3.	RECENT RESTAURANT EXPANSION

On October 22, 2015, the Company, through its wholly-owned subsidiaries, Ark Shuckers, LLC and Ark Shuckers Real Estate, LLC, acquired the assets of Shuckers Inc. (“Shuckers”), a restaurant and bar located at the Island Beach Resort in Jensen Beach, FL, and six condominium units (four of which house the restaurant and bar operations). In addition, Ark Island Beach Resort LLC, a wholly-owned subsidiary of the Company, acquired Island Beach Resort Inc., a management company that administers a rental pool of certain condominium units under lease. The total purchase price was $5,717,000. The acquisition is accounted for as a business combination and was financed with a bank loan in the amount of $5,000,000 and cash from operations. The fair values of the assets acquired were allocated as follows:

Inventory	$	67,000
Commercial condominium units		3,584,800
Residential condominium units		263,000
Furniture, fixtures and equipment		240,000
Trademarks		390,000
Customer list		90,000
Goodwill		1,082,200

	$	5,717,000

The Consolidated Statement of Income for the year ended October 1, 2016 includes revenues and operating income of approximately $4,763,000 and $523,000, respectively, related to Shuckers. Transaction costs incurred in the amount of approximately $170,000 are included in general and administrative expenses in the Consolidated Statement of Income for the year ended October 1, 2016. The Company expects the Goodwill and indefinite life Trademarks to be deductible for tax purposes.

On November 30, 2016, the Company, through newly formed, wholly-owned subsidiaries, acquired the assets of the Original Oyster House, Inc., a restaurant and bar located in the City of Gulf Shores, Baldwin County, Alabama and the related real estate and an adjacent retail shopping plaza and the Original Oyster House II, Inc., a restaurant and bar located in the City of Spanish Fort, Baldwin County, Alabama and the related real estate. The total purchase price was for $10,750,000 plus inventory of approximately $293,000. The acquisition is accounted for as a business combination and was financed with a bank loan from the Company’s existing lender in the amount of $8,000,000 and cash from operations. The fair values of the assets acquired, none of which are amortizable, were allocated as follows (amounts in thousands):

Inventory	$	293
Land and buildings		6,650
Furniture, fixtures and equipment		395
Trademarks		1,720
Goodwill		1,985

	$	11,043

The Consolidated Statement of Income for the year ended September 30, 2017 includes revenues and income of approximately $5,322,000 and $11,804,000 and $684,000 and $1,243,000, respectively, related to the Shuckers and Oyster House properties. The years ended September 30, 2017 and October 1, 2016 include revenues and income (loss) of approximately $4,409,000 and ($2,759,000) and $10,078,000 and $1,156,000, respectively, related to Sequoia which was closed from January 4, 2017 through June 23, 2017. The unaudited pro forma financial information set forth below is based upon the Company’s historical Consolidated Statements of Income for the years ended September 30, 2017 and October 1, 2016 and includes the results of operations for Shuckers and the Oyster House properties for the periods prior to acquisition. The unaudited pro forma financial information is presented for informational purposes only and may not be indicative of what actual results of operations would have been had the acquisition of Shuckers and the Oyster House properties occurred on the dates indicated, nor does it purport to represent the results of operations for future periods.

	Year Ended
	September 30, 2017		October 1, 2016
	(unaudited)		(unaudited)

Total revenues	$	155,690	$	164,402
Net income	$	4,246	$	6,643
Net income per share - basic	$	1.24	$	1.94
Net income per share - diluted	$	1.20	$	1.89

Basic		3,424		3,418
Diluted		3,531		3,507