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

Quarterly report pursuant to Section 13 or 15(d)

Variable Interest Entity

Variable Interest Entity

3 Months Ended

Apr. 02, 2016

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 a controlling financial interest in AAP through our contractual agreement with GE, which is material to AAP, and 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.

The following table summarizes the assets and liabilities of AAP as of April 2, 2016, and January 2, 2016:



	April 2, 2016		January 2, 2016
Assets
Current assets	$	1,289	$	696
Property and equipment, net	7,891		8,077
Other assets	83		83
Total Assets	$	9,263	$	8,856
Liabilities
Accounts payable (a)	$	1,831	$	1,872
Accrued expenses	1,199		399
Current maturities of long-term debt obligations	1,048		946
Long-term debt obligations, net of current maturities	3,390		3,439
Other liabilities (b)	712		759
Total Liabilities	$	8,180	$	7,415

(a) As of April 2, 2016, AAP has $299 in advances payable to 4301 included in accounts payable.

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

In April 2016, an officer of the Company loaned $75 to AAP, through the issuance of an 8% promissory note. The note is expected to be repaid with the collection of the carbon offset program revenues in May 2016.

The following table summarizes the operating results of AAP for the three months ended April 2, 2016, and April 4, 2015:



	Three Months Ended
	April 2, 2016			April 4, 2015
Revenues	$	1,715		$	1,850
Gross profit	152			6
Operating loss	(274		)	(516		)
Net loss	(358		)	(570		)