NASDAQ: GENK

redemption amount of $1,500 as of December 31, 2025 and December 31, 2024.

1,500

1,500

Permanent equity

Class A common stock, $0.001 par value, 70,000,000 shares authorized, 5,265,565 shares issued

and outstanding and 4,913,064 shares issued and outstanding as of December 31, 2025 and December 31, 2024, respectively

5

5

Class B common stock, $0.001 par value, 50,000,000 shares authorized; 27,681,719 shares issued and outstanding and 27,886,912 shares issued and outstanding as of December 31, 2025 and December 31, 2024, respectively

28

28

Additional paid-in capital

14,796

11,782

Accumulated other comprehensive income

7

—

Retained Earnings (accumulated deficit)

(2,111

)

915

Non-controlling interest

13,982

31,387

Treasury stock

(201

)

—

Total permanent equity

26,506

44,117

Total liabilities, mezzanine equity, and permanent equity

$

259,856

$

240,415

See accompanying notes to consolidated financial statements.

F-4

GEN RESTAURANT GROUP, INC.

Consolidated Statement of Operations

For the year ended December 31,

(in thousands, except per share amounts)

2025

2024

Revenue

$

212,541

$

208,380

Restaurant operating expenses:

Food cost

73,790

68,730

Payroll and benefits

64,943

64,322

Occupancy expenses

21,197

17,524

Operating expenses

24,176

21,538

Depreciation and amortization

8,962

6,735

Pre-opening costs

8,317

7,607

Total restaurant operating expenses

201,385

186,456

General and administrative

25,935

21,326

Impairment expense

5,527

—

Depreciation and amortization - corporate

158

122

Gain on lease terminations

(471

)

—

Total costs and expenses

232,534

207,904

(Loss) income from operations

(19,993

)

476

Employee retention credits

313

199

Gain on remeasurement of previously held interest (see Note 3)

—

3,402

Other loss

(346

)

—

Loss on foreign currency

(47

)

—

Interest (expense) income, net

(232

)

829

Equity in loss of equity method investee

—

(17

)

Net (loss) income before income taxes

(20,305

)

4,889

(Benefit) provision for income taxes

(930

)

357

Net (loss) income

(19,375

)

4,532

Less: Net (loss) income attributable to non-controlling interest

(16,349

)

3,940

Net (loss) income attributable to GEN Restaurant Group, Inc.

(3,026

)

592

Net (loss) income attributable to Class A common stock per share - basic and diluted

$

(3,026

)

$

592

Weighted-average shares of Class A common stock outstanding - basic and diluted

5,164

4,668

Net (loss) income per share of Class A common stock - basic and diluted

$

(0.59

)

$

0.13

Other comprehensive income, net of tax:

Foreign currency translation adjustment

$

7

$

—

Comprehensive (loss) income

(19,368

)

4,532

Less: Comprehensive (loss) income attributable to non-controlling interest

(16,349

)

3,940

Comprehensive (loss) income attributable to GEN Restaurant Group, Inc.

$

(3,019

)

$

592

See accompanying notes to consolidated financial statements.

F-5

GEN RESTAURANT GROUP, INC.

Consolidated Statements of Changes in Permanent Equity (Deficit)

Year ended December 31, 2025 and December 31, 2024

Class A

Common Stock

Class B

Common Stock

Additional

paid-in

Retained

Non-

Controlling

Stockholders'

Equity/

Members'

equity

(in thousands except for share amounts )

Shares

Amount

Shares

Amount

capital

Earnings

Interest

(deficit)

Balance, December 31, 2023

4,140,000

$

4

28,141,566

$

28

$

7,112

$

322

$

28,552

$

36,018

Net income

593

3,939

4,532

Stock-based compensation

2,986

2,986

Adjustment to tax liabilities and assets under Tax Receivable

Agreement ("TRA") (1)

(1,288

)

(1,288

)

Shares issued upon RSU vesting

280,817

-

Exchange of noncontrolling interest for Class A common stock

254,654

1

(254,654

)

259

(259

)

1

Conversion of related party loans and advances from members to Class A common stock

237,593

1,436

1,436

Distributions to members

(845

)

(845

)

Contribution by shareholders in final IPO settlement

1,277

1,277

Balance, December 31, 2024

4,913,064

$

5

27,886,912

$

28

$

11,782

$

915

$

31,387

$

44,117

See accompanying notes to consolidated financial statements.

F-6

GEN RESTAURANT GROUP, INC.

Consolidated Statements of Changes in Permanent Equity (Deficit)

Years ended December 31, 2025 and December 31, 2024

Class A

Common Stock

Class B

Common Stock

Class A

Treasury Shares

Additional

paid-in

Accumulated

Other

Comprehensive

Gain (Loss)

Retained

Non-

Controlling

Stockholders'

Equity/

Members'

equity

(in thousands except for share amounts )

Shares

Amount

Shares

Amount

Shares

Amount

capital

Earnings

Interest

Balance, December 31, 2024

4,913,064

$

5

27,886,912

$

28

-

$

-

$

11,782

$

—

$

915

$

31,387

$

44,117

Net loss

-

(3,026

)

(16,349

)

(19,375

)

Stock-based compensation

52,127

$

-

2,936

2,936

Adjustment to tax liabilities and assets under TRA

9

9

Shares issued upon RSU vesting

95,181

-

-

Exchange of non-controlling interest for Class A common stock

205,193

(205,193

)

226

—

(226

)

-

Dividends paid $0.03 per share of Class A common stock

(157

)

(157

)

Distributions paid to Non-controlling interest - $0.03 per share

-

(830

)

(830

)

Foreign currency translation adjustment

-

7

7

Purchase of Class A common stock under stock repurchase plan

33,338

(201

)

-

(201

)

Balance, December 31, 2025

5,265,565

$

5

27,681,719

$

28

33,338

$

(201

)

$

14,796

$

7

$

(2,111

)

$

13,982

$

26,506

See accompanying notes to consolidated financial statements.

F-7

GEN RESTAURANT GROUP, INC.

Consolidated Statements of Cash Flows

Year Ended December 31,

(in thousands)

2025

2024

Cash flows from operating activities

Net (loss) income

$

(19,375

)

$

4,532

Adjustments to reconcile net (loss) income to cash provided by operating activities

Depreciation and amortization

9,120

6,857

Equity in income of equity method investee, net of distributions

—

17

Gain on remeasurement of previously held interest

—

(3,402

)

Stock-based compensation

2,936

2,986

Amortization of operating lease assets

6,395

6,814

Gain on lease terminations

(471

)

—

Impairment expense

5,527

—

Interest income earned on Notes receivable from related party

—

(33

)

Deferred tax expense

(914

)

333

Changes in operating assets and liabilities:

Accounts receivable

(6,936

)

(3,487

)

Inventories

(485

)

(266

)

Income tax receivable

(742

)

—

Prepaid expenses and other current assets

(1,542

)

(2,613

)

Other assets

(1,226

)

(432

)

Accounts payable

2,266

730

Accrued salaries and benefits

(703

)

583

Accrued interest

18

18

Gift card liabilities

8,686

5,983

Other current liabilities

2,125

221

Operating lease liabilities

(1,265

)

(1,014

)

Net cash provided by operating activities

3,414

17,827

Cash flows from investing activities

Purchase of property and equipment

(27,734

)

(23,825

)

Acquisition of GKBH, net of cash acquired

—

(2,976

)

Net cash used in investing activities

(27,734

)

(26,801

)

Cash flows from financing activities

Payments to members for advances

—

(881

)

Payments on EIDL loans

(98

)

(90

)

Payments on finance leases

(3

)

(100

)

Payments on third party loans

(3,159

)

(3,770

)

Payments on related party loans

—

(296

)

Payment on line of credit

(11,000

)

—

Proceeds from line of credit

9,000

3,000

Proceeds from third party loans

10,000

3,000

Payments under stock repurchase plan

(201

)

—

Distributions paid on NCI

(830

)

(845

)

Dividends paid on common stock

(157

)

—

Acquisition of common stock for tax with withholding obligations

(90

)

—

Net provided by financing activities

3,462

18

Effects of exchange rate changes on cash

7

—

Net change in cash and cash equivalents

(20,851

)

(8,956

)

Cash and cash equivalents at beginning of period

23,675

32,631

Cash and cash equivalents at end of the period

$

2,824

$

23,675

Supplemental disclosures of other cash flow information:

Cash paid for interest

$

250

$

288

Cash paid for taxes

455

114

Non-cash investing and financing activities:

Reduction in accounts payable and accruals for purchases of property and equipment

(143

)

1,904

Leased assets obtained in exchange for new operating lease liabilities

21,609

39,229

Reduction due to early lease termination of operating lease asset

(1,007

)

—

Conversion of related party loans to equity

—

1,436

Issuance of promissory note for business acquisition

—

3,000

Adjustments to tax liabilities and assets under TRA

9

—

Exchange of NCI for Class A common stock

226

—

Contribution by stockholder in final IPO settlement

—

1,277

See accompanying notes to consolidated financial statements.

F-8

GEN RESTAURANT GROUP, INC.

Notes to Consolidated Financial Statements

December 31, 2025 and 2024

(1) Organization and Description of Business

The accompanying consolidated financial statements represent the consolidated balance sheets, statements of operations, changes in permanent equity (deficit), and cash flows of GEN Restaurant Group, Inc., and its consolidated subsidiaries (the “Company”), including GEN Restaurant Companies, LLC (the “Operating Company”).

The following tables lists the Company’s entities in operation as of December 31, 2025:

Name

Operating Name

State

Purpose

GEN Restaurant Group, LLC

GEN Tustin

CA

Restaurant

GEN Huntington Beach

CA

Restaurant

GEN Oxnard

CA

Restaurant

JC Group International Inc. (S Corp)

GEN West Covina

CA

Restaurant

GEN Corona

CA

Restaurant

GEN Restaurant Investment, LLC

GEN Glendale

CA

Restaurant

GEN California, LLC

GEN Fullerton

CA

Restaurant

GEN Mira Mesa

CA

Restaurant

GEN Arizona, LLC

GEN Tempe

AZ

Restaurant

GEN Chandler, LLC

GEN Chandler

AZ

Restaurant

GEN Nevada, LLC

GEN Sahara

NV

Restaurant

GEN Miracle Mile

NV

Restaurant

GEN Alhambra, LLC

GEN Alhambra

CA

Restaurant

GEN Arlington, LP

GEN Arlington

TX

Restaurant

GEN Cerritos, LLC

GEN Cerritos

CA

Restaurant

GEN Cerritos II, LP

Gen Cerritos II

CA

Restaurant

GEN Torrance, LLC

GEN Torrance

CA

Restaurant

GEN Rancho Cucamonga, LP

GEN Rancho Cucamonga

CA

Restaurant

GEN San Jose, LP

GEN San Jose

CA

Restaurant

GEN Northridge, LP

GEN Northridge

CA

Restaurant

GEN Chino Hills, LP

GEN Chino Hills

CA

Restaurant

GEN Carrollton, LP

GEN Carrollton

TX

Restaurant

GEN Fort Lauderdale, LP

GEN Fort Lauderdale

FL

Restaurant

GEN Fremont, LP

GEN Fremont

CA

Restaurant

GEN Concord, LP

GEN Concord

CA

Restaurant

GEN Webster, LP

GEN Webster

TX

Restaurant

GEN Westgate, LP

GEN Westgate

CA

Restaurant

GEN Westheimer, LLC

GEN Westheimer

TX

Restaurant

GEN Manhattan NYU, LP

GEN Manhattan

NY

Restaurant

GEN Maui, LP

GEN Maui

HI

Restaurant

GEN Mountain View, LP

GEN Mountain View

CA

Restaurant

GKBH Restaurant, LLC

GEN Korean BBQ

HI

Restaurant

GEN Sacramento, LP

GEN Sacramento

CA

Restaurant

GEN Pearlridge, LLC

GEN Pearlridge

HI

Restaurant

GEN Kapolei, LP

GEN Kapolei

HI

Restaurant

GEN El Paso, LP

GEN El Paso

TX

Restaurant

GEN Frisco, LP

GEN Frisco

TX

Restaurant

GEN Houston, LLC

GEN Houston

TX

Restaurant

GEN Seattle, LP

GEN Seattle

WA

Restaurant

GEN Jacksonville, LP

GEN Jacksonville

FL

Restaurant

GEN Dallas, LP

GEN Dallas

TX

Restaurant

GEN Waco, LP

GEN Waco

TX

Restaurant

GEN Pflugerville, LP

GEN Pflugerville

TX

Restaurant

GEN Tigard, LP

GEN Tigard

OR

Restaurant

GEN Orlando, LP

GEN Orlando

FL

Restaurant

GEN Edison, LP

GEN Edison

NJ

Restaurant

GEN San Antonio, LP

GEN San Antonio

TX

Restaurant

GEN Austin, LP

GEN Austin

TX

Restaurant

Kan Sushi Austin, LP

Kan Sushi

TX

Restaurant

GEN Cary , LP

GEN Cary

NC

Restaurant

GEN San Diego, LP

GEN La Jolla

CA

Restaurant

GEN K Sadang, LLC

GEN Sadang

Korea

Restaurant

GEN K Ilsan, LLC

GEN Ilsan

Korea

Restaurant

GEN K Incheon Guwol, LLC

GEN Guwol

Korea

Restaurant

Gen Kan Guwol

Kan Guwol

Korea

Restaurant

GEN K Wiyre, LLC

GEN Wirye

Korea

Restaurant

GEN Kan Wiyre

GEN Wirye

Korea

Restaurant

F-9

GEN RESTAURANT GROUP, INC.

Notes to Consolidated Financial Statements

December 31, 2025 and 2024

The Company also has the following entities:

Name

Operating Name

State

Purpose

GEN Hawaii, LLC

Investment Company

HI

Management of GKBH

GEN Grills, LP

GEN Grills

CA

Special Events

GEN Texas, LLC

Investment Company

TX

Management of GEN Houston and GEN Webster

GEN Master, LLC

Holding Company

NV

Management

GEN K, LLC

GEN K

Korea

Management of South Korean Restaurant

GEN Restaurant Management, LLC

GRM

DE

Management

GEN Online, LLC

GEN Online

CA

Website sales

GEN Arizona Gift Cards

AZGC

AZ

Gift card Management Company

GEN Restaurant Companies, LLC

Operating Company

DE

Operating Company of Public Entity

All of the operations are owned by Gen Restaurant Companies, LLC. The Company operates restaurants which are located in California, Arizona, Hawaii, Nevada, New York, Washington, Texas, Florida, North Carolina and New Jersey specializing in a variety of special flavored meats for Korean barbeque.

As of December 31, 2025, the above entities are collectively owned 100% by the controlling group. The Company had an equity method investment through GEN Hawaii, with a 50% ownership share of GKBH Restaurant, LLC (“GKBH”). On February 18, 2024, the Company purchased the other 50% of GKBH for a purchase price of $6.0 million and the Company now controls 100% of GKBH. As of December 31, 2025 and December 31, 2024, there were 57 and 43 restaurants in operation, respectively.

Organization

GEN Restaurant Group, Inc. (“GEN Inc.”) was formed as a Delaware corporation on October 28, 2021 and is based in Cerritos, California. As the managing member of the Operating Company, GEN Inc. operates and controls all of the business and affairs of the Operating Company, and through the Operating Company and its consolidated subsidiaries, conducts its business. Unless the context otherwise requires, references to the “Company” refer to GEN Inc., and its consolidated subsidiaries, including the Operating Company.

On June 30, 2023, the Company completed an initial public offering (the “IPO”) of 4,140,000 shares of Class A common stock at $12.00 per share that generated an aggregate net proceeds of $46.2 million.

(2)
Basis of Presentation and Summary of Significant Accounting Policies

(a)
Basis of Presentation

The accompanying consolidated financial statements of the Company, collectively, have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”).

(b)
Recently Issued Accounting Pronouncements

In December 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-11, Narrow-Scope Improvements (Topic 270): Interim Reporting. This update makes targeted, narrow-scope improvements to underlying principles of interim reporting. The amendments in this ASU are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. The Company is in the process of evaluating the impact that the adoption of this ASU will have on the consolidated financial statements and related disclosures.

In November 2024, FASB issued ASU 2024-03, “Disaggregation of Income Statement Expenses” and in January 2025, the FASB issued ASU 2025-01, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures”, which requires public companies additional disclosure of the nature of expenses included in the income statement as well as disclosures about specific type of expense included in the expense captions presented in the income statement. ASU 2024-03, as clarified by ASU 2025-01, is effective for fiscal years

F-10

GEN RESTAURANT GROUP, INC.

Notes to Consolidated Financial Statements

December 31, 2025 and 2024

beginning after December 15, 2026. The Company is in the process of evaluating the impact that the adoption of this ASU will have on the consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740),” “Improvement for Income Tax Disclosure,” which is effective for fiscal years beginning after December 15, 2024. The Company adopted the ASU 2023-09 using the prospective approach for 2025.

(c)
Use of Estimates

The preparation of financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities in the accompanying consolidated financial statements of the Company. The accompanying consolidated financial statements have been prepared in conformity with GAAP and applicable rules, and regulations of the SEC.

(d)
Equity-Based Compensation

The Company accounts for equity-based compensation grants of equity awards to employees in accordance with ASC Topic 718, “Stock Based Compensation”.

The Company estimates the fair value of the restricted stock units on the grant-date and recognizes the resulting fair value over the requisite service period. The fair value of each restricted stock unit or award is determined based upon the value of the common stock granted or sold. The Company has elected to treat stock-based awards with graded vesting schedules and time-based service conditions as a single award and recognizes stock-based compensation on a straight-line basis over the requisite service period. Forfeitures are accounted for as they occur.

(e)
Cash and Cash Equivalents

The Company and its related entities consider all highly liquid instruments with a maturity of three months or less when purchased to be cash equivalents. As of December 31, 2025 and 2024, cash and cash equivalents consist principally of cash, money market accounts and short-term investments. Short-term investments are carried at fair value, with changes in fair value reported in earnings. Cash equivalents also include credit card transactions in transit. As of December 31, 2025 and December 31, 2024, there were deposits in excess of federally insured amounts of $0.8 million and $2.9 million, respectively.

Fair Value Measurements at December 31, 2025

Carrying

Value/Amortized

Cost

Gross

Unrealized

Gains

Gross

Unrealized

Losses

Total

(in thousands)

Money Market Accounts (included in cash and cash equivalents)

$

1,058

$

—

$

—

$

1,058

U.S. Treasury Securities (included in cash and cash equivalents)

$

—

$

55

$

—

$

55

$

1,058

$

55

$

—

$

1,113

Fair Value Measurements at December 31, 2024

Carrying

Value/Amortized

Cost

Gross

Unrealized

Gains

Gross

Unrealized

Losses

Total

Money Market Accounts (included in cash and cash equivalents)

$

6,459

$

—

$

—

$

6,459

U.S. Treasury Securities (included in cash and cash equivalents)

$

13,000

$

1,317

$

—

$

14,317

$

19,459

$

1,317

$

—

$

20,776

F-11

GEN RESTAURANT GROUP, INC.

Notes to Consolidated Financial Statements

December 31, 2025 and 2024

(f)
Concentration Risk

The Company relies on third parties for specified food products and supplies. In instances where these parties fail to perform their obligation, the Company may be unable to find alternative suppliers.

The Company relies on Sysco Los Angeles, Inc., or Sysco, an unrelated third-party, for a significant portion of its food products. During the fourth quarter of 2023, the Company entered into an agreement with Sysco to purchase certain food supplies. For the year ended December 31, 2025, Sysco accounted for approximately 57.4% of total food costs. For the year ended December 31, 2024, Sysco accounted for approximately 76.3% of total food costs.

The Company relied on Pacific Global Distribution, Inc. (“PGD”), which provided restaurant supplies such as tableware, napkins, soda, and sauces. PGD is owned by a related party. The Company did not purchase from PGD during the year 2025. For the year ended December 31, 2024, PGD accounted for approximately 3.2% of total operating expenses.

During the years ended December 31, 2025 and 2024 two third party vendors accounted for 32.5% and 24.2% of total food costs, respectively.

The Company had accounts receivable from one customer that represented 92.0% of total accounts receivable at December 31, 2025, and accounts receivable from one customer that represents 100.0% of total receivable at December 31, 2025.

(g)
Inventories

Inventories consist principally of food and beverages that are finished goods and are valued at the lower of cost or net realizable value. Cost is determined using the first-in, first-out method (FIFO) for all inventories.

(h)
Revenue Recognition

The Company recognizes revenue in accordance with ASC 606, “Revenue from Contracts with Customers.” Revenue from the operation of the restaurants is recognized as food and beverage products are delivered to customers and payment is tendered at the time of sale. Revenues generated from both the retail and wholesale side are recognized upon invoicing, which coincides with delivery confirmation.

Sales tax amounts collected from customers are remitted to governmental authorities and are excluded from sales.

The Company started selling gift cards primarily during the fourth quarter of 2024. The Company sells gift cards which do not have expiration dates. Gift cards balances are initially recorded as unearned income. Revenue from gift cards is recognized when gift cards are redeemed by the guest or, in the event a gift card is not expected to be redeemed, in proportion to actual redemptions of gift cards (“gift card breakage”). Gift card breakage income is included in revenue on the consolidated statements of operations.

(i)
Property and Equipment

Property and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives of the assets. Property and equipment under finance leases are stated at the present value of minimum lease payments.

The estimated useful service lives are as follows:

Equipment

5 - 7 Years

Furniture and fixtures

5 - 7 Years

Leasehold improvements

Shorter of useful life or remaining lease term

The Company and its related entities capitalize certain costs in conjunction with improvements to specific sites for planned future restaurants. The Company and its related entities also capitalize certain costs, including

F-12

GEN RESTAURANT GROUP, INC.

Notes to Consolidated Financial Statements

December 31, 2025 and 2024

interest, in conjunction with constructing new restaurants. These costs are included in property and equipment and are amortized over the shorter of the life of the related leasehold improvements or the remaining lease term. Costs related to abandoned sites and other site selection costs that cannot be identified with specific restaurants are charged to general and administrative expenses in the accompanying consolidated statements of operations. The Company and its related entities did not capitalize any internal costs related to site preparation and construction activities during the years ended December 31, 2025 and 2024 as any amounts were deemed immaterial.

(j)
Prepaid expenses and Other Current Assets

Prepaid expenses and other current assets as of December 31, 2025 and December 31, 2024 consist of the following:

(in thousands)

December 31,

2025

December 31,

2024

Prepaid Expenses and Other Current Assets

Insurance and property taxes

$

1,379

$

1,377

Development and pre-opening

2,590

1,695

Marketing

1,467

626

Equipment

332

158

Subscription services

177

145

Conference/Supplies

7

458

Other

1,594

1,545

Total Prepaid and Other Current Assets

$

7,546

$

6,004

(k)
Other Assets and Other Current Liabilities

Other assets as of December 31, 2025 and December 31, 2024 consist of the following:

(in thousands)

December 31,

2025

December 31,

2024

Other Assets

Security Deposits

$

1,997

$

933

Liquor Licenses

386

224

Total Other Assets

$

2,383

$

1,157

Other Current Liabilities as of December 31, 2025 and December 31, 2024 consist of the following:

(in thousands)

December 31,

2025

December 31,

2024

Other Current Liabilities

Sales tax payable

$

1,554

$

1,645

Accrued percentage rent

1,195

1,221

Misc. accrued expenses

4,974

2,732

Total Other Current Liabilities

$

7,723

$

5,598

(l)
Pre-Opening Costs

Pre-opening costs, incurred in connection with the opening of new restaurants, are expensed as incurred. Pre-opening costs were $8.3 million and $7.6 million for the years ended December 31, 2025 and December 31, 2024, respectively.

(m)
Income Taxes

Prior to the IPO, the Operating Company and its related entities were organized as limited liability companies or limited partnerships and are treated as pass-through entities for federal and state income tax purposes. As the

F-13

GEN RESTAURANT GROUP, INC.

Notes to Consolidated Financial Statements

December 31, 2025 and 2024

Operating Company and its related entities (other than Gen, Inc.) have elected to be treated as partnerships for income tax purposes and are not subject to federal or state income taxes, income or loss is included in the tax returns of the members or the partners of the Operating Company and its related entities based on their respective shares.

Deferred tax assets are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets of a change in tax rates is recognized in income in the period that includes the enactment date.

The Company recognizes positions taken or expected to be taken in a tax return in accordance with existing accounting guidance on income taxes which prescribes a recognition threshold and measurement process. Under GAAP, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Interest and penalties on tax liabilities, if any, would be recorded in interest expense and other non-interest expense, respectively.

In assessing the realizability of deferred tax assets, management considered whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment.

(n)
Long-Lived Assets

Long-lived assets, such as property and equipment owned, are reviewed quarterly for impairment and whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long- lived asset or asset group to be tested for possible impairment, undiscounted cash flows expected to be generated by that asset or asset group are compared to its carrying amount. If the carrying amount of the long-lived asset or asset group is not expected to be recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying amount exceeds its fair value. Fair value is determined through various valuation techniques, including discounted cash flow models, quoted market values, and third-party independent appraisals, as considered necessary. We assessed our long-lived assets for potential impairment with the result that no impairment charges were recorded in any of the periods presented.

(o)
Interest (Expense) Income

A reconciliation of total interest cost to interest expense as reported in the consolidated statements of operations for the years ended December 31, 2025 and December 31, 2024 is as follows:

Year Ended December 31,

(in thousands)

2025

2024

Interest expense

$

(800

)

$

(399

)

Interest income

568

1,228

Interest (expense) income, net

$

(232

)

$

829

(p)
Liquor Licenses

Liquor licenses are deemed to have indefinite useful lives and are quantitatively tested on an annual basis for impairment. Liquor licenses are included in other assets in the accompanying balance sheets.

(q)
Sales Taxes

Sales taxes are imposed by state, county, and city governmental authorities, collected from customers and remitted to the appropriate governmental agency. The Company’s policy is to record the sales taxes collected as a liability on the books and then remove the liability when the sales tax is remitted. There is no impact on the

F-14

GEN RESTAURANT GROUP, INC.

Notes to Consolidated Financial Statements

December 31, 2025 and 2024

consolidated statements of operations as restaurant sales are recorded net of sales tax.

(r)
Advertising Costs

Advertising costs are expensed as incurred and are included in general and administrative expenses in the accompanying consolidated statements of operations. The Company incurred approximately $2.7 million and $661 thousand in advertising expenses for the years ended December 31, 2025 and December 31, 2024, respectively.

(s)
Risks and Uncertainties.

The Company has experienced, and in the future may experience, inflation related to its purchase of certain food products that the Company needs to operate its business. This price volatility could potentially have a material impact on the Company’s financial condition and/or its results of operations. In order to mitigate price volatility, the Company monitors cost fluctuations and may adjust its menu prices accordingly. The Company’s ability to compensate for higher costs through increased pricing may be limited by the competitive environment in which the Company operates.

(t)
Restaurant Revitalization Fund

In 2021, several of the Company’s restaurants received a total of approximately $16.8 million from the Restaurant Revitalization Fund (“RRF”). The RRF funds must be used for specific purposes, and the Company was required to provide use of funds validation on an annual basis through March 2023. The Company accounted for the RRF funds as a government grant and has recognized the amounts as income as related expenses were incurred. During the year ended December 31, 2022, the Company recognized approximately $13.0 million as RRF grant income and had deferred the remaining balance of $3.8 million. No RRF grant income was recognized during the year ended December 31, 2025 and December 31, 2024.

(u)
Employee Retention Credits

In March 2020, the Coronavirus Aid, Relief, and Economic Security Act was signed into law, providing numerous tax provisions and other stimulus measures, including the Employee Retention Credit (“ERC”), a refundable tax credit against certain employment taxes. The Taxpayer Certainty and Disaster Tax Relief Act of 2020 and the American Rescue Plan Act of 2021 extended and expanded the availability of the ERC. We qualified for the ERC in the first and second quarters of 2019, second and fourth quarters of 2020 and first, second and third quarters of 2021. During the years ended December 31, 2025 and 2024, we recorded an aggregate benefit of $313 thousand and $199 thousand, respectively, in our consolidated statements of operations to reflect the ERC.

(v) Net (Loss) Income Per Share

Basic net income (loss) per share is computed by dividing net income (loss) attributable to the Company by the weighted average number of shares outstanding during the period. Diluted net income (loss) per share is computed by giving effect to all potential weighted average dilutive shares including stock options, restricted stock units, dividend equivalent units, restricted stock awards, and Class B Common Units exchangeable for shares of Class A common stock. The dilutive effect of outstanding awards, if any, is reflected in diluted earnings per share by application of the treasury stock method or if-converted method, as applicable. See “Note 16—Net Income per Share.”

(w) Goodwill

Goodwill is calculated under ASC 805-30-30, which represent the excess of the fair value of purchase consideration of an acquired business over the fair value of the identifiable net assets acquired. Goodwill is not amortized but is tested for impairment at a reporting unit level on an annual basis, or more frequently if circumstances change or an event occurs that would more likely than not reduce the fair value of the reporting unit below its carrying amount.

(x) Accounts Receivable

Accounts receivable consist primarily of receivables from Costco for gift card sales. The collectability of accounts receivable is evaluated based on a variety of factors, including historical experience, current economic

F-15

GEN RESTAURANT GROUP, INC.

Notes to Consolidated Financial Statements

December 31, 2025 and 2024

conditions and other factors. The Company had accounts receivable of $10.4 million and $3.5 million as of December 31, 2025 and 2024, respectively. The Company had a reserve for currently expected credit losses of $0 and $0 as of December 31, 2025 and 2024, respectively.

(3)
Business Combinations

On February 18, 2024, the Company acquired the remaining 50% interest in GKBH, which was previously accounted for under the equity method. GKBH has been consolidated in our consolidated financial statements commencing February 18, 2024, the date of the acquisition. The purchase price for the acquisition was allocated based on estimates of the fair value of the net assets acquired at the acquisition date, with the excess allocated to goodwill. The total consideration for the acquisition consisted of $6.0 million, payable in cash and a short term note payable. During the year ended December 31, 2024, we recognized approximately $370 thousand in acquisition-related costs, which were included with “Gain on remeasurement of previously held interest” in our consolidated statements of operations.

(in thousands)

Purchase price of 50% interest in GKBH

$

6,000

Acquisition-date fair value of previously held interest (Level 2)

4,286

Fair value of GKBH at acquisition date

10,286

(in thousands)

Cash

$

24

Accounts Receivable

96

Inventories

22

Prepaid and Other assets

118

Deposits

67

Property and equipment

745

Operating lease right-of use assets

3,851

Liabilities assumed

(4,135

)

Total identifiable net assets

$

788

Goodwill

9,498

$

10,286

Goodwill is calculated as the excess of the purchase price over the net assets acquired. The Company expects that a portion of the goodwill balance to be deductible for tax purposes over a period of 15 years. Goodwill is primarily attributed to growth and efficiency opportunities, expected synergies from combining the operation with the Company, and the assembled workforce.

The following table presents the unaudited supplemental consolidated pro forma results as if the acquisition of GKBH had occurred on January 1, 2024:

Year Ended December 31,

(in thousands, except per share data)

2025

2024

Revenue

$

212,541

$

208,972

Net (loss) income before taxes

(20,305

)

4,889

(Loss) earnings per common share:

Basic and diluted

$

(0.59

)

$

0.13

F-16

GEN RESTAURANT GROUP, INC.

Notes to Consolidated Financial Statements

December 31, 2025 and 2024

The pro forma financial information reflects the acquisition of GKBH by the application of pro forma adjustments to the Company’s historical financial statements as if the acquisition had occurred on January 1, 2023. The unaudited pro forma financial information should not be considered indicative of actual results that would have been achieved had the acquisition of GKBH actually been consummated on the date indicated and does not purport to be indicative of the Company’s future financial position or results of operations. There were no material nonrecurring pro forma adjustments directly attributable to the acquisition included within the pro forma financial information.

The fair value of the previously held noncontrolling interest was determined based on the fair value of the total consideration transferred and application of a discount for lack of control, which was determined using historical market data on control premiums and other industry data.

(4)
Fair Value of Financial Instruments

The Company's financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, operating lease liabilities, notes payable, and line of credit balances. The carrying amounts reported in the accompanying consolidated balance sheets for cash and cash equivalents, accounts receivable, accounts payable, notes payable, and line of credit balances approximate fair value because of the short-term maturity of those instruments. Fair value measurements are classified and disclosed in one of the following three categories:

Level 1 - Quoted prices in active markets for identical assets or liabilities.

Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets of liabilities.

As of December 31, 2025, all of the Company's financial assets that were subject to fair value measurement were valued using observable inputs. The Company's financial assets valued based on Level 1 inputs consist of cash, money market funds, and U.S. treasury securities.

Fair Value Measurements at December 31, 2025

(in thousands)

Total

Level 1

Level 2

Level 3

Money Market Account (included in Cash and Cash Equivalents)

$

1,058

$

1,058

$

—

$

—

U.S. Treasury Securities (included in Cash and Cash Equivalents)

$

55

$

55

$

—

$

—

Fair Value Measurements at December 31, 2024

Money Market Account (included in Cash and Cash Equivalents)

$

6,459

$

6,459

$

—

$

—

U.S. Treasury Securities (included in Cash and Cash Equivalents)

$

14,317

$

14,317

$

—

$

—

F-17

GEN RESTAURANT GROUP, INC.

Notes to Consolidated Financial Statements

December 31, 2025 and 2024

(5)
Property and Equipment, Net

The costs and related accumulated depreciation and amortization of major classes of property:

For the Year Ended

December 31,

(in thousands)

2025

2024

Equipment

19,554

16,597

Furniture and fixtures

8,133

6,678

Leasehold improvements

66,522

55,275

Other assets

414

414

Construction in progress

14,369

12,809

Less:

$

108,992

$

91,773

Accumulated depreciation and amortization

(43,245

)

(39,134

)

Property and Equipment, Net

$

65,747

$

52,639

The construction in progress balance on December 31, 2025 and 2024 is related to new restaurants being developed as of such dates for subsequent openings.

Total depreciation and amortization, including corporate depreciation and amortization for the year ended December 31, 2025 and December 31, 2024 was approximately $9.1 million and $6.9 million, respectively.

During the fourth quarter of 2025, the Company reviewed quantitatively the carrying value of the long-lived assets for the restaurants. The Company observed that the historical performance of this asset group was not recoverable, and therefore determined the fair market value using an discounted cash flow analysis. The long-lived assets were written down to the fair value and therefore the Company recorded an Impairment expense of $5.5 million.

(6)
Equity Method Investment

On April 1, 2016, GEN Hawaii made an investment of $200 thousand for a 50% interest in GKBH Restaurant LLC (“GKBH”), which operates a GEN restaurant in Hawaii. The Company accounted for the investment as an equity method investment in accordance with ASC 323. The Company acquired the remaining 50% interest in GKBH during the year ended December 31, 2024.

A summary of the GKBH results of operations as of December 31, 2024 is as follows (unaudited):

For the year ended December 31

(in thousands)

2024

Net sales or gross revenue

1,888

Operating income

1,263

Net income

107

Net income attributable to the entity

53

(7)
Gift Cards

Total deferred revenue related to gift cards include the full value of the unredeemed gift card balances less recognized breakage and the unamortized portion of third-party fees. The following tables present information related to gift cards (in thousands):

F-18

GEN RESTAURANT GROUP, INC.

Notes to Consolidated Financial Statements

December 31, 2025 and 2024

(in thousands)

For the Year Ended December 31,

2025

2024

Gift card liabilities:

Beginning Balance

$

5,983

$

-

Gift Card Activations

25,698

9,563

Gift Card Redemptions

(14,793

)

(2,964

)

Gift Card Breakage

(2,219

)

(616

)

Ending Balance

$

14,669

$

5,983

(8)
Line of Credit

On February 18, 2024, the Company finalized an agreement with WDI International, Inc. (“WDI”), to acquire the remaining 50% ownership stake in GKBH, along with securing rights for participation in upcoming restaurant ventures in Hawaii, at a valuation of $6.0 million. Subsequently, on the same date, the Company disbursed $3.0 million in cash and committed to a promissory note amounting to $3.0 million as per the terms of the agreement. The note was non-interest bearing and was due August 16, 2024, at which time the note was paid in full on August 16, 2024.

On September 29, 2023, the Company entered into a $20 million line of credit with a bank. The line of credit matures on September 25, 2026. The interest at a variable rate per annum was equal to 7.00% and 7.75% as of December 31, 2025 and 2024, respectively. As of December 31, 2025 the balance was $1.0 million, which was subsequently paid in full on January 12, 2026.

(9)
Notes Payable

Notes Payable to Bank

During the third quarter of 2024, the Company entered into a loan agreement with PCB Bank in the amount of $3.0 million with a maturity date of June 26, 2026, at a variable interest rate which is defined as the Wall Street Journal Prime Rate plus 0.25%, resulting in an interest rate of 7.00% and 7.75% as of December 31, 2025 and 2024, respectively. The balance as of December 31, 2025 and 2024 was $0.7 million and $2.3 million, respectively.

On April 25, 2025, the Company entered into a loan agreement with PCB Bank in the amount of $2.0 million with a maturity date of April 25, 2027 at a variable interest rate which is defined as the Wall Street Journal Prime Rate plus 0.25%, resulting in an interest rate of 7.00% and 7.75% as of December 31, 2025 and 2024, respectively. The balance as of December 31, 2025 was $1.3 million.

On July 29, 2025, the Company entered into a loan agreement for $4.0 million with PCB Bank. The loan matures on July 29, 2027, and bears interest at a variable rate per annum equal to 0.25% over the Wall Street Journal Prime Rate, which equaled 7.00% as of December 31, 2025. The balance as of December 31, 2025 was $3.2 million.

On October 27, 2025, the Company entered into a loan agreement of $4.0 million with PCB Bank. The loan matures on October 27,2027, and bears interest at a variable rate per annum equal to 0.25% over the Wall Street Journal Prime Rate, which equaled 7.00% at December 31, 2025. The balance as of December 31, 2025 was $4.0 million.

Economic Injury Disaster Loan (EIDL)

On July 1, 2020, the Company executed the standard loan documents for six restaurants required for securing an EIDL loan from the United States Small Business Administration (the “SBA”) under its Economic Injury Disaster Loan assistance program. This assistance was sought in light of the impact of the COVID-19 pandemic on the Company’s business.

F-19

GEN RESTAURANT GROUP, INC.

Notes to Consolidated Financial Statements

December 31, 2025 and 2024

As of December 31, 2025 and December 31, 2024, the total principal amount of the EIDL loans was $4.3 million and $4.4 million, respectively, and the proceeds were used for working capital purposes. Interest on the EIDL loans accrues at 3.75% per annum and installment payments, including principal and interest, are due monthly beginning twelve months from the date of each loan. The balance of principal and interest is payable over thirty years from the date of the promissory note.

Note Payable to Landlord

In August 2017, GEN Fremont entered into a note agreement with a landlord. The Company is making equal monthly payments on this note which has a July 2027 maturity date, with an interest rate of 8.00% per annum. As of December 31, 2025 and December 31, 2024, the loan balance outstanding was $133 thousand and $203 thousand, respectively.

The aggregate maturities of all third party notes payable as of December 31, 2025 are as follows:

(in thousands)

2026

$

2,812

2027

6,840

2028

157

2029

161

2030

165

Thereafter

3,472

$

13,607

Less current portion of notes payable

(2,812

)

Long term portion

$

10,795

(10)
Related Party Notes Payable

During 2022, the member owners loaned $1.9 million, with an interest rate of 3.00% per year and matured on November 25, 2024, to the Company. During 2023 and 2024, the Company satisfied this loan and as of December 31, 2025, the loan balance outstanding was $0.

During March 2023, a member owner loaned $500 thousand to the Company of which $150 thousand was repaid prior to the IPO and as part of the IPO, the remaining loan balance was repaid in full and immediately contributed to owners’ equity.

Interest expense incurred for the related party debt was $14 thousand and $16 thousand for the year ended December 31, 2025 and December 31, 2024, respectively.

(11)
Leases

At inception of a contract, the Company assesses whether a contract is a lease based on whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Lease classification, measurement, and recognition are determined at lease commencement, which is the date the underlying asset is available for use by the Company. The accounting classification of a lease is based on whether the arrangement is effectively a financed purchase of the underlying asset (finance lease) or not (operating lease). The Company has operating and finance leases for its corporate office, restaurant locations, office equipment and kitchen equipment. Our leases have remaining lease terms of less than one year to up to 25 years, including options to extend many of the leases. For leases with renewal periods at the Company’s option, the Company determines the expected lease period based on whether the renewal of any options are reasonably assured at the inception of the lease.

Operating leases are accounted for on the balance sheet with the lease assets and liabilities recognized in “Operating lease assets”, “Operating lease liabilities, current” and “Operating lease liabilities, net of current portion”. Finance lease liabilities are recognized on the balance sheet in “Obligations under finance leases, current” and “Obligations under finance leases, net of current portion”.

F-20

GEN RESTAURANT GROUP, INC.

Notes to Consolidated Financial Statements

December 31, 2025 and 2024

Lease assets and liabilities are recognized at the lease commencement date. All lease liabilities are measured at the present value of the lease payments not yet paid. To determine the present value of lease payments not yet paid, we estimate incremental borrowing rates corresponding to the maturities of the leases. We estimate this rate based on prevailing financial market conditions, comparable company and credit analysis, and management judgment. Operating lease assets are initially measured based on the lease liability, adjusted for initial direct costs, prepaid or deferred rent, and lease incentives. The operating lease liabilities are subsequently measured at the carrying amount of the lease liability adjusted for initial direct costs, prepaid or accrued lease payments, and lease incentives.

The following table summarizes the operating and finance lease activities to the income statement and balance sheet for the year ended December 31, 2025 and 2024:

(in thousands)

Year Ended December 31,

Operating lease cost

Classification

2025

2024

Operating lease cost

Occupancy and related expenses, and General and administrative expenses

$

14,563

$

11,937

Variable lease cost

Occupancy and related expenses, and General and administrative expenses

7,096

5,913

Total operating lease cost

$

21,659

$

17,850

Supplemental balance sheet information related to leases:

Operating leases (in thousands)

December 31, 2025

December 31, 2024

Operating lease assets

$

146,473

$

131,542

Operating lease liabilities, current

6,707

5,221

Operating lease liabilities, net of current portion

165,879

147,898

Total operating lease liabilities

$

172,586

$

153,119

Finance lease assets, net (in thousands)

December 31, 2025

December 31, 2024

Property and equipment, finance leases

$

26

$

447

Accumulated depreciation, finance leases

(4

)

(446

)

Property and equipment, net finance leases

$

22

$

1

Finance lease liabilities (in thousands)

December 31, 2025

December 31, 2024

Obligations under finance leases, current

$

8

$

26

Obligations under finance leases, net of current portion

14

—

Total finance lease liabilities

$

22

$

26

December 31, 2025

Weighted-Average Remaining Lease Term (Years)

-

Operating leases

15.3

Finance leases

2.6

Weighted-Average Discount Rate

Operating leases

7.0

%

Finance leases

7.1

%

F-21

GEN RESTAURANT GROUP, INC.

Notes to Consolidated Financial Statements

December 31, 2025 and 2024

Maturities of lease liabilities as of December 31, 2025:

(in thousands)

Operating Leases

Finance Leases

2026

$

17,562

$

9

2027

18,073

10

2028

18,331

4

2029

18,630

2030

18,739

—

Thereafter

205,410

—

Total undiscounted lease payments

$

296,745

$

23

Present value discount/interest

(124,159

)

(2

)

Present value

172,586

21

Lease liabilities, current

6,707

8

Lease liabilities, net of current

165,879

14

Total operating lease liability

$

172,586

$

22

As of December 31, 2025, the Company had additional operating leases related to new restaurants, which the Company has not yet taken possession. These additional leases will total $38.6 million in future lease payment commitments. These operating leases are expected to commence in fiscal year 2026 and have lease terms, including option periods, of 20 to 25 years.

The Company is obligated under finance leases covering certain property and equipment that expire at various dates during the next year. On December 31, 2025 and December 31, 2024 the gross amounts of property and equipment and related accumulated depreciation and amortization recorded under finance leases were as follows:

(in thousands)

December 31, 2025

December 31, 2024

Property and equipment, finance leases

$

26

447

Less accumulated depreciation and amortization, finance leases

(4

)

(446

)

Property and equipment, net finance leases

$

22

$

1

Amortization of assets held under finance leases is included with depreciation expense in the consolidated statements of operations.

(12)
Commitments and Contingencies

(a)
Commitments

On November 23, 2016, pursuant to the U.S. government’s Immigrant Investor Program, commonly known as the EB-5 program (the “EB-5 Program”), Gen Restaurant Investment, LLC entered into an operating agreement with an investor (the “EB-5 Investor”). Under the terms and conditions of the EB- 5 program, the Company is subject to certain job creation requirements.

As part of the EB-5 Program operating agreement, Gen Restaurant Investment, LLC issued 3 units of Series II Preferred Member Interest in exchange for a 30% interest and received $1.5 million, recorded as equity. Five years from the date of issue, (the “Conversion Date”), or after approval of the l-829 petition to USCIS, the EB-5 Investor has the option to convert the Series II Units into Series I Units. If the EB-5 Investor does not exercise the conversion option, the Company may exercise its call option to purchase the EB-5 Investor’s interests for the fair market value. If approval of the preferred member's I-526 immigration application is denied, the Company is required to repurchase the preferred member's units for $1.5 million.

Accordingly, this has been presented as mezzanine equity, not permanent equity, in the accompanying consolidated balance sheets.

F-22

GEN RESTAURANT GROUP, INC.

Notes to Consolidated Financial Statements

December 31, 2025 and 2024

(b)
Contingencies

The Company and its related entities are involved in various claims and legal actions arising in the ordinary course of business. The outcomes of these actions are not predictable but the Company does not believe that the ultimate resolution of these other actions will have a material adverse effect on its financial position, results of operations, liquidity, or capital resources. However, a significant increase in the number of these claims or an increase in amounts owing under successful claims, could materially and adversely affect its business, financial condition, results of operations or cash flows.

The Company is a party to several lawsuits brought in Los Angeles County, California, by ex-employees alleging labor law violations. The Company plans to continue to defend against these claims and does not expect the outcome of these lawsuits to have a material impact on the financial statements of the Company.

(13)
Income Taxes

As a result of the IPO and the Transactions the Company owns a portion of the common units of the Operating Company, which is treated as a partnership for U.S. federal, and most applicable state and local income tax purposes. As a partnership, the Operating Company is generally not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by the Operating Company is passed through to and included in the taxable income or loss of its members in accordance with the terms of the Operating Agreement. The Company is subject to U.S. federal, state and local income taxes based on its share of the Operating Company’s pass-through taxable income.

The effective tax rate differs from the statutory tax rate primarily due to the Operating Company’s pass-through structure for U.S. income tax purposes.

For the year ended December 31, 2025 and 2024, the Company did not have any unrecognized tax benefits as a result of tax positions taken during a prior period or during the current period. No interest or penalties have been recorded as a result of tax uncertainties.

Deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, which will result in taxable or deductible amounts in the future.

The following table details the Company’s provision for income (benefit) taxes from continuing operations for the years ended December 31, 2025 and 2024:

Year ended December 31,

(in thousands)

2025

2024

Pre-tax earnings from continuing operations

Domestic

$

(18,743

)

$

4,889

Foreign

(1,562

)

-

(20,305

)

4,889

Current tax expense (benefit)

Federal

$

(37

)

$

9

State

21

15

Foreign

-

-

Total current

(16

)

24

Deferred tax expense (benefit)

Federal

$

(696

)

$

(186

)

State

(193

)

519

Foreign

(25

)

-

Total deferred

$

(914

)

$

333

Total income tax expense (benefit)

$

(930

)

$

357

F-23

GEN RESTAURANT GROUP, INC.

Notes to Consolidated Financial Statements

December 31, 2025 and 2024

The following table is a reconciliation of the estimated provision for income taxes at statutory rates to the provision for income taxes at the Company’s effective tax rate:

Year ended December 31,

(in thousands) (except percentages)

2025

Tax (benefit) provision at U.S. Federal statutory rates

$

(4,152

)

21.0

%

State tax, net of federal benefit

(134

)

0.68

%

Statutory rate differential

172

(0.88

)%

Tax credits

(252

)

1.29

%

Changes in valuation allowance

—

0.00

%

Changes in Unrecognized Tax Benefits

—

0.00

%

Other reconciling items

Return to provision

75

(0.38

)%

Non-controlling interest

3,318

(16.94

)%

Nontaxable or Nondeductible Items

Non-deductible expenses

53

(0.27

)%

Nontaxable expenses

(10

)

—

Effective tax rate

$

(930

)

4.557

%

The reconciliation of the U.S. federal statutory tax rate to the effective income tax rate for the year ended December 31, 2024 was as follows:

Year ended December 31,

2024

Tax (benefit) provision at U.S. Federal statutory rates

21.0

%

State income taxes net of federal benefit

0.51

%

Non-deductible permanent items expenses

0.05

%

Gain on GKBH remaining 50% interest

(2.02

)%

Non-controlling interest

(18.08

)%

Disallowed Exec Com - 162(m) limit

—

Valuation Allowance

—

Tax Credits

(2.80

)%

State rate change

8.68

%

Return to provision

0.75

%

Cumulative book expense on unvested RSU

(0.91

)%

Other

0.27

%

Change in valuation allowance

—

Effective tax rate

7.45

%

The Company’s income tax expense varies from the expense that would be expected based on statutory rates due principally to income passed through to the non-controlling interests. Prior to the IPO, income taxes for GEN, LLC at the consolidated level were primarily state, and local taxes minimum taxes. Subsequent to the IPO, the Company became a C Corporation subject to federal, state, and local income taxes with respect to its share of net taxable income of GEN, LLC.

Temporary differences and carryforwards that give rise to deferred tax assets and liabilities are comprised of the following:

F-24

GEN RESTAURANT GROUP, INC.

Notes to Consolidated Financial Statements

December 31, 2025 and 2024

Year ended December 31,

(in thousands)

2025

2024

Deferred tax assets:

Net operating losses

$

319

$

-

Tax Credits

367

48

Outside basis differences

12,323

11,630

Charitable contributions carryover

-

-

State taxes

-

8

Gross deferred tax asset before valuation

13,009

11,686

Valuation Allowance

-

-

Net Deferred Tax Assets

13,009

11,686

Deferred tax liabilities:

-

-

Stock based compensation

-

-

Acquired intangibles

-

-

Total deferred tax liabilities

-

-

Net Deferred Tax Assets (Liabilities)

$

13,009

$

11,686

Year ended December 31,

(in thousands)

2025

Net operating losses is as follows

Net operating losses, federal

$

1,101

Net operating losses, state

65

Net operating losses, foreign

220

Income taxes paid for the year ending December 31, 2025 are as follows:

Year ended December 31,

(in thousands)

2025

Income tax payments information for the current year:

Federal income tax payments

$

34

Federal refunds

—

State income tax payments

421

State refunds

—

Total tax payments

$

455

Tax Receivable Agreement (“TRA”)

GEN, Inc. entered into the TRA with the Operating Company and each of the members of the Operating Company (the “Members”) that provides for the payment by GEN Inc. to the Members of 85% of the amount of tax benefits, if any, that the Company may actually realize (or in some circumstances are deemed to realize) as a result of (i) increases in tax basis resulting from any future redemptions that are funded by GEN Inc. or exchanges of Class A Common Units described above in “Note 1—Organization and Description of Business” and (ii) certain other tax benefits attributable to payments made under the TRA.

The annual tax benefits are computed by calculating the income taxes due including such tax benefits, and the income taxes due without such benefits. The Operating Company expects to benefit from the remaining 15% of any tax benefits that it may actually realize. The TRA payments are not conditioned upon any continued ownership interest in the Operating Company. The rights of each noncontrolling interest holder under the TRA are assignable to transferees of its interest in the Operating Company. The timing and amount of aggregate payments due under the TRA may vary based on a number of factors, including the amount and timing of the taxable income the Operating Company generates each year and the applicable tax rate.

F-25

GEN RESTAURANT GROUP, INC.

Notes to Consolidated Financial Statements

December 31, 2025 and 2024

As of December 31, 2025, the Company had a liability related to its projected obligations under the TRA of $1.1 million, which is reflected on the Company’s consolidated balance sheets in “Tax receivable agreement liability. As of December 31, 2024, the Company had a liability related to its projected obligations under the TRA of $691 thousand. During the year ended December 31, 2025, and 2024, GEN Inc. did not make any payments to members of the Operating Company pursuant to the TRA.

(14)
Non-Controlling Interest

As discussed in “Note 1 – Organization and Description of Business,” the Company consolidates the financial results of the Operating Company and reports a non-controlling interest related to the Class B Common Units held by non-controlling interest holders on its consolidated statements.

As of December 31, 2025, the Company owned 16.0% of the economic interests in the Operating Company, with the remaining 84.0% of the economic interest owned by non-controlling interest holders. The non-controlling interests on the accompanying consolidated statements of operations represents the portion of the income attributable to the economic interests in the Operating Company held by the non-controlling holders of Class B Common Units calculated based on the weighted average non-controlling interests’ ownership during the periods presented.

(15)
Other Related-Party Transactions

The Company previously purchased food from Wise Universal Inc., an affiliate 60% owned by Mr. Chang. During the years ended December 31, 2025, and 2024, the Company did not make any purchases from Wise.

During the years ended December 31, 2025 and December 31, 2024, the Company paid $0 and $0, respectively to Fast Fabrications, LLC (“Fast Fabrications”), for services related to restaurant interior construction.

As of December 31, 2025 and 2024, the Company had receivables of $963 thousand and $380 thousand, and payable of $281 thousand and $220 thousand with Fast Fabrications, respectively. The receivable of $963 thousand was reclassified to Prepaids for $55 thousand and CIP for $908 thousands as these are related to construction work related to stores in development for opening in 2026.

In addition as of December 31, 2025 and 2024, the Company had receivables of approximately $167 thousand and $0, respectively, and payables of $0 and $0, respectively, with GEN Montclair, LP an entity controlled by the CEO. The $167 thousand was netted against professional fees accrued related to consulting fees.

During the years ended December 31, 2025 and 2024, the Company paid approximately $616 thousand and $466 thousand, respectively, to Ignite Enterprises, LLC (100% owned by David Kim), for reimbursement of travel and related expenses. The Company had a payable to Ignite for $41thousand as of December 31, 2025.

(16)
Net (Loss) Income per Share

Basic net (loss) income per share of Class A common stock is computed by dividing net income attributable to GEN Restaurant Group, Inc. by the weighted-average number of shares of Class A common stock outstanding during the period. Diluted net income per share of Class A common stock is computed by dividing net income attributable to GEN Inc. by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive elements. Diluted net income per share for any periods for which loss per share is presented is the same as basic net income per share as the inclusion of potentially issuable shares would be antidilutive.

F-26

GEN RESTAURANT GROUP, INC.

Notes to Consolidated Financial Statements

December 31, 2025 and 2024

A calculation of the numerator and denominator used in the calculation of basic and diluted net income per share of Class A common stock is as follows:

Year ended December 31,

(in thousands, except per share data)

2025

2024

Numerator:

Net (loss) income

$

(19,375

)

$

4,532

Less: Net (loss) income attributable to non-controlling interest

(16,349

)

3,940

Net (loss) income attributable to Class A common stockholders

$

(3,026

)

$

592

Denominator:

Weighted-average shares of Class A common stock outstanding - basic and diluted

5,164

4,668

Net (loss) income per share of Class A common stock - basic and diluted

$

(0.59

)

$

0.13

For the year ended December 31, 2025, 27,886,912 shares of Class B common stock was excluded from the weighted-average in the computation of diluted net income per share of Class A common stock because the effect would have been anti-dilutive. For the year ended December 31, 2023, 28,141,566 shares of Class B common stock was excluded from the weighted-average in the computation of diluted net income per share of Class A common stock because the effect would have been anti-dilutive.

Shares of Class B common stock do not share in the earnings or losses of GEN Inc. and are therefore not participating securities. Separate calculations of basic and diluted net income per share for Class B common stock has not been presented.

(17)
Stock-Based Compensation

In connection with the IPO, the Company granted restricted stock units (“RSUs”) to certain team members that generally vest on the five year anniversary of the grant date, or over a five year period with vesting of 20% each year. The non-employee directors of the Company received RSUs that vest on the first anniversary of the grant date, subject to the grantee's continued service through the vesting period, or upon termination from the Board of Directors for any reason other than for cause, a pro rated portion of the shares vest on the termination date. The employee grants vest in increments over a five year period. The total stock based compensation for the each of the years ended December 31, 2025 and 2024, was $3.0 million and is included in general and administrative expenses.

For the year ended December 31,

RSUs (in thousands)

2025

2024

Non-vested - beginning

928

1,209

Granted

64

—

Vested

(296

)

(281

)

Canceled

—

—

Non-vested - ending

696

928

The aggregate fair value of the RSUs granted during the years ended December 31, 2025 and 2024 was $99 thousand and $0, respectively. The unrecognized stock-based compensation of $7.4 million as of December 31, 2025, will be recognized through July 2028. The Company issued 372,600 (or 9% of the shares of common stock sold in the offering) warrants in connection with the IPO to the underwriters. The warrants expire five years after the effective date of the registration and can be exercised on a cashless basis. As a result, the conversion of some or all of the warrants may dilute the ownership interests of existing shareholders.

F-27

GEN RESTAURANT GROUP, INC.

Notes to Consolidated Financial Statements

December 31, 2025 and 2024

18. Cash Paid for Common Stock Purchased

The Company has a stock buyback program to repurchase up to $5.0 million worth of the Company’s outstanding Class A common stock. During the year ended December 31, 2025, the company purchased 33,388 shares of Class A common stock for a total of $201 thousand.

The stock repurchase program does not obligate the Company to acquire any particular amount of Class A common stock, and it may be suspended or discontinued at any time. A summary of Class A common stock repurchases for the year ended December 31, 2025 is as follows:

(in thousands, except share and per share data)

Total Number

of Shares

Purchased

Average

Price Paid

per Share

Total Number of

Shares Purchased

as Part of Publicly

Announced

Programs (1)

Approximate

Dollar Value

of Shares

that May Yet

Be Purchased

Under the

Programs

January 1, 2025 thru March 31, 2025

33,388

$

5.94

33,388

$

4,800

April 1, 2025 thru June 30, 2025

—

—

—

—

July 1, 2025 thru September 30, 2025

—

—

—

—

October 1, 2025 thru December 31, 2025

—

—

—

—

Total

33,388

33,388

$

4,800

(19) Segment Information

The Company operates 57 Gen Korean BBQ restaurants in the United States and South Korea. The CODM is the Chief Executive Officer. The Company determined it has one reportable segment, as the CODM regularly reviews restaurant operations and financial performance at a consolidated level. The CODM uses net income to allocate resources (including labor, technology and capital resources) for the single segment to make decisions regarding annual budget, new restaurant openings, entering new geographic markets, landlord and vendor negotiation, marketing decisions, pursuing new business ventures, and driving the Company’s mission.

F-28

GEN RESTAURANT GROUP, INC.

Notes to Consolidated Financial Statements

December 31, 2025 and 2024

Year Ended December 31,

(in thousands)

2025

2024

Segment revenue

$

212,541

$

208,380

Less:

Food cost

73,790

68,730

Payroll and benefits

64,943

64,322

Occupancy expenses

21,197

17,524

Operating expenses

24,176

21,538

Depreciation and amortization

9,120

6,735

Pre-opening costs

8,317

7,607

Segment Income from Operations

10,998

21,924

Reconciliation:

General and administrative

25,935

21,326

Impairment expense

5,527

—

Gain on lease terminations

(471

)

—

Gain on remeasurement of previously held interest

—

(3,402

)

Interest expense (income), net

232

(829

)

Other costs

346

122

Loss on foreign currency

47

—

Employee retention credits

(313

)

(199

)

Equity in loss of equity method investee

—

17

Net (loss) income before taxes

$

(20,305

)

$

4,889

(19) Subsequent Events

The Company and its related parties evaluated subsequent events from the balance sheet date through the date at which the consolidated financial statements were issued.

Line of Credit

On January 12, 2026, the Company paid the $1.0 million line of credit with Pacific City Bank, including interest of $2 thousand.

Store Opening

The Company opened two restaurants in Tucson, AZ and Denton, TX during January and March of 2026.

Partnership Agreement

On March 24, 2026, the Company entered into a partnership agreement with Chubby Cattle, Inc., related to five of its existing restaurants. The Company will contribute most of the assets of each restaurant in exchange for a 49% ownership in new restaurant. In connection with this transaction, the Company has recorded an asset reserve of approximately $4.0 million as of December 31, 2025.

F-29