VARIABLE INTEREST ENTITIES

9 Months Ended

Jun. 30, 2012

Variable Interest Entity, Similar Entity Aggregation, Description

2. VARIABLE INTEREST ENTITIES

Upon adoption of the new accounting guidance for VIEs on October 3, 2010, the Company determined that it is the primary beneficiary of two VIEs which had not been previously consolidated, Ark Hollywood/Tampa Investment, LLC and Ark Connecticut Investment, LLC, as the new guidance requires that a single party (including its related parties and de facto agents) be able to exercise their rights to remove the decision maker in order for the “kick-out” rights to be considered substantive. Previously, a simple majority of owners that could exercise kick-out rights was considered a substantive right. This change resulted in the need for consolidation.

The assets and liabilities associated with the Company’s consolidation of VIEs are as follows:

	June 30, 2012		October 1, 2011
	(in thousands)
Cash and cash equivalents	$	700	$	852
Accounts receivable		1,792		1,423
Inventories		25		23
Prepaid income taxes		251		244
Prepaid expenses and other current assets		9		9
Due from Ark Restaurants Corp. and affiliates (1)		269		410
Fixed assets, net		3,311		3,660
Other long-term assets		73		71
Total assets	$	6,430	$	6,692
Accounts payable	$	354	$	565
Accrued expenses and other current liabilities		2,763		2,076
Total liabilities		3,117		2,641
Equity of variable interest entities		3,313		4,051
Total liabilities and equity	$	6,430	$	6,692

(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 our 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 our general assets.

For the 13-week and 39-week periods ended June 30, 2012, aggregate revenues relating to these VIEs were $5,873,000 and $17,087,000, respectively. For the 13-week and 39-week periods ended July 2, 2011, aggregate revenues relating to these VIEs were $5,895,000 and $16,595,000, respectively. For the 13-week and 39-week periods ended June 30, 2012, aggregate costs and expenses relating to these VIEs were $5,085,000 and $13,621,000, respectively. For the 13-week and 39-week periods ended July 2, 2011, aggregate costs and expenses relating to these VIEs were $4,665,000 and $13,188,000, respectively. All of the above are included in the accompanying Consolidated Condensed Statements of Operations.