GEN Restaurant Group, Inc.

Organization and Description of Business

The accompanying condensed consolidated financial statements represent the condensed consolidated balance sheets, statements of comprehensive loss, changes in permanent equity (deficit), and cash flows of GEN Restaurant Group, Inc. and its consolidated subsidiaries (the “Company”), including GEN Restaurant Companies, LLC (the “Operating Company”).

The following table lists the Company’s restaurants in operation as of June 30, 2026:

The Company also has the following entities:

The Company operates restaurants which are located in California, Arizona, Florida, Hawaii, Nevada, Washington, New York, Texas, Oregon, North Carolina, and in the country of South Korea, specializing in a variety of special flavored meats for Korean barbeque.

As of June 30, 2026, the above entities are collectively owned 100% by the controlling group. As of June 30, 2026 and December 31, 2025, there were 54 and 57 restaurants in operation, respectively. During the three months ended June 30, 2026, the Company closedsix restaurants, includingtwo in Korea, (GEN Guwol and KAN Sushi Guwol) andfour restaurants (San Antonio, Texas, Mountain View, California, Edison, New Jersey and Jacksonville, Florida) that were closed as part of the previously disclosed Chubby Cattle transaction and became unconsolidated equity method investments.

Organization

GEN Restaurant Group, Inc. (“GEN Inc.”) was formed as a Delaware corporation on October 28, 2021 and is based in Cerritos, California. As the managing member of the Operating Company, GEN Inc. operates and controls all the business and affairs of the Operating Company, and through the Operating Company and its consolidated subsidiaries, conducts its business. Unless the context otherwise requires, references to the “Company” refer to GEN Inc., and its consolidated subsidiaries, including the Operating Company.

(2)

Basis of Presentation and Summary of Significant Accounting Policies

(a)

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company, collectively, have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. As such, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (the “Annual Report”). These unaudited condensed consolidated financial statements were prepared on the same basis as the audited consolidated financial statements, and, in the opinion of management, reflect all adjustments (all of which were considered of a normal recurring nature) considered necessary to present fairly the Company’s financial results. The results for the three and six months ended June 30, 2026 are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2026 and for any other interim period or future year.

(b)

Recent Accounting Pronouncements

In December 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-11, Narrow Scope Improvements (Topic 270): Interim Reporting. This update makes targeted, narrow-scope improvements to underlying principles of interim reporting. The amendments in this ASU are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. The Company is in the process of evaluating the impact that the adoption of this ASU will have on the consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-03, “Disaggregation of Income Statement Expenses” and in January 2025, the FASB issued ASU 2025-01, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures”, which require public companies to include additional disclosure of the nature of expenses included in the income statement as well as disclosures about specific type of expense included in the expense captions presented in the income statement. ASU 2024-03, as clarified by ASU 2025-01, is effective for fiscal years beginning after December 15, 2026. The Company is in the process of evaluating the impact that the adoption of these ASUs will have on the consolidated financial statements and related disclosures.

(c)

Use of Estimates

The preparation of financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities in the accompanying unaudited condensed consolidated financial statements of the Company. The accompanying condensed consolidated financial statements have been prepared in conformity with GAAP and applicable rules, and regulations of the SEC regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. As such, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Annual Report.

(d)

Goodwill

Goodwill is calculated under Accounting Standards Codification (“ASC”) 805-30-30, which represents the excess of the fair value of purchase consideration of an acquired business over the fair value of the identifiable net assets acquired. Goodwill is not amortized but is tested for impairment at a reporting unit level on an annual basis, or more frequently if circumstances change or an event occurs that would more likely than not reduce the fair value of a reporting unit below its carrying amount.

(e)

Business Combinations

The Company accounts for business combinations under the acquisition method of accounting in accordance with ASC Topic 805, “Business Combinations” (“ASC 805”). Under the acquisition method, we recognize 100% of the assets we acquire and liabilities we assume, regardless of the percentage we own, at their estimated fair values as of the date of acquisition. Any excess of the purchase price over the fair value of the net assets and other identifiable intangible assets we acquire is recorded as goodwill. The assets we acquire, and liab ilities we assume from contingencies, are recognized at fair value if we can readily determine the fair value during the measurement period. The operating results of the business the Company acquired are included in the consolidated statements of operations from the date of acquisition.

(f)

Equity-Based Compensation

The Company accounts for grants of equity awards to employees in accordance with ASC Topic 718, “Stock Based Compensation.”The Company issued restricted stock units (“RSUs”) to its employees in 2023.

The Company estimates the fair value of the RSUs on the grant-date and recognizes the resulting fair value over the requisite service period. The fair value of each RSU or award is determined based upon the value of the common stock granted. The Company has elected to treat stock-based awards with graded vesting schedules and time-based service conditions as a single award and recognizes stock-based compensation on a straight-line basis over the requisite service period. Forfeitures are accounted for as they occur.

(g)

Cash and Cash Equivalents

The Company and its related entities consider all highly liquid instruments with a maturity of three months or less when purchased to be cash equivalents. As of each of June 30, 2026 and December 31, 2025, cash and cash equivalents consist principally of cash, money market accounts and short-term investments. Short-term investments are classified as available for sale securities, which are carried at fair value, with changes in fair value reported in earnings. Cash equivalents also include credit card transactions in transit.

As of June 30, 2026 and December 31, 2025, there were deposits in excess of federally insured amounts of $3.8 million and $0.8 million, respectively.

(h)

Concentration Risk

The Company utilizes third parties for specified food products and supplies. In instances where these parties fail to perform their obligation, the Company may be unable to find alternative suppliers.

The Company relies on Sysco Los Angeles, Inc. (“Sysco”), an unrelated third-party, for a significant portion of its food products. During the fourth quarter of 2023, the Company entered into an agreement with Sysco to purchase certain food supplies. For the three and six months ended June 30, 2026, Sysco accounted for approximately 59.6% and 57.9% of total food costs, respectively. For the three and six months ended June 30, 2025 Sysco accounted for approximately 62.6% and 71.8% of total food costs, respectively.

During the three months ended June 30, 2026, two third party vendors accounted for 20.1% and 25.7%, respectively, of total food costs.

During the three and six months ended June 30, 2025, two third party vendors accounted for 32.5% and 34.8%, respectively, of total food costs.

As of June 30, 2026, one wholesale customer accounted for 34.0% of outstanding accounts receivable. As of December 31, 2025, Costco gift cards accounted for 93.0% of outstanding accounts receivable.

(i)

Inventories

Inventories consist principally of food and beverages and are valued at the lower of cost or net realizable value. Cost is determined using the first-in, first-out method (FIFO) for all inventories.

(j)

Revenue Recognition

The Company recognizes revenue in accordance with ASC 606, “Revenue from Contracts with Customers.” Revenue from the operation of the restaurants is recognized as food and beverage products are delivered to customers and payment is tendered at the time of sale.

Sales tax amounts collected from customers are remitted to governmental authorities and are excluded from revenue.

The Company started selling gift cards primarily during the fourth quarter of 2024. The Company sells gift cards which do not expire. Gift cards balances are initially recorded as unearned income. Revenue from gift cards is recognized when gift cards are redeemed by the guest or, in the event a gift card is not expected to be redeemed, in proportion to actual redemptions of gift cards (“gift card breakage”). Gift card breakage income is included in revenue on the condensed consolidated statements of comprehensive loss.

(k)

Property and Equipment

Property and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives of the assets. Property and equipment under finance leases are stated at the present value of minimum lease payments.

The estimated useful service lives are as follows:

The Company and its related entities capitalize certain costs in conjunction with improvements to specific sites for planned future restaurants. The Company and its related entities also capitalize certain costs, including interest, in conjunction with constructing new restaurants. These costs are included in property and equipment and are amortized over the shorter of the life of the related leasehold improvements or the remaining lease term. The Company and its related entities did not capitalize any internal costs related to site preparation and construction activities during the six months ended June 30, 2026 and June 30, 2025 as any amounts were deemed immaterial.

(l)

Prepaid expenses and Other Current Assets

Prepaid expenses and other current assets as of June 30, 2026 and December 31, 2025 consist of the following:

(m)

Other Assets and Other Current Liabilities

Other assets as of June 30, 2026 and December 31, 2025 consist of the following:

Other Current Liabilities as of June 30, 2026 and December 31, 2025 consist of the following:

(n)

Pre-Opening Costs

Pre-opening costs, incurred in connection with the opening of new restaurants, are recorded as expenses when the costs are incurred. Pre-opening costs for the three months ended June 30, 2026 and 2025 were $1.3 million and $2.1 million, respectively. Pre-opening costs for the six months ended June 30, 2026 and 2025 were $3.1 million and $4.7 million, respectively.

(o)

Income Taxes

Prior to the Company’s initial public offering (the “IPO”), the Company and its related entities were organized as limited liability companies or limited partnerships and are treated as pass-through entities for federal and state income tax purposes. As the Operating Company and its related entities (other than GEN Inc.) have elected to be treated as partnerships for income tax purposes and are not subject to federal or state income taxes, income or loss is included in the tax returns of the members or the partners of the Operating Company and its related entities based on their respective shares.

Deferred tax assets are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets of a change in tax rates is recognized in income in the period that includes the enactment date.

The Company recognizes positions taken or expected to be taken in a tax return in accordance with existing accounting guidance on income taxes which prescribes a recognition threshold and measurement process. Under GAAP, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Interest and penalties on tax liabilities, if any, would be recorded in the interest expense and other non-interest expense line items, respectively.

In assessing the realizability of deferred tax assets, management considered whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment.

(p) Long-Lived Assets

Long-lived assets, such as property and equipment owned, are reviewed quarterly for impairment and whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group to be tested for possible impairment, undiscounted cash flows expected to be generated by that asset or asset group are compared to its carrying amount. If the carrying amount of the long-lived asset or asset group is not expected to be recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying amount exceeds its fair value. Fair value is determined through various valuation techniques, including discounted cash flow models, quoted market values, and third-party independent appraisals, as considered necessary. We assessed our long-lived assets for potential impairment with the result thatno impairment charges were recorded in any of the periods presented.

(q) Interest (Expense) Income, net

A reconciliation of total interest expense to interest (expense) income, net as reported in the condensed consolidated statements of comprehensive loss for thethree and six months ended June 30, 2026 and 2025 is as follows:

(r) Liquor Licenses

Liquor licenses are deemed to have indefinite useful lives and are qualitatively tested on an annual basis for impairment. Liquor licenses are included in the other assets line item in the accompanying condensed consolidated balance sheets.

(s) Sales Taxes

Sales taxes are imposed by state, county, and city governmental authorities, collected from customers and remitted to the appropriate governmental agency. The Company’s policy is to record the sales taxes collected as a liability and then remove the liability when the sales tax is remitted. There is no impact on the condensed consolidated statements of comprehensive loss as restaurant sales are recorded net of sales tax.

(t) Advertising Costs

Advertising costs are expensed as incurred and are included in general and administrative expenses in the accompanying condensed consolidated statements of comprehensive loss. For the three months ended June 30, 2026 and 2025, the Company incurred approximately $916 thou sand and $638 thousand in advertising expenses, respectively.

For the six months ended June 30, 2026 and 2025, the Company incurred approximately $1.9 million and $1.3 million in advertising costs, respectively.

(u) Risks and Uncertainties.

The Company has experienced, and in the future may experience, inflation related to its purchase of certain food supplies that the Company needs to operate its business. This price volatility could potentially have a material impact on the Company’s financial condition and/or its results of operations. In order to mitigate price volatility, the Company monitors cost fluctuations and may adjust its menu prices accordingly. The Company’s ability to compensate for higher costs through increased menu pricing may be limited by the competitive environment in which the Company operates.

We have evaluated and will continue to evaluate the impact of import laws and tariffs on our operations. However, we expect tariffs will impact our operations in certain areas, such as food and beverage costs, construction and equipment costs and other restaurant operating costs, for the remainder of fiscal 2026.

(v) Restaurant Revitalization Fund

In 2021, several of the Company’s restaurants received a total of approximately $16.8 million from the Restaurant Revitalization Fund (“RRF”). The RRF funds must be used for specific purposes, and the Company was required to provide use of funds validation on an annual basis through March 2023. The Company accounted for the RRF funds as a government grant and has recognized the amounts as income as related expenses were incurred. During the year ended December 31, 2022, the Company recognized approximately $13.0 million as RRF grant income and had deferred the remaining balance of $3.8 million. No RRF grant income was recognized during thesix months ended June 30, 2026 and 2025.

(w) Employee Retention Credits

In March 2020, the Coronavirus Aid, Relief, and Economic Security Act was signed into law, providing numerous tax provisions and other stimulus measures, including the Employee Retention Credit (“ERC”), a refundable tax credit against certain employment taxes. The Taxpayer Certainty and Disaster Tax Relief Act of 2020 and the American Rescue Plan Act of 2021 extended and expanded the availability of the ERC. We qualified for the ERC in the second and fourth quarters of 2020, and the first, second and third quarters of 2021. During the three months ended June 30, 2025, we recorded an aggregate benefit of $313 thousand in our condensed consolidated statements of comprehensive loss to reflect the ERC. During thethree and six months ended June 30, 2026, we did not receive any ERC credits to record.

(x) Net Loss Per Share

Basic net loss per share is computed by dividing net loss attributable to the Company by the weighted-average number of shares outstanding during the period. Diluted net loss per share is computed by giving effect to all potential weighted-average dilutive shares including stock options, RSUs, dividend equivalent units, restricted stock awards, and Class B Common Units exchangeable for shares of Class A common stock. The dilutive effect of outstanding awards, if any, is reflected in diluted earnings per share by application of the treasury stock method or if-converted method, as applicable. See “Note 15—Net Loss per Share.”

(y) Accounts Receivable

Accounts receivable consist primarily of receivables from various retail customers of our CPG business, including Costco Wholesale Corporation (“Costco”), and from Costco for gift card sales. The collectability of accounts receivable is evaluated based on a variety of factors, including historical experience, current economic conditions and other factors.

(z) Near Term Maturity

As of June 30, 2026 the Company had $12.0 million outstanding under its $20.0 million line of credit with PCB Bank, which matures on September 25, 2026 (see Note 7, “Line of Credit”). The Company also has notes payable of $3.4 million coming due within twelve months from the date of issuance of these financial statements. Management evaluated these conditions, initially without regard to plans not yet fully implemented, in assessing the Company’s ability to meet its obligations as they become due within one year after the date these condensed consolidated financial statements are issued.

Management’splans to address these conditions include: (i) renewal of the line of credit, which has been renewed in each of the two preceding years and which management believes is probable of being renewed prior to maturity; Management concluded that it is probable these plans will be effectively implemented within one year after the date these consolidated financial statements are issued and that, when implemented, they will address the conditions described above. Accordingly, management believes the Company’s cash, expected cash flows from operations and available borrowings will be sufficient to fund its operations, lease obligations, debt service and capital expenditures for at least twelve months following the issuance of these consolidated financial statements.

(3)

Assets and Liabilities Held for Sale

The Company accounts for assets held for sale in accordance with ASC 360 at the lower of carrying value or fair value less costs to sell. The reclassification occurs when the assets are available for immediate sale and the sale is probable. These conditions are usually met from the date on which a letter of intent or agreement to sell is ready for signing. Assets and liabilities of a component classified as held for sale are presented separately in the condensed consolidated balance sheets as “Assets held for sale” and “Lease liabilities held for sale.”

On March 24, 2026, the Company entered into a partnership agreement with Chubby Cattle, Inc. (“Chubby Cattle”), related tofive of its existing restaurants. Pursuant to the partnership agreement, the Company contributes substantially all of the assets of each restaurant to a newly formed entity in exchange for a 49% ownership interest in that entity, with Chubby Cattle holding the remaining 51% interest and serving as manager of each entity. Upon signing, the Company classified the related assets and lease liabilities of thefive restaurants as held for sale, measured at the lower of their carrying value or fair value less costs to sell.

During the three months ended June 30, 2026, the Company completed the transfer offour of thefive restaurants: Jacksonville, Florida and San Antonio, Texas on April 30, 2026, and Mountain View, California, and Edison, New Jersey on May 31, 2026. At each transfer date, the Company deconsolidated the restaurant and derecognized the related assets and liabilities, consisting in the aggregate of assets held for sale of $10.8 million (operating lease assets of $9.2 million and property and equipment of $1.6 million) and lease liabilities held for sale of $11.0 million. The Company’s retained 49% interests were recorded at an initial fair value ofzero, consistent with the fair value of the underlying restaurant assets reflected in the Company’s impairment assessment as of December 31, 2025 and are accounted for under the equity method. The Company also committed to fund two months of rent for each restaurant following its transfer, and these amounts, totaling $0.2 million, were charged against the gain on deconsolidation. The resulting net gain of $53 thousand is presented as “Gain on deconsolidation of restaurants” in the condensed consolidated statements of comprehensive loss. Because the carrying amount of the Company’s equity investment iszero and the Company has no obligation to fund losses of the new entities, the Company will not record its share of the entities’ losses, if any, and will resume recognizing its share of earnings only if and when its share of cumulative earnings exceeds its share of cumulative unrecognized losses.

The remaining restaurant, located in Sacramento, California, continues to be classified as held for sale as of June 30, 2026, with assets held for sale of $3.0 million, primarily consisting of operating lease assets and property and equipment, and lease liabilities held for sale of $3.7 million, consisting of operating lease liabilities. The transfer of this restaurant is expected to be completed in the third quarter of 2026.

(4)

Fair Value of Financial Instruments

The Company's financial instruments consist of cash and cash equivalents and investments. The carrying amounts reported in the accompanying condensed consolidated balance sheets for cash and cash equivalents approximate fair value because of the short-term maturity of those instruments. Fair value measurements are classified and disclosed in one of the following three categories:

Level 1 - Quoted prices in active markets for identical assets or liabilities.

Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets of liabilities.

As of June 30, 2026, all of the Company's financial assets that were subject to fair value measurement were valued using observable inputs. The Company's financial assets valued based on Level 1 inputs consist of cash and money market funds. The Company's financial assets based on Level 1 inputs consist of U.S. treasury securities.

(5)

Property and Equipment, Net

The costs and related accumulated depreciation and amortization of major classes of property:

The construction in progress balance on each of June 30, 2026 and December 31, 2025 is related to new restaurants being developed for openings expected in 2026 and 2027.

Total depreciation and amortization for the three months ended June 30, 2026 and 2025 was $2.4 million and $2.3 million, respectively, of which $2 thousand and $1 thousand for those periods, respectively, was related to assets acquired under a finance lease.

Total depreciation and amortization for the six months ended June 30, 2026 and 2025 was $4.8 million and $4.3 million, respectively, of which $4 thousand and $1 thousand for those periods, respectively, was related to assets acquired under a finance lease.

(6)

Gift Cards

Total deferred revenue related to gift cards include the full value of the unredeemed gift card balances less recognized breakage and the unamortized portion of third-party fees. The following table presents information related to gift cards:

(7)

Line of Credit

On September 25, 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, andbears interest at a variable rate per annum equal to 7.00% as of June 30, 2026. As of June 30, 2026, the balance was $12.0 million. The Company expects to renew the line of credit prior to its maturity. See Note 2, “Near Term Maturity”.

(8)

Notes Payable

Notes Payable to Bank

During the third quarter of 2024, the Company entered into a loan agreement with a bank in the amount of $3.0 million with a maturity date of June 26, 2026, at a variable interest rate which is defined as the Wall Street Journal Prime Rate plus 0.25%, resulting in an interest rate of 7.00% as of June 30, 2026. The balance as of June 30, 2026 was$0.

On April 25, 2025, the Company entered into a loan agreement with PCB Bank in the amount of $2.0 million with a maturity date of April 25, 2027 at a variable interest rate which is defined as the Wall Street Journal Prime Rate plus 0.25%, resulting in an interest rateof 7.00% as of June 30, 2026. The balance as of June 30, 2026 was $1.0 million.

On July 29, 2025, the Company entered into a loan agreement for $4.0 million with PCB Bank. The loan matures on July 29, 2027, and bears interest at a variable rate per annum equal to 0.25% over the Wall Street Journal Prime Rate, which equaled 7.00% as of June 30, 2026. The balance as of June 30, 2026 was $2.6 million.

On October 27, 2025, the Company entered into a loan agreement for $4.0 million with PCB Bank. The loan matures on October 27,2027, and bears interest at a variable rate per annum equal to 0.25% over the Wall Street Journal Prime Rate, which equaled 7.00% at June 30, 2026. The balance as of June 30, 2026 was $4.0 million.

Economic Injury Disaster Loan (“EIDL”)

On July 1, 2020, the Company executed the standard loan documents for six restaurants required for securing an EIDL loan from the United States Small Business Administration (the “SBA”) under its Economic Injury Disaster Loan assistance program. This assistance was sought in light of the impact of the COVID-19 pandemic on the Company’s business.

As of both June 30, 2026 and December 31, 2025, the total principal amounts of the EIDLs were $4.2 million and $4.3 million, respectively, and the proceeds were used for working capital purposes. Interest accrues on the EIDL loans at 3.75% per annum. Installment payments, including principal and interest, are duemonthly beginning twelve months from the origination date of each loan. The balance of principal and interest is payable over thirty years from the date of the promissory note.

Note Payable to Landlord

In August 2017, GEN Fremont entered into a note agreement with a landlord. The Company is making equal monthly payments on this note which has a July 2027 maturity date, with an interest rate of 8.00% per annum. As of June 30, 2026 and December 31, 2025, the loan balance outstanding was $98 thousand and $133 thousand, respectively.

Total Obligations of Notes Payable

The aggregate maturities of all third party notes payable as of June 30, 2026:

(9)

Related Party Notes Payable

The Company didnot have any outstanding balances with respect to related party note payables at June 30, 2026 and December 31, 2025.

(10)

Leases

At inception of a contract, the Company assesses whether a contract is a lease based on whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Lease classification, measurement, and recognition are determined at lease commencement, which is the date the underlying asset is available for use by the Company. The accounting classification of a lease is based on whether the arrangement is effectively a financed purchase of the underlying asset (finance lease) or not (operating lease). The Company has operating and finance leases for its corporate office, restaurant locations, office equipment and kitchen equipment. Our leases have remaining lease terms of less thanone year up to 25 years, including options to extend many of the leases. For leases with renewal periods at the Company’s option, the Company determines the expected lease period based on whether the renewal of any options is reasonably assured at the inception of the lease.

Operating leases are accounted for on the condensed consolidated balance sheets with the lease assets and liabilities recognized in “Operating lease assets,” - “Operating lease liabilities, current,” and “Operating lease liabilities, net of current portion”.

Lease assets and liabilities are recognized at the lease commencement date. All lease liabilities are measured at the present value of the lease payments not yet paid. To determine the present value of lease payments not yet paid, we estimate incremental borrowing rates corresponding to the maturities of the leases. We estimate this rate based on prevailing financial market conditions, comparable company and credit analysis, and management judgment. Operating lease assets are initially measured based on the lease liability, adjusted for initial direct costs, prepaid or deferred rent, and lease incentives. The operating lease liabilities are subsequently measured at the carrying amount of the lease liability adjusted for initial direct costs, prepaid or accrued lease payments, and lease incentives.

The following table summarizes the operating and finance lease activities to the condensed consolidated statements of comprehensive loss and balance sheets for the periods ended June 30, 2026 and 2025:

Maturities of lease liabilities as of June 30, 2026:

As of June 30, 2026, the Company had additional operating leases related to new restaurants the Company has not yet taken possession of that will total $35.6 million in future lease payment commitments. These operating leases are expected to commence later in fiscal year 2026 and 2027 have lease terms, including option periods, of 20 to 25 years.

The Company was obligated under finance leases covering certain property and equipment that expire at various dates.

Amortization of assets held under finance leases is included with depreciation expense in the condensed consolidated statements of comprehensive loss.

(11)

Commitments and Contingencies

(a)

Commitments

On November 23, 2016, pursuant to the U.S. government’s Immigrant Investor Program, commonly known as the EB-5 program (the “EB-5 Program”), Gen Restaurant Investment, LLC entered into an operating agreement with an investor (the “EB-5 Investor”). Under the terms and conditions of the EB-5 Program, the Company is subject to certain job creation requirements.

As part of the EB-5 Program operating agreement, Gen Restaurant Investment, LLC issued three units of Series II Preferred Member Interest in exchange for a 30% interest and received $1.5 million, recorded as equity. Five years from the date of issue, or after approval of the l-829 petition to U.S. Citizenship and Immigration Services, if later, the EB-5 Investor has the option to convert the Series II Units into Series I Units. If the EB-5 Investor does not exercise the conversion option, the Company may exercise its call option to purchase the EB-5 Investor’s interests at fair market value. If approval of the preferred member's I-526 immigration application is denied, the Company is required to repurchase the preferred member's units for $1.5 million. The Company will also be required to repurchase the preferred member’s units if they do not receive a green card.

Accordingly, this has been presented as mezzanine equity, not permanent equity, in the accompanying condensed consolidated balance sheets.

(b)

Contingencies

The Company and its related entities are involved in various claims and legal actions arising in the ordinary course of business. The outcomes of these actions are not predictable but the Company does not believe that the ultimate resolution of these other actions will have a material adverse effect on its financial position, results of operations, liquidity, or capital resources. However, a significant increase in the number of these claims or an increase in amounts owing under successful claims, could materially and adversely affect its business, financial condition, results of operations or cash flows.

The Company is a party to several lawsuits brought in Los Angeles County, California by ex-employees alleging labor law violations. The Company plans to continue to defend against these claims and does not expect the outcome of the lawsuit to have a material impact on the financial statements of the Company.

PPP Loans and RRF Grants

In June 2026, the Operating Company received a civil investigative demand (“CID”) from the U.S. Department of Justice issued pursuant to the False Claims Act. The investigative inquiry concerns applications for Restaurant Revitalization Fund (“RRF”) grants and Paycheck Protection Program (“PPP”) loans and loan forgiveness by certain companies acquired by the Operating Company and/or its affiliates.

The PPP loans and RRF grants at issue date to 2020 and 2021, prior to the Company’s initial public offering. As previously disclosed, certain companies acquired by the Operating Company received aggregate proceeds of approximately $23.0 million from the PPP loans, and the RRF grants totaled approximately $16.8 million.

The Company is cooperating fully with the investigative inquiry, including producing records responsive to the CID. While the ultimate outcome and timing of the inquiry are uncertain, the Company does not currently expect this matter to have a material impact on its results of operations or financial condition

(12)

Income Taxes

As a result of the IPO and related transactions the Company owns a portion of the common units of the Operating Company, which is treated as a partnership for U.S. federal, and most applicable state and local income tax purposes. As a partnership, the Operating Company is generally not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by the Operating Company is passed through to and included in the taxable income or loss of its Members in accordance with the terms of the Operating Agreement. The Company is subject to U.S. federal, state and local income taxes based on its share of the Operating Company’s pass-through taxable income.

The effective tax rate differs from the statutory tax rate primarily due to the Operating Company’s pass-through structure for U.S. income tax purposes.

For the three months ended June 30, 2026 and 2025, the Company recorded an income tax benefit of $211 thousandand $116 thousand, respectively. The Company’s effective income tax rate before discrete items for the three months ended June 30, 2026 and 2025 was 4.7% and 9.2%, respectively.

For the six months ended June 30, 2026 and 2025, the Company recorded an income tax (benefit) of ($464) thousandand ($268) thousand, respectively. The Company’s effective income tax rate before discrete items for the six months ended June 30, 2026 and 2025 was 2.7% and 8.1%, respectively.

Tax Receivable Agreement (“TRA”)

GEN Inc. entered into the TRA, with the Operating Company and each of the Members that provides for the payment by GEN Inc. to the Members of 85% of the amount of tax benefits, if any, that the Company may actually realize (or in some circumstances is deemed to realize) as a result of (i) increases in tax basis resulting from any future redemptions that are funded by GEN Inc. or exchanges of Class A Common Units described above in “Note 1—Organization and Description of Business” and (ii) certain other tax benefits attributable to payments made under the TRA.

The annual tax benefits are computed by calculating the income taxes due, including such tax benefits, and the income taxes due without such benefits. The Operating Company expects to benefit from the remaining 15% of any tax benefits that it may actually realize. The TRA payments are not conditioned upon any continued ownership interest in the Operating Company. The rights of each noncontrolling interest holder under the TRA are assignable to transferees of its interest in the Operating Company. The timing and amount of aggregate payments due under the TRA may vary based on a number of factors, including the amount and timing of the taxable income the Operating Company generates each year and the applicable tax rate.

As of each of June 30, 2026 and December 31, 2025, the Company had a liability related to its projected obligations under the

TRAof $1.1 million which is reflected on the Company’s condensed consolidated balance sheets in “Tax receivable agreement liability”. During the six months ended June 30, 2026, GEN Inc. didnot make any payments to members of the Operating Company pursuant to the TRA.

On July 4, 2025, the U.S. enacted H.R. 1 “A bill to provide for reconciliation pursuant to Title II of H. Con. Res. 14,” commonly referred to as the One Big Beautiful Bill Act. Changes in tax laws may affect recorded deferred tax assets and deferred tax liabilities and our effective tax rate in the future and we continue to evaluate the impacts the new legislation will have on the Condensed Consolidated Financial Statements. As a result of the enactment of H.R. 1, we anticipate an impact to the deferred tax liability and income tax payable related to the provisions for the 100% bonus depreciation for assets placed in service after January 19, 2025. There was no impact as of the date of enactment. We do not expect any material change to our ongoing statutory tax rate as a result of this legislation.

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Non-Controlling Interest

As discussed in “Note 1 – Organization and Description of Business,” the Company consolidates the financial results of the Operating Company and reports a non-controlling interest related to the Class B Common Units held by non-controlling interest holders on its condensed consolidated financial statements.

As of June 30, 2026, the Company owned 16.3% of the economic interests in the Operating Company, with the remaining 83.7% of the economic interests owned by non-controlling interest holders. The non-controlling interests on the accompanying condensed consolidated statements of comprehensive loss represent the portion of the loss attributable to the economic interests in the Operating Company held by the non-controlling holders of Class B Common Units calculated based on the weighted-average non-controlling interests’ ownership during the periods presented.

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Other Related-Party Transactions

Prior to June 30, 2026, GEN Mountain View, LP had a related party account payable to a company owned by Mr. David Kim, our Chief Executive Officer, for the purchase of fixed assets during 2018. The balance of $44 thousand was paid in full in the third quarter of 2025, and was $0 as of June 30, 2026.

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Net Loss per Share

Basic net loss per share of Class A common stock is computed by dividing net loss attributable to GEN Inc. by the weighted-average number of shares of Class A common stock outstanding during the period. Diluted net loss per share of Class A common stock is computed by dividing net loss attributable to GEN Inc. by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive securities. Diluted net loss per share for any periods for which loss per share is presented is the same as basic net loss per share as the inclusion of potentially issuable shares would be antidilutive.

A calculation of the numerator and denominator used in the calculation of basic and diluted net loss per share of Class A common stock is as follows:

For the three and six months ended June 30, 2026 and 2025,27,599,810 and 27,682,719, respectively, shares of Class B common stock were excluded from the weighted-average number of shares in the computation of diluted net loss per share of Class A common stock because the effect would have been anti-dilutive. In addition, for the three and six months ended June 30, 2026 and 2025,372,600 warrants in each period, and 696,000 and 928,000 RSUs, respectively, were excluded from the calculation of weighted average shares outstanding in the calculation of diluted net loss per share of Class A common stock because their effect would have been anti-dilutive.

Shares of Class B common stock do not share in the earnings or losses of GEN Inc. and are therefore not participating securities. Separate calculations of basic and diluted net loss per share for Class B common stock have not been presented.

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Stock-Based Compensation

In connection with the IPO, the Company granted RSUs to certain team members that generally vest on thefive-year anniversary of the grant date, or over afive-year period with vesting of 20% each year. The non-employee directors of the Company received RSUs that vested on the first anniversary of the grant date, subject to the grantee's continued service through the vesting period, or upon termination from the Board of Directors for any reason other than for cause, a prorated portion of the shares vest on the termination date. The total stock-based compensation was $734 thousand for each of the three months ended June 30, 2026 and 2025, and $1.5 million for each of the six months ended June 30, 2026 and 2025, and is included in general and administrative expenses.

The aggregate fair value of the RSUs granted during the year ended December 31, 2023 was $14.6 million. The unrecognized stock-based compens ation of $5.6 million as of June 30, 2026, will be recognized through July 2028. The Company issued 372,600 (or 9% of the shares of common stock sold in the offering) warrants in connection with the IPO transaction to the underwriters. The warrants expire five years after the effective date of the registration and can be exercised on a cashless basis. As a result, the conversion of some or all of the warrants may dilute the ownership interests of existing shareholders.

(17)Cash Paid for Common Stock Purchased

The Company has a stock buyback program to repurchase up to $5.0 million worth of shares of the Company’s outstanding Class A common stock. During the year ended December 31, 2025, the Company purchased 33,338 shares of Class A common stock for a total of $201 thousand.

The stock repurchase program does not obligate the Company to acquire any particular amount of Class A common stock, and it may be suspended or discontinued at any time.

(18) Segment Information

The Company operates 54 Gen Korean BBQ restaurants in the United States and South Korea. The CODM is the Chief Executive Officer. The Company determined it hasone reportable segment, as the CODM regularly reviews restaurant operations and financial performance at a consolidated level. The CODM uses net (loss) income to allocate resources (including labor, technology and capital resources) for the single segment to make decisions regarding annual budget, new restaurant openings, entering new geographic markets, landlord and vendor negotiation, marketing decisions, pursuing new business ventures and driving the Company’s mission.

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Subsequent Events

1. During the month of July 2026, the Company borrowed $1.7 million from the line of credit facility.