Yoshiharu (US:YOSH)2025-05-15 18:27PART I FINANCIAL INFORMATION Unaudited Consolidated Financial Statements Unaudited Q1 2025 financials show revenue growth to $3.5 million, a wider net loss of $1.42 million, and a balance sheet strengthened by financing activities Q1 2025 vs Q1 2024 Key Financials | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Revenue | $3,511,789 | $2,811,609 | | Net Loss | $(1,424,886) | $(876,205) | | Basic and Diluted EPS | $(0.96) | $(0.65) | | Cash at End of Period | $3,396,908 | $1,355,738 | - Stockholders' equity improved significantly, from $255,399 at year-end 2024 to a positive $4,144,513 at March 31, 2025, primarily due to the issuance of common stock and warrants1520 Consolidated Balance Sheets The balance sheet reflects a significant increase in cash and stockholders' equity driven by recent financing activities Consolidated Balance Sheet Highlights (as of March 31, 2025 vs. December 31, 2024) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash | $3,396,908 | $1,241,036 | | Total Assets | $18,986,340 | $17,573,266 | | Liabilities & Equity | | | | Total Liabilities | $14,841,827 | $17,317,867 | | Total Stockholders' Equity | $4,144,513 | $255,399 | - The significant increase in cash and stockholders' equity was driven by financing activities during the quarter, while total liabilities decreased mainly due to the repayment of a $1.2 million convertible note1554 Consolidated Statements of Operations The company's revenue grew 24.9% year-over-year, though the net loss widened due to increased operating and administrative expenses Statement of Operations Summary (Three Months Ended March 31) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Total Revenue | $3,511,789 | $2,811,609 | | Total Restaurant Operating Expenses | $3,417,288 | $2,587,037 | | Loss from Operations | $(1,273,597) | $(771,887) | | Net Loss | $(1,424,886) | $(876,205) | | Basic and Diluted EPS | $(0.96) | $(0.65) | - Revenue increased by 24.9% year-over-year, but the net loss widened by 62.6% due to higher restaurant operating costs and a significant increase in general and administrative expenses18 Consolidated Statements of Stockholders' Equity Stockholders' equity substantially increased due to the issuance of common stock and warrants, offsetting the quarterly net loss - Stockholders' equity increased from $255,399 at the beginning of the period to $4,144,513 at March 31, 202520 - The increase was primarily driven by the issuance of Class A Common Stock for $714,000 and warrants for $4,600,000, which was offset by the net loss of $1,424,886 for the quarter20 Consolidated Statements of Cash Flows Financing activities generated over $3 million in cash, leading to a net cash increase despite operational cash use Cash Flow Summary (Three Months Ended March 31) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(863,204) | $(373,196) | | Net cash used in investing activities | $(32,622) | $(356,642) | | Net cash provided by financing activities | $3,051,698 | $623,250 | | Net increase (decrease) in cash | $2,155,872 | $(106,588) | - Cash provided by financing activities of $3.05 million was primarily from $4.61 million in proceeds from the sale of common shares and warrants, offset by repayments of debt, including a $1.2 million convertible note23 Notes to Consolidated Financial Statements Key notes detail a reverse stock split, significant financing activities, debt repayment, and available tax loss carryforwards - A 1-for-10 reverse stock split of Class A and Class B common stock was effective on November 27, 202328 - In March 2025, the company engaged in multiple financing activities, including private placements of common stock for $714,000 and sales of warrants for over $4.5 million in cash and debt conversion135138139 - The company repaid a $1.2 million convertible note issued to a related party on March 10, 2025106109 - As of March 31, 2025, the company had approximately $11 million in federal net operating loss carryforwards available to offset future taxable income116 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q1 2025 performance, highlighting revenue growth from acquisitions, a wider net loss, and successful capital raising efforts to ensure liquidity Q1 2025 vs Q1 2024 Performance | Line Item | Q1 2025 | Q1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | $3,511,789 | $2,811,609 | 24.9% | | Net restaurant operating income | $94,501 | $224,572 | -57.9% | | Net loss | $(1,424,886) | $(876,205) | 62.6% | - The company regained compliance with Nasdaq's minimum stockholders' equity requirement on March 27, 2025, following significant capital raising activities187 - Growth strategies include pursuing new restaurant development with a target of over 100% annual unit growth and initiating franchise sales in 2025156157 Overview and Growth Strategies The company outlines its strategy for aggressive unit growth through new restaurant development and the initiation of franchising - As of March 31, 2025, the company owns and operates 15 restaurants, with an additional 2 under development or acquisition152 - Key growth strategies include pursuing new restaurant development with a target of over 100% annual unit growth, increasing profitability, heightening brand awareness, and initiating franchise sales in 2025156157158 Results of Operations Revenue grew 24.9% driven by acquisitions, but profitability was impacted by operating and G&A cost increases - Revenue increased by 24.9% to $3.5 million in Q1 2025, primarily driven by the acquisition of three restaurants in Las Vegas171 - Food, beverage, and supplies costs increased by 41.6% YoY, and rent and utilities increased by 74.8%, outpacing revenue growth171172174 - General and administrative expenses rose by 37.5% ($0.4 million), mainly due to a $0.3 million increase in professional fees associated with capital raising activities177 Liquidity and Capital Resources The company secured its Nasdaq listing and improved liquidity through significant capital raises via stock and warrant sales - The company successfully addressed a Nasdaq delisting notice by raising capital and regaining compliance with the $2.5 million minimum stockholders' equity rule on March 27, 2025181187 - In March 2025, the company raised $714,000 through private placements of common stock and $1.2 million from the sale of warrants184185 - Subsequent to the quarter's end, in April 2025, the company raised an additional $2.0 million through the sale of 800,000 warrants188189 Contractual Obligations as of March 31, 2025 | Obligation Type | Total | 2025 (remaining) | 2026-2027 | 2028-2029 | Thereafter | | :--- | :--- | :--- | :--- | :--- | :--- | | Capital lease payments | $9,239,390 | $1,027,605 | $2,706,223 | $2,370,749 | $3,134,813 | | Bank note payables | $2,785,384 | $1,224,104 | $1,060,900 | $500,380 | - | | EIDL loan payables | $412,639 | $8,232 | $23,115 | $24,912 | $356,380 | | Total | $12,440,745 | $2,263,273 | $3,790,238 | $2,896,041 | $3,491,193 | Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, the company is exempt from providing market risk disclosures under this item - As a smaller reporting company, Yoshiharu Global Co. is not required to provide information under this item205 Controls and Procedures Management concluded that disclosure controls were ineffective due to material weaknesses related to inadequate accounting resources - Management concluded that disclosure controls and procedures were ineffective as of March 31, 2025206 - Material weaknesses were identified related to inadequate accounting resources and a lack of segregation of duties due to the small size of the accounting staff207 - To mitigate risks, the company relies on direct management oversight and external professionals, with plans to hire more employees as it grows208 PART II OTHER INFORMATION Legal Proceedings The company reports no current involvement in any material pending legal proceedings - The company and its subsidiaries are not currently involved in any material pending legal proceedings213 Unregistered Sales of Equity Securities and Use of Proceeds The company indicates no reportable unregistered sales of equity securities during the period - The company reported no unregistered sales of equity securities or use of proceeds for the period under this item214 Exhibits This section lists filed exhibits, including a key securities purchase agreement amendment and executive certifications - Exhibits filed with the report include an amendment to the Securities Purchase Agreement with Alumni Capital LP, dated April 18, 2024219 - Certifications by the CEO (James Chae) and CFO (Soojae Ryan Cho) pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act are included as exhibits219