As filed with the U.S. Securities and Exchange Commission on December 27, 2023

Registration No. 333-

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

SUSHI GINZA ONODERA, INC.

(Exact name of registrant as specified in its charter)

Delaware

5812

93-2631297

(State or other jurisdiction

of incorporation or organization)

(Primary Standard Industrial

Classification Code Number)

(I.R.S. Employer

Identification No.)

SUSHI GINZA ONODERA, INC.

1-1-3 Otemachi Chiyoda-ku

Tokyo 100-0004, Japan

Telephone: +81-3-5220-8550

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Corporate Creations Network Inc.

3411 Silverside Road Tatnall, Building #104

Wilmington, Delaware 19810

Telephone: (302) 351-3367

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Laura Anthony, Esq.

Craig D. Linder, Esq.

Anthony L.G., PLLC

1700 Palm Beach Lakes Blvd., Suite 820

West Palm Beach, Florida 33401

Telephone: (561) 514-0936

David Huberman, Esq.

Koji Ishikawa, Esq.

Win Rutherfurd, Esq.

Greenberg Traurig, P.A.

333 SE 2nd Avenue, Suite 4400

Miami, FL 33131

Telephone: +972 3-636-6000

Approximate date of commencement of proposed sale to the public:

As soon as practicable after this Registration Statement is declared effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☒

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided to Section 7(a)(2)(B) of the Securities Act. ☐

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

PRELIMINARY PROSPECTUS

SUBJECT TO COMPLETION

DATED DECEMBER 27, 2023

Shares

Common Stock

Sushi Ginza Onodera, Inc.

This is a firm commitment initial public offering of common stock, par value $0.00001 per share (“Common Stock”) of Sushi Ginza Onodera Inc. Prior to the offering, there has been no public market for our Common Stock. We expect the initial public offering price to be between $ and $ per share.

We have applied to list our Common Stock on The Nasdaq Capital Market (the “Nasdaq”) under the symbol “ONDR” and this offering is contingent on the listing of our Common Stock on the Nasdaq.

Currently, Hiroshi Onodera indirectly beneficially owns through LEOC Co., Ltd., a Japanese corporation, an aggregate of 7,000,000 shares of our Common Stock, which represents 100% of the voting power of our outstanding capital stock. LEOC Co., Ltd. is owned by Onodera Group Co., Ltd., which is in turn owned by Mr. Onodera. Following this offering, Mr. Onodera will control indirectly through Onodera Group Co., Ltd. and LEOC Co., Ltd. approximately % of the voting power of our outstanding capital stock if all the Common Stock being offered hereby are sold (or % of our outstanding voting power if the underwriters’ option to purchase additional shares is exercised in full). As a result of his voting power, Mr. Onodera will be able to control any action requiring the general approval of our stockholders, including the election of our Board of Directors, the adoption of amendments to our certificate of incorporation and bylaws and the approval of any merger or sale of substantially all of our assets. If we obtain a listing on Nasdaq, we will be a “controlled company” as defined in Rule 5615(c)(1) of the Nasdaq listing standards because more than 50% of our voting power will be held by LEOC Co., Ltd. after the offering. As a “controlled company,” we are exempt by Rule 5615(c)(2) of the Nasdaq listing standards from the requirements of Rule 5605(b), (d) and (e) of the Nasdaq listing standards that would otherwise require us to have (i) a majority of the Board of Directors consist of “independent” directors under the listing standards of Nasdaq, (ii) a nominating/corporate governance committee composed entirely of independent directors and a written nominating/corporate governance committee charter meeting the requirements of Nasdaq, and (iii) a compensation committee composed entirely of independent directors and a written compensation committee charter meeting the requirements of Nasdaq. Consequently, we are exempt from independent director requirements of Rule 5605(b), (d) and (e) of the Nasdaq listing standards, except for the requirements under subsection (b)(2) thereof pertaining to executive sessions of independent directors and those under subsection (c) thereof pertaining to the Audit Committee. Accordingly, you may not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of Nasdaq. See “Prospectus Summary—Implications of Being a Controlled Company.”

Unless otherwise noted, the share and per share information in this prospectus have been adjusted to give effect to the one for four point two eight five seven one four two nine (1-for-4.28571429) reverse stock split (“Reverse Stock Split”) of our outstanding common stock, which was effective on December 1, 2023.

We are an “emerging growth company” under the federal securities laws and, as such, we have elected to comply with certain reduced public company reporting requirements for this prospectus and future filings. See “Prospectus Summary—Implications of Being an Emerging Growth Company and a Smaller Reporting Company.”

We are a holding company and conduct our business through our operating subsidiaries in the United States, Japan and China.

Investing in our Common Stock involves a high degree of risk. Before buying any shares, you should carefully read the discussion of the material risks of investing in our Common Stock under the heading “Risk Factors” beginning on page 19 of this prospectus.

Neither the Securities and Exchange Commission (the “SEC”) nor any state securities commission has approved or disapproved of these securities or passed on the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

	Per share	Total
Initial public offering price	$	$
Underwriting discounts and commissions (1)	$	$
Proceeds, before expenses, to us	$	$

(1)	This table does not include a non-accountable expense allowance equal to 1.0% of the gross proceeds of this offering payable to the underwriters. For a description of the other compensation to be received by the underwriter, see “Underwriting” beginning on page 111.

We have granted a 45-day option to the Representative to purchase up to additional shares of Common Stock from us solely to cover over-allotments, if any.

Delivery of the shares of Common Stock is expected to be made on or about , 2024.

ThinkEquity

The date of this prospectus is , 2024

TABLE OF CONTENTS

	Page
MARKET AND INDUSTRY DATA	1
TRADEMARKS, SERVICE MARKS AND TRADE NAMES	1
BASIS OF PRESENTATION	1
NON-GAAP FINANCIAL MEASURES	1
ADDITIONAL FINANCIAL MEASURES AND OTHER DATA	2
PROSPECTUS SUMMARY	3
RISK FACTORS	19
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS	46
USE OF PROCEEDS	47
DIVIDEND POLICY	47
CAPITALIZATION	47
DILUTION	49
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	50
CORPORATE HISTORY AND STRUCTURE	63
BUSINESS	64
MANAGEMENT	87
EXECUTIVE AND DIRECTOR COMPENSATION	91
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS	99
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT	105
DESCRIPTION OF SECURITIES	105
SHARES ELIGIBLE FOR FUTURE SALE	108
MATERIAL U.S. FEDERAL TAX CONSIDERATIONS FOR NON-U.S. HOLDERS OF COMMON STOCK	109
UNDERWRITING	111
LEGAL MATTERS	118
EXPERTS	118
WHERE YOU CAN FIND MORE INFORMATION	118
INDEX TO FINANCIAL STATEMENTS	F-1

You should rely only on the information contained in this prospectus and any free writing prospectus we may authorize to be delivered or made available to you. We have not, and the underwriters have not, authorized anyone to provide you with additional or different information from that contained in this prospectus and any free writing prospectus we have authorized. We and the underwriters take no responsibility for and can provide no assurance as to the reliability of any other information that others may give you. We are offering to sell, and seeking offers to buy, shares of common stock only in jurisdictions where offers and sales are permitted. The information in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of the common stock. Our business, financial condition, results of operations and prospects may have changed since that date.

This prospectus contains forward-looking statements that are subject to a number of risks and uncertainties, many of which are beyond our control. “Risk Factors” and “Special Note Regarding Forward-Looking Statements” contain additional information regarding these risks.

For investors outside the United States: We have not, and the underwriters have not, done anything that would permit this offering, or possession or distribution of this prospectus, in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, this offering of the shares of common stock and the distribution of this prospectus outside of the United States. See “Underwriting.”

DEALER PROSPECTUS DELIVERY OBLIGATION

Through and including , 2024 (the 25th day after the date of the prospectus), all dealers that affect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as an underwriter and with respect to their unsold allotments or subscriptions.

MARKET AND INDUSTRY DATA

Unless otherwise indicated, information contained in this prospectus concerning our industry and the markets in which we operate is based on information from independent industry and research organizations, other third-party sources (including industry publications, surveys and forecasts), and management estimates. Management estimates are derived from publicly available information released by independent industry analysts and third-party sources, as well as data from our internal research, and are based on assumptions made by us upon reviewing such data and our knowledge of such industry and markets which we believe to be reasonable. Any industry forecasts are based on data (including third-party data), models and experience of various professionals and are based on various assumptions, all of which are subject to change without notice. Although we believe the data from these third-party sources are reliable as of their respective dates, neither we nor the underwriters have independently verified the accuracy or completeness of this information. In addition, projections, assumptions and estimates of the future performance of the industry in which we operate, and our future performance are necessarily subject to uncertainty and risk due to a variety of factors, including those described in “Risk Factors” and “Special Note Regarding Forward-Looking Statements.” These and other factors could cause results to differ materially from those expressed in the estimates made by the independent parties and by us.

TRADEMARKS, SERVICE MARKS AND TRADE NAMES

We own or have rights to various trademarks, service marks and trade names that we use in connection with the operation of our business. This prospectus may also contain trademarks, service marks and trade names of third parties, which are the property of their respective owners. Our use or display of third parties’ trademarks, service marks, trade names or food products in this prospectus is not intended to imply a relationship with, or endorsement or sponsorship by, these other parties. Solely for convenience, the trademarks, service marks and trade names referred to in this prospectus may appear without the ^®, TM or SM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensor to these trademarks, service marks and trade names.

BASIS OF PRESENTATION

Certain monetary amounts, percentages and other figures included in this prospectus have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables may not be the arithmetic aggregation of the figures that precede them, and figures expressed as percentages in the text may not total 100% or, as applicable, when aggregated may not be the arithmetic aggregation of the percentages that precede them.

In this prospectus, “Sushi Ginza Onodera,” “we,” “us,” “our,” and the “Company” refer to Sushi Ginza Onodera, Inc., a Delaware corporation, and its subsidiaries unless expressly indicated or the context otherwise requires. “LEOC Co., Ltd.,” “Parent” and “parent company” refer to LEOC Co., Ltd., a Japanese corporation, our parent company and sole holder of all outstanding common stock. Onodera Group Co., Ltd. was formerly known as Onodera Holdings Co., Ltd. prior to effecting a name change to Onodera Group Co., Ltd. on April 1, 2021. LEOC Co., Ltd. is a wholly owned subsidiary of Onodera Group Co., Ltd. Prior to this offering, Hiroshi Onodera beneficially owns all of the outstanding common shares of Onodera Group Co., Ltd., representing 100% of the voting power of the outstanding capital stock of Onodera Group Co., Ltd. Therefore, Mr. Onodera indirectly beneficially owns, through LEOC Co., Ltd., an aggregate of 7,000,000 shares of our common stock, which represents 100% of the voting power of our outstanding capital stock of the Company. The terms “yen” and “¥” refers to Japanese Yen, the lawful currency of Japan, and the terms “dollar” or “$” refer to U.S. dollars, the lawful currency of the United States. Unless otherwise indicated, U.S. dollar translations of yen amounts presented in this prospectus are translated using the rate of 135.47 yen to $1.00, based on the central rate as reported by the Bank of Japan on March 31, 2023.

The Company’s fiscal year begins on April 1 and ends on March 31. Our financial statements are prepared in U.S. dollars and in accordance with accounting principles generally accepted in the United States (“GAAP”).

NON-GAAP FINANCIAL MEASURES

“EBITDA” is defined as net income before interest, income taxes and depreciation and amortization. EBITDA presented in this prospectus is not recognized under GAAP.

EBITDA is intended as a supplemental measure of our performance that is neither required by, nor presented in accordance with, GAAP. We are presenting EBITDA because we believe that they provide useful information to management and investors regarding certain financial and business trends relating to our financial condition and operating results.

We believe that the use of EBITDA provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing the Company’s financial measures with those of comparable companies, which may present similar non-GAAP financial measures to investors. In addition, you should be aware when evaluating EBITDA that in the future we may incur expenses similar to those excluded when calculating this measure. Our presentation of this measure should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Our computation of EBITDA may not be comparable to other similarly titled measures computed by other companies, because all companies may not calculate EBITDA in the same fashion.

Because of these limitations, EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using EBITDA on a supplemental basis. For a reconciliation of net income to EBITDA, see “Summary Historical Financial and Operating Data.” You should review the reconciliation and accompanying disclosures carefully in connection with your consideration of such non-GAAP measure and note that the way in which we calculate this measure may not be comparable to similarly titled measures employed by other companies.

ADDITIONAL FINANCIAL MEASURES AND OTHER DATA

	●	“Average Unit Volumes” or “AUVs” consist of the average annual sales of all restaurants that have been open for 18 months or longer at the end of the fiscal year presented. AUVs are calculated by dividing (x) annual sales for the fiscal year presented for all such restaurants by (y) the total number of restaurants in that base. The AUVs measure is calculated excluding one restaurant, which closed in the year ended March 31, 2021 and one restaurant, which closed in the year ended March 31, 2022 and one restaurant, which closed in the six months ended September 30, 2023 (Discontinued operations). Since AUVs are calculated based on annual sales for the fiscal year presented, they are not shown on an interim basis for the six-months ended September 30, 2023 and 2022.

		Typically, our new restaurants have historically tended to gain recognition and sales as the number of months in operation increases, with no “honeymoon” period during which sales generally rise at the time of opening. In new markets, the length of time before average sales for new restaurants stabilize is less predictable as a result of our limited knowledge of these markets and consumers’ limited awareness of our brand. First quarter sales for the three stores opened in the year ended March 31, 2022 increased 71.8% in the second year compared to the same period in the first year. New restaurants usually become profitable in the second or third quarter after opening. New restaurants may not be profitable, and their sales performance may not follow historical patterns. In addition, our average restaurant sales and comparable restaurant sales may not increase at the rates achieved over the past several years.

●

“Comparable restaurant sales growth” refers to the change in year-over-year sales for the comparable restaurant base. We include restaurants in the comparable restaurant base that have been in operation for at least 18 months prior to the start of the accounting period presented. Growth in comparable restaurant sales represents the percent change in sales from the same period in the prior year for the comparable restaurant base. For the years ended March 31, 2023, and March 31, 2022, there were eight and eight restaurants, respectively, in our comparable restaurant base. For the six months ended September 30, 2023 and September 30, 2022, there were eight and eight restaurants, respectively, in our comparable restaurant base. This measure highlights the performance of existing restaurants, as the impact of new restaurant openings is excluded. The small number of restaurants in our comparable restaurant base may cause this measure to fluctuate and be unpredictable. The comparable restaurant sales growth measure is calculated excluding one restaurant, which closed in the year ended March 31, 2021 and one restaurant, which closed in the year ended March 31, 2022 and one restaurant, which closed in the six months ended September 30, 2023. For more information about the various factors impacting comparable restaurant sales, please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Key Performance Indicators – Comparable Restaurant Sales Growth” on page 52 of this prospectus.

	●	“Number of restaurant openings” reflects the number of restaurants opened during a particular reporting period. Before we open new restaurants, we incur pre-opening costs. New restaurants may not be profitable, and their sales performance may not follow historical patterns. The number and timing of restaurant openings has had, and is expected to continue to have, an impact on our results of operations.

	●	“Payback Period” means the length of time, in years, required to recoup Net Build-Out Costs after the restaurant opening date.

●

“Average check” is defined as (x) dine-in sales, divided by (y) restaurant guest count for a given period of time. This is an indicator which management uses to analyze the dollars spent per guest in our restaurants and aids management in identifying trends in guest preferences and the effectiveness of menu changes and price increases.

PROSPECTUS SUMMARY

This summary highlights certain information contained elsewhere in this prospectus and is qualified in its entirety by the more detailed information and financial statements and related notes included elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in our common stock. You should read this entire prospectus carefully, especially the matters set forth under the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operation” sections of this prospectus and our financial statements and related notes appearing elsewhere in this prospectus, before making an investment decision. All figures are in U.S. dollars, unless otherwise stated.

Unless otherwise noted, the share and per share information in this prospectus reflects a reverse stock split of the outstanding common stock of the Company at a one for four point two eight five seven one four two nine (1-for-4.28571429) ratio, which was effected on December 1, 2023.

Company Overview

Sushi Ginza Onodera, Inc., a Delaware corporation, is a food service company headquartered in the Otemachi district of the Chiyoda ward in Tokyo, Japan. The Company opened its first restaurant in Ginza, Tokyo in 2013. The Company now operates thirteen sushi, tempura, teppanyaki, and makiyaki (firewood cuisine) restaurants in regions around the world. The restaurants in Japan that are operated by the Company consist of Kaiten Sushi Ginza Onodera Kyoto in Kyoto, Japan, as well as Sushi Ginza Onodera Souhonten, Sushi Ginza Onodera Honten, Tempura Ginza Onodera Higashi-ginza, Tempura Ginza Onodera Namiki-dori, Makiyaki Ginza Onodera, Sushi Ginza Onodera Otouto Honten, Sushi Ginza Onodera Toryumon, Kaiten Sushi Ginza Onodera Honten, and Tachigui Sushi Ginza Onodera Honten in Tokyo, Japan. The Company also operates restaurants within the United States and China, consisting of Sushi Ginza Onodera in Los Angeles, California, Sushi Ginza Onodera in Honolulu, Hawaii and Ginza Onodera in Shanghai, China. The Company’s slogan is “From Ginza to the World”, which embodies the Company’s mission of spreading refined Japanese culture throughout the world by providing a unique and culturally authentic food experience to every customer.

The Company is a wholly owned subsidiary of LEOC Co., Ltd., a Japan limited company. LEOC Co., Ltd., founded in September 2008, established the “Ginza Onodera” brand in 2013 and began operations in the U.S. and Tokyo. LEOC Co., Ltd. is a wholly owned subsidiary of Onodera Group Co., Ltd., a Japan limited company which is in turn owned by Hiroshi Onodera. The Company was established in February 2023 with the goal of further expanding its sushi business in the U.S. Hiroshi Onodera indirectly beneficially owns through LEOC Co., Ltd. an aggregate of 7,000,000 shares of our Common Stock, which represents 100% of the voting power of our outstanding capital stock. Following this offering, Mr. Onodera will control indirectly through Onodera Group Co., Ltd. and LEOC Co., Ltd. approximately % of the voting power of our outstanding capital stock if all the Common Stock being offered hereby are sold (or % of our outstanding voting power if the underwriters’ option to purchase additional shares is exercised in full). As a result of his voting power, Mr. Onodera will have the ability to determine all matters requiring approval by stockholders. In other words, Mr. Onodera will be able to control any action requiring the general approval of our stockholders, including the election of our Board of Directors, the adoption of amendments to our certificate of incorporation and bylaws and the approval of any merger or sale of substantially all of our assets. If we obtain a listing on Nasdaq, we will be a “controlled company” as defined in Rule 5615(c)(1) of the Nasdaq listing standards because more than 50% of our voting power will be held by LEOC Co., Ltd., which is indirectly controlled by Mr. Onodera after this offering. As a “controlled company,” we are exempt by Rule 5615(c)(2) of the Nasdaq listing standards from the requirements of Rule 5605(b), (d) and (e) of the Nasdaq listing standards that would otherwise require us to have (i) a majority of the Board of Directors consist of “independent” directors under the listing standards of Nasdaq, (ii) a nominating/corporate governance committee composed entirely of independent directors and a written nominating/corporate governance committee charter meeting the requirements of Nasdaq, and (iii) a compensation committee composed entirely of independent directors and a written compensation committee charter meeting the requirements of Nasdaq. Consequently, we are exempt from independent director requirements of Rule 5605(b), (d) and (e) of the Nasdaq listing standards, except for the requirements under subsection (b)(2) thereof pertaining to executive sessions of independent directors and those under subsection (c) thereof pertaining to the Audit Committee. Accordingly, you may not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of Nasdaq. In addition, Mr. Onodera can exercise significant voting influence over fundamental and important corporate matters and transactions and may have interests that differ from yours. For details, please see “Risk Factors - Risk Related to Our Business and Industry - If the voting power of our capital stock continues to be highly concentrated, it may prevent you and other minority stockholders from influencing significant corporate decisions and may result in conflicts of interest.”

The following diagram depicts our organization structure prior to this offering:

The following diagram depicts our organization structure following this offering (assuming no exercise of the overallotment option):

For the years ended March 31, 2023, and March 31, 2022, we generated revenues of $20,692 thousand and $17,714 thousand, respectively, we reported net income of $2,181 thousand and $1,857 thousand, respectively, and cash flow provided by operating activities of $1,308 thousand and cash flow used in operating activities of $284 thousand, respectively. For the six months ended September 30, 2023 and 2022, we generated revenues of $11,794 thousand and $9,416 thousand, respectively, we reported net income of $2,004 thousand and $2,393 thousand, respectively, and cash flow provided by operating activities of $435 thousand and $275 thousand, respectively.

Our Philosophy

What we value most is “people.” Our corporate philosophy is to “delight and impress our customers,” “provide growth and happiness to partner,” and “contribute to society.” We deliver happiness by facing each and every customer with our high-quality dishes to create an authentic Japanese cuisine that immerses customers in a rich, traditional cultural experience.

Our Strengths

Our Company has established the Ginza Onodera brand in Japan and the United States during the last ten years of our operations. Each of our restaurants follows a traditional Japanese style of sushi called “Edomae sushi,” which is a style of sushi that emerged a few hundred years ago in Tokyo, Japan. “Edo” is a historical name for the location currently known as Tokyo and “Mae” means in front or “waterfront.” Each piece of Edomae sushi is well prepared using a variety of techniques depending on the available raw ingredients, such as utilizing salt, two types of red vinegar, and/or soy sauce to marinate and cure the raw fish, as well as boiling water to flash blanch the raw fish. The techniques encompassed by the “Edomae” approach to sushi serve a dual purpose – it reveals flavors not otherwise present in the raw fish prior to the application of the technique (including but not limited to the umami taste) and promotes aging in order to maximize the original flavor of the fish, rather than just placing raw fish on top of the sushi. The rice component of our sushi is made combined with carefully selected high quality sake lees (pressed lees leftover from the production of sake) that are kept airtight for a long period of time, as well as aged red vinegar, which creates an exquisite harmony with the final raw fish components of Edomae sushi and is highly appreciated by our customers.

The skills cultivated by our itamae (skilled sushi chefs) have been recognized by the Michelin Restaurant Guide, which shows the rating of exemplary restaurants by a number of stars. Two of our existing restaurants, Sushi Ginza Onodera in Los Angeles, California and Makiyaki (Firewood Cuisine) in Tokyo, Japan, have received Michelin stars. Furthermore, Sushi Ginza Onodera in Los Angeles, California has received two Michelin stars for four consecutive years (2020, 2021, 2022, and 2023) and our closed Sushi Ginza Onodera New York was listed in the Michelin Guide five times in a row through 2022.

To secure a firm foothold in the sushi industry, we have strategically established a two-pronged business strategy to differentiate ourselves and target two distinct customer segments. At one end of the spectrum, the high-end Sushi Ginza Onodera restaurants offer an exclusive dining experience for individuals with higher-than-average disposable income, seeking an intimate, one-on-one experience with the head chef in a traditional, Edo Japan atmosphere with desires to savor the Michelin-quality sushi artistry. On the other spectrum, the recently developed Kaiten Sushi establishments are designed for cost-conscious individuals who are passionate about quality sushi but may not have the available financial resources for the high-end omakase experience. By providing this alternative, we can offer a diverse range of options that maintain the brand’s quality commitment while ensuring that a broader audience can enjoy the dishes and traditions integral to the Onodera brand.

Restaurants in the United States. The Company operates two restaurants in the United States, consisting of Sushi Ginza Onodera in Los Angeles, California and Sushi Ginza Onodera in Honolulu, Hawaii. Our restaurants in the United States import fish several times a week from the Toyosu Fish Market in Tokyo, Japan, to ensure fresh authentic Edomae sushi. Additionally, the rice is imported from the Niigata prefecture and other famous Japanese production areas and tinted in red vinegars. These restaurants generally offer our customers a prix fixe lunch and dinner menu dining experience at set rates with limited seating. The menu for each of these seats can include appetizer courses, Edomae sushi, specialty nigiri, soup, and dessert. This permits us to cultivate a more private and authentic dining event as well as showcase our Ginza Onodera style specialties. Our menus may vary according to both daily and seasonal availability, especially since we import many of our food items. We also offer beverage pairing upon request, which generally includes sake, Japanese whiskey, champagne, and wine. Our dinner course experience is intended to be enjoyed by our customers over the course of at least a two-hour period. The Edomae sushi style involves using the aging process to preserve the fish, develop umami flavors, and create a more tender texture. A variety of methods are employed, including but not limited to marinating raw fish in soy sauce, simmering raw fish in broth, and curing raw fish in salt or kombu sea kelp. Each of these methods may be employed from a few hours to several days. Each time fresh fish arrives at our restaurants in the United States from Japan, our artisans examine it and decide the best Edomae techniques to use.

Restaurants in Japan. The Company operates 10 restaurants in Japan, consisting of Kaiten Sushi Ginza Onodera Kyoto in Kyoto, Japan, as well as Sushi Ginza Onodera Souhonten, Sushi Ginza Onodera Honten, Tempura Ginza Onodera Higashi-ginza, Tempura Ginza Onodera Namiki-Dori, Makiyaki (Firewood Cuisine) Ginza Onodera, Sushi Ginza Onodera Otouto Honten, Sushi Ginza Onodera Toryumon, Kaiten Sushi Ginza Onodera Honten, and Tachigui Sushi Ginza Onodera Honten in Tokyo, Japan. Each of our restaurants in Japan adheres to a traditional Japanese style of sushi called “Edomae sushi.” In order to encourage more people to enjoy the thorough attention to authenticity that our restaurants strive to offer to its customers, we opened the Kaiten Sushi Ginza Onodera Honten in Tokyo, Japan in October 2021 and Kaiten Sushi Ginza Onodera Kyoto, Japan in July 2023. These restaurants were intended to provide a more casual dining experience with the use of Kaiten style (customer access to sushi through use of a conveyer belt) at an affordable pricing while retaining the quality that is expected of our Ginza Onodera brand. Our executive chefs thoroughly supervise the restaurant and pursue uncompromising service and quality to provide well-prepared Edomae sushi at a more affordable price. At Kaiten Sushi Ginza Onodera Honten and Kaiten Sushi Ginza Onodera Kyoto, we are creating a Kaiten style sushi culture that combines the traditional practice of Edomae sushi with an innovative restaurant space. The Kaiten service model at our two Kaiten style restaurants allows our guests to control their dining experience, from food variety to time spent on a meal, and from portions to check size. With access to food on the revolving conveyor belt, our guests can drop in for a quick meal or stay longer for a more relaxed dining experience. Our guests can enjoy high-quality dishes at affordable prices because of our efficient kitchen operations and low front-of-house labor needs. We believe that our authentic approach to a popular Japanese cuisine coupled with our unique and flexible dining experience appeal to a wide range of demographics. In addition, we believe our commitment to high-quality and non-artificial ingredients in our food is at the forefront of current dining trends as consumers continue to seek healthy and natural food options. We also improve the customer’s experience in various locations in Japan by frequently holding events, such as the pairing and comparison of various Japanese Sakes.

Our Growth

As a result, the Company achieved significant growth from the year ended March 31, 2022 to the year ended March 31, 2023, our sales grew 16.8% to $20.7 million and net income grew 17.4% to $2.2 million. Comparing sales trends for our stores that have been in operation for more than one year as March 31, 2023, sales have more than doubled, growing 109.9% over the five-year period from the year ended March 31, 2018 to the year ended March 31, 2023, as shown in the table below (The number of stores has also grown from six in the year ended March 31, 2018 to 13 in the year ended March 31, 2023).

The Kaiten Sushi Ginza Onodera Honten, which opened in October 2021, has grown into a high-margin business with gross sales of $4.8 million per restaurant and $1.1 million net income (22.9% of sales) for the year ended March 31, 2023. These Kaiten sushi establishments create a more accessible, value-oriented avenue for customers who seek to taste the high-quality associated with the Onodera brand at an affordable price. By targeting a new target market of individuals separate from the high-end establishments, we aim to diversify our offerings and broaden our customer base to reach more cost cautious individuals.

Site Development and Expansion

Site Selection Process and Expansion Strategy

As of March 31, 2023, the Company had been operating 13 stores in three countries (Japan, China and United States) since the launch of the “Ginza Onodera” brand in 2013. Despite negative impacts from the pandemic in recent years, the Company has been aggressively opening new stores in different business categories and implementing new price ranges, opening three new stores in the year ended March 31, 2022 and one new store in the year ended March 31, 2023.

Restaurants Name	State / City	Opened
Sushi Ginza Onodera Souhonten	Ginza / Tokyo	March-2013
Sushi Ginza Onodera Hawaii	Honolulu / Hawaii	November-2013
Tempura Ginza Onodera Namiki-dori	Ginza / Tokyo	October-2015
Ginza Onodera Shanghai	Shanghai / China	March-2016
Sushi Ginza Onodera California	Los Angeles / California	January-2016
Sushi Ginza Onodera New York	New York / New York	May-2016
Sushi Ginza Onodera Honten	Ginza / Tokyo	December-2018
Tempura Higashi-ginza	Ginza / Tokyo	January-2019
Makiyaki Ginza Onodera	Ginza / Tokyo	July-2019
Kaiten Sushi Ginza Onodera Honten	Omotesando / Tokyo	October-2021
Tachigui Sushi Ginza Onodera Honten	Omotesando / Tokyo	October-2021
Sushi Ginza Onodera Otouto Honten	Futakotamagawa / Tokyo	October-2021
Sushi Ginza Onodera Toryumon	Ginza / Tokyo	April-2022

Sushi Ginza Onodera Otouto, which opened in October 2021, is the second line of Sushi Ginza Onodera, where you can enjoy sushi casually and at a reasonable price, while keeping to the same spirit and quality of food expected from Sushi Ginza Onodera. Sushi Ginza Onodera Toryumon, which opened in April 2022 and is located next to the Sushi Ginza Onodera Souhonten, uses the same ingredients as the main restaurant, but the price is set at a reasonable level to allow young, inexperienced chefs to study at the restaurant. The Kaiten Sushi Honten opened because we believe there are more customers who want to try the authentic Omakase course at the Sushi Ginza Souhonten or Honten after using Kaiten Sushi Ginza Onodera Honten, and each store has a synergistic effect.

The sushi industry has a high turnover rate, and it is very difficult to nurture artisans. Generally, it is said that sushi artisans need more than 10 years of training before they can make sushi, and many young apprentices cannot endure a long period of training and quit halfway through. However, we believe that by operating stores in different business categories and price ranges, we are able to give apprentices places to work and opportunities to learn according to their level of growth, and we can reduce turnover and nurture artisans by giving them opportunities to practice making sushi from an early stage of their career. By doing so, we can continue to provide customers with high quality products even as we open new stores.

Site Selection Process

Our establishments share a common target market demographic characterized by similar age groups, income level, lifestyle preferences, and culinary tastes, with variation depending on the specific restaurant type. The high-end Sushi Ginza Onodera establishments caters to individuals and families with high disposable income, primarily from the older generation and those in well-paying jobs or enjoying retirement, who values and have a taste for the authenticity of Japanese cuisines and enjoy dining out for the unique niche experience of sushi omakase. In contrast, the Kaiten Sushi establishments target a similar audience in terms of lifestyle, eating habits, and taste preference, but caters to a younger generation who values the experience of a revolving sushi bar but also desires a more upscale and sophisticated ambiance at a more affordable price point.

We strategically target regions with a high concentration of individuals who align with the mentioned demographics, often leading to a focus on cities with dense populations. We also evaluate foot traffic patterns in potential areas while conducting comprehensive analysis of competitor presence. Moreover, we consider prime tourist attraction spots as potential locations, recognizing the opportunity to cater to both the local population and tourists seeking the authentic, Japanese dining experience. As we continue to expand our global footprint, we aim to leverage our high-end image cultivated to attract the existing clientele and maximize interest and customer engagement at our strategically located restaurant establishments.

Expansion Strategy

Since launching the brand in 2013, Ginza Onodera has tried various styles of restaurants, but the most successful of these has been the Kaiten Sushi style of restaurant. After 10 years of testing different types of stores in different regions, we believe the Kaiten Sushi business has the highest profit margins and growth potential.

Kaiten Sushi is a style of restaurant that typically offers sushi with a high quality image at a low price, thanks to automation and cost reductions attendant machines. We believe Kaiten Sushi Ginza Onodera revolutionized the industry.

Generally speaking, compared to other Kaiten Sushi style restaurants, which mainly sell sushi at the 100 yen (less than $1) level for two pieces per plate, the most popular product of Kaiten Sushi Ginza Onodera is the “Yamayuki Medium-Fatty Tuna” at a price of 564 yen ($4) for one piece per plate, which is about 10 times the price of other stores. We believe customers are drawn to our Kaiten Sushi restaurants because they appreciate the quality produced by the artisans of the Ginza Onodera, who use the machines but also use the artisans’ skills cultivated by Onodera in the final process of preparing materials and making nigiri sushi. We also believe that our ability to sell sushi at $4.00 per piece allows us to achieve higher average customer checks and profit margins than our competitors, while paying for the same store space.

We believe that opening new Kaiten Sushi restaurants that utilize the techniques of Michelin Guide-listed Ginza Onodera will further broaden our customer base, increase awareness, and increase the number of Ginza Onodera fans, thereby supporting the growth of food services as a whole.

Each Sushi Ginza Onodera restaurant offers a chef’s special Omakase course using seasonal ingredients. Despite the high price range of 27,500 yen (approximately $200) for the Omakase dinner course at the Sushi Ginza Souhonten and Honten, $300 at the Sushi Ginza Onodera Hawaii, and $400 at the Sushi Ginza Onodera California, our restaurants often have a waiting list.

We think that what makes the experience of eating sushi more delicious is a clean and lively atmosphere in a restaurant that seeks to convey a sense of Edo (Japan) and the meticulous attention of the artisans and employees. We believe this atmosphere and attention by our artisans and employees satisfies people and creates unforgettable new experiences. In the Kaiten Sushi Ginza Onodera, various events are held once or twice an hour, such as the sale of recommended products using seasonal ingredients at a special price for a limited time to savor unique dishes depending on the current season and the blind tasting of the different kinds of Japanese sake which allow customers to get a taste of rich and diverse flavors which pairs seamlessly with traditional Edomae sushi. The company holds an event planning contest for store staff, and we invite our staff who come up with ideas to attract customers to dine at Ginza Onodera restaurant. Additionally, in collaboration with Yamayuki Co., Ltd., we have established the bi-monthly fish dismantling demonstration, an event that has quickly become a favorite among customers and provides them with a unique opportunity to gain insight into the meticulous preparation process and skill that goes into crafting their sushi dishes. In order to memorialize the whole wonderful experience, we offer a free photography service by our staff in the store, which we believe is another reason why customers seek out and remain loyal to our restaurants.

We closed Sushi Ginza Onodera New York in August 2023 after seven years of operation on New York’s prestigious Fifth Avenue. Sushi Ginza Onodera New York was listed in the Michelin Guide five times in a row until the year ended March 31, 2023, and was one of our flagship restaurants in the U.S. It helped create an Omakase sushi boom in New York and raised the awareness of “Ginza Onodera.” However, this location was not profitable due to the high store operating costs created by its prime location. Closing this unprofitable store, allowed us to make further investments in growth areas, consistent with our primary strategic focus on store profitability and we are trying to shorten the time from store opening to positive return on capital within 3.5 years.

Going forward, the Company plans to utilize the skills and recognition gained from its existing high-end restaurants and concentrate its investment of human resources (artisans) and capital on the high-margin Kaiten Sushi business to expand the number of restaurants while maintaining profitability, thereby achieving further synergies.

We have already opened the Kaiten Sushi Ginza Onodera Kyoto in July 2023, and plan to open the following restaurants in the next twelve month: the Kaiten Sushi Ginza Onodera Hawaii in the beginning of 2024, the Kaiten Sushi Ginza Onodera Osaka in the Spring of 2024, and the Kaiten Sushi Ginza Onodera Houston, Texas in the summer of 2024. We plan to open approximately thirty stores over the next five years, mainly in the United States, Japan and China, where we have existing high-end restaurants. The Kaiten Sushi Ginza Onodera Honten has achieved a return on investment in a year and a half from its opening. Our plan is to achieve steady growth through the opening of new stores in the future, each of which will target a positive return on capital within 3.5 years from opening.

In addition, we have received requests from various commercial facilities to open stores due to the high brand awareness and evaluation from customers through our existing high-end restaurants, and there have been cases where we can open new restaurants without making initial investment in stores. The Sushi Ginza Onodera in “The Royal Park Hotel Iconic Nagoya,” is scheduled to open without any capital investment on our part in spring 2024.

We established the Ginza Onodera Sushi Academy in October 2017 and have operated the academy since October 2017, believing that by actively educating and recruiting future sushi artisans from an early stage based on the skills and experience that Ginza Onodera has cultivated, we can provide our high-quality services to even more people. In order to focus our resources as a result of COVID-19’s negative impact on the entire restaurant industry and on our aggressive new store development, we suspended the Academy in June 2022, but with the growing popularity of Sushi in Japan and abroad, and the demand for Sushi artisans rapidly increasing, we have reopened the Ginza Onodera Sushi Academy in October 2023 in order to develop sushi artisans. A significant impediment experienced in the sushi industry is the decade-long development and working experience required for a sushi artisan to qualify as a head chef. This challenge is particularly profound in the echelon of high-end establishments in which our restaurants operate, as these venues heavily rely on the head chef’s skillset to consistently deliver the highest quality dishes and provide an intimate, one-on-one omakase experience to each customer. We believe the Academy serves as an innovative solution to the industry-wide impediment described above to qualify as a head chef and strive to cultivate the next generation of Sushi artisans who embody the Onodera brand’s high standards and commitment to preserving the traditional art of Edomae sushi. After graduating from the Academy, we will support a variety of employment opportunities to the graduates, including employment at Sushi Ginza Onodera, to continue fostering the growth and development of the young artisans. We believe that through the Ginza Onodera Sushi Academy, we can further ensure future expansion by training our own sushi artisans, which is essential to our overall future expansion strategy.

Our wholly owned subsidiary, Onodera Food Service Co., Ltd., completed the development of an authentic “Edomae Frozen Sushi” in September 2023. The objective is to allow those living far away from our restaurants, who cannot go to our restaurants, or who cannot order on the go (for pick-up or delivery), or do not have time to eat at our restaurants, to enjoy the taste of “Sushi Ginza Onodera.” In October 2023, Onodera Food Service Co., Ltd., our subsidiary, launched this business line by making limited sales to clients of LEOC Co., Ltd., our parent company, but has only generated nominal sales to date. Onodera Food Service Co., Ltd. is currently building a frozen sushi factory and anticipates that it will be ready to sell to general consumers by the fall of 2024. Edomae Frozen Sushi can be bought for everyday enjoyment as well as sent as a gift to yourself or others for special occasions. We have realized through our subsidiary, Onodera Food Service Co., Ltd., the commercialization of high-quality frozen sushi through the most advanced special freezing technology. Sushi Ginza Onodera Edomae Frozen Sushi was jointly developed using a special freezer called the “Art Lock Freezer” by DayBreak Co. Ltd. This special freezer ensures that the fish will retain its freshness and flavor even after thawing because of the small ice crystals it forms to keep the moisture.

Stock Split

On November 27, 2023, our board of directors and shareholders approved a reverse stock split in a ratio of 1-for-4.28571429 (the “Reverse Stock Split”) and on December 1, 2023, we filed a certificate of amendment to our Certificate of Incorporation implementing the Reverse Stock Split in a ratio of 1-for-4.28571429, effective December 1, 2023. Therefore, on December 1, 2023, following the Reverse Stock Split, Hiroshi Onodera indirectly beneficially owned through LEOC Co., Ltd., a Japanese corporation, and Onodera Group Co., Ltd., a Japanese corporation which owned 100% of LEOC Co., Ltd., an aggregate of 7,000,000 shares of our common stock, which represents 100% of the voting power of our outstanding capital stock.

Except as otherwise indicated, all references to our common stock, share data, per share data and related information has been adjusted for the Reverse Stock Split ratio of 1-for-4.28571429 as if it had occurred at the beginning of the earliest period presented. The Reverse Stock Split combined each 4.285714285 shares of pre-split common stock into one share of the common stock. No fractional shares were issued in connection with the Reverse Stock Split, and any fractional shares resulting from the Reverse Stock Split were rounded up to the nearest whole share.

Risk Factors Summary

Investing in our common stock involves significant risks. You should carefully consider the risks described in “Risk Factors” before making a decision to invest in our common stock. If any of these risks actually occur, our business, financial condition and results of operations would likely be materially adversely affected. In such a case, the trading price of our common stock would likely decline, and you may lose all or part of your investment. In reviewing this prospectus, we stress that past experience is no indication of future performance, and “Special Note Regarding Forward-Looking Statements” contains a discussion of what types of statements are forward-looking statements, as well as the significance of such statements in the context of this prospectus. Below is a summary of some of the significant risks we face:

Risks Related to Our Business and Industry

	●	Our long-term success is highly dependent on our ability to successfully identify and secure appropriate sites and timely develop and expand our operations in existing and new markets.

	●	Our restaurant base is geographically concentrated in Japan, USA and China, and we could be negatively affected by conditions specific to these areas.

	●	Our expansion into new markets may present increased risks due in part to our unfamiliarity with the areas and also due to consumer unfamiliarity with our Kaiten Sushi concept and may make our future results unpredictable.

	●	New restaurants, once opened, may not be profitable, and the increases in average restaurant sales and comparable restaurant sales that we have experienced in the past may not be indicative of future results.

	●	Our sales and profit growth could be adversely affected if comparable restaurant sales are less than we expect.

	●	Our failure to manage our growth effectively could harm our business and operating results.

	●	Our limited number of restaurants, the significant expense associated with opening new restaurants, and the unit volumes of our new restaurants make us susceptible to significant fluctuations in the results of operations.

	●	Difficulties recruiting, training and retaining sushi artisans could adversely affect our business.

	●	A decline in visitors to any of the urban city centers where our restaurants are located could negatively affect our restaurant sales.

	●	We have historically received strategic, operational and financial support from Onodera Group Co., Ltd. and affiliated companies, and as we increase our independence from Onodera Group, we may face difficulties replacing certain services, supplies and financial assistance Onodera Group has provided to us.

	●	Opening new restaurants in existing markets may negatively affect sales at our existing restaurants.

	●	Operating results at our restaurants could be significantly affected by competition in the restaurant industry in general and, in particular, within the dining segments of the restaurant industry in which we compete.

	●	Negative publicity relating to one of our restaurants could reduce sales at some or all of our other restaurants.

	●	New information or attitudes regarding diet and health could result in changes in regulations and consumer consumption habits that could adversely affect our business, financial condition or results of operations.

	●	If we are unable to maintain or increase prices, our margins may decrease.

	●	We may not be able to successfully expand our digital and delivery business, which is subject to risks outside of our control.

	●	We are subject to all of the risks associated with leasing space subject to long-term non-cancelable leases.

	●	We rely significantly on the operation of our Kaiten Sushi conveyor belts, sushi robots and other automated equipment, and any mechanical failure could prevent us from effectively operating our restaurants.

	●	We rely significantly on information technology, and any material failure, weakness, interruption or breach of security could prevent us from effectively operating our business.

	●	Our marketing programs may not be successful, and our new menu items, advertising campaigns and restaurant designs and remodels may not generate increased sales or profits.

	●	Our inability or failure to recognize, respond to and effectively manage the accelerated impact of social media could materially adversely impact our business, financial condition or results of operations.

	●	Our current insurance may not provide adequate levels of coverage against claims.

	●	Failure to obtain and maintain required licenses and permits or to comply with alcoholic beverage or food control regulations could lead to the loss of our liquor and food service licenses and, thereby, harm our business, financial condition or results of operations.

	●	If the benefits of any proposed acquisition do not meet the expectations of investors, stockholders or financial analysts, the market price of our common stock may decline.

	●	We may need capital in the future, and we may not be able to raise that capital on favorable terms.

Risks Related to Supply Chain

	●	We rely significantly on certain vendors and suppliers, which could adversely affect our business, financial condition or results of operations.

	●	Changes in food and supply costs could adversely affect our business, financial condition or results of operations.

	●	We may not be able to manage our manufacturing and supply chain effectively, which may adversely affect our results of operation.

	●	Failure to receive frequent deliveries of fresh food ingredients and other supplies could harm our business, financial condition or results of operations.

Risks Related to Management and Employees

	●	If the voting power of our capital stock continues to be highly concentrated, it may prevent you and other minority stockholders from influencing significant corporate decisions and may result in conflicts of interest.

	●	As a controlled company, we are not subject to all of the corporate governance rules of Nasdaq.

	●	We depend on our senior management team and other key employees, and the loss of one or more key personnel or an inability to attract, hire, integrate and retain highly skilled personnel could have an adverse effect on our business, financial condition or results of operations.

	●	We will incur increased costs as a result of being a public company.

	●	Our management does not have experience managing a U.S. public company and our current resources may not be sufficient to fulfill our public company obligations.

	●	Labor disputes may disrupt our operations and affect our profitability, thereby causing a material adverse effect on our business, financial condition or results of operations.

	●	The minimum wage, particularly in California, continues to increase and is subject to factors outside of our control.

	●	Changes in employment laws may adversely affect our business, financial condition, results of operations or cash flow.

	●	If we face labor shortages, increased labor costs or unionization activities, our growth, business, financial condition and operating results could be adversely affected.

	●	Our business could be adversely affected by a failure to obtain visas or work permits or to properly verify the employment eligibility of our employees.

Risks Related to Legal, Regulatory, Environmental, Intellectual Property and Privacy Matters

	●	The COVID-19 pandemic has adversely affected, and may continue to adversely affect, our operations, financial condition, liquidity and financial results.

	●	Compliance with environmental laws may negatively affect our business.

	●	Changes in economic conditions could materially affect our ability to maintain or increase sales at our restaurants or open new restaurants.

	●	We could be party to litigation that could adversely affect us by distracting management, increasing our expenses or subjecting us to material money damages and other remedies.

	●	Failure to comply with antibribery or anticorruption laws could adversely affect our reputation, business, financial condition or results of operations.

	●	Food safety and foodborne illness concerns could have an adverse effect on our business, financial condition or results of operations.

	●	Governmental regulation may adversely affect our ability to open new restaurants or otherwise adversely affect our business, financial condition or results of operations.

	●	We may become involved in lawsuits involving Onodera Food Service Co., Ltd. as the owner of intellectual property, or us as a licensee of intellectual property from Onodera Food Service Co., Ltd., to protect or enforce intellectual property rights, which could be expensive, time consuming, and unsuccessful.

	●	A breach of security of confidential consumer information related to our electronic processing of credit and debit card transactions, as well as a breach of security of our employee information, could substantially affect our reputation, business, financial condition of results of operations.

	●	Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.

Risks Related to Doing Business in China

	●	We require various approvals, licenses and permits to operate our business and the loss of or failure to obtain or renew any or all of these approvals, licenses and permits could adversely affect our business and results of operations.

	●	Failure to comply with the existing or new government regulations relating to fire safety, food hygiene, environmental protection and control on indoor smoking of the restaurant industry in China may have a material adverse effect on our businesses and results of operation.

	●	Chinese regulation of loans to, and direct investment in, Chinese entities by offshore holding companies and governmental control of currency conversion may restrict or prevent us from making loans or additional capital contributions to our Chinese subsidiary, which may materially and adversely affect our liquidity and our ability to fund and expand our business.

	●	Unauthorized access to, or improper use, disclosure, theft or destruction of, our customer or employee personal, financial or other data or our proprietary or confidential information that is stored in our information systems or by third parties on our behalf could result in substantial costs, expose us to litigation and damage our reputation.

	●	Under the EIT Law, if we are classified as a China resident enterprise for Chinese enterprise income tax purposes, such classification would likely result in unfavorable tax consequences to us and our non-Chinese stockholders.

General Risks

	●	If we are unable to implement and maintain effective internal control over financial reporting in the future, investors may lose confidence in the accuracy and completeness of our financial reports and have an adverse effect on the value of our securities.

	●	Changes to accounting rules or regulations may adversely affect our business, financial condition or results of operations.

	●	As an emerging growth company, our auditor will not be required to attest to the effectiveness of our internal controls.

	●	We may need capital in the future, and we may not be able to raise that capital on favorable terms.

	●	We are an “emerging growth company,” and we cannot be certain if the reduced reporting and disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.

	●	We believe we will be considered a smaller reporting company and will be exempt from certain disclosure requirements, which could make our common stock less attractive to potential investors.

	●	The certificate of incorporation and bylaws provides that state or federal court located within the state of Delaware will be the sole and exclusive forum for substantially all disputes between us and our shareholders, which could limit its stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or other employees.

	●	By purchasing common stock in this offering, you are bound by the fee-shifting provision contained in our bylaws, which may discourage you to pursue actions against us and could discourage shareholder lawsuits that might otherwise benefit the Company and its shareholders.

Risks Related to This Offering and Ownership of Our Common Stock

	●	Once our common stock is listed on the Nasdaq Capital Market, there can be no assurance that we will be able to comply with Nasdaq Capital Market’s continued listing standards.

	●	The price of our common stock could be subject to rapid and substantial volatility.

	●	The market price of our common stock may be volatile, and you could lose all or part of your investment.

	●	If securities or industry analysts do not publish research or reports, or if they publish adverse or misleading research or reports, regarding us, our business or our market, our stock price and trading volume could decline.

	●	Our management team will have immediate and broad discretion over the use of the net proceeds from this offering and we may use the net proceeds in ways with which you disagree.

	●	If we are unable to obtain additional funding when needed, our business operations will be harmed, and if we do obtain additional financing, our then-existing shareholders may suffer substantial dilution.

	●	Our common stock may be subject to the “penny stock” rules in the future. It may be more difficult to resell securities classified as “penny stock.”

	●	You will experience immediate and substantial dilution as a result of this offering and may experience additional dilution in the future.

	●	Shares eligible for future sale may adversely affect the market.

	●	Anti-takeover provisions contained in our certificate of incorporation and bylaws, as well as provisions of Delaware law, could impair a takeover attempt.

	●	Provisions in our charter documents and Delaware law may delay or prevent our acquisition by a third party.

	●	We have never paid dividends on our common stock and have no plans to do so in the future.

	●	We will indemnify and hold harmless our officers and directors to the maximum extent permitted by Delaware law.

Implications of Being an Emerging Growth Company and a Smaller Reporting Company

As a company with less than $1.235 billion in revenues during our last fiscal year, we qualify as an emerging growth company as defined in the Jumpstart Our Business Startups Act enacted in 2012 (the “JOBS Act”). As an emerging growth company, we expect to take advantage of reduced reporting requirements that are otherwise applicable to public companies. These provisions include, but are not limited to:

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being permitted to present only two years of audited financial statements, in addition to any required unaudited interim financial statements, with correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure in this prospectus;

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not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended;

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reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and registration statements; and

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exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the “Securities Act”) for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our consolidated financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.

We may use these provisions until the last day of our fiscal year following the fifth anniversary of the completion of this offering. However, if certain events occur prior to the end of such five-year period, including if we become a “large accelerated filer,” our annual gross revenues exceed $1.235 billion or we issue more than $1.07 billion of non-convertible debt in any three-year period, we will cease to be an emerging growth company prior to the end of such five-year period.

To the extent that we continue to qualify as a “smaller reporting company,” as such term is defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”), after we cease to qualify as an emerging growth company, certain of the exemptions available to us as an emerging growth company may continue to be available to us as a smaller reporting company, including: (i) not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes Oxley Act; (ii) scaled executive compensation disclosures; and (iii) the requirement to provide only two years of audited financial statements, instead of three years.

Implications of Being a Controlled Company

The “controlled company” exception to Nasdaq rules provides that a company of which more than 50% of the voting power is held by an individual, group or another company, a “controlled company,” need not comply with certain requirements of Nasdaq corporate governance rules. As of the date of this prospectus, Hiroshi Onodera indirectly beneficially owns through LEOC Co., Ltd., a Japanese corporation, and Onodera Group Co., Ltd., a Japanese corporation which owns 100% of LEOC Co., Ltd., an aggregate of 7,000,000 shares of our common stock, which represents 100% of the voting power of our outstanding capital stock. Following this offering, Mr. Onodera will control indirectly through LEOC Co., Ltd. approximately ______% of the voting power of our outstanding capital stock if all the common stock being offered are hereby sold (or ___% of our outstanding voting power if the underwriters’ option to purchase additional shares is exercised in full). Accordingly, if we obtain listing on Nasdaq, we will be a “controlled company” within the meaning of Nasdaq’s corporate governance rules. Controlled companies are exempt from Nasdaq’s corporate governance rules requiring that listed companies have (i) a majority of the Board of Directors consist of “independent” directors under the listing standards of Nasdaq, (ii) a nominating/corporate governance committee composed entirely of independent directors and a written nominating/corporate governance committee charter meeting the requirements of Nasdaq, and (iii) a compensation committee composed entirely of independent directors and a written compensation committee charter meeting the requirements of Nasdaq. We currently utilize and presently intend to continue to utilize these exemptions. As a result, we may not have a majority of independent directors, our nomination and corporate governance committee and compensation committee may not consist entirely of independent directors and such committees may not be subject to annual performance evaluations. Accordingly, you may not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of Nasdaq. See also “Management—Controlled Company and Director Independence.”

Corporate Information

We are currently incorporated and in good standing in the State of Delaware where we were formed on February 24, 2023. Our original name was Sushi Onodera, Inc., and we changed our name to Sushi Ginza Onodera, Inc. on July 31, 2023. Our principal executive offices are located at 1-1-3 Otemachi Chiyoda-ku, Tokyo 100-0004, Japan, and our telephone number is +81-3-5220-8550. Our website address is https://sushionodera.com/. The information contained on our website is not incorporated by reference into this prospectus, and you should not consider any information contained on, or that can be accessed through, our website as part of this prospectus or in deciding whether to purchase our common stock.

Reverse Stock Split

On November 27, 2023, our board of directors and shareholders holding a majority of the voting power of our issued and outstanding voting capital stock approved the Reverse Stock Split in a ratio of 1-for-4.28571429. On December 1, 2023, we filed a certificate of amendment to our Certificate of Incorporation, as amended (the “Certificate of Incorporation”), implementing the Reverse Stock Split in a ratio of 1-for-4.28571429, effective December 1, 2023.

Except as otherwise indicated, all references to our common stock, share data, per share data and related information has been adjusted for the Reverse Stock Split as if it had occurred at the beginning of the earliest period presented. The Reverse Stock Split, combined each four point two eight five seven one four two nine shares of our outstanding common stock into one share of common stock, without any change in the par value per share, and the Reverse Stock Split correspondingly adjusted, among other things, the exercise rate of our warrants into our common stock. No fractional shares were issued in connection with the Reverse Stock Split, and any fractional shares resulting from the Reverse Stock Split were rounded up to the nearest whole share.

THE OFFERING

Securities offered by us:		_________________ shares of common stock (or _______ shares if the Representative exercises its over-allotment option in full).

Public offering price:		We expect the initial public offering price to be between $_____ and $____ per share. For purposes of this prospectus, the assumed initial public offering price per share is $______, the midpoint of the anticipated price range set forth on the cover page of this prospectus.

Over-allotment option:		We have granted to the Representative an option to purchase up to an additional ________ shares of common stock exercisable solely to cover over-allotments, if any, at the applicable public offering price less the underwriting discounts and commissions shown on the cover page of this prospectus. The Representative may exercise this option in full or in part at any time and from time to time until 45 days after the date of this prospectus.

Representative’s Warrants		The registration statement of which this prospectus is a part also registers for sale warrants (and the common stock issuable upon exercise of such warrants) we will issue to the Representative, or its permitted designees warrants to purchase up to shares of common stock (or shares of common stock if the underwriters exercise their over-allotment option in full), representing shares of common stock equal to 5.0% of the number of common stock issued in this offering. The Representative’s Warrants will have an exercise price of 125% of the per shares of common stock public offering price, will be exercisable at any time, in whole or in part, during the four and one-half year period commending 180 days from the commencement of sales under this prospectus. Please see “Underwriting – Representative’s Warrants” for a description of these warrants.

Common stock outstanding before this offering:		7,000,000 shares of common stock. ⁽¹⁾

Common stock to be outstanding after this offering:		_________ shares of common stock. If the Representative’s over-allotment option is exercised in full, the total number of shares of common stock outstanding immediately after this offering would be _________. ⁽¹⁾

Controlled Company:		Following this offering, Hiroshi Onodera will control indirectly through LEOC Co., Ltd. approximately ________% of the voting power of our outstanding capital stock if all the common stock being offered hereby are sold (or ___% of our outstanding voting power if the underwriters’ option to purchase additional shares is exercised in full). As a result, if we obtain a listing on Nasdaq Capital Market, we will be a “controlled company” under the Nasdaq Capital Market corporate governance standards and consequently we may elect not to comply with certain corporate governance standards. See “Management – Board Committees and Director Independence - Controlled Company and Director Independence.”

Use of proceeds:		We expect to receive net proceeds from this offering of approximately $________ (or approximately $_________ if the Representative exercises in full its over-allotment option) after deducting estimated underwriting discounts and commissions (__% of the gross proceeds of the offering) and after our offering expenses, estimated at $________, the assumed initial public offering price per share is $____, the midpoint of the anticipated price range set forth on the cover page of this prospectus. We intend to use the net proceeds from this offering to repay $_______ of indebtedness and the remaining balance of the net proceeds to fund capital investments and working capital for opening new restaurants. See “Use of Proceeds.”

Risk factors:		See “Risk Factors” beginning on page 19 of this prospectus for a discussion of some of the factors you should carefully consider before deciding to invest in our common stock.

Listing:		We have applied to list our common stock on Nasdaq under the symbol “ONDR.” No assurance can be given that our application will be approved. The approval of our listing on Nasdaq is a condition of closing this offering.

Lock-Ups:		We, our directors and our officers have agreed not to sell, transfer or dispose of any shares or similar securities for 12 months after the date of this prospectus. Our shareholders have agreed not to sell, transfer or dispose of any shares or similar securities for six months after the date of this prospectus. For additional information regarding our arrangement with the underwriters, please see “Underwriting.”

Reverse Stock Split:		On November 27, 2023, we obtained approval of our board of directors and shareholders holding a majority of the voting power of our issued and outstanding voting capital stock to conduct a Reverse Stock Split in a ratio of 1-for-4.28571429. On December 1, 2023, we filed a certificate of amendment to our Certificate of Incorporation, as amended (the “Certificate of Incorporation”), implementing the Reverse Stock Split in a ratio of 1-for-4.28571429, effective December 1, 2023. Except as otherwise indicated, all references to our common stock, share data, per share data and related information has been adjusted for the Reverse Stock Split as if it had occurred at the beginning of the earliest period presented.

(1) The number of shares of our common stock to be outstanding after this offering is based on 7,000,000 shares of our common stock outstanding as of December 27, 2023.

Unless we indicate otherwise, all information in this prospectus:

	●	is based on 7,000,000 shares of common stock issued and outstanding as of December 27, 2023;

	●	assumes no exercise by the Representative of its option to purchase up to an additional _________ shares of common stock to cover over-allotments, if any;

	●	excludes __________ shares of common stock underlying options outstanding as of December 27, 2023 under the Onodera 2023 Equity Incentive Plan (the “Plan”) with a weighted average exercise price of $_____ per share;

	●	excludes __________ shares of common stock underlying options to be granted to key employees and directors under the Plan immediately after the registration statement of which this prospectus is a part is declared effective at an exercise price equal to the initial public offering price;

	●	excludes __________ shares of common stock reserved for future issuance under the Plan, of which we will grant options to purchase an aggregate of _____ shares of our common stock to key employees and directors immediately after the registration statement of which this prospectus is a part is declared effective (as described in the bullet immediately above); and

	●	excludes __________ shares of our common stock underlying the Representative’s Warrants to be issued to the Representative and/or its affiliates in connection with this offering.

SUMMARY HISTORICAL FINANCIAL AND OPERATING DATA

The following table summarizes our historical financial and operating data for the periods and as of the dates indicated. The statements of income data for the year ended March 31, 2023, and March 31, 2022 and the balance sheet data as of March 31, 2023, and March 31, 2022 have been derived from our audited financial statements included elsewhere in this prospectus. The statements of income data for the six months ended September 30, 2023 and September 30, 2022 and the balance sheet data as of September 30, 2023 and September 30, 2022 have been derived from our unaudited interim financial statements included elsewhere in this prospectus. The financial data presented includes all normal and recurring adjustments that we consider necessary for a fair presentation of the financial position and results of operations for such periods.

The historical results presented below are not necessarily indicative of the results to be expected for any future period. This information should be read in conjunction with “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our audited financial statements and the unaudited interim financial statements and the related notes included elsewhere in this prospectus.

(amounts in thousands, except share and per share data)	Fiscal Years Ended March 31,						Six Months Ended September 30,
	2023			2022			2023			2022
Statements of Operations Data:
Revenues	$	20,692		$	17,714		$	11,794		$	9,416
Restaurant operating costs:
Food and beverage costs		6,536			5,376			3,562			3,021
Labor and related costs		5,956			5,512			3,402			2,893
Occupancy and related expenses		2,365			2,491			1,293			1,099
Depreciation and amortization expenses		601			608			121			328
Costs to related parties		9			451			2			-
Other costs		2,157			2,134			1,354			985

Total restaurant operating costs		17,624			16,572			9,734			8,326

General and administrative expenses		1,771			1,883			1,443			1,018
Depreciation and amortization expenses		1			1			-			1
Total operating expenses		19,396			18,456			11,177			9,345
Income (loss) from continuing operations		1,296			(742	)		617			71
Other income (expense):
Other income		533			1,527			701			902
Other expense		(104	)		(191	)		(4	)		(73	)
Total other income (expenses)		429			1,336			697			829
Income from continuing operations before income taxes		1,725			594			1,314			900
Income tax (benefit) expense		631			138			378			286
Income from continuing operations		1,094			456			936			614
Income from discontinued operations, net of income taxes		1,087			1,401			1,068			1,779
Net income		2,181			1,857			2,004			2,393
Less: net income (loss) attributable to noncontrolling interests		(6	)		70			13			(18	)
Net income attributable to Sushi Ginza Onodera, Inc.	$	2,187		$	1,787		$	1,991		$	2,411

Income per common share attributable to Sushi Ginza Onodera, Inc. – basic:
Continuing operations	$	0.16		$	0.06		$	0.13		$	0.09
Discontinued operations		0.15			0.20			0.15			0.25
Net income per share - basic	$	0.31		$	0.26		$	0.28		$	0.34
Income per common share attributable to Sushi Ginza Onodera, Inc. – diluted:
Continuing operations	$	0.16		$	0.06		$	0.13		$	0.09
Discontinued operations		0.15			0.20			0.15			0.25
Net income per share - diluted	$	0.31		$	0.26		$	0.28		$	0.34
Weighted average common shares outstanding		6,999,999			6,999,999			7,000,000			6,999,999

Comprehensive income:
Net income	$	2,181		$	1,857		$	2,004		$	2,393
Other comprehensive income, net of tax
Foreign currency translation adjustment		188			492			(2,075	)		405
Other comprehensive income, net of tax		188			492			(2,075	)		405
Total comprehensive income		2,369			2,349			(71	)		2,798
Comprehensive income (loss) attributable to noncontrolling interests		(23	)		76			1			(43	)
Comprehensive income attributable to Sushi Ginza Onodera, Inc.	$	2,392		$	2,273		$	(72	)	$	2,841

(amounts in thousands)	As of September 30, 2023
	Actual			As Adjusted ⁽¹⁾
Balance Sheet Data:
Cash and cash equivalents	$	2,945		$
Total assets		23,932
Total liabilities		14,620
Accumulated deficit		(12,853	)
Total stockholder’s equity		9,312

⁽¹⁾	On an as adjusted basis to give effect to the sale by us of shares of common stock at an assumed public offering price of $ per share in this offering, which is the midpoint of the price range set forth on the cover of this prospectus.

	Fiscal Years Ended March 31,						Six Months Ended September 30,
	2023			2022			2023			2022
Key Financial and Operational Metrics:
Restaurants at the end of period		13			12			13			13
Average Unit Volumes ⁽¹⁾(amount in thousands)	$	1,747		$	1,832		$	N/A		$	N/A
Revenue per square foot ⁽²⁾	$	1,132		$	1,090		$	-		$	-
Comparable restaurant sales growth⁽³⁾		(4.6	)%		26.3	%		22.4	%		(10.7	)%
EBITDA⁽⁴⁾(amount in thousands)	$	2,391		$	1,271		$	1,438		$	1,261
Operating income (amount in thousands)	$	1,296		$	(742	)	$	617		$	71
Operating profit margin		6.3	%		-	%		5.2	%		0.8	%

(1)

Average Unit Volumes (AUVs) consist of the average annual sales of all restaurants that have been open for 18 months or longer at the end of the fiscal year presented. AUVs are calculated by dividing (x) annual sales for the fiscal year presented for all such restaurants by (y) the total number of restaurants in that base. The AUVs measure is calculated excluding one restaurant, which closed in the year ended March 31, 2021 and one restaurant, which closed in the year ended March 31, 2022 and one restaurant, which closed in the six months ended September 30, 2023 (Discontinued operations). Since AUVs are calculated based on annual sales for the fiscal year presented, they are not presented in this prospectus on an interim basis, if any.

(2)	Revenue Per Square Foot represents the average annual restaurant sales for all restaurants opened a full 18 months before the end of the period measured divided by average square footage of all such restaurants.

(3)	Comparable restaurant sales growth represents the change in year-over-year sales for restaurants open for at least 18 months prior to the start of the accounting period presented. The comparable restaurant sales growth measure is calculated excluding one restaurant, which closed in the year ended March 31, 2021 and one restaurant, which closed in the year ended March 31, 2022 and one restaurant, which closed in the six months ended September 30, 2023.

(4)

EBITDA is a non-GAAP financial measure and is not intended to replace net income (loss) as determined in accordance with GAAP. EBITDA is intended as a supplemental measure of our performance that is neither required by, nor presented in accordance with, GAAP. We are presenting EBITDA because we believe that they provide useful information to management and investors regarding certain financial and business trends relating to our financial condition and operating results.

EBITDA is calculated as net income before interest expense, provision (benefit) for income taxes and depreciation and amortization.

We believe that the use of EBITDA provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing the Company’s financial measures with those of comparable companies, which may present similar non-GAAP financial measures to investors. In addition, you should be aware when evaluating EBITDA that in the future we may incur expenses similar to those excluded when calculating these measures. Our presentation of these measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Our computation of EBITDA may not be comparable to other similarly titled measures computed by other companies, because all companies may not calculate EBITDA in the same fashion.

●

EBITDA do not reflect our capital expenditures or future requirements for capital expenditures;

●

EBITDA do not reflect interest expense or the cash requirements necessary to service interest or principal payments associated with our indebtedness;

●

EBITDA do not reflect depreciation and amortization, which are non-cash charges, although the assets being depreciated and amortized will likely have to be replaced in the future, and do not reflect cash requirements for such replacements;

●

other companies in our industry may calculate these measures differently, limiting their usefulness as comparative measures.

The following table presents a reconciliation of net income to EBITDA:

(amounts in thousands)	Fiscal Years Ended March 31,				Six Months Ended September 30,
	2023		2022		2023		2022
Net income, as reported	$	1,094	$	456	$	936	$	614
Interest expense		-		-		3		-
Interest expenses to related parties		64		68		1		33
Taxes		631		138		378		286
Depreciation and amortization		602		609		120		328

EBITDA		2,391		1,271		1,438		1,261

RISK FACTORS

An investment in our securities carries a significant degree of risk. You should carefully consider the following risks, as well as the other information contained in this prospectus, including our historical financial statements and related notes included elsewhere in this prospectus, before you decide to purchase our securities. Any one of these risks and uncertainties has the potential to cause material adverse effects on our business, prospects, financial condition and operating results which could cause actual results to differ materially from any forward-looking statements expressed by us and a significant decrease in the value of our common shares. Refer to “Special Note Regarding Forward-Looking Statements.”

We may not be successful in preventing the material adverse effects that any of the following risks and uncertainties may cause. These potential risks and uncertainties may not be a complete list of the risks and uncertainties facing us. There may be additional risks and uncertainties that we are presently unaware of, or presently consider immaterial, that may become material in the future and have a material adverse effect on us. You could lose all or a significant portion of your investment due to any of these risks and uncertainties.

Risks Related to Our Business and Industry

Our long-term success is highly dependent on our ability to successfully identify and secure appropriate sites and timely develop and expand our operations in existing and new markets.

One of the key means of achieving our growth strategies will be through opening and operating new restaurants on a profitable basis for the foreseeable future. We opened three new restaurants in the year ended March 31, 2022 and one new restaurant in the year ended March 31, 2023. We plan to open three new restaurants in the year ending March 31, 2024. We identify target markets where we can enter or expand, taking into account numerous factors such as the locations of our current restaurants, demographics, traffic patterns and information gathered from various sources. We may not be able to open our planned new restaurants within budget or on a timely basis, if at all, given the uncertainty of these factors, which could adversely affect our business, financial condition and results of operations. As we operate more restaurants, our rate of expansion relative to the size of our restaurant base will eventually decline.

The number and timing of new restaurants opened during any given period may be negatively impacted by a number of factors including, without limitation:

●

identification and availability of locations with the appropriate size, traffic patterns, local retail and business attractions and infrastructure that will drive high levels of guest traffic and sales per unit;

●

competition in existing and new markets, including competition for restaurant sites;

●

the ability to negotiate suitable lease terms;

●

the lack of development and overall decrease in commercial real estate due to a macroeconomic downturn;

●

recruitment and training of qualified personnel in the local market;

●

our ability to obtain all required governmental permits, including zonal approvals, on a timely basis;

●

our ability to control construction and development costs of new restaurants;

●

landlord delays;

●

the proximity of potential sites to an existing restaurant, and the impact of cannibalization on future growth;

●

anticipated commercial, residential and infrastructure development near our new restaurants; and

●

the cost and availability of capital to fund construction costs and pre-opening costs.

Accordingly, we cannot assure you that we will be able to successfully expand as we may not correctly analyze the suitability of a location or anticipate all of the challenges imposed by expanding our operations. Our growth strategy, and the substantial investment associated with the development of each new restaurant, may cause our operating results to fluctuate and be unpredictable or adversely affect our business, financial condition or results of operations. If we are unable to expand in existing markets or penetrate new markets, our ability to increase our sales and profitability may be materially harmed or we may face losses.

Our restaurant base is geographically concentrated in Japan, USA and China, and we could be negatively affected by conditions specific to these areas.

100% of our restaurants are located in Japan, USA and China. Adverse changes in demographic, unemployment, economic, regulatory or weather conditions in Japan, USA and China have had, and may continue to have, material adverse effects on our business, financial condition or results of operations. As a result of our concentration in these markets, we have been, and in the future may be, disproportionately affected by adverse conditions in either of these markets compared to other chain restaurants with a national footprint.

Our expansion into new markets may present increased risks due in part to our unfamiliarity with the areas and also due to consumer unfamiliarity with our Kaiten Sushi concept and may make our future results unpredictable.

As of December 27, 2023, we operate our restaurants in Tokyo, Kyoto, California, Hawaii and Shanghai. We plan to continue to increase the number of our restaurants in the next several years as part of our expansion strategy. We may in the future open restaurants in markets where we have little or no operating experience. This growth strategy and the substantial investment associated with the development of each new restaurant may cause our operating results to fluctuate and be unpredictable or adversely affect our business, financial condition or results of operations. Restaurants we open in new markets may take longer to reach expected sales and profit levels on a consistent basis and may have higher construction, occupancy or operating costs than restaurants we open in existing markets, thereby affecting our overall profitability. New markets may have competitive conditions, consumer tastes and discretionary spending patterns that are more difficult to predict or satisfy than our existing markets and there may be little or no market awareness of our brand in these new markets. We may need to make greater investments than we originally planned in advertising and promotional activity in new markets to build brand awareness. We also may find it more difficult in new markets to hire, motivate and keep qualified employees who share our vision, passion and business culture. If we do not successfully execute our plans to enter new markets, our business, financial condition or results of operations could be materially adversely affected.

New restaurants, once opened, may not be profitable, and the increases in average restaurant sales and comparable restaurant sales that we have experienced in the past may not be indicative of future results.

Our new restaurants have historically tended to gain recognition and sales as the number of months in operation increases, with no “honeymoon” period during which sales generally rise at the time of opening. In new markets, the length of time before average sales for new restaurants stabilize is less predictable as a result of our limited knowledge of these markets and consumers’ limited awareness of our brand. First quarter sales for the three stores opened in the year ended March 31, 2022 increased 71.8% in the second year compared to the same period in the first year. However, new restaurants in the future may not be profitable, and their sales performance may not follow historical patterns. In addition, our average restaurant sales and comparable restaurant sales may not increase at the rates achieved over the past several years. Our ability to operate new restaurants profitably and increase average restaurant sales and comparable restaurant sales will depend on many factors, some of which are beyond our control, including:

●

consumer awareness and understanding of our brand and our Kaiten sushi concept;

●

general economic conditions, which can affect restaurant traffic, local labor costs and prices we pay for the food products and other supplies we use;

●

changes in consumer preferences and discretionary spending;

●

competition, either from our competitors in the restaurant industry or our own restaurants;

●

temporary and permanent site characteristics of new restaurants; and

●

changes in government regulation.

If our new restaurants do not perform as planned, our business and future prospects could be harmed. In addition, if we are unable to achieve our expected average restaurant sales, our business, financial condition or results of operations could be adversely affected.

Our sales and profit growth could be adversely affected if comparable restaurant sales are less than we expect.

The level of comparable restaurant sales growth, which represents the change in year-over-year sales for restaurants open for at least 18 months, could affect our sales growth. Our ability to increase comparable restaurant sales depends in part on our ability to successfully implement our initiatives to build sales. It is possible such initiatives will not be successful, that we will not achieve our target comparable restaurant sales growth or that the change in comparable restaurant sales could be negative, which may cause a decrease in our profitability and would materially adversely affect our business, financial condition or results of operations. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Comparable Restaurant Sales Growth.”

Our failure to manage our growth effectively could harm our business and operating results.

Our growth plan includes opening new restaurants. Our existing restaurant management systems, financial and management controls and information systems may be inadequate to support our planned expansion. Managing our growth effectively will require us to continue to enhance these systems, procedures and controls and to hire, train and retain managers and team members. We may not respond quickly enough to the changing demands that our expansion will impose on our management, restaurant teams and existing infrastructure which could harm our business, financial condition or results of operations.

Our limited number of restaurants, the significant expense associated with opening new restaurants, and the unit volumes of our new restaurants make us susceptible to significant fluctuations in our results of operations.

As of December 27, 2023, we operate thirteen restaurants. We opened three new restaurants in the year ended March 31, 2022 and one new restaurant in the year ended March 31, 2023. We plan to open three new restaurants in the year ending March 31, 2024. The capital resources required to develop each new restaurant are significant. The cost of store investment varies greatly depending on the type, size and location of the store. The average investment in the four new stores opened between 2021 and 2022 was approximately $0.5 million. The investment amount of the Kaiten Sushi Kyoto store, which opened in July 2023, is about 1.7 million dollars. Actual costs may vary significantly depending upon a variety of factors, including the site and size of the restaurant and conditions in the local real estate and labor markets. The combination of our relatively small number of existing restaurants, the significant investment associated with each new restaurant, variance in the operating results in any one restaurant, or a delay or cancellation in the planned opening of a restaurant could materially affect our business, financial condition or results of operations. We have closed some restaurants in the past, and we may continue to close stores that we deem unprofitable after opening.

Difficulties recruiting, training and retaining sushi artisans could adversely affect our business.

Our ability to grow our business through planned expansion in the number of restaurants we operate depends in large part on our ability to recruit, train and retain sushi artisans for such restaurants. The sushi industry has a high turnover rate, and it is very difficult to nurture artisans. Generally, it is said that sushi artisans need more than 10 years of training before they can make sushi, and many young apprentices cannot endure a long period of training and quit halfway through. Although we intend to mitigate this situation through the reopening of the Ginza Onodera Sushi Academy in October 2023 to educate and recruit future sushi artisans from an early stage as well as training our own sushi artisans, there is no assurance we will be successful in recruiting, training and retaining a sufficient number of sushi artisans to support our existing restaurants as well as our future restaurants from our planned expansion.

In the sushi industry, competition for qualified sushi artisans is intense and we may be unable to identify and recruit a sufficient number of sushi artisans to meet our growing needs, especially in markets where our brand is less established. As a result, because we aim to hire the best sushi artisans, we may be required to pay higher wages and provide greater benefits. Our commitment to taking care of our sushi artisans may cause us to incur higher labor costs compared to other restaurant companies. Additionally, as for our restaurants in the United States, several states in which we operate have enacted minimum wage increases and it is possible that other states or the federal government could also enact minimum wage increases, scheduling and benefit changes and increased health care and workers’ compensation insurance costs. Such increases have and may continue to cause an increase to our labor and related expenses and cause the operating profit margins of our restaurants to decline. In the event there are additional minimum wage increases, increases in employee turnover or other legislation related to employee benefits are enacted or changed, such as the Affordable Care Act, we may be required to implement additional pay increases or provide additional benefits in the future in order to continue to recruit, reward and retain the most qualified sushi artisans, which may put further pressure on our operating margins by increasing costs. Overall, we expect wages at all levels to continue to increase in the near term and we expect these rising wages to add pressure to our operating profit.

In addition to the expected increased costs of labor, if we are unable to identify and recruit a sufficient number of sushi artisans to meet our growing needs, we may need to decrease the operating hours of some of our restaurants, which would result in lost sales.

We place a heavy emphasis on the qualification and training of our sushi artisans and spend a significant amount of time and money training them. Any inability to recruit and retain qualified sushi artisans may result in higher turnover and increased labor costs, and could compromise the quality of our service, all of which could adversely affect our business. Any such inability could also delay the planned openings of new restaurants and could adversely impact our existing restaurants. Such increased costs of attracting qualified sushi artisans or delays in restaurant openings could adversely affect our business, financial condition and results of operations.

A decline in visitors to any of the urban city centers where our restaurants are located could negatively affect our restaurant sales.

Our restaurants are primarily located along the street in high-activity areas such as an urban city center. We depend on high visitor rates at these centers to attract guests to our restaurants. Factors that may result in declining visitor rates include economic or political conditions, anchor tenants closing in retail centers or shopping malls in which we operate, changes in consumer preferences or shopping patterns, changes in discretionary consumer spending, increasing petroleum prices, or other factors, which may adversely affect our business, financial condition or results of operations.

We have historically received strategic, operational and financial support from Onodera Group Co., Ltd. and affiliated companies, and as we increase our independence from Onodera Group, we may face difficulties replacing certain services, supplies and financial assistance Onodera Group has provided to us.

Our operating subsidiaries have been subsidiaries of Onodera Group since 2013 and have benefited from our relationship as a consolidated and wholly owned subsidiaries. Being wholly owned subsidiaries of Onodera Group has affected the way we operate and manage our business and we are dependent on Onodera Group and its affiliates (including LEOC Co., Ltd., our parent company) for certain strategic, operational and financial support. Because we have no independent operating history, our historical results may not be indicative of our future performance. Our future results depend on various factors, including those identified in these risk factors.

In addition, Onodera Food Service Co., Ltd. provides operational guidance by providing its expertise and know-how to two affiliates in the United States and one in Shanghai. In return, Onodera Food Service Co., Ltd. collects a monthly management guidance fee.

Onodera Food Service Co., Ltd. is a subsidiary of Sushi Ginza Onodera, Inc., and holds the “Ginza Onodera” trademark rights. LEOC Co., Ltd., currently holds 100% of the shares of Sushi Ginza Onodera, Inc., however, LEOC Co., Ltd. will hold ________% of the shares after this offering. As a result, LEOC Co., Ltd. will continue to be a major shareholder of the Company, and Onodera Food Service Co., Ltd. is expected to maintain its influence on the strategic direction of the Company as a whole while operating more independently.

With these changes and developments, Onodera Food Service Co., Ltd. is expected to be able to carry out a wider range of operations on its own and gain further advantage in its domestic and overseas business development and growth. In addition, the Company’s efforts to enhance integration and efficiency as a whole are expected to lead to sustained development and enhanced competitiveness.

We are also highly dependent on LEOC Co., Ltd., our parent company, to provide labor to us to meet our workforce requirements as the temporarily assigned employees from LEOC Co., Ltd. make up 211 of the 271 employees who work for us as of the date of this prospectus. Our Chief Executive Officer and Chief Administrative Officer were previously employed by LEOC and both were appointed to their respective positions by LEOC Co., Ltd. to lead the operation of our existing businesses in Japan and United States. Our success depends upon LEOC Co., Ltd.’s ability to attract and retain qualified personnel who possess the skills and experience necessary to meet our staffing requirements. LEOC Co., Ltd. must continually evaluate and upgrade its base of available qualified personnel to keep pace with our needs. Furthermore, a substantial number of LEOC Co., Ltd.’s temporary employees during any given year may terminate their employment with LEOC Co., Ltd. and accept regular staff employment with other companies. Competition for individuals, especially qualified sushi artisan personnel, with proven skills remains intense, and demand for these individuals is expected to remain strong for the foreseeable future. There can be no assurance that qualified personnel will continue to be available to LEOC Co., Ltd. in sufficient numbers to support our existing restaurants and/or our opening new restaurants as we intend to expand. If LEOC Co., Ltd. is unable to attract the necessary qualified personnel for us, it may have a negative impact on our business, financial condition and results of operations.

Following this offering, we expect that LEOC Co., Ltd. will own approximately ____% of the combined voting power of our common stock if all the common stock being offered hereby are sold (or ___% of our outstanding voting power if the underwriters’ option to purchase additional shares is exercised in full). LEOC Co., Ltd. is not subject to any contractual obligation to maintain its ownership position in our shares, except that it has agreed not to sell or otherwise dispose of any of our common stock for a period ending one year after the date of the final prospectus without the prior written consent of the representatives of the underwriters as described in “—Risks Related to Our Organizational Structure—Future sales of our shares by LEOC Co., Ltd. could depress our common stock price.” If LEOC Co., Ltd.’s ownership interest in our Company declines significantly in the future, this may affect our ongoing relationship. LEOC Co., Ltd. does not have any contractual obligation to provide strategic, operational or other support to us except as required under the Business Support Agreement between LEOC Co., Ltd. and our subsidiary, Onodera Food Service Co., Ltd. See “Certain Relationships and Related Party Transactions” for additional information. We do not license any specific intellectual property related to our business, except for the “Ginza Onodera” trademark rights owned by our subsidiary, Onodera Food Service Co., Ltd. This licensing arrangement is unwritten (verbal) without specific terms.

As a final example, historically, we have relied on financial support from Onodera Group Co., Ltd. Onodera Group provided approximately $9 million in loans in the year ended March 31, 2022 and approximately $23 million in past debt settlement by shares in the year ended March 31, 2023. In the year ending March 31, 2024, Onodera Group will provide approximately $3.5 million in additional loans to fund the anticipated transition to public company status as of this offering and Kaiten Sushi Hawaii facilities. Upon completion of this offering, our company will not receive additional funding from Onodera Group and will use other available sources of liquidity, as further described below.

Opening new restaurants in existing markets may negatively affect sales at our existing restaurants.

The consumer target area of our restaurants varies by location, depending on a number of factors, including population density, other local retail and business attractions, area demographics and geography. As a result, the opening of a new restaurant in or near markets in which we already have restaurants could adversely affect the sales of these existing restaurants and thereby adversely affect our business, financial condition or results of operations. Existing restaurants could also make it more difficult to build our consumer base for a new restaurant in the same market. Our core business strategy does not entail opening new restaurants that we believe will materially affect sales at our existing restaurants, but we may selectively open new restaurants in and around areas of existing restaurants that are operating at or near capacity to effectively serve our guests. Sales cannibalization between our restaurants may become significant in the future as we continue to expand our operations and could affect our sales growth, which could, in turn, materially adversely affect our business, financial condition or results of operations.

Operating results at our restaurants could be significantly affected by competition in the restaurant industry in general and, in particular, within the dining segments of the restaurant industry in which we compete.

We face significant competition from a variety of restaurants offering both Asian and non-Asian cuisine, as well as takeout offerings from grocery stores and other outlets where Asian food is sold. These segments are highly competitive with respect to, among other things, product quality, dining experience, ambience, location, convenience, value perception, and price. Our competition continues to intensify as competitors increase the breadth and depth of their product offerings and open new locations. These competitors may have, among other things, chefs who are widely known to the public that may generate more notoriety for those competitors as compared to our brand. We also compete with many restaurants and retail establishments for site locations and restaurant-level employees.

Several of our competitors offering Asian and related choices may look to compete with us on price, quality and service. Any of these competitive factors may materially adversely affect our business, financial condition or results of operations.

Negative publicity relating to one of our restaurants could reduce sales at some or all of our other restaurants.

Our success is dependent in part upon our ability to maintain and enhance the value of our brand and consumers’ connection to our brand. We may, from time to time, be faced with negative publicity relating to food quality, restaurant facilities, guest complaints or litigation alleging illness or injury, health inspection scores, integrity of our or our suppliers’ food processing, employee relationships or other matters, regardless of whether the allegations are valid or whether we are held to be responsible. The negative impact of adverse publicity relating to one restaurant may extend far beyond the restaurant involved to affect some or all of our other restaurants, thereby causing an adverse effect on our business, financial condition or results of operations. A similar risk exists with respect to unrelated food service businesses, if consumers associate those businesses with our own operations.

The considerable expansion in the use of social media over recent years can further amplify any negative publicity that could be generated by such incidents. Many social media platforms immediately publish the content their subscribers and participants post, often without filters or checks on accuracy of the content posted. Information posted on such platforms may be adverse to our interests and/or may be inaccurate. The dissemination of inaccurate or irresponsible information online could harm our business, reputation, prospects, financial condition, or results of operations, regardless of the information’s accuracy. The damage may be immediate without affording us an opportunity for redress or correction.

Additionally, employee claims against us based on, among other things, wage and hour violations, discrimination, harassment or wrongful termination may also create negative publicity that could adversely affect us and divert our financial and management resources that would otherwise be used to benefit the future performance of our operations. A significant increase in the number of these claims or an increase in the number of successful claims could materially adversely affect our business, financial condition or results of operations. Consumer demand for our restaurants and our brand’s value could diminish significantly if any such incidents or other matters create negative publicity or otherwise erode consumer confidence in us or our restaurants, which would likely result in lower sales and could materially adversely affect our business, financial condition or results of operations.

New information or attitudes regarding diet and health could result in changes in regulations and consumer consumption habits that could adversely affect our business, financial condition or results of operations.

Changes in attitudes regarding diet and health or new information regarding the adverse health effects of consuming certain foods could result in changes in government regulation and consumer eating habits that may impact our business, financial condition or results of operations. These changes have resulted in, and may continue to result in, laws and regulations requiring us to disclose the nutritional content of our food offerings, and they have resulted in, and may continue to result in, laws and regulations affecting permissible ingredients and menu offerings. For example, a number of jurisdictions have enacted menu labeling laws requiring multi-unit restaurant operators to disclose to consumers certain nutritional information or have enacted legislation restricting the use of certain types of ingredients in restaurants. These requirements may be different or inconsistent with requirements we are subject to under the Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act, collectively, the “ACA,” which establishes a uniform, federal requirement for certain restaurants to post nutritional information on their menus. Specifically, the ACA requires chain restaurants with 20 or more locations operating under the same name and offering substantially the same menus to publish the total number of calories of standard menu items on menus and menu boards, along with a statement that puts this calorie information in the context of a total daily calorie intake. The ACA also requires covered restaurants to provide to consumers, upon request, a written summary of detailed nutritional information for each standard menu item, and to provide a statement on menus and menu boards about the availability of this information upon request. Unfavorable publicity about, or guests’ reactions to, our menu ingredients, the size of our portions or the nutritional content of our menu items could negatively influence the demand for our offerings, thereby adversely affecting our business, financial condition or results of operations.

Compliance with current and future laws and regulations regarding the ingredients and nutritional content of our menu items may be costly and time-consuming. Additionally, if consumer health regulations or consumer eating habits change significantly, we may be required to modify or discontinue certain menu items, and we may experience higher costs associated with the implementation of those changes, as well as adversely affect the attractiveness of our restaurants to new or returning guests. We cannot predict the impact of any new nutrition labeling requirements. The risks and costs associated with nutritional disclosures on our menus could also impact our operations, particularly given differences among applicable legal requirements and practices within the restaurant industry with respect to testing and disclosure, ordinary variations in food preparation among our own restaurants, and the need to rely on the accuracy and completeness of nutritional information obtained from third-party suppliers.

We may not be able to effectively respond to changes in consumer health perceptions or successfully implement the nutrient content disclosure requirements and to adapt our menu offerings to trends in eating habits. The imposition of menu labeling laws and an inability to keep up with consumer eating habits could materially adversely affect our business, financial condition or results of operations, as well as our position within the restaurant industry in general.

If we are unable to maintain or increase prices, our margins may decrease.

We strive to use high-quality ingredients that are often more costly than lower quality ingredients and/or ingredients that are farmed through less environmentally conscious methods. Our continued success depends on our ability to persuade our guests that the variety and choice of quality food that we provide is worth the higher prices compared to eating at many of our competitors. If we are unable to persuade our guests about the quality of our food, we may be required to change our pricing, advertising, or promotional strategies to retain existing guests or attract new guests, which could adversely affect the strength of our brand and our business, financial condition, and results of operations.

We rely in part on price increases from time to time to offset cost increases, including the cost of ingredients, commodities, insurance, labor, marketing, taxes, real estate and other key operating costs, and improve the profitability of our business. We have increased the prices of our food over the past few years, and we expect to further increase prices in the future. Our ability to maintain prices or effectively implement price increases may be affected by a number of factors, including competition, the effectiveness of our marketing programs, the continuing strength of our brand, and general economic conditions, including inflationary pressures. During challenging economic times, consumers may be less willing or able to dine out, making it more difficult for us to maintain prices and/or effectively implement price increases. In addition, increasing prices could negatively affect the loyalty of our existing guest base and cause them to reduce their spending with us or impact our ability to attract new guests, particularly as we expand our footprint into new geographies where guests might have greater price sensitivity. If our price increases are not accepted by guests and reduce sales volume, or are insufficient to offset increased costs, our business, financial condition, and results of operations could be adversely affected.

We are subject to all of the risks associated with leasing space subject to long-term non-cancelable leases.

We do not own any real property. Payments under our operating leases account for a significant portion of our operating expenses and we expect the new restaurants we open in the future will similarly be leased. The majority of our operating leases have lease terms of within ten years, inclusive of customary extensions which are the option of the Company. Most of our leases require a fixed annual rent which generally increases each year. Generally, our leases are “net” leases, which require us to pay all of the cost of insurance, taxes, maintenance and utilities. We generally cannot cancel these leases. Additional sites that we lease are likely to be subject to similar long-term non-cancelable leases. If an existing or future restaurant is not profitable, and we decide to close it, we may nonetheless be committed to perform our obligations under the applicable lease including, among other things, paying the base rent for the balance of the lease term. In addition, as each of our leases expires, we may fail to negotiate renewals, either on commercially acceptable terms or at all, which could cause us to pay increased occupancy costs or to close restaurants in desirable locations. If we fail to negotiate renewals, we may have to dispose of assets at such restaurant locations and incur closure costs as well as impairment of property and equipment. Furthermore, if we fail to negotiate renewals, we may incur additional costs associated with moving transferable furniture, fixtures and equipment. This potential increased occupancy and moving costs, as well as closures of restaurants, could materially adversely affect our business, financial condition or results of operations.

Macroeconomic conditions, including economic downturns, may cause landlords of our leases to be unable to obtain financing or remain in good standing under their existing financing arrangements, resulting in failures to pay required tenant improvement allowances or satisfy other lease covenants to us. In addition, tenants at shopping centers in which we are located or have executed leases, or to which our locations are near, may fail to open or may cease operations. Decreases in total tenant occupancy in shopping centers in which we are located, or to which our locations are near, may affect traffic at our restaurants. All of these factors could have a material adverse impact on our business, financial condition or results of operations.

We rely significantly on the operation of our Kaiten Sushi conveyor belts, sushi robots and other automated equipment, and any mechanical failure could prevent us from effectively operating our restaurants.

We operate restaurants that cater to a wide range of needs, from high-class restaurants to reasonably priced Kaiten Sushi Ginza Onodera. While high-class restaurants do not rely on equipment, Kaiten Sushi Ginza Onodera relies on automated equipment such as the compact-shari machine, gunkan-maki machine, roll sushi making machine, automatic rice and vinegar mixer, express lanes, touch screen menus and any mechanical failure could prevent us from effectively operating our restaurants. Our ability to safely, efficiently and effectively manage our restaurants depends significantly on the reliability and capacity of these systems. Mechanical failures and our inability to service such equipment in a timely manner could result in delays in customer service and reduce the efficiency of our restaurant operations, including a loss of sales. Remediation of such problems could result in significant, unplanned capital investments and any equipment failure may have an adverse effect on our business, financial condition or results of operations due to our reliance on such equipment.

We rely significantly on information technology, and any material failure, weakness, interruption or breach of security could prevent us from effectively operating our business.

We rely significantly on information systems, including point-of-sale processing in our restaurants for management of our supply chain, payment of obligations, collection of cash, credit and debit card transactions and other processes and procedures. We also operate tableside access to touch screen ordering systems to allow guests to place special orders. Our ability to efficiently and effectively manage our business depends significantly on the reliability and capacity of these systems. Failures of these systems to operate effectively, maintenance problems, upgrading or transitioning to new platforms, or a breach in the security of these systems could result in delays in customer service and reduce efficiency in our operations. Remediation of such problems could result in significant, unplanned capital investments.

Our marketing programs may not be successful, and our new menu items, advertising campaigns and restaurant designs and remodels may not generate increased sales or profits.

We incur costs and expend other resources in our marketing efforts on new menu items, advertising campaigns and restaurant designs and remodels to raise brand awareness and attract and retain guests. These initiatives may not be successful, resulting in expenses incurred without the benefit of higher sales. Additionally, some of our competitors have greater financial resources, which enables them to spend significantly more on marketing and advertising and other initiatives than we are able to. Should our competitors increase spending on marketing and advertising and other initiatives, or our marketing funds decrease for any reason, or should our advertising, promotions, new menu items and restaurant designs and remodels be less effective than our competitors, there could be a material adverse effect on our business, financial condition or results of operations.

Our inability or failure to recognize, respond to and effectively manage the accelerated impact of social media could materially adversely impact our business, financial condition or results of operations.

Our marketing efforts rely heavily on the use of social media. In recent years, there has been a marked increase in the use of social media platforms, including weblogs (blogs), mini-blogs, chat platforms, social media websites, and other forms of Internet-based communications which allow individuals access to a broad audience of consumers and other interested persons. Many of our competitors are expanding their use of social media, and new social media platforms are rapidly being developed, potentially making more traditional social media platforms obsolete. As a result, we need to continuously innovate and develop our social media strategies in order to maintain broad appeal with guests and brand relevance. We also continue to invest in other digital marketing initiatives that allow us to reach our guests across multiple digital channels and build their awareness of, engagement with, and loyalty to our brand. These initiatives may not be successful, resulting in expenses incurred without the benefit of higher sales or increased brand recognition.

Our current insurance may not provide adequate levels of coverage against claims.

There are types of losses we may incur that cannot be insured against or that we believe are not economically reasonable to insure. Such losses could have a material adverse effect on our business, financial condition or results of operations. In addition, our current insurance policies may not be adequate to protect us from liabilities that we incur in our business in areas such as workers’ compensation, general liability, auto and property. In the future, our insurance premiums may increase, and we may not be able to obtain similar levels of insurance on reasonable terms, or at all. Any substantial inadequacy of, or inability to obtain, insurance coverage could materially adversely affect our business, financial condition and results of operations. As a public company, we intend to adjust our existing directors’ and officers’ insurance. While we expect to obtain such coverage, we may not be able to obtain such coverage at all or at a reasonable cost now or in the future. Failure to obtain and maintain adequate directors’ and officers’ insurance would likely adversely affect our ability to attract and retain qualified officers and directors.

Failure to obtain and maintain required licenses and permits or to comply with alcoholic beverage or food control regulations could lead to the loss of our liquor and food service licenses and, thereby, harm our business, financial condition or results of operations.

The restaurant industry is subject to various federal, state and local government regulations, including those relating to the sale of food and alcoholic beverages. You are required to obtain an Eigyo Kyoka (Business Permit), as stipulated in the Food Sanitation Act, in order to open a restaurant in Japan. The purpose of the Food Sanitation Act is to prevent the sanitation hazards resulting from eating and drinking by enforcing the regulations and other measures necessary, from the viewpoint of public health, to ensure food safety and thereby to protect citizens’ good health. Such regulations are subject to change from time to time. The failure to obtain and maintain licenses, permits and approvals relating to such regulations could adversely affect our business, financial condition or results of operations. Typically, licenses must be renewed annually and may be revoked, suspended or denied renewal for cause at any time if governmental authorities determine that our conduct violates applicable regulations. Difficulties or failure to maintain or obtain the required licenses and approvals could adversely affect our existing restaurants and delay or result in our decision to cancel the opening of new restaurants, which would adversely affect our business, financial condition or results of operations.

Our restaurants sell liquor in Japan, and we are subject to laws and regulations for liquor retailing. The Liquor Tax Act (Act No.6 of February 28, 1953, as amended) imposes tax on liquor and stipulates tax thresholds and tax rates according to types of liquor, etc. In order to operate the business of selling liquor, the operator shall, pursuant to Article 9 of this act, obtain a license for selling liquor. The license remains in effect until it is revoked by the relevant governmental authority. We have duly obtained and maintain such licenses for each of our directly-operated physical restaurants which sell liquor in Japan. We are prohibited from selling liquor to minors (under 20 years old) under Minor Drinking Prohibition Act (Act No. 20 of March 30, 1922, as amended), and must check the ID of customers if they appear to be under 20 years old.

Alcoholic beverage control regulations generally require our restaurants to apply to a state authority and, in certain locations, county or municipal authorities for a license that must be renewed annually and may be revoked or suspended for cause at any time. Alcoholic beverage control regulations relate to numerous aspects of daily operations of our restaurants, including minimum age of patrons and employees, hours of operation, advertising, trade practices, wholesale purchasing, other relationships with alcohol manufacturers, wholesalers and distributors, inventory control and handling, storage and dispensing of alcoholic beverages. Any future failure to comply with these regulations and obtain or retain liquor licenses could adversely affect our business, financial condition or results of operations.

If the benefits of any proposed acquisition do not meet the expectations of investors, stockholders or financial analysts, the market price of our common stock may decline.

If the benefits of any proposed acquisition do not meet the expectations of investors or securities analysts, the market price of our common stock prior to the closing of the proposed acquisition may decline. The market values of our common stock at the time of the proposed acquisition may vary significantly from their prices on the date the acquisition target was identified.

In addition, broad market and industry factors may materially harm the market price of our common stock irrespective of our operating performance. The stock market in general has experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected. The trading prices and valuations of these stocks, and of our securities, may not be predictable. A loss of investor confidence in the market for retail stocks or the stocks of other companies which investors perceive to be similar to us could depress our stock price regardless of our business, prospects, financial conditions or results of operations. A decline in the market price of our securities also could adversely affect our ability to issue additional securities and our ability to obtain additional financing in the future.

We may need capital in the future, and we may not be able to raise that capital on favorable terms.

Developing our business will require significant capital in the future. Historically, our main sources of liquidity have been operating cash flows and financing from parent Onodera Group Co., Ltd. Onodera Group provided approximately $9 million in loans in the year ended March 31, 2022 and approximately $23 million in past debt settlement by shares in the year ended March 31, 2023. In the year ending March 31, 2024, Onodera Group will provide approximately $3.5 million in additional loans to fund the anticipated transition to public company status as a result of this offering and Kaiten Sushi Hawaii facilities. After the completion of this offering, we do not expect to receive any additional capital contributions from Onodera Group Co., Ltd. For investment funds for new restaurants in Japan, we plan to borrow from Japanese financial institutions. On July 21, 2023, our subsidiary, Onodera Food Service Co., Ltd., entered into a 250 million yen ($1.7 million) overdraft agreement with Resona Bank, Ltd. and borrowed 210 million yen ($1.4 million) on July 25, 2023, and 40 million yen ($0.3 million) on August 31, 2023 to fund facilities for the Kaiten Sushi Kyoto restaurant. The Company also plans to borrow 280 million yen ($1.9 million) from Japanese financial institutions at an expected interest rate of approximately 0.8% to fund facilities for the Kaiten Sushi Osaka restaurant. The Company has not entered into agreements as of yet with regard to such anticipated loans with such Japanese financial institutions. These loans are planned to be repaid in 7 years from the earnings of the opened stores. There can be no assurance that the Company will enter into such agreements on the terms contemplated, if at all, or that any such loans will be repaid with such earnings and within the time period described in the preceding sentence. See “Use of Proceeds.” To meet our capital needs, we expect to rely on cash flows from operations, the proceeds from this offering, future offerings and other third-party financing. Third-party financing in the future may not, however, be available on terms favorable to us, or at all. Our ability to obtain additional funding will be subject to various factors, including market conditions, our operating performance, lender sentiment and our ability to incur additional debt in compliance with other contractual restrictions such as financial covenants under term loans or other debt documents. These factors may make the timing, amount, or terms and conditions of additional financing unattractive. Our inability to raise capital could impede our growth and could materially adversely affect our business, financial condition or results of operations.

Risks Related to Supply Chain

We rely significantly on certain vendors and suppliers, which could adversely affect our business, financial condition or results of operations.

Our ability to maintain consistent price and quality throughout our restaurants depends in part upon our ability to acquire specified food products and supplies in sufficient quantities from third-party vendors and suppliers at a reasonable cost. In addition, we are dependent upon a few suppliers for certain specialized equipment utilized in our restaurants. We rely on Yamayuki Co., Ltd. as one of our primary suppliers in Japan. Yamayuki Co., Ltd. provided us with food products, mostly fresh fish, equaling approximately 11.6% and 6.6% of our total food and beverage costs in the year ended March 31, 2023 and 2022, respectively. We rely on US Sakasyu, Inc. as one of our primary suppliers in the US. US Sakasyu, Inc. provided us with food products and fresh fish equaling approximately 9.4% and 7.1% of our total food and beverage costs for the year ended March 31, 2023 and 2022, respectively. We rely on Miaoxinmaiye Co., Ltd. as one of our primary suppliers in China. Miaoxinmaiye Co., Ltd. provided us with food products equaling approximately 3.2% and 5.7% of our total food and beverage costs in the year ended March 31, 2023 and 2022, respectively. We do not control the businesses of our vendors and suppliers and our efforts to specify and monitor the standards by which they perform may not be successful. Furthermore, certain food items are perishable, and we have limited control over whether these items will be delivered to us in appropriate condition for use in our restaurants. If any of our vendors or other suppliers are unable to fulfill their obligations to our standards, or if we are unable to find replacement providers in the event of a supply or service disruption, we could encounter supply shortages and incur higher costs to secure adequate supplies, which could materially adversely affect our business, financial condition or results of operations.

Changes in food and supply costs could adversely affect our business, financial condition or results of operations.

Our profitability depends in part on our ability to anticipate and react to changes in food and supply costs. Shortages or interruptions in the availability of certain supplies caused by unanticipated demand, problems in production or distribution, food contamination, inclement weather or other conditions could adversely affect the availability, quality and cost of our ingredients, which could harm our operations. Any increase in the prices of the food products most critical to our menu, such as rice, fish and other seafood, as well as fresh vegetables, could adversely affect our business, financial condition or results of operations. Although we try to manage the impact that these fluctuations have on our operating results, we remain susceptible to increases in food costs as a result of factors beyond our control, such as general economic conditions, seasonal fluctuations, weather conditions, demand, food safety concerns, generalized infectious diseases, product recalls and government regulations. In addition, our supply chain is subject to increased costs caused by the effects of climate change. Increasing weather volatility and changes in global weather patterns can reduce crop size and crop quality, which could result in decreased availability or higher pricing for our produce and other ingredients. These factors are beyond our control and, in many instances, unpredictable. Climate change and government regulation relating to climate change could also result in construction delays for new restaurants and interruptions to the availability or increases in the cost of utilities.

If any of our distributors or suppliers perform inadequately, or our distribution or supply relationships are disrupted for any reason, our business, financial condition, results of operations or cash flows could be adversely affected. If we cannot replace or engage distributors or suppliers who meet our specifications in a short period of time, that could increase our expenses and cause shortages of food and other items at our restaurants, which could cause a restaurant to remove items from its menu. If that were to happen, affected restaurants could experience significant reductions in sales during the shortage or thereafter, if guests change their dining habits as a result. In addition, because we provide moderately priced food, we may choose not to, or may be unable to, pass along commodity price increases to consumers. These potential changes in food and supply costs could materially adversely affect our business, financial condition or results of operations.

We may not be able to manage our manufacturing and supply chain effectively, which may adversely affect our results of operations.

There is risk in our ability to effectively scale production and processing and effectively manage our manufacturing and supply chain requirements. For example, we rely on a limited number of suppliers, and, in some cases, on single-source suppliers, for several ingredients. Some of these suppliers are small family-owned businesses or sole proprietors who may not be able to quickly scale their production to match our growth, or at all. As we continue to grow our business, if we are unable to obtain the desired amount of ingredients from these suppliers, we may be forced to modify our menu offerings or our recipes or obtain ingredients from different suppliers that may be at a higher cost or may be of a lower quality than our original ingredients. Any of these changes could result in changes to our food taste and quality and could be less appealing to our guests, and any increase in costs could have an adverse impact on our profitability and the results of operations. See “—Risks Related to Our Business and Industry — We rely significantly on certain vendors and suppliers, which could adversely affect our business, financial condition or results of operations.”

We must accurately forecast demand for each of our menu offerings to ensure that we have adequate available manufacturing capacity and supply. Our forecasts are based on multiple assumptions which may cause our estimates to be inaccurate and affect our ability to obtain adequate manufacturing capacity and quantities from our distributors, suppliers, and manufacturing partners in order to meet demand, which could prevent us from meeting partner and guest demand and harm our brand and our business.

We must also continuously monitor our inventory against forecasted demand. If we underestimate demand, we risk having inadequate supplies. On the other hand, if we have too much food inventory on hand, it may reach its expiration date and become unusable. If we are unable to manage our supply chain effectively, our operating costs could increase, and our profit margins could decrease.

Failure to receive frequent deliveries of fresh food ingredients and other supplies could harm our business, financial condition or results of operations.

Our ability to maintain our menu depends in part on our ability to acquire ingredients that meet our specifications from reliable suppliers. Shortages or interruptions in the supply of ingredients caused by unanticipated demand, problems in production or distribution, food contamination, inclement weather or other conditions could adversely affect the availability, quality and cost of our ingredients, which could harm our business, financial condition or results of operations. If any of our distributors or suppliers performs inadequately, or our distribution or supply relationships are disrupted for any reason, our business, financial condition or results of operations could be adversely affected. If we cannot replace or engage distributors or suppliers who meet our specifications in a short period of time, that could increase our expenses and cause shortages of food and other items at our restaurants, which could cause a restaurant to remove items from its menu. If that were to happen, affected restaurants could experience significant reductions in sales during the shortage or thereafter, if guests change their dining habits as a result. This reduction in sales could materially adversely affect our business, financial condition or results of operations.

Risks Related to Management and Employees

If the voting power of our capital stock continues to be highly concentrated, it may prevent you and other minority stockholders from influencing significant corporate decisions and may result in conflicts of interest.

Currently, Hiroshi Onodera indirectly beneficially owns through LEOC Co., Ltd., a Japanese corporation, an aggregate of 7,000,000 shares of our Common Stock, which represents 100% of the voting power of our outstanding capital stock. Following this offering, Mr. Onodera will control indirectly through LEOC Co., Ltd. approximately ______% of the voting power of our outstanding capital stock if all the Common Stock being offered are hereby sold (or ___% of our outstanding voting power if the underwriters’ option to purchase additional shares is exercised in full). As a result, Hiroshi Onodera will have majority voting power over all matters requiring stockholder votes, including: the election of directors; mergers, consolidations and acquisitions; the sale of all or substantially all of our assets and other decisions affecting our capital structure; amendments to our certificate of incorporation or our bylaws; and our winding up and dissolution.

This concentration of voting power may delay, deter or prevent acts that would be favored by our other stockholders. The interests of Hiroshi Onodera may not always coincide with our interests or the interests of our other stockholders. This concentration of voting power may also have the effect of delaying, preventing or deterring a change in control of us. Also, Hiroshi Onodera may seek to cause us to take courses of action that, in his judgment, could enhance his investment in us, but which might involve risks to our other stockholders or adversely affect us or our other stockholders, including investors in this offering. As a result, the market price of our common stock could decline, or stockholders might not receive a premium over the current market price of our common stock upon a change in control. In addition, this concentration of voting power may adversely affect the trading price of our common stock because investors may perceive disadvantages in owning shares in a company with significant stockholders. See “Executive and Director Compensation” and “Description of Securities.”

As a controlled company, we are not subject to all of the corporate governance rules of Nasdaq.

The “controlled company” exception to Nasdaq rules provides that a company of which more than 50% of the voting power is held by an individual, group or another company, a “controlled company,” need not comply with certain requirements of Nasdaq corporate governance rules. As of the date of this prospectus, Hiroshi Onodera indirectly beneficially owns through LEOC Co., Ltd., a Japanese corporation, an aggregate of 7,000,000 shares of our Common Stock, which represents 100% of the voting power of our outstanding capital stock. Following this offering, Mr. Onodera will control indirectly through LEOC Co., Ltd. approximately ______% of the voting power of our outstanding capital stock if all the Common Stock being offered are hereby sold (or ___% of our outstanding voting power if the underwriters’ option to purchase additional shares is exercised in full). If we obtain a listing on Nasdaq, we will be a “controlled company” within the meaning of the corporate governance rules of the Nasdaq. Controlled companies are exempt from Nasdaq’s corporate governance rules requiring that listed companies have (i) a majority of the Board of Directors consist of “independent” directors under the listing standards of Nasdaq, (ii) a nominating/corporate governance committee composed entirely of independent directors and a written nominating/corporate governance committee charter meeting the requirements of Nasdaq, and (iii) a compensation committee composed entirely of independent directors and a written compensation committee charter meeting the requirements of Nasdaq. We intend to utilize certain of these exemptions. More specifically, although we intend to have a majority of independent directors on our Board of Directors, we do not intend to have a nomination and corporate governance committee or a compensation committee. Accordingly, you may not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of Nasdaq. See “Management — Board Committees and Director Independence — Controlled Company and Director Independence.”

We depend on our senior management team and other key employees, and the loss of one or more key personnel or an inability to attract, hire, integrate and retain highly skilled personnel could have an adverse effect on our business, financial condition or results of operations.

Our success depends largely upon the continued services of our key executives. We also rely on our leadership team in setting our strategic direction, operating our business, identifying, recruiting and training key personnel, identifying expansion opportunities, arranging necessary financing, and for general and administrative functions. From time to time, there may be changes in our executive management team resulting from the hiring or departure of executives, which could disrupt our business. The loss or replacement of one or more of our executive officers or other key employees could have a serious adverse effect on our business, financial condition or results of operations.

To continue to execute our growth strategy, we also must identify, hire and retain highly skilled personnel, which may include the services of personnel who are Japanese expatriates whose services we secure due to our relationship with Onodera Group. We might not be successful in continuing to attract and retain qualified personnel. Failure to identify, hire and retain necessary key personnel could have a material adverse effect on our business, financial condition or results of operations.

Our management does not have experience managing a U.S. public company and our current resources may not be sufficient to fulfill our public company obligations.

Following the closing of this offering, we will be subject to various regulatory requirements, including those of the SEC and Nasdaq Stock Market. These requirements include recordkeeping, financial reporting and corporate governance rules and regulations. Our management team does not have experience in managing a U.S. public company and, historically, has not had the resources typically found in a public company. Our internal infrastructure may not be adequate to support our increased reporting obligations and we may be unable to hire, train or retain necessary staff and may be reliant on engaging outside consultants or professionals to overcome our lack of experience or employees. Our business, financial condition or results of operations could be adversely affected if our internal infrastructure is inadequate, including if we are unable to engage outside consultants or are otherwise unable to fulfill our public company obligations.

Labor disputes may disrupt our operations and affect our profitability, thereby causing a material adverse effect on our business, financial condition or results of operations.

As an employer, we are presently, and may in the future be, subject to various employment-related claims, such as individual or class actions or government enforcement actions relating to alleged employment discrimination, employee classification and related withholding, wage-hour, labor standards or healthcare and benefit issues. The courts in Japan tend to favor employees, and arbitrary dismissals can lead to legal issues. Employers are required to show socially acceptable reasons for any termination of employment, which means providing a valid reason for termination. Advance notice or payment in lieu of notice of termination is also mandatory. Any future actions brought against us and successful in whole or in part, may affect our ability to compete or could materially adversely affect our business, financial condition or results of operations.

The minimum wage, particularly in California, continues to increase and is subject to factors outside of our control.

We have a substantial number of hourly employees who are paid wage rates based on the applicable federal or state minimum wage. Since June 15, 2022, the State of California has a minimum wage of $15.50 per hour. Moreover, municipalities may set minimum wages above the applicable state standards. The federal minimum wage has been $7.25 per hour since July 24, 2009. The current minimum wage is 961 yen (national weighted average) per hour. The average will rise to 1,004 yen ($7.57) per hour for the 2023 fiscal year starting on October 1, 2023. This increase comes from heightened inflation and the commitment of prime minister Kishida to higher wages. Any of federally mandated, state-mandated or municipality-mandated minimum wages may be raised in the future which could have a materially adverse effect on our business, financial condition or results of operations. If menu prices are increased by us to cover increased labor costs, the higher prices could adversely affect sales and thereby reduce our margins and adversely affect our business, financial condition or results of operations.

Changes in employment laws may adversely affect our business, financial condition, results of operations or cash flow.

Various federal and state labor laws govern the relationship with our employees and affect operating costs. These laws include employee classification as exempt/non-exempt for overtime and other purposes, minimum wage requirements, tips and gratuity payments, unemployment tax rates, workers’ compensation rates, immigration status and other wage and benefit requirements. Significant additional government-imposed increases in the following areas could materially affect our business, financial condition, operating results or cash flow:

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minimum wages;

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tips and gratuities;

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mandatory health benefits;

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vacation accruals;

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paid leaves of absence, including paid sick leave; and

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tax reporting.

If we face labor shortages, increased labor costs or unionization activities, our growth, business, financial condition and operating results could be adversely affected.

Labor is a primary component in the cost of operating our restaurants. If we face labor shortages or increased labor costs because of increased competition for employees, higher employee turnover rates, increases in federal, state or local minimum wage rates or other employee benefits costs (including costs associated with health insurance coverage), our operating expenses could increase, and our growth could be adversely affected. In addition, our success depends in part upon our ability to attract, motivate and retain a sufficient number of well-qualified restaurant operators and management personnel, as well as a sufficient number of other qualified employees, to keep pace with our expansion schedule. Qualified individuals needed to fill these positions are in short supply in some geographic areas. In addition, restaurants have traditionally experienced relatively high employee turnover rates. Although we have not yet experienced significant problems in recruiting or retaining employees, our ability to recruit and retain such individuals may delay the planned openings of new restaurants or result in higher employee turnover in existing restaurants, which could have a material adverse effect on our business, financial condition or results of operations.

If we are unable to continue to recruit and retain sufficiently qualified individuals, our business and our growth could be adversely affected, thereby adversely affecting our business, financial condition or results of operations. Competition for these employees could require us to pay higher wages, which could result in higher labor costs. In addition, increases in the minimum wage would increase our labor costs. Additionally, costs associated with workers’ compensation are rising, and these costs may continue to rise in the future. We may be unable to increase our menu prices in order to pass these increased labor costs on to consumers, in which case our margins would be negatively affected, which could materially adversely affect our business, financial condition or results of operations.

Although none of our employees are currently covered under collective bargaining agreements, our employees may elect to be represented by labor unions in the future. If a significant number of our employees were to become unionized and collective bargaining agreement terms were significantly different from our current compensation arrangements, it could adversely affect our business, financial condition or results of operations.

Our business could be adversely affected by a failure to obtain visas or work permits or to properly verify the employment eligibility of our employees.

Some of our corporate employees’ ability to work in the United States depends on obtaining and maintaining necessary visas and work permits. On certain occasions we have been, and in the future, we may be, unable to obtain visas or work permits to bring necessary employees to the United States for any number of reasons including, among others, limits set by the U.S. Department of Homeland Security or the U.S. Department of State.

Although we require all workers to provide us with government-specified documentation evidencing their employment eligibility, some of our employees may, without our knowledge, be unauthorized workers. Unauthorized workers are subject to deportation and may subject us to fines or penalties, and if any of our workers are found to be unauthorized, we could experience adverse publicity that may negatively impact our brand and may make it more difficult to hire and keep qualified employees. Termination of a significant number of employees who are unauthorized employees may disrupt our operations, cause temporary increases in our labor costs as we train new employees and result in adverse publicity. We could also become subject to fines, penalties and other costs related to claims that we did not fully comply with all recordkeeping obligations of federal and state immigration compliance laws. These factors could materially adversely affect our business, financial condition or results of operations.

Risks Related to Legal, Regulatory, Environmental, Intellectual Property and Privacy Matters

The COVID-19 pandemic has adversely affected, and may continue to adversely affect, our operations, financial condition, liquidity and financial results.

In March 2020, the World Health Organization declared the novel strain of coronavirus COVID-19 a global pandemic. For the past two and one-half years, this contagious virus has continued to spread and has adversely affected workforces, customers, economies and financial markets globally. In response to this outbreak, many state and local authorities mandated the temporary closure of non-essential businesses and dine-in restaurant activity or limited indoor dining capacities. COVID-19 and the government measures taken to control it have caused a significant disruption to our business operation. As of the filing date of this prospectus, all of our restaurants are operating at 100% indoor dining capacity; however, there can be no assurance that developments with respect to the COVID-19 pandemic and government measures taken to control it will not adversely affect our operations and financial results.

Additionally, consumer behavior has changed and may fundamentally change as a result of COVID-19 in both the near and long term and such change may pose significant challenges to our current service and business models. Traffic in restaurants, including ours, has been affected and may be materially and adversely affected with more consumers relying on off-premises orders. All of this could materially and adversely impact sales at our restaurants and our growth prospects. We have made adjustments to our restaurant operations due to the COVID-19 pandemic and may have to re-design our service and business models to accommodate consumers’ changed behavior patterns. Any such attempted effort could result in capital expenditure, business disruption and lower margin sales, and may not be successful in growing our profitability.

In addition to the COVID-19 pandemic, the United States may experience in the future, outbreaks of other viruses, such as norovirus, the bird/avian flu or other diseases. As we have experienced with the COVID-19 pandemic, if a regional or global health pandemic occurs, depending upon its location, duration and severity, our business could be severely affected.

Compliance with environmental laws may negatively affect our business.

We are subject to federal, state and local laws and regulations concerning waste disposal, pollution, protection of the environment, and the presence, discharge, storage, handling, release and disposal of, and exposure to, hazardous or toxic substances. These environmental laws provide for significant fines and penalties for noncompliance and liabilities for remediation, sometimes without regard to whether the owner or operator of the property knew of, or was responsible for, the release or presence of hazardous toxic substances. Third parties may also make claims against the owners or operators of properties for personal injuries and property damage associated with releases of, or actual or alleged exposure to, such hazardous or toxic substances at, on or from our restaurants. Environmental conditions relating to releases of hazardous substances at prior, existing or future restaurant sites could materially adversely affect our business, financial condition or results of operations. In May 2019, the Diet, Japan’s parliament, enacted the Act on Promoting Food Loss Reduction (Food Loss Act) (Act No. 19 of 2019 (Reiwa 1).) To reduce food waste, Japan previously enacted the 2001 Food Recycling Act (Act No. 116 of 2000, amended by Act No. 83 of 2007), which promotes reducing and recycling food wastes into fertilizer and feed. One of provisions of the Act obligates businesses that generate large amounts of food waste to take measures to reduce and recycle the waste and report their food waste situation to the government periodically. (Arts. 7 & 9.) Restaurant patrons taking leftover food when they leave a restaurant would be one such proactive measure. Further, environmental laws, and the administration, interpretation and enforcement thereof, are subject to change and may become more stringent in the future, each of which could materially adversely affect our business, financial condition or results of operations.

Changes in economic conditions could materially affect our ability to maintain or increase sales at our restaurants or open new restaurants.

The restaurant industry depends on consumer discretionary spending. The United States in general or the specific markets in which we operate may suffer from depressed economic activity, recessionary economic cycles, higher fuel or energy costs, low consumer confidence, high levels of unemployment, reduced home values, increases in home foreclosures, investment losses, personal bankruptcies, reduced access to credit or other economic factors that may affect consumers’ discretionary spending. Sales in our restaurants could decline if consumers choose to dine out less frequently or reduce the amount they spend on meals while dining out. Negative economic conditions might cause consumers to make long-term changes to their discretionary spending behavior, including dining out less frequently on a permanent basis. If restaurant sales decrease, our profitability could decline as we spread fixed costs across a lower level of sales. Reductions in staff levels, asset impairment charges and potential restaurant closures could result from prolonged negative restaurant sales, which could materially adversely affect our business, financial condition or results of operations.

We could be party to litigation that could adversely affect us by distracting management, increasing our expenses or subjecting us to material money damages and other remedies.

Our guests occasionally file complaints or lawsuits against us alleging we caused an illness or injury they suffered at or after a visit to our restaurants, or that we have problems with food quality or operations. We are also subject to a variety of other claims arising in the ordinary course of our business, including personal injury claims, contract claims and claims alleging violations of federal and state law regarding workplace and employment matters, equal opportunity, discrimination and similar matters, and we are presently subject to class action and other lawsuits with regard to certain of these matters and could become subject to additional class action or other lawsuits related to these or different matters in the future. Regardless of whether any claims against us are valid, or whether we are ultimately held liable, claims may be expensive to defend and may divert time and money away from our operations and hurt our performance. A judgment in excess of our insurance coverage for any claims could materially and adversely affect our business, financial condition or results of operations. Any adverse publicity resulting from these allegations may also materially and adversely affect our reputation or prospects, which in turn could materially adversely affect our business, financial condition or results of operations.

We are subject to state and local “dram shop” statutes, which may subject us to uninsured liabilities. These statutes generally allow a person injured by an intoxicated person to recover damages from an establishment that wrongfully served alcoholic beverages to the intoxicated person. Because a plaintiff may seek punitive damages, which may not be fully covered by insurance, this type of action could have an adverse impact on our business, financial condition or results of operations. A judgment in such an action significantly in excess of, or not covered by, our insurance coverage could adversely affect our business, financial condition or results of operations. Further, adverse publicity resulting from any such allegations may adversely affect our business, financial condition or results of operations.

Failure to comply with antibribery or anticorruption laws could adversely affect our reputation, business, financial condition or results of operations.

The U.S. Foreign Corrupt Practices Act and other similar applicable laws prohibiting bribery of government officials and other corrupt practices are the subject of increasing emphasis and enforcement around the world. In Japan, Article 198 of the Criminal Code prohibits giving, offering or promising bribes to public officials in connection with their duties. Although we have implemented policies and procedures designed to promote compliance with these laws, there can be no assurance that our employees, contractors, agents, or other third parties will not take actions in violation of our policies or applicable law. Any such violations or suspected violations could subject us to civil or criminal penalties, including substantial fines and significant investigation costs, and could also materially damage our reputation, brands, international expansion efforts and growth prospects, business, financial condition and results of operations. Publicity relating to any noncompliance or alleged noncompliance could also harm our reputation and adversely affect our business, financial condition or results of operations.

Food safety and foodborne illness concerns could have an adverse effect on our business, financial condition or results of operations.

We cannot guarantee that our internal controls and training will be fully effective in preventing all food safety issues at our restaurants, including any occurrences of foodborne illnesses such as salmonella, E. coli and hepatitis A. In addition, there is no guarantee that our restaurant locations will maintain the high levels of internal controls and training we require at our restaurants. Furthermore, we rely on third-party vendors, making it difficult to monitor food safety compliance and increasing the risk that foodborne illness would affect multiple locations rather than a single restaurant. Some foodborne illness incidents could be caused by third-party vendors and transporters outside of our control. New illnesses resistant to our current precautions may develop in the future, or diseases with long incubation periods could arise, that could give rise to claims or allegations on a retroactive basis. One or more instances of foodborne illness in any of our restaurants or markets or related to food products we sell could negatively affect our restaurant sales nationwide if highly publicized on national media outlets or through social media. This risk exists even if it were later determined that the illness was wrongly attributed to us or one of our restaurants. A number of other restaurant chains have experienced incidents related to foodborne illnesses that have had a material adverse effect on their operations. The occurrence of a similar incident at one or more of our restaurants, or negative publicity or public speculation about an incident, could materially adversely affect our business, financial condition or results of operations.

Governmental regulation may adversely affect our ability to open new restaurants or otherwise adversely affect our business, financial condition or results of operations.

We are subject to various federal, state and local regulations. Our restaurants are subject to state and local licensing and regulation by health, alcoholic beverage, sanitation, food and occupational safety and other agencies. We may experience material difficulties or failures in obtaining the necessary licenses, approvals or permits for our restaurants, which could delay planned restaurant openings or affect the operations at our existing restaurants. In addition, stringent and varied requirements of local regulators with respect to zoning, land use and environmental factors could delay or prevent development of new restaurants in particular locations.

We are subject to the U.S. Americans with Disabilities Act and similar state laws that give civil rights protections to individuals with disabilities in the context of employment, public accommodations and other areas, including our restaurants. We may in the future have to modify restaurants, for example, by adding access ramps or redesigning certain architectural fixtures, to provide service to or make reasonable accommodations for disabled persons. The expenses associated with these modifications could be material.

Our operations are also subject to the U.S. Occupational Safety and Health Act, which governs worker health and safety, the U.S. Fair Labor Standards Act, which governs such matters as minimum wages and overtime, and a variety of similar federal, state and local laws that govern these and other employment law matters. In addition, federal, state and local proposals related to paid sick leave or similar matters could, if implemented, materially adversely affect our business, financial condition or results of operations.

In Japan, with respect to persons with disabilities, the Act for Eliminating Discrimination against Persons with Disabilities (Act No. 65 of 2013, hereinafter referred to as the “Disability Discrimination Act”) prohibits governments and businesses from engaging in unfair discriminatory treatment on the grounds of disability and prescribes that they are required to provide reasonable accommodation (companies must endeavor to provide reasonable accommodation). The Act on Employment Promotion Etc. of Persons with Disabilities (Act No. 123 of 1960) prohibits businesses from taking discriminatory measures in the area of employment based on disability and requires provision of reasonable accommodation.

In Japanese restaurants, there are various laws and regulations such as food hygiene and fire protection. Below are some of the laws you should be especially aware of in Japanese restaurants.

Restaurant Licensing and Quality Control

The main law that governs food quality and integrity in Japan is the Food Sanitation Act. The Food Sanitation Act (i) establishes standards and specifications for food, additives, apparatus, and food containers and packaging, (ii) provides for inspection to see whether the established standards are met, (iii) provides for hygiene management in the manufacture and sale of food, (iv) and requires food businesses to be licensed. Under the Food Sanitation Act, additives and foods containing additives must not be sold, or be produced, imported, processed, used, stored, or displayed for marketing purposes unless the Minister of Health, Labour and Welfare (“MHLW”) has declared them as having no risk to human health after seeking the views of the Pharmaceutical Affairs and Food Sanitation Council. In addition, it is not permissible to add any processing aids, vitamins, minerals, novel foods or nutritive substances to food unless they have been expressly declared by the MHLW as having no risk to human health. The MHLW may, pursuant to the Food Sanitation Act, establish specifications for methods of producing, processing, using, cooking, or preserving food or additives to be served to the public for marketing purposes, and may establish standards for food ingredients or additives to be served to the public for marketing purposes. Accordingly, where substances are allowed to be added to food, they may only be used within the limits expressly set by the MHLW.

In order to operate a restaurant in Japan, the operator must apply for and obtain a restaurant license (“Restaurant License”) as described above pursuant to the Food Sanitation Act (Act No. 233 of December 24, 1947) from the local health department overseeing the prefecture in which the restaurant is located. This license system is in place to ensure that proper safety and sanitation is maintained in restaurants where food is cooked and served.

The core requirements for a Restaurant License generally relate to the equipment and facilities within the restaurant. These typically include requirements such as having certain refrigeration, dish washing and hot water facilities, as well as requirements to maintain the store’s cleanliness by making sure that all utensils and plates are stored in cupboards with doors, and that the kitchen is separated from the seating space, among others.

It is the responsibility of each individual restaurant operator of the Company to obtain the Restaurant License. To do so, the operator must file an application with the local health department prior to opening for business. After the application has been submitted, an officer of the health department will conduct an on-site inspection of the restaurant to determine if the restaurant meets the relevant standards. After passing such an inspection, a license may be granted, making it possible for the operator to begin its restaurant business.

Food Sanitation

The purpose of the Food Sanitation Act is to prevent sanitation risks and further the interest of public health in Japan. Under the Food Sanitation Act, any individual or entity that intends to conduct a covered business which has a significant impact on public health, such as restaurants and others, must obtain approval from the prefectural governor (through the local health department). The prefectural governor may set out necessary conditions such as a valid period of not less than five years from the time of approval to operate the establishment. In order to operate the business, the business must meet facility standards set out for each type of business by the prefectural governor. Any such individual or entity that intends to conduct a covered business such as restaurant business, cafe business, and food sales, must appoint a “Food Sanitation Manager” based on the standards determined by the prefectural governor.

We maintain the following principal measures, among others, to prevent against food contamination:

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Store Hygiene Management Office, a department specializing in hygiene management;

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hygiene management manual;

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planned maintenance calendar;

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temperature check table;

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hygiene check sheet as a management form for the headquarters;

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process for the Hygiene Management Office to conduct hygiene checks of stores; and

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process for supervisors to conduct an operations check and hygiene management check during the supervisor’s monthly store visit.

Labor Laws

There are various labor-related laws in Japan, including the Labor Standards Act (Act No. 49 of April 7, 1947, as amended), the Industrial Safety and Health Act (Act No. 57 of June 8, 1972, as amended), and the Labor Contracts Act (Act No. 128 of December 5, 2007). The Labor Standards Act regulates, among others, minimum standards for working conditions such as working hours, leave period, and leave days. The Industrial Safety and Health Act requires, among others, the implementation of measures to secure employee safety and protect the health of workers in the workplace. The Labor Contracts Act regulates, among others, the change of terms of employment contracts and working rules, and dismissal and disciplinary action. We comply with these regulations.

Environmental Regulations

There are various environmental-related laws in Japan, including the Air Pollution Control Act (Act No. 97 of June 10, 1968, as amended), Water Pollution Prevention Act (Act No. 138 of December 25, 1970, as amended), Soil Contamination Countermeasures Act (Act No. 53 of May 29, 2002, as amended), and Noise Regulation Act (Act No. 98 of June 10, 1968, as amended). In May 2019, the Diet, Japan’s parliament, enacted the Act on Promoting Food Loss Reduction (Food Loss Act) (Act No. 19 of 2019 (Reiwa 1).) To reduce food waste, Japan previously enacted the 2001 Food Recycling Act (Act No. 116 of 2000, amended by Act No. 83 of 2007), which promotes reducing and recycling food wastes into fertilizer and feed. One of provisions of the Act obligates businesses that generate large amounts of food waste to take measures to reduce and recycle the waste and report their food waste situation to the government periodically. (Arts. 7 & 9.) Restaurant patrons taking leftover food when they leave a restaurant would be one such proactive measure. We comply with these regulations to the extent they are applicable to us.

Regulations on Advertising

The Premiums and Representations Act (Act No. 134 of May 15, 1962) stipulates the restricted methods and means of various advertisements, representations, and sales promotions, in a broad sense. When we advertise our restaurants, we must provide appropriate information under this act, so as not to mislead our customers. We comply with these regulations.

Regulations on Lease Agreements

Our lease agreements are generally subject to the Civil Code (Act No. 89 of April 27, 1896, as amended) and Act on Land and Building Leases (Act No. 90 of October 4, 1991, as amended). The terms and conditions of our lease agreements are consistent with these laws and are valid and enforceable as provided for in these agreements.

Regulations for Liquor Retailing

Our restaurants sell liquor in Japan, and we are subject to laws and regulations for liquor retailing.

The Liquor Tax Act (Act No.6 of February 28, 1953, as amended) imposes tax on liquor and stipulates tax thresholds and tax rates according to types of liquor, etc. In order to operate the business of selling liquor, the operator shall, pursuant to Article 9 of this act, obtain a license for selling liquor. The license remains in effect until it is revoked by the relevant governmental authority. We have duly obtained and maintain such licenses for each of our directly-operated physical restaurants which sell liquor in Japan. We are prohibited from selling liquor to minors (under 20 years old) under Minor Drinking Prohibition Act (Act No. 20 of March 30, 1922, as amended), and must check the ID of customers if they appear to be under 20 years old.

Food Labeling Act

Restaurants must properly label the ingredients and provide allergen information in accordance with the Food Labeling Act. Accuracy is required for food labeling, and care must be taken to make it easier for customers to understand the ingredients and allergens contained in food.

Fire Protection Act

Restaurants must maintain and inspect proper fire protection equipment in accordance with the Fire Protection Act for Fire Prevention and Evacuation. In addition, the security of evacuation routes and measures in the event of a fire must also meet the standards stipulated by law.

Building Code

Designing or renovating a restaurant building or store requires obtaining the appropriate permits in accordance with the Building Code. It is important to ensure that the structure, safety, and barrier-free measures of buildings meet the standards established by law.

We may become involved in lawsuits involving Onodera Food Service Co., Ltd. as the owner of intellectual property, or us as a licensee of intellectual property from Onodera Food Service Co., Ltd., to protect or enforce intellectual property rights, which could be expensive, time consuming, and unsuccessful.

Our business prospects depend in part on our ability to develop favorable consumer recognition of the Sushi Ginza Onodera name. Although “Ginza Onodera” are federally registered service marks owned by Onodera Food Service Co., Ltd., such marks could be imitated in ways that we or Onodera Food Service Co., Ltd. cannot prevent. Alternatively, third parties may attempt to cause us to change our name or not operate in a certain geographic region if our name is confusingly similar to their name. In addition, we rely on trade secrets, proprietary know-how, concepts, and recipes of Onodera Group. Our methods or Onodera Food Service Co., Ltd.’s methods of protecting this information may not be adequate. Moreover, we or Onodera Food Service Co., Ltd. may face claims of misappropriation or infringement of third parties’ rights that could interfere with our use of this information. Defending these claims may be costly and, if unsuccessful, may prevent us from continuing to use this proprietary information in the future, and may result in a judgment or monetary damages. We do not maintain confidentiality and non-competition agreements with all of our executives, key personnel, or suppliers. If competitors independently develop or otherwise obtain access to the trade secrets, proprietary know-how, concepts, or recipes we rely upon to operate our restaurants, some of which we license from Onodera Group Co., Ltd., the appeal of our restaurants could be significantly reduced and our business, financial condition or results of operations could be adversely affected.

A breach of security of confidential consumer information related to our electronic processing of credit and debit card transactions, as well as a breach of security of our employee information, could substantially affect our reputation, business, financial condition of results of operations.

The majority of our restaurant sales are by credit or debit cards. Other restaurants and retailers have experienced security breaches in which credit and debit card information has been stolen. We may in the future become subject to claims for purportedly fraudulent transactions arising out of the actual or alleged theft of credit or debit card information, and we may also be subject to lawsuits or other proceedings relating to these types of incidents. We may ultimately be held liable for the unauthorized use of a cardholder’s card number in an illegal activity and be required by card issuers to pay charge-back fees. In addition, most states have enacted legislation requiring notification of security breaches involving personal information, including credit and debit card information. Any such claim or proceeding could cause us to incur significant unplanned expenses, which could have an adverse impact on our business, financial condition or results of operations. Further, adverse publicity resulting from these allegations may have a material adverse effect on us and could substantially affect our reputation and business, financial condition or results of operations.

In addition, our business requires the collection, transmission and retention of large volumes of guest and employee data, including personally identifiable information, in various information technology systems that we maintain and in those maintained by third parties with whom we contract to provide services. The collection and use of such information is regulated at the federal and state levels, as well as at the international level, at which regulatory requirements have been increasing. As our environment continues to evolve in the digital age and reliance upon new technologies becomes more prevalent, it is imperative we secure the privacy and sensitive information we collect. Failure to do so, whether through fault of our own information systems or those of outsourced third-party providers, could not only cause us to fail to comply with these laws and regulations, but also could cause us to face litigation and penalties that could adversely affect our business, financial condition or results of operations. Our brand’s reputation and image as an employer could also be harmed by these types of security breaches or regulatory violations.

Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.

The company has net operating loss carryforwards for tax purposes of $11 million in Japan, USA and China, which are available to offset future taxable income. Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the “Code”), if a corporation undergoes an “ownership change,” the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes to offset its post-change income may be limited. In general, an “ownership change” generally occurs if there is a cumulative change in our ownership by “5-percent shareholders” that exceeds 50 percentage points over a rolling three-year period. Similar rules may apply under state tax laws. We do not believe that we will experience an ownership change as a result of this issuance. However, we may experience ownership changes in the future as a result of this issuance and future transactions in our stock, some of which may be outside our control. As a result, if we earn net taxable income, our ability to use our pre-change net operating loss carryforwards, or other pre-change tax attributes, to offset U.S. federal and state taxable income may be subject to significant limitations. Those net operating loss carryforwards and general business tax credits resulted in a tax effected deferred tax asset of $2.4 million as of March 31, 2023.

Risks Related to Doing Business in China

We require various approvals, licenses and permits to operate our business and the loss of or failure to obtain or renew any or all of these approvals, licenses and permits could adversely affect our business and results of operations.

In accordance with the laws and regulations of China, we are required to maintain various approvals, licenses, permits, registrations and filings in order to operate our restaurant business in the People’s Republic of China (“PRC”). Our subsidiary in China (the “Chinese Subsidiary”) is required to obtain (1) the food operation license; (2) registration or approval to sell alcoholic beverage; (3) the environmental protection assessment and inspection registration or approval; and (4) the fire safety inspection acceptance approval or other alternatives. These licenses and registrations are achieved upon satisfactory compliance with, among other things, the applicable food safety, hygiene, environmental protection, fire safety and alcohol laws and regulations. Most of these licenses are subject to periodic examinations or verifications by relevant authorities and some are valid only for a fixed period of time subject to renewal and accreditation.

Rapidly evolving laws and regulations, and inconsistent interpretations and enforcements thereof could impede our ability to obtain or maintain the required permits, licenses and certificates required to conduct our businesses in China. Difficulties or failure in obtaining the required permits, licenses and certificates could result in our inability to continue our business in China in a manner consistent with past practice. In such an event, our business and results of operations may be adversely affected. If (i) we have inadvertently concluded that such permissions, approvals, licenses or permits have been acquired or are not required, or (ii) applicable laws, regulations, or interpretations change and we are required to obtain such permissions, approvals, licenses or permits in the future, then we may have to expend time and costs to procure them. If we are unable to do so on commercially reasonable terms or in a timely manner, it could cause significant disruption to our business operations and damage our reputation, which would in turn have a material adverse effect on our business, results of operations and financial condition.

Failure to comply with the existing or new government regulations relating to fire safety, food hygiene, environmental protection and control on indoor smoking of the restaurant industry in China may have a material adverse effect on our businesses and results of operation.

Our Chinese Subsidiary’s businesses are subject to the restriction of various compliance and operational regulations stipulated by the Chinese laws. Our Chinese Subsidiary fails to comply with the applicable laws and regulations (including but not limited to laws governing our relationship with employees) be subject to fines and penalties imposed by relevant Chinese government departments. Our Chinese Subsidiary is required to hold an operation license issued by the local government departments, and should carry out catering business within the business scope of the operation license. Chinses Subsidiary’s businesses are also subject to the restriction of various regulations, which affect various aspects of businesses in Shanghai where it operates, including but not limited to fire safety, food hygiene, environmental protection and control on indoor smoking. Our Chinese Subsidiary is required to obtain various licenses and permits in accordance with these regulations or carry out record filing procedures. Although our Chinese Subsidiary has not suffered any major fines or other penalties which materially and adversely affect its businesses and results of operation due to any violation of the regulations in the past, Chinese Subsidiary may be subject to fine, confiscation of income and termination of the operation of restaurant lacking all necessary licenses and permits required, or subject to suspension of sales of certain products in accordance with the latest laws and regulations if Chinese Subsidiary fails to deal with these non-compliance events in a timely manner. Such kind of circumstance may have a material adverse impact on the Chinese Subsidiary’s businesses and results of operation.

Chinese regulation of loans to, and direct investment in, Chinese entities by offshore holding companies and governmental control of currency conversion may restrict or prevent us from making loans or additional capital contributions to our Chinese subsidiary, which may materially and adversely affect our liquidity and our ability to fund and expand our business.

We are conducting our operations in China through our Chinese Subsidiary. We may make loans to our Chinese Subsidiary, or we may make additional capital contributions to our Chinese Subsidiary.

Most of these uses are subject to Chinese regulations and approvals. For example, loans by us to our Chinese Subsidiary to finance its activities cannot exceed statutory limits and must be registered with the local counterparts of SAFE. If we decide to finance our Chinese Subsidiary by means of capital contributions, in practice, we might be still required to obtain approval from the MOFCOM or its local counterparts.

On April 8, 2015, SAFE promulgated the Circular on the Reform of the Administrative Method of the Settlement of Foreign Currency Capital of Foreign-Invested Enterprises, or Circular 19, which became effective as of June 1, 2015. Among other things, under Circular 19, foreign-invested enterprises may either continue to follow the payment-based foreign currency settlement system or elect to follow the conversion-at-will of foreign currency settlement system. Where a foreign-invested enterprise follows the conversion-at-will of foreign currency settlement system, it may convert any or 100% of the amount of the foreign currency in its capital account into RMB at any time. The converted RMB will be kept in a designated account known as “Settled but Pending Payment Account,” and if the foreign-invested enterprise needs to make further payment from such designated account, it still needs to provide supporting documents and go through the review process with its bank. If under special circumstances the foreign-invested enterprise cannot provide supporting documents in time, Circular 19 grants the banks the power to provide a grace period to the enterprise and make the payment before receiving the supporting documents. The foreign-invested enterprise will then need to submit the supporting documents within 20 working days after payment. In addition, foreign-invested enterprises are now allowed to use their converted RMB to make equity investments in China under Circular 19. However, foreign-invested enterprises are still required to use the converted RMB in the designated account within their approved business scope under the principle of authenticity and self-use. It remains unclear whether a common foreign-invested enterprise, other than such special types of enterprises as holding companies, venture capital or private equity firms, can use the converted RMB in the designated account to make equity investments if equity investment or similar activities are not within their approved business scope.

In light of the various requirements imposed by Chinese regulations on loans to and direct investment in Chinese entities by offshore holding companies as discussed above, we cannot assure you that we will be able to complete the necessary government registrations or obtain the necessary government approvals on a timely basis, or at all, with respect to future loans by us to our Chinese subsidiary or with respect to future capital contributions by us to our Chinese subsidiary. If we fail to complete such registrations or obtain such approvals, our ability to capitalize or otherwise fund our Chinese operations may be negatively affected, which could materially and adversely affect our liquidity and our ability to fund and expand our business.

Unauthorized access to, or improper use, disclosure, theft or destruction of, our customer or employee personal, financial or other data or our proprietary or confidential information that is stored in our information systems or by third parties on our behalf could result in substantial costs, expose us to litigation and damage our reputation.

We have been using, and plan to continue to use, digital technologies to improve the customer experience and drive sales growth. We, directly or indirectly, receive and maintain certain personal, financial and other information about our customers in various information systems that we maintain and in those maintained by third-party service providers when, for example, receiving orders through mobile or online platforms, accepting digital payments, and conducting digital marketing programs. Our information technology systems, such as those we use for administrative functions, including human resources, payroll, accounting and internal and external communications, can contain personal, financial or other information of our employees. We also maintain important proprietary and other confidential information related to our operations. As a result, we face risks inherent in handling and protecting large volumes of information.

If our security and information systems or the security and information systems of third-party service providers are compromised for any reason, including as a result of data corruption or loss, security breach, cyber-attack or other external or internal methods, or if our employees, franchisees or service providers fail to comply with laws, regulations and practice standards, and this information is obtained by unauthorized persons, used or disclosed inappropriately or destroyed, it could subject us to litigation and government enforcement actions, cause us to incur substantial costs, liabilities and penalties and/or result in a loss of customer confidence, any and all of which could adversely affect our business, reputation, ability to attract new customers, results of operations and financial condition.

In addition, the use and handling of this information is regulated by evolving and increasingly demanding laws and regulations. The Chinese government has focused increasingly on regulation in the areas of information security and protection, including by implementing the PRC Cybersecurity Law effective June 1, 2017, which imposes tightened requirements on data privacy and cybersecurity practices. There are uncertainties with respect to the application of the cybersecurity law in certain circumstances. In addition, the PRC Data Security Law, which took effect on September 1, 2021, imposes data security and privacy obligations on entities and individuals carrying out data activities (including activities outside of the PRC), requires a national security review of data activities that may affect national security, and imposes restrictions on data transmissions. Furthermore, the PRC Personal Information Protection Law, which took effect on November 1, 2021, sets out the regulatory framework for handling and protection of personal information and transmission of personal information, and many specific requirements of the law remain to be clarified by the CAC and other regulatory authorities. The Revised Cybersecurity Review Measures, which took effect on February 15, 2022, require critical information infrastructure operators procuring network products and services and online platform operators carrying out data processing activities, which affect or may affect national security, to conduct a cybersecurity review pursuant to the provisions therein. The Measures for Security Assessment for Outbound Data Transfer, which took effect on September 1, 2022, mandate mandatory government security review by the CAC in advance of certain cross-border data transfer activities. We have established a professional team to formulate and implement internal data security policies to comply with the regulations and policies issued by the CAC, monitor our compliance practices and assess any non-compliance issues. We believe that we are compliant in all material respects with the applicable regulations and policies that have been issued by the CAC to date. As of the date of this prospectus, (i) we have not received any formal notice from any PRC cybersecurity regulator identifying us as a “critical information infrastructure operator” or requiring us to go through the cybersecurity review procedures pursuant to the Revised Cybersecurity Review Measures; and (ii) we are not aware of any investigations against us initiated by the CAC based on the Revised Cybersecurity Review Measures. The exact scope of “critical information infrastructure operators” under the current regulatory regime remains unclear, and the PRC government authorities may have wide discretion in the interpretation and enforcement of the applicable laws. Therefore, it is uncertain whether, in the future, we would be deemed to be a critical information infrastructure operator under PRC law. If we are deemed to be a critical information infrastructure operator under the PRC cybersecurity laws and regulations, we may be subject to obligations in addition to what we have fulfilled under the PRC cybersecurity laws and regulations.

Interpretation, application and enforcement of these laws, rules and regulations evolve from time to time and their scope may continually change, through new legislation, amendments to existing legislation or changes in enforcement. We have been taking and will continue to take reasonable measures to comply with applicable cybersecurity, data privacy and security laws. We cannot guarantee the effectiveness of the measures undertaken by us, and such measures may still be determined as insufficient, improper, or even as user-privacy invasive, by the relevant authorities, which may result in penalties against us.

Compliance with these laws, as well as additional regulations and standards regarding data privacy, data collection and information security that PRC regulatory bodies may enact in the future, may result in additional expenses to us as we may be required to upgrade our current information technology systems. Furthermore, as a result of legislative and regulatory rules, we may be required to notify the owners of information of any breach, theft or loss of their information, which could harm our reputation, as well as subject us to litigation or actions by regulatory bodies and adversely affect our financial results.

We expect that cybersecurity, data privacy and security will continue to be a focus of regulators, as well as attract continued or greater public scrutiny and attention going forward, which could increase our compliance costs and subject us to heightened risks and challenges associated with information security and protection. If we are unable to manage these risks, we could become subject to penalties, including fines, suspension of business, shutdown of websites and revocation of required licenses, and our reputation and results of operations could be materially and adversely affected.

Under the EIT Law, if we are classified as a China resident enterprise for Chinese enterprise income tax purposes, such classification would likely result in unfavorable tax consequences to us and our non-Chinese stockholders.

Under the EIT Law and its implementation rules, an enterprise established outside China with a “de facto management body” within China is considered a China resident enterprise for Chinese enterprise income tax purposes. A China resident enterprise is generally subject to certain Chinese tax reporting obligations and a uniform 25% enterprise income tax rate on its worldwide income. Furthermore, under the EIT Law, if we are a China resident enterprise (i) dividends paid by us to our non-Chinese stockholders would be subject to a 10% dividend withholding tax or a 20% individual income tax if the stockholder is an individual and (ii) such non-Chinese stockholders may become subject to Chinese tax and filing obligations as well as withholding with respect to any disposition of our stock, subject to certain treaty or other exemptions or reductions.

The Company and each of its subsidiaries that is organized outside of China intends to conduct its management functions in a manner that does not cause it to be a China resident enterprise, including by carrying on its day-to-day management activities and maintaining its key records, such as resolutions of its board of directors and resolutions of stockholders, outside of China. As such, we do not believe that the Company or any of its non-Chinese subsidiaries should be considered a China resident enterprise for purposes of the EIT Law. However, given the uncertainty regarding the application of the EIT Law to us and our future operations, there can be no assurance that we or any of our non-Chinese subsidiaries will not be treated as a China resident enterprise now or in the future for Chinese tax law purposes.

General Risks

If we fail to maintain effective internal control over financial reporting, the price of our securities may be adversely affected.

Our internal controls over financial reporting have weaknesses and conditions that require correction or remediation. For the years ended March 31, 2023 and 2022, we identified three material weaknesses in our assessment of the effectiveness of disclosure controls and procedures. We have (i) deficiencies in the segregation of duties, (ii) deficiencies in the staffing of our financial accounting department and (iii) limited checks and balances in processing cash and other transactions. We are committed to improving our financial reporting processes. We plan on contracting with an outside certified public accountant to assist us in maintaining our disclosure controls and procedures and the preparation of our financial statements for the foreseeable future. We also plan on increasing the size of our accounting staff at the appropriate time for our business and its size to ameliorate our concern that we do not effectively segregate certain accounting duties or have adequate staffing. We believe the foregoing actions would resolve these material weaknesses in disclosure controls and procedures. However, there can be no assurances as to the timing of any such actions or that we will be able to do so. Any failure by us to implement the changes necessary to maintain an effective system of internal controls could harm our operating results materially and cause investors and financial analysts to lose confidence in our reported financial information. Any such loss of confidence in the investment community would have a negative effect on the trading and price of our common stock.

If we are unable to implement and maintain effective internal control over financial reporting in the future, investors may lose confidence in the accuracy and completeness of our financial reports and have an adverse effect on the value of our securities.

As a public company, we would be required to maintain internal control over financial reporting and to report any material weaknesses in such internal control. Further, we will be required to report any changes in internal controls on a quarterly basis. In addition, we would be required to furnish a report by management on the effectiveness of internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act. We will design, implement, and test the internal controls over financial reporting required to comply with these obligations. If we identify material weaknesses in our internal control over financial reporting, if we are unable to comply with the requirements of Section 404 in a timely manner or assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of its internal control over financial reporting when required, investors may lose confidence in the accuracy and completeness of our financial reports and the value of our securities could be negatively affected. We also could become subject to investigations by the Commission or other regulatory authorities, which could require additional financial and management resources.

Changes to accounting rules or regulations may adversely affect our business, financial condition or results of operations.

Changes to existing accounting rules or regulations may impact our business, financial condition or results of operations. Other new accounting rules or regulations and varying interpretations of existing accounting rules or regulations have occurred and may occur in the future. For instance, accounting regulatory authorities have recently issued new accounting rules which require lessees to capitalize operating leases in their financial statements in the next few years. When adopted, such a change would require us to record significant operating lease obligations on our balance sheet and make other changes to our financial statements. This and other future changes to accounting rules or regulations could materially adversely affect our business, financial condition or results of operations.

As an emerging growth company, our auditor will not be required to attest to the effectiveness of our internal controls.

Our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting while we are an emerging growth company. This means that the effectiveness of our financial operations may differ from our peer companies in that they may be required to obtain independent registered public accounting firm attestations as to the effectiveness of their internal controls over financial reporting and we are not. While our management will be required to attest to internal control over financial reporting and we will be required to detail changes to our internal controls on a quarterly basis, we cannot provide assurance that the independent registered public accounting firm’s review process in assessing the effectiveness of our internal controls over financial reporting, if obtained, would not find one or more material weaknesses or significant deficiencies. Further, once we cease to be an emerging growth company and cease to be a smaller reporting company (as described below), we will be subject to independent registered public accounting firm attestation regarding the effectiveness of our internal controls over financial reporting. Even if management finds such controls to be effective, our independent registered public accounting firm may decline to attest to the effectiveness of such internal controls and issue a qualified report.

We may need capital in the future, and we may not be able to raise that capital on favorable terms.

Developing our business will require significant capital in the future. Historically, we have partially relied on financial support from Onodera Group Co., Ltd. Onodera Group provided approximately $9 million in loans in the year ended March 31, 2022 and approximately $23 million in past debt settlement by shares in the year ended March 31, 2023. In the year ending March 31, 2024, Onodera Group will provide approximately $3.5 million in additional loans to fund the anticipated transition to public company status as a result of this offering and Kaiten Sushi Hawaii facilities. After the completion of this offering, we do not expect to receive any additional capital contributions from Onodera Group Co., Ltd. To meet our capital needs, we expect to rely on cash flows from operations, the proceeds from this offering, future offerings and other third-party financing. Third-party financing in the future may not, however, be available on terms favorable to us, or at all. Our ability to obtain additional funding will be subject to various factors, including market conditions, our operating performance, lender sentiment and our ability to incur additional debt in compliance with other contractual restrictions such as financial covenants under term loans or other debt documents. These factors may make the timing, amount, or terms and conditions of additional financing unattractive. Our inability to raise capital could impede our growth and could materially adversely affect our business, financial condition or results of operations.

We are an “emerging growth company,” and we cannot be certain if the reduced reporting and disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.

We qualify as an “emerging growth company” under the JOBS Act. As a result, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements. For so long as we are an emerging growth company, we will not be required to:

	●	have an auditor report on our internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;

	●	comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditors’ report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis);

	●	submit certain executive compensation matters to stockholder advisory votes, such as “say-on-pay” and “say-on-frequency”; and

	●	disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer’s compensation to median employee compensation.

In addition, Section 102 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.

We will remain an emerging growth company until the earliest to occur of: (i) the end of the first fiscal year in which our annual gross revenue is $1.235 billion or more; (ii) the end of the fiscal year in which the market value of our common shares that are held by non-affiliates is at least $700.0 million as of the last business day of our most recently completed second fiscal quarter; (iii) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt; and (iv) the end of the fiscal year during which the fifth anniversary of this offering occurs.

Until such a time, however, we cannot predict if investors will find our securities less attractive because we may rely on these exemptions. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the price of our securities may be more volatile.

We believe we will be considered a smaller reporting company and will be exempt from certain disclosure requirements, which could make our common stock less attractive to potential investors.

Rule 12b-2 of the Exchange Act defines a “smaller reporting company” as an issuer that is not an investment company, an asset-backed issuer, or a majority-owned subsidiary of a parent that is not a smaller reporting company and that:

	●	had a public float of less than $250 million as of the last business day of its most recently completed second fiscal quarter, computed by multiplying the aggregate worldwide number of shares of its voting and non-voting common equity held by non-affiliates by the price at which the common equity was last sold, or the average of the bid and asked prices of common equity, in the principal market for the common equity; or

	●	in the case of an initial registration statement under the Securities Act, or the Exchange Act of 1934, as amended, which we refer to as the Exchange Act, for shares of its common equity, had a public float of less than $250 million as of a date within 30 days of the date of the filing of the registration statement, computed by multiplying the aggregate worldwide number of such shares held by non-affiliates before the registration plus, in the case of a Securities Act registration statement, the number of such shares included in the registration statement by the estimated public offering price of the shares; or

	●	in the case of an issuer whose public float as calculated under paragraph (1) or (2) of this definition was zero or whose public float was less than $700 million, had annual revenues of less than $100 million during the most recently completed fiscal year for which audited financial statements are available.

As a smaller reporting company, we will not be required and may not include a Compensation Discussion and Analysis section in our proxy statements, and we will provide only two years of financial statements. We also will have other “scaled” disclosure requirements that are less comprehensive than issuers that are not smaller reporting companies which could make our common stock less attractive to potential investors, which could make it more difficult for our stockholders to sell their shares.

The certificate of incorporation and bylaws provides that state or federal court located within the state of Delaware will be the sole and exclusive forum for substantially all disputes between us and our shareholders, which could limit its stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or other employees.

Section 21 of our certificate of incorporation and Section 7.4 of our bylaws provides that “[u]nless the corporation consents in writing to the selection of an alternative forum, the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Corporation to the Corporation or the Corporation’s stockholders, (iii) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law, or (iv) any action asserting a claim governed by the internal affairs doctrine shall be a state or federal court located in the county in which the principal office of the corporation in the State of Delaware is established, in all cases subject to the court’s having personal jurisdiction over the indispensable parties named as defendants. Notwithstanding the foregoing, the exclusive forum provision will not apply to suits brought to enforce any liability or duty created by the Exchange of 1934, as amended, the Securities Act of 1933, as amended, or any claim for which the federal courts have exclusive or concurrent jurisdiction.” Therefore, the exclusive forum provision in our certificate of incorporation and our bylaws will not relieve us of our duty to comply with the federal securities laws and the rules and regulations thereunder, and shareholders will not be deemed to have waived our compliance with these laws, rules and regulations.

This exclusive forum provision may limit a shareholder’s ability to bring a claim in a judicial forum of its choosing for disputes with us or our directors, officers or other employees, which may discourage lawsuits against us or our directors, officers or other employees. In addition, shareholders who do bring a claim in the state or federal court in the State of Delaware could face additional litigation costs in pursuing any such claim, particularly if they do not reside in or near Delaware. The state or federal court of the State of Delaware may also reach different judgments or results than would other courts, including courts where a shareholder would otherwise choose to bring the action, and such judgments or results may be more favorable to us than to our shareholders. However, the enforceability of similar exclusive forum provisions in other companies’ certificates of incorporation have been challenged in legal proceedings, and it is possible that a court could find this type of provision to be inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings. If a court were to find the exclusive forum provision contained in our certificate of incorporation and our bylaws to be inapplicable or unenforceable in an action, we might incur additional costs associated with resolving such action in other jurisdictions.

By purchasing common stock in this offering, you are bound by the fee-shifting provision contained in our bylaws, which may discourage you to pursue actions against us and could discourage shareholder lawsuits that might otherwise benefit the Company and its shareholders.

Section 7.4 of our bylaws provides that “[i]f any action is brought by any party against another party, relating to or arising out of these Bylaws, or the enforcement hereof, the prevailing party shall be entitled to recover from the other party reasonable attorneys’ fees, costs and expenses incurred in connection with the prosecution or defense of such action, provided that the provisions of this sentence shall not apply with respect to “internal corporate claims” as defined in Section 109(b) of the DGCL.”

Our bylaws provide that for this section, the term “attorneys’ fees” or “attorneys’ fees and costs” means the fees and expenses of counsel to the Company and any other parties asserting a claim subject to Section 7.4 of the bylaws, which may include printing, photocopying, duplicating and other expenses, air freight charges, and fees billed for law clerks, paralegals and other persons not admitted to the bar but performing services under the supervision of an attorney, and the costs and fees incurred in connection with the enforcement or collection of any judgment obtained in any such proceeding.

We adopted the fee-shifting provision to eliminate or decrease nuisance and frivolous litigation. We intend to apply the fee-shifting provision broadly to all actions except for claims brought under the Exchange Act and Securities Act.

There is no set level of recovery required to be met by a plaintiff to avoid payment under this provision. Instead, whoever is the prevailing party is entitled to recover the reasonable attorneys’ fees, costs and expenses incurred in connection with the prosecution or defense of such action. Any party who brings an action, and the party against whom such action is brought under Section 7.4 of our bylaws, which could include, but is not limited to former and current shareholders, Company directors, officers, affiliates, legal counsel, expert witnesses and other parties, are subject to this provision. Additionally, any party who brings an action, and the party against whom such action is brought under Section 7.4 of our bylaws, which could include, but is not limited to former and current shareholders, Company directors, officers, affiliates, legal counsel, expert witnesses and other parties, would be able to recover fees under this provision.

In the event you initiate or assert a claim against us, in accordance with the dispute resolution provisions contained in our Bylaws, and you do not, in a judgment prevail, you will be obligated to reimburse us for all reasonable costs and expenses incurred in connection with such claim, including, but not limited to, reasonable attorney’s fees and expenses and costs of appeal, if any. Additionally, this provision in Section 7.4 of our bylaws could discourage shareholder lawsuits that might otherwise benefit the Company and its shareholders.

THE FEE SHIFTING PROVISION CONTAINED IN THE BYLAWS IS NOT INTENDED TO BE DEEMED A WAIVER BY ANY HOLDER OF COMMON STOCK OF THE COMPANY’S COMPLIANCE WITH THE U.S. FEDERAL SECURITIES LAWS AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER. THE FEE SHIFTING PROVISION CONTAINED IN THE BYLAWS DO NOT APPLY TO CLAIMS BROUGHT UNDER THE EXCHANGE ACT AND SECURITIES ACT.

Risks Related to This Offering and Ownership of Our Common Stock

Once our common stock is listed on the Nasdaq Capital Market, there can be no assurance that we will be able to comply with Nasdaq Capital Market’s continued listing standards.

Prior to this offering, there has been no public market for shares of our common stock. As a condition to consummating this offering, our common stock offered in this prospectus must be listed on the Nasdaq Capital Market or another national securities exchange. Accordingly, in connection with the filing of the registration statement of which this prospectus forms a part, we have applied to list our common stock on the Nasdaq Capital Market under the symbol “ONDR.” Assuming that our common stock is listed and after the consummation of this offering, there can be no assurance any broker will be interested in trading our common stock. Therefore, it may be difficult to sell your shares of common stock if you desire or need to sell them. Our underwriters are not obligated to make a market in our common stock, and even if it makes a market, it can discontinue market making at any time without notice. Neither we nor the underwriters can provide any assurance that an active and liquid trading market in our common stock will develop or, if developed, that such a market will continue.

Once our common stock is approved for listing on the Nasdaq Capital Market, there is no guarantee that we will be able to maintain such a listing for any period of time by perpetually satisfying Nasdaq Capital Market’s continued listing requirements. Our failure to continue to meet these requirements may result in our common stock being delisted from Nasdaq Capital Market.

The price of our common stock could be subject to rapid and substantial volatility.

There have been instances of extreme stock price run-ups followed by rapid price declines and strong stock price volatility with recent initial public offerings, especially among those with relatively smaller public floats. As a relatively small-capitalization company with relatively small public float, we may experience greater stock price volatility, extreme price run-ups, lower trading volume and less liquidity than large-capitalization companies. In particular, the common stock may be subject to rapid and substantial price volatility, low volumes of trade and large spreads in bid and ask prices. Such volatility, including any stock-run up, may be unrelated to our actual or expected operating performance and financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of our common stock.

In addition, if the trading volumes of our common stock are low, people buying or selling in relatively small quantities may easily influence the prices of our common stock. This low volume of trade could also cause the price of our common stock to fluctuate greatly, with large percentage changes in price occurring in any trading day session. Holders of our common stock may also not be able to readily liquidate their investment or may be forced to sell at depressed prices due to low volume trading. Broad market fluctuations and general economic and political conditions may also adversely affect the market price of our common stock. As a result of this volatility, investors may experience losses on their investment in our common stock. A decline in the market price of our common stock also could adversely affect our ability to sell additional shares or common stock or other securities and our ability to obtain additional financing in the future. No assurance can be given that an active market in our common stock will develop or be sustained. If an active market does not develop, holders of our common stock may be unable to readily sell the common stock they hold or may not be able to sell their common stock at all.

The market price of our common stock may be volatile, and you could lose all or part of your investment.

We cannot predict the prices at which our common stock will trade. The initial public offering price of our common stock will be determined by negotiations between us and the underwriters and may not bear any relationship to the market price at which our common stock will trade after this offering or to any other established criteria of the value of our business and prospects, and the market price of our common stock following this offering may fluctuate substantially and may be lower than the initial public offering price. The market price of our common stock following this offering will depend on a number of factors, including those described in this “Risk Factors” section, many of which are beyond our control and may not be related to our operating performance. In addition, the limited public float of our common stock following this offering will tend to increase the volatility of the trading price of our common stock. These fluctuations could cause you to lose all or part of your investment in our common stock, since you might not be able to sell your shares at or above the price you paid in this offering. Factors that could cause fluctuations in the market price of our common stock include, but are not limited to, the following:

●

actual or anticipated changes or fluctuations in our results of operations;

	●	the financial projections we may provide to the public, any changes in these projections, or our failure to meet these projections;

	●	announcements by us or our competitors of new products or new or terminated significant contracts, commercial relationships, or capital commitments;

	●	industry or financial analyst or investor reaction to our press releases, other public announcements, and filings with the SEC;

	●	rumors and market speculation involving us or other companies in our industry;

	●	price and volume fluctuations in the overall stock market from time to time;

	●	changes in operating performance and stock market valuations of other technology companies generally, or those in our industry in particular;

	●	the expiration of market stand-off or contractual lock-up agreements and sales of shares of our common stock by us or our stockholders;

	●	failure of industry or financial analysts to maintain coverage of us, changes in financial estimates by any analysts who follow our Company, or our failure to meet these estimates or the expectations of investors;

	●	actual or anticipated developments in our business, or our competitors’ businesses, or the competitive landscape generally;

	●	litigation involving us, our industry, or both, or investigations by regulators into our operations or those of our competitors;

	●	developments or disputes concerning our intellectual property rights, our products, or third-party proprietary rights;

	●	announced or completed acquisitions of businesses or technologies by us or our competitors;

	●	new laws or regulations or new interpretations of existing laws or regulations applicable to our business;

	●	any major changes in our management or our Board of Directors;

	●	general economic conditions and slow or negative growth of our markets; and

	●	other events or factors, including those resulting from war, incidents of terrorism, or responses to these events.

In addition, the stock market in general has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of companies. Broad market and industry factors may seriously affect the market price of our common stock, regardless of our actual operating performance. In addition, in the past, following periods of volatility in the overall market and the market prices of a particular company’s securities, securities class action litigation has often been instituted against that company. Securities litigation, if instituted against us, could result in substantial costs and divert our management’s attention and resources from our business. This could materially adversely affect our business, financial condition, results of operations, and prospects.

If securities or industry analysts do not publish research or reports, or if they publish adverse or misleading research or reports, regarding us, our business or our market, our stock price and trading volume could decline.

The trading market for our common stock will be influenced by the research and reports that securities or industry analysts publish about us, our business or our market. We do not currently have and may never obtain research coverage by securities or industry analysts. If no or few securities or industry analysts commence coverage of us, the stock price would be negatively impacted. In the event we obtain securities or industry analyst coverage, if any of the analysts who cover us issue adverse or misleading research or reports regarding us, our business model, our intellectual property, our stock performance or our market, or if our operating results fail to meet the expectations of analysts, our stock price would likely decline. If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.

Our management team will have immediate and broad discretion over the use of the net proceeds from this offering and we may use the net proceeds in ways with which you disagree.

The net proceeds from this offering will be immediately available to our management to use at their discretion. We currently intend to use the net proceeds from this offering to repay $0.8 million of existing loans from Onodera Group Co., Ltd. and the remaining net proceeds to fund capital investments and working capital for opening new restaurants. See “Use of Proceeds.” Other than the repayment of existing loans, we have not allocated specific amounts of the net proceeds from this offering for any of the foregoing purposes. Accordingly, our management will have significant discretion and flexibility in applying the net proceeds of this offering. You will be relying on the judgment of our management with regard to the use of these net proceeds, and you will not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used appropriately. It is possible that the net proceeds will be invested in a way that does not yield a favorable, or any, return for us or our stockholders. The failure of our management to use such funds effectively could have a material adverse effect on our business, prospects, financial condition, and results of operation.

If we are unable to obtain additional funding when needed, our business operations will be harmed, and if we do obtain additional financing, our then-existing shareholders may suffer substantial dilution.

As we take steps in the commercialization and marketing of our products and services or respond to potential opportunities and/or adverse events, our working capital needs may change. We anticipate that if our cash and cash equivalents are insufficient to satisfy our liquidity requirements, we will require additional funding to sustain our ongoing operations and to continue our research and development activities. We do not have any contracts or commitments for additional funding, and there can be no assurance that financing will be available in amounts or on terms acceptable to us, if at all, if needed. The inability to obtain additional capital will restrict our ability to grow and may reduce our ability to conduct business operations. If we are unable to obtain additional financing to finance a revised growth plan, we will likely be required to curtail such plans or cease our business operations. Any additional equity financing may involve substantial dilution to our then existing shareholders.

Our common stock may be subject to the “penny stock” rules in the future. It may be more difficult to resell securities classified as “penny stock.”

Our common stock may be subject to “penny stock” rules (generally defined as non-exchange traded stock with a per-share price below $5.00) in the future. While our common stock will not be considered “penny stock” following this offering since they will be listed on the Nasdaq Capital Market, if we are unable to maintain that listing and our common stock is no longer listed on the Nasdaq Capital Market, unless we maintain a per-share price above $5.00, our common stock will become “penny stock.” These rules impose additional sales practice requirements on broker-dealers that recommend the purchase or sale of penny stocks to persons other than those who qualify as “established customers” or “accredited investors.” For example, broker-dealers must determine the appropriateness for non-qualifying persons of investments in penny stocks. Broker-dealers must also provide, prior to a transaction in a penny stock not otherwise exempt from the rules, a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, disclose the compensation of the broker-dealer and its salesperson in the transaction, furnish monthly account statements showing the market value of each penny stock held in the customer’s account, provide a special written determination that the penny stock is a suitable investment for the purchaser, and receive the purchaser’s written agreement to the transaction.

Legal remedies available to an investor in “penny stocks” may include the following:

● If a “penny stock” is sold to the investor in violation of the requirements listed above, or other federal or states securities laws, the investor may be able to cancel the purchase and receive a refund of the investment.

● If a “penny stock” is sold to the investor in a fraudulent manner, the investor may be able to sue the persons and firms that committed the fraud for damages.

These requirements may have the effect of reducing the level of trading activity, if any, in the secondary market for a security that becomes subject to the penny stock rules. The additional burdens imposed upon broker-dealers by such requirements may discourage broker-dealers from effecting transactions in our securities, which could severely limit the market price and liquidity of our securities. These requirements may restrict the ability of broker-dealers to sell our common stock and may affect your ability to resell our common stock.

Many brokerage firms will discourage or refrain from recommending investments in penny stocks. Most institutional investors will not invest in penny stocks. In addition, many individual investors will not invest in penny stocks due, among other reasons, to the increased financial risk generally associated with these investments.

For these reasons, penny stocks may have a limited market and, consequently, limited liquidity. We can give no assurance at what time, if ever, our common stock will not be classified as a “penny stock” in the future.

You will experience immediate and substantial dilution as a result of this offering and may experience additional dilution in the future.

You will incur immediate and substantial dilution as a result of this offering. After giving effect to the sale by us of up to _______ shares of common stock offered in this offering, at a public offering price of $______ per share, and after deducting the underwriters’ discounts and commissions and other estimated offering expenses payable by us, investors in this offering can expect an immediate dilution of approximately $_____ per share, or ______%, at the assumed public offering price.

Shares eligible for future sale may adversely affect the market.

From time to time, certain of our stockholders may be eligible to sell all or some of their shares of common stock by means of ordinary brokerage transactions in the open market pursuant to Rule 144 promulgated under the Securities Act, subject to certain limitations. In general, pursuant to Rule 144, non-affiliate stockholders may sell freely after six months, subject only to the current public information requirement. Affiliates may sell after six months, subject to the Rule 144 volume, manner of sale (for equity securities), current public information, and notice requirements. Of the approximately _________ shares of our common stock and restricted stock awards outstanding as of ______, 2023, approximately ___________ shares are tradable without restriction. Given the limited trading of our common stock, resale of even a small number of shares of our common stock pursuant to Rule 144 or an effective registration statement may adversely affect the market price of our common stock.

Anti-takeover provisions contained in our certificate of incorporation and bylaws, as well as provisions of Delaware law, could impair a takeover attempt.

The Company’s certificate of incorporation and bylaws contain provisions that could have the effect of delaying or preventing changes in control or changes in our management without the consent of our board of directors. These provisions include:

●

no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;

	●	the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of the board of directors or the resignation, death, or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors;

	●	the ability of our board of directors to determine whether to issue shares of our preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer;

	●	limiting the liability of, and providing indemnification to, our directors and officers;

	●	providing that a special meeting of the stockholders may only be called by a majority of the board of directors;

	●	providing that directors may be removed prior to the expiration of their terms by the affirmative vote of the holders of not less than two-thirds (2/3) of the voting power of the issued and outstanding stock entitled to vote;

	●	providing that the bylaws may be altered, amended or repealed by the board of directors by an affirmative vote of a majority of the board of directors at any regular meeting of the board of directors; and

	●	advance notice procedures that stockholders must comply with in order to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of the Company.

These provisions, alone or together, could delay hostile takeovers and changes in control of the Company or changes in our board of directors and management.

Any provision of our certificate of incorporation or bylaws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our security holders to receive a premium for their securities and could also affect the price that some investors are willing to pay for our securities.

Provisions in our charter documents and Delaware law may delay or prevent our acquisition by a third party.

Our amended and restated certificate of incorporation and amended and restated bylaws, and Delaware law, contain several provisions that may make it more difficult for a third party to acquire control of us without the approval of our Board of Directors. These provisions may make it more difficult or expensive for a third party to acquire a majority of our outstanding equity interests. These provisions also may delay, prevent or deter a merger, acquisition, tender offer, proxy contest or other transaction that might otherwise result in our stockholders receiving a premium over the market price for their common stock. See “Description of Securities.”

We have never paid dividends on our common stock and have no plans to do so in the future.

Holders of shares of our common stock are entitled to receive such dividends as may be declared by our Board of Directors. To date, we have paid no cash dividends on our shares of common stock, and we do not expect to pay cash dividends on our common stock in the foreseeable future. We intend to retain future earnings, if any, to provide funds for the operations of our business. Therefore, any return investors in our common stock may have will be in the form of appreciation, if any, in the market value of their shares of common stock. See “Dividend Policy.”

We will indemnify and hold harmless our officers and directors to the maximum extent permitted by Delaware law.

Our certificate of incorporation, as amended, provides that we will indemnify and hold harmless our officers and directors against claims arising from our activities to the maximum extent permitted by Delaware law. If we were called upon to perform under our indemnification obligations, then the portion of our assets expended for such a purpose would reduce the amount otherwise available for our business.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that involve risks and uncertainties. The forward-looking statements are contained principally in “Prospectus Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business.” In some cases, you can identify forward-looking statements by terms such as “target,” “may,” “might,” “will,” “objective,” “intend,” “should,” “could,” “can,” “would,” “expect,” “believe,” “design,” “estimate,” “continue,” “predict,” “potential,” “plan,” “anticipate” or the negative of these terms, and similar expressions intended to identify forward-looking statements. These statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties. Given these assumptions, risks and uncertainties, you should not place undue reliance on these forward-looking statements. All forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that we expected, including:

●

our ability to successfully maintain increases in our comparable restaurant sales and AUVs;

●

our ability to successfully execute our growth strategy and open new restaurants that are profitable;

●

the impact of the COVID-19 pandemic or future pandemics;

●

our ability to expand in existing and new markets;

●

our projected growth in the number of our restaurants;

●

macroeconomic conditions and other economic factors;

●

our ability to compete with many other restaurants;

●

our reliance on vendors, suppliers and distributors, including Onodera Group Co., Ltd.;

●

concerns regarding food safety and foodborne illness;

●

changes in consumer preferences and the level of acceptance of our restaurant concept in new markets;

●

minimum wage increases and mandated employee benefits that could cause a significant increase in our labor costs;

●

the failure of our automated equipment or information technology systems or the breach of our network security;

●

the loss of key members of our management team;

●

the impact of governmental laws and regulations; and

●

volatility in the price of our common stock.

●

those other risk factors described in this prospectus supplement and our reports filed with the SEC and incorporated by reference into this prospectus supplement.

We discuss many of these risks in this prospectus in greater detail under the heading “Risk Factors.” Also, these forward-looking statements represent our estimates and assumptions only as of the date of this prospectus. Unless required by United States federal securities laws, we do not intend to update any of these forward-looking statements to reflect circumstances or events that occur after the statement is made.

The market data and certain other statistical information used throughout this prospectus are based on independent industry publications, governmental publications, reports by market research firms or other independent sources. Some data are also based on our good faith estimates. Although we believe these third-party sources are reliable, we have not independently verified the information attributed to these third-party sources and cannot guarantee its accuracy and completeness. Similarly, our estimates have not been verified by any independent source.

You should read this prospectus and the documents that we reference in this prospectus and have filed as exhibits to the registration statement, of which this prospectus is a part, completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

USE OF PROCEEDS

We estimate that the net proceeds we will receive from this offering will be approximately $____ million based on an assumed initial public offering price of $_____ per share, which is the midpoint of the price range set forth on the cover of this prospectus, after deducting the underwriting discounts and commissions and estimated offering expenses payable by us. If the underwriters’ option to purchase additional shares in this offering from us is exercised in full, our net proceeds will be approximately $____ million after deducting the underwriting discounts and commissions and estimated offering expenses payable by us.

Each $1.00 increase (decrease) in the assumed initial public offering price of $_____ per share of common stock, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, would increase (decrease) net proceeds to us from this offering by approximately $____ million, assuming that the number of shares of common stock offered by us, as set forth on the cover page of this prospectus, remains the same. We may also increase or decrease the number of shares of common stock we are offering. Each 100,000 increase (decrease) in the number of shares of common stock we are offering would increase (decrease) the net proceeds to us from this offering by approximately $____ million, assuming no change in the assumed initial public offering price per share.

We intend to use approximately $0.8 million of the net proceeds we receive from this offering to repay $0.8 million outstanding principal and accrued interest of the long-term loans from Onodera Group Co., Ltd. to our subsidiary, Ginza Onodera USA Inc. On May 25, 2023, Onodera Group Co., Ltd. loaned 60,000,000 yen (approximately $452,000) to Onodera Food Service Co., Ltd. Such loan matures on August 24, 2023, and bears interest at a rate of 0.5 percent (0.5%) per year. Onodera Group Co., Ltd. loaned 20,000,000 yen (approximately $151,000) on May 18, 2023, and 80,000,000 yen (approximately $603,000) on July 19, 2023, to Ginza Onodera USA Inc. Such loan matures on May 17, 2024, and July 18, 2024, and bears interest at a rate of 0.5 percent (0.5%) per year.

We intend to use the balance of the net proceeds to fund the capital investments and working capital for opening new restaurants.

Our expected use of net proceeds from this offering represents our current intentions based upon our present plans and business condition. As of the date of this prospectus, we cannot predict with certainty all of the particular uses for the net proceeds to be received upon the completion of this offering or the amounts that we will actually spend. The amounts and timing of our actual use of net proceeds will vary depending on numerous factors. As a result, our management will have broad discretion in the application of the net proceeds of this offering, and investors will be relying on our judgment regarding the application of the net proceeds.

Pending use of the net proceeds from this offering as described above, we may invest the net proceeds in short-and intermediate-term interest-bearing obligations, investment-grade instruments, certificates of deposit or direct or guaranteed obligations of the United States government.

DIVIDEND POLICY

No dividends have been declared or paid on our shares of common stock. We do not anticipate paying any cash dividends on shares of our common stock in the foreseeable future. We currently intend to retain any earnings to finance the development and expansion of our business. Any future determination to pay dividends will be at the discretion of our Board of Directors and will be dependent upon then-existing conditions, including our earnings, capital requirements, results of operations, financial condition, business prospects and other factors that our Board of Directors considers relevant. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Certain Relationships and Related Party Transactions” for additional information regarding our financial condition.

CAPITALIZATION

The following table sets forth our capitalization as of September 30, 2023:

●	on an actual basis;

●

on a pro forma basis to reflect long-term loans subsequent to September 30, 2023, in the aggregate principal amount of $1.2 million from Onodera Group Co., Ltd. to Sushi Ginza Onodera, Inc. and Ginza Onodera USA Inc. and approximately $1.9 million loan from financial institutions to Onodera Food Service Co., Ltd; and

●

on a pro forma as adjusted basis, and to give effect to the (i) sale of ______ shares of common stock in this offering at an assumed initial public offering price of $____ (the midpoint of the price range set forth on the cover page of this prospectus) after deducting estimated underwriting discounts and estimated offering expenses payable by us, and the application of the net proceeds thereof and (ii) repayment of $1.3 million of the outstanding principal and accrued interest of the long term loans from Onodera Group Co., Ltd. to Sushi Ginza Onodera, Inc. and Ginza Onodera USA Inc.

The pro forma as-adjusted information below is illustrative only and our capitalization following the completion of the initial public offering is subject to adjustment based on the initial public offering price of our common stock and other terms of the initial public offering determined at pricing. You should read this table together with our financial statements and the related notes included elsewhere in this prospectus and the information under “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

				As of September 30, 2023
(in thousands, except share and per share data)	Actual (unaudited)			Pro Forma	Pro Forma As Adjusted⁽¹⁾⁽²⁾
Cash and cash equivalents	$	2,945		$	$

Total non-current liabilities		9,626

Stockholder’s Equity:
Common stock, $0.00001 par value per share (100,000,000 shares authorized, 7,000,000 shares issued and outstanding, actual; _________ shares authorized, ____________ shares issued and outstanding, pro forma; _________ shares authorized, ____________ shares issued and outstanding, pro forma as adjusted)		-
Additional paid-in capital		23,228
Retained earnings (accumulated deficiency)		(12,853	)
Accumulated other comprehensive loss		(1,266	)
Stockholders’ Equity		9,109
Noncontrolling interests		203
Total stockholders’ equity		9,312
Total capitalization	$	18,938		$	$

(1)

The number of shares of common stock to be outstanding after this offering is based on 7,000,000 which is the number of shares outstanding on September 30, 2023, assumes no exercise by the Representative of its option to purchase up to an additional _______ shares of common stock to cover over-allotments, if any, and excludes (i) _____ options outstanding as of September 30, 2023 under the Plan with a weighted average exercise price of $_____ per share, (ii) __________ shares of common stock underlying options to be granted under the Plan to key employees and directors immediately after the registration statement of which this prospectus is a part is declared effective at an exercise price equal to the initial public offering price, (iii) __________ shares of common stock reserved for future issuance under the Plan, of which we will grant options to purchase an aggregate of _____ shares of our common stock to key employees and directors immediately after the registration statement of which this prospectus is a part is declared effective (as described in the bullet immediately above), and (iv) __________ shares of common stock issuable upon exercise of the Representative’s Warrants to be issued upon completion of this offering, representing 5.0% of the aggregate number of shares of common stock sold in this offering, assuming the exercise of the Representative’s over-allotment option by in full. If the Representative’s over-allotment option is exercised in full, pro forma as adjusted cash and cash equivalents, total stockholders’ equity, total capitalization and common stock outstanding as of September 30, 2023, would be $____ million, $______million, $______million, and ____shares, respectively.

(2)

Each $1.00 increase (decrease) in the assumed initial public offering price of $___ per share, the midpoint of the price range set forth on the cover of this prospectus, would increase (decrease) our as adjusted cash and cash equivalents, additional paid-in capital, total stockholder’s equity and total capitalization by approximately $___ million, assuming that the number of shares of common stock offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. We may also increase or decrease the number of shares of common stock we are offering. Each 100,000 increase (decrease) of in the number of shares of common stock we are offering would increase (decrease) our as adjusted cash and cash equivalents, additional paid-in capital, total stockholder’s equity and total capitalization by approximately $____ million, assuming no change in the assumed initial public offering price per share, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

(3)

We intend to use approximately $1.3 million of the net proceeds we receive from this offering to repay $1.3 million of the outstanding principal and accrued interest under our term loans. The term loans have scheduled maturities on May 17, 2024, for approximately $0.1 million of indebtedness, July 18, 2024, for approximately $0.5 million of indebtedness, and October 18, 2024, for approximately $0.7 million of indebtedness.

In the year ending March 31, 2024, Onodera Group will provide approximately $3.5 million in additional loans including the above mentioned $0.8 million of the outstanding principal to fund the anticipated transition to public company status as a result of this offering and Kaiten Sushi Hawaii facilities. The Company plans to repay approximately $1 million per year from business revenues for the above new loans. Upon completion of this offering, the Company will not receive additional funding from Onodera Group and will use other available sources of liquidity, as further described below. For investment funds for new restaurants in Japan, we plan to borrow from Japanese financial institutions. On July 21, 2023, our subsidiary, Onodera Food Service Co., Ltd., entered into a 250 million yen ($1.7 million) overdraft agreement with Resona Bank, Ltd. and borrowed 210 million yen ($1.4 million) on July 25, 2023, and 40 million yen ($0.3 million) on August 31, 2023, to fund facilities for the Kaiten Sushi Kyoto restaurant. The company also plans to borrow 280 million yen ($1.9 million) from Japanese financial institutions at an expected interest rate of approximately 0.8% to fund facilities for the Kaiten Sushi Osaka restaurant. The Company has not entered into agreements as of yet with regard to such anticipated loans with such Japanese financial institutions. These loans are planned to be repaid in 7 years from the earnings of the opened stores. There can be no assurance that the Company will enter into such agreements on the terms contemplated, if at all, or that such loans will be repaid with such earnings and within the time period describe ed in the preceding sentence. See “Use of Proceeds.”

DILUTION

Dilution is the amount by which the initial public offering price paid by purchasers of shares of our common stock exceeds the net tangible book value per share of our equity interests immediately following the completion of the offering. Net tangible book value represents the amount of our total tangible assets reduced by our total liabilities. Net tangible book value per share represents our net tangible book value divided by the number of shares of our common stock outstanding. The Company defines total tangible assets as total assets less intangible assets (including deferred tax assets and deferred offering costs). As of September 30, 2023, prior to giving effect to the offering, our net tangible book value was $9.3 million and our net tangible book value per share was $1.32.

After giving effect to (i) the issuance and sale of the ______ shares of common stock offered in this offering and the application of the estimated net proceeds of this offering received by us, as described in “Use of Proceeds,” based upon an assumed initial public offering price of $___ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, (ii) incurrence of long-term loans subsequent to September 30, 2023 in the aggregate principal amount of $8 million from Onodera Group Co., Ltd. to our two subsidiaries, Onodera Food Service Co., Ltd. and Ginza Onodera USA Inc., and (iii) repayment of $0.80 million of the outstanding principal and accrued interest of the long term loans from Onodera Group Co., Ltd. to our two subsidiaries, Onodera Food Service Co., Ltd. and Ginza Onodera USA Inc., our net tangible book value as of September 30, 2023 would have been approximately $____ million, or $____ per share of common stock. This represents an immediate increase in the net tangible book value to our existing stockholder, Onodera Group Co., Ltd., of $_____ per share and an immediate dilution to new investors in this offering of $_____ per share. The following table illustrates this per share dilution net tangible book value to new investors after giving effect to this offering:

Assumed initial public offering price per share			$
Net tangible book value per share as of September 30, 2023	$	1.32
Increase in net tangible book value per share attributable to new investors	$
Adjusted net tangible book value per share after this offering			$
Dilution per share to new investors			$

A $1.00 increase (decrease) in the assumed initial public offering price of $____ per share would increase (decrease) our net tangible book value by $_____ million, the net tangible book value per share after this offering by $_____ and the dilution per share to new investors by $____, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

If the Representative exercises its over-allotment option in full, the net tangible book value per share of our common stock after giving effect to this offering would be $____ per share, which amount represents an immediate increase in net tangible book value of $_____ per share to LEOC Co., Ltd. and the immediate dilution in net tangible book value per share to new investors in this offering of $_____ per share.

The following table presents, as of September 30, 2023, the differences between the number of shares purchased from us, the total consideration paid to us, and the average price per share paid by LEOC Co., Ltd. and by new investors purchasing common stock at the assumed initial offering price of $_____ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, before deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

	Shares Purchased					Total Consideration					Average Price
	Number		Percent			Amount		Percent			Per Share
LEOC Co., Ltd.		7,000,000			%	$	22,805,000			%	$	3.26
New investors
Total				100.0	%			$	100.0	%	$

The foregoing table is based on 7,000,000 shares of common stock issued and outstanding as of September 30, 2023, and assumes no exercise by the Representative of its option to purchase up to an additional _________ shares of common stock to cover over-allotments, if any, and excludes (i) _____ options outstanding as of September 30, 2023 under the Plan with a weighted average exercise price of $_____ per share, (ii) __________ shares of common stock underlying options to be granted under the Plan to key employees and directors immediately after the registration statement of which this prospectus is a part is declared effective at an exercise price equal to the initial public offering price, (iii) __________ shares of common stock reserved for future issuance under the Plan, of which we will grant options to purchase an aggregate of _____ shares of our common stock to key employees and directors immediately after the registration statement of which this prospectus is a part is declared effective (as described in the bullet immediately above), and (iv) __________ shares of common stock issuable upon exercise of the Representative’s Warrants to be issued upon completion of this offering, representing 5.0% of the aggregate number of shares of common stock sold in this offering, assuming the exercise of the Representative’s over-allotment option by in full. To the extent any outstanding options or other equity awards are exercised or become vested, or any additional options or other equity awards are granted and exercised or become vested or other issuances of shares of our common stock are made, there may be further economic dilution to new investors.

If the underwriters were to fully exercise their option to purchase ______ additional shares of our common stock, the percentage of shares of our common stock held by LEOC Co., Ltd. after this offering would be ____%, and the percentage of shares of our common stock held by new investors after this offering would be _____%.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes and other financial information included elsewhere in this prospectus. Some of the information contained in this discussion and analysis or set forth elsewhere in this prospectus, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. You should review the “Special Note Regarding Forward-Looking Statements” and “Risk Factors” sections of this prospectus for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Overview

Sushi Ginza Onodera, Inc., a Delaware corporation (the “Company”), is a food service company headquartered in the Otemachi district of the Chiyoda ward in Tokyo, Japan. The Company opened its first restaurant in Ginza, Tokyo in 2013. The Company now operates 13 sushi, tempura, teppanyaki, and makiyaki (firewood cuisine) restaurants in regions around the world. The restaurants in Japan that are operated by the Company consist of Kaiten Sushi Ginza Onodera Kyoto in Kyoto, Japan, as well as Sushi Ginza Onodera Souhonten, Sushi Ginza Onodera Honten, Tempura Ginza Onodera Higashi-ginza, Tempura Ginza Onodera Namiki Dori, Makiyaki Ginza Onodera, Sushi Ginza Onodera Otouto Honten, Sushi Ginza Onodera Toryumon, Kaiten Sushi Ginza Onodera Honten, and Tachiguisushi Ginza Onodera Honten in Tokyo, Japan. The Company also operates restaurants within the United States and China, consisting of Sushi Ginza Onodera in Los Angeles, California, Sushi Ginza Onodera in Honolulu, Hawaii and Ginza Onodera Shanghai in Shanghai, China. The Company’s slogan is “From Ginza to the World,” which embodies the Company’s mission of spreading refined Japanese culture throughout the world by providing a unique and culturally authentic food experience to every customer.

Reorganization and Share Exchange

On August 1, 2023, Onodera Group Co., Ltd., a Japanese corporation, made an investment in kind of all issued and outstanding common shares of Onodera Food Service Co., Ltd. (100 shares) and Sushi Ginza Onodera Inc. (5 shares) to LEOC Co., Inc., a Japanese corporation. On August 22, 2023, pursuant to the terms of a share exchange agreement among Sushi Ginza Onodera, Inc. and LEOC Co., Ltd., we issued 29,999,995 shares of our common stock to LEOC Co., Ltd. in exchange for all outstanding shares of common stock of Onodera Food Service Co., Ltd., which holds 100% of the issued and outstanding capital stock of Ginza Onodera California, Inc. (formed in California) and Ginza Onodera USA Inc. (formed in Hawaii), and which holds 90% of the issued and outstanding capital stock of the Ginza Onodera Shanghai (formed in Shanghai, China).

The acquisition of Onodera Food Service Co., Ltd. was accounted for as a recapitalization among entities under common control since the same controlling shareholders controlled all these entities before and after the transaction. The consolidation of Sushi Ginza Onodera, Inc. and its subsidiaries has been accounted for at historical cost and prepared on the basis as if the transaction had become effective as of the beginning of the first period presented in the accompanying consolidated financial statements.

Reverse Stock Split

On November 27, 2023, our board of directors and shareholders holding a majority of the voting power of our issued and outstanding voting capital stock approved the Reverse Stock Split in a ratio of 1-for-4.28571429. On December 1, 2023, we filed a certificate of amendment to our Certificate of Incorporation, as amended (the “Certificate of Incorporation”), implementing the reverse stock split in a ratio of 1-for-4.28571429, effective December 1, 2023.

Except as otherwise indicated, all references to our common stock, share data, per share data and related information has been adjusted for the Reverse Stock Split ratio of 1-for-4.28571429 as if it had occurred at the beginning of the earliest period presented. The Reverse Stock Split, combined each four point two eight five seven one four two nine shares of our outstanding common stock into one share of common stock, without any change in the par value per share, and the Reverse Stock Split correspondingly adjusted, among other things, the exercise rate of our warrants into our common stock. No fractional shares were issued in connection with the Reverse Stock Split, and any fractional shares resulting from the Reverse Stock Split were rounded up to the nearest whole share.

Growth

Comparing sales trends for stores that have been in operation for more than one year as of the end of March 2023, sales have more than doubled, growing 109.9% over the five-year period from the year ended March 31, 2018 to the year ended March 31, 2023, as shown in the table below (the number of stores has also grown from six in the year ended March 31, 2018 to 13 in the year ended March 31, 2023).

The Kaiten Sushi Ginza Onodera Honten, which opened in October 2021, has grown into a high-margin business with sales of $4.8 million per restaurant and $1.1 million net income (22.9% of sales) for the year ended March 31, 2023. These Kaiten sushi establishments create a more accessible, value-oriented avenue for customers who seek to taste the high-quality associated with the Onodera brand at an affordable price. By targeting a new target market of individuals separate from the high-end establishments, we aim to diversify our offerings and broaden our customer base to reach more cost cautious individuals.

Business Trends

The food and beverage industry must continue to provide services that customers appreciate, depending on the economic situation at the time, customer preferences and trends, etc. We have been expanding our business opportunities by boldly trying to open new stores in new business categories and at different price points than before, rather than relying solely on sales at existing stores.

The sushi industry has a high turnover rate, and it is very difficult to nurture artisans. Generally, it is said that sushi artisans need more than 10 years of training before they can make sushi, and many young apprentices cannot endure a long period of training and quit halfway through. However, we believe that by operating stores in different business categories and price ranges, we are able to give apprentices places to work and opportunities to learn according to their level of growth, and we believe we can reduce turnover and nurture artisans by giving them opportunities to practice making sushi from an early stage of their career. By doing so, we can continue to provide customers with high quality products even as we open new stores.

Key Performance Indicators

In assessing the performance of our business, we consider a variety of financial and performance measures. The key measures for determining how our business are performing include sales, EBITDA, Average Unit Volumes (AUVs), comparable restaurant sales growth, and number of restaurant openings and revenue per square foot.

Sales

Sales represents sales of food and beverages in restaurants, as shown in our statements of income. Several factors affect our restaurant sales in any given period including the number of restaurants in operation, guest traffic and average check.

EBITDA

EBITDA is defined as net income before interest, income taxes and depreciation and amortization.

We believe that the use of EBITDA provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing the Company’s financial measures with those of comparable companies, which may present similar non-GAAP financial measures to investors. However, you should be aware when evaluating EBITDA that in the future we may incur expenses similar to those excluded when calculating these measures. In addition, our presentation of these measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

The following table reconciled Net income to EBITDA for the years ended March 31, 2023, and 2022, and for the six months ended September 30, 2023 and September 30, 2022 respectively:

(amounts in thousands)	Fiscal Years Ended March 31,				Six Months Ended September 30,
	2023		2022		2023		2022
Net income, as reported	$	1,094	$	456	$	936	$	614
Interest expense		-		-		3		-
Interest expenses to related parties		64		68		1		33
Taxes		631		138		378		286
Depreciation and amortization		602		609		120		328
EBITDA		2,391		1,271		1,438		1,261

Comparable Restaurant Sales Growth

Comparable restaurant sales growth refers to the change in year-over-year sales for the comparable restaurant base. We include restaurants in the comparable restaurant base that have been in operation for at least 18 months prior to the start of the accounting period presented. Growth in comparable restaurant sales represents the percent change in sales from the same period in the prior year for the comparable restaurant base. For the years ended March 31, 2023, and March 31, 2022, there were eight and eight restaurants, respectively, in our comparable restaurant base. For the six months ended September 30, 2023 and September 30, 2022, there were eight and eight restaurants, respectively, in our comparable restaurant base. This measure highlights the performance of existing restaurants, as the impact of new restaurant openings is excluded. The small number of restaurants in our comparable restaurant base may cause this measure to fluctuate and be unpredictable. The comparable restaurant sales growth measure is calculated excluding one restaurant, which closed in the year ended March 31, 2021 and one restaurant, which closed in the year ended March 31, 2022 and one restaurant, which closed during the six months ended September 30, 2023.

Measuring our comparable restaurant sales growth allows us to evaluate the performance of our existing restaurant base. Various factors impact comparable restaurant sales, including:

●

consumer recognition of our brand and our ability to respond to changing consumer preferences;

●

overall economic trends, particularly those related to consumer spending;

●

our ability to operate restaurants effectively and efficiently to meet consumer expectations;

●

pricing;

●

guest traffic;

●

per-guest spend and average check;

●

marketing and promotional efforts;

●

local competition; and

●

opening of new restaurants in the vicinity of existing locations.

Since we expect opening new restaurants will be a significant component of our sales growth, comparable restaurant sales growth is only one measure of how we evaluate our performance. The following table shows the comparable restaurant sales growth for the year ended March 31, 2023, and March 31, 2022, and for the six months ended September 30, 2023 and September 30, 2022 respectively:

	Fiscal Years Ended March 31,						Six Months Ended September 30,
	2023			2022			2023			2022
Comparable restaurant sales growth (%)		(4.6	)%		26.3	%		22.4	%		(10.7	)%
- Japan		13.0	%		16.7	%		21.8	%		30.3	%
- China		(36.8	)%		0.2	%		60.1	%		(61.2	)%
- USA		10.3	%		131.8	%		3.8	%		17.7	%
Comparable restaurant base		8			8			8			8

In the year ended March 31, 2022, sales showed a significant recovery from the year ended March 31, 2021, when sales were restricted due to COVID-19, with an overall sales increase of 26.3% over the prior year. In the year ended March 31, 2023, sales in Japan and the U.S. grew steadily by 13.0% and 10.3%, which we believe is due to the positive brand recognition and marketing effects of aggressive new store openings, while sales in China declined by 36.8% due to COVID-19 restrictions in the first quarter of 2022. As a result of these situations, overall sales growth in the year ended March 31, 2023 declined 4.6% from the prior year.

The 22.4% increase of the comparable restaurant sales growth during the six months ended September 30, 2023, and the 10.7% decrease of the comparable restaurant sales growth during the six months ended September 30, 2022, were due to similar reasons as the changes from the year ended March 31, 2023, and the year ended March 31, 2022. The Shanghai restaurant was unable to open for business in April and May 2022 due to the government curfew imposed by COVID-19, and the impact of this curfew was significant during the six months ended September 30, 2022.

Number of Restaurant Openings

The number of restaurant openings reflects the number of restaurants opened during a particular reporting period. Before we open new restaurants, we incur pre-opening costs. New restaurants may not be profitable, and their sales performance may not follow historical patterns. The number and timing of restaurant openings has had, and is expected to continue to have, an impact on our results of operations. The following table shows the growth in our restaurant base for the year ended March 31, 2023, March 31, 2022 and March 31, 2021, and for the six months ended September 30, 2023 and September 30, 2022, respectively:

(amounts in thousands)	Fiscal Years Ended March 31,						Six Months Ended September 30,
	2023		2022		2021		2023		2022
Restaurant activity
Beginning of period		12		10		11		13		12
Opening		1		3		-		1		1
Closing		-		1		1		1		-

End of period		13		12		10		13		13

Average Unit Volumes (AUVs)

“Average Unit Volumes” or “AUVs” consist of the average annual sales of all restaurants that have been open for 18 months or longer at the end of the fiscal year presented. AUVs are calculated by dividing (x) annual sales for the fiscal year presented for all such restaurants by (y) the total number of restaurants in that base. The AUVs measure is calculated excluding one restaurant, which closed in the year ended March 31, 2021 and one restaurant, which closed in the year ended March 31, 2022 and one restaurant, which closed in the six months ended September 30, 2023 (Discontinued operations). Since AUVs are calculated based on annual sales for the fiscal year presented, they are not presented in this prospectus on an interim basis, if any.

Typically, our new restaurants have historically tended to gain recognition and sales as the number of months in operation increases, with no “honeymoon” period during which sales generally rise at the time of opening. In new markets, the length of time before average sales for new restaurants stabilize is less predictable as a result of our limited knowledge of these markets and consumers’ limited awareness of our brand. First quarter sales for the three stores opened in the year ended March 31, 2022 increased 71.8% in the second year compared to the same period in the first year. New restaurants usually become profitable in the second or third quarter after opening. However, new restaurants may not be profitable, and their sales performance may not follow historical patterns. In addition, our average restaurant sales and comparable restaurant sales may not increase at the rates achieved over the past several years.

(in thousands)	Fiscal Years Ended March 31,
	2023		2022
Average Unit Volumes ($)		1,747		1,832

Revenue Per Square Foot

Revenue per square foot means the annual restaurant sales for all restaurants opened a full 18 months before the end of the period measured divided by the average square footage of such restaurants. This measurement allows management to assess the effectiveness of our approach to real estate selection and the overall performance of our restaurant base. The following table shows the revenue per square foot for the twelve-month periods ended March 31, 2023, and March 31, 2022

	Fiscal Years Ended March 31,
	2023		2022
Revenue per square foot ($)		1,132		1,090

Average check

Average check means the dollars spent per guest in our restaurants and aids management in identifying trends in guest preferences and the effectiveness of menu changes and price increases. The following table shows the average check for the twelve-month periods ended March 31, 2023, and March 31, 2022 and for the six months ended September 30, 2023 and September 30, 2022, respectively:

Fiscal Years Ended

March 31,

Six Months Ended

September 30,

2023

2022

2023

2022

Average check ($)

106.67

179.16

90.41

111.06

In the year ended March 31, 2023 average check decreased from $179.16 to $106.67, down 40.5% from the year ended March 31, 2022, this was due to the opening of new business categories, Sushi Ginza Onodera Otouto Honten, Sushi Ginza Onodera Toryumon, and Kaiten Sushi Ginza Onodera Honten, which have lower price points compared to the existing high-end restaurant. Although the overall average check has been lowered by widening the price range, the Company has succeeded in significantly increasing the number of customers (94% increase from the prior year), resulting in overall sales of $20.7 million (16.8% increase from the prior year) and net income of $2.2 million (17.4% increase from the prior year), achieving high growth.

In the six months ended September 30, 2023 average check decreased from $111.06 to 90.41, down 18.6% from the six months ended September 30, 2022, this was due to similar reasons as the changes from the year ended March 31, 2023, and the year ended March 31, 2022.

Financial Definitions

Sales. Sales represent sales of food and beverages in restaurants. Restaurant sales in each period are directly impacted by the number of restaurants we operate and comparable restaurant sales growth.

Food and beverage costs. Food and beverage costs are variable in nature, change with sales volume and are influenced by menu mix and subject to increases or decreases based on fluctuations in commodity costs. Other important factors causing fluctuations in food and beverage costs include seasonality and restaurant-level management of food waste. Food and beverage costs are a substantial expense and are expected to grow proportionally as our sales grow.

Labor and related expenses. Labor and related expenses include all restaurant-level management and hourly labor costs, including wages, employee benefits and payroll taxes. Similar to the food and beverage costs that we incur, labor and related expenses are expected to grow proportionally as our sales grow. Factors that influence fluctuations in our labor and related expenses include minimum wage and payroll tax legislation, the frequency and severity of workers’ compensation claims, healthcare costs and the performance of our restaurants.

Occupancy and related expenses. Occupancy and related expenses include rent for all restaurant locations.

Depreciation and amortization expenses. Depreciation and amortization expenses are periodic non-cash charges that consist of depreciation of fixed assets, including equipment and capitalized leasehold improvements. Depreciation is determined using the straight-line method over the assets’ estimated useful lives, ranging from three to 18 years.

Other costs. Other costs include utilities, repairs and maintenance, credit card fees, and other restaurant-level expenses.

General and administrative expenses. General and administrative expenses include expenses associated with corporate and regional supervision functions that support the operations of existing restaurants and development of new restaurants, including compensation and benefits, travel expenses, legal and professional fees, marketing costs, information systems, corporate office rent and other related corporate costs. General and administrative expenses are expected to grow as our sales grow, including incremental legal, accounting, insurance and other expenses incurred as a public company.

Interest expense. Interest expenses include non-cash charges related to our capital lease obligations.

Interest income. Interest income includes income earned on our investments.

Income tax expense (benefit). Provision for income taxes represents federal, state and local current and deferred income tax expenses.

Results of Operations

Six months ended September 30, 2023, Compared to six months ended September 30, 2022.

The following table presents selected comparative results of operations from our unaudited financial statements for the six months ended September 30, 2023, compared to the six months ended September 30, 2022. Our financial results for these periods are not necessarily indicative of the financial results that we will achieve in future periods. Certain totals for the table below may not sum to 100% due to rounding. The data should be read in conjunction with our audited financial statements included elsewhere in this prospectus.

(amounts in thousands, except share and per share data)	Six Months Ended September 30,						Increase / (Decrease)
	2023			2022			Dollars			Percentage
Statements of operations Data:
Revenues	$	11,794		$	9,416		$	2,378			25.3	%
Restaurant operating costs:
Food and beverage costs		3,562			3,021			541			17.9
Labor and related costs		3,402			2,893			509			17.6
Occupancy and related expenses		1,293			1,099			194			17.7
Depreciation and amortization expenses		121			328			(207	)		(63.1	)
Costs to related parties		2			-			2			1,574.7
Other costs		1,354			985			369			37.5

Total restaurant operating costs		9,734			8,326			1,408			16.9

General and administrative expenses		1,443			1,018			425			41.7
Depreciation and amortization expenses		-			1			(1	)		-
Total operating expenses		11,177			9,345			1,832			19.6
Income (loss) from continuing operations		617			71			546			769.0
Other income (expense):
Other income		701			902			(201	)		22.3
Other expense		(4	)		(73	)		69			-
Total other income (expenses)		697			829			(132	)		(15.9	)
Income from continuing operations before income taxes		1,314			900			414			46.0
Income tax (benefit) expense		378			286			92			32.2
Income from continuing operations		936			614			322			52.4
Income from discontinued operations, net of income taxes		1,068			1,779			(711	)		(40.0	)
Net income		2,004			2,393			(389	)		(16.3	)
Less: net income (loss) attributable to noncontrolling interests		13			(18	)		31			-
Net income attributable to Sushi Ginza Onodera, Inc.	$	1,991		$	2,411		$	(420	)		(17.4	)%

Income per common share attributable to Sushi Ginza Onodera, Inc. – basic:
Continuing operations	$	0.13		$	0.09		$	0.04			44.4	%
Discontinued operations		0.15			0.25			(0.10	)		(40.0	)
Net income per share–- basic	$	0.28		$	0.34		$	(0.06	)		(17.6	)
Income per common share attributable to Sushi Ginza Onodera, Inc. – diluted:
Continuing operations	$	0.13		$	0.09		$	0.04			44.4	%
Discontinued operations		0.15			0.25			(0.10	)		(40.0	)
Net income per share–- diluted	$	0.28		$	0.34		$	(0.06	)		(17.6	)
Weighted average common shares outstanding
Basic		7,000,000			6,999,999			1			-
Diluted		7,000,000			6,999,999			1			-

Comprehensive income:
Net income	$	2,004		$	2,393		$	(389	)		(16.3	)%
Other comprehensive income, net of tax
Foreign currency translation adjustment		(2,075	)		405			(2,480	)		(612.3	)
Other comprehensive income, net of tax		(2,075	)		405			(2,480	)		(612.3	)
Total comprehensive income		(71	)		2,798			(2,869	)		(102.5	)
Comprehensive income (loss) attributable to noncontrolling interests		1			(43	)		44			-
Comprehensive income attributable to Sushi Ginza Onodera, Inc.	$	(72	)	$	2,841		$	(2,913	)		(102.5	)%

	Six Months Ended September 30,
	2023			2022
	(as a percentage of sales)
Statements of operations Data:
Revenues		100.0	%		100.0	%
Restaurant operating costs:
Food and beverage costs		30.2			32.1
Labor and related costs		28.9			30.7
Occupancy and related expenses		11.0			11.7
Depreciation and amortization expenses		1.0			3.5
Costs to related parties		0.0			0.0
Other costs		11.5			10.4

Total restaurant operating costs		82.6			88.4

General and administrative expenses		12.2			10.8
Depreciation and amortization expenses		0.0			0.0
Total operating expenses		94.8			99.2
Income (loss) from continuing operations		5.2			0.8
Other income (expense):
Other income		5.9			9.6
Other expense		(0.0	)		(0.8	)
Total other income (expenses)		5.9			8.8
Income from continuing operations before income taxes		11.1			9.6
Income tax (benefit) expense		3.2			3.0
Income from continuing operations		7.9			6.6
Income from discontinued operations, net of income taxes		9.1			18.8
Net income		17.0			25.4
Less: net income (loss) attributable to noncontrolling interests		(0.1	)		(0.2	)
Net income attributable to Sushi Ginza Onodera, Inc.		17.1	%		25.6	%

Comprehensive income:
Net income		17.0	%		25.4	%
Other comprehensive income, net of tax
Foreign currency translation adjustment		(17.6	)		4.3
Other comprehensive income, net of tax		(17.6	)		4.3
Total comprehensive income		(0.6	)		29.7
Comprehensive income (loss) attributable to noncontrolling interests		(0.2	)		(0.5	)
Comprehensive income attributable to Sushi Ginza Onodera, Inc.		(0.4	)%		30.2	%

Sales. Sales were $11.8 million for the six months ended September 30, 2023 compared to $9.4 million for the six months ended September 30, 2022, representing an increase of approximately $2.4 million, or 25.3%. The increase in sales for the six months ended September 30, 2023 was primarily driven by $1.2 million increase in sales from the three new restaurants opened during the year ended March 31, 2022 and the one new restaurant opened during the year ended March 31, 2023 and the one new restaurant that opened during the six months ended September 30, 2023. Sales in China increased approximately $0.7 million from the six months ended September 30, 2022 to the six months ended September 30, 2023 due to recovery from the government curfew imposed by COVID-19. Our comparable restaurant sales in Japan and the U.S. grew steadily due to the positive brand recognition and marketing effects of aggressive new store openings.

Food and beverage costs. Food and beverage costs were $3.6 million for the six months ended September 30, 2023 compared to $3.0 million for the six months ended September 30, 2022, representing an increase of approximately $0.6 million, or 17.9%. The increase in food and beverage costs for the six months ended September 30, 2023 was primarily driven by sales from the three new restaurants opened during the year ended March 31, 2022 and the one new restaurant opened during the year ended March 31 2023, and the one new restaurant opened during the six months ended September 30, 2023. As a percentage of sales, food and beverage costs decreased to 30.2% in the six months ended September 30, 2023 compared to 32.1% in the six months ended September 30, 2022. The decrease in food and beverage costs as a percentage of sales was primarily driven by the increases in our menu prices which resulted in an increase in sales.

Labor and related costs. Labor and related costs were $3.4 million for the six months ended September 30, 2023 compared to $2.9 million for the six months ended September 30, 2022, representing an increase of approximately $0.5 million, or 17.6%. The increase in labor and related costs was driven by additional labor costs incurred for the six months ended September 30, 2023 with respect to the three new restaurants opened during the year ended March 31, 2022 and the one new restaurant opened in the year ended March 31, 2023 and the one new restaurant opened during the six months ended September 30, 2023. As a percentage of sales, labor and related costs decreased to 28.8% in the six months ended September 30, 2023 compared to 30.7% in the six months ended September 30, 2022 as a result of the increase in sales in Japan, where the marginal cost of labor is cheaper.

Occupancy and related expenses. Occupancy and related expenses were $1.3 million for the six months ended September 30, 2023 compared to $1.1 million for the six months ended September 30, 2022, representing an increase of approximately $0.2 million, or 17.7%. The increase was primarily a result of an additional $0.2 million of occupancy expenses incurred with respect to the one new restaurants opened during the year ended March 31, 2023 and the one new restaurant opened in the six months ended September 30, 2023 and the one new restaurant that will be opened in the year ending March 31, 2024. As a percentage of sales, occupancy and related expenses decreased to 11.0% in the six months ended September 30, 2023, compared to 11.7% for the six months ended September 30, 2022.

Other costs. Other costs were $1.4 million for the six months ended September 30, 2023 compared to $1.0 million for the six months ended September 30, 2022, representing an increase in approximately $0.4 million, or 37.5%. The increase was primarily a result of an additional $0.1 million of other expenses incurred with respect to the one new restaurant opened during the six months ended September 30, 2023, $0.1 million in China due to recovery from the government curfew imposed by COVID-19, $0.1 million as a result of higher sales, and remaining year-over-year increase is due to individually insignificant items. As a percentage of sales, other costs increased to 11.5% in the six months ended September 30, 2023 from 10.5% in the six months ended September 30, 2022.

General and administrative expenses. General and administrative expenses were $1.4 million for the six months ended September 30, 2023 compared to $1.0 million for the six months ended September 30, 2022, representing an increase of approximately $0.4 million, or 41.8%. This increase was primarily a result of an additional $0.3 million of personnel for the anticipated transition to public company status as a result of this offering and due to the increase in the number of restaurants and the strengthening of headquarters personnel for future expansion strategies.

Other income. Other income was $0.7 million for the six months ended September 30, 2023 compared to $0.9 million for the six months ended September 30, 2022, representing an decrease $0.2 million, or 22.3%. This decrease was primarily a result of $0.1 million decrease of exchange gain from $0.8 million for the six months ended September 30, 2022 to $0.7 million for the six months ended September 30, 2023 and the six months ended September 30, 2022 includes $0.1 million subsidy income related to prevention of COVID-19 infections.

Fiscal Year Ended March 31, 2023, Compared to Fiscal Year Ended March 31, 2022

The following table presents selected comparative results of operations from our audited financial statements for the year ended March 31, 2023, compared to the year ended March 31, 2022. Our financial results for these periods are not necessarily indicative of the financial results that we will achieve in future periods. Certain totals for the table below may not sum to 100% due to rounding. The data should be read in conjunction with our audited financial statements included elsewhere in this prospectus.

(amounts in thousands, except share and per share data)	Fiscal Years Ended March 31,						Increase / (Decrease)
	2023			2022			Dollars			Percentage
Statements of operations Data:
Revenues	$	20,692		$	17,714		$	2,978			16.8	%
Restaurant operating costs:
Food and beverage costs		6,536			5,376			1,160			21.6
Labor and related costs		5,956			5,512			444			8.1
Occupancy and related expenses		2,365			2,491			(126	)		(5.1	)
Depreciation and amortization expenses		601			608			(7	)		(1.2	)
Costs to related parties		9			451			(442	)		(98.0	)
Other costs		2,157			2,134			23			1.1

Total restaurant operating costs		17,624			16,572			1,052			6.3

General and administrative expenses		1,771			1,883			(112	)		(5.9	)
Depreciation and amortization expenses		1			1			-			0.0
Total operating expenses		19,396			18,456			940			5.1
Income (loss) from continuing operations		1,296			(742	)		2,038			-
Other income (expense):
Other income		533			1,527			(994	)		(65.1	)
Other expense		(104	)		(191	)		87			-
Total other income (expenses)		429			1,336			(907	)		(67.9	)
Income from continuing operations before income taxes		1,725			594			1,131			190.4
Income tax (benefit) expense		631			138			493			357.2
Income from continuing operations		1,094			456			638			139.9
Income from discontinued operations, net of income taxes		1,087			1,401			(314	)		(22.4	)
Net income		2,181			1,857			324			17.4
Less: net income (loss) attributable to noncontrolling interests		(6	)		70			(76	)		-
Net income attributable to Sushi Ginza Onodera, Inc.	$	2,187		$	1,787		$	400			22.4	%

Income per common share attributable to Sushi Ginza Onodera, Inc. – basic:
Continuing operations	$	0.16		$	0.06		$	0.10			166.7	%
Discontinued operations		0.15			0.20			(0.05	)		(25.0	)
Net income per share–- basic	$	0.31		$	0.26		$	0.05			19.2
Income per common share attributable to Sushi Ginza Onodera, Inc.–- diluted:
Continuing operations	$	0.16		$	0.06		$	0.10			166.7	%
Discontinued operations		0.15			0.20			(0.05	)		(25.0	)
Net income per share–- diluted	$	0.31		$	0.26		$	0.05			19.2
Weighted average common shares outstanding
Basic		6,999,999			6,999,999			-			-
Diluted		6,999,999			6,999,999			-			-

Comprehensive income:
Net income	$	2,181		$	1,857		$	324			17.4	%
Other comprehensive income, net of tax
Foreign currency translation adjustment		188			492			(304	)		(61.8	)
Other comprehensive income, net of tax		188			492			(304	)		(61.8	)
Total comprehensive income		2,369			2,349			20			0.9
Comprehensive income (loss) attributable to noncontrolling interests		(23	)		76			(99	)		(130.3	)
Comprehensive income attributable to Sushi Ginza Onodera, Inc.	$	2,392		$	2,273		$	119			5.2	%

	Fiscal Years Ended March 31,
	2023			2022
	(as a percentage of sales)
Statements of operations Data:
Revenues		100.0	%		100.0	%
Restaurant operating costs:
Food and beverage costs		31.6			30.4
Labor and related costs		28.8			31.1
Occupancy and related expenses		11.4			14.1
Depreciation and amortization expenses		2.9			3.4
Costs to related parties		0.0			2.6
Other costs		10.4			12.0

Total restaurant operating costs		85.1			93.6

General and administrative expenses		8.6			10.6
Depreciation and amortization expenses		0.0			0.0
Total operating expenses		93.7			104.2
Income (loss) from continuing operations		6.3			(4.2	)
Other income (expense):
Other income		2.6			8.6
Other expense		(0.5	)		(1.1	)
Total other income (expenses)		2.1			7.5
Income from continuing operations before income taxes		8.4			3.3
Income tax (benefit) expense		3.1			0.7
Income from continuing operations		5.3			2.6
Income from discontinued operations, net of income taxes		5.3			7.9
Net income		10.6			10.5
Less: net income (loss) attributable to noncontrolling interests		0.0			0.4
Net income attributable to Sushi Ginza Onodera, Inc.		10.6	%		10.1	%

Comprehensive income:
Net income		10.5	%		10.5	%
Other comprehensive income, net of tax
Foreign currency translation adjustment		0.9			2.8
Other comprehensive income, net of tax		0.9			2.8
Total comprehensive income		11.4			13.3
Comprehensive income (loss) attributable to noncontrolling interests		(0.1	)		0.4
Comprehensive income attributable to Sushi Ginza Onodera, Inc.		11.5	%		12.9	%

Sales Trends

Sales. Sales were $20.7 million for the year ended March 31, 2023, presenting growth in sales of approximately $3.0 million, 16.8% increase from the prior year. Our overall sales growth is primarily driven by an approximately $4.3 million increase in sales from the three new restaurants opened during the year ended March 31, 2022 and the one new restaurant opened during the year ended March 31, 2023. Our comparable restaurant sales in Japan and the U.S. grew steadily by approximately $0.5 million due to the positive brand awareness and marketing effects of aggressive new store openings, while sales in China declined approximately $1.8 million due to COVID-19 restrictions in the first quarter of 2022. Changes in comparable restaurant sales are driven by variations in guest traffic, as well as average check. We have opened restaurants in existing markets in Japan.

Restaurant Operating Expense Trends

Food and beverage costs. Food and beverage costs were $6.5 million for the year ended March 31, 2023 compared to $5.4 million for the year ended March 31, 2022, representing an increase of approximately $1.1 million, or 21.6%. The increase was primarily driven by sales from the three new restaurants opened during the year ended March 31, 2022 and the one new restaurant opened during the year ended March 2023. As a percentage of sales, food and beverage costs increased to 31.6% in the year ended March 31, 2023, compared to 30.3% in the year ended March 31, 2022 due to the rise in raw material prices.

Labor and related costs. Labor and related costs were $5.9 million for the year ended March 31, 2023 compared to $5.5 million for the year ended March 31, 2022, representing an increase of approximately $0.4 million, or 8.1%. The increase in labor and related costs was driven by additional labor costs incurred with respect to the three new restaurants opened during the year ended March 31, 2022 and the one new restaurant opened during the year ended March 31, 2023. As a percentage of sales, labor and related costs decreased to 28.8% in the year ended March 31, 2023, compared to 31.1% in the year ended March 31, 2022 as a result of the increase in sales in Japan, where the marginal cost of labor is cheaper.

Occupancy and related expenses. Occupancy and related expenses were $2.4 million for the year ended March 31, 2023 compared to $2.5 million for the year ended March 31, 2022, representing a decrease of approximately $0.1 million, or 5.1%. The decrease in rent was due to a $0.3 million decrease from exchange rate fluctuations at the Japan and Shanghai store, which offset a $0.2 million increase in rent from new store openings. As a percentage of sales, occupancy and other operating expenses decreased to 11.4% in the year ended March 31, 2023, compared to 14.1% for the year ended March 31, 2022.

Other costs. Other costs were $2.2 million for the year ended March 31, 2023 compared to $2.1 million for the year March 31, 2022, representing an increase in approximately $0.1 million, or 1.1%. The increase in other costs were driven by additional costs incurred with respect to the three new restaurants opened during the year ended March 31, 2022 and the one new restaurant opened during the year ended March 31, 2023. As a percentage of sales, other costs decreased to 10.4% in the year ended March 31, 2023 compared to 12.0% for the year ended March 31, 2022.

General and Administrative Trends

The overall increase in general and administrative expenses over the course of the periods presented is due to the increase in the number of restaurants and the strengthening of headquarters personnel for future expansion strategies.

Other Income (expense) Trends

The overall decrease in other income due to the year ended March 31, 2023 and 2022 includes $0.1 million and $0.7 million subsidy income related to prevention of COVID-19 infections.

Liquidity and Capital Resources

On August 27, 2014, FASB issued ASU 2014-05, Disclosure of Uncertainties about an Entity’s ability to Continue as a Going Concern, which requires management to assess a company’s ability to continue as a going concern within one year from financial statement issuance and to provide related footnote disclosures in certain circumstances. The accompanying consolidated financial statements and notes have been prepared assuming the Company will continue as a going concern. For the year ended March 31, 2023, the Company has an accumulated deficit of $14,844 thousand and working capital deficit of $1,303 thousand.

The main use of our cash is for operating expenditure and capital expenditure, such as new store openings, renovation costs, furniture and fixtures. Historically, our main sources of liquidity have been operating cash flows and financing from parent Onodera Group Co., Ltd. As of March 31, 2021, the outstanding loan balance to Onodera Group was $7.181 million. For the fiscal years ended March 31, 2022 and March 31, 2023 and for the period from April 1, 2023 through date of this prospectus, Onodera Group provided $9.1 million, $2.1 million, and $1.9 million in new loans (an aggregate of $13.1 million), respectively, to our subsidiary, Onodera Food Service Co., Ltd. For the fiscal year ended March 31, 2023, Onodera Food Services repaid $2.6 million of principal outstanding and $0.3 million of interest. For the period from April 1, 2023 through date of this prospectus, Onodera Food Services repaid $0.4 million of principal outstanding and $0.0 million of interest. On March 31, 2023, approximately $22 million in past loans (including $9.5 million of discontinued business loans with respect to Ginza Onodera New York) were forgiven by issuing shares of Onodera Food Services to Onodera Group. Onodera Group anticipates loaning Onodera Food Services an additional $2.0 million in additional loans at an interest rate of 0.5%, although no written agreement has been entered into as of yet, to fund the anticipated transition to public company status as a result of this offering and Kaiten Sushi Hawaii facilities. As of the date of this prospectus, the principal amount outstanding is $1.5 million plus $0.0 million accrued interest. The amount of loans forgiven for shares account for a decline in the exchange rate of the yen to US dollar. See also “ – Recent Developments – Affiliated Loans” below. The new loans from Parent will be repaid annually from business earnings in the amount of approximately $1 million. Upon completion of this offering, our company will not receive additional funding from Onodera Group and will use other available sources of liquidity, as further described below.

For investment funds for new restaurants in Japan, we plan to borrow from Japanese financial institutions. On July 21, 2023, our subsidiary, Onodera Food Service Co., Ltd., entered into a 250 million yen ($1.7 million) overdraft agreement with Resona Bank, Ltd. and borrowed 210 million yen ($1.4 million) on July 25, 2023, and 40 million yen ($0.3 million) on August 31, 2023 at an interest rate of 0.84% to fund facilities for the Kaiten Sushi Kyoto restaurant. Between April 1, 2022, and the date of this prospectus, Resona Bank Ltd. provided $1.7 million in loan to the Company and the Company repaid $0.1 million of principal and $0.0 million of interest. The largest aggregate amount of principal outstanding during the period is $1.7 million, and the amount thereof outstanding the date of this prospectus is $1.6 million, plus accrued interest, of 0.84%. The Company also plans to borrower 280 million yen ($1.9 million) from Japanese financial institutions at an expected interest rate of approximately 0.8% to fund facilities for the Kaiten Sushi Osaka restaurant. The Company has not entered into agreements as of yet with respect to such anticipated loans with such Japanese financial institutions. These loans are planned to be repaid in 7 years from the earnings of the opened stores. There can be no assurance that the Company will enter into such agreements on the terms contemplated, if at all, or that any such loans will be repaid with such earnings and within the time period described in the preceding sentence.

The significant components of our working capital are liquid assets such as cash, cash equivalents and receivables, reduced by accounts payable and accrued expenses. Our working capital position benefits from the fact that we generally collect cash from sales to guests the same day or, in the case of credit or debit card transactions, within several days of the related sale, while we typically have longer payment terms with our vendors.

We believe that the funds generated from the loans discussed above as well as the expected cash flow from operations will be adequate to fund operating lease obligations, capital expenditures and working capital obligations for at least the next 12 months and should avoid any substantial doubt about the Company’s ability to continue as a going concern as defined by ASU 2014-05. We believe that the actions discussed above mitigate the substantial doubt raised by our accumulated deficit and working capital deficit and satisfy our estimated liquidity needs twelve months from the issuance of the financial statements. In light of the foregoing, our auditor did not include a going concern qualification in their audit report dated October 13, 2023, except for Notes 2, 3, 7, 17, 18, 19, 21, 22, 23, and 24 as to which the date is December 27, 2023, for the years ended March 31, 2023 and 2022 notwithstanding our accumulated deficit and working capital deficit. However, our ability to continue to meet these requirements and obligations will depend on, among other things, our ability to achieve anticipated levels of sales and cash flow and our ability to manage costs and working capital successfully. See “Risk Factors—Risks Related to Our Business and Industry—We may need capital in the future, and we may not be able to raise that capital on favorable terms.” We cannot predict, with certainty, the outcome of our actions to generate liquidity and the failure to do so could negatively impact our future operations.

Summary of Cash Flows

Our primary sources of liquidity and cash flows are operating cash flows and cash on hand. We use this to fund investing expenditure for new restaurant openings, reinvest in our existing restaurants, and increase our working capital. Our working capital position benefits from the fact that we generally collect cash from sales to guests the same day, or in the case of credit or debit card transactions, within several days of the related sale, and we typically have at least 30 days to pay our vendors.

The following table summarizes our cash flows for the periods presented:

	Fiscal Years Ended March 31,						Six Months Ended September 30,
	2023			2022			2023			2022
Statement of Cash Flow Data:
Net cash provided by operating activities	$	1,308		$	(284	)	$	435		$	275
Net cash used in investing activities		(1,294	)		(7,374	)		(2,614	)		(36	)
Net cash provided by (used in) financing activities		23			9,621			2,053			(595	)

Cash Flows Provided by Operating Activities

Net cash provided by operating activities during the six months ended September 30, 2022 was $0.3 million, which resulted from net income of $0.6 million from continuing operations, non-cash charges of $0.3 million for depreciation and amortization, $0.3 million deferred income taxes, $0.3 million changes in operating assets and liabilities, offset by $0.7 million of foreign currency adjustment gain, and net cash used in discontinued operations of $0.5 million

Net cash provided by operating activities during the six months ended September 30, 2023 was $0.4 million, which resulted from net income of $0.9 million from continuing operations, non-cash charges of $0.1 million for depreciation and amortization, $0.3 million of deferred income taxes, offset by $0.6 million for foreign currency adjustment gain, and net cash outflow of $0.3 million from changes in operating assets and liabilities.

Net cash used in operating activities during the year ended March 31, 2022 was $0.3 million, which resulted from net income of $0.5 million from continuing operations, non-cash charges of $0.6 million for depreciation and amortization, offset by net cash outflow of $0.4 million from changes in operating assets and liabilities, $0.5 million of foreign currency adjustment gain, $0.2 million of profit from debt forgiveness, and net cash used in discontinued operations of $0.3 million.

Net cash provided by operating activities during the year ended March 31, 2023 was $1.3 million, which resulted from net income of $1.1 million from continuing operations, non-cash charges of $0.6 million for depreciation and amortization, $0.6 million deferred income taxes, and net cash inflow of $0.3 million from changes in operating assets and liabilities, offset by $0.4 million for foreign currency adjustment gain, and net cash used in discontinued operations of $0.9 million.

Cash Flows Used in Investing Activities

Net cash used in investing activities during the six months ended September 30, 2022 was $0.0 million due to no material investment during this period.

Net cash used in investing activities during the six months ended September 30, 2023 was $2.6 million, primarily due to purchases of property and equipment of $2.2 million, $0.4 million of payment for time deposits. The increase in purchases of property and equipment in the six month ended September 30, 2023 is primarily related to capital expenditures for Kaiten Sushi Ginza Onodera Kyoto, Kaiten Sushi Ginza Onodera Hawaii, maintaining our existing restaurants and other projects.

Net cash used in investing activities during the year ended March 31, 2022 was $7.4 million, primarily due to purchases of property and equipment of $7.3 million. $4.7 million of the purchases of property and equipment is due to the purchase of assets from related party LEOC, and the remaining were primarily related to capital expenditures of Kaiten Sushi Honten, Tachigui Sushi Ginza Onodera Honten, Sushi Ginza Onodera Otouto Honten, Sushi Ginza Onodera Toryumon, maintaining our existing restaurants and other projects.

Net cash used in investing activities during the year ended March 31, 2023 was $1.3 million, primarily due to purchases of property and equipment of $0.6 million, $0.7 million of payment for time deposits. The increase in purchases of property and equipment in the year ended March 31, 2023 is primarily related to capital expenditures for Kaiten Sushi Ginza Onodera Hawaii, maintaining our existing restaurants and other projects.

Cash Flows Provided by (Used in) Financing Activities

Net cash used in financing activities during the six months ended September 30, 2022 was $0.6 million, primarily due to repayment of a loan to the Parent in the amount of $1.3 million, offset by loan from Parent of $0.2 million and $0.5 million of net cash provided by discontinuing operations.

Net cash provided by financing activities during the six months ended September 30, 2023 was $2.1 million, primarily due to loan from Resona Bank Ltd. of $1.8 million and loan from Parent of $0.7 million and $0.1 million of net cash provided by discontinuing operations, offset by payment of deferred offering cost of $0.5 million.

Net cash provided by financing activities during the year ended March 31, 2022 was $9.6 million, primarily due to loan from Parent of $9.0 million and $0.6 million of net cash provided by discontinuing operations.

Net cash provided by financing activities during the year ended March 31, 2023 was $0.0 million, primarily due to loan from Parent of $2.1 million, loan repayment to Parent of $2.8 million, and net cash provided by discontinuing operations $0.7 million.

Contractual Obligations

The following table presents our commitments and contractual obligations as of March 31, 2023, as well as our long-term obligations:

	Payments due by period as of May 31, 2023
	Total		Less than 1 Year		1 – 3 Years		4 – 5 Years		More than 5 years
	(amounts in thousands)
Operating lease payments	$	11,996	$	2,482	$	5,243	$	1,379	$	2,892
Capital lease payments		-		-		-		-		-
Debt obligations payments		-		-		-		-		-
Total contractual obligations	$	11,996	$	2,482	$	5,243	$	1,379	$	2,892

Off-Balance Sheet Arrangements

As of March 31, 2023, we did not have any material off-balance sheet arrangements, except for restaurant operating leases.

Recent Developments

Affiliated Loans

On October 19, 2023, Onodera Group Co., Ltd. loaned 40,000,000 yen (approximately $268,000) and 30,000,000 yen (approximately $201,000) on November 17, 2023 to Ginza Onodera USA Inc., and Onodera Group., Ltd. loaned 60,000,000 yen (approximately $402,000) on October 19, 2023 to Sushi Ginza Onodera, Inc. Such loans mature on October 18, 2024, November 16, 2026, and October 18, 2024, respectively, and bear interest at a rate of 0.5 percent (0.5%) per year.

The loan agreements with respect to such loans are filed as Exhibits 10.12, 10.13 and 10.14 to the registration statement of which this prospectus forms a part.

Reverse Stock Split

Quantitative and Qualitative Disclosure of Market Risks

Commodity and Food Price Risks

Our profitability is dependent on, among other things, our ability to anticipate and react to changes in the costs of key operating resources, including food and beverage and other commodities. We have been able to partially offset cost increases resulting from a number of factors, including market conditions, shortages or interruptions in supply due to weather or other conditions beyond our control, governmental regulations and inflation, by increasing our menu prices, as well as making other operational adjustments that increase productivity. However, substantial increases in costs and expenses could impact on our operating results to the extent that such increases cannot be offset by menu price increases or operational adjustments.

Inflation Risk

The primary inflationary factors affecting our operations are food and beverage costs, labor costs, and energy costs. Our restaurant operations are subject to federal and state minimum wage and other laws governing such matters as working conditions, overtime and tip credits. Significant numbers of our restaurant personnel are paid at rates related to the federal and/or state minimum wage and, accordingly, increases in the minimum wage increase our labor costs. To the extent permitted by competition and the economy, we have mitigated increased costs by increasing menu prices and may continue to do so if deemed necessary in future years. Substantial increases in costs and expenses could impact on our operating results to the extent such increases cannot be passed on to our guests. Historically, inflation has not had a material effect on the results of operations. Severe increases in inflation, however, could affect the global and U.S. economies and could have an adverse impact on our business, financial condition or results of operations.

While we have been able to partially offset inflation and other changes in the costs of core operating resources by gradually increasing menu prices, coupled with more efficient purchasing practices, productivity improvements and greater economies of scale, there can be no assurance that we will be able to continue to do so in the future. From time to time, competitive conditions could limit our menu pricing flexibility. In addition, macroeconomic conditions could make additional menu price increases imprudent. There can be no assurance that future cost increases can be offset by increased menu prices or that increased menu prices will be fully absorbed by our guests without any resulting change to their visit frequencies or purchasing patterns. In addition, there can be no assurance that we will generate the same sales growth in an amount sufficient to offset inflationary or other cost pressures.

Critical Accounting Policies and Estimates

Our discussion and analysis of operating results and financial condition are based upon our financial statements. The preparation of our financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, sales, expenses and related disclosures of contingent assets and liabilities. We base our estimates on past experience and other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis.

Our critical accounting policies are those that materially affect our financial statements and involve subjective or complex judgments by management. Although these estimates are based on management’s best knowledge of current events and actions that may impact us in the future, actual results may be materially different from the estimates. We believe the following critical accounting policies are affected by significant judgments and estimates used in the preparation of our financial statements and that the judgments and estimates are reasonable.

Operating and Capital Leases

We currently lease all of our restaurant locations, corporate offices, and some of the equipment used in our restaurants. At the inception of each lease, we determine the appropriate classification as an operating lease or a capital lease. This lease accounting evaluation may require significant judgment in determining the fair value and useful life of the leased property and appropriate lease term, which typically does not change once determined at the inception of the lease. All of our restaurant and office leases are classified as operating leases and equipment leases are classified as capital leases.

Our office leases provide for fixed rent payments. For operating leases that include free-rent periods and rent escalation clauses, we recognize rent expense based on the straight-line method. For the purpose of calculating rent expenses under the straight-line method, the lease term commences on the date we obtain control of the property.

Impairment of Long-Lived Assets

Changes in projections or estimates, a deterioration of operating results and the related cash flow effect could decrease the estimated fair value of long-lived assets and result in impairments. We assess potential impairments of our long-lived assets in accordance with the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 360—Property, Plant and Equipment. An impairment review is performed whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. Factors considered by us include but are not limited to: significant underperformance relative to expected historical or projected future operating results; significant changes in the manner of use of the acquired assets or the strategy for the overall business; and significant negative industry or economic trends.

No major impairment loss was recognized during the year ended March 31, 2023, and 2022.

Common Stock Valuations

In the absence of a public trading market, the fair value of our common stock was determined by our Board of Directors, with input from management, taking into account the most recent valuations performed by an independent third-party valuation specialist. The valuations of our common stock were determined in accordance with the guidelines outlined in the American Institute of Certified Public Accountants Practice Aid, Valuation of Privately-Held-Company Equity Securities Issued as Compensation. The assumptions we use in the valuation models were highly complex and subjective. These assumptions were based on future expectations combined with management judgment, and considered numerous objective and subjective factors to determine the fair value of our common stock as of the date of each option grant, including the following factors:

	●	our operating and financial performance;

	●	the prevailing business conditions and projections;

	●	the hiring of key personnel;

	●	the likelihood of achieving a liquidity event for the shares of common stock underlying these stock options, such as an initial public offering, given prevailing market conditions;

	●	any adjustment necessary to recognize a lack of marketability of the common stock underlying the granted options;

	●	the market performance of comparable publicly traded companies; and

	●	the U.S. and global capital market conditions.

In valuing our common stock at various dates in the year ended March 31, 2023 and 2022, our board determined the equity value of our business using various valuation methods including combinations of income and market approaches. The income approach estimates value based on the expectation of future cash flows that a company will generate. These future cash flows are discounted to their present values using a discount rate derived from an analysis of the cost of capital of comparable publicly traded companies in our industry or similar lines of business as of each valuation date and is adjusted to reflect the risks inherent in our cash flows. The market approach estimates value considering an analysis of guideline public companies. The guideline public company method estimates value by applying a representative revenue multiple from a peer group of companies in similar lines of business to us to our forecasted sales.

The equity values implied by the income and market approaches reasonably approximated each other as of each valuation date.

For financial reporting purposes, we considered the amount of time between the valuation date and the grant date to determine whether to use the latest common stock valuation. This determination included an evaluation of whether the subsequent valuation indicated that any significant change in valuation had occurred between the previous valuation and the grant date.

Once we are operating as a public company, we will rely on the closing price of our common stock as reported by the Nasdaq Stock Market on the date of the grant to determine the fair value of our common stock.

Jumpstart Our Business Startups Act of 2012

	●	being permitted to present only two years of audited financial statements, in addition to any required unaudited interim financial statements, with correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure in this prospectus;

	●	not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended;

	●	reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and registration statements; and

	●	exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

CORPORATE HISTORY AND STRUCTURE

Overview

Sushi Ginza Onodera, Inc. was incorporated in the State of Delaware on February 24, 2023. We conduct business activities principally through our wholly owned operating Subsidiaries indicated below.

Upon incorporation, we were authorized to issue 1,000 shares of common stock, par value $0.00001 per share, and 100 shares of preferred stock, par value $0.00001 per share. On August 21, 2023, we increased the number of authorized shares of common stock from 1,000 shares to 100,000,000 shares of common stock, and increased the number of authorized shares of preferred stock, from 100 shares to 1,000,000 shares of preferred stock. The total number of outstanding shares of common stock were 7,000,000 and 6,999,999 as of March 31, 2023 and 2022, and no outstanding shares of preferred stock as of March 31, 2023 and 2022, respectively.

Historical Common Equity Transactions

On February 27, 2023, we issued five (5) shares of common stock, par value $0.00001 per share, to Onodera Group Co., Ltd., for $2,000 per share for a total subscription of $10,000.

On August 22, 2023, we issued 29,999,995 shares of our common stock to LEOC Co., Ltd. in exchange for all outstanding shares of common stock of Onodera Food Service Co., Ltd., which holds 100% of the issued and outstanding capital stock of Ginza Onodera California, Inc. (formed in California) and Ginza Onodera USA Inc. (formed in Hawaii), and which holds 90% of the issued and outstanding capital stock of the Ginza Onodera Shanghai (formed in Shanghai, China). The acquisition of Onodera Food Service Co., Ltd. was accounted for as a recapitalization among entities under common control since the same controlling shareholders controlled all these entities before and after the transaction. The consolidation of Sushi Ginza Onodera, Inc. and its subsidiaries has been accounted for at historical cost and prepared on the basis as if the transaction had become effective as of the beginning of the first period presented in the accompanying consolidated financial statements.

The above issuances/sales were made pursuant to an exemption from registration as set forth in Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D promulgated under the Securities Act.

Corporate Structure

The following diagram depicts our organization structure prior to this offering:

The following diagram depicts our organization structure following this offering (assuming no exercise of the overallotment option):

BUSINESS

Company Overview

Sushi Ginza Onodera, Inc., a Delaware corporation, is a food service company headquartered in the Otemachi district of the Chiyoda ward in Tokyo, Japan. The Company opened its first restaurant in Ginza, Tokyo in 2013. The Company now operates thirteen sushi, tempura, teppanyaki, and makiyaki (firewood cuisine) restaurants in regions around the world. The restaurants in Japan that are operated by the Company consist of Kaiten Sushi Ginza Onodera Kyoto in Kyoto, Japan, as well as Sushi Ginza Onodera Souhonten, Sushi Ginza Onodera Honten, Tempura Ginza Onodera Higashi-ginza, Tempura Ginza Onodera Namiki-dori, Makiyaki Ginza Onodera, Sushi Ginza Onodera Otouto Honten, Sushi Ginza Onodera Toryumon, Kaiten Sushi Ginza Onodera Honten, and Tachigui Sushi Ginza Onodera Honten in Tokyo, Japan. The Company also operates restaurants within the United States and China, consisting of Sushi Ginza Onodera in Los Angeles, California, Sushi Ginza Onodera in Honolulu, Hawaii and Ginza Onodera Shanghai in Shanghai, China. The Company’s slogan is “From Ginza to the World,” which embodies the Company’s mission of spreading refined Japanese culture throughout the world by providing a unique and culturally authentic food experience to every customer.

The Company is a wholly owned subsidiary of LEOC Co., Ltd., a Japan limited company. LEOC Co., Ltd., founded in September 2008, established the “Ginza Onodera” brand in 2013 and began operations in the U.S. and Tokyo. LEOC Co., Ltd. is a wholly owned subsidiary of Onodera Group Co., Ltd., a Japan limited company which is in turn owned by Hiroshi Onodera. The Company was established in February 2023 with the goal of further expanding its sushi business in the U.S. Hiroshi Onodera indirectly beneficially owns through LEOC Co., Ltd. an aggregate of 30,000,000 shares of our Common Stock, which represents 100% of the voting power of our outstanding capital stock. Following this offering, Mr. Onodera will control indirectly through Onodera Group Co., Ltd. and LEOC Co., Ltd. approximately % of the voting power of our outstanding capital stock if all the Common Stock being offered hereby are sold (or % of our outstanding voting power if the underwriters’ option to purchase additional shares is exercised in full). As a result of his voting power, Mr. Onodera will be able to control any action requiring the general approval of our stockholders, including the election of our Board of Directors, the adoption of amendments to our certificate of incorporation and bylaws and the approval of any merger or sale of substantially all of our assets. If we obtain a listing on Nasdaq, we will be a “controlled company” as defined in Rule 5615(c)(1) of the Nasdaq listing standards because more than 50% of our voting power will be held by LEOC Co., Ltd., which is indirectly controlled by Mr. Onodera after this offering. As a “controlled company,” we are exempt by Rule 5615(c)(2) of the Nasdaq listing standards from the requirements of Rule 5605(b), (d) and (e) of the Nasdaq listing standards that would otherwise require us to have (i) a majority of the Board of Directors consist of “independent” directors under the listing standards of Nasdaq, (ii) a nominating/corporate governance committee composed entirely of independent directors and a written nominating/corporate governance committee charter meeting the requirements of Nasdaq, and (iii) a compensation committee composed entirely of independent directors and a written compensation committee charter meeting the requirements of Nasdaq. Consequently, we are exempt from independent director requirements of Rule 5605(b), (d) and (e) of the Nasdaq listing standards, except for the requirements under subsection (b)(2) thereof pertaining to executive sessions of independent directors and those under subsection (c) thereof pertaining to the Audit Committee. Accordingly, you may not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of Nasdaq. In addition, Mr. Onodera can exercise significant voting influence over fundamental and important corporate matters and transactions and may have interests that differ from yours. For details, please see “Risk Factors - Risk Related to Our Business and Industry - If the voting power of our capital stock continues to be highly concentrated, it may prevent you and other minority stockholders from influencing significant corporate decisions and may result in conflicts of interest.”

Our Philosophy

Our Strengths

Restaurants in Japan. The Company operates 10 restaurants in Japan, consisting of Kaiten Sushi Ginza Onodera Kyoto in Kyoto, Japan, as well as Sushi Ginza Onodera Souhonten, Sushi Ginza Onodera Honten, Tempura Ginza Onodera Higashi-ginza, Tempura Ginza Onodera Namiki-dori, Makiyaki (Firewood Cuisine) Ginza Onodera, Sushi Ginza Onodera Otouto Honten, Sushi Ginza Onodera Toryumon, Kaiten Sushi Ginza Onodera Honten, and Tachigui Sushi Ginza Onodera Honten in Tokyo, Japan. Each of our restaurants in Japan adheres to a traditional Japanese style of sushi called “Edomae sushi.” In order to encourage more people to enjoy the thorough attention to authenticity that our restaurants strive to offer to its customers, we opened the Kaiten Sushi Ginza Onodera Honten in Tokyo, Japan in October 2021 and Kaiten Sushi Ginza Onodera Kyoto, Japan in July 2023. These restaurants were intended to provide a more casual dining experience with the use of Kaiten style (customer access to sushi through use of a conveyer belt) at an affordable pricing while retaining the quality that is expected of our Ginza Onodera brand. Our executive chefs thoroughly supervise the restaurant and pursue uncompromising service and quality to provide well-prepared Edomae sushi at a more affordable price. At Kaiten Sushi Ginza Onodera Honten and Kaiten Sushi Ginza Onodera Kyoto, we are creating a Kaiten style sushi culture that combines the traditional practice of Edomae sushi with an innovative restaurant space. The Kaiten service model at our two Kaiten style restaurants allows our guests to control their dining experience, from food variety to time spent on a meal, and from portions to check size. With access to food on the revolving conveyor belt, our guests can drop in for a quick meal or stay longer for a more relaxed dining experience. Our guests can enjoy high-quality dishes at affordable prices because of our efficient kitchen operations and low front-of-house labor needs. We believe that our authentic approach to a popular Japanese cuisine coupled with our unique and flexible dining experience appeal to a wide range of demographics. In addition, we believe our commitment to high-quality and non-artificial ingredients in our food is at the forefront of current dining trends as consumers continue to seek healthy and natural food options. We also improve the customer’s experience in various locations in Japan by frequently holding events, such as the pairing and comparison of various Japanese Sakes.

Site Development and Expansion

Site Selection Process and Expansion Strategy

Restaurants Name	State / City	Opened
Sushi Ginza Onodera Souhonten	Ginza / Tokyo	March-2013
Sushi Ginza Onodera Hawaii	Honolulu / Hawaii	November-2013
Tempura Ginza Onodera Namiki-dori	Ginza / Tokyo	October-2015
Ginza Onodera Shanghai	Shanghai / China	March-2016
Sushi Ginza Onodera California	Los Angeles / California	January-2016
Sushi Ginza Onodera New York	New York / New York	May-2016
Sushi Ginza Onodera Honten	Ginza / Tokyo	December-2018
Tempura Higashi-ginza	Ginza / Tokyo	January-2019
Makiyaki Ginza Onodera	Ginza / Tokyo	July-2019
Kaiten Sushi Ginza Onodera Honten	Omotesando / Tokyo	October-2021
Tachigui Sushi Ginza Onodera Honten	Omotesando / Tokyo	October-2021
Sushi Ginza Onodera Otouto Honten	Futakotamagawa / Tokyo	October-2021
Sushi Ginza Onodera Toryumon	Ginza / Tokyo	April-2022

Site Selection Process

Expansion Strategy

We have already opened the Kaiten Sushi Ginza Onodera Kyoto in July 2023, and plan to open the following restaurants in the next twelve month:, the Kaiten Sushi Ginza Onodera Hawaii in the beginning of 2024, the Kaiten Sushi Ginza Onodera Osaka in the Spring of 2024 and the Kaiten Sushi Ginza Onodera Houston, Texas in the summer of 2024. We plan to open approximately thirty stores over the next five years, mainly in the United States, Japan and China, where we have existing high-end restaurants. The Kaiten Sushi Ginza Onodera Honten has achieved a return on investment in a year and a half from its opening. Our plan is to achieve steady growth through the opening of new stores in the future, each of which will target a positive return on capital within 3.5 years from opening.

We established the Ginza Onodera Sushi Academy in October 2017 and have operated the academy since October 2017, believing that by actively educating and recruiting future sushi artisans from an early stage based on the skills and experience that Ginza Onodera has cultivated, we can provide our high-quality services to even more people. In order to focus our resources as a result on COVID-19’s negative impact on the entire restaurant industry and on our aggressive new store development, we suspended the Academy in June 2022, but with the growing popularity of Sushi in Japan and abroad, and the demand for Sushi artisans rapidly increasing, we have reopened the Ginza Onodera Sushi Academy in October 2023 in order to develop sushi artisans. A significant impediment experienced in the sushi industry is the decade-long development and working experience required for a sushi artisan to qualify as a head chef. This challenge is particularly profound in the echelon of high-end establishments in which our restaurants operate, as these venues heavily rely on the head chef’s skillset to consistently deliver the highest quality dishes and provide an intimate, one-on-one omakase experience to each customer. We believe the Academy serves as an innovative solution to the industry-wide impediment described above to qualify as a head chef and strive to cultivate the next generation of Sushi artisans who embody the Onodera brand’s high standards and commitment to preserving the traditional art of Edomae sushi. After graduating from the Academy, we will support a variety of employment opportunities the graduates, including employment at Sushi Ginza Onodera, to continue fostering the growth and development of the young artisans. We believe that through the Ginza Onodera Sushi Academy, we can further ensure future expansion by training our own sushi artisans, which is essential to our overall future expansion strategy.

Our wholly owned subsidiary, Onodera Food Service Co., Ltd., completed the development of an authentic “Edomae Frozen Sushi” in September 2023. The objective is to allow those living far away from our restaurants, who cannot go to our restaurants, who cannot order on the go (for pick-up or delivery), or do not have time to eat at our restaurants, to enjoy the taste of “Sushi Ginza Onodera.” In October 2023, Onodera Food Service Co., Ltd., our subsidiary, launched this business line by making limited sales to clients of LEOC Co., Ltd., our parent company, but has only generated nominal sales to date. Onodera Food Service Co., Ltd. is currently building a frozen sushi factory and anticipates that it will be ready to sell to general consumers by the fall of 2024. Edomae Frozen Sushi can be bought for everyday enjoyment as well as sent as a gift to yourself or others for special occasions. We have realized through our subsidiary, Onodera Food Service Co., Ltd., the commercialization of high-quality frozen sushi through the most advanced special freezing technology. Sushi Ginza Onodera Edomae Frozen Sushi was jointly developed using a special freezer called the “Art Lock Freezer” by DayBreak Co. Ltd. This special freezer ensures that the fish will retain its freshness and flavor even after thawing because of the small ice crystals it forms to keep the moisture.

Restaurant Design

The restaurant design and concept of the Kaiten Sushi restaurants is to efficiently serve comfortable and delicious meals to a large number of customers by Michelin-starred Ginza Onodera’s artisans. One LCD order panel is placed for each customer at each seat, and customers can order the items they want to eat from the LCD panel while referring to the pictures, descriptions, and recommendations of each item on the panel. Customers can easily create their own original course with only the items they want to eat and can request the amount of shari (rice) and wasabi from the LCD panel. Customer order information is promptly transmitted to the kitchen, and Artisans of Ginza Onodera complete the Edomae Sushi quickly using ingredients prepared by artisans using Edomae techniques, utilizing robot techniques such as Shari-making robot, Nori-maki robot, and Gunkanmaki robot. Finished products are speedily delivered by high-speed lanes directly to the lane in front of the customer’s seat where the order was placed. Based on our past experience in store operations, we consider the smoothest and most efficient in-store traffic flow and layout, and the store layout is designed accordingly.

The existing upscale restaurant will entertain customers with a luxurious interior and tableware appropriate for the service and price range offered. The interior of the restaurant, reminiscent of a hideout away from the hustle and bustle of the city, has a counter made of Ise hinoki, a wood synonymous with Ginza Onodera, and its back wall is lavishly covered with Bizen porcelain, creating a warmer space. In addition to the interior design, Bizen porcelain, Edo faceted glass, Baccarat, Arita porcelain, and Kiyomizu porcelain are used for tableware, allowing diners to enjoy the rich harmony with the excellent products that the executive chef has carefully selected from the finest ingredients to the finest details. The seasonal designs can be enjoyed on chopsticks, coasters, and even lap blankets.

Photo of Ginza Onodera Souhonten

In addition, the design image is different for each business category and each restaurant because we want our regular customers who love “Ginza Onodera” to be newly impressed and excited by each restaurant they visit. The orange walls of the Kaiten Sushi Ginza Onodera Honten restaurant evoke the image of the sunset, while the “corrugated plate finish” ceiling is reminiscent of sparkling waves, and the lights, which are reminiscent of the fishing fires hung from fishing boats at night, illuminate the restaurant, creating an atmosphere that is both warm and lively.

Photo of Kaiten Sushi Ginza Onodera Honten

The interior of Kaiten Sushi Ginza Onodera Kyoto, which opened in July, was designed by Yasumichi Morita, a representative/designer of GLAMOROUS Co., Ltd. who is active both in Japan and abroad, as a restaurant suitable for Kyoto, a city that has inherited authentic traditional culture and history. The interior is designed with traditional Kyoto craftsmanship, modern materials and lighting design to create a luxurious and sophisticated space, and a one-of-a-kind store where customers can experience the spirit of hospitality that “Ginza Onodera” has embodied over the years.

Photo of Kaiten Sushi Ginza Onodera Kyoto

Construction

The time required to open a store varies greatly depending on the type of business and size of the store. In some cases, stores can be opened in as little as six months, while in other cases, it may take two years or more to open a store due to licensing requirements in other countries. Our new restaurant project manager works closely with the construction contractor and holds regular weekly meetings to monitor progress and ensure that the project proceeds as planned. The cost of store investment varies greatly depending on the type, size and location of the store. The average investment in the four new stores opened between 2021 and 2022 was approximately $0.5 million. The investment amount of the Kaiten Sushi Kyoto store, which opened in July 2023, is about 1.7 million dollars.

New menu development

We believe that the development of new menu items is especially important for restaurant operations, and we anticipate that new menus will attract customer interest and thereby increase sales. Therefore, our business managers and artisans gather feedback from customers routinely, analyze markets and trends, and accumulate ideas. Then, the concept of the new menu is finalized, and the artisan and the business manager examine the balance of flavors and the combination of ingredients, repeatedly making prototypes in pursuit of the optimum taste. In the end, we review the resulting promotion of the new menu with our Company’s marketing staff and then offer it to our customers. The company holds a new food menu planning contest for store staff, and we invite our staff who come up with ideas to attract customers to dine at Ginza Onodera restaurant.

Restaurant Management and Operations

Training and Employee Programs

We hold training programs for all of the employees who become store staff. This training program is designed to provide employees with the knowledge and skills needed in store operations and is intended to improve employee competence and overall company productivity. The content of the training program is wide-ranging. First, we provide team-building training to strengthen cooperation and communication skills among employees. By fostering teamwork, we ensure that cooperation among staff members is smooth and efficient store operations are achieved.

We also provide training on food safety standards to help employees understand the importance of food hygiene. Adherence to strict standards in food handling is essential, and we ensure that our employees are well-informed to protect the health and safety of our customers. The program also provides training on the basic operating rules of alcohol checks and develops the ability to prevent alcohol-related problems. We train our employees to make appropriate decisions in order to provide appropriate services to our customers. In a further effort to improve the work environment and promote respect for our employees, we also provide sexual harassment training. We emphasize the importance of creating a safe working environment for all staff.

When opening a new restaurant, we conduct training at an existing restaurant to strengthen team building before opening the new restaurant to ensure smooth operations. Employees work together and understand each other before starting work in a new branch to ensure effective operations from day one. These efforts have improved the Company’s overall productivity and contributed to a lower turnover rate.

Nurturing Skillful Sushi Artisan through Comprehensive Human Resource Development

In April 2022, we proudly inaugurated Sushi Ginza Onodera Toryumon, a meticulously crafted establishment with the intention of becoming a haven fostered by our valued customers. Unlike the conventional approach prevalent in the sushi industry, where mastery was often acquired through observing seasoned masters over a span of a decade to confidently command the sushi counter, we discerned the imperative for a transformative paradigm. The turnover rate in the restaurant industry is higher than in other industries, and many young apprentice quit at the early stage because they could not endure a decade of training to become proficient at making sushi.

Our vision comes to life through the tactile connection with the essence of fish and the ceaseless refinement of craftsmanship, all while creating priceless experiences for our esteemed customers. The Sushi Ginza Onodera Toryumon venture emerged as a crucible, nurturing these pivotal encounters from an early age, with aspirations spanning the globe. We manifest this vision by utilizing ingredients sourced from Sushi Ginza Onodera Souhonten, astutely framing a reasonable sales price as tuition fee for emerging sushi talents.

Our company meticulously designs a tailored developmental journey for our aspiring sushi artisans, an odyssey that can be embarked upon in as little as three years. In the initial phases, encompassing the first and second years, meticulous guidance in ingredient selection and management is imparted. Moreover, we offer extracurricular opportunities for practicing nigiri outside of formal hours. As the journey advances into its third year, the landscape shifts, allowing for the tangible creation of sushi and the accumulation of invaluable experience. The culmination of this expedition is marked by the sagacious oversight of the executive chef, influencing pivotal decisions regarding nigiri craftsmanship and operational methodology.

Looking beyond the horizon of the fourth year, clarity transforms into concrete placements, encompassing esteemed establishments like Sushi Ginza Onodera Honten or venturing across oceans to places like the heart of America. Our unwavering commitment to perpetuating this training paradigm underscores our dedication to nurturing the next generation of sushi virtuosos.

Marketing and Advertising

We use various marketing and advertising methods to increase awareness of the “Ginza Onodera” brand. Our marketing objectives include raising the profile of products and services, creating demand, promoting sales, and building a brand image. Our public relations staff has set up target audiences, created promotional materials, and understand customer characteristics and needs, and continue to deliver effective messages to target audiences. In addition to disseminating information through a variety of media channels, we also actively provide catering services to corporations and other organizations to create fans of “Ginza Onodera” in a variety of settings.

Our restaurants in Japan target foreigners with marketing. Since concierges play a significant role as a point of contact with foreign guests, they play a very important role in attracting guests to our company by building good relationships with concierges in hotels, especially for high-end hotels. We also believe it is important to measure the effectiveness of marketing advertising and analyze the results. Our public relations staff evaluates the effectiveness of our advertising and makes the necessary adjustments to maximize return on investment (ROI) and optimize it on a daily basis.

First auction “Ichiban-Maguro”

Tuna from the first auction (Hatsu-Seri), also called Ichiban-Maguro, is considered a traditional Japanese food culture and a symbol of good luck. Hatsu-Seri is believed to celebrate the beginning of the New Year and bring prosperity and good fortune to business. Auctions and trading of the Hatsu-Seri at high prices have been widely reported in the media not only in Japan but also internationally, and has improved the brand awareness of “Ginza Onodera”. We won the action of the first tuna of Hatsu-Seri in 2018, 2021, 2022, and 2023. Each of our restaurants has previously offered dishes made with this first tuna, which we believe entices customers to dine at our restaurants.

Suppliers

We carefully select suppliers based on product quality and authenticity and their understanding of our brand, and we seek to develop long-term relationships with them. We identify and procure high-quality ingredients at competitive prices. We make a portion of our purchases annually in bulk at fixed prices, and we do not engage in any hedging agreements to manage our exposure to fluctuations in the price of seafood or other food commodities.

We do not have formal contracts with most of our suppliers, the Company’s years of established operations in Japan have facilitated the development of relationships with key vendors renowned for their reputation and quality, specifically with Toyosu Fish Market, where we engage in frequent face-to-face interactions with the native suppliers to establish trust and nurture enduring relationships with the market’s individuals, aligning seamlessly with the Japanese cultural norms for building a solid, long-lasting business connections.

We rely on Yamayuki Co., Ltd. as one of our primary suppliers in Japan. Yamayuki Co., Ltd. provided us with food products, mostly fresh fish, equalling approximately 11.6% and 6.6% of our total food and beverage costs in the year ended March 31, 2023 and 2022, respectively. We rely on US Sakasyu, Inc. as one of our primary suppliers in the US. US Sakasyu, Inc. provided us with food products and fresh fish equalling approximately 9.4% and 7.1% of our total food and beverage costs for the year ended March 31, 2023 and 2022, respectively. We rely on Miaoxinmaiye Co., Ltd. as one of our primary suppliers in China. Miaoxinmaiye Co., Ltd. provided us with food products equalling approximately 3.2% and 5.7% of our total food and beverage costs in the year ended March 31, 2023 and 2022, respectively.

Our relationship with Yamayuki Co., Ltd. has been in place since year 2016, and from the beginning the partnership has been built through a consultancy agreement with Yukitaka Yamaguchi of Yamayuki Co., Ltd. The material terms of this consultancy agreement with Yamayuki Co., Ltd. are as follows:

●

Signing Date

○

April 1, 2023

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Termination Date

○

March 31, 2025

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Termination Provisions & Penalties

○

Either party may terminate this agreement prior to the expiration date by giving the other party two months’ notice.

○

Both parties separately agree to extend the term of this agreement, a written agreement to that effect shall be executed.

●

Fees Payable Under the Agreement

○

Monthly fee of 1,000,000 yen (approximately $7,000) as an advisory fee.

We refer you to the copy of this agreement is attached as Exhibit 10.15 to the registration statement of which this prospectus forms a part, as this summary does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all of the provisions of such agreement.

We continue to have a good relationship with our main supplier in China, Miaoxinmaiye Co., Ltd. with whom we have entered into a long-term business agreement with no fixed expiration date in January 2021. The material terms of this business agreement with Miaoxinmaiye Co., Ltd. are as follows:

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Signing Date

○

January 1, 2021.

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Termination Date

○

None.

●

Termination Provisions & Penalties

○

The Agreement is effective for the long term in the absence of objection on both sides.

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Fees Payable Under the Agreement

○

Based on purchase (no fixed fee payable).

We refer you to the copy of this agreement is attached as Exhibit 10.16 to the registration statement of which this prospectus forms a part, as this summary does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all of the provisions of such agreement.

We do not have a formal agreement (written or verbal) with US Sakasyu, Inc. Rather, US Sakasyu, Inc. issues invoices to us for payment for the food products and fresh fish they supply to us.

We also source from other distributors. Our suppliers deliver to our restaurants approximately five times per week. If we were no longer able to source through any of our suppliers, we would intend to replace the supplier with a different source, but there can be no assurance that any such replacement would provide goods at the prices and level of quality of our current suppliers.

Competition

We face significant competition from a variety of locally owned restaurants and national chain restaurants offering both Asian and non-Asian cuisine, as well as takeaway options from grocery stores. We believe that we compete primarily based on product quality, dining experience, ambience, location, convenience, value perception, and price. Our competition continues to intensify as competitors increase the breadth and depth of their product offerings and open new restaurants.

Seasonally

Seasonal factors and the timing of holidays cause our sales to fluctuate from quarter to quarter. Adverse weather conditions may also affect guest traffic. As a result of these factors, our financial results for any single quarter or for periods less than a year are not necessarily indicative of the results that may be achieved for a full fiscal year.

Business Support

On September 1, 2023, our wholly owned subsidiary, Onodera Food Services Co., Ltd., entered into a Business Support Agreement with LEOC Co., Ltd. pursuant to which LEOC Co., Ltd. will provide strategic, operational or other support to us. The material terms of this Business Support Agreement with LEOC Co., Ltd. are as follows:

●

Signing Date

○

September 1, 2023

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Termination Date

○

March 31, 2024

●

Termination Provisions & Penalties

○

However, if neither of the parties to the agreement offers to cancel the agreement by one month prior to the deadline, the agreement shall be continued for one-year and the same shall apply thereafter

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Fees Payable Under the Agreement

○

Monthly fixed fee of 1,952,000 yen (approximately $14,400 per month)

We refer you to the copy of this agreement is attached as Exhibit 10.17 to the registration statement of which this prospectus forms a part, as this summary does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all of the provisions of such agreement. See “Risk Factors – Risks Related to Our Business and Industry – We have historically received strategic, operational and financial support from Ondera Group Co., Ltd. and affiliated companies, and as we increase our independence from Onodera Group, we may face difficulties replacing certain services, supplies and financial assistance Onodera Group as provided to us.”

Government Regulation and Environmental Matters

Japan

Restaurant Licensing and Quality Control

Food Sanitation

We maintain the following principal measures, among others, to prevent against food contamination:

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Store Hygiene Management Office, a department specializing in hygiene management;

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hygiene management manual;

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planned maintenance calendar;

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temperature check table;

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hygiene check sheet as a management form for the headquarters;

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process for the Hygiene Management Office to conduct hygiene checks of stores; and

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process for supervisors to conduct an operations check and hygiene management check during the supervisor’s monthly store visit.

Disabilities Laws

Labor Laws

Environmental Regulations

Regulations on Advertising

Regulations on Lease Agreements

Regulations for Liquor Retailing

Our restaurants sell liquor in Japan, and we are subject to laws and regulations for liquor retailing.

United States

We are subject to extensive and varied federal, state, and local government regulations, including regulations relating, among others, to public and occupational health and safety, nutritional menu labeling, healthcare, the environment, sanitation, and fire prevention. We operate each of our restaurants in accordance with standards and procedures designed to comply with applicable codes and regulations. However, an inability to obtain or retain health department or other licenses would adversely affect our operations.

We are also subject to laws and regulations relating to information security, privacy, cashless payments, gift cards and consumer credit, protection and fraud, and any failure or perceived failure to comply with these laws could harm our reputation or lead to litigation, which could adversely affect our business, financial condition or results of operations.

Furthermore, we are subject to import laws and tariffs which could impact our ability to source and secure food products, other supplies and equipment necessary to operate our restaurants.

Following the declaration of the COVID-19 pandemic in March 2020, federal, state and local governments responded by implementing numerous regulations that have had an effect on, and continue to have an effect on, our business. Regulations relating to employee sick leave, opening and closing of restaurants and dining rooms, business hours, sanitation practices, guest spacing within dining rooms and other social distancing practices and personal protective equipment usage by both our employees and guests have materially affected the way we operate our business and serve our customers.

For a discussion of the various risks, we face from regulation and compliance matters, see “Risk Factors.”

Licensure, Zoning, and Alcohol Regulations

Although we have not experienced, and do not anticipate, any significant difficulties, delays or failures in obtaining required licenses, permits or approvals, any such problem could delay or prevent the opening of, or adversely impact the viability of, a particular restaurant or group of restaurants. Additionally, difficulties, delays or failure to retain or renew licenses, permits or approvals, or increased compliance costs due to changed regulations, could adversely affect operations at existing restaurants.

In addition, to develop and construct restaurants, we must comply with applicable zoning and land use regulations. Stringent and varied requirements of local governmental bodies with respect to zoning and land use could delay or even prevent construction and increase development costs for new restaurants. We are also required to comply with the accessibility standards mandated by the U.S. Americans with Disabilities Act, which generally prohibits discrimination in accommodation or employment based on disability. We may in the future have to modify restaurants, for example, by adding access ramps or redesigning certain architectural fixtures, to provide service to or make reasonable accommodations for disabled persons. While these expenses could be material, our current expectation is that any such action will not require us to expend substantial funds.

Some of our sales are attributable to the sale of alcoholic beverages. Alcoholic beverage control regulations require each of our restaurants to apply to a state authority and, in certain locations, county or municipal authorities for a license that must be renewed annually and may be revoked or suspended for cause at any time. Alcoholic beverage control regulations relate to numerous aspects of daily operations of our restaurants, including minimum age of patrons and employees, hours of operation, advertising, trade practices, wholesale purchasing, other relationships with alcohol manufacturers, wholesalers and distributors, inventory control and handling, storage and dispensing of alcoholic beverages. We are also subject in certain states to “dram shop” statutes, which generally provide a person injured by an intoxicated person the right to recover damages from an establishment that wrongfully served alcoholic beverages to the intoxicated person. We carry liquor liability coverage as part of our existing comprehensive general liability insurance. We may decide not to obtain liquor licenses in certain jurisdictions due to the high costs associated with obtaining liquor licenses in such jurisdictions.

Labor Laws

Further, we are subject to the U.S. Fair Labor Standards Act, the U.S. Immigration Reform and Control Act of 1986, the Occupational Safety and Health Act and various other federal and state laws governing similar matters including minimum wages, overtime, workplace safety and other working conditions. Significant numbers of our food service and preparation personnel are paid at rates related to the applicable minimum wage, and further increases in the minimum wage or other changes in these laws could increase our labor costs. Our ability to respond to minimum wage increases by increasing menu prices will depend on the responses of our competitors and guests. Our distributors and suppliers also may be affected by higher minimum wage and benefit standards, which could result in higher costs of goods and services supplied to us. We may also be subject to lawsuits from our employees, the U.S. Equal Employment Opportunity Commission or others alleging violations of federal and state laws regarding workplace and employment matters, discrimination and similar matters.

Food Safety and Health

There has been increased regulation of certain food establishments in the United States, such as the requirements to maintain a HACCP system. HACCP refers to a management system in which food safety is addressed through the analysis and control of potential hazards from production, procurement and handling, to manufacturing, distribution and consumption of the finished product. Many states have required restaurants to develop and implement HACCP systems and the U.S. government continues to expand the sectors of the food industry that must adopt and implement HACCP programs. Although we have implemented a HACCP system for managing food safety and quality at our restaurants for sushi rice and other foods which require time and temperature control for safety, we cannot provide assurance that we will not have to expend additional time and resources to comply with new food safety requirements either required by current or future federal food safety regulation or legislation. Additionally, our suppliers may initiate or otherwise be subject to food recalls that may impact the availability of certain products, result in adverse publicity or require us to take actions that could be costly for us or otherwise harm our business.

A number of states, counties and cities have enacted menu labeling laws requiring multi-unit restaurant operators to disclose to consumers certain nutritional information or have enacted legislation restricting the use of certain types of ingredients in restaurants. Many of these requirements are inconsistent or interpreted differently from one jurisdiction to another. These requirements may be different or inconsistent with requirements that we are subject to under the Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act (collectively, the “ACA”), which establishes a uniform, federal requirement for certain restaurants to post nutritional information on their menus. Specifically, the ACA requires chain restaurants with 20 or more locations in the United States operating under the same name and offering substantially the same menus to publish the total number of calories of standard menu items on menus and menu boards, along with a statement that puts this calorie information in the context of a total daily calorie intake. The ACA also requires covered restaurants to provide to consumers, upon request, a written summary of detailed nutritional information for each standard menu item, and to provide a statement on menus and menu boards about the availability of this information upon request. While our ability to adapt to consumer preferences is a strength of our concepts, the effect of such labeling requirements on consumer choices, if any, is unclear at this time.

Environmental

We are subject to federal, state and local environmental laws and regulations concerning waste disposal, pollution, protection of the environment, and the presence, discharge, storage, handling, release and disposal of, or exposure to, hazardous or toxic substances (“environmental laws”). Federal and state environmental regulations have not had a material effect on our operations to date, however, these environmental laws can provide for significant fines and penalties for non-compliance and liabilities for remediation, sometimes without regard to whether the owner or operator of the property knew of, or was responsible for, the release or presence of the hazardous or toxic substances. Third parties may also make claims against owners or operators of properties for personal injuries and property damage associated with releases of, or actual or alleged exposure to, such substances. We are not aware of any environmental laws that will materially affect our earnings or competitive position, or result in material capital expenditure relating to our restaurants. However, we cannot predict what environmental laws will be enacted in the future, how existing or future environmental laws will be administered, interpreted or enforced, or the amount of future expenditures that we may need to make to comply with, or to satisfy claims relating to, environmental laws. It is possible that we will become subject to environmental liabilities on our properties, and any such liabilities could materially affect our business, financial condition or results of operations.

China

The Company is subject to various laws in China affecting its Chinese subsidiary, namely Ginza Onodera Shanghai (“Chinese Subsidiary”), in China, including the following:

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Our subsidiary in China is required to obtain (1) the food operation license; (2) registration or approvals regarding sale of alcoholic beverages; (3) the environmental protection assessment and inspection registration or approval; and (4) the fire safety inspection acceptance approval or other alternatives. Please see “Risk Factors—Risks Related to Doing Business in China—We require various approvals, licenses and permits to operate our business and the loss of or failure to obtain or renew any or all of these approvals, licenses and permits could adversely affect our business and results of operations;”

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Cash transfers from the Company’s Chinese Subsidiary to any entities outside of China are subject to PRC government control of currency conversion. Shortages in the availability of foreign currency may restrict the ability of the Chinese Subsidiary to remit sufficient foreign currency to pay dividends or make other payments to the Company, or otherwise satisfy their foreign currency-denominated obligations. See “—Regulations Relating to Dividend Distribution” and “—Regulations Relating to Taxation” for more information;

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We are subject to Chinese regulations on loans to and direct investment in Chinese entities by offshore holding companies. Thus, loans by us to our Chinese subsidiary to finance their activities cannot exceed statutory limits and must be registered with the local counterparts of the State Administration of Foreign Exchange (“SAFE”). If we decide to finance our Chinese subsidiary by means of capital contributions, in practice, we might be still required to obtain approval from China’s Ministry of Commerce (“MOFCOM”) or its local counterparts. See “Risk Factors—Risks Related to Doing Business in China—Chinese regulation of loans to, and direct investment in, Chinese entities by offshore holding companies and governmental control of currency conversion may restrict or prevent us from making loans or additional capital contributions to our Chinese subsidiary, which may materially and adversely affect our liquidity and our ability to fund and expand our business” for more information;

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Chinese Subsidiary is subject to cybersecurity regulations, including those enforced by the Cyberspace Administration of China (“CAC”) including the PRC Cybersecurity Law, which imposes tightened requirements on data privacy and cybersecurity practices, the PRC Data Security Law, which imposes data security and privacy obligations on entities and individuals carrying out data activities (including activities outside of the PRC), requires a national security review of data activities that may affect national security, and imposes restrictions on data transmissions, the PRC Personal Information Protection Law, which sets out the regulatory framework for handling and protection of personal information and transmission of personal information, among others. See “Risk Factors—Risks Related to Our Business and Industry—Unauthorized access to, or improper use, disclosure, theft or destruction of, our customer or employee personal, financial or other data or our proprietary or confidential information that is stored in our information systems or by third parties on our behalf could result in substantial costs, expose us to litigation and damage our reputation;” and

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Chinese Subsidiary is also subject to tariffs and regulations on imported commodities and equipment and laws regulating foreign investment, as well as anti-bribery and corruption laws. Compliance with applicable laws and regulations has not had a material effect on the Company’s capital expenditures, earnings and competitive position. The Company has not historically been materially and adversely affected by such requirements or by any difficulty, delay or failure to obtain required approvals, licenses, permits, registrations or filings and has obtained all material required approvals. As of this date, no material permissions have been denied to us by relevant government authorities in China, and we have not received any inquiry, notice, warning, or sanctions regarding our business operations and corporate structure from the relevant PRC governmental agency that would have a material impact on our business, results of operations or financial condition. However, we cannot predict the effect that the compliance with laws and regulations may have on our capital expenditures, earnings and competitive position in the future, or how we may be affected if we do not receive or maintain any required permissions or approvals, inadvertently conclude that such permissions or approvals are not required, or if applicable laws, regulations or interpretations change and we are required to obtain additional permissions or approvals in the future. If (i) we have inadvertently concluded that such permissions, approvals, licenses or permits have been acquired or are not required, or (ii) applicable laws, regulations, or interpretations change and we are required to obtain such permissions, approvals, licenses or permits in the future, then we may have to expend time and costs to procure them. If we are unable to do so on commercially reasonable terms or in a timely manner, it could cause significant disruption to our business operations and damage our reputation, which would in turn have a material adverse effect on our business, results of operations and financial condition. See “Risk Factors” for a discussion of additional risks relating to federal, state, provincial, local and international governmental regulation of our business.

Regulations Relating to Dividend Distribution

The Chinese laws, rules and regulations applicable to our Chinese Subsidiary permits payments of dividends only out of their accumulated profits, if any, determined in accordance with applicable accounting standards and regulations. In addition, under Chinese law, an enterprise incorporated in China is required to set aside at least 10% of its after-tax profits each year, after making up previous years’ accumulated losses, if any, to fund certain statutory reserve funds, until the aggregate amount of such a fund reaches 50% of its registered capital. As a result, our Chinese Subsidiary is restricted in its ability to transfer a portion of its net assets to us in the form of dividends.

Regulations Relating to Taxation

Enterprise Income Tax.

Under the China Enterprise Income Tax Law (the “EIT Law”) and its implementation rules, a China resident enterprise is subject to Chinese enterprise income tax in respect of its net taxable income derived from sources inside and outside China. The term “resident enterprise” refers to any enterprise established in China and any enterprise established outside China with a “de facto management body” within China.

Our Chinese Subsidiary is regarded as a China resident enterprise by virtue of its incorporation in China, and is generally subject to Chinese enterprise income tax on its worldwide income at the current uniform rate of 25%, unless reduced under certain specific qualifying criteria. Our Chinese Subsidiary may deduct reasonable expenses that are actually incurred and are related to the generation of their income, including interest and other borrowing expenses, amortization of land use rights and depreciation of buildings and certain fixed assets, subject to any restrictions that may be imposed under the EIT Law, its implementation regulations and any applicable tax notices and circulars issued by the Chinese government or tax authorities.

The Company and its subsidiaries that are organized outside of China intend to conduct their management functions in a manner that does not cause them to be a China resident enterprise, including by carrying on its day-to-day management activities and maintaining its key records, such as resolutions of its board of directors and resolutions of stockholders, outside of China. As such, we do not believe that the Company or any of its non-Chinese subsidiaries should be considered a China resident enterprise for purposes of the EIT Law, and should not be subject to Chinese enterprise income tax on that basis. See “Risk Factors—Risks Related to Doing Business in China—Under the EIT Law, if we are classified as a China resident enterprise for Chinese enterprise income tax purposes, such classification would likely result in unfavorable tax consequences to us and our non-Chinese stockholders.”

Repatriation of Dividends from Our Chinese Subsidiary.

Dividends (if any) paid by our Chinese Subsidiary to its direct offshore parent companies are subject to Chinese withholding income tax at the rate of 10%, provided that such dividends are not effectively connected with any establishment or place of the offshore parent company in China. The 10% withholding income tax rate may be reduced or exempted pursuant to the provisions of any applicable tax treaties or tax arrangements. See “Risk Factors—Risks Related to Doing Business in China—We rely to an extent on dividends and other distributions on equity paid by our operating subsidiary in China to fund offshore cash requirements.”

Gains on Direct Disposal of Equity Interests in Our Chinese Subsidiary.

Under the EIT Law and its implementation rules, gains derived by non-resident enterprises from the sale of equity interests in a China resident enterprise are subject to Chinese withholding income tax at the rate of 10%. The 10% withholding income tax rate may be reduced or exempted pursuant to applicable tax treaties or tax arrangements. The gains are computed based on the difference between the sales proceeds and the original investment basis. Stamp duty is also payable upon a direct transfer of equity interest in a China resident enterprise. The stamp duty is calculated at 0.05% on the transfer value, payable by each of the transferor and transferee. We may be subject to these taxes in the event of any future sale by us of our Chinese Subsidiary.

Gains on Indirect Disposal of Equity Interests in Our China Subsidiary.

In February 2015, the STA issued the STA’s Bulletin on Several Issues of Enterprise Income Tax on Income Arising from Indirect Transfers of Property by Non-resident Enterprises (“Bulletin 7”). Pursuant to Bulletin 7, an “indirect transfer” of Chinese taxable assets, including equity interests in a China resident enterprise (“Chinese interests”), by a non-resident enterprise, may be re-characterized and treated as a direct transfer of Chinese taxable assets, if such arrangement does not have reasonable commercial purpose and the transferor avoids payment of Chinese enterprise income tax. Where a non-resident enterprise conducts an “indirect transfer” of Chinese interests by disposing of equity interests in an offshore holding company, the transferor, transferee and/or the China resident enterprise being indirectly transferred may report such indirect transfer to the relevant Chinese tax authority, which may in turn report upward to the STA. Using general anti-tax avoidance provisions, the STA may treat such indirect transfer as a direct transfer of Chinese interests if the transfer avoids Chinese tax by way of an arrangement without reasonable commercial purpose. As a result, gains derived from such indirect transfer may be subject to Chinese enterprise income tax, and the transferee or other person who is obligated to pay for the transfer would be obligated to withhold the applicable taxes, currently at a rate of up to 10% of the capital gain in the case of an indirect transfer of equity interests in a China resident enterprise. Both the transferor and the party obligated to withhold the applicable taxes may be subject to penalties under Chinese tax laws if the transferor fails to pay the taxes and the party obligated to withhold the applicable taxes fails to withhold the taxes.

The above regulations do not apply if either (i) the selling non-resident enterprise recognizes the relevant gain by purchasing and selling equity of the same listed enterprise in the open market (the “listed enterprise exception”); or (ii) the selling non-resident enterprise would have been exempted from enterprise income tax in China pursuant to applicable tax treaties or tax arrangements, if it had directly held and transferred such Chinese interests that were indirectly transferred. The China indirect transfer rules do not apply to gains recognized by individual stockholders. However, in practice, there have been a few reported cases of individuals being taxed on the indirect transfer of Chinese interests and the law could be changed so as to apply to individual stockholders, possibly with retroactive effect. In addition, the PRC Individual Income Tax Law and relevant regulations (“IITL”), revised effective January 1, 2019, impose general anti-avoidance tax rules (“GAAR”) on transactions conducted by individuals. As a result, if the China tax authority invokes the GAAR and deems that indirect transfers made by individual stockholders lack reasonable commercial purposes, any gains recognized on such transfers might be subject to individual income tax in China at the standard rate of 20%.

Intellectual Property and Trademarks

We do not license any specific intellectual property related to our business, except for the trademark rights owned by our subsidiary, ONDOERA Food Service Co. Ltd.

We believe that the trademarks rights that we license from Onodera Food Service Co., Ltd. have significant value and are important to the marketing and reputation of our brand. Although “Ginza Onodera” is a federally registered service mark owned by Onodera Food Service Co., Ltd., such marks could be imitated in ways that we or Onodera Food Service Co., Ltd. cannot prevent. It is our policy to pursue registration of our intellectual property whenever possible and to oppose vigorously any infringement thereof. However, we cannot predict whether steps taken to protect such rights will be adequate or whether Onodera Food Service Co., Ltd. and Onodera Group Co., Ltd. will take steps to enforce such rights with regard to any intellectual property that we license from them. See “Risk Factors—We may become involved in lawsuits involving Onodera Food Service Co., Ltd. as the owner of intellectual property, or us as a licensee of intellectual property from Onodera Food Service Co., Ltd., to protect or enforce intellectual property rights, which could be expensive, time consuming, and unsuccessful.” We are aware of third-party restaurants with names similar to our restaurant name in certain limited geographical areas. However, we believe such uses will not adversely affect us.

Recent Developments

Formation

Sushi Ginza Onodera, Inc. was incorporated in the State of Delaware on February 24, 2023. Upon incorporation, we were authorized to issue 1,000 shares of common stock, par value $0.00001 per share, and 100 shares of preferred stock, par value $0.00001 per share. On February 27, 2023, we issued five (5) shares of common stock, par value $0.00001 per share, to Onodera Group Co., Ltd., for $2,000 per share for a total subscription of $10,000.

Independent Director Agreement

On July 1, 2023, Mr. Ferdinand Groenewald was appointed as an independent director of the Board of Directors of the Company. Ferdinand Groenewald entered into an Independent Director Agreement with the Company dated as of July 1, 2023. For a detailed description of the terms of the Independent Director Agreement, see “Executive and Director Compensation —Independent Director Agreements” on page 95 of this prospectus.

Increase in Authorized Shares

On August 21, 2023, we increased the number of authorized shares of common stock from 1,000 shares to 100,000,000 shares of common stock, and increased the number of authorized shares of preferred stock, from 100 shares to 1,000,000 shares of preferred stock.

Reorganization and Share Exchange Agreement

On August 22, 2023, pursuant to the terms of a share exchange agreement among Sushi Ginza Onodera, Inc. and LEOC Co., Ltd., we issued 29,999,995 shares of our common stock to LEOC Co., Ltd. in exchange for all outstanding shares of common stock of Onodera Food Service Co., Ltd., which holds 100% of the issued and outstanding capital stock of Ginza Onodera California, Inc. (formed in California) and Ginza Onodera USA Inc. (formed in Hawaii), and which holds 90% of the issued and outstanding capital stock of the Ginza Onodera Shanghai (formed in Shanghai, China).

Business Support Agreement

On September 1, 2023, our wholly owned subsidiary, Onodera Food Services Co., Ltd., entered into a Business Support Agreement with LEOC Co., Ltd., our parent company, pursuant to which LEOC Co., Ltd. will provide strategic, operational or other support to us. For additional information regarding this Business Support Agreement, see “Description of Business – Business Support” on page 78 of this prospectus.

Approval of the Onodera 2023 Equity Incentive Plan

On October 3, 2023, our Board of Directors and stockholder holding a majority of our outstanding ordinary shares approved the Onodera 2023 Equity Incentive Plan (the “Plan”). The Plan covers up to 1,050,000 shares of common stock (“Shares”) which may be used for Awards. The Plan permits the grant of Incentive Stock Options, Nonstatutory Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Awards, Cash-Based Awards and Other Stock-Based Awards and as discussed below. Nonstatutory Stock Options, SARs, Restricted Stock, Restricted Stock Units, Performance Shares and Performance Units may be granted to employees, directors and consultants/contractors, and Incentive Stock Options may be granted only to employees.

The foregoing description of the 2023 Equity Incentive Plan is qualified in its entirety by reference to the 2023 Equity Incentive Plan, a copy of which is filed as Exhibit 10.1 to the registration statement of which this prospectus forms a part.

Intercompany Loans

On May 25, 2023, Onodera Group Co., Ltd. loaned 60,000,000 yen (approximately $452,000) to Onodera Food Service Co., Ltd. Such loan matures on August 24, 2023, and bears interest at a rate of 0.5 percent (0.5%) per year.

Onodera Group Co., Ltd. loaned 20,000,000 yen (approximately $151,000) on May 18, 2023, and 80,000,000 yen (approximately $603,000) on July 19, 2023, to Ginza Onodera USA Inc. Such loans mature on May 17, 2024, and July 18, 2024, respectively, and bear interest at a rate of 0.5 percent (0.5%) per year.

The loan agreements are filed as Exhibits 10.7, 10.8, 10.9, 10.12, and 10.13 to the registration statement of which this prospectus forms a part.

Bank Loans

On July 21, 2023, our subsidiary, Onodera Food Service Co., Ltd., entered into a 250 million yen ($1.7 million) overdraft agreement with Resona Bank, Ltd. and borrowed 210 million yen ($1.4 million) on July 25, 2023, and 40 million yen ($0.3 million) on August 31, 2023 at an interest rate of 0.84% to fund facilities for the Kaiten Sushi Kyoto restaurant.

The loan agreements are filed as Exhibits 10.10 and 10.11 to the registration statement of which this prospectus forms a part.

Employment Agreements

On October 3, 2023, the Company entered into executive employment agreements with Shinji Nagao to serve as Chief Executive Officer and President, Keiichi Yamamoto to serve as Chief Administrative Officer, Executive Vice President and Secretary, and Shinichi Miyazawa to serve as Chief Financial Officer of Sushi Ginza Onodera, Inc. See” Executive and Director Compensation – Employment Agreements” for a description of these agreements, which are filed as Exhibits 10.2, 10.3, and 10.4 to the registration statement of which this prospectus forms a part.

Stock Split

On November 27, 2023, our board of directors and shareholders approved the Reverse Stock Split and on December 1, 2023, we filed a certificate of amendment to our Certificate of Incorporation implementing the Reverse Stock Split in a ratio of 1-for-4.28571429, effective December 1, 2023. Therefore, on December 1, 2023, following the Reverse Stock Split, Hiroshi Onodera indirectly beneficially owned through LEOC Co., Ltd., a Japanese corporation, and Onodera Group Co., Ltd., a Japanese corporation which owned 100% of LEOC Co., Ltd., an aggregate of 7,000,000 shares of our common stock, which represents 100% of the voting power of our outstanding capital stock.

Employees

As of July 31, 2023, we had a total of 147 full-time employees and 124 part-time employees. 211 of these employees are temporarily assigned employees from LEOC Co., Ltd. LEOC Co., Ltd. makes payroll payments to these assigned employees while Onodera Food Service Co., Ltd., an operating subsidiary of the Company, reimburses LEOC Co., Ltd. for such payroll payments. LEOC Co., Ltd. is a member of a labor union called the UI Zensen Union, which calls itself the All-LEOC Union. Labor-management relations are stable. See “Risk Factors – Risks Related to Our Business and Industry – We have historically received strategic, operational and financial support from Onodera Group Co., Ltd. and affiliated companies, and as we increase our independence from Onodera Group, we may face difficulties replacing certain services, supplies and financial assistance Onodera Group has provided to us.”

Legal Proceedings

From time to time, we are involved in various claims and legal actions arising in the ordinary course of business. There are no pending legal proceedings to which we are a party or in which any director, officer or affiliate of ours, any owner of record or beneficially of more than 5% of any class of our voting securities, or security holder is a party adverse to us or has a material interest adverse to us.

Description of Real Property

Our corporate headquarters are located at 1-1-3 Otemachi Chiyoda-ku, Tokyo 100-0004, Japan, where Onodera Food Service Co., Ltd. leases approximately 1,661 rentable square feet of office space from an affiliated company, Onodera Healthcare Service Co., Ltd. This lease has an original term ending in November 2024 with an automatic 2-year renewal option. The terms of the office lease provide for a base rent payment of 1,210 thousand yen (approximately $9 thousand) per month including common area expenses.

We currently operate 13 restaurants through standard tenancy agreements out of leased properties located at:

(1) Sushi Ginza Onodera		Lower ground floor, Sunlit Ginza Building Ⅲ, 5-14-14 Ginza, Chuo-ku,
Souhonten		Tokyo 104-0061, Japan

(2) Sushi Ginza Onodera		2nd floor, Sunlit Ginza Building Ⅲ, 5-14-14 Ginza, Chuo-ku,
Honten		Tokyo 104-0061, Japan

(3) Sushi Ginza Onodera		1st floor, Belle Flat Tamagawa, 3-4-2 Tamagawa, Setagaya-ku,
Otouto Honten		Tokyo 158-0094, Japan

(4) Sushi Ginza Onodera		1st floor, Ginza USB, 5-14-17 Ginza, Chuo-ku,
Toryumon		Tokyo 104-0061, Japan

(5) Kaiten Sushi Ginza Onodera		1st floor, Il PALAZZINO Omotesando, 5-1-6 jingumae, Shibuya-ku,
Honten		Tokyo 150-0001, Japan

(6) Tachigui Sushi Ginza Onodera		1st floor, Il Palazzino Omotesando, 5-1-6 jingumae, Shibuya-ku,
Honten		Tokyo 150-0001, Japan

(7) Tempura Ginza Onodera		4th floor, Sunlit Ginza Building Ⅲ, 5-14-14 Ginza, Chuo-ku,
Higashi-ginza		Tokyo 104-0061, Japan

(8) Tempura Ginza Onodera		6th floor, Kinsei Building, 8-5-10 Ginza, Chuo-ku,
Namiki-dori		Tokyo 104-0061, Japan

(9) Makiyaki Ginza Onodera		9th floor, Sunlit Ginza Building Ⅲ, 5-14-14 Ginza, Chuo-ku,
		Tokyo 104-0061, Japan

(10) Sushi Ginza Onodera		609 La Cienega Blvd, West Hollywood, California 90069
California

(11) Sushi Ginza Onodera Hawaii		808 Kapahulu Ave, Honolulu, Hawaii 96816

(12) Ginza Onodera Shanghai		3rd floor, Bund 18, Zhongshan Dong Yi Rd, Huangpu, Shanghai

(13) Kaiten Sushi Ginza Onodera Kyoto		Shijo Kawaramachi Bldg. 1F, 305 Junpo-cho, Shimogyo-ku, Kyoto-shi, Kyoto

We currently lease premises for the foregoing 13 restaurants, ranging in terms of two to ten years, with monthly lease rates ranging from $3,475 to $48,808.

We believe that our facilities are suitable to meet our current needs.

MANAGEMENT

Executive Officers and Directors

The following table sets forth the name and age as of December 27, 2023, and position of the individuals who currently serve as directors and executive officers of Sushi Ginza Onodera, Inc.

Name		Age	Position
Shinji Nagao		44	Chief Executive Officer, President and a Director
Keiichi Yamamoto		52	Chief Administrative Officer, Executive Vice President, Secretary, and a Director
Shinichi Miyazawa		41	Chief Financial Officer
Ferdinand Groenewald		39	Independent Director
Yasuo Okamoto		75	Independent Director
Akemi Fukuoji	&nb

Sushi Ginza Onodera, Inc. S-1