DEERFIELD, Ill., Oct. 9, 2026 — BAB, Inc. (OTCQB: BABB) has announced its financial results for the third quarter of fiscal 2026, ended August 31, 2026, reporting year-over-year gains in both revenue and net income.

Third-Quarter Results

For the quarter ended August 31, 2026, BAB recorded revenues of $908,000 and net income of $227,000, or $0.03 per share, compared with revenues of $769,000 and net income of $168,000, or $0.02 per share, in the same quarter a year earlier. Total revenue rose $139,000, or 18.1%, versus the prior-year period.

The increase was driven primarily by a $115,000 rise in marketing fund revenue, which is recognized when the related marketing fund expenses are incurred, along with a $19,000 increase in royalty fee revenue and a $5,000 increase in licensing fees and other income. Because marketing fund revenue and the corresponding expenses directly offset each other in any given period, the growth in marketing fund revenue had no impact on net income. That pass-through structure is a defining feature of franchise-company income statements and matters for readers parsing the headline numbers: swings in marketing fund activity do not change profit, which is why the royalty line — up $19,000 for the quarter — is the growth component most directly tied to the franchise system itself.

Nine-Month Results

For the nine months ended August 31, 2026, revenues were $2,435,000 and net income was $533,000, or $0.07 per share, versus revenues of $2,334,000 and net income of $438,000, or $0.06 per share, for the same period of 2025. Total revenue increased $101,000, or 4.3%, from the prior year.

The company attributed the nine-month gain primarily to a76,000 increase in marketing fund revenue and a $36,000 increase in royalty fee revenue, partially offset by a $14,000 decline in licensing fees and other income. As with the quarterly figures, marketing fund revenue is recognized when the related marketing fund expenses are incurred, and the revenue and expense offset each other with no effect on net income. The same pass-through effect applies here, meaning the year-over-year improvement in net income rests on the lines outside the marketing fund.

Operating Expenses

Total operating expenses for the three months ended August 31, 2026 were $607,000, compared with $550,000 for the same period in 2025 — an increase of $57,000, or 10.4%. The increase stemmed mainly from a $115,000 rise in marketing fund expenses, partially offset by a $58,000 decrease in selling, general and administrative expenses.

For the nine-month period, total operating expenses were $1,734,000, down from $1,767,000 in the prior-year period, a decrease of $33,000, or 1.9%. The decline was primarily attributable to a $109,000 reduction in selling, general and administrative expenses, partially offset by a $76,000 increase in marketing fund expenses. Excluding pass-through marketing fund activity, the company's own cost base thus contracted over the nine months even as revenue grew 4.3% — a combination consistent with the period's higher net income.

With one quarter remaining in fiscal 2026, readers tracking the franchisor can follow its fourth-quarter results and its SEC filings, where the risk factors behind the company's forward-looking statements are laid out.

About BAB, Inc.

BAB, Inc. franchises and licenses Big Apple Bagels®, My Favorite Muffin®, SweetDuet® frozen yogurt and Brewster's® Coffee. The company's stock trades on the OTCQB under the symbol BABB, and additional information is available at www.babcorp.com.

Forward-Looking Statements

Certain statements in this press release constitute forward-looking statements, or may be deemed or construed to be forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "forecast," "estimate," "project," "intend," "expect," "should," "would" and "believe," as well as similar expressions and all statements that are not historical facts, are intended to identify forward-looking statements. These statements involve, and are subject to, known and unknown risks, uncertainties and other factors that could cause the company's actual results, performance (financial or operating) or achievements to differ from those expressed or implied by the forward-looking statements. These factors are discussed more fully in the company's SEC filings.