GEN Restaurant (GENK) - 2023 Q4 - Annual Report

Preliminary Information This section provides essential introductory details, including forward-looking statement disclaimers and the company's post-IPO organizational structure Forward-Looking Statements This section highlights that the Annual Report on Form 10-K contains forward-looking statements subject to substantial risks and uncertainties, including the impact of the COVID-19 pandemic, ability to expand, macroeconomic conditions, competition, and labor costs - The report contains forward-looking statements, which are not guarantees of future performance and are subject to various risks and uncertainties[9][10][12] - Key risks include the impact of the COVID-19 pandemic, ability to maintain comparable restaurant sales and expand, macroeconomic conditions, competition, reliance on vendors, food safety concerns, minimum wage increases, IT system failures, loss of key management, and governmental regulations[11] General Information This section clarifies the organizational structure and definitions of entities within GEN Restaurant Group, Inc. following its IPO, consolidating GEN LLC's entities as subsidiaries - GEN Inc. was incorporated on October 28, 2021, and became the managing member of GEN LLC following its IPO, consolidating GEN LLC's entities as subsidiaries[15][17] - The Reorganization involved amending GEN Inc.'s charter for Class A and Class B common stock, selling Class A common stock in the IPO, amending the GEN LLC agreement, and entering into a Tax Receivable Agreement and Registration Rights Agreement[17] PART I This part covers the company's business operations, risk factors, legal proceedings, property details, and cybersecurity measures Item 1. Business GEN Restaurant Group, Inc. is a leading Asian casual dining concept specializing in Korean and Korean-American food, operating 37 company-owned restaurants across seven states as of December 31, 2023 Company Overview This section provides a general introduction to the company's business model and market position Our Strengths This section highlights the company's core competitive advantages and operational efficiencies Our Growth Strategies This section outlines the company's plans for expansion, including new restaurant openings and sales growth initiatives Restaurant Management This section describes the operational structure and management practices within the company's restaurants Our Suppliers This section details the company's supply chain relationships and key vendor partnerships Management Information and Systems This section covers the information technology infrastructure and systems supporting the company's operations Our Industry This section provides an overview of the broader restaurant industry landscape and market trends Competition This section discusses the competitive environment and the company's position relative to its rivals Human Capital Resources This section addresses the company's workforce, employment practices, and human resource management Environmental Matters This section outlines the company's considerations and compliance related to environmental regulations Government Regulation and Compliance This section details the regulatory framework and compliance requirements affecting the company's operations Intellectual Property This section describes the company's intellectual property assets and their protection Corporate Information This section provides general corporate details and organizational structure information Information About our Executive Officers This section presents biographical and professional information about the company's executive leadership team Available Information This section specifies where public information about the company can be accessed by investors - GEN Restaurant Group is one of the largest Asian casual dining restaurant concepts in the U.S., offering traditional Korean and Korean-American food with a 'cook-it-yourself' model[19] - Growth strategies include opening 7-8 new locations in 2024 and 10-12 annually from 2025, targeting average Net Build-Out Costs of less than $3.0 million and AUVs of $4.0-$5.0 million[25][26] - The company leverages an efficient 'cook-it-yourself' business model, in-house design and fabrication of ventilation systems, and a strong supplier network (including Sysco, U.S. Foods, and related parties like Pacific Global and Wise Universal)[22][28][31][32] Restaurant Operations Overview (as of Dec 31, 2023) | Metric | Value | | :----- | :---- | | Company-owned restaurants | 37 | | States of operation | CA, AZ, HI, NV, TX, NY, FL | | Average Payback Period (new restaurants) | ~1.7 years | | Lunch Price Range (as of Dec 31, 2023) | $19.95 - $27.95 | | Dinner Price Range (as of Dec 31, 2023) | $28.99 - $37.95 | Item 1A. Risk Factors This section outlines significant risks that could materially affect GEN Restaurant Group's business, financial condition, and results of operations, including inflationary pressures, dependence on expansion, intense competition, supply chain vulnerabilities, and the complexities of being a public company Risk Factor Summary This section provides a high-level overview of the most critical risks facing the company's business and financial performance Risks Related to Our Growth Strategy and Restaurant Expansion This section details the challenges and uncertainties associated with the company's plans for expanding its restaurant footprint and market presence Risks Related to Our Relationships and Other Key Suppliers This section addresses the potential vulnerabilities arising from the company's reliance on specific vendors and supply chain partners Other Commercial, Operational, Financial and Regulatory Risks This section covers a broad range of risks impacting the company's day-to-day operations, financial stability, and compliance with various regulations Risks Related to Tax Matters This section discusses the potential financial and operational impacts stemming from the company's tax structure and related agreements Risks Related to Ownership of Our Class A Common Stock This section outlines the specific risks that investors face concerning the ownership and trading of the company's Class A common stock General Risk Factors This section encompasses overarching risks that could broadly affect the company's business, financial condition, and future prospects - The company faces ongoing inflationary conditions for food, labor, construction, and utilities, which may not be fully offset by price increases or operational improvements, potentially impacting revenues and results[54][56][57] - Long-term success is highly dependent on the ability to identify suitable sites and expand operations, with new markets presenting increased risks due to unfamiliarity and potential consumer unfamiliarity with the concept[54][60][64] - Significant reliance on certain vendors and suppliers (e.g., Fast Fabrications, U.S. Foods, Pacific Global, Wise Universal) poses risks of supply shortages, increased costs, or operational disruptions if these relationships are disrupted or performance is inadequate[79][80] - The company is subject to intense competition in the restaurant industry, including from national chains and local establishments, and faces risks from food safety concerns, changes in consumer preferences, and negative publicity[85][92][106] - GEN Inc. is a holding company dependent on distributions from GEN LLC to pay taxes and obligations under the Tax Receivable Agreement (TRA), which are expected to be substantial and could exceed actual tax benefits in certain circumstances[143][145][149][150] - The company has identified two material weaknesses in internal control over financial reporting related to inadequate and untimely review of accounts and an inadequate design of IT controls, which could impair the ability to produce timely, accurate financial statements[187] Item 1B. Unresolved Staff Comments The company reported no unresolved staff comments from the SEC Item 1C. Cybersecurity GEN Restaurant Group is committed to protecting its information systems and data from cybersecurity threats through ongoing assessment, management, and oversight Cybersecurity Risk Management and Strategy This section outlines the company's approach to identifying, assessing, and mitigating cybersecurity risks to its information systems and data Governance This section describes the oversight structure for cybersecurity, including the roles of the Board of Directors and management in risk management - The company prioritizes cybersecurity, integrating policies and practices across operational departments to protect information systems and data[213][214] - Cybersecurity risk management includes technical safeguards (firewalls, anti-malware, access controls) and engaging outside consultants for vulnerability testing and incident response improvements[215][218] - The Board's Audit Committee has primary oversight of cybersecurity risks, with management (Co-CEOs, CFO, IT Manager) providing periodic briefings on threats, initiatives, incident reporting, and compliance[216][217][219] Item 2. Properties As of December 31, 2023, GEN Restaurant Group owned and operated 37 restaurants and leased its main office and substantially all restaurant properties - As of December 31, 2023, the company operated 37 restaurants and leased all its restaurant locations and main office[220] Restaurant Locations as of December 31, 2023 | State | Number of Locations | | :---- | :------------------ | | CA | 19 | | TX | 5 | | NV | 2 | | HI | 3 | | AZ | 2 | | NY | 1 | | FL | 1 | | Total | 37 | Item 3. Legal Proceedings The company is involved in various legal proceedings and claims arising in the ordinary course of business, which management believes will not have a material adverse effect on its financial position - The company is subject to various legal proceedings and claims in the ordinary course of business[221] - Management believes the ultimate resolution of current legal matters will not have a material adverse effect on the company's financial position or operations[221] Item 4. Mine Safety Disclosures This item is not applicable to the company PART II This part details market information, financial performance, liquidity, market risks, and internal controls Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities GEN Restaurant Group's Class A common stock trades on the NASDAQ under the symbol 'GENK', with approximately four shareholders of record as of February 5, 2024, and no anticipated cash dividends in the foreseeable future Dividend Policy This section outlines the company's approach to dividend payments and its strategy for retaining earnings - The company's Class A common stock trades on NASDAQ under the symbol 'GENK'[225] - As of February 5, 2024, there were approximately four shareholders of record[225] - The company has no present intention to pay cash dividends, planning to retain earnings for business development and expansion[226] Item 6. Reserved This item is reserved and contains no information Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides an overview of GEN Restaurant Group's financial condition and operational results for 2023 and 2022, highlighting revenue growth, decreased operating income due to higher expenses, and improved liquidity post-IPO Overview This section provides a high-level summary of the company's financial performance and operational highlights for the reporting period Business Trends This section discusses key industry and internal trends impacting the company's operations and financial outlook Recent Events Concerning Our Financial Position This section highlights significant recent occurrences that have influenced the company's financial standing and capital structure Key Performance Indicators This section presents the primary metrics used to evaluate the company's operational efficiency and financial health Net Income Margin This section defines and analyzes the company's net income as a percentage of its total revenue Adjusted EBITDA and Adjusted EBITDA Margin This section explains and provides a reconciliation of Adjusted EBITDA and its margin, key non-GAAP measures of operational performance Restaurant-Level Adjusted EBITDA and Restaurant-Level Adjusted EBITDA Margin This section details the profitability of individual restaurants, excluding corporate overhead and non-operating expenses Average Unit Volume This section defines and presents the average annual sales generated by the company's restaurants Comparable Restaurant Sales Change This section analyzes the year-over-year sales growth for restaurants open for a consistent period, indicating underlying business performance Number of Restaurant Openings This section reports the number of new restaurants opened during the reporting period, reflecting expansion efforts Revenue Per Square Foot This section provides a metric for sales efficiency, measuring revenue generated per square foot of restaurant space Components of Results of Operations This section breaks down the various revenue and expense categories that contribute to the company's overall financial results Results of Operations for the years ended December 31, 2023 and December 31, 2022 This section provides a detailed comparative analysis of the company's financial performance for the two most recent fiscal years Non-GAAP Financial Measures This section presents and reconciles financial measures not prepared in accordance with GAAP, offering additional insights into performance Adjusted EBITDA and Adjusted EBITDA Margin This section explains and provides a reconciliation of Adjusted EBITDA and its margin, key non-GAAP measures of operational performance Restaurant-Level Adjusted EBITDA and Restaurant-Level Adjusted EBITDA Margin This section details the profitability of individual restaurants, excluding corporate overhead and non-operating expenses Liquidity and Capital Resources This section assesses the company's ability to meet its short-term and long-term financial obligations and fund its operations and growth initiatives Summary of Cash Flows This section provides an overview of the cash generated and used by the company's operating, investing, and financing activities Contractual Obligations This section outlines the company's future payment commitments under various agreements, such as leases and debt obligations Off-Balance Sheet Arrangements This section discloses any financial arrangements that do not appear on the company's balance sheet but could impact its financial condition Critical Accounting Policies and Estimates This section describes the accounting policies that require significant judgment and estimation, which could materially affect reported financial results Operating and Finance Leases This section details the accounting treatment and significant estimates related to the company's lease agreements Impairment of Long-Lived Assets This section explains the company's policy and methodology for assessing and recognizing impairment losses on its long-term assets Emerging Growth Company Status This section discusses the implications of the company's status as an emerging growth company under the JOBS Act Recently Adopted Accounting Pronouncements This section outlines the impact of new accounting standards that the company has recently implemented - Revenue increased by 10.6% in 2023, primarily due to price increases and the opening of six new restaurants[265] - Cash and working capital significantly improved in 2023 due to $46.2 million net proceeds from the IPO. The company has a $20.0 million revolving line of credit with a zero balance as of December 31, 2023[285][235] - The company expects to pay approximately $99.6 million through 2037 under the Tax Receivable Agreement, representing 85% of realized tax benefits[290] Key Financial Highlights (Year Ended December 31) | Metric (in thousands) | 2023 | 2022 | Change (Amount) | Change (%) | | :-------------------- | :--- | :--- | :-------------- | :--------- | | Revenue | $181,007 | $163,729 | $17,278 | 10.6% | | Income from operations | $8,090 | $12,352 | $(4,262) | (34.5%) | | Net income | $11,434 | $11,732 | $(298) | (2.5%) | | Net income attributable to GEN Restaurant Group, Inc. | $8,406 | $10,281 | $(1,875) | (18.2%) | | Food cost (% of Revenue) | 32.2% | 33.2% | -1.0% | - | | Payroll and benefits (% of Revenue) | 31.4% | 29.8% | 1.6% | - | | Pre-opening Costs | $3,680 | $1,455 | $2,225 | 152.9% | Key Performance Indicators (Year Ended December 31) | Indicator | 2023 | 2022 | | :-------------------------- | :----- | :----- | | Average Unit Volume (AUV) | $5,875k | $5,900k | | Comparable restaurant sales change (%) | 0.6% | N/A | | Number of restaurants (End of period) | 37 | 31 | | Revenue per square foot | $862 | $890 | Adjusted EBITDA and Margin (Year Ended December 31) | Metric (in thousands) | 2023 | 2022 | | :-------------------- | :--- | :--- | | Adjusted EBITDA | $18,848 | $23,958 | | Adjusted EBITDA Margin | 10.4% | 14.6% | Restaurant-Level Adjusted EBITDA and Margin (Year Ended December 31) | Metric (in thousands) | 2023 | 2022 | | :-------------------- | :--- | :--- | | Restaurant-Level Adjusted EBITDA | $33,479 | $33,638 | | Restaurant-Level Adjusted EBITDA Margin | 18.5% | 20.5% | Item 7A. Quantitative and Qualitative Disclosures About Market Risk The company is exposed to market risks primarily related to commodity and food prices, inflation, and interest rates, which could impact financial results despite mitigation efforts Commodity and Food Price Risks This section discusses the company's exposure to fluctuations in the cost of food and other commodities essential for its operations Inflation Risk This section addresses the potential impact of rising costs across various operational inputs, including labor, utilities, and supplies Interest Rate Risk This section outlines the company's exposure to changes in interest rates, particularly concerning its variable-rate debt obligations - Profitability is sensitive to changes in food, beverage, labor, and energy costs, which are influenced by market conditions, supply disruptions, and government regulations[316][317] - The company attempts to offset increased costs through menu price increases and operational adjustments, but competitive conditions or macroeconomic factors may limit this flexibility[316][318] - The $20.0 million revolving line of credit with Pacific City Bank, bearing a variable interest rate (Wall Street Journal Prime Rate plus 0.25%), exposes the company to interest rate risk[319] Item 8. Financial Statements and Supplementary Data This section refers to the comprehensive financial statements and supplementary data, which are detailed starting on page F-1 of the report Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure The company reported no changes in or disagreements with accountants on accounting and financial disclosure matters Item 9A. Controls and Procedures As of December 31, 2023, the company's disclosure controls and procedures were deemed ineffective due to two material weaknesses in internal control over financial reporting, for which management is implementing remediation plans Evaluation of Disclosure Controls and Procedures This section presents management's assessment of the effectiveness of the company's disclosure controls and procedures Changes in Internal Control over Financial Reporting This section describes any material changes in the company's internal control over financial reporting during the reporting period Management's Report on Internal Control over Financial Reporting This section contains management's assessment of the effectiveness of the company's internal control over financial reporting - As of December 31, 2023, disclosure controls and procedures were not effective due to material weaknesses in internal control over financial reporting[323] - Two material weaknesses identified: (a) lack of adequate and timely review of accounts and reconciliations, and (b) inadequate design of IT controls and inappropriate access due to open architecture and lack of segregation of duties[323] - Management is developing and implementing remediation plans, including operational improvements and a new accounting system, to address these weaknesses[324] Item 9B. Other Information The company reported no other information for this item Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections This item is not applicable to the company PART III This part provides information on directors, executive compensation, security ownership, related transactions, and accountant fees Item 10. Directors, Executive Officers and Corporate Governance This section incorporates by reference information regarding the company's directors, executive officers, and corporate governance from its 2024 annual meeting proxy statement, including the adoption of a Code of Business Conduct and Ethics Code of ethics This section discusses the company's ethical guidelines and standards of conduct for its officers and employees Audit Committee This section describes the responsibilities and composition of the Audit Committee, including its role in financial reporting and risk oversight - Information on directors, executive officers, and corporate governance is incorporated by reference from the 2024 proxy statement[329] - The company has adopted a Code of Business Conduct and Ethics for its Chief Executive Officers and Senior Finance Officers, available on its investor relations website[330] - The Audit Committee is responsible for the oversight of cybersecurity risks[216] Item 11. Executive Compensation Information on executive compensation is incorporated by reference from the company's 2024 annual meeting proxy statement - Executive compensation details are incorporated by reference from the 2024 proxy statement[332] Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Information regarding security ownership of certain beneficial owners and management is incorporated by reference from the company's 2024 annual meeting proxy statement - Security ownership information is incorporated by reference from the 2024 proxy statement[334] Item 13. Certain Relationships and Related Transactions, and Director Independence Information on certain relationships, related transactions, and director independence is incorporated by reference from the company's 2024 annual meeting proxy statement - Details on related person transactions and director independence are incorporated by reference from the 2024 proxy statement[335] Item 14. Principal Accountant Fees and Services Information regarding principal accountant fees and services is incorporated by reference from the company's 2024 annual meeting proxy statement - Information on principal accountant fees and services is incorporated by reference from the 2024 proxy statement[336] PART IV This part lists all exhibits and financial statement schedules, including certifications Item 15. Exhibits and Financial Statement Schedules This section lists all exhibits and financial statement schedules filed as part of the Form 10-K, including organizational documents, agreements, and certifications - The section provides a comprehensive list of exhibits, including the Amended and Restated Certificate of Incorporation, Bylaws, Tax Receivable Agreement, Registration Rights Agreement, and executive employment agreements[339] - It also includes certifications from the Principal Executive Officer and Principal Financial Officer pursuant to the Sarbanes-Oxley Act[339][344] Item 16. Form 10-K Summary The company reported no summary for Form 10-K in this section SIGNATURES This section contains the official signatures of the registrant's authorized officers and directors Signatures This section contains the signatures of the registrant's authorized officers and directors, including the Chief Financial Officer and Co-Chief Executive Officers, affirming the filing of the Annual Report on Form 10-K - The report is signed by the Chief Financial Officer, Thomas V. Croal, and Co-Chief Executive Officers, David Kim and Jae Chang, along with other directors[348][351] INDEX TO CONSOLIDATED FINANCIAL STATEMENTS This section provides a comprehensive index to the company's audited consolidated financial statements and related notes Index to Consolidated Financial Statements This section provides an index to the consolidated financial statements, including the Report of Independent Registered Public Accounting Firm, Consolidated Balance Sheets, Income Statements, Statements of Changes in Permanent Equity (Deficit), Statements of Cash Flows, and detailed Notes to Consolidated Financial Statements - The index lists the audited consolidated financial statements and related notes for the years ended December 31, 2023 and 2022[353] Report of Independent Registered Public Accounting Firm Marcum LLP issued an unqualified opinion on GEN Restaurant Group, Inc.'s consolidated financial statements for 2023 and 2022, affirming their fair presentation in conformity with GAAP - Marcum LLP provided an unqualified opinion on the consolidated financial statements for 2023 and 2022, affirming their fair presentation in accordance with GAAP[357] - The audit was conducted in accordance with PCAOB standards, but an audit of internal control over financial reporting was not performed[359] Consolidated Balance Sheets The consolidated balance sheets show the financial position of GEN Restaurant Group, Inc. as of December 31, 2023, and 2022, reflecting a significant increase in cash and total assets, and a shift to positive permanent equity post-IPO - The company's cash and cash equivalents increased significantly from $11.2 million in 2022 to $32.6 million in 2023, and total assets grew from $138.9 million to $183.9 million[364] - Total permanent equity shifted from a deficit of $(6.8) million in 2022 to a positive $36.0 million in 2023, reflecting the impact of the IPO[364] Consolidated Balance Sheet Highlights (in thousands) | Metric | Dec 31, 2023 | Dec 31, 2022 | | :-------------------------------- | :----------- | :----------- | | Cash and cash equivalents | $32,631 | $11,195 | | Total current assets | $36,818 | $14,731 | | Property and equipment, net | $33,907 | $21,283 | | Operating lease assets | $99,255 | $90,713 | | Total assets | $183,870 | $138,878 | | Total current liabilities | $31,303 | $37,266 | | Total liabilities | $146,352 | $144,139 | | Total permanent equity (deficit) | $36,018 | $(6,761) | Consolidated Income Statements The consolidated income statements for 2023 and 2022 show increased revenue but decreased net income attributable to GEN Restaurant Group, Inc. in 2023, primarily due to higher operating expenses despite reduced related party fees - Revenue increased by $17.3 million (10.6%) from 2022 to 2023, reaching $181.0 million[265][367] - Income from operations decreased by 34.5% to $8.1 million in 2023, primarily due to increased payroll and benefits, occupancy, operating, and pre-opening costs, despite reduced related party fees[264][267][268][269][271][272][273][274][367] Consolidated Income Statement Highlights (in thousands) | Metric | 2023 | 2022 | | :------------------------------------------ | :----- | :----- | | Revenue | $181,007 | $163,729 | | Total restaurant operating expenses | $156,395 | $136,121 | | Income from operations | $8,090 | $12,352 | | Net income | $11,434 | $11,732 | | Net income attributable to GEN Restaurant Group, Inc. | $8,406 | $10,281 | | Basic and diluted EPS (Class A common stock) | $0.08 | — | Consolidated Statements of Changes in Permanent Equity (deficit) The consolidated statements of changes in permanent equity reflect a transition from a members' equity deficit in 2022 to positive total permanent equity in 2023, primarily driven by the IPO and related organizational transactions - The IPO and related organizational transactions in 2023 significantly impacted equity, converting a members' equity deficit to positive permanent equity and establishing Class A and Class B common stock[374] - Net income prior to organizational transactions contributed $8.1 million, and member distributions totaled $26.5 million in 2023[374] Changes in Permanent Equity (in thousands) | Metric | Dec 31, 2022 | Dec 31, 2023 | | :-------------------------------- | :----------- | :----------- | | Members' Equity (Deficit) | $(10,011) | $0 | | Non-Controlling Interest | $3,250 | $28,552 | | Total Permanent Equity (Deficit) | $(6,761) | $36,018 | | Class A Common Stock (shares) | — | 4,140,000 | | Class B Common Stock (shares) | — | 28,141,566 | | Additional paid-in capital | — | $7,112 | | Retained Earnings | — | $322 | Consolidated Statements of Cash Flows The consolidated statements of cash flows show stable operating cash flow, a shift to net cash outflow from investing activities due to increased property purchases, and a significant net cash inflow from financing activities driven by IPO proceeds - Net cash provided by operating activities was $22.2 million in 2023, slightly down from $23.4 million in 2022[296][298][376] - Investing activities resulted in a net cash outflow of $6.3 million in 2023, primarily due to $17.2 million in property and equipment purchases, compared to a $2.6 million inflow in 2022[299][300][376] - Financing activities provided $5.6 million in 2023, driven by $46.2 million from the IPO, offsetting $26.5 million in member distributions and $14.1 million in loan payments[301][376] Consolidated Cash Flow Summary (in thousands) | Cash Flow Activity | 2023 | 2022 | | :------------------------------------ | :----- | :----- | | Net cash provided by operating activities | $22,164 | $23,399 | | Net cash (used in) provided by investing activities | $(6,307) | $2,571 | | Net cash provided by (used in) financing activities | $5,579 | $(24,665) | | Net increase in cash and cash equivalents | $21,436 | $1,305 | | Cash and cash equivalents at end of year | $32,631 | $11,195 | Notes to Consolidated Financial Statements The notes provide detailed information on the company's organization, accounting policies, financial instruments, related party transactions, and commitments, including its 'Up-C' structure, supplier concentrations, and substantial Tax Receivable Agreement obligations (1) Organization and Description of Business This section details the company's legal structure, operational activities, and the nature of its business (2) Basis of Presentation and Summary of Significant Accounting Policies This section outlines the fundamental principles and key accounting policies used in preparing the consolidated financial statements (3) Capital Contribution Receivable This section describes any amounts due to the company from capital contributions, typically from equity holders (4) Fair Value of Financial Instruments This section provides information on the valuation methods and fair value measurements of the company's financial assets and liabilities (5) Notes Receivable from Related Party This section details any outstanding loans or receivables from parties with a significant relationship to the company (6) Property and Equipment, Net This section provides a breakdown of the company's tangible long-lived assets, including their cost, accumulated depreciation, and net book value (7) Equity Method Investment This section describes the company's investments in entities where it holds significant influence but not control, accounted for using the equity method (8) Line of Credit This section details the terms and conditions of the company's revolving credit facilities, including available amounts and outstanding balances (9) Notes Payable This section provides information on the company's various debt obligations, including principal amounts, interest rates, and maturity dates (10) Related Party Notes Payable This section details any debt obligations owed by the company to related parties, including terms and balances (11) Leases This section provides comprehensive disclosures on the company's operating and finance lease arrangements, including lease liabilities and right-of-use assets (12) Commitments and Contingencies This section outlines the company's future obligations and potential liabilities arising from various agreements, legal matters, and other events (13) Income Taxes This section details the company's income tax expense, deferred tax assets and liabilities, and reconciliation of the statutory to effective tax rate (14) Non-Controlling Interest This section describes the portion of equity in a subsidiary not attributable, directly or indirectly, to the parent company (15) Other Related-Party Transactions This section discloses additional transactions and arrangements between the company and its related parties (16) Net Income per Share This section presents the calculation of basic and diluted net income per share for the company's common stock (17) Stock-Based Compensation This section details the accounting for equity awards granted to employees and directors, including expense recognition and valuation methodologies (18) Subsequent Events This section discloses significant events that occurred after the balance sheet date but before the financial statements were issued - GEN Inc. operates under an 'Up-C' structure, where it is a holding company and managing member of GEN LLC, consolidating its financial results despite a minority economic interest[384][387][392] - The company relies on a concentrated supplier network, with U.S. Foods accounting for 36.0% of food costs in 2023, and related parties (Pacific Global, Wise Universal) also being significant suppliers[409][410][411][412] - The company has substantial operating lease liabilities, totaling $115.0 million as of December 31, 2023, with additional commitments of $44.5 million for new restaurants expected to commence in fiscal year 2024[475][477] - Post-IPO, the company recognized $1.5 million in stock-based compensation for RSUs granted to employees and directors, with $13.1 million in unrecognized compensation to be expensed over five years[518][520] - Subsequent events include opening two new restaurants in Dallas, TX and Seattle, WA in February 2024, entering new lease agreements, and acquiring the remaining 50% interest in GKBH Restaurant LLC for $6 million[524][525][526]