33 added · 15 removed between the two most recent 10-Ks. The risks a company starts — or stops — disclosing are often the story.
Newly disclosed
In addition, failure to adequately monitor and proactively respond to employee dissatisfaction could lead to poor customer satisfaction, higher turnover and litigation, which could negatively impact our financial results.
Effective November 15, 2024, the publication of BSBY was terminated and as of such date, the variable rate of interest under our debt instrument is equal to the lender’s 1 Month CME Term Secured Overnight Financing Rate (“SOFR”), plus 10 basis points, as an equivalent alternative approved by the lender. 20 As a means of managing our interest rate risk on this debt instrument, we entered into an interest rate swap agreement with an unrelated third-party lender to convert this variable rate debt obligation to a fixed rate.
We had previously determined that this interest rate swap agreement was an effective hedging agreement and we recorded changes in fair value to accumulated other comprehensive income each quarter from the fourth quarter of our fiscal year 2023 through the first quarter of our fiscal year 2025.
On November 22, 2024, we terminated the $8.90M Term Loan Swap and simultaneously entered into a new interest rate swap agreement for $8,015,601, the balance due on the $8.90M Loan, which requires us to pay interest for twelve (12) years, ten (10) months, which is the balance of the original fifteen (15) year period at a fixed rate of 4.90% on an initial amortizing notional principal amount of $8,015,601, while receiving interest for the same period at the lender’s 1 Month CME Term Secured Overnight Financing Rate (“SOFR”), plus 10 basis points, at the same amortizing notional principal amount.
We determined that the new interest rate swap agreement is an economic hedge and beginning in the second quarter of our fiscal year 2025, we recognize the changes in fair value on our interest rate swap in interest and other income on our consolidated statements of income.
During the second quarter of our fiscal year 2025, we recognized the $290,000 of non-cash gains, net of tax, related to the above interest rate swap agreement as interest and other income.
The $8.90M Term Loan Swap required us to pay interest for a fifteen (15) year period at a fixed rate of 4.90% on an initial amortizing notional principal amount of $8,900,000, while receiving interest for the same period at BSBY Screen Rate – 1 Month, plus 1.50%, on the same amortizing notional principal amount.
In September 2022, we refinanced the mortgage loan encumbering the property where our combination package liquor store and restaurant located at 4 N.
We entered into an interest rate swap agreement in September 2022 relating to the $8.90M Loan (the “$8.90M Term Loan Swap”).
We have experienced and may in the future experience challenges in hiring and retaining restaurant and store employees and in maintaining full restaurant staffing in various locations, which could result in decreased employee and customer satisfaction.
A shortage of qualified candidates who meet legal work authorization requirements, failure to hire, train and retain new employees in a timely manner or higher than expected turnover levels could affect our ability to open new restaurants, grow sales at existing restaurants or meet our labor cost objectives.
Anticipated changes in immigration laws and regulations could decrease the pool of candidates with legal work authorization, cause disruption in the workforce for all companies that rely on hourly workers and increase the costs, time and requirements to hire new employees.
No longer disclosed
Our business can be adversely affected by negative publicity resulting from, among other things, complaints or litigation alleging poor food quality, food-borne illness or other health concerns or operating issues stemming from one or a limited number of restaurants.
Subsequent Events for a discussion of general liability and excess liability insurance for the period commencing December 30, 2024.) Our general policy is to settle only those legitimate and reasonable claims asserted and to aggressively defend and go to trial, if necessary, on frivolous and unreasonable claims.
The Bloomberg Index Services Limited announced the permanent cessation of all tenors of BSBY, effective immediately following the last publication of BSBY on November 15, 2024.
Our reputation as a brand or as an employer could also be adversely affected from these types of security breaches or regulatory violations, which could impair our sales or ability to attract and keep qualified employees. 18 Local licensure, zoning and other regulation Each of our restaurants is also subject to state and local licensing and regulation by health, alcoholic beverage, sanitation, food and workplace safety and other agencies.
As of our fiscal year end 2024, we employed 1,990 persons, of which 669 were full-time and 1,321 were part-time.
We secured general liability insurance and excess liability insurance to be effective as of December 30, 2024.
We secured property insurance, including windstorm coverage, to be effective as of December 30, 2024.
As a means of managing our interest rate risk on the debt instrument, we entered into an interest rate swap agreement with our unrelated third party lender to convert this variable rate debt obligation to fixed rate.
Due to the competitive nature of the liquor industry in South Florida, we have had to adjust our pricing to stay competitive, including meeting all competitors’ advertisements subject to certain limitations.
As of that date, our lender has determined that a commercially reasonable and good faith alternative to BSBY is the 1 Month CME Term Secured Overnight Financing Rate (“SOFR”), plus 10 Basis Points.
Similar to the broader economy, we are experiencing labor shortfalls relative to our sales levels in certain parts of our workforce.
We also collect and donate school supplies annually. ● Reclaimed Wood – All of our locations use reclaimed wood on interior walls.