##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
 For the quarterly period ended March 31, 2009
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
 For the transition period from  to
 Commission File Number 001-34082
 
 Kona Grill, Inc.
 (Exact Name of Registrant as Specified in Its Charter)
 Delaware
    
    20-0216690(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification No.)
 7150 East Camelback Road, Suite 220
Scottsdale, Arizona 85251
(480) 922-8100  (Address, including zip code, and telephone number, including area code, of principal executive offices)
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




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##### 



TABLE OF CONTENTS
 PagePART I. FINANCIAL INFORMATIONItem 1. Consolidated Financial StatementsConsolidated Balance Sheets as of March 31, 2009 (Unaudited) and December 31, 2008
    
    
    2Unaudited Consolidated Statements of Operations for the Three Months Ended March 31, 2009 and 2008
    
    
    3Unaudited Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2009 and 2008
    
    
    4Notes to Unaudited Consolidated Financial Statements
    
    
    5Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    11Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    20Item 4. Controls and Procedures
    
    
    20PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    21Item 1A. Risk Factors
    
    
    21Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    21Item 3. Defaults Upon Senior Securities
    
    
    21Item 4. Submission of Matters to a Vote of Security Holders
    
    
    21Item 5. Other Information
    
    
    21Item 6. Exhibits
    
    
    22Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   1




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. Consolidated Financial Statements
 KONA GRILL, INC.
 
 CONSOLIDATED BALANCE SHEETS
 (in thousands, except share data)
 March 31,
    
    
    December 31,2009
    
    
    2008(Unaudited)
    
    
    (Note 1)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    2,493
    
    
    $
    2,477Investments
    
    
    686
    
    
    
    370Receivables
    
    
    422
    
    
    
    980Other current assets
    
    
    916
    
    
    
    938Total current assets
    
    
    4,517
    
    
    
    4,765Long-term investments
    
    
    6,513
    
    
    
    6,491Other assets
    
    
    788
    
    
    
    794Property and equipment, net
    
    
    55,353
    
    
    
    53,504Total assets
    
    $
    67,171
    
    
    $
    65,554LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    3,490
    
    
    $
    4,335Accrued expenses
    
    
    4,949
    
    
    
    4,878Current portion of notes payable
    
    
    731
    
    
    
    717Line of credit
    
    
    4,574
    
    
    
    2,488Bridge loan, net
    
    
    1,140
    
    
    
    Total current liabilities
    
    
    14,884
    
    
    
    12,418Notes payable
    
    
    1,132
    
    
    
    1,320Deferred rent
    
    
    16,443
    
    
    
    16,218Total liabilities
    
    
    32,459
    
    
    
    29,956Commitments and contingencies (Note 10)Stockholders equity:Preferred stock, $0.01 par value, 2,000,000 shares authorized, none issued
    
    
    
    
    
    
    Common stock, $0.01 par value, 15,000,000 shares authorized, 6,636,513 shares
issued and 6,520,313 shares outstanding at March 31, 2009 and 6,628,191 shares
issued and 6,511,991 shares outstanding at December 31, 2008
    
    
    66
    
    
    
    66Additional paid-in capital
    
    
    53,949
    
    
    
    53,739Treasury stock, at cost, 116,200 shares at March 31, 2009 and December 31, 2008
    
    
    (1,000
    )
    
    
    (1,000
    )Accumulated deficit
    
    
    (18,303
    )
    
    
    (17,207
    )Total stockholders equity
    
    
    34,712
    
    
    
    35,598Total liabilities and stockholders equity
    
    $
    67,171
    
    
    $
    65,554
   2




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##### Table of Contents



KONA GRILL, INC.
 
 UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
 (in thousands, except per share data)
 Three Months Ended March 31,2009
    
    
    2008Restaurant sales
    
    $
    19,455
    
    
    $
    18,103Costs and expenses:Cost of sales
    
    
    5,097
    
    
    
    5,193Labor
    
    
    6,749
    
    
    
    6,127Occupancy
    
    
    1,520
    
    
    
    1,256Restaurant operating expenses
    
    
    3,030
    
    
    
    2,588General and administrative
    
    
    1,887
    
    
    
    1,852Preopening expense
    
    
    500
    
    
    
    178Depreciation and amortization
    
    
    1,741
    
    
    
    1,566Total costs and expenses
    
    
    20,524
    
    
    
    18,760Loss from operations
    
    
    (1,069
    )
    
    
    (657
    )Nonoperating income (expense):Interest income and other, net
    
    
    48
    
    
    
    204Interest expense
    
    
    (32
    )
    
    
    (34
    )Loss from continuing operations before provision for income taxes
    
    
    (1,053
    )
    
    
    (487
    )Provision for income taxes
    
    
    30
    
    
    
    75Loss from continuing operations
    
    
    (1,083
    )
    
    
    (562
    )Loss from discontinued operations, net of tax
    
    
    (13
    )
    
    
    (111
    )Net loss
    
    $
    (1,096
    )
    
    $
    (673
    )Net loss per share  Basic:Continuing operations
    
    $
    (0.17
    )
    
    $
    (0.08
    )Discontinued operations
    
    
    
    
    
    
    (0.02
    )Net loss
    
    $
    (0.17
    )
    
    $
    (0.10
    )Net loss per share  Diluted:Continuing operations
    
    $
    (0.17
    )
    
    $
    (0.08
    )Discontinued operations
    
    
    
    
    
    
    (0.02
    )Net loss
    
    $
    (0.17
    )
    
    $
    (0.10
    )Weighted average shares used in computation:Basic
    
    
    6,512
    
    
    
    6,609Diluted
    
    
    6,512
    
    
    
    6,609
   3




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KONA GRILL, INC.
 
 UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (in thousands)
 Three Months Ended March 31,2009
    
    
    2008Operating activitiesNet loss
    
    $
    (1,096
    )
    
    $
    (673
    )Adjustments to reconcile net loss to net cash provided by operating activities:Depreciation and amortization
    
    
    1,741
    
    
    
    1,658Stock-based compensation expense
    
    
    127
    
    
    
    128Amortization of debt discount
    
    
    10
    
    
    
    Change in operating assets and liabilities:Receivables
    
    
    558
    
    
    
    (273
    )Other current assets
    
    
    22
    
    
    
    156Accounts payable
    
    
    (152
    )
    
    
    525Accrued expenses
    
    
    71
    
    
    
    23Deferred rent
    
    
    225
    
    
    
    174Net cash provided by operating activities
    
    
    1,506
    
    
    
    1,718Investing activitiesPurchase of property and equipment
    
    
    (4,283
    )
    
    
    (3,442
    )Decrease (increase) in other assets
    
    
    6
    
    
    
    (17
    )Net purchases and sales of investments
    
    
    (338
    )
    
    
    35Net cash used in investing activities
    
    
    (4,615
    )
    
    
    (3,424
    )Financing activitiesNet borrowings on line of credit
    
    
    2,086
    
    
    
    Proceeds from bridge loan
    
    
    1,200
    
    
    
    Repayments of notes payable
    
    
    (174
    )
    
    
    (161
    )Proceeds from issuance of common stock under the Employee Stock Purchase Plan and exercise
of stock options
    
    
    13
    
    
    
    28Net cash provided by (used in) financing activities
    
    
    3,125
    
    
    
    (133
    )Net increase (decrease) in cash and cash equivalents
    
    
    16
    
    
    
    (1,839
    )Cash and cash equivalents at the beginning of the period
    
    
    2,477
    
    
    
    4,991Cash and cash equivalents at the end of the period
    
    $
    2,493
    
    
    $
    3,152Supplemental disclosure of cash flow informationCash paid for interest, net of capitalization
    
    $
    32
    
    
    $
    34Noncash investing activitiesDecrease in accounts payable related to property and equipment additions
    
    $
    (693
    )
    
    $
    (605
    )
   4




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KONA GRILL, INC.
 
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 1. Basis of Presentation
    Recent Accounting Pronouncements
 Fair Value Measurements
 The Fair Value Option for Financial Assets
and Financial Liabilities
  
    
    FSP FAS 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset
or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly,
provides guidance on how to determine the fair value of assets and liabilities when the volume
and level of activity for the asset or liability has significantly decreased. This FSP
reaffirms the need to use judgment to ascertain if a formerly active market has become
inactive and in determining fair values when markets have become inactive. In addition, this
FSP requires disclosure in interim and annual periods of the inputs and valuation techniques
used to measure fair value and a discussion of changes in valuation techniques.
 
    
    FSP FAS 115-2 and FAS 124-2 Recognition and Presentation of Other-Than-Temporary
Impairments, amends the requirements for the recognition and measurement of
other-than-temporary impairments for debt securities by modifying the pre-existing intent and
ability indicator. Under FSP FAS 115-2 and FAS 124-2, an other-than-temporary impairment is
triggered when there is an intent to sell the security, it is more likely than not that the
security will be required to be sold before recovery, or the security is not expected to
recover the entire amortized cost basis of the security. Additionally, this FSP changes the
presentation of an other-than-temporary impairment in the income statement for those
impairments involving credit losses. The credit loss component will be recognized in earnings
and the remainder of the impairment will be recorded in other comprehensive income.
  5




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
    
    FSP FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial
Instruments, requires interim disclosures regarding the fair values of financial instruments
that are not currently reflected on the balance sheet at fair value. Additionally, this FSP
requires disclosure on the methods and significant assumptions used to estimate the fair value
of financial instruments on an interim basis as well as changes of the methods and significant
assumptions from prior periods.
  2. Discontinued Operations
   Restaurant sales
    
    $
    693Loss from discontinued operations before income tax benefit
    
    $
    (136
    )Income tax benefit
    
    
    25Loss from discontinued operations, net of tax
    
    $
    (111
    )
 3. Investments
  GrossAdjusted
    
    
    Unrealized
    
    
    EstimatedCost
    
    
    Losses
    
    
    Fair ValueMarch 31, 2009Short-term investments  Available-for-sale securities:Certificates of deposit
    
    $
    372
    
    
    $
    
    
    
    $
    372Money market securities
    
    
    314
    
    
    
    
    
    
    
    314Long-term investments  Trading securities:Auction rate securities
    
    
    6,513
    
    
    
    
    
    
    
    6,513Total investments
    
    $
    7,199
    
    
    $
    
    
    
    $
    7,199December 31, 2008Short-term investments  Available-for-sale securities:Certificates of deposit
    
    $
    370
    
    
    $
    
    
    
    $
    370Long-term investments  Trading securities:Auction rate securities
    
    
    6,491
    
    
    
    
    
    
    
    6,491Total investments
    
    $
    6,861
    
    
    $
    
    
    
    $
    6,861
  6




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The Fair Value Option for
Financial Assets and Financial Liabilities,
 4. Fair Value Measurements
  Level 1:
    
    Fair values determined by quoted prices in active markets for identical assets or
liabilities that the Company has the ability to access.Level 2:
    
    Fair values utilize inputs other than quoted prices that are observable for the asset or
liability, and may include quoted prices for similar assets and liabilities in active markets,
and inputs other than quoted prices that are observable for the asset or liability.Level 3:
    
    Fair values determined by unobservable inputs that are not corroborated by market data
and may reflect the reporting entitys own assumptions market participants would use in
pricing the asset or liability.
   7




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Fair Value Measurements at Reporting Date UsingQuoted Prices in
    
    
    SignificantActive Markets
    
    
    Other
    
    
    Significantfor
    
    
    Observable
    
    
    UnobservableIdentical Assets
    
    
    Inputs
    
    
    InputsDescription
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    March 31, 2009Certificates of deposit
    
    $
    372
    
    
    $
    
    
    
    $
    
    
    
    $
    372Money market securities
    
    
    314
    
    
    
    
    
    
    
    
    
    
    
    314Auction rate securities (including put option)
    
    
    
    
    
    
    
    
    
    
    6,513
    
    
    
    6,513$
    686
    
    
    $
    
    
    
    $
    6,513
    
    
    $
    7,199
  Three Months EndedMarch 31, 2009Balance at December 31, 2008
    
    $
    6,491Transfer to Level 3
    
    
    Total gains or losses (realized and unrealized)Included in earnings
    
    
    22Included in other comprehensive loss
    
    
    Net settlements
    
    
    Balance at March 31, 2009
    
    $
    6,513
 5. Net Loss Per Share
   Three Months Ended March 31,2009
    
    
    2008(in thousands, except per share data)Numerator:Loss from continuing operations
    
    $
    (1,083
    )
    
    $
    (562
    )Loss from discontinued operations
    
    
    (13
    )
    
    
    (111
    )Net loss
    
    $
    (1,096
    )
    
    $
    (673
    )Denominator:Weighted average shares  basic
    
    
    6,512
    
    
    
    6,609Effect of dilutive stock options and warrants
    
    
    
    
    
    
    Weighted average shares  diluted
    
    
    6,512
    
    
    
    6,609Net loss per share  Basic and Diluted:Continuing operations
    
    $
    (0.17
    )
    
    $
    (0.08
    )Discontinued operations
    
    
    
    
    
    
    (0.02
    )Net loss
    
    $
    (0.17
    )
    
    $
    (0.10
    )
  8




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##### Table of Contents



6. Accrued Expenses
  March 31,
    
    
    December 31,2009
    
    
    2008Accrued payroll
    
    $
    2,015
    
    
    $
    1,846Business and income taxes
    
    
    632
    
    
    
    663Sales taxes
    
    
    618
    
    
    
    643Gift cards
    
    
    539
    
    
    
    654Accrued occupancy
    
    
    212
    
    
    
    255Other
    
    
    933
    
    
    
    817$
    4,949
    
    
    $
    4,878
 7. Debt and Credit Agreements
 Credit Facility
  Bridge Loan
    9




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8. Stock-Based Compensation
   Three Months Ended March 31,2009
    
    
    2008Expected volatility
    
    
    50.2
    %
    
    
    35.7
    %Risk-free interest rate
    
    
    1.7
    %
    
    
    2.5
    %Expected option life (in years)
    
    
    4.0
    
    
    
    3.7Dividend yield
    
    
    0.0
    %
    
    
    0.0
    %Weighted average fair value per option granted
    
    $
    0.78
    
    
    $
    3.53
  9. Comprehensive Loss
  Three Months EndedMarch 31,2009
    
    
    2008Net loss
    
    $
    (1,096
    )
    
    $
    (673
    )Net unrealized losses on available-for-sale securities
    
    
    
    
    
    
    (353
    )Total comprehensive loss
    
    $
    (1,096
    )
    
    $
    (1,026
    )
 10. Commitments and Contingencies
   10




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  Overview
      11




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Key Measures We Use to Evaluate Our Company
  Number of Restaurant Openings.
 Same-Store Sales Percentage Change.
 Average Weekly Sales.
 Average Unit Volume.
 Sales Per Square Foot.
 Restaurant Operating Profit.
 Key Financial Definitions
 Restaurant Sales.
 Cost of Sales.
 Labor.
 Occupancy.
 Restaurant Operating Expenses.
 General and Administrative.
  12




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Preopening Expense.
 Depreciation and Amortization
 Interest Income and Other, Net.
 Interest Expense.
 Financial Performance Overview
  Three Months Ended March 31,2009
    
    
    2008Restaurant sales growth
    
    
    7.5
    %
    
    
    22.3
    %Same-store sales percentage change (1)
    
    
    (9.6
    )%
    
    
    (2.4
    )%Average weekly sales  comparable restaurant base (2)
    
    $
    73,347
    
    
    $
    81,122Average weekly sales  non-comparable restaurant base (3)
    
    $
    66,331
    
    
    $
    80,106Average unit volume (in thousands) (4)
    
    $
    936
    
    
    $
    1,060Sales per square foot (4)
    
    $
    132
    
    
    $
    150Restaurant operating profit (in thousands) (5)
    
    $
    3,059
    
    
    $
    2,939Restaurant operating profit as a percentage of sales (5)
    
    
    15.7
    %
    
    
    16.3
    %
 (1)
    
    Same-store sales percentage change reflects the periodic change in restaurant
sales for the comparable restaurant base. In calculating the percentage change for
same-store sales, we include a restaurant in the comparable restaurant base after it has
been in operation for more than 18 months.(2)
    
    Includes only those restaurants in the comparable restaurant base.(3)
    
    Includes only those restaurants that are not in the comparable restaurant base
that were open for the entire period.(4)
    
    Includes only those restaurants open for at least 12 months before the beginning
of the period measured.(5)
    
    Restaurant operating profit is not a financial measurement determined in
accordance with generally accepted accounting principles and should not be considered in
isolation or as an alternative to income (loss) from operations. Restaurant operating
profit may not be comparable to the same or similarly titled measures computed by other
companies.  13




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Three Months Ended March 31,2009
    
    
    2008(in thousands)Restaurant sales
    
    $
    19,455
    
    
    $
    18,103Costs and expenses:Cost of sales
    
    
    5,097
    
    
    
    5,193Labor
    
    
    6,749
    
    
    
    6,127Occupancy
    
    
    1,520
    
    
    
    1,256Restaurant operating expenses
    
    
    3,030
    
    
    
    2,588Restaurant operating profit
    
    
    3,059
    
    
    
    2,939Deduct  other costs and expensesGeneral and administrative
    
    
    1,887
    
    
    
    1,852Preopening expense
    
    
    500
    
    
    
    178Depreciation and amortization
    
    
    1,741
    
    
    
    1,566Loss from operations
    
    $
    (1,069
    )
    
    $
    (657
    )
 Percentage of Restaurant SalesThree Months Ended March 31,2009
    
    
    2008Restaurant sales
    
    
    100.0
    %
    
    
    100.0
    %Costs and expenses:Cost of sales
    
    
    26.2
    
    
    
    28.7Labor
    
    
    34.7
    
    
    
    33.8Occupancy
    
    
    7.8
    
    
    
    6.9Restaurant operating expenses
    
    
    15.6
    
    
    
    14.3Restaurant operating profit
    
    
    15.7
    
    
    
    16.3Deduct  other costs and expensesGeneral and administrative
    
    
    9.7
    
    
    
    10.2Preopening expense
    
    
    2.6
    
    
    
    1.0Depreciation and amortization
    
    
    8.9
    
    
    
    8.7Loss from operations
    
    
    (5.5
    )%
    
    
    (3.6
    )%
 Three Months Ended
    
    
    Year EndedMarch 31, 2009
    
    
    December 31, 2008Store Growth ActivityBeginning Restaurants
    
    
    20
    
    
    
    18Openings
    
    
    1
    
    
    
    3Closings
    
    
    
    
    
    
    (1
    )Total
    
    
    21
    
    
    
    20
  14




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Results of Operations
  Three Months Ended March 31,2009
    
    
    2008Restaurant sales
    
    
    100.0
    %
    
    
    100.0
    %Costs and expenses:Cost of sales
    
    
    26.2
    
    
    
    28.7Labor
    
    
    34.7
    
    
    
    33.8Occupancy
    
    
    7.8
    
    
    
    6.9Restaurant operating expenses
    
    
    15.6
    
    
    
    14.3General and administrative
    
    
    9.7
    
    
    
    10.2Preopening expense
    
    
    2.6
    
    
    
    1.0Depreciation and amortization
    
    
    8.9
    
    
    
    8.7Total costs and expenses
    
    
    105.5
    
    
    
    103.6Loss from operations
    
    
    (5.5
    )
    
    
    (3.6
    )Nonoperating income (expense):Interest income and other, net
    
    
    0.2
    
    
    
    1.1Interest expense
    
    
    (0.2
    )
    
    
    (0.2
    )Loss from continuing operations before
provision for income taxes
    
    
    (5.5
    )
    
    
    (2.7
    )Provision for income taxes
    
    
    0.1
    
    
    
    0.4Loss from continuing operations
    
    
    (5.6
    )
    
    
    (3.1
    )Loss from discontinued operations, net of tax
    
    
    
    
    
    
    (0.6
    )Net loss
    
    
    (5.6
    )%
    
    
    (3.7
    )%
 Three Months Ended March 31, 2009 Compared with Three Months Ended March 31, 2008
 Restaurant Sales.
 Cost of Sales
 Labor
  15




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Occupancy
 Restaurant Operating Expenses
 General and Administrative
 Preopening Expense
 Depreciation and Amortization
 Interest Income and Other, Net.
 Interest Expense.
 Provision for Income Taxes
  16




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Potential Fluctuations in Quarterly Results and Seasonality
  
    
    timing of new restaurant openings and related expenses;
 
    
    restaurant operating costs and preopening costs for our newly-opened restaurants, which
are often materially greater during the first several months of operation than thereafter;
 
    
    labor availability and costs for hourly and management personnel;
 
    
    profitability of our restaurants, especially in new markets;
 
    
    increases and decreases in comparable restaurant sales;
 
    
    impairment of long-lived assets and any loss on restaurant closures;
 
    
    changes in borrowings and interest rates;
 
    
    general economic conditions;
 
    
    weather conditions or natural disasters;
 
    
    timing of certain holidays;
 
    
    new or revised regulatory requirements and accounting pronouncements;
 
    
    changes in consumer preferences and competitive conditions; and
 
    
    fluctuations in commodity prices.
  Liquidity and Capital Resources
   17




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##### Table of Contents



Future Capital Requirements
    Bridge Loan
  Rights Offering
   18




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##### Table of Contents



Equipment Loans
  Credit Facility
  Cash Flows
  Three Months Ended March 31,2009
    
    
    2008Net cash provided by (used in):Operating activities
    
    $
    1,506
    
    
    $
    1,718Investing activities
    
    
    (4,615
    )
    
    
    (3,424
    )Financing activities
    
    
    3,125
    
    
    
    (133
    )Net increase (decrease) in cash and cash equivalents
    
    $
    16
    
    
    $
    (1,839
    )
 Operating Activities.
 Investing Activities.
  19




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##### Table of Contents



Financing Activities.
 Critical Accounting Policies
  
 Item 3. Quantitative and Qualitative Disclosures about Market Risk
  Interest Rates
  Primary Market Risk Exposures
  
 Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
   20




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##### Table of Contents



Changes in Internal Control over Financial Reporting
  
 PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
 
  
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
   21




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##### Table of Contents



Item 6. Exhibits
 (a)
    
    Exhibits
 3.1
    
    
    Amended and Restated Certificate of Incorporation of the Registrant (1)3.3
    
    
    Amended and Restated Bylaws of Kona Grill, Inc. (2)3.4
    
    
    Certificate of Designations, Preferences, and Rights of Series A Junior
Participating Preferred Stock of Kona Grill, Inc. (4)4.1
    
    
    Form of Common Stock Certificate (3)4.2
    
    
    Kona Grill, Inc. Stockholders Agreement, dated August 29, 2003 (3)4.3
    
    
    Kona Grill, Inc. Series A Investor Rights Agreement, dated August 29, 2003 (3)4.4
    
    
    Amendment No. 1 to Kona Grill, Inc. Series A Investor Rights Agreement, dated
May 31, 2005 (3)4.5
    
    
    Rights Agreement, dated May 27, 2008 between Kona Grill, Inc. and Continental
Stock Transfer & Trust, as rights agent (4)4.7
    
    
    Form of Warrant (March 2009 Note Offering) (5)4.8
    
    
    Form of Subscription Rights Certificate (6)4.9
    
    
    Form of First Amended and Restated Promissory Note (March 2009 Note Offering) (7)10.21
    
    
    Note and Warrant Purchase Agreement, dated March 6, 2009, among Kona Grill, Inc.
and the investor parties thereto (8)31.1
    
    
    Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule
15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended31.2
    
    
    Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule
15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended32.1
    
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 200232.2
    
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002
 
 (1)
    
    Incorporated by reference to Amendment No. 1 to the Registrants Registration
Statement on Form S-1 (Registration No. 333-125506), as filed on July 8, 2005.(2)
    
    Incorporated by reference to the Registrants Form 8-K filed on November 5,
2007.(3)
    
    Incorporated by reference to Amendment No. 2 to the Registrants Registration
Statement on Form S-1 (Registration No. 333-125506), as filed on July 21, 2005.(4)
    
    Incorporated by reference to the Registrants Form 8-K filed on May 28, 2008.(5)
    
    Incorporated by reference to the Registrants Form 10-K for the year ended
December 31, 2008.(6)
    
    Incorporated by reference to the Registrants Registration Statement on Form
S-3 filed on March 30, 2009.(7)
    
    Incorporated by reference to the Registrants Form 8-K filed on April 10, 2009.(8)
    
    Incorporated by reference to the Registrants Form 8-K filed on March 9, 2009.  22




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##### Table of Contents



SIGNATURES
  Kona Grill, Inc./s/ Marcus E. JundtMarcus E. JundtChairman of the Board, President and

Chief Executive Officer /s/ Mark S. RobinowMark S. RobinowExecutive Vice President, Chief
Financial Officer and Secretary

(Principal Accounting and Financial
Officer)   23




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##### Table of Contents



EXHIBIT INDEX
 Exhibit No.
    
    Description31.1
    
    
    Certification of Chief Executive Officer pursuant to Rule 13a-14(a)
and Rule 15d-14(a), promulgated under the Securities Exchange Act of
1934, as amended31.2
    
    
    Certification of Chief Financial Officer pursuant to Rule 13a-14(a)
and Rule 15d-14(a), promulgated under the Securities Exchange Act of
1934, as amended32.1
    
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 200232.2
    
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002
  24