Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 28, 2026
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 001-37379
THE ONE GROUP HOSPITALITY, INC.
(Exact name of registrant as specified in its charter)
Delaware
14-1961545
(State or other jurisdiction of incorporation ororganization)
(I.R.S. Employer Identification No.)
1624 Market Street, Suite 311, Denver, Colorado
80202
(Address of principal executive offices)
Zip Code
646-624-2400
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock
STKS
Nasdaq
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧ No ◻
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧ No ◻
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ◻
Accelerated filer ⌧
Non-accelerated filer ◻
Smaller reporting company ☒
Emerging growth company ☐
If an emerging growth company, indicate by a check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ⌧
Number of shares of common stock outstanding as of July 31, 2026: 31,689,024
TABLE OF CONTENTS
Page
PART I – Financial Information
Item 1. Financial Statements
3
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
19
Item 3. Quantitative and Qualitative Disclosures About Market Risk
31
Item 4. Controls and Procedures
PART II – Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 5. Other Information
32
Item 6. Exhibits
Signatures
33
2
PART I. FINANCIAL INFORMATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands, except share information)
June 28,
December 28,
2026
2025
ASSETS
Current assets:
Cash and cash equivalents
$
6,363
4,168
Credit card receivable
10,742
19,480
Restricted cash and cash equivalents
499
Accounts receivable
12,169
15,389
Inventory
9,613
9,839
Other current assets
7,714
7,521
Total current assets
47,100
56,896
Property and equipment, net
283,166
278,195
Operating lease right-of-use assets
259,513
253,228
Goodwill
155,783
Intangibles, net
128,941
128,988
Other assets
8,513
8,852
Security deposits
2,287
2,254
Total assets
885,303
884,196
LIABILITIES, SERIES A PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable
36,635
36,633
Accrued payroll expenses
18,287
19,286
Accrued expenses
38,492
46,356
Current portion of operating lease liabilities
14,007
13,803
Deferred gift card revenue and other
5,488
6,819
Current portion of long-term debt
9,408
9,302
Other current liabilities
1,997
1,017
Total current liabilities
124,314
133,216
Long-term debt, net of current portion, unamortized discount and debt issuance costs
329,018
334,013
Operating lease liabilities, net of current portion
306,261
293,985
Other long-term liabilities
6,473
6,319
Deferred tax liabilities, net
5,187
Total liabilities
771,253
772,720
Commitments and contingencies (Note 16)
Series A preferred stock, $0.0001 par value, 160,000 shares authorized; 160,000 issued and outstanding at June 28, 2026 and December 28, 2025
210,554
191,303
Stockholders’ deficit:
Common stock, $0.0001 par value, 75,000,000 shares authorized; 34,978,920 issued and 31,684,868 outstanding at June 28, 2026 and 34,520,226 issued and 31,242,344 outstanding at December 28, 2025
Preferred stock, other than Series A preferred stock, $0.0001 par value, 9,840,000 shares authorized; no shares issued and outstanding at June 28, 2026 and December 28, 2025
—
Treasury stock, at cost, 3,402,881 shares at June 28, 2026 and December 28, 2025
(19,308)
Additional paid-in capital
22,423
39,712
Accumulated deficit
(92,136)
(93,216)
Accumulated other comprehensive loss
(3,056)
(3,029)
Total stockholders’ deficit
(92,074)
(75,838)
Noncontrolling interests
(4,430)
(3,989)
Total deficit
(96,504)
(79,827)
Total liabilities, Series A preferred stock and stockholders' deficit
See notes to the condensed consolidated financial statements.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except income per share and related share information)
For the three periods ended June 28,
For the three periods ended June 29,
For the six periods ended June 28,
For the six periods ended June 29,
Revenues:
Owned restaurant net revenue
197,284
203,907
406,576
411,305
Management, license, franchise and incentive fee revenue
3,193
3,472
6,717
7,203
Total revenues
200,477
207,379
413,293
418,508
Cost and expenses:
Owned operating expenses:
Owned restaurant cost of sales
38,544
43,190
79,078
86,310
Owned restaurant operating expenses
126,317
129,493
255,353
258,268
Total owned operating expenses
164,861
172,683
334,431
344,578
General and administrative (including stock-based compensation of $1,137 and $2,271 for the three and six periods ended June 28, 2026, respectively, and $1,470 and $3,102 for the three and six periods ended June 29, 2025, respectively)
14,008
11,662
29,030
24,753
Depreciation and amortization
11,020
10,870
21,425
20,699
Lease termination and restaurant closure expenses
919
5,635
2,884
5,706
Pre-opening expenses
2,859
1,579
4,330
3,260
Transition and integration expenses
193
3,949
659
7,668
Transaction costs
26
61
130
Other expenses
34
278
54
323
Total costs and expenses
193,920
206,717
392,839
407,117
Operating income
6,557
662
20,454
11,391
Other expenses, net:
Interest expense, net of interest income
9,623
10,295
19,369
20,117
Total other expenses, net
(Loss) income before (benefit) provision for income taxes
(3,066)
(9,633)
1,085
(8,726)
(Benefit) provision for income taxes
(716)
699
446
984
Net (loss) income
(2,350)
(10,332)
639
(9,710)
Less: net loss attributable to noncontrolling interest
(228)
(441)
(581)
Net (loss) income attributable to The ONE Group Hospitality, Inc.
(2,122)
(10,104)
1,080
(9,129)
Series A Preferred Stock paid-in-kind dividend and accretion
(9,856)
(8,137)
(19,251)
(15,728)
Net loss available to common stockholders
(11,978)
(18,241)
(18,171)
(24,857)
Net loss per common share (as restated, see Note 10):
Basic
(0.36)
(0.56)
(0.55)
(0.76)
Diluted
Weighted average common shares outstanding (as restated, see Note 10):
33,473,486
32,841,424
33,334,228
32,895,526
4
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(Unaudited, in thousands)
Currency translation (loss) gain, net of tax
(1)
123
(27)
110
Comprehensive (loss) income
(2,351)
(10,209)
612
(9,600)
Less: comprehensive loss attributable to noncontrolling interest
Comprehensive (loss) income attributable to The ONE Group Hospitality, Inc.
(2,123)
(9,981)
1,053
(9,019)
Comprehensive loss attributable to common stockholders
(11,979)
(18,118)
(18,198)
(24,747)
5
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ (DEFICIT) EQUITY AND
SERIES A PREFERRED STOCK
Accumulated
Additional
other
Series A Preferred Stock
Common stock
Treasury
paid-in
comprehensive
Stockholders’
Noncontrolling
Shares
Amount
Par value
stock
capital
deficit
loss
(deficit) equity
interests
Total
Balance at December 28, 2025
160,000
31,242,344
Stock-based compensation
122,892
1,134
Issuance of vested restricted shares, net of tax withholding
141,125
(209)
Series A Preferred Stock paid-in kind dividend and accretion
9,395
(9,395)
Loss on foreign currency translation, net
(26)
Net income (loss)
3,202
(213)
2,989
Balance at March 29, 2026
200,698
31,506,361
31,242
(90,014)
(3,055)
(81,132)
(4,202)
(85,334)
108,829
1,137
69,678
(100)
9,856
Net loss
Balance at June 28, 2026
31,684,868
Balance at December 31, 2024
158,085
31,037,843
(18,202)
67,118
(3,028)
45,891
(2,645)
43,246
61,453
1,632
54,557
(129)
Purchase of treasury stock
(110,595)
(307)
7,591
(6,616)
(975)
(7,591)
(13)
975
(353)
622
Balance at March 30, 2025
165,676
31,043,258
(18,509)
62,005
(3,041)
40,458
(2,998)
37,460
45,367
1,470
65,848
(167)
(202,883)
(598)
8,137
Gain on foreign currency translation, net
Balance at June 29, 2025
173,813
30,951,590
(19,107)
55,171
(2,918)
23,045
(3,226)
19,819
6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Operating activities:
Adjustments to reconcile net loss to net cash provided by operating activities:
Non-cash lease termination and exit costs
359
3,500
2,271
3,102
Amortization of debt issuance costs and debt original issuance discounts
1,800
1,770
Deferred taxes
945
Changes in operating assets and liabilities, net of acquisition:
11,957
2,718
252
2,014
(268)
(1,105)
(9)
(126)
56
(300)
(314)
(1,486)
(11,341)
(9,348)
Operating lease liabilities and right-of-use assets
6,205
1,136
Other liabilities
(67)
(2,476)
Net cash provided by operating activities
32,965
11,333
Investing activities:
Purchase of property and equipment
(23,009)
(32,148)
Acquisition related payments, net of cash acquired
(618)
Net cash used in investing activities
(23,627)
Financing activities:
Borrowings of long-term debt
20,000
Repayments of long-term debt and financing lease liabilities
(26,808)
(1,011)
Tax-withholding obligation on stock-based compensation
(309)
(296)
(905)
Net cash used in financing activities
(7,117)
(2,212)
Effect of exchange rate changes on cash
113
Net change in cash and cash equivalents and restricted cash and cash equivalents
2,195
(22,914)
Cash and cash equivalents and restricted cash and cash equivalents, beginning of period
4,667
28,075
Cash and cash equivalents and restricted cash and cash equivalents, end of period
6,862
5,161
Supplemental disclosure of cash flow data:
Interest paid, net of capitalized interest
17,611
18,426
Income taxes paid
1,024
873
Accrued purchases of property and equipment
12,021
13,449
Non-cash borrowings of long-term debt for acquisition
194
Reconciliation of cash and cash equivalents and restricted cash and cash equivalents
4,662
Total cash and cash equivalents and restricted cash and cash equivalents as shown in the statement of cash flows
7
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Note 1 – Summary of Business and Significant Accounting Policies
Description of Business
The ONE Group Hospitality, Inc. and its subsidiaries (collectively, the “Company”) is an international restaurant company that develops, owns and operates, manages, franchises and licenses upscale and polished casual, high-energy restaurants. The Company’s primary restaurant brands are STK, a modern twist on the American steakhouse concept featuring premium steaks, seafood and specialty cocktails in an energetic upscale atmosphere, Benihana, an interactive dining destination with highly skilled chefs preparing food in front of guests and served in an energetic atmosphere alongside fresh sushi and innovative cocktails, Kona Grill, a polished casual bar-centric grill concept featuring American favorites, award-winning sushi, and specialty cocktails in an upscale casual atmosphere, and RA, a Japanese cuisine concept that offers a fun-filled, bar-forward, upbeat, and vibrant dining atmosphere anchored by creative sushi, inventive drinks, and outstanding service.
As of June 28, 2026, the Company owned, operated, managed, franchised, or licensed 158 venues, including 32 STKs, 85 Benihanas, 23 Kona Grills and 12 RAs in major metropolitan cities in North America, Europe, Latin America and the Middle East and 6 food and beverage (“F&B”) venues in three hotels and casinos in the United States and Europe. For those restaurants and venues that are managed, licensed or franchised, the Company generates management fees and franchise fees based on top-line revenues and incentive fee revenue based on a percentage of the location’s revenues and profits.
On January 1, 2025, the Company transitioned from a calendar-based fiscal year to a 52/53-week fiscal year. Beginning in 2025, the Company’s fiscal year will end on the last Sunday in December. The Company’s second quarter of 2026 was the 91-day period of March 30, 2026 through June 28, 2026 compared to the second quarter of 2025 which was the 91-day period of March 31, 2025 through June 29, 2025. The six periods ended June 28, 2026 and the six periods ended June 29, 2025 consisted of the first 182 and 180 days of the 2026 and 2025 fiscal years, respectively. The Company’s fiscal year ending December 27, 2026 will contain 364 days. The fiscal year ended December 28, 2025 contained 362 days due to the transition.
Basis of Presentation
The accompanying condensed consolidated balance sheet as of December 28, 2025, which has been derived from audited financial statements, and the accompanying unaudited interim condensed consolidated financial statements (“condensed consolidated financial statements”) of the Company have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and in accordance with accounting principles generally accepted in the U.S. (“GAAP”). Certain information and footnote disclosures normally included in annual audited financial statements have been omitted pursuant to SEC rules and regulations. These unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 28, 2025.
In the Company’s opinion, the accompanying unaudited interim financial statements reflect all adjustments (consisting only of normal recurring accruals and adjustments) necessary for a fair presentation of the results for the interim periods presented. The results of operations for any interim period are not necessarily indicative of the results expected for the full year. Additionally, the Company believes that the disclosures are sufficient for interim financial reporting purposes.
Prior Period Reclassifications
The Company reclassified $1.5 million and $3.1 million for the three and six periods ended June 29, 2025, respectively, in stock-based compensation to general and administrative expenses within the prior period segment reporting footnote to conform to the current year presentation. Refer to Note 14 – Segment Reporting.
Recent Accounting Pronouncements
In April 2026, the FASB issued ASU 2026-01, “Equity (Topic 505): Initial Measurement of Paid-in-Kind Dividends on Equity-Classified Preferred Stock”. This ASU clarifies how issuers initially measure paid-in-kind (“PIK”) dividends on equity-classified preferred stock by requiring issuers to use the PIK dividend rate stated in the preferred stock agreement. The amendment is effective for fiscal years beginning after December 15, 2026, with early adoption permitted. The Company is evaluating the impact of adopting this ASU on its condensed consolidated financial statements.
In November 2024, the FASB issued ASU 2024-03, “Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” This ASU requires detailed qualitative and quantitative disclosures for certain costs and expenses on the income statement. The amendment is effective for fiscal years beginning after December 15, 2026, with early adoption permitted. The Company is evaluating the impact of adopting this ASU on its disclosures.
8
Note 2 – Property and Equipment, Net
Property and equipment, net consist of the following (in thousands):
Furniture, fixtures and equipment
94,330
88,823
Leasehold improvements
280,713
266,224
Less: accumulated depreciation
(133,762)
(117,365)
Subtotal
241,281
237,682
Construction in progress
36,385
35,097
Restaurant smallwares
5,500
5,416
Depreciation related to property and equipment was $10.8 million and $10.5 million for the three periods ended June 28, 2026 and June 29, 2025, respectively, and $21.0 million and $20.1 million for the six periods ended June 28, 2026 and June 29, 2025, respectively, presented within depreciation and amortization expense in the condensed consolidated statement of operations. The Company also recorded $3.4 million in accelerated depreciation relating to property and equipment for the restaurants closed during the quarter presented in lease termination and exit expenses within the condensed consolidated statement of operations for the three and six periods ended June 29, 2025. The Company does not depreciate construction in progress.
Note 3 – Intangibles, Net
Intangibles, net consists of the following (in thousands):
Indefinite-lived intangible assets
Tradenames
130,200
Finite-lived intangible assets
Franchise agreements
800
Other finite-lived intangible assets
341
335
Total finite-lived intangible assets
1,141
1,135
Less: accumulated amortization
(2,400)
(2,347)
Total intangibles, net
Intangible assets consist of the indefinite-lived “Benihana”, “Kona Grill” and “RA” trade names and other finite-lived intangible assets that are amortized using the straight-line method over their estimated useful life of 5 to 15 years. The amortization expense was less than $0.1 million for the three and six periods ended June 28, 2026 and June 29, 2025. The Company’s estimated aggregate amortization expense for each of the five succeeding fiscal years is $0.1 million annually.
Note 4 – Accrued Expenses
Accrued expenses consist of the following (in thousands):
VAT, sales and property taxes
9,404
10,572
Interest
5,983
6,053
Amounts due to landlords
4,640
4,507
New restaurant construction
3,521
Insurance
4,130
Legal, professional and other services
1,463
2,196
Lease termination
663
462
Income taxes
449
Other (1)
11,209
14,466
9
Note 5 – Long-Term Debt
Long-term debt consists of the following (in thousands):
Term loan agreements
339,938
344,313
Revolving credit facility
5,000
7,000
Equipment security notes
2,577
2,856
Promissory notes
171
Total long-term debt
347,686
354,169
Less: current portion of long-term debt
(9,408)
(9,302)
Less: debt issuance costs
(414)
Less: debt original issuance discount
(8,907)
(10,440)
Total long-term debt, net of current portion
Interest expense, net for the Company’s debt arrangements, excluding the amortization of debt issuance costs, debt original issuance discount and fees, was $8.7 million and $9.4 million for the three periods ended June 28, 2026 and June 29, 2025, respectively, and $17.5 million and $18.3 million for the six periods ended June 28, 2026 and June 29, 2025, respectively. Capitalized interest was $0.4 million and $0.7 million for the three and six periods ended June 28, 2026, respectively. Capitalized interest was $0.3 million and $0.9 million for the three and six periods ended June 29, 2025, respectively.
As of June 28, 2026, the Company had $6.3 million in standby letters of credit outstanding for certain restaurants and $28.7 million available in its revolving credit facility, subject to certain conditions.
Credit and Guarantee Agreement
On May 1, 2024, the Company entered into a credit agreement (the “Credit Agreement”) with Deutsche Bank AG New York Branch, Deutsche Bank Securities Inc., HPS Investment Partners, LLC and HG Vora Capital Management, LLC (collectively, the “Lenders”). The Credit Agreement provides a $350.0 million senior secured term loan facility (the “Term Loan Facility”) and a $40.0 million senior secured revolving credit facility (the “Revolving Facility”, and together with the Term Loan Facility, the “Facilities”), which allows up to $10.0 million of which will be available in the form of letters of credit. As of June 28, 2026, the Company had borrowings of $5.0 million on the Revolving Facility.
The Term Loan Facility is not subject to a financial covenant and the Revolving Facility’s financial covenant will apply only after 35% of the Revolving Facility’s capacity has been drawn. As of June 28, 2026, the Company was not subject to a financial covenant.
The Term Loan Facility bears interest at a margin over a reference rate selected at the option of the borrower. The margin for the Term Loan Facility is 6.5% per annum for SOFR borrowings and 5.5% per annum for base rate borrowings. The Term Loan Facility matures on the fifth anniversary of the date of the related loan agreement. The Term Loan Facility is payable in quarterly installments commencing with the fiscal quarter ending September 30, 2024, and are 1% per annum for the first year (through June 30, 2025), then 2.5% per annum for the next two years (through June 2027), then 5% per annum thereafter through maturity on April 30, 2029.
The Revolving Facility bears interest at a margin over a reference rate selected at the option of the borrower. The margin for the Revolving Facility is set quarterly based on the Company’s Consolidated Net Leverage Ratio for the preceding four fiscal quarters and ranges from 5.5% to 6.0% per annum for SOFR borrowings and 4.5% to 5.0% for base rate borrowings. The Revolving Facility matures on November 1, 2028.
The Company’s weighted average interest rate on the borrowings under the Credit Agreement as of June 28, 2026 was 10.2%.
As of June 28, 2026, the Company had $0.4 million of debt issuance costs and $8.9 million of debt original issuance discount related to the Credit Agreement, which were capitalized and are recorded as a direct deduction to long-term debt and less than $0.1 million in debt issuance costs and $0.9 million of debt original issuance discount recorded in Other Assets on the condensed consolidated balance sheets.
Equipment Security Notes
Between July 10, 2025 and September 23, 2025, the Company entered into three Equipment Security Notes with Banc of America Leasing & Capital, LLC in an aggregate amount of $3.0 million to purchase restaurant equipment (the “Equipment Security Notes”). The Equipment Security Notes bear interest at rates ranging from 7.09% to 7.19% per annum, and are each payable in 60 equal monthly installments, inclusive of interest. Each of the Equipment Security Notes is secured by the equipment purchased with the proceeds of such note. As of June 28, 2026, the amount outstanding under the Equipment Security Notes was approximately $2.6 million.
10
Promissory Note
On February 23, 2026, the Company entered into a Promissory Note with Nankai-ya Inc. in the amount of $0.2 million to finance the purchase of a franchised Benihana restaurant (the “Promissory Note”). The Promissory Note bears interest at a rate of 8.0% per annum, and is payable in 24 equal monthly installments, inclusive of interest. As of June 28, 2026, the amount outstanding under the Promissory Note was approximately $0.2 million.
Note 6 – Fair Value of Financial Instruments
Cash and cash equivalents, accounts receivable, inventory, accounts payable and accrued expenses are carried at cost, which approximates fair value. Long-lived assets are measured and disclosed at fair value on a nonrecurring basis if an impairment is identified.
The Company’s long-term debt, which is valued using Level 2 inputs, approximates fair value as such debt bears interest at variable rates which approximates market rates.
Note 7 – Income Taxes
Income taxes are recorded at the Company’s estimated annual effective income tax rate, subject to adjustments for discrete events should they occur. The Company recorded a provision for income taxes of $0.4 million for the first six periods of 2026 compared to $1.0 million for the first six periods of 2025. The Company’s effective income tax rate including discrete events was 41.1% and (11.3)% for the six periods ended June 28, 2026 and June 29, 2025, respectively. The Company’s projected annual effective tax rate differs from the statutory U.S. tax rate of 21% primarily due to the following: (i) tax credits for FICA taxes on certain employees’ tips; (ii) taxes owed in foreign jurisdictions with tax rates that differ from the U.S. statutory rate; (iii) taxes owed in state and local jurisdictions; and (iv) the tax effect of non-deductible compensation.
The Company is subject to U.S. federal, state, local and various foreign income taxes for the jurisdictions in which it operates. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. In the normal course of business, the Company is subject to examination by federal, state, local and foreign taxing authorities.
Note 8 – Revenue Recognition
The following table provides information about contract liabilities, which include deferred license revenue, deferred gift card revenue, advanced party deposits and the Friends with Benefits rewards program (in thousands):
Deferred license revenue (1)
102
116
Deferred gift card and gift certificate revenue (2)
4,655
6,074
Advanced party deposits (2)
833
745
Friends with Benefits rewards program (3)
771
450
Revenue recognized during the period from contract liabilities as of the preceding fiscal year end date is as follows (in thousands):
June 29,
Revenue recognized from deferred license revenue
13
88
Revenue recognized from deferred gift card revenue
2,897
2,188
Revenue recognized from advanced party deposits
673
509
The estimated deferred license revenue to be recognized in the future related to performance obligations that are unsatisfied as of June 28, 2026 were as follows for each year ending (in thousands):
2026, six periods remaining
39
2027
20
2028
2029
14
2030
1
Thereafter
Total future estimated deferred license revenue
11
Note 9 – Leases
The components of lease expense for the six periods ended June 28, 2026 and the six periods ended June 29, 2025 are as follows (in thousands):
Lease cost
Operating lease cost
23,482
23,405
Finance lease cost
Amortization of ROU assets
108
Interest on lease liabilities
47
Total finance lease cost
136
155
Variable lease cost (1)
11,704
10,024
Short-term lease cost
2,050
1,927
Total lease cost
37,372
35,511
Weighted average remaining lease term
Operating leases
13 years
Finance leases
2 years
4 years
Weighted average discount rate
10.45
%
10.36
11.14
The components of finance lease assets and liabilities on the condensed consolidated balance sheet were as follows (in thousands):
Finance lease right-of-use assets (1)
482
573
Current portion of finance lease liabilities (1)
202
191
Long-term portion of finance lease liabilities (1)
336
457
Supplemental cash flow information related to leases for the period was as follows (in thousands):
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases
17,814
22,003
Operating cash flows from finance leases
Financing cash flows from finance leases
Right-of-use assets obtained in exchange for lease obligations:
14,731
864
The Company has entered into ten operating leases for future restaurants that have not commenced as of June 28, 2026. The present value of the aggregate future commitment related to these leases, net of tenant improvement allowances received from the landlord, is estimated to be $10.8 million. The Company expects these leases, which have initial lease terms of 10 to 20 years, to commence within the next twelve months.
12
As of June 28, 2026, maturities of the Company’s operating lease liabilities are as follows (in thousands):
18,317
44,670
49,362
49,974
49,782
398,061
Total lease payments
610,166
Less: imputed interest
(289,898)
Present value of operating lease liabilities
320,268
As of June 28, 2026, maturities of the Company’s finance lease liabilities are as follows (in thousands):
131
253
231
615
(77)
Present value of finance lease liabilities
538
Note 10 – Earnings (Loss) Per Share
Basic loss per share is computed using the weighted average number of common shares outstanding and penny warrants during the period and net loss available to common stockholders. Diluted loss per share is computed using the weighted average number of common shares outstanding during the period and excludes the dilutive effect of potential shares of common stock including common stock issuable pursuant to stock options, warrants, and restricted stock units. The two-class method for computing earnings per share will be utilized when applicable.
For the three and six periods ended June 28, 2026 and June 29, 2025, net loss per share was calculated as follows (in thousands, except net loss per share and related share data):
For the three periods ended June 29, 2025
For the six periods ended June 29, 2025
(as restated)
Basic weighted average shares outstanding
Dilutive effect of stock options, warrants and restricted share units
Diluted weighted average shares outstanding
Basic net loss per common share
Diluted net loss per common share
For the three periods ended June 28, 2026 and June 29, 2025, 2.0 million and 1.7 million, respectively, of stock options, warrants and restricted share units were determined to be anti-dilutive and were therefore excluded from the calculation of diluted earnings per share. For the six periods ended June 28, 2026 and June 29, 2025, respectively, 1.8 million and 1.6 million of stock options, warrants and restricted share units were anti-dilutive.
Subsequent to the issuance of the June 29, 2025 condensed consolidated financial statements, management identified an error in the earnings (loss) per share calculation due to the Company incorrectly excluding 1.9 million of penny warrants from basic weighted average common shares outstanding. The above table has been restated to include the penny warrants in the weighted average common shares outstanding for the three and six periods ended June 29, 2025. The 1.9 million of penny warrants were also removed from the previously reported anti-dilutive share totals for the three and six periods ended June 29, 2025. The loss per share has been restated in the above table from $0.59 and $0.80 per share previously reported for the three periods and six periods ended June 29, 2025, respectively. Amounts for basic and diluted loss per share and weighted average common shares have also been restated in the Condensed Consolidated Statements of Operations. Management considered both quantitative and qualitative factors and determined that the impact of the error is immaterial to prior periods.
Note 11 – Series A Preferred Stock
On May 1, 2024, the Company issued 160,000 shares of Series A Preferred Stock for $160.0 million, subject to a 5% original issuance discount. Additionally, the Company recorded an additional discount of $2.3 million for expenses paid to the holders of the Series A Preferred Stock in connection with the issuance of the Series A Preferred Stock.
The Series A Preferred Stock is non-voting and non-convertible; has compounding dividends that begin at a rate of 13.0% per annum and increase over time at specified intervals; is subject to optional redemption by the Company and mandatory redemption following specified events and in certain circumstances upon the exercise by the holders of a majority of the outstanding shares of Series A Preferred Stock of an option to deliver written notice to the Company to require redemption, in each case, for specified prices; and gives certain consent rights for the holders of a majority of the outstanding shares of Series A Preferred Stock for specified matters.
The Company records the paid-in-kind dividend and accretion of the Series A Preferred Stock using the effective interest method based on a future redemption value of $247.4 million payable in 2027, the earliest date at which the Company can redeem the Series A Preferred Stock. During the three and six periods ended June 28, 2026, the Company recorded paid-in-kind dividends and accretion of the Series A Preferred Stock of $9.9 million and $19.3 million, respectively.
Redemption Rights
On and after May 1, 2029, holders of the Series A Preferred Stock have the right to require redemption of all or any part of the Series A Preferred Stock for an amount equal to the liquidation preference after the fifth anniversary, upon an acceleration of material indebtedness or upon a change-of-control. However, at any time between the third and fourth anniversary of the issuance date, the Company may repurchase all or some of the preferred stock for 102.5% of the liquidation preference. At any time after the fourth anniversary, the Company may repurchase all or some of the preferred stock for 100% of the liquidation preference.
Since the redemption of the Series A Preferred Stock is contingently redeemable and therefore not certain to occur, the Series A Preferred Stock is not required to be classified as a liability under ASC 480, Distinguishing Liabilities from Equity. As the Series A Preferred Stock is redeemable in certain circumstances at the option of the holder and is redeemable in certain circumstances upon the occurrence of an event that is not solely within the Company’s control, the Series A Preferred Stock is classified separately from stockholders’ equity in the condensed consolidated balance sheets.
Note 12 – Stockholders’ Equity
Preferred Stock
The Company is authorized to issue 9,840,000 shares of preferred stock, excluding the Series A Preferred Stock, with a par value of $0.0001 per share. There were no shares of preferred stock that were issued or outstanding at June 28, 2026 or December 28, 2025, other than the Series A Preferred Stock discussed above.
The Company is authorized by its amended and restated certificate of incorporation to issue up to 75.0 million shares of common stock, par value $0.0001 per share. As of June 28, 2026 and December 28, 2025, there were 31.7 million and 31.2 million shares of common stock outstanding, respectively.
Stock Purchase Program
The Company’s Board of Directors authorized a repurchase program of up to $15.0 million of outstanding common stock that was completed in December 2023. In March 2024, the Company’s Board of Directors authorized an additional $5.0 million of repurchases under this program. During the three and six periods ended June 29, 2025, the Company repurchased 0.2 million and 0.3 million shares, respectively, for an aggregate consideration of $0.6 million and $0.9 million, respectively. There were no stock repurchases in the three and six periods ended June 28, 2026. As of June 28, 2026, the Company had purchased 3.4 million shares for $19.3 million under the repurchase program.
Warrants
In connection with the acquisition of Benihana and RA restaurants, on May 1, 2024, the Company issued both market and penny warrants to the following holders of the Series A Preferred Stock. The holders of the penny warrants are entitled to receive any dividends issued to common stockholders. The Company has the following warrants to purchase shares of common stock outstanding as of June 28, 2026 and December 28, 2025.
Exercise
Shares available for purchase
Issuance date
Holder of warrants
Expiration date
Issued
Price
June 28, 2026
December 28, 2025
May 1, 2024
HPC III Kaizen LP
May 1, 2029
1,000,000
10.00
HPS and affiliates
66,667
May 1, 2034
1,786,582
0.01
119,105
Note 13 – Stock-Based Compensation
Stock-Based Compensation
As of June 28, 2026, the Company had 2,865,293 shares available for issuance under the Company’s 2019 Equity Incentive Plan (the “2019 Equity Plan”).
Stock-based compensation cost for the three periods ended June 28, 2026 and June 29, 2025 was $1.1 million and $1.5 million, respectively and for the six periods ended June 28, 2026 and June 29, 2025 was $2.3 million and $3.1 million, respectively. Stock-based compensation is included in general and administrative expenses in the condensed consolidated statements of operations. Included in stock-based compensation cost was $0.2 million and $0.4 million of cost related to unrestricted stock granted to directors for the three and six periods ended June 28, 2026 and June 29, 2025, respectively. Such grants were awarded consistent with the Board of Director’s compensation practices. Stock-based compensation for the three and six periods ended June 28, 2026, included $0.3 million and $0.5 million, respectively, of compensation costs for performance stock units that contain both a market condition and time element (“PSUs”), compared to $0.2 million and $0.5 million for the three and six periods ended June 29, 2025, respectively.
Stock Option Activity
Stock options in the table below include time-based awards. Changes in stock options during the six periods ended June 28, 2026 were as follows:
Weighted
average
Intrinsic
average exercise
remaining
value
price
contractual life
(thousands)
Outstanding at December 28, 2025
803,156
2.99
3.53 years
114
Granted
Exercised
Cancelled, expired or forfeited
(65,942)
2.73
Outstanding at June 28, 2026
737,214
3.02
3.32 years
Exercisable at June 28, 2026
As of June 28, 2026 and December 28, 2025, there were no unvested stock options.
Restricted Stock Unit Activity
The Company issues restricted stock units (“RSUs”) under the 2019 Equity Plan. RSUs in the table below include time-based awards. The fair value of time-based RSUs is determined based upon the closing market value of the Company’s common stock on the grant date.
A summary of the status of RSUs and changes during the six periods ended June 28, 2026 is presented below:
Weighted average
grant date fair value
Non-vested RSUs at December 28, 2025
1,227,938
3.90
1,028,889
1.94
Vested
(335,046)
4.42
(54,539)
3.11
Non-vested RSUs at June 28, 2026
1,867,242
2.75
As of June 28, 2026, the Company had approximately $3.8 million of unrecognized compensation costs related to RSUs, which will be recognized over a weighted average period of 2.0 years.
The fair value of RSUs vested during the three and six periods ended June 28, 2026, was $0.4 million and $1.5 million, respectively.
Performance Stock Unit Activity
The Company issues PSUs under the 2019 Equity Plan. PSUs in the table below include both a market condition and time element. The PSUs may be earned based on achieving common stock price targets within a time period, and if earned, will vest and be settled based on a time element specified in the respective agreement.
15
A summary of the status of PSUs and changes during the six periods ended June 28, 2026 is presented below:
Non-vested PSUs at December 28, 2025
558,488
5.10
208,558
1.55
(33,167)
2.49
Non-vested PSUs at June 28, 2026
733,879
4.21
As of June 28, 2026, the Company had $0.7 million of unrecognized compensation costs related to PSUs, which will be recognized over a weighted average period of 1.7 years.
Note 14 – Segment Reporting
The Company has identified its reportable operating segments as follows:
Presented within Other, which is not a reportable operating segment, are sales and expenses that relate to STK Meat Market, an e-commerce platform that offers signature steak cuts nationwide, the Company’s major off-site events group, which supports all brands and venue concepts and revenue generated from gift card programs.
The Company’s Chief Executive Officer, who is the Company’s Chief Operating Decision Maker (“CODM”), manages the business and allocates resources via a combination of restaurant sales reports and operating segment profit information, defined as owned restaurant net revenues less owned restaurant cost of sales and owned restaurant operating expenses. The CODM is not provided asset information by reportable segment as asset information is provided to the CODM on a consolidated basis.
Certain financial information relating to the three and six periods ended June 28, 2026 and the three and six periods ended June 29, 2025 for each segment is provided below (in thousands).
STK
Benihana
Grill Concepts
Other(1)
For the three periods ended June 28, 2026
53,226
115,666
28,183
209
(12,286)
(20,251)
(6,004)
(3)
(38,544)
(31,693)
(73,541)
(20,956)
(127)
(126,317)
Restaurant operating profit
9,247
21,874
1,223
79
32,423
2,618
461
General and administrative (including stock-based compensation of $1,137)
(14,008)
(11,020)
(919)
(2,859)
(193)
(34)
(9,623)
Loss before benefit for income taxes
Reconciliation of total revenues
(1) Other, which is not a reportable operating segment, includes sales and expenses that relate to STK Meat Market, an e-commerce platform that offers signature steak cuts nationwide; sales and expenses that relate to the Company’s major off-site events group, which supports all brands and venue concepts; and revenue generated from gift card programs.
16
51,319
115,400
37,020
168
(12,337)
(22,832)
(8,019)
(2)
(43,190)
(30,726)
(71,796)
(26,807)
(164)
(129,493)
8,256
20,772
2,194
31,224
2,844
553
75
General and administrative (including stock-based compensation of $1,470)
(11,662)
(10,870)
(5,635)
(1,579)
(3,949)
(61)
(278)
(10,295)
Loss before provision for income taxes
For the six periods ended June 28, 2026
114,194
235,890
56,120
372
(25,995)
(41,191)
(11,867)
(25)
(79,078)
(65,979)
(147,438)
(41,626)
(310)
(255,353)
22,220
47,261
2,627
37
72,145
5,615
896
206
General and administrative (including stock-based compensation of $2,271)
(29,030)
(21,425)
(2,884)
(4,330)
(659)
(54)
(19,369)
Income before provision for income taxes
17
106,185
230,741
74,106
273
(25,446)
(44,928)
(15,931)
(5)
(86,310)
(62,347)
(142,155)
(53,556)
(210)
(258,268)
18,392
43,658
4,619
58
66,727
6,037
1,022
144
General and administrative (including stock-based compensation of $3,102)
(24,753)
(20,699)
(5,706)
(3,260)
(7,668)
(130)
(323)
(20,117)
Note 15 – Geographic Information
Certain financial information by geographic location is provided below (in thousands).
Domestic revenues
199,747
206,803
411,806
417,028
International revenues
730
576
1,487
1,480
The Company’s property and equipment, net is located within the United States.
Note 16 – Commitments and Contingencies
The Company is party to claims in lawsuits incidental to its business, including lease disputes and employee-related matters. The Company has recorded accruals, when necessary, in its consolidated financial statements in accordance with ASC 450. While the resolution of a lawsuit, proceeding or claim may have an impact on the Company’s financial results for the period in which it is resolved, in the opinion of management, the ultimate outcome of such matters and judgements in which the Company is currently involved, either individually or in the aggregate, will not have a material adverse effect on the Company’s consolidated financial position or results of operations.
18
This Quarterly Report on Form 10-Q and certain information incorporated herein by reference contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Section 27A of the Securities Act of 1933, as amended (the “Securities Act”). Forward-looking statements speak only as of the date thereof and involve risks and uncertainties that may cause our actual results, performance or achievements to be materially different from the results, performance or achievements expressed or implied by the forward-looking statements. These risks and uncertainties include the risk factors discussed under Item 1A. “Risk Factors” of this Quarterly Report on Form 10-Q and the Company’s Annual Report on Form 10-K for the year ended December 28, 2025. A number of factors could cause actual results or outcomes to differ materially from those indicated by such forward-looking statements, including but not limited to: (1) our ability to integrate the new or acquired restaurants into our operations without disruptions to operations; (2) our ability to capture anticipated synergies; (3) our ability to open new restaurants and food and beverage locations in current and additional markets, grow and manage growth profitably, maintain relationships with suppliers, obtain adequate supply of products and retain employees; (4) factors beyond our control that affect the number and timing of new restaurant openings, including weather conditions and factors under the control of landlords, contractors and regulatory and/or licensing authorities; (5) our ability to successfully improve performance and cost, realize the benefits of our marketing efforts and achieve improved results as we focus on developing new management and license deals; (6) changes in applicable laws or regulations; (7) the possibility that the Company may be adversely affected by other economic, business, and/or competitive factors, including economic downturns; (8) the impact of actual and potential changes in immigration policies, including potential labor shortages; (9) the potential impact of the imposition of tariffs, including increases in food prices and inflation and any resulting negative impacts on the macro-economic environment; (10) the impact of international conflicts on macroeconomic conditions; (11) risks related to our development and franchise partners; and (12) other risks and uncertainties indicated from time to time in our filings with the Securities and Exchange Commission. We have attempted to identify forward-looking statements by terminology including “anticipates,” “believes,” “can,” “continue,” “ongoing,” “could,” “estimates,” “expects,” “intends,” “may,” “appears,” “suggests,” “future,” “likely,” “goal,” “plans,” “potential,” “projects,” “predicts,” “should,” “targets,” “would,” “will” and similar expressions that convey the uncertainty of future events or outcomes. You should not place undue reliance on any forward-looking statement. We do not undertake any obligation to update or revise any forward-looking statements to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events, except as required under applicable law.
General
This information should be read in conjunction with the condensed consolidated financial statements and the notes included in Item 1 of Part I of this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes, and Management’s Discussion and Analysis of Financial Condition and Results of Operations, contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 2025.
As used in this report, the terms “Company,” “we,” “our,” or “us,” refer to The ONE Group Hospitality, Inc. and its consolidated subsidiaries, taken as a whole, unless the context otherwise indicates.
Business Summary
We are an international restaurant company that develops, owns and operates, manages, licenses and franchises upscale and polished casual, high-energy restaurants. Our vision is to be the undisputed global leader in VIBE dining by executing upon our mission of creating great guest memories by operating the best restaurant in every market that we operate in by delivering exceptional and unforgettable experiences to every guest, every time. We design all our restaurants, lounges and F&B services to create a social dining and high-energy entertainment experience within a destination location. We believe that this design and philosophy separates us from more traditional restaurant and foodservice competitors.
Our primary restaurant brands are as follows:
We opened our first restaurant in January 2004 in New York, New York. We currently own, operate, manage, license or franchise 158 venues including 32 STKs, 86 Benihanas, 22 Kona Grills and 12 RAs in major cities in North America, Europe, Latin America and the Middle East and 6 F&B venues operated under ONE Hospitality in three hotels and casinos throughout the United States and Europe.
As our footprint increases, we expect to benefit by leveraging system-wide operating efficiencies and best practices through the management of our general and administrative expenses as a percentage of overall revenue.
We intend to open six to ten new venues in 2026. We have opened the following restaurants to date in 2026:
In February 2026, we converted a franchised Benihana restaurant to a Company-owned Benihana restaurant.
During the second quarter of 2026, we converted a franchised Benihana Express to a Company-owned Benihana Express restaurant and terminated an agreement for a franchised Benihana Express restaurant.
There are currently the following restaurants under construction:
In addition, the following asset-light restaurants are in development:
The table below reflects our current venues by restaurant brand and geographic location:
Venues
STK(1)
Grill Concepts(2)
ONE Hospitality(3)
Domestic
Owned
22
73
Sports Arenas(4)
Managed
Licensed
Franchised
Total domestic
24
82
142
International
Total international
Total venues
86
158
In 2025, we completed a comprehensive review of our Grill Concepts portfolio and made the strategic decision to close or convert several locations. As part of this initiative, we permanently closed one RA restaurant in January 2026. In addition, we temporarily closed three Kona Grill restaurants and two RA restaurants in January 2026 that will be converted into a Benihana or STK restaurant.
Our Growth Strategies and Outlook
Our growth model is primarily driven by the following:
Executive Summary
Three Periods Ended June 28, 2026 Compared to the Three Periods Ended June 29, 2025
Total revenue decreased $6.9 million, or 3.3% to $200.5 million for the three periods ended June 28, 2026 compared to $207.4 million for the three periods ended June 29, 2025. The change in revenue is attributable to the closures of certain restaurants pursuant to the Grill Concepts portfolio optimization discussed above.
Same store sales for 2026 compared to 2025 and 2025 compared to 2024 were as follows:
2025 vs. 2024
2026 vs. 2025
Q1
Q2
Q3
Q4
YTD
US STK Owned Restaurants
(2.3)%
(4.9)%
(6.2)%
(0.7)%
(3.4)%
(0.1)%
2.5%
1.1%
US STK Managed Restaurants
(12.7)%
(9.5)%
(4.7)%
4.2%
(4.6)%
8.1%
6.4%
7.3%
US STK Total Restaurants
(3.6)%
(6.0)%
(5.8)%
0.3%
(3.7)%
1.4%
3.2%
2.2%
Benihana Owned Restaurants
0.7%
0.4%
(4.0)%
(0.4)%
(0.8)%
—%
0.8%
Grill Concepts Owned Restaurants
(13.7)%
(14.6)%
(11.8)%
(9.4)%
(12.5)%
(5.3)%
(2.9)%
(4.1)%
Combined Same Store Sales
(3.2)%
(5.9)%
(1.8)%
(0.3)%
0.9%
Operating income increased $5.9 million to $6.6 million for the three periods ended June 28, 2026 compared to $0.7 million for the three periods ended June 29, 2025 primarily due to improved restaurant operating profit partly offset by higher general and administrative expenses coupled with the reduction in transition and integration costs related to the acquisition of the Benihana and RA restaurants and lower lease termination and restaurant closure expenses partly offset by higher general and administrative expenses.
Restaurant operating profit improved $1.2 million, or 3.8%, to $32.4 million for the three periods ended June 28, 2026, compared to $31.2 million for the three periods ended June 29, 2025. Restaurant operating profit as a percentage of owned restaurant net revenue was 16.4% in the second quarter of 2026 compared to 15.3% in the second quarter of 2025. See “Results of Operations” below for a reconciliation of Restaurant operating profit to Operating income, the most directly comparable GAAP measure.
Net loss attributable to The ONE Group Hospitality, Inc. was $2.1 million for the three periods ended June 28, 2026, compared to a net loss of $10.1 million for the three periods ended June 29, 2025, primarily due to improved restaurant operating profit coupled with the decrease in transition and integration costs related to the acquisition of the Benihana and RA restaurants.
Six Periods Ended June 28, 2026 Compared to the Six Periods Ended June 29, 2025
Total revenues decreased $5.2 million, or 1.2%, to $413.3 million for the six periods ended June 28, 2026 compared to $418.5 million for the six periods ended June 29, 2025. The change in revenue is attributable to the closures of certain restaurants pursuant to the Grill Concepts portfolio optimization discussed above.
Operating income increased $9.1 million to $20.5 million for the six periods ended June 28, 2026 compared to $11.4 million for the six periods ended June 29, 2025 primarily due to improved restaurant operating profit partly offset by higher general and administrative expenses coupled with the reduction in transition and integration costs related to the acquisition of Benihana and RA restaurants.
Restaurant operating profit increased $5.4 million or 8.1% to $72.1 million for the six periods ended June 28, 2026, compared to $66.7 million for the six periods ended June 29, 2025, primarily attributable to lower cost of sales due to menu optimization, integration synergies, supply chain initiatives and increased menu pricing. Restaurant operating profit as a percentage of owned restaurant net revenue was 17.7% for the six periods ended June 28, 2026, compared to 16.2% for the six periods ended June 29, 2025. See “Results of Operations” below for reconciliation of Restaurant operating profit to Operating income, the most directly comparable GAAP measure.
Net income attributable to The ONE Group Hospitality, Inc. was $1.1 million for the six periods ended June 28, 2026, compared to a net loss of $9.1 million for the six periods ended June 29, 2025, primarily due to improved Restaurant operating profit partly offset by higher general and administrative expenses coupled with the decrease in transition and integration costs related to the acquisition of the Benihana and RA restaurants.
21
Results of Operations
The following table sets forth certain statements of operations data for the periods indicated (in thousands):
The following table sets forth certain statements of operations data as a percentage of total revenues for the periods indicated. Certain percentage amounts may not sum to total due to rounding.
98.4%
98.3%
1.6%
1.7%
100.0%
Owned restaurant cost of sales (1)
19.5%
21.2%
19.4%
21.0%
Owned restaurant operating expenses (1)
64.0%
63.5%
62.8%
Total owned operating expenses (1)
83.6%
84.7%
82.3%
83.8%
General and administrative (including stock-based compensation of 0.6% and 0.5% for the three and six periods ended June 28, 2026, respectively, and 0.7% for the three and six periods ended June 29, 2025, respectively)
7.0%
5.6%
5.9%
5.5%
5.2%
4.9%
0.5%
2.7%
1.0%
0.1%
1.9%
0.2%
1.8%
0.0%
96.7%
99.7%
95.1%
97.3%
3.3%
4.8%
5.0%
4.7%
(1.5)%
(2.1)%
(1.2)%
(5.0)%
(1.1)%
(2.2)%
23
EBITDA, Adjusted EBITDA, Restaurant operating profit and Restaurant EBITDA are presented in this Quarterly Report on Form 10-Q to supplement other measures of financial performance. EBITDA, Adjusted EBITDA, Restaurant operating profit and Restaurant EBITDA are not required by, or presented in accordance with, accounting principles generally accepted in the U.S. (“GAAP”). We define EBITDA as net income before interest expense, provision for income taxes and depreciation and amortization. We define Adjusted EBITDA as net income before interest expense, provision for income taxes, depreciation and amortization, stock-based compensation, lease termination and restaurant closure expenses, transition and integration expenses, transaction costs, non-cash rent, non-cash impairment loss, non-recurring gains and losses, certain transactional and exit costs and loss on early debt extinguishment. Not all the aforementioned items defining Adjusted EBITDA occur in each reporting period but have been included in our definitions of terms based on our historical activity. Adjusted EBITDA presented in this Quarterly Report on Form 10-Q is a supplemental measure of financial performance that is not required by, or presented in accordance with, GAAP. We define Restaurant operating profit as owned restaurant net revenue minus owned restaurant cost of sales and owned restaurant operating expenses. We define Restaurant EBITDA as owned restaurant net revenue minus owned restaurant cost of sales and owned restaurant operating expenses before non-cash rent.
We believe that EBITDA, Adjusted EBITDA, Restaurant operating profit and Restaurant EBITDA are appropriate measures of our operating performance because they eliminate non-cash or non-recurring expenses that do not reflect our underlying business performance. We believe Restaurant operating profit and Restaurant EBITDA are important components of financial results because they are widely used metrics within the restaurant industry to evaluate restaurant-level productivity, efficiency, and performance, and we use Restaurant operating profit and Restaurant EBITDA as a key metric to evaluate our restaurant financial performance compared to our competitors. We use these metrics to facilitate a comparison of our operating performance on a consistent basis from period to period, to analyze the factors and trends affecting our business and to evaluate the performance of our restaurants. Adjusted EBITDA has limitations as an analytical tool and our calculation of Adjusted EBITDA may not be comparable to that reported by other companies; accordingly, you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Adjusted EBITDA is a key measure used by management and is a metric used in our debt compliance calculation. Additionally, Adjusted EBITDA and Restaurant operating profit are frequently used by analysts, investors and other interested parties to evaluate companies in our industry. We use Adjusted EBITDA and Restaurant operating profit, alongside other GAAP measures such as net income, to measure profitability, as a key profitability target in our budgets, and to compare our performance against that of peer companies despite possible differences in calculation.
The following table presents a reconciliation of net loss to EBITDA and Adjusted EBITDA for the periods indicated (in thousands):
Net loss attributable to noncontrolling interest
Interest expense, net
EBITDA
17,577
11,532
41,879
32,090
Lease termination and restaurant closure expenses(1)
Non-cash rent(2)
1,091
280
1,530
(857)
Adjusted EBITDA
20,977
23,205
49,303
48,162
Adjusted EBITDA attributable to noncontrolling interest
(120)
(156)
(402)
(396)
Adjusted EBITDA attributable to The ONE Group Hospitality, Inc.
21,097
23,361
49,705
48,558
The following table presents a reconciliation of Owned restaurant net revenue for the six periods ended June 28, 2026 to the six periods ended June 29, 2025 (in thousands):
Owned restaurant net revenue for the six periods ended June 29, 2025
Decrease in sales for Grill Concepts restaurants closed(1)
(15,539)
Decrease in sales due to the elimination of auto-gratuities(2)
(2,631)
Increase in sales due to fiscal calendar shift(3)
8,291
Other changes in sales(4)
5,150
Owned restaurant net revenue for the six periods ended June 28, 2026
The following table presents a reconciliation of Operating income to Restaurant operating profit for the periods indicated (in thousands):
Operating income as reported
Management, license and incentive fee revenue
(3,193)
(3,472)
(6,717)
(7,203)
General and administrative
Restaurant operating profit as a percentage of owned restaurant net revenue
16.4%
15.3%
17.7%
16.2%
Non-cash rent
(114)
700
(218)
(852)
Restaurant EBITDA
32,309
31,924
71,927
65,875
Restaurant EBITDA as a percentage of owned restaurant net revenue
15.7%
16.0%
Restaurant operating profit by brand is as follows (in thousands):
STK restaurant operating profit (Company owned)
STK restaurant operating profit (Company owned) as a percentage of STK revenue (Company owned)
17.4%
16.1%
17.3%
Benihana restaurant operating profit (Company owned)
Benihana restaurant operating profit (Company owned) as a percentage of Benihana revenue (Company owned)
18.9%
18.0%
20.0%
Core Grill Concepts restaurant operating profit
1,315
2,580
2,973
5,634
Core Grill Concepts restaurant operating profit as a percentage of Core Grill Concepts revenue
9.1%
10.2%
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Restaurant EBITDA by brand is as follows (in thousands):
STK restaurant EBITDA (Company owned)
8,848
8,148
21,359
17,843
STK restaurant EBITDA (Company owned) as a percentage of STK revenue (Company owned)
16.6%
15.9%
18.7%
16.8%
Benihana restaurant EBITDA (Company owned)
22,224
21,308
47,979
44,479
Benihana restaurant EBITDA (Company owned) as a percentage of Benihana revenue (Company owned)
19.2%
18.5%
20.3%
19.3%
Core Grill Concepts restaurant EBITDA
1,213
2,980
2,821
4,616
Core Grill Concepts restaurant EBITDA as a percentage of Core Grill Concepts revenue
4.5%
10.6%
5.3%
8.3%
Results of Operations for the Three Periods Ended June 28, 2026 Compared to the Three Periods Ended June 29, 2025
Revenues
Owned restaurant net revenue. Owned restaurant net revenue decreased $6.6 million, or 3.2%, to $197.3 million for the three periods ended June 28, 2026 from $203.9 million for the three periods ended June 29, 2025. The change was primarily attributable to a decrease in revenues from Grill Concepts restaurants either temporarily or permanently closed and the elimination of auto-gratuities, partially offset by an increase in comparable restaurant sales and sales from new restaurants opened since July 2025. Comparable restaurant sales increased 0.9% in the three periods ended June 28, 2026 compared to the three periods ended June 29, 2025.
Management, license, franchise and incentive fee revenue. Management, license, franchise and incentive fee revenues decreased $0.3 million to $3.2 million for the three periods ended June 28, 2026 compared to $3.5 million for the three periods ended June 29, 2025, primarily due to the exit of a management agreement in Scottsdale, Arizona in the second quarter of 2025.
Cost and Expenses
Owned restaurant cost of sales. Food and beverage costs for owned restaurants decreased $4.7 million, or 10.9%, to $38.5 million for the three periods ended June 28, 2026 from $43.2 million for the three periods ended June 29, 2025. As a percentage of owned restaurant net revenue, cost of sales improved by 170 basis points to 19.5% for the three periods ended June 28, 2026 compared to 21.2% for the three periods ended June 29, 2025 primarily due to menu optimization, integration synergies, supply chain initiatives and increased menu pricing.
Owned restaurant operating expenses. Owned restaurant operating expenses decreased $3.2 million, or 2.5% to $126.3 million for the three periods ended June 28, 2026 from $129.5 million for the three periods ended June 29, 2025. Owned restaurant operating costs as a percentage of owned restaurant net revenue increased 50 basis points from 63.5% in the three periods ended June 29, 2025 to 64.0% for the three periods ended June 28, 2026 primarily due to an increase in marketing expenses.
General and administrative. General and administrative costs increased $2.3 million, or 19.7%, to $14.0 million for the three periods ended June 28, 2026 from $11.7 million for the three periods ended June 29, 2025. The increase was attributable to inflation on salaries, higher bonus expense, planned investments in information technology, including AI-related technologies, and increased travel expenses. As a percentage of revenues, general and administrative costs were 7.0% for the three periods ended June 28, 2026 compared to 5.6% for the three periods ended June 29, 2025.
Depreciation and amortization. Depreciation and amortization expense was $11.0 million for the three periods ended June 28, 2026, compared to $10.9 million for the three periods ended June 29, 2025.
Lease termination and restaurant closure expenses. Lease termination and restaurant closure expenses were $0.9 million for the three periods ended June 28, 2026, which consisted primarily of expenses related to the Grill Concepts optimization and the relocation of an STK restaurant in New York, New York. Lease termination and restaurant closure expenses were $5.6 million for the three periods ended June 29, 2025 primarily related to accelerated depreciation as well as exit costs associated with five Grill Concept restaurants closed during the quarter and the termination of an operating agreement.
Pre-opening expenses. In the three periods ended June 28, 2026, we incurred $2.9 million of pre-opening expenses primarily comprised of payroll, training and other costs for STK Downtown Phoenix, which opened in June 2026, and STK Chelsea, which opened in July 2026, preopen rent for restaurants that the Company has possession of, which included $1.1 million in non-cash rent, and pre-opening expenses for restaurants currently under development. Pre-opening expenses for the three periods ended June 29, 2025 were $1.6 million. Details of pre-opening expenses by category are provided in the table below for the three periods ended June 28, 2026 and three periods ended June 29, 2025 (in thousands).
Three Periods Ended June 28, 2026
Preopen Expenses
Preopen Rent (1)
Training Team
152
Restaurants
1,076
1,631
2,707
1,228
Three Periods Ended June 29, 2025
353
834
392
1,226
1,187
Transition and integration costs. In the three periods ended June 28, 2026, we incurred $0.2 million in transition and integration costs associated with the acquisition of the Benihana and RA restaurants for expenses related to temporary rentals of heating, ventilation and air conditioning equipment while we complete repairs and replacements of equipment acquired with the Benihana and RA restaurants. In the three periods ended June 29, 2025, we incurred $3.9 million of transition and integration costs associated with the acquisition of the Benihana and RA restaurants. Included in these costs are expenses related to duplicate professional service vendors, operations support offices, support positions, and maintenance expenses that have since been eliminated.
Interest expense, net of interest income. Interest expense, net of interest income, was $9.6 million for the three periods ended June 28, 2026 compared to $10.3 million for the three periods ended June 29, 2025. The weighted average interest rate for the three periods ended June 28, 2026 was 10.1% compared to 10.8% for the three periods ended June 29, 2025.
(Benefit) Provision for income taxes. The benefit for income taxes for the three periods ended June 28, 2026 was $0.7 million compared to $0.7 million of tax expense for the three periods ended June 29, 2025. The effective income tax rate for the second quarter of 2026 was 23.4% compared to 7.3% for the second quarter of 2025.
Results of Operations for the Six Periods Ended June 28, 2026 Compared to the Six Periods Ended June 29, 2025
Owned restaurant net revenue. Owned restaurant net revenue decreased $4.7 million, or 1.1%, to $406.6 million for the six periods ended June 28, 2026, from $411.3 million for the six periods ended June 29, 2025. The change was primarily attributable to a decrease in revenues from Grill Concepts restaurants closed and the elimination of auto-gratuities, partially offset by an increase in comparable restaurant sales and sales from new restaurants opened since March 2025. Comparable restaurant sales increased 0.3% during the six periods ended June 28, 2026 compared to the six periods ended June 29, 2025.
Management, license and incentive fee revenue. Management, license and incentive fee revenues decreased $0.5 million, or 6.9%, to $6.7 million for the six periods ended June 28, 2026 from $7.2 million for the six periods ended June 29, 2025 primarily due to the exit of a management agreement in Scottsdale, Arizona in the second quarter of 2025.
Owned restaurant cost of sales. Food and beverage costs for owned restaurants decreased $7.2 million, or 8.3%, to $79.1 million for the six periods ended June 28, 2026, from $86.3 million for the six periods ended June 29, 2025. As a percentage of owned restaurant net revenue, cost of sales improved 160 basis points to 19.4% for the six periods ended June 28, 2026 from 21.0% in the six periods ended June 29, 2025 primarily due to menu optimization, integration synergies, supply chain initiatives and increased menu pricing.
Owned restaurant operating expenses. Owned restaurant operating expenses decreased $2.9 million to $255.4 million for the six periods ended June 28, 2026, from $258.3 million for the six periods ended June 29, 2025. Owned restaurant operating costs as a percentage of owned restaurant net revenue was flat at 62.8% for both the six periods ended June 29, 2025 and June 28, 2026.
General and administrative. General and administrative costs increased $4.2 million, or 16.9%, to $29.0 million for the six periods ended June 28, 2026, compared to $24.8 million for the six periods ended June 29, 2025. The increase was attributable to inflation on salaries and planned investments in information technology, including AI-related technologies. As a percentage of revenues, general and administrative costs increased by 110 basis points to 7.0% for the six periods ended June 28, 2026 compared to 5.9% for the six periods ended June 29, 2025.
Depreciation and amortization. Depreciation and amortization expense increased $0.7 million to $21.4 million for the six periods ended June 28, 2026, compared to $20.7 million for the six periods ended June 29, 2025. The increase is attributed to new restaurants opened since June 2025.
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Lease termination and restaurant closure expenses. Lease termination and restaurant closure expenses were $2.9 million for the six periods ended June 28, 2026, which consisted primarily of expenses related to the Grill Concepts optimization and included $0.4 million in non-cash expenses. Lease termination and restaurant closure expenses were $5.7 million for the six periods ended June 29, 2025.
Pre-opening expenses. In the six periods ended June 28, 2026, we incurred $4.3 million of pre-opening expenses primarily comprised of payroll, training and other costs for STK Downtown Phoenix, which opened in June 2026, and STK Chelsea, which opened in July 2026, preopen rent for restaurants that the Company has possession of, which included $1.6 million in non-cash rent, and pre-opening expenses for restaurants currently under development. Pre-opening expenses for the six periods ended June 29, 2025 were $3.3 million. Details of pre-opening expenses by category are provided in the table below for the six periods ended June 28, 2026 and June 28, 2025 (in thousands).
Six Periods Ended June 28, 2026
310
1,389
2,631
4,020
1,699
Six Periods Ended June 29, 2025
845
1,511
904
2,415
2,356
Transition and integration costs. In the six periods ended June 28, 2026, we incurred $0.7 million in transition and integration costs associated with the acquisition of Benihana and RA restaurants for expenses related to temporary rentals of heating, ventilation and air conditioning equipment while we complete repairs and replacement of equipment acquired with the Benihana and RA restaurants. In the six periods ended June 29, 2025, we incurred $7.7 million of transition and integration costs associated with the acquisition of the Benihana and RA restaurants. Included in these costs are expenses related to identified duplicate professional service vendors, operational support offices, support positions, and maintenance expenses that have since been eliminated.
Interest expense, net of interest income. Interest expense, net of interest income, was $19.4 million for the six periods ended June 28, 2026 compared to $20.1 million for the six periods ended June 29, 2025. The weighted average interest rate for the six periods ended June 28, 2026 was 10.2% compared to 10.9% for the six periods ended June 29, 2025.
(Benefit) provision for income taxes. The provision for income taxes for the six periods ended June 28, 2026 was $0.4 million, compared to $1.0 million for the six periods ended June 29, 2025. The effective income tax rate for the second quarter of 2026 was 41.1% compared to (11.3%) for the second quarter of 2025.
Liquidity and Capital Resources
Our principal liquidity requirements are to meet our lease obligations, working capital and capital expenditure needs and to pay principal and interest on outstanding debt. Subject to our operating performance, which, if significantly adversely affected, would adversely affect the availability of funds, we expect to finance our operations for at least the next 12 months and the foreseeable future, including the costs of opening currently planned new restaurants, through cash provided by operations, construction allowances provided by landlords of certain locations and borrowings under our Credit Agreement. We also may borrow on our Revolving Facility or issue equity, including preferred stock, to support ongoing business operations. We believe these sources of financing are adequate to support our immediate business operations and plans. As of June 28, 2026, we had cash and cash equivalents of $6.4 million. Our credit card receivables as of June 28, 2026 were $10.7 million, which are typically collected within four days. We had $347.7 million in long-term debt, which primarily consisted of borrowings under our Credit Agreement as of June 28, 2026. As of June 28, 2026, the availability on our Revolving Facility was $28.7 million, subject to certain conditions.
For the six periods ended June 28, 2026, capital expenditures were $23.0 million, of which $15.4 million related to the construction of new STK, Benihana and Kona Grill restaurants, $2.5 related to remodels or major projects at existing restaurants and $4.7 million related to existing restaurants. We expect to receive between $1.0 million to $1.6 million in landlord contributions in the next three months.
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Capital expenditures by type for the six periods ended June 28, 2026 and June 29, 2025, respectively, are provided below (in thousands).
New Venues
11,012
3,477
838
38
15,365
Remodels
320
2,057
2,463
Maintenance
1,459
2,379
906
4,744
Other
437
12,791
7,913
1,830
475
23,009
Tenant Improvement Allowance
3,179
1,420
4,599
Total Capital Expenditures, net of Tenant Improvement Allowance
9,612
6,493
18,410
12,849
4,729
2,105
218
19,901
4,060
4,673
3,066
11,799
448
16,909
9,402
5,171
666
32,148
1,276
640
357
2,273
15,633
8,762
4,814
29,875
Our operations have not required significant working capital, and, like many restaurant companies, we may have negative working capital during the year. Revenues are received primarily in credit card or cash receipts, and restaurant operations do not require significant receivables or inventories, other than our wine inventory. In addition, we receive trade credit for the purchase of food, beverages and supplies, thereby reducing the need for incremental working capital to support growth. Due to the seasonality of our business, we typically generate a greater proportion of our cash flow from operations during the fourth quarter.
Our future cash requirements will depend on many factors, including the pace of expansion, conditions in the retail property development market, construction costs, the nature of the specific sites selected for new restaurants, and the nature of the specific leases and associated tenant improvement allowances available, if any, as negotiated with landlords. We have made significant investments in our training and development teams to support new restaurants openings. We believe these investments are necessary to support the successful opening of our new restaurants. If we modify our growth plans, the personnel that comprise our training team could be deployed to operate existing restaurants.
To help manage future cash requirements, we intend to prioritize capital-efficient growth in 2026, significantly reducing discretionary capital expenditures. New-restaurant Company-owned development will focus on locations requiring $1.5 million or less, net of tenant improvement allowance, to open. We plan to convert up to an additional nine Company-owned Grill restaurants to Benihana or STK formats. These conversions are expected to require approximately $1.0 million in capital investment and are anticipated to be accretive to EBITDA.
Credit Agreement
Refer to Note 5 and Note 16 to our condensed consolidated financial statements set forth in Item 1 of this Quarterly Report on Form 10-Q for further information regarding our long-term debt arrangements and commitments and contingencies.
Capital Expenditures and Lease Arrangements
When we open new Company-owned restaurants, our capital expenditures for construction increase. For owned STK restaurants, where we build from a shell state, we have typically targeted a restaurant size of 8,000 square feet with a net cash investment of approximately $450 to $500 per square foot, made up of a gross cash investment of $600 to $650 per square foot and $150 per square foot in landlord contributions. STK restaurants opened in 2024 and 2025 had a gross cost per square foot of $689 and $119 per square foot in landlord contributions with an average size of 11,922 square feet. For owned Benihana restaurants, where we build from a shell state, we have typically targeted a restaurant size of 6,000 to 7,000 square feet. In situations where we add functional space and build a restaurant with a mezzanine, covered patio, or rooftop, costs per square foot will increase. Typical cash pre-opening costs are $0.6 million to $0.8 million, excluding the impact of cash and non-cash pre-opening rent. In addition, some of our existing restaurants will require capital improvements to either maintain or improve the facilities. We may add seating or provide enclosures for outdoor space in the next twelve months for some of our locations, when we believe that will increase revenues for those locations.
Our hospitality F&B services projects typically require limited capital investment from us. Capital expenditures for these projects are primarily funded by cash flows from operations and equipment financing, depending upon the timing of these expenditures and cash availability.
We typically seek to lease our restaurant locations for periods of 10 to 20 years under operating lease arrangements, with a limited number of renewal options. Our rent structure varies, but our leases generally provide for the payment of both minimum and contingent rent based on sales, as well as other expenses related to the leases such as our pro-rata share of common area maintenance, property tax and insurance expenses. Many of
29
our lease arrangements include the opportunity to secure tenant improvement allowances to partially offset the cost of developing and opening the related restaurants. Generally, landlords recover the cost of such allowances from increased minimum rents. However, there can be no assurance that such allowances will be available to us on each project that we select for development.
Cash Flows
The following table summarizes the statement of cash flows for the six periods ended June 28, 2026 and the six periods ended June 29, 2025 (in thousands):
Net cash provided by (used in):
Operating activities
Investing activities
Financing activities
Net increase (decrease) in cash and cash equivalents
Operating Activities. Net cash provided by operating activities was $33.0 million for the six periods ended June 28, 2026, compared to $11.3 million for the six periods ended June 29, 2025. The increase was primarily attributable to increased net income and collections on credit card receivables, partially offset by the timing of payments of accrued expenses.
Investing Activities. Net cash used in investing activities for the six periods ended June 28, 2026, was $23.6 million, excluding tenant improvement allowances of $4.6 million, of which $15.4 million primarily related to the construction of new STK, Benihana and Kona Grill restaurants, $2.5 million related to remodels or major projects at existing restaurants and $4.7 million related to existing restaurants.
Net cash used in investing activities for the six periods ended June 29, 2025 was $32.1 million, of which $19.9 million consisted of capital expenditures primarily for the construction of three restaurants opened during the first half of 2025, as well as residual payments on the two restaurants that opened during the fourth quarter of 2024 and restaurants that were under development as of June 29, 2025, as well as capital expenditures for existing restaurants.
Financing Activities. Net cash used in financing activities for the six periods ended June 28, 2026 was $7.1 million, primarily comprised of $4.4 million of repayments under the Term Loan Facility and $2.0 million in the repayments net of borrowings on the Revolving Facility compared to net cash used in financing activities of $2.2 million for the six periods ended June 29, 2025.
30
See Note 1 to our condensed consolidated financial statements set forth in Item 1 of this Quarterly Report on Form 10-Q for a detailed description of recent accounting pronouncements. We do not expect the recent accounting pronouncements discussed in Note 1 to have a significant impact on our consolidated financial position or results of operations.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
As a “smaller reporting company,” as defined in Item 10 of Regulation S-K, we are not required to provide this information.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, as our controls are designed to do, and management necessarily applies its judgment in evaluating the risk and cost benefit relationship related to controls and procedures.
Our Chief Executive Officer and Chief Financial Officer have reviewed the effectiveness of our disclosure controls and procedures as of June 28, 2026 and based on this evaluation, have concluded that our disclosure controls and procedures were effective as of June 28, 2026.
Changes in Internal Controls
There have been no changes in our internal controls over financial reporting that occurred during the quarter ended June 28, 2026 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
PART II — OTHER INFORMATION
Item 1. Legal Proceedings.
We are subject to claims common to our industry and in the ordinary course of our business. Companies in our industry, including us, have been and are subject to class action lawsuits, primarily regarding compliance with labor laws and regulations. Defending lawsuits requires significant management attention and financial resources and the outcome of any litigation is inherently uncertain. We believe that accrual and disclosure for these matters are adequately provided for in our consolidated financial statements. We do not believe the ultimate resolutions of these matters will have a material adverse effect on our consolidated financial position and results of operations. However, the resolution of lawsuits is difficult to predict. A significant increase in the number of these claims, or one or more successful claims under which we incur greater liabilities than is currently anticipated, could materially and adversely affect our consolidated financial statements.
Item 1A. Risk Factors.
Except as set forth below, there have been no material changes to the risk factors contained in Item 1A of our Form 10-K for the year ended December 28, 2025.
Geopolitical instability and armed conflict involving Iran could adversely affect our business, financial condition and results of operations.
Ongoing or future armed conflict, heightened geopolitical tensions, or military hostilities involving Iran, including the full or partial closure of the Strait of Hormuz or restricted access to the Red Sea, damage to energy production, transport facilities or infrastructure, or retaliatory actions by regional or global powers, could materially and adversely affect global economic conditions and financial markets. Such developments could disrupt international trade, energy markets, fertilizer markets, currency stability and transportation routes, leading to increased volatility in commodity prices, supply chain disruptions, inflationary pressures and reduced consumer and business confidence.
In addition, any conflict involving Iran could result in further regulatory constraints, sanctions compliance obligations, limitations on cross-border transactions or restrictions on access to certain markets, counterparties or financial institutions. These factors may increase our operating costs, delay or impair our ability to execute strategic initiatives, limit growth opportunities or negatively impact demand for building materials. The extent of these impacts is uncertain and may be exacerbated by the duration, geographic scope and severity of such geopolitical developments, any of which could have a material adverse effect on our business, financial condition and results of operations.
(c) Adoption or Termination of 10b5-1 Trading Plans
During the second quarter ended June 28, 2026, no director or officer adopted, modified, or terminated any Rule 10b5-1trading arrangement or non-Rule 10b5-1 trading arrangement, as such terms are defined in Item 408(a) of Regulation S-K.
Item 6. Exhibits.
(a) Exhibits required by Item 601 of Regulation S-K.
Exhibit
Description
3.1
Amended and Restated Certificate of Incorporation (Incorporated by reference to Form 8-K filed on September 5, 2014).
3.2
Certificate of Designations of Series A Preferred Stock (Incorporated by reference to Form 8-K filed on May 1, 2024).
3.3
Amended and Restated Bylaws (Incorporated by reference to Form 8-K filed on October 25, 2011).
31.1*
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes – Oxley Act of 2002
31.2*
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes – Oxley Act of 2002
32.1*
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes – Oxley Act of 2002, 18 U.S.C. Section 1350.
32.2*
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes – Oxley Act of 2002, 18 U.S.C. Section 1350.
101.CAL*
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*
Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*
Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*
Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.INS*
Inline XBRL Instance Document
101.SCH*
Inline XBRL Taxonomy Extension Schema Document
104*
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
*Filed herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Dated: August 7, 2026
By:
/s/ Nicole Thaung
Nicole Thaung, Chief Financial Officer