ARK RESTAURANTS CORP

Previous wording

As of December 27, 2025, the Company owned and operated 16 restaurants and bars, 12 fast food concepts and catering operations, exclusively in the United States, that have similar economic characteristics, nature of products and service, class of customer and distribution methods. The Company believes it meets the criteria for aggregating its operating components into a single operating segment in accordance with applicable accounting guidance.

Current wording

As of March 28, 2026, the Company owned and operated 16 restaurants and bars, 12 fast food concepts and catering operations, exclusively in the United States, that have similar economic characteristics, nature of products and services, class of customers and distribution methods. The Company believes it meets the criteria for aggregating its operating components into a single operating segment in accordance with applicable accounting guidance.

Previous wording

Our fiscal year ends on the Saturday nearest September 30. We report fiscal years under a 52/53-week format. This reporting method is used by many companies in the hospitality industry and is meant to improve year-to-year comparisons of operating results. Under this method certain years will contain 53 weeks. The periods ended December 27, 2025 and December 28, 2024 each included 13 weeks.

Current wording

Our fiscal year ends on the Saturday nearest September 30. We report fiscal years under a 52/53-week format. This reporting method is used by many companies in the hospitality industry and is meant to improve year-to-year comparisons of operating results. Under this method certain years will contain 53 weeks. The periods ended March 28, 2026 and March 29, 2025 each included 13 and 26 weeks.

Previous wording

The Company has substantial fixed costs that do not decline proportionally with sales. Although our business is highly seasonal, our broader geographical reach mitigates some of this risk. For instance, the second quarter of our fiscal year, consisting of the non-holiday portion of the cold weather season in New York and Washington D.C. (January, February and March), is the poorest performing quarter; however, this is partially offset by our locations in Florida as they experience increased results in the winter months. We generally achieve our best results during the warmer weather, attributable to our extensive outdoor dining availability, particularly at Bryant Park in New York and Sequoiain Washington, D.C. (our largest restaurants) and our outdoor cafes. However, even during summer months these facilities can be adversely affected by unusually cool or rainy weather conditions. Our facilities in Las Vegas are indoors and generally operate on a more consistent basis throughout the year, although in recent years the summer months have seen lower traffic.

Current wording

The Company has substantial fixed costs that do not decline proportionally with sales. Although our business is highly seasonal, our broader geographical reach mitigates some of this risk. For instance, the second quarter of our fiscal year, consisting of the non-holiday portion of the cold weather season in New York and Washington D.C. (January, February and March), is the poorest performing quarter; however, this is partially offset by our locations in Florida as they experience increased results in the winter months. We generally achieve our best results during the warmer weather, attributable to our extensive outdoor dining availability, particularly at Bryant Park Grilland the Bryant Park Caféin New York and Sequoiain Washington, D.C. (our largest restaurants) and our outdoor cafes. However, even during summer months these facilities can be adversely affected by unusually cool or rainy weather conditions. Our facilities in Las Vegas are indoors and generally operate on a more consistent basis throughout the year, although in recent years the summer months have seen lower traffic.

Previous wording

The Company’s lease agreements for the Bryant Park Grill & Caféand The Porch at Bryant Park expired in April 2025 and March 2025, respectively. In response to requests for proposals issued by the landlord in 2023, the Company submitted bids for new long-term agreements. In the second quarter of 2025, the landlord publicly announced the selection of a new operator for both locations; however, as of the date of this filing, the required approvals from the City of New York Department of Parks & Recreation and the New York Public Library have not been obtained, and no new lease has become effective.

Current wording

The Company’s lease agreements for the Bryant Park Grill, the Bryant Park Caféand The Porch at Bryant Park expired in April 2025 and March 2025, respectively. In response to requests for proposals issued by the landlord in 2023, the Company submitted bids for new long-term agreements. In the second quarter of 2025, the landlord publicly announced the selection of a new operator for both locations; however, as of the date of this filing, the required approvals from the City of New York Department of Parks & Recreation and the New York Public Library have not been obtained, and no new lease has become effective.

Previous wording

Management is unable to predict the outcome of the litigation at this time. The Bryant Park Grill & Caféand The Porch at Bryant Park represented a significant portion of the Company’s revenues, accounting for approximately 19.5% and 22.3% of total revenue for the 13 weeks ended December 27, 2025 and December 28, 2024, respectively. The ongoing uncertainty related to this dispute has had, and is expected to continue to have, a material adverse effect on the Company’s business, financial condition, and results of operations while the matter remains unresolved and if the Company is ultimately unable to retain these locations on favorable terms, or at all.

Current wording

Management is unable to predict the outcome of the litigation at this time. The Bryant Park Grill, the Bryant Park Caféand The Porch at Bryant Park represented a significant portion of the Company’s revenues, accounting for approximately 13.3% and 15.0% of total revenue for the 26 weeks ended March 28, 2026 and March 29, 2025, respectively. The ongoing uncertainty related to this dispute has had, and is expected to continue to have, a material adverse effect on the Company’s business, financial condition, and results of operations while the matter remains unresolved and if the Company is ultimately unable to retain these locations on favorable terms, or at all.

Previous wording

NMR has been actively pursuing a full casino license (including slots and table games like blackjack and roulette) to supplement its existing horse racing and sports betting operations. In January 2026, the New Jersey Senate Government, Wagering, Tourism & Historic Preservation Committee proposed a constitutional amendment to allow the legislature to authorize casino gambling at both the Monmouth Park and Meadowlands Racetracks. Such amendment will require a three-fifths vote in both legislative chambers followed by a voter referendum in a general election before becoming law. It is possible that a referendum could be on the ballot in November 2026 and if it were to pass, NMR could open a temporary facility in 2027 and a permanent one by 2028.

Current wording

NMR has been actively pursuing a full casino license (including slots and table games like blackjack and roulette) to supplement its existing horse racing and sports betting operations. In January 2026, the New Jersey Senate Government, Wagering, Tourism & Historic Preservation Committee proposed a constitutional amendment to allow the legislature to authorize casino gambling at both the Monmouth Park and Meadowlands Racetracks. Such amendment will require a three-fifths vote in both legislative chambers followed by a voter referendum in a general election before becoming law. To date, no vote on this amendment has been scheduled by the state legislature; however, the deadline for submission of proposed amendments to the State of New Jersey Constitution to be voted upon at the November 2026 general election is August 3, 2026. If this were to happen and the voting results were favorable, NMR could possibly open a temporary facility in early 2027 and a permanent one by 2028.

Previous wording

The Company's operating income for the 13 weeks ended December 27, 2025 decreased 80.8% as compared to operating income in the same period of the prior year (which includes a loss on the closure of El Rio Grandein the amount of $146,000 and a gain on the termination of our Tampa Food Court lease in the amount of $5,235,000). Excluding these items in the prior period, operating income of $1,093,000 for the 13 weeks ended December 27, 2025 increased 82.2% as compared to adjusted operating income of $600,000 for the 13 weeks ended December 28, 2024.

Current wording

The Company's operating loss for the 13 weeks ended March 28, 2026 (which includes a one-time, non-recurring prepaid rent write-off in the amount of $566,000 related to the Bryant Park Grilland the Bryant Park Café as discussed above) decreased 64.1% as compared to an operating loss in the same period of the prior year (which includes a loss on the closure of El Rio Grandein the amount of $140,000 and a goodwill impairment charge of $3,440,000). Excluding these items, the adjusted operating loss of $1,091,000 for the 13 weeks ended March 28, 2026 decreased 17.2% as compared to an adjusted operating loss of $1,317,000 for the 13 weeks ended March 29, 2025.

Previous wording

During the 13 weeks ended December 27, 2025, revenues decreased 9.4% as compared to revenues for the 13 weeks ended December 28, 2024. We attribute this decrease primarily to the decreases in same-store sales discussed below and the closure of the Tampa Food Court.

Current wording

During the 13- and 26-week periods ended March 28, 2026, revenues decreased 7.9% and 8.7%, respectively, as compared to revenues for the 13- and 26-week periods ended March 29, 2025. We attribute this decrease primarily to the decreases in same-store sales discussed below and the closures of El Rio Grande and the Tampa Food Court.

Previous wording

On a Company-wide basis, same-store sales decreased 7.3% during the 13 weeks ended December 27, 2025 as compared to the same period of last year as follows:

Current wording

On a Company-wide basis, same-store sales decreased 7.6% during the 13 weeks ended March 28, 2026 as compared to the same period of last year as follows:

Previous wording

Same-store sales in Las Vegas decreased, 6.4% which we attribute primarily to lower revenues at our America property as a result of partial closure for renovations and lower visitor counts in Las Vegas. Same-store sales in New York decreased 14.7%, which we attribute primarily to decreases in both catering and a la carte revenue at the Bryant Park Grill & Cafeas a result of the negative publicity related to our dispute with the landlord. Same-store sales in Washington, D.C. increased 5.0%, which we attribute primarily to an increased number of catered events. Same-store sales in Atlantic City, NJ decreased 15.0%, which we attribute primarily to lower than expected customer traffic at the property where we are located. Same-store sales in Alabama decreased 4.4%, which we attribute primarily to lower customer traffic as a result of economic pressures on the customers who

Current wording

Same-store sales in Las Vegas decreased 6.6%, which we attribute primarily to lower revenues at our America property as a result of partial closure for renovations. Same-store sales in New York decreased 12.3%, which we attribute primarily to decreases in both catering and a la carte revenue at the Bryant Park Grilland the Bryant Park Caféas a result of the negative publicity related to our dispute with the landlord combined with an unusually cold and snowy winter in the northeast. Same-store sales in Washington, D.C. decreased 18.7%, which we attribute primarily to lower headcounts as a result of decreased customer traffic at the complex where we are located. Same-store sales in Atlantic City, NJ decreased 10.8%, which we attribute primarily to lower than expected customer traffic at the property where we are located. Same-store sales in Alabama increased 2.1%, which we attribute primarily to better-than-expected customer traffic. Same-store sales in Florida decreased 8.3%, which we attribute primarily to lower headcounts from increased competition.

Previous wording

Costs and expenses for the 13 weeks ended December 27, 2025 and December 28, 2024 were as follows (in thousands):

Current wording

Costs and expenses for the 13 and 26 weeks ended March 28, 2026 and March 29, 2025 were as follows (in thousands):

Previous wording

Food and beverage costs as a percentage of total revenues for the 13 weeks ended December 27, 2025 decreased as compared with the same period of last year as a result of targeted menu engineering.

Current wording

Food and beverage costs as a percentage of total revenues for the 13 and 26 weeks ended March 28, 2026 decreased as compared with the same period of last year as a result of targeted menu engineering.

Previous wording

Payroll expenses as a percentage of total revenues for the 13 weeks ended December 27, 2025 decreased as compared with the same period of last year as a result of better shift management of related overtime hours and lower performance bonuses in the current year.

Current wording

Payroll expenses as a percentage of total revenues for the 13 weeks ended March 28, 2026 increased as compared with the same period of last year as a result of minimum wage increases. Payroll expenses as a percentage of total revenues for the 26 weeks ended March 28, 2026 decreased as compared with the same period of last year as a result of better shift management of related overtime hours and lower performance bonuses in the current year, partially offset by minimum wage increases.

Previous wording

Occupancy expenses as a percentage of total revenues for the 13 weeks ended December 27, 2025 increased marginally as compared with the same period of last year primarily as a result of increases in property and liability insurance premiums partially offset by lower percentage rents as a result of the sales decreases discussed above.

Current wording

Occupancy expenses as a percentage of total revenues for the 13 weeks ended March 28, 2026 increased as compared with the same period of last year primarily as a result of one-time, non-recurring prepaid rent write-off in the amount of $566,000 related to the Bryant Park Grilland the Bryant Park Café as discussed above. Occupancy expenses as a percentage of total revenues for the 26 weeks ended March 28, 2026 increased as compared with the same period of last year primarily as a result of one-time, non-recurring prepaid rent write-off in the amount of $566,000 related to the Bryant Park Grilland the Bryant Park Café as discussed above partially offset by lower percentage rents as a result of the sales decreases discussed above.

Previous wording

General and administrative expenses (which relate solely to the corporate office in New York City and are relatively fixed) for the 13 weeks ended December 27, 2025 increased as compared to the same periods of last year primarily as a result of the sales decreases discussed above.

Current wording

General and administrative expenses (which relate solely to the corporate office in New York City and are relatively fixed) for the 13 and 26 weeks ended March 28, 2026 decreased as compared to the same periods of last year primarily as a result of lower commissions and bonus accruals and lower consulting fees related to the Bryant Park Grilland the Bryant Park Café litigation.

Previous wording

Depreciation and amortization expense for the 13 weeks ended December 27, 2025 decreased as compared to the same periods of last year primarily as a result of certain assets becoming fully depreciated and the removal of assets associated with the Tampa Food Court.

Current wording

Depreciation and amortization expense for the 13 and 26 weeks ended March 28, 2026 decreased as compared to the same periods of last year primarily as a result of certain assets becoming fully depreciated and the removal of assets associated with the Tampa Food Court.

Previous wording

In October 2024, the Company advised the landlord of El Rio Grande we would be terminating the lease and closing the property permanently. In connection with this notification, the Company recorded a loss of $876,000 during the year ended September 28, 2024. The property closed permanently on January 3, 2025 and was vacated and delivered to the landlord on April 30, 2025. During the 13 weeks ended December 28, 2024, the Company incurred additional operating losses of $146,000.

Current wording

In October 2024, the Company advised the landlord of El Rio Grande we would be terminating the lease and closing the property permanently. In connection with this notification, the Company recorded a loss of $876,000 during the year ended September 28, 2024. The property closed permanently on January 3, 2025 and was vacated and delivered to the landlord on April 30, 2025. During the 13 weeks ended March 29, 2025, the Company recognized a gain of $140,000 as a result of refinements of estimates related to final negotiations with the landlord. During the 26 weeks ended March 29, 2025, the Company recognized a loss in the amount of $5,000 as a result of additional operating losses during the 13 weeks ended December 28, 2024 in the amount of $145,000 offset by the above refinements of estimates.

Previous wording

On November 26, 2024, the Company agreed to terminate its lease for the food court at The Hard Rock Hotel and Casino in Tampa, FL and, accordingly, vacated the premises on December 15, 2024. In connection with this, Ark Hollywood/Tampa Investment LLC, a subsidiary of the Company, (in which we own a 65% interest) received a termination payment in the amount

Current wording

On November 26, 2024, the Company agreed to terminate its lease for the food court at The Hard Rock Hotel and Casino in Tampa, FL and, accordingly, vacated the premises on December 15, 2024. In connection with this, Ark Hollywood/Tampa Investment LLC, a subsidiary of the Company, (in which we own a 65% interest) received a termination payment in the amount of $5,500,000; all obligations under the lease ceased and we recorded a gain, net of expenses, in the amount of $5,235,000 during the 13 weeks ended December 28, 2024. During the 13 weeks ended March 29, 2025, Ark Hollywood/Tampa Investment LLC distributed approximately $1,710,000 of the net proceeds, after expenses, to the other equity holders of Ark Hollywood/Tampa Investment LLC.

Previous wording

Our primary source of capital has been cash provided by operations and, in recent years, bank and other borrowings to finance specific transactions, acquisitions and large remodeling projects. We utilize cash generated from operations to fund the cost of developing and opening new restaurants and smaller remodeling projects of existing restaurants we own. Consistent with many other restaurant operators, we typically use operating lease arrangements for our restaurants. In recent years we have been able to acquire the underlying real estate at several locations along with the restaurant operation. We believe that our operating lease arrangements provide appropriate leverage of our capital structure in a financially efficient manner.

Current wording

Our primary source of capital has been cash provided by operations and, in recent years, bank and other borrowings to finance specific transactions, acquisitions and large remodeling projects. We have utilized cash generated from operations to fund the cost of developing and opening new restaurants and smaller remodeling projects of existing restaurants we own. Consistent with many other restaurant operators, we typically use operating lease arrangements for our restaurants. In recent years we have been able to acquire the underlying real estate at several locations along with the restaurant operation. We believe that our operating lease arrangements provide appropriate leverage of our capital structure in a financially efficient manner.

Previous wording

As of December 27, 2025, we had a cash and cash equivalents balance of $9,139,000, total debt of $2,987,000 and a working capital deficit of $4,954,000 as compared with a working capital deficit of $5,377,000 at September 27, 2025.

Current wording

As of March 28, 2026, we had cash and cash equivalents of $11,487,000, total debt of $7,553,000 (including $5,000,000 outstanding under our revolving credit facility) and a working capital deficit of $2,483,000 as compared with a working capital deficit of $5,377,000 at September 27, 2025. The Credit Agreement provides for maximum permitted obligations of $20,000,000, inclusive of all outstanding promissory notes. As of March 28, 2026, total obligations outstanding under the Credit Agreement were $7,553,000, comprised of $5,000,000 in revolving borrowings and $2,553,000 in outstanding term notes. Accordingly, as of March 28, 2026, we had approximately $12,400,000 of additional borrowing capacity available under the Credit Agreement, subject to continued compliance with the financial covenants thereunder.

Previous wording

Net cash used in investing activities for the 13 weeks ended December 27, 2025 was $858,000 as compared to net cash provided by investing activities of $4,895,000 in the same period as last year. This decrease resulted primarily from the payment received in connection with the termination of our Tampa Food Court lease in the prior period.

Current wording

Net cash used in investing activities for the 26 weeks ended March 28, 2026 was $1,980,000 as compared to net cash provided by investing activities of $4,626,000 in the same period as last year. This decrease resulted primarily from the payment received in connection with the termination of our Tampa Food Court lease in the prior period, partially offset by higher capital expenditures in connection with the renovation of our America property in Las Vegas.

Previous wording

As further described above in the “Overview” section of the Management’s Discussion and Analysis of Financial Condition and Results of Operations and elsewhere in this Quarterly Report, the Company's agreements with the Bryant Park Corporation for the Bryant Park Grill & Café expired on April 30, 2025 and for The Porch at Bryant Park expired on March 31, 2025.

Current wording

As further described above in the “Overview” section of the Management’s Discussion and Analysis of Financial Condition and Results of Operations and elsewhere in this Quarterly Report, the Company's agreements with the Bryant Park Corporation for the Bryant Park Grilland the Bryant Park Café expired on April 30, 2025 and for The Porch at Bryant Park expired on March 31, 2025.

Previous wording

Management, after consultation with legal counsel, is unable to predict the outcome of this matter at this time. While the outcome of these proceedings cannot be predicted with certainty, the Bryant Park Grill & Cafeand The Porch at Bryant Park, collectively, accounted for $7.9 million and $9.9 million of our total revenues for the 13 weeks ended December 27, 2025 and December 28, 2024, respectively, which represented approximately 19.5% and 22.3% of our total revenue for such periods, respectively.

Current wording

Management, after consultation with legal counsel, is unable to predict the outcome of this matter at this time. While the outcome of these proceedings cannot be predicted with certainty, the Bryant Park Grill, the Bryant Park Caféand The Porch at Bryant Park, collectively, accounted for $10.3 million and $12.7 million of our total revenues for the 26 weeks ended March 28, 2026 and March 29, 2025, respectively, which represented approximately 13.3% and 15.0% of our total revenue for such periods, respectively.

Previous wording

The uncertainty related to this dispute has had a material adverse impact on our business, financial condition, and results of operations and will continue to do so while the dispute is litigated and if we are unable to prevail in the above actions and/or are unable to extend or renew these leases on favorable terms, if at all.

Current wording

The uncertainty related to this dispute has had, and is expected to continue to have, a material adverse impact on our business, financial condition, and results of operations and will continue to do so while the dispute is litigated and if we are unable to prevail in the above actions and/or are unable to extend or renew these leases on favorable terms, if at all.

Previous wording

In January 2026, the New Jersey Senate Government, Wagering, Tourism & Historic Preservation Committee proposed a constitutional amendment to allow the legislature to authorize casino gambling at both the Monmouth Park and Meadowlands Racetracks. Such amendment will require a three-fifths vote in both legislative chambers followed by a voter referendum in a general election before becoming law. It is possible that a referendum could be on the ballot in November 2026 and if it were to pass, NMR could open a temporary facility in 2027 and a permanent one by 2028.

Current wording

In January 2026, the New Jersey Senate Government, Wagering, Tourism & Historic Preservation Committee proposed a constitutional amendment to allow the legislature to authorize casino gambling at both the Monmouth Park and Meadowlands Racetracks. Such amendment will require a three-fifths vote in both legislative chambers followed by a voter referendum in a general election before becoming law. To date, no vote on this amendment has been scheduled by the state legislature; however, the deadline for submission of proposed amendments to the State of New Jersey Constitution to be voted upon at the November 2026 general election is August 3, 2026. If this were to happen and the voting results were favorable, NMR could possibly open a temporary facility in early 2027 and a permanent one by 2028.

Previous wording

On March 30, 2023, the Company entered into a Second Amended and Restated Credit Agreement (the “Credit Agreement”), with its lender, Bank Hapoalim B.M. (“BHBM”) which originally matured on June 1, 2025. On May 29, 2025, the Company entered into an Omnibus Amendment to the Credit Agreement which: (i) extended the maturity date of the Credit Agreement to June 1, 2028, (ii) amended the terms of the outstanding promissory notes, (iii) reduced the maximum permitted obligations outstanding under the Credit Agreement from $30,000,000 to $20,000,000 (including the outstanding promissory notes), (iv) increased the minimum tangible net worth covenant from $22,000,000 to $28,000,000, and (v) removed the annual net income covenant. Advances and loans under the Credit Agreement bear interest, at the Company's election at the time of the advance, at either BHBM's prime rate of interest plus a 0.45% spread or SOFR plus a 3.65% spread. In addition, there is a 0.30% per annum fee for any unused portion of the facility. As of December 27, 2025, no advances were outstanding under the Credit Agreement. As of December 27, 2025, the weighted average interest on the outstanding BHBM indebtedness was approximately 7.5%.

Current wording

On March 30, 2023, the Company entered into a Second Amended and Restated Credit Agreement (the “Credit Agreement”), with its lender, Bank Hapoalim B.M. (“BHBM”) which originally matured on June 1, 2025. On May 29, 2025, the Company entered into an Omnibus Amendment to the Credit Agreement which: (i) extended the maturity date of the Credit Agreement to June 1, 2028, (ii) amended the terms of the outstanding promissory notes, (iii) reduced the maximum permitted obligations outstanding under the Credit Agreement from $30,000,000 to $20,000,000 (including the outstanding promissory notes), (iv) increased the minimum tangible net worth covenant from $22,000,000 to $28,000,000, which was subsequently amended to $25,000,000 on March 28, 2026, and (v) removed the annual net income covenant. Advances and loans under the Credit Agreement bear interest, at the Company's election at the time of the advance, at either BHBM's prime rate of interest plus a 0.45% spread or SOFR plus a 3.65% spread. In addition, there is a 0.30% per annum fee for any unused portion of the facility. As of March 28, 2026, borrowings of $5,000,000 were outstanding under our revolving facility under our Credit Agreement. As of March 28, 2026, the weighted average interest on the outstanding BHBM indebtedness was approximately 7.3%.

Previous wording

Borrowings and all other obligations under the Credit Agreement, which include the promissory notes as discussed in Note 7 of the consolidated condensed financial statements, are secured by all tangible and intangible personal property (including accounts receivable, inventory, equipment, general intangibles, documents, chattel paper, instruments, letter-of-credit rights, investment property, intellectual property and deposit accounts) and fixtures of the Company. The Credit Agreement also requires, among other things, that the Company meet minimum quarterly tangible net worth amounts and maintain a minimum fixed charge coverage ratio. The Credit Agreement contains customary representations, warranties and affirmative covenants as well as customary negative covenants, subject to negotiated exceptions on liens, relating to other indebtedness, capital expenditures, liens, affiliate transactions, disposal of assets and certain changes in ownership.

Current wording

Borrowings and all other obligations under the Credit Agreement, which include the promissory notes as discussed in Note 7 of the consolidated condensed financial statements, are secured by all tangible and intangible personal property (including accounts receivable, inventory, equipment, general intangibles, documents, chattel paper, instruments, letter-of-credit rights, investment property, intellectual property and deposit accounts) and fixtures of the Company. The Credit Agreement also requires, among other things, that the Company meet minimum quarterly tangible net worth amounts and maintain a minimum fixed charge

Previous wording

Other than the status of the Bryant Park Grill & Cafeand The Porch at Bryant Park, we are not aware of any other trends or events that would materially affect our capital requirements or liquidity. We believe that our existing cash balances, internal cash-generating capabilities and current banking facilities are sufficient to finance our capital expenditures, debt maturities and other operating activities for at least the next 12 months.

Current wording

Other than the status of the Bryant Park Grilland the Bryant Park Caféand The Porch at Bryant Park, we are not aware of any other trends or events that would materially affect our capital requirements or liquidity. We believe that our existing cash balances, internal cash-generating capabilities and current banking facilities are sufficient to finance our capital expenditures, debt maturities and other operating activities for at least the next 12 months.

Previous wording

25 - potential bad debts on accounts and notes receivable, assumptions regarding discount rates related to lease accounting, the useful lives and recoverability of its long-lived assets, such as property and intangibles, fair values of financial instruments, the realizable value of its tax assets and other matters. Management bases its estimates on certain assumptions, which it believes are reasonable in the circumstances, and actual results could differ from those estimates. Although management does not believe that any change in those assumptions in the near term would have a material effect on the Company’s consolidated condensed financial position or the results of operations, differences in actual results could be material to the consolidated condensed financial statements.

Current wording

The preparation of financial statements requires the Company to make estimates and assumptions of future events. In the process of preparing its consolidated condensed financial statements, the Company estimates the appropriate carrying value of certain assets and liabilities, which are not readily apparent from other sources. The critical accounting estimates underlying the Company’s consolidated condensed financial statements include projected cash flows for fixed asset impairments, allowances for potential bad debts on accounts and notes receivable, assumptions regarding discount rates related to lease accounting, the useful lives and recoverability of its long-lived assets, such as property and intangibles, fair values of financial instruments, the realizable value of its tax assets and other matters. Management bases its estimates on certain assumptions, which it believes are reasonable in the circumstances, and actual results could differ from those estimates. Although management does not believe that any change in those assumptions in the near term would have a material effect on the Company’s consolidated condensed financial position or the results of operations, differences in actual results could be material to the consolidated condensed financial statements.