ONE Group Hospitality, Inc.: Form 10-Q for the period ended Mar 29, 2026

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; (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 operating philosophy separates us from more traditional restaurant and foodservice competitors.

Our primary restaurant brands are below:

• 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 a polished casual atmosphere; and
• RA Sushi, 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.

We opened our first restaurant in January 2004 in New York, New York. We currently own, operate, manage, license or franchise 157 venues, including 31 STKs, 85 Benihanas, 23 Kona Grills and 12 RA Sushis in major metropolitan cities in North America, Europe and the Middle East, and 6 food and beverage (“F&B”) venues in three hotels and casinos in 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. In January 2026, we opened a Company-owned Kona Grill restaurant in San Antonio, Texas, a relocation of an existing Kona Grill restaurant.

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 restaurant to a Company-owned Benihana Express restaurant and terminated an agreement for a franchised Benihana Express restaurant.

There are currently two Company-owned STK restaurants and one Company-owned Benihana restaurant under construction in the following cities:

• Owned STK restaurant in Phoenix, Arizona
• Owned STK restaurant in New York, New York (relocation of an existing STK restaurant)
• Owned Benihana restaurant in Seattle, Washington

The table below reflects our current venues by restaurant brand and geographic location:

(1) Locations with an STK and STK Rooftop are considered one venue location. This includes the STK Rooftop in San Diego, California, which is a licensed location.

(2) Includes five temporarily closed venues.

(3) Includes concepts under the Company’s F&B hospitality management agreements and other venue brands such as Salt Water Social, Heliot, Radio and Rivershore Bar & Grill.

(4) Restaurants located within a sports arena that are included with the Company’s owned restaurant net revenues, owned restaurant cost of sales and owned restaurant operating expenses that do not require a capital investment.

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 Sushi restaurant in January 2026. In addition, we temporarily closed three Kona Grill restaurants and two RA Sushi restaurants in January 2026 that will be converted into a Benihana or STK restaurant. We expect these conversions to be completed by the end of 2026.

Our Growth Strategies and Outlook

Our growth model is primarily driven by the following:

• Expansion of STK and Benihana restaurants by opening locations already leased and with emphasis in growing a pipeline of franchised and licensed locations
• Increase same store sales
• Increase operating efficiency
• Opportunistic acquisitions

Executive Summary

Total revenue increased $1.7 million, or 0.8% to $212.8 million for the three periods ended March 29, 2026, compared to $211.1 million for the three periods ended March 30, 2025.

Same store sales for 2026 compared to 2025 and 2025 compared to 2024 were as follows:

Operating income increased $3.2 million to $13.9 million for the three periods ended March 29, 2026 compared to $10.7 million for the three periods ended March 30, 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 Sushi restaurants.

Restaurant Operating Profit, excluding Grill Concepts restaurants closed, increased $4.0 million, or 11.1%, to $39.9 million for the three periods ended March 29, 2026 compared to $35.9 million for the three periods ended March 30, 2025. Restaurant Operating Profit as a percentage of owned restaurant net revenue, excluding Grill Concepts locations closed, was 19.1% in the first quarter of 2026 compared to 18.1% in the first quarter of 2025. See “Results of Operations” below for a reconciliation of Operating income, the most directly comparable GAAP measure to Restaurant Operating Profit.

Net income attributable to The ONE Group Hospitality, Inc. was $3.2 million for the three periods ended March 29, 2026, compared to $1.0 million for the three periods ended March 30, 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 Sushi restaurants.

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.

(1) These expenses are shown as a percentage of owned restaurant net revenue.

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, loss on early debt extinguishment and the Adjusted EBITDA attributable to Grill Concepts restaurants closed. 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 income to EBITDA and Adjusted EBITDA for the periods indicated (in thousands):

(1) Lease termination and restaurant closure expenses are costs associated with closed locations which includes $0.5 million in non-cash expenses.

(2) Non-cash rent expense is included in owned restaurant operating expenses, pre-opening expenses and general and administrative expense on the condensed consolidated statements of operations.

(3) Grill Concepts restaurants closed are comprised of Adjusted EBITDA from Grill Concepts restaurants closed prior to March 29, 2026.

The following table presents a reconciliation of Owned restaurant net revenue, excluding net revenue of Grill Concepts restaurants closed prior to March 29, 2026 for the periods indicated (in thousands):

The following table presents a reconciliation of Owned restaurant net revenue for the periods ended March 30, 2025 to the three periods ended March 29, 2026 (in thousands):

(1) Grill Concepts restaurants closed are comprised of Owned restaurant net revenue from Grill Concepts closed prior to March 29, 2026.

(2) The elimination of auto-gratuities has no impact on net income attributable to The ONE Group Hospitality, Inc. or Adjusted EBITDA attributable to The ONE Group Hospitality, Inc. as the associated expense in Owned restaurant operating expenses was also eliminated.

(3) On January 1, 2025, the Company transitioned from a calendar-based fiscal year to a 52/53-week fiscal year. The Company’s first quarter of 2026 was the 91-day period of December 29, 2025 through March 29, 2026 compared to the first quarter of 2025 which was the 89-day period of January 1, 2025 through March 30, 2025. The first quarter of 2026 included New Years Eve while the first quarter of 2025 did not include New Years Eve.

(4) Other changes in sales is comprised of sales generated by new restaurant openings and the change in same store sales.

The following table presents a reconciliation of Operating income to Restaurant Operating Profit for the periods indicated (in thousands):

(1) Grill Concepts restaurants closed are comprised of Adjusted EBITDA from Grill Concepts closed prior to March 29, 2026.

(2) Grill Concepts restaurants closed are comprised of Owned restaurant net revenue from Grill Concepts closed prior to March 29, 2026.

Restaurant Operating Profit by brand is as follows (in thousands):

(1) Grill Concepts restaurants closed are comprised of restaurant operating profit from Grill Concepts closed prior to March 29, 2026.

(2) Grill Concepts restaurants closed are comprised of Owned restaurant net revenue from Grill Concepts closed prior to March 29, 2026.

Restaurant EBITDA by brand is as follows (in thousands):

(1) Grill Concepts restaurants closed are comprised of restaurant EBITDA from Grill Concepts closed prior to March 29, 2026.

(2) Grill Concepts restaurants closed are comprised of Owned restaurant net revenue from Grill Concepts closed prior to March 29, 2026.

Results of Operations for the Three Periods Ended March 29, 2026 Compared to the Three Periods Ended March 30, 2025

Revenues

Owned restaurant net revenue. Owned restaurant net revenue increased $1.9 million, or 0.9%, to $209.3 million for the three periods ended March 29, 2026, from $207.4 million for the three periods ended March 30, 2025. The increase was primarily attributable to the change in our fiscal calendar and sales generated by seven new restaurants, partially offset by decrease in revenues from Grill Concepts restaurants closed, a decrease in same store sales and the elimination of auto-gratuities. Comparable restaurant sales decreased 0.3% in the three periods ended March 29, 2026 compared to the three periods ended March 30, 2025.

Management, license, franchise and incentive fee revenue. Management, license, franchise, and incentive fee revenues decreased $0.2 million, or 5.4% to $3.5 million for the three periods ended March 29, 2026, from $3.7 million for the three periods ended March 30, 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 $2.6 million, or 6.0%, to $40.5 million for the three periods ended March 29, 2026, from $43.1 million for the three periods ended March 30, 2025. As a percentage of owned restaurant net revenue, cost of sales decreased 140 basis points from 20.8% in the three periods ended March 30, 2025 to 19.4% for the three periods ended March 29, 2026 primarily due to menu optimization, integration synergies, supply chain initiatives, increased menu pricing and more efficient cost of sales associated with New Years Eve and Valentine’s Day.

Owned restaurant operating expenses. Owned restaurant operating expenses increased $0.2 million to $129.0 million for the three periods ended March 29, 2026, from $128.8 million for the three periods ended March 30, 2025. Owned restaurant operating costs as a percentage of owned restaurant net revenue decreased 40 basis points from 62.1% in the three periods ended March 30, 2025 to 61.7% for the three periods ended March 29, 2026 primarily due to improvements in labor costs and the elimination of auto-gratuities.

General and administrative. General and administrative costs increased $1.9 million, or 14.5%, to $15.0 million for the three periods ended March 29, 2026, compared to $13.1 million for the three periods ended March 30, 2025. The increase was attributable to inflation on salaries and bonus, higher audit-related fees, investments in information technology, specifically AI-related technologies, and increased marketing expenses. As a percentage of revenues, general and administrative costs increased by 90 basis points to 7.1% for the three periods ended March 29, 2026 compared to 6.2% for the three periods ended March 30, 2025.

Depreciation and amortization. Depreciation and amortization expense increased $0.6 million to $10.4 million for the three periods ended March 29, 2026, compared to $9.8 million for the three periods ended March 30, 2025. The increase is attributed to new restaurants opened during fiscal year 2025.

Lease termination and restaurant closure expenses. Lease termination and restaurant closure expenses were $2.0 million for the three periods ended March 29, 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 $0.1 million for the three periods ended March 30, 2025.

Pre-opening expenses. In the three periods ended March 29, 2026, we incurred $1.5 million of pre-opening expenses primarily comprised of payroll, training and other costs for Kona Grill Landmark which opened in January 2026, preopen rent for restaurants that the Company has possession of, which included $0.5 million in non-cash rent, and pre-opening expenses for restaurants currently under development. Pre-opening expenses for the three periods ended March 30, 2025 were $1.7 million. Details of pre-opening expenses by category are provided in the table below for the three periods ended March 29, 2026 and March 30, 2025 (in thousands).

(1) Cash rent paid was $0.5 million for the three periods ended March 29, 2026. Cash rent paid was $0.4 million for the three periods ended March 30, 2025.

Transition and integration costs. In the three periods ended March 29, 2026, we incurred $0.5 million in transition and integration costs associated with the acquisition of the Benihana and RA Sushi 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 Sushi restaurants. In the three periods ended March 30, 2025, we incurred $3.7 million of transition and integration costs associated with the acquisition of the Benihana and RA Sushi 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 $9.7 million for the three periods ended March 29, 2026 compared to $9.8 million for the three periods ended March 30, 2025. The weighted average interest rate for the three periods ended March 29, 2026 was 10.2% compared to 10.9% for the three periods ended March 30, 2025.

Provision for income taxes. The provision for income taxes for the three periods ended March 30, 2025 was $1.2 million, compared to $0.3 million for the three periods ended March 30, 2025. The effective income tax rate for the first quarter of 2026 was 28.0% compared to 31.4% for the first quarter of 2025.

Liquidity and Capital Resources

Executive Summary

Our principal liquidity requirements are to meet our lease obligations, working capital and capital expenditure needs and to pay principal and interest on our 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 and fund additional expansion. We believe these sources of financing are adequate to support our immediate business operations and plans. As of March 29, 2026, we had cash and cash equivalents of $6.1 million. Our credit card receivables as of March 29, 2026 were $11.8 million, which are typically collected within four days. We had $345.0 million in long-term debt, which primarily consisted of borrowings under our Credit Agreement as of March 29, 2026. As of March 29, 2026, the availability on our Revolving Facility was $33.7 million, subject to certain conditions.

For the three periods ended March 29, 2026, capital expenditures were $9.9 million, of which $6.5 million related to the construction of new STK, Benihana and Kona Grill restaurants, $1.2 million related to remodels or major projects at existing restaurants and $2.2 million related to existing restaurants. We expect to receive between $1.6 million and $3.0 million in landlord contributions in the next three months.

Capital expenditures by type for the three periods ended March 29, 2026 and the three periods ended March 30, 2025 are shown below (in thousands).

(1) Includes inventory of restaurant equipment for venues under development.

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, with five that are expected to be converted by the end of 2026. These conversions are expected to require about $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 expenses 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 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 three periods ended March 29, 2026 and the three periods ended March 30, 2025 (in thousands):

Operating Activities. Net cash provided by operating activities was $21.7 million for the three periods ended March 29, 2026, compared to $8.5 million for the three periods ended March 30, 2025. The increase was primarily attributable increased net income, and collections on credit card receivables, partially offset by the timing of payments on accounts payable and accrued expenses.

Investing Activities. Net cash used in investing activities for the three periods ended March 29, 2026 was $10.1 million, of which $6.5 million primarily related to the construction of new STK, Benihana and Kona Grill restaurants, $1.2 million related to remodels or major projects at existing restaurants and $2.2 million related to existing restaurants. Purchases of property and equipment during the three periods ended March 29, 2026 included approximately $3.9 million that was accrued as of December 28, 2025 and paid during the first quarter of 2026.

Net cash used in investing activities for the three periods ended March 30, 2025 was $14.3 million, of which $9.7 million related to the construction of new STK, Benihana and Kona Grill restaurants and $4.4 million related to existing restaurants.

Financing Activities. Net cash used in financing activities for the three periods ended March 29, 2026 was $9.6 million, primarily comprised of $2.2 million of repayments under the Credit Agreement and $7.0 million in repayments on the Revolving Facility compared to net cash used in financing activities of $0.3 million for the three periods ended March 30, 2025.

Recent Accounting Pronouncements

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.

As a “smaller reporting company,” as defined in Item 10 of Regulation S-K, we are not required to provide this information.

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 March 29, 2026 and, based on this evaluation, have concluded that our disclosure controls and procedures were effective as of March 29, 2026.

Changes in Internal Controls

There have been no changes in our internal control over financial reporting that occurred during the quarter ended March29, 2026 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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, 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.