(a) Immaterial Prior Period Restatement
As discussed in Note 1 to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q, the Company identified an error in its calculation and recognition of non-cash rent expense for Benihana and RA Sushi from the date of its acquisitions through December 31, 2024, which resulted in the Company understating net loss by $1.3 million. The Company has evaluated the impact of the error and determined that it was not material to the 2024 interim or annual financial statements. However, the cumulative effect of the error in the first quarter of 2025 would have had a material effect on the results of operations for the period. Therefore, the Company has made these immaterial corrections in the comparative prior period within the Condensed Consolidated Financial Statements and related footnotes. The Company plans to correct the comparable period in the Form 10-K filing for the year ended December 28, 2025 and the Form 10-Q filings for the periods ending June 29, 2025 and September 29, 2025.
The following table reflects the correction on the affected line items in the Company’s previously reported Condensed Consolidated Financial Statements for the three and six months ended June 30, 2024.
| | | | | | | | | | |
|---|
| Condensed Consolidated Statement of Operations |
|---|
| · · For the three months ended June 30, 2024 |
|---|
| · · Previously · · · · As |
|---|
| · · Reported · · Adjustment · · Corrected |
|---|
| Owned restaurant operating expenses | | | $103,192 | | | $580 | | | $103,772 |
|---|
| Total owned operating expenses | | | 139,069 | | | 580 | | | 139,649 |
|---|
| General and administrative | | | 10,622 | | | 12 | | | 10,634 |
|---|
| Pre-opening expenses | | | 2,504 | | | 12 | | | 2,516 |
|---|
| Total costs and expenses | | | 170,840 | | | 604 | | | 171,444 |
|---|
| Operating income | | | 1,654 | | | (604) | | | 1,050 |
|---|
| Loss before benefit for income taxes | | | (10,360) | | | (604) | | | (10,964) |
|---|
| Benefit for income taxes | | | (3,268) | | | (191) | | | (3,459) |
|---|
| Net loss | | | (7,092) | | | (413) | | | (7,505) |
|---|
| Net loss attributable to The ONE Group Hospitality, Inc. | | | (6,929) | | | (413) | | | (7,342) |
|---|
| Net loss available to common stockholders | | | (11,467) | | | (413) | | | (11,880) |
|---|
| Basic net loss per common share | | | (0.36) | | | (0.01) | | | (0.38) |
|---|
| Diluted net loss per common share | | | (0.36) | | | (0.01) | | | (0.38) |
|---|
| | | | | | | | | | |
|---|
| · · For the six months ended June 30, 2024 |
|---|
| · · Previously · · · · As |
|---|
| · · Reported · · Adjustment · · Corrected |
|---|
| Owned restaurant operating expenses | | | $152,830 | | | $580 | | | $153,410 |
|---|
| Total owned operating expenses | | | 207,421 | | | 580 | | | 208,001 |
|---|
| General and administrative | | | 18,156 | | | 12 | | | 18,168 |
|---|
| Pre-opening expenses | | | 5,418 | | | 12 | | | 5,430 |
|---|
| Total costs and expenses | | | 256,455 | | | 604 | | | 257,059 |
|---|
| Operating income | | | 1,034 | | | (604) | | | 430 |
|---|
| Loss before benefit for income taxes | | | (13,058) | | | (604) | | | (13,662) |
|---|
| Benefit for income taxes | | | (3,536) | | | (191) | | | (3,727) |
|---|
| Net loss | | | (9,522) | | | (413) | | | (9,935) |
|---|
| Net loss attributable to The ONE Group Hospitality, Inc. | | | (8,998) | | | (413) | | | (9,411) |
|---|
| Net loss available to common stockholders | | | (13,536) | | | (413) | | | (13,949) |
|---|
| Basic net loss per common share | | | (0.43) | | | (0.01) | | | (0.44) |
|---|
| Diluted net loss per common share | | | (0.43) | | | (0.01) | | | (0.44) |
|---|
| | | | | | | | | | |
|---|
| Condensed Consolidated Statement of Comprehensive Income (Loss) |
|---|
| · · For the three months ended June 30, 2024 |
|---|
| · · Previously · · · · As |
|---|
| · · Reported · · Adjustment · · Corrected |
|---|
| Net loss | | | $(7,092) | | | $(413) | | | $(7,505) |
|---|
| Comprehensive loss | | | (7,081) | | | (413) | | | (7,494) |
|---|
| Comprehensive loss attributable to The ONE Group Hospitality, Inc. | | | (6,918) | | | (413) | | | (7,331) |
|---|
| Comprehensive loss attributable to common stockholders | | | (11,456) | | | (413) | | | (11,869) |
|---|
| | | | | | | | | | |
|---|
| · · For the six months ended June 30, 2024 |
|---|
| · · Previously · · · · As |
|---|
| · · Reported · · Adjustment · · Corrected |
|---|
| Net loss | | | $(9,522) | | | $(413) | | | $(9,935) |
|---|
| Comprehensive loss | | | (9,579) | | | (413) | | | (9,992) |
|---|
| Comprehensive loss attributable to The ONE Group Hospitality, Inc. | | | (9,055) | | | (413) | | | (9,468) |
|---|
| Comprehensive loss attributable to common stockholders | | | (13,593) | | | (413) | | | (14,006) |
|---|
| | | | | | | | | | |
|---|
| Condensed Consolidated Statement of Stockholders' Equity and Series A Preferred Stock |
|---|
| · · For the three months ended June 30, 2024 |
|---|
| · · Previously · · · · As |
|---|
| · · Reported · · Adjustment · · Corrected |
|---|
| Retained earnings | | | $15,348 | | | $(413) | | | $14,935 |
|---|
| Stockholders' equity | | | 68,081 | | | (413) | | | 67,668 |
|---|
| Total equity | | | 65,741 | | | (413) | | | 65,328 |
|---|
| | | | | | | | | | |
|---|
| Condensed Consolidated Statement of Cash Flows |
|---|
| · · For the six months ended June 30, 2024 |
|---|
| · · Previously · · · · As |
|---|
| · · Reported · · Adjustment · · Corrected |
|---|
| Net loss | | | $(9,522) | | | $(413) | | | $(9,935) |
|---|
| Deferred taxes | | | (3,671) | | | (191) | | | (3,862) |
|---|
| Operating lease liabilities and right-of-use assets | | | 466 | | | 604 | | | 1,070 |
|---|
The following table reflects the correction on the affected line items in the Company’s previously reported Condensed Consolidated Financial Statements for the three and nine months ended September 30, 2024.
| | | | | | | | | | |
|---|
| Condensed Consolidated Statement of Operations |
|---|
| · · For the three months ended September 30, 2024 |
|---|
| · · Previously · · · · As |
|---|
| · · Reported · · Adjustment · · Corrected |
|---|
| Owned restaurant operating expenses | | | $125,634 | | | $589 | | | $126,223 |
|---|
| Total owned operating expenses | | | 165,514 | | | 589 | | | 166,103 |
|---|
| General and administrative | | | 12,785 | | | 29 | | | 12,814 |
|---|
| Pre-opening expenses | | | 2,110 | | | 8 | | | 2,118 |
|---|
| Total costs and expenses | | | 196,995 | | | 626 | | | 197,621 |
|---|
| Operating income | | | (3,020) | | | (626) | | | (3,646) |
|---|
| Loss before benefit for income taxes | | | (13,699) | | | (626) | | | (14,325) |
|---|
| Benefit for income taxes | | | (4,644) | | | (212) | | | (4,856) |
|---|
| Net loss | | | (9,055) | | | (414) | | | (9,469) |
|---|
| Net loss attributable to The ONE Group Hospitality, Inc. | | | (8,890) | | | (414) | | | (9,304) |
|---|
| Net loss available to common stockholders | | | (16,015) | | | (414) | | | (16,429) |
|---|
| Basic net loss per common share | | | (0.52) | | | (0.01) | | | (0.53) |
|---|
| Diluted net loss per common share | | | (0.52) | | | (0.01) | | | (0.53) |
|---|
| | | | | | | | | | |
|---|
| · · For the nine months ended September 30, 2024 |
|---|
| · · Previously · · · · As |
|---|
| · · Reported · · Adjustment · · Corrected |
|---|
| Owned restaurant operating expenses | | | $278,464 | | | $1,169 | | | $279,633 |
|---|
| Total owned operating expenses | | | 372,935 | | | 1,169 | | | 374,104 |
|---|
| General and administrative | | | 30,941 | | | 41 | | | 30,982 |
|---|
| Pre-opening expenses | | | 7,528 | | | 20 | | | 7,548 |
|---|
| Total costs and expenses | | | 453,450 | | | 1,230 | | | 454,680 |
|---|
| Operating income | | | (1,986) | | | (1,230) | | | (3,216) |
|---|
| Loss before benefit for income taxes | | | (26,757) | | | (1,230) | | | (27,987) |
|---|
| Benefit for income taxes | | | (8,180) | | | (403) | | | (8,583) |
|---|
| Net loss | | | (18,577) | | | (827) | | | (19,404) |
|---|
| Net loss attributable to The ONE Group Hospitality, Inc. | | | (17,888) | | | (827) | | | (18,715) |
|---|
| Net loss available to common stockholders | | | (29,551) | | | (827) | | | (30,378) |
|---|
| Basic net loss per common share | | | (0.95) | | | (0.03) | | | (0.97) |
|---|
| Diluted net loss per common share | | | (0.95) | | | (0.03) | | | (0.97) |
|---|
| | | | | | | | | | |
|---|
| Condensed Consolidated Statement of Comprehensive Income (Loss) |
|---|
| · · For the three months ended September 30, 2024 |
|---|
| · · Previously · · · · As |
|---|
| · · Reported · · Adjustment · · Corrected |
|---|
| Net loss | | | $(9,055) | | | $(414) | | | $(9,469) |
|---|
| Comprehensive loss | | | (8,981) | | | (414) | | | (9,395) |
|---|
| Comprehensive loss attributable to The ONE Group Hospitality, Inc. | | | (8,816) | | | (414) | | | (9,230) |
|---|
| Comprehensive loss attributable to common stockholders | | | (15,941) | | | (414) | | | (16,355) |
|---|
| | | | | | | | | | |
|---|
| · · For the nine months ended September 30, 2024 |
|---|
| · · Previously · · · · As |
|---|
| · · Reported · · Adjustment · · Corrected |
|---|
| Net loss | | | $(18,577) | | | $(827) | | | $(19,404) |
|---|
| Comprehensive loss | | | (18,560) | | | (827) | | | (19,387) |
|---|
| Comprehensive loss attributable to The ONE Group Hospitality, Inc. | | | (17,871) | | | (827) | | | (18,698) |
|---|
| Comprehensive loss attributable to common stockholders | | | (29,534) | | | (827) | | | (30,361) |
|---|
| | | | | | | | | | |
|---|
| Condensed Consolidated Statement of Stockholders' Equity and Series A Preferred Stock |
|---|
| · · For the three months ended September 30, 2024 |
|---|
| · · Previously · · · · As |
|---|
| · · Reported · · Adjustment · · Corrected |
|---|
| Additional paid-in capital | | | $72,554 | | | $(827) | | | $71,727 |
|---|
| Stockholders' equity | | | 51,442 | | | (827) | | | 50,615 |
|---|
| Total equity | | | 48,937 | | | (827) | | | 48,110 |
|---|
| | | | | | | | | | |
|---|
| Condensed Consolidated Statement of Cash Flows |
|---|
| · · For the nine months ended September 30, 2024 |
|---|
| · · Previously · · · · As |
|---|
| · · Reported · · Adjustment · · Corrected |
|---|
| Net loss | | | $(18,577) | | | $(827) | | | $(19,404) |
|---|
| Deferred taxes | | | (8,376) | | | (403) | | | (8,779) |
|---|
| Operating lease liabilities and right-of-use assets | | | 5,172 | | | 1,230 | | | 6,402 |
|---|
The following table reflects the correction on the affected line items in the Company’s previously reported Condensed Consolidated Financial Statements for the year ended December 31, 2024.
| | | | | | | | | | |
|---|
| Consolidated Balance Sheets |
|---|
| · · As of December 31, 2024 |
|---|
| · · Previously · · · · As |
|---|
| · · Reported · · Adjustment · · Corrected |
|---|
| Operating lease right-of-use assets | | | $260,204 | | | $127 | | | $260,331 |
|---|
| Deferred income taxes, net | | | 53,682 | | | 600 | | | 54,282 |
|---|
| Total assets | | | 959,353 | | | 727 | | | 960,080 |
|---|
| Current portion of operating lease liabilities | | | 14,998 | | | 296 | | | 15,294 |
|---|
| Total current liabilities | | | 131,095 | | | 296 | | | 131,391 |
|---|
| Operating lease liabilities, net of current portion | | | 291,785 | | | 1,705 | | | 293,490 |
|---|
| Total liabilities | | | 756,748 | | | 2,001 | | | 758,749 |
|---|
| Additional paid-in capital | | | 68,392 | | | (1,274) | | | 67,118 |
|---|
| Total stockholders’ equity | | | 47,165 | | | (1,274) | | | 45,891 |
|---|
| Total equity | | | 44,520 | | | (1,274) | | | 43,246 |
|---|
| Total liabilities, Series A preferred stock and stockholders' equity | | | 959,353 | | | 727 | | | 960,080 |
|---|
| | | | | | | | | | |
|---|
| Consolidated Statement of Operations |
|---|
| · · For the twelve months ended December 31, 2024 |
|---|
| · · Previously · · · · As |
|---|
| · · Reported · · Adjustment · · Corrected |
|---|
| Owned restaurant operating expenses | | | $411,798 | | | $1,789 | | | $413,587 |
|---|
| Total owned operating expenses | | | 550,592 | | | 1,789 | | | 552,381 |
|---|
| General and administrative | | | 44,170 | | | 64 | | | 44,234 |
|---|
| Pre-opening expenses | | | 9,488 | | | 21 | | | 9,509 |
|---|
| Total costs and expenses | | | 662,573 | | | 1,874 | | | 664,447 |
|---|
| Operating income | | | 10,771 | | | (1,874) | | | 8,897 |
|---|
| Loss before benefit for income taxes | | | (24,487) | | | (1,874) | | | (26,361) |
|---|
| Benefit for income taxes | | | (7,834) | | | (600) | | | (8,434) |
|---|
| Net loss | | | (16,653) | | | (1,274) | | | (17,927) |
|---|
| Net loss attributable to The ONE Group Hospitality, Inc. | | | (15,824) | | | (1,274) | | | (17,098) |
|---|
| Net loss available to common stockholders | | | (34,966) | | | (1,274) | | | (36,240) |
|---|
| Basic net loss per common share | | | (1.12) | | | (0.04) | | | (1.16) |
|---|
| Diluted net loss per common share | | | (1.12) | | | (0.04) | | | (1.16) |
|---|
| | | | | | | | | | |
|---|
| Consolidated Statement of Comprehensive Income (Loss) |
|---|
| · · For the twelve months ended December 31, 2024 |
|---|
| · · Previously · · · · As |
|---|
| · · Reported · · Adjustment · · Corrected |
|---|
| Net loss | | | $(16,653) | | | $(1,274) | | | $(17,927) |
|---|
| Comprehensive loss | | | (16,751) | | | (1,274) | | | (18,025) |
|---|
| Comprehensive loss attributable to The ONE Group Hospitality, Inc. | | | (15,922) | | | (1,274) | | | (17,196) |
|---|
| Comprehensive loss attributable to common stockholders | | | (35,064) | | | (1,274) | | | (36,338) |
|---|
| | | | | | | | | | |
|---|
| Consolidated Statement of Stockholders' Equity and Series A Preferred Stock |
|---|
| · · For the twelve months ended December 31, 2024 |
|---|
| · · Previously · · · · As |
|---|
| · · Reported · · Adjustment · · Corrected |
|---|
| Additional paid-in capital | | | $68,392 | | | $(1,274) | | | $67,118 |
|---|
| Stockholders' equity | | | 47,165 | | | (1,274) | | | 45,891 |
|---|
| Total equity | | | 44,520 | | | (1,274) | | | 43,246 |
|---|
| | | | | | | | | | |
|---|
| Consolidated Statement of Cash Flows |
|---|
| · · For the twelve months ended December 31, 2024 |
|---|
| · · Previously · · · · As |
|---|
| · · Reported · · Adjustment · · Corrected |
|---|
| Net loss | | | $(16,653) | | | $(1,274) | | | $(17,927) |
|---|
| Deferred taxes | | | (8,580) | | | (600) | | | (9,180) |
|---|
| Operating lease liabilities and right-of-use assets | | | 7,441 | | | 1,874 | | | 9,315 |
|---|
(c) Adoption or Termination of 10b5-1 Trading Plans
During the first quarter ended March 30, 2025, no director or officer adopted, modified, orterminated any Rule 10b5-1 trading arrangement ornon-Rule 10b5-1 trading arrangement, as such terms are defined in Item 408(a) of Regulation S-K.
