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☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended
September 30,
2025
OR
☐
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:
001-41462
SBC Medical Group Holdings Incorporated
(Exact Name of Registrant as Specified in Its Charter)
Delaware
88-1192288
(State or Other Jurisdiction of
Incorporation or Organization)
(I.R.S. Employer
Identification Number)
200 Spectrum Center Dr. STE 300
Irvine
,
CA
92618
(Address of Principal Executive Offices)
(Zip Code)
949
-
593-0250
(Registrant’s telephone number, including area code)
Not Applicable
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, $0.0001 par value per share
SBC
The Nasdaq Stock Market LLC
Redeemable Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share
SBCWW
The Nasdaq Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes
☒
No
☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes
☒
No
☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
☐
Accelerated filer
☐
Non-accelerated filer
☒
Smaller reporting company
☒
Emerging growth company
☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
☐
No
☒
As of October 31, 2025, the registrant had
102,576,943
shares of Common Stock outstanding.
SBC Medical Group Holdings Incorporated uses its website (https://sbc-holdings.com/en) to distribute company information and makes available free of charge a variety of information for investors, including our filings with the Securities and Exchange Commission (“SEC”), as soon as reasonably practicable after electronically filing that material with, or furnishing it, to the SEC. The information that we post on our website may be deemed material. Accordingly, investors should monitor our website, in addition to following our press releases, filings with the SEC, and public conference calls and webcasts. In addition, investors may opt in to automatically receive email alerts and other information about us when enrolling their email address by visiting the “Email Alerts” section under the “Resources” tab on our website. We do not incorporate the information contained on, or accessible through, our website or related social media channels into this Quarterly Report on Form 10-Q (“Quarterly Report”).
This Quarterly Report contains forward-looking statements regarding, among other things, the plans, strategies and prospects, both business and financial, of the Company. These statements are based on the beliefs and assumptions of the management of the Company. Although the Company believes that its plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, the Company cannot assure you that it will achieve or realize these plans, intentions or expectations.
Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Generally, statements that are not historical facts, including statements concerning possible or assumed future actions, business strategies, events or results of operations, are forward-looking statements. These statements may be preceded by, followed by or include the words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” or similar expressions, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements contained in this Quarterly Report include, but are not limited to, statements about:
•
future financial performance of the Company;
•
changes in the market and level of demand for our products and services;
•
the expansion plans and opportunities of the Company;
•
the ability of the Company to access additional capital;
•
the ability of the Company to maintain the listing of the Company’s common stock on Nasdaq;
•
public securities’ potential liquidity and trading;
•
the impact from the outcome of any known and unknown litigation;
•
the ability of the Company to forecast and maintain an adequate rate of revenue growth and appropriately plan its expenses;
•
expectations regarding future expenditures of the Company;
•
the future mix of revenue and effect on gross margins of the Company;
•
the attraction and retention of qualified directors, officers, employees and key personnel of the Company;
•
the ability to protect and enhance the Company’s corporate reputation and brand;
•
expectations concerning the relationships and actions of the Company and its affiliates with third parties;
•
the impact from future regulatory, judicial, and legislative changes in the Company’s industry;
•
the ability to locate and acquire complementary products or product candidates and integrate those into the Company’s business;
•
future arrangements with, or investments in, other entities or associations;
•
intense competition and competitive pressures from other companies in the industries in which the Company operates;
•
the possibility that the Company may be adversely affected by other economic, business, and/or competitive factors; and
•
other factors detailed under “Part I, Item 1A. Risk Factors” of the Annual Report on Form 10-K filed with the SEC by the Company on March 28, 2025 (the “Annual Report”).
These forward-looking statements are based on information available as of the date of this Quarterly Report, and current expectations, forecasts and assumptions, and involve a number of risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the foregoing cautionary statements.
New risk factors emerge from time to time and it is not possible to predict all such risk factors, nor can the Company assess the impact of all such risk factors on the business of the Company, or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. As a result of a number of known and unknown risks and uncertainties, the actual results or performance of the Company may be materially different from those expressed or implied by these forward-looking statements. These and other factors that could cause actual results to differ from those implied by the forward-looking statements in this Quarterly Report are more fully described elsewhere in this Quarterly Report and the Annual Report, particularly in “Part I, Item 1A. Risk Factors” of the Annual Report.
Preferred stock ($
0.0001
par value,
20,000,000
shares authorized;
no
shares issued and outstanding as of September 30, 2025 and December 31, 2024)
—
—
Common stock ($
0.0001
par value,
400,000,000
shares authorized,
103,881,251
and
103,020,816
shares issued,
102,576,943
and
102,750,816
shares outstanding as of September 30, 2025 and December 31, 2024, respectively)
10,388
10,302
Additional paid-in capital
72,196,114
62,513,923
Treasury stock (at cost,
1,304,308
and
270,000
shares as of September 30, 2025 and December 31, 2024, respectively)
(
7,749,997
)
(
2,700,000
)
Retained earnings
226,248,329
189,463,007
Accumulated other comprehensive loss
(
42,716,542
)
(
54,178,075
)
Total SBC Medical Group Holdings Incorporated stockholders’ equity
247,988,292
195,109,157
Non-controlling interests
70,909
(
86,999
)
Total stockholders’ equity
248,059,201
195,022,158
Total liabilities and stockholders’ equity
$
321,363,085
$
266,083,154
The accompanying notes are an integral part of these unaudited consolidated financial statements.
UNAUDITED CONSOLIDATED ST
ATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
For the Three Months
Ended September 30,
For the Nine Months
Ended September 30,
2025
2024
2025
2024
Revenues, net – related parties
$
39,617,548
$
51,209,243
$
123,819,591
$
152,718,488
Revenues, net
3,735,687
1,875,640
10,221,192
8,276,517
Total revenues, net
43,353,235
53,084,883
134,040,783
160,995,005
Cost of revenues (including cost of revenues from related parties of $
4,018,377
and $
2,039,492
for the three months ended September 30, 2025 and 2024, and $
12,144,907
and $
7,452,954
for the nine months ended September 30, 2025 and 2024, respectively)
12,741,748
9,845,793
35,685,635
38,816,865
Gross profit
30,611,487
43,239,090
98,355,148
122,178,140
Operating expenses:
Selling, general and administrative expenses (including selling, general and administrative expenses from related parties of $
154,063
and
nil
for the three months ended September 30, 2025 and 2024, and $
569,830
and
nil
for the nine months ended September 30, 2025 and 2024, respectively)
14,730,247
16,597,032
43,717,642
43,784,637
Stock-based compensation
—
12,807,455
—
12,807,455
Total operating expenses
14,730,247
29,404,487
43,717,642
56,592,092
Income from operations
15,881,240
13,834,603
54,637,506
65,586,048
Other income (expenses):
Interest income
120,384
7,950
198,599
37,283
Interest expense
(
48,635
)
(
5,466
)
(
104,493
)
(
15,898
)
Other income (including other income from related party of $
3,069
and
nil
for the three months ended September 30, 2025 and 2024, and $
3,069
and
nil
for the nine months ended September 30, 2025 and 2024, respectively)
2,526,035
65,922
2,711,134
721,894
Other expenses
(
6,564
)
(
795,158
)
(
2,836,288
)
(
2,746,450
)
Gain on redemption of life insurance policies
—
—
8,746,138
—
Change in fair value of cryptocurrencies
34,404
—
146,036
—
Gain on disposal of subsidiary
—
—
—
3,813,609
Total other income (expenses)
2,625,624
(
726,752
)
8,861,126
1,810,438
Income before income taxes
18,506,864
13,107,851
63,498,632
67,396,486
Income tax expense
5,673,538
10,273,384
26,733,504
27,254,478
Net income
12,833,326
2,834,467
36,765,128
40,142,008
Less: net income (loss) attributable to non-controlling interests
8,690
1,573
(
20,194
)
66,954
Net income attributable to SBC Medical Group Holdings Incorporated
$
12,824,636
$
2,832,894
$
36,785,322
$
40,075,054
Other comprehensive income (loss):
Foreign currency translation adjustment
$
(
6,791,961
)
$
20,783,646
$
11,639,635
$
1,543,245
Total comprehensive income
6,041,365
23,618,113
48,404,763
41,685,253
Less: comprehensive income attributable to non-controlling interests
10,329
180,093
157,908
110,093
Comprehensive income attributable to SBC Medical Group Holdings Incorporated
$
6,031,036
$
23,438,020
$
48,246,855
$
41,575,160
Net income per share attributable to SBC Medical Group Holdings Incorporated
Basic and diluted
$
0.12
$
0.03
$
0.36
$
0.42
Weighted average shares outstanding
Basic and diluted
102,642,634
95,095,144
103,139,851
94,495,533
The accompanying notes are an integral part of these unaudited consolidated financial statements.
NOTES TO UNAUDITED CONSOLI
DATED FINANCIAL STATEMENTS
NOTE 1 — ORGANIZATION AND DESCRIPTION OF BUSINESS
Business Overview
SBC Medical Group Holdings Incorporated (“SBC Holding”) was originally incorporated under the laws of the state of Delaware on March 11, 2022 as a special purpose acquisition corporation under the name Pono Capital Two, Inc. (“Pono”) for the purpose of entering into a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.
SBC Medical Group, Inc. (formerly known as SBC Medical Group Holdings Incorporated, “SBC USA”, “Legacy SBC”), through its consolidated subsidiaries and variable interest entity (“VIE”), is principally engaged in medical industry to provide comprehensive management services to the medical corporations and their clinics, including but not limited to licensure of the use of the trademark and brand name of “Shonan Beauty Clinic”, sales of medical equipment, medical consumables procurement services, and management of customer’s loyalty program, etc.
Reverse Recapitalization
On September 17, 2024, Pono consummated the merger transaction pursuant to the agreement by and among Pono, Pono Two Merger Sub, Inc., a Delaware corporation (“Merger Sub”) and a wholly-owned subsidiary of Pono, and SBC USA (the “Merger Agreement”), whereby Merger Sub merged with and into SBC USA, the separate corporation existence of Merger Sub ceased and SBC USA survived the merger as a wholly owned subsidiary of Pono (“Pono Merger”). In connection with the consummation of Pono Merger, Pono changed its name to “SBC Medical Group Holdings Incorporated” and SBC USA changed its name to “SBC Medical Group, Inc.” and, among other transactions contemplated by the Merger Agreement, the existing equity holders of SBC USA exchanged their equity interests of SBC USA for equity interests of Pono.
On September 17, 2024, the Company received net cash of $
11,707,417
from Pono Merger. The Company also assumed $
416,799
in prepaid expenses and other current assets, $
1,108
in accounts payable, $
14,431
in income tax payable, $
2,700,000
in convertible note payable, which was subsequently converted to
270,000
shares upon the consummation of Pono Merger, $
1,000,789
in accrued liabilities and other current liabilities, common stock of $
508
and additional paid-in capital of $
8,407,380
.
The total funds from Pono Merger of $
11,707,417
were available to repay certain indebtedness, transaction costs and for general corporate purposes, which primarily consisted of investment banking, legal, accounting, and other professional fees as follows:
Cash—Pono working capital cash
$
766,735
Cash—Pono trust
16,731,409
Less: transaction costs and advisory fees
5,790,727
Net proceeds from Pono Merger
$
11,707,417
Pono Merger was accounted for as a reverse recapitalization under the accounting principles generally accepted in the United States of America (“U.S. GAAP”). SBC USA was determined to be the accounting acquirer and Pono was treated as the acquired company for financial reporting purposes. Accordingly, the financial statements of the combined company represent a continuation of the financial statements of SBC USA.
Unless the context indicates otherwise, any references herein to the “Company”, “we”, “us” and “our” refer to 1) SBC USA and its consolidated subsidiaries and VIE, prior to the consummation of Pono Merger, and to 2) SBC Holding and its consolidated subsidiaries and VIE, following Pono Merger; and reference herein to “Pono” refers to SBC Holding prior to the consummation of Pono Merger.
Reorganization
In June 2020 and April 2022, SBC Inc., a company incorporated in Japan in June 2007, and Advice Innovation Co., Ltd., a company incorporated in Japan in December 2018, were merged with and into SBC Medical Group Co., Ltd. (“SBC Japan”), respectively, with SBC Japan being the surviving entity in such mergers. SBC Japan is a company incorporated in Japan in September 2017 and previously known as Aikawa Medical Management Co., Ltd.
In April 2023, SBC Japan acquired
100
% equity interest of L’Ange Cosmetique Co., Ltd. (“L’Ange Sub”), a company incorporated in Japan in June 2003, and Shobikai Co., Ltd. (“Shobikai Sub”), a company incorporated in Japan in June 2014, through share exchange. As a result, L’Ange Sub and Shobikai Sub became wholly owned subsidiaries of SBC Japan.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 — ORGANIZATION AND DESCRIPTION OF BUSINESS
(cont.)
In August 2023, SBC Japan and L’Ange Sub disposed of their entire equity interest in Ai Inc. and Lange Inc., respectively, both incorporated in the Federated States of Micronesia in January 2022, for cash. As a result, Ai Inc. and Lange Inc. cease to be subsidiaries of the Company, with the related investment in capital being treated as a deemed distribution and the disposal proceeds treated as a deemed contribution.
In September 2023, SBC USA acquired
100
% equity interest of SBC Japan through share exchange with one share of its common stock. As a result, SBC Japan became a wholly owned subsidiary of SBC USA.
The above reorganization has been accounted for as a recapitalization among entities under common control since the same controlling shareholder controlled these entities before and after the reorganization. The consolidation of the Company has been accounted for at historical cost and prepared on the basis as if the transactions had become effective as of the beginning of the earliest period presented in the accompanying consolidated financial statements.
Corporate Structure
As of
September 30, 2025, the Company’s major subsidiaries and VIE are as follows:
Name
Place of
Incorporation
Date of
Incorporation or
Acquisition
Percentage of
Ownership
Principal
Activities
SBC Medical Group, Inc.
US
January 20, 2023
100
%
Investment holding
SBC Medical Group Co., Ltd.*
Japan
June 18, 2003
100
%
Franchising, procurement, management and rental services
Liesta Co., Ltd.
Japan
December 15, 2020
100
%
Real estate brokerage services
SBC Sealane Co., Ltd.
Japan
June 7, 2022
100
%
Construction services
SBC Marketing Co., Ltd.
Japan
June 30, 2022
100
%
Marketing services
Medical Payment Co., Ltd.
Japan
June 30, 2022
75
%
Loan services
SBC Medical Consulting Co., Ltd.
Japan
August 2, 2022
100
%
Human resource services
MB Career Lounge Co., Ltd.
Japan
July 17, 2025
100
%
Management supporting services
Shoubikai Medical Vietnam Co., Ltd.
Vietnam
August 29, 2013
100
%
Cosmetic clinic
SBC Irvine, LLC *
United States
December 27, 2018
100
%
Management services for cosmetic clinic in the United States
SBC Healthcare Inc.
United States
December 16, 2019
100
%
Management services for cosmetic clinic in the United States
Aesthetic Healthcare Holdings Pte. Ltd.
Singapore
November 20, 2024
100
%
Investment holding
Wen & Weng Family Clinic Pte. Ltd. **
Singapore
November 20, 2024
100
%
General outpatient medical services
Wen & Weng Medical Group Pte. Ltd. **
Singapore
November 20, 2024
100
%
Healthcare-related businesses
Rochor Clinic Pte. Ltd. **
Singapore
November 20, 2024
100
%
General outpatient medical services
Dermasolutions Pte. Ltd. **
Singapore
November 20, 2024
100
%
Cosmetic and dermatological treatments and products
Dermasolutions Services Pte. Ltd. **
Singapore
November 20, 2024
100
%
Cosmetic services and products
SBC MEDICAL APAC PTE, LTD.
Singapore
March 26, 2025
100
%
Asia-Pacific regional headquarters
Aikawa Medical Management, Inc.
United States
May 10, 2017
VIE
Management services for cosmetic clinic in the United States
*
In January 2025, the Company effected a merger in which SBC Japan and Shobikai Sub merged with and into L’Ange Sub. As a result, the separate corporate existence of SBC Japan and Shobikai Sub ceased, with L’Ange Sub continuing as the surviving company. Following the merger, L’Ange Sub changed its name to SBC Medical Group Co., Ltd., which is herein referred to as “SBC Japan.”
**
Subsidiaries of Aesthetic Healthcare Holdings Pte. Ltd. (“AHH”)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of Presentation and Principles of Consolidation
The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. GAAP and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).
The unaudited consolidated financial statements do not include all of the information and disclosure required by U.S. GAAP for complete financial statements. Interim results are not necessarily indicative of results for a full year. In the opinion of management, all adjustments consisting of a normal recurring nature considered necessary for a fair presentation of the financial position and the results of operations and cash flows for the interim periods have been included. The unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes for the year ended December 31, 2024.
The unaudited consolidated financial statements include the financial statements of the Company, its subsidiaries, and consolidated VIE for which the Company is the primary beneficiary. The results of the subsidiaries are consolidated from the date on which the Company obtained control and continue to be consolidated until the date that such control ceases. All significant transactions and balances among the Company’s subsidiaries, including the VIE, have been eliminated upon consolidation.
The Company reports AHH and its subsidiaries, which were acquired in November 2024, on a three-month calendar lag allowing for the timely preparation of financial statements. This three-month reporting lag is with the exception of significant transactions or events that occur during the intervening period, if any.
Variable Interest Entities
In accordance with ASC Topic 810, “Consolidation”, the Company identifies its variable interests and analyzes to determine if the entity in which the Company has a variable interest is a VIE. Determination if a variable interest is a VIE includes both quantitative and qualitative consideration. For those entities determined to be VIEs within the scope of the VIE model, a further quantitative and qualitative analysis is performed to determine if the Company is deemed the primary beneficiary. The primary beneficiary is the party who has the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and who has an obligation to absorb losses of the entity or a right to receive benefits from the entity that could potentially be significant.
The Company would consolidate those entities in which it is determined to be the primary beneficiary. The Company based its qualitative analysis on its review of the design of the entity, its organizational structure including decision-making ability and the relevant development, operating management and financial agreements.
The Company evaluates its relationship with its VIE on an ongoing basis to determine whether it continues to be the primary beneficiary of its consolidated VIE, or whether it has become the primary beneficiary of the VIE it does not consolidate.
Voting Model
If a legal entity fails to meet any of the three characteristics of a VIE, we then evaluate such entity under the voting model. Under the voting model, we consolidate the entity if we determine that we, directly or indirectly, have greater than 50% of the voting rights and that other equity holders do not have substantive participating rights.
Assessment of Medical Corporations in Japan
SBC Japan is designated as a medical service corporation (the “MSC”) to provide services to the Medical Corporations (the “MCs”) in Japan.
To maintain and strengthen the business relationship, the Company has acquired equity interests in the following MCs throughout the years.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(cont.)
As non-profit organizations, MCs are required to comply with the medical-related laws and regulations of the Japanese Medical Care Act (the “Act”, “Medical Care Act”). In accordance with the Act, the highest authority of MCs is its general meeting of members (the “Members”), with each Member having one voting right. The Company, through the MSCs, has no right to elect the Members, no decision-making ability and no right to dividend or any profit distribution, but has the right to receive distribution of the residual assets of the MCs.
Since the not-for-profit entities scope exception to the variable interest model is applicable to the MCs, the Company evaluates its business relationship, franchisor-franchisee agreements and/or services agreements with the MCs in Japan under the voting model. The Company has concluded that consolidation of the MCs is not appropriate for the periods presented as it does not have a majority voting interest in the Members of the MCs nor does it have a controlling financial interest in the MCs. The equity interests in the MCs held by the Company are recorded as long-term investments in MCs — related parties on the unaudited consolidated balance sheets. The transactions between the Company and the MCs are disclosed in Note 18
— Related Party Transactions.
(b) Foreign Currency
The Company maintains its books and record in its local currency, mainly Japanese YEN (“JPY” or “¥”), which is a functional currency as being the primary currency of the economic environment in which its operation is conducted. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the unaudited statements of operations.
The reporting currency of the Company is the United States Dollars (“US$” or “$”), and the accompanying financial statements have been expressed in US$. In accordance with ASC Topic 830-30, “Translations of Financial Statements”, assets and liabilities of the Company whose functional currency is not US$ are translated into US$, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from the translation of financial statements are recorded as a separate component of accumulated other comprehensive loss within the unaudited statements of changes in stockholders’ equity.
Translation of amounts from local currency of the Company into US$1 has been made at the following exchange rates:
September 30, 2025
September 30, 2024
Current JPY:US$1 exchange rate
148.0770
142.8410
Average JPY:US$1 exchange rate
148.1284
151.1271
(c) Use of Estimates
In preparing the unaudited consolidated financial statements in conformity with U.S. GAAP, management is required to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on information available as of the date of the unaudited consolidated financial statements. Significant estimates required to be made by management include, but are not limited to, useful lives and impairment of long-lived assets, impairment of goodwill, impairment of long-term investments in MCs — related parties, valuation allowance of deferred tax assets, uncertain income tax positions, the recognition and measurement of impairment of investments in securities, fair value and impairment of intangible assets, allowance for credit losses and implicit interest rate of operating and finance leases. Management bases its estimates on historical experience and other assumptions it believes to be reasonable under the circumstances and evaluates these estimates on an on-going basis. Actual results could differ from those estimates.
(d) Business Combinations and Asset Acquisitions
Business combinations are recorded using the acquisition method of accounting. The purchase price of the acquisition is allocated to the tangible assets, liabilities, identifiable intangible assets acquired and non-controlling interest, if any, based on their estimated fair values as of the acquisition date. The excess of the purchase price over those fair values is recorded as goodwill. Acquisition-related expenses are expensed as incurred. Consideration transferred in a business acquisition is measured at the fair value as of the date of acquisition. Transaction costs directly attributable to the acquisition are expensed as incurred.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(cont.)
If investment involves the acquisition of an asset or group of assets that does not meet the definition of a business, the transaction is accounted for as an asset acquisition. An asset acquisition is recorded at cost, which includes capitalized transaction costs, and does not result in the recognition of goodwill. The cost of the acquisition is allocated to the assets acquired on the basis of relative fair values.
Fair value is determined based upon the guidance of ASC Topic 820, Fair Value Measurements and Disclosures, and generally are determined using Level 2 inputs and Level 3 inputs. The determination of fair value involves the use of significant judgment and estimates. The Company utilizes the assistance of a third-party appraiser to determine the fair value as of the date of an acquisition.
In a business combination or asset acquisition, the Company may recognize identifiable intangibles that meet either or both the contractual legal criterion or the separability criterion.
(e) Customer Loans Receivable, and Notes and Other Payables — Related Parties
In February 2023, the Company started to provide loan services to certain customers of the related-party MCs (“End Customers”). Once a loan is granted to finance an End Customer’s purchase, the End Customer is required to repay the Company in monthly installments. The loans provided to the End Customers are unsecured, interest-bearing, and due in three months to five years, depending on the End Customers’ choice of the loan service term.
The Company records the customer loans receivables at gross loan receivables less unamortized costs of issuance fees or discounts, which are amortized over the life of the loan to interest income. The Company generated interest income of
$
326,049
and
$
308,053
for the three months ended September 30, 2025 and 2024, respectively, and generated interest income of
$
914,692
and
$
798,263
for the nine months ended September 30, 2025 and 2024, respectively, from the loan services, which were included in revenues.
Management periodically evaluates individual End Customer’s financial condition, credit history and the current economic conditions to make adjustments in the allowance when necessary. Customer loans receivable is charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. During the three months ended September 30, 2025 and 2024
, the Company recorded
$
22,211
and
nil
allowance for doubtful accounts, respectively, for customer loans receivable. During the nine months ended September 30, 2025 and 2024, the Company recorded
$
375,963
and
nil
allowance for doubtful accounts, respectively, for customer loans receivable.
Prior to January 2025, when a loan was granted to an End Customer, the Company issued a promissory note to the related party MC to settle the purchase transaction on behalf of the End Customer. The Company repays each promissory note when the corresponding loan is fully repaid by the End Customer or earlier if mutually agreed. These promissory notes are unsecured and bear no interest. Starting in January 2025, instead of issuing a promissory note to the MC upon loan issuance, the Company pays the transaction amount directly in cash to the MC on behalf of the End Customer in the month following the purchase.
(f) Cryptocurrencies
Cryptocurrencies are included in non-current assets in the unaudited consolidated balance sheets because the Company holds them for long-term investment purposes.
Effective January 1, 2025, the Company adopted ASU No. 2023-08, Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”) using a modified retrospective approach, which requires cryptocurrency assets to be measured at fair value each reporting period with changes in fair value recorded in net income or loss. The adoption of ASU 2023-08 did not have impact on the Company’s prior years’ consolidated financial statements as the Company did not hold cryptocurrencies prior to the adoption.
The Company purchases Bitcoins through Coinbase, Inc., a cryptocurrency exchange, which are initially recorded at cost and subsequently measured at fair value in the consolidated balance sheets. The Company determines the fair value of its cryptocurrency in accordance with ASC 820,
Fair Value Measurement
, based on quoted prices on active exchange(s) that are identified as the principal market(s) for such assets (Level I inputs). The cost basis of cryptocurrencies is determined using the average cost method. The change in fair value of cryptocurrencies is recorded in “Other income (expenses)” as a non-operating item in the unaudited consolidated statements of operations. Purchases and sales of cryptocurrencies, if any, are included within investing activities in the accompanying consolidated statements of cash flows.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(cont.)
(g) Intangible Assets, Net
Intangible assets with an indefinite life are not amortized and are tested for impairment annually or more frequently if events or changes in circumstances indicate that they might be impaired.
Intangible assets with finite lives are initially recorded at cost and amortized on a straight-line basis over the estimated economic useful lives of the respective assets. Acquired intangible assets from business combinations and asset acquisitions are recognized and measured at fair value at the time of acquisition. Those assets represent assets with finite lives are further amortized on a straight-line basis over the estimated useful lives of the respective assets.
The estimate useful lives of intangible assets are as follows:
Useful Life
Patent use right
16
years
Trademark
20
years
Customer relationships
3
–
4
years
Service agreement
25
years
Others
3
years
(h) Goodwill, Net
Goodwill represents the excess of the purchase price over the fair value of the identifiable assets and liabilities acquired in the business combination. In accordance with FASB ASC Topic 350, “Intangibles-Goodwill and Others”, goodwill is subject to at least an annual assessment for impairment or more frequently if events or changes in circumstances indicate that an impairment may exist, applying a fair-value based test.
The Company would recognize an impairment charge for the amount by which the carrying amount of a reporting unit exceeds its fair value up to the amount of goodwill allocated to that reporting unit.
When performing the annual impairment test, the Company has the option of performing a qualitative or quantitative assessment to determine if an impairment has occurred. If a qualitative assessment indicates that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company would be required to perform a quantitative impairment analysis for goodwill. The quantitative analysis requires a comparison of the fair value of the reporting unit to its carrying value, including goodwill. If the carrying value of the reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. The fair value is generally determined using the income approach with the discounted cash flow valuation method, which requires management to make significant estimates and assumptions related to forecasted revenues and cash flows and the discount rates.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(cont.)
(i) Impairment of Long-lived Assets Other Than Goodwill
Long-lived assets with finite lives, primarily property and equipment, intangible assets, operating lease right-of-use assets and finance lease right-of-use assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the estimated cash flows from the use of the asset and its eventual disposition are below the asset’s carrying value, then the asset is deemed to be impaired and written down to its fair value.
(j) Long-term Investments, Net
Investments in equity securities with readily determinable fair values
The Company holds investments in equity securities of publicly listed companies, for which the Company does not have significant influence. Investments in equity securities with readily determinable fair values are measured at fair value and any changes in fair value are recognized in other income (expenses).
Investments in privately held companies and organizations that do not report Net Asset Value (the “NAV”) per share
The Company’s long-term investments in privately held entities that do not report NAV per share are accounted for using a measurement alternative, under which these investments are measured at cost, adjusted for observable price changes and impairments, with changes recognized in other income (expenses).
The Company recognizes both realized and unrealized gain and losses in its unaudited consolidated statements of operations and comprehensive income, classified with other income (expenses). Unrealized gains and losses represent observable price changes for investments in privately held entities that do not report NAV per share. Realized gains and losses represent the difference between proceeds received upon disposition of investments and their historical or adjusted cost. Impairments are realized losses, which result in an adjusted cost, and represent charges to reduce the carrying values of investments in privately held entities that do not report NAV per share, if impairments are deemed other than temporary, to their estimated fair values.
(k) Long-term Investments in MCs — Related Parties
Long-term investments in MCs — related parties represent the payments to obtain equity interests of the MCs in Japan, made by the Company through SBC Japan, a company designated as a MSC in Japan. In accordance with the Act and articles of incorporation of the MCs, which are non-profit organizations, the equity interest holders of MCs are prohibited from receiving any profit distribution from MCs but have the right to receive distribution of the residual assets of the MCs in proportion to the amount of their contribution. As of the balance sheet dates, the investments represent probable future economic benefit to be realized at the time of dissolution of MCs or the equity interests being sold.
The investments in MCs — related parties are accounted for using a measurement alternative, under which these investments are measured at cost, less impairment, and adjusted for observable price changes. The Company reviews the investments in MCs for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The payments made for such investments are classified as investing activities in the unaudited consolidated statements of cash flows. The MCs are considered related parties as the relatives of the Chief Executive Officer (“CEO”) of the Company being the Members of the MCs. Also see Note 2
(a) for further details.
(l) Leases
The Company determines if an arrangement is or contains a lease at inception or modification of the arrangement. An arrangement is or contains a lease if there are identified assets and the right to control the use of an identified asset is conveyed for a period in exchange for consideration. Control over the use of the identified assets means the lessee has both the right to obtain substantially all of the economic benefits from the use of the asset and the right to direct the use of the asset.
The Company classifies its leases as either finance leases or operating leases if it is the lessee, or sales-type, direct financing, or operating leases if it is the lessor. The following criteria is used to determine if a lease is a finance lease (as a lessee) or sales-type or direct financing lease (as a lessor):
(i)
ownership is transferred from lessor to lessee by the end of the lease term;
(ii)
an option to purchase is reasonably certain to be exercised;
(iii)
the lease term is for the major part of the underlying asset’s remaining economic life;
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(cont.)
(iv)
the present value of lease payments equals or exceeds substantially all of the fair value of the underlying assets; or
(v)
the underlying asset is specialized and is expected to have no alternative use at the end of the lease term.
If any of the above criteria is met, the Company accounts for the lease as a finance, a sales-type, or a direct financing lease. If none of the criteria is met, the Company accounts for the lease as an operating lease.
Lessee accounting
The Company recognizes right-of-use assets and lease liabilities for all leases other than those with a term of twelve months or less as the Company has elected to apply the short-term lease recognition exemption. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term. Lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are classified and recognized at the commencement date of a lease. Lease liabilities are measured based on the present value of fixed lease payments over the lease term. Right-of-use assets consist of (i) initial measurement of the lease liability; (ii) lease payments made to the lessor at or before the commencement date less any lease incentives received; and (iii) initial direct costs incurred by the Company.
As the rates implicit on the Company’s leases for which it is the lessee are not readily determinable, the Company uses its incremental borrowing rate based on information available at the commencement date in determining the present value of lease payments. When determining the incremental borrowing rate, the Company assesses multiple variables such as lease term, collateral, economic conditions, and its creditworthiness.
From time to time, we may enter into sublease agreements with third parties. Our subleases generally do not relieve us of our primary obligations under the corresponding head lease. As a result, we account for the head lease based on the original assessment at lease inception. We determine if the sublease arrangement is either a sales-type, direct financing, or operating lease at inception of the sublease. If the total remaining lease cost on the head lease for the term of the sublease is greater than the anticipated sublease income, the right-of-use asset is assessed for impairment. Our subleases are generally operating leases and we recognize sublease income on a straight-line basis over the sublease term.
Lessor accounting — operating leases
The Company accounts for the revenue from its lease contracts by utilizing the single component accounting policy. This policy requires the Company to account for, by class of underlying asset, the lease component and nonlease component(s) associated with each lease as a single component if two criteria are met.
(i)
the timing and pattern of transfer of the lease component and the nonlease component(s) are the same; and
(ii)
the lease component would be classified as an operating lease if it were accounted for separately.
Lease components consist primarily of fixed rental payments, which represent scheduled rental amounts due under our leases. Nonlease components consist primarily of tenant recoveries representing reimbursements of rental operating expenses, including recoveries for utilities, repairs and maintenance and common area expenses.
If the lease component is the predominant component, we account for all revenues under such lease as a single component in accordance with the lease accounting standard. Conversely, if the nonlease component is the predominant component, all revenues under such lease are accounted for in accordance with the revenue recognition accounting standard. Our operating leases qualify for the single component accounting, and the lease component in each of our leases is predominant. Therefore, we account for all revenues from our operating leases under the lease accounting standard and classify these revenues as rental income.
The Company commences recognition of rental income related to the operating leases at the date the property is ready for its intended use by the tenant and the tenant takes possession or controls the physical use of the leased asset. Income from rentals related to fixed rental payments under operating leases is recognized on a straight-line basis over the respective operating lease terms. Any amounts received but will be recognized as revenue in future periods are classified as advances from customers in the Company’s unaudited consolidated balance sheets.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(cont.)
Lessor accounting — sales-type leases
The Company purchases medical equipment from vendors and leases them to its customers, who are required to pay installments throughout the term of the leases. The lease agreements include lease payments that are fixed, do not contain residual value guarantees or variable lease payments. The lease terms are based on the non-cancellable term of the lease and the buyer may have options to terminate the lease in advance when meets certain conditions. The customers obtain control of the medical equipment when they physically possess the equipment.
The Company recognizes sales from sales-type leases equal to the present value of the minimum lease payments discounted using the implicit interest rate in the lease and cost of sales equal to carrying amount of the asset being leased and any initial direct costs incurred, less the present value of the unguaranteed residual. Interest income from the leases is recognized over the lease terms and included in revenues, net.
The Company excludes from the measurement of its lease revenues any tax assessed by a governmental authority that is both imposed on and concurrent with a specific revenue-producing transaction and collected from a customer.
(m) Revenue Recognition
The Company recognizes revenue from franchising services, procurement services, management services and other services or product sales under ASC Topic 606, “Revenue from Contracts with Customers”.
To determine revenue recognition for contracts with customers, the Company performs the following five steps: (i) identify the contract(s) with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation. Revenue amount represents the invoiced value, net of consumption tax and applicable local government levies, if any. The consumption tax on sales is calculated at 10% of gross sales. The Company does not have significant remaining unfulfilled performance obligations or contract balances.
The Company reports revenue on a gross or net basis based on management’s assessment of whether the Company acts as a principal or agent in the transaction. The determination of whether the Company acts as a principal or an agent in a transaction is based on the evaluation of whether (i) the Company is primarily responsible for fulfilling the promise to provide the specified goods or service, (ii) the Company has inventory risk before the specified good or service has been transferred to a customer or after transfer of control to the customer and (iii) the Company has discretion in establishing the price for the specified good or service. If the terms of a transaction do not indicate the Company is acting as a principal in the transaction, then the Company is acting as an agent in the transaction and the associated revenues are recognized on a net basis.
The Company recognizes revenue from rental services under ASC Topic 842, “Leases”.
The Company currently generates its revenue from the following main sources:
Franchising Revenue
The Company generates franchising revenue by licensing its intellectual properties, including but not limited to the Company’s brand name (“Shonan Beauty Clinic”), trade name, patents, and trademarks, and by providing consulting services to enhance the value of “Shonan Beauty Clinic” brand, as a franchisor pursuant to franchise agreements with the medical corporations (the “MCs”) in Japan. Prior to April 2025, revenue was based on a fixed amount to each MC and a fixed amount to each clinic of the MCs; starting from April 2025, rather than charging the same flat fee for all MCs/clinics, the monthly service fee to each MC and to each clinic of the MCs is determined by the facility type, operational tenure, operational performance of each clinic of the MCs. The revenue is recognized over time as services are rendered.
Procurement Revenue
The Company generates procurement services revenue by purchasing primarily advertising services and medical materials from qualified vendors on behalf of MCs to maintain brand quality consistency. Procurement services revenue is recognized at the point in time upon the delivery of products or over time as services are performed. Occasionally, the Company receives vendor discounts on certain large purchases. It recognizes revenue based on actual payments and will return the over-collection resulting from such discounts to MCs.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(cont.)
Management Services Revenue
The Company provides loyalty program management services, labor supporting services, function supporting services, and management consulting services to MCs.
Loyalty program management services
The Company awards loyalty points on behalf of MCs to MCs’ customers, who earn loyalty points from each qualified purchase made at the loyalty program participating clinics of MCs, in exchange for a handling fee. The revenue is based on a percentage of the related payment amount made by MCs’ customers and is recognized when the loyalty points are awarded.
At the time loyalty points are awarded, a MC pays the Company cash in an amount equivalent to the awarded loyalty points, which is recorded as advances from customers. When a MC’s customers redeem the loyalty points, the Company returns the cash back to the MC in an amount equivalent to the redeemed loyalty points. The awarded loyalty points expire if a MC’s customer does not make any additional qualified purchase at a participating clinic within a year. The Company accumulates and tracks the points on behalf of MCs until the loyalty points expire at which time the Company recognizes an amount equivalent to the expired loyalty points as revenue, which is normally not significant.
The Company also awards certain points to MCs’ customers on behalf of MCs for free in order to increase the volume of MC’s sales, from which the Company earns other types of revenues, such as royalty income. When a MC’s customers redeem such points, the Company reimburses MC in an amount equivalent to the used free points and records it as a reduction of the revenue recognized.
The Company is an agent in the management of loyalty programs, and as a result, revenues are recognized net of the cost of redemptions.
Labor supporting services
The Company generates revenue by dispatching staff to MCs to provide a range of services, primarily including IT, and administrative services. The Company recognizes the revenue over the time when services are rendered.
Function supporting services
The revenue is derived from providing functional supporting services to MCs, such as accounting and human resources, and IT management services. The Company recognizes revenue based on a monthly service fee over the time when services are rendered. Since April 2025, the amount of the monthly fee for each clinic is determined using the same key criteria described above under “Franchising Revenue.”
Management consulting services
The Company generates revenue by providing consulting services to MCs in relation to business operations of cosmetic dermatology. The Company recognizes the revenue over the time when services are rendered.
Rental Services Revenue
The Company generates rental income from operating leases and sales-type leases, which is accounted for under ASC Topic 842. Operating lease revenue is generally recognized on straight-line basis over the terms of the lease agreements and sales-type leases revenue is generally recognized on the lease commitment date. Also see Note 2(l).
Other Revenues
The Company generates other miscellaneous revenues such as medicine dispensed sales revenue, brokerage services revenue, construction services revenue, interest income, beauty and health services revenue, etc. These revenues are recognized when the Company satisfies performance obligations.
(n) Advertising Expenses
Advertising expenses consist primarily of costs of promotion and marketing for the Company’s image and services and are included in selling, general and administrative expenses. The Company expenses advertising costs as incurred or the first time the advertising takes place, whichever is earlier, in accordance with the ASC 720-35, “Advertising Costs”. The advertising expenses were
$
300,675
and
$
621,759
for the three months ended September 30, 2025 and 2024, respectively, and
$
1,956,774
and
$
1,556,483
for the nine months ended September 30, 2025 and 2024
, respectively.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(cont.)
(o) Concentration of Credit Risk
Financial instruments that potentially subject the Company to credit risk consist primarily of cash and cash equivalents, accounts receivable, finance lease receivables and customer loans receivable. The Company places its cash and cash equivalents with financial institutions. The Company does not require collateral or other security to support financial instruments subject to credit risk. The Company conducts periodic reviews of the financial condition and payment practices of its customers to minimize collection risk on accounts receivable.
For the nine months ended September 30, 2025, customer A, B and C
represent
24
%,
24
% and
21
% of the Company’s total revenues, respectively. For the
nine months ended September 30, 2024
, customer A, B and C represent
27
%,
22
% and
24
% of th
e Company’s total revenues, respectively.
As of September 30, 2025, customer A, B and C account for
25
%,
26
% and
26
% of the Company’s total outstanding accounts receivable, respectively. As of
December 31, 2024
, customer A, B, C and D account for
17
%,
28
%,
26
% and
10
%
of the Company’s total outstanding accounts receivable, respectively.
For the nine months ended September 30, 2025,
no vendor represents more than
10
% of the Company’s total purchases. For the
nine months ended September 30, 2024
, vendor A represents
14
%
of the Company’s total purchases.
As of September 30, 2025, vendor A, B and C re
present
12
%,
11
% and
11
% of the Company’s total outstanding accounts payable. As of
December 31, 2024
, vendor A and B represent
12
% and
15
% of the
Company’s total outstanding accounts payable, respectively.
(p) Segment Reporting
ASC Topic 280, “Segment Reporting,” requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s chief operating decision maker organizes segments within the company for making operating decisions assessing performance and allocating resources. Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company.
Management determined the Company’s operations constitute a single reporting segment.
(q) Related Parties and Transactions
The Company identifies related parties, and accounts for, discloses related party transactions in accordance with ASC Topic 850, “Related Party Disclosures,” and other relevant ASC standards.
Parties, which can be an entity or individual, are considered to be related if they have the ability, directly or indirectly, to control the Company or exercise significant influence over the Company in making financial and operational decisions. Entities are also considered to be related if they are subject to common control or common significant influence.
Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated.
(r) Fair Value Measurements
The Company performs fair value measurements in accordance with ASC Topic 820. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. An asset’s or a liability’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC Topic 820 establishes three levels of inputs that may be used to measure fair value:
•
Level 1: quoted prices in active markets for identical assets or liabilities;
•
Level 2: inputs other than Level 1 that are observable, either directly or indirectly; or
•
Level 3: unobservable inputs that are supported by little or no market activity and that are significant to the fair values of the assets or liabilities.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(cont.)
As of September 30, 2025 and December 31, 2024, the carrying values of current assets and current liabilities approximated their fair values reported in the unaudited consolidated balance sheets due to the short-term maturities of these instruments. Debt that bears variable interest rates index to prime also approximates fair value as it reprices when market interest rates change.
Assets measured at fair value on a recurring basis as of
September 30, 2025 and December 31, 2024 are summarized below.
Fair Value Measurements as of September 30, 2025
Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Unobservable
Inputs
(Level 3)
Fair
Value at
September 30,
2025
Long-term investments:
Equity investments at fair value with readily determinable fair value
$
4,003,376
—
—
$
4,003,376
Cryptocurrencies:
Bitcoin
$
570,286
—
—
$
570,286
Fair Value Measurements as of December 31, 2024
Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Unobservable
Inputs
(Level 3)
Fair
Value at
December 31,
2024
Long-term investments:
Equity investments at fair value with readily determinable fair value
$
2,478,531
—
—
$
2,478,531
Cryptocurrencies:
Bitcoin
$
—
—
—
$
—
(s) Stock-Based Compensation
The Company accounts for stock-based compensation awards in accordance with ASC Topic 718, “Compensation — Stock Compensation”, under which the Company determines whether stock-based compensation awards should be classified and accounted for as an equity award. There were no liability awards granted during any of the periods stated herein. For all grants of stock-based compensation classified as equity awards, the cost of services received from employees and non-employees in exchange for awards is recognized in the consolidated statements of operations and comprehensive income based on the estimated fair value of those awards on the grant date and amortized on a straight-line basis over the requisite service period or vesting period. The Company records forfeitures and cancellations as they occur.
(t) Recent Accounting Pronouncements
In December 2023, the FASB issued Accounting Standards Update (“ASU”) No. 2023-08, Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets, which requires entities that hold crypto assets to subsequently measure such assets at fair value with changes recognized in net income each reporting period. This accounting update also improves the information provided to investors about an entity’s crypto asset holdings by requiring disclosure about significant holdings, contractual sale restrictions, and changes during the reporting period. ASU 2023-08 is effective for all entities for annual periods beginning after December 15, 2024, including interim periods within those fiscal years. The Company adopted ASU 2023-08 on January 1, 2025. See Note 2(f) and Note 8 for relevant cryptocurrency disclosures.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(cont.)
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvement to Income Tax Disclosures, to enhance the transparency and decision usefulness of income tax disclosures, primarily related to the rate reconciliation and income taxes paid information. ASU 2023-09 is effective for public business entities for annual periods beginning after December 15, 2024, and for annual periods beginning after December 15, 2025 for all other entities, on a prospective basis. Early adoption is permitted. The Company is currently evaluating the impact of this accounting standard update on its consolidated financial statements and related disclosures.
In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendments in ASU 2025-05 provide entities with a practical expedient to simplify the estimation of expected credit losses on current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606 by allowing the assumption that current conditions as of the balance sheet date will not change during the remaining life of the asset. ASU 2025-05 is effective for annual periods beginning after December 15, 2025, and interim reporting periods within those fiscal years, with early adoption permitted.
The Company is currently evaluating the impact of this accounting standard update on its consolidated financial statements and related disclosures.
NOTE 3 — VARIABLE INTEREST ENTITY
A VIE is defined as a legal entity whose equity owners do not have sufficient equity at risk, or, as a group, the holders of the equity investment at risk lack any of the following three characteristics: decision-making rights, the obligation to absorb losses, or the right to receive the expected residual returns of the entity. The primary beneficiary is identified as the variable interest holder that has both the power to direct the activities of the VIE that most significantly affect the entity’s economic performance and the obligation to absorb expected losses or the right to receive benefits from the entity that could potentially be significant to the VIE.
The Company followed ASC Topic 810, “Consolidation”, utilizing a qualitative approach, and determined that it is the primary beneficiary of its VIE, Aikawa Medical Management, Inc. (“AMM”) and consolidated the result of operations, financial conditions, and cash flows of AMM in the consolidated financial statements.
The following amounts and balances of AMM were included in the Company’s unaudited consolidated financial statements as of
September 30, 2025 and December 31, 2024 and for the three and nine months ended September 30, 2025 and 2024:
September 30,
2025
December 31,
2024
ASSETS
Current assets
Cash and cash equivalents
$
3,328
$
41,247
Accounts receivable
17,307
20,076
Prepaid expenses and other current assets
—
32,493
Total Current Assets
20,635
93,816
Property and equipment, net
1,799,372
1,799,372
Loans receivables from subsidiaries of the Company
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3 — VARIABLE INTEREST ENTITY
(cont.)
For the Three Months
Ended September 30,
For the Nine Months
Ended September 30,
2025
2024
2025
2024
Revenues
$
—
$
40,470
$
81,472
$
229,330
Cost of revenues
$
—
$
—
$
—
$
56,510
Total operating expenses
$
33,013
$
118,009
$
197,244
$
373,729
Net income (loss)
$
(
33,013
)
$
17,461
$
(
90,772
)
$
(
105,909
)
For the Nine Months Ended September 30,
2025
2024
Net cash used in operating activities
$
(
80,964
)
$
(
120,365
)
Net cash provided by investing activities
$
25,000
$
95,000
Net cash used in financing activities
$
(
46,781
)
$
(
64,605
)
NOTE 4 — ASSET ACQUISITION
MB Career Lounge, Co., Ltd.
On July 17, 2025, the Company acquired
100
% equity interest of MB Career Lounge, Co., Ltd. (“MB Career Lounge”), a company providing management supporting services for medical institutions in Japan as a MSC
, with a cash consideration
of JPY
2,040,000,001
($
14,150,453
). The Company incurred transaction costs of
JPY
140,620,000
($
975,410
) directly related to the acquisition, which were capitalized as a component of the net assets acquired.
The acquisition of MB Career Lounge did not meet the definition of a business combination under ASC Topic 805. Accordingly, the Company accounted for the transaction as an asset acquisition. In an asset acquisition, goodwill is not recognized, but rather any excess consideration transferred over the fair value of the net assets acquired is allocated on a relative fair value basis to the identifiable net assets. In addition, related transaction expenses are capitalized and allocated to the net assets acquired on a relative fair value basis.
The following table summarizes the amounts for the MB Career Lounge acquisition which were allocated to the fair value of aggregated net assets acquired:
Cash and cash equivalents
$
264,005
Accounts receivable
27,815
Prepaid expense and other current assets
4,339
Long-term prepayments
525
Intangible assets, net
22,597,646
Accounts payable
(
16,028
)
Accrued liabilities and other current liabilities
(
29,904
)
Income tax payable
(
61,777
)
Deferred tax liabilities
(
7,660,758
)
Net assets acquired
$
15,125,863
The assets in the purchase price allocation are stated at fair value based on estimates of fair value using available information and making assumptions management believes are reasonable. The intangible asset identified and valued related to the acquisition is a service agreement. The fair value of the service agreement was determined utilizing the multi-period excess earnings method, which estimates the direct cash flow expected to be generated from the service agreement acquired. The estimated useful life of the intangible asset was determined to be twenty-five years.
The results of operations, financial position and cash flows of MB Career Lounge have been included in the Company’s consolidated financial statements since the date of acquisition.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 7
— PROPERTY AND EQUIPMENT, NET
As of
September 30, 2025 and December 31, 2024, property and equipment, net consist of the following:
September 30,
2025
December 31,
2024
Land
$
1,799,372
$
2,008,132
Buildings and facilities attached to buildings
5,491,304
5,373,424
Machinery, equipment and automobiles
4,280,396
4,312,270
Aircraft
255,404
3,510,376
Software
6,212,638
4,811,260
Subtotal
18,039,114
20,015,462
Less: accumulated depreciation
(
8,402,940
)
(
8,749,391
)
Less: accumulated impairment
(
2,640,911
)
(
2,494,169
)
Property and equipment, net
$
6,995,263
$
8,771,902
Depreciation expense was
$
452,969
and
$
745,802
for the three months ended September 30, 2025 and 2024, respectively, and
$
1,622,009
and
$
2,061,341
for the nine months ended September 30, 2025 and 2024, respectively.
The Company recognized a gain on disposal of property and equipment of $
403,363
and
nil
for the three months ended September 30, 2025 and 2024, respectively, and $
414,167
and $
902
for the nine months ended September 30, 2025 and 2024, respectively.
NOTE 8 — CRYPTOCURRENCIES
As of
September 30, 2025 and December 31, 2024, cryptocurrencies consist of the following:
September 30, 2025
December 31, 2024
Units
Cost Basis
Fair Value
Units
Cost Basis
Fair Value
Bitcoin
5
$
424,250
$
570,286
—
$
—
$
—
Total
$
424,250
$
570,286
$
—
$
—
The following table presents a roll-forward of the Company’s cryptocurrencies holdings during the
nine months ended September 30, 2025:
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 9 — INTANGIBLE ASSETS, NET
As of
September 30, 2025 and December 31, 2024, intangible assets, net consist of the following:
September 30,
2025
December 31,
2024
Patent use right
$
17,558,432
$
16,582,795
Trademarks
1,306,923
1,237,820
Customer relationships
203,681
192,911
Service agreement
22,000,646
—
Others
109,402
159,321
Subtotal
41,179,084
18,172,847
Less: accumulated amortization
(
2,512,660
)
(
2,072,849
)
Less: accumulated impairment
(
15,363,628
)
(
14,509,946
)
Intangible assets, net
$
23,302,796
$
1,590,052
Amortization expense was
$
261,785
and
$
272,557
for the three months ended September 30, 2025 and 2024, respectively, and
$
316,230
and
$
806,440
for the nine months ended September 30, 2025 and 2024, respectively.
Estimated future amortization expense related to intangible assets as of
September 30, 2025 is as follows:
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10 — LONG-TERM INVESTMENTS, NET
As of
September 30, 2025 and December 31, 2024, long-term investments, net consist of the following:
September 30,
2025
December 31,
2024
Investments in private entities or organizations that do not report NAV per share:
Entities or organizations without observable price changes
$
1,820,953
$
1,719,770
Investment in a public entity with readily determinable fair value – related party
3,355,065
2,478,531
Investment in a public entity with readily determinable fair value
648,311
—
Less: accumulated impairment
(
1,215,890
)
(
1,148,329
)
Long-term investments, net
$
4,608,439
$
3,049,972
The Company recognized an unrealized gain on long-term investment in a public entity with readily determinable fair value – related party of $
1,071,026
and an unrealized loss of $
636,725
for the three months ended September 30, 2025 and 2024, respectively,
and an unrealized gain of $
730,458
and an unrealized loss of $
1,682,282
for the nine months ended September 30, 2025 and 2024, respectively.
The Company recognized an unrealized gain on long-term investment in a public entity with readily determinable fair value of $
37,973
and an unrealized loss of $
5,982
for
the three and nine months ended September 30, 2025
, respectively.
NOTE 11 — OTHER ASSETS
As of
September 30, 2025 and December 31, 2024, other assets consist of the following:
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 13 — LONG-TERM LOANS
As of
September 30, 2025 and December 31, 2024, the Company’s long-term loans from banks and other financial institution consist of the following:
Indebtedness
Weighted
Average
Interest
Rate*
Weighted
Average
Years to
Maturity*
September 30,
2025
December 31,
2024
Guaranteed loans
Fixed rate loan
0.00
%
0.01
$
70,240
$
90,274
Variable rate loans
0.39
%
0.70
6,826,192
6,473,490
Subtotal
0.39
%
0.71
6,896,432
6,563,764
Unsecured loan
Fixed rate loan
—
—
—
35,742
Variable rate loans
0.54
%
3.21
14,226,362
—
Subtotal
0.54
%
3.21
14,226,362
35,742
Total long-term loans
0.93
%
3.92
21,122,794
6,599,506
Less: current portion
(
3,044,470
)
(
96,824
)
Non-current portion
$
18,078,324
$
6,502,682
*
Pertained to information for loans outstanding as of
September 30, 2025
.
The Company borrowed loans from various banks and a financial institution for working capital purposes.
Interest expense was
$
44,851
and
$
5,466
for the three months ended September 30, 2025 and 2024, respectively, and
$
95,486
and
$
15,898
for the nine months ended September 30, 2025 and 2024, respectively.
The guarantee information of the Company’s outstanding loans as of
September 30, 2025 and December 31, 2024 consists of the following:
September 30,
2025
December 31,
2024
Co-guaranteed by CEO of subsidiaries within the Company’s organizational structure and Tokyo Credit Guarantee Association
$
143,189
$
185,766
Guaranteed by a subsidiary within the Company’s organizational structure
$
6,753,243
$
6,377,998
As of
September 30, 2025, future minimum payments for long-term loans are as follows:
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 14 — LEASES — AS A LESSEE
The Company has entered into operating leases for offices and sublease purposes, with terms ranging from two to seven years, and finance leases for certain medical equipment, with terms of four years. The estimated effect of lease renewal and termination options, as applicable, that are reasonably certain to be exercised in the determination of the lease term and initial measurement of right-of-use assets and lease liabilities was included in the unaudited consolidated financial statements.
During the nine months ended September 30, 2025 and 2024, certain operating leases were guaranteed by related parties of the Company.
Operating lease expenses for lease payments are recognized on a straight-line basis over the lease term. Finance lease costs include amortization, which is recognized on a straight-line basis over the expected life of the leased assets, and interest expenses, which are recognized following an effective interest rate method. Leases with an initial term of twelve months or less are not recorded in the unaudited consolidated balance sheets.
The components of lease costs are as follows:
For the Three Months
Ended September 30,
For the Nine Months
Ended September 30,
2025
2024
2025
2024
Finance lease costs:
Amortization of finance lease right-of-use assets
$
31,457
$
—
$
72,377
$
—
Interest on finance lease liabilities
3,784
—
9,007
—
Total finance lease costs
35,241
—
81,384
—
Operating lease costs
1,259,336
986,723
3,456,842
2,914,366
Short-term lease costs
32,451
59,620
187,779
239,673
Total lease costs
$
1,327,028
$
1,046,343
$
3,726,005
$
3,154,039
The following table presents supplemental information related to the Company’s leases:
For the Nine Months
Ended September 30,
2025
2024
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases
$
3,639,887
$
3,107,447
Operating cash flows from finance leases
9,007
—
Financing cash flows from finance leases
310,603
—
Non-cash information:
Operating lease right-of-use assets obtained in exchange for operating lease liabilities
105,556
—
Finance lease right-of-use assets obtained in exchange for finance lease liabilities
612,466
—
Remeasurement of operating lease liabilities and right-of-use assets due to lease modifications
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 14 — LEASES — AS A LESSEE
(cont.)
As of
September 30, 2025, the future maturity of operating and finance lease liabilities is as follows:
Years ending December 31,
Operating
Leases
Finance
Leases
Remaining of 2025
$
1,177,273
$
41,361
2026
2,661,733
132,469
2027
893,682
76,237
2028
235,745
43,213
2029
128,596
7,004
Thereafter
58,186
—
Total undiscounted lease payments
5,155,215
300,284
Less: imputed interest
(
45,178
)
(
16,004
)
Present value of lease liabilities
5,110,037
284,280
Less: lease liabilities, current
(
3,545,667
)
(
147,603
)
Lease liabilities, non-current
$
1,564,370
$
136,677
NOTE 15
— INCOME TAXES
United States
SBC Holding, SBC USA, SBC Healthcare Inc., SBC Irvine, LLC, and Aikawa Medical Management, Inc. are incorporated in the United States and subject to federal income tax rate at
21
%
and California state income tax rate at
6.98
%
.
On July 4, 2025, President Trump signed into law the legislation commonly referred to as the One Big Beautiful Bill Act (“OBBBA”). The OBBBA includes various provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The OBBBA has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. We have incorporated the provisions that were effective during the third quarter of 2025 and assessed that the impacts did not have a material impact on our consolidated financial statements. We continue to assess any future impacts on our consolidated financial statements and will recognize the income tax effects beginning in the period in which they are effective.
Japan
The Company conducts its major businesses in Japan and is subject to tax in this jurisdiction. During the nine months ended September 30, 2025 and 2024, substantially all the taxable income of the Company was generated in Japan. As a result of its business activities, the Company files tax returns that are subject to examination by the local tax authority. Income taxes in Japan applicable to the Company are imposed by the national, prefectural, and municipal governments, and in the aggregate resulted in an effective statutory rate of approximately
34.69
%
for the nine months ended September 30, 2025 and 2024.
Vietnam
Shoubikai Medical Vietnam Co., Ltd. is incorporated in Vietnam and subject to income tax rate at
20
%
statutory tax rate with respect to the assessable income generated from Vietnam.
Singapore
Aesthetic Healthcare Holdings Pte. Ltd. and its subsidiaries, and SBC MEDICAL APAC PTE. LTD. are incorporated in Singapore and subject to income tax rate at
17
%
statutory tax rate with respect to the assessable profits generated from Singapore.
For the
nine months ended September 30, 2025 and 2024, the Company’s income tax expenses are as follows:
For the Three Months
Ended September 30,
For the Nine Months
Ended September 30,
2025
2024
2025
2024
Current
$
4,022,286
$
9,105,493
$
17,629,269
$
29,409,315
Deferred
1,651,252
1,167,891
9,104,235
(
2,154,837
)
Total
$
5,673,538
$
10,273,384
$
26,733,504
$
27,254,478
The effective tax rate was
42.10
%
and
40.44
%
for the nine months ended September 30, 2025 and 2024
, respectively
.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 16
— SHAREHOLDER'S EQUITY
The Company is authorized to issue
400,000,000
shares of common stock, par value of $
0.0001
per share (“Common Stock”), and
20,000,000
shares of undesignated preferred stock, par value of $
0.0001
per share.
In February 2025, the Company issued
860,435
shares of common stock, with no proceeds, to Mehana Capital LLC as incentive shares pursuant to the Non-Redemption Agreements entered into in May 2023 by and among Pono, Mehana Capital LLC, and certain unaffiliated stockholders, including Wolverine Flagship Fund Trading Limited, Amethyst Arbitrage International Master Fund, Radcliffe SPAC Master Fund, L.P., and Verition Multi-Strategy Master Fund Ltd.
In May 2025, the Company’s board of directors approved a share repurchase plan (“2025 Share Repurchase Program”), authorizing the repurchases of up to $
5.0
million of the Company’s common stock. The Company completed the program in July 2025. Under the program, the Company repurchased an aggregate of
1,034,308
shares of common stock for a total cash consideration of approximately $
5.0
million, including
521,499
shares of common stock repurchased during the three months ended September 30, 2025.
As of September 30, 2025 and December 31, 2024
, there were
103,881,251
and
103,020,816
shares issued,
102,576,943
and
102,750,816
shares outstanding, respectively, and
no
preferred stock issued and outstanding.
Stock-based compensation
The following table summarizes the stock option/warrant activities and related information for the
nine months ended September 30, 2025 and 2024:
Number of
Warrants
Weighted
Average
Exercise
Price
Weighted
Average
Remaining
Term
(Years)
Intrinsic
Value
As of January 1, 2024
4,918,998
$
0.0064
10.00
$
—
Granted
449,190
0.0001
10.00
—
Additions pursuant to the Pono Merger*
12,134,375
11.50
5.00
Exercised
(
3,137,998
)
0.01
—
—
Forfeited/Cancelled
(
2,230,190
)
0.0001
—
—
As of September 30, 2024*
12,134,375
$
11.50
5.00
$
—
As of January 1, 2025
12,134,375
$
11.50
4.80
$
—
Granted
—
—
—
—
Exercised
—
—
—
—
Forfeited/Cancelled
—
—
—
—
As of September 30, 2025
12,134,375
$
11.50
4.05
$
—
Vested and exercisable as of September 30, 2025
12,134,375
$
11.50
4.05
$
—
*
As of September 30, 2024, there were
12,134,375
warrants issued by Pono, prior to the Pono Merger, among which
11,500,000
warrants were issued through its initial public offering (“IPO”) (“Public Warrants”) and
634,375
were issued through a private placement (“Placement Warrants”). Each warrant entitles the registered holder to purchase one share of common stock at a price of $
11.50
per share at any time commencing on October 17, 2024 until October 17, 2029, or earlier upon redemption or liquidation.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 17 — DISAGGREGATION OF REVENUES
Revenues generated from different revenue streams consist of the following:
For the Three Months
Ended September 30,
For the Nine Months
Ended September 30,
2025
2024
2025
2024
Franchising revenue
$
9,929,387
$
15,688,528
$
35,656,250
$
45,425,052
Procurement revenue
13,406,905
17,571,299
43,496,207
44,303,891
Management services revenue
9,462,183
12,110,764
23,328,864
44,471,031
Rental services revenue
6,219,645
4,124,774
18,711,335
11,195,888
Others
4,335,115
3,589,518
12,848,127
15,599,143
Total
$
43,353,235
$
53,084,883
$
134,040,783
$
160,995,005
During the nine months ended September 30, 2025 and 2024
, the Company recognized revenue of
$
843,755
and
$
1,970,889
from the opening balance of advances from customers, respectively; and recognize
d
no
revenue from the opening balance of advances from customers — related parties.
As of September 30, 2025 and December 31, 2024, and for the nine months ended September 30, 2025 and 2024
, substantially all of our long-lived assets and revenues generated were attributed to the Company’s operations in Japan.
NOTE 18 — RELATED PARTY TRANSACTIONS
The related parties had material transactions for the nine months ended September 30, 2025 and 2024 consist of the following:
Name of Related Parties
Nature of Relationship as of September 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
Medical Corporation Misakikai
The relatives of CEO of the Company being the Members of the MC
General Incorporated Association Miotokai
The relatives of CEO of the Company being the Members of General Incorporated Association Miotokai
Waqoo, Inc.
The CEO of the Company is a principal shareholder of Waqoo, Inc.
Co-medical Co., Ltd.
The CEO of the Company is a principal shareholder of Co-medical Co., Ltd.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 18 — RELATED PARTY TRANSACTIONS
(cont.)
Advances from customers
September 30,
2025
December 31,
2024
Medical Corporation Shobikai
$
3,895,895
$
5,076,300
Medical Corporation Kowakai
383,401
1,801,034
Medical Corporation Nasukai
475,795
1,745,069
Medical Corporation Aikeikai
24,812
379,931
Medical Corporation Jukeikai
7,081
140,170
Medical Corporation Ritz Cosmetic Surgery
5,845
45,701
SBC Shonan Osteopathic Clinic Inc.
16,627
16,395
Medical Corporation Association Furinkai
787,891
940,007
Medical Corporation Association Junikai
1,360,130
1,594,926
Total
$
6,957,477
$
11,739,533
Notes and other payables
September 30,
2025
December 31,
2024
Medical Corporation Shobikai
$
263,566
$
4,653
Medical Corporation Kowakai
178,975
14,672
Medical Corporation Nasukai
170,790
8,827
Medical Corporation Aikeikai
33,700
2,236
Medical Corporation Jukeikai
16,196
—
Medical Corporation Ritz Cosmetic Surgery
20,416
1,201
General Incorporated Association SBC
953,727
—
Total
1,637,370
31,589
Less: current portion
(
1,637,370
)
(
26,255
)
Non-current portion
$
—
$
5,334
Due to related party
September 30,
2025
December 31,
2024
Yoshiyuki Aikawa
$
2,791,808
$
2,823,590
Total
$
2,791,808
$
2,823,590
For the Nine Months
Ended September 30,
Allowance for credit loss movement
2025
2024
Beginning balance
$
2,836,013
$
3,238,209
Provision for credit loss
—
617,804
Reversal of credit loss
(
70,000
)
(
745,000
)
Ending balance
$
2,766,013
$
3,111,013
The balances of due to and due from related parties represent the outstanding loans to and from related parties, respectively, as of September 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 Gen
eral 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), 10, 13, 14, 17 and 20 for more transactions with related parties.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 19 — SEGMENT REPORTING
The Company’s chief operating decision maker (“CODM”), Chief Executive Officer, reviews consolidated results of operations to make decisions, therefore the Company views its operations and manages its business as a single operating segment. The Company’s revenues for its single operating segment are substantially all derived from providing comprehensive management services to MCs and their clinics.
The accounting policies for the single operating segment are the same as those described in Note 2. The CODM evaluates performance for the Company’s single operating segment and decides how to allocate resources based on the Company’s consolidated net income that is reported in the unaudited consolidated statements of operations and comprehensive income as net income. The measure of segment assets is reported in the unaudited consolidated balance sheets as total assets. The CODM allocates resources across the Company based on consolidated net income derived during the annual budgeting process and throughout the year in monitoring actual results compared to budget and updated forecasts. These results are used to assess segment performance.
The operating segment financial information regularly reviewed by the CODM, inclusive assets, revenues, expenses, profit or loss, and noncash items are presented on a consolidated basis in the same amount and using the same captions as those included in the unaudited consolidated statements of operations and comprehensive income, unaudited consolidated balance sheets, and unaudited consolidated statements of cash flows. There are no additional segment expense categories regularly provided to the CODM. Therefore, there are also no amounts classified as other segment items requiring disclosure.
NOTE 20 — COMMITMENT
As of September 30, 2025 and December 31, 2024
, a subsidiary of the Company provided a guarantee on the debt of its CEO in the amounts of
$
250,489
and
$
262,095
, respectively. As of September 30, 2025 and December 31, 2024
, the Company did not record a liability in the unaudited consolidated balance sheets for the guarantee because, based on the management's assessment, it was not probable that the Company would be required to make payments under the guarantee.
NOTE 21 — SUBSEQUENT EVENTS
On November 13, 2025, the Company’s Board of Directors approved proceeding with the acquisition of common shares of Waqoo, Inc. ("Waqoo"), a Japanese company listed on the Tokyo Stock Exchange, from the CEO of the Company and other shareholders of Waqoo until the Company obtains controlling interest in Waqoo. Prior to the plan, the Company held a
9.49
% equity interest in Waqoo.
On the same day, the Company entered into a Share Transfer Agreement with its CEO to purchase
989,802
common shares of Waqoo in cash of JPY1,430,263,890 (approximately $
9.2
million), representing a
26.58
% equity interest in Waqoo. The tender offer to other shareholders of Waqoo commenced on November 14, 2025. As a the date of this filing,
no
purchases have been consummated under the plan.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANAL
YSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis summarize the significant factors affecting our operating results, financial condition, liquidity, and cash flows for the periods presented below, which should be read in conjunction with the unaudited consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q (this “Quarterly Report”). The forward-looking statements contained herein are based on management’s judgment, assumptions made by management and information currently available to it. Actual results could differ materially from those discussed or implied in the forward-looking statements as a result of various factors, including those described elsewhere in this Quarterly Report and the Annual Report, particularly in “Part I, Item 1A. Risk Factors” of the Annual Report and the section entitled “Cautionary Note Regarding Forward-Looking Statements” herein.
Unless the context otherwise requires, any reference in this section of this Quarterly Report to the “Company,” “SBC,” “we,” “us” or “our” refers to Legacy SBC (defined below) and its consolidated subsidiaries and variable interest entity (“VIE”), prior to the consummation of the Business Combination and to SBC Medical Group Holdings Incorporated and its consolidated subsidiaries and VIE, following the Business Combination.
Overview
SBC Medical Group, Inc. (formerly known as SBC Medical Group Holdings Incorporated), a Delaware corporation and subsidiary of the Company (“Legacy SBC”) is a management company headquartered in Irvine, California and Tokyo, Japan, that provides management services to cosmetic treatment centers mainly in Japan.
On September 17, 2024, Legacy SBC consummated its going-public business combination with Pono Capital Two, Inc. (“Business Combination”). In connection with the closing of the Business Combination, Pono Capital Two, Inc. changed its name to SBC Medical Group Holdings Incorporated and the Company’s common stock began trading on Nasdaq under the ticker symbol “SBC”.
The Company and its subsidiaries are primarily focused on providing comprehensive management services to franchisee clinics, including but not limited to advertising and marketing needs across various platforms (such as social media networks), staff management (such as recruitment and training), booking reservations for franchisee clinic customers, assistance with franchisee employee housing rentals and facility rentals, construction and design of franchisee clinics, medical equipment and medical consumables procurement (
resale
), the provision of cosmetic products to franchisee clinics for resale to clinic customers, licensure of the use of patent-pending and non-patented medical technologies, trademark and brand use, IT software solutions (including but not limited to remote medical consultations), management of the franchisee clinic’s customer rewards program (customer loyalty point program), and payment tools for the franchisee clinics.
Our wholly owned subsidiary, SBC Medical Group Co., Ltd., a Japan corporation (“SBC Medical Sub”, or “SBC Japan”) is designated as a “medical service corporation” in Japan. In Japan, a medical service corporation is a legal entity that provides management service to “medical corporations”. The management services are conducted through franchisor-franchisee contracts and/or service contracts between SBC Medical Sub and the medical corporations that own all 258 of the treatment centers in Japan as of September 30, 2025. These clinics provide include but are not limited to breast augmentation, liposuction, rejuvenation treatments (including treatment of wrinkles, acne, scars, cellulite, excess fat, discoloration, and signs of aging), laser skin toning and spot removal, eyes double fold surgery, rhinoplasty, treatment of osmidrosis and hyperhidrosis, hair transplants, gynecological formation treatments, laser hair removal, face line surgeries, cosmetical dental procedures, tattoo removal, lasik eye surgery, lateral canthoplasty, brow lift procedures, androgenetic alopecia treatment, and cheek sagging prevention methods. In addition, similar management services are provided to four independently operated clinics.
The Company’s subsidiaries have entered into franchisor-franchisee contracts and service contracts with six medical corporations, consisting of Medical Corporation Shobikai, Medical Corporation Kowakai, Medical Corporation Nasukai, Medical Corporation Aikeikai, Medical Corporation Jukeikai and Medical Corporation Ritz Cosmetic Surgery. In addition, the Company has entered into service contracts since September 2023 with Medical Corporation Association Furinkai and Medical Corporation Association Junikai; and in July 2025 with Medical Corporation Misakikai and General Incorporated Association Miotokai, following the acquisition of MB Career Lounge Co., Ltd. (collectively with the six franchisee medical corporations, the “Medical Corporations and/or General Incorporated Associations” or “MCs”). All of the Medical Corporations and General Incorporated Associations are deemed to be related parties of the Company since relatives of the CEO of the Company are the members* of general meetings of members** of the Medical Corporations or General Incorporated Associations. The CEO of the Company was previously a member* of the six franchisee Medical Corporations until he ceased being a member* in July 2023. The Company, through SBC Medical Sub, owns equity interests*** of the six franchisee medical corporations. Although the Company, through SBC Medical Sub, has an equity interest*** to the rights to receive a distribution of residual assets in proportion to the amount of contribution in certain circumstances as provided in the Japanese Medical Care Act and in the articles of incorporation (except Medical Corporation Association Furinkai, Medical Corporation Association Junikai, Medical Corporation Misakikai and General Incorporated Association Miotokai), the Company or SBC Medical Sub does not have voting control over the corporate actions at general meetings of members** of the Medical Corporations or General Incorporated Associations per the requirements of the Japanese Medical Care Act.
* “Members (or
shain
) of general meeting of members (or
shain
)” means one of the organs of a Japanese Medical Corporation, and element of general meeting of members (as explained below) of the Medical Corporation. Each member (or
shain
) of general meeting of members (or
shain
) has one voting right.
** “General meeting of members (or
shain
)” means one of the organs of a Japanese Medical Corporation, and the highest decision-making body of the Medical Corporation, of which the main duties include the election and dismissal of directors (or
riji
) and corporate auditors (or
kanji
) of the Medical Corporation, and the approval of financial statements and statutory business reports of the Medical Corporation.
*** “Equity interest (or
mochibun
)” means the right to receive distribution of the residual assets of a Japanese Medical Corporation in proportion to the amount of contribution (Article 10.3.3.2 brackets of the Supplementary Provision of the Japanese Medical Care Act.). However, the procedures for an equity interest (or
mochibun
) holder to exercise and realize the right to receive distribution of the residual assets of the Medical Corporation is more complicated than that of a stock corporation due to the restrictions under the Medical Care Act.
Financial Overview
For the three months ended September 30, 2025 and 2024, we generated revenues of $43,353,235 and $53,084,883, respectively, we reported net income attributable to SBC Medical Group Holdings Incorporated of $12,824,636 and $2,832,894, respectively. For the nine months ended September 30, 2025 and 2024, we generated revenues of $134,040,783 and $160,995,005, respectively, we reported net income attributable to SBC Medical Group Holdings Incorporated of $36,785,322 and $40,075,054, respectively, and cash flows provided by (used in) operating activities of $(27,295,426) and $27,886,231, respectively. As of September 30, 2025, we had retained earnings of $226,248,329.
Our primary mission is to provide quality comprehensive management services to the MCs and expand our “Shonan Beauty Clinic” brand. We plan to achieve the mission by maintaining and strengthening our market position and brand in the cosmetic medical treatment management market in Japan, Vietnam and Singapore, and by growing our presence globally.
Further information regarding our business is provided in “Description of Business” of our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 28, 2025.
Results of Operations
Comparison of Results of Operations for the Three Months Ended September 30, 2025 and 2024
The following table summarizes our operating income as reflected in our unaudited consolidated statements of operations and comprehensive income for the three months ended September 30, 2025 and 2024, and presents information regarding amounts and percentage changes during those periods.
For the Three Months
Ended September 30,
2025
2024
Variance
Amount
% of
revenue
Amount
% of
revenue
Amount
%
Revenues, net (including net revenues provided to related parties)
$
43,353,235
100.00
%
$
53,084,883
100.00
%
$
(9,731,648
)
(18.33
)%
Cost of revenues (including cost of revenues from related parties)
12,741,748
29.39
%
9,845,793
18.55
%
2,895,955
29.41
%
Gross profit
30,611,487
70.61
%
43,239,090
81.45
%
(12,627,603
)
(29.20
)%
Operating expenses (including selling, general and administrative expenses from related parties)
14,730,247
33.98
%
29,404,487
55.39
%
(14,674,240
)
(49.90
)%
Income from operations
15,881,240
36.63
%
13,834,603
26.06
%
2,046,637
14.79
%
Other income (loss) (including other income from related party)
2,625,624
6.06
%
(726,752
)
(1.37
)%
3,352,376
(461.28
)%
Income before income taxes
18,506,864
42.69
%
13,107,851
24.69
%
5,399,013
41.19
%
Income tax expense
5,673,538
13.09
%
10,273,384
19.34
%
(4,599,846
)
(44.77
)%
Net income
12,833,326
29.60
%
2,834,467
5.34
%
9,998,859
352.76
%
Less: net income attributable to non-controlling interests
8,690
0.02
%
1,573
0.00
%
7,117
452.45
%
Net income attributable to SBC Medical Group Holdings Incorporated
Revenues, net generated from different revenue streams consist of the following:
For the Three Months
Ended September 30,
Variance
2025
2024
Amount
%
Franchising revenue
$
9,929,387
$
15,688,528
$
(5,759,141
)
(36.71
)%
Procurement revenue
13,406,905
17,571,299
(4,164,394
)
(23.70
)%
Management services revenue
9,462,183
12,110,764
(2,648,581
)
(21.87
)%
Rental services revenue
6,219,645
4,124,774
2,094,871
50.79
%
Others
4,335,115
3,589,518
745,597
20.77
%
Total
$
43,353,235
$
53,084,883
$
(9,731,648
)
(18.33
)%
Revenues, net, decreased by 18.33% from $53,084,883 for the three months ended September 30, 2024 to $43,353,235 for the three months ended September 30, 2025.
Japanese Yen (“JPY”) against the U.S. dollar appreciated during the three months ended September 30, 2025, compared to the three months ended September 30, 2024. The average rate against the dollar was 147.4096 yen for the three months ended September 30, 2025 compared to 148.9730 yen for the same period in 2024. For the three months ended September 30, 2025 and 2024, we generated net revenues of $43,353,235 (JPY6,391 million) and $53,084,883 (JPY7,908 million), respectively, we reported net income of $12,833,326 (JPY1,896 million) and $2,834,467 (JPY379 million), respectively. Overall, the favorable impacts of the period-to-period foreign exchange rate changes on net revenues and net income were $454,958 and $107,787, respectively, for the three months ended September 30, 2025.
The main reasons for the variance of $9,731,648 in revenues, net per revenue stream are as follows:
Franchising Revenue
Franchising revenue for the three months ended September 30, 2025, decreased to $9,929,387 by $5,759,141, or 36.71%, from $15,688,528 for the same period in 2024. This decrease was mainly due to the revision of the fee structure for determining service fees for each clinic of MCs based on the size, scale and performance of each clinic effective as of April 1, 2025, partially offset by the appreciation of JPY.
Procurement Revenue
The procurement revenue for the three months ended September 30, 2025 decreased to $13,406,905 by $4,164,394, or 23.70%, from $17,571,299 for the same period in 2024. This decrease was mainly due to a reduction in orders from MCs for the new types of medical materials, partially offset by the appreciation of JPY.
Management Services Revenue
The management services revenue for the three months ended September 30, 2025 decreased to $9,462,183 by $2,648,581, or 21.87%, from $12,110,764 for the same period in 2024. This decrease was mainly due to (i) the discontinuation of clinic operation staff supporting services that had been provided by Shobikai Sub to MCs since the third quarter of 2024, because the Company completed the merger of Shobikai Sub with and into Lange Sub and the related business license, held by Shobikai Sub, became invalid upon the merger in January 2025, (ii) the decrease in the revenue in connection with customer rewards program offered to customers of the franchisee clinics and (iii) the revision of the fee structure for determining service fees for each clinic of MCs based on the size, scale and performance of each clinic effective as of April 1, 2025, partially offset by revenues from MB Career Lounge Co., Ltd., which was acquired in July 2025 and by the appreciation of JPY.
Rental Services Revenue
The rental services revenue for the three months ended September 30, 2025 increased to $6,219,645 by $2,094,871, or 50.79%, from $4,124,774 for the same period in 2024. This increase was mainly due to the opening of new clinics resulting in the increased demand for medical equipment from new clinics and replacing laser hair removal equipment from existing clinics as well as the appreciation of JPY.
Others
The other revenues for the three months ended September 30, 2025 increased to $4,335,115 by $745,597, or 20.77%, from $3,589,518 for the same period in 2024. This increase was mainly due to revenues from Aesthetic Healthcare Holdings Pte. Ltd. and its subsidiaries, which were acquired in November 2024, offset by the disposal of its subsidiaries, Kijimadairakanko Inc. and Skynet Academy Co., Ltd. in December 2024.
Cost of revenues for the three months ended September 30, 2025 was $12,741,748 compared to $9,845,793 for the same period in 2024. The increase was mainly due to higher purchase costs resulting from replacing laser hair removal equipment from MCs. The increase was partially offset by the discontinuation of clinic operation supporting services provided by Shobikai Sub to MCs since the third quarter of 2024, and the Company then terminated the employment of the related staff.
Gross Profit
Gross profit for the three months ended September 30, 2025 was $30,611,487 compared to $43,239,090 for the same period in 2024. The decrease in gross profit by $12,627,603 or 29.20% was mainly due to the decrease in franchising revenue, procurement revenue and management services revenue with relatively high gross margin as a result of the factors described above.
Operating Expenses
Operating expenses for the three months ended September 30, 2025 and 2024 were as follows:
For the Three Months
Ended September 30,
Variance
2025
2024
Amount
%
Salaries and welfare
$
6,598,148
$
6,842,278
$
(244,130
)
(3.57
)%
Depreciation and amortization expense
710,420
684,926
25,494
3.72
%
Consulting and professional service fees
4,413,204
5,070,231
(657,027
)
(12.96
)%
Advertising expense
300,675
621,759
(321,084
)
(51.64
)%
Taxes and dues
70,772
151,609
(80,837
)
(53.32
)%
Recruiting expense
158,019
201,987
(43,968
)
(21.77
)%
Lease expense
607,885
602,787
5,098
0.85
%
Office, utility and other expenses
1,871,124
2,421,455
(550,331
)
(22.73
)%
Stock-based compensation
—
12,807,455
(12,807,455
)
(100.00
)%
Total
$
14,730,247
$
29,404,487
$
(14,674,240
)
(49.90
)%
The operating expenses decreased to $14,730,247 for the three months ended September 30, 2025 by $14,674,240, or 49.90%, from $29,404,487 for the same period in 2024. The decrease was mainly due to the decrease in stock-based compensation, consulting and professional service fees, and office, utility and other expenses.
Stock-based compensation was recognized as an expense for the three months ended September 30, 2024 related to warrants issued to a service provider that supported SBC’s listing process. No such expense was recognized for the three months ended September 30, 2025.
Consulting and professional service fees decreased by $657,027, or 12.96%, to $4,413,204 for the three months ended September 30, 2025 from $5,070,231 for the same period in 2024, mainly due to the decrease in legal, tax, and market research expenses associated with the Company’s listing.
Other Income (Expenses)
Other income (expenses) for the three months ended September 30, 2025 and 2024, were as follows:
In particular, the other income was $2,526,035 for the three months ended September 30, 2025, as compared to $65,922 for the three months ended September 30, 2024, mainly due to the increase in an unrealized gain recognized on investment in a public entity with a readily determinable fair value - related party. The other expense was $6,564 for the three months ended September 30, 2025, as compared to $795,158 for the three months ended September 30, 2024, mainly due to a reduction of the foreign exchange losses recognized during the three months ended September 30, 2025. Change in fair value of cryptocurrencies was $34,404 for the three months ended September 30, 2025, as compared to nil for the three months ended September 30, 2024, reflecting from the fair value change of the cryptocurrencies purchased in April 2025 during the current period.
Income Tax Expense
Income tax expense for the three months ended September 30, 2025 was $5,673,538 compared to $10,273,384 for the same period in 2024. The decrease in income tax expense by $4,599,846 or 44.77% was mainly due to the prior-year recognition of $12,807,455 of non-deductible stock-based compensation recognized for the three months ended September 30, 2024, while no such expense was recorded in the three months ended September 30, 2025.
The effective tax rate was 30.66% and 78.38% for the three months ended September 30, 2025 and 2024, respectively. The decrease of 47.72 percentage points was mainly due to the prior-year recognition of $12,807,455 of non-deductible stock-based compensation recognized for the three months ended September 30, 2024, while no such expense was recorded in the three months ended September 30, 2025.
Net Income
As a result of the foregoing, we reported a net income of $12,833,326 for the three months ended September 30, 2025, representing an increase of $9,998,859 or 352.76% from $2,834,467 for the three months ended September 30, 2024.
Net Income Attributable to Non-controlling Interests
Net income attributable to non-controlling interests was $8,690 for the three months ended September 30, 2025, as compared to $1,573 for the three months ended September 30, 2024.
Comparison of Results of Operations for the Nine Months Ended September 30, 2025 and 2024
The following table summarizes our operating income as reflected in our unaudited consolidated statements of operations and comprehensive income for the nine months ended September 30, 2025 and 2024, and presents information regarding amounts and percentage changes during those periods.
For the Nine Months
Ended September 30,
2025
2024
Variance
Amount
% of revenue
Amount
% of revenue
Amount
%
Revenues, net (including net revenues provided to related parties)
$
134,040,783
100.00
%
$
160,995,005
100.00
%
$
(26,954,222
)
(16.74
)%
Cost of revenues (including cost of revenues from related parties)
35,685,635
26.62
%
38,816,865
24.11
%
(3,131,230
)
(8.07
)%
Gross profit
98,355,148
73.38
%
122,178,140
75.89
%
(23,822,992
)
(19.50
)%
Operating expenses (including selling, general and administrative expenses from related parties)
43,717,642
32.62
%
56,592,092
35.15
%
(12,874,450
)
(22.75
)%
Income from operations
54,637,506
40.76
%
65,586,048
40.74
%
(10,948,542
)
(16.69
)%
Other income (including other income from related party)
8,861,126
6.61
%
1,810,438
1.12
%
7,050,688
389.45
%
Income before income taxes
63,498,632
47.37
%
67,396,486
41.86
%
(3,897,854
)
(5.78
)%
Income tax expense
26,733,504
19.94
%
27,254,478
16.92
%
(520,974
)
(1.91
)%
Net income
36,765,128
27.43
%
40,142,008
24.94
%
(3,376,880
)
(8.41
)%
Less: net income (loss) attributable to non-controlling interests
(20,194
)
(0.02
)%
66,954
0.04
%
(87,148
)
(130.16
)%
Net income attributable to SBC Medical Group Holdings Incorporated
Revenues, net generated from different revenue streams consist of the following:
For the Nine Months
Ended September 30,
Variance
2025
2024
Amount
%
Franchising revenue
$
35,656,250
$
45,425,052
$
(9,768,802
)
(21.51
)%
Procurement revenue
43,496,207
44,303,891
(807,684
)
(1.82
)%
Management services revenue
23,328,864
44,471,031
(21,142,167
)
(47.54
)%
Rental services revenue
18,711,335
11,195,888
7,515,447
67.13
%
Others
12,848,127
15,599,143
(2,751,016
)
(17.64
)%
Total
$
134,040,783
$
160,995,005
$
(26,954,222
)
(16.74
)%
Revenues, net, decreased by 16.74% from $160,995,005 for the nine months ended September 30, 2024 to $134,040,783 for the nine months ended September 30, 2025.
Japanese Yen (“JPY”) against the U.S. dollar appreciated during the nine months ended September 30, 2025, compared to the nine months September 30, 2024. The average rate against the dollar was 148.1284 yen for the nine months ended September 30, 2025 compared to 151.1271 yen for the same period in 2024. For the nine months ended September 30, 2025 and 2024, we generated net revenues of $134,040,783 (JPY19,855 million) and $160,995,005 (JPY24,331 million), respectively, we reported net income of $36,765,128 (JPY5,458 million) and $40,142,008 (JPY6,067 million), respectively. Overall, the favorable impacts of the period-to-period foreign exchange rate changes on net revenues and net income were $2,659,670 and $651,055, respectively, for the nine months ended September 30, 2025.
The main reasons for the variance of $26,954,222 in revenues, net per revenue stream are as follows:
Franchising Revenue
Franchising revenue for the nine months ended September 30, 2025 decreased to $35,656,250 by $9,768,802, or 21.51%, from $45,425,052 for the same period in 2024. This decrease was mainly due to the revision of the fee structure for determining service fees for each clinic of MCs based on the size, scale and performance of each clinic effective as of April 1, 2025, partially offset by the appreciation of JPY.
Procurement Revenue
The procurement revenue for the nine months ended September 30, 2025 decreased to $43,496,207 by $807,684, or 1.82%, from $44,303,891 for the same period in 2024. This decrease was mainly due to the decrease in the orders from MCs for the medical materials which reflected a temporary increase in procurement activities associated with the opening of multiple new clinics in the same period of the prior year.
Management Services Revenue
The management services revenue for the nine months ended September 30, 2025 decreased to $23,328,864 by $21,142,167, or 47.54%, from $44,471,031 for the same period in 2024. This decrease was mainly due to (i) the discontinuation of clinic operation staff supporting services that had been provided by Shobikai Sub to MCs since the third quarter of 2024, because the Company completed the merger of Shobikai Sub with and into Lange Sub and the related business license that was held by Shobikai Sub became invalid upon the completion of the merger in January 2025, (ii) the decrease in the revenue in connection with customer rewards program offered to customers of the franchisee clinics and (iii) the revision of the fee structure for determining service fees for each clinic of MCs based on the size, scale and performance of each clinic effective as of April 1, 2025, partially offset by revenues from MB Career Lounge Co., Ltd., which was acquired in July 2025 and by the appreciation of JPY.
Rental Services Revenue
The rental services revenue for the nine months ended September 30, 2025 increased to $18,711,335 by $7,515,447, or 67.13%, from $11,195,888 for the same period in 2024. This increase was mainly due to the opening of new clinics resulting in the increased demand for medical equipment from new clinics and replacing laser hair removal equipment from existing clinics as well as the appreciation of JPY.
The other revenues for the nine months ended September 30, 2025 decreased to $12,848,127 by $2,751,016, or 17.64%, from $15,599,143 for the same period in 2024. This decrease was mainly due to the disposal of its subsidiaries, Kijimadairakanko Inc. and Skynet Academy Co., Ltd., in December 2024, offset by revenues from Aesthetic Healthcare Holdings Pte. Ltd. and its subsidiaries, which were acquired in November 2024.
Cost of Revenues
Cost of revenues for the nine months ended September 30, 2025 was $35,685,635 compared to $38,816,865 for the same period in 2024. The decrease was mainly due to the Company’s effort of the cost reduction, as well as the discontinuation of clinic operation supporting services provided by Shobikai Sub to MCs since the third quarter of 2024, and the Company then terminated the employment of the related staff. As a result, cost of revenues decreased overall, despite a partial offset from higher purchase costs resulting from the demand for replacing laser hair removal equipment from the MCs.
Gross Profit
Gross profit for the nine months ended September 30, 2025 was $98,355,148 compared to $122,178,140 for the same period in 2024. The decrease in gross profit by $23,822,992 or 19.50% was mainly due to the decrease in franchising revenue and management services revenue with relatively high gross margin as a result of the factors described above.
Operating Expenses
Operating expenses for the nine months ended September 30, 2025 and 2024 were as follows:
For the Nine Months
Ended September 30,
Variance
2025
2024
Amount
%
Salaries and welfare
$
19,805,407
$
21,228,566
$
(1,423,159
)
(6.70
)%
Depreciation and amortization expense
1,643,588
1,912,284
(268,696
)
(14.05
)%
Consulting and professional service fees
11,589,322
10,279,107
1,310,215
12.75
%
Advertising expense
1,956,774
1,556,483
400,291
25.72
%
Taxes and dues
908,051
400,943
507,108
126.48
%
Recruiting expense
544,643
1,450,109
(905,466
)
(62.44
)%
Lease expense
1,807,212
1,836,717
(29,505
)
(1.61
)%
Office, utility and other expenses
5,462,645
5,120,428
342,217
6.68
%
Stock-based compensation
—
12,807,455
(12,807,455
)
(100.00
)%
Total
$
43,717,642
$
56,592,092
$
(12,874,450
)
(22.75
)%
The operating expenses decreased to $43,717,642 for the nine months ended September 30, 2025 by $12,874,450, or 22.75%, from $56,592,092 for the same period in 2024. The decrease was mainly due to the decrease in stock-based compensation and salaries and welfare, partially offset by the increase in consulting and professional service fees.
Stock-based compensation was recognized as an expense for the nine months ended September 30, 2024 related to warrants issued to a service provider that supported SBC’s listing process. No such expense was recognized for the nine months ended September 30, 2025.
Salaries and welfare decreased by $1,423,159 or 6.70%, to $19,805,407 for the nine months ended September 30, 2025 from $21,228,566 for the same period in 2024, mainly due to the disposal of a subsidiary, Kijimadairakanko Inc. in December 2024 and the decrease in the compensation to the director and CEO of the Company.
Consulting and professional service fees increased by $1,310,215, or 12.75%, to $11,589,322 for the nine months ended September 30, 2025 from $10,279,107 for the same period in 2024, mainly due to the increase in legal, tax, and market research expenses associated with the Company’s listing.
Other income (expenses) for the nine months ended September 30, 2025 and 2024, were as follows:
For the Nine Months
Ended September 30,
Variance
2025
2024
Amount
%
Interest income
$
198,599
$
37,283
$
161,316
432.68
%
Interest expense
(104,493
)
(15,898
)
(88,595
)
557.27
%
Other income
2,711,134
721,894
1,989,240
275.56
%
Other expenses
(2,836,288
)
(2,746,450
)
(89,838
)
3.27
%
Gain on redemption of life insurance policies
8,746,138
—
8,746,138
100.00
%
Change in fair value of cryptocurrencies
146,036
—
146,036
100.00
%
Gain on disposal of subsidiary
—
3,813,609
(3,813,609
)
(100.00
)%
Total
$
8,861,126
$
1,810,438
$
7,050,688
389.45
%
Other income (expenses), net was $8,861,126 for the nine months ended September 30, 2025 compared to $1,810,438 for the same period in 2024. The increase in other income (expense) by $7,050,688 or 389.45% was mainly due to a gain on redemption of life insurance policies of $8,746,138 in 2025, offset by the gain on disposal of subsidiary of $3,813,609 recognized in the nine months ended September 30, 2024 while no such event recognized in the same period in 2025. In addition, the other income was $2,711,134 for the nine months ended September 30, 2025, as compared to $721,894 for the nine months ended September 30, 2024, mainly due to an unrealized gain recognized on investment in a public entity with a readily determinable fair value - related party. The other expense was $2,836,288 for the nine months ended September 30, 2025, as compared to $2,746,450 for the nine months ended September 30, 2024. Change in fair value of cryptocurrencies was $146,036 for the nine months ended September 30, 2025, as compared to nil for the nine months ended September 30, 2024, due to the Company purchased cryptocurrencies in the nine months ended September 30, 2025, which resulted in the fair value change of the cryptocurrencies during the current period.
Income Tax Expense
Income tax expense for the nine months ended September 30, 2025 was $26,733,504 compared to $27,254,478 for the same period in 2024. The decrease in income tax expense by $520,974 or 1.91% was mainly due to the increase of deferred tax expenses recognized and the appreciation of JPY.
The effective tax rate was 42.10% and 40.44% for the nine months ended September 30, 2025 and 2024, respectively.
Net Income
As a result of the foregoing, we reported a net income of $36,765,128 for the nine months ended September 30, 2025, representing a decrease of $3,376,880 or 8.41% from $40,142,008 for the nine months ended September 30, 2024.
Net Income (Loss) Attributable to Non-controlling Interests
Net loss attributable to non-controlling interests was $20,194 for the nine months ended September 30, 2025, as compared to net income attributable to non-controlling interests of $66,954 for the nine months ended September 30, 2024.
Liquidity and Capital Resources
As of September 30, 2025, the Company had $127,431,318 in cash and cash equivalents compared to $125,044,092 as of December 31, 2024. In addition, the Company had $61,194,381 in accounts receivable as of September 30, 2025 compared to $30,260,113 as of December 31, 2024. The Company’s accounts receivable includes balances due from customers for the services and goods provided by the Company and accepted by customers.
As of September 30, 2025, the Company’s working capital balance was $182,618,388. In assessing liquidity, management monitors and analyzes the Company’s cash and cash equivalents, ability to generate sufficient future earnings, and operating and capital investment commitments. The Company believes that its current cash and cash equivalents from operations and borrowings from banks will be sufficient to meet its working capital needs for the next 12 months from the date of issuance of the unaudited financial statements included in this Quarterly Report.
To the extent additional funds are necessary to meet our long-term liquidity needs as we continue to execute our business strategy, we anticipate that they will be obtained through the incurrence of indebtedness, equity financings or a combination of these potential sources of funds. While we face uncertainties regarding the size and timing of our fundraising, which will be affected by general economic, financial, and other factors that may be beyond our control, we believe that we will be able to continue to meet our current business needs through the use of cash flows generated from operations and stockholder working capital, as needed.
The Company evaluates its capital allocation practices with the objective of enhancing shareholder value, while considering performance, the business environment, macroeconomic conditions and other relevant factors. The Company expects to deploy capital for investment opportunities that align with its growth strategy, selectively pursuing prospects in the expanding global medical aesthetics market. Additionally, the Company continues to evaluate alternative methods for deployment of capital, including in the form of dividends to stockholders and repurchases of shares of common stock. The actual timing, manner and value of any such options will depend on several factors, including the market price of our stock, general market and economic conditions, our liquidity requirements, applicable legal requirement and other business considerations.
Cash Flows for the nine months ended September 30, 2025 and 2024
The following table provides a summary of our cash flows for the periods indicated.
For the Nine Months
Ended September 30,
Variance
2025
2024
Amount
%
Net cash provided by (used in) operating activities
$
(27,295,426
)
$
27,886,231
$
(55,181,657
)
(197.88
)%
Net cash provided by (used in) investing activities
3,239,523
(5,554,039
)
8,793,562
(158.33
)%
Net cash provided by financing activities
18,470,001
11,584,038
6,885,963
59.44
%
Effect of exchange rate changes
7,973,128
453,908
7,519,220
1,656.55
%
Net change in cash and cash equivalents
2,387,226
34,370,138
(31,982,912
)
(93.05
)%
Cash and cash equivalents as of the beginning of the period
125,044,092
103,022,932
22,021,160
21.38
%
Cash and cash equivalents as of the end of the period
$
127,431,318
$
137,393,070
$
(9,961,752
)
(7.25
)%
Operating Activities
Net cash used in operating activities was $27,295,426 for the nine months ended September 30, 2025, mainly derived from net income of $36,765,128 for the period, reconciled by a gain on redemption of life insurance policies of $8,746,138 and deferred income tax expense of $9,104,235, and net changes in operating assets and liabilities, which mainly included an increase in accounts receivable - related parties of $28,031,690, an increase in finance lease receivables – related parties of $9,227,612, a decrease in customer loans receivable of $12,153,263, a decrease in notes and other payables - related parties of $12,759,536, a decrease in advances from customers – related parties of $5,470,844, and a decrease in income tax payable of $19,936,155.
Net cash provided by operating activities was $27,886,231 for the nine months ended September 30, 2024, mainly derived from net income of $40,142,008 for the period, reconciled by stock-based compensation of $12,807,455, a gain on disposal of subsidiary of $3,813,609, and net changes in operating assets and liabilities, which mainly included a decrease in customer loans receivable of $12,860,220, a decrease in accounts payable of $10,511,619, a decrease in notes and other payables – related parties of $14,030,092, and a decrease in accrued liabilities and other current liabilities of $9,010,270.
Investing Activities
During the nine months ended September 30, 2025, net cash provided by investing activities of $3,239,523 was mainly the result of proceeds from redemption of life insurance policies of $17.7 million, offset by the cash paid for acquisition of subsidiary, net of cash acquired of $14.9 million.
During the nine months ended September 30, 2024, net cash used in investing activities of $5,554,039 was mainly the result of payments made on behalf of a related parties of $5.2 million, purchase of convertible note of $1.7 million, purchase of property and equipment of $2.0 million, and disposal of subsidiary, net of cash disposed of $0.8 million, offset by the repayments from related parties of $6.0 million.
Financing Activities
During the nine months ended September 30, 2025, net cash provided by financing activities of $18,470,001 was mainly due to the borrowings from long-term loans of $14.9 million and the deemed contribution in connection with the price modification on disposal of property and equipment of $9.7 million, offset by repurchase of common stock of $5.0 million.
During the nine months ended September 30, 2024, net cash provided by financing activities of $11,584,038 was mainly due to the proceeds from reverse recapitalization, net of transaction costs of $11.7 million.
Acquisition of Waqoo, Inc. (Tender Offer and Privately Negotiated Purchases)
On November 13, 2025, the Board of Directors of the Company approved the commencement of a tender offer (the “Tender Offer”) for shares of the common stock of Waqoo, Inc. (“Waqoo”), a Japanese corporation listed on the Tokyo Stock Exchange Growth Market.
As of the date of this report, the Company owns 353,600 shares of Waqoo, representing approximately 9.49% of Waqoo’s outstanding shares. In addition, the Company’s Chief Executive Officer, Dr. Yoshiyuki Aikawa, personally holds 989,802 shares of Waqoo, representing approximately 26.58% of Waqoo’s outstanding shares.
The following transactions have been structured:
•
Tender Offer: The Company will conduct the Tender Offer for up to 575,000 shares of Waqoo’s common stock, at a price per share to be determined, from November 14, 2025 through December 12, 2025 (20 business days). Settlement of the Tender Offer is expected to take place on December 19, 2025. The tender offer agent will be SBI Securities Co., Ltd.; and
•
Off-Market Transfer: Subject to the settlement of the Tender Offer, the Company will acquire from Dr. Aikawa all 989,802 shares of Waqoo held by him pursuant to a share transfer agreement dated November 13, 2025.
Following completion of the Tender Offer and the off-market transfer, the Company intends to make Waqoo its consolidated subsidiary and Waqoo will become part of the Company’s consolidated group.
Through this transaction, the Company aims to further accelerate Waqoo’s research and development initiatives and to integrate its advanced technologies and expertise within the SBC Group. By leveraging Waqoo’s capabilities, the Group intends to enhance its offerings in clinical areas such as AGA and orthopedics, develop new treatment methods and proprietary services, and strengthen overall competitiveness.
In addition, the Company and Waqoo will jointly promote the development and implementation of skincare products informed by clinical insights, establishing a seamless framework from research to commercialization. Waqoo’s processing and research know-how is also expected to serve as a technological foundation for the Company’s international operations, supporting joint efforts toward the practical realization of regenerative medicine.
Contractual Obligations
Lease Agreements
The Company holds a significant number of leases classified as operating leases for offices and sublease purposes, and finance leases for certain medical equipment.
As of September 30, 2025, the future maturity of lease liabilities is as follows:
Years ending December 31,
Finance Lease
Operating Lease
Remaining of 2025
$
41,361
$
1,177,273
2026
132,469
2,661,733
2027
76,237
893,682
2028
43,213
235,745
2029
7,004
128,596
Thereafter
—
58,186
Total undiscounted lease payments
300,284
5,155,215
Less: imputed interest
(16,004
)
(45,178
)
Total lease liabilities
$
284,280
$
5,110,037
Bank and Other Borrowings
The Company borrowed loans from various banks and a financial institution for working capital purpose.
There are no off-balance sheet arrangements as of September 30, 2025 and December 31, 2024.
Foreign Exchange Rate Risk
We are exposed to foreign currency exchange rate fluctuations because our business is primarily conducted in Japan and most of our revenues and costs are denominated in Japanese yen, whereas our reporting currency is U.S. dollar. The weakening of the Japanese yen against the U.S. dollar would have a negative impact on our financial results and vice versa.
Critical Accounting Policies and Estimates
We prepare our consolidated financial statements in conformity with U.S. GAAP, which requires us to make judgments, estimates and assumptions. We continually evaluate these estimates and assumptions based on the most recently available information, our own historical experiences and various other assumptions that we believe to be reasonable under the circumstances. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from our expectations as a result of changes in our estimates.
We believe that there have been no material changes to our critical accounting policies and estimates from those disclosed in “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” of our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 28, 2025.
Emerging Growth Company
We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act, and we will 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, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Further, 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 Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (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 companies but any such 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.
Smaller Reporting Company
Additionally, we are a “smaller reporting company,” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of our common stock held by non-affiliates exceeds $250 million as of the last business day of our second fiscal quarter, or (ii) our annual revenue exceeded $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates exceeds $700 million as of the last business day of our second fiscal quarter. If we continue to be a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from these certain reduced disclosure requirements that are available to smaller reporting companies.
ITEM 3. QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.
ITEM 4. CONTROLS
AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Quarterly Report. Based on this evaluation, management concluded that our disclosure controls and procedures were not effective as of September 30, 2025 to provide reasonable assurance that information required to be disclosed in reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure due to identification of material weaknesses.
Despite the identified material weaknesses, we believe that our unaudited consolidated financial statements and other information contained in this Quarterly Report fairly present, in all material respects, our financial condition, and results of operations for the periods presented.
We remain committed to ongoing improvements in our disclosure controls and internal control over financial reporting, including execution of the remediation plan disclosed under “Part II, Item 9A. Controls and Procedures” in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 28, 2025. The material weaknesses previously identified in the Annual Report remained un-remediated as of September 30, 2025.
Inherent Limitation on the Effectiveness of Internal Control
The effectiveness of any system of internal control over financial reporting is subject to inherent limitations. These include the exercise of judgment in designing, implementing, and operating controls, as well as the inherent inability to completely eliminate the risk of misconduct or error. Accordingly, while we aim to establish robust controls, any system, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.
Additionally, the design of our disclosure controls and procedures is impacted by resource constraints and the necessity for management to balance the benefits of potential controls against their associated costs. Moreover, projections of effectiveness into future periods are subject to risks that controls may become inadequate over time due to evolving conditions or diminished compliance. We will continue to monitor and enhance our internal control as necessary or appropriate, but we cannot provide assurance that these improvements will fully eliminate all risks of material misstatement.
Changes in Internal Control over Financial Reporting
Other than the remediation efforts described above, there have been no material changes in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act) during the three months ended September 30, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
We may be subject to legal proceedings, investigations and claims incidental to the conduct of our business from time to time. We are not currently a party to any material litigation or other legal proceedings brought against us. We are also not aware of any legal proceeding, investigation or claim, or other legal exposure that has a more than remote possibility of having a material adverse effect on our business, financial condition or results of operations.
ITEM 1A. RIS
K FACTORS
Investing in our securities involves a high degree of risk. These risks are more fully described under “Part I, Item 1A. Risk Factors” of the Annual Report in addition to the information in this Quarterly Report. There have been no material changes to the risk factors set forth in the Annual Report. Any of these factors could result in a material adverse effect on our results of operations or financial condition.
Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. If any such risks materialize, it could have a material adverse effect on our business, financial condition, results of operations, and growth prospects and cause the trading price of our securities to decline. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC.
ITEM 2. UNREGISTERED SALES OF E
QUITY SECURITIES AND USE OF PROCEEDS
Issuer Purchases of Equity Securities
During the three months ended September 30, 2025, we purchased common stock as set forth below:
Period
Total Number
of Shares
Purchased
Average Price
Paid per Share
Total Number
of Shares
Purchased as Part
of Publicly Announced
Plans or Programs
Approximate
Dollar Value
of Shares
That May Yet Be
Purchased Under the
Plans or Programs
(in millions)
July 1, 2025 – July 31, 2025
521,499
$
5.00
521,499
$
—
August 1, 2025 – August 31, 2025
—
—
—
—
September 1, 2025 – September 30, 2025
—
—
—
—
Total
521,499
521,499
On May 15, 2025, the Company announced the initiation of a share repurchase program for up to $5 million in shares of common stock for the period from May 20, 2025 through May 20, 2026. The Board of Directors authorized repurchases in open market transactions, including under a Rule 10b5-1 trading plan and in accordance with Rule 10b-18 under the Exchange Act. All share repurchases set forth above were made using cash resources. On July 22, 2025, the Company completed its previously announced share repurchase program. Under the program, the Company repurchased an aggregate of 1,034,308 shares of its common stock for a total cash consideration of approximately $5 million, exhausting the full authorization.
On
September
22
, 2025
,
Yoshiyuki Aikawa
, our
Chief Executive Officer and Chairman
,
terminated
his previously disclosed Rule 10b5-1 trading arrangement (the "Aikawa Plan"), which provided for the potential sale of up to
1,030,000
shares of the Company’s common stock from September 22, 2025 to
September 22, 2026
or an earlier date on which all shares thereunder were to be sold
and was
intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act. The Aikawa Plan was terminated prior to execution of any sales pursuant to such plan.
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report.
The agreements and other documents filed as exhibits to this Quarterly Report are not intended to provide factual information or other disclosures other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual statement of affairs as of the date they were made or at any other time.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
SBC Medical Group Holdings Incorporated
Dated: November 14, 2025
/s/ Yuya Yoshida
Name:
Yuya Yoshida
Title:
Chief Financial Officer
(Authorized Signatory and Principal Financial Officer)
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