KURA SUSHI USA, INC. Stock Compensation Disclosure

Note 6—Stock-based Compensation

The Company has a 2018 Incentive Compensation Plan (the “Stock Incentive Plan”), as amended. Under the Stock Incentive Plan, the Company may grant stock options, stock appreciation rights, restricted stock, restricted stock units, performance restricted stock units and performance awards in the form of shares and cash. Stock options granted under the Stock Incentive Plan include both incentive stock options and non-qualified stock options. The Stock Incentive Plan authorizes 1,350,000 shares to be granted.

The total intrinsic value of stock options exercised during fiscal year 2025 was $2.6 million.

The total fair value of options vested was $3.2 million, $3.7 million, and $3.1 million for the fiscal years ended August 31, 2025, August 31, 2024, and August 31, 2023, respectively. As of August 31, 2025, unrecognized stock-based compensation of $6.0 million related to unvested stock options is expected to be recognized on a straight-line basis over a weighted average period of 1.4 years.

The total fair value of RSUs vested was $1.1 million and $0.9 million for the fiscal years ended August 31, 2025 and August 31, 2024, respectively. No RSUs vested during the fiscal year ended August 31, 2023. As of August 31, 2025, unrecognized stock-based compensation of $3.8 million related to unvested RSUs is expected to be recognized on a straight-line basis over a weighted average period of 1.9 years.

In the second quarter of fiscal 2025, the Company granted 8,724 performance restricted stock units (“PSUs”) with a three-year performance vesting period and a weighted average grant date fair value of $80.00. No PSUs vested during the fiscal year ended August 31, 2025. As of August 31, 2025, unrecognized stock-based compensation of $0.6 million related to unvested PSUs is expected to be recognized on a straight-line basis over a weighted average period of 2.4 years.

Stock-based Compensation Expense

Stock-based compensation for restaurant-level employees is included in labor and related costs and stock-based compensation for corporate-level employees is included in general and administrative expenses in the statements of operations and comprehensive income (loss). The total stock-based compensation recognized under the Stock Incentive Plan in the statements of operations and comprehensive income (loss) is as follows:

Expected Term - The expected term represents the period that the Company’s stock-based awards are expected to be outstanding. For option grants that are considered to be “plain vanilla,” the Company determines the expected term using the simplified method. The simplified method deems the term to be the average of the time-to-vesting and the contractual life of the options.

Expected Volatility - Since the Company does not have a trading history of its common stock equivalent to the expected term of the stock option grants, the expected volatility is derived from the average historical stock volatilities of several unrelated public companies within the Company’s industry that the Company considers to be comparable to its business over a period equivalent to the expected term of the stock option grants.

Risk-Free Interest Rate - The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for zero-coupon U.S. Treasury notes with maturities approximately equal to the option’s expected term.

Dividend Rate - The expected dividend is assumed to be zero as the Company has never paid dividends and has no current plans to do so.

Fair Value of Common Stock - The fair value of common stock is based on the closing price of the Company’s common stock, as reported on The Nasdaq Stock Market LLC.