Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
May 31, 2020 | Jul. 09, 2020 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | May 31, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Title of 12(b) Security | Class A Common Stock, $0.001 par value per share | |
Trading Symbol | KRUS | |
Security Exchange Name | NASDAQ | |
Entity Registrant Name | KURA SUSHI USA, INC. | |
Entity Central Index Key | 0001772177 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Current Fiscal Year End Date | --08-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Shell Company | false | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity File Number | 001-39012 | |
Entity Tax Identification Number | 26-3808434 | |
Entity Address, Address Line One | 17932 Sky Park Circle | |
Entity Address, Address Line Two | Suite H | |
Entity Address, City or Town | Irvine | |
Entity Address, State or Province | CA | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Postal Zip Code | 92614 | |
City Area Code | 657 | |
Local Phone Number | 333-4100 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Class A | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 7,341,934 | |
Class B | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 1,000,050 |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) $ in Thousands | May 31, 2020 | Aug. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 17,030 | $ 38,044 |
Accounts receivable | 660 | 948 |
Inventories | 407 | 539 |
Due from affiliate | 5 | 226 |
Prepaid expenses and other current assets | 2,929 | 1,744 |
Total current assets | 21,031 | 41,501 |
Non-current assets: | ||
Property and equipment - net | 40,937 | 31,917 |
Operating lease right-of-use assets | 50,362 | |
Deposits and other assets | 1,501 | 1,865 |
Deferred tax assets | 1,127 | |
Total assets | 113,831 | 76,410 |
Current liabilities: | ||
Accounts payable | 2,152 | 3,684 |
Accrued expenses and other current liabilities | 881 | 1,635 |
Salaries and wages payable | 1,008 | 1,348 |
Finance leases - current | 1,007 | 994 |
Operating lease liabilities - current | 4,656 | |
Due to affiliate | 123 | 83 |
Sales tax payable | 14 | 547 |
Total current liabilities | 9,841 | 8,291 |
Non-current liabilities: | ||
Finance leases - non-current | 1,729 | 2,424 |
Operating lease liabilities - non-current | 49,658 | |
Deferred rent | 2,188 | |
Tenant allowances | 1,089 | |
Other liabilities | 321 | 237 |
Total liabilities | 61,549 | 14,229 |
Commitments and contingencies (Note 8) | ||
Stockholders' equity: | ||
Additional paid-in capital | 60,052 | 59,442 |
Retained earnings | (7,778) | 2,731 |
Total stockholders' equity | 52,282 | 62,181 |
Total liabilities and stockholders' equity | 113,831 | 76,410 |
Class A | ||
Stockholders' equity: | ||
Common stock | 7 | 7 |
Class B | ||
Stockholders' equity: | ||
Common stock | $ 1 | $ 1 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - $ / shares | May 31, 2020 | Aug. 31, 2019 |
Class A | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, authorized | 20,000,000 | 20,000,000 |
Common Stock, Shares, Issued | 7,342,000 | 7,335,000 |
Common stock, outstanding | 7,342,000 | 7,335,000 |
Class B | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, authorized | 10,000,000 | 10,000,000 |
Common Stock, Shares, Issued | 1,000,000 | 1,000,000 |
Common stock, outstanding | 1,000,000 | 1,000,000 |
Condensed Statements of Operati
Condensed Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 31, 2020 | May 31, 2019 | May 31, 2020 | May 31, 2019 | |
Sales | $ 2,812 | $ 16,955 | $ 39,640 | $ 45,492 |
Restaurant operating costs: | ||||
Depreciation and amortization expenses | 743 | 517 | 2,118 | 1,457 |
Other costs | 964 | 1,756 | 5,221 | 5,102 |
Total restaurant operating costs | 7,916 | 14,358 | 40,208 | 39,017 |
General and administrative expenses | 2,885 | 1,734 | 8,994 | 5,699 |
Depreciation and amortization expenses | 39 | 29 | 97 | 80 |
Total operating expenses | 10,840 | 16,121 | 49,299 | 44,796 |
Operating income (loss) | (8,028) | 834 | (9,659) | 696 |
Other expense (income): | ||||
Interest expense | 36 | 45 | 103 | 126 |
Interest income | (65) | (1) | (432) | (11) |
Income (loss) before income taxes | (7,999) | 790 | (9,330) | 581 |
Income tax expense | 1,153 | 71 | 1,179 | 41 |
Net income (loss) | $ (9,152) | $ 719 | $ (10,509) | $ 540 |
Net income (loss) per Class A and Class B shares | ||||
Basic | $ (1.10) | $ 0.14 | $ (1.26) | $ 0.11 |
Diluted | $ (1.10) | $ 0.14 | $ (1.26) | $ 0.10 |
Weighted average Class A and Class B shares | ||||
Basic | 8,341 | 5,000 | 8,337 | 5,000 |
Diluted | 8,341 | 5,171 | 8,337 | 5,151 |
Food and Beverage Costs | ||||
Restaurant operating costs: | ||||
Cost of goods and services sold | $ 1,069 | $ 5,509 | $ 12,868 | $ 14,880 |
Labor and Related Costs | ||||
Restaurant operating costs: | ||||
Cost of goods and services sold | 3,551 | 5,279 | 15,336 | 14,286 |
Occupancy and Related Expenses | ||||
Restaurant operating costs: | ||||
Cost of goods and services sold | $ 1,589 | $ 1,297 | $ 4,665 | $ 3,292 |
Condensed Statements of Stockho
Condensed Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Class A | Class B | Common StockClass A | Common StockClass B | Additional Paid-in-Capital | Retained Earnings |
Beginning balances at Aug. 31, 2018 | $ 21,505 | $ 4 | $ 1 | $ 20,225 | $ 1,275 | ||
Beginning balance, shares at Aug. 31, 2018 | 4,000,000 | 1,000,000 | |||||
Stock-based compensation | 160 | 160 | |||||
Net income (loss) | (391) | (391) | |||||
Ending balances at Nov. 30, 2018 | 21,274 | $ 4 | $ 1 | 20,385 | 884 | ||
Ending balance, shares at Nov. 30, 2018 | 4,000,000 | 1,000,000 | |||||
Beginning balances at Aug. 31, 2018 | 21,505 | $ 4 | $ 1 | 20,225 | 1,275 | ||
Beginning balance, shares at Aug. 31, 2018 | 4,000,000 | 1,000,000 | |||||
Net income (loss) | 540 | ||||||
Ending balances at May. 31, 2019 | 22,521 | $ 4 | $ 1 | 20,701 | 1,815 | ||
Ending balance, shares at May. 31, 2019 | 4,000,000 | 1,000,000 | |||||
Beginning balances at Nov. 30, 2018 | 21,274 | $ 4 | $ 1 | 20,385 | 884 | ||
Beginning balance, shares at Nov. 30, 2018 | 4,000,000 | 1,000,000 | |||||
Stock-based compensation | 161 | 161 | |||||
Net income (loss) | 212 | 212 | |||||
Ending balances at Feb. 28, 2019 | 21,647 | $ 4 | $ 1 | 20,546 | 1,096 | ||
Ending balance, shares at Feb. 28, 2019 | 4,000,000 | 1,000,000 | |||||
Stock-based compensation | 155 | 155 | |||||
Net income (loss) | 719 | 719 | |||||
Ending balances at May. 31, 2019 | 22,521 | $ 4 | $ 1 | 20,701 | 1,815 | ||
Ending balance, shares at May. 31, 2019 | 4,000,000 | 1,000,000 | |||||
Beginning balances at Aug. 31, 2019 | 62,181 | $ 7 | $ 1 | 59,442 | 2,731 | ||
Beginning balance, shares at Aug. 31, 2019 | 7,335,000 | 1,000,000 | 7,335,000 | 1,000,000 | |||
Stock-based compensation | 121 | 121 | |||||
Net income (loss) | (1,224) | (1,224) | |||||
Ending balances at Nov. 30, 2019 | 61,078 | $ 7 | $ 1 | 59,563 | 1,507 | ||
Ending balance, shares at Nov. 30, 2019 | 7,335,000 | 1,000,000 | |||||
Beginning balances at Aug. 31, 2019 | 62,181 | $ 7 | $ 1 | 59,442 | 2,731 | ||
Beginning balance, shares at Aug. 31, 2019 | 7,335,000 | 1,000,000 | 7,335,000 | 1,000,000 | |||
Net income (loss) | (10,509) | ||||||
Ending balances at May. 31, 2020 | 52,282 | $ 7 | $ 1 | 60,052 | (7,778) | ||
Ending balance, shares at May. 31, 2020 | 7,342,000 | 1,000,000 | 7,342,000 | 1,000,000 | |||
Beginning balances at Nov. 30, 2019 | 61,078 | $ 7 | $ 1 | 59,563 | 1,507 | ||
Beginning balance, shares at Nov. 30, 2019 | 7,335,000 | 1,000,000 | |||||
Stock-based compensation | 211 | 211 | |||||
Net income (loss) | (133) | (133) | |||||
Exercise of stock options | 15 | 15 | |||||
Exercise of stock options, shares | 3,000 | ||||||
Ending balances at Feb. 29, 2020 | 61,171 | $ 7 | $ 1 | 59,789 | 1,374 | ||
Ending balance, shares at Feb. 29, 2020 | 7,338,000 | 1,000,000 | |||||
Stock-based compensation | 248 | 248 | |||||
Net income (loss) | (9,152) | (9,152) | |||||
Exercise of stock options | 15 | 15 | |||||
Exercise of stock options, shares | 4,000 | ||||||
Ending balances at May. 31, 2020 | $ 52,282 | $ 7 | $ 1 | $ 60,052 | $ (7,778) | ||
Ending balance, shares at May. 31, 2020 | 7,342,000 | 1,000,000 | 7,342,000 | 1,000,000 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
May 31, 2020 | May 31, 2019 | |
Cash flows from operating activities | ||
Net income (loss) | $ (10,509) | $ 540 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities | ||
Depreciation and amortization | 2,215 | 1,537 |
Stock-based compensation | 580 | 476 |
Loss on disposal of property and equipment | 4 | |
Deferred income taxes | 1,114 | (24) |
Noncash lease expense | 1,695 | |
Inventory write-downs | 50 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 836 | (101) |
Inventories | 82 | (84) |
Due from affiliate | 221 | (5) |
Prepaid expenses and other current assets | (1,227) | (358) |
Deposits and other assets | (108) | (181) |
Accounts payable | (2,995) | 190 |
Accrued expenses and other current liabilities | (861) | 37 |
Sales tax payable | (533) | 117 |
Salary and wages payable | (340) | 380 |
Due to affiliate | (4) | (46) |
Deferred rent and tenant allowances | 960 | |
Operating lease liabilities | (915) | |
Net cash (used in) provided by operating activities | (10,695) | 3,438 |
Cash flows from investing activities | ||
Payments for property and equipment | (9,348) | (7,688) |
Payments for initial direct costs | (165) | |
Payments for purchases of liquor licenses | (58) | (20) |
Net cash used in investing activities | (9,571) | (7,708) |
Cash flows from financing activities | ||
Proceeds from borrowings of debt | 3,921 | |
Repayment on debt | (866) | |
Proceeds from PPP loan | 5,983 | |
Repayment of PPP loan | (5,983) | |
Repayment of principal on finance leases | (778) | (785) |
Payments of costs related to initial public offering | (2,446) | |
Proceeds from stock option exercises | 30 | |
Net cash used in financing activities | (748) | (176) |
Decrease in cash and cash equivalents | (21,014) | (4,446) |
Cash and cash equivalents, beginning of year | 38,044 | 5,711 |
Cash and cash equivalents, end of year | 17,030 | 1,265 |
Noncash investing activities | ||
Amounts unpaid for purchases of property and equipment | $ 1,916 | $ 434 |
Organization and Basis of Prese
Organization and Basis of Presentation | 9 Months Ended |
May 31, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Note 1. Organization and Basis of Presentation Kura Sushi USA, Inc. is a technology-enabled Japanese restaurant concept that provides guests with a distinctive dining experience by serving authentic Japanese cuisine through an engaging revolving sushi service model, which the Company refers to as the “Kura Experience”. Kura Sushi encourages healthy lifestyles by serving freshly prepared Japanese cuisine using high-quality ingredients that are free from artificial seasonings, sweeteners, colorings, and preservatives. Kura Sushi aims to make quality Japanese cuisine accessible to our guests across the United States through affordable prices and an inviting atmosphere. “Kura Sushi USA,” “Kura Sushi,” “Kura,” and the “Company” refer to Kura Sushi USA, Inc. unless expressly indicated or the context otherwise requires. Effects of COVID-19 In March 2020, the World Health Organization declared the novel strain of coronavirus COVID-19 a global pandemic. This contagious virus, which has continued to spread, has adversely affected workforces, customers, economies and financial markets globally. In response to this outbreak, many state and local authorities mandated the temporary closure of non-essential businesses and dine-in restaurant activity. COVID-19 and the government measures taken to control it have caused a significant disruption to the Company’s business operation. On March 18, 2020, the Company announced the temporary closure of all of its 25 restaurants located across five states and has since furloughed certain of its employees. As of May 31, 2020, the Company had reopened seven restaurants and as of the filing date of this Quarterly Report, has reopened all 25 restaurants, with 14 of them in California currently only providing takeout due to government restrictions on indoor dining. The reopened restaurants that allow indoor dining have been operating at reduced capacities of 25% or 50% depending on local requirements. To support the Company’s employees during this challenging time, the Company has maintained payroll for restaurant managers and key kitchen staff. The Company maintained payroll for all employees through April 5, 2020 and all kitchen employees through May 9, 2020. The Company also continued to pay the employees’ portion of health insurance for all furloughed employees. In response to the ongoing COVID-19 pandemic, the Company has prioritized taking steps to protect the health and safety of its employees and customers. Currently, the restaurants are not utilizing the revolving conveyor belt and all food is ordered from the tableside touchscreen. The food is delivered either by the express belt directly from the kitchen to the customers’ tables or by the restaurant employees. The Company has increased cleaning and sanitizing protocols of its restaurants and has implemented additional training and operational manuals for its restaurant employees, as well as increased handwashing procedures. The Company also provides each restaurant employee with face masks and gloves, and requires each employee to pass a health screening process, which includes a temperature check, before the start of each shift. The temporary restaurant closure and the reduced capacities at the reopened restaurants have caused a substantial decline in the Company’s sales in the most recent fiscal quarter. The future sales levels of the Company’s restaurants and the Company’s ability to implement its growth strategy remain highly uncertain, as the full impact and duration of the COVID-19 outbreak continues to evolve as of the date of this Quarterly Report. The Company expects the current decreased restaurant sales levels and ongoing length and severity of the economic downturn caused by the pandemic will continue to have a material adverse impact on the future business, financial condition, liquidity and financial results of the Company. Recent Events Concerning the Company’s Financial Position On April 10, 2020, the Company and Kura Sushi, Inc. (“Kura Japan”), a majority stockholder, entered into a Revolving Credit Agreement On April 14, 2020, the Company entered into a Promissory Note with Bank of the West, which provided for a loan in the amount of $6.0 million (the “PPP Loan”) pursuant to the Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) signed into law on March 27, 2020. On April 29, 2020, the Company returned the proceeds received from the PPP Loan. Under the provisions of the CARES Act, the Company is eligible for a refundable employee retention credit subject to certain criteria. In connection with the CARES Act, the Company adopted a policy to recognize the employee retention credit when earned and to offset the credit against the related expenditure. Accordingly, the Company recorded a $1.6 million employee retention credit during the three months ended May 31, 2020, which is included in Labor and related costs in the statements of operations. The Company has received rent concessions from its landlords for certain of its restaurants in the form of rent abatements and rent deferrals which were immaterial for the three months ended May 31, 2020. The Company continues to have discussions with its landlords regarding potential future rent concessions. Due to the impact of COVID-19, the Company assessed its long-lived assets for potential impairment, which resulted in no impairment charges recorded as of May 31, 2020. The Company also assessed the realizability of its deferred tax assets and recorded a valuation allowance of $1.1 million during the three months ended May 31, 2020. See “Note 9. Income Taxes”. Basis of Presentation The accompanying unaudited condensed financial statements (the “Condensed Financial Statements”) have been prepared by the Company in accordance with generally accepted accounting principles in the United States (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. As such, these Condensed Financial Statements should be read in conjunction with the Company’s audited financial statements and accompanying notes included in its Annual Report on Form 10-K for the fiscal year ended August 31, 2019. The accounting policies followed by the Company are set forth in Part II, Item 8, Note 2, Basis of Presentation and Summary of Accounting Policies, of the Notes to Financial Statements included in the Company’s Annual Report on Form 10‑K for the fiscal year ended August 31, 2019. In the opinion of management, all adjustments necessary to fairly state the Condensed Financial Statements have been made. All such adjustments are of a normal, recurring nature. The results of operations for interim periods are not necessarily indicative of results to be expected for the year ending August 31, 2020 or for any other future annual or interim period. Fiscal Year The Company’s fiscal year begins on September 1 and ends on August 31 and references made to “fiscal year 2020,” “fiscal year 2019” and “fiscal year 2018” refer to the Company’s fiscal years ended August 31, 2020, August 31, 2019 and August 31, 2018, respectively. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods presented. Significant items subject to such estimates include asset retirement obligations, stock-based compensation, the useful lives of assets, the assessment of the recoverability of long-lived assets, and income taxes. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could differ materially from those estimates and assumptions. Comprehensive Income Comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. Comprehensive income is the same as net income for all periods presented. Therefore, a separate statement of comprehensive income is not included in the accompanying financial statements. Recently Adopted Accounting Pronouncements In April 2020, the staff of the Financial Accounting Standards Board (FASB) issued a question-and-answer document that stated that entities may elect to account for lease concessions related to the effects of the COVID-19 pandemic as though the rights and obligations for those concessions existed as of the commencement of the contract rather than as a lease modification. Lessees may make the election for any lessor-provided lease concession related to the impact of the COVID-19 pandemic as long as the concession does not result in a substantial increase in the rights of the lessor or in the obligations of the lessee. The Company has made such election. The Company has received immaterial rent concessions and has not entered into any lease modifications as of May 31, 2020. As such, this election did not have a material impact on the balance sheets, the statements of operations, statements of stockholders’ equity or statements of cash flows. On September 1, 2019, the Company adopted ASU 2016-02, “Leases (Topic 842)” (“Topic 842” or “ASC 842”), along with related clarifications and improvements. This pronouncement requires lessees to recognize a liability for lease obligations, which represents the discounted obligation to make future lease payments, and a corresponding right-of-use asset on the balance sheet. The guidance requires disclosure of key information about leasing arrangements that is intended to give financial statement users the ability to assess the amount, timing, and potential uncertainty of cash flows related to leases. The Company elected the optional transition method to apply the standard as of the effective date and therefore, prior period amounts have not been adjusted and continue to be reported in accordance with our historical accounting under previous lease guidance, ASC Topic 840: Leases (Topic 840). The adoption of Topic 842 had a material impact on the balance sheets and an immaterial impact on the statements of operations, statements of equity and statements of cash flows. The practical expedients were as follows: Practical expedients The Company has not reassessed whether any expired or existing contracts are, or contain, leases. The Company has not reassessed the lease classification for any expired or existing leases. The Company has not reassessed initial direct costs for any expired or existing leases. Hindsight Practical Expedient The Company has elected the hindsight practical expedient, which permits the use of hindsight when determining lease term and impairment of operating lease assets. The impact on the balance sheet is as follows: August 31, 2019 Adjustments Due to the Adoption of Topic 842 September 1, 2019 (amounts in thousands) Assets Current assets: Cash and cash equivalents $ 38,044 $ — $ 38,044 Accounts receivable 948 — 948 Inventories 539 — 539 Due from affiliate 226 — 226 Prepaid expenses and other current assets (1) 1,744 (54 ) 1,690 Total current assets 41,501 (54 ) 41,447 Non-current assets: Property and equipment - net 31,917 31,917 Operating lease right-of-use assets — 37,332 37,332 Deposits and other assets (1) 1,865 (530 ) 1,335 Deferred tax assets 1,127 — 1,127 Total assets $ 76,410 $ 36,748 $ 113,158 Liabilities and stockholders' equity Current liabilities: Accounts payable $ 3,684 $ — $ 3,684 Accrued expenses and other current liabilities (1) 1,635 (97 ) 1,538 Salaries and wages payable 1,348 — 1,348 Finance leases - current 994 — 994 Operating lease liabilities - current — 3,618 3,618 Due to affiliate 83 — 83 Sales tax payable 547 — 547 Total current liabilities 8,291 3,521 11,812 Non-current liabilities: Finance leases - non-current 2,424 — 2,424 Operating lease liabilities - non-current — 36,504 36,504 Deferred rent (1) 2,188 (2,188 ) — Tenant allowances (1) 1,089 (1,089 ) — Other liabilities 237 — 237 Total liabilities 14,229 36,748 50,977 Stockholders' equity: Common stock - Class A 7 — 7 Common stock - Class B 1 — 1 Additional paid-in capital 59,442 — 59,442 Retained earnings 2,731 — 2,731 Total stockholders' equity 62,181 — 62,181 Total liabilities and stockholders' equity $ 76,410 $ 36,748 $ 113,158 (1) Adjustment to reclassify prepaid rent, initial direct costs, deferred rent and tenant allowance to right-of-use assets for operating leases upon the adoption of Topic 842. Recently Issued Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes,” which is intended to simplify various aspects related to accounting for income taxes. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. ASU 2019-12 is effective for the Company beginning in fiscal year 2022. The Company is currently in the process of evaluating the effects of this pronouncement on its financial statements. |
Balance Sheet Components
Balance Sheet Components | 9 Months Ended |
May 31, 2020 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance Sheet Components | Note 2. Accounts Receivable May 31, August 31, 2020 2019 (amounts in thousands) Tenant allowance receivable $ 548 $ 215 Credit card receivable 112 733 Total accounts receivable $ 660 $ 948 Property and Equipment, net May 31, August 31, 2020 2019 (amounts in thousands) Leasehold improvements $ 27,952 $ 24,926 Lease assets 6,133 6,037 Furniture and fixtures 7,450 5,600 Computer equipment 687 599 Vehicles 88 75 Software 634 428 Construction in progress 7,083 1,127 Property and equipment, gross 50,027 38,792 Less: accumulated depreciation and amortization (9,090 ) (6,875 ) Total property and equipment - net $ 40,937 $ 31,917 Depreciation and amortization expense for property and equipment was approximately $ 0.8 0.5 Deposits and Other Assets May 31, August 31, 2020 2019 (amounts in thousands) Liquor license $ 696 $ 638 Initial direct costs — 530 Security deposits 805 697 Total deposits and other assets $ 1,501 $ 1,865 Prepaid Expenses and Other Current Assets May 31, August 31, 2020 2019 (amounts in thousands) Prepaid expenses $ 976 $ 1,293 Other current assets $ 373 $ 451 Employee retention credit 1,580 - Total prepaid expenses and other current assets $ 2,929 $ 1,744 |
Leases
Leases | 9 Months Ended |
May 31, 2020 | |
Leases [Abstract] | |
Leases | Note 3. Leases At inception of a contract, the Company assesses whether the contract is a lease based on whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Lease classification, measurement, and recognition are determined at lease commencement, which is the date the underlying asset is available for use by the Company. The accounting classification of a lease is based on whether the arrangement is effectively a financed purchase of the underlying asset (finance lease) or not (operating lease). The Company has operating and finance leases for its corporate office, restaurant locations, office equipment, kitchen equipment and automobiles. Our leases have remaining lease terms of less than 1 year to 20 years, some of which include options to extend the leases. For leases with renewal periods at the Company’s option, the Company determines the expected lease period based on whether the renewal of any options is reasonably assured at the inception of the lease. Operating leases are accounted for on the balance sheet with the right-of-use (“ROU”) assets and lease liabilities recognized in “Operating lease right-of-use assets”, “Operating lease liabilities - current" and "Operating lease liabilities - noncurrent" on the balance sheet, respectively. Finance leases are accounted for on the balance sheet with ROU assets and lease liabilities recognized in "Property and equipment - net”, “Finance lease - current" and "Finance lease - noncurrent" on the balance sheet, respectively. Lease assets and liabilities are recognized at the lease commencement date. All lease liabilities are measured at the present value of the lease payments not yet paid. To determine the present value of lease payments not yet paid, the Company estimates incremental borrowing rates corresponding to the maturities of the leases. As the Company has no outstanding debt, it estimates this rate based on prevailing financial market conditions, comparable company and credit analysis, and management judgment. ROU assets, for both operating and finance leases, are initially measured based on the lease liability, adjusted for initial direct costs, prepaid or deferred rent, and lease incentives. The operating lease ROU assets are subsequently measured at the carrying amount of the lease liability adjusted for initial direct costs, prepaid or accrued lease payments, and lease incentives. Depreciation of the finance lease ROU assets are subsequently calculated using the straight-line method over the shorter of the estimated useful lives or the expected lease terms and recorded in "Depreciation and amortization expense" on the statement of operations. Related to the adoption of Topic 842, the Company’s policy elections were as follows: Separation of lease and non-lease components The Company has elected a policy to account for lease and non-lease components as a single component for our entire population of operating lease assets. Short-term policy The Company has elected the short-term lease recognition exemption for all applicable classes of underlying assets. Short-term disclosures include only those leases with a term greater than one month and 12 months or less, and expense is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less, that do not include an option to purchase the underlying asset that the Company is reasonably certain to exercise, are not recorded on the balance sheet. The Company recognizes expense for these leases on a straight-line basis over the lease term. In addition to the fixed minimum payments required under the lease arrangements, certain leases require variable lease payments, such as common area maintenance, insurance and real estate taxes, which are recognized when the associated activity occurs. Additionally, contingent rental payments based on sales thresholds for certain of our restaurants are accrued based on estimated sales. Lease related costs recognized in the statements of operations for the three and nine months ended May 31, 2020 Three Months Ended Nine Months Ended May 31, 2020 May 31, 2020 (amounts in thousands) Finance lease cost Classification Amortization of right-of-use assets Depreciation and amortization expense $ 141 $ 419 Interest on lease liabilities Interest expense 30 95 Total finance lease cost $ 171 $ 514 Three Months Ended Nine Months Ended May 31, 2020 May 31, 2020 (amounts in thousands) Operating lease cost Classification Operating lease cost Occupancy and related expenses, other costs and general and administrative expenses $ 1,244 $ 3,688 Variable lease cost Occupancy and related expenses, and general and administrative expenses 223 923 Total operating lease cost $ 1,467 $ 4,611 Supplemental balance sheet information related to leases was as follows: Operating Leases May 31, 2020 (amounts in thousands) Right-of-use assets $ 50,362 Lease liabilities - current 4,656 Lease liabilities - non-current 49,658 Total lease liabilities $ 54,314 Finance Lease Assets, net May 31, 2020 (amounts in thousands) Property and equipment $ 6,133 Accumulated depreciation (2,044 ) Total property and equipment - net $ 4,089 Finance Leases Liabilities May 31, 2020 (amounts in thousands) Finance lease - current $ 1,007 Finance lease - non-current 1,729 Total finance lease liabilities $ 2,736 May 31, 2020 Weighted Average Remaining Lease Term (Years) Operating leases 15.1 Finance leases 2.6 Weighted Average Discount Rate Operating leases 5.8 % Finance leases 4.5 % Supplemental disclosures of cash flow information related to leases were as follows: Nine Months Ended May 31, 2020 (amounts in thousands) Operating cash flows paid for operating lease liabilities $ 2,644 Operating right-of-use assets obtained in exchange for new operating lease liabilities $ 15,074 As of May 31, 2020, the Company has additional operating leases related to restaurants the Company has not yet taken possession of $18.0 million. These operating leases will commence between fiscal years 2020 and 2021 with lease terms of 20 years. Subsequent to May 31, 2020, the Company entered into two operating leases for an office space and a restaurant space commencing in fiscal 2021 with initial lease terms of five years and 10 years, respectively, and total minimum lease payments for both properties of $4.1 million. In addition, the Company has options to extend the lease terms by five years and 10 years, respectively. Maturities of lease liabilities were as follows as of May 31, 2020: Operating Leases Finance Leases (amounts in thousands) Remainder of 2020 $ 1,189 $ 272 2021 4,763 1,107 2022 4,806 1,004 2023 4,804 483 2024 4,954 17 Thereafter 64,908 2 Total lease payments 85,424 2,885 Less: imputed interest (31,110 ) (149 ) Present value of lease liabilities $ 54,314 $ 2,736 As previously disclosed in our fiscal year 2019 Annual Report on Form 10-K and under the previous lease accounting, maturities of lease liabilities were as follows as of August 31, 2019: Operating Lease Payments Capital Lease Payments (amounts in thousands) 2020 $ 4,256 $ 1,113 2021 4,435 1,075 2022 4,477 972 2023 4,465 476 2024 4,607 13 Thereafter 58,714 — Total $ 80,954 $ 3,649 Less interest (231 ) Total capital lease obligation 3,418 Less current portion of capital lease obligation (994 ) Non-current portion of capital lease obligation $ 2,424 |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
May 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 4. Related Party Transactions Kura Sushi, Inc. (“Kura Japan”) is a majority stakeholder of the Company, and is incorporated and headquartered in Japan. In August 2019 the Company entered into a Shared Services Agreement with Kura Japan, pursuant to which Kura Japan provides the Company with certain strategic, operational and other support services, including assigning certain employees to work for the Company as expatriates to provide support to the Company’s operations, sending its employees to the Company on a short-term basis to provide support for the opening of new restaurants or renovation of existing restaurants, and providing the Company with certain supplies, parts and equipment for use in the Company’s restaurants. In addition, the Company has agreed to continue to provide Kura Japan with certain translational support services and market research analyses. In exchange for such services, supplies, parts and equipment, the parties will pay fees to each other as set forth under the Shared Services Agreement. A right of setoff is not required, 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 from Kura Japan are included in general and administrative expenses in the accompanying statements of operations. Purchases of equipment from Kura Japan are included in property and equipment in the accompanying balance sheets. In August 2019, the Company entered into an Amended and Restated Exclusive License Agreement (the “License Agreement”) with Kura Japan. Pursuant to the License Agreement, the Company pays Kura Japan a royalty fee of 0.5% of the Company’s net sales in exchange for an exclusive, royalty-bearing license for use of certain of Kura Japan’s intellectual property rights, including, but not limited to, Kura Japan’s trademarks “Kura Sushi” and “Kura Revolving Sushi Bar,” and patents for a food management system and the Mr. 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. On April 10, 2020, the Company and Kura Japan entered into a Revolving Credit Agreement establishing a $20 million revolving credit line with a termination date of March 31, 2024, to provide the Company with additional liquidity. The maturity date for amounts borrowed under the Revolving Credit Agreement is twelve months after the disbursement date, unless renewed or extended by mutual agreement of both parties for an additional twelve months. Balances with Kura Japan as of May 31, 2020 and August 31, 2019 are as follows: May 31, August 31, 2020 2019 (amounts in thousands) Due from affiliate $ 5 $ 226 Due to affiliate 123 83 Transactions with Kura Japan for the three months ended May 31, 2020 and May 31, 2019 and for the nine months ended May 31, 2020 and May 31, 2019 are as follows: Three Months Ended May 31, Nine Months Ended May 31, 2020 2019 2020 2019 (amounts in thousands) Related party transactions: Purchases of administrative supplies $ 8 $ 1 $ 31 $ 10 Expatriate salaries expense 34 32 106 84 Royalty payments 14 84 198 227 Travel and other administrative expenses 23 30 73 67 Purchases of equipment 200 104 833 549 Total related party transactions $ 279 $ 251 $ 1,241 $ 937 |
Stock-based Compensation
Stock-based Compensation | 9 Months Ended |
May 31, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-based Compensation | Note 5. Stock-based Compensation The following table summarizes the stock option activity under the Company’s 2018 Incentive Compensation Plan (the “Stock Incentive Plan”) for the period from August 31, 2019 through May 31, 2020: Activity under the Stock Incentive Plan is as follows: Options Outstanding Number of shares underlying outstanding options Weighted Average Exercise Price Per Share Outstanding—August 31, 2019 405,302 $ 4.46 Options granted 157,539 21.85 Options exercised (6,814 ) 4.26 Options canceled/forfeited (6,641 ) 11.35 Outstanding—May 31, 2020 549,386 $ 9.37 Stock-based compensation related to the stock options issued under the Stock Incentive Plan was $0.2 million for both the three months ended May 31, 2020 and May 31, 2019 and was $0.6 million and $0.5 million for the nine months ended May 31, 2020 and May 31, 2019, respectively. Stock-based compensation for restaurant-level employees is included in other costs and stock-based compensation for corporate-level employees is included in general and administrative expenses in the statements of operations. The total stock-based compensation expense recognized under the Stock Incentive Plan in the statements of operations is as follows: Three Months Ended May 31, Nine Months Ended May 31, 2020 2019 2020 2019 (amounts in thousands) Restaurant-level stock-based compensation included in other costs $ 23 $ 17 $ 59 $ 62 Corporate-level stock-based compensation included in general and administrative expenses 225 138 521 414 Total stock-based compensation $ 248 $ 155 $ 580 $ 476 |
Debt
Debt | 9 Months Ended |
May 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Note 6. Debt On January 31, 2019, the Company secured a non-revolving line of credit in the amount of up to $5 million (the “Credit Facility”) that matures on July 31, 2020. All borrowings under the Credit Facility will bear interest at the Company’s option at either (a) the prime lending rate of the lender less one-half of one percent (0.5%), or (b) one-month LIBOR plus one and one-half percent (1.5%). At any time the Company has an aggregate principal balance of at least $300,000 outstanding, that had not previously been converted to a term loan, the aggregate principal balance outstanding shall be converted to be payable on a term loan basis. The Company also has the option to convert the principal balance outstanding to a term loan by providing written notice to the lender at least 30 days prior to the maturity date. Each term loan will have a maturity of not more than 36 months. The obligations of the Company under the Credit Facility are collateralized by substantially all assets of the Company. The Credit Facility also requires the Company to comply with certain financial covenants regarding the Company’s liquidity, fixed charge coverage ratio and tangible net worth ratio. Changes in the Company’s financial condition that cause a breach of any of these financial covenants could result in a default and an acceleration of the obligations under the Credit Facility, which could have an adverse effect on the Company’s liquidity, capital resources and results of operations. The Company was in compliance with all financial-related covenants under the Credit Facility as of May 31, 2020, except for the fixed charge coverage ratio covenant. On June 29, 2020, the Company was issued a waiver for this covenant as of May 31, 2020. As of May 31, 2020, the Company had no outstanding borrowings and had $1.1 million available under the Credit Facility. On April 10, 2020, the Company and Kura Japan entered into a Revolving Credit Agreement On April 14, 2020, the Company entered into a Promissory Note with Bank of the West, which provided for a loan in the amount of $6.0 million (the “PPP Loan”) pursuant to the Paycheck Protection Program under the CARES Act. On April 29, 2020, the Company returned the proceeds received from the PPP Loan. |
Income (Loss) Per Share
Income (Loss) Per Share | 9 Months Ended |
May 31, 2020 | |
Earnings Per Share [Abstract] | |
Income (Loss) Per Share | Note 7. Income (Loss) Per Share The net income (loss) per share attributable to common stockholders is allocated based on the contractual participation rights of the Class A common stock and Class B common stock as if the earnings for the period has been distributed. As the liquidation and dividend rights for Class A and Class B common stock are identical, the net income (loss) attributable to common stockholders is allocated on a proportionate basis. The following table sets forth the computation of the Company’s basic and diluted net income (loss) per share: Three Months Ended May 31, Nine Months Ended May 31, 2020 2019 2020 2019 Class A Class B Class A Class B Class A Class B Class A Class B (amounts in thousands, except per share data) Net income (loss) attributable to common stockholders - basic $ (8,055 ) $ (1,097 ) $ 575 $ 144 $ (9,248 ) $ (1,261 ) $ 432 $ 108 Weighted average common shares outstanding - basic 7,341 1,000 4,000 1,000 7,337 1,000 4,000 1,000 Net income (loss) per share attributable to common stockholders - basic $ (1.10 ) $ (1.10 ) $ 0.14 $ 0.14 $ (1.26 ) $ (1.26 ) $ 0.11 $ 0.11 Net income (loss) attributable to common stockholders - diluted $ (8,055 ) $ (1,097 ) $ 580 $ 139 $ (9,248 ) $ (1,261 ) $ 435 $ 105 Weighted average shares outstanding - basic 7,341 1,000 4,000 1,000 7,337 1,000 4,000 1,000 Options to purchase common stock — — 171 — — — 151 — Weighted average shares outstanding - diluted 7,341 1,000 4,171 1,000 7,337 1,000 4,151 1,000 Net income (loss) per share attributable to common stockholders - diluted $ (1.10 ) $ (1.10 ) $ 0.14 $ 0.14 $ (1.26 ) $ (1.26 ) $ 0.10 $ 0.10 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. Diluted income (loss) per common share is computed 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. For the three months ended May 31, 2020, there were approximately 21 thousand potentially dilutive shares that were excluded from the calculation of diluted loss per share because their inclusion would have been anti-dilutive. For the three months ended May 31, 2019, there were no potentially dilutive shares 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, 2020, there were approximately 137 thousand potentially dilutive shares, respectively, that were excluded from the calculation of diluted loss per share because their inclusion would have been anti-dilutive. For the nine months ended May 31, 2019, there were no potentially dilutive shares that were excluded from the calculation of diluted income per share because their inclusion would have been anti-dilutive. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
May 31, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 8. Commitments and Contingencies Contingencies . On May 31, 2019, a putative class action complaint was filed by a former employee Brandy Gomes in Los Angeles County Superior Court, alleging violations of California wage and hour laws. The Company was served with this complaint on June 28, 2019. The Company disputes any allegations of wrongdoing and intends to defend itself vigorously 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 our business, including but not limited to commercial disputes, environmental matters, employee related claims, intellectual property disputes and litigation in connection with transactions including acquisitions and divestitures. In the opinion of management, the Company does not believe that such litigation, claims, and administrative proceedings, including the putative class action matter referenced above, will have a material adverse effect on our business, financial position, results of operations or cash flows. However, a significant increase in the number of these claims or an increase in amounts owing under successful claims, including the putative class action referenced above, could materially and adversely affect our business, financial condition, results of operations or cash flows. The Company records a liability when a loss is considered probable, and the amount can be reasonably estimated. |
Income Taxes
Income Taxes | 9 Months Ended |
May 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 9. Income Taxes The Company recorded an income tax expense of $1.2 million and $71 thousand for the three months ended May 31, 2020 and May 31, 2019, respectively. The Company recorded an income tax expense of $1.2 million and $41 thousand for the nine months ended May 31, 2020 and May 31, 2019, respectively. The Company’s effective tax rate for the nine months ended May 31, 2020 substantially differed from the federal statutory tax rate of 21 percent primarily due to a one-time, non-cash charge to record a valuation allowance for the Company’s deferred tax assets as discussed below. During the three months ended May 31, 2020, the adverse effects of the COVID-19 pandemic have caused the Company to reassess the need for valuation allowances against its deferred tax assets. The Company performed an assessment of positive and negative evidence regarding the realization of its deferred tax assets. The weight given to positive and negative evidence is commensurate with the extent to which it can be objectively verified. Based on the weight of available evidence, it is more likely than not that the Company’s deferred tax assets will not be realized and therefore, the Company recorded a valuation allowance on its deferred tax assets. The total amount of the valuation allowances recorded as a discrete item during the three months ended May 31, 2020 was approximately $1.1 million. On March 27, 2020, the CARES Act was signed into law and includes certain business tax provisions. However, the Company does not expect the CARES Act to have a material impact on the Company’s effective tax rate or income tax expense for the year. |
Organization and Basis of Pre_2
Organization and Basis of Presentation (Policies) | 9 Months Ended |
May 31, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Effects of COVID-19 | Effects of COVID-19 In March 2020, the World Health Organization declared the novel strain of coronavirus COVID-19 a global pandemic. This contagious virus, which has continued to spread, has adversely affected workforces, customers, economies and financial markets globally. In response to this outbreak, many state and local authorities mandated the temporary closure of non-essential businesses and dine-in restaurant activity. COVID-19 and the government measures taken to control it have caused a significant disruption to the Company’s business operation. On March 18, 2020, the Company announced the temporary closure of all of its 25 restaurants located across five states and has since furloughed certain of its employees. As of May 31, 2020, the Company had reopened seven restaurants and as of the filing date of this Quarterly Report, has reopened all 25 restaurants, with 14 of them in California currently only providing takeout due to government restrictions on indoor dining. The reopened restaurants that allow indoor dining have been operating at reduced capacities of 25% or 50% depending on local requirements. To support the Company’s employees during this challenging time, the Company has maintained payroll for restaurant managers and key kitchen staff. The Company maintained payroll for all employees through April 5, 2020 and all kitchen employees through May 9, 2020. The Company also continued to pay the employees’ portion of health insurance for all furloughed employees. In response to the ongoing COVID-19 pandemic, the Company has prioritized taking steps to protect the health and safety of its employees and customers. Currently, the restaurants are not utilizing the revolving conveyor belt and all food is ordered from the tableside touchscreen. The food is delivered either by the express belt directly from the kitchen to the customers’ tables or by the restaurant employees. The Company has increased cleaning and sanitizing protocols of its restaurants and has implemented additional training and operational manuals for its restaurant employees, as well as increased handwashing procedures. The Company also provides each restaurant employee with face masks and gloves, and requires each employee to pass a health screening process, which includes a temperature check, before the start of each shift. The temporary restaurant closure and the reduced capacities at the reopened restaurants have caused a substantial decline in the Company’s sales in the most recent fiscal quarter. The future sales levels of the Company’s restaurants and the Company’s ability to implement its growth strategy remain highly uncertain, as the full impact and duration of the COVID-19 outbreak continues to evolve as of the date of this Quarterly Report. The Company expects the current decreased restaurant sales levels and ongoing length and severity of the economic downturn caused by the pandemic will continue to have a material adverse impact on the future business, financial condition, liquidity and financial results of the Company. |
Recent Events Concerning the Company’s Financial Position | Recent Events Concerning the Company’s Financial Position On April 10, 2020, the Company and Kura Sushi, Inc. (“Kura Japan”), a majority stockholder, entered into a Revolving Credit Agreement On April 14, 2020, the Company entered into a Promissory Note with Bank of the West, which provided for a loan in the amount of $6.0 million (the “PPP Loan”) pursuant to the Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) signed into law on March 27, 2020. On April 29, 2020, the Company returned the proceeds received from the PPP Loan. Under the provisions of the CARES Act, the Company is eligible for a refundable employee retention credit subject to certain criteria. In connection with the CARES Act, the Company adopted a policy to recognize the employee retention credit when earned and to offset the credit against the related expenditure. Accordingly, the Company recorded a $1.6 million employee retention credit during the three months ended May 31, 2020, which is included in Labor and related costs in the statements of operations. The Company has received rent concessions from its landlords for certain of its restaurants in the form of rent abatements and rent deferrals which were immaterial for the three months ended May 31, 2020. The Company continues to have discussions with its landlords regarding potential future rent concessions. Due to the impact of COVID-19, the Company assessed its long-lived assets for potential impairment, which resulted in no impairment charges recorded as of May 31, 2020. The Company also assessed the realizability of its deferred tax assets and recorded a valuation allowance of $1.1 million during the three months ended May 31, 2020. See “Note 9. Income Taxes”. |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed financial statements (the “Condensed Financial Statements”) have been prepared by the Company in accordance with generally accepted accounting principles in the United States (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. As such, these Condensed Financial Statements should be read in conjunction with the Company’s audited financial statements and accompanying notes included in its Annual Report on Form 10-K for the fiscal year ended August 31, 2019. The accounting policies followed by the Company are set forth in Part II, Item 8, Note 2, Basis of Presentation and Summary of Accounting Policies, of the Notes to Financial Statements included in the Company’s Annual Report on Form 10‑K for the fiscal year ended August 31, 2019. In the opinion of management, all adjustments necessary to fairly state the Condensed Financial Statements have been made. All such adjustments are of a normal, recurring nature. The results of operations for interim periods are not necessarily indicative of results to be expected for the year ending August 31, 2020 or for any other future annual or interim period. |
Fiscal Year | Fiscal Year The Company’s fiscal year begins on September 1 and ends on August 31 and references made to “fiscal year 2020,” “fiscal year 2019” and “fiscal year 2018” refer to the Company’s fiscal years ended August 31, 2020, August 31, 2019 and August 31, 2018, respectively. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods presented. Significant items subject to such estimates include asset retirement obligations, stock-based compensation, the useful lives of assets, the assessment of the recoverability of long-lived assets, and income taxes. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could differ materially from those estimates and assumptions. |
Comprehensive Income | Comprehensive Income Comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. Comprehensive income is the same as net income for all periods presented. Therefore, a separate statement of comprehensive income is not included in the accompanying financial statements. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In April 2020, the staff of the Financial Accounting Standards Board (FASB) issued a question-and-answer document that stated that entities may elect to account for lease concessions related to the effects of the COVID-19 pandemic as though the rights and obligations for those concessions existed as of the commencement of the contract rather than as a lease modification. Lessees may make the election for any lessor-provided lease concession related to the impact of the COVID-19 pandemic as long as the concession does not result in a substantial increase in the rights of the lessor or in the obligations of the lessee. The Company has made such election. The Company has received immaterial rent concessions and has not entered into any lease modifications as of May 31, 2020. As such, this election did not have a material impact on the balance sheets, the statements of operations, statements of stockholders’ equity or statements of cash flows. On September 1, 2019, the Company adopted ASU 2016-02, “Leases (Topic 842)” (“Topic 842” or “ASC 842”), along with related clarifications and improvements. This pronouncement requires lessees to recognize a liability for lease obligations, which represents the discounted obligation to make future lease payments, and a corresponding right-of-use asset on the balance sheet. The guidance requires disclosure of key information about leasing arrangements that is intended to give financial statement users the ability to assess the amount, timing, and potential uncertainty of cash flows related to leases. The Company elected the optional transition method to apply the standard as of the effective date and therefore, prior period amounts have not been adjusted and continue to be reported in accordance with our historical accounting under previous lease guidance, ASC Topic 840: Leases (Topic 840). The adoption of Topic 842 had a material impact on the balance sheets and an immaterial impact on the statements of operations, statements of equity and statements of cash flows. The practical expedients were as follows: Practical expedients The Company has not reassessed whether any expired or existing contracts are, or contain, leases. The Company has not reassessed the lease classification for any expired or existing leases. The Company has not reassessed initial direct costs for any expired or existing leases. Hindsight Practical Expedient The Company has elected the hindsight practical expedient, which permits the use of hindsight when determining lease term and impairment of operating lease assets. The impact on the balance sheet is as follows: August 31, 2019 Adjustments Due to the Adoption of Topic 842 September 1, 2019 (amounts in thousands) Assets Current assets: Cash and cash equivalents $ 38,044 $ — $ 38,044 Accounts receivable 948 — 948 Inventories 539 — 539 Due from affiliate 226 — 226 Prepaid expenses and other current assets (1) 1,744 (54 ) 1,690 Total current assets 41,501 (54 ) 41,447 Non-current assets: Property and equipment - net 31,917 31,917 Operating lease right-of-use assets — 37,332 37,332 Deposits and other assets (1) 1,865 (530 ) 1,335 Deferred tax assets 1,127 — 1,127 Total assets $ 76,410 $ 36,748 $ 113,158 Liabilities and stockholders' equity Current liabilities: Accounts payable $ 3,684 $ — $ 3,684 Accrued expenses and other current liabilities (1) 1,635 (97 ) 1,538 Salaries and wages payable 1,348 — 1,348 Finance leases - current 994 — 994 Operating lease liabilities - current — 3,618 3,618 Due to affiliate 83 — 83 Sales tax payable 547 — 547 Total current liabilities 8,291 3,521 11,812 Non-current liabilities: Finance leases - non-current 2,424 — 2,424 Operating lease liabilities - non-current — 36,504 36,504 Deferred rent (1) 2,188 (2,188 ) — Tenant allowances (1) 1,089 (1,089 ) — Other liabilities 237 — 237 Total liabilities 14,229 36,748 50,977 Stockholders' equity: Common stock - Class A 7 — 7 Common stock - Class B 1 — 1 Additional paid-in capital 59,442 — 59,442 Retained earnings 2,731 — 2,731 Total stockholders' equity 62,181 — 62,181 Total liabilities and stockholders' equity $ 76,410 $ 36,748 $ 113,158 (1) Adjustment to reclassify prepaid rent, initial direct costs, deferred rent and tenant allowance to right-of-use assets for operating leases upon the adoption of Topic 842. Recently Issued Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes,” which is intended to simplify various aspects related to accounting for income taxes. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. ASU 2019-12 is effective for the Company beginning in fiscal year 2022. The Company is currently in the process of evaluating the effects of this pronouncement on its financial statements. |
Organization and Basis of Pre_3
Organization and Basis of Presentation (Tables) | 9 Months Ended |
May 31, 2020 | |
Accounting Standards Update 2016-02 | |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |
Schedule of Impact on the Balance Sheet | The impact on the balance sheet is as follows: August 31, 2019 Adjustments Due to the Adoption of Topic 842 September 1, 2019 (amounts in thousands) Assets Current assets: Cash and cash equivalents $ 38,044 $ — $ 38,044 Accounts receivable 948 — 948 Inventories 539 — 539 Due from affiliate 226 — 226 Prepaid expenses and other current assets (1) 1,744 (54 ) 1,690 Total current assets 41,501 (54 ) 41,447 Non-current assets: Property and equipment - net 31,917 31,917 Operating lease right-of-use assets — 37,332 37,332 Deposits and other assets (1) 1,865 (530 ) 1,335 Deferred tax assets 1,127 — 1,127 Total assets $ 76,410 $ 36,748 $ 113,158 Liabilities and stockholders' equity Current liabilities: Accounts payable $ 3,684 $ — $ 3,684 Accrued expenses and other current liabilities (1) 1,635 (97 ) 1,538 Salaries and wages payable 1,348 — 1,348 Finance leases - current 994 — 994 Operating lease liabilities - current — 3,618 3,618 Due to affiliate 83 — 83 Sales tax payable 547 — 547 Total current liabilities 8,291 3,521 11,812 Non-current liabilities: Finance leases - non-current 2,424 — 2,424 Operating lease liabilities - non-current — 36,504 36,504 Deferred rent (1) 2,188 (2,188 ) — Tenant allowances (1) 1,089 (1,089 ) — Other liabilities 237 — 237 Total liabilities 14,229 36,748 50,977 Stockholders' equity: Common stock - Class A 7 — 7 Common stock - Class B 1 — 1 Additional paid-in capital 59,442 — 59,442 Retained earnings 2,731 — 2,731 Total stockholders' equity 62,181 — 62,181 Total liabilities and stockholders' equity $ 76,410 $ 36,748 $ 113,158 (1) Adjustment to reclassify prepaid rent, initial direct costs, deferred rent and tenant allowance to right-of-use assets for operating leases upon the adoption of Topic 842. |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 9 Months Ended |
May 31, 2020 | |
Property Plant And Equipment Net [Abstract] | |
Schedule of Accounts Receivable | Accounts Receivable May 31, August 31, 2020 2019 (amounts in thousands) Tenant allowance receivable $ 548 $ 215 Credit card receivable 112 733 Total accounts receivable $ 660 $ 948 |
Schedule of Property and Equipment, Net | Property and Equipment, net May 31, August 31, 2020 2019 (amounts in thousands) Leasehold improvements $ 27,952 $ 24,926 Lease assets 6,133 6,037 Furniture and fixtures 7,450 5,600 Computer equipment 687 599 Vehicles 88 75 Software 634 428 Construction in progress 7,083 1,127 Property and equipment, gross 50,027 38,792 Less: accumulated depreciation and amortization (9,090 ) (6,875 ) Total property and equipment - net $ 40,937 $ 31,917 |
Schedule of Deposits and Other Assets | Deposits and Other Assets May 31, August 31, 2020 2019 (amounts in thousands) Liquor license $ 696 $ 638 Initial direct costs — 530 Security deposits 805 697 Total deposits and other assets $ 1,501 $ 1,865 |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets May 31, August 31, 2020 2019 (amounts in thousands) Prepaid expenses $ 976 $ 1,293 Other current assets $ 373 $ 451 Employee retention credit 1,580 - Total prepaid expenses and other current assets $ 2,929 $ 1,744 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
May 31, 2020 | |
Leases [Abstract] | |
Summary of Lease Related Costs | Lease related costs recognized in the statements of operations for the three and nine months ended May 31, 2020 Three Months Ended Nine Months Ended May 31, 2020 May 31, 2020 (amounts in thousands) Finance lease cost Classification Amortization of right-of-use assets Depreciation and amortization expense $ 141 $ 419 Interest on lease liabilities Interest expense 30 95 Total finance lease cost $ 171 $ 514 Three Months Ended Nine Months Ended May 31, 2020 May 31, 2020 (amounts in thousands) Operating lease cost Classification Operating lease cost Occupancy and related expenses, other costs and general and administrative expenses $ 1,244 $ 3,688 Variable lease cost Occupancy and related expenses, and general and administrative expenses 223 923 Total operating lease cost $ 1,467 $ 4,611 |
Summary of Supplemental Balance Sheet Information | Supplemental balance sheet information related to leases was as follows: Operating Leases May 31, 2020 (amounts in thousands) Right-of-use assets $ 50,362 Lease liabilities - current 4,656 Lease liabilities - non-current 49,658 Total lease liabilities $ 54,314 Finance Lease Assets, net May 31, 2020 (amounts in thousands) Property and equipment $ 6,133 Accumulated depreciation (2,044 ) Total property and equipment - net $ 4,089 Finance Leases Liabilities May 31, 2020 (amounts in thousands) Finance lease - current $ 1,007 Finance lease - non-current 1,729 Total finance lease liabilities $ 2,736 May 31, 2020 Weighted Average Remaining Lease Term (Years) Operating leases 15.1 Finance leases 2.6 Weighted Average Discount Rate Operating leases 5.8 % Finance leases 4.5 % |
Summary of Supplemental Disclosures of Cash Flow Information Related to Leases | Supplemental disclosures of cash flow information related to leases were as follows: Nine Months Ended May 31, 2020 (amounts in thousands) Operating cash flows paid for operating lease liabilities $ 2,644 Operating right-of-use assets obtained in exchange for new operating lease liabilities $ 15,074 |
Summary of Maturities of Lease Liabilities | Maturities of lease liabilities were as follows as of May 31, 2020: Operating Leases Finance Leases (amounts in thousands) Remainder of 2020 $ 1,189 $ 272 2021 4,763 1,107 2022 4,806 1,004 2023 4,804 483 2024 4,954 17 Thereafter 64,908 2 Total lease payments 85,424 2,885 Less: imputed interest (31,110 ) (149 ) Present value of lease liabilities $ 54,314 $ 2,736 |
Summary of Future Minimum Lease Payments for Operating Lease and Capital Leases | As previously disclosed in our fiscal year 2019 Annual Report on Form 10-K and under the previous lease accounting, maturities of lease liabilities were as follows as of August 31, 2019: Operating Lease Payments Capital Lease Payments (amounts in thousands) 2020 $ 4,256 $ 1,113 2021 4,435 1,075 2022 4,477 972 2023 4,465 476 2024 4,607 13 Thereafter 58,714 — Total $ 80,954 $ 3,649 Less interest (231 ) Total capital lease obligation 3,418 Less current portion of capital lease obligation (994 ) Non-current portion of capital lease obligation $ 2,424 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
May 31, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions Due to and from Affiliates | Balances with Kura Japan as of May 31, 2020 and August 31, 2019 are as follows: May 31, August 31, 2020 2019 (amounts in thousands) Due from affiliate $ 5 $ 226 Due to affiliate 123 83 |
Schedule of Related Party Transactions | Transactions with Kura Japan for the three months ended May 31, 2020 and May 31, 2019 and for the nine months ended May 31, 2020 and May 31, 2019 are as follows: Three Months Ended May 31, Nine Months Ended May 31, 2020 2019 2020 2019 (amounts in thousands) Related party transactions: Purchases of administrative supplies $ 8 $ 1 $ 31 $ 10 Expatriate salaries expense 34 32 106 84 Royalty payments 14 84 198 227 Travel and other administrative expenses 23 30 73 67 Purchases of equipment 200 104 833 549 Total related party transactions $ 279 $ 251 $ 1,241 $ 937 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 9 Months Ended |
May 31, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Activity under Stock Incentive Plan | Activity under the Stock Incentive Plan is as follows: Options Outstanding Number of shares underlying outstanding options Weighted Average Exercise Price Per Share Outstanding—August 31, 2019 405,302 $ 4.46 Options granted 157,539 21.85 Options exercised (6,814 ) 4.26 Options canceled/forfeited (6,641 ) 11.35 Outstanding—May 31, 2020 549,386 $ 9.37 |
Summary of Stock Based Compensation Expense Recognized under Stock Incentive Plan | The total stock-based compensation expense recognized under the Stock Incentive Plan in the statements of operations is as follows: Three Months Ended May 31, Nine Months Ended May 31, 2020 2019 2020 2019 (amounts in thousands) Restaurant-level stock-based compensation included in other costs $ 23 $ 17 $ 59 $ 62 Corporate-level stock-based compensation included in general and administrative expenses 225 138 521 414 Total stock-based compensation $ 248 $ 155 $ 580 $ 476 |
Income (Loss) Per Share (Tables
Income (Loss) Per Share (Tables) | 9 Months Ended |
May 31, 2020 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Net Loss Per Share | 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, 2020 2019 2020 2019 Class A Class B Class A Class B Class A Class B Class A Class B (amounts in thousands, except per share data) Net income (loss) attributable to common stockholders - basic $ (8,055 ) $ (1,097 ) $ 575 $ 144 $ (9,248 ) $ (1,261 ) $ 432 $ 108 Weighted average common shares outstanding - basic 7,341 1,000 4,000 1,000 7,337 1,000 4,000 1,000 Net income (loss) per share attributable to common stockholders - basic $ (1.10 ) $ (1.10 ) $ 0.14 $ 0.14 $ (1.26 ) $ (1.26 ) $ 0.11 $ 0.11 Net income (loss) attributable to common stockholders - diluted $ (8,055 ) $ (1,097 ) $ 580 $ 139 $ (9,248 ) $ (1,261 ) $ 435 $ 105 Weighted average shares outstanding - basic 7,341 1,000 4,000 1,000 7,337 1,000 4,000 1,000 Options to purchase common stock — — 171 — — — 151 — Weighted average shares outstanding - diluted 7,341 1,000 4,171 1,000 7,337 1,000 4,151 1,000 Net income (loss) per share attributable to common stockholders - diluted $ (1.10 ) $ (1.10 ) $ 0.14 $ 0.14 $ (1.26 ) $ (1.26 ) $ 0.10 $ 0.10 |
Organization and Basis of Pre_4
Organization and Basis of Presentation - Additional Information (Details) | Jul. 14, 2020Restaurant | Apr. 10, 2020USD ($) | Mar. 18, 2020RestaurantState | May 31, 2020USD ($)Restaurant | May 31, 2020USD ($)Restaurant | Apr. 14, 2020USD ($) |
Organization and Basis of Presentation [Line Items] | ||||||
Revolving credit line | $ 1,100,000 | $ 1,100,000 | ||||
Valuation allowance recorded | 1,100,000 | $ 1,100,000 | ||||
Lease, practical expedients, package | true | |||||
Lease, practical expedient, use of hindsight | true | |||||
Promissory Note with Bank of the West | PPP Loan | ||||||
Organization and Basis of Presentation [Line Items] | ||||||
Loan amount | $ 6,000,000 | |||||
COVID-19 | ||||||
Organization and Basis of Presentation [Line Items] | ||||||
Impairment of long-lived assets | $ 0 | |||||
Valuation allowance recorded | $ 1,100,000 | $ 1,100,000 | ||||
COVID-19 | Promissory Note with Bank of the West | PPP Loan | ||||||
Organization and Basis of Presentation [Line Items] | ||||||
Loan amount | $ 6,000,000 | |||||
COVID-19 | Kura Japan | ||||||
Organization and Basis of Presentation [Line Items] | ||||||
Number of restaurants temporary closure | Restaurant | 25 | |||||
Number of states, temporary closure of restaurants located | State | 5 | |||||
Number of restaurants reopened | Restaurant | 7 | 7 | ||||
Revolving credit line | $ 20,000,000 | |||||
Revolving credit line, termination date | Mar. 31, 2024 | |||||
COVID-19 | Kura Japan | Subsequent Event | ||||||
Organization and Basis of Presentation [Line Items] | ||||||
Number of restaurants reopened | Restaurant | 25 | |||||
CARES Act | ||||||
Organization and Basis of Presentation [Line Items] | ||||||
Employee retention credit | $ 1,600,000 | |||||
California | COVID-19 | Kura Japan | Subsequent Event | ||||||
Organization and Basis of Presentation [Line Items] | ||||||
Number of restaurants reopened | Restaurant | 14 | |||||
Local Government Requirements | Minimum | COVID-19 | Kura Japan | Subsequent Event | ||||||
Organization and Basis of Presentation [Line Items] | ||||||
Reduced percentage of capacities | 25.00% | |||||
Local Government Requirements | Maximum | COVID-19 | Kura Japan | Subsequent Event | ||||||
Organization and Basis of Presentation [Line Items] | ||||||
Reduced percentage of capacities | 50.00% |
Organization and Basis of Pre_5
Organization and Basis of Presentation - Schedule of Impact on the Balance Sheet (Details) - USD ($) $ in Thousands | May 31, 2020 | Feb. 29, 2020 | Nov. 30, 2019 | Sep. 01, 2019 | Aug. 31, 2019 | May 31, 2019 | Feb. 28, 2019 | Nov. 30, 2018 | Aug. 31, 2018 | |
Current assets: | ||||||||||
Cash and cash equivalents | $ 17,030 | $ 38,044 | ||||||||
Accounts receivable | 660 | 948 | ||||||||
Inventories | 407 | 539 | ||||||||
Due from affiliate | 5 | 226 | ||||||||
Prepaid expenses and other current assets | 2,929 | 1,744 | ||||||||
Total current assets | 21,031 | 41,501 | ||||||||
Non-current assets: | ||||||||||
Property and equipment - net | 40,937 | 31,917 | ||||||||
Operating lease right-of-use assets | 50,362 | |||||||||
Deposits and other assets | 1,501 | 1,865 | ||||||||
Deferred tax assets | 1,127 | |||||||||
Total assets | 113,831 | 76,410 | ||||||||
Current liabilities: | ||||||||||
Accounts payable | 2,152 | 3,684 | ||||||||
Accrued expenses and other current liabilities | 881 | 1,635 | ||||||||
Salaries and wages payable | 1,008 | 1,348 | ||||||||
Finance leases - current | 1,007 | 994 | ||||||||
Operating lease liabilities - current | 4,656 | |||||||||
Due to affiliate | 123 | 83 | ||||||||
Sales tax payable | 14 | 547 | ||||||||
Total current liabilities | 9,841 | 8,291 | ||||||||
Non-current liabilities: | ||||||||||
Finance leases - non-current | 1,729 | 2,424 | ||||||||
Operating lease liabilities - non-current | 49,658 | |||||||||
Deferred rent | 2,188 | |||||||||
Tenant allowances | 1,089 | |||||||||
Other liabilities | 321 | 237 | ||||||||
Total liabilities | 61,549 | 14,229 | ||||||||
Stockholders' equity: | ||||||||||
Additional paid-in capital | 60,052 | 59,442 | ||||||||
Retained earnings | (7,778) | 2,731 | ||||||||
Total stockholders' equity | 52,282 | $ 61,171 | $ 61,078 | 62,181 | $ 22,521 | $ 21,647 | $ 21,274 | $ 21,505 | ||
Total liabilities and stockholders' equity | 113,831 | 76,410 | ||||||||
Before Accounting Pronouncement Change | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | 38,044 | |||||||||
Accounts receivable | 948 | |||||||||
Inventories | 539 | |||||||||
Due from affiliate | 226 | |||||||||
Prepaid expenses and other current assets | [1] | 1,744 | ||||||||
Total current assets | 41,501 | |||||||||
Non-current assets: | ||||||||||
Property and equipment - net | 31,917 | |||||||||
Deposits and other assets | [1] | 1,865 | ||||||||
Deferred tax assets | 1,127 | |||||||||
Total assets | 76,410 | |||||||||
Current liabilities: | ||||||||||
Accounts payable | 3,684 | |||||||||
Accrued expenses and other current liabilities | [1] | 1,635 | ||||||||
Salaries and wages payable | 1,348 | |||||||||
Finance leases - current | 994 | |||||||||
Due to affiliate | 83 | |||||||||
Sales tax payable | 547 | |||||||||
Total current liabilities | 8,291 | |||||||||
Non-current liabilities: | ||||||||||
Finance leases - non-current | 2,424 | |||||||||
Deferred rent | [1] | 2,188 | ||||||||
Tenant allowances | [1] | 1,089 | ||||||||
Other liabilities | 237 | |||||||||
Total liabilities | 14,229 | |||||||||
Stockholders' equity: | ||||||||||
Additional paid-in capital | 59,442 | |||||||||
Retained earnings | 2,731 | |||||||||
Total stockholders' equity | 62,181 | |||||||||
Total liabilities and stockholders' equity | 76,410 | |||||||||
Accounting Standards Update 2016-02 | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | $ 38,044 | |||||||||
Accounts receivable | 948 | |||||||||
Inventories | 539 | |||||||||
Due from affiliate | 226 | |||||||||
Prepaid expenses and other current assets | [1] | 1,690 | ||||||||
Total current assets | 41,447 | |||||||||
Non-current assets: | ||||||||||
Property and equipment - net | 31,917 | |||||||||
Operating lease right-of-use assets | 37,332 | |||||||||
Deposits and other assets | [1] | 1,335 | ||||||||
Deferred tax assets | 1,127 | |||||||||
Total assets | 113,158 | |||||||||
Current liabilities: | ||||||||||
Accounts payable | 3,684 | |||||||||
Accrued expenses and other current liabilities | [1] | 1,538 | ||||||||
Salaries and wages payable | 1,348 | |||||||||
Finance leases - current | 994 | |||||||||
Operating lease liabilities - current | 3,618 | |||||||||
Due to affiliate | 83 | |||||||||
Sales tax payable | 547 | |||||||||
Total current liabilities | 11,812 | |||||||||
Non-current liabilities: | ||||||||||
Finance leases - non-current | 2,424 | |||||||||
Operating lease liabilities - non-current | 36,504 | |||||||||
Other liabilities | 237 | |||||||||
Total liabilities | 50,977 | |||||||||
Stockholders' equity: | ||||||||||
Additional paid-in capital | 59,442 | |||||||||
Retained earnings | 2,731 | |||||||||
Total stockholders' equity | 62,181 | |||||||||
Total liabilities and stockholders' equity | 113,158 | |||||||||
Accounting Standards Update 2016-02 | Restatement Adjustment | ||||||||||
Current assets: | ||||||||||
Prepaid expenses and other current assets | [1] | (54) | ||||||||
Total current assets | (54) | |||||||||
Non-current assets: | ||||||||||
Operating lease right-of-use assets | 37,332 | |||||||||
Deposits and other assets | [1] | (530) | ||||||||
Total assets | 36,748 | |||||||||
Current liabilities: | ||||||||||
Accrued expenses and other current liabilities | [1] | (97) | ||||||||
Operating lease liabilities - current | 3,618 | |||||||||
Total current liabilities | 3,521 | |||||||||
Non-current liabilities: | ||||||||||
Operating lease liabilities - non-current | 36,504 | |||||||||
Deferred rent | [1] | (2,188) | ||||||||
Tenant allowances | [1] | (1,089) | ||||||||
Total liabilities | 36,748 | |||||||||
Stockholders' equity: | ||||||||||
Total liabilities and stockholders' equity | 36,748 | |||||||||
Class A | ||||||||||
Stockholders' equity: | ||||||||||
Common stock | 7 | 7 | ||||||||
Class A | Before Accounting Pronouncement Change | ||||||||||
Stockholders' equity: | ||||||||||
Common stock | 7 | |||||||||
Class A | Accounting Standards Update 2016-02 | ||||||||||
Stockholders' equity: | ||||||||||
Common stock | 7 | |||||||||
Class B | ||||||||||
Stockholders' equity: | ||||||||||
Common stock | $ 1 | 1 | ||||||||
Class B | Before Accounting Pronouncement Change | ||||||||||
Stockholders' equity: | ||||||||||
Common stock | $ 1 | |||||||||
Class B | Accounting Standards Update 2016-02 | ||||||||||
Stockholders' equity: | ||||||||||
Common stock | $ 1 | |||||||||
[1] | Adjustment to reclassify prepaid rent, initial direct costs, deferred rent and tenant allowance to right-of-use assets for operating leases upon the adoption of Topic 842. |
Balance Sheet Components - Sche
Balance Sheet Components - Schedule of Accounts Receivable (Details) - USD ($) $ in Thousands | May 31, 2020 | Aug. 31, 2019 |
Receivables Net Current [Line Items] | ||
Accounts receivable | $ 660 | $ 948 |
Tenant Allowance Receivable | ||
Receivables Net Current [Line Items] | ||
Accounts receivable | 548 | 215 |
Credit Card Receivable | ||
Receivables Net Current [Line Items] | ||
Accounts receivable | $ 112 | $ 733 |
Balance Sheet Components - Sc_2
Balance Sheet Components - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands | May 31, 2020 | Aug. 31, 2019 |
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 50,027 | $ 38,792 |
Less: accumulated depreciation and amortization | (9,090) | (6,875) |
Total property and equipment - net | 40,937 | 31,917 |
Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 27,952 | 24,926 |
Lease Assets | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 6,133 | 6,037 |
Furniture and Fixtures | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 7,450 | 5,600 |
Computer Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 687 | 599 |
Vehicles | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 88 | 75 |
Software | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 634 | 428 |
Construction in Progress | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 7,083 | $ 1,127 |
Balance Sheet Components - Addi
Balance Sheet Components - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 31, 2020 | May 31, 2019 | May 31, 2020 | May 31, 2019 | |
Property Plant And Equipment Net [Abstract] | ||||
Depreciation and amortization expenses | $ 800 | $ 500 | $ 2,215 | $ 1,537 |
Balance Sheet Components - Sc_3
Balance Sheet Components - Schedule of Deposits and Other Assets (Details) - USD ($) $ in Thousands | May 31, 2020 | Aug. 31, 2019 |
Deposits And Other Assets [Line Items] | ||
Total deposits and other assets | $ 1,501 | $ 1,865 |
Liquor License | ||
Deposits And Other Assets [Line Items] | ||
Total deposits and other assets | 696 | 638 |
Initial Direct Costs | ||
Deposits And Other Assets [Line Items] | ||
Total deposits and other assets | 530 | |
Security Deposits | ||
Deposits And Other Assets [Line Items] | ||
Total deposits and other assets | $ 805 | $ 697 |
Balance Sheet Components - Sc_4
Balance Sheet Components - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | May 31, 2020 | Aug. 31, 2019 |
Prepaid Expense And Other Assets Current [Abstract] | ||
Prepaid expenses | $ 976 | $ 1,293 |
Other current assets | 373 | 451 |
Employee retention credit | 1,580 | |
Total prepaid expenses and other current assets | $ 2,929 | $ 1,744 |
Leases - Additional Information
Leases - Additional Information (Details) | Jun. 01, 2020USD ($)Lease | May 31, 2020USD ($) |
Lessee Lease Description [Line Items] | ||
Operating and finance leases, remaining lease start range terms description | less than 1 year | |
Outstanding borrowings | $ 0 | |
Operating leases not yet commenced, liability | $ 18,000,000 | |
Operating leases not yet commenced, lease term | 20 years | |
Option to extend, existence, leases not yet commenced, operating lease | true | |
Option to extend, description, leases not yet commenced, operating lease | In addition, the Company has options to extend the lease terms by five years and 10 years, respectively. | |
Subsequent Event | ||
Lessee Lease Description [Line Items] | ||
Operating leases not yet commenced, liability | $ 4,100,000 | |
Number of operating leases | Lease | 2 | |
Office Space | ||
Lessee Lease Description [Line Items] | ||
Option to extend, lease term, leases not yet commenced, operating lease | 5 years | |
Office Space | Subsequent Event | ||
Lessee Lease Description [Line Items] | ||
Operating leases not yet commenced, lease term | 5 years | |
Restaurant Space | ||
Lessee Lease Description [Line Items] | ||
Option to extend, lease term, leases not yet commenced, operating lease | 10 years | |
Restaurant Space | Subsequent Event | ||
Lessee Lease Description [Line Items] | ||
Operating leases not yet commenced, lease term | 10 years | |
Maximum | ||
Lessee Lease Description [Line Items] | ||
Operating and finance leases, remaining lease terms | 20 years |
Leases - Summary of Lease Relat
Leases - Summary of Lease Related Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
May 31, 2020 | May 31, 2020 | |
Finance lease cost | ||
Amortization of right-of-use assets | $ 141 | $ 419 |
Interest on lease liabilities | 30 | 95 |
Total finance lease cost | 171 | 514 |
Operating lease cost | ||
Operating lease cost | 1,244 | 3,688 |
Variable lease cost | 223 | 923 |
Total operating lease cost | $ 1,467 | $ 4,611 |
Leases - Summary of Operating L
Leases - Summary of Operating Leases (Details) $ in Thousands | May 31, 2020USD ($) |
Leases [Abstract] | |
Right-of-use assets | $ 50,362 |
Lease liabilities - current | 4,656 |
Lease liabilities - non-current | 49,658 |
Total lease liabilities | $ 54,314 |
Leases - Summary of Finance Lea
Leases - Summary of Finance Lease Assets, Net (Details) - USD ($) $ in Thousands | May 31, 2020 | Aug. 31, 2019 |
Lessee Lease Description [Line Items] | ||
Property and equipment, gross | $ 50,027 | $ 38,792 |
Less: accumulated depreciation and amortization | (9,090) | (6,875) |
Total property and equipment - net | 40,937 | $ 31,917 |
Finance Lease Assets | ||
Lessee Lease Description [Line Items] | ||
Property and equipment, gross | 6,133 | |
Less: accumulated depreciation and amortization | (2,044) | |
Total property and equipment - net | $ 4,089 |
Leases - Summary of Finance L_2
Leases - Summary of Finance Leases Liabilities (Details) - USD ($) $ in Thousands | May 31, 2020 | Aug. 31, 2019 |
Leases [Abstract] | ||
Finance lease - current | $ 1,007 | $ 994 |
Finance lease - non-current | 1,729 | $ 2,424 |
Total finance lease liabilities | $ 2,736 |
Leases - Summary of Weighted Av
Leases - Summary of Weighted Average Remaining Lease Term and Weighted Average Discount Rate (Details) | May 31, 2020 |
Weighted Average Remaining Lease Term (Years) | |
Operating leases | 15 years 1 month 6 days |
Finance leases | 2 years 7 months 6 days |
Weighted Average Discount Rate | |
Operating leases | 5.80% |
Finance leases | 4.50% |
Leases - Summary of Supplementa
Leases - Summary of Supplemental Disclosures of Cash Flow Information Related to Leases (Details) $ in Thousands | 9 Months Ended |
May 31, 2020USD ($) | |
Leases [Abstract] | |
Operating cash flows paid for operating lease liabilities | $ 2,644 |
Operating right-of-use assets obtained in exchange for new operating lease liabilities | $ 15,074 |
Leases - Summary of Maturities
Leases - Summary of Maturities of Lease Liabilities (Details) $ in Thousands | May 31, 2020USD ($) |
Operating Leases | |
Remainder of 2020 | $ 1,189 |
2021 | 4,763 |
2022 | 4,806 |
2023 | 4,804 |
2024 | 4,954 |
Thereafter | 64,908 |
Total lease payments | 85,424 |
Less: imputed interest | (31,110) |
Present value of lease liabilities | 54,314 |
Finance Leases | |
Remainder of 2020 | 272 |
2021 | 1,107 |
2022 | 1,004 |
2023 | 483 |
2024 | 17 |
Thereafter | 2 |
Total lease payments | 2,885 |
Less: imputed interest | (149) |
Present value of lease liabilities | $ 2,736 |
Leases - Summary of Future Mini
Leases - Summary of Future Minimum Lease Payments for Operating Lease and Capital Leases (Details) $ in Thousands | Aug. 31, 2019USD ($) |
Operating Lease Payments | |
2020 | $ 4,256 |
2021 | 4,435 |
2022 | 4,477 |
2023 | 4,465 |
2024 | 4,607 |
Thereafter | 58,714 |
Total | 80,954 |
Capital Lease Payments | |
2020 | 1,113 |
2021 | 1,075 |
2022 | 972 |
2023 | 476 |
2024 | 13 |
Total | 3,649 |
Less interest | (231) |
Total capital lease obligation | 3,418 |
Less current portion of capital lease obligation | (994) |
Non-current portion of capital lease obligation | $ 2,424 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - Kura Japan - USD ($) $ in Millions | Apr. 10, 2020 | Aug. 31, 2019 | May 31, 2020 |
COVID-19 | |||
Related Party Transaction [Line Items] | |||
Revolving credit line, termination date | Mar. 31, 2024 | ||
Revolving Credit Facility Agreement | |||
Related Party Transaction [Line Items] | |||
Revolving credit line, termination date | Mar. 31, 2024 | ||
Revolving credit line, maturity date description | The maturity date for amounts borrowed under the Revolving Credit Agreement is twelve months after the disbursement date, unless renewed or extended by mutual agreement of both parties for an additional twelve months. | ||
Revolving Credit Facility Agreement | COVID-19 | |||
Related Party Transaction [Line Items] | |||
Revolving credit line | $ 20 | ||
Revolving credit line, termination date | Mar. 31, 2024 | ||
Revolving credit line, maturity date description | The maturity date for amounts borrowed under the Revolving Credit Agreement is twelve months after the disbursement date, unless renewed or extended by mutual agreement of both parties for an additional twelve months. | ||
Amended and Restated Exclusive License Agreement | |||
Related Party Transaction [Line Items] | |||
Royalty fee of net sales | 0.50% |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Related Party Transactions Due to and from Affiliates (Details) - USD ($) $ in Thousands | May 31, 2020 | Aug. 31, 2019 |
Related Party Transaction [Line Items] | ||
Due from affiliate | $ 5 | $ 226 |
Due to affiliate | 123 | 83 |
Kura Japan | ||
Related Party Transaction [Line Items] | ||
Due from affiliate | 5 | 226 |
Due to affiliate | $ 123 | $ 83 |
Related Party Transactions - _2
Related Party Transactions - Schedule of Related Party Transactions (Details) - Kura Japan - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 31, 2020 | May 31, 2019 | May 31, 2020 | May 31, 2019 | |
Related Party Transaction [Line Items] | ||||
Total related party transactions | $ 279 | $ 251 | $ 1,241 | $ 937 |
Purchases of Administrative Supplies | ||||
Related Party Transaction [Line Items] | ||||
Total related party transactions | 8 | 1 | 31 | 10 |
Expatriate Salaries Expense | ||||
Related Party Transaction [Line Items] | ||||
Total related party transactions | 34 | 32 | 106 | 84 |
Royalty Payments | ||||
Related Party Transaction [Line Items] | ||||
Total related party transactions | 14 | 84 | 198 | 227 |
Travel and Other Administrative Expenses | ||||
Related Party Transaction [Line Items] | ||||
Total related party transactions | 23 | 30 | 73 | 67 |
Purchases of Equipment | ||||
Related Party Transaction [Line Items] | ||||
Total related party transactions | $ 200 | $ 104 | $ 833 | $ 549 |
Stock-based Compensation - Summ
Stock-based Compensation - Summary of Activity under Stock Incentive Plan (Details) - Stock Incentive Plan | 9 Months Ended |
May 31, 2020$ / sharesshares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Options Outstanding, Number of shares underlying outstanding options, Beginning balance | shares | 405,302 |
Options Outstanding, Number of shares underlying outstanding options, Options granted | shares | 157,539 |
Options Outstanding, Number of shares underlying outstanding options, Options exercised | shares | (6,814) |
Options Outstanding, Number of shares underlying outstanding options, Options canceled/forfeited | shares | (6,641) |
Options Outstanding, Number of shares underlying outstanding options, Ending balance | shares | 549,386 |
Options Outstanding, Weighted Average Exercise Price Per Share, Beginning balance | $ / shares | $ 4.46 |
Options Outstanding, Weighted Average Exercise Price Per Share, Options granted | $ / shares | 21.85 |
Options Outstanding, Weighted Average Exercise Price Per Share, Options exercised | $ / shares | 4.26 |
Options Outstanding, Weighted Average Exercise Price Per Share, Options canceled/forfeited | $ / shares | 11.35 |
Options Outstanding, Weighted Average Exercise Price Per Share, Ending balance | $ / shares | $ 9.37 |
Stock-based Compensation - Addi
Stock-based Compensation - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 31, 2020 | May 31, 2019 | May 31, 2020 | May 31, 2019 | |
Stock Incentive Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 248 | $ 155 | $ 580 | $ 476 |
Stock-based Compensation - Su_2
Stock-based Compensation - Summary of Stock Based Compensation Expense Recognized under Stock Incentive Plan (Details) - Stock Incentive Plan - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 31, 2020 | May 31, 2019 | May 31, 2020 | May 31, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Total stock-based compensation | $ 248 | $ 155 | $ 580 | $ 476 |
Restaurant-level Stock-based Compensation Included In Other Costs | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Total stock-based compensation | 23 | 17 | 59 | 62 |
Corporate-level Stock-based Compensation Included In General and Administrative Expenses | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Total stock-based compensation | $ 225 | $ 138 | $ 521 | $ 414 |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) | Apr. 10, 2020 | Jan. 31, 2019 | May 31, 2020 | Apr. 14, 2020 |
Debt Instrument [Line Items] | ||||
Credit facility maximum borrowing capacity | $ 5,000,000 | |||
Credit facility maturity date | Jul. 31, 2020 | |||
Revolving credit line | $ 0 | |||
Available under the Credit Facility | $ 1,100,000 | |||
Revolving Credit Facility Agreement | Kura Japan | ||||
Debt Instrument [Line Items] | ||||
Revolving credit line | $ 20,000,000 | |||
Revolving credit line, termination date | Mar. 31, 2024 | |||
Revolving credit line, maturity date description | The maturity date for amounts borrowed under the Revolving Credit Agreement is twelve months after the disbursement date, unless renewed or extended by mutual agreement of both parties for an additional twelve months. | |||
Promissory Note with Bank of the West | PPP Loan | ||||
Debt Instrument [Line Items] | ||||
Loan amount | $ 6,000,000 | |||
Prime Rate | ||||
Debt Instrument [Line Items] | ||||
Credit facility agreement, interest rate | 0.50% | |||
Credit facility agreement, interest rate description | the prime lending rate of the lender less one-half of one percent (0.5%) | |||
LIBOR | ||||
Debt Instrument [Line Items] | ||||
Credit facility agreement, interest rate | 1.50% | |||
Credit facility agreement, interest rate description | one-month LIBOR plus one and one-half percent (1.5%) | |||
Minimum | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | $ 300,000 | |||
Debt instrument conversion period | 30 days | |||
Maximum | ||||
Debt Instrument [Line Items] | ||||
Debt instrument maturity term | 36 months |
Income (Loss) Per Share - Compu
Income (Loss) Per Share - Computation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 31, 2020 | May 31, 2019 | May 31, 2020 | May 31, 2019 | |
Earnings Per Share Diluted [Line Items] | ||||
Weighted average common shares outstanding - basic | 8,341 | 5,000 | 8,337 | 5,000 |
Net income (loss) per share attributable to common stockholders - basic | $ (1.10) | $ 0.14 | $ (1.26) | $ 0.11 |
Weighted average shares outstanding - diluted | 8,341 | 5,171 | 8,337 | 5,151 |
Net income (loss) per share attributable to common stockholders - diluted | $ (1.10) | $ 0.14 | $ (1.26) | $ 0.10 |
Class A | ||||
Earnings Per Share Diluted [Line Items] | ||||
Net income (loss) attributable to common stockholders - basic | $ (8,055) | $ 575 | $ (9,248) | $ 432 |
Weighted average common shares outstanding - basic | 7,341,000 | 4,000,000 | 7,337,000 | 4,000,000 |
Net income (loss) per share attributable to common stockholders - basic | $ (1.10) | $ 0.14 | $ (1.26) | $ 0.11 |
Net income (loss) attributable to common stockholders - diluted | $ (8,055) | $ 580 | $ (9,248) | $ 435 |
Options to purchase common stock | 171,000 | 151,000 | ||
Weighted average shares outstanding - diluted | 7,341,000 | 4,171,000 | 7,337,000 | 4,151,000 |
Net income (loss) per share attributable to common stockholders - diluted | $ (1.10) | $ 0.14 | $ (1.26) | $ 0.10 |
Class B | ||||
Earnings Per Share Diluted [Line Items] | ||||
Net income (loss) attributable to common stockholders - basic | $ (1,097) | $ 144 | $ (1,261) | $ 108 |
Weighted average common shares outstanding - basic | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 |
Net income (loss) per share attributable to common stockholders - basic | $ (1.10) | $ 0.14 | $ (1.26) | $ 0.11 |
Net income (loss) attributable to common stockholders - diluted | $ (1,097) | $ 139 | $ (1,261) | $ 105 |
Weighted average shares outstanding - diluted | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 |
Net income (loss) per share attributable to common stockholders - diluted | $ (1.10) | $ 0.14 | $ (1.26) | $ 0.10 |
Income (Loss) Per Share - Addit
Income (Loss) Per Share - Additional Information (Details) - shares | 3 Months Ended | 9 Months Ended | ||
May 31, 2020 | May 31, 2019 | May 31, 2020 | May 31, 2019 | |
Employee Stock Option | ||||
Earnings Per Share [Line Items] | ||||
Potentially dilutive shares that were excluded from the calculation of diluted loss per share | 21,000 | 0 | 137,000 | 0 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 31, 2020 | May 31, 2019 | May 31, 2020 | May 31, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ 1,153 | $ 71 | $ 1,179 | $ 41 |
Federal statutory tax rate | 21.00% | |||
Deferred tax assets, valuation allowance | $ 1,100 | $ 1,100 |