JanOne Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

3. Variable Interest Entity

3. Variable Interest Entity

12 Months Ended

Dec. 31, 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 of 50% of the total equity, subordinated debt and other forms of financial support. We have a controlling financial interest in AAP and have provided substantially all of the 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 December 31, 2016 and January 2, 2016:

	December 31, 2016		January 2, 2016
Assets
Current assets	$	438	$	696
Property and equipment, net		7,322		8,077
Other assets		83		142
Total assets	$	7,843	$	8,915
Liabilities
Accounts payable	$	1,388	$	2,342
Accrued expenses		523		399
Current maturities of long-term debt obligations		3,558		946
Long-term debt obligations, net of current maturities		435		3,498
Other liabilities (a)		1,126		289
Total liabilities	$	7,030	$	7,474

(a) Other liabilities represent outstanding loans from ARCA and are eliminated in consolidation.

The following table summarizes the operating results of AAP for fiscal years 2016 and 2015:

	For the fiscal years ended
	December 31, 2016			January 2, 2016
Revenues	$	6,697		$	6,838
Gross profit (loss)		1,305			(280	)
Operating loss		(363	)		(2,205	)