What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-02-10 compared with 2025-08-12 · 100 added, 168 removed, 94 unchanged (74% of the section changed)

9 unchanged sentences

Unless otherwise stated, references to particular years, quarters, months or periods refer to our fiscal years and the associated quarters, months and periods of those fiscal years.

Recent Developments

Bryant Park Grill & Cafe and The Porch at Bryant Park

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 & Cafe 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 & Cafe ) 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 in assisting with our efforts to obtain the extensions by ensuring the RFP awards process was both fair and transparent.

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 Cafe lease violated our right of first lease under our lease agreements.

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 is now pending.

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.

The Company has continued to make all required use and occupancy payments for the Bryant Park Grill & Café and The Porch at Bryant Park , and will continue to make such payments.

As of the date of this filing, we continue to operate the above properties as a holdover tenant 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 & Cafe and The Porch at Bryant Park , collectively, accounted for $19.7 million and $23.3 million of our total revenues for the 39 weeks ended June 28, 2025 and June 29, 2024,

respectively, which represented approximately 15.4% and 16.7% of our total revenue for such periods, respectively.

If the Company is unable to prevail in the above actions and/or is unable to extend or renew these leases on favorable terms, if at all, it could have a material adverse effect on our business, financial condition, and results of operations.

Inflation and Other Matters

Our operating results have been and continue to be impacted by geopolitical and macroeconomic events, causing increased commodity prices, wage inflation and other increased costs.

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 the supply chain and delays in opening or acquiring new restaurants.

If these factors significantly impact our cash flow in the future, we may again implement mitigation actions such as suspending 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.

As of June 28, 2025, the Company owned and operated 16 restaurants and bars, 12 fast food concepts and catering operations, exclusively in the United States, that have similar economic characteristics, nature of products and service, class of customer and distribution methods.

As of December 27, 2025, the Company owned and operated 16 restaurants and bars, 12 fast food concepts and catering operations, exclusively in the United States, that have similar economic characteristics, nature of products and service, class of customer and distribution methods.

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

4 unchanged sentences

Under this method certain years will contain 53 weeks.

The periods ended June 28, 2025 and June 29, 2024 each included 13 and 39 weeks.

The periods ended December 27, 2025 and December 28, 2024 each included 13 weeks.

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

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

Although our business is highly seasonal, our broader geographical reach 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 D.C.

(January, February and March), is the poorest performing quarter;

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

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

however, this is 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.

(our largest restaurants) and our outdoor cafes.

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

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

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

Recent Developments

Bryant Park Grill & Cafe and The Porch at Bryant Park

The Company’s lease agreements for the Bryant Park Grill & Café and The Porch at Bryant Park expired in April 2025 and March 2025, respectively.

In response to requests for proposals issued by the landlord in 2023, the Company submitted bids for new long-term agreements.

In the second quarter of 2025, the landlord publicly announced the selection of a new operator for both locations;

however, as of the date of this filing, the required approvals from the City of New York Department of Parks & Recreation and the New York Public Library have not been obtained, and no new lease has become effective.

The Company has initiated legal proceedings in New York State Supreme Court challenging the lease award process and asserting its contractual rights, including its right of first lease for the Bryant Park Café .

The litigation remains ongoing, with discovery continuing and motions pending, including a motion for summary judgment filed by the landlord.

While the court has required the Company to make use and occupancy payments during the pendency of the case, the Company continues to operate both restaurants and intends to do so unless it is ordered to vacate or is awarded lease extensions.

Management is unable to predict the outcome of the litigation at this time.

The Bryant Park Grill & Café and The Porch at Bryant Park represented a significant portion of the Company’s revenues, accounting for approximately 19.5% and 22.3% of total revenue for the 13 weeks ended December 27, 2025 and December 28, 2024, respectively.

The ongoing uncertainty related to this dispute has had, and is expected to continue to have, a material adverse effect on the Company’s business, financial condition, and results of operations while the matter remains unresolved and if the Company is ultimately unable to retain these locations on favorable terms, or at all.

Further discussion related to these matters is included in Note 8 of the consolidated condensed financial statements.

Investment in and Receivable From New Meadowlands Racetrack LLC ("NMR")

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

In January 2026, the New Jersey Senate Government, Wagering, Tourism & Historic Preservation Committee proposed a constitutional amendment to allow the legislature to authorize casino gambling at both the Monmouth Park and Meadowlands Racetracks.

Such amendment will require a three-fifths vote in both legislative chambers followed by a voter referendum in a general election before becoming law.

It is possible that a referendum could be on the ballot in November 2026 and if it were to pass, NMR could open a temporary facility in 2027 and a permanent one by 2028.

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.

Further discussion related to these matters is included in Note 4 of the consolidated condensed financial statements.

Results of Operations

The Company's operating loss for the 13 weeks ended June 28, 2025 (which includes impairment charges of $2,940,000 and $1,760,000 related to Sequoia's ROU and long-lived assets, respectively, and a gain on the closure of El Rio Grande of $178,000) decreased 514.4% as compared to operating income in the same period of the prior year (which includes impairment charges of $1,561,000 and $939,000 related to Sequoia's ROU and long-lived assets, respectively).

Excluding the above items in the current and prior periods, adjusted operating income of $1,107,000 for the 13 weeks ended June 28, 2025 decreased 66.7% as compared to adjusted operating income of $3,324,000 for the 39 weeks ended June 29, 2024.

The Company's operating income for the 39 weeks ended June 28, 2025 (which includes:

(i) a gain on the closure of El Rio Grande of $173,000, (ii) a gain on the termination of our Tampa Food Court lease of $5,235,000, (iii) impairment charges of $2,940,000 and $1,760,000 related to Sequoia's ROU and long-lived assets, respectively, and (iv) a goodwill impairment charge of $3,440,000) decreased 291.2% as compared to the same period of the prior year (which includes impairment charges of $1,561,000 and $939,000 related to Sequoia's ROU assets and long-lived assets, respectively).

Excluding the above items in the current and prior periods, adjusted operating income of $390,000 for the 39 weeks ended June 28, 2025 decreased 89.5% compared to adjusted operating income of $3,725,000 for the 39 weeks ended June 29, 2024.

The following table summarizes the significant components of the Company’s operating results for the 13- and 39-week periods ended June 28, 2025 and June 29, 2024:

13 Weeks Ended Variance 39 Weeks Ended Variance

2025 June 29,

2024 $ % June 28,

2025 June 29,

(in thousands) (in thousands)

The Company's operating income for the 13 weeks ended December 27, 2025 decreased 80.8% as compared to operating income in the same period of the prior year (which includes a loss on the closure of El Rio Grande in the amount of $146,000 and a gain on the termination of our Tampa Food Court lease in the amount of $5,235,000).

Excluding these items in the prior period, operating income of $1,093,000 for the 13 weeks ended December 27, 2025 increased 82.2% as compared to adjusted operating income of $600,000 for the 13 weeks ended December 28, 2024.

The following table summarizes the significant components of the Company’s operating results for the 13 weeks ended December 27, 2025 and December 28, 2024:

13 Weeks Ended Variance

2025 December 28,

(in thousands)

Food and beverage sales $ 40,246 $ 44,442 $ (4,196) -9.4 %

10 unchanged sentences

Depreciation and amortization 610 777 (167) -21.5 %

Gain on closure of El Rio

(178) — (178) N/A (173) — (173) N/A

Gain on closure of Tampa Food

— — — N/A (5,235) — (5,235) N/A

Impairment losses on right-of

use and long-lived assets 4,700 2,500 2,200 N/A 4,700 2,500 2,200 N/A

Goodwill impairment — — — N/A 3,440 — 3,440 N/A

Loss on closure of El Rio Grande — 146 (146) N/A

Gain on termination of Tampa

Food Court lease — (5,235) 5,235 N/A

Total costs and expenses 39,656 39,299 357 0.9 %

OPERATING INCOME (LOSS) $ (3,415) $ 824 $ (4,239) -514.4 % $ (2,342) $ 1,225 $ (3,567) -291.2 %

During the 13- and 39-week periods ended June 28, 2025, revenues decreased 13.3% and 8.4%, respectively, as compared to revenues for the 13- and 39-week periods ended June 29, 2024.

We attribute this decrease primarily to the decreases in same-store sales discussed below and the closures of El Rio Grande and the Tampa Food Court .

OPERATING INCOME $ 1,093 $ 5,689 $ (4,596) -80.8 %

During the 13 weeks ended December 27, 2025, revenues decreased 9.4% as compared to revenues for the 13 weeks ended December 28, 2024.

We attribute this decrease primarily to the decreases in same-store sales discussed below and the closure of the Tampa Food Court .

Food and Beverage Same-Store Sales

On a Company-wide basis, same-store sales decreased 7.4% during the 13 weeks ended June 28, 2025 as compared to the same period of last year as follows:

13 Weeks Ended Variance

2025 June 29,

(in thousands)

Las Vegas $ 13,225 $ 13,532 $ (307) -2.3 %

New York 8,273 10,455 (2,182) -20.9 %

Washington, D.C.

2,515 3,178 (663) -20.9 %

Atlantic City, NJ 595 734 (139) -18.9 %

Alabama 5,333 5,690 (357) -6.3 %

Florida 12,801 12,575 226 1.8 %

Same-store sales 42,742 46,164 $ (3,422) -7.4 %

Other 195 3,012

Food and beverage sales $ 42,937 $ 49,176

Same-store sales in Las Vegas decreased 2.3% as a result of lower than expected headcounts from competition at Yolos located in Planet Hollywood Resort & Casino.

Same-store sales in New York decreased 20.9% which we attribute primarily to decreases in both catering and a la carte revenue at the Bryant Park Grill as a result of the negative publicity related to our dispute with the landlord.

Same-store sales in Washington, D.C.

decreased 20.9% which we attribute primarily to lower headcounts as a result of challenging conditions associated with hybrid work schedules, government layoffs and elevated crime rates.

Same-store sales in Atlantic City, NJ decreased 18.9% which we attribute primarily to lower than expected customer traffic at the property where we are located.

Same-store sales in Alabama decreased 6.3% which we attribute primarily to lower customer traffic as a result of economic pressures on the customers who frequent our properties.

Same-store sales in Florida increased 1.8% which we attribute primarily to increased headcounts.

Other food and beverage sales consist of sales related to properties that were closed ( El Rio Grande and the Tampa Food Court) and other fees.

On a Company-wide basis, same-store sales decreased 3.3% during the 39 weeks ended June 28, 2025 as compared to the same period of last year as follows:

On a Company-wide basis, same-store sales decreased 7.3% during the 13 weeks ended December 27, 2025 as compared to the same period of last year as follows:

13 Weeks Ended Variance

2025 June 29,

2025 December 28,

(in thousands)

9 unchanged sentences

Food and beverage sales $ 40,246 $ 44,442

Same-store sales in Las Vegas decreased 1.7% as a result of lower than expected headcounts from competition at Yolos located in Planet Hollywood Resort & Casino.

Same-store sales in New York decreased 10.4% which we attribute primarily to decreases in both catering and a la carte revenue at the Bryant Park Grill as a result of the negative publicity related to our dispute with the landlord.

Same-store sales in Las Vegas decreased, 6.4% which we attribute primarily to lower revenues at our America property as a result of partial closure for renovations and lower visitor counts in Las Vegas.

Same-store sales in New York decreased 14.7%, which we attribute primarily to decreases in both catering and a la carte revenue at the Bryant Park Grill & Cafe as a result of the negative publicity related to our dispute with the landlord.

Same-store sales in Washington, D.C.

decreased 16.6% which we attribute primarily to lower headcounts as a result of challenging conditions in the area associated with hybrid work schedules, government layoffs and elevated crime rates.

increased 5.0%, which we attribute primarily to an increased number of catered events.

Same-store sales in Atlantic City, NJ decreased 15.0%, which we attribute primarily to lower than expected customer traffic at the property where we are located.

Same-store sales in Alabama decreased 2.1% which we attribute primarily to lower customer traffic in the second half of the period as a result of inclement weather and economic pressures on the customers who frequent our properties, partially offset by targeted menu price increases in the first quarter.

Same-store sales in Florida increased 2.0% which we attribute primarily to increased headcounts.

Other food and beverage sales consist of sales related to properties that were closed ( El Rio Grande and the Tampa Food Court) and other fees.

Same-store sales in Alabama decreased 4.4%, which we attribute primarily to lower customer traffic as a result of economic pressures on the customers who

frequent our properties.

Same-store sales in Florida decreased 3.7%, which we attribute primarily to increased competition.

Other food and beverage sales consist of sales related to properties that were closed (the Tampa Food Court in December 2024 ) and other fees.

Costs and Expenses

Costs and expenses for the 13 and 39 weeks ended June 28, 2025 and June 29, 2024 were as follows (in thousands):

Costs and expenses for the 13 weeks ended December 27, 2025 and December 28, 2024 were as follows (in thousands):

13 Weeks Ended

Revenues 13 Weeks Ended

June 29, 2024 %

Revenues Increase

(Decrease) 39 Weeks Ended

Revenues 39 Weeks Ended

June 29, 2024 %

Revenues Increase

Food and beverage cost of

sales $ 12,060 27.6 % $ 13,304 26.4 % $ (1,244) -9.4 % $ 35,650 27.8 % $ 37,512 26.8 % $ (1,862) -5.0 %

Food and beverage cost of sales $ 10,662 26.2 % $ 12,107 26.9 % $ (1,445) -11.9 %

Payroll expenses 14,209 34.9 % 16,408 36.5 % (2,199) -13.4 %

Occupancy expenses 5,679 13.9 % 6,148 13.7 % (469) -7.6 %

Other operating costs and

expenses 6,038 13.8 % 6,305 12.5 % (267) -4.2 % 17,422 13.6 % 18,233 13.0 % (811) -4.4 %

General and administrative

expenses 2,822 6.5 % 2,690 5.3 % 132 4.9 % 9,292 7.2 % 9,151 6.5 % 141 1.5 %

Depreciation and

amortization 964 2.2 % 1,033 2.0 % (69) -6.7 % 2,443 1.9 % 3,181 2.3 % (738) -23.2 %

Gain on closure of El Rio Grande (178) -0.4 % — — % (178) N/A (173) -0.1 % — — % (173) N/A

Gain on termination of Tampa Food Court lease — — % — — % — N/A (5,235) -4.1 % — — % (5,235) N/A

Impairment losses on right-of-use and long-lived assets 4,700 10.8 % 2,500 5.0 % 2,200 N/A 4,700 3.7 % 2,500 1.8 % 2,200 N/A

Goodwill impairment — — % — — % — N/A 3,440 2.7 % — — % 3,440 N/A

Other operating costs and expenses 5,317 13.0 % 5,800 12.9 % (483) -8.3 %

General and administrative expenses 3,179 7.8 % 3,148 7.0 % 31 1.0 %

Depreciation and amortization 610 1.5 % 777 1.7 % (167) -21.5 %

Loss on closure of El Rio Grande — — % 146 0.3 % (146) N/A

Gain on termination of Tampa Food Court lease — — % (5,235) -11.6 % 5,235 N/A

Total costs and expenses $ 39,656 $ 39,299 $ 357

Food and beverage costs as a percentage of total revenues for the 13 and 39 weeks ended June 28, 2025 increased as compared with the same periods of last year as a result of increases in commodity prices, which had been easing for several quarters, combined with a weaker event business in New York City and Washington, D.C.

in the first and third quarters of the current year compared to the prior year.

Payroll expenses as a percentage of total revenues for the 13 and 39 weeks ended June 28, 2025 increased marginally as compared with the same periods of last year as a result of increasing minimum wages in the states where we operate partially offset by better management of overtime hours.

Occupancy expenses as a percentage of total revenues for the 13 and 39 weeks ended June 28, 2025 increased marginally as compared with the same period of last year primarily as a result of increases in base rents and increases in property and liability insurance premiums partially offset by lower percentage rents as a result of the sales decreases discussed above.

Other operating costs and expenses as a percentage of total revenues for the 13 and 39 weeks ended June 28, 2025 increased as compared to the same period of last year primarily as a result of inflation and restaurant-level legal fees incurred in connection with the Bryant Park Grill & Café and The Porch at Bryant Park dispute with the landlord.

General and administrative expenses (which relate solely to the corporate office in New York City) for the 13 and 39 weeks ended June 28, 2025 increased as compared to the same periods of last year primarily as a result of increased consulting fees partially offset by lower bonus accruals in the current period.

Depreciation and amortization expense for the 13 and 39 weeks ended June 28, 2025 decreased as compared to the same periods of last year primarily as a result of certain assets becoming fully depreciated and the removal of assets associated with El Rio Grande and the Tampa Food Court .

(Gain) Loss on Closure of El Rio Grande

Food and beverage costs as a percentage of total revenues for the 13 weeks ended December 27, 2025 decreased as compared with the same period of last year as a result of targeted menu engineering.

Payroll expenses as a percentage of total revenues for the 13 weeks ended December 27, 2025 decreased as compared with the same period of last year as a result of better shift management of related overtime hours and lower performance bonuses in the current year.

Occupancy expenses as a percentage of total revenues for the 13 weeks ended December 27, 2025 increased marginally as compared with the same period of last year primarily as a result of increases in property and liability insurance premiums partially offset by lower percentage rents as a result of the sales decreases discussed above.

Other operating costs and expenses as a percentage of total revenues for the 13 weeks ended December 27, 2025 increased marginally as compared to the same period of last year primarily as a result of restaurant-level legal fees incurred in connection with the Bryant Park Grill & Café and The Porch at Bryant Park dispute with the landlord.

General and administrative expenses (which relate solely to the corporate office in New York City and are relatively fixed) for the 13 weeks ended December 27, 2025 increased as compared to the same periods of last year primarily as a result of the sales decreases discussed above.

Depreciation and amortization expense for the 13 weeks ended December 27, 2025 decreased as compared to the same periods of last year primarily as a result of certain assets becoming fully depreciated and the removal of assets associated with the Tampa Food Court .

Loss on Closure of El Rio Grande

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

1 unchanged sentence

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

During the 13 weeks ended June 28, 2025, the Company recognized a gain of $178,000 as a result of refinements of estimates.

During the 39 weeks ended June 28, 2025, the Company recognized a gain in the amount of $173,000 as a result of additional operating losses by the above refinements of estimates.

During the 13 weeks ended December 28, 2024, the Company incurred additional operating losses of $146,000.

Gain on Termination of Tampa Food Court Lease

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 and, accordingly, vacated the premises on December 15, 2024.

In connection with this, Ark Hollywood/Tampa Investment LLC, a subsidiary of the Company, (in which we own a 65% interest) received a termination payment in the amount of $5,500,000, all obligations under the lease ceased and we recorded a gain, net of expenses, in the amount of $5,235,000 during the 13 weeks ended December 28, 2024.

During the 13 weeks ended March 29, 2025, 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.

Impairment Losses on Right-of-Use and Long-lived Assets

During the 13 weeks ended June 29, 2024, impairment indicators were identified at our Sequoia property located in Washington, D.C.

due to lower than expected operating results.

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 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 as of June 28, 2025.

Based on a discounted cash flow analysis, we recognized additional impairment charges of $2,940,000 and $1,760,000 during the 13 weeks ended June 28, 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.

If expected performance is not realized, further impairment charges may be recognized in future periods, and such charges could be material.

Goodwill Impairment

Goodwill is the excess of cost over fair market value of tangible and intangible net assets acquired.

Goodwill is not presently amortized but tested for impairment annually or when the facts or circumstances indicate a possible impairment of goodwill as a result of a continual decline in performance or as a result of fundamental changes in a market.

During the three months ended March 29, 2025, the Company identified a triggering event in accordance with the Financial Accounting Standards Board (“FASB”), Accounting Standards Update ("ASU") 350-20, “ Intangibles—Goodwill and Other ,” primarily related to a decline in the Company's stock price in the second quarter of fiscal 2025 and the continued uncertainty related to the expiration of the Bryant Park Grill & Cafe and The Porch at Bryant Park leases (see Note 8 - 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 condensed statements of operations for the 39 weeks ended June 28, 2025.

The Company did not record any impairment to its goodwill during the 13 and 39 weeks ended June 29, 2024.

Gain on Sale of Condominiums

During the 13 weeks ended June 28, 2025, the Company sold two 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 $839,000 and recorded a gain of $391,000.

The Company intends to sell all of these units subject to market forces.

In connection with this, Ark Hollywood/Tampa Investment LLC, a subsidiary of the Company, (in which we own a 65% interest) received a termination payment in the amount

of $5,500,000;

all obligations under the lease ceased and we recorded a gain, net of expenses, in the amount of $5,235,000 during the 13 weeks ended December 28, 2024.

Liquidity and Capital Resources

4 unchanged sentences

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

As of June 28, 2025, we had a cash and cash equivalents balance of $12,325,000.

The Company had a working capital deficit of $2,767,000 at June 28, 2025 as compared with a working capital deficit of $10,659,000 at June 29, 2024.

This decrease in the deficit is primarily the result of the payment received in connection with the termination of the Tampa Food Court lease, amendments to the due dates of our notes payable and proceeds from the sales of the two condominiums.

As of December 27, 2025, we had a cash and cash equivalents balance of $9,139,000, total debt of $2,987,000 and a working capital deficit of $4,954,000 as compared with a working capital deficit of $5,377,000 at September 27, 2025.

Our profitability is dependent on, among other things, our ability to anticipate and react to changes in the cost of food and other raw materials, labor, energy and other supplies and services.

While we have not had material disruptions in our supply chain, we have experienced some product shortages and higher costs for many commodities.

There has also been a general shortage in the availability of restaurant staff and hourly workers in certain geographic areas in which we operate and has caused increases in the costs of recruiting and compensating such employees.

There has also been a general shortage in the availability of restaurant staff and hourly workers in certain geographic areas in which we operate which has caused increases in the costs of recruiting and compensating such employees.

In addition, certain operating and other costs, including health benefits, taxes, insurance, and other outside services, continue to increase with the general level of inflation and may also be subject to other cost and supply fluctuations outside of our control.

3 unchanged sentences

There can be no assurance that all of our future cost increases can be offset by higher menu prices or that higher menu prices will be accepted by our restaurant customers without any resulting changes in their visit frequencies or purchasing patterns.

Cash Flows for 39 Weeks Ended June 28, 2025 and June 29, 2024

Net cash provided by operating activities for the 39 weeks ended June 28, 2025 was $1,119,000 as compared to $3,926,000 in the same period as last year.

This decrease resulted primarily from a decrease in operating income, excluding:

(i) a loss on the closure of El Rio Grande of $173,000 in fiscal 2025, (ii) a gain on the termination of our Tampa Food Court lease of $5,235,000 in fiscal 2025, (iii) impairment charges related to Sequoia's ROU and long-lived assets of $4,700,000 and 2,500,000 in fiscal 2025 and fiscal 2024, respectively, and (iv) a goodwill impairment charge of $3,440,000 in fiscal 2025.

Net cash provided by investing activities for the 39 weeks ended June 28, 2025 was $4,662,000 as compared to cash used in investing activities of $1,204,000 in the same period as last year.

This increase resulted primarily from the payment received in connection with the termination of our Tampa Food Court lease and the proceeds received from the sales of condominiums.

Net cash used in financing activities for the 39 weeks ended June 28, 2025 and June 29, 2024 was $3,729,000 and $4,670,000, respectively, and resulted primarily from principal payments on notes payable and the payment of distributions to non-controlling interests and in the prior year the payment of dividends.

Cash Flows for 13 Weeks Ended December 27, 2025 and December 28, 2024

Net cash used in operating activities for the 13 weeks ended December 27, 2025 was $550,000 as compared to $1,346,000 in the same period of last year.

This decrease resulted primarily from a decrease in catered events.

Net cash used in investing activities for the 13 weeks ended December 27, 2025 was $858,000 as compared to net cash provided by investing activities of $4,895,000 in the same period as last year.

This decrease resulted primarily from the payment received in connection with the termination of our Tampa Food Court lease in the prior period.

Net cash used in financing activities for the 13 weeks ended December 27, 2025 and December 28, 2024 was $777,000 and $721,000, respectively, and resulted primarily from principal payments on notes payable and the payment of distributions to non-controlling interests.

Recent Developments

Bryant Park Grill

As further described above in the “Overview” section of the Management’s Discussion and Analysis of Financial Condition and Results of Operations and elsewhere in this Quarterly Report, the Company's agreements with the Bryant Park Corporation for the Bryant Park Grill & Café expired on April 30, 2025 and for The Porch at Bryant Park expired on March 31, 2025.

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 & Cafe and The Porch at Bryant Park , collectively, accounted for $7.9 million and $9.9 million of our total revenues for the 13 weeks ended December 27, 2025 and December 28, 2024, respectively, which represented approximately 19.5% and 22.3% 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.

Investment in and Receivable from New Meadowlands Racetrack LLC

As further described above in in the “Overview” section of the Management’s Discussion and Analysis of Financial Condition and Results of Operations and elsewhere in this Quarterly Report, since March 2013, the Company has made investments in New Meadowlands Racetrack LLC (“NMR”) through its purchase of membership interests in Meadowlands Newmark, LLC, an existing member of NMR.

As of the date of this report, the Company has made a total investment of $5,256,000.

Such amendment will require a three-fifths vote in both legislative chambers followed by a voter referendum in a general election before becoming law.

It is possible that a referendum could be on the ballot in November 2026 and if it were to pass, NMR could open a temporary facility in 2027 and a permanent one by 2028.

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.

Credit Facility

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

As of June 28, 2025, no advances were outstanding under the Credit Agreement.

As of June 28, 2025, the weighted average interest on the outstanding BHBM indebtedness was approximately 8.0%.

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

As of December 27, 2025, the weighted average interest on the outstanding BHBM indebtedness was approximately 7.5%.

Borrowings and all other obligations under the Credit Agreement, which include the promissory notes as discussed in Note 7 of the consolidated condensed financial statements, 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.

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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.

Deferred Tax Asset Valuation Allowance

The Company recognizes deferred tax assets and liabilities based on differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse.

A valuation allowance is established when, based on an evaluation of all available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The determination of the need for a valuation allowance requires significant judgment, including an assessment of the Company’s recent earnings history, future taxable income projections, the nature and expiration period of temporary differences, tax planning strategies, and changes in tax laws and regulations.

As of March 29, 2025, the Company concluded that its net deferred tax assets in the amount of $4,799,000 were no longer realizable on a more-likely-than-not basis as the Company is now in a cumulative loss position due to the goodwill impairment recorded in the current quarter and, accordingly, recorded a discrete tax provision for such amount as it can no longer rely on forecasts of future taxable income to support the realization of such deferred tax assets.

Management will continue to evaluate the need for a valuation allowance on a quarterly basis and may adjust the allowance as new information becomes available.

If actual results differ from these estimates or if the Company’s assumptions change, the valuation allowance may need to be adjusted in future periods, which could materially affect the Company’s financial condition and results of operations.

Cash Flow Outlook

As discussed above, 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 & Cafe expired on April 30, 2025 and for The Porch at Bryant Park expired on March 31, 2025.

As of the date of this filing, we continue to operate the above properties as a holdover tenant 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.

The Company’s inability to extend or renew these leases on favorable terms, if at all, could have a material adverse effect on our business, financial condition, and results of operations.

Other than the status of the above property, we are not aware of any other trends or events that would materially affect our capital requirements or liquidity.

We believe that our existing cash balances, internal cash-generating capabilities, current banking facilities and ability to secure additional financing, if necessary, are sufficient to finance our capital expenditures, debt maturities and other operating activities for at least the next 12 months.

Other than the status of the Bryant Park Grill & Cafe and The Porch at Bryant Park , we are not aware of any other trends or events that would materially affect our capital requirements or liquidity.

We believe that our existing cash balances, internal cash-generating capabilities and current banking facilities are sufficient to finance our capital expenditures, debt maturities and other operating activities for at least the next 12 months.

Critical Accounting Estimates

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In the process of preparing its consolidated condensed financial statements, the Company estimates the appropriate carrying value of certain assets and liabilities, which are not readily apparent from other sources.

The critical accounting estimates underlying the Company’s consolidated condensed financial statements include projected cash flows for fixed asset impairments, allowances for potential bad debts on accounts and notes receivable, assumptions regarding discount rates related to lease accounting, the useful lives and recoverability of its long-lived assets, such as property and intangibles, fair values of financial instruments, the realizable value of its tax assets and other matters.

The critical accounting estimates underlying the Company’s consolidated condensed financial statements include projected cash flows for fixed asset impairments, allowances for

potential bad debts on accounts and notes receivable, assumptions regarding discount rates related to lease accounting, the useful lives and recoverability of its long-lived assets, such as property and intangibles, fair values of financial instruments, the realizable value of its tax assets and other matters.

Management bases its estimates on certain assumptions, which it believes are reasonable in the circumstances, and actual results could differ from those estimates.

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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-Q

Item 2. Management’s Discussion and Analysis