S-1: Yoshiharu Global Co. Files for Resale of 3,005,600 Shares of Common Stock

Yoshiharu Global Co. is registering for resale 3,005,600 shares of its Class A common stock by certain selling securityholders, with the company not receiving any proceeds from the sales except from potential warrant exercises.

Summary

• Yoshiharu Global Co. has filed a registration statement for the resale of up to 3,005,600 shares of its Class A common stock by selling securityholders.
• The shares include those issued through subscription agreements, private placements, and those issuable upon the exercise of warrants.
• The company will not receive any proceeds from the resale of these shares, except for potential cash proceeds from the exercise of warrants.
• The exercise price of the warrants is $2.50 per share.
• The company will bear the costs associated with the registration, while the selling securityholders will bear commissions and discounts related to their sales.
• The Class A Common Stock is listed on The Nasdaq Capital Market under the symbol YOSH.
• The company cautions investors to review the risk factors associated with investing in their securities.

Sentiment

Score: 4

Explanation: The document is primarily a registration statement, which is inherently neutral. However, the inclusion of numerous risk factors and the fact that selling securityholders purchased shares at prices below the current market price suggests some caution.

Negatives

• The company will not receive any proceeds from the resale of shares of Common Stock by the Selling Securityholders except with respect to amounts received by us due to the cash exercise of the Convertible Securities.
• Cash proceeds associated with the exercises of the Convertible Securities are dependent on our stock price and given the recent price volatility of our Common Stock and relative lack of liquidity in our stock, we may not receive any cash proceeds in relation to such outstanding warrants.
• The shares of Class A Common Stock being registered for resale in this prospectus will constitute a considerable percentage of our public float (defined as the number of our outstanding shares of Common Stock held by non-affiliates).
• In addition, a portion of the shares of Common Stock being registered for resale hereunder were purchased by the Selling Securityholders at prices below the current market price of our Common Stock.

Risks

• The prospectus highlights several risk factors, including potential dilution, market volatility, and the company's ability to achieve profitability.
• The company's success depends on its ability to identify and secure appropriate sites and timely develop and expand its operations in existing and new markets.
• The company's restaurant base is geographically concentrated in California, and it could be negatively affected by conditions specific to California.
• The company's expansion into new markets may present increased risks due in part to its unfamiliarity with the areas and may make its future results unpredictable.
• New restaurants, once opened, may not be profitable, and the increases in average restaurant sales and comparable restaurant sales that the company has experienced in the past may not be indicative of future results.
• The company's failure to manage its growth effectively could harm its business and operating results.
• The company's limited number of restaurants, the significant expense associated with opening new restaurants, and the unit volumes of its new restaurants makes it susceptible to significant fluctuations in its results of operations.
• A decline in visitors to any of the retail centers, shopping malls, lifestyle centers, or entertainment centers where the company's restaurants are located could negatively affect its restaurant sales.
• Opening new restaurants in existing markets may negatively affect sales at the company's existing restaurants.
• The company's operating results and growth strategies will be closely tied to the success of its future franchise partners and it will have limited control with respect to their operations.
• Operating results at the company's restaurants could be significantly affected by competition in the restaurant industry in general and, in particular, within the dining segments of the restaurant industry in which it competes.
• The company relies significantly on certain vendors and suppliers, which could adversely affect its business, financial condition or results of operations.
• Continued supply chain disruptions and other forces beyond the company's control, and resulting changes in food and supply costs have and could continue to adversely affect its business, financial condition or results of operations.
• The company's operations may be subject to the effects of a rising rate of inflation which may adversely impact its financial condition and results of operations.
• Changes in economic conditions could materially affect the company's ability to maintain or increase sales at its restaurants or open new restaurants.
• The company may need capital in the future, and it may not be able to raise that capital on favorable terms.
• Negative publicity relating to one of the company's restaurants could reduce sales at some or all of its other restaurants.
• Food safety and foodborne illness concerns could have an adverse effect on the company's business, financial condition or results of operations.
• The company has, from time to time, received borrowings from a related party controlled by James Chae, its Chairman and Chief Executive Officer, which may become repayable on demand. Any unexpected calls for repayment of a significant amount of such borrowings may adversely affect its business.
• The company is subject to all of the risks associated with leasing space subject to long-term non-cancelable leases.
• Failure to receive frequent deliveries of fresh food ingredients and other supplies could harm the company's business, financial condition or results of operations.
• New information or attitudes regarding diet and health could result in changes in regulations and consumer consumption habits that could adversely affect the company's business, financial condition or results of operations.
• The company relies significantly on information technology, and any material failure, weakness, interruption or breach of security could prevent it from effectively operating its business.
• The company's marketing programs may not be successful, and its new menu items, advertising campaigns and restaurant designs and remodels may not generate increased sales or profits.
• The company's inability or failure to recognize, respond to and effectively manage the accelerated impact of social media could materially adversely impact its business, financial condition or results of operations.
• The company depends on its senior management team and other key employees, and the loss of one or more key personnel or an inability to attract, hire, integrate and retain highly skilled personnel could have an adverse effect on its business, financial condition or results of operations.
• Labor disputes may disrupt the company's operations and affect its profitability, thereby causing a material adverse effect on its business, financial condition or results of operations.
• The minimum wage, particularly in California, continues to increase and is subject to factors outside of the company's control.
• Changes in employment laws may adversely affect the company's business, financial condition, results of operations or cash flow.
• If the company faces labor shortages, increased labor costs or unionization activities, its growth, business, financial condition and operating results could be adversely affected.
• The company's business could be adversely affected by a failure to obtain visas or work permits or to properly verify the employment eligibility of its employees.
• Failure to comply with antibribery or anticorruption laws could adversely affect the company's reputation, business, financial condition or results of operations.
• Delays In Obtaining Construction Permits Can Have A Material Adverse Effect on Our Business.
• The company may become involved in lawsuits involving Yoshiharu Holdings Co. as the owner of intellectual property, or us as a licensee of intellectual property from Yoshiharu Holdings Co., to protect or enforce intellectual property rights, which could be expensive, time consuming, and unsuccessful.
• Governmental regulation may adversely affect the company's ability to open new restaurants or otherwise adversely affect its business, financial condition or results of operations.
• Compliance with environmental laws may negatively affect the company's business.
• A breach of security of confidential consumer information related to the company's electronic processing of credit and debit card transactions, as well as a breach of security of its employee information, could substantially affect its reputation, business, financial condition of results of operations.
• The company could be party to litigation that could adversely affect it by distracting management, increasing its expenses or subjecting it to material money damages and other remedies.
• The company is subject to state and local dram shop statutes, which may subject it to uninsured liabilities.
• The company's current insurance may not provide adequate levels of coverage against claims.
• Failure to obtain and maintain required licenses and permits or to comply with alcoholic beverage or food control regulations could lead to the loss of its liquor and food service licenses and, thereby, harm its business, financial condition or results of operations.
• If the company fails to develop and maintain an effective system of internal control over financial reporting, it may not be able to accurately report its financial results in a timely manner, which may adversely affect investor confidence in the company.
• Changes to accounting rules or regulations may adversely affect the company's business, financial condition or results of operations.
• The company will incur increased costs as a result of being a public company.
• The company is an emerging growth company, and it cannot be certain if the reduced reporting and disclosure requirements applicable to emerging growth companies will make its common stock less attractive to investors.
• The company's management does not have experience managing a U.S. public company and its current resources may not be sufficient to fulfill its public company obligations.
• If the company's stockholders equity fails to comply with the continued listing requirements of the Nasdaq Capital Market, it would face possible delisting, which would result in a limited public market for its Class A Common Stock and make obtaining future debt or equity financing more difficult for it.

Future Outlook

The company plans to continue to increase the number of its restaurants in the next several years as part of its expansion strategy and expects to open an additional two to four new restaurants in 2024.

Industry Context

The restaurant industry is highly competitive, with competition intensifying as competitors increase the breadth and depth of their product offerings and open new locations.

Management Changes

Stakeholder Impact

• Existing shareholders may experience dilution due to the resale of shares.
• The market price of the company's common stock could be affected by the sales of shares by the Selling Securityholders.

Next Steps

• The Selling Securityholders will determine when and how they will dispose of the shares of Common Stock registered under this prospectus for resale.

Key Dates

Keywords

resale, common stock, securities, warrants, subscription agreements, private placement, Yoshiharu Global Co., Class A Common Stock, selling securityholders, registration statement, Nasdaq