What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2025-12-18 compared with 2024-12-19 · 255 added, 285 removed, 725 unchanged (43% of the section changed)

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Our responsibility is to express an opinion on these 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 Ark Restaurants Corp.

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 Ark Restaurant Corp.

in accordance with the U.S.

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Critical Audit Matter

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.

Long-lived assets, such as property and plant and equipment subject to depreciation and 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.

In the evaluation of the fair value and future benefits of long-lived assets, the Company performs an analysis of the anticipated undiscounted future net cash flows of the related long-lived assets.

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Various factors including estimated future sales growth and estimated profit margins are included in this analysis.

The Company considers a triggering event related to long-lived assets or ROU assets in a net asset position to have occurred related to a specific restaurant if the restaurant’s undiscounted cash flows for the remaining lease period are less than the carrying value of the restaurant’s assets.

The Company considers a triggering event related to long-lived assets or ROU assets in a net asset position to have occurred related to a specific restaurant if the restaurant’s projected levels of undiscounted cash flows for the remaining lease period are less than the carrying value of the restaurant’s assets.

Additionally, the Company considers a triggering event related to ROU assets to have occurred related to a specific lease if the location has been subleased and future estimated sublease income is less than current lease payments.

If the Company concludes that the carrying value of certain long-lived assets and ROU assets will not be recovered

based on expected undiscounted future cash flows, an impairment loss is recorded to reduce the long-lived or ROU assets to their estimated fair value.

The Company recorded impairment charges for its location in Washington, DC of $2,500,000 and for one of its locations in New York City of $876,000 during the year ended September 28, 2024.

If the Company concludes that the carrying value of certain long-lived assets and ROU assets will

not be recovered based on expected undiscounted future cash flows, an impairment loss is recorded to reduce the long-lived or ROU assets to their estimated fair value.

The Company recorded impairment charges for its location in Washington, DC of $4,700,000 during the year ended September 27, 2025.

Significant judgment is exercised by the Company in performing their long-lived asset and right-of-use asset impairment analysis specifically surrounding the development of undiscounted cash flow forecasts.

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• We evaluated the reasonableness of management's estimate that no impairment charges were appropriate during the year other than what was recorded.

Goodwill Valuation (Note 7 to the Consolidated Financial Statements)

Critical Audit Matter

The Company’s evaluation of goodwill for impairment involves the comparison of the fair value of the Company to its carrying value.

The Company determined the income approach provided the best approximation of fair value given the relatively low volume of shares of the Company’s stock traded and the lack of reliable market data.

In the income approach the Company utilized the discounted cash flow model to estimate fair value, which requires management to make significant estimates and assumptions related to forecasts of future revenue and operating margin.

Changes in these assumptions could have a significant impact on either the fair value, the amount of any goodwill impairment charge, or both.

The Company recorded an impairment charge of $4,000,000 for the year ended September 28, 2024.

Significant judgment is exercised by management in estimating its fair value and the difference between its fair value and carrying value.

Given these factors, the related audit effort in evaluating management’s judgments in determining the valuation of goodwill was challenging, subjective, and complex and required a high degree of auditor judgment.

How our Audit Addressed the Critical Audit Matter

Our principal audit procedures related to this critical audit matter included the following, among others:

• We gained an understanding of and evaluated the design and implementation of the Company’s controls that address the risk of material misstatement related to potential impairment.

• We evaluated management’s significant accounting policies related to the consideration of goodwill impairment for reasonableness.

• We evaluated management’s ability to accurately forecast future revenues and profit margins by comparing actual results to management’s historical forecasts.

• We evaluated the reasonableness of management’s assumptions by:

◦ Comparing forecasts of revenue and profit margins to historical revenues and profit margins.

◦ Reading select internal communications to management and the Board of Directors.

◦ Considering the remaining lease terms of the company’s locations as the lease terms could have an impact on future cashflows.

Our consideration included challenging management’s assumptions in its valuation regarding the risk of non-renewal of significant leases in its various locations.

◦ Involving a valuation professional with specialized skills and knowledge, who assisted in considering the reasonableness of the weighted average cost of capital used in the discounted cash flow forecast

/s/ CohnReznick LLP PCAOB ID:

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CURRENT ASSETS:

Cash and cash equivalents (includes $ 292 at September 28, 2024 and $ 564 at

September 30, 2023 related to VIEs)

$ 10,273 $ 13,415

Accounts receivable (includes $ 44 at September 28, 2024 and $ 169 at September 30, 2023

related to VIEs)

Cash and cash equivalents $ 11,324 $ 10,273

Accounts receivable 1,989 3,516

Employee receivables 136 255

Inventories (includes $ 40 at September 28, 2024 and $ 47 at September 30, 2023 related to

Prepaid and refundable income taxes (includes $ 0 at September 28, 2024 and $ 204

September 30, 2023 related to VIEs)

Prepaid expenses and other current assets (includes $ 29 at September 28, 2024 and $ 31 at

September 30, 2023 related to VIEs)

Inventories 2,016 2,289

Prepaid and refundable income taxes 349 294

Prepaid expenses and other current assets 2,029 1,598

Total current assets 17,843 18,225

FIXED ASSETS - Net (includes $ 0 at September 28, 2024 and $ 216 at September 30, 2023 related to VIEs)

31,569 34,314

OPERATING LEASE RIGHT-OF-USE ASSETS - Net (includes $ 0 at

September 28, 2024 and $ 1,796 at September 30, 2023 related to VIEs)

84,977 96,459

FIXED ASSETS - Net 29,168 31,569

OPERATING LEASE RIGHT-OF-USE ASSETS - Net 73,358 84,977

GOODWILL — 3,440

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INVESTMENT IN AND RECEIVABLE FROM NEW MEADOWLANDS RACETRACK 6,743 6,550

OTHER ASSETS (includes $ 11 at September 28, 2024 and September 30, 2023 related to VIEs)

OTHER ASSETS 2,158 2,163

TOTAL ASSETS $ 133,503 $ 156,041

1 unchanged sentence

CURRENT LIABILITIES:

Accounts payable - trade (includes $ 86 at September 28, 2024 and $ 93 at

September 30, 2023 related to VIEs)

$ 4,547 $ 4,058

Accrued expenses and other current liabilities (includes $ 794 at September 28, 2024 and

$ 331 at September 30, 2023 related to VIEs)

12,045 13,829

Current portion of operating lease liabilities (includes $ 0 at September 28, 2024 and $ 298

at September 30, 2023 related to VIEs)

Accounts payable - trade $ 4,483 $ 4,547

Accrued expenses and other current liabilities 10,805 12,045

Current portion of operating lease liabilities 6,439 7,099

Current portion of notes payable 1,493 5,193

Total current liabilities 23,220 28,884

OPERATING LEASE LIABILITIES, LESS CURRENT PORTION (includes $ 0 at

September 28, 2024 and $ 1,623 at September 30, 2023 related to VIEs)

83,516 92,232

OPERATING LEASE LIABILITIES, LESS CURRENT PORTION 75,785 83,516

NOTES PAYABLE, LESS CURRENT PORTION, net of deferred financing costs 2,024 —

DEFERRED INCOME TAXES 360 —

TOTAL LIABILITIES 101,389 112,400

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

outstanding, 3,604 shares at September 28, 2024 and September 30, 2023

outstanding, 3,606 shares at September 27, 2025 and 3,604 shares at September 28, 2024,

Additional paid-in capital 13,989 13,934

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Depreciation and amortization 3,138 4,090

Loss on closure of El Rio Grande 876 —

(Gain) loss on closure of El Rio Grande ( 173 ) 876

Gain on termination of Tampa Food Court lease ( 5,235 ) —

Impairment losses on right-of-use and long-lived assets 4,700 2,500

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Other income — ( 26 )

Gain on sale of condominiums ( 594 ) —

Gain on forgiveness of PPP Loans — ( 285 )

Total other (income) expense, net ( 225 ) 266

LOSS BEFORE BENEFIT FOR INCOME TAXES ( 4,560 ) ( 5,422 )

Benefit for income taxes ( 815 ) ( 64 )

LOSS BEFORE PROVISION (BENEFIT) FOR INCOME TAXES ( 3,839 ) ( 4,560 )

Provision (benefit) for income taxes 5,324 ( 815 )

CONSOLIDATED NET LOSS ( 9,163 ) ( 3,745 )

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Shares Amount

BALANCE - October 1, 2022 3,600 $ 36 $ 15,493 $ 44,271 $ 59,800 $ 318 $ 60,118

BALANCE - September 30, 2023 3,604 $ 36 $ 14,161 $ 36,091 $ 50,288 $ 1,434 $ 51,722

Net income (loss) — — — ( 3,896 ) ( 3,896 ) 151 ( 3,745 )

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subsidiary — — 692 — 692 ( 692 ) —

Exercise of stock options 4 — 39 — 39 — 39

Stock-based compensation activity — — ( 919 ) — ( 919 ) — ( 919 )

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interests — — — — — ( 1,389 ) ( 1,389 )

Dividends paid - $ 0.625 per share

Dividends paid - $ 0.5625 per

— — — ( 2,028 ) ( 2,028 ) — ( 2,028 )

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Net income (loss) — — — ( 11,466 ) ( 11,466 ) 2,303 ( 9,163 )

Elimination of non-controlling

interest upon dissolution of

subsidiary — — 692 — 692 ( 692 ) —

Exercise of stock options 2 — 21 — 21 — 21

Stock-based compensation activity — — 34 — 34 — 34

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interests — — — — — ( 2,419 ) ( 2,419 )

Dividends paid - $ 0.5625 per share

— — — ( 2,028 ) ( 2,028 ) — ( 2,028 )

BALANCE - September 27, 2025 3,606 $ 36 $ 13,989 $ 18,701 $ 32,726 $ ( 612 ) $ 32,114

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Stock-based compensation activity 34 ( 919 )

Gain on forgiveness of PPP Loans — ( 272 )

Deferred income taxes 5,160 ( 1,061 )

Accrued interest on note receivable from NMR ( 45 ) ( 43 )

Loss on closure of El Rio Grande 876 —

Impairment losses on right-of-use and long-lived assets 2,500 —

Goodwill impairment 4,000 10,000

Depreciation and amortization 3,138 4,090

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Amortization of deferred financing costs 54 53

(Gain) loss on closure of El Rio Grande ( 173 ) 876

Gain on termination of Tampa Food Court lease ( 5,235 ) —

Impairment losses on right-of-use and long-lived assets 4,700 2,500

Goodwill impairment 3,440 4,000

Gain on sale of condominiums ( 594 ) —

Changes in operating assets and liabilities:

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Payments received on employee receivables 133 119

Proceeds from maturity of Certificate of Deposit — 5,021

Proceeds from sale of condominiums 1,203 —

Termination payment received in connection with Tampa Food Court lease 5,500 —

Investment in NMR ( 148 ) —

Net cash provided by (used in) investing activities 3,427 ( 2,392 )

1 unchanged sentence

Principal payments on notes payable ( 1,625 ) ( 1,987 )

Principal payments on PPP Loans — ( 531 )

Payments of debt financing costs ( 105 ) —

Dividends paid — ( 2,028 )

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Net cash used in financing activities ( 4,128 ) ( 5,404 )

NET DECREASE IN CASH AND CASH EQUIVALENTS ( 3,142 ) ( 10,024 )

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 1,051 ( 3,142 )

CASH AND CASH EQUIVALENTS, Beginning of year 10,273 13,415

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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 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 Company operates three 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 and 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 in the Tropicana 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.

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 six fast food facilities in Hollywood at the Hard Rock Hotel and Casino.

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

Inflation — Beginning in 2021, our operating results were impacted by geopolitical and other macroeconomic events, causing supply chain challenges and significantly increased commodity and wage inflation.

Inflation — In recent years, our operating results were impacted by geopolitical and other macroeconomic events, causing supply chain challenges and significantly increased commodity and wage inflation.

While we have seen improvements in many of these areas, some of these factors continued to impact our operating results in fiscal 2025.

The ongoing impact of these events could lead to further shifts in consumer behavior, wage inflation, staffing challenges, product and services cost inflation, disruptions in our supply chain and delays in opening and acquiring new restaurants.

If these factors significantly impact our cash flow in the future, we may again implement mitigation actions such as continued suspension of dividends, increasing borrowings or modifying our operating strategies.

If these factors significantly impact our cash flow in the future, we may again implement mitigation actions such as suspension of dividends, increasing borrowings or modifying our operating strategies.

Some of these measures may have an adverse impact on our business, including possible impairments of assets.

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The Company evaluates and updates assumptions and estimates on an ongoing basis and may use outside experts to assist in the Company’s evaluation, as considered necessary.

Actual results could differ from those estimates.

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

Principles of Consolidation — The consolidated financial statements include the accounts of Ark Restaurants Corp.

and all of its wholly-owned subsidiaries, partnerships and other entities in which it has a controlling financial interest.

Also included in the consolidated financial statements are certain variable interest entities (“VIEs”).

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

and all of its wholly-owned subsidiaries, partnerships and other entities in which it has a controlling interest, collectively herein referred to as the “Company”.

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.

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Although our business is highly seasonal, our broader geographical reach as a result of prior acquisitions mitigates some of this 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;

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 warmer weather, attributable to our extensive outdoor dining availability, particularly at Bryant Park in New York and Sequoia in Washington, D.C.

We generally achieve our best results during the warmer weather, attributable to our extensive outdoor dining availability, particularly at Bryant Park Grill & Café and The Porch at Bryant Park in New York (see Note 10 - Commitments and Contingencies) and Sequoia in Washington, D.C.

(our largest restaurants) and our outdoor cafes.

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Our facilities in Las Vegas are indoor and generally operate on a more consistent basis throughout the year, although in recent years the summer months have seen lower traffic.

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

The fair values of notes receivable and payable are determined using current applicable rates for similar instruments as of the balance sheet date and approximate the carrying value of such debt instruments.

Cash and Cash Equivalents — Cash and cash equivalents include cash on hand, deposits with banks, highly liquid investments and certificates of deposit with original maturities of three months or less.

Cash and Cash Equivalents — Cash and cash equivalents include cash on hand, deposits with banks and highly-liquid investments with original maturities of three months or less.

Outstanding checks in excess of account balances, typically vendor payments, payroll and other contractual obligations disbursed after the last day of a reporting period are reported as a current liability in the accompanying consolidated balance sheets.

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At times, such amounts may exceed federally insured limits.

Accounts receivable are primarily comprised of normal business receivables, such as credit card receivables, that are collected in a short period of time and amounts due from the hotel operators where the Company has a location, and are recorded upon satisfaction of the performance obligation.

Accounts receivable are primarily comprised of normal business receivables, such as credit card receivables that are collected in a short period of time and other receivables from hotel operators where the Company has a location and are recorded upon satisfaction of the performance obligation.

The Company reviews the collectability of its receivables on an ongoing basis, and has not provided for an allowance as it considers all of the counterparties will be able to meet their obligations.

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 September 28, 2024 and September 30, 2023, the Company had accounts receivable balances due from one hotel operator totaling 52 % of total accounts receivable.

For the years ended September 28, 2024 and September 30, 2023, the Company made purchases from two vendors that accounted for 22 % of total purchases.

As of September 28, 2024, all debt outstanding, other than 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.

As of September 27, 2025 and September 28, 2024, the Company had accounts receivable balances due from one hotel operator totaling 29 % and 52 % of total accounts receivable, respectively.

For the year ended September 27, 2025, the Company made purchases from one vendor that accounted for 10 % of total purchases.

For the year ended September 28, 2024, the Company made purchases from two vendors that accounted for 22 % of total purchases.

As of September 27, 2025, all debt outstanding is with one lender (see Note 9 – Notes Payable).

Fixed Assets — Fixed assets are stated at cost less accumulated depreciation and amortization.

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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.

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.

Long-Lived and Right-of-Use Assets — Long-lived assets, such as property, plant and equipment and purchased intangibles 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.

In the evaluation of the fair value and future benefits of long-lived assets, the Company performs an analysis of the anticipated undiscounted future net cash flows of the related long-lived assets.

1 unchanged sentence

Various factors including estimated future sales growth and estimated profit margins are included in this analysis.

The Company considers a triggering event related to long-lived assets or ROU assets in a net asset position to have occurred related to a specific restaurant if the restaurant’s cash flows for the last 12 months are less than a minimum threshold or if consistent levels of undiscounted cash flows for the remaining lease period are less than the carrying value of the restaurant’s assets.

consistent levels of undiscounted cash flows for the remaining lease period are less than the carrying value of the restaurant’s assets.

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There is uncertainty in the projected undiscounted future cash flows used in the Company's impairment review analysis, which requires the use of estimates and assumptions.

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.

(see Note 6 - Fixed Assets).

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 .

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

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The Company may elect to bypass the qualitative assessment and proceed directly to the quantitative test.

When performing the quantitative test, an impairment loss is recognized if the carrying value of our equity, including goodwill, exceeds its fair value.

(see Note 7 - Goodwill, Trademarks and Intangible Assets)

When performing the quantitative test, an impairment loss is recognized if the carrying value of our equity, including goodwill, exceeds its fair value (see Note 6 - Goodwill, Trademarks and Intangible Assets).

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

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

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

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

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

As a lessee, we include operating leases in Operating lease ROU assets and Operating lease liabilities in our consolidated balance sheets.

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

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

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

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Revenues from restaurant operations are presented net of discounts, coupons, employee meals and complimentary meals and recognized when food, beverage and retail products are sold.

Sales tax collected from customers is excluded from sales and the obligation is included in sales tax payable until the taxes are remitted to the appropriate taxing authorities.

Sales tax collected from customers is excluded from sales and the obligation is included in sales tax payable until the

taxes are remitted to the appropriate taxing authorities.

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

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As of September 27, 2025 and September 28, 2024, the total liability for gift cards in the amounts of approximately $ 438,000 and $ 401,000 , 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.

Other revenues include merchandise sales, rental income, property management fees and other rentals as well as, in 2024, purchase service fees, related to an affiliate that the Company no longer has an interest in, which represent commissions earned for providing services to other restaurant groups.

Occupancy Expenses — Occupancy expenses include rent, rent taxes, real estate taxes, insurance and utility costs.

Defined Contribution Plan — The Company offers a defined contribution savings plan (the “Plan”) to all of its full-time employees.

Eligible employees may contribute pre-tax amounts to the Plan subject to the Internal Revenue Code limitations.

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

During the years ended September 28, 2024 and September 30, 2023, 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 Company re-evaluates uncertain tax positions and considers factors, including, but not limited to, changes in tax law, the measurement of tax positions taken or expected to be taken on tax returns, and changes in circumstances related to a tax position.

We classify interest and penalties related to unrecognized tax benefits as a component of income tax expense (benefit).

Non-controlling interests relating to the income or loss of consolidated partnerships includes no provision for income taxes as any tax liability related thereto is the responsibility of the individual minority investors.

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Upon exercise of options, all excess tax benefits and tax deficiencies resulting from the difference between the deduction for tax purposes and the stock-based compensation cost recognized for financial reporting purposes are included as a component of income tax expense.

Recently Adopted Accounting Principles — On October 1, 2023, the Company adopted Accounting Standards Update (“ASU”) No.

2016-13, Measurement of Credit Losses on Financial Instruments , issued by the Financial Accounting Standards Board (“FASB”) and its related amendments using the prospective method.

The new standard changes the impairment model for most financial assets that are measured at amortized cost and certain other instruments, including credit card receivables and receivables from hotel operators where the Company has a location, from an incurred loss model to an expected loss model and adds certain new required disclosures.

Under the expected loss model, entities recognize credit losses to be incurred over the entire contractual term of the instrument rather than delaying recognition of credit losses until it is probable the loss has been incurred.

In accordance with this guidance, the Company evaluates certain criteria, including aging and historical write-offs, current economic conditions of specific customers and future economic conditions to determine the appropriate allowance for credit losses.

The adoption of this guidance did not have a material effect on the Company’s consolidated financial statements.

Recently Issued Accounting Pronouncements — In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures (“ASU 2023-09”) which enhances transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid and to improve the effectiveness of income tax disclosures.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, which is for our fiscal year 2026 and interim periods beginning in the first quarter of our fiscal 2027, with early adoption permitted.

The amendments may be applied prospectively or retrospectively with early adoption permitted.

We are currently assessing the impact of the requirements on our consolidated financial statements and disclosures.

In November 2023, the FASB issued ASU No.

Recently Adopted Accounting Principles — On September 27, 2025, the Company adopted Accounting Standards Update (“ASU”) No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures .

Improvements to Reportable Segment Disclosures (“ASU 2023-0”) .

The amendments in this update are intended to improve reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses.

ASU 2023-07 is effective for public entities for fiscal years beginning after December 15, 2023, which is for our fiscal year 2025 and interim periods beginning in the first quarter of our fiscal 2026, with early adoption permitted.

The adoption of this guidance is not expected to have a material impact to our consolidated financial statements and disclosures.

In November 2024, the FASB issued ASU No.

2024-03, Disaggregation of Income Statement Expenses, requiring public companies to disaggregate key expense categories such as inventory purchases, employee compensation and depreciation in their financial statements.

This aims to improve investor insights into company performance.

ASU 2024-03 is effective for fiscal years beginning after December 15, 2024, which is our fiscal year 2026 and interim periods beginning in the first quarter of our fiscal 2027, with early adoption permitted.

The disclosures required by ASU 2023-07 can be found in Note 16 - Segment Information of these consolidated financial statements.

Recently Issued Accounting Pronouncements — In November 2024, the Financial Accounting Standards Board (the “FASB”) issued ASU No.

2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (“ASU 2024-03”), to expand expense disclosures by requiring disaggregated disclosure of certain income statement expense line items, including those that contain purchases of inventory, employee compensation, depreciation and amortization.

ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, or our fiscal year 2028, and subsequent interim periods, with early adoption permitted.

The amendments should be applied prospectively, but retrospective application is permitted.

The Company is currently evaluating the impact, if any, adoption will have on its consolidated financial statements and disclosures.

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures (“ASU 2023-09”), which enhances transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid and to improve the effectiveness of income tax disclosures.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, which is for fiscal year 2026, with early adoption permitted.

The Company has determined that ASU 2023-09 addresses disclosures only, and as such will not have any material effects on its consolidated financial condition, results of operation, or cash flows.

In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements:

Codification Amendment in Response to the SEC’s Disclosure Update and Simplification Initiative .

This ASU incorporates several disclosure and presentation requirements currently residing in the SEC Regulations S-X and S-K.

The amendments will be applied prospectively and are effective when the SEC removes the related requirements from Regulations S-X or S-K.

Any amendments the SEC does not remove by June 30, 2027 will not be effective.

As we are currently subject to these SEC requirements, this ASU is not expected to have a material impact on our consolidated financial statements or related disclosures.

No other new accounting pronouncements issued or effective as of September 27, 2025 have had or are expected to have a material impact on our consolidated financial statements.

CONSOLIDATION OF VARIABLE INTEREST ENTITIES

The Company consolidates any variable interest entities in which it holds a variable interest and is the primary beneficiary.

Generally, a variable interest entity, or VIE, is an entity with one or more of the following characteristics:

(a) the total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support;

(b) as a group the holders of the equity investment at risk lack (i) the ability to make decisions about an entity’s activities through voting or similar rights, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity;

or (c) the equity investors have voting rights that are not proportional to their economic interests and substantially all of the entity’s activities either involve, or are conducted on behalf of, an investor that has disproportionately few voting rights.

The primary beneficiary of a VIE is generally the entity that has (a) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, and (b) the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE.

The Company has determined that it is the primary beneficiary of three VIEs and, accordingly, consolidates the financial results of these entities.

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

September 28,

2024 September 30,

(in thousands)

Cash and cash equivalents $ 292 $ 564

Accounts receivable 44 169

Inventories 40 47

Prepaid and refundable income taxes — 204

Prepaid expenses and other current assets 29 31

Due from (to) Ark Restaurants Corp.

and affiliates (1) ( 124 ) 58

Fixed assets - net — 216

Operating lease right-of-use assets - net — 1,796

Other assets 11 11

Total assets $ 292 $ 3,096

Accounts payable - trade $ 86 $ 93

Accrued expenses and other current liabilities 794 331

Current portion of operating lease liabilities — 298

Operating lease liabilities, less current portion — 1,623

Total liabilities 880 2,345

Equity of variable interest entities ( 588 ) 751

Total liabilities and equity $ 292 $ 3,096

(1) Amounts due from Ark Restaurants Corp.

and affiliates are eliminated upon consolidation.

The liabilities of $ 880,000 and $ 2,345,000 at September 28, 2024 and September 30, 2023, respectively, recognized as a result of consolidating these VIEs do not represent additional claims on the Company’s general assets and creditors of the VIEs do not have recourse to the general credit of the Company;

rather, they represent claims against the specific assets of the consolidated VIEs.

Conversely, the assets of $ 292,000 and $ 3,096,000 at September 28, 2024 and September 30, 2023, respectively, recognized as a result of consolidating these VIEs do not represent additional assets that could be used to satisfy claims against the Company’s general assets;

rather, these assets can be used only to settle obligations of the three VIEs (see Note 4 - Recent Restaurant Dispositions).

RECENT RESTAURANT EXPANSION AND OTHER DEVELOPMENTS

On April 8, 2022, the Company extended its lease for Gallagher's Steakhouse at the New York-New York Hotel and Casino in Las Vegas, NV through December 31, 2032.

In connection with the extension, the Company agreed to spend a minimum of $ 1,500,000 to materially refresh the premises by April 30, 2023 (as extended from September 30, 2022 due to supply chain issues).

Accordingly, the property was substantially closed for renovation on February 5, 2023 and reopened on April 28, 2023.

The total cost of the refresh was approximately $ 1,900,000 .

On June 24, 2022, the Company extended its lease for America at the New York-New York Hotel and Casino in Las Vegas, NV through December 31, 2033.

In connection with the extension, the Company has agreed to spend a minimum of $ 4,000,000 to materially refresh the premises by December 31, 2025 (as extended from December 31, 2024), subject to further extension as set out in the agreement.

To date approximately $ 100,000 has been spent on this refresh.

In connection with the extension, the Company has agreed to spend a minimum of $ 4,000,000 to materially refresh the premises by March 31, 2026, as extended, subject to further extensions as set out in the agreement.

To date approximately $ 1,600,000 has been spent on this refresh and we expect to complete the work by March 31, 2026.

On July 21, 2022, the Company extended its lease for the Village Eateries at the New York-New York Hotel and Casino in Las Vegas, NV through December 31, 2034.

As part of this extension, the Broadway Burger Bar and Grill and Gonzalez y Gonzalez , were carved out of the Village Eateries footprint and the extended date for those two locations is December 31, 2033.

In connection with the extension, the Company has agreed to spend a minimum of $ 3,500,000 to materially refresh all three of these premises by December 31, 2025 (as extended from June 30, 2023), subject to further extension as set out in the agreement.

To date approximately $ 950,000 has been spent on this refresh.

In connection with the extension, the Company has agreed to spend a minimum of $ 3,500,000 to materially refresh all three of these premises by December 31, 2025, as extended.

As part of this refresh, on November 11, 2024, the Company opened a new concept called Lucky Pig in the Village Eateries at a cost of approximately $ 850,000 .

In addition, the Company has spent an additional $ 950,000 to date on refreshing Broadway Burger Bar and Grill , Gonzalez y Gonzalez and other areas of the Village Eateries.

We expect to complete all work related to these projects by December 31, 2025.

Each of the above refresh obligations are to be consistent with designs approved by the landlord which shall not be unreasonably withheld.

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Note that our substantial completion of work set forth in plans approved by the landlord shall constitute our compliance with the requirements of the completion deadlines, regardless of whether or not the amount actually expended in connection therewith is less than the minimum.

On September 19, 2023, the Company extended the lease for its corporate office through December 31, 2038.

The amended lease provides for rents, beginning on January 1, 2024, approximately 19 % lower than the Company is currently paying.

The lease also provides for, among other things, the ability for the Company to vacate the premises upon 12 months' notice.

RECENT RESTAURANT DISPOSITIONS

In connection with the above renovations, the Company made payments totaling $ 57,000 and $ 43,000 to the mother of Samuel Weinstein, the Co-Chief Operating Officer, for design services during the years ended September 27, 2025 and September 28, 2024, respectively.

RECENT RESTAURANT DISPOSITIONS AND OTHER DEVELOPMENTS

During the year ended September 28, 2024, the Company dissolved the entity which owned Lucky 7 at the Foxwoods Resort and Casino, which was closed in July of 2022.

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In connection with the dissolution, the Company reclassified the remaining non-controlling interest balance to additional paid-in capital.

The Company advised the landlord of El Rio Grande (a consolidated VIE) we would be terminating the lease and closing the property permanently on or around January 1, 2025.

In connection with this notification, the Company recorded a loss of $ 876,000 during the year ended September 28, 2024 consisting of:

(i) rent and other costs incurred in accordance with the termination provisions of the lease in the amount of $ 398,000 , (ii) accrued severance and other costs in the amount of $ 94,000 , (iii) an impairment charge related to long-lived assets in the amount of $ 269,000 and (iv) the write-off of our security deposit in the amount of $ 238,000 , all partially offset by a gain related to the write-off of ROU assets and related lease liabilities in the net amount of $ 123,000 .

In October 2024, the Company advised the landlord of El Rio Grande we would be terminating the lease and closing the property permanently.

In connection with this notification, the Company recorded a loss of $ 876,000 during the year ended September 28, 2024.

The property closed permanently on January 3, 2025 and was vacated and delivered to the landlord on April 30, 2025.

During the year ended September 27, 2025, the Company recognized a gain in the amount of $ 173,000 as a result of refinements of estimates.

On November 26, 2024, a subsidiary of the Company, in which we own a 65 % interest, Ark Hollywood/Tampa Investment LLC agreed to terminate its lease for the food court at The Hard Rock Hotel and Casino in Tampa, FL and, accordingly, vacated the premises on December 15, 2024.

In connection with this agreement, all obligations under the lease ceased and Ark Hollywood/Tampa Investment LLC received a termination payment in the amount of $ 5,500,000 .

Accordingly, a gain, net of expenses, in the amount of $ 5,235,000 was recognized during the year ended September 27, 2025 and Ark Hollywood/Tampa Investment LLC distributed approximately $ 1,710,000 of the net proceeds, after expenses, to the other equity holders of Ark Hollywood/Tampa Investment LLC.

During the year ended September 27, 2025, the Company sold three of the 14 condominium units it owns at the Island Beach Resort in Jensen Beach, FL which is adjacent to our Shuckers restaurant.

In connection with the sales, the Company received net proceeds of $ 1,203,000 and recorded a gain of $ 594,000 .

The Company intends to sell the remaining units subject to market forces.

INVESTMENT IN AND RECEIVABLE FROM NEW MEADOWLANDS RACETRACK

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On November 19, 2013, the Company invested an additional $ 464,000 in NMR through a purchase of an additional membership interest in Meadowlands Newmark, LLC resulting in a total ownership of 11.6 % of Meadowlands Newmark, LLC, and an effective ownership interest in NMR of 7.4 %, subject to dilution.

In 2015, the Company invested an additional $ 222,000 in NMR and on February 7, 2017, the Company invested an additional $ 222,000 in NMR, both as a result of capital calls, bringing its total investment to $ 5,108,000 with no change in ownership.

The Company accounts for this investment at cost, less impairment, adjusted for subsequent observable price changes in accordance with ASU No.

In prior years, the Company invested an additional $ 444,000 in NMR and on May 13, 2025, the Company invested an additional $ 148,000 in NMR, all as a result of capital calls with no change in ownership, bringing its total investment to $ 5,256,000 .

The Company accounts for this investment at cost, less impairment, adjusted for subsequent observable price changes in accordance with ASU 2016-01.

There are no observable prices for this investment.

During the years ended September 28, 2024 and September 30, 2023, the Company received distributions from NMR in the amounts of $ 26,000 and $ 52,000 , respectively, which are included in other income in the consolidated statements of operations for the years then ended.

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 years ended September 28, 2024 and September 30, 2023.

Any future changes in the carrying value of our investment in NMR will be reflected in earnings.

During the year ended September 28, 2024, the Company received a distribution from NMR in the amount of $ 26,000 , which is included in other income in the consolidated statements of operation.

During the year ended September 27, 2025, the Company did not receive any distributions from NMR.

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

The note bears interest at 3 %, compounded monthly and added to the principal, and is due in its entirety on June 30, 2029.

The note may be prepaid, in whole or in part, at any time without penalty or premium.

The principal and accrued interest related to this note in the amounts of $ 1,487,000 and $ 1,442,000 , are included in Investment In and Receivable From New Meadowlands Racetrack in the consolidated balance sheets at September 27, 2025 and September 28, 2024, respectively.

In addition to the Company’s ownership interest in NMR through Meadowlands Newmark, LLC, if casino gaming is approved at the Meadowlands and NMR is granted the right to conduct said gaming, neither of which can be assured, the Company shall be granted the exclusive right to operate the food and beverage concessions in the gaming facility with the exception of one restaurant.

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AM VIE is a variable interest entity;

however, based on qualitative consideration of the contracts with AM VIE, the operating structure of AM VIE, the Company’s role with AM VIE, and that the Company is not obligated to absorb expected losses of AM VIE, the Company has concluded that it is not the primary beneficiary and not required to consolidate the operations of AM VIE.

however, based on qualitative consideration of the contracts with AM VIE, the operating structure of AM VIE, the Company’s role with AM VIE, and that the Company is not obligated to

absorb expected losses of AM VIE, the Company has concluded that it is not the primary beneficiary and not required to consolidate the operations of AM VIE.

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 September 27, 2025 and September 28, 2024, $ 34,000 and $ 16,000 were due AM VIE by NMR.

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

The note bears interest at 3 %, compounded monthly and added to the principal, and is due in its entirety on June 30, 2029.

The note may be prepaid, in whole or in part, at any time without penalty or premium.

The principal and accrued interest related to this note in the amounts of $ 1,442,000 and $ 1,399,000 , are included in Investment In and Receivable From New Meadowlands Racetrack in the consolidated balance sheets at September 28, 2024 and September 30, 2023, respectively.

Recent Developments and Valuation

NMR has been actively pursuing a full casino license (including slots, table games like blackjack and roulette) to supplement its existing horse racing and sports betting operations.

In May 2025, a Senate Concurrent Resolution was introduced proposing a ballot referendum to authorize casinos at both the Monmouth Park and Meadowlands Racetracks.

It requires a three-fifths vote in both legislative chambers to reach the ballot in November 2026.

In conjunction with such referendum, NMR will need to raise substantial capital to fund a marketing campaign to support the passage of the referendum.

To the extent the Company does not contribute to this effort, or if NMR raises outside capital, our interests will be diluted.

There can be no assurances that the above referendum will be included in the November 2026 election ballot or that it will pass if it is included.

If either of these do not occur, the Company’s investment in NMR will be evaluated based on the existing horse racing and sports betting operations and may be subject to substantial impairment.

The Company evaluated its investment in NMR for impairment indicators and concluded that its fair value exceeds the carrying value.

Accordingly, the Company did not record any impairment during the years ended September 27, 2025 and September 28, 2024.

Any future changes in the carrying value of our investment in NMR will be reflected in earnings.

Fixed assets consist of the following:

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Accordingly, the Company tested the recoverability of Sequoia's ROU and long-lived assets and concluded they were not recoverable.

Based on a discounted cash flow analysis, the Company recognized impairment charges of $ 1,561,000 and $ 939,000 related to Sequoia's ROU assets and long-lived assets , respectively.

No impairment charges were recognized related to long-lived assets or ROU assets during the year ended September 30, 2023.

Based on a discounted cash flow analysis, the Company recognized impairment charges of $ 1,561,000 and $ 939,000 related to Sequoia's ROU and long-lived assets , respectively.

The Company continued to monitor the performance of Sequoia throughout fiscal 2025 and, as a result of lower than expected operating results, we tested the recoverability of its ROU and long-lived assets again and based on a discounted cash flow analysis, we recognized additional impairment charges of $ 2,940,000 and $ 1,760,000 during the year ended September 27, 2025 related to Sequoia's ROU and long-lived assets , respectively.

Given the inherent uncertainty in projecting results of restaurants, the Company will continue to monitor the recoverability of the carrying value of the assets of Sequoia and several other restaurants on an ongoing basis.

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Goodwill and Trademarks

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

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

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

In performing its goodwill impairment test as of September 30, 2023, the Company determined that a triggering event had occurred.

Due to the volatility of the Company's stock price in the fourth quarter of fiscal 2023, the upcoming expiration of the current Bryant Park Grill & Cafe and The Porch at Bryant Park leases on April 30, 2025 and the related requests for proposals from the landlord for both locations received in July 2023 and September 2023, respectively (see Note 11 - Commitments and Contingencies to the Consolidated Financial Statements), the Company determined that there were indicators of potential impairment of its goodwill as of September 30, 2023.

As of September 28, 2024, there had been a lack of communication from the landlord regarding our proposals.

In August 2024, the Company became aware that the landlord was in discussions with another operator.

Accordingly, the Company performed qualitative and quantitative assessments for its goodwill as of September 28, 2024 and September 30, 2023.

The fair value of the equity was determined using the income approach.

Given the relatively low volume of shares traded as of September 28, 2024 and September 30, 2023, the Company determined the income approach provided the best approximation of fair value.

In the income approach, we utilized a discounted cash flow analysis, which involved estimating the expected future after-tax cash flows generated and then discounting those cash flows to present value, reflecting the relevant risks associated with the achievement of projected cash flows, the possibility that the Bryant Park Grill & Cafe and The Porch at Bryant Park leases may not be renewed beyond their expirations on April 30, 2025, and the time value of money.

This approach requires the use of significant estimates and assumptions, including forecasted revenue growth rates, forecasted cash flows from operations, and discount rates that reflect the risk inherent in the future cash flows.

Based on the impairment analysis, the carrying amount of our equity exceeded its estimated fair value, which indicated an impairment of the carrying value of our goodwill at September 28, 2024 and September 30, 2023.

Accordingly, during the fourth quarters of fiscal 2024 and 2023, the Company recorded goodwill impairment charges of $ 4,000,000 and $ 10,000,000 , respectively, of which $ 4,000,000 and $ 8,000,000 , respectively, was deductible for tax purposes and resulted in a deferred income tax benefit of $ 1,074,000 and $ 2,300,000 , respectively.

Such impairments have been attributed to factors such as, but not limited to, a decrease in the market price of the Company's common stock and lower than expected profitability.

The changes in the carrying amount of goodwill and trademarks for the years ended September 27, 2025 and September 28, 2024 are as follows:

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(in thousands)

Balance as of October 1, 2022 $ 17,440 $ 4,220

Balance as of September 30, 2023 $ 7,440 $ 4,220

Acquired during the year — —

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(1) Accumulated impairment losses as of September 27, 2025 and September 28, 2024 were $ 17,440,000 and $ 14,000,000 , respectively.

In accordance with ASU 350-20, Intangibles—Goodwill and Other , the Company identified a triggering event during the three months ended March 29, 2025 primarily related to a decline in the Company's stock price during the second quarter of fiscal 2025 and the continued uncertainty related to the expiration of the Bryant Park Grill & Caf é and The Porch at Bryant Park leases (see Note 10 - Commitments and Contingencies).

As a result, the Company performed an interim quantitative impairment test and based on the results of the assessment, the fair value of our equity was determined to be less than its carrying amount.

Accordingly, the Company recognized a non-cash impairment charge of the remaining balance of its goodwill in the amount of $ 3,440,000 in our consolidated statement of operations for the year ended September 27, 2025.

As of September 28, 2024, the Company performed a qualitative assessment of its goodwill whereby the fair value of the equity was determined using the income approach.

Given the relatively low volume of shares traded as of September 28, 2024, the Company determined the income approach provided the best approximation of fair value.

In the income approach, we utilized a discounted cash flow analysis, which involved estimating the expected future after-tax cash flows generated and then discounting those cash flows to present value, reflecting the relevant risks associated with the achievement of projected cash flows, the possibility that the Bryant Park Grill & Caf é and The Porch at Bryant Park leases may not be renewed beyond their expirations on April 30, 2025, and the time value of money.

This approach required the use of significant estimates and assumptions, including forecasted revenue growth rates, forecasted cash flows from operations, and discount rates that reflect the risk inherent in the future cash flows.

Based on the impairment analysis, the carrying amount of our equity exceeded its estimated fair value, which indicated an impairment of the carrying value of our goodwill at September 28, 2024.

Accordingly, during the fourth quarter of fiscal 2024, the Company recorded a goodwill impairment charge of $ 4,000,000 , of which $ 4,000,000 was deductible for tax purposes and resulted in a deferred income tax benefit of $ 1,074,000 .

Such impairment was attributed to factors such as, but not limited to, a decrease in the market price of the Company's common stock and lower than expected profitability.

Intangible assets consist of the following:

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Amortization expense related to intangible assets for the years ended September 27, 2025 and September 28, 2024 was $ 85,000 and $ 89,000 , respectively.

Amortization expense is expected to be $ 85,000 for fiscal 2025 and $ 14,000 for fiscal 2026 and 2027.

Amortization expense is expected to be $ 13,000 for fiscal 2026.

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

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ROU assets obtained in exchange for new operating lease liabilities $ — $ —

The weighted average remaining lease terms and discount rate as of September 28, 2024 are as follows:

Weighted Average Remaining Lease Term Weighted Average Discount Rate

Operating leases 11.5 years 6.3 %

The weighted average remaining lease terms and discount rates are as follows:

September 27, 2025 September 28, 2024

Operating leases:

Weighted average remaining lease term 10.9 years 11.5 years

Weighted average discount rate 6.2 % 6.3 %

The annual maturities of our lease liabilities as of September 27, 2025 are as follows:

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(in thousands)

September 27, 2025 12,477

October 3, 2026 $ 11,329

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September 29, 2029 11,095

September 28, 2030 10,823

Thereafter 57,041

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On March 30, 2023, the Company entered into a Second Amended and Restated Credit Agreement (the “Credit Agreement”), with its lender, Bank Hapoalim B.M.

This facility, which matures on June 1, 2025, replaced our revolving credit facility which was entered into in June 1, 2018 (the "Prior Credit Agreement").

Under the terms of the Credit Agreement:

(i) a promissory note under the Prior Credit Agreement in the amount of $ 6,666,000 was repaid, (ii) BHBM established a new revolving credit facility in the amount of $ 10,000,000 with a commitment termination date of May 31, 2025, (iii) the Company may use the revolving commitments of BHBM to obtain letters of credit up to a sublimit thereunder of $ 1,000,000 , and (iv) the LIBOR rate option for all borrowings was replaced with the secured overnight financing rate for U.S.

Government Securities (“SOFR”).

Advances under the Credit Agreement bear interest, at the Company's election at the time of the advance, at either BHBM's prime rate of interest plus a 0.45 % spread or SOFR plus a 3.65 % spread.

In addition, there is a 0.30 % per annum fee for any unused portion of the $ 10,000,000 revolving facility.

(“BHBM”) which originally matured on June 1, 2025.

On May 29, 2025, the Company entered into an Omnibus Amendment to the Credit Agreement which:

(i) extended the maturity date of the Credit Agreement to June 1, 2028, (ii) amended the terms of the outstanding promissory notes as discussed below, (iii) reduced the maximum permitted obligations outstanding under the Credit Agreement from $ 30,000,000 to $ 20,000,000 (including the outstanding promissory notes), (iv) increased the minimum tangible net worth covenant from $ 22,000,000 to $ 28,000,000 , and (v) removed the annual net income covenant.

Advances and loans under the Credit Agreement bear interest, at the Company's election at the time of the advance, at either BHBM's prime rate of interest plus a 0.45 % spread or SOFR plus a 3.65 % spread.

In addition, there is a 0.30 % per annum fee for any unused portion of the facility.

As of September 27, 2025, no advances were outstanding under the Credit Agreement.

As of September 27, 2025, the weighted average interest on the outstanding BHBM indebtedness was approximately 8.0 %.

The replacement of LIBOR with SOFR as a reference rate in our debt agreements did not have a material adverse effect on our financial position or materially affect our interest expense.

The Company is currently working with its lender on a new credit agreement which we expect to be completed in the second fiscal quarter of 2025;

however, there can be no assurances that this agreement will be completed.

The Credit Agreement 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 Credit Agreement also requires, among other things, that the Company meet minimum quarterly tangible net worth amounts and maintain a minimum fixed charge coverage ratio.

The Credit Agreement 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.

The Company was in compliance with all of its financial covenants under the Credit Agreement as of September 28, 2024 except for the minimum annual net income requirement.

On December 11, 2024, BHBM agreed to waive applicability of this covenant (and any breach arising therefrom) as of September 28, 2024.

Borrowings and all other obligations under the Credit Agreement (including amounts outstanding under the existing term notes (discussed below) 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 March 30, 2023, in connection with entering into the Credit Agreement, the Company amended each of the following promissory notes to replace the interest rate benchmark based on LIBOR and related LIBOR-based mechanics with an interest rate benchmark based on SOFR, with such amendments becoming effective upon the expiration of the then applicable interest period (the “Notes Amendment Effective Date”) and with the following terms:

• Promissory Note – Rustic Inn purchase – The 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 , commencing on September 1, 2018, with a balloon payment of $ 2,474,000 on June 1, 2025, and commencing on the Notes Amendment Effective Date, bears interest at SOFR plus 3.65 % per annum.

• Promissory Note - JB's on the Beach purchase – On May 15, 2019, the Company issued a promissory note under a prior 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, commencing on the Notes Amendment Effective Date, bears interest at SOFR plus 3.65 % per annum.

• Promissory Note - Sequoia renovation – Also on May 15, 2019, the Company converted $ 3,200,000 of prior 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, commencing on the Notes Amendment Effective Date, bears interest at SOFR plus 3.65 % per annum.

Promissory Note - Blue Moon Fish Company

On December 1, 2020, the Company acquired a restaurant and bar named Blue Moon Fish Company located in Lauderdale-by-the-Sea, FL.

In connection with the purchase the Company entered into a four-year note held by the sellers in the amount of $ 1,000,000 payable in monthly installments of $ 23,029 including interest at 5 %.

Paycheck Protection Program Loans

Prior to fiscal 2023, the Company received loan proceeds from several banks in the aggregate amount of $ 15,106,000 (the “PPP Loans”) under the Paycheck Protection Program of the CARES Act, which was enacted March 27, 2020.

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

During the year ended September 30, 2023, $ 272,000 of PPP Loans (including $ 6,000 of accrued interest), were forgiven.

During the year ended September 30, 2023, the Company made payments related to the unforgiven portion of PPP Loans in the aggregate amount of $ 531,000 .

As of September 28, 2024 and September 30, 2023, no PPP Loans were outstanding;

however, the Company was denied forgiveness of one PPP Loan in fiscal 2023 in the amount of $ 285,000 and accordingly such amount was repaid.

The Company filed an appeal concurrent with the repayment, which was granted and the amount was forgiven and refunded to the Company in November 2023.

Such amount is included in other income in the consolidated statement of operations for the year ended September 28, 2024.

The terms of outstanding promissory notes, as amended, are as follows as of September 27, 2025:

• Promissory Note – Rustic Inn purchase – in the original principal amount of $ 4,400,000 , which is secured by a mortgage on the Rustic Inn real estate, is payable in equal quarterly installments of $ 71,333 , with a balloon payment of $ 1,618,000 on June 1, 2028, and bears interest at SOFR plus 3.65 % per annum.

• Promissory Note - JB's on the Beach purchase – in the original principal amount of $ 7,000,000 and is payable in equal quarterly installments of $ 250,000 through June 1, 2026 with interest at SOFR plus 3.65 % per annum.

• Promissory Note - Sequoia renovation – in the original principal amount of $ 3,200,000 and is payable in equal quarterly installments of $ 114,286 through June 1, 2026 with interest at SOFR plus 3.65 % per annum.

Deferred Financing Costs

Deferred financing costs incurred in the amount of $ 304,000 are being amortized over the life of the agreements using the effective interest rate method and included in interest expense.

Deferred financing costs incurred in the amount of $ 105,000 incurred in connection with the above amendment are being amortized over the life of the agreements using the effective interest rate method and included in interest expense.

Deferred financing costs incurred in the amount of $ 304,000 related to the expired agreement were fully amortized as of September 27,

Amortization expense of $ 54,000 and $ 53,000 is included in interest expense for the years ended September 27, 2025 and September 28, 2024, respectively.

As of September 27, 2025, the aggregate amounts of notes payable maturities (excluding borrowings under the Revolving Facility) are as follows (in thousands):

COMMITMENTS AND CONTINGENCIES

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Most of the leases provide for the payment of base rents plus real estate taxes, insurance and other expenses and, in certain instances, for the payment of a percentage of the restaurant’s sales in excess of stipulated amounts at such facility and in one instance based on profits.

In connection with two of our leases, the Company obtained and delivered irrevocable letters of credit in the aggregate amount of approximately $ 562,000 as security deposits under such leases.

The Company's agreements with the Bryant Park Corporation (the “Landlord”), (a private non-profit entity that manages Bryant Park under agreements with the New York City Department of Parks & Recreation) for the Bryant Park Grill & Cafe and The Porch at Bryant Park expire on April 30, 2025.

During July 2023 (for the Bryant Park Grill & Cafe ) and September 2023 (for The Porch at Bryant Park) , the Company received requests for proposals (the "RFPs") from the Landlord to which we responded on October 26, 2023.

The agreements offered under the RFPs for both locations are for new 10-year agreements, with one five-year renewal option.

Any operator awarded the agreements must be approved by both the New York City Department of Parks & Recreation and the New York Public Library.

To date, the landlord has not announced the selection of a successful bidder;

however, the landlord has made public statements of its intention to select an operator other than the Company.

In response to these public statements and other information obtained by the Company, management has engaged outside advisors who have been assisting with our efforts to obtain the extensions by ensuring the RFP awards process is both fair and transparent.

We intend to pursue all available options to protect our interests.

Legal Proceedings — In the ordinary course its business, the Company is a party to various lawsuits arising from accidents at its restaurants and workers’ compensation claims, which are generally handled by the Company’s insurance carriers.

employment by the Company of management personnel, waiters, waitresses and kitchen staff at a number of different restaurants has resulted in the institution, from time to time, of litigation alleging violation by the Company of employment discrimination laws.

In connection with one of our leases, the Company obtained and delivered irrevocable letters of credit in the aggregate amount of approximately $ 324,000 as security deposits under such leases.

Bryant Park Grill — The Company's agreements with the Bryant Park Corporation (the “Landlord”) (a private non-profit corporation that operates and maintains Bryant Park under agreements with the City of New York Department of Parks & Recreation), for the Bryant Park Grill & Café expired on April 30, 2025 and for The Porch at Bryant Park expired on March 31, 2025.

In July of 2023 (for the Bryant Park Grill & Café ) and September of 2023 (for The Porch at Bryant Park ), the Company received requests for proposals (the "RFPs") from the Landlord to which we responded on October 26, 2023.

The agreements offered under the RFPs for both locations were for new 10-year agreements, with one five-year renewal option.

In the second quarter of 2025, the Landlord stated publicly that it had selected a new operator for the Bryant Park Grill & Café and The Porch at Bryant Park .

However, to the best of our knowledge, no agreements between the Landlord and the selected operator have received the approvals of either the City of New York Department of Parks & Recreation or the New York Public Library, of which both approvals are required before any new lease can become effective.

Management has been working with outside advisors to assist our efforts to ensure that the RFP awards process was both fair and transparent and to enforce the Company's right of first lease under our lease agreements in connection with the Bryant Park Café .

On March 28, 2025, we filed a complaint in New York State Supreme Court (the "New York Action"), alleging among other things, that the bid process conducted by the Landlord was defective, failed to comply with the provisions of the agreements underlying the Landlord’s right to operate Bryant Park and violated applicable law;

that a lease was being awarded to a lower bidder with a limited, unsuccessful track record in the hospitality business;

and that the award of the lease for the Caf é violated our right of first lease.

As part of the relief sought in the New York Action, we are requesting that the court declare that, under the circumstances presented, the Landlord was required to accept—and should have accepted —our submitted bids.

In addition, on March 28, 2025, we also filed a motion for a preliminary injunction in court to enjoin the Landlord from commencing legal proceedings to evict the Company from the Bryant Park Grill & Café and The Porch at Bryant Park premises.

On April 24, 2025, the Court denied the motion.

We have filed a notice of appeal of the ruling.

On April 29, 2025, we also filed a motion for a preliminary injunction in the New York State Supreme Court, Appellate Division, First Department.

That motion was also denied.

The Company has received from the Landlord a “notice to quit” the premises and for the Company to terminate its tenancy.

On June 16, 2025, the Company filed an amended complaint in the New York Action, adding a cause of action for age discrimination by the Landlord in its selection of a new operator for the Bryant Park Grill & Café and The Porch at Bryant Park .

On June 26, 2025, the Landlord filed counterclaims against the Company in the New York Action seeking, among other things, to eject the Company from the Bryant Park Grill & Café and The Porch at Bryant Park premises.

On July 16, 2025, the Company moved to dismiss eight of the fourteen counterclaims filed by the Landlord.

That motion is still pending.

On July 29, 2025, the Landlord filed a motion to require the Company to make monthly use and occupancy payments in connection with the Bryant Park Grill & Café and The Porch at Bryant Park during the pendency of the case.

Given that the Company had attempted to make rent payments, that were rejected by the Landlord, following commencement of its lawsuit, it did not oppose the Landlord’s motion, and on August 13, 2025, the Court issued a decision requiring the Company to make use and occupancy payments for the Bryant Park Grill & Café and The Porch at Bryant Park during the pendency of the case.

The Company has made and will continue to make all such payments.

As of the date of this filing, we continue to operate the above properties and intend to do so until we are either awarded the lease extensions or ordered to vacate the premises.

The underlying lawsuit filed by the Company to protect its rights continues, and we will pursue all available options to protect the Company's interests.

Management, after consultation with legal counsel, is unable to predict the outcome of this matter at this time.

While the outcome of these proceedings cannot be predicted with certainty, the Bryant Park Grill & Caf é and The Porch at Bryant Park , collectively, accounted for $ 25.5 million and $ 31.1 million of our total revenues for the years ended September 27, 2025 and September 28, 2024, respectively, which represented approximately 15.4 % and 17.4 % of our total revenue for such periods, respectively.

The uncertainty related to this dispute has had a material adverse impact on our business, financial condition, and results of operations and will continue to do so while the dispute is litigated and if we are unable to prevail in the above actions and/or are unable to extend or renew these leases on favorable terms, if at all.

Legal Proceedings — In the ordinary course of business, the Company is a party to various lawsuits arising from accidents at its restaurants and workers’ compensation claims, which are generally handled by the Company’s insurance carriers.

The employment by the Company of management personnel, waiters, waitresses and kitchen staff at a number of different restaurants has resulted in the institution, from time to time, of litigation alleging violation by the Company of employment discrimination laws.

Management believes, based in part on the advice of counsel, that the ultimate resolution of these matters will not have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

STOCK OPTIONS

Prior to fiscal 2022, the Company had options outstanding under two stock option plans:

the 2010 Stock Option Plan (the “2010 Plan”) and the 2016 Stock Option Plan (the “2016 Plan”).

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.

On March 15, 2022, the shareholders of the Company approved the Ark Restaurants Corp.

2022 Stock Option Plan (the "2022 Plan").

Effective with this approval, the Company terminated the 2016 Plan along with the 63,750 authorized but unissued options under the 2016 Plan.

Such termination did not affect any of the options previously issued and outstanding under the 2016 Plan, which remain outstanding in accordance with their terms.

Under the 2022 Plan, 500,000 options were authorized for future grant and are exercisable at prices at least equal to the fair market value of such stock on the dates the options were granted.

The options expire ten years after the date of grant.

The Company has options outstanding under two stock option plans, the 2016 Stock Option Plan and the 2022 Stock Option Plan.

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 10 years after the date of grant.

On January 18, 2024, options to purchase 107,500 shares of common stock at an exercise price of $ 14.80 per share were granted to officers and directors of the Company under the 2022 Stock Option Plan (the "2024 Grant").

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The grant date fair value of these stock options was $ 4.39 per share and totaled approximately $ 472,000 .

During the year ended September 28, 2023, no options to purchase shares of common stock were issued by the Company.

On December 2, 2024, options to purchase 10,000 shares of common stock at an exercise price of $ 9.99 per share were granted to an employee of the Company under the 2022 Stock Option Plan (the "2025 Grant").

Such options are exercisable as to 25 % of the shares commencing on the first anniversary of the date of grant and as to an additional 25 % on each yearly anniversary thereafter.

The grant date fair value of these stock options was $ 2.94 per share and totaled approximately $ 29,000 .

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

The fair value of each of the Company’s stock options is estimated on the date of grant using a Black-Scholes option-pricing model that uses assumptions that relate to the expected volatility of the Company’s common stock, the expected dividend yield of the Company’s stock, the expected life of the options and the risk-free interest rate.

The assumptions used for the 2024 Grant include a risk-free interest rate of 3.2 %, volatility of 49.7 %, a dividend yield of 4.2 % and an expected life of 10 years.

The assumptions used for the 2024 Grant include a risk-free interest rate of 3.2 %, volatility of 49.7 %, a dividend yield of 4.2 % and an expected life of 10 years and the assumptions used for the 2025 Grant include a risk-free interest rate of 4.1 %, volatility of 34.1 %, a dividend yield of 3.7 % and an expected life of 10 years.

The Company also maintains a Section 162(m) Cash Bonus Plan.

Under the Company's 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.

The following table summarizes stock option activity under all plans:

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grant 360,000 370,000

Compensation cost charged to operations for the years ended September 28, 2024 and September 30, 2023 for stock-based compensation programs was approximately $ 237,000 and $ 314,000 , respectively, and total stock-based compensation activity for the year ended September 28, 2024 was ($ 919,000 ) which includes reversal of stock-based compensation expense relating

to forfeitures in the amount of $ 1,156,000 .

Compensation cost charged to operations for the years ended September 27, 2025 and September 28, 2024 for stock-based compensation programs was approximately $ 146,000 and $ 237,000 , respectively, and total stock-based compensation activity for the years ended September 27, 2025 and September 28, 2024 was $ 34,000 and ($ 919,000 ), respectively, which includes reversal of stock-based compensation expense relating to forfeitures in the amounts of $ 112,000 and $ 1,156,000 for the years ended September 27, 2025 and September 28, 2024, respectively.

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

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$ 19.61 - $ 22.30 42,500 $ 21.02 3.2 42,500 $ 21.02 3.2

The Company also maintains a Section 162(m) Cash Bonus Plan.

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.

387,250 $ 17.66 5.5 306,000 $ 18.52 4.8

On July 4, 2025, President Trump signed H.R.

1, the “One Big Beautiful Bill Act” (“OBBBA”) into law.

The OBBBA makes permanent many of the tax provisions previously enacted as part of the 2017 Tax Cut and Jobs Act that were set to expire at the end of 2025.

The OBBBA also includes (i) the restoration of immediate expensing for domestic research and development expenditures, (ii) the reinstatement of 100% bonus depreciation for qualified property and (iii) favorably modifying the Internal Revenue Code Section 163(j) interest limitation from tax adjusted EBIT to EBITDA.

FASB Topic 740, Income Taxes , requires the tax effects of changes in tax laws or rates be recognized in the period in which the law is

The enactment of the OBBBA did not have a material impact on the Company’s effective tax rate, or deferred tax balances as of September 27, 2025.

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 years ended September 28, 2024 and September 30, 2023, the Company recorded income of $ 285,000 and $ 272,000 , respectively, for financial reporting purposes related to the forgiveness of its PPP Loans.

The forgiveness of these amounts is not taxable.

The benefit for income taxes consists of the following:

During the year ended September 28, 2024, the Company recorded income of $ 285,000 for financial reporting purposes related to the forgiveness of its PPP Loans which is not taxable.

The provision (benefit) for income taxes consists of the following:

September 27,

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State and local income taxes, net of tax benefits ( 100 ) 231

Goodwill impairment — 419

Gain on forgiveness of PPP Loans — ( 60 )

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Tax credits 4,033 3,376

Partnership investments 260

Other 228 392

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Depreciation and amortization ( 16,032 ) ( 19,636 )

Partnership investments — ( 188 )

Prepaid expenses ( 350 ) ( 373 )

Deferred tax liabilities ( 16,382 ) ( 20,009 )

Net deferred tax assets $ 4,799 $ 3,738

Net deferred tax assets (liabilities) $ ( 360 ) $ 4,799

In assessing the realizability of deferred tax assets, management considers whether it is more-likely-than-not that the deferred tax assets will be realized.

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

The Company recorded a valuation allowance of $ 4,236,000 and $ 3,273,000 as of September 28, 2024 and September 30, 2023, respectively, attributable to certain federal tax credits and state and local net operating loss carryforwards which are not realizable on a more-likely-than-not basis.

During the years ended September 28, 2024 and September 30, 2023, the Company’s valuation allowance increased by approximately $ 963,000 and $ 1,866,000 , respectively, primarily related to certain general business credit carryforwards that are not expected to be realized on a more-likely-than-not basis.

A significant piece of objective negative evidence evaluated is the cumulative loss incurred over the three-year period ended September 27, 2025.

Such objective evidence limits the ability to consider other subjective evidence, such as our projections for future growth.

Based on the weight of available evidence, the Company determined that its deferred tax assets were not realizable on a more-likely-than-not basis and that a full valuation allowance is required.

Accordingly, the Company increased the valuation allowance by $ 7,322,000 for the year ended September 27, 2025.

As of September 27, 2025, the Company had General Business Credit carryforwards of approximately $ 4,033,000 which expire through fiscal 2045.

In addition, as of September 28, 2024, the Company has New York State net operating loss carryforwards of approximately $ 27,471,000 and New York City net operating loss carryforwards of approximately $ 25,268,000 that expire through fiscal 2044.

In addition, as of September 27, 2025, the Company has New York State net operating loss carryforwards of approximately $ 27,471,000 and New York City net operating loss carryforwards of approximately $ 25,268,000 that expire in varying amounts through fiscal 2041.

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

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

However, if recognized, the entire amount of unrecognized tax benefit would attract a valuation allowance, thereby offsetting the favorable impact to the annual effective tax rate.

For the years ended September 27, 2025 and September 28, 2024, there are no amounts accrued for the payment of interest and penalties.

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For the year ended September 28, 2024, the dilutive effect of options to purchase 328,250 shares of common stock at exercise prices ranging from $ 10.65 per share to $ 22.30 per share were not included in diluted earnings per share as their impact would have been anti-dilutive.

On November 8, 2023, February 6, 2024, and May 7, 2024, the Board of Directors of the Company (the "Board") declared quarterly cash dividends of $ 0.1875 , $ 0.1875 , and $ 0.1875 , respectively, per share, which were paid on December 13, 2023, March 13, 2024, and June 12, 2024, respectively, to the stockholders of record of the Company's common stock at the close of business on November 30, 2023, February 29, 2024, and May 31, 2024, respectively.

On November 8, 2023, February 6, 2024, and May 7, 2024, the Board declared quarterly cash dividends of $ 0.1875 , $ 0.1875 , and $ 0.1875 , respectively, per share, which were paid on December 13, 2023, March 13, 2024, and June 12, 2024, respectively, to the stockholders of record of the Company's common stock at the close of business on November 30, 2023, February 29, 2024, and May 31, 2024, respectively.

The Board has not declared any dividends since May 7, 2024.

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Such amounts consist of loans that are payable on demand, bear interest at the minimum statutory rate ( 4.00 % at September 27, 2025 and 4.57 % at September 28, 2024), and are net of reserves for collectability.

During the year ended September 28, 2024, the Company made payments totaling $ 43,000 to the mother of Samuel Weinstein, the Co-Chief Operating Officer, for design services.

SUBSEQUENT EVENTS

On November 26, 2024, the Company agreed to terminate its lease for the food court at The Hard Rock Hotel and Casino in Tampa, FL.

The termination agreement is subject to the approval of the United States Department of the Interior, Bureau of Indian Affairs.

In exchange for vacating the premises sometime in late December 2024, Ark Hollywood/Tampa Investment LLC, a subsidiary of the Company, (in which we own a 65 % interest) will receive a termination payment in the amount of $ 5,500,000 and all obligations under the lease will cease.

The Company expects to record a gain related to the termination payment and it is expected that Ark Hollywood/Tampa Investment LLC will distribute approximately 35 % of the net proceeds, after expenses, to the other equity holders of Ark Hollywood/Tampa Investment LLC.

During the years ended September 27, 2025 and September 28, 2024, the Company made payments totaling $ 57,000 and $ 43,000 , respectively, to the mother of Samuel Weinstein, the Co-Chief Operating Officer, for design services.

SEGMENT INFORMATION

Operating segments are defined as components of a company that engage in business activities from which it may earn revenue and incur expenses, and for which separate financial information is available and is regularly reviewed by the chief operating decision maker ("CODM") to assess the performance of the individual segments and make decisions about company resources such as personnel and working capital to be allocated to the segments.

The Company determined that it has one operating segment and one reportable segment which is reflected in the Company’s current organizational and management structure.

The accounting policies of the segment are the same as those described in Note 1 - Business and Summary of Significant Accounting Policies.

The Company’s CODM is the Chief Executive Officer who manages the Company’s operations on a reportable segment basis.

The Company’s CODM reviews its operations and financial performance at a consolidated level by comparing actual results to expected and prior period results.

This approach allows the CODM to assess whether the Company’s operating segment is meeting its financial goals, identify trends and make more informed decisions about resource allocation and performance targets.

When evaluating the Company’s financial performance, the CODM regularly reviews total revenues, expenses and consolidated net income (loss) as reported on the Consolidated Statements of Operations as well as non-GAAP measures such as Adjusted EBITDA to allocate Company resources and assess the performance of the Company.

Segment asset information is not used by the CODM to assess performance and allocate resources.

The table below is a summary of the segment net income (loss), including significant segment expenses for the years ended September 27, 2025 and September 28, 2024:

September 27,

2025 September 28,

(in thousands)

Food and beverage sales $ 163,312 $ 179,110

Other revenue 2,439 4,435

Total revenues 165,751 183,545

COSTS AND EXPENSES:

Food and beverage cost of sales 46,427 49,519

Payroll expenses 60,346 65,844

Occupancy expenses 22,527 24,622

Other operating costs and expenses (1) 22,644 24,125

General and administrative expenses (2) 12,001 12,263

Depreciation and amortization 3,138 4,090

(Gain) loss on closure of El Rio Grande ( 173 ) 876

Gain on termination of Tampa Food Court lease ( 5,235 ) —

Impairment losses on right-of-use and long-lived assets 4,700 2,500

Goodwill impairment 3,440 4,000

Interest expense, net 369 577

Other (income) expense, net (3) ( 594 ) ( 311 )

Provision (benefit) for income taxes 5,324 ( 815 )

Segment net loss ( 9,163 ) ( 3,745 )

Reconciliation of profit or loss:

Adjustments and reconciling items — —

Consolidated net loss $ ( 9,163 ) $ ( 3,745 )

____________________________________________________________________________________________

(1) Other operating costs and expenses are comprised of utilities, repairs and maintenance, advertising, credit card processing fees, restaurant supplies and other restaurant operating costs.

(2) General and administrative expenses relate solely to the corporate office in New York City and are comprised of salaries and benefits, professional and consulting fees and rent and related expenses.

(3) Other (income) expense, net includes gains and losses on disposal of assets, dividends received and a gain on PPP loan forgiveness.

Exhibits Index

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10.35 Second Amended and Restated Security Agreement, dated as of March 30, 2023, by and between Ark Restaurants Corp., and Bank Hapoalim B.M., incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed with the SEC on April 5, 2023.

10.36 Omnibus Amendment to Second Amended and Restated Credit Agreement, dated as of May 29, 2025, by and between Ark Restaurants Corp.

and Bank Hapoalim B.M., as lender, incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 10-Q filed with the SEC on August 12, 2025.

14 Code of Ethics, incorporated by reference to Exhibit 14.1 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended September 27, 2003.

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(Marcia Allen)

/s/ Steven Shulman Director December 19, 2024

Director December 18, 2025

(Steven Shulman)

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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