EXHIBIT 99.1

RAVE RESTAURANT GROUP, INC.


Instructions as to Use of
Rights Certificates
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Consult the Subscription Agent or your bank or broker if you have any questions.

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The following instructions relate to a rights offering (the "Rights Offering") by Rave Restaurant Group, Inc., a Missouri corporation (the "Company"), to the holders of record (collectively, the "Recordholders") of its common stock, par value $0.01 per share (the "Common Stock").  Recordholders at the close of business on December 21, 2016 (the "Record Date") are receiving non-transferable subscription rights (the "Rights") to subscribe for and purchase 4% Convertible Senior Notes due 2022, par value $100 (the "Underlying Notes"). A minimum of $1,000,000 and a maximum of $3,000,000 of Underlying Notes will be offered by the Company's Prospectus dated [_________], 2017 (the "Prospectus").  Each Recordholder has been issued 0.2817% of one Right for each share of Common Stock owned of record as of the close of business on the Record Date (i.e., one Right for each 355 shares), provided that the number of Rights were rounded to the nearest whole number and no fractional Rights were issued. The Rights will expire, if not exercised, at 5:00 p.m., Dallas, Texas time, on [___________], 2017, unless extended in the sole discretion of the Company (as it may be extended, the "Expiration Date"). After the Expiration Date, unexercised Rights will be null and void. The Company will not be obligated to honor any purported exercise of Rights received by Securities Transfer Corporation (the "Subscription Agent") after 5:00 p.m., Dallas, Texas time, on the Expiration Date, regardless of when the documents relating to such exercise were sent, except pursuant to the Guaranteed Delivery Procedures described below. The Company may extend the Expiration Date by up to 30 days by giving oral or written notice to the Subscription Agent on or before the Expiration Date, followed by a press release no later than 9:00 a.m., Dallas, Texas time, on the next business day after the previously scheduled Expiration Date. The Rights will be evidenced by non-transferable Rights certificates (the "Rights Certificates").

The number of Rights to which you are entitled is printed on the face of your Rights Certificate. Each whole Right allows the holder thereof to subscribe for one Underlying Note (the "Basic Subscription Privilege") at a Subscription Price of $100 par value each.

In addition, each holder of Rights who exercises its Basic Subscription Privilege in full will be eligible to subscribe (the "Over-Subscription Privilege") at the same Subscription Price for Underlying Notes that are not purchased pursuant to the exercise of Rights by other holders of Rights under the Basic Subscription Privilege (the "Excess Notes"), subject to availability and proration as described below.  Excess Notes will be available for purchase pursuant to the Over-Subscription Privilege only to the extent that Underlying Notes are not subscribed for pursuant to the Basic Subscription Privilege.  If there are not enough Excess Notes to satisfy all subscriptions made under the Over-Subscription Privilege, the Company will allocate the remaining Excess Notes pro rata, after eliminating all fractional notes, among those Rights holders who exercised their Over-Subscription Privileges.  "Pro rata" means in proportion to the number of Underlying Notes that each holder of Rights has purchased by exercising its Basic Subscription Privilege.  If there is a pro rata allocation of the remaining Excess Notes and a holder of Rights receives an allocation of a greater number of Excess Notes than it subscribed for under its Over-Subscription Privilege, then the Company will allocate to it only the number of Excess Notes for which such holder subscribed.  The Company will allocate the remaining Excess Notes among all other holders exercising their Over-Subscription Privilege.  Such reallocation will be repeated until all Excess Notes have been allocated to the full extent of the Over-Subscription Privilege.  See "The Rights Offering¾Subscription Rights¾Over-Subscription Rights" in the Prospectus.

 

 

You should indicate your intent with regard to the exercise of your Rights by completing the appropriate portions of your Rights Certificate and returning the certificate to the Subscription Agent in the envelope provided pursuant to the procedures described in the Prospectus.

YOUR RIGHTS CERTIFICATE, OR NOTICE OF GUARANTEED DELIVERY, AND SUBSCRIPTION PRICE PAYMENT, INCLUDING FINAL CLEARANCE OF ANY CHECKS, MUST BE RECEIVED BY THE SUBSCRIPTION AGENT ON OR BEFORE 5:00 P.M., DALLAS, TEXAS TIME, ON THE EXPIRATION DATE. ONCE A HOLDER OF RIGHTS HAS EXERCISED A RIGHT, SUCH EXERCISE MAY NOT BE REVOKED. RIGHTS NOT EXERCISED PRIOR TO THE EXPIRATION DATE OF THE RIGHTS OFFERING WILL EXPIRE.

1. Method of Subscription--Exercise of Rights.

To exercise your Rights, complete your Rights Certificate and send the properly completed and executed Rights Certificate evidencing such Rights, with any signatures required to be guaranteed so guaranteed, together with payment in full of the Subscription Price for each Underlying Note subscribed for pursuant to the Basic Subscription Privilege and the Over-Subscription Privilege, to the Subscription Agent on or prior to 5:00 p.m., Dallas, Texas time on the Expiration Date. Payment of the Subscription Price will be held in a segregated account to be maintained by the Subscription Agent. All payments must be made in U.S. dollars for the full number of Underlying Shares being subscribed for:

(a)	by uncertified personal check, payable to Securities Transfer Corporation as Subscription Agent for the Company,

(b)	by certified check or bank draft (cashier's check) drawn on a U.S. bank, or by money order, payable to Securities Transfer Corporation as Subscription Agent for the Company, or

(c)	by wire transfer of immediately available funds directed to the account maintained by the Subscription Agent (the "Subscription Account") at:

 

 

First National Bank Southwest
ABA #111924392
Credit Account No. 4038515
Account Name:   Securities Transfer Corporation as Agent for Rave Restaurant

Any wire transfer should clearly indicate the identity of the subscriber who is paying the Subscription Price by the wire transfer. Payments will be deemed to have been received by the Subscription Agent only upon:

(a)	receipt and clearance of any uncertified check;

(b)	receipt by the Subscription Agent of any certified check or bank draft drawn upon a U.S. bank or any money order; or

(c)	receipt of collected funds in the Subscription Account designated above.

 

If paying by check, bank draft or money order, please reference your Rights Certificate number on your check, bank draft or money order.  If paying by uncertified personal check, please be aware that funds paid by uncertified personal check may take at least five business days to clear. Accordingly, holders of Rights who wish to pay the Subscription Price by means of an uncertified personal check are urged to make payment sufficiently in advance of the Expiration Date to ensure that such payment is received and clears by the Expiration Date, and are urged to consider payment by means of a certified or bank check, money order or wire transfer of immediately available funds.

The Rights Certificate and payment of the Subscription Price or, if applicable, Notice of Guaranteed Delivery (as defined below), must be delivered to the Subscription Agent by one of the methods described below:

By mail, by hand or by overnight courier to:

Securities Transfer Corporation
2901 North Dallas Parkway, Suite 380
Plano, Texas  75093
Telephone Number for Confirmation: (469) 633-0101

Delivery to any address or by a method other than that set forth above does not constitute valid delivery.

 

 

By making arrangements with your bank or broker for the delivery of funds on your behalf you may also request such bank or broker to exercise the Rights Certificate on your behalf. Alternatively, you may cause a written guarantee substantially in the form enclosed herewith (the "Notice of Guaranteed Delivery"), from a member firm of a registered national securities exchange or a member of the National Association of Securities Dealers, Inc., or from a commercial bank or trust company having an office or correspondent in the United States or from a bank, stockbroker, savings and loan association or credit union with membership in an approved signature guarantee medallion program, pursuant to Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended (each, an "Eligible Institution"), to be received by the Subscription Agent on or prior to the Expiration Date, together with payment in full of the applicable Subscription Price. Such Notice of Guaranteed Delivery must state your name, the number of Rights represented by the Rights Certificate held by you, the number of Underlying Notes being subscribed for pursuant to the Basic Subscription Privilege and the number of Excess Notes, if any, being subscribed for pursuant to the Over-Subscription Privilege, and that you will guarantee the delivery to the Subscription Agent of any properly completed and executed Rights Certificate evidencing such Rights within three business days following the date of the Notice of Guaranteed Delivery. If this procedure is followed, the properly completed Rights Certificate evidencing the Rights being exercised, with any signatures required to be guaranteed so guaranteed, must be received by the Subscription Agent within three business days following the date of the Notice of Guaranteed Delivery. The Notice of Guaranteed Delivery may be delivered to the Subscription Agent in the same manner as Rights Certificates at the address set forth above, or may be transmitted to the Subscription Agent by facsimile transmission (Facsimile No. 469-633-0088). Additional copies of the Notice of Guaranteed Delivery may be obtained upon request from the Subscription Agent at the address, or by calling the telephone number set forth above.

Banks, brokers and other nominee holders of Rights who exercise the Basic Subscription Privilege and the Over-Subscription Privilege on behalf of beneficial owners of Rights will be required to certify to the Subscription Agent and the Company, in connection with the exercise of the Over-Subscription Privilege, as to the aggregate number of Rights that have been exercised and the number of Underlying Shares that are being subscribed for pursuant to the Over-Subscription Privilege, by each beneficial owner of Rights (including such nominee itself) on whose behalf such nominee holder is acting.  If more Excess Notes are subscribed for pursuant to the Over-Subscription Privilege than are available for sale, the Excess Notes will be allocated, as described above, among beneficial owners exercising the Over-Subscription Privilege in proportion to such owners' exercise of Rights pursuant to the Basic Subscription Privilege.

If the aggregate Subscription Price paid by you is insufficient to purchase the number of Underlying Notes subscribed for, or if no number of Underlying Notes to be purchased is specified, then you will be deemed to have exercised the Basic Subscription Privilege to purchase Underlying Notes to the full extent of the payment tendered.

If the aggregate Subscription Price paid by you exceeds the amount necessary to purchase the number of Underlying Notes for which you have indicated an intention to subscribe (such excess being the "Subscription Excess"), then you will be deemed to have exercised the Over-Subscription Privilege to the full extent of the excess payment tendered, to purchase, to the extent available, that number of whole Notes equal to the quotient obtained by dividing the Subscription Excess by the Subscription Price.  Any remaining amount shall be returned to you by mail, without interest or deduction, as soon as practicable after the Expiration Date and after all prorations and adjustments contemplated by the terms of the Rights Offering have been effected.

The Company will not issue any fractional Underlying Notes (or distribute cash in lieu thereof). If the number of Rights exercised by you would result in your receiving a fractional Underlying Note, the aggregate number of Underlying Notes to be issued will be rounded down to the nearest whole number.

 

 

2. Issuance of Notes.

The following deliveries and payments will be made to the address shown on the face of your Rights Certificate, unless you provide instructions to the contrary in your Rights Certificate.

(a)

Basic Subscription Privilege.  As soon as practicable after the Expiration Date and the valid exercise of Rights, the Subscription Agent will issue and register by book entry the notes purchased in the rights offering.  The notes will be registered by book entry under the name of Securities Transfer Corporation, our transfer agent, who will act as the trustee for noteholders.  We will not issue any certificate or instrument evidencing the notes. Upon issuance, the convertible notes will be transferable. See "The Rights Offering—Issuance of Convertible Notes" in the Prospectus.

(b)

Over-Subscription Privilege.  As soon as practicable after the Expiration Date and after all prorations and adjustments contemplated by the terms of the Rights Offering have been effected, each Rights holder who validly exercises the Over-Subscription Privilege will receive a notice regarding the amount of Excess Notes allocated to such holder.

(c)

Excess Cash Payments.  As soon as practicable after the Expiration Date and after all prorations and adjustments contemplated by the terms of the Rights Offering have been effected, each Rights holder who has exercised, or is deemed to have exercised, the Over-Subscription Privilege will receive any excess amount, without interest or deduction, received in payment of the Subscription Price for Excess Notes that are subscribed for by such Rights holder but not allocated to such Rights holder pursuant to the Over-Subscription Privilege.

 

3. Sale or Transfer of Rights.

The Rights are not transferable in any way, except to affiliates of the recipient and except by operation of law. Evidence satisfactory to the Company that any such permitted transfer is proper must be delivered to the Subscription Agent prior to the Expiration Date by one of the methods described below:

By mail, by hand or by overnight courier to:

Securities Transfer Corporation
2901 North Dallas Parkway, Suite 380
Plano, Texas  75093

4. Execution.

(a)

Execution by Registered Holder.  The signature on the Rights Certificate must correspond with the name of the registered holder exactly as it appears on the face of the Rights Certificate without any alteration or change whatsoever. Persons who sign the Rights Certificate in a representative or other fiduciary capacity must indicate their capacity when signing and, unless waived by the Subscription Agent in its sole and absolute discretion, must present to the Subscription Agent satisfactory evidence of their authority to so act.

 

 

 

(b)

Execution by Person Other than Registered Holder.   If the Rights Certificate is executed by a person other than the holder named on the face of the Rights Certificate, proper evidence of authority of the person executing the Rights Certificate must accompany the same unless, for good cause, the Subscription Agent dispenses with proof of authority.

(c)	Signature Guarantees.  Your signature must be guaranteed by an Eligible Institution if you specify special payment or delivery instructions.

 

5. Method of Delivery.

The method of delivery of the Rights Certificate and payment of the Subscription Price to the Subscription Agent will be at the election and risk of the Rights holder but, if sent by mail, it is recommended that such certificates and payments be sent by registered mail, properly insured, with return receipt requested, and that a sufficient number of days be allowed to ensure delivery to the Subscription Agent and the clearance of payment prior to 5:00 p.m., Dallas, Texas time, on the Expiration Date.  Because uncertified personal checks may take at least five business days to clear, you are strongly urged to pay, or arrange for payment, by means of certified or cashier's check, money order or wire transfer of funds.

6. Special Provisions Relating to the Delivery of Rights Through the Depository Trust Company.

In the case of Rights that are held of record through the Depository Trust Company (the "Book-Entry Transfer Facility"), exercises of the Basic Subscription Privilege and the Over-Subscription Privilege may be effected by instructing the Book-Entry Transfer Facility to transfer Rights from the Book-Entry Transfer Facility account of such holder to the Book-Entry Transfer Facility account of the Subscription Agent, together with certification as to the aggregate number of Rights exercised and the number of Underlying Notes thereby subscribed for pursuant to the Basic Subscription Privilege and the Over-Subscription Privilege by each beneficial owner of Rights on whose behalf such nominee is acting, and payment of the Subscription Price for each note subscribed for pursuant to the Basic Subscription Privilege and the Over-Subscription Privilege.

7. Substitute Form W-9.

Each Rights holder who elects to exercise Rights should provide the Subscription Agent with a correct Taxpayer Identification Number (TIN) on Substitute Form W-9.  See "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9." Failure to provide the information on the form may subject such holder to a $50.00 penalty for each such failure and to 30% federal income tax withholding with respect to interest that may be paid by the Company on notes purchased upon the exercise of Rights (for those holders exercising Rights).