Form: 10-Q

Quarterly report pursuant to Section 13 or 15(d)

February 6, 2025


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 December 29, 2024 or
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from ________ to ________.
 
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)
(Zip Code)
 
(469) 384-5000
(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, $0.01 par value
 
RAVE
 
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 every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit 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 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, indicate 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 January 30, 2025, 14,711,566 shares of the issuer’s common stock were outstanding.
 
 
 

1

RAVE RESTAURANT GROUP, INC.
Index
 
PART I. FINANCIAL INFORMATION
 
     
Item 1.
Financial Statements
Page
     
  Condensed Consolidated Statements of Income (unaudited) for the three and sixmonths ended December 29, 2024 and December 24, 2023 3
     
  Condensed Consolidated Balance Sheets at December 29, 2024 (unaudited) and June 30, 2024 4
     
  Condensed Consolidated Statements of Shareholders’ Equity (unaudited) for thethree and six months ended December 29, 2024 and December 24, 2023 5
     
  Condensed Consolidated Statements of Cash Flows (unaudited) for the six months ended December 29, 2024 and December 24, 2023 6
     
  Notes to Unaudited Condensed Consolidated Financial Statements 7
     
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations 14
     
Item 3.
Quantitative and Qualitative Disclosures About Market Risk 24
     
Item 4.
Controls and Procedures 24
     
PART II. OTHER INFORMATION
     
Item 1.
Legal Proceedings 25
     
Item 1A.
Risk Factors 25
     
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds 25
     
Item 3.
Defaults Upon Senior Securities 25
     
Item 4.
Mine Safety Disclosures 25
     
Item 5.
Other Information 25
     
Item 6.
Exhibits 26
     
  27
 
2

PART I. FINANCIAL INFORMATION
 
Item 1. Financial Statements
 
RAVE RESTAURANT GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
 
   
Three Months Ended
 
Six Months Ended
   
December 29,
2024
 
December 24,
2023
 
December 29,
2024
 
December 24,
2023
REVENUES
 
$
2,869
   
$
2,746
   
$
5,919
   
$
5,833
 
                                 
COSTS AND EXPENSES
                               
General and administrative expenses
   
1,314
     
1,341
     
2,730
     
2,660
 
Franchise expenses
   
829
     
844
     
1,824
     
2,016
 
Provision (recovery) for credit losses
   
9
     
10
     
(8
)
   
35
 
Interest income
   
(87
)
   
(46
)
   
(169
)
   
(48
)
Depreciation and amortization expense
   
53
     
57
     
96
     
112
 
Total costs and expenses
   
2,118
     
2,206
     
4,473
     
4,775
 
INCOME BEFORE TAXES
   
751
     
540
     
1,446
     
1,058
 
Income tax expense (benefit)
   
144
     
(13
)
   
313

   
119
 
NET INCOME
 
$
607
   
$
553
   
$
1,133
   
$
939
 
                                 
INCOME PER SHARE OF COMMON STOCK
                               
Basic
 
$
0.04
   
$
0.04
   
$
0.08
   
$
0.07
 
Diluted
 
$
0.04
   
$
0.04
   
$
0.08
   
$
0.07
 
                                 
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
                               
Basic
   
14,690
     
14,444
     
14,638
     
14,299
 
Diluted
   
14,716
     
14,465
     
14,660
     
14,319
 
 
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.
3

RAVE RESTAURANT GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
(Unaudited)
 
   
December 29,
2024
 
June 30,
2024
ASSETS
           
CURRENT ASSETS
           
Cash and cash equivalents
 
$
2,871
   
$
2,886
 
Short-term investments
   
6,045
     
4,945
 
Accounts receivable, less allowance for credit losses of $42 and $57, respectively
   
1,115
     
1,411
 
Notes receivable, current
   
65
     
68
 
Assets held for sale
   
26
     
33
 
Deferred contract charges, current
   
23
     
26
 
Prepaid expenses and other current assets
   
207
     
167
 
Total current assets
   
10,352
     
9,536
 
                 
LONG-TERM ASSETS
               
Property and equipment, net
   
171
     
182
 
Operating lease right-of-use assets, net
   
648
     
817
 
Intangible assets definite-lived, net
   
211
     
252
 
Notes receivable, net of current portion
   
56
     
79
 
Deferred tax asset, net
   
4,492
     
4,756
 
Deferred contract charges, net of current portion
   
185
     
197
 
Total assets
 
$
16,115
   
$
15,819
 
                 
LIABILITIES AND SHAREHOLDERS’ EQUITY
               
CURRENT LIABILITIES
               
Accounts payable - trade
 
$
455
   
$
359
 
Accrued expenses
   
498
     
915
 
Operating lease liabilities, current
   
371
     
402
 
Deferred revenues, current
   
116
     
343
 
Total current liabilities
   
1,440
     
2,019
 
                 
LONG-TERM LIABILITIES
               
Operating lease liabilities, net of current portion
   
393
     
555
 
Deferred revenues, net of current portion
   
503
     
543
 
Total liabilities
   
2,336
     
3,117
 
                 
COMMITMENTS AND CONTINGENCIES (SEE NOTE C)
   
 
     
 
 
                 
SHAREHOLDERS’ EQUITY
               
Common stock, $0.01 par value; authorized 26,000,000 shares; issued 25,647,171 and 25,522,171 shares, respectively; outstanding 14,711,566 and 14,586,566 shares, respectively
   
256
     
255
 
Additional paid-in capital
   
37,506
     
37,563
 
Retained earnings
   
6,045
     
4,912
 
Treasury stock, at cost
               
Shares in treasury: 10,935,605 and 10,935,605 respectively
   
(30,028
)
   
(30,028
)
Total shareholders' equity
   
13,779
     
12,702
 
 
               
Total liabilities and shareholders' equity
 
$
16,115
   
$
15,819
 
 
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.
 
4

RAVE RESTAURANT GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(In thousands)
(Unaudited)
 
   
Common Stock
 
Additional Paid-in
     
Treasury Stock
   
   
Shares
 
Amount
 
Capital
 
Retained Earnings
 
Shares
 
Amount
 
Total
Balance, June 25, 2023
   
25,090
   
$
251
   
$
37,729
   
$
2,439
     
(10,936
)
 
$
(30,028
)
 
$
10,391
 
Stock-based compensation expense
   
     
     
79
     
     
     
     
79
 
Net income
   
     
     
     
386
     
     
     
386
 
Balance, September 24, 2023
   
25,090
   
$
251
   
$
37,808
   
$
2,825
     
(10,936
)
 
$
(30,028
)
 
$
10,856
 
Stock-based compensation expense
   
     
     
3
     
     
     
     
3
 
RSU vested and taxes paid on RSUs
   
432
     
4
     
(315
)
   
     
     
     
(311
)
Net income
   
     
     
     
553
     
     
     
553
 
Balance, December 24, 2023
   
25,522
   
$
255
   
$
37,496
   
$
3,378
     
(10,936
)
 
$
(30,028
)
 
$
11,101
 
 
   
Common Stock
   
Additional Paid-in
       
Treasury Stock
       
   
Shares
 
Amount
 
Capital
 
Retained Earnings
 
Shares
 
Amount
 
Total
Balance, June 30, 2024
   
25,522
   
$
255
   
$
37,563
   
$
4,912
     
(10,936
)
 
$
(30,028
)
 
$
12,702
 
Stock-based compensation expense
   
     
     
73
     
     
     
     
73
 
Net income
   
     
     
     
526
     
     
     
526
 
Balance, September 29, 2024
   
25,522
   
$
255
   
$
37,636
   
$
5,438
     
(10,936
)
 
$
(30,028
)
 
$
13,301
 
Stock-based compensation expense
   
     
     
53
     
     
     
     
53
 
RSU vested and taxes paid on RSUs
   
125
     
1
     
(183
)
   
     
     
     
(182
)
Net income
   
     
     
     
607
     
     
     
607
 
Balance, December 29, 2024
   
25,647
   
$
256
   
$
37,506
   
$
6,045
     
(10,936
)
 
$
(30,028
)
 
$
13,779
 
 
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.
 
5

RAVE RESTAURANT GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 
   
Six Months Ended
   
December 29,
2024
 
December 24,
2023
CASH FLOWS FROM OPERATING ACTIVITIES:
           
Net income
 
$
1,133
   
$
939
 
Adjustments to reconcile net income to cash provided by operating activities:
               
Amortization of discount on short-term investment
   
(63
)
   
 
Impairment of long-lived assets and other lease charges
   
9
     
 
Stock-based compensation expense
   
126
     
82
 
Depreciation and amortization
   
46
     
70
 
Amortization of operating right-of-use assets
   
169
     
219
 
Amortization of definite-lived intangible assets
   
41
     
42
 
Non-cash lease expense
   
43
     
 
Provision (recovery) for credit losses
   
(8
)
   
35
 
Deferred income tax
   
264
     
71
 
Changes in operating assets and liabilities:
               
Accounts receivable
   
304
     
(69
)
Notes receivable
   
     
(54
)
Deferred contract charges
   
15
     
11
 
Prepaid expenses and other current assets
   
(40
)
   
(254
)
Accounts payable - trade
   
96
     
151
 
Accrued expenses
   
(417
)
   
(442
)
Operating lease liabilities
   
(236
)
   
(249
)
Deferred revenues
   
(267
)
   
(247
)
Cash provided by operating activities
   
1,215
     
305
 
                 
CASH FLOWS FROM INVESTING ACTIVITIES:
               
Purchases of short-term investments
   
(8,102
)
   
 
Maturities of short-term investments
   
7,065
     
 
Payments received on notes receivable
   
26
     
30
 
Proceeds from sale of assets
   
7
     
 
Purchase of definite-lived intangible assets
   
     
(8
)
Purchase of property and equipment
   
(44
)
   
(38
)
Cash used in investing activities
   
(1,048
)
   
(16
)
                 
CASH FLOWS FROM FINANCING ACTIVITIES:
               
Taxes paid on issuance of restricted stock units
   
(182
)
   
(311
)
Cash used in financing activities
   
(182
)
   
(311
)
                 
Net decrease in cash and cash equivalents
   
(15
)
   
(22
)
Cash and cash equivalents, beginning of period
   
2,886
     
5,328
 
Cash and cash equivalents, end of period
 
$
2,871
   
$
5,306
 
                 
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
               
                 
CASH PAID FOR:
               
Income taxes (net of refunds)
 
$
98
   
$
4
 
                 
NON-CASH ACTIVITIES:
               
Operating lease right of use assets at purchase
  $ 24
    $
 
Operating lease liability at purchase
  $
24
    $

 
 
 
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.
 
6

RAVE RESTAURANT GROUP, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
Rave Restaurant Group, Inc., through its subsidiaries (collectively, the “Company” or “we,” “us” or “our”), franchises pizza buffet (“Buffet Units”), delivery/carry-out (“Delco Units”), express restaurants (“Express Units”) and ghost kitchens (“Pizza Inn Ghost Kitchen Units”) under the trademark “Pizza Inn” and franchises fast casual pizza restaurants (“Pie Five Units”) and ghost kitchens (“Pie Five Ghost Kitchen Units”) under the trademarks “Pie Five Pizza Company” or “Pie Five”. The Company also licenses Pizza Inn Express, or PIE, kiosks (“PIE Units”) under the trademark “Pizza Inn”. We facilitate food, equipment, and supply distribution to our domestic and international system of restaurants through agreements with third-party distributors. The accompanying condensed consolidated financial statements of Rave Restaurant Group, Inc. have been prepared without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in the financial statements have been omitted pursuant to such rules and regulations. The unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2024.
 
In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to fairly present the Company’s financial position and results of operations for the interim periods reflected. Except as noted, all adjustments are of a normal recurring nature. Results of operations for the fiscal periods presented are not necessarily indicative of fiscal year-end results.
 
Note A - Summary of Significant Accounting Policies
 
Principles of Consolidation
The consolidated financial statements include the accounts of Rave Restaurant Group, Inc. and its subsidiaries, all of which are wholly owned. All appropriate inter-company balances and transactions have been eliminated.
 
Cash and Cash Equivalents
The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.
 
Short-Term Investments
The Company holds short-term investments in U.S. Treasury bills, classified as trading securities. Accordingly, interest income is recorded through the Condensed Consolidated Statements of Income, when earned. Management has elected to classify all U.S. Treasury bills as short-term, regardless of their maturity dates, as these are readily available to fund current operations and can be liquidated at any time at the discretion of the Company. As of December 29, 2024 and June 30, 2024, the Company held U.S. Treasury bills valued at approximately $6.0 million and $4.9 million, respectively, which are included within short-term investments on the accompanying Condensed Consolidated Balance Sheets. For the three months ended December 29, 2024 and December 24, 2023, interest income recognized on the U.S. Treasury bills was $87 thousand and $46 thousand, respectively. For the six months ended December 29, 2024 and December 24, 2023, interest income recognized on the U.S. Treasury bills was $169 thousand and $48 thousand, respectively.
 
Fair Value Measurements
Assets and liabilities carried at fair value are categorized based on the level of judgment associated with the inputs used to measure their fair value. Authoritative guidance for fair value measurements establishes a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into the following three levels:
 
Level 1:
Inputs are unadjusted quoted market prices in active markets for identical assets or liabilities at the measurement date.
 
Level 2:
Inputs (other than quoted prices included in Level 1) that are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date for the duration of the instrument’s anticipated life.
 
Level 3:
Inputs are unobservable and therefore reflect management’s best estimate of the assumptions that market participants would use in pricing the asset or liability.
 
The fair value of the Company’s investments in U.S. Treasury bills at December 29, 2024 and December 24, 2023, was determined using Level 1 observable inputs. Management believes the carrying amounts of other financial instruments at December 29, 2024 and December 24, 2023, including cash, accounts receivable, accounts payable, and accrued expenses are representative of their fair values due to their short-term maturities.
 
7

The following table summarizes the Company’s financial assets and financial liabilities measured at fair value (in thousands): 
 
   
December 29, 2024
 
June 30, 2024
Fair Value Measurements
 
Level 1
 
Level 2
 
Level 3
 
Total
 
Level 1
 
Level 2
 
Level 3
 
Total
U.S. Treasury bills
 
$
6,045
   
$
   
$
   
$
6,045
   
$
4,945
   
$
   
$
   
$
4,945
 
   
$
6,045
   
$
   
$
   
$
6,045
   
$
4,945
   
$
   
$
   
$
4,945
 
 
The Company has no financial assets or liabilities classified within Level 3 of the valuation hierarchy.
 
These items are classified in their entirety based on the lowest priority level of input that is significant to the fair value measurement. The assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the placement of assets and liabilities within the levels of the fair value hierarchy.
 
Accounts Receivable and Allowance for Credit Losses
Accounts receivable consist primarily of receivables generated from franchise royalties and supplier concessions. The Company records an allowance for credit losses to allow for any amounts that may be unrecoverable based upon an analysis of the Company’s prior collection experience, customer creditworthiness and current economic trends. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. Finance charges may be accrued at a rate of 18% per year, or up to the maximum amount allowed by law, on past due receivables. The interest income recorded from finance charges is immaterial.
 
The Company monitors franchisee receivable balances and adjusts credit terms when necessary to minimize the Company’s exposure to high-risk accounts receivable. For the three month period ended December 29, 2024, provision for credit losses was $9 thousand compared to $11 thousand for the same period in the prior fiscal year. For the six month period ended December 29, 2024, recoveries for credit losses were $8 thousand compared to provision for credit losses of $36 thousand for the same period in the prior fiscal year.
 
Changes in the allowance for credit losses from continuing operations consisted of the following (in thousands):
 
   
Three Months Ended
   
Six Months Ended
   
December 29, 2024
 
December 24, 2023
 
December 29, 2024
 
December 24, 2023
Balance at beginning of year
 
$
40
   
$
11
   
$
57
   
$
58
 
Provision (recovery) for credit losses
   
9
     
11
     
(8
)
   
36
 
Amounts written off
   
(7
)
   
     
(7
)
   
(72
)
Ending balance
 
$
42
   
$
22
   
$
42
   
$
22
 
 
Fiscal Quarters
The three and six month periods ended December 29, 2024 and December 24, 2023 each contained 13 weeks and 26 weeks, respectively.
 
Use of Management Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company’s management to make estimates and assumptions that affect its reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingent liabilities. The Company bases its estimates on historical experience and other various assumptions that it believes are reasonable under the circumstances. Estimates and assumptions are reviewed periodically. Actual results could differ materially from estimates.
 
Recent Accounting Pronouncements
In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU” or “standard”) 2023-07, Segment Reporting: Improvements to Reportable Segment Disclosures (Topic 280), which requires companies to enhance disclosure of significant reportable segment expenses. The new guidance is effective for the Company's fiscal year beginning after December 15, 2023 and for interim periods beginning after December 15, 2024. Management believes that adopting this standard will not have a material impact on the Company's consolidated financial statements and related disclosures as a result of adopting this standard.
 
8

In December 2023, FASB issued ASU 2023-09, Income Taxes: Improvements to Income Tax Disclosures (Topic 740), which requires companies to provide a more granular breakdown of the components that make up their effective tax rate and additional disclosures about the nature and effect of significant reconciling items. The new guidance is effective for the Company's fiscal year beginning after December 15, 2024. Management believes that adopting this standard will not have a material impact on the Company's consolidated financial statements and related disclosures as a result of adopting this standard.
 
Revenue Recognition
Revenue is measured based on consideration specified in contracts with customers and excludes incentives and amounts collected on behalf of third parties, primarily sales tax. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction that are collected by the Company from a customer are excluded from revenue.
 
The following describes principal activities, separated by major product or service, from which the Company generates its revenues:
 
Franchise Revenues
 
Franchise revenues consist of 1) franchise royalties, 2) supplier and distributor incentive revenues, 3) franchise license fees, 4) area development exclusivity fees and foreign master license fees, 5) advertising fund contributions, and 6) supplier convention funds.
 
Franchise royalties, which are based on a percentage of net retail sales, are recognized as sales occur.
 
Supplier and distributor incentive revenues are recognized when title to the underlying commodities transfer.
 
Franchise license fees are typically billed upon execution of the franchise agreement and amortized over the term of the franchise agreement, which typically range from five to 20 years. Fees received for renewal periods are amortized over the life of the renewal period. In the event of a closed franchise or terminated development agreement, the remaining balance of unamortized license fees will be recognized in entirety as of the date of the closure or termination.
 
Area development exclusivity fees and foreign master license fees are typically billed upon execution of the area development and foreign master license agreements. Area development exclusivity fees are included in deferred revenue in the accompanying Condensed Consolidated Balance Sheets and allocated on a pro rata basis to all stores opened under that specific development agreement as the stores are opened. Area development exclusivity fees that include rights to sub-franchise are amortized as revenue over the term of the contract.
 
Advertising fund contributions for Pizza Inn and Pie Five units represent contributions collected where we have control over the activities of the fund. Contributions are based on a percentage of net retail sales. We have determined that we are the principal in these arrangements, and advertising fund contributions and expenditures are, therefore, reported on a gross basis in the Condensed Consolidated Statements of Income. In general, we expect such advertising fund contributions and expenditures to be largely offsetting and, therefore, do not expect a significant impact on our reported income before income taxes. Our obligation related to these funds is to develop and conduct advertising activities. Pizza Inn and Pie Five marketing fund contributions are billed and collected weekly or monthly.
 
Supplier convention funds are deferred until the obligations of the agreement are met and the event takes place.
 
Rental Income
 
The Company subleases some of its restaurant space to a third-party. The Company’s sublease has terms that end in 2025. The sublease agreement is non-cancelable through the end of the term and both parties have substantive rights to terminate the lease when the term is complete. Sublease agreements are not capitalized and are recorded as rental income in the period that rent is received.
 
Total revenues consist of the following (in thousands):
 
   
Three Months Ended
 
Six Months Ended
 
    December 29, 2024     December 24, 2023     December 29, 2024     December 24, 2023  
Franchise royalties
 
$
1,144
   
$
1,171
   
$
2,265
   
$
2,396
 
Supplier and distributor incentive revenues
   
1,156
     
1,051
     
2,348
     
2,151
 
Franchise license fees
   
36
     
50
     
64
     
151
 
Area development exclusivity fees and foreign master license fees
   
3
     
3
     
6
     
7
 
Advertising fund contributions
   
502
     
426
     
966
     
848
 
Supplier convention funds
   
     
     
217
     
187
 
Rental income
   
23
     
38
     
46
     
85
 
Other
   
5
     
7
     
7
     
8
 
   
$
2,869
   
$
2,746
   
$
5,919
   
$
5,833
 
 
9

Stock-Based Compensation
The Company accounts for stock options using the fair value recognition provisions of the authoritative guidance on stock-based payments. The Company uses the Black-Scholes formula to estimate the value of stock-based compensation for options granted to employees and directors and expects to continue to use this acceptable option valuation model in the future. The authoritative guidance also requires the benefits of tax deductions in excess of recognized compensation cost to be reported as a financing cash flow.
 
Restricted stock units (“RSUs”) represent the right to receive shares of common stock upon the satisfaction of vesting requirements, performance criteria and other terms and conditions. Compensation cost for RSUs is measured as an amount equal to the fair value of the RSUs on the date of grant and is expensed over the vesting period if achievement of the performance criteria is deemed probable, with the amount of the expense recognized based on the best estimate of the ultimate achievement level.
 
Note B - Leases
 
The Company determines if an arrangement is a lease at inception of the arrangement. To the extent that it can be determined that an arrangement represents a lease, it is classified as either an operating lease or a finance lease. The Company does not currently have any finance leases. The Company capitalizes operating leases on the Condensed Consolidated Balance Sheets through a right-of-use asset and a corresponding lease liability. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Short-term leases that have an initial term of one year or less are not capitalized. The Company does not presently have any short-term leases.
 
Operating lease right-of-use assets and liabilities are recognized at the commencement date of an arrangement based on the present value of lease payments over the lease term. In addition to the present value of lease payments, the operating lease right-of-use asset also includes any lease payments made to the lessor prior to lease commencement less any lease incentives and initial direct costs incurred. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term.
 
Nature of Leases 
 
The Company leases certain office space, restaurant space, and information technology equipment under non-cancelable leases to support its operations. A more detailed description of significant lease types is included below.
 
Office Space Agreements
 
The Company rents office space from third parties for its corporate location. Office space agreements are typically structured with non-cancelable terms of one to 10 years. The Company has concluded that its office space agreements represent operating leases with a lease term that equals the primary non-cancelable contract term. Upon completion of the primary term, both parties have substantive rights to terminate the lease. As a result, enforceable rights and obligations do not exist under the rental agreement subsequent to the primary term.
 
Restaurant Space Agreements
 
The Company subleases some of its restaurant space to a third-party. The Company’s sublease has terms that end in 2025. The sublease agreement is non-cancelable through the end of the term and both parties have substantive rights to terminate the lease when the term is complete. Sublease agreements are not capitalized and are recorded as rental income in the period that rent is received.
 
Information Technology Equipment Agreements
 
The Company rents information technology equipment, primarily printers and copiers, from a third-party for its corporate office location. Information technology equipment agreements are typically structured with non-cancelable terms of one to five years. The Company has concluded that its information technology equipment agreements are operating leases.
 
Discount Rate
 
Leases typically do not provide an implicit interest rate. Accordingly, the Company is required to use its incremental borrowing rate in determining the present value of lease payments based on the information available at the lease commencement date. The Company’s incremental borrowing rate reflects the estimated rate of interest that it would pay to borrow on a collateralized basis over a similar term for an amount equal to the lease payments in a similar economic environment. The Company uses the implicit rate in the limited circumstances in which that rate is readily determinable.
 
10

Lease Guarantees
 
The Company has guaranteed the financial responsibilities of certain franchised store leases. These guaranteed leases are not considered operating leases because the Company does not have the right to control the underlying asset. If the franchisee abandons the lease and fails to meet the lease’s financial obligations, the lessor may assign the lease to the Company for the remainder of the term. If the Company does not expect to assign the abandoned lease to a new franchisee within 12 months, the lease will be considered an operating lease and a right-of-use asset, and lease liability will be recognized.
 
Practical Expedients and Accounting Policy Elections
 
Certain lease agreements include lease and non-lease components. For all existing asset classes with multiple component types, the Company has utilized the practical expedient that exempts it from separating lease components from non-lease components. Accordingly, the Company accounts for the lease and non-lease components in an arrangement as a single lease component.
 
In addition, for all existing asset classes, the Company has made an accounting policy election not to apply the lease recognition requirements to short-term leases (that is, a lease that, at commencement, has a lease term of 12 months or less and does not include an option to purchase the underlying asset that the Company is reasonably certain to exercise). Accordingly, we recognize lease payments related to our short-term leases in our income statements on a straight-line basis over the lease term which has not changed from our prior recognition. To the extent that there are variable lease payments, we recognize those payments in our income statements in the period in which the obligation for those payments is incurred.
 
The components of total lease expense for the three and six months ended December 29, 2024 and December 24, 2023, where operating lease cost is included in general and administrative expense and sublease income is included in revenues in the accompanying Condensed Consolidated Statements of Income, are as follows (in thousands):
 
   
Three Months Ended
 
Six Months Ended
    December 29, 2024     December 24, 2023     December 29, 2024     December 24, 2023  
Operating lease cost
 
$
103
   
$
117
   
$
207
   
$
240
 
Sublease income
   
(23
)
   
(38
)
   
(46
)
   
(85
)
Total lease expense, net of sublease income
 
$
80
   
$
79
   
$
161
   
$
155
 
 
Weighted average remaining lease term and weighted average discount rate for operating leases are as follows:
 
   
December 29, 2024
 
December 24, 2023
Weighted average remaining lease term
 
2.1 Years
   
2.0 Years
 
Weighted average discount rate
   
4.1
%
   
4.0
%
 
Operating lease liabilities with enforceable contract terms that are greater than one year mature as follows (in thousands):
 
 
   
Operating Leases
 
2025
   
201
 
2026
   
388
 
2027
   
197
 
2028
   
6
 
2029
   
6
 
Thereafter
   
1
 
Total operating lease payments
 
$
799
 
Less: imputed interest
   
(35
)
Total operating lease liability
 
$
764
 
 
Note C - Commitments and Contingencies
 
The Company is subject to various claims and contingencies related to employment agreements, franchise disputes, lawsuits, taxes, food product purchase contracts and other matters arising out of the normal course of business. Management believes that any such claims and actions currently pending are either covered by insurance or would not have a material adverse effect on the Company’s results of operations or financial condition if decided in a manner that is unfavorable to the Company.
 
11

Note D - Stock-Based Compensation
 
Stock Options:
 
For the three and six months ended December 29, 2024, the Company recognized stock-based compensation expense related to stock options of zero. For the three and six months ended December 24, 2023, the Company recognized stock-based compensation expense related to stock options of zero. As of December 29, 2024, there was no unamortized stock-based compensation expense related to stock options.
 
The following table summarizes the number of shares of the Company’s common stock subject to outstanding stock options:
 
   
Six Months Ended
    December 29, 2024    December 24, 2023 
    Shares     Shares  
Outstanding at beginning of year
   
114,286
     
151,750
 
                 
Granted
   
     
 
Exercised
   
     
 
Forfeited/Canceled/Expired
   
     
(8,664
)
                 
Outstanding at end of period
   
114,286
     
143,086
 
                 
Exercisable at end of period
   
114,286
     
143,086
 
 
Restricted Stock Units:
 
For the three and six months ended December 29, 2024, the Company had stock-based compensation expense related to RSUs of $53 thousand and $126 thousand, respectively. For the three and six months ended December 24, 2023, the Company had stock-based compensation expense related to RSUs of $3 thousand and $82 thousand, respectively. As of December 29, 2024, there was $492 thousand unamortized stock-based compensation expense related to RSUs.
 
As of December 29, 2024 the RSUs will be amortized during the next 34 months. A summary of the status of restricted stock units as of December 29, 2024 and December 24, 2023, and changes during the six months then ended is presented below:
 
   
Six Months Ended
    December 29, 2024   December 24, 2023
Unvested at beginning of year
   
269,063
     
885,688
 
Performance adjustment
   
34,351
     
(25,223
)
Granted
   
142,328
     
131,460
 
Issued
   
(198,414
)
   
(588,589
)
Forfeited
   
     
(101,461
)
Unvested at end of period
   
247,328
     
301,875
 
 
Note E - Earnings per Share (EPS)
 
The following table shows the reconciliation of the numerator and denominator of the basic EPS calculation to the numerator and denominator of the diluted EPS calculation (in thousands, except per share amounts):
 
   
Three Months Ended
   
Six Months Ended
 
   
December 29, 2024 
   
December 24, 2023 
   
December 29, 2024 
   
December 24, 2023 
 
Net income available to common shareholders
 
$
607
   
$
553
   
$
1,133
   
$
939
 
                                 
BASIC:
                               
Weighted average common shares
   
14,690
     
14,444
     
14,638
     
14,299
 
                                 
Net income per common share
 
$
0.04
   
$
0.04
   
$
0.08
   
$
0.07
 
                                 
DILUTED:
                               
Weighted average common shares
   
14,690
     
14,444
     
14,638
     
14,299
 
Dilutive stock options and restricted stock units
   
26
     
21
     
22
     
20
 
Weighted average common shares outstanding
   
14,716
     
14,465
     
14,660
     
14,319
 
                                 
Net income per common share
 
$
0.04
   
$
0.04
   
$
0.08
   
$
0.07
 
 
12

For the three and six months ended December 29, 2024, exercisable options to purchase 74,286 shares of common stock at exercise prices from $3.95 to $13.11 were excluded from the computation of diluted EPS because they had an intrinsic value of zero. For the three and six months ended December 29, 2024, 142,328 and 247,328 RSUs were excluded from the computation of diluted EPS because performance criteria is not probable at period end, respectively.
 
For the three and six months ended December 24, 2023, exercisable options to purchase 103,086 shares of common stock at exercise prices from $3.95 to $13.11 were excluded from the computation of diluted EPS because they had an intrinsic value of zero. For the three and six months ended December 24, 2023, zero and 90,625 RSUs were excluded from the computation of diluted EPS because performance criteria is not probable at period end, respectively.
 
Note F - Income Taxes
 
Total income tax expense consists of the following (in thousands):
   
Three Months Ended
 
Six Months Ended
   
December 29, 2024
 
December 24, 2023
 
December 29, 2024
 
December 24, 2023
Federal tax expense (benefit)
 
$
121
   
$
(23
)
 
$
264
   
$
85
 
State tax expense
   
23
     
10
     
49
     
34
 
Total income tax expense (benefit)
 
$
144
   
$
(13
)
 
$
313
   
$
119
 
 
The Company continually reviews the realizability of its deferred tax assets, including an analysis of factors such as future taxable income, reversal of existing taxable temporary differences, and tax planning strategies. In assessing the need for the valuation allowance, the Company considers both positive and negative evidence related to the likelihood of realization of deferred tax assets.
 
Note G - Segment Reporting
 
The Company has three reportable operating segments as determined by management using the “management approach” as defined by ASC 280 Disclosures about Segments of an Enterprise and Related Information: (1) Pizza Inn Franchising, (2) Pie Five Franchising and (3) Corporate administration and other. These segments are a result of differences in the nature of the products and services sold. Corporate administration costs, which include, but are not limited to, general accounting, human resources, legal and credit and collections, are partially allocated to the three operating segments.
 
The Pizza Inn and Pie Five Franchising segments establish franchisees, licensees and territorial rights. Revenue for these segments are derived from franchise royalties, franchise fees, sale of area development and foreign master license rights and incentive payments from third-party suppliers and distributors. Assets for these segments include equipment, furniture and fixtures.
 
Corporate administration and other assets primarily include cash and short-term investments, as well as furniture and fixtures located at the corporate office and trademarks and other intangible assets. All assets are located within the United States.
 
Summarized in the following tables are net operating revenues, depreciation and amortization expense, and income before taxes for the Company’s reportable segments as of the three and six months ended December 29, 2024 and December 24, 2023 (in thousands):
 
   
Three Months Ended
 
Six Months Ended
   
December 29, 2024
 
December 24, 2023
 
December 29, 2024
 
December 24, 2023
Net sales and operating revenues:
                       
Pizza Inn Franchising
 
$
2,541
   
$
2,271
   
$
5,261
   
$
4,875
 
Pie Five Franchising
   
305
     
437
     
612
     
873
 
Corporate administration and other
   
23
     
38
     
46
     
85
 
Consolidated revenues
 
$
2,869
   
$
2,746
   
$
5,919
   
$
5,833
 
                                 
Depreciation and amortization:
                               
Corporate administration and other
 
$
53
   
$
57
   
$
96
   
$
112
 
Depreciation and amortization
 
$
53
   
$
57
   
$
96
   
$
112
 
                                 
Income before taxes:
                               
Pizza Inn Franchising
 
$
1,817
   
$
1,602
   
$
3,648
   
$
3,263
 
Pie Five Franchising
   
200
     
260
     
401
     
469
 
Combined
   
2,017
     
1,862
     
4,049
     
3,732
 
Corporate administration and other
   
(1,266
)
   
(1,322
)
   
(2,603
)
   
(2,674
)
Income before taxes
 
$
751
   
$
540
   
$
1,446
   
$
1,058
 
                                 
Geographic information (revenues):
                               
United States
 
$
2,798
   
$
2,701
   
$
5,785
   
$
5,735
 
Foreign countries
   
71
     
45
     
134
     
98
 
Consolidated revenues
 
$
2,869
   
$
2,746
   
$
5,919
   
$
5,833
 
 
 
13

 
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the consolidated financial statements and accompanying notes appearing elsewhere in this Quarterly Report on Form 10-Q, our Annual Report on Form 10-K for the year ended June 30, 2024, together with our Quarterly Report on Form 10-Q for the period ended September 29, 2024, may contain certain forward-looking statements that are based on current management expectations. Generally, verbs in the future tense and the words “believe,” “expect,” “anticipate,” “estimate,” “intends,” “opinion,” “potential” and similar expressions identify forward-looking statements. Forward-looking statements in this report include, without limitation, statements relating to our business objectives, our customers and franchisees, our liquidity and capital resources, and the impact of our historical and potential business strategies on our business, financial condition, and operating results. Our actual results could differ materially from our expectations. Further information concerning our business, including additional factors that could cause actual results to differ materially from the forward-looking statements contained in this Quarterly Report on Form 10-Q, are set forth in our Annual Report on Form 10-K for the year ended June 30, 2024, as well as our Quarterly Report on Form 10-Q for the period ended September 29, 2024. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. The forward-looking statements contained herein speak only as of the date of this Quarterly Report on Form 10-Q and, except as may be required by applicable law, we do not undertake, and specifically disclaim any obligation to, publicly update or revise such statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

Results of Operations
Overview

Rave Restaurant Group, Inc., through its subsidiaries (collectively, the “Company” or “we,” “us” or “our”), franchises pizza buffet (“Buffet Units”), delivery/carry-out (“Delco Units”), express restaurants (“Express Units”) and ghost kitchens (“Pizza Inn Ghost Kitchen Units”) under the trademark “Pizza Inn” and franchises fast casual pizza restaurants (“Pie Five Units”) and ghost kitchens (“Pie Five Ghost Kitchen Units”) under the trademarks “Pie Five Pizza Company” or “Pie Five”. The Company also licenses Pizza Inn Express, or PIE, kiosks (“PIE Units”) under the trademark “Pizza Inn”. We facilitate food, equipment and supply distribution to our domestic and international system of restaurants through agreements with third-party distributors. At December 29, 2024, franchised and licensed units consisted of the following:

Three Months Ended December 29, 2024
(in thousands, except unit data)

   
Pizza Inn
 
Pie Five
 
All Concepts
   
Ending
Units
 
Retail
Sales
 
Ending
Units
 
Retail
Sales
 
Ending
Units
 
Retail
Sales
Domestic Franchised/Licensed
   
102
   
$
25,855
     
20
   
$
2,711
     
122
   
$
28,566
 
                                                 
International Franchised
   
27
   
$
1,893
     
   
$
     
27
   
$
1,893
 

Six Months Ended December 29, 2024
(in thousands, except unit data)

   
Pizza Inn
 
Pie Five
 
All Concepts
   
Ending
Units
 
Retail
Sales
   
Ending
Units
 
Retail
Sales
 
Ending
Units
 
Retail
Sales
Domestic Franchised/Licensed
   
102
   
$
51,225
     
20
   
$
5,689
     
122
   
$
56,914
 
                                                 
International Franchised
   
27
   
$
3,667
     
   
$
     
27
   
$
3,667
 

The domestic units were located in 15 states predominantly situated in the southern half of the United States. The international units were located in eight foreign countries.
 
14


Non-GAAP Financial Measures and Other Terms

The Company’s financial statements are prepared in accordance with United States generally accepted accounting principles (“GAAP”). However, the Company also presents and discusses certain non-GAAP financial measures that it believes are useful to investors as measures of operating performance. Management may also use such non-GAAP financial measures in evaluating the effectiveness of business strategies and for planning and budgeting purposes. However, these non-GAAP financial measures should not be viewed as an alternative or substitute for the results reflected in the Company’s GAAP financial statements.

We consider EBITDA and Adjusted EBITDA to be important supplemental measures of operating performance that are commonly used by securities analysts, investors and other parties interested in our industry. We believe that EBITDA is helpful to investors in evaluating our results of operations without the impact of expenses affected by financing methods, accounting methods and the tax environment. We believe that Adjusted EBITDA provides additional useful information to investors by excluding non-operational or non-recurring expenses to provide a measure of operating performance that is more comparable from period to period. Management also uses these non-GAAP financial measures for evaluating operating performance, assessing the effectiveness of business strategies, projecting future capital needs, budgeting and other planning purposes.

The following key performance indicators presented herein, some of which represent non-GAAP financial measures, have these meanings and are calculated as follows:


“EBITDA” represents earnings before interest, taxes, depreciation and amortization.

“Adjusted EBITDA” represents earnings before interest, taxes, depreciation and amortization, stock-based compensation expense, severance, gain/loss on sale of assets, costs related to impairment and other lease charges, franchisee default and closed store revenue/expense, and closed and non-operating store costs.

“Retail sales” represents the restaurant sales reported by our franchisees, which may be segmented by brand or domestic/international locations.

“Comparable store retail sales” includes the retail sales for restaurants that have been open for at least 18 months as of the end of the reporting period. The sales results for a restaurant that was closed temporarily for remodeling or relocation within the same trade area are included in the calculation only for the days that the restaurant was open in both periods being compared.

“Average units open” reflects the number of restaurants open during a reporting period weighted by the percentage of the days in a reporting period that each restaurant was open.

“Non-operating store costs” represent gain or loss on asset disposal, store closure expenses, lease termination expenses and expenses related to abandoned store sites.

“Franchisee default and closed store revenue/expense” represents the net of accelerated revenues and costs attributable to defaulted area development agreements and closed franchised stores.

EBITDA and Adjusted EBITDA

Adjusted EBITDA for the fiscal quarter ended December 29, 2024 increased $0.3 million compared to the same period of the prior fiscal year. Year-to-date Adjusted EBITDA increased $0.4 million compared to the same period of the prior fiscal year. The following table sets forth a reconciliation of net income to EBITDA and Adjusted EBITDA for the periods shown (in thousands):

RAVE RESTAURANT GROUP, INC.
ADJUSTED EBITDA
(In thousands)

   
Three Months Ended
 
Six Months Ended
   
December 29,
2024
 
December 24,
2023
 
December 29,
2024
 
December 24,
2023
Net income
 
$
607
   
$
553
   
$
1,133
   
$
939
 
Interest income
   
(87
)
   
(46
)
   
(169
)
   
(48
)
Income taxes
   
144
     
(13
)
   
313
     
119
 
Depreciation and amortization
   
53
     
57
     
96
     
112
 
EBITDA
 
$
717
   
$
551
   
$
1,373
   
$
1,122
 
Stock-based compensation expense
   
53
     
3
     
126
     
82
 
Severance
   
5
     
     
5
     
 
Franchisee default and closed store revenue
   
32
     
(18
)
   
23
     
(82
)
Adjusted EBITDA
 
$
807
   
$
536
   
$
1,527
   
$
1,122
 
 
15

 
Pizza Inn Brand Summary

The following tables summarize certain key indicators for the Pizza Inn franchised and licensed domestic units that management believes are useful in evaluating performance:

   
Three Months Ended
 
Six Months Ended
   
December 29,
2024
 
December 24,
2023
 
December 29,
2024
 
December 24,
2023
Pizza Inn Retail Sales - Total Domestic Units
 
(in thousands, except unit data)
   
(in thousands, except unit data)
 
                         
Buffet Units - Franchised
 
$
25,030
   
$
24,558
   
$
49,529
   
$
49,569
 
Delco/Express Units - Franchised
   
820
     
968
     
1,679
     
1,967
 
PIE Units - Licensed
   
4
     
17
     
14
     
37
 
Pizza Inn Ghost Kitchen Units - Franchised
   
1
     
     
3
     
 
Total Domestic Retail Sales
 
$
25,855
   
$
25,543
   
$
51,225
   
$
51,573
 
                                 
Pizza Inn Comparable Store Retail Sales - Total Domestic
 
$
24,752
   
$
24,565
   
$
48,756
   
$
49,089
 
                                 
Pizza Inn Average Units Open in Period
                               
                                 
Buffet Units - Franchised
   
78
     
75
     
78
     
77
 
Delco/Express Units - Franchised
   
23
     
32
     
23
     
36
 
PIE Units - Licensed
   
1
     
4
     
1
     
5
 
Pizza Inn Ghost Kitchen Units - Franchised
   
1
     
     
1
     
 
Total Domestic Units
   
103
     
111
     
103
     
118
 

Pizza Inn total domestic retail sales increased by $0.3 million, or 1.2%, for the three months ended December 29, 2024 when compared to the same period of the prior year. Compared to the same fiscal quarter of the prior year, average Buffet Units open in the period increased from 75 to 78. Comparable store retail sales increased by $0.2 million, or 0.8%, for the three month period ended December 29, 2024 as compared to the same period of the prior fiscal year. For the three months ended December 29, 2024, the increase in domestic retail sales were primarily the result of the increase in Buffet Units, supplemented by an increase in comparable domestic store retail sales.

Pizza Inn total domestic retail sales decreased by $0.3 million, or 0.7%, for the six months ended December 29, 2024 when compared to the same period of the prior year. Compared to the same fiscal period of the prior year, average Buffet Units open in the period increased from 77 to 78. Comparable store retail sales decreased by $0.3 million, or 0.7%, for the six month period ended December 29, 2024 as compared to the same period of the prior fiscal year. For the six months ended December 29, 2024, the decrease in domestic retail sales were primarily the result of the decrease in comparable domestic store retail sales, offset by an increase in Buffet Units.
 
16


The following chart summarizes Pizza Inn restaurant activity for the three and six months ended December 29, 2024:

   
Three Months Ended December 29, 2024
   
Beginning
Units
 
Opened
 
Concept
Change
 
Transfer
 
Closed
 
Ending
Units
                                     
Buffet Units - Franchised
   
77
     
1
     
     
3
     
1
     
77
 
Delco/Express Units - Franchised
   
23
     
     
     
     
     
23
 
PIE Units - Licensed
   
1
     
     
     
     
     
1
 
Pizza Inn Ghost Kitchen Units - Franchised
   
1
     
     
     
     
     
1
 
Total Domestic Units
   
102
     
1
     
     
3
     
1
     
102
 
                                                 
International Units (all types)
   
26
     
3
     
     
     
2
     
27
 
                                                 
Total Units
   
128
     
4
     
     
3
     
3
     
129
 


   
Six Months Ended December 29, 2024
   
Beginning
Units
 
Opened
 
Concept
Change
 
Transfer
 
Closed
 
Ending
Units
                                     
Buffet Units - Franchised
   
78
     
1
     
     
3
     
2
     
77
 
Delco/Express Units - Franchised
   
23
     
     
     
     
     
23
 
PIE Units - Licensed
   
3
     
     
     
     
2
     
1
 
Pizza Inn Ghost Kitchen Units - Franchised
   
1
     
     
     
     
     
1
 
Total Domestic Units
   
105
     
1
     
     
3
     
4
     
102
 
                                                 
International Units (all types)
   
24
     
5
     
     
     
2
     
27
 
                                                 
Total Units
   
129
     
6
     
     
3
     
6
     
129
 

There was a net decrease of zero and three units in the total domestic Pizza Inn unit count during the three and six months ended December 29, 2024, respectively. There were three unit transfers between franchisees in the total domestic Pizza Inn unit count during the three and six months ended December 29, 2024. For the three and six months ended December 29, 2024, the number of international Pizza Inn units increased by one and three units, respectively. There were zero transfers in the total international Pizza Inn unit count during the three and six months ended December 29, 2024. The Company believes the number of both domestic and international Pizza Inn units will increase modestly in future periods.

Pie Five Brand Summary

The following tables summarize certain key indicators for the Pie Five franchised restaurants that management believes are useful in evaluating performance:

   
Three Months Ended
 
Six Months Ended
   
December 29,
2024
 
December 24,
2023
 
December 29,
2024
 
December 24,
2023
Pie Five Retail Sales - Total Units
 
(in thousands, except unit data)
 
(in thousands, except unit data)
                         
Pie Five Units - Franchised
 
$
2,627
   
$
4,304
   
$
5,512
   
$
9,071
 
Pie Five Ghost Kitchen Units - Franchised
   
84
     
     
177
     
 
Total Domestic Retail Sales
 
$
2,711
   
$
4,304
   
$
5,689
   
$
9,071
 
                                 
Pie Five Comparable Store Retail Sales - Total
 
$
2,626
   
$
2,963
   
$
5,509
   
$
6,119
 
                                 
Pie Five Average Units Open in Period
                               
                                 
Pie Five Units - Franchised
   
18
     
25
     
18
     
26
 
Pie Five Ghost Kitchen Units - Franchised
   
2
     
     
2
     
 
Total Domestic Units
   
20
     
25
     
20
     
26
 
 
17


Pie Five total domestic retail sales decreased by $1.6 million, or 37.0%, for the three months ended December 29, 2024 when compared to the same period of the prior year. Compared to the same fiscal quarter of the prior year, average units open in the period decreased from 25 to 20. Comparable store retail sales decreased by $0.3 million, or 11.4%, for the three month period ended December 29, 2024 as compared to the same period of the prior fiscal year. For the three months ended December 29, 2024, the decrease in domestic retail sales were primarily the result of the decrease in store count, supplemented by a decrease in comparable store retail sales.

Pie Five total domestic retail sales decreased by $3.4 million, or 37.3%, for the six months ended December 29, 2024 when compared to the same period of the prior year. Compared to the same fiscal period of the prior year, average units open in the period decreased from 26 to 20. Comparable store retail sales decreased by $0.6 million, or 10.0%, for the six month period ended December 29, 2024 as compared to the same period of the prior fiscal year. For the six months ended December 29, 2024, the decrease in domestic retail sales were primarily the result of the decrease in store count, supplemented by a decrease in comparable store retail sales.

The following chart summarizes Pie Five restaurant activity for the three and six months ended December 29, 2024:

   
Three Months Ended December 29, 2024
   
Beginning
Units
 
Opened
 
Concept
Change
 
Transfer
 
Closed
 
Ending
Units
                                     
Pie Five Units - Franchised
   
18
     
     
     
     
     
18
 
Pie Five Ghost Kitchen Units - Franchised
   
2
     
     
     
     
     
2
 
Total Domestic Units
   
20
     
     
     
     
     
20
 


   
Six Months Ended December 29, 2024
   
Beginning
Units
 
Opened
 
Concept
Change
 
Transfer
 
Closed
 
Ending
Units
                                     
Pie Five Units - Franchised
   
18
     
     
     
     
     
18
 
Pie Five Ghost Kitchen Units - Franchised
   
2
     
     
     
     
     
2
 
Total Domestic Units
   
20
     
     
     
     
     
20
 

The Pie Five units remained stable during the three and six months ended December 29, 2024. There were zero transfers in the total domestic Pie Five unit count during the three and six months ended December 29, 2024. We believe that Pie Five units will decrease modestly in future periods.
 
18


Financial Results

In addition to Corporate overhead support, the Company defines its operating segments as Pizza Inn Franchising and Pie Five Franchising. The following is additional business segment information for the three and six months ended December 29, 2024 and December 24, 2023 (in thousands):

Three Months Ended December 29, 2024 and December 24, 2023

   
Pizza Inn
Franchising
 
Pie Five
Franchising
 
Corporate
 
Total
   
Fiscal Quarter Ended
 
Fiscal Quarter Ended
 
Fiscal Quarter Ended
 
Fiscal Quarter Ended
   
December 29,
2024
 
December 24,
2023
 
December 29,
2024
 
December 24,
2023
 
December 29,
2024
 
December 24,
2023
 
December 29,
2024
 
December 24,
2023
REVENUES:
                                               
Franchise and license revenues
 
$
2,541
   
$
2,271
   
$
300
   
$
430
   
$
   
$
   
$
2,841
   
$
2,701
 
Rental income
   
     
     
     
     
23
     
38
     
23
     
38
 
Other income
   
     
     
5
     
7
     
     
     
5
     
7
 
Total revenues
   
2,541
     
2,271
     
305
     
437
     
23
     
38
     
2,869
     
2,746
 
                                                                 
COSTS AND EXPENSES:
                                                               
General and administrative expenses
   
     
     
     
     
1,314
     
1,341
     
1,314
     
1,341
 
Franchise expenses
   
724
     
669
     
105
     
175
     
     
     
829
     
844
 
Provision for credit losses
   
     
     
     
     
9
     
10
     
9
     
10
 
Interest (income) expense
   
     
     
     
2
     
(87
)
   
(48
)
   
(87
)
   
(46
)
Depreciation and amortization expense
   
     
     
     
     
53
     
57
     
53
     
57
 
Total costs and expenses
   
724
     
669
     
105
     
177
     
1,289
     
1,360
     
2,118
     
2,206
 
                                                                 
INCOME/(LOSS) BEFORE TAXES
 
$
1,817
   
$
1,602
   
$
200
   
$
260
   
$
(1,266
)
 
$
(1,322
)
 
$
751
   
$
540
 
 
 
19

 
Six Months Ended December 29, 2024 and December 24, 2023

   
Pizza Inn
Franchising
 
Pie Five
Franchising
 
Corporate
 
Total
   
Fiscal Year-to-Date
 
Fiscal Year-to-Date
 
Fiscal Year-to-Date
 
Fiscal Year-to-Date
   
December 29,
2024
 
December 24,
2023
 
December 29,
2024
 
December 24,
2023
 
December 29,
2024
 
December 24,
2023
 
December 29,
2024
 
December 24,
2023
REVENUES:
                                               
Franchise and license revenues
 
$
5,261
   
$
4,875
   
$
606
   
$
865
   
$
   
$
   
$
5,867
   
$
5,740
 
Rental income
   
     
     
     
     
46
     
85
     
46
     
85
 
Other income
   
     
     
6
     
8
     
     
     
6
     
8
 
Total revenues
   
5,261
     
4,875
     
612
     
873
     
46
     
85
     
5,919
     
5,833
 
                                                                 
COSTS AND EXPENSES:
                                                               
General and administrative expenses
   
     
     
     
     
2,730
     
2,660
     
2,730
     
2,660
 
Franchise expenses
   
1,613
     
1,612
     
211
     
404
     
     
     
1,824
     
2,016
 
Provision (recovery) for credit losses
   
     
     
     
     
(8
)
   
35
     
(8
)
   
35
 
Interest income
   
     
     
     
     
(169
)
   
(48
)
   
(169
)
   
(48
)
Depreciation and amortization expense
   
     
     
     
     
96
     
112
     
96
     
112
 
Total costs and expenses
   
1,613
     
1,612
     
211
     
404
     
2,649
     
2,759
     
4,473
     
4,775
 
                                                                 
INCOME/(LOSS) BEFORE TAXES
 
$
3,648
   
$
3,263
   
$
401
   
$
469
   
$
(2,603
)
 
$
(2,674
)
 
$
1,446
   
$
1,058
 
 
20

 
Revenues:

Revenues are derived from franchise royalties, supplier and distributor incentive revenues, franchise license fees, area development exclusivity fees and foreign master license fees, advertising fund contributions, supplier convention funds, rental income, and other income. The volume of supplier and distributor incentive revenues is dependent on the level of total retail sales, which are impacted by changes in comparable store sales and restaurant count, as well as the products sold to franchisees through third-party food distributors.

Total revenues for the three month period ended December 29, 2024 and for the same period in the prior fiscal year were $2.9 million and $2.7 million, respectively.

Total revenues for the six month period ended December 29, 2024 and for the same period in the prior fiscal year were $5.9 million and $5.8 million, respectively.

Pizza Inn Franchise and License

Pizza Inn franchise revenues increased by $0.3 million to $2.5 million for the three month period ended December 29, 2024 as compared to the same period in the prior fiscal year. The 11.9% increase was driven by increases in supplier and distributor incentives. Pizza Inn franchise revenues increased by $0.4 million to $5.3 million for the six month period ended December 29, 2024 as compared to the same period in the prior fiscal year. The 7.9% increase was driven by increases in supplier and distributor incentives.

Pie Five Franchise and License

Pie Five franchise revenues decreased by $0.1 million to $0.3 million for the three month period ended December 29, 2024 as compared to the same period in the prior fiscal year. The 30.2% decrease was driven by decreases in domestic royalties. Pie Five franchise revenues decreased by $0.3 million to $0.6 million for the six month period ended December 29, 2024 as compared to the same period in the prior fiscal year. The 29.9% decrease was driven by decreases in domestic royalties.

Costs and Expenses:

General and Administrative Expenses

Total general and administrative expenses remained relatively stable at $1.3 million for the three month period ended December 29, 2024 as compared to the same period of the prior fiscal year. The 2.0% decrease was driven by decreases in legal fees, offset by increases in salaries. Total general and administrative expenses increased by $0.1 million to $2.7 million for the six month period ended December 29, 2024 as compared to the same period of the prior fiscal year. The 2.6% increase was driven by increases in salaries.

Franchise Expenses

Franchise expenses include general and administrative expenses directly related to the sale and continuing service of domestic and international franchises. Total franchise expenses remained relatively stable at $0.8 million for the three month period ended December 29, 2024 as compared to the same period of the prior fiscal year. The 1.8% decrease was driven by decreases in salaries, offset by increases in advertising fees. Total franchise expenses decreased by $0.2 million to $1.8 million for the six month period ended December 29, 2024 as compared to the same period of the prior fiscal year. The 9.5% decrease was driven by decreases in salaries and advertising fees.

Provision (Recovery) for Credit Losses

The Company monitors franchisee receivable balances and adjusts credit terms when necessary to minimize the Company’s exposure to high-risk accounts receivable. For the three month period ended December 29, 2024, provision for credit losses was $9 thousand compared to $10 thousand for the same period in the prior fiscal year. During the three month period ended December 29, 2024, the Company recorded a loss in provision for credit losses due to the write off of receivables. For the six month period ended December 29, 2024, recoveries for credit losses were $8 thousand compared to provision for credit losses of $35 thousand for the same period in the prior fiscal year. During the six month period ended December 29, 2024, the Company recorded a loss in provision for credit losses due to the write off of receivables, offset by a gain in provision for credit losses due to the recoveries of receivables that had been previously reserved.
 
21


Interest Expense and Income

Interest income increased by $41 thousand to $87 thousand for the three month period ended December 29, 2024 as compared to the same period in the prior fiscal year. The increase was primarily driven by interest received on U.S. Treasury bills. Interest income increased by $121 thousand to $169 thousand for the six month period ended December 29, 2024 as compared to the same period in the prior fiscal year. The increase was primarily driven by interest received on U.S. Treasury bills.

Amortization and Depreciation Expense

Amortization and depreciation expense decreased by $4 thousand to $53 thousand for the three month period ended December 29, 2024 as compared to the same period in the prior year. The decrease was primarily the result of lower depreciation of equipment. Amortization and depreciation expense decreased by $16 thousand to $96 thousand for the six month period ended December 29, 2024 as compared to the same period in the prior year. The decrease was primarily the result of lower depreciation of equipment.

Provision for Income Taxes

Total income tax expense consists of the following (in thousands):

   
Three Months Ended
 
Six Months Ended
   
December 29,
2024
 
December 24,
2023
 
December 29,
2024
 
December 24,
2023
Federal tax expense (benefit)
 
$
121
   
$
(23
)
 
$
264
   
$
85
 
State tax expense
   
23
     
10
     
49
     
34
 
Total income tax expense (benefit)
 
$
144
   
$
(13
)
 
$
313
   
$
119
 

For the three and six months ended December 29, 2024, the Company recorded an income tax expense of $144 thousand and $313 thousand, respectively. For the three and six months ended December 24, 2023, the Company recorded an income tax benefit of $13 thousand and a tax expense of $119 thousand, respectively. The increase for the three months ended as of December 29, 2024 was driven by a decrease in the number of RSUs vested compared to the comparable period of the prior fiscal year, which resulted in a lower tax benefit from stock-based compensation. The increase for the six months ended as of December 29, 2024 was primarily driven by a decrease in the number of RSUs vested compared to the comparable period of the prior fiscal year, which resulted in a lower tax benefit from stock-based compensation.

The Company continually reviews the realizability of its deferred tax assets, including an analysis of factors such as future taxable income, reversal of existing taxable temporary differences, and tax planning strategies. In assessing the need for a valuation allowance, the Company considers both positive and negative evidence related to the likelihood of realization of deferred tax assets.

Basic net income per share remained relatively stable at $0.04 per share for the three months ended December 29, 2024, compared to the comparable period in the prior fiscal year. The Company had net income of $0.6 million for the three months ended December 29, 2024 compared to net income of $0.6 million in the comparable period in the prior fiscal year, on revenues of $2.9 million for the three months ended December 29, 2024 compared to $2.8 million in the comparable period in the prior fiscal year.

Basic net income per share increased $0.01 per share to $0.08 per share for the six months ended December 29, 2024, compared to the comparable period in the prior fiscal year. The Company had net income of $1.1 million for the six months ended December 29, 2024 compared to net income of $0.9 million in the comparable period in the prior fiscal year, on revenues of $5.9 million for the six months ended December 29, 2024 compared to $5.8 million in the comparable period in the prior fiscal year.

Liquidity and Capital Resources

During the six month period ended December 29, 2024, the Company's primary source of liquidity was proceeds from operating activities.

Cash flows from operating activities generally reflect net income adjusted for certain non-cash items including depreciation and amortization, changes in deferred taxes, stock-based compensation, and changes in working capital. Cash provided by operating activities was $1.2 million for the six month period ended December 29, 2024 compared to cash provided by operating activities of $0.3 million for the six month period ended December 24, 2023. The primary driver of increased operating cash flow during the six month period ended December 29, 2024 was increased collections of accounts receivable related to the payment of franchise receivables.
 
22


Cash flows from investing activities reflect purchases and maturities of short-term investments as well as net proceeds from the sale of assets and capital expenditures for the purchase of Company assets. Cash used in investing activities during the six month period ended December 29, 2024 was $1.0 million compared to cash used in investing activities of $16 thousand for the six months ended December 24, 2023. Net cash used by investing activities during the six month period ended December 29, 2024 was primarily attributable to increased purchases of U.S. Treasury bills.

Cash flows used in financing activities generally reflect changes in the Company's stock and debt activity during the period. Net cash used in financing activities was $0.2 million for the six month period ended December 29, 2024 compared to net cash used in financing activities of $0.3 million for the six month period ended December 24, 2023. Net cash used by financing activities for the six months ended December 29, 2024 was primarily attributable to taxes paid on vested RSUs. Net cash used by financing activities for the six months ended December 24, 2023 was primarily attributable to taxes paid on vested RSUs.

Management believes the cash on hand combined with net cash provided by operations will be sufficient to fund operations for the next 12 months and beyond.

Employee Retention Credit

On December 27, 2020, the Consolidated Appropriations Act of 2021 (the “CAA”) was signed into law. The CAA expanded eligibility for an employee retention credit for companies impacted by the COVID-19 pandemic with fewer than five hundred employees and at least a twenty percent decline in gross receipts compared to the same quarter in 2019, to encourage retention of employees. This payroll tax credit was a refundable tax credit against certain federal employment taxes. For the fiscal year ended June 26, 2022, the Company recorded $0.7 million of other income for the employee retention credit. As of December 29, 2024, $0.6 million has been received and $0.1 million is still outstanding and included within accounts receivable on the accompanying Condensed Consolidated Balance Sheets.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect our reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingent liabilities. The Company bases its estimates on historical experience and various other assumptions that it believes are reasonable under the circumstances. Estimates and assumptions are reviewed periodically. Actual results could differ materially from estimates.

The Company believes the following critical accounting policies require estimates about the effect of matters that are inherently uncertain, are susceptible to change, and therefore require subjective judgments. Changes in the estimates and judgments could significantly impact the Company’s results of operations and financial condition in future periods.

Accounts receivable consist primarily of receivables generated from franchise royalties and supplier concessions. The Company records an allowance for credit losses to allow for any amounts which may be unrecoverable based upon an analysis of the Company’s prior collection experience, customer creditworthiness and current economic trends. Actual realization of accounts receivable could differ materially from the Company’s estimates.

The Company reviews long-lived assets for impairment when events or circumstances indicate that the carrying value of such assets may not be fully recoverable. Impairment is evaluated based on the sum of undiscounted estimated future cash flows expected to result from use and eventual disposition of the assets compared to their carrying value. If impairment is indicated, the carrying value of an impaired asset is reduced to its fair value, based on discounted estimated future cash flows.

Franchise revenue consists of income from license fees, royalties, area development and foreign master license agreements, advertising fund revenues, supplier incentive and convention contribution revenues. Franchise fees, area development and foreign master license agreement fees are amortized into revenue on a straight-line basis over the term of the related contract agreement. In event of a closed franchise or defaulted development agreement, the remaining balance of unamortized license fees will be recognized in entirety as of the date of the closure or default. Royalties and advertising fund revenues, which are based on a percentage of franchise retail sales, are recognized as income as retail sales occur. Supplier incentive revenues are recognized as earned, typically as the underlying commodities are shipped.

The Company continually reviews the realizability of its deferred tax assets, including an analysis of factors such as future taxable income, reversal of existing taxable temporary differences, and tax planning strategies. The Company assesses whether a valuation allowance should be established against its deferred tax assets based on consideration of all available evidence, using a “more likely than not” standard. In assessing the need for the valuation allowance, the Company considers both positive and negative evidence related to the likelihood of realization of deferred tax assets. In making such assessment, more weight is given to evidence that can be objectively verified, including recent operating performance.
 
23

 
The Company accounts for uncertain tax positions in accordance with ASC 740-10, which prescribes a comprehensive model for how a company should recognize, measure, present, and disclose in its financial statements uncertain tax positions that it has taken or expects to take on a tax return. ASC 740-10 requires that a company recognize in its financial statements the impact of tax positions that meet a “more likely than not” threshold, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. As of December 29, 2024 and December 24, 2023, the Company had no uncertain tax positions.

The Company assesses its exposures to loss contingencies from legal matters based upon factors such as the current status of the cases and consultations with external counsel and provides for the exposure by accruing an amount if it is judged to be probable and can be reasonably estimated. If the actual loss from a contingency differs from management’s estimate, operating results could be adversely impacted.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not required for a smaller reporting company.

Item 4. Controls and Procedures

The Company maintains disclosure controls and procedures designed to ensure that information it is required to disclose in the reports filed or submitted under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. The Company’s disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports filed or submitted under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

The Company’s management, including the Company’s principal executive officer and principal financial officer, or persons performing similar functions, have evaluated the Company’s disclosure controls and procedures as of the end of the period covered by this report. Based on such evaluation, the Company’s principal executive officer and principal financial officer, or persons performing similar functions, have concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report. During the most recent fiscal quarter, there have been no changes in the Company’s internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
 
24


PART II. OTHER INFORMATION

Item 1. Legal Proceedings

The Company is subject to various claims and contingencies related to employment agreements, franchise disputes, lawsuits, taxes, food product purchase contracts and other matters arising out of the normal course of business. Management believes that any such claims and actions currently pending are either covered by insurance or would not have a material adverse effect on the Company’s annual results of operations or financial condition if decided in a manner that is unfavorable to the Company.

Item 1A. Risk Factors

Not required for a smaller reporting company.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable.

Item 3. Defaults upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

During the three and six months ended December 29, 2024, no director or officer adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement, as each term is defined in Item 408(a) of Regulation S-K.
 
25


Item 6. Exhibits


1.
The financial statements filed as part of this report are listed in the Index to Consolidated Financial Statements and Supplementary Data appearing on page F-1 of this report on Form 10-K.


2.
Any financial statement schedule filed as part of this report is listed in the Index to Consolidated Financial Statements and Supplementary Data appearing on page F-1 of this report on Form 10-K.


3.
Exhibits:
 
 
   
Amended and Restated Articles of Incorporation of Rave Restaurant Group, Inc. (incorporated by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed January 8, 2015).
 
 
Amended and Restated Bylaws of Rave Restaurant Group, Inc. (incorporated by reference to Exhibit 3.2 to the registrant’s Current Report on Form 8-K filed January 8, 2015).
 
 
2015 Long Term Incentive Plan of the Company (filed as Exhibit 10.1 to Form 8-K filed November 20, 2014 and incorporated herein by reference).*
 
 
Form of Stock Option Grant Agreement under the Company’s 2015 Long Term Incentive Plan (filed as Exhibit 10.2 to Form 8-K filed November 20, 2014 and incorporated herein by reference).*
 
 
Form of Restricted Stock Unit Award Agreement under the Company’s 2015 Long-Term Incentive Plan (filed as Exhibit 10.3 to Form 10-K/A filed on September 30, 2019 and incorporated herein by reference).*
 
 
Lease Agreement dated November 1, 2016, between A&H Properties Partnership and Rave Restaurant Group, Inc. (filed as Exhibit 10.4 to Form 10-K for the year ended June 30, 2019 and incorporated herein by reference).*
 
 
First Amendment to Lease and Expansion dated July 1, 2017, between A&H Properties Partnership and Rave Restaurant Group, Inc. (filed as Exhibit 10.5 to Form 10-K for the year ended June 30, 2019 and incorporated herein by reference).*
 
 
Second Amendment to Lease Agreement effective June 1, 2020, between A&H Properties Partnership and Rave Restaurant Group, Inc. (filed as Exhibit 10.6 to Form 10-K for the fiscal year ended June 27, 2021 and incorporated herein by reference).
 
 
Letter agreement dated October 18, 2019, between Rave Restaurant Group, Inc. and Brandon Solano (filed as Exhibit 10.1 to Form 8-K filed October 21, 2019 and incorporated herein by reference).*
 
 
Letter agreement dated March 25, 2024, between Rave Restaurant Group, Inc. and Jay Rooney (filed as Exhibit 10.1 to Form 8-K filed March 26, 2024 and incorporated herein by reference).*
 
 
Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer.
 
 
Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer.
 
 
Section 1350 Certification of Principal Executive Officer.
 
 
Section 1350 Certification of Principal Financial Officer.
 
 
101
Interactive data files pursuant to Rule 405 of Regulation S-T.
 
 
104
Cover Page Interactive Data File (formatted as Inline XBRL).
 
*Management contract or compensatory plan or agreement.
 
26

 
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 
RAVE RESTAURANT GROUP, INC.
 
 
(Registrant)
 
       
 
By:
/s/ Brandon L. Solano
 
   
Brandon L. Solano
 
   
Chief Executive Officer
 
   
(principal executive officer)
 
       
 
By:
/s/ Jay D. Rooney
 
   
Jay D. Rooney
 
   
Chief Financial Officer
 
   
(principal financial officer)
 
       
Dated: February 6, 2025
     

 
 
27

 
 
 
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