CHEESECAKE FACTORY INC

Current report

The risk factor set forth below updates, and should be read together with, the risk factors disclosed in our Annual Report. Except as set forth below, there have been no material changes to the risk factors disclosed in our Annual Report.

Current report

We may be unable to raise the funds necessary to repurchase the Notes for cash following a fundamental change, or to pay the cash amounts due upon conversion, and our other indebtedness limits our ability to repurchase the Notes or pay cash upon their conversion.

Current report

Noteholders of our outstanding 2030 Notes may, subject to limited exceptions, require us to repurchase their 2030 Notes following a “fundamental change” (which is defined in the indenture governing the 2030 Notes) at a cash repurchase price generally equal to the principal amount of the 2030 Notes to be repurchased, plus accrued and unpaid interest, if any. Upon maturity of the 2030 Notes, we must pay their principal amount and accrued and unpaid interest in cash, unless they have been previously repurchased, redeemed or converted. In addition, because the last reported sale price per share of our common stock exceeded 130% of the conversion price for the 2030 Notes for at least 20 trading days during the 30 consecutive trading days ending on, and including, September 29, 2026, the 2030 Notes are convertible by holders at their option during the fiscal quarter ending December 29, 2026.

Current report

All conversions of the 2030 Notes will be settled partially or entirely in cash. We may not have enough available cash or be able to obtain financing at the time we are required to repurchase the 2030 Notes or pay the cash amounts due upon conversion. In addition, applicable law, regulatory authorities and the Loan Agreement or any future indebtedness may restrict our ability to repurchase the 2030 Notes or pay the cash amounts due upon conversion. For example, the Loan Agreement restricts us from paying cash upon conversion of the 2030 Notes in an amount that exceeds the sum of (i) the principal amount being converted and (ii) any payments received by us or any of our subsidiaries pursuant to the exercise, settlement or termination of any related permitted bond hedge transaction.

Current report

Furthermore, the Loan Agreement places several restrictions on our ability to repurchase the 2030 Notes upon a fundamental change. Under the Loan Agreement, we are permitted to repurchase 2030 Notes upon a fundamental change only if (i) no default or event of default exists and (ii) our pro forma net adjusted leverage ratio (as measured in accordance with the Loan Agreement) does not exceed 4.25 to 1.00 and our EBITDAR to interest and rental expense ratio (as measured in accordance with the Loan Agreement) is at least 1.90 to 1.00.

Current report

Our failure to repurchase the 2030 Notes or pay the cash amounts due upon conversion when required will constitute a default under the indenture governing the 2030 Notes. A default under the indenture governing the 2030 Notes or the fundamental change itself could also lead to a default under the Loan Agreement and agreements governing our other or future indebtedness, which may result in that other indebtedness becoming immediately payable in full. We may not have sufficient funds to satisfy all amounts due under such indebtedness and the 2030 Notes.