UNITEDSTATES
SECURITIESAND EXCHANGE COMMISSION
Washington,D.C. 20549
FORM
(MarkOne)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Forthe quarterly period ended
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Forthe transition period from __________ to ___________
CommissionFile Number:
| (Exact name of Registrant as specified in its charter) |
| 5812 | ||||
(State or other jurisdiction of incorporation or organization) | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification Number) |
(Address,including zip code, and telephone number, including
areacode, of Registrant’s principal executive offices)
N/A
(Formername, former address and former fiscal year, if changed since last report)
Securitiesregistered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
The (Nasdaq Capital Market) |
Indicateby check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities ExchangeAct of 1934 during the preceding 12 months (or for such 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. ☒
Indicateby check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrantwas required to submit such files). ☒
Indicateby check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reportingcompany, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”“smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
Ifan emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complyingwith any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicateby check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes
Theregistrant had shares of class A common stock outstanding, and shares of class B common stock outstanding as of August17, 2025.
TABLEOF CONTENTS
| i |
SPECIALNOTE REGARDING FORWARD-LOOKING STATEMENTS
ThisQuarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, asamended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are based on our management’s beliefs and assumptionsand on information currently available to management, and which statements involve substantial risk and uncertainties. All statementscontained in this Quarterly Report on Form 10-Q other than statements of historical fact, including statements regarding our future operatingresults and financial position, our business strategy and plans, market growth and trends, and objectives for future operations suchas our ability to achieve in excess of 100% annual unit growth rate over the next threeto five years, our hope to generate future comparable restaurant sales growth,our plan to drive high profitability, and our intention to heighten brand awareness are forward-looking statements. Forward-lookingstatements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-lookingstatements because they contain words such as “may,” “will,” “should,” “expects,” “plans,”“anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,”“believes,” “estimates,” “predicts,” “potential,” or “continue” or the negativeof these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions.
Theserisks and uncertainties include, among other things, the risk that we may not be able to successfully implement our growth strategy ifwe are unable to identify appropriate sites for restaurant locations, expand in existing and new markets, obtain favorable lease terms,attract guests to our restaurants or hire and retain personnel; the risk that we may not be able to maintain or improve our comparablerestaurant sales growth; that the restaurant industry is a highly competitive industry with many competitors; that our limited numberof restaurants, the significant expense associated with opening new restaurants, and the unit volumes of our new restaurants makes ussusceptible to significant fluctuations in our results of operations; that we have incurred operating losses and may not be profitablein the future; the risk that our plans to maintain and increase liquidity may not be successful; that we depend on our senior managementteam and other key employees, and the loss of one or more key personnel or an inability to attract, hire, integrate and retain highlyskilled personnel could have an adverse effect on our business, financial condition or results of operations; that our operating resultsand growth strategies will be closely tied to the success of our future franchise partners and we will have limited control with respectto their operations; the risk that we may face negative publicity or damage to our reputation, which could arise from concerns regardingfood safety and foodborne illness or other matters; that minimum wage increases and mandated employee benefits could cause a significantincrease in our labor costs; that events or circumstances could cause the termination or limitation of our rights to certain intellectualproperty critical to our business that is licensed from Yoshiharu Holdings Co., or that we could face infringements on our intellectualproperty rights and be unable to protect our brand name, trademarks and other intellectual property rights; that challenging economicconditions may affect our business by adversely impacting numerous items that include, but are not limited to: consumer confidence anddiscretionary spending, the future cost and availability of credit and the operations of our third-party vendors and other service providers;the risk that we, or our point of sale and restaurant management platform partners, may fail to secure guests’ confidential, personallyidentifiable, debit card or credit card information or other private data relating to our employees or us; and the impact of the COVID-19pandemic, or a similar public health threat, on global capital and financial markets, general economic conditions in the United States,and our business and operations.
Youshould not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements containedin this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believemay affect our business, financial condition, results of operations, and prospects. The outcome of the events described in these forward-lookingstatements is subject to risks, uncertainties, and other factors described elsewhere in this Quarterly Report on Form 10-Q and in thesection titled “Risk Factors” in the Company’s recently filed registration statement on Form S-1 (File No. 333-262330).We undertake no obligation to update any forward-looking statements after the date of this Quarterly Report on Form 10-Q or to conformsuch statements to actual results or revised expectations, except as required by law.
| ii |
PARTI—FINANCIAL INFORMATION
Item1. Financial Statements.
YoshiharuGlobal Co.
UnauditedConsolidated Balance Sheets
| (Unaudited) | (Unaudited) | |||||||
| June 30, | December 31, | |||||||
| As of | 2025 | 2024 | ||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable | ||||||||
| Inventories | ||||||||
Loan receivable from related party | ||||||||
| Total current assets | ||||||||
| Non-Current Assets: | ||||||||
| Property and equipment, net | ||||||||
| Operating lease right-of-use asset, net | ||||||||
| Intangible asset | ||||||||
| Goodwill | ||||||||
| Investment | ||||||||
| Other assets | ||||||||
| Total non-current assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | |||||||
| Line of Credit | ||||||||
| Current portion of operating lease liabilities | ||||||||
| Current portion of bank notes payables | ||||||||
| Current portion of loan payable, EIDL | ||||||||
| Loans payable to financial institutions | ||||||||
| Due to related party | ||||||||
| Other payables | ||||||||
| Total current liabilities | ||||||||
| Operating lease liabilities, less current portion | ||||||||
| Bank notes payables, less current portion | ||||||||
| Loan payable, EIDL, less current portion | ||||||||
| Notes payable to related party | ||||||||
| Convertible notes to related party | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies | ||||||||
| Stockholders’ Equity | ||||||||
| Class A Common Stock - $ par value; authorized shares; and shares issued and outstanding at June 30, 2025, and December 31, 2024, respectively | ||||||||
| Class B Common Stock - $ par value; authorized shares; shares issued and outstanding at June 30, 2025, and at December 31, 2024 | ||||||||
| Additional paid-in-capital | ||||||||
| Warrant subscription receivable | ( | ) | ||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
Seeaccompanying notes to unaudited consolidated financial statements.
| 1 |
YoshiharuGlobal Co.
UnauditedConsolidated Statements of Operations
| (Unaudited) | (Unaudited) | |||||||||||||||
For the Six months ended | For the three months ended June 30 | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Revenue: | ||||||||||||||||
| Food and beverage | $ | $ | ||||||||||||||
| Total revenue | $ | |||||||||||||||
| Restaurant operating expenses: | ||||||||||||||||
| Food, beverages and supplies | ||||||||||||||||
| Labor | ||||||||||||||||
| Rent and utilities | ||||||||||||||||
| Delivery and service fees | ||||||||||||||||
| Depreciation | ||||||||||||||||
| Total restaurant operating expenses | ||||||||||||||||
| Net restaurant operating income (loss) | ( | ) | ( | ) | ||||||||||||
| Operating expenses: | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Related party compensation | ||||||||||||||||
| Advertising and marketing | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Other income | ||||||||||||||||
| Interest | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total other income | ( | ) | ( | ) | ||||||||||||
| Loss before income taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income tax provision | ||||||||||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Loss per share: | ||||||||||||||||
| Basic and diluted | ) | $ | ) | ) | ) | |||||||||||
| Weighted average number of common shares outstanding: | ||||||||||||||||
| Basic and diluted | ||||||||||||||||
Seeaccompanying notes to unaudited consolidated financial statements.
| 2 |
YoshiharuGlobal Co.
UnauditedConsolidated Statements of Stockholders’ Equity (Deficit)
| Class A Shares | Class B Shares | Additional Paid-In | Warrant subscription | Accumulated | Total Stockholders’ | |||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Receivable | Deficit | Equity | |||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | $ | ( | ) | $ | | ||||||||||||||||||||||||
| Issuance of Class A Common Stock | - | |||||||||||||||||||||||||||||||
| Issuance of warrants | - | - | ( | ) | ||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance at March 31, 2025 (unaudited) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Issuance of Class A Common Stock | - | |||||||||||||||||||||||||||||||
| Net Loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance at June 30, 2025 (unaudited) | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||
| Class A Shares | Class B Shares | Additional Paid-In | Accumulated | Total Stockholders’ | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||||||||
| Balance at December 31, 2023 | $ | $ | $ | $ | ( | ) | $ | | ||||||||||||||||||||
| Issuance of Class A Common Stock | - | |||||||||||||||||||||||||||
| Not loss | - | |||||||||||||||||||||||||||
| Balance at March 31, 2024 (unaudited) | ( | ) | ||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance at June 30, 2024 (unaudited) | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
Seeaccompanying notes to unaudited consolidated financial statements.
| 3 |
YoshiharuGlobal Co.
UnauditedConsolidated Statements of Cash Flows
| (Unaudited) | ||||||||
| For the Six months ended June 30 | ||||||||
| 2025 | 2024 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation | ||||||||
| Amortization | ||||||||
| Gain on disposal of fixed asset | ( | ) | ||||||
| Changes in assets and liabilities: | ||||||||
| Accounts Receivable | ( | ) | ( | ) | ||||
| Inventories | ( | ) | ( | ) | ||||
| Other assets | ||||||||
| Accounts payable and accrued expenses | ||||||||
| Due to related party | ||||||||
| Other payables | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ||||||
| Cash flows from investing activities: | ||||||||
| Purchases of property and equipment | ( | ) | ( | ) | ||||
| Loan provided under loan receivable from related party | ( | ) | ||||||
| Amounts provided on investments | ( | ) | ||||||
| Acquisition of LV entities | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from borrowings | ||||||||
| Proceeds from borrowings from acquisition of LV entities | ||||||||
| Repayments on bank notes payables | ( | ) | ( | ) | ||||
| Repayments on EIDL loan payable | ( | ) | ||||||
| Repayments of convertible note | ( | ) | ||||||
| Repayment of loan payable to financial institutions | ( | ) | ( | ) | ||||
| Proceeds from sale of common shares and warrants | ||||||||
| Net cash provided by financing activities | ||||||||
| Net (decrease) increase in cash | ( | ) | ||||||
| Cash – beginning of period | ||||||||
| Cash – end of period | $ | |||||||
| Supplemental disclosures of non-cash financing activities: | ||||||||
| Note Payable to related party | $ | $ | ||||||
| Convertible notes to related party | $ | $ | ||||||
| Conversion of due to related party to common stock | $ | $ | ||||||
| Supplemental disclosures of cash flow information | ||||||||
| Cash paid during the periods for: | ||||||||
| Interest | $ | $ | ||||||
| Income taxes | $ | $ | ||||||
Seeaccompanying notes to unaudited consolidated financial statements.
| 4 |
YOSHIHARUGLOBAL CO.
NOTESTO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1.NATURE OF OPERATIONS
YoshiharuGlobal Co. (“Yoshiharu”) was incorporated in the State of Delaware on December 9, 2021. Yoshiharu has the following whollyowned subsidiaries:
| Name | Date of Formation | Description of Business | ||
TheCompany owns several restaurants specializing in Japanese ramen and other Japanese cuisines. The Company offers a variety of Japaneseramens, rice bowls, and appetizers. Unless otherwise stated or the context otherwise requires, the terms “Yoshiharu” “we,”“us,” “our” and the “Company” refer collectively to Yoshiharu and, where appropriate, its subsidiaries.
Priorto September 30, 2021, the Yoshiharu business (the “Business”) consisted of the first seven separate entities listed above(collectively, the “Entities”), each wholly owned by James Chae (“Mr. Chae”), and each holding one (1) store,except for JJ, which held two stores and the Business’s intellectual property (the “IP”). Effective October 2021, JJtransferred the IP to Mr. Chae. Effective October 2021, Mr. Chae contributed
OnDecember 9, 2021, Yoshiharu completed a share exchange agreement whereby Mr. Chae, the sole stockholder of Holdings, received shares of Yoshiharu, representing
OnNovember 22, 2023, the Company filed a Certificate of Amendment (the “Certificate of Amendment”) to the Company’s Amendedand Restated Certificate of Incorporation to effect a reverse stock split of its issued Class A common stock and Class B common stocktogether with the Class A common stock, “Common Stock”), in the ratio of
Nofractional shares were issued as a result of the Reverse Stock Split. Instead, any fractional shares that would have resulted from theReverse Stock Split were rounded up to the next whole number. As a result, total of shares of Class A common stock were issuedand total of shares of Class A common stock were outstanding as of December 31, 2023. The Reverse Stock Split affected allstockholders uniformly and did not alter any stockholder’s percentage interest in the Company’s outstanding Common Stock,except for adjustments that may result from the treatment of fractional shares. The number of authorized shares of Common Stock of theCompany and number of authorized, issued, and outstanding shares of the preferred stock of the Company were not changed.
| 5 |
NOTESTO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basisof Presentation and Consolidation
Theaccompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles(“GAAP”) as promulgated in the United States of America. The consolidated financial statements include Yoshiharu and itswholly owned subsidiaries instead in Note 1 above as of June 30, 2025 and December 31, 2024 and for the three and six months endedJune 30, 2025 and 2024. All intercompany accounts, transactions, and profits have been eliminated upon consolidation.
ReverseStock Split
OnJuly 18, 2025, the Company’s Board of Directors approved and announced a
YLVAcquisition
OnJune 12, 2024, the Company consummated the acquisition of assets of three restaurant entities (Jjanga, HJH, and Aku) for an aggregate$
Useof Estimates and Assumptions
Thepreparation of consolidated financial statements in conformity with GAAP requires the Company to make estimates and assumptions thataffect the amounts reported in our consolidated financial statements and the accompanying notes. Such estimates include accounts receivables,accrued liabilities, income taxes, long-lived assets, and deferred tax valuation allowances. These estimates generally involve complexissues and require management to make judgments, involve analysis of historical and future trends that can require extended periods oftime to resolve, and are subject to change from period to period. In all cases, actual results could differ materially from estimates.
Marketing
Marketingcosts are charged to expense as incurred. Marketing costs were approximately $
DeliveryFees Charged by Delivery Service Providers
TheCompany’s customers may order online through third party service providers such as Uber Eats, Door Dash, and others. These third-partyservice providers charge delivery and order fees to the Company. Such fees are expensed when incurred. Delivery fees are included indelivery and service fees in the accompanying consolidated statements of operations.
RevenueRecognition
TheCompany recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. The Company’s net revenue primarilyconsists of revenues from food and beverage sales. Revenues from the sale of food items by Company-owned restaurants are recognized asCompany sales when a customer receives the food that they purchased, which is when our obligation to perform is satisfied. The timingand amount of revenue recognized related to Company sales was not impacted by the adoption of ASC 606.
| 6 |
NOTESTO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Inventories
Inventories,which are stated at the lower of cost or net realizable value, consist primarily of perishable food items and supplies. Cost is determinedusing the first-in, first out method.
SegmentReporting
ASC280, Segment Reporting, requires public companies to report financial and descriptive information about their reportable operating segments.The Company identifies its operating segments based on how executive decision makers internally evaluates separate financial information,business activities and management responsibility. Accordingly, the Company has
Propertyand Equipment
Propertyand equipment are stated at cost less accumulated depreciation and amortization. Major improvements are capitalized, and minor replacements,maintenance and repairs are charged to expense as incurred. Depreciation and amortization are calculated on the straight-line basis overthe estimated useful lives of the assets. Leasehold improvements are amortized over the shorter of the estimated useful life or the leaseterm of the related asset. The estimated useful lives are as follows:
| Furniture and equipment | ||
| Leasehold improvements | ||
| Vehicle |
Goodwilland Intangible Assets
Goodwilland certain intangible assets were recorded in connection with the YLV asset acquisition in April 2024, and were accounted for in accordancewith ASC 805, “Business Combinations.” Goodwill represents the excess of the purchase price over the fair value of the tangibleand intangible net assets acquired. Intangible assets are recorded at their fair value at the date of acquisition. Goodwill and otherintangible assets are accounted for in accordance with ASC 350, “Goodwill and Other Intangible Assets.” Goodwill and otherintangible assets are tested for impairment at least annually and any related impairment losses are recognized in earnings when identified.
IncomeTaxes
Theaccounting standard on accounting for uncertainty in income taxes addresses the determination of whether tax benefits claimed or expectedto be claimed on a tax return should be recorded in the financial statements. Under that guidance, the Company may recognize the taxbenefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxingauthorities based on the technical merits of the position. The tax benefits recognized in the financial statements from such a positionare measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The Companyhad
Impairmentof Long-Lived Assets
Whencircumstances, such as adverse market conditions, indicate that the carrying value of a long-lived asset may be impaired, the Companyperforms an analysis to review the recoverability of the asset’s carrying value, which includes estimating the undiscounted cashflows (excluding interest charges) from the expected future operations of the asset. These estimates consider factors such as expectedfuture operating income, operating trends and prospects, as well as the effects of demand, competition and other factors. If the analysisindicates that the carrying value is not recoverable from future cash flows, an impairment loss is recognized to the extent that thecarrying value exceeds the estimated fair value. Any impairment losses are recorded as operating expenses, which reduce net income.
| 7 |
NOTESTO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
FairValue of Financial Instruments
TheCompany utilizes ASC 820-10, Fair Value Measurement and Disclosure, for valuing financial assets and liabilities measured on a recurringbasis. Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liabilityin an orderly transaction between market participants as of the measurement date. The guidance also establishes a hierarchy for inputsused in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring thatthe most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset orliability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs thatreflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability. The guidanceestablishes three levels of inputs that may be used to measure fair value:
Level1. Observable inputs such as quoted prices in active markets;
Level2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
Level3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
TheCompany’s financial instruments consisted of cash, operating lease right-of-use assets, net, accounts payable and accrued expenses,notes payables, and operating lease liabilities. The estimated fair value of cash, operating lease right-of-use assets, net, and notespayables approximate its carrying amount due to the short maturity of these instruments.
Leases
Inaccordance with ASC 842, Leases, the Company determines whether an arrangement contains a lease at inception. A lease is a contract thatprovides the right to control an identified asset for a period of time in exchange for consideration. For identified leases, the Companydetermines whether it should be classified as an operating or finance lease. Operating leases are recorded in the balance sheet as: right-of-useasset (“ROU asset”) and operating lease liability. An ROU asset represents the Company’s right to use an underlyingasset for the lease term and an operating lease liability represents the Company’s obligation to make lease payments arising fromthe lease. ROU assets and operating lease liabilities are recognized at the commencement date of the lease and measured based on thepresent value of lease payments over the lease term. The ROU asset also includes deferred rent liabilities. The Company’s leasearrangements generally do not provide an implicit interest rate. As a result, in such situations the Company uses its incremental borrowingrate based on the information available at commencement date in determining the present value of lease payments. The Company includesoptions to extend or terminate the lease when it is reasonably certain that it will exercise that option in the measurement of its ROUasset and operating lease liability. Lease expense for the operating lease is recognized on a straight-line basis over the lease term.The Company has a lease agreement with lease and non-lease components, which are accounted for as a single lease component.
RecentAccounting Pronouncements
TheCompany has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption ofany such pronouncements may be expected to cause a material impact on our financial statements.
| 8 |
NOTESTO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
3.ACQUISITION UNDER ASSET PURCHASE
OnJune 12, 2024, the Company consummated the closing of the transactions contemplated by an Asset Purchase Agreement (“APA”)with Mr. Jihyuck Hwang (“Seller”)(see Note 9 Related Party Transactions) via the Company’s wholly owned subsidiary,Yoshiharu Las Vegas (“YLV”). The APA provided for the purchase of specific assets of the three restaurant businesses, includinginventory, security deposits, fixed assets and lease assignment effective as of April 20, 2024. The Company considered the guidance inASC 805, Business Combinations, and determined the transaction was an asset acquisition. The threerestaurants consist of one Japanese ramen restaurant, and two Izakaya style restaurants offering sushi & steak along with Japaneseramen.
Thecondensed consolidated financial statements include the results of the YLV from the date of acquisition. The purchase price has beenallocated based on estimated fair values as of the acquisition date. The purchase price was allocated as follows:
| Preliminary Purchase Price | April 20, 2024 | |||
| Cash | $ | |||
| Promissory note to Seller | ||||
| Bank notes payables | ||||
| Convertible note to Seller | ||||
| Total purchase price | $ | |||
| Preliminary Purchase Price Allocation | ||||
| Fixed assets | $ | |||
| Inventory and other assets | ||||
| Operating lease right-of-use asset, net | ||||
| Goodwill | ||||
| Intangible assets | ||||
| Operating lease liabilities | ( | ) | ||
| Acquired assets, net | $ | |||
Thepurchase price allocation has been prepared on a preliminary basis based on the information that was available to the Company at thetime the condensed consolidated financial statements were prepared, and revisions to the preliminary purchase price allocation may resultas additional information becomes available.
Indetermining the purchase price allocation, management considered, among other factors, the Company’s intention to use the acquiredassets. The intangible assets are being amortized based upon the pattern in which the economic benefits of the intangible assets arebeing utilized, with no expected residual value.
OnMarch 6, 2025, the Company borrowed $
4.LOAN RECEIVABLE FROM RELATED PARTY
OnApril 2, 2025, the Company provided a loan to GKFB Corp, a related party, in the amount of $
5.INVESTMENT
OnApril 25, 2025, the Company entered into an investment agreement with Wealthrail, Inc. for an amount of $
Underthe terms of the agreement, the Company’s return on investment is based on the net proceeds realized from the resale of the subjectproperty. Net proceeds are determined as the gross resale price of the property, reduced by the initial purchase cost, construction andrenovation costs, agent commissions, property taxes, and other directly attributable costs of the project. The resulting net profit,if any, shall be distributed equally between Wealthrail and the Company on a 50:50 basis.
Asof June 30, 2025,
6.INTANGIBLE ASSETS
Intangibleassets consisted of the following:
| Life | Average Remaining Life | June 30, 2025 | December 31, 2024 | |||||||||
| Brand & non-compete | $ | $ | ||||||||||
| Less – accumulated amortization | ( | ) | ( | ) | ||||||||
| Total intangible assets, net | $ | $ | ||||||||||
| 9 |
NOTESTO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
6.INTANGIBLE ASSETS (Continued)
Estimatedfuture amortization of intangible assets is as follows:
| Years ending December 31, | Amount | |||
| 2025 for six months remaining | $ | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Thereafter | ||||
| Total | $ | |||
Amortizationexpense on intangible assets amounted to $
7.PROPERTY AND EQUIPMENT
Propertyand equipment consisted of the following:
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Leasehold Improvement | $ | $ | ||||||
| Furniture and equipment | ||||||||
| Vehicle | ||||||||
| Total property and equipment | ||||||||
| Accumulated depreciation | ( | ) | ( | ) | ||||
| Total property and equipment, net | $ | $ | ||||||
Totaldepreciation was $
8.OTHER ASSETS
Otherassets consisted of the following:
| June 30 | December 31, | |||||||
| 2025 | 2024 | |||||||
| Security deposits | $ | $ | ||||||
| Tenant improvement receivable | ||||||||
| Loan to Won Zo Whittier | ||||||||
| Others | ||||||||
| Total other assets | $ | $ | ||||||
9.LINE OF CREDIT
TheCompany has a $
| 10 |
NOTESTO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
10.BANK NOTES PAYABLES
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| November 27, 2018 ($ | $ | $ | ||||||
| September 14, 2021 ($ | ||||||||
| April 22, 2022 ($ | ||||||||
| May 22, 2023 ($ | ||||||||
| May 22, 2023 ($ | ||||||||
| May 22, 2023 ($ | ||||||||
| September 13, 2023 ($ | ||||||||
| September 13, 2023 ($ | ||||||||
| March 22, 2024 ($ | ||||||||
| March 22, 2024 ($ | ||||||||
| December 20, 2024 ($ | ||||||||
| January 30, 2024 ($ | ||||||||
| June 4, 2024 ($ | ||||||||
| Total bank notes payables | ||||||||
| Less - current portion | ( | ) | ( | ) | ||||
| Total bank notes payables, less current portion | $ | $ | ||||||
Thefollowing table provides future minimum payments as of June 30, 2025:
| For the years ended | Amount | |||
| 2025 (remaining six months) | $ | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Thereafter | ||||
| Total | $ | |||
November27, 2018 – $780,000 – Global JJ Group, Inc.
OnNovember 27, 2018, Global JJ Group, Inc. (the “JJ”) executed the standard loan documents required for securing a loan of$
Pursuantto that certain Loan Authorization and Agreement, interest accrues at a variable rate that is subject to change from time to time basedon changes in an independent index which is the Prime Rate as published in the Wall Street Journal per annum and will accrue only onfunds actually advanced from the date of each advance. The loan requires a payment of $
| 11 |
NOTESTO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
10.BANK NOTES PAYABLES (Continued)
September14, 2021 – $197,000 – Global CC Group, Inc.
OnSeptember 14, 2021, the CC executed the standard loan documents required for securing a loan of $
Pursuantto that certain Loan Authorization and Agreement, interest accrues at a variable rate that is subject to change from time to time basedon changes in an independent index which is the Prime Rate as published in the Wall Street Journal per annum and will accrue only onfunds actually advanced from the date of each advance. The loan requires a payment of $
April22, 2022– $195,000 – Yoshiharu Cerritos.
OnApril 22, 2022, Yoshiharu Cerritos (the “YC”) executed loan documents for an SBA loan of $
OnMarch 11, 2025, the Company completed the sale of its Cerritos store. In connection with the closing, the Company used sale proceedsto repay the entire outstanding loan balance. As a result,
May22, 2023– $138,000 – Global BB Group, Inc.
OnMay 22, 2023, Global BB Group, Inc. (the “BB”) executed the standard loan documents required for securing a loan of $
Pursuantto that certain Loan Authorization and Agreement, interest accrues at a variable rate that is subject to change from time to time basedon changes in an independent index which is the Prime Rate as published in the Wall Street Journal per annum and will accrue only onfunds actually advanced from the date of each advance. The loan requires a payment of $
May22, 2023– $196,000 – Global CC Group, Inc.
OnMay 22, 2023, Global CC Group, Inc. (the “CC”) executed the standard loan documents required for securing a loan of $
Pursuantto that certain Loan Authorization and Agreement, interest accrues at a variable rate that is subject to change from time to time basedon changes in an independent index which is the Prime Rate as published in the Wall Street Journal per annum and will accrue only onfunds actually advanced from the date of each advance. The loan requires a payment of $
May22, 2023– $178,000 – Global DD Group, Inc.
OnMay 22, 2023, Global DD Group, Inc. (the “DD”) executed the standard loan documents required for securing a loan of $
Pursuantto that certain Loan Authorization and Agreement, interest accrues at a variable rate that is subject to change from time to time basedon changes in an independent index which is the Prime Rate as published in the Wall Street Journal per annum and will accrue only onfunds actually advanced from the date of each advance. The loan requires a payment of $
| 12 |
NOTESTO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
10.BANK NOTES PAYABLES (Continued)
September13, 2023– $150,000 – Yoshiharu Garden Grove
OnSeptember 13, 2023, Yoshiharu Garden Grove (the “YG”) executed the standard loan documents required for securing a loan of$
Pursuantto that certain Loan Authorization and Agreement, interest accrues at a variable rate that is subject to change from time to time basedon changes in an independent index which is the Prime Rate as published in the Wall Street Journal per annum and will accrue only onfunds actually advanced from the date of each advance. The loan requires a payment of $
September13, 2023– $150,000 – Yoshiharu Laguna
OnSeptember 13, 2023, Yoshiharu Laguna (the “YL”) executed the standard loan documents required for securing a loan of $
Pursuantto that certain Loan Authorization and Agreement, interest accrues at a variable rate that is subject to change from time to time basedon changes in an independent index which is the Prime Rate as published in the Wall Street Journal per annum and will accrue only onfunds actually advanced from the date of each advance. The loan requires a payment of $
March22, 2024– $150,000 – Yoshiharu Menifee
OnMarch,22, 2024, Yoshiharu Menifee (the “YM”) executed the standard loan documents required for securing a loan of $
Pursuantto that certain Loan Authorization and Agreement, interest accrues at a variable rate that is subject to change from time to time basedon changes in an independent index which is the Prime Rate as published in the Wall Street Journal per annum and will accrue only onfunds actually advanced from the date of each advance. The loan requires a payment of $
March22, 2024– $150,000 – Yoshiharu San Clemente
OnMarch,22, 2024, Yoshiharu San Clemente (the “YCT”) executed the standard loan documents required for securing a loan of $
Pursuantto that certain Loan Authorization and Agreement, interest accrues at a variable rate that is subject to change from time to time basedon changes in an independent index which is the Prime Rate as published in the Wall Street Journal per annum and will accrue only onfunds actually advanced from the date of each advance. The loan requires a payment of $
December20, 2024– $250,000 – Yoshiharu Ontario
OnDecember,20, 2024, Yoshiharu Ontario (the “YO”) executed the standard loan documents required for securing a loan of $
Pursuantto that certain Loan Authorization and Agreement, interest accrues at a variable rate that is subject to change from time to time basedon changes in an independent index which is the Prime Rate as published in the Wall Street Journal per annum and will accrue only onfunds actually advanced from the date of each advance. The loan requires a payment of $
January30, 2024– $650,000 – Yoshiharu
OnJanuary 30, 2024, Yoshiharu Global Co. (the “Yoshiharu”) executed the standard loan documents required for securing a loanof $
Pursuantto that certain Loan Authorization and Agreement, interest accrues at a variable rate that is subject to change from time to time basedon changes in an independent index which is the Prime Rate as published in the Wall Street Journal per annum and will accrue only onfunds actually advanced from the date of each advance. The loan requires a payment of $
June4, 2024– $900,000 – Yoshiharu Las Vegas
OnJune 4, 2024, Yoshiharu Las Vegas (the “YLV”) executed the standard loan documents required for securing a loan of $
Pursuantto that certain Loan Authorization and Agreement, interest accrues at a variable rate that is subject to change from time to time basedon changes in an independent index which is the Prime Rate as published in the Wall Street Journal per annum and will accrue only onfunds actually advanced from the date of each advance. The loan requires a payment of $
| 13 |
NOTESTO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
11.LOAN PAYABLES, EIDL
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| June 13, 2020 ($ | $ | $ | ||||||
| June 13, 2020 ($ | ||||||||
| July 15, 2020 ($ | ||||||||
| Total loans payables, EIDL | ||||||||
| Less - current portion | ( | ) | ( | ) | ||||
| Total loans payables, EIDL, less current portion | $ | $ | ||||||
Thefollowing table provides future minimum payments as of June 30, 2025:
| For the years ended | Amount | |||
| 2025 (remaining nine months) | $ | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Thereafter | ||||
| Total | $ | |||
June13, 2020 – $150,000 – Global AA Group, Inc.
OnJune 13, 2020, Global AA Group, Inc. (the “AA”) executed the standard loan documents required for securing a loan (the “EIDLLoan”) from the SBA under its Economic Injury Disaster Loan (“EIDL”) assistance program in light of the impact of theCOVID-19 pandemic on the AA’s business.
Pursuantto that certain Loan Authorization and Agreement, the AA borrowed an aggregate principal amount of the AA EIDL Loan of $
Inconnection therewith, the AA executed (i) a loan for the benefit of the SBA, which contains customary events of default and (ii) a securityagreement, granting the SBA a security interest in all tangible and intangible personal property of the AA, which also contains customaryevents of default.
June13, 2020 – $150,000 – Global BB Group, Inc.
OnJune 13, 2020, Global BB Group, Inc. (the “BB”) executed the standard loan documents required for securing an EIDL loan (the“BB EIDL Loan”) from the SBA in light of the impact of the COVID-19 pandemic on the BB’s business.
| 14 |
NOTESTO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
11.LOAN PAYABLES, EIDL (Continued)
Pursuantto that certain Loan Authorization and Agreement, the BB borrowed an aggregate principal amount of the BB EIDL Loan of $
Inconnection therewith, the BB executed (i) a loan for the benefit of the SBA, which contains customary events of default and (ii) a securityagreement, granting the SBA a security interest in all tangible and intangible personal property of the BB, which also contains customaryevents of default.
July15, 2020 – $150,000 – Global JJ Group, Inc.
OnJuly 15, 2020, Global JJ Group, Inc. (the “JJ”) executed the standard loan documents required for securing an EIDL loan (the“JJ EIDL Loan”) from the SBA in light of the impact of the COVID-19 pandemic on the JJ’s business.
Pursuantto that certain Loan Authorization and Agreement, the JJ borrowed an aggregate principal amount of the JJ EIDL Loan of $
| 15 |
NOTESTO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
12.LOANS PAYABLE TO FINANCIAL INSTITUTIONS
Loanspayable to financial institutions consist of the following:
| June 30, 2025 | December 31, 2024 | |||||||
| November 21, 2023 ($ | $ | $ | ||||||
13.CONVERTIBLE NOTE TO RELATED PARTY
OnJune 12, 2024, the Company issued convertible note to a related party. The convertible note, maturing one year from closing, accrues
14.RELATED PARTY TRANSACTIONS
TheCompany had the following related party transactions:
| ● | Due to related party – From time to time, the Company loaned money to APIIS Financial Group, a company owned by James Chae, who is also the majority stockholder and CEO of the Company. The balance is non-interest bearing and due on demand. As of June 30, 2025 and December 31, 2024, the balance was $ | |
| ● | Related party compensation - For the three months ended June 30, 2025 and 2024, the compensation to James Chae was $ | |
| ● | Notes payable and Convertible notes to related party –. On June 12, 2024, the Company consummated the acquisition of certain assets in three Las Vegas restaurants from Mr. Jihyuck Hwang. Total acquisition cost was $ | |
| Interest expense was $ |
| 16 |
NOTESTO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
15.INCOME TAX
Totalincome tax (benefit) expense consists of the following:
| For the Six Months Ended June 30, | 2025 | 2024 | ||||||
| Current provision (benefit): | ||||||||
| Federal | $ | $ | ||||||
| State | ||||||||
| Total current provision (benefit) | ||||||||
| Deferred provision (benefit): | ||||||||
| Federal | ||||||||
| State | ||||||||
| Total deferred provision (benefit) | ||||||||
| Total tax provision (benefit) | $ | $ | ||||||
Areconciliation of the Company’s effective tax rate to the statutory federal rate is as follows:
| June 30, | 2025 | 2024 | ||||||
| Statutory federal rate | % | % | ||||||
| State income taxes net of federal income tax benefit and others | % | % | ||||||
| Permanent differences for tax purposes and others | % | % | ||||||
| Change in valuation allowance | - | % | - | % | ||||
| Effective tax rate | % | % | ||||||
| 17 |
NOTESTO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
15.INCOME TAX (Continued)
Theincome tax benefit differs from the amount computed by applying the U.S. federal statutory tax rate of
| June 30, 2025 | December 31, 2024 | |||||||
| Deferred tax assets: | ||||||||
| Net operating loss | $ | $ | ||||||
| Other temporary differences | ||||||||
| Total deferred tax assets | ||||||||
| Less – valuation allowance | ( | ) | ( | ) | ||||
| Total deferred tax assets, net of valuation allowance | $ | $ | ||||||
Deferredincome taxes reflect the temporary differences between the carrying amounts of assets and liabilities for financial reporting purposesand the amounts used for income tax purposes. The components of deferred tax assets and liabilities are as follows:
Asof December 31, 2024, the Company had available net operating loss carryovers of approximately $
TheCompany files income tax returns in the U.S. federal jurisdiction and California and is subject to income tax examinations by federaltax authorities for tax year ended 2019 and later and subject to California authorities for tax year ended 2018 and later. The Companycurrently is not under examination by any tax authority. The Company’s policy is to record interest and penalties on uncertaintax positions as income tax expense. As of June 30, 2025 and December 31, 2024, the Company has
Asof June 30, 2025, the Company had cumulative net operating loss carryforwards for federal tax purposes of approximately $
16.COMMITMENTS AND CONTINGENCIES
Commitments
Operatinglease right-of-use (“ROU”) assets and liabilities are recognized at commencement date based on the present value of leasepayments over the lease term. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities representour obligation to make lease payments arising from the lease. Generally, the implicit rate of interest in arrangements is not readilydeterminable and the Company utilizes its incremental borrowing rate in determining the present value of lease payments. The Company’sincremental borrowing rate is a hypothetical rate based on its understanding of what its credit rating would be. The operating leaseROU asset includes any lease payments made and excludes lease incentives. Our variable lease payments primarily consist of maintenanceand other operating expenses from our real estate leases. Variable lease payments are excluded from the ROU assets and lease liabilitiesand are recognized in the period in which the obligation for those payments is incurred. Our lease terms may include options to extendor terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for minimum lease payments is recognizedon a straight-line basis over the lease term.
TheCompany has lease agreements with lease and non-lease components. The Company has elected to account for these lease and non-lease componentsas a single lease component.
| 18 |
NOTESTO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
16.COMMITMENTS AND CONTINGENCIES (Continued)
Inaccordance with ASC 842, the components of lease expense were as follows:
| June 30, | ||||||||
| For the Six months ended | 2025 | 2024 | ||||||
| Operating lease expense | $ | $ | ||||||
| Total lease expense | $ | $ | ||||||
Inaccordance with ASC 842, other information related to leases was as follows:
| For the Six months ended | 2025 | 2024 | ||||||
| Operating cash flows from operating leases | $ | $ | ||||||
| Cash paid for amounts included in the measurement of lease liabilities | $ | $ | ||||||
| Weighted-average remaining lease term—operating leases | ||||||||
| Weighted-average discount rate—operating leases | % | |||||||
| Operating | ||||
| Year ending: | Lease | |||
| 2025 (remaining six months) | $ | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Thereafter | ||||
| Total undiscounted cash flows | $ | |||
| Reconciliation of lease liabilities: | ||||
| Weighted-average remaining lease terms | ||||
| Weighted-average discount rate | % | |||
| Present values | $ | |||
| Lease liabilities—current | ||||
| Lease liabilities—long-term | ||||
| Lease liabilities—total | $ | |||
| Difference between undiscounted and discounted cash flows | $ | |||
| 19 |
NOTESTO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
17.STOCKHOLDERS’ EQUITY
ClassA Common Stock
TheCompany has authorization to issue and have outstanding at any one time shares of class A common stock with a par value of$ per share.
SeeNote 1 and Note 8 above for details regarding the issuance and redemption of shares of the Company’s class A common stock to andfrom James Chae, the Company’s majority stockholder, in December 2021.
InDecember 2021, the Company received subscriptions for the sale of shares of class A common stock to investors for $ per share,for total expected proceeds of $
InSeptember 2022, the Company consummated its initial public offering (the “IPO”) of shares of its class A commonstock at a public offering price of $ per share, generating gross proceeds of $
Immediatelyprior to the IPO, the Company issued shares of class A common stock as compensation to directors and consultants. The Companyhas accrued approximately $
TheCompany also granted the underwriters a 45-day option to purchase up to additional shares (equal to
OnNovember 22, 2023, the Company filed the Certificate of Amendment to the Company’s Amended and Restated Certificate of Incorporationto effect the Reverse Stock Split of its issued Common Stock in the ratio of
Nofractional shares were issued as a result of the Reverse Stock Split. Instead, any fractional shares that would have resulted from theReverse Stock Split were rounded up to the next whole number. As a result, a total of shares of Class A common stock were issuedand total of shares of Class A common stock were outstanding as of December 31, 2023. The Reverse Stock Split affected allstockholders uniformly and did not alter any stockholder’s percentage interest in the Company’s outstanding Common Stock,except for adjustments that may result from the treatment of fractional shares. The number of authorized shares of Common Stock of theCompany and number of authorized, issued, and outstanding shares of the preferred stock of the Company were not changed.
| 20 |
NOTESTO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
17.STOCKHOLDERS’ EQUITY (Continued)
OnJanuary 9, 2024, Yoshiharu Global Co. issued shares of Class A Common Stock as commitment shares pursuant to this agreement.
OnApril 18, 2024, the Company amended the Securities Purchase Agreement with Alumni Capital LP to extended the commitment period endingon the earlier of (i) December 31, 2024, or (ii) the date on which the Investor shall have purchased Securities pursuant to the SecuritiesPurchase Agreement for an aggregate purchase price of the commitment amount.
OnNovember 20, 2024, the Company issued shares of Class A Common Stock based on the Securities Purchase Agreement with Alumni CapitalLP.
OnJanuary 6, 2025, the Company issued and sold to Crom Structured Opportunities Fund I, LP, a Delaware limited partnership (“Crom”)a 10% OID promissory note in the aggregate principal amount of $
OnMarch 12, 2025, the Company entered into a private placement securities subscription agreement (the “GM Private Placement Agreement”)with Good Mood Studio, Inc. (“Good Mood Studio”) pursuant to which Good Mood Studio purchased $
OnMarch 12, 2025, the Company entered into a private placement securities subscription agreement (the “BOF Private Placement Agreement”)with Blue Ocean Fund (“Blue Ocean Fund”) pursuant to which Blue Ocean Fund purchased $
OnMarch 12, 2025, the Company entered into a private placement securities subscription agreement (the “GLF Private Placement Agreement”)with Green Light Fund (“Green Light Fund”) pursuant to which Green Light Fund purchased $
OnMarch 17, 2025, the Company entered into securities subscription agreements (the “Subscription Agreements”) with certaininvestors pursuant to which the investors purchased an aggregate of
OnMarch 24, 2025, the Company entered into securities subscription agreements (the “Subscription Agreements”) with certaininvestors pursuant to which the investors agreed to cancel indebtedness in an aggregate amount of $
OnMarch 25, 2025, the Company entered into Subscription Agreements with certain investors pursuant to which the investors agreed to pay$
| 21 |
NOTESTO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
17.STOCKHOLDERS’ EQUITY (DEFICIT) (Continued)
ClassB Common Stock
TheCompany has authorization to issue and have outstanding at any one time shares of Class B common stock with a par value of$ per share.
Theholders of class B common stock are entitled to dividends as declared by the Company’s Board of Directors from time to time atthe same rate per share as the class A common stock.
Theholders of the class B common stock have the following conversion rights with respect to the class B common stock into shares of classA common stock:
| ● | all of the shares of class B common stock will automatically convert into class A common stock on a one-for-one basis upon the earlier of (A) the date such shares cease to be beneficially owned by James Chae and (B) 5:00 p.m. Pacific Time on the date that James Chae ceases to beneficially own at least % of the voting power of all the outstanding shares of capital stock of the Company; and | |
| ● | at the election of the holder of class B common stock, any share of class B common stock may be voluntarily converted into one share of class A common stock. |
Immediatelyprior to the IPO in September 2022, the Company exchanged shares of class A common stock held by James Chae into shares of class B common stock.
OnNovember 22, 2023, the Company filed the Certificate of Amendment to the Company’s Amended and Restated Certificate of Incorporationto effect the Reverse Stock Split of its issued Class B common stock in the ratio of
TheCompany calculates earnings per share in accordance with FASB ASC 260, Earnings Per Share, which requires a dual presentation of basicand diluted earnings per share. Basic earnings per share are computed using the weighted average number of shares outstanding duringthe fiscal year. The Company did t have any dilutive common shares for the three months ended June 30, 2025 and 2024.
19.SUBSEQUENT EVENTS
The Company evaluated all events or transactionsthat occurred after June 30, 2025 up through the date the consolidated financial statements were available to be issued. Based upon theevaluation, except as disclosed below or within the footnotes, the Company did not identify any recognized or non-recognized subsequentevents that would have required adjustment or disclosure in the consolidated financial statements except as follows:
| ● | Forward Stock Split - On July 18, 2025, the Company’sBoard of Directors approved and announced a |
| ● | Convertible Note Issuance - On July 29, 2025, the Company enteredinto a Secured Convertible Note Purchase Agreement with an institutional investor for aggregate gross proceeds of $ |
| ● | Proposed Corporate Name Change - On July 15, 2025, the Companyannounced its intention to change its corporate name from Yoshiharu Global Co. to Vestand, Inc. to reflect a strategic transition intoreal estate investment and digital asset initiatives. The name change is subject to the completion of required corporate and regulatoryapprovals |
| 22 |
Item2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Youshould read the following discussion and analysis of our financial condition and results of operations together with our unaudited consolidatedfinancial statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q andwith our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ending December 31, 2024.As discussed in the section titled “Note Regarding Forward-Looking Statements,” the following discussion and analysis containsforward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect,could cause our results to differ materially from those expressed or implied by such forward-looking statements. Factors that could causeor contribute to these differences include, but are not limited to, those identified below and those discussed in the section titled“Risk Factors” in our Annual Report on Form 10-K for the year ending December 31, 2024.
Overviewof Yoshiharu
Yoshiharuis a fast-growing Japanese restaurant operator and was borne out of the idea of introducing the modernized Japanese dining experienceto customers all over the world. Specializing in Japanese ramen, Yoshiharu gained recognition as a leading ramen restaurant in SouthernCalifornia within six months of our 2016 debut and has continued to expand our top-notch restaurant service across Southern California,currently owning and operating 15 restaurant stores with an additional 2 restaurant stores under construction/development/acquisitionas of June 30, 2025.
Wetake pride in our warm, hearty, smooth, and rich bone broth, which is slowly boiled for over 12 hours. Customers can taste and experiencesupreme quality and deep flavors. Combining the broth with the fresh, savory, and highest-quality ingredients, Yoshiharu serves the perfect,ideal ramen, as well as offers customers a wide variety of sushi rolls, bento menu and other favorite Japanese cuisine. Our acclaimedsignature Tonkotsu Black Ramen has become a customer favorite with its slow cooked pork bone broth and freshly made, tender chashu (braisedpork belly).
Ourmission is to bring our Japanese ramen and cuisine to the mainstream, by providing a meal that customers find comforting. Since the inceptionof the business, we have been making our own ramen broth and other key ingredients such as pork chashu and flavored eggs from scratch,whereby upholding the quality and taste of our foods, including the signature texture and deep, rich flavor of our handcrafted broth.Moreover, we believe that slowly cooking the bone broth makes it high in collagen and rich in nutrients. Yoshiharu also strives to presentfood that is not only healthy, but also affordable. We feed, entertain and delight our customers, with our active kitchens and bustlingdining rooms providing happy hours, student and senior discounts, and special holiday events. As a result of our vision, customers cancomfortably enjoy our food in a friendly and welcoming atmosphere.
Weoperate in a large and rapidly growing market. We believe the consumer appetite for Asian cuisine is widespread across many demographicsand grants us the opportunity to expand in both existing and new U.S. markets, as well as internationally.
| 23 |
OurGrowth Strategies
PursueNew Restaurant Development.
Wehave pursued a disciplined new corporate owned growth strategy. Having expanded our concept and operating model across varying restaurantsizes and geographies, we plan to leverage our expertise opening new restaurants to fill in existing markets and expand into new geographies.While we currently aim to achieve in excess of 100% annual unit growth rate over the next three to five years, we cannot predict thetime period of which we can achieve any level of restaurant growth or whether we will achieve this level of growth at all. Our abilityto achieve new restaurant growth is impacted by a number of risks and uncertainties beyond our control, including but not limited tolandlord delays; competition in existing and new markets, including competition for restaurant sites; and the lack of development andoverall decrease in commercial real estate due to macroeconomic decline. We believe there is a significant opportunity to employ thisstrategy to open additional restaurants in our existing markets and in new markets with similar demographics and retail environments.
DeliverConsistent Comparable Restaurant Sales Growth.
Wehave achieved positive comparable restaurant sales growth in recent periods. We believe we will be able to generate future comparablerestaurant sales growth by growing traffic through increased brand awareness, consistent delivery of a satisfying dining experience,new menu offerings, and restaurant renovations. We will continue to manage our menu and pricing as part of our overall strategy to drivetraffic and increase average check. We are also exploring initiatives to grow sales of alcoholic beverages at our restaurants, includingthe potential of a larger format restaurant with a sake bar concept. In addition to the strategies stated above, we expect to initiatesales of franchises in 2025.
IncreaseProfitability.
Wehave invested in our infrastructure and personnel, which we believe positions us to continue to scale our business operations. As wecontinue to grow, we expect to drive higher profitability both at a restaurant-level and corporate-levelby taking advantage of our increasing buying power with suppliers and leveraging our existing support infrastructure. Additionally,we believe we will be able to optimize labor costs at existing restaurants as our restaurant base matures and AUV’s increase. Webelieve that as our restaurant base grows, our general and administrative costs will increase at a slower rate than our sales.
HeightenBrand Awareness.
Weintend to continue to pursue targeted local marketing efforts and plan to increase our investment in advertising. We also are exploringthe development of instant ramen noodles which we would distribute through retail channels. We intend to explore partnerships with groceryretailers to provide small-format Yoshiharu kiosks in stores to promote a limited selection of Yoshiharu cuisine.
ExperiencedManagement Team Dedicated to Growth.
Ourteam is led by experienced and passionate senior management who are committed to our mission. We are led by our Chief Executive Officer,James Chae. Mr. Chae founded Yoshiharu in 2016 and leads a team of talented professionals with deep financial, operational, culinary,and real estate experience.
| 24 |
Componentsof Our Results of Operations
Revenues.Revenues represent sales of food and beverages in restaurants. Restaurant sales in a given period are directly impacted by thenumber of restaurants we operate and comparable restaurant sales growth.
Foodand beverage. Food and beverage costs are variable in nature, change with sales volume and are influenced by menu mix and subjectto increases or decreases based on fluctuations in commodity costs. Other important factors causing fluctuations in food and beveragecosts include seasonality and restaurant-level management of food waste. Food and beverage costs are a substantial expense and are expectedto grow proportionally as our sales grow.
Labor.Labor includes all restaurant-level management and hourly labor costs, including wages, employee benefits and payroll taxes.Similar to the food and beverage costs that we incur, labor and related expenses are expected to grow proportionally as our sales increase.Factors that influence fluctuations in our labor and related expenses include minimum wage and payroll tax legislation, the frequencyand severity of workers’ compensation claims, healthcare costs and the performance of our restaurants.
Rentand utilities. Rent and utilities include rent for all restaurant locations and related taxes.
Depreciationand amortization expenses. Depreciation and amortization expenses are periodic non-cash charges that consist of depreciationof fixed assets, including equipment and capitalized leasehold improvements. Depreciation is determined using the straight-line methodover the assets’ estimated useful lives, ranging from three to ten years.
Deliveryand service fees. The Company’s customers may order online through third party service providers such as Uber Eats, DoorDash, Grubhub and others. These third-party service providers charge delivery and order fees to the Company.
Generaland administrative expenses. General and administrative expenses include expenses associated with corporate and regional supervisionfunctions that support the operations of existing restaurants and development of new restaurants, including compensation and benefits,travel expenses, stock-based compensation expenses for corporate-level employees, legal and professional fees, marketing costs, informationsystems, corporate office rent and other related corporate costs. General and administrative expenses are expected to grow as our salesgrows, including incremental legal, accounting, insurance and other expenses incurred as a public company.
Advertisingand marketing expenses. Advertising and marketing expenses include expenses associated with marketing campaigns and periodicadvertising. Advertising and marketing expenses are expected to grow leading up to the planned openings of restaurant locations and isexpected to stabilize as an average by location as our sales grow.
Interestexpense. Interest expense includes non-cash charges related to our capital lease obligations and bank notes payable.
Incometax provision (benefit). Provision for income taxes represents federal, state and local current and deferred income tax expense.
| 25 |
Resultsof Operations
Sixmonths ended June 30, 2025 Compared to Six months ended June 30, 2024
Thefollowing table presents selected comparative results of operations from our unaudited financial statements for the six months endedJune 30, 2025, compared to six months ended June 30, 2024. Our financial results for these periods are not necessarily indicative ofthe financial results that we will achieve in future periods. Certain totals for the table below may not sum to 100% due to rounding.
| For the Six months ended June 30 | Increase /(Decrease) | |||||||||||||||
| 2025 | 2024 | $ | $ | |||||||||||||
| Total revenue | 7,200,729 | 6,137,005 | $ | 1,063,724 | 17.33 | % | ||||||||||
| Restaurant operating expenses: | ||||||||||||||||
| Food, beverages and supplies | 2,269,553 | 1,508,572 | 760,981 | 50.44 | % | |||||||||||
| Labor | 3,329,120 | 2,780,661 | 548,459 | 19.72 | % | |||||||||||
| Rent and utilities | 1,133,500 | 769,296 | 364,204 | 47.34 | % | |||||||||||
| Delivery and service fees | 306,724 | 280,916 | 25,808 | 9.19 | % | |||||||||||
| Depreciation | 478,605 | 350,327 | 128,278 | 36.62 | % | |||||||||||
| Total restaurant operating expenses | 7,517,502 | 5,689,772 | 1,827,730 | 32.12 | % | |||||||||||
| Net restaurant operating income | (316,773 | ) | 447,233 | (764,006 | ) | -170.83 | % | |||||||||
| Operating expenses: | ||||||||||||||||
| General and administrative | 2,531,310 | 2,012,054 | 519,256 | 25.81 | % | |||||||||||
| Related party compensation | 42,154 | 95,879 | (53,725 | ) | -56.03 | % | ||||||||||
| Advertising and marketing | 85,933 | 58,564 | 27,369 | 46.73 | % | |||||||||||
| Total operating expenses | 2,659,397 | 2,166,497 | 492,900 | 22.75 | % | |||||||||||
| Loss from operations | (2,976,170 | ) | (1,719,264 | ) | (1,256,906 | ) | 73.11 | % | ||||||||
| Other income (expense): | ||||||||||||||||
| Other income | 800,106 | 12,207 | 787,899 | 6454.49 | % | |||||||||||
| Interest | (435,868 | ) | (252,126 | ) | (183,742 | ) | 72.88 | % | ||||||||
| Total other income | 364,238 | (239,919 | ) | 604,157 | -251.82 | % | ||||||||||
| Loss before income taxes | (2,611,932 | ) | (1,959,183 | ) | (652,749 | ) | 33.32 | % | ||||||||
| Income tax provision | 16,925 | 21,838 | (4,913 | ) | -22.50 | % | ||||||||||
| Net loss | (2,628,857 | ) | (1,981,021 | ) | (647,836 | ) | 32.70 | % | ||||||||
RevenuesRevenue were $7.2 million for the six months ended June 30, 2025, compared to $6.1 million for the six months ended June 30, 2024, anincrease of approximately $1.1 million, or 17.3%. This increase was primarily attributable to the acquisition of three restaurants inLas Vegas during the second quarter of 2025, which contributed incremental sales to the period.
Food,beverage and supplies. Food, beverage and supplies costs were approximately $2.3 million for the six months ended June 30, 2025,compared to $1.5 million for the six months ended June 30, 2024, representing an increase of approximately $761 thousand, or 50.4%. Theincrease in costs for the six-month period was primarily attributable to higher sales from the three newly acquired restaurants in LasVegas, as well as a general increase in food material costs compared to the prior year. As a percentage of sales, food, beverage andsupply costs increased to 31.5% in the six months ended June 30, 2025, compared to 24.6% in the six months ended June 30, 2024. The higherpercentage of sales was primarily driven by inflationary pressures in food input costs.
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Labor.Labor expense was $3.33 million for the six months ended June 30, 2025, compared to $2.78 million in the prior year period, an increaseof approximately $548 thousand, or 19.7 percent. The increase was primarily attributable to the addition of staffing costs from the threenewly acquired Las Vegas restaurants and wage inflation compared to the prior year. As a percentage of revenues, labor expense was 46.2percent in 2025 compared to 45.3 percent in 2024, remaining relatively consistent despite the expansion.
Rentand utilities. Rent and utilities expense was $1.13 million for the six months ended June 30, 2025, compared to $769 thousand inthe prior year period, an increase of approximately $364 thousand, or 47.3 percent. The increase was primarily due to the addition oflease expenses from the three newly acquired Las Vegas restaurants, as well as higher utility costs. As a percentage of revenues, rentand utilities rose to 15.7 percent in 2025 compared to 12.5 percent in 2024, reflecting the impact of new leases and cost inflation.
Deliveryand service fees. Delivery and service fees were $307thousand for the six months ended June 30, 2025, compared to $281 thousand in the prior year period, an increase of approximately$26 thousand, or 9.2%. The increase was primarily attributable to higher overall sales volumes,including contributions from the newly acquired Las Vegas restaurants. As a percentage of revenues, delivery and service fees remainedrelatively stable at 4.3% in 2025 compared to 4.6% in 2024,indicating consistent cost management despite higher activity levels
Depreciationand amortization expenses. Depreciation and amortization expense was $479 thousand for the six months ended June 30, 2025, comparedto $350 thousand in the prior year period, an increase of approximately $129 thousand, or 36.6 percent. The increase was primarily dueto depreciation on fixed assets acquired with the three new Las Vegas restaurants, along with ongoing depreciation from capital improvementsmade in prior periods. As a percentage of revenues, depreciation rose to 6.6 percent in 2025 compared to 5.7 percent in 2024, reflectinga higher asset base following recent expansion.
Generaland administrative expenses. General and administrative expense was $2.53 million for the six months ended June 30, 2025, comparedto $2.01 million in the prior year period, an increase of approximately $519 thousand, or 25.8 percent. The increase was primarily dueto higher corporate overhead costs associated with supporting the expanded restaurant base and professional fees. As a percentage ofrevenues, general and administrative expense was 35.2 percent in 2025 compared to 32.8 percent in 2024, reflecting higher fixed overheadrelative to sales growth.
Relatedparty compensation Related party compensation was $42 thousand for the six months ended June 30, 2025, compared to $96 thousand in theprior year period, a decrease of approximately $54 thousand, or 56.0 percent. The decrease was primarily due to reduced compensationpaid to James Chae following his resignation as an officer during the current period. As a percentage of revenues, related party compensationdeclined to 0.6 percent in 2025 from 1.6 percent in 2024, reflecting reduced payments relative to overall sales growth
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Liquidityand Capital Resources
OnAugust 21, 2024, we received a notification letter (the “Letter”) from the Nasdaq Listing Qualifications Staff of The NasdaqStock Market LLC (“Nasdaq”) notifying the Company that its amount of stockholders’ equity has fallen below the $2,500,000required minimum for continued listing set forth in Nasdaq Listing Rule 5550(b)(1). On February 18, 2025, we received another notificationletter (the “2nd Letter”) from Nasdaq notifying the Company that it has scheduled the Company’s securities for delistingfrom The Nasdaq Capital Market. Pursuant to the procedures set forth in the Nasdaq Listing Rule 5800 series, we appealed Nasdaq’sdetermination to a Hearings Panel (the “Panel”) and a hearing request has stayed the suspension of the Company’s securitiesand the filing of the Form 25-NSE pending the Panel’s decision after a hearing scheduled for April 1, 2025.
Ourprimary uses of cash are for operational expenditures and capital investments, including new restaurants, costs incurred for restaurantremodels and restaurant fixtures. Historically, our main sources of liquidity have been cash flows from operations, borrowings from banks,and sales of common shares.
OnJanuary 5, 2024, we entered into a securities purchase agreement (the “Securities Purchase Agreement”) with Alumni CapitalLP, a Delaware limited partnership (“Alumni”) whereby we sold to Alumni 45,000 shares of Class A Common Stock in exchangefor $118 thousand on November 20, 2024. This Purchase Agreement terminated on December 31, 2024.
OnJanuary 6, 2025, the Company issued and sold to Crom Structured Opportunities Fund I, LP, a Delaware limited partnership (“Crom”)a 10% OID promissory note in the aggregate principal amount of $1,100,000 (the “Note”) for a purchase price of $1,000,000.The Company repaid such Note on March 7, 2025 with the proceeds from a loan made to the Company on or about March 6, 2025. Also on January6, 2025, we entered into an equity purchase agreement (the “Purchase Agreement”) with Crom (the “Investor”) pursuantto which the Company shall have the right, but not the obligation, to sell to the Investor up to $10,000,000 (the “ELOC Shares”)of the Company’s Class A common stock, $0.0001 par value per share (“Class A Common Stock”). However, we have not yetbeen able to access capital under this agreement since we must first register shares issuable under the Purchase Agreement, which wemay only do after the filing of this Annual Report on Form 10-K.
OnMarch 12, 2025, we entered into private placements with three investors for the sale of Class A common stock at a price of $2.50 pershare for gross proceeds of $714,000. However, we are obligated to register those shares and if we fail to do so in accordance with thoseagreements, we may be forced to repurchase those shares at the price we had sold them for. On March 17, 2025 we sold penny warrants ata price of $2.50 per share for gross proceeds of $1,200,000. We are obligated to register the shares underlying such warrants and ifwe fail to do so in accordance with those agreements, we may be forced to repurchase those warrants for the price we sold them for.
OnMarch 17, 2025, the Company sold 480,000 warrants for a purchase price of $1,200,000, or $2.50 per share. Each warrant is exercisablefor one share of the Company’s Class A common stock pursuant to the terms of a warrant agreement dated as of March 17, 2025. Pursuantto the terms of the Warrant Agreement, in the event that the Company has not obtained stockholder approval, the Company may not issueupon exercise of the Warrants a number of shares of Common Stock, which, when aggregated with any shares of Common Stock issued pursuantto the subscription agreements executed contemporaneously between the Company and other investors or holders of Warrants (whether forCommon Stock or Warrants) would equal twenty (20%) percent or more of the Common Stock or twenty (20%) percent or more of the votingpower of the Company outstanding before the issuance. The Company is also obligated to file a registration statement to the SEC withinthirty (30) calendar days following the filing of this Annual Report on Form 10-K with the SEC. If the Company fails to (i) submit theregistration statement within the timeline specified above or if the registration statement is denied, withdrawn or not declared effectiveby the SEC within one-hundred twenty (120) days from the filing date or (ii) fail to obtain the requisite stockholder approval within75 days from the date of the Subscription Agreements, the investors will have the option, in their sole discretion, to: (1) with respectto (i), require the Company to assist it in filing for an exemption under Rule 144 or other applicable SEC regulations to remove thetransfer restrictions from the Shares, or, if such exemption is unavailable, demand the Company to repurchase the Warrants or underlyingshares at the original purchase price; or (2) demand a full refund of the subscription amount, subject to the Company’s financialcapability as verified by an independent audit conducted within 15 days of the demand.
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OnMarch 25, 2025, the Company entered into Subscription Agreements with certain investors pursuant to which the investors agreed to pay$1,650,000 in aggregate to purchase an aggregate of 660,000 warrants. The Subscription Agreements contain customary representations,warranties, and indemnification provisions and were entered into in reliance on self-certification as an accredited investor pursuantto Regulation D promulgated under the Securities Act. Each warrant is exercisable for one share of the Company’s Class A commonstock, par value $0.0001 per share (“Class A Common Stock”), at an exercise price of $0.01 (the “Shares”) pursuantto the terms of warrant agreements dated as of March 24, 2025 (the “Warrant Agreement”). Pursuant to the Subscription Agreements,the Company is obligated to file a registration statement to register these shares with the SEC within thirty (30) calendar days followingthe filing of this Annual Report on Form 10-K with the SEC. If the Company fails to submit the registration statement within the timelinespecified above or if the registration statement is denied, withdrawn or not declared effective by the SEC within one-hundred twenty(120) days from the filing date, Good Mood Studio will have the option, in its sole discretion, to: (1) require the Company to assistit in filing for an exemption under Rule 144 or other applicable SEC regulations to remove the transfer restrictions from the shares,or, if such exemption is unavailable, demand the Company to repurchase the shares at the original purchase price or (2) demand a fullrefund of the subscription amount subject to the Company’s financial capability as verified by an independent audit conducted within15 days of the demand.
OnMarch 27, 2025, Nasdaq notified the Company that it had regained compliance with Rule 5550(b)(1). As a result, the hearing scheduledfor April 1, 2025 has been cancelled and the Company’s securities will continue to be listed and traded on The Nasdaq Stock Market.
OnApril 2, 2025, the Company entered into two new securities subscription agreements and amended one securities subscription agreement(the “Subscription Agreements”) with certain investors pursuant to which the investors purchased an aggregate of 400,000additional warrants for a purchase price of $1,000,000. The Subscription Agreements contain customary representations, warranties, andindemnification provisions and were entered into in reliance on self-certification as an accredited investor pursuant to Regulation Dpromulgated under the Securities Act. Each warrant is exercisable for one share of the Company’s Class A common stock at an exerciseprice of $0.01 (the “Shares”) pursuant to the terms of warrant agreements dated as of April 2, 2025 (the “Warrant Agreement”).
OnApril 9, 2025, Yoshiharu Global Co., a Delaware corporation (the “Company”) entered into two new securities subscriptionagreements (the “Subscription Agreements”) with certain investors pursuant to which the investors purchased an aggregateof 400,000 additional warrants for an aggregate purchase price of $1,000,000. The Subscription Agreements contain customary representations,warranties, and indemnification provisions and were entered into in reliance on self-certification as an accredited investor pursuantto Regulation D promulgated under the Securities Act. Each warrant is exercisable for one share of the Company’s Class A commonstock at an exercise price of $0.01 (the “Shares”) pursuant to the terms of warrant agreements dated as of April 9, 2025(the “Warrant Agreement”).
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Summaryof Cash Flows
Thefollowing table summarizes our cash flows for the periods presented:
| Six Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Statement of Cash Flow Data: | ||||||||
| Net cash used in operating activities | $ | (4,586,677 | ) | $ | (373,196 | ) | ||
| Net cash used in investing activities | (32,622 | ) | (356,642 | ) | ||||
| Net cash provided by financing activities | 4,704,802 | 623,250 | ||||||
CashFlows Used in Operating Activities
Netcash used in operating activities was $4.5 million for the six months ended June 30, 2025, compared to net cash provided of $0.6 millionfor the six months ended June 30, 2024. The $5.1 million unfavorable variance was primarily attributable to a higher net loss of $2.6million in the current period, as compared to $2.0 million in the prior year, and significant unfavorable changes in working capital.The most notable working capital changes included an increase in accounts receivable of $0.4 million, reflecting higher sales volumesfrom the Las Vegas restaurants, an increase in other assets of $1.0 million, and a decrease in accounts payable and accrued expensesof $0.8 million. Additionally, due to related party balances decreased by $39 thousand, further reducing operating cash flows. Theseoutflows were only partially offset by non-cash adjustments of $0.5 million in depreciation and amortization, and a $50 thousand gainon disposal of fixed assets.
Thedeterioration in operating cash flows compared to the prior year reflects both the expanded operating scale following the Las Vegas acquisitionsand the increased working capital requirements associated with supporting higher revenues.
CashFlows Used in Investing Activities
Netcash used in investing activities was $33 thousand for the six months ended June 30, 2025, compared to $2.2 million for the six monthsended June 30, 2024. The decrease in cash used was primarily attributable to the absence of acquisition activity in 2025. In the prioryear period, the Company completed the acquisition of the Las Vegas restaurant entities for approximately $1.8 million, in addition to$0.4 million of purchases of property and equipment. In contrast, cash outflows in 2025 were limited to routine purchases of propertyand equipment of $33 thousand.
CashFlows Provided by Financing Activities
Netcash provided by financing activities was $4.7 million for the six months ended June 30, 2025, compared to $1.3 million for the six monthsended June 30, 2024. The increase was primarily driven by proceeds of $6.4 million from the sale of common shares and warrants in 2025,compared to only $64 thousand raised from equity issuances in the prior year. In addition, the Company received $1.1 million in borrowingsin 2025, compared to $0.9 million in 2024.
Theseinflows were partially offset by repayments of $1.6 million on bank notes payable, $1.2 million on convertible notes, and $34 thousandon loans payable to financial institutions in 2025. By comparison, repayments in 2024 consisted of $372 thousand on bank notes and $298thousand on loans payable to financial institutions.
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ContractualObligations
Thefollowing table presents our commitments and contractual obligations as of June 30, 2025, as well as our long-term obligations:
| Payments due by period as of June 30, 2025 | ||||||||||||||||||||
| Total | 2025(remaining Six months) | 2026-2027 | 2028-2029 | Thereafter | ||||||||||||||||
| Capital lease payments | $ | 9,239,390 | $ | 1,084,225 | $ | 2,706,223 | $ | 2,370,749 | $ | 3,134,813 | ||||||||||
| Bank note payables | 2,785,384 | 1,041,490 | 1,060,900 | 500,380 | - | |||||||||||||||
| EIDL loan payables | 412,639 | 5,513 | 23,115 | 24,912 | 356,380 | |||||||||||||||
| Loans payable to financial institutions | 3,332 | - | - | - | - | |||||||||||||||
| Total contractual obligations | $ | 12,440,745 | $ | 2,131,228 | $ | 3,790,238 | $ | 2,896,041 | $ | 3,491,193 | ||||||||||
IncomeTaxes
TheCompany files income tax returns in the U.S. federal and California state jurisdictions.
Weare considered a U.S. corporation and a regarded entity for U.S. federal, state and local income taxes. Accordingly, a provision willbe recorded for the anticipated tax consequences of our reported results of operations for U.S. federal, state and foreign income taxes.
JOBSAct Accounting Election
Weare an “emerging growth company,” as defined in the JOBS Act, and may take advantage of certain exemptions from various publiccompany reporting requirements for up to five years or until we are no longer an emerging growth company, whichever is earlier. The JOBSAct provides that an “emerging growth company” can delay adopting new or revised accounting standards until those standardsapply to private companies. We have elected to use this extended transition period under the JOBS Act. Accordingly, our financial statementsmay not be comparable to the financial statements of public companies that comply with such new or revised accounting standards.
OffBalance Sheet Arrangements
Asof June 30, 2025, we did not have any material off-balance sheet arrangements.
CriticalAccounting Policies
Thepreparation of financial statements in conformity with GAAP requires management to utilize estimates and make judgments that affect thereported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. These estimatesare based on historical experience and on various other assumptions that management believes to be reasonable under the circumstances.The estimates are evaluated by management on an ongoing basis, and the results of these evaluations form a basis for making decisionsabout the carrying value of assets and liabilities that are not readily apparent from other sources. Although actual results may differfrom these estimates under different assumptions or conditions, management believes that the estimates used in the preparation of ourfinancial statements are reasonable. The critical accounting policies affecting our financial reporting are summarized in Note 2 to thefinancial statements included elsewhere in this Quarterly Report.
RecentAccounting Pronouncements
Wehave determined that all other issued, but not yet effective accounting pronouncements are inapplicable or insignificant to us and onceadopted are not expected to have a material impact on our financial position.
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Item3. Quantitative and Qualitative Disclosures About Market Risk.
Weare a smaller reporting company as defined by 17 C.F.R. 229.10(f)(1) and are not required to provide information under this item.
Item4. Controls and Procedures.
Evaluationof Disclosure Controls and Procedures
Asof June 30, 2025, our management, including our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of theeffectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the ExchangeAct). Based on this evaluation, management concluded that our disclosure controls and procedures were not fully effective due to thematerial weaknesses in internal control over financial reporting described below.
MaterialWeaknesses in Internal Control Over Financial Reporting
Aspreviously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024, we identified material weaknesses relatedto (i) an insufficient number of accounting personnel with specialized knowledge of U.S. GAAP and SEC reporting requirements, and (ii)a lack of segregation of duties within our finance and accounting functions.
RemediationEfforts and Progress
Duringthe quarter ended June 30, 2025, we made meaningful progress in addressing these weaknesses:
| ● | We hired additional accounting staff and reassigned certain responsibilities to improve segregation of duties. | |
| ● | We engaged outside accounting consultants with public company reporting expertise to assist with quarterly and annual filings. | |
| ● | We implemented enhanced review and approval procedures for journal entries, reconciliations, and financial reporting. | |
| ● | We initiated the use of new internal control documentation and testing procedures overseen by management and the Audit Committee. |
Thesemeasures represent important steps toward strengthening our internal control environment. Although the remediation process is not yetcomplete and the material weaknesses have not been fully eliminated, management believes the actions taken have already enhanced thereliability of our financial reporting and demonstrate our commitment to strong corporate governance.
Changesin Internal Control Over Financial Reporting
Except as described above, there were no other changes in our internal control over financialreporting during the quarter ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internalcontrol over financial reporting.
Commitmentto Remediation Evaluation of Disclosure Controls and Procedures
Asof June 30, 2025, our management, including our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of theeffectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the ExchangeAct). Based on this evaluation, management concluded that our disclosure controls and procedures were not fully effective due to thematerial weaknesses in internal control over financial reporting described below.
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PARTII—OTHER INFORMATION
Item1. Legal Proceedings.
Inthe future, the Company may be subject to various legal proceedings from time to time as part of its business. We and our subsidiariesare not currently a party, nor is our property subject, to any material pending legal proceedings.
Item2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item3. Defaults Upon Senior Securities
Notapplicable.
Item4. Mine Safety Disclosures
Notapplicable.
Item5. Other Information
Duringthe three and six months ended June 30, 2025, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act)
Item6. Exhibits.
Thefollowing exhibits are included herein or incorporated herein by reference :
| * | Filed herewith. |
| ** | Furnished herewith. |
| 33 |
SIGNATURES
Pursuantto the requirements of Section 13 or 15(d) of the Securities Act of 1934, the Registrant has duly caused this Report to be signed onits behalf by the undersigned, thereunto duly authorized.
| August 19, 2025 | YOSHIHARU GLOBAL CO. | |
| By: | /s/ Jiwon Kim | |
| Name: | Jiwon Kim | |
| Title: | Chairman of the Board of Directors, President and Chief Executive Officer and Principal Executive Officer (Principal Executive Officer) | |
| 34 |
Exhibit10.1
amendmentTO SECURITIES PURCHASE AGREEMENT
ThisAMENDMENT TO SECURITIES PURCHASE AGREEMENT (this “Amendment”) is dated as of April 18, 2024 by and betweenYoshiharu Global Co., a Delaware corporation (the “Company”), and Alumni Capital LP, a Delawarelimited partnership (the “Investor”).
RECITALS
A.On January 4, 2024, the Company and the Investor entered into a Securities Purchase Agreement (the “Agreement”).All capitalized terms not defined herein shall have the meaning ascribed to such term in the Agreement.
B.The Agreement incorrectly referenced the Effective Date as January 4, 2023.
C.Section 10.14 of the Agreement provides that the Company and the Investor may amend the Agreement by written instrument signed byboth Parties.
D.The Company and the Investor desire to amend the Agreement to extend the Commitment Period as set forth herein.
NOWTHEREFORE, in consideration of the foregoing recitals, the mutual covenants and agreements set forth in this Amendment, and for othergood and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Investor agree asfollows:
1.The definition of Execution Date shall be January 4, 2024.
2.The definition of Commitment Period shall be amended in its entirety to read as follows:
“CommitmentPeriod” shall mean the period commencing on the Execution Date and ending on the earlier of (i) December 31, 2024, or (ii)the date on which the Investor shall have purchased Securities pursuant to this Agreement for an aggregate purchase price of the CommitmentAmount.
3.Miscellaneous.
(a)Effectiveness. This Amendment shall be deemed an amendment of the Agreement in accordance with Section 10.14 of the Agreement.Except as specifically modified hereby, the Agreement shall be deemed controlling and effective, and the parties hereby agree to be boundby each of its terms and conditions.
(b)Counterparts. This Amendment may be executed in any number of counterparts, all of which will be one and the same agreement. Asigned copy of this Amendment delivered by email or other means of electronic transmission shall be deemed to have the same legal effectas delivery of an original signed copy of this Amendment. This Amendment shall be considered signed when the signature of a party isdelivered by .PDF, DocuSign or other generally accepted electronic signature. Such .PDF, DocuSign, or other generally accepted electronicsignature shall be treated in all respects as having the same effect as an original signature.
| COMPANY: | YOSHIHARU GLOBAL CO. | |
| By: | /s/ Jiwon Kim | |
| Name: | Jiwon Kim | |
| Title: | Chief Executive Officer | |
| INVESTOR: | ALUMNI CAPITAL LP | |
| By: | ALUMNI CAPITAL GP LLC | |
| By: | /s/ Ashkan Mapar | |
| Name: | Ashkan Mapar | |
| Title: | Manager | |
| 1 |
Exhibit31.1
CERTIFICATION
PURSUANTTO RULE 13a-14 AND 15d-14
UNDERTHE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
I,Jiwon Kim, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q (this “Report”) for the quarterly period ended June 30, 2025 of Yoshiharu Global Co.; | |
| 2. | 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; | |
| 3. | 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; | |
| 4. | The registrant’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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a. | 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; | |
| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principle; | |
| c. | Evaluated the effectiveness of the registrant’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 | |
| d. | Disclosed in this Report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a. | 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’s ability to record, process, summarize and report financial information; and | |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting. |
| Date: August 19, 2025 | By: | /s/ Jiwon Kim |
| Jiwon Kim | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) |
Exhibit31.2
CERTIFICATION
PURSUANTTO RULE 13a-14 AND 15d-14
UNDERTHE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
I,Ju Hwan Oh, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q (this “Report”) for the quarterly period ended June 30, 2025 of Yoshiharu Global Co.; | |
| 2. | 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; | |
| 3. | 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; | |
| 4. | The registrant’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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a. | 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; | |
| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principle; | |
| c. | Evaluated the effectiveness of the registrant’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 | |
| d. | Disclosed in this Report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a. | 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’s ability to record, process, summarize and report financial information; and | |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting. |
| Date: August 19, 2025 | By: | /s/ Ju Hwan Oh |
| Ju Hwan Oh | ||
| Chief Financial Officer | ||
| (Principal Financial and Accounting Officer) |
Exhibit32.1
CERTIFICATIONPURSUANT TO
18U.S.C. 1350
(SECTION906 OF THE SARBANES-OXLEY ACT OF 2002)
Inconnection with the Quarterly Report of Yoshiharu Global Co. (the “Company”) on Form 10-Q for the quarterly periodended June 30, 2025, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, JiwonKim, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-OxleyAct of 2002, that, to the best of my knowledge:
| (1) | the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
| (2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date:August 19, 2025
| /s/ Jiwon Kim | ||
| Name: | Jiwon Kim | |
| Title: | Chief Executive Officer (Principal Executive Officer) |
Exhibit32.2
CERTIFICATIONPURSUANT TO
18U.S.C. 1350
(SECTION906 OF THE SARBANES-OXLEY ACT OF 2002)
Inconnection with the Quarterly Report of Yoshiharu Global Co. (the “Company”) on Form 10-Q for the quarterly periodended June 30, 2025, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, JuHwan Oh, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of theSarbanes-Oxley Act of 2002, that, to the best of my knowledge:
| (1) | the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
| (2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date:August 19, 2025
| /s/ Ju Hwan Oh | ||
| Name: | Ju Hwan Oh | |
| Title: | Chief Financial Officer (Principal Financial and Accounting Officer) |