-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
 MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 Iz7lQCYLzr3epFLdmFWd6qJZRE8KBjeFSecpkLJtnM3ise/FArrpanUW7+1cQo0x
 xwisUxXOV9Cfq65INmDIfA==

<SEC-DOCUMENT>0000930413-07-004442.txt : 20070515
<SEC-HEADER>0000930413-07-004442.hdr.sgml : 20070515
<ACCEPTANCE-DATETIME>20070515160840
ACCESSION NUMBER:		0000930413-07-004442
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20070331
FILED AS OF DATE:		20070515
DATE AS OF CHANGE:		20070515

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:		07853337

	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>c48524_10q.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>

<HR noshade align="center" width="10%" size=1>

<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)<br>
OF THE SECURITIES EXCHANGE ACT OF 1934 </FONT></P>
<P align="center">
<FONT size=2 face="serif">For the quarterly period ended March 31, 2007 </FONT></P>
<P align="center">
<FONT size=2 face="serif">Commission file number 0-14030 </FONT></P>

<table width="60%"  border="0" align=center>
  <tr>
    <td align=center nowrap style="border-bottom:1px solid #000000;"><B><FONT size=2 face="serif">ARK RESTAURANTS CORP.</FONT></B></td>
  </tr>
  <tr>
    <td align=center><FONT size=2 face="serif">(Exact name of registrant as specified in its
    charter)</FONT><FONT size=2 face="serif">&nbsp; </FONT></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
  </tr>
</table>
<TABLE border=0 cellspacing=1 cellpadding=0 width=100%>
<TR valign="bottom">
  <TD align=center width=33% nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">New York</FONT>&nbsp;
  </TD>
  <TD width=40%>&nbsp;
  </TD>
  <TD width=27% nowrap align=center style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">13-3156768</FONT>
  </TD>
</TR>
<TR valign="bottom">
  <TD align=center width=33% nowrap>
<FONT size=2 face="serif">(State or other jurisdiction of</FONT>&nbsp;
  </TD>
  <TD width=40%>&nbsp;
  </TD>
  <TD align=center width=27% nowrap>
<FONT size=2 face="serif">(I.R.S. Employer</FONT>&nbsp;
  </TD>
</TR>
<TR valign="bottom">
  <TD align=center width=33% nowrap>
<FONT size=2 face="serif">incorporation or organization)</FONT>&nbsp;
  </TD>
  <TD width=40%>&nbsp;
  </TD>
  <TD align=center width=27% nowrap>
<FONT size=2 face="serif">Identification No.)</FONT>&nbsp;
  </TD>
</TR>
<TR>
  <TD colspan=3>&nbsp;

  </TD>
</TR>
<TR>
  <TD colspan=3>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=center width=33% nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">85 Fifth Avenue, New York, New York</FONT>&nbsp;
  </TD>
  <TD width=40%>&nbsp;
  </TD>
  <TD align=center width=27% nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">10003</FONT>&nbsp;
  </TD>
</TR>
<TR valign="bottom">
  <TD align=center width=33% nowrap>
<FONT size=2 face="serif">(Address of principal executive offices)</FONT>&nbsp;
  </TD>
  <TD width=40%>&nbsp;
  </TD>
  <TD align=center width=27% nowrap>
<FONT size=2 face="serif">(Zip Code)</FONT>&nbsp;
  </TD>
</TR>
</TABLE><BR>
<P align="justify">
<FONT size=2 face="serif">Registrant&#146;s telephone number, including area code: _____<u>(212) 206-8800</u></FONT>_____</P>
<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.</FONT></P>
<P align="justify">
<FONT size=2 face="serif">Yes </FONT><U><FONT size=2 face="serif">&nbsp;&nbsp;&nbsp;&nbsp;X&nbsp;&nbsp;&nbsp;&nbsp;</FONT></U> No  <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></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" >
  <tr>
    <td width="18%"><FONT size=2 face="serif">Large accelerated filer _____</FONT></td>
    <td width="15%"><FONT size=2 face="serif">Accelerated filer _____</FONT></td>
    <td width="67%"><FONT size=2 face="serif">Non-accelerated filer</FONT> <FONT size=2 face="serif"><U>&nbsp;&nbsp;&nbsp;X&nbsp;&nbsp;&nbsp;</U></FONT></td>
  </tr>
</table>


<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> <FONT size=2 face="serif"><U>&nbsp;&nbsp;&nbsp;X&nbsp;&nbsp;&nbsp;</U></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 border=0 cellspacing=1 cellpadding=0 width=100%>
<TR valign="bottom">
  <TD align=center width=17% nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">Class</FONT>&nbsp;
  </TD>
  <TD width=44%>&nbsp;
  </TD>
  <TD align=center width=39% nowrap>
<U><FONT size=2 face="serif">Outstanding shares at April 24, 2007</FONT></U>&nbsp;
  </TD>
</TR>
<TR valign="bottom">
  <TD align=center width=17% nowrap>
<FONT size=2 face="serif">(Common stock, &#36;.01 par value)</FONT>&nbsp;
  </TD>
  <TD width=44%>&nbsp;
  </TD>
  <TD align=center width=39% nowrap>
<FONT size=2 face="serif">3,586,799</FONT>&nbsp;
  </TD>
</TR>
</TABLE>
<br>
<HR noshade align="center" width="100%" size=4>
<P align="left" style="page-break-before:always"></P>
<PAGE>

<P align="center">
<U><FONT size=2 face="serif">SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS</FONT></U><FONT size=2 face="serif"> </FONT></P>
<P align="justify">

&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;<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;<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;<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;<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">
<FONT size=2 face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 align="center" width="100%" size=4>
<P align="left" style="page-break-before:always"></P>
<PAGE>

<P align="center">
<B><FONT size=2 face="serif">PART I<br>
<br>
FINANCIAL INFORMATION</FONT></B></P>
<P align="justify">
<B><U><FONT size=2 face="serif">Item 1. Financial Statements</FONT></U></B><BR>
<BR>
<B><FONT size=2 face="serif">ARK RESTAURANTS CORP. AND SUBSIDIARIES</FONT></B><BR>
<B><FONT size=2 face="serif">CONSOLIDATED CONDENSED BALANCE SHEETS </FONT></B><BR>
<U><FONT size=2 face="serif">(Dollars and shares in Thousands)</FONT></U></P>
<table width="100%" border=0 cellpadding=0 cellspacing=0>
  <tr valign="bottom">
    <td align=left nowrap><font size="2">&nbsp;</font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=center nowrap style="border-bottom:1px solid #000000;"><font size=2 face="serif">March 31,<br>
      2007</font></td>
    <td><font size="2">&nbsp;</font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=center nowrap style="border-bottom:1px solid #000000;"><font size=2 face="serif">September 30,<br>
2006</font></td>
  </tr>
  <tr valign="bottom">
    <td align=left nowrap><font size="2" face="serif"><u>ASSETS</u></font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=center nowrap><font size=2 face="serif">(unaudited)</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=center nowrap><font size=2 face="serif">(see Note 1)</font><font size="2">&nbsp; </font></td>
  </tr>
  <tr valign="bottom" bgcolor="#E5FFFF">
    <td align=left nowrap><font size=2 face="serif">CURRENT ASSETS:</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=left nowrap><font size="2">&nbsp;</font></td>
    <td><font size="2">&nbsp;</font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=left nowrap><font size="2">&nbsp;</font></td>
  </tr>
  <tr valign="bottom">
    <td align=left nowrap><font size=2 face="serif">&nbsp;&nbsp;Cash and cash
    equivalents</font><font size="2">&nbsp; </font></td>
    <td><div align="left"><font size=2 face="serif">&#36;</font></div></td>
    <td align=right nowrap><font size=2 face="serif"> 1,971</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td><div align="left"><font size=2 face="serif">&#36; </font></div></td>
    <td align=right nowrap><font size=2 face="serif">7,671</font><font size="2">&nbsp; </font></td>
  </tr>
  <tr valign="bottom" bgcolor="#E5FFFF">
    <td align=left nowrap><font size=2 face="serif">&nbsp;&nbsp;Short-term investments</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=right nowrap><font size=2 face="serif">5,113</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=right nowrap><font size=2 face="serif">-</font><font size="2">&nbsp; </font></td>
  </tr>
  <tr valign="bottom">
    <td align=left nowrap><font size=2 face="serif">&nbsp;&nbsp;Accounts receivable</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=right nowrap><font size=2 face="serif">3,543</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=right nowrap><font size=2 face="serif">2,587</font><font size="2">&nbsp; </font></td>
  </tr>
  <tr valign="bottom" bgcolor="#E5FFFF">
    <td align=left nowrap><font size=2 face="serif">&nbsp;&nbsp;Related party
    receivables</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=right nowrap><font size=2 face="serif">1,317</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=right nowrap><font size=2 face="serif">1,446</font><font size="2">&nbsp; </font></td>
  </tr>
  <tr valign="bottom">
    <td align=left nowrap><font size=2 face="serif">&nbsp;&nbsp;Employee receivables</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=right nowrap><font size=2 face="serif">369</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=right nowrap><font size=2 face="serif">394</font><font size="2">&nbsp; </font></td>
  </tr>
  <tr valign="bottom" bgcolor="#E5FFFF">
    <td align=left nowrap><font size=2 face="serif">&nbsp;&nbsp;Current portion
        of long-term receivables</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=right nowrap><font size=2 face="serif">111</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=right nowrap><font size=2 face="serif">131</font><font size="2">&nbsp; </font></td>
  </tr>
  <tr valign="bottom">
    <td align=left nowrap><font size=2 face="serif">&nbsp;&nbsp;Inventories</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=right nowrap><font size=2 face="serif">1,480</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=right nowrap><font size=2 face="serif">1,675</font><font size="2">&nbsp; </font></td>
  </tr>
  <tr valign="bottom" bgcolor="#E5FFFF">
    <td align=left nowrap><font size=2 face="serif">&nbsp;&nbsp;Prepaid expenses
        and other current assets</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=right nowrap><font size=2 face="serif">892</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=right nowrap><font size=2 face="serif">700</font><font size="2">&nbsp; </font></td>
  </tr>
  <tr valign="bottom">
    <td align=left nowrap><font size=2 face="serif">&nbsp;&nbsp;Assets held for
    sale</font><font size="2">&nbsp; </font></td>
    <td style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font></td>
    <td align=right nowrap style="border-bottom:1px solid #000000;"><font size=2 face="serif">1,120</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font></td>
    <td align=right nowrap style="border-bottom:1px solid #000000;"><font size=2 face="serif">1,657</font><font size="2">&nbsp; </font></td>
  </tr>
  <tr valign="bottom" bgcolor="#E5FFFF">
    <td align=left nowrap><font size=2 face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
    current assets</font><font size="2">&nbsp; </font></td>
    <td style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font></td>
    <td align=right nowrap style="border-bottom:1px solid #000000;"><font size=2 face="serif">15,916</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font></td>
    <td align=right nowrap style="border-bottom:1px solid #000000;"><font size=2 face="serif">16,261</font><font size="2">&nbsp; </font></td>
  </tr>
  <tr valign="bottom">
    <td align=left nowrap><font size=2 face="serif">LONG-TERM RECEIVABLES</font><font size="2">&nbsp; </font></td>
    <td style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font></td>
    <td align=right nowrap style="border-bottom:1px solid #000000;"><font size=2 face="serif">410</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font></td>
    <td align=right nowrap style="border-bottom:1px solid #000000;"><font size=2 face="serif">1,025</font><font size="2">&nbsp; </font></td>
  </tr>
  <tr valign="bottom" bgcolor="#E5FFFF">
    <td align=left nowrap><font size=2 face="serif">FIXED ASSETS - At cost:</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=left nowrap><font size="2">&nbsp;</font></td>
    <td><font size="2">&nbsp;</font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=left nowrap><font size="2">&nbsp;</font></td>
  </tr>
  <tr valign="bottom">
    <td align=left nowrap><font size=2 face="serif">&nbsp;&nbsp;Leasehold improvements</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=right nowrap><font size=2 face="serif">27,448</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=right nowrap><font size=2 face="serif">34,807</font><font size="2">&nbsp; </font></td>
  </tr>
  <tr valign="bottom" bgcolor="#E5FFFF">
    <td align=left nowrap><font size=2 face="serif">&nbsp;&nbsp;Furniture, fixtures
    and equipment</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=right nowrap><font size=2 face="serif">24,937</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=right nowrap><font size=2 face="serif">28,408</font><font size="2">&nbsp; </font></td>
  </tr>
  <tr valign="bottom">
    <td align=left nowrap><font size=2 face="serif">&nbsp;&nbsp;Construction
    in progress</font><font size="2">&nbsp; </font></td>
    <td style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font></td>
    <td align=right nowrap style="border-bottom:1px solid #000000;"><font size=2 face="serif">891</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font></td>
    <td align=right nowrap style="border-bottom:1px solid #000000;"><font size=2 face="serif">159</font><font size="2">&nbsp; </font></td>
  </tr>
  <tr valign="bottom" bgcolor="#E5FFFF">
    <td align=left nowrap><font size="2">&nbsp;</font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=right nowrap><font size=2 face="serif">53,276</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=right nowrap><font size=2 face="serif">63,374</font><font size="2">&nbsp; </font></td>
  </tr>
  <tr valign="bottom">
    <td align=left nowrap><font size=2 face="serif">&nbsp;&nbsp;Less accumulated
        depreciation and</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=left nowrap><font size="2">&nbsp;</font></td>
    <td><font size="2">&nbsp;</font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=left nowrap><font size="2">&nbsp;</font></td>
  </tr>
  <tr valign="bottom" bgcolor="#E5FFFF">
    <td align=left nowrap><font size=2 face="serif">&nbsp;&nbsp;&nbsp;&nbsp;amortization</font><font size="2">&nbsp; </font></td>
    <td style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font></td>
    <td align=right nowrap style="border-bottom:1px solid #000000;"><font size=2 face="serif">33,932</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font></td>
    <td align=right nowrap style="border-bottom:1px solid #000000;"><font size=2 face="serif">39,230</font><font size="2">&nbsp; </font></td>
  </tr>
  <tr valign="bottom">
    <td align=left nowrap><font size=2 face="serif">FIXED ASSETS - Net</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=right nowrap><font size=2 face="serif">19,344</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=right nowrap><font size=2 face="serif">24,144</font><font size="2">&nbsp; </font></td>
  </tr>
  <tr valign="bottom" bgcolor="#E5FFFF">
    <td align=left nowrap><font size=2 face="serif">INTANGIBLE ASSETS - Net</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=right nowrap><font size=2 face="serif">91</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=right nowrap><font size=2 face="serif">100</font><font size="2">&nbsp; </font></td>
  </tr>
  <tr valign="bottom">
    <td align=left nowrap><font size=2 face="serif">GOODWILL</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=right nowrap><font size=2 face="serif">5,828</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=right nowrap><font size=2 face="serif">3,440</font><font size="2">&nbsp; </font></td>
  </tr>
  <tr valign="bottom" bgcolor="#E5FFFF">
    <td align=left nowrap><font size=2 face="serif">DEFERRED INCOME TAXES</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=right nowrap><font size=2 face="serif">6,388</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=right nowrap><font size=2 face="serif">6,305</font><font size="2">&nbsp; </font></td>
  </tr>
  <tr valign="bottom">
    <td align=left nowrap><font size=2 face="serif">OTHER ASSETS</font><font size="2">&nbsp; </font></td>
    <td style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font></td>
    <td align=right nowrap style="border-bottom:1px solid #000000;"><font size=2 face="serif">320</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font></td>
    <td align=right nowrap style="border-bottom:1px solid #000000;"><font size=2 face="serif">845</font><font size="2">&nbsp; </font></td>
  </tr>
  <tr valign="bottom" bgcolor="#E5FFFF">
    <td align=left nowrap><font size=2 face="serif">TOTAL</font><font size="2">&nbsp; </font></td>
    <td style="border-bottom:3px solid #000000;"><font size=2 face="serif">&#36;</font></td>
    <td align=right nowrap style="border-bottom:3px solid #000000;"><font size=2 face="serif"> 48,297</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td style="border-bottom:3px solid #000000;"><font size=2 face="serif">&#36;</font></td>
    <td align=right nowrap style="border-bottom:3px solid #000000;"><font size=2 face="serif"> 52,120</font><font size="2">&nbsp; </font></td>
  </tr>
  <tr valign="bottom">
    <td align=left nowrap><font size="2" face="serif"><u>LIABILITIES AND
    SHAREHOLDERS&#146; EQUITY</u></font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=left nowrap><font size="2">&nbsp;</font></td>
    <td><font size="2">&nbsp;</font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=left nowrap><font size="2">&nbsp;</font></td>
  </tr>
  <tr valign="bottom" bgcolor="#E5FFFF">
    <td align=left nowrap><font size=2 face="serif">CURRENT LIABILITIES:</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=left nowrap><font size="2">&nbsp;</font></td>
    <td><font size="2">&nbsp;</font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=left nowrap><font size="2">&nbsp;</font></td>
  </tr>
  <tr valign="bottom">
    <td align=left nowrap><font size=2 face="serif">&nbsp;&nbsp;Accounts payable
    - trade</font><font size="2">&nbsp; </font></td>
    <td><font size=2 face="serif">&#36; </font></td>
    <td align=right nowrap><font size=2 face="serif">1,912</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td><font size=2 face="serif">&#36;</font></td>
    <td align=right nowrap><font size=2 face="serif"> 2,193</font><font size="2">&nbsp; </font></td>
  </tr>
  <tr valign="bottom" bgcolor="#E5FFFF">
    <td align=left nowrap><font size=2 face="serif">&nbsp;&nbsp;Accrued expenses
        and other current liabilities</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=right nowrap><font size=2 face="serif">4,004</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=right nowrap><font size=2 face="serif">4,218</font><font size="2">&nbsp; </font></td>
  </tr>
  <tr valign="bottom">
    <td align=left nowrap><font size=2 face="serif">&nbsp;&nbsp;Accrued income
    taxes</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=right nowrap><font size=2 face="serif">2,696</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=right nowrap><font size=2 face="serif">1,452</font><font size="2">&nbsp; </font></td>
  </tr>
  <tr valign="bottom" bgcolor="#E5FFFF">
    <td align=left nowrap><font size=2 face="serif">&nbsp;&nbsp;Current portion
    of note payable</font><font size="2">&nbsp; </font></td>
    <td style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font></td>
    <td align=right nowrap style="border-bottom:1px solid #000000;"><font size=2 face="serif">175</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font></td>
    <td align=right nowrap style="border-bottom:1px solid #000000;"><font size=2 face="serif">-</font><font size="2">&nbsp; </font></td>
  </tr>
  <tr valign="bottom">
    <td align=left nowrap><font size=2 face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
    current liabilities</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=right nowrap><font size=2 face="serif">8,787</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=right nowrap><font size=2 face="serif">7,863</font><font size="2">&nbsp; </font></td>
  </tr>
  <tr bgcolor="#E5FFFF">
    <td colspan=6><font size="2">&nbsp;</font></td>
  </tr>
  <tr valign="bottom">
    <td align=left nowrap><font size=2 face="serif">OPERATING LEASE DEFERRED
        CREDIT</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=right nowrap><font size=2 face="serif">4,015</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=right nowrap><font size=2 face="serif">4,203</font><font size="2">&nbsp; </font></td>
  </tr>
  <tr valign="bottom" bgcolor="#E5FFFF">
    <td align=left nowrap><font size=2 face="serif">NOTE PAYABLE</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=right nowrap><font size=2 face="serif">797</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=right nowrap><font size=2 face="serif">-</font><font size="2">&nbsp; </font></td>
  </tr>
  <tr valign="bottom">
    <td align=left nowrap><font size=2 face="serif">OTHER LIABILITIES</font><font size="2">&nbsp; </font></td>
    <td style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font></td>
    <td align=right nowrap style="border-bottom:1px solid #000000;"><font size=2 face="serif">265</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font></td>
    <td align=right nowrap style="border-bottom:1px solid #000000;"><font size=2 face="serif">301</font><font size="2">&nbsp; </font></td>
  </tr>
  <tr valign="bottom" bgcolor="#E5FFFF">
    <td height="21" align=left nowrap><font size=2 face="serif">TOTAL LIABILITIES</font><font size="2">&nbsp; </font></td>
    <td style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font></td>
    <td align=right nowrap style="border-bottom:1px solid #000000;"><font size=2 face="serif">13,864</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font></td>
    <td align=right nowrap style="border-bottom:1px solid #000000;"><font size=2 face="serif">12,367</font><font size="2">&nbsp; </font></td>
  </tr>
  <tr valign="bottom">
    <td align=left nowrap><font size=2 face="serif">LIMITED PARTNER INTEREST
        IN VARIABLE INTEREST ENTITY</font></td>
    <td style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font></td>
    <td align=right nowrap style="border-bottom:1px solid #000000;"><font size=2 face="serif">23</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font></td>
    <td align=right nowrap style="border-bottom:1px solid #000000;"><font size=2 face="serif">-</font><font size="2">&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=6><font size="2">&nbsp;</font></td>
  </tr>
  <tr valign="bottom" bgcolor="#E5FFFF">
    <td align=left nowrap><font size=2 face="serif">COMMITMENTS AND CONTINGENCIES</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=left nowrap><font size="2">&nbsp;</font></td>
    <td><font size="2">&nbsp;</font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=left nowrap><font size="2">&nbsp;</font></td>
  </tr>
  <tr>
    <td colspan=6><font size="2">&nbsp;</font></td>
  </tr>
  <tr valign="bottom" bgcolor="#E5FFFF">
    <td align=left nowrap><font size=2 face="serif">SHAREHOLDERS&#146; EQUITY:</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=left nowrap><font size="2">&nbsp;</font></td>
    <td><font size="2">&nbsp;</font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=left nowrap><font size="2">&nbsp;</font></td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size=2 face="serif">&nbsp;&nbsp;Common stock, par value &#36;.01
        per share - authorized, 10,000 shares;
        issued, 5,657 shares and 5,632 at March 31, 2007<br>
		&nbsp;&nbsp;&nbsp;&nbsp;and September
        30, 2006, respectively</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=right nowrap><font size=2 face="serif">57</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=right nowrap><font size=2 face="serif">57</font><font size="2">&nbsp; </font></td>
  </tr>
  <tr valign="bottom" bgcolor="#E5FFFF">
    <td align=left nowrap><font size=2 face="serif">&nbsp;&nbsp;Additional paid-in
    capital</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=right nowrap><font size=2 face="serif">21,312</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=right nowrap><font size=2 face="serif">20,403</font><font size="2">&nbsp; </font></td>
  </tr>
  <tr valign="bottom">
    <td align=left nowrap><font size=2 face="serif">&nbsp;&nbsp;Accumulated other
        comprehensive income</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=right nowrap><font size=2 face="serif">25</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=right nowrap><font size=2 face="serif">-</font><font size="2">&nbsp; </font></td>
  </tr>
  <tr valign="bottom" bgcolor="#E5FFFF">
    <td align=left nowrap><font size=2 face="serif">&nbsp;&nbsp;Retained earnings</font><font size="2">&nbsp; </font></td>
    <td style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font></td>
    <td align=right nowrap style="border-bottom:1px solid #000000;"><font size=2 face="serif">21,568</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font></td>
    <td align=right nowrap style="border-bottom:1px solid #000000;"><font size=2 face="serif">27,845</font><font size="2">&nbsp; </font></td>
  </tr>
  <tr valign="bottom">
    <td align=left nowrap><font size="2">&nbsp;</font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=right nowrap><font size=2 face="serif">42,962</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=right nowrap><font size=2 face="serif">48,305</font><font size="2">&nbsp; </font></td>
  </tr>
  <tr valign="bottom" bgcolor="#E5FFFF">
    <td align=left nowrap><font size=2 face="serif">&nbsp;&nbsp;Less stock option
    receivable</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=right nowrap><font size=2 face="serif">(166</font></td>
    <td><div align="left"><font size=2 face="serif">)</font><font size="2">&nbsp;</font></div></td>
    <td><font size="2">&nbsp;</font></td>
    <td align=right nowrap><font size=2 face="serif">(166)</font><font size="2">&nbsp; </font></td>
  </tr>
  <tr valign="bottom">
    <td align=left nowrap><font size=2 face="serif">&nbsp;&nbsp;Less treasury
        stock of 2,070 shares</font><font size="2">&nbsp; </font></td>
    <td style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font></td>
    <td align=right nowrap style="border-bottom:1px solid #000000;"><font size=2 face="serif">(8,386</font></td>
    <td><div align="left"><font size=2 face="serif">)</font></div></td>
    <td style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font></td>
    <td align=right nowrap style="border-bottom:1px solid #000000;"><font size=2 face="serif">(8,386)</font><font size="2">&nbsp; </font></td>
  </tr>
  <tr valign="bottom" bgcolor="#E5FFFF">
    <td align=left nowrap><font size=2 face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total shareholders&#146; equity</font><font size="2">&nbsp; </font></td>
    <td style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font></td>
    <td align=right nowrap style="border-bottom:1px solid #000000;"><font size=2 face="serif">34,410</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font></td>
    <td align=right nowrap style="border-bottom:1px solid #000000;"><font size=2 face="serif">39,753</font><font size="2">&nbsp; </font></td>
  </tr>
  <tr valign="bottom" bgcolor="#E5FFFF">
    <td align=left nowrap><font size=2 face="serif">TOTAL</font></td>
    <td style="border-bottom:3px solid #000000;"><font size=2 face="serif">&#36;</font></td>
    <td align=right nowrap style="border-bottom:3px solid #000000;"><font size=2 face="serif">48,297</font><font size="2">&nbsp; </font></td>
    <td><font size="2">&nbsp;</font></td>
    <td style="border-bottom:3px solid #000000;"><font size=2 face="serif">&#36; </font></td>
    <td align=right nowrap style="border-bottom:3px solid #000000;"><font size=2 face="serif">52,120</font><font size="2">&nbsp; </font></td>
  </tr>
</table>
<P align="left">
<FONT size=2 face="serif">See notes to consolidated condensed financial statements.</FONT></P>
<BR>
<P align="center">
<FONT size=2 face="serif">3 </FONT></P>

<hr noshade align="center" width="100%" size=4>
<P align="left" style="page-break-before:always"></P>
<PAGE>

<P align="justify">
<U><FONT size=2 face="serif">ARK RESTAURANTS CORP. AND SUBSIDIARIES</FONT></U><BR>
<B><FONT size=2 face="serif">CONSOLIDATED CONDENSED STATEM ENTS OF OPERATIONS </FONT></B><FONT size=1 face="serif">(Unaudited)</FONT><BR>
<U><FONT size=2 face="serif">(In Thousands, Except per share amounts)</FONT></U></P>
<TABLE width=100% border=0 cellpadding=0 cellspacing=0>
<TR valign="bottom">
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD colspan="6" align=center nowrap style="border-bottom:1px solid #000000;">
    <font size="2"><FONT face="serif">13 Weeks Ended</FONT>
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD colspan="7" align=center nowrap style="border-bottom:1px solid #000000;">
    <font size="2" face="serif">26 Weeks Ended</FONT>
  </TD>
  </TR>
<TR valign="bottom">
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD colspan=3 rowspan="2" align=center nowrap style="border-bottom:1px solid #000000;">
    <FONT size=2 face="serif">March 31,<br>
    2007</FONT>
  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD colspan="2" rowspan="2" align=center nowrap style="border-bottom:1px solid #000000;">
    <FONT size=2 face="serif">April 1,<br>
    2006</FONT>
  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD colspan=3 rowspan="2" align=center nowrap style="border-bottom:1px solid #000000;">
    <FONT size=2 face="serif">March 31,<br>
    2007</FONT>
  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD colspan=3 rowspan="2" align=center nowrap style="border-bottom:1px solid #000000;">
    <FONT size=2 face="serif">April 1,<br>
    2006</FONT>
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  </TR>
<TR valign="bottom">
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

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

  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap colspan=3>
    <div align="center"><FONT size=2 face="serif">(see Note 1)</FONT><font size="2">&nbsp;
    </font></div></TD>
</TR>
<TR>
  <TD colspan=16><font size="2">&nbsp;</font>

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
    <FONT size=2 face="serif">TOTAL REVENUES</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">
    <div align="left"><FONT size=2 face="serif">&#36;</FONT><font size="2">&nbsp;
    </font></div></TD>
  <TD colspan="2" nowrap style="border-bottom:1px solid #000000;">
    <div align="right"><FONT size=2 face="serif">25,867</FONT><font size="2">&nbsp;
    </font></div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">
    <FONT size=2 face="serif">&#36;</FONT></TD>
  <TD>
    <div align="right" nowrap style="border-bottom:1px solid #000000;"><FONT size=2 face="serif">24,120</FONT><font size="2">&nbsp;
    </font></div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">
    <FONT size=2 face="serif">&#36;</FONT></TD>
  <TD colspan="2" nowrap style="border-bottom:1px solid #000000;">
    <div align="right"><FONT size=2 face="serif">54,069</FONT>
    </div></TD>
  <TD><font size="2">&nbsp;</font>
  </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;">&nbsp;</TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;"><FONT size=2 face="serif">50,083</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#E5FFFF">
  <TD align=left nowrap>
    <FONT size=2 face="serif">COST AND EX PENSES:</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD colspan="2"><font size="2">&nbsp;</font>
  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD colspan="2"><font size="2">&nbsp;</font>
  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

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

  </TD>
  <TD colspan="2">
    <div align="right"><FONT size=2 face="serif">6,831</FONT><font size="2">&nbsp;
    </font></div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD>
    <div align="right"><FONT size=2 face="serif">6,321</FONT><font size="2">&nbsp;
    </font></div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD colspan="2">
    <div align="right"><FONT size=2 face="serif">13,862</FONT>
    </div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap colspan=3>
    <FONT size=2 face="serif">12,669</FONT><font size="2">&nbsp;
    </font></TD>
</TR>
<TR valign="bottom" bgcolor="#E5FFFF">
  <TD align=left nowrap>
    <FONT size=2 face="serif">Payroll expenses</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD colspan="2">
    <div align="right"><FONT size=2 face="serif">8,930</FONT><font size="2">&nbsp;
    </font></div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD>
    <div align="right"><FONT size=2 face="serif">8,482</FONT><font size="2">&nbsp;
    </font></div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD colspan="2">
    <div align="right"><FONT size=2 face="serif">17,828</FONT>
    </div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap colspan=3>
    <FONT size=2 face="serif">16,820</FONT><font size="2">&nbsp;
    </font></TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
    <FONT size=2 face="serif">Occupancy expenses</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD colspan="2">
    <div align="right"><FONT size=2 face="serif">3,571</FONT><font size="2">&nbsp;
    </font></div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD>
    <div align="right"><FONT size=2 face="serif">3,908</FONT><font size="2">&nbsp;
    </font></div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD colspan="2">
    <div align="right"><FONT size=2 face="serif">7,563</FONT>
    </div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap>
    <FONT size=2 face="serif">7,990</FONT><font size="2">&nbsp;
    </font></TD>
</TR>
<TR valign="bottom" bgcolor="#E5FFFF">
  <TD align=left nowrap>
    <FONT size=2 face="serif">Other operating costs and expenses</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD colspan="2">
    <div align="right"><FONT size=2 face="serif">3,305</FONT><font size="2">&nbsp;
    </font></div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD>
    <div align="right"><FONT size=2 face="serif">2,959</FONT><font size="2">&nbsp;
    </font></div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD colspan="2">
    <div align="right"><FONT size=2 face="serif">6,545</FONT>
    </div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap>
    <FONT size=2 face="serif">6,119</FONT><font size="2">&nbsp;
    </font></TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
    <FONT size=2 face="serif">General and administrative expenses</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD colspan="2">
    <div align="right"><FONT size=2 face="serif">2,072</FONT><font size="2">&nbsp;
    </font></div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD>
    <div align="right"><FONT size=2 face="serif">1,839</FONT><font size="2">&nbsp;
    </font></div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD colspan="2">
    <div align="right"><FONT size=2 face="serif">4,055</FONT>
    </div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap>
    <FONT size=2 face="serif">3,561</FONT><font size="2">&nbsp;
    </font></TD>
</TR>
<TR valign="bottom" bgcolor="#E5FFFF">
  <TD align=left nowrap>
    <FONT size=2 face="serif">Depreciation and amortization</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>

  </TD>
  <TD colspan="2" nowrap style="border-bottom:1px solid #000000;">
    <div align="right"><FONT size=2 face="serif">675</FONT><font size="2">&nbsp;
    </font></div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>

  </TD>
  <TD>
    <div align="right" nowrap style="border-bottom:1px solid #000000;"><FONT size=2 face="serif">626</FONT><font size="2">&nbsp;
    </font></div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>

  </TD>
  <TD colspan="2" nowrap style="border-bottom:1px solid #000000;">
    <div align="right"><FONT size=2 face="serif">1,313</FONT>
    </div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>

  </TD>
  <TD nowrap style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
    <FONT size=2 face="serif">1,192</FONT><font size="2">&nbsp;
    </font></TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">&nbsp;&nbsp;&nbsp;&nbsp;Total cost and expenses</FONT></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>

  </TD>
  <TD colspan="2" nowrap style="border-bottom:1px solid #000000;">
    <div align="right"><FONT size=2 face="serif">25,384</FONT><font size="2">&nbsp;
    </font></div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>

  </TD>
  <TD>
    <div align="right" nowrap style="border-bottom:1px solid #000000;"><FONT size=2 face="serif">24,135</FONT><font size="2">&nbsp;
    </font></div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>

  </TD>
  <TD colspan="2" nowrap style="border-bottom:1px solid #000000;">
    <div align="right"><FONT size=2 face="serif">51,166</FONT>
    </div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap colspan=3 style="border-bottom:1px solid #000000;">
    <FONT size=2 face="serif">48,351</FONT><font size="2">&nbsp;
    </font></TD>
</TR>
<TR valign="bottom" bgcolor="#E5FFFF">
  <TD align=left nowrap>
    <FONT size=2 face="serif">OPERATING INCOME (LOSS)</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>

  </TD>
  <TD colspan="2" nowrap style="border-bottom:1px solid #000000;">
    <div align="right"><FONT size=2 face="serif">483</FONT><font size="2">&nbsp;
    </font></div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>

  </TD>
  <TD>
    <div align="right" nowrap style="border-bottom:1px solid #000000;"><FONT size=2 face="serif">(15</FONT> </div></TD>
  <TD><FONT size=2 face="serif">)</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>

  </TD>
  <TD colspan="2" nowrap style="border-bottom:1px solid #000000;">
    <div align="right"><FONT size=2 face="serif">2,903</FONT>
    </div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>

  </TD>
  <TD nowrap style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
    <FONT size=2 face="serif">1,732</FONT><font size="2">&nbsp;
    </font></TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
    <FONT size=2 face="serif">OTHER INCOME:</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD colspan="2"><font size="2">&nbsp;</font>
  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD colspan="2"><font size="2">&nbsp;</font>
  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
</TR>
<TR valign="bottom" bgcolor="#E5FFFF">
  <TD align=left nowrap>
    <FONT size=2 face="serif">Interest income - Net</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD colspan="2">
    <div align="right"><FONT size=2 face="serif">38</FONT><font size="2">&nbsp;
    </font></div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD>
    <div align="right"><FONT size=2 face="serif">22</FONT><font size="2">&nbsp;
    </font></div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD colspan="2">
    <div align="right"><FONT size=2 face="serif">148</FONT>
    </div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap>
    <FONT size=2 face="serif">47</FONT><font size="2">&nbsp;
    </font></TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
    <FONT size=2 face="serif">Other income</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>

  </TD>
  <TD colspan="2" nowrap style="border-bottom:1px solid #000000;">
    <div align="right"><FONT size=2 face="serif">236</FONT><font size="2">&nbsp;
    </font></div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>

  </TD>
  <TD>
    <div align="right" nowrap style="border-bottom:1px solid #000000;"><FONT size=2 face="serif">181</FONT><font size="2">&nbsp;
    </font></div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>

  </TD>
  <TD colspan="2" nowrap style="border-bottom:1px solid #000000;">
    <div align="right"><FONT size=2 face="serif">479</FONT>
    </div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>

  </TD>
  <TD nowrap style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
    <FONT size=2 face="serif">390</FONT><font size="2">&nbsp;
    </font></TD>
</TR>
<TR valign="bottom" bgcolor="#E5FFFF">
  <TD align=left nowrap>
    <FONT size=2 face="serif">Total other income</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>

  </TD>
  <TD colspan="2" nowrap style="border-bottom:1px solid #000000;">
    <div align="right"><FONT size=2 face="serif">274</FONT><font size="2">&nbsp;
    </font></div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>

  </TD>
  <TD>
    <div align="right" nowrap style="border-bottom:1px solid #000000;"><FONT size=2 face="serif">203</FONT><font size="2">&nbsp;
    </font></div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>

  </TD>
  <TD colspan="2" nowrap style="border-bottom:1px solid #000000;">
    <div align="right"><FONT size=2 face="serif">627</FONT>
    </div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>

  </TD>
  <TD nowrap style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
    <FONT size=2 face="serif">437</FONT><font size="2">&nbsp;
    </font></TD>
</TR>
<TR valign="bottom">
  <TD align=left>
    <FONT size=2 face="serif">Income from continuing operations before provision for income taxes and limited partner interest
    in variable interest entity</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD colspan="2">
    <div align="right"><FONT size=2 face="serif">757</FONT><font size="2">&nbsp;
    </font></div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD>
    <div align="right"><FONT size=2 face="serif">188</FONT><font size="2">&nbsp;
    </font></div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD colspan="2">
    <div align="right"><FONT size=2 face="serif">3,530</FONT>
    </div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap>
    <FONT size=2 face="serif">2,169</FONT><font size="2">&nbsp;
    </font></TD>
</TR>
<TR valign="bottom" bgcolor="#E5FFFF">
  <TD align=left nowrap>
    <FONT size=2 face="serif">Provision for income taxes</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD colspan="2">
    <div align="right"><FONT size=2 face="serif">289</FONT><font size="2">&nbsp;
    </font></div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD>
    <div align="right"><FONT size=2 face="serif">64</FONT><font size="2">&nbsp;
    </font></div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD colspan="2">
    <div align="right"><FONT size=2 face="serif">1,218</FONT>
    </div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap>
    <FONT size=2 face="serif">737</FONT><font size="2">&nbsp;
    </font></TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
    <FONT size=2 face="serif">Limited partner interest in income of variable interest entity</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>

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

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

  </TD>
  <TD colspan="2" nowrap style="border-bottom:1px solid #000000;">
    <div align="right"><FONT size=2 face="serif">(44</FONT> </div></TD>
  <TD><FONT size=2 face="serif">)</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>

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

  </TD>
</TR>
<TR valign="bottom" bgcolor="#E5FFFF">
  <TD align=left nowrap>
    <FONT size=2 face="serif">Income from continuing operations</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>

  </TD>
  <TD colspan="2" nowrap style="border-bottom:1px solid #000000;">
    <div align="right"><FONT size=2 face="serif">447</FONT><font size="2">&nbsp;
    </font></div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>

  </TD>
  <TD>
    <div align="right" nowrap style="border-bottom:1px solid #000000;"><FONT size=2 face="serif">124</FONT><font size="2">&nbsp;
    </font></div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>

  </TD>
  <TD colspan="2" nowrap style="border-bottom:1px solid #000000;">
    <div align="right"><FONT size=2 face="serif">2,268</FONT>
    </div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>

  </TD>
  <TD nowrap style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
    <FONT size=2 face="serif">1,432</FONT><font size="2">&nbsp;
    </font></TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
    <FONT size=2 face="serif">DISCONTINUED OPERATIONS:</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD colspan="2"><font size="2">&nbsp;</font>
  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD colspan="2"><font size="2">&nbsp;</font>
  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
</TR>
<TR valign="bottom" bgcolor="#E5FFFF">
  <TD align=left>
    <FONT size=2 face="serif">Income (loss) from operations of discontinued restaurants (Includes net gain on disposal of &#36;7,814
	for the 26 week period ended March 31, 2007)</FONT></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD colspan="2">
    <div align="right"><FONT size=2 face="serif">4</FONT><font size="2">&nbsp;
    </font></div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD>
    <div align="right"><FONT size=2 face="serif">(417</FONT> </div></TD>
  <TD><FONT size=2 face="serif">)</FONT>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD colspan="2">
    <div align="right"><FONT size=2 face="serif">7,160</FONT>
    </div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap colspan=3>
    <FONT size=2 face="serif">(1,010)</FONT><font size="2">&nbsp;
    </font></TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
    <FONT size=2 face="serif">Provision (benefit) for income taxes</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>

  </TD>
  <TD colspan="2" nowrap style="border-bottom:1px solid #000000;">
    <div align="right"><FONT size=2 face="serif">73</FONT><font size="2">&nbsp;
    </font></div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>

  </TD>
  <TD>
    <div align="right" nowrap style="border-bottom:1px solid #000000;"><FONT size=2 face="serif">(142</FONT>
    </div></TD>
  <TD><FONT size=2 face="serif">)</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;"><font size="2">&nbsp;

  </font></TD>
  <TD colspan="2" nowrap style="border-bottom:1px solid #000000;">
    <div align="right"><FONT size=2 face="serif">2,470</FONT></div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>

  </TD>
  <TD nowrap style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
    <FONT size=2 face="serif">(343)</FONT><font size="2">&nbsp;
    </font></TD>
</TR>
<TR>
  <TD colspan=16><font size="2">&nbsp;</font>

  </TD>
</TR>
<TR valign="bottom" bgcolor="#E5FFFF">
  <TD align=left nowrap>
    <FONT size=2 face="serif">Income (loss) from discontinued operations</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>

  </TD>
  <TD colspan="2" nowrap style="border-bottom:1px solid #000000;">
    <div align="right"><FONT size=2 face="serif">(69</FONT> </div></TD>
  <TD><FONT size=2 face="serif">)</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>

  </TD>
  <TD>
    <div align="right" nowrap style="border-bottom:1px solid #000000;"><FONT size=2 face="serif">(275</FONT>
    </div></TD>
  <TD><FONT size=2 face="serif">)</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>

  </TD>
  <TD colspan="2" nowrap style="border-bottom:1px solid #000000;">
    <div align="right"><FONT size=2 face="serif">4,690</FONT>
    </div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>

  </TD>
  <TD nowrap style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
    <FONT size=2 face="serif">(667)</FONT><font size="2">&nbsp;
    </font></TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
    <FONT size=2 face="serif">Income (loss) before cumulative effect of change in accounting principle</FONT>
  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD colspan="2">
    <div align="right"><FONT size=2 face="serif">378</FONT><font size="2">&nbsp;
    </font></div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

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

  </TD>
  <TD colspan="2">
    <div align="right"><FONT size=2 face="serif">6,958</FONT>
    </div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap>
    <FONT size=2 face="serif">765</FONT><font size="2">&nbsp;
    </font></TD>
</TR>
<TR valign="bottom" bgcolor="#E5FFFF">
  <TD align=left nowrap>
    <FONT size=2 face="serif">Cumulative effect of change in accounting principle</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>

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

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

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

  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
    <FONT size=2 face="serif">-</FONT><font size="2">&nbsp;
    </font></TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
    <FONT size=2 face="serif">NET INCOME (LOSS)</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap style="border-bottom:3px solid #000000;">
    <FONT size=2 face="serif">&#36;</FONT></TD>
  <TD colspan="2" nowrap style="border-bottom:3px solid #000000;">
    <div align="right"><FONT size=2 face="serif">378</FONT><font size="2">&nbsp;
    </font></div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap style="border-bottom:3px solid #000000;">
    <FONT size=2 face="serif">&#36;</FONT></TD>
  <TD>
    <div align="right" nowrap style="border-bottom:3px solid #000000;"><FONT size=2 face="serif">(151</FONT> </div></TD>
  <TD><FONT size=2 face="serif">)</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:3px solid #000000;">
    <FONT size=2 face="serif">&#36;</FONT></TD>
  <TD colspan="2" nowrap style="border-bottom:3px solid #000000;">
    <div align="right"><FONT size=2 face="serif">6,968</FONT>
    </div></TD>
  <TD><font size=2 face="serif">&nbsp;</font>
  </TD>
  <TD align=left nowrap style="border-bottom:3px solid #000000;">
    <FONT size=2 face="serif">&#36;</FONT></TD>
  <TD nowrap style="border-bottom:3px solid #000000;"><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap style="border-bottom:3px solid #000000;">
    <FONT size=2 face="serif">765</FONT><font size="2">&nbsp;
    </font></TD>
</TR>
<TR valign="bottom" bgcolor="#E5FFFF">
  <TD align=left nowrap>
    <FONT size=2 face="serif">PER SHARE INFORMATION - BASIC AND DILUTED:</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD colspan="2"><font size="2">&nbsp;</font>
  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD colspan="2"><font size="2">&nbsp;</font>
  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
    <FONT size=2 face="serif">Income from continuing operations</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap>
    <FONT size=2 face="serif">&#36;</FONT></TD>
  <TD colspan="2">
    <div align="right"><FONT size=2 face="serif">.13</FONT><font size="2">&nbsp;
    </font></div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap>
    <FONT size=2 face="serif">&#36;</FONT></TD>
  <TD>
    <div align="right"><FONT size=2 face="serif">.04</FONT><font size="2">&nbsp;
    </font></div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap>
    <FONT size=2 face="serif">&#36;</FONT>
  </TD>
  <TD colspan="2">
    <div align="right"><FONT size=2 face="serif">.63</FONT>
    </div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap>
    <FONT size=2 face="serif">&#36;</FONT>
  </TD>
  <TD nowrap><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap>
    <FONT size=2 face="serif">.41</FONT><font size="2">&nbsp;
    </font></TD>
</TR>
<TR valign="bottom" bgcolor="#E5FFFF">
  <TD align=left nowrap>
    <FONT size=2 face="serif">Discontinued operations</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap>
    <FONT size=2 face="serif">&#36;</FONT></TD>
  <TD colspan="2">
    <div align="right"><FONT size=2 face="serif">(.02</FONT></div></TD>
  <TD><FONT size=2 face="serif">)</FONT>  </TD>
  <TD align=left nowrap>
    <FONT size=2 face="serif">&#36;</FONT></TD>
  <TD>
    <div align="right"><FONT size=2 face="serif">(.08</FONT> </div></TD>
  <TD><FONT size=2 face="serif">)</FONT>
  </TD>
  <TD align=left nowrap>
    <FONT size=2 face="serif">&#36;</FONT>
  </TD>
  <TD colspan="2">
    <div align="right"><FONT size=2 face="serif">1.31</FONT>
    </div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap>
    <FONT size=2 face="serif">&#36;</FONT>
    </TD>
  <TD nowrap><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap>
    <FONT size=2 face="serif">(.19)</FONT><font size="2">&nbsp;
    </font></TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
    <FONT size=2 face="serif">Cumulative effect of change in accounting principle</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">
    <FONT size=2 face="serif">&#36;</FONT></TD>
  <TD colspan="2" nowrap style="border-bottom:1px solid #000000;">
    <div align="right"><FONT size=2 face="serif">.00</FONT><font size="2">&nbsp;
    </font></div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">
    <FONT size=2 face="serif">&#36;</FONT></TD>
  <TD>
    <div align="right" nowrap style="border-bottom:1px solid #000000;"><FONT size=2 face="serif">.00</FONT><font size="2">&nbsp;
    </font></div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">
    <FONT size=2 face="serif">&#36;</FONT></TD>
  <TD colspan="2" nowrap style="border-bottom:1px solid #000000;">
    <div align="right"><FONT size=2 face="serif">.00</FONT>
    </div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">
    <FONT size=2 face="serif">&#36;</FONT></TD>
  <TD nowrap style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
    <FONT size=2 face="serif">.00</FONT><font size="2">&nbsp;
    </font></TD>
</TR>
<TR>
  <TD colspan=16><font size="2">&nbsp;</font>

  </TD>
</TR>
<TR valign="bottom" bgcolor="#E5FFFF">
  <TD align=left nowrap>
    <FONT size=2 face="serif">Basic</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">
    <FONT size=2 face="serif">&#36;</FONT></TD>
  <TD colspan="2" style="border-bottom:1px solid #000000;">
    <div align="right"><FONT size=2 face="serif">.11</FONT><font size="2">&nbsp;
    </font></div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">
    <FONT size=2 face="serif">&#36;</FONT></TD>
  <TD>
    <div align="right" nowrap style="border-bottom:1px solid #000000;"><FONT size=2 face="serif">(.04</FONT>
    </div></TD>
  <TD><FONT size=2 face="serif">)</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">
    <FONT size=2 face="serif">&#36;</FONT></TD>
  <TD colspan="2" nowrap style="border-bottom:1px solid #000000;">
    <div align="right"><FONT size=2 face="serif">1.94</FONT>
    </div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">
    <FONT size=2 face="serif">&#36;</FONT></TD>
  <TD nowrap style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
    <FONT size=2 face="serif">.22</FONT><font size="2">&nbsp;
    </font></TD>
</TR>
<TR>
  <TD colspan=16><font size="2">&nbsp;</font>

  </TD>
</TR>
<TR valign="bottom" bgcolor="#E5FFFF">
  <TD align=left nowrap>
    <FONT size=2 face="serif">Income from continuing operations</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap>
    <FONT size=2 face="serif">&#36;</FONT></TD>
  <TD colspan="2">
    <div align="right"><FONT size=2 face="serif">.12</FONT><font size="2">&nbsp;
    </font></div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap>
    <FONT size=2 face="serif">&#36;</FONT></TD>
  <TD>
    <div align="right"><FONT size=2 face="serif">.04</FONT><font size="2">&nbsp;
    </font></div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap>
    <FONT size=2 face="serif">&#36;</FONT></TD>
  <TD colspan="2">
    <div align="right"><FONT size=2 face="serif">.63</FONT>
    </div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap>
    <FONT size=2 face="serif">&#36;</FONT></TD>
  <TD nowrap><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap>
    <FONT size=2 face="serif">.40</FONT><font size="2">&nbsp;
    </font></TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
    <FONT size=2 face="serif">Discontinued operations</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap>
    <FONT size=2 face="serif">&#36;</FONT></TD>
  <TD colspan="2">
    <div align="right"><FONT size=2 face="serif">(.02</FONT> </div></TD>
  <TD><FONT size=2 face="serif">)</FONT>  </TD>
  <TD align=left nowrap>
    <FONT size=2 face="serif">&#36;</FONT></TD>
  <TD>
    <div align="right"><FONT size=2 face="serif">(.08</FONT> </div></TD>
  <TD><FONT size=2 face="serif">)</FONT>
  </TD>
  <TD align=left nowrap>
    <FONT size=2 face="serif">&#36;</FONT></TD>
  <TD colspan="2">
    <div align="right"><FONT size=2 face="serif">1.31</FONT>
    </div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap>
    <FONT size=2 face="serif">&#36;</FONT></TD>
  <TD nowrap><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap>
    <FONT size=2 face="serif">(.19)</FONT><font size="2">&nbsp;
    </font></TD>
</TR>
<TR valign="bottom" bgcolor="#E5FFFF">
  <TD align=left nowrap>
    <FONT size=2 face="serif">Cumulative effect of change in accounting principle</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">
    <FONT size=2 face="serif">&#36;</FONT></TD>
  <TD colspan="2"  nowrap style="border-bottom:1px solid #000000;">
    <div align="right"><FONT size=2 face="serif">.00</FONT><font size="2">&nbsp;
    </font></div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">
    <FONT size=2 face="serif">&#36;</FONT></TD>
  <TD>
    <div align="right" nowrap style="border-bottom:1px solid #000000;"><FONT size=2 face="serif">.00</FONT><font size="2">&nbsp;
    </font></div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">
    <FONT size=2 face="serif">&#36;</FONT></TD>
  <TD colspan="2" nowrap style="border-bottom:1px solid #000000;">
    <div align="right"><FONT size=2 face="serif">.00</FONT>
    </div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap style="border-bottom:1px solid #000000;">
    <FONT size=2 face="serif">&#36;</FONT></TD>
  <TD nowrap style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
    <FONT size=2 face="serif">.00</FONT><font size="2">&nbsp;
    </font></TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
    <FONT size=2 face="serif">Diluted</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left  nowrap style="border-bottom:3px solid #000000;">
    <FONT size=2 face="serif">&#36;</FONT></TD>
  <TD colspan="2"  nowrap style="border-bottom:3px solid #000000;">
    <div align="right"><FONT size=2 face="serif">.10</FONT><font size="2">&nbsp;
    </font></div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap style="border-bottom:3px solid #000000;">
    <FONT size=2 face="serif">&#36;</FONT></TD>
  <TD>
    <div align="right" nowrap style="border-bottom:3px solid #000000;"><FONT size=2 face="serif">(.04</FONT> </div></TD>
  <TD><FONT size=2 face="serif">)</FONT>
  </TD>
  <TD align=left nowrap style="border-bottom:3px solid #000000;">
    <FONT size=2 face="serif">&#36;</FONT></TD>
  <TD colspan="2" nowrap style="border-bottom:3px solid #000000;">
    <div align="right"><FONT size=2 face="serif">1.94</FONT>
    </div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap style="border-bottom:3px solid #000000;">
    <FONT size=2 face="serif">&#36;</FONT></TD>
  <TD nowrap style="border-bottom:3px solid #000000;"><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap style="border-bottom:3px solid #000000;">
    <FONT size=2 face="serif">.21</FONT><font size="2">&nbsp;
    </font></TD>
</TR>
<TR>
  <TD colspan=16><font size="2">&nbsp;</font>

  </TD>
</TR>
<TR valign="bottom" bgcolor="#E5FFFF">
  <TD align=left nowrap>
    <FONT size=2 face="serif">WEIGHTED AVERAGE NUMBER OF SHARES-BASIC</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap style="border-bottom:3px solid #000000;"><font size="2">&nbsp;</font>

  </TD>
  <TD colspan="2"  nowrap style="border-bottom:3px solid #000000;">
    <div align="right"><FONT size=2 face="serif">3,590</FONT><font size="2">&nbsp;
    </font></div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left style="border-bottom:3px solid #000000;"><font size="2">&nbsp;</font>

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

  </TD>
  <TD colspan="2" nowrap style="border-bottom:3px solid #000000;">
    <div align="right"><FONT size=2 face="serif">3,580</FONT>
    </div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap style="border-bottom:3px solid #000000;"><font size="2">&nbsp;</font>

  </TD>
  <TD style="border-bottom:3px solid #000000;"><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap style="border-bottom:3px solid #000000;">
    <FONT size=2 face="serif">3,462</FONT><font size="2">&nbsp;
    </font></TD>
</TR>
<TR>
  <TD colspan=16><font size="2">&nbsp;</font>

  </TD>
</TR>
<TR valign="bottom" bgcolor="#E5FFFF">
  <TD align=left nowrap>
    <FONT size=2 face="serif">WEIGHTED AVERAGE NUMBER OF SHARES-DILUTED</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left  nowrap style="border-bottom:3px solid #000000;"><font size="2">&nbsp;</font>

  </TD>
  <TD colspan="2"  nowrap style="border-bottom:3px solid #000000;">
    <div align="right"><FONT size=2 face="serif">3,604</FONT><font size="2">&nbsp;
    </font></div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left style="border-bottom:3px solid #000000;"><font size="2">&nbsp;</font>

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

  </TD>
  <TD colspan="2" nowrap style="border-bottom:3px solid #000000;">
    <div align="right"><FONT size=2 face="serif">3,590</FONT>
    </div></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap style="border-bottom:3px solid #000000;"><font size="2">&nbsp;</font>

  </TD>
  <TD style="border-bottom:3px solid #000000;"><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap style="border-bottom:3px solid #000000;">
    <FONT size=2 face="serif">3,546</FONT><font size="2">&nbsp;
    </font></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 align="center" width="100%" size=4>
<P align="left" style="page-break-before:always"></P>
<PAGE>

<P align="justify">
<U><FONT size=2 face="serif">ARK RESTAURANTS CORP. AND SUBSIDIARIES</FONT></U><BR>
<BR>
<B><FONT size=2 face="serif">CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS</FONT></B><FONT size=1 face="serif"> (Unaudited)</FONT><BR>
<U><FONT size=2 face="serif">(Dollars in Thousands)</FONT></U></P>
<TABLE width=100% border=0 cellpadding=0 cellspacing=0>
<TR valign="bottom">
  <TD width="77%" align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD colspan="6" align=center style="border-bottom:1px solid #000000;">
    <FONT size=2 face="serif">26 Weeks Ended</FONT>    <div align="right"></div></TD>
  </TR>
<TR valign="bottom">
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD colspan="3" align=center style="border-bottom:1px solid #000000;">
    <FONT size=2 face="serif">March 31,<br>2007</FONT>  </TD>
  <TD width="1%"><font size="2">&nbsp;</font></TD>
  <TD align=center nowrap style="border-bottom:1px solid #000000;">
    <div align="right"><FONT size=2 face="serif">April 1,<br>
      2006</FONT>
    </div></TD>
  <TD align=center nowrap style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font></TD>
</TR>
<TR valign="bottom" bgcolor="#E5FFFF">
  <TD align=left nowrap>
    <FONT size=2 face="serif">CASH FLOWS FROM OPERATING ACTIVITIES:</FONT><font size="2">&nbsp;
    </font></TD>
  <TD width="1%"><font size="2">&nbsp;</font>
  </TD>
  <TD width="9%" align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD width="2%"><font size="2">&nbsp;</font>
  </TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD width="9%" align=left nowrap><div align="right"><font size="2"></font>

</div></TD>
  <TD width="1%" align=left nowrap><div align="left"><font size="2"></font></div></TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
    <FONT size=2 face="serif">&nbsp;&nbsp;Net income</FONT><font size="2">&nbsp;
    </font></TD>
  <TD align=left><FONT size=2 face="serif">&#36;</FONT>
  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">6,968</FONT>
  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left><FONT size=2 face="serif">&#36;</FONT></TD>
  <TD align=right nowrap>
    <div align="right"><FONT size=2 face="serif">765</FONT>
    </div></TD>
  <TD align=right nowrap><div align="left"><font size="2"></font></div></TD>
</TR>
<TR valign="bottom" bgcolor="#E5FFFF">
  <TD align=left nowrap>
<FONT size=2 face="serif">&nbsp;&nbsp;Adjustments to reconcile net income to net cash</FONT><br>
<FONT size=2 face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;provided by operating activities:</FONT> </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD align=left nowrap><div align="right"><font size="2"></font>

</div></TD>
  <TD align=left nowrap><div align="left"><font size="2"></font></div></TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
    <FONT size=2 face="serif">Deferred income taxes</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">(83</FONT>
  </TD>
  <TD><FONT size=2 face="serif">)</FONT>
  </TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD align=right nowrap>
    <div align="right"><FONT size=2 face="serif">(165</FONT></div></TD>
  <TD align=left nowrap><div align="left"><FONT size=2 face="serif">)</FONT></div></TD>
</TR>
<TR valign="bottom" bgcolor="#E5FFFF">
  <TD align=left nowrap>
    <FONT size=2 face="serif">Cumulative effect of change in accounting principle</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">(10</FONT>
  </TD>
  <TD><FONT size=2 face="serif">)</FONT>
  </TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD align=right nowrap>
    <div align="right"><FONT size=2 face="serif">-</FONT>
    </div></TD>
  <TD align=left nowrap><div align="left"><font size="2"></font></div></TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
    <FONT size=2 face="serif">Tax benefit on exercise of stock options</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">(89</FONT>
  </TD>
  <TD><FONT size=2 face="serif">)</FONT>
  </TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD align=left nowrap>
    <div align="right"><FONT size=2 face="serif">-</FONT><font size="2">
    </font></div></TD>
  <TD align=left nowrap><div align="left"><font size="2"></font></div></TD>
</TR>
<TR valign="bottom" bgcolor="#E5FFFF">
  <TD align=left nowrap>
    <FONT size=2 face="serif">Stock-based compensation</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">252</FONT>
  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD align=right nowrap>
    <div align="right"><FONT size=2 face="serif">374</FONT>
    </div></TD>
  <TD align=right nowrap><div align="left"><font size="2"></font></div></TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
    <FONT size=2 face="serif">Depreciation and amortization</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">2,384</FONT>
  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD align=right nowrap>
    <div align="right"><FONT size=2 face="serif">1,805</FONT>
    </div></TD>
  <TD align=right nowrap><div align="left"><font size="2"></font></div></TD>
</TR>
<TR valign="bottom" bgcolor="#E5FFFF">
  <TD align=left nowrap>
    <FONT size=2 face="serif">Gain on disposal of discontinued operation</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">(7,814</FONT>
  </TD>
  <TD><FONT size=2 face="serif">)</FONT>
  </TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD align=left nowrap>
    <div align="right"><FONT size=2 face="serif">-</FONT>
    </div></TD>
  <TD align=left nowrap><div align="left"><font size="2"></font></div></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><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">537</FONT>
  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD align=left nowrap>
    <div align="right"><FONT size=2 face="serif">-</FONT>
    </div></TD>
  <TD align=left nowrap><div align="left"><font size="2"></font></div></TD>
</TR>
<TR valign="bottom" bgcolor="#E5FFFF">
  <TD align=left nowrap>
    <FONT size=2 face="serif">Limited partner interest in income of consolidated variable interest entity</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">44</FONT>
  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD align=left nowrap>
    <div align="right"><FONT size=2 face="serif">-</FONT>
    </div></TD>
  <TD align=left nowrap><div align="left"><font size="2"></font></div></TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
    <FONT size=2 face="serif">Operating lease deferred credit</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">(95</FONT>
  </TD>
  <TD><FONT size=2 face="serif">)</FONT>
  </TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD align=right nowrap>
    <div align="right"><FONT size=2 face="serif">(25</FONT>
    </div></TD>
  <TD align=right nowrap><div align="left"><FONT size=2 face="serif">)</FONT></div></TD>
</TR>
<TR valign="bottom" bgcolor="#E5FFFF">
  <TD align=left nowrap>
    <FONT size=2 face="serif">Changes in operating assets and liabilities:</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD align=left nowrap><div align="right"><font size="2"></font>

</div></TD>
  <TD align=left nowrap><div align="left"><font size="2"></font></div></TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">&nbsp;&nbsp;Accounts receivable</FONT></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">(956</FONT>
  </TD>
  <TD><FONT size=2 face="serif">)</FONT>
  </TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD align=right nowrap>
    <div align="right"><FONT size=2 face="serif">(2,411</FONT>
    </div></TD>
  <TD align=right nowrap><div align="left"><FONT size=2 face="serif">)</FONT></div></TD>
</TR>
<TR valign="bottom" bgcolor="#E5FFFF">
  <TD align=left nowrap>
<FONT size=2 face="serif">&nbsp;&nbsp;Related party receivables</FONT> </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">129</FONT>
  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD align=left nowrap>
    <div align="right"><FONT size=2 face="serif">-</FONT>
    </div></TD>
  <TD align=left nowrap><div align="left"><font size="2"></font></div></TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">&nbsp;&nbsp;Employee receivables</FONT></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">25</FONT>
  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD align=right nowrap>
    <div align="right"><FONT size=2 face="serif">(43</FONT>
    </div></TD>
  <TD align=right nowrap><div align="left"><FONT size=2 face="serif">)</FONT></div></TD>
</TR>
<TR valign="bottom" bgcolor="#E5FFFF">
  <TD align=left nowrap>
<FONT size=2 face="serif">&nbsp;&nbsp;Inventories</FONT>  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">(40</FONT>
  </TD>
  <TD><FONT size=2 face="serif">)</FONT>
  </TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD align=right nowrap>
    <div align="right"><FONT size=2 face="serif">(129</FONT>
    </div></TD>
  <TD align=right nowrap><div align="left"><FONT size=2 face="serif">)</FONT></div></TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">&nbsp;&nbsp;Prepaid expenses and other current assets</FONT> </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">(192</FONT>
  </TD>
  <TD><FONT size=2 face="serif">)</FONT>
  </TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD align=right nowrap>
    <div align="right"><FONT size=2 face="serif">147</FONT>
    </div></TD>
  <TD align=right nowrap><div align="left"><font size="2"></font></div></TD>
</TR>
<TR valign="bottom" bgcolor="#E5FFFF">
  <TD align=left nowrap>
<FONT size=2 face="serif">&nbsp;&nbsp;Other assets</FONT></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap>
    <FONT size=2 face="serif">144</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD align=right nowrap>
    <div align="right"><FONT size=2 face="serif">(5</FONT>
    </div></TD>
  <TD align=right nowrap><div align="left"><FONT size=2 face="serif">)</FONT></div></TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">&nbsp;&nbsp;Accounts payable - trade</FONT> </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">(281</FONT>
  </TD>
  <TD><FONT size=2 face="serif">)</FONT>
  </TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD align=right nowrap>
    <div align="right"><FONT size=2 face="serif">(767</FONT>
    </div></TD>
  <TD align=right nowrap><div align="left"><FONT size=2 face="serif">)</FONT></div></TD>
</TR>
<TR valign="bottom" bgcolor="#E5FFFF">
  <TD align=left nowrap>
<FONT size=2 face="serif">&nbsp;&nbsp;Accrued income taxes</FONT></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">1,244</FONT>
  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD align=right nowrap>
    <div align="right"><FONT size=2 face="serif">(481</FONT>
    </div></TD>
  <TD align=right nowrap><div align="left"><FONT size=2 face="serif">)</FONT></div></TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">&nbsp;&nbsp;Accrued expenses and other current liabilities</FONT></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">(214</FONT>
  </TD>
  <TD><FONT size=2 face="serif">)</FONT>
  </TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD align=right nowrap>
    <div align="right"><FONT size=2 face="serif">(733</FONT>
    </div></TD>
  <TD align=right nowrap><div align="left"><FONT size=2 face="serif">)</FONT></div></TD>
</TR>
<TR valign="bottom" bgcolor="#E5FFFF">
  <TD align=left nowrap>
<FONT size=2 face="serif">&nbsp;&nbsp;Cash received from landlord</FONT></TD>
  <TD style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">-</FONT>
  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font></TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
    <div align="right"><FONT size=2 face="serif">3,000</FONT>
    </div></TD>
  <TD align=right nowrap><div align="left"><font size="2"></font></div></TD>
</TR>
<TR>
  <TD><font size="2">&nbsp;</font>

  </TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD><div align="right"><font size="2"></font></div></TD>
  <TD><div align="left"><font size="2"></font></div></TD>
</TR>
<TR valign="bottom" bgcolor="#E5FFFF">
  <TD align=left nowrap>
<FONT size=2 face="serif">&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by continuing operating activities</FONT>  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">1,953</FONT>
  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD align=right nowrap>
    <div align="right"><FONT size=2 face="serif">1,332</FONT>
    </div></TD>
  <TD align=right nowrap><div align="left"><font size="2"></font></div></TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
<FONT size=2 face="serif">&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by discontinued operating activities</FONT>  </TD>
  <TD style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">103</FONT>
  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font></TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
    <div align="right"><FONT size=2 face="serif">59</FONT>
    </div></TD>
  <TD align=right nowrap><div align="left"><font size="2"></font></div></TD>
</TR>
<TR valign="bottom" bgcolor="#E5FFFF">
  <TD align=left nowrap>
<FONT size=2 face="serif">&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by operating activities</FONT> </TD>
  <TD style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">2,056</FONT>
  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font></TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
    <div align="right"><FONT size=2 face="serif">1,391</FONT>
    </div></TD>
  <TD align=right nowrap><div align="left"><font size="2"></font></div></TD>
</TR>
<TR>
  <TD><font size="2">&nbsp;</font>

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

  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD align=left nowrap><div align="right"><font size="2"></font>

</div></TD>
  <TD align=left nowrap><div align="left"><font size="2"></font></div></TD>
</TR>
<TR valign="bottom" bgcolor="#E5FFFF">
  <TD align=left nowrap>
<FONT size=2 face="serif">Purchases of fixed assets</FONT>  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">(2,626</FONT>
  </TD>
  <TD><FONT size=2 face="serif">)</FONT>
  </TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD align=right nowrap>
    <div align="right"><FONT size=2 face="serif">(3,312</FONT>
    </div></TD>
  <TD align=right nowrap><div align="left"><FONT size=2 face="serif">)</FONT></div></TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
    <FONT size=2 face="serif">Proceeds from sale of discontinued
    operation</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">14,000</FONT>
  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD align=left nowrap>
    <div align="right"><FONT size=2 face="serif">-</FONT>
    </div></TD>
  <TD align=left nowrap><div align="left"><font size="2"></font></div></TD>
</TR>
<TR valign="bottom" bgcolor="#E5FFFF">
  <TD align=left nowrap>
    <FONT size=2 face="serif">Purchases of investment securities</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">(13,162</FONT>
  </TD>
  <TD><FONT size=2 face="serif">)</FONT>
  </TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD align=left nowrap>
    <div align="right"><FONT size=2 face="serif">-</FONT>
    </div></TD>
  <TD align=left nowrap><div align="left"><font size="2"></font></div></TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
    <FONT size=2 face="serif">Proceeds from sales of investment securities</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">8,074</FONT>
  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD align=left nowrap>
    <div align="right"><FONT size=2 face="serif">-</FONT>
    </div></TD>
  <TD align=left nowrap><div align="left"><font size="2"></font></div></TD>
</TR>
<TR valign="bottom" bgcolor="#E5FFFF">
  <TD align=left nowrap>
    <FONT size=2 face="serif">Payment for purchase of Durgin Park</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">(2,000</FONT>
  </TD>
  <TD><FONT size=2 face="serif">)</FONT>
  </TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD align=left nowrap>
    <div align="right"><FONT size=2 face="serif">-</FONT>
    </div></TD>
  <TD align=left nowrap><div align="left"><font size="2"></font></div></TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
    <FONT size=2 face="serif">Payments received on long-term receivables</FONT><font size="2">&nbsp;
    </font></TD>
  <TD style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">635</FONT>
  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font></TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
    <div align="right"><FONT size=2 face="serif">207</FONT>
    </div></TD>
  <TD align=right nowrap><div align="left"><font size="2"></font></div></TD>
</TR>
<TR valign="bottom" bgcolor="#E5FFFF">
  <TD align=left nowrap>
    <FONT size=2 face="serif">&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in continuing
    investing activities</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">4,921</FONT>
  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD align=right nowrap>
    <div align="right"><FONT size=2 face="serif">(3,105</FONT>
    </div></TD>
  <TD align=right nowrap><div align="left"><FONT size=2 face="serif">)</FONT></div></TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
    <FONT size=2 face="serif">&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by (used
    in) discontinued investing activities</FONT><font size="2">&nbsp;
    </font></TD>
  <TD style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">-</FONT>
  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font></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><div align="left"><font size="2"></font></div></TD>
</TR>
<TR valign="bottom" bgcolor="#E5FFFF">
  <TD align=left nowrap>
    <FONT size=2 face="serif">&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in investing
    activities</FONT><font size="2">&nbsp;
    </font></TD>
  <TD style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">4,921</FONT>
  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font></TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
    <div align="right"><FONT size=2 face="serif">(3,105</FONT>
    </div></TD>
  <TD align=right nowrap><div align="left"><FONT size=2 face="serif">)</FONT></div></TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
    <FONT size=2 face="serif">CASH FLOWS FROM FINANCING ACTIVITIES:</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD align=left nowrap><div align="right"><font size="2"></font>

</div></TD>
  <TD align=left nowrap><div align="left"><font size="2"></font></div></TD>
</TR>
<TR valign="bottom" bgcolor="#E5FFFF">
  <TD align=left nowrap>
    <FONT size=2 face="serif">Tax benefit on exercise of stock options</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">89</FONT>
  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD align=left nowrap>
    <div align="right"><FONT size=2 face="serif">-</FONT>
    </div></TD>
  <TD align=left nowrap><div align="left"><font size="2"></font></div></TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
    <FONT size=2 face="serif">Principal payments on note payable</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">(28</FONT>
  </TD>
  <TD><FONT size=2 face="serif">)</FONT>
  </TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD align=left nowrap>
    <div align="right"><FONT size=2 face="serif">-</FONT>
    </div></TD>
  <TD align=left nowrap><div align="left"><font size="2"></font></div></TD>
</TR>
<TR valign="bottom" bgcolor="#E5FFFF">
  <TD align=left nowrap>
    <FONT size=2 face="serif">Dividends paid</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">(13,245</FONT>
  </TD>
  <TD><FONT size=2 face="serif">)</FONT>
  </TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD align=right nowrap>
    <div align="right"><FONT size=2 face="serif">(2,420</FONT>
    </div></TD>
  <TD align=right nowrap><div align="left"><FONT size=2 face="serif">)</FONT></div></TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
    <FONT size=2 face="serif">Exercise of stock options</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">568</FONT>
  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD align=left nowrap>
    <div align="right"><FONT size=2 face="serif">-</FONT>
    </div></TD>
  <TD align=left nowrap><div align="left"><font size="2"></font></div></TD>
</TR>
<TR valign="bottom" bgcolor="#E5FFFF">
  <TD align=left nowrap>
    <FONT size=2 face="serif">Distributions to limited partners of consolidated variable interest entity</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">(61</FONT>
  </TD>
  <TD><FONT size=2 face="serif">)</FONT>
  </TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD align=left nowrap>
    <div align="right"><FONT size=2 face="serif">-</FONT>
    </div></TD>
  <TD align=left nowrap><div align="left"><font size="2"></font></div></TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
    <FONT size=2 face="serif">Proceeds from stock option receivables</FONT><font size="2">&nbsp;
    </font></TD>
  <TD style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">-</FONT>
  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font></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><div align="left"><font size="2"></font></div></TD>
</TR>
<TR valign="bottom" bgcolor="#E5FFFF">
  <TD align=left nowrap>
    <FONT size=2 face="serif">Net cash used in continuing financing activities</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">(12,677</FONT>
  </TD>
  <TD><FONT size=2 face="serif">)</FONT>
  </TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD align=right nowrap>
    <div align="right"><FONT size=2 face="serif">(2,420</FONT>
    </div></TD>
  <TD align=right nowrap><div align="left"><FONT size=2 face="serif">)</FONT></div></TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
    <FONT size=2 face="serif">Net cash used in discontinued financing activities</FONT><font size="2">&nbsp;
    </font></TD>
  <TD style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">-</FONT>
  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font></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><div align="left"><font size="2"></font></div></TD>
</TR>
<TR valign="bottom" bgcolor="#E5FFFF">
  <TD align=left nowrap>
    <FONT size=2 face="serif">Net cash used in financing activities</FONT><font size="2">&nbsp;
    </font></TD>
  <TD style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">(12,677</FONT>
  </TD>
  <TD><FONT size=2 face="serif">)</FONT>
  </TD>
  <TD style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font></TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
    <div align="right"><FONT size=2 face="serif">(2,420</FONT>
    </div></TD>
  <TD align=right nowrap><div align="left"><FONT size=2 face="serif">)</FONT></div></TD>
</TR>
<TR>
  <TD><font size="2">&nbsp;</font>

  </TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD><div align="right"><font size="2"></font></div></TD>
  <TD><div align="left"><font size="2"></font></div></TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
    <FONT size=2 face="serif">NET DECREASE IN CASH</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap>
<FONT size=2 face="serif">(5,700</FONT>
  </TD>
  <TD><FONT size=2 face="serif">)</FONT>
  </TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD align=right nowrap>
    <div align="right"><FONT size=2 face="serif">(4,134</FONT>
    </div></TD>
  <TD align=right nowrap><div align="left"><FONT size=2 face="serif">)</FONT></div></TD>
</TR>
<TR>
  <TD><font size="2">&nbsp;</font>

  </TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD><div align="right"><font size="2"></font></div></TD>
  <TD><div align="left"><font size="2"></font></div></TD>
</TR>
<TR valign="bottom" bgcolor="#E5FFFF">
  <TD align=left nowrap>
    <FONT size=2 face="serif">CASH and cash equivalents, Beginning of period</FONT><font size="2">&nbsp;
    </font></TD>
  <TD style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">7,671</FONT>
  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font></TD>
  <TD align=right nowrap style="border-bottom:1px solid #000000;">
    <div align="right"><FONT size=2 face="serif">5,723</FONT>
    </div></TD>
  <TD align=right nowrap><div align="left"><font size="2"></font></div></TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
    <FONT size=2 face="serif">CASH and cash equivalents, End of period</FONT><font size="2">&nbsp;
    </font></TD>
  <TD align=left style="border-bottom:1px solid #000000;"><FONT size=2 face="serif">&#36;</FONT>
  </TD>
  <TD align=right nowrap style="border-bottom:3px solid #000000;">
<FONT size=2 face="serif">1,971</FONT>
  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left style="border-bottom:3px solid #000000;"><FONT size=2 face="serif">&#36;</FONT></TD>
  <TD align=right nowrap style="border-bottom:3px solid #000000;">
    <div align="right"><FONT size=2 face="serif">1,589</FONT>
    </div></TD>
  <TD align=right nowrap><div align="left"><font size="2"></font></div></TD>
</TR>
<TR valign="bottom" bgcolor="#E5FFFF">
  <TD align=left nowrap>
    <FONT size=2 face="serif">SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD align=left nowrap><div align="right"><font size="2"></font>

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

  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD align=left nowrap><div align="right"><font size="2"></font>

</div></TD>
  <TD align=left nowrap><div align="left"><font size="2"></font></div></TD>
</TR>
<TR valign="bottom" bgcolor="#E5FFFF">
  <TD align=left nowrap>
    <FONT size=2 face="serif">&nbsp;&nbsp;&nbsp;&nbsp;Interest</FONT><font size="2">&nbsp;
    </font></TD>
  <TD align=left style="border-bottom:3px solid #000000;"><FONT size=2 face="serif">&#36;</FONT>
  </TD>
  <TD align=right nowrap style="border-bottom:3px solid #000000;">
<FONT size=2 face="serif">12</FONT>
  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left style="border-bottom:3px solid #000000;"><FONT size=2 face="serif">&#36;</FONT></TD>
  <TD align=right nowrap style="border-bottom:3px solid #000000;">
    <div align="right"><FONT size=2 face="serif">-</FONT>
    </div></TD>
  <TD align=right nowrap><div align="left"><font size="2"></font></div></TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
    <FONT size=2 face="serif">&nbsp;&nbsp;&nbsp;&nbsp;Income taxes</FONT><font size="2">&nbsp;
    </font></TD>
  <TD align=left style="border-bottom:3px solid #000000;"><FONT size=2 face="serif">&#36;</FONT>
  </TD>
  <TD align=right nowrap style="border-bottom:3px solid #000000;">
<FONT size=2 face="serif">2,140</FONT>
  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left style="border-bottom:3px solid #000000;"><FONT size=2 face="serif">&#36;</FONT></TD>
  <TD align=right nowrap style="border-bottom:3px solid #000000;">
    <div align="right"><FONT size=2 face="serif">1,252</FONT>
    </div></TD>
  <TD align=right nowrap><div align="left"><font size="2"></font></div></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>
<HR noshade align="center" width="100%" size=4>
<P align="left" style="page-break-before:always"></P>
<PAGE>

<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><BR>
<BR>
<B><FONT size=2 face="serif">NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS </FONT></B><BR>
<FONT size=2 face="serif">March 31, 2007</FONT><B><FONT size=2 face="serif"> </FONT></B><BR>
<U><FONT size=2 face="serif">(Unaudited)</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">
<FONT size=2 face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 financial 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'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. </FONT></P>
<P align="justify">
<FONT size=2 face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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;<FONT size=2 face="serif">All adjustments that
in the opinion of management are necessary for a fair presentation have been
reflected as required by regulation S-X Rule 10-01. All such adjustments are
of normal recurring nature.</FONT></P>
<P align="justify">
&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 and 26-week periods ended March 31, 2007 and the Company has reclassified its statements of operations and cash flow data for the prior periods presented, in accordance with Statement of
Financial Accounting Standards (&#147;SFAS&#148;) No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("FAS 144"). These dispositions are discussed below in &#147;Recent Restaurant Dispositions.&#148; </FONT></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">CONSOLIDATION OF VARIABLE INTEREST ENTITIES &#151; In June 2005, the Emerging Issues Task Force ("EITF") 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 was 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;<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, the Company 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 earnings as of October 1, 2006.</FONT></P>
<P align="justify">
&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;<FONT size=2 face="serif">AVAILABLE-FOR-SALE SECURITIES</FONT><B><FONT size=2 face="serif"> </FONT></B><FONT size=2 face="monospace">&#151; </FONT><FONT size=2 face="serif">Available-for-sale securities consist of
United States 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 (loss). 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'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="center">
<FONT size=2 face="serif">- 6 - </FONT></P>

<HR noshade align="center" width="100%" size=4>
<P align="left" style="page-break-before:always"></P>
<PAGE>

<P align="justify">
<B><FONT size=2 face="serif">2. ACQUISITION </FONT></B></P>

<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">On January 8, 2007, the Company aquired the operating assets and leasehold for 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 for &#36;2,000,000 in cash and a &#36;1,000,000 five year promissory note bearing interest at a rate of 7% per year. </FONT></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">The following summarizes the estimated fair values of the assets acquired at the acquisition (Dollar amounts in thousands). </FONT></P>

<table width="50%"  border="0"  cellpadding=0 cellspacing=0 align=center>
  <tr>
    <td width="88%"><FONT size=2 face="serif">Intangibles</FONT></td>
    <td width="2%" align=left><FONT size=2 face="serif">&#36;</FONT></td>
    <td width="10%" align=right><FONT size=2 face="serif">2,487</FONT></td>
  </tr>
  <tr bgcolor="#E5FFFF">
    <td><FONT size=2 face="serif">Fixed assets</FONT>&nbsp;</td>
    <td align=right style="border-bottom:1px solid #000000;">&nbsp;</td>
    <td align=right nowrap style="border-bottom:1px solid #000000;"><FONT size=2 face="serif">513</FONT></td>
  </tr>
  <tr>
    <td><FONT size=2 face="serif">Purchase price</FONT></td>
    <td align=left style="border-bottom:3px solid #000000;"><FONT size=2 face="serif">&#36;</FONT></td>
    <td align=right nowrap style="border-bottom:3px solid #000000;"><FONT size=2 face="serif">3,000</FONT></td>
  </tr>
</table>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">The difference between the aggregate purchase price and fair value of the assets acquired has been recorded as an intangible asset.  The Company is in the process of performing a valuation of
the assets acquired, thus the allocation of the purchase price is subject to change. </FONT></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">The unaudited pro forma
financial information set forth below is based upon the Company&#146;s historical
statements of income for the three and six month periods ended March 31, 2007
and  April 1, 2006. The unauditied pro forma financial information is presented
for informational purposes only and may not be indicative of what actual results
of operations would have been had the acquisition occurred on the dates indicated,
nor does  it purport to represent the results of operations for future periods. </FONT></P>
<TABLE width=100% border=0 cellpadding=0 cellspacing=0>
<TR valign="bottom">
  <TD width="30%" align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD width="16%"><font size="2">&nbsp;</font>
  </TD>
  <TD align=center nowrap colspan=3>
    <font size="2"><U><FONT face="serif">13 Weeks Ended</FONT></U>&nbsp;
    </font></TD>
  <TD width="15%"><font size="2">&nbsp;</font>
  </TD>
  <TD colspan="5" align=center nowrap>
    <div align="center"><font size="2"><U><FONT face="serif">26 Weeks Ended</FONT></U>&nbsp;
    </font></div></TD>
  </TR>
<TR>
  <TD colspan=11><font size="2">&nbsp;</font>

  </TD>
</TR>
<TR valign="bottom">
  <TD height="20" align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD width="5%" align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD width="1%"><font size="2">&nbsp;</font>
  </TD>
  <TD width="8%" rowspan="2" align=center nowrap>
    <FONT size=2 face="serif">April 1,</FONT><font size="2"><br>
    <U><FONT face="serif">2006</FONT></U>
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD colspan=2 rowspan="2" align=center nowrap>
    <FONT size=2 face="serif">March 31,</FONT><font size="2"><BR>
    <U><FONT face="serif">2007</FONT></U>
    </font></TD>
  <TD width="4%"><font size="2">&nbsp;</font>
  </TD>
  <TD colspan="2" rowspan="2" align=center nowrap>
    <FONT size=2 face="serif">April 1,</FONT><font size="2"><br>
    <U><FONT face="serif">2006</FONT></U>
    </font></TD>
  </TR>
<TR valign="bottom">
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  </TR>
<TR>
  <TD colspan=11><font size="2">&nbsp;</font>

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>&nbsp;</TD>
  <TD><font size="2">&nbsp;</font> </TD>
  <TD colspan="2" align=left nowrap><font size="2">&nbsp;</font> </TD>
  <TD align=right nowrap><font size="2">&nbsp; </font></TD>
  <TD><div align="center"><font size="2">(In Thousands) </font> </div></TD>
  <TD align=left nowrap><font size="2">&nbsp;</font> </TD>
  <TD align=right nowrap><font size="2">&nbsp; </font></TD>
  <TD><font size="2">&nbsp;</font> </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font> </TD>
  <TD align=right nowrap><font size="2">&nbsp; </font></TD>
</TR>
<TR valign="bottom" bgcolor="#E5FFFF">
  <TD height="20" align=left nowrap>
    <FONT size=2 face="serif">Total revenues</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD colspan="2" align=right nowrap>
    <FONT size=2 face="serif">&#36;</FONT><font size="2">&nbsp;
    </font></TD>
  <TD align=right nowrap>
    <FONT size=2 face="serif">24,896</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD width="2%" align=left nowrap>
    <div align="right"><FONT size=2 face="serif">&#36;</FONT><font size="2">&nbsp;
    </font></div></TD>
  <TD width="7%" align=right nowrap>
    <FONT size=2 face="serif">55,368</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD width="5%" align=left nowrap>
    <div align="right"><FONT size=2 face="serif">&#36;</FONT><font size="2">&nbsp;
    </font></div></TD>
  <TD width="7%" align=right nowrap>
    <FONT size=2 face="serif">52,108</FONT><font size="2">&nbsp;
    </font></TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
    <FONT size=2 face="serif">Net income (Loss)</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD colspan="2" align=left nowrap><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap>
    <FONT size=2 face="serif">(192)</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap>
    <FONT size=2 face="serif">6,968</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap><font size="2">&nbsp;</font>
  </TD>
  <TD align=right nowrap>
    <FONT size=2 face="serif">683</FONT><font size="2">&nbsp;
    </font></TD>
</TR>
<TR valign="bottom" bgcolor="#E5FFFF">
  <TD align=left nowrap>
    <FONT size=2 face="serif">Net income per share - basic</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD colspan="2" align=right nowrap>
    <FONT size=2 face="serif">&#36;</FONT><font size="2">&nbsp;
    </font></TD>
  <TD align=right nowrap>
    <FONT size=2 face="serif">(0.06)</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap>
    <div align="right"><FONT size=2 face="serif">&#36;</FONT><font size="2">&nbsp;
    </font></div></TD>
  <TD align=right nowrap>
    <FONT size=2 face="serif">1.95</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap>
    <div align="right"><FONT size=2 face="serif">&#36;</FONT>
    </div></TD>
  <TD align=right nowrap>
    <FONT size=2 face="serif">0.20</FONT><font size="2">&nbsp;
    </font></TD>
</TR>
<TR valign="bottom">
  <TD align=left nowrap>
    <FONT size=2 face="serif">Net income per share - diluted</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD colspan="2" align=right nowrap>
    <FONT size=2 face="serif">&#36;</FONT><font size="2">&nbsp;
    </font></TD>
  <TD align=right nowrap>
    <FONT size=2 face="serif">(0.05)</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap>
    <div align="right"><FONT size=2 face="serif">&#36;</FONT><font size="2">&nbsp;
    </font></div></TD>
  <TD align=right nowrap>
    <FONT size=2 face="serif">1.94</FONT><font size="2">&nbsp;
    </font></TD>
  <TD><font size="2">&nbsp;</font>
  </TD>
  <TD align=left nowrap>
    <div align="right"><FONT size=2 face="serif">&#36;</FONT>
    </div></TD>
  <TD align=right nowrap>
    <FONT size=2 face="serif">0.19</FONT><font size="2">&nbsp;
    </font></TD>
</TR>
</TABLE>
<BR>
<P align="justify">
<FONT size=2 face="serif">The actual results for the 13 weeks ended March 31, 2007 estimate the unaudited pro forma results. </FONT></P>
<P align="justify">
<B><FONT size=2 face="serif">3. RECENT RESTAURANT DISPOSITIONS </FONT></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT size=2 face="serif"> </FONT></B><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><B><FONT size=2 face="serif"> </FONT></B></P>
<P align="justify">
&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 on February 4, 2005 as &#147;Vivid&#148;. 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 FAS 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;52,000 and &#36;253,000, respectively, during the 13-week
periods ended March 31, 2007 and April 1, 2006. The Company recorded an operating loss of &#36;158,000 and &#36;502,000, respectively, during the 26-week periods ended March 31, 2007 and April 1, 2006.The impairment charge and operating losses are
included in discontinued operations.</FONT><B><FONT size=2 face="serif"> </FONT></B></P>
<P align="justify">
&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="center">
<FONT size=2 face="serif">- 7 - </FONT></P>
<HR noshade align="center" width="100%" size=4>
<P align="left" style="page-break-before:always"></P>
<PAGE>

<P align="justify">
&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;<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;35,000
 and &#36;174,000 for the second fiscal quarters of 2007 and 2006,
respectively, for both facilities. For the 26-week periods ended March 31, 2007
and April 1, 2006 the Company recorded operating income of &#36;41,000 and
&#36;344,000, respectively, on these facilities. The gain on sale and losses
are included in discontinued operations.</FONT></P>
<P align="justify">
<B><FONT size=2 face="serif">4. RECEIVABLES FROM EMPLOYEES IN RESPECT OF STOCK OPTION EXERCISES </FONT></B></P>
<P align="justify">
&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 March 31, 2007 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 March 31, 2007). </FONT></P>
<P align="justify">
<B><FONT size=2 face="serif">5. INCOME (LOSS) PER SHARE OF COMMON STOCK </FONT></B></P>
<P align="justify">
&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="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">For the 13-week and 26-week
periods ended March 31, 2007, options to purchase 282,000 shares of common stock
at a price range of &#36;29.60 - &#36;32.15 were included in diluted earnings per
share. For the 13-week and 26-week periods ended April 1, 2006, 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 at a price of
&#36;29.60 were not included in diluted earnings per share as their impact was antidilutive for the 13-week and 26-week periods ended April, 1, 2006.</FONT><B><FONT size=2 face="serif"> </FONT></B></P>
<P align="justify">
<B><FONT size=2 face="serif">6. SHARE-BASED COMPENSATION </FONT></B></P>
<P align="justify">
<B><FONT size=2 face="serif"> </FONT></B><FONT size=2 face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 Stock 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;<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="center">
<FONT size=2 face="serif">- 8 - </FONT></P>
<HR noshade align="center" width="100%" size=4>
<P align="left" style="page-break-before:always"></P>
<PAGE>

<P align="justify">
<FONT size=2 face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon adoption of SFAS
No. 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 No. 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">
<FONT size=2 face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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;<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 the first and second quarter of fiscal
2007, no excess tax benefits were generated. </FONT></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">The compensation cost charged against income in the second fiscal quarter of 2007 for share-based compensation programs was &#36;78,000, before a tax benefit of &#36;27,000. The compensation
cost charged against income in the 26-week period ended March 31, 2007 for share-based compensation programs was &#36;252,000, before a tax benefit of &#36;87,000. 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;<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="justify">
<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 align=left width=31% nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD width=2%><font size="2">&nbsp;</font>
  </TD>
  <TD align=left width=14% nowrap>

    <div align="center"><font size="2"></font></div></TD>
  <TD width=2%><font size="2">&nbsp;</font>
  </TD>
  <TD width=10% rowspan="4" align=center nowrap style="border-bottom:1px solid #000000;">
    <font size="2"><B><FONT face="serif">Weighted</FONT></B><br>
    <B><FONT face="serif">Average</FONT></B><br>
    <B><FONT face="serif">Exercise</FONT></B><br>
    <B><FONT face="serif">Price</FONT></B>
    </font></TD>
  <TD width=2%><font size="2">&nbsp;</font>
  </TD>
  <TD width=9% rowspan="4" align=center nowrap style="border-bottom:1px solid #000000;">
    <font size="2"><B><FONT face="serif">Weighted</FONT></B><br>
    <B><FONT face="serif">Average</FONT></B><br>
    <B><FONT face="serif">Fair</FONT></B><br>
    <B><U><FONT face="serif">Value</FONT></U></B>
    </font></TD>
  <TD width=2%><font size="2">&nbsp;</font>
  </TD>
  <TD width=12% rowspan="4" align=center nowrap style="border-bottom:1px solid #000000;">
    <font size="2"><B><FONT face="serif">Weighted</FONT></B><br>
    <B><FONT face="serif">Average</FONT></B><br>
    <B><FONT face="serif">Contractual</FONT></B><br>
    <B><FONT face="serif">Term (Yrs.)</FONT></B>
    </font></TD>
  <TD width=2%><font size="2">&nbsp;</font>
  </TD>
  <TD align=left width=10% nowrap><font size="2">&nbsp;</font>

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left width=31% nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD width=2%><font size="2">&nbsp;</font>
  </TD>
  <TD align=left width=14% nowrap>

    <div align="center"><font size="2"></font></div></TD>
  <TD width=2%><font size="2">&nbsp;</font>
  </TD>
  <TD width=2%><font size="2">&nbsp;</font>
  </TD>
  <TD width=2%><font size="2">&nbsp;</font>
  </TD>
  <TD width=2%><font size="2">&nbsp;</font>
  </TD>
  <TD width=10% rowspan="3" align=center nowrap style="border-bottom:1px solid #000000;">
    <font size="2"><B><FONT face="serif">Average</FONT></B><br>
    <B><FONT face="serif">Intrinsic</FONT></B><br>
    <B><FONT face="serif">Value</FONT></B>
    </font></TD>
</TR>
<TR valign="bottom">
  <TD align=left width=31% nowrap><font size="2">&nbsp;</font>

  </TD>
  <TD width=2%><font size="2">&nbsp;</font>
  </TD>
  <TD align=left width=14% nowrap>

    <div align="center"><font size="2"></font></div></TD>
  <TD width=2%><font size="2">&nbsp;</font>
  </TD>
  <TD width=2%><font size="2">&nbsp;</font>
  </TD>
  <TD width=2%><font size="2">&nbsp;</font>
  </TD>
  <TD width=2%><font size="2">&nbsp;</font>
  </TD>
  </TR>
<TR valign="bottom">
  <TD align=left width=31% nowrap>
    <font size="2"><B><FONT face="serif"><U>Options</U></FONT></B>&nbsp;
    </font></TD>
  <TD width=2%><font size="2">&nbsp;</font>
  </TD>
  <TD align=right width=14% nowrap style="border-bottom:1px solid #000000;">
    <div align="center"><font size="2"><B><FONT face="serif">Shares</FONT></B>&nbsp;
    </font></div></TD>
  <TD width=2%><font size="2">&nbsp;</font>
  </TD>
  <TD width=2%><font size="2">&nbsp;</font>
  </TD>
  <TD width=2%><font size="2">&nbsp;</font>
  </TD>
  <TD width=2%><font size="2">&nbsp;</font>
  </TD>
  </TR>
<TR>
  <TD colspan=11><font size="2">&nbsp;</font>

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left width=31% nowrap>
    <FONT size=2 face="serif">Outstanding as September 30, 2006:</FONT><font size="2">&nbsp;
    </font></TD>
  <TD width=2%><font size="2">&nbsp;</font>
  </TD>
  <TD align=center width=14% nowrap>
    <FONT size=2 face="serif">202,000</FONT>
  </TD>
  <TD width=2%><font size="2">&nbsp;</font>
  </TD>
  <TD align=center width=10% nowrap>
    <FONT size=2 face="serif">&#36;21.32</FONT><font size="2">&nbsp;
    </font></TD>
  <TD width=2%><font size="2">&nbsp;</font>
  </TD>
  <TD align=center width=9% nowrap>
    <font size="2">&nbsp;<FONT face="serif">&#36;8.23</FONT></font>
  </TD>
  <TD width=2%><font size="2">&nbsp;</font>
  </TD>
  <TD align=center width=12% nowrap>
<FONT size=2 face="serif">5.97</FONT>
  </TD>
  <TD width=2%><font size="2">&nbsp;</font>
  </TD>
  <TD align=left width=10% nowrap><font size="2">&nbsp;</font>

  </TD>
</TR>
<TR valign="bottom" bgcolor="#E5FFFF">
  <TD align=left width=31% nowrap>
    <FONT size=2 face="serif">Granted</FONT><font size="2">&nbsp;
    </font></TD>
  <TD width=2%><font size="2">&nbsp;</font>
  </TD>
  <TD align=center width=14% nowrap>
    <FONT size=2 face="serif">105,000</FONT>
  </TD>
  <TD width=2%><font size="2">&nbsp;</font>
  </TD>
  <TD align=center width=10% nowrap>
<FONT size=2 face="serif">&#36;32.15</FONT>
  </TD>
  <TD width=2%><font size="2">&nbsp;</font>
  </TD>
  <TD align=center width=9% nowrap>
<FONT size=2 face="serif">&#36;10.94</FONT>
  </TD>
  <TD width=2%><font size="2">&nbsp;</font>
  </TD>
  <TD align=center width=12% nowrap>
<FONT size=2 face="serif">9.73</FONT>
  </TD>
  <TD width=2%><font size="2">&nbsp;</font>
  </TD>
  <TD align=left width=10% nowrap><font size="2">&nbsp;</font>

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left width=31% nowrap>
    <FONT size=2 face="serif">Exercised</FONT><font size="2">&nbsp;
    </font></TD>
  <TD width=2%><font size="2">&nbsp;</font>
  </TD>
  <TD align=center width=14% nowrap>
    <font size="2">&nbsp;<FONT face="serif">(25,500)</FONT></font>
    </TD>
  <TD width=2%><font size="2">&nbsp;</font>
  </TD>
  <TD align=center width=10% nowrap>
    <FONT size=2 face="serif">&#36; 22 .2 9</FONT><font size="2">&nbsp;
    </font></TD>
  <TD width=2%><font size="2">&nbsp;</font>
  </TD>
  <TD align=center width=9% nowrap>
    <font size="2">&nbsp;<FONT face="serif">&#36;6.22</FONT></font>
  </TD>
  <TD width=2%><font size="2">&nbsp;</font>
  </TD>
  <TD align=center width=12% nowrap>
    <FONT size=2 face="serif">-</FONT><font size="2">&nbsp;
    </font></TD>
  <TD width=2%><font size="2">&nbsp;</font>
  </TD>
  <TD align=left width=10% nowrap><font size="2">&nbsp;</font>

  </TD>
</TR>
<TR valign="bottom" bgcolor="#E5FFFF">
  <TD align=left width=31% nowrap>
    <FONT size=2 face="serif">Forfeited/Cancelled</FONT><font size="2">&nbsp;
    </font></TD>
  <TD width=2%><font size="2">&nbsp;</font>
  </TD>
  <TD align=center width=14% nowrap style="border-bottom:1px solid #000000;">
    <div align="center"><FONT size=2 face="serif">-</FONT><font size="2">&nbsp;
    </font></div></TD>
  <TD width=2%><font size="2">&nbsp;</font>
  </TD>
  <TD align=center width=10% nowrap style="border-bottom:1px solid #000000;">
    <FONT size=2 face="serif">-</FONT><font size="2">&nbsp;
    </font></TD>
  <TD width=2%><font size="2">&nbsp;</font>
  </TD>
  <TD align=center width=9% nowrap style="border-bottom:1px solid #000000;">
    <FONT size=2 face="serif">-</FONT><font size="2">&nbsp;
    </font></TD>
  <TD width=2%><font size="2">&nbsp;</font>
  </TD>
  <TD align=center width=12% nowrap style="border-bottom:1px solid #000000;">
    <FONT size=2 face="serif">-</FONT><font size="2">&nbsp;
    </font></TD>
  <TD width=2%><font size="2">&nbsp;</font>
  </TD>
  <TD align=left width=10% nowrap style="border-bottom:1px double #000000;"><font size="2">&nbsp;</font>

  </TD>
</TR>
<TR>
  <TD colspan=11><font size="2">&nbsp;</font>

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left width=31% nowrap>
    <FONT size=2 face="serif">Outstanding at March 31, 2007</FONT><font size="2">&nbsp;
    </font></TD>
  <TD width=2%><font size="2">&nbsp;</font>
  </TD>
  <TD align=center width=14% nowrap style="border-bottom:3px solid #000000;">
    <FONT size=2 face="serif">281,500</FONT>
  </TD>
  <TD width=2%><font size="2">&nbsp;</font>
  </TD>
  <TD align=center width=10% nowrap style="border-bottom:3px solid #000000;">
    <FONT size=2 face="serif">&#36; 30.55</FONT>
  </TD>
  <TD width=2%><font size="2">&nbsp;</font>
  </TD>
  <TD align=center width=9% nowrap style="border-bottom:3px solid #000000;">
    <font size="2">&nbsp;<FONT face="serif">&#36;9.18</FONT></font>
  </TD>
  <TD width=2%><font size="2">&nbsp;</font>
  </TD>
  <TD align=center width=12% nowrap style="border-bottom:3px solid #000000;">
    <font size="2">&nbsp;<FONT face="serif">8.48</FONT></font>
  </TD>
  <TD width=2%><font size="2">&nbsp;</font>
  </TD>
  <TD align=center width=10% nowrap style="border-bottom:3px solid #000000;">
    <FONT size=2 face="serif">&#36;957,000</FONT>
  </TD>
</TR>
<TR>
  <TD colspan=11><font size="2">&nbsp;</font>

  </TD>
</TR>
<TR valign="bottom" bgcolor="#E5FFFF">
  <TD align=left width=31% nowrap>
    <FONT size=2 face="serif">Exercisable at March 31, 2007</FONT><font size="2">&nbsp;
    </font></TD>
  <TD width=2%><font size="2">&nbsp;</font>
  </TD>
  <TD align=center width=14% nowrap style="border-bottom:3px solid #000000;">
    <FONT size=2 face="serif">176,500</FONT>
  </TD>
  <TD width=2%><font size="2">&nbsp;</font>
  </TD>
  <TD align=center width=10% nowrap style="border-bottom:3px solid #000000;">
<FONT size=2 face="serif">&#36;29.60</FONT>
  </TD>
  <TD width=2%><font size="2">&nbsp;</font>
  </TD>
  <TD align=center width=9% nowrap style="border-bottom:3px solid #000000;">
    <font size="2">&nbsp;<FONT face="serif">&#36;8.13</FONT></font>
  </TD>
  <TD width=2%><font size="2">&nbsp;</font>
  </TD>
  <TD align=center width=12% nowrap style="border-bottom:3px solid #000000;">
    <font size="2">&nbsp;<FONT face="serif">7.73</FONT></font>
  </TD>
  <TD width=2%><font size="2">&nbsp;</font>
  </TD>
  <TD align=center width=10% nowrap style="border-bottom:3px solid #000000;">
    <FONT size=2 face="serif">&#36;768,000</FONT>
    </TD>
</TR>
</TABLE>
<BR>
<P align="justify">
<FONT size=2 face="monospace"> </FONT><FONT size=2 face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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">
<FONT size=2 face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of March 31, 2007, there was approximately &#36;1,002,000 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">
<FONT size=2 face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company, generally, issues new shares upon the exercise of employee stock options. </FONT></P>
<P align="justify">
<B><FONT size=2 face="serif">7. INVESTMENT SECURITIES </FONT></B></P>
<P align="justify">
<FONT size=2 face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 March 31, 2007 are as follows:
</FONT></P>

<P align="center">
<FONT size=2 face="serif">- 9 - </FONT></P>
<hr noshade align="center" width="100%" size=4>
<P align="left" style="page-break-before:always"></P>
<PAGE>

<TABLE width=100% border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD width="32%" align=left nowrap><font size="2">&nbsp;</font></TD>
    <TD width="4%"><font size="2">&nbsp;</font></TD>
    <TD colspan="3" align=left nowrap><div align="center"><font size="2"><B><FONT face="serif">Amortized</FONT></B>&nbsp; </font></div></TD>
    <TD width="8%"><font size="2">&nbsp;</font></TD>
    <TD align=right nowrap colspan=3><div align="center"><font size="2"><B><font size="2"><B><FONT face="serif">(In
                  Thousands)&nbsp;&nbsp; <br>
Gross unrealized</FONT></B>&nbsp; </font></div></TD>
    <TD width="5%"><font size="2">&nbsp;</font></TD>
    <TD width="13%" align=center nowrap><font size="2"><B><FONT face="serif">Gross unrealized</FONT></B>&nbsp; </font></TD>
    <TD width="4%"><font size="2">&nbsp;</font></TD>
    <TD width="2%" align=left nowrap><font size="2">&nbsp;</font></TD>
    <TD width="1%" align=left nowrap><font size="2">&nbsp;</font></TD>
    <TD width="6%"><font size="2">&nbsp;</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left nowrap><font size="2">&nbsp;</font></TD>
    <TD><font size="2">&nbsp;</font></TD>
    <TD colspan="3" align=left nowrap style="border-bottom:1px double #000000;"><div align="center"><font size="2"><B><FONT face="serif">Cost</FONT></B>&nbsp; </font></div></TD>
    <TD><font size="2">&nbsp;</font></TD>
    <TD align=center nowrap colspan=3 style="border-bottom:1px double #000000;"><font size="2"><B><FONT face="serif">holding
          gains</FONT></B>&nbsp; </font></TD>
    <TD><font size="2">&nbsp;</font></TD>
    <TD align=center nowrap style="border-bottom:1px double #000000;"><font size="2"><B><FONT face="serif">holding
          losses</FONT></B>&nbsp; </font></TD>
    <TD><font size="2">&nbsp;</font></TD>
    <TD align=right nowrap colspan=3 style="border-bottom:1px double #000000;"><div align="center"><font size="2"><B><FONT face="serif">Fair
          value</FONT></B>&nbsp; </font></div></TD>
  </TR>
  <TR>
    <TD colspan=15><font size="2">&nbsp;</font></TD>
  </TR>
  <TR valign="bottom" bgcolor="#E5FFFF"5>
    <TD align=left nowrap><FONT size=2 face="serif">At March 31, 2007:</FONT><font size="2">&nbsp; </font></TD>
    <TD><font size="2">&nbsp;</font></TD>
    <TD width="2%" align=left nowrap><font size="2">&nbsp;</font></TD>
    <TD width="3%"><font size="2">&nbsp;</font></TD>
    <TD width="8%" align=left nowrap><font size="2">&nbsp;</font></TD>
    <TD><font size="2">&nbsp;</font></TD>
    <TD width="2%" align=left nowrap><font size="2">&nbsp;</font></TD>
    <TD width="2%"><font size="2">&nbsp;</font></TD>
    <TD width="8%" align=left nowrap><font size="2">&nbsp;</font></TD>
    <TD><font size="2">&nbsp;</font></TD>
    <TD align=left nowrap><font size="2">&nbsp;</font></TD>
    <TD><font size="2">&nbsp;</font></TD>
    <TD align=left nowrap><font size="2">&nbsp;</font></TD>
    <TD align=left nowrap><font size="2">&nbsp;</font></TD>
    <TD><font size="2">&nbsp;</font></TD>
  </TR>
  <TR>
    <TD colspan=15><font size="2">&nbsp;</font></TD>
  </TR>
  <TR valign="bottom" bgcolor="#E5FFFF">
    <TD align=left nowrap><FONT size=2 face="serif">Available for sale
        short-term:</FONT><font size="2">&nbsp; </font></TD>
    <TD><font size="2">&nbsp;</font></TD>
    <TD align=left nowrap><font size="2">&nbsp;</font></TD>
    <TD><font size="2">&nbsp;</font></TD>
    <TD align=left nowrap><font size="2">&nbsp;</font></TD>
    <TD><font size="2">&nbsp;</font></TD>
    <TD align=left nowrap><font size="2">&nbsp;</font></TD>
    <TD><font size="2">&nbsp;</font></TD>
    <TD align=left nowrap><font size="2">&nbsp;</font></TD>
    <TD><font size="2">&nbsp;</font></TD>
    <TD align=left nowrap><font size="2">&nbsp;</font></TD>
    <TD><font size="2">&nbsp;</font></TD>
    <TD align=left nowrap><font size="2">&nbsp;</font></TD>
    <TD align=left nowrap><font size="2">&nbsp;</font></TD>
    <TD><font size="2">&nbsp;</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left nowrap><FONT size=2 face="serif">Government debt
        securities</FONT><font size="2">&nbsp; </font></TD>
    <TD><font size="2">&nbsp;</font></TD>
    <TD align=left nowrap><FONT size=2 face="serif">&#36;</FONT></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap><font size="2" face="serif">740</FONT></TD>
    <TD><font size="2">&nbsp;</font></TD>
    <TD align=left nowrap><FONT size=2 face="serif">&#36;</FONT></TD>
    <TD colspan="2" align=right><font size="2" face="serif">7</FONT></TD>
    <TD><font size="2">&nbsp;</font></TD>
    <TD align=center nowrap><FONT size=2 face="serif">-</FONT><font size="2">&nbsp; </font></TD>
    <TD><font size="2">&nbsp;</font></TD>
    <TD align=left nowrap><font size="2">&nbsp;</font></TD>
    <TD align=left nowrap><div align="right"><FONT size=2 face="serif">&#36;</FONT><font size="2">&nbsp; </font></div></TD>
    <TD><div align="right"><FONT size=2 face="serif">747</FONT><font size="2">&nbsp; </font></div></TD>
  </TR>
  <TR valign="bottom" bgcolor="#E5FFFF">
    <TD align=left nowrap><FONT size=2 face="serif">Corporate debt
        securities</FONT><font size="2">&nbsp; </font></TD>
    <TD><font size="2">&nbsp;</font></TD>
    <TD colspan="3" align=left nowrap><div align="right"><FONT size=2 face="serif">4,150</FONT><font size="2">&nbsp; </font></div></TD>
    <TD><font size="2">&nbsp;</font></TD>
    <TD align=left nowrap><font size="2">&nbsp;</font></TD>
    <TD colspan="2"><div align="right"><FONT size=2 face="serif">17</FONT><font size="2">&nbsp; </font></div></TD>
    <TD><font size="2">&nbsp;</font></TD>
    <TD align=center nowrap><FONT size=2 face="serif">-</FONT><font size="2">&nbsp; </font></TD>
    <TD><font size="2">&nbsp;</font></TD>
    <TD align=left nowrap><font size="2">&nbsp;</font></TD>
    <TD align=left nowrap><font size="2">&nbsp;</font></TD>
    <TD><div align="right"><FONT size=2 face="serif">4,167</FONT><font size="2">&nbsp; </font></div></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left nowrap><FONT size=2 face="serif">Fixed income securities</FONT><font size="2">&nbsp; </font></TD>
    <TD><font size="2">&nbsp;</font></TD>
    <TD colspan="3" align=left nowrap style="border-bottom:1px solid #000000;"><div align="right"><FONT size=2 face="serif">198</FONT><font size="2">&nbsp; </font></div></TD>
    <TD><font size="2">&nbsp;</font></TD>
    <TD align=left nowrap style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font></TD>
    <TD colspan="2"  nowrap style="border-bottom:1px solid #000000;"><div align="right"><FONT size=2 face="serif">1</FONT><font size="2">&nbsp; </font></div></TD>
    <TD><font size="2">&nbsp;</font></TD>
    <TD align=center nowrap style="border-bottom:1px solid #000000;"><FONT size=2 face="serif">-</FONT><font size="2">&nbsp; </font></TD>
    <TD><font size="2">&nbsp;</font></TD>
    <TD align=left><font size="2">&nbsp;</font></TD>
    <TD align=left nowrap style="border-bottom:1px solid #000000;"><font size="2">&nbsp;</font></TD>
    <TD  nowrap style="border-bottom:1px solid #000000;"><div align="right"><FONT size=2 face="serif">199</FONT><font size="2">&nbsp; </font></div></TD>
  </TR>
  <TR valign="bottom" bgcolor="#E5FFFF">
    <TD align=left nowrap><font size="2">&nbsp;</font></TD>
    <TD><font size="2">&nbsp;</font></TD>
    <TD align=left nowrap style="border-bottom:3px solid #000000;"><FONT size=2 face="serif">&#36;</FONT></TD>
    <TD align=left nowrap style="border-bottom:3px solid #000000;">&nbsp;</TD>
    <TD align=right nowrap style="border-bottom:3px solid #000000;"><font size="2" face="serif">5,088</FONT></TD>
    <TD><font size="2">&nbsp;</font></TD>
    <TD align=left nowrap style="border-bottom:3px solid #000000;"><FONT size=2 face="serif">&#36;</FONT></TD>
    <TD colspan="2" align=right nowrap style="border-bottom:3px solid #000000;"><font size="2" face="serif">25</FONT></TD>
    <TD><font size="2">&nbsp;</font></TD>
    <TD align=center nowrap style="border-bottom:3px solid #000000;"><FONT size=2 face="serif">-</FONT><font size="2">&nbsp; </font></TD>
    <TD><font size="2">&nbsp;</font></TD>
    <TD align=left nowrap><font size="2">&nbsp;</font></TD>
    <TD align=left nowrap style="border-bottom:3px solid #000000;"><div align="right"><FONT size=2 face="serif">&#36;</FONT><font size="2">&nbsp; </font></div></TD>
    <TD  nowrap style="border-bottom:3px solid #000000;"><div align="right"><FONT size=2 face="serif">5,113</FONT><font size="2">&nbsp; </font></div></TD>
  </TR>
</TABLE>
<P align="justify">&nbsp;</P>
<P align="justify">
<B><FONT size=2 face="serif">8. DIVIDENDS </FONT></B></P>
<P align="justify">
&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, January 12, April 12, July 12, October 10 and December 20, 2006 and April 12, 2007. Also on December 20, 2006, the Company declared a special dividend in the amount of &#36;3.00
per share. 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></P>
<P align="justify">
<B><FONT size=2 face="serif">9. RELATED PARTY TRANSACTIONS </FONT></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Receivables due from
officers and employees, excluding stock option receivables, totaled &#36;369,000
at March 31, 2007 and &#36;394,000</FONT><B><FONT size=2 face="serif"> </FONT></B><FONT size=2 face="serif">at
September 30, 2006. Such loans bear interest at the minimum statutory rate (4.79
% at March 31, 2007). </FONT></P>
<P align="justify">
<B><FONT size=2 face="serif">10. LEASE ACCOUNTING </FONT></B></P>
<P align="justify">
<B><FONT size=2 face="serif"> </FONT></B><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">"Accounting for Leases"</FONT></I><FONT size=2 face="serif">. The Company received &#36;3,500,000
during fiscal 2006 in connection with the construction of its two facilities
in Atlantic City, New Jersey. </FONT> </P>
<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;<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 and 26-week periods ended March 31, 2007 and the Company has reclassified its statements of operations and cash flow data for the prior periods presented below, in accordance with Statement
of Financial Accounting Standards (&#147;SFAS&#148;) No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("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">
<FONT size=2 face="monospace"> </FONT><FONT size=2 face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the Company&#146;s second fiscal quarter of 2007, total revenues of &#36;25,867,000 increased 7.2% compared to total revenues of &#36;24,120,000 in the second fiscal quarter of
2006. Revenues for the second fiscal quarter of 2006 were reduced by &#36;1,743,000</FONT><B><FONT size=2 face="serif"> </FONT></B><FONT size=2 face="serif">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 second fiscal quarter of 2007 were increased by &#36;693,000 as a result of the consolidation of one managed restaurant. The Company had net income of &#36;378,000 in
the second fiscal quarter of 2007 compared to a net loss of &#36;151,000 in the second fiscal quarter of 2006. The second fiscal quarter of 2006 was negatively affected by pre-opening and early operating losses of &#36;421,000 at the Company&#146;s
Gallagher&#146;s Steakhouse and Luna Lounge, both located in Atlantic City, New Jersey. Both these facilities opened in late December 2005.</FONT></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Same store sales in Las Vegas increased by &#36;297,000 or 2.0% in the second fiscal quarter of 2007 compared to the second fiscal quarter of 2006. Same store sales in New York increased
&#36;310,000 or 7.0% during the second quarter. Same store sales in Washington D.C. increased by &#36;180,000 or 6.3% during the second quarter. Same store sales in Atlantic City increased by &#36;349,000 or 68.3% in the second quarter. The
increases in New York and Washington D.C. was principally due to milder winter weather. The increase in Atlantic City was primarily due to last year&#146;s low level of sales following the start-up of these operations. The Company does not
anticipate similar percentage increases in Atlantic City after this fiscal year.</FONT><B><FONT size=2 face="serif"> </FONT></B><FONT size=2 face="serif"> The increases in all regions was also, in part, due to general improvement in economic
conditions and the public&#146;s willingness and inclination to continue vacation and convention travel. </FONT></P>

<P align="center">
<FONT size=2 face="serif">- 10 - </FONT></P>
<HR noshade align="center" width="100%" size=4>
<P align="left" style="page-break-before:always"></P>
<PAGE>

<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">During the Company&#146;s 26-week period ended March 31, 2007, total revenues of &#36;54,069,000 increased 8.0% compared to total revenues of &#36;50,083,000 in the 26-week period ended April
1, 2006. Revenues for the 26-week period ended March 31, 2007 were reduced by &#36;1,343,000</FONT><B><FONT size=2 face="serif"> </FONT></B><FONT size=2 face="serif">and revenues for the 26-week period ended April 1, 2006 were reduced by
&#36;3,447,000</FONT><B><FONT size=2 face="serif"> </FONT></B><FONT size=2 face="serif">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;. The Company
had net income of &#36;6,968,000 in the 26-week period ended March 31, 2007 compared to net income of &#36;765,000 for the 26-week period ended April 1, 2006. Net income was positively affected during the 26-week period ended March 31, 2007 as a
result of the sale during the quarter of the Company&#146;s Lutece and Tsunami locations and a portion of the Vivid location used by Lutece as a prep kitchen to Venetian Casino Resort, LLC and the lack of pre-opening and early operating losses
experienced at the Company&#146;s Gallagher&#146;s Steakhouse and Luna Lounge, now Gallagher&#146;s Burger Bar, both located in Atlantic City, New Jersey. Net income was negatively affected during the 26-week period ended April 1, 2006 as a result
of &#36;447,000 pre-opening and early operating losses experienced at the Company&#146;s Atlantic City locations.</FONT></P>
<P align="justify">
<B><FONT size=2 face="serif">Costs and Expenses</FONT></B><FONT size=2 face="serif"> </FONT></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Food and beverage costs for the second quarter of 2007 as a percentage of total revenues were 26.4% compared to 26.2% in the second quarter of 2006. These costs for the 26-weeks ended March 31,
2007 as a percentage of total revenues were 25.6% compared to 25.3% in the 26-week period ended April 1, 2006. </FONT></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Payroll expenses as a percentage of total revenues were 34.5% for the second quarter of 2007 as compared to 35.2% in the second quarter of 2006. Payroll expenses as a percentage of total
revenues were 33.0% for the 26-week period ended March 31, 2007 as compared to 33.6% for the 26-week period ended April 1, 2006. Occupancy expenses as a percentage of total revenues were 13.8% during the second fiscal quarter of 2007 compared to
16.2% in the second quarter of 2006. Occupancy expenses as a percentage of total revenues were 14.0% during the 26-week period ended March 31, 2007 compared 16.0% for the 26-week period ended April 1, 2006. The decrease in occupancy expenses was
primarily due to increased sales and the Company&#146;s sale of its Lutece and Tsunami locations at the Venetian.</FONT><B><FONT size=2 face="serif"> </FONT></B><FONT size=2 face="serif">Other operating costs and expenses as a percentage of total
revenues were 12.8% during the second fiscal quarter of 2007 compared to 12.3% in the second quarter of 2006. Other operating costs and expenses as a percentage of total revenues were 12.1% for the 26-week period ended March 31, 2007 compared to
12.2% for the 26-week period ended April 1, 2006. General and administrative expenses as a percentage of total revenues were 8.0% during the second fiscal quarter of 2007 compared to 7.6% in the second quarter of 2006. General and administrative
expenses as a percentage of total revenue were 7.5% for the 26-week period ended March 31, 2007 compared to 7.1% for the 26-week period ended April 1, 2006. </FONT></P>
<P align="justify">
<B><FONT size=2 face="serif">Income Taxes</FONT></B></P>
<P align="justify">
&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;<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;<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;<FONT size=2 face="serif">The Company's primary source of capital has been cash provided by operations. 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="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">The Company had a working capital surplus of &#36;7,129,000</FONT><B><FONT size=2 face="serif"> </FONT></B><FONT size=2 face="serif">at March 31, 2007 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.</FONT></P>
<P align="justify">
&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="center">
<FONT size=2 face="serif">- 11 - </FONT></P>
<HR noshade align="center" width="100%" size=4>
<P align="left" style="page-break-before:always"></P>
<PAGE>


<P align="justify">
<B><FONT size=2 face="serif">Restaurant Expansion </FONT></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">In October 2006, the Company converted its bar, </FONT><I><FONT size=2 face="serif">Luna Lounge</FONT></I><FONT size=2 face="serif">, at the Resorts Atlantic City Hotel and Casino in Atlantic
City, New Jersey, into a restaurant, </FONT><I><FONT size=2 face="serif">Gallagher&#146;s Burger Bar</FONT></I><FONT size=2 face="serif">. </FONT></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">On January 8, 2007, the Company 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. The Company purchased this facility from the previous owner for &#36;2,000,000 in cash and a &#36;1,000,000 five year promissory note bearing interest at a rate of 7% per year. </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;<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><B><FONT size=2 face="serif"> </FONT></B></P>
<P align="justify">
&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 on February 4, 2005 as &#147;Vivid&#148;. 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 FAS 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;52,000 and &#36;253,000, respectively, during the 13-week
periods ended March 31, 2007 and April 1, 2006. The Company recorded an operating loss of &#36;158,000 and &#36;502,000, respectively, during the 26-week periods ended March 31, 2007 and April 1, 2006.The impairment charge and operating losses are
included in discontinued operations.</FONT><B><FONT size=2 face="serif"> </FONT></B></P>
<P align="justify">
&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;<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;<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;38,000 and &#36;174,000 for the second fiscal quarters of 2007 and 2006, respectively, for both facilities. For the 26-week periods ended March 31, 2007 and April 1, 2006 the Company recorded an operating loss of &#36;41,000 and
&#36;344,000, respectively, on these facilities. The gain on sale and losses are included in discontinued operations.</FONT></P>
<P align="justify">
<B><FONT size=2 face="serif">Critical Accounting Policies </FONT></B></P>
<P align="justify">
&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="center">
<FONT size=2 face="serif">- 12 - </FONT></P>
<HR noshade align="center" width="100%" size=4>
<P align="left" style="page-break-before:always"></P>
<PAGE>

<P align="justify">
&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
Emerging Issues Task Force ("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;
(&#147;EITF 04-5&#148;) as discussed below.</FONT></P>
<P align="justify">
<B><FONT size=2 face="serif">Recent Accounting Developments</FONT></B></P>
<P align="justify">
<FONT size=2 face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Financial Accounting Standards Board has recently issued the following accounting pronouncements:</FONT></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">In June 2005, the EITF issued EITF No. 04-5. 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 March 31, 2007 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;<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, 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">
&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">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">In September 2006, the FASB issued FASB Statement No. 157 ("SFAS 157"), "Fair Value Measurements." SFAS 157 establishes a framework for measuring fair value in generally accepted accounting
principles and expands disclosures about fair value measurements. SFAS 157 is effective for all financial statements issued for fiscal years beginning after November 15, 2007. The Company is currently assessing the impact of SFAS No. 157 on its
consolidated financial position and results of operations. </FONT></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities - including an amendment of FASB Statement No. 115" ("SFAS No. 159"). SFAS
No. 159 permits entities to elect to measure many financial instruments and certain other items at fair value. Upon adoption of SFAS No. 159, an entity may elect the fair value option for eligible items that exist at the adoption date. Subsequent to
the initial adoption, the election of the fair value option should only be made at initial recognition of the asset or liability or upon a remeasurement event that gives rise to new-basis accounting. SFAS No. 159 does not affect any existing
accounting literature that requires certain assets and liabilities to be carried at fair value nor does it eliminate disclosure requirements included in other accounting standards. SFAS No. 159 is effective for fiscal years beginning after November
15, 2007. The Company is currently assessing the impact of SFAS No. 159 on its consolidated financial position and results of operations.</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">
<FONT size=2 face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None.</FONT><B><FONT size=2 face="serif"> </FONT></B></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;<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 March 31, 2007 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;<FONT size=2 face="serif">There were no changes in the Company&#146;s internal control over financial reporting during the second 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 align="center" width="100%" size=4>
<P align="left" style="page-break-before:always"></P>
<PAGE>

<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>
<P align="justify">
<B><U><FONT size=2 face="serif">Item 1. Legal Proceedings </FONT></U></B>  </P>
<P align="justify">
<FONT size=2 face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None.</FONT></P>
<P align="justify">
<B><U><FONT size=2 face="serif">Item 1A. Risk Factors </FONT></U></B>  </P>
<P align="justify">
<FONT size=2 face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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></P>
<P align="justify">
<B><U><FONT size=2 face="serif">Item 2. Unregistered Sales of Equity Securities and Use of Proceeds</FONT></U></B><B><FONT size=2 face="serif">  </FONT></B></P>
<P align="justify">
<FONT size=2 face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None.</FONT></P>
<P align="justify">
<B><U><FONT size=2 face="serif">Item 3. Defaults upon Senior Securities</FONT></U></B><B><FONT size=2 face="serif">  </FONT></B></P>
<P align="justify">
<FONT size=2 face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None.</FONT></P>
<P align="justify">
<B><U><FONT size=2 face="serif">Item 4. Submissions of Matters to a Vote of Security Holders</FONT></U></B><B><FONT size=2 face="serif">  </FONT></B></P>
<P align="justify">
<FONT size=2 face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None.</FONT></P>
<P align="justify">
<B><U><FONT size=2 face="serif">Item 5. Other Information</FONT></U></B><B><FONT size=2 face="serif">  </FONT></B></P>
<P align="justify">
<FONT size=2 face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None.</FONT></P>
<P align="justify">
<B><U><FONT size=2 face="serif">Item 6. Exhibits</FONT></U></B><B><FONT size=2 face="serif">  </FONT></B></P>
<P align="justify">
<FONT size=2 face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Exhibits </FONT></P>
<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
  <TD nowrap valign=top>
<FONT size=2 face="serif">31.1</FONT>&nbsp; &nbsp; &nbsp;   </TD>
  <TD width=100%>
<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>&nbsp; &nbsp; &nbsp;   </TD>
  <TD width=100%>
<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>&nbsp; &nbsp; &nbsp;   </TD>
  <TD width=100%>
<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 align="center" width="100%" size=4>
<P align="left" style="page-break-before:always"></P>
<PAGE>

<P align="center">
<B><U><FONT size=2 face="serif">SIGNATURES</FONT></U></B><B><FONT size=2 face="serif"> </FONT></B></P>
<P align="justify">
&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 border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
  <TD align=left width=13% nowrap>
<FONT size=2 face="serif">Date:</FONT>&nbsp;
  </TD>
  <TD width=2%>&nbsp;
  </TD>
  <TD align=left width=84% nowrap>
<FONT size=2 face="serif">May 15, 2007</FONT>&nbsp;
  </TD>
</TR>
<TR>
  <TD colspan=3>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left width=13% nowrap>&nbsp;

  </TD>
  <TD width=2%>&nbsp;
  </TD>
  <TD align=left width=84% nowrap>
<B><FONT size=2 face="serif">ARK RESTAURANTS CORP.</FONT></B>&nbsp;
  </TD>
</TR>
<TR>
  <TD colspan=3>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left width=13% nowrap>
<FONT size=2 face="serif">By:</FONT>&nbsp;
  </TD>
  <TD width=2%>&nbsp;
  </TD>
  <TD align=left width=84% nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">/s/ Michael Weinstein</FONT>
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left width=13% nowrap>&nbsp;

  </TD>
  <TD width=2%>&nbsp;
  </TD>
  <TD align=left width=84% nowrap>
<FONT size=2 face="serif">Michael Weinstein</FONT>&nbsp;
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left width=13% nowrap>&nbsp;

  </TD>
  <TD width=2%>&nbsp;
  </TD>
  <TD align=left width=84% nowrap>
<FONT size=2 face="serif">Chairman, President &amp; Chief Executive Officer</FONT>&nbsp;
  </TD>
</TR>
<TR>
  <TD colspan=3>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left width=13% nowrap>
<FONT size=2 face="serif">By:</FONT>&nbsp;
  </TD>
  <TD width=2%>&nbsp;
  </TD>
  <TD align=left width=84% nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">/s/ Robert J. Stewart</FONT>
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left width=13% nowrap>&nbsp;

  </TD>
  <TD width=2%>&nbsp;
  </TD>
  <TD align=left width=84% nowrap>
<FONT size=2 face="serif">Robert Stewart</FONT>&nbsp;
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left width=13% nowrap>&nbsp;

  </TD>
  <TD width=2%>&nbsp;
  </TD>
  <TD align=left width=84% nowrap>
<FONT size=2 face="serif">Chief Financial Officer</FONT>&nbsp;
  </TD>
</TR>
</TABLE><BR>

<P align="center">
<FONT size=2 face="serif">- 15 - </FONT></P>
<HR noshade align="center" width="100%" size=4>


</BODY>

</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>2
<FILENAME>c48524_ex31-1.htm
<TEXT>

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

<BODY bgcolor="#ffffff">



<P align="right">
<B><FONT size=2 face="serif">EXHIBIT 31.1 </FONT></B><FONT size=2 face="serif"> </FONT></P>
<P align="center">
<B><FONT size=2 face="serif">CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO </FONT></B><FONT size=2 face="serif"> </FONT><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>
<P align="justify">&nbsp;</P>
<table width="100% "border="0">
  <tr>
    <td width="3%"><FONT size=2 face="serif">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></td>
    <td colspan="2"><FONT size=2 face="serif">I have reviewed
    this quarterly report on Form 10-Q of Ark Restaurants Corp. </FONT></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td width="3%">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><FONT size=2 face="serif">2.&nbsp;&nbsp;&nbsp;&nbsp;</FONT></td>
    <td colspan="2"><FONT size=2 face="serif">&nbsp;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></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td valign="top"><FONT size=2 face="serif">3. </FONT></td>
    <td colspan="2"><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></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td valign="top"><FONT size=2 face="serif">4. </FONT></td>
    <td colspan="2"><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></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td valign="top"><FONT size=2 face="serif">a) </FONT></td>
    <td><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></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td valign="top"><FONT size=2 face="serif">b) </FONT></td>
    <td><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></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td valign="top"><FONT size=2 face="serif">c) </FONT></td>
    <td><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></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td valign="top"><FONT size=2 face="serif">5. </FONT></td>
    <td colspan="2"><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></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td valign="top"><FONT size=2 face="serif">a) </FONT></td>
    <td><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></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td valign="top"><FONT size=2 face="serif">b)</FONT></td>
    <td><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></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
</table>

<P><FONT size=2 face="serif">Dated: May 15, 2007</FONT></P>

<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
<TR valign="bottom">
  <TD align=left width=100% nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">/s/ MICHAEL WEINSTEIN</FONT>&nbsp;
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left width=100% nowrap>
<B><FONT size=2 face="serif">Michael Weinstein</FONT></B>&nbsp;
  </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;
  </TD>
</TR>
</TABLE><BR>

<P align="center">
<FONT size=2 face="serif">- 16 - </FONT></P>
<HR noshade align="center" width="100%" size=4>


</BODY>

</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>3
<FILENAME>c48524_ex31-2.htm
<TEXT>

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

<BODY bgcolor="#ffffff">



<P align="right">
<B><FONT size=2 face="serif">EXHIBIT 31.2 </FONT></B><FONT size=2 face="serif"> </FONT></P>
<P align="center">
<B><FONT size=2 face="serif">CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO </FONT></B><FONT size=2 face="serif"> </FONT><B><FONT size=2 face="serif"><br>
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 </FONT></B><FONT size=2 face="serif">
</FONT></P>
<P align="left">
<FONT size=2 face="serif">I, Robert Stewart, Chief Financial Officer of Ark Restaurants Corp., certify that:</FONT></P>

<table width="100%" border="0">
  <tr>
    <td width="4%"><FONT size=2 face="serif">1.</FONT></td>
    <td colspan=2><FONT size=2 face="serif">I have reviewed this quarterly report on Form 10-Q  of Ark Restaurants Corp. </FONT></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td width="92%">&nbsp;</td>
  </tr>
  <tr>
    <td valign=top><FONT size=2 face="serif">2.</FONT></td>
    <td colspan=2><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></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td valign=top><FONT size=2 face="serif">3.</FONT></td>
    <td colspan=2><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>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td valign=top><FONT size=2 face="serif">4.</FONT></td>
    <td colspan=2><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></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td valign=top><FONT size=2 face="serif">a)</FONT></td>
    <td><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></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td valign=top><FONT size=2 face="serif">b)</FONT></td>
    <td><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></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td valign=top><FONT size=2 face="serif">c)</FONT></td>
    <td><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></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td valign=top><FONT size=2 face="serif">5.</FONT></td>
    <td colspan=2><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></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td valign=top><FONT size=2 face="serif">a)</FONT></td>
    <td><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></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td valign=top><FONT size=2 face="serif">b)</FONT></td>
    <td><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></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
</table>

<P align="left"><FONT size=2 face="serif">Dated: May 15, 2007</FONT></P>


<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
  <TD align=left width=100% nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">/s/ ROBERT STEWART</FONT>&nbsp;&nbsp;&nbsp;&nbsp;
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left width=100% nowrap>
<B><FONT size=2 face="serif">Robert Stewart</FONT></B>&nbsp;
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left width=100% nowrap>
<I><FONT size=2 face="serif">Chief Financial Officer</FONT></I>&nbsp;
  </TD>
</TR>
</TABLE><BR>

<P align="center">
<FONT size=2 face="serif">- 17 - </FONT></P>
<HR noshade align="center" width="100%" size=4>


</BODY>

</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>4
<FILENAME>c48524_ex32.htm
<TEXT>

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

<BODY bgcolor="#ffffff">



<P align="right">
<B><FONT size=2 face="serif">Exhibit 32</FONT></B><FONT size=2 face="serif"> </FONT></P>
<P align="center">
<B><FONT size=2 face="serif">Certificate of Chief Executive and Chief Financial Officers</FONT></B><FONT size=2 face="serif"> </FONT></P>
<P align="left">
<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="left">
<FONT size=2 face="serif">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="left">
<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>
<P align="left">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">(i) 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="left">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">(ii) 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>
<TABLE width=74% border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
  <TD align=left width=26% nowrap>
<FONT size=2 face="serif">Dated as of this 15th day of May 2007.</FONT>&nbsp;
  </TD>
  <TD width=32%>&nbsp;
  </TD>
  <TD align=left width=42% nowrap>&nbsp;

  </TD>
</TR>
<TR>
  <TD colspan=3>&nbsp;

  </TD>
</TR>
<TR>
  <TD colspan=3>&nbsp;

  </TD>
</TR>
<TR valign="bottom">
  <TD align=left width=26% nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">/s/ Michael Weinstein</FONT>&nbsp;
  </TD>
  <TD width=32%>&nbsp;
  </TD>
  <TD align=left width=42% nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">/s/ Robert Stewart</FONT>&nbsp;
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left width=26% nowrap>
<FONT size=2 face="serif">Michael Weinstein</FONT>
  </TD>
  <TD width=32%>&nbsp;
  </TD>
  <TD align=left width=42% nowrap>
<FONT size=2 face="serif">Robert Stewart</FONT>
  </TD>
</TR>
<TR valign="bottom">
  <TD align=left width=26% nowrap>
<FONT size=2 face="serif">Chairman, President and Chief Executive Officer</FONT>&nbsp;
  </TD>
  <TD width=32%>&nbsp;
  </TD>
  <TD align=left width=42% nowrap>
<FONT size=2 face="serif">Chief Financial Officer</FONT>&nbsp;
  </TD>
</TR>
</TABLE><BR>

<P align="center">
<FONT size=2 face="serif">- 18 - </FONT></P>
<HR noshade align="center" width="100%" size=4>


</BODY>

</HTML>

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
