GEN Restaurant Group, Inc.

Previous wording

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

Current wording

GEN Restaurant Group is an Asian casual dining restaurant concept that offers an extensive menu of traditional Korean and Korean-American food, including high-quality meats, poultry, and seafood, all at a superior value. Founded in 2011 by two Korean immigrants, since the opening of our first restaurant in September 2011 we have grown to 57 company-owned restaurants located in California, Arizona, Hawaii, Nevada, Texas, New York, New Jersey, Oregon, Washington, Florida, North Carolina, and South Korea. Our restaurants have modern décor, lively Korean pop music playing in the background and embedded grills in the center of each table. We believe we offer our customers a unique dining experience in which guests cook the majority of the food themselves, reducing the need for chefs and servers and providing a similar customer experience across our restaurants.

Previous wording

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

Current wording

During the first nine months of 2025, we opened 15 restaurants in the following locations: Orlando, FL, Edison, NJ, Cary, NC, La Jolla, CA and five in Texas (Waco, El Paso, San Antonio, and two in Austin) and six in South Korea; and we closed one restaurant. In addition we have sixteen restaurants under development, for which we expect to complete construction between 2025 and 2026. We will also be offering ready-to-cook meats at over 600 grocery stores in California and Hawaii.

Previous wording

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

Current wording

On September 29, 2023, the Company entered into a loan agreement for a $20.0 million line of credit with PCB Bank. The line of credit matures on September 25, 2026, and bears interest at a variable rate per annum equal to 7.50% as of September 30, 2025. No amounts are outstanding under the line of credit as of September 30, 2025.

Previous wording

On April 25, 2025, the Company entered into a loan agreement for a $2.0 million loan with PCB Bank. The loan matures on April 25, 2027, and bears interest at a variable interest rate per annum equal to 7.75% as of June 30, 2025. The Company makes quarterly payments in the amount of $250,000, in addition to monthly interest payments. The balance as of June 30, 2025 was $1.8 million.

Current wording

On April 25, 2025, the Company entered into a loan agreement for a $2.0 million loan with PCB Bank. The loan matures on April 25, 2027, and bears interest at a variable interest rate per annum equal to 7.50% as of September 30, 2025. The Company makes quarterly payments in the amount of $250,000, in addition to monthly interest payments. The balance as of September 30, 2025 was $1.5 million.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

Revenues. Revenues were $50.4 million for the three months ended September 30, 2025, compared to $49.1 million for the three months ended September 30, 2024, an increase of $1.3 million, or 2.7%. This reflects revenue increases due to having 57 restaurants open in the three months ended September 30, 2025 compared to 41 restaurants open in the three months ended September 30, 2024.

Previous wording

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

Current wording

Food costs. Food costs were $17.5 million for the three months ended September 30, 2025, compared to $15.4 million for the three months ended September 30, 2024, an increase of $2.0 million, or 13.6%. The increase in food costs reflects inflationary cost increases and more restaurants in operation. As a percentage of revenue, food costs increased to 34.8% from 31.4%.

Previous wording

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

Current wording

Occupancy expenses. Occupancy expenses were $5.4 million for the three months ended September 30, 2025 compared to $4.1 million for the three months ended September 30, 2024, an increase of $1.3 million, or 31.9%. The increase in occupancy expenses reflects the addition of 16 new locations. As a percentage of revenue, occupancy expenses were 10.8% in the three months ended September 30, 2025 compared to 8.4% in the three months ended September 30, 2024.

Previous wording

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

Current wording

Operating expenses. Operating expenses were $6.2 million for the three months ended September 30, 2025 compared to $5.7 million for the three months ended September 30, 2024, an increase of $0.4 million, or 7.8%, as expenses increased to support revenue growth and reflected inflationary cost increases. As a percentage of revenue, operating expenses were 12.2% in the three months ended September 30, 2025 and 11.7% in the three months ended September 30, 2024.

Previous wording

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

Current wording

Depreciation and amortization expenses. Depreciation and amortization expenses were $2.3 million for the three months ended September 30, 2025 and $1.7 million for the three months ended September 30, 2024. As a percentage of revenue, depreciation and amortization expenses at the restaurant-level were 4.5% during the three months ended September 30, 2025 and 3.5% during the three months ended September 30, 2024, with the increase related to more restaurants in operation.

Previous wording

Pre-opening costs. Pre-opening costs were $2.1 million for the three months ended June 30, 2025 compared to $1.6 million for the three months ended June 30, 2024.This represents six additional restaurants in development during the three months ended June 30, 2025 as compared to the three months ended June 30, 2024.

Current wording

Pre-opening costs. Pre-opening costs were $2.3 million for the three months ended September 30, 2025 compared to $1.8 million for the three months ended September 30, 2024.This represents eight additional restaurants in development during the three months ended September 30, 2025 as compared to the three months ended September 30, 2024.

Previous wording

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

Current wording

General and administrative expenses. General and administrative expenses were $6.5 million for the three months ended September 30, 2025 compared to $5.2 million for the three months ended September 30, 2024, an increase of $1.3 million, or 23.8%. The increase is primarily due to additional marketing and personnel costs for the expansion of restaurants in development. As a percentage of revenue, general and administrative expenses increased from 10.6% for the three months ended September 30, 2024 to 12.8% for the three months ended September 30, 2025.

Previous wording

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

Current wording

Interest income (expense), net. During the three months ended September 30, 2025, interest expense, net was $121 thousand compared to $196 thousand of interest income, net during the three months ended September 30, 2024. The net interest income was primarily due to the interest income earned on the proceeds from the IPO transaction and the reduction of proceeds used for development of new restaurants.

Previous wording

Revenues. Revenues were $112.4 million for the six months ended June 30, 2025, compared to $104.6 million for the six months ended June 30, 2024, an increase of $7.8 million, or 7.4%. This reflects increased revenue from having 10 additional restaurants open in the six months ended June 30, 2025 compared to 40 restaurants open in the six months ended June 30, 2024.

Current wording

Revenues. Revenues were $162.8 million for the nine months ended September 30, 2025, compared to $153.7 million for the nine months ended September 30, 2024, an increase of $9.0 million, or 5.9%. This reflects increased revenue from having 16 additional restaurants open in the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

Previous wording

Food costs. Food costs were $37.9 million for the six months ended June 30, 2025, compared to $34.7 million for the six months ended June 30, 2024, an increase of $3.2 million, or 9.3%. The increase in food costs reflects more restaurants in operation and inflationary cost increases. As a percentage of revenue, food costs increased from 33.1% to 33.7%.

Current wording

Food costs. Food costs were $55.4 million for the nine months ended September 30, 2025, compared to $50.1 million for the nine months ended September 30, 2024, an increase of $5.3 million, or 10.6%. The increase in food costs reflects inflationary cost increases and more restaurants in operation. As a percentage of revenue, food costs increased from 32.6% to 34.0%.

Previous wording

Payroll and benefits. Payroll and benefits costs were $34.7 million for the six months ended June 30, 2025, compared to $32.5 million for the six months ended June 30, 2024, an increase of $2.2 million, or 6.9%. The increase in payroll and benefits costs reflects the staffing needs to support the higher customer volumes from new and existing restaurants as well as inflationary payroll increases. As a percentage of revenue, payroll and benefits costs decreased from 31.1% to 30.9%.

Current wording

Payroll and benefits. Payroll and benefits costs were $49.1 million for the nine months ended September 30, 2025, compared to $47.5 million for the nine months ended September 30, 2024, an increase of $1.6 million, or 3.5%. The increase in payroll and benefits costs reflects the staffing needs to support the higher customer volumes from new and existing restaurants as well as inflationary payroll increases. As a percentage of revenue, payroll and benefits costs decreased from 30.9% to 30.2%.

Previous wording

Occupancy expenses. Occupancy expenses were $10.2 million for the six months ended June 30, 2025 compared to $8.7 million for the six months ended June 30, 2024, an increase of $1.5 million, or 17.6%. The increase in occupancy expenses reflects the addition of 10 new locations. As a percentage of revenue, occupancy expenses were 9.1% in the six months ended June 30, 2025 4 compared to 8.3% in the six months ended June 30, 2024.

Current wording

Occupancy expenses. Occupancy expenses were $15.6 million for the nine months ended September 30, 2025 compared to $12.8 million for the nine months ended September 30, 2024, an increase of $2.8 million, or 22.2%. The increase in occupancy expenses reflects the addition of 15 new locations. As a percentage of revenue, occupancy expenses were 9.6% in the nine months ended September 30, 2025 compared to 8.3% in the nine months ended September 30, 2024.

Previous wording

Operating expenses. Operating expenses were $11.8 million for the six months ended June 30, 2025 compared to $10.5 million for the six months ended June 30, 2024, an increase of $1.4 million, or 13.1%, as expenses increased to support revenue growth and reflected inflationary costs increases. As a percentage of revenue, operating expenses were 10.5% for the six months ended June 30, 2025 compared to 10.0% for the six months ended June 30, 2024.

Current wording

Operating expenses. Operating expenses were $18.0 million for the nine months ended September 30, 2025 compared to $16.2 million for the nine months ended September 30, 2024, an increase of $1.8 million, or 11.2%, as expenses increased to support revenue growth and reflected inflationary costs increases. As a percentage of revenue, operating expenses were 11.1% for the nine months ended September 30, 2025 compared to 10.5% for the nine months ended September 30, 2024.

Previous wording

Depreciation and amortization expenses. Depreciation and amortization expenses were $4.2 million for the six months ended June 30, 2025 and $3.2 million for the six months ended June 30, 2024. As a percentage of revenue, depreciation and amortization expenses at the restaurant-level were 3.7% during the six months ended June 30, 2025 and 3.1% during the six months ended June 30, 2024, with the increase related to more restaurants in operation.

Current wording

Depreciation and amortization expenses. Depreciation and amortization expenses were $6.5 million for the nine months ended September 30, 2025 and $4.9 million for the nine months ended September 30, 2024. As a percentage of revenue, depreciation and amortization expenses at the restaurant-level were 4.0% during the nine months ended September 30, 2025 and 3.2% during the nine months ended September 30, 2024, with the increase related to more restaurants in operation.

Previous wording

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

Current wording

Pre-opening costs. Pre-opening costs were $7.0 million for the nine months ended September 30, 2025 compared to $5.3 million for the nine months ended September 30, 2024. This increase was due to more restaurants under development in 2025 than in 2024.

Previous wording

General and administrative expenses. General and administrative expenses were $12.8 million for the six months ended June 30, 2025 compared to $9.7 million for the six months ended June 30, 2024, an increase of $3.0 million, or 31.3%. The increase is primarily due to additional marketing and personnel costs in expansion of restaurants in development.

Current wording

General and administrative expenses. General and administrative expenses were $19.2 million for the nine months ended September 30, 2025 compared to $15.0 million for the nine months ended September 30, 2024, an increase of $4.3 million, or 28.7%. The increase is primarily due to additional marketing and personnel costs in expansion of restaurants in development.

Previous wording

Employee retention credits. During the three months ended June 30, 2025 and 2024, we received approximately $0.3 million and $0.2 million, respectively, in employee retention credits from the IRS.

Current wording

Employee retention credits. During the nine months ended September 30, 2025 and 2024, we received approximately $0.3 million and $0.2 million, respectively, in employee retention credits from the IRS.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

As of September 30, 2025 we had $4.8 million of cash and ($27.3) million of working capital deficit, which is calculated by subtracting current liabilities from current assets, compared with $23.7 million in cash and ($7.2) million of working capital deficit as of December 31, 2024. On June 30, 2023, we completed the IPO of 4,140,000 shares of Class A common stock. The public offering price per share sold in the IPO was $12.00 per share, resulting in aggregate net proceeds of approximately $46.2 million after deducting the underwriting discounts and commission and offering expenses payable.

Previous wording

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

Current wording

Our primary uses of cash are for operational expenditures and capital investments, including new restaurants, costs incurred for restaurant remodels and restaurant equipment and fixtures. During the first nine months of 2025, we opened 15 new restaurants which were all self-funded. There is no guarantee that if we need to raise any additional capital that we will be able to do so.

Previous wording

During May 2025, our Board of Directors declared a $0.03 per share dividend distribution on our outstanding common stock for shareholders of record as of June 9, 2025, which was paid on June 23, 2025 for an amount of $988 thousand.

Current wording

During May 2025, our Board of Directors declared a $0.03 per share dividend distribution on our outstanding common stock for shareholders of record as of June 9, 2025, which was paid on June 23, 2025, resulting in an aggregate total payment for all dividends of $988 thousand.

Previous wording

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

Current wording

Net cash provided by operating activities during the nine months ended September 30, 2025 was $3.8 million, the result of net loss of $7.3 million, adjusted by non-cash charges of depreciation and amortization of $6.6 million, amortization of operating lease assets of $5.0 million, and stock-based compensation expense of $2.2 million. The net cash outflows from changes in operating assets and liabilities were collectively a decrease of $1.7 million.

Previous wording

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

Current wording

Net cash provided by operating activities during the nine months ended September 30, 2024 was $10.5 million, the result of net income of $5.9 million, adjusted by non-cash charges of depreciation and amortization of $5.0 million, and amortization of operating lease assets of $5.4 million, stock-based compensation of $2.2 million and a reduction related to the gain on the acquisition of the remaining ownership interest in GKBH. The net cash outflows from changes in operating assets and liabilities were collectively a decrease of $4.6 million.

Previous wording

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

Current wording

Net cash used in investing activities during the nine months ended September 30, 2025 was $22.5 million, reflecting the purchase of property and equipment.

Previous wording

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

Current wording

Net cash used in investing activities during the nine months ended September 30, 2024 was $22.7 million, reflecting $16.7 million for the purchase of property and equipment and a $6.0 million payment for the acquisition of the remaining ownership interest in GKBH.

Previous wording

Net cash used in financing activities during the six months ended June 30, 2025 was $3.2 million, primarily due to payment of $3.0 million on the line of credit and $200 thousand on the repurchase of common stock.

Current wording

Net cash used in financing activities during the nine months ended September 30, 2025 was $0.3 million, primarily due to payments of $5.0 million on the line of credit and third party notes payable, $800 thousand in distributions paid on non-controlling interests, $200 thousand on the repurchase of common stock, and $200 thousand in dividends paid on common stock, partially offset by proceeds from third party loans of $6.0 million.

Previous wording

Net cash used in financing activities during the six months ended June 30, 2024 was $1.1 million, primarily due to payments to members for advances of $0.9 million.

Current wording

Net cash used in financing activities during the nine months ended September 30, 2024 was $1.6 million, primarily due to proceeds from third party loans of $3.0 million, partially offset by payments to members and repayments of third party loans.

Previous wording

As of June 30, 2025, we had $9.3 million in contractual obligations relating to debt, including EIDL loans payable. All contractual obligations are expected to be paid during the next 12 months utilizing cash and cash equivalents on hand and provided by operating activities. For operation lease obligations, See “Note 10 - Leases” in the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.

Current wording

As of September 30, 2025, we had $13.3 million in contractual obligations relating to debt, including EIDL loans payable. All contractual obligations are expected to be paid during the next 12 months utilizing cash and cash equivalents on hand and provided by operating activities. For operation lease obligations, See “Note 10 - Leases” in the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.

Previous wording

Our office leases provide for fixed minimum rent payments. Our restaurant leases provide for fixed minimum rent payments and some require additional contingent rent payments based upon sales in excess of specified thresholds. When achievement of such sales thresholds is deemed probable, contingent rent is accrued in proportion to the sales recognized in the period. For operating leases that include free-rent periods and rent escalation clauses, we recognize rent expense based on the straight-line method. For the purpose of calculating rent expenses under the straight-line method, the lease term commences on the date we obtain control of the property. Lease incentives used to fund leasehold improvements are recognized when earned and reduce the operating right-of-use asset related to the lease. These are amortized through the operating right-of-use asset as reductions of expense over the lease term. Restaurant lease expenses are included in the occupancy expenses line item, while office lease expenses are included in the general and administrative expenses line item in the accompanying condensed consolidated statements of operations.

Current wording

Our office leases provide for fixed minimum rent payments. Our restaurant leases provide for fixed minimum rent payments and some require additional contingent rent payments based upon sales in excess of specified thresholds. When achievement of such sales thresholds is deemed probable, contingent rent is accrued in proportion to the sales recognized in the period. For operating leases that include free-rent periods and rent escalation clauses, we recognize rent expense based on the straight-line method. For the purpose of calculating rent expenses under the straight-line method, the lease term commences on the date we obtain control of the property. Lease incentives used to fund leasehold improvements are recognized when earned and reduce the operating right-of-use asset related to the lease. These are amortized through the operating right-of-use asset as reductions of expense over the lease term. Restaurant lease expenses are included in the occupancy expenses line item, while office lease expenses are included in the general and administrative expenses line item in the accompanying condensed consolidated statements of Comprehensive Income (Loss).