Yoshiharu Announces Financing Agreements Increasing Stockholders' Equity Above the $2.5 Million Threshold Required for Continued Listing on Nasdaq

Rhea-AI Summary

Yoshiharu Global Co. (NASDAQ: YOSH) has announced significant financial restructuring to maintain its Nasdaq listing compliance. The company secured new financing commitments of $1.65 million and converted $2.5 million of existing debt to equity, pushing stockholders' equity above the required $2.5 million threshold for Nasdaq listing.

The restructuring includes:

• 660,000 warrants issued for $1.65 million
• Conversion of $1.1 million BS1Fund loan into 440,000 warrants
• Conversion of $700,000 Golden Bridge loan into 280,000 warrants
• Conversion of $700,000 CEO James Chae's loan into 280,000 warrants

This financial restructuring comes ahead of the Nasdaq appeal hearing scheduled for April 1, 2025, strengthening the company's balance sheet by reducing debt, principal and interest payments, and near-term cash requirements.

Positive

• Achieved compliance with Nasdaq's $2.5M stockholders' equity requirement
• Secured new financing of $1.65M
• Reduced $2.5M in debt through conversion to equity
• Decreased interest and principal payment obligations
• Lowered near-term cash requirements

Negative

• Significant warrant issuance may lead to future dilution
• Company required emergency financing to maintain Nasdaq listing
• Facing Nasdaq delisting risk with appeal hearing scheduled

Insights

Financial Restructuring Expert

Yoshiharu's financial restructuring represents a critical lifeline for the micro-cap restaurant operator. The company has executed a two-pronged approach: converting $2.5 million in existing debt to equity while securing $1.65 million in new financing via warrant issuances. This restructuring directly addresses the $2.5 million stockholders' equity threshold required for Nasdaq listing.

The warrant structure merits attention - all warrants carry a $0.01 exercise price, making them essentially equivalent to immediate equity issuance once exercised. The debt conversion eliminates $1.1M owed to BS1Fund, $700K to Golden Bridge, and $700K to CEO James Chae himself - the latter suggesting internal confidence in the turnaround strategy.

From a balance sheet perspective, this transformation reduces leverage, eliminates near-term principal payments, and improves cash flow by removing interest obligations. With a market cap of just $26.6 million, this $4.15 million total transaction represents approximately 15.6% of the company's valuation - a substantial recapitalization.

The timing ahead of an April 1st appeal hearing indicates this was a necessary maneuver to maintain listing status. While this restructuring addresses the immediate regulatory compliance issue, investors should evaluate whether underlying operational improvements will follow to sustain the improved capital structure.

Corporate Governance Analyst

Yoshiharu's financing arrangements reveal a strategic prioritization of maintaining Nasdaq listing status above all other considerations. The $2.5 million stockholders' equity threshold represents a fundamental compliance requirement, and the company has engineered a solution through debt-to-equity conversion and new warrant issuances.

CEO James Chae's personal participation in converting his $700,000 loan to equity warrants demonstrates alignment with shareholder interests and skin-in-the-game at this critical juncture. This stands in contrast to scenarios where executives might secure preferential repayment terms ahead of potential delisting events.

The timing of these transactions - just days before the scheduled April 1st Nasdaq appeal hearing - suggests a defensive posture rather than organic capital raising. Nevertheless, the company has successfully positioned itself to present compliance evidence at this hearing.

The warrant structure (1.66 million total warrants at $0.01 exercise price) indicates substantial potential dilution once exercised, which existing shareholders must weigh against the benefits of continued Nasdaq listing. Maintaining listing preserves liquidity, market visibility, and future financing options that would be severely curtailed in an OTC trading scenario.

While this financial engineering solves the immediate regulatory challenge, the board must now pivot to operational execution to justify this capital structure intervention and create sustainable equity value.

Conversion of Existing $2.5 Million in Debt to Equity and Additional Financing Commitments of $1.65 Million Strengthens Balance Sheet and Lowers Near-Term Cash Needs

BUENA PARK, Calif., March 26, 2025 (GLOBE NEWSWIRE) -- Yoshiharu Global Co. (NASDAQ: YOSH) ("Yoshiharu" or the "Company"), a restaurant operator specializing in authentic Japanese ramen & rolls, today announced that it entered into additional financing commitments with certain investors for $1.65 million and, as a result of such financing transactions, as of the date hereof, the Company believes that it has regained compliance with the stockholders’ equity requirement for continued listing on Nasdaq.

Yoshiharu entered into additional securities subscription agreements with certain investors for an aggregate of 660,000 warrants for a purchase price of $1,650,000.

In addition, the Company entered into agreements with certain creditors to convert $2.5 million of existing debt obligations, further increasing stockholders' equity, and improving the Company's overall financial position by reducing total debt, principal and interest payments, and lowering near-term cash needs.

As part of the debt conversion, a loan in the amount of $1,100,000 with BS1Fund has been cancelled in full in exchange for the issuance of 220,000 warrants for class A common stocks at an exercise price of $0.01 per warrant, and 220,000 warrants for class B common stocks at an exercise price of $0.01 per warrant.

A loan with Golden Bridge for an amount of $700,000 has been cancelled in full in exchange for the issuance of 280,000 warrants for class A common stocks at an exercise price of $0.01 per warrant.

A loan in the amount of $700,000 with President, CEO and Chairman of the Board James Chae has been cancelled in full in exchange for the issuance of 280,000 warrants for class A common stocks at an exercise price of $0.01 per warrant.

"We continue to make progress in strengthening our capital structure, which includes our recently announced $1.9 million in new capital commitments which positions the Company above the minimum stockholders' equity of $2.5 million for continued Nasdaq listing ahead of the Nasdaq appeal hearing scheduled for April 1, 2025," said President, CEO and Chairman of the Board James Chae. "The Company views this capital increase as a steppingstone for future growth opportunities and these agreements also importantly improve our balance sheet and reduces our cash usage, enabling the Company to execute its strategy and achieve its near-term growth initiatives."

About Yoshiharu Global Co.

Yoshiharu is a fast-growing restaurant operator and was born out of the idea of introducing the modernized Japanese dining experience to customers all over the world. Specializing in Japanese ramen, Yoshiharu gained recognition as a leading ramen restaurant in Southern California within six months of its 2016 debut and has continued to expand its top-notch restaurant service across Southern California and Las Vegas, currently owning and operating 15 restaurants.

For more information, please visit www.yoshiharuramen.com.

Forward Looking Statements

This press release includes certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including without limitation, statements regarding our position to execute on our growth strategy, and our ability to expand our leadership position. These forward-looking statements include, but are not limited to, the Company's beliefs, plans, goals, objectives, expectations, assumptions, estimates, intentions, future performance, other statements that are not historical facts and statements identified by words such as "expects", "anticipates", "intends", "plans", "believes", "seeks", "estimates" or words of similar meaning. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in, or suggested by, these forward-looking statements are reasonable, we can give no assurance that the plans, intentions, expectations or strategies will be attained or achieved. Forward-looking statements involve inherent risks and uncertainties which could cause actual results to differ materially from those in the forward-looking statements, as a result of various factors including those risks and uncertainties described in the Risk Factors and Management's Discussion and Analysis of Financial Condition and Results of Operations sections of our filings with the SEC including our Form 10-K for the year ended December 31, 2023, and subsequent reports we file with the SEC from time to time, which can be found on the SEC's website at www.sec.gov. Such risks, uncertainties, and other factors include, but are not limited to: that there can be no assurance that the Company will meet Nasdaq Listing Rule 5550(b)(1) during any compliance period or otherwise in the future, that there can be no assurance that the Company will otherwise meet Nasdaq compliance standards, and that there can be no assurance that Nasdaq will grant the Company any relief from delisting as necessary or whether the Company can agree to or ultimately meet applicable Nasdaq requirements for any such relief. We urge you to consider those risks and uncertainties in evaluating our forward-looking statements. We caution readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. The Company undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law.

Investor Relations Contact:
Larry W Holub
Director
MZ North America
YOSH@mzgroup.us
312-261-6412

FAQ

How much new financing did Yoshiharu (YOSH) secure in March 2025?

Yoshiharu secured $1.65 million in new financing commitments through the issuance of 660,000 warrants.

What is the total debt conversion amount in Yoshiharu's (YOSH) March 2025 restructuring?

Yoshiharu converted $2.5 million of existing debt obligations into equity through warrant issuances.

When is Yoshiharu's (YOSH) Nasdaq appeal hearing scheduled?

Yoshiharu's Nasdaq appeal hearing is scheduled for April 1, 2025.

What is the minimum stockholders' equity requirement for Yoshiharu (YOSH) to maintain Nasdaq listing?

Yoshiharu must maintain a minimum stockholders' equity of $2.5 million for continued Nasdaq listing.

How much of CEO James Chae's loan was converted in Yoshiharu's (YOSH) debt restructuring?

CEO James Chae's $700,000 loan was converted into 280,000 warrants for class A common stocks.