ARKR 10-K & 10-Q changes, risk factors and insider trading

BeginningIn inrecent 2021,years, our operating results were impacted by geopolitical and other macroeconomic events, causing supply chain challenges and significantly increased commodity and wage inflation. While we have seen improvements in many of these areas, some of these factors continued to impact our operating results in fiscal 2024.2025. The ongoing impact of these events could lead to further shifts in consumer behavior, wage inflation, staffing challenges, product and services cost inflation, disruptions in our supply chain and delays in opening and acquiring new restaurants. If these factors significantly impact our cash flow in the future, we may again implement mitigation actions such as continued suspension of dividends, increasing borrowings or modifying our operating strategies. Some of these measures may have an adverse impact on our business, including possible impairments of assets.

The Company has substantial fixed costs that do not decline proportionally with sales. Although our business is highly seasonal, our broader geographical reach as a result of prior acquisitions is expected to continue to mitigate some of the risk. For instance, the second quarter of our fiscal year, consisting of the non-holiday portion of the cold weather season in New York and Washington (January, February and March), is the poorest performing quarter; however, in recent years this has been partially offset by our locations in Florida as they experience increased results in the winter months. We generally achieve our best results during the warmer weather, attributable to our extensive outdoor dining availability, particularly at Bryant Park Grill & Café and The Porch at Bryant Park in New York and Sequoia in Washington, D.C. (our largest restaurants) and our outdoor cafes. However, even during summer months these facilities can be adversely affected by unusually cool or rainy weather conditions. Our facilities in Las Vegas are indoor and generally operate on a more consistent basis throughout the year, although in recent years the summer months have seen lower traffic.

TheManagement, after consultation with legal counsel, is unable to predict the outcome of this matter at this time. While the outcome of these proceedings cannot be predicted with certainty, the Bryant Park Grill & CafeCafé and The Porch at Bryant Park, collectively, accounted for $31.1$25.5 million and $30.4$31.1 million of our total revenues infor fiscalthe 2024years ended September 27, 2025 and 2023,September 28, 2024, respectively, which represented approximately 17.35%15.4% and 16.78%17.4% of our total revenue for such periods, respectively. The Company’s inability to extend or renew these leases on favorable terms, if at all, could have a material adverse effect on our business, financial condition, and results of operations.

The Company’s operating loss for the year ended September 27, 2025 (which includes a gain on the closure of El Rio Grande of $173,000, a gain on the termination of our Tampa Food Court lease of $5,235,000, impairment losses on right-of-use and long-lived assets in the amount of $4,700,000 related to Sequoia and a goodwill impairment charge of $3,440,000) was $4,064,000, down 5.4% as compared to an operating loss of $4,294,000 for the year ended September 28, 2024 (which includes a goodwill impairment charge of $4,000,000, a loss on the closure of El Rio Grande of $876,000 and$876,000, impairment losses on right-of-use and long-lived assets in the amount of $2,500,000 related to Sequoia and a goodwill impairment charge of $4,000,000). wasExcluding $4,294,000,the downabove 11.3%items asin comparedthe tocurrent anand prior periods, our adjusted operating loss for the year ended September 30,27, 20232025 (whichdecreased includes143.2% ato goodwill$1,331,000 impairmentas chargecompared to operating income of $10,000,000) of $4,840,000$3,082,000 for the year ended September 30,28, 2023.2024.

During the year ended September 28,27, 2024,2025, revenues decreased -0.7%9.7% as compared to revenues for the year ended September 30,28, 2023.2024. We attribute this small decrease primarily to the changes in same-store sales discussed below.below and the closures of El Rio Grande and the Tampa Food Court.

Same-store sales in Las Vegas increaseddecreased marginally3.7% as a result of lower customer traffic. Same-store sales in New York decreased 10.8% which we attribute primarily attribute to thedecreases negativein impactboth tocatering and a la carte revenue at the priorBryant periodPark Grill as a result of the temporarynegative closurepublicity of Gallagher's Steakhouse for renovation from February 5, 2023related to Aprilour 27,dispute 2023, partially offset by a decrease in customer traffic inwith the current year. Same-store sales in New York increased marginally which we primarily attribute to targeted menu price increases.landlord. Same-store sales in Washington, D.C. decreased 13.8% which we primarily attribute to lower headcounts, especially during lunch and after-work hours,14.9% which we attribute primarily to continuedlower headcounts as a result of challenging conditions associated with hybrid work schedulesschedules, asgovernment welllayoffs asand theelevated closurecrime of the property from Monday through lunch on Thursdays during winter months.rates. Same-store sales in Atlantic City, NJ decreased 2.5%10.2% which we primarily attribute to lower customer traffic at the property where we are located. Same-store sales in Alabama increaseddecreased 4.1%2.4% which we attribute primarily attribute to better than expectedlower customer traffic andas targeteda menuresult priceof increases.economic pressures on the customers who frequent our properties. Same-store sales in Florida decreasedincreased 3.1%1.6% which we attribute primarily attribute to lower headcounts as compared to the comparable prior period, which benefited from outsized volumes as a result of the population increase in Southeast Florida as a result of the migration of people during the pandemic partially offset by targeted menu price increases. Other food and beverage sales consist of administrative fees and other charges related to catered events.

Included in other revenues are purchasefood serviceand feesbeverage whichsales representrelated commissionsto earnedproperties bythat awere subsidiaryclosed ofduring the Companyrespective for providing purchasing services to other restaurant groups, as well asperiod, merchandise sales, licenserental fees,income, property management fees and other rentals.rentals as well as, in 2024, purchase service fees related to an affiliate that the Company no longer has an interest in, which represent commissions earned for providing services to other restaurant groups. The increasedecrease in other revenues for the year ended September 28,27, 20242025, as compared to the year ended September 30,28, 20232024, is primarily due to anthe increasesales related to El Rio Grande and the Tampa Food Court (which were closed in December 2024) and purchase service fees.fees in the amount of $1,337,000 in the prior year.

OccupancyFood expensesand beverage costs as a percentage of total revenues for the year ended September 28,27, 20242025 increased as compared to last year,year whichas wea attributeresult primarily toof increases in basecommodity rentsprices, which had been easing for several quarters, combined with a weaker event business in New York City and increasesWashington, D.C. in propertythe andcurrent liabilityyear insurancecompared premiums.to the prior year.

Other operating costs andPayroll expenses as a percentage of total revenues for the year ended September 28,27, 20242025 increased marginally as compared to last year primarily as a result of inflation.increasing minimum wages in the states where we operate partially offset by better shift management and related overtime hours.

General and administrativeOccupancy expenses (whichas relatea solelypercentage toof thetotal corporate office in New York City)revenues for the year ended September 28,27, 20242025 decreasedincreased marginally as compared to the same period of last year primarily as a result of the reversal of compensation expenseincreases in thebase amountrents ofand $1,134,000increases relatedin toproperty optionsand thatliability expiredinsurance or were cancelled unexercisedpremiums partially offset by increasedlower legalpercentage andrents consultingas expensesa andresult annualof meritthe increases.sales decreases discussed above.

Depreciation and amortization expense for the year ended September 28,27, 20242025 decreased slightly as compared to the same period of last year, which we attributeyear primarily toas a result of certain assets becoming fully depreciated.depreciated and the removal of assets associated with El Rio Grande and the Tampa Food Court.

(Gain) Loss on Closure of El Rio Grande

During the year ended September 28, 2024, impairment indicators were identified at our Sequoia property located in Washington, D.C. due to lower-than-expected operating results. Accordingly, the Company tested the recoverability of Sequoia's ROU and long-lived assets and concluded they were not recoverable. Based on a discounted cash flow analysis, the Company recognized impairment charges of $1,561,000 and $939,000 related to Sequoia's ROU assets and long-lived assets, respectively. NoThe Company continued to monitor the performance of Sequoia throughout fiscal 2025 and, as a result of lower than expected operating results, we tested the recoverability of its ROU and long-lived assets again and, based on a discounted cash flow analysis, we recognized additional impairment charges wereof recognized$2,940,000 relatedand to long-lived assets or ROU assets$1,760,000 during the year ended September 30,27, 2023.2025 Given the inherent uncertainty in projecting results of restaurants, the Company will continuerelated to monitorSequoia's the recoverability of the carrying value of the assets of SequoiaROU and severallong-lived otherassets, restaurants on an ongoing basis. If expected performance is not realized, further impairment charges may be recognized in future periods, and such charges could be material.respectively.

In performing its goodwill impairment test as of September 30, 2023, the Company determined that a triggering event had occurred. Due to the volatility of the Company's stock price in the fourth quarter of fiscal 2023, the upcoming expiration of the current Bryant Park Grill & Cafe and The Porch at Bryant Park leases on April 30, 2025 and the related requests for proposals from the landlord for both locations received in July 2023 and September 2023, respectively (see Note 11 - Commitments and Contingencies to the Consolidated Financial Statements), the Company determined that there were indicators of potential impairment of its goodwill as of September 30, 2023. As of September 28, 2024, there had been a lack of communication from the landlord regarding our proposals. In August 2024, the Company became aware that the landlord was in discussions with another operator. Accordingly, the Company performed a qualitative and quantitative assessmentsassessment of its goodwill aswhereby of September 28, 2024 and September 30, 2023. Thethe fair value of ourthe equity was determined using the income approach. Given the relatively low volume of shares traded as of September 28, 2024 and September 30, 2023,2024, the Company determined the income approach provided the best approximation of fair value. In the income approach, we utilized a discounted cash flow analysis, which involved estimating the expected future after-tax cash flows generated and then discounting those cash flows to present value, reflecting the relevant risks associated with the achievement of projected cash flows, the possibility that the Bryant Park Grill & CafeCafé and The Porch at Bryant Park leases may not be renewed beyond their expirations on April 30, 2025, and the time value of money. This approach requiresrequired the use of significant estimates and assumptions, including forecasted revenue growth rates, forecasted cash flows from operations, and discount rates that reflect the risk inherent in the future cash flows. Based on the impairment analysis, the carrying amount of our equity exceeded its estimated fair value, which indicated an impairment of the carrying value of our goodwill at September 28, 2024. Accordingly, during the fourth quarter of fiscal 2024, the Company recorded a goodwill impairment charge of $4,000,000, of which $4,000,000 was deductible for tax purposes and resulted in a deferred income tax benefit of $1,074,000. Such impairment was attributed to factors such as, but not limited to, a decrease in the market price of the Company's common stock and lower than expected profitability.

Our income tax expense, deferred tax assets and liabilities, and liabilities for uncertain tax positions reflect management’s best estimate of current and future taxes to be paid. We are subject to income tax in numerousvarious state taxing jurisdictions. Significant judgment and estimates are required in the determination of consolidated income tax expense. The provision for income taxes reflects federal income taxes calculated on a consolidated basis and state and local income taxes which are calculated on a separate entity basis.taxes.

Deferred income taxes arise from temporary differences between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements, which will result in taxable or deductible amounts in the future. In evaluating our ability to recover our deferred tax assets in the jurisdiction from which they arise, we consider all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax-planning strategies, and results of recent operations. TheAs of September 27, 2025, as a result of recent cumulative losses, we have recorded a full valuation allowance against our deferred tax assets. If these estimates and assumptions aboutchange futurein taxablethe future, the Company may be required to reduce its existing valuation allowance resulting in less income requiretax expense. The Company evaluates the uselikelihood of significantrealizing judgmentits anddeferred aretax consistentassets withat each interim period based on the plansweight andof estimatesavailable we are using to manage the underlying businesses.evidence.

While we have been able to partially offset inflation and other changes in the costs of key operating resources by targeted increases in menu prices, coupled with more efficient purchasing practices, there can be no assurance that we will be able to continue to do so in the future. From time to time, competitive conditions will limit our menu pricing flexibility. In addition, macroeconomic conditions that impact consumer discretionary spending for food away from home could make additional menu price increases imprudent. There can be no assurance that all of our future cost increases can be offset by higher menu prices or that higher menu prices will be accepted by our restaurant customers without any resulting changes in their visit frequencies or purchasing patterns.

Net cash usedprovided inby investing activities for the year ended September 28,27, 20242025 was $2,392,000$3,427,000 compared to net cash providedused byin investing activities of $1,276,000$2,392,000 for the year ended September 30,28, 2023.2024. This decreaseincrease resulted primarily from the payment received in connection with the termination of our Tampa Food Court lease and the proceeds received from the maturitysale of certificates of deposit in the prior periodcondominiums partially offset by lowerhigher purchases of fixed assets at existing restaurants in the current period.assets.

On November 8, 2023, February 6, 2024, and May 7, 2024, the Board of Directors of the Company (the "Board") declared quarterly cash dividends of $0.1875, $0.1875, and $0.1875, respectively, per share, which were paid on December 13, 2023, March 13, 2024, and June 12, 2024, respectively, to the stockholders of record of the Company's common stock at the close of business on November 30, 2023, February 29, 2024, and May 31, 2024, respectively. The Board has not declared any dividends since May 7, 2024. Future decisions to pay dividends are at the discretion of the Board and will depend upon operating performance and other factors.

As of MarchJune 28,27, 2026, the Company owned and operated 16 restaurants and bars, 12 fast food concepts and catering operations, exclusively in the United States, that have similar economic characteristics, nature of products and services, class of customers and distribution methods.States. The Company believes it meets the criteria for aggregating itsCompany’s operating components have been aggregated into aone singlereportable operatingsegment. segmentSee inNote accordance12 with— applicableSegment accountingInformation guidance.to the consolidated condensed financial statements.

Our fiscal year ends on the Saturday nearest September 30. We report fiscal years under a 52/53-week format. This reporting method is used by many companies in the hospitality industry and is meant to improve year-to-year comparisons of operating results. Under this method certain years will contain 53 weeks. The periods ended MarchJune 28,27, 2026 and MarchJune 29,28, 2025 each included 13 and 2639 weeks.

The Company has substantial fixed costs that do not decline proportionally with sales. Although our business is highly seasonal, our broader geographical reach mitigates some of this risk. For instance, the second quarter of our fiscal year, consisting of the non-holiday portion of the cold weather season in New York and Washington D.C. (January, February and March), is the poorest performing quarter; however, this is partially offset by our locations in Florida as they experience increased results in the winter months. We generally achieve our best results during the warmer weather, attributable to our extensive outdoor dining availability, particularly at the Bryant Park Grill andGrill, the Bryant Park Café and The Porch at Bryant Park in New York and Sequoia in Washington, D.C.D.C (our largest restaurants) and our outdoor cafes. However, even during summer months these facilities can be adversely affected by unusually cool or rainy weather conditions. Our facilities in Las Vegas are indoors and generally operate on a more consistent basis throughout the year, although in recent years the summer months have seen lower traffic.

Bryant Park Grill, the Bryant Park Café and The Porch at Bryant Park The Company’s lease agreements for the Bryant Park Grill,Grill and the Bryant Park Café expired on April 30, 2025 and for The Porch at Bryant Park expired in April 2025 andon March 2025,31, respectively.2025. In response to requests for proposals issued by the landlord in 2023, the Company submitted bids for new long-term agreements. In the second quarter of 2025, the landlord publicly announced the selection of a new operator for boththese locations; however, asto the best of theour date of this filing,knowledge, the required approvals from the City of New York Department of Parks & Recreation and the New York Public Library have not been obtained, and no new lease has become effective.

ManagementManagement, after consultation with legal counsel, is unable to predict the outcome of the litigationappeal or related proceedings at this time. The Bryant Park Grill, the Bryant Park Café and The Porch at Bryant Park represented a significant portion of the Company’s revenues, collectively accounting for approximately$17.1 13.3%million and 15.0%$19.7 million, or approximately 14.5% and 15.4%, of total revenuerevenues for the 2639 weeks ended MarchJune 28,27, 2026 and MarchJune 29,28, 2025, respectively. The ongoing uncertainty related to this dispute has had, and is expected to continue to have, a material adverse effectimpact on the Company’sour business, financial condition, and results of operationsoperations, whileand the matterloss remainsof unresolvedthese andoperations ifupon expiration of the Companystay, isor ultimatelythe unableCompany’s inability to otherwise retain these locations on favorable terms, or at all.all, would have a material adverse impact on our business, financial condition, and results of operations.

Historically, the Company has made rent payments related to the Bryant Park Grill and the Bryant Park Café based on prior year sales as required in the relevant agreements. As a result of the decline in sales due to the above litigation, such payments were in excess of the contractual minimums and were recorded as prepaid rent as they were expected to be applied against future lease obligations or otherwise recovered. However, basedBased on the status of ongoingthe legal proceedings, and in consultation with external legal counsel, management determined during the current period that the prepaid rent balance is not probable of recovery.recovery, As a result,and during the 13 weeks ended March 28, 2026, the Company recorded a charge of $566,000 to write off the amount of prepaid rent, which is included in occupancy expenses in the accompanying consolidated condensed statements of operations. Were the Company to prevail on appeal, it is possible these amounts could be recovered.

Investment in and Receivable From New Meadowlands Racetrack LLC ("NMR") NMR has been actively pursuing a full casino license (including slots and table games likesuch as blackjack and roulette) to supplement its existing horse racing and sports betting operations. In January 2026, the New Jersey Senate Government, Wagering, Tourism & Historic Preservation Committee proposed a constitutional amendment to allow the legislature to authorize casino gambling at both the Monmouth Park and Meadowlands Racetracks. Such an amendment will requirerequires a three-fifths vote in both legislative chambers followed by a voter referendum in a general election before becoming law. To date, noNo vote on this amendment hashad been scheduledtaken by the state legislature; however,as of the date of this filing, which is beyond the August 3, 2026 deadline for submission of proposed amendments to the State of New Jersey Constitution to be voted upon at the November 2026 general electionelection. isAs Augusta 3,result, the proposed amendment will not appear on the ballot, and no voter referendum on casino gaming at the Meadowlands will occur in 2026. The proposed amendment, or a similar amendment, may be placed on the ballot at a future general election, which could occur as early as November 2027 or in a subsequent general election; however, no assurance can be given as to whether or when the state legislature will approve such an amendment or a voter referendum will be held. If thisa referendum were toultimately happenheld and the voting results were favorable, NMR could possibly open a temporary gaming facility inwithin earlyapproximately 2027one year following voter approval and a permanent onefacility within approximately two years thereafter, subject to the issuance of a license by 2028.the New Jersey Casino Control Commission and completion of any required development.

The Company's operating loss of $141,000 for the 13 weeks ended MarchJune 28,27, 2026 (which includes a one-time, non-recurring prepaid rent write-off in the amount of $566,000 related to the Bryant Park Grill and the Bryant Park Café as discussed above) decreased 64.1%95.9% as compared to an operating loss of $3,415,000 in the same period of the prior year (which includes a lossgain on the closure of El Rio Grande in the amount of $140,000$178,000 and a goodwill impairment chargecharges of $3,440,000$2,940,000 and $1,760,000 related to Sequoia's ROU and long-lived assets, respectively). Excluding these items, theoperating results declined by $1,248,000, from adjusted operating lossincome of $1,091,000$1,107,000 for the 13 weeks ended MarchJune 28, 2026 decreased 17.2% as compared2025 to an adjusted operating loss of $1,317,000$141,000 for the 13 weeks ended MarchJune 29,27, 2025.2026.

The Company reported anCompany's operating loss of $563,000$704,000 for the 2639 weeks ended MarchJune 28,27, 2026 (which includes a one-time, non-recurring prepaid rent write-off in the amount of $566,000 related to the Bryant Park Grill and the Bryant Park Café as discussed above) decreased 69.9% as compared to an operating incomeloss of $1,073,000$2,342,000 in the same period of the prior year (which includes: (i) a lossgain on the closure of El Rio Grande of $5,000,$173,000, (ii) a gain on the termination of our Tampa Food Court lease of $5,235,000, (iii) impairment charges of $2,940,000 and $1,760,000 related to Sequoia's ROU and long-lived assets, respectively, and (iv) a goodwill impairment charge of $3,440,000), representing a period-over-period decrease of $1,636,000.. Excluding these items, operating results declined by $528,000, from adjusted operating income of $3,000$390,000 for the 2639 weeks ended MarchJune 28, 2026 as compared2025 to an adjusted operating loss of $717,000$138,000 for the 2639 weeks ended MarchJune 29,27, 2025, representing a period-over-period increase of $720,000.2026.

____________________________________________________________________________________________ (a) Represents a one-time, non-recurring charge to write off prepaid rent related to the Bryant Park Grill and the Bryant Park Café. See Note 8 — Commitments and Contingencies.

(b) Represents the gain recognized during the 13 weeks ended MarchJune 29,28, 2025 as a result of refinements of estimates related to final lease negotiations with the El Rio Grande landlord, partially offset by operating losses prior to closure incurred during the 26-week39-week period prior to closure.period.

(de) Represents a non-cash impairment charge to write off the remaining balance of goodwill during the 13 weeks ended March 29, 2025.

The following table summarizes the significant components of the Company’s operating results for the 13 weeks ended MarchJune 28,27, 2026 and MarchJune 29,28, 2025:

During the 13- and 26-week39-week periods ended MarchJune 28,27, 2026, revenues decreased 7.9%6.5% and 8.7%,8.0%, respectively, as compared to revenues for the 13- and 26-week39-week periods ended MarchJune 29,28, 2025. We attribute thisthese decreasedecreases primarily to the decreases in same-store sales discussed below andand, in the 39-week periods, the closures of El Rio Grande and the Tampa Food Court.

On a Company-wide basis, same-store sales decreased 7.6%6.6% during the 13 weeks ended MarchJune 28,27, 2026 as compared to the same period of last year as follows:

Same-store sales in Las Vegas decreased 6.6%,11.4%, which we attribute primarily to lower revenues at our America property as a result of partial closure for renovations. Same-store sales in New York decreased 12.3%,2.5%, which we attribute primarily to decreases in both catering andour a la carte revenue at the Bryant Park Grill and the Bryant Park Café as a result of the negative publicity related to our dispute with the landlord combined with an unusually cold and snowy winter in the northeast.landlord. Same-store sales in Washington, D.C. decreasedincreased 18.7%,4.6%, which we attribute primarily to lowerour headcountsevent as a result of decreased customer traffic at the complex where we are located.business. Same-store sales in Atlantic City, NJ decreasedincreased 10.8%,1.8%, which we attribute primarily to lowerbetter than expected customer traffic at the property where we are located. Same-store sales in Alabama increased 2.1%,1.5%, which we attribute primarily to better-than-expected customer traffic. Same-store sales in Florida decreased 8.3%,10.2%, which we attribute primarily to lower headcounts from increased competition.

On a Company-wide basis, same-store sales decreased 7.5%7.2% during the 2639 weeks ended MarchJune 28,27, 2026 as compared to the same period of last year as follows:

Same-store sales in Las Vegas decreased 6.5%,8.1%, which we attribute primarily to lower revenues at our America property as a result of partial closure for renovations and lower visitor counts in Las Vegas. Same-store sales in New York decreased 14.1%,10.0%, which we attribute primarily to decreases in both catering and a la carte revenue at the Bryant Park Grill and the Bryant Park Café as a result of the negative publicity related to our dispute with the landlord. Same-store sales in Washington, D.C. decreased 4.6%,0.7%, which we attribute primarily to lower headcounts as a result of decreased customer traffic at the complex where we are located.located partially offset by a strong event business in the current quarter. Same-store sales in Atlantic City, NJ decreased 12.7%,7.9%, which we attribute primarily to lower than expected customer traffic in the first two quarters at the property where we are located. Same-store sales in Alabama decreasedwere 1.1%,essentially whichflat, we attribute primarily to lower customer traffic in thewith first quarter as a result of economic pressures on the customers who frequent our propertiesweakness offset by better-than-expected customer traffic in the second quarter.and third quarters. Same-store sales in Florida decreased 6.4%,7.7%, which we attribute primarily to lower headcounts from increased competition. Other food and beverage sales consist of sales related primarily to properties that were closed.

Costs and expenses for the 13 and 2639 weeks ended MarchJune 28,27, 2026 and MarchJune 29,28, 2025 were as follows (in thousands):

Food and beverage costs as a percentage of total revenues for the 13 and 2639 weeks ended MarchJune 28,27, 2026 decreased as compared with the same period of last year as a result of targeted menu engineering.

Payroll expenses as a percentage of total revenues for the 13 weeks ended MarchJune 28,27, 2026 increased as compared with the same period of last year as a result of minimumlower wage increases.revenues. Payroll expenses as a percentage of total revenues for the 2639 weeks ended MarchJune 28,27, 2026 decreasedincreased as compared with the same period of last year as a result of lower revenues, partially offset by better shift management of related overtime hours and lower performance bonuses in the current year, partially offset by minimum wage increases.year.

Occupancy expenses as a percentage of total revenues for the 13 weeks ended MarchJune 28,27, 2026 increasedwere as comparedconsistent with the same period of last year primarily as a result of one-time, non-recurring prepaid rent write-off in the amount of $566,000 related to the Bryant Park Grill and the Bryant Park Café as discussed above.year. Occupancy expenses as a percentage of total revenues for the 2639 weeks ended MarchJune 28,27, 2026 increased as compared with the same period of last year primarily as a result of one-time, non-recurring prepaid rent write-off in the amount of $566,000 related to the Bryant Park Grill and the Bryant Park Café as discussed above partially offset by lower percentage rents as a result of the sales decreases discussed above.

Other operating costs and expenses as a percentage of total revenues for the 13 and 2639 weeks ended MarchJune 28,27, 2026 stayedincreased relatively consistentas compared to the same period of last year primarily as a result of higher costs attributable to inflation partially offset by implementing a credit card surcharge partially offset by higher costs as a result of inflation.surcharge.

General and administrative expenses (which relate solely to the corporate office in New York City and are relatively fixed) for the 13 and 2639 weeks ended MarchJune 28,27, 2026 decreased as compared to the same periods of last year primarily as a result of lower commissions and bonus accruals and lower consulting fees related to the Bryant Park Grill and the Bryant Park Café litigation.

Depreciation and amortization expense for the 13 and 2639 weeks ended MarchJune 28,27, 2026 decreased as compared to the same periods of last year primarily as a result of certain assets becoming fully depreciated and the removal of assets associated with the Tampa Food Court.

LossGain on Closure of El Rio Grande

In October 2024, the Company advised the landlord of El Rio Grande we would be terminating the lease and closing the property permanently. In connection with this notification, the Company recorded a loss of $876,000 during the year ended September 28, 2024. The property closed permanently on January 3, 2025 and was vacated and delivered to the landlord on April 30, 2025. During the 13 weeks ended MarchJune 29,28, 2025, the Company recognized a gain of $140,000$178,000 as a result of refinements of estimates related to final negotiations with the landlord.estimates. During the 2639 weeks ended MarchJune 29,28, 2025, the Company recognized a lossgain in the amount of $5,000$173,000 as a result of additional operating losses during the 13 weeks ended December 28, 2024 in the amount of $145,000 offset by the above refinements of estimates.

During the three13 monthsweeks ended March 29, 2025, the Company identified a triggering event in accordance with the Financial Accounting Standards Board (“FASB”), Accounting Standards UpdateCodification ("ASUASC") 350-20,Topic 350, “Intangibles—Goodwill and Other,” primarily related to a decline in the Company's stock price in the second quarter of fiscal 2025 and the continued uncertainty related to the expiration of the Bryant Park Grill, the Bryant Park Café and The Porch at Bryant Park leases (see Note 8 - Commitments and Contingencies). As a result, the Company performed an interim quantitative impairment test and based on the results of the assessment, the fair value of our equity was determined to be less than its carrying amount. Accordingly, the Company recognized a non-cash impairment charge of the remaining balance of its goodwill in the amount of $3,440,000 in our consolidated condensed statements of operations for the 13 and 26 weeks ended March 29, 2025. The Company did not record any impairment to its goodwill during the 13 and 2639 weeks ended MarchJune 28,27, 2026.

As of MarchJune 28,27, 2026, we had cash and cash equivalents of $11,487,000,$9,492,000, total debt of $7,553,000$7,117,000 (includingexcluding $5,000,000a outstanding$324,000 understand-by letter of credit in favor of the landlord for our revolvingcorporate credit facilityheadquarters) and a working capital deficit of $2,483,000$4,411,000 as compared with a working capital deficit of $5,377,000 at September 27, 2025. The Credit Agreement provides for maximum permitted obligations of $20,000,000, inclusive of all outstanding promissory notes. As of MarchJune 28,27, 2026, total obligations outstanding under the Credit Agreement were $7,553,000,$7,441,000, comprised of $5,000,000 in revolving borrowingsborrowings, a $2,117,000 outstanding note and $2,553,000a in$324,000 outstandingstand-by termletter notes.of credit. Accordingly, as of MarchJune 28,27, 2026, we had approximately $12,400,000$12,559,000 of additional borrowing capacity available under the Credit Agreement, subject to continued compliance with the financial covenants thereunder.

Other than the matters described above, including the status of the Bryant Park Grill, the Bryant Park Café and The Porch at Bryant Park and the amendment to the Sequoia lease, we are not aware of any other trends or events that would materially affect our capital requirements or liquidity. Based on our current operating plan and financial projections, we believe that our existing cash balances, internal cash-generating capabilities and cash equivalents, together with availability under our revolving credit facility,facility will beare sufficient to meetfinance our working capital requirements, capital expenditures, debt maturities and debtother serviceoperating obligationsactivities for at least the next twelve monthsmonths, including under scenarios in which we are required to cease operations at the Bryant Park locations upon the expiration of the stay; however, in such scenarios we may rely more heavily on borrowings under our revolving credit facility, and our liquidity could be adversely affected by, among other factors, the timing and outcome of the Bryant Park Grill and the Bryant Park Café and The Porch at Bryant Park lease dispute,appeal, compliance with the financial covenants under our creditCredit facility,Agreement, and general economic conditions impacting our operating results.

Cash Flows for 2639 Weeks Ended MarchJune 28,27, 2026 and MarchJune 29,28, 2025

Net cash providedused byin financingoperating activities for the 2639 weeks ended MarchJune 28,27, 2026 was $3,660,000$872,000 as compared to net cash usedprovided by financingoperating activities of $3,041,000$1,119,000 in the same period as last year. This increasedecrease resulted primarily from a $5,000,000decrease borrowingin underadjusted ouroperating revolving facilityincome and thean lower distribution payments to non-controlling interestsincrease in accounts receivable balances, reflecting the currenttiming period.of collections from hotel operators and credit card processors at period end.