costs</i></p>

<p class=MsoBodyText style='margin-right:0in;line-height:normal'>For the three months ended March 31, 2011 advertising
costs decreased $82,000 to $198,000 (4.3% of restaurant sales) from $280,000
(6% of restaurant sales) for the same prior year period.</p>



<p class=MsoBodyText style='margin-right:0in;line-height:normal'>For the six months ended March 31, 2011 advertising
costs decreased $136,000 to $414,000 (4.3% of restaurant sales) from $550,000
(5.9% of restaurant sales) for the same prior year period.</p>



<p class=MsoBodyText style='margin-right:0in;line-height:normal'>Contributions are made to the advertising materials
fund and regional advertising cooperative based on a percentage of sales and
there was a reduction in the percentage contribution for fiscal 2011 compared
to the same prior year period.</p>

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

<p class=MsoBodyText style='margin-right:0in;line-height:normal'><i>Franchise Costs</i></p>

<p class=MsoNormal style='margin-left:-.7pt;text-align:justify'>For the three months ended March 31, 2011, franchise
costs decreased $16,000 to $19,000 (.4% of total revenues) from $35,000 (.7% of
total revenues) for the same prior year period.</p>



<p class=MsoNormal style='margin-left:-.7pt;text-align:justify'>For the six months ended March 31, 2011, franchise
costs decreased $28,000 to $37,000 (.4% of total revenues) from $65,000 (.7% of
total revenues) for the same prior year period.</p>



<p class=MsoNormal style='margin-left:-.7pt'>The
decrease in franchise costs for the three and six month periods ended March 31,
2011 is primarily attributable to sponsorship costs incurred in the prior year
periods associated with the Good Times licensee operating in the Pepsi Center
in Denver, Colorado which closed in late fiscal 2010.</p>

<p class=MsoNormal style='margin-left:-.7pt;text-align:justify'><i>&nbsp;</i></p>

<p class=MsoNormal style='margin-left:-.7pt;text-align:justify'><i>Gain on Sale of Assets</i></p>

<p class=MsoNormal style='margin-left:-.7pt;text-align:justify'>For the three months ended March 31, 2011, our gain on
the sale of assets increased $78,000 to $86,000 from $8,000 for the same prior
year period. The current three month period ending March 31, 2011 includes a
gain of $71,000 related to the sale of one company-owned restaurant in February
2011.</p>



<p class=MsoNormal style='margin-left:-.7pt;text-align:justify'>For the six months ended March 31, 2011, our gain on
the sale of assets increased $83,000 to $98,000 from $15,000 for the same prior
year period. The current six month period ending March 31, 2011 includes a gain
of $71,000 related to the sale of one company-owned restaurant in February 2011
and a $4,000 gain on the sale of land in December 2010.</p>

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

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

<p class=MsoBodyText style='margin-right:0in;line-height:normal'>We had a loss from operations of ($368,000) in the
three months ended March 31, 2011 compared to a loss from operations of
($705,000) for the same prior year period.</p>



<p class=MsoBodyText style='margin-right:0in;line-height:normal'>We had a loss from operations of ($656,000) in the six
months ended March 31, 2011 compared to a loss from operations of ($1,247,000)
for the same prior year period.</p>



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

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

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

<p class=MsoBodyText style='margin-right:0in;line-height:normal'>The net loss from continuing operations was ($415,000)
for the three months ended March 31, 2011 compared to a net loss from
continuing operations of ($866,000) for the same prior year period. The change
from the three month period ended March 31, 2010 to March 31, 2011 was attributable
to the decrease in loss from operations for the three months ended March 31,
2011, as well as a decrease in net interest expense of $114,000 compared to the
same prior year period. Net interest expense for the three months ended March
31, 2011 includes non-cash amortization of debt issuance costs of $7,000
related to the extension of the PFGI II loan in January, 2010. 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 and John T. MacDonald entered into in February
2010.</p>

<p class=MsoBodyText align=center style='margin-right:0in;text-align:center;
line-height:normal'>17</p>



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

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</div>



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<p class=MsoBodyText style='margin-right:0in;line-height:normal'>The net loss from continuing operations was ($801,000)
for the six months ended March 31, 2011 compared to a net loss from continuing
operations of ($1,477,000) for the same prior year period. The change from the
six month period ended March 31, 2010 to March 31, 2011 was attributable to the
decrease in loss from operations for the six months ended March 31, 2011, as
well as: 1) a decrease in net interest expense of $72,000 compared to the same
prior year period; and 2) an increase in the unrealized gain related to our
interest rate swap liability of $13,000 compared to the same prior year period.
&nbsp;Net interest expense for the six months ended March 31, 2011 includes non-cash
amortization of debt issuance costs of $35,000 related to: 1) the extension of
the PFGI II loan in January, 2010; and 2) the loan
agreement with W Capital and John T. MacDonald entered into in February
2010. 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; and 2) the loan agreement with W Capital and John T. MacDonald
entered into in February 2010.</p>



<p class=MsoBodyText style='margin-right:0in;line-height:normal'><i>Income (loss) from Discontinued Operations</i></p>

<p class=MsoBodyText style='margin-right:0in;line-height:normal'>The income from discontinued operations of $27,000 for
the three month period ended March 31, 2011 represents our lease liability
costs in excess of our accrued liability for the Commerce City location offset
by a reversal of the $31,000 lease accrual associated with the Denver location.
The lease on the Denver location was terminated in February 2011 and there are
no remaining lease obligations. The loss from discontinued operations of
($400,000) for the prior year three month period ended March 31, 2010
represents the results of operations attributable to our Commerce City,
Colorado dual-branded restaurant that was closed in March 2010 and our Denver,
Colorado co-developed restaurant that was closed in June 2010, as well as an
asset write-down and lease liability accrual of $334,000 related to the
Commerce City location.</p>



<p class=MsoBodyText style='margin-right:0in;line-height:normal'>The income from discontinued operations of $24,000 for
the six month period ended March 31, 2011 represents our lease liability costs
in excess of our accrued liability for the Commerce City location offset by a
reversal of the $31,000 lease accrual associated with the Denver location. The
loss from discontinued operations of $471,000 for the prior year six month
period ended March 31, 2010 represents the results of operations attributable
to our Commerce City, Colorado dual-branded restaurant that was closed in March
2010 and our Denver, Colorado co-developed restaurant that was closed in June
2010, as well as an asset write-down and lease liability accrual of $334,000
related to the Commerce City location. </p>



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

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

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

<p class=MsoNormal style='text-align:justify'>As
of March 31, 2011, we had $987,000 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 and capital improvements to existing restaurants
in fiscal 2011 and beyond. As of March 31, 2011, we had a working capital
deficit of $573,000 primarily due to 2010 property taxes of approximately
$400,000 due in April 2011. We will require additional capital sources for the
development of new restaurants.</p>



<p class=MsoNormal style='text-align:justify'>We
entered into a purchase and sale agreement for the sale of two company-owned
restaurants in Colorado Springs, Colorado that was effective February 1, 2011.
The sale of one restaurant occurred in February, 2011 and the sale of the
second restaurant is anticipated to occur on or prior to May 31, 2011. The net
proceeds from the sale of the first restaurant in February were $99,000 and
resulted in a gain on the sale of approximately $71,000. The net proceeds for
the sale of the second restaurant are estimated to be $169,000 with an
estimated gain on the sale of $62,000.</p>



<p class=MsoBodyText style='margin-right:0in;line-height:normal'><i>Financing Activities</i></p>

<p class=MsoNormal style='text-align:justify'><u>Wells
Fargo Note Payable:</u> 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.&nbsp; As previously reported, we were in
default of certain financial loan covenants and had been operating under a
forbearance and reservation of rights agreement with Wells Fargo.&nbsp;&nbsp; As
previously disclosed in the Company's current report on Form 8-K filed December
17, 2010, we entered into a new Credit and Loan Agreement that modified the
loan covenants and provided additional collateral to Wells Fargo for the
remaining loan balance of $642,142. In addition we are using $90,000 of the
proceeds from the sale of two company-owned restaurants in Colorado Springs,
Colorado to further reduce the note payable over the next ten months and
thereby releasing certain collateral.&nbsp; The loan covenants were modified to
require minimum Tangible Net Worth of $2,500,000, Total Liabilities Divided by
Tangible Net Worth not greater than 3.0 to 1.0 and an EBITDA Coverage Ratio not
less than 0.9 to 1.0 as of the end of the first fiscal quarter of 2012, not
less than 1.2 to 1.0 as of the end of the second fiscal quarter of 2012 and not
less than 1.5 to 1.0 thereafter. As of March 31, 2011 we are in compliance with
all loan covenants.</p>

<p class=MsoNormal align=center style='text-align:center'>18</p>



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

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<p class=MsoNormal style='text-align:justify'><u>PFGI
II LLC Promissory Note:</u> 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. Effective January 2, 2010, 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. In connection with the agreement, the
Company issued a three-year warrant dated January 2, 2010 to PFGI II, LLC which
provides that PFGI II, LLC may at any time from January 2, 2010 until December
31, 2012 purchase up to 37,537 shares of the Company's common stock at an
exercise price of $3.33 per share. The number of shares purchasable upon
exercise of the warrant 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 issued to PFGI
II, LLC was determined to be $79,000 with 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 $79,000 was charged to the note
discount and credited to Additional Paid in Capital. The note discount is being
amortized over the term of thirty six months and charged to interest expense.</p>



<p class=MsoNormal style='text-align:justify'>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 a first deed of trust on one real property funded by the line
of credit. The total outstanding balance on the promissory note was $1,656,000
at March 31, 2011.&nbsp; Of the $1,656,000 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 marketed in the sale-leaseback market.&nbsp; On December 5, 2010 the
company sold a parcel of land in Aurora, Colorado and used approximately
$812,000 of the net proceeds to reduce the loan balance.</p>



<p class=MsoNormal style='text-align:justify'><u>Golden
Bridge Loan Agreement:</u> On April 20,
2009 as reported on Form 8-K, 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 were all members of the Company's Board of
Directors at the time of the transaction and stockholders of the Company, are
the sole members of Golden Bridge.&nbsp; The loan was repaid in full on December 13,
2010 from the proceeds of the SII Investment Transaction (see &quot;SII Investment
Transaction&quot; below).</p>



<p class=MsoNormal style='text-align:justify'>In
connection with the Golden Bridge Loan, the Company issued a three-year warrant
dated April 20, 2009 to Golden Bridge which provides that Golden Bridge may at
any time from April 20, 2009 until April 20, 2012 purchase up to 30,833 shares
of the Company's common stock at an exercise price of $3.45 per share.&nbsp; The
number of shares purchasable upon exercise of the warrant 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 issued to Golden Bridge was determined to be $42,000. The note discount
was amortized over fourteen months and charged to interest expense.</p>



<p class=MsoNormal style='text-align:justify'><u>W. Capital and John T. MacDonald Loan Agreement:</u> On
February 1, 2010, the Company entered into a loan agreement with W Capital,
Inc. (&quot;W Capital&quot;), John T. McDonald (&quot;McDonald&quot;) and Golden Bridge, pursuant
to which the lenders made loans totaling $200,000, with up to an additional
$200,000 available through April 30, 2010, to be used for restaurant marketing
and other working capital uses of GTDT.&nbsp; As set forth below, the loan agreement
was subsequently amended as of April 1, 2010 to remove Golden Bridge as a
lender and to replace it with additional loans from W Capital and McDonald.&nbsp; On
December 13, 2010, the outstanding principal amount of the Bridge Loans was
paid in full from the proceeds of the SII Investment Transaction, and accrued
interest on the Bridge Loans was converted into 26,477 shares of Common Stock.</p>



<p class=MsoNormal align=center style='text-align:center'>19</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>In connection with the Bridge
Loans, the Company issued warrants dated February 1, 2010 to W Capital and
McDonald which provide that the lenders may at any time from February 1, 2010
until two years from the date of repayment or conversion of the Bridge Loans
purchase up to an aggregate of 16,667 shares of the Company's Common Stock at
an exercise price of 25% less than the average price of the Company's common
stock during the 20 days prior to the exercise date, provided, however, that
the exercise price shall not be below $2.25 per share nor above $3.24 per
share.&nbsp; Pursuant to the terms of the loan agreement, because the Bridge Loans
were not repaid prior to August 1, 2010, the Company issued warrants to W
Capital and McDonald for the purchase of 16,667 additional shares of the
Company's Common Stock upon the same terms as the initial warrants.&nbsp; The number
of shares purchasable upon exercise of the warrants issued to W Capital and
McDonald 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.&nbsp; The warrants will expire on December 12, 2012.</p>



<p class=MsoNormal style='text-align:justify'>The
fair value of the warrants issued February 1, 2010 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 was amortized over the term of seven months and
charged to interest expense.</p>



<p class=MsoNormal style='text-align:justify'>The
intrinsic value of the embedded beneficial conversion feature of the Bridge
Loans was determined to be $161,000. The intrinsic value of $161,000 was
charged to the note discount and credited to Additional Paid in Capital. The
note discount was amortized over the term of seven months and charged to
interest expense.</p>



<p class=MsoNormal style='text-align:justify'>The
fair value of the warrants issued August 1, 2010 was determined to be $36,000
with the following assumptions: 1) risk free interest rate of .70%, 2) an
expected life of 2.4 years, and 3) an expected dividend yield of zero. The fair
value of $36,000 was charged to the note discount and credited to Additional
Paid in Capital. The note discount was amortized over the term of five months
and charged to interest expense.</p>



<p class=MsoNormal><i><u>SII Investment
Transaction</u></i></p>

<p class=MsoNormal style='text-align:justify'>On
October 29, 2010, the Company and SII entered into the Purchase Agreement,
pursuant to which the Company agreed to sell, and SII agreed to purchase,
1,400,000 Shares of Common Stock at a purchase price of $1.50 per share, or an
aggregate purchase price of $2,100,000.&nbsp; The Purchase Agreement was amended on
December 13, 2010.&nbsp; On December 13, 2010, the Company and SII completed the SII
Investment Transaction through the issuance and sale of the Shares to SII.&nbsp; On
December 13, 2010, the Company and SII also entered into a Registration Rights
Agreement, pursuant to which the Company granted SII certain registration
rights with respect to resale of the Shares.&nbsp; As a result of the completion of
the SII Investment Transaction, SII became the beneficial owner of
approximately 51.4 percent of the Company's outstanding Common Stock.</p>



<p class=MsoNormal style='text-align:justify'>The
Purchase Agreement provides that for so long as SII holds more than 50 percent
of our outstanding common stock, (i) our Board of Directors shall consist of
seven members, and (ii) SII will have the right to designate four members of
our Board.&nbsp; In addition, the Purchase Agreement provides that for a period of
three years following the Closing, as long as SII continues to own at least 80
percent of its Common Stock acquired, SII will have a right of first refusal to
purchase additional securities which are offered and sold by the Company for
the purpose of maintaining its percentage interest in the Company.</p>



<p class=MsoNormal style='text-align:justify'>The
proceeds from the SII Investment Transaction were used to pay approximately
$288,000 of expenses related to the transaction, repay $585,000 in short term
loans, reduce accrued liabilities by $200,000, reduce accounts payable by
approximately $150,000 and the balance going to increase the Company's working
capital.</p>



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

<p class=MsoNormal style='text-align:justify'>We
do not have any plans for any significant capital expenditures for the balance
of fiscal 2011, other than normal recurring capital expenditures for existing
restaurants and installation of new menu boards. Additional commitments for the
development of new restaurants in fiscal 2011 and beyond will depend on the
Company's sales trends, cash generated from operations and our access to
additional capital.</p>



<p class=MsoNormal align=center style='text-align:center'>20</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><i>Cash Flows</i></p>

<p class=MsoBodyText style='margin-right:0in;line-height:normal'>Net cash used in operating activities was $594,000 for
the six months ended March 31, 2011. The net cash used in operating activities
for the six months ended March 31, 2011 was the result of a net loss of
($801,000) as well as cash and non-cash reconciling items totaling $207,000
(comprised of depreciation and amortization of $443,000, stock-based
compensation expense of $30,000, a deferred gain of $79,000, an adjustment to
the accretion for deferred rent of $31,000, a $107,000 increase in deposits and
other assets, an accounts payable decrease of $94,000 and a net decrease in
other operating assets and liabilities of $45,000).</p>



<p class=MsoBodyText style='margin-right: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
($1,477,000) as well as cash and non-cash reconciling items totaling $920,000
(comprised of depreciation and amortization of $580,000, stock based
compensation expense of $44,000, 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-right:0in;line-height:normal'>Net cash provided by investing activities for the six
months ended March 31, 2011 was $936,000 which reflects proceeds from the sale
of property of $946,000 and payments of $10,000 for miscellaneous restaurant
related capital expenditures.</p>



<p class=MsoBodyText style='margin-right: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-right:0in;line-height:normal'>Net cash provided by financing activities for the six
months ended March 31, 2011 was $216,000, which includes net proceeds of
$1,727,000 from the sale of common stock, principal payments on notes payable
and long term debt of $1,490,000 and distributions to non-controlling interests
of $21,000.</p>



<p class=MsoBodyText style='margin-right: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 align=left style='margin-right:0in;text-align:left;
line-height:normal'><i>Contingencies</i></p>

<p class=MsoNormal style='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=MsoNormal style='text-align:justify'><i>Subsequent
Events</i></p>

<p class=MsoNormal style='text-align:justify'>None.</p>



<p class=MsoBodyText style='margin-right:0in;line-height:normal'><b><u>Impact of Inflation</u></b></p>



<p class=MsoNormal style='text-align:justify'>In
fiscal 2010 our weighted food and packaging costs increased approximately 11%.&nbsp;
The cumulative weighted menu price increases taken during fiscal 2010 were
1.7%.&nbsp; Most of the 2010 menu price increases were taken in the last four months
of fiscal 2010 aggregating a 7.1% cumulative increase. In fiscal 2011 our
weighted food and packaging costs have increased approximately 4.7%. We took a
1.7% menu price increase in February 2011. We anticipate continued cost
pressure on several core commodities, including beef, bacon and dairy for the
remainder of fiscal 2011.We are planning moderate price increases in fiscal
2011, which may or may not be sufficient to recover increased commodity costs
or increases in other operating expenses.</p>



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



<p class=MsoNormal style='text-align:justify'>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=MsoBodyText align=center style='margin-right:0in;text-align:center;
line-height:normal'>21</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-right:0in;line-height:normal'><b>ITEM 3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK</b></p>



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

<p class=MsoNormal><b>&nbsp;</b></p>

<p class=MsoNormal><b>ITEM 4T.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; CONTROLS
AND PROCEDURES</b></p>



<p class=MsoNormal style='text-align:justify'><b>Conclusion
Regarding the Effectiveness of Disclosure Controls and Procedures</b></p>



<p class=MsoNormal style='text-align:justify'>Based
on an evaluation of the Company's disclosure controls and procedures (as
defined in Rules 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='text-align:justify'><b>Changes
in Internal Control over Financial Reporting</b></p>



<p class=MsoNormal style='text-align:justify'>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 31, 2011 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='text-align:center'><b><u>PART II - OTHER INFORMATION</u></b></p>

<p class=MsoNormal><b>&nbsp;</b></p>

<p class=MsoHeader style='text-indent:-.35pt'><b>ITEM
1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; LEGAL PROCEEDINGS</b></p>



<p class=MsoBodyText align=left style='margin-right:0in;text-align:left;
line-height:normal'>The Company is periodically
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-right:0in;text-align:left;
line-height:normal'><b>ITEM 1A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; RISK
FACTORS</b></p>



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



<p class=MsoBodyText align=left style='margin-right:0in;text-align:left;
text-indent:-.35pt;line-height:normal'><b>ITEM
2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS</b></p>



<p class=MsoBodyTextIndent style='margin:0in;margin-bottom:.0001pt'>&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; None.</p>



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

<p class=MsoBodyTextIndent style='margin:0in;margin-bottom:.0001pt'>&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; None.</p>



<p class=MsoList2 style='margin-left:0in;text-indent:0in'><b>ITEM 4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (REMOVED AND RESERVED)</b></p>



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



<p class=MsoList2 style='margin-left:0in;text-indent:0in'>&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; None.</p>

<p class=MsoHeader><b>&nbsp;</b></p>

<p class=MsoHeader><b>ITEM 6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; EXHIBITS</b></p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibits.&nbsp;
The following exhibits are furnished as part of this report:</p>



<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='border-collapse:collapse'>
 <tr>
  <td width=97 valign=top style='width:72.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><u>Exhibit No.</u></p>
  </td>
  <td width=541 valign=top style='width:405.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><u>Description</u></p>
  </td>
 </tr>
 <tr>
  <td width=97 valign=top style='width:72.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoHeader>*31.1</p>
  </td>
  <td width=541 valign=top style='width:405.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoHeader>Certification of Chief
  Executive Officer pursuant to 18 U.S.C. Section 1350</p>
  </td>
 </tr>
 <tr>
  <td width=97 valign=top style='width:72.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoHeader>*31.2</p>
  </td>
  <td width=541 valign=top style='width:405.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoHeader>Certification of Controller
  pursuant to 18 U.S.C. Section 1350</p>
  </td>
 </tr>
 <tr>
  <td width=97 valign=top style='width:72.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>*32.1</p>
  </td>
  <td width=541 valign=top style='width:405.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Certification of Chief
  Executive Officer and Controller pursuant to Section 906</p>
  </td>
 </tr>
</table>

<p class=MsoNormal>*filed herewith</p>



<p class=MsoNormal align=center style='text-align:center'>22</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>SIGNATURES</b></p>



<p class=MsoBodyText align=left style='margin-right: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 16, 2011</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>23</p>

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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.906 CERT
<SEQUENCE>2
<FILENAME>exhibit321certceoandcontc1.htm
<TEXT>
<html>

<head>
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<!-- Copyright 2006 E-Services, LLC.-->
<!-- All rights reserved EDGAR2.com -->



<title>_</title>


</head>

<body lang=EN-US>

<div class=WordSection1>

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

<p class=titlec align=center style='margin:0in;margin-bottom:.0001pt;
text-align:center'><b>CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,</b></p>



<p class=titlec align=center style='margin:0in;margin-bottom:.0001pt;
text-align:center'><b>AS ADOPTED PURSUANT TO</b></p>



<p class=titlec align=center style='margin:0in;margin-bottom:.0001pt;
text-align:center'><b>SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002</b></p>



<p class=bodytext5 style='margin:0in;margin-bottom:.0001pt;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, 2011 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-top:0in;margin-right:0in;margin-bottom:0in;
margin-left:.5in;margin-bottom:.0001pt;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-top:0in;margin-right:0in;margin-bottom:0in;
margin-left:.5in;margin-bottom:.0001pt;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
 style='border-collapse:collapse'>
 <tr>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><i><u>/s/ Boyd E. Hoback</u></i></p>
  </td>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><i><u>/s/ Susan M. Knutson</u></i></p>
  </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>
 </tr>
 <tr>
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  <p class=MsoNormal>May 16, 2011</p>
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  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>May 16, 2011</p>
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</table>



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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.CERT
<SEQUENCE>3
<FILENAME>exhibit312certofcontrollerc1.htm
<TEXT>
<html>

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



<title>_</title>


</head>

<body lang=EN-US>

<div class=WordSection1>

<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;&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;&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;&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;&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;&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;&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;&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>



<p class=MsoNormal style='margin-left:1.0in;text-align:justify;text-indent:
-.5in'>(d)&nbsp;&nbsp;&nbsp;&nbsp;&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;&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;&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;&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 16, 2011</p>



<p class=MsoNormal><u>/s/ Susan M. Knutson</u></p>

<p class=MsoNormal>Susan M. Knutson</p>

<p class=MsoFooter>Controller</p>

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

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

</div>





</div>

</body>

</html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.CERT
<SEQUENCE>4
<FILENAME>exhibit311certceoc2.htm
<TEXT>
<html>

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



<title>_</title>


</head>

<body lang=EN-US>

<div class=WordSection1>

<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;&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;&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;&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;&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;&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;line-height:11.4pt'>(b)&nbsp;&nbsp;&nbsp;&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;&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>



<p class=MsoNormal style='margin-left:1.0in;text-align:justify;text-indent:
-.5in'>(d)&nbsp;&nbsp;&nbsp;&nbsp;&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;&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;&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;&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 16, 2011</p>



<p class=MsoNormal><u>/s/ Boyd E. Hoback</u></p>

<p class=MsoNormal>Boyd E. Hoback</p>

<p class=MsoFooter>President and Chief Executive
Officer</p>

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

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

</div>





</div>

</body>

</html>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
