Annual report 2025（

馴

FOOD SERVICE CORP.

Corporate Profile and Annual Report

In February 2016,we completed the construction of the Higashimatsuyama plant,which serves as the infrastructure for our future business development.

At the factory,the land area of which exceeds 15,000 square meters,we have introduced the performed gyoza production lines,the company's original facilities,having the gyoza production capacity for approximately 600 stores. We have mechanized traditionally

manually-handled operations,aiming at supporting the alleviation and efficiency o1 store operations through labor and energy saving.

The Kumiyama plant,1ocated in a suburban areas Kyoto, and

the Higashimatsuyama plant in Saitama Prefecture , and four other food processing plants purchase raw materials in bulk and perform primary processing for nightly delivery of partially prepared ingredients to outlets in the respective regions.

Using this centralized system,our core menu item,to Y330 in the Eastern Japan and Y310 in the Western Japan.

In line with our philosophy of offering “ fresh from the kitchen” taste, most of our outlets have introduced an open kitchen system, whereby customers can watch the preparation and cooking of select dishes. This system allows us to directly judge

the degree of customer satisfaction and to respond to current customer tastes by creating menu items precisely attuned to local preferences.

Under our franchise system, franchisees are not required to pay ohsho any royalty lees. Instead , they are committed to purchasing primary-processed food from us at a gross margin of approximately 30%. This system makes it relatively easy for employees, particularly younger staff, to open their own franchises. For the company, almost all gross profit derived from these sales to Franchise outlets translates into operation income, as our franchise operational expenses are minimal. Thus, the expansion o1 franchise outlets should never adversely affect our profit ratio.

Ohsho Food Service Corp. has long been one of the leading Chinese restaurant chains in Japan.

The company opened its first restaurant in Kyoto in 1967 and, by 1974, had grown to encompass 18 outlets. In 1995, Ohsho was listed on the second section of the Osaka securities exchange.

And in 2022, Ohsho was listed on the Prime Market of the Tokyo Stock Exchange. Today, Ohsho has 726 outlets in Japan, wherein more than 300,000 people a day dine on the company's renowned gyoza dumplings.

We're developing 2 stores in Taiwan at foreign countries.

Ohsho's success is based upon the concept of “ better taste, lower price and faster service.”

Since its inception, the company has maintained a unique and consistent strategy bulk purchasing of ingredients and intensive primary processing, enables comprehensive quality control while lowering production costs. Open kitchens at most outlets allow customers to watch final preparation and cooking. Local and regional specialties at each location meet the preference of local clientele, at prices 10—30% lower than that of competition. And convenient takeout service is available for all menu items. And we have also strengthened the development of a delivery service in response to customer needs.

Steadfast adherence to this strategy has resulted in solid profits and steady growth , in sharp contrast to the stagnant business environment of the restaurant sector as a whole.

Gyoza, a type of Chinese dumplings, are a traditional favorite food among Japanese people.

Consisting of a thin, wheat dough wrapped around a filling of

minced pork and chopped vegetables, these savory morsel are served either fried or steamed.

The Japanese characters in the ohsho logo mean “ king of gyoza.”

0Three Key Ingredients

0Profile

0Consolidated Financial Statements for the Year Ended March 31, 2025, and Independent Auditor's Report Consolidated Balance Shee-t 6

Consolidated Statement of Incom-e 7

Consolidated Statement of Comprehensive Income 8

Consolidated Statement of Changes in Equit-y 9

Consolidated Statement of Cash Flow-s 10

Notes to Consolidated Financial Statements 11

0Corporate Information 0Network

Consolidated Financial Statements for the Year Ended March 31, 2025, and Independent Auditor's Report

INDEPENDENT AUDITOR'S REPORT

Deloitte Touche Tohmatsu LLC Shijokarasuma FT Square

20 Naginataboko-cho Karasuma-higashiiru, Shijo-dori Shimogyo-ku, Kyoto 600-8008 Japan

Tel: 81 (75) 222 0181

Fax:+81(75)231 2703

deloittecom/]p/en

To the Board of Directors of Ohsho Food Service Corp.:

of Consolidated Financial Statements>Opinion

We have audited the consolidated financial statements of Ohsho Food Service Corp. and its subsidiaries (the "Group"), which comprise the consolidated balance sheet as of March 31, 2025 and the consolidated statement of income, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies, all expressed in Japanese yen.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of March 31, 2025, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with accounting principles generally accepted in Japan.

Convenience Translation

Our audit also comprehended the translation of Japanese yen amounts into U.S. dollar amounts and, in our opinion, such translation has been made in accordance with the basis stated in Note 1 to the consolidated financial statements. Such U.S. dollar amounts are presented solely for the convenience of readers outside Japan.

Basis for Opinion

We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the provisions of the Code of Professional Ethics in Japan, and we have fulfilled our other ethical responsibilities as auditors. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matter

A key audit matter is a matter that, in our professional judgment, was of most significance in our audit of the consolidated financial statements of the current period. The matter was addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on the matter.

Member of

Deloitte Touche Tohmatsu Limited

Other Information

Management is responsible for the other information. Audit & Supervisory Board members and the Audit & Supervisory Board are responsible for overseeing the Directors' execution of duties relating to the design and operating effectiveness of the controls over the other information. The other information comprises the information included in the Corporate Profile and Annual Report, but does not include the consolidated financial statements and our auditor's report thereon

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Audit & Supervisory Board Members and the Audit &

Supervisory Board for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in Japan, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern in accordance with accounting principles generally accepted in Japan and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Audit & Supervisory Board members and the Audit & Supervisory Board are responsible for overseeing the Directors' execution of duties relating to the design and operating effectiveness of the controls over the Group's financial reporting process.

Auditor's Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with auditing standards generally accepted in Japan will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks. The procedures selected depend on the auditor's judgment. In addition, we obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain, when performing risk assessment procedures, an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern

• Evaluate whether the overall presentation and disclosures of the consolidated financial statements are in accordance with accounting principles generally accepted in Japan, as well as the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation

• Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the Group as a basis for forming an opinion on the group financial statements. We are responsible for the direction, supervision and review of the audit work performed for purposes of the group audit. We remain solely responsible for our audit opinion.

We communicate with Audit & Supervisory Board members and the Audit & Supervisory Board regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide Audit & Supervisory Board members and the Audit & Supervisory Board with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.

From the matters communicated with Audit & Supervisory Board members and the Audit & Supervisory Board, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication

<Fee-Related lnformation>

Fees for audit and other services for the year ended March 31, 2025, which were charged by us and our network firms to Ohsho Food Service Corp. and its subsidiaries were ¥43 million and Y1 million, respectively.

Interest Required to Be Disclosed by the Certified Pu blic Accountants Act of Japan

Our firm and its designated engagement partners do not have any interest in the Group which is required to be disclosed pursuant to the provisions of the Certified Public Accountants Act of Japan

August 8, 2025

Consolidated Balance Sheet

March                                                                                            31,                                                                                2025                                                                                                                                                                            

   Millions of Yen    

Thousands of

U.S. Dollars

   (Note 1)    

   Millions of Yen    

Thousands of

U.S. Dollars

   (Note 1)    

TOTAL  ¥ 96,633 ¥ 91,462 $ 644,220 TOTAL  ¥ 96,633  ¥ 91,462 $ 644,220

* Shares have been restated, as appropriate, to reflect a three-for-one stock split effected October 1, 2024. See notes to consolidated financial statements.

- 6 -

Consolidated Statement of Income

Year              Ended                March                  31,                2025                                                            

   Millions of Yen    

Thousands of

U.S. Dollars

   (Note 1)    

* Per share figures have been restated, as appropriate, to reflect a three-for-one stock split effected October 1, 2024.

See notes to consolidated financial statements.

Consolidated Statement of Comprehensive Income

Year              Ended                March                  31,                2025                                                            

  Millions of Yen  

Thousands of

U.S. Dollars

   (Note 1)    

See notes to consolidated financial statements.

Consolidated Statement of Changes in Equity

Year                                      Ended                                            March                                            31,                                      2025                                                                                                                                                                  

   Thousands                                                                                                                      Millions of Yen                                                      

             Accumulated Other Comprehensive Income          

Thousands of U.S. Dollars (Note 1)

               Accumulated Other Comprehensive Income          

* Shares and per share figures have been restated, as appropriate, to reflect a three-for-one stock split effected October 1, 2024. See notes to consolidated financial statements.

Consolidated Statement of Cash Flows

Year              Ended                March                  31,                2025                                                            

  Millions of Yen    

Thousands of

U.S. Dollars

   (Note 1)    

2025  2024  2025

Notes to Consolidated Financial Statements

Year              Ended                March                  31,                2025                                                            

1. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS

   The accompanying consolidated financial statements have been prepared in accordance with the provisions set forth in the Japanese Financial Instruments and Exchange Act and its related accounting regulations and in accordance with accounting principles generally accepted in Japan ("Japanese GAAP"), which are different in certain respects as to application and disclosure requirements of IFRS Accounting Standards.

   In preparing these consolidated financial statements, certain reclassifications and rearrangements have been made to the consolidated financial statements issued domestically in order to present them in a form which is more familiar to readers outside Japan.

   The consolidated financial statements are stated in Japanese yen, the currency of the country in which Ohsho Food Service Corp. (the "Company") is incorporated and operates. The translations of Japanese yen amounts into U.S. dollar amounts are included solely for the convenience of readers outside Japan and have been made at the rate of ¥150 to $1, the approximate rate of exchange at March 31, 2025. Such translations should not be construed as representations that the Japanese yen amounts could be converted into U.S. dollars at that or any other rate.

   Certain reclassifications have been made in the 2024 financial statements to conform to the classifications used in 2025.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

   1. Cons olidation—The consolidated financial statements as of March 31, 2025, include the accounts of the Company and its subsidiaries (together, the "Group").

      All significant intercompany balances and transactions have been eliminated in consolidation. All material unrealized profit included in assets resulting from transactions within the Group is eliminated.

   2. Cas h Equivalents —Cash equivalents are short-term investments that are readily convertible into cash and exposed to insignificant risk of changes in value.

      Cash equivalents include time deposits which mature or become due within three months of the date of acquisition.

   3. Inventories —Inventories are stated at the lower of cost, determined by the average cost method, or net selling value.

   4. Property, Plant and Equipment—Property, plant and equipment are stated at cost. Depreciation is computed by the straight-line method based on the estimated useful lives of the assets. The range of useful lives is principally from 10 to 38 years for buildings and structures, and from 6 to 10 years for machinery and equipment.

   5. Long-Lived Ass ets —The Group reviews its long-lived assets for impairment whenever events or changes in circumstance indicate the carrying amount of an asset or asset group may not be recoverable. An impairment loss is recognized if the carrying amount of an asset or asset group exceeds the sum of the undiscounted future cash flows expected to result from the continued use and eventual disposition of the asset or asset group. The impairment loss would be measured as the amount by which the carrying amount of the asset exceeds its recoverable amount, which is the higher of the discounted cash flows from the continued use and eventual disposition of the

      asset or the net selling price at disposition.

   6. Land Revaluation —Under the "Law of Land Revaluation," the Company elected a one-time revaluation of its own-use land to a value based on real-estate appraisal information as of March 31, 2002.

   7. Inves tment Securities —Investment securities are classified and accounted for, depending on management's intent, as available-for-sale securities, and are reported at fair value, with unrealized gains and losses, net of applicable taxes, reported as a separate component of

      shareholders' equity.

      Nonmarketable available-for-sale equity securities are stated at cost determined by the moving-average method. For other-than-temporary declines in fair value, investment securities are reduced to net realizable value by a charge to income.

   8. Allowance for Doubtful Receivables —The allowance for doubtful receivables is stated in amounts considered to be appropriate based on the Company's past credit loss experience and an evaluation of potential losses in the receivables outstanding.

   9. Retirement and Pens ion Plan—The Company has retirement benefit plans of their employees' benefits.

      The Company accounts for the liability for retirement benefits based on projected benefit obligations and plan assets at the balance sheet date. The projected benefit obligations are attributed to periods on a benefit formula basis. Actuarial gains and losses and past service costs that are yet to be recognized in profit or loss are recognized within equity (accumulated other comprehensive income) after adjusting for tax effects and are recognized in profit or loss over 3 years no longer than the expected average remaining service period of the employees.

   10. Ass et Retirement Obligations —An asset retirement obligation is defined as a legal obligation imposed either by law or contract that results from the acquisition, construction, development, and the normal operation of a tangible fixed asset and is associated with the retirement of such tangible fixed asset. The asset retirement obligation is recognized as the sum of the discounted cash flows required for the future asset retirement and is recorded in the period in which the obligation is incurred if a reasonable estimate can be made. If a reasonable estimate of the asset retirement obligation cannot be made in the period the asset retirement obligation is incurred, the liability should be recognized when a reasonable estimate of the asset retirement obligation can be made. Upon initial recognition of a liability for an asset retirement obligation, an asset retirement cost is capitalized by increasing the carrying amount of the related fixed asset by the amount of the liability. The asset retirement cost is subsequently allocated to expense through depreciation over the remaining useful life of the asset. Over time, the liability is accreted to its present value each period. Any subsequent revisions to the timing or the amount of the original estimate of undiscounted cash flows are reflected as an adjustment to the carrying amount of the liability and the capitalized amount of the related asset retirement cost.

   11. Income Taxes —The provision for income taxes is computed based on the pretax income included in the consolidated statement of income. The asset and liability approach is used to recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Deferred taxes are measured by applying currently enacted income tax rates to the temporary differences.

   12. Per Share Information —Basic net income per share is computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding for the period.

       Diluted net income per share is not presented because there are no dilutive shares.

       Cash dividends per share presented in the accompanying consolidated statement of income are dividends applicable to the respective fiscal years, including dividends to be paid after the end of the year.

       On October 1, 2024, the Company conducted a three-for-one stock split by way of a free share distribution based on the resolution of the Board of Directors meeting held on May 23, 2024. All prior year share and per share figures have been restated to reflect the impact of the stock split, and to provide data on a basis comparable to the year ended March 31, 2025. Such

       restatements include calculations regarding the Company's weighted-average number of common shares, basic net income per share, diluted net income per share, and cash dividends per share.

   13. Revenue Recognition—The Group engages in the operation and franchising of a Chinese

       restaurant chain and recognizes revenue in an amount that reflects the consideration to which it expects to be entitled in exchange for satisfying performance obligations to transfer the goods or services promised in contracts with customers. The nature of performance obligations and when such obligations are satisfied are as follows:

       At directly operated outlets, the Group sells Chinese cuisine to customers. Revenue from the sale of such products is recognized at the time the products are delivered to customers. When

       customers use discount coupons, the amounts covered by such coupons are reduced from the consideration. Depending on the types of settlements selected by the customers, the Group receives the consideration at the time performance obligations are satisfied or at the time right after the satisfaction of performance obligations based on the payment terms stipulated by the credit card companies.

       The Group sells raw materials and supplies to the franchisees. Revenue from the sale of such products is recognized at the time the products are delivered to customers. The Group receives the consideration within about a month of satisfaction of performance obligations, and there is no significant financing component in the contract.

   14. New Accounting Pronouncements —On October 28, 2022, the Accounting Standards Board of Japan ("ASBJ") issued ASBJ Statement No. 27, "Accounting Standard for Income Taxes," ASBJ Statement No. 25, "Accounting Standard for Presentation of Comprehensive Income" and ASBJ Guidance No. 28, "Implementation Guidance on Accounting Standard for Tax Effect Accounting" (the "New Accounting Standards").

       In February 2018, the ASBJ issued ASBJ Statement No. 28, "Partial Revision of Accounting Standard for Tax Effect Accounting" etc. and completed transferring of jurisdiction in the guidance on accounting standard for tax effect accounting from the Japanese Institute of Certified Public Accountants to ASBJ. In the process of deliberation of transferring, following issues were supposed to be reviewed after the revised ASBJ Statement No. 28 etc. were published.

       • Classification of tax expenses (taxation on other comprehensive income)

       • Tax effects of the sale of shares in affiliated company under the Group Corporate Taxation

         The Company expects to apply the accounting standards and guidance for annual periods beginning on or after April 1, 2024, and is in the process of measuring the effects of applying the accounting standard and guidance in future applicable periods.

   15. Change in Accounting Es timates —In the current fiscal year, the Company revised its estimate of asset retirement obligations, which had been recorded as an obligation to restore the property to its original state in connection with the Group's real estate lease contracts, in line with the acquisition of new information on restoration costs that would be required when an outlet is vacated.

       An increase of ¥497 million ($3,313 thousand) due to the change in this estimate has been added to the balance of asset retirement obligations before the change.

3. SIGNIFICANT ACCOUNTING ESTIMATE

   Impairment of Long-Lived Ass ets

   1. Carrying Amounts on Consolidated Financial Statements were as follows:

         Millions of Yen    

      Thousands of

      U.S. Dollars  

      	2025	2024	2025
      Land	¥ 19,903	¥ 19,903	$ 132,687
      Buildings and structures	15,395	13,795	102,634
      Machinery and equipment	1,769	1,691	11,793
      Fixtures	2,456	1,985	16,373
      Intangible asset	318	146	2,120
      Total*	¥ 39,841	¥ 37,520	$ 265,607

      * The Group recorded fixed assets of ¥28,447 million ($189,647 thousand) and

      ¥26,226 million pertaining to directly operated outlets (551 outlets and 545 outlets) of Chinese restaurant business in the consolidated balance sheet as of March 31, 2025 and 2024, respectively.

      See Note 7 for loss on impairment of long-lived assets in the consolidated financial statements as of March 31, 2025 and 2024. (Impairment losses on fixed assets for restaurants are

      ¥48 million ($320 thousand) and ¥100 million.)

   2. Information on the Significant Accounting Estimate

   The Group owns assets such as directly operated outlets, factories, and head office in order to operate the Chinese restaurant business. The Group defines each restaurant as an independent cash-generating unit. The Group identifies impairment indicators in the event of a deterioration in operating income or a significant decline in real estate market prices at each restaurant. The Group compares the undiscounted future cash flow generated by the asset group with the carrying amount and recognizes an impairment loss if the undiscounted future cash flow is less than the carrying amount. The undiscounted future cash flow is estimated on future profit and

   loss forecasts based on actual results of operating profit and loss. If assumptions used in the estimation are revised due to significant deterioration of the business environment and decision

   to close and relocate, there is a possibility of impairment loss being recognized in the next fiscal year.

4. INVENTORIES

Inventories at March 31, 2025 and 2024, consisted of the following:

The costs and aggregate fair values of investment securities at March 31, 2025 and 2024, were as follows:

Millions of Yen 2025

Cost

Unrealized

   Gains    

Unrealized

  Losses  

Fair

Value

Securities classified as:

Available-for-sale:

Equity securities  ¥ 1,078 ¥ 3,817  ¥ 4,895

Total  ¥ 1,078  ¥ 3,817  ¥ 4,895

Millions of Yen 2024

Cost

Unrealized

   Gains    

Unrealized

  Losses  

Fair

Value

Securities classified as:

Available-for-sale:

Equity securities  ¥ 1,078 ¥ 3,088  ¥ 4,166

Total  ¥ 1,078  ¥ 3,088  ¥ 4,166

Thousands of U.S. Dollars 2025

Cost

Unrealized

   Gains    

Unrealized

  Losses  

Fair

Value

Securities classified as:

Available-for-sale:

Equity securities  $ 7,187  $ 25,447  $ 32,633

Total  $ 7,187  $ 25,447  $ 32,633

1. LONG-LIVED ASSETS

   The Group reviewed its long-lived assets for impairment as of March 31, 2025 and 2024, and, as a result, recognized an impairment loss of ¥49 million ($327 thousand) and ¥108 million, respectively, as other expense principally related to certain restaurants due to continuing operating losses, and the assets to be sold. The carrying amount of the relevant buildings, structures, and other assets were written down to their recoverable amounts. The recoverable amount for each restaurant was

   measured considering the expected cash flows generated from using the assets, and the discount rate used for the computation of the present value of future cash flows was 5%. The recoverable amount of the assets to be sold was measured at its net selling price, as determined by the estimated price if sold.

2. INVESTMENT PROPERTY

   The Group owns certain rental properties such as retail facilities, an apartment, and land in Hyogo and other areas. The net of rental income and operating expenses for those rental properties was

   ¥43 million ($287 thousand) and ¥25 million for the fiscal years ended March 31, 2025 and 2024, respectively.

   The carrying amounts, changes in such balances, and market prices of such properties are as follows:

   Millions of Yen 2025

                                Carrying Amount                                          Fair Value    

   Increase

   April 1, 2024  (Decrease)  March 31, 2025  March 31, 2025

   ¥ 643 ¥17 ¥ 660 ¥ 545

   Millions of Yen 2024

                                Carrying Amount                                          Fair Value    

   Increase

   April 1, 2023  (Decrease)  March 31, 2024  March 31, 2024

   ¥ 676 ¥ (33) ¥ 643 ¥ 504

   Thousands of U.S. Dollars 2025

                              Carrying Amount                                          Fair Value    

   Increase

   April 1, 2024  (Decrease)  March 31, 2025  March 31, 2025

   $ 4,287 $ 113 $ 4,400 $ 3,633

   Notes: 1. Carrying amount recognized in the consolidated balance sheets is net of accumulated depreciation.

   1. Increase during the fiscal year ended March 31, 2025, primarily represents the reclassification of assets and the depreciation.

   2. Fair value of properties as of March 31, 2025, is measured by the Group in accordance with the Real-Estate Appraisal Standard of Japan.

3. LAND REVALUATION

   Under the "Law of Land Revaluation," the Group elected a one-time revaluation of its own-use land to a value based on real-estate appraisal information as of March 31, 2002. The resulting land revaluation excess represents unrealized appreciation of land and is stated, net of income taxes, as a component of equity. There was no effect on the statement of income. Continuous readjustment is not permitted unless the land value subsequently declines significantly such that the amount of the decline in value should be removed from the land revaluation account and related deferred tax liabilities. When land which has been revalued is sold off or loss on impairment of the land is recognized, any land revaluation is reversed directly to retained earnings.

   As of March 31, 2025 and 2024, the carrying amount of the land, after the above one-time revaluation, exceeded the market value by ¥4,449 million ($29,660 thousand) and ¥4,839 million, respectively.

4. LONG-TERM DEBT

   Long-term debt at March 31, 2025 and 2024, consisted of the following:

   	Millions of Yen	Thousands of U.S. Dollars
   	2025  2024	2025
   Loans from banks, 1.00% (0.33% in 2024)	¥ 5,000 ¥ 7,000	$ 33,333
   Less current portion	(2,000)  (2,000)	(13,333)
   Long-term debt, less current portion	¥ 3,000  ¥ 5,000	$ 20,000

   Annual maturities of long-term debt at March 31, 2025, were as follows:

   Year Ending   March 31	Millions of Yen	Thousands of U.S. Dollars
   2026	¥ 2,000	$ 13,333
   2027	2,000	13,333
   2028	1,000	6,667
   2029
   2030
   Total	¥ 5,000	$ 33,333

5. RETIREMENT AND PENSION PLANS

   Under the Company's pension plan, employees terminating their employment are, in most circumstances, entitled to pension payments based on their average pay during their employment, length of service, and certain other factors.

   1. The changes in defined benefit obligation for the years ended March 31, 2025 and 2024, were as follows:

         Millions of Yen    

      Thousands of

      U.S. Dollars  

      	2025	2024	2025
      Balance at beginning of year	¥ 2,491	¥ 2,475	$ 16,607
      Current service cost	232	243	1,547
      Interest cost	40	30	267
      Actuarial gains	(160)	(60)	(1,067)
      Benefits paid	(123)	(197)	(820)
      Balance at end of year	¥ 2,480	¥ 2,491	$ 16,534

   2. The changes in plan assets for the years ended March 31, 2025 and 2024, were as follows:

         Millions of Yen    

      Thousands of

      U.S. Dollars  

      	2025	2024	2025
      Balance at beginning of year	¥ 4,504	¥ 3,643	$ 30,027
      Expected return on plan assets	90	55	600
      Actuarial gains	(125)	774	(833)
      Contributions from the employer	234	229	1,560
      Benefits paid	(124)	(197)	(827)
      Balance at end of year	¥ 4,579	¥ 4,504	$ 30,527

   3. Reconciliation between the asset recorded in the consolidated balance sheet and the balances of defined benefit obligation and plan assets was as follows:

      	Millions of Yen	Thousands of U.S. Dollars
      	2025  2024	2025
      Defined benefit obligation	¥ 2,480 ¥ 2,491	$ 16,534
      Plan assets	(4,579)   (4,504)	(30,527)
      Net asset for defined benefit obligation	¥ (2,099)  ¥ (2,013)	$ (13,993)
      	Millions of Yen	Thousands of U.S. Dollars
      	2025  2024	2025
      Asset for retirement benefits	¥ (2,099)  ¥ (2,013)	$ (13,993)
      Net asset for defined benefit obligation	¥ (2,099)  ¥ (2,013)	$ (13,993)

   4. The components of net periodic benefit costs for the years ended March 31, 2025 and 2024, were as follows:

      	Millions of Yen	Thousands of U.S. Dollars
      	2025  2024	2025
      Service cost	¥ 232 ¥ 243	$ 1,547
      Interest cost	40 30	267
      Expected return on plan assets	(90) (55)	(600)
      Recognized actuarial losses	(395)  (315)	(2,633)
      Net periodic benefit costs	¥ (213)  ¥ (97)	$ (1,419)

   5. Amounts recognized in other comprehensive income (before income tax effect) in respect of defined retirement benefit plans for the years ended March 31, 2025 and 2024, were as follows:

      	Millions of Yen	Thousands of U.S. Dollars
      	2025  2024	2025
      Actuarial (losses) gains	¥ (360) ¥ 519	$ (2,399)
      Total	¥ (360)  ¥ 519	$ (2,399)

   6. Amounts recognized in accumulated other comprehensive income (before income tax effect) in respect of defined retirement benefit plans as of March 31, 2025 and 2024, were as follows:

      	Millions of Yen	Thousands of U.S. Dollars
      	2025  2024	2025
      Unrecognized actuarial losses	¥ 368 ¥ 998	$ 4,254
      Total	¥ 368  ¥ 998	$ 4,254

      (7)	Plan assets
      	a. Components of plan assets
      	Plan assets as of March 31, 2025 and 2024, consisted of the following:
      		2025	2024
      	Domestic bonds	30%	30%
      	International bonds	12	11
      	Domestic equities	29	29
      	International equities	26	27
      	Others	3	3
      	Total	100%	100%

      b. Method of determining the expected rate of return on plan assets

      The expected rate of return on plan assets is determined by considering the long-term rates of return which are expected currently and in the future from the various components of the plan assets.

      (8) Assumptions used for the years ended March 31, 2025 and 2024, were set forth as follows:

      	2025	2024
      Discount rate	2.2%	1.6%
      Expected rate of return on plan assets	2.0	2.0

6. ASSET RETIREMENT OBLIGATIONS

   The changes in asset retirement obligations for the years ended March 31, 2025 and 2024, were as follows:

   Millions of Yen  

   Thousands of

   U.S. Dollars  

   2025  2024  2025

   Balance at beginning of year Additional provisions associated with the acquisition	¥ 2,011	¥ 867	$ 13,407
   of property, plant and equipment	52	18	347
   Increase associated with changes in estimates	497	1,127	3,313
   Reconciliation associated with passage of time	20	8	133
   Reduction associated with meeting asset retirement obligations	(13)	(9)	(87)
   Balance at end of year	¥ 2,567	¥ 2,011	$ 17,113

7. EQUITY

   Japanese companies are subject to the Companies Act of Japan (the "Companies Act"). The significant provisions in the Companies Act that affect financial and accounting matters are

   summarized below:

   1. Dividends

      Under the Companies Act, companies can pay dividends at any time during the fiscal year in addition to the year-end dividend upon resolution at the shareholders' meeting. Additionally, for companies that meet certain criteria including (1) having a Board of Directors, (2) having independent auditors, (3) having an Audit & Supervisory Board, and (4) the term of service of the directors being prescribed as one year rather than the normal two-year term by its articles of incorporation, the Board of Directors may declare dividends (except for dividends -in-kind) at any time during the fiscal year if the Company has prescribed so in its articles of incorporation.

      However, the Company does not meet all the above criteria.

      Semiannual interim dividends may also be paid once a year upon resolution by the Board of Directors if the articles of incorporation of the company so stipulate. The Companies Act provides certain limitations on the amounts available for dividends or the purchase of treasury stock. The limitation is defined as the amount available for distribution to the shareholders, but the amount of net assets after dividends must be maintained at no less than ¥3 million.

   2. Increas es /Dec reas es and Trans fer of Common Stock, Res erve and Surplus

      The Companies Act requires that an amount equal to 10% of dividends must be appropriated as a legal reserve (a component of retained earnings) or as additional paid-in capital (a component of capital surplus) depending on the equity account charged upon the payment of such dividends, until the aggregate amount of legal reserve and additional paid-in capital equals 25% of the common stock. Under the Companies Act, the total amount of a dditional paid-in capital and legal reserve may be reversed without limitation. The Companies Act also provides that common stock, legal reserve, additional paid-in capital, other capital surplus, and retained earnings can be transferred among the accounts within equity under certain conditions upon

      resolution of the shareholders.

   3. Treas ury Stock and Treas ury Stock Acquis ition Rights

   The Companies Act also provides for companies to purchase treasury stock and dispose of such treasury stock by resolution of the Board of Directors. The amount of treasury stock purchased cannot exceed the amount available for distribution to the shareholders, which is determined by a specific formula. Under the Companies Act, stock acquisition rights are presented as a separate component of equity. The Companies Act also provides that companies can purchase both

   treasury stock acquisition rights and treasury stock. Such treasury stock acquisition rights are presented as a separate component of equity or deducted directly from stock acquisition rights. On October 1, 2024, the Company conducted a three-for-one stock split by way of a free share distribution based on the resolution of the Board of Directors meeting held on May 23, 2024.

8. REVENUE RECOGNITION

   1. Dis aggregation of Revenue

      Revenues from contracts with customers on a disaggregated basis for the years ended March 31, 2025 and 2024, were as follows:

         Millions of Yen    

      Thousands of

      U.S. Dollars  

      	2025			2024		2025
      Directly operated outlets (domestic): In-store sales	¥ 75,233		¥	66,985		$ 501,553
      Takeout and delivery sales	26,128			25,571		174,187
      Total	101,361			92,556		675,740
      Franchise outlets (domestic)	9,210			8,429		61,400
      Total (domestic)	110,571			100,985		737,140
      Directly operated outlets (overseas)	463		417			3,087
      Revenues from contracts with customers	111,034		101,402			740,227
      Other revenue
      Total	¥ 111,034		¥ 101,402			$ 740,227

   2. Bas ic Information to Unders tand Revenues from Contracts with Cus tomers

      See Note 2.m for basic information to understand revenues.

   3. Contract Balances

      Receivables from contract with customers at the beginning and end of the years were as follows:

      	Millions of Yen	Thousands of U.S. Dollars
      	2025  2024	2025
      Receivables from contracts with customers: Balance at beginning of year	¥ 2,891 ¥ 2,516	$ 19,146
      Balance at end of year	3,508 2,891	23,387

   4. Trans action Prices Allocated to Remaining Performance Obligations

      The transaction price allocated to the remaining performance obligations has been omitted in accordance with the practical expedient, as there are no significant contracts with an initially expected contract term exceeding one year. Additionally, there are no significant amounts arising from contracts with customers that are not included in the transaction price.

9. TRANSACTIONS WITH FRANCHISEES

   The Company has a franchise system. The Company sells raw materials and supplies to the franchisees, provides know-how for their restaurant operations, and supports their financing requirements.

   Transactions with the franchisees for the years ended March 31, 2025 and 2024, were as follows:

     Millions of Yen  

   Thousands of

   U.S. Dollars  

   2025  2024  2025

   Net sales	¥ 9,210	¥ 8,429	$ 61,400
   Franchise fees	109	110	727

10. INCOME TAXES

    The Company and its domestic subsidiary are subject to Japanese national and local income taxes which, in the aggregate, resulted in a normal effective statutory tax rate of approximately 30.5% for the years ended March 31, 2025 and 2024.

    Change in Corporate Income Tax Rate

    Following the enactment of the "Act for Partial Amendment to the Income Tax Act, etc." (Act No. 13 of 2025) by the Diet on March 31, 2025, a "Special Defense Corporate Tax" will be imposed starting from the fiscal year beginning on or after April 1, 2026.

    Accordingly, the statutory effective tax rate used to calculate deferred tax assets and deferred tax liabilities arising from temporary differences expected to be eliminated in or after the fiscal year beginning on April 1, 2026, has been changed from 30.5% to 31.4%.

    As a result, deferred tax assets (after deducting deferred tax liabilities) for this year increased by

    ¥39 million, and income taxes—deferred decreased by ¥67 million. In addition, valuation difference on available-for-sale securities decreased by ¥28 million. Furthermore, deferred tax liabilities related to revaluation increased by ¥14 million, and land revaluation difference decreased by the same amount.

    The tax effects of significant temporary differences which resulted in deferred tax assets and liabilities at March 31, 2025 and 2024, were as follows:

      Millions of Yen  

    Thousands of

    U.S. Dollars  

    	2025	2024	2025
    Deferred tax assets:
    Accrued enterprise taxes	¥ 165	¥ 154	$ 1,100
    Accrued bonuses	427	412	2,847
    Allowance for doubtful receivables	5	4	33
    Depreciation of property and equipment	2,348	2,261	15,653
    Loss on impairment of long-lived assets	510	533	3,400
    Asset retirement obligations	803	611	5,353
    Loss on devaluation of investment securities	199	194	1,327
    Other	376	335	2,507
    Total of temporary differences	4,833	4,504	32,220
    Less valuation allowance	(559)	(557)	(3,727)
    Deferred tax assets	4,274	3,947	28,493
    Deferred tax liabilities:
    Deferred gains on sales of property, plant
    and equipment	(96)	(94)	(640)
    Unrealized loss on asset retirement obligations	(656)	(474)	(4,373)
    Asset for retirement benefits	(659)	(614)	(4,393)
    Unrealized loss on available-for-sale securities	(999)	(748)	(6,660)
    Other	(5)	(6)	(34)
    Deferred tax liabilities	(2,415)	(1,936)	(16,100)
    Net deferred tax assets	¥ 1,859	¥ 2,011	$ 12,393

    A reconciliation between the normal effective statutory tax rate and the actual effective tax rates reflected in the accompanying consolidated statement of income for the year ended March 31, 2025, with the corresponding figures for 2024, is as follows:

    	2025	2024
    Normal effective statutory tax rate	30.5%	30.5%
    Lump-sum portion of inhabitant taxes	2.4	2.4
    Expenses not deductible and income not taxable for income tax purposes	0.4	0.4
    Decrease in valuation allowance for deferred tax assets	(0.1)	(2.2)
    Tax credits for promotion of salary increases	(4.4)	(4.1)
    Effect of tax rate change	(0.6)
    Other—net	(0.6)	(0.6)
    Actual effective tax rate	27.6%	26.4%

11. LEASES

    The Group leases certain land and buildings for outlets under lease agreements. All of these leases are accounted for as operating leases. These leases include contractual non-cancelable leases.

    Total rental expenses including lease payments under operating leases for the years ended March 31, 2025 and 2024, were ¥4,642 million ($30,947 thousand) and ¥4,489 million, respectively.

    The minimum rental commitments under non-cancelable operating leases at March 31, 2025, were as follows:

    	Millions of Yen	Thousands of U.S. Dollars
    	2025  2024	2025
    Due within one year	¥ 257 ¥ 218	$ 1,713
    Due after one year	870   780	5,800
    Total	¥ 1,127  ¥ 998	$ 7,513

12. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES

    1. Group Policy for Financial Ins truments

       The Group uses financial instruments, mainly long-term debt including bank loans, based on its capital financing plan. Cash surpluses, if any, are invested in short-term deposits. Derivatives are not used for speculative purposes, but to manage risk of interest rate fluctuations arising from business operations.

    2. Nature and Extent of Ris ks Aris ing from Financial Ins truments and Ris k Management for Financial Ins truments

       Investment securities, mainly equity instruments of suppliers of the Group, are exposed to the

       risk of market price fluctuations. Investment securities are managed by monitoring market values on a regular basis and preparing an analysis sheet, which is regularly reported to the Board of Directors.

       Lease deposits, mainly guarantee deposits for lease buildings and certain facilities, are exposed to lessor credit risk. The Group addresses the risk by registering the right to claim the refund at the conclusion of the contract.

       Maturities of bank loans, used mainly for operating funds and capital investment, are less than three years from the consolidated balance sheet date. Although a part of such bank loans are exposed to market risks from changes in variable interest rates, those risks are mitigated by adequate financial planning.

       The Group recognizes liquidity risk, which comprises the risk that the Group cannot meet its contractual obligations in full on maturity dates. The Group manages its liquidity risk by holding adequate volumes of liquid assets to the extent of two months of sales volume, along with adequate financial planning by the Accounting Department.

       Derivative transactions have been entered into and managed by the Accounting Department in accordance with the collective decision-making process known as the "Ringi System."

    3. Fair Values of Financial Ins truments

       Investments in equity instruments that do not have a quoted market price in an active market are not included in the following table. The fair values of cash and cash equivalents are not disclosed because their maturities are short and the carrying values approximate fair value.

       Fair values of financial instruments at March 31, 2025 and 2024, were as follows:

                        Millions of Yen          

       March 31, 2025	Carrying Amount	Fair Value	Unrealized Gain/Loss
       Investment securities Lease deposits	¥ 4,895 4,705	¥ 4,895
       Allowance for doubtful receivables	(10)
       Subtotal	4,695	4,391	¥ (304)
       Total	¥ 9,590	¥ 9,286	¥ (304)
       Long-term debt (including current portion)	¥ 5,000	¥ 5,000
       Total	¥ 5,000	¥ 5,000
       March 31, 2024
       Investment securities Lease deposits	¥ 4,166 4,703	¥ 4,166
       Allowance for doubtful receivables	(10)
       Subtotal	4,693	4,507	¥ (186)
       Total	¥ 8,859	¥ 8,673	¥ (186)
       Long-term debt (including current portion)	¥ 7,000	¥ 7,000
       Total	¥ 7,000	¥ 7,000

                Thousands of U.S. Dollars      

       March 31, 2025	Carrying Amount	Fair Value	Unrealized Gain/Loss
       Investment securities	$ 32,633	$ 32,633
       Lease deposits	31,367
       Allowance for doubtful receivables	(67)
       Subtotal	31,300	29,273	$ (2,027)
       Total	$ 63,933	$ 61,906	$ (2,027)
       Long-term debt (including current portion)	$ 33,333	$ 33,333
       Total	$ 33,333	$ 33,333

    4. Maturity Analys is for Financial Ass ets with Contractual Maturities

                Due in One Year or Less        

       Thousands of

          Millions of Yen      U.S. Dollars  

       2025  2024  2025

       Cash and cash equivalents ¥ 38,120 ¥ 36,297 $ 254,133

       Lease deposits whose amount of redemption cannot be determined reliably are not included in the table above.

    5. Financial Ins truments Categorized by Fair Value Hierarchy

       The fair value of financial instruments is categorized into the following three levels, depending on the observability and significance of the inputs used in making fair value measurements:

       Level 1: Fair values measured by using quoted prices (unadjusted) in active markets for identical assets or liabilities

       Level 2: Fair values measured by using inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly or indirectly

       Level 3: Fair values measured by using unobservable inputs for the assets or liabilities

       If multiple inputs are used that have a significant impact on the measurement of fair value, fair value is categorized at the lowest level in the fair value measurement among the levels to which each of these inputs belongs.

       1. The financial assets and liabilities measured at the fair values in the consolidated balance sheet

          Millions of Yen

          March 31, 2025  Level 1  Level 2  Level 3  Total

          Investment securities:

          Available-for-sale securities:

          Equity securities ¥ 4,895 ¥ 4,895

          Total assets  ¥ 4,895  ¥ 4,895

          Millions of Yen

          March 31, 2024  Level 1  Level 2  Level 3  Total

          Investment securities:

          Available-for-sale securities:

          Equity securities ¥ 4,166 ¥ 4,166

          Total assets  ¥ 4,166  ¥ 4,166

          Thousands of U.S. Dollars

          March 31, 2025  Level 1  Level 2  Level 3  Total

          Investment securities:

          Available-for-sale securities:

          Equity securities $ 32,633 $ 32,633

          Total assets  $ 32,633  $ 32,633

       2. The financial assets and liabilities not measured at the fair values in the consolidated balance sheet