| SCHEDULE OF RELATED PARTY TRANSACTIONS |
During the three and six months ended June 30, 2026 and 2025, the transactions with related parties are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended June 30, |
|
|
For the Six Months
Ended June 30, |
|
Revenues, net |
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
Medical Corporation Shobikai |
|
$ |
12,197,450 |
|
|
$ |
10,962,737 |
|
|
$ |
22,657,872 |
|
|
$ |
22,515,192 |
|
Medical Corporation Kowakai |
|
|
9,380,067 |
|
|
|
8,909,329 |
|
|
|
17,352,078 |
|
|
|
20,022,253 |
|
Medical Corporation Nasukai |
|
|
10,170,478 |
|
|
|
10,244,692 |
|
|
|
19,073,848 |
|
|
|
22,535,537 |
|
Medical Corporation Aikeikai |
|
|
3,416,683 |
|
|
|
3,646,228 |
|
|
|
6,516,096 |
|
|
|
7,288,931 |
|
Medical Corporation Jukeikai |
|
|
1,366,434 |
|
|
|
890,237 |
|
|
|
3,894,728 |
|
|
|
2,064,207 |
|
Medical Corporation Ritz Cosmetic Surgery |
|
|
1,114,270 |
|
|
|
1,044,588 |
|
|
|
1,887,820 |
|
|
|
2,558,211 |
|
Japan Medical & Beauty Inc. |
|
|
45,503 |
|
|
|
10,373 |
|
|
|
55,063 |
|
|
|
20,206 |
|
SBC Co., Ltd., previously known as Harvier, Inc. |
|
|
5,646 |
|
|
|
5,186 |
|
|
|
11,382 |
|
|
|
10,103 |
|
SBC Inc. |
|
|
6,388 |
|
|
|
206 |
|
|
|
6,655 |
|
|
|
314 |
|
Public Interest Foundation SBC Medical Promotion Foundation |
|
|
10 |
|
|
|
30 |
|
|
|
23 |
|
|
|
41 |
|
SBC Tokyo Medical University |
|
|
26,919 |
|
|
|
2,155 |
|
|
|
75,172 |
|
|
|
16,317 |
|
Yoshiyuki Aikawa |
|
|
— |
|
|
|
800 |
|
|
|
— |
|
|
|
29,987 |
|
AI Med Inc. |
|
|
— |
|
|
|
98 |
|
|
|
107 |
|
|
|
190 |
|
SBC Irvine MC |
|
|
— |
|
|
|
37,753 |
|
|
|
— |
|
|
|
239,538 |
|
Medical Corporation Association Furinkai |
|
|
3,070,393 |
|
|
|
2,304,254 |
|
|
|
5,728,400 |
|
|
|
4,938,946 |
|
Medical Corporation Association Junikai |
|
|
2,702,091 |
|
|
|
879,282 |
|
|
|
3,995,803 |
|
|
|
1,948,521 |
|
Skynet Academy Co., Ltd. |
|
|
6,274 |
|
|
|
6,915 |
|
|
|
12,647 |
|
|
|
13,471 |
|
SBC Kijimadaira Resort Inc. |
|
|
— |
|
|
|
35 |
|
|
|
— |
|
|
|
78 |
|
Medical Corporation Misakikai |
|
|
208,720 |
|
|
|
— |
|
|
|
390,353 |
|
|
|
— |
|
General Incorporated Association Miotokai |
|
|
14,868 |
|
|
|
— |
|
|
|
29,207 |
|
|
|
— |
|
Total |
|
$ |
43,732,194 |
|
|
$ |
38,944,898 |
|
|
$ |
81,687,254 |
|
|
$ |
84,202,043 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended June 30, |
|
|
For the Six Months
Ended June 30, |
|
Cost of revenues |
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
Medical Corporation Nasukai |
|
$ |
— |
|
|
$ |
65,959 |
|
|
$ |
— |
|
|
$ |
65,959 |
|
Medical Corporation Aikeikai |
|
|
— |
|
|
|
3,742 |
|
|
|
— |
|
|
|
3,742 |
|
Japan Medical & Beauty Inc. |
|
|
138,593 |
|
|
|
4,502,380 |
|
|
|
262,982 |
|
|
|
7,801,736 |
|
SBC Tokyo Medical University |
|
|
— |
|
|
|
94,295 |
|
|
|
— |
|
|
|
183,689 |
|
SBC Inc. |
|
|
— |
|
|
|
3,226 |
|
|
|
— |
|
|
|
71,404 |
|
Total |
|
$ |
138,593 |
|
|
$ |
4,669,602 |
|
|
$ |
262,982 |
|
|
$ |
8,126,530 |
|
NOTE 17 — RELATED PARTY TRANSACTIONS (cont.)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended June 30, |
|
|
For the Six Months
Ended June 30, |
|
Selling, general and administrative expenses |
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
Medical Corporation Shobikai |
|
$ |
93,286 |
|
|
$ |
354,930 |
|
|
$ |
217,222 |
|
|
$ |
354,930 |
|
Medical Corporation Kowakai |
|
|
19,792 |
|
|
|
3,697 |
|
|
|
26,947 |
|
|
|
3,697 |
|
Medical Corporation Nasukai |
|
|
3,283 |
|
|
|
15,178 |
|
|
|
5,119 |
|
|
|
15,178 |
|
Medical Corporation Aikeikai |
|
|
14,128 |
|
|
|
28,218 |
|
|
|
38,039 |
|
|
|
28,218 |
|
Medical Corporation Jukeikai |
|
|
— |
|
|
|
791 |
|
|
|
863 |
|
|
|
791 |
|
Medical Corporation Association Junikai |
|
|
— |
|
|
|
337 |
|
|
|
— |
|
|
|
337 |
|
Medical Corporation Association Furinkai |
|
|
— |
|
|
|
429 |
|
|
|
— |
|
|
|
429 |
|
SBC Inc. |
|
|
6,179 |
|
|
|
7 |
|
|
|
7,102 |
|
|
|
7 |
|
Japan Medical & Beauty Inc. |
|
|
2,962 |
|
|
|
— |
|
|
|
6,639 |
|
|
|
— |
|
SBC Tokyo Medical University |
|
|
85,548 |
|
|
|
— |
|
|
|
172,454 |
|
|
|
— |
|
General Incorporated Association SBC |
|
|
17,538 |
|
|
|
12,180 |
|
|
|
20,388 |
|
|
|
12,180 |
|
Co-medical Co., Ltd. |
|
|
5,657 |
|
|
|
— |
|
|
|
7,125 |
|
|
|
— |
|
Medical Corporation Misakikai |
|
|
93,137 |
|
|
|
— |
|
|
|
179,787 |
|
|
|
— |
|
Yoshiko Aikawa |
|
|
— |
|
|
|
— |
|
|
|
3,218 |
|
|
|
— |
|
Total |
|
$ |
341,510 |
|
|
$ |
415,767 |
|
|
$ |
684,903 |
|
|
$ |
415,767 |
|
As of June 30, 2026 and December 31, 2025, the balances with related parties are as follows:
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
June 30,
2026 |
|
|
December 31,
2025 |
|
Medical Corporation Shobikai |
|
$ |
10,334,652 |
|
|
$ |
6,618,853 |
|
Medical Corporation Nasukai |
|
|
11,228,286 |
|
|
|
7,268,301 |
|
Medical Corporation Kowakai |
|
|
11,279,357 |
|
|
|
6,930,382 |
|
Medical Corporation Aikeikai |
|
|
3,353,695 |
|
|
|
2,938,667 |
|
Medical Corporation Jukeikai |
|
|
1,130,638 |
|
|
|
920,649 |
|
Medical Corporation Association Furinkai |
|
|
684,630 |
|
|
|
1,065,239 |
|
Medical Corporation Ritz Cosmetic Surgery |
|
|
1,165,338 |
|
|
|
978,614 |
|
Medical Corporation Association Junikai |
|
|
1,480,539 |
|
|
|
700,794 |
|
SBC Tokyo Medical University |
|
|
6,141 |
|
|
|
5,614 |
|
AI Med Inc. |
|
|
— |
|
|
|
33 |
|
SBC Inc. |
|
|
2,837 |
|
|
|
382 |
|
Public Interest Foundation SBC Medical Promotion Foundation |
|
|
26 |
|
|
|
30 |
|
General Incorporated Association SBC |
|
|
— |
|
|
|
5,171 |
|
Medical Corporation Misakikai |
|
|
77,442 |
|
|
|
73,734 |
|
General Incorporated Association Miotokai |
|
|
5,105 |
|
|
|
5,267 |
|
Total |
|
$ |
40,748,686 |
|
|
$ |
27,511,730 |
|
|
|
|
|
|
|
|
|
|
Short-term investments |
|
June 30,
2026 |
|
|
December 31,
2025 |
|
MEDIROM Healthcare Technologies Inc. |
|
$ |
307,922 |
|
|
$ |
319,193 |
|
Total |
|
$ |
307,922 |
|
|
$ |
319,193 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months Ended June 30, |
|
|
For the three Months Ended June 30, |
|
Interest Income |
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
MEDIROM Healthcare Technologies Inc. |
|
$ |
3,465 |
|
|
$ |
— |
|
|
$ |
3,465 |
|
|
$ |
— |
|
Total |
|
$ |
3,465 |
|
|
$ |
— |
|
|
$ |
3,465 |
|
|
$ |
— |
|
In December 2025, the Company purchased unsecured convertible bonds issued by MEDIROM with a principal amount of JPY50,000,000, which are recorded as short-term investments - related parties. In June 2026, MEDIROM exercised its option to extend the maturity date of these bonds from June 30, 2026 to December 25, 2026, in accordance with the original terms. Consequently, the period for exercising the conversion rights was also extended to December 7, 2026. NOTE 17 — RELATED PARTY TRANSACTIONS (cont.)
|
|
|
|
|
|
|
|
|
Finance lease receivables |
|
June 30,
2026 |
|
|
December 31,
2025 |
|
Medical Corporation Shobikai |
|
$ |
4,859,860 |
|
|
$ |
4,830,319 |
|
Medical Corporation Kowakai |
|
|
4,566,734 |
|
|
|
5,586,393 |
|
Medical Corporation Nasukai |
|
|
6,487,466 |
|
|
|
6,633,510 |
|
Medical Corporation Aikeikai |
|
|
1,766,974 |
|
|
|
2,206,227 |
|
Medical Corporation Ritz Cosmetic Surgery |
|
|
1,369,095 |
|
|
|
1,885,804 |
|
Medical Corporation Jukeikai |
|
|
2,013,596 |
|
|
|
953,857 |
|
Medical Corporation Association Furinkai |
|
|
1,549,640 |
|
|
|
1,432,106 |
|
Medical Corporation Association Junikai |
|
|
2,777,294 |
|
|
|
3,033,529 |
|
SBC Shonan Osteopathic Clinic Inc. |
|
|
8,899 |
|
|
|
17,123 |
|
Total |
|
|
25,399,558 |
|
|
|
26,578,868 |
|
Less: current portion |
|
|
(13,725,781 |
) |
|
|
(12,832,355 |
) |
Non-current portion |
|
$ |
11,673,777 |
|
|
$ |
13,746,513 |
|
|
|
|
|
|
|
|
|
|
Other receivables |
|
June 30,
2026 |
|
|
December 31,
2025 |
|
Medical Corporation Shobikai |
|
$ |
499,790 |
|
|
$ |
— |
|
Medical Corporation Kowakai |
|
|
386,284 |
|
|
|
— |
|
Medical Corporation Nasukai |
|
|
364,984 |
|
|
|
— |
|
Medical Corporation Aikeikai |
|
|
163,488 |
|
|
|
— |
|
Medical Corporation Jukeikai |
|
|
71,079 |
|
|
|
— |
|
Medical Corporation Ritz Cosmetic Surgery |
|
|
74,896 |
|
|
|
— |
|
Total |
|
$ |
1,560,521 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
Due from related party, net |
|
June 30,
2026 |
|
|
December 31,
2025 |
|
SBC Irvine MC |
|
$ |
— |
|
|
$ |
2,762,999 |
|
Less: allowance for credit loss |
|
|
— |
|
|
|
(2,762,999 |
) |
Total |
|
$ |
— |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
Long-term investments in MCs |
|
June 30,
2026 |
|
|
December 31,
2025 |
|
Medical Corporation Shobikai |
|
$ |
6,158 |
|
|
$ |
6,384 |
|
Medical Corporation Kowakai |
|
|
6,158 |
|
|
|
6,384 |
|
Medical Corporation Nasukai |
|
|
6,158 |
|
|
|
6,384 |
|
Medical Corporation Aikeikai |
|
|
6,158 |
|
|
|
6,384 |
|
Medical Corporation Jukeikai |
|
|
6,623,756 |
|
|
|
6,866,219 |
|
Medical Corporation Ritz Cosmetic Surgery |
|
|
10,559,026 |
|
|
|
10,945,538 |
|
Total |
|
$ |
17,207,414 |
|
|
$ |
17,837,293 |
|
|
|
|
|
|
|
|
|
|
Accounts payable |
|
June 30,
2026 |
|
|
December 31,
2025 |
|
Japan Medical & Beauty Inc. |
|
$ |
339,021 |
|
|
$ |
48,839 |
|
Medical Corporation Shobikai |
|
|
148,487 |
|
|
|
230,354 |
|
Medical Corporation Kowakai |
|
|
69,138 |
|
|
|
101,565 |
|
Medical Corporation Nasukai |
|
|
89,285 |
|
|
|
127,750 |
|
Medical Corporation Aikeikai |
|
|
41,826 |
|
|
|
57,068 |
|
Medical Corporation Jukeikai |
|
|
12,663 |
|
|
|
8,718 |
|
Medical Corporation Association Furinkai |
|
|
10,748 |
|
|
|
11,674 |
|
Medical Corporation Ritz Cosmetic Surgery |
|
|
5,486 |
|
|
|
10,462 |
|
General Incorporated Association SBC |
|
|
70,272 |
|
|
|
536 |
|
SBC Tokyo Medical University |
|
|
30,792 |
|
|
|
31,919 |
|
SBC Shonan Osteopathic Clinic Inc. |
|
|
526 |
|
|
|
958 |
|
Medical Corporation Misakikai |
|
|
32,762 |
|
|
|
21,620 |
|
Yoshiyuki Aikawa |
|
|
80,804 |
|
|
|
— |
|
Total |
|
$ |
931,810 |
|
|
$ |
651,463 |
|
NOTE 17 — RELATED PARTY TRANSACTIONS (cont.)
|
|
|
|
|
|
|
|
|
Advances from customers |
|
June 30,
2026 |
|
|
December 31,
2025 |
|
Medical Corporation Shobikai |
|
$ |
1,089,290 |
|
|
$ |
1,712,820 |
|
Medical Corporation Kowakai |
|
|
748,119 |
|
|
|
1,145,776 |
|
Medical Corporation Nasukai |
|
|
715,815 |
|
|
|
1,098,435 |
|
Medical Corporation Aikeikai |
|
|
282,926 |
|
|
|
430,305 |
|
Medical Corporation Jukeikai |
|
|
399,176 |
|
|
|
100,808 |
|
Medical Corporation Ritz Cosmetic Surgery |
|
|
261,900 |
|
|
|
64,569 |
|
Medical Corporation Association Furinkai |
|
|
253,177 |
|
|
|
370,797 |
|
Medical Corporation Association Junikai |
|
|
243,447 |
|
|
|
433,711 |
|
Total |
|
$ |
3,993,850 |
|
|
$ |
5,357,221 |
|
|
|
|
|
|
|
|
|
|
Due to related party |
|
June 30,
2026 |
|
|
December 31,
2025 |
|
Yoshiyuki Aikawa |
|
$ |
— |
|
|
$ |
2,692,673 |
|
Total |
|
$ |
— |
|
|
$ |
2,692,673 |
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months
Ended June 30, |
|
Allowance for credit loss movement |
|
2026 |
|
|
2025 |
|
Beginning balance |
|
$ |
2,762,999 |
|
|
$ |
2,836,013 |
|
Provision for credit loss |
|
|
— |
|
|
|
— |
|
Reversal of credit loss |
|
|
— |
|
|
|
(70,000 |
) |
Write-off |
|
|
(2,762,999 |
) |
|
|
— |
|
Ending balance |
|
$ |
— |
|
|
$ |
2,766,013 |
|
|