UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

R QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15( d ) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~November 30~~February 28, ~~2014~~2015

¨ 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 000-54536

~~DIXIE~~PREFERRED ~~FOODS~~RESTAURANT ~~INTERNATIONAL~~BRANDS, INC.

(Exact name of registrant as specified in its charter)

Florida	80-0608195
State or other jurisdiction of incorporation or organization	(I.R.S. Employer Identification No.)

c/o KCI Investments, LLC; 4033 South Dean Martin Drive; Las Vegas, NV		89103
c/o KCI Investments, LLC 4033 South Dean Martin Drive; Las Vegas, NV	89103
(Address of principal executive offices)	(Zip Code)	~~(Zip Code)~~

Registrant’s telephone number, including area code (702) 834-7101

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~~durin`g 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.

~~xYes oNo~~x Yes o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted 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 and post such files). oYes x No

xYes o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) o Yes x No

~~oYes~~As ~~xNo~~of July 21, 2015 issuer had 46,493,262 shares of common stock issued and outstanding.

~~As of February 2, 2015 issuer had 43,293,726 shares of common stock issued and outstanding.~~1

TABLE OF CONTENTS

		Page No.
PART I - FINANCIAL INFORMATION	4
PART I - FINANCIAL INFORMATION
Item 1: Financial Statements	4
Item 1.	Financial Statements.	4
NOTE 1—ORGANIZATION AND NATURE OF BUSINESS	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations.	18
NOTE 2—GOING CONCERN	8
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	21
NOTE 3—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	11
Item 4.	Controls and Procedures.	22
NOTE 4—PROPERTY AND EQUIPMENT	12
PART II - OTHER INFORMATION
NOTE 5—RESTAURANT PURCHASES AND SALES	13
Item 1.	Legal Proceedings.	23
NOTE 6—INTANGIBLE ASSETS	13
Item 1A.	Risk Factors.	23
NOTE 7—RELATED PARTY TRANSACTIONS	14
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	23
NOTE 8—NOTES PAYABLE	15
Item 3.	Defaults Upon Senior Securities.	23
NOTE 9—CONVERTIBLE NOTES PAYABLE	16
Item 4.	Mine Safety Disclosures	23
NOTE 10—DERIVATIVE LIABILITY	17
Item 5.	Other Information.	23
NOTE 11—CLASS B MEMBERSHIP UNITS	18
Item 6.	Exhibits.	23
NOTE 12—STOCKHOLDERS’ DEFICIT	19
NOTE 13—STOCK OPTIONS AND WARRANTS	20
NOTE 14—FAIR VALUE MEASUREMENTS	22
NOTE 15—SUBSEQUENT EVENTS	22
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
FORWARD LOOKING INFORMATION	24
OVERVIEW	24
Results of Operations	24
Item 3. Quantitative and Qualitative Disclosures about Market Risk	29
Item 4. Controls and Procedures.	29
PART II - OTHER INFORMATION	30
Item 1. Legal Proceedings	30
Item 1A. Risk Factors	30
Item 2. Unregistered Sale of Equity Securities and Use of Proceeds	30
Item 3. Defaults upon Senior Securities	30
Item 4. Mine Safety Disclosures	30
Item 5. Other Information	30
Item 6. Exhibits	31

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

Certain statements in this report contain or may contain forward-looking statements that are subject to known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements were based on various factors and were derived utilizing numerous assumptions and other factors that could cause our actual results to differ materially from those in the forward-looking statements. These factors include, but are not limited to, our ability to implement our business plan and generate revenues, economic, political and market conditions and fluctuations, government and industry regulation, U.S. and global competition, and other factors. Most of these factors are difficult to predict accurately and are generally beyond our control. You should consider the areas of risk described in connection with any forward-looking statements that may be made herein. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. Readers should carefully review this in its entirety, including but not limited to our financial statements and the notes thereto. Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events.

PART I - FINANCIAL INFORMATION

~~DIXIE~~Item ~~FOODS~~1: Financial ~~INTERNATIONAL, INC.~~Statements

Consolidated Balance Sheets

PREFERRED RESTAURANT BRANDS, INC
(formerly Dixie Foods International, Inc.)
Consolidated Balance Sheets

	February 28,			August 31,
	2015			2014

ASSETS

CURRENT ASSETS
Cash	$	18,428		$	24,033
Accounts receivable		123,905			75,216
Other receivables		-			4,632
Food inventory		102,793			103,367
Prepaid expenses		272,741			111,678
Debt issuance costs, net of amortization of $4,916 and $-0-, respectively		157,754			-
Total Current Assets		675,621			318,926

OTHER ASSETS
Prepaid franchise and territory rights fees, net		832,708			897,846
Property and equipment, net		4,224,184			3,418,743

TOTAL ASSETS		5,732,513			4,635,515

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
Accounts payable and accrued expenses	$	3,704,351		$	933,507
Deferred revenue		66,392			95,186
Related party notes payable		1,205,072			-
Short-term notes payable, net of debt discounts of $64,079 and $161,899, respectively		7,389,150			7,366,299
Short-term convertible notes payable, net of debt discounts of $106,300 and $-0-, respectively		1,193,700			300,000
Derivative liability		1,562,718			-
Total Current Liabilities		15,121,383			8,694,992

LONG-TERM LIABILITIES
Long-term notes payable		500,000			500,000
Long-term convertible notes payable		550,000			550,000
Total Liabilities		16,171,383			9,744,992

Class B membership units, no par value, 8 units authorized, 7 and 2 units issued and outstanding, respectively, net of subscriptions receivable of $600,000 and $-0-, respectively		2,900,000			1,000,000

STOCKHOLDERS' DEFICIT
Preferred stock, $0.001 par value, 14,999,999 shares authorized, no shares issued and outstanding		-			-
Series Class B preferred stock, $0.001 par value, 1 share authorized, 1 and -0- shares issued and outstanding, respectively		118,092			-
Common stock, $0.001 par value, 150,000,000 shares authorized, 45,633,262 and 42,570,975 shares issued and outstanding		45,636			42,572
Additional paid-in capital		17,384,961			14,311,918
Accumulated deficit		(30,887,559	)		(20,463,967	)
Total Stockholders' Deficit		(13,338,870	)		(6,109,477	)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	5,732,513		$	4,635,515

	November 30,			August 31,
	2014			2014
	(Unaudited)			(Restated)
ASSETS
CURRENT ASSETS
Cash	$	42,301		$	24,033
Accounts receivable		52,076			75,216
Other receivables		-			4,632
Food inventory		119,001			103,367
Prepaid expenses		131,508			111,678
Total Current Assets		344,886			318,926
OTHER ASSETS
Prepaid franchise and territory rights fees, net		774,996			897,846
Property and equipment, net		4,176,143			3,418,743
TOTAL ASSETS	$	5,296,025		$	4,635,515
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable and accrued expenses	$	1,948,468		$	829,109
Checks issued in excess of cash		208,084			104,398
Deferred revenue		68,605			95,186
Related party notes payable		379,073			-
Short-term notes payable, net of debt discounts		7,496,681			7,366,299
Short-term convertible notes payable		300,000			300,000
Derivative liability		526,316			-
Total Current Liabilities		10,927,227			8,694,992
LONG-TERM LIABILITIES
Notes payable		500,000			500,000
Convertible notes payable		550,000			550,000
Total Liabilities		11,977,227			9,744,992
Class B Membership Units, no par value, 6 units authorized, 5 and 2 units issued and outstanding, respectively		2,500,000			1,000,000
STOCKHOLDERS' DEFICIT
Preferred stock, $0.001 par value, 15,000,000 shares authorized, no shares issued or oustanding		-			-
Common stock, $0.001 par value, 150,000,000 shares authorized, 42,993,475 and 42,570,975 shares issued and outstanding, respectively		42,995			42,572
Additional paid-in capital		15,472,046			14,311,918
Accumulated deficit		(24,696,243	)		(20,463,967	)
Total Stockholders' Deficit		(9,181,202	)		(6,109,477	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	5,296,025		$	4,635,515

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

DIXIE FOODS INTERNATIONAL, INC.

PREFERRED RESTAURANT BRANDS, INC
(formerly Dixie Foods International, Inc.)
Consolidated Statements of Operations
(Unaudited)

	For the Three Months Ended						For the Six Months Ended
	February 28,						February 28,
	2015			2014			2015			2014

REVENUE	$	1,939,412		$	1,336,391		$	3,924,646		$	2,617,819

OPERATING EXPENSES
Restaurant operating costs:
Food, beverage and packaging		834,470			503,770			1,548,784			954,707
Labor and related		751,865			340,998			1,398,817			689,900
Occupancy		516,781			111,357			795,314			296,474
Other restaurant operating		541,939			304,118			1,164,835			531,469
Total Restaurant Operating Expenses		2,645,055			1,260,243			4,907,750			2,472,550

Loss from Restaurant Operations		(705,643	)		76,148			(983,104	)		145,269

General and administrative		2,312,551			484,909			4,621,334			1,062,848
Depreciation and amortization		100,804			72,306			206,019			119,967
Pre-opening expenses		266,957			211,660			473,404			309,560
Total		2,680,312			768,875			5,300,757			1,492,375

LOSS FROM OPERATIONS		(3,385,955	)		(692,727	)		(6,283,861	)		(1,347,106	)

OTHER INCOME (EXPENSES)
Loss on sale of assets		(63,280	)		-			(63,280	)		-
Interest expense		(3,512,371	)		(30,011	)		(4,846,741	)		(305,442	)
Derivative gain (expense)		808,240			301,140			808,240			301,140
Other income (expense)		(37,950	)		9,558			(37,950	)		-
Total Other Income (Expenses)		(2,805,361	)		280,687			(4,139,731	)		(4,302	)

LOSS BEFORE INCOME TAXES		(6,191,316	)		(412,040	)		(10,423,592	)		(1,351,408	)
PROVISION FOR INCOME TAXES		-			-			-			-

NET LOSS	$	(6,191,316	)	$	(412,040	)	$	(10,423,592	)	$	(1,351,408	)

BASIC AND DILUTED LOSS PER COMMON SHARE	$	(0.14	)	$	(0.01	)	$	(0.24	)	$	(0.03	)

BASIC AND DILUTED WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING		44,288,625			42,570,975			43,667,211			42,570,975

Consolidated Statements of Operations

(Unaudited)

	For the Three Months Ended
	November 30,
	2014			2013
REVENUE	$	1,985,234			1,281,428
OPERATING EXPENSES
Restaurant operating costs:
Food, beverage and packaging		714,314			450,937
Labor and related		646,952			348,902
Occupancy		278,533			185,117
Other operating costs		622,896			227,351
Total Restaurant Operating Expenses		2,262,695			1,212,307
Profit from Restaurant Operations		(277,461	)		69,121
General and administrative		1,277,632			295,001
Depreciation and amortization		105,215			128,171
Salaries and wages		913,078			192,118
Royalty and franchise fees		118,073			90,820
Pre-opening costs		206,447			97,900
Total		2,620,445			804,010
LOSS FROM OPERATIONS		(2,897,906	)		(734,889	)
OTHER INCOME (EXPENSES)
Interest expense		(1,334,370	)		(275,431	)
Other expense		-			(9,558	)
Total Other Income (Expenses)		(1,334,370	)		(284,989	)
LOSS BEFORE INCOME TAXES		(4,232,276	)		(1,019,878	)
PROVISION FOR INCOME TAXES		-			-
NET LOSS	$	(4,232,276	)	$	(1,019,878	)
BASIC AND DILUTED LOSS PER SHARE	$	(0.10	)		(0.07	)
BASIC AND DILUTED WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING		42,867,185			15,611,146

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

DIXIE FOODS INTERNATIONAL, INC.

PREFERRED RESTAURANT BRANDS, INC
(formerly Dixie Foods International, Inc.)
Consolidated Statements of Cash Flows
(Unaudited)

	For the Six Months Ended
	February 28,
	2015			2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(10,423,592	)	$	(1,351,408	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		617,106			410,182
Loss on sale of assets		63,280			-
Expenses paid on behalf of the Company by related parties		89,408			-
Amortization of debt discounts and debt issuance costs		254,942			519,718
Change in derivative liability		1,500,838			298,861
Common stock issued in connection with execution of notes payable		475,275			-
Common stock issued for services		965,017			-
Common stock and warrants granted for loan modifications		8,800			-
Fair value of stock options vested		1,627,015			23,826
Changes in operating assets and liabilities:
Accounts receivable		(48,689	)		(48,054	)
Food inventory		8,606			7,850
Prepaid expenses and other current assets		(151,647	)		8,406
Debt issuance costs		(157,754	)		-
Accounts payable and accrued expenses		2,796,004			(172,091	)
Deferred revenue		(28,794	)		35,425
Net Cash Used in Operating Activities		(2,404,185	)		(267,285	)

CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for purchases of property and equipment		(1,118,133	)		(503,808	)
Cash paid for territory and franchise rights		(37,500	)		(164,000	)
Cash paid for asset acquisitions		(328,032	)		-
Cash received in asset sales		25,000			-
Net Cash Used in Investing Activities		(1,458,665	)		(667,808	)

CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds on related party debt		1,115,664			421,321
Proceeds from notes payable		700,000			660,000
Repayments on notes payable		(858,419	)		(807,187	)
Proceeds from convertible notes payable		1,000,000			-
Proceeds from Class B membership units issued for cash		1,900,000			500,000
Net Cash Provided by Financing Activities		3,857,245			774,134

NET CHANGE IN CASH		(5,605	)		(160,959	)
CASH AT BEGINNING OF PERIOD		24,033			255,293

CASH AT END OF PERIOD	$	18,428		$	94,334

Consolidated Statements of Cash Flows

(Unaudited)

	For the Three Months Ended
	November 30,
	2014			2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	4,232,276		$	(1,019,878	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		316,225			140,595
Amortization of debt discounts and debt issuance costs		96,448			407,379
Expenses paid on behalf of the Company by related parties		36,291			-
Change in derivative liability		-			1,750
Warrants granted for services		526,316			-
Stock and warrants granted for loan modifications		8,800			-
Stock issued in connection with execution of notes payable		333,751			-
Fair value of stock options vested		818,001			-
Changes in operating assets and liabilities:
Accounts receivable		27,774			(38,167	)
Inventories		(15,634	)		11,284
Prepaid expenses and other current assets		(19,830	)		(33,264	)
Accounts payable and accrued expenses		1,107,356			595,614
Deferred revenue		(14,581	)		112,000
Net Cash Used in Operating Activities		(1,011,359	)		177,313
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment		(950,775	)		(239,248	)
Net Cash Used in Investing Activities		(950,775	)		(239,248	)
CASH FLOWS FROM FINANCING ACTIVITIES
Change in bank overdraft		103,686			-
Proceeds on related party debt		457,819			69,854
Payments on related party debt		(115,037	)		-
Proceeds on notes payable		400,000			(107,187	)
Payments on notes payable		(366,066	)		-
Proceeds from Class B membership units issued for cash		1,500,000			-
Net Cash Provided by Financing Activities		1,980,402			(37,333	)
NET INCREASE (DECREASE) IN CASH		18,268			(99,268	)
CASH AT BEGINNING OF PERIOD		24,033			255,293
CASH AT END OF PERIOD	$	42,301		$	156,025
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
CASH PAID FOR:
Interest	$	258,606		$	225,578
Income Taxes	$	-		$	-
NON-CASH FINANCING ACTIVITIES
Discounts on notes payable	$	83,450		$	-

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

DIXIE FOODS INTERNATIONAL, INC. AND SUBSIDIARY

PREFERRED RESTAURANT BRANDS, INC
(formerly Dixie Foods International, Inc.)
Consolidated Statements of Cash Flows
(Unaudited)

	For the Six Months Ended
	February 28,
	2015		2014

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

CASH PAID FOR:
Interest paid	$	-	$	-
Income taxes paid	$	-	$	-

NON-CASH INVESTING AND FINANCING ACTIVITIES:
Discounts on notes payable	$	83,450	$	-
Class B membership units issued for subscriptions receivable	$	600,000	$	-
Origination of derivative liabilities and issuance of preferred stock	$	182,190	$	-

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

PREFERRED RESTAURANT BRANDS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

NOTE 1—ORGANIZATION AND NATURE OF BUSINESS

~~Dixie~~Preferred ~~Foods~~Restaurant ~~International~~Brands, Inc. (the “Company”; OTCQB:”~~DIXI~~PRBI”) was formed in May 2010 as Dixie Foods, International, Inc. to operate a specialty food business for salad dressing, sauces and condiments. The Company was organized and still operates under the laws of the State of Florida. In November, 2014, the Company changed its name to “Preferred Restaurant Brands” and isrecently ineffected ~~process of effecting~~ that change with FINRA, the SEC and other regulatory authorities. The fiscal year end for the Company and all of its subsidiaries is August 31. The Company has aggregated its operations into one reportable segment.

On June 4, 2014, the Company completed the purchase (the “Reverse Acquisition”) of KCI Investments, LLC (“KCI”), a Nevada limited liability company headquartered in Las Vegas, Nevada. In connection with the Reverse Acquisition, the Company acquired 100% of the issued and outstanding membership interests of KCI from KCI Holding I, LLC ("KCI Holding"), and an entity that, until the consummation of the Reverse Acquisition, held 100% of the membership interests in KCI. Currently, all of the operations of the Company are conducted under KCI or one of KCI's subsidiaries.

KCI ~~Investments, LLC, a Nevada limited liability company headquartered in Las Vegas, Nevada,~~ was formed on November 8, 2004, but did not engage in any business operations until November 2010. Currently, KCI is engaged in developing, owning and operating a multi-brand chain of restaurants, currently under two franchise brands: Capriotti’s Sandwich Shops and Papa John’s. KCI also ~~owns~~operates and ~~operates~~is developing various other restaurant concepts. KCI and its various subsidiaries, currently operate 17 restaurants: 12, franchised Capriotti's Sandwich Shops; four franchised Papa John’s pizza restaurants, and Elements Kitchen & Martini Bar. Additionally, the Company has in various stages of development and construction: four Capriottis; eight Papa John’s; a new restaurant concept, and the Italian Steakhouse, all of which it anticipates opening over the next 12 months subject to access to additional capital.

·	9 franchised Capriotti's Sandwich Shops:

·	Six franchised Papa John’s pizza restaurants (four of which it opened in late 2014 and two of which it acquired in February 2014, and

·	Two proprietary, fine casual restaurants: Elements Kitchen & Martini Bar and Social Bistro & Wine Bar.

Additionally, the Company has in various stages of development and construction eight Papa John’s all of which it anticipates opening over the next 12 months subject to access to additional capital.

NOTE 2—GOING CONCERN

These financial statements have been prepared on a going concern basis, which implies that the Company will continue to realize its assets and discharge its liabilities in the normal course of business. As of ~~November~~February 3028, ~~2014~~2015, the Company has a working capital deficit of $1014,~~582~~445,~~341~~762 and an accumulated deficit of $2430,~~696~~887,~~243~~559. The continuation of the Company as a going concern is dependent upon the continued financial support from its management, and its ability to: identify future investment opportunities and obtain the necessary debt or equity financing and generate profitable operations from the Company’s future operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plan is to obtain such resources for the Company by obtaining debt and/or equity capital from existing and/or new investors and/or creditors sufficient to meet its ongoing operating expenses, pending transactions and growth plans. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 3—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Condensed Financial Statements

The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at ~~November~~February 3028, ~~2014~~ 2015 and for all periods presented have been made.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Company's August 31, 2014 audited financial statements. The results of operations for the periods ended ~~November~~February 3028, ~~2014~~2015 and ~~2013~~2014 are not necessarily indicative of the operating results for the full years.

Use of Estimates

The preparation of financial statements, in conformity with U.S. generally accepted accounting principles, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates under different assumptions or conditions.

Cash and Cash Equivalents

The Company considers all highly liquid investment instruments purchased with an initial maturity of three months or less to be cash equivalents.

Accounts Receivable

Accounts receivable primarily consists of receivables from undeposited funds from the Company’s credit card processor, third party gift card distributors, payroll-related tax receivables, vendor rebates and receivables arising from the normal course of business from catering sales. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable based on a specific review of account balances. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recoverability is considered remote.

Inventory

Inventory (consisting principally of food, beverages and supplies), is valued at the lower of first-in, first-out cost or market. Certain key ingredients bread, meats vegetables, cheeses and beverages are purchased from a small number of suppliers.

Revenue Recognition

Revenue from restaurant sales is recognized when food and beverage products are sold. The Company reports revenue net of sales and use taxes collected from customers and remitted to governmental taxing authorities.

Income Taxes

The Company accounts for income taxes in accordance with Accounting Standards Codification Topic 740, Income Taxes ("Topic 740"), which requires the recognition of deferred tax liabilities and assets at currently enacted tax rates for the expected future tax consequences of events that have been included in the financial statements or tax returns. A valuation allowance is recognized to reduce the net deferred tax asset to an amount that is more likely than not to be realized.

Topic 740 provides guidance on the accounting for uncertainty in income taxes recognized in a company's financial statements. Topic 740 requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements.

At the adoption date of November 1, 2007, the Company had no unrecognized tax benefit which would affect the effective tax rate if recognized. The Company includes interest and penalties arising from the underpayment of income taxes in the statements of operations in the provision for income taxes. As of ~~September~~February 3028, ~~2014~~2015 and ~~December~~August 31, ~~2013~~2014, the Company had no accrued interest or penalties related to uncertain tax positions. The Company files an income tax return in the U.S. federal jurisdiction and the state of California. With few exceptions, the Company is no longer subject to U.S. federal, state, and local, or non-U.S. income tax examinations by tax authorities for years before 2008.

Basic and Diluted Loss per Common Share

Basic loss per common share is calculated by dividing the Company’s net loss applicable to shareholders by the weighted average number of shares during the period. Diluted loss per share is calculated by dividing the Company’s net loss available to shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is adjusted for any potentially dilutive debt or equity. There were 15,~~177~~349,~~322~~676 such shares outstanding as of ~~November~~February 3028, ~~2014~~2015, which were excluded from the calculation of diluted loss per share as their effect would have been anti-dilutive.

New Accounting Pronouncements

The Company’s management has considered all recent accounting pronouncements. Management believes that these recent pronouncements will not have a material effect on the Company’s financial statements.

NOTE 4—PROPERTY AND EQUIPMENT

As of ~~November~~February 3028, ~~2014~~2015 and August 31, 2014 the Company’s property and equipment consisted of the following:

	November 30, 2014			August 31, 2014
	February 28, 2015			August 31, 2014
Building and leasehold improvements	$	3,~~761~~825,~~717~~917		$	3,161,646
Machinery and equipment		1,~~026~~050,~~345~~275			1,022,299
Furniture and fixtures		~~692~~830,~~548~~044			358,390
Less: Accumulated depreciation		(1,~~304~~482,~~467~~052	)		(1,123,592	)
Property and equipment, net	$	4,~~176~~224,~~143~~184		$	3,418,743

Depreciation expense included as a charge to income (including restaurant-related depreciation recorded in “Other operating costs (including Restaurant-Related Depreciation)” was $~~180~~358,~~875~~460 and $~~140~~295,~~595~~547 for the ~~three~~six-months ended ~~November~~February 3028, ~~2014~~2015 and ~~2013~~2014, respectively.

NOTE 5—INTANGIBLE ASSETS

Intangible assets represents capitalized prepaid territory rights and franchise fees paid. The costs are amortized over the remaining life of the contract executed with the franchisor.

NOTE 5—INTANGIBLE ASSETS (CONTINUED)

As of November 30, 2014 and August 31, 2014 the Company’s territory and franchise rights consisted of the following:

	November 30, 2014			August 31, 2014
Territory and franchise rights	$	1,931,194		$	1,926,194
Less: Accumulated amortization		(1,156,198	)		(1,028,348	)
Territory and franchise rights, net	$	774,996		$	897,846

Amortization expense on intangible assets included as a charge to income was $101,036 and $102,920 for the years ended November 30, 2014 and 2013, respectively.

Estimated amortization expense to be recorded for the next five years is as follows:

2015	$	332,122
2016		97,176
2017		97,176
2018		97,176
2019		97,176
Thereafter		54,170
Total future amortization	$	774,996

NOTE 6—RELATED PARTY TRANSACTIONS

As of August 31, 2014, the Company owed $-0- to related parties. During the three month period ended November 30, 2014, related parties made cash loans of $457,819 and paid for Company expenses of $36,291. The Company made cash repayments of $115,037, leaving an ending balance due of $379,073 due to related parties at November 30, 2014. All related party loans bear no interest, are unsecured and are due on demand.

The Company’s CEO, Kenneth Antos, has personally guaranteed virtually all the outstanding obligations due by the Company. This includes: virtually all of the outstanding notes payables on all loans; leases with the various landlords, and all of the obligations to franchisors.

NOTE 7—NOTES PAYABLE

As of November, 2014 and August, 2014 the Company’s notes payable consisted of the following:

	November 30,		August 31,
	2014		2014
Note payable bearing interest at 13.5% per annum, originated June 22, 2012, original maturity date of June 22, 2013. This note is in default and currently bears a default interest rate of 18.5%.	$	2,700,000	$	2,700,000
Note payable bearing interest at 12.0% per annum, originated December 27, 2012, original maturity date of December 27, 2013. This note is in default and currently bears a default interest rate of 17.0%.		950,000		1,000,000
Note payable originated October 2, 2014, original maturity date of October 16, 2014. This note is currently in default.		100,000		-
Note payable originated September 25, 2014, original maturity date of October 9, 2014. This note is currently in default.		100,000		-

NOTE 75—~~NOTES~~RESTAURANT ~~PAYABLE~~PURCHASES ~~(CONTINUED)~~AND SALES

Note payable bearing interest at 12.0% per annum, originated February 1, 2013, original maturity date of August 1, 2014. This note is in default and currently bears a default interest rate of 17.0%.		550,000			550,000
Notes Payable bearing interest at 7.4% per annum, originated July 11, 2014 maturity date of April 13, 2015.		85,801			126,577
Note payable bearing interest at 12.0% per annum, originated February 1, 2013, original maturity date of August 1, 2014. This note is in default and currently bears a default interest rate of 17.0%.		650,000			650,000
Notes payable bearing interest at 5.0% per annum, originated August 31, 2014, payable upon demand.		80,000			80,000
Note payable bearing interest at 12.0% per annum, originated February 1, 2013, original maturity date of August 1, 2014. This note is in default and currently bears a default interest rate of 17.0%.		800,000			800,000
Notes Payable bearing interest at 18.0% per annum originated May 8, 2014, payable upon demand.		225,000			250,000
Note payable bearing interest at 12.0% per annum, originated October 3, 2013, original maturity date of November 2, 2013. This note is in default and currently bears a default interest rate of 17.0%.		100,000			100,000
Note payable bearing interest at 13.3% per annum, originated August 28, 2013, original maturity date of February 28, 2014. This note is in default and currently bears a default interest rate of 18.3%.		90,000			90,000
Note payable bearing interest at 13.3% per annum, originated August 28, 2013, original maturity date of February 28, 2014. This note is in default and currently bears a default interest rate of 18.3%.		-			10,000
Note payable bearing interest at 10.0% per annum, originated December 4, 2013, due on October 15, 2014. This note is currently in default and bears a default interest rate of 15.0%.		560,000			560,000
Note payable bearing interest at 12.0% per annum, originated June 7, 2013, original maturity date of June 7, 2014		500,000			500,000
Total notes payable	$	7,490,801		$	7,866,299
Less: current portion		(7,496,681	)		(7,366,299	)
Long-term notes payable	$	500,000		$	500,000

Fresno and Clovis, California

On February 18, 2015, the Company consummated the acquisition of two franchised Papa John's locations in the Company's existing trade area in Northern California: one in Fresno, CA and the other in Clovis, CA. In total the Company paid the seller $329,032 in cash.

The total purchase price was allocated as follows:

Consideration paid:
Cash paid	$	329,032
Total purchase price	$	329,032

Consideration received:
Cash	$	1,000
Inventory		8,032
Other current assets		8,784
Property and equipment, leasehold improvements		120,000
Intangible assets – franchise rights		191,216
Total Assets Acquired	$	329,032

Green Valley Ranch, Las Vegas

On February 19, 2015, the Company consummated the sale of its Green Valley Ranch Capriotti’s Sandwich Shop to a franchisee of Capriotti’s Sandwich Shops. Pursuant to the asset purchase agreement, the sale price of the assets consisted of a one-time payment of $25,000 in cash.

The total purchase price was allocated as follows:

Consideration paid:
Cash paid	$	25,000
Forgiveness of rent payable		25,160
Total purchase price	$	50,160

Consideration received:
Other current assets	$	4,000
Property and equipment, leasehold improvements, net		27,487
Intangible assets, franchise rights, net		81,954
Loss on sale of assets		(63,281	)
Total assets acquired	$	50,160

NOTE 6—INTANGIBLE ASSETS

Intangible assets represents capitalized prepaid territory rights and franchise fees paid. The costs are amortized over the remaining life of the contract executed with the franchisor.

As of February 28, 2015 and August 31, 2014 the Company’s territory and franchise rights consisted of the following:

NOTE 7—NOTES PAYABLE (CONTINUED)

	February 28, 2015			August 31, 2014
Territory and franchise rights	$	2,058,595		$	1,926,194
Less: Accumulated amortization		(1,225,887	)		(1,028,348	)
Territory and franchise rights, net	$	832,708		$	897,846

~~Secured~~Amortization ~~Borrowings~~expense on intangible assets included as a charge to income was $197,539 and $114,635 for the six-month periods ended February 28, 2015 and 2014, respectively.

OnEstimated ~~August~~amortization ~~11,~~expense ~~2014, the Company entered into three financing arrangements with a third party for a combined principal amount of $470,000. The terms of the arrangement require the Company~~ to ~~pay~~be ~~the~~recorded ~~$470,000 principal balance plus an additional $169,200~~ for ~~total remittance of $639,200. The terms of repayment require~~ the ~~Company~~next tofive ~~remit~~years tois ~~the lender 24 percent of all future receivables arising from credit card, debit card and prepaid transactions until such time~~ as ~~the total remittance is paid in full. This borrowing is secured by the assets of the Company.~~follows:

The additional $169,200 will be recognized as interest expense over the estimated term of the agreement. The term is not fixed due to the variable repayment terms; however, management currently estimates such term to be approximately 11 months. The ending principal balance of these borrowings at November 30, 2014 and August 31, 2013 was $400,346 and $611,621, respectively.

2015	$	210,358
2016		137,015
2017		137,015
2018		137,015
2019		137,015
Thereafter		74,289
Total future amortization	$	832,708

OnNOTE ~~October~~7—RELATED ~~28,~~PARTY 2014 and November 3, 2014, the Company entered into two financing arrangements with two separate third parties for a combined principal amount of $200,000. The terms of the arrangements require the Company to pay the $200,000 principal balance plus an additional $83,450 for total remittance of $283,450. The terms of repayment require the Company to remit to the lender average of 15 percent of all future receivables arising from credit card, debit card and prepaid transactions until such time as the total remittance is paid in full. This borrowing is secured by the assets of the Company.TRANSACTIONS

~~The~~As ~~additional~~of ~~$83~~August 31,~~450~~ ~~will~~2014, bethe ~~recognized as~~Company ~~interest~~owed ~~expense~~$-0- ~~over~~to ~~the~~related ~~estimated~~parties. ~~term~~During of the ~~agreement. The~~six ~~term~~month isperiod ~~not~~ended ~~fixed~~February ~~due~~28, to2015, ~~the~~related ~~variable~~parties ~~repayment~~made ~~terms, however~~cash ~~management~~loans ~~currently~~of ~~estimates~~$1,573,591 ~~such~~and ~~term~~paid tofor beCompany ~~approximately~~expenses 11of ~~months~~$89,408. The ~~ending~~Company ~~principal~~made cash repayments of $457,927, leaving an ending balance due of ~~these~~$1,205,072 ~~borrowings~~ due to related parties at ~~November~~February 3028, ~~2014~~2015. ~~was~~All ~~$254~~related party loans bear no interest,~~435~~ are unsecured and are due on demand.

~~NOTE~~The ~~8—CONVERTIBLE~~Company’s ~~NOTES~~CEO, ~~PAYABLE~~Kenneth Antos, has personally guaranteed virtually all the outstanding obligations due by the Company. This includes: virtually all of the outstanding notes payables on all loans; leases with the various landlords, and all of the Company's obligations to franchisors.

As of November 30, 2014 and August 31, 2014 the Company’s convertible notes payable consisted of the following:

	November 30,		August 31,
	2014		2014
Convertible note payable bearing interest at 10.0% per annum, originated April 23, 2012, original maturity date of April 23, 2017. The note is convertible into common shares of the Company at $1.00 per share.	$	500,000	$	500,000
Convertible note payable bearing interest at 9.0% per annum, originated July 25, 2013, original maturity date of July 25, 2018. The note is convertible into common shares of the Company at $1.50 per share.		50,000		50,000
Convertible note payable bearing interest at the market interest rate plus 6.0% per annum, originated May 1, 2012, original maturity date of May 1, 2015. The note is convertible into common shares of the Company at $0.30 per share.		300,000		300,000
Total notes payable	$	850,000	$	850,000
Less: current portion		300,000		300,000
Long-term convertible notes payable	$	550,000	$	550,000

The intrinsic value of the beneficial conversion feature and the debt discount associated with all convertible debts were recorded based on the relative fair value of the equity in relation to the debt in accordance with ASC 470. The total initial beneficial conversion feature recorded for the convertible notes equaled $150,000 on December 15, 2011 which had been fully amortization to interest expense as of the beginning of the periods presented.

NOTE 98—~~DERIVATIVE~~NOTES ~~LIABILITY~~PAYABLE

~~Effective~~As ~~July 31, 2009, the Company adopted ASC 815 which defines determining whether an instrument (or embedded feature) is solely indexed to an entity’s own stock. The exercise price~~ of ~~certain~~February ~~warrants granted during the period ended November 30~~28, ~~2014~~2015 ~~are variable~~ and ~~subject to the fair value of the Company’s common stock on the date of exercise. As a result~~August, ~~the~~2014 ~~Company has determined that~~ the ~~exercise feature is not considered to be solely indexed to the~~ Company’s ~~own~~notes ~~stock~~payable ~~and~~consisted ~~is therefore not afforded equity treatment. In accordance with ASC 815, the Company has bifurcated the exercise feature~~ of the ~~instruments to be recorded as a derivative liability.~~following:

	February 28,		August 31,
	2015		2014
Note payable bearing interest at 13.5% per annum, originated June 22, 2012, original maturity date of June 22, 2013. This note bears a default interest rate of 18.5%*.	$	2,950,000	$	2,700,000

Note payable bearing interest at 12.0% per annum, originated December 27, 2012, original maturity date of December 27, 2013. This note is in default and currently bears a default interest rate of 17.0% plus late fees1.		1,000,000		1,000,000

Note payable bearing interest at 12.0% per annum, originated February 1, 2013, original maturity date of August 1, 2014. This note is in default and currently bears a default interest rate of 17.0% plus late fees¹.		550,000		550,000

Note payable bearing interest at 12.0% per annum, originated February 1, 2013, original maturity date of August 1, 2014. This note is in default and currently bears a default interest rate of 17.0% plus late fees¹.		650,000		650,000

Note payable bearing interest at 12.0% per annum, originated February 1, 2013, original maturity date of August 1, 2014. This note is in default and currently bears a default interest rate of 17.0% plus late fees¹.		800,000		800,000

Note payable bearing interest at 12.0% per annum, originated October 30, 2013, original maturity date of November 30, 2013. This note is in default and currently bears a default interest rate of 17.0% plus late fees¹.		99,166		99,166

Note payable bearing interest at 13.3% per annum, originated August 13, 2013, original maturity date of August 1, 2014. This note is in default and currently bears a default interest rate of 18.3% plus late fees¹.		90,000		90,000

Note payable bearing interest at 12.0% per annum, originated June 7, 2013, original maturity date of June 7, 2016. This note is in default and currently bears a default interest rate of 17.0% plus late fees ¹.		500,000		500,000

Note payable bearing interest at 12% per annum, originated August 24, 2013, original maturity date of October 24, 2014. This note is in default and currently bears a default interest rate of 18.3% plus late fees¹.		8, 656		8,656

Note payable originated October 2, 2014, original maturity date of October 16, 2014, interest obligation of $5,000.		100,000		-

Note payable bearing interest at 10.0% per annum, originated December 4, 2013, due on October 15, 2014. This note is currently in default and bears a default interest rate of 15.0%.		560,000		560,000

Notes payable bearing interest at 5.0% per annum, originated August 31, 2014, payable upon demand.		80,000		80,000

Notes Payable bearing interest at 18.0% per annum originated May 8, 2014, payable upon demand.		225,000		250,000

Notes Payable bearing interest at 7.4% per annum, originated July 11, 2014 maturity date of April 13, 2015.		53,662		126,577

Secured borrowings		222,666		449,722

Total notes payable	$	7,889,150	$	7,866,299
Less: current-term portion of notes payable		(7,839,150)		(7,366,299)
Long-term notes payable	$	500,000	$	500,000

1Each of these notes is to either: a former director or to various trusts related to but not controlled by that party. Those parties collectively own more than 21% of the Company's common stock.

In addition to the notes payable noted in the table above, on September 25, 2014, the Company entered into a note payable with a principal balance of $100,000, bearing an interest obligation of $5,000 per annum and due on October 9, 2014. The note was repaid in full during the period ended February 28, 2015 through the payment of $100,000 in cash.

Secured Borrowings

As of February 28, 2015, the Company has entered into various accounts receivable financing arrangements with third parties for a combined principal amount received in cash of $670,000. The terms of the arrangements require the Company to repay the principal balance plus an additional $252,650 for total remittance of $922,650. The terms of repayment require the Company to remit to the lender between 15 and 24 percent of all future receivables arising from credit card, debit card and prepaid transactions until such time as the total remittance is paid in full. These borrowing is secured by the assets of the Company.

The additional $252,650 will be recognized as interest expense over the estimated terms of the agreements. The terms are not fixed due to the variable repayment terms; however, management currently estimates such terms to be between approximately two (2) and eight (8) months. The ending principal balance of these borrowings at February 28, 2015 and August 31, 2014 was $222,666 and $449,722, respectively (debt of debt discounts of $64,079 and $161,899, respectively).

NOTE 9—CONVERTIBLE NOTES PAYABLE

As of February 28, 2015 and August 31, 2014 the Company’s convertible notes payable consisted of the following:

	February 28,		August 31,
	2015		2014
Convertible note payable bearing interest at 10.0% per annum, originated April 23, 2012, original maturity date of April 23, 2017. The note is convertible into common shares of the Company at $1.00 per share.	$	550,000	$	550,000

Convertible note payable bearing interest at 9.0% per annum, originated July 25, 2013, original maturity date of July 25, 2018. The note is convertible into common shares of the Company at $1.50 per share.		50,000		50,000

Convertible note payable bearing interest at the market interest rate plus 6.4% per annum, originated May 1, 2012, original maturity date of May 1, 2015. The note is convertible into common shares of the Company at $0.30 per share.		300,000		300,000

Convertible note payable bearing interest at 12.0% per annum, originated February 17, 2015, maturity date of February 16, 2016. The note is convertible upon the occurrence and continuance of an event of default for a 15 day period at 85 percent of the lowest average daily volume weighted average price of the Company’s common shares during the five trading days immediately prior to the date of conversion.		1,000,000		1,000,000

Total convertible notes payable	$	1,850,000	$	850,000
Less: current portion		(1,300,000)		(300,000)
Long-term convertible notes payable	$	550,000	$	550,000

In addition to the notes payable noted in the table above, on December 31, 2014, the Company entered into a convertible note payable with a principal balance of $100,000, bearing interest at 18.0% per annum and due on demand. The note was convertible into common shares of the Company at the 65% of the lowest average daily volume weighted average price of the Company’s common shares during the fifteen trading days immediately prior to the date of conversion. The note was repaid in full during the period ended February 28, 2015 through the payment of $110,000 in cash, inclusive of $10,000 of interest.

The intrinsic value of the beneficial conversion feature and the debt discount associated with the convertible debts were recorded based on the relative fair value of the equity in relation to the debt in accordance with ASC 470. The total initial beneficial conversion feature recorded for the convertible notes equaled $182,190, of which $75,890 was amortized or recorded to interest expense in connection with convertible note retirements, leaving an ending balance of $106,300 in discounts on convertible notes payable.

NOTE 10—DERIVATIVE LIABILITY

The Company has adopted ASC 815, which defines determining whether an instrument (or embedded feature) is solely indexed to an entity’s own stock. The exercise price of certain warrants granted and embedded conversion options on convertible debt issued during the period ended February 28, 2015 are variable and subject to the fair value of the Company’s common stock on the date of conversion or exercise. As a result, the Company has determined that the exercise and conversion features do not contain an explicit limit on the number of shares required to be and are therefore not afforded equity treatment. In accordance with ASC 815, the Company has classified the freestanding warrants and bifurcated the conversion features of the instruments to be recorded as derivative liabilities.

ASC 815 requires Company management to assess the fair market value of derivatives at each reporting period and recognize any change in the fair market value as items of other income or expense. The Company’s only asset or liability measured at fair value on a recurring basis is its derivative liability associated with these warrants.

At origination and subsequent revaluations, the Company valued the derivative liability using the Black-Scholes options pricing model under the following assumptions:

			November 30, 2014
			February 28, 2015
Risk-free interest rate			10.4522% – 1.4961%
Expected options life			400.873 – 5.00
Expected dividend yield			-
Expected price volatility			~~523~~74% – ~~538~~241%

During the six-month period ended ~~November~~February 3028, ~~2014~~2015, the Company’s derivative liability ~~remained~~increased ~~constant~~from at$-0- to $~~526~~1,~~316~~562,718, ~~and~~ recognized noa gain ~~or loss~~ on derivative liability of $808,240 in conjunction with settlement of convertible notes payable, additions of new derivative liabilities and subsequent revaluations of existing derivative liabilities.

~~NOTE~~During ~~10—CLASS~~the Byear ~~MEMBERSHIP~~ended ~~UNITS~~August 31, 2014, the Company’s derivative liability decreased from $604,553 to $-0- and recognized a gain on derivative liability of $604,553 in conjunction with settlement of convertible notes payable, additions of new derivative liabilities and subsequent revaluations of existing derivative liabilities.

The Company’s subsidiaries, KCI Restaurant I, LLC (“Restaurant I”), KCI Restaurant II, LLC (“Restaurant II”), PRB I, LLC (“PRB I”) and PRB II, LLC (“PRB II”) are authorized to issue up to 2 Class B membership units with no par value each, of which 5 and 2 units were issued and outstanding as of November 30, 2014 and August 31, 2014, respectively.15

~~Each~~NOTE ~~Class~~11—CLASS B ~~membership~~MEMBERSHIP unit was sold for $500,000, plus $60,000 for administrative costs payable to third parties. Each unit carries equal voting rights to the Class A membership units of each subsidiary. Each Class B unit is entitled to receive distributions equal to 0.5 percent of the value of the units held each year.UNITS

The Company is authorized to issue up to eight (8) Class B membership units with no par value. As of February 28, 2015 and August 31, 2014, there were seven (7) and two (2) shares of Class B membership units issued and outstanding, respectively.

In all cases noted above, each Class B membership unit was sold for $500,000, plus for administrative costs payable to third parties. Each unit carries equal voting rights to the Class A membership units of each subsidiary. Each Class B unit is entitled to receive distributions equal to 0.5 percent to 3.0 percent of the value of the units held each year.

Adjudication and Redemption of Class B Membership Units

The Class B membership units are linked to approval of an EB-5 Visa, which requires a foreign investor to invest $1,000,000 (or at least $500,000 in a "Targeted Employment Area" - high unemployment or rural area), in projects that create at least 10 jobs for U.S. workers. The terms of the instrument state that the Class B membership units have aan ~~five-year~~indefinite life; ~~but that~~however, once adjudication is reached in the EB-5 Visa approval process, the managing member of the LLC may, in its sole discretion, elect to have the Company purchase, for fair market value, the unit holders Class B Units at any time following an offer by such member to sell his or her Class B Units. This election is optional on the part of the managing member and member has no rights to cause the managing member or the Company to repurchase or redeem such member’s Class B unit. As such, the units (1) are not mandatorily redeemable, (2) are redeemable at the sole discretion of the Company and (3) not redeemable at the sole option of the unit holder and the redemption must be agreed to by Company.

Denial of I-526 Petition

If the member’s I-526 Petition is denied with respect to that member’s investment in the company, and the member has not been previously expelled from the company, the member has the right, within fifteen days following the date of the I-526 Denial, to request that the company cancel that member’s entire interest in the Company and which time the Company will return the member’s capital contribution and administrative fee, without interest. As such and as the Class B units are not entitled to the distribution of profits and losses, the redeemable value of the membership interest are presented in the mezzanine section of the balance until such time as the I-526 petition is successfully approved after they value of the shares will be moved into permanent equity. No adjustments for ~~noncontrolling~~non-controlling interests have been made.

During the six ~~three~~ months ended ~~November 30~~February 28, ~~2014~~2015, Company subsidiaries issued ~~three~~five (35) Class B membership units in exchange for total cash proceeds of $1,~~680~~900,000 and subscriptions receivable of $600,000 (not inclusive of $~~180~~300,000 received for administrative fees due and payable to third parties). Subsequent to the period end the subscriptions receivable had been fully satisfied through the receipt of $600,000 in cash.

During the year ended August 31, 2014, Company subsidiaries issued two (2) Class B membership units in exchange for total cash proceeds of $1,120,000 (inclusive of $60120,000 received for administrative fees due and payable to third parties).

NOTE 1112—STOCKHOLDERS’ DEFICIT

The Company’s authorized capital stock consists of 150,000,000 shares of common stock, $0.001 par value per share, and 15,000,000 shares of preferred stock, par value $0.001 per share. As of ~~November~~February 3028, ~~2014~~2015 and August 31, 2013, there were 4245,~~993~~633,~~475~~262 and 42,570,975 shares of common stock issued and outstanding, respectively, and one (1) and zero shares of Series B preferred stock issued and outstanding, respectively.

Preferred Stock

Our board of directors has the authority, without stockholder approval, to issue up to 1514,~~000~~999,~~000~~999 shares of preferred stock, $0.001 par value. The authorized preferred stock may be issued by the Board of Directors in one or more series and with the rights, privileges and limitations of the preferred stock determined by the Board of Directors. The rights, preferences, powers and limitations on different series of preferred stock may differ with respect to dividend rates, amounts payable on liquidation, voting rights, conversion rights, redemption provisions, sinking fund provisions, and other matters.

Series B Preferred Stock

The Company is authorized to issue one (1) share of Series B Preferred Stock with a stated value of $1.00 and a par value of $0.001. The terms of the Series B Preferred Stock are as follows:

(i)	Dividends – At issuance, there are no dividends due or payable on the Series B Preferred Stock. Any future terms with respect to dividends shall be determined by Board, consistent with the Company’s certificate of incorporation.

(ii)	Liquidation and Redemption Rights - In the event of any liquidation, dissolution or winding up of the affairs of the Company, whether voluntary or involuntary, the holder of Series B Preferred Stock is be entitled to receive assets of the Company, on parity with the holders Common Stock. The Series B Preferred shall not have any priority or preference with respect to any distribution of any Company assets.

(iii)	Rank – All shares of the Series B Preferred Stock rank:

a.	Senior to the Company’s common stock and any other class or series of capital stock of the Company subsequently created,

b.	Equal with any class or series of capital stock of the Company subsequently created,

c.	Junior to any class or series of capital stock of the Company subsequently created which are specifically designated to be ranked senior to the Series B Preferred Stock

(iv)	Upon an event of default in the convertible note payable executed in connection with the issuance of the share of Series B Preferred Stock, the share of Series B Preferred Stock has voting rights equal to the total issued and outstanding common stock eligible to vote at the time of the respective vote divided by forty nine one-hundredths (0.49) minus the total issued and outstanding shares of common stock eligible to vote at the time of the respective vote.

There were no shares of Series B Preferred Shares outstanding at any time during the year ended February 28, 2015. During the six-month period February 28, 2015, the Company issued one (1) share of Series B preferred stock to a creditor in connection with the execution of a convertible note payable. In accordance with ASC 815 and ASC 470, the proceeds from the issuance of the convertible note payable were allocated between the embedded conversion option of the convertible note payable deemed to require derivative accounting due to its variable nature (as discussed in Note 9), and the host debt instrument and the preferred stock. The derivative was recorded at its fair value of $5,975 with the remaining proceeds of $1,000,000 being allocated between the preferred stock and host debt instrument based upon their relative fair values. The fair value of the preferred stock was determined by valuing the voting interest to which it would control upon default and then probability adjusting such valuation for the risk of default. The resulting allocation of proceeds attributed $118,024 to this preferred stock issuance.

Common Stock

During the ~~three~~ six-months period ended ~~November 30,~~February ~~2014~~28, ~~in connection with the extension of certain agreements related to the Reverse Acquisition~~2015, the Company issued ~~to certain shareholders of~~ the ~~Company,~~following ~~all of whom were shareholders prior to the Reverse Acquisition, 10,000~~ shares of its common stock ~~of the Company.~~:

§ In connection with the extension of certain agreements related to the reverse acquisition, the Company issued to certain shareholders of the Company, all of whom were shareholders prior to the reverse acquisition, 10,000 shares of common stock of the Company valued at $8,800. The value of the common stock was based on the market price of the stock on the date of issuance. § In connection with short-term loans made to the Company by two separate entities, ~~the~~(one ~~Company~~of ~~agreed~~which towas ~~issue~~repaid ~~shares~~in offull ~~common~~during ~~stock~~the toperiod ~~each~~ended ~~lender.~~February ~~For~~28, 2015), the Company agreed that, for each two weeks that each such loan remains outstanding, the Company is required to issue ~~another~~ 37,500 shares of its ~~Common~~common ~~Stock~~stock - in addition to an initial grant of 37,500 shares to each lender. ToDuring ~~date~~the six-month period ended February 28, 2015, the Company ~~has~~ issued ~~412~~828,~~500~~750 shares valued at $475,275 in connection with these two loans. The value of the common stock was based on the market price of the stock on the date of issuance and has been recorded as interest expense in the Company’s statement of operations. § The Company issued 2,223,537 shares of common stock to various entities and individuals for services valued at $965,017. The value of the common stock was based on the market price of the stock on the date of issuance.

During the year ended August 31, 2014, the Company issued 26,959,829 shares of common stock as follows:

Description	Shares Issued
Common stock issued for cash proceeds of $3,378,000		7,193,654
Common stock issued for services of $911,569		2,045,163
Cash received for exercise of options and warrants at $0.03 per share		3,909,226
Common stock issued for debt issuance costs		1,587,738
Common stock issued for debt modifications		1,373,914
Cash received and services credited for exercise of options and warrants at $0.03 per share		2,884,134
Common stock issued in reverse recapitalization		8,006,000
Total		26,959,829

14NOTE 13—STOCK OPTIONS AND WARRANTS

NOTE 12—STOCK OPTIONS AND WARRANTS

Stock Options

During the ~~year~~six-month ~~ended~~period ~~August~~February 3128, ~~2014~~2015, the Company granted ~~9,573,604~~no ~~options~~new ~~to purchase common stock at $0.50 per share to the Company employees and consultants. 1,477,687~~ options ~~vested immediately and 8,095,917 options vested 1/3 on each grant anniversary date for the subsequent three years. All options issued in 2014 expire on August 30, 2024. Subsequent~~ to ~~August~~acquire ~~31,~~its ~~2014,~~common ~~100,000 of the nonvested options granted have been rescinded, thus, leaving 9,473,604~~ stock ~~options outstanding and 1,477,686 stock options exercisable~~.

~~Stock~~During ~~compensation~~the ~~expense~~year isended ~~recognized on~~August a31, ~~pro-rata~~2014, ~~basis~~the ~~over~~Company ~~the~~granted ~~vesting~~9,573,604 ~~period~~options ofto purchase common stock at $0.50 per share to the ~~options~~Company employees and consultants. ~~During~~1,477,687 options vested immediately and 8,095,917 options vested 1/3 on each grant anniversary date for the subsequent three ~~month~~years. ~~period~~All ~~ended~~options ~~November~~granted in 2014 expire on August 30, ~~2014~~2024. ~~the~~Subsequent ~~Company~~to ~~recognized $818~~August 31,~~001~~ in2014, ~~compensation~~100,000 ~~expense~~of ~~arising~~the ~~from~~non-vested options ~~issued~~granted have been rescinded, thus, leaving $9,~~064~~473,~~973~~604 ~~of compensation expense on~~ stock options tooutstanding ~~be recognized~~and ~~subsequent~~1,477,686 tostock ~~November~~options ~~30, 2014~~exercisable.

Stock compensation expense is recognized on a pro-rata basis over the vesting period of the options. During the three month period ended February 28, 2015 the Company recognized $1,627,015 in compensation expense arising from options issued, leaving $8,255,959 of compensation expense on stock options to be recognized subsequent to February 28, 2015.

Warrants

During the six-month period ended ~~November~~February 3028, ~~2014~~2015, the Company ~~issued~~granted ~~692~~2,892,521 warrants to creditors and service providers to acquire its common stock:.

During the year ended August 31, 2014, the Company granted 25,358,996 warrants to acquire its common stock. The warrants were granted in connection with existing debt arrangements and the fair value of the warrants were recorded as interest expense during the period. In connection with the reverse recapitalization which took effect on June 4, 2014, 28,824,069 options to purchase membership units in KCI Investments, LLC were cancelled.

In applying the Black-Scholes options pricing model to the options and warrant grants, the fair value of our share-based awards granted were estimated using the following assumptions for the periods indicated below:

	November 30, 2014	~~November 30, 2014~~
Risk-free interest rate		1.45% – 1.49%	%
Expected options life		4.87 – 5.00
Expected dividend yield		-
Expected price volatility		523% – 538%	%

A summary of the status of the Company’s stock options as of ~~November~~February 3028, ~~2014~~2015 and changes during the periods ended ~~November~~February 3028, ~~2014~~2015 and ~~2013~~August 31, 2014 is presented below:

	Number of Options and Warrants
Outstanding at August 31, 2013		14,648,407
Options and warrants granted		41,245,400
Options and warrants exercised		(947,825	)
Options and warrants forfeited, cancelled or expired		(47,339,044	)
Outstanding at August 31, 2014		9,573,604
Options and warrants granted		~~691~~2,892,521
Options and warrants exercised		-
Options and warrants forfeited or expired		(100,000	)
Outstanding at November 30, 2014		10,166,125
Outstanding at February 28, 2015		12,366,125
Exercisable at November 30, 2014		24,~~170~~370,207

15The following table summarizes information about options and warrants as of February 28, 2015:

~~The following table summarizes information about options and warrants as of November 30, 2014:~~19

		Options and Warrants Outstanding	~~Options and Warrants Outstanding~~			Options and Warrants Exercisable					~~Options and Warrants Exercisable~~
Range of Exercise Prices		Number Outstanding	~~Number~~Weighted ~~Outstanding~~Average Remaining Contractual Life (in years)		Weighted Average Exercise Price	~~Weighted~~Number ~~Average Remaining Contractual Life (in years)~~Exercisable		Weighted Average Exercise Price	~~Weighted Average Exercise Price~~		~~Number Exercisable~~		~~Weighted Average Exercise Price~~
$	0.50			9,473,604			4.67		$	0.50		1,477,686	$	0.50
$0.01 to $0.40		500,000	4.90		$0.40	500,000		$0.40
$	0.72			691,521			4.79		$	0.72		691,521	$	0.72
$0.41 to $0.60		9,723,604	4.46		$0.50	1,727,686		$0.50
				10,166,125			4.67		$	0.51		2,170,207	$	0.57
$0.61 and up		2,142,521	4.75		$0.80	2,142,521		$0.80
		12,366,125	4.53		$0.55	4,370,207		$0.64

NOTE 1214—~~SUBSEQUENT~~FAIR ~~EVENTS~~VALUE MEASUREMENTS

~~New~~ The ~~Store~~company ~~Openings~~uses the Black-Sholes model to calculate the fair value of the derivative liability.

~~Subsequent~~Our tofinancial ~~November~~assets ~~30,~~and ~~2014,~~(liabilities) ~~the~~carried ~~Company, on~~at ~~December~~fair ~~26,~~value ~~2014,~~measured ~~opened~~on ~~its~~a ~~third~~recurring ~~and~~basis ~~fourth~~as ~~franchised~~of ~~Papa~~February ~~John's locations~~28, ~~8300~~2015 ~~Sierra College Blvd. in Roseville California~~ and ~~3842~~2014, ~~West~~consisted ~~Shaw~~of inthe ~~Fresno, California.~~following:

Other Pending Operating-Related Transactions

				Fair Value Measurements Using
Description	Total Fair Value at February 28, 2015			Quoted Prices in Active Markets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)

Derivative liability		$	1,562,718		$	-		$	1,562,718		-

Subsequent to November 30, 2014 the Company:

Fair Value Measurements Using

Description

Total Fair

Value at

August 31,

2014

Quoted

Prices in

Active

Markets

(Level 1)

Significant

Other

Observable

Inputs

(Level 2)

Significant

Unobservable

Inputs

(Level 3)

Derivative liability

§NOTE ~~Signed~~15—SUBSEQUENT ~~leases to open what, as of this date, cumulatively totals eight additional, franchised Papa John's locations in Northern California;~~EVENTS

§Store ~~Entered into a definitive agreement to acquire two franchised Papa John's locations in Northern California, both of which currently are open and operating, and~~Closings

§On ~~Entered~~March ~~into~~13, a2015, ~~series~~the ofCompany ~~definitive agreements: to take over a previously-~~closed ~~restaurant~~its ~~space~~Capriotti's inSandwich ~~high-end~~Shop ~~retail center~~ in ~~the~~San ~~Summerlin~~Marcos, ~~area~~California. ofOn ~~Las~~April ~~Vegas~~8, ~~Nevada;~~2015, ~~enter~~the ~~into~~Company aclosed ~~new~~its ~~lease~~Capriotti's ~~with~~Sandwich ~~the~~Shop ~~landlord,~~in ~~and~~San ~~open~~Diego, upCalifornia. aNeither ~~new~~location ~~restaurant~~was ~~concept~~profitable. ~~Upon~~The ~~completion of various requirements of the Seller, the~~ Company ~~shall~~currently ~~issue~~is toexploring ~~the~~alternative ~~Seller~~restaurant ~~50,000~~concepts ~~share~~for ofthose ~~the Company’s Common Stock~~locations.

1620

~~Note~~Capriotti's ~~that, as of this date:~~Relationship

§On ~~Construction~~June ~~has~~29, ~~commenced~~2015, ~~construction~~the ~~for~~Company ~~one~~consummated ofan ~~the~~agreement ~~Papa~~with ~~John~~Capriotti's ~~locations~~Sandwich ~~under~~Shops, ~~lease~~Inc., ~~(in~~the ~~addition~~franchisor toof the ~~four~~Company's ~~already~~Capriotti's ~~operating);~~Sandwich Sho+ps, whereby:

§· ~~The~~Capriotti's ~~Company~~Sandwich ~~currently~~Shops, ~~anticipated~~Inc. ~~consummating~~and the ~~pending~~Company ~~acquisition~~have ofagreed to terminate the Franchise Agreements and Area Development Agreements between these two ~~operating~~parties; ~~Papa~~· ~~John~~the Company will continue to operate its existing Capriotti's ~~locations~~Sandwich ~~within~~Shops induring a mutually-agreed transition period, and · the ~~next~~Company ~~few~~will ~~months~~have an agreed time-frame ~~subject~~to either sell its existing Capriotti's Sandwich Shops (some of which Capriotti's Sandwich Shops, Inc. has expressed interest in acquiring) or convert some of them to ~~access~~restaurants not under the Capriotti’s brand but under a brand proprietary to ~~financing,~~the ~~and~~Company.

§Financing-Related ~~The Company currently anticipates opening its new restaurant concept before the end of March 2015 – subject to access to additional financing.~~Transactions

~~The~~On April 21, 2015, the Company entered into a $190,000 inshort-term ~~December~~convertible ~~2014~~note, ~~closed~~bearing ~~one of~~interest ~~its~~at ~~locations~~22 inpercent ~~Texas~~and convertible at the lower of $0.0001 ~~The~~per share or 50 percent of the lowest intra-day trading price for the Company’s iscommon instock ~~negotiations~~during ten (10) trading days immediately prior to ~~sublet~~the date of conversion. As additional consideration for this loan the ~~space~~Company issued to ~~another~~the ~~business~~lenders ~~and~~250,000 isshares ~~moving~~of the ~~equipment~~Company's ~~and as~~common ~~much~~stock. asOn ~~possible~~May of31, 2015, this note went into default due to non-payment and the ~~tenant~~Company ~~improvements~~issued an additional 150,000 shares of common stock to ~~another~~the ~~Capriotti's~~lender ~~location~~to ~~currently~~extend ~~under~~the ~~construction~~maturity date.

~~The~~On ~~Company~~April ~~previously~~21, ~~announced that it would be opening various concept restaurants in partnership with Chef Alex Stratta. In early December 2014~~2015, the Company ~~ended~~issued ~~its relationship~~60,000 ~~with~~shares ~~Stratta.~~of ~~The~~common ~~Company~~stock ~~still intends~~ to ~~open~~various ~~these~~entities ~~restaurants~~ and ~~explore~~individuals ~~opening~~for ~~other,~~services ~~unique~~valued ~~concepts~~at ~~that it~~approximately ~~can~~$18,000. ~~open~~The ~~and~~value ~~then~~of ~~replicable~~the incommon ~~multiple~~stock ~~locations~~was ~~and~~based ~~multiple~~on ~~markets.~~the ~~The~~market ~~opening~~price of ~~these~~the ~~restaurants,~~stock ason ~~well~~the asdate ~~future concepts,~~of ~~is subject to access to additional financing~~issuance.

~~Name~~On ~~Change~~April 24, 2015, the Company issued one (1) share of Class B membership units in exchange for $500,000 plus $60,000 for administrative expenses due to third parties, $250,000 of which has been received as of filing date of these financial statements. The Company also received $600,000 in full satisfaction of subscriptions receivable outstanding at February 28, 2015.

~~The~~On ~~Company,~~April ~~on November 17~~28, ~~2014~~2015, ~~announced that~~the itCompany ~~has~~granted ~~changed~~250,000 ~~its~~five-year ~~name~~warrants to ~~"Preferred~~acquire ~~Restaurant~~common ~~Brands".~~shares As of ~~this date,~~ the Company isat inan ~~the~~exercise ~~process~~price of ~~filing documents with FINRA, the Securities and Exchange Commission and other required regulatory bodies to effect this change~~$0.50 ~~The~~per ~~Company intends~~share to ~~submit this change to a vote of shareholders either at its next-scheduled shareholder meeting or through~~ an ~~information statement~~employee ~~(which~~for ~~will~~services ~~note that shareholders representing more than 95% of the Company's common stock have approved the name change~~provided.

~~Capriotti~~On June 19, 2015, the Company entered into a $190,000 short-term convertible note, bearing interest at 22 percent and convertible at the lower of $0.0001 per share or 50 percent of the lowest intra-day trading price for the Company’s common stock during ten (10) trading days immediately prior to the date of conversion. As additional consideration for this loan the Company issued to the lenders 400,000 shares of the Company's ~~Area~~common ~~Development~~stock. ~~Agreements~~Cash proceeds from the loan were $150,000 due to an original issuance discount on the note of $40,000.

~~Subsequent~~On toJune ~~November 30~~2, ~~2014~~2015, the Company has entered into ~~amended~~an ~~Area~~accounts ~~Development~~receivable ~~Agreements~~financing arrangement with ~~the~~third ~~franchisor~~party offor ~~Capriotti's~~a ~~Sandwich~~principal ~~Shops.~~amount ~~Pursuant~~received toin ~~those~~cash ~~agreements~~of $71, ~~the~~000. ~~Company~~The ~~relinquished~~terms of the ~~exclusive~~arrangements ~~right~~require the Company to ~~develop~~repay ~~Capriotti's~~the ~~Sandwich~~principal ~~Shops~~balance plus inan ~~its~~additional ~~five~~$26,980 ~~contractual~~for ~~territories~~total remittance of $97,980. The interms ~~return for~~of ~~which~~repayment require the Company's ~~contractual~~to ~~obligations~~remit to ~~open~~the ~~stores~~lender 14 percent of all future receivables arising from credit card, debit card and prepaid transactions until such time as the total remittance is paid in ~~each~~full. These ~~territory~~borrowing ~~were~~is ~~decreased~~secured toby ~~one~~the ~~per~~assets ~~year~~of ~~per~~the ~~territory~~Company.

~~Financings~~21

In connection with short-term loans made to the Company by two separate entities, the Company agreed to issue shares of Common Stock to those two lenders. To-date, the Company has issued 225,000 shares to each of these two lenders. For each two weeks that each such loan remains outstanding, the Company is required to issue another 37,500 shares of its Common Stock. To date, the Company has issued 375,000 shares, subsequent to November 30, 2014 in connection with these loans.

In connection with his assistance with facilitating EB-5 funding for the Company, as well as in consideration of other advice and services rendered, the Company issued to Company Director Mike Liu a Warrant entitling him, any time for five years after issuance, to acquire 400,000 shares of the Company's Common Stock at an exercise price of $0.84 per share.

The Company currently owes approximately $3.65 million to various entities directly or indirectly controlled by a Company Director. The Company currently is in discussions with those entities to restructure some of their debt and extend maturities such that they no longer are past due. The resolution of these issues will result in the granting of additional equity securities to these entities, the nature and amount of which has not yet been determined. Note that those entities, through their ownership interest in KCI Holding I, LLC, indirectly own approximately 18.5% of the Company's Common Stock currently outstanding.

The Company, as of November 30, 2014 owed approximately $2.7 million to CBC Partners I, LLC ("CBC"). The Company, subsequent to that date reached an agreement with CBC to extend the maturity and make other modifications to this debt such that it no longer is past due. In connection with that agreement, CBC also advanced to the Company on a short-term basis an additional $250,000. In partial consideration of that advance, the Company has committed to issue to CBC warrants to acquire 1,450,000 shares of the Company's Common Stock at an exercise price of $0.84 per share. Note that CBC, through its ownership interest in KCI Holding I, LLC, indirectly owns approximately 4% of the Company's Common Stock currently outstanding.

On December 24, 2014, the Company entered into a convertible loan in the amount of $110,000. This loan, due on demand is convertible, at the holder's option, into the Company's common stock at a conversion price equal to 65% of the market price of the stock (defined in this case as equal to the average of the 5 lowest trades of the Common Stock for any Trading Day(s) during the Pricing Period, or the closing bid price on the last day of the pricing period - the fifteen trading days preceding the date of the conversion notice). The issue amount of this note, prior to related fees and expenses, was $100,000. The $10,000 difference will be recorded by the Company as an Original Issue Discount and amortized over the life of the loan.

In January 2015, an affiliate of one of the Directors made two loans to the Company totaling $100,000. Those loans are repayable, with interest of 15% per year, by payments over the next approximately two months, in the amount of $2,278 per day, five days per week.

NOTE 13 – RESTATEMENT OF FINANCIAL STATEMENTS

The Company has restated the August 31, 2014 financial statements as originally presented in its Form 10-K filed on December 19, 2104. The changes and explanation of such are as follows:

As of August 31, 2014:

	Originally Reported		Restatement Adjustment			As Restated
Balance sheet:
Accounts payable and accrued liabilities	$	709,109	$	120,000	(a)	$	829,109
Class B membership units	$	1,120,000	$	(120,000)	(a)	$	1,000,000

Notes:

(a) Reflects restatement due to adjustment of value of Class B membership units net of portion due for administrative fees to third parties.

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

FORWARD LOOKING INFORMATION

The following discussion and analysis of the Company’s financial condition and results of operations should be read with the condensed financial statements and related notes contained in this quarterly report on Form 10-Q (“Form 10-Q”). All statements other than statements of historical fact included in this Form 10-Q are, or may be deemed to be, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements involve known and unknown risks, uncertainties and other factors that may cause the Company's actual results, levels of activity, performance or achievements to be materially different than any expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," "continue," or the negative of these terms or other comparable terminology. Important factors that could cause actual results to differ materially from those discussed in such forward-looking statements include: 1. General economic factors including, but not limited to, changes in interest rates and trends in disposable income; 2. Information and technological advances; 3. Cost of products sold; 4. Competition; and 5. Success of marketing, advertising and promotional campaigns. The Company is subject to specific risks and uncertainties related to its business model, strategies, markets and legal and regulatory environment. You should carefully review the risks described in this Form 10-Q and in other documents the Company files from time to time with the SEC. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this Form 10-Q. The Company undertakes no obligation to publicly release any revisions to the forward-looking statements to reflect events or circumstances after the date of this document.

OVERVIEW

Business

~~Dixie~~The ~~Foods International, Inc. (the “~~Company~~”; OTCQB:”DIXI”)~~ was formed in May 2010 as Dixie Foods International, Inc. to operate a specialty food business for salad dressing, sauces and condiments. The Company was organized and still operates under the laws of the State of Florida. In November, of 2014, the Company changed its name to “Preferred Restaurant Brands” and isrecently incompleted ~~process of filing~~ the necessary documents with the FINRA, the SEC and other relevant regulatory authorities to effect this change. The Company's common stock now trades under the stock symbol "PRBI". The Company’s fiscal year-end is August 31. The Company operates from offices at 4033 South Dean Martin Drive; Las Vegas, NV 89013; and, its phone number is (702) 834-7101.

On January 6, 2012, the Company formed Dixie Sauce Co, Inc. (“Dixie Sauce”) as a wholly-owned subsidiary of the Company and transferred all assets and liabilities related to its specialty foods business to this subsidiary. Dixie Sauce currently conducts no operations.

Acquisition

On June 4, 2014, the Company completed the purchase (the “Reverse Acquisition”) of KCI Investments, LLC (“KCI”). In connection with the Reverse Acquisition, the Company acquired 100% of the issued and outstanding membership interests of KCI from KCI Holding I, LLC ("KCI Holding"), an entity that, until the consummation of the Reverse Acquisition, held 100% of the membership interests in KCI.

In exchange for the purchase of KCI by the Company, the Company issued to KCI Holding an aggregate of 34,508,976 shares of the Company's common stock. In addition, KCI Holding purchased and acquired from certain shareholders of the Company an aggregate of 6,305,400 shares of the Company's issued and outstanding common stock. As a result of the Reverse Acquisition, KCI became a wholly-owned subsidiary of the Company, and KCI Holding became a stockholder of the Company owning an aggregate of 40,814,376 shares of the Company's common stock, representing 96% of our issued and outstanding shares of common stock as of that date.

KCI’s Co-Manager and Chief Executive Officer, Ken Antos, now also serves as Chief Executive Officer and as Chairman of the Board of Directors of the Company. KCI’s Chief Financial Officer, Richard Groberg, now serves as the Company's Vice President, Chief Financial Officer and Board Secretary.

KCI Investments, LLC

KCI Investments, LLC, a Nevada limited liability company headquartered in Las Vegas, Nevada, was formed on November 8, 2004, but did not engage in any business operations until November 2010. Currently, KCI is engaged in developing, owning and operating a multi-brand chain of restaurants, currently under two franchise brands: Capriotti’s Sandwich Shops and Papa John’s. KCI also owns, operates and/or is developing various other restaurant concepts. KCI and its various subsidiaries, currently operate 17 restaurants: 12, franchised Capriotti's Sandwich Shops; four franchised Papa John’s pizza restaurants (all of which were opened during the first quarter of fiscal 2015), and Elements Kitchen & Martini Bar. Additionally, the Company has in various stages of development and construction: four Capriottis; eight Papa John’s; a new restaurant concept, and the Italian Steakhouse - all of which it anticipates opening over the next 12 months – subject to access to additional financing.

Locations
Fiscal Year (August 31, FYE)	2011		2012		2013		2014		Q1 2015
Opened in Year		0		3		5		4		4
Acquired in Year		0		1		1		0		0
Total Added In Year		0		4		6		4		4
Closed		0		0		0		0		1
Total Open		0		4		10		14		17

·	9, franchised Capriotti's Sandwich Shops;

·	six (6) franchised Papa John's pizza shops: two of which it opened during the first quarter of fiscal 2015; two of which it opened December 27, 2014 and two of which it acquired on February 17, 2015), and

·	two proprietary, fine casual restaurants: Elements Kitchen & Martini Bar and Social Bistro & Wine Bar.

Additionally, the Company has in various stages of development and construction eight Papa John’s - all of which it anticipates opening over the next 12 months – subject to access to additional financing.

Locations

Fiscal Year (August 31, FYE)	2011		2012		2013		2014		Q1 2015	Q2 2015	Q3 2015
Opened in Period		0		3		5		4	2	2	1
Acquired in Period		0		1		1		0	0	2	0
Total Added In Year		0		4		6		4	2	4	1

Cumulative Added		0		4		10		14	16	20	21

Closed In Period		0		0		0		0	1	1	2
Cumulative Closed		0		0		0		0	1	2	4

Total Open		0		4		10		14	15	18	17

Results of Operations

~~During~~Six ~~the~~Months ~~three~~Ended ~~months~~February ~~ended November 30~~28, ~~2014~~2015 ~~(“Q1-15”),~~Compared ~~the~~to ~~Company~~Six ~~had~~Months ~~$1,985,234~~Ended -February ~~in net sales of products up 54.9% from the quarter ended November 30~~28, 2013 (“Q1-14”). This growth resulted from: (i) six additional locations open in Q1-15 vs. Q1-14 and (ii) 8.1% Same Store Sales growth (growth of net sales for restaurants open during Q1-15 and Q1-14)2014

19Revenue

~~Food,~~During ~~Beverage~~the ~~And~~six ~~Packaging~~months ended February 28, 2015 (“~~COGS~~1st6-15”) ~~increased~~, ~~slightly~~the Company reported $3,924,646 in ~~Q1-15~~net ~~vs.~~sales, Q1compared to net sales of $2,617,819 for the six months ended February 28, 2014 (“1st6-14”), ~~(36%~~an increase of ~~Net~~$1,306,827 ~~Sales~~or vs49. ~~35.2~~9%),. ~~resulting~~This ~~largely~~growth resulted mainly from the impact of ~~groupon~~the ~~sales~~six additional Papa John's locations opened and ~~opening promotions.~~acquired ~~Labor~~between October 2014 and ~~related~~February ~~expenses~~2015 ~~were~~and ~~higher~~two ~~(32.6%~~additional ~~vs.~~Capriotti's ~~27.2%),~~opened ~~largely~~in ~~because~~1st6-15 of- more than offsetting: (i) the ~~impact~~loss of ~~labor~~net ~~for~~sales ~~new~~from ~~locations, which~~the ~~must~~four ~~maintain~~Capriotti's ~~minimum~~locations ~~staffing~~not ~~levels~~operating during ~~their~~the ~~ramp~~1st6-up2015 ~~period,~~but ~~especially~~operating during ~~grand~~the ~~opening~~1st6-14 ~~promotions.~~and ~~Occupancy expenses~~(ii) ~~decreased~~lower ~~(to~~Same ~~14%~~Store ~~from~~Sales ~~14.4%)~~growth as("SSS": ~~increasing~~growth ~~revenues~~of innet ~~existing~~sales ~~stores~~for ~~reduced~~restaurants open during the ~~burden~~comparable ofperiods). With ~~fixed~~regard ~~rent~~to ~~and~~lower ~~related~~same ~~overhead. Other~~store ~~operating~~sales, ~~expenses~~note ~~increased~~that ~~significantly~~in ~~(to~~the ~~31.4%~~1st6-14 ~~from~~period ~~17.7%),~~the ~~resulting~~Company ~~largely~~utilized ~~from:~~Groupon ~~significantly~~and ~~increased~~other ~~depreciation expenses~~promotional ~~and~~efforts ~~from~~to ~~marketing~~gain ~~expenses~~brand ofawareness. ~~approximately~~These 9%programs ofdid ~~Net~~generate ~~Sales.~~additional ~~The~~sales; ~~Company~~however, ~~through~~they ~~December~~were ~~2014,~~not ~~invested~~profitable: ~~heavily~~thus, ~~in various~~the ~~marketing~~Company ~~and~~did ~~promotional~~not ~~efforts~~repeat tothese ~~build~~programs ~~its~~during ~~brands~~the 1st6-15.

~~As a result~~Food, ~~the~~Beverage Company incurred a Net Loss from Restaurant Operations of $277,461 during the three months ended November 30, 2014. This loss included approximately $175,000 of Depreciation charged to Restaurant Operations and ~~more than to $119,000 in marketing and advertising-related expenses (6.0% of Net Sales).~~Packaging

~~The Company recorded $2~~Food,~~620,445~~ ofbeverage ~~other expenses (including General~~ and ~~administrative;~~packaging ~~Depreciation~~increased ~~and~~to ~~amortization~~$1, ~~Salary and wages~~548,784 ~~Royalty~~in ~~and franchise fees, and Pre~~1st6-~~opening costs)~~15, up ~~nearly~~from $~~1.8~~954,707 ~~million~~in ~~from Q1~~1st6-14. ~~This~~(an increase ~~resulted~~of ~~largely from: (i) more than~~ $~~860~~594,~~000~~077 ~~of nonrecurring and/~~or ~~noncash expenses related to fees paid in equity for services rendered; (ii~~62.2%), ~~the~~resulting ~~value~~largely offrom the ~~vesting~~impact of ~~options~~nonrecurring ~~previously granted,~~expenses ~~which totaled approximately $818,000; (iii) increased corporate overhead~~ related to ~~the~~grand ~~new~~opening ~~restaurant opened~~ and ~~pending openings,~~other ~~and~~promotions ~~(iv) pre-opening expenses~~ related to the ~~new~~PJ's ~~restaurant openings~~Additions.

~~Including~~Labor ~~Interest expenses totaling $1,344,379, the Company recorded a Net Loss of $4,242,276 during Q1-15. Interest expenses included more than $430,000 of amortization of original issue discounts~~ and ~~stock issued for loan modifications.~~Related

Labor and related expenses increased to $1,398,817 in 1st6-15, up from $689,900 in 1ST6-14 (an increase of $708,917 or 102.8%), largely because of the impact of labor for new locations, which must maintain minimum staffing levels during their ramp-up period, especially during grand opening promotions.

Occupancy

Occupancy expenses increased to $795,314 in 1st6-15, up from $296,474 in 1ST6-14 (an increase of $498,840 or 168.3%) also largely because of the burden of fixed rent and related overhead related to the new locations.

Other Restaurant Expenses

Other restaurant expenses increased to $1,164,835 in 1st6-15, up from $531,469 in 1st6-14 (an increase of $633,366 or 119.2%), resulting largely from: significantly increased depreciation expenses and from marketing expenses related to the new locations.

Net Loss from Restaurant Operations

As a result, the Company incurred a net loss from restaurant operations of $983,104 during the six months ended February 28, 2015 compared to income from restaurant operations of $145,269 during the six months ended February 28, 2014, a decrease of $1,128,373 or 776.7%.

General and Administrative

The Company recorded general and administrative expenses of $4,621,334 in 1ST6-15 compared to $1,062,848 in 1ST6-14, an increase of $3,558,486 or 334.8%. This increase resulted largely from: (i) more than 1,567,184 of nonrecurring and/or noncash expenses related to fees paid in equity for professional services rendered; and (ii) the value of the vesting of options previously granted, which totaled approximately $1,627,015.

Depreciation

Depreciation and amortization increased to $206,019 in 1ST6-15, up from $119,967 in 1ST6-14 (an increase of $86,052 or 71.7%) due to new restaurant openings and pending openings.

Pre-opening Expenses

Pre-opening expenses increased to $473,404 in 1ST6-15, up from $309,560 in 1ST6-14 (an increase of $163,844 or 52.9%) as a result of new restaurant openings.

Other Income and Expense

Total other income and expenses were $4,139,731 in 1ST6-15, up from $4,302 in 1ST6-14 (an increase of $4,135,429), due to an increase in interest expense of $4,541,299 stemming from increases in interest bearing notes to fund operations and include significant noncash charges related to the value of warrants and equity granted in connection with loans and extensions and modifications thereto. This increase was offset by a gain on changes in derivative liabilities of $808,240.

Net Loss

As a result, the Company incurred a net loss of $10,423,592 during the six months ended February 28, 2015 compared to a net loss of $1,351,408 during the six months ended February 28, 2014, an increase of $9,072,184 or 671.3%.

Three Months Ended February 28, 2015 Compared to Three Months Ended February 28, 2014

Revenue

During the three months ended February 28, 2015 (“Q2-15”), the Company reported $1,939,412 in net sales, compared to net sales of $1,336,391 for the three months ended February 28, 2014 (“Q2-14”), an increase of $603,021 or 45.1%. This growth resulted mainly from the impact of the PJ's Additions and two additional Capriotti's open in 1st6-15 - more than offsetting: (i) the loss of net sales from the four Capriotti's locations not operating during the Q2-15 but operating during the Q2-14 and (ii) lower SSS growth. With regard to lower SSS, note that in the Q2-14 period the Company utilized Groupon and other promotional efforts to gain brand awareness. These programs did generate additional sales; however, they were not profitable: thus, the Company did not repeat these programs during Q2-15. The net sales figures were also negatively impacted due to seasonality and the full quarter's impact of the Capriotti's locations closed during Q1 and Q2.

Food, Beverage and Packaging

Food, beverage and packaging increased to $834,470 in Q2-15, up from $503,770 in Q2-14 (an increase of $330,700 or 65.6%), resulting largely from the impact of nonrecurring expenses related to grand opening and other promotions related to the PJ's additions.

Labor and Related

Labor and related expenses increased to $751,865 in Q2-15, up from $340,998 in Q2-14 (an increase of $410,867 or 120.5%), largely because of the impact of labor for new locations, which must maintain minimum staffing levels during their ramp-up period, especially during grand opening promotions.

Occupancy

Occupancy expenses increased to $516,781 in Q2-15, up from $111,357 in Q2-14 (an increase of $405,424 or 364.1%), largely because of the burden of fixed rent and related overhead related to the new locations.

Other Restaurant Expenses

Other restaurant expenses increased to $541,939 in Q2-15, up from $304,118 in Q2-14 (an increase of $237,821 or 78.2%), resulting largely from: significantly increased depreciation expenses and from marketing expenses related to the new locations, but lower than the 31.4% reported in. Q1-15

Net Loss from Restaurant Operations

Largely as a result of the increased expenses associated with the new locations, the Company incurred a net loss from restaurant operations of $705,643 Q2-15 compared with a net income from restaurant operations of $76,148 during Q2-14, a decrease of $781,791 or 1,026.7%.

General and Administrative,

The Company recorded general and administrative expenses of $2,312,551 in Q2-15 compared to $484,909 in Q2-14, an increase of $1,827,642 or 376.9%. The increase from resulted largely from: (i) more than $1,106,542 of nonrecurring and/or noncash expenses related to fees paid in equity for professional services rendered; and (ii) the value of the vesting of options previously granted, which totaled approximately $809,014.

Depreciation

Depreciation and amortization increased to $100,804 in Q1-15, up from $72,306 in Q2-14 (an increase of $28,498 or 39.4%) due to new restaurant openings and pending openings.

Pre-opening Expenses

Pre-opening expenses increased to $266,957 in Q1-15, up from $211,660 in Q2-14 (an increase of $55,297 or 26.1%) as a result of new restaurant openings.

Other Income and Expense

Total other expenses were $2,805,361 in Q1-15, compared to other income of $280,687 in Q2-14 (an increase in other expenses of $3,086,048) due to an increase in interest expense of $3,482,360 stemming from increases in interest bearing notes to fund operations and include significant noncash charges related to the value of warrants and equity granted in connection with loans and extensions and modifications thereto. This increase was offset by a gain on changes in derivative liabilities of $808,240.

Net Loss

As a result, the Company incurred a net loss of $6,191,316 during the three months ended February 28, 2015 compared to a net loss of $412,040 during the three months ended February 28, 2014, an increase of $5,779,276 or 1,402.6%.

Liquidity and Capital Resources

During the ~~three~~six months ended ~~November 30~~February 28, ~~2014~~2015, the Company's working capital deficit increased $26,~~216~~069,~~275~~696 (72.5%) to $1014,~~592~~445,~~341~~762, from a deficit of $8,376,066 at August 31, 2014. The primary reasons for the increase in the working capital deficit were: (i) increased short term debt and payables resulting from delays in receiving subscribed financings and the cost of opening new locations and (ii) the recognition of derivative liabilities related to certain equity issuances.

During this same period, stockholders’ equity decreased $3,081,725 at November 30, 2014. The decrease in stockholders’ equity is due to the recorded losses.

Cash Flows

Net cash used in operating activities was $12,~~021~~404,~~359~~185 during the ~~three~~six months ended ~~November~~February 3028, ~~2014~~2015, oflargely ~~which~~due ~~more~~to ~~than~~the areported ~~$1.1~~net ~~million~~loss ~~increase~~of ~~in payables and approximately~~ $210,317,710.1 During ~~million~~this ~~was various noncash charges (Depreciation and amortization~~period, ~~Amortization~~net ofcash ~~debt~~used ~~discounts~~in ~~and~~investing ~~debt~~activities ~~issuance~~was ~~costs~~$1, ~~Change in derivative liability~~458,665 ~~Stock~~related ~~and~~to ~~warrants~~the ~~granted~~construction ~~for loan modifications,~~ and ~~Stock~~acquisition ~~issued in connection with execution~~ of ~~notes~~new ~~payable)~~restaurants, ~~partially~~ offset ~~the~~by ~~Net Loss. During this period,~~ the ~~Company~~sale ~~spent $950,755 on capital expenditures – all related to the construction~~ of ~~new~~one ~~restaurants.~~store ~~During~~for ~~Q1-15,~~ cash. Cash ~~was~~ used byin ~~our~~operating ~~loss~~and ~~from~~investing ~~operations~~activities ~~and~~was offset by: $1,~~990~~957,~~402~~ 245 in net proceeds from new debt, and ~~equity issuances~~$1,900,000 ~~net~~from the sale of ~~principal~~Class ~~repayments~~B membership units.

Recent Financing Transactions

During the three months ended ~~November~~February 28, ~~2014~~ 2015, the Company secured additional debt funds to support ongoing operations. On February 17, 2015, the Company borrowed $1,000,000 from TCA Global Credit Master Fund LLC 1 (~~see~~"TCA"). The "~~Note~~TCA 6Loan" -bears ~~Subsequent~~interest ~~Events~~@ "12% per annum and has and original maturity date of February 17, 2016.) The TCA Loan is scheduled to amortize monthly over one year. The Company utilized the proceeds of the TCA Loan, net of related transaction fees, to: fund the acquisition of two Papa John's locations; repay some obligations, and provide additional working capital.

2025

~~Recent~~Also, ~~Financing~~as ~~Transactions~~noted above in Section 10: Subsequent Events, subsequent to quarter-end:

~~During~~· The Company received $660,000 in EB-5 funding from two investors, $120,000 of which amounts to deposits for legal and other expenses to be remitted by the ~~three~~Company ~~months~~on ~~ended~~behalf ~~November~~those investors. The Company also received a advance in the amount of $250, ~~2014~~000 from a relative of another, pending EB5 investor. Such advance (to be treated as a bridge loan) is due to be repaid, along with interest @ 8.0%, on or before June 30, 2015. · The Company entered into a $190,000 short term loan, convertible under certain circumstances into shares of the Company's ~~secured~~Common Stock. This loan was issued with a $40,000 original issue discount - to be charged as interest expense over the life of the loan. As additional ~~debt~~consideration ~~funds~~for this loan the Company issued to ~~support~~the ~~ongoing~~lenders ~~operations~~250,000 shares of the Company's Common Stock. The Company subsequently issued an additional 150,000 shares of the Company's Common Stock to that lender in consideration of its extension of the maturity date. · The Company entered into an agreement with an existing financing source pursuant to which the Company received $178,000 and agreed to repay that amount of principal balance plus an additional $78,320 (~~see~~for "total remittance of $256,320) by remitting to the lender 16% of all future receivables arising from credit card, debit card and prepaid transactions from some of its bank account until such time as the total remittance is paid in full. The additional $78,320 will be recognized as interest expense over the estimated term of the agreement. The term is not fixed due to the variable repayment terms; however, management currently estimates such term to be less than one year. Note 6that, out of the proceeds of this funding, as well as Company funds, the Company repaid the $190,000 short term loan noted immediately above. · The Company entered into another $190,000 short term loan, convertible under certain circumstances into shares of the Company's Common Stock with the same lender as the loan noted two paragraphs above. Stock. This loan was issued with a $40,000 original issue discount - ~~Subsequent~~to ~~Events~~be "charged as interest expense over the life of the loan. As additional consideration for this loan the Company issued to the lenders 400,000 shares of the Company's Common Stock. · The Company entered into a short term loan agreement with the relative of a pending EB5 subscriber pursuant to which he advanced to the Company $235,000. The loan, plus interest @ 8.0%, is repayable August 1, 2015. · The Company entered into an agreement with a new financing source pursuant to which the Company received $71,000 and agreed to repay that amount of principal balance plus an additional $26,980 (for total remittance of $97,980) by remitting to the lender 16% of all future receivables arising from credit card, debit card and prepaid transactions from one of its subsidiary bank account until such time as the total remittance is paid in full. The additional $26,980 will be recognized as interest expense over the estimated term of the agreement. The term is not fixed due to the variable repayment terms; however, management currently estimates such term to be less than six months.

Recent Acquisitions

On February 18, 2015, the Company consummated the acquisition of two, franchised Papa John's locations in the Company's existing trade area in Northern California: one in Fresno and the other in Clovis. In total the Company paid the seller $392,032 in cash. The Company also acquired those locations inventory as of the closing date.

Off Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that we are required to disclose pursuant to these regulations. In the ordinary course of business, we enter into operating lease commitments, purchase commitments and other contractual obligations. These transactions are recognized in our financial statements in accordance with generally accepted accounting principles in the United States.

Critical Accounting Policies and Estimates

Management’s discussion and analysis of its financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to the reported amounts of revenues and expenses and the valuation of our assets and contingencies. We believe our estimates and assumptions to be reasonable under the circumstances. However, actual results could differ from those estimates under different assumptions or conditions. Our financial statements are based on the assumption that we will continue as a going concern. If we are unable to continue as a going concern we would experience additional losses from the write-down of assets.

Going Concern

The continuation of the Company as a going concern is dependent upon the continued financial support from its management, and its ability to: identify future investment opportunities and obtain the necessary debt or equity financing and generate profitable operations from the Company’s future operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

New Accounting Pronouncements

The company has adopted all recently issued accounting pronouncements. The adoption of the accounting pronouncements, including those not yet effective, is not anticipated to have a material effect on the financial position or results of operations of the Company.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

As a "smaller reporting company" defined in Item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations and therefore are not required to provide the information requested by this item.

21Item 4. Controls and Procedures.

~~Item~~ Evaluation 4.of Disclosure Controls and Procedures.

~~Evaluation~~Under the supervision and with the participation of ~~Disclosure~~our ~~Controls~~management, including our Chief Executive Officer and ~~Procedures~~Chief Financial Officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended, as of November 30, 2014. Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded such controls and procedures were not effective as of November 30, 2014 to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Act is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms and to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

~~Under~~Changes the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended, as of November 30, 2014. Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded such controls and procedures were not effective as of November 30, 2014 to ensure that information required to be disclosed by the issuer in ~~the~~internal ~~reports~~control ~~that~~over it files or submits under the Act is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms and to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer's management, including its principal executive and principal financial ~~officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.~~reporting

22There were no changes in our internal controls over financial reporting that occurred during the six month period ended February 28, 2015 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

~~Changes in internal control over financial reporting~~27

~~There~~ PART ~~were~~II no- ~~changes~~OTHER in our internal controls over financial reporting that occurred during the quarter ended November 30, 2014 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.INFORMATION

~~PART~~Item II1. -Legal ~~OTHER INFORMATION~~Proceedings

~~Item~~We 1are currently not a party to any pending legal proceeding. ~~Legal~~From ~~Proceedings~~time to time, we may receive claims of and become subject to routine litigation that is incidental to the business..

We Item ~~are currently not a party to any pending legal proceeding~~1A. ~~From~~Risk ~~time to time, we may receive claims of and become subject to routine litigation that is incidental to the business..~~Factors

As a "smaller reporting company" defined in Item ~~1A.~~10(f)(1) ~~Risk~~of ~~Factors~~Regulation S-K, we are electing scaled disclosure reporting obligations and therefore are not required to provide the information requested by this item.

AsItem a2. ~~"smaller~~Unregistered ~~reporting~~Sale ~~company" defined in Item 10(f)(1)~~ of ~~Regulation~~Equity ~~S-K,~~Securities ~~we are electing scaled disclosure reporting obligations~~ and ~~therefore~~Use ~~are~~of ~~not required to provide the information requested by this item.~~Proceeds

~~Item 2.~~ Unregistered Sale of Equity Securities ~~and Use of Proceeds~~

~~Unregistered~~During ~~Sale~~the six months ended February 28, 2015, the Company issued 3,063,890 shares of ~~Equity~~Common ~~Securities~~Stock to lenders in connection with new loans and services.

~~During~~The ~~the~~sale ~~three~~was ~~months~~exempt ~~ended~~from ~~November 30,~~registration ~~2014,~~under ~~the~~Section ~~Company~~4(A)(2) ~~issued~~of ~~412,500~~the ~~shares~~Securities Act of ~~Common~~1933. ~~Stock~~The tosecurities ~~lenders~~were innot ~~connection~~offered ~~with new loans~~publicly.

~~The~~Item ~~sale was exempt from registration under Section 4(A)(2) of the Securities Act of 1933~~3. ~~The~~Defaults ~~securities~~upon ~~were~~Senior ~~not offered publicly.~~Securities

~~Item~~None 3.other ~~Defaults~~than ~~upon~~as ~~Senior~~disclosed ~~Securities~~herein.

~~None~~Item ~~other~~4. ~~than~~Mine asSafety ~~disclosed herein.~~ Disclosures

~~Item~~Not ~~4. Mine Safety Disclosures~~applicable

~~Not~~Item ~~applicable~~5. Other Information

~~Item 5. Other Information~~None

~~None~~28

Item 6. Exhibits

4.25	~~Yellowstone~~Mammoth ~~Capital~~ Loan Documents
4.26	~~Swift~~CBC ~~Loan~~Extension Documents
4.27	~~Mammoth~~2015 ~~Loan~~Magnolia ~~Documents~~Loan
4.28	~~CBC~~TCA ~~Extension~~Loan-related Documents
4.29	2015 Magnolia Loan

101.INS	XBRL Instance Document.
101.SCH	XBRL Taxonomy Extension Schema Document.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	XBRL Taxonomy Extension Labels Linkbase Document.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.

2329

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.

Dated: February 1, 2015	DIXIE FOODS INTERNATIONAL, INC.
Dated: July 20, 2015	PREFERRED RESTAURANT BRANDS, INC.
	/s/ KENNETH A. ANTOS
	/s/ KENNETH M. ANTOS
	Kenneth A. Antos,
	President and Chief Executive Officer
	(Principal Executive Officer)

~~/s/ RICHARD S. GROBERG Richard S. Groberg, Vice President and Chief Financial Officer (Principal Financial Officer)~~30

Filing Compare · Preferred Restaurant Brands, Inc.