| RELATED PARTY TRANSACTIONS |
NOTE
17 — RELATED PARTY TRANSACTIONS
The
related parties had material transactions for the six months ended June 30, 2025 and 2024 consist of the following:
| Name
of Related Parties |
|
Nature
of Relationship as of June 30, 2025 |
| Yoshiyuki
Aikawa |
|
Controlling
shareholder, director and CEO of the Company |
| Medical
Corporation Shobikai |
|
The
relatives of CEO of the Company being the Members of the MC |
| Medical
Corporation Kowakai |
|
The
relatives of CEO of the Company being the Members of the MC |
| Medical
Corporation Nasukai |
|
The
relatives of CEO of the Company being the Members of the MC |
| Medical
Corporation Aikeikai |
|
The
relatives of CEO of the Company being the Members of the MC |
| Medical
Corporation Jukeikai |
|
The
relatives of CEO of the Company being the Members of the MC |
| Medical
Corporation Ritz Cosmetic Surgery |
|
The
relatives of CEO of the Company being the Members of the MC |
| Medical
Corporation Association Junikai |
|
The
relatives of CEO of the Company being the Members of the MC |
| Medical
Corporation Association Furinkai |
|
The
relatives of CEO of the Company being the Members of the MC |
| Japan
Medical & Beauty Inc. |
|
Controlled
by the CEO of the Company |
| SBC
Inc. |
|
Controlled
by the CEO of the Company |
| Hariver
Inc. |
|
Controlled
by the CEO of the Company |
| Public
Interest Foundation SBC Medical Promotion Foundation |
|
The
relative of CEO of the Company being a Member of Public Interest Foundation SBC Medical Promotion Foundation |
| AI
Med Inc. |
|
The
CEO of the Company is a principal shareholder of AI Med Inc. |
| SBC
Irvine MC |
|
Significantly
influenced by the Company |
| SBC
Tokyo Medical University |
|
The
CEO of the Company is the chairman of SBC Tokyo Medical University |
| SBC
Shonan Osteopathic Clinic Inc. |
|
The
CEO of the Company is a principal shareholder of SBC Shonan Osteopathic Clinic Inc. |
| General Incorporated Association Taiseikai |
|
The relatives of CEO of the Company being the Members of General Incorporated
Association Taiseikai |
| General
Incorporated Association SBC |
|
The
CEO of the Company being the Member of General Incorporated Association SBC |
| Skynet
Academy Co., Ltd. |
|
Subsidiary
of Hariver, Inc., a company controlled by the CEO of the Company |
| Kijimadairakanko
Inc. |
|
Subsidiary
of SBC Inc., a company controlled by the CEO of the Company |
SBC
MEDICAL GROUP HOLDINGS INCORPORATED
NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE
17 — RELATED PARTY TRANSACTIONS (cont.)
During
the three and six months ended June 30, 2025 and 2024, the transactions with related parties are as follows:
SCHEDULE
OF RELATED PARTY TRANSACTIONS
| Revenues, net – related parties | |
2025 | | |
2024 |
|
|
|
2025 |
|
|
|
2024 | |
| | |
For the Three Months Ended June 30, |
|
|
|
For the Six Months Ended
June 30, | |
| Revenues, net | |
2025 | | |
2024 |
|
|
2025 |
|
|
2024 | |
| Medical Corporation Shobikai | |
$ | 10,962,737 | | |
$ | 13,086,609 |
|
|
$ |
22,515,192 |
|
|
$ |
26,205,206 | |
| Medical Corporation Kowakai | |
| 8,909,329 | | |
| 12,410,044 |
|
|
|
20,022,253 |
|
|
|
25,998,681 | |
| Medical Corporation Nasukai | |
| 10,244,692 | | |
| 12,053,758 |
|
|
|
22,535,537 |
|
|
|
24,113,981 | |
| Medical Corporation Aikeikai | |
| 3,646,228 | | |
| 5,505,514 |
|
|
|
7,288,931 |
|
|
|
11,113,976 | |
| Medical Corporation Jukeikai | |
| 890,237 | | |
| 1,792,189 |
|
|
|
2,064,207 |
|
|
|
3,698,101 | |
| Medical Corporation Ritz Cosmetic Surgery | |
| 1,044,588 | | |
| 1,764,569 |
|
|
|
2,558,211 |
|
|
|
2,672,883 | |
| Japan Medical & Beauty Inc. | |
| 10,373 | | |
| 9,608 |
|
|
|
20,206 |
|
|
|
19,713 | |
| Hariver Inc. | |
| 5,186 | | |
| 4,804 |
|
|
|
10,103 |
|
|
|
9,856 | |
| SBC Inc. | |
| 206 | | |
| 310 |
|
|
|
314 |
|
|
|
1,842 | |
| Public Interest Foundation SBC Medical Promotion Foundation | |
| 30 | | |
| 6 |
|
|
|
41 |
|
|
|
59 | |
| General Incorporated Association SBC | |
| — | | |
| 304 |
|
|
|
— |
|
|
|
304 | |
| SBC Tokyo Medical University | |
| 2,155 | | |
| 8,012 |
|
|
|
16,317 |
|
|
|
40,817 | |
| SBC Shonan Osteopathic Clinic Inc. | |
| — | | |
| 1,107 |
|
|
|
— |
|
|
|
2,880 | |
| Yoshiyuki Aikawa | |
| 800 | | |
| 10,672 |
|
|
|
29,987 |
|
|
|
54,130 | |
| AI Med Inc. | |
| 98 | | |
| 58 |
|
|
|
190 |
|
|
|
207 | |
| SBC Irvine MC | |
| 37,753 | | |
| 347,337 |
|
|
|
239,538 |
|
|
|
682,057 | |
| Medical Corporation Association Furinkai | |
| 2,304,254 | | |
| 2,587,472 |
|
|
|
4,938,946 |
|
|
|
4,880,109 | |
| Medical Corporation Association Junikai | |
| 879,282 | | |
| 1,455,672 |
|
|
|
1,948,521 |
|
|
|
2,013,450 | |
| Medical Corporation Association Taiseikai | |
| — | | |
| 993 |
|
|
|
— |
|
|
|
993 | |
| Skynet Academy Co., Ltd. | |
| 6,915 | | |
| — |
|
|
|
13,471 |
|
|
|
— | |
| Kijimadairakanko Inc. | |
| 35 | | |
| — |
|
|
|
78 |
|
|
|
— | |
| Total | |
$ | 38,944,898 | | |
$ | 51,039,038 |
|
|
$ |
84,202,043 |
|
|
$ |
101,509,245 | |
| Cost of revenues | |
2025 | | |
2024 | |
|
|
2025 |
|
|
|
2024 |
|
| | |
For the Three Months Ended June 30, | |
|
For the Six Months Ended
June 30, |
|
| Cost of revenues | |
2025 | | |
2024 | |
|
2025 |
|
|
2024 |
|
| Medical Corporation Nasukai | |
$ | 65,959 | | |
$ | — | |
|
$ |
65,959 |
|
|
$ |
— |
|
| Medical Corporation Aikeikai | |
| 3,742 | | |
| — | |
|
|
3,742 |
|
|
|
— |
|
| Japan Medical & Beauty Inc. | |
| 4,502,380 | | |
| 3,616,103 | |
|
|
7,801,736 |
|
|
|
5,413,462 |
|
| SBC Tokyo Medical University | |
| 94,295 | | |
| — | |
|
|
183,689 |
|
|
|
— |
|
| Kijimadairakanko Inc. | |
| 3,226 | | |
| — | |
|
|
71,404 |
|
|
|
— |
|
| Total | |
$ | 4,669,602 | | |
$ | 3,616,103 | |
|
$ |
8,126,530 |
|
|
$ |
5,413,462 |
|
| Selling, general and administrative expenses | |
2025 | | |
2024 | |
|
|
2025 |
|
|
|
2024 |
|
| | |
For the Three Months Ended June 30, | |
|
For the Six Months Ended
June 30, |
|
| Selling, general and administrative expenses | |
2025 | | |
2024 | |
|
2025 |
|
|
2024 |
|
| Medical Corporation Shobikai | |
$ | 354,930 | | |
$ | — | |
|
$ |
354,930 |
|
|
$ |
— |
|
| Medical Corporation Kowakai | |
| 3,697 | | |
| — | |
|
|
3,697 |
|
|
|
— |
|
| Medical Corporation Nasukai | |
| 15,178 | | |
| — | |
|
|
15,178 |
|
|
|
— |
|
| Medical Corporation Aikeikai | |
| 28,218 | | |
| — | |
|
|
28,218 |
|
|
|
— |
|
| Medical Corporation Jukeikai | |
| 791 | | |
| — | |
|
|
791 |
|
|
|
— |
|
| Medical Corporation Association Junikai | |
| 337 | | |
| — | |
|
|
337 |
|
|
|
— |
|
| Medical Corporation Association Furinkai | |
| 429 | | |
| — | |
|
|
429 |
|
|
|
— |
|
| SBC Inc. | |
| 7 | | |
| — | |
|
|
7 |
|
|
|
— |
|
| General Incorporated Association SBC | |
| 12,180 | | |
| — | |
|
|
12,180 |
|
|
|
— |
|
| Total | |
$ | 415,767 | | |
$ | — | |
|
$ |
415,767 |
|
|
$ |
— |
|
As
of June 30, 2025 and December 31, 2024, the balances with related parties are as follows:
| Accounts receivable | |
June 30, 2025 | | |
December 31, 2024 | |
| Medical Corporation Shobikai | |
$ | 14,064,516 | | |
$ | 5,091,430 | |
| Medical Corporation Nasukai | |
| 12,696,547 | | |
| 8,552,722 | |
| Medical Corporation Kowakai | |
| 12,226,967 | | |
| 7,742,251 | |
| Medical Corporation Aikeikai | |
| 4,936,342 | | |
| 3,071,378 | |
| Medical Corporation Jukeikai | |
| 1,494,312 | | |
| 993,944 | |
| Medical Corporation Association Furinkai | |
| 1,164,544 | | |
| 1,263,602 | |
| Medical Corporation Ritz Cosmetic Surgery | |
| 1,430,776 | | |
| 817,283 | |
| Medical Corporation Association Junikai | |
| 226,361 | | |
| 283,298 | |
| Hariver Inc. | |
| 1,908 | | |
| — | |
| SBC Tokyo Medical University | |
| 605 | | |
| 536 | |
| AI Med Inc. | |
| 36 | | |
| 33 | |
| SBC Inc. | |
| 288 | | |
| 137 | |
| Public Interest Foundation SBC Medical Promotion Foundation | |
| 66 | | |
| 36 | |
| SBC Shonan Osteopathic Clinic Inc. | |
| — | | |
| 4 | |
| SBC Irvine MC | |
| 677,515 | | |
| 693,850 | |
| Kijimadairakanko Inc. | |
| 60 | | |
| 336,176 | |
| Total | |
$ | 48,920,843 | | |
$ | 28,846,680 | |
| Accounts
receivable with related parties | |
$ | 48,920,843 | | |
$ | 28,846,680 | |
SBC
MEDICAL GROUP HOLDINGS INCORPORATED
NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE
17 — RELATED PARTY TRANSACTIONS (cont.)
| Finance lease receivables | |
June 30, 2025 | | |
December 31, 2024 | |
| Medical Corporation Shobikai | |
$ | 4,201,316 | | |
$ | 1,877,291 | |
| Medical Corporation Kowakai | |
| 4,241,594 | | |
| 2,490,705 | |
| Medical Corporation Nasukai | |
| 6,659,496 | | |
| 3,872,683 | |
| Medical Corporation Aikeikai | |
| 1,580,515 | | |
| 1,047,821 | |
| Medical Corporation Ritz Cosmetic Surgery | |
| 2,333,678 | | |
| 2,479,771 | |
| Medical Corporation Jukeikai | |
| 407,692 | | |
| 500,244 | |
| Medical Corporation Association Furinkai | |
| 1,947,518 | | |
| 1,891,412 | |
| Medical Corporation Association Junikai | |
| 928,218 | | |
| 197,452 | |
| SBC Shonan Osteopathic Clinic Inc. | |
| 26,883 | | |
| 32,788 | |
| Total | |
| 22,326,910 | | |
| 14,390,167 | |
| Finance
lease receivables | |
| 22,326,910 | | |
| 14,390,167 | |
| Less: current portion | |
| (9,128,931 | ) | |
| (5,992,585 | ) |
| Finance
lease receivables Less: current portion | |
| (9,128,931 | ) | |
| (5,992,585 | ) |
| Non-current portion | |
$ | 13,197,979 | | |
$ | 8,397,582 | |
| Finance
lease receivables Non-current portion | |
$ | 13,197,979 | | |
$ | 8,397,582 | |
| Other receivables | |
June 30, 2025 | | |
December 31, 2024 | |
| Medical Corporation Shobikai | |
$ | 672,427 | | |
$ | — | |
| Medical Corporation Kowakai | |
| 443,278 | | |
| — | |
| Medical Corporation Nasukai | |
| 419,358 | | |
| — | |
| Medical Corporation Aikeikai | |
| 215,926 | | |
| — | |
| Medical Corporation Jukeikai | |
| 75,800 | | |
| — | |
| Medical Corporation Ritz Cosmetic Surgery | |
| 64,619 | | |
| — | |
| Total | |
$ | 1,891,408 | | |
$ | — | |
| Due from related party, net | |
June 30, 2025 | | |
December 31, 2024 | |
| SBC Irvine MC | |
$ | 2,766,013 | | |
$ | 2,836,013 | |
| Less: allowance for credit loss | |
| (2,766,013 | ) | |
| (2,836,013 | ) |
| Total | |
$ | — | | |
$ | — | |
| Due from related
party, net | |
$ | — | | |
$ | — | |
| Long-term investments in MCs | |
June 30, 2025 | | |
December 31, 2024 | |
| Medical Corporation Shobikai | |
$ | 6,936 | | |
$ | 6,378 | |
| Medical Corporation Kowakai | |
| 6,936 | | |
| 6,378 | |
| Medical Corporation Nasukai | |
| 6,936 | | |
| 6,378 | |
| Medical Corporation Aikeikai | |
| 6,936 | | |
| 6,378 | |
| Medical Corporation Jukeikai | |
| 7,460,610 | | |
| 6,859,913 | |
| Medical Corporation Ritz Cosmetic Surgery | |
| 11,893,068 | | |
| 10,935,485 | |
| Total | |
$ | 19,381,422 | | |
$ | 17,820,910 | |
| Long-term investments
in MCs – related parties | |
$ | 19,381,422 | | |
$ | 17,820,910 | |
| Accounts payable | |
June 30, 2025 | | |
December 31, 2024 | |
| Japan Medical & Beauty Inc. | |
$ | 1,993,737 | | |
$ | 659,044 | |
| SBC Tokyo Medical University | |
| 34,682 | | |
| — | |
| Kijimadairakanko Inc. | |
| 3,568 | | |
| — | |
| Medical Corporation Shobikai | |
| 305,853 | | |
| — | |
| Medical Corporation Nasukai | |
| 292,118 | | |
| — | |
| Medical Corporation Kowakai | |
| 362,910 | | |
| — | |
| Medical Corporation Aikeikai | |
| 112,416 | | |
| — | |
| Medical Corporation Jukeikai | |
| 33,611 | | |
| — | |
| Medical Corporation Association Furinkai | |
| 39,926 | | |
| — | |
| Medical Corporation Ritz Cosmetic Surgery | |
| 13,146 | | |
| — | |
| Medical Corporation Association Junikai | |
| 50,855 | | |
| — | |
| SBC Shonan Osteopathic Clinic Inc. | |
| 2,584 | | |
| — | |
| General Incorporated Association SBC | |
| 583 | | |
| — | |
| Total | |
$ | 3,245,989 | | |
$ | 659,044 | |
| Accounts
payable | |
$ | 3,245,989 | | |
$ | 659,044 | |
| Advances from customers | |
June 30, 2025 | | |
December 31, 2024 | |
| Medical Corporation Shobikai | |
$ | 4,389,144 | | |
$ | 5,076,300 | |
| Medical Corporation Kowakai | |
| 529,366 | | |
| 1,801,034 | |
| Medical Corporation Nasukai | |
| 726,562 | | |
| 1,745,069 | |
| Medical Corporation Aikeikai | |
| 158,652 | | |
| 379,931 | |
| Medical Corporation Jukeikai | |
| 57,179 | | |
| 140,170 | |
| Medical Corporation Ritz Cosmetic Surgery | |
| 22,214 | | |
| 45,701 | |
| SBC Shonan Osteopathic Clinic Inc. | |
| 21,716 | | |
| 16,395 | |
| Medical Corporation Association Furinkai | |
| 1,700,347 | | |
| 940,007 | |
| Medical Corporation Association Junikai | |
| 2,727,827 | | |
| 1,594,926 | |
| Total | |
$ | 10,333,007 | | |
$ | 11,739,533 | |
| Advances from
customers | |
$ | 10,333,007 | | |
$ | 11,739,533 | |
SBC
MEDICAL GROUP HOLDINGS INCORPORATED
NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE
17 — RELATED PARTY TRANSACTIONS (cont.)
| Notes
and other payables |
|
June
30,
2025 |
|
|
December
31,
2024 |
|
| Medical
Corporation Shobikai |
|
$ |
710,513 |
|
|
$ |
4,653 |
|
| Medical
Corporation Kowakai |
|
|
582,673 |
|
|
|
14,672 |
|
| Medical
Corporation Nasukai |
|
|
621,202 |
|
|
|
8,827 |
|
| Medical
Corporation Aikeikai |
|
|
228,791 |
|
|
|
2,236 |
|
| Medical
Corporation Jukeikai |
|
|
66,495 |
|
|
|
— |
|
| Medical
Corporation Ritz Cosmetic Surgery |
|
|
82,767 |
|
|
|
1,201 |
|
| General
Incorporated Association SBC |
|
|
979,607 |
|
|
|
— |
|
| Total |
|
|
3,272,048 |
|
|
|
31,589 |
|
| Notes
payable – related parties |
|
|
3,272,048 |
|
|
|
31,589 |
|
| Less:
current portion |
|
|
(3,272,048 |
) |
|
|
(26,255 |
) |
| Notes
payable – related parties Less: current portion |
|
|
(3,272,048 |
) |
|
|
(26,255 |
) |
| Non-current
portion |
|
$ |
— |
|
|
$ |
5,334 |
|
| Due to related party | |
June 30, 2025 | | |
December 31, 2024 | |
| Yoshiyuki Aikawa | |
$ | 2,810,647 | | |
$ | 2,823,590 | |
| Total | |
$ | 2,810,647 | | |
$ | 2,823,590 | |
| Due to related
party | |
$ | 2,810,647 | | |
$ | 2,823,590 | |
| | |
| | |
| |
| | |
For the Six Months Ended June 30, | |
| Allowance for credit loss movement | |
2025 | | |
2024 | |
| Beginning balance | |
$ | 2,836,013 | | |
$ | 3,238,209 | |
| Provision for credit loss | |
| — | | |
| 62,804 | |
| Reversal of credit loss | |
| (70,000 | ) | |
| — | |
| Ending balance | |
$ | 2,766,013 | | |
$ | 3,301,013 | |
The
balances of due to and due from related parties represent the outstanding loans to and from related parties, respectively, as of June
30, 2025 and December 31, 2024. These loans are non-secured, interest-free and due on demand.
In
June 2025, the Company entered into a memorandum of sale
for an aircraft pursuant to the property sales agreement dated August 18, 2023 with General Incorporated Association SBC, an entity controlled
by the CEO of the Company, who is also the controlling shareholder of the Company. The original sale price was increased by approximately
$9.68
million, which was recorded as a deemed contribution in connection with price modification on disposal
of property and equipment in the Company’s unaudited consolidated statements of changes in stockholders’ equity.
Also
see Note 2(a), 9, 12, 13, 16 and 19 for more transactions with related parties.
|