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<SEC-DOCUMENT>0000930413-07-001235.txt : 20070213
<SEC-HEADER>0000930413-07-001235.hdr.sgml : 20070213
<ACCEPTANCE-DATETIME>20070213171912
ACCESSION NUMBER:		0000930413-07-001235
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20061230
FILED AS OF DATE:		20070213
DATE AS OF CHANGE:		20070213

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			ARK RESTAURANTS CORP
		CENTRAL INDEX KEY:			0000779544
		STANDARD INDUSTRIAL CLASSIFICATION:	RETAIL-EATING PLACES [5812]
		IRS NUMBER:				133156768
		STATE OF INCORPORATION:			NY
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-09453
		FILM NUMBER:		07611583

	BUSINESS ADDRESS:	
		STREET 1:		85 FIFTH AVENUE
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10003-3019
		BUSINESS PHONE:		2122068800

	MAIL ADDRESS:	
		STREET 1:		85 FIFTH AVENUE
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10003-3019
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>c46771_10-q.htm
<TEXT>

<HTML>
<HEAD>
   <TITLE></TITLE>
</HEAD>

<BODY bgcolor="#ffffff">




<P align="center">
<FONT size=2 face="serif">SECURITIES AND EXCHANGE COMMISSION</FONT><BR>
<FONT size=2 face="serif">Washington, D.C. 20549 </FONT></P>
<P align="center"><font size="2" face="serif">____________________</font></P>
<P align="center">
<FONT size=2 face="serif">FORM 10-Q</FONT></P>
<P align="center">
<FONT size=2 face="serif">QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)</FONT><BR>
<FONT size=2 face="serif">OF THE SECURITIES EXCHANGE ACT OF 1934 </FONT></P>
<P align="center">
<FONT size=2 face="serif">For the quarterly period ended December 30, 2006</FONT></P>
<P align="center">
<FONT size=2 face="serif">Commission file number 0-14030</FONT></P>
<P align="center">
<B><U><FONT face="serif">ARK RESTAURANTS CORP.<br>
</FONT></U></B><FONT size=2 face="serif">(Exact name of registrant as specified in its charter)</FONT></P>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR valign="bottom">
  <TD width=24% align=left nowrap>
 <div align="left"><U><FONT size=2 face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;New York&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></U>
  </div></TD>
  <TD width=17% align=left nowrap>&nbsp;

  </TD>
  <TD width=14%>&nbsp;
  </TD>
  <TD width=45% align=left nowrap>
 <center>
   <U><FONT size=2 face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13-3156768&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></U>
  </center></TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">(State or other jurisdiction of</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>
    <center>
      <FONT size=2 face="serif">(I.R.S. Employer</FONT>
    </center></TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp; &nbsp;<FONT size=2 face="serif">incorporation or organization)</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>
    <center>
      <FONT size=2 face="serif">Identification No.)</FONT>
    </center></TD>
</TR>
<TR>
  <TD colspan=4>&nbsp;

  </TD>
</TR>
<TR>
  <TD colspan=4>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<U><FONT size=2 face="serif">&nbsp;&nbsp;&nbsp;&nbsp;85
 Fifth Avenue, New York, New York&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></U>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=center nowrap>
    <center>
      <U><FONT size=2 face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10003&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></U>
      </center></TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">(Address of principal executive offices)</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>
 <center>
   <FONT size=2 face="serif">(Zip Code)</FONT>
  </center></TD>
</TR>
<TR>
  <TD colspan=4>&nbsp;

  </TD>
</TR>
<TR>
  <TD colspan=4>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">Registrant&#146;s telephone number, including area code:</FONT>&nbsp;&nbsp;&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;"> <center>
    <FONT size=2 face="serif">(212) 206-8800</FONT>
  </center></TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
</TABLE>
<BR>
<P align="justify">
<FONT size=2 face="serif">Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for shorter period that the
registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes </FONT><U><FONT size=2 face="serif">X </FONT></U><FONT size=2 face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No
_____</FONT></P>
<P align="justify">
<FONT size=2 face="serif">Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of &#147;accelerated filer and large accelerated filer&#148; in Rule 12b-2 of the
Exchange Act. </FONT></P>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR valign="bottom">
  <TD width=34% align=left nowrap>
<FONT size=2 face="serif">Large accelerated filer</FONT>
<FONT size=2 face="serif">_____</FONT> </TD>
  <TD width=12%>&nbsp;
  </TD>
  <TD width=28% align=left nowrap>
<FONT size=2 face="serif">Accelerated filer</FONT>
<FONT size=2 face="serif">_____</FONT> </TD>
  <TD width=26% align=left nowrap>
<FONT size=2 face="serif">Non-accelerated filer </FONT><FONT face="serif">__</FONT><U><FONT face="serif">X</FONT></U><FONT face="serif">___</FONT>
  </TD>
</TR>
</TABLE>
<BR>
<P align="justify">
<FONT size=2 face="serif">Indicate by check mark whether the Registrant is a
shell company (as defined in Exchange Act Rule 12b-2). Yes_____ No __</FONT><U><FONT size=2 face="serif">X</FONT></U><FONT size=2 face="serif">___ </FONT></P>
<P align="justify">
<FONT size=2 face="serif">Indicate the number of shares outstanding of each of the issuer&#146;s classes of common stock, as of the latest practicable date: </FONT></P>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR valign="bottom">
  <TD width="46%" align=left nowrap>
    <u><FONT size=2 face="serif">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Class&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></u>
  </TD>
  <TD width="38%">&nbsp;
  </TD>
  <TD width="16%" align=center nowrap>
<U><FONT size=2 face="serif">Outstanding shares at January 24, 2007</FONT></U>
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>&nbsp;
</TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">(Common stock, &#36;.01 par value)</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=center nowrap>
<FONT size=2 face="serif">3,581,799</FONT>
  </TD>
</TR>
</TABLE><BR>
<hr noshade size=4>
<P STYLE="page-break-before:always"></P><PAGE><BR>


<P align="center">
<U><FONT size=2 face="serif">SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS</FONT></U></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">We may make statements in this Quarterly Report on Form 10-Q</FONT><FONT size=2 face="serif"> </FONT><FONT size=2 face="serif">regarding our assumptions, projections, expectations, targets,
intentions or beliefs about future events. All statements, other than statements of historical facts, included or incorporated by reference herein relating to management&#146;s current expectations of future financial performance, continued growth
and changes in economic conditions or capital markets are forward looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. </FONT></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Words or phrases such as &#147;anticipates,&#148; &#147;believes,&#148; &#147;estimates,&#148; &#147;expects,&#148; &#147;intends,&#148; &#147;plans,&#148; &#147;predicts,&#148;
&#147;projects,&#148; &#147;targets,&#148; &#147;will likely result,&#148; &#147;hopes,&#148; &#147;will continue&#148; or similar expressions identify forward looking statements. Forward-looking statements involve risks and uncertainties which
could cause actual results or outcomes to differ materially from those expressed. We caution that while we make such statements in good faith and we believe such statements are based on reasonable assumptions, including without limitation,
management&#146;s examination of historical operating trends, data contained in records and other data available from third parties, we cannot assure you that our projections will be achieved. Factors that may cause such differences include:
economic conditions generally and in each of the markets in which we are located, the amount of sales contributed by new and existing restaurants, labor costs for our personnel, fluctuations in the cost of food products, adverse weather conditions,
changes in consumer preferences and the level of competition from existing or new competitors. </FONT></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">We have attempted to identify, in context, certain of the factors that we believe may cause actual future experience and results to differ materially from our current expectation regarding the
relevant matter of subject area. In addition to the items specifically discussed above, our business, results of operations and financial position and your investment in our common stock are subject to the risks and uncertainties described in
&#147;Item 1A Risk Factors&#148; in Part I of our Annual Report on Form 10-K for the fiscal year ended September 30, 2006 as updated by the information contained under the caption &#147;Item 1A. Risk Factors&#148; in Part II of this Quarterly Report
on Form 10-Q. </FONT></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">From time to time, oral or written forward-looking statements are also included in our reports on Forms 10-K, 10-Q and 8-K, our Schedule 14A, our press releases and other materials released to
the public. Although we believe that at the time made, the expectations reflected in all of these forward-looking statements are and will be reasonable, any or all of the forward-looking statements in this Quarterly Report on Form 10-Q, our reports
on Forms 10-K and 8-K, our Schedule 14A and any other public statements that are made by us may prove to be incorrect. This may occur as a result of inaccurate assumptions or as a consequence of known or unknown risks and uncertainties. Many factors
discussed in this Quarterly Report on Form 10-Q, certain of which are beyond our control, will be important in determining our future performance. Consequently, actual results may differ materially from those that might be anticipated from
forward-looking statements. In light of these and other uncertainties, you should not regard the inclusion of a forward-looking statement in this Quarterly Report on Form 10-Q or other public communications that we might make as a representation by
us that our plans and objectives will be achieved, and you should not place undue reliance on such forward-looking statements. </FONT></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. However, your attention is directed
to any further disclosures made on related subjects in our subsequent periodic reports filed with the Securities and Exchange Commission on Forms 10-K, 10-Q and 8-K and Schedule 14A. </FONT></P>
<P align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size=2 face="serif">Unless the context requires otherwise, references to &#147;we,&#148; &#147;us,&#148; &#147;our,&#148; &#147;ARKR&#148; and the &#147;Company&#148; refer specifically to Ark Restaurants Corp. and its subsidiaries and
predecessor entities. </FONT></P>
<P align="center">
<FONT size=2 face="serif">2</FONT></P>

<HR noshade width="100%" size=4>



<P STYLE="page-break-before:always"></P><PAGE><BR>


<div style="border-bottom:1px solid #000000">
  <center>
    <b><font size=2 face="serif">PART I<br>
  FINANCIAL INFORMATION</font></b>
  </center>
  <p>
<b><font size=2 face="serif"><U>
Item 1. Financial Statements</U><br>
<br>
ARK
      RESTAURANTS CORP. AND SUBSIDIARIES</font></b><br>
    <b><font size=2 face="serif">CONSOLIDATED CONDENSED BALANCE SHEETS </font></b><br>
<font size=2 face="serif">(Dollars and shares in Thousands)</font></div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR valign="bottom">
  <TD width="54%" align=left nowrap>&nbsp;</TD>
  <TD width="30%">&nbsp;</TD>
  <TD width="1%" align=right nowrap>&nbsp;</TD>
  <TD width="4%" align=center nowrap>&nbsp;</TD>
  <TD width="1%" align=left nowrap>&nbsp;</TD>
  <TD width="2%">&nbsp;</TD>
  <TD width="1%" align=right nowrap>&nbsp;</TD>
  <TD width="6%" align=center nowrap>&nbsp;</TD>
  <TD width="1%" align=left nowrap>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD colspan="2" align=right nowrap>
    <center>
      <FONT size=2 face="serif">December 30,</FONT>
    </center></TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  </TD>
  <TD colspan="2" align=right nowrap>
    <center>
      <FONT size=2 face="serif">September 30,</FONT>
    </center></TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD colspan="2" align=right nowrap>
    <center>
      <U><FONT size=2 face="serif">2006</FONT></U>
    </center></TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD colspan="2" align=right nowrap>
    <center>
      <U><FONT size=2 face="serif">2006</FONT></U>
    </center></TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD colspan="2" align=right nowrap>
    <center>
      <FONT size=2 face="serif">(unaudited)</FONT>
    </center></TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD colspan="2" align=right nowrap>
    <center>
      <FONT size=2 face="serif">(see Note 1)</FONT>
    </center></TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<U><FONT size=2 face="serif">ASSETS</FONT></U>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">CURRENT ASSETS:</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">Cash and cash equivalents</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>
    <div align="left"><FONT size=2 face="serif">&#36;</FONT>
    </div></TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">7,377</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>
    <div align="left"><FONT size=2 face="serif">&#36;</FONT>
    </div></TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">7,671</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">Short-term investments</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">11,806</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">-</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">Accounts receivable</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">3,325</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">2,587</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">Related party receivables</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">1,295</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">1,446</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">Employee receivables</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">369</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">394</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">Current portion of long-term receivables</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">96</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">131</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">Inventories</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">1,573</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">1,675</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">Prepaid expenses and other current assets</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">1,005</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">700</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">Assets held for sale</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">1,120</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">1,657</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=right nowrap>
    <div align="left"><FONT size=2 face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets</FONT>
    </div></TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">27,966</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">16,261</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">LONG-TERM RECEIVABLES</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">952</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">1,025</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">FIXED ASSETS - At cost:</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">Leasehold improvements</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">27,459</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">34,807</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">Furniture, fixtures and equipment</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">24,565</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">28,408</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">Construction in progress</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">445</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">159</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">52,469</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">63,374</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">Less accumulated depreciation and amortization</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">33,917</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">39,230</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">FIXED ASSETS-Net</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">18,552</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">24,144</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">INTANGIBLE ASSETS-Net</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">96</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">100</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">GOODWILL</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">3,341</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">3,440</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">DEFERRED INCOME TAXES</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">6,305</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">6,305</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">LONG-TERM INVESTMENTS</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">1,379</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">-</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">OTHER ASSETS</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">420</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">845</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">TOTAL</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap style="border-bottom:3px double #000000;">
    <div align="left"><FONT size=2 face="serif">&#36;</FONT>
    </div></TD>
  <TD align=right nowrap style="border-bottom:3px double #000000;">
<FONT size=2 face="serif">59,011</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:3px double #000000;">&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap style="border-bottom:3px double #000000;">
    <div align="left"><FONT size=2 face="serif">&#36;</FONT>
    </div></TD>
  <TD align=right nowrap style="border-bottom:3px double #000000;">
<FONT size=2 face="serif">52,120</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:3px double #000000;">&nbsp;

  </TD>
</TR>
<TR>
  <TD colspan=9>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<U><FONT size=2 face="serif">LIABILITIES AND SHAREHOLDERS&#146; EQUITY</FONT></U>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">CURRENT LIABILITIES:</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">Accounts payable - trade</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>
    <div align="left"><FONT size=2 face="serif">&#36;</FONT>
    </div></TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">2,227</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>
    <div align="left"><FONT size=2 face="serif">&#36;</FONT>
    </div></TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">2,193</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">Dividends payable</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>
    <div align="left">
    </div></TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">11,999</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">-</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">Accrued expenses and other current</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp; &nbsp;<FONT size=2 face="serif">liabilities</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">3,416</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">4,218</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">Accrued income taxes</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">3,572</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">1,452</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=center nowrap>
    <div align="left"><FONT size=2 face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities</FONT>
    </div></TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">21,214</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">7,863</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">OPERATING LEASE DEFERRED CREDIT</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">4,040</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">4,203</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">OTHER LIABILITIES</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">283</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">301</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">TOTAL LIABILITIES</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">25,537</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">12,367</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap><font size=2 face="serif">LIMITED PARTNER &nbsp;<font size=2 face="serif">NON-CONTROLLING INTEREST</font></font></TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap><div style="border-bottom:1px solid #000000">&nbsp;</div>

  </TD>
  <TD align=right nowrap><div style="border-bottom:1px solid #000000"> <font size=2 face="serif">2</font> </div></TD>
  <TD align=left nowrap><div style="border-bottom:1px solid #000000">&nbsp;</div>

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">-</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
</TR>
<TR>
  <TD colspan=9>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">COMMITMENTS AND CONTINGENCIES</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">SHAREHOLDERS&#146; EQUITY:</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">Common stock, par value &#36;.01 per share -</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp; &nbsp;<FONT size=2 face="serif">authorized, 10,000 shares; issued, 5,640 and</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">57</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">57</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=center nowrap>
    <div align="left">&nbsp; &nbsp;<FONT size=2 face="serif">5,632 shares, respectively</FONT>
    </div></TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">Additional paid-in capital</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">20,697</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">20,403</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">Accumulated other comprehensive income</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">23</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">-</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">Retained earnings</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">21,247</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">27,845</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">42,024</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">48,305</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">Less stock option receivable</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">(166</FONT>
  </TD>
  <TD align=left nowrap>
<FONT size=2 face="serif">)</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">(166</FONT>
  </TD>
  <TD align=left nowrap>
<FONT size=2 face="serif">)</FONT>
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">Less treasury stock of 2,070 shares</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">(8,386</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">)</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">(8,386</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">)</FONT>
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="serif">Total shareholders&#146; equity</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">33,472</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">39,753</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">TOTAL</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap style="border-bottom:3px double #000000;">
    <div align="left"><FONT size=2 face="serif">&#36;</FONT>
    </div></TD>
  <TD align=right nowrap style="border-bottom:3px double #000000;">
<FONT size=2 face="serif">59,011</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:3px double #000000;">&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap style="border-bottom:3px double #000000;">
    <div align="left"><FONT size=2 face="serif">&#36;</FONT>
    </div></TD>
  <TD align=right nowrap style="border-bottom:3px double #000000;">
<FONT size=2 face="serif">52,120</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:3px double #000000;">&nbsp;

  </TD>
</TR>
</TABLE>
<BR>
<P align="justify">
<FONT size=2 face="serif">See notes to consolidated condensed financial statements.</FONT></P>
<P align="center">
<FONT size=2 face="serif">3</FONT></P>

<HR noshade width="100%" size=4>



<P STYLE="page-break-before:always"></P><PAGE><BR>
<div style="border-bottom:1px solid #000000"> <b><font size=2 face="serif">ARK
      RESTAURANTS CORP. AND SUBSIDIARIES</font></b><br>
    <b><font size=2 face="serif">CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS </font></b><font size=2 face="serif">(Unaudited)</font><br>
    <font size=2 face="serif">(In Thousands, Except per share amounts)</font></div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR valign="bottom">
  <TD width=58% align=left nowrap>&nbsp;</TD>
  <TD width=25%>&nbsp;</TD>
  <TD width=1% align=left nowrap>&nbsp;</TD>
  <TD align=right nowrap colspan=5>&nbsp;</TD>
  <TD width=1% align=left nowrap>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD colspan="6" align=left nowrap>
    <center>
      <U><FONT size=2 face="serif">13 Weeks Ended</FONT></U>
    </center></TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR>
  <TD colspan=9>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD colspan="2" align=left nowrap>
    <center>
      <FONT size=2 face="serif">December 30,</FONT>
    </center></TD>
  <TD width=1% align=left nowrap>&nbsp;

  </TD>
  <TD width=2%>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  </TD>
  <TD colspan=2 align=left nowrap>
    <center>
      <FONT size=2 face="serif">December 31,</FONT>
    </center></TD>
  <TD align=left nowrap>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD colspan="2" align=left nowrap>
    <center>
      <U><FONT size=2 face="serif">2006</FONT></U>
    </center></TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD colspan="2" align=left nowrap>
    <center>
      <U><FONT size=2 face="serif">2005</FONT></U>
    </center></TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD width="5%" align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=left nowrap colspan=2>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">TOTAL REVENUES</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">&#36;</FONT>
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">28,202</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD width=1% align=left nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">&#36;</FONT>
  </TD>
  <TD width=6% align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">25,963</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">COST AND EXPENSES:</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">Food and beverage cost of sales</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">7,032</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">6,349</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">Payroll expenses</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">8,898</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">8,338</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">Occupancy expenses</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">3,992</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">4,081</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">Other operating costs and expenses</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">3,238</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">3,161</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">General and administrative expenses</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">1,983</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">1,722</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">Depreciation and amortization</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">638</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">566</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
</TR>
<TR>
  <TD colspan=9>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">Total costs and expenses</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">25,781</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">24,217</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">OPERATING INCOME</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">2,421</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">1,746</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">OTHER INCOME:</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">Interest income</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">110</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">25</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">Other income</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">243</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">210</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">Total other income</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">353</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">235</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">Income from continuing operations before provision for</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">income taxes and limited partner interest in variable</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">interest entity</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">2,774</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">1,981</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">Provision for income taxes</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">929</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">674</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">Limited partner non-controlling interest in income</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">(23</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">)</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">-</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">Income from continuing operations</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">1,822</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">1,307</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
</TR>
<TR>
  <TD colspan=9>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">DISCONTINUED OPERATIONS:</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">Income (loss) from operations of discontinued restaurants</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp; &nbsp;<FONT size=2 face="serif">(Includes net gain on disposal of &#36;7,814 for the 13 week</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp; &nbsp; &nbsp;<FONT size=2 face="serif">period ended December 30, 2006)</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">7,156</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">(593</FONT>
  </TD>
  <TD align=left nowrap>
<FONT size=2 face="serif">)</FONT>
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=right nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=right nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">Provision (benefit) for income taxes</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">2,398</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">(202</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">)</FONT>
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">Income (loss) from discontinued operations</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">4,758</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">(391</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">)</FONT>
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">Income (loss) before cumulative effect of change in</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">accounting principle</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">6,580</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">916</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=right nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=right nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">Cumulative effect of change in accounting principle</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">10</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">-</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
</TR>
<TR>
  <TD colspan=9>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">NET INCOME</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:3px double #000000;">
<FONT size=2 face="serif">&#36;</FONT>
  </TD>
  <TD align=right nowrap style="border-bottom:3px double #000000;">
<FONT size=2 face="serif">6,590</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:3px double #000000;">&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:3px double #000000;">
<FONT size=2 face="serif">&#36;</FONT>
  </TD>
  <TD align=right nowrap style="border-bottom:3px double #000000;">
<FONT size=2 face="serif">916</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:3px double #000000;">&nbsp;

  </TD>
</TR>
<TR>
  <TD colspan=9>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">PER SHARE INFORMATION - BASIC AND DILUTED:</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">Income from continuing operations</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>
<FONT size=2 face="serif">&#36;</FONT>
  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">.51</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>
<FONT size=2 face="serif">&#36;</FONT>
  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">.37</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">Discontinued operations</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>
<FONT size=2 face="serif">&#36;</FONT>
  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">1.33</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>
<FONT size=2 face="serif">&#36;</FONT>
  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">(.11</FONT>
  </TD>
  <TD align=left nowrap>
<FONT size=2 face="serif">)</FONT>
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">Cumulative effect of change in accounting principle</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">&#36;</FONT>
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">.00</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">&#36;</FONT>
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">.00</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">Basic</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:3px double #000000;">
<FONT size=2 face="serif">&#36;</FONT>
  </TD>
  <TD align=right nowrap style="border-bottom:3px double #000000;">
<FONT size=2 face="serif">1.84</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:3px double #000000;">&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:3px double #000000;">
<FONT size=2 face="serif">&#36;</FONT>
  </TD>
  <TD align=right nowrap style="border-bottom:3px double #000000;">
<FONT size=2 face="serif">.26</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:3px double #000000;">&nbsp;

  </TD>
</TR>
<TR>
  <TD colspan=9>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">Income from continuing operations</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>
<FONT size=2 face="serif">&#36;</FONT>
  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">.51</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>
<FONT size=2 face="serif">&#36;</FONT>
  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">.37</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">Discontinued operations</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>
<FONT size=2 face="serif">&#36;</FONT>
  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">1.33</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>
<FONT size=2 face="serif">&#36;</FONT>
  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">(.11</FONT>
  </TD>
  <TD align=left nowrap>
<FONT size=2 face="serif">)</FONT>
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">Cumulative effect of change in accounting principle</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">&#36;</FONT>
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">.00</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">&#36;</FONT>
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">.00</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">Diluted</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:3px double #000000;">
<FONT size=2 face="serif">&#36;</FONT>
  </TD>
  <TD align=right nowrap style="border-bottom:3px double #000000;">
<FONT size=2 face="serif">1.84</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:3px double #000000;">&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:3px double #000000;">
<FONT size=2 face="serif">&#36;</FONT>
  </TD>
  <TD align=right nowrap style="border-bottom:3px double #000000;">
<FONT size=2 face="serif">.26</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:3px double #000000;">&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">WEIGHTED AVERAGE NUMBER OF SHARES-BASIC</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:3px double #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:3px double #000000;">
<FONT size=2 face="serif">3,571</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:3px double #000000;">&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:3px double #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:3px double #000000;">
<FONT size=2 face="serif">3,462</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:3px double #000000;">&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">WEIGHTED AVERAGE NUMBER OF SHARES-DILUTED</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:3px double #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:3px double #000000;">
<FONT size=2 face="serif">3,576</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:3px double #000000;">&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:3px double #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:3px double #000000;">
<FONT size=2 face="serif">3,546</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:3px double #000000;">&nbsp;

  </TD>
</TR>
</TABLE>
<BR>
<P align="justify">
<FONT size=2 face="serif">See notes to consolidated condensed financial statements.</FONT></P>
<P align="center">
<FONT size=2 face="serif">4</FONT></P>

<HR noshade width="100%" size=4>



<P STYLE="page-break-before:always"></P><PAGE><BR>
<div style="border-bottom:1px solid #000000"> <b><font size=2 face="serif">ARK
      RESTAURANTS CORP. AND SUBSIDIARIES</font></b><br>
    <b><font size=2 face="serif">CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS </font></b><font size=2 face="serif">(Unaudited)</font><br>
    <font size=2 face="serif">(Dollars in Thousands)</font></div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR valign="bottom">
  <TD width="63%" align=left nowrap>&nbsp;</TD>
  <TD width="20%">&nbsp;</TD>
  <TD width="1%" align=left nowrap>&nbsp;</TD>
  <TD align=right nowrap colspan=5>&nbsp;</TD>
  <TD width="1%" align=left nowrap>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD colspan="6" align=left nowrap>
    <center>
      <U><FONT size=2 face="serif">13 Weeks Ended</FONT></U>
    </center></TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD colspan="2" align=left nowrap>
    <center>
      <FONT size=2 face="serif">December 30,</FONT>
    </center></TD>
  <TD width="1%" align=left nowrap>&nbsp;

  </TD>
  <TD width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  </TD>
  <TD align=left nowrap colspan=2>
    <center>
      <FONT size=2 face="serif">December 31,</FONT>
    </center></TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD colspan="2" align=left nowrap>
    <center>
      <U><FONT size=2 face="serif">2006</FONT></U>
    </center></TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD colspan="2" align=left nowrap>
    <center>
      <U><FONT size=2 face="serif">2005</FONT></U>
    </center></TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap><FONT size=2 face="serif">CASH FLOW FROM OPERATING ACTIVITIES</FONT></TD>
  <TD>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=right nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=right nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">Net income</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>
 <FONT size=2 face="serif">&#36;</FONT>
  </TD>
  <TD width="5%" align=right nowrap>
<FONT size=2 face="serif">6,590</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD width="1%" align=left nowrap> <FONT size=2 face="serif">&#36;</FONT>
  </TD>
  <TD width="6%" align=right nowrap>
<FONT size=2 face="serif">916</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">Adjustments to reconcile net income to net cash</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp; &nbsp;<FONT size=2 face="serif">provided by operating activities:</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">Deferred income taxes</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap> <div align="right"><FONT size=2 face="serif">-</FONT>
  </div></TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">(81</FONT>
  </TD>
  <TD align=left nowrap>
<FONT size=2 face="serif">)</FONT>
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">Cumulative effect of change in accounting principle</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">(10</FONT>
  </TD>
  <TD align=left nowrap>
<FONT size=2 face="serif">)</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">-</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">Stock-based compensation</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">174</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">187</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">Depreciation and amortization</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">638</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">566</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">Gain on disposal of discontinued operation</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">(7,814</FONT>
  </TD>
  <TD align=left nowrap>
<FONT size=2 face="serif">)</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">-</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">Impairment loss on assets held for sale of discontinued operations</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">537</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">-</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">Limited partner interest in income of consolidated variable interest entity</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">23</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">-</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">Operating lease deferred credit</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">(70</FONT>
  </TD>
  <TD align=left nowrap>
<FONT size=2 face="serif">)</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">(12</FONT>
  </TD>
  <TD align=left nowrap>
<FONT size=2 face="serif">)</FONT>
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">Changes in operating assets and liabilities:</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">Accounts receivable</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">(738</FONT>
  </TD>
  <TD align=left nowrap>
<FONT size=2 face="serif">)</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">(157</FONT>
  </TD>
  <TD align=left nowrap>
<FONT size=2 face="serif">)</FONT>
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">Related party receivables</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">151</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">-</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">Employee receivables</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">25</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">(27</FONT>
  </TD>
  <TD align=left nowrap>
<FONT size=2 face="serif">)</FONT>
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">Inventories</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">(133</FONT>
  </TD>
  <TD align=left nowrap>
<FONT size=2 face="serif">)</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">(153</FONT>
  </TD>
  <TD align=left nowrap>
<FONT size=2 face="serif">)</FONT>
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">Prepaid expenses and other current assets</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">(305</FONT>
  </TD>
  <TD align=left nowrap>
<FONT size=2 face="serif">)</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">881</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">Other assets</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">44</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">(10</FONT>
  </TD>
  <TD align=left nowrap>
<FONT size=2 face="serif">)</FONT>
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">Accounts payable - trade</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">34</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">(793</FONT>
  </TD>
  <TD align=left nowrap>
<FONT size=2 face="serif">)</FONT>
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">Accrued income taxes</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">2,120</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">(486</FONT>
  </TD>
  <TD align=left nowrap>
<FONT size=2 face="serif">)</FONT>
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">Accrued expenses and other current liabilities</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">(802</FONT>
  </TD>
  <TD align=left nowrap>
<FONT size=2 face="serif">)</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">(1,169</FONT>
  </TD>
  <TD align=left nowrap>
<FONT size=2 face="serif">)</FONT>
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">Cash received from landlord</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">-</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">1,233</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="serif">Net cash provided by continuing operating activities</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">464</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">895</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="serif">Net cash provided by  discontinued operating activities</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">32</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">346</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="serif">Net cash provided by operating activities</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">496</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">1,241</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">CASH FLOWS FROM INVESTING ACTIVITIES:</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">Purchases of fixed assets</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">(606</FONT>
  </TD>
  <TD align=left nowrap>
<FONT size=2 face="serif">)</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">(2,474</FONT>
  </TD>
  <TD align=left nowrap>
<FONT size=2 face="serif">)</FONT>
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">Proceeds from sale of discontinued operation</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">14,000</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">-</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">Purchases of investment securities</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">(13,162</FONT>
  </TD>
  <TD align=left nowrap>
<FONT size=2 face="serif">)</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">-</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">Payments received on long-term receivables</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">108</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">103</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="serif">Net cash used in continuing investing activities</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">(340</FONT>
  </TD>
  <TD align=left nowrap>
<FONT size=2 face="serif">)</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">(2,371</FONT>
  </TD>
  <TD align=left nowrap>
<FONT size=2 face="serif">)</FONT>
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="serif">Net cash used in discontinued investing activities</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">
    <div align="right"><FONT size=2 face="serif">-</FONT>
    </div></TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">
    <div align="right"><FONT size=2 face="serif">-</FONT>
    </div></TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="serif">Net cash used in investing activities</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">(340</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">)</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">(2,371</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">)</FONT>
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">CASH FLOWS FROM FINANCING ACTIVITIES:</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">Tax benefit on exercise of stock options</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">70</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>
    <div align="right"><FONT size=2 face="serif">-</FONT>
    </div></TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">Dividends paid</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">(1,189</FONT>
  </TD>
  <TD align=left nowrap>
<FONT size=2 face="serif">)</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">(1,212</FONT>
  </TD>
  <TD align=left nowrap>
<FONT size=2 face="serif">)</FONT>
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">Exercise of stock options</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">50</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">-</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">Distributions to limited partners of consolidated variable interest entity</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">(61</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">)</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">-</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="serif">Net cash
 used in continuing financing activities </FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">(1,130</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">)</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">(1,212</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">)</FONT>
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="serif">Net cash used in financing activities</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">(1,130</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">)</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">(1,212</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">)</FONT>
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">(294</FONT>
  </TD>
  <TD align=left nowrap>
<FONT size=2 face="serif">)</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">(2,342</FONT>
  </TD>
  <TD align=left nowrap>
<FONT size=2 face="serif">)</FONT>
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">CASH AND CASH EQUIVALENTS, Beginning of period</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">7,671</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">5,723</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">CASH AND EQUIVALENTS, End of period</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:3px double #000000;">
 <FONT size=2 face="serif">&#36;</FONT>
  </TD>
  <TD align=right nowrap style="border-bottom:3px double #000000;">
<FONT size=2 face="serif">7,377</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:3px double #000000;">&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:3px double #000000;">
 <FONT size=2 face="serif">&#36;</FONT>
  </TD>
  <TD align=right nowrap style="border-bottom:3px double #000000;">
<FONT size=2 face="serif">3,381</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:3px double #000000;">&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp;<FONT size=2 face="serif">Cash paid during the period for:</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=center nowrap>
    <div align="left">&nbsp; &nbsp;<FONT size=2 face="serif">Interest</FONT>
    </div></TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:3px double #000000;">
<FONT size=2 face="serif">&#36;</FONT>
  </TD>
  <TD align=right nowrap style="border-bottom:3px double #000000;">
<FONT size=2 face="serif">-</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:3px double #000000;">&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:3px double #000000;">
<FONT size=2 face="serif">&#36;</FONT>
  </TD>
  <TD align=right nowrap style="border-bottom:3px double #000000;">
<FONT size=2 face="serif">-</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:3px double #000000;">&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
 &nbsp; &nbsp;<FONT size=2 face="serif">Income taxes</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:3px double #000000;">
 <FONT size=2 face="serif">&#36;</FONT>
  </TD>
  <TD align=right nowrap style="border-bottom:3px double #000000;">
<FONT size=2 face="serif">1,179</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:3px double #000000;">&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:3px double #000000;">
 <FONT size=2 face="serif">&#36;</FONT>
  </TD>
  <TD align=right nowrap style="border-bottom:3px double #000000;">
<FONT size=2 face="serif">1,038</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:3px double #000000;">&nbsp;

  </TD>
</TR>
</TABLE>
<BR>
<P align="justify">
<FONT size=2 face="serif">See notes to consolidated condensed financial statements. </FONT></P>
<P align="center">
<FONT size=2 face="serif">5</FONT></P>

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<P STYLE="page-break-before:always"></P><PAGE><BR>


<P align="justify">
<B><U><FONT size=2 face="serif">ARK RESTAURANTS CORP. AND SUBSIDIARIES</FONT></U></B><B><FONT size=2 face="serif"> </FONT></B></P>
<P align="justify">
<B><FONT size=2 face="serif">NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS </FONT></B><BR>
<B><FONT size=2 face="serif">December 30, 2006 </FONT></B><BR>
<U><FONT size=2 face="serif">(Unaudited)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></U><FONT size=2 face="serif"> </FONT></P>
<P align="justify">
<B><FONT size=2 face="serif">1. CONSOLIDATED CONDENSED FINANCIAL STATEMENTS </FONT></B></P>
<P align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size=2 face="serif">PRINCIPLES OF CONSOLIDATION &#150; The consolidated interim financial statements include the accounts of the Company and all of its partnerships and other entities in which it has a controlling interest. Also included in
the consolidated financial statements are certain variable interest entities, as discussed below.  All significant intercompany balances and transactions have been eliminated in consolidation. The unaudited statements have been prepared in
accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain information and footnote disclosures
normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted.  These consolidated condensed financial statements should be read in conjunction with
the consolidated financial statements and notes thereto included in the Company&#146;s annual report on Form 10-K for the year ended September 30, 2006. The results of operations for interim periods are not necessarily indicative of the operating results
to be expected for the full year. The September 30, 2006 balance sheet has been derived from the Company&#146;s audited financial statements included in the Company&#146;s annual report on Form 10-K for the year ended September 30, 2006.</FONT></P>
<P align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size=2 face="serif">RECLASSIFCATIONS &#150; Certain reclassifications have been made to the 2006 financial statements to conform to the 2007 presentation. </FONT></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">CONSOLIDATION OF PARTNERSHIP INTEREST&#151; In June 2005, the Emerging Issues Task Force (&#147;EITF&#148;) issued EITF No. 04-5, &#147;Determining Whether a General Partner, or the General
Partners as a Group, Controls a Limited Partnership or Similar Entity When the Limited Partners Have Certain Rights&#148;.  EITF 04-5 presumes that a general partner controls a limited partnership and therefore should consolidate the partnership.
This presumption can be overcome if the limited partners have kick-out or substantive participating rights. EITF 04-5 is effective for the Company&#146;s quarter ended December 30, 2006 and accordingly management has made an assessment of the
limited partnership or similar entities that the Company provides management services to where it is also the general partner in the entity that owns the property. </FONT></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Effective October 1, 2006 the Company determined that one of its managed restaurants, El Rio Grande (&#147;Rio&#148;), should be presented on a consolidated basis in accordance with EITF 04-5.
As a result of consolidating the assets and liabilities of the limited partnership that owns Rio, at December 30, 3006 the Company recorded a cumulative effect of change in accounting principle of &#36;10,000 which is included in the accompanying consolidated
condensed statement of operations. The cumulative effect of the change in accounting principle primarily relates to the Company&#146;s recording of its share of undistributed retained earnings as of October 1, 2006.</FONT></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">CASH AND CASH EQUIVALENTS &#151; Cash and cash equivalents, which primarily consist of money market funds, are stated at cost, which approximates fair value. For financial statement
presentation purposes, the Company considers all highly liquid investments having original maturities of three months or less to be cash equivalents. Outstanding checks in excess of account balances, typically vendor payments, payroll and other
contractual obligations disbursed on or near the last day of a reporting period are reported as a current liability in the accompanying consolidated balance sheets.</FONT></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">INVESTMENTS &#151; Investments include available-for-sale securities consisting of US
Treasury Bills, commercial paper, government bonds, corporate bonds and other fixed income securities, all of which have a high degree of liquidity and are reported at fair value, with unrealized gains and losses recorded in accumulated other
comprehensive income. The cost of investments in available-for-sale securities is determined on a specific identification basis. Realized gains or losses and declines in value judged to be other than temporary, if any, are reported in other
income, net. The Company evaluates its investments periodically for possible impairment and reviews factors such as the length of time and extent to which fair value has been below cost basis and the Company&#146;s ability and intent to hold the
investment for a period of time which may be sufficient for anticipated recovery in market value.</FONT></P><P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS&nbsp;&#151;&nbsp;In June 2006, the Financial Accounting Standards Board issued FASB Interpretation No. 48, </FONT><I><FONT size=2 face="serif">Accounting for Uncertainty in Income taxes &#150; an interpretation
of FASB Statement No. 109 </FONT></I><FONT size=2 face="serif">(&#147;FIN 48&#148;). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in financial statements in accordance with FASB Statement No. 109, </FONT><I><FONT size=2 face="serif">Accounting for Income Taxes</FONT></I><FONT size=2 face="serif">. FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be
taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The Company is required to adopt the provisions of FIN 48 during fiscal years
beginning after December 15, 2006.  The Company is currently evaluating the impact of FIN 48 on its consolidated results of operations and financial position. </FONT></P>

<P align="center">
<FONT size=2 face="serif">6</FONT></P>

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<P STYLE="page-break-before:always"></P><PAGE><BR>


<P align="justify">
<B><FONT size=2 face="serif">2. RECENT RESTAURANT DISPOSITIONS</FONT></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">The Company entered into a sale and leaseback agreement with GE Capital in November 2000 to refinance the purchase of various restaurant equipment at its food and beverage facilities at the
Desert Passage, the retail complex at the Aladdin Resort &amp; Casino in Las Vegas, Nevada. In 2002, the operations at the Aladdin were abandoned.</FONT><FONT size=2 face="monospace"> </FONT><FONT size=2 face="serif">The lease matured in November
2005 and, in connection therewith, the Company made an unprovided for lump sum payment of &#36;142,000 due under this lease. This lump sum payment is included in discontinued operations during the first quarter of fiscal 2006. </FONT></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">The Company&#146;s bar/nightclub facility Venus, located at the Venetian Casino Resort, experienced a steady decline in sales and the Company felt that a new concept was needed at this
location. During the first quarter of 2005, this bar/nightclub facility was closed and re-opened as &#147;Vivid&#148; on February 4, 2005. Total conversion costs were approximately &#36;400,000. Sales at the new bar/nightclub facility failed to
reach the level sufficient to achieve the results the Company required. As of December 31, 2005, the Company classified the assets and liabilities of this bar/nightclub facility as &#147;held for sale&#148; in accordance with Statement of Financial
Accounting Standards No. 144, &#147;Accounting for the Impairment or Disposal of Long-Lived Assets&#148; (&#147;SFAS No. 144&#148;) based on the fact that the facility has met the criteria under SFAS No. 144. Based on the offers made for this facility, the Company
recorded an impairment charge of &#36;537,000 during the fiscal quarter ended December 30, 2006. The Company recorded an operating loss of &#36;106,000 and &#36;250,000, respectively, during the 13-week periods ended December 30, 2006 and December
31, 2005. The impairment charge and operating losses are included in discontinued operations. </FONT></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Effective August 22, 2004, the Company&#146;s lease for The Saloon</FONT><I><FONT size=2 face="serif"> </FONT></I><FONT size=2 face="serif">at the Neonopolis Center at Fremont Street in Las
Vegas was converted into a management agreement whereby the Company received a management fee of &#36;7,000 per month regardless of the results of operations of this restaurant. In June 2006, the owner of the Neonopolis Center at Fremont Street sold
the building to a new entity who, on June 25, 2006, exercised its option to terminate the management agreement upon thirty days written notice to the Company.</FONT></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">On July 6, 2006, the landlord for the Vico&#146;s Burrito&#146;s fast food facility at the Venetian Casino Resort, General Growth Properties,</FONT><I><FONT size=2 face="serif">
</FONT></I><FONT size=2 face="serif">notified the Company that they were exercising their option to terminate the lease in exchange for the landlord providing the Company with the unamortized portion of the non-removable improvements located in the
facility. On August 10, 2006, the Company and the landlord entered into a letter agreement pursuant to which the landlord agreed to pay the Company &#36;200,000 for the unamortized portion of the non-removable improvements located in the
facility. Such payment was subsequently received by the Company.</FONT></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">The Company was approached by the Venetian Casino Resort who indicated that, due to the expansion of the Grand Canal Shoppes, the Company&#146;s Lutece and Tsunami locations, as well as a
portion of the Company&#146;s Vivid location, in the Grand Canal Shoppes were desired by other tenants. The Venetian Casino Resort offered to purchase these locations from the Company for an aggregate of &#36;14,000,000. After evaluating the offer,
the Company determined that such offer made it advantageous for the Company to redeploy these assets. Effective December 1, 2006, the Company&#146;s subsidiaries that leased each of Lutece, Tsunami and Vivid locations at the Venetian Resort Hotel
Casino in Las Vegas, Nevada, entered into an agreement to sell Lutece, Tsunami and a portion of the Vivid location used by Lutece as a prep kitchen to Venetian Casino Resort, LLC for an aggregate of &#36;14,000,000. The Company&#146;s Lutece
location closed on December 3, 2006 and the Company&#146;s Tsunami location closed on January 3, 2007. The Company realized a gain of &#36;7,814,000 (&#36;5,196,000</FONT><B><FONT size=2 face="serif"> </FONT></B><FONT size=2 face="serif">after
taxes</FONT><B><FONT size=2 face="serif">, </FONT></B><FONT size=2 face="serif">or &#36;1.45 per share)</FONT><B><FONT size=2 face="serif"> </FONT></B><FONT size=2 face="serif">on the sale of these facilities. The Company recorded an operating loss
of &#36;5,000 and &#36;113,000 for the first fiscal quarters of 2007 and 2006, respectively. The gain on sale and losses are included in discontinued operations. </FONT></P>
<P align="justify">
<B><FONT size=2 face="serif">3. RECEIVABLES FROM EMPLOYEES IN RESPECT OF STOCK OPTION EXERCISES </FONT></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Receivables from employees in respect of stock option exercises includes amounts due from officers and directors totaling &#36;167,000 at December 30, 2006 and September 30, 2006.  Such
amounts, which are due from the exercise of stock options in accordance with the Company&#146;s Stock Option Plan, are payable on demand with interest at &frac12;% above prime (8.25% at December 30, 2006). </FONT></P>
<P align="justify">
<B><FONT size=2 face="serif">4. INCOME PER SHARE OF COMMON STOCK</FONT></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Net income per share is computed in accordance with Statement of Financial Accounting Standards No. 128, </FONT><I><FONT size=2 face="serif">Earnings Per Share</FONT></I><FONT size=2 face="serif">, and is calculated on the basis of the weighted average number of common shares outstanding during each period plus, for diluted earnings per share, the additional dilutive effect of potential common stock.  Potential common stock
using the treasury stock method consists of dilutive stock options and warrants.</FONT></P>
<P align="center">
<FONT size=2 face="serif">7</FONT></P>

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<P STYLE="page-break-before:always"></P><PAGE><BR>


<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">For the 13-week period ended December 30, 2006 options to purchase 8,000 shares of common stock at a price of &#36;6.30 were included in diluted earnings per share. Options to purchase 299,000
shares of common stock at a price range of &#36;29.60 - &#36;32.15 were not included in diluted earnings per share as their impact was antidilutive. For the 13-week period ended December 31, 2005, options to purchase 107,000 shares of common stock
at a price of &#36;6.30 were included in diluted earnings per share. Options to purchase 194,000 shares of common stock a price of &#36;29.60 were not included in diluted earnings per share as their impact was antidilutive.</FONT><B><FONT size=2 face="serif"> </FONT></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">During the quarter ended December 30, 2006, employees exercised 8,000 options to purchase shares of common stock at a price of &#36;6.30. </FONT></P>
<P align="justify">
<B><FONT size=2 face="serif">5. SHARE-BASED COMPENSATION</FONT></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Effective October 2, 2005 the Company adopted Statement of Financial Accounting Standards No. 123R, </FONT><I><FONT size=2 face="serif">&#147;Share-Based
Payment&#148;</FONT></I><FONT size=2 face="serif"> (&#147;SFAS No. 123R&#148;), and related interpretations and began expensing the grant-date fair value of employee stock options. Prior to October 2, 2005, the Company applied Accounting Principles
Board Opinion No. 25, </FONT><I><FONT size=2 face="serif">&#147;Accounting for Sock Issued to Employees,&#148; </FONT></I><FONT size=2 face="serif">and related interpretations in accounting for its stock option</FONT><I><FONT size=2 face="serif">
</FONT></I><FONT size=2 face="serif">plans</FONT><I><FONT size=2 face="serif">. </FONT></I><FONT size=2 face="serif">Accordingly, no compensation expense was recognized in net income for employee stock options, as</FONT><I><FONT size=2 face="serif">
</FONT></I><FONT size=2 face="serif">options granted had an exercise price equal to the market value of the underlying common stock on the date of grant. </FONT></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">The Company&#146;s 2004 Stock Option Plan (the &#147;Plan&#148;), as amended, is the only equity compensation plan currently in effect. Options granted under the Plan are exercisable at prices
at least equal to the fair market value of such stock on the dates the options were granted and expire ten years after the date of grant. On December 21, 2004, the Company granted options to purchase 194,000 shares (the &#147;2004 Grant&#148;) and
on December 19, 2006, the Company granted options to purchase 105,000 shares (the &#147;2006 Grant&#148;). Options granted in the 2004 Grant are generally exercisable as to 50% of the shares commencing on the first anniversary of the date of grant
and as to an additional 50% commencing on the second anniversary of the date of grant. Options granted in the 2006 Grant are generally exercisable as to 25% of the shares commencing on the first anniversary of the date of grant and as to an
additional 25% each anniversary thereafter until fully vested. </FONT></P>
<P align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size=2 face="serif">Upon adoption of SFAS 123R, the Company elected to value employee stock options using the Black-Scholes option valuation method that uses assumptions that relate to the expected volatility of the Company&#146;s common
stock, the expected dividend yield of our stock, the expected life of the options and the risk free interest rate. The assumptions used for the 2004 Grant, which were unvested at the time of the adoption of SFAS 123R, included a risk free interest
rate of 3.37%, volatility of 37%, a dividend yield of 3% and an expected life of three years. The assumptions used for the 2006 Grant included a risk free interest rate of 4.57%, volatility of 49.7%, and a dividend yield of 4.4% and an expected life
of five years. </FONT></P>
<P align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size=2 face="serif">The Company adopted SFAS No. 123R using the modified prospective transition method and therefore has not restated prior periods. Under this transition method, compensation cost associated with employee stock options
recognized during fiscal 2006 and the first quarter of fiscal 2007 includes amortization related to the remaining unvested portion of stock awards granted prior to October 2, 2005. </FONT></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Prior to the adoption of SFAS No. 123R, the Company presented tax benefits resulting from share-based compensation as operating cash flows in the consolidated statements of cash flows. SFAS No.
123R requires that cash flows resulting from tax deductions in excess of compensation cost recognized in the financial statements be classified as an operating cash outflow and a financing cash inflow. For fiscal 2006 and the first quarter of fiscal
2007, no excess tax benefits were generated. </FONT></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">The compensation cost charged against income in the first fiscal quarter of 2007 for share-based compensation programs was &#36;174,000, before a tax benefit of &#36;58,000.  The compensation
cost charged against income in the first fiscal quarter of 2006 for share-based compensation programs was &#36;187,000, before a tax benefit of &#36;64,000. The compensation cost recognized is classified as payroll expense in the consolidated
statement of operations. </FONT></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">On November 2005, the FASB issued FASB Staff Position No. FAS 123R3 &#147;Transition Election Related to Accounting for the Tax Effects of Share-Based Payment Awards&#148; (&#147;FAS
123R&#148;).  The Company has elected to adopt the alternative transition method provided in this FASB Staff Position for calculating the tax effects of share-based compensation pursuant to FAS 123R. The alternative transition method includes a
simplified method to establish the beginning balance of the additional paid-in capital pool (APIC pool) related to the effects of employee share-based compensation, which is available to absorb tax deficiencies recognized subsequent to the adoption
of FAS 123R. </FONT></P>
<P align="center">
<FONT size=2 face="serif">8</FONT></P>

<HR noshade width="100%" size=4>



<P STYLE="page-break-before:always"></P><PAGE><BR>


<P align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size=2 face="serif">A summary of stock option activity is presented below: </FONT></P>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR valign="bottom">
  <TD width="32%" align=left nowrap>&nbsp;

  </TD>
  <TD width="6%">&nbsp;
  </TD>
  <TD width="4%" align=left nowrap>&nbsp;

  </TD>
  <TD width="1%" align=left nowrap>&nbsp;

  </TD>
  <TD width="1%">&nbsp;
  </TD>
  <TD colspan="4" align=right nowrap>
    <center>
    <B><FONT size=2 face="serif">Weighted</FONT></B>    </center></TD>
  <TD width="1%">&nbsp;
  </TD>
  <TD colspan="4">
    <center>
    <B><FONT size=2 face="serif">Weighted</FONT></B>    </center></TD>
  <TD width="1%" align=center nowrap>&nbsp;</TD>
  <TD colspan="3">
    <center>
      <B><FONT size=2 face="serif">Weighted</FONT></B>
    </center></TD>
  <TD width="6%" align=right nowrap>&nbsp;</TD>
  <TD width="4%" align=right nowrap>&nbsp;

  </TD>
  <TD width="5%" align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD colspan="4" align=right nowrap>
    <center>
    <B><FONT size=2 face="serif">Average</FONT></B>    </center></TD>
  <TD>&nbsp;
  </TD>
  <TD colspan="4">
    <center>
    <B><FONT size=2 face="serif">Average</FONT></B>    </center></TD>
  <TD align=center nowrap>&nbsp;</TD>
  <TD colspan="3">
    <center>
      <B><FONT size=2 face="serif">Average</FONT></B>
    </center></TD>
  <TD align=right nowrap>&nbsp;</TD>
  <TD colspan="2" align=right nowrap>
    <center>
        <B><FONT size=2 face="serif">Aggregate</FONT></B>
      </center></TD>
  </TR>
<TR valign="bottom">
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD colspan="4" align=right nowrap>
    <center>
    <B><FONT size=2 face="serif">Excersie</FONT></B>    </center></TD>
  <TD>&nbsp;
  </TD>
  <TD colspan="4">  <center>
    <B><FONT size=2 face="serif">Fair</FONT></B>    </center></TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD colspan="3">
    <center>
      <B><FONT size=2 face="serif">Contractual</FONT></B>
    </center></TD>
  <TD align=right nowrap>&nbsp;</TD>
  <TD colspan="2" align=right nowrap>
    <center>
        <B><FONT size=2 face="serif">Intrinsic</FONT></B>
      </center></TD>
  </TR>
<TR valign="bottom">
  <TD align=left nowrap>
<B><FONT size=2 face="serif"><u>Options</u></FONT></B>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>
    <center>
      <B><FONT size=2 face="serif"><u>Shares</u></FONT></B>
      </center></TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD colspan="4" align=right nowrap>
    <center>
    <B><FONT size=2 face="serif"><u>Price</u></FONT></B>    </center></TD>
  <TD>&nbsp;
  </TD>
  <TD colspan="4">
    <center>
    <B><FONT size=2 face="serif"><u>Value</u></FONT></B>    </center></TD>
  <TD align=center nowrap>&nbsp;</TD>
  <TD colspan="3">
    <center>
      <B><FONT size=2 face="serif"><u>Term ( Yrs.)</u></FONT></B>
      </center></TD>
  <TD align=right nowrap>&nbsp;</TD>
  <TD colspan="2" align=right nowrap>    <center>
      <B><FONT size=2 face="serif"><u>Value</u></FONT></B>
      </center></TD>
  </TR>
<TR>
  <TD colspan=21>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">Outstanding as September 30, 2006</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">202,000</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD width="4%" align=right nowrap>&nbsp;</TD>
  <TD width="1%" align=right nowrap>
<FONT size=2 face="serif">&#36;</FONT>
  </TD>
  <TD width="3%" align=center nowrap>
    <div align="right"><FONT size=2 face="serif">28.68</FONT>
    </div></TD>
  <TD width="5%" align=center nowrap>&nbsp;</TD>
  <TD>&nbsp;
  </TD>
  <TD width="4%">&nbsp;</TD>
  <TD width="1%" align=right nowrap>
<FONT size=2 face="serif">&#36;</FONT>
  </TD>
  <TD width="3%" align=center nowrap>
    <div align="right"><FONT size=2 face="serif">7.99</FONT>
    </div></TD>
  <TD width="5%" align=center nowrap>&nbsp;</TD>
  <TD align=center nowrap>&nbsp;</TD>
  <TD width="6%">&nbsp;
  </TD>
  <TD width="2%" align=center nowrap>
<FONT size=2 face="serif">7.62</FONT>
  </TD>
  <TD width="5%">&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;</TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">Granted</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">105,000</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;</TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=center nowrap>
    <div align="right"><FONT size=2 face="serif">32.15</FONT>
    </div></TD>
  <TD align=center nowrap>&nbsp;</TD>
  <TD>&nbsp;
  </TD>
  <TD>&nbsp;</TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
    <div align="right"><FONT size=2 face="serif">10.94</FONT>
    </div></TD>
  <TD align=right nowrap>&nbsp;</TD>
  <TD align=right nowrap>&nbsp;</TD>
  <TD>&nbsp;
  </TD>
  <TD align=center nowrap>
<FONT size=2 face="serif">9.98</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;</TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">Exercised</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">(8,000</FONT>
  </TD>
  <TD align=left nowrap>
<FONT size=2 face="serif">)</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;</TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=center nowrap>
    <div align="right"><FONT size=2 face="serif">6.30</FONT>
    </div></TD>
  <TD align=center nowrap>&nbsp;</TD>
  <TD>&nbsp;
  </TD>
  <TD>&nbsp;</TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>
 <div align="right"><FONT size=2 face="serif">2.05</FONT>
  </div></TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD>&nbsp;
  </TD>
  <TD align=center nowrap>
<FONT size=2 face="serif">-</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;</TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">Forfeited/Cancelled</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=center nowrap style="border-bottom:1px solid #000000;">
    <div align="right"><FONT size=2 face="serif">-</FONT>
    </div></TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;</TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=center nowrap>
    <div align="right"><FONT size=2 face="serif">-</FONT>
    </div></TD>
  <TD align=center nowrap>&nbsp;</TD>
  <TD>&nbsp;
  </TD>
  <TD>&nbsp;</TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=center nowrap>
    <div align="right"><FONT size=2 face="serif">-</FONT>
    </div></TD>
  <TD align=center nowrap>&nbsp;</TD>
  <TD align=center nowrap>&nbsp;</TD>
  <TD>&nbsp;
  </TD>
  <TD align=center nowrap>
<FONT size=2 face="serif">-</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;</TD>
  <TD align=right nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR>
  <TD colspan=21>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">Outstanding at December 30, 2006</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap style="border-bottom:3px double #000000;">
<FONT size=2 face="serif">299,000</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp; </TD>
  <TD align=right nowrap>&nbsp;</TD>
  <TD align=right nowrap style="border-bottom:3px double #000000;">
<FONT size=2 face="serif">&#36;</FONT>
  </TD>
  <TD align=center nowrap style="border-bottom:3px double #000000;">
    <div align="right"><FONT size=2 face="serif">30.50</FONT>
    </div></TD>
  <TD align=center nowrap>&nbsp;</TD>
  <TD>&nbsp; </TD>
  <TD>&nbsp;</TD>
  <TD align=right nowrap><div style="border-bottom:3px double #000000"> <font size=2 face="serif">&#36;</font> </div></TD>
  <TD align=center nowrap>
    <div align="right">
      <div style="border-bottom:3px double #000000"><font size=2 face="serif">9.12</font> </div>
    </div></TD>
  <TD align=center nowrap>&nbsp;</TD>
  <TD align=center nowrap>&nbsp;</TD>
  <TD>&nbsp;
  </TD>
  <TD align=center nowrap><div style="border-bottom:3px double #000000"> <font size=2 face="serif">8.68</font> </div></TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;</TD>
  <TD align=right nowrap>
    <div align="left">
      <div style="border-bottom:3px double #000000"><font size=2 face="serif">&#36;</font> </div>
    </div></TD>
  <TD align=left nowrap>
 <div align="right">
   <div style="border-bottom:3px double #000000"><font size=2 face="serif">718,000</font> </div>
 </div></TD>
</TR>
<TR>
  <TD colspan=21>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">Exercisable at December 30, 2006</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap style="border-bottom:3px double #000000;">
<FONT size=2 face="serif">194 ,000</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp; </TD>
  <TD align=right nowrap>&nbsp;</TD>
  <TD align=right nowrap style="border-bottom:3px double #000000;">
<FONT size=2 face="serif">&#36;</FONT>
  </TD>
  <TD align=center nowrap style="border-bottom:3px double #000000;">
    <div align="right"><FONT size=2 face="serif">29.60</FONT>
    </div></TD>
  <TD align=center nowrap>&nbsp;</TD>
  <TD>&nbsp; </TD>
  <TD>&nbsp;</TD>
  <TD align=right nowrap><div style="border-bottom:3px double #000000"> <font size=2 face="serif">&#36;</font> </div></TD>
  <TD align=center nowrap>
    <div align="right">
      <div style="border-bottom:3px double #000000"><font size=2 face="serif">8.13</font> </div>
    </div></TD>
  <TD align=center nowrap>&nbsp;</TD>
  <TD align=center nowrap>&nbsp;</TD>
  <TD>&nbsp;
  </TD>
  <TD align=center nowrap><div style="border-bottom:3px double #000000"> <font size=2 face="serif">7.98</font> </div></TD>
  <TD>&nbsp;
  </TD>
  <TD align=right nowrap>&nbsp;</TD>
  <TD align=right nowrap>
    <div align="left">
      <div style="border-bottom:3px double #000000"><font size=2 face="serif">&#36;</font> </div>
    </div></TD>
  <TD align=left nowrap> <div align="right">
    <div style="border-bottom:3px double #000000"><font size=2 face="serif">638,000</font> </div>
  </div></TD>
</TR>
</TABLE>
<BR>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Compensation cost is recognized on a straight-line basis over the vesting period during which employees perform related services. The Company has applied a forfeitures assumption of 5%
per year in the calculation of such expense. </FONT></P>
<P align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size=2 face="serif">As of December 30, 2006, there was approximately &#36;1,080,000 of unrecognized compensation cost related to unvested stock options, which is expected to be recognized over a period of approximately four years. </FONT></P>
<P align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size=2 face="serif">The Company, generally, issues new shares upon the exercise of employee stock options. </FONT></P>
<P align="justify">
<B><FONT size=2 face="serif">6. INVESTMENT SECURITIES </FONT></B></P>
<P align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size=2 face="serif">The amortized cost, gross unrealized holding gains, gross unrealized holding losses, and fair value of available for sale debt and fixed income securities by major type and class at December 30, 2006 are as follows:
</FONT></P>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR valign="bottom">
  <TD width="22%" align=left nowrap>&nbsp;

  </TD>
  <TD width="43%">&nbsp;
  </TD>
  <TD colspan="2" align=left nowrap>
    <center>
      <B><FONT size=2 face="serif">Amortized</FONT></B>
    </center></TD>
  <TD width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  </TD>
  <TD colspan="2" align=left nowrap>
    <center>
      <B><FONT size=2 face="serif">Gross unrealized</FONT></B>
    </center></TD>
  <TD width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  </TD>
  <TD align=right nowrap colspan=2>
    <center>
      <B><FONT size=2 face="serif">Gross unrealized</FONT></B>
    </center></TD>
  <TD width="1%" align=left nowrap>&nbsp;

  </TD>
  <TD width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  </TD>
  <TD width="1%" align=left nowrap>&nbsp;

  </TD>
  <TD width="5%" align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD colspan="2" align=left nowrap style="border-bottom:1px solid #000000;">
    <center>
      <B><FONT size=2 face="serif">Cost</FONT></B>
    </center></TD>
  <TD>&nbsp;
  </TD>
  <TD colspan="2" align=left nowrap style="border-bottom:1px solid #000000;">
    <center>
      <B><FONT size=2 face="serif">holding gains</FONT></B>
    </center></TD>
  <TD>&nbsp;
  </TD>
  <TD colspan="2" align=center nowrap style="border-bottom:1px solid #000000;">
    <B><FONT size=2 face="serif">holding losses</FONT></B>  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD colspan="2" align=left nowrap style="border-bottom:1px solid #000000;">
    <center>
      <B><FONT size=2 face="serif">Fair value</FONT></B>
    </center></TD>
  </TR>
<TR>
  <TD colspan=14>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">At December 30, 2006:</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD width="1%" align=left nowrap>&nbsp;

  </TD>
  <TD width="3%" align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD width="1%" align=left nowrap>&nbsp;

  </TD>
  <TD width="8%" align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD width="1%" align=left nowrap>&nbsp;</TD>
  <TD width="8%" align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">Available for sale short-term:</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">Government debt securities</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>
<FONT size=2 face="serif">&#36;</FONT>
  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">4,441</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>
<FONT size=2 face="serif">&#36;</FONT>
  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">18</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=center nowrap>&nbsp;</TD>
  <TD align=center nowrap>
    <div align="right"><FONT size=2 face="serif">-</FONT>
    </div></TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>
<FONT size=2 face="serif">&#36;</FONT>
  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">4,459</FONT>
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">Corporate debt securities</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">7,141</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">7</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=center nowrap>&nbsp;</TD>
  <TD align=center nowrap>
    <div align="right"><FONT size=2 face="serif">-</FONT>
    </div></TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">7,148</FONT>
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">Fixed income securities</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">198</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap><div style="border-bottom:1px solid #000000">&nbsp;</div>

  </TD>
  <TD align=right nowrap><div style="border-bottom:1px solid #000000"> <font size=2 face="serif">1</font> </div></TD>
  <TD>&nbsp;
  </TD>
  <TD align=center nowrap style="border-bottom:1px solid #000000;">&nbsp;</TD>
  <TD align=center nowrap style="border-bottom:1px solid #000000;">
    <div align="right"><FONT size=2 face="serif">-</FONT>
    </div></TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">199</FONT>
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:3px double #000000;">
<FONT size=2 face="serif">&#36;</FONT>
  </TD>
  <TD align=right nowrap style="border-bottom:3px double #000000;">
<FONT size=2 face="serif">11,780</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:3px double #000000;">
<FONT size=2 face="serif">&#36;</FONT>
  </TD>
  <TD align=right nowrap style="border-bottom:3px double #000000;">
<FONT size=2 face="serif">26</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=center nowrap style="border-bottom:3px double #000000;">&nbsp;</TD>
  <TD align=center nowrap style="border-bottom:3px double #000000;">
    <div align="right"><FONT size=2 face="serif">-</FONT>
    </div></TD>
  <TD align=left nowrap style="border-bottom:3px double #000000;">&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:3px double #000000;">
<FONT size=2 face="serif">&#36;</FONT>
  </TD>
  <TD align=right nowrap style="border-bottom:3px double #000000;">
<FONT size=2 face="serif">11,806</FONT>
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">At December 30, 2006:</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">Available for sale long-term:</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;</TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">Corporate debt securities</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">&#36;</FONT>
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">1,382</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">&nbsp;

  </TD>
  <TD align=center nowrap style="border-bottom:1px solid #000000;">
    <div align="right"><FONT size=2 face="serif">-</FONT>
    </div></TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap><div style="border-bottom:1px solid #000000"><font size=2 face="serif">&#36;</font></div></TD>
  <TD align=right nowrap><div style="border-bottom:1px solid #000000"> <font size=2 face="serif">(3</font> </div></TD>
  <TD align=left nowrap><div style="border-bottom:1px solid #000000"> <font size=2 face="serif">)</font> </div></TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">&#36;</FONT>
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">1,379</FONT>
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:3px double #000000;">
<FONT size=2 face="serif">&#36;</FONT>
  </TD>
  <TD align=right nowrap style="border-bottom:3px double #000000;">
<FONT size=2 face="serif">1,382</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:3px double #000000;">&nbsp;

  </TD>
  <TD align=center nowrap style="border-bottom:3px double #000000;">
    <div align="right"><FONT size=2 face="serif">-</FONT>
    </div></TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap><div style="border-bottom:3px double #000000"><font size=2 face="serif">&#36;</font></div></TD>
  <TD align=right nowrap><div style="border-bottom:3px double #000000"> <font size=2 face="serif">(3</font> </div></TD>
  <TD align=left nowrap><div style="border-bottom:3px double #000000"> <font size=2 face="serif">)</font> </div></TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:3px double #000000;">
<FONT size=2 face="serif">&#36;</FONT>
  </TD>
  <TD align=right nowrap style="border-bottom:3px double #000000;">
<FONT size=2 face="serif">1,379</FONT>
  </TD>
</TR>
</TABLE>
<BR>
<P align="justify">
<B><FONT size=2 face="serif">7. DIVIDENDS </FONT></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">A quarterly cash dividend in the amount of &#36;0.35 per share was declared on October 12, 2004. Subsequent to October 12, 2004, quarterly cash dividends in the amount of &#36;0.35 per share
were declared on January 12, April 12, July 12 and October 11, 2005 and January 12, April 12, July 12, October 10 and December 20, 2006. Also on December 20, 2006, the Company declared a special dividend in the amount of &#36;3.00 per share. As of December 30, 2006, the Company has recorded a dividend payable of &#36;11,999,000 representing the declared but unpaid portion of the December 20, 2006 dividend. Prior
to this, the Company had not paid any cash dividends since its inception. The Company intends to continue to pay quarterly cash dividends for the foreseeable future, however, the payment of future dividends is at the discretion of the Company&#146;s
Board of Directors and is based on future earnings, cash flow, financial condition, capital requirements, changes in U.S. taxation and other relevant factors.</FONT><B><FONT size=2 face="serif"> </FONT></B></P>
<P align="center">
<FONT size=2 face="serif">9</FONT></P>

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<P STYLE="page-break-before:always"></P><PAGE><BR>

<P align="justify">
<B><FONT size=2 face="serif">8. LEASE ACCOUNTING</FONT></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Leasehold improvements funded by landlord incentives are recorded as deferred rent and amortized as reductions to lease expense of the lease term in accordance with Statement of
Financial Accounting Standards No. 13, </FONT><I><FONT size=2 face="serif">&#147;Accounting for Leases&#148;</FONT></I><FONT size=2 face="serif">. During fiscal 2006 the Company received &#36;3,500,000 in connection with the construction of two facilities in
Atlantic City, New Jersey.</FONT><B><FONT size=2 face="serif"> </FONT></B></P>
<P align="center">
<FONT size=2 face="serif">10</FONT></P>

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<P STYLE="page-break-before:always"></P><PAGE><BR>


<P align="justify">
<B><U><FONT size=2 face="serif">Item 2. Management&#146;s Discussion and Analysis of Financial Condition and </FONT></U></B><B><FONT size=2 face="serif"> </FONT></B><B><U><FONT size=2 face="serif">Results of Operations</FONT></U></B><B><FONT size=2 face="serif"> </FONT></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">In connection with the sale of three facilities, the closure of two facilities and the classification of another facility as &#147;held for sale&#148;, the operations of these restaurants have
been presented as discontinued operations for the 13-week period ended December 30, 2006, and the Company has reclassified its statements of operations and cash flow data for the prior periods presented below, in accordance with FAS 144 based on the
fact that the Company has met the criteria under FAS 144. These dispositions are discussed below in &#147;Recent Restaurant Dispositions.&#148; </FONT></P>
<P align="justify">
<B><FONT size=2 face="serif">Revenues</FONT></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">During the Company&#146;s first fiscal quarter of 2007, total revenues of &#36;28,202,000 increased 8.6% compared to total revenues of &#36;25,963,000 in the first fiscal quarter of
2006.  Revenues for the first fiscal quarter of 2007 were reduced by &#36;1,343,000 and revenues for the first fiscal quarter of 2006 were reduced by &#36;1,704,000 as a result of the sale of three facilities, the closure of two facilities and the
classification of another facility as &#147;held for sale&#148;. Revenues for the first fiscal quarter of 2007 were increased by &#36;718,000 as a result of the consolidation of one managed restaurant.</FONT></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Same store sales in Las Vegas increased by &#36;504,000 or 3.8% in the first fiscal quarter of 2007 compared to the first fiscal quarter of 2006. Same store sales in New York increased
&#36;1,229,00 or 17.2% during the first quarter. The increase in New York was principally due to unseasonably warm weather much of the quarter, as well as the general improvement in economic conditions and the public&#146;s willingness and
inclination to continue vacation and convention travel. Same store sales in Washington D.C. decreased by &#36;37,000 or 1.0% during the first quarter.</FONT></P>
<P align="justify">
<B><FONT size=2 face="serif">Costs and Expenses</FONT></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Food and beverage costs for the first quarter of 2007 as a percentage of total revenues were 24.9% compared to 24.5% in the first quarter of 2006.</FONT></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Payroll expenses as a percentage of total revenues were 31.6% for the first quarter of 2007 as compared to 32.1% in the first quarter of 2006. Occupancy expenses as a percentage of total
revenues were 14.2% during the first fiscal quarter of 2007 compared to 15.7% in the first quarter of 2006 due to the increase in total revenues during the quarter as compared to last year. Other operating costs and expenses as a percentage of total
revenues were 11.5% for the first quarter of 2007 as compared to 12.2% in the first quarter of 2006. General and administrative expenses as a percentage of total revenues were 7.0% in the first quarter of 2007 compared to 6.6% in last year&#146;s
first quarter.</FONT></P>
<P align="justify">
<B><FONT size=2 face="serif">Income Taxes</FONT></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">The provision for income taxes reflects Federal income taxes calculated on a consolidated basis and state and local income taxes calculated by each New York subsidiary on a non-consolidated
basis. Most of the restaurants owned or managed by the Company are owned or managed by separate subsidiaries. </FONT></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">For state and local income tax purposes, the losses incurred by a subsidiary may only be used to offset that subsidiary&#146;s income, with the exception of the restaurants operating in the
District of Columbia.  Accordingly, the Company&#146;s overall effective tax rate has varied depending on the level of losses incurred at individual subsidiaries.</FONT></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">The Company&#146;s overall effective tax rate in the future will be affected by factors such as the level of losses incurred at the Company&#146;s New York facilities, which cannot be
consolidated for state and local tax purposes, pre-tax income earned outside of New York City, the utilization of state and local net operating loss carryforwards and the utilization of FICA tax credits. Nevada has no state income tax and other
states in which the Company operates have income tax rates substantially lower in comparison to New York. In order to utilize more effectively tax loss carryforwards at restaurants that were unprofitable, the Company has merged certain profitable
subsidiaries with certain loss subsidiaries. </FONT></P>
<P align="justify">
<B><FONT size=2 face="serif">Liquidity and Capital Resources</FONT></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">The Company&#146;s primary source of capital has been cash provided by operations and funds available from its main bank, Bank Leumi USA. The Company from time to time also utilizes equipment
financing in connection with the construction of a restaurant and seller financing in connection with the acquisition of a restaurant. The Company utilizes capital primarily to fund the cost of developing and opening new restaurants, acquiring
existing restaurants owned by others and remodeling existing restaurants owned by the Company. </FONT><B><FONT size=2 face="serif"> </FONT></B></P>
<P align="center">
<FONT size=2 face="serif">11</FONT></P>

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<P STYLE="page-break-before:always"></P><PAGE><BR>


<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">The Company had a working capital surplus of &#36;6,752,000 at December 30, 2006 as compared to a working capital surplus of &#36;8,398,000</FONT><B><FONT size=2 face="serif"> </FONT></B><FONT size=2 face="serif">at September 30, 2006.  On February 1, 2007, the Company paid &#36;11,999,000 in dividend payments related to its special dividend of &#36;3.00 per share and its regular quarterly dividend of &#36;0.35 per share which were
declared on December 20, 2006. </FONT></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">The Company&#146;s Revolving Credit and Term Loan Facility matured on March 12, 2005.  The Company does not currently plan to enter into another credit facility and expects required cash to be
provided by operations. </FONT></P>
<P align="justify">
<B><FONT size=2 face="serif">Restaurant Expansion</FONT></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">In December 2006, we expanded our operations at the Foxwoods Resort Casino by opening </FONT><I><FONT size=2 face="serif">The Grill at Two Trees </FONT></I><FONT size=2 face="serif">in the Two
Trees Inn, a facility owned by the Mashantucket Pequot Tribal Nation and a part of the Foxwoods Resort Casino, in Ledyard, Connecticut. </FONT></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">In addition, on January 8, 2007, we began operating the </FONT><I><FONT size=2 face="serif">Durgin Park Restaurant and the Black Horse Tavern </FONT></I><FONT size=2 face="serif">in Boston,
Massachusetts.</FONT></P>
<P align="justify">
<B><FONT size=2 face="serif">Recent Restaurant Dispositions</FONT></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">The Company entered into a sale and leaseback agreement with GE Capital in November 2000 to refinance the purchase of various restaurant equipment at its food and beverage facilities at the
Desert Passage, the retail complex at the Aladdin Resort &amp; Casino in Las Vegas, Nevada. In 2002, the operations at the Aladdin were abandoned.</FONT><FONT size=2 face="monospace"> </FONT><FONT size=2 face="serif">The lease matured in November
2005 and, in connection therewith, the Company made an unprovided for lump sum payment of &#36;142,000 due under this lease. This lump sum payment is included in discontinued operations during the first quarter of fiscal 2006. </FONT></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">The Company&#146;s bar/nightclub facility Venus, located at the Venetian Casino Resort, experienced a steady decline in sales and the Company felt that a new concept was needed at this
location. During the first quarter of 2005, this bar/nightclub facility was closed and re-opened as &#147;Vivid&#148; on February 4, 2005. Total conversion costs were approximately &#36;400,000. Sales at the new bar/nightclub facility failed to
reach the level sufficient to achieve the results the Company required. As of December 31, 2005, the Company classified the assets and liabilities of this bar/nightclub facility as &#147;held for sale&#148; in accordance with Statement of Financial
Accounting Standards No. 144, &#147;Accounting for the Impairment or Disposal of Long-Lived Assets&#148; (&#147;SFAS No. 144&#148;) based on the fact that the facility has met the criteria under SFAS No. 144. Based on the offers made for this facility, the Company
recorded an impairment charge of &#36;537,000 during the fiscal quarter ended December 30, 2006. The Company recorded an operating loss of &#36;106,000 and &#36;250,000, respectively, during the 13-week periods ended December 30, 2006 and December
31, 2005. The impairment charge and operating losses are included in discontinued operations. </FONT></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Effective August 22, 2004, the Company&#146;s lease for The Saloon</FONT><I><FONT size=2 face="serif"> </FONT></I><FONT size=2 face="serif">at the Neonopolis Center at Fremont Street in Las
Vegas was converted into a management agreement whereby the Company received a management fee of &#36;7,000 per month regardless of the results of operations of this restaurant. In June 2006, the owner of the Neonopolis Center at Fremont Street sold
the building to a new entity who, on June 25, 2006, exercised its option to terminate the management agreement upon thirty days written notice to the Company.</FONT></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">On July 6, 2006, the landlord for the Vico&#146;s Burrito&#146;s fast food facility at the Venetian Casino Resort, General Growth Properties,</FONT><I><FONT size=2 face="serif">
</FONT></I><FONT size=2 face="serif">notified the Company that they were exercising their option to terminate the lease in exchange for the landlord providing the Company with the unamortized portion of the non-removable improvements located in the
facility. On August 10, 2006, the Company and the landlord entered into a letter agreement pursuant to which the landlord agreed to pay the Company &#36;200,000 for the unamortized portion of the non-removable improvements located in the
facility.</FONT></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">The Company was approached by the Venetian Casino Resort who indicated that, due to the expansion of the Grand Canal Shoppes, the Company&#146;s Lutece and Tsunami locations, as well as a
portion of the Company&#146;s Vivid location, in the Grand Canal Shoppes were desired by other tenants. The Venetian Casino Resort offered to purchase these locations from the Company for an aggregate of &#36;14,000,000. After evaluating the offer,
the Company determined that such offer made it advantageous for the Company to redeploy these assets. Effective December 1, 2006, the Company&#146;s subsidiaries that leased each of Lutece, Tsunami and Vivid locations at the Venetian Resort Hotel
Casino in Las Vegas, Nevada, entered into an agreement to sell Lutece, Tsunami and a portion of the Vivid location used by Lutece as a prep kitchen to Venetian Casino Resort, LLC for an aggregate of &#36;14,000,000. The Company&#146;s Lutece
location closed on December 3, 2006 and the Company&#146;s Tsunami location closed on January 3, 2007. The Company realized a gain of &#36;7,814,000 (&#36;5,196,000</FONT><B><FONT size=2 face="serif"> </FONT></B><FONT size=2 face="serif">after
taxes</FONT><B><FONT size=2 face="serif">, </FONT></B><FONT size=2 face="serif">or &#36;1.45 per share)</FONT><B><FONT size=2 face="serif"> </FONT></B><FONT size=2 face="serif">on the sale of these facilities. The Company recorded an operating loss
of &#36;5,000 and &#36;113,000 for the first fiscal quarters of 2007 and 2006, respectively. The gain on sale and losses are included in discontinued operations. </FONT></P>
<P align="center">
<FONT size=2 face="serif">12</FONT></P>

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<P STYLE="page-break-before:always"></P><PAGE><BR>


<P align="justify">
<B><FONT size=2 face="serif">Critical Accounting Policies</FONT></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">The preparation of financial statements requires the application of certain accounting policies, which may require the Company to make estimates and assumptions of future events. In the process
of preparing its consolidated financial statements, the Company estimates the appropriate carrying value of certain assets and liabilities, which are not readily apparent from other sources. The primary estimates underlying the Company&#146;s
financial statements include allowances for potential bad debts on accounts and notes receivable, the useful lives and recoverability of its 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 they believe 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&#146;s consolidated financial position or the results of operation, differences in actual results could be material to the financial statements.</FONT></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">The Company&#146;s critical accounting policies are described in the Company&#146;s Form 10-K for the year ended September 30, 2006. There have been no significant changes to such policies
during fiscal 2007, other than the implementation of the Emerging Issues Task Force 04-05 &#147;Whether a General Partner, or the General Partners as a Group, Controls a Limited Partnership or Similar Entity When the Limited Partners Have Certain Rights&#148; (&#147;EITF 04-5 &#148;). </FONT></P>


<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">EITF 04-5 presumes that a general partner controls a limited partnership and therefore should consolidate the partnership. This presumption can be overcome if the limited partners have kick-out or substantive participating rights. EITF 04-5 is effective for the Company&#146;s quarter ended December 30, 2006 and accordingly management has made an assessment of the limited partnership or similar entities that the company
provides management services to where it is also the general partner in the entity that owns the property. </FONT></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Effective October 1, 2006 the Company determined that one of its managed restaurants, El Rio Grande (&#147;Rio&#148;), should be presented on a consolidated basis in accordance with EITF 04-5.
As a result of consolidating the assets and liabilities of the limited partnership that owns Rio, at December 30, 3006 we recorded a cumulative effect of accounting change of &#36;10,000 which is included in the accompanying consolidated condensed
statement of operations. The cumulative effect of the accounting change primarily relates to the Company&#146;s recording of its share of undistributed retained earning as of October 1, 2006.</FONT></P>
<P align="justify">
<B><FONT size=2 face="serif">Recent Accounting Developments</FONT></B></P><P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">In June 2006, the Financial Accounting Standards Board issued FASB Interpretation No. 48, </FONT><I><FONT size=2 face="serif">Accounting for Uncertainty in Income taxes &#150; an interpretation
of FASB Statement No. 109 </FONT></I><FONT size=2 face="serif">(&#147;FIN 48&#148;). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in financial statements in accordance with FASB Statement No. 109, </FONT><I><FONT size=2 face="serif">Accounting for Income Taxes</FONT></I><FONT size=2 face="serif">. FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be
taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The Company is required to adopt the provisions of FIN 48 during fiscal years
beginning after December 15, 2006.  The Company is currently evaluating the impact of FIN 48 on its consolidated results of operations and financial position. </FONT></P>
<P align="justify">
<B><U><FONT size=2 face="serif">Item 3. Quantitative and Qualitative Disclosures about Market Risk</FONT></U></B><B><FONT size=2 face="serif"> </FONT></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">None.</FONT></P>
<P align="justify">
<B><U><FONT size=2 face="serif">Item 4. Controls and Procedures</FONT></U></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Based on their evaluation, the Company&#146;s principal executive officer and principal financial officer have concluded that the Company&#146;s disclosure controls and procedures (as defined
in Rules 13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934, as amended (the &#147;Exchange Act&#148;)) are effective as of December 30, 2006 to ensure that information required to be disclosed by the Company in reports that the
Company files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.</FONT></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">There were no changes in the Company&#146;s internal control over financial reporting during the first quarter of fiscal year 2006 that materially affected or are reasonably likely to
materially affect the Company&#146;s internal control over financial reporting.</FONT></P>
<P align="center">
<FONT size=2 face="serif">13</FONT></P>
<HR noshade width="100%" size=4>
<P align="center">&nbsp;</P>
<P STYLE="page-break-before:always"></P><PAGE><BR>


<P align="center">
<B><FONT size=2 face="serif">PART II </FONT></B><BR>
<B><FONT size=2 face="serif">OTHER INFORMATION </FONT></B></P>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR valign="bottom">
  <TD align=left nowrap>
<B><U><FONT size=2 face="serif">Item 1. Legal Proceedings</FONT></U></B>
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap><hr noshade width="100%" size=4></TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">None.</FONT>
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<B><U><FONT size=2 face="serif">Item 1A. Risk Factors</FONT></U></B>
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left>
 <div align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">The
   most significant risk factors applicable to the Company are described in Part
   I, Item 1A (Risk Factors) of the Company&#146;s Annual Report on Form 10-K for
   the fiscal year ended September 30, 2006 (the &#147;2006 Form 10-K&#148;).
   There have been no material changes to the risk factors previously disclosed
   in the 2006 Form 10-K.</FONT>  </div></TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>&nbsp;
</TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<B><U><FONT size=2 face="serif">Item 2. Unregistered Sales of Equity Securities and Use of Proceeds</FONT></U></B>
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">None.</FONT>
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<B><U><FONT size=2 face="serif">Item 3. Defaults upon Senior Securities</FONT></U></B>
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">None.</FONT>
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<B><U><FONT size=2 face="serif">Item 4. Submissions of Matters to a Vote of Security Holders</FONT></U></B>
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">None.</FONT>
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<B><U><FONT size=2 face="serif">Item 5. Other Information</FONT></U></B>
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">None.</FONT>
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<B><U><FONT size=2 face="serif">Item 6. Exhibits</FONT></U></B>
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">(a) Exhibits</FONT>
  </TD>
</TR>
</TABLE>
<BR>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR>
  <TD width="2%" valign=top nowrap>
<FONT size=2 face="serif">31.1&nbsp;&nbsp;</FONT></TD>
  <TD width=98%>
<P align="justify"><FONT size=2 face="serif">Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.</FONT></P>  </TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>
<FONT size=2 face="serif">31.2</FONT></TD>
  <TD>
<P align="justify"><FONT size=2 face="serif">Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.</FONT></P>  </TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>
<FONT size=2 face="serif">32</FONT></TD>
  <TD>
<P align="justify"><FONT size=2 face="serif">Certificate of Chief Executive and Chief Financial Officers</FONT></P>  </TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR></TABLE>
<P align="center">
<FONT size=2 face="serif">14</FONT></P>

<HR noshade width="100%" size=4>



<P STYLE="page-break-before:always"></P><PAGE><BR>


<P align="center">
<B><U><FONT size=2 face="serif">SIGNATURES</FONT></U></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
</FONT></P>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR valign="bottom">
  <TD width=5% align=left nowrap>
<FONT size=2 face="serif">Date:</FONT>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
  <TD width=95% align=left nowrap>
<FONT size=2 face="serif">February 13, 2007</FONT>
  </TD>
</TR>
<TR>
  <TD colspan=2>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>
<B><FONT size=2 face="serif">ARK RESTAURANTS CORP.</FONT></B>
  </TD>
</TR>
<TR>
  <TD colspan=2>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">By:</FONT>
  </TD>
  <TD align=left nowrap>
<U><FONT size=2 face="serif">/s/ Michael Weinstein</FONT></U>
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>
<FONT size=2 face="serif">Michael Weinstein</FONT>
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>
<FONT size=2 face="serif">Chairman, President &amp; Chief Executive Officer</FONT>
  </TD>
</TR>
<TR>
  <TD colspan=2>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">By:</FONT>
  </TD>
  <TD align=left nowrap>
<U><FONT size=2 face="serif">/s/ Robert J. Stewart</FONT></U>
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>
<FONT size=2 face="serif">Robert J. Stewart</FONT>
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>&nbsp;

  </TD>
  <TD align=left nowrap>
<FONT size=2 face="serif">Chief Financial Officer</FONT>
  </TD>
</TR>
</TABLE>
<BR>
<P align="center">
<FONT size=2 face="serif">15</FONT></P>

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<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>2
<FILENAME>c46771_ex31-1.htm
<TEXT>

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<P align="right">
<B><FONT size=2 face="serif">EXHIBIT 31.1</FONT></B></P>
<P align="center">
<B><FONT size=2 face="serif">CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO</FONT></B><BR>
<B><FONT size=2 face="serif">SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 </FONT></B><FONT size=2 face="serif"> </FONT></P>
<P align="justify">
<FONT size=2 face="serif">I, Michael Weinstein, President and Chief Executive Officer of Ark Restaurants Corp., certify that:</FONT></P>
<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
  <TD nowrap valign=top>
<FONT size=2 face="serif">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
  <TD width=100% colspan=2>
<P align="justify"><FONT size=2 face="serif">I have reviewed this quarterly report on Form 10-Q of Ark Restaurants Corp.</FONT></P>
  </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>
<FONT size=2 face="serif">2.</FONT></TD>
  <TD width=100% colspan=2>
<P align="justify"><FONT size=2 face="serif">Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period covered by this report;</FONT></P>
  </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>
<FONT size=2 face="serif">3.</FONT></TD>
  <TD width=100% colspan=2>
<P align="justify"><FONT size=2 face="serif">Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this report;</FONT></P>
  </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>
<FONT size=2 face="serif">4.</FONT></TD>
  <TD width=100% colspan=2>
<P align="justify"><FONT size=2 face="serif">The registrant&#146;s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for
the registrant and have:</FONT></P>
  </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>  <TD nowrap valign=top>
<FONT size=2 face="serif">a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
  <TD width=100%>
<P align="justify"><FONT size=2 face="serif">Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;</FONT></P>
  </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>  <TD nowrap valign=top>
<FONT size=2 face="serif">b)</FONT></TD>
  <TD width=100%>
<P align="justify"><FONT size=2 face="serif">Evaluated the effectiveness of the registrant&#146;s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as
of the end of the period covered by this report based on such evaluation; and</FONT></P>
  </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>  <TD nowrap valign=top>
<FONT size=2 face="serif">c)</FONT></TD>
  <TD width=100%>
<P align="justify"><FONT size=2 face="serif">Disclosed in this report any change in the registrant&#146;s internal control over financial reporting that occurred during the registrant&#146;s most recent fiscal quarter (the registrant&#146;s fourth
fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant&#146;s internal control over financial reporting; and</FONT></P>
  </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>
<FONT size=2 face="serif">5.</FONT></TD>
  <TD width=100% colspan=2>
<P align="justify"><FONT size=2 face="serif">The registrant&#146;s other certifying
    officer(s) and I have disclosed, based on our most recent evaluation of internal
    control over financial reporting, to the registrant&#146;s accountants and
    the audit committee of the registrant&#146;s board of directors (or persons
    performing the equivalent functions):</FONT></P>  </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR>
<TR>
  <TD nowrap valign=top>&nbsp;</TD>
  <TD nowrap valign=top>
<FONT size=2 face="serif">a)</FONT></TD>
  <TD width=100%>
<P align="justify"><FONT size=2 face="serif">All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant&#146;s ability
to record, process, summarize and report financial information; and</FONT></P>
  </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
  <TD nowrap valign=top>
<FONT size=2 face="serif">b)</FONT></TD>
  <TD width=100%>
<P align="justify"><FONT size=2 face="serif">Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant&#146;s internal control over financial reporting.</FONT></P>
  </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<P align="justify">
<FONT size=2 face="serif">Dated: February 13, 2007 </FONT></P>
<TABLE border=0 cellspacing=0 cellpadding=0>
<TR valign="bottom">
  <TD align=left width=100% nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">/s/ MICHAEL WEINSTEIN</FONT>
  </TD>
</TR>
<TR>
  <TD>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left width=100% nowrap>
<B><FONT size=2 face="serif">Michael Weinstein</FONT></B>
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left width=100% nowrap>
<I><FONT size=2 face="serif">Chairman, President and Chief Executive Officer</FONT></I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  </TD>
</TR>
</TABLE>
<P align="justify">&nbsp;</P>

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<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>3
<FILENAME>c46771_ex31-2.htm
<TEXT>

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<P align="right">
<B><FONT size=2 face="serif">EXHIBIT 31.2</FONT></B></P>
<P align="center">
<B><FONT size=2 face="serif">CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO</FONT></B><BR>
<B><FONT size=2 face="serif">SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 </FONT></B><FONT size=2 face="serif"> </FONT></P>
<P align="justify">
<FONT size=2 face="serif">I, Robert Stewart, Chief Financial Officer of Ark Restaurants Corp., certify that:</FONT></P>
<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
  <TD nowrap valign=top>
<FONT size=2 face="serif">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
  <TD width=100% colspan=2>
<P align="justify"><FONT size=2 face="serif">I have reviewed this quarterly report on Form 10-Q of Ark Restaurants Corp.</FONT></P>
  </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>
<FONT size=2 face="serif">2.</FONT></TD>
  <TD width=100% colspan=2>
<P align="justify"><FONT size=2 face="serif">Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period covered by this report;</FONT></P>
  </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>
<FONT size=2 face="serif">3.</FONT></TD>
  <TD width=100% colspan=2>
<P align="justify"><FONT size=2 face="serif">Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this report;</FONT></P>
  </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>
<FONT size=2 face="serif">4.</FONT></TD>
  <TD width=100% colspan=2>
<P align="justify"><FONT size=2 face="serif">The registrant&#146;s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for
the registrant and have:</FONT></P>
  </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>  <TD nowrap valign=top>
<FONT size=2 face="serif">a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
  <TD width=100%>
<P align="justify"><FONT size=2 face="serif">Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;</FONT></P>
  </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>  <TD nowrap valign=top>
<FONT size=2 face="serif">b)</FONT></TD>
  <TD width=100%>
<P align="justify"><FONT size=2 face="serif">Evaluated the effectiveness of the registrant&#146;s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as
of the end of the period covered by this report based on such evaluation; and</FONT></P>
  </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>  <TD nowrap valign=top>
<FONT size=2 face="serif">c)</FONT></TD>
  <TD width=100%>
<P align="justify"><FONT size=2 face="serif">Disclosed in this report any change in the registrant&#146;s internal control over financial reporting that occurred during the registrant&#146;s most recent fiscal quarter (the registrant&#146;s fourth
fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant&#146;s internal control over financial reporting; and</FONT></P>
  </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>
<FONT size=2 face="serif">5.</FONT></TD>
  <TD width=100% colspan=2>
<P align="justify"><FONT size=2 face="serif">The registrant&#146;s other certifying
    officer(s) and I have disclosed, based on our most recent evaluation of internal
    control over financial reporting, to the registrant&#146;s accountants and
    the audit committee of the registrant&#146;s board of directors (or persons
    performing the equivalent functions):</FONT></P>  </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR>
<TR>
  <TD nowrap valign=top>&nbsp;</TD>
  <TD nowrap valign=top>
<FONT size=2 face="serif">a)</FONT></TD>
  <TD width=100%>
<P align="justify"><FONT size=2 face="serif">All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant&#146;s ability
to record, process, summarize and report financial information; and</FONT></P>
  </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
  <TD nowrap valign=top>
<FONT size=2 face="serif">b)</FONT></TD>
  <TD width=100%>
<P align="justify"><FONT size=2 face="serif">Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant&#146;s internal control over financial reporting.</FONT></P>
  </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<P align="justify">
<FONT size=2 face="serif">Dated: February 13, 2007 </FONT></P>
<TABLE border=0 cellspacing=0 cellpadding=0>
<TR valign="bottom">
  <TD align=left width=100% nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">/s/ Robert J. Stewart</FONT>
  </TD>
</TR>
<TR>
  <TD>&nbsp;

  </TD>
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  <TD align=left width=100% nowrap>
<B><FONT size=2 face="serif">Robert J. Stewart</FONT></B>
  </TD>
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  <TD align=left width=100% nowrap>
<I><FONT size=2 face="serif">Chief Financial Officer</FONT></I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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<TYPE>EX-32
<SEQUENCE>4
<FILENAME>c46771_ex32-1.htm
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<P align="right">
<B><FONT size=2 face="serif">Exhibit 32</FONT></B></P>
<P align="center">
<B><FONT size=2 face="serif">Certificate of Chief Executive and Chief Financial Officers</FONT></B></P>
<P align="justify">
<B><FONT size=2 face="serif">The following statement is being made to the Securities and Exchange Commission solely for purposes of Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350), which carries with it certain criminal penalties in
the event of a knowing or willful misrepresentation.</FONT></B><FONT size=2 face="serif"> </FONT></P>
<P align="justify">
<FONT size=2 face="serif"><br>
<br>
Securities and Exchange Commission</FONT><BR>
<FONT size=2 face="serif">450 Fifth Street, NW </FONT><BR>
<FONT size=2 face="serif">Washington, DC 20549 </FONT><BR>
<BR>
<FONT size=2 face="serif">Re: Ark Restaurants Corp. </FONT><BR>
<BR>
<FONT size=2 face="serif">Ladies and Gentlemen: </FONT></P>
<P align="justify">
<FONT size=2 face="serif">In accordance with the requirements of Section 906 of the Sarbanes-Oxley Act of 2002 (18 USC 1350), each of the undersigned hereby certifies that: </FONT></P>
<div style="margin-left:40px">
  <p align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<font size=2 face="serif">(i) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;this
      report on Form 10-Q fully complies with the requirements of section 13(a)
      or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d));
      and </font></p>
  <p align="justify"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<font size=2 face="serif">(ii) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
      information contained in this report fairly presents, in all material respects,
      the financial condition and results of operations of Ark Restaurants Corp. </font></p>
</div>
<P align="justify"><FONT size=2 face="serif"><br>
  <br>
Dated as of this 13th day of February 2007. </FONT></P>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR valign="bottom">
  <TD width="21%" align=left nowrap>&nbsp;</TD>
  <TD width="28%">&nbsp;</TD>
  <TD width="10%" align=left nowrap>&nbsp;</TD>
  <TD width="41%" align=left nowrap>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">/s/ Michael Weinstein</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">/s/ Robert J. Stewart</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">Michael Weinstein</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>
<FONT size=2 face="serif">Robert J. Stewart</FONT>
  </TD>
  <TD align=left nowrap>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">Chairman, President and Chief Executive Officer</FONT>
  </TD>
  <TD>&nbsp;
  </TD>
  <TD align=left nowrap>
<FONT size=2 face="serif">Chief Financial Officer</FONT>
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
  <TD align=left nowrap>&nbsp;</TD>
</TR>
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<p><BR>
    </p>
<p>&nbsp; </p>
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