GEN Restaurant Group, Inc.

Previous wording

GEN Restaurant Group is an Asian casual dining restaurant concept that offers an extensive menu of traditional Korean and Korean-American food, including high-quality meats, poultry, and seafood, all at a superior value. Founded in 2011 by two Korean immigrants, since the opening of our first restaurant in September 2011 we have grown to 49 company-owned restaurants located in California, Arizona, Hawaii, Nevada, Texas, New York, New Jersey, Oregon, Washington, Florida and North Carolina. Our restaurants have modern décor, lively Korean pop music playing in the background and embedded grills in the center of each table. We believe we offer our customers a unique dining experience in which guests cook the majority of the food themselves, reducing the need for chefs and servers and providing a similar customer experience across the restaurants.

Current wording

GEN Restaurant Group is an Asian casual dining restaurant concept that offers an extensive menu of traditional Korean and Korean-American food, including high-quality meats, poultry, and seafood, all at a superior value. Founded in 2011 by two Korean immigrants, since the opening of our first restaurant in September 2011 we have grown to 52 company-owned restaurants located in California, Arizona, Hawaii, Nevada, Texas, New York, New Jersey, Oregon, Washington, Florida, North Carolina, and South Korea. Our restaurants have modern décor, lively Korean pop music playing in the background and embedded grills in the center of each table. We believe we offer our customers a unique dining experience in which guests cook the majority of the food themselves, reducing the need for chefs and servers and providing a similar customer experience across our restaurants.

Previous wording

We expect to continue growing our number of restaurants in the future. In 2022, our new restaurants generated average Payback Periods of approximately 1.9 years, which equates to an average ROI of over 50%. For the restaurants opened in 2023 and 2024, the average Payback Periods was 2.2 years, which equates to an average ROI of approximately 45%. Going forward we are targeting for our new restaurant units a Payback Period of less than 3 year, which equates to an ROI of 33% to 40%. Restaurants range in size from 4.7 thousand to 12 thousand square feet, and are typically located in high-activity commercial areas.

Current wording

We expect to continue growing our number of restaurants in the future. In 2022, our new restaurants generated average Payback Periods of approximately 1.9 years, which equates to an average ROI of over 50%. For the restaurants opened in 2024, the average Payback Periods was 2.3 years, which equates to an average ROI of approximately 45%. Going forward we are targeting for our new restaurant units a Payback Period of less than 3 year, which equates to an ROI of 33% to 40%. Restaurants range in size from 4.7 thousand to 12 thousand square feet and are typically located in high-activity commercial areas.

Previous wording

During the first quarter of 2025, we opened six restaurants in Orlando, FL, Edison, NJ, San Antonio, TX, Cary, NC and two in Austin, TX. In addition to the six restaurants opened in the first quarter of 2025, we have six restaurants under construction and expect to open a total of 12 to 13 locations in fiscal year 2025.

Current wording

During the first half of 2025, we opened seven restaurants in Orlando, FL, Edison, NJ, San Antonio, TX, Cary, NC and two in Austin, TX, and one in South Korea, plus two new restaurants in July located in Waco, TX and El Paso, TX, expanding total store count to 52. In addition we have seven restaurants under development which we expect to complete construction by the end of 2025.

Previous wording

On September 29, 2023, the Company entered into a $20 million line of credit with PCB bank. The line of credit matures on September 25, 2025 and bears interest at a variable rate per annum equal to 7.75% as of March 31, 2025. No amounts have been borrowed under the line of credit as of March 31, 2025.

Current wording

On September 29, 2023, the Company entered into a loan agreement for a $20.0 million line of credit with PCB Bank. The line of credit matures on September 25, 2025, and bears interest at a variable rate per annum equal to 7.75% as of June 30, 2025. No amounts are outstanding under the line of credit as of June 30, 2025.

Previous wording

In assessing the performance of our business, we consider a variety of financial and performance measures. The key measures for determining how our business is performing include Net Income Margin, Adjusted EBITDA, Adjusted EBITDA Margin, Restaurant-Level Adjusted EBITDA, Restaurant-Level Adjusted EBITDA Margin, Adjusted net income, Adjusted net income (loss) attributable to Class A common stock per share (“EPS”), Average Unit Volumes, comparable restaurant sales growth, the number of restaurant openings and revenue per square foot.

Current wording

In assessing the performance of our business, we consider a variety of financial and performance measures. The key measures for determining how our business is performing include Net Income Margin, Adjusted EBITDA, Adjusted EBITDA Margin, Restaurant-Level Adjusted EBITDA, Restaurant-Level Adjusted EBITDA Margin, Adjusted net (loss) income, Adjusted net (loss) income attributable to Class A common stock per share (“EPS”), Average Unit Volumes, comparable restaurant sales growth, the number of restaurant openings and revenue per square foot.

Previous wording

Adjusted EBITDA represents net income excluding interest expense, net, income taxes, depreciation and amortization, stock-based compensation, gain on extinguishment of debt, RRF grants, employee retention credits, litigation accruals, non-cash lease expense and non-cash lease expense included in pre-opening costs. Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by revenue. Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP measures intended as supplemental measures of our performance and are neither required by, nor presented in accordance with, GAAP. For a discussion of why we consider these measures to be useful and their material risks and limitations, see “Non-GAAP Financial Measures.”

Current wording

Adjusted EBITDA represents net income excluding interest expense, net, income taxes, depreciation and amortization, stock-based compensation, employee retention credits, litigation accruals, non-cash lease expense, non-cash lease expense related to pre-opening costs and gain on remeasurement of previously held interest. Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by revenue. Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP measures intended as supplemental measures of our performance and are neither required by, nor presented in accordance with, GAAP. For a discussion of why we consider these measures to be useful and their material risks and limitations, see “Non-GAAP Financial Measures.”

Previous wording

Restaurant-Level Adjusted EBITDA is Income from operations plus adjustments to add-back the following expenses: depreciation and amortization, pre-opening costs, general and administrative expenses, and non-cash lease expense. Non-cash items such as charges for asset impairments and asset disposals are not included in Restaurant-Level Adjusted EBITDA. Restaurant-Level Adjusted EBITDA Margin is the calculation of Restaurant-Level Adjusted EBITDA divided by revenue. For a discussion of why we consider these measures to be useful and their material risks and limitations, see “Non-GAAP Financial Measures.”

Current wording

Restaurant-Level Adjusted EBITDA is Income from operations plus adjustments to add-back the following expenses: depreciation and amortization, pre-opening costs, general and administrative expenses, and non-cash lease expense. Restaurant-Level Adjusted EBITDA Margin is the calculation of Restaurant-Level Adjusted EBITDA divided by revenue. For a discussion of why we consider these measures to be useful and their material risks and limitations, see “Non-GAAP Financial Measures.”

Previous wording

Adjusted Net Income and Adjusted net income per share represents net (loss) income, adjusted for pre-opening costs, gain on remeasurement of previously held interest and stock-based compensation, and the related tax impact of the adjustments, and (benefit) provision for income taxes. “Adjusted EPS” is Adjusted Net Income, converted to a per share amount.

Current wording

Adjusted Net Income represents net (loss) income, adjusted for pre-opening costs, gain on remeasurement of previously held interest and stock-based compensation, and the related tax impact of the adjustments. Adjusted net income per share is defined as adjusted net income divided by the weighted-average number of shares of Class A common stock outstanding for the applicable period.

Previous wording

Comparable restaurant sales change refers to the change in year-over-year sales for the comparable restaurant base. We include restaurants in the comparable restaurant base that have been in operation for at least 18 full months prior to the accounting period presented. Once a restaurant has been open 18 full months, it must have had continuous operations during both the current period and the prior year period being measured to remain a comparable restaurant. If operations were to be substantially impacted by unusual events that closed the location or significantly changed its capacity, that location is excluded from the comparable sales calculation until it has been operating continuously under normal conditions for both the current period and the prior year comparison period.

Current wording

Comparable restaurant sales change refers to the change in year-over-year sales for the comparable restaurant base. We include restaurants in the comparable restaurant base that have been in operation for at least 18 full months prior to the accounting period presented. Once a restaurant has been open 18 full months, it must have had continuous operations during both the current period and the prior year period being measured to remain a comparable restaurant. If operations were to be substantially impacted by unusual events that closed the location or significantly changed its capacity, that location is excluded from the comparable sales calculation until it has been operating continuously under normal conditions for both the current period and the prior year comparison period. Since opening new restaurants is expected to be a significant component of our sales change, comparable restaurant sales change is only one measure of how we evaluate our performance.

Previous wording

The number of restaurant openings reflects the number of restaurants opened during a particular reporting period. Before we open new restaurants, we incur pre-opening costs. New restaurants may not be profitable, and their sales performance may not follow historical patterns. The number and timing of restaurant openings has had, and is expected to continue to have, an impact on our results of operations. The following table shows the change in our restaurant base for the three months ended March 31, 2025 and March 31, 2024:

Current wording

The number of restaurant openings reflects the number of restaurants opened during a particular reporting period. Before we open new restaurants, we incur pre-opening costs. New restaurants may not be profitable, and their sales performance may not follow historical patterns. The number and timing of restaurant openings has had, and is expected to continue to have, an impact on our results of operations. The following table shows the change in our restaurant base for the three and six months ended June 30, 2025 and 2024:

Previous wording

Revenue per square foot means the restaurant sales for all restaurants opened a full 18 months before the end of the eighteen month period measured divided by the average square footage of such restaurants. This measurement allows management to assess the effectiveness of our approach to real estate selection and the overall performance of our restaurant base. The following table shows the revenue per square foot for the twelve month periods ended March 31, 2025 and March 31, 2024 :

Current wording

Revenue per square foot means the restaurant sales for all restaurants opened a full 18 months before the end of the 18 month period measured divided by the average square footage of such restaurants. This measurement allows management to assess the effectiveness of our approach to real estate selection and the overall performance of our restaurant base. The following table shows the revenue per square foot for the twelve months ended June 30, 2025 and June 30, 2024:

Previous wording

Occupancy expenses. Occupancy expenses include rent, common area maintenance and taxes for all restaurant locations, but exclude any related pre-opening costs.

Current wording

Occupancy expenses. Occupancy expenses include rent, common area maintenance, property insurance and property taxes for all restaurant locations, but exclude any related pre-opening costs.

Previous wording

Depreciation and amortization expenses. Depreciation and amortization expenses are periodic non-cash charges at our restaurants that consist of depreciation of fixed assets, including equipment, software and capitalized leasehold improvements. Depreciation is determined using the straight-line method over the assets’ estimated useful lives, ranging from five to ten years.

Current wording

Depreciation and amortization expenses. Depreciation and amortization expenses are periodic non-cash charges at our restaurants that consist of depreciation of fixed assets, including equipment, software and capitalized leasehold improvements. Depreciation is determined using the straight-line method over the assets’ estimated useful lives, ranging from five to seven years.

Previous wording

Employee retention credits. Employee retention credits include refundable credits recognized under the provisions of the CARES Act and extension thereof. During the three months ended March 31, 2025 and March 31, 2024, no amounts of of these credits were received and recorded, respectively.

Current wording

Employee retention credits. Employee retention credits include refundable credits recognized under the provisions of the CARES Act and extension thereof. During the three and six months ended June 30, 2025 and 2024, $313 thousand and $200 thousand of these credits were received and recorded in total for each period, respectively.

Previous wording

Gain on remeasurement of previously held interest. Consists of one-time legal accruals and other miscellaneous items such as the business acquisition of GKBH (a restaurant in Hawaii) during the first quarter of 2024.

Current wording

Gain on remeasurement of previously held interest. Consists of a one-time gain from the business acquisition of GKBH (a restaurant in Hawaii) during the first quarter of 2024.

Previous wording

Interest income (expense), net. Interest expense includes cash and non-cash charges related to our debt outstanding and finance lease obligations. Interest income reflects income earned on deposits and notes receivable.

Current wording

Interest income, net. Interest income, net reflects income earned on deposits, net of cash and non-cash charges related to our outstanding debt and finance lease obligations.

Previous wording

Revenues. Revenues were $57.3 million for the three months ended March 31, 2025, compared to $50.8 million for the three months ended March 31, 2024, an increase of $6.5 million, or 13.0%. This reflects revenue increases due to having 49 restaurants open in the three months ended March 31, 2025 compared to 39 restaurants open in the three months ended March 31, 2024.

Current wording

Revenues. Revenues were $55.0 million for the three months ended June 30, 2025, compared to $53.9 million for the three months ended June 30, 2024, an increase of $1.2 million, or 2.2%. This reflects revenue increases due to having 50 restaurants open in the three months ended June 30, 2025 compared to 40 restaurants open in the three months ended June 30, 2024.

Previous wording

Food costs. Food costs were $19.3 million for the three months ended March 31, 2025, compared to $17.0 million for the three months ended March 31, 2024, an increase of $2.3 million, or 13.5%. The increase in food costs reflects more restaurants in operation and inflationary cost increases. As a percentage of revenue, food costs increased from 33.4% to 33.6%.

Current wording

Food costs. Food costs were $18.6 million for the three months ended June 30, 2025, compared to $17.7 million for the three months ended June 30, 2024, an increase of $0.9 million, or 5.2%. The increase in food costs reflects more restaurants in operation and inflationary cost increases. As a percentage of revenue, food costs increased to 33.8% from 32.9%.

Previous wording

Payroll and benefits. Payroll and benefits costs were $18.2 million for the three months ended March 31, 2025, compared to $16.2 million for the three months ended March 31, 2024, an increase of $2.0 million, or 12.6%. The increase in payroll and benefits costs reflects the staffing needed to support higher customer volumes from new and existing restaurants as well as inflationary payroll increases. As a percentage of revenue, payroll and benefits costs slightly decreased from 31.8% to 31.7%.

Current wording

Payroll and benefits. Payroll and benefits costs were $16.6 million for the three months ended June 30, 2025, compared to $16.4 million for the three months ended June 30, 2024, an increase of $0.2 million, or 1.2%. The increase in payroll and benefits costs reflects the staffing needed to support higher customer volumes from new and existing restaurants as well as inflationary payroll increases. As a percentage of revenue, payroll and benefits costs slightly decreased from 30.4% to 30.1%.

Previous wording

Occupancy expenses. Occupancy expenses were $5.1 million for the three months ended March 31, 2025 compared to $4.3 million for the three months ended March 31, 2024, an increase of $0.8 million, or 18.6%. The increase in occupancy expenses reflects the addition of nine new locations. As a percentage of revenue, occupancy expenses were 8.9% in the three months ended March 31, 2025 compared to 8.5% in the three months ended March 31, 2024.

Current wording

Occupancy expenses. Occupancy expenses were $5.1 million for the three months ended June 30, 2025 compared to $4.4 million for the three months ended June 30, 2024, an increase of $0.7 million, or 16.7%. The increase in occupancy expenses reflects the addition of 10 new locations. As a percentage of revenue, occupancy expenses were 9.3% in the three months ended June 30, 2025 compared to 8.1% in the three months ended June 30, 2024.

Previous wording

Operating expenses. Operating expenses were $5.9 million for the three months ended March 31, 2025 compared to $5.1 million for the three months ended March 31, 2024, an increase of $0.8 million, or 16.2%, as expenses increased to support revenue growth and reflected inflationary cost increases. As a percentage of revenue, operating expenses were 10.3% in the three months ended March 31, 2025 and 10.0% in the three months ended March 31, 2024.

Current wording

Operating expenses. Operating expenses were $5.9 million for the three months ended June 30, 2025 compared to $5.4 million for the three months ended June 30, 2024, an increase of $0.5 million, or 10.2%, as expenses increased to support revenue growth and reflected inflationary cost increases. As a percentage of revenue, operating expenses were 10.7% in the three months ended June 30, 2025 and 9.9% in the three months ended June 30, 2024.

Previous wording

Depreciation and amortization expenses. Depreciation and amortization expenses were $2.0 million for the three months ended March 31, 2025 and $1.5 million for the three months ended March 31, 2024. As a percentage of revenue, depreciation and amortization expenses at the restaurant-level were 3.5% during the three months ended March 31, 2025 and 3.0% during the three months ended March 31, 2024, with the increase related to more stores in operation.

Current wording

Depreciation and amortization expenses. Depreciation and amortization expenses were $2.2 million for the three months ended June 30, 2025 and $1.7 million for the three months ended June 30, 2024. As a percentage of revenue, depreciation and amortization expenses at the restaurant-level were 4.0% during the three months ended June 30, 2025 and 3.2% during the three months ended June 30, 2024, with the increase related to more restaurants in operation.

Previous wording

General and administrative expenses. General and administrative expenses were $6.4 million for the three months ended March 31, 2025 compared to $4.7 million for the three months ended March 31, 2024, an increase of $1.7 million, or 36.3%. The increase is primarily due to additional marketing and personnel costs in expansion of stores in development. As a percentage of revenue, general and administrative expenses increased from 9.2% for the three months ended March 31, 2024 to 11.1% for the three months ended March 31, 2025.

Current wording

General and administrative expenses. General and administrative expenses were $6.4 million for the three months ended June 30, 2025 compared to $5.1 million for the three months ended June 30, 2024, an increase of $1.3 million, or 26.6%. The increase is primarily due to additional marketing and personnel costs for the expansion of restaurants in development. As a percentage of revenue, general and administrative expenses increased from 9.4% for the three months ended June 30, 2024 to 11.6% for the three months ended June 30, 2025.

Previous wording

Interest income, net. During the three months ended March 31, 2025, interest income, net was $60 thousand compared to $276 thousand during the three months ended March 31, 2024. The net interest income was primarily due to the interest income earned on the proceeds from the IPO transaction.

Current wording

Interest income, net. During the three months ended June 30, 2025, interest income, net was $67 thousand compared to $262 thousand during the three months ended June 30, 2024. The net interest income was primarily due to the interest income earned on the proceeds from the IPO transaction.

Previous wording

Pre-opening costs. Pre-opening costs were $2.6 million for the three months ended March 31, 2025 compared to $1.9 million for the three months ended March 31, 2024. This increase was due to opening six restaurants in the first quarter of 2025 compared to two restaurants opened in the first quarter of 2024.

Current wording

Pre-opening costs. Pre-opening costs were $4.7 million for the six months ended June 30, 2025 compared to $3.5 million for the six months ended June 30, 2024. This increase was due to more restaurants under development in 2025 than in 2024.

Previous wording

Adjusted EBITDA represents net income excluding interest (income) expense, income taxes, depreciation and amortization, and we also exclude non-recurring and certain other non-cash items, such as stock-based compensation expense, employee retention credits, litigation accruals, non-cash lease expense, non-cash lease expense related to pre-opening costs and gain on remeasurement of previously held interest. Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by revenue. We believe that Adjusted EBITDA and Adjusted EBITDA Margin provide useful information to management and investors regarding certain financial and business trends relating to our financial condition and operating results, as these measures depict normal recurring cash operating expenses essential to supporting the operations of our company. We expect Adjusted EBITDA to increase with the number of new restaurants we open and with comparable restaurant sales growth.

Current wording

Adjusted EBITDA represents net income excluding interest (income) expense, income taxes, depreciation and amortization, and also excludes non-recurring and certain other non-cash items, such as stock-based compensation expense, employee retention credits, litigation accruals, non-cash lease expense, non-cash lease expense related to pre-opening costs and gain on remeasurement of previously held interest. Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by revenue. We believe that Adjusted EBITDA and Adjusted EBITDA Margin provide useful information to management and investors regarding certain financial and business trends relating to our financial condition and operating results, as these measures reflect normal recurring cash operating expenses essential to supporting the operations of our company. We expect Adjusted EBITDA to increase with the number of new restaurants we open and with comparable restaurant sales growth.

Previous wording

The following table reconciles net income to Adjusted EBITDA for the three months ended March 31, 2025 and March 31, 2024.

Current wording

The following table reconciles net income to Adjusted EBITDA for the three and six months ended June 30, 2025 and June 30, 2024.

Previous wording

Stock-based compensation expense: During the first quarter of 2025 and 2024 we incurred expenses related to the granting of restricted stock units to employees.

Current wording

Stock-based compensation expense: During all periods presented, we incurred expenses related to the granting of restricted stock units to employees.

Previous wording

Non-cash lease expense related to pre-opening costs: Cost for stores in development in which the lease expense is greater than the contractual rent paid.

Current wording

Non-cash lease expense related to pre-opening costs: Cost for restaurants in development in which the lease expense is greater than the contractual rent paid.

Previous wording

We define Restaurant-Level Adjusted EBITDA as Income from operations plus adjustments to add-back the following expenses: depreciation and amortization, pre-opening costs, general and administrative expense, and non-cash lease expense. We define Restaurant-Level Adjusted EBITDA Margin as Restaurant-Level Adjusted EBITDA divided by revenue.

Current wording

We define Restaurant-Level Adjusted EBITDA as Income (loss) from operations plus adjustments to add-back the following expenses: depreciation and amortization, pre-opening costs, general and administrative expense, and non-cash lease expense. We define Restaurant-Level Adjusted EBITDA Margin as Restaurant-Level Adjusted EBITDA divided by revenue.

Previous wording

The following table reconciles Income from Operations to Restaurant-Level Adjusted EBITDA for the three months ended March 31, 2025 and March 31, 2024:

Current wording

The following table reconciles Income from Operations to Restaurant-Level Adjusted EBITDA for the three and six months ended June 30, 2025 and June 30, 2024:

Previous wording

The following table reconcile net (loss) income before taxes to Adjusted net income and Adjusted net income (loss) per share for the three months ended March 31, 2025 and 2024:

Current wording

The following table reconcile net (loss) income to Adjusted net income and Adjusted net income per share for the three and six months ended June 30, 2025 and 2024:

Previous wording

As of March 31, 2025 we had $15.4 million of cash and ($13.0) million of working capital, which is calculated by subtracting current liabilities from current assets, compared with $23.7 million in cash and ($7.2) million of working capital as of December 31, 2024. On June 30, 2023, we completed the IPO of 4,140,000 shares of Class A common stock. The public offering prices of the shares sold in the IPO was $12.00 per share, resulting in aggregate net proceeds to us of approximately $46.2 million after deducting the underwriting discounts and commission and offering expenses payable by us.

Current wording

As of June 30, 2025 we had $9.6 million of cash and ($21.1) million of working capital deficit, which is calculated by subtracting current liabilities from current assets, compared with $23.7 million in cash and ($7.2) million of working capital deficit as of December 31, 2024. On June 30, 2023, we completed the IPO of 4,140,000 shares of Class A common stock. The public offering price per share sold in the IPO was $12.00 per share, resulting in aggregate net proceeds of approximately $46.2 million after deducting the underwriting discounts and commission and offering expenses payable.

Previous wording

Our primary uses of cash are for operational expenditures and capital investments, including new restaurants, costs incurred for restaurant remodels and restaurant equipment and fixtures. During the first quarter of 2025, we opened six new restaurants which were all self-funded. There is no guarantee that if we need to raise any additional capital that we will be able to do so.

Current wording

Our primary uses of cash are for operational expenditures and capital investments, including new restaurants, costs incurred for restaurant remodels and restaurant equipment and fixtures. During the first half of 2025, we opened seven new restaurants which were all self-funded. There is no guarantee that if we need to raise any additional capital that we will be able to do so.

Previous wording

Upon the IPO transaction, GEN Inc. became a holding company with no operations of its own. Accordingly, GEN Inc. will be dependent on distributions from GEN LLC to pay its taxes, its obligations under the Tax Receivable Agreement and other expenses.

Current wording

Upon the IPO transaction, GEN Inc. became a holding company with no operations of its own. Accordingly, GEN Inc. remains dependent on distributions from GEN LLC to pay its taxes, its obligations under the Tax Receivable Agreement and other expenses.

Previous wording

In connection with the IPO and related transactions, certain members of GEN LLC received the right to receive future payments pursuant to the Tax Receivable Agreement. The amount payable under the Tax Receivable Agreement will be based on an annual calculation of the reduction in our U.S. federal, state and local taxes resulting from the utilization of certain tax benefits resulting from sales and exchanges by certain members of GEN LLC. We expect that payments that we may be required to make under the Tax Receivable Agreement may be substantial. Assuming no material changes in the relevant tax law and that we earn sufficient taxable income to realize all tax benefits that are subject to the Tax Receivable Agreement, we expect that the reduction in tax payments for us associated with the federal, state and local tax benefits described above would aggregate to approximately $117.2 million through 2037. Under such scenario we would be required to pay certain members of GEN LLC 85% of such amount, or $99.6 million through 2037.

Current wording

In connection with the IPO and related transactions, certain members of GEN LLC received the right to receive future payments pursuant to the Tax Receivable Agreement. The amount payable under the Tax Receivable Agreement will be based on an annual calculation of the reduction in our U.S. federal, state and local taxes resulting from the utilization of certain tax benefits resulting from sales and exchanges by certain members of GEN LLC. We expect that payments that we may be required to make under the Tax Receivable Agreement may be substantial. Assuming no material changes in the relevant tax laws and that we earn sufficient taxable income to realize all tax benefits that are subject to the Tax Receivable Agreement, we expect that the reduction in tax payments for us associated with the federal, state and local tax benefits described above would aggregate to approximately $117.2 million through 2037. Under such scenario we would be required to pay certain members of GEN LLC 85% of such amount, or $99.6 million through 2037.

Previous wording

Net cash provided by operating activities during the three months ended March 31, 2025 was $2.1 million, the result of net loss of $1.9 million, adjusted by non-cash charges of depreciation and amortization of $2.0 million, amortization of operating lease assets of $1.6 million, and stock-based compensation of $0.7 million. The net cash outflows from changes in operating assets and liabilities were collectively a decrease of $254 thousand.

Current wording

Net cash provided by operating activities during the six months ended June 30, 2025 was $5.5 million, the result of net loss of $3.6 million, adjusted by non-cash charges of depreciation and amortization of $4.3 million, amortization of operating lease assets of $3.2 million, and stock-based compensation expense of $1.5 million. The net cash outflows from changes in operating assets and liabilities were collectively an increase of $424 thousand.

Previous wording

Net cash provided by operating activities during the three months ended March 31, 2024 was $3.5 million, the result of net income of $3.7 million, adjusted by non-cash charges of depreciation and amortization of $1.6 million, and amortization of operating lease assets of $1.3 million, stock-based compensation of $0.8 million and a reduction related to the gain on the acquisition of the remaining ownership interest in GKBH. The net cash outflows from changes in operating assets and liabilities were collectively a decrease of $41 thousand.

Current wording

Net cash provided by operating activities during the six months ended June 30, 2024 was $9.1 million, the result of net income of $5.8 million, adjusted by non-cash charges of depreciation and amortization of $3.3 million, and amortization of operating lease assets of $3.7 million, stock-based compensation of $1.5 million and a reduction related to the gain on the acquisition of the remaining ownership interest in GKBH. The net cash outflows from changes in operating assets and liabilities were collectively a decrease of $1.7 million.

Previous wording

Net cash used in investing activities during the three months ended March 31, 2025 was $6.8 million, reflecting the purchase of property and equipment.

Current wording

Net cash used in investing activities during the six months ended June 30, 2025 was $16.4 million, reflecting the purchase of property and equipment.

Previous wording

Net cash used in investing activities during the three months ended March 31, 2024 was $7.1 million, reflecting $4.1 million for the purchase of property and equipment and $3.0 million of payment for the acquisition of the remaining ownership interest in GKBH.

Current wording

Net cash used in investing activities during the six months ended June 30, 2024 was $11.4 million, reflecting $8.4 million for the purchase of property and equipment and a $3.0 million payment for the acquisition of the remaining ownership interest in GKBH.