8-K/A: Yoshiharu Global Co. Completes Acquisition of Three Las Vegas Restaurants for $3.6 Million

Yoshiharu Global Co. has finalized the acquisition of three Las Vegas restaurants for $3.6 million, aiming to expand its brand and achieve profitability.

Summary

• Yoshiharu Global Co. has acquired three Las Vegas restaurant entities, Jjanga LLC, Ramen Aku LLC, and HJH LLC, for a total of $3.6 million.
• The acquisition was funded through a combination of $1.8 million in cash, a $600,000 promissory note, and a $1.2 million convertible note.
• The promissory note will be repaid in two equal installments of $300,000 due on November 30, 2024, and November 30, 2025, without interest.
• The convertible note accrues interest at 0.5% per annum and matures one year from the closing date, with the option for the seller to convert it into Class A common stock.
• The seller, Mr. Jiyuck Hwang, will serve as the Managing Director of the acquired restaurants with an annual base salary of $180,000 and potential restricted stock units worth up to $100,000 based on performance.
• The company expects the acquired restaurants to generate $6 million in annual revenue in 2024.
• Yoshiharu anticipates breaking even in the second half of 2024 and becoming profitable in 2025.

Sentiment

Score: 7

Explanation: The document conveys a positive outlook with the acquisition and future profitability projections, but there are also risks associated with the debt and reliance on the acquired restaurants' performance. The sentiment is cautiously optimistic.

Positives

• The acquisition is expected to significantly increase Yoshiharu's revenue with an estimated $6 million in annual revenue from the acquired restaurants in 2024.
• The company anticipates achieving profitability in 2025, indicating a positive financial outlook.
• The seller's continued involvement as Managing Director ensures a smooth transition and leverages his expertise.
• The acquisition expands Yoshiharu's presence into a new state, supporting its growth strategy.

Negatives

• The acquisition involves a significant amount of debt through promissory and convertible notes.
• The company is relying on the acquired restaurants to achieve $6 million in revenue to meet its financial goals.
• The company is not yet profitable and is relying on the acquired restaurants to break even in the second half of 2024.

Risks

• The company's ability to achieve the projected $6 million in revenue from the acquired restaurants is not guaranteed.
• The company's ability to break even in the second half of 2024 and become profitable in 2025 is subject to various market and operational risks.
• The convertible note could potentially dilute existing shareholders if converted into Class A common stock.
• The company is relying on the seller to manage the restaurants effectively, and any issues with his performance could impact the business.

Future Outlook

The company anticipates breaking even in the second half of 2024 and becoming profitable in 2025, leveraging the financial success of the acquired restaurants to expand the Yoshiharu brand.

Management Comments

• I am pleased to announce the successful acquisition of three renowned Las Vegas restaurants, said James Chae, Yoshiharus President, CEO, and Chairman of the Board.
• With $6 million in annual revenues expected in 2024 from the acquired restaurants, we eagerly anticipate leveraging the financial success seen with these stores to further expand the Yoshiharu brand into a new state.
• Through this strategic acquisition, we anticipate breaking even in the second half of 2024 and become profitable in 2025.

Industry Context

This acquisition reflects a trend of restaurant chains expanding through strategic acquisitions to increase market share and revenue. The move into Las Vegas is a significant step for Yoshiharu, indicating a desire to compete in a major market.

Comparison to Industry Standards

• The acquisition of three restaurants for $3.6 million is within the range of similar deals in the restaurant industry, but the specific terms (cash, promissory note, convertible note) are unique to this transaction.
• The projected $6 million in annual revenue for the acquired restaurants is a significant figure, and its achievement will be a key indicator of the success of the acquisition.
• The expectation to break even in the second half of 2024 and become profitable in 2025 is an ambitious goal, and the company's performance will be compared to industry benchmarks for similar acquisitions.
• Comparable companies such as The Cheesecake Factory (NASDAQ: CAKE) and Texas Roadhouse (NASDAQ: TXRH) often expand through acquisitions, but their financial structures and performance metrics will be different.

Management Changes

Stakeholder Impact

• Shareholders may see a positive impact if the acquisition leads to increased revenue and profitability.
• Employees of the acquired restaurants will be managed by Yoshiharu Global Co.
• Customers of the acquired restaurants may experience changes in service and offerings.
• Suppliers of the acquired restaurants will now be dealing with Yoshiharu Global Co.

Next Steps

• The company will file the required financial statements with the SEC.
• The company will integrate the acquired restaurants into its operations.
• The company will monitor the performance of the acquired restaurants to achieve its financial goals.

Key Dates

Keywords

restaurant acquisition, Japanese ramen, Las Vegas restaurants, Yoshiharu Global Co., financial performance, convertible note, promissory note, restaurant operations, expansion strategy