Financial Performance - Total revenue for the three months ended March 31, 2023, was $2,479,574, representing a 21.8% increase from $2,036,430 in the same period of 2022[18]. - Net loss for the three months ended March 31, 2023, was $1,144,489, compared to a net loss of $393,792 for the same period in 2022, indicating a significant increase in losses[18]. - The company reported a basic and diluted loss per share of $0.10 for the three months ended March 31, 2023, compared to a loss of $0.04 per share in the same period of 2022[18]. - Net restaurant operating income improved to $115,491 for the three months ended March 31, 2023, compared to a loss of $352,774 in the same period of 2022, marking a significant increase of $468,265[155]. - Adjusted EBITDA for the three months ended March 31, 2023, was $(721,236), compared to $(370,966) for the same period in 2022[172]. - The company experienced a net loss of $1,144,489 for the three months ended March 31, 2023, compared to a net loss of $393,792 in the same period of 2022, reflecting a deterioration of 190.6%[155]. Cash Flow and Liquidity - Cash and cash equivalents decreased to $4,214,120 as of March 31, 2023, down from $6,509,121 at the end of 2022, reflecting a decrease of 35.2%[16]. - Cash used in operating activities for the three months ended March 31, 2023, was $1,768,802, compared to $375,460 in the same period of 2022, indicating a significant increase in cash outflow[24]. - Net cash used in operating activities was $1,768,802 for Q1 2023, a significant increase from $375,460 in Q1 2022, primarily due to higher startup costs and administrative expenses[188]. - Net cash used in investing activities rose to $938,984 in Q1 2023 from $188,829 in Q1 2022, mainly for property and equipment purchases[191]. - The company raised approximately $10.3 million in net proceeds from its IPO in September 2022, which is expected to support operational and capital needs for at least the next 12 months[186][187]. Assets and Liabilities - Total current liabilities increased to $2,427,278 as of March 31, 2023, compared to $1,987,134 at the end of 2022, marking a rise of 22.1%[16]. - The company had total liabilities of $10,602,714 as of March 31, 2023, compared to $10,379,846 at the end of 2022, reflecting a slight increase of 2.1%[16]. - The accumulated deficit increased to $7,444,898 as of March 31, 2023, from $6,300,409 at the end of 2022, indicating a worsening financial position[20]. - Total assets decreased to $15,096,068 as of March 31, 2023, down from $16,017,689 at the end of 2022, a decline of 5.7%[16]. - Total contractual obligations as of March 31, 2023, amounted to $10,910,837, with significant capital lease payments due in the coming years[194]. Operating Expenses - Restaurant operating expenses for the three months ended March 31, 2023, totaled $2,364,083, slightly down from $2,389,204 in the same period of 2022[18]. - General and administrative expenses rose to approximately $1,060,453 for the three months ended March 31, 2023, an increase of 186.8% from $369,745 in the same period of 2022[164]. - Labor costs increased to $1,138,067 for the three months ended March 31, 2023, up 4.8% from $1,085,426 in the same period of 2022, while as a percentage of sales, labor costs decreased to 45.9%[159]. - Total operating expenses surged to $1,198,843 for the three months ended March 31, 2023, a 195.7% increase from $405,411 in the same period of 2022[155]. - Delivery and service fees incurred were approximately $147,837 for the three months ended March 31, 2023, an increase of 7.6% from $137,338 in the same period of 2022[161]. Growth and Expansion - The company has a total of 12 ramen stores located in California, with several new locations planned to open in 2022 and 2023[1]. - The company aims for over 100% annual unit growth rate over the next 3 to 5 years, although this is subject to various risks[138]. - The company plans to initiate franchise sales in 2023 to further expand its market presence[139]. - The company is exploring the development of instant ramen noodles for retail distribution and partnerships with grocery retailers[141]. - The company operates 8 restaurant locations with 5 additional stores under construction as of March 31, 2023[133]. Compliance and Regulatory - The company completed its initial public offering (IPO) in September 2022, selling 2,940,000 shares at $4.00 per share, generating gross proceeds of $11.76 million[32]. - Net proceeds from the IPO were approximately $10.3 million after deducting underwriting discounts and commissions and other offering expenses of about $1.5 million[32]. - The registrant has incorporated various exhibits related to its amended and restated certificate of incorporation and bylaws, filed on February 9, 2022[35]. - Certifications pursuant to the Sarbanes-Oxley Act of 2002 were filed, ensuring compliance and accountability by key executives[31.1][31.2][32.1][32.2]. Lease and Financing - The company has a $1,000,000 bank line of credit with an outstanding balance of $800,000 as of March 31, 2023, up from $300,000 as of December 31, 2022[60]. - The company executed a Paycheck Protection Program Loan of $131,600 on February 16, 2021, to mitigate the impact of the COVID-19 pandemic[81]. - The company adopted new lease accounting standards effective January 1, 2019, which require recognition of lease liabilities and right-of-use assets[54]. - The weighted-average remaining lease term for operating leases is 8.7 years, with a weighted-average discount rate of 7%[118]. - Operating lease expense for Q1 2023 was $231,970, a 61.5% increase from $143,561 in Q1 2022[118].
Yoshiharu (YOSH) - 2023 Q1 - Quarterly Report