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. The prices of many of the ingredients we use to prepare our food, as well as construction costs, are affected by exchange rates, trade tariffs, and increases in the prices of other commodities. We have been able to partially offset cost increases that resulted from a number of factors, including market conditions, shortages or interruptions in supply due to weather or other conditions beyond our control and 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 have impacted, and could in the future impact, our operating results to the extent that such increases cannot be offset by menu price increases or operational adjustments. Foreign Currency Exchange Risk We have exposure to foreign currency exchange rate fluctuations from operations in South Korea. To date, the impact has not been material to our results. Inflation Risk The primary areas where inflation impacts our operations are food, beverage, labor and energy costs. Our restaurant operations are subject to federal and state minimum wage laws and other laws governing such matters as working conditions, overtime and tip credits. Significant numbers of our restaurant personnel are paid at rates dependent on 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 have impacted, and could in the future impact, our operating results to the extent such increases cannot be passed through to our guests. Historically, including the first six months of 2026, inflation has not had a material effect on our 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 sales growth in an amount sufficient to offset inflationary or other cost pressures. Interest Rate Risk We are exposed to interest rate risk on our variable rate borrowings, consisting of $12.1 million outstanding under our line of credit and $7.6 million of term loans with PCB Bank, each bearing interest at the Wall Street Journal Prime Rate plus 0.25% (7.00% at June 30, 2026). A hypothetical 100 basis point increase in the prime rate would increase our annual interest expense by approximately $0.2 million.