What changed in this filing

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Item 7. Management’s Discussion and Analysis

2020-12-22 compared with 2019-12-17 · 211 added, 121 removed, 174 unchanged (66% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

As of September 28, 2019, the Company owned and operated 20 restaurants and bars, 17 fast food concepts and catering operations, exclusively in the United States, that have similar economic characteristics, nature of products and service, class of customer and distribution methods.

COVID-19 Pandemic

On March 11, 2020, in light of the rapid spread of the novel Coronavirus (“COVID-19” or "Coronavirus"), the World Health Organization declared the COVID-19 outbreak to be a global pandemic and the United States declared a National Public Health Emergency.

The COVID-19 pandemic has significantly disrupted consumer demand, as well as the Company’s restaurant operations.

Following the pandemic declaration in March 2020, federal, state and local governments began to respond to the public health crisis by requiring social distancing, "stay at home" directives, and mandatory closure of all of our locations.

As a result of state and local governments lifting “stay at home” orders and mandatory shut-down requirements from May through August 2020, the Company has reopened all of its properties, with the exception of Thunder Grill in Washington, D.C., at varying levels of limited capacity as allowed by federal, state and local governments.

Due to the impact of the COVID-19 pandemic, during the year ended October 3, 2020, subsequent to reopening after initial shut-downs, the Company has temporarily closed several restaurants, typically for three to seven days.

The Coronavirus has caused unprecedented business disruptions, especially in the hospitality industry.

Although we have experienced some recovery from the initial impact of COVID-19, the long-term impact of COVID-19 on the economy and on our business remains uncertain, the duration and scope of which cannot currently be predicted.

As a result of these developments, the Company is experiencing a significant negative impact on its revenues, results of operations and cash flows, which could negatively impact its ability to meet its obligations over the next 12 months.

However, we believe that our existing cash balances, which include the proceeds from Paycheck Protection Program loans (see Note 10 - Notes Payable of the consolidated financial statements) and actions taken by management, set out below and otherwise, will be sufficient to meet our liquidity and capital spending requirements through December 23, 2021.

In response to the business disruption and liquidity concerns caused by the COVID-19 pandemic, the Company has taken the following actions, which management expects will enable it to meet its obligations over the next 12 months:

• While restaurants were closed or continue to be closed, we furloughed all hourly employees and approximately 95% of salaried restaurant management personnel, while enacting salary reductions for all remaining restaurant management personnel.

• As restaurants re-opened, restaurant management salaries were restored to 70% of pre-pandemic amounts.

If a location produced sustained cash flow, restaurant management salaries were restored to 100% of pre-pandemic amounts.

• Initially reduced the pay of all corporate and administrative staff by 50% to 75% and senior management salaries by 75% to 95%.

As of October 3, 2020, most corporate salaries have been restored to 65% of pre-pandemic levels.

In addition, the Board waived its fees for the balance of 2020.

• Entered into a Payment Suspension Agreement with our bank which deferred aggregate principal payments of $675,000 due on June 1, 2020 to the respective loan maturity dates and an agreement to extend the maturity dates of our revolving credit facility (see Note 10 - Notes Payable of the consolidated financial statements).

In addition, the bank agreed to relaxed financial covenants through fiscal Q3 2021.

• Canceled the payment of the $0.25 dividend declared on March 2, 2020.

• Suspended future dividend payments until such time as the Board deems appropriate to reinstate.

• Canceled or delayed all non-essential capital expenditures.

• Suspended the vast majority of lease payments while our restaurants were closed as a result of government mandated shutdowns, and attempted to negotiate rent concessions, abatements and deferrals with these landlords to reduce the lease payments.

While some landlords have agreed to concessions, several negotiations are still ongoing as of the date of this filing and we will attempt to obtain further concessions through April 2021 at many of our leased properties.

However, there can be no assurance that the Company will be successful in obtaining the relief it is seeking.

• Certain Company subsidiaries applied for and received a total of approximately $15.0 million of loans under the Paycheck Protection Program of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), which was enacted March 27, 2020.

• Utilized additional provisions of the CARES Act to obtain tax savings as well as the deferral of our portion of social security taxes to future years.

Due to the rapid development and fluidity of this situation, management cannot determine the ultimate impact that the COVID-19 pandemic will have on the Company’s consolidated financial condition, liquidity, future results of operations, suppliers, industry, and workforce and therefore any prediction as to the ultimate material adverse impact on the Company’s consolidated financial condition, liquidity, and future results of operations is uncertain.

The disruption in operations has led the Company to consider the impact of the COVID-19 pandemic on its liquidity, debt covenant compliance, and recoverability of long-lived and ROU assets, goodwill and intangible assets, among others.

In addition, we cannot predict how soon we will be able to reopen any or all of our restaurants at full capacity or whether they will be required to close again in the future, these decisions will depend primarily on the actions of a number of governmental bodies over which we have no control.

Moreover, once restrictions are lifted, it is unclear how quickly customers will return to our restaurants, which may be a function of continued concerns over safety and/or depressed consumer sentiment due to adverse economic conditions, including job losses.

If these disruptions continue, the Company expects a continued material negative impact on its consolidated financial condition, future results of operations and liquidity.

The extent of such negative impact will be determined, in part, by the longevity and severity of the pandemic.

As of October 3, 2020, the Company owned and operated 20 restaurants and bars, 17 fast food concepts and catering operations, exclusively in the United States, that have similar economic characteristics, nature of products and service, class of customer and distribution methods.

The Company believes it meets the criteria for aggregating its operating segments into a single reporting segment in accordance with applicable accounting guidance.

The consolidated statement of income for the year ended September 28, 2019 includes revenues and operating losses of approximately $3,380,000 and ($122,000), respectively, related to JB's on the Beach in Deerfield Beach, Florida which was acquired on May 15, 2019.

The consolidated statements of operations for the years ended October 3, 2020 and September 28, 2019 include revenues and income (loss) of approximately $7,489,000 and $168,000 and $3,380,000 and ($122,000), respectively, related to JB's on the Beach , which was acquired on May 15, 2019.

As of December 29, 2018, the Company determined that it would not be able to operate Durgin-Park profitably due to decreased traffic at the Faneuil Hall Marketplace in Boston, MA, where it was located, and rising labor costs.

As a result, included in the consolidated statement of operations for the year ended September 28, 2019 are losses on closure in the amounts of $1,106,000 consisting of:

(i) impairment of trademarks in the amount of $721,000, (ii) accelerated depreciation of fixed assets in the amount of $333,000, and (iii) write-offs of prepaid and other expenses in the amount of $52,000.

The restaurant closed on January 12, 2019.

Accounting Period

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Under this method, certain years will contain 53 weeks.

The fiscal years ended September 28, 2019 and September 29, 2018 included 52 weeks.

The fiscal years ended October 3, 2020 and September 28, 2019 included 53 and 52 weeks, respectively.

The Company has substantial fixed costs that do not decline proportionally with sales.

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Results of Operations

The Company’s restaurant operating income of $7,209,000 for the year ended September 28, 2019 (which excludes losses on the closure of Durgin-Park and an impairment loss from a write-down of long-lived assets related to Clyde Frazier’s Wine and Dine ) increased 43.3% compared to restaurant operating income of $5,032,000 for the year ended September 29, 2018.

This increase resulted primarily from strong performance at our properties located in Florida and Alabama, increased profitability at our Washington, D.C.

properties as a result of a renegotiated month-to-month rent on one and strong catering revenues at the other and the elimination of losses in the prior period of approximately $650,000 related to Durgin-Park , which was closed in January 2019, partially offset by increased labor costs, higher legal fees and losses in the amount of approximately $200,000 at our food court in Tampa, Florida which was closed for renovation for the last four months of the fiscal year.

The following table summarizes the significant components of the Company’s operating results for the years ended September 28, 2019 and September 29, 2018, respectively:

The Company’s operating loss for the year ended October 3, 2020 was $(7,796,000) as compared to operating income of $3,246,000 for the year ended September 28, 2019 which included a loss of $1,106,000 relating to the closure of Durgin-Park located in Boston, MA.

This decrease resulted primarily from the government mandated closure of all of our restaurants in March 2020 in connection with the COVID-19 pandemic and a $364,000 loss on the termination of a lease.

Although state and local governments have lifted “stay at home” orders and mandatory shut-down requirements at varying levels of limited capacity from May through September 2020 and the Company has reopened all of its properties, with the exception of Thunder Grill in Washington, D.C., our revenues and operating results continue to be well below prior periods.

In addition to the decrease in restaurant revenue from the mandatory closures and operating at varying levels of limited capacity, the Company estimates that it incurred approximately $3,150,000 of costs directly related to COVID-19 during the year ended October 3, 2020 consisting primarily of payments to employees for paid-time off during restaurant closures, inventory waste, and rent and rent related costs for closed restaurants from the day that they closed.

Recently, there has been a significant increase in reported COVID-19 cases in states where we have significant locations.

This has resulted in some local governments responding by taking additional measures, including implementing a further reduction of in-restaurant capacity in certain locations.

Although this is a developing situation, to this point these capacity reductions have not had a significant impact on our overall sales trends.

We continue to monitor and adhere to local restrictions and are maintaining elevated safety measures, including additional sanitation and disinfecting practices and the use of gloves and facial protection for our employees.

Further, we cannot predict how soon we will be able to reopen any or all of our restaurants at full capacity or whether they will be required to close again in the future, as these decisions will depend primarily on the actions of a number of governmental bodies over which we have no control.

The following table summarizes the significant components of the Company’s operating results for the years ended October 3, 2020 and September 28, 2019, respectively:

Year Ended Variance

2020 September 28,

2019 September 29,

Food and beverage sales $ 104,062 $ 159,125 $ (55,063) -34.6 %

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General and administrative expenses 10,160 12,011 (1,851) -15.4 %

Loss on termination of lease 364 — 364 100.0 %

Loss on closure of Durgin-Park — 1,106 (1,106) -100.0 %

Impairment loss from write-down of long-lived assets — 2,857 (2,857) -100.0 %

Depreciation and amortization 4,056 5,233 (1,177) -22.5 %

Total costs and expenses 114,286 159,108 (44,822) -28.2 %

RESTAURANT OPERATING INCOME 7,209 5,032 2,177 43.3 %

Loss on closure of Durgin-Park (1,106) — (1,106) N/A

Impairment loss from write-down of long-lived assets (2,857) — (2,857) N/A

OPERATING INCOME $ 3,246 $ 5,032 $ (1,786) -35.5 %

During the year ended September 28, 2019, revenues increased 1.5% compared to the year ended September 29, 2018.

This increase resulted primarily from:

(i) revenues related to JB's on the Beach in Deerfield Beach, Florida (which was acquired on May 15, 2019), and (ii) the same-store sales impacts discussed below, partially offset by revenues related to Durgin-Park, which was closed in January 2019.

OPERATING INCOME (LOSS) $ (7,796) $ 3,246 $ (11,042) -340.2 %

During the year ended October 3, 2020, revenues decreased 34.4% compared to the year ended September 28, 2019.

This decrease resulted primarily from the government mandated closure of all of our restaurants in March 2020 and limited re-openings beginning in May 2020 in connection with the COVID-19 pandemic.

Food and Beverage Same-Store Sales

On a Company-wide basis, same-store food and beverage sales increased 0.3% for the year ended September 28, 2019 as compared to the year ended September 29, 2018 as follows:

On a Company-wide basis, same-store food and beverage sales decreased 37.1% for the year ended October 3, 2020 as compared to the year ended September 28, 2019 as follows:

Year Ended Variance

2020 September 28,

2019 September 29,

(in thousands)

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New York 18,049 39,324 (21,275) -54.1 %

Washington, DC 13,028 13,253 (225) -1.7 %

Washington, D.C.

6,774 13,028 (6,254) -48.0 %

Atlantic City, NJ 3,392 6,954 (3,562) -51.2 %

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Food and beverage sales $ 104,062 $ 159,125

Same-store sales in Las Vegas increased 2.0% primarily as a result of better traffic at one of our properties which was under renovation last year, stronger than expected catering revenues and continued increased traffic near the New York-New York Hotel & Casino as a result of the opening of the T-Mobile Arena nearby.

Same-store sales in New York decreased 0.8% primarily as a result of increased competition and construction on the building where one of our properties is located.

Same-store sales in Washington, D.C.

decreased 1.7% due to decreased traffic at our Thunder Grill property located in Union Station as a result of a major tenant vacating the adjacent space.

Same-store sales in Atlantic City decreased 6.1% as a result of increased competition from the opening of several new casinos.

Same-store sales in Connecticut decreased 6.6% due to declining traffic at the Foxwoods Resort and Casino where our property is located.

Same-store sales in Alabama increased 3.8% primarily as a result of better weather conditions in the current period.

Same-store sales in Florida increased 0.5% as a result of higher traffic and modest menu price increases partially offset by the temporary closure for renovation of our food court at the Hard Rock Hotel and Casino in Tampa, Florida.

Other food and beverage sales consist of sales related to new restaurants opened or acquired during the applicable period (i.e.

JB’s on the Beach - $3,380,000 in 2019), sales related to properties that were closed (i.e.

Durgin-Park - $1,040,000 in 2019 and $2,839,000 in 2018) and other fees.

A discussion of same-store sales for the year ended October 3, 2020 is not meaningful as a result of the impact of the government mandated closure of all of our restaurants in March 2020 and limited re-openings beginning in May 2020 in connection with the COVID-19 pandemic.

Other food and beverage sales consist of sales related to new restaurants opened or acquired during the applicable period ( JB’s on the Beach - $7,489,000 in 2020 and $3,380,000 in 2019), sales related to properties that were closed ( Durgin-Park - $1,040,000 in 2019) and other fees.

Our restaurants generally do not achieve substantial increases in revenue from year to year, which we consider to be typical of the restaurant industry.

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Included in Other Revenues are purchase service fees which represent commissions earned by a subsidiary of the Company for providing purchasing services to other restaurant groups, as well as license fees, property management fees and other rentals.

The increase in other revenues for the year ended September 28, 2019 as compared to the year ended September 29, 2018 is primarily due to an increase in property management fees and other rentals partially offset by decreased purchase service fees.

The decrease in other revenues for the year ended October 3, 2020 as compared to the year ended September 28, 2019 is primarily due to the impact of the COVID-19 pandemic.

Costs and Expenses

Costs and expenses for the years ended September 28, 2019 and September 29, 2018 were as follows (in thousands):

September 28,

Costs and expenses for the years ended October 3, 2020 and September 28, 2019 were as follows (in thousands):

Total Revenues Year Ended

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General and administrative expenses 10,160 9.5 % 12,011 7.4 % (1,851) -15.4 %

Loss on termination of lease 364 0.3 % — — % 364 100.0 %

Loss on closure of Durgin-Park — — % 1,106 0.7 % (1,106) -100.0 %

Impairment loss from write-down of

long-lived assets — — % 2,857 1.8 % (2,857) -100.0 %

Depreciation and amortization 4,056 3.8 % 5,233 3.2 % (1,177) -22.5 %

Total costs and expenses $ 114,286 $ 159,108 $ (44,822)

Food and beverage costs as a percentage of total revenues for the year ended September 28, 2019 increased slightly as compared to last year as a result of increases in food costs partially offset by a better mix of catering versus a la carte business at our larger properties combined with menu price increases.

Payroll expenses as a percentage of total revenues for the year ended September 28, 2019 increased slightly as compared to last year primarily as a result of minimum wage increases associated with changes to labor laws partially offset by a better mix of catering versus a la carte business at our larger properties combined with menu price increases.

Occupancy expenses as a percentage of total revenues for the year ended September 28, 2019 decreased as compared to last year primarily as a result of a renegotiated month-to-month rent at one of our Washington, D.C.

properties combined with higher sales at properties where the Company owns the premises at which the property operates.

Other operating costs and expenses as a percentage of total revenues for the year ended September 28, 2019 decreased as compared to last year as a result of cost cutting initiatives and higher restaurant-level legal fees in the prior year.

General and administrative expenses (which relate solely to the corporate office in New York City) as a percentage of total revenues for the year ended September 28, 2019 increased as compared to last year primarily as a result of annual wage increases and higher professional fees.

Depreciation and amortization expense for the year ended September 28, 2019 increased as compared to last year primarily as a result of fixed asset additions placed in service during 2019.

Food and beverage costs as a percentage of total revenues for the year ended October 3, 2020 were consistent with the same period of last year primarily as a result of a better mix of catering versus a la carte business at our larger properties (through the respective closure dates) combined with menu price increases partially offset by increases in food costs and inventory write-offs required as a result of the government mandated closures of all of our restaurants in March 2020 in connection with the COVID-19 pandemic.

Payroll expenses as a percentage of total revenues for the year ended October 3, 2020 increased as compared with the same period of last year primarily as a result of retaining key restaurant management personnel at reduced salaries while restaurants were closed and operating at reduced capacity with no or limited corresponding revenues during the current year as a result of the government mandated closures of all of our restaurants in March 2020 in connection with the COVID-19 pandemic.

Occupancy expenses as a percentage of total revenues for the year ended October 3, 2020 increased as compared with the same period of last year primarily as a result of rents being proportionally higher (even after some being reduced or abated by landlords) as compared to having no or limited corresponding revenues during the current year as a result of the government mandated closures of all of our restaurants in March 2020 in connection with the COVID-19 pandemic.

Other operating costs and expenses as a percentage of total revenues for the year ended October 3, 2020 increased as compared with the same period of last year primarily as a result of increased professional fees at the restaurant-level.

General and administrative expenses (which relate solely to the corporate office in New York City) as a percentage of total revenues for the year ended October 3, 2020 increased as compared with the same period of last year primarily as a result of retaining corporate personnel at temporarily reduced salaries while restaurants were closed and operating at reduced capacity with no or limited corresponding revenues during the current year as a result of the government mandated closures of all of our restaurants in March 2020 in connection with the COVID-19 pandemic.

Depreciation and amortization expense for the year ended October 3, 2020 decreased as compared with the same period of last year primarily as a result of lower charges in the current period as a result of asset impairments in the fourth quarter of 2019 and second quarter of 2020 partially offset by depreciation on improvements placed in service in fiscal 2020.

Loss on Termination of Lease

On April 2, 2020, the Company advised the landlord of a catering space in New York, NY that we would be terminating the lease.

In connection with this notification, the Company recorded a loss of $364,000 during the 13 weeks ended March 28, 2020, consisting of (i) rent accrued in accordance with the termination provisions of the lease, (ii) the write-off of the unamortized balance of purchased leasehold rights, (iii) the write-off of our security deposit, (iv) the write-off of ROU assets and related lease liabilities, and (v) the write-off of net book value of fixed assets.

Loss on closure of Durgin-Park

As a result, included in the statement of income for the year ended September 28, 2019 are losses on closure in the amount of $1,106,000 consisting of:

As a result, included in the statement of operations for the year ended October 3, 2020 are losses on closure in the amount of $1,106,000 consisting of:

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The assumptions about future taxable income require the use of significant judgment and are consistent with the plans and estimates we are using to manage the underlying businesses.

On December 22, 2017, the U.S.

government enacted comprehensive tax reform commonly referred to as the Tax Cuts and Jobs Act (“TCJA”).

Under Accounting Standards Codification (“ASC”) 740, the effects of changes in tax rates and laws are recognized in the period in which the new legislation is enacted.

The TCJA makes broad and complex changes to the U.S.

tax code, including, but not limited to:

(1) reducing the U.S.

federal corporate tax rate from 35% to 21% effective January 1, 2018;

(2) changing rules related to uses and limitations of net operating loss carryforwards created in tax years beginning after December 31, 2017;

(3) accelerated expensing on certain qualified property;

(4) creating a new limitation on deductible interest expense to 30% of tax adjusted EBITDA through 2021 and then 30% of tax adjusted EBIT thereafter;

(5) eliminating the corporate alternative minimum tax;

and (6) further limitations on the deductibility of executive compensation under IRC §162(m) for tax years beginning after December 31, 2017.

As the reduction in the U.S.

federal corporate tax rate is administratively effective on January 1, 2018, our blended U.S.

federal tax rate for the year ended September 28, 2019 was approximately 24%.

In connection with the TCJA, the Company recorded an income tax benefit of $1,382,000 related to the re-measurement of our deferred tax assets and liabilities for the reduced U.S.

federal corporate tax rate of 21%.

The Company’s accounting for the TCJA was complete as of September 29, 2018 with no significant differences from our provisional estimates.

does not impose a state income tax, as compared to the other major state and local jurisdictions in which the Company has operations.

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act ("CARES Act") was enacted to provide economic relief to those impacted by the COVID-19 pandemic.

The CARES Act made various tax law changes including among other things (i) modifications to the federal net operating loss rules including permitting federal net operating losses incurred in 2018, 2019, and 2020 to be carried back to the five preceding taxable years in order to generate a refund of previously paid income taxes (ii) enhanced recoverability of AMT tax credit carryforwards (iii) increased the limitation under IRC Section 163(j) for 2019 and 2020 to permit additional expensing of interest, and (iv) enacted a technical correction so that qualified improvement property can be immediately expensed under IRC Section 168(k).

As a result of the CARES Act, the Company recorded an income tax receivable of $2,673,000 as it is expecting to carryback its current year estimated taxable losses for fiscal year 2020 and recover prior taxes paid.

The Company recorded an income tax benefit of $1,022,000 related to the carryback as the Company was subject to higher federal corporate income tax rates in prior periods than the current statutory tax rate of 21%.

On November 18, 2020, the IRS issued Revenue Ruling 2020-27 that treats expenses funded by PPP loans as non-deductible for tax purposes if a business reasonably expects that a PPP loan will be forgiven in the future.

Based on this Revenue Ruling 2020-27 and the uncertainty related to the PPP loan forgiveness in future periods, as discussed in Note 10 - Notes Payable of the consolidated financial statements, the Company has treated these expenses as deductible in fiscal 2020.

The Company will continue to evaluate the impact of this ruling on its consolidated financial statements and may be required to reverse its income tax receivable and related income tax benefits during future interim periods as each Borrower applies for forgiveness.

The Company’s overall effective tax rate in the future will be affected by factors such as the utilization of state and local net operating loss carryforwards, the generation of FICA tax credits and the mix of earnings by state taxing jurisdictions as Nevada does not impose a state income tax, as compared to the other major state and local jurisdictions in which the Company has operations.

Our overall effective tax rate in the future will be affected by factors such as income earned by our VIEs, generation of FICA TIP credits and the mix of geographical income for state tax purposes as Nevada does not impose an income tax.

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We utilize cash generated from operations to fund the cost of developing and opening new restaurants and smaller remodeling projects of existing restaurants we own.

Net cash provided by operating activities for the year ended September 28, 2019 increased to $10,615,000 as compared to $9,575,000 for the year ended September 29, 2018 and was attributable to increased restaurant-level operating income and changes in net working capital primarily related to accounts receivable, prepaid, refundable and accrued income taxes and accounts payable and accrued expenses.

Net cash used in investing activities for the year ended September 28, 2019 was $3,196,000 and resulted primarily from purchases of fixed assets at existing restaurants.

Net cash used in investing activities for the year ended September 29, 2018 was $5,050,000 and resulted primarily from purchases of fixed assets at existing restaurants and costs associated with the renovation of Sequoia .

Net cash used in financing activities for the years ended September 28, 2019 and September 29, 2018 of $5,254,000 and $919,000, respectively, resulted primarily from the payment of dividends, principal payments on notes payable and distributions to non-controlling interests, offset by borrowings under the credit facility.

The Company had a working capital deficiency of $4,373,000 at September 28, 2019 as compared with a deficiency of $4,628,000 at September 29, 2018.

We believe that our existing cash balances, current banking facilities and cash provided by operations will be sufficient to meet our liquidity and capital spending requirements at least through December 18, 2020.

On January 3, 2019, April 5, 2019, July 8, 2019 and October 7, 2019, the Company paid quarterly cash dividends in the amount of $0.25 per share on the Company’s common stock.

The Company intends to continue to pay such quarterly cash dividend for the foreseeable future;

however, the payment of future dividends is at the discretion of the Company’s Board of Directors and is based on future earnings, cash flow, financial condition, capital requirements, changes in U.S.

Consistent with many other restaurant operators, we typically use operating lease arrangements for our restaurants.

In recent years we have been able to acquire the underlying real estate at several locations along with the restaurant operation.

We believe that our operating lease arrangements provide appropriate leverage of our capital structure in a financially efficient manner.

As of October 3, 2020, we had a cash and cash equivalents balance of $16,886,000.

Due to the rapid development and fluidity of the COVID -19 pandemic, management cannot determine the ultimate impact that it will have on the Company’s consolidated financial condition, liquidity, future results of operations, suppliers, industry, and workforce and therefore any prediction as to the ultimate material adverse impact on the Company’s consolidated financial condition, liquidity, and future results of operations is uncertain.

In addition, we cannot predict how soon we will be able to reopen any or all of our restaurants at full capacity or whether they will be required to close again in the future, as these decisions will depend primarily on the actions of a number of governmental bodies over which we have no control.

If these disruptions continue, the Company expects a continued material negative impact on its consolidated financial condition, future results of operations and liquidity.

The extent of such negative impact will be determined, in part, by the longevity and severity of the pandemic.

In response to the uncertain market conditions resulting from the COVID-19 pandemic, we have enhanced our liquidity position through the following measures:

• Fully drew down our Revolving Facility as of June 9, 2020.

• Entered into a Payment Suspension Agreement with our bank which deferred aggregate principal payments of $675,000 due on June 1, 2020 to the respective loan maturity dates.

• Although we were in compliance with all of our financial covenants under our Revolving Facility, our lender agreed to relaxed financial covenants through fiscal Q3 2021.

• Canceled the payment of the $0.25 dividend declared on March 2, 2020.

• Suspended future dividend payments until such time as the Board deems appropriate to reinstate.

• Canceled or delayed all non-essential capital expenditures.

• Suspended the vast majority of lease payments while the restaurants were closed by government mandated shutdowns, and attempted to negotiate rent concessions, abatements and deferrals with these landlords to reduce the lease payments.

However, there can be no assurance that the Company will be successful in obtaining the relief it is seeking.

• Certain Company subsidiaries applied for and received approximately $15.0 million of loans under the Paycheck Protection Program of the CARES Act, which was enacted March 27, 2020.

• Utilized additional provisions of the CARES Act to obtain tax savings as well as the deferral of our portion of social security taxes to future years.

The Company had a working capital deficiency of $(3,234,000) at October 3, 2020 as compared with a deficiency of $(4,373,000) at September 28, 2019.

This increase resulted primarily from the proceeds of borrowings under the Paycheck Protection Program of $15.0 million offset by the recognition of $6,117,000 of current operating lease liabilities in connection with the adoption of ASC 842 on September 29, 2019 and the current portion of revolver advances in the amount of $6,300,000.

We believe that our existing cash balances combined with measures taken due to COVID-19 pandemic described above, will be sufficient to meet our liquidity and capital spending requirements and finance our operating activities for at least the next 12 months.

Cash Flows for the Years Ended October 3, 2020 and September 28, 2019

Net cash used in operating activities for the year ended October 3, 2020 decreased to ($4,528,000) as compared to $10,615,000 provided by operations for the year ended September 28, 2019.

This decrease was attributable a decrease in net income as a result of the impacts of COVID-19 pandemic on our operations and changes in net working capital primarily related to prepaid, refundable and accrued income taxes, prepaid expenses and other current assets, accounts payable and accrued expenses.

Net cash used in investing activities for the years ended October 3, 2020 and September 28, 2019 was $(2,457,000) and $(3,196,000), respectively, and resulted primarily from purchases of fixed assets at existing restaurants.

Net cash provided by (used in) financing activities for the years ended October 3, 2020 and September 28, 2019 was $16,694,000 and $(5,254,000), respectively, resulted primarily from the payment of dividends, principal payments on notes payable and distributions to non-controlling interests and in the current period borrowings under our credit facility and the proceeds from PPP Loans.

On December 3, 2018, March 1, 2019, June 13, 2019, September 9, 2019 and November 26, 2019, our Board of Directors declared quarterly cash dividends in the amount of $0.25 per share.

On March 2, 2020, the Board of Directors declared a quarterly dividend of $0.25 per share on the Company’s common stock which was to be paid on April 6, 2020, to shareholders of record at the close of business on March 16, 2020.

On March 13, 2020, the Company announced that, in light of the unprecedented circumstances and rapidly changing situation with respect to COVID-19, as part of an overall plan to preserve cash flow, the Board of Directors determined that it was appropriate for the Company to defer payment of the dividend that was declared on March 2, 2020.

On July 1, 2020, the dividend declared on March 2, 2020 was canceled.

The payment of future dividends is at the discretion of the Company’s Board of Directors and is based on future earnings, cash flow, financial condition, capital requirements, changes in U.S.

taxation and other relevant factors.

The Company does not expect to pay quarterly cash dividends for the foreseeable future as a result of the disruption to its operations from the COVID-19 pandemic.

Restaurant Expansion and Other Developments

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The Company recorded the value of the renovations made by the landlord, which includes leasehold improvements and furniture, fixtures and equipment, in the amount of $5,474,000 with a corresponding increase in deferred rent.

The net book value of the existing leasehold improvements relating to the original location in the amount of $918,000 is being reflected as a reduction of deferred rent on a straight-line basis over the remaining lease term.

In addition, the Company recorded an impairment loss on the existing the furniture, fixtures and equipment in the amount of $8,000 which is included in depreciation and amortization expense for the year ended September 28, 2019.

The net book value of the existing leasehold improvements relating to the original location in the amount of $918,000 was reflected as a reduction of deferred rent on a straight-line basis over the remaining lease term.

During 2019, the Company was advised by the landlord of our food court at the Hard Rock Casino and Hotel in Tampa, Florida that they were exercising their right to renovate the front of the house space, at their sole cost, as contractually agreed to in the original lease.

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The Company recorded the value of the renovations made by the landlord, which includes leasehold improvements and furniture, fixtures and equipment, in the amount of $3,179,000 with a corresponding increase in deferred rent.

The net book value of the existing leasehold improvements relating to the original location in the amount of $459,000 is being reflected as a reduction of deferred rent on a straight-line basis over the remaining lease term.

In addition, the Company recorded an impairment loss on the existing furniture, fixtures and equipment in the amount of $123,000 which is included in depreciation and amortization expense for the year ended September 28, 2019.

The net book value of the existing leasehold improvements relating to the original location in the amount of $459,000 was reflected as a reduction of deferred rent on a straight-line basis over the remaining lease term.

On September 29, 2019, upon adoption of ASC 842, the unamortized Hollywood and Tampa balances of leasehold improvements and deferred rent in the amounts of $8,269,000 and $7,198,000, respectively, were reclassified as ROU assets in the net amount of $1,071,000 and are being amortized to lease expense on a straight-line basis over the remaining terms of the respective leases.

Prior to the COVID-19 pandemic, the Company was in the process of developing three restaurants at a large outdoor mall in Easton, Ohio in partnership with the landlord.

In connection therewith, the Company had capitalized costs of approximately $400,000, of which $200,000 was reimbursed by the landlord in October 2020.

The Company does not expect this project to continue.

Accordingly, the balance of these unreimbursed costs have been expensed to general and administrative expense as of October 3, 2020.

On October 2, 2020, the Company, through a newly formed, wholly-owned subsidiary, entered into an agreement to acquire the assets of Bear Ice, Inc.

and File Gumbo Inc., which collectively operate a restaurant and bar named Blue Moon Fish Company located in Lauderdale by the Sea, FL.

The transaction closed on December 1, 2020 with the total purchase price being $2,750,000 plus inventory and was paid with cash in the amount of $1,750,000 and a four year note held by the sellers in the amount of $1,000,000 payable monthly with 5% interest.

The acquisition will be accounted for as a business combination.

Concurrent with the acquisition, the Company assumed the related lease which expires in 2026 and has four, five-year extension options.

Rent payments under the lease are approximately $360,000 per year and increase by approximately 15% as each option is exercised.

The opening of a new restaurant is invariably accompanied by substantial pre-opening expenses and early operating losses associated with the training of personnel, excess kitchen costs, costs of supervision and other expenses during the pre-opening period and during a post-opening “shake out” period until operations can be considered to be functioning normally.

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We may take advantage of other opportunities we consider to be favorable, when they occur, depending upon the availability of financing and other factors.

Recent Restaurant Dispositions

As a result, included in the consolidated statement of operations for the year ended October 3, 2020 are losses on closure in the amount of $1,106,000 consisting of:

The restaurant closed on January 12, 2019.

On April 2, 2020, the Company advised the landlord of a catering space in New York, NY that we would be terminating the lease.

In connection with this notification, the Company recorded a loss of $364,000 at March 28, 2020, consisting of rent accrued in accordance with the termination provisions of the lease, the write-off of the unamortized balance of purchased leasehold rights, our security deposit and the net book value of fixed assets.

On November 13, 2020, the Company was advised by the landlord that it would have to vacate Gallagher’s Steakhouse and Gallagher’s Burger Bar at the Resorts Casino Hotel located in Atlantic City, NJ.

which were on a month-to-month, no rent lease.

The closure of this property will occur on January 4, 2020 and will not result in a material charge to the Company’s operations.

Investment in and Receivable from New Meadowlands Racetrack

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Such amount is subject to the same terms and conditions as the original loan as discussed above.

The principal and accrued interest related to this note in the amounts of $1,713,000 and $1,928,000, are included in Investment In and Receivable From New Meadowlands Racetrack in the consolidated balance sheets at September 28, 2019 and September 29, 2018, respectively.

The principal and accrued interest related to this note in the amounts of $1,766,000 and $1,713,000, are included in Investment In and Receivable From New Meadowlands Racetrack in the consolidated balance sheets at October 3, 2020 and September 28, 2019, respectively.

On June 7, 2018, the New Jersey State Legislature voted to legalize sports betting at casinos and racetracks in the state.

Pursuant to this legislation NMR opened a sports book in partnership with FanDuel, a leading provider of daily fantasy sports, in June 2018.

Recent Restaurant Dispositions and Charges

As a result, included in the consolidated statement of income for the year ended September 28, 2019 are losses on closure in the amount of $1,106,000 consisting of:

The restaurant closed on January 12, 2019.

Notes Payable – Bank

On June 1, 2018, the Company refinanced (the "Refinancing") its then existing indebtedness with its current lender, Bank Hapoalim B.M.

(“BHBM”), by entering into an amended and restated credit agreement (the “Revolving Facility”), which matures on May 31, 2021 (see Note 17 - Subsequent Events of the consolidated financial statements).

The Revolving Facility provides for total availability of the lesser of (i) $10,000,000 and (ii) $35,000,000 less the then aggregate amount of all indebtedness and obligations to BHBM.

Borrowings under the Revolving Facility are payable upon maturity of the Revolving Facility with interest payable monthly at LIBOR plus 3.5%, subject to adjustment based on certain ratios.

We expect that the LIBOR rate will be discontinued at some point during 2021 and to work with BHBM to identify a suitable replacement rate and amend our debt agreements to reflect this new reference rate accordingly.

We do not believe that the discontinuation of LIBOR as a reference rate in our debt agreements will have a material adverse effect on our financial position or materially affect our interest expense.

As of October 3, 2020 and September 28, 2019, borrowings of $9,666,000 (of which $6,300,000 are due on July 31, 2021 - see Note 17 - Subsequent Events of the consolidated financial statements) and $3,366,000, respectively, were outstanding under the Revolving Facility and had a weighted average interest rate of 3.0% and 4.9%, respectively.

Borrowings under the Revolving Facility, which include the promissory notes as discussed in Note 10 of the consolidated financial statements in the aggregate amount of $20,581,000, are secured by all tangible and intangible personal property (including accounts receivable, inventory, equipment, general intangibles, documents, chattel paper, instruments, letter-of-credit rights, investment property, intellectual property and deposit accounts) and fixtures of the Company.

The loan agreements provide, among other things, that the Company meet minimum quarterly tangible net worth amounts, as defined, maintain a fixed charge coverage ratio of not less than 1.1:1 and minimum annual net income amounts, and contain customary representations, warranties and affirmative covenants.

The agreements also contain customary negative covenants, subject to negotiated exceptions, on liens relating to other indebtedness, capital expenditures, liens, affiliate transactions, disposal of assets and certain changes in ownership.

On April 20, 2020, the Company entered into a Payment Suspension Agreement with BHBM which deferred all monthly interest payments through June 1, 2020 and deferred aggregate principal payments of $675,000 due on June 1, 2020 to the respective loan maturity dates.

On June 12, 2020, as a result of the impact of the COVID-19 pandemic on our business, BHBM agreed to relaxed financial covenants through fiscal Q3 2021.

In September 2020, the Company made principal payments in the amount of $675,000 that were due on June 1, 2020 that had been previously deferred.

The Company was in compliance with all of its financial covenants under the Revolving Facility as of October 3, 2020.

Paycheck Protection Program Loans

During the year ended October 3, 2020, subsidiaries (the “Borrowers”) of the Company received loan proceeds from several banks (the “Lenders”) in the aggregate amount of $14,995,000 (the “PPP Loans”) under the Paycheck Protection Program (the “PPP”) of the CARES Act, which was enacted March 27, 2020.

The PPP Loans are evidenced by individual promissory notes of each of the Borrowers (together, the “Notes”) in favor of the Lender, which Notes bear interest at the rate of 1.00% per annum.

Funds from the PPP Loans may be used only for payroll and related costs, costs used to continue group health care benefits, mortgage payments, rent, utilities, and interest on other debt obligations that were incurred by a Borrower prior to February 15, 2020 (the “Qualifying Expenses”).

Under the terms of the PPP Loans, some or all of the amounts thereunder, including accrued interest, may be forgiven if they are used for Qualifying Expenses as described in and in compliance with the CARES Act.

Each Note may be prepaid by the respective Borrower at any time prior to maturity with no prepayment penalties.

No payments of principal or interest are due under the Notes until the date on which the amount of loan forgiveness (if any) under the CARES Act for each respective Note is remitted to the Lender and a forgiveness decision is received by the Borrower.

Forgiveness applications can be submitted up to 10 months after the end of the related notes covered period (which is defined as 24 weeks after the date of the loan) (the “Deferral Period”) and the ultimate forgiveness decisions can be made by the Lenders up to 60 days after submitting the applications and possibly longer if forgiveness is fully or partially denied and the Borrower appeals the decision.

While the Company and each Borrower intends to use the PPP Loan proceeds exclusively for Qualifying Expenses, it is unclear and uncertain whether the conditions for forgiveness of the PPP Loans will be met under the current guidelines of the CARES Act.

Based on all of these factors, we cannot make any assurance that the Company, or any of the Borrowers, will be eligible for forgiveness of the PPP Loans, in whole or in part.

Accordingly, all amounts outstanding under the PPP Loans have been classified as long-term in the consolidated balance sheet as of October 3, 2020.

To the extent, if any, that any or all of the PPP Loans are not forgiven, beginning one month following expiration of the Deferral Period, and continuing monthly until 24 months from the date of each applicable Note (the “Maturity Date”), each respective Borrower is obligated to make monthly payments of principal and interest to the Lender with respect to any unforgiven portion of the Notes, in such equal amounts required to fully amortize the principal amount outstanding on such Notes as of the last day of the applicable Deferral Period by the applicable Maturity Date.

Each Borrower is permitted to prepay its respective Note at any time without payment of any premium.

Critical Accounting Policies

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Catering service revenue is generated through contracts with customers whereby the customer agrees to pay a contract rate for the service.

Revenues from catered events are recognized in income upon satisfaction of the performance obligation (the date the event is held) and all customer payments, including nonrefundable upfront deposits, are deferred as a liability until such time.

We recognized $13,817,000 and $12,878,000 in catering services revenue for the years ended September 28, 2019 and September 29, 2018, respectively.

Unearned revenue which is included in accrued expenses and other current liabilities on the consolidated balance sheets as of September 28, 2019 and September 29, 2018 was $4,549,000 and $4,439,000, respectively.

Revenues from catered events are recognized in income upon satisfaction of the performance obligation (the

date the event is held) and all customer payments, including nonrefundable upfront deposits, are deferred as a liability until such time.

We recognized $7,358,000 and $13,817,000 in catering services revenue for the years ended October 3, 2020 and September 28, 2019, respectively.

Unearned revenue which is included in accrued expenses and other current liabilities on the consolidated balance sheets as of October 3, 2020 and September 28, 2019 was $4,050,000 and $4,549,000, respectively.

Revenues from gift cards are deferred and recognized upon redemption.

Deferrals are not reduced for potential non-use as we generally have a legal obligation to remit the value of unredeemed gift cards to the relevant jurisdictions in which they are sold.

As of September 28, 2019 and September 29, 2018, the total liability for gift cards in the amounts of approximately $203,000 and $170,000, respectively, are included in accrued expenses and other current liabilities in the consolidated balance sheets.

As of October 3, 2020 and September 28, 2019, the total liability for gift cards in the amounts of approximately $227,000 and $203,000, respectively, are included in accrued expenses and other current liabilities in the consolidated balance sheets.

Other revenues include purchase service fees which represent commissions earned by a subsidiary of the Company for providing purchasing services to other restaurant groups, as well as license fees, property management fees and other rentals.

Reclassifications

Certain reclassifications of prior period amounts have been made to conform to the current period presentation.

The Company eliminated the presentation of restaurant operating income (loss) as a non-GAAP measure from its consolidated statements of operations.

Use of Estimates

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Long-lived assets, such as property, plant and equipment, and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

In the evaluation of the fair value and future benefits of long-lived assets, management continually evaluates unfavorable cash flows,

if any, related to underperforming restaurants.

In the evaluation of the fair value and future benefits of long-lived assets, management continually evaluates unfavorable cash flows, if any, related to underperforming restaurants.

Periodically it is concluded that certain properties have become impaired based on their existing and anticipated future economic outlook in their respective markets.

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As a result of the underperformance and increased competition at Clyde Frazier's Wine and Dine , we recorded an impairment charge of $2,857,000 in fiscal 2019 related to this property.

No impairment charges were warranted at September 29, 2018.

No impairment charges were warranted at October 3, 2020.

Recoverability of Investment in New Meadowlands Racetrack (“NMR”)

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We review our investment in NMR each reporting period to determine whether a significant event or change in circumstances has occurred that may have an adverse effect on its fair value.

As a result, we performed an assessment of the recoverability of our indirect investment in NMR as of September 28, 2019 which involved critical accounting estimates.

As a result, we performed an assessment of the recoverability of our indirect investment in NMR as of October 3, 2020 which involved critical accounting estimates.

These estimates require significant management judgment, include inherent uncertainties and are often interdependent;

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Furthermore, if management uses different assumptions or if different conditions occur in future periods, future impairment charges could result.

We recognize rent expense on a straight-line basis over the expected lease term, including option periods as described below.

Within the provisions of certain leases there are escalations in payments over the base lease term, as well as renewal periods.

The effects of the escalations have been reflected in rent expense on a straight-line basis over the expected lease term, which includes option periods when it is deemed to be reasonably assured that we would incur an economic penalty for not exercising the option.

Percentage rent expense is generally based upon sales levels and is expensed as incurred.

Certain leases include both base rent and percentage rent.

We record rent expense on these leases based upon reasonably assured sales levels.

The consolidated financial statements reflect the same lease terms for amortizing leasehold improvements as were used in calculating straight-line rent expense for each restaurant.

Our judgments may produce materially different amounts of amortization and rent expense than would be reported if different lease terms were used.

In February 2016, the FASB issued ASU No.

2016-02, Leases (Topic 842), which will require lessees to recognize assets and liabilities for leases with lease terms of more than 12 months.

Consistent with current GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease.

However, unlike current GAAP, which requires only capital leases to be recognized on the balance sheet, the new guidance will require both types of leases to be recognized on the balance sheet.

This guidance is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted.

In August 2018, the FASB issued ASU No.

2018-11, Leases (Topic 842):

Targeted Improvements, which permits adoption of the guidance in ASU 2016-02 using either a modified retrospective transition, requiring application at the beginning of the earliest comparative period presented or a transition method whereby companies could continue to apply existing lease guidance during the comparative periods and apply the new lease requirements through a cumulative-effect adjustment in the period of adoption rather than in the earliest period presented without adjusting historical financial statements.

We will adopt the new standard on September 29, 2019 and use the effective date of initial application.

Consequently, financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods before September 29, 2019.

The new standard provides a number of optional practical expedients in transition.

We expect to elect the "package of expedients", which permits us not to reassess under the new standard our prior conclusions about lease identification and initial direct costs.

We do not expect to elect the use of hindsight or the practical expedient pertaining to land easements, the latter not being applicable to the Company.

The new standard also provides practical expedients for the Company's ongoing accounting.

We currently expect to elect the short-term lease recognition exemption for all leases that qualify.

This means, for those leases that qualify, we will not recognize right-of-use assets or lease

liabilities, and this includes not recognizing right-of-use assets or lease liabilities for existing short-term leases of those assets in transition.

We expect the most significant change will be related to the recognition of right-of-use assets and lease liabilities on our consolidated balance sheet for real estate operating leases.

As a result of the adoption of this guidance, we anticipate that we will record right-of-use assets and lease liabilities ranging from $52 million to $56 million primarily related to our real estate operating leases.

We also expect that the adoption of this guidance will result in additional lease-related disclosures in the footnotes to our consolidated financial statements.

We determine if an arrangement contains a lease at inception.

An arrangement contains a lease if it implicitly or explicitly identifies an asset to be used and conveys the right to control the use of the identified asset in exchange for consideration.

As a lessee, we include operating leases in Operating lease right-of-use assets and Operating lease liabilities in our consolidated balance sheet.

Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease.

Operating lease right-of-use assets and liabilities are recognized upon commencement of the lease based on the present value of the lease payments over the lease term.

As most of our leases do not provide an implicit interest rate, we use our incremental borrowing rate based on the information available at commencement date to determine the present value of lease payments.

Our lease terms may include options to extend or terminate the lease.

Options are included when it is reasonably certain that we will exercise that option.

Lease expense for lease payments is recognized on a straight-line basis over the lease term.

Amendments or modifications to lease terms are accounted for as variable lease payments.

Leases with a lease term of 12 months or less are accounted for using the practical expedient which allows for straight-line rent expense over the remaining term of the lease.

In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") No.

2016-02, Leases (Topic 842), which amends the existing accounting standards for lease accounting, including requiring lessees to recognize assets and liabilities for leases with lease terms of more than 12 months.

The new guidance also requires additional disclosures about leases.

The Company adopted the new standard on September 29, 2019 (the first day of fiscal year 2020) using the modified retrospective approach, without restating comparative periods for those lease contracts for which we have taken possession of the property as of September 28, 2019.

Accordingly, prior period amounts were not revised and continue to be reported in accordance with ASC Topic 840 (“ASC 840”), the accounting standard then in effect.

As part of our adoption we elected the "package of practical expedients", as well as the hindsight practical expedient, permitted under the new guidance, which, among other things, allowed the Company to continue utilizing historical classifications of leases as well as allowing us to combine lease and non-lease components of our real estate leases.

We also elected to adopt the short-term lease exception for all leases with terms of 12 months or less and account for them using straight-line rent expense over the remaining life of the lease.

As a result of the adoption of this guidance, we recorded ROU assets of $62,330,000 and lease liabilities related to our real estate operating leases of $63,943,000.

The adoption of this standard did not materially impact retained earnings or our consolidated statement of operations and had no impact on cash flows.

Deferred Income Tax Valuation Allowance

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We assess the potential impairment of goodwill and trademarks annually (at the end of our fourth quarter) and on an interim basis whenever events or changes in circumstances indicate that the carrying value may not be recoverable.

If we determine through the impairment review process that goodwill or trademarks are impaired, we record an impairment charge in our consolidated statements of income.

If we determine through the impairment review process that goodwill or trademarks are impaired, we record an impairment charge in our consolidated statements of operations.

Such impairment analyses for goodwill requires a comparison of the fair value of the Company’s equity to the carrying amount of goodwill since the Company operates in one segment.

At September 28, 2019 and September 29, 2018, we performed qualitative assessments of factors to determine whether further impairment testing of goodwill was required.

Based on this assessment, no impairment losses were warranted at September 28, 2019 and September 29, 2018.

At October 3, 2020 and September 28, 2019, we performed qualitative assessments of factors to determine whether further impairment testing of goodwill was required.

Based on this assessment, no impairment losses were warranted at October 3, 2020 and September 28, 2019.

Qualitative factors considered in this assessment included industry and market considerations, overall financial performance and other relevant events, management expertise and stability at key positions.

Additional impairment analyses at future dates may be performed to determine if indicators of impairment are present, and if so, such amount will be determined and the associated charge will be recorded to the consolidated statements of income.

Our impairment analysis for trademarks consists of a comparison of the fair value to the carrying value of the assets.

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As of December 29, 2018, the Company recorded an impairment charge of $721,000 related to its Durgin-Park trademark as discussed above.

For the years ended September 28, 2019 and September 29, 2018, our impairment analysis did not result in any other charges related to trademarks.

For the years ended October 3, 2020 and September 28, 2019, our impairment analysis did not result in any other charges related to trademarks.

Stock-Based Compensation

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Recent Developments

See Note 15 of Notes to Consolidated Financial Statements for a description of recent developments that have occurred subsequent to September 28, 2019.

See Note 17 of Notes to Consolidated Financial Statements for a description of recent developments that have occurred subsequent to October 3, 2020.

Quantitative and Qualitative Disclosures About Market Risk

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What changed 10-K

Item 7. Management’s Discussion and Analysis