Yoshiharu (US:YOSH)2023-08-14 20:22Financial Performance - Total revenue for the six months ended June 30, 2023, was $4,689,043, an increase of 17.9% compared to $3,973,690 for the same period in 2022[18]. - Net loss for the six months ended June 30, 2023, was $2,164,018, compared to a net loss of $840,414 for the same period in 2022, representing an increase in loss of 157.5%[18]. - Revenue for the six months ended June 30, 2023, was $4,689,043, an increase of $715,353 or 18.0% compared to $3,973,690 for the same period in 2022[154]. - Net loss for the six months ended June 30, 2023, was $2,164,018, representing an increase of $1,323,604 or 157.5% compared to a net loss of $840,414 for the same period in 2022[154]. - EBITDA for the six months ended June 30, 2023, was $(1,766,515), compared to $(327,507) for the same period in 2022, while Adjusted EBITDA was $(1,371,079) compared to $(713,407) in 2022[170]. Expenses - Restaurant operating expenses for the six months ended June 30, 2023, totaled $4,324,835, an increase of 6.0% compared to $4,081,541 for the same period in 2022[18]. - General and administrative expenses rose to $2,222,346 for the six months ended June 30, 2023, compared to $1,036,147 for the same period in 2022, an increase of 114.4%[18]. - Labor costs for the six months ended June 30, 2023, were approximately $2,003,481, an increase of $195,240 or 10.8% compared to $1,808,241 for the same period in 2022[158]. - General and administrative expenses increased to approximately $2.2 million for the six months ended June 30, 2023, up 114.5% from $1.0 million in the same period of 2022, representing 47.4% of sales compared to 26.1% in 2022[163]. - Operating lease expense for the six months ended June 30, 2023, was $457,959, compared to $299,554 for the same period in 2022, reflecting a 53% increase[117]. Cash Flow and Liquidity - Cash and cash equivalents decreased to $3,350,437 as of June 30, 2023, down from $6,509,121 as of December 31, 2022, a decline of 48.7%[16]. - Cash used in operating activities for the six months ended June 30, 2023, was $2,548,260, compared to $882,710 for the same period in 2022[22]. - Net cash used in operating activities was $(2,548,260) for the six months ended June 30, 2023, compared to $(882,710) in 2022, primarily due to increased general and administrative expenses[188]. - Net cash used in investing activities was $(1,040,797) for the six months ended June 30, 2023, significantly higher than $(288,829) in 2022, mainly for property and equipment purchases[190]. - Net cash provided by financing activities was $430,373 for the six months ended June 30, 2023, compared to $112,974 in 2022, driven by a $500,000 cash inflow from a line of credit[191]. Assets and Liabilities - Total current liabilities increased to $2,392,242 as of June 30, 2023, compared to $1,987,134 as of December 31, 2022, an increase of 20.4%[16]. - Total stockholders' equity decreased to $3,473,825 as of June 30, 2023, down from $5,637,843 as of December 31, 2022, a decline of 38.4%[16]. - Total property and equipment increased to $5,358,608 as of June 30, 2023, up from $4,334,854 as of December 31, 2022, representing a growth of 23.6%[59]. - The company has a $1,000,000 bank line of credit with an outstanding balance of $800,000 as of June 30, 2023, up from $300,000 as of December 31, 2022[60]. - Total bank notes payables amounted to $1,233,796 as of June 30, 2023, a decrease from $1,286,086 as of December 31, 2022[61]. Growth and Expansion Plans - The company plans to open several new ramen stores in California, including locations in San Clemente, Laguna, Ontario, Menifee, and Cypress[26]. - The Company aims for over 100% annual unit growth rate over the next three to five years, although this growth is subject to various risks[136]. - The Company plans to initiate franchise sales in 2023 to further expand its market presence[138]. - The Company operates 8 restaurant stores as of June 30, 2023, with an additional 5 new stores under construction[132]. Compliance and Regulatory Matters - The company has received a notification from Nasdaq regarding the minimum bid price for its common stock falling below $1.00 for 30 consecutive business days[209]. - The company has until December 13, 2023, to regain compliance with Nasdaq's minimum bid price requirement[209]. - If compliance is not regained, the company may be eligible for an additional 180 days to cure the deficiency, provided it meets other listing requirements[210]. - As of June 30, 2023, the company has identified control deficiencies due to inadequate accounting resources and lack of segregation of duties[201]. - Management believes that despite material weaknesses, the financial statements for the quarter ended June 30, 2023, are fairly stated in accordance with GAAP[203]. Related Party Transactions - Related party transactions included a loan to APIIS Financial Group, with a balance of $231,491 as of June 30, 2023[114]. - Related party compensation to James Chae was approximately $123,000 for the six months ended June 30, 2023, representing 2.6% of sales[164]. Other Financial Information - The company completed its initial public offering (IPO) in September 2022, issuing 2,940,000 shares at a price of $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 company executed a Paycheck Protection Program Loan of $131,600 on February 16, 2021, with $131,600 in principal and $1,262 in interest forgiven by the SBA on February 1, 2022[81][83]. - The company executed a private placement in December 2021, raising $1,340,000 from the sale of 670,000 shares of class A common stock at $2.00 per share[114]. - The company registered 1,500,000 shares of Class A common stock under its 2022 Omnibus Incentive Plan on July 27, 2023[212].