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Pizza Inn Believes It Has Regained Compliance With the Shareholders’ Equity Requirement for Continued Listing on Nasdaq

Pizza Inn Receives Notification of Failure to Maintain Compliance With Nasdaq Audit Committee Requirements

Pizza Inn, Inc. today announced that it believes it has regained compliance with the minimum shareholders' equity requirement of $2,500,000 set forth in Nasdaq Marketplace Rule 4310(c)(2)(B). On November 9, 2006, the Company received a staff deficiency letter from the Nasdaq Stock Market regarding the Company's failure to comply with Rule 4310(c)(2)(B), which requires listed companies to maintain certain levels of shareholders' equity, market value, or net income. Pizza Inn believes it was able to regain compliance with the listing standards as a result of the Company's financial results during its fiscal second quarter ended December 24, 2006, which benefited from a gain in excess of $500,000 realized on the previously announced sale of the Company's headquarters office building and distribution facility. Furthermore, the Company believes that its financial performance in future periods will allow it to maintain compliance with the Nasdaq shareholders' equity requirement. Nasdaq will continue to monitor the Company's ongoing compliance with the shareholders' equity requirement and, if the Company's Form 10-Q for the fiscal quarter ended December 24, 2006 does not evidence such compliance, then the Company may be subject to delisting.

In a separate matter, on January 8, 2007, Pizza Inn received a staff deficiency letter from Nasdaq indicating that the Company fails to comply with the audit committee composition requirements set forth in Nasdaq Marketplace Rule 4350(d)(2)(A) due to one vacancy on the audit committee of the Board of Directors of Pizza Inn. In the letter, Nasdaq notified Pizza Inn that Nasdaq will provide the Company until April 16, 2007 to regain compliance. Pizza Inn is currently considering its alternatives for regaining compliance with the Nasdaq audit committee composition requirements.

Certain statements in this press release, other than historical information, may be considered forward-looking statements, within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, and are subject to various risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may differ from those anticipated, estimated or expected. Among the key factors that may have a direct bearing on Pizza Inn's operating results, performance or financial condition are its ability to implement its growth strategies, national, regional and local economic conditions affecting the restaurant/entertainment industry, competition within each of the restaurant and entertainment industries, store sales cannibalization, success of its franchise operations, negative publicity, fluctuations in quarterly results of operations, including seasonality, government regulations, weather, commodity, insurance and labor costs.

Pizza Inn, Inc. (https://www.pizzainn.com/ ) is headquartered in The Colony, Texas, along with its distribution division, Norco Restaurant Services Company. Pizza Inn franchises approximately 362 restaurants and owns three restaurants with annual domestic and international chain-wide sales of approximately $150 million.

   Pizza Inn, Inc.                    For more information contact:
   3551 Plano Parkway                 Clinton J. Coleman
   The Colony, TX  75056              Interim Chief Financial Officer
                                      (469) 384-5201

SOURCE: Pizza Inn, Inc.

CONTACT: Clinton J. Coleman, Interim Chief Financial Officer of Pizza
Inn, Inc., +1-469-384-5201