What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2021-12-21 compared with 2020-12-22 · 223 added, 264 removed, 763 unchanged (39% of the section changed)

Item 9A Controls and Procedures

Controls and Procedures

Evaluation of Disclosure Controls and Procedures

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Changes in Internal Control Over Financial Reporting

As a result of governmental imposed closures of all of our facilities due to the COVID-19 pandemic, we have had to make changes to the operating methods of some of our internal controls.

For example, moving from manual sign-offs / in-person meetings to electronic sign-offs and electronic communications such as email and telephonic / or video conference due to out-of-office working arrangements.

However, the design of our internal control framework/objectives over financial reporting is unchanged and the Company does not believe that these changes have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during the fourth quarter of fiscal 2021 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Limitations of the Effectiveness of Internal Control

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The information required by this item is incorporated herein by reference to the Proxy Statement which will be filed no later than 120 days after October 2, 2021.

Exhibits and Financial Statement Schedules

Exhibits and Financial Statement Schedule

(a) (1) Financial Statements:

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Consolidated Balance Sheets --

at October 3, 2020 and September 28, 2019

at October 2, 2021 and October 3, 2020

Consolidated Statements of Operations –

years ended October 3, 2020 and September 28, 2019

years ended October 2, 2021 and October 3, 2020

Consolidated Statements of Changes in Equity --

years ended October 3, 2020 and September 28, 2019

years ended October 2, 2021 and October 3, 2020

Consolidated Statements of Cash Flows --

years ended October 3, 2020 and September 28, 2019

years ended October 2, 2021 and October 3, 2020

Notes to Consolidated Financial Statements

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We have audited the accompanying consolidated balance sheets of Ark Restaurants Corp.

and Subsidiaries (the “Company”) as of October 3, 2020 and September 28, 2019, and the related consolidated statements of operations, changes in equity, and cash flows for each of the years in the two-year period ended October 3, 2020, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of October 3, 2020 and September 28, 2019, and the results of its operations and its cash flows for each of the years in the two-year period ended October 3, 2020, in conformity with accounting principles generally accepted in the United States of America.

and subsidiaries (the “Company”) as of October 2, 2021 and October 3, 2020 and the related consolidated statements of operations, changes in equity, and cash flows for each of the years in the two-year period ended October 2, 2021, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of October 2, 2021 and October 3, 2020, and the results of its operations and its cash flows for each of the two years in the two-year period ended October 2, 2021, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S.

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We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

(1) related to accounts or disclosures that are material to the consolidated financial statements and (2) involved especially challenging, subjective, or complex judgements.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matters or on the accounts or disclosures to which they relate.

Long-lived Asset Valuation

As discussed in Note 6 to the consolidated financial statements, the Company utilizes projections of future cash flows to determine if there are indications of impairment of long-lived assets, specifically, land, buildings, equipment and right-of-use assets which totaled $92,510,000 as of October 2, 2021.

The Company tests for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable.

Such indicators may include, among others:

a significant decline in future cash flows and changes in expected useful life which relates to the Company’s ability and intent to hold its asset groups for a period of time that recovers their carrying value.

We identified the valuation of certain long-lived assets to be a critical audit matter.

The valuation is based upon undiscounted future cash flows related to certain long-lived assets, specifically, land, buildings, equipment and right-of-use assets.

judgments were required to evaluate subjective assumptions in the Company’s analysis of undiscounted cash flows.

These included estimated future revenue and operating expenses from restaurant locations.

Adverse changes in the assumptions could have a significant impact on whether an indicator of impairment has been identified and could have a material impact on the Company’s consolidated financial statements.

The following are the primary procedures we performed to address this critical audit matter.

We obtained an understanding for the Company’s process for determining indicators of impairment of long-lived assets and the Company’s evaluation of impairment when indicators arose.

We reviewed the minutes of board of director meetings to determine any potential closures of locations that would affect future cash flows and corroborated management’s plans with others in the organization who are responsible for, and have authority over, disposition and closure activities.

We visited the site of any locations that were considered high risk for potential impairment.

We evaluated the reasonableness of the Company’s forecasted revenues, operating results and cash flows by performing an independent sensitivity analysis related to the key inputs to forecasted cash flows, including estimated revenue growth rates, margins and operating expenses, to evaluate whether the changes in the assumptions would result in a material change in fair value of related long-lived assets.

/s/ CohnReznick LLP

We have served as the Company’s auditors since 2004.

Jericho, New York

Melville, New York

December 21, 2021

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(In Thousands, Except Per Share Amounts)

2020 September 28,

2021 October 3,

CURRENT ASSETS:

Cash and cash equivalents (includes $ 567 at October 3, 2020 and $ 170 at September 28,

Cash and cash equivalents (includes $ 785 at October 2, 2021 and $ 567 at October 3, 2020

related to VIEs)

$ 19,171 $ 16,886

Accounts receivable (includes $ 162 at October 3, 2020 and $ 219 at September 28, 2019

Accounts receivable (includes $ 358 at October 2, 2021 and $ 162 at October 3, 2020

related to VIEs)

Employee receivables 380 385

Inventories (includes $ 27 at October 3, 2020 and $ 41 at September 28, 2019 related to

Inventories (includes $ 35 at October 2, 2021 and $ 27 at October 3, 2020 related to VIEs)

Prepaid and refundable income taxes (includes $ 278 at October 2, 2021 and $ 274 at

September 28, 2019 related to VIEs)

October 3, 2020 related to VIEs)

Prepaid expenses and other current assets (includes $ 277 at October 2, 2021 and $ 13 at

September 28, 2019 related to VIEs)

October 3, 2020 related to VIEs)

Total current assets 34,275 26,901

FIXED ASSETS - Net (includes $ 241 at October 3, 2020 and $ 236 at September 28, 2019

FIXED ASSETS - Net (includes $ 218 at October 2, 2021 and $ 241 at October 3, 2020

related to VIEs)

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OPERATING LEASE RIGHT-OF-USE ASSETS - Net (includes $ 2,342 at October 2, 2021

related to VIEs)

and $ 2,658 at October 3, 2020 related to VIEs)

56,336 54,191

INTANGIBLE ASSETS - Net 376 49

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INVESTMENT IN AND RECEIVABLE FROM NEW MEADOWLANDS RACETRACK 6,425 6,874

OTHER ASSETS (includes $ 82 at October 3, 2020 and September 28, 2019 related to

OTHER ASSETS (includes $ 82 at October 2, 2021 and October 3, 2020 related to VIEs)

TOTAL ASSETS $ 161,216 $ 153,316

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CURRENT LIABILITIES:

Accounts payable - trade (includes $ 119 at October 3, 2020 and $ 65 at September 28,

Accounts payable - trade (includes $ 213 at October 2, 2021 and $ 119 at October 3, 2020

related to VIEs)

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Accrued expenses and other current liabilities (includes $ 374 at October 2, 2021 and

$ 440 at September 28, 2019 related to VIEs)

$ 331 at October 3, 2020 related to VIEs)

13,679 12,688

Accrued income taxes — 285

Dividend payable — 875

Current portion of operating lease liabilities (includes $ 226 at October 3, 2020 related to

Current portion of notes payable 9,001 2,701

Current portion of operating lease liabilities (includes $ 249 at October 2, 2021 and $ 226 at

October 3, 2020 related to VIEs)

Current portion of notes payable (includes $ 95 at October 2, 2021 related to VIEs)

Total current liabilities 31,703 30,135

OPERATING LEASE DEFERRED CREDIT (includes $( 30 ) at September 28, 2019 related

OPERATING LEASE LIABILITIES, LESS CURRENT PORTION (includes $ 2,193 at

October 3, 2020 related to VIEs)

October 2, 2021 and $ 2,442 at October 3, 2020 related to VIEs)

52,552 49,960

NOTES PAYABLE, LESS CURRENT PORTION, net of deferred financing costs (includes

$ 723 at October 3, 2020 related to VIEs)

$ 101 at October 2, 2021 and $ 723 at October 3, 2020 related to VIEs)

25,509 36,068

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Common stock, par value $ 0.01 per share - authorized, 10,000 shares;

outstanding, 3,502 shares at October 3, 2020 and 3,499 shares at September 28, 2019

outstanding, 3,551 shares at October 2, 2021 and 3,502 shares at October 3, 2020

Additional paid-in capital 14,492 13,503

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(In Thousands, Except Per Share Amounts)

2020 September 28,

2021 October 3,

Food and beverage sales $ 128,988 $ 104,062

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General and administrative expenses 10,523 10,160

(Gain) loss on lease termination ( 810 ) 364

Depreciation and amortization 3,630 4,056

Loss on termination of lease 364 —

Loss on closure of Durgin-Park — 1,106

Impairment loss from write-down of long-lived assets — 2,857

Total costs and expenses 125,663 114,286

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Other income — ( 88 )

Total other expense, net 1,207 1,376

INCOME (LOSS) BEFORE BENEFIT FOR INCOME TAXES ( 9,003 ) 1,870

Benefit for income taxes ( 4,385 ) ( 591 )

Gain on forgiveness of PPP Loans ( 10,400 ) —

Total other (income) expense, net ( 9,221 ) 1,207

INCOME (LOSS) BEFORE PROVISION (BENEFIT) FOR INCOME TAXES 15,428 ( 9,003 )

Provision (benefit) for income taxes 1,181 ( 4,385 )

CONSOLIDATED NET INCOME (LOSS) 14,247 ( 4,618 )

Net (income) loss attributable to non-controlling interests ( 70 ) 215

Net income attributable to non-controlling interests ( 1,352 ) ( 70 )

NET INCOME (LOSS) ATTRIBUTABLE TO ARK RESTAURANTS CORP.

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CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE YEARS ENDED OCTOBER 3, 2020 AND SEPTEMBER 28, 2019

FOR THE YEARS ENDED OCTOBER 2, 2021 AND OCTOBER 3, 2020

(In Thousands, Except Per Share Amounts)

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Exercise of stock options 3 — 50 — 50 — 50

Purchase and retirement of

treasury shares ( 12 ) — ( 235 ) — ( 235 ) — ( 235 )

Stock-based compensation — — 176 — 176 — 176

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interests — — — — — ( 287 ) ( 287 )

Dividends paid and accrued -

$ 1.00 per share

Dividends paid - $ 0.25 per share

— — — ( 875 ) ( 875 ) — ( 875 )

BALANCE - September 28, 2019 3,499 35 13,277 28,552 41,864 843 42,707

Net income (loss) — — — ( 4,688 ) ( 4,688 ) 70 ( 4,618 )

BALANCE - October 3, 2020 3,502 35 13,503 22,989 36,527 626 37,153

Net income — — — 12,895 12,895 1,352 14,247

Exercise of stock options 49 1 709 — 710 — 710

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interests — — — — — ( 938 ) ( 938 )

Dividends paid - $ 0.25 per share

— — — ( 875 ) ( 875 ) — ( 875 )

BALANCE - October 2, 2021 3,551 $ 36 $ 14,492 $ 35,884 $ 50,412 $ 1,040 $ 51,452

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(In Thousands)

2020 September 28,

2021 October 3,

CASH FLOWS FROM OPERATING ACTIVITIES:

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Stock-based compensation 280 176

Asset impairment on closure of Durgin-Park — 1,067

Impairment loss from write-down of long-lived assets — 2,857

Loss on termination of lease 364 —

(Gain) loss on lease termination ( 810 ) 364

Gain on forgiveness of PPP Loans ( 10,400 ) —

Deferred income taxes 2,197 ( 1,791 )

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Payments received on employee receivables 97 126

Interest payments received from NMR — 276

Purchase of JB's on the Beach, net of cash acquired — ( 25 )

Principal and interest payments received from NMR 500 —

Purchase of The Blue Moon Fish Company, net of cash acquired ( 1,817 ) —

Net cash used in investing activities ( 3,450 ) ( 2,457 )

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Borrowings under credit facility — 6,300

Repayments of borrowings under credit facility — ( 650 )

Proceeds from PPP Loans 111 14,995

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Income taxes $ 8 $ 219

Non-cash investing activities:

Landlord provided fixed assets $ — $ 8,653

Non-cash financing activities:

Note payable in connection with the purchase of JB's on the Beach $ — $ 7,000

Note payable in connection with the purchase of The Blue Moon Fish Company $ 1,000 $ —

Refinancing of credit facility borrowings to term notes $ 9,666 $ —

Accrued dividend $ — $ 875

Accrued distributions to non-controlling interests $ — $ 150

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

The Company operates five restaurants in New York City, two in Washington, D.C., five in Las Vegas, Nevada, three in Atlantic City, New Jersey, three in Florida and two on the gulf coast of Alabama.

The Company operates four restaurants in New York City, one in Washington, D.C., five in Las Vegas, Nevada, one in Atlantic City, New Jersey, four in Florida and two on the gulf coast of Alabama.

The Las Vegas operations include four restaurants within the New York-New York Hotel & Casino Resort and operation of the hotel’s room service, banquet facilities, employee dining room and six food court concepts and one restaurant within the Planet Hollywood Resort and Casino.

In Atlantic City, New Jersey, the Company operates a restaurant and a bar in the Resorts Atlantic City Hotel and Casino and a restaurant in the Tropicana Hotel and Casino.

In Atlantic City, New Jersey, the Company operates a restaurant in the Tropicana Hotel and Casino.

The operation at the Foxwoods Resort Casino consists of one fast food concept.

The Florida operations include The Rustic Inn in Dania Beach, Shuckers in Jensen Beach, JB's on the Beach in Deerfield Beach, and the operation of four fast food facilities in Tampa and six fast food facilities in Hollywood, each at a Hard Rock Hotel and Casino.

The Florida operations include The Rustic Inn in Dania Beach, Shuckers in Jensen Beach, JB's on the Beach in Deerfield Beach, The Blue Moon Fish Company in Fort Lauderdale and the operation of four fast food facilities in Tampa and six fast food facilities in Hollywood, each at a Hard Rock Hotel and Casino.

In Alabama, the Company operates two Original Oyster Houses , one in Gulf Shores and one in Spanish Fort.

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 (see Note 17 - Subsequent Events).

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, and has a working capital deficiency of $ 3,234,000 as of October 3, 2020, all of 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) 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).

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, as 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 position, 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.

COVID-19 PANDEMIC — We are subject to continued risks and uncertainties as a result of the outbreak of, and local, state and federal governmental responses to, the COVID-19 pandemic which was declared a National Public Health Emergency in March 2020.

We experienced significant disruptions to our business as suggested and mandated social distancing and shelter-in-place orders led to the temporary closure of all of our restaurants.

In the third quarter of fiscal 2020, certain jurisdictions began allowing the reopening of restaurant dining rooms, and we began to reopen dining rooms.

While restrictions on the type of permitted operating model and occupancy capacity may continue to change, as of October 2, 2021, all of our restaurants were operating with no indoor dining restrictions.

We cannot predict how long the COVID-19 pandemic will last, whether vaccines will be effective at eliminating or slowing the spread of the virus or variants, whether it will reoccur or whether variants will spike, what additional restrictions may be enacted, to what extent we can maintain sales volumes during or following any resumption of mandated social distancing protocols or vaccination or mask mandates and what long-lasting effects the COVID-19 pandemic may have on the restaurant industry as a whole.

The ongoing effects of the COVID-19 pandemic, including, but not limited to, labor-related impacts, supply chain disruption and consumer behavior, will determine the continued significance of the impact of the COVID-19 pandemic to our operating results and financial position.

Basis of Presentation — The accompanying consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and accounting principles generally accepted in the United States of America (“GAAP”).

The Company’s reporting currency is the United States dollar.

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.

Accounting Period — The Company’s fiscal year ends on the Saturday nearest September 30.

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

The fiscal years ended October 2, 2021 and October 3, 2020 included 52 and 53 weeks, respectively.

Use of Estimates — The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities, at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

The accounting estimates that require management’s most difficult and subjective judgments include projected cash flow, allowances for potential bad debts on receivables, assumptions regarding discount rates related to lease accounting, the useful lives and recoverability of its assets, such as property and intangibles, fair values of financial instruments and share-

based compensation, the realizable value of its tax assets and determining when investment impairments are other-than-temporary.

Because of the uncertainty in such estimates, actual results may differ from these estimates.

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All significant intercompany balances and transactions have been eliminated in consolidation.

Non-Controlling Interests — Non-controlling interests represent capital contributions, income and loss attributable to the shareholders of less than wholly-owned and consolidated entities.

Non-Controlling Interests — Non-controlling interests represent capital contributions, distributions and income and loss attributable to the shareholders of less than wholly-owned and consolidated entities.

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

The first and second fiscal quarters, which include the winter months, usually reflect lower customer traffic than in the third and fourth fiscal quarters.

However, sales in the third and fourth fiscal quarters can be adversely affected by inclement weather due to the significant amount of outdoor seating at the Company’s restaurants.

Although our business is highly seasonal, our broader geographical reach as a result of recent acquisitions mitigates some of the risk.

For instance, the second quarter of our fiscal year, consisting of the non-holiday portion of the cold weather season in New York and Washington (January, February and March), is the poorest performing quarter;

however, in recent years this has been partially offset by our locations in Florida as they experience increased results in the winter months.

We generally achieve our best results during the warm weather, attributable to our extensive outdoor dining availability, particularly at Bryant Park in New York and Sequoia in Washington, D.C.

(our largest restaurants) and our outdoor cafes.

However, even during summer months these facilities can be adversely affected by unusually cool or rainy weather conditions.

Our facilities in Las Vegas are indoor and generally operate on a more consistent basis throughout the year.

Fair Value of Financial Instruments — The carrying amount of cash and cash equivalents, receivables, accounts payable and accrued expenses approximate fair value due to the immediate or short-term maturity of these financial instruments.

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The concentration of credit risk with respect to accounts receivable is generally limited due to the short payment terms extended by the Company and the number of customers comprising the Company’s customer base.

As of October 2, 2021, the Company had accounts receivable balances due from one hotel operator totaling 37 % of total accounts receivable.

As of October 3, 2020, the Company had accounts receivable balances due from two hotel operators totaling 46 % of total accounts receivable.

As of September 28, 2019, the Company had accounts receivable balances due from one hotel operator totaling 34 % of total accounts receivable.

For the years ended October 3, 2020 and September 28, 2019, the Company made purchases from one vendor that accounted for 11 % and 12 % of total purchases, respectively.

As of October 3, 2020, all debt outstanding, other than Paycheck Protection Program loans, is with one lender (see Note 10 – Notes Payable).

For the year ended October 2, 2021, the Company made purchases from two vendors that accounted for 21 % of total purchases.

For the year ended October 3, 2020, the Company made purchases from one vendor that accounted for 11 % of total purchases.

As of October 2, 2021, all debt outstanding, other than Paycheck Protection Program loans and the note payable to the sellers of The Blue Moon Fish Company , is with one lender (see Note 10 – Notes Payable).

Inventories — Inventories are stated at the lower of cost (first-in, first-out) or net realizable value, and consist of food and beverages, merchandise for sale and other supplies.

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Start-up costs incurred during the construction period of restaurants, including rental of premises, training and payroll, are expensed as incurred.

Intangible Assets — Intangible assets consist principally of purchased leasehold rights, operating rights and covenants not to compete.

Costs associated with acquiring leases and subleases, principally purchased leasehold rights, and operating rights have been capitalized and are being amortized on the straight-line method based upon the initial terms of the applicable lease agreements.

Covenants not to compete arising from restaurant acquisitions are amortized over the contractual period, typically five years .

Long-Lived and Right-Of-Use Assets — Long-lived assets, such as property and plant and equipment subject to amortization, and right-of-use assets ("ROU assets") are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

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If actual performance does not achieve the projections, or if the assumptions used change in the future, the Company may be required to recognize impairment charges in future periods, and such charges could be material.

Based on the results of this analysis, the Company recognized an impairment charge of $ 364,000 related to long-lived assets and ROU assets during the year ended October 3, 2020 (see Note 4 – Recent Restaurant Dispositions).

The Company recognized impairment charges related to long-lived and ROU assets during the years ended October 2, 2021 and October 1, 2020 as described in Note 4 – Recent Restaurant Dispositions.

Given the inherent uncertainty in projecting results of restaurants under the current circumstances, particularly taking into account the projected impact of the COVID-19 pandemic, the Company is monitoring the recoverability of the carrying value of the assets of several restaurants on an ongoing basis.

For these restaurants, if expected performance is not realized, an impairment charge may be recognized in future periods, and such charge could be material.

Intangible Assets — Intangible assets consist principally of purchased leasehold rights, operating rights and covenants not to compete.

Covenants not to compete arising from restaurant acquisitions are amortized over the contractual period, typically five years .

Goodwill and Trademarks — Goodwill and trademarks are not amortized, but are subject to impairment analysis.

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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.

Due to the recent impact of the COVID-19 pandemic to the global economy, including but not limited to, the volatility of the Company's stock price, temporary closure of the Company's restaurants and the challenging environment for the restaurant industry in general, the Company determined that there were indicators of potential impairment of its goodwill and trademarks during the year ended October 3, 2020.

As such, the Company performed a qualitative and quantitative assessment for both goodwill and its trademarks and concluded that the fair value of these assets exceeded their carrying values.

Accordingly, the Company did not record any impairment to its goodwill or trademarks during the year ended October 3, 2020.

Accordingly, the Company did not record any impairment to its goodwill or trademarks during the years ended October 2, 2021 and October 3, 2020.

The ultimate severity and longevity of the COVID-19 pandemic is unknown, and therefore, it is possible that impairments could be identified in future periods, and such amounts could be material.

As of December 29, 2018, the Company recorded an impairment charge of $ 721,000 related to its Durgin-Park trademark (see Note 4 - Recent Restaurant Dispositions).

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

Investments – Each reporting period, the Company reviews its investments in equity and debt securities, except for those classified as trading, to determine whether a significant event or change in circumstances has occurred that may have an adverse effect on the fair value of such investment.

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If management determines the decline is other than temporary, an impairment charge is recorded.

Management’s assessment as to the nature of a decline in fair value is based on, among other things, the length of time and the extent to which the market value has been less than the cost basis;

Management’s assessment as to the nature of a decline in fair value is based on, among other

things, the length of time and the extent to which the market value has been less than the cost basis;

the financial condition and near-term prospects of the issuer;

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All customer payments, including nonrefundable upfront deposits, are deferred as a liability until such time.

The Company 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 $ 3,661,000 and $ 4,549,000 , respectively.

The Company recognized $ 3,240,000 and $ 7,358,000 in catering services revenue for the years ended October 2, 2021 and October 3, 2020, respectively.

Unearned revenue which is included in accrued expenses and other current liabilities on the consolidated balance sheets as of October 2, 2021 and October 3, 2020 was $ 4,988,000 and $ 3,661,000 , 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 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.

As of October 2, 2021 and October 3, 2020, the total liability for gift cards in the amounts of approximately $ 252,000 and $ 227,000 , 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 services to other restaurant groups, as well as license fees, property management fees and other rentals.

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Company contributions to the Plan are at the discretion of the Board of Directors.

During the years ended October 3, 2020 and September 28, 2019, the Company did not make any contributions to the Plan.

During the years ended October 2, 2021 and October 3, 2020, the Company did not make any contributions to the Plan.

Income Taxes — Income taxes are accounted for under the asset and liability method whereby deferred tax assets and liabilities are recognized for future tax consequences attributable to the temporary differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards.

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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.

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 had 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.

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Such adoption did not have a material impact on our consolidated financial statements.

New Accounting Standards Not Yet Adopted — In January 2017, the FASB issued ASU No.

In January 2017, the FASB issued ASU No.

2017-04, Intangibles—Goodwill and Other (Topic 350)—Simplifying the Test for Goodwill Impairment (“ASU 2017-04”).

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However, the impairment loss recognized should not exceed the total amount of goodwill allocated to that reporting unit.

ASU 2017-04 is effective for annual reporting periods beginning after December 15, 2019, including any interim impairment tests within those annual periods, with early application permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017.

The Company will adopt this guidance in the first quarter of fiscal 2021 does not expect it to have a material impact on our consolidated financial statements.

In December 2019, the FASB issued ASU No.

The Company adopted this guidance in the first quarter of fiscal 2021.

Such adoption did not have a material impact on our consolidated financial statements.

New Accounting Standards Not Yet Adopted — In December 2019, the FASB issued ASU No.

2019-12, Income Taxes (Topic 740):

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Following are the required disclosures associated with the Company’s consolidated VIEs:

2020 September 28,

2021 October 3,

(in thousands)

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Current portion of operating lease liabilities 249 226

Operating lease deferred credit — ( 30 )

Current portion of notes payable 95 —

Operating lease liabilities, less current portion 2,193 2,442

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RECENT RESTAURANT EXPANSION AND OTHER DEVELOPMENTS

On May 15, 2019, the Company, through a newly formed, wholly-owned subsidiary, acquired the assets of JB's on the Beach , a restaurant and bar located in Deerfield Beach, Florida for $ 7,036,000 as set out below.

The acquisition is accounted for as a business combination and was financed with a bank loan from the Company’s existing lender in the amount of $ 7,000,000 and cash from operations.

The fair values of the assets acquired, none of which are amortizable, were allocated as follows (amounts in thousands):

Furniture, fixtures and equipment 200

On December 1, 2020, the Company, through a newly formed, wholly-owned subsidiary, acquired the assets of Bear Ice, Inc.

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

The total purchase price of $ 2,820,000 , as set out below, was paid with cash in the amount of $ 1,820,000 and a four-year note held by the sellers in the amount of $ 1,000,000 payable monthly with 5 % interest.

The acquisition was 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 15 % as each option is exercised.

The fair values of the assets acquired were allocated as follows (amounts in thousands):

Security deposit 30

Trademarks 500

Non-compete agreement 380

Goodwill 1,870

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Goodwill recognized in connection with this transaction represents the residual amount of the purchase price over separately identifiable intangible assets and is expected to be deductible for tax purposes.

Concurrent with the acquisition, the Company entered into a 20 year lease (with a five year option) for the restaurant facility and parking lot with the former owner of JB's on the Beach , who is also the owner of the underlying real estate.

Rent payments under the lease are $ 600,000 per year with 10 % increases every five years .

The consolidated statements of operations for the year ended October 3, 2020 includes revenues and operating income of approximately $ 7,489,000 and $ 169,000 , respectively, related to JB's on the Beach .

The unaudited pro forma financial information set forth below is based upon the Company's historical consolidated statements of operations for the year ended September 28, 2019 and includes the results of operations for JB's on the Beach for the period prior to acquisition.

The unaudited pro forma financial information, which has been adjusted for rent payments under the lease discussed above as well as interest expense of the term loan, is presented for informational purposes only and may not be indicative of what actual results of operations would have been had the acquisition of JB's on the Beach occurred on the dates indicated, nor does it purport to represent the results of operations for future periods (amounts in thousands, except per share amounts).

September 28,

The consolidated statement of operations for the year ended October 2, 2021 includes revenues and net income of approximately $ 5,929,000 and $ 981,000 , respectively, related to Blue Moon Fish Company .

The unaudited pro forma financial information set forth below is based upon the Company’s historical consolidated statements of operations for the years ended October 2, 2021 and October 3, 2020 and includes the results of operations for Blue Moon Fish Company for the period prior to acquisition.

The unaudited pro forma financial information (which is presented in thousands except per share and share data), which has been adjusted for interest expense on the above-mentioned note, is presented for informational purposes only and may not be indicative of what actual results of operations would have been had the acquisition of Blue Moon Fish Company occurred on the dates indicated, nor does it purport to represent the results of operations for future periods.

2021 October 3,

Total revenues $ 132,547 $ 110,700

Net income $ 3,336

Net income per share - basic $ 0.96

Net income per share - diluted $ 0.94

Weighted average number of common shares outstanding:

Diluted 3,531

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

The new facilities were completed on September 16, 2019 on which date we closed our existing location and opened the new facilities.

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.

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.

In connection with this renovation we closed our existing facilities on June 2, 2019 and re-opened the renovated facilities on October 3, 2020.

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.

On September 29, 2019, upon the 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.

Net income (loss) $ 12,926 $ ( 4,303 )

Net income (loss) per share - basic $ 3.68 $ ( 1.23 )

Net income (loss) per share - diluted $ 3.59 $ ( 1.23 )

Shares - Basic 3,516 3,500

Shares - Diluted 3,604 3,500

On January 26, 2021, the Company exercised its right-of-first-refusal to acquire the land, building and parking lot associated with JB’s on the Beach and immediately contributed such rights and interest to an unrelated entity ("Newco") that purchased the properties on March 22, 2021.

In exchange, the Company received a 5 % interest in Newco, which plans future development of the sites.

In addition, all rights and privileges under the current lease were assigned to Newco, as landlord and the lease terms remain unchanged.

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.

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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.

Accordingly, the balance of the unreimbursed costs in the amount of $ 200,000 were written off and are included in general and administrative expenses for the year ended October 3, 2020.

RECENT RESTAURANT DISPOSITIONS

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 operation for the year ended September 28, 2019 are losses on closure in the amount 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.

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 year ended October 3, 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 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 these properties occurred on January 2, 2021 and did not result in a material charge to the Company’s operations.

As of January 2, 2021, the Company determined that it would not reopen Thunder Grill in Washington, D.C.

which had been closed since March 20, 2020.

This closure did not result in a material charge to the Company’s operations.

On September 1, 2021, the Company advised the landlord of Clyde Frazier's Wine and Dine that we would be closing the property permanently and terminating the lease.

In connection with this notification, the Company recorded a gain of $ 810,000 during the year ended October 2, 2021 consisting of:

(i) rent and other costs incurred in accordance with the termination provisions of the lease in the amount of $ 318,000 , (ii) impairment of long-lived assets in the amount of $ 69,000 and (iii) the write-off of our security deposit in the amount of $ 121,000 offset by the write-off of ROU assets and related lease liabilities in the net amount of $ 1,318,000 .

INVESTMENT IN AND RECEIVABLE FROM NEW MEADOWLANDS RACETRACK

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There are no observable prices for this investment.

Due to the recent impact of the COVID-19 pandemic to the global economy, including but not limited to the temporary closure of the NMR facility, the Company evaluated its investment in NMR for impairment and concluded that its fair value exceeds the carrying value.

Accordingly, the Company did not record any impairment during the year ended October 3, 2020.

Due to the impacts of the COVID-19 pandemic on the global economy, the Company evaluated its investment in NMR for impairment and concluded that its fair value exceeds the carrying value.

Accordingly, the Company did not record any impairment for the years ended October 2, 2021 and October 3, 2020.

The ultimate severity and longevity of the COVID-19 pandemic is unknown, and therefore, it is possible that impairments could be identified in future periods, and such amounts could be material.

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The Company’s maximum exposure to loss as a result of its involvement with AM VIE is limited to a receivable from AM VIE’s primary beneficiary (NMR, a related party).

As of October 3, 2020 and September 28, 2019, no amounts were due AM VIE by NMR.

As of October 2, 2021 and October 3, 2020, no amounts were due AM VIE by NMR.

On April 25, 2014, the Company loaned $ 1,500,000 to Meadowlands Newmark, LLC.

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

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.

The principal and accrued interest related to this note, after a $ 500,000 payment made in July 2021, in the amounts of $ 1,317,000 and $ 1,766,000 , are included in Investment In and Receivable From New Meadowlands Racetrack in the consolidated balance sheets at October 2, 2021 and October 3, 2020, respectively.

Fixed assets consist of the following:

2020 September 28,

2021 October 3,

(in thousands)

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Fixed Assets - Net $ 36,174 $ 37,682

Depreciation and amortization expense related to fixed assets for the years ended October 3, 2020 and September 28, 2019 was $ 3,910,000 and $ 5,056,000 , respectively.

Depreciation and amortization expense related to fixed assets for the years ended October 2, 2021 and October 3, 2020 was $ 3,577,000 and $ 3,910,000 , respectively.

Management continually evaluates unfavorable cash flows, if any, related to underperforming restaurants.

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Estimated fair values of impaired properties are based on comparable valuations, cash flows and/or management judgment.

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

Included in the year ended October 2, 2021 is an impairment charge of $ 69,000 related to Clyde Frazier's Wine and Dine (see Note 4).

INTANGIBLE ASSETS, GOODWILL AND TRADEMARKS

Intangible assets consist of the following:

2020 September 28,

2021 October 3,

(in thousands)

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(a) Purchased leasehold rights arose from acquiring leases and subleases of various restaurants.

Amortization expense related to intangible assets for the years ended October 3, 2020 and September 28, 2019 was $ 146,000 , which includes the write-off of the unamortized balance of leasehold rights related to a catering space in New York in the amount of $ 137,000 , and $ 46,000 , respectively.

Amortization expense related to intangible assets for the years ended October 2, 2021 and October 3, 2020 was $ 53,000 and $ 146,000 , respectively, which includes the write-off of the unamortized balance of leasehold rights related to a catering space in New York in the amount of $ 137,000 for the year ended October 3, 2020.

Amortization expense for each of the next five years is expected to be $ 85,000 .

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Trademarks, which have indefinite lives, are not currently amortized and are tested for impairment annually or when facts or circumstances indicate a possible impairment as a result of a continual decline in performance or as a result of fundamental changes in a market.

The changes in the carrying amount of goodwill and trademarks for the years ended October 3, 2020 and September 28, 2019 are as follows:

The changes in the carrying amount of goodwill and trademarks for the years ended October 2, 2021 and October 3, 2020 are as follows:

Goodwill Trademarks

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Impairment losses — —

Balance as of September 28, 2019 15,570 3,720

Balance as of October 3, 2020 15,570 3,720

Acquired during the year 1,870 500

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Accrued expenses and other current liabilities consist of the following:

2020 September 28,

2021 October 3,

(in thousands)

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All of our real estate leases are classified as operating leases.

We do not have any finance leases as of October 3, 2020.

We do not have any finance leases as of October 2, 2021 or October 3, 2020.

Generally, our real estate leases have initial terms ranging from 10 to 25 years and typically include renewal options.

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During the third quarter of 2020, the Company suspended the vast majority of lease payments while its restaurants were closed by government mandated shutdowns as a result of the COVID-19 pandemic.

The Company was able to negotiate rent concessions, abatements and deferrals with landlords on many of our operating leases and several negotiations are still ongoing.

The Company was able to negotiate rent concessions, abatements and deferrals with landlords on many of our operating leases.

In July 2020, the FASB issued a clarification to accounting for lease concessions in response to the COVID-19 pandemic to reduce the operational challenges and complexity of lease accounting.

The Company used the relief provisions provided by FASB and made an election to account for the lease concessions as if they were part of the original lease agreement.

The recognition of rent concessions did not have a material impact on our consolidated financial statements.

As a result of the finalization of several

concession agreements with landlords, the Company recognized a reduction of rent expense in the amount of $ 800,000 in the current year.

The recognition of rent concessions did not have a material impact on the prior year.

The components of lease expense in the consolidated statements of operations are as follows:

October 2, 2021 October 3, 2020

(in thousands)

Operating lease expense - occupancy expenses (1)

$ 7,557 $ 9,449

Occupancy lease expense - general and administrative expenses 396 635

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Supplemental cash flow information related leases:

October 2, 2021 October 3, 2020

(in thousands)

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October 1, 2022 $ 9,026

October 1, 2022 9,313

September 30, 2023 7,543

1 unchanged sentence

September 27, 2025 6,116

October 3, 2026 5,385

Thereafter 47,529

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Long-term debt consists of the following:

2020 September 28,

2021 October 3,

(in thousands)

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Promissory Note - Sequoia renovation 2,171 2,629

Revolving Facility 9,666 3,366

Promissory Note - Revolving Facility 9,166 9,666

Promissory Note - Blue Moon Fish Company (see Note 3) 827 —

Paycheck Protection Program Loans 4,722 14,995

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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).

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.

(“BHBM”), by entering into an amended and restated credit agreement (the “Revolving Facility”), which was to mature on May 19, 2022 (as extended).

The Revolving Facility provided 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.

On July 26, 2021, all outstanding Revolver Borrowings, in the amount of $ 9,666,000 , were converted to a promissory note with quarterly principal payments of $ 500,000 commencing on September 1, 2021, with a balloon payment of $ 2,166,000 on June 1, 2025.

Such note bears interest at LIBOR plus 3.5 % per annum.

We expect that the LIBOR rate will be discontinued at some point during 2022 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) 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 and a spot rate of 2.91 % as of October 3, 2020.

In connection with the Refinancing, the Company also amended the principal amounts and payment terms of its outstanding term notes with BHBM as follows:

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

The Revolving Facility, which includes all of the promissory notes, also requires, among other things, that the Company meet minimum quarterly tangible net worth amounts, maintain a minimum fixed charge coverage ratio and meet minimum annual net income amounts.

The Revolving Facility contains customary representations, warranties and affirmative covenants as well as 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.

Borrowings under the Revolving Facility 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.

On June 12, 2020 and again on February 15, 2021, as a result of the impact of the COVID-19 pandemic on our business, BHBM agreed to modified financial covenants through fiscal Q2 2022.

The Company was in compliance with all of its financial covenants under the Revolving Facility as of October 2, 2021.

In connection with the Refinancing, the Company also amended the principal amounts and payment terms of its then outstanding term notes with BHBM as follows:

• Promissory Note – Rustic Inn purchase – On February 25, 2013, the Company issued a promissory note to BHBM for $ 3,000,000 .

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The new loan was payable in 60 equal monthly installments of $ 134,722 , which commenced on March 25, 2014 .

In connection with the above refinancing, this note was amended and restated and increased by $ 2,783,333 of credit facility borrowings.

In connection with the above refinancing, this note was amended and restated and increased by

$ 2,783,333 of credit facility borrowings.

The new principal amount of $ 4,400,000 , which is secured by a mortgage on The Rustic Inn real estate, is payable in 27 equal quarterly installments of $ 71,333 , which commenced on September 1, 2018 , with a balloon payment of $ 2,474,000 on June 1, 2025 and bears interest at LIBOR plus 3.5 % per annum.

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• Promissory Note - JB's on the Beach purchase – On May 15, 2019, in connection with the previously discussed acquisition of JB’s on the Beach , the Company issued a promissory note under the Revolving Facility to BHBM for $ 7,000,000 which is payable in 23 equal quarterly installments of $ 250,000 , commencing on September 1, 2019 , with a balloon payment of $ 1,250,000 on June 1, 2025 and bears interest at LIBOR plus 3.5 % per annum.

in 23 equal quarterly installments of $ 114,286 , commencing on September 1, 2019 , with a balloon payment of $ 571,429 on June 1, 2025 and bears interest at LIBOR plus 3.5 % per annum.

Borrowings under the Revolving Facility, which include all of the above promissory notes, 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.

• Promissory Note - Sequoia renovation – Also on May 15, 2019, the Company converted $ 3,200,000 of Revolving Facility borrowings incurred in connection with the Sequoia renovation to a promissory note which is payable in 23 equal quarterly installments of $ 114,286 , commencing on September 1, 2019 , with a balloon payment of $ 571,429 on June 1, 2025 and bears interest at LIBOR plus 3.5 % per annum.

Paycheck Protection Program Loans

During the 13 weeks ended June 27, 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.

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.

In addition, during the 13 weeks ended April 3, 2021, one of our consolidated VIEs received a second draw PPP Loan in the amount of $ 111,000 .

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.

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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.

Accordingly, 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.

Debt Issue Costs

Debt issuance costs incurred in the amount of $ 271,000 are being amortized over the life of the agreements using the effective interest rate method and included in interest expense.

Amortization expense of approximately $ 51,000 and $ 35,000 is included in interest expense for the years ended October 3, 2020 and September 28, 2019, respectively.

While the Company believes that it and each Borrower used the PPP Loan proceeds exclusively for Qualifying Expenses, it is unclear and uncertain whether the conditions for forgiveness of the PPP Loans outstanding at October 2, 2021 will be met under the current guidelines of the CARES Act.

Therefore, we cannot make any assurances that the Company, or any of the Borrowers, will be eligible for forgiveness of the remaining PPP Loans, in whole or in part.

Accordingly, based on the above, we have classified $ 2,032,000 of the PPP Loans as short-term in the consolidated balance sheet as of October 2, 2021.

During the year ended October 2, 2021, $ 10,400,000 (including $ 84,000 of accrued interest) of PPP Loans were forgiven.

To the extent, if any, that any of the remaining PPP Loans are not forgiven, beginning one month following expiration of the Deferral Period, and continuing monthly for 10 months (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.

Deferred Financing Costs

Deferred financing costs incurred in the amount of $ 271,000 are being amortized over the life of the agreements using the effective interest rate method and included in interest expense.

Amortization expense of $ 60,000 and $ 51,000 is included in interest expense for the years ended October 2, 2021 and October 3, 2020, respectively.

As of October 2, 2021, the aggregate amounts of notes payable maturities (excluding borrowings under the Revolving Facility) are as follows:

BHBM PPP Loans Total

2021 $ 2,701 $ — $ 2,701

BHBM PPP Loans Blue Moon Note Total

2022 $ 4,701 $ 2,032 $ 240 $ 6,973

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The Complaint sought unspecified money damages, together with interest, liquidated damages and attorney fees.

On December 14, 2020, the parties reached a settlement agreement resolving all issues alleged in the Complaint, which will be submitted to the New York State Supreme Court for approval, for approximately the amount which was previously accrued.

In December 2020, the parties reached a settlement agreement resolving all issues alleged in the Complaint, which received preliminary approval by the New York State Supreme Court, for approximately the amount which was previously accrued.

It is anticipated the parties will shortly submit a joint application to the New York State Supreme Court seeking final approval of the settlement.

STOCK OPTIONS

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Options granted under both plans are exercisable at prices at least equal to the fair market value of such stock on the dates the options were granted and expire ten years after the date of grant.

During the year ended October 2, 2021, options to purchase 110,500 shares of common stock at an exercise price of $ 10.65 per share were granted to employees and directors of the Company (the "2021 Grant").

Such options are exercisable as to 50 % of the shares commencing on the second anniversary of the date of grant and as to 50 % on the fourth anniversary of the date of grant.

The grant date fair value of these stock options was $ 2.22 per share and totaled approximately $ 246,000 .

During the year ended October 3, 2020, options to purchase 266,500 shares of common stock at an exercise price of $ 21.90 per share were granted to employees, directors of the Company and other service providers.

Such options are exercisable as to 50 % of the shares commencing on the second anniversary of the date of grant and as to the remaining 50 % commencing on the fourth anniversary of the date of grant.

The grant date fair value of these stock options was $ 3.35 per share.

During the year ended September 28, 2019, options to purchase 23,000 shares of common stock at an exercise price of $ 19.61 per share were granted to employees of the Company.

Such options are exercisable as to 50 % of the shares commencing on the date of grant and as to an additional 50 % commencing on the first anniversary of the date of grant.

Such options had an aggregate grant date fair value of $ 3.48 per share and totaled approximately $ 80,000 .

During the year ended September 28, 2019, options to purchase 11,000 shares of common stock at an exercise price of $ 20.18 per share were granted to employees of the Company.

Such options are exercisable as to 25 % of the shares commencing on the first anniversary of the date of grant and 25 % on the second, third and fourth anniversary thereof.

Such options had an aggregate grant date fair value of $ 3.55 per share and totaled approximately $ 39,000 .

During the year ended September 28, 2019, options to purchase 19,500 shares of common stock with a strike price of $ 12.04 were exercised on a net issue basis as provided in the 2010 Plan.

Accordingly, 11,774 shares were immediately repurchased and retired from treasury.

The grant date fair value of these stock options was $ 3.35 per share and totaled approximately $ 894,000 .

The Company generally issues new shares upon the exercise of employee stock options.

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grant 63,750 174,500

Compensation cost charged to operations for the years ended October 3, 2020 and September 28, 2019 for share-based compensation programs was approximately $ 176,000 and $ 112,000 , respectively.

Compensation cost charged to operations for the years ended October 2, 2021 and October 3, 2020 for share-based compensation programs was approximately $ 280,000 and $ 176,000 , respectively.

The compensation cost recognized is classified as a general and administrative expense in the consolidated statements of operations.

As of October 3, 2020, there was approximately $ 772,000 of unrecognized compensation cost related to unvested stock options, which is expected to be recognized over a period of 3.3 years.

As of October 2, 2021, there was approximately $ 737,000 of unrecognized compensation cost related to unvested stock options, which is expected to be recognized over a period of three years .

The following table summarizes information about stock options outstanding as of October 2, 2021:

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Under the Section 162(m) Cash Bonus Plan, compensation paid in excess of $ 1,000,000 to any employee who is the chief executive officer, or one of the three highest paid executive officers on the last day of that tax year (other than the chief executive officer or the chief financial officer) is not tax deductible.

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, 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.

On March 27, 2020, the CARES Act was enacted to provide economic relief to those impacted by the COVID-19 pandemic.

In addition to the PPP loans, 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 tax years 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 Internal Revenue Code ("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).

On December 27, 2020, the Consolidated Appropriations Act of 2021 (“CAA”) was enacted and provided clarification on the tax deductibility of expenses funded with PPP loans as fully deductible for tax purposes.

During the year ended October 2, 2021, the Company recorded income of $ 10,400,000 (including $ 84,000 of accrued interest) for financial reporting purposes related to the forgiveness of its PPP loans.

The forgiveness of these amounts is not taxable.

As a result of the CARES Act and the CAA, the Company carried back taxable losses from fiscal year 2020 and is expected to carryback taxable losses from fiscal 2021 to generate a refund of previously paid income taxes.

As a result of these carrybacks, the Company recorded income tax benefits as the taxable losses from fiscal 2020 and fiscal 2021 are being carried back to tax years in which the Company was subject to a higher federal corporate income tax rate.

Included in Prepaid and Refundable Income Taxes at October 2, 2021 is $ 3,766,000 related these carryback claims.

The provision for income taxes consists of the following:

2020 September 28,

2021 October 3,

(in thousands)

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income tax rate as follows:

2020 September 28,

2021 October 3,

(in thousands)

Provision at Federal statutory rate (21%) $ 3,240 $ ( 1,891 )

$ ( 1,891 ) $ 393

State and local income taxes, net of tax benefits 433 ( 919 )

Gain on forgiveness of PPP Loans ( 1,974 ) —

Tax credits ( 741 ) ( 542 )

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Change in valuation allowance 845 21

Other ( 209 ) 48

$ 1,181 $ ( 4,385 )

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Significant components of the Company’s deferred tax assets and liabilities are as follows:

2020 September 28,

2021 October 3,

(in thousands)

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Partnership investments — 346

Other 492 550

Deferred tax assets, before valuation allowance 21,290 19,272

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Depreciation and amortization ( 15,308 ) ( 12,440 )

Partnership investments ( 566 ) —

Prepaid expenses ( 458 ) ( 522 )

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In the assessment of the valuation allowance, appropriate consideration was given to all positive and negative evidence including forecasts of future earnings and the duration of statutory carryforward periods.

The Company recorded a valuation allowance of $ 413,000 and $ 392,000 as of October 3, 2020 and September 28, 2019, respectively, attributable to state and local net operating loss carryforwards which are not realizable on a more-likely-than-not basis.

During the year ended October 3, 2020, the Company’s valuation allowance increased by approximately $ 81,000 as the Company determined that certain state net operating losses became unrealizable on a more-likely-than-not basis.

The Company recorded a valuation allowance of $ 1,258,000 and $ 413,000 as of October 2, 2021 and October 3, 2020, respectively, attributable to state and local net operating loss carryforwards which are not realizable on a more-likely-than-not basis.

During the years ended October 2, 2021 and October 3, 2020, the Company’s valuation allowance increased by approximately $ 845,000 and $ 81,000 , respectively, as the Company determined that certain state net operating losses became unrealizable on a more-likely-than-not basis due to certain restaurant closures in the related period.

As of October 2, 2021, the Company had General Business Credit carryforwards of approximately $ 2,777,000 which expire through fiscal 2041.

1 unchanged sentence

A reconciliation of the beginning and ending amount of unrecognized tax benefits excluding interest and penalties is as follows:

2020 September 28,

2021 October 3,

(in thousands)

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The entire amount of unrecognized tax benefits if recognized would reduce our annual effective tax rate.

For the years ended October 3, 2020 and September 28, 2019, there are no amounts accrued for the payment of interest and penalties.

For the years ended October 2, 2021 and October 3, 2020, there are no amounts accrued for the payment of interest and penalties.

The Company does not expect a significant change to its unrecognized tax benefits within the next 12 months.

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The 2018 through 2021 fiscal years remain subject to examination by the Internal Revenue Service and most state and local tax authorities.

The Company is currently under examination by the Internal Revenue Service for tax year ended September 2017.

The examination is in its preliminary phases.

INCOME PER SHARE OF COMMON STOCK

3 unchanged sentences

A reconciliation of shares used in calculating earnings per basic and diluted share follows:

2020 September 28,

2021 October 3,

(in thousands)

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For the year ended October 3, 2020, all options were excluded from diluted earnings per share as their impact would have been anti-dilutive.

For the year ended September 28, 2019, the dilutive effect of options to purchase 208,000 shares of common stock at exercise prices ranging from $ 20.18 per share to $ 22.50 per share were not included in diluted earnings per share as their impact would have been anti-dilutive.

For the year ended October 2, 2021, the dilutive effect of options to purchase 443,500 shares of common stock at exercise prices ranging from $ 21.90 per share to $ 22.50 per share were not included in diluted earnings per share as their impact would have been anti-dilutive.

On November 26, 2019, the Board of Directors declared a quarterly dividend of $ 0.25 per share on the Company’s common stock which was paid on January 7, 2020, to shareholders of record at the close of business on December 16, 2019.

4 unchanged sentences

RELATED PARTY TRANSACTIONS

Employee receivables totaled approximately $ 385,000 and $ 414,000 at October 3, 2020 and September 28, 2019, respectively.

Such amounts consist of loans that are payable on demand, bear interest at the minimum statutory rate ( 0.38 % at October 3, 2020 and 1.85 % at September 28, 2019), and are net of reserves for collectability.

SUBSEQUENT EVENTS

On November 11, 2020, the landlord of the Company’s corporate office agreed to amend the related lease which was to expire on December 31, 2026.

Effective January 1, 2021, rents will be reduced by approximately $ 20,000 a month for three years at which point an independent broker will determine the fair market value of the space.

As part of the agreement, the Company agreed to spend approximately $ 200,000 on improvements to the HVAC systems and other pandemic related changes to the space.

Also included in the amendment are two additional five-year options for the space.

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

The Company expects that the closure of this property will occur on January 4, 2021 and will not result in a material charge to the Company’s operations.

On November 19, 2020, options to purchase 110,750 shares of common stock at an exercise price of $ 10.65 per share were granted to employees and directors of the Company.

Such options are exercisable as to 50 % of the shares commencing on

the second anniversary of the date of grant and the remaining 50 % becoming exercisable on the fourth anniversary of the date of grant.

The grant date fair value of these stock options was $ 2.22 per share.

On December 11, 2020, BHBM extended the maturity date of the Revolving Facility to October 3, 2021.

In addition, BHBM extended the maturity dates of two working capital advances in the amounts of $ 3,000,000 and $ 3,300,000 from March 9, 2021 and June 8, 2021, respectively, to July 31, 2021.

These amounts are expected to be converted to term loans when due, along with the balance of the Revolving Facility of $ 3,366,000 when due.

On December 11, 2020, New York State Governor Andrew Cuomo announced the shutdown of indoor dining in New York City indefinitely starting on Monday, December 14, 2020.

We expect this will have a material adverse impact on our operations in New York, as will a shutdown of the entire City of New York, which is being considered by the Mayor of New York City as well as shut downs in any other cities where we operate.

Employee receivables totaled approximately $ 380,000 and $ 385,000 at October 2, 2021 and October 3, 2020, respectively.

Such amounts consist of loans that are payable on demand, bear interest at the minimum statutory rate ( 0.17 % at October 2, 2021 and 0.38 % at October 3, 2020), and are net of reserves for collectability.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

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(Steven Shulman)

/s/ Paul Gordon Senior Vice President December 22, 2020

(Paul Gordon) and Director

Lewin Director December 21, 2021

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*21 Subsidiaries of the Registrant.

*23 Consent of CohnReznick L L P .

*23 Consent of CohnReznick LLP.

*31.1 Certification of Chief Executive Officer.

10 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures