Lucky Strike Entertainment Corporation

08/28/2025 | Press release | Distributed by Public on 08/28/2025 05:36

Annual Report for Fiscal Year Ending June 29, 2025 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations
This discussion should be read in conjunction with Lucky Strike Entertainment Corporation's audited consolidated financial statements and notes included herein. This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those described under the heading "Risk Factors." Actual results may differ materially from those contained in any forward-looking statements. All period references are to our fiscal periods unless otherwise indicated. Unless the context otherwise requires, references in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" to "we," "us," "our," the "Company," and "Lucky Strike" are intended to mean the business and operations of Lucky Strike Entertainment Corporation and its consolidated subsidiaries. Unless otherwise indicated, all financial information in this section is presented in thousands.
Discussion regarding our financial condition and results of operations for fiscal 2024 compared with fiscal 2023 is included in Item 7 of the Annual Report on Form 10-K for the fiscal period ended June 30, 2024.
Overview
Lucky Strike Entertainment Corporation is one of the world's premier operators of location-based entertainment. The Company operates traditional bowling locations and more upscale entertainment concepts with lounge seating, arcades, enhanced food and beverage offerings, and more robust customer service for individuals and group events, as well as hosting and overseeing professional and non-professional bowling tournaments and related broadcasting. The Company also operates other forms of location-based entertainment, such as FEC's and water parks, which include Octane Raceway, Raging Waves water park, Shipwreck Island water park, Big Kahuna's water park and Boomers Parks.
The Company remains focused on creating long-term shareholder value through continued organic growth, the conversion and upgrading of locations to more upscale entertainment concepts offering a broader range of offerings, the opening of new locations and acquisitions.
Recent Developments
Lucky Strike's results for the fiscal year ended June 29, 2025 exhibited the planned fiscal year 2025 reinvestment in the business through acquisitions, new builds, and conversions. To highlight the Company's recent activity during the fiscal year ended June 29, 2025:
•We reported total revenue growth of 4%.
•We rebranded the Company from Bowlero to Lucky Strike Entertainment.
•We completed and opened four newly-built Lucky Strike locations in prime markets.
•We completed the acquisitions of Boomers Parks (inclusive of Big Kahuna's water park), Spectrum Entertainment Complex, Adventure Park, and Shipwreck Island water park to further enhance our location-based entertainment offerings.
•We acquired 66 acres of land adjacent to Raging Waves water park for further expansion.
•Subsequent to June 29, 2025, we completed the acquisition of 58 existing properties previously under lease. We also completed the acquisition of Wet 'n Wild Emerald Pointe, Castle Park, and two additional Boomers Parks locations. Lastly, we signed a definitive agreement to acquire Raging Waters Los Angeles, which is expected to be completed in fiscal 2026.
Presentation of Results of Operations
The Company reports on a fiscal year with each quarter generally comprised of one 5-week period and two 4-week periods. Our current and prior fiscal years were fifty-two weeks and ended on June 29, 2025 ("fiscal 2025") and June 30, 2024 ("fiscal 2024"), respectively.
All amounts are presented in thousands, unless otherwise noted, except share and per share amounts.
Index to Financial Statements
Results of Operations
Fiscal Year Ended June 29, 2025 Compared To the Fiscal Year Ended June 30, 2024
Analysis of Consolidated Statement of Operations. The following table displays certain items from our consolidated statements of operations for the fiscal years ended presented below:
Fiscal Year End
June 29,
2025
%(1)
June 30,
2024
%(1)
Change % Change
Revenues
Bowling $ 549,895 46 % $ 557,962 48 % $ (8,067) (1) %
Food & beverage 424,214 35 % 401,383 35 % 22,831 6 %
Amusement & other 227,224 19 % 195,269 17 % 31,955 16 %
Total revenues 1,201,333 100 % 1,154,614 100 % 46,719 4 %
Costs and expenses
Location operating costs, excluding depreciation and amortization 375,573 31 % 328,551 28 % 47,022 14 %
Location payroll and benefit costs 284,131 24 % 287,206 25 % (3,075) (1) %
Location food and beverage costs 94,553 8 % 90,752 8 % 3,801 4 %
Selling, general and administrative expenses, excluding depreciation and amortization 143,173 12 % 148,007 13 % (4,834) (3) %
Depreciation and amortization 156,852 13 % 145,364 13 % 11,488 8 %
Loss on impairment and disposal of fixed assets, net 10,905 1 % 61,433 5 % (50,528) (82) %
Other operating (income) expense, net (1,041) - % 1,711 - % (2,752) *
Total costs and expenses 1,064,146 89 % 1,063,024 92 % 1,122 - %
Operating income 137,187 11 % 91,590 8 % 45,597 50 %
Other (income) expenses
Interest expense, net 196,371 16 % 177,611 15 % 18,760 11 %
Change in fair value of earnout liability (101,484) (8) % 25,456 2 % (126,940) *
Other expense 817 - % 76 - % 741 *
Total other expense 95,704 8 % 203,143 18 % (107,439) (53) %
Income (loss) before income tax expense (benefit) 41,483 3 % (111,553) (10) % 153,036 *
Income tax expense (benefit) 51,505 4 % (27,972) (2) % 79,477 *
Net loss $ (10,022) (1) % $ (83,581) (7) % 73,559 *
___________
(1)Percent calculated as a percentage of revenues and may not total due to rounding.
*Represents a change equal to or in excess of 100% or one that is not meaningful.
Index to Financial Statements
Revenues: For fiscal 2025, revenues totaled $1,201,333 and represented an increase of $46,719 or 4% over the prior fiscal year. The increase in revenues is primarily attributable to revenue from newly acquired or leased locations, which was partially offset by a decline in revenues on a same-store basis.
Fiscal Year Ended
(in thousands) June 29, 2025 June 30, 2024 Change % Change
Revenues on a same-store basis (1)
$ 990,678 $ 1,029,251 $ (38,573) (3.7) %
Revenues for media, new and closed locations 208,191 119,901 88,290 73.6 %
Service fee revenue (2)
2,464 5,462 (2,998) (54.9) %
Total revenues $ 1,201,333 $ 1,154,614 $ 46,719 4.0 %
___________
(1) Revenues from 326 locations are included in the same-store comparable location base for the comparison in the above table. In our previously filed 10-K for the year ended June 30, 2024, revenues from 311 locations were included in the same-store revenue.
(2) Service fee revenue is a mandatory gratuity passed through to the employee, which is a non-contributor to earnings.
Same-store revenues includes revenues from locations that are open in periods presented (open in both the current period and the prior period being reported) and excludes revenues from locations that are not open in periods presented such as acquired new locations or locations closed for upgrades, renovations or other such reasons, as well as media revenues. The decrease in same-store revenues during fiscal 2025 was primarily attributable to a reduction in retail or walk-in and corporate event business relative to fiscal year 2024. This was partially offset by a strong consumer response to spring offerings and our summer season pass during the fourth quarter.
Location operating costs: Location operating costs primarily consist of rent, utilities, insurance, repairs & maintenance, property taxes, supplies, marketing, and other costs associated with Company locations. Location operating costs include both fixed and variable components and therefore do not directly correlate with revenue.
Location operating costs increased $47,022, or 14%. The increase includes a $20,700 non-cash impact related to an increase in self-insurance reserves during the fourth quarter of fiscal 2025. In addition, there were increases in costs in various other areas including utilities, advertising, property taxes, and rent. The increase in costs was mainly attributable to location count growth from acquisitions and lease agreements. For instance, Raging Waves water park and Boomers Parks location operating costs contributed $16,000 to the increase. The increase in costs were partially offset by cost management initiatives, which resulted in a $4,500 decrease in repairs and maintenance expense. Location operating costs as a percent of revenues increased from 28% during fiscal 2024 to 31% during fiscal 2025, mainly due to the aforementioned increase in self-insurance reserves coupled with location count growth and fixed costs.
Location payroll and benefit costs: Location payroll and benefit costs consist of employee costs that directly support location operations. Location payroll and benefit costs decreased $3,075, or 1%. The decrease in location payroll and benefit costs reflects the impact of the ongoing staffing optimization initiative. This is further illustrated by the decrease as a percent of revenues from 25% during fiscal 2024 to 24% during fiscal 2025. The decrease driven by staffing optimization was partially offset by location count growth. For instance, Raging Waves water park and Boomers Parks added $12,000 of location payroll and benefit costs.
Location food & beverage costs: Location food & beverage costs increased $3,801, or 4%. The increase in location food & beverage costs is mainly attributable to increased food & beverage revenue as compared to fiscal 2024.
Selling, general and administrative expenses ("SG&A"): SG&A expenses decreased $4,834 or 3%. The decrease is mainly attributable to a decrease in professional fees, which contributed approximately $14,300 to the decrease in SG&A expenses. This was partially offset by an increase in share-based compensation expense, which increased approximately $7,800. The increase in share-based compensation expense is primarily due to the non-recurring settlement of equity awards related to the retirement of a long-time executive of the Company, which resulted in an additional $4,809 of share-based compensation expense. The decrease in professional fees is mainly attributable to less acquisition activity as compared to the prior year and cost management initiatives at corporate. The cost management initiatives at corporate also resulted in a decrease in SG&A labor of approximately $2,000.
Depreciation and amortization: Depreciation and amortization increased $11,488 or 8%. The increase in depreciation and amortization reflects the added depreciable assets, finite-lived intangible assets, and finance leases through acquisitions and capital expenditures.
Loss on impairment and disposal of fixed assets, net: Loss on impairment and disposal of fixed assets decreased $50,528 or 82%. The decrease is mainly attributable to fiscal 2024 including the impact of the reclassification of the
Index to Financial Statements
Bowlero trade name intangible asset from indefinite lived to finite lived due to the rebranding of bowling locations. This resulted in a non-recurring impairment charge of $52,030 in fiscal 2024.
Interest expense, net: Interest expense increased $18,760, or 11%. The higher interest expense, net is primarily the result of an added financing obligation within the second quarter of fiscal 2024, the $150,000 incremental term loan obtained in the second quarter of fiscal 2025, and lower interest income as compared to fiscal 2024.
Change in fair value of earnouts: The impact on the statement of operations during fiscal 2025 is due to the decrease in the fair value of the earnouts, which mainly reflects the decrease in the Company's stock price in fiscal 2025.
Income Taxes: Income tax expense (benefit) and deferred tax assets and liabilities reflect management's assessment of the Company's tax position. The current year income tax expense was mainly driven by the increase of $65,104 for valuation allowance due to unrealizable Section 163(j) interest limitation off set by benefits for state and local income tax expenses, disallowed expenses associated with the earnout expense, S162(m) limitations and other items.
The amount of income taxes the Company pays is subject to audits by federal, state and foreign tax authorities, which often result in proposed assessments. Management performs a comprehensive review of our tax positions and accrues estimated amounts for applicable tax positions. Based on these reviews, the results of discussions and resolutions of matters with certain tax authorities and the closure of tax years subject to tax audit, liabilities for applicable tax positions are adjusted as necessary. The Company currently has open income tax audits in Mexico and in one state.
Non-GAAP measure
Adjusted EBITDA is a non-GAAP financial measure that is not in accordance with, or an alternative to, measures prepared in accordance with GAAP. The Company believes certain financial measures which meet the definition of non-GAAP financial measures provide important supplemental information. The Company considers Adjusted EBITDA as an important financial measure because it provides a financial measure of the quality of the Company's earnings. Other companies may calculate Adjusted EBITDA differently than we do, which might limit its usefulness as a comparative measure. Adjusted EBITDA is used by management in addition to and in conjunction with the results presented in accordance with GAAP. We have presented Adjusted EBITDA solely as a supplemental disclosure because we believe it allows for a more complete analysis of results of operations and assists investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance, such as Interest, Income Taxes, Depreciation and Amortization, Impairment Charges, Share-based Compensation, EBITDA from Closed Locations, Foreign Currency Exchange Loss (Gain), Asset Disposition Loss (Gain), Transactional and other advisory costs, Change in the value of earnouts, and Other. Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are that Adjusted EBITDA and trailing twelve month Adjusted EBITDA do not reflect:
•every expenditure, future requirements for capital expenditures or contractual commitments;
•changes in our working capital needs;
•the interest expense, or the amounts necessary to service interest or principal payments, on our outstanding debt;
•income tax (benefit) expense, and because the payment of taxes is part of our operations, tax expense is a necessary element of our costs and ability to operate;
•non-cash equity compensation, which will remain a key element of our overall equity based compensation package; and
•the impact of earnings or charges resulting from matters we consider not to be indicative of our ongoing operations.
Refer to notes below for additional details concerning the respective items for Adjusted EBITDA.
Index to Financial Statements
The following table provides a reconciliation from net loss to Adjusted EBITDA for the fiscal years ended June 29, 2025 and June 30, 2024:
(in thousands) June 29, 2025 June 30, 2024
Net loss
$ (10,022) $ (83,581)
Adjustments:
Interest expense 196,371 185,181
Income tax expense (benefit)
51,505 (27,972)
Depreciation and amortization 158,527 147,362
Loss on impairment, disposals, and other charges, net (1)
28,615 62,562
Share-based compensation 21,632 13,775
Closed location EBITDA (2)
3,054 9,006
Transactional and other advisory costs (3)
17,117 21,303
Changes in the value of earnouts (4)
(101,484) 25,456
Other, net (5)
2,372 8,405
Adjusted EBITDA $ 367,687 $ 361,497
Adjusted EBITDA represents Net loss before Interest, Income Taxes, Depreciation and Amortization, Impairment Charges, Share-based Compensation, EBITDA from Closed Locations, Foreign Currency Exchange Loss (Gain), Asset Disposition Loss (Gain), Transactional and other advisory costs, Changes in the value of earnouts and Other. Refer to notes below for additional details concerning the respective items for Adjusted EBITDA.
Notes to Adjusted EBITDA:
(1)For the fiscal year ended June 29, 2025 reflectsa change in estimate in our self-insurance reserves related to claims that occurred prior to the beginning of the fiscal year, which resulted in a non-cash self-insurance reserve adjustment of $17,710. Also includes non-cash expenses related to impairments, disposals, and asset write-offs.
(2)The closed location adjustment is to remove EBITDA for closed locations. Closed locations are those locations that are closed for a variety of reasons, including permanent closure, newly acquired or built locations prior to opening, locations closed for renovation or rebranding and conversion. If a location is not open on the last day of the reporting period, it will be considered closed for that reporting period. If the location is closed on the first day of the reporting period for permanent closure, the location will be considered closed for that reporting period.
(3)The adjustment for transaction costs and other advisory costs is to remove charges incurred in connection with any transaction, including mergers, acquisitions, refinancing, amendment or modification to indebtedness, dispositions and costs in connection with an initial public offering, in each case, regardless of whether consummated. Certain prior year amounts have been reclassified to conform to current year presentation.
(4)The adjustment for changes in the value of earnouts is to remove the impact of the revaluation of the earnouts. Changes in the fair value of the earnout liability is recognized in the statement of operations. Decreases in the liability will have a favorable impact on the statement of operations and increases in the liability will have an unfavorable impact.
(5)Other includes the following related to transactions that do not represent ongoing or frequently recurring activities as part of the Company's operations: (i) non-routine expenses, net of recoveries for matters outside the normal course of business, (ii) costs incurred that have been expensed associated with obtaining an equity method investment in a subsidiary of VICI, (iii) severance expense, and (iv) other individually de minimis expenses. Certain prior year amounts have been reclassified to conform to current year presentation.
Liquidity and Capital Resources
We manage our liquidity through assessing available cash-on-hand, our ability to generate cash and our ability to borrow or otherwise raise capital to fund operating, investing and financing activities.
A core tenet of our long-term strategy is to grow the size and scale of the Company in order to improve our operating profit margins through leveraging our fixed costs. As such, one of the Company's known cash requirements is for capital expenditures related to the construction of new locations and upgrading and converting existing locations. We believe our financial position, generation of cash, available cash on hand, existing credit facility, and access to potentially obtain additional financing from sale-lease-back transactions or other sources will provide sufficient capital resources to fund our operational requirements, capital expenditures, and material short and long-term commitments for the foreseeable future. We also plan to use available cash-on-hand to fund our share repurchase program, which was implemented as a method to return value to our shareholders. However, there are a number of factors that may hinder our ability to access these capital resources, including but not limited to our degree of leverage and potential borrowing restrictions imposed by our lenders. See "Risk Factors" for further information.
Index to Financial Statements
On February 8, 2023, we entered into an Eighth Amendment (the "Eighth Amendment") to the First Lien Credit Agreement. The Eighth Amendment provided for a new $900,000 term loan maturing on February 8, 2028 (the "Amendment No. 8 Term Loan"). Proceeds of the Amendment No. 8 Term Loan were used to refinance the existing First Lien Credit Facility Term Loan, to repay all amounts outstanding on the Revolver, and for general corporate purposes. The Amendment No. 8 Term Loan bore interest at a rate per annum equal to the Adjusted Term Secured Overnight Financing Rate ("SOFR") plus 3.50%.
On June 13, 2023, the Company entered into a Ninth Amendment (the "Ninth Amendment") to the First Lien Credit Agreement. The Ninth Amendment provided for an incremental term loan in the amount of $250,000 (the "Incremental Term Loan") to the Amendment No. 8 Term Loan for an aggregate principal amount of $1,150,000. Proceeds of the Incremental Term Loan were used to repay all amounts outstanding on the Revolver and for general corporate purposes. In addition, the Ninth Amendment increased the Amendment No. 8 Term Loan quarterly principal payments beginning on September 29, 2023 from $2,250 to $2,875.
On December 17, 2024, the Company entered into a Twelfth Amendment (the "Twelfth Amendment") to the First Lien Credit Agreement. The Twelfth Amendment provided for an incremental term loan in the amount of $150,000. In addition, the Twelfth Amendment increased the quarterly principal payments beginning on December 31, 2024 from $2,875 to $3,255.
On July 10, 2025, the Company entered into a Thirteenth Amendment (the "Thirteenth Amendment") to the First Lien Credit Agreement. The Thirteenth Amendment provides for a $230,000 bridge term loan. The maturity date for the bridge term loan is the date that is 364 days after July 10, 2025. The bridge term loans bears interest at a rate per annum equal to the Adjusted Term SOFR plus 2.50%, which will increase by 0.50% on each of the 90th, 180th and 270th days after July 10, 2025.
Under the First Lien Credit Agreement, we have access to a senior secured revolving credit facility (the "Revolver"). The outstanding balance on the Revolver is due on December 15, 2026. Interest on borrowings under the Revolver is based on the Adjusted Term SOFR.
In connection with the Company entering into the Eighth Amendment, the Revolver commitment was increased by $35,000 to an aggregate amount of $200,000.
In connection with the Company entering into the Ninth Amendment, the Revolver commitment was increased by $35,000 to an aggregate amount of $235,000.
On June 18, 2024, the Company entered into a Tenth Amendment to the First Lien Credit Agreement. In connection with the Company entering into the Tenth Amendment, the Revolver commitment was increased by $50,000 to an aggregate amount of $285,000.
On August 23, 2024, the Company entered into a Eleventh Amendment to the First Lien Credit Agreement. In connection with the Company entering into the Eleventh Amendment, the Revolver commitment was increased by $50,000 to an aggregate amount of $335,000.
As of June 29, 2025, $30,000 was drawn on the Revolver.
On July 16, 2025, the Company entered into a Fourteenth Amendment (the "Fourteenth Amendment") to the First Lien Credit Agreement. The Fourteenth Amendment provides for a $50,000 increase of the Revolver commitment to an aggregate amount of $385,000.
For more information on our debt, see Note 9 - Debtof the notes to consolidated financial statements of this Annual Report on Form 10-K.
At June 29, 2025, we had approximately $59,686 of available cash and cash equivalents.
Index to Financial Statements
Fiscal Year Ended June 29, 2025 Compared To the Fiscal Year Ended June 30, 2024
The following compares the primary categories of the consolidated statements of cash flows for the years ended June 29, 2025 and June 30, 2024:
Fiscal Year Ended $
Change 		%
Change
(in thousands) June 29, 2025 June 30, 2024
Net cash provided by operating activities $ 177,221 $ 154,830 $ 22,391 14 %
Net cash used in investing activities (220,311) (385,656) 165,345 43 %
Net cash provided by financing activities 35,860 102,157 (66,297) (65) %
Effect of exchange rate changes on cash (56) 8 (64) *
Net change in cash and cash equivalents $ (7,286) $ (128,661) $ 121,375 (94) %
___________
*Represents a change equal to or in excess of 100% or one that is not meaningful.
Operating activities provided $177,221 as compared to $154,830 during the prior fiscal year. The increase in cash provided by operating activities primarily reflects an increase in revenues and lease incentive receipts partially offset by higher interest expense.
Investing activities used $220,311 as compared to $385,656 during the prior fiscal year. The decrease in cash used in investing activities mainly reflects a reduction in capital expenditures and less acquisition activity as compared to the prior year. This was partially offset by the purchase of 66 acres of land adjacent to Raging Waves water park for $9,400.
Financing activities provided $35,860 as compared to $102,157 in the prior year. The decrease in cash provided by financing activities primarily reflects the proceeds from the transaction with VICI in fiscal 2024, increased cash dividends, and the settlement of equity awards during fiscal 2025. This was partially offset by less share buyback activity as compared to the same period of the prior year and the impact of the $150,000 incremental term loan.
Our contractual obligations primarily include, but are not limited to, debt service, self-insurance liabilities, and leasing arrangements. The consolidated financial statementsincluded in this Annual Report on Form 10-K provide additional information on the timing and amounts of those contractual obligations. We believe our sources of liquidity, namely available cash on hand, positive operating cash flows, and access to capital markets will continue to be adequate to meet our contractual obligations, as well as fund working capital, planned capital expenditures, location acquisitions, and execute purchases under our share repurchase program.
Critical Accounting Estimates
Our results of operations and financial condition as reflected in the consolidated financial statements included in this Annual Report on Form 10-K have been prepared in accordance with U.S. generally accepted accounting principles. Preparation of financial statements requires management to make estimates, judgements, and assumptions affecting the reported amounts of assets, liabilities, revenues, expenses and the disclosures of contingent assets and liabilities. We base these estimates and judgments on historical experience and assumptions believed to be reasonable under current facts and circumstances. Actual results, however, may differ from the estimated amounts we have recorded. We regularly evaluate these estimates, judgements and assumptions.
The following discussion provides information on our critical accounting estimates that require management's most difficult, subjective or complex judgments, and which may result in materially different results under different assumptions and conditions.
Impairment of Long-Lived Assets
Long-lived assets other than goodwill and indefinite-lived intangible assets (such as certain trade names), including property and equipment, right-of-use assets and other definite-lived intangibles such as trade names and customer relationships are reviewed for impairment when events or changes in circumstances indicate the carrying value of an asset may not be recoverable.
For long-lived assets, an impairment is indicated when the estimated total undiscounted cash flows associated with the asset or group of assets is less than carrying value. If impairment exists, an adjustment is made to write the asset down to its fair value, and a loss is recorded as the difference between the carrying value and fair value. The impairments primarily relate to long-lived assets for an open location and closed locations. We estimated the fair value of these assets utilizing the business enterprise valuation based on discounted cash flows for the open location, and for the closed
Index to Financial Statements
locations, the market approach using orderly liquidation values or broker quotes for sale of similar properties. We then compared these fair values to the related carrying value of the long-lived assets.
Impairment of Indefinite-Lived Intangible Assets
Management assesses impairment of indefinite-lived intangible assets, including goodwill, brokered liquor licenses on a quota system and certain trade names, on an annual basis during the fourth quarter or more frequently under certain circumstances.
We assessed macroeconomic conditions, industry and market considerations, cost factors that could have a negative impact, overall financial performance including actual results and trends, and other relevant entity-specific events. For fiscal 2025, the Company performed a quantitative assessment of goodwill and concluded it was not more likely than not that the fair value of the reporting units was less than its carrying values. There were no other impairment charges for goodwill or indefinite-lived intangible assets, recorded in fiscal years 2025.
Valuation of Earnouts
The estimated fair value of the earnout liability is determined by using a Monte-Carlo simulation model. Inputs that have a significant effect on the valuation include the expected volatility, stock price, expected term, risk-free interest rate, dividend yield, and performance hurdles.
Self-Insurance Reserves
Reserves are established for both identified claims and incurred but not reported ("IBNR") claims and are recorded when claim amounts become probable and estimable. Reserves for identified claims are based upon historical claim experience and third-party estimates of settlement costs. Reserves for IBNR claims are based upon claims data history. Self-insurance reserves are periodically reviewed for changes in facts and circumstances and adjustments are made as necessary.
Income Taxes
The Company utilizes the asset and liability approach in accounting for income taxes. We recognize income taxes in each of the jurisdictions in which we have a presence. For each jurisdiction, we estimate the amount of income taxes currently payable or receivable, as well as deferred income tax assets and liabilities. Deferred tax assets and liabilities are recorded to recognize the expected future tax benefits or costs of events that have been, or will be, reported in different years for financial statement purposes than tax purposes. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which these items are expected to reverse. We review our deferred tax assets to determine if it is more-likely-than-not that they will be realized. If we determine it is not more-likely-than-not that a deferred tax asset will be realized, we record a valuation allowance to reverse the previously recognized tax benefit.
The Company recognizes tax benefits related to uncertain tax positions if we believe it is more likely than not the benefit will be realized. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which a change in judgment occurs.
Recently Issued Accounting Standards
See Note 2 - Significant Accounting Policiesof the notes to consolidated financial statements of this Annual Report on Form 10-K for information regarding new accounting pronouncements.
Emerging Growth Company Accounting Election
The Company is an emerging growth company, as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart our Business Startups Act of 2012, and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements.
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a registration statement under the Securities Act declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth
Index to Financial Statements
companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with those of another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
We will remain an emerging growth company until the earlier of: (1) the last day of the fiscal year (a) following the fifth anniversary of Isos' IPO (March 5, 2026), (b) in which we have total annual gross revenue of at least $1,235,000 or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common equity that is held by non-affiliates exceeds $700,000 as of the end of the second fiscal quarter of that fiscal year; and (2) the date on which we have issued more than $1,000,000 in non-convertible debt securities during the prior three-year period. References herein to "emerging growth company" have the meaning associated with it in the JOBS Act.
Lucky Strike Entertainment Corporation published this content on August 28, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on August 28, 2025 at 11:36 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]