United States securities and exchange commission logo
January 14, 2022
James Chae
Chief Executive Officer
Yoshiharu Global Co.
6940 Beach Blvd., Suite D-705
Buena Park, CA 90621
Re: Yoshiharu Global
Co.
Draft Registration
Statement on Form S-1
Submitted December
15, 2021
CIK No. 0001898604
Dear Mr. Chae:
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
Draft Registration Statement on Form S-1
Cover Page
1. Please refer to the
prospectus cover page. We note your disclosure that the company will
be a controlled company
following the completion of the offering. Please revise the third
paragraph to clarify,
if true, that Mr. Chae will have the ability to determine all matters
requiring approval by
stockholders.
Prospectus Summary, page 1
2. We note your disclosure
in the fourth paragraph that you believe that your long-term total
restaurant potential in
the United States is over 400 restaurants and that you can grow to
over 1,000 restaurants
globally through the expansion of your corporate-owned store
James Chae
Yoshiharu Global Co.
January 14, 2022
Page 2
footprint and establishing a franchise program. Please revise to
balance your growth
potential disclosure by adding your estimate of the time frame
associated with this growth
and clarify your near term growth expectations. Lastly, please clarify
that you do not
currently have a franchise program.
3. Please revise the fourth paragraph to disclose your net income or loss
for the periods
included in your audited and interim financial statements. Please also
revise to disclose
that your auditor has included a going concern qualification in its
audit report related to
your audited financial statements.
4. It appears that your business and operations were significantly
affected by the COVID-19
pandemic in 2020 and that your business and operations have recovered
in 2021. Please
revise to briefly discuss the impact COVID-19 had on your business and
operations.
Additionally, we note that the fourth paragraph highlights your
revenue growth between a
period affected by COVID-19 and a recovery period in 2021. Please
revise to discuss
your revenue for the audited and interim periods reported in your
financial statements and
balance any revenue discussion with known trends which affected your
reported results.
Additionally, we note that you have received a number of Payroll
Protection Program
loans. Please revise to briefly discuss these loans, amounts received
and forgiven and
how they have affected your reported results of operation.
Summary Historical Financial and Operating Data, page 10
5. We note you have presented Adjusted EBITDA and Restaurant-Level
Contribution as Key
Financial and Operating Metrics, and that you have identified these
items as non-GAAP
measures. In your reconciliations of these measures to net income and
operating loss, you
adjust for pre-opening expenses and costs representing pre-opening
rent expense and
training and recruitment costs for new employees. These types of
expenses appear to
represent normal, recurring, cash operating expenses necessary to
operate a registrant s
business. Please revise your presentation to exclude these adjustments
or tell us why you
believe these adjustments are appropriate. Refer to the guidance in
Question 100.01 of the
Compliance and Disclosure Interpretation on Non-GAAP Financial
Measures.
6. We note you have reconciled the non-GAAP measure Restaurant-Level
Contribution to
Operating Loss. Please revise your presentation to reconcile this
measure to the most
FirstName LastNameJames Chae
comparable GAAP measure, gross margin. In this regard, it appears your
measure of
Comapany
grossNameYoshiharu Global Co.restaurant operating income" as presented
on the face of
margin is "Net operating
Januaryyour consolidated
14, 2022 Page 2 statements of operations.
FirstName LastName
James Chae
FirstName LastNameJames Chae
Yoshiharu Global Co.
Comapany
January 14,NameYoshiharu
2022 Global Co.
January
Page 3 14, 2022 Page 3
FirstName LastName
Risk Factors
Changes in food and supply costs...
Failure to receive frequent deliveries of fresh food...
If we face labor shortages..., page 19
7. Please revise these risk factors to address any material impact to the
company, or risk of a
material impact, due to recent supply chain issues, increases in costs
of food and supplies,
and/or labor shortages.
Use of Proceeds, page 34
8. Please revise the third paragraph to more specifically identify the
principal purposes for
which the net proceeds are intended to be used and the approximate
amount intended to be
used for each such purpose. Given your expectations that you will open
14 restaurants in
2022, please indicate how much of the net proceeds you expect will go
toward opening
such restaurants. If a material amount of other funds are necessary to
open the 14
additional restaurants, please state the amounts of such other funds
needed and the sources
thereof. Refer to Item 504 of Regulation S-K. Elsewhere in the
prospectus where you
discuss your plans to open 14 restaurants, please disclose the total
anticipated cost and
how you plan to finance the openings.
Capitalization, page 35
9. The amount due to related party at September 30, 2021 as disclosed in
your capitalization
table does not agree to the amount reflected in the balance sheet as
of this date on page F-
19. Please reconcile and revise these disclosures.
COVID-19 Impact on Concentration of Risk, page 42
10. We note your disclosure that you have experienced significant
disruptions to your
business due to the COVID-19 pandemic and related suggested and
mandated social
distancing and shelter-in-place orders. Please revise, to the extent
possible, to quantify the
negative impacts COVID-19 has had on your business and operations.
Please also add a
risk factor to discuss the COVID-19 pandemic and the risks it has
presented and may
continue to present to your business and operations.
Business
Properties, page 60
11. We note that you expect to open 14 new restaurants in fiscal year
2022. Please indicate
the progress you have made toward such openings, including the number
for which you
have finalized site selection, started construction, and/or entered
into definitive
agreements related to the construction of such new restaurants. Please
also file such
agreements as material contracts, to the extent required by Item
601(b)(10) of Regulation
S-K. If you have not started the site selection or construction
process for any of the 14
James Chae
FirstName LastNameJames Chae
Yoshiharu Global Co.
Comapany
January 14,NameYoshiharu
2022 Global Co.
January
Page 4 14, 2022 Page 4
FirstName LastName
restaurants, please state this fact.
12. Please explain why you closed your West Hollywood and Lynwood
locations in 2019.
13. Please file your leases as material contracts under Item 601(b)(10) of
Regulation S-K, or,
in the alternative, please tell us why you do not believe you are
required to do so.
Executive Compensation, page 80
14. We note a few dated references to December 31, 2020 and fiscal year
2020 in the included
discussions. As applicable, please revise this section for the most
recently completed
fiscal year.
Certain Relationships and Related Party Transactions, page 84
15. We note that your audited and interim financial statements include a
large related party
current liability. As of September 30, 2021, the due to related party
is $1,337,590. Please
revise this section to disclose this related party liability and to
include the information
required by Item 404 of Regulation S-K. Additionally, we note that his
liability is due on
demand. Please revise to include a risk factor discussing this
liability and any associated
risks.
16. We note that the company has made distributions to Mr. Chae in 2019
and 2020. Please
include the information required by Item 404 of Regulation S-K with
respect to these
distributions, or tell us why such disclosure is not required.
Exclusive Forum, page 89
17. Please reconcile the disclosure in this section with the applicable
risk factor on page 30.
In this regard, we note that the risk factor focuses solely on your
bylaws while this section
states that each of your certificate of incorporation and bylaws will
include exclusive
forum provisions.
Yoshiharu Global Co. and Subsidiaries Financial Statements
Consolidated Statements of Stockholders' Equity, page F-21
18. The amounts of the net losses reflected in the consolidated statements
of stockholders'
equity for the nine months ended September 30, 2021 and 2020 do not
agree to the
amounts reflected in the consolidated statements of operations for
these periods on page
F-20. Also, the amounts of distributions reflected in the consolidated
statements of
stockholders' equity for these periods do not agree with the amounts
in the statements of
cash flows on page F-22. Please reconcile and revise these
disclosures.
5. Loan Payables, PPP, page F-29
19. The amount of total loans payable at December 31, 2020 as disclosed in
Note 5 does not
agree to the amount in the consolidated balance sheet on page F-19.
Please reconcile and
revise these dislcosures.
James Chae
Yoshiharu Global Co.
January 14, 2022
Page 5
General
20. Please provide us with supplemental copies of all written
communications, as defined in
Rule 405 under the Securities Act, that you, or anyone authorized to
do so on your behalf,
have presented or expect to present to potential investors in reliance
on Section 5(d) of the
Securities Act, whether or not you retained, or intend to retain,
copies of those
communications. Please contact the staff member associated with the
review of this filing
to discuss how to submit the materials, if any, to us for our review.
You may contact Amy Geddes at 202-551-3304 or Linda Cvrkel at
202-551-3813 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Donald Field at 202-551-3680 or Erin Jaskot at 202-551-3442 with any
other questions.
FirstName LastNameJames Chae Sincerely,
Comapany NameYoshiharu Global Co.
Division of
Corporation Finance
January 14, 2022 Page 5 Office of Trade
& Services
FirstName LastName