v3.26.3
Business Combinations
 12 Months Ended
Apr. 30, 2026
Business Combinations [Abstract]  
Business Combinations

Note 4 – Business Combinations

 

Overview

 

On January 20, 2026 (the “Acquisition Date”), the Company completed the transactions contemplated by the Share Exchange Agreement, dated December 28, 2025 (the “Share Exchange Agreement”), by and among the Company, PML, and the shareholders of PML named therein, pursuant to which the Company acquired 100% of the outstanding Class A and Class B ordinary shares of PML. As a result of the transaction, PML became a wholly owned subsidiary of the Company (the “Acquisition”). In connection with the Acquisition, the Company changed its name from “Earlyworks Co., Ltd.” to “Perpetuals.com Ltd.,” effective January 20, 2026, following approval by the Company’s shareholders at an extraordinary general meeting held on January 16, 2026.

 

PML, together with the subsidiaries included in the Acquisition, operates a financial markets infrastructure and technology-services business, including software-as-a-service and related trading-infrastructure technology. PML licenses core technology from PM MTF Ltd. (“MTF”) The SEA granted the Company a put and call option to acquire MTF for the nominal amount of $1,000.

 

The Acquisition was accounted for as a business combination in accordance with ASC 805, Business Combinations, using the acquisition method of accounting, with the Company as the accounting acquirer. The results of PML’s operations are included in the Company’s consolidated financial statements from the Acquisition Date.

 

Consideration

 

The fair value of the consideration transferred is as follows:

 

    JPY  
Cash consideration     547,120,001  
Ordinary shares issued (American Depositary Shares)     539,322,124  
Series P preference shares issued (American Depositary Shares)     6,165,219,979  
Deferred cash consideration     1,743,333,735  
Total fair value of consideration transferred     8,994,995,839  

 

The deferred cash consideration of JPY1,743,333,735 (USD11,128,136) is payable under the Share Exchange Agreement and is recorded within other payables. Since the Company has established commercial and licensing relationships with MTL, the put and call options provided for in the Share Exchange Agreement were determined to have no fair value at the Acquisition Date. Ordinary shares and Series P preference shares issued as consideration are measured at their Acquisition Date fair value.

 

Purchase price allocation

 

The table below presents the acquired PML subgroup’s consolidated carrying amounts as of January 20, 2026. The measurement period under ASC 805 ends on January 20, 2027.

 

Acquired assets and liabilities   Acquisition-date
fair value		  
    JPY  
Cash and cash equivalents     106,184,507  
Receivables from related parties     57,560,754  
Prepayments, consumption tax receivables and other current assets     28,334,214  
Property and equipment     129,438,101  
Operating lease right-of-use assets     48,151,086  
Total assets     369,668,662  
Accounts payable, accrued liabilities and other payables     (11,491,786 )
Payables to related parties     (162,389,093 )
Short-term borrowings     (17,237,279 )
Indebtedness to related parties     (578,530,153 )
Operating lease liabilities     (48,149,089 )
Post-employment benefits liability     (6,270,652 )
Mezzanine equity        
Virtual Shares     (323,826,972 )
Total liabilities and mezzanine equity     (1,147,895,024 )
Net liabilities     (778,226,362 )
Foreign currency translation adjustment     75,326  
Fair value of consideration transferred     8,994,995,839  
Acquisition goodwill     9,773,146,875  

 

The acquired subgroup’s historical goodwill is not carried forward as a separately identifiable asset in the Company’s acquisition accounting. Acquisition goodwill is determined as the excess of consideration transferred over the acquisition-date fair value of identifiable net assets acquired. The PML subgroup’s historical equity balances, including accumulated deficit and cumulative translation adjustment, are eliminated in consolidation and are not carried forward into the Company’s post-Acquisition shareholders’ equity. No separately identifiable intangible assets were recognized in the acquisition accounting, and accordingly no deferred tax liability arose on the allocation. The acquired subgroup’s capitalized software of JPY272,292,345 (USD1,738,110) was not recognized as an identifiable asset at the Acquisition Date. Goodwill recognized on the Acquisition is denominated in the functional currencies of the acquired entities and is translated at the closing rate at each reporting date. Goodwill is not deductible for income tax purposes. The measurement period remains open and the allocation is provisional pending completion of the independent valuation.

 

Results included since the Acquisition Date

 

The following amounts represent the acquired PML subgroup’s results included in the consolidated statement of operations from the Acquisition Date through April 30, 2026:

 

    January 20,
2026
through
April 30,
2026		  
    JPY  
Revenue, net     13,200,204  
Net loss     (319,862,071 )

 

Acquisition-related expenses

 

Acquisition-related expenses are expensed as incurred and included in general and administrative expenses, except for costs associated with issuing debt or equity securities, which are accounted for under the applicable U.S. GAAP guidance.

 

Supplemental pro forma financial information (unaudited)

 

The following unaudited financial information presents PML’s historical financial position and results of operations on a standalone basis as of the dates and for the periods indicated. All amounts are presented in euros. This information relates solely to PML and does not present the combined pro forma financial position or results of operations of the Company and PML. There were no intercompany transactions between the Company and PML during either of the two years presented.

 

    As of
April 30,
2024		     As of
April 30,
2025		  
    Euro     Euro  
Cash     204,682-       588,182  
Trade accounts receivable, net     -       130,446  
Receivables from related parties     1,100-       17,065  
Value added tax receivable     13,163       97,265  
Other receivables – Sale of Investment     -       17,939  
Other receivables     1,133       6,965  
Prepayments and other current assets     3,094       11,190  
                 
Total current assets     223,172       869,052  
                 
Property and equipment, net     -       210,190  
Equity method investments     -       64,162  
Operating right-of-use assets     -       302,601  
                 
Total Non-current assets     -       576,953  
                 
Total assets     223,172       1,446,005  
                 
Trade accounts payable     (6,627 )     (51,261 )
Accrued expenses     (9,584 )     (62,395 )
Value added tax payable     -       (62,769 )
Other payables     -       (5,033 )
Payables to related parties     (2,037 )     (206,382 )
Loans to related parties, current     -       (40,250 )
Operating lease liabilities, current     -       (106,081 )
                 
Total current liabilities     (18,248 )     (534,171 )
                 
Long-term liabilities:                
Loans to related parties, noncurrent     (406,932 )     (1,096,679 )
Operating lease liabilities, noncurrent     -       (188,350 )
Post-employment retirement benefits liability     -       (34,127 )
                 
Total non-current liabilities     (406,932 )     (1,319,156 )
                 
Total liabilities     (425,180 )     (1,853,327 )
                 
Commitments and contingencies                
Mezzanine equity:Participating Convertible Preference Virtual Shares: nil and 470 shares as of April 30, 2024, and 2025, respectively     -       (1,762,357 )
Shareholders’ deficit:                
Class A Ordinary Voting Shares, par value €1 per share: 2,000 shares authorized, issued, and outstanding as of April 30, 2024 and 2025, respectively     (2,000 )     (2,000 )
Class B Ordinary Non-Voting Shares, par value €1 per share: nil and 100,000 shares authorized as of April 30, 2024 and 2025, respectively; nil and 18,000 shares issued and outstanding as of April 30, 2024 and 2025, respectively     -       (18,000 )
Class C Redeemable Preference Shares, par value €1 per share: nil and 10,000 shares authorized as of April 30, 2024 and 2025, respectively; nil shares issued and outstanding as of April 30, 2024 and 2025     -       -  
Additional paid-in capital     -       -  
Accumulated deficit     203,818       2,193,439  
Accumulated other comprehensive income     190       (3,760 )
                 
Total shareholders’ deficit     202,008       2,169,679  
                 
Total liabilities, mezzanine equity and shareholders’ deficit     (223,172 )     (1,446,005 )

 

 

    For the year ended
April 30,
2024		     For the year ended
April 30,
2025		  
    Euro     Euro  
Revenue, net     -       (340,581 )
                 
Cost of revenue     -       199,440  
                 
Gross income     -       (141,141 )
                 
General and administrative expenses     193,949       1,388,257  
Research and development expenses     -       785,426  
Operating Loss     193,949       2,173,683  
                 
Interest expenses, net     6,933       127,206  
Gain from the sale of controlling interests in ESGCX     -       (179,174 )
Impairment of goodwill     -       82,379  
Foreign currency remeasurement gain     -       (77,203 )
Other (expense) income, net     2,936       1,322  
                 
Total other income (expense), net     9,869       (45,470 )
                 
LOSS BEFORE INCOME TAXES     203,818       1,987,072  
                 
Provision for income tax     -       -  
                 
Loss before equity in net loss of equity method investment     203,818       1,987,072  
                 
Equity in losses of equity method investee     -       2,549  
                 
Net Loss     203,818       1,989,621  
                 
Weighted average shares                
Basic     2,000       11,541  
Diluted     2,000       11,541  
Loss per share (basic)     101.91       172.40  
Loss per share (diluted)     101.91       172.40  
                 
Other comprehensive loss:                
Foreign currency translation adjustments     190       (3,950 )
Release of cumulative translation adjustment upon disposal of a foreign subsidiary                
                 
Total comprehensive loss     204,008       1,985,671