What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-04-07 compared with 2026-01-07 · 124 added, 54 removed, 218 unchanged (45% of the section changed)

8 unchanged sentences

Business Trends

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.

During the six months ended February 28, 2026, we opened five restaurants and expanded our restaurant base to 84 restaurants in 22 states and Washington, DC.

Subsequent to February 28, 2026, we opened four additional restaurants totaling 88 restaurants.

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.

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

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

During the six months ended February 28, 2026, tariffs continued to have 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.

The reduction in tariffs on our food and beverage costs are offset by an increase in commodity inflation and therefore, based on the current economic environment, we expect our food and beverage costs as a percentage of sales for the remainder of fiscal year 2026 to remain reasonably consistent with the six months ended February 28, 2026.

In addition, ongoing geopolitical events could lead to a disruption of energy supplies, which could impact inflation, disrupt global supply chains and food distribution markets, and adversely impact consumer spending which could adversely affect our business, financial condition or results of operations.

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.

During our fiscal first quarter 2026, 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”.

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Similar to the food and beverage costs that we incur, labor and related expenses are expected to grow proportionally as our sales grow.

Factors that influence fluctuations in our labor and related expenses include minimum wage and payroll tax legislation, the frequency and severity of workers’ compensation claims, healthcare costs and by the performance of our restaurants.

influence fluctuations in our labor and related expenses include minimum wage and payroll tax legislation, the frequency and severity of workers’ compensation claims, healthcare costs and by the performance of our restaurants.

Occupancy and related expenses.

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Results of Operations

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

The following tables present selected comparative results of operations for the three and six months ended February 28, 2026 and February 28, 2025.

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 November 30,

Three Months Ended February 28,

(dollar amounts in thousands)

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Income tax expense

Three months ended November 30,

Six Months Ended February 28,

(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

Loss before income taxes

Income tax expense

Three Months Ended February 28,

Six Months Ended February 28,

(as a percentage of sales)

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Income tax expense

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.

Three Months Ended February 28, 2026 Compared to Three Months Ended February 28, 2025

Sales were $80.0 million for the three months ended February 28, 2026 compared to $64.9 million for the three months ended February 28, 2025, representing an increase of $15.1 million, or 23.3%.

The increase in sales was primarily driven by the sales resulting from eleven new restaurants that opened subsequent to February 28, 2025, as well as increases in menu prices during the same period.

Comparable restaurant sales increased 8.6%, consisting of traffic of 4.3% and price/mix of 4.3%, for the three months ended February 28, 2026, as compared to the three months ended February 28, 2025.

The increase in traffic is primarily due to incremental promotional collaborations as it relates to our Bikkura-Pon prizes and giveaways as compared to the prior year.

Food and beverage costs.

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.

Food and beverage costs were $24.3 million for the three months ended February 28, 2026 compared to $18.6 million for the three months ended February 28, 2025, representing an increase of $5.7 million, or 30.5%.

The increase in food and beverage costs was primarily driven by costs associated with sales from eleven new restaurants that opened subsequent to February 28, 2025.

As a percentage of sales, food and beverage costs increased to 30.4% in the three months ended February 28, 2026 as compared to 28.7% in the three months ended February 28, 2025, 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 $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.

Labor and related costs were $24.6 million for the three months ended February 28, 2026 compared to $22.6 million for the three months ended February 28, 2025, representing an increase of $2.0 million, or 8.8%.

This increase in labor and related costs was primarily driven by additional labor costs incurred from eleven new restaurants that opened subsequent to February 28, 2025.

As a percentage of sales, labor and related costs decreased to 30.7% in the three months ended February 28, 2026 as compared to 34.8% in the three months ended February 28, 2025, primarily due to initiatives relating to operations, such as the reservation system and scheduling, increases in menu prices and improved sales leverage, partially offset by low-single digit wage inflation.

Occupancy and related expenses.

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.

Occupancy and related expenses were $6.5 million for the three months ended February 28, 2026 compared to $5.1 million for the three months ended February 28, 2025, representing an increase of $1.4 million, or 27.8%.

The increase was primarily a result of additional lease expense related to the opening of eleven new restaurants that opened subsequent to February 28, 2025.

As a percentage of sales, occupancy and related expenses increased to 8.1% in the three months ended February 28, 2026 as compared to 7.9% in the three months ended February 28, 2025, primarily driven by incremental pre-opening lease expenses.

Depreciation and amortization expenses.

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.

Depreciation and amortization expenses incurred as part of restaurant operating costs were $4.1 million for the three months ended February 28, 2026 compared to $3.3 million for the three months ended February 28, 2025, representing an increase of $0.8 million, or 26.0%.

The increase consists of depreciation of property and equipment related to the eleven new restaurants that opened subsequent to February 28, 2025.

As a percentage of sales, depreciation and amortization expenses at the restaurant level remained relatively consistent at 5.2% for the three months ended February 28, 2026 and 5.1% in the three months ended February 28, 2025.

Depreciation and amortization expenses incurred at the corporate level were $0.1 million, or 0.2% as a percentage of sales, for both the three months ended February 28, 2026 and February 28, 2025.

Other costs were $11.6 million for the three months ended February 28, 2026 compared to $8.8 million for the three months ended February 28, 2025, representing an increase of $2.8 million, or 32.0%.

The increase was primarily driven by an increase in costs related to the eleven new restaurants that opened subsequent to February 28, 2025.

As a percentage of sales, other costs increased to 14.5% in the three months ended February 28, 2026 as compared to 13.5% in the three months ended February 28, 2025, primarily driven by higher marketing expenses due to incremental promotional collaborations, as well as utilities.

General and administrative expenses.

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.

General and administrative expenses were $11.0 million for both the three months ended February 28, 2026 and February 28, 2025.

This change was primarily due to the increase in compensation-related costs of $0.7 million and $0.2 million of other net expenses, partially offset by a net decrease in litigation costs of $0.9 million.

As a percentage of sales, general and administrative expenses decreased to 13.7% in the three months ended February 28, 2026 as compared to 16.9% in the three months ended February 28, 2025, primarily due to sales leverage of compensation-related and litigation costs.

Interest expense.

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 expense was $15 thousand for the three months ended February 28, 2026 compared to $13 thousand for the three months ended February 28, 2025.

Interest income.

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.

Interest income was $582 thousand for the three months ended February 28, 2026 compared to $859 thousand for the three months ended February 28, 2025.

The decrease was primarily driven by lower interest rates and withdraws for cash operating needs.

Income tax expense.

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.

Income tax expense was $51 thousand for the three months ended February 28, 2026 compared to an income tax expense of $38 thousand for the three months ended February 28, 2025.

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

Income Taxes” in the Notes to Condensed Financial Statements.

Six Months Ended February 28, 2026 Compared to Six Months Ended February 28, 2025

Sales were $153.5 million for the six months ended February 28, 2026 compared to $129.4 million for the six months ended February 28, 2025, representing an increase of $24.1 million, or 18.6%.

The increase in sales was primarily driven by the sales resulting from eleven new restaurants that opened subsequent to February 28, 2025, as well as increases in menu prices during the same period.

Comparable restaurant sales increased 3.0%, consisting of traffic of 0.9% and a price/mix of 2.1% for the six months ended February 28, 2026, as compared to the six months ended February 28, 2025.

Food and beverage costs.

Food and beverage costs were $46.3 million for the six months ended February 28, 2026 compared to $37.3 million for the six months ended February 28, 2025, representing an increase of $9.0 million, or 24.0%.

The increase in food and beverage costs was primarily driven by costs associated with sales from eleven new restaurants that opened subsequent to February 28, 2025.

As a percentage of sales, food and beverage costs increased to 30.1% in the six months ended February 28, 2026 as compared to 28.8% in the six months ended February 28, 2025, 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 $48.5 million for the six months ended February 28, 2026 compared to $43.8 million for the six months ended February 28, 2025, representing an increase of $4.7 million, or 10.6%.

This increase in labor and related costs was primarily driven by additional labor costs incurred from eleven new restaurants that opened subsequent to February 28, 2025.

As a percentage of sales, labor and related costs decreased to 31.6% in the six months ended February 28, 2026 as compared to 33.9% in the six months ended February 28, 2025.

The decrease in cost as a percentage of sales was primarily due to initiatives relating to operations such as the reservation system and scheduling, increases in menu prices and improved sales leverage, partially offset by low-single digit wage inflation.

Occupancy and related expenses.

Occupancy and related expenses were $12.4 million for the six months ended February 28, 2026 compared to $9.9 million for the six months ended February 28, 2025, representing an increase of $2.5 million, or 25.4%.

The increase was primarily a result of additional lease expense related to the opening of eleven new restaurants that opened subsequent to February 28, 2025.

As a percentage of sales, occupancy and related expenses increased to 8.1% in the six months ended February 28, 2026, compared to 7.6% in the six months ended February 28, 2025, primarily driven by incremental pre-opening lease expenses.

Depreciation and amortization expenses.

Depreciation and amortization expenses incurred as part of restaurant operating costs were $8.1 million for the six months ended February 28, 2026 compared to $6.4 million for the six months ended February 28, 2025, representing an increase of $1.7 million, or 27.4%.

The increase consists of depreciation of property and equipment related to eleven new restaurants that opened subsequent to February 28, 2025.

As a percentage of sales, depreciation and amortization expenses at the restaurant level were 5.3% for the six months ended February 28, 2026 as compared to 4.9% for the six months ended February 28, 2025, primarily due to depreciation associated with restaurant remodel costs.

Depreciation and amortization expenses incurred at the corporate level was $0.3 million for the six months ended February 28, 2026 compared to $0.2 million, and as a percentage of sales were both 0.2%.

Other costs were $23.4 million for the six months ended February 28, 2026 compared to $18.1 million for the six months ended February 28, 2025, representing an increase of $5.3 million, or 29.1%.

The increase was primarily driven by an increase in costs related to eleven new restaurants that opened subsequent to February 28, 2025.

As a percentage of sales, other costs were 15.2% for the six months ended February 28, 2026 as compared to 14.0% for the six months ended February 28, 2025, primarily driven by higher marketing expense due to incremental promotional collaborations, as well as utilities expense.

General and administrative expenses.

General and administrative expenses were $20.5 million for the six months ended February 28, 2026 compared to $19.7 million for the six months ended February 28, 2025, representing an increase of $0.8 million, or 4.1%.

This change was primarily due to the increase in compensation-related costs of $0.7 million, professional fees of $0.2 million, travel expenses of $0.2 million and $0.4 million of other net expenses, partially offset by a net decrease in litigation costs of $0.7 million.

As a percentage of sales, general and administrative expenses decreased to 13.4% in the six months ended February 28, 2026 from 15.2% in the six months ended February 28, 2025, primarily driven by sales leverage of compensation-related costs and litigation costs.

Interest expense.

Interest expense was $33 thousand for the six months ended February 28, 2026 compared to $26 thousand for the six months ended February 28, 2025.

Interest income.

Interest income was $1.3 million for the six months ended February 28, 2026 compared to $1.4 million for the six months ended February 28, 2025.

The decrease was primarily driven by lower interest rates and withdraws for cash operating needs.

Income tax expense.

Income tax expense was $87 thousand for the six months ended February 28, 2026 compared to $77 thousand for the six months ended February 28, 2025.

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

Income Taxes” in the Notes to Condensed Financial Statements.

Key Performance Indicators

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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.

We believe that the use of EBITDA, Adjusted EBITDA and Adjusted EBITDA margin provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial measures with those of comparable companies, which may present similar non-GAAP financial measures to investors.

companies, which may present similar non-GAAP financial measures to investors.

However, you should be aware when evaluating EBITDA, Adjusted EBITDA and Adjusted EBITDA margin that in the future we may incur expenses similar to those excluded when calculating these measures.

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

Three months ended November 30,

Three Months Ended February 28,

Six Months Ended February 28,

(amounts in thousands)

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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.

We also use Restaurant-level Operating Profit (Loss) to measure operating performance and returns from opening new restaurants.

We also use Restaurant-level Operating Profit (Loss) to measure operating performance

and returns from opening new restaurants.

Restaurant-level Operating Profit (Loss) margin allows us to evaluate the level of Restaurant-level Operating Profit (Loss) generated from sales.

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

Three months ended November 30,

Three Months Ended February 28,

Six Months Ended February 28,

(amounts in thousands)

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The following table shows the comparable restaurant sales performance:

Three months ended November 30,

Three Months Ended February 28,

Six Months Ended February 28,

Comparable restaurant sales performance (%)

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The following table shows the growth in our restaurant base:

Three months ended November 30,

Three Months Ended February 28,

Six Months Ended February 28,

Restaurant activity:

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Our working capital position benefits from the fact that we generally collect cash from sales to guests the same day or, in the case of credit or debit card transactions, within several days of the related sale, while we typically have longer payment terms with our vendors.

On December 29, 2025, we filed a universal shelf registration statement on Form S-3 (the “Registration Statement”) with the SEC in accordance with the Securities Act of 1933, as amended (the “Securities Act”).

The Registration Statement was declared effective on January 7, 2026, and registered Class A common stock, preferred stock, depositary shares, warrants, subscription rights, share purchase contracts, share purchase units, and any combination of the foregoing, for a maximum aggregate offering price of up to $100.0 million, which may be sold from time to time.

The terms of any securities offered under the Registration Statement and

intended use of proceeds will be established at the times of the offerings and will be described in prospectus supplements filed with the SEC at the times of the offerings.

The Registration Statement has a three-year term from the date of effectiveness.

We believe that cash provided by operating activities, cash on hand, cash equivalents and short-term investments will be sufficient to fund our lease obligations, capital expenditures and working capital needs for at least the next 12 months.

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 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.

During the six months ended February 28, 2026, we had no borrowings under the Revolving Credit Agreement and have $45.0 million of availability remaining.

As of February 28, 2026, 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:

Three months ended November 30,

Six Months Ended February 28,

Statement of Cash Flow data:

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Cash Flows Provided by Operating Activities

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.

Net cash provided by operating activities during the six months ended February 28, 2026 was $8.1 million, primarily due to a net loss of $4.8 million, non-cash charges of $8.4 million for depreciation and amortization, $2.3 million for stock-based compensation, and net cash outflows of $2.1 million from changes in operating assets and liabilities.

Net cash provided by operating activities during the six months ended February 28, 2025 was $8.6 million, primarily due to a net loss of $4.7 million, non-cash charges of $6.6 million for depreciation and amortization, $2.2 million for stock-based compensation, and net cash outflows of $4.4 million from changes in operating assets and liabilities.

Cash Flows Used in Investing Activities

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.

Net cash used in investing activities during the six months ended February 28, 2026 was $29.1 million, primarily due to $33.7 million in purchases of investments and $29.3 million in purchases of property and equipment and $1.0 million in purchases of liquor licenses offset by $35.0 million in maturities and redemptions of investments.

The increase in purchases of property and equipment in the six months ended February 28, 2026 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 six months ended February 28, 2025 was $39.4 million, primarily due to $25.3 million in purchases of long-term investments, $23.1 million in purchases of property and equipment and $0.9 million in purchases of liquor licenses offset by $10.0 million of redemptions of long-term investments.

The increase in purchases of property and equipment in the six months ended February 28, 2025 is primarily related to capital expenditures for future restaurant openings, maintaining our existing restaurants and other projects.

Cash Flows Provided by Financing Activities

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.

Net cash provided by financing activities during the six months ended February 28, 2026 was $73 thousand and is primarily due to $474 thousand of proceeds from exercise of stock options offset by $361 thousand in taxes paid on vested RSUs and $40 thousand in repayment of principal on finance leases.

Net cash provided by financing activities during the six months ended February 28, 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.

Material Cash Requirements

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.

As of February 28, 2026, we had $19.3 million in contractual obligations which consisted of $12.4 million in purchase commitments for food related to restaurant operations and $6.9 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.

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Quantitative and Qualitati ve Disclosures About Market Risk.

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

There have been no material changes to our market risk during the six months ended February 28, 2026.

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 Annual Report on Form 10-K for the fiscal year ended August 31, 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