What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-01-07 compared with 2025-07-08 · 61 added, 126 removed, 211 unchanged (47% of the section changed)

8 unchanged sentences

Business Trends

During the nine months ended May 31, 2025, we opened thirteen restaurants and expanded our restaurant base to 76 restaurants in twenty states and Washington, DC.

Subsequent to May 31, 2025, we opened two additional restaurant totaling 78 restaurants in 21 states and Washington, DC.

During the three months ended November 30, 2025, we opened four restaurants and expanded our restaurant base to 83 restaurants in 22 states and Washington, DC.

We expect to open a total of 16 new restaurants in fiscal year 2026 and therefore, we expect our revenue and restaurant operating costs to increase in fiscal year 2026.

1 unchanged sentence

We have evaluated and will continue to evaluate the impact of import laws and tariffs on our operations.

As of May 31, 2025, there was no material impact on our business, financial condition, results of operations or cash flows.

However, tariffs could impact our operations in certain areas, such as food and beverage costs, construction and equipment costs and other restaurant operating costs, for the remainder of fiscal 2025.

During the three months ended November 30, 2025, tariffs had a considerable impact on our business, financial condition, results of operations and cash flows.

Based on the current economic environment, tariffs are expected to continue to have a considerable impact on our operations in certain areas, such as food and beverage costs, construction and equipment costs and other restaurant operating costs throughout fiscal year 2026.

We have historically used menu price increases to manage profitability in times of inflation or tariff increases.

During the three months ended November 30, 2025, we increased menu prices, which we expect will partially offset the impact on our operations in fiscal year 2026.

See our Annual Report on Form 10-K “Part I, Item 1A, “Risk Factors — Risks Related to Our Operations and Growth Strategy”.

Key Financial Definitions

25 unchanged sentences

Results of Operations

The following tables present selected comparative results of operations for the three and nine months ended May 31, 2025 and May 31, 2024.

The following tables present selected comparative results of operations for the three months ended November 30, 2025 and 2024.

Our financial results for these periods are not necessarily indicative of the financial results that we will achieve in future periods.

Certain totals for the tables below may not recalculate or sum up to 100% due to rounding.

Three Months Ended May 31,

(dollar amounts in thousands)

Restaurant operating costs

Food and beverage costs

Labor and related costs

Occupancy and related expenses

Depreciation and amortization expenses

Total restaurant operating costs

General and administrative expenses

Depreciation and amortization expenses

Total operating expenses

Operating loss

Other expense (income):

Interest expense

Interest income

Income (loss) before income taxes

Income tax expense

Net income (loss)

Nine Months Ended May 31,

Three months ended November 30,

(dollar amounts in thousands)

14 unchanged sentences

Income tax expense

Three Months Ended May 31,

Nine Months Ended May 31,

Three months ended November 30,

(as a percentage of sales)

12 unchanged sentences

Interest income

Income (loss) before income taxes

Income tax expense

Net income (loss)

Three Months Ended May 31, 2025 Compared to Three Months Ended May 31, 2024

Sales were $74.0 million for the three months ended May 31, 2025 compared to $63.1 million for the three months ended May 31, 2024, representing an increase of $10.9 million, or 17.3%.

The increase in sales was primarily driven by the sales resulting from thirteen new restaurants that opened subsequent to May 31, 2024, as well as increases in menu prices during the same period.

Comparable restaurant sales decreased 2.1%, consisting of negative traffic of 2.9% and a price/mix of 0.8% for the three months ended May 31, 2025, as compared to the three months ended May 31, 2024.

Food and beverage costs.

Food and beverage costs were $20.9 million for the three months ended May 31, 2025 compared to $18.4 million for the three months ended May 31, 2024, representing an increase of $2.5 million, or 13.8%.

The increase in food and beverage costs was primarily driven by costs associated with sales from thirteen new restaurants that opened subsequent to May 31, 2024.

As a percentage of sales, food and beverage costs decreased to 28.3% in the three months ended May 31, 2025 as compared to 29.2% in the three months ended May 31, 2024, primarily due to increases in menu prices and supply chain initiatives, which was partially offset by food cost inflation.

Labor and related costs.

Labor and related costs were $24.5 million for the three months ended May 31, 2025 compared to $20.5 million for the three months ended May 31, 2024, representing an increase of $4.0 million, or 19.2%.

This increase in labor and related costs was primarily driven by additional labor costs incurred from thirteen new restaurants that opened subsequent to May 31, 2024.

As a percentage of sales, labor and related costs increased to 33.1% in the three months ended May 31, 2025 as compared to 32.6% in the three months ended May 31, 2024.

The increase in cost as a percentage of sales was primarily due to increases in wage rates subsequent to May 31, 2024, partially offset by increases in menu prices and operational efficiencies.

Occupancy and related expenses.

Occupancy and related expenses were $5.5 million for the three months ended May 31, 2025 compared to $4.3 million for the three months ended May 31, 2024, representing an increase of $1.2 million, or 28.3%.

The increase was primarily a result of additional lease expense related to the opening of thirteen new restaurants that opened subsequent to May 31, 2024.

As a percentage of sales, occupancy and related expenses increased to 7.5% in the three months ended May 31, 2025 as compared to 6.8% in the three months ended May 31, 2024, primarily driven by sales deleverage.

Depreciation and amortization expenses.

Depreciation and amortization expenses incurred as part of restaurant operating costs were $3.5 million for the three months ended May 31, 2025 compared to $3.1 million for the three months ended May 31, 2024, representing an increase of $0.4 million, or 10.4%.

The increase consists of depreciation of property and equipment related to the thirteen new restaurants that opened subsequent to May 31, 2024.

As a percentage of sales, depreciation and amortization expenses at the restaurant level was 4.7% for the three months ended May 31, 2025 as compared to 5.0% in the three months ended May 31, 2024.

Depreciation and amortization expenses incurred at the corporate level were $0.1 million for both the three months ended May 31, 2025 and May 31, 2024, and as a percentage of sales were 0.1% and 0.2%, respectively.

Other costs were $10.9 million for the three months ended May 31, 2025 compared to $8.9 million for the three months ended May 31, 2024, representing an increase of $2.0 million, or 22.0%.

The increase was primarily driven by an increase in costs related to the thirteen new restaurants that opened subsequent to May 31, 2024.

As a percentage of sales, other costs increased to 14.7% in the three months ended May 31, 2025 as compared to 14.1% in the three months ended May 31, 2024, primarily driven by utilities and repairs and maintenance, partially offset by lower marketing expenses.

General and administrative expenses.

General and administrative expenses were $8.7 million for the three months ended May 31, 2025 compared to $8.9 million for the three months ended May 31, 2024, representing a decrease of $0.2 million, or 1.3%.

This decrease was primarily due to a decrease in prior year litigation expense of $0.7 million and lower professional fees of $0.2 million, partially offset by an increase in compensation-related expenses of $0.7 million.

As a percentage of sales, general and administrative expenses decreased to 11.8% in the three months ended May 31, 2025 as compared to 14.0% in the three months ended May 31, 2024, primarily due to sales leverage and a decrease in professional fees and litigation expenses.

Interest expense.

Interest expense was $30 thousand for the three months ended May 31, 2025 compared to $15 thousand for the three months ended May 31, 2024.

Interest income.

Interest income was $812 thousand for the three months ended May 31, 2025 compared to $686 thousand for the three months ended May 31, 2024.

The increase was primarily driven by investing incremental cash from our follow-on offering completed in November 2024 into money market funds and investments, partially offset by lower interest rates.

Loss before income taxes

Income tax expense

Income tax expense was $55 thousand for the three months ended May 31, 2025 compared to an income tax expense of $60 thousand for the three months ended May 31, 2024.

For further discussion of our income taxes, see “Note 9.

Income Taxes” in the Notes to Condensed Financial Statements.

Nine Months Ended May 31, 2025 Compared to Nine Months Ended May 31, 2024

Sales were $203.3 million for the nine months ended May 31, 2025 compared to $171.8 million for the nine months ended May 31, 2024, representing an increase of $31.5 million, or 18.3%.

The increase in sales was primarily driven by the sales resulting from thirteen new restaurants that opened subsequent to May 31, 2024, as well as increases in menu prices during the same period.

Comparable restaurant sales decreased 1.7%, consisting of negative traffic of 4.2% and a price/mix of 2.5% for the nine months ended May 31, 2025, as compared to the nine months ended May 31, 2024, primarily due to a reduction in traffic.

Three Months Ended November 30, 2025 Compared to Three Months Ended November 30, 2024

Sales were $73.5 million for the three months ended November 30, 2025 compared to $64.5 million for the three months ended November 30, 2024, representing an increase of $9.0 million, or 14.0%.

The increase in sales was primarily driven by the sales resulting from thirteen new restaurants that opened subsequent to November 30, 2024, as well as increases in menu prices during the same period.

Comparable restaurant sales decreased 2.5%, consisting of negative traffic of 2.5% and flat price/mix, for the three months ended November 30, 2025, as compared to the three months ended November 30, 2024.

The decrease in traffic is a result of lower consumer spending due to the macroeconomic environment.

Food and beverage costs.

Food and beverage costs were $58.2 million for the nine months ended May 31, 2025 compared to $50.7 million for the nine months ended May 31, 2024, representing an increase of $7.5 million, or 14.9%.

The increase in food and beverage costs was primarily driven by costs associated with sales from thirteen new restaurants that opened subsequent to May 31, 2024.

As a percentage of sales, food and beverage costs decreased to 28.6% in the nine months ended May 31, 2025 as compared to 29.5% in the nine months ended May 31, 2024, primarily due to increases in menu prices and supply chain initiatives, which was partially offset by food cost inflation.

Food and beverage costs were $21.9 million for the three months ended November 30, 2025 compared to $18.7 million for the three months ended November 30, 2024, representing an increase of $3.2 million, or 17.5%.

The increase in food and beverage costs was primarily driven by costs associated with sales from thirteen new restaurants that opened subsequent to November 30, 2024.

As a percentage of sales, food and beverage costs increased to 29.9% in the three months ended November 30, 2025 as compared to 29.0% in the three months ended November 30, 2024, primarily due to tariffs on imported ingredients, which was partially offset by increases in menu prices.

Labor and related costs.

Labor and related costs were $68.3 million for the nine months ended May 31, 2025 compared to $55.9 million for the nine months ended May 31, 2024, representing an increase of $12.4 million, or 22.2%.

This increase in labor and related costs was primarily driven by additional labor costs incurred from thirteen new restaurants that opened subsequent to May 31, 2024.

As a percentage of sales, labor and related costs increased to 33.6% in the nine months ended May 31, 2025 as compared to 32.5% in the nine months ended May 31, 2024.

The increase in cost as a percentage of sales was primarily due to increases in wage rates subsequent to May 31, 2024, partially offset by increases in menu prices and operational efficiencies.

Labor and related costs were $23.9 million for the three months ended November 30, 2025 compared to $21.2 million for the three months ended November 30, 2024, representing an increase of $2.7 million, or 12.5%.

This increase in labor and related costs was primarily driven by additional labor costs incurred from thirteen new restaurants that opened subsequent to November 30, 2024.

As a percentage of sales, labor and related costs decreased to 32.5% in the three months ended November 30, 2025 as compared to 32.9% in the three months ended November 30, 2024, primarily due to increases in menu prices and initiatives relating to operations, partially offset by sales deleverage as a result of a decrease in comparable restaurant sales and labor inflation.

Occupancy and related expenses.

Occupancy and related expenses were $15.4 million for the nine months ended May 31, 2025 compared to $12.2 million for the nine months ended May 31, 2024, representing an increase of $3.2 million, or 26.4%.

The increase was primarily a result of additional lease expense related to the opening of thirteen new restaurants that opened subsequent to May 31, 2024.

As a percentage of sales, occupancy and related expenses increased to 7.6% in the nine months ended May 31, 2025, compared to 7.1% in the nine months ended May 31, 2024, primarily driven by sales deleverage.

Occupancy and related expenses were $5.8 million for the three months ended November 30, 2025 compared to $4.8 million for the three months ended November 30, 2024, representing an increase of $1.0 million, or 22.8%.

The increase was primarily a result of additional lease expense related to the opening of thirteen new restaurants that opened subsequent to November 30, 2024.

As a percentage of sales, occupancy and related expenses increased to 7.9% in the three months ended November 30, 2025 as compared to 7.4% in the three months ended November 30, 2024, primarily driven by sales deleverage as a result of a decrease in comparable restaurant sales.

Depreciation and amortization expenses.

Depreciation and amortization expenses incurred as part of restaurant operating costs were $9.8 million for the nine months ended May 31, 2025 compared to $8.3 million for the nine months ended May 31, 2024, representing an increase of $1.5 million, or 18.5%.

The increase consists of depreciation of property and equipment related to thirteen new restaurants that opened subsequent to May 31, 2024.

As a percentage of sales, depreciation and amortization expenses at the restaurant level were 4.8% for both the nine months ended May 31, 2025 and May 31, 2024.

Depreciation and amortization expenses incurred at the corporate level were $0.3 million for both the nine months ended May 31, 2025 and May 31, 2024, and as a percentage of sales were both 0.2%, respectively.

Other costs were $29.0 million for the nine months ended May 31, 2025 compared to $24.5 million for the nine months ended May 31, 2024, representing an increase of $4.5 million, or 18.3%.

The increase was primarily driven by an increase in costs related to thirteen new restaurants that opened subsequent to May 31, 2024.

As a percentage of sales, other costs remained consistent at 14.3% for both the nine months ended May 31, 2025 and May 31, 2024, primarily driven by lower marketing and travel expenses, offset by higher utilities expense.

Depreciation and amortization expenses incurred as part of restaurant operating costs were $4.0 million for the three months ended November 30, 2025 compared to $3.1 million for the three months ended November 30, 2024, representing an increase of $0.9 million, or 28.8%.

The increase consists of depreciation of property and equipment related to the thirteen new restaurants that opened subsequent to November 30, 2024.

As a percentage of sales, depreciation and amortization expenses at the restaurant level was 5.4% for the three months ended November 30, 2025 as compared to 4.8% in the three months ended November 30, 2024, primarily driven by sales deleverage as a result of a decrease in comparable restaurant sales and remodel costs.

Depreciation and amortization expenses incurred at the corporate level were $0.1 million for both the three months ended November 30, 2025 and November 30, 2024, and as a percentage of sales were both 0.2%.

Other costs were $11.8 million for the three months ended November 30, 2025 compared to $9.3 million for the three months ended November 30, 2024, representing an increase of $2.5 million, or 26.4%.

The increase was primarily driven by an increase in costs related to the thirteen new restaurants that opened subsequent to November 30, 2024.

As a percentage of sales, other costs increased to 16.1% in the three months ended November 30, 2025 as compared to 14.5% in the three months ended November 30, 2024, primarily driven by higher marketing expenses, repair and maintenance costs, utilities and travel expenses, as well as sales deleverage as a result of a decrease in comparable restaurant sales.

General and administrative expenses.

General and administrative expenses were $28.5 million for the nine months ended May 31, 2025 compared to $25.6 million for the nine months ended May 31, 2024, representing an increase of $2.9 million, or 11.0%.

This increase was primarily due to the increase in compensation-related costs of $1.9 million, incremental litigation settlement expense of $1.3 million and $0.4 million in other expenses, partially offset by a decrease of $0.7 million in professional fees.

As a percentage of sales, general and administrative expenses decreased to 14.0% in the nine months ended May 31, 2025 from 14.9% in the nine months ended May 31, 2024, primarily driven by sales leverage, lower compensation-related costs, professional fees and travel expenses, partially offset by higher litigation expense.

General and administrative expenses were $9.6 million for the three months ended November 30, 2025 compared to $8.7 million for the three months ended November 30, 2024, representing an increase of $0.9 million, or 9.4%.

This increase was primarily due to litigation expenses of $0.2 million, professional fees of $0.2 million, travel expenses of $0.1 million and $0.4 million of other net increases.

As a percentage of sales, general and administrative expenses decreased to 13.0% in the three months ended November 30, 2025 as compared to 13.5% in the three months ended November 30, 2024, primarily due to sales leverage.

Interest expense.

Interest expense was $56 thousand for the nine months ended May 31, 2025 compared to $35 thousand for the nine months ended May 31, 2024.

Interest expense was $18 thousand for the three months ended November 30, 2025 compared to $13 thousand for the three months ended November 30, 2024.

Interest income.

Interest income was $2.2 million for the nine months ended May 31, 2025 compared to $2.3 million for the nine months ended May 31, 2024.

The decrease was primarily driven by lower interest rates.

Interest income was $674 thousand for the three months ended November 30, 2025 compared to $565 thousand for the three months ended November 30, 2024.

The increase was primarily driven by investing incremental cash from our follow-on offering completed in November 2024 into interest-bearing money market funds and investments, partially offset by lower interest rates and withdraws for cash operating needs.

Income tax expense.

Income tax expense was $132 thousand for the nine months ended May 31, 2025 compared to $148 thousand for the nine months ended May 31, 2024.

Income tax expense was $36 thousand for the three months ended November 30, 2025 compared to an income tax expense of $39 thousand for the three months ended November 30, 2024.

For further discussion of our income taxes, see “Note 9.

19 unchanged sentences

You should review the reconciliation of net income (loss) to EBITDA, Adjusted EBITDA and Adjusted EBITDA margin below and not rely on any single financial measure to evaluate our business.

The following table reconciles net income (loss) to EBITDA and Adjusted EBITDA:

Three Months Ended May 31,

Nine Months Ended May 31,

The following table reconciles net loss to EBITDA and Adjusted EBITDA:

Three months ended November 30,

(amounts in thousands)

Net income (loss)

Interest income, net

6 unchanged sentences

Adjusted EBITDA margin

(a) Stock-based compensation expense includes non-cash stock-based compensation, which is comprised of restaurant-level stock-based compensation included in labor and related costs and of corporate-level stock-based compensation included in general and administrative expenses in the condensed statements of operations and comprehensive income (loss).

For further details of stock-based compensation, see “Note 5.

13 unchanged sentences

However, these measures may not provide a complete understanding of the operating results of the Company as a whole and such measures should be reviewed in conjunction with our GAAP financial results.

Restaurant-level Operating Profit (Loss) to increase in proportion to the number of new restaurants we open and our comparable restaurant sales growth.

We expect Restaurant-level Operating Profit (Loss) to increase in proportion to the number of new restaurants we open and our comparable restaurant sales growth.

We present Restaurant-level Operating Profit (Loss) because it excludes the impact of general and administrative expenses, which are not incurred at the restaurant level.

7 unchanged sentences

The following table reconciles operating loss to Restaurant-level Operating Profit and Restaurant-level Operating Profit margin:

Three Months Ended May 31,

Nine Months Ended May 31,

Three months ended November 30,

(amounts in thousands)

9 unchanged sentences

Restaurant-level operating profit margin

For further details of stock-based compensation, see “Note 5.

8 unchanged sentences

Various factors impact comparable restaurant sales, including:

• consumer recognition of our brand and our ability to respond to changing consumer preferences;

• consumer recognition of our brand and our ability to respond to changing consumer preferences and spending behavior;

• overall economic trends, particularly those related to consumer spending;

7 unchanged sentences

The following table shows the comparable restaurant sales performance:

Three Months Ended May 31,

Nine Months Ended May 31,

Three months ended November 30,

Comparable restaurant sales performance (%)

6 unchanged sentences

The following table shows the growth in our restaurant base:

Three Months Ended May 31,

Nine Months Ended May 31,

Three months ended November 30,

Restaurant activity:

8 unchanged sentences

We also maintain a Revolving Credit Agreement with Kura Japan, of which the maturity date has been extended to April 10, 2028 pursuant to the Third Amendment with Kura Japan.

During the nine months ended May 31, 2025, we had no borrowings under the Revolving Credit Agreement and have $45.0 million of availability remaining.

As of May 31, 2025, we did not have any material off-balance sheet arrangements.

On November 13, 2024, we completed an underwritten public offering of common stock pursuant to our 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.

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

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

No payments were made by us to directors, officers or persons owning 10% or more of our common stock or to their associates, or to our affiliates.

During the three months ended November 30, 2025, we had no borrowings under the Revolving Credit Agreement and have $45.0 million of availability remaining.

As of November 30, 2025, we did not have any material off-balance sheet arrangements.

Summary of Cash Flows

The following table summarizes our cash flows for the periods presented:

Nine Months Ended May 31,

Three months ended November 30,

Statement of Cash Flow data:

4 unchanged sentences

Cash Flows Provided by Operating Activities

Net cash provided by operating activities during the nine months ended May 31, 2025 was $15.3 million, primarily due to a net loss of $4.2 million, non-cash charges of $10.2 million for depreciation and amortization, $3.5 million for stock-based compensation, and net cash outflows of $5.6 million from changes in operating assets and liabilities.

Net cash provided by operating activities during the nine months ended May 31, 2024 was $14.9 million, primarily due to a net loss of $3.6 million, non-cash charges of $8.6 million for depreciation and amortization, $3.2 million for stock-based compensation, and $3.4 million in non-cash lease expense, and net cash outflows of $3.4 million from changes in operating assets and liabilities.

Net cash provided by operating activities during the three months ended November 30, 2025 was $0.5 million, primarily due to a net loss of $3.1 million, non-cash charges of $4.1 million for depreciation and amortization, $1.1 million for stock-based compensation, and net cash outflows of $1.7 million from changes in operating assets and liabilities.

Net cash provided by operating activities during the three months ended November 30, 2024 was $4.4 million, primarily due to a net loss of $1.0 million, non-cash charges of $3.2 million for depreciation and amortization, $1.1 million for stock-based compensation, and $1.3 million in non-cash lease expense, and net cash outflows of $0.3 million from changes in operating assets and liabilities.

Cash Flows Used in Investing Activities

Net cash used in investing activities during the nine months ended May 31, 2025 was $84.2 million, primarily due to $70.2 million in purchases of investments, $36.7 million in purchases of property and equipment and $1.0 million in purchases of liquor licenses offset by $24.0 million in redemptions of long-term investments.

The increase in purchases of property and equipment in the nine months ended May 31, 2025 is primarily related to capital expenditures for current and future restaurant openings, maintaining our existing restaurants and other projects.

Net cash used in investing activities during the nine months ended May 31, 2024 was $27.3 million, primarily due to $3.3 million in purchases of short-term investments, $34.0 million in purchases of property and equipment and $0.2 million in purchases of liquor licenses offset by $10.5 million in redemptions of short-term investments.

The increase in purchases of property and equipment in the nine months ended May 31, 2024 is primarily related to capital expenditures for current and future restaurant openings, renovations and maintaining our existing restaurants and other projects.

Net cash used in investing activities during the three months ended November 30, 2025 was $12.7 million, primarily due to $18.4 million in purchases of investments and $13.8 million in purchases of property and equipment and $0.1 million in purchases of liquor licenses offset by $19.7 million in maturities and redemptions of investments.

The increase in purchases of property and equipment in the three months ended November 30, 2025 is primarily related to capital expenditures for the construction of future restaurant openings, maintaining our existing restaurants, renovations and other projects.

Net cash used in investing activities during the three months ended November 30, 2024 was $12.5 million, primarily due to $11.6 million in purchases of property and equipment and $0.8 million in purchases of liquor licenses.

The increase in purchases of property and equipment in the three months ended November 30, 2024 is primarily related to capital expenditures for the construction of future restaurant openings, maintaining our existing restaurants, renovations and other projects.

Cash Flows Provided by Financing Activities

Net cash provided by financing activities during the nine months ended May 31, 2025 was $65.0 million and is primarily due to aggregate net proceeds from the issuance of stock of $64.4 million after deducting the underwriting discounts and commissions and offering expenses, $0.9 million of proceeds from exercise of stock options offset by $0.3 million in taxes paid on vested RSUs.

Net cash provided by financing activities during the nine months ended May 31, 2024 was $2.0 million and is primarily due to $2.3 million of proceeds from exercise of stock options offset by $0.2 million in taxes paid on vested RSUs.

Net cash provided by financing activities during the three months ended November 30, 2025 was $1 thousand and is primarily due to $23 thousand of proceeds from exercise of stock options offset by $22 thousand in repayment of principal on finance leases.

Net cash provided by financing activities during the three months ended November 30, 2024 was $64.8 million and is primarily due to aggregate net proceeds from the issuance of stock of $64.4 million after deducting the underwriting discounts and commissions and offering expenses payable and $0.5 million of proceeds from exercise of stock options.

Material Cash Requirements

As of May 31, 2025, we had $11.2 million in contractual obligations relating to the construction of new restaurants and purchase commitments for goods related to restaurant operations.

As of November 30, 2025, we had $25.7 million in contractual obligations which consisted of $13.5 million in purchase commitments for food related to restaurant operations and $12.2 million related to the construction of new restaurants.

All contractual obligations are expected to be paid during the next 12 months utilizing cash and cash equivalents on hand and provided by operating activities.

16 unchanged sentences

Quantitative and Qualitati ve Disclosures About Market Risk.

There have been no material changes to our market risk during the nine months ended May 31, 2025.

For a discussion of our exposure to market risk, refer to our market risk disclosures set forth in Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” of our 2024 Form 10-K.

There have been no material changes to our market risk during the three months ended November 30, 2025.

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 2. Management’s Discussion and Analysis