ARK RESTAURANTS CORPARKR

ARK RESTAURANTS CORP Goodwill & Intangibles Disclosure

10-KFiled Dec 18, 20253 min read
GOODWILL, TRADEMARKS AND INTANGIBLE ASSETS
Goodwill and Trademarks
The changes in the carrying amount of goodwill and trademarks for the years ended September 27, 2025 and September 28, 2024 are as follows:
GoodwillTrademarks
(in thousands)
Balance as of September 30, 2023$7,440 $4,220 
Acquired during the year— — 
Impairment charge (1)(4,000)— 
Balance as of September 28, 20243,440 4,220 
Acquired during the year— — 
Impairment charge (1)(3,440)— 
Balance as of September 27, 2025$— $4,220 
(1) Accumulated impairment losses as of September 27, 2025 and September 28, 2024 were $17,440,000 and $14,000,000, respectively.
In accordance with ASU 350-20, Intangibles—Goodwill and Other, the Company identified a triggering event during the three months ended March 29, 2025 primarily related to a decline in the Company's stock price during the second quarter of fiscal 2025 and the continued uncertainty related to the expiration of the Bryant Park Grill & Café and The Porch at Bryant Park leases (see Note 10 - Commitments and Contingencies). As a result, the Company performed an interim quantitative impairment test and based on the results of the assessment, the fair value of our equity was determined to be less than its carrying amount. Accordingly, the Company recognized a non-cash impairment charge of the remaining balance of its goodwill in the amount of $3,440,000 in our consolidated statement of operations for the year ended September 27, 2025.
As of September 28, 2024, the Company performed a qualitative assessment of its goodwill whereby the fair value of the equity was determined using the income approach. Given the relatively low volume of shares traded as of September 28, 2024, the Company determined the income approach provided the best approximation of fair value. In the income approach, we utilized a discounted cash flow analysis, which involved estimating the expected future after-tax cash flows generated and then discounting those cash flows to present value, reflecting the relevant risks associated with the achievement of projected cash flows, the possibility that the Bryant Park Grill & Café and The Porch at Bryant Park leases may not be renewed beyond their expirations on April 30, 2025, and the time value of money. This approach required the use of significant estimates and assumptions, including forecasted revenue growth rates, forecasted cash flows from operations, and discount rates that reflect the risk inherent in the future cash flows. Based on the impairment analysis, the carrying amount of our equity exceeded its estimated fair value, which indicated an impairment of the carrying value of our goodwill at September 28, 2024. Accordingly, during the fourth quarter of fiscal 2024, the Company recorded a goodwill impairment charge of $4,000,000, of which $4,000,000 was deductible for tax purposes and resulted in a deferred income tax benefit of $1,074,000. Such impairment was attributed to factors such as, but not limited to, a decrease in the market price of the Company's common stock and lower than expected profitability.


Intangibles
Intangible assets consist of the following:
 September 27,
2025		September 28,
2024
 (in thousands)
Purchased leasehold rights (a) - fully amortized$1,995 $1,995 
Noncompete agreements and other - 5-10 years
633 633 
 2,628 2,628 
Less accumulated amortization2,615 2,530 
Intangible Assets - Net$13 $98 
(a)Purchased leasehold rights arose from acquiring leases and subleases of various restaurants.
Amortization expense related to intangible assets for the years ended September 27, 2025 and September 28, 2024 was $85,000 and $89,000, respectively. Amortization expense is expected to be $13,000 for fiscal 2026.
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Historical Timeline

Fiscal YearFiled
2025Dec 18, 2025Showing above
2024Dec 19, 2024
2023Dec 21, 2023
2022Dec 20, 2022
2021Dec 21, 2021
2020Dec 22, 2020
2019Dec 17, 2019
2018Dec 20, 2018
2017Dec 29, 2017
2016Dec 30, 2016
2015Dec 30, 2015

About Goodwill & Intangibles Disclosures

Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.

Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.

Other Available Disclosures

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