BUENA PARK, CA - Yoshiharu Global Co. (NASDAQ:YOSH), a prominent Japanese ramen restaurant operator based in California, has finalized the acquisition of three Las Vegas-based restaurants for a total of $3.6 million. The transaction, which includes assets from Jjanga LLC, HJH LLC, and Ramen Aku LLC, was funded through a mix of cash, a promissory note, and a convertible note, giving the Seller an option to convert the debt into Yoshiharu's Class A common shares.
The Seller, whose identity remains undisclosed, will continue to be involved in the management of the restaurants under a new employment contract. James Chae, President, CEO, and Chairman of Yoshiharu, expressed optimism about the deal, expecting the newly acquired entities to contribute approximately $6 million in annual revenues for the year 2024. Chae anticipates the acquisition will enable Yoshiharu to break even in the latter half of 2024 and turn profitable by 2025.
Yoshiharu, known for its authentic Japanese ramen, has experienced significant growth since its inception in 2016. The company has rapidly become a leader in the ramen dining experience in Southern California and expanded its presence along the West Coast, currently operating 11 restaurants.
This strategic move marks Yoshiharu's entry into the Nevada market, as it seeks to leverage the financial success of the acquired restaurants to further grow its brand. The acquisition aligns with the company's growth strategy, although it is important to note that forward-looking statements involve risks and uncertainties. Yoshiharu's future plans and performance are subject to various factors, including the ability to execute its growth strategy effectively and the success of its franchise partners.
In other recent news, Yoshiharu Global Co. has announced a delay in filing its quarterly report due to issues with its former auditor, BF Borgers CPA PC. The company has filed a Form NT 10-Q with the Securities and Exchange Commission (SEC), seeking an extension. Yoshiharu is currently in the process of securing a new auditor that complies with the Public Company Accounting Oversight Board (PCAOB) standards. The company anticipates engaging a new audit firm by the end of this week.
In addition, Yoshiharu plans to re-audit the financial statements for the years 2022 and 2023, which were previously audited by BF Borgers, with the re-audit expected to be completed by June 2024. These are the recent developments for the company, which has been recognized for its growth and presence in the Southern California restaurant scene since its debut in 2016.
InvestingPro Insights
As Yoshiharu Global Co. (NASDAQ:YOSH) makes a bold expansion into the Nevada market with its recent acquisition, investors are closely monitoring the company's financial health and market potential. According to InvestingPro data, Yoshiharu's market capitalization currently stands at a modest $5.27 million, reflecting the small size of the company within the broader market. The company's revenue for the last twelve months as of Q4 2023 is reported at $9.21 million, with a growth of 11.26%, indicating a positive trajectory in sales. However, it is important to note that the gross profit margin during the same period was relatively low at 9.87%, which may suggest challenges in maintaining profitability as the company scales.
InvestingPro Tips highlight several critical areas of concern for Yoshiharu. The company operates with a significant debt burden and may face difficulties in making interest payments, which is particularly relevant given the recent acquisition's financing mix. Additionally, the firm's short-term obligations exceed its liquid assets, which could pose liquidity risks. With a valuation that implies a poor free cash flow yield and the fact that Yoshiharu has not been profitable over the last twelve months, investors should be aware of the financial challenges the company faces despite its growth ambitions.
For those looking to delve deeper into Yoshiharu's financials and future prospects, InvestingPro offers additional insights and metrics. Interested investors can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, providing access to a comprehensive set of tools and analyses to make informed decisions. With nine more InvestingPro Tips available for Yoshiharu, there's a wealth of information at your fingertips to help gauge the potential risks and rewards associated with this emerging player in the restaurant industry.
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