UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended April 1, 2025
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number: 0-18590
Good Times Restaurants Inc.
(Exact Name of Registrant as Specified in Its Charter)

NEVADA |  | 84-1133368
(State or Other Jurisdiction of Incorporation or Organization) |  | (I.R.S. Employer Identification Number)

651 CORPORATE CIRCLE, GOLDEN, CO 80401
(Address of Principal Executive Offices, Including Zip Code)
(303) 384-1400
(Registrant's Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:

Title of each class | Trading Symbol(s) | Name of each exchange on which registered
Common Stock $.001 par value | GTIM | NASDAQ Capital Market

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.
| Yes ☒ | No ☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
| Yes ☒ | No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or, an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company”, in Rule 12b-2 of the Exchange Act.

Large accelerated filer | ☐ |  | Accelerated filer | ☐
Non-accelerated filer | ☒ |  | Smaller reporting company | ☒
| Emerging growth company | ☐

If an emerging growth company, indicated by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
| Yes ☐ | No ☒
As of April 29, 2025, there were 10,590,407 shares of the Registrant's common stock, par value $0.001 per share, outstanding.

Form 10-Q

Quarter Ended April 1, 2025

| INDEX |  | PAGE
| PART I - FINANCIAL INFORMATION |  |
Item 1. | Financial Statements |  | 3
| Condensed Consolidated Balance Sheets (unaudited) as of April 1, 2025 and September 24, 2024 |  | 3
| Condensed Consolidated Statements of Operations (unaudited) for the three and six periods ended April 1, 2025 and March 26, 2024 |  | 4
| Consolidated Statements of Shareholders’ Equity (unaudited) for the fiscal year-to-date periods ended April 1, 2025 and March 26, 2024 |  | 5 - 6
| Condensed Consolidated Statements of Cash Flows (unaudited) for the fiscal year-to-date periods ended April 1, 2025 and March 26, 2024 |  | 7
| Notes to Condensed Consolidated Financial Statements (unaudited) |  | 8
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |  | 15
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |  | 23
Item 4. | Controls and Procedures |  | 23
| PART II – OTHER INFORMATION |  |
Item 1. | Legal Proceedings |  | 24
Item 1A. | Risk Factors |  | 24
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |  | 24
Item 3. | Defaults Upon Senior Securities |  | 25
Item 4. | Mine Safety Disclosures |  | 25
Item 5. | Other Information |  | 25
Item 6. | Exhibits |  | 25
| Signatures |  | 26

| 2 |

Table of Contents

| ITEM 1. | FINANCIAL STATEMENTS

Good Times Restaurants Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)

(In thousands, except share and per share data)

|  | April 1, 2025 |  |  | September 24, 2024 |
ASSETS |  |  |  |  |  |  |  |
CURRENT ASSETS: |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 2,712 |  |  | $ | 3,853 |
Inventories |  |  | 1,424 |  |  |  | 1,419 |
Receivables |  |  | 786 |  |  |  | 890 |
Prepaid expenses and other |  |  | 1,165 |  |  |  | 395 |
Total current assets |  |  | 6,087 |  |  |  | 6,557 |
PROPERTY AND EQUIPMENT: |  |  |  |  |  |  |  |
Land and land improvements |  |  | 1,113 |  |  |  | 1,113 |
Buildings |  |  | 5,108 |  |  |  | 4,990 |
Leasehold improvements |  |  | 38,863 |  |  |  | 39,610 |
Fixtures and equipment |  |  | 33,093 |  |  |  | 34,814 |
Total property and equipment |  |  | 78,177 |  |  |  | 80,527 |
Less accumulated depreciation and amortization |  |  | (54,929 | ) |  |  | (57,730 | )
Total net property and equipment |  |  | 23,248 |  |  |  | 22,797 |
OTHER ASSETS: |  |  |  |  |  |  |  |
Operating lease right-of-use assets, net |  |  | 35,389 |  |  |  | 35,671 |
Deferred tax assets, net |  |  | 12,153 |  |  |  | 12,207 |
Notes receivable |  |  | 142 |  |  |  | - |
Deposits and other assets |  |  | 233 |  |  |  | 242 |
Trademarks |  |  | 3,900 |  |  |  | 3,900 |
Goodwill |  |  | 5,713 |  |  |  | 5,713 |
Other intangibles, net |  |  | 63 |  |  |  | 31 |
Total other assets |  |  | 57,593 |  |  |  | 57,764 |
TOTAL ASSETS |  | $ | 86,928 |  |  | $ | 87,118 |
LIABILITIES AND SHAREHOLDERS’ EQUITY |  |  |  |  |  |  |  |
CURRENT LIABILITIES: |  |  |  |  |  |  |  |
Accounts payable |  | $ | 3,126 |  |  | $ | 3,059 |
Current portion of operating lease liabilities |  |  | 6,281 |  |  |  | 6,161 |
Other accrued liabilities |  |  | 6,153 |  |  |  | 6,437 |
Current maturities of long-term debt |  |  | 31 |  |  |  | 30 |
Total current liabilities |  |  | 15,591 |  |  |  | 15,687 |
LONG-TERM LIABILITIES: |  |  |  |  |  |  |  |
Long-term debt, net of current portion |  |  | 2,574 |  |  |  | 842 |
Operating lease liabilities, net of current portion |  |  | 36,380 |  |  |  | 37,396 |
Deferred and other liabilities |  |  | 91 |  |  |  | 105 |
Total long-term liabilities |  |  | 39,045 |  |  |  | 38,343 |
SHAREHOLDERS’ EQUITY: |  |  |  |  |  |  |  |
Good Times Restaurants Inc. shareholders’ equity: |  |  |  |  |  |  |  |
Preferred stock, $.01 par value; 5,000,000 shares authorized, no shares issued and outstanding as of April 1, 2025 and September 24, 2024 |  |  | - |  |  |  | - |
Common stock, $.001 par value; 50,000,000 shares authorized; 12,977,433 issued; and 10,598,407 and 10,712,367 outstanding as of April 1, 2025 and September 24, 2024, respectively |  |  | 13 |  |  |  | 13 |
Capital contributed in excess of par value |  |  | 56,842 |  |  |  | 56,835 |
Treasury stock, at cost; 2,379,026 and 2,265,066 shares as of April 1, 2025 and September 24, 2024, respectively |  |  | (7,158 | ) |  |  | (6,855 | )
Accumulated deficit |  |  | (18,082 | ) |  |  | (17,622 | )
Total Good Times Restaurants Inc. shareholders’ equity |  |  | 31,615 |  |  |  | 32,371 |
Non-controlling interests |  |  | 677 |  |  |  | 717 |
Total shareholders’ equity |  |  | 32,292 |  |  |  | 33,088 |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |  | $ | 86,928 |  |  | $ | 87,118 |

See accompanying notes to consolidated financial statements (unaudited)

| 3 |

Table of Contents

Good Times Restaurants Inc. and Subsidiaries
Condensed Consolidated Statements of Operations (Unaudited)

(In thousands except share and per share data)

|  | Quarter Ended |  |  | Year-to-Date |
|  | April 1, 2025 (13 Weeks) |  |  | March 26, 2024 (13 Weeks) |  |  | April 1, 2025 (27 Weeks) |  |  | March 26, 2024 (26 Weeks) |
NET REVENUES: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Restaurant sales |  | $ | 34,140 |  |  | $ | 35,265 |  |  | $ | 70,105 |  |  | $ | 68,211 |
Franchise and other revenues |  |  | 139 |  |  |  | 183 |  |  |  | 507 |  |  |  | 394 |
Total net revenues |  |  | 34,279 |  |  |  | 35,448 |  |  |  | 70,612 |  |  |  | 68,605 |
RESTAURANT OPERATING COSTS: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Food and packaging costs |  |  | 10,477 |  |  |  | 10,599 |  |  |  | 21,840 |  |  |  | 20,926 |
Payroll and other employee benefit costs |  |  | 11,826 |  |  |  | 12,266 |  |  |  | 24,609 |  |  |  | 23,890 |
Restaurant occupancy costs |  |  | 2,583 |  |  |  | 2,613 |  |  |  | 5,266 |  |  |  | 5,118 |
Other restaurant operating costs |  |  | 5,128 |  |  |  | 5,105 |  |  |  | 10,134 |  |  |  | 9,833 |
Preopening costs |  |  | - |  |  |  | - |  |  |  | 8 |  |  |  | - |
Depreciation and amortization |  |  | 996 |  |  |  | 926 |  |  |  | 2,014 |  |  |  | 1,853 |
Total restaurant operating costs |  |  | 31,010 |  |  |  | 31,509 |  |  |  | 63,871 |  |  |  | 61,620 |
General and administrative costs |  |  | 2,578 |  |  |  | 2,564 |  |  |  | 5,166 |  |  |  | 4,902 |
Advertising costs |  |  | 705 |  |  |  | 824 |  |  |  | 1,569 |  |  |  | 1,916 |
Impairment of long-lived assets and ROU assets |  |  | 494 |  |  |  | - |  |  |  | 494 |  |  |  | - |
(Gain) loss on restaurant and equipment asset sales |  |  | 6 |  |  |  | 4 |  |  |  | (51 | ) |  |  | (6 | )
Litigation contingencies |  |  | - |  |  |  | (97 | ) |  |  | - |  |  |  | (97 | )
(LOSS) INCOME FROM OPERATIONS: |  |  | (514 | ) |  |  | 644 |  |  |  | (437 | ) |  |  | 270 |
OTHER INCOME (EXPENSE): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest and other expense, net |  |  | (56 | ) |  |  | (42 | ) |  |  | (102 | ) |  |  | (74 | )
Other income |  |  | - |  |  |  | - |  |  |  | 140 |  |  |  | - |
Total other income (expense) |  |  | (56 | ) |  |  | (42 | ) |  |  | 38 |  |  |  | (74 | )
NET (LOSS) INCOME BEFORE INCOME TAXES: |  |  | (570 | ) |  |  | 602 |  |  |  | (399 | ) |  |  | 196 |
Provision for income taxes |  |  | (57 | ) |  |  | 78 |  |  |  | (54 | ) |  |  | 1 |
NET (LOSS) INCOME: |  | $ | (627 | ) |  | $ | 680 |  |  | $ | (453 | ) |  | $ | 197 |
Loss (income) attributable to non-controlling interests |  |  | 3 |  |  |  | (62 | ) |  |  | (7 | ) |  |  | (135 | )
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS |  | $ | (624 | ) |  | $ | 618 |  |  | $ | (460 | ) |  | $ | 62 |
NET (LOSS) INCOME PER SHARE, ATTRIBUTABLE TO COMMON SHAREHOLDERS: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic |  | $ | (0.06 | ) |  | $ | 0.06 |  |  | $ | (0.04 | ) |  | $ | 0.01 |
Diluted |  | $ | (0.06 | ) |  | $ | 0.06 |  |  | $ | (0.04 | ) |  | $ | 0.01 |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic |  |  | 10,628,318 |  |  |  | 11,136,207 |  |  |  | 10,656,481 |  |  |  | 11,256,893 |
Diluted |  |  | 10,628,318 |  |  |  | 11,230,717 |  |  |  | 10,656,481 |  |  |  | 11,352,592 |

See accompanying notes to consolidated financial statements (unaudited)

| 4 |

Table of Contents

Good Times Restaurants Inc. and Subsidiaries
Consolidated Statements of Shareholders’ Equity (Unaudited)
for the Year-to-Date Period Ended April 1, 2025

(In thousands, except share and per share data)

|  |  | Treasury Stock, at cost |  |  |  | Common Stock |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  | Shares |  |  |  | Amount |  |  |  | Outstanding Shares |  |  |  | Par Value |  |  |  | Capital Contributed in Excess of Par Value |  |  |  | Non- Controlling Interest In Partnerships |  |  |  | Accumulated Deficit |  |  |  | Total |
BALANCES, September 24, 2024 |  |  | 2,265,066 |  |  | $ | (6,855 | ) |  |  | 10,712,367 |  |  | $ | 13 |  |  | $ | 56,835 |  |  | $ | 717 |  |  | $ | (17,622 | ) |  | $ | 33,088 |
Stock-based compensation cost |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 35 |  |  |  | - |  |  |  | - |  |  |  | 35 |
Repurchases of common stock |  |  | 59,125 |  |  |  | (164 | ) |  |  | (59,125 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (164 | )
Non-controlling interests: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Income |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 10 |  |  |  | - |  |  |  | 10 |
Distributions |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (42 | ) |  |  | - |  |  |  | (42 | )
Net income attributable to Good Times Restaurants Inc and comprehensive income |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 164 |  |  |  | 164 |
BALANCES, December 31, 2024 |  |  | 2,324,191 |  |  | $ | (7,019 | ) |  |  | 10,653,242 |  |  | $ | 13 |  |  | $ | 56,870 |  |  | $ | 685 |  |  | $ | (17,458 | ) |  | $ | 33,091 |
Stock-based compensation cost |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 30 |  |  |  | - |  |  |  | - |  |  |  | 30 |
Cash-settled restricted stock units |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (58 | ) |  |  |  |  |  |  |  |  |  |  | (58 | )
Repurchases of common stock |  |  | 54,835 |  |  |  | (139 | ) |  |  | (54,835 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (139 | )
Non-controlling interests: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loss |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (3 | ) |  |  | - |  |  |  | (3 | )
Distributions |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (5 | ) |  |  | - |  |  |  | (5 | )
Net loss attributable to Good Times Restaurants Inc and comprehensive income |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (624 | ) |  |  | (624 | )
BALANCES, April 1, 2025 |  |  | 2,379,026 |  |  | $ | (7,158 | ) |  |  | 10,598,407 |  |  | $ | 13 |  |  | $ | 56,842 |  |  | $ | 677 |  |  | $ | (18,082 | ) |  | $ | 32,292 |

See accompanying notes to consolidated financial statements (unaudited)

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Table of Contents

Good Times Restaurants Inc. and Subsidiaries
Consolidated Statements of Shareholders’ Equity (Unaudited)
for the Year-to-Date Period Ended March 26, 2024

(In thousands, except share and per share data)

|  |  | Treasury Stock, at cost |  |  |  | Common Stock |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  | Shares |  |  |  | Amount |  |  |  | Outstanding Shares |  |  |  | Par Value |  |  |  | Capital Contributed in Excess of Par Value |  |  |  | Non- Controlling Interest In Partnerships |  |  |  | Accumulated Deficit |  |  |  | Total |
BALANCES, September 26, 2023 |  |  | 1,530,846 |  |  | $ | (4,908 | ) |  |  | 11,446,587 |  |  | $ | 13 |  |  | $ | 56,701 |  |  | $ | 423 |  |  | $ | (19,235 | ) |  | $ | 32,994 |
Stock-based compensation cost |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 38 |  |  |  | - |  |  |  | - |  |  |  | 38 |
Treasury Shares Purchased |  |  | 160,772 |  |  |  | (438 | ) |  |  | (160,772 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (438 | )
Non-controlling interests: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Income |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 73 |  |  |  | - |  |  |  | 73 |
Distributions |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (29 | ) |  |  | - |  |  |  | (29 | )
Net loss attributable to Good Times Restaurants Inc and comprehensive income |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (556 | ) |  |  | (556 | )
BALANCES, December 26, 2023 |  |  | 1,691,618 |  |  | $ | (5,346 | ) |  |  | 11,285,815 |  |  | $ | 13 |  |  | $ | 56,739 |  |  | $ | 467 |  |  | $ | (19,791 | ) |  | $ | 32,082 |
Stock-based compensation cost |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 40 |  |  |  | - |  |  |  | - |  |  |  | 40 |
Treasury Shares Purchased |  |  | 252,496 |  |  |  | (646 | ) |  |  | (252,496 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (646 | )
Non-controlling interests: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Income |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 62 |  |  |  | - |  |  |  | 62 |
Distributions |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (21 | ) |  |  | - |  |  |  | (21 | )
Net income attributable to Good Times Restaurants Inc and comprehensive income |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 618 |  |  |  | 618 |
BALANCES, March 26, 2024 |  |  | 1,944,114 |  |  | $ | (5,992 | ) |  |  | 11,033,319 |  |  | $ | 13 |  |  | $ | 56,779 |  |  | $ | 508 |  |  | $ | (19,173 | ) |  | $ | 32,135 |

See accompanying notes to consolidated financial statements (unaudited)

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Table of Contents

Good Times Restaurants Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)

(In thousands)

|  | Fiscal Year-to-Date Period Ended |
|  | April 1, 2025 (27 Weeks) |  |  | March 26, 2024 (26 Weeks) |
CASH FLOWS FROM OPERATING ACTIVITIES: |  |  |  |  |  |  |  |
Net (loss) income |  | $ | (453 | ) |  | $ | 197 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: |  |  |  |  |  |  |  |
Depreciation and amortization |  |  | 2,071 |  |  |  | 1,899 |
Net change in ROU assets and operating lease liabilities |  |  | (1,050 | ) |  |  | (319 | )
Recognition of deferred gain on sale of restaurant building |  |  | (8 | ) |  |  | (19 | )
Impairment of long-lived assets |  |  | 494 |  |  |  | - |
Loss on asset disposals |  |  | 23 |  |  |  | 13 |
Stock-based compensation expense |  |  | 65 |  |  |  | 78 |
Provision for income taxes |  |  | 54 |  |  |  | (1 | )
Changes in operating assets and liabilities: |  |  |  |  |  |  |  |
(Increase) decrease in: |  |  |  |  |  |  |  |
Receivables and prepaids |  |  | (673 | ) |  |  | (698 | )
Inventories |  |  | 16 |  |  |  | (27 | )
Deposits and other assets |  |  | 8 |  |  |  | 11 |
Notes receivable |  |  | (142 | ) |  |  | - |
Accounts payable |  |  | 91 |  |  |  | 129 |
Accrued and other liabilities |  |  | (300 | ) |  |  | 252 |
Net cash provided by operating activities |  |  | 196 |  |  |  | 1,515 |
CASH FLOWS FROM INVESTING ACTIVITIES: |  |  |  |  |  |  |  |
Payments for the purchase of property and equipment |  |  | (2,235 | ) |  |  | (1,063 | )
Acquisition of restaurants from franchisees, net of cash acquired |  |  | (504 | ) |  |  | - |
Proceeds from the sale of property and equipment |  |  | 77 |  |  |  | - |
Net cash used in investing activities |  |  | (2,662 | ) |  |  | (1,063 | )
CASH FLOWS FROM FINANCING ACTIVITIES: |  |  |  |  |  |  |  |
Borrowings against credit facility |  |  | 2,250 |  |  |  | 1,000 |
Payments on long-term debt |  |  | (517 | ) |  |  | (500 | )
Repurchases of common stock |  |  | (303 | ) |  |  | (1,084 | )
Payment for restricted stock vesting settled in cash |  |  | (58 | ) |  |  | - |
Distributions to non-controlling interests |  |  | (47 | ) |  |  | (50 | )
Net cash provided by (used in) financing activities |  |  | 1,325 |  |  |  | (634 | )
DECREASE IN CASH AND CASH EQUIVALENTS |  |  | (1,141 | ) |  |  | (182 | )
CASH AND CASH EQUIVALENTS, beginning of period |  |  | 3,853 |  |  |  | 4,182 |
CASH AND CASH EQUIVALENTS, end of period |  | $ | 2,712 |  |  | $ | 4,000 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: |  |  |  |  |  |  |  |
Cash paid for interest |  | $ | 112 |  |  | $ | 36 |
Change in accounts payable attributable to the purchase of property and equipment |  | $ | 24 |  |  | $ | (31 | )

See accompanying notes to consolidated financial statements (unaudited)

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GOOD TIMES RESTAURANTS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Tabular dollar amounts in thousands, except share and per share data)

| Note 1. | Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of Good Times Restaurants Inc. (the “Company”) and its wholly owned subsidiaries as well as one partnership in which the Company is the general partner. All significant intercompany balances and transactions have been eliminated in consolidation.

The Company owns a 50% interest in a limited partnership which owns six Good Times restaurants, is the sole general partner, and receives a management fee from the partnership. Because the Company exercises complete management control over all decisions for the partnership, except for certain veto rights, the financial statements of the partnership are consolidated into the Company’s consolidated financial statements.

The Company operates and licenses full-service restaurants under the brand Bad Daddy’s Burger Bar (“Bad Daddy’s”) that are primarily located in Colorado and in the Southeast region of the United States.

The Company operates and franchises drive-thru fast-food hamburger restaurants under the brand Good Times Burgers & Frozen Custard (“Good Times”), all of which are located in Colorado and Wyoming.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles and practices of the United States of America (“GAAP”) for interim financial information. 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 April 1, 2025 and the results of its operations and its cash flows for the fiscal quarters ended April 1, 2025 and March 26, 2024. Operating results for the fiscal quarter ended April 1, 2025 are not necessarily indicative of the results that may be expected for the year ending September 30, 2025. The condensed consolidated balance sheet as of April 1, 2025 is derived from the audited financial statements but does not include all disclosures required by GAAP. As a result, these condensed consolidated financial statements should be read in conjunction with the Company’s Form 10-K for the fiscal year ended September 24, 2024.

Fiscal Year – The Company’s fiscal year is a 52/53-week year ending on the last Tuesday of September. In a 52-week fiscal year, each of the Company’s quarterly periods consist of 13 weeks. The additional week in a 53-week fiscal year is added to the first quarter, making such quarter consist of 14 weeks. The quarters ended April 1, 2025 and March 26, 2024 each consisted of 13 weeks.

Reclassification – Certain prior year balances have been reclassified to conform to the current year’s presentation. Such reclassifications had no effect on the net (loss) income.

Advertising Costs – The company utilizes Advertising Funds to administer certain advertising programs for both the Bad Daddy’s and Good Times brands that benefit both us and our franchisees. We and our franchisees are required to contribute a percentage of gross sales to the fund. The contributions to these funds are designated and segregated for advertising. We consolidate the Advertising Funds into our financial statements whereby contributions from franchisees, when received, are recorded and included as a component of franchise revenues. Contributions to the Advertising Funds from our franchisees were $36,000 and $93,000 for the two quarters ended April 1, 2025 and March 26, 2024, respectively.

Receivables – Our receivables typically consist of royalties and other fees due to us from independent franchisees of our brands as well as product rebates and other incentives due to us under agreements with our food and beverage vendors, payments due from third party delivery and online ordering partners, and payments due to us for sales of gift cards to third party retailers.

Receivables consist of the following as of:

|  | April 1, 2025 |  |  | September 24, 2024 |
Third party delivery partners |  | $ | 339 |  |  | $ | 280 |
Vendor rebates and incentives |  |  | 332 |  |  |  | 437 |
Third party retailers |  |  | 79 |  |  |  | 120 |
Franchise and other |  |  | 36 |  |  |  | 53 |
Total |  | $ | 786 |  |  | $ | 890 |

| Note 2. | Recent Accounting Pronouncements

ASU 2023-07–Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures was issued November 2023 and is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. It is to be applied retrospectively. The Company expects to retrospectively implement ASU 2023-07 in fiscal year 2025 and does not anticipate that it will have a material effect on the Company’s consolidated financial statements.

ASU 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures was issued December 2023 and is effective for fiscal years beginning after December 15, 2024. It is to be applied prospectively. The Company expects to implement ASU 2023-09 prospectively in fiscal year 2026 and does not expect that it will have a material effect on the Company’s consolidated financial statements.

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ASU 2024-03 Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses was issued November 2024 and is effective for fiscal years beginning after December 15, 2026 and interim periods beginning after December 17, 2027. It may be applied either prospectively or retrospectively and early implementation is allowed. The Company is assessing the timing and method of implementation of this accounting pronouncement but does not expect that it will have a material effect on the Company’s consolidated financial statements.

The Company reviewed all other recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a significant impact on the Company’s consolidated financial statements.

| Note 3. | Revenue

Revenue Recognition. Revenues consist primarily of sales from restaurant operations and franchise revenue, which includes franchisee contributions to advertising funds. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer, typically a restaurant customer or a franchisee/licensee.

The Company recognizes revenues in the form of restaurant sales at the time of the sale when payment is made by the customer, as the Company has completed its performance obligation, namely the provision of food and beverage, and the accompanying customer service, during the customer’s visit to the restaurant.

The Company sells gift cards to customers and recognizes revenue from gift cards primarily in the form of restaurant revenue. Gift card breakage, which is recognized when the likelihood of a gift card being redeemed is remote, is determined based upon the Company’s historic redemption patterns, and has historically been immaterial to our overall financial statements, and breakage for cards sold under the Good Times brand has continued to be so. During the first quarter of fiscal 2022, the Company sold Bad Daddy’s gift cards with significant aggregate value through third-party retail partners, many of which were unredeemed as of April 1, 2025 and for which breakage was recognized during the two quarters ended April 1, 2025 based upon the Company’s existing policy for breakage recognition. Breakage in the amount of $244,000 and $26,000 was included in Franchise and other revenues in the two fiscal quarters ended April 1, 2025 and March 26, 2024, respectively.

The Company operates a loyalty program known as GT Rewards. With each purchase, GT Rewards members earn loyalty points that can be redeemed in the future for free products. Activity related to the new reward program is immaterial to the Company’s financial statements for the periods ended April 1, 2025 and March 26, 2024.

Revenues we receive from our franchise and license agreements include sales-based royalties and, from our franchise agreements, may also include advertising fund contributions, area development fees, and franchisee fees. We recognize sales-based royalties from franchisees and licensees as the underlying sales occur. We similarly recognize Advertising Fund contributions from franchisees as the underlying sales occur. The Company also provides its franchisees with services associated with opening new restaurants and operating them under franchise and development agreements in exchange for area development and franchise fees. The Company would capitalize these fees upon receipt from the franchisee and then would amortize those over the contracted franchise term as the services comprising the performance obligations are satisfied. We have not received material development or franchise fees in the years presented, and the primary performance obligations under existing franchise and development agreements have been satisfied prior to the earliest period presented in our financial statements.

| Note 4. | Prepaid expenses and other current assets

Prepaid expenses and other current assets consist of the following:

|  | April 1, 2025 |  |  | September 24, 2024 |
Prepaid insurance |  | $ | 434 |  |  | $ | - |
Prepaid software licenses and maintenance contracts |  |  | 294 |  |  |  | 241 |
Prepaid common area rental expenses |  |  | 167 |  |  |  | 17 |
Prepaid licenses and permits |  |  | 68 |  |  |  | 49 |
Other |  |  | 202 |  |  |  | 88 |
Total |  | $ | 1,165 |  |  | $ | 395 |

| Note 5. | Notes receivable

The Company is the holder of a promissory note in connection with the termination of an agreement in connection with the Company’s management services, and lease negotiations on behalf of a former franchisee, related to real estate previously subleased to a third party by the former franchisee. The former subtenant to that sublease, who is now the owner of the real estate, is the maker of the note. The three-year note carries an interest rate of 8.00% and amortizes over 25 years and 3-year initial maturity, with the full remaining principal balance due at maturity on October 16, 2027. As of April 1, 2025, the outstanding balance on the note was $144,000 , with the $2,000 current maturities portion included in receivables. We have recognized $140,000 of income related to the agreement termination which has been classified as Other Income in the two fiscal quarters ended April 1, 2025.

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| Note 6. | Goodwill and Intangible Assets

The following table presents goodwill and intangible assets as of April 1, 2025 and September 24, 2024 (in thousands):

|  | April 1, 2025 |  |  | September 24, 2024 |
|  |  | Gross Carrying Amount |  |  |  | Accumulated Amortization |  |  |  | Net Carrying Amount |  |  |  | Gross Carrying Amount |  |  |  | Accumulated Amortization |  |  |  | Net Carrying Amount |
Intangible assets subject to amortization: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non-compete agreements |  | $ | 90 |  |  | $ | (45 | ) |  | $ | 45 |  |  | $ | 50 |  |  | $ | (31 | ) |  | $ | 19 |
Reacquired franchise rights |  | $ | 27 |  |  | $ | (9 | ) |  | $ | 18 |  |  | $ | 15 |  |  | $ | (3 | ) |  | $ | 12 |
|  | $ | 117 |  |  | $ | (54 | ) |  | $ | 63 |  |  | $ | 65 |  |  | $ | (34 | ) |  | $ | 31 |
Indefinite-lived intangible assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trademarks |  | $ | 3,900 |  |  | $ | - |  |  | $ | 3,900 |  |  | $ | 3,900 |  |  | $ | - |  |  | $ | 3,900 |
Intangible assets, net |  | $ | 4,017 |  |  | $ | (54 | ) |  | $ | 3,963 |  |  | $ | 3,965 |  |  | $ | (34 | ) |  | $ | 3,931 |
Goodwill |  | $ | 5,713 |  |  | $ | - |  |  | $ | 5,713 |  |  | $ | 5,713 |  |  | $ | - |  |  | $ | 5,713 |

The Company had no goodwill impairment losses in the periods presented in the above table. The aggregate amortization expense related to these intangible assets subject to amortization was $20,000 for the two quarters ended April 1, 2025 and $10,000 for the two quarters ended March 26, 2024.

| Note 7. | Other Accrued Liabilities

Other accrued liabilities consist of the following:

|  | April 1, 2025 |  |  | September 24, 2024 |
Wages and other employee benefits |  | $ | 2,419 |  |  | $ | 2,681 |
Taxes, other than income taxes |  |  | 1,338 |  |  |  | 1,318 |
Gift card liability, net of breakage |  |  | 1,446 |  |  |  | 1,460 |
General expense accrual and other |  |  | 950 |  |  |  | 978 |
Total |  | $ | 6,153 |  |  | $ | 6,437 |

| Note 8. | Notes Payable and Long-Term Debt

Cadence Credit Facility. The Company and its wholly owned subsidiaries (the “Subsidiaries”) maintain an amended and restated credit agreement with Cadence Bank (“Cadence”). Pursuant to the credit agreement, as amended to date, Cadence agreed to loan the Company up to $8,000,000, with a maturity date of April 20, 2028 (the “Cadence Credit Facility”). The Cadence Credit Facility amended and restated the Company’s prior credit facility with Cadence in its entirety. The Cadence Credit Facility accrues commitment fees on the daily unused balance of the facility at a rate of 0.25%. The loans may from time to time consist of a mixture of SOFR Rate Loans and Base Rate Loans with differing interest rates based upon varying additions to the Federal Funds Rate, the Cadence prime rate or Term SOFR. Each of the Subsidiaries are guarantors of the Cadence Credit Facility. Proceeds from the Cadence Credit Facility, if and when drawn, may be used (i) to fund new restaurant development, (ii) to finance the buyout of non-controlling partners in certain restaurants, (iii) to finance the redemption, purchase or other acquisition of equity interests in the Company and (iv) for working capital and other general corporate purposes.

The Cadence Credit Facility includes customary affirmative and negative covenants and events of default. The Cadence Credit Facility also requires the Company to maintain various financial condition ratios, including minimum liquidity, an amended maximum leverage ratio and an amended minimum fixed charge coverage ratio. In addition, to the extent the aggregate outstanding balance under the revolver under the Cadence Credit Facility exceeds $4.0 million, the Company is required to meet a new specified leverage ratio, on a pro forma basis, before making further borrowings as well as certain restricted payments, investments and growth capital expenditures. As of the date of filing of this report, the Company was in compliance with each of these covenants under the Cadence Credit Facility.

As of April 1, 2025, the weighted average interest rate applicable to borrowings under the Cadence Credit Facility was 7.42%.

As a result of entering into the Cadence Credit Facility and the various amendments, the Company paid loan origination costs including professional fees of approximately $299,000 and is amortizing these costs over the term of the credit agreement. As of April 1, 2025, the unamortized balance of these fees was $82,000.

In connection with the Cadence Credit Facility, the Company and the Subsidiaries entered into an Amended and Restated Security and Pledge Agreement (the “Security Agreement”) with Cadence. Under the Security Agreement, the Cadence Credit Facility is secured by a first priority security interest in substantially all the assets of the Company and the Subsidiaries.

As of April 1, 2025, there were $2,250,000 of borrowings against the facility, all of which is due during the fiscal year ending September 2028 and is classified as a long-term liability in the accompanying balance sheet. Availability of the Cadence Credit Facility for borrowings is reduced by the outstanding face value of any letters of credit issued under the facility. As of April 1, 2025, there were approximately $10,000 in outstanding letters of credit issued under the facility, and approximately $5,740,000 of committed funds available.

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Parker Promissory Note. Good Times Drive Thru, Inc., a wholly owned subsidiary of the Company, is the maker of an unsecured promissory note in connection with the purchase of the previously franchised Good Times Burgers and Frozen Custard restaurant located in the Denver suburb of Parker, Colorado. JGN Management, Inc., the former franchisee, is the holder of the note. The Parker Promissory Note fully amortizes over its original ten-year life maturing on June 1, 2034, carries an interest rate of 5.00% and is, in all respects, subordinate to the Cadence Credit Facility. As of April 1, 2025, the outstanding principal balance on the Parker Promissory Note was $355,000. Annual principal maturities over the next five years are approximately $34,000 each year.

Total interest expense on notes payable was $53,000 and $37,000 for the quarters ended April 1, 2025 and March 26, 2024, respectively.

| Note 9. | (Loss) Earnings per Common Share

Our basic (loss) earnings per share calculation is computed based on the weighted-average number of common shares outstanding. Our diluted earnings per share calculation is computed based on the weighted-average number of common shares outstanding adjusted by the number of additional shares that would have been outstanding had the potentially dilutive common shares been issued. Potentially dilutive securities for this calculation consist of in-the-money outstanding stock options, restricted stock units and warrants (which were assumed to have been exercised at the average market price of the common shares during the reporting period). The treasury stock method is used to measure the dilutive impact of in-the-money stock options. As the Company was in a net loss position for both the quarter to date and year to date periods ended April 1, 2025, all potentially dilutive common shares are considered antidilutive.

The following table reconciles basic weighted-average shares outstanding to diluted weighted-average shares outstanding:

|  | Quarter Ended |  |  | Year-to-Date |
|  | April 1, 2025 |  |  | March 26, 2024 |  |  | April 1, 2025 |  |  | March 26, 2024 |
Weighted-average shares outstanding basic |  |  | 10,628,318 |  |  |  | 11,136,207 |  |  |  | 10,656,481 |  |  |  | 11,256,893 |
Effect of potentially dilutive securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Stock options |  |  | - |  |  |  | 5,260 |  |  |  | - |  |  |  | 6,449 |
Restricted stock units |  |  | - |  |  |  | 89,250 |  |  |  | - |  |  |  | 89,250 |
Weighted-average shares outstanding diluted |  |  | 10,628,318 |  |  |  | 11,230,717 |  |  |  | 10,656,481 |  |  |  | 11,352,592 |
Excluded from diluted weighted average shares outstanding: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Antidilutive |  |  | 482,749 |  |  |  | 383,623 |  |  |  | 449,233 |  |  |  | 383,623 |

| Note 10. | Contingent Liabilities and Liquidity

There may be various claims in process, matters in litigation, and other contingencies brought against the Company by employees, vendors, customers, franchisees, or other parties. Evaluating these contingencies is a complex process that may involve substantial judgment on the potential outcome of such matters, and the ultimate outcome of such contingencies may differ from our current analysis. We regularly review the adequacy of accruals and disclosures related to such contingent liabilities in consultation with legal counsel. While it is not possible to predict the outcome of these claims with certainty, it is management’s opinion that any reasonably possible losses associated with such contingencies have been adequately accrued or would be immaterial to our financial statements.

| Note 11. | Leases

The Company determines if a contract contains a lease at inception. The Company’s material long-term operating lease agreements are for the land and buildings for our restaurants as well as our corporate office. The initial lease terms range from 10 years to 20 years, most of which include renewal options of 10 to 15 years.

Components of operating lease costs are as follows for the fiscal quarters ended April 1, 2025 and March 26, 2024:

Lease cost |  | Classification |  | April 1, 2025 |  |  | March 26, 2024 |
Operating lease cost |  | Occupancy, Other restaurant operating costs and General and administrative expenses, net |  | $ | 1,855 |  |  | $ | 1,908 |
Variable lease cost |  | Occupancy |  |  | 2 |  |  |  | 10 |
Sublease income |  | Occupancy |  |  | (122 | ) |  |  | (125 | )
|  |  |  | $ | 1,735 |  |  | $ | 1,793 |

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Weighted average lease term and discount rate are as follows:

|  | April 1, 2025 |  |  | March 26, 2024 |
Weighted average remaining lease term (in years) |  |  | 6.99 |  |  |  | 7.54 |
Weighted average discount rate |  |  | 5.3 | % |  |  | 5.0 | %

Supplemental cash flow disclosures:

|  | April 1, 2025 |  |  | March 26, 2024 |
Cash paid for operating lease liabilities |  | $ | 4,036 |  |  | $ | 3,865 |
Non-cash operating lease assets obtained in exchange for operating lease liabilities |  | $ | 1,474 |  |  | $ | 452 |

Future minimum rent payments for our operating leases as of April 1, 2025 are as follows:

|  | Total |
One Year |  | $ | 8,407 |
Two Years |  |  | 8,162 |
Three Years |  |  | 7,753 |
Four Years |  |  | 6,564 |
Five Years |  |  | 5,679 |
Thereafter |  |  | 14,772 |
Total minimum lease payments |  |  | 51,337 |
Less: imputed interest |  |  | (8,676 | )
Present value of lease liabilities |  | $ | 42,661 |

The future minimum rental amounts above exclude the amortization of deferred lease incentives, renewal options that are not reasonably assured of renewal, and contingent rent. The Company generally has escalating rents over the term of the leases and records rent in accordance with GAAP which generally results in total base rent expense being recognized on a straight-line basis.

| Note 12. | Impairment of Long-Lived Assets and Goodwill

Long-Lived Assets. We review our long-lived assets including land, property, equipment, and lease right-of-use assets for impairment when there are factors that indicate that the carrying amount of an asset may not be recoverable. We assess recovery of assets at the individual restaurant level and typically include an analysis of historical cash flows, future operating plans, and cash flow projections in assessing whether there are indicators of impairment. The recoverability of assets to be held and used is measured by comparing the net book value of the assets of an individual restaurant to the fair value of those assets. This impairment process involves significant judgment in the use of estimates and assumptions pertaining to future projections and operating results.

There were impairments of $494,000 in the two quarters ended April 1, 2025, related primarily to lease right-of-use assets for restaurants generating insufficient income to contribute to rent, and which the Company believes are probable to close at the end of the current lease term; and new assets deployed in restaurants where impairment was previously assessed, and the Company’s current analysis indicated impairment of assets associated with those restaurants. There were no impairments of long-lived assets recorded in the two fiscal quarters ended March 26, 2024.

Trademarks. Trademarks have been determined to have an indefinite life. We evaluate our trademarks for impairment annually and on an interim basis as events and circumstances warrant by comparing the fair value of the trademarks with their carrying amount. There was no impairment required for the acquired trademarks as of April 1, 2025 and March 26, 2024.

Goodwill. Goodwill represents the excess of cost over fair value of the assets of businesses the Company acquired. Goodwill is not amortized, but rather, the Company is required to test goodwill for impairment on an annual basis or whenever indications of impairment arise. The Company considers its operations to be comprised of two reporting units: (1) Good Times restaurants and (2) Bad Daddy’s restaurants. As of April 1, 2025 and March 26, 2024, the Company had $96,000 of goodwill attributable to the Good Times reporting unit and $5,617,000 of goodwill attributable to its Bad Daddy’s reporting unit.

| Note 13. | Income Taxes

We account for income taxes using 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.

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The Company’s effective income tax rate for the three periods ended April 1, 2025 was (10.06%), an increase from the effective income tax rate of (12.82%) for the three periods ended March 26, 2024. The Company’s effective tax rate for the six periods ended April 1, 2025 was (13.43%), a decrease from an effective income tax rate of (1.83%) for the six periods ended March 26, 2024. The change is primarily due to a decrease in ordinary income from continuing operations before income taxes (or benefits), while the benefit associated with income tax credits stayed consistent.

The Company is subject to U.S. federal income tax and income tax in multiple U.S. state jurisdictions. The Company’s tax years corresponding to the Company’s fiscal years 2021 through 2024 remain open for examination by the authorities under the normal three-year statute of limitations. Should the Company utilize any of its U.S. or state NOLs, the tax year to which the original loss relates will remain open to examination. The Company believes that its income tax filing positions and deductions will be sustained upon audit and does not anticipate any adjustments that will result in a material adverse effect on the Company’s financial condition, results of operations, or cash flows. Therefore, no reserves for uncertain income tax positions have been recorded. The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. No accrual for interest and penalties was considered necessary as of April 1, 2025.

| Note 14. | Shareholders’ Equity

Stock-based Compensation. The Company has traditionally maintained incentive compensation plans that include provision for the issuance of equity-based awards. The Company established the 2008 Omnibus Equity Incentive Compensation Plan in 2008 (the “2008 Plan”) and has outstanding awards that were issued under the 2008 Plan. Subsequently, the 2008 Plan expired in 2018 and the Company established a new plan, the 2018 Omnibus Equity Incentive Plan (the “2018 Plan”) during the 2018 fiscal year, which was approved by shareholders on May 24, 2018. Future awards will be issued under the 2018 Plan. On February 8, 2022 the Company’s shareholders approved a proposal to increase the number of shares available for issuance under the 2018 Plan from 900,000 to 1,050,000, which currently represents the maximum number of shares available for issuance under the 2018 Plan.

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 service period (generally the vesting period of the grant). The Company recognizes the impact of forfeitures as forfeitures occur.

For the quarters ended April 1, 2025 and March 26, 2024, we recognized $30,000 and $40,000 respectively, related to our stock-based compensation arrangements. Our net (loss) income for the two quarters ended April 1, 2025 and March 26, 2024 includes $65,000 and $78,000, respectively, of compensation costs related to our stock-based compensation arrangements.

Non-controlling Interests. Non-controlling interests are presented as a separate item in the shareholders’ equity section of the condensed consolidated balance sheet. The amount of consolidated net income or loss attributable to non-controlling interests is presented on the face of the condensed consolidated statement of operations. Changes in a parent’s ownership interest in a subsidiary that do not result in deconsolidation are equity transactions, while changes in ownership interest that do result in deconsolidation of a subsidiary require gain or loss recognition based on the fair value on the deconsolidation date.

The equity interest of the unrelated limited partner is shown on the accompanying consolidated balance sheet in the shareholders’ equity section as a non-controlling interest and is adjusted each period to reflect the limited partner’s share of the net income or loss as well as any cash contributions or distributions to or from the limited partner for the period. The limited partner’s share of the net income or loss in the subsidiary is shown as non-controlling interest income or expense in the accompanying consolidated statement of operations. All inter-company accounts and transactions are eliminated.

The following table summarizes the activity in non-controlling interests during the two quarters ended April 1, 2025 (in thousands):

|  | Total |
Balance at September 24, 2024 |  | $ | 717 |
Income |  |  | 7 |
Distributions |  |  | (47 | )
Balance at April 1, 2025 |  | $ | 677 |

Non-controlling interests at the end of the quarter consisted of one joint-venture partnership involving six Good Times restaurants, in which the Company is the controlling partner and owns a 50.0% interest.

| Note 15. | Segment Reporting

All of our Bad Daddy’s compete in the full-service segment of the restaurant industry while our Good Times compete in the quick-service segment of the restaurant industry. We believe that providing this additional financial information for each of our brands will provide a better understanding of our overall operating results. (Loss) income from operations represents revenues less restaurant operating costs and expenses, directly allocable general and administrative expenses, and other restaurant-level expenses directly associated with each brand including depreciation and amortization, pre-opening costs and losses or gains on disposal of property and equipment. Unallocated corporate capital expenditures are presented below as reconciling items to the amounts presented in the consolidated financial statements.

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The following tables present information about our reportable segments for the respective periods (in thousands):

|  | Quarter Ended |  |  | Year-to-Date |
|  | April 1, 2025 (13 Weeks) |  |  | March 26, 2024 (13 Weeks) |  |  | April 1, 2025 (27 Weeks) |  |  | March 26, 2024 (26 Weeks) |
Revenues: |  |  |  |  |  |  |  |  |  |  |  |
Bad Daddy’s |  | $ | 24,917 |  |  | $ | 26,509 |  |  | $ | 51,304 |  |  | $ | 50,723 |
Good Times |  |  | 9,362 |  |  |  | 8,939 |  |  |  | 19,308 |  |  |  | 17,882 |
|  | $ | 34,279 |  |  | $ | 35,448 |  |  | $ | 70,612 |  |  | $ | 68,605 |
(Loss) income from operations: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Bad Daddy’s |  | $ | (161 | ) |  | $ | 382 |  |  | $ | 133 |  |  | $ | (381 | )
Good Times |  |  | (353 | ) |  |  | 262 |  |  |  | (570 | ) |  |  | 651 |
|  | $ | (514 | ) |  | $ | 644 |  |  | $ | (437 | ) |  | $ | 270 |
Capital expenditures: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Bad Daddy’s |  | $ | 311 |  |  | $ | 355 |  |  | $ | 854 |  |  | $ | 487 |
Good Times |  |  | 536 |  |  |  | 277 |  |  |  | 1,805 |  |  |  | 607 |
|  | $ | 847 |  |  | $ | 632 |  |  | $ | 2,659 |  |  | $ | 1,094 |

|  | April 1, 2025 |  |  | September 24, 2024 |
Property and equipment, net: |  |  |  |  |  |  |  |
Bad Daddy’s |  | $ | 16,637 |  |  | $ | 17,418 |
Good Times |  |  | 6,611 |  |  |  | 5,379 |
|  | $ | 23,248 |  |  | $ | 22,797 |
Total assets: |  |  |  |  |  |  |  |
Bad Daddy’s |  | $ | 61,457 |  |  | $ | 62,619 |
Good Times |  |  | 25,471 |  |  |  | 24,499 |
|  | $ | 86,928 |  |  | $ | 87,118 |

| Note 16. | Subsequent Events

None.

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| ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview. Good Times Restaurant Inc., through its subsidiaries (collectively, the “Company” or “we”, “us” or “our”) operates and licenses full-service hamburger-oriented restaurants under the name Bad Daddy’s Burger Bar (“Bad Daddy’s”) and operates and franchises hamburger-oriented drive-through restaurants under the name Good Times Burgers & Frozen Custard (“Good Times”).

Forward Looking Statements: 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 Section 21E of the Securities Exchange Act of 1934, as amended, and the disclosure of risk factors in the Company’s Form 10-K for the fiscal year ended September 24, 2024. Also, documents subsequently filed by the Company with the SEC and incorporated herein by reference may contain forward-looking statements. We caution investors that any forward-looking statements made by us are not guarantees of future performance and actual results could differ materially from those in the forward-looking statements as a result of various factors, including but not limited to the following:

| (I) | The disruption to our business from pandemics or other public health emergencies and the impact it could have on our results of operations, financial condition and prospects. The disruption and effect on our business may vary depending on the duration and extent of the pandemics and other public health emergencies and the impact of federal, state and local governmental actions and customer behavior in response.

| (II) | We compete with numerous well-established competitors who have substantially greater financial resources and longer operating histories than we do. Competitors have increasingly offered selected food items and combination meals, including hamburgers, at discounted prices, and continued discounting by competitors may adversely affect revenues and profitability of Company restaurants.

| (III) | We may be negatively impacted if we experience same store sales declines. Same store sales comparisons will be dependent, among other things, on the success of our advertising and promotion of new and existing menu items. No assurances can be given that such advertising and promotions will in fact be successful.

| (IV) | We may be negatively impacted if we are unable to pass on to customers, through menu price increases, the increased costs that we incur through inflation experienced in our input costs including both the cost of food and the cost of labor. Recent metrics have indicated that increased levels of price inflation are prevalent throughout the economy which have resulted in increases in commodity, labor and energy costs for both concepts as well as increased product substitutions, elevated freight costs, and increased variability in product quality. Further significant increases in inflation could affect the global and United States economies, which could have an adverse impact on our business and results of operations if we and our franchisees are not able to adjust prices sufficiently to offset the effect of cost increases without negatively impacting consumer demand. Additionally, tariffs threatened or implemented, or merely the lack of certainty about whether and which tariffs may be implemented could result in higher costs for products sourced from outside of the United States and negatively impact our business and results of operations.

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; increased wages and salaries for hourly and salaried employees; and/or decreases in the availability of affordable capital resources. We caution the reader that such risk factors are not exhaustive, particularly with respect to future filings. For further discussion of our exposure to market risk, refer to Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended September 24, 2024.

Growth Strategies and Outlook. We believe there are significant opportunities to grow customer traffic and increase awareness of our brands, leading to organic sales growth. We also believe there are unit growth opportunities for both of our concepts though we continue to execute unit growth with increased scrutiny surrounding real estate selection and a more conservative approach to leverage than we previously took, in light of the higher costs and volatile inflation present in the current operating environment.

Restaurant Locations. As of April 1, 2025, we operated, franchised, or licensed a total of forty Bad Daddy’s restaurants and thirty Good Times restaurants. The following table presents the number of restaurants operating at the end of the fiscal quarters ended April 1, 2025 and March 26, 2024.

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Company-Owned/Joint-Venture:

|  | Bad Daddy’s |  |  | Good Times |  |  | Total |
|  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
Alabama |  |  | 3 |  |  |  | 3 |  |  |  | - |  |  |  | - |  |  |  | 3 |  |  |  | 3 |
Colorado |  |  | 10 |  |  |  | 11 |  |  |  | 27 |  |  |  | 25 |  |  |  | 37 |  |  |  | 36 |
Georgia |  |  | 5 |  |  |  | 5 |  |  |  | - |  |  |  | - |  |  |  | 5 |  |  |  | 5 |
North Carolina |  |  | 14 |  |  |  | 14 |  |  |  | - |  |  |  | - |  |  |  | 14 |  |  |  | 14 |
Oklahoma |  |  | 1 |  |  |  | 1 |  |  |  | - |  |  |  | - |  |  |  | 1 |  |  |  | 1 |
South Carolina |  |  | 4 |  |  |  | 4 |  |  |  | - |  |  |  | - |  |  |  | 4 |  |  |  | 4 |
Tennessee |  |  | 2 |  |  |  | 2 |  |  |  | - |  |  |  | - |  |  |  | 2 |  |  |  | 2 |
Total |  |  | 39 |  |  |  | 40 |  |  |  | 27 |  |  |  | 25 |  |  |  | 66 |  |  |  | 65 |

Franchise/License:

|  | Bad Daddy’s |  |  | Good Times |  |  | Total |
|  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
Colorado |  |  | - |  |  |  | - |  |  |  | 1 |  |  |  | 4 |  |  |  | 1 |  |  |  | 4 |
North Carolina |  |  | 1 |  |  |  | 1 |  |  |  | - |  |  |  | - |  |  |  | 1 |  |  |  | 1 |
Wyoming |  |  | - |  |  |  | - |  |  |  | 2 |  |  |  | 2 |  |  |  | 2 |  |  |  | 2 |
Total |  |  | 1 |  |  |  | 1 |  |  |  | 3 |  |  |  | 6 |  |  |  | 4 |  |  |  | 7 |

Results of Operations

Fiscal quarter ended April 1, 2025 (13 weeks) compared to fiscal quarter ended March 26, 2024 (13 weeks):

Net Revenues. Net revenues for the quarter ended April 1, 2025 decreased $1,169,000 or 3.3% to $34,279,000 from $35,448,000 for the quarter ended March 26, 2024. Bad Daddy’s concept revenues decreased $1,592,000 while our Good Times concept revenues increased $423,000 compared to the same prior year quarter.

Bad Daddy’s restaurant sales decreased $1,631,000 to $24,817,000 for the quarter ended April 1, 2025 from $26,448,000 for the quarter ended March 26, 2024. This decrease is a result of the fourth fiscal quarter 2024 closure of one Bad Daddy’s restaurant, reduced customer traffic, and a negative mix shift attributable to the success of the Company’s smashed patty burgers, all of which are partially offset by menu price increases. The average menu price increase for the fiscal quarter ended April 1, 2025 over the same prior year quarter was approximately 4.7%.

Good Times restaurant sales increased $506,000 to $9,323,000 for the quarter ended April 1, 2025 from $8,817,000 for the quarter ended March 26, 2024. This increase is driven by the prior quarter acquisition of two Good Times restaurants, and the third fiscal quarter 2024 acquisition of one Good Times restaurant, previously owned by franchisees, partially offset by the prior quarter closure of one Good Times restaurant as well as the prior quarter temporary closure of one Good Times restaurant for remodel and reduced customer traffic. Average menu pricing during the fiscal quarter ended April 1, 2025 was the same as during the same prior year quarter.

Franchise and other revenues decreased $44,000 to $139,000 in the quarter ended April 1, 2025 compared to $183,000 in the quarter ended March 26, 2024. This decrease is primarily due to reduced royalties earned and collected due to the previously mentioned Good Times restaurant acquisitions from franchisees.

Same Store Sales

Same store sales is a metric used in evaluating the performance of established restaurants and is a commonly used metric in the restaurant industry. Same store sales for our brands are calculated using all Company-owned units open for at least eighteen full fiscal months and use the comparable operating weeks from the prior year to the current year quarter’s operating weeks.

Bad Daddy’s same store restaurant sales decreased 3.7% during the quarter ended April 1, 2025 compared to the same thirteen-week period ended March 26, 2024, primarily driven by reduced customer traffic as measured compared to the prior year, most significantly during January and February, partially offset by menu price increases. There were thirty-nine restaurants included in the same store sales base at the end of the current quarter.

Good Times same store restaurant sales decreased 3.6% during the fiscal quarter ended April 1, 2025 compared to the same thirteen-week period ended March 26, 2024, primarily due to reduced customer traffic driven by significantly unfavorable weather during the quarter compared to the same prior year quarter. There were twenty-seven restaurants included in the same store sales base at the end of the current quarter.

Restaurant Operating Costs

Food and Packaging Costs. Food and packaging costs for the fiscal quarter ended April 1, 2025 decreased $122,000 to $10,477,000 (30.7% of restaurant sales) from $10,599,000 (30.1% of restaurant sales) for the fiscal quarter ended March 26, 2024.

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Bad Daddy’s food and packaging costs were $7,619,000 (30.7% of restaurant sales) for the quarter ended April 1, 2025, down from $8,031,000 (30.4% of restaurant sales) for the quarter ended March 26, 2024. The increase, as a percentage of sales, is primarily attributable to higher purchase prices, primarily in ground beef, though in general throughout the commodity basket, compared to the prior year quarter, partially offset by the impact of a 4.7% increase in menu pricing.

Good Times food and packaging costs were $2,858,000 (30.7% of restaurant sales) for the quarter ended April 1, 2025, up from $2,568,000 (29.1% of restaurant sales) for the quarter ended March 26, 2024. This increase, as a percentage of sales, is primarily attributable to higher purchase prices on food and paper goods, primarily in ground beef cost, compared to the prior year quarter without the benefit of any price increase.

Payroll and Other Employee Benefit Costs. Payroll and other employee benefit costs for the quarter ended April 1, 2025 decreased $440,000 to $11,826,000 (34.6% of restaurant sales) from $12,266,000 (34.8% of restaurant sales) for the quarter ended March 26, 2024.

Bad Daddy’s payroll and other employee benefit costs were $8,510,000 (34.3% of restaurant sales) for the quarter ended April 1, 2025 down from $9,172,000 (34.7% of restaurant sales) for the quarter ended March 26, 2024. The $662,000 decrease is primarily attributable to the fourth fiscal quarter 2024 closure of one Bad Daddy’s restaurant, decreased restaurant sales during the current quarter versus the same quarter in the prior year, decreased manager salaries , and decreased restaurant-level incentive compensation. As a percent of sales, payroll and employee benefits costs decreased by 0.4% primarily attributable to decreased manager salaries and restaurant-level incentive compensation as well as the impact of a 4.7% increase in menu pricing.

Good Times payroll and other employee benefit costs were $3,316,000 (35.6% of restaurant sales) in the quarter ended April 1, 2025, up from $3,094,000 (35.1% of restaurant sales) in the same prior year period. The $222,000 increase is primarily due to the prior quarter acquisition of two Good Times restaurants, and the third fiscal quarter 2024 acquisition of one Good Times restaurant, previously owned by franchisees, partially offset by the prior quarter closure of one Good Times restaurant. The increase as a percentage of sales is primarily due to higher average wage rates resulting from market forces and the CPI-indexed minimum wage in Denver and the state of Colorado as well as decreased productivity resulting from the de-leveraging impact of lower sales, partially offset by reduced restaurant-level incentive compensation.

Occupancy Costs. Occupancy costs for the quarter ended April 1, 2025 decreased $30,000 to $2,583,000 (7.6% of restaurant sales) from $2,613,000 (7.4% of restaurant sales) for the quarter ended March 26, 2024.

Bad Daddy’s occupancy costs were $1,644,000 (6.6% of restaurant sales) for the quarter ended April 1, 2025, down from $1,743,000 (6.6% of restaurant sales) for the fiscal quarter ended March 26, 2024.

Good Times occupancy costs were $939,000 (10.1% of restaurant sales) for the quarter ended April 1, 2025, up from $870,000 (9.9% of restaurant sales) in the quarter ended March 26, 2024. The increase is primarily due to the prior quarter acquisition of two Good Times restaurants, and the third fiscal quarter 2024 acquisition of one Good Times restaurant, previously owned by franchisees, partially offset by the prior quarter closure of one Good Times restaurant.

Other Operating Costs. Other operating costs for the quarter ended April 1, 2025, increased $23,000 to $5,128,000 (15.0% of restaurant sales) from $5,105,000 (14.5% of restaurant sales) for the quarter ended March 26, 2024.

Bad Daddy’s other operating costs were $3,666,000 (14.8% of restaurant sales) for the quarter ended April 1, 2025 down from $3,895,000 (14.7% of restaurant sales) for the quarter ended March 26, 2024. The $229,000 decrease was primarily attributable to decreased customer delivery and credit card fees as well as the closure of one Bad Daddy’s restaurant during the fourth quarter of fiscal 2024.

Good Times other operating costs were $1,462,000 (15.7% of restaurant sales) in the quarter ended April 1, 2025, up from $1,210,000 (13.7% of restaurant sales) in the quarter ended March 26, 2024. The increase is primarily due to the prior quarter acquisition of two Good Times restaurants, and the third fiscal quarter 2024 acquisition of one Good Times restaurant, previously owned by franchisees, as well as increased repair and maintenance and technology expenses, partially offset by the prior-quarter closure of one Good Times restaurant.

New Store Preopening Costs. There were no preopening costs in the quarters ended April 1, 2025 and March 26, 2024.

Depreciation and Amortization Costs. Depreciation and amortization costs for the quarter ended April 1, 2025, increased $70,000 to $996,000 from $926,000 in the quarter ended March 26, 2024.

Bad Daddy’s depreciation and amortization costs for the quarter ended April 1, 2025 increased $18,000 to $758,000 from $740,000 in the quarter ended March 26, 2024.

Good Times depreciation and amortization costs for the quarter ended April 1, 2025 increased $52,000 to $238,000 from $186,000 in the quarter ended March 26, 2024 primarily resulting from the additional depreciation of newly acquired assets.

General and Administrative Costs. General and administrative costs for the quarter ended April 1, 2025, increased $14,000 to $2,578,000 (7.5% of total revenues) from $2,564,000 (7.2% of total revenues) for the quarter ended March 26, 2024.

This increase in general and administrative expenses in the quarter ended April 1, 2025 is primarily attributable to:

| ● | Increase in health insurance related costs of $158,000

| ● | Increase in costs associated with multi-unit supervisory roles of $70,000

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| ● | Increase in general travel-related expenses of $52,000

| ● | Decrease in technology costs of $113,000

| ● | Decrease in professional services of $32,000

| ● | Decrease in office expenses of $27,000

| ● | Net decreases in all other costs of $94,000

Advertising Costs. Advertising costs for the quarter ended April 1, 2025, decreased $119,000 to $705,000 (2.1% of total revenues) from $824,000 (2.3% of total revenues) for the quarter ended March 26, 2024.

Bad Daddy’s advertising costs were $336,000 (1.3% of total revenues) in the quarter ended April 1, 2025 compared to $539,000 (2.0% of total revenues) for the quarter ended March 26, 2024. The decrease is primarily due to social media, printing cost and local store marketing decreases. Bad Daddy’s advertising costs consist primarily of third-party gift card commissions, menu development, printing costs, local store marketing and social media.

Good Times advertising costs were $369,000 (3.9% of total revenues) in the quarter ended April 1, 2025 compared to $285,000 (3.2% of total revenues) in the quarter ended March 26, 2024. The increase is primarily related to increases in agency fees and social media, partially offset by decreased marketing research expenses. Good Times advertising costs consist primarily of radio advertising, social media, and on-site and point-of-purchase printing costs. Advertising costs are presented gross, with franchisee contributions to the fund being recognized as a component of franchise revenues.

Impairment of Long-Lived Assets Costs. The were $494,000 of costs associated with impairments for the fiscal quarter ended April 1, 2025. There were no impairment costs for the fiscal quarter ended March 26, 2024. The current quarter impairment costs are primarily attributable to the impairment of lease right-of-use assets for restaurants generating insufficient income to contribute to rent, and which the Company believes are probable to close at the end of the current lease term; and new assets deployed in restaurants where impairment was previously assessed, and the Company’s current analysis indicated impairment of assets associated with those restaurants.

(Gain) Loss on Restaurant Asset and Equipment Sales. The net loss on restaurant asset sales and equipment disposals for the quarter ended April 1, 2025 was $6,000, which is composed of a loss of $9,000 on disposal of miscellaneous assets, and $3,000 of deferred gain recognition, compared to a net loss of $4,000 for the quarter ended March 26, 2024, which is composed of a loss of $13,000 on disposal of miscellaneous assets, and $9,000 of deferred gain recognition.

Litigation Contingency Costs. There were no litigation contingency costs in the fiscal quarter ended April 1, 2025. There was $97,000 of income related to adjustment of the Company’s litigation contingency reserve in the fiscal quarter ended March 26, 2024.

(Loss) Income from Operations. Loss from operations was $514,000 in the quarter ended April 1, 2025 compared to income from operations of $644,000 in the quarter ended March 26, 2024.

The change in the (loss) income from operations for the quarter ended April 1, 2025 is primarily due to matters discussed in the relevant sections above.

Interest Expense. Interest expense was $56,000 during the quarter ended April 1, 2025, compared with $42,000 during the quarter ended March 26, 2024.

Other Income. No other income was earned in the quarters ended April 1, 2025 and March 26, 2024.

Provision for Income Taxes. The provision for income taxes was $57,000 for the quarter ended April 1, 2025, compared to a $78,000 benefit for the quarter ended March 26, 2024.

Net (Loss) Income. Net loss was $627,000 for the quarter ended April 1, 2025, compared to net income of $680,000 in the quarter ended March 26, 2024.

The change from the quarter ended April 1, 2025 to the quarter ended March 26, 2024 was primarily attributable to the matters discussed in the relevant sections above.

(Loss) Income Attributable to Non-Controlling Interests. The non-controlling interest represents the limited partners’ share of income in the Good Times joint-venture restaurants.

For the quarter ended April 1, 2025, the loss attributable to non-controlling interests was $3,000 compared to income of $62,000 for the quarter ended March 26, 2024. The $65,000 decrease is due to decreased profitability of the restaurants involved in the limited partnership with a non-controlling partner.

Fiscal two quarters ended April 1, 2025 (27 weeks) compared to fiscal two quarters ended March 26, 2024 (26 weeks):

Net Revenues. Net revenues for the two quarters ended April 1, 2025 increased $2,007,000, or 2.9%, to $70,612,000 from $68,605,000 for the two quarters ended March 26, 2024. Bad Daddy’s concept revenues increased $581,000 while our Good Times concept revenues increased $1,426,000.

Bad Daddy’s restaurant sales increased $327,000 to $50,895,000 for the two quarters ended April 1, 2025 from $50,568,000 for the two quarters ended March 26, 2024. This increase is due to an additional week in the first fiscal quarter versus the prior year first fiscal quarter and menu price increases, partially offset by the closure of one Bad Daddy’s restaurant during the fourth quarter of fiscal 2024, by reduced customer traffic, primarily in January and February and by negative mix shift attributable to the success of the Company’s smashed patty. The average menu price increase for the two quarters ended April 1, 2025 over the same prior year quarters was approximately 4.6%.

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Good Times restaurant sales increased $1,567,000 to $19,210,000 for the two quarters ended April 1, 2025 from $17,643,000 for the two quarters ended March 26, 2024. This increase is driven by the prior quarter acquisition of two Good Times restaurants, and the third fiscal quarter 2024 acquisition of one Good Times restaurant, previously owned by franchisees, an additional week in the first fiscal quarter versus the prior year first fiscal quarter, partially offset by the prior quarter closure of one Good Times restaurant as well as the prior quarter temporary closure of one Good Times restaurant for remodel and reduced customer traffic. The average menu price increase for the two quarters ended April 1, 2025 over the same prior year quarters was approximately 2.0%.

Franchise and other revenues increased $113,000 to $507,000 in the two quarters ended April 1, 2025 compared to $394,000 in the two quarters ended March 26, 2024. This increase is primarily due to an increase in gift card breakage, partially offset by reduced royalties earned and collected due to the aforementioned Good Times restaurant acquisitions from franchisees.

Same Store Sales

Same store sales is a metric used in evaluating the performance of established restaurants and is a commonly used metric in the restaurant industry. Same store sales for our brands are calculated using all company-owned units open for at least eighteen full fiscal months and use the comparable operating weeks from the prior year-to-date period to the current year-to-date period’s operating weeks.

Bad Daddy’s same store restaurant sales decreased 1.1% during the two quarters ended April 1, 2025 compared to the same two quarters ended March 26, 2024, primarily driven by reduced customer traffic, partially offset by menu price increases. There were thirty-nine restaurants included in the same store sales base at the end of the current quarter.

Good Times same store restaurant sales decreased 1.9% during the two quarters ended April 1, 2025 compared to the same two quarters ended March 26, 2024, primarily due to traffic decreases, predominately associated with unfavorable weather during the second fiscal quarter, as compared to the same-prior year quarter. There were twenty-seven restaurants included in the same store sales base at the end of the current quarter.

Restaurant Operating Costs

Food and Packaging Costs. Food and packaging costs for the two quarters ended April 1, 2025 increased $914,000 to $21,840,000 (31.2% of restaurant sales) from $20,926,000 (30.7% of restaurant sales) for the two quarters ended March 26, 2024.

Bad Daddy’s food and packaging costs were $15,834,000 (31.1% of restaurant sales) for the two quarters ended April 1, 2025, up from $15,640,000 (30.9% of restaurant sales) for the two quarters ended March 26, 2024. This increase is primarily attributable to an additional week in the first fiscal quarter versus the prior year first fiscal quarter and higher purchase prices on food and paper goods, most significantly ground beef, partially offset by the fourth fiscal quarter 2024 closure of one Bad Daddy’s restaurant and lower restaurant sales during the second fiscal quarter 2025 versus the second fiscal quarter 2024. The increase, as a percent of sales, is primarily attributable to higher purchase prices of food and paper goods, partially offset by the impact of a 4.6% average increase in menu pricing compared to the prior year-to-date period.

Good Times food and packaging costs were $6,006,000 (31.3% of restaurant sales) for the two quarters ended April 1, 2025, up from $5,286,000 (30.0% of restaurant sales) for the two quarters ended March 26, 2024. This increase is primarily attributable to the prior quarter acquisition of two Good Times restaurants, and the third fiscal quarter 2024 acquisition of one Good Times restaurant, previously owned by franchisees, and an additional week in the first fiscal quarter versus the prior year first fiscal quarter. The increase as a percent of sales is primarily attributable to higher purchase prices on food and paper goods, most significantly ground beef, partially offset by the impact of a 2.0% average increase in menu pricing compared to the prior year-to-date period.

Payroll and Other Employee Benefit Costs. Payroll and other employee benefit costs for the two quarters ended April 1, 2025 increased $719,000 to $24,609,000 (35.1% of restaurant sales) from $23,890,000 (35.0% of restaurant sales) for the two quarters ended March 26, 2024.

Bad Daddy’s payroll and other employee benefit costs were $17,667,000 (34.7% of restaurant sales) for the two quarters ended April 1, 2025 down from $17,813,000 (35.2% of restaurant sales) for the two quarters ended March 26, 2024. The $146,000 decrease is primarily attributable to the fourth fiscal quarter 2024 closure of one Bad Daddy’s restaurant, lower restaurant sales during the second fiscal quarter 2025 versus the second fiscal quarter 2024 as well as decreased manager salaries and restaurant-level incentive compensation, partially offset by an additional week in the first fiscal quarter versus the prior year first fiscal quarter. As a percent of sales, payroll and employee benefits costs decreased by 0.5% primarily attributable to decreased manager salaries and incentive compensation as well as the impact of the 4.6% increase in average menu pricing.

Good Times payroll and other employee benefit costs were $6,942,000 (36.1% of restaurant sales) in the two quarters ended April 1, 2025, up from $6,077,000 (34.4% of restaurant sales) in the same prior year period. The $865,000 increase is primarily attributable to the prior quarter acquisition of two Good Times restaurants, and the third fiscal quarter 2024 acquisition of one Good Times restaurant, previously owned by franchisees, and an additional week in the first fiscal quarter versus the prior year first fiscal quarter, partially offset by the prior quarter closure of one Good Times restaurant. As a percent of sales, payroll and employee benefits costs increased by 1.7% primarily attributable to decreased labor productivity and higher average wage rates.

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Occupancy Costs. Occupancy costs for the two quarters ended April 1, 2025 increased $148,000 to $5,266,000 (7.5% of restaurant sales) from $5,118,000 (7.5% of restaurant sales) for the two quarters ended March 26, 2024.

Bad Daddy’s occupancy costs were $3,378,000 (6.6% of restaurant sales) for the two quarters ended April 1, 2025, down from $3,461,000 (6.8% of restaurant sales) for the two quarters ended March 26, 2024.

Good Times occupancy costs were $1,888,000 (9.8% of restaurant sales) in the two quarters ended April 1, 2025, up from $1,657,000 (9.4% of restaurant sales) in the two quarters ended March 26, 2024. The increase was primarily due to the prior quarter acquisition of two Good Times restaurants, and the third fiscal quarter 2024 acquisition of one Good Times restaurant, previously owned by franchisees, as well as increased property tax as a result of higher property values, partially offset by the prior quarter closure of one Good Times restaurant.

Other Operating Costs. Other operating costs for the two quarters ended April 1, 2025, increased $301,000 to $10,134,000 (14.5% of restaurant sales) from $9,833,000 (14.4% of restaurant sales) for the two quarters ended March 26, 2024.

Bad Daddy’s other operating costs were $7,357,000 (14.5% of restaurant sales) for the two quarters ended April 1, 2025 down from $7,476,000 (14.8% of restaurant sales) for the two quarters ended March 26, 2024. The $119,000 decrease is primarily attributable to the fourth fiscal quarter 2024 closure of one Bad Daddy’s restaurant and a decrease in customer delivery and credit card fees, partially offset by costs associated with an additional week in the first fiscal quarter versus the prior year first fiscal quarter as well as higher utility expenses.

Good Times other operating costs were $2,777,000 (14.5% of restaurant sales) in the two quarters ended April 1, 2025, up from $2,357,000 (13.4% of restaurant sales) in the two quarters ended March 26, 2024. The increase is primarily attributable to the prior quarter acquisition of two Good Times restaurants, and the third fiscal quarter 2024 acquisition of one Good Times restaurant, previously owned by franchisees, and an additional week in the first fiscal quarter versus the prior year first fiscal quarter as well as increased repair and maintenance and technology expenses, partially offset by the prior quarter closure of one Good Times restaurant.

New Store Preopening Costs. For the two quarters ended April 1, 2025, preopening costs were $8,000 compared to no preopening costs for the two quarters ended March 26, 2024. The current fiscal year costs primarily relate to training costs incurred as part of our two Good Times restaurant acquisitions.

Depreciation and Amortization Costs. Depreciation and amortization costs for the two quarters ended April 1, 2025, increased $161,000 to $2,014,000 from $1,853,000 ended for the two quarters ended March 26, 2024.

Bad Daddy’s depreciation and amortization costs for the two quarters ended April 1, 2025 increased $42,000 to $1,533,000 from $1,491,000 in the two quarters ended March 26, 2024.

Good Times depreciation and amortization costs for the two quarters ended April 1, 2025 increased $119,000 to $481,000 from $362,000 in the two quarters ended March 26, 2024.

General and Administrative Costs. General and administrative costs for the two quarters ended April 1, 2025, increased $264,000 to $5,166,000 (7.3% of total revenues) from $4,902,000 (7.1% of total revenues) for the two quarters ended March 26, 2024.

This increase in general and administrative expenses in the two quarters ended April 1, 2025 is primarily attributable to:

| ● | Increase in costs associated with multi-unit supervisory roles of $179,000

| ● | Increase in home office payroll and benefits costs of $88,000

| ● | Increase in general travel-related costs of $83,000

| ● | Increase in health insurance related costs $80,000

| ● | Increase in professional services of $61,000

| ● | Decrease in technology costs of $163,000

| ● | Decrease in recruiting and training related costs of $36,000

| ● | Decrease in other costs of $28,000

Advertising Costs. Advertising costs for the two quarters ended April 1, 2025, decreased to $1,569,000 (2.2% of total revenues) from $1,916,000 (2.8% of total revenues) for the two quarters ended March 26, 2024.

Bad Daddy’s advertising costs were $957,000 (1.9% of total revenues) for the two quarters ended April 1, 2025 compared to $1,269,000 (2.5% of total revenues) for the two quarters ended March 26, 2024. The decrease is primarily due to a reduction of commission earned by third parties on gift cards sold through large-box retailers as well as decreased social media and local store marketing expenses. Bad Daddy’s advertising costs consist primarily of third-party gift card commissions, menu development, printing costs, local store marketing and social media.

Good Times advertising costs were $612,000 (3.2% of total revenues) in the two quarters ended April 1, 2025 compared to $647,000 (3.6% of total revenues) in the two quarters ended March 26, 2024. The decrease is primarily due to decreased radio and research expenses, partially offset by increased social media expenses. Good Times advertising costs consist primarily of radio advertising, social media, and on-site and point-of-purchase printing costs. Advertising costs are presented gross, with franchisee contributions to the fund being recognized as a component of franchise revenues.

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Impairment of Long-Lived Assets Costs. There were $494,000 of costs associated with impairments for the two quarters ended April 1, 2025. There were no impairment costs for the two quarters ended March 26, 2024. The current year impairment costs are primarily attributable to the impairment of lease right-of-use assets and new assets deployed in restaurants where impairment was previously assessed, and the Company’s current analysis indicated impairment of assets associated with those restaurants.

(Gain) Loss on Restaurant Asset and Equipment Sales. The net gain on restaurant asset sales and equipment disposals for the two quarters ended April 1, 2025 was $51,000, which is composed of a net gain of $43,000 on disposal of miscellaneous assets and $8,000 of deferred gain recognition, compared to a net gain of $6,000 for the two quarters ended March 26, 2024, which is composed of a loss of $13,000 on disposal of miscellaneous assets and $19,000 of deferred gain recognition.

Litigation Contingency Costs. There were no litigation contingency costs in the two fiscal quarters ended April 1, 2025. There was $97,000 of income related to the adjustment of the Company’s litigation contingency reserve in the two quarters ended March 26, 2024. This adjustment was due to the recognition of $235,000 in contingent liabilities related to routine course of business claims as well as the reversal of our previous contingency reserve of $332,000.

(Loss) Income from Operations. Loss from operations was $437,000 in the two quarters ended April 1, 2025 compared to income from operations of $270,000 in the two quarters ended March 26, 2024.

The change in the (loss) income from operations for the two quarters ended April 1, 2025 is due primarily due to matters discussed in the relevant sections above.

Interest Expense. Interest expense was $102,000 during the two quarters ended April 1, 2025, compared with $74,000 during the two quarters ended March 26, 2024.

Other Income. There was $140,000 of other income for the two quarters ended April 1, 2025, related to the termination of an agreement in connection with the Company’s management services, and lease negotiations on behalf of a former franchisee, with respect to real estate previously subleased to a third party by the former franchisee. No other income was earned in the two quarters ended March 26, 2024.

Provision for Income Taxes. The provision for income taxes was $54,000 for the two quarters ended April 1, 2025, compared to a $1,000 benefit for the two quarters ended March 26, 2024.

Net (Loss) Income. Net loss was $453,000 for the two quarters ended April 1, 2025 compared to net income of $197,000 in the two quarters ended March 26, 2024.

The change from the two quarters ended April 1, 2025 to the two quarters ended March 26, 2024 was primarily attributable to the matters discussed in the relevant sections above.

Income Attributable to Non-Controlling Interests. The non-controlling interest represents the limited partners’ share of income in the Good Times joint-venture restaurants.

For the two quarters ended April 1, 2025, the income attributable to non-controlling interests was $7,000 compared to $135,000 for the two quarters ended March 26, 2024. The $128,000 decrease is due to decreased profitability during the two quarters of the restaurants involved in the partnership.

Adjusted EBITDA

EBITDA is defined as net (loss) income before interest, income taxes and depreciation and amortization.

Adjusted EBITDA is defined as EBITDA plus non-cash stock-based compensation expense, preopening expense, non-recurring acquisition costs, asset impairment costs, and non-cash disposal of assets. Adjusted EBITDA is intended as a supplemental measure of our performance that is not required by or presented in accordance with GAAP. We believe that EBITDA and Adjusted EBITDA provide useful information to management and investors regarding certain financial and business trends relating to our financial condition and operating results. Our management uses EBITDA and Adjusted EBITDA (i) as a factor in evaluating management's performance when determining incentive compensation and (ii) to evaluate the effectiveness of our business strategies.

We believe that the use of EBITDA and Adjusted EBITDA provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing the Company's financial measures with other restaurant operating companies, which may present similar non-GAAP financial measures to investors. In addition, you should be aware when evaluating EBITDA and Adjusted EBITDA that in the future we may incur expenses similar to those excluded when calculating these measures. Our presentation of these measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Our computation of Adjusted EBITDA may not be comparable to other similarly titled measures computed by other companies, because all companies do not calculate Adjusted EBITDA in the same fashion.

Our management does not consider EBITDA or Adjusted EBITDA in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of EBITDA and Adjusted EBITDA is that they exclude significant expenses and income that are required by GAAP to be recorded in the Company's financial statements. Some of these limitations are:

Adjusted EBITDA does not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;

Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

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Adjusted EBITDA does not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our debts;

Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements;

Stock based compensation expense is and will remain a key element of our overall long-term incentive compensation package, although we exclude it as an expense when evaluating our ongoing performance for a particular period;

Adjusted EBITDA does not reflect the impact of certain cash charges resulting from matters we consider not to be indicative of our ongoing operations; and

Other companies in our industry may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.

Because of these limitations, Adjusted EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using Adjusted EBITDA only as a supplemental measure. You should review the reconciliation of net (loss) income to EBITDA and Adjusted EBITDA below and not rely on any single financial measure to evaluate our business:

|  | Quarter Ended |  |  | Year-to-Date |
|  | April 1, 2025 (13 Weeks) |  |  | March 26, 2024 (13 Weeks) |  |  | April 1, 2025 (27 Weeks) |  |  | March 26, 2024 (26 Weeks) |
Adjusted EBITDA: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net (Loss) Income, as reported |  | $ | (624 | ) |  | $ | 618 |  |  | $ | (460 | ) |  | $ | 62 |
Depreciation and amortization |  |  | 1,005 |  |  |  | 929 |  |  |  | 2,021 |  |  |  | 1,858 |
Interest expense, net |  |  | 56 |  |  |  | 42 |  |  |  | 102 |  |  |  | 74 |
Provision for income taxes |  |  | 57 |  |  |  | (78 | ) |  |  | 54 |  |  |  | (1 | )
EBITDA |  |  | 494 |  |  |  | 1,511 |  |  |  | 1,717 |  |  |  | 1,993 |
Non-cash stock-based compensation (1) |  |  | 30 |  |  |  | 40 |  |  |  | 65 |  |  |  | 78 |
Preopening expense (2) |  |  | - |  |  |  | - |  |  |  | 8 |  |  |  | - |
Asset impairment (3) |  |  | 494 |  |  |  | - |  |  |  | 494 |  |  |  | - |
Loss (gain) on restaurant and equipment asset sales (4) |  |  | 3 |  |  |  | 4 |  |  |  | (53 | ) |  |  | (6 | )
Litigation contingencies |  |  | - |  |  |  | (97 | ) |  |  | - |  |  |  | (97 | )
Adjusted EBITDA |  | $ | 1,021 |  |  | $ | 1,458 |  |  | $ | 2,231 |  |  | $ | 1,968 |

| (1) | Represents non-cash stock-based compensation as described in Note 14 to the unaudited condensed consolidated financial statements.

| (2) | Represents expenses directly associated with the opening of new or acquired restaurants, including preopening rent.

| (3) | Represents costs recognized in connection with the asset impairment charges described in Note 12 to the unaudited condensed consolidated financial statements.

| (4) | Represents deferred gains on previous sale-leaseback transactions on two Good Times restaurants as well as (gains) losses on miscellaneous equipment disposals.

Depreciation and amortization and (gain) loss on restaurant and equipment asset sales have been adjusted for any amounts attributable to non-controlling interests.

Liquidity and Capital Resources

Cash and Working Capital. As of April 1, 2025, we had a working capital deficit of $9,504,000. Our working capital position benefits from the fact that we generally collect cash from sales to customers the same day, or in the case of credit or debit card transactions, within a few days of the related sale and have payment terms with vendors that are typically between 14 and 21 days. Our current working capital deficit is additionally affected by the recognition of short-term lease liabilities, as we lease substantially all of our real estate and have both current and long-term obligations to our landlords. We believe that we will have sufficient capital to meet our working capital, and recurring capital expenditure needs in fiscal 2025. We anticipate any commitments in fiscal 2025 will be funded out of existing cash or future borrowings against the Cadence Credit Facility.

See Part II, Item 2 of this filing for a discussion of the Company’s share repurchase program.

Financing

For a discussion of the Company’s financing arrangements (including the Cadence Credit Facility), refer to Note 8 of the unaudited condensed consolidated financial statements included in this report.

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Cash Flows

|  | Year-to-Date Period Ended |
|  | April 1, 2025 |  |  | March 26, 2024 |
Net cash provided by operating activities |  | $ | 196 |  |  | $ | 1,515 |
Net cash used in investing activities |  |  | (2,662 | ) |  |  | (1,063 | )
Net cash provided by (used in) financing activities |  |  | 1,325 |  |  |  | (634 | )
Net change in cash and cash equivalents |  | $ | (1,141 | ) |  | $ | (182 | )

Operating Cash Flows. Net cash from operating activities decreased by $1,319,000 as of the fiscal period ended April 1, 2025 compared to the fiscal period ended March 26, 2024. Operating cash flows were negatively impacted by increased pre-paid rent resulting from the full payment of April rent (compared to the prior year during which rent had been paid through the end of March) as well as decreased accrued and other liabilities, as presented on the Condensed Consolidated Statements of Cash Flows.

Investing Cash Flows. Net cash used in investing activities for the two quarters ended April 1, 2025 and March 26, 2024 were $2,662,000 and $1,063,000, respectively, which primarily reflect the purchases of property and equipment in each period as well as the acquisition in the first quarter of fiscal 2025 of two Good Times restaurants previously owned by a franchisee.

Financing Cash Flows. Net cash provided by financing activities for the two quarters ended April 1, 2025 was $1,325,000, which includes proceeds from long-term debt of $2,250,000, payments of long-term debt of $517,000, distributions to non-controlling interests of $47,000, cash settlement of restricted stock units of $58,000, and $303,000 of payments for the repurchase of common stock under the Company’s share repurchase program.

Net cash used in financing activities for the two quarters ended March 26, 2024 was $634,000, which includes proceeds from long-term debt of $1,000,000, payments of long-term debt of $500,000, distributions to non-controlling interests of $50,000, and $1,084,000 of payments for the repurchase of common stock under the Company’s share repurchase program.

Impact of Inflation and Wage Increases at Both Concepts

Although some commodity prices have been more stable over recent quarters, beef remains at or near record highs and prices are extremely volatile. Based on general industry consensus, we project that due the tightening of supply, ground beef costs will continue to increase throughout fiscal year 2025. Due to the uncertainty related to tariffs that have been implemented or threatened to be imposed on other countries, some of which are sources of food and packaging supplies for our business, we are unable to predict the degree of inflation and its associated impact on our business. In addition to food cost inflation, we have also experienced the need to meaningfully increase wages to attract restaurant employees, and in Colorado inflation-indexed statutory wage rate increases continue to create upward pressure on wages.

We have historically used menu price increases to manage profitability in times of inflation, however consumer preferences and the relative pricing of competitors may prevent us from raising prices sufficiently to offset the significant increases in labor costs, particularly in Colorado where wage pressures are caused by both statutory and market forces.

Seasonality

Revenues of the Company are subject to seasonal fluctuations based on weather conditions adversely affecting Colorado restaurant sales primarily during the months of December, January, February, and March, which affect both of the Company’s brands, though increasingly winter weather events have impacted our restaurants outside of Colorado. The Company’s Bad Daddy’s restaurants typically experience seasonal reductions in revenues between the months of November and January resulting from general consumer spending patterns.

| ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not required.

| ITEM 4. | CONTROLS AND PROCEDURES

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

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 10-Q, the Company’s Chief Executive Officer (its principal executive officer) and Senior Vice President of Finance and Accounting (its principal financial officer) have concluded that the Company’s disclosure controls and procedures were effective as of April 1, 2025.

Changes in Internal Control over Financial Reporting

There have been no significant changes in the Company’s internal control over financial reporting that occurred during the Company’s fiscal quarter ended April 1, 2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II - OTHER INFORMATION

| ITEM 1. | LEGAL PROCEEDINGS

There may be various claims in process, matters in litigation, and other contingencies brought against the Company by employees, vendors, customers, franchisees, or other parties. Evaluating these contingencies is a complex process that may involve substantial judgment on the potential outcome of such matters, and the ultimate outcome of such contingencies may differ from our current analysis. We regularly review the adequacy of accruals and disclosures related to such contingent liabilities in consultation with legal counsel. While it is not possible to predict the outcome of these claims with certainty, it is management’s opinion that any reasonably possible losses associated with such contingencies have been adequately accrued or would be immaterial to our financial statements.

The Company was the defendant in a lawsuit styled as White Winston Select Asset Funds, LLC and GT Acquisition Group, Inc. v. Good Times Restaurants, Inc., arising from the failed negotiations between plaintiffs and the Company for the sale of the Good Times Drive Thru subsidiary to plaintiffs. The lawsuit was initially filed on September 24, 2019, in Delaware Chancery Court, and the Company removed the case to federal court in the US District Court for the District of Delaware on November 5, 2019. On July 30, 2021, the plaintiffs moved the Court for leave to amend their complaint and add new causes of action and a claim for $18 million in damages. On January 25, 2023, the Court rendered judgment dismissing the plaintiffs’ claims in their entirety and denying all of the requested relief.

The plaintiffs filed a notice of appeal of the Court’s January 25, 2023, decisions.  Good Times, in turn, filed a notice of appeal of the Court’s previous dismissal of its counterclaim against the plaintiffs.  On March 1, 2024, the court of appeals issued a ruling affirming the trial court’s dismissal of the plaintiffs’ claims and reversed the trial court’s previous dismissal of Good Times’ own claim for the plaintiffs’ breach of their covenant not to sue Good Times. The court of appeals ordered that Good Times’ counterclaim be remanded to the trial court for further consideration. Due to this favorable decision, during the quarter ended March 26, 2024 we reversed our previous contingency reserve of $332,000. The plaintiffs petitioned the court of appeals for rehearing on its reversal of the trial court’s dismissal of Good Times’ counterclaim. On June 20, 2024, the court of appeals affirmed its previous reversal of the trial court’s dismissal of Good Times’ counterclaim. The trial court will now consider the issue of White Winston’s liability to Good Times. The amount of Good Times’ claimed damages (which consists substantially of its prior legal fees) exceeds $3 million. The trial court ordered the parties to submit briefing on the issue of Good Times’ damages claim. On April 11, 2025 the Court-appointed special master issued a recommendation that Good Times recover damages in the amount of $3.826 million plus pre- and post-judgment interest. White Winston has indicated it will object to this recommendation. The Court has not yet entered a final judgment concerning Good Times’ damages. While Good Times plans to vigorously pursue this remaining claim to conclusion, there is no assurance that it will be successful and, even if it is successful, its recovery may be less than such claimed damages amount.

| ITEM 1A. | RISK FACTORS

Risk factors associated with our business are contained in Item 1A, “Risk Factors,” of our Annual Report on Form 10-K for the fiscal year ended September 24, 2024 filed with the SEC on December 12, 2024 as supplemented by Item 1A, “Risk Factors,” of our Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2024 filed with the SEC on February 6, 2025. There have been no material changes from the risk factors disclosed in the aforementioned filings.

| ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The Company‘s Board of Directors authorized a $5.0 Million share repurchase program which became effective February 7, 2022. On December 9, 2024 the Company’s Board of Directors authorized the purchase of another $2.0 million of common stock, bringing the total authorization for share repurchases to $7.0 million. The authorization to repurchase will continue until the maximum value of shares is achieved or the Company terminates the program. The timing and actual number of shares repurchased will depend on a variety of factors, including price, general business and market conditions, and alternative investment opportunities. As of April 1, 2025 the Company has purchased 1,784,678 shares of its common stock pursuant to the share repurchase plan leaving approximately $2,050,000 available for repurchases under the plan.

Repurchases of common stock under the share repurchase plan during the fiscal quarter ended April 1, 2025 were as follows:

Period |  |  | Total number of shares (or units) purchased |  |  | Average price paid per share (or unit) |  |  | Total number of shares (or units) purchased as part of publicly announced plans or programs |  |  | Maximum dollar value of shares that may yet be purchased under the plans or programs |
01/01/25 – 01/28/25 |  |  |  | 12,673 |  |  | $ | 2.52 |  |  |  | 12,673 |  |  |  |  |
01/29/25 – 02/25/25 |  |  |  | 18,390 |  |  | $ | 2.52 |  |  |  | 18,390 |  |  |  |  |
02/26/25 – 04/01/25 |  |  |  | 23,772 |  |  | $ | 2.47 |  |  |  | 23,772 |  |  |  |  |
Total |  |  |  | 54,835 |  |  |  |  |  |  |  | 54,835 |  |  | $ | 2,050,000 |

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| ITEM 3. | DEFAULTS UPON SENIOR SECURITIES

None.

| ITEM 4. | MINE SAFETY DISCLOSURES

Not applicable.

| ITEM 5. | OTHER INFORMATION

During the quarter ended April 1, 2025, none of the Company’s directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934, as amended) adopted, modified or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K of the Securities Act of 1933).

| ITEM 6. | EXHIBITS

| (a) | Exhibits. The following exhibits are furnished as part of this report:

Exhibit |  | Description
*31.1 |  | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350
*31.2 |  | Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350
*32.1 |  | Certification of Chief Executive Officer and Principal Financial Officer pursuant to Section 906
101.INS |  | XBRL Instance Document. The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH |  | Inline XBRL Taxonomy Extension Schema Document
101.CAL |  | Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB |  | Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE |  | Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF |  | Inline XBRL Taxonomy Extension Definition Linkbase Document
*104 |  | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*Filed herewith

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SIGNATURES

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.

| GOOD TIMES RESTAURANTS INC. |
DATE: May 8, 2025 |  |  |
|  | Ryan M. Zink Chief Executive Officer (Principal Executive Officer) |
|  | Keri A. August Senior Vice President of Finance and Accounting (Principal Financial Officer) |

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