UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
Amendment No. 1
OR
For
the fiscal year ended
OR
OR
Date of event requiring this shell company report
For the transition period from to
Commission
file number:
Kabushiki Kaisha Robot Consulting
(Exact name of Registrant as specified in its charter)
(Translation of Registrant’s name into English)
(Jurisdiction of incorporation or organization)
(Address of principal executive offices)
Telephone:
Email:
At the address of the Company set forth above
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act.
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| * | Not for trading, but only in connection with the registration of the American depositary shares on The Nasdaq Stock Market LLC. Each American depositary share represents one common share. |
Securities registered or to be registered pursuant to Section 12(g) of the Act.
None
(Title of Class)
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.
None
(Title of Class)
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report: ordinary shares as of March 31, 2025
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ☐
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
Yes ☐
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.
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).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ | |
| ☒ | Emerging growth company |
If
an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, 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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐
If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
| International Financial Reporting Standards as issued by the International Accounting Standards Board ☐ | Other ☐ |
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. Item 17 ☐ Item 18 ☐
If
this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). Yes ☐ No
EXPLANATORY NOTE
The consolidated financial statements and notes to the consolidated financial statements remain the same as the previously filed Form 20-F. In accordance with Rule 12b-15 of the Securities Exchange Act of 1934, as amended, this Amendment No. 1 includes new certifications required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, as amended, dated as of the filing date of this Amendment No. 1.
Except for the changes expressly described above, this Amendment No. 1 continues to present information as of the Original Filing Date and does not amend, supplement, or update any information contained in the Form 20-F to give effect to any subsequent events. The filing of this Amendment No. 1, and the inclusion of newly executed certifications, should not be understood to mean that any other statements or disclosure contained in the Form 20-F are true and complete as of any date subsequent to the Original Filing Date, except as expressly noted above. Accordingly, this Amendment No. 1 should be read in conjunction with the Form 20-F.
Item 18. FINANCIAL STATEMENTS
The consolidated financial statements of our Company are included at the end of this annual report.
Item 19. EXHIBITS
EXHIBIT INDEX
| 1 |
* Previously filed with the annual report on Form 20-F on August 15, 2025
** Furnished with this annual report on Form 20-F
| 2 |
SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.
| ROBOT CONSULTING CO., LTD. | ||
| By: | /s/ Hidetoshi Yokoyama | |
| Hidetoshi Yokoyama | ||
| Representative Director and Chairman | ||
| (Principal Executive Officer) | ||
| Date August 26, 2025 | ||
| 3 |
ROBOT CONSULTING CO., LTD.
INDEX TO FINANCIAL STATEMENTS
| F-1 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Robot Consulting Co., Ltd.
Tokyo, Japan
Opinion on the Financial Statements
We have audited the accompanying balance sheets of Robot Consulting Co., Ltd. (the “Company”) as of March 31, 2025 and 2024, and the related statements of operations, stockholder’s equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
Substantial Doubt Regarding the Company’s Ability to Continue as a Going Concern
The accompanying financial statements have been prepared assuming that Robot Consulting Co., Ltd, will continue as a going concern. As discussed in Note 1 to the financial statements, the Company’s operating losses and accumulated deficit raise substantial doubt about its ability to continue as a going concern. Management’s evaluation of the events and conditions, and management’s plans regarding those matters, are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our opinion is not modified with respect to this matter.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Emphasis of Matter
As discussed in Note 1, the accompanying financial statements reflect retrospective application of the reverse stock split.
/s/ Grassi & Co., CPAs, P.C.
We have served as the Company’s auditor since 2023.
August 14, 2025
| F-2 |
ROBOT CONSULTING CO., LTD.
BALANCE SHEETS
As of March 31, 2025 and 2024
(Yen in thousands, except share data)
| March 31, | ||||||||
| 2025 | 2024 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | ¥ | ¥ | ||||||
| Accounts receivable, net | ||||||||
| Related party receivable | ||||||||
| Deferred offering costs | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total Current Assets | ||||||||
| Non-current Assets: | ||||||||
| Restricted cash | ||||||||
| Property and equipment, net | ||||||||
| Operating lease right-of-use assets, net | ||||||||
| Intangible assets, net | ||||||||
| Investments - Non-current | ||||||||
| Other assets | ||||||||
| Total Assets | ¥ | ¥ | ||||||
| LIABILITIES AND SHAREHOLDERS’ DEFICIT | ||||||||
| Current Liabilities: | ||||||||
| Trade accounts payable | ¥ | ¥ | ||||||
| Other payable | ||||||||
| Accrued expenses | ||||||||
| Deferred revenue - Current | ||||||||
| Current portion of operating lease liabilities | ||||||||
| Total Current Liabilities | ||||||||
| Non-current Liabilities: | ||||||||
| Non-current operating lease liabilities | ||||||||
| Deferred revenue - Non-current | ||||||||
| Other liabilities | ||||||||
| Total Liabilities | ||||||||
| Commitments and contingencies (Note 10) | ||||||||
| SHAREHOLDERS’ DEFICIT: | ||||||||
| Ordinary share, JPY par value - shares authorized as of March 31, 2025 and 2024; shares issued and outstanding as of March 31, 2025 and 2024 | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Shareholders’ Deficit | ( | ) | ( | ) | ||||
| Total Liabilities & Shareholders’ Deficit | ¥ | ¥ | ||||||
The accompanying notes are an integral part of the financial statements.
| F-3 |
ROBOT CONSULTING CO., LTD.
STATEMENTS OF OPERATIONS
For the Fiscal Years Ended March 31, 2025, 2024 and 2023
(Yen in thousands, except share and per share data)
| For the Fiscal Years Ended March 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Revenue | ¥ | ¥ | ¥ | |||||||||
| Cost of revenue | ||||||||||||
| Gross profit | ||||||||||||
| Operating expenses: | ||||||||||||
| Research and development | ||||||||||||
| Selling, General and Administrative Expenses | ||||||||||||
| Total operating expenses | ||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ||||||
| Other income (expenses), net | ( | ) | ( | ) | ( | ) | ||||||
| Interest expenses | ( | ) | ||||||||||
| Loss before income taxes | ( | ) | ( | ) | ( | ) | ||||||
| Provision for income taxes | ||||||||||||
| Net Loss | ¥ | ( | ) | ¥ | ( | ) | ¥ | ( | ) | |||
| Net loss per share attributable to shareholders, basic and diluted | ¥ | ) | ¥ | ) | ¥ | ) | ||||||
| Weighted-average shares outstanding used to compute net loss per share, basic and diluted | ||||||||||||
The accompanying notes are an integral part of the financial statements.
| F-4 |
ROBOT CONSULTING CO., LTD.
STATEMENTS OF SHAREHOLDERS’ EQUITY/(DEFICIT)
For the Fiscal Years Ended March 31, 2025, 2024, and 2023
(Yen in thousands, except share data)
| Share Class | Additional | Total Shareholders’ | ||||||||||||||||||||||
| Ordinary Share | Paid-In | Subscription | Accumulated | Equity | ||||||||||||||||||||
| Shares | Amount | Capital | Receivable | Deficit | (Deficit) | |||||||||||||||||||
| Balance, March 31, 2022 | ¥ | ¥ | ¥ | ( | ) | ¥ | ( | ) | ¥ | |||||||||||||||
| Sale of ordinary shares | ||||||||||||||||||||||||
| Cash receipt for subscription receivable | — | |||||||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||
| Balance, March 31, 2023 | ( | ) | ( | ) | ||||||||||||||||||||
| Sale of ordinary shares | ||||||||||||||||||||||||
| Cash receipt for subscription receivable | — | |||||||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||
| Balance, March 31, 2024 | ( | ) | ( | ) | ||||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||
| Balance, March 31, 2025 | ¥ | ¥ | ¥ | ¥ | ( | ) | ¥ | ( | ) | |||||||||||||||
The accompanying notes are an integral part of the financial statements.
| F-5 |
ROBOT CONSULTING CO., LTD.
STATEMENTS OF CASH FLOWS
For the Fiscal Years Ended March 31, 2025, 2024, and 2023
(Yen in thousands)
| For the Fiscal Years Ended March 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Cash flows from operating activities: | ||||||||||||
| Net loss | ¥ | ( | ) | ¥ | ( | ) | ¥ | ( | ) | |||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||
| Depreciation and amortization | ||||||||||||
| Noncash lease expenses | ||||||||||||
| Loss on disposal of property and equipment | ||||||||||||
| Impairment loss on investments | ||||||||||||
| Change in allowance for credit losses | ( | ) | ||||||||||
| Accounts receivable | ( | ) | ( | ) | ||||||||
| Related party receivable | ( | ) | ( | ) | ||||||||
| Prepaid expenses and other current assets | ( | ) | ( | ) | ||||||||
| Other Assets | ( | ) | ( | ) | ||||||||
| Accounts payable and accrued expenses | ( | ) | ||||||||||
| Deferred revenue | ||||||||||||
| Operating lease liabilities | ( | ) | ( | ) | ( | ) | ||||||
| Other liabilities | ||||||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ( | ) | ||||||
| Cash flows from investing activities: | ||||||||||||
| Purchase of property and equipment | ( | ) | ( | ) | ( | ) | ||||||
| Purchase of intangible assets | ( | ) | ( | ) | ||||||||
| Acquisition of investments | ( | ) | ( | ) | ||||||||
| Proceeds from sales of investment | ||||||||||||
| Net cash used in investing activities | ( | ) | ( | ) | ( | ) | ||||||
| Cash flows from financing activities: | ||||||||||||
| Payment for deferred offering costs | ( | ) | ( | ) | ( | ) | ||||||
| Proceeds from stock issuance | ||||||||||||
| Proceeds received for subscription receivable | ||||||||||||
| Net cash provided by financing activities | ( | ) | ||||||||||
| Net increase in cash, cash equivalents and restricted cash | ( | ) | ||||||||||
| Cash, cash equivalents and restricted cash at beginning of period | ||||||||||||
| Cash, cash equivalents and restricted cash at end of period | ¥ | ¥ | ¥ | |||||||||
| Reconciliation of cash, cash equivalents and restricted cash | ||||||||||||
| Cash and cash equivalents | ¥ | ¥ | ¥ | |||||||||
| Restricted cash | ||||||||||||
| Total cash, cash equivalents and restricted cash | ¥ | ¥ | ¥ | |||||||||
The accompanying notes are an integral part of the financial statements.
| F-6 |
ROBOT CONSULTING CO., LTD.
NOTES TO FINANCIAL STATEMENTS
For the Fiscal Years Ended March 31, 2025, 2024 and 2023
(Yen in thousands, except share and per share data)
1. Nature of Operations
Robot Consulting Co., Ltd. (the “Company”) was incorporated on April 17, 2020 in Tokyo, Japan. The Company’s principal product is Labor Robot, a cloud-based software which provides human resource solutions, The Company also provides consulting support services such as e-learning courses relating to digital transformation and software installation services. The Company is committed to researching, developing, and selling artificial intelligence (“AI”) technology.
Stock
Split -
Going concern
The
Company had a loss of JPY
The Company’s financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. The Company’s ability to continue as a going concern is dependent upon the Company’s ability to attract and retain revenue generating customers, acquire new customer contracts, and secure additional financing.
The Company may consider obtaining additional financing in the future through the issuance of the Company’s ordinary shares through other equity or debt financings, or other means. The Company, however, is dependent upon its ability to obtain new revenue generating customer contracts and secure equity and/or debt financing and there are no assurances that the Company will be successful. The financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts, or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying financial statements are presented in thousand Japanese yen, (“JPY” or “¥”), the currency of the country in which the Company is incorporated and primarily operates. The accompanying financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”).
Use of Estimates
The preparation of the financial statements in conformity with the U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the reporting date, and the reported amounts of revenue and expense during the reporting period. These estimates are based on management’s best knowledge of current events and actions that the Company may undertake in the future and include, but are not limited to, useful lives of property and equipment, the carrying value of operating lease right-of-use asset, allowance for credit losses on accounts receivable, valuation of stocks, and valuation allowance against net deferred tax assets. Actual results could differ from those estimates.
| F-7 |
Revenue Recognition
The Company applies Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”) for all periods presented in the financial statements. To determine the appropriate amount of revenue to be recognized in accordance with ASC 606, the Company follows a five-step model as follows:
1 – Identification of the contract with a customer
2 – Identification of the performance obligation in the contract
3 – Determination of the transaction price
4 – Allocation of the transaction price to the performance obligation in the contract
5 – Recognition of revenue when, or as, a performance obligation is satisfied
During the fiscal years ended March 31, 2025 and 2024, the Company generated revenues from sales of software, consulting and support services, advertising services, and outsourcing services.
Revenue is recognized when the control of the promised products or services is transferred by the Company to its customer. The amount of revenue recognized reflects the consideration that the Company expects to receive in exchange for the products or services delivered. The transaction prices are generally fixed at contract inception. Consumption taxes collected from customers and remitted to government authorities are excluded from revenue and deferred revenue.
At contract inception, the Company assesses the performance obligations, or deliverables, the Company has agreed to provide pursuant to the contract and determines if they are individually distinct or if they should be combined with other performance obligations. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on each performance obligation’s relative standalone selling price. Performance obligations are combined when an individual performance obligation does not have standalone value to its customer. For example, customers do not have the ability to take possession of the software, Labor Robot, and, as a result, the Company’s contracts for sales of software and hosting service arrangement are typically accounted for as service arrangements with a single performance obligation.
Sales of Software
Revenue from sales of software is primarily comprised of sales of Labor Robot. Revenue is recognized on a straight-line basis over the period of five years as the Company’s performance obligation is satisfied over-time and as control of the promised service is transferred to the customer, commencing when the product key is delivered to the customer.
Consulting and Support Services
Revenue from consulting and support services is recognized when the control of the promised service is transferred by the Company to its customer. Consulting and support services the Company provided during the fiscal years ended March 31, 2025, 2024 and 2023, include the following services. See note 13 for the disaggregation of revenue.
E-learning: The Company provides online training courses to help employees of small and medium-sized businesses learn the latest trends in digital transformation. Revenue is recognized on a straight-line basis over the contract period which is generally one month as the Company’s performance obligation is satisfied over-time, commencing when the access code is delivered to the customer.
E-commerce store set-up service: The Company assists customers in building their e-commerce stores on a metaverse and building e-commerce websites. Revenue is recognized at the point in time when the transfer of control occurs, which is upon completion of set-up service.
| F-8 |
Software installation support: The Company helps customers with the installation and initial set-up of the software and provides support services during the contract period. Revenue is recognized on a straight-line basis over the contract period which is generally one year as the Company’s performance obligation is satisfied over-time.
IT system installation subsidy application consulting and support service: The Company provides consulting and support services on IT system installation subsidy application to corporate customers to help them reduce the costs of installing and implementing new IT products. Revenue is recognized at the point in time when the transfer of control occurs, which is when the Company completes submitting applications for IT system installation subsidies to the Ministry of Economy, Trade, and Industry or an entrusted organization. Fees for consulting and support services are only paid if the customer receives the subsidies, and revenue is recognized only if the application is approved.
From time to time, the Company engages subcontractors for developing software and performing services such as applying for IT system installation subsidies and setting up e-commerce website. The Company assesses and records revenue on a gross basis as a principal versus on a net basis as an agent in the presentation of revenues and expenses. The Company has concluded that the Company is the principal in the performance obligation to provide consulting and support services and gross reporting is appropriate because the Company (i) has the risk of identifying and hiring qualified vendors, (ii) has the discretion to select the vendors and establish their price and duties, and (iii) bears the risk for services that are not fully paid for by its customers.
Advertising Services
Revenue from advertising services is from advertising the services provided by the Company’s customer, ASC Certified Consultant Corporation (“ASC Consultant”). The Company shows ASC Consultant’s contact information on Labor Robot to promotes ASC Consultant’s grants or subsidies application support services to Labor Robot’s users.
Revenue from advertising services is recognized on a straight-line basis over the contract period as the Company’s performance obligation is satisfied over-time.
Outsourcing Services
Revenue from outsourcing services is from outsourcing the Company’s employees to support the marketing services of its customer, ASC Consultant.
Segment Information
ASC 280, Segment Reporting, establishes standards requiring companies to report in their financial statements information about operating segments, on a basis consistent with the Company’s internal organizational structure, as well as information about geographical areas, business segments, and major customers, to provide details on the Company’s business segments.
The Company operates and manages its business as one operating and reportable segment, focused on sales of software and provision of
consulting and support services. The Company’s representative director is considered the Chief Operating Decision Maker
(“CODM”). The CODM evaluates the Company’s financial performance and allocates resources on a consolidated basis. As
such, the Company has determined that it has
The table below shows the reconciliation between the net loss prepared in accordance with accounting principles generally accepted in Japan (“J GAAP”) and the U.S. GAAP.
| Fiscal Year Ended March 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Net loss - J GAAP | ¥ | ( | ) | ¥ | ( | ) | ¥ | ( | ) | |||
| Reconciling items | ( | ) | ( | ) | ( | ) | ||||||
| Net loss - US GAAP | ( | ) | ( | ) | ( | ) | ||||||
| F-9 |
Concentration of Customers and Vendors
For the fiscal year ended March 31, 2025, there were two customers, and for the fiscal year ended March 31, 2024, there was no customer, and for the fiscal year ended March 31, 2023, there was one customer, who accounted for more than 10% of the Company’s total revenue in each period. As of March 31, 2025, there were three customers, and as of March 31, 2024, there were no customers who accounted for more than 10% of the Company’s total accounts receivable as of the end of the respective period.
For the fiscal years ended March 31, 2025 and 2024, there was no vendor, and for the fiscal year ended March 31, 2023, there were two vendors, who individually accounted for more than 10% of the Company’s total purchase. As of March 31, 2025 and 2024, two vendors, who accounted for more than 10% of the Company’s total accounts payable as of the end of each respective period.
Cash and Cash Equivalents
The Company considers all highly liquid short-term investments purchased with an initial maturity date of three months or less to be cash equivalents. The Company’s restricted cash consists of the earmarked balance related to an ongoing lawsuit with ZESTO Consulting LLC disclosed in Footnote 9.
Accounts Receivable, Net
Accounts receivable primarily consist of the amounts billed and currently due from customers, net of an allowance for credit loss, if recorded. When the Company has an unconditional right to payment, subject only to the passage of time, the right is treated as receivable. The Company’s accounts receivable balances are unsecured, bearing no interest. Fees billed in advance of the related contractual term represent contract liabilities and presented as deferred revenue.
Accounts receivable is subject to collection risk. The Company performs evaluations of its customers’ financial positions and generally extends credit on account, without collateral. The Company determines the need for an allowance for doubtful accounts based on various factors, including the credit quality of the customer, the age of the receivable balance, and current economic conditions.
The Company adopted ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, effective April 1, 2023. The impact of the adoption was not considered material to the financial statements and primarily resulted in enhanced disclosures only.
At each balance sheet date, the Company recognizes an expected allowance for credit losses. In addition, also at each reporting date, this estimate is updated to reflect any changes in credit risk since the receivable was initially recorded. This estimate is calculated on a pooled basis where similar risk characteristics exist.
The
allowance estimate is derived from a review of the Company’s historical losses on the aging of receivables. This estimate is adjusted
for management’s assessment of current conditions, reasonable and supportable forecasts regarding future events, and any other
factors deemed relevant by the Company. The Company believes that historical loss information is a reasonable starting point to calculate
the expected allowance for credit losses, given that the composition of the Company’s customers has remained constant. The Company
recorded JPY
The
Company writes off receivables when there is information indicating that any debtor is facing significant financial difficulty and there
is no possibility of recovery. If any recoveries are made from any accounts previously written off, they will be recognized as income
or an offset to credit loss expense in the year of recovery. The amount of receivable that The Company wrote off during the fiscal years
ended March 31, 2025 and 2024 was JPY
The
amount of receivable included at the beginning of fiscal years ended Mach 31, 2025 and 2024 was JPY
| F-10 |
Deferred Offering Costs
The
Company capitalizes certain legal, accounting and other third-party fees that are directly related to an equity financing that is likely
to be successfully completed, until such financing is consummated. After consummation of an equity financing, these costs are recorded
as a reduction of the proceeds received as a result of the financing. Should a planned equity financing be abandoned, terminated, or
significantly delayed, the deferred offering costs are immediately written off to operating expenses in the Statements of Operations
in the period of determination. As of March 31, 2025 and 2024, deferred offering costs that were capitalized related to the Company’s
initial public offering (“IPO”) were JPY
Property and Equipment, Net
Property and equipment are recorded at the cost less accumulated depreciation. Depreciation is computed using the straight-line method, depending on the pattern of consumption of the economic benefits by asset class, over the estimated useful lives of the assets, as follows:
| Property and Equipment | Estimated Useful Life | |
| Fixtures | Shorter
of | |
| Tooling and equipment | ||
| Computer and other equipment |
Repair and maintenance costs are expensed as incurred. The Company records depreciation expenses in selling, general and administrative expenses in the Statements of Operations.
Intangible assets, Net
Intangible
assets consist of the Company’s patents, trademarks, and software. Amortization is computed using the straight-line method,
over the estimated useful lives of the assets, which is typically eight
years for patents,
Impairment or Disposal of Long-Lived Assets
Long-lived assets with finite lives include property and equipment, net, software, operating lease right-of-use assets, and Intangible assets, net subject to amortization. Long-lived assets used in operations are reviewed for impairment whenever events or changes in circumstances indicate that carrying amounts may not be recoverable. For long-lived assets to be held and used, the Company recognizes an impairment loss only if the carrying amount is not recoverable when compared to the Company’s undiscounted cash flows and the impairment loss is measured based on the difference between the carrying amount and fair value. Long-lived assets held for sales are reported at the lower of cost or fair value less costs to sell. There were no impairments of long-lived assets during the fiscal years ended March 31, 2025, 2024 and 2023.
Leases
Leases are comprised of operating leases for office space. In accordance with the Financial Accounting Standards Board (“FASB”) ASC Topic 842, Leases, the Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, current portion of operating lease liabilities, and non-current operating lease liabilities in the Balance Sheets. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date.
| F-11 |
For leases with terms greater than 12 months, the Company records an ROU asset and a lease liability representing the present value of future lease payments. The discount rate used to measure the lease asset and liability is determined at the beginning of the lease term using the rate implicit in the lease, or the Company’s collateralized incremental borrowing rate. The implicit rate within the Company’s leases is generally not determinable and, therefore, the incremental borrowing rate at lease commencement is utilized to determine the present value of lease payments. The Company estimates its incremental borrowing rate based on third-party lender quotes to obtain secured debt in a like currency for a similar asset over a timeframe similar to the term of the lease. For those contracts that include fixed rental payments for both the use of the asset (“lease costs”) as well as for other occupancy or service costs relating to the asset (“non-lease costs”), the Company generally includes both the lease costs and non-lease costs in the measurement of the lease asset and liability.
The Company has elected the “package of practical expedients” and as a result is not required to reassess its prior accounting conclusions regarding lease identification, lease classification and initial direct costs for lease contracts existing as of the transition date. The Company accounts for each lease and any associated non-lease components as a single lease component across all asset classes. Lease expenses for the Company’s operating leases are recognized on a straight-line basis over the lease term except for variable lease costs, which are expensed as incurred.
Investments
In the normal course of business, the Company invests in business partners that support the Company’s underlying business strategy and provide the Company the ability to enter into new markets thereby expanding the reach of the Company’s products and services.
The Company’s investments consist of investments in privately held entities that do not report net asset value (“NAV”) per share. These investments are measured at costs, adjusted for observable price changes and impairments. Gain or loss resulting from price changes and impairments are recognized in other income (expense), net in the Statement of Operations.
Fair Value of Financial Instruments
The Company reports financial assets and liabilities and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis in accordance with ASC Topic 820 Fair Value Measurement (“ASC 820”). ASC 820 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions and credit risk.
ASC 820 also establishes a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three levels. The U.S. GAAP established a hierarchy framework to classify the fair value based on the observability of significant inputs to the measurement.
The levels of the fair value hierarchy are as follows:
Level 1: Determined using an unadjusted quoted price in an active market for identical assets or liabilities.
Level 2: Estimated using inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly.
Level 3: Estimated using unobservable inputs that are significant to the fair value of the assets or liabilities.
The fair value of the Company’s investments is determined based on inputs not observable in the market and classified as Level 3 within the fair value hierarchy.
| F-12 |
Foreign Currency
The Company uses Japanese yen as its reporting currency. The Company’s functional currency is Japanese yen. Monetary assets and liabilities denominated in currencies other than the functional currency are remeasured into the functional currency of the Company at the balance sheet date foreign exchange rate, and gains and losses resulting from such remeasurement are included in other income (expenses), net in the Statement of Operations. Foreign currency denominated income and expenses are remeasured using the average exchange rate for the period.
Deferred Revenue
The timing of revenue recognition may not align with the right to invoice the customer. The Company records accounts receivable when it has the unconditional right to issue an invoice and receive payment regardless of whether revenue has been recognized. If revenue has not yet been recognized, then deferred revenue, or contract liability, is recorded. Deferred revenue consists of consideration recorded in advance of performance obligations being delivered and is classified as current or non-current based on the related period in which services are expected to be provided. See note 13 for the roll forward of deferred revenue.
Cost of Revenue
Cost of revenue primarily consists of costs paid to the Company’s vendors and costs paid to its employees related to the Company’s delivery of services.
Research and Development Costs
Research and development (“R&D”) costs consist primarily of fees paid to vendors for research, prototyping and consulting. Most R&D costs are expensed as incurred.
Time and costs incurred between establishment of technological feasibility and the release of software product is not material, and the costs incurred during this period is recorded as R&D costs.
Advertising Costs
Advertising
and marketing costs are expensed as incurred and are included in selling, general and administrative expenses in the Statement of Operations.
For the fiscal years ended March 31, 2025, 2024 and 2023, these costs were JPY
Income Taxes
The Company accounts for income taxes under the asset and liability method in accordance with ASC Topic 740, “Income Taxes”, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the differences between the financial statement and tax basis of assets, liabilities and net operating loss by using enacted tax rate in effect for the fiscal year in which the differences are expected to reverse. The effect of a change in tax rate on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.
The Company recognizes deferred tax assets to the extent that these assets are believed to be more likely than not to be realized. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts that are more likely than not expected to be realized. In making such a determination, all available positive and negative evidence is considered, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations.
| F-13 |
The Company files tax returns in the tax jurisdictions of Japan. Tax benefits for uncertain tax positions are based upon management’s evaluation of the information available at the reporting date. To be recognized in the financial statements, a tax benefit must be at least more likely than not of being sustained based on technical merits. The benefit for positions meeting the recognition threshold is measured as the largest benefit more likely than not of being realized upon settlement with a taxing authority that has full knowledge of all relevant information.
Basic net loss per ordinary share is calculated by dividing the net loss by the weighted-average number of ordinary shares outstanding during the period, without consideration for potentially dilutive securities. Diluted net loss per ordinary share is computed by dividing the net loss by the weighted-average number of ordinary shares and potentially dilutive securities outstanding for the period determined using the treasury stock method.
Recently Issued Accounting Pronouncements
As an emerging growth company, the Jumpstart Our Business Startups Act allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The Company has elected to delay adoption of certain new or revised accounting standards. As a result, the Company’s financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective date for new or revised accounting standards that are applicable to public companies.
In November 2024, the FASB issued ASU No. 2024-03 Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This ASU requires public business entities to disclose, for interim and annual reporting periods, additional information about certain income statement expense categories. The requirements are effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027. Entities are permitted to apply either the prospective or retrospective transition methods. The Company is currently evaluating the impact that the adoption of this ASU will have on its financial statements.
In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The standard requires entities to disclose specific categories in the rate reconciliation and to provide additional information for reconciling items that meet a quantitative threshold. It also requires entities to disclose certain information regarding income taxes paid and other disclosures related to income and income tax expense from continuing operations. The standard is effective for fiscal years beginning after December 15, 2025 for public business entities and for fiscal years beginning after December 15, 2025 for all other entities. The Company is currently evaluating the impact that the adoption of this standard will have on its financial statements.
In October 2023, the FASB issued ASU 2023-06, “Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative” (“ASU 2023-06”). This ASU incorporates certain SEC disclosure requirements into the FASB ASC. The amendments in the ASU are expected to clarify or improve disclosure and presentation requirements of a variety of ASC Topics, enabling users to more easily compare entities subject to the SEC’s existing disclosures with those not previously subject to the requirements, and aligning the requirements in the ASC with the SEC regulations. The ASU has an unusual effective date and transition requirements since it is contingent on future SEC rule making. If the SEC fails to enact the required changes by June 30, 2027, this ASU is not effective for any entities. Early adoption is not permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its financial statements
3. Prepaid expenses and other current assets
As of March 31, 2025, and 2024, prepaid expenses and other current assets include the following components:
| March 31, | ||||||||
| 2025 | 2024 | |||||||
| Advance payment | ¥ | ¥ | ||||||
| Prepaid expenses | ||||||||
| Deposit | ||||||||
| Consumption taxes paid | ||||||||
| Others | ||||||||
| Total Prepaid expenses and other current assets | ¥ | ¥ | ||||||
| F-14 |
4. Property and Equipment, Net
As of March 31, 2025 and 2024, property and equipment consisted of the following:
| March 31, | ||||||||
| 2025 | 2024 | |||||||
| Fixtures | ¥ | ¥ | ||||||
| Tooling and equipment | ||||||||
| Computer and other equipment | ||||||||
| Vehicle | ||||||||
| Total property and equipment | ¥ | ¥ | ||||||
| Less: Accumulated depreciation | ( | ) | ( | ) | ||||
| Total property and equipment, net | ¥ | ¥ | ||||||
The
Company recognized depreciation expenses on property and equipment of JPY
5. Intangible assets, Net
As of March 31, 2025 and 2024, intangible assets consisted of the following:
| March 31, | ||||||||
| 2025 | 2024 | |||||||
| Patents | ¥ | ¥ | ||||||
| Trademarks | ||||||||
| Software - WIP | ||||||||
| Total intangible assets | ||||||||
| Less: Accumulated amortization | ( | ) | ( | ) | ||||
| Total intangible assets, net | ¥ | ¥ | ||||||
The
Company recognized amortization expenses on intangible assets of JPY
| F-15 |
6. Leases
The Company has an operating lease for office space and a printer. As of March 31, 2025 and 2024, the following amounts were recorded on the Balance Sheets relating to the Company’s operating lease.
| March 31, | ||||||||
| 2025 | 2024 | |||||||
| Right-of-Use Assets | ||||||||
| Operating lease assets | ¥ | ¥ | ||||||
| Lease Liabilities | ||||||||
| Operating lease liabilities - Current | ¥ | ¥ | ||||||
| Operating lease liabilities - Non-current | ||||||||
The following table summarizes the contractual maturities of operating lease liabilities as of March 31, 2025:
| 2026 | ¥ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| Total lease payments | ||||
| Less amounts representing interest | ( | ) | ||
| Present value of lease payments | ||||
| Less: current portion | ( | ) | ||
| Non-current lease liabilities | ¥ |
The following table illustrates information regarding the Company’s operating leases as of and for the fiscal years ended March 31, 2025 and 2024:
| March 31, | ||||||||
| 2025 | 2024 | |||||||
| Total operating lease cost | ¥ | ¥ | ||||||
| Cash paid for amounts included in the measurement of the operating lease liability | ¥ | ¥ | ||||||
| Weighted average remaining lease term (years) | ||||||||
| Weighted average discount rate | % | % | ||||||
The Company did not have significant sublease income or variable lease costs for the fiscal years ended March 31, 2025, 2024 and 2023.
7. Investments
The fair value of the Company’s investments is determined based on inputs not observable in the market and classified as Level 3 within the fair value hierarchy.
The following table summarizes the activity in investments during the fiscal years ended March 31, 2025 and 2024:
| March 31, | ||||||||
| 2025 | 2024 | |||||||
| Balance, beginning of period | ¥ | ¥ | ||||||
| Additions | ||||||||
| Disposals | ( | ) | ||||||
| Impairment loss | ( | ) | ||||||
| Balance, end of period | ¥ | ¥ | ||||||
The
Company recognized impairment loss on investments of , JPY
| F-16 |
8. Other payables
As of March 31, 2025 and 2024, other payables consisted of the following:
| March 31, | ||||||||
| 2025 | 2024 | |||||||
| Outsourcing fees | ¥ | ¥ | ||||||
| Professions fees | ||||||||
| Sales and marketing | ||||||||
| Research and development | ||||||||
| Income tax withholding | ||||||||
| Compensations | ||||||||
| Business tax payable | ||||||||
| Others | ||||||||
| Total other payables | ¥ | ¥ | ||||||
9. Commitments and Contingencies
Guarantees and Commitments
There
were
Legal Matters
From
time to time in the normal course of business, the Company may be subject to various legal matters such as threatened or pending claims
or proceedings. There were
On
May 14, 2023, the Company was served with a complaint by ZESTO Consulting LLC (“ZESTO”) demanding unpaid system development
fees of JPY
Indemnification
In the ordinary course of business, the Company often includes standard indemnification provisions in its arrangements with third parties. To date, the Company has not paid any material claims or been required to defend any material actions related to its indemnification obligations. However, the Company may record charges in the future as a result of these indemnification obligations.
| F-17 |
| For the Fiscal Years Ended March 31 | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Basic and Diluted Net Loss Per Ordinary Share: | ||||||||||||
| Net loss attributable | ¥ | ( | ) | ¥ | ( | ) | ¥ | ( | ) | |||
| Weighted average ordinary shares outstanding | ||||||||||||
| Basic and diluted net loss per ordinary share | ¥ | ) | ¥ | ) | ¥ | ) | ||||||
11. Income Taxes
The components of loss before income taxes, by geography, consists of the following:
| For the Fiscal Years Ended March 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Japan | ¥ | ( | ) | ¥ | ( | ) | ¥ | ( | ) | |||
During the fiscal years ended March 31, 2025, 2024 and 2023, the Company had tax expense.
The
Company is subject to national and local income taxes in Japan which, in the aggregate, indicate a statutory rate of approximately
A reconciliation of income tax expense to the amount of income tax expense (benefit) at the statutory rate in Japan for the fiscal years ended March 31, 2025, 2024 and 2023 is as follows:
| For the Fiscal Years Ended March 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Income tax benefit at the statutory rate | ¥ | ( | ) | ¥ | ( | ) | ¥ | ( | ) | |||
| Increase (reduction) in taxes resulting from: | ||||||||||||
| Change in valuation allowance | ||||||||||||
| Permanent difference | ( | ) | ( | ) | ( | ) | ||||||
| Unrecognizable loss carryforwards | ||||||||||||
| Non-deductible expenses | ||||||||||||
| Rate difference | ( | ) | ||||||||||
| Inhabitat and business tax | ( | ) | ( | ) | ||||||||
| Other | ( | ) | ||||||||||
| Income tax expense | ¥ | ¥ | ¥ | |||||||||
| F-18 |
Significant components of deferred tax assets and liabilities are as follows:
| March 31, | ||||||||
| 2025 | 2024 | |||||||
| Deferred tax assets: | ||||||||
| Deferred revenue | ¥ | ¥ | ||||||
| Net operating loss carryforwards | ||||||||
| Accrued expenses and reserves | ||||||||
| Operating lease liabilities | ||||||||
| Other | ||||||||
| Total deferred tax assets | ||||||||
| Deferred tax liabilities: | ||||||||
| Depreciation and amortization | ¥ | ¥ | ||||||
| Operating lease ROU assets | ||||||||
| Total deferred tax liabilities | ||||||||
| Less: Valuation allowance | ( | ) | ( | ) | ||||
| Net deferred tax assets/(liabilities) | ¥ | ¥ | ||||||
The
Company has net operating loss carryforwards of JP
The Company has evaluated the positive and negative evidence bearing upon the realizability of its net deferred tax assets. Due to the Company’s history of net losses and the difficulty in predicting future results, the Company concluded it was not more likely than not that the deferred tax assets would be utilized. Accordingly, the Company has established a full valuation allowance against net deferred tax assets as of March 31, 2025 and 2024. Significant management judgment is required in determining the Company’s deferred tax assets and liabilities and valuation allowances for purposes of assessing its ability to realize any future benefit from its net deferred tax assets. The Company intends to maintain this valuation allowance until sufficient positive evidence exists to support the reversal of the valuation allowance. Income tax expense recorded in the future will be reduced to the extent that sufficient positive evidence materializes to support a reversal of, or decrease in, the Company’s valuation allowance.
The net changes in the total valuation allowance for net deferred tax assets for the fiscal years ended March 31, 2025 and 2024 consist of the following:
| For the Fiscal Years Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Valuation allowance at beginning of year | ¥ | ¥ | ||||||
| Additions (deductions) | ||||||||
| Valuation allowance at end of year | ¥ | ¥ | ||||||
For
the fiscal years ended March 31, 2025, 2024 and 2023, the Company had
Interest and penalties related to income tax matters are recognized as a component of selling, general and administrative expenses in the Statements of Operations, if applicable. The Company did not have any interest or penalties associated with any uncertain tax benefits that had been accrued or recognized as of and for the fiscal years ended March 31, 2025, 2024 and 2023.
The Company files national and local income tax returns within Japan. As of the reporting date, the Company is not currently, or has it been, under income tax examination, but it may be subject to examination in the future. The tax authorities could perform tax examination on years as early as the tax year ended March 31, 2025.
| F-19 |
12. Shareholders’ Equity (Deficit)
Ordinary Shares
As
of March 31, 2025, the Company has ordinary shares authorized.
13. Revenue
Disaggregation of Revenue
The tables below reflect revenue by major source, timing of transfer of goods and services, and geographical markets for the fiscal years ended March 31, 2025, 2024 and 2023:
| For the Fiscal Years Ended March 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Sales of Software | ¥ | ¥ | ¥ | |||||||||
| Consulting and Support Services | ||||||||||||
| Advertising Services | ||||||||||||
| Outsourcing Services | ||||||||||||
| Total | ¥ | ¥ | ¥ | |||||||||
During the fiscal year ended March 31, 2025, revenue from consulting and support services was generated from the provision of e-learning and software installation support services. During the fiscal year ended March 31, 2024, revenue from consulting and support services was generated from the provision of e-learning, e-commerce store set-up services, and software installation support services, while during the fiscal year ended March 31, 2023, revenue from consulting and support services was generated from the provision of IT system installation subsidy application consulting and support services.
| For the Fiscal Years Ended March 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Timing of transfer of goods and services | ||||||||||||
| Point in time | ||||||||||||
| Over time | ||||||||||||
| Total | ¥ | ¥ | ¥ | |||||||||
| For the Fiscal Years Ended March 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Geographical markets | ||||||||||||
| Japan | ||||||||||||
| Total | ¥ | ¥ | ¥ | |||||||||
| F-20 |
The following table summarizes the activity in deferred revenue during the fiscal years ended March 31, 2025 and 2024.
| For the Fiscal Years Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Deferred revenue, beginning of period | ¥ | ¥ | ||||||
| Deferred revenue, end of period | ||||||||
| Revenue recognized in the period from amounts included in deferred revenue at the beginning of period | ||||||||
Changes in deferred revenue are primarily due to the timing of revenue recognition and cash collections. As of March 31, 2025 and 2024, deferred revenue represents the Company’s remaining performance obligations to provide software, e-learning and software installation support services for which consideration has been received.
As
of March 31, 2025, JPY
14. Cost of revenue
Disaggregation of Cost of revenue
The table reflects cost of revenue by major source for the fiscal years ended March 31, 2025, 2024 and 2023:
| Fiscal Year Ended March 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Sales of Software | ¥ | ¥ | ¥ | |||||||||
| Consulting and Support Services | ||||||||||||
| Advertising Services | ||||||||||||
| Outsourcing Services | ||||||||||||
| Total | ¥ | ¥ | ¥ | |||||||||
For the fiscal year ended March 31, 2024, cost of revenue from consulting and support services mainly relates to the personnel costs to provide e-learning and software installation support services. For the fiscal year ended March 31, 2024, cost of revenue from consulting and support services mainly relates to the personnel costs and costs paid to the Company’s vendors to set up e-commerce site. For the fiscal year ended March 31, 2023, cost of revenue from consulting and support services mainly relates to the costs paid to the vendor who provide IT system installation subsidy application services.
| F-21 |
On February 6, 2024, the Company’s Board of Directors approved the issuance of the stock options. On February 7, 2024, stock options to purchase in aggregate of ordinary shares at an exercise price of JPY per ordinary share were granted to the Company’s directors, employees and consultants. The options vest upon the successful completion of IPO, which is a performance condition. The options are exercisable only after February 7, 2026 and have a contractual term of . Achievement of the IPO-based performance condition of stock options is not deemed to be probable until such event occurs. Therefore, no stock options vest, are expected to vest, or are exercisable prior to the Company’s IPO. Accordingly, the Company recognizes no stock-based compensation expense prior to the IPO.
The fair value of the stock options as of the grant date was JPY and was estimated using the Black-Scholes option-pricing model. The following table summarizes the significant assumptions used to estimate the fair value of the stock options.
| Expected term | years | |||
| Expected volatility | % | |||
| Expected dividend rate | % | |||
| Risk-free rate | % |
As
of March 31, 2025, there was a total of JPY
As of March 31, 2025 and March 31, 2024, the Company had nonvested stock options with weighted-average grant-date fair value of JPY per option.
16. Consulting Agreement
On
April 24, 2023, the Company entered into a consulting and services agreement with Spirit Advisors, LLC. (“Spirit Advisors”)
pursuant to which it agreed to compensate Spirit Advisors with cash consideration of US$
As of December 18, 2024, pursuant to the side letter agreement between the Company and Spirit Advisors, the Spirit Warrants were cancelled due to structural limitations specific to the Company’s shareholder framework and internal procedures.
| F-22 |
17. Related Party
The related parties that had material balances and transactions as of and for the fiscal years ended March 31, 2025 and 2024 consist of the following:
| Name of Related Party | Nature of Relationship on March 31, 2025 | |
| Hidetoshi Yokoyama | ||
| Clustar, Inc. | ||
| Samulion Factory, Inc. |
The Company had the following related party transactions as of and for the fiscal years ended March 31, 2025 and 2024:
| March 31, | ||||||||||
| 2025 | 2024 | |||||||||
| Related party receivable | ||||||||||
| Hidetoshi Yokoyama | For payment made on behalf by the Company | ¥ | ¥ | |||||||
| Fiscal year ended March 31, | ||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||
| Selling, General and Administrative Expenses with related parties | ||||||||||||||
| Clustar, Inc. | Advertising expenses | ¥ | ¥ | ¥ | ||||||||||
| Samulion Factory, Inc. | Provision of consulting services | |||||||||||||
18. Subsequent Events
The Company has evaluated subsequent events after the balance sheet date through August 14, 2025, the date the financial statements were available for issuance. Management has determined that, except as disclosed below, no significant events or transactions have occurred subsequent to the balance sheet date that require both recognition and disclosure in the financial statements.
On
April 4, 2025, the Company renewed its operating lease agreement for the office space in Tokyo, Japan. The lease term is
On
May 26, 2025, the Company executed a loan agreement with Mr. Hidetoshi Yokoyama for the principal amount of JPY
On
July 18, 2025, the Company completed its IPO of ordinary shares, each represented by one American depositary share, at an IPO
price of $ per share. The net proceeds to the Company from the IPO, after deducting underwriting discounts and other offering expenses
payable by the Company, were $
In connection with the IPO, certain previously granted stock options that had a performance condition tied to the IPO became fully vested. As a result, the Company recognized stock-based compensation expense in the period subsequent to the balance sheet date but prior to issuance of theses financial statements.
| F-23 |