UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: November 4, 2019

For the quarterly period ended: August 12, 2019

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to ________

For the transition period from _______ to ________

Commission File Number: 0-6054

STAR BUFFET, INC.

(Exact name of registrant as specified in its charter)

DELAWARE	84-1430786
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification Number)

2501 N. Hayden Road, Suite 103

Scottsdale, AZ 85257

(Address of principal executive offices) (Zip Code)

(480) 425-0454

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock $0.001 par value	STRZ	OTC

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 ~~[X]~~☒ No ☐

Indicate by check mark whether the registrant has submitted 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 ~~[X]~~☒ 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 definition of “accelerated filer”, “large 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 ~~[X]~~☒ 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 7(a)(2)(B) of the Securities Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ~~[X]~~☒

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ~~[X]~~☒ No ☐

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. As of ~~September~~December 1911, 2019, there were 3,213,075 shares of Common Stock, $ .001 par value, outstanding.

STAR BUFFET, INC. AND SUBSIDIARIES

INDEX

Page

	Page
PART I. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements:

Unaudited Condensed Consolidated Balance Sheets as of November 4, 2019 and January 28, 2019	2

Unaudited Condensed Consolidated Statements of Operations for the 12 and 40 weeks ended November 4, 2019 and November 5, 2018	3

Unaudited Condensed Consolidated Statements of Stockholders’ Equity for the 12 and 40 weeks ended November 4, 2019 and November 5, 2018	4

Unaudited Condensed Consolidated Statements of Cash Flows for the 40 weeks ended November 4, 2019 and November 5, 2018	5

Notes to Unaudited Condensed Consolidated Financial Statements	6

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	13

Item 3. Quantitative and Qualitative Disclosures about Market Risk	20

Item 4. Controls and Procedures	20

PART II. OTHER INFORMATION

Item 1. Legal Proceedings	22

Item 1A. Risk Factors	22

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	22

Item 3. Defaults Of Senior Securities	22

Item 4. Mine Safety Disclosures	22

Item 5. Other Information	22

Item 6. Exhibits	22

Signatures	24

PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements:
Unaudited Condensed Consolidated Balance Sheets as of August 12, 2019 and 1/28/2019	2
Unaudited Condensed Consolidated Statements of Operations for the 28 weeks ended August 12, 2019 and August 13, 2018	3
Unaudited Condensed Consolidated Statements of Stockholders’ Equity for the 12 and 28 weeks ended August 12, 2019 and August 13, 2018	4
Unaudited Condensed Consolidated Statements of Cash Flows for the 28 weeks ended August 12, 2019 and August 13, 2018	5
Notes to Unaudited Condensed Consolidated Financial Statements	6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3. Quantitative and Qualitative Disclosures about Market Risk	21
Item 4. Controls and Procedures	21
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	22
Item 1A. Risk Factors	22
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	22
Item 3. Defaults Of Senior Securities	22
Item 4. Mine Safety Disclosures	22
Item 5. Other Information	22
Item 6. Exhibits	22
Signatures	24

PART I: FINANCIAL INFORMATION

Item 1: Condensed Consolidated Financial Statements

STAR BUFFET, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	August 12, 2019			January 28, 2019
	November 4, 2019			January 28, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	~~121~~95,000		$	163,000
Receivables, net		~~168~~126,000			172,000
Inventories		~~213~~212,000			254,000
Prepaid expenses		~~112~~172,000			37,000
Total current assets		~~614~~605,000			626,000
Property, buildings and equipment, net		5,~~351~~339,000			5,560,000
Right-to-use lease assets		14,~~011~~064,000			—
Other assets, net		195,000			205,000
Intangible assets, net		35,000			34,000
Total assets	$	20,~~206~~238,000		$	6,425,000
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable-trade	$	1,~~233~~300,000		$	1,014,000
Checks written in excess of bank balance		7137,000			—
Payroll and related taxes		1,~~798~~806,000			1,767,000
Sales and property taxes		~~489~~411,000			593,000
Rent, licenses and other		1,~~162~~555,000			1,045,000
Income tax payable		3626,000			35,000
Current maturities of lease liabilities		~~609~~688,000			—
Current maturities of obligations under long-term debt		~~348~~308,000			570,000
Total current liabilities		56,~~746~~131,000			5,024,000
Deferred Rent Payable		—			386,000
Deferred rent payable		—			386,000
Lease liabilities, net of current maturities		14,~~344~~433,000			—
Other long-term liabilities		~~233~~181,000			308,000
Note payable to officer		1,992,000			1,992,000
Long-term debt, net of current maturities		2,~~268~~212,000			2,168,000
Total liabilities		24,~~583~~949,000			9,878,000
Stockholders’ equity:
Preferred stock, $.001 par value; authorized 1,500,000 shares; none issued or outstanding		—			—
Common stock, $.001 par value; authorized 8,000,000 shares; issued and outstanding 3,213,075 and 3,213,075 shares		3,000			3,000
Additional paid-in capital		17,743,000			17,743,000
Accumulated deficit		(22,~~123~~457,000	)		(21,199,000	)
Total stockholders’ equity		(4,~~377~~711,000	)		(3,453,000	)
Total liabilities and stockholders’ equity	$	20,~~206~~238,000		$	6,425,000

The accompanying notes are an integral part of the condensed consolidated financial statements.

STAR BUFFET, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Twelve Weeks Ended						~~Twenty-eight~~Forty Weeks Ended
	August 12,			August 13,			August 12,			August 13,
	November 4,			November 5,			November 4,			November 5,
	2019			2018			2019			2018
Total revenues	$	65,~~725~~305,000		$	75,~~251~~992,000		$	1419,~~084~~389,000		$	1420,~~846~~838,000
Costs, expenses and other
Food costs		21,~~044~~671,000			21,~~259~~953,000			46,~~483~~154,000			46,~~767~~720,000
Labor costs		2,~~605~~276,000			2,~~692~~396,000			57,~~674~~950,000			58,~~631~~027,000
Occupancy and other expenses		1,~~278~~120,000			1,~~355~~296,000			23,~~861~~981,000			24,~~971~~267,000
General and administrative expenses		~~295~~326,000			~~320~~279,000			~~880~~1,206,000			~~668~~947,000
Depreciation and amortization		164,000			~~133~~135,000			~~384~~548,000			~~316~~451,000
Total costs, expenses and other		65,~~386~~557,000			6,~~759~~059,000			1419,~~282~~839,000			1420,~~353~~412,000
Income from operations		339,000			492,000			(198,000	)		493,000
Income (loss) from operations		(252,000	)		(67,000	)		(450,000	)		426,000
Interest expense		~~105~~111,000			~~115~~116,000			~~249~~360,000			~~267~~383,000
Other income		1319,000			2221,000			3958,000			4970,000
Income before income taxes		247,000			399,000			(408,000	)		275,000
Income (loss) before income taxes		(344,000	)		(162,000	)		(752,000	)		113,000
Income tax provision		(10,000	)		(10,000	)		(15,000	)		(20,000	)
Income tax provision (benefit)		(10,000	)		10,000			5,000			30,000
Net income	$	237,000		$	389,000		$	(423,000	)	$	255,000
Net income (loss)	$	(334,000	)	$	(172,000	)	$	(757,000	)	$	83,000
Net income per common share – basic and diluted	$	(0.0710	)	$	(0.1205	)	$	(0.1324	)	$	0.0803
Weighted average shares outstanding – basic and diluted		3,213,075			3,213,075			3,213,075			3,213,075

The accompanying notes are an integral part of the condensed consolidated financial statements.

STAR BUFFET, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited)

Twelve Weeks Ended August 12, 2019

	Twelve Weeks Ended November 4, 2019
	Common Stock				Additional Paid-In		Accumulated			Total Stockholders'
	Shares		Amount		Capital		Deficit			Equity
Balance at August 12, 2019		3,213,000	$	3,000	$	17,743,000	$	(22,123,000	)	$	(4,377,000	)
Net loss		—		—		—		(334,000	)		(334,000	)
Balance at November 4, 2019		3,213,000	$	3,000	$	17,743,000	$	(22,457,000	)	$	(4,711,000	)

					Additional					Total
	Forty Weeks Ended November 4, 2019
	Common Stock				Additional Paid-In		Accumulated			Total Stockholders'
	Shares		Amount		Capital		Deficit			Equity
Balance at May 20, 2019		3,213,000	$	3,000	$	17,743,000	$	(22,360,000	)	$	(4,614,000	)
Balance at January 28, 2019		3,213,000	$	3,000	$	17,743,000	$	(21,199,000	)	$	(3,453,000	)
Net income		—		—		—		237,000			237,000
Adoption of new lease accounting		—		—		—		(501,000	)		(501,000	)
Balance at August 12, 2019		3,213,000	$	3,000	$	17,743,000	$	(22,123,000	)	$	(4,377,000	)
Net loss		—		—		—		(757,000	)		(757,000	)
Balance at November 4, 2019		3,213,000	$	3,000	$	17,743,000	$	(22,457,000	)	$	(4,711,000	)

Twenty-eight Weeks Ended August 12, 2019

	Twelve Weeks Ended November 5, 2018
	Common Stock				Additional Paid-In		Accumulated			Total Stockholders'
	Shares		Amount		Capital		Deficit			Equity
Balance at August 13, 2018		3,213,000	$	3,000	$	17,743,000	$	(20,403,000	)	$	(2,657,000	)
Net loss		—		—		—		(172,000	)		(172,000	)
Balance at November 5, 2018		3,213,000	$	3,000	$	17,743,000	$	(20,575,000	)	$	(2,829,000	)

					Additional					Total
	Forty Weeks Ended November 5, 2018
	Common Stock				Additional Paid-In		Accumulated			Total Stockholders'
	Shares		Amount		Capital		Deficit			Equity
Balance at January 28, 2019		3,213,000	$	3,000	$	17,743,000	$	(21,199,000	)	$	(3,453,000	)
Balance at January 29, 2018		3,213,000	$	3,000	$	17,743,000	$	(20,658,000	)	$	(2,912,000	)
Adoption of new lease accounting		—		—		—		(501,000	)		(501,000	)
Net income		—		—		—		83,000			83,000
Net loss		—		—		—		(423,000	)		(423,000	)
Balance at November 5, 2018		3,213,000	$	3,000	$	17,743,000	$	(20,575,000	)	$	(2,829,000	)
Balance at August 12, 2019		3,213,000	$	3,000	$	17,743,000	$	(22,123,000	)	$	(4,377,000	)

Twelve Weeks Ended August 13, 2018

					Additional					Total
	Common Stock				Paid-In		Accumulated			Stockholders'
	Shares		Amount		Capital		Deficit			Equity
Balance at May 21, 2018		3,213,000	$	3,000	$	17,743,000	$	(20,792,000	)	$	(3,046,000	)
Net income		—		—		—		389,000			389,000
Balance at August 13, 2018		3,213,000	$	3,000	$	17,743,000	$	(20,403,000	)	$	(2,657,000	)

Twenty-eight Weeks Ended August 13, 2018

					Additional					Total
	Common Stock				Paid-In		Accumulated			Stockholders'
	Shares		Amount		Capital		Deficit			Equity
Balance at January 29, 2018		3,213,000	$	3,000	$	17,743,000	$	(20,658,000	)	$	(2,912,000	)
Net income		—		—		—		255,000			255,000
Balance at August 13, 2018		3,213,000	$	3,000	$	17,743,000	$	(20,403,000	)	$	(2,657,000	)

The accompanying notes are an integral part of the condensed consolidated financial statements.

STAR BUFFET, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Twenty-eight Weeks Ended
	Forty Weeks Ended
	August 12, 2019			August 13, 2018
	November 4, 2019			November 5, 2018
Cash flows from operating activities:
Net (loss) income	$	(~~423~~757,000	)	$	~~255~~83,000
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation		~~384~~548,000			~~316~~451,000
Amortization of franchise, loan cost, licenses and other		34,000			34,000
Noncash lease expense		5680,000			-
Lease incentive		90,000			-
Change in operating assets and liabilities:
Receivables, net		446,000			~~(198~~29,000	)
Inventories		4143,000			1543,000
Prepaid expenses		(76135,000	)		(82121,000	)
Deposits and other		10,000			(39,000	)
Deferred rent payable		-			4258,000
Accounts payable-trade		~~218~~285,000			~~275~~277,000
Income taxes payable		1(9,000	)		(111,000	)
Other accrued liabilities		~~(31~~239,000	)		(79140,000	)
Net cash provided by operating activities		~~187~~444,000			~~533~~692,000
Cash flows from investing activities:
Acquisition of property, buildings and equipment		(~~175~~327,000	)		(~~198~~349,000	)
Net cash (used) in investing activities		(~~175~~327,000	)		(~~198~~349,000	)
Cash flows from financing activities:
Checks written in excess of bank balance		7137,000			(~~130~~74,000	)
Payments on long term debt		(~~125~~222,000	)		(~~196~~275,000	)
Net cash (used) in financing activities		(54185,000	)		(~~326~~349,000	)
Net change in cash and cash equivalents		(4268,000	)		9(6,000	)
Cash and cash equivalents at beginning of period		163,000			128,000
Cash and cash equivalents at end of period	$	~~121~~95,000		$	~~137~~122,000
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest	$	~~107~~158,000		$	~~128~~185,000
Income taxes	$	14,000		$	31,000

The accompanying notes are an integral part of the condensed consolidated financial statements.

Star Buffet, Inc.

Notes to the Condensed Consolidated Financial Statements

(unaudited)

Note 1 – Description of Business and Nature of Operations

Star Buffet, Inc., a Delaware corporation (the “Company,” “we” or “us”), is a multi-concept restaurant holding company. The Company was incorporated on July 28, 1997. At ~~August~~November 124, 2019, the Company operated 2623 full-service restaurants. During the first ~~two~~three quarters of fiscal year ending January 27, 2020 (“Fiscal 2020”), the Company also had ~~three~~four restaurants that were not in operation. One restaurant was leased to a third-party operator, ~~one was closed for remodeling~~ and ~~repositioning~~three ~~and~~were ~~one~~held ~~was~~for ~~used~~future ~~as a warehouse~~use. The Company’s restaurants operate under trade names owned by the Company and include 4B’s Restaurants®, BuddyFreddys®, Barnhill’s Salads Buffet Desserts®, and Casa Bonita®. The Company's restaurants are located in Arkansas, Arizona, Colorado, Florida, Idaho, Mississippi, Montana, New Mexico, Texas, and Utah. The Company has an executive office in Scottsdale, Arizona and management information systems in Salt Lake City, Utah.

Note 2 – Significant Accounting Policies

We have prepared the accompanying unaudited condensed consolidated financial statements in accordance with United States generally accepted accounting principles (“US GAAP”), the instructions to Form 10-Q and Article 10 of Regulation S-X. These financial statements should be read in conjunction with the audited consolidated financial statements, and the notes thereto, included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 28, 2019 (the “2019 Form 10-K”). The accounting policies used in preparing these condensed consolidated financial statements are the same as those described in the 2019 Form 10-K. The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. In the opinion of the Company’s management, all adjustments (consisting solely of normal recurring adjustments) considered necessary for a fair presentation of the interim financial statements have been included.

a) Principles of Consolidation

The condensed consolidated financial statements include the consolidated operations of the Company and its subsidiaries through ~~August~~November 124, 2019. The Company utilizes a 52/53 week fiscal year which ends on the last Monday in January. The first quarter of each fiscal year contains 2816 weeks while the other three quarters each contain 12 weeks, except the fourth quarter has 13 weeks if the fiscal year has 53 weeks. All significant intercompany balances and transactions have been eliminated in consolidation.

b) Earnings or Loss Per Common Share

Basic earnings or loss per common share is computed on the basis of the weighted average number of shares outstanding during the periods. Diluted earnings or loss per common share is calculated based on the weighted-average number of common shares outstanding during the period plus the effect of dilutive common stock equivalents, if any, outstanding during the period. Dilutive stock options are considered to be common stock equivalents and are included in the diluted calculation using the treasury stock method. The Company did not have any dilutive stock options as of ~~August~~November 124, 2019 or ~~August~~November 135, 2018.

c) Fair Value of Financial Instruments

The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:

●

Level 1 Inputs: Quoted prices for identical instruments in active markets.

●

Level 2 Inputs: Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.

●

Level 3 Inputs: Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

The carrying amounts of the Company’s cash and cash equivalents, receivables, accounts payable and accrued expenses approximate fair value because of the short maturity of these instruments. The carrying amounts of the Company’s notes receivable and long-term debt approximate fair value and are based on discounted cash flows using market rates at the balance sheet dates. The Company does not estimate the fair value of the note payable to its Chief Executive Officer because of the related party nature of the transaction.

d) Inventories

Inventories consist of food, beverages, gift shop items and certain restaurant supplies and are valued at the lower of cost or net realizable value, determined by the first-in, first-out method.

e) Impairment of Long-Lived Assets

The Company evaluates impairment of long-lived assets in accordance with ASC 360, “Property, Plant and Equipment”. The Company assesses whether an impairment write-down is necessary whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such asset is considered to be impaired, the impairment loss to be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Any impairment is recognized as a charge to earnings which would adversely affect operating results in the affected period.

Judgments made by the Company related to the expected useful lives of long-lived assets and the ability of the Company to realize undiscounted net cash flows in excess of the carrying amounts of such assets are affected by factors such as the ongoing maintenance and improvements of the assets, changes in economic conditions, and changes in operating performance. As the Company assesses the ongoing expected net cash flows and carrying amounts of its long-lived assets, these factors could cause the Company to realize a material impairment charge and could adversely affect operating results in any period. The Company recorded no impairment losses associated with ~~certain~~ restaurant facilities for the 2840 weeks ended ~~August~~November 124, 2019 and ~~August~~November 135, 2018.

f) Building and Equipment

Building and equipment are carried at cost less accumulated depreciation and amortization. Depreciation and amortization are provided using the straight-line method over the following useful lives:

⁽¹⁾

Leasehold improvements are amortized over the lesser of the life of the lease or the estimated economic life of the assets. The life of the lease includes renewal options determined by management at lease inception as reasonably likely to be exercised. If a previously scheduled lease option is not exercised, any remaining unamortized leasehold improvements would be required to be expensed immediately, which could result in a significant charge to operating results in that period.

Equipment in non-operating units or stored in warehouses, which is held for remodeling or repositioning, is depreciated and is recorded on the balance sheet as property, building and equipment held for future use.

Buildings and equipment placed on the market for sale is not depreciated and is recorded on the balance sheet as property held for sale and recorded at the lower of cost or market.

Repairs and maintenance are charged to operations as incurred. Major equipment refurbishments and remodeling costs are generally capitalized.

The Company's accounting policies regarding buildings and equipment include certain management judgments regarding the estimated useful lives of such assets and the residual values of such assets. These judgments and estimates may produce materially different amounts of depreciation and amortization expense than would be reported if different assumptions were used.

The components of property, buildings and equipment as of August 12, 2019 consist of 26 operating restaurant properties, one restaurant property that is leased to third party, one non-operating restaurant that remain closed for remodeling and repositioning and one non-operating property that is used as warehouse for equipment. The components of property, buildings and equipment as of January 28, 2019 consisted of 26 operating restaurant properties, one restaurant property that is leased to a third party, two non-operating restaurants that remain closed for remodeling and repositioning and one non-operating property that is used as warehouse for equipment. The Company recorded depreciation expense of $384,000 and $316,000 for the twenty-eight weeks ended August 12, 2019 and August 13, 2018, respectively. 7

	August 12, 2019						January 28, 2019
Property, building and equipment:			Accum.						Accum.
	Cost		Depr.		Net		Cost		Depr.		Net
Operating	$	12,006,000	$	7,794,000	$	4,212,000	$	11,760,000	$	7,360,000	$	4,400,000
Leased		1,174,000		789,000		385,000		1,174,000		778,000		396,000
Held for Future Use		2,066,000		1,312,000		754,000		2,066,000		1,302,000		764,000
Total	$	15,246,000	$	9,895,000	$	5,351,000	$	15,000,000	$	9,440,000	$	5,560,000

The components of property, buildings and equipment as of November 4, 2019 consist of 23 operating restaurant properties, one restaurant property that is leased to third party and three non-operating restaurants that were held for future use including one used as warehouse for equipment. The components of property, buildings and equipment as of January 28, 2019 consisted of 26 operating restaurant properties, one restaurant property that is leased to a third party, and three non-operating restaurants that were held for future use including one used as warehouse for equipment. The Company recorded depreciation expense of $548,000 and $451,000 for the forty weeks ended November 4, 2019 and November 5, 2018, respectively.

	November 4, 2019						January 28, 2019
Property, building and equipment:			Accum.						Accum.
	Cost		Depr.		Net		Cost		Depr.		Net
Operating	$	12,083,000	$	7,869,000	$	4,214,000	$	11,760,000	$	7,360,000	$	4,400,000
Leased to Third Party		1,174,000		796,000		378,000		1,174,000		778,000		396,000
Held for Future Use		2,066,000		1,319,000		747,000		2,066,000		1,302,000		764,000
Total	$	15,323,000	$	9,984,000	$	5,339,000	$	15,000,000	$	9,440,000	$	5,560,000

g) Other Assets

Other assets consist of security and utility deposits.

h) Intangible Assets

The Company’s intangible assets consist of trademarks as of ~~August~~November 124, 2019 and January 28, 2019. Trademark assets have an indefinite asset life.

i) Segment Reporting

All of the brands the Company operates are in the U.S. within the full-service restaurant industry and provide similar products to similar customers and, therefore, are considered to be one segment for reporting purposes. Sales to external customers are derived principally from food and beverage sales. We do not rely on any major customers as a source of sales.

j) Revenue Recognition

We recognize revenue, net of discounts and incentives, when payment is tendered at the point of sale. We report revenue net of sales-related taxes collected from customers and remitted to governmental taxing authorities. The Company defers all revenue on gift certificate sales until redeemed. The gift certificate liability is recorded in the Rent, licenses and other balance sheet account.

January 28, 2019

~~August~~November 124, 2019

Gift Certificate Liability

Gift Certificates Issued

Gift ~~Certificates~~Certificate s Redeemed

Gift Certificate Liability

Gift Certificates

14,100

715,~~500~~000

(1721,~~200~~000

)

48,~~400~~100

k) Income Taxes

Our current provision for income taxes is based on our estimated taxable income in each of the jurisdictions in which we operate, after considering the impact on our taxable income of temporary differences resulting from disparate treatment of items, such as depreciation, estimated liability for closed restaurants, estimated liabilities for self-insurance, tax credits and net operating losses (“NOL”) for tax and financial reporting purposes. Deferred income taxes are provided for the estimated future income tax effect of temporary differences between the financial and tax bases of assets and liabilities using the asset and liability method. Deferred tax assets are also provided for NOL and income tax credit carryforwards. A valuation allowance to reduce the carrying amount of deferred income tax assets is established when it is more likely than not that we will not realize some portion or all of the tax benefit of our deferred income tax assets. We evaluate, on a quarterly basis, whether it is more likely than not that our deferred income tax assets are realizable based upon recent past financial performance, tax reporting positions, and expectations of future taxable income. The determination of deferred tax assets is subject to estimates and assumptions. We periodically evaluate our deferred tax assets to determine if our assumptions and estimates should change. Currently, the Company has a full valuation allowance against its deferred tax asset, net of expected reversals of existing deferred tax liabilities.

l) ~~Recent~~Significant Accounting ~~Pronouncements~~Policies Update

In November 2018, the FASB issued Accounting Standards Update (“ASU”) 2018-18 – Collaborative Arrangements (Topic 808), which clarifies the interaction between Topic 808 and Topic 606, Revenue from Contracts with Customers. The provisions of ASU 2018-18 are effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The Company will be required to adopt this standard in the first quarter of fiscal year 2021. This standard is not expected to have a material impact on our consolidated financial statements and related disclosures.

Significant Accounting Policies Update

Adoption of ASC Topic 842: Leases

The Company adopted ASU 2016-02- Leases (Topic 842) and related amendments, as of January 2928, 2019, using the modified retrospective approach. The modified retrospective approach provides a method for recording existing leases at adoption with a cumulative adjustment to retained earnings. The Company elected the package of practical expedients which permits the Company to not reassess (1) whether any expired or existing contracts are or contain leases, (2) the lease classification for any expired or existing leases, and (3) any initial direct costs for any expired or existing leases as of the effective date. The Company also elected the practical expedient lease considerations to not allocate lease considerations between lease and non-lease components for real estate leases. As such, real estate lease considerations are treated as a single lease-component and accounted for accordingly.

The Company applied a portfolio approach to effectively account for the operating lease liabilities and operating lease assets; the Company does not have financing leases. The Company excludes leases with an initial term of 12 months or less from the application of Topic 842.

Adoption of the new standard resulted in the recording of operating lease assets and operating lease liabilities of $14.4 million and $15.3 million, respectively, on the Company’s consolidated balance sheet as of January 2928, 2019. The difference between the approximate value of the operating lease assets and liabilities is attributable to deferred rent, deferred rent incentives, leasehold interests and prepaid rent. The cumulative change in the beginning accumulated deficit was $(501,000) due to the adoption of Topic 842. There was no material impact on the Company’s consolidated statement of operations or consolidated statements cash flows. The Company’s comparative periods continue to be presented and disclosed in accordance with legacy guidance in Topic 840.

Operating Leases

The Company determines if an arrangement is a lease at inception. Lease agreements will typically exist with lease and non-lease components, which are generally accounted for separately. The Company recognizes operating lease liabilities equal to the present value of the lease payments and operating lease assets representing the right to use the underlying asset for the lease term. The lease expense for lease payments is recognized on a straight-line basis over the lease term.

~~The~~As the Company’s ~~recognizes~~leases ~~operating~~do ~~lease~~not ~~liabilities~~provide ~~equal~~an toimplicit rate, the ~~present~~Company ~~value~~used ofa ~~the~~secured ~~lease~~incremental ~~payments~~borrowing ~~and~~rate ~~operating~~based ~~lease~~on ~~assets representing~~ the ~~right~~information toavailable ~~use~~at ~~the~~lease ~~underlying~~commencement ~~asset~~in ~~for~~determining the present value of lease ~~term~~payments. The operating lease ~~expense~~assets ~~for~~include any lease payments ismade ~~recognized~~prior onto alease ~~straight-line~~commencement ~~basis~~and ~~over~~are ~~the~~reduced by any lease ~~term~~incentives.

As the Company’s leases do not provide an implicit rate, the Company will use a secured incremental borrowing rate based on the information available at lease commencement in determining the present value of lease payments. The operating lease assets include any lease payments made prior to lease commencement and are reduced by any lease incentives.

Under Topic 842, for any new leases entered into, the Company will assess if it is reasonably certain to exercise lease options to extend or terminate the lease for inclusion (or exclusion) in the lease term when the Company measures the lease liability. The depreciable life of any assets and leasehold improvements are limited by the expected lease term.

Certain of the Company’s operating leases include variable rental payments based on a percentage of sales over contractual levels. Variable rental payments are recognized in the consolidated statement of operations in the period in which the obligation for those payments is incurred. If such variable operating leases arise that include incentives from landlords in the form of cash, the Company will record the full amount of the incentive when specific performance criteria are met as a deferred liability. The deferred liability is amortized into income as a reduction of rent expense over the term of the applicable lease, including options to extend if they are reasonably certain to be exercised. The Company recognized those liabilities to be amortized within a year as a current liability and those greater than a year as a long-term liability. For purposes of recognizing these incentives and rental expenses on a straight-line basis, the Company uses the date it obtains the legal right to use and control the lease asset to begin amortization, which is generally when the Company takes possession of the asset. Please refer to Note 5 – Operating Leases in the Company’s Notes to Unaudited Condensed Consolidated Financial Statements for policies and disclosures related to leases.

Note 3 – Related Party Transactions

Robert E. Wheaton currently beneficially owns approximately 46.7% of our total equity securities and possesses approximately 46.7% of the total voting power. Thus, Mr. Wheaton has the ability to control or significantly influence all matters requiring the approval of our stockholders, including the election of nominees to our board of directors. During fiscal 2008, the Company borrowed approximately $1,400,000 from Mr. Wheaton. In June 2008, the Company borrowed an additional $592,000 from Mr. Wheaton under the same terms. This resulted in an increase in the note balance from $1,400,000 to $1,992,000, the balance as of ~~August~~November 124, 2019 and January 28, 2019. The principal balance and any unpaid interest were due and payable in full on June 5, 2012. The loan was subsequently modified as a result of the Company’s bankruptcy filing, and pursuant to plan of reorganization approved by the Bankruptcy Court on December 17, 2012 (the “Bankruptcy Plan”), the principal balance was not eligible to be repaid until all obligations owed to other creditors have been fully satisfied. Interest accrued on the principal amount of $1,992,000 and the interest of $197,000 from September 28, 2011 to December 7, 2016 at the Bankruptcy Plan rate. When the Bankruptcy Court entered into a Final Decree and Order Closing the Bankruptcy Case of Star Buffet, Inc. on December 7, 2016 the Company reverted back to the original interest rate of 8.5%. The Company expensed $~~105~~150,000 to Mr. Wheaton for interest during the first ~~two~~three quarters of Fiscal 2020 and the fiscal year ending January 28, 2019 (“Fiscal 2019”).

On November 9, 2016, the Company borrowed $450,000 from Mr. Robert E. Wheaton to remodel the 4B’ Restaurant in Missoula, Montana. The three-year ~~fully amortized~~ secured loan ~~has~~had monthly payments of $14,839 ~~and interest rate of 11~~.~~5%.~~ The Company paid Mr. Wheaton approximately $82154,000 and $81113,000 in principal during the first three quarters of Fiscal 2020 and Fiscal 2019, respectively, under this ~~mortgage~~secured loan. In addition, the Company paid approximately $710,000 and $1421,000 in interest during the first ~~two~~three quarters of Fiscal 2020 and Fiscal 2019, respectively. The ~~Company~~loan ~~owes~~was ~~Mr.~~paid ~~Wheaton~~in ~~$71,000~~full ~~and~~in ~~$156,000~~October ~~for principal as of August 12,~~ 2019 ~~and January 28, 2019, respectively~~.

The Company did not lease any new restaurants from Mr. Wheaton during Fiscal 2020 or Fiscal 2019. The Company paid to Mr. Wheaton $~~468~~661,000 and $~~451~~645,000 in rent during the first ~~two~~three quarters of Fiscal 2020 and Fiscal 2019, respectively. The Company owes Mr. Wheaton $~~737~~1,105,000 and $813,000 primarily for interest on the Note Payable to Officer as of ~~August~~November 124, 2019 and January 28, 2019, respectively, which is included in Rent, licenses and other on the accompanying balance sheet.

Note 4 - Long-Term Debt

The following table is a summary of the Company’s outstanding debt obligations.

	August 12, 2019		August 12, 2019		January 28, 2019		January 28, 2019
	November 4, 2019		November 4, 2019		January 28, 2019		January 28, 2019
Type of Debt (1)	Total Debt		Current Portion		Total Debt		Current Portion
Real Estate Mortgages	$	2,~~370~~278,000	$	~~332~~292,000	$	2,485,000	$	560,000
Other-Miscellaneous		~~246~~242,000		16,000		253,000		10,000
Note Payable to Officer		1,992,000		-		1,992,000		-
Total Debt	$	4,~~608~~512,000	$	~~348~~308,000	$	4,730,000	$	570,000

(1) The interest rates range from 6% to 118.5%. The maturity dates of the obligations range from November 2019 to October 2035.

Note 5 – Leases

As of November 4, 2019, the Company had certain operating leases on restaurant properties and office space. As of that same date, the Company had no financing leases. The operating leases had no material residual value guarantees or material restrictive covenants. Certain of the Company’s operating leases include variable rental payments based on a percentage of retail sales over contractual levels.

Certain of the operating leases include one or more options to renew, with renewal terms that can extend the lease term from two to sixteen years from the commencement of the original agreement. The exercise of lease renewal options is at the Company’s sole discretion. As of November 4, 2019, the Company did include options to renew in the operating lease assets and liabilities if it is reasonably certain to exercise lease options.

Note 5 – Operating Leases

As of August 12, 2019, the Company leased restaurant properties and office space. As of that same date, the Company had no financing leases. The operating leases had no material residual value guarantees or material restrictive covenants. Certain of the Company’s operating leases include variable rental payments based on a percentage of retail sales over contractual levels.

Some operating leases include one or more options to renew, with renewal terms that can extend the lease term from two to sixteen years from the terms of the original agreement. The exercise of lease renewal options is at the Company’s sole discretion. As of August 12, 2019, the Company did include options to renew in the operating lease assets and liabilities if it is reasonably certain to exercise lease options.

The components of lease expense were as follows:

Lease Cost	For the ~~Twenty-eight~~Forty Weeks Ended ~~August~~November 124, 2019		For the ~~Twenty-eight~~Forty Weeks Ended ~~August~~November 135, 2018
Operating lease costs	$	~~817~~1,171,000	$	~~798~~1,183,000
Variable lease costs		4540,000		4855,000
Total lease cost	$	~~862~~1,211,000	$	~~846~~1,238,000

The Company used ana secured incremental borrowing rate in January 2019, for operating leases that commenced prior to that date. The incremental borrowing rate iswas estimated based upon (1) the financial condition and credit rating of the Company ~~and its peers~~, (2) the term of the lease, (3) the nature of the underlying asset, and (4) the relative economic environment.

For the ~~twenty-eight~~forty weeks ended ~~August~~November 124, 2019, operating lease liabilities arising from obtaining new operating leases was $0309,000 and the total cash paid for amounts included in the measurement of operating leases liabilities was $1,286,000.

~~For~~The ~~the~~Lease ~~twenty-eight~~Term ~~weeks~~and ~~ended~~Discount ~~August~~Rate ~~12,~~calculations for ~~2019,~~ the ~~total~~operating ~~cash~~leases ~~paid~~as ~~for amounts included in the measurement~~ of ~~operating~~November ~~leases~~4, ~~liabilities~~2019 ~~was~~are ~~$842,000.~~as follows:

Lease Term and Discount Rate	August 12, 2019
Weighted-average remaining lease term (in years)		16.9
Weighted-average remaining lease term (in years)
Weighted-average discount rate		6.0	%
Operating leases		17.4
Weighted-average discount rate
Operating leases		6.0	%

The aggregate annual lease obligations at ~~August~~November 124, 2019 are as follows:

Fiscal Year	Operating Leases
Remainder of 2020	$	~~634~~273,000
2021		1,~~448~~564,000
2022		1,~~435~~552,000
2023		1,~~400~~458,000
2024		1,386,000
Thereafter		18,~~410~~409,000
Total undiscounted lease obligations		24,~~713~~642,000
Less imputed interest		(9,~~760~~521,000	)
Net lease obligations	$	1415,~~953~~121,000

Upon adoption of ASC 2016-02, Leases (Topic 842), the Company's aggregate annual lease obligations include leases with reasonably assured renewals. The aggregate minimum annual lease rentals as of January 28, 2019 for the remaining contractual term of non-cancelable leases under ASC 840 were as follows:

Fiscal Year	Operating Leases
2020	$	1,343,000
2021		1,291,000
2022		1,261,000
2023		1,238,000
2024		1,239,000
Thereafter		16,777,000
Total undiscounted lease obligations	$	23,149,000

Note 6 — Management Update – Operations

Management has added several new locations over the past few years. The Company has a net loss of $541,000 in the year end January 28, 2019 and a net loss of $~~423~~757,000 in the first ~~two~~three quarters of fiscal 2020. Management intends to and has focused on reducing costs and increasing earnings in Fiscal 2020. Management believes it can lower food and occupancy and other expenses in Fiscal 2020. The food cost was significantly lower in the second ~~quarter~~and third quarters of Fiscal 2020 compared to the same ~~quarter~~quarters of the prior year and occupancy and other expenses would have been lower except for rent reimbursement received in the prior year due to a kitchen fire which reduced some of the occupancy costs. Management expected a modest increase in labor costs due to the tight labor market and increases in the minimum wages in many of the ~~state~~states in which it operates. However, the labor increase was a significant 3.0% in first quarter of fiscal 2020. The labor costs increased by 1.6% and 2.9% in the second ~~quarter~~and third quarters of Fiscal 2020, respectively, compared to the same ~~period~~periods of the prior year. We ~~expect~~had expected the increases in labor costs for the ~~remaining~~third ~~two~~and fourth quarters in fiscal 2020 to be more in line with the second quarter increase since there are no significant scheduled minimum wages increases until January of 2020.We However, the third quarter increased 2.9% despite increased restaurant pricing in the second ~~quarter~~and third quarters of fiscal 2020. Part of the 2.9% increase in labor costs were due to lower revenue in the third quarter of Fiscal 2020. Management closed three underperforming restaurants in the third quarter of Fiscal 2020 to help lower labor costs in the fourth quarter of Fiscal 2020. Management intends to sell certain excess assets during the ~~current~~next ~~fiscal~~three ~~year~~quarters. Management has refinanced some long-term debt in the current fiscal year.

Note 7 - Commitments and Contingencies

In connection with the employment contract with Mr. Wheaton, the Company has agreed to pay Mr. Wheaton three years of his salary plus bonus if he resigns related to a change of control, is terminated without cause or if he resigns for good reason.

On August 4, 2010, Spirit Master Funding, LLC (‘Spirit”), a landlord of a Company subsidiary, filed case number CV-2010-022169 in the Superior Court of the State of Arizona for the failure of the subsidiary to pay $3.7 million in rent and accelerated rent for four restaurants leased to the subsidiary. During the bankruptcy, Spirit filed a proof of claim as an unsecured creditor for approximately $1.5 million. On October 14, 2016, the Company settled the claim for $900,000 payable over five years at five percent interest. The outstanding balance was $~~498~~371,000 and $525,000 as of ~~August~~November 124, 2019 and January 28, 2019, respectively. ~~In May 2019 the Company settled a general liability case in Colorado.~~

In addition to the matter set forth above, from time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. We are not currently a party to any legal proceedings, the adverse outcome of which, in management’s opinion, individually or in the aggregate, would have a material adverse effect on the results of our operations or financial position.

Note 8 - Subsequent Events

None.

STAR BUFFET, INC. AND SUBSIDIARIES

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

The following Management’s Discussion and Analysis should be read in conjunction with the unaudited condensed consolidated financial statements, and the notes thereto, presented elsewhere in this report and the audited consolidated financial statements of Star Buffet, Inc., a Delaware corporation (the “Company,” “we” or “us”), and Management’s Discussion and Analysis included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 28, 2019 (the “2019 Form 10-K”). Comparability of periods may be affected by the closure of restaurants or the implementation of the Company’s acquisition and strategic alliance strategies. The costs associated with integrating new restaurants or closing under-performing or unprofitable restaurants, if any, may have a material adverse effect on the Company’s results of operations in any individual period.

This Quarterly Report on Form 10-Q (this “Report”)contains forward looking statements, which are subject to known and unknown risks, uncertainties and other factors which may cause the actual results, performance, or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include the following: general economic and business conditions; success of integrating newly acquired under-performing or unprofitable restaurants; the impact of competitive products and pricing; success of operating initiatives; advertising and promotional efforts; adverse publicity; changes in business strategy or development plans; quality of management; availability, terms and deployment of capital; changes in prevailing interest rates and the availability of financing; food, labor, and employee benefits costs; changes in, or the failure to comply with, government regulations; weather and wildfire conditions; construction schedules; implementation of the Company’s acquisition and strategic alliance strategy; the effect of the Company’s accounting policies and other risks detailed in Item 1A of the 2019 Form 10-K, and other filings with the Securities and Exchange Commission. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this Report. All forward-looking statements are based on information available to the Company at this time, and the Company assumes no obligation to update any of these statements.

Executive Summary

Star Buffet, Inc., a Delaware corporation (the “Company,” “we” or “us”), is a multi-concept restaurant holding company. The Company was incorporated on July 28, 1997. At ~~August~~November 124, 2019, the Company operated 2623 full-service restaurants. During the first ~~two~~three quarters of fiscal year ending January 27, 2020 (“Fiscal 2020”), the Company also had ~~three~~four restaurants that were not in operation. One restaurant was leased to a third-party operator, ~~one was closed for remodeling~~ and ~~repositioning~~three ~~and~~were ~~one~~held ~~was~~for ~~used~~future ~~as a warehouse~~use. The Company’s restaurants operate under trade names are owned by the Company and include 4B’s Restaurants®, BuddyFreddys®, Barnhill’s Salads Buffet Desserts®, and Casa Bonita®. The Company's restaurants are located in Arkansas, Arizona, Colorado, Florida, Idaho, Mississippi, Montana, New Mexico, Texas, and Utah. The Company has an executive office in Scottsdale, Arizona and management information systems in Salt Lake City, Utah.

Recent Developments

~~Please refer to Note 8 – Subsequent Events in the Company’s Notes to Unaudited Condensed Consolidated Financial Statements for recent developments~~None.

The following table summarizes the Company’s results of operations as a percentage of total revenues for the 12 and 2840 weeks ended ~~August~~November 135, 2018 and ~~August~~November 135, 2018, respectively.

	Twelve Weeks Ended						~~Twenty-eight~~Forty Weeks Ended
	August 12,			August 13,			August 12,			August 13,
	November 4,			November 5,			November 4,			November 5,
	2019			2018			2019			2018
Total revenues		100.0	%		100.0	%		100.0	%		100.0	%
Costs, expenses and other
Food costs		3031.45			3132.26			31.87			32.13
Labor costs		3842.79			3740.10			4041.30			3738.95
Occupancy and other expenses		1921.01			1821.76			20.35			20.05
General and administrative expenses		46.41			4.47			6.32			4.5
Depreciation and amortization		23.41			12.83			2.78			2.12
Total costs, expenses and other		95104.07			93101.2			~~101~~102.42			9698.60
Income from operations		5.0			6.8			(1.4	)		3.4
Income (loss) from operations		(4.7	)		(1.2	)		(2.2	)		2.0
Interest expense		12.61			1.69			1.89			1.8
Other income		0.24			0.34			0.3			0.3
Income before income tax		3.6			5.5			(2.9	)		1.9
Income (loss) before income tax		(6.4	)		(2.7	)		(3.8	)		0.5
Income tax provision		0.1			0.1			0.1			0.1
Income tax provision (benefit)		(0.2	)		0.2			0.0			0.1
Net income		3.5	%		5.4	%		(3.0	)%		1.8	%
Net income (loss)		(6.2	)%		(2.9	)%		(3.8	)%		0.4	%

The table below outlines the number of operating and non-operating restaurants by the Company as of ~~August~~November 124, 2019 and January 28, 2019.

	August 12, 2019		January 28, 2019
	November 4, 2019		January 28, 2019
Operating Restaurants:
4B’s (1) (2)		1311		14
JB’s		65		5
Steakhouses (3)		4		4
Buffets (4)		2		2
Casa Bonita		1		1
		26		26
		23		26
Non-Operating Restaurants:
Leased to Third Parties		1		1
Warehouse		1		1
Held for Future Use		12		1
		3		3
		4		3
Total		2927		29

(1) Includes one ~~Frosty Freez restaurant and one~~ Antler’s restaurant.

⁽²⁾

The 4B’s Café in Deer Lodge Montana operates seasonally from approximately May to September.

⁽³⁾

Includes two Pecos Diamond restaurants, one Bar H restaurant and one Rancher’s Grill restaurant.

⁽⁴⁾

Includes one Barnhill’s Salads Buffet Desserts restaurant and one BuddyFreddys restaurant.

~~Sixteen~~Twelve Weeks Ended ~~August~~November 124, 2019 compared to Twelve Weeks Ended ~~August~~November 135, 2018

Overview - The Company has a consolidated net ~~income~~loss for the 12-week period ended ~~August~~November 124, 2019 of $~~237~~(334,000) or $(0.0710) per diluted share as compared with net ~~income~~loss of $~~389~~(172,000) or $(0.1205) per diluted share for the 12 weeks end ~~August~~November 135, 2018, a decrease of approximately $~~152~~162,000 from the comparable prior fiscal year period. The decrease in net income was primarily from the result of approximately $~~153~~185,000 ~~decrease~~increase in net ~~income~~loss from operations due primarily to a $~~526~~687,000 decrease in revenues and higher labor costs as a percentage of revenues.

Revenues - Total revenues decreased by approximately $~~526~~687,000, or 711.35%, from $76.30 million in the 12 weeks ended ~~August~~November 135, 2018 to $65.73 million in the 12 weeks ended ~~August~~November 124, 2019. The decrease in revenues was primarily the result of an approximately $~~305~~401,000 or 47.5% decrease in comparable same store sales and an approximately $~~276~~500,000 decrease in revenue for the closure of ~~two~~four restaurants in Fiscal 2020, one restaurant in Fiscal 2019 plus the temporary closure of one restaurant. The decrease in revenues was partially offset by the net increase of approximately $55214,000 attributable to the opening of one restaurant ~~each~~ in Fiscal ~~2019 and Fiscal~~ 2020.

Food Costs - Food costs as a percentage of total revenues decreased from 3132.26% during the 12-week period ended ~~August~~November 135, 2018 to 3031.45% during the 12-week period ended ~~August~~November 124, 2019. The food cost decreased in the current fiscal quarter as compared to the same period in the prior year as a percentage of sales primarily from stable wholesale costs and higher guest check average in Fiscal 2020 as compared to Fiscal 2019. Food costs decreased by approximately $~~215~~282,000 in the 12-week period ended ~~August~~November 124, 2019 compared to the same period ended ~~August~~November 135, 2018 primarily due a $~~526~~687,000 decrease in revenues.

Labor - Labor costs as a percentage of total revenues increased from 3740.10% during the 12-week period ended ~~August~~November 135, 2018 to 3842.79% during the 12-week period ended ~~August~~November 124, 2019. The increase as a percentage of total revenues was primarily attributable to higher minimum wages in the States of Arkansas, Arizona, Colorado, Florida and Montana and $~~526~~687,000 in lower revenue in the ~~second~~third quarter of Fiscal 2020 compared to the ~~second~~third quarter of Fiscal 2019.

Occupancy and Other Expenses - Occupancy and other expenses as a percentage of total revenues ~~increased~~decreased from 1821.76% during the 12-week period ended ~~August~~November 135, 2018 to 1921.01% during the 12-week period ended ~~August~~November 124, 2019. The ~~increase~~decrease as a percentage of total revenues was primarily attributable to a lower ~~rent~~advertising and repair expense as a percentage of total revenues in the ~~second~~third quarter ofcompared ~~the~~to ~~prior year primarily resulting from a rent reimbursement regarding~~ the ~~fire~~same inperiod ~~Kalispell~~ in ~~Fiscal~~the ~~2019~~prior year. Occupancy and other expense decreased approximately $77176,000 in the 12-week period ended ~~August~~November 124, 2019 primarily due to the decrease of $~~526~~687,000 in revenues in the ~~second~~third quarter of Fiscal 2020 compared the same period in Fiscal 2019.

General and Administrative Expenses - General and administrative expense as a percentage of total revenues ~~remained~~increased ~~the~~from ~~same at~~ 4.47% during the 12-week period ended ~~August~~November 135, 2018 ~~and~~to 6.1% during the 12-week period ended ~~August~~November 124, 2019. The increase as a percentage of total revenues was primarily attributable to a credit in licensing fees as a percentage of total revenues in the third quarter of the prior year compared to the same period of the current year. General and administrative expense ~~decreased~~increased from $~~320~~279,000 during the 12-week period ended ~~August~~November 135, 2018 to $~~295~~320,000 during the 12-week period ended ~~August~~November 124, 2019.

Depreciation and Amortization - Depreciation and amortization expense increased from $~~133~~135,000 during the 12-week period ended ~~August~~November 135, 2018 to $164,000 during the 12-week period ended ~~August~~November 124, 2019. The increase was primarily attributable to additional restaurants ~~acquired~~opened.

Interest Expense - Interest expense decreased from $~~115~~116,000 during the 12-week period ended ~~August~~November 135, 2018 to $~~105~~111,000 during the 12-week period ended ~~August~~November 124, 2019. The decrease was attributable to lower debt balance primarily relating to loans for the purchase and remodel of the 4B’s restaurant in Missoula, Montana in the 12-week period ended ~~August~~November 124, 2019 as compared to the 12-week period ended ~~August~~November 135, 2018.

Other Income - Other income is primarily rental income from the Company’s leased properties. Rental income was $2221,000 for two properties leased for the 12-week period ended ~~August~~November 135, 2018. Rental income was $1319,000 for one property leased for the 12-week period ended ~~August~~November 124, 2019.

Income Taxes - The income tax provision totaled $10,000 for the 12-week period ended ~~August~~November 135, 2018 and was a tax benefit of $10,000 for the 12-week period ended ~~August~~November 124, 2019. The Company has ~~net~~a ~~deferred~~full ~~income~~valuation allowance against its deferred tax ~~assets~~asset, net of $0expected reversals of existing deferred tax liabilities on ~~August~~November 124, 2019 and January 2829, ~~2019~~2018. The Company has a net operating loss for tax and financial reporting purposes. ~~The Company has full valuation against its existing deferred tax assets as of August 12, 2019.~~

~~Twenty-eight~~Forty ~~Weeks~~weeks Ended ~~August~~November 124, 2019 compared to ~~Twenty-eight~~Forty ~~Weeks~~weeks Ended ~~August~~November 135, 2018

Overview - The Company has a consolidated net loss for the 2840-week period ended ~~August~~November 124, 2019 of $(~~423~~757,000) or $(0.1324) per diluted share as compared with net income of $~~255~~83,000 or $0.0803 per diluted share for the 2840-weeks ended ~~August~~November 135, 2018, a decrease of approximately $~~678~~840,000 from the comparable prior fiscal year period. The net decrease in operations was primarily from the result of approximately $~~691~~876,000 decrease from income from operations due primarily to a $~~762,000~~1.4 million decrease in revenues and higher labor and higher legal expenses in general and administrative costs as a percentage of revenues.

Revenues - Total revenues decreased by approximately $~~762~~1.4 million,~~000,~~ or 57.10%, from $1420.8 million in the 2840 weeks ended ~~August~~November 135, 2018 to $1419.14 million in the 28 40-weeks ended ~~August~~November 124, 2019. The decrease in revenues was primarily the result of an approximately $~~681~~962,000 or 45.91% decrease in comparable same store sales and an approximately $~~504,000~~1.1 million decrease in revenue for the closure of ~~two~~four restaurants in Fiscal 2020, one restaurant in Fiscal 2019 plus the temporary closure of one restaurant. The decrease in revenues was partially offset by the net increase of approximately $~~423~~561,000 attributable to the opening of one restaurant in Fiscal 2020, two restaurants in Fiscal 2019 and the reopening of one restaurant closed due to a kitchen fire.

Food Costs - Food costs as a percentage of total revenues decreased from 32.13% during the 2840-week period ended ~~August~~November 135, 2018 to 31.87% during the 2840-week period ended ~~August~~November 124, 2019. The food cost decreased in the current fiscal quarter as compared to the same period in the prior year as a percentage of sales primarily from stable wholesale costs and higher guest check average in Fiscal 2020 as compared to Fiscal 2019. Food costs decreased by approximately $~~284~~566,000 in the 2840-week period ended ~~August~~November 124, 2019 compared to the same period ended ~~August~~November 135, 2018 primarily due to a $~~762,000~~1.4 million decrease in revenues.

Labor - Labor costs as a percentage of total revenues increased from 3738.95% during the 2840-week period ended ~~August~~November 135, 2018 to 4041.30% during the 2840-week period ended ~~August~~November 124, 2019. The increase as a percentage of total revenues was primarily attributable to higher minimum wages in the States of Arizona, Colorado, Florida and Montana and $~~762,000~~1.4 million in lower revenue in the first ~~two~~three quarters of Fiscal 2020 compared to the first ~~two~~three quarters of Fiscal 2019.

Occupancy and Other Expenses - Occupancy and other expenses as a percentage of total revenues ~~increased~~remained ~~from~~the same at 20.05% during the 2840-week period ended ~~August~~November 135, 2018 toand ~~20.3%~~ during the 2840-week period ended ~~August~~November 124, 2019. The increase as a percentage of total revenues was primarily attributable to a lower rent expense as a percentage of total revenues in the second quarter of the prior year primarily resulting from a rent reimbursement regarding the fire in Kalispell in Fiscal 2019. Occupancy and other expense decreased approximately $~~110~~286,000 in the 2840-week period ended ~~August~~November 124, 2019 primarily due to the decrease of $~~762,000~~1.4 million in revenues in the first ~~two~~three quarters of Fiscal 2020 compared the same period in Fiscal 2019.

General and Administrative Expenses - General and administrative expense as a percentage of total revenues increased from 4.5% during the 2840-week period ended ~~August~~November 135, 2018 to 6.32% during the 2840-week period ended ~~August~~November 124, 2019. General and administrative expense increased from $~~668~~947,000 during the 2840-week period ended ~~August~~November 135, 2018 to $~~880,000~~1.2 million during the 2840-week period ended ~~August~~November 135, 2018. The increase was primarily attributable to a credit in licensing fees in the prior year and to higher legal expense in first ~~two~~three quarters of Fiscal 2020 compared same period in Fiscal 2019. The legal expenses primarily resulted from a settlement of a general liability case in Denver, Colorado and a trademark dispute in Arkansas.

Depreciation and Amortization - Depreciation and amortization expense increased from $~~316~~451,000 during the 2840-week period ended ~~August~~November 135, 2018 to $~~384~~548,000 during the 2840-week period ended ~~August~~November 124, 2019. The increase was primarily attributable to additional restaurants ~~acquired~~opened.

Interest Expense - Interest expense decreased from $~~267~~383,000 during the 2840-week period ended ~~August~~November 135, 2018 to $~~249~~360,000 during the 2840-week period ended ~~August~~November 134, ~~2018~~2019. The decrease was attributable to lower debt balance primarily relating to loans for the purchase and remodel of the 4B’s restaurant in Missoula, Montana in the 2840-week period ended ~~August~~November 124, 2019 as compared to the 2840-week period ended ~~August~~November 135, 2018.

Other Income - Other income consists primarily of rental income from the Company’s leased properties. Rental income was $4970,000 for two properties leased for the 2840-week period ended ~~August~~November 135, 2018. Rental income was $3958,000 for one property leased for the 2840-week period ended ~~August~~November 124, 2019. Rental income was adversely impacted by the loss of one tenant.

Income Taxes - The income tax provision totaled $2030,000 for the 2840-week period ended ~~August~~November 135, 2018 and $155,000 for the 2840-week period ended ~~August~~November 124, 2019. The Company has ~~net~~a ~~deferred~~full ~~income~~valuation allowance against its deferred tax ~~assets~~asset, net of $0expected reversals of existing deferred tax liabilities on ~~August~~November 134, ~~2018~~2019 and January 29, 2018. The Company has a net operating loss for tax and financial reporting purposes. ~~The Company has full valuation against its existing deferred tax assets as of August 12, 2019.~~

Impact of Inflation

The impact of inflation on food, labor, equipment and construction and remodeling of restaurants could affect the Company’s margins. Many of the Company’s employees are paid hourly rates related to state minimum wage laws that are tied to inflation indexes so that changes in these laws would result in higher labor costs to the Company. In addition, food items purchased by the Company are subject to market supply and demand pressures. The Company believes that modest increases in these costs can be offset through price changes and other cost control efforts. However, there is no assurance that the Company would be able to pass significant costs on to its customers in a short period of time.

Liquidity and Capital Resources

In recent years, the Company has financed operations through a combination of cash on hand, cash provided from operations and loans from our principal shareholders.

As of ~~August~~November 124, 2019, the Company had $~~121~~95,000 in cash. Cash and cash equivalents decreased by $4268,000 during the 2840-weeks ended ~~August~~November 124, 2019. The net working capital deficit was $5.25 million and $4.4 million at ~~August~~November 124, 2019 and January 28, 2019, respectively. We will need to raise additional capital to grow our business and anticipate raising such capital through the issuance of common stock, preferred stock or debt. We have recently been borrowing required capital to grow our business from our principal shareholders. We have no commitment from them to provide additional capital or assurance that they will voluntarily continue to provide capital as needed. We may be unable to raise additional capital as needed, and we will likely be required to pay a high price for capital.

The Company generates cash flow daily from sales in its restaurants and manages its cash balances to meet its current operating obligations. The Company spent approximately $~~175~~327,000 on capital expenditures during the 2840-weeks ending ~~August~~November 124, 2019, primarily on existing restaurants.

Cash provided from operations was approximately $~~187~~444,000 for the 2840-weeks ending ~~August~~November 124, 2019 and $~~533~~692,000 for the 2840-weeks ending ~~August~~November 135, 2018, respectively. The decrease in cash generated from operating activities for the 2840-week period ending ~~August~~November 124, 2019 was primarily due to the increase in the net loss in the current fiscal year as compared to the prior fiscal year.

Cash used by financing activities was approximately $54185,000 for the 2840-weeks ending ~~August~~November 124, 2019 compared to cash used by financing activities of approximately $~~326~~349,000 for the 2840-weeks ending ~~August~~November 135, 2018. In the first ~~two~~three quarters of Fiscal 2020, cash used by financing activities was as follows: The Company made net debt payments of approximately $~~125~~222,000 and had checks written in excess of bank balance of $7137,000, a change of $7137,000 from the balance of $0 as of January 28, 2019. In the first ~~quarter~~three quarters of Fiscal 2019, cash provided by financing activities was as follows: The Company made net debt payments of approximately $~~196~~275,000 and had checks written in excess of bank balance of $~~108~~164,000, a change of $~~130~~(74,000) from the balance of $238,000 as of January 29, 2018.

The following table is a summary of the Company’s outstanding debt obligations.

	August 12, 2019		August 12, 2019		January 28, 2019		January 28, 2019
	November 4, 2019		November 4, 2019		January 28, 2019		January 28, 2019
Type of Debt (1)	Total Debt		Current Portion		Total Debt		Current Portion
Real Estate Mortgages	$	2,~~370~~278,000	$	~~332~~292,000	$	2,485,000	$	560,000
Other-Miscellaneous		~~246~~242,000		16,000		253,000		10,000
Note Payable to Officer		1,992,000		-		1,992,000		-
Total Debt	$	4,~~608~~512,000	$	~~348~~308,000	$	4,730,000	$	570,000

(1) The interest rates range from 6% to 118.5%. The maturity dates of the obligations range from November 2019 to October 2035.

During fiscal 2008, the Company borrowed approximately $1,400,000 from Mr. Wheaton. In June 2008, the Company borrowed an additional $592,000 from Mr. Wheaton under the same terms. This resulted in an increase in the note balance from $1,400,000 to $1,992,000, the balance as of ~~August~~November 124, 2019 and January 28, 2019. The principal balance and any unpaid interest were due and payable in full on June 5, 2012. The loan was subsequently modified as a result of the Company’s bankruptcy filing and pursuant to the plan of reorganization approved by the Bankruptcy Court on December 17, 2012 (the “Bankruptcy Plan”), the principal balance was not eligible to be repaid until all obligations owed to other creditors have been fully satisfied. Interest accrued on the principal amount of $1,992,000 and the interest of $197,000 from September 28, 2011 to December 7, 2016 at the Bankruptcy Plan rate. When the Bankruptcy Court entered into a Final Decree and Order Closing the Bankruptcy Case of Star Buffet, Inc. on December 7, 2016 the Company reverted back to the original interest rate of 8.5%. The Company expensed $~~105~~150,000 to Robert E. Wheaton for interest during the first three quarters of Fiscal 2020 and Fiscal 2019.

On November 9, 2016, the Company borrowed $450,000 from Mr. Robert E. Wheaton to remodel the 4B’ Restaurant in Missoula, Montana. The three-year ~~fully amortized~~ secured loan ~~has~~had monthly payments of $14,839 ~~and interest rate of 11~~.~~5%.~~ The Company paid Mr. Wheaton approximately $82154,000 and $81113,000 in principal during the first three quarters of Fiscal 2020 and Fiscal 2019, respectively, under this ~~mortgage~~secured loan. In addition, the Company paid approximately $710,000 and $1421,000 in interest during the first three quarters of Fiscal 2020 and Fiscal 2019, respectively. The loan was paid in full in October 2019.

Critical Accounting Policies and Judgments

The Company prepares its condensed consolidated financial statements in conformity with US GAAP. The Company's condensed consolidated financial statements are based on the application of certain accounting policies, the most significant of which are described in Note 1—Summary of Significant Accounting Policies to the audited financial statements for Fiscal 2019 included in the 2019 Form 10-K. Certain of these policies require numerous estimates and strategic or economic assumptions that may prove inaccurate or be subject to variations and which may significantly affect the Company's results and financial position for the reported period or in future periods. Changes in underlying factors, assumptions or estimates in any of these areas could have a material impact on the Company's future financial condition and results of operations.

Earnings or Loss Per Common Share

Net (loss) income per common share - basic is computed based on the weighted-average number of common shares outstanding during the period. Net (loss) income per common share – diluted is computed based on the weighted-average number of common shares outstanding during the period plus the effect of dilutive common stock equivalents outstanding during the period. Dilutive stock options are considered to be common stock equivalents and are included in the diluted calculation using the treasury stock method.

Basic earnings or loss per common share is computed on the basis of the weighted average number of shares outstanding during the periods. Diluted earnings or loss per common share is calculated based on the weighted-average number of common shares outstanding during the period plus the effect of dilutive common stock equivalents outstanding during the period. Dilutive stock options are considered to be common stock equivalents and are included in the diluted calculation using the treasury stock method. The Company did not have any outstanding stock options for the fiscal quarters ending ~~August~~November 124, 2019 and ~~August~~November 135, 2018.

Impairment of Long-Lived Assets

The Company evaluates impairment of long-lived assets in accordance with ASC 360, “Property, Plant and Equipment”. The Company assesses whether an impairment write-down is necessary whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such asset is considered to be impaired, the impairment loss to be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Any impairment is recognized as a charge to earnings, which would adversely affect operating results in the affected period.

Building and Equipment

Building and equipment are carried at cost less accumulated depreciation and amortization. Depreciation and amortization are provided using the straight-line method over the following useful lives:

⁽¹⁾

Buildings and equipment placed on the market for sale is not depreciated and is recorded on the balance sheet as property held for sale and recorded at the lower of cost or market.

Repairs and maintenance are charged to operations as incurred. Major equipment refurbishments and remodeling costs are generally capitalized.

The Company's accounting policies regarding buildings and equipment include certain management judgments regarding the estimated useful lives of such assets, the residual values to which the assets are depreciated and the determination as to what constitutes the life of existing assets. These judgments and estimates may produce materially different amounts of depreciation and amortization expense than would be reported if different assumptions were used.

Income Taxes

Adopted and Recently Issued Accounting Standards

Significant Accounting Policies Update

Adoption of ASC Topic 842: Leases

The Company adopted ASU 2016-02- Leases (Topic 842) and related amendments, as of January 29, 2019, using the modified retrospective approach. The modified retrospective approach provides a method for recording existing leases at adoption with a cumulative adjustment to retained earnings. The Company elected the package of practical expedients which permits the Company to not reassess (1) whether any expired or existing contracts are or contain leases, (2) the lease classification for any expired or existing leases, and (3) any initial direct costs for any expired or existing leases as of the effective date. The Company also elected the practical expedient lease considerations to not allocate lease considerations between lease and non-lease components for real estate leases. As such, real estate lease considerations are treated as a single lease-component and accounted for accordingly.

Adoption of the new standard resulted in the recording of operating lease assets and operating lease liabilities of $14.4 million and $15.3 million, respectively, on the Company’s consolidated balance sheet as of January 29, 2019. The difference between the approximate value of the operating lease assets and liabilities is attributable to deferred rent, deferred rent incentives, leasehold interests and prepaid rent. The cumulative change in the beginning accumulated deficit was $(501,000) due to the adoption of Topic 842. There was no material impact on the Company’s consolidated statement of operations or consolidated statements cash flows. The Company’s comparative periods continue to be presented and disclosed in accordance with legacy guidance in Topic 840.

Operating Leases

The Company determines if an arrangement is a lease at inception. Lease agreements will typically exist with lease and non-lease components, which are generally accounted for separately.

The Company recognizes operating lease liabilities equal to the present value of the lease payments and operating lease assets representing the right to use the underlying asset for the lease term. The lease expense for lease payments is recognized on a straight-line basis over the lease term.

Off-Balance Sheet Arrangements

As of ~~August~~November 124, 2019, the Company did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

This item is not ~~required~~applicable ~~for~~to small issuers.

Item 4. Controls and Procedures

Management’s Report on Disclosure Controls and Procedures

The Company’s disclosure controls and procedures are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized, and reported within the required time periods and that such information is accumulated and communicated to our management, including our Chief Executive Officer, Chief Financial Officer and Principal Accounting Officer, as appropriate.

As required by Rule 13a-15(b) under the Exchange Act, we conducted an evaluation, under the supervision and with the participation of our management, including the Chief Executive Officer, Chief Financial Officer and the Principal Accounting Officer, of the effectiveness and the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on such evaluation, the Chief Executive Officer, the Chief Financial Officer and the Principal Accounting Officer have concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the fiscal quarter ended ~~August~~November 124, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Because of its inherent limitations, a system of internal control over financial reporting can provide only reasonable assurance and may not prevent or detect misstatements. Further, because of changes in conditions, effectiveness of internal controls over financial reporting may vary over time.

PART II: OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. During the fiscal quarter ended ~~August~~November 124, 2019, there were no new, or material developments in any existing legal proceedings, the adverse outcome of which, in management’s opinion, individually or in the aggregate, would have a material adverse effect on the results of our operations or financial position.

Item 1A. Risk Factors

This item is not applicable to small issuers; however, please refer to the risk factors disclosed in Part 1, Item 1A of our Annual Report on Form 10-K for the fiscal year ended January 28, 2019 filed with the SEC.

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

None.

Item 3. Defaults Of Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

None.

Item 6. Exhibits

The exhibits listed in the accompanying Exhibit Index are filed as part of this Form 10-Q (unless noted as previously filed) and incorporated herein by reference.

Exhibit Index

Exhibit		Description
Number		of Exhibit
3.1		Certificate of Incorporation*
3.2		Bylaws, as amended on September 22, 1997*
4.1		Form of Common Stock Certificate**
21.1		List of Subsidiaries*
31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. †
31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. †
32.1		Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. †
32.2		Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. †
101		The following financial information from the quarterly report on Form 10-Q of Star Buffet, Inc. for the quarter ended ~~August~~November 124, 2019, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheet, (ii) Consolidated Statement of Operations, (iii) Consolidated Statements of Cash Flows, (iv) Notes to Consolidated Financial Statements, tagged as blocks of text. †

* Previously filed as an exhibit to the Registration Statement on Form S-1, Amendment No. 1 (Registration No. 333- 32249). ** Previously filed as an exhibit to the Registration Statement on Form S-1, Amendment No. 2 (Registration No. 333- 32249). † Filed concurrently herewith.

** Previously filed as an exhibit to the Registration Statement on Form S-1, Amendment No. 2 (Registration No. 333- 32249).

† Filed concurrently herewith.

SIGNATURES

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

	Star Buffet, Inc.
Date: September 23, 2019		By:	/s/ Robert E. Wheaton
Date: December 17, 2019	By:	/s/ Robert E. Wheaton
			Robert E. Wheaton, Chief Executive Officer,
		Robert E. Wheaton, Chief Executive Officer, President, Chief Financial Officer and Chairman
			President, Chief Financial Officer and Chairman
December 17, 2019	By:	/s/ Ronald E. Dowdy
		By:	/s/ Ronald E. Dowdy
		Ronald E. Dowdy
September 23, 2019			Ronald E. Dowdy
		Group Controller, Treasurer, Secretary and Principal Accounting Officer
			Group Controller,
			Treasurer, Secretary and
			Principal Accounting Officer

Leasehold improvements

Furniture, fixtures and equipment

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