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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

2021-01-15 compared with 2019-12-20 · 30 added, 42 removed, 25 unchanged (74% of the section changed)

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As part of our ongoing

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and Supplementary Data”

of this Annual Report on Form 10-K for our fiscal year ended September 28, 2019, we use interest

rate swap agreements to manage these risks.

of this Annual Report on Form 10-K for our fiscal year ended October 3, 2020, we use interest rate

swap agreements to manage these risks.

These instruments are not used for speculative purposes but are used to modify variable

rate obligations into fixed rate obligations.

At September 28, 2019,

we had three variable rate debt instruments outstanding that are impacted by changes in interest rates.

The interest rate of all

three variable rate debt instruments is equal to the lender’s LIBOR Rate plus two and one-quarter percent (2.25%) per annum.

The debt instruments further provide that the “LIBOR Rate”

is a rate of interest equal to the British Bankers Association

LIBOR Rate or successor thereto approved by the lender if the British Bankers Association is no longer making a LIBOR rate available.

In November, 2011, we financed our purchase of the real property and two building shopping center in Miami, Florida, with a $4,500,000

mortgage loan (the “$4.5M Mortgage Loan”).

In January, 2013, we refinanced the mortgage loan encumbering the property

where our combination package liquor store and restaurant located at 4 N.

Federal Highway, Hallandale, Florida, (Store #31) operates,

which mortgage loan is held by an unaffiliated third party lender (the “$1.405M Loan”).

In December, 2016, we closed

on a secured revolving line of credit which entitled us to borrow, from time to time through December 28, 2017, up to $5,500,000

(the “Credit Line”), which on December 28, 2017 converted to the term loan (the “Term Loan”).

At October 3, 2020, we

had two variable rate debt instruments outstanding that are impacted by changes in interest rates.

The interest rate of both variable

rate debt instruments is equal to the lender’s LIBOR Rate plus two and one-quarter percent (2.25%) per annum.

The debt instruments

further provide that the “LIBOR Rate”

is a rate of interest equal to the British Bankers Association LIBOR Rate or

successor thereto approved by the lender if the British Bankers Association is no longer making a LIBOR rate available.

2013, we refinanced the mortgage loan encumbering the property where our combination package liquor store and restaurant located

Federal Highway, Hallandale, Florida, (Store #31) operates, which mortgage loan is held by an unaffiliated third party

lender (the “$1.405M Loan”).

In December 2016, we closed on a secured revolving line of credit which entitled us to

borrow, from time to time through December 28, 2017, up to $5,500,000 (the “Credit Line”), which on December 28, 2017

converted to a term loan (the “Term Loan”).

As a means of managing

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lender to convert these variable rate debt obligations to fixed rates.

We are currently party to the following three (3) interest

We are currently party to the following two (2) interest

rate swap agreements:

first interest rate swap agreement entered into in November, 2011 by our wholly owned subsidiary, Flanigan’s Calusa Center,

LLC, relates to the $4.5 million Mortgage Loan (the “$4.5M Mortgage Loan Swap”).

The $4.5M Mortgage Loan Swap requires

us to pay interest for an eight (8) year period at a fixed rate of 4.51% on an initial amortizing notional principal amount of

$3,750,000, while receiving interest for the same period at LIBOR –

1 Month, plus 2.25%, on the same amortizing notional

principal amount.

We determined that at September 28, 2019, the interest rate swap agreement is an effective hedging agreement

and the fair value was not material;

second interest rate swap agreement entered into in January, 2013 relates to the $1.405M Loan (the “$1.405M Term Loan Swap”).

first interest rate swap agreement entered into in January 2013 relates to the $1.405M Loan (the “$1.405M Term Loan Swap”).

The $1.405M Term Loan Swap requires us to pay interest for a twenty (20) year period at a fixed rate of 4.35% on an initial amortizing

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the same amortizing notional principal amount.

We determined that at September 28, 2019, the interest rate swap agreement is an

effective hedging agreement and the fair value was not material;

(iii) The third interest

rate swap agreement entered into in December, 2016 relates to the Credit Line (the “Line of Credit Swap”).

of Credit Swap requires us to pay interest for a five (5) year period, commencing December 28, 2017 at a fixed rate of 4.65% on

an initial amortizing notional principal amount of $5,500,000, while receiving interest for the same period at LIBOR –

We determined that at October 3, 2020, the interest rate swap agreement is an effective

hedging agreement and the fair value was not material;

The second interest rate swap agreement entered into in December 2016 and became effective December 28, 2017, relates to the Term

Loan (the “Term Loan Swap”).

The Term Loan Swap requires us to pay interest for a five (5) year period at a fixed rate

of 4.61% on an initial amortizing notional principal amount of $5,500,000, while receiving interest for the same period at LIBOR

1 Month, plus 2.25%, on the same amortizing notional principal amount.

We determined that at September 28, 2019, the interest rate

swap agreement is an effective hedging agreement and the fair value was not material.

At September 28, 2019,

our cash resources earn interest at variable rates.

We determined that at October 3, 2020, the interest

rate swap agreement is an effective hedging agreement and the fair value was not material

At October 3, 2020, our

cash resources earn interest at variable rates.

Accordingly, our return on these funds is affected by fluctuations in interest

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Statements and supplementary data are on pages F-1 through F-6.

CHANGES IN AND DISAGREEMENTS

WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES.

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 7A. Quantitative and Qualitative Disclosures About Market Risk