What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-01-07 compared with 2024-07-09 · 75 added, 132 removed, 251 unchanged (45% of the section changed)

3 unchanged sentences

(amounts in thousands, except par value)

November 30, 2024

August 31, 2024

1 unchanged sentence

Cash and cash equivalents

Short-term investments

Accounts and other receivables

26 unchanged sentences

50,000 shares authorized,

10,243 and 10,147 shares issued and outstanding as of May 31, 2024

11,064 and 10,253 shares issued and outstanding as of November 30, 2024

and August 31, 2024, respectively

1 unchanged sentence

10,000 shares authorized,

1,000 shares issued and outstanding as of May 31, 2024

1,000 shares issued and outstanding as of November 30, 2024

and August 31, 2024

1 unchanged sentence

Accumulated deficit

Accumulated other comprehensive income

Total stockholders' equity

2 unchanged sentences

Kura Sushi USA, Inc.

Condensed Statements of Operations and Comprehensive (Loss) Income

Condensed Statements of Operations and Comprehensive Loss

(amounts in thousands, except per share data)

Three Months Ended May 31,

Nine Months Ended May 31,

Three Months Ended November 30,

Restaurant operating costs:

7 unchanged sentences

Total operating expenses

Operating (loss) income

Operating loss

Other expense (income):

1 unchanged sentence

Interest income

(Loss) income before income taxes

Loss before income taxes

Income tax expense

Net (loss) income

Net (loss) income per Class A and Class B shares

Net loss per Class A and Class B shares

Weighted average Class A and Class B shares outstanding

Other comprehensive income (loss):

Unrealized loss on short-term investments

Comprehensive (loss) income

Unrealized gain on short-term investments

Comprehensive loss

The accompanying notes are an integral part of these condensed financial statements.

2 unchanged sentences

(amounts in thousands)

Comprehensive

Stockholders'

Additional Paid-in

Total Stockholders'

Balances as of August 31, 2024

1 unchanged sentence

Employee stock plan

Other comprehensive income

Issuance of common stock in connection with follow-on public offering, net of underwriter discounts and issuance costs

Balances as of November 30, 2024

Stock-based compensation

Employee stock plan

Other comprehensive income

Balances as of February 29, 2024

Stock-based compensation

Employee stock plan

Other comprehensive loss

Balances as of May 31, 2024

Additional Paid-in

Comprehensive

Stockholders'

Total Stockholders'

Balances as of August 31, 2023

1 unchanged sentence

Employee stock plan

Other comprehensive income

Balances as of November 30, 2023

Stock-based compensation

Employee stock plan

Balances as of February 28, 2023

Stock-based compensation

Employee stock plan

Issuance of common stock in connection with follow-on public offering, net of underwriter discounts and issuance costs

Other comprehensive loss

Balances as of May 31, 2023

The accompanying notes are an integral part of these condensed financial statements.

2 unchanged sentences

(amounts in thousands)

Nine Months Ended May 31,

Three Months Ended November 30,

Cash flows from operating activities

2 unchanged sentences

Stock-based compensation, net of amounts capitalized

Loss on disposal of property and equipment

Non-cash lease expense

20 unchanged sentences

Repayment of principal on finance leases

Taxes paid on vested restricted stock awards

Proceeds from exercise of stock options

2 unchanged sentences

Net cash provided by financing activities

Decrease in cash and cash equivalents

Increase in cash and cash equivalents

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

Supplemental disclosures of cash flow information

Cash paid for income taxes

Noncash investing activities

Acquisition of finance leases

Amounts unpaid for purchases of property and equipment

Stock-based compensation capitalized to property and equipment, net

The accompanying notes are an integral part of these condensed financial statements.

7 unchanged sentences

unless expressly indicated or the context otherwise requires.

Follow-On Offering

On November 13, 2024, the Company completed an underwritten public offering of common stock pursuant to the Company’s universal shelf registration statement on Form S-3, selling an aggregate of 800,328 shares of Class A common stock, including the exercise in full of the underwriters’ option to purchase 104,390 additional shares, at the price of $ 85.00 per share less an underwriting discount of $ 4.25 per share.

The Company received aggregate net proceeds of $ 64.4 million after deducting the underwriting discounts and commissions and offering expenses payable by the Company.

The proceeds are to be used for general corporate purposes, including capital expenditures, working capital, and other business purposes.

No payments were made by the Company to directors, officers or persons owning 10 % or more of the Company’s common stock or to their associates, or to the Company’s affiliates.

Basis of Presentation

6 unchanged sentences

The results of operations for interim periods are not necessarily indicative of results to be expected for the fiscal year ending August 31, 2025 or for any other future annual or interim period.

Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation.

The Company’s fiscal year begins on September 1 and ends on August 31, and references made to “fiscal year 2025” and “fiscal year 2024” refer to the Company’s fiscal years ending August 31, 2025 and ended August 31, 2024 , respectively.

2 unchanged sentences

Significant items subject to such estimates include asset retirement obligations, stock-based compensation, the useful lives of assets, the assessment of the recoverability of long-lived assets, and income taxes.

The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate.

The Company evaluates its estimates and

assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate.

Actual results could differ materially from those estimates and assumptions.

Short-Term Investments

Short-term investments consist of certificates of deposits and Treasury bills.

The Company considers all highly liquid investments with an original maturity date greater than three months but less than one year as short-term investments.

The carrying value of the short-term investments is equivalent to their amortized cost basis.

As of May 31, 2024 and August 31, 2023, short-term investments were $ 1.3 million and $ 8.5 million, respectively.

The certificates of deposits are deposited at Federal Deposit Insurance Corporation (“FDIC”) insured banks.

The certificates of deposits are in amounts of $ 250,000 and deposited in multiple banks to ensure that the entire deposit balance is eligible for FDIC insurance.

Certificates of deposits and Treasury bills are classified as available-for-sale debt securities which are measured at fair value with unrealized gains or losses recorded in other comprehensive income (loss).

As of May 31, 2024 , the Company recorded no unrealized gains or losses on short-term investments in accumulated other comprehensive income (loss).

The Company reclassified $ 76 thousand out of accumulated other comprehensive income into earnings for the period related to maturities of certificates of deposits and a Treasury bill, which consisted of $ 75 thousand in realized gains on a Treasury bill and $ 1 thousand in realized gains on certificates of deposits.

The Company determines realized ga ins or losses

on the available-for-sale debt securities on a specific identification method basis.

Base d on the evaluation of credit risk factors, the Company has concluded that an allowance for credit losses is unnecessary for its short-term investments.

Comprehensive Income (Loss)

Comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources.

The Company’s short-term investments consist of certificates of deposits and Treasury bills that are classified as available-for-sale debt securities which are measured at fair value with unrealized gains or losses recorded in other comprehensive income (loss).

Recently Issued Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, “Income Taxes (Topic 740):

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, “Disaggregation of Income Statement Expenses, which requires public companies to disaggregate key expense categories such as inventory purchases, employee compensation and depreciation in their financial statements.

The guidance is effective for all public entities with fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027.

Early adoption is permitted.

The Company is currently evaluating the effects of this pronouncement on its financial statements and expects the update to result in additional disclosures.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures”, which requires greater disaggregation of income tax disclosures related to the income tax rate reconciliation and income taxes paid and effective for fiscal years beginning after December 15, 2024.

4 unchanged sentences

Improvements to Reportable Segment Disclosures,” which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

The guidance in this update is effective for all public entities for fiscal years beginning after December 15, 2023, with early adoption permitted.

The guidance in this update is effective for all public entities for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company is currently evaluating the effects of this pronouncement on its financial statements and expects the update to result in additional disclosures.

1 unchanged sentence

Accounts and Other Receivables

November 30, 2024

August 31, 2024

4 unchanged sentences

Property and Equipment - net

November 30, 2024

August 31, 2024

7 unchanged sentences

Total property and equipment – net

Depreciation and amortization expense for property and equipment was $ 3.2 million and $ 2.1 million for the three months ended May 31, 2024 and May 31, 2023 , respectively, and was $ 8.6 milli on and $ 5.6 million for the nine months ended May 31, 2024 and May 31, 2023 , respectively.

Depreciation and amortization expense for property and equipment was $ 3.2 million and $ 2.6 million for the three months ended November 30, 2024 and November 30, 2023, respectively.

Accrued Expenses and Other Current Liabilities

November 30, 2024

August 31, 2024

(amounts in thousands)

Credit card purchases

Income taxes payable

Finance leases - current

Other current liabilities

Total accrued expenses and other current liabilities

The Company has operating and finance leases for its corporate office, restaurant locations, office equipment, kitchen equipment and automobiles.

2 unchanged sentences

Lease related costs recognized in the statements of operations and comprehensive income (loss) are as follows:

Three Months Ended May 31,

Nine Months Ended May 31,

Three Months Ended November 30,

(amounts in thousands)

6 unchanged sentences

Total operating lease cost

Supplemental balance sheet information related to leases is as follows:

Operating Leases

August 31, 2023

(amounts in thousands)

Right-of-use assets

Lease liabilities – current

Lease liabilities – non-current

Total lease liabilities

Nine Months Ended May 31,

Weighted Average Remaining Lease Term (Years)

Operating leases

Weighted Average Discount Rate

Operating leases

Supplemental disclosures of cash flow information related to leases are as follows:

Nine Months Ended May 31,

Three Months Ended November 30,

(amounts in thousands)

1 unchanged sentence

Operating right-of-use assets obtained in exchange for new operating lease liabilities

As of May 31, 2024, the Company had an additional $ 44.7 million of operating leases related to restaurants for which the Company had not yet taken possession.

Subsequent to May 31, 2024, the Company entered into two additional operating leases related to restaurants for which the Company has not yet taken possession.

The lease liabilities associated with the leases after May 31, 2024 are $ 15.6 million .

The operating leases are expected to commence in fiscal year 2025, with lease terms of up to 30 years.

Maturities of lease liabilities, net of lease receivables, were as follows:

Operating Leases

(amounts in thousands)

Remainder of 2024

Total lease payments

imputed interest

Present value of lease liabilities

As of November 30, 2024, the Company had an additional $ 43.7 million of operating leases related to restaurants for which the Company had not yet taken possession.

Related Party Transactions

16 unchanged sentences

Balances with Kura Japan are as follows:

November 30, 2024

August 31, 2024

3 unchanged sentences

Reimbursements and other payments by the Company to Kura Japan were as follows:

Three Months Ended May 31,

Nine Months Ended May 31

Three Months Ended November 30,

(amounts in thousands)

5 unchanged sentences

Total related party transactions

Reimbursements by Kura Japan to the Company were $ 42 thousand and $ 7 thousand for the three months ended May 31, 2024 and May 31, 2023, respectively and were $ 264 thousand and $ 67 tho usand for the nine months ended May 31, 2024 and May 31, 2023, respectively.

Reimbursements by Kura Japan to the Company were $ 187 thousand and $ 157 thousand for the three months ended November 30, 2024 and November 30, 2023, respectively.

The reimbursements were primarily for directors and officers liability insurance, travel, professional fees and other administrative expenses.

9 unchanged sentences

Outstanding — November 30, 2024

Cancelled/forfeited

Outstanding — February 29, 2024

Cancelled/forfeited

Outstanding — May 31, 2024

The following table summarizes the restricted stock unit (“RSU”) activity under the Stock Incentive Plan:

5 unchanged sentences

Outstanding — November 30, 2024

Cancelled/forfeited

Outstanding — February 29, 2024

Cancelled/forfeited

Outstanding — May 31, 2024

The total stock-based compensation recognized under the Stock Incentive Plan in the statements of operations and comprehensive income (loss) is as follows:

Three Months Ended May 31,

Nine Months Ended May 31,

Three Months Ended November 30,

(amounts in thousands)

Restaurant-level stock-based compensation included in other costs

Restaurant-level stock-based compensation included in labor and related costs

Corporate-level stock-based compensation included in general and administrative expenses

6 unchanged sentences

There are no financial covenants under the Revolving Credit Agreement with which the Company must comply.

As of May 31, 2024 and August 31, 2023, the Company had no o utstanding balance and $ 45.0 million of availability remaining under the Revolving Credit Agreement.

As of November 30, 2024 and August 31, 2024, the Company had no o utstanding balance and $ 45.0 million of availability remaining under the Revolving Credit Agreement.

For additional information, see “Note 4.

Related Party Transactions.”

(Loss) Income Per Share

The net income (loss) per share attributable to common stockholders is allocated based on the contractual participation rights of the Class A common stock and Class B common stock as if the income for the year had been distributed.

Loss Per Share

The net loss per share attributable to common stockholders is allocated based on the contractual participation rights of the Class A common stock and Class B common stock as if the loss for the year had been distributed.

As the liquidation and dividend rights for Class A and Class B common stock are identical, the net loss attributable to all common stockholders is allocated on a proportionate basis.

The following table sets forth the computation of the Company’s basic and diluted net income (loss) per share:

Three Months Ended May 31,

Nine Months Ended May 31,

The following table sets forth the computation of the Company’s basic and diluted net loss per share:

Three Months Ended November 30,

(amounts in thousands, except per share data)

Net income (loss) attributable to common stockholders

Net income (loss) attributable to common stockholders – diluted

Net loss attributable to common stockholders

Weighted average common shares outstanding – basic

1 unchanged sentence

Weighted average common shares outstanding – diluted

Net income (loss) per share attributable to common stockholders – basic

Net income (loss) per share attributable to common stockholders – diluted

The Company computes basic income (loss) per common share using net income (loss) and the weighted average number of common shares outstanding during the period, and computes diluted income (loss) per common share using net income (loss) and the weighted average number of common shares and potentially dilutive common shares outstanding during the period.

Net loss per share attributable to common stockholders – basic

Net loss per share attributable to common stockholders – diluted

The Company computes basic loss per common share using net loss and the weighted average number of common shares outstanding during the period, and computes diluted loss per common share using net loss and the weighted average number of common shares and potentially dilutive common shares outstanding during the period.

Potentially dilutive common shares include dilutive outstanding employee stock options and restricted stock units.

For the three and nine months ended May 31, 2024, there were 662 thousand shares of common stock subject to outstanding employee stock options and RSUs that were excluded from the calculation of diluted loss per share because their inclusion would have been anti-dilutive.

For the three months ended May 31, 2023 , there were 201 thousand shares of common stock subject to outstanding employee stock options and RSUs that were excluded from the calculation of diluted income per share because their inclusion would have been anti-dilutive.

For the nine months ended May 31, 2023, there were 729 thousand shares of common stock subject to outstanding employee stock options and RSUs that were excluded from the calculation of diluted loss per share because their inclusion would have been anti-dilutive.

For the three months ended November 30, 2024 and November 30, 2023, there were 631 thousand and 688 thousand , respectively, shares of common stock subject to outstanding employee stock options and RSUs that were excluded from the calculation of diluted loss per share because their inclusion would have been anti-dilutive .

Commitments and Contingencies

2 unchanged sentences

Both sets of claimants allege violations of the Fair Labor Standards Act (“FLSA”) and violations of certain Washington, D.C.

Each arbitration will proceed separately.

T he Company recorded an accrued liability of $ 0.6 million r elated to these matters within general and administrative expenses in the statements of operations during the three months ended May 31, 2024, as the liability associated with these matters became probable and reasonably estimable based on information available to the Company.

As the Company receives new information, it will reevaluate its estimated liability, which may exceed the amount accrued and could adversely affect the Company’s financial position, results of operations or cash flows.

Th e Company is involved from time to time in various legal proceedings that arise in the ordinary course of business, including but not limited to commercial disputes, environmental matters, employee related claims, intellectual property disputes and litigation in connection with transactions, including acquisitions and divestitures.

In both arbitrations, claimants purported to raise collective claims on behalf of other similarly situated employees and former employees.

In August 2024, the Company settled the claims with these five former employees, as well as 58 other current and former employees asserting similar claims (some under the laws of Pennsylvania, Virginia and Massachusetts), for approximately $ 3.9 million.

Since that time, other current and former employees have asserted claims under the FLSA and applicable state laws (including Pennsylvania, New Jersey and Massachusetts) through counsel.

In October 2024, the Company agreed to settle those claims for approximately $ 1.2 million.

The Company expensed $ 5.1 million related to these matters within general and administrative expenses in the statements of operations and comprehensive income (loss) and paid $ 3.9 million during the fiscal year ended August 31, 2024.

The Company paid the remaining accrued liability of $ 1.2 m illion related to these matters in October 2024.

The Company is involved from time to time in various legal proceedings that arise in the ordinary course of business, including but not limited to commercial disputes, environmental matters, employee related claims, intellectual property disputes and litigation in connection with transactions, including acquisitions and divestitures.

In the opinion of management, the Company does not believe that such litigation, claims, and administrative proceedings will have a material adverse effect on its business, financial position, results of operations or cash flows.

1 unchanged sentence

The Company records a liability when a loss is considered probable, and the amount can be reasonably estimated.

The Company recorded an income tax expense of $ 60 thousand and $ 41 thousand for the three months ended May 31, 2024 and May 31, 2023, respectively and income tax expense of $ 148 thousand and $ 66 thousand for the nine months ended May 31, 2024 and May 31, 2023, respectively.

The Company’s effective tax rates for the three and nine months ended May 31, 2024 substantially differed from the federal statutory tax rate of 21 % primarily due to a valuation allowance for the Company’s deferred tax assets and permanent difference related to employer tip credit.

The Company recorded an income tax expense of $ 39 thousand and $ 38 thousand for the three months ended November 30, 2024 and November 30, 2023, respectively.

The Company’s effective tax rates for the three months ended November 30, 2024 substantially differed from the federal statutory tax rate of 21 % primarily due to a valuation allowance for the Company’s deferred tax assets and permanent difference related to employer tip credit.

The Company continually monitors and performs an assessment of the realizability of its deferred tax assets, including an analysis of factors such as future taxable income, reversal of existing taxable temporary differences, and tax planning strategies.

1 unchanged sentence

In making such assessment, more weight was given to evidence that could be objectively verified, including recent cumulative losses.

Based on the Company’s review of this evidence, management determined that a full valuation allowance against all of the Company’s net deferred tax assets at May 31, 2024 was appropriate.

Fair Value Measurements

The following table sets forth the Company’s assets measured at fair value on a recurring basis as of May 31, 2024.

(amounts in thousands)

Certificates of deposits

Treasury bills

Total assets at fair value

The Company’s cash and cash equivalents include cash on hand, deposits in banks, certificates of deposits and money market funds.

Due to their short-term nature, the carrying amounts reported in the accompanying balance sheets approximate the fair value of cash and cash equivalents.

The fair value of our certificates of deposits are considered using Level 2 inputs of the fair value hierarchy.

Level 2 inputs are based on market data that include factors such as interest rates, market and pricing activity and other market-based valuation techniques.

The Company determines realized gains or losses on the available-for-sale debt securities on a specific identification method basis.

Based on the Company’s review of this evidence, management determined that a full valuation allowance against all of the Company’s net deferred tax assets at November 30, 2024 was appropriate.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements