JanOne Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

5. Variable Interest Entity

5. Variable Interest Entity

6 Months Ended

Jul. 01, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

The financial position and results of operations of AAP are consolidated in our financial statements based on our conclusion that AAP is a variable interest entity due to our contribution in excess of 50% of the total equity, subordinated debt and other forms of financial support. We have provided substantial financial support to fund the operations of AAP since its inception. The financial position and results of operations for AAP are reported in our recycling segment. On August 15, 2017, we sold our 50% interest in AAP. See Note 14 – Subsequent Events to these condensed consolidated financial statements.

The following table summarizes the assets and liabilities of AAP as of July 1, 2017 and December 31, 2016:

	July 1, 2017		December 31, 2016
Assets
Current assets	$	293	$	438
Property and equipment, net		6,933		7,322
Other assets		93		83
Total assets	$	7,319	$	7,843

Liabilities
Accounts payable	$	2,569	$	1,388
Accrued expenses		585		523
Current maturities of long-term debt obligations		728		3,558
Long-term debt obligations, net of current maturities		3,166		435
Other liabilities (a)		289		1,126
Total liabilities	$	7,337	$	7,030

(a) Other liabilities represent loans and advances between ARCA and AAP that are eliminated in consolidation.

The following table summarizes the operating results of AAP for the 13 weeks and 26 weeks ended July 1, 2017, and July 2, 2016, respectively:

	13 Weeks Months Ended
	July 1, 2017			July 2, 2016
Revenues	$	642		$	1,695
Gross profit		100			319
Operating loss		(236	)		(93	)
Net loss		(299	)		(159	)

	26 Weeks Ended
	July 1, 2017			July 2, 2016
Revenues	$	1,127		$	3,480
Gross profit		(14	)		475
Operating loss		(708	)		(364	)
Net loss		(826	)		(514	)