What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-04-08 compared with 2025-01-07 · 117 added, 53 removed, 273 unchanged (38% of the section changed)

3 unchanged sentences

(amounts in thousands, except par value)

November 30, 2024

February 28, 2025

August 31, 2024

8 unchanged sentences

Operating lease right-of-use assets

Long-term investments

Deposits and other assets

19 unchanged sentences

50,000 shares authorized,

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

11,085 and 10,253 shares issued and outstanding as of February 28, 2025

and August 31, 2024, respectively

1 unchanged sentence

10,000 shares authorized,

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

1,000 shares issued and outstanding as of February 28, 2025

and August 31, 2024

7 unchanged sentences

(amounts in thousands, except per share data)

Three Months Ended November 30,

Three Months Ended

Six Months Ended

February 28, 2025

February 29, 2024

February 28, 2025

February 29, 2024

Restaurant operating costs:

15 unchanged sentences

Weighted average Class A and Class B shares outstanding

Other comprehensive income (loss):

Other comprehensive income:

Unrealized gain on short-term investments

4 unchanged sentences

(amounts in thousands)

Additional Paid-in

Total Stockholders'

Stockholders'

Balances as of August 31, 2024

3 unchanged sentences

Balances as of November 30, 2024

Additional Paid-in

Stock-based compensation

Employee stock plan

Balances as of February 28, 2025

Comprehensive

Total Stockholders'

Stockholders'

Balances as of August 31, 2023

3 unchanged sentences

Balances as of November 30, 2023

Stock-based compensation

Employee stock plan

Other comprehensive income

Balances as of February 29, 2024

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

2 unchanged sentences

(amounts in thousands)

Three Months Ended November 30,

Six Months Ended

February 28, 2025

February 29, 2024

Cash flows from operating activities

2 unchanged sentences

Stock-based compensation, net of amounts capitalized

Non-cash lease expense

Bond premium amortization

Changes in operating assets and liabilities:

6 unchanged sentences

Salaries and wages payable

Operating lease liabilities

Operating lease liabilities and assets

Due to affiliate

4 unchanged sentences

Payments for initial direct costs

Payments for purchases of liquor licenses

Purchases of short-term investments

Redemption of short-term investments

Purchases of liquor licenses

Purchases of investments

Maturities and redemptions of investments

Net cash used in investing activities

1 unchanged sentence

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

Increase in cash and cash equivalents

Increase/ (decrease) 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

33 unchanged sentences

Actual results could differ materially from those estimates and assumptions.

Long-Term Investments

Long-term investments consist of long-term U.S.

Government Agency debt securities.

The Company considers all investments with an original maturity date greater than one year as long-term investments.

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

As of February 28, 2025 and August 31, 2024, long-term investments were $ 15.1 million and no ne, respectively.

The Company classifies the long-term U.S.

Government Agency debt securities as held-to-maturit y.

As of February 28, 2025, the Company’s holds a portfolio of held to maturity debt securities with an amortized cost basis of $ 15.1 million , a fair value of $ 15.0 million and gross unrealized holding losses of $ 0.1 million.

Based on the evaluation of credit risk factors guaranteed by the U.S.

government, the Company has concluded that an allowance for credit losses is unnecessary for its long-term investments.

Recently Issued Accounting Pronouncements

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.

In January 2025, the FASB issued ASU 2025-01 “Income Statement-Reporting Comprehensive Income- Expense Disaggregation Disclosures- Clarifying the Effective Date”, which amends the effective date of ASU 2024-03 to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027.

Early adoption is permitted.

The Company expects to adopt the guidance in our annual report on Form 10-K for the fiscal year ending August 31, 2028.

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

3 unchanged sentences

The amendments should be applied on a prospective basis although retrospective application is permitted.

The Company expects to adopt the guidance in our annual report on Form 10-K for the fiscal year ending August 31, 2026.

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

2 unchanged sentences

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 expects to adopt the guidance in our annual report on Form 10-K for the fiscal year ending August 31, 2025.

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

February 28, 2025

August 31, 2024

4 unchanged sentences

Property and Equipment - net

November 30, 2024

February 28, 2025

August 31, 2024

7 unchanged sentences

Total property and equipment – net

Depreciation and amortization expense for property and equipment was $ 3.2 million and $ 2.6 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.

The Company’s finance leases are immaterial.

Depreciation and amortization expense for property and equipment was $ 3.4 million and $ 2.8 million for the three months ended February 28, 2025 and February 29, 2024 , respectively, and was $ 6.6 milli on and $ 5.4 million for the six months ended February 28, 2025 and February 29, 2024 , respectively.

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

The Company’s finance leases are not material.

The Company’s leases have remaining lease terms of less than 1 year to 30 years, some of which include options to extend the leases.

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

Three Months Ended November 30,

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

Three Months Ended

Six Months Ended

February 28, 2025

February 29, 2024

February 28, 2025

February 29, 2024

(amounts in thousands)

7 unchanged sentences

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

Three Months Ended November 30,

Six Months Ended

February 28, 2025

February 29, 2024

(amounts in thousands)

1 unchanged sentence

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

As of February 28, 2025, the Company had an additional $ 25.0 million of operating lease liabilities related to restaurants for which the Company had not yet taken possession.

Subsequent to February 28, 2025, the Company entered into additional operating leases related to restaurants for which the Company has not yet taken possession.

The lease liabilities associated with these leases are $ 22.6 million and expected to commence in fiscal year 2025 and 2026 with lease terms of up to 20 years.

Related Party Transactions

6 unchanged sentences

however, from time to time, either party will net settle transactions as needed.

Purchases of administrative supplies, expatriate salaries and travel and other administrative expenses payable to Kura Japan are included in general and administrative expenses in the accompanying statements of operations and comprehensive income (loss).

Purchases of equipment from Kura Japan are included in property and equipment in the accompanying balance sheets.

3 unchanged sentences

Fresh protective dome, among other intellectual property rights necessary to continue operation of the Company’s restaurants.

Royalty payments to Kura Japan are included in other costs at the restaurant level in the accompanying statements of operations and comprehensive income (loss).

On April 10, 2020, the Company and Kura Japan entered into a Revolving Credit Agreement, as amended, to provide the Company a revolving credit line of $ 45.0 million (the “Revolving Credit Agreement”).

Royalty payments to Kura Japan are included in other costs at the restaurant level in the accompanying condensed statements of operations and comprehensive income loss.

On April 10, 2020, the Company and Kura Japan entered into a Revolving Credit Agreement, as amended, to provide the Company a revolving credit line of $ 45.0 million (as amended, the “Revolving Credit Agreement”).

For additional information, see “Note 6.

Balances with Kura Japan are as follows:

November 30, 2024

February 28, 2025

August 31, 2024

3 unchanged sentences

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

Three Months Ended November 30,

Three Months Ended

Six Months Ended

February 28, 2025

February 29, 2024

February 28, 2025

February 29, 2024

(amounts in thousands)

5 unchanged sentences

Total related party transactions

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.

Reimbursements by Kura Japan to the Company were $ 43 thousand and $ 65 thousand for the three months ended February 28, 2025 and February 29, 2024, respectively and were $ 230 thousand and $ 222 thousand for the six months ended February 28, 2025 and February 29, 2024, respectively.

The reimbursements were primarily for travel, professional fees and other administrative expenses.

Stock-based Compensation

8 unchanged sentences

Outstanding — November 30, 2024

Cancelled/forfeited

Outstanding — February 28, 2025

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

5 unchanged sentences

Outstanding — November 30, 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 November 30,

Cancelled/forfeited

Outstanding — February 28, 2025

During the three months ended February 28, 2025 , the Company granted 8,724 performance restricted stock units (“PSUs”) with a three-year performance vesting period and a weighted average grant date fair value of $ 80.00 .

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

Three Months Ended

Six Months Ended

February 28, 2025

February 29, 2024

February 28, 2025

February 29, 2024

(amounts in thousands)

6 unchanged sentences

The maturity date for each advance is 60 months from the date of disbursement and the last day of the period of availability for advances is April 10, 2025.

The Revolving Credit Note under the Revolving Credit Agreement has an interest rate for advances fixed at 130 % of the Annual Compounding Long-Term Applicable Federal Rate (“AFR”) on the date such advance is made.

The Revolving Credit Note under the Revolving Credit Agreement has an interest rate for advances (made on or after April 10, 2021) fixed at 130 % of the Annual Compounding Long-Term Applicable Federal Rate (“AFR”) on the date such advance is made.

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

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.

As of February 28, 2025 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.”

On April 4, 2025, the Company and Kura Japan entered into a Third Amendment to Revolving Credit Agreement (the “Third Amendment”) to extend the last day of the period of availability for the advances under the credit line from April 10, 2025 to April 10, 2028.

In connection with the Third Amendment, the Revolving Credit Note under the Revolving Credit Agreement was also amended by incorporating the same amendments as provided under the Third Amendment.

Loss Per Share

2 unchanged sentences

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

Three Months Ended November 30,

Three Months Ended

Six Months Ended

February 28, 2025

February 29, 2024

February 28, 2025

February 29, 2024

(amounts in thousands, except per share data)

7 unchanged sentences

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

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 .

For the three and six months ended February 28, 2025, there were 679 thousand shares of common stock subject to outstanding employee stock options, RSUs and PSUs that were excluded from the calculation of diluted loss per share because their inclusion would have been anti-dilutive.

For the three and six months ended February 29, 2024 , there were 678 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.

Commitments and Contingencies

6 unchanged sentences

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 expens ed $ 5.1 million rela ted to these matters within general and administrative expenses in the condensed statements of operations and comprehensive loss and paid $ 3.9 million during the fiscal year ended August 31, 2024.

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

In February 2025, the Company agreed to settle additional claims for approximately $ 2.1 million, which was paid in March 2025.

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.

2 unchanged sentences

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 $ 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 recorded an income tax expense of $ 38 thousand and $ 50 thousand for the three months ended February 28, 2025 and February 29, 2024, respectively and income tax expense of $ 77 thousand and $ 88 thousand for the six months ended February 28, 2025 and February 29, 2024, respectively.

The Company’s effective tax rates for the three and six months ended February 28, 2025 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 November 30, 2024 was appropriate.

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 February 28, 2025 was appropriate.

Fair Value Measurements

The following table sets forth the Company’s assets measured at fair value on a recurring basis as of February 28, 2025.

(amounts in thousands)

Government Agency debt securities

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 U.S.

Government Agency debt securities 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.

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