ONE Group Hospitality, Inc.

Note 1 – 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 December 28, 2025, the Company owned, operated, managed, franchised or licensed 159 venues, including 31 STKs,86 Benihanas,23 Kona Grills and 13 RA Sushis in major metropolitan cities in North America, Europe, Latin America and the Middle East and 6 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 and franchise fees based on top-line revenues and incentive fee revenue based on a percentage of the location’s revenues and net 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 ended on the last Sunday in December. The Company’s fourth quarter of 2025 was the 91-day period of September 29, 2025 through December 28, 2025 compared to the fourth quarter of 2024 which was the 92-day period of October 1, 2024 through December 31, 2024. The Company’s fiscal year ending December 28, 2025 contained 362 days due to the transition. The fiscal year ending December 31, 2024 contained 366 days.

Note 2 – Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). All intercompany accounts and transactions have been eliminated in consolidation.

Immaterial Prior Period Restatement

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 Consolidated Financial Statements and related footnotes.

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

Prior Period Reclassifications

The Company reclassified $0.5 million from transaction and exit costs on the 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.

The Company reclassified $6.0 million in stock-based compensation to general and administrative expenses within the prior period segment reporting footnotes to conform to the current year presentation. Refer to Note 15 – Segment Reporting for additional information.

Use of Estimates

The preparation of the consolidated financial statements in conformity with GAAP requires the Company to make estimates and assumptions for the reporting period and as of the reporting date. These estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingencies. Actual results could differ from those estimates.

Fair Value Measurements

Fair value represents the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Assets and liabilities are valued based upon observable and non-observable inputs. Valuations using Level 1 inputs are based on unadjusted quoted prices that are available in active markets for the identical assets or liabilities at the measurement date. Level 2 inputs utilize significant other observable inputs available at the measurement date, other than quoted prices included in Level 1, either directly or indirectly. Valuations using Level 3 inputs are based on significant unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment. There were no significant transfers between levels during any period presented.

Cash and Cash Equivalents

Cash and cash equivalents are defined as cash on hand and highly liquid instruments with original maturities of three months or less when purchased. The Company’s cash and cash equivalents consist of cash in banks and at the restaurants as of December 28, 2025 and December 31, 2024.

Restricted Cash and Cash Equivalents

Restricted cash and cash equivalents are accounts that are restricted to funding payment of employee benefits and collateral accounts relating to liquor license bonds.

Credit card receivable

The Company’s credit card receivables arise from credit cards payments that are in transit from the credit card processor to the Company.

Accounts Receivable

The Company’s receivables arise from management, license and franchise agreements, trade customers and other reimbursable amounts due from hotel operators where the Company operates a food and beverage service. Accounts

receivable from third-party delivery services at December 28, 2025 and December 31, 2024 was $1.1 million and $1.3 million, respectively. Receivables from the Company’s management, license, franchise and hotel partners were $7.1 million and $6.3 million at December 28, 2025 and December 31, 2024, respectively.

Inventory

Inventories, which consist of food, liquor and other beverages, are stated at the lower of cost or net realizable value. Cost is determined by the first in, first out method. Net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs to sell. As of December 28, 2025 and December 31, 2024, food inventories were $5.1 million and $6.7 million, respectively, and beverage inventories were $4.7 million and $4.5 million, respectively.

Goodwill

Goodwill consists of goodwill associated with the Benihana Acquisition. 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.

Property and Equipment

Additions to property and equipment, including leasehold improvements, are recorded at cost while costs incurred to repair and maintain the Company’s operations and equipment are expensed as incurred. Depreciation is calculated using the straight-line method over the estimated useful life of the asset. When assets are retired or otherwise disposed of, the cost of the assets and the related accumulated depreciation are removed from the accounts, and any gain or loss on retirements is reflected in operating income in the year of disposition.

Computers and equipment as well as furniture and fixtures are depreciated over their useful lives from three tofifteen years. Leasehold improvements are depreciated over the shorter of their estimated useful lives or the remaining term of the associated lease. Lease terms begin on the date the Company takes possession under the lease and include option periods where failure to exercise such options would result in an economic penalty.

Other Assets

Other assets include liquor license acquisition costs and costs to fulfill obligations under the Company’s management and license agreements.

Intangible Assets

Intangible assets consist of the following (in thousands):

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 $0.1 million each of the years ended December 28, 2025 and December 31, 2024. The Company’s estimated aggregate amortization expense for each of the five succeeding fiscal years is $0.1 million annually.

Impairment of Long-Lived Assets

Long-lived assets, which include property and equipment and right-of-use assets for operating leases, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be fully recoverable. The impairment evaluation is generally performed at the individual restaurant level, as we believe this is the lowest level of identifiable cash flows. We believe that historical cash flows, in addition to other relevant facts and circumstances, are the primary basis for estimating future cash flows. Relevant facts and circumstances include, among others, significant underperformance relative to historical or projected future operating results, significant changes in the manner of use of the acquired assets or the strategy for the overall business, and significant negative industry or economic trends. Recoverability of restaurant assets is measured by a comparison of the carrying amount of an individual restaurant’s assets to the estimated identifiable undiscounted future cash flows exclusive of operating lease payments, expected to be generated by those restaurant assets. This process requires the use of estimates and assumptions, which are subject to a high degree of judgment. If the carrying amount of an individual restaurant’s assets exceeds its estimated undiscounted future cash flows, exclusive of operating lease payments, an impairment charge is recognized as the amount by which the carrying amount of the asset exceeds its fair value. The estimated fair value is determined for these assets in accordance with ASC 820, Fair Value Measurement. Property and equipment, net of accumulated depreciation and the operating lease right-of-use assets as of December 28, 2025 were $278.2 million and $253.2 million, respectively. For the year ended December 28, 2025, the Company recorded non-cash impairment charges of $6.4 million on property and equipment, net and operating lease right-of-use-assets recorded in loss on impairment of non-current assets on the consolidated statement of operations and $0.7 million recorded in lease termination expenses on the consolidated statement of operations. No impairment was recognized for the year ended December 31, 2024.

Debt Issuance Costs

Debt issuance costs incurred in connection with the issuance of long-term debt are capitalized and amortized to interest expense based on the term of the related debt agreement using the straight-line method, which approximates the effective interest method. The Company has recorded debt issuance costs related to the revolving credit facility in other assets on the consolidated balance sheets. The portion of debt issuance costs related to the term loan and delayed draw term loan is recorded in long-term debt, net of current portion on the consolidated balance sheets.

Income Taxes

The Company computes income taxes using the asset and liability method. Under this method, deferred income taxes are recognized for differences between the basis of assets and liabilities for financial statement and income tax purposes, using the enacted statutory rate in effect for the year these differences are expected to be taxable or refunded. Deferred income tax expenses or credits are based on the changes in the asset or liability, respectively, from period to period. A deferred tax asset or liability is recognized whenever there are future tax effects from existing temporary differences and operating loss and tax credit carry-forwards. If the Company determines that a deferred tax asset or liability could be realized in a greater or lesser amount than recorded, the deferred tax asset or liability is adjusted and a corresponding adjustment is made to the provision (benefit) for income taxes in the consolidated statements of operations in the period during which the determination is made.

The Company reduces its deferred tax assets by a valuation allowance if it determines that it is more likely than not that some portion or all of these tax assets will not be realized. In making this determination, the Company considers various qualitative and quantitative factors, such as:

The recording of deferred taxes requires significant management judgment regarding the realizability of the asset, interpretation of applicable statutes, the status of various income tax audits, and particular facts and circumstances.

The Company recognizes the tax benefit from an uncertain tax position when it determines that it is more-likely-than-not that the position would be sustained upon examination by taxing authorities. The amount recognized is measured as the largest amount of benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. If the Company derecognizes an uncertain tax position, the Company’s policy is to record any applicable interest and penalties within the provision (benefit) for income taxes in the consolidated statements of operations.

Revenue Recognition

Revenue is derived from restaurant sales, management services and license related operations.

The Company recognizes restaurant revenues, net of discounts, when goods and services are provided. Sales tax amounts collected from customers that are remitted to governmental authorities are excluded from net revenue.

Management agreements typically call for a management fee based on a percentage of revenue, a monthly marketing fee based on a percentage of revenues and an incentive fee based on a managed venue’s net profits. Similarly, royalties from the licensee in license agreements are generally based on a percentage of the licensed restaurant’s revenue. These management, license, franchise and incentive fees are recognized as revenue in the period the restaurant’s sales occur.

The Company recognizes initial licensing fees and upfront fees related to management and license agreements on a straight-line basis over the term of the agreement as a component of management, license, franchise and incentive fee revenue on the consolidated statements of operations.

The Company has a loyalty program, “Friends With Benefits”, to encourage customers to frequent its restaurants. The loyalty rewards program awards a customer one point for every dollar spent. When a customer is part of the rewards program, the obligation to provide future discounts related to points earned is considered a separate performance obligation, to which a portion of the transaction price is allocated. The performance obligation related to loyalty points is deemed to have been satisfied, and the amount deferred in the balance sheet is recognized as revenue, when the points are converted to a reward and redeemed, or the likelihood of redemption is remote. A portion of the transaction price is allocated to loyalty points, if necessary, on a pro-rata basis, based on the stand-alone selling price, as determined by menu pricing and loyalty points terms. As of December 28, 2025 and December 31, 2024 the deferred revenue allocated to loyalty points that have not been redeemed was $0.5 million and $0.2 million, respectively, which is recorded as a component of accrued expenses in the accompanying consolidated balance sheets. The Company expects the loyalty points to be redeemed and recognized over aone-year period.

Gift Cards

Proceeds from the sale of gift cards are recorded as deferred revenue and recognized as revenue when redeemed by the holder. There are no expiration dates on the Company’s gift cards and the Company does not charge any service fees that would result in a decrease to a customer’s available balance.

Although the Company will continue to honor all gift cards presented for payment, it may determine the likelihood of redemption to be remote for certain gift cards due to, among other things, long periods of inactivity. In these circumstances, to the extent the Company determines there is no requirement for remitting balances to government agencies under unclaimed property laws, outstanding gift card balances may then be recognized as breakage in the consolidated statements of operations as a component of owned restaurant net revenue. For the years ended December 28, 2025 and December 31, 2024, the Company recognized $0.7 million and $1.5 million, respectively, in revenue from gift card breakage.

Pre-opening Expenses

Pre-opening expenses for Company owned restaurants are expensed as incurred prior to a restaurant opening for business. Pre-opening expenses for the years ended December 28, 2025 and December 31, 2024 were $5.7 million and $9.5 million, respectively.

Advertising Costs

The Company expenses the cost of advertising and promotions as incurred. Advertising expense was $27.8 million and $21.8 million for the years ended December 28, 2025 and December 31, 2024, respectively.

Leases

Contracts are evaluated to determine whether they contain a lease at inception. The Company’s contracts determined to be or contain a lease include explicitly or implicitly identified assets where the Company has the right to substantially all of the economic benefits of the assets and has the ability to direct how and for what purpose the assets are used during the lease term. If it is determined that the contract contains an operating lease, a right-of-use asset and operating lease liability are recorded on the consolidated balance sheets. A right-of-use asset represents the Company’s right to use the underlying asset and the lease liability represents the Company’s contractually obligated payments. Both the right-of-use asset and the lease liability are recognized as of the commencement date of the lease and are based upon the present value of lease payments due over the course of the lease. The right-of-use asset is reduced by any lease incentives received. For leases that do not have a rate implicit in the lease, the Company’s incremental borrowing rate at the date of commencement is used to determine the present value of the lease payments. The Company’s incremental borrowing rate is the rate of interest that it would have to borrow on a collateralized basis over a similar term on an amount equal to the lease payments in a similar economic environment.

The Company enters into contracts to lease office and restaurant space with terms that expire at various dates through 2047. The lease term is the minimum of the noncancelable period of the lease or the lease term inclusive of reasonably certain renewal periods. The Company considers a number of factors when evaluating whether the options in its lease contracts were reasonably certain of exercise, such as length of time before option exercise, expected value of the leased asset at the end of the initial lease term, importance of the lease to overall operations, costs to negotiate a new lease, and any contractual or economic penalties.

Certain of the Company’s leases also provide for percentage rent, which are variable lease costs determined as a percentage of gross sales in excess of specified, minimum sales targets, as well as other lease costs to reimburse the lessor for real estate tax and insurance expenses, and certain non-lease components that transfer a distinct service to the Company, such as common area maintenance services. These percentage rents and other variable lease costs are not included in the calculation of lease payments when classifying a lease and in the measurement of the lease liability as they do not meet the definition of in-substance, fixed-lease payments under ASC Topic 842, Leases.

Stock-Based Compensation

The Company maintains an equity incentive compensation plan under which it may grant options, warrants, restricted stock or other stock-based awards to directors, officers, key employees and other key individuals performing services to the Company. Restricted stock and restricted stock units (“RSUs”) that vest on the passage of time are valued using the closing stock price on the date of grant. For performance stock units (“PSUs”) with both a market condition and time element, the fair value was calculated using the Monte Carlo Simulation.

Under the plan, vesting of awards can either be based on the passage of time or on the achievement of performance goals. For awards that vest on the passage of time, compensation cost is recognized over the vesting period. Additionally, the Company’s current PSUs that have been granted, were awarded with both a market condition and time element, as such for these performance stock units, the Company recognizes compensation cost over the requisite service period. The Company estimates forfeitures at the time of grant and revises those estimates in subsequent periods if actual forfeitures differ or are expected to differ.

Loss per Share

Basic loss per share is computed using the weighted average number of common shares outstanding during the period and income available to common stockholders. Diluted loss per share is computed using the weighted average number of common shares outstanding during the period plus the dilutive effect of all potential shares of common stock including common stock issuable pursuant to stock options, warrants, PSUs and RSUs. The two-class method for computing loss per share will be utilized when applicable. Refer to Note 11 for the calculations of basic and diluted loss per share.

Segment Reporting

The Company has identified the following three reportable operating segments: STK, Benihana and Grill Concepts. Refer to Note 15 for additional details and certain financial information regarding the Company’s operating segments relating to the years ended December 28, 2025 and December 31, 2024.

Foreign Currency Translation

Assets and liabilities of foreign operations are translated into U.S. dollars at the balance sheet date. Revenues and expenses are translated at average monthly exchange rates. Gains or losses resulting from the translation of foreign subsidiaries represent other comprehensive income (loss) and are accumulated as a separate component of stockholders’ equity. Currency translation gains or losses are recorded in accumulated other comprehensive loss within stockholders’ equity and amounted to a nominal loss during 2025 and a loss of approximately $0.1 million during 2024.

Comprehensive Loss

Comprehensive loss consists of two components: net income and other comprehensive income (loss). The Company’s other comprehensive income (loss) is comprised of foreign currency translation adjustments. All of the Company’s foreign currency translation adjustments relate to wholly owned subsidiaries of the Company.

Recent Accounting Pronouncements

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 has incorporated this ASU retrospectively into the income tax footnote within this Annual Report Form 10-K for the year ended December 28, 2025.

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, which requires detailed disclosure amounts for purchases of inventory, employee compensation, depreciation, intangible asset amortization, and depreciation, depletion and amortization as part of oil and gas producing activities in each relevant expense caption on the income statement. The ASU requires companies to include amounts already required by GAAP in the same disclosure, provide a qualitative description of remaining amounts not separately disaggregated, and disclose the total selling expenses along with the definition of selling expenses in annual reports. The amendment is effective for fiscal years beginning after December 15, 2026, with early adoption is permitted. The amendment should be applied prospectively; however retrospective application is permitted. The Company is evaluating the impact of adopting this ASU on its disclosures.

Note 3 – Benihana Acquisition

On May 1, 2024, the Company acquired 100% of the issued and outstanding equity interests of Safflower Holdings Corp. and its affiliates comprising of 93 company owned restaurants and 12 franchised restaurants. The Company purchased the equity 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 (in thousands):

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 approximately $11.2 million for transition and related integration efforts in 2025. The Benihana Acquisition resulted in actual revenues of $339.7 million and net loss of $5.8 million in the consolidated statements of operations for the year ended December 31, 2024. The net loss that resulted from the Benihana Acquisition is primarily due to the allocation of interest expense, transaction, transition and integration expenses.

The following unaudited pro forma results of operations for December 31, 2024 give effect to the Benihana Acquisition as if it had occurred on January 1, 2024 (in thousands):

Note 4 – Property and Equipment, net

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

Depreciation related to property and equipment amounted to $42.1 million and $33.5 million for the years ended December 28, 2025 and December 31, 2024, respectively. The Company also recorded $4.0 million in accelerated depreciation relating to property and equipment for the restaurants closed or to be closed, which is presented in lease termination and exit expenses within the consolidated statement of operations. The Company depreciates construction in progress upon such assets being placed into service.

Note 5 – Accrued Expenses

Accrued expenses consist of the following (in thousands):

Note 6 – Long Term Debt

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

Interest expense for the Company’s debt arrangements, excluding the amortization of debt issuance costs and fees, was $37.1 million and $28.8 million for the years ended December 28, 2025 and December 31, 2024, respectively. Capitalized interest was $1.3 million and $2.4 million for the years ended December 28, 2025 and December 31, 2024, respectively.

As of December 28, 2025, the Company had $5.8 million in standby letters of credit for certain restaurants and $27.2 million available in its revolving credit facility, subject to certain conditions.

Credit and Guaranty 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”), which allows up to $10.0 million of which will be available in the form of letters of credit. As of December 28, 2025, the Company had borrowings of $7.0 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 December 28, 2025 was 10.33%.

As of December 28, 2025, the Company had $0.4 million of debt issuance costs and $10.4 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 $1.1 million of debt original issuance discount recorded in Other Assets on the 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 December 28, 2025, the aggregate amount outstanding under the Equipment Security Notes was approximately$2.9 million.

Debt Extinguishment

On October 4, 2019, the Company entered into the credit agreement with Goldman Sachs Bank NA, 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 consolidated statements of operations.

Note 7 – Fair Value of Financial Instruments

Cash and cash equivalents, credit card receivable, 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 year ended December 28, 2025, the Company completed an impairment analysis using Level 3 inputs on assets related to restaurants that have upcoming lease expirations using a discounted cash flow model. The Company recorded non-cash impairment charges of $6.4 million on property and equipment, net and operating lease right-of-use-assets recorded in loss on impairment of non-current assets on the consolidated statement of operations and $0.7 million recorded in lease termination expenses on the consolidated statement of operations.

Goodwill and indefinite-lived intangible assets are measured and disclosed at fair value on a nonrecurring basis if an impairment is identified. During the year ended December 28, 2025, the Company completed an impairment analysis using Level 3 inputs on goodwill, using a weighting of the income approach using a discounted cash flow analysis and the market approach using a guideline public company method. The fair value of the trade names and trademarks is estimated using the relief from royalty method. For the Benihana reporting unit and tradename and RA Sushi tradename, key assumptions include projected revenue growth and operating expenses, discount rates, royalty rates and other factors that could affect fair value or otherwise indicate potential impairment. For the Kona Grill tradename, key assumptions include projected weighted average revenue growth of approximately-1.8%, driven by the optimization of the Grill Concepts that took place during 2025 and 2026; discount rate of approximately 10.5%; royalty rate of approximately 1.5%; and other factors that could affect fair value or otherwise indicate potential impairment. The Company recorded non-cash impairment charges of$4.2 million on the Kona Grill tradename within intangible assets on the consolidated balance sheets recorded in loss on impairment of non-current assets on the consolidated statement of operations.

The Company’s long-term debt, which is valued using Level 2 inputs, approximates fair value as such debt bears interest at variable rates which approximates market rates.

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

The components of loss before provision (benefit) for income taxes were as follows (in thousands):

The components of the Company’s provision (benefit) for income taxes were as follows (in thousands):

The Company’s effective tax rate differs from the statutory rates as follows:

(1) For the year ending December 28, 2025 and December 31, 2024, state and local income taxes in California, Florida, and New York comprise the majority of the domestic state and local income taxes.

The income tax effects of temporary differences that give rise to significant portions of deferred tax assets and liabilities are as follows (in thousands):

Tax Carryforwards

As of December 28, 2025, the Company has federal net operating loss (“NOL”) carryforwards of $30.5 million which have no expiration date. As of December 28, 2025, the Company has federal FICA tip credit carryforwards of $57.2 million which have expiration dates from 2033 through 2046. The Company has various state NOL carryforwards. The determination of the state NOL carryforwards is dependent upon apportionment percentages and state laws that can change from year to year and impact the amount of such carryforwards. As of December 28, 2025, the Company has $3.5 million in state NOL carryforwards after applying applicable apportionment percentages and tax rates. The state NOLs expire at various dates from 2037 to 2045.

In assessing the realizability of deferred tax assets, the Company evaluates whether it is more likely than not that the deferred tax assets will be realized. In the assessment of the valuation allowance, appropriate consideration was given to all positive and negative evidence including current operating results, tax planning strategies and forecasts of future earnings. A significant piece of objective negative evidence evaluated was the cumulative loss incurred over the three-year period ended December 28, 2025. As of December 28,2025 and December 31, 2024, the Company had a valuation allowance of$75.1 million and$4.2 million, respectively.

Uncertain tax positions

The following table summarizes the activity related to the Company’s uncertain tax positions (in thousands):

Included in the balance of unrecognized tax benefits as of December 28, 2025 are tax benefits that, if recognized, would result in adjustments to taxes payable. The Company recognizes interest accrued related to unrecognized tax benefits and penalties as income tax expense. Related to the unrecognized tax benefits noted above, we accrued interest of $0.2 million as of December 28, 2025 and December 31, 2024.

The Company is subject to income taxes in the U.S. federal jurisdiction, and the various states and local 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. The Company’s federal tax filings remain subject to examination for federal tax years 2022 through 2025. The Company’s state and local tax filings remain subject to examination for tax years 2021 through 2025. NOL carryforwards are subject to examination regardless of whether the tax year in which they are generated has been closed by statute. The amount subject to disallowance is limited to the NOL utilized. Accordingly, the Company may be subject to examination for prior NOLs generated as such NOLs are utilized.

The Company’s foreign income tax returns prior to fiscal year 2022 are closed and management continually evaluates expiring statutes of limitations, audits, proposed settlements, changes in tax law and new authoritative rulings.

The following table summarizes the Company’s income taxes paid, net of refunds, as of December 28, 2025 and December 31, 2024 (in thousands):

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):

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

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

Note 10 – Leases

The components of lease expense for the period were as follows (in thousands):

The components of finance lease assets and liabilities on the consolidated balance sheet were as follows (in thousands):

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

The Company has entered into seven operating leases for future restaurants that have not commenced as of December 28, 2025. The present value of the aggregate future commitment related to these leases totals $25.7 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 December 28, 2025, maturities of the Company’s operating lease liabilities are as follows (in thousands):

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

Note 11 – Earnings (loss) per share

Basic loss per share is computed using the weighted average number of common shares outstanding during the period and loss available to common stockholders. Diluted loss per share is computed using the weighted average number of common shares outstanding during the period plus the dilutive effect of all 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 years ended December 28, 2025 and December 31, 2024, loss per share was calculated as follows (in thousands, except loss per share and related share data):

For the years ended December 28, 2025 and December 31, 2024, stock options, warrants and restricted share units totaling 3.5 million and 2.5 million, respectively, were determined to be anti-dilutive and were therefore excluded from the calculation of diluted loss per share.

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 years ended December 28, 2025 and December 31, 2024, the Company recorded paid-in-kind dividends and accretion of the Series A Preferred Stock of $33.2 million and $19.1 million, respectively.

Redemption Rights

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 on or after July 29, 2029, 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 anytime 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 consolidated balance sheets.

Note 13 – Stockholders’ Equity

Preferred Stock

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

Common Stock

The Company is authorized by its amended and restated certificate of incorporation to issue up to 75.0 million shares of common stock, par value $0.0001 per share. As of December 28, 2025 and December 31, 2024, there are 31.2 million and 31.0 million shares of common stock outstanding, respectively.

Stock Purchase Program

In September 2022, the Company’s Board of Directors authorized a repurchase program of up to $10.0 million of outstanding common stock. In May 2023, the Company’s Board of Directors authorized an additional $5.0 million to this program. In March 2024, the Company’s Board of Directors authorized an additional $5.0 million of repurchases under this program.

During 2025 and 2024, the Company purchased 0.4 million and 0.7 million shares for aggregate consideration of $1.1 million and $3.2 million, respectively. As of December 28, 2025, the Company purchased 3.4 million shares for $19.3 million under the 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 December 28, 2025.

Dividends

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 did not issue dividends related to its common stock in 2025 or 2024.

Note 14 – Employee Benefit Plans

Defined Contribution Retirement Plan

The Company sponsors qualified defined contribution retirement plans (the “401(k) Plans”) covering all eligible employees, as defined in the 401(k) Plans. The 401(k) Plans allow participating employees to defer the receipt of a portion of their compensation, on a pre-tax or post-tax basis, and contribute such amount to one or more investment options. Employer contributions to the plans are at the discretion of the Company. The Company did not accrue or make any employer contributions in 2025 and 2024.

Equity Incentive Plan

The Company provides equity-based compensation to directors, officers, key employees and other key individuals performing services for the Company under its 2019 Equity Incentive Plan (the “Equity Incentive Plan”). The Equity Incentive Plan provides for the granting of stock options, warrants, restricted stock or other stock-based awards. All awards are required to be approved by the Board or a designated committee of the Board. Options are generally granted with an exercise price equal to fair market value of the Company’s common stock on the date of grant and an expiration date afterten years. Vesting of options and restricted stock can either be based on the passage of time or on the achievement of performance goals. The Board has the authority to amend, modify or terminate the Equity Incentive Plan, subject to any required approval by the Company’s stockholders under applicable law or upon advice of counsel. No such action would affect any options previously granted under the Equity Incentive Plan without the consent of the holders.

Effective May 18, 2022, the Board and the Company’s stockholders approved a 4,500,000 increase to the number of shares of common stock authorized for issuance under the Equity Incentive Plan, bringing the maximum aggregate limit to 11,573,922 shares. As of December 28, 2025, the Company had 1,713,979 shares available for issuance under the Equity Incentive Plan.

Stock-based compensation cost for 2025 and 2024 was $5.4 million and $6.0 million, respectively, and is included in general and administrative expenses in the consolidated statements of operations. Included in stock-based compensation cost was $0.8 million and $0.7 million of unrestricted stock granted to directors for 2025 and 2024,

respectively. Such grants were awarded consistent with the Board’s compensation practices. Stock-based compensation for both 2025 and 2024 included $0.9 million of compensation costs for market condition-based restricted stock units (“PSU”). Refer to discussion of performance stock units below.

Stock Option Activity

Stock options in the table below include both time-based and market condition-based awards.

Changes in outstanding stock options during the years ended December 28, 2025 and December 31, 2024 were as follows:

A summary of the status of the Company’s non-vested stock options as of December 28, 2025 and December 31, 2024 and changes during the years then ended, is presented below:

The fair value of options that vested in 2025 and 2024 was $0.9 million andzero, respectively.

Restricted Stock Unit Activity

The Company issues restricted stock units (“RSUs”) under the Equity Incentive Plan. RSUs in the table below include time-based awards that typically vest in equal installments over a three year period. 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 2025 and 2024 is presented below:

As of December 28, 2025, the Company had approximately $3.3 million of total unrecognized compensation costs related to restricted stock awards, which will be recognized over a weighted average period of 1.8 years.

The fair value of RSUs vested during 2025 and 2024 was $3.7 million in both years.

Performance Stock Unit Activity

The Company issues PSUs under the Equity Incentive 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 specified 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 and volatility of 71%. 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 2025 and 2024 is presented below:

As of December 28, 2025, the Company has approximately $0.8 million of unrecognized compensation costs related to PSUs, which will be recognized over a weighted average period of 1.1 years

Note 15 – Segment Reporting

The Company has identified its reportable operating segments as follows:

Presented within Other, which is not a reportable operating segment, is sales and expenses that relate to STK Meat Market, an e-commerce platform that offers signature steak cuts nationwide, the Company’s major off-site events group, which supports all brands and venue concepts, and revenue generated from gift card programs.

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 years ended December 28, 2025 and December 31, 2024 for each segment is provided below (in thousands).

Note 16 – Geographic Information

Certain financial information by geographic location relating to the years ended December 28, 2025 and December 31, 2024 is provided below (in thousands).

The Company’s property and equipment, net is located within the United States.

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 in its consolidated financial statements in accordance with ASC 450, Contingencies. 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.