Ark Restaurants(ARKR) - 2025 Q3 - Quarterly Report

Filing Information This section provides key administrative details about the company's SEC filing, including stock registration and filer status Stock Registration Details | Title of each class | Trading symbol(s) | Name of each exchange on which registered | | :------------------ | :---------------- | :---------------------------------------- | | Common Stock, par value $.01 per share | ARKR | The NASDAQ Stock Market LLC | Filer Status Classification | Large accelerated filer | ☐ | Accelerated filer | ☐ | | :-------------------- | :-- | :---------------- | :-- | | Non-accelerated filer | ☒ | Smaller Reporting Company | ☒ | | Emerging Growth Company | ☐ | | | - As of August 8, 2025, there were 3,606,157 shares of the registrant's common stock outstanding[5] Special Note Regarding Forward-Looking Statements This section outlines forward-looking statements and inherent risks that could cause actual results to differ materially - The report contains forward-looking statements identified by words like "anticipates," "believes," "estimates," "expects," "intends," "plans," "predicts," "projects," "targets," "will likely result," "hopes," "will continue" or similar expressions[9] - Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially, including economic conditions, sales, labor costs, food product costs, weather, consumer preferences, and competition[9] - Key risk factors include the adverse impact of the current political climate and economic conditions (inflation) on operating results, debt compliance, and asset impairment; increases in food, beverage, supply, wage, and benefit costs; challenges in opening new restaurants; vulnerability to consumer preferences, local conditions, adverse weather, and natural disasters; lease renewal difficulties (specifically Bryant Park Grill & Cafe and The Porch at Bryant Park); negative publicity; food safety concerns; reliance on executive officers; and IT system security breaches[10] Part I. Financial Information This part presents the company's comprehensive financial statements and management's detailed analysis of its performance Item 1. Consolidated Condensed Financial Statements This section presents unaudited consolidated financial statements, including balance sheets, income, equity, and cash flows Consolidated Condensed Balance Sheets This section details the company's financial position, showing assets, liabilities, and equity at specific dates Consolidated Condensed Balance Sheets (In Thousands) | ASSETS | June 28, 2025 (unaudited) | September 28, 2024 (Note 1) | | :------------------------------------------ | :-------------------------- | :-------------------------- | | Cash and cash equivalents | $12,325 | $10,273 | | Total current assets | $19,942 | $18,225 | | Fixed assets - Net | $28,390 | $31,569 | | Operating lease right-of-use assets - Net | $74,863 | $84,977 | | Goodwill | $— | $3,440 | | Total Assets | $136,340 | $156,041 | | LIABILITIES AND EQUITY | | | | Total current liabilities | $22,709 | $28,884 | | Operating lease liabilities, less current portion | $77,427 | $83,516 | | Notes payable, less current portion, net | $2,015 | $— | | Total Liabilities | $102,151 | $112,400 | | Total Equity | $34,189 | $43,641 | | Total Liabilities and Equity | $136,340 | $156,041 | - Goodwill decreased from $3,440 thousand to $0, indicating a full impairment during the period[16] - Total assets decreased by $19,701 thousand, and total liabilities decreased by $10,249 thousand from September 28, 2024, to June 28, 2025[16] Consolidated Condensed Statements of Operations This section details the company's financial performance, showing revenues, expenses, and net income or loss Consolidated Condensed Statements of Operations (In Thousands, Unaudited) | Item | 13 Weeks Ended June 28, 2025 | 13 Weeks Ended June 29, 2024 | 39 Weeks Ended June 28, 2025 | 39 Weeks Ended June 29, 2024 | | :------------------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total revenues | $43,715 | $50,396 | $128,428 | $140,139 | | Total costs and expenses | $47,130 | $49,572 | $130,770 | $138,914 | | Operating income (loss) | $(3,415) | $824 | $(2,342) | $1,225 | | Income (loss) before income taxes | $(3,114) | $686 | $(2,245) | $1,088 | | Provision (benefit) for income taxes | $81 | $(213) | $5,019 | $(202) | | Consolidated net income (loss) | $(3,195) | $899 | $(7,264) | $1,290 | | Net income (loss) attributable to Ark Restaurants Corp. | $(3,454) | $640 | $(9,548) | $561 | | Basic EPS | $(0.96) | $0.18 | $(2.65) | $0.16 | | Diluted EPS | $(0.96) | $0.18 | $(2.65) | $0.15 | - The Company reported a significant operating loss of $(3,415) thousand for the 13 weeks ended June 28, 2025, compared to an operating income of $824 thousand in the prior year period, a 514.4% decrease[17] - For the 39 weeks ended June 28, 2025, total revenues decreased by 8.4% to $128,428 thousand, and the Company incurred a net loss attributable to Ark Restaurants Corp. of $(9,548) thousand, a substantial decline from a net income of $561 thousand in the prior year[17] Consolidated Condensed Statements of Changes in Equity This section tracks changes in the company's equity, reflecting net income, stock transactions, and distributions Consolidated Condensed Statements of Changes in Equity (In Thousands) | Item | Balance - September 28, 2024 | Net income (loss) | Exercise of stock options | Stock-based compensation activity | Distributions to non-controlling interests | Balance - June 28, 2025 | | :-------------------------------- | :-------------------------- | :---------------- | :------------------------ | :-------------------------------- | :--------------------------------------- | :-------------------------- | | Total Ark Restaurants Corp. Shareholders' Equity | $44,137 | $(9,548) | $21 | $60 | $— | $34,670 | | Non-controlling Interests | $(496) | $2,284 | $— | $— | $(2,269) | $(481) | | Total Equity | $43,641 | $(7,264) | $21 | $60 | $(2,269) | $34,189 | - Total Ark Restaurants Corp. shareholders' equity decreased from $44,137 thousand at September 28, 2024, to $34,670 thousand at June 28, 2025, primarily due to the net loss incurred[19] - For the 39 weeks ended June 29, 2024, dividends paid amounted to $2,028 thousand, and distributions to non-controlling interests were $1,158 thousand[21] Consolidated Condensed Statements of Cash Flows This section summarizes cash flows from operating, investing, and financing activities over specific periods Consolidated Condensed Statements of Cash Flows (In Thousands, Unaudited) | Item | 39 Weeks Ended June 28, 2025 | 39 Weeks Ended June 29, 2024 | | :------------------------------------------ | :-------------------------- | :-------------------------- | | Net cash provided by operating activities | $1,119 | $3,926 | | Net cash provided by (used in) investing activities | $4,662 | $(1,204) | | Net cash used in financing activities | $(3,729) | $(4,670) | | Net increase (decrease) in cash and cash equivalents | $2,052 | $(1,948) | | Cash and cash equivalents, End of period | $12,325 | $11,467 | - Net cash provided by operating activities decreased significantly from $3,926 thousand in 2024 to $1,119 thousand in 2025[22] - Net cash provided by investing activities saw a substantial increase to $4,662 thousand in 2025, primarily due to a $5,500 thousand payment from the termination of the Tampa Food Court lease and $829 thousand from condominium sales[22] Notes to Consolidated Condensed Financial Statements This section provides detailed explanations and additional information supporting the consolidated financial statements 1. Basis of Presentation and Significant Accounting Policies This note outlines accounting principles, presentation methods, and key factors influencing financial reporting - The financial statements are prepared in accordance with GAAP for interim financial information and SEC rules, condensing or omitting certain disclosures[23] - Operating results in fiscal 2025 continued to be impacted by supply chain challenges and increased commodity and wage inflation, which could lead to further shifts in consumer behavior, staffing challenges, and potential asset impairments[24] - The Company's business is highly seasonal, with the second fiscal quarter (January-March) typically being the poorest performing, partially offset by Florida locations; best results are generally achieved in warmer weather due to outdoor dining, but these can be affected by adverse weather[28] - As of June 28, 2025, the Company operates 16 restaurants and bars, 12 fast food concepts, and catering operations, aggregated into a single operating segment[44] 2. Recent Restaurant Expansion and Other Developments This note details recent lease extensions, renovation commitments, and new concept openings impacting the portfolio - The Company extended its lease for America at the New York-New York Hotel and Casino in Las Vegas, NV, through December 31, 2033, with a commitment to spend a minimum of $4,000,000 on premises refresh by December 31, 2025; approximately $400,000 has been spent to date, with completion expected by February 28, 2026[51] - Leases for Village Eateries, Broadway Burger Bar and Grill, and Gonzalez y Gonzalez in Las Vegas were extended through December 31, 2034 (or 2033 for the latter two), with a $3,500,000 refresh commitment by December 31, 2025; a new concept, Lucky Pig, opened in November 2024 at a cost of $700,000, and an additional $750,000 has been spent on other refreshes[52] 3. Recent Restaurant Dispositions and Other Developments This note describes recent restaurant closures, lease terminations, and asset sales, including associated gains - El Rio Grande closed permanently on January 3, 2025; the Company recognized a gain of $178,000 for the 13 weeks ended June 28, 2025, and $173,000 for the 39 weeks ended June 28, 2025, due to refinements of estimates related to its closure[53] - The lease for the food court at The Hard Rock Hotel and Casino in Tampa, FL, was terminated on November 26, 2024; the Company received a termination payment of $5,500,000 and recorded a net gain of $5,235,000 during the 13 weeks ended December 28, 2024[54] - The Company sold two condominium units at Island Beach Resort in Jensen Beach, FL, for net proceeds of $829,000, recording a gain of $391,000 during the 13 weeks ended June 28, 2025; the Company plans to sell all remaining units[55] 4. Investment in and Receivable from New Meadowlands Racetrack This note details the company's investment and loan to New Meadowlands Racetrack, including ownership and rights - The Company's total investment in New Meadowlands Racetrack LLC (NMR) reached $5,256,000 as of May 13, 2025, with an additional $148,000 investment made during the period[56] - The Company holds an effective ownership interest of 7.4% in NMR and has the exclusive right to operate food and beverage concessions in the gaming facility if casino gaming is approved[59] - A loan of $1,500,000 to Meadowlands Newmark, LLC, with 3% compounded monthly interest, is due June 30, 2029; the principal and accrued interest totaled $1,476,000 as of June 28, 2025[62] 5. Accrued Expenses and Other Current Liabilities This note provides a breakdown of short-term financial obligations, including sales tax, wages, and customer deposits Accrued Expenses and Other Current Liabilities (In Thousands) | Item | June 28, 2025 | September 28, 2024 | | :-------------------------------- | :------------ | :----------------- | | Sales tax payable | $820 | $761 | | Accrued wages and payroll related costs | $3,605 | $4,548 | | Customer advance deposits | $2,736 | $4,382 | | Accrued occupancy and other operating expenses | $3,074 | $2,354 | | Total | $10,235 | $12,045 | - Total accrued expenses and other current liabilities decreased by $1,810 thousand from September 28, 2024, to June 28, 2025, primarily due to decreases in accrued wages and customer advance deposits[63] 6. Leases This note details the company's lease agreements, including lease expenses, weighted average terms, and discount rates - The Company leases restaurant locations and its corporate office under non-cancelable real estate lease agreements expiring through 2046, all classified as operating leases[64][65] Components of Lease Expense (In Thousands) | Item | 13 Weeks Ended June 28, 2025 | 13 Weeks Ended June 29, 2024 | 39 Weeks Ended June 28, 2025 | 39 Weeks Ended June 29, 2024 | | :------------------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Operating lease expense - occupancy expenses | $3,289 | $3,471 | $9,964 | $10,394 | | Variable lease expense - occupancy expenses | $775 | $994 | $2,730 | $3,118 | | Total lease expense | $4,185 | $4,584 | $13,057 | $13,875 | Weighted Average Lease Terms and Discount Rates | Item | June 28, 2025 | September 28, 2024 | | :-------------------------------- | :------------ | :----------------- | | Weighted average remaining lease term | 11.1 years | 11.5 years | | Weighted average discount rate | 6.3 % | 6.3 % | 7. Notes Payable This note outlines the company's promissory notes and the terms of its credit agreement with Bank Hapoalim B.M Notes Payable (In Thousands) | Item | June 28, 2025 | September 28, 2024 | | :------------------------------------------ | :------------ | :----------------- | | Promissory Note - Rustic Inn purchase | $2,403 | $2,617 | | Promissory Note - JB's on the Beach purchase | $1,000 | $1,750 | | Promissory Note - Sequoia renovation | $456 | $800 | | Promissory Note - Blue Moon Fish Company | $— | $68 | | Total | $3,859 | $5,235 | | Less: Current maturities | $(1,742) | $(5,193) | | Long-term portion | $2,015 | $— | - The Company's Credit Agreement with Bank Hapoalim B.M. (BHBM) was extended to June 1, 2028, and the maximum permitted obligations were reduced from $30,000,000 to $20,000,000; the minimum tangible net worth covenant increased from $22,000,000 to $28,000,000, and the annual net income covenant was removed[70] - As of June 28, 2025, no advances were outstanding under the Credit Agreement, and the weighted average interest on outstanding BHBM indebtedness was approximately 8.0%[70] 8. Commitments and Contingencies This note discusses ongoing legal disputes, particularly concerning Bryant Park leases, and other potential obligations - The Company is involved in a legal dispute regarding the leases for Bryant Park Grill & Cafe and The Porch at Bryant Park, which expired on April 30, 2025, and March 31, 2025, respectively; the Landlord selected a new operator, but the Company filed a lawsuit alleging a defective bid process and age discrimination[78][79] - The Bryant Park locations collectively accounted for $19.7 million (15.4%) and $23.3 million (16.7%) of total revenues for the 39 weeks ended June 28, 2025, and June 29, 2024, respectively; the inability to extend these leases could have a material adverse effect on the Company's business[81] - Management believes that the ultimate resolution of various lawsuits (accidents, workers' compensation, employment discrimination) will not have a material adverse effect on the Company's financial position[77] 9. Stock Options This note provides details on stock option grants, activity, and associated compensation costs for reporting periods - On December 2, 2024, options to purchase 10,000 shares of common stock were granted at an exercise price of $9.99 per share, with a grant date fair value of $2.94 per share, totaling approximately $29,000[83] Stock Option Activity (2025) | Item | Shares | Weighted Average Exercise Price | | :-------------------------------- | :----- | :------------------------------ | | Outstanding, beginning of period | 415,750 | $17.89 | | Granted | 10,000 | $9.99 | | Exercised | (2,000) | $10.65 | | Canceled or expired | (17,000) | $18.84 | | Outstanding and expected to vest, end of period | 406,750 | $17.45 | | Exercisable, end of period | 319,875 | $18.52 | | Shares available for future grant | 360,000 | | - Compensation cost for stock-based programs was approximately $32,000 for the 13 weeks ended June 28, 2025 (down from $51,000 in 2024), and $114,000 for the 39 weeks ended June 28, 2025 (down from $196,000 in 2024)[86] 10. Income Taxes This note explains the company's income tax provision, effective tax rates, and factors influencing tax liabilities - The provision for income taxes for the 13 weeks ended June 28, 2025, was $81,000, with an effective tax rate of 2.6%, differing from the federal statutory rate of 21% due to no tax benefit on current year pre-tax operating losses[89] - For the 39 weeks ended June 28, 2025, the provision for income taxes was $5,019,000, with an effective tax rate of 223.6%, primarily due to a discrete tax provision of $4,799,000 as net deferred tax assets were deemed no longer realizable[89] - The income tax benefit for the 39 weeks ended June 29, 2024, was ($202,000), with an effective tax rate of 18.6%, influenced by FICA tax credits, non-controlling interest income, and PPP Loan forgiveness[90] 11. Income Per Share of Common Stock This note reconciles shares used in calculating basic and diluted earnings per share, including dilutive securities Reconciliation of Shares Used in Calculating EPS (In Thousands) | Item | 13 Weeks Ended June 28, 2025 | 13 Weeks Ended June 29, 2024 | 39 Weeks Ended June 28, 2025 | 39 Weeks Ended March 30, 2024 | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Basic | 3,605 | 3,604 | 3,605 | 3,604 | | Effect of dilutive securities: Stock options | — | 23 | — | 24 | | Diluted | 3,605 | 3,627 | 3,605 | 3,628 | - For the 13- and 39-week periods ended June 28, 2025, the dilutive effect of 396,750 options was not included in diluted EPS calculations as their impact would be anti-dilutive[94] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses financial condition and results, analyzing performance drivers, recent developments, and inflation impact Recent Developments This section highlights key events, including the Bryant Park lease dispute and its potential financial implications - The Company is actively litigating to extend its leases for Bryant Park Grill & Cafe and The Porch at Bryant Park, which expired in April and March 2025, respectively; the Landlord selected a new operator, but the Company alleges a defective bid process and age discrimination[98][99] - The Bryant Park locations generated $19.7 million (15.4% of total revenues) for the 39 weeks ended June 28, 2025, and $23.3 million (16.7% of total revenues) for the 39 weeks ended June 29, 2024; loss of these leases could materially impact the Company's financial results[101][102] Inflation and Other Matters This section addresses macroeconomic events like inflation, their impact on operations, and potential mitigation - Operating results continue to be impacted by geopolitical and macroeconomic events, leading to increased commodity prices, wage inflation, and other costs[103] - Potential future impacts include shifts in consumer behavior, staffing challenges, supply chain disruptions, and delays in restaurant openings/acquisitions; mitigation actions, such as dividend suspension or increased borrowings, may be necessary and could lead to asset impairments[103] Overview This section provides a brief description of the company's business, including its restaurant portfolio and operating segment - As of June 28, 2025, the Company owned and operated 16 restaurants and bars, 12 fast food concepts, and catering operations exclusively in the United States, all aggregated into a single operating segment[104] Accounting Period This section explains the company's fiscal year-end and its 52/53-week accounting format for consistent comparisons - The Company's fiscal year ends on the Saturday nearest September 30, using a 52/53-week format to improve year-to-year comparisons[105] Seasonality This section describes the seasonal nature of the company's business, with varying performance across fiscal quarters - The business is highly seasonal with substantial fixed costs; the second fiscal quarter (January-March) is typically the poorest, while warmer weather months, especially at outdoor dining locations like Bryant Park and Sequoia, yield the best results[106] Results of Operations This section summarizes the company's financial performance, highlighting operating income or loss and key variances - Operating loss for the 13 weeks ended June 28, 2025, was $(3,415) thousand, a 514.4% decrease from operating income of $824 thousand in the prior year, primarily due to increased impairment charges[107][109] - For the 39 weeks ended June 28, 2025, operating loss was $(2,342) thousand, a 291.2% decrease from operating income of $1,225 thousand in the prior year, driven by significant impairment charges and a goodwill impairment[108][109] Operating Results Summary (In Thousands) | Item | 13 Weeks Ended June 28, 2025 | 13 Weeks Ended June 29, 2024 | Variance ($) | Variance (%) | 39 Weeks Ended June 28, 2025 | 39 Weeks Ended June 29, 2024 | Variance ($) | Variance (%) | | :------------------------------------------ | :-------------------------- | :-------------------------- | :----------- | :----------- | :-------------------------- | :-------------------------- | :----------- | :----------- | | Total revenues | $43,715 | $50,396 | $(6,681) | -13.3 % | $128,428 | $140,139 | $(11,711) | -8.4 % | | Total costs and expenses | $47,130 | $49,572 | $(2,442) | -4.9 % | $130,770 | $138,914 | $(8,144) | -5.9 % | | OPERATING INCOME (LOSS) | $(3,415) | $824 | $(4,239) | -514.4 % | $(2,342) | $1,225 | $(3,567) | -291.2 % | Revenues This section analyzes the drivers behind changes in total revenues, including same-store sales and restaurant closures - Total revenues decreased by 13.3% for the 13 weeks ended June 28, 2025, and by 8.4% for the 39 weeks ended June 28, 2025, primarily due to decreases in same-store sales and the closures of El Rio Grande and the Tampa Food Court[110] Food and Beverage Same-Store Sales This section provides a detailed breakdown of same-store sales performance across different geographic locations Company-wide Same-Store Sales Variance (13 Weeks Ended June 28, 2025 vs. June 29, 2024) | Location | Sales (2025) | Sales (2024) | Variance ($) | Variance (%) | | :--------------- | :----------- | :----------- | :----------- | :----------- | | Las Vegas | $13,225 | $13,532 | $(307) | -2.3 % | | New York | $8,273 | $10,455 | $(2,182) | -20.9 % | | Washington, D.C. | $2,515 | $3,178 | $(663) | -20.9 % | | Atlantic City, NJ | $595 | $734 | $(139) | -18.9 % | | Alabama | $5,333 | $5,690 | $(357) | -6.3 % | | Florida | $12,801 | $12,575 | $226 | 1.8 % | | Same-store sales | $42,742 | $46,164 | $(3,422) | -7.4 % | - Same-store sales in New York decreased 20.9% due to reduced catering and a la carte revenue at Bryant Park Grill, attributed to negative publicity from the landlord dispute[112] - Washington, D.C. same-store sales decreased 20.9% due to lower headcounts from hybrid work schedules, government layoffs, and elevated crime rates[112] Company-wide Same-Store Sales Variance (39 Weeks Ended June 28, 2025 vs. June 29, 2024) | Location | Sales (2025) | Sales (2024) | Variance ($) | Variance (%) | | :--------------- | :----------- | :----------- | :----------- | :----------- | | Las Vegas | $41,479 | $42,175 | $(696) | -1.7 % | | New York | $23,474 | $26,188 | $(2,714) | -10.4 % | | Washington, D.C. | $5,907 | $7,079 | $(1,172) | -16.6 % | | Atlantic City, NJ | $1,825 | $2,052 | $(227) | -11.1 % | | Alabama | $12,076 | $12,334 | $(258) | -2.1 % | | Florida | $39,141 | $38,355 | $786 | 2.0 % | | Same-store sales | $123,902 | $128,183 | $(4,281) | -3.3 % | Costs and Expenses This section analyzes cost categories as a percentage of total revenues, including food, payroll, and impairment losses Costs and Expenses as % of Total Revenues (13 & 39 Weeks Ended June 28, 2025 vs. June 29, 2024) | Expense Category | 13 Weeks 2025 (% of Rev) | 13 Weeks 2024 (% of Rev) | 39 Weeks 2025 (% of Rev) | 39 Weeks 2024 (% of Rev) | | :------------------------------------------ | :----------------------- | :----------------------- | :----------------------- | :----------------------- | | Food and beverage cost of sales | 27.6 % | 26.4 % | 27.8 % | 26.8 % | | Payroll expenses | 35.0 % | 34.7 % | 35.9 % | 35.7 % | | Occupancy expenses | 12.5 % | 12.4 % | 13.3 % | 13.1 % | | Other operating costs and expenses | 13.8 % | 12.5 % | 13.6 % | 13.0 % | | General and administrative expenses | 6.5 % | 5.3 % | 7.2 % | 6.5 % | | Depreciation and amortization | 2.2 % | 2.0 % | 1.9 % | 2.3 % | | Impairment losses on right-of-use and long-lived assets | 10.8 % | 5.0 % | 3.7 % | 1.8 % | | Goodwill impairment | — % | — % | 2.7 % | — % | - Food and beverage costs as a percentage of total revenues increased due to higher commodity prices and weaker event business in New York City and Washington, D.C[114] - Impairment losses on right-of-use and long-lived assets at the Sequoia property totaled $4,700,000 for the 39 weeks ended June 28, 2025, an increase from $2,500,000 in the prior year, due to lower than expected operating results[123] - A non-cash goodwill impairment charge of $3,440,000 was recognized for the 39 weeks ended June 28, 2025, triggered by a decline in stock price and uncertainty regarding the Bryant Park leases[125] Liquidity and Capital Resources This section assesses the company's ability to meet financial obligations, including cash position and credit facilities - Cash and cash equivalents stood at $12,325,000 as of June 28, 2025; the working capital deficit decreased from $10,659,000 at June 29, 2024, to $2,767,000 at June 28, 2025, driven by the Tampa Food Court lease termination payment, amended notes payable due dates, and condominium sales proceeds[128] - Net cash provided by operating activities decreased to $1,119,000 for the 39 weeks ended June 28, 2025, from $3,926,000 in the prior year, primarily due to a decrease in operating income excluding specific gains and impairments[131] - The Credit Agreement with Bank Hapoalim B.M. was extended to June 1, 2028, with the maximum permitted obligations reduced to $20,000,000 and the minimum tangible net worth covenant increased to $28,000,000[134] - A valuation allowance of $4,799,000 was recorded against net deferred tax assets as of March 29, 2025, due to the Company being in a cumulative loss position, primarily from the goodwill impairment[137] - Management believes existing cash, internal cash generation, current banking facilities, and ability to secure additional financing are sufficient for capital expenditures, debt maturities, and operating activities for at least the next 12 months, excluding the potential material impact of losing the Bryant Park leases[142] Critical Accounting Estimates This section identifies key accounting judgments and assumptions that significantly impact the financial statements - Critical accounting estimates include projected cash flows for fixed asset impairments, allowances for bad debts, discount rates for lease accounting, useful lives and recoverability of long-lived assets, fair values of financial instruments, and the realizable value of tax assets[143] Item 3. Quantitative and Qualitative Disclosures about Market Risk This section states that there are no applicable quantitative and qualitative disclosures about market risk for the Company - Not Applicable[145] Item 4. Controls and Procedures This section confirms the effectiveness of disclosure controls and procedures, with no material changes in internal control - Management, including the principal executive officer and principal financial officer, concluded that the Company's disclosure controls and procedures were effective as of June 28, 2025[146] - There have been no material changes in internal control over financial reporting during the third quarter of fiscal 2025[147] - A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that objectives are met due to inherent limitations[148] Part II. Other Information This part covers miscellaneous disclosures not included in the financial statements, such as legal proceedings and exhibits Item 1. Legal Proceedings This section refers to Note 8 for information regarding legal proceedings, primarily the Bryant Park leases dispute - Information regarding legal proceedings is incorporated by reference from Note 8 - Commitments and Contingencies to the Consolidated Condensed Financial Statements[151] Item 1A. Risk Factors This section indicates that there are no new or updated risk factors to report for this quarterly period - Not Applicable[152] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section states that there were no unregistered sales of equity securities or use of proceeds to report - None[153] Item 3. Defaults upon Senior Securities This section indicates that there were no defaults upon senior securities to report - None[154] Item 4. Mine Safety Disclosures This section states that mine safety disclosures are not applicable to the Company - Not Applicable[155] Item 5. Other Information This section provides information on insider trading arrangements, noting no new Rule 10b5-1 plans in Q3 2025 - During the third quarter of 2025, none of the Company's directors or executive officers adopted or terminated Rule 10b5-1 trading plans or non-Rule 10b5-1 trading arrangements[156] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including credit agreement amendments and certifications - Key exhibits include the Omnibus Amendment (10.1), CEO and CFO certifications (31.1, 31.2, 32), and various XBRL documents (101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE, 104)[158] Signatures This section contains the required signatures for the Form 10-Q, confirming its submission by executive officers - The report was signed on August 12, 2025, by Michael Weinstein, Chairman of the Board and Chief Executive Officer, and Anthony J. Sirica, President, Chief Financial Officer and Director[160][161]