UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q (Mark One) Commission File Number: 0-12919 RAVE RESTAURANT GROUP, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) Missouri 45-3189287 3551 Plano Parkway The Colony, Texas 75056 (Address of principal executive offices) (Zip Code) (469) 384-5000 (Registrant's telephone number, including area code) Securities registere ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q (Mark One) Commission File Number: 0-12919 RAVE RESTAURANT GROUP, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) Missouri 45-3189287 3551 Plano Parkway The Colony, Texas 75056 (Address of principal executive offices) (Zip Code) (469) 384-5000 (Registrant's telephone number, including area code) Securities registere ...

Part I [Item 1. Business](index=3&type=section&id=ITEM%201.%20BUSINESS%2E) Rave Restaurant Group franchises Pizza Inn and Pie Five pizza brands, generating revenue from fees, royalties, and rebates [General and Our Concepts](index=3&type=section&id=General%20and%20Our%20Concepts) The company franchises Pizza Inn and Pie Five, operating 200 units across Buffet, Delco, Express, and fast-casual formats Total Restaurant Units as of June 27, 2021 | Brand/Type | Count | | :--- | :--- | | **Pie Five Units (Franchised)** | 33 | | **Pizza Inn Restaurants (Franchised)** | 156 | | - Domestic Buffet Units | 70 | | - Domestic Delco Units | 10 | | - Domestic Express Units | 44 | | - International Units | 32 | | **PIE Units (Licensed)** | 11 | - The company's domestic Pizza Inn presence is concentrated in the southern U.S., with Texas, Arkansas, North Carolina, and Mississippi accounting for approximately **25%**, **21%**, **16%**, and **8%** of domestic units, respectively[13](index=13&type=chunk) - Pizza Inn offers various formats: Buffet Units (**2,100-4,500 sq ft**), Delco Units for delivery/carryout (**~1,200 sq ft**), and Express Units in non-traditional locations like convenience stores and airports (**200-400 sq ft**)[17](index=17&type=chunk)[18](index=18&type=chunk)[19](index=19&type=chunk) - Pie Five is a fast-casual concept where customers create individualized pizzas. Restaurants are typically **1,800-2,400 sq ft** and located in high-traffic urban or suburban areas[21](index=21&type=chunk)[22](index=22&type=chunk) [Development and Operations](index=4&type=section&id=Development%20and%20Operations) The company expands through franchising Pizza Inn and Pie Five, outlining fees, royalties, and advertising in agreements, while providing training and enforcing brand standards Domestic Franchise Agreement Terms | Term | Pizza Inn Buffet | Pizza Inn Delco | Pizza Inn Express | Pie Five Unit | | :--- | :--- | :--- | :--- | :--- | | **Franchise Fee** | $30,000 | $10,000 | $5,000 | $30,000 | | **Initial Term** | 20 years | 10 years | 5 years | 10 years | | **Royalty Rate** | 4% of sales | 4% of sales | 4% of sales | 6% of sales | | **National Ad Fund** | 3% of sales | 3% of sales | 3% of sales | 2% of sales | | **Total Ad Spending** | 4% of sales | 4% of sales | 4% of sales | 5% of sales | - Growth strategy for Pizza Inn involves opening new franchised restaurants domestically and evaluating development in international markets, particularly the Middle East[24](index=24&type=chunk) - As of June 27, 2021, the company did not operate any company-owned restaurants but states an intention to open and operate them in the future[34](index=34&type=chunk) - PIE Kiosk license agreements have a **five-year initial term** and do not charge development fees, license fees, royalties, or advertising assessments. The company earns revenue through supplier rebates[31](index=31&type=chunk) [Marketing, Competition, and Other Information](index=6&type=section&id=Marketing%2C%20Competition%2C%20and%20Other%20Information) The company's marketing is franchisee-funded, operates in a highly competitive industry, owns key trademarks, and is subject to regulations, employing 23 people - Franchisees contribute a specified percentage of sales to a company-managed fund for marketing and advertising programs[41](index=41&type=chunk) - The company faces intense competition from international, national, and regional restaurant chains, local operators, and frozen pizza products in grocery stores[47](index=47&type=chunk) - The company is subject to FTC regulations requiring the provision of a franchise disclosure document to prospective franchisees[45](index=45&type=chunk) - As of June 27, 2021, the company had **23 employees**, none of whom were covered by collective bargaining agreements[46](index=46&type=chunk) [Item 1A. Risk Factors](index=8&type=section&id=ITEM%201A.%20RISK%20FACTORS%2E) Disclosure of risk factors is not required as the company qualifies as a smaller reporting company - Disclosure of risk factors is not required as the company qualifies as a smaller reporting company[49](index=49&type=chunk) [Item 1B. Unresolved Staff Comments](index=8&type=section&id=ITEM%201B.%20UNRESOLVED%20STAFF%20COMMENTS%2E) The company reports no unresolved staff comments - Not applicable[50](index=50&type=chunk) [Item 2. Properties](index=8&type=section&id=ITEM%202.%20PROPERTIES%2E) The company leases its 19,576 sq ft corporate office and holds lease obligations for ten other locations, either subleased or assigned - The company leases its corporate office facility of **19,576 square feet** under a **ten-year term** that commenced on January 2, 2017[51](index=51&type=chunk) - The company has contingent or direct lease obligations for **ten additional locations**, two of which are subleased and eight are assigned to franchisees[52](index=52&type=chunk) [Item 3. Legal Proceedings](index=8&type=section&id=ITEM%203.%20LEGAL%20PROCEEDINGS%2E) The company is subject to ordinary course legal actions, which are not expected to materially affect its financial condition - The company states that pending legal actions are not expected to have a material adverse effect on its financial results, cash flows, or condition[53](index=53&type=chunk) [Item 4. Mine Safety Disclosures](index=8&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES%2E) This section is not applicable to the company - Not applicable[54](index=54&type=chunk) Part II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=9&type=section&id=ITEM%205.%20MARKET%20FOR%20REGISTRANT%27S%20COMMON%20EQUITY%2C%20RELATED%20STOCKHOLDER%20MATTERS%20AND%20ISSUER%20PURCHASES%20OF%20EQUITY%20SECURITIES%2E) The company's common stock trades on NASDAQ under 'RAVE', with no dividends paid or shares repurchased in fiscal 2021 Quarterly Common Stock Price Range (NASDAQ: RAVE) | Fiscal Year/Quarter | High ($) | Low ($) | | :--- | :--- | :--- | | **Fiscal 2021** | | | | Q4 (ended 6/27/2021) | 1.68 | 1.15 | | Q3 (ended 3/28/2021) | 2.09 | 0.85 | | Q2 (ended 12/27/2020) | 2.36 | 0.42 | | Q1 (ended 9/27/2020) | 0.91 | 0.38 | | **Fiscal 2020** | | | | Q4 (ended 6/28/2020) | 1.23 | 0.52 | | Q3 (ended 3/29/2020) | 1.83 | 0.69 | | Q2 (ended 12/29/2019) | 2.85 | 1.44 | | Q1 (ended 9/29/2019) | 3.21 | 2.04 | - The company did not pay any dividends on its common stock during fiscal 2021 or 2020 and has no current intention to pay dividends[58](index=58&type=chunk) - Under the 2007 Stock Purchase Plan, the company is authorized to repurchase up to **3,016,000 shares**, but no purchases were made in fiscal year 2021[59](index=59&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=11&type=section&id=ITEM%207.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS%2E) In fiscal 2021, the company achieved a **$1.5 million net income** from a **$4.2 million net loss** in fiscal 2020, driven by reduced expenses and a PPP loan gain [Results of Operations Overview](index=11&type=section&id=Results%20of%20Operations%20Overview) In fiscal 2021, the company achieved a **net income of $1.5 million** and **Adjusted EBITDA of $2.0 million**, a significant improvement despite decreased revenues Key Financial Results (Fiscal Year Ended) | Metric | June 27, 2021 | June 28, 2020 | Change | | :--- | :--- | :--- | :--- | | Revenues | $8.6M | $10.0M | ($1.4M) | | Net Income (Loss) | $1.5M | ($4.2M) | +$5.7M | | Basic EPS | $0.09 | ($0.28) | +$0.37 | | Diluted EPS | $0.09 | ($0.28) | +$0.37 | Adjusted EBITDA Reconciliation (in thousands) | Line Item | FY 2021 | FY 2020 | | :--- | :--- | :--- | | Net income (loss) | $1,520 | $(4,233) | | Interest expense | 92 | 95 | | Income taxes | (29) | 4,078 | | Depreciation and amortization | 167 | 186 | | **EBITDA** | **$1,750** | **$126** | | Adjustments | 215 | 439 | | **Adjusted EBITDA** | **$1,965** | **$566** | - Total domestic comparable store retail sales for both brands combined decreased slightly to **$83.7 million** in FY2021 from **$85.5 million** in FY2020[67](index=67&type=chunk) [COVID-19 Pandemic](index=12&type=section&id=COVID-19%20Pandemic) The COVID-19 pandemic severely disrupted operations, reducing retail sales and royalties, prompting cost-control measures, with future impacts unpredictable - Pandemic-related restrictions on in-store dining led to dramatically reduced retail sales at Buffet and Pie Five units, which was only modestly offset by increased carry-out and delivery sales[70](index=70&type=chunk) - The company took cost-saving measures in response to the pandemic, including participating in the PPP loan program, furloughing employees, and implementing a **20% base salary reduction** for remaining employees in Q4 of fiscal 2020[70](index=70&type=chunk) [Brand Performance Summaries](index=12&type=section&id=Brand%20Performance%20Summaries) Pizza Inn's domestic retail sales decreased by **9.9%** to **$70.1 million**, while Pie Five's sales dropped **31.8%** to **$17.7 million** in fiscal 2021 Pizza Inn Domestic Performance (FY2021 vs FY2020) | Metric | 2021 | 2020 | % Change | | :--- | :--- | :--- | :--- | | Total Domestic Retail Sales | $70.1M | $77.8M | -9.9% | | Comparable Store Retail Sales | $68.1M | $68.8M | -1.0% | | Average Units Open | 144 | 152 | -5.3% | | Ending Domestic Units | 135 | 151 | -10.6% | Pie Five Domestic Performance (FY2021 vs FY2020) | Metric | 2021 | 2020 | % Change | | :--- | :--- | :--- | :--- | | Total Domestic Retail Sales | $17.7M | $26.0M | -31.8% | | Comparable Store Retail Sales | $15.6M | $16.6M | -6.2% | | Average Units Open | 37 | 54 | -31.5% | | Ending Domestic Units | 33 | 42 | -21.4% | - The net decrease of **9 Pie Five units** in fiscal 2021 was primarily due to the closure of poor-performing units, which management believes provides a stronger foundation for future growth[80](index=80&type=chunk) [Financial Results Analysis](index=17&type=section&id=Financial%20Results%20Analysis) Total revenues decreased to **$8.6 million** in fiscal 2021, primarily due to a **37.7% drop** in Pie Five franchise revenues, while total costs and expenses significantly decreased - Pie Five franchise revenues decreased by **$1.1 million (37.7%)** in FY2021, primarily due to a reduced restaurant count and the effects of COVID-19[92](index=92&type=chunk) - Total general and administrative (G&A) expenses decreased by **$0.8 million** to **$4.7 million** in FY2021, mainly from lower Pie Five advertising costs and payroll[95](index=95&type=chunk) - Impairment of long-lived assets and other lease charges decreased dramatically to **$21 thousand** in FY2021 from **$880 thousand** in FY2020[98](index=98&type=chunk) - The company has net operating loss carryforwards of **$23.6 million** available to reduce future taxable income, which will begin to expire in 2032[103](index=103&type=chunk) [Liquidity and Capital Resources](index=20&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity significantly improved in fiscal 2021, with **$1.5 million cash from operations** and **$3.9 million from financing**, including a forgiven PPP loan Cash Flow Summary (in millions) | Cash Flow Source | FY 2021 | FY 2020 | | :--- | :--- | :--- | | From Operating Activities | $1.5 | ($0.4) | | From Investing Activities | ($0.2) | $0.1 | | From Financing Activities | $3.9 | $1.0 | - The **$0.7 million** Paycheck Protection Program (PPP) loan received in April 2020 was fully forgiven in the fourth quarter of fiscal 2021[114](index=114&type=chunk) - The 2017 At Market Issuance (ATM) Offering expired on November 6, 2020, after raising aggregate gross proceeds of **$4.4 million** over its life[115](index=115&type=chunk) - As of June 27, 2021, **$1.6 million** in par value of the **4% Convertible Senior Notes due 2022** remained outstanding[119](index=119&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=24&type=section&id=ITEM%208.%20FINANCIAL%20STATEMENTS%20AND%20SUPPLEMENTARY%20DATA) This section presents the company's audited consolidated financial statements for fiscal years 2021 and 2020, including the auditor's report, core statements, and notes [Report of Independent Registered Public Accounting Firm](index=32&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Armanino LLP issued an unqualified opinion on the consolidated financial statements, identifying Revenue Recognition as a Critical Audit Matter - The auditor identified Revenue Recognition as a Critical Audit Matter, citing the significant analysis and judgment required due to different contract types, lengths, terms, and conditions for the company's various revenue sources[172](index=172&type=chunk) [Consolidated Financial Statements](index=34&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements show a **net income of $1.52 million** in fiscal 2021, a turnaround from a **$4.23 million net loss** in 2020, with improved assets and reduced liabilities Consolidated Statement of Operations Highlights (in thousands) | Line Item | FY 2021 | FY 2020 | | :--- | :--- | :--- | | **Revenues** | **$8,593** | **$10,028** | | Total costs and expenses | 7,759 | 10,183 | | Gain on forgiveness of PPP loan | (657) | — | | **Income (Loss) Before Taxes** | **1,491** | **(155)** | | **Net Income (Loss)** | **$1,520** | **$(4,233)** | Consolidated Balance Sheet Highlights (in thousands) | Line Item | June 27, 2021 | June 28, 2020 | | :--- | :--- | :--- | | Cash and cash equivalents | $8,330 | $2,969 | | **Total Assets** | **$13,345** | **$9,705** | | **Total Liabilities** | **$7,612** | **$9,202** | | **Total Shareholders' Equity** | **$5,733** | **$503** | [Notes to Consolidated Financial Statements](index=39&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies, revenue, property, convertible notes, the forgiven PPP loan, income tax positions, lease obligations, and segment reporting, with Pizza Inn Franchising as the primary income contributor Revenue Breakdown (in thousands) | Revenue Source | FY 2021 | FY 2020 | | :--- | :--- | :--- | | Franchise royalties | $3,689 | $3,697 | | Supplier and distributor incentive revenues | $3,482 | $3,906 | | Advertising funds contributions | $705 | $799 | | Franchise license fees | $308 | $853 | | Restaurant sales | $— | $240 | | Other | $389 | $533 | | **Total** | **$8,593** | **$10,028** | Segment Income/(Loss) Before Taxes (in thousands) | Segment | FY 2021 | FY 2020 | | :--- | :--- | :--- | | Pizza Inn Franchising | $5,205 | $5,365 | | Pie Five Franchising | $799 | $1,140 | | Company-Owned Restaurants | ($292) | ($1,006) | | Corporate administration and other | ($4,221) | ($5,654) | | **Total** | **$1,491** | **($155)** | - The company maintains a full valuation allowance against its deferred tax assets due to uncertainty about their realizability. As of June 27, 2021, the company had net operating loss carryforwards of **$23.6 million**[209](index=209&type=chunk)[210](index=210&type=chunk) - The **$0.7 million** PPP loan was forgiven in the fourth quarter of fiscal 2021, resulting in a gain recognized in the statement of operations[240](index=240&type=chunk) [Item 9A. Controls and Procedures](index=24&type=section&id=ITEM%209A.%20CONTROLS%20AND%20PROCEDURES%2E) Management concluded that the company's disclosure controls and internal control over financial reporting were effective as of June 27, 2021 - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of the end of the fiscal year[146](index=146&type=chunk) - Management concluded that the company's internal control over financial reporting was effective as of June 27, 2021[147](index=147&type=chunk) Part III [Items 10-14. Directors, Executive Compensation, Security Ownership, and Related Matters](index=25&type=section&id=ITEMS%2010-14) Information for Items 10-14, covering directors, executive compensation, security ownership, and related matters, is incorporated by reference from the definitive proxy statement - Information regarding Directors, Executive Officers, Corporate Governance, Executive Compensation, Security Ownership, and other related matters is incorporated by reference from the company's forthcoming definitive proxy statement[149](index=149&type=chunk)[150](index=150&type=chunk)[151](index=151&type=chunk)[152](index=152&type=chunk)[153](index=153&type=chunk) Part IV [Item 15. Exhibits and Financial Statement Schedules](index=26&type=section&id=ITEM%2015.%20EXHIBITS%20AND%20FINANCIAL%20STATEMENT%20SCHEDULES%2E) This section lists all financial statements, schedules, and exhibits filed with the Form 10-K report, including corporate governance, debt, and material contracts - This item provides a list of all financial statements and exhibits filed with the 10-K report, including key corporate and financial agreements[156](index=156&type=chunk)

SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q (Mark One) Commission File Number: 0-12919 RAVE RESTAURANT GROUP, INC. (Exact name of registrant as specified in its charter) Missouri 45-3189287 (State or other jurisdiction of Incorporation or organization) (I.R.S. Employer Identification No.) 3551 Plano Parkway The Colony, Texas 75056 (Address of principal executive offices) (469) 384-5000 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant ...

Commission File Number: 0-12919 RAVE RESTAURANT GROUP, INC. (Exact name of registrant as specified in its charter) Missouri 45-3189287 (State or other jurisdiction of Incorporation or organization) (I.R.S. Employer Identification No.) 3551 Plano Parkway The Colony, Texas 75056 (Address of principal executive offices) SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q (Mark One) (469) 384-5000 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12( ...

RAVE Restaurant Group, Inc. (NASDAQ:RAVE) Q2 2020 Earnings Conference Call February 12, 2020 5:30 PM ET Company Participants Debbie Lanning - Assistant Controller Brandon Solano - Chief Executive Officer Conference Call Participants Operator Good day and welcome to the RAVE Restaurant Reports Second Quarter 2020 Financial Results Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instru ...

RAVE Restaurant Group, Inc. (NASDAQ:RAVE) Q1 2020 Earnings Conference Call November 13, 2019 5:30 PM ET Company Participants Jacq Barjon â FP&A Manager Brandon Solano â Chief Executive Officer Conference Call Participants Operator Good day and welcome to the RAVE Restaurant Group Incorporated reports First Quarter 2020 Financial Results Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator ...

RAVE Restaurant Group, Inc. (NASDAQ:RAVE) Q4 2019 Results Earnings Conference Call September 30, 2019 5:30 PM ET Company Participants Bob Bafundo - President Conference Call Participants Operator Good day and welcome to the RAVE Restaurant Group's Incorporated Reports Fourth Quarter and Fiscal Year 2019 Financial Results Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] P ...

https://www.sec.gov/Archives/edgar/data/718332/000114036119009778/ex99_1.htm 6/4/2019 EX-99.1 2 ex99_1.htm EXHIBIT 99.1 Exhibit 99.1 (NASDAQ: RAVE) RAVE Restaurant Group Inc. | --- | --- | |----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------- ...

Financial Data and Key Metrics Changes - Total component revenue increased by 15.2% to $3.1 million in Q3 2019 compared to $2.7 million in the same period of the prior year [20] - Year-to-date total consolidated revenue decreased to $9.3 million from $12.3 million in the same period of the prior year, primarily due to a reduction in company-owned Pie Five units [21] - The company reported a net loss of $0.3 million for Q3 2019, an improvement from a net loss of $0.5 million in the same period of the prior year [22] - Year-to-date, the company reported net income of $0.1 million compared to a net loss of $1.4 million in the same period of the prior year [23] - Adjusted EBITDA improved to $0.4 million for Q3 2019 and $1.4 million year-to-date, driven by increased franchise revenues and decreased corporate expenses [25] Business Line Data and Key Metrics Changes - Pizza Inn achieved a 3.3% increase in comparable store sales for Q3 2019 and a 2.8% increase year-to-date, marking its ninth consecutive quarter of same-store sales growth [12][11] - Pie Five experienced a decline in comparable store sales of 4.4% for Q3 2019 and 3.2% year-to-date, with total retail sales decreasing by 18% and 11% respectively [14] - The company opened one new Pie Five unit, bringing the total to 156 domestic units [18] Market Data and Key Metrics Changes - The company noted that online ordering has seen double-digit sales growth for three consecutive years, contributing to overall sales growth [14] - The introduction of new menu items at Pie Five, such as calzones and shareable pizzas, has led to increased customer traffic in many locations [15] Company Strategy and Development Direction - The company is focusing on international operations and development resources to accelerate growth for Pizza Inn and Pie Five [7] - The Goldilocks prototype is being implemented to improve unit economics and address rising real estate costs and labor pressures [16] - Management is working closely with franchisees to develop customized action plans to address specific challenges [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the positive trends in retail sales and profitability, indicating a strong future for the company [32] - The company is optimistic about the investments made in technology and improving the restaurant experience for guests [32] Other Important Information - The company adopted new revenue recognition standards, which impacted shareholders' equity, reducing it by a net of $1.9 million [29] - Cash and cash equivalents increased to $1.9 million as of March 24, 2019, reflecting improved cash flow from operating activities [26] Q&A Session Summary - The Q&A session did not contain any specific questions or answers, as the conference call concluded without further inquiries [34][37]