Financial Performance - Total revenue for the nine months ended September 30, 2024, was $9,152,530, a 36.2% increase from $6,714,429 in the same period of 2023[20] - Net loss for the nine months ended September 30, 2024, was $(3,203,137), compared to a net loss of $(3,048,961) for the same period in 2023[20] - Loss from operations for the nine months ended September 30, 2024, was $(2,768,309), slightly improved from $(2,856,710) in the same period of 2023[20] - Basic and diluted loss per share for the nine months ended September 30, 2024, was $(2.39), compared to $(2.29) for the same period in 2023[20] - EBITDA for the nine months ended September 30, 2024, was $(2,132,849), an improvement from $(2,436,628) in the prior year[210] - Adjusted EBITDA for the same period was $(1,937,234), compared to $(2,014,476) in 2023, indicating a reduction in losses[210] Assets and Liabilities - Total current assets increased to $1,837,923 as of September 30, 2024, from $1,535,349 as of December 31, 2023, representing a 19.7% growth[17] - Total liabilities rose to $17,711,882 as of September 30, 2024, compared to $10,365,885 as of December 31, 2023, indicating a 70.5% increase[17] - Total non-current assets reached $15,474,153 as of September 30, 2024, up from $11,484,015 as of December 31, 2023, marking a 35.0% increase[17] - Total stockholders' equity (deficit) as of September 30, 2024, was $(399,806), a decrease from $2,653,479 as of December 31, 2023[17] - Total stockholders' equity (deficit) as of September 30, 2024, was $(399,806), a decrease from $(9,349,370) as of September 30, 2023[23] Cash Flow - Cash provided by operating activities was $1,164,719 for the nine months ended September 30, 2024, compared to cash used of $3,311,317 in 2023[26] - Cash balance increased to $1,712,064 as of September 30, 2024, from $1,462,326 as of December 31, 2023, reflecting a 17.0% increase[17] - Cash at the end of the period for September 30, 2024, was $1,712,064, down from $2,155,057 at the end of September 30, 2023[26] Expenses - Restaurant operating expenses totaled $8,746,360 for the nine months ended September 30, 2024, compared to $6,568,160 for the same period in 2023, a 32.9% increase[20] - Depreciation expense increased to $596,701 for the nine months ended September 30, 2024, from $396,388 in 2023[26] - Operating lease expense for the nine months ended September 30, 2024, was $942,945, compared to $683,947 for the same period in 2023, indicating an increase of approximately 37.8%[141] - General and administrative expenses for the nine months ended September 30, 2024, were $2.95 million, an increase of $254 thousand or 9.4% compared to the same period in 2023, with a decrease in percentage of sales to 32.2%[200] Growth and Expansion - The company plans to open new ramen stores in Ontario and Menifee, California[29] - The Company operates 14 restaurant stores with an additional 3 under construction as of September 30, 2024, aiming for over 100% annual unit growth over the next three to five years[162][168] - Positive comparable restaurant sales growth has been achieved, with future growth expected through increased brand awareness and new menu offerings[170] - The Company plans to initiate franchise sales in 2025 to further expand its market presence[170] - Recent developments include the opening of a new restaurant in San Clemente, CA, increasing the total number of locations to 15[174] Financing Activities - The company acquired LV entities for $1,800,000 during the nine months ended September 30, 2024[26] - Proceeds from borrowings for the acquisition of LV entities amounted to $900,000[26] - The company executed a loan of $150,000 on September 13, 2023, for working capital, with a remaining balance of $122,705 as of September 30, 2024[93] - The company has a loan of $650,000 secured on January 30, 2024, with a balance of $650,000 as of September 30, 2024, indicating full utilization of the loan[101] - A loan of $900,000 was executed on June 4, 2024, for acquiring assets of three restaurants in Las Vegas, with a balance of $865,151 as of September 30, 2024[103] Stock and Securities - 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[38] - The Company entered into a Securities Purchase Agreement to sell up to $5,000,000 in Class A common stock, with shares sold at either 85% or 96% of the lowest trading price over the five days prior to closing[150] - The Company issued 34,846 additional shares of Class A common stock due to rounding up fractional shares from the reverse stock split[33] Management and Strategy - The management team is led by CEO James Chae, who founded the Company in 2016 and has extensive experience in financial and operational management[173] - The company has invested in infrastructure and personnel to drive higher profitability at both restaurant and corporate levels[171] - The Company has a disciplined growth strategy focused on new restaurant development and optimizing labor costs as the restaurant base matures[168][171] Tax and Compliance - Total current income tax provision for the nine months ended September 30, 2024, was $33,437, compared to $6,988 for the same period in 2023, representing a significant increase[130] - The company reported cumulative net operating loss carryforwards of approximately $10,052,000 for federal tax purposes as of September 30, 2024[135] - The company is in compliance with non-financial covenants imposed by the line of credit agreement[73]
Yoshiharu (YOSH) - 2024 Q3 - Quarterly Report