ONE Group Hospitality, Inc.

For the period ended Sep 28, 2025. Filed Nov 6, 2025.

About this filing

A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.

Sep 28, 2025 · Filed Nov 6, 2025

STKS$1.01-14.4%Stored close · as of Nov 9, 2026

Extracted filing text, with the paragraph anchors used by the comparison.

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Contents

Item 1. Financial Statements

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, in thousands, except share information)


· · September 28, · · December 31,
· 2025 · · 2024
ASSETS · · ·
Current assets: · ·
Cash and cash equivalents	$5,548	$27,576
Credit card receivable	10,754	10,477
Restricted cash and cash equivalents	499	499
Accounts receivable	9,921	12,294
Inventory	8,588	11,318
Other current assets	11,198	6,786
Due from related parties	—	376
Total current assets	46,508	69,326

Property and equipment, net	284,862	276,120
Operating lease right-of-use assets	247,951	260,331
Goodwill	155,783	155,783
Intangibles, net	133,246	133,111
Deferred tax assets, net	—	54,282
Other assets	8,923	9,030
Security deposits	2,261	2,097
Total assets	$879,534	$960,080

LIABILITIES, SERIES A PREFERRED STOCK AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$37,093	$30,883
Accrued payroll expenses	21,598	23,897
Accrued expenses	46,456	48,339
Current portion of operating lease liabilities	12,965	15,294
Deferred gift card revenue and other	3,898	6,540
Current portion of long-term debt	9,307	6,125
Other current liabilities	1,035	313
Total current liabilities	132,352	131,391

Long-term debt, net of current portion, unamortized discount and debt issuance costs	334,041	328,110
Operating lease liabilities, net of current portion	285,906	293,490
Deferred tax liabilities, net	5,446	—
Other long-term liabilities	4,896	5,758
Total liabilities	762,641	758,749

Commitments and contingencies (Note 17)

Series A preferred stock, $0.0001 par value, 160,000 shares authorized; 160,000 issued and outstanding at September 28, 2025 and December 31, 2024	182,348	158,085

Stockholders’ equity:
Common stock, $0.0001 par value, 75,000,000 shares authorized; 34,422,167 issued and 31,093,185 outstanding at September 28, 2025 and 33,994,140 issued and 31,037,843 outstanding at December 31, 2024	3	3
Preferred stock, other than Series A preferred stock, $0.0001 par value, 9,840,000 shares authorized; no shares issued and outstanding at September 28, 2025 and December 31, 2024	—	—
Treasury stock, at cost, 3,402,881 shares at September 28, 2025 and 3,019,654 shares at December 31, 2024	(19,308)	(18,202)
Additional paid-in capital	47,609	67,118
Accumulated deficit	(86,844)	—
Accumulated other comprehensive loss	(2,932)	(3,028)
Total stockholders’ equity	(61,472)	45,891
Noncontrolling interests	(3,983)	(2,645)
Total equity	(65,455)	43,246
Total liabilities, Series A preferred stock and equity	$879,534	$960,080

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in thousands, except income per share and related share information)


· · For the three periods ended September 28, · For the three months ended September 30, · For the nine periods ended September 28, · · For the nine months ended September 30,
· 2025 · 2024 · 2025 · 2024
Revenues: · · · ·
Owned restaurant net revenue	$177,424	$190,587	$588,729	$441,116
Management, license, franchise and incentive fee revenue	2,776	3,388	9,979	10,348
Total revenues	180,200	193,975	598,708	451,464
Cost and expenses:
Owned operating expenses:
Owned restaurant cost of sales	37,412	39,880	123,722	94,471
Owned restaurant operating expenses	119,901	126,223	378,169	279,633
Total owned operating expenses	157,313	166,103	501,891	374,104
General and administrative (including stock-based compensation of $1,246 and $4,348 for the three and nine periods ended September 28, 2025, respectively, and $1,580 and $4,433 for the three and nine months ended September 30, 2024, respectively)	13,274	12,814	38,027	30,982
Depreciation and amortization	11,530	9,416	32,229	22,701
Loss on impairment of long-lived assets	3,386	—	3,386	—
Transition and integration expenses	2,607	6,274	10,275	10,068
Pre-opening expenses	698	2,118	3,958	7,548
Transaction and exit costs	13	850	143	8,728
Lease termination and exit (income) expenses	(278)	—	5,428	471
Other (income) expenses	(470)	46	(147)	78
Total costs and expenses	188,073	197,621	595,190	454,680
Operating (loss) income	(7,873)	(3,646)	3,518	(3,216)
Other expenses, net:
Interest expense, net of interest income	10,483	10,679	30,600	20,622
Loss on early debt extinguishment	—	—	—	4,149
Total other expenses, net	10,483	10,679	30,600	24,771
Loss before provision (benefit) for income taxes	(18,356)	(14,325)	(27,082)	(27,987)
Provision (benefit) for income taxes	59,141	(4,856)	60,125	(8,583)
Net loss	(77,497)	(9,469)	(87,207)	(19,404)
Less: net loss attributable to noncontrolling interest	(757)	(165)	(1,338)	(689)
Net loss attributable to The ONE Group Hospitality, Inc.	$(76,740)	$(9,304)	$(85,869)	$(18,715)
Series A Preferred Stock paid-in-kind dividend and accretion	(8,535)	(7,125)	(24,263)	(11,663)
Net loss available to common stockholders	$(85,275)	$(16,429)	$(110,132)	$(30,378)

Net loss per common share:
Basic	$(2.75)	$(0.53)	$(3.55)	$(0.97)
Diluted	$(2.75)	$(0.53)	$(3.55)	$(0.97)

Weighted average common shares outstanding:
Basic	30,966,736	31,008,275	30,982,081	31,256,946
Diluted	30,966,736	31,008,275	30,982,081	31,256,946

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(Unaudited, in thousands)


· · For the three periods ended September 28, · · For the three months ended September 30, · · For the nine periods ended September 28, · · For the nine months ended September 30,
· 2025 · 2024 · 2025 · 2024
Net loss	$(77,497)	$(9,469)	$(87,207)	$(19,404)
Currency translation (loss) gain, net of tax	(14)	74	96	17
Comprehensive loss	(77,511)	(9,395)	(87,111)	(19,387)
Less: comprehensive loss attributable to noncontrolling interest	(757)	(165)	(1,338)	(689)
Comprehensive loss attributable to The ONE Group Hospitality, Inc.	(76,754)	(9,230)	(85,773)	(18,698)
Series A Preferred Stock paid-in-kind dividend and accretion	(8,535)	(7,125)	(24,263)	(11,663)
Comprehensive loss attributable to common stockholders	$(85,289)	$(16,355)	$(110,036)	$(30,361)

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY AND

SERIES A PREFERRED STOCK

(Unaudited, in thousands, except share information)


· · · · · · · · · · · · · · · · · (Accumulated · · Accumulated · · · · · · · · ·
· · · · · · · · · · · · · · Additional · · Deficit) · · other · · · · · · · · ·
· Series A Preferred Stock · · Common stock · · Treasury · · paid-in · · Retained · · comprehensive · · Stockholders’ · · Noncontrolling · · ·
· Shares · Amount · · Shares · Par value · stock · · capital · Earnings · loss · equity · interests · Total
Balance at December 31, 2024	160,000	$158,085	31,037,843	$3	$(18,202)	$67,118	$—	$(3,028)	$45,891	$(2,645)	$43,246
Stock-based compensation	—	—	61,453	—	—	1,632	—	—	1,632	—	1,632
Issuance of vested restricted shares, net of tax withholding	—	—	54,557	—	—	(129)	—	—	(129)	—	(129)
Purchase of treasury stock	—	—	(110,595)	—	(307)	—	—	—	(307)	—	(307)
Series A Preferred Stock paid-in kind dividend and accretion	—	7,591	—	—	—	(6,616)	(975)	—	(7,591)	—	(7,591)
Loss on foreign currency translation, net	—	—	—	—	—	—	—	(13)	(13)	—	(13)
Net income (loss)	—	—	—	—	—	—	975	—	975	(353)	622
Balance at March 30, 2025	160,000	$165,676	31,043,258	$3	$(18,509)	$62,005	$—	$(3,041)	$40,458	$(2,998)	$37,460
Stock-based compensation	—	—	45,367	—	—	1,470	—	—	1,470	—	1,470
Issuance of vested restricted shares, net of tax withholding	—	—	65,848	—	—	(167)	—	—	(167)	—	(167)
Purchase of treasury stock	—	—	(202,883)	—	(598)	—	—	—	(598)	—	(598)
Series A Preferred Stock paid-in kind dividend and accretion	—	8,137	—	—	—	(8,137)	—	—	(8,137)	—	(8,137)
Loss on foreign currency translation, net	—	—	—	—	—	—	—	123	123	—	123
Net loss	—	—	—	—	—	—	(10,104)	—	(10,104)	(228)	(10,332)
Balance at June 29, 2025	160,000	$173,813	30,951,590	$3	$(19,107)	$55,171	$(10,104)	$(2,918)	$23,045	$(3,226)	$19,819
Stock-based compensation	—	—	73,899	—	—	1,246	—	—	1,246	—	1,246
Issuance of vested restricted shares, net of tax withholding	—	—	137,445	—	—	(273)	—	—	(273)	—	(273)
Purchase of treasury stock	—	—	(69,749)	—	(201)	—	—	—	(201)	—	(201)
Series A Preferred Stock paid-in-kind dividend and accretion	—	8,535	—	—	—	(8,535)	—	—	(8,535)	—	(8,535)
Gain on foreign currency translation, net	—	—	—	—	—	—	—	(14)	(14)	—	(14)
Net loss	—	—	—	—		—	(76,740)	—	(76,740)	(757)	(77,497)
Balance at September 28, 2025	160,000	$182,348	31,093,185	$3	$(19,308)	$47,609	$(86,844)	$(2,932)	$(61,472)	$(3,983)	$(65,455)

Balance at December 31, 2023	—	$—	31,283,975	$3	$(15,051)	$58,270	$28,884	$(2,930)	$69,176	$(1,816)	$67,360
Stock-based compensation	—	—	—	—	—	1,358	—	—	1,358	—	1,358
Issuance of vested restricted shares, net of tax withholding	—	—	24,521	—	—	(124)	—	—	(124)	—	(124)
Loss on foreign currency translation, net	—	—	—	—	—	—	—	(68)	(68)	—	(68)
Net loss	—	—	—	—	—	—	(2,069)	—	(2,069)	(361)	(2,430)
Balance at March 31, 2024	—	$—	31,308,496	$3	$(15,051)	$59,504	$26,815	$(2,998)	$68,273	$(2,177)	$66,096
Stock-based compensation	—	—	22,905	—	—	1,495	—	—	1,495	—	1,495
Exercise of stock options and warrants	—	—	50,000	—	—	242	—	—	242	—	242
Issuance of vested restricted shares, net of tax withholding	—	—	108,124	—	—	(356)	—	—	(356)	—	(356)
Issuance of warrants	—	—	—	—	—	10,771	—	—	10,771	—	10,771
Purchase of treasury stock	—	—	(192,325)	—	(888)	—	—	—	(888)	—	(888)
Series A Preferred Stock issuance	160,000	138,943	—	—	—	—	—	—	—	—	—
Series A Preferred Stock paid-in kind dividend and accretion	—	4,538	—	—	—	—	(4,538)	—	(4,538)	—	(4,538)
Gain on foreign currency translation, net	—	—	—	—	—	—	—	11	11	—	11
Net loss	—	—	—	—	—	—	(7,342)	—	(7,342)	(163)	(7,505)
Balance at June 30, 2024	160,000	$143,481	31,297,200	$3	$(15,939)	$71,656	$14,935	$(2,987)	$67,668	$(2,340)	$65,328
Stock-based compensation	—	—	39,114	—	—	1,580	—	—	1,580	—	1,580
Issuance of vested restricted shares, net of tax withholding	—	—	17,099	—	—	(15)	—	—	(15)	—	(15)
Purchase of treasury stock	—	—	(550,876)	—	(2,263)	—	—	—	(2,263)	—	(2,263)
Series A Preferred Stock paid-in kind dividend and accretion	—	7,125	—	—	—	(1,494)	(5,631)	—	(7,125)	—	(7,125)
Gain on foreign currency translation, net	—	—	—	—	—	—	—	74	74	—	74
Net loss	—	—	—	—	—	—	(9,304)	—	(9,304)	(165)	(9,469)
Balance at September 30, 2024	160,000	$150,606	30,802,537	$3	$(18,202)	$71,727	$—	$(2,913)	$50,615	$(2,505)	$48,110

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)


· · For the nine periods ended September 28, · · For the nine months ended September 30,
· 2025 · 2024
Operating activities: · ·
Net loss	$(87,207)	$(19,404)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	32,229	22,701
Non-cash lease termination and exit costs	3,383	321
Stock-based compensation	4,348	4,433
Amortization of debt issuance costs and debt original issuance discounts	2,670	1,723
Deferred taxes	59,728	(8,779)
Non-cash loss on early debt extinguishment	—	1,674
Loss on impairment of long-lived assets	3,386	—
Changes in operating assets and liabilities, net of acquisition:
Accounts receivable	2,097	6,111
Inventory	2,730	1,542
Other current assets	(4,524)	(1,154)
Due from related parties	376	—
Security deposits	(164)	(35)
Other assets	(937)	(2,596)
Accounts payable	3,524	2,169
Accrued expenses	(3,645)	11,513
Operating lease liabilities and right-of-use assets	1,784	6,402
Other liabilities	(2,556)	(953)
Net cash provided by operating activities	17,222	25,668

Investing activities:
Purchase of property and equipment	(44,172)	(53,768)
Acquisition related payments, net of cash acquired	—	(369,838)
Net cash used in investing activities	(44,172)	(423,606)

Financing activities:
Borrowings of long-term debt	11,524	333,829
Repayments of long-term debt and financing lease liabilities	(5,027)	(74,574)
Issuance of Series A preferred stock net of discount	—	138,943
Issuance of warrants to Series A preferred stockholders	—	10,771
Exercise of stock options	—	242
Tax-withholding obligation on stock-based compensation	(569)	(495)
Purchase of treasury stock	(1,106)	(3,151)
Net cash provided by financing activities	4,822	405,565
Effect of exchange rate changes on cash	100	10
Net change in cash and cash equivalents and restricted cash and cash equivalents	(22,028)	7,637
Cash and cash equivalents and restricted cash and cash equivalents, beginning of period	28,075	21,047
Cash and cash equivalents and restricted cash and cash equivalents, end of period	$6,047	$28,684
Supplemental disclosure of cash flow data:
Interest paid, net of capitalized interest	$27,992	$14,334
Income taxes paid	$931	$437
Accrued purchases of property and equipment	$13,368	$11,739
Reconciliation of cash and cash equivalents and restricted cash and cash equivalents
Cash and cash equivalents	$5,548	$28,185
Restricted cash and cash equivalents	499	499
Total cash and cash equivalents and restricted cash and cash equivalents as shown in the statement of cash flows	$6,047	$28,684

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 1 – Summary of Business and Significant Accounting Policies

Description of Business

The ONE Group Hospitality, Inc. and its subsidiaries (collectively, the “Company”) is an international restaurant company that develops, owns and operates, manages, franchises and licenses upscale and polished casual, high-energy restaurants. The Company’s primary restaurant brands are STK, a modern twist on the American steakhouse concept featuring premium steaks, seafood and specialty cocktails in an energetic upscale atmosphere, Benihana, an interactive dining destination with highly skilled chefs preparing food in front of guests and served in an energetic atmosphere alongside fresh sushi and innovative cocktails, Kona Grill, a polished casual bar-centric grill concept featuring American favorites, award-winning sushi, and specialty cocktails in a polished casual atmosphere, and RA Sushi, a Japanese cuisine concept that offers a fun-filled, bar-forward, upbeat, and vibrant dining atmosphere anchored by creative sushi, inventive drinks, and outstanding service.

As of September 28, 2025, the Company owned, operated, managed, franchised, or licensed 157 venues, including 29 STKs,85 Benihanas,23 Kona Grills and 14 RA Sushis in major metropolitan cities in North America, Europe, Latin America and the Middle East and 6 food and beverage (“F&B“) venues inthree hotels and casinos in the United States and Europe. For those restaurants and venues that are managed, licensed or franchised, the Company generates management fees and franchise fees based on top-line revenues and incentive fee revenue based on a percentage of the location’s revenues and profits.

On January 1, 2025, the Company transitioned from a calendar-based fiscal year to a 52/53-week fiscal year. Beginning in 2025, the Company’s fiscal year will end on the last Sunday in December. The Company’s third quarter of 2025 was the 91-day period of June 30, 2025 through September 28, 2025 compared to the third quarter of 2024 which was the 92-day period of July 1, 2024 through September 30, 2024. The nine periods ended September 28, 2025 and the nine months ended September 30, 2024 consisted of the first 271 and 273 days of the 2025 and 2024 fiscal years, respectively. The Company’s fiscal year ending December 28, 2025 will contain 362 days due to the transition. The fiscal year ending December 31, 2024 contained 365 days.

Basis of Presentation

The accompanying condensed consolidated balance sheet as of December 31, 2024, which has been derived from audited financial statements, and the accompanying unaudited interim condensed consolidated financial statements (“condensed consolidated financial statements”) of the Company have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and in accordance with accounting principles generally accepted in the U.S. (“GAAP”). Certain information and footnote disclosures normally included in annual audited financial statements have been omitted pursuant to SEC rules and regulations. These unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

In the Company’s opinion, the accompanying unaudited interim financial statements reflect all adjustments (consisting only of normal recurring accruals and adjustments) necessary for a fair presentation of the results for the interim periods presented. The results of operations for any interim period are not necessarily indicative of the results expected for the full year. Additionally, the Company believes that the disclosures are sufficient for interim financial reporting purposes.

Immaterial Prior Period Restatement

As disclosed in the Form 10-Q for the three periods ended March 30, 2025, subsequent to the issuance of the Company’s Consolidated Financial statements filed on Form 10-K for the period ended December 31, 2024, the Company identified an error in its calculation and recognition of non-cash rent expense for Benihana and RA Sushi from the date of its acquisitions through December 31, 2024, which resulted in the Company understating net loss by $1.3 million. The Company has evaluated the impact of the error and determined that it was not material to the 2024 interim or annual financial statements. However, the cumulative effect of the error in the first quarter of 2025 would have had a material effect on the results of operations for the period. Therefore, the Company has made these immaterial corrections in the comparative prior period within the Condensed Consolidated Financial Statements and related footnotes. The Company has corrected previously reported financial information for related immaterial errors in this Form 10-Q, as applicable.

The following table reflects the correction on the affected line items in the Company’s previously reported Condensed Consolidated Balance Sheet for the year ended December 31, 2024.


· · As of December 31, 2024
· · Previously · · · · As
· · Reported · · Adjustment · · Corrected
Operating lease right-of-use assets	$260,204	$127	$260,331
Deferred income taxes, net	53,682	600	54,282
Total assets	959,353	727	960,080
Current portion of operating lease liabilities	14,998	296	15,294
Total current liabilities	131,095	296	131,391
Operating lease liabilities, net of current portion	291,785	1,705	293,490
Total liabilities	756,748	2,001	758,749
Additional paid-in capital	68,392	(1,274)	67,118
Total stockholders’ equity	47,165	(1,274)	45,891
Total equity	44,520	(1,274)	43,246
Total liabilities, Series A preferred stock and stockholders' equity	959,353	727	960,080

The following table reflects the correction on the affected line items in the Company’s previously reported Condensed Consolidated Financial Statements for the three and nine months ended September 30, 2024.


Condensed Consolidated Statement of Operations
· · For the three months ended September 30, 2024
· · Previously · · · · As
· · Reported · · Adjustment · · Corrected
Owned restaurant operating expenses	$125,634	$589	$126,223
Total owned operating expenses	165,514	589	166,103
General and administrative	12,785	29	12,814
Pre-opening expenses	2,110	8	2,118
Total costs and expenses	196,995	626	197,621
Operating income	(3,020)	(626)	(3,646)
Loss before benefit for income taxes	(13,699)	(626)	(14,325)
Benefit for income taxes	(4,644)	(212)	(4,856)
Net loss	(9,055)	(414)	(9,469)
Net loss attributable to The ONE Group Hospitality, Inc.	(8,890)	(414)	(9,304)
Net loss available to common stockholders	(16,015)	(414)	(16,429)
Basic net loss per common share	(0.52)	(0.01)	(0.53)
Diluted net loss per common share	(0.52)	(0.01)	(0.53)


· · For the nine months ended September 30, 2024
· · Previously · · · · As
· · Reported · · Adjustment · · Corrected
Owned restaurant operating expenses	$278,464	$1,169	$279,633
Total owned operating expenses	372,935	1,169	374,104
General and administrative	30,941	41	30,982
Pre-opening expenses	7,528	20	7,548
Total costs and expenses	453,450	1,230	454,680
Operating income	(1,986)	(1,230)	(3,216)
Loss before benefit for income taxes	(26,757)	(1,230)	(27,987)
Benefit for income taxes	(8,180)	(403)	(8,583)
Net loss	(18,577)	(827)	(19,404)
Net loss attributable to The ONE Group Hospitality, Inc.	(17,888)	(827)	(18,715)
Net loss available to common stockholders	(29,551)	(827)	(30,378)
Basic net loss per common share	(0.95)	(0.03)	(0.97)
Diluted net loss per common share	(0.95)	(0.03)	(0.97)


Condensed Consolidated Statement of Comprehensive Income (Loss)
· · For the three months ended September 30, 2024
· · Previously · · · · As
· · Reported · · Adjustment · · Corrected
Net loss	$(9,055)	$(414)	$(9,469)
Comprehensive loss	(8,981)	(414)	(9,395)
Comprehensive loss attributable to The ONE Group Hospitality, Inc.	(8,816)	(414)	(9,230)
Comprehensive loss attributable to common stockholders	(15,941)	(414)	(16,355)


· · For the nine months ended September 30, 2024
· · Previously · · · · As
· · Reported · · Adjustment · · Corrected
Net loss	$(18,577)	$(827)	$(19,404)
Comprehensive loss	(18,560)	(827)	(19,387)
Comprehensive loss attributable to The ONE Group Hospitality, Inc.	(17,871)	(827)	(18,698)
Comprehensive loss attributable to common stockholders	(29,534)	(827)	(30,361)


Condensed Consolidated Statement of Stockholders' Equity and Series A Preferred Stock
· · For the three months ended September 30, 2024
· · Previously · · · · As
· · Reported · · Adjustment · · Corrected
Additional paid-in capital	$72,554	$(827)	$71,727
Stockholders' equity	51,442	(827)	50,615
Total equity	48,937	(827)	48,110


Condensed Consolidated Statement of Cash Flows
· · For the nine months ended September 30, 2024
· · Previously · · · · As
· · Reported · · Adjustment · · Corrected
Net loss	$(18,577)	$(827)	$(19,404)
Deferred taxes	(8,376)	(403)	(8,779)
Operating lease liabilities and right-of-use assets	5,172	1,230	6,402

Prior Period Reclassifications

The Company reclassified $0.5 million from transaction and exit costs on the Condensed Consolidated Statements of Operations to lease termination and exit costs related to a Kona Grill location closed in 2024 to conform to current year presentation.

Certain reclassifications were made to conform the prior period segment reporting to the current year presentation. Refer to Note 15 – Segment Reporting for additional information regarding the Company’s reportable operating segments.

Significant Accounting Policies

Goodwill. Goodwill consists of goodwill associated with the Benihana Acquisition (as definited below). Goodwill is not amortized and is tested for impairment annually as of the last day of our tenth fiscal period or on an interim basis whenever events or changes in circumstances indicate a potential impairment.

Recent Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03, “Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” This ASU requires detailed qualitative and quantitative disclosures for certain costs and expenses on the income statement. The amendment is effective for fiscal years beginning after December 15, 2026, with early adoption permitted. The Company is evaluating the impact of adopting this ASU on its disclosures.

In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” The ASU includes amendments requiring enhanced income tax disclosures, primarily related to standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. The guidance is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company will adopt this ASU in the 2025 Form 10-K.

The Company reviewed all other recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a significant impact to its condensed consolidated financial statements.

Note 2 – Benihana Acquisition

On May 1, 2024, the Company acquired 100% of the issued and outstanding equity interests of Safflower Holdings Corp. and its affiliates comprised of 93 company owned restaurants and 12 franchised restaurants (the “Benihana Acquisition”). Safflower Holdings Corp. beneficially owned most of the Benihana restaurants, as well as all of the RA Sushi restaurants, in the U.S. The Company purchased the equity interests for a contractual price of $365.0 million, subject to customary adjustments. The Company believes that Benihana is complementary to its existing brands and will enable the Company to capture market share in the Vibe Dining segment.

The assets and liabilities of Benihana were recorded at their respective fair values as of the date of acquisition. The fair values are set forth below (amounts in thousands).


Purchase consideration: · ·
Contractual purchase price			$365,000
Cash and cash equivalents, restricted cash and cash equivalents and credit card receivable			25,117
Working capital adjustment			1,151
Cash consideration paid			391,268

Net assets acquired:
Cash and cash equivalents			$20,879
Restricted cash and cash equivalents			551
Credit card receivable			3,687
Inventory			4,405
Other current assets			7,471
Property and equipment			102,552
Operating lease right-of-use assets			182,346
Deferred tax assets, net			30,345
Intangible assets			117,800
Other assets			2,899
Accounts payable			(9,851)
Accrued expenses			(30,375)
Other current liabilities			(3,639)
Operating lease liabilities			(189,181)
Other long-term liabilities			(4,404)
Total net assets acquired			235,485
Goodwill			$155,783

The excess of the purchase price over the aggregate fair value of net assets acquired was allocated to goodwill at Benihana. The portion of the purchase price attributable to goodwill represents benefits expected because of the acquisition, including sales and unit growth opportunities in addition to supply-chain and support-cost synergies. The Benihana and RA Sushi tradenames have an indefinite life based on the expected use of the asset and the regulatory and economic environment within which it is being used. The tradenames represent highly respected brands with positive connotations, and the Company intends to cultivate and protect the use of the brands. Goodwill and indefinite-lived tradenames are not amortized but are reviewed annually for impairment or more frequently if indicators of impairment exist. Goodwill is not deductible for tax purposes as the Benihana Acquisition was a stock transaction.

The Company incurred $2.6 million and $10.3 million for transition and related integration efforts in the three and nine periods ended September 28, 2025, respectively. The Benihana Acquisition resulted in actual revenues of $368.8 million and net income of $4.8 million in the condensed consolidated statements of operations for the nine periods ended September 28, 2025. The Company does not expect future material transition and integration expenses.

The following unaudited pro forma results of operations for the three and nine months ended September 30, 2024 give effect to the Benihana Acquisition as if it had occurred on January 1, 2024 (in thousands):

· · · · · ·
	For the three months ended September 30,	For the nine months ended September 30,
· 2024 · 2024
Total Revenues	$193,975	$625,001
Net income	$(2,452)	$6,891

Note 3 – Property and Equipment, Net

Property and equipment, net consist of the following (in thousands):

· · · · · ·
	September 28,	December 31,
	2025	2024
Furniture, fixtures and equipment	$87,279	$80,362
Leasehold improvements	265,270	247,575
Less: accumulated depreciation	(108,962)	(88,638)
Subtotal	243,587	239,299
Construction in progress	36,065	31,982
Restaurant smallwares	5,210	4,839
Total	$284,862	$276,120

Depreciation related to property and equipment was $11.4 million and $9.3 million for the three periods ended September 28, 2025 and the three months ended September 30, 2024, respectively, and $31.5 million and $22.3 million for the nine periods ended September 28, 2025 and the nine months ended September 30, 2024, respectively, presented within depreciation and amortization expense in the condensed consolidated statement of operations. The Company also recorded $3.4 million in accelerated depreciation relating to property and equipment for the restaurants closed during 2025, which is presented in lease termination and exit expenses within the condensed consolidated statement of operations. The Company depreciates construction in progress upon such assets being placed into service.

During the three and nine periods ended September 28, 2025, the Company recorded non-cash impairment charges of $2.7 million on property and equipment, net primarily related to performance of restauarants with upcoming lease expirations.

Note 4 – Intangibles, Net

Intangibles, net consists of the following (in thousands):


· · September 28, · · December 31,
	2025		2024
Indefinite-lived intangible assets
Tradenames		$134,400		$134,400
Finite-lived intangible assets
Franchise agreements		800		800
Other finite-lived intangible assets		335		152
Total finite-lived intangible assets		1,135		952
Less: accumulated amortization		(2,289)		(2,241)
Total intangibles, net		$133,246		$133,111

Intangible assets consist of the indefinite-lived “Benihana”, “Kona Grill” and “RA Sushi” trade names and other finite-lived intangible assets that are amortized using the straight-line method over their estimated useful life of 5 to 15 years. The amortization expense was nominal for the three and nine periods ended September 28, 2025 and the three and nine months ended September 30, 2024. The Company’s estimated aggregate amortization expense for each of the five succeeding fiscal years is$0.1 million annually.

Note 5 – Accrued Expenses

Accrued expenses consist of the following (in thousands):


· · September 28, · · December 31,
· · 2025 · · 2024
VAT and sales taxes	8,776	10,120
Interest	6,481	6,681
Insurance	6,046	4,388
Amounts due to landlords	4,149	5,339
New restaurant construction	3,422	6,923
Legal, professional and other services	2,570	1,692
Income taxes and related	304	471
Lease termination	500	—
Other (1)	14,208	12,725
Total	$46,456	$48,339

(1)	Amount primarily relates to recurring restaurant operating expenses.

Note 6 – Long-Term Debt

Long-term debt consists of the following (in thousands):


· · September 28, · · December 31,
· · 2025 · · 2024
Term loan agreements	$346,500	$348,250
Revolving credit facility	5,500	—
Equipment security notes	2,998	—
Total long-term debt	354,998	348,250
Less: current portion of long-term debt	(9,307)	(6,125)
Less: debt issuance costs	(443)	(534)
Less: debt original issuance discount	(11,207)	(13,481)
Total long-term debt, net of current portion	$334,041	$328,110

Interest expense, net for the Company’s debt arrangements, excluding the amortization of debt issuance costs, debt original issuance discount and fees, was $9.5 million and $10.0 million for the three periods ended September 28, 2025 and the three months ended September 30, 2024, respectively, and $27.8 million and $19.3 million for the nine periods ended September 28, 2025 and the nine months ended September 30, 2024, respectively. Capitalized interest was $0.2 million and $1.1 million for the three and nine periods ended September 28, 2025, respectively. Capitalized interest was $0.9 million and $1.8 million for the three and nine months ended September 30, 2024, respectively.

As of September 28, 2025, the Company had $5.5 million in outstanding borrowings and $5.8 million in standby letters of credit outstanding under its revolving credit facility and $28.7 million available in its revolving credit facility, subject to certain conditions.

Credit and Guarantee Agreement

In connection with the Benihana Acquisition, on May 1, 2024, the Company entered into a credit agreement (the “Credit Agreement”) with Deutsche Bank AG New York Branch, Deutsche Bank Securities Inc., HPS Investment Partners, LLC and HG Vora Capital Management, LLC (collectively, the “Lenders”). The Credit Agreement provides a $350.0 million senior secured term loan facility (the “Term Loan Facility”) and a $40.0 million senior secured revolving credit facility (the “Revolving Facility”, and together with the Term Loan Facility, the “Facilities”), up to $10.0 million of which will be available in the form of letters of credit. On May 1, 2024, the Company borrowed $350.0 million under the Term Loan Facility. In the third quarter of 2025, the Company had borrowings, net of repayments, of $5.5 million on the Revolving Facility.

The Term Loan Facility is not subject to a financial covenant and the Revolving Facility’s financial covenant will apply only after 35% of the Revolving Facility’s capacity has been drawn.

The Term Loan Facility bears interest at a margin over a reference rate selected at the option of the borrower. The margin for the Term Loan Facility is 6.5% per annum for SOFR borrowings and 5.5% per annum for base rate borrowings. The Term Loan Facility matures on the fifth anniversary of the date of the related loan agreement. The Term Loan Facility is payable in quarterly installments commencing with the fiscal quarter ending September 30, 2024, and are 1% per annum for the first year (through June 30, 2025), then 2.5% per annum for the next two years (through June 2027), then 5% per annum thereafter through maturity on April 30, 2029.

The Revolving Facility bears interest at a margin over a reference rate selected at the option of the borrower. The margin for the Revolving Facility is set quarterly based on the Company’s Consolidated Net Leverage Ratio for the preceding four fiscal quarters and ranges from 5.5% to 6.0% per annum for SOFR borrowings and 4.5% to 5.0% for base rate borrowings. The Revolving Facility matures on November 1, 2028.

The Company’s weighted average interest rate on the borrowings under the Credit Agreement as of September 28, 2025 was 10.8%.

As of September 28, 2025, the Company had $0.4 million of debt issuance costs and $11.2 million of debt original issuance discount related to the Credit Agreement, which were capitalized and are recorded as a direct deduction to long-term debt and less than $0.1 million in debt issuance costs and $1.2 million of debt original issuance discount recorded in Other Assets on the condensed consolidated balance sheets.

Equipment Security Notes

Between July 10, 2025 and September 23, 2025, the Company entered into three Equipment Security Notes with Banc of America Leasing & Capital, LLC in an aggregate amount of $3.0 million to purchase restaurant equipment (the “Equipment Security Notes”). The Equipment Security Notes bear interest at rates ranging from 7.09% to 7.19% per annum, and are each payable in 60 equal monthly installments, inclusive of interest. Each of the Equipment Security Notes is secured by the equipment purchased with the proceeds of such note. As of September 28, 2025, the amount outstanding under the Equipment Security Notes was approximately$3.0 million.

Debt Extinguishment

On October 4, 2019, the Company entered into a credit agreement with Goldman Sachs, which was replaced with the Credit Agreement described above on May 1, 2024. The Goldman Sachs credit agreement provided for a secured revolving credit facility of $12.0 million, a $25.0 million term loan and a $50.0 million delayed draw term loan. On May 1, 2024, the outstanding loan balance was repaid and the unamortized debt issuance costs of $1.7 million and fees incurred of $2.4 million were recognized as a loss on early debt extinguishment on the condensed consolidated statements of operations.

Note 7 – Fair Value of Financial Instruments

Cash and cash equivalents, accounts receivable, inventory, accounts payable and accrued expenses are carried at cost, which approximates fair value. Long-lived assets are measured and disclosed at fair value on a nonrecurring basis if an impairment is identified. During the three and nine periods ended September 28, 2025, the Company completed an impairment analysis on assets related to restaurants that have upcoming lease expirations using a discounted cash flow model. The Company recorded non-cash impairment charges of $3.4 million on property and equipment, net and operating lease right-of-use-assets using Level 3 inputs.

The Company’s long-term debt, including the current portion, is carried at cost on the condensed consolidated balance sheets. Fair value of long-term debt, including the current portion, is valued using Level 2 inputs including current applicable rates for similar instruments and approximates the carrying value of such obligations.

The Company’s purchase price allocations for the Benihana Acquisition were measured at fair value on a nonrecurring basis primarily using Level 3 inputs.

Note 8 – Income Taxes

For both the nine periods ended September 28, 2025 and the nine months ended September 30, 2024, the Company has computed its interim tax provision using the estimated annual effective tax rate method.

The Company’s effective income tax rate was (222.0)% for the nine periods ended September 28, 2025 compared to 30.6% for the nine months ended September 30, 2024. The Company’s effective tax rate for the nine periods ended September 28, 2025 differs from the statutory U.S. tax rate of 21% due to the establishment of a valuation allowance against the Company’s deferred tax assets.

Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative loss incurred over the three-year period ended September 28, 2025. Accordingly, the Company recorded a full valuation allowance during the three and nine periods ended September 28, 2025. As a result, the Company recorded a tax expense of $59.1 million and $60.1 million for the three and nine periods ended September 28, 2025, respectively.

The Company recorded a tax benefit of $8.6 million for the nine months ended September 30, 2024.The Company’s effective tax rate, for the nine months ended September 30, 2024, differs from the statutory U.S. tax rate of 21% primarily due to the following: (i) tax credits for FICA taxes on certain employees’ tips; (ii) taxes owed in foreign jurisdictions with tax rates that differ from the U.S. statutory rate; (iii) taxes owed in state and local jurisdictions; and (iv) the tax effect of non-deductible compensation; and (v) transaction costs associated with the Benihana Acquisition. The income tax amounts recorded for the nine months ended September 30, 2024 included the discrete period tax benefits resulting from the vesting of restricted stock units.

The Company is subject to U.S. federal, state, local and various foreign income taxes for the jurisdictions in which it operates. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. In the normal course of business, the Company is subject to examination by federal, state, local and foreign taxing authorities.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”), was enacted, which includes a broad range of tax reform provisions, including changes to bonus depreciation and interest expense, among others. Any impact as a result of a change in tax law is recorded in the period of enactment. As such, the effects of the OBBBA are reflected in the Company's provision for income taxes as of and for the three and nine periods ended September 28, 2025. The OBBBA did not have a material effect on income tax expense for the nine periods ended September 28, 2025

Note 9 – Revenue Recognition

The following table provides information about contract liabilities, which include deferred license revenue, deferred gift card revenue, advanced party deposits and the Friends with Benefits rewards program (in thousands):

· · · · · ·
· September 28, · · December 31,
	2025	2024
Deferred license revenue (1)	$126	$204
Deferred gift card and gift certificate revenue (2)	$3,226	$5,984
Advanced party deposits (2)	$672	$556
Friends with Benefits rewards program (3)	$287	$201

(1)	Includes the current and long-term portion of deferred license revenue which are included in other current liabilities and other long-term liabilities on the condensed consolidated balance sheets.

(2)	Deferred gift card revenue and advance party deposits on goods and services yet to be provided are included in deferred gift card revenue and other on the condensed consolidated balance sheets.

(3)	Friends with Benefits rewards program is included in accrued expenses on the condensed consolidated balance sheets.

Revenue recognized during the period from contract liabilities as of the preceding fiscal year end date is as follows (in thousands):

· · · · · ·
· September 28, · September 30,
	2025	2024
Revenue recognized from deferred license revenue	$34	$33
Revenue recognized from deferred gift card revenue	$3,711	$1,106
Revenue recognized from advanced party deposits	$508	$361

The estimated deferred license revenue to be recognized in the future related to performance obligations that are unsatisfied as of September 28, 2025 were as follows for each year ending (in thousands):


2025, three periods remaining			$8
2026			25
2027			22
2028			22
2029			16
Thereafter			33
Total future estimated deferred license revenue			$126

Note 10 – Leases

The components of lease expense for the nine periods ended September 28, 2025 and the nine months ended September 30, 2024 are as follows (in thousands):


· · September 28, · September 30,
· · 2025 · 2024
Lease cost
Operating lease cost	$34,756	$25,825
Finance lease cost
Amortization of ROU assets	155	157
Interest on lease liabilities	65	66
Total finance lease cost	220	223
Variable lease cost (1)	14,620	16,860
Short-term lease cost	3,073	1,447
Total lease cost	$52,669	$44,355

Weighted average remaining lease term
Operating leases	13 years	13 years
Finance leases	3 years	4 years
Weighted average discount rate
Operating leases	10.40%	10.31%
Finance leases	11.14%	11.14%

(1)	Variable lease cost is comprised of percentage rent and common area maintenance.

During the three and nine periods ended September 28, 2025, the Company recorded non-cash impairment charges of $0.7 million on operating lease right-of-use assets related to restauarants with upcoming lease expirations

Supplemental cash flow information related to leases for the period was as follows (in thousands):


· September 28, · December 31,
· · 2025 · · 2024
Finance lease right-of-use assets (1)	$592	$849
Current portion of finance lease liabilities (1)	178	189
Long-term portion of finance lease liabilities (1)	494	754

(1)	Finance lease assets and liabilities are included in other assets, other current liabilities, and other long-term liabilities on the condensed consolidated balance sheet.


· · September 28, · · September 30,
· · 2025 · · 2024
Cash paid for amounts included in the measurement of lease liabilities: · · · · ·
Operating cash flows from operating leases	$31,309	$21,479
Operating cash flows from finance leases	$155	$157
Financing cash flows from finance leases	$252	$199
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$4,608	$3,081

The Company has entered intoten operating leases for future restaurants that have not commenced as of September 28, 2025. The present value of the aggregate future commitment related to these leases, net of tenant improvement allowances received from the landlord, is estimated to be$34.9 million. The Company expects these leases, which have initial lease terms of 10 to 20 years, to commence within the next twelve months.

As of September 28, 2025, maturities of the Company’s operating lease liabilities are as follows (in thousands):


2025, three periods remaining			$7,567
2026			40,365
2027			44,309
2028			44,442
2029			45,126
Thereafter			395,884
Total lease payments			577,693
Less: imputed interest			(278,822)
Present value of operating lease liabilities			$298,871

As of September 28, 2025, maturities of the Company’s finance lease liabilities are as follows (in thousands):


2025, three periods remaining			$94
2026			240
2027			240
2028			220
Total lease payments			794
Less: imputed interest			(122)
Present value of finance lease liabilities			$672

Note 11 – Earnings Per Share

Basic earnings per share is computed using the weighted average number of common shares outstanding during the period and income available to common stockholders. Diluted earnings per share is computed using the weighted average number of common shares outstanding during the period plus the dilutive effect of potential shares of common stock including common stock issuable pursuant to stock options, warrants, and restricted stock units. The two-class method for computing earnings per share will be utilized when applicable.

For the three and nine periods ended September 28, 2025 and the three and nine months ended September 30, 2024, net loss per share was calculated as follows (in thousands, except net loss per share and related share data):


· · For the three periods ended September 28, · For the three months ended September 30, · For the nine periods ended September 28, · · For the nine months ended September 30,
· 2025 · 2024 · 2025 · 2024
Net loss attributable to The ONE Group Hospitality, Inc.	$(76,740)	$(9,304)	$(85,869)	$(18,715)
Series A Preferred Stock paid-in-kind dividend and accretion	(8,535)	(7,125)	(24,263)	(11,663)
Net loss available to common stockholders	(85,275)	(16,429)	(110,132)	(30,378)

Basic weighted average shares outstanding	30,966,736	31,008,275	30,982,081	31,256,946
Dilutive effect of stock options, warrants and restricted share units	—	—	—	—
Diluted weighted average shares outstanding	30,966,736	31,008,275	30,982,081	31,256,946

Basic net loss per common share	$(2.75)	$(0.53)	$(3.55)	$(0.97)
Diluted net loss per common share	$(2.75)	$(0.53)	$(3.55)	$(0.97)

For the three periods ended September 28, 2025 and the three months ended September 30, 2024,3.6 million and 3.1 million, respectively, ofstock options, warrants andrestricted share units were determined to be anti-dilutive and were therefore excluded from the calculation of diluted earnings per share. For the nine periods ended September 28, 2025 and the nine months ended September 30, 2024, respectively,3.5 million and 2.3 million ofstock options, warrants andrestricted share units were anti-dilutive.

Note 12 – Series A Preferred Stock

On May 1, 2024, the Company issued 160,000 shares of Series A Preferred Stock for $160.0 million, subject to a 5% original issuance discount. Additionally, the Company recorded an additional discount of $2.3 million for expenses paid to the holders of the Series A Preferred Stock in connection with the issuance of the Series A Preferred Stock.

The Series A Preferred Stock is non-voting and non-convertible; has compounding dividends that begin at a rate of 13.0% per annum and increase over time at specified intervals; is subject to optional redemption by the Company and mandatory redemption following specified events and in certain circumstances upon the exercise by the holders of a majority of the outstanding shares of Series A Preferred Stock of an option to deliver written notice to the Company to require redemption, in each case, for specified prices; and gives certain consent rights for the holders of a majority of the outstanding shares of Series A Preferred Stock for specified matters.

The Company records the paid-in-kind dividend and accretion of the Series A Preferred Stock using the effective interest method based on a future redemption value of $247.4 million payable in 2027, the earliest date at which the Company can redeem the Series A Preferred Stock. During the three and nine periods ended September 28, 2025, the Company recorded paid-in-kind dividends and accretion of the Series A Preferred Stock of $8.5 million and $24.3 million, respectively.

Redemption Rights

On and after May 1, 2029, holders of the Series A Preferred Stock have the right to require redemption of all or any part of the Series A Preferred Stock for an amount equal to the liquidation preference after the fifth anniversary, upon an acceleration of material indebtedness or upon a change-of-control. However, at any time between the third and fourth anniversary of the issuance date, the Company may repurchase all or some of the preferred stock for 102.5% of the liquidation preference. At any time after the fourth anniversary, the Company may repurchase all of some of the preferred stock for 100% of the liquidation preference.

Since the redemption of the Series A Preferred Stock is contingently redeemable and therefore not certain to occur, the Series A Preferred Stock is not required to be classified as a liability under ASC 480, Distinguishing Liabilities from Equity. As the Series A Preferred Stock is redeemable in certain circumstances at the option of the holder and is redeemable in certain circumstances upon the occurrence of an event that is not solely within the Company’s control, the Series A Preferred Stock is classified separately from stockholders’ equity in the condensed consolidated balance sheets.

Note 13 – Stockholder’s Equity

Preferred Stock

The Company is authorized to issue 9,840,000 shares of preferred stock, excluding the Series A Preferred Stock, with a par value of $0.0001. There wereno shares of preferred stock that were issued or outstanding at September 28, 2025 or December 31, 2024, other than the Series A Preferred Stock discussed above.

Common Stock

The issuance of a dividend is dependent on a variety of factors, including but not limited to, available cash and the overall financial condition of the Company. The issuance of a dividend is also subject to legal restrictions and the terms of the Company’s credit agreement. The Company didnot issue dividends related to its common stock in the nine periods ended September 28, 2025 or the nine months ended September 30, 2024, respectively.

Stock Purchase Program

The Company’s Board of Directors authorized a repurchase program of up to$15.0 million of outstanding common stock that was completed in December 2023. In March 2024, the Company’s Board of Directors authorized an additional $5.0 million of repurchases under this program. During the three and nine periods ended September 28, 2025, the Company paid an aggregate consideration of $0.2 million and $1.1 million, respectively, for the repurchases of 0.1 million and 0.4 million shares, respectively. During the three and nine months ended September 30, 2024, the Company spent $2.3 million and $3.2 million, respectively, for the repurchase of 0.6 million and 0.7 million shares, respectively. As of September 28, 2025, the Company had repurchased 3,390,247 shares for $19.3 million under the repurchase program.

Warrants

In connection with the Benihana Acquisition, on May 1, 2024, the Company issued both market and penny warrants to the following holders of the Series A Preferred Stock. The holders of the penny warrants are entitled to receive any dividends issued to common stockholders. The Company has the following warrants to purchase shares of common stock outstanding as of September 28, 2025 and December 31, 2024.

· · · · · · · · · · · · ·
· · · · · · Warrants · · Exercise · · Shares available for purchase
Issuance date	Holder of warrants	Expiration date	Issued	Price	September 28, 2025	December 31, 2024
May 1, 2024	HPC III Kaizen LP	May 1, 2029	1,000,000	$10.00	1,000,000	1,000,000
May 1, 2024	HPS and affiliates	May 1, 2029	66,667	$10.00	66,667	66,667
May 1, 2024	HPC III Kaizen LP	May 1, 2034	1,786,582	$0.01	1,786,582	1,786,582
May 1, 2024	HPS and affiliates	May 1, 2034	119,105	$0.01	119,105	119,105

Note 14 – Stock-Based Compensation and Warrants

Stock-Based Compensation

As of September 28, 2025, the Company had 1,825,747 shares available for issuance under the Company’s 2019 Equity Incentive Plan (the “2019 Equity Plan”).

Stock-based compensation cost was $1.2 million and $1.6 million for the three periods ended September 28, 2025 and the three months ended September 30, 2024, respectively, and $4.3 million and $4.4 million for the nine periods ended September 28, 2025 and the nine months ended September 30, 2024, respectively. Stock-based compensation is included in general and administrative expenses in the condensed consolidated statements of operations. Included in stock-based compensation cost was $0.2 million and $0.6 million of stock granted to directors for the three and nine periods ended September 28, 2025, respectively, compared to $0.2 million and $0.5 million for the three and nine months ended September 30, 2024, respectively. Such grants were awarded consistent with the Board of Director’s compensation practices. Stock-based compensation for the three and nine periods ended September 28, 2025 included $0.2 million and $0.7 million, respectively, of compensation costs for performance stock units that contain both a market condition and time element (“PSUs”) compared to $0.2 million and $0.6 million for the three and nine months ended September 30, 2024, respectively.

Stock Option Activity

Stock options in the table below include both time-based and market condition-based awards. Changes in stock options during the nine periods ended September 28, 2025 were as follows:

· · · · · · · · · ·
· · · · · · Weighted · · ·
		Weighted		average	Intrinsic
		average exercise		remaining	value
· Shares · price · contractual life · (thousands)
Outstanding at December 31, 2024	838,284	$3.11		4.72 years	$567
Granted	—		—
Exercised	—		—
Cancelled, expired or forfeited	(9,356)		5.73
Outstanding at September 28, 2025	828,928	$3.08		3.72 years	$360
Exercisable at September 28, 2025	828,928	$3.08		3.72 years	$360

A summary of the status of the Company’s non-vested stock options during the nine periods ended September 28, 2025 is presented below:

· · · · ·
			Weighted
			average exercise
		Shares	price
Non-vested stock options at December 31, 2024	259,342		$5.73
Granted	—		—
Vested	(249,986)		5.73
Cancelled, expired or forfeited	(9,356)		5.73
Outstanding at September 28, 2025	—		$—

The fair value of options that vested in the nine periods ended September 28, 2025 was $0.9 million. As of September 28, 2025, there isno unrecognized compensation cost related to non-vested awards.

Restricted Stock Unit Activity

The Company issues restricted stock units (“RSUs”) under the 2019 Equity Plan. RSUs in the table below include time-based awards. The fair value of time-based RSUs is determined based upon the closing market value of the Company’s common stock on the grant date.

A summary of the status of RSUs and changes during the nine periods ended September 28, 2025 is presented below:

· · · · ·
· · · · Weighted average
· Shares · grant date fair value
Non-vested RSUs at December 31, 2024	973,100	$6.66
Granted	900,689	3.02
Vested	(451,762)	7.81
Cancelled, expired or forfeited	(178,630)	4.18
Non-vested RSUs at September 28, 2025	1,243,397	$3.96

As of September 28, 2025, the Company had approximately$3.9 million of unrecognized compensation costs related to RSUs, which will be recognized over a weighted average period of 1.9 years.

Performance Stock Unit Activity

The Company issues PSUs under the 2019 Equity Plan. PSUs in the table below include both a market condition and time element. The PSUs may be earned based on achieving common stock price targets within a time period, and if earned, will vest and be settled based on a time element specified in the respective agreement For PSUs granted during 2025, the Company, with the assistance of a third-party specialist, calculated the fair value using the Monte Carlo Simulation, a risk-free rate of 3.9%, a starting common stock value of$2.98, volatility of 71%, and a standard normal distribution. The PSUs were valued at$0.3 million and are amortized evenly over 36 months.

A summary of the status of PSUs and changes during the nine periods ended September 28, 2025 is presented below:

· · · · ·
· · · · Weighted average
· Shares · grant date fair value
Non-vested PSUs at December 31, 2024	473,166	$5.63
Granted	118,367	2.49
Vested	—	—
Cancelled, expired or forfeited	(33,045)	3.41
Non-vested PSUs at September 28, 2025	558,488	$5.10

As of September 28, 2025, the Company had$1.1 million of unrecognized compensation costs related to PSUs, which will be recognized over a weighted average period of 1.3 years.

Note 15 – Segment Reporting

The Company has identified its reportable operating segments as follows:

●	STK. The STK segment consists of the results of operations from STK restaurants and ONE Hospitality restaurant locations, as well as management, license and incentive fee revenue generated from the STK brand and ONE Hospitality restaurants.

●	Benihana. The Benihana segment consists of the results of operations from Benihana restaurant locations, as well as franchise revenue from the Benihana brand.

●	Grill Concepts. The Grill Concepts segment consists of the results of operations of Kona Grill and RA Sushi restaurant locations.

The Company’s Chief Executive Officer, who is the Company’s Chief Operating Decision Maker (“CODM”), manages the business and allocates resources via a combination of restaurant sales reports and operating segment profit information, defined as owned restaurant net revenues less owned restaurant cost of sales and owned restaurant operating expenses. The CODM is not provided asset information by reportable segment as asset information is provided to the CODM on a consolidated basis.

Certain financial information relating to the three and nine periods ended September 28, 2025 and the three and nine months ended September 30, 2024 for each segment is provided below (in thousands).


	STK		Benihana		Grill Concepts		Other(1)		Total
For the three periods ended September 28, 2025
Owned restaurant net revenue		$45,832		$99,994		$31,383		$215		$177,424
Owned restaurant cost of sales		(11,131)		(19,318)		(6,961)		(2)		(37,412)
Owned restaurant operating expenses		(28,822)		(66,748)		(24,303)		(28)		(119,901)
Restaurant operating profit		5,879		13,928		119		185		20,111
Management, license, franchise and incentive fee revenue		2,234		467		—		75		2,776
General and administrative expenses										(12,028)
Stock based compensation										(1,246)
Depreciation and amortization										(11,530)
Loss on impairment of long-lived assets										(3,386)
Transition and integration expenses										(2,607)
Pre-opening expenses										(698)
Transaction and exit costs										(13)
Lease termination and exit income (expenses)										278
Other income (expenses)										470
Interest expense, net of interest income										(10,483)
Loss before benefit for income taxes										(18,356)

Reconciliation of total revenues
Owned restaurant net revenues										177,424
Management, license, franchise, and incentive fee revenue										2,776
Total revenues										$180,200


· · STK · Benihana · Grill Concepts · Other(1) · Total
For the three months ended September 30, 2024
Owned restaurant net revenue	$44,724	$103,770	$41,834	$259	$190,587
Owned restaurant cost of sales	(10,941)	(19,801)	(9,130)	(8)	(39,880)
Owned restaurant operating expenses	(27,236)	(66,859)	(32,071)	(57)	(126,223)
Restaurant operating profit	6,547	17,110	633	194	24,484
Management, license, franchise and incentive fee revenue	2,667	675	—	46	3,388
General and administrative expenses					(11,234)
Stock based compensation					(1,580)
Depreciation and amortization					(9,416)
Transition and integration expenses					(6,274)
Pre-opening expenses					(2,118)
Transaction and exit costs					(850)
Other income (expenses)					(46)
Interest expense, net of interest income					(10,679)
Loss before benefit for income taxes					(14,325)

Reconciliation of total revenues
Owned restaurant net revenue					190,587
Management, license, franchise and incentive fee revenue					3,388
Total revenues					$193,975


	STK		Benihana		Grill Concepts		Other(1)		Total
For the nine periods ended September 28, 2025
Owned restaurant net revenue		$152,017		$330,735		$105,489		$488		$588,729
Owned restaurant cost of sales		(36,577)		(64,246)		(22,892)		(7)		(123,722)
Owned restaurant operating expenses		(91,169)		(208,903)		(77,859)		(238)		(378,169)
Restaurant operating profit		24,271		57,586		4,738		243		86,838
Management, license, franchise and incentive fee revenue		8,271		1,489		—		219		9,979
General and administrative expenses										(33,679)
Stock based compensation										(4,348)
Depreciation and amortization										(32,229)
Loss on impairment of long-lived assets										(3,386)
Transition and integration expenses										(10,275)
Pre-opening expenses										(3,958)
Transaction and exit costs										(143)
Lease termination and exit income (expenses)										(5,428)
Other income (expenses)										147
Interest expense, net of interest income										(30,600)
Loss before benefit for income taxes										(27,082)

Reconciliation of total revenues
Owned restaurant net revenues										588,729
Management, license, franchise, and incentive fee revenue										9,979
Total revenues										$598,708


· · STK · Benihana · Grill Concepts · Other(1) · Total
For the nine months ended September 30, 2024
Owned restaurant net revenue	$145,770	$181,655	$113,286	$405	$441,116
Owned restaurant cost of sales	(35,161)	(35,055)	(24,240)	(15)	(94,471)
Owned restaurant operating expenses	(83,840)	(113,325)	(82,373)	(95)	(279,633)
Restaurant operating profit	26,769	33,275	6,673	295	67,012
Management, license, franchise and incentive fee revenue	9,023	1,096	—	229	10,348
General and administrative expenses					(26,549)
Stock based compensation					(4,433)
Depreciation and amortization					(22,701)
Transition and integration expenses					(10,068)
Pre-opening expenses					(7,548)
Transaction and exit costs					(8,728)
Lease termination and exit income (expenses)					(471)
Other income (expenses)					(78)
Interest expense, net of interest income					(20,622)
Loss on early debt extinguishment					(4,149)
Loss before benefit for income taxes					(27,987)

Reconciliation of total revenues
Owned restaurant net revenue					441,116
Management, license, franchise and incentive fee revenue					10,348
Total revenues					$451,464

(1) Other includes sales and expenses that relate to STK Meat Market, an e-commerce platform that offers signature steak cuts nationwide; sales and expenses that relate to the Company’s major off-site events group, which supports all brands and venue concepts; and revenue generated from gift card programs.

Note 16 – Geographic Information

Certain financial information by geographic location is provided below (in thousands).

· · · · · · · · · · · ·
	For the three periods ended September 28,	For the three months ended September 30,	For the nine periods ended September 28,	For the nine months ended September 30,
· 2025 · 2024 · 2025 · 2024
Domestic revenues	$179,471	$193,253	$596,470	$449,056
International revenues	729	722	2,238	2,408
Total revenues	$180,200	$193,975	$598,708	$451,464

· · · · · ·
	September 28,	December 31,
	2025	2024
Domestic long-lived assets	$831,676	$889,126
International long-lived assets	1,350	1,628
Total long-lived assets	$833,026	$890,754

Note 17 – Commitments and Contingencies

The Company is party to claims in lawsuits incidental to its business, including lease disputes and employee-related matters. The Company has recorded accruals, when necessary, in its consolidated financial statements in accordance with ASC 450. While the resolution of a lawsuit, proceeding or claim may have an impact on the Company’s financial results for the period in which it is resolved, in the opinion of management, the ultimate outcome of such matters and judgements in which the Company is currently involved, either individually or in the aggregate, will not have a material adverse effect on the Company’s consolidated financial position or results of operations.

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