VSTDHIGH SIGNALRISK10-K

VSTD shows a concerning combination of substantial stockholders' equity decline and meaningfully higher liabilities despite revenue growth, indicating potential financial distress.

The near-elimination of stockholders' equity (dropping from $2.7M to $255K) while total liabilities increased substantially to $17.3M suggests the company is burning through capital faster than it can generate returns from expansion. Despite adding three Las Vegas locations and growing revenue to $12.8M, the company remains deeply unprofitable with operating losses exceeding $2.6M, raising questions about the sustainability of its growth strategy and capital structure.

Comparing 2025-03-27 vs 2024-04-01View on EDGAR →
FINANCIAL ANALYSIS

VSTD expanded operations and grew revenue notably to $12.8M, but this growth came at a steep financial cost. The company's stockholders' equity was nearly wiped out while total liabilities surged to $17.3M, and despite some improvement in operating losses, the company remains significantly unprofitable. Current liabilities increased substantially to $6.0M while current assets declined, creating a challenging liquidity position that signals potential financial distress despite the revenue expansion.

FINANCIAL STATEMENT CHANGES
Inventory
Balance Sheet
+90.9%
$73K→$139K

Inventory surged 90.9% — growing significantly faster than typical sales pace; potential demand softening or supply chain overcorrection.

Stockholders Equity
Balance Sheet
-90.4%
$2.7M→$255K

Equity declined sharply — large losses, buybacks, or write-downs reducing book value significantly.

Current Liabilities
Balance Sheet
+84.8%
$3.3M→$6.0M

Current liabilities surged 84.8% — significant near-term obligations; verify ability to meet short-term debt.

Total Liabilities
Balance Sheet
+67.1%
$10.4M→$17.3M

Liabilities grew 67.1% — significant increase in debt or obligations, assess impact on financial flexibility.

Capital Expenditure
Cash Flow
-48.2%
$1.5M→$762K

Capex reduced 48.2% — investment cycle winding down or capital discipline; may improve near-term free cash flow.

Revenue
P&L
+39.3%
$9.2M→$12.8M

Strong top-line growth of 39.3% — accelerating demand or successful expansion into new markets.

Total Assets
Balance Sheet
+35%
$13.0M→$17.6M

Asset base grew 35% — expansion through organic growth, acquisitions, or capital deployment.

Operating Income
P&L
+27.3%
-$3.5M→-$2.6M

Operating income improving — cost discipline or growing revenue base absorbing fixed costs.

Current Assets
Balance Sheet
-23.1%
$1.9M→$1.5M

Current assets declined 23.1% — monitor working capital adequacy and short-term liquidity.

Net Income
P&L
+12.3%
-$3.0M→-$2.7M

Net income grew 12.3% — bottom-line growth signals improving overall business health.

LANGUAGE CHANGES
NEW — 2025-03-27
PRIOR — 2024-04-01
ADDED
The registrant had 1,332,145 shares of class A common stock outstanding, and 100,000 shares of class B common stock outstanding as of March 25, 2025.
The number of authorized shares of Common Stock and number of authorized shares of our Class B common stock were not changed.
Our average unit volume ( AUV , as defined herein) was $1.1 million in 2023 and $1.0 million in 2024.
Properties As of December 31, 2024, we operated twelve (12) restaurants in California and one location under construction.
We also operated three restaurants in Las Vegas since April 2024.
* 4 Acquired in April 2024 We are obligated under non-cancelable leases for the majority of our restaurants, as well as our corporate offices.
We opened one restaurant in each year from 2019 through 2021, and we have opened two restaurants in 2022, 2023 and 2024, respectively.
We also acquired three existing restaurants in Las Vegas by an Asset Purchase Agreement ( APA ) with Mr.
Jihyuck Hwang ( Seller ) (see Note 9 Related Party Transactions) via the Company s wholly owned subsidiary, Yoshiharu Las Vegas ( YLV ).
The APA provided for the purchase of specific assets of the three restaurant businesses, including inventory, security deposits, fixed assets and lease assignment effective as of April 20, 2024.
REMOVED
The registrant had 1,230,246 shares of class A common stock outstanding, and 100,000 shares of class B common stock outstanding as of December 31, 2023.
The number of authorized shares of Common Stock and number of authorized, issued, and outstanding shares of the preferred stock were not changed.
Our average unit volume ( AUV , as defined herein) was $1.2 million in 2022 and $1.1 million in 2023.
Properties As of December 31, 2023, we operated ten restaurants in California and opened one new location in February 2024 in California.
We are obligated under non-cancelable leases for the majority of our restaurants, as well as our corporate offices.
We opened one restaurant in each year from 2019 through 2021, and we have opened two restaurants in 2022 and 2023.
We also opened a new restaurant in February 2024, and currently have two new locations under construction/development.
We anticipate approximately $350,000 in costs per new location in development, and has spent approximately $514,000 for the two locations under construction/development as of December 31, 2023.
In 2019, we closed our West Hollywood and Lynwood, California restaurants due to underperformance.
We cannot provide assurance that we will be able to open any specific number of restaurants in any year.
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