What changed in this filing

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Item 9A. Controls and Procedures

2023-12-29 compared with 2023-01-18 · 1045 added, 604 removed, 409 unchanged (80% of the section changed)

CONTROLS AND PROCEDURES .

Evaluation of Disclosure Controls

and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls

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Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

As of October 1, 2022, an evaluation

As of September 30, 2023, an evaluation

was performed under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial

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Based on that evaluation, management, including our Chief Executive Officer and

Chief Financial Officer, concluded that our disclosure controls and procedures were effective as of October 1, 2022.

in Internal Control Over Financial Reporting

Chief Financial Officer, concluded that our disclosure controls and procedures were not effective as of September 30, 2023.

Material Weakness in Internal Control Over Financial

A material weakness is a deficiency,

or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material

misstatement of our interim or annual financial statements will not be prevented or detected on a timely basis.

During the course of our independent

registered public accounting firm performing its quarterly review procedures in connection with our unaudited condensed consolidated financial

statements to be included in our Form 10-Q for the first quarter of our 2023 fiscal year, we became aware of certain errors made by management

in recording certain transactions and in performing debt covenant calculations.

As a result of these errors we concluded that we did not

have a sufficient complement of trained and knowledgeable accounting personnel to prevent and detect errors on a timely basis and that

this deficiency constitutes a material weakness in our internal control over financial reporting as of September 30, 2023.

During our fiscal year 2023, we

began the process of addressing this material weakness by engaging qualified accounting consultants who have been brought on to enhance,

and continue to enhance, our internal controls over financial reporting.

These individuals are licensed CPA’s with appropriate levels

of knowledge and experience in public accounting.

Subsequent to the end of our fiscal year 2023, the Company has begun to staff the newly

formed Financial Reporting Division of our Accounting Department.

This Department is headed by a Financial Reporting Manager who reports

directly to the CFO.

This individual is a qualified CPA with experience in financial reporting and the restaurant industry.

also hired a Senior Accountant to report under this Financial Reporting Manager and has been enlisted with the preparation of various

schedules and entries.

We will continue our efforts in our fiscal year 2024 of improving our accounting and finance related processes.

Changes in Internal Control Over Financial Reporting

During the period covered by this

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to materially affect, our internal control over financial reporting.

Assessment on Internal Control over Financial Reporting

Management’s Assessment on Internal Control

over Financial Reporting

Our management is responsible

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Based on that evaluation, our Chief Executive Officer and Chief Financial Officer

have concluded that as of October 1, 2022, our internal control over financial reporting was effective.

on the Effectiveness of Controls and Permitted Omission from Management’s Assessment

have concluded that as of September 30, 2023, our internal control over financial reporting was not effective.

Limitations on the Effectiveness of Controls

and Permitted Omission from Management’s Assessment

Our internal control over financial

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changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

This annual report does not include

an attestation report of our independent registered public accounting firm regarding internal control over financial reporting.

report was not subject to attestation by our independent registered public accounting firm pursuant to rules of the SEC that permit us

to provide only management’s report in this Annual Report on Form 10-K.

This annual report does not include an attestation

report of our independent registered public accounting firm regarding internal control over financial reporting.

Management’s report

was not subject to attestation by our independent registered public accounting firm pursuant to rules of the SEC that permit us to provide

only management’s report in this Annual Report on Form 10-K.

OTHER INFORMATION.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.

information required by Item 10 (Directors, Executive Officers and Corporate Governance), Item 11 (Executive Compensation), Item 12 (

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters), Item 13 (Certain Relationships and Related

Transactions, and Director Independence), and Item 14 (Principal Accountant Fees and Services) is incorporated by reference to our Proxy

Statement for our 2023 Annual Meeting of Shareholders, which will be filed with the Securities and Exchange Commission no later than 120

days from the end of our 2022 fiscal year.

The information under the heading “Executive Officers” in Part I of this Form 10-K

is also incorporated herein by reference.

The information required by Item

10 (Directors, Executive Officers and Corporate Governance), Item 11 (Executive Compensation), Item 12 ( Security Ownership of Certain

Beneficial Owners and Management and Related Stockholder Matters), Item 13 (Certain Relationships and Related Transactions, and Director

Independence), and Item 14 (Principal Accountant Fees and Services) is incorporated by reference to our Proxy Statement for our 2024 Annual

Meeting of Shareholders, which will be filed with the Securities and Exchange Commission no later than 120 days from the end of our 2023

The information under the heading “Executive Officers” in Part I of this Form 10-K is also incorporated herein

by reference.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES .

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(a)(2) Financial Statement Schedules

schedules have been omitted because the required information is not applicable or the information is included in the consolidated financial

statements or the Notes thereto.

All other schedules have

been omitted because the required information is not applicable or the information is included in the consolidated financial statements

or the Notes thereto.

(a)(3) Exhibits

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Exhibit Description

Plan of Reorganization, Amended Disclosure

Statement, Amended Plan of Reorganization, Modification of Amended Plan of Reorganization, Second Modification of Amended Plan of Reorganization,

Order Confirming Plan of Reorganization

Restated Articles of Incorporation, adopted

January 9, 1984

Plan of Reorganization, Amended Disclosure Statement, Amended Plan of Reorganization, Modification of Amended Plan of Reorganization, Second Modification of Amended Plan of Reorganization, Order Confirming Plan of Reorganization

Restated Articles of Incorporation, adopted January 9, 1984

Employment Agreement with Joseph G.

Form of Employment Agreement between

Form of Employment Agreement between Joseph G.

Flanigan and the Company (as ratified and amended by the stockholders at the 1988 annual meeting is incorporated herein by reference).*

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Management Agreement for Atlanta, Georgia, (#600)*

Settlement Agreement with Former Vice Chairman of the

Board of Directors (re #5)

Hardware Purchase Agreement and Software License Agreement

for restaurant point of sale system.

Settlement Agreement with Former Vice Chairman of the Board of Directors (re #5)

Hardware Purchase Agreement and Software License Agreement for restaurant point of sale system.

Key Employee Incentive Stock Option Plan

Partnership Agreement of CIC Investors #13, Ltd,.

between Flanigan's Enterprises, Inc., as General Partner and fifty percent owner of

the limited partnership, and Hotel Properties, LTD.

of Franchise Agreement between Flanigan's Enterprises, Inc.

Limited Partnership Agreement of CIC Investors #13, Ltd,.

between Flanigan's Enterprises, Inc., as General Partner and fifty percent owner of the limited partnership, and Hotel Properties, LTD.

Form of Franchise Agreement between Flanigan's Enterprises, Inc.

and Franchisees.

Agreement between Flanigan's Enterprises, Inc.

Flanigan, dated November 4, 1996, for non-exclusive use of the service mark

"Flanigan's" in the Commonwealth of Pennsylvania.

Limited Partnership Agreement of CIC Investors #15 Ltd., dated March 28, 1997, between B.D.

as General Partner and numerous limited

partners, including Flanigan's Enterprises, Inc.

Licensing Agreement between Flanigan's Enterprises, Inc.

Flanigan, dated November 4, 1996, for non-exclusive use of the service mark "Flanigan's" in the Commonwealth of Pennsylvania.

Partnership Agreement of CIC Investors #15 Ltd., dated March 28, 1997, between B.D.

as General Partner and numerous limited partners,

including Flanigan's Enterprises, Inc.

as a limited partner owning twenty five percent of the limited partnership.

Partnership Agreement of CIC Investors #60 Ltd., dated July 8, 1997, between Flanigan's Enterprises, Inc., as General Partner and numerous

limited partners, including Flanigan's Enterprises, Inc.

Limited Partnership Agreement of CIC Investors #60 Ltd., dated July 8, 1997, between Flanigan's Enterprises, Inc., as General Partner and numerous limited partners, including Flanigan's Enterprises, Inc.

as limited partner owning forty percent of the limited partnership.

Agreed Order of Dismissal upon Mediation with former franchisee.

Partnership Agreement of CIC Investors #70, Ltd.

Stipulated Agreed Order of Dismissal upon Mediation with former franchisee.

Limited Partnership Agreement of CIC Investors #70, Ltd.

dated February 1999 between Flanigan's Enterprises, Inc.

as General Partner and numerous

limited partners, including Flanigan's Enterprises, Inc.

as General Partner and numerous limited partners, including Flanigan's Enterprises, Inc.

as limited partner owning forty percent of the limited partnership.

Partnership Agreement of CIC Investors #80, Ltd., dated May 2001, between Flanigan's Enterprises, Inc.

as General Partner and numerous

limited partners, including Flanigan's Enterprises, Inc., as limited partner owning twenty five percent of the limited partnership.

Partnership Agreement of CIC Investors #95, Ltd., dated July 2001, between Flanigan's Enterprises, Inc., as General Partner and numerous

limited partners, including Flanigan's Enterprises, Inc.

Limited Partnership Agreement of CIC Investors #80, Ltd., dated May 2001, between Flanigan's Enterprises, Inc.

as General Partner and numerous limited partners, including Flanigan's Enterprises, Inc., as limited partner owning twenty five percent of the limited partnership.

Limited Partnership Agreement of CIC Investors #95, Ltd., dated July 2001, between Flanigan's Enterprises, Inc., as General Partner and numerous limited partners, including Flanigan's Enterprises, Inc.

as limited partner owning twenty eight percent of the limited partnership.

Limited Partnership Agreement of

CIC Investors #65, Ltd., dated June 24, 2004, between Flanigan’s Enterprises, Inc., as General Partner, and numerous limited partners,

including Flanigan’s Enterprises, Inc.

Limited Partnership Agreement of CIC Investors #65, Ltd., dated June 24, 2004, between Flanigan’s Enterprises, Inc., as General Partner, and numerous limited partners, including Flanigan’s Enterprises, Inc.

as limited partner owning twenty six percent of the limited partnership.

and Restated Limited Partnership Certificate and Agreement of CIC Investors #13, Ltd., dated March 1, 2006, between Flanigan’s Enterprises,

Inc., as General Partner, Flanigan’s Management Services, Inc.

and numerous limited partners, including Flanigan’s Enterprises,

Amended and Restated Limited Partnership Certificate and Agreement of CIC Investors #13, Ltd., dated March 1, 2006, between Flanigan’s Enterprises, Inc., as General Partner, Flanigan’s Management Services, Inc.

and numerous limited partners, including Flanigan’s Enterprises, Inc.

as limited partner owning thirty nine percent of the limited partnership.

Partnership Agreement of CIC Investors #50, Ltd., dated October 17, 2006, between Flanigan’s Enterprises, Inc., as General Partner,

Flanigan’s Management Services, Inc.

Limited Partnership Agreement of CIC Investors #50, Ltd., dated October 17, 2006, between Flanigan’s Enterprises, Inc., as General Partner, Flanigan’s Management Services, Inc.

and numerous limited partners, including Flanigan’s Enterprises, Inc.

as limited partner

owning sixteen percent of the limited partnership.

Partnership Agreement of CIC Investors #55, Ltd., dated December 12, 2006, between Flanigan’s Enterprises, Inc., as General Partner,

Flanigan’s Management Services, Inc.

as limited partner owning sixteen percent of the limited partnership.

Limited Partnership Agreement of CIC Investors #55, Ltd., dated December 12, 2006, between Flanigan’s Enterprises, Inc., as General Partner, Flanigan’s Management Services, Inc.

and numerous limited partners, including Flanigan’s Enterprises, Inc.

as limited partner

owning forty eight percent of the limited partnership.

Partnership Agreement of CIC Investors #90, Ltd., dated January 18, 2012, between Flanigan’s Enterprises, Inc., as General Partner,

Flanigan’s Management Services, Inc.

as limited partner owning forty eight percent of the limited partnership.

Limited Partnership Agreement of CIC Investors #90, Ltd., dated January 18, 2012, between Flanigan’s Enterprises, Inc., as General Partner, Flanigan’s Management Services, Inc.

and numerous limited partners, including Flanigan’s Enterprises, Inc.

as limited partner

owning five percent of the limited partnership.

Limited Partnership Agreement of CIC Investors #85, Ltd., dated

April 4, 2019, between Flanigan’s Enterprises, Inc., as General Partner, Flanigan’s Management Services, Inc.

limited partners, including Flanigan’s Enterprises, Inc.

as limited partner owning five percent of the limited partnership.

Limited Partnership Agreement of CIC Investors #85, Ltd., dated April 4, 2019, between Flanigan’s Enterprises, Inc., as General Partner, Flanigan’s Management Services, Inc.

and numerous limited partners, including Flanigan’s Enterprises, Inc.

as limited partner owning seven percent of the limited partnership.

Limited Partnership Agreement of CIC Investors #25, Ltd., dated

September 21, 2021, between Flanigan’s Enterprises, Inc., as General Partner, Flanigan’s Management Services, Inc.

limited partners, excluding Flanigan’s Enterprises, Inc.

Registrant's Form 10-K constitutes the Annual Report to Shareholders for the fiscal

year ended October 2, 2022.

Company's subsidiaries are set forth

in this Annual Report on Form 10-K.

Certification

Pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended of Chief Executive Officer .

Certification

Pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended of Chief Financial Officer.

Certification

Pursuant to 18 U.S.C.

Limited Partnership Agreement of CIC Investors #25, Ltd., dated September 21, 2021, between Flanigan’s Enterprises, Inc., as General Partner, Flanigan’s Management Services, Inc.

and numerous limited partners, excluding Flanigan’s Enterprises, Inc.

Registrant's Form 10-K constitutes the Annual Report to Shareholders for the fiscal year ended September 30, 2023.

Company's subsidiaries are set forth in this Annual Report on Form 10-K.

Certification Pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended of Chief Executive Officer.

Certification Pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended of Chief Financial Officer .

Certification Pursuant to 18 U.S.C.

Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Chief Executive Officer.

Certification

Pursuant to 18 U.S.C.

Certification Pursuant to 18 U.S.C.

Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Chief Financial Officer.

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Christopher J.

Flanigan’s Enterprises, Inc.

Enterprises, Inc.

and Subsidiaries

CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER 1, 2022 AND OCTOBER 2, 2021

Flanigan’s Enterprises, Inc.

SEPTEMBER 30, 2023 AND OCTOBER 1, 2022

Enterprises, Inc.

and Subsidiaries

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

(PCAOB ID 688 )

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB ID 688 ) F-1

CONSOLIDATED FINANCIAL STATEMENTS

Balance Sheets

Statements of Income

Statements of Stockholders’ Equity

Statements of Cash Flows

Notes to Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Balance Sheets F-2 – F-3

Statements of Income F-4

Statements of Comprehensive Income F-5

Statements of Stockholders’ Equity F-6

Statements of Cash Flows F-7 – F-8

Notes to Consolidated Financial Statements F-9 – F-30

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

To the Stockholders and Board of Directors of

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Opinion on the Financial Statements

have audited the accompanying consolidated balance sheets of Flanigan’s Enterprises, Inc.

(the “Company”) as of

October 1, 2022, and October 2, 2021, the related consolidated statements of income, stockholders’ equity and cash flows for

each of the two years in the period ended October 1, 2022, and the related notes (collectively referred to as the “financial

statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of

the Company as of October 1, 2022 and October 2, 2021, and the results of its operations and cash flows for each of the two years in

the period ended October 1, 2022, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying consolidated balance

sheets of Flanigan’s Enterprises, Inc.

and subsidiaries (the “Company”) as of September 30, 2023 and October 1, 2022,

the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for each of the two years

in the period ended September 30, 2023, and the related notes (collectively referred to as the “financial statements”).

our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of September

30, 2023 and October 1, 2022, and the results of its operations and its cash flows for each of the two years in the period ended September

30, 2023, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

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

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

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

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

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

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

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

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

These financial statements are the responsibility

of the Company’s management.

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

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”)

and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable

rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards

of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements

are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform,

an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding of internal

control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal

control over financial reporting.

Accordingly, we express no such opinion.

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

Our audits included performing procedures to assess

the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond

to those risks.

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

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

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating

the overall presentation of the financial statements.

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

Critical Audit Matters

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

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

Critical audit matters are matters arising

from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging,

subjective, or complex judgments.

We determined that there are no critical audit matters.

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We have served as the Company’s auditor since 1999.

West Palm Beach, FL

January 17, 2023

Flanigan’s Enterprises, Inc.

Fort Lauderdale, FL

December 29, 2023

Enterprises, Inc.

and Subsidiaries

CONSOLIDATED BALANCE SHEETS

OCTOBER 1, 2022 AND OCTOBER 2, 2021

(rounded to the nearest thousandth, except share and per share amounts)

SEPTEMBER 30, 2023 AND OCTOBER 1, 2022

(in thousands, except share and per share amounts)

Current Assets:

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Construction in Progress

Right-of-Use Asset, Operating Leases

Right-of-use assets, operating leases

Investment in Limited Partnerships

1 unchanged sentence

Liquor licenses

Leasehold interests, net

Deposits on property and equipment

Leasehold interests, net

Total other assets

LIABILITIES AND EQUITY

See notes to consolidated financial

Enterprises, Inc.

and Subsidiaries

CONSOLIDATED BALANCE SHEETS

SEPTEMBER 30, 2023 AND OCTOBER 1, 2022

(in thousands, except share and per share amounts)

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities:

3 unchanged sentences

Current portion of long term debt

Operating lease liability, current

Operating lease liabilities, current

Deferred revenue

1 unchanged sentence

Long Term Debt, Net of Current Portion

Operating lease liability, non current

Deferred tax liabilities, net

Operating lease liabilities, non-current

Deferred tax liabilities

Total liabilities

Commitments and Contingencies

Stockholder’s Equity:

Flanigan’s Enterprises, Inc.

Stockholders’ Equity

Common stock, $ .10 par value;

5,000,000 shares authorized;

Common stock, $ .10 par value, 5,000,000 shares authorized;

4,197,642 shares issued;

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Retained earnings

Treasury stock, at cost, 2,338,995 shares for the years ended 2022 and 2021

Accumulated other comprehensive income

Treasury stock, at cost, 2,338,995 shares

Total Flanigan’s Enterprises, Inc.

1 unchanged sentence

Noncontrolling interests

Total liabilities and equity

Total stockholders' equity

Total liabilities and stockholders' equity

See notes to consolidated financial statements.

Flanigan’s Enterprises, Inc.

Enterprises, Inc.

and Subsidiaries

CONSOLIDATED STATEMENTS OF INCOME

Years Ended October 1, 2022 and October 2, 2021

(rounded to the nearest thousandth, except share and per share amounts)

Years Ended September 30, 2023 and October 1,

(in thousands, except share and per share amounts)

Restaurant food sales

2 unchanged sentences

Franchise related revenues

Other operating income

Rental income

Other operating income

Costs and Expenses:

Cost of merchandise sold:

Restaurants and lounges

Restaurant and lounges

Package goods

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Interest and other income

Gain on forgiveness of debt

Gain on forgiveness of PPP loans

Gain on sale of property and equipment

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Basic and Diluted

Weighted Average Shares and Equivalent Shares Outstanding:

Weighted Average Shares and Equivalent

Shares Outstanding

Basic and Diluted

See notes to consolidated financial statements.

Flanigan’s Enterprises, Inc.

Enterprises, Inc.

and Subsidiaries

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Years Ended September 30, 2023 and October 1,

(in thousands)

Other comprehensive income:

Change in fair value of interest rate swap

Total Comprehensive Income

See notes to consolidated financial statements.

Enterprises, Inc.

and Subsidiaries

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

YEARS ENDED OCTOBER 1, 2022 AND OCTOBER 2, 2021

(rounded to nearest thousandth, except share amounts)

YEARS ENDED SEPTEMBER 30, 2023 AND OCTOBER 1,

(in thousands, except share amounts)

Treasury Stock

1 unchanged sentence

Balance, October 1, 2022

Other Comprehensive Income

Distributions to noncontrolling interests

Sale of minority interest

Dividends paid

Balance, October 1, 2022

Balance, September 30, 2023

Treasury Stock

Noncontrolling

Balance, October 1, 2021

Distributions to noncontrolling interests

Sale of minority interest

Dividends paid

Balance, October 1, 2022

See notes to consolidated financial statements.

Flanigan’s Enterprises, Inc.

Enterprises, Inc.

and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED OCTOBER 1, 2022 AND OCTOBER 2, 2021

(rounded to nearest thousandth)

YEARS ENDED SEPTEMBER 30, 2023 AND OCTOBER 1,

(in thousands)

Cash Flows from Operating Activities:

2 unchanged sentences

Amortization of leasehold interests

Amortization of finance lease right-of-use asset

Amortization of operating lease right-of-use asset

Amortization of operating lease right-of-use assets

Gain on forgiveness of PPP Loans

Non-cash interest expense

Gain on sale of property and equipment

2 unchanged sentences

Deferred income taxes

Income from unconsolidated limited partnership

Loss from unconsolidated limited partnership

Changes in operating assets and liabilities:

(Increase) decrease in:

Prepaid income taxes

Other receivables

Prepaid income taxes

Prepaid expenses

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Purchase of construction in progress

Deposit on property and equipment

Deposits on property and equipment

Purchase of liquor license

Proceeds from sale of fixed assets

Distributions from unconsolidated limited partnership

Proceeds from sale of property and equipment

Business acquisition

Investment in limited partnership

Distributions from unconsolidated limited partnership

Net cash and cash equivalents used in investing activities

Enterprises, Inc.

and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED SEPTEMBER 30, 2023 AND OCTOBER 1,

(in thousands)

Cash Flows from Financing Activities:

Payments of long-term debt

Payments on long term debt

Deferred loan costs

Proceeds from long-term debt

Proceeds from PPP loans

Principal payments on finance leases

Proceeds from noncontrolling interest offering

Dividends paid

Distributions to noncontrolling interests

Proceeds from minority interest offering

Net cash and cash equivalents provided by financing activities

Net Increase in Cash and Cash Equivalents

Cash and Cash Equivalents, Beginning

Cash and Cash Equivalents, Ending

See notes to consolidated financial statements.

Flanigan’s Enterprises, Inc.

and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED OCTOBER 1, 2022 AND OCTOBER 2, 2021

(rounded to nearest thousandth)

Supplemental Disclosure of Cash Flow Information:

Distributions to limited partnerships’ noncontrolling interests

Net cash and cash equivalents (used in) provided by financing activities

Net (Decrease) Increase in Cash and Cash Equivalents

Cash and Cash Equivalents - Beginning of Period

Cash and Cash Equivalents - End of Period

Supplemental Disclosure for Cash Flow Information:

Cash paid during the year for:

Supplemental Disclosure for Non-Cash Investing and Financing Activities:

Supplemental Disclosure of Non-Cash Investing and Financing Activities:

Financing of insurance contracts

Purchase deposits transferred to property and equipment

Change in fair value of interest rate swap

Purchase deposits capitalized to property and equipment

Purchase deposits transferred to construction in progress

2 unchanged sentences

Operating lease liabilities arising from right-of-use assets

Purchase of vehicle in exchange for debt

Purchase of property in exchange for debt

See notes to consolidated financial statements.

Flanigan’s Enterprises, Inc.

Enterprises, Inc.

and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED OCTOBER 1, 2022 AND OCTOBER 2, 2021

YEARS ENDED SEPTEMBER 30, 2023 AND OCTOBER 1, 2022

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Capitalization

The Company was incorporated in 1959 and operates in South Florida as a chain of full-service restaurants and package liquor stores.

Restaurant food and beverage sales make up the majority of our total revenue.

As of October 1, 2022, we (i) operated 30 units consisting of restaurants, package liquor stores and combination restaurants/package liquor stores that we either own or have operational control over and partial ownership in;

and (ii) franchise an additional five units, consisting of two restaurants, ( one of which we operate) and three combination restaurants/package liquor stores.

With the exception of one restaurant we operate under the name “The Whale’s Rib”, a restaurant in which we do not have an ownership interest, and “Brendan’s Sports Pub”, a restaurant/bar we own, all of the restaurants operate under our service marks “Flanigan’s Seafood Bar and Grill” or “Flanigan’s” and all of the package liquor stores operate under our service marks “Big Daddy’s Liquors” or “Big Daddy’s Wine & Liquors”.

The Company’s Articles of Incorporation, as amended, authorize us to issue and have outstanding at any one time 5,000,000 shares of common stock at a par value of $ 0.10 per share.

We operate under a 52-53 week year ending the Saturday closest to September 30.

The Company was incorporated in 1959 and operates

in South Florida as a chain of full-service restaurants and package liquor stores.

Restaurant food and beverage sales make up the majority

of our total revenue.

As of September 30, 2023, we (i) operated 31 units consisting of restaurants, package liquor stores and combination

restaurants/package liquor stores that we either own or have operational control over and partial ownership in;

and (ii) franchise an

additional five units, consisting of two restaurants, (one of which we operate) and three combination restaurants/package liquor stores.

With the exception of one restaurant we operate under the name “The Whale’s Rib”, a restaurant in which we do not have

an ownership interest, and “Brendan’s Sports Pub”, a restaurant/bar we own, all of the restaurants operate under our

service marks “Flanigan’s Seafood Bar and Grill” or “Flanigan’s” and all of the package liquor stores

operate under our service marks “Big Daddy’s Liquors” or “Big Daddy’s Wine & Liquors”.

The Company’s Articles of Incorporation,

as amended, authorize us to issue and have outstanding at any one time 5,000,000 shares of common stock at a par value of $ 0.10 per share.

We operate under a 52-53 week year ending the

Saturday closest to September 30.

Our fiscal years 2023 and 2022 are each comprised of a 52-week period.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and our subsidiaries, all of which are wholly owned, and the accounts of the ten limited partnerships in which we act as general partner and have controlling interests.

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

Noncontrolling interests in consolidated subsidiaries are included in the consolidated balance sheets as a separate component of equity.

We report consolidated net income inclusive of both the Company’s and the noncontrolling interests’ share, as well as amounts of consolidated net income (loss) attributable to each of the Company and the noncontrolling interests.

We use the consolidation method of accounting when we have a controlling interest in other companies and limited partnerships.

We use the equity method of accounting when we have significant influence and an interest between twenty to fifty percent in other companies and limited partnerships, but do not exercise control.

Under the equity method, our original investments are recorded at cost and are adjusted for our share of undistributed earnings or losses.

All intercompany profits are eliminated.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

The consolidated financial statements include

the accounts of the Company and our subsidiaries, all of which are wholly owned, and the accounts of the ten limited partnerships in which

we act as general partner and have controlling interests.

All significant intercompany transactions and balances have been eliminated

in consolidation.

Noncontrolling interests in consolidated subsidiaries

are included in the consolidated balance sheets as a separate component of equity.

We report consolidated net income inclusive of both

the Company’s and the noncontrolling interests’ share, as well as amounts of consolidated net income (loss) attributable to

each of the Company and the noncontrolling interests.

We use the consolidation method of accounting

when we have a controlling interest in other companies and limited partnerships.

We use the equity method of accounting when we have significant

influence and an interest between twenty to fifty percent in other companies and limited partnerships, but do not exercise control.

the equity method, our original investments are recorded at cost and are adjusted for our share of undistributed earnings or losses.

intercompany profits are eliminated.

Use of Estimates

The consolidated financial statements and related disclosures are prepared in conformity with accounting principles generally accepted in the United States.

We are required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and revenue and expenses during the period reported.

These estimates include assessing the estimated useful lives of tangible assets, the recognition of deferred tax assets and liabilities and estimates relating to the calculation of incremental borrowing rates and length of leases associated with right-of-use assets and corresponding liabilities, and estimates relating to loyalty reward programs.

Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in our consolidated financial statements in the period they are determined to be necessary.

Although these estimates are based on our knowledge of current events and actions we may undertake in the future, they may ultimately differ from actual results.

The consolidated financial statements and related

disclosures are prepared in conformity with accounting principles generally accepted in the United States.

We are required to make estimates

and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the

date of the financial statements, and revenue and expenses during the periods reported.

These estimates include assessing the estimated

useful lives of tangible assets, the recognition of deferred tax assets and liabilities and estimates relating to the calculation of incremental

borrowing rates and length of leases associated with right-of-use assets and corresponding liabilities, and estimates relating to loyalty

reward programs.

Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in our consolidated financial

statements in the period they are determined to be necessary.

Although these estimates are based on our knowledge of current events and

actions we may undertake in the future, they may ultimately differ from actual results.

Cash and Cash Equivalents

We consider all highly liquid investments with an original maturity of three months or less at the date of purchase and receivables from our credit card merchants to be cash equivalents.

We maintain deposit balances with financial institutions, which balances may from time to time, exceed the federally insured limits which are $ 250,000 for interest and non-interest bearing accounts.

We consider all highly liquid investments with

an original maturity of three months or less at the date of purchase and receivables from our credit card merchants to be cash equivalents.

We maintain deposit balances with financial

institutions, which balances may from time to time, exceed the federally insured limits which are $ 250,000 for interest and non-interest

bearing accounts.

We have not experienced any losses on such accounts.

Our inventories, which consist primarily of package liquor products, are stated at the lower of average cost or net realizable value.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Our inventories, which consist primarily of

package liquor products, are stated at the lower of average cost or net realizable value.

Liquor Licenses

In accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 350, “ Intangibles - Goodwill and Other ”, our liquor licenses are indefinite lived assets, which are not being amortized, but are tested annually for impairment (see Note 11).

In accordance with the Financial Accounting

Standards Board (FASB) Accounting Standards Codification (ASC) Topic 350, “ Intangibles - Goodwill and Other ”,

our liquor licenses are indefinite lived assets, which are not being amortized, but are tested annually for impairment (see Note 11).

Property and Equipment

Our property and equipment are stated at cost less accumulated depreciation and amortization.

We capitalize expenditures for major improvements and depreciation commences when the assets are placed in service.

Our property and equipment are stated at cost

less accumulated depreciation and amortization.

We capitalize expenditures for major improvements and depreciation commences when the

assets are placed in service.

We record depreciation on a straight-line basis over the estimated useful lives of the respective assets.

We charge maintenance and repairs, which do not improve or extend the life of the respective assets, to expense as incurred.

When we dispose of assets, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in income.

Our estimated useful lives range from three to five years for vehicles and three to seven years for furniture and equipment.

Leasehold improvements are currently being amortized over the shorter of the life of the lease or the life of the asset up to a maximum of 15 years.

Our buildings of our corporate offices in Fort Lauderdale, Florida;

When we dispose

of assets, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in income.

Our estimated useful lives range from three

to five years for vehicles and three to seven years for furniture and equipment.

Leasehold improvements are currently being amortized

over the shorter of the life of the lease or the life of the asset up to a maximum of 15 years.

Our buildings of our corporate offices

in Fort Lauderdale, Florida;

our construction office/warehouse in Fort Lauderdale, Florida;

our combination restaurant and package liquor stores in Hallandale, Florida and North Lauderdale, Florida;

our combination restaurant and package liquor

stores in Hallandale, Florida and North Lauderdale, Florida;

our restaurants in N.

Miami and Fort Lauderdale, Florida;

our property in Sunrise, Florida which we lease to a limited partnership (Store #85), our property in Fort Lauderdale, Florida which we lease to a franchisee (Store #15), our package store in N.

Miami, Florida, and our shopping center in Miami, Florida, all of which we own, are being depreciated over forty years .

our property in

Sunrise, Florida which we lease to a limited partnership (Store #85), our property in Fort Lauderdale, Florida which we lease to a franchisee

(Store #15), our package stores in N.

Miami, Florida and El Portal, Florida and our shopping centers in Miami, Florida and Hallandale

Beach, Florida all of which we own, are being depreciated over forty years .

Building improvements are being depreciated over 20 years.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Leasehold Interests

Our purchase of an existing restaurant location usually includes a lease to the business premises.

Our purchase of an existing restaurant location

usually includes a lease to the business premises.

As a result, a portion of the purchase price is allocated to the leasehold interest.

We capitalize the cost of the leasehold interest and amortization commences upon our assumption of the lease.

We amortize leasehold interests on a straight-line basis over the remaining term of the lease.

We amortize leasehold interests

on a straight-line basis over the remaining term of the lease.

Concentrations of Credit Risk

Financial instruments that potentially subject us to concentrations of credit risk are cash and cash equivalents.

Financial instruments that potentially subject

us to concentrations of credit risk are cash and cash equivalents.

Major Suppliers

Throughout our fiscal years 2022 and 2021, we purchased a significant portion of our food products from one major supplier.

This major supplier represents 42 % and 41 % of our cost of goods sold and 22 % and 24 % of our accounts payable and accrued expenses as of October 1, 2022 and October 2, 2021, respectively.

Throughout our fiscal years 2023 and 2022,

we purchased a significant portion of our food products from one major supplier.

This major supplier represents 42 % and 42 % of our cost

of goods sold and 29 % and 22 % of our accounts payable and accrued expenses as of September 30, 2023 and October 1, 2022, respectively.

We believe that several other alternative vendors are available, if necessary.

Throughout our fiscal years 2022 and 2021, we purchased the majority of our alcoholic beverages from three local distributors.

One of these three local distributors represents 23 % and 26 % of our cost of goods sold for the years ended October 1, 2022 and October 2, 2021, respectively and 2 % of our accounts payable and accrued expenses as of both October 1, 2022 and October 2, 2021.

Each distributor has exclusive rights from the manufacturers to sell specific brands in given areas, so unless the exclusive distribution rights are transferred to another vendor, there are no alternate distributors available.

Throughout our fiscal years 2023 and 2022,

we purchased the majority of our alcoholic beverages from three local distributors.

One of these three local distributors represents 24 %

and 23 % of our cost of goods sold for the years ended September 30, 2023 and October 1, 2022, respectively and 5 % and 2 % of our accounts

payable and accrued expenses as of September 30, 2023 and October 1, 2022, respectively.

Each distributor has exclusive rights from the

manufacturers to sell specific brands in given areas, so unless the exclusive distribution rights are transferred to another vendor, there

are no alternate distributors available.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Revenue Recognition

Revenue-related to food, bar and package sales are recorded at the point of sale.

Royalty-related revenues, which are 1 % of package sales and 3 % of restaurant sales, are recorded as income on a weekly basis, in arrears.

Revenue-related to food, bar and package sales

are recorded at the point of sale.

Royalty-related revenues, which are 1 % of package sales and 3 % of restaurant sales, are recorded as

income on a weekly basis, in arrears.

We report our revenues net of sales tax.

Our Big Daddy’s Good Customer Loyalty Program awards customers with a $ 20 Good Customer Gift Card, (“Gift Card”) to be used at our Flanigan’s Seafood Bar and Grill restaurants for every ten (10) purchases of at least $25 made by such customer at our Big Daddy’s Liquors package liquor stores.

Pursuant to ASC 606, we recognize deferred revenue in the amount of the Gift Card upon the issuance of the Gift Card and reduce package liquor store revenue by a like amount.

We recognize revenue when the Gift Card is redeemed in our restaurants or when it expires unused.

Our Big Daddy’s Good Customer Loyalty

Program awards customers with a $ 20 Good Customer Gift Card, (“Gift Card”) to be used at our Flanigan’s Seafood Bar

and Grill restaurants for every ten (10) purchases of at least $25 made by such customer at our Big Daddy’s Liquors package liquor

Pursuant to ASC 606, we recognize deferred revenue in the amount of the Gift Card upon the issuance of the Gift Card and reduce

package liquor store revenue by a like amount.

We recognize revenue when the Gift Card is redeemed in our restaurants or when it expires

Gift cards have various expiration dates based upon each program, while gift cards purchased for cash have no expiration dates.

Pre-opening Costs

As new restaurants open, our income from operations will be adversely affected due to our obligation to fund pre-opening costs.

Pre-opening costs are those typically associated with the opening of a new restaurant and generally include payroll costs associated with the new restaurant opening, rent and promotional costs.

We expense pre-opening costs as incurred and during our fiscal year ended October 1, 2022 we expensed $ 65,000 for CIC Investors #25, Ltd, and $ 388,000 for CIC Investors #85, Ltd

As new restaurants open, our income from operations

will be adversely affected due to our obligation to fund pre-opening costs.

Pre-opening costs are those typically associated with the

opening of a new restaurant and generally include payroll costs associated with the new restaurant opening, rent and promotional costs.

We expense pre-opening costs as incurred and during our fiscal year ended September 30, 2023 we expensed $ 188,000 for CIC Investors #25.

During our fiscal year ended October 1, 2022 we expensed $ 65,000 for CIC Investors #25, Ltd, and $ 388,000 for CIC Investors #85, Ltd.

Advertising Costs

Our advertising costs are expensed as incurred.

Advertising costs incurred during our fiscal years ended October 1, 2022 and October 2, 2021 were approximately $ 209,000 and $ 218,000 , respectively.

Advertising costs incurred during our fiscal years ended September 30, 2023 and October 1, 2022 were approximately $ 253,000 and $ 209,000 ,

respectively.

General Liability Insurance

We have general liability insurance which incorporates a deductible of $ 10,000 per occurrence for both us and the limited partnerships.

Our insurance carrier is responsible for $ 1,000,000 coverage per occurrence above our deductible, up to a maximum aggregate of $ 2,000,000 per year.

During our fiscal year ended October 1, 2022, we were able to purchase excess liability insurance, whereby our excess insurance carrier is responsible for $ 10,000,000 coverage above our primary general liability insurance coverage.

We are un-insured against liability claims in excess of $ 11,000,000 per occurrence and in the aggregate (See Note 20.

Subsequent Events for a discussion of general liability and excess liability insurance for the period commencing December 30, 2022)

Our general policy is to settle only those legitimate and reasonable claims asserted and to aggressively defend and go to trial, if necessary, on frivolous and unreasonable claims.

Under our current liability insurance policy, any expense incurred by us in defending a claim, including attorney's fees, are a part of our $ 10,000 deductible.

We have general liability insurance which incorporates

a deductible of $ 10,000 per occurrence for both us and the limited partnerships.

During the fourth quarter of our fiscal year 2023, we

converted the deductible of $ 10,000 per occurrence for both us and the limited partnerships to $ 10,000 self-insured retention per occurrence.

Our insurance carrier is responsible for $ 1,000,000 coverage per occurrence above our deductible, up to a maximum aggregate of $ 2,000,000

During our fiscal year ended September 30, 2023, we were able to purchase excess liability insurance, whereby our excess insurance

carrier is responsible for $ 10,000,000 coverage above our primary general liability insurance coverage.

We are un-insured against liability

claims in excess of $ 11,000,000 per occurrence and in the aggregate.

Our general policy is to settle only those

legitimate and reasonable claims asserted and to aggressively defend and go to trial, if necessary, on frivolous and unreasonable claims.

Under our current liability insurance policy, any expense incurred by us in defending a claim, including attorney's fees, are a part of

our $ 10,000 deductible, and/or self-insured retention.

Fair Value of Financial Instruments

The respective carrying value of certain of our on-balance-sheet financial instruments approximated their fair value.

These instruments include cash and cash equivalents, other receivables, accounts payables, accrued expenses and debt.

We have assumed carrying values to approximate fair values for those financial instruments, which are short-term in nature or are receivable or payable on demand.

We estimated the fair value of debt based on current rates offered to us for debt of comparable maturities and similar collateral requirements.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Fair Value of Financial Instruments (Continued)

In accordance with FASB ASC Topic 820-10-50-1, we utilized a valuation model to determine the fair value of our swap agreements.

As the valuation models for the swap agreements were based upon observable inputs, they are classified as Level 2 (see Note 15).

The respective carrying value of certain of

our on-balance-sheet financial instruments approximated their fair value.

These instruments include cash and cash equivalents, other receivables,

accounts payables, accrued expenses and debt.

We have assumed carrying values to approximate fair values for those financial instruments,

which are short-term in nature or are receivable or payable on demand.

We estimated the fair value of debt based on current rates offered

to us for debt of comparable maturities and similar collateral requirements.

In accordance with FASB ASC Topic 820-10-50-1,

we utilized a valuation model to determine the fair value of our swap agreement.

As the valuation models for the swap agreement were based

upon observable inputs, they are classified as Level 2 (see Note 15).

Derivative Instruments

We account for derivative instruments in accordance with FASB ASC Topic 815-10-05-4, “ Accounting for Derivative Instruments and Hedging Activities” as amended, which establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and hedging activities.

In accordance with FASB ASC Topic 815-10-05-4, derivative instruments are recognized as assets or liabilities in the Company’s consolidated balance sheets and are measured at fair value.

We do not recognize changes in fair value through earnings because we currently have two derivatives which we have designated as effective hedges (See Note 15).

We account for our income taxes using FASB ASC Topic 740, “ Income Taxes ”, which requires the recognition of deferred tax liabilities and assets for expected future tax consequences of events that have been included in the consolidated financial statements or tax returns.

Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.

We follow the provisions regarding Accounting for Uncertainty in Income Taxes, which require the recognition of a financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit.

For tax positions meeting the more likely than not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority.

We applied these changes to tax positions for our fiscal years ended October 1, 2022 and October 2, 2021.

We had no material unrecognized tax benefits and no adjustments to our financial position, results of operations or cash flows were required.

Generally, federal, state and local authorities may examine the Company’s tax returns for three years from the date of filing and the current and prior three years remain subject to examination as of October 1, 2022.

We do not expect that unrecognized tax benefits will increase within the next twelve months.

We recognize accrued interest and penalties related to uncertain tax positions as income tax expense.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

We account for derivative instruments in accordance

with FASB ASC Topic 815-10-05-4, “ Accounting for Derivative Instruments and Hedging Activities” as amended, which

establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other

contracts, and hedging activities.

In accordance with FASB ASC Topic 815-10-05-4, derivative instruments are recognized as assets or

liabilities in the Company’s consolidated balance sheets and are measured at fair value.

As of September 30, 2023 the fair value

of the swap agreement is now reflected on the balance sheet in other assets and accumulated other comprehensive income.

We determined

that the interest rate swap agreement is an effective hedging agreement and that changes in fair value will be adjusted quarterly based

on the valuation statement (see Note 15).

SUMMARY OF SIGNIFICANT ACCOUNTING

POLICIES (Continued)

We account for our income taxes using FASB

ASC Topic 740, “ Income Taxes ”, which requires the recognition of deferred tax liabilities and assets for expected future

tax consequences of events that have been included in the consolidated financial statements or tax returns.

Under this method, deferred

tax liabilities and assets are determined based on the difference between the financial statement and tax bases of assets and liabilities

using enacted tax rates in effect for the year in which the differences are expected to reverse.

We follow the provisions regarding Accounting

for Uncertainty in Income Taxes, which require the recognition of a financial statement benefit of a tax position only after determining

that the relevant tax authority would more likely than not sustain the position following an audit.

For tax positions meeting the more

likely than not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent

likelihood of being realized upon ultimate settlement with the relevant tax authority.

We applied these changes to tax positions for our

fiscal years ended September 30, 2023 and October 1, 2022.

We had no material unrecognized tax benefits and no adjustments to our financial

position, results of operations or cash flows were required.

Generally, federal, state and local authorities may examine the Company’s

tax returns for three years from the date of filing and the current and prior three years remain subject to examination as of September

Long-Lived Assets

We continually evaluate whether events and circumstances have occurred that may warrant revision of the estimated life of our intangible and other long-lived assets or whether the remaining balance of our intangible and other long-lived assets should be evaluated for possible impairment.

If and when such factors, events or circumstances indicate that intangible or other long-lived assets should be evaluated for possible impairment, we will determine the fair value of the asset by making an estimate of expected future cash flows over the remaining lives of the respective assets and compare that fair value with the carrying value of the assets in measuring their recoverability.

In determining the expected future cash flows, the assets will be grouped at the lowest level for which there are cash flows, at the individual store level.

We continually evaluate whether events and

circumstances have occurred that may warrant revision of the estimated life of our intangible and other long-lived assets or whether the

remaining balance of our intangible and other long-lived assets should be evaluated for possible impairment.

If and when such factors,

events or circumstances indicate that intangible or other long-lived assets should be evaluated for possible impairment, we will determine

the fair value of the asset by making an estimate of expected future cash flows over the remaining lives of the respective assets and

compare that fair value with the carrying value of the assets in measuring their recoverability.

In determining the expected future cash

flows, the assets will be grouped at the lowest level for which there are cash flows, at the individual store level.

Earnings Per Share

We follow FASB ASC Topic 260 - “ Earnings per Share .” This section provides for the calculation of basic and diluted earnings per share.

Basic earnings per share includes no dilution.

Earnings per share are computed by dividing income available to common stockholders by the basic and diluted weighted average number of common shares.

Comparative Amounts

amounts presented in the financial statements previously issued for the fiscal year ended October 2, 2021 have been reclassified to

conform to the current year's presentation.

Recently Adopted and Recently Issued Accounting Pronouncements

There are no accounting pronouncements that we have recently adopted.

We follow FASB ASC Topic 260 - “ Earnings

per Share .” This section provides for the calculation of basic and diluted earnings per share.

Basic earnings per share includes

Earnings per share are computed by dividing income available to common stockholders by the basic and diluted weighted average

number of common shares.

Recently Adopted and Recently Issued Accounting

Pronouncements

There are no accounting pronouncements that

we have recently adopted.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Recently Issued

The FASB issued guidance, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedient and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.

In response to the concerns about structural risks of interbank offered rates (“IBORs”) and, particularly, the risk of cessation of the LIBOR, regulators in several jurisdictions around the world have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable or transaction based and less susceptible to manipulation.

This accounting standards update provides companies with optional guidance to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued.

LIBOR rates will be published until June 30, 2023.

All principal and interest of the Term Loan was paid in full subsequent to October 1, 2022 so the discontinuance of LIBOR rates will have no impact on us.

There are no other recently issued accounting pronouncements that we have not yet adopted that we believe will have a material effect on our financial statements.

The FASB issued guidance, ASU 2022-06 Reference

Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedient

and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected

by reference rate reform if certain criteria are met.

In response to the concerns about structural risks of interbank offered rates (“IBORs”)

and, particularly, the risk of cessation of the London interbank offered rate (“LIBOR”), regulators in several jurisdictions

around the world have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable or

transaction based and less susceptible to manipulation.

This accounting standards update provides companies with optional guidance to

ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued.

rates were published until June 30, 2023.

All principal and interest of the Term Loan was paid during the first quarter of our fiscal

year 2023, so the discontinuance of LIBOR rates will have no impact on us.

The FASB issued guidance, ASU 2016-13 Financial

Instruments – Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments, which provides a financial asset

(or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected.

The allowance

for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying

value at the amount expected to be collected on the financial asset.

The measurement of expected credit losses is based on relevant information

about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability

of the reported amount.

This guidance would be effective for the Company in the first quarter of our fiscal year 2024;

however, after

performing a thorough analysis the Company concluded that there is no material impact.

There are no other recently issued accounting

pronouncements that we have not yet adopted that we believe may have a material effect on our financial statements.

PROPERTY AND EQUIPMENT, NET

(in thousands)

Furniture and equipment

4 unchanged sentences

Construction in progress

Depreciation and amortization expense for the fiscal years ended October 1, 2022 and October 2, 2021 was approximately $ 2,990,000 and $ 2,981,000 , respectively.

LEASEHOLD INTERESTS

Depreciation and amortization expense for

the fiscal years ended September 30, 2023 and October 1, 2022 was approximately $ 3,561 ,000 and $ 2,990 ,000, respectively.

LEASEHOLD INTERESTS, NET

(in thousands)

Leasehold interests, at cost

Less accumulated amortization

Future leasehold amortization as of October 1, 2022 is as follows:

Leasehold amortization expense for the fiscal years ended October 1, 2022 and October 2, 2021 was approximately $ 32,000 and $ 82,000 , respectively.

LEASEHOLD INTERESTS, NET (Continued)

Future leasehold amortization as of September

30, 2023 is as follows:

(in thousands)

Leasehold amortization expense for the fiscal

years ended September 30, 2023 and October 1, 2022 was approximately $ 23,000 and $ 32,000 , respectively.

INVESTMENT IN LIMITED PARTNERSHIPS

We have invested along with others (some of whom are affiliated with our officers and directors) in ten limited partnerships which currently own and operate nine South Florida based restaurants under our service marks “Flanigan’s Seafood Bar and Grill” or “Flanigan’s”.

In addition to being a limited partner in these limited partnerships, we are the sole general partner of ten of these limited partnerships and manage and control the operations of the restaurants except for the restaurant located in Fort Lauderdale, Florida where we only hold a limited partnership interest.

INVESTMENT IN LIMITED PARTNERSHIPS (Continued)

Generally, the terms of the limited partnership agreements provide that until the investors’ cash investment in a limited partnership (including any cash invested by us) is returned in full, (available cash is distributed to the investors pro-rata based on ownership interest), the limited partnership distributes to the investors annually out of available cash from the operation of the restaurant, as a return of capital, up to 25 % of the cash invested in the limited partnership, with no management fee paid to us.

Any available cash in excess of the 25 % of the cash invested in the limited partnership distributed to the investors annually, is paid one-half (½) to us as a management fee and one-half (½) to the investors (including us), pro-rata based on the investors’ investment, as a return of capital.

Once all of the investors (including us), have received, in full, amounts equal to their cash invested, an annual management fee becomes payable to us equal to one-half (½) of cash available to be distributed, with the other one-half (½) of available cash distributed to the investors (including us), as a profit distribution, pro-rata based on the investors’ investment.

As of October 1, 2022, all limited partnerships, with the exception of the 2022 Sunrise Restaurant, which opened for business in March, 2022 and the 2023 Miramar Restaurant, which we anticipate will open for business in February, 2023, have returned all cash invested and we receive an annual management fee equal to one-half (½) of the cash available for distribution by the limited partnership.

In addition to receipt of distributable amounts from the limited partnerships, we receive a fee equal to 3% of gross sales for use of the service mark “Flanigan’s Seafood Bar and Grill” or “Flanigan’s”.

In addition to our receipt of distributable amounts from the limited partnerships, we receive a fee equal to 3% of gross sales for use of our “Flanigan’s Seafood Bar and Grill” or “Flanigan’s” service marks, which use is authorized while we act as general partner only.

This 3 % fee is “earned” when sales are made by the limited partnerships and is paid weekly, in arrears.

Whether we will have any additional restaurants under development in the future will be dependent, among other things, on market conditions and our ability to raise capital.

We anticipate that we will continue to form limited partnerships to raise funds to own and operate restaurants under our service marks “Flanigan’s Seafood Bar and Grill” or “Flanigan’s” using the same or substantially similar financial arrangements.

Below is information on the eleven limited partnerships which own and operate “Flanigan’s Seafood Bar and Grill” or “Flanigan’s” restaurants:

We have invested along with others (some of

whom are affiliated with our officers and directors) in eleven limited partnerships which currently own and operate eleven South Florida

based restaurants under our service marks “Flanigan’s Seafood Bar and Grill” or “Flanigan’s”.

to being a limited partner in these limited partnerships, we are the sole general partner of ten of these limited partnerships and manage

and control the operations of the restaurants except for the restaurant located in Fort Lauderdale, Florida where we only hold a limited

partnership interest.

Generally, the terms of the limited partnership

agreements provide that until the investors’ cash investment in a limited partnership (including any cash invested by us) is returned

in full, (available cash is distributed to the investors pro-rata based on ownership interest), the limited partnership distributes to

the investors annually out of available cash from the operation of the restaurant, as a return of capital, up to 25 % of the cash invested

in the limited partnership, with no management fee paid to us.

Any available cash in excess of the 25 % of the cash invested in the limited

partnership distributed to the investors annually, is paid one-half (½) to us as a management fee and one-half (½) to the

investors (including us), pro-rata based on the investors’ investment, as a return of capital.

Once all of the investors (including

us), have received, in full, amounts equal to their cash invested, an annual management fee becomes payable to us equal to one-half (½)

of cash available to be distributed, with the other one-half (½) of available cash distributed to the investors (including us),

as a profit distribution, pro-rata based on the investors’ investment.

As of September 30, 2023, all limited partnerships,

with the exception of the 2022 Sunrise Restaurant, which opened for business in March, 2022 and the 2023 Miramar Restaurant, which opened

for business in April 2023, have returned all cash invested and we receive an annual management fee equal to one-half (½) of the

cash available for distribution by the limited partnership.

In addition to receipt of distributable amounts from the limited partnerships,

we receive a fee equal to 3 % of gross sales for use of our service marks “Flanigan’s Seafood Bar and Grill” or “Flanigan’s”,

which use is authorized while we act as general partner only.

This 3 % fee is “earned” when sales are made by the limited partnerships

and is paid weekly, in arrears.

Whether we will have any additional restaurants under development in the future will be dependent, among

other things, on market conditions and our ability to raise capital.

We anticipate that we will continue to form limited partnerships

to raise funds to own and operate restaurants under our service marks “Flanigan’s Seafood Bar and Grill” or “Flanigan’s”

using the same or substantially similar financial arrangements.

Below is information on the eleven limited

partnerships which own and operate “Flanigan’s Seafood Bar and Grill” or “Flanigan’s” restaurants:

Surfside, Florida

We are the sole general partner and a 46 % limited partner in this limited partnership which has owned and operated a restaurant in Surfside, Florida under our “Flanigan’s Seafood Bar and Grill” service mark since March 6, 1998.

33.3 % of the remaining limited partnership interest is owned by persons who are either our officers, directors or their family members.

This limited partnership has returned to its investors all of their initial cash invested and we receive an annual management fee equal to one-half (½) of the cash available for distribution by the limited partnership.

We are the sole general partner and a 46 %

limited partner in this limited partnership which has owned and operated a restaurant in Surfside, Florida under our “Flanigan’s

Seafood Bar and Grill” service mark since March 6, 1998.

33.3 % of the remaining limited partnership interest is owned by persons

who are either our officers, directors or their family members.

This limited partnership has returned to its investors all of their initial

cash invested and we receive an annual management fee equal to one-half (½) of the cash available for distribution by the limited

This entity is consolidated in the accompanying consolidated financial statements.

Kendall, Florida

We are the sole general partner and a 41 % limited partner in this limited partnership which has owned and operated a restaurant in Kendall, Florida under our “Flanigan’s Seafood Bar and Grill” service mark since April 4, 2000.

28.3 % of the remaining limited partnership interest is owned by persons who are either our officers, directors or their family members.

We are the sole general partner and a 41 % limited

partner in this limited partnership which has owned and operated a restaurant in Kendall, Florida under our “Flanigan’s Seafood

Bar and Grill” service mark since April 4, 2000.

28.3 % of the remaining limited partnership interest is owned by persons who are

either our officers, directors or their family members.

This limited partnership has returned to its investors all of their initial cash

invested and we receive an annual management fee equal to one-half (½) of the cash available for distribution by the limited partnership.

This entity is consolidated in the accompanying consolidated financial statements.

INVESTMENT IN LIMITED PARTNERSHIPS (Continued)

West Miami, Florida

We are the sole general partner and a 27 % limited partner in this limited partnership which has owned and operated a restaurant in West Miami, Florida under our “Flanigan’s Seafood Bar and Grill” service mark since October 11, 2001.

32.7 % of the remaining limited partnership interest is owned by persons who are either our officers, directors or their family members.

We are the sole general partner and a 27 % limited

partner in this limited partnership which has owned and operated a restaurant in West Miami, Florida under our “Flanigan’s

Seafood Bar and Grill” service mark since October 11, 2001.

32.7 % of the remaining limited partnership interest is owned by persons

who are either our officers, directors or their family members.

This limited partnership has returned to its investors all of their initial

cash invested and we receive an annual management fee equal to one-half (½) of the cash available for distribution by the limited

This entity is consolidated in the accompanying consolidated financial statements.

Wellington, Florida

We are the sole general partner and a 28 % limited partner in this limited partnership which has owned and operated a restaurant in Wellington, Florida under our “Flanigan’s Seafood Bar and Grill” service mark since May 27, 2005.

22.4 % of the remaining limited partnership interest is owned by persons who are either our officers, directors or their family members.

We are the sole general partner and a 28 %

limited partner in this limited partnership which has owned and operated a restaurant in Wellington, Florida under our “Flanigan’s

Seafood Bar and Grill” service mark since May 27, 2005.

22.4 % of the remaining limited partnership interest is owned by persons

who are either our officers, directors or their family members.

This limited partnership has returned to its investors all of their initial

cash invested and we receive an annual management fee equal to one-half (½) of the cash available for distribution by the limited

This entity is consolidated in the accompanying consolidated financial statements.

Pinecrest, Florida

We are the sole general partner and 45 % limited partner in this limited partnership which has owned and operated a restaurant in Pinecrest, Florida under our “Flanigan’s Seafood Bar and Grill” service mark since August 14, 2006.

20.2 % of the remaining limited partnership interest is owned by persons who are either our officers, directors or their family members.

This limited partnership has returned to its investors all of their initial cash invested and we receive an annual management fee equal to one-half (1/2) of the cash available for distribution by this limited partnership.

We are the sole general partner and 45 % limited

partner in this limited partnership which has owned and operated a restaurant in Pinecrest, Florida under our “Flanigan’s

Seafood Bar and Grill” service mark since August 14, 2006.

20.2 % of the remaining limited partnership interest is owned by persons

who are either our officers, directors or their family members.

This limited partnership has returned to its investors all of their initial

cash invested and we receive an annual management fee equal to one-half (½) of the cash available for distribution by this limited

This entity is consolidated in the accompanying consolidated financial statements.

INVESTMENT IN LIMITED PARTNERSHIPS (Continued)

Pembroke Pines, Florida

We are the sole general partner and a 24 % limited partner in this limited partnership which has owned and operated a restaurant in Pembroke Pines, Florida under our “Flanigan’s Seafood Bar and Grill” service mark since October 29, 2007.

23.8 % of the remaining limited partnership interest is owned by persons who are either our officers, directors or their family members.

We are the sole general partner and a 24 % limited

partner in this limited partnership which has owned and operated a restaurant in Pembroke Pines, Florida under our “Flanigan’s

Seafood Bar and Grill” service mark since October 29, 2007.

23.8 % of the remaining limited partnership interest is owned by persons

who are either our officers, directors or their family members.

This limited partnership has returned to its investors all of their initial

cash invested and we receive an annual management fee equal to one-half (½) of the cash available for distribution by this limited

This entity is consolidated in the accompanying consolidated financial statements.

Davie, Florida

We are the sole general partner and a 49 % limited partner in this limited partnership which has owned and operated a restaurant in Davie, Florida under our “Flanigan’s Seafood Bar and Grill” service mark since July 28, 2008.

12.3 % of the remaining limited partnership interest is owned by persons who are either our officers, directors or their family members.

We are the sole general partner and a 49 %

limited partner in this limited partnership which has owned and operated a restaurant in Davie, Florida under our “Flanigan’s

Seafood Bar and Grill” service mark since July 28, 2008.

12.3 % of the remaining limited partnership interest is owned by persons

who are either our officers, directors or their family members.

This limited partnership has returned to its investors all of their initial

cash invested and we receive an annual management fee equal to one-half (½) of the cash available for distribution by this limited

This entity is consolidated in the accompanying consolidated financial statements.

INVESTMENT IN LIMITED PARTNERSHIPS (Continued)

Miami, Florida

We are the sole general partner and a 5 % limited partner in this limited partnership which has owned and operated a restaurant in Miami, Florida under our “Flanigan’s Seafood Bar and Grill” service mark since December 27, 2012.

26.8 % of the remaining limited partnership interest is owned by persons who are either our officers, directors or their family members.

We are the sole general partner and a 5 % limited

partner in this limited partnership which has owned and operated a restaurant in Miami, Florida under our “Flanigan’s Seafood

Bar and Grill” service mark since December 27, 2012.

26.8 % of the remaining limited partnership interest is owned by persons who

are either our officers, directors or their family members.

This limited partnership has returned to its investors all of their initial

cash invested and we receive an annual management fee equal to one-half (½) of the cash available for distribution by this limited

This entity is consolidated in the accompanying consolidated financial statements.

Sunrise, Florida

We are the sole general partner and a 7 % limited partner in this limited partnership which has owned and operated a restaurant in Sunrise, Florida under our “Flanigan’s” service mark since March 20, 2022.

31.3 % of the remaining limited partnership interest is owned by persons who are either our officers, directors or their family members.

As of the end of our fiscal year 2022, this limited partnership has returned to its investors approximately 2.0% of their initial cash invested and as a result, we are currently not entitled to receive any management fees from this limited partnership.

We are the sole general partner and a 7 % limited

partner in this limited partnership which has owned and operated a restaurant in Sunrise, Florida under our “Flanigan’s”

service mark since March 20, 2022.

31.3 % of the remaining limited partnership interest is owned by persons who are either our officers,

directors or their family members.

As of the end of our fiscal year 2023, this limited partnership has returned to its investors approximately

14.5 % of their initial cash invested and as a result, we are currently not entitled to receive any management fees from this limited partnership.

This entity is consolidated in the accompanying consolidated financial statements.

INVESTMENT IN LIMITED PARTNERSHIPS (Continued)

Miramar, Florida

We are the sole general partner in this limited partnership which is developing a restaurant in Miramar, Florida under our “Flanigan’s” service mark.

We are the sole general partner in this limited

partnership which has owned and operated a restaurant in Miramar, Florida under our “Flanigan’s” service mark since

April 18, 2023.

No units of limited partnership interest were purchased by the Company.

24.0 % of the limited partnership interest is owned by persons who are either our officers, directors or their family members.

We anticipate that this new restaurant will commence operations in February, 2023.

24.0 % of the limited partnership interest is owned

by persons who are either our officers, directors or their family members.

As of the end of our fiscal year 2023, this limited partnership

has returned to its investors approximately 10 % of their initial cash invested and as a result, we are currently not entitled to receive

any management fee from this limited partnership.

This entity is consolidated in the accompanying consolidated financial statements.

Fort Lauderdale, Florida

A corporation, owned by a member of our Board of Directors, acts as sole general partner of a limited partnership which has owned and operated a restaurant in Fort Lauderdale, Florida under our “Flanigan’s Seafood Bar and Grill” service mark since April 1, 1997.

We have a 25% limited partnership interest in this limited partnership.

31.9 % of the remaining limited partnership interest is owned by persons who are either our officers, directors or their family members.

A corporation, owned by a member of our Board

of Directors, acts as sole general partner of a limited partnership which has owned and operated a restaurant in Fort Lauderdale, Florida

under our “Flanigan’s Seafood Bar and Grill” service mark since April 1, 1997.

We have a 25 % limited partnership interest

in this limited partnership.

31.9 % of the remaining limited partnership interest is owned by persons who are either our officers, directors

or their family members.

We have a franchise arrangement with this limited partnership.

For accounting purposes, we do not consolidate the operations of this limited partnership into our operations.

Our investment in this entity is reported using the equity method in the accompanying consolidated financial statements.

The following is a summary of financial information pertaining to our limited partnership investment in Fort Lauderdale, Florida:

For accounting purposes, we do not consolidate

the operations of this limited partnership into our operations.

Our investment in this entity is reported using the equity method in the

accompanying consolidated financial statements.

The following is a summary of financial information pertaining to our limited partnership

investment in Fort Lauderdale, Florida:

(in thousands)

Financial Position:

6 unchanged sentences

Operating Results:

Net (Loss) Income

PRIVATE OFFERINGS:

CIC Investors #85, Ltd.

(Flanigan’s, Sunrise, Florida)

On February 15, 2022, a Florida limited partnership (CIC Investors #85, Ltd.) in which the Company serves as general partner, completed a private placement of 1,000 Units of limited partnership interests at $ 5,000 per Unit for proceeds of $ 5,000,000 , 74 Units of which ($ 370,000 ) were purchased by the Company upon the same terms and conditions as all other investors.

Sunrise, Florida)

On February 15, 2022, a Florida limited partnership

(CIC Investors #85, Ltd.) in which the Company serves as general partner, completed a private placement of 1,000 Units of limited partnership

interests at $ 5,000 per Unit for proceeds of $ 5,000,000 , 74 Units of which ($ 370,000 ) were purchased by the Company upon the same terms

and conditions as all other investors.

The Company’s investment is eliminated in consolidation.

The proceeds of the private placement were used to satisfy (including reimbursement to us for advances we have made), build-out and renovation expenses and the purchase of such furniture, fixtures and equipment necessary for operation of our Sunrise, Florida restaurant under the service mark “Flanigan’s”, which commenced operations on March 22, 2022.

Capital raised from private investors is credited to sale of noncontrolling interests in our Statements of Stockholders’ Equity.

Under ASC 810, Consolidation, the Company, which is the entity issuing financial statements, is required to consolidate CIC Investors #85, Ltd.

as we have a controlling interest in CIC Investors #85, Ltd.

The proceeds of the private placement

were used to satisfy (including reimbursement to us for advances we have made), build-out and renovation expenses and the purchase of

such furniture, fixtures and equipment necessary for operation of our Sunrise, Florida restaurant under the service mark “Flanigan’s”,

which commenced operations on March 22, 2022.

Capital raised from private investors is credited to sale of noncontrolling interests in

our Statements of Stockholders’ Equity.

Under ASC 810, Consolidation, the Company,

which is the entity issuing financial statements, is required to consolidate CIC Investors #85, Ltd.

as we have a controlling interest

in CIC Investors #85, Ltd.

as general partner, although the Company only has a 7.40 % ownership.

CIC Investor #25, Ltd.

(Flanigan’s, Miramar, Florida)

On February 15, 2022, a Florida limited partnership (CIC Investors #25, Ltd.) in which the Company serves as general partner, completed a private placement of 800 Units of limited partnership interests at $ 5,000 per Unit for gross proceeds of $ 4,000,000 .

Miramar, Florida)

On February 15, 2022, a Florida limited partnership

(CIC Investors #25, Ltd.) in which the Company serves as general partner, completed a private placement of 800 Units of limited partnership

interests at $ 5,000 per Unit for gross proceeds of $ 4,000,000 .

No units of limited partnership interest were purchased by the Company.

The proceeds of the private placement are being used to satisfy (including reimbursement to us for advances we have made), build-out and renovation expenses and the purchase of such furniture, fixtures and equipment necessary for operation of our Miramar, Florida restaurant under the service mark “Flanigan’s”, which we believe will commence operations in February, 2023.

Capital raised from private investors is credited to sale of noncontrolling interests in our Statements of Stockholders’ Equity.

Under ASC 810, Consolidation, the Company, which is the entity issuing financial statements, is required to consolidate CIC Investors #25, Ltd.

as we have a controlling interest in CIC Investors #25, Ltd.

The proceeds of the private placement are being used to satisfy (including reimbursement to us for advances we have made), build-out and

renovation expenses and the purchase of such furniture, fixtures and equipment necessary for operation of our Miramar, Florida restaurant

under the service mark “Flanigan’s”, which opened for business in April 2023.

Capital raised from private investors

is credited to sale of noncontrolling interests in our Statements of Stockholders’ Equity.

Under ASC 810, Consolidation, the Company,

which is the entity issuing financial statements, is required to consolidate CIC Investors #25, Ltd.

as we have a controlling interest

in CIC Investors #25, Ltd.

as general partner, although the Company has no direct ownership.

PURCHASE OF 4 COP LIQUOR LICENSE

During our fiscal year 2022, we purchased a 4 COP quota liquor license for Broward County, Florida from an unrelated third party for $ 446,000 .

The liquor license is currently inactive, but we intend to use it in connection with the operation of the package liquor store we are developing in Miramar, Florida.

The 4COP quota liquor license for Broward County, Florida which we purchased during the third quarter of our fiscal year 2021 and was inactive, was transferred for use in our operation of “Brendan’s Sports Pub”.

EXECUTION OF LEASE FOR NEW LOCATION;

BUSINESS ACQUISITION OF “BRENDAN’S SPORTS PUB”

Pompano Beach, Florida (Brendan’s Sports Pub)

During the third quarter of our fiscal year 2022, we entered into a Lease (the “BSP Lease”) with a non-affiliated third party from whom we rented approximately 3,556 square feet of commercial space located at 868 South Federal Highway, Pompano Beach, Florida, from where we operate the existing “Brendan’s Sports Pub” business (Store #30), the assets of which we simultaneously purchased.

The term of the BSP Lease is for fifty (50) years , triple net to the landlord with fixed rent of $ 78,000 per year, with two ( 2 %) percent annual increases commencing in year five.

Brendan’s Sports Pub, Pompano Beach, Florida

During the third quarter of our fiscal year 2022 and simultaneously with the execution of the BSP Lease, we purchased the assets of the business known as “Brendan’s Sports Pub” located at 868 South Federal Highway, Pompano Beach, Florida for a purchase price of $ 75,000 , including but not limited to the furniture, fixtures, equipment and service mark, “Brendan’s Sports Pub”, but excluding the 4 COP liquor license used in the operation of the business.

BUSINESS ACQUISITION

OF “BRENDAN’S SPORTS PUB”

Pompano Beach, Florida (Brendan’s

During the third quarter of our fiscal year

2022, we entered into a Lease (the “BSP Lease”) with a non-affiliated third party from whom we rented approximately 3,556

square feet of commercial space located at 868 South Federal Highway, Pompano Beach, Florida, from where we operate the existing “Brendan’s

Sports Pub” business (Store #30), the assets of which we simultaneously purchased.

The term of the BSP Lease is for fifty (50) years ,

triple net to the landlord with fixed rent of $ 78,000 per year, with two ( 2 %) percent annual increases commencing in year five.

Brendan’s Sports Pub, Pompano Beach,

During the third quarter of our fiscal year

2022 and simultaneously with the execution of the BSP Lease, we purchased the assets of the business known as “Brendan’s Sports

Pub” located at 868 South Federal Highway, Pompano Beach, Florida for a purchase price of $ 75,000 , including but not limited to

the furniture, fixtures, equipment and service mark, “Brendan’s Sports Pub”, but excluding the 4 COP liquor license

used in the operation of the business.

We did not assume any obligations of the business.

We accounted for the purchase of the assets of the business known as "Brendan's Sports Pub" as a business combination that is insignificant for purposes of all of the disclosuress required under ASC 805

We accounted for the purchase of the assets

of the business known as "Brendan's Sports Pub" as a business combination that is insignificant for purposes of all of the

disclosures required under ASC 805.

PURCHASE OF REAL PROPERTY;

4 COP LIQUOR LICENSE

El Portal, Florida (“Big Daddy’s

Liquors”/Warehouse)

During the third quarter of our fiscal year 2023,

we closed with a non-affiliated third party on the purchase of the real property it owns located at 8600 Biscayne Boulevard, El Portal,

Florida consisting of approximately 6,000 square feet of commercial space which we sublease and where our “Big Daddy’s Liquors”

package liquor store and our warehouse (Store #47) operate for $ 3,200,000 .

We paid all cash at closing.

Despite the purchase of this property,

the sublease arrangement remains in place with all investors.

Hallandale Beach, Florida

During the third quarter of our fiscal year 2023,

we closed with a non-affiliated third party on the purchase of a three building shopping center in Hallandale Beach, Florida, which consists

of one stand-alone building which is leased to two unaffiliated third parties (approximately 1,450 square feet);

a second stand-alone

building which is leased to one unaffiliated third party (approximately 1,500 square feet);

and a third stand-alone building which is

leased to one unaffiliated third party (approximately 2,500 square feet) for $ 8,500,000 .

The rental income generated by these four lease

arrangements is not material.

The real property is located adjacent to our real property located at 4 N.

Federal Highway, Hallandale Beach,

Florida, where our combination package store and restaurant (Store #31) operates.

We paid all cash at closing and accounted for this transaction

as an asset acquisition.

Purchase of 4 COP Liquor License

During our fiscal year 2022, we purchased a

4 COP quota liquor license for Broward County, Florida from an unrelated third party for $ 446,000 .

The liquor license is currently in

use in connection with the operation of our package liquor store in Miramar, Florida.

The 4 COP quota liquor license for Broward County,

Florida which we purchased during the third quarter of our fiscal year 2021 and was inactive, was transferred for use in our operation

of “Brendan’s Sports Pub” during our fiscal year 2022.

RE-FINANCING OF EXISTING MORTGAGES;

FINANCED INSURANCE PREMIUMS:

Re-Finance of Mortgage on Real Property – Fort Lauderdale, Florida

During our fiscal year 2022, we requested and received an advance of $ 697,000 from the payee of an entity managed by a member of our Board of Directors and who is also our Chief Financial Officer, which holds a mortgage note in the original principal amount of $ 1,000,000 (the “$ 1,000,000 Note”), resulting in a principal amount outstanding thereunder of $ 1,100,000 as of August 1, 2022.

Our repayment obligations under the $ 1,000,000 Note continue to be secured by a first mortgage on the real property and improvements where our restaurant located at 2600 West Davie Boulevard, Fort Lauderdale, Florida operates.

The terms of the $ 1,000,000 Note are that it bears interest at 6 % annually (increased from 5 % annually), is amortizable over 15 years with monthly installments of principal and interest of approximately $ 9,300 required to be made and a final balloon payment of approximately $ 487,000 required to be made August 1, 2032.

Re-Finance of Mortgage on Real Property – Hallandale Beach, Florida

During our fiscal year 2022, we re-financed our debt with our non-affiliated third-party lender secured by our real property located at 4 N.

Federal Highway, Hallandale, Florida where our combination package liquor store and restaurant (Store #31) operates and borrowed an additional $ 8,012,000 raising the principal balance to $ 8,900,000 , (the “$8.90M Mortgage”).

The $ 8.90 M Mortgage bears interest at a variable rate equal to the BSBY Screen Rate – 1 Month plus 1.50% .

We entered into an interest rate swap agreement to hedge the interest rate risk, which fixed the interest rate on the $8.90M Mortgage at 4.90 % per annum throughout its term.

The $8.90M Mortgage is fully amortized over fifteen (15) years, with our monthly payment of principal and interest totaling $ 33,000 .

Financed Insurance Premiums

During our fiscal year 2022, we financed the premiums on the following property, general liability, excess liability and terrorist policies, totaling approximately $ 2.54 million, which property, general liability, excess liability and terrorist insurance includes coverage for our franchises which are not included in our consolidated financial statements:

(i) For the policy year beginning December 30, 2021, our general liability insurance, excluding limited partnerships, is a one (1) year policy with our insurance carriers.

The one ( 1 ) year general liability insurance premium is in the amount of $ 467,000 ;

(ii) For the policy year beginning December 30, 2021, our general liability insurance for our limited partnerships is a one (1) year policy with our insurance carriers.

The one ( 1 ) year general liability insurance premium is in the amount of $ 589,000 ;

(iii) For the policy year beginning December 30, 2021, our automobile insurance is a one (1) year policy.

The one ( 1 ) year automobile insurance premium is in the amount of $ 194,000 ;

(iv) For the policy year beginning December 30, 2021, our property insurance is a one (1) year policy.

The one ( 1 ) year property insurance premium is in the amount of $ 700,000 ;

(v) For the policy year beginning December 30, 2021, our excess liability insurance are two (2) one (1) year policies.

The aggregate one ( 1 ) year excess liability insurance premiums are in the amount of $ 576,000 ;

(vi) For the policy year beginning December 30, 2021, our terrorist insurance is a one (1) year policy.

The one ( 1 ) year terrorist insurance premium is in the amount of $ 8,900 ;

(vii) For the policy year beginning December 30, 2021, our equipment breakdown insurance is a one (1) year policy.

The one ( 1 ) year equipment breakdown insurance premium is in the amount of $ 6,800 .

Of the $ 2,542,000 annual premium amounts, which includes coverage for our franchises which are not included in our consolidated financial statements, we financed $ 2,328,000 through an unaffiliated third party lender.

The finance agreement obligates us to repay the amounts financed together with interest at the rate of 2.55 % per annum, over 11 months, with monthly payments of principal and interest of $ 215,000 .

The finance agreement is secured by a first priority security interest in all insurance policies, all unearned premium, return premiums, dividend payments and loss payments thereof.

As of October 1, 2022, the aggregate principal balance owed from the financing of our property and general liability insurance policies, excluding coverage for our franchises (of approximately $ 136,000 ), which are not included in our consolidated financial statements is $ 507,000 .

INSURANCE PREMIUMS

Re-Finance of Mortgage on Real Property

– Fort Lauderdale, Florida

During our fiscal year 2022, we requested and received

a loan advance of $ 697,000 from an entity managed by a member of our Board of Directors who is also our Chief Financial Officer, which

entity currently holds a first priority mortgage note on our real property and improvements where our restaurant located at 2600 West

Davie Boulevard, Fort Lauderdale, Florida operates (the “West Davie Mortgage Note”).

Including the $ 697,000 advance, the principal

outstanding amount owed under the West Davie Mortgage Note as of September 30, 2023 is $ 1,049,000 .

The West Davie Mortgage Note accrues

interest at 6 % annually, (increased from 5 % annually), is amortizable over 15 years with monthly installments of principal and interest

of approximately $ 9,300 required to be made and a final balloon payment of approximately $ 487,000 required to be made August 1, 2032.

Re-Finance of Mortgage on Real Property

– Hallandale Beach, Florida

During our fiscal year 2022, we re-financed

our mortgage debt with a non-affiliated third-party lender secured by our real property located at 4 N.

Federal Highway, Hallandale, Florida

where our combination package liquor store and restaurant (Store #31) operates and borrowed an additional $ 8,012,000 raising the principal

balance to $ 8,900,000 , (the “$ 8.90 M Mortgage”).

The $ 8.90 M Mortgage bears interest at a variable rate equal to the BSBY Screen

Rate – 1 Month plus 1.50% .

We entered into an interest rate swap agreement to hedge the interest rate risk, which fixed the interest

rate on the $ 8.90 M Mortgage at 4.90 % per annum throughout its term.

The $ 8.90 M Mortgage is fully amortized over fifteen (15) years, with

our monthly payment of principal and interest totaling $ 33,000 .

Insurance Premiums

Prior to fiscal year 2023, we financed our

annual insurance premiums.

Due to higher interest rates, during the first quarter of our fiscal year 2023, for the policy year commencing

December 30, 2022, we paid the premiums for property, general liability, excess liability and terrorist policies, totaling approximately

$ 3.281 million, which includes coverage for our franchisees (which is $ 658,000 ), which are not included in our consolidated financial

Due to continuing higher interest rates for the policy year commencing December 30, 2023, we will pay the premiums for property,

general liability, excess liability, crime and terrorism policies in full ($ 3.932 million), which includes coverage for our franchises

(approximately $ 786,000 ), at the beginning of the second quarter of our fiscal year 2024.

We paid the $ 3.281 million annual premium

amounts on January 9, 2023, which includes coverage for our franchisees which are not included in our consolidated financial statements.

We secured property insurance for the period commencing after the expiration of the current policy on December 30, 2023.

(See Note 20.

Subsequent Events for a discussion of insurance premiums for the period commencing December 30, 2023 on page F-29.)

CORONAVIRUS PANDEMIC

In March 2020, a novel strain of coronavirus was declared a global pandemic and a National Public Health Emergency.

The novel coronavirus pandemic and related “shelter-in- place” orders and other governmental mandates relating thereto (collectively, “COVID-19”) adversely affected and will, in all likelihood continue to adversely affect, our restaurant operations and financial results for the foreseeable future.

During the third quarter of our fiscal year 2020, we, certain of the entities owning the limited partnership stores (the “LP’s”), franchised stores (the “Franchisees”) as well as the store we manage but do not own (the “Managed Store”), collectively (the “Borrowers”), applied for and received loans from an unrelated third party lender pursuant to the Paycheck Protection Program (the “PPP”) under the United States Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) enacted March 27, 2020, in the aggregate principal amount of approximately $ 13.1 million, (the “PPP Loans”), of which approximately:

(i) $ 5.9 million was loaned to us;

(ii) $ 4.1 million was loaned to 8 of the LP's;

(iii) $ 2.6 million was loaned to 5 of the Franchisees;

and (iv) $ 0.5 million was loanted to the Managed Store.

The PPP Loans to the Franchisees and Managed Store are not included in our consolidated financial statements.

During the first quarter of our fiscal year 2021, the entire amount of principal and accrued interest for all PPP Loans was forgiven

During the second quarter of our fiscal year 2021, certain of the entities owning the limited partnership stores (the “LP’s”), as well as the store we manage but do not own (the “Managed Store”), applied for and received loans from an unrelated third party lender pursuant to the Paycheck Protection Program (the “PPP”) under the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) enacted March 27, 2020, in the aggregate principal amount of approximately $ 3.98 million, (the “2 nd PPP Loans”), of which approximately:

In March 2020, a novel strain of coronavirus

was declared a global pandemic and a National Public Health Emergency.

The novel coronavirus pandemic, (“COVID-19”) adversely

affected and will, in all likelihood continue to adversely affect, our restaurant operations and financial results for the foreseeable

The Department of Health and Human Services (HHS) permitted the federal Public Health Emergency for COVID-19 (PHE) declared by

the Secretary of the Department of Health and Human Services (Secretary) under Section 319 of the Public Health Service (PHS) Act to expire

at the end of the day on May 11, 2023.

During the second quarter of our fiscal year

2021, certain of the entities owning the limited partnership stores (the “LP’s”), as well as the store we manage but

do not own (the “Managed Store”), applied for and received loans from an unrelated third party lender pursuant to the Paycheck

Protection Program (the “PPP”) under the United States Coronavirus Aid, Relief and Economic Security Act (the “CARES

Act”) enacted March 27, 2020, in the aggregate principal amount of approximately $ 3.98 million, (the “2nd PPP Loans”),

of which approximately:

(i) $ 3.46 million was loaned to six of the LP’s;

1 unchanged sentence

The 2nd PPP Loan to the Managed Store is not included in our consolidated financial statements.

During the first quarter of our fiscal year 2022, we applied for and received forgiveness of the entire amount of principal and accrued interest for all 2 nd PPP Loans, including the Managed Store.

COVID-19 has had a material adverse effect on our access to supplies or labor and there can be no assurance that there will not be a significant adverse impact on our supply chain or access to labor in the future.

We are actively monitoring our food suppliers to assess how they are managing their operations to mitigate supply flow and food safety risks.

To ensure we mitigate potential supply availability risk, we are building additional inventory back stock levels when appropriate and we have also identified alternative supply sources in key product categories including but not limited to food, sanitation and safety supplies.

During the first quarter of our fiscal

year 2022, we applied for and received forgiveness of the entire amount of principal and accrued interest for all 2nd PPP Loans, including

the Managed Store.

COVID-19 has had a material adverse effect

on our access to supplies or labor and there can be no assurance that there will not be a significant adverse impact on our supply chain

or access to labor in the future.

We are actively monitoring our food suppliers to assess how they are managing their operations to mitigate

supply flow and food safety risks.

To ensure we mitigate potential supply availability risk, we are building additional inventory back

stock levels when appropriate and we have also identified alternative supply sources in key product categories including but not limited

to food, sanitation and safety supplies.

RE-CONSTRUCTION FOLLOWING CASUALTY LOSS

During the first quarter of our fiscal year 2019, our combination package liquor store and restaurant located at 2505 N.

University Drive, Hollywood, Florida (Store #19) was damaged by a fire and was forced to close.

Due to the damage caused by the fire, we determined that Store #19 should be demolished and rebuilt and as a result, the package liquor store and restaurant were closed for our fiscal years 2022, 2021, 2020 and 2019.

The package liquor store re-opened for business subsequent to the end of our fiscal year 2022.

We also expect to receive building permits to construct the new building for our restaurant and expect to open for business during our fiscal year 2023.

During the first quarter of our fiscal year

2019, our combination package liquor store and restaurant located at 2505 N.

University Drive, Hollywood, Florida (Store #19) was damaged

by a fire and was forced to close.

The package liquor store re-opened for business during the first quarter of our fiscal year 2023 in

a newly constructed stand-alone building.

We believe the restaurant will reopen for business in our fiscal year 2024 in a newly constructed

stand-alone building where our combination package liquor store and restaurant was previously located.

LIQUOR LICENSES

Liquor licenses, which are indefinite lived assets, are tested for impairment in September of each of our fiscal years.

The fair value of liquor licenses at October 1, 2022, exceeded the carrying amount;

Liquor licenses, which are indefinite lived

assets, are tested for impairment in September of each of our fiscal years.

The fair value of liquor licenses at September 30, 2023, exceeded

the carrying amount;

therefore, we recognized no impairment loss.

The fair value of the liquor licenses was evaluated by comparing the carrying value to recent sales for similar liquor licenses in the County issued.

At October 1, 2022 and October 2, 2021, the total carrying amount of our liquor licenses was $ 1,268,000 and $ 822,000 , respectively.

In our fiscal year 2022, we acquired a 4 COP Quota Liquor License for $ 446,000 for use in Broward County, Florida which we intend to use in connection with the operation of a package liquor store we are developing in Miramar, Florida.

During our fiscal year 2021, we acquired a 4 COP Quota Liquor License for $ 192,200 for use in Broward County, Florida which we currently use in the operation of “Brendan’s Sports Pub”, the restaurant/bar in Pompano Beach, Florida we purchased during our fiscal year 2022.

The components of our provision for income taxes for our fiscal years 2022 and 2021 are as follows:

A reconciliation of income tax computed at the statutory federal rate to income tax expense is as follows:

The fair value of the liquor licenses was evaluated by comparing the

carrying value to recent sales for similar liquor licenses in the County issued.

At September 30, 2023 and October 1, 2022, the total

carrying amount of our liquor licenses was $ 1,268,000 .

The components of our provision for income taxes

for our fiscal years 2023 and 2022 are as follows:

(in thousands)

A reconciliation of income tax computed at the

statutory federal rate to income tax expense is as follows:

(in thousands)

Tax provision at the statutory rate

3 unchanged sentences

True up adjustment

Tax effect of rate change due to Tax Reform

PPP forgiveness

Other permanent items, net

We have deferred tax liabilities and assets which arise primarily due to depreciation recorded at different rates for tax and book purposes offset by cost basis differences in depreciable assets due to the deferral of the recognition of insurance recoveries on casualty losses for tax purposes, investments in and management fees paid by limited partnerships, accruals for potential uninsured claims, bonuses accrued for book purposes but not paid within two and a half months for tax purposes, the capitalization of certain inventory costs for tax purposes not recognized for financial reporting purposes, the recognition of revenue from gift cards not redeemed within twelve months of issuance, allowances for uncollectable receivables, unfunded limited retirement commitments and FICA tax credit.

The components of our deferred tax assets (liabilities) at October 1, 2022 and October 2, 2021 were as follows:

We have deferred tax liabilities and assets

which arise primarily due to depreciation recorded at different rates for tax and book purposes offset by cost basis differences in depreciable

assets due to the deferral of the recognition of insurance recoveries on casualty losses for tax purposes, investments in and management

fees paid by limited partnerships, accruals for potential uninsured claims, bonuses accrued for book purposes but not paid within two

and a half months for tax purposes, the capitalization of certain inventory costs for tax purposes not recognized for financial reporting

purposes, the recognition of revenue from gift cards not redeemed within twelve months of issuance, allowances for uncollectable receivables,

unfunded limited retirement commitments and FICA tax credit.

The components of our deferred tax assets (liabilities)

at September 30, 2023 and October 1, 2022 were as follows:

(in thousands)

Reversal of aged payables

2 unchanged sentences

Accruals for potential uninsured claims

Deferred revenue

Limited partnership management fees

2 unchanged sentences

Limited partnership investments

Interest rate swaps

Accrued limited retirement

Total Deferred Tax Liabilities, Net

Debt consists of the following as of October 1, 2022 and October 2, 2021:

INCOME TAXES (Continued)

As of September 30, 2023, the Company has federal general business

credit carryforward of $ 570,000 .

General business credit carryovers can be carried back 1 year and carried forward 20 years.

The company's

general business credit carryforward will begin to expire in fiscal year 2040.

Debt consists of the following as of September

30, 2023 and October 1, 2022:

Long-Term Debt

Mortgage payable to institutional lender, secured by a first mortgage on real property and improvements, bearing interest at 3.86 %, amortized over twenty ( 20 ) years, payable in monthly installments of principal and interest of approximately $ 43,400 , with a balloon payment of approximately $ 5,373,000 due on November 27, 2026.

As of October 1, 2022, the net book value of the collateral securing this mortgage was $ 5,473,000 .

As of September 30, 2023, the net book value of the collateral securing this mortgage was $ 5,571,000

Mortgage payable to institutional lender, secured by first mortgage on real property and improvements, bearing interest at the fixed rate of 3.63 % per annum, fully amortized over fifteen ( 15 ) years, payable in monthly installments of principal and interest of approximately $ 31,100 , with a final payment on July 1, 2036.

As of October 1, 2022, the net book value of the collateral securing this mortgage was $ 11,349,000 .

As of September 30, 2023, the net book value of the collateral securing this mortgage was $ 11,149,000 .

Mortgage payable to institutional lender, secured by first mortgage on real property and improvements, bearing interest at the fixed rate of 3.65 % per annum, fully amortized over fifteen ( 15 ) years, payable in monthly installments of principal and interest of approximately $ 16,000 , with a final payment on March 2, 2036.

As of October 1, 2022, the net book value of the collateral securing this mortgage was $ 4,524,000 .

Mortgage payable to institutional lender, secured by a first mortgage on real property and improvements, bearing interest at BSBY Screen Rate – 1 Month +1.50% , ( 3.40 % at October 1, 2022), but with the interest fixed at 4.90 % pursuant to a swap agreement, amortized over fifteen ( 15 ) years, payable in monthly installments of principal and interest of approximately $ 33,000 .

As of September 30, 2023, the net book value of the collateral securing this mortgage was $ 7,601,000

Mortgage payable to institutional lender, secured by a first mortgage on real property and improvements, bearing interest at BSBY Screen Rate – 1 Month +1.50% , ( 5.38 % at September 30, 2023), but with the interest fixed at 4.90 % pursuant to a swap agreement, amortized over fifteen ( 15 ) years, payable in monthly installments of principal and interest of approximately $ 33,000 .

From the re-financing of this mortgage, we withdrew $ 8,012,000 during our fiscal year ended October 1, 2022.

As of October 1, 2022, the net book value of the collateral securing this mortgage was $ 3,477,000 .

Revolving credit line/term loan payable to institutional lender, which entitled the Company to borrow, from time to time through December 28, 2017, up to $ 5 ,500,000, (the “Credit Line”), secured by a blanket lien on all Company assets, bearing interest through December 28, 2017 at LIBOR – Daily Floating Rate + 2.25 % , ( 3.40 % at October 1, 2022).

Effective December 28, 2017, an interest rate swap agreement 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, Daily Floating Rate, plus 2.25%, per annum (3.40% at October 1, 2022) on the same notional principal amount, with a final payment on December 28, 2022.

On December 21, 2017, we borrowed the remaining $ 3,500,000 and on December 28, 2017 the entire principal balance under the Credit Line ($ 5,500,000 ) converted to the Term Loan.

As of September 30, 2023, the net book value of the collateral securing this mortgage was $ 3,458,000 .

Revolving credit line/term loan payable to institutional lender, which

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

by a blanket lien on all Company assets, bearing interest through December 28, 2017 at LIBOR – Daily Floating Rate + 2.25 % .

December 28, 2017, an interest rate swap agreement 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, Daily Floating Rate,

plus 2.25%, per annum on the same notional principal amount, with a final payment on December 28, 2022.

On December 21, 2017, we borrowed

the remaining $ 3,500,000 and on December 28, 2017 the entire principal balance under the Credit Line ($ 5,500,000 ) converted to the Term

On December 28, 2022, we paid the outstanding principal balance ($ 367,000 ) and accrued interest ($- 0 -) in full.

Mortgage payable to institutional lender, secured by a first mortgage on real property and improvements, bearing interest at the fixed rate of 4.65 % per annum, fully amortized over fifteen ( 15 ) years, payable in monthly installments of principal and interest of approximately $ 6,400 , with a final payment on December 28, 2031.

As of October 1, 2022, the net book value of the collateral securing this mortgage was $ 810,000 .

As of September 30, 2023, the net book value of the collateral securing this mortgage was $ 1,033,000 .

DEBT (Continued)

Mortgage payable to a related party, an entity the owners of which include persons who are either our officers, directors or their family members, secured by first mortgage on real property and improvements, bearing interest at 6 %, amortized over fifteen ( 15 ) years, payable in monthly installments of principal and interest of approximately $ 9,300 , with a balloon payment of approximately $ 487,000 due in August, 2032.

As of October 1, 2022, the net book value of the collateral securing this mortgage was $ 1,589,000 .

As of September 30, 2023, the net book value of the collateral securing this mortgage was $ 1,873,000 .

As of October 1, 2022, the net book value of the collateral securing this mortgage was $ 936,000 .

As of September 30, 2023, the net book value of the collateral securing this mortgage was $ 988,000 .

Financed insurance premiums, secured by all insurance policies, bearing interest at 2.55 % payable in monthly installments of principal and interest in the aggregate amount of $ 215,000 a month through November 30, 2022.

Mortgage payable to unrelated third party, secured by first mortgage on real property and improvements, bearing interest at 7½%, amortized over twenty ( 20 ) years, payable in monthly installments of principal and interest of approximately $ 7,300 , with a final payment due in March, 2034.

As of October 1, 2022, the net book value of the collateral securing this mortgage was $ 1,085,000 .

Mortgage payable to related third party, secured by first mortgage on real property and improvements, bearing interest at 4 %, amortized over eight ( 8 ) years, payable in monthly installments of principal and interest of approximately $ 3,000 , with a final payment due in November, 2026.

As of October 1, 2022, the net book value of the collateral securing this mortgage was $ 498,000 .

Loans from an unrelated third party lender pursuant to the Paycheck Protection Program (the “PPP”) under the United States Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) enacted March 27, 2020, in the aggregate principal amount of approximately $ 3.46 million, (the “2 nd PPP Loans”), which was loaned to 6 of the limited partnerships.

The 2 nd PPP Loans, which are in the form of Notes issued by each of the Borrowers, mature five years from the date of funding (March 23, 2021) and bear interest at a rate of 1.00 % per annum, payable monthly commencing after the U.S.

Small Business Administration makes a determination of the forgiveness of the 2 nd PPP Loans).

Subsequent to the end of our fiscal year 2021, the principal balance and all accrued interest due on the 2 nd PPP Loans was forgiven in full.

DEBT (Continued)

Mortgage payable to unrelated third party, secured by first mortgage on real property and improvements, bearing interest at 7.5 %, amortized over twenty ( 20 ) years, payable in monthly installments of principal and interest of approximately $ 7,300 , with a final payment on March 1, 2034.

As of September 30, 2023, the net book value of the collateral securing this mortgage was $1,066,000.

As of September 30, 2023, the net book value of the collateral securing this mortgage was $ 559,000 .

Less unamortized loan costs

Less current portion

Long-term debt at October 1, 2022 matures as follows:

Long-term debt at September 30, 2023 matures

Less unamortized loan costs

As of October 1, 2022, we are in compliance with the financial covenants contained in our loans with our unrelated third party institutional lender (the “Institutional Lender”).

We owe in the aggregate, approximately $ 23,272,000 (the “Institutional Loans”), as of October 1, 2022.

There can be no assurances that we will be in compliance with our financial covenants thereafter due to, among other things, that our results of operations will likely continue to be materially impacted by the COVID-19 pandemic.

Absent a waiver, failure to be in compliance with our financial covenants would constitute a default under the Institutional Loans with our Institutional Lender when reported.

Such a default, if not cured or waived, would allow the Institutional Lender to accelerate the maturity of the indebtedness we owe under the Institutional Loans, making it due and payable at the time.

If maturity of the Institutional Loans were accelerated, it would have a material adverse impact on our consolidated financial statements and results of operations.

DEBT (Continued)

As of September 30, 2023, we are in compliance

with the financial covenants contained in our loans with our unrelated third party institutional lender (the “Institutional Lender”).

We owe in the aggregate, approximately $ 21,610,000 (the “Institutional Loans”), as of September 30, 2023.

There can be no assurances that we will be

in compliance with our financial covenants thereafter due to, among other things, that our results of operations will likely continue

to be materially impacted by the COVID-19 pandemic.

Absent a waiver, failure to be in compliance with our financial covenants would constitute

a default under the Institutional Loans with our Institutional Lender when reported.

Such a default, if not cured or waived, would allow

the Institutional Lender to accelerate the maturity of the indebtedness we owe under the Institutional Loans, making it due and payable

If maturity of the Institutional Loans were accelerated, it would have a material adverse impact on our financial position.

COMMITMENTS, CONTINGENCIES AND OTHER MATTERS

Construction Contracts

7990 Davie Road Extension, Hollywood, Florida (Store #19 – “Big Daddy’s Wine & Liquors”)

During the third quarter of our fiscal year 2019, we entered into an agreement with a third party unaffiliated general contractor for site work at this location totaling $ 1,618,000 , (i) to connect the real property where this restaurant operated (Store #19) to city sewer and (ii) to construct a new building on the adjacent parcel of real property for the operation of a package liquor store.

During our fiscal years 2020, 2021 and 2022, we agreed to change orders to the agreement for additional construction services increasing the total contract price by $ 624,000 to $ 2,242,000 , of which $ 1,951,000 has been paid through October 1, 2022 and $-0- has been paid subsequent to the end of our fiscal year 2022 through the date of filing of this annual report.

University Drive, Hollywood, Florida (Store #19 – “Flanigan’s”)

During the third quarter of our fiscal year 2019, we entered into an agreement with an unaffiliated third party architect for design and development services totaling $ 77,000 for the re-build of our restaurant located at 2505 N.

University Drive, Hollywood, Florida (Store #19), which has been closed since October 2, 2018 due to damages caused by a fire, of which $ 62,000 has been paid.

During the first quarter of our fiscal year 2022, we entered into an agreement with a third party unaffiliated general contractor to re-build our restaurant at this location for $ 2,515,000 , of which $ 226,000 has been paid through October 1, 2022 and $75,000 has been paid subsequent to the end of our fiscal year 2022 through the date of filing of this annual report.

COMMITMENTS, CONTINGENCIES AND OTHER MATTERS (Continued)

Construction Contracts (Continued)

Sunrise Boulevard, Sunrise, Florida (Store #85 – “Flanigan’s”)

During the third quarter of our fiscal year 2019, we entered into an agreement with an unaffiliated third party design group for design and development services of our new location at 14301 W.

Sunrise Boulevard, Sunrise, Florida 33323 (Store #85) for a total contract price of $ 122,000 .

During our fiscal year 2020, we agreed upon amendments to the $ 122,000 Contract for additional design and development services which had the effect of increasing the total contract price by $ 18,000 to $ 140,000 , of which $ 131,000 has been paid through October 1, 2022.

Additionally, during the fourth quarter of our fiscal year 2020, we entered into an agreement with a third party unaffiliated general contractor for interior renovations at this location totaling $ 1,236,000 and through our fiscal year 2022 we agreed to change orders to the agreement for additional interior renovations increasing the total contract price by $ 215,000 to $ 1,451,000 , which has been paid in full by the end of our fiscal year 2022.

During the second quarter of our fiscal year 2022, we entered into an agreement with a third party unaffiliated general contractor for exterior renovations at this location totaling $ 343,000 and through our fiscal year 2022 we agreed to change orders to the agreement for additional interior renovations increasing the total contract price by $ 61,000 to $ 404,000 , of which $ 353,000 has been paid through October 1, 2022 and $- 0 - has been paid subsequent to the end of our fiscal year 2022 through the date of filing of this annual report.

11225 Miramar Parkway, #250, Miramar, Florida (“Flanigan’s”)

During the second quarter of our fiscal year 2022, we entered into an agreement with a third party unaffiliated general contractor for interior renovations at this location totaling $ 1,421,000 , and through our fiscal year 2022 we agreed to change orders to the agreement increasing the total contract price by $ 128,000 to $ 1,549,000 of which $ 932,000 has been paid through October 1, 2022 and $ 226,000 has been paid subsequent to the end of our fiscal year 2022 through the date of filing of this annual report.

11225 Miramar Parkway, #245, Miramar, Florida (“Big Daddy’s Wine and Liquors”)

During the first quarter of our fiscal year 2022, we entered into an agreement with a third party unaffiliated general contractor for interior renovations at this location totaling $ 317,000 , and through our fiscal year 2022 we agreed to change orders to the agreement increasing the total contract price by $ 45,000 to $ 362,000 of which $ 316,000 has been paid through October 1, 2022 and $-0- has been paid subsequent to the end of our fiscal year 2022 through the date of filing of this annual report.

University Drive, Hollywood, Florida

(Store #19 – “Flanigan’s”)

During the third quarter of our fiscal year 2019,

we entered into an agreement with an unaffiliated third party architect for design and development services totaling $ 77,000 for the re-build

of our restaurant located at 2505 N.

University Drive, Hollywood, Florida (Store #19), which has been closed since October 2, 2018 due

to damages caused by a fire, of which $ 62,000 has been paid.

During the first quarter of our fiscal year 2022, we entered into an agreement

with a third party unaffiliated general contractor to re-build our restaurant at this location totaling $ 2,515,000 and during our fiscal

year 2023 we agreed to change orders increasing the total contract price by $ 1,021,000 to $ 3,536,000 , of which $ 1,534,000 has been paid

through September 30, 2023 and $ 1,090,000 has been paid subsequent to the end of our fiscal year 2023.

Sunrise Boulevard, Sunrise, Florida (Store #85 –

"Flanigan's”)

During the second quarter of our fiscal year 2022,

we entered into an agreement with a third party unaffiliated general contractor for exterior renovations at this location totaling $ 343,000

and through the end of our fiscal year 2023 we agreed to change orders to the agreement increasing the total contract price by $ 327,000

to $ 670,000 , of which the full amount has been paid as of the end of our fiscal year 2023.

Legal Matters

Our sale of alcoholic beverages subjects us to “dram shop” statutes, which allow an injured person to recover damages from an establishment that served alcoholic beverages to an intoxicated person.

If we receive a judgment substantially in excess of our insurance coverage or if we fail to maintain our insurance coverage, our business, financial condition, operating results or cash flows could be materially and adversely affected.

We currently have no “dram shop” claims pending.

We are a party to various other claims, legal actions and complaints arising in the ordinary course of our business.

It is our opinion that all such matters are without merit or involve such amounts that an unfavorable disposition would not have a material adverse effect on our financial position or results of operations.

To conduct certain of our operations, we lease restaurant and package liquor store space in South Florida from unrelated third parties.

Our leases have remaining lease terms of up to 10 years, some of which include options to renew and extend the lease terms for up to an additional 30 years.

We presently intend to renew some of the extension options available to us and for purposes of computing the right-of-use assets and lease liabilities required by ASC 842, we have incorporated into all lease terms which may be extended, an additional term of the lesser of (i) the amount of years the lease may be extended;

Our sale of alcoholic beverages subjects us

to “dram shop” statutes, which allow an injured person to recover damages from an establishment that served alcoholic beverages

to an intoxicated person.

If we receive a judgment substantially in excess of our insurance coverage or if we fail to maintain our insurance

coverage, our business, financial condition, operating results or cash flows could be materially and adversely affected.

have no “dram shop” claims pending.

We are a party to various other claims, legal

actions and complaints arising in the ordinary course of our business.

It is our opinion that all such matters are without merit or involve

such amounts that an unfavorable disposition would not have a material adverse effect on our financial position or results of operations.

COMMITMENTS, CONTINGENCIES AND OTHER MATTERS (Continued)

To conduct certain of our operations, we lease

restaurant and package liquor store space in South Florida from unrelated third parties.

Our leases have remaining lease terms of up to

49 years, some of which include options to renew and extend the lease terms for up to an additional 30 years.

We presently intend to renew

some of the extension options available to us and for purposes of computing the right-of-use assets and lease liabilities required by

ASC 842, we have incorporated into all lease terms which may be extended, an additional term of the lesser of (i) the amount of years

the lease may be extended;

or (ii) 15 years.

Following adoption of ASC 842 during our fiscal year ended October 3, 2020, common area maintenance and property taxes are not considered to be lease components.

Following adoption of ASC 842 during our fiscal

year ended October 3, 2020, common area maintenance and property taxes are not considered to be lease components.

The components of lease expense are as follows:

October 1, 2022

October 2, 2021

Finance Lease Amortization

Finance Lease Expense, which is included in interest expense

(in thousands)

Ended September

Ended October 1,

Operating Lease Expense, which is included in occupancy costs

COMMITMENTS, CONTINGENCIES AND OTHER MATTERS (Continued)

Leases (Continued)

Supplemental balance sheet information related to leases is as follows:

Classification on the Consolidated Balance Sheet

October 1, 2022

Supplemental balance sheet information related to leases

is as follows:

(in thousands)

Classification on the Consolidated Balance Sheets

September 30, 2023

October 1, 2022

Operating lease assets

Operating current liabilities

Operating lease current liabilities

Operating lease non-current liabilities

3 unchanged sentences

Operating leases

The following table outlines the minimum future lease payments for the next five years and thereafter:

The following table outlines the minimum future

lease payments for the next five years and thereafter:

(in thousands)

For fiscal year

1 unchanged sentence

Less imputed interest

Total operating lease liabilities

COMMITMENTS, CONTINGENCIES AND OTHER MATTERS (Continued)

Purchase Commitments

In order to fix the cost and ensure adequate supply of baby back ribs for our restaurants for calendar years 2022 and 2023, we entered into purchase agreements with our current rib supplier, whereby we agreed to purchase approximately $ 10.4 million and $ 6.8 million of “2.25 & Down Baby Back Ribs” (industry jargon for the weight range in which slabs of baby back ribs are sold) from this vendor during calendar years 2022 and 2023, at prescribed costs, which we believe are competitive.

The decrease in our cost of baby back ribs for calendar year 2023 compared to calendar 2022 is due to a decrease in market price.

While we anticipate purchasing all of our rib supply from this vendor, we believe there are several other alternative vendors available, if needed.

In order to fix the cost and ensure adequate supply

of baby back ribs for our restaurants for calendar years 2023 and 2024, we entered into purchase agreements with our current rib supplier,

whereby we agreed to purchase approximately $ 7.0 million of “2.25 & Down Baby Back Ribs” (industry jargon for the weight

range in which slabs of baby back ribs are sold) from this vendor during calendar year 2023, at a prescribed cost, which we believe is

The increase in our cost of baby back ribs for calendar year 2024 compared to calendar year 2023 is due to our purchase of

ribs for Store #25, Miramar, Florida being open for the entire calendar year and Store #19, Hollywood, Florida anticipated to be open

for a part of the calendar year, offset by a decrease in market price.

While we anticipate purchasing all of our rib

supply from this vendor, we believe there are several other alternative vendors available, if needed.

Flanigan’s Fish Company, LLC

As of October 1, 2022, Flanigan’s Fish Company, LLC, a Florida limited liability company (“FFC”) supplies certain of the fish to all of our restaurants.

Since we hold the controlling interest of FFC, the balance sheet and operating results of this entity are consolidated into the accompanying consolidated financial statements of the Company.

Sales and purchases of fish are recognized in restaurant food sales and restaurant and lounges (cost of merchandise sold), respectively, in the consolidated statements of income at the time of sale to the restaurant.

In addition, the 49 % of FFC owned by the unrelated third party is recognized as noncontrolling interest in our consolidated financial statements.

As of September 30, 2023, Flanigan’s

Fish Company, LLC, a Florida limited liability company (“FFC”), supplies certain fish to all of our restaurants.

hold the controlling interest in FFC, the balance sheet and operating results of this entity are consolidated into the accompanying consolidated

financial statements of the Company.

Sales and purchases of fish are recognized in restaurant food sales and restaurant and lounges (cost

of merchandise sold), respectively, in the consolidated statements of income at the time of sale to the restaurant.

In addition, the 49 %

of FFC owned by the unrelated third party is recognized as noncontrolling interest in our consolidated financial statements.

Franchise Program

At October 1, 2022 and October 2, 2021, we were the franchisor of five units under franchise agreements.

Of the five franchised stores, three are combination restaurant/package liquor stores and two are restaurants (one of which we operate).

At September 30, 2023 and October 1, 2022,

we were the franchisor of five units under franchise agreements.

Of the five franchised stores, three are combination restaurant/package

liquor stores and two are restaurants (one of which we operate).

Four franchised stores are owned and operated by related parties as follows:

Flanigan, our Chairman of the Board of Directors, Chief Executive Officer and President of the Company, and Michael B.

Flanigan, a member of our Board of Directors and James G.

Flanigan’s brother, are each a 35.24 % owner of a company which has a franchise arrangement with us for the operation of a restaurant and adjacent package liquor store located in Coconut Grove, Florida (Store #18).

Flanigan, brother to both James G.

Flanigan, our Chairman of the

Board of Directors, Chief Executive Officer and President of the Company, and Michael B.

Flanigan, a member of our Board of Directors

Flanigan’s brother, are each a 35.24 % owner of a company which has a franchise arrangement with us for the operation

of a restaurant and adjacent package liquor store located in Coconut Grove, Florida (Store #18).

Flanigan, brother to

both James G.

Flanigan and Michael B.

Flanigan and a member of our Board of Directors, owns 100 % of a company which has a franchise arrangement with us for the operation of a combination restaurant/package liquor store located in Pompano Beach, Florida (Store #43).

COMMITMENTS, CONTINGENCIES AND OTHER MATTERS (Continued)

Franchise Program (Continued)

• Our officers and directors collectively own 30 % of the shareholder interest of a company which has a franchise arrangement with us for the operation of a restaurant located in Deerfield Beach, Florida.

Flanigan and a member of our Board of Directors, owns 100 % of a company which has a franchise

arrangement with us for the operation of a combination restaurant/package liquor store located in Pompano Beach, Florida (Store

• Our officers and directors

collectively own 30 % of the shareholder interest of a company which has a franchise arrangement with us for the operation of a

restaurant located in Deerfield Beach, Florida.

The shareholder interest of James G.

Flanigan’s family represents an additional 60 % of the total invested capital in this franchised location (Store #14).

Flanigan is the sole general partner and a 25 % limited partner in a limited partnership which has a franchise arrangement with us for the operation of a restaurant located in Fort Lauderdale, Florida.

The Company is a 25 % limited partner in this limited partnership and officers and directors of the Company (excluding Patrick J.

Flanigan) own an additional 31.9 % limited partnership interest in this franchised location (Store #15).

Under the franchise agreements, we provide guidance, advice and management assistance to the franchisees.

In addition and for an additional annual fee of approximately $ 25,000 , we also act as fiscal agent for the franchisees whereby we collect all revenues and pay all expenses and distributions.

We also, from time to time, advance funds on behalf of the franchisees for the cost of renovations.

The resulting amounts receivable from and payable to these franchisees are reflected in the accompanying consolidated balance sheet as either an asset or a liability.

We also agree to sponsor and manage cooperative buying groups on behalf of the franchisees for the purchase of inventory.

The franchise agreements provide for royalties to us of approximately 3 % of gross restaurant sales and 1 % of gross package liquor sales.

During our fiscal years 2022 and 2021, we earned royalties of $ 1,132,000 and $ 786,000 , respectively, from our related franchises, which royalties are included in Franchise-related revenues in our Consolidated Statements of Income.

Flanigan’s family represents an

additional 60 % of the total invested capital in this franchised location (Store #14).

Flanigan is the sole

general partner and a 25 % limited partner in a limited partnership which has a franchise arrangement with us for the operation of a

restaurant located in Fort Lauderdale, Florida.

The Company is a 25 % limited partner in this limited partnership and officers and

directors of the Company (excluding Patrick J.

Flanigan) own an additional 31.9 % limited partnership interest in this franchised

location (Store #15).

Under the franchise agreements, we provide

guidance, advice and management assistance to the franchisees.

In addition and for an additional annual fee of approximately $ 25,000 ,

we also act as fiscal agent for the franchisees whereby we collect all revenues and pay all expenses and distributions.

We also, from

time to time, advance funds on behalf of the franchisees for the cost of renovations.

The resulting amounts receivable from and payable

to these franchisees are reflected in the accompanying consolidated balance sheet as either an asset or a liability.

We also agree to

sponsor and manage cooperative buying groups on behalf of the franchisees for the purchase of inventory.

The franchise agreements provide

for royalties to us of approximately 3 % of gross restaurant sales and 1 % of gross package liquor sales.

During our fiscal years 2023

and 2022, we earned royalties of $ 1,163,000 and $ 1,132,000 , respectively, from our related franchises, which royalties are included in

Franchise-related revenues in our Consolidated Statements of Income.

We are not currently offering or accepting new franchises.

COMMITMENTS, CONTINGENCIES AND OTHER MATTERS (Continued)

Employment Agreements/Bonuses

As of October 1, 2022 and October 2, 2021, we had no employment agreements.

Our Board of Directors approved an annual performance bonus, with 14.75 % of the corporate pre-tax net income, plus or minus non-recurring items, but before depreciation and amortization in excess of $ 650,000 paid to the Chief Executive Officer and 5.25 % paid to other members of management, (the “Officers Bonus”).

As of September 30, 2023 and October 1, 2022, we had no employment

Our Board of Directors approved an annual performance

bonus, with 14.75 % of the corporate pre-tax net income, plus or minus non-recurring items, but before depreciation and amortization in

excess of $ 650,000 paid to the Chief Executive Officer and 5.25 % paid to other members of management, (the “Officers Bonus”).

Officers Bonuses for our fiscal years 2023 and 2022 amounted to approximately $ 1,604,000 and $ 2,167,000 , respectively.

Our Board of Directors also approved an additional annual performance bonus, with 5 % of the pre-tax net income before depreciation and amortization from our restaurants in excess of $ 1,875,000 and our share of the pre-tax net income before depreciation and amortization from the restaurants owned by the limited partnerships paid to the Chief Operating Officer and 5 % paid to the Chief Financial Officer (the “Restaurant Bonus’').

Restaurant Bonuses for our fiscal years 2022 and 2021 amounted to approximately $ 1,340,000 and $ 1,530,000 , respectively.

Our Board of Directors also approved an additional

annual performance bonus, with 5 % of the pre-tax net income before depreciation and amortization from our restaurants in excess of $ 1,875,000

and our share of the pre-tax net income before depreciation and amortization from the restaurants owned by the limited partnerships paid

to the Chief Operating Officer and 5 % paid to the Chief Financial Officer (the “Restaurant Bonus’').

Restaurant Bonuses for

our fiscal years 2023 and 2022 amounted to approximately $ 1,090,000 and $ 1,340,000 , respectively.

Management Agreements

Deerfield Beach, Florida

Since January 2006, we have managed “The Whale’s Rib”, a casual dining restaurant located in Deerfield Beach, Florida, pursuant to a management agreement.

We paid $ 500,000 in exchange for our rights to manage this restaurant.

The management agreement was amortized and paid on a straight-line basis over the life of the initial term of the agreement, ten ( 10 ) years.

Since January 2006, we have managed “The

Whale’s Rib”, a casual dining restaurant located in Deerfield Beach, Florida, pursuant to a management agreement.

$ 500,000 in exchange for our rights to manage this restaurant.

The management agreement was amortized and paid on a straight-line basis

over the life of the initial term of the agreement, ten ( 10 ) years.

The restaurant is owned by a third party unaffiliated with us.

In exchange for providing management, bookkeeping and related services, we receive one-half (½) of the net profit, if any, from the operation of the restaurant.

During the third quarter of our fiscal year 2011, the term of the management agreement was extended through January 9, 2036.

For the fiscal years ended October 1, 2022 and October 2, 2021, we generated $ 400,000 of revenue from each fiscal year from providing these management services.

exchange for providing management, bookkeeping and related services, we receive one-half (½) of the net profit, if any, from the

operation of the restaurant.

During the third quarter of our fiscal year 2011, the term of the management agreement was extended through

January 9, 2036.

For the fiscal years ended September 30, 2023 and October 1, 2022, we generated $ 400,000 of revenue from each fiscal

year from providing these management services.

FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS

We follow FASB (ASC) Topic 820, “Fair Value Measurement”, for financial assets and liabilities and for non-financial assets and liabilities that are recognized or disclosed at fair value on at least an annual basis.

Topic 820 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, we consider the principal or most advantageous market in which it would transact and consider assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions and risk of non-performance.

Topic 820 establishes a fair market hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

Topic 820 establishes three levels of inputs that may be used to measure fair value:

Level 1 Inputs – Unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2 Inputs – Inputs other than quoted prices included in Level 1 that are either directly or indirectly observable through correlation with market data.

These include quoted prices for similar assets or liabilities in active markets;

quoted prices for identical or similar assets or liabilities in markets that are not active;

and inputs to evaluation models or other pricing methodologies that do not require significant judgment because the inputs used in the model, such as interest rates and volatility, can be corroborated by readily observable market data.

Level 3 Inputs – One or more significant inputs that are unobservable and supported by little or no market activity, and that reflect the use of significant management judgment.

Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies or similar valuation techniques, and significant management judgment or estimation.

Interest Rate Swap Agreements

At October 1, 2022, we had two variable rate instruments outstanding that are impacted by changes in interest rates.

The interest rate of the first variable rate debt instrument is equal to the lender’s LIBOR Rate plus two and one-quarter percent ( 2.25 %) per annum and the second variable rate debt instrument is equal to the lender’s BSBY Screen Rate plus one and one-half percent ( 1.50 %) per annum.

The debt instrument further provides 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 and the “BSBY Screen Rate is a rate of interest equal to the Bloomberg Short-Term Bank Yield Interest Rate or successor thereto approved by the lender.

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”).

Subsequent to the end of our fiscal year 2022, (December 28, 2022) we paid the balance of the Term Loan in full.

In September 2022, we refinanced the mortgage loan encumbering the property where our combination package liquor store and restaurant located at 4 N.

Federal Highway, Hallandale Beach, Florida, (Store #31) operates, which mortgage loan is held by an unaffiliated third party lender (the “$ 8.90 M Loan”).

We follow FASB (ASC) Topic 820, “Fair

Value Measurement”, for financial assets and liabilities and for non-financial assets and liabilities that are recognized or disclosed

at fair value on at least an annual basis.

Topic 820 defines fair value as the price that would be received from selling an asset or paid

to transfer a liability in an orderly transaction between market participants at the measurement date.

When determining the fair value

measurements for assets and liabilities required or permitted to be recorded at fair value, we consider the principal or most advantageous

market in which it would transact and consider assumptions that market participants would use when pricing the asset or liability, such

as inherent risk, transfer restrictions and risk of non-performance.

Topic 820 establishes a fair market hierarchy that requires an entity

to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

Topic 820 establishes

three levels of inputs that may be used to measure fair value:

● Level 1 Inputs – Unadjusted quoted prices in active markets for identical

assets or liabilities.

● Level 2 Inputs – Inputs other than quoted

prices included in Level 1 that are either directly or indirectly observable through correlation with market data.

These include quoted

prices for similar assets or liabilities in active markets;

quoted prices for identical or similar assets or liabilities in markets that

are not active;

and inputs to evaluation models or other pricing methodologies that do not require significant judgment because the inputs

used in the model, such as interest rates and volatility, can be corroborated by readily observable market data.

● Level 3 Inputs – One or more significant

inputs that are unobservable and supported by little or no market activity, and that reflect the use of significant management judgment.

Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies

or similar valuation techniques, and significant management judgment or estimation.

FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS (Continued)

Interest Rate Swap Agreements (Continued)

As a means of managing our interest rate risk on these debt instruments, we entered into interest rate swap agreements with our unrelated third party lender to convert these variable rate debt obligations to fixed rates.

We are currently party to the following two (2) interest rate swap agreements:

(i) The first 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 October 1, 2022, the interest rate swap agreement is an effective hedging agreement and the fair value was not material.

Subsequent to the end of our fiscal year 2022 (December 28, 2022) we paid the balance of the Term Loan in full, which was the same date the swap agreement matured;

(ii) The second interest rate swap agreement entered into in September 2022 relates to the $ 8.90 M Loan (the “$ 8.90 M Term Loan Swap”).

The $ 8.90 M Term Loan Swap requires us to pay interest for a fifteen ( 15 ) year period at a fixed rate of 4.90 % on an initial amortizing notional principal amount of $ 8,900,000 , while receiving interest for the same period at BSBY Screen Rate – 1 Month, plus 1.50% , on the same amortizing notional principal amount.

We determined that at October 1, 2022, the interest rate swap agreement is an effective hedging agreement and the fair value was not material.

Interest Rate Swap Agreements

At September 30, 2023, we had one variable

rate instrument outstanding that is impacted by changes in interest rates.

The interest rate of our variable rate debt instrument is equal

to the lender’s BSBY Screen Rate plus one and one-half percent ( 1.50 %) per annum.

In September 2022, we refinanced the mortgage

loan encumbering the property where our combination package liquor store and restaurant located at 4 N.

Federal Highway, Hallandale Beach,

Florida, (Store #31) operates, which mortgage loan is held by an unaffiliated third party lender (the “$ 8.90 M Loan”).

As a means of managing our interest rate risk

on this debt instrument, we entered into an interest rate swap agreement with our unrelated third-party lender to convert this variable

rate debt obligation to a fixed rate.

We are currently party to the following interest rate swap agreement:

(i) The interest rate swap agreement entered

into in September 2022 relates to the $ 8.90 M Loan (the “$ 8.90 M Term Loan Swap”).

The $ 8.90 M Term Loan Swap requires us to

pay interest for a fifteen ( 15 ) year period at a fixed rate of 4.90 % on an initial amortizing notional principal amount of $ 8,900,000 ,

while receiving interest for the same period at BSBY Screen Rate – 1 Month, plus 1.50% , on the same amortizing notional principal

As of September 30, 2023 the fair value of the swap agreement is now reflected on the balance sheet in other assets and accumulated

other comprehensive income.

We determined that the interest rate swap agreement is an effective hedging agreement and that changes in

fair value will be adjusted quarterly based on the valuation statement.

Treasury Stock

Purchase of Common Shares

During our fiscal years 2022 and 2021, we did not purchase any shares of our common stock.

As of October 1, 2022, we still have authority to purchase 65,414 shares of our common stock under the discretionary plan approved by the Board of Directors on May 17, 2007.

Our current repurchase plan has no expiration date and purchases under this program may be made from time to time on the open market and in private transactions, depending on market conditions, up to a purchase price of price of $ 15 per share.

During our fiscal years 2023 and 2022, we did

not purchase any shares of our common stock.

As of September 30, 2023, we still have authority to purchase 65,414 shares of our common

stock under the discretionary plan approved by the Board of Directors on May 17, 2007.

Our current repurchase plan has no expiration date

and purchases under this program may be made from time to time on the open market and in private transactions, depending on market conditions,

up to a purchase price of price of $ 15 per share.

The Internal Revenue Service will impose a 1.0 % tax on stock repurchases after December

BUSINESS SEGMENTS

We operate principally in two reportable segments – package stores and restaurants.

The operation of package stores consists of retail liquor sales and related items.

Information concerning the revenues and operating income for our fiscal years ended 2022 and 2021, and identifiable assets for the two reportable segments in which we operate, are shown in the following table.

Operating income is total revenue less cost of merchandise sold and operating expenses relative to each segment.

In computing operating income, none of the following items have been included:

We operate principally in two reportable segments

– package stores and restaurants.

This determination was made by the Chief Financial Officer of the Company to align our financial

reporting presentation with the major streams of revenue generation.

The operation of package stores consists of retail liquor sales and

What changed 10-K

Item 9A. Controls and Procedures