tm227558-37_f1a - none

Filed pursuant to Rule 424(b)(4)

Registration No. 333-266762

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Lead Real Estate Co., Ltd

1,143,000 American Depositary Shares

Representing 1,143,000 Ordinary Shares

This is an initial public offering of the American depositary shares (the “ADSs”) representing our ordinary shares (“Ordinary Shares”). We are offering 1,143,000 ADSs and each ADS represents one Ordinary Share. Prior to this offering, there has been no public market for the ADSs or our Ordinary Shares. The initial public offering price of the ADSs is $7.00 per ADS.

The ADSs have been approved for listing on the Nasdaq Global Market under the symbol “LRE.”

Investing in the ADSs involves a high degree of risk, including the risk of losing your entire investment. See “Risk Factors” beginning on page 10 to read about factors you should consider before buying the ADSs.

We are an “emerging growth company” as defined under the federal securities laws and will be subject to reduced public company reporting requirements. Please read the disclosures beginning on page 6 of this prospectus for more information.

Following the completion of this offering, Mr. Eiji Nagahara, our president, chief executive officer, and representative director, will beneficially own approximately 89.6% of the aggregate voting power of our issued and outstanding Ordinary Shares assuming no exercise of the underwriters’ over-allotment option, or approximately 88.5% assuming full exercise of the underwriters’ over-allotment option. As such, we will be deemed a “controlled company” under Nasdaq Listing Rule 5615(c). However, even if we are deemed a “controlled company,” we do not intend to avail ourselves of the corporate governance exemptions afforded to a “controlled company” under the Nasdaq Listing Rules but will follow the corporate governance standards of our home country, Japan, as permitted by Nasdaq Rules. See “Risk Factors” and “Management — Controlled Company.”

	Per ADS			Total Without Over-Allotment Option			Total With Over-Allotment Option
Initial public offering price		$	7.00		$	8,001,000		$	9,201,150
Underwriters’ discounts(1)		$	0.56		$	640,080		$	736,092
Proceeds to our company before expenses		$	6.44		$	7,360,920		$	8,465,058

(1)

Represents underwriting discounts equal to 8% per ADS.

We have granted the underwriters an option to purchase up to 171,450 additional ADSs from us at the public offering price, less underwriting discounts and commissions, for 45 days after the date of this prospectus to cover over-allotments, if any.

The underwriters expect to deliver the ADSs to purchasers on or about September 29, 2023.

Neither the U.S. Securities and Exchange Commission nor any state securities commission nor any other regulatory body has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

EF HUTTON

division of Benchmark Investments, LLC

Prospectus dated September 26, 2023

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About this Prospectus

We and the underwriters have not authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any free writing prospectuses prepared by us or on our behalf or to which we have referred you. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the ADSs offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. We are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted or where the person making the offer or sale is not qualified to do so or to any person to whom it is not permitted to make such offer or sale. The information contained in this prospectus is current only as of the date on the front cover of this prospectus. Our business, financial condition, results of operations, and prospects may have changed since that date.

Our functional currency and reporting currency are the Japanese yen (“JPY” or “¥”), the legal currency of Japan. The terms “dollar” or “$” refer to U.S. dollars, the legal currency of the United States. Convenience translations included in this prospectus of Japanese yen into U.S. dollars have been made at the exchange rates of ¥131.81=$1.00, which was the foreign exchange rate on December 31, 2022, as reported by the Board of Governors of the Federal Reserve System (the “U.S. Federal Reserve”) in its weekly release on January 3, 2023. Historical and current exchange rate information may be found at https://www.federalreserve.gov/releases/h10/.

Conventions that Apply to this Prospectus

Unless otherwise indicated or the context requires otherwise, references in this prospectus to:

•

“ADRs” are to the American Depositary Receipts that may evidence the ADSs;

•

“ADSs” are to the American Depositary Shares, each of which represents one Ordinary Share;

•

“Lead Real Estate” are to Lead Real Estate Co., Ltd, a joint-stock corporation with limited liability organized under Japanese law;

•

“LRE Dallas” are to Lead Real Estate Global Co., Ltd., a Texas corporation, which is wholly owned by Lead Real Estate;

•

“LRE HK” are to Lead Real Estate HK Co. Limited, a private company limited by shares organized under Hong Kong law, which is wholly owned by Lead Real Estate;

•

“Ordinary Shares” are to the ordinary shares of Lead Real Estate;

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“Real Vision” are to Real Vision Co., Ltd., a joint-stock corporation with limited liability organized under Japanese law, which is wholly owned by Lead Real Estate;

•

“Sojiya Japan” are to Sojiya Japan Co., Ltd., a joint-stock corporation with limited liability organized under Japanese law. Lead Real Estate and Mr. Eiji Nagahara, our president, chief executive officer, and representative director, each hold 50% of the equity interests in Sojiya Japan; and

•

“we,” “us,” “our,” “our Company,” or the “Company” are to Lead Real Estate and its subsidiaries, as the case may be.

Unless the context indicates otherwise, all information in this prospectus assumes no exercise by the underwriters of their over-allotment option.

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PROSPECTUS SUMMARY

The following summary is qualified in its entirety by, and should be read in conjunction with, the more detailed information and financial statements included elsewhere in this prospectus. In addition to this summary, we urge you to read the entire prospectus carefully, especially the risks of investing in the ADSs, discussed under “Risk Factors,” before deciding whether to buy the ADSs.

Unless otherwise indicated, all share amounts and per share amounts in this prospectus have been presented giving effect to a forward split of our outstanding Ordinary Shares at a ratio of 100-for-1 approved by our board of directors on August 31, 2021 and became effective on the same day.

Our Mission and Vision

•

Our Mission: Our mission is to serve our customers by offering stylish, safe, and luxurious living and to adopt the Kaizen (continuous improvement) approach to improve our operations.

•

Our Vision: We seek to leverage our nationally-recognized, award-winning luxury homes and our strong market position in the luxury residential property market in Tokyo and Kanagawa prefecture to create a global transaction platform allowing access to prime Japanese condominiums as well as overseas condominiums, including in the U.S. and Hong Kong.

Overview

We are a growing developer of luxury residential properties, including single-family homes and condominiums, across Tokyo and Kanagawa prefecture. In addition, we operate hotels in Tokyo and lease apartment building units to individual customers in Japan and Dallas, Texas.

We primarily generate revenue from developing and selling single-family homes and condominiums. Since our inception in 2001, we have delivered more than 1,000 single-family homes and 25 condominiums. The target customers of our single-family homes are wealthy family buyers who are looking for luxury single-family homes as their primary residence, while the target customers of our condominiums are institutional customers who look to purchase entire condominiums for investment purposes. We rely on real estate agencies to help identify land and development sites for acquisition and customers for our luxury residential properties and generally acquire land parcels from private landowners. We outsource the design work and construction for our luxury residential property projects to third-party design firms and construction companies, while coordinating and closely supervising the projects through our internal teams to maximize quality of the projects. In addition, we launched our interactive media platform, Glocaly, in October 2021, as a listing and marketing platform seeking to facilitate matching of sellers and buyers of condominiums. We utilize a homebuilding model designed to minimize risks, in which we typically identify customers for our single-family homes before acquiring the land and commencing construction and build our condominiums in highly-marketable locations, resulting in an aggregate of only four cancelations during the six months ended December 31, 2022 and the fiscal years ended June 30, 2022 and 2021. When developing a single-family home or condominium, we typically deliver the land to the customer before starting the construction of the building and deliver the completed building to the customer 6 to 12 months after the land delivery, in order to quickly recover our payment for the land. The tables below summarize the units of land and building we delivered during the six months ended December 31, 2022 and the fiscal years ended June 30, 2022 and 2021.

	Six Months Ended December 31, 2022
	Land Deliveries (Units)		Building Deliveries (Units)
Single-family homes		36		43
Condominiums		5		3

	Fiscal Year Ended June 30, 2022				Fiscal Year Ended June 30, 2021
Type	Land Deliveries (Units)		Building Deliveries (Units)		Land Deliveries (Units)		Building Deliveries (Units)
Single-family homes		94		81		102		50
Condominiums		12		9		4		4

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To diversify our revenue streams and supplement our real estate sales, we have expanded into other businesses related to real estate since 2018. During the six months ended December 31, 2022 and the fiscal years ended June 30, 2022 and 2021, we operated five, four, and four hotels in Tokyo, respectively. In February 2023, we started to operate a sixth hotel in Tokyo. During the six months ended December 31, 2022 and the fiscal years ended June 30, 2022 and 2021, we leased apartment units in eight, eight, and 17 apartment buildings to 29, 13, and 118 individual customers, respectively. For the six months ended December 31, 2022 and the fiscal years ended June 30, 2022 and 2021, we had total revenue of JPY7,359,750 thousand (approximately $55,836 thousand), JPY14,321,186 thousand (approximately $108,650 thousand), and JPY11,255,277 thousand (approximately $85,390 thousand), respectively, and profit of JPY164,117 thousand (approximately $1,245 thousand), JPY547,809 thousand (approximately $4,156 thousand), and JPY278,428 thousand (approximately $2,112 thousand), respectively. Revenue generated from real estate development and sales accounted for approximately 98.7%, 98.5%, and 98.5% of our total revenue for those periods, respectively. Revenue derived from other businesses accounted for approximately 1.3%, 1.5%, and 1.5% of our total revenue for those periods, respectively.

Competitive Strengths

We believe that the following competitive strengths have contributed to our success and differentiated us from our competitors:

•

growing developer of luxury residential properties in prime locations across Tokyo and Kanagawa prefecture;

•

easy access to land parcels as a result of our long operating history and strong brand awareness;

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strong project oversight and execution capabilities; and

•

experienced management team with industrial expertise.

Growth Strategies

We intend to develop our business and strengthen brand loyalty by implementing the following strategies:

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target prime real estate opportunities across the Kanto Region to continue to grow;

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further strengthen and leverage our relationships with local real estate agencies;

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continue to develop and improve our Glocaly platform; and

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further expand our operations overseas.

Summary of Risk Factors

Investing in the ADSs involves significant risks. You should carefully consider all of the information in this prospectus before making an investment in the ADSs. Below please find a summary of the principal risks we face, organized under relevant headings. These risks are discussed more fully in the section titled “Risk Factors.”

Risks Related to Our Business and Industry

Risks and uncertainties related to our business include the following:

•

the luxury residential property market in Tokyo and Kanagawa prefecture is highly competitive and if we cannot continue to successfully identify and secure an adequate inventory of development sites in these areas at commercially reasonable costs, our operations could be adversely impacted (see the risk factor beginning on page 10 of this prospectus);

•

revenue generated from our condominium development and sales is uncertain and volatile (see the risk factor beginning on page 10 of this prospectus);

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we rely substantially on short-term borrowings to fund our operations, and the failure to renew these short-term borrowings or the failure to continue to obtain financing on favorable terms, if at all, may adversely affect our ability to operate our business (see the risk factor beginning on page 10 of this prospectus);

•

our substantial indebtedness could materially and adversely affect our business, financial condition, results of operations, and cash flows (see the risk factor beginning on page 11 of this prospectus);

•

we rely on key relationships with service providers and agencies across the real estate development industry, and to the extent they experience pressures in raw materials, labor, or timely construction and delivery of projects, it could in turn have an adverse impact on our business, prospect, liquidity, financial condition, and results of operations (see the risk factor beginning on page 11 of this prospectus);

•

our Glocaly platform is in its nascent stage and may experience volatility in performance, and there can be no assurance that we can take advantage of the amendments to the Japanese law that allow electronic delivery of certain documents required for real estate transactions (see the risk factor beginning on page 12 of this prospectus);

•

our construction of single-family homes and condominiums is dependent on the availability, skill, and performance of contractors (see the risk factor beginning on page 12 of this prospectus);

•

a shortage of building materials or labor, or increases in their costs, could delay home construction or increase its cost, which could materially and adversely affect us (see the risk factor beginning on page 13 of this prospectus);

•

our business could be materially and adversely disrupted by an epidemic or pandemic (such as the current COVID-19 pandemic), or similar public threat, or fear of such an event, and the measures that the governmental authorities implement to address it (see the risk factor beginning on page 13 of this prospectus);

•

if we are unable to attract, train, assimilate, and retain employees that embody our culture, including project managers and senior managers, we may not be able to grow or successfully operate our business (see the risk factor beginning on page 16 of this prospectus);

•

our business is geographically concentrated, which subjects us to greater risks from changes in local or regional conditions (see the risk factor beginning on page 18 of this prospectus);

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we may be unsuccessful in expanding and operating our business internationally, which could adversely affect our results of operations (see the risk factor beginning on page 18 of this prospectus); and

•

fluctuation of the value of the Japanese yen against certain foreign currencies may have a material adverse effect on the results of our operations (see the risk factor beginning on page 21 of this prospectus).

Risks Relating to this Offering and the Trading Market

In addition to the risks described above, we are subject to general risks and uncertainties related to this offering and the trading market of the ADSs, including the following:

•

an active trading market for our Ordinary Shares or the ADSs may not develop (see the risk factor beginning on page 22 of this prospectus);

•

you will experience immediate and substantial dilution in the net tangible book value of ADSs purchased (see the risk factor beginning on page 22 of this prospectus);

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after the completion of this offering, share ownership will remain concentrated in the hands of our management, who will continue to be able to exercise a direct or indirect controlling influence on us (see the risk factor beginning on page 22 of this prospectus);

•

the sale or availability for sale of substantial amounts of the ADSs could adversely affect their market price (see the risk factor beginning on page 22 of this prospectus);

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•

the market price of the ADSs may be volatile or may decline regardless of our operating performance, and you may not be able to resell your ADSs at or above the initial public offering price (see the risk factor beginning on page 23 of this prospectus);

•

the price of the ADSs could be subject to rapid and substantial volatility. Such volatility, including any stock run-ups, may be unrelated to our actual or expected operating performance and financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of the ADSs (see the risk factor beginning on page 23 of this prospectus);

•

rights of shareholders under Japanese law may be different from rights of shareholders in other jurisdictions (see the risk factor beginning on page 26 of this prospectus); and

•

as holders of ADSs, you may have fewer rights than holders of our Ordinary Shares and must act through the depositary to exercise those rights (see the risk factor beginning on page 26 of this prospectus).

Corporate Information

Our headquarters are located at 6F, MFPR Shibuya Nanpeidai Building 16-11, Nampeidai-cho,
Shibuya-ku, Tokyo, 150-0036, Japan, and our phone number is +81 03-5784-5127. Our website address is http://www.lead-real.co.jp/en/. The information contained in, or accessible from, our website or any other website does not constitute a part of this prospectus or the registration statement of which it forms a part. Our agent for service of process in the United States is Lead Real Estate Global Co., Ltd., located at 6860 North Dallas Pkwy, Suite 200, Plano, TX 75024.

Corporate Structure

Lead Real Estate was incorporated in Tokyo, Japan in March 2001 as a limited liability company, which was subsequently reorganized in November 2003 into a joint-stock corporation (kabushiki kaisha) with limited liability.

The following chart illustrates our corporate structure upon completion of this initial public offering (this “IPO”) based on 12,498,900 Ordinary Shares outstanding as of the date of this prospectus and 1,143,000 ADSs to be sold in this IPO, assuming no exercise by the underwriters of their over-allotment option. For more details on our corporate history, please refer to “Corporate History and Structure.”

Indicates less than 1%

Notes: all percentages reflect the equity interests held by each of our shareholders.

(1)

Represents an aggregate of 182,607 Ordinary Shares held by 24 shareholders of Lead Real Estate, each one of which holds less than 5% of our equity interests, as of the date of this prospectus.

(2)

Mr. Nagahara holds 100% of the equity interests in JP Shuhan Co., Ltd. (“JP Shuhan”), a joint-stock corporation with limited liability in Japan.

(3)

Mr. Nagahara holds 100% of the equity interests in Lead Real Estate Cayman Limited (“LRE Cayman”), a company limited by shares under the laws of Cayman Islands.

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(4)

Mr. Nagahara holds 50% of the equity interests in Sojiya Japan.

Impact of the COVID-19 Pandemic on Our Operations and Financial Performance

The COVID-19 pandemic has not materially impacted our business operations and operating results. Core demand for single-family homes and condominiums remains high, which is reflected in our higher revenue growth and operating profits. On the supply and construction side, however, our business has faced inflation in the prices of raw materials and labor costs associated with supply chain shortages resulting from the pandemic, which may adversely impact our margins. As of the date of this prospectus, we have passed the rising costs through to our customers in the form of higher average sale prices and also mitigated increases in our construction costs through fixed cost subcontractor arrangements, where the subcontractor bears the cost inflation, thereby preserving our margins. Although we currently expect this trend to continue for future supply side driven inflationary pressures, we cannot guarantee that we will be able to pass all cost increases to our customers and subcontractors or avoid adverse impacts on our margins. See “Risk Factors — Risks Related to Our Business and Industry — A shortage of building materials or labor, or increases in their costs, could delay home construction or increase its cost, which could materially and adversely affect us.”

See “Risk Factors — Risks Related to Our Business and Industry — Our business could be materially and adversely disrupted by an epidemic or pandemic (such as the current COVID-19 pandemic), or similar public threat, or fear of such an event, and the measures that the governmental authorities implement to address it” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations — The COVID-19 Pandemic Affecting Our Results of Operations.”

Implications of Our Being an “Emerging Growth Company”

As a company with less than $1.235 billion in revenue during our last fiscal year, we qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). An “emerging growth company” may take advantage of reduced reporting requirements that are otherwise applicable to larger public companies. In particular, as an emerging growth company, we:

•

may present only two years of audited financial statements and only two years of related Management’s Discussion and Analysis of Financial Condition and Results of Operations;

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are not required to provide a detailed narrative disclosure discussing our compensation principles, objectives and elements and analyzing how those elements fit with our principles and objectives, which is commonly referred to as the “compensation discussion and analysis”;

•

are not required to obtain an attestation and report from our auditors on our management’s assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002;

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are not required to obtain a non-binding advisory vote from our shareholders on executive compensation or golden parachute arrangements (commonly referred to as the “say-on-pay,” “say-on frequency,” and “say-on-golden-parachute” votes);

•

are exempt from certain executive compensation disclosure provisions requiring a pay-for-performance graph and chief executive officer pay ratio disclosure;

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are eligible to claim longer phase-in periods for the adoption of new or revised financial accounting standards under §107 of the JOBS Act; and

•

will not be required to conduct an evaluation of our internal control over financial reporting until our second annual report on Form 20-F following the completion of this IPO.

We intend to take advantage of all of these reduced reporting requirements and exemptions, including the longer phase-in periods for the adoption of new or revised financial accounting standards under §107 of the JOBS Act. Our election to use the phase-in periods may make it difficult to compare our financial statements to those of non-emerging growth companies and other emerging growth companies that have opted out of the phase-in periods under §107 of the JOBS Act.

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Under the JOBS Act, we may take advantage of the above-described reduced reporting requirements and exemptions until we no longer meet the definition of an emerging growth company. The JOBS Act provides that we would cease to be an “emerging growth company” at the end of the fiscal year in which the fifth anniversary of our initial sale of common equity pursuant to a registration statement declared effective under the Securities Act of 1933, as amended (the “Securities Act”) occurred, if we have more than $1.235 billion in annual revenue, have $700 million or more in market value of the ADSs held by non-affiliates, or issue more than $1 billion in principal amount of non-convertible debt over a three-year period.

Foreign Private Issuer Status

We are a foreign private issuer within the meaning of the rules under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). As such, we are exempt from certain provisions applicable to United States domestic public companies. For example:

•

we are not required to provide as many Exchange Act reports, or as frequently, as a domestic public company;

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for interim reporting, we are permitted to comply solely with our home country requirements, which are less rigorous than the rules that apply to domestic public companies;

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we are not required to provide the same level of disclosure on certain issues, such as executive compensation;

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we are exempt from provisions of Regulation FD aimed at preventing issuers from making selective disclosures of material non-public information;

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we are not required to comply with the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act; and

•

we are not required to comply with Section 16 of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and establishing insider liability for profits realized from any “short-swing” trading transaction.

Controlled Company

Upon completion of this offering, Mr. Eiji Nagahara, our president, chief executive officer, and representative director, will beneficially own approximately 89.6% of the aggregate voting power of our outstanding Ordinary Shares assuming no exercise by the underwriters of their over-allotment option, or 88.5% assuming full exercise of the over-allotment option. As a result, we will be deemed a “controlled company” for the purpose of the Nasdaq listing rules. As a controlled company, we are permitted to elect to rely on certain exemptions from the obligations to comply with certain corporate governance requirements, including the requirements that:

•

a majority of our board of directors consist of independent directors;

•

our director nominees be selected or recommended solely by independent directors; and

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we have a nominating and corporate governance committee and a compensation committee that are composed entirely of independent directors with a written charter addressing the purposes and responsibilities of the committees.

As a foreign private issuer, however, Nasdaq corporate governance rules allow us to follow corporate governance practice in our home country, Japan, with respect to appointments to our board of directors and committees. We intend to follow home country practice as permitted by Nasdaq rather than rely on the “controlled company” exception to the corporate governance rules. See “Risk Factors — Risks Relating to this Offering and the Trading Market — Because we are a foreign private issuer and intend to take advantage of exemptions from certain Nasdaq corporate governance standards applicable to U.S. issuers, you will have less protection than you would have if we were a domestic issuer.” Accordingly, you would not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of Nasdaq.

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THE OFFERING

Securities offered by us

1,143,000 ADSs

Over-allotment option

We have granted to the underwriters an option, exercisable within 45 days after the closing of this offering, to purchase up to an aggregate of 171,450 additional ADSs.

Price per ADS

$7.00 per ADS.

Ordinary Shares outstanding
prior to completion of this offering

12,498,900 Ordinary Shares

ADSs outstanding immediately after this offering

1,143,000 ADSs assuming no exercise of the underwriters’ over-allotment option

1,314,450 ADSs assuming full exercise of the underwriters’ over-allotment option

Ordinary Shares outstanding immediately after this
offering

13,641,900 Ordinary Shares assuming no exercise of the underwriters’ over-allotment option

13,813,350 Ordinary Shares assuming full exercise of the underwriters’ over-allotment option

Listing

The ADSs have been approved for listing. on the Nasdaq Global Market.

Ticker symbol

“LRE”

The ADSs

Each ADS represents one Ordinary Share.

The depositary or its nominee will be the holder of the Ordinary Shares underlying the ADSs and you will have the rights of an ADS holder as provided in the deposit agreement among us, the depositary, and all owners and holders of ADSs issued thereunder.

Our board of directors may suggest to the shareholders meeting in the future that it resolves to pay dividends. Any decision to make such a suggestion in the future will be subject to a number of factors, including our financial condition, results of operations, the level of our retained earnings, capital demands, general business conditions, and other factors our board of directors may deem relevant. If we declare dividends on our Ordinary Shares, the depositary will distribute the cash dividends and other distributions it receives on our Ordinary Shares after deducting its fees and expenses in accordance with the terms set forth in the deposit agreement.

You may surrender your ADSs to the depositary for cancellation to withdraw the Ordinary Shares underlying your ADSs. The depositary will charge you a fee for such cancellation.

We may amend or terminate the deposit agreement for any reason without your consent. Any amendment that imposes or increases fees or charges or which materially prejudices any substantial existing right you have as an ADS holder will not become effective as to outstanding ADSs until 30 days after notice of the amendment is given to ADS owners. If an amendment becomes effective, you

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will be bound by the deposit agreement as amended if you continue to hold your ADSs.

To better understand the terms of the ADSs, you should carefully read the section in this prospectus entitled “Description of American Depositary Shares.” We also encourage you to read the deposit agreement, which has been filed as an exhibit to the registration statement of which this prospectus forms a part.

Depositary

The Bank of New York Mellon

Use of proceeds

We intend to use the net proceeds from this offering to expand our business domestically and develop our Glocaly platform, and for general corporate purposes. See “Use of Proceeds” on page 33 for more information.

Lock-up

All of our directors, executive officers, and holders of 5% or more of the outstanding Ordinary Shares have agreed with the underwriters, subject to certain exceptions, not to sell, transfer, or dispose of, directly or indirectly, any of the ADSs, our Ordinary Shares, or securities convertible into or exercisable or exchangeable for the ADSs or our Ordinary Shares for a period of 180 days from the date of this prospectus. See “Shares Eligible for Future Sale” and “Underwriting” for more information.

Risk factors

The ADSs offered hereby involve a high degree of risk. You should read “Risk Factors,” beginning on page 10 for a discussion of factors to consider before deciding to invest in the ADSs.

Payment and Settlement

The underwriters expect to deliver the ADSs against payment therefor through the facilities of the Depository Trust Company (“DTC”) on September 29, 2023.

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RISK FACTORS

An investment in the ADSs involves a high degree of risk. Before deciding whether to invest in the ADSs, you should consider carefully the risks described below, together with all of the other information set forth in this prospectus, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes. If any of these risks actually occurs, our business, financial condition, results of operations or cash flow could be materially and adversely affected, which could cause the trading price of the ADSs to decline, resulting in a loss of all or part of your investment. The risks described below and discussed in other parts of this prospectus are not the only ones that we face. Additional risks not presently known to us or that we currently deem immaterial may also affect our business. You should only consider investing in the ADSs if you can bear the risk of loss of your entire investment.

Risks Related to Our Business and Industry

The luxury residential property market in Tokyo and Kanagawa prefecture is highly competitive and if we cannot continue to successfully identify and secure an adequate inventory of development sites in these areas at commercially reasonable costs, our operations could be adversely impacted.

The luxury residential property market in Tokyo and Kanagawa prefecture is highly competitive with limited greenfield land and development sites available for acquisitions. The results of our property development operations depend in part upon our continuing ability to successfully identify and acquire an adequate number of land and development sites in desirable locations in our market. To date, we primarily identify land and development sites through local real estate agencies. There can be no assurance that our long-standing relationships with these agencies will continue, that an adequate supply of land and development sites that meet our specifications will continue to be available to us through these agencies on terms similar to those available in the past, or that we will not be required to devote a greater amount of capital to the acquisitions of land and development sites than we have historically. We may not successfully obtain desired land and development sites due to the increasingly intense competition. An insufficient supply of land and development sites in one or more of our markets, or our inability to purchase or finance land and development sites on reasonable terms could have a material adverse effect on our sales, profitability, reputation, ability to service our debt obligations, and future cash flows, which could impact our ability to compete for land. Any land shortages or any decrease in the supply of suitable land at commercially reasonable costs could limit our ability to develop new projects or result in increased site deposit requirements or land costs. Moreover, the supply of potential development sites in Tokyo and Kanagawa prefecture will diminish over time and we may find it increasingly difficult to identify and acquire attractive land and development sites through real estate agencies at commercially reasonable costs in the future. Our land acquisition costs are a major component of our cost of real estate development and sales and increases in such costs could diminish our gross margin. We may not be able to pass through to our customers any increased land costs, which could adversely impact our revenue, earnings, and margins.

Revenue generated from our condominium development and sales is uncertain and volatile.

Historically, the revenue generated from our condominium development and sales has been uncertain and volatile. For the six months ended December 31, 2022 and the fiscal years ended June 30, 2022 and 2021, revenue generated from sales of our condominiums was JPY3,738,900 thousand (approximately $28,366 thousand), JPY5,207,600 thousand (approximately $39,508 thousand), and JPY1,583,643 thousand (approximately $1,204 thousand), accounting for approximately 50%, 36%, and 14% of our total revenue, respectively. Because we sell the entire condominiums, we have a relatively small number of condominium projects per year but much higher average sale price per project, which may result in lumpy and uneven revenue during a period of time. If we fail to predict the revenue generated from sales of our condominiums in the future or if such revenue continues to be uncertain and volatile, it could adversely impact our business, prospects, liquidity, financial condition, and results of operations.

We rely substantially on short-term borrowings to fund our operations, and the failure to renew these short-term borrowings or the failure to continue to obtain financing on favorable terms, if at all, may adversely affect our ability to operate our business.

Real estate development is capital intensive. To date, we have funded our land acquisitions for single-family home development primarily through short-term bank loans, typically with terms ranging from three

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to six months, and we have funded our land acquisitions for condominium development using cash generated from our operations. As of December 31, 2022, we had approximately JPY7,848,580 thousand (approximately $59,544 thousand) in short-term borrowings outstanding. During the six months ended December 31, 2022, we repaid JPY4,182,217 thousand (approximately $31,729 thousand) and renewed JPY5,669,382 thousand (approximately $43,012 thousand) of our short-term borrowings. As of June 30, 2022, we had approximately JPY6,361,415 thousand (approximately $46,881 thousand) in short-term borrowings outstanding. During the fiscal year ended June 30, 2022, we repaid JPY7,535,860 thousand (approximately $55,537 thousand) and renewed JPY9,446,200 thousand (approximately $69,616 thousand) of our short-term borrowings. As of June 30, 2021, we had approximately JPY4,451,075 thousand (approximately $32,803 thousand) in short-term borrowings outstanding. During the fiscal year ended June 30, 2021, we repaid JPY7,626,187 thousand (approximately $56,203 thousand) and renewed JPY8,046,791 thousand (approximately $59,302 thousand) of our short-term borrowings. We expect that we will be able to renew all of the existing bank loans upon their maturity based on our past experience and outstanding credit history. However, we cannot assure you that we will be able to renew these loans in the future as they mature. If we are unable to renew these bank loans in the future, our liquidity position would be adversely affected, and we may be required to seek more expensive sources of short-term or long-term funding to finance our operations.

Our ability to secure sufficient financing for land acquisitions depends on a number of factors that are beyond our control, including market conditions in the capital markets, lenders’ perceptions of our creditworthiness, the Japanese economy, and the Japanese government regulations that affect the availability and cost of financing for real estate companies. Further financing may not be available to us on favorable terms, if at all. If we are unable to obtain short-term financing in an amount sufficient to support our operations, it may be necessary, to suspend or curtail our operations, which would have a material adverse effect on our business and financial condition. In that event, current shareholders would likely experience a loss of most of or all of their investment.

Our substantial indebtedness could materially and adversely affect our business, financial condition, results of operations, and cash flows.

As of December 31, 2022, we had approximately JPY7,848,580 thousand (approximately $59,545 thousand) in short-term borrowings and JPY2,548,442 thousand (approximately $19,334 thousand) in long-term borrowings outstanding.

The amount of our debt could have significant consequences on our operations, including:

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reducing the availability of our cash flow to fund working capital, capital expenditures, acquisitions, and other general corporate purposes as a result of our debt service obligations;

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limiting our ability to obtain additional financing;

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limiting our flexibility in planning for, or reacting to, changes in our business, the industry in which we operate, and the general economy;

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increasing the cost of any additional financing; and

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limiting the ability of our subsidiaries to pay dividends to us for working capital or return on our investment.

Any of these factors and other consequences that may result from our substantial indebtedness could have a material adverse effect on our business, financial condition, results of operations, and cash flows impacting our ability to meet our payment obligations under our debts. Our ability to meet our payment obligations under our outstanding indebtedness depends on our ability to generate significant cash flow in the future. This, to some extent, is subject to general economic, financial, competitive, legislative, and regulatory factors as well as other factors that are beyond our control.

We rely on key relationships with service providers and agencies across the real estate development industry, and to the extent they experience pressures in raw materials, labor, or timely construction and delivery of projects, it could in turn have an adverse impact on our business, prospect, liquidity, financial condition, and results of operations.

We primarily rely on service providers, including contractors, to perform the construction of substantially all of our single-family homes and condominiums, including the selection and procurement of

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raw materials used in the construction as well as the construction and delivery of the projects. If our contractors fail to timely construct and deliver projects, we will be subject to penalties for such delay under our contracts with customers. We also primarily rely on real estate agencies to identify land and development sites for acquisition as well as customers. Therefore, to the extent such service providers and agencies experience pressures in raw materials (especially an increase in the price of lumber), labor (including an increase in labor cost), or timely construction and delivery of projects, such pressures may pass through to us, which could increase our cost and adversely impact our business, prospects, liquidity, financial condition, and results of operations.

Our Glocaly platform is in its nascent stage and may experience volatility in performance, and there can be no assurance that we can take advantage of the amendments to the Japanese law that allow electronic delivery of certain documents required for real estate transactions.

We launched our interactive media platform, Glocaly, in October 2021, as a listing and marketing platform seeking to facilitate matching of sellers and buyers of condominiums. See “Business — Glocaly Platform” for more information. However, our Glocaly platform is still in its nascent stage and has not generated revenue as of the date of this prospectus. Therefore, it may experience volatility in performance as we continue to improve and upgrade the platform. We may be unable to successfully develop and maintain our Glocaly platform, which could adversely impact our business, prospects, and results of operations.

In addition to functioning as an interactive media platform, our Glocaly platform has the potential to expand into a multilingual and seamless transaction platform targeting both domestic and foreign buyers for transacting condominiums in Japan. Although all procedures in real estate transactions were previously not allowed to be conducted electronically in Japan, amendments to Japanese law allow electronic delivery of certain documents required for real estate transactions starting from May 2022. Although we expect to have the first-mover advantage in the area of electronic real estate transactions, there can be no assurance that we can take advantage of the amendments in relation to our business using Glocaly platform.

Our construction of single-family homes and condominiums is dependent on the availability, skill, and performance of contractors.

We engage contractors to perform the construction of substantially all of our single-family homes and condominiums and to select and obtain raw materials used in the construction. Accordingly, the timing and quality of our construction depend on the availability and skill of our contractors. While we anticipate being able to cooperate with reliable contractors and believe that our relationships with contractors are good, we can provide no assurance that skilled contractors will continue to be available at reasonable rates and in our markets. In addition, as we expand into new markets, we typically must develop new relationships with contractors in such markets, and there can be no assurance that we will be able to do so in a cost-effective and timely manner, or at all. The inability to contract with skilled contractors at reasonable rates on a timely basis could have a material adverse effect on our business, prospects, liquidity, financial condition, and results of operations.

We are exposed to risks that the performance of our contractors may not meet our standards or specifications. Under our contracts with customers in relation to our single-family homes and condominiums and in accordance with Japanese law, the properties we develop are subject to a 10-year quality warranty. Despite our quality control efforts, we may discover from time to time that our contractors have engaged in improper construction practices or have installed defective materials in our residential condominiums or buildings. Negligence or poor work quality by any contractors may result in structural defects or substandard construction quality in our single-family homes or condominiums, which could in turn cause us to suffer project delays, cost overruns, and financial losses, harm our reputation, or expose us to third-party claims. Even if the contractor performing the construction work in such instances is ultimately held responsible for the consequences of any such property defects, any such incidents could have lasting adverse effects on us. We work with multiple contractors on different projects and we cannot guarantee that we can effectively monitor their work at all times. In addition, contractors may make use of third-party subcontractors with which we have no direct relationship, further limiting our ability to manage the foregoing risks. Although our construction contracts with contractors contain provisions designed to protect us, we may be unable to successfully enforce these provisions and, even if we are able to successfully enforce these provisions, the

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contractor may not have sufficient financial resources to compensate us. Moreover, the contractors may undertake projects from other property developers, engage in risky undertakings, or encounter financial or other difficulties, such as supply shortages, labor disputes, or work accidents, which may cause delays in the completion of our property projects or increases in our costs.

A shortage of building materials or labor, or increases in their costs, could delay home construction or increase its cost, which could materially and adversely affect us.

Our contractors are responsible for procuring almost all of the raw materials used in our project developments. The real estate development industry experiences labor and raw material shortages from time to time, including shortages in lumber in particular. Shortages in lumber in particular could result in an increase in our construction cost paid to the contractors, which in turn could have a material adverse effect on our business, prospects, financial condition, and results of operations. For example, the price of lumber has been increasing since the beginning of 2021, which has in turn increased the payments to our contractors. These labor and raw material shortages can be more severe during periods of strong demand for housing, during periods following natural disasters that have a significant impact on existing residential and commercial structures, or a result of broader economic disruptions, such as the COVID-19 pandemic. In addition, our success in our existing markets or those we may choose to enter in the future depends substantially on our ability to source labor and local materials through contractors on terms that are favorable to us. Such markets may exhibit a reduced level of skilled labor relative to increased property development demand in these markets. In the event of shortages in labor or raw materials in such markets, local contractors, tradespeople, and suppliers may choose to allocate their resources to developers with an established presence in the market and with whom they have longer-standing relationships with. Labor and raw material shortages and price increases for labor and raw materials could cause delays in and increase our costs of home construction, which in turn could have a material adverse effect on our business, prospects, financial condition, and results of operations.

Our business could be materially and adversely disrupted by an epidemic or pandemic (such as the current COVID-19 pandemic), or similar public threat, or fear of such an event, and the measures that the governmental authorities implement to address it.

An epidemic, pandemic, or similar serious public health issue, and the measures undertaken by governmental authorities to address it, could significantly disrupt or prevent us from operating our business in the ordinary course for an extended period, and thereby, along with any associated economic and social instability or distress, have a material adverse impact on our business, prospects, liquidity, financial condition, and results of operations.

On March 11, 2020, the World Health Organization declared the current outbreak of the COVID-19 virus to be a global pandemic, and in April 2020, the Japanese government issued the Declaration of a State of Emergency, whereby the Japanese government ordered non-essential activities and businesses across Japan to close as a preemptive safeguard against the COVID-19 pandemic. This adversely impacted many business sectors across Japan, including the sectors in which we operate, especially in Tokyo. The COVID-19 pandemic has not materially impacted our business operations and operating results. Core demand for single-family homes and condominiums remains high, which is reflected in our higher revenue growth and operating profits. On the supply and construction side, however, our business has faced inflation in the prices of raw materials and labor costs associated with supply chain shortages resulting from the pandemic, which may adversely impact our margins. As of the date of this prospectus, we have passed the rising costs through to our customers in the form of higher average sale prices and also mitigated increases in our construction costs through fixed cost subcontractor arrangements, where the subcontractor bears the cost inflation, thereby preserving our margins. Although we currently expect this trend to continue for future supply side driven inflationary pressures, we cannot guarantee that we will be able to pass all cost increases to our customers and subcontractors or avoid adverse impacts on our margins. See “— A shortage of building materials or labor, or increases in their costs, could delay home construction or increase its cost, which could materially and adversely affect us.” In addition, the COVID-19 pandemic has resulted in changes to the way we conduct our real estate development and sales, including holding remote meetings with customers and taking certain precaution measures for customers who visit our offices (such as using alcohol disinfectant). While we continue to assess the COVID-19 pandemic, at this time we cannot estimate with

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any degree of certainty the full impact of the COVID-19 pandemic on our financial condition and future results of operations. The ultimate impacts of the COVID-19 pandemic and related mitigation efforts will depend on future developments, including the duration of the COVID-19 pandemic, the acceptance and effectiveness of vaccines, the impact of COVID-19 and related containment and mitigation measures on our customers, contractors, and employees, workforce availability, and the timing and extent to which normal economic and operating conditions resume. To the extent that the COVID-19 pandemic adversely impacts our business, results of operations, liquidity, or financial condition, it may also have the effect of increasing many of the other risks described in this “Risk Factors” section.

We may be unable to complete our property development projects on time, or at all.

The progress and costs for our development projects can be adversely affected by many factors, including:

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delays in obtaining necessary licenses, permits, or approvals from government agencies or authorities;

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shortages of materials, equipment, contractors, and skilled labor;

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disputes with our contractors;

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failures by our contractors to comply with our designs, specifications, or standards;

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difficult geological situations or other geotechnical issues;

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onsite labor disputes or work accidents;

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epidemics or pandemics, such as the COVID-19 pandemic; and

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natural catastrophes or adverse weather conditions.

Any construction delays, or failure to complete a project according to our planned specifications or budget, may delay our property sales, which could harm our revenue, cash flows, and reputation.

Our results of operations may fluctuate from period to period.

Our results of operations tend to fluctuate from period to period. The number of properties that we can develop or complete during any particular period is limited due to the substantial capital required for land acquisitions and construction, as well as the lengthy development periods required before positive cash flows may be generated.

The recognition of our real estate revenue and costs relies upon our estimation of total project sales value and costs.

We recognize our real estate revenue based on the full accrual method and the percentage of completion method depending on the estimated project construction period. Under both methods, revenue and costs are calculated based on an estimation of total project costs and total project revenue, which are revised on a regular basis as the work progresses. Any material deviation between actual and estimated total project sales and costs may result in an increase, a reduction, or an elimination of reported revenue or costs from period to period, which will affect our net income.

Our hotel operations are subject to the business, financial, and operating risks inherent to the hospitality industry, any of which could reduce our revenue and limit opportunities for growth.

Our hotel operations are subject to a number of business, financial, and operating risks inherent to the hospitality industry, including:

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competition from hospitality providers in the localities where we operate our hotels;

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relationships with business partners;

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increases in costs due to inflation or other factors that may not be fully offset by increases in revenue in our business, as well as increases in overall prices and the prices of our offerings due to inflation, which could weaken consumer demand for travel and the other products we offer and adversely affect our revenue;

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the ability of third-party Internet and other travel intermediaries who sell our hotel services to guests to attract and retain customers;

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cyclical fluctuations and seasonal volatility in the hospitality industry;

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changes in desirability of geographic regions of our hotels, changes in geographic concentration of our operations and customers, and shortages of desirable locations for development;

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changes in the supply and demand for hotel services, including rooms, food and beverage, and other products and services;

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changes in governmental policies (including in areas such as trade, travel, immigration, healthcare, and related issues); and

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political instability, pandemics (such as the COVID-19 pandemic), geopolitical conflict, heightened travel security measures, and other factors that may affect travel.

Any of these factors could increase our costs or limit or reduce the prices we are able to charge for hospitality products and services, or otherwise affect our ability to maintain existing properties or develop new properties. As a result, any of these factors can reduce our revenue and limit opportunities for growth.

Contraction in the global economy or low levels of economic growth could adversely affect our revenue and profitability as a hotel operator.

Consumer demand for our hotel services is linked to the performance of the general economy and is sensitive to business and personal discretionary spending levels. Decreased global or regional demand for hospitality products and services can be especially pronounced during periods of economic contraction or low levels of economic growth, and the recovery period in our industry may lag overall economic improvement. Declines in demand for our products and services due to general economic conditions could negatively affect our business by limiting the amount of fee revenue we are able to generate from our hotel properties and decreasing the revenue and profitability of our hotel properties. In addition, many of the expenses associated with our business, including personnel costs, interest, rent, property taxes, insurance, and utilities, are relatively fixed. During a period of overall economic weakness, if we are unable to meaningfully decrease these costs as demand for our hotel services decreases, our business operations and financial performance and results may be adversely affected.

We are subject to risks inherent in the residential leasing business.

As we lease apartment building units to individual customers in Japan and Dallas, Texas, we are subject to varying degrees of risk inherent to the residential leasing business, including:

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changes in the economic climate in the markets in which we lease apartment buildings, including interest rates, the overall level of economic activity, the availability of consumer credit, unemployment rates, and other factors;

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a lessening of demand for the apartment units that we own;

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competition from other available residential units and development of competing apartment units;

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changes in market rental rates;

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changes in real estate taxes and other operating expenses (such as cleaning, utilities, repair and maintenance costs, insurance and administrative costs, security, landscaping, pest control, staffing, and other general costs);

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changes in laws and regulations affecting properties (including tax, environmental, zoning and building codes, and housing laws and regulations);

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our inability to maintain the quality and safety of our apartment units;

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the perception of tenants and prospective tenants as to the attractiveness, convenience, and safety of our apartments or the neighborhoods in which they are located; and

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Adverse geopolitical conditions, health crises, dislocations in the credit markets, and other factors that could affect our ability to collect rents and late fees from tenants.

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Any of these factors could have a material adverse impact on results of our operations or financial condition.

Rent control laws and other regulations that limit our ability to increase rental rates may negatively impact our rental income and profitability of our residential leasing business.

Various levels of governmental agencies may introduce rent control laws or other regulations that limit our ability to increase rental rates, which may affect our rental income. Especially in times of recession and economic slowdown, rent control initiatives can acquire significant political support. If rent controls unexpectedly become applicable to certain of our properties, our revenue from and the value of such properties can be adversely affected.

If our tenants seek early termination of their leases or fail to meet their obligations under their leases, our business, results of operations, and financial condition may be materially and adversely affected.

Our tenants may seek early termination of their leases or fail to meet their obligations in connection with the leases. If a tenant defaults on his/her payment obligations and fails to cure the default within the applicable grace period, we may terminate the lease and repossess the apartment pursuant to the lease and relevant laws. We also need to return prepaid rents to the relevant tenant, as applicable, which might have negative impact on our cash flow. In the event of lease breach or early termination, we may not be able to find a new tenant to fill the vacancy in a timely manner, under the same terms or at all, and the security deposit or penalty of the defaulting tenant may not be sufficient to cover our losses for the period in between the leases. Our business, results of operations, and financial condition would be adversely affected, if a significant number of our tenants seek early termination or fail to meet their obligations in connection with the lease.

In addition, tenants may use our apartments for illegal purposes or engage in illegal activities in our apartments, damage or make unauthorized structural changes to our apartments, refuse to leave the apartments upon default or termination of the lease, disturb nearby tenants with noise, trash, odors, or eyesores, sublet our apartments in violation of our lease, or permit unauthorized persons to live in our apartments. Although the tenants are responsible for damages caused by their wrongful conduct, we may still suffer from negative impact on our business and reputation. Damage to our apartments may delay re-leasing, necessitate expensive repairs, or impair the rental income of the apartments, resulting in a lower-than-expected rate of return.

If we are unable to attract, train, assimilate, and retain employees that embody our culture, including project managers and senior managers, we may not be able to grow or successfully operate our business.

Our success depends in part upon our ability to attract, train, assimilate, and retain a sufficient number of employees, including project managers. If we are unable to hire and retain project managers capable of effectively coordinating external parties that work on our projects, our ability to develop new projects may be impaired, the construction of our existing projects could be materially adversely affected, and our brand image may be negatively impacted. Our growth strategy will require us to attract, train, and assimilate even more personnel. Any failure to meet our staffing needs or any material increases in team member turnover rates could have a material adverse effect on our business or results of operations.

We place substantial reliance on the industry experience and knowledge of our senior management team as well as their relationships with other industry participants. Mr. Eiji Nagahara, our founder, president, chief executive officer, and representative director, is particularly important to our future success due to his substantial experience and reputation in the real estate development industry. We do not carry, and do not intend to procure, key person insurance on any of our senior management team. The loss of the services of one or more members of our senior management team due to their departure, or otherwise, could hinder our ability to effectively manage our business and implement our growth strategies. Finding suitable replacements for our current senior management could be difficult, and competition for such personnel of similar experience is intense. If we fail to retain our senior management, our business and results of operations could be materially and adversely affected.

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Any unauthorized use of our brand or trademark may adversely affect our business.

We currently own 19 trademarks for real estate related services in Japan and have three pending trademark applications in Japan and the U.S. We rely on the Japanese and U.S. intellectual property and anti-unfair competition laws and contractual restrictions to protect our brand name and trademarks. We believe our brand, trademarks, and other intellectual property rights are important to our success. Any unauthorized use of our brand, trademarks, and other intellectual property rights could harm our competitive advantages and business. Monitoring and preventing unauthorized use is difficult. The measures we take to protect our intellectual property rights may not be adequate. If we are unable to adequately protect our brand, trademarks, and other intellectual property rights, our reputation may be harmed and our business may be adversely affected.

We do not have sufficient insurance to cover potential losses and claims.

We currently maintain fire insurance, life insurance, and insurance coverage against liability from tortious acts or other personal injuries on our project sites. However, we do not have insurance coverage against potential losses or damages with respect to our properties before their delivery to customers. Our contractors may not be sufficiently insured themselves or have the financial ability to absorb any losses that arise with respect to our projects or pay our claims. While we believe that our practice is in line with the general practice in the Japanese property development industry and there have not been instances when we had to incur losses, damages, and liabilities because of the lack of insurance coverage, there may be such instances in the future as we develop more properties, which may in turn adversely affect our financial condition and results of operations.

We are subject to various laws and regulations, including those regarding the leasing, purchasing, and selling of real property, and violations of, or changes to, such laws and regulations may adversely affect our business.

The businesses we engage in are subject to various laws and regulations in Japan.

We are subject to the Building Lots and Buildings Transaction Business Act of Japan (Act No. 176 of 1952, as amended), or the Building Lots and Buildings Transaction Business Act, which regulates the lease, sale, and purchase of buildings and building lots or brokerage of sale and purchase or leasing thereof and which requires a license from the Minister of Land, Infrastructure, Transport, and Tourism of Japan or the governor of a prefecture, as the case may be. Violations of the Building Lots and Buildings Transaction Business Act could result in our licenses being revoked or our business being suspended, which could materially impact our ability to continue our operations in these businesses. In addition to the above, our real estate business is subject to several other national and local regulations concerning matters such as zoning, public bidding procedures, environmental restrictions, and health and safety compliance, and we are required to obtain numerous governmental permits and approvals.

Our real estate business is also subject to the Building Standards Act of Japan (Act No. 201 of 1950, as amended), or the Building Standards Act, which subjects our building operations to extensive regulation and supervision regarding the methods of construction, as well as safety matters. Violations of the Building Standards Act and other building construction regulations could result in the suspension of construction, the demolition, or the reconstruction of a building, repairs, or limiting use of a building to only certain conforming parts of the building.

Changes to other laws and regulations with more general applicability to Japanese corporations, such as tax laws and accounting rules, could also have an impact on our financial condition and results of operations. Violations of laws and regulations could result in significant regulatory sanctions against us, including the suspension or revocation of our governmental permits and approvals, which could have a negative impact on our reputation and materially affect our results of operations.

Changes in applicable laws and regulations could also result in reduced flexibility in conducting our business and increased compliance costs or may have other adverse effects on our business, financial condition, and results of operations. For a description of these and certain further laws and regulations that are material to our businesses, see “Regulations.”

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Our business is geographically concentrated, which subjects us to greater risks from changes in local or regional conditions.

We primarily operate in the real estate development market in Tokyo and Kanagawa prefecture and we primarily generate revenue from this market. Due to this geographic concentration, our results of operations and financial conditions are subject to greater risks from changes in general economic and other conditions in these areas, than the operations of more geographically diversified competitors. These risks include:

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changes in economic conditions and unemployment rates;

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changes in laws and regulations;

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a decline in the number of home purchasers;

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changes in competitive environment; and

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natural disasters.

As a result of the geographic concentration of our business, we face a greater risk of a negative impact on our business, financial condition, results of operations, and prospects in the event that any of the areas in which we develop real properties is more severely impacted by any such adverse condition, as compared to other areas or countries.

A downturn in the economy of the markets in which we operate could adversely impact purchases of real properties. Factors that could affect customers’ willingness to make real property purchases include general business conditions, levels of employment, interest rates and tax rates, the availability of mortgage, and customer confidence in future economic conditions. In the event of an economic downturn, home purchase habits could be adversely affected and we could experience lower than expected net sales, which could force us to delay or slow our growth strategy and have a material adverse effect on our business, financial condition, profitability, and cash flows.

In recent years, the economic indicators in Japan have shown mixed signs, and future growth of the Japanese economy is subject to many factors beyond our control. The current administration of Prime Minster Fumio Kishida and the former administration of Prime Minister Yoshihide Suga and Prime Minister Shinzo Abe have introduced policies to combat deflation and promote economic growth. In addition, the Bank of Japan introduced a plan for quantitative and qualitative monetary easing in April 2013 and announced a negative interest rate policy in January 2016. However, the long-term impact of these policy initiatives on Japan’s economy remains uncertain. In addition, the occurrence of pandemics, such as the COVID-19 pandemic, the occurrence of large-scale natural disasters, such as earthquakes and typhoons, as well as an increase in the consumption tax rate, which took place in April 2014 with a further increase in October 2019, may also adversely impact the Japanese economy, potentially impacting spending on real properties. Any future deterioration of the Japanese or global economy may result in a decline in consumption that would have a negative impact on demand for our real properties and their prices.

We may be unsuccessful in expanding and operating our business internationally, which could adversely affect our results of operations.

We have established subsidiaries in the U.S. and Hong Kong and plan to expand our operations in these markets and in Southeast Asia, especially the Philippines. The entry and operation of our business in these markets could cause us to be subject to unexpected, uncontrollable, and rapidly changing events and circumstances outside Japan. As we grow our international operations, we may need to recruit and hire new project management, sales, marketing, and support personnel in the countries in which we have or will establish new subsidiaries or otherwise have a significant presence. Entry into new international markets typically requires the establishment of new marketing and sales channels. Our ability to continue to expand into international markets involves various risks, including the possibility that our expectations regarding the level of returns we will achieve on such expansion will not be achieved in the near future, or ever, and that competing in markets with which we are unfamiliar may be more difficult than anticipated. If we are less successful than we expect in a new market, we may not be able to realize an adequate return on our initial investment and our operating results could suffer.

Our international operations may also fail due to other risks inherent in foreign operations, including:

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varied, unfamiliar, unclear, and changing legal and regulatory restrictions, including different legal and regulatory standards applicable to real estate development and sales;

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compliance with multiple and potentially conflicting regulations in Asia and North America;

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difficulties in staffing and managing foreign operations;

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longer collection cycles;

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differing intellectual property laws that may not provide sufficient protections for our intellectual property;

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proper compliance with local tax laws, which can be complex and may result in unintended adverse tax consequences;

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localized spread of infection resulting from the COVID-19 pandemic, including any economic downturns and other adverse impacts;

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difficulties in enforcing agreements through foreign legal systems;

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impact of different real estate trends in different regions;

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fluctuations in currency exchange rates that may affect real property demand and may adversely affect the profitability in JPY of real properties provided by us in foreign markets where payment for our real properties is made in the local currency;

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changes in general economic, health, and political conditions in countries where our properties are sold;

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potential labor strike, lockouts, work slowdowns, and work stoppages; and

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different consumer preferences and requirements in specific international markets.

Our current and any future international expansion plans will require management attention and resources and may be unsuccessful. We may find it impossible or prohibitively expensive to continue expanding internationally or we may be unsuccessful in our attempt to do so, and our results of operations could be adversely impacted.

We may become involved in legal and other proceedings from time to time and may suffer significant liabilities or other losses as a result.

From time to time, we may become involved in disputes with the development and sale of our properties or other aspects of our business and operations, including labor disputes with employees. These disputes may lead to legal or other proceedings and may result in substantial costs and diversion of resources and management’s attention. Disputes and legal and other proceedings may require substantial time and expense to resolve, which could divert valuable resources, such as management time and working capital, delay our planned projects, and increase our costs. Third parties that are found liable to us may not have the resources to compensate us for our incurred costs and damages. We could also be required to pay significant costs and damages if we do not prevail in any such disputes or proceedings. In addition, we may have disagreements with regulatory bodies in the course of our operations, which may subject us to administrative proceedings and unfavorable decrees that result in pecuniary liabilities and cause delays to our property developments.

Environmental contamination on properties that we own or have sold could adversely affect our results of operations.

In Japan, under the Soil Contamination Countermeasures Act of Japan (Act No. 53 of 2002, as amended), or the Soil Contamination Countermeasures Act, if a local governor finds that the level of soil pollution in a given area of land due to hazardous or toxic substances exceeds the standards prescribed by the Ministry of the Environment of Japan and that area of land is polluted to such an extent that it has caused or may cause harm to human health, the governor must designate the area of land as a polluted area and the governor may order the current owner of such land to remove or remediate hazardous or toxic substances on or under the land in accordance with a plan for removal and remediation, in principle, whether or not the current owner knew of, or was responsible for, the presence of such hazardous or toxic substances.

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The environmental surveys that we generally conduct in connection with our properties, such as to discover hazardous or toxic substances in the soil, groundwater, and buildings, may be inadequate to fully uncover the problems of the types they are intended to identify, which are often hidden or impossible to detect without special expertise and equipment. The presence of hazardous or toxic substances on our properties, or our failure to properly remediate any such contamination, may adversely affect our ability to sell, develop, or lease our properties or borrow using the affected properties as collateral. If hazardous or toxic substances are discovered on any of our properties, the affected properties could fall in value, completion of development may be delayed, and we may be required to incur substantial unforeseen costs to remediate the underlying hazard and discharge the related environmental liabilities. Furthermore, if actual harm to human health results from the presence of hazardous or toxic substances on our properties, we may incur significant damages, regulatory sanctions, or damage to our brand and reputation. The realization of any of such risks related to environmental contamination could have a material adverse effect on our business, financial condition, and results of operations.

Our businesses are subject to risks related to natural or man-made disasters, pandemics, and other catastrophic events.

Our business is subject to the risk of natural disasters, such as earthquakes, typhoons, tsunamis, flooding, and volcanic eruptions, as well as man-made disasters, such as fire, industrial accidents, war, riots, or terrorism. We are also exposed to the risk of pandemics, such as the COVID-19 pandemic, public health issues, and other catastrophic events. Should a disaster or other catastrophic event occur, our personnel could suffer injuries, our operations could be disrupted, and we may experience construction delays, including delays in initiating development or construction of properties, or become unable to complete the construction of properties under development. In addition, we may be unable to sell our properties in inventory and our properties could decrease in value or be directly and severely damaged. We may also be required to incur expenses to restore or replace damaged properties in inventory or other facilities we rely on to operate our business.

Japan is earthquake-prone and has historically experienced numerous large earthquakes that have resulted in extensive property damage, such as the earthquake on March 11, 2011, or the Great East Japan Earthquake, and the earthquakes that occurred in Kumamoto in April 2016. Developments on reclaimed land are subject to an increased risk of soil liquefaction, which can be triggered by an earthquake. Although we generally avoid developing projects on reclaimed land, it is possible that some of our future developments will be located on reclaimed land. Although we will conduct assessments of the reclaimed land as we deem necessary, the assessments may not be sufficient to detect the extent of any risk of liquefaction in the event of an earthquake. Typhoons also frequently hit various regions of Japan. For instance, major typhoons affected parts of Japan in the fall of 2019. Although we have not experienced material disruptions to our business or physical damage resulting from typhoons in the past, we cannot guarantee that such disruptions or physical damage will not happen in the future. In addition, we focus primarily on developing and selling real estate located in Tokyo and Kanagawa prefecture, making us particularly vulnerable to any natural or man-made disasters that occur in this area. Even if our facilities do not incur physical damage, any loss or limit to our use of utilities, such as electricity, could disrupt our businesses. Our insurance against damage or liability caused by typhoons and other natural disasters may not be sufficient to cover repair costs or other losses, and we generally maintain no insurance coverage relating to earthquakes or business interruption insurance.

Changes in the policies of the Japanese government that affect demand for housing and investment properties may adversely affect the ability or willingness of prospective buyers to purchase residential real estate.

Demand in the Japanese residential real estate market is significantly affected by the policies of the Japanese government, which currently include low interest rate policies that result in the availability of housing loans from banks with highly discounted mortgage rates and preferential tax treatment in connection with housing loans, and the availability of publicly sponsored long-term mortgage products. Some of these housing-related policies were put in place by the Japanese government to help counteract the effect of the consumption tax rate increase in 2014 on housing demand and were further modified to help mitigate the impact of the consumption tax rate increase in 2019. Such policies may change or be discontinued in the future or may not continue to contribute to increased demand for single-family homes and condominiums as

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intended. Changes in residential property taxes, consumption taxes incurred when purchasing a residence, or other housing-related policies that increase the cost of owning, acquiring, or selling real estate may adversely affect the ability or willingness of prospective home buyers to purchase a single-family home or condominium, which may materially and adversely affect our business, financial condition, and results of operations.

Demand for residential real estate properties for investment purposes is also affected by government policies. For example, under Japanese tax laws, it has been possible for individuals to receive favorable tax deductions relating to investments in used rental buildings located overseas. When such used rental buildings are sold, rental losses that have been disregarded when calculating depreciation expenses for a used rental building located outside of Japan using the simplified method to determine useful life may be deducted from the accumulated depreciation expenses that should be excluded when calculating the property’s basis for sale, resulting in a higher basis and thus lower capital gains.

We may incur losses due to defects relating to our properties.

We may be liable for unforeseen losses, damages, or injuries suffered by third parties at properties that we develop, own, sell, or lease as a result of defects in such properties. In Japan, pursuant to the Civil Code of Japan (Act No. 89 of 1896, as amended), or the Civil Code, the owner of a structure or property attached to land is strictly liable to a third party who suffers damages due to defects in such structure or property. Our business, financial condition, or results of operations could be adversely affected as a result of our incurring any such liability. We may also incur significant costs to remedy construction defects in properties that we develop, own, lease, or sell under warranty. Following the completion of our real estate development projects, we may be liable for unforeseen losses, damages, or injuries to third parties at properties we own or sell arising from construction defects.

Fluctuation of the value of the Japanese yen against certain foreign currencies may have a material adverse effect on the results of our operations.

Some of our foreign operations’ functional currencies are not the Japanese yen, and the financial statements of such foreign operations prepared initially using their functional currencies are translated into Japanese yen. Since the currency in which sales are recorded may not be the same as the currency in which expenses are incurred, foreign exchange rate fluctuations may materially affect our results of operations. Although we currently generate an insignificant amount of our revenue from markets outside of Japan, we expect that an increasing portion of our revenue and expenses in the future will be denominated in currencies other than the Japanese yen. Accordingly, our consolidated financial results and assets and liabilities may be materially affected by changes in the exchange rates of foreign currencies in which we conduct our business.

Future acquisitions may have a material adverse effect on our ability to manage our business and our results of operations and financial condition.

We may acquire businesses, technologies, services, or products which are complementary to our core real estate development and sales business. Future acquisitions may expose us to potential risks, including risks associated with the integration of new operations, services, and personnel, unforeseen or hidden liabilities, the diversion of resources and management attention from our existing business and technology, our potential inability to generate sufficient revenue to offset new costs, the costs and expenses incurred in connection with such acquisitions, or the potential loss of or harm to relationships with suppliers, employees, and customers resulting from our integration of new businesses.

Any of the potential risks listed above could have a material adverse effect on our ability to manage our business or our results of operations and financial condition. In addition, we may need to fund any such acquisitions through the incurrence of additional debt or the sale of additional debt or equity securities, which would result in increased debt service obligations, including additional operating and financing covenants, or liens on our assets, that would restrict our operations, or dilution to our shareholders.

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Risks Relating to this Offering and the Trading Market

An active trading market for our Ordinary Shares or the ADSs may not develop.

The ADSs have been approved for listing on the Nasdaq Global Market. We have no current intention to seek a listing for our Ordinary Shares on any other stock exchange. Prior to this offering, there has not been a public market for the ADSs or our Ordinary Shares, and we cannot assure you that an active public market for the ADSs will develop or be sustained after this offering. If an active public market for the ADSs does not develop following the completion of this offering, the market price and liquidity of the ADSs may be materially and adversely affected.

You will experience immediate and substantial dilution in the net tangible book value of ADSs purchased.

The initial public offering price of the ADSs is substantially higher than the net tangible book value per ADS of the ADSs. Consequently, when you purchase the ADSs in the offering, upon completion of the offering you will incur immediate dilution of $5.42 per ADS, based on the initial public offering price of $7.00, assuming no exercise of the over-allotment option. See “Dilution.” In addition, you may experience further dilution to the extent that additional ADSs are issued upon exercise of outstanding options we may grant from time to time.

After the completion of this offering, share ownership will remain concentrated in the hands of our management, who will continue to be able to exercise a direct or indirect controlling influence on us.

We anticipate that our directors and executive officers will together beneficially own approximately 89.6% of our Ordinary Shares issued and outstanding after the completion of this offering, assuming the underwriters do not exercise their over-allotment option, or 88.5% assuming the underwriters exercise their over-allotment option in full. As a result, these shareholders, acting together, will have significant influence over all matters that require approval by our shareholders, including the election of directors and approval of significant corporate transactions. Corporate action might be taken even if other shareholders, including those who purchase ADSs in this offering, oppose them. This concentration of ownership might also have the effect of delaying or preventing a change of control of our Company that other shareholders may view as beneficial.

The sale or availability for sale of substantial amounts of the ADSs could adversely affect their market price.

Sales of substantial amounts of the ADSs in the public market after the completion of this offering, or the perception that these sales could occur, could adversely affect the market price of the ADSs and could materially impair our ability to raise capital through equity offerings in the future. The ADSs sold in this offering are freely tradable without restriction or further registration under the Securities Act, and Ordinary Shares held by our existing shareholders may also be sold in the public market in the future subject to the restrictions in Rule 144 and Rule 701 under the Securities Act and the applicable lock-up agreements. As of the date of this prospectus, 12,498,900 of our Ordinary Shares are outstanding. There will be 1,143,000 ADSs (representing 1,143,000 Ordinary Shares) issued and outstanding immediately following the consummation of this offering, assuming no exercise of the underwriters’ over-allotment option, or 1,314,450 ADSs (representing 1,314,450 Ordinary Shares) if the underwriters exercise their over-allotment option in full. In connection with this offering, our directors and executive officers have agreed not to sell any Ordinary Shares, ADSs, or similar securities for 180 days from the date of this prospectus without the prior written consent of EF Hutton, division of Benchmark Investments, LLC, and Boustead Securities, LLC, as representatives of the several underwriters (the “Representatives”), subject to certain exceptions. However, the Representatives may release these securities from these restrictions at any time, subject to applicable regulations of the Financial Industry Regulatory Authority, Inc. (“FINRA”). We cannot predict what effect, if any, market sales of securities held by our significant shareholders or any other shareholder or the availability of these securities for future sale will have on the market price of the ADSs. See “Underwriting” and “Shares Eligible for Future Sale” for a more detailed description of the restrictions on selling our securities after this offering.

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If securities or industry analysts do not publish research or reports about our business, or if they publish a negative report regarding the ADSs, the price of the ADSs and trading volume could decline.

Any trading market for the ADSs may depend in part on the research and reports that industry or securities analysts publish about us or our business. We do not have any control over these analysts. If one or more of the analysts who cover us downgrade us, the price of the ADSs would likely decline. If one or more of these analysts cease coverage of our Company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause the price of the ADSs and the trading volume to decline.

The market price of the ADSs may be volatile or may decline regardless of our operating performance, and you may not be able to resell your ADSs at or above the initial public offering price.

The initial public offering price for the ADSs is determined through negotiations between the underwriters and us and may vary from the market price of the ADSs following our initial public offering. If you purchase the ADSs in our initial public offering, you may not be able to resell those ADSs at or above the initial public offering price. We cannot assure you that the initial public offering price of the ADSs, or the market price following our initial public offering, will equal or exceed prices in privately negotiated transactions of our Ordinary Shares that have occurred from time to time prior to our initial public offering. The market price of the ADSs may fluctuate significantly in response to numerous factors, many of which are beyond our control, including:

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actual or anticipated fluctuations in our revenue and other operating results;

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the financial projections we may provide to the public, any changes in these projections, or our failure to meet these projections;

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actions of securities analysts who initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors;

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announcements by us or our competitors of significant products, technical innovations, acquisitions, strategic partnerships, joint ventures, or capital commitments;

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price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole;

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the trading volume of the ADSs on Nasdaq;

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sales of the ADSs or Ordinary Shares by us, our executive officers and directors, or our shareholders or the anticipation that such sales may occur in the future;

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lawsuits threatened or filed against us; and

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other events or factors, including those resulting from war or incidents of terrorism, or responses to these events.

In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. Stock prices of many companies have fluctuated in a manner unrelated or disproportionate to the operating performance of those companies. In the past, stockholders have filed securities class action litigation following periods of market volatility. If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business, and adversely affect our business.

The price of the ADSs could be subject to rapid and substantial volatility. Such volatility, including any stock run-ups, may be unrelated to our actual or expected operating performance and financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of the ADSs.

There have been instances of extreme stock price run-ups followed by rapid price declines and strong stock price volatility with recent initial public offerings, especially among those with relatively smaller public floats. As a relatively small-capitalization company with a relatively small public float, we may experience greater share price volatility, extreme price run-ups, lower trading volume, and less liquidity than large-capitalization companies. In particular, the ADSs may be subject to rapid and substantial price volatility, low

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volumes of trades, and large spreads in bid and ask prices. Such volatility, including any stock run-ups, may be unrelated to our actual or expected operating performance and financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of the ADSs.

In addition, if the trading volumes of the ADSs are low, persons buying or selling in relatively small quantities may easily influence the price of the ADSs. This low volume of trades could also cause the price of the ADSs to fluctuate greatly, with large percentage changes in price occurring in any trading day session. Holders of the ADSs may also not be able to readily liquidate their investment or may be forced to sell at depressed prices due to low volume trading. Broad market fluctuations and general economic and political conditions may also adversely affect the market price of the ADSs. As a result of this volatility, investors may experience losses on their investment in the ADSs. A decline in the market price of the ADSs also could adversely affect our ability to issue additional ADSs or other securities and our ability to obtain additional financing in the future. No assurance can be given that an active market in the ADSs will develop or be sustained. If an active market does not develop, holders of the ADSs may be unable to readily sell the ADSs they hold or may not be able to sell their ADSs at all.

If we fail to implement and maintain an effective system of internal control, we may fail to meet our reporting obligations or be unable to accurately report our results of operations or prevent fraud, and investor confidence and the market price of the ADSs may be materially and adversely affected.

We are a public company in the United States subject to the Sarbanes-Oxley Act of 2002. Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”) will require that we include a report of management on our internal control over financial reporting in our annual report on Form 20-F beginning with our annual report for the fiscal year ending June 30, 2023. In addition, once we cease to be an “emerging growth company,” as such term is defined in the JOBS Act, our independent registered public accounting firm must attest to and report on the effectiveness of our internal control over financial reporting. Our management may conclude that our internal control over financial reporting is not effective. Moreover, even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm, after conducting its own independent testing, may issue a report that is qualified if it is not satisfied with our internal controls or the level at which our controls are documented, designed, operated, or reviewed, or if it interprets the relevant requirements differently from us. In addition, as we are a public company, our reporting obligations places a significant strain on our management, operational, and financial resources and systems for the foreseeable future. We may be unable to complete our evaluation testing and any required remediation in a timely manner.

During the course of documenting and testing our internal control procedures, in order to satisfy the requirements of Section 404, we may identify weaknesses and deficiencies in our internal control over financial reporting. In addition, if we fail to maintain the adequacy of our internal control over financial reporting, as these standards are modified, supplemented, or amended from time to time, we may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404. If we fail to achieve and maintain an effective internal control environment, we could suffer material misstatements in our financial statements and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial information. This could in turn limit our access to capital markets, harm our results of operations, and lead to a decline in the trading price of the ADSs. Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse of corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations, and civil or criminal sanctions. We may also be required to restate our financial statements for prior periods.

We will incur substantial increased costs as a result of being a public company.

As a public company, we will incur significant legal, accounting, and other expenses that we did not incur as a private company. The Sarbanes-Oxley Act of 2002, as well as rules subsequently implemented by the SEC and Nasdaq, impose various requirements on the corporate governance practices of public companies.

Compliance with these rules and regulations increases our legal and financial compliance costs and makes some corporate activities more time-consuming and costlier. In addition, we will incur additional

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costs associated with our public company reporting requirements. It may also be more difficult for us to find qualified persons to serve on our board of directors or as executive officers.

We are an “emerging growth company,” as defined in the JOBS Act and will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of the ADSs that is held by non-affiliates equals or exceeds $700 million as of the prior December 31, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. An emerging growth company may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies. These provisions include exemption from the auditor attestation requirement under Section 404 in the assessment of the emerging growth company’s internal control over financial reporting and permission to delay adopting new or revised accounting standards until such time as those standards apply to private companies.

After we are no longer an “emerging growth company,” or until five years following the completion of our initial public offering, whichever is earlier, we expect to incur significant additional expenses and devote substantial management effort toward ensuring compliance with the requirements of Section 404 and the other rules and regulations of the SEC. For example, as a public company, we will be required to adopt policies regarding internal controls and disclosure controls and procedures.

We are currently evaluating and monitoring developments with respect to these rules and regulations, and we cannot predict or estimate with any degree of certainty the amount of additional costs we may incur or the timing of such costs.

As a foreign private issuer, we intend to follow home country practice even though we will be considered a “controlled company” under Nasdaq corporate governance rules, which could adversely affect our public shareholders.

Following this offering, Mr. Eiji Nagahara, our president, chief executive officer, and representative director, will continue to own more than a majority of the voting power of our outstanding Ordinary Shares. Under the Nasdaq corporate governance rules, a company of which more than 50% of the voting power is held by an individual, group, or another company is a “controlled company” and may elect not to comply with certain Nasdaq corporate governance standards, including the requirements that:

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a majority of its board of directors consist of independent directors;

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its director nominations be made, or recommended to the full board of directors, by its independent directors or by a nominations committee that is comprised entirely of independent directors and that it adopt a written charter or board resolution addressing the nominations process; and

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it has a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities.

As a foreign private issuer, however, Nasdaq corporate governance rules allow us to follow corporate governance practice in our home country, Japan, with respect to appointments to our board of directors and committees. We intend to follow home country practice as permitted by Nasdaq rather than rely on the “controlled company” exception to the corporate governance rules. See “— Because we are a foreign private issuer and intend to take advantage of exemptions from certain Nasdaq corporate governance standards applicable to U.S. issuers, you will have less protection than you would have if we were a domestic issuer.” Accordingly, you would not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of Nasdaq.

Our management has broad discretion to determine how to use the net proceeds raised in this offering and may use them in ways that may not enhance our results of operations or the price of the ADSs.

We anticipate that we will use the net proceeds from this offering to expand our business domestically and develop our Glocaly platform, and for general corporate purposes. Our management will have significant discretion as to the use of the net proceeds to us from this offering and could spend the proceeds in ways that do not improve our results of operations or enhance the market price of the ADSs.

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Rights of shareholders under Japanese law may be different from rights of shareholders in other jurisdictions.

Our articles of incorporation and the Companies Act of Japan (Act No. 86 of 2005, as amended), or the Companies Act, govern our corporate affairs. Legal principles relating to matters such as the validity of corporate procedures, directors’ and executive officers’ fiduciary duties, and obligations and shareholders’ rights under Japanese law may be different from, or less clearly defined than, those that would apply to a company incorporated in any other jurisdiction. Shareholders’ rights under Japanese law may not be as extensive as shareholders’ rights under the law of other countries. For example, under the Companies Act, only holders of 3% or more of our total voting rights or our outstanding shares are entitled to examine our accounting books and records. Furthermore, there is a degree of uncertainty as to what duties the directors of a Japanese joint-stock corporation may have in response to an unsolicited takeover bid, and such uncertainty may be more pronounced than that in other jurisdictions.

As holders of ADSs, you may have fewer rights than holders of our Ordinary Shares and must act through the depositary to exercise those rights.

The rights of shareholders under Japanese law to take actions, including voting their shares, receiving dividends and distributions, bringing derivative actions, examining our accounting books and records, and exercising appraisal rights, are available only to shareholders of record. ADS holders are not shareholders of record. The depositary, through its custodian agents, is the record holder of our Ordinary Shares underlying the ADSs. ADS holders will not be able to bring a derivative action, examine our accounting books and records, or exercise appraisal rights through the depositary.

Holders of ADSs may exercise their voting rights only in accordance with the provisions of the deposit agreement. If we instruct the depositary to ask for your voting instructions, upon receipt of voting instructions from the ADS holders in the manner set forth in the deposit agreement, the depositary will make efforts to vote the Ordinary Shares underlying the ADSs in accordance with the instructions of the ADS holders. The depositary and its agents may not be able to send voting instructions to ADS holders or carry out their voting instructions in a timely manner. Furthermore, the depositary and its agents will not be responsible for any failure to carry out any instructions to vote, for the manner in which any vote is cast, or for the effect of any such vote. As a result, holders of ADSs may not be able to exercise their right to vote.

Direct acquisition of our Ordinary Shares is subject to a prior filing requirement under recent amendments to the Japanese Foreign Exchange and Foreign Trade Act and related regulations.

Under recent amendments in 2019 to the Japanese Foreign Exchange and Foreign Trade Act and related regulations (which we refer to as “FEFTA”), direct acquisition of our Ordinary Shares by a foreign investor (as defined herein under “Japanese Foreign Exchange Controls and Securities Regulations”) could be subject to the prior filing requirement under FEFTA. A foreign investor wishing to acquire direct ownership of our Ordinary Shares will be required to make a prior filing with the relevant governmental authorities through the Bank of Japan and wait until clearance for the acquisition is granted by the applicable governmental authorities, which approval may take up to 30 days and could be subject to further extension. Without such clearance, the foreign investor will not be permitted to acquire our Ordinary Shares directly. We cannot assure you that the applicable Japanese governmental authorities will grant such clearance in a timely manner or at all. See “Japanese Foreign Exchange Controls and Securities Regulations.”

ADS owners and holders may not be entitled to a jury trial with respect to claims arising under the deposit agreement, which could result in less favorable outcomes to the plaintiff(s) in any such action.

The deposit agreement governing the ADSs representing our Ordinary Shares provides that, to the fullest extent permitted by applicable law, owners and holders of ADSs irrevocably waive the right to a jury trial for any claim that they may have against us or the depositary arising from or relating to our Ordinary Shares, the ADSs, or the deposit agreement, including any claim under the U.S. federal securities laws.

However, ADS owners and holders will not be deemed, by agreeing to the terms of the deposit agreement, to have waived our or the depositary’s compliance with U.S. federal securities laws and the rules and regulations promulgated thereunder. In fact, ADS owners and holders cannot waive our or the depositary’s compliance with U.S. federal securities laws and the rules and regulations promulgated thereunder. If we

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or the depositary opposed a demand for jury trial relying on the jury trial waiver mentioned above, it is up to the court to determine whether such waiver was enforceable considering the facts and circumstances of that case in accordance with the applicable state and federal law. If this jury trial waiver provision is prohibited by applicable law, an action could nevertheless proceed under the terms of the deposit agreement with a jury trial. To our knowledge, the enforceability of a jury trial waiver under the federal securities laws has not been finally adjudicated by a federal court or by the United States Supreme Court. Nonetheless, we believe that a jury trial waiver provision is generally enforceable under the laws of the State of New York, which govern the deposit agreement, or by a federal or state court in the City of New York. In determining whether to enforce a jury trial waiver provision, New York courts will consider whether the visibility of the jury trial waiver provision within the agreement is sufficiently prominent such that a party has knowingly waived any right to trial by jury. We believe that this is the case with respect to the deposit agreement and the ADSs. In addition, New York courts will not enforce a jury trial waiver provision in order to bar a viable setoff or counterclaim sounding in fraud or one which is based upon a creditor’s negligence in failing to liquidate collateral upon a guarantor’s demand, or in the case of an intentional tort claim, none of which we believe are applicable in the case of the deposit agreement or the ADSs.

If you or any other owners or holders of ADSs bring a claim against us or the depositary relating to the matters arising under the deposit agreement or the ADSs, including claims under federal securities laws, you or such other owner or holder may not have the right to a jury trial regarding such claims, which may limit and discourage lawsuits against us or the depositary. If a lawsuit is brought against us or the depositary under the deposit agreement, it may be heard only by a judge or justice of the applicable trial court, which would be conducted according to different civil procedures and may have different outcomes compared to that of a jury trial, including results that could be less favorable to the plaintiff(s) in any such action. Nevertheless, if the jury trial waiver provision is not enforced, to the extent a court action proceeds, it would proceed under the terms of the deposit agreement with a jury trial. No condition, stipulation or provision of the deposit agreement or ADSs serves as a waiver by any owner or holder of ADSs or by us or the depositary of compliance with any substantive provision of U.S. federal securities laws and the rules and regulations promulgated thereunder.

Holders of ADSs may not receive distributions on our Ordinary Shares or any value for them if it is illegal or impractical to make them available to such holders.

Subject to the terms of the deposit agreement, the depositary has agreed to pay holders of ADSs the cash dividends or other distributions it or the custodian for the ADSs receives on the Ordinary Shares or other deposited securities after deducting its fees and expenses and any taxes or other government charges. Holders of ADSs will receive these distributions in proportion to the number of our Ordinary Shares that such ADSs represent. However, the depositary is not responsible for making such payments or distributions if it is unlawful or impractical to make a distribution available to any holders of ADSs. For example, it would be unlawful to make a distribution to a holder of ADSs if it consists of securities that require registration under the Securities Act, but that are not properly registered or distributed pursuant to an applicable exemption from registration. The depositary is not responsible for making a distribution available to any holders of ADSs if any government approval or registration required for such distribution cannot be obtained after reasonable efforts made by the depositary. We have no obligation to take any other action to permit distributions on our Ordinary Shares to holders of ADSs. This means that holders of ADSs may not receive the distributions we make on our Ordinary Shares if it is illegal or impractical to make them available to such holders. These restrictions may materially reduce the value of the ADSs.

Holders of ADSs may be subject to limitations on transfer of their ADSs.

ADSs are transferable on the books of the depositary. However, the depositary may close its transfer books at any time or from time to time when it deems expedient in connection with the performance of its duties. In addition, the depositary may refuse to deliver, transfer, or register transfers of ADSs generally when our books or the books of the depositary are closed, or at any time if we or the depositary deems it advisable to do so because of any requirement of law or of any government or governmental body, or under any provision of the deposit agreement, or for any other reason.

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We may amend the deposit agreement without consent from holders of ADSs and, if such holders disagree with our amendments, their choices will be limited to selling the ADSs or cancelling and withdrawing the underlying Ordinary Shares.

We may agree with the depositary to amend the deposit agreement without consent from holders of ADSs. If an amendment increases fees to be charged to ADS holders or prejudices a substantial existing right of ADS holders, it will not become effective until 30 days after the depositary notifies ADS holders of the amendment. At the time an amendment becomes effective, ADS holders are considered, by continuing to hold their ADSs, to have agreed to the amendment and to be bound by the amended deposit agreement. If holders of ADSs do not agree with an amendment to the deposit agreement, their choices will be limited to selling the ADSs or cancelling and withdrawing the underlying Ordinary Shares. No assurance can be given that a sale of ADSs could be made at a price satisfactory to the holder in such circumstances.

We are incorporated in Japan, and it may be more difficult to enforce judgments obtained in courts outside Japan.

We are incorporated in Japan as a joint-stock corporation with limited liability. All of our directors are non-U.S. residents, and a substantial portion of our assets and the personal assets of our directors and executive officers are located outside the United States. As a result, when compared to a U.S. company, it may be more difficult for investors to effect service of process in the United States upon us or to enforce against us, our directors or executive officers, judgments obtained in U.S. courts predicated upon civil liability provisions of the federal or state securities laws of the U.S. or similar judgments obtained in other courts outside Japan. There is doubt as to the enforceability in Japanese courts, in original actions or in actions for enforcement of judgments of U.S. courts, of civil liabilities predicated solely upon the federal and state securities laws of the United States. See “Enforceability of Civil Liabilities.”

Dividend payments and the amount you may realize upon a sale of our Ordinary Shares or the ADSs that you hold will be affected by fluctuations in the exchange rate between the U.S. dollar and the Japanese yen.

Cash dividends, if any, in respect of our Ordinary Shares represented by the ADSs will be paid to the depositary in Japanese yen and then converted by the depositary or its agents into U.S. dollars, subject to certain conditions and the terms of the deposit agreement. Accordingly, fluctuations in the exchange rate between the Japanese yen and the U.S. dollar will affect, among other things, the amounts a holder of ADSs will receive from the depositary in respect of dividends, the U.S. dollar value of the proceeds that a holder of ADSs would receive upon sale in Japan of our Ordinary Shares obtained upon cancellation and surrender of ADSs and the secondary market price of ADSs. Such fluctuations will also affect the U.S. dollar value of dividends and sales proceeds received by holders of our Ordinary Shares.

If we cease to qualify as a foreign private issuer, we would be required to comply fully with the reporting requirements of the Exchange Act applicable to U.S. domestic issuers, and we would incur significant additional legal, accounting, and other expenses that we would not incur as a foreign private issuer.

We expect to qualify as a foreign private issuer upon the completion of this offering. As a foreign private issuer, we will be exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements, and our executive officers, directors, and principal shareholders will be exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we will not be required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently or as promptly as United States domestic issuers, and we will not be required to disclose in our periodic reports all of the information that United States domestic issuers are required to disclose. While we currently expect to qualify as a foreign private issuer immediately following the completion of this offering, we may cease to qualify as a foreign private issuer in the future, in which case we would incur significant additional expenses that could have a material adverse effect on our results of operations.

Because we are a foreign private issuer and intend to take advantage of exemptions from certain Nasdaq corporate governance standards applicable to U.S. issuers, you will have less protection than you would have if we were a domestic issuer.

Nasdaq listing rules require listed companies to have, among other things, a majority of its board members be independent. As a foreign private issuer, however, we are permitted to, and we intend to follow

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home country practice in lieu of the above requirements. The corporate governance practice in our home country, Japan, does not require a majority of our board to consist of independent directors. Thus, although a director must act in the best interests of the company, it is possible that fewer board members will be exercising independent judgment and the level of board oversight on the management of our company may decrease as a result. In addition, Nasdaq listing rules also require U.S. domestic issuers to have an audit committee and a compensation committee and a nominating/corporate governance committee composed entirely of independent directors, and an audit committee with a minimum of three members. We, as a foreign private issuer, are not subject to these requirements. Consistent with corporate governance practices in Japan, we do not have a standalone compensation committee or nomination and corporate governance committee of our board. As a result of these exemptions, investors would have less protection than they would have if we were a domestic issuer. Nasdaq listing rules may require shareholder approval for certain corporate matters, such as requiring that shareholders be given the opportunity to vote on all equity compensation plans and material revisions to those plans, certain ordinary share issuances. We intend to comply with the requirements of Nasdaq listing rules in determining whether shareholder approval is required on such matters.

If we cannot satisfy, or continue to satisfy, the initial listing requirements and other rules of Nasdaq, the ADSs may not be listed or may be delisted, which could negatively impact the price of the ADSs and your ability to sell them.

The ADSs have been approved for listing on Nasdaq upon consummation of this offering.

Following this offering, in order to maintain our listing on Nasdaq, we will be required to comply with certain rules of Nasdaq, including those regarding minimum stockholders’ equity, minimum share price, minimum market value of publicly held shares, and various additional requirements. Even if we initially meet the listing requirements and other applicable rules of Nasdaq, we may not be able to continue to satisfy these requirements and applicable rules. If we are unable to satisfy Nasdaq criteria for maintaining our listing, the ADSs could be subject to delisting.

If Nasdaq subsequently delists the ADSs from trading, we could face significant consequences, including:

•

a limited availability for market quotations for the ADSs;

•

reduced liquidity with respect to the ADSs;

•

a determination that the ADS is a “penny stock,” which will require brokers trading in the ADSs to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for the ADSs;

•

limited amount of news and analyst coverage; and

•

a decreased ability to issue additional securities or obtain additional financing in the future.

We are an “emerging growth company” within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies, this will make it more difficult to compare our performance with other public companies.

We are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act. 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 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 an 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. This will make comparison of our financial statements with another

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public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Because we are an “emerging growth company,” we may not be subject to requirements that other public companies are subject to, which could affect investor confidence in us and the ADSs.

For as long as we remain an “emerging growth company,” as defined in the JOBS Act, we will elect to 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, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of shareholder approval of any golden parachute payments not previously approved. Because of these lessened regulatory requirements, our shareholders would be left without information or rights available to shareholders of other public companies. If some investors find the ADSs less attractive as a result, there may be a less active trading market for the ADSs and the ADS price may be more volatile. See “Implications of Our Being an ‘Emerging Growth Company.’”

If we are classified as a passive foreign investment company, United States taxpayers who own the ADSs or our Ordinary Shares may have adverse United States federal income tax consequences.

A non-U.S. corporation such as ourselves will be classified as a passive foreign investment company (“PFIC”) for any taxable year if, for such year, either:

•

at least 75% of our gross income for the year is passive income; or

•

the average percentage of our assets (determined at the end of each quarter) during the taxable year which produce passive income or which are held for the production of passive income is at least 50%.

Passive income generally includes dividends, interest, rents and royalties (other than rents or royalties derived from the active conduct of a trade or business), and gains from the disposition of passive assets.

If we are determined to be a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. taxpayer who holds the ADSs or our Ordinary Shares, the U.S. taxpayer may be subject to increased U.S. federal income tax liability and may be subject to additional reporting requirements.

Depending on the amount of cash we raise in this offering, together with any other assets held for the production of passive income, it is possible that, for our 2022 taxable year or for any subsequent year, more than 50% of our assets may be assets which produce passive income, in which case we would be deemed a PFIC, which could have adverse U.S. federal income tax consequences for U.S. taxpayers who are shareholders. We will make this determination following the end of any particular tax year.

The classification of certain of our income as active or passive, and certain of our assets as producing active or passive income, and hence whether we are or will become a PFIC, depends on the interpretation of certain United States Treasury Regulations as well as certain IRS guidance relating to the classification of assets as producing active or passive income. Such regulations and guidance are potentially subject to different interpretations. If due to different interpretations of such regulations and guidance the percentage of our passive income or the percentage of our assets treated as producing passive income increases, we may be a PFIC in one or more taxable years.

For a more detailed discussion of the application of the PFIC rules to us and the consequences to U.S. taxpayers if we were or are determined to be a PFIC, see “Material Income Tax Consideration — United States Federal Income Taxation — PFIC.”

U.S. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISERS ABOUT THE PFIC RULES, THE POTENTIAL APPLICABILITY OF THESE RULES TO THE COMPANY CURRENTLY AND IN THE FUTURE, AND THEIR FILING OBLIGATIONS IF THE COMPANY IS A PFIC.

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DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that reflect our current expectations and views of future events, all of which are subject to risks and uncertainties. Forward-looking statements give our current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. You can find many (but not all) of these statements by the use of words such as “approximates,” “believes,” “hopes,” “expects,” “anticipates,” “estimates,” “projects,” “intends,” “plans,” “will,” “would,” “should,” “could,” “may,” or other similar expressions in this prospectus. These statements are likely to address our growth strategy, financial results, and financial needs. You must carefully consider any such statements and should understand that many factors could cause actual results to differ from our forward-looking statements. These factors may include inaccurate assumptions and a broad variety of other risks and uncertainties, including some that are known and some that are not. No forward-looking statement can be guaranteed and actual future results may vary materially. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to:

•

assumptions about our future financial and operating results, including revenue, income, expenditures, cash balances, and other financial items;

•

our ability to execute our growth strategies, including our ability to meet our goals;

•

current and future economic and political conditions;

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our capital requirements and our ability to raise any additional financing which we may require;

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our ability to attract customers and further enhance our brand recognition;

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our ability to hire and retain qualified management personnel and key employees in order to enable us to develop our business;

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the COVID-19 pandemic;

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trends and competition in the luxury residential property industry; and

•

other assumptions described in this prospectus underlying or relating to any forward-looking statements.

We describe certain material risks, uncertainties, and assumptions that could affect our business, including our financial condition and results of operations, under “Risk Factors.” We base our forward-looking statements on our management’s beliefs and assumptions based on information available to our management at the time the statements are made. We caution you that actual outcomes and results may, and are likely to, differ materially from what is expressed, implied or forecast by our forward-looking statements. Accordingly, you should be careful about relying on any forward-looking statements.

The forward-looking statements made in this prospectus relate only to events or information as of the date on which the statements are made in this prospectus. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events. You should read this prospectus and the documents that we refer to in this prospectus and have filed as exhibits to the registration statement, of which this prospectus is a part, completely and with the understanding that our actual future results may be materially different from what we expect.

Industry Data and Forecasts

This prospectus contains references to market data and industry forecasts and projections, which were obtained or derived from publicly available information, reports of governmental agencies, market research reports, and industry publications and surveys. These sources generally state that the information contained therein has been obtained from sources believed to be reliable, but that the accuracy and completeness of that information is not guaranteed. Although we believe such information to be accurate, we have not independently verified the data from these sources. However, we acknowledge our responsibility for all disclosures in this prospectus. Forecasts and other forward-looking information obtained from these sources are subject to the same qualifications and additional uncertainties and risks regarding the other forward-looking statements in this prospectus due to a variety of factors, including those described in this section, the section entitled “Risk Factors,” and elsewhere in this prospectus. These and other factors could cause results to differ materially from those expressed in the forecasts and estimates.

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ENFORCEABILITY OF CIVIL LIABILITIES

We are a joint-stock corporation with limited liability organized under Japanese law. All of our executive officer and directors reside in Japan and significantly all of our assets and the assets of such persons are located outside of the United States. As a result, it may be difficult for investors to effect service of process within the United States upon us or these persons, or to enforce against us or them judgments obtained in United States courts, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States.

Anderson Mori & Tomotsune, our counsel with respect to the laws of Japan, has advised us that there is uncertainty as to whether the courts of Japan would (i) recognize or enforce judgments of United States courts obtained against us or our directors or officers predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States or (ii) entertain original actions brought in Japan against us or our directors or officers predicated upon the securities laws of the United States. The Civil Execution Act of Japan and the Code of Civil Procedure require Japanese courts to deny requests for the enforcement of judgments of foreign courts if foreign judgments fail to satisfy the requirements prescribed by the Civil Execution Act and the Code of Civil Procedure, including that:

•

the jurisdiction of the foreign court be recognized under laws, regulations, treaties, or conventions;

•

proper service of process be made on relevant defendants, or relevant defendants be given appropriate protection if such service is not received;

•

the judgment and proceedings of the foreign court must not be repugnant to public policy as applied in Japan; and

•

there exists reciprocity as to the recognition by a court of the relevant foreign jurisdiction of a final judgment of a Japanese court.

No treaties exist between the U.S. and Japan that would generally allow any U.S. judgments to be recognized or enforced in Japan. In addition, reciprocity is judged by a Japanese court on a case-by-case basis as to whether a court of the jurisdiction in question (i.e., a court of the state or country that has rendered the judgment in question) would recognize or enforce a final judgment of the same type or kind rendered by a Japanese court, based on effectively the same process as applied in Japan (i.e., without re-examining the merit of the case, subject to public policy). Japanese courts have admitted reciprocity in relation to judgments rendered by a federal court in Hawaii, and state courts in Washington DC, New York, California, Texas, Nevada, Minnesota, Oregon, and Illinoi, respectively (mainly relating to monetary claims), but there is no guarantee that reciprocity will be admitted with respect to U.S. judgments rendered in any other state or of any kind or type. Therefore, judgments of U.S. courts of civil liabilities predicated solely upon the federal and state securities laws of the United States may not satisfy these requirements.

We have appointed Lead Real Estate Global Co., Ltd. as our agent to receive service of process with respect to any action brought against us in the United States District Court for the Southern District of New York under the federal securities laws of the United States or of any state in the United States or any action brought against us in the Supreme Court of the State of New York in the County of New York under the securities laws of the State of New York.

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USE OF PROCEEDS

The net proceeds from this offering, after deducting the estimated underwriting discounts and the estimated offering expenses payable by us, are approximately $4,411,895, assuming the underwriters do not exercise their over-allotment option, or approximately $5,516,033 if the underwriters exercise their over-allotment option in full. Underwriting discounts to be paid by us are calculated based on the assumption that no investors in this offering are introduced by us.

We plan to use the net proceeds we receive from this offering for the following purposes:

•

approximately 50% for domestic business expansion, including expanding our condominium development and sales in Japan;

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approximately 30% for the development of our Glocaly platform, including sales and marketing, feature development, and server maintenance costs; and

•

approximately 20% for general corporate purposes.

The foregoing represents our current intentions based upon our present plans and business conditions to use and allocate the net proceeds of this offering. Our management, however, will have flexibility and discretion to apply the net proceeds of this offering. See “Risk Factors — Risks Relating to this Offering and the Trading Market — Our management has broad discretion to determine how to use the net proceeds raised in this offering and may use them in ways that may not enhance our results of operations or the price of the ADSs.” To the extent that the net proceeds we receive from this offering are not immediately used for the above purposes, we intend to invest our net proceeds in short-term, interest-bearing bank deposits or debt instruments.

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DIVIDEND POLICY

Since our inception, we have not declared or paid cash dividends on our Ordinary Shares. Our board of directors may suggest to the shareholders meeting in the future that it resolves to pay dividends. Any decision to make such a suggestion in the future will be subject to a number of factors, including our financial condition, results of operations, the level of our retained earnings, capital demands, general business conditions, and other factors our board of directors may deem relevant.

If declared, holders of our outstanding shares on a dividend record date will be entitled to the full dividend declared without regard to the date of issuance of the shares or any subsequent transfer of the shares. Payment of declared annual dividends in respect of a particular year, if any, will be made in the following year after approval by our shareholders at the annual general meeting of shareholders, subject to certain provisions of our articles of incorporation and the Companies Act. See “Description of Share Capital — Restriction on Distribution of Surplus.”

Subject to the terms of the deposit agreement for the ADSs, you will be entitled to receive dividends on our Ordinary Shares represented by ADSs to the same extent as the holders of our Ordinary Shares, less the fees and expenses payable under the deposit agreement in respect of, and any Japanese tax or any other taxes or other governmental charges applicable to, such dividends. See “Material Income Tax Consideration — Japanese Taxation” and “Description of American Depositary Shares.” The depositary will generally convert the Japanese yen it receives into U.S. dollars and distribute the U.S. dollar amounts to holders of ADSs. Cash dividends on our Ordinary Shares, if any, will be paid in Japanese yen.

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CAPITALIZATION

The following table sets forth our capitalization as of December 31, 2022:

•

on an actual basis; and

•

on an as adjusted basis to reflect the issuance and sale of Ordinary Shares in the form of ADSs by us in this offering at the initial public offering price of $7.00 per ADS, after deducting the estimated underwriting discounts and the estimated offering expenses payable by us.

You should read this capitalization table in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and the related notes appearing elsewhere in this prospectus.

	As of December 31, 2022
(in thousands, except share amounts)	Actual ($)			Actual (¥)			As Adjusted (Over-allotment option not exercised)(1) ($)			As adjusted (Over-allotment option exercised in full)(1) ($)
Cash and cash equivalents		$	2,949		¥	388,731		$	7,361		$	8,465
Short-Term Loans			49,834			6,568,576			49,834			49,834
Long-Term Loans, including current portion			29,045			3,828,446			29,045			29,045
Shareholders’ equity:
Ordinary Shares, 50,000,000 Ordinary Shares authorized, 14,485,000 Ordinary Shares issued and 12,498,900 Ordinary Shares outstanding; 15,628,000 Ordinary Shares issued and 13,641,900 Ordinary Shares outstanding, as adjusted assuming the over-allotment option is not exercised, and 15,799,450 Ordinary Shares issued and 13,813,350 Ordinary Shares outstanding, as adjusted assuming the over-allotment option is exercised in full			2,611			344,145			7,023			8,127
Retained earnings			16,458			2,169,325			16,458			16,458
Accumulated other comprehensive Income (loss)			92			12,079			92			92
Treasury shares, at cost			(1,169)			(154,121)			(1,169)			(1,169)
Total shareholders’ equity			17,991			2,364,661			22,403			23,507
Total capitalization		$	96,870		¥	12,761,683		$	101,282		$	102,386

(1)

The net proceeds are approximately $4,411,895 assuming the underwriters do not exercise their over-allotment option, or approximately $5,516,033 if the underwriters exercise their over-allotment option in full. Underwriting discounts to be paid by us are calculated based on the assumption that no investors in this offering are introduced by us.

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DILUTION

If you invest in the ADSs, your interest will be diluted for each ADS you purchase to the extent of the difference between the initial public offering price per ADS and our net tangible book value per ADS after this offering. Dilution results from the fact that the initial public offering price per Ordinary Share is substantially in excess of the net tangible book value per Ordinary Share attributable to the existing shareholders for our presently outstanding Ordinary Shares.

Our net tangible book value as of December 31, 2022 was $17,121,630, or $1.37 per Ordinary Share as of that date and $1.37 per ADS. Net tangible book value represents the amount of our total consolidated tangible assets, less the amount of our total consolidated liabilities. Dilution is determined by subtracting net tangible book value per Ordinary Share, after giving effect to the additional proceeds we will receive from this offering, from the initial public offering price of $7.00 per ADS, and after deducting underwriting discounts and estimated offering expenses payable by us.

After giving effect to our sale of 1,143,000 ADSs offered in this offering based on the initial public offering price of $7.00 per ADS and after deduction of the estimated underwriting discounts and the estimated offering expenses payable by us, our as adjusted net tangible book value as of December 31, 2022, would have been $21,533,525, or $1.58 per Ordinary Share and $1.58 per ADS. This represents an immediate increase in net tangible book value of $0.21 per Ordinary Share and $0.21 per ADS to the existing shareholders, and an immediate dilution in net tangible book value of $5.42 per Ordinary Share and $5.42 per ADS to investors purchasing ADSs in this offering.

The following tables illustrate such dilution:

Over-allotment option not exercised	Per Ordinary Share			Per ADS
Initial public offering price per Ordinary Share		$	7.00		$	7.00
Net tangible book value per Ordinary Share as of December 31, 2022		$	1.37		$	1.37
As adjusted net tangible book value per Ordinary Share attributable to payments by new investors		$	0.21		$	0.21
Net tangible book value per Ordinary Share immediately after this offering		$	1.58		$	1.58
Amount of dilution in net tangible book value per Ordinary Share to new investors in the offering		$	5.42		$	5.42

Over-allotment option exercised in full	Per Ordinary Share			Per ADS
Initial public offering price per Ordinary Share		$	7.00		$	7.00
Net tangible book value per Ordinary Share as of December 31, 2022		$	1.37		$	1.37
As adjusted net tangible book value per Ordinary Share attributable to payments by new investors		$	0.27		$	0.27
Net tangible book value per Ordinary Share immediately after this offering		$	1.64		$	1.64
Amount of dilution in net tangible book value per Ordinary Share to new investors in the offering		$	5.36		$	5.36

The following tables summarize, on an as adjusted basis as of December 31, 2022, the differences between existing shareholders and the new investors with respect to the number of Ordinary Shares (in the form of ADSs) purchased from us, the total consideration paid and the average price per Ordinary Share before deducting the estimated underwriting discounts and the estimated offering expenses payable by us.

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CORPORATE HISTORY AND STRUCTURE

Corporate History

We started our business through Lead Real Estate in Tokyo, Japan, in March 2001 as a limited liability company, which was subsequently reorganized in November 2003 into a joint-stock corporation (kabushiki kaisha) with limited liability.

In July 2006, our president, chief executive officer, and representative director, Mr. Eiji Nagahara, established Lead Proset Farm Co., Ltd as a joint-stock corporation with limited liability in Japan, which was changed into Real Vision Co., Ltd. in December 2008 and became a wholly owned subsidiary of Lead Real Estate in March 2021. Real Vision was established for the provision of property management service to the properties we developed.

In February 2014, Mr. Nagahara established LRE HK, a private company limited by shares in Hong Kong, which became a wholly owned subsidiary of Lead Real Estate in May 2015. LRE HK was established for the expansion of our overseas business in Asia.

We further expanded geographically to the United States through the establishment of Lead Real Estate Dallas, LLC, a limited liability company in Texas, the U.S., in September 2017, which was converted into Lead Real Estate Global Co., Ltd., a Texas corporation, in October 2020. LRE Dallas was established for the expansion of our overseas business in the U.S.

In January 2020, together with Mr. Nagahara, we established Sojiya Japan, as a joint-stock corporation with limited liability in Japan, for the provision of cleaning services for our properties. Lead Real Estate and Mr. Nagahara each hold 50% of the equity interests in Sojiya Japan.

In October 2014, Mr. Nagahara established JP Shuhan, as a joint-stock corporation with limited liability in Japan. Mr. Nagahara currently holds 100% of the equity interests in JP Shuhan.

In August 2019, Mr. Nagahara established LRE Cayman, as a company limited by shares under the laws of the Cayman Islands. Mr. Nagahara currently holds 100% of the equity interests in LRE Cayman.

Based on our analysis, we have concluded that Sojiya Japan and LRE Cayman are our variable interest entities under Accounting Standards Codification 810-10-05-08A in the six months ended December 31, 2022 and the fiscal years ended June 30, 2022 and 2021. See “Note 1. Organization and Business” of our consolidated financial statements.

Our Corporate Structure

The following chart illustrates our corporate structure as of the date of this prospectus and upon completion of this IPO based on 12,498,900 Ordinary Shares outstanding as of the date of this prospectus and 1,143,000 ADSs to be sold in this IPO, assuming no exercise of the underwriters’ over-allotment option:

* Indicates less than 1%

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes included elsewhere in this prospectus. This discussion contains forward-looking statements reflecting our current expectations that involve risks and uncertainties. See “Disclosure Regarding Forward-Looking Statements” for a discussion of the uncertainties, risks, and assumptions associated with these statements. Actual results and the timing of events could differ materially from those discussed in our forward-looking statements as a result of many factors, including those set forth under “Risk Factors” and elsewhere in this prospectus.

Overview

We primarily generate revenue from developing and selling single-family homes and condominiums. Since our inception in 2001, we have delivered more than 1,000 single-family homes and 25 condominiums. The target customers of our single-family homes are wealthy family buyers who are looking for luxury single-family homes as their primary residence, while the target customers of our condominiums are institutional customers who look to purchase entire condominiums for investment purposes. We rely on real estate agencies to help identify land and development sites for acquisition and customers for our luxury residential properties and generally acquire land parcels from private landowners. We outsource the design work and construction for our luxury residential property projects to third-party design firms and construction companies, while coordinating and closely supervising the projects through our internal teams to maximize quality of the projects. In addition, we launched our interactive media platform, Glocaly, in October 2021, as a listing and marketing platform seeking to facilitate matching of sellers and buyers of condominiums. We utilize a homebuilding model designed to minimize risks, in which we typically identify customers for our single-family homes before acquiring the land and commencing construction and build our condominiums in highly-marketable locations, resulting in an aggregate of only four cancelations during the six months ended December 31, 2022 and the fiscal years ended June 30, 2022 and 2021. When developing a single-family home or condominium, we typically deliver the land to the customer before starting the construction of the building and deliver the completed building to the customer six to 12 months after the land delivery, in order to quickly recover our payment for the land. For details about our land and building deliveries, see “— Results of Operations” below.

To diversify our revenue streams and supplement our real estate sales, we have expanded into other businesses related to real estate since 2018. During the six months ended December 31, 2022 and the fiscal years ended June 30, 2022 and 2021, we operated five, four, and four hotels in Tokyo, respectively. In February 2023, we started to operate a sixth hotel in Tokyo. During the six months ended December 31, 2022 and the fiscal years ended June 30, 2022 and 2021, we leased apartment units in eight, 17, and 17 apartment buildings to 29, 77, and 118 individual customers, respectively. For the six months ended December 31, 2022 and the fiscal years ended June 30, 2022 and 2021, we had total revenue of JPY7,359,750 thousand (approximately $55,836 thousand), JPY14,321,186 thousand (approximately $108,650 thousand), and JPY11,255,275 thousand (approximately $85,390 thousand), respectively, and operating income of JPY263,523 thousand (approximately $1,999 thousand), JPY649,188 thousand (approximately $4,925 thousand), and JPY453,647 thousand (approximately $3,442 thousand), respectively. Revenue generated from real estate development and sales accounted for approximately 98.7%, 98.5%, and 98.5% of our total revenue for those periods. Revenue derived from other businesses accounted for approximately 1.3%, 1.5%, and 1.5% of our total revenue for those periods, respectively.

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Factors Impacting Our Operating Results

Our Business Environment and Current Outlook

During the six months ended December 31, 2022 and the fiscal years ended June 30, 2022 and 2021, we continued to experience strong demand for our real properties despite the COVID-19 pandemic. We believe the strong demand for new real properties was due to a number of factors, including a supply-demand imbalance resulting from over a decade of underproduction of new real properties, low mortgage rates, a tight supply of resale real properties, favorable demographics, and a renewed appreciation for the importance of homes. We believe many of these factors will continue to support demand in the foreseeable future.

In response to the strong demand and in an effort to drive profitability and manage growth, we continued to raise prices for our single-family home and condominium projects.

Competitive Landscape

We primarily face competition in the luxury residential property industry in Tokyo and Kanagawa prefecture. We compete primarily with local residential property developers as well as large national and overseas residential property developers that have also started to enter these markets. As a boutique real estate developer, we compete on the basis of, among other things, customers, desirable lots, the types of products offered, brand recognition, price, design and quality, financing, raw materials, and skilled labor.

Land Acquisition and Development

Our business is subject to many risks because of the extended length of time that it takes to obtain the necessary approval on a property, complete the land improvements on it, and build and deliver a single-family home or condominium after a buyer signs an agreement of sale. We attempt to reduce some of these risks and improve our capital efficiency by utilizing one or more of the following methods: selling land lots financed via short-term land loans first to the end buyer in order to recoup costs and improve the liquidity profile of our sales cycle; generally commencing construction of a single-family home only after both land and development contracts are signed simultaneously; beginning building construction only after receiving a substantial down payment from the buyer; and using subcontractors to perform home construction and land development work on a fixed-price basis.

The COVID-19 Pandemic Affecting Our Results of Operations

The ongoing COVID-19 pandemic has resulted in the implementation of significant governmental measures, including lockdowns, closures, quarantines, and travel bans, intended to control the spread of the virus. Companies are also taking precautions, such as requiring employees to work remotely, imposing travel restrictions, and temporarily closing businesses.

The COVID-19 pandemic has not materially impacted our business operations and operating results. Core demand for single-family homes and condominiums remains high, which is reflected in our higher revenue growth and operating profits. On the supply and construction side, however, our business has faced inflation in the prices of raw materials and labor costs associated with supply chain shortages resulting from the pandemic, which may adversely impact our margins. As of the date of this prospectus, we have passed the rising costs through to our customers in the form of higher average sale prices and also mitigated increases in our construction costs through fixed cost subcontractor arrangements, where the subcontractor bears the cost of inflation, thereby preserving our margins. Although we currently expect this trend to continue for future supply side driven inflationary pressures, we cannot guarantee that we will be able to pass all cost increases to our customers and subcontractors or avoid adverse impacts on our margins.

As of the date of this prospectus, the daily life of the Japanese residents is largely back to its normal state, with the Japanese government allowing travel in and out of the country, subject to customary vaccination records and basic health precautionary measures. We believe the worst impacts of the pandemic are behind us and anticipate a gradual recovery or mean reversion toward normal consumer demand in the country.

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Key Financial Performance Indicators

Our key financial performance indicators are revenue, gross profit and gross margin, and operating income and operating margin.

Revenue

Our primary source of revenue is the development and sale of luxury single-family homes and condominiums across Tokyo and Kanagawa prefecture. Our real estate development and sales revenue is comprised of three parts: land sales revenue, construction development revenue, and non-development revenue. For the single-family homes and condominiums we develop, as we typically deliver the land of the single-family home or condominium before delivering the completed building, we recognize revenue in two steps, land sales revenue upon receipt of final payment for the land and transferring the clean land title to the buyer, and construction development revenue upon transferring the completed building to the buyer on the closing date. For sales of existing fully constructed single-family homes and condominiums we did not develop, we recognize non-development revenue upon transferring the completed building to the buyer on the closing date. Since we recognize the land sales revenue before the construction development revenue of a single-family home or condominium and the land value of a family home or condominium in Tokyo and Kanagawa prefecture is usually much higher than the value of the completed building itself, land sales revenue typically accounts for most of our real estate development and sales revenue for a given reporting period.

We generate revenue from other sources, detailed in the footnotes accompanying the consolidated financial statements, which collectively represent less than 1.3% of total revenue for the six months ended December 31, 2022 and the fiscal years ended June 30, 2022 and 2021.

Gross Profit and Gross Margin

Gross profit is the difference between our revenue and cost of sales. Gross margin is the profit expressed as a percentage of revenue.

Operating Profit and Operating Margin

Operating profit is the difference between our gross profit and selling, general, and administrative expenses. Operating margin is the operating profit expressed as a percentage of revenue.

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Results of Operations

Comparison of Results of Operations for the Six Months Ended December 31, 2022 and 2021

(In thousands, except change % data)	Six Months Ended December 31,					Change (2022 vs. 2021)
Revenue:	2022 ($)	2022(¥)		2021(¥)		$	¥		YoY %
Real estate development and sales			7,264,887		7,011,458			253,429		3.6%
Other revenue			94,863		110,083			(15,220)		(13.8)%
Total revenue			7,359,750		7,121,543			238,207		3.3%
Cost of revenue and operating expenses:
Cost of sales — real estate			6,218,611		5,887,763			330,848		5.6%
Cost of sales — other			59,221		37,206			22,015		59.2%
Selling, general, and administrative expenses			818,395		886,594			(68,199)		(7.7)%
Total cost of revenue and operating expenses			7,096,227		6,811,565			284,662		4.2%
Operating profit (loss) .			263,523		309,977			(46,454)		(15.0)%
Other Income/(Expense)			3,580		(3,678)			7,258		(70.1)%
Interest expense, net			(6,186)		(20,698)			(14,512)		(197.3)%
Total other income (expense)			(2,606)		(24,376)			(21,770)		(89.3)%
Profit (loss) before income taxes			260,917		285,601			(24,684)		(8.6)%
Income taxes			93,163		102,822			(9,659)		(9.4)%
Profit (loss)			167,754		182,779			(15,025)		(8.2)%
Profit: Non-Controlling Interests			(523)		(370)			153
Profit: Shareholders of the Parent			168,277		183,149			14,872		(8.1)%

Supplemental Disclosures	Six Months ended Dec 31, 2022			Six Months ended Dec 31, 2021
Gross Margin %			14.7%			16.8%
Operating Profit %			3.6%			4.4%
Single-family home land deliveries – Units			36			35
Single-family home land deliveries – Avg. Sales Price (¥ in Thousands)		¥	76,017		¥	75,040
Single-family home building deliveries – Units			43			33
Single-family home building deliveries – Avg. Sales Price (¥ in Thousands)		¥	23,077		¥	23,529
Condominium land deliveries – Units			5			5
Condominium land deliveries – Avg. Sales Price (¥ in Thousands)		¥	453,074		¥	459,382
Condominium building deliveries – Units			3			5
Condominium building deliveries – Avg. Sales Price (¥ in Thousands)		¥	491,177		¥	245,138

Revenue

Revenue from real estate sales, including land sales and non-development revenue and construction development revenue, increased by 3.6% to ¥7,264,887 thousand (approximately $55,116 thousand) in the six months ended December 31, 2022 from ¥7,011,458 thousand (approximately $53,194 thousand) in the six months ended December 31, 2021.

Revenue was higher primarily due to the following factors:

•

36 units of land deliveries for single-family homes in the six months ended December 31, 2022, up from 35 units delivered in the six months ended December 31, 2021. Average sale price increased by 1.3% year-over-year to ¥76,017 thousand (approximately $577 thousand due primarily to location of development projects;

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•

43 units of single-family home building deliveries in the six months ended December 31, 2022, up from 33 units delivered in the six months ended December 31, 2021. Average sales price decreased by 1.9% year-over-year to ¥23,077 thousand (approximately $175 thousand); and

•

three units of condominium building deliveries in the six months ended December 31, 2022, down from five units delivered in the six months ended December 31, 2021. Average sales price increased by 100.4% year-over-year to ¥491,177 thousand (approximately $3,499 thousand).

The above-noted increases to revenue were offset by:

•

five units of land deliveries for condominiums in the six months ended December 31, 2022, remaining the same with five units delivered in the six months ended December 31, 2021. Average sales price decreased by 1.4% year-over-year to ¥453,074 thousand (approximately $3,437 thousand).

Other revenue decreased by 13.8% to ¥94,863 thousand (approximately $720 thousand) in the six months ended December 31, 2022 from ¥110,083 thousand (approximately $835 thousand) in the six months ended December 31, 2021, primarily due to a decrease in rent revenue.

Cost of Revenue and Gross Margin

For the six months ended December 31, 2022, cost of revenue for real estate development and sales increased by 5.6% year-over-year to ¥6,218,611 thousand (approximately $47,179 thousand) as compared to the same period in 2021, primarily due to higher direct costs associated with higher revenue.

Gross margin decreased to 14.7% in the six months ended December 31, 2022, compared to 16.8% the six months ended December 31, 2021, primarily because the portion of condominium sales with higher profit margins were higher during the six months ended December 31, 2021.

Selling, General, and Administrative Expenses and Operating Margin

Selling, general, and administrative expenses were ¥818,395 thousand (approximately $6,209 thousand) in the six months ended December 31, 2022, compared to ¥886,594 thousand (approximately $6,726 thousand) in the six months ended December 31, 2021. As a percentage of revenue, selling, general, and administrative expenses decreased to 11.1% in the six months ended December 31, 2022, from 12.5% in the six months ended December 31, 2021, due to cost reduction activities.

Operating income decreased by 15% to ¥263,523 thousand (approximately $1,999 thousand) in the six months ended December 31, 2022, from ¥309,978 thousand (approximately $2,352 thousand) in the six months ended December 31, 2021 and operating profit margin decreased from 4.4% to 3.6%.

Interest Expenses

Interest expenses decreased to ¥6,186 thousand (approximately $47 thousand) in the six months ended December 31, 2022, from ¥20,698 thousand (approximately $157 thousand) in the six months ended December 31, 2021, reflecting higher amounts of capitalized interest associated with our increased number of development projects, which offset higher net borrowings and interest incurred.

Other Income, net

Other income was ¥3,580 thousand (approximately $27 thousand) in the six months ended December 31, 2022, compared to other expense of ¥3,678 thousand (approximately $28 thousand) in the six months ended December 31, 2021, primarily due to a foreign exchange gain in the 2022 period.

Provision for Income Taxes

For in the six months ended December 31, 2022 and 2021, we had a tax provision of ¥93,000 thousand (approximately $706 thousand) and ¥103,000 thousand (approximately $781 thousand), respectively, which resulted in an overall effective income tax rate of 35.71% and 36.00%, respectively.

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Profit (Loss)

As a result of the foregoing, our net income attributable to ordinary shareholders decreased by 8.1% to ¥168,277 thousand (approximately $1,277 thousand) in the six months ended December 31, 2022 from ¥183,150 thousand (approximately $1,389 thousand) in the six months ended December 31, 2021.

Comparison of Results of Operations for the Fiscal Years Ended June 30, 2022 and 2021

(In thousands, except change % data)	Fiscal Years Ended June 30,						Change (2022 vs. 2021)
	2022 ($)		2022 (¥)		2021 (¥)		$		¥		YoY %
Revenue:
Real estate sales		103,976		14,108,455		11,090,778		22,239		3,017,677		27.2%
Other revenue		1,568		212,731		164,497		355		48,234		29.3%
Total revenue		105,543		14,321,186		11,255,275		22,595		3,065,911		27.2%
Cost of revenue and operating expenses:
Cost of sales – real estate		87,054		11,812,347		9,652,072		15,921		2,160,275		22.4%
Cost of sales – other		538		73,037		116,154		(318)		(43,117)		(37.1)%
Selling, general and administrative expenses		13,167		1,786,614		1,033,402		5,551		753,212		72.9%
Total cost of revenue and operating expenses		100,759		13,671,998		10,801,628		21,154		2,870,370		26.6%
Operating income		4,784		649,188		453,647		1,441		195,541		43.1%
Other income / (expense)		1,371		186,007		(9,770)		1,443		195,777		(2,003.9)%
Interest expense		(172)		(23,333)		(56,650)		246		33,317		(58.8)%
Total other income (expense)		1,199		162,674		(66,420)		1,688		229,094		(344.9)%
Income before income taxes		5,983		811,862		387,227		3,129		424,635		109.7%
Income taxes		2,089		283,479		134,869		1,095		148,610		110.2%
Net income		3,894		528,383		252,358		2,034		276,025		109.4%
Net loss attributable to the noncontrolling interests		(3)		(370)		(27,132)		197		26,762		(98.6)%
Net income attributable to ordinary shareholders		3,897		528,753		279,490		1,837		249,263.0		89.2%
Foreign currency translation gain (loss)		140		19,056		(1,062)		148		20,118		(1,894.4)%
Total comprehensive income		4,037		547,809		278,428		1,985		269,381		96.8%

Supplemental Disclosures (In thousands, except change % data)	Fiscal Years Ended June 30, 2022		Fiscal Years Ended June 30, 2021		($)		(¥)
Gross margin %		17.0%		13.2%					3.8%
Operating Profit %		4.5%		4.0%					0.5%
Single-family home land deliveries – Units		94		102					(7.8)%
Single-family home land deliveries – Average Sale price (¥ in Thousands)		75,129		77,461		554		571	(3.0)%
Single-family home building deliveries – Units		81		50					62.0%
Single-family home building deliveries – Average Sale price (¥ in Thousands)		23,626		22,202		174		164	6.4%
Condominium land deliveries – Units		12		4					200.0%
Condominium land deliveries – Average Sale price (¥ in Thousands)		322,996		217,321		2,380		1,602	48.6%
Condominium building deliveries – Units		9		4					125.0%
Condominium building deliveries – Average Sale price (¥ in Thousands)		147,961		178,590		1,090		1,316	(17.2)%

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Revenue

Revenue from real estate sales, including land sales and non-development revenue and construction development revenue, increased by 27.2% to ¥14,108,454 thousand (approximately $103,976 thousand) in the fiscal year ended June 30, 2022 from ¥11,090,778 thousand (approximately $81,736 thousand) in the fiscal year ended June 30, 2021. Revenue was higher primarily due to the following factors:

•

12 units of land deliveries for condominiums in the fiscal year ended June 30, 2022, up from four units delivered in the prior fiscal year. Average sale price increased by 49% year-over-year to ¥322,996 thousand (approximately $2,380 thousand);

•

81 units of single-family home building deliveries in the fiscal year ended June 30, 2022, up from 50 units delivered in the prior fiscal year. Average sale price increased by 6.4% year-over-year to ¥23,626 thousand (approximately $174 thousand); and

•

nine units of condominium building deliveries in the fiscal year ended June 30, 2022, up from four units delivered in the prior fiscal year. Average sale price decreased by 17% year-over-year to ¥147,961 thousand (approximately $1,090 thousand).

The above-noted increases to revenue were offset by:

•

94 units of land deliveries for single-family homes in the fiscal year ended June 30, 2022, down from 102 units delivered in the prior fiscal year. Average sale price decreased by 3% year-over-year to ¥75,129 thousand (approximately $554 thousand due primarily to location of development projects.

Other revenue increased by 29.3% to ¥212,731 thousand (approximately $1,568 thousand) in the fiscal year ended June 30, 2022 from ¥164,497 thousand (approximately $1,212 thousand) in the fiscal year ended June 30, 2021, primarily due to higher miscellaneous sales, including higher property management revenue, real estate brokerage commissions, and higher hotel revenue compared to the prior fiscal year.

Cost of Revenue and Gross Margin

Cost of revenue for real estate development and sales increased by 22.4% year-over-year to ¥11,812,347 thousand (approximately $87,054 thousand), primarily reflecting higher direct costs associated with higher revenue.

Gross margin increased to 17% in the fiscal year ended June 30, 2022, compared to 13.2% in the fiscal year ended June 30, 2021, primarily driven by higher deliveries of condominiums and higher average selling price of land.

Selling, General, and Administrative Expenses and Operating Margin

Selling, general, and administrative expenses were ¥1,786,614 thousand (approximately $13,167 thousand) in the fiscal year ended June 30, 2022, compared to ¥1,033,402 thousand (approximately $7,616 thousand) in the fiscal year ended June 30, 2021. As a percentage of revenue, selling, general, and administrative expenses increased to 12.5% in the fiscal year ended June 30, 2022, from 9.2% in the fiscal year ended June 30, 2021, due to higher indirect costs, including expensed IPO preparation expenses, offset by higher revenue.

As a result, operating income increased by 43% to ¥649,188 thousand (approximately $4,784 thousand) in the fiscal year ended June 30, 2022 from ¥453,647 thousand (approximately $3,343 thousand) in the fiscal year ended June 30, 2021 and operating profit margin increased from 4.5% to 4.0%.

Interest Expense

Interest expense decreased to ¥23,333 thousand (approximately $172 thousand) in the fiscal year ended June 30, 2022 from ¥56,650 thousand (approximately $417 thousand) in the fiscal year ended June 30, 2021, reflecting higher amounts of capitalized interest associated with our increased number of development projects, which offset higher net borrowings and interest incurred.

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Other Income, net

Other income was ¥186,007 thousand (approximately $1,371 thousand) in the fiscal year ended June 30, 2022 compared to other expense of ¥9,770 thousand (approximately $72 thousand) in the fiscal year ended June 30, 2021, due primarily to gain on sale of fixed assets.

Provision for Income Taxes

For the fiscal years ended June 30, 2022 and 2021, we had a tax provision of ¥283,479 thousand (approximately $2,089 thousand) and ¥134,869 thousand (approximately $994 thousand), respectively, which resulted in an overall effective income tax rate of 34.9% and 34.8%, respectively. The overall effective income tax rate was higher in fiscal year 2022 primarily reflecting the impact of deductions and book-tax adjustments.

Profit (Loss)

As a result of the foregoing, our net income attributable to ordinary shareholders increased by 109.4% to ¥528,383 thousand (approximately $3,894 thousand) in the fiscal year ended June 30, 2022 from ¥252,358 thousand (approximately $1,860 thousand) in the fiscal year ended June 30, 2021.

Liquidity and Capital Resources

We believe we have a prudent strategy for company-wide cash management, including controls related to cash outflows for lot purchases and general contractor and subcontractor management as well as access to short-term borrowings and shortened cash conversion cycles related to our land delivery strategy.

As of December 31, 2022, we had ¥388,731 thousand (approximately $2,949 thousand) in cash and deposits as compared to ¥270,699 thousand (approximately $2,054 thousand) as of December 31, 2021. As of June 30, 2022, we had ¥403,108 thousand (approximately $3,058 thousand) in cash and deposits as compared to ¥480,322 thousand (approximately $3,644 thousand) as of June 30, 2021.

We intend to generate cash from the sale of our inventory net of loan release payments on our short-term land bank financing and we intend to re-deploy the net cash generated from the sale of inventory to acquire land and further grow our operations over the next three years.

Our principal uses of capital are land acquisitions, building construction, operating expenses, and payment for routine liabilities. We primarily use funds generated by operations and available borrowings to meet our short-term working capital requirements, and utilize shareholder funding for select growth opportunities when appropriate. We are focused on generating high margins in our development operations and acquiring desirable land positions while maintaining our asset-light land financing strategy that conserves liquidity while allowing us to remain opportunistic in achieving growth in the prime locations across Tokyo and Kanagawa prefecture.

We believe our current liquidity will be sufficient to meet our capital expenditure needs, primarily working capital needs for our real estate development business, in the next 12 months. We employ short-term land loans in the purchases of lots earmarked for buyer homes, which are usually repaid with the cash flows from the land sales to the end buyer within a three-to-five-month period. This short payback period for the land portion of our real estate development business releases liquidity that allows us to complete the subsequent building development without requiring major external financing, such as the equity capital anticipated from the current public offering. We believe the local credit markets in Japan will continue to be accessible and that our financing partners will continue to provide loans in support of our operations as has been the case throughout our history.

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Cash Flows

The following table summarizes our cash flows for the periods and fiscal years indicated:

	Six Months Ended December 31,
(¥ in Thousands)	2022		2021
Cash flows from operating activities:
Net income		167,754		183,150
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		31,271		19,755
Deferred income taxes		22,465		0
Changes in assets and liabilities:
Accounts receivable, net		62,231		(41,500)
Real estate inventory		(519,148)		(1,774,619)
Prepaid and other current assets		(104,407)		56,368
Intangible asset, net		(32,061)		(12,729)
Operating lease		819		(30,741)
Other assets		(15,393)		11,786
Accounts payable		(281,114)		141,862
Customer deposits		20,925		62,363
Accrued expenses and other current liabilities		(147,251)		10,220
Net cash provided by (used in) operating activities		(793,909)		(1,374,085)
Cash flows from investing activities:
Purchases of property and equipment		(1,035,221)		(64,343)
Purchase of investments		(4,126)		0
Proceeds from sale of investments in marketable securities		0		11,111
Other, net-Investing		9,106		(16,231)
Net cash provided by (used in) investing activities		(1,030,241)		(69,463)
Cash flows from financing activities
Proceeds from notes payable		6,345,559		5,649,300
Payments on notes payable		(4,541,496)		(4,466,452)
Other financing – net		0		50,232
Net cash provided by financing activities		1,804,063		1,233,080
Effect of exchange rate change on cash and cash equivalents		5,710		845
Net decrease in cash and cash equivalents		(14,377)		(209,623)
Cash and cash equivalents, beginning of year		403,108		480,322
Cash and cash equivalents, end of year		388,731		270,699

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(¥ in Thousands)	For the Fiscal Year Ended June 30,
	2022			2021
Cash flows from operating activities:
Net income		¥	528,383		¥	252,358
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization			43,945			37,326
Loss on disposal of assets			1,106,677			966
Deferred income taxes			(10,939)			6,766
Changes in assets and liabilities:
Accounts receivable, net			171,985			244,692
Real estate inventory			(4,306,865)			(591,778)
Prepaid and other current assets			62,130			(100,265)
Intangible asset, net			(54,735)			(48,426)
Operating lease			45,966			(804)
Other assets			(59,201)			303,928
Accounts payable			105,567			180,822
Customer deposits			61,928			58,133
Accrued expenses and other current liabilities			(625,720)			(588,373)
Net cash used in operating activities			(2,930,879)			(244,655)
Cash flows from investing activities:
Purchases of property and equipment			(537,294)			(170,231)
Proceeds from sale of property and equipment			510,091			—
Purchase of investments			(3,670)			(10,700)
Proceeds from sale of investments in marketable securities			11,789			42,039
Other – net investing			—			(21,541)
Net cash used in investing activities			(19,084)			(160,433)
Cash flows from financing activities:
Proceeds from notes payable			5,649,300			8,046,791
Payments on notes payable			(2,811,364)			(7,626,187)
Proceeds from ordinary share issuance			14,225			100,000
Proceeds from sale of treasury shares			1,079			—
Other financing – net			(453)			35,000
Net cash provided by financing activities			2,852,787			555,604
Effect of exchange rate change on cash and cash equivalents			19,962			271
Net decrease in cash and cash equivalents			(77,214)			150,787
Cash and cash equivalents, beginning of year			480,322			329,535
Cash and cash equivalents, end of year		¥	403,108		¥	480,322

Operating Activities

Net cash used in operating activities was ¥793,909 thousand (approximately 6,023 thousand) for the six months ended December 31, 2022, compared to ¥1,374,085 thousand (approximately $10,425 thousand) in the prior period. The decrease in net cash used in operating activities was primarily attributable to the decrease in the condominium inventories.

Net cash used in operating activities was ¥2,930,879 thousand (approximately $22,236 thousand) for the fiscal year ended June 30, 2022, compared to ¥244,655 thousand (approximately $1,856 thousand) in the

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fiscal year ended June 30, 2021. The increase in net cash used in operating activities was primarily attributable to a higher amount of cash used for homebuilding inventory, particularly land for condominiums, partially offset by higher net income.

Investing Activities

Net cash used by investing activities was ¥1,030,241 thousand (approximately $7,816 thousand) for the six months ended December 31, 2022, compared to ¥69,463 thousand (approximately $527 thousand) in the prior period. The increase in net cash used by investing activities was primarily attributable to new investment in our own new hotel and condominiums.

Net cash used in investing activities was ¥19,084 thousand (approximately $145 thousand) for the fiscal year ended June 30, 2022, compared to ¥160,433 thousand (approximately $1,217 thousand) in the fiscal year ended June 30, 2021. The decrease in net cash used by investing activities was primarily attributable to lower purchases of property, plant, and equipment and intangible assets associated with investments in our hotel operation business and the sale of property and equipment in the fiscal year ended June 30, 2022 resulting in proceeds of ¥510,091 as compared to no similar sale in the fiscal year ended June 30, 2021, offset by lower proceeds from sales of investment securities compared to the prior year.

Financing Activities

Net cash provided by financing activities was ¥1,804,063 thousand (approximately $13,687 thousand) for the six months ended December 31, 2022, compared to ¥1,233,080 thousand (approximately $9,355 thousand) in the prior period. The increase in net cash provided by financing activities was primarily attributable to an increase in financing for our own new hotel and condominiums.

Net cash provided by financing activities was ¥2,852,787 thousand (approximately $21,643 thousand) for the fiscal year ended June 30, 2022, compared to ¥555,604 thousand (approximately $4,215 thousand) in the fiscal year ended June 30, 2021. The increase in net cash provided by financing activities was primarily attributable to lower debt repayments in the fiscal year ended June 30, 2022 compared to the prior year.

Credit Facilities

As of December 31, 2022 and June 30, 2022, we had total short-term land loans of ¥7,848,580 thousand (approximately $59,545 thousand) and ¥6,361,415 thousand (approximately $48,262 thousand), respectively, with various lenders. These borrowings are collateralized by the land parcels we buy and in turn sell to the ultimate customers. The maturities on these short-term land loans were up to 12 months with a cost of capital ranging from 1.5% to 3.2% annually.

Our long-term borrowings, excluding the current portion, as of December 31, 2022 and June 30, 2022, consisted of outstanding principal balances of ¥2,548,442 thousand (approximately $19,334 thousand) and ¥2,231,544 thousand (approximately $16,930 thousand), respectively, at a cost of capital ranging from 1.5% to 5.5% and 3.5% annually, respectively.

As of June 30, 2022 and 2021, we had total short-term land loans of ¥6,361,415 thousand (approximately $48,262 thousand) and ¥4,451,075 thousand (approximately $33,769 thousand), respectively, with various lenders. These borrowings are collateralized by the land parcels we buy and in turn sell to the ultimate customers. The maturities on these short-term land loans were up to 12 months with a cost of capital ranging from 1.5% to 3.2% annually.

Our long-term borrowings, excluding the current portion, for the fiscal years ended June 30, 2022 and 2021 consisted of aggregate principal balances of ¥2,231,544 thousand (approximately $16,930 thousand) and ¥1,303,948 thousand (approximately $9,893 thousand), respectively, at a cost of capital ranging from 2.4% to 3.5% annually.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of December 31, 2022 or June 30, 2022 and 2021.

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Contractual Obligations

Scheduled contractual obligations required for the five years following December 31, 2022 and thereafter are as follows:

(in thousands of ¥)	Payments Due by Period Subsequent to December 31, 2022
	2023		2024		2025		2026		2027		Thereafter		Total
Short Term Land Borrowings		6,568,576		0		0		0		0		0		6,568,576
Long-term debt, including current portion		1,280,004		530,221		783,237		69,594		64,801		1,100,589		3,828,446
Interest on long-term debt		61,441		49,076		27,673		26,023		24,521		237,671		426,406
Operating lease obligations		71,819		67,470		50,251		44,922		0		0		234,462
Finance lease obligations		25,084		21,191		17,359		11,536		6,434		1,026		82,630
Total		8,006,924		667,958		878,520		152,076		95,755		1,339,287		11,140,521

Quantitative and Qualitative Disclosure About Market Risk

Market Risk

We are exposed to market risks in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily related to interest rates changes.

Interest Rate Risk

Our operations are interest rate sensitive. As overall housing demand is adversely affected by increases in interest rates, a significant increase in interest rates may negatively affect the ability of homebuyers to secure adequate financing. Higher interest rates could adversely affect our revenue, gross margin, and net income. We do not enter into, nor do we intend to enter into in the future, derivative financial instruments for trading or speculative purposes to hedge against interest rate fluctuations. Given that we operate primarily in Japan where interest rates have remained low for many decades and the current consensus macro view is for rates to remain low in the foreseeable future, we do not anticipate steeply increasing interest rates as a probable event that would adversely impact our operations.

Foreign Currency Exchange Risk

Our functional currency is the Japanese yen, whereas our foreign wholly-owned subsidiaries are denominated in other currencies. Our consolidated results of operations and cash flows are, therefore, subject to fluctuations due to changes in foreign currency exchange rates and may be adversely affected in the future due to changes in foreign exchange rates. A hypothetical 10% change in foreign currency exchange rates may result in a material impact on our consolidated financial statements. To date, we have not had a formal hedging program with respect to foreign currencies, but we may do so in the future if our exposure to foreign currencies should become more significant.

Credit Risk

We hold cash in bank deposits financial institutions in Japan which are insured by the Deposit Insurance Corporation of Japan subject to certain limitations. We have not experienced any losses on such accounts and believe they are not exposed to any significant credit risk on cash and cash equivalents.

Critical Accounting Policies and Estimates

U.S. generally accepted accounting principles (“U.S. GAAP”) require us to make estimates and assumptions that affect our reported amounts in the consolidated financial statements and accompanying notes. Our estimates are based on (i) currently known facts and circumstances, (ii) prior experience, (iii) assessments of probability, (iv) forecasted financial information, and (v) assumptions that management

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believes to be reasonable but that are inherently uncertain and unpredictable. We use our best judgment when measuring these estimates, and if warranted, use external advice. On an ongoing basis, we review the accounting policies, assumptions, estimates, and judgments to ensure that our financial statements are presented fairly and in accordance with U.S. GAAP. However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material. In times of economic disruption when uncertainty regarding future economic conditions is heightened, these estimates and assumptions are subject to greater variability.

For a discussion of all our significant accounting policies, including our critical accounting estimates and policies, refer to “Note 2. Summary of Significant Accounting Policies” of our consolidated financial statements. We believe that the accounting estimates and assumptions described below involve significant subjectivity and judgment, and changes to such estimates or assumptions could have a material impact on our financial condition or operating results. Therefore, we consider an understanding of the variability and judgment required in making these estimates and assumptions to be critical in fully understanding and evaluating our reported financial results.

We believe the following critical accounting estimates reflect the more significant judgments and estimates used in the preparation of our consolidated financial statements.

Revenue Recognition

In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standard Update (“ASU”) 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). ASU 2014-09 provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most previous revenue recognition guidance, including industry-specific guidance. ASU 2014-09 requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This update creates a five-step model that requires entities to exercise judgment when considering the terms of the contract(s) which include (i) identifying the contract(s) with the customer, (ii) identifying the separate performance obligations in the contract, (iii) determining the transaction price, (iv) allocating the transaction price to the separate performance obligations, and (v) recognizing revenue when each performance obligation is satisfied. Subsequent to the issuance of ASU 2014-09, the FASB has issued several ASUs such as ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, and ASU 2017-05, Other Income — Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets, among others. These ASUs do not change the core principle of the guidance stated in ASU 2014-09, but are intended to clarify and improve operability of certain topics included within the revenue standard. These ASUs had the same effective date and transition requirements as ASU 2014-09. We have adopted the full retrospective method to all contracts as of the beginning of the earliest period presented. The adoption of the standard did not have a material effect on our consolidated financial statements.

We generate revenue primarily from real estate sales, which includes the sale and development of land parcels and their respective single-family home and condominium buildings. The remaining sources of revenue, deemed immaterial as a percentage of total revenue or operating profits, consist of leasing, property and building management, and other miscellaneous revenue streams.

Real Estate Inventory and Cost of Home Sales

Cost of revenue includes lot purchase costs and carrying costs associated with each lot, construction costs of each home, capitalized interest, building permits and other local municipality-related costs, internal and external realtor commissions and warranty costs (both incurred and estimated to be incurred). Land, development, and other allocated costs, including interest and property taxes, incurred during development and construction are capitalized and expensed to cost of sales when the single-family home or condominium is closed and revenue is recognized.

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Inventories include the costs of direct land acquisition, land development, construction, capitalized interest, real estate taxes, and direct overhead costs incurred related to land acquisition and development and single-family home and condominium construction. Indirect overhead costs are charged to selling, general, and administrative expenses as incurred. Land and development costs are typically allocated to individual lots on a pro rata basis based on the number of lots in the development, and the costs of lots are transferred to construction work in progress when construction begins. Sold units are expensed on a specific identification basis as cost of contract revenue earned. Cost of contract revenue earned for single-family homes and condominiums closed includes the specific construction costs of each single-family home or condominium and all applicable land acquisition, land development, and related costs allocated to each residential lot. Inventories are carried at the lower of accumulated cost or net realizable value.

We review the performance and outlook of our inventories for indicators of potential impairment on a quarterly basis. In addition to considering market and economic conditions, we assess current sales absorption levels and recent sales’ profitability. We look for instances where sale prices for a single-family home or condominium in backlog or potential sale prices for a future sold single-family home or condominium would be at a level that results in a negative gross margin. One impairment charge of ¥18,092 thousand (approximately $133 thousand) was recognized in the fiscal year ended June 30, 2021 for our condominium asset located in Meguro district of Tokyo. No impairments were recognized in the six months ended December 31, 2022 or the fiscal year ended June 30, 2022.

Recent Accounting Pronouncements

See “Note 2. Summary of Significant Accounting Policies” to our consolidated financial statements included elsewhere in this prospectus.

Internal Controls and Procedures

We are not currently required to comply with the SEC’s rules implementing Section 404 and are therefore not required to make a formal assessment of the effectiveness of our internal control over financial reporting for that purpose. As a public company, we are required to comply with the SEC’s rules implementing Section 302 of the Sarbanes Oxley Act of 2002, which require our management to certify financial and other information in our annual reports and provide an annual management report on the effectiveness of our internal control over financial reporting. Though we will be required to disclose material changes made to our internal controls and procedures on a yearly basis, we will not be required to make our first annual assessment of our internal control over financial reporting pursuant to Section 404 until the fiscal year following our first annual report required to be filed with the SEC. We will not be required to have our independent registered public accounting firm attest to the effectiveness of our internal control over financial reporting until our first annual report subsequent to our ceasing to be an “emerging growth company” within the meaning of Section 2(a)(19) of the Securities Act.

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BUSINESS

Our Mission and Vision

•

Our Mission: Our mission is to serve our customers by offering stylish, safe, and luxurious living and to adopt the Kaizen (continuous improvement) approach to improve our operations.

•

Overview

We utilize a homebuilding model designed to minimize risks, in which we typically identify customers for our single-family homes before acquiring the land and commencing construction and build our condominiums in highly-marketable locations, resulting in an aggregate of only four cancelations during the six months ended December 31, 2022 and the fiscal years ended June 30, 2022 and 2021. When developing a single-family home or condominium, we typically deliver the land to the customer before starting the construction of the building and deliver the completed building to the customer six to 12 months after the land delivery, in order to quickly recover our payment for the land. The tables below summarize the units of land and building we delivered during the six months ended December 31, 2022 and fiscal years ended June 30, 2022 and 2021.

	Six Months Ended December 31, 2022
Type	Land Deliveries (Units)		Building Deliveries (Units)
Single-family homes		36		43
Condominiums		5		3

	Fiscal Year Ended June 30, 2022				Fiscal Year Ended June 30, 2021
Type	Land Deliveries (Units)		Building Deliveries (Units)		Land Deliveries (Units)		Building Deliveries (Units)
Single-family homes		94		81		102		50
Condominiums		12		9		4		4

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To diversify our revenue streams and supplement our real estate development and sales, we have expanded into other businesses related to real estate since 2018. During the six months ended December 31, 2022 and the fiscal years ended June 30, 2022 and 2021, we operated five, four, and four hotels in Tokyo, respectively. In February 2023, we started to operate a sixth hotel in Tokyo. During the six months ended December 31, 2022 and the fiscal years ended June 30, 2022 and 2021, we leased apartment units in eight, 17, and 17 apartment buildings to 29, 77, and 118 individual customers, respectively.

For the six months ended December 31, 2022 and the fiscal years ended June 30, 2022 and 2021, we had total revenue of JPY7,359,750 thousand (approximately $55,836 thousand), JPY14,321,186 thousand (approximately $108,650 thousand), and JPY11,255,277 thousand (approximately $85,390 thousand), respectively, and profit of JPY164,117 thousand (approximately $1,245 thousand), JPY493,995 thousand (approximately $3,748 thousand), and JPY276,802 thousand (approximately $2,100 thousand), respectively. Revenue generated from real estate development and sales accounted for approximately 98.7%, 98.5%, and 98.5% of our total revenue for those periods, respectively. Revenue derived from other sources accounted for approximately 1.3%, 1.5%, and 1.5% of our total revenue for those periods, respectively.

Our Competitive Strengths

We believe the following competitive strengths are essential for our success and differentiate us from our competitors:

Growing developer of luxury residential properties in prime locations across Tokyo and Kanagawa prefecture

We are a growing real estate developer in Japan. Our revenue has increased approximately 218% in the past 10 years. Since our establishment, we have strategically focused on the development of luxury residential properties, including single-family homes and condominiums, and gradually expanded our product and service offerings into hotel operations and residential leasing. We also launched our Glocaly platform in October 2021. Our business model covers the full cycle of luxury residential property development, from land acquisitions and design to construction and delivery.

The single-family homes and condominiums we develop are mainly located in central and southern Tokyo, which are considered prime locations across Tokyo and Kanagawa prefecture. We delivered an aggregate of 131 single-family homes and 13 condominiums in the two fiscal years ended June 30, 2022, and 43 single-family homes and three condominiums in the six months ended December 31, 2022,and we had 50 single-home projects and five condominium projects ongoing as of December 31, 2022. In addition to the prime locations of the properties we develop, we have been recognized for the quality and design of our products. Specifically, we received the Good Design Award for our Excellence Building Futako-Tamagawa issued by the Japan Institute of Design Promotion in 2020.

Easy access to land parcels as a result of our long operating history and strong brand awareness

As a growing real estate developer, we strategically focus on prime locations in Tokyo and Kanagawa prefecture. In identifying suitable land parcels, we consider various factors, including the supply and demand dynamics in local areas, preferences of our target individual and institutional customers, land prices, and proximity to downtown and convenient transportation. We generally acquire land parcels from private landowners through the introduction by real estate agencies. These real estate agencies are inclined to refer opportunities to us because of our good reputation and capabilities and the business relationships we have built over the years while working with them, many of which have cooperated with us for over 15 years. As a result, we are generally able to avoid excessive bidding pressures, as the agencies that we work with know the types of land parcels that are best suited to our preferences and they proactively choose to source such land parcels to us, which gives us advantages over competitors.

In addition, our “Lead Real” brand is widely recognized in Tokyo and Kanagawa prefecture. We have developed more than 1,000 luxury residential properties since our inception in 2001 and this strong track record has helped us attract partners and build trust in our brand. In particular, Mr. Eiji Nagahara, our president, chief executive officer, and representative director, is highly respected in the Tokyo real estate development industry for the quality and design of our products. Leveraging Mr. Nagahara’s decades of

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goodwill and relationships built over his career, together with the strong brand awareness of our brand, we enjoy easy access to land parcels in our target areas.

Strong project oversight and execution capabilities

We demonstrate our effective decision-making capabilities and efficient execution capabilities in managing our development projects. In addition to basic compliance with zoning, building codes, and safety, we staff personnel at each project to provide us with daily reports on key risks, progress, and issues. We implement a system of checks and balances for risk control purposes and we refrain from transacting in high-risk businesses that we determine to be speculative in nature, with uncertain end demand or in unfavorable locations. In addition, we utilize an outsourcing model with trusted contractors who directly handle labor and supply hurdles.

We have strong execution capabilities as a result of the ways we develop and sell our single-family homes and condominiums. For our single-family homes, individual customers are identified before we acquire the land and commence construction, so we do not experience any pressure on holding inventory as a result of such a lower-risk model. For our condominiums, we typically build in highly-marketable locations, which makes it easy to find buyers.

Experienced management team with industrial expertise

Our executive officers, most of whom have worked with our company for over 10 years, have on average over 20 years of experience in the Japanese real estate development industry and considerable strategic planning and business management expertise. Our president, chief executive officer, and representative director, Mr. Eiji Nagahara, has more than 25 years of experience in developing single-family homes and condominiums in Japan.

Our Growth Strategies

We intend to develop our business and strengthen brand loyalty by implementing the following strategies:

Target prime real estate opportunities across the Kanto Region to continue to grow

Our growth will primarily focus on new prime real estate opportunities in Tokyo and Kanagawa prefecture. Currently, our single-family homes and condominium are primarily located in central and southern Tokyo, which are considered to be prime locations. We will continue to leverage our strong brand name and long-standing relationships with other industry participants to further develop properties in these areas. In addition, we plan to expand to prime real estate locations across the Kanto Region, which encompasses seven prefectures of Japan, including Gunma, Tochigi, Ibaraki, Saitama, Tokyo, Chiba, and Kanagawa, in order to further grow our real estate development and sales.

Further strengthen and leverage our relationships with local real estate agencies

Relationships with local real estate agencies are essential to our business operation. We primarily rely on real estate agencies to identify land and development sites for acquisition as well as customers. We will further strengthen our relationships with local real estate agencies which we have been cooperating with as well as establish relationships with new local real estate agencies in existing and new markets. We intend to further leverage our relationships with local real estate agencies to facilitate our access to development land parcels and customers.

Continue to develop and improve our Glocaly platform

Our interactive media platform, Glocaly, has the potential to expand into a multilingual and seamless transaction platform targeting both domestic and foreign buyers for transacting condominiums in Japan. We will continue to develop and improve the features of our Glocaly platform to make them more helpful and friendly to users of our platform. In addition, as electronic transactions of real estate became permissible under Japanese law starting from May 2022, we expect to have the first-mover advantage by enabling electronic

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real estate transactions on Glocaly and providing features such as the electronic know your customer (“eKYC”) process, online contracting and digital legal documentations, and artificial intelligence-powered chatbots in more than 100 languages to facilitate the transactions.

Further expand our operations overseas

We will continue to expand our operations overseas. We have been leasing apartment building units to individual customers in Dallas, Texas since 2020 and Mr. Eiji Nagahara has built personal relationships with landowners and local builders in Texas over the years. In the long term, we plan to acquire land or residential properties in Dallas as well as other cities and states in the U.S. and further expand our operations in the U.S. through acquisition and joint ventures. Along with our plan to expand our Glocaly platform to Hong Kong, we will further expand our footprints in Hong Kong, including partnering with local agencies. We will also continue to expand our operations in Southeast Asia, especially the Philippines. We chose the Philippines as our focus of expansion in Southeast Asia because it is a location attractive to Japanese investors, and we expect to be able to acquire lands in the Philippines at a relatively low price. We do not plan to use the net proceeds from this offering to fund these long-term expansion plans, and have not entered into any binding agreement for any acquisition nor identified any definite acquisition target. Our expansion plans are subject to, among other things, our ability to obtain sufficient capital from other sources to execute such plans, of which there can be no assurance. See “Risk Factors — Risks Related to Our Business and Industry — Our substantial indebtedness could materially and adversely affect our business, financial condition, results of operations, and cash flows.”

Expansion into different countries subjects us to risks associated with entry and operations in those countries. See “Risk Factors — Risks Related to Our Business and Industry — We may be unsuccessful in expanding and operating our business internationally, which could adversely affect our results of operations.”

Our Business Model

We currently generate revenue from the following principal sources:

•

Real Estate Development and Sales. We develop and sell luxury residential properties, including single-family homes and condominiums, across Tokyo and Kanagawa prefecture.

•

Other Sources. We operate hotels in Tokyo and lease apartment building units to individual customers in Japan and Dallas, Texas.

The following tables presents our revenue for the six months ended December 31, 2022 and the fiscal years ended June 30, 2022 and 2021. See also “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Results of Operations.”

	Revenue (Japanese Yen in Thousands)
	Six Months Ended December 31, 2022
Real Estate Development and Sales		7,264,887
Other		94,863
Total		7,359,750

	Revenue (Japanese Yen in Thousands)
	Fiscal Year Ended June 30,
	2022		2021
Real Estate Development and Sales		14,108,455		11,090,778
Other		212,731		164,497
Total		14,321,186		11,255,275

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Real Estate Development and Sales

Our real estate development and sales business model is based on our proven track record of identifying and developing prime land and building high-quality residential properties. We have a highly-qualified team, whose skills and knowledge span across all key areas of real estate development and operations, including, among others, land identification and acquisition, government licensing and relations, project management, and commercialization and sales. Our experienced team, together with the standardization of our processes and our sophisticated management tools, enables us to consistently launch new projects, as well as successfully undertake a large number of projects at the same time.

We manage and actively participate in every aspect of our luxury residential property development, from search and acquisition of the land, to product design, marketing, sales, construction management, purchase of supplies, post-sale services, and financial planning, with the assistance of specialized companies at each development stage. While the decisions and control of these functions remain with us, actual execution of certain functions, such as architecture and construction, is entrusted to specialized companies under our close supervision. The specialized companies we work with include real estate agencies, which help us identify land and development sites for acquisition and customers for our luxury residential properties, and design firms and construction companies, to which we outsource the design work and construction for our luxury residential property projects. We do not work with financing companies to obtain financing for our customers. For details about our relationships with real estate agencies, design firms, and construction companies, see “— Our Project Development Process — Opportunity Identification and Land Acquisition,” “— Our Project Development Process—Project Planning and Design,” and “— Our Project Development Process — Project Construction and Management,” respectively. This business model enables us to achieve excellence in production for each location and segment, ensure effective working capital management, and choose the best possible partner for each aspect of the work, all while keeping an organizational structure that can adapt to changes in business volume.

The following chart outlines various phases of development of our luxury residential project projects, and our key activities with respect to each phase. See “— Our Project Development Process” for more details of the process of our property development.

Luxury Residential Properties

Single-family Homes

We develop and sell of single-family homes to individual customers, primarily in Tokyo and Kanagawa prefecture. Our target individual customers are wealthy family buyers who look for luxury single-family homes as primary residence in Tokyo and Kanagawa prefecture.

The entire process of a given single-family home project, from land acquisitions to delivery of the completed project, typically takes approximately 10 months.

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The following tables show the key operating results for our development and sales of single-family homes for the six months ended December 31, 2022 and the fiscal years ended June 30, 2022 and 2021, respectively:

			For the six months ended December 31, 2022
Number of projects at the beginning of the period			64
New orders added during the period			30
Delivered projects(1) during the period			43
Number of projects at the end of the period			51
Average sales price for delivered projects during the period (including land)			JPY99,093 thousand

	For the fiscal year ended June 30, 2022	For the fiscal year ended June 30, 2021
Number of projects at the beginning of the period	79	55
New orders added during the period	66	74
Delivered projects(1) during the period	81	50
Number of projects at the end of the period	64	79
Average sale price for delivered projects during the period (including land)	JPY98,752 thousand	JPY99,596 thousand

Note:

(1)

Delivered projects refer to projects for which both the land parcels and building have been delivered.

	Ordinary Shares Purchased				Total Consideration					Average Price Per Ordinary Share			Average Price Per ADS
Over-allotment option not exercised	Number		Percent		Amount			Percent		Average Price Per Ordinary Share			Average Price Per ADS
Existing Shareholders		12,498,900		91.6%		$	2,610,917		24.6%		$	0.21		$	0.21
New Investors		1,143,000		8.4%		$	8,001,000		75.4%		$	7.00		$	7.00
Total		13,641,900		100.0%		$	10,611,917		100.0%		$	0.78		$	0.78

	Ordinary Shares Purchased				Total Consideration					Average Price Per Ordinary Share			Average Price Per ADS
Over-allotment option exercised in full	Number		Percent		Amount			Percent		Average Price Per Ordinary Share			Average Price Per ADS
Existing Shareholders		12,498,900		90.5%		$	2,610,917		22.1%		$	0.21		$	0.21
New Investors		1,314,450		9.5%		$	9,201,150		77.9%		$	7.00		$	7.00
Total		13,813,350		100.0%		$	11,812,06		100.0%		$	0.86		$	0.86

	Page
PROSPECTUS SUMMARY		2
RISK FACTORS		10
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS		31
ENFORCEABILITY OF CIVIL LIABILITIES		32
USE OF PROCEEDS		33
DIVIDEND POLICY		34
CAPITALIZATION		35
DILUTION		36
CORPORATE HISTORY AND STRUCTURE		38
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		40
BUSINESS		54
REGULATIONS		71
MANAGEMENT		75
PRINCIPAL SHAREHOLDERS		79
RELATED PARTY TRANSACTIONS		81
DESCRIPTION OF SHARE CAPITAL		82
DESCRIPTION OF AMERICAN DEPOSITARY SHARES		89
SHARES ELIGIBLE FOR FUTURE SALE		97
JAPANESE FOREIGN EXCHANGE CONTROLS AND SECURITIES REGULATIONS		99
MATERIAL INCOME TAX CONSIDERATION		101
UNDERWRITING		109
EXPENSES RELATING TO THIS OFFERING		114
LEGAL MATTERS		114
EXPERTS		114
WHERE YOU CAN FIND ADDITIONAL INFORMATION		114
INDEX TO FINANCIAL STATEMENTS		F-1

	Single-family Home Projects (Example 1)			Single-family Home Projects (Example 2)