The ONE Group Hospitality, Inc. Annual report [Section 13 and 15(d), not S-K Item 405]

Annual report [Section 13 and 15(d), not S-K Item 405]

Income Taxes (Tables)

Income Taxes (Tables)

12 Months Ended

Dec. 28, 2025

Schedule of components of loss before provision (benefit) for income taxes

The components of loss before provision (benefit) for income taxes were as follows (in thousands):


		For the year ended December 28,			For the year ended December 31,
		2025			2024
Domestic		$	(32,851)		$	(26,383)
Foreign			(50)			22
Total		$	(32,901)		$	(26,361)

Schedule of components of provision (benefit) for income taxes

The components of the Company’s provision (benefit) for income taxes were as follows (in thousands):


		For the year ended December 28,			For the year ended December 31,
		2025			2024
Current:
Federal		$	(66)		$	66
State and local			1,041			544
Foreign			232			143
Total current			1,207			753
Deferred:
Federal			52,318			(8,054)
State and local			7,159			(1,133)
Foreign			—			—
Total deferred			59,477			(9,187)
Total provision (benefit) for income taxes		$	60,684		$	(8,434)

Schedule of effective tax rate differs from the statutory rates


		For the year ended December 28,			For the year ended December 31,
		2025			2024
		Amount		Percent	Amount		Percent
US Federal Statutory Tax Rate		$	(6,909)	21.0%	$	(5,536)	21.0%
Domestic State and Local Income Taxes, Net of Federal Effect⁽¹⁾			7,981	(24.3)%		(835)	3.2%
Tax Credits
FICA TIP Credit			(7,571)	23.0%		(5,668)	21.5%
Nontaxable or Nondeductible items
FICA TIP Wages			1,590	(4.8)%		1,190	(4.5)%
Nondeductible Executive Compensation			433	(1.3)%		813	(3.1)%
Transaction Costs			—	—		931	(3.5)%
Other Nondeductible items			510	(1.6)%		384	(1.5)%
Changes in Valuation Allowance			63,897	(194.2)%		—	—
Other Adjustments			753	(2.3)%		287	(1.1)%
Effective income tax rate		$	60,684	(184.4)%	$	(8,434)	32.0%

(1) For the year ending December 28, 2025 and December 31, 2024, state and local income taxes in California, Florida, and New York comprise the majority of the domestic state and local income taxes.

Schedule of income tax effects of temporary differences that give rise to significant portions of deferred tax assets and liabilities

The income tax effects of temporary differences that give rise to significant portions of deferred tax assets and liabilities are as follows (in thousands):


		For the year ended December 28,			For the year ended December 31,
		2025			2024
Deferred tax assets:
Operating lease liabilities		$	73,405		$	71,448
Stock compensation			379			361
FICA tip credit carryforward			57,224			49,407
Net operating loss			9,946			7,324
Goodwill			435			589
Inventory			36			101
Charitable contributions carryforward			184			37
Foreign tax credit carryforward			622			622
Deferred revenue			620			1,627
State and local tax credit carryforward			21			21
Expenses not deductible until paid			2,706			2,961
IRC 163(j) disallowed interest carryforward			38,287			34,002
Debt issuance costs			187			—
Kona Grill related acquisition costs			558			621
Total deferred tax assets			184,610			169,121
Deferred tax liabilities:
Operating lease right-of-use assets			(60,838)			(60,641)
Depreciation and amortization			(23,124)			(19,599)
Trademarks and franchise agreements			(30,221)			(30,215)
Basis in LLC interest			(39)			—
Other			(451)			(136)
Total deferred tax liabilities			(114,673)			(110,591)
Valuation allowance			(75,124)			(4,248)
Net deferred tax assets		$	(5,187)		$	54,282

Schedule of activity of uncertain tax positions

The following table summarizes the activity related to the Company’s uncertain tax positions (in thousands):


		For the year ended December 28,			For the year ended December 31,
		2025			2024
Balance, beginning of year		$	127		$	—
Increase related to acquisitions			—			127
Balance, end of year		$	127		$	127

Schedule of income taxes paid, net of refunds

The following table summarizes the Company’s income taxes paid, net of refunds, as of December 28, 2025 and December 31, 2024 (in thousands):


		For the year ended December 28,			For the year ended December 31,
		2025			2024
Federal		$	131		$	—
Aggregated state and local jurisdictions			171			45
Disaggregated state and local jurisdictions
Texas			306			187
Minnesota			109			—
Florida			80			75
New York			116			40
Pennsylvania			66			—
Massachusetts			49			—
Illinois			—			50
Tennessee			—			(28)
Foreign			183			128
Cash paid for income taxes, net of refunds			1,211			497