CONSOLIDATION OF VARIABLE INTEREST ENTITIES

12 Months Ended

Oct. 01, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

CONSOLIDATION OF VARIABLE INTEREST ENTITIES

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:

	October 1, 2022		October 2, 2021
	(in thousands)
Cash and cash equivalents	$	834	$	785
Accounts receivable	140		358
Inventories	38		35
Prepaid and refundable income taxes	278		278
Prepaid expenses and other current assets	17		277
Due from Ark Restaurants Corp. and affiliates (1)	400		187
Fixed assets - net	212		218
Operating lease right-of-use assets - net	2,076		2,342
Other assets	11		82
Total assets	$	4,006	$	4,562
Accounts payable - trade	$	135	$	213
Accrued expenses and other current liabilities	417		374
Current portion of operating lease liabilities	272		249
Current portion of notes payable	—		95
Operating lease liabilities, less current portion	1,921		2,193
Notes payable, less current portion	—		101
Total liabilities	2,745		3,225
Equity of variable interest entities	1,261		1,337
Total liabilities and equity	$	4,006	$	4,562

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

The liabilities recognized as a result of consolidating these VIEs do not represent additional claims on the Company’s general assets; rather, they represent claims against the specific assets of the consolidated VIEs. Conversely, assets 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.