What changed in this filing

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Item 1. Financial Statements

2025-07-08 compared with 2025-04-08 · 93 added, 95 removed, 295 unchanged (39% of the section changed)

2 unchanged sentences

Condensed Balance Sheets

(amounts in thousands, except par value)

February 28, 2025

(amounts in thousands, except for par value)

August 31, 2024

1 unchanged sentence

Cash and cash equivalents

Short-term investments

Accounts and other receivables

27 unchanged sentences

50,000 shares authorized,

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

11,088 and 10,253 shares issued and outstanding as of May 31, 2025

and August 31, 2024, respectively

1 unchanged sentence

10,000 shares authorized,

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

1,000 shares issued and outstanding as of May 31, 2025

and August 31, 2024

1 unchanged sentence

Accumulated deficit

Accumulated other comprehensive loss

Total stockholders' equity

2 unchanged sentences

Kura Sushi USA, Inc.

Condensed Statements of Operations and Comprehensive Loss

(amounts in thousands, except per share data)

Three Months Ended

Six Months Ended

February 28, 2025

February 29, 2024

February 28, 2025

February 29, 2024

Condensed Statements of Operations and Comprehensive Income (Loss)

(amounts in thousands, except for per share data)

Three Months Ended May 31,

Nine Months Ended May 31,

Restaurant operating costs:

11 unchanged sentences

Interest income

Loss before income taxes

Income (loss) before income taxes

Income tax expense

Net loss per Class A and Class B shares

Net income (loss)

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

Weighted average Class A and Class B shares outstanding

Other comprehensive income:

Unrealized gain on short-term investments

Comprehensive loss

Other comprehensive income (loss):

Unrealized loss on short-term investments

Comprehensive income (loss)

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

2 unchanged sentences

(amounts in thousands)

Comprehensive

Stockholders'

7 unchanged sentences

Balances as of February 28, 2025

Stock-based compensation

Employee stock plan

Other comprehensive loss

Balances as of May 31, 2025

Comprehensive

Stockholders'

Income/(Loss)

Balances as of August 31, 2023

7 unchanged sentences

Balances as of February 29, 2024

Stock-based compensation

Employee stock plan

Other comprehensive loss

Balances as of May 31, 2024

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

2 unchanged sentences

(amounts in thousands)

Six Months Ended

February 28, 2025

February 29, 2024

Nine Months Ended May 31,

Cash flows from operating activities

29 unchanged sentences

Net cash provided by financing activities

Increase/ (decrease) in cash and cash equivalents

Decrease in cash and cash equivalents

Cash and cash equivalents, beginning of period

19 unchanged sentences

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.

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

Basis of Presentation

15 unchanged sentences

Actual results could differ materially from those estimates and assumptions.

Long-Term Investments

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

The Company invests in a range of securities, including certificates of deposit, Treasury bills, and 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.

Investment classification is determined based on the accounting guidance as available for sale or held to maturity.

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

Government Agency debt securities are classified as held-to-maturity and measured at amortized cost.

The classification of these investments as either short-term or long-term is based on their original maturity dates, with short-term investments having maturities greater than three months but less than one year, and long-term investments having maturities greater than one year.

As of May 31, 2025 and August 31, 2024, short-term investments were $ 13.4 million and no ne, respectively, of which $ 0.5 million consists of cash that is restricted to funding a collateral account relating to a standby letter of credit.

Realized gains or losses are determined on a specific identification basis.

As of May 31, 2025 and August 31, 2024, long-term investments were $ 32.5 million and no ne, respectively.

As of May 31, 2025, the Company’s holds a portfolio of held to maturity debt securities with an amortized cost basis of $ 32.5 million , a fair value of $ 32.4 million and gross unrealized holding gains 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.

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

Recently Issued Accounting Pronouncements

2 unchanged sentences

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 expects to adopt the guidance in its 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 expects to adopt the guidance in its 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 expects to adopt the guidance in its 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

February 28, 2025

August 31, 2024

4 unchanged sentences

Property and Equipment - net

February 28, 2025

August 31, 2024

7 unchanged sentences

Total property and equipment – net

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.

Depreciation and amortization expense for property and equipment was $ 3.6 million and $ 3.2 million for the three months ended May 31, 2025 and May 31, 2024 , respectively, and was $ 10.2 milli on and $ 8.6 million for the nine months ended May 31, 2025 and May 31, 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 finance leases are not considered 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 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

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

Three Months Ended May 31,

Nine Months Ended May 31,

(amounts in thousands)

7 unchanged sentences

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

Six Months Ended

February 28, 2025

February 29, 2024

Nine Months Ended May 31,

(amounts in thousands)

1 unchanged sentence

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

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.

As of May 31, 2025, the Company had an additional $ 44.4 million of operating lease liabilities related to restaurants for which the Company had not yet taken possession.

Subsequent to May 31, 2025, the Company entered into one additional operating lease related to a restaurant for which the Company has not yet taken possession.

The lease liabilities associated with the lease are $ 5.8 million and are expected to commence in fiscal year 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 loss.

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

7 unchanged sentences

Balances with Kura Japan are as follows:

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

Six Months Ended

February 28, 2025

February 29, 2024

February 28, 2025

February 29, 2024

Three Months Ended May 31,

Nine Months Ended May 31

(amounts in thousands)

5 unchanged sentences

Total related party transactions

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.

Reimbursements by Kura Japan to the Company were $ 60 thousand and $ 42 thousand for the three months ended May 31, 2025 and May 31, 2024, respectively and were $ 290 thousand and $ 264 tho usand for the nine months ended May 31, 2025 and May 31, 2024, respectively.

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

Stock-based Compensation

10 unchanged sentences

Outstanding — February 28, 2025

Cancelled/forfeited

Outstanding — May 31, 2025

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

7 unchanged sentences

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

Cancelled/forfeited

Outstanding — May 31, 2025

In the second quarter of fiscal 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 income (loss) is as follows:

Three Months Ended May 31,

Nine Months Ended May 31,

(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 (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 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

As of May 31, 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.”

Income (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 loss per share:

Three Months Ended

Six Months Ended

February 28, 2025

February 29, 2024

February 28, 2025

February 29, 2024

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,

(amounts in thousands, except per share data)

Net loss attributable to common stockholders

Net income (loss) attributable to common stockholders

Weighted average common shares outstanding – basic

1 unchanged sentence

Weighted average common shares outstanding – diluted

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 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.

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.

Potentially dilutive common shares include dilutive outstanding employee stock options, RSUs and PSUs.

For the three months ended May 31, 2025, there were 286 thousand shares of common stock subject to outstanding employee stock options, RSUs and PSUs 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, 2025, there were 677 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 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.

Commitments and Contingencies

6 unchanged sentences

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

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 expensed $ 5.1 million related to these matters within general and administrative expenses in the condensed 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 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.

On December 9, 2024, a former employee filed a putative class action complaint in the Superior Court of California in Los Angeles, individually and on behalf of others similarly situated, against the Company alleging certain violations of California labor laws.

The complaint alleges various wage and hour violations under the California Labor Code and related statutes.

Plaintiff has also served a Private Attorneys General Act (“PAGA”) notice for the same alleged wage and hour violations.

The Company will continue to vigorously defend its position in this matter.

The Company is currently unable to estimate the range of possible losses associated with this proceeding.

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 $ 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 recorded an income tax expense of $ 55 thousand and $ 60 thousand for the three months ended May 31, 2025 and May 31, 2024, respectively and income tax expense of $ 132 thousand and $ 148 thousand for the nine months ended May 31, 2025 and May 31, 2024, respectively.

The Company’s effective tax rates for the three and nine months ended May 31, 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 differences related to the tax credit for a portion of the Social Security and Medicare taxes (FICA taxes) paid on employer tips.

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 February 28, 2025 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 May 31, 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.

The following table sets forth the Company’s assets measured at fair value on a recurring basis as of May 31, 2025.

(amounts in thousands)

Certificate of Deposit

Treasury bills

Government Agency debt securities

2 unchanged sentences

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.

The fair value of our Certificate of Deposit and U.S.

Government Agency debt securities are valued 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