CONSOLIDATION OF VARIABLE INTEREST ENTITIES

12 Months Ended

Sep. 28, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

CONSOLIDATION OF VARIABLE INTEREST ENTITIES

The Company consolidates any variable interest entities in which it holds a variable interest and is the primary beneficiary. Generally, a variable interest entity, or VIE, is an entity with one or more of the following characteristics: (a) the total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support; (b) as a group the holders of the equity investment at risk lack (i) the ability to make decisions about an entity’s activities through voting or similar rights, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity; or (c) the equity investors have voting rights that are not proportional to their economic interests and substantially all of the entity’s activities either involve, or are conducted on behalf of, an investor that has disproportionately few voting rights. The primary beneficiary of a VIE is generally the entity that has (a) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, and (b) the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE.

The Company has determined that it is the primary beneficiary of three VIEs and, accordingly, consolidates the financial results of these entities. Following are the required disclosures associated with the Company’s consolidated VIEs:


	September 28, 2024		September 30, 2023
	(in thousands)
Cash and cash equivalents	$	292	$	564
Accounts receivable	44		169
Inventories	40		47
Prepaid and refundable income taxes	—		204
Prepaid expenses and other current assets	29		31
Due from (to) Ark Restaurants Corp. and affiliates (1)	(124)		58
Fixed assets - net	—		216
Operating lease right-of-use assets - net	—		1,796
Other assets	11		11
Total assets	$	292	$	3,096

Accounts payable - trade	$	86	$	93
Accrued expenses and other current liabilities	794		331
Current portion of operating lease liabilities	—		298
Operating lease liabilities, less current portion	—		1,623
Total liabilities	880		2,345
Equity of variable interest entities	(588)		751
Total liabilities and equity	$	292	$	3,096

(1)Amounts due from Ark Restaurants Corp. and affiliates are eliminated upon consolidation.

The liabilities of $880,000 and $2,345,000 at September 28, 2024 and September 30, 2023, respectively, recognized as a result of consolidating these VIEs do not represent additional claims on the Company’s general assets and creditors of the VIEs do not have recourse to the general credit of the Company; rather, they represent claims against the specific assets of the consolidated VIEs. Conversely, the assets of $292,000 and $3,096,000 at September 28, 2024 and September 30, 2023, respectively, recognized as a result of consolidating these VIEs do not represent additional assets that could be used to satisfy claims against the Company’s general assets; rather, these assets can be used only to settle obligations of the three VIEs (see Note 4 - Recent Restaurant Dispositions).