|
Japan
(State or other jurisdiction of incorporation or organization) |
| |
8000
(Primary Standard Industrial Classification Code Number) |
| |
Not Applicable
(I.R.S. Employer Identification No.) |
|
|
Barbara A. Jones
Greenberg Traurig, LLP 1840 Century Park East, Suite 1900 Los Angeles, CA 90067 Tel: (310) 586-7773 Fax: (310) 586-0273 |
| |
Koji Ishikawa
Greenberg Traurig Tokyo Law Offices Meiji Yasuda Seimei Building, 14F 2-1-1 Marunouchi, Chiyoda-ku Tokyo 100-0005, Japan Tel: +81(0)3-4510-2200 Fax: +81(0)3-4510-2201 |
| |
Barry Grossman
Sarah Williams Jessica Yuan Ellenoff Grossman & Schole LLP 1345 Avenue of the Americas New York, New York 10105 Tel: (212) 370-1300 Fax: (212) 370-7889 |
|
| | ||||||||||||||
Title of each class of
securities to be registered |
| | |
Proposed maximum
aggregate offering price(3) |
| | |
Amount of
registration fee |
| ||||||
Common Shares, no par value(1)(2)
|
| | | | $ | 20,000,000.00 | | | | | | $ | 2,182.00 | | |
| | |
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(in thousands,
except earnings per share data) |
| |
Six months ended June 30,
|
| |
Year ended December 31,
|
| ||||||||||||||||||||||||||||||
|
2020($)
|
| |
2020(¥)
|
| |
2019(¥)
|
| |
2019($)
|
| |
2019(¥)
|
| |
2018(¥)
|
| ||||||||||||||||||||
| | | | | | | | |
(Unaudited)
|
| | | | | | | | | | | | | | | | | | | | ||||||||
Consolidated Statement of Income Information:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Revenues: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Relaxation Salons
|
| | | $ | 12,476 | | | | | ¥ | 1,344,503 | | | | | ¥ | 2,010,506 | | | | | $ | 35,860 | | | | | ¥ | 3,864,656 | | | | | ¥ | 3,348,042 | | |
Digital Preventative Healthcare
|
| | | | 109 | | | | | | 11,774 | | | | | | 21,025 | | | | | | 405 | | | | | | 43,608 | | | | | | 85,093 | | |
Total revenue
|
| | | | 12,585 | | | | | | 1,356,277 | | | | | | 2,031,531 | | | | | | 36,265 | | | | | | 3,908,264 | | | | | | 3,433,135 | | |
Cost of revenues and operating expenses:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cost of revenues
|
| | | | 11,777 | | | | | | 1,269,220 | | | | | | 1,533,819 | | | | | | 27,443 | | | | | | 2,957,506 | | | | | | 2,476,267 | | |
Selling, general and administrative expenses
|
| | | | 4,838 | | | | | | 521,364 | | | | | | 411,717 | | | | | | 8,090 | | | | | | 871,862 | | | | | | 842,822 | | |
Impairment loss on long-lived assets
|
| | | | — | | | | | | — | | | | | | 23,604 | | | | | | 413 | | | | | | 44,546 | | | | | | 40,778 | | |
Total cost of revenues and operating expenses
|
| | | | 16,615 | | | | | | 1,790,584 | | | | | | 1,969,140 | | | | | | 35,946 | | | | | | 3,873,914 | | | | | | 3,359,867 | | |
Operating income (loss)
|
| | | $ | (4,030) | | | | | ¥ | (434,307) | | | | | ¥ | 62,391 | | | | | $ | 319 | | | | | ¥ | 34,350 | | | | | ¥ | 73,268 | | |
Other income (expenses): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Dividend income
|
| | | | — | | | | | | 2 | | | | | | 2 | | | | | | ― | | | | | | 2 | | | | | | 2 | | |
Interest income
|
| | | | 6 | | | | | | 674 | | | | | | 556 | | | | | | 12 | | | | | | 1,336 | | | | | | 785 | | |
Interest expense
|
| | | | (56) | | | | | | (6,076) | | | | | | (7,155) | | | | | | (126) | | | | | | (13,591) | | | | | | (15,485) | | |
Gain from bargain purchases
|
| | | | 15 | | | | | | 1,624 | | | | | | 4,343 | | | | | | 60 | | | | | | 6,487 | | | | | | 33,218 | | |
Other, net
|
| | | | 132 | | | | | | 14,142 | | | | | | 5,057 | | | | | | 39 | | | | | | 4,153 | | | | | | 133 | | |
(in thousands,
except earnings per share data) |
| |
Six months ended June 30,
|
| |
Year ended December 31,
|
| ||||||||||||||||||||||||||||||
|
2020($)
|
| |
2020(¥)
|
| |
2019(¥)
|
| |
2019($)
|
| |
2019(¥)
|
| |
2018(¥)
|
| ||||||||||||||||||||
| | | | | | | | |
(Unaudited)
|
| | | | | | | | | | | | | | | | | | | | ||||||||
Total other income (expenses)
|
| | | | 97 | | | | | | 10,366 | | | | | | 2,803 | | | | | | (15) | | | | | | (1,613) | | | | | | 18,653 | | |
Income tax expense
|
| | | | 177 | | | | | | 19,030 | | | | | | 11,429 | | | | | | 148 | | | | | | 15,961 | | | | | | 25,252 | | |
Equity in earnings (loss) of investment
|
| | | | — | | | | | | — | | | | | | 280 | | | | | | 5 | | | | | | 559 | | | | | | (359) | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income (loss)
|
| | | $ | (4,110) | | | | | ¥ | (442,971) | | | | | ¥ | 54,045 | | | | | $ | 161 | | | | | ¥ | 17,335 | | | | | ¥ | 66,310 | | |
Net earnings (loss) per share: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic
|
| | | $ | (1.02) | | | | | ¥ | (110.12) | | | | | ¥ | 14.72 | | | | | $ | 0.04 | | | | | ¥ | 4.63 | | | | | ¥ | 18.06 | | |
Diluted
|
| | | $ | (1.02) | | | | | ¥ | (110.12) | | | | | ¥ | 12.86 | | | | | $ | 0.04 | | | | | ¥ | 4.06 | | | | | ¥ | 14.04 | | |
(in thousands, except number of salons, sales
per customer, repeat ratio, and operation ratio) |
| |
Six months ended June 30,
|
| |
Year ended December 31,
|
| ||||||||||||||||||||||||||||||
|
2020($)
|
| |
2020(¥)
|
| |
2019(¥)
|
| |
2019($)
|
| |
2019(¥)
|
| |
2018(¥)
|
| ||||||||||||||||||||
Other Operating Data: | | | | | | | | ||||||||||||||||||||||||||||||
Financial expense & income(1)
|
| | | $ | (50) | | | | | ¥ | (5,400) | | | | | ¥ | (6,597) | | | | | $ | (114) | | | | | ¥ | (12,253) | | | | | ¥ | (14,698) | | |
Adjusted EBITDA(2)
|
| | | | (3,472) | | | | | | (374,224) | | | | | | 118,049 | | | | | | 1,292 | | | | | | 139,301 | | | | | | 179,997 | | |
CAPEX−paid-out cash basis(3)
|
| | | | 1,181 | | | | | | 127,271 | | | | | | 9,674 | | | | | | 210 | | | | | | 22,675 | | | | | | 110,386 | | |
CAPEX−paid-out cash plus future payment obligation basis(3)
|
| | | | 1,835 | | | | | | 197,721 | | | | | | 104,775 | | | | | | 695 | | | | | | 74,897 | | | | | | 222,278 | | |
Number of salons
|
| | | | | | | | | | 289 | | | | | | 270 | | | | | | | | | | | | 283 | | | | | | 263 | | |
Sales per customer(4)
|
| | | $ | 57.85 | | | | | ¥ | 6,234 | | | | | ¥ | 5,968 | | | | | $ | 56.27 | | | | | ¥ | 6,064 | | | | | ¥ | 5,914 | | |
Repeat ratio(5)
|
| | | | | | | | | | 81.16% | | | | | | 80.63% | | | | | | | | | | | | 81.72% | | | | | | 82.39% | | |
Operation ratio(6)
|
| | | | | | | | | | 40.79% | | | | | | 50.42% | | | | | | | | | | | | 50.36% | | | | | | 49.71% | | |
(in thousands, except adjusted EBITDA
margin) |
| |
As of June 30,
|
| |
As of December 31,
|
| ||||||||||||||||||||||||||||||
|
2020($)
|
| |
2020(¥)
|
| |
2019(¥)
|
| |
2019($)
|
| |
2019(¥)
|
| |
2018(¥)
|
| ||||||||||||||||||||
Reconciliation of non-GAAP measures:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income (loss)
|
| | | $ | (4,110) | | | | | ¥ | (442,971) | | | | | ¥ | 54,045 | | | | | $ | 161 | | | | | ¥ | 17,335 | | | | | ¥ | 66,310 | | |
Dividend income and interest income
|
| | | | (6) | | | | | | (676) | | | | | | (558) | | | | | | (12) | | | | | | (1,338) | | | | | | (787) | | |
Interest expense
|
| | | | 56 | | | | | | 6,076 | | | | | | 7,155 | | | | | | 126 | | | | | | 13,591 | | | | | | 15,485 | | |
Gain from bargain purchases
|
| | | | (15) | | | | | | (1,624) | | | | | | (4,343) | | | | | | (60) | | | | | | (6,487) | | | | | | (33,218) | | |
Other, net
|
| | | | (132) | | | | | | (14,142) | | | | | | (5,057) | | | | | | (39) | | | | | | (4,153) | | | | | | (133) | | |
Income tax expense
|
| | | | 177 | | | | | | 19,030 | | | | | | 11,429 | | | | | | 148 | | | | | | 15,961 | | | | | | 25,252 | | |
Equity in earnings (loss) of investment
|
| | | | — | | | | | | — | | | | | | (280) | | | | | | (5) | | | | | | (559) | | | | | | 359 | | |
Operating income
|
| | | $ | (4,030) | | | | | ¥ | (434,307) | | | | | ¥ | 62,391 | | | | | $ | 319 | | | | | ¥ | 34,350 | | | | | ¥ | 73,268 | | |
Depreciation and amortization
|
| | | | 307 | | | | | | 33,105 | | | | | | 22,793 | | | | | | 428 | | | | | | 46,174 | | | | | | 44,267 | | |
Losses on sales of directly-operated
salons to franchises |
| | | | 1 | | | | | | 65 | | | | | | 8,721 | | | | | | 89 | | | | | | 9,600 | | | | | | 4,057 | | |
Losses on disposal of property and equipment, net and other intangible assets, net
|
| | | | 250 | | | | | | 26,913 | | | | | | 540 | | | | | | 43 | | | | | | 4,631 | | | | | | 17,627 | | |
(in thousands, except adjusted EBITDA
margin) |
| |
As of June 30,
|
| |
As of December 31,
|
| ||||||||||||||||||||||||||||||
|
2020($)
|
| |
2020(¥)
|
| |
2019(¥)
|
| |
2019($)
|
| |
2019(¥)
|
| |
2018(¥)
|
| ||||||||||||||||||||
Impairment loss on long-lived assets
|
| | | | — | | | | | | — | | | | | | 23,604 | | | | | | 413 | | | | | | 44,546 | | | | | | 40,778 | | |
Adjusted EBITDA
|
| | | $ | (3,472) | | | | | ¥ | (374,224) | | | | | ¥ | 118,049 | | | | | $ | 1,292 | | | | | ¥ | 139,301 | | | | | ¥ | 179,997 | | |
Adjusted EBITDA margin(7)
|
| | | | (27.6)% | | | | | | (27.6)% | | | | | | 5.8% | | | | | | 3.6% | | | | | | 3.6% | | | | | | 5.2% | | |
(in thousands)
|
| |
As of June 30,
|
| |
As of December 31,
|
| ||||||||||||||||||||||||
| | |
2020($)
|
| |
2020(¥)
|
| |
2019($)
|
| |
2019(¥)
|
| |
2018(¥)
|
| |||||||||||||||
| | |
(Unaudited)
|
| | | | | | | | | | | | | | | | | | | |||||||||
Consolidated Balance Sheet Information: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total assets
|
| | | $ | 38,025 | | | | | ¥ | 4,097,971 | | | | | $ | 44,144 | | | | | ¥ | 4,757,465 | | | | | ¥ | 4,521,978 | | |
Total liabilities
|
| | | | 36,567 | | | | | | 3,940,884 | | | | | | 38,577 | | | | | | 4,157,407 | | | | | | 4,639,533 | | |
Equity (deficit): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Common stock, no par value;
|
| | | | 5,521 | | | | | | 595,000 | | | | | | 5,521 | | | | | | 595,000 | | | | | | 245,000 | | |
Class A common stock, no par value
|
| | | | 1 | | | | | | 100 | | | | | | 1 | | | | | | 100 | | | | | | 100 | | |
Additional paid-in capital
|
| | | | 6,618 | | | | | | 713,267 | | | | | | 6,618 | | | | | | 713,267 | | | | | | 363,267 | | |
Accumulated deficit
|
| | | | (10,654) | | | | | | (1,148,280) | | | | | | (6,545) | | | | | | (705,309) | | | | | | (722,644) | | |
Accumulated other comprehensive income (loss)
|
| | | | ― | | | | | | ― | | | | | | ― | | | | | | ― | | | | | | (278) | | |
Treasury stock, at cost
|
| | | | (28) | | | | | | (3,000) | | | | | | (28) | | | | | | (3,000) | | | | | | (3,000) | | |
Total equity (deficit)
|
| | | | 1,458 | | | | | | 157,087 | | | | | | 5,567 | | | | | | 600,058 | | | | | | (117,555) | | |
Total Liabilities and Equity (Deficit)
|
| | | $ | 38,025 | | | | | ¥ | 4,097,971 | | | | | $ | 44,144 | | | | | ¥ | 4,757,465 | | | | | ¥ | 4,521,978 | | |
| | |
As of June 30, 2020
|
| |||||||||||||||
(in thousands, except share amounts)
|
| |
Actual
|
| |
Pro Forma
|
| |
Pro Forma as
Adjusted(1) |
| |||||||||
Cash and cash equivalents
|
| | | $ | 2,088 | | | | | | • | | | | | | • | | |
Debt
|
| | | $ | 6,842 | | | | | | • | | | | | | • | | |
Shareholders’ equity: | | | | | | | | | | | | | | | | | | | |
Common Shares, no par value−9,999,999 shares authorized; 4,115,000 shares issued and 4,022,500 shares outstanding (excluding 92,500 shares of treasury stocks) as of June 30, 2020
|
| | | | 5,521 | | | | | | • | | | | | | • | | |
Class A Shares, no par value−1 share authorized; 1 share issued and
outstanding as of June 30, 2020 |
| | | | 1 | | | | | | • | | | | | | • | | |
Additional paid-in capital
|
| | | | 6,618 | | | | | | • | | | | | | • | | |
Retained earnings (accumulated deficit)
|
| | | | (10,654) | | | | | | • | | | | | | • | | |
Accumulated other comprehensive loss, net of taxes
|
| | | | — | | | | | | • | | | | | | • | | |
Treasury stock, at cost
|
| | | | (28) | | | | | | • | | | | | | • | | |
Total shareholders’ equity
|
| | | | 1,458 | | | | | | • | | | | | | • | | |
Total capitalization
|
| | | $ | 8,300 | | | | | | • | | | | | | • | | |
|
Assumed initial public offering price per ADS
|
| | | | | | | | | $ | • | | |
|
Net tangible book value per common share before this offering (as of June 30, 2020)
|
| | | $ | • | | | | | | | | |
|
Increase in net tangible book value per common share attributable to
existing shareholders due to the issuance of common shares after June 30, 2020 |
| | | $ | • | | | | | | | | |
|
Pro forma net tangible book value per common share before this offering (as of June 30, 2020)
|
| | | $ | • | | | | | | | | |
|
Increase in net tangible book value per ADS attributable to purchasers in this offering
|
| | | $ | • | | | | | | | | |
|
Pro forma, as adjusted net tangible book value per ADS immediately after this offering
|
| | | | | | | | | $ | • | | |
|
Dilution in pro forma, as adjusted net tangible book value per ADS to purchasers in this offering
|
| | | | | | | | | $ | • | | |
| | |
Common Shares
|
| |
Total Consideration
|
| ||||||||||||||||||||||||
| | |
Number
|
| |
Percent
|
| |
Amount
|
| |
Percent
|
| |
Weighted
Average Price Per Share |
| |||||||||||||||
Existing shareholders(1)
|
| | | | • | | | | | | •% | | | | | $ | • | | | | | | •% | | | | | $ | • | | |
Purchasers in this offering | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total(1)(2) | | | | | • | | | | | | 100% | | | | | $ | • | | | | | | 100% | | | | | $ | • | | |
| | |
Six months ended June 30,
|
| |
Year ended December 31,
|
| ||||||||||||||||||||||||||||||
(in thousands, except earnings per share data)
|
| |
2020($)
|
| |
2020(¥)
|
| |
2019(¥)
|
| |
2019($)
|
| |
2019(¥)
|
| |
2018(¥)
|
| ||||||||||||||||||
| | | | | | | | |
(Unaudited)
|
| | | | | | | | | | | | | | | | | | | | | | | | | |||
Consolidated Statement of Income Information:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Revenues: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Relaxation Salons
|
| | | $ | 12,476 | | | | | ¥ | 1,344,503 | | | | | ¥ | 2,010,506 | | | | | $ | 35,860 | | | | | ¥ | 3,864,656 | | | | | ¥ | 3,348,042 | | |
Digital Preventative Healthcare
|
| | | | 109 | | | | | | 11,774 | | | | | | 21,025 | | | | | | 405 | | | | | | 43,608 | | | | | | 85,093 | | |
Total revenue
|
| | | | 12,585 | | | | | | 1,356,277 | | | | | | 2,031,531 | | | | | | 36,265 | | | | | | 3,908,264 | | | | | | 3,433,135 | | |
Cost of revenues and operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cost of revenues
|
| | | | 11,777 | | | | | | 1,269,220 | | | | | | 1,533,819 | | | | | | 27,443 | | | | | | 2,957,506 | | | | | | 2,476,267 | | |
Selling, general and administrative expenses
|
| | | | 4,838 | | | | | | 521,364 | | | | | | 411,717 | | | | | | 8,090 | | | | | | 871,862 | | | | | | 842,822 | | |
Impairment loss on long-lived assets
|
| | | | — | | | | | | — | | | | | | 23,604 | | | | | | 413 | | | | | | 44,546 | | | | | | 40,778 | | |
Total cost of revenues and operating expenses
|
| | | | 16,615 | | | | | | 1,790,584 | | | | | | 1,969,140 | | | | | | 35,946 | | | | | | 3,873,914 | | | | | | 3,359,867 | | |
Operating income (loss)
|
| | | $ | 4,030 | | | | | ¥ | (434,307) | | | | | ¥ | 62,391 | | | | | $ | 319 | | | | | ¥ | 34,350 | | | | | ¥ | 73,268 | | |
Other income (expenses): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Dividend income
|
| | | | — | | | | | | 2 | | | | | | 2 | | | | | | — | | | | | | 2 | | | | | | 2 | | |
Interest income
|
| | | | 6 | | | | | | 674 | | | | | | 556 | | | | | | 12 | | | | | | 1,336 | | | | | | 785 | | |
Interest expense
|
| | | | (56) | | | | | | (6,076) | | | | | | (7,155) | | | | | | (126) | | | | | | (13,591) | | | | | | (15,485) | | |
Gain from bargain purchases
|
| | | | 15 | | | | | | 1,624 | | | | | | 4,343 | | | | | | 60 | | | | | | 6,487 | | | | | | 33,218 | | |
Other, net
|
| | | | 132 | | | | | | 14,142 | | | | | | 5,057 | | | | | | 39 | | | | | | 4,153 | | | | | | 133 | | |
Total other income (expenses)
|
| | | | 97 | | | | | | 10,366 | | | | | | 2,803 | | | | | | (15) | | | | | | (1,613) | | | | | | 18,653 | | |
Income tax expense
|
| | | | 177 | | | | | | 19,030 | | | | | | 11,429 | | | | | | 148 | | | | | | 15,961 | | | | | | 25,252 | | |
Equity in earnings (loss) of investment
|
| | | | — | | | | | | — | | | | | | 280 | | | | | | 5 | | | | | | 559 | | | | | | (359) | | |
Net income (loss)
|
| | | $ | (4,110) | | | | | ¥ | (442,971) | | | | | ¥ | 54,045 | | | | | $ | 161 | | | | | ¥ | 17,335 | | | | | ¥ | 66,310 | | |
Net earnings (loss) per share: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic
|
| | | $ | (1.02) | | | | | ¥ | (110.12) | | | | | ¥ | 14.72 | | | | | $ | 0.04 | | | | | ¥ | 4.63 | | | | | ¥ | 18.06 | | |
Diluted
|
| | | $ | (1.02) | | | | | ¥ | (110.12) | | | | | ¥ | 12.86 | | | | | $ | 0.04 | | | | | ¥ | 4.06 | | | | | ¥ | 14.04 | | |
| | |
Six months ended June 30,
|
| |
Year ended December 31,
|
| ||||||||||||||||||||||||||||||
(in thousands, except number of salons, sales per
customer, repeat ratio, and operation ratio) |
| |
2020($)
|
| |
2020(¥)
|
| |
2019(¥)
|
| |
2019($)
|
| |
2019(¥)
|
| |
2018(¥)
|
| ||||||||||||||||||
Other Operating Data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Financial expense & income(1)
|
| | | $ | (50) | | | | | ¥ | (5,400) | | | | | ¥ | (6,597) | | | | | $ | (114) | | | | | ¥ | (12,253) | | | | | ¥ | (14,698) | | |
Adjusted EBITDA(2)
|
| | | | (3,472) | | | | | | (374,224) | | | | | | 118,049 | | | | | | 1,292 | | | | | | 139,301 | | | | | | 179,997 | | |
CAPEX−paid-out cash basis(3)
|
| | | | 1,181 | | | | | | 127,271 | | | | | | 9,674 | | | | | | 210 | | | | | | 22,675 | | | | | | 110,386 | | |
CAPEX−paid-out cash plus future payment obligation basis(3)
|
| | | | 1,835 | | | | | | 197,721 | | | | | | 104,775 | | | | | | 695 | | | | | | 74,897 | | | | | | 222,278 | | |
Number of salons
|
| | | | | | | | | | 289 | | | | | | 270 | | | | | | | | | | | | 283 | | | | | | 263 | | |
Sales per customer(4)
|
| | | $ | 57.85 | | | | | ¥ | 6,234 | | | | | ¥ | 5,968 | | | | | $ | 56.27 | | | | | ¥ | 6,064 | | | | | ¥ | 5,914 | | |
Repeat ratio(5)
|
| | | | | | | | | | 81.16% | | | | | | 80.63% | | | | | | | | | | | | 81.72% | | | | | | 82.39% | | |
Operation ratio(6)
|
| | | | | | | | | | 40.79% | | | | | | 50.42% | | | | | | | | | | | | 50.36% | | | | | | 49.71% | | |
| | |
As of June 30,
|
| |
As of December 31,
|
| ||||||||||||||||||||||||||||||
(in thousands, except adjusted EBITDA
margin) |
| |
2020($)
|
| |
2020(¥)
|
| |
2019(¥)
|
| |
2019($)
|
| |
2019(¥)
|
| |
2018(¥)
|
| ||||||||||||||||||
Reconciliation of non-GAAP measures:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income (loss)
|
| | | $ | (4,110) | | | | | ¥ | (442,971) | | | | | ¥ | 54,045 | | | | | $ | 161 | | | | | ¥ | 17,335 | | | | | ¥ | 66,310 | | |
Dividend income and interest income
|
| | | | (6) | | | | | | (676) | | | | | | (558) | | | | | | (12) | | | | | | (1,338) | | | | | | (787) | | |
Interest expense
|
| | | | 56 | | | | | | 6,076 | | | | | | 7,155 | | | | | | 126 | | | | | | 13,591 | | | | | | 15,485 | | |
Gain from bargain purchases
|
| | | | (15) | | | | | | (1,624) | | | | | | (4,343) | | | | | | (60) | | | | | | (6,487) | | | | | | (33,218) | | |
Other, net
|
| | | | (132) | | | | | | (14,142) | | | | | | (5,057) | | | | | | (39) | | | | | | (4,153) | | | | | | (133) | | |
Income tax expense
|
| | | | 177 | | | | | | 19,030 | | | | | | 11,429 | | | | | | 148 | | | | | | 15,961 | | | | | | 25,252 | | |
Equity in earnings (loss) of investment
|
| | | | — | | | | | | — | | | | | | (280) | | | | | | (5) | | | | | | (559) | | | | | | 359 | | |
Operating income (loss)
|
| | | $ | (4,030) | | | | | ¥ | (434,307) | | | | | ¥ | 62,391 | | | | | $ | 319 | | | | | ¥ | 34,350 | | | | | ¥ | 73,268 | | |
Depreciation and
amortization |
| | | | 307 | | | | | | 33,105 | | | | | | 22,793 | | | | | | 428 | | | | | | 46,174 | | | | | | 44,267 | | |
Losses on sales of directly-operated salons to
franchises |
| | | | 1 | | | | | | 65 | | | | | | 8,721 | | | | | | 89 | | | | | | 9,600 | | | | | | 4,057 | | |
Losses on disposal of property
and equipment, net and other intangible assets, net |
| | | | 250 | | | | | | 26,913 | | | | | | 540 | | | | | | 43 | | | | | | 4,631 | | | | | | 17,627 | | |
Impairment loss on long-lived assets
|
| | | | — | | | | | | — | | | | | | 23,604 | | | | | | 413 | | | | | | 44,546 | | | | | | 40,778 | | |
Adjusted EBITDA
|
| | | $ | (3,472) | | | | | ¥ | (374,224) | | | | | ¥ | 118,049 | | | | | $ | 1,292 | | | | | ¥ | 139,301 | | | | | ¥ | 179,997 | | |
Adjusted EBITDA margin(7)
|
| | | | (27.6)% | | | | | | (27.6)% | | | | | | 5.8% | | | | | | 3.6% | | | | | | 3.6% | | | | | | 5.2% | | |
| | |
As of June 30,
|
| |
As of December 31,
|
| | ||||||||||||||||||||||||||
(in thousands)
|
| |
2020($)
|
| |
2020(¥)
|
| |
2019($)
|
| |
2019(¥)
|
| |
2018(¥)
|
| | |||||||||||||||||
| | |
(Unaudited)
|
| | | | | | | | | | | | | | | | | | | | | | |||||||||
Consolidated Balance Sheet Information:
|
| | | | | | | |||||||||||||||||||||||||||
Total assets
|
| | | $ | 38,025 | | | | | ¥ | 4,097,971 | | | | | $ | 44,144 | | | | | ¥ | 4,757,465 | | | | | ¥ | 4,521,978 | | | | ||
Total liabilities
|
| | | | 36,567 | | | | | | 3,940,884 | | | | | | 38,577 | | | | | | 4,157,407 | | | | | | 4,639,533 | | | | ||
Equity (deficit): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
Common stock, no par value;
|
| | | | 5,521 | | | | | | 595,000 | | | | | | 5,521 | | | | | | 595,000 | | | | | | 245,000 | | | | ||
Class A common stock, no par value;
|
| | | | 1 | | | | | | 100 | | | | | | 1 | | | | | | 100 | | | | | | 100 | | | | ||
Additional paid-in capital
|
| | | | 6,618 | | | | | | 713,267 | | | | | | 6,618 | | | | | | 713,267 | | | | | | 363,267 | | | | ||
Accumulated deficit
|
| | | | (10,654) | | | | | | (1,148,280) | | | | | | (6,545) | | | | | | (705,309) | | | | | | (722,644) | | | | ||
Accumulated other comprehensive income (loss)
|
| | | | ― | | | | | | ― | | | | | | ― | | | | | | ― | | | | | | (278) | | | | ||
Treasury stock, at cost
|
| | | | (28) | | | | | | (3,000) | | | | | | (28) | | | | | | (3,000) | | | | | | (3,000) | | | | ||
Total equity (deficit)
|
| | | | 1,458 | | | | | | 157,087 | | | | | | 5,567 | | | | | | 600,058 | | | | | | (117,555) | | | | ||
Total Liabilities and Equity
|
| | | $ | 38,025 | | | | |
¥
|
4,097,971
|
| | | | $ | 44,144 | | | | | ¥ | 4,757,465 | | | | | ¥ | 4,521,978 | | | |
| | |
Six months ended June 30,
|
| |
Year ended December 31,
|
| ||||||||||||||||||
| | |
2020
|
| |
2019
|
| |
2019
|
| |
2018
|
| ||||||||||||
Number of Salons
|
| | | | 289 | | | | | | 270 | | | | | | 283 | | | | | | 263 | | |
Sales per Customer(1)
|
| | | ¥ | 6,234 | | | | | ¥ | 5,968 | | | | | ¥ | 6,064 | | | | | ¥ | 5,914 | | |
Repeat Ratio(2)
|
| | | | 81.16% | | | | | | 80.63% | | | | | | 81.72% | | | | | | 82.39% | | |
Operation Ratio(2)
|
| | | | 40.79% | | | | | | 50.42% | | | | | | 50.36% | | | | | | 49.71% | | |
| | |
Six months ended June 30,
|
| |
Change (2020 vs 2019)
|
| ||||||||||||||||||||||||||||||
(in thousands, except change % data and Adjusted
EBITDA margin ) |
| |
2020($)
|
| |
2020(¥)
|
| |
2019(¥)
|
| |
$
|
| |
¥
|
| |
%
|
| ||||||||||||||||||
| | | | | | | | |
(Unaudited)
|
| | | | | | | | | | | | | | | | | | | | | | | | | |||
Consolidated Statement of Income Information:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Revenues:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Relaxation Salons
|
| | | $ | 12,476 | | | | | ¥ | 1,344,503 | | | | | ¥ | 2,010,506 | | | | | $ | (6,180) | | | | | ¥ | (666,003) | | | | | | (33.1)% | | |
Digital Preventative Healthcare
|
| | | | 109 | | | | | | 11,774 | | | | | | 21,025 | | | | | | (86) | | | | | | (9,251) | | | | | | (44.0)% | | |
Total revenue
|
| | | | 12,585 | | | | | | 1,356,277 | | | | | | 2,031,531 | | | | | | (6,266) | | | | | | (675,254) | | | | | | (33.2)% | | |
Cost of revenues and operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cost of revenues
|
| | | | 11,777 | | | | | | 1,269,220 | | | | | | 1,533,819 | | | | | | (2,455) | | | | | | (264,599) | | | | | | (17.3)% | | |
Selling, general and administrative
expenses |
| | | | 4,838 | | | | | | 521,364 | | | | | | 411,717 | | | | | | 1,017 | | | | | | 109,647 | | | | | | 26.6% | | |
Impairment loss on long-lived assets
|
| | | | — | | | | | | — | | | | | | 23,604 | | | | | | (219) | | | | | | (23,604) | | | | | | (100.0)% | | |
Total cost of revenues and operating expenses
|
| | | | 16,615 | | | | | | 1,790,584 | | | | | | 1,969,140 | | | | | | (1,657) | | | | | | (178,556) | | | | | | (9.1)% | | |
Operating income (loss)
|
| | | $ | (4,030) | | | | | ¥ | (434,307) | | | | | ¥ | 62,391 | | | | | $ | (4,609) | | | | | ¥ | (496,698) | | | | | | (796.1)% | | |
Other income (expenses): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Dividend income
|
| | | | — | | | | | | 2 | | | | | | 2 | | | | | | — | | | | | | — | | | | | | 0.0% | | |
Interest income
|
| | | | 6 | | | | | | 674 | | | | | | 556 | | | | | | 1 | | | | | | 118 | | | | | | 21.2% | | |
Interest expense
|
| | | | (56) | | | | | | (6,076) | | | | | | (7,155) | | | | | | 10 | | | | | | 1,079 | | | | | | (15.1)% | | |
Gain from bargain purchases
|
| | | | 15 | | | | | | 1,624 | | | | | | 4,343 | | | | | | (25) | | | | | | (2,719) | | | | | | (62.6)% | | |
Other, net
|
| | | | 132 | | | | | | 14,142 | | | | | | 5,057 | | | | | | 84 | | | | | | 9,085 | | | | | | 179.7% | | |
Total other income (expenses)
|
| | | | 97 | | | | | | 10,366 | | | | | | 2,803 | | | | | | 70 | | | | | | 7,563 | | | | | | 269.8% | | |
Income tax expense
|
| | | | 177 | | | | | | 19,030 | | | | | | 11,429 | | | | | | 70 | | | | | | 7,601 | | | | | | 66.5% | | |
Equity in earnings (loss) of investment
|
| | | | — | | | | | | — | | | | | | 280 | | | | | | (3) | | | | | | (280) | | | | | | (100.0)% | | |
Net income (loss)
|
| | | $ | (4,110) | | | | | ¥ | (442,971) | | | | | ¥ | 54,045 | | | | | $ | (4,612) | | | | | ¥ | (497,016) | | | | | | (919.6)% | | |
Adjusted EBITDA(1)
|
| | | $ | (3,472) | | | | | ¥ | (374,224) | | | | | ¥ | 118,049 | | | | | $ | (4,568) | | | | | ¥ | (492,273) | | | | | | (417.0)% | | |
Adjusted EBITDA margin(2)
|
| | | | (27.6)% | | | | | | (27.6)% | | | | | | 5.8% | | | | | | — | | | | | | — | | | | | | (574.8)% | | |
| | |
Six months ended June 30,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Number of Salons
|
| | | | 289 | | | | | | 270 | | |
Sales per Customer(1)
|
| | | ¥ | 6,234 | | | | | ¥ | 5,968 | | |
Repeat Ratio(2)
|
| | | | 81.16% | | | | | | 80.63% | | |
Operation Ratio(2)
|
| | | | 40.79% | | | | | | 50.42% | | |
| | |
Year ended December 31,
|
| |
Change (2019 vs 2018)
|
| ||||||||||||||||||||||||||||||
(in thousands, except change % data and
Adjusted EBITDA margin) |
| |
2019($)
|
| |
2019(¥)
|
| |
2018(¥)
|
| |
$
|
| |
¥
|
| |
%
|
| ||||||||||||||||||
Consolidated Statement of Income Information:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Revenues:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Relaxation Salons
|
| | | $ | 35,860 | | | | | ¥ | 3,864,656 | | | | | ¥ | 3,348,042 | | | | | $ | 4,794 | | | | | ¥ | 516,614 | | | | | | 15.4% | | |
Digital Preventative Healthcare
|
| | | | 405 | | | | | | 43,608 | | | | | | 85,093 | | | | | | (385) | | | | | | (41,485) | | | | | | (48.8)% | | |
Total revenue
|
| | | | 36,265 | | | | | | 3,908,264 | | | | | | 3,433,135 | | | | | | 4,409 | | | | | | 475,129 | | | | | | 13.8% | | |
Cost of revenues and operating expenses:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cost of revenues
|
| | | | 27,443 | | | | | | 2,957,506 | | | | | | 2,476,267 | | | | | | 4,465 | | | | | | 481,239 | | | | | | 19.4% | | |
Selling, general and administrative expenses
|
| | | | 8,090 | | | | | | 871,862 | | | | | | 842,822 | | | | | | 269 | | | | | | 29,040 | | | | | | 3.4% | | |
Impairment loss on long-lived assets
|
| | | | 413 | | | | | | 44,546 | | | | | | 40,778 | | | | | | 35 | | | | | | 3,768 | | | | | | 9.2% | | |
Total cost of revenues and operating
expenses |
| | | | 35,946 | | | | | | 3,873,914 | | | | | | 3,359,867 | | | | | | 4,770 | | | | | | 514,047 | | | | | | 15.3% | | |
Operating income
|
| | | $ | 319 | | | | | ¥ | 34,350 | | | | | ¥ | 73,268 | | | | | $ | (361) | | | | | ¥ | (38,918) | | | | | | (53.1)% | | |
Other income (expenses): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Dividend income
|
| | | | — | | | | | | 2 | | | | | | 2 | | | | | | — | | | | | | — | | | | | | 0.0% | | |
Interest income
|
| | | | 12 | | | | | | 1,336 | | | | | | 785 | | | | | | 5 | | | | | | 551 | | | | | | 70.2% | | |
Interest expense
|
| | | | (126) | | | | | | (13,591) | | | | | | (15,485) | | | | | | 18 | | | | | | 1,894 | | | | | | (12.2)% | | |
Gain from bargain purchases
|
| | | | 60 | | | | | | 6,487 | | | | | | 33,218 | | | | | | (248) | | | | | | (26,731) | | | | | | (80.5)% | | |
Other, net
|
| | | | 39 | | | | | | 4,153 | | | | | | 133 | | | | | | 37 | | | | | | 4,020 | | | | | | 3,022.6% | | |
Total other income (expenses)
|
| | | | (15) | | | | | | (1,613) | | | | | | 18,653 | | | | | | (188) | | | | | | (20,266) | | | | | | (108.6)% | | |
Income tax expense
|
| | | | 148 | | | | | | 15,961 | | | | | | 25,252 | | | | | | (86) | | | | | | (9,291) | | | | | | (36.8)% | | |
Equity in earnings (loss) of investment
|
| | | | 5 | | | | | | 559 | | | | | | (359) | | | | | | 9 | | | | | | 918 | | | | | | (255.7)% | | |
Net income
|
| | | $ | 161 | | | | | ¥ | 17,335 | | | | | ¥ | 66,310 | | | | | $ | (454) | | | | | ¥ | (48,975) | | | | | | (73.9)% | | |
Adjusted EBITDA(1)
|
| | | $ | 1,292 | | | | | ¥ | 139,301 | | | | | ¥ | 179,997 | | | | | $ | (378) | | | | | ¥ | (40,696) | | | | | | (22.6)% | | |
Adjusted EBITDA margin(2)
|
| | | | 3.6% | | | | | | 3.6% | | | | | | 5.2% | | | | | | — | | | | | | — | | | | | | (30.8)% | | |
| | |
Year ended December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Number of Salons
|
| | | | 283 | | | | | | 263 | | |
Sales per Customer(1)
|
| | | ¥ | 6,064 | | | | | ¥ | 5,914 | | |
Repeat Ratio(2)
|
| | | | 81.72% | | | | | | 82.39% | | |
Operation Ratio(2)
|
| | | | 50.36% | | | | | | 49.71% | | |
| | |
Six months ended June 30,
|
| |
Year ended December 31,
|
| ||||||||||||||||||||||||||||||
| | |
2020($)
|
| |
2020(¥)
|
| |
2019(¥)
|
| |
2019($)
|
| |
2019(¥)
|
| |
2018(¥)
|
| ||||||||||||||||||
| | |
(Unaudited)
|
| | | | ||||||||||||||||||||||||||||||
Net income (loss) attributable to shareholders
|
| | | $ | (4,110) | | | | | ¥ | (442,971) | | | | | ¥ | 54,045 | | | | | $ | 161 | | | | | ¥ | 17,335 | | | | | ¥ | 66,310 | | |
Net cash provided by operating activities
|
| | | | (3,478) | | | | | | (374,861) | | | | | | 181,561 | | | | | | 73 | | | | | | 7,870 | | | | | | 141,872 | | |
Net cash used in investing activities
|
| | | | (531) | | | | | | (57,255) | | | | | | (25,774) | | | | | | (352) | | | | | | (37,931) | | | | | | (79,388) | | |
Net cash provided by (used in) financing activities
|
| | | | 1,331 | | | | | | 143,555 | | | | | | (144,760) | | | | | | 3,081 | | | | | | 331,994 | | | | | | (74,475) | | |
Net increase (decrease) of cash and cash equivalents during the period
|
| | | | (2,678) | | | | | | (288,561) | | | | | | 11,027 | | | | | | 2,802 | | | | | | 301,933 | | | | | | (11,991) | | |
Cash and cash equivalents at beginning of period
|
| | | $ | 4,766 | | | | | ¥ | 513,621 | | | | | ¥ | 211,688 | | | | | $ | 1,964 | | | | | ¥ | 211,688 | | | | | ¥ | 223,679 | | |
Cash and cash equivalents at end of period
|
| | | $ | 2,088 | | | | | ¥ | 225,060 | | | | | ¥ | 222,715 | | | | | $ | 4,766 | | | | | ¥ | 513,621 | | | | | ¥ | 211,688 | | |
(in thousand JPY)
|
| |
Payments due by period:
|
| |||||||||||||||||||||
| | |
Total
|
| |
Less than
1 year |
| |
1 – 3 years
|
| |
More than
3 years |
| ||||||||||||
Debt obligations
|
| | | ¥ | 737,444 | | | | | ¥ | 357,285 | | | | | ¥ | 146,804 | | | | | ¥ | 233,355 | | |
Operating lease obligations
|
| | | | 1,691,660 | | | | | | 680,555 | | | | | | 790,634 | | | | | | 220,471 | | |
Other contractual commitments
|
| | | | 11,726 | | | | | | 2,005 | | | | | | 4,010 | | | | | | 5,711 | | |
Total
|
| | | ¥ | 2,440,830 | | | | | ¥ | 1,039,845 | | | | | ¥ | 941,448 | | | | | ¥ | 459,537 | | |
Name
|
| |
Age
|
| |
Position(s) with our Company
|
| |||
Kouji Eguchi | | | | | 47 | | | |
Chief Executive Officer and Representative Director
|
|
Fumitoshi Fujiwara | | | | | 54 | | | | Chief Financial Officer and Director | |
Miki Aoki | | | | | 40 | | | | Manager, General Affairs and Director | |
Akira Nojima | | | | | 56 | | | | Independent Director | |
Tomoya Ogawa | | | | | 44 | | | | Independent Director | |
Tsukasa Karyu* | | | | | 65 | | | | Corporate Auditor | |
Osamu Sato* | | | | | 60 | | | | Corporate Auditor | |
Minekazu Shimada* | | | | | 63 | | | | Corporate Auditor | |
(in thousands, except stock options and number of persons
in category) Category of directors and corporate auditors |
| |
Total amount of
remuneration |
| |
Base compensation
|
| |
Number of persons
in category |
| |||||||||
Executive directors(1)
|
| | | ¥ | 45,000 | | | | | ¥ | 45,000 | | | | | | 3 | | |
Outside directors(2)
|
| | | | — | | | | | | — | | | | | | 3 | | |
Full-time corporate auditor(3)
|
| | | ¥ | 4,800 | | | | | ¥ | 4,800 | | | | | | 1 | | |
Outside corporate auditors(4)
|
| | | ¥ | 900 | | | | | ¥ | 900 | | | | | | 2 | | |
Name of Issuance
|
| |
Issuance Date
|
| |
Expiration Date
|
| |
Exercise Price
(per share) |
| |
Number of
Common Shares Granted |
| ||||||
Fourth Series
|
| |
12/24/2015
|
| |
12/21/2025
|
| | | ¥ | 400 | | | | | | 1,539,500 | | |
Fifth Series
|
| |
12/24/2015
|
| |
12/21/2025
|
| | | ¥ | 400 | | | | | | 285,500 | | |
Sixth Series
|
| |
12/22/2016
|
| |
12/21/2026
|
| | | ¥ | 2,000 | | | | | | 230,000 | | |
Seventh Series
|
| |
12/22/2016
|
| |
12/21/2026
|
| | | ¥ | 2,000 | | | | | | 174,000 | | |
Name of Issuance
|
| |
Issuance Date
|
| |
Expiration Date
|
| |
Exercise Price
(per share) |
| |
Number of
Common Shares Granted |
| ||||||
Eighth Series
|
| |
10/30/2020
|
| |
9/30/2026
|
| | | ¥ | 2,000 | | | | | | 150,000 | | |
Ninth Series(1)
|
| |
10/30/2020
|
| |
9/30/2024
|
| | | ¥ | 128 | | | | | | 300,000 | | |
Name
|
| |
Grant Date
|
| |
Beginning of
Exercise Period |
| |
End of
Exercise Period |
| |
Exercise
Price (per share) |
| |
Total
Number of Stock Options Granted |
| |
Total
Number of Common Shares Underlying Stock Options |
| ||||||||||||
Osamu Sato
|
| |
12/24/2015
|
| |
12/22/2017
|
| | | | 12/21/2025 | | | | | ¥ | 400 | | | | | | 25(1) | | | | | | 12,500 | | |
Miki Aoki
|
| |
12/24/2015
|
| |
12/22/2017
|
| | | | 12/21/2025 | | | | | ¥ | 400 | | | | | | 50(1) | | | | | | 25,000 | | |
Tomoya Ogawa
|
| |
12/24/2015
|
| |
12/22/2017
|
| | | | 12/21/2025 | | | | | ¥ | 400 | | | | | | 25(1) | | | | | | 12,500 | | |
Minekazu Shimada
|
| |
12/22/2016
|
| |
12/22/2018
|
| | | | 12/21/2026 | | | | | ¥ | 2,000 | | | | | | 5,000(2) | | | | | | 5,000 | | |
Kouji Eguchi
|
| |
10/30/2020
|
| |
10/1/2021
|
| | | | 9/30/2026 | | | | | ¥ | 2,000 | | | | | | 150,000(2) | | | | | | 150,000 | | |
| | |
Common Shares
Beneficially Owned Immediately Prior to this Offering(1) |
| |
Common Shares
Beneficially Owned Immediately After this Offering(1) |
| ||||||||||||||||||
Name of Beneficial Owner
|
| |
Shares
|
| |
Percentage
|
| |
Shares
|
| |
Percentage
|
| ||||||||||||
Named Executive Officers, Directors, and Corporate Auditors: | | | | | | | | | | | | | | | | | | | | | | | | | |
Kouji Eguchi(2)
|
| | | | 1,884,960 | | | | | | 44.33% | | | | | | • | | | | | | % | | |
Fumitoshi Fujiwara
|
| | | | 40,000 | | | | | | * | | | | | | • | | | | | | * | | |
Miki Aoki(3)
|
| | | | 56,000 | | | | | | 1.32% | | | | | | • | | | | | | * | | |
Akira Nojima
|
| | | | — | | | | | | * | | | | | | • | | | | | | * | | |
Tomoya Ogawa(4)
|
| | | | 41,000 | | | | | | * | | | | | | • | | | | | | * | | |
Tsukasa Karyu
|
| | | | — | | | | | | * | | | | | | • | | | | | | * | | |
Osamu Sato(5)
|
| | | | 30,000 | | | | | | * | | | | | | • | | | | | | * | | |
Minekazu Shimada(6)
|
| | | | 5,000 | | | | | | * | | | | | | • | | | | | | * | | |
All named executive officers, directors, and corporate auditors as a group (eight) persons)
|
| | | | 2,056,960 | | | | | | 48.38% | | | | | | • | | | | | | •% | | |
5% or more Shareholders: | | | | | | | | | | | | | | | | | | | | | | | | | |
Kouji Eguchi(2)
|
| | | | 1,884,960 | | | | | | 44.33% | | | | | | • | | | | | | •% | | |
Persons depositing or withdrawing common
shares or ADS holders must pay: |
| |
For:
|
|
$5.00 (or less) per 100 ADSs (or portion of 100 ADSs) | | |
Issuance of ADSs, including issuances resulting from a distribution of shares or rights or other property
Cancellation of ADSs for the purpose of withdrawal, including if the deposit agreement terminates
|
|
$.05 (or less) per ADS | | | Any cash distribution to ADS holders | |
A fee equivalent to the fee that would be payable if securities distributed to you had been common shares and the common shares had been deposited for issuance of ADSs | | | Distribution of securities distributed to holders of deposited securities (including rights) that are distributed by the depositary to ADS holders | |
$.05 (or less) per ADS per calendar year | | | Depositary services | |
Registration or transfer fees | | | Transfer and registration of shares on our share register to or from the name of the depositary or its agent when you deposit or withdraw shares | |
Expenses of the depositary | | |
Cable (including SWIFT) and facsimile transmissions (when expressly provided in the deposit agreement)
Converting foreign currency to U.S. dollars
|
|
Taxes and other governmental charges the depositary or the custodian has to pay on any ADSs or common shares underlying ADSs, such as stock transfer taxes, stamp duty or withholding taxes | | | As necessary | |
Any charges incurred by the depositary or its agents for servicing the deposited securities | | | As necessary | |
Name
|
| |
Number of ADSs
|
| |||
Maxim Group LLC
|
| | | | • | | |
•
|
| | | | • | | |
•
|
| | | | • | | |
•
|
| | | | • | | |
Total
|
| | | | • | | |
Underwriting Discounts and Commissions
|
| |
With no exercise of
the option to purchase additional ADSs |
| |
With full exercise
of the option to purchase additional ADSs |
| ||||||
Per ADS
|
| | | US$ | • | | | | | US$ | • | | |
Per ADS For Company Contacts
|
| | | US$ | • | | | | | US$ | • | | |
Total
|
| | | US$ | • | | | | | US$ | • | | |
Description
|
| |
Amount
|
| |||
U.S. Securities and Exchange Commission registration fee
|
| | | $ | • | | |
Financial Industry Regulatory Authority filing fee
|
| | | | • | | |
NASDAQ Capital Market entry and listing fee
|
| | | | • | | |
Accounting and Audit fees and expenses
|
| | | | • | | |
Legal fees and expenses
|
| | | | • | | |
Blue Sky fees and expenses
|
| | | | • | | |
Printing expenses
|
| | | | • | | |
Miscellaneous
|
| | | | • | | |
Total
|
| | | $ | • | | |
| Audited Consolidated Financial Statements as of and for the years ended December 31, 2019 and 2018 | | | | | | | |
| | | | | F-2 | | | |
| | | | | F-3 | | | |
| | | | | F-4 | | | |
| | | | | F-5 | | | |
| | | | | F-6 | | | |
| | | | | F-7 | | | |
| | | | | F-9 | | |
|
Unaudited Condensed Consolidated Financial Statements for the Six Months Ended June 30, 2020 and
2019 |
| | | | | | |
| | | | | F-42 | | | |
| | | | | F-44 | | | |
| | | | | F-45 | | | |
| | | | | F-46 | | | |
| | | | | F-47 | | | |
| | | | | F-49 | | |
| | |
December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
ASSETS | | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | ¥ | 513,621 | | | | | ¥ | 211,688 | | |
Time deposits
|
| | | | 38,520 | | | | | | 33,020 | | |
Accounts receivable-trade, net
|
| | | | 337,048 | | | | | | 283,001 | | |
Accounts receivable-other
|
| | | | 428,278 | | | | | | 343,205 | | |
Due from shareholder
|
| | | | 8,266 | | | | | | 16,677 | | |
Inventories
|
| | | | 5,511 | | | | | | 6,403 | | |
Prepaid expenses and other current assets
|
| | | | 47,485 | | | | | | 40,044 | | |
Total current assets
|
| | | | 1,378,729 | | | | | | 934,038 | | |
Property and equipment, net
|
| | | | 168,955 | | | | | | 189,058 | | |
Goodwill
|
| | | | 78,282 | | | | | | 63,955 | | |
Other intangible assets, net
|
| | | | 77,638 | | | | | | 76,281 | | |
Investments
|
| | | | 14,044 | | | | | | 51,981 | | |
Long-term accounts receivable-other, net
|
| | | | 106,208 | | | | | | 109,977 | | |
Right-of-use asset−operating lease, net
|
| | | | 1,829,968 | | | | | | 2,083,963 | | |
Lease and guarantee deposits
|
| | | | 769,104 | | | | | | 754,941 | | |
Deferred tax assets, net
|
| | | | 222,505 | | | | | | 228,367 | | |
Deferred offering costs
|
| | | | 57,509 | | | | | | — | | |
Other assets
|
| | | | 54,523 | | | | | | 29,417 | | |
Total assets
|
| | | ¥ | 4,757,465 | | | | | ¥ | 4,521,978 | | |
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | |
Accounts payable
|
| | | ¥ | 122,590 | | | | | ¥ | 141,319 | | |
Accrued expenses
|
| | | | 447,974 | | | | | | 378,771 | | |
Short-term borrowings and current portion of long-term borrowings
|
| | | | 371,570 | | | | | | 413,744 | | |
Accrued income taxes
|
| | | | 17,834 | | | | | | 13,634 | | |
Advances received
|
| | | | 483,124 | | | | | | 522,301 | | |
Short-term lease liability
|
| | | | 704,024 | | | | | | 768,196 | | |
Other current liabilities
|
| | | | 115,573 | | | | | | 112,847 | | |
Total current liabilities
|
| | | | 2,262,689 | | | | | | 2,350,812 | | |
Long-term borrowings−net of current portion
|
| | | | 150,531 | | | | | | 342,768 | | |
Deposit received
|
| | | | 474,388 | | | | | | 495,259 | | |
Long-term lease liability−net of current portion
|
| | | | 1,136,799 | | | | | | 1,324,156 | | |
Asset retirement obligation
|
| | | | 127,411 | | | | | | 119,519 | | |
Other liabilities
|
| | | | 5,589 | | | | | | 7,019 | | |
Total liabilities
|
| | | | 4,157,407 | | | | | | 4,639,533 | | |
COMMITMENTS AND CONTINGENCIES (NOTE 17) | | | | | | | | | | | | | |
SHAREHOLDERS’ EQUITY (DEFICIT): | | | | | | | | | | | | | |
Common stock, no par value;
9,999,999 shares authorized; 4,115,000 shares issued and 4,022,500 shares outstanding at December 31, 2019; 3,765,000 shares issued and 3,672,500 shares outstanding at December 31, 2018 |
| | | | 595,000 | | | | | | 245,000 | | |
Class A common stock, no par value;
1 share authorized; 1 share issued and 1 share outstanding at December 31, 2019 and 2018 |
| | | | 100 | | | | | | 100 | | |
Treasury stock, at cost−92,500 common shares at December 31, 2019 and 2018
|
| | | | (3,000) | | | | | | (3,000) | | |
Additional paid-in capital
|
| | | | 713,267 | | | | | | 363,267 | | |
Accumulated other comprehensive loss
|
| | | | ― | | | | | | (278) | | |
Accumulated deficit
|
| | | | (705,309) | | | | | | (722,644) | | |
Total shareholders’ equity (deficit)
|
| | | | 600,058 | | | | | | (117,555) | | |
Total liabilities and shareholders’ equity (deficit)
|
| | | ¥ | 4,757,465 | | | | | ¥ | 4,521,978 | | |
|
| | |
Years Ended December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Revenues: | | | | | | | | | | | | | |
Revenue from directly-operated salons
|
| | | ¥ | 2,031,155 | | | | | ¥ | 1,477,985 | | |
Franchise revenue
|
| | | | 1,833,501 | | | | | | 1,870,057 | | |
Other revenues
|
| | | | 43,608 | | | | | | 85,093 | | |
Total revenues
|
| | | | 3,908,264 | | | | | | 3,433,135 | | |
Cost of revenues and operating expenses: | | | | ||||||||||
Cost of revenue from directly-operated salons
|
| | | | 1,912,893 | | | | | | 1,416,818 | | |
Cost of franchise revenue
|
| | | | 1,019,956 | | | | | | 1,023,975 | | |
Cost of other revenues
|
| | | | 24,657 | | | | | | 35,474 | | |
Selling, general and administrative expenses
|
| | | | 871,862 | | | | | | 842,822 | | |
Impairment loss on long-lived assets
|
| | | | 44,546 | | | | | | 40,778 | | |
Total cost of revenues and operating expenses
|
| | | | 3,873,914 | | | | | | 3,359,867 | | |
Operating income
|
| | | | 34,350 | | | | | | 73,268 | | |
Other income (expense): | | | | | | | | | | | | | |
Dividend income
|
| | | | 2 | | | | | | 2 | | |
Interest income
|
| | | | 1,336 | | | | | | 785 | | |
Interest expense
|
| | | | (13,591) | | | | | | (15,485) | | |
Gain from bargain purchases
|
| | | | 6,487 | | | | | | 33,218 | | |
Other, net
|
| | | | 4,153 | | | | | | 133 | | |
Total other income (expense)
|
| | | | (1,613) | | | | | | 18,653 | | |
Income before income tax expense and equity in earnings (loss) of
investment |
| | | | 32,737 | | | | | | 91,921 | | |
Income tax expense
|
| | | | 15,961 | | | | | | 25,252 | | |
Equity in earnings (loss) of investment
|
| | | | 559 | | | | | | (359) | | |
Net income
|
| | | ¥ | 17,335 | | | | | ¥ | 66,310 | | |
Net earnings per share | | | | ||||||||||
Basic
|
| | | ¥ | 4.63 | | | | | ¥ | 18.06 | | |
Diluted
|
| | | ¥ | 4.06 | | | | | ¥ | 14.04 | | |
Weighted average shares outstanding | | | | ||||||||||
Basic
|
| | | | 3,747,296 | | | | | | 3,672,501 | | |
Diluted
|
| | | | 4,272,302 | | | | | | 4,721,278 | | |
| | |
Years Ended December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Net income
|
| | | ¥ | 17,335 | | | | | ¥ | 66,310 | | |
Foreign currency translation adjustments, net of tax
|
| | | | 278 | | | | | | (278) | | |
Comprehensive income
|
| | | ¥ | 17,613 | | | | | ¥ | 66,032 | | |
| | |
Common stock
|
| |
Class A
common stock |
| |
Treasury stock
|
| |
Additional
paid-in capital |
| |
Accumulated
other comprehensive income (loss) |
| |
Accumulated
deficit |
| |
Total
|
| |||||||||||||||||||||||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| ||||||||||||||||||||||||||||||||||||||||||
Balance, January 1, 2018
|
| | | | 3,765,000 | | | | | ¥ | 245,000 | | | | | | 1 | | | | | ¥ | 100 | | | | | | 92,500 | | | | | ¥ | (3,000) | | | | | ¥ | 363,118 | | | | | ¥ | ― | | | | | ¥ | (778,365) | | | | | ¥ | (173,147) | | |
Cumulative effect of adoption of ASC 842
|
| | | | ― | | | | | | ― | | | | | | ― | | | | | | ― | | | | | | ― | | | | | | ― | | | | | | ― | | | | | | ― | | | | | | (10,589) | | | | | | (10,589) | | |
Net income
|
| | | | ― | | | | | | ― | | | | | | ― | | | | | | ― | | | | | | ― | | | | | | ― | | | | | | ― | | | | | | ― | | | | | | 66,310 | | | | | | 66,310 | | |
Foreign currency translation adjustments
|
| | | | ― | | | | | | ― | | | | | | ― | | | | | | ― | | | | | | ― | | | | | | ― | | | | | | ― | | | | | | (278) | | | | | | ― | | | | | | (278) | | |
Stock-based compensation
|
| | | | ― | | | | | | ― | | | | | | ― | | | | | | ― | | | | | | ― | | | | | | ― | | | | | | 149 | | | | | | ― | | | | | | ― | | | | | | 149 | | |
Balance, December 31, 2018
|
| | | | 3,765,000 | | | | | | 245,000 | | | | | | 1 | | | | | | 100 | | | | | | 92,500 | | | | | | (3,000) | | | | | | 363,267 | | | | | | (278) | | | | | | (722,644) | | | | | | (117,555) | | |
Issuance of common shares for
cash |
| | | | 350,000 | | | | | | 350,000 | | | | | | ― | | | | | | ― | | | | | | ― | | | | | | ― | | | | | | 350,000 | | | | | | ― | | | | | | ― | | | | | | 700,000 | | |
Net income
|
| | | | ― | | | | | | ― | | | | | | ― | | | | | | ― | | | | | | ― | | | | | | ― | | | | | | ― | | | | | | ― | | | | | | 17,335 | | | | | | 17,335 | | |
Foreign currency translation adjustments
|
| | | | ― | | | | | | ― | | | | | | ― | | | | | | ― | | | | | | ― | | | | | | ― | | | | | | ― | | | | | | 278 | | | | | | ― | | | | | | 278 | | |
Balance, December 31, 2019
|
| | | | 4,115,000 | | | | | ¥ | 595,000 | | | | | | 1 | | | | | ¥ | 100 | | | | | | 92,500 | | | | | ¥ | (3,000) | | | | | ¥ | 713,267 | | | | | ¥ | ― | | | | | ¥ | (705,309) | | | | | ¥ | 600,058 | | |
|
| | |
Years Ended December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Cash flows from operating activities: | | | | | | | | | | | | | |
Net income
|
| | | ¥ | 17,335 | | | | | ¥ | 66,310 | | |
Adjustments to reconcile net income to net cash provided by operating activities:
|
| | | | | | | | | | | | |
Depreciation and amortization
|
| | | | 46,174 | | | | | | 44,267 | | |
Losses on sales of directly-operated salons to franchisees
|
| | | | 9,600 | | | | | | 4,057 | | |
Provision for bad debt
|
| | | | 271 | | | | | | 10,237 | | |
Stock-based compensation
|
| | | | ― | | | | | | 149 | | |
Losses on disposal of property and equipment, net and other intangible assets,
net |
| | | | 4,631 | | | | | | 17,627 | | |
Impairment loss on long-lived assets
|
| | | | 44,546 | | | | | | 40,778 | | |
Gain from bargain purchases
|
| | | | (6,487) | | | | | | (33,218) | | |
Deferred income tax expense
|
| | | | 5,739 | | | | | | 18,468 | | |
Other non-cash (gains) expense−net
|
| | | | (895) | | | | | | 565 | | |
Changes in operating assets and liabilities:
|
| | | | | | | | | | | | |
Accounts receivable-trade, net
|
| | | | (66,877) | | | | | | 30,170 | | |
Accounts receivable-other
|
| | | | (36,190) | | | | | | (66,331) | | |
Inventories
|
| | | | 892 | | | | | | 6,921 | | |
Prepaid expenses and other current assets
|
| | | | (39,698) | | | | | | (31,357) | | |
Lease and guarantee deposits
|
| | | | (14,163) | | | | | | 35,488 | | |
Accounts payable
|
| | | | (18,729) | | | | | | 88,512 | | |
Accrued expenses
|
| | | | 116,856 | | | | | | (89,935) | | |
Accrued income taxes
|
| | | | 4,200 | | | | | | 4,510 | | |
Advances received
|
| | | | (39,177) | | | | | | 20,654 | | |
Other current liabilities
|
| | | | 10,226 | | | | | | (9,878) | | |
Deposit received
|
| | | | (20,871) | | | | | | (20,034) | | |
Other assets and other liabilities−net
|
| | | | (9,513) | | | | | | 3,912 | | |
Net cash provided by operating activities
|
| | | | 7,870 | | | | | | 141,872 | | |
Cash flows from investing activities: | | | | | | | | | | | | | |
Purchases of time deposits
|
| | | | (37,900) | | | | | | (40,002) | | |
Proceeds from maturities of time deposits
|
| | | | 6,000 | | | | | | 82,100 | | |
Acquisition of affiliated company securities
|
| | | | ― | | | | | | (49,240) | | |
Acquisition of investment securities
|
| | | | (13,544) | | | | | | (500) | | |
Acquisition of property and equipment
|
| | | | (7,406) | | | | | | (34,298) | | |
Proceeds from sale of property and equipment
|
| | | | 5,000 | | | | | | ― | | |
Cost additions to internal use software
|
| | | | (12,068) | | | | | | (15,817) | | |
Proceeds from sale of intangible assets
|
| | | | ― | | | | | | 2,430 | | |
Acquisition of businesses−net of cash acquired
|
| | | | (3,201) | | | | | | (60,271) | | |
Proceeds from due from shareholder
|
| | | | 8,412 | | | | | | ― | | |
Payment received on short-term loans receivable
|
| | | | 450 | | | | | | 2,310 | | |
Payment received on long-term accounts receivable-other, net
|
| | | | 16,326 | | | | | | 33,900 | | |
Net cash used in investing activities
|
| | | ¥ | (37,931) | | | | | ¥ | (79,388) | | |
|
| | |
Years Ended December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Cash flows from financing activities: | | | | | | | | | | | | | |
Proceeds from issuance of common stock
|
| | | ¥ | 700,000 | | | | | ¥ | ― | | |
Net proceeds from short-term borrowings
|
| | | | ― | | | | | | 180,000 | | |
Proceeds from long-term borrowings
|
| | | | ― | | | | | | 90,000 | | |
Repayment of long-term borrowings
|
| | | | (234,411) | | | | | | (327,475) | | |
Payment of consideration of business acquisitions
|
| | | | (82,812) | | | | | | ― | | |
Payment of deferred offering costs
|
| | | | (43,283) | | | | | | ― | | |
Repayment of corporate bonds
|
| | | | (7,500) | | | | | | (17,000) | | |
Net cash provided by (used in) financing activities
|
| | | | 331,994 | | | | | | (74,475) | | |
Net increase (decrease) in cash and cash equivalents
|
| | | | 301,933 | | | | | | (11,991) | | |
Cash and cash equivalents at beginning of year
|
| | | | 211,688 | | | | | | 223,679 | | |
Cash and cash equivalents at end of year
|
| | | ¥ | 513,621 | | | | | ¥ | 211,688 | | |
Supplemental disclosure of cash flow information: | | | | | | | | | | | | | |
Cash paid during the year for:
|
| | | | | | | | | | | | |
Interest
|
| | | ¥ | 11,872 | | | | | ¥ | 17,010 | | |
Income taxes
|
| | | | 24,344 | | | | | | 14,778 | | |
Non-cash investing and financing activities:
|
| | | | | | | | | | | | |
Right-of-use assets obtained in exchange for lease liabilities
|
| | | | 749,008 | | | | | | 766,827 | | |
Purchases of intangible assets included in accrued expenses
|
| | | | 3,321 | | | | | | 791 | | |
Acquisition of businesses included in accrued expenses
|
| | | | 48,901 | | | | | | 111,101 | | |
Deferred offering costs included in accrued expenses
|
| | | | 14,226 | | | | | | ― | | |
| | |
Number of
Relaxation Salons |
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Directly-operated
|
| | | | 107 | | | | | | 116 | | |
Franchised
|
| | | | 176 | | | | | | 147 | | |
Total
|
| | | | 283 | | | | | | 263 | | |
| Leasehold improvements | | | Lesser of 10 years or the remaining lease term | |
| Vehicles | | | 6 years | |
| Tools, furniture and fixtures | | | 2−10 years | |
| | |
Thousands of Yen
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Franchise fee and royalty income
|
| | | ¥ | 800,110 | | | | | ¥ | 877,947 | | |
Staffing service revenue
|
| | | | 425,711 | | | | | | 410,788 | | |
Sublease revenue
|
| | | | 607,680 | | | | | | 581,322 | | |
Total
|
| | | ¥ | 1,833,501 | | | | | ¥ | 1,870,057 | | |
| | |
Thousands
of Yen |
| |||
| | |
Fair value of
assets / liabilities |
| |||
Cash and cash equivalents
|
| | | ¥ | 7,124 | | |
Other current assets
|
| | | | 156 | | |
Property and equipment, net
|
| | | | 19,981 | | |
Right-of-use asset−operating lease, net
|
| | | | 126,178 | | |
Lease and guarantee deposits
|
| | | | 23,339 | | |
Deferred tax assets
|
| | | | 1,043 | | |
Other assets
|
| | | | 124 | | |
Total assets acquired
|
| | | | 177,945 | | |
Accrued expenses
|
| | | | (5,500) | | |
Advances received
|
| | | | (1,813) | | |
Other current liabilities
|
| | | | (1,212) | | |
Long-term lease liability
|
| | | | (125,338) | | |
Asset retirement obligations
|
| | | | (16,992) | | |
Total liabilities assumed
|
| | | | (150,855) | | |
Net assets assumed
|
| | | | 27,090 | | |
Fair value of the consideration transferred
|
| | | | 6,000 | | |
Gain from bargain purchase
|
| | | ¥ | 21,090 | | |
| | |
Thousands of Yen
|
| |||||||||
| | |
Fair value of
assets/liabilities |
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Property and equipment−net
|
| | | ¥ | 27,567 | | | | | ¥ | 108,916 | | |
Right-of-use asset−operating lease, net
|
| | | | ― | | | | | | 241,221 | | |
Goodwill
|
| | | | 22,156 | | | | | | 44,770 | | |
Intangible assets
|
| | | | 6,519 | | | | | | 46,905 | | |
Lease and guarantee deposits
|
| | | | ― | | | | | | 61,240 | | |
Total assets acquired
|
| | | | 56,242 | | | | | | 503,052 | | |
Short-term lease liability
|
| | | | ― | | | | | | (241,221) | | |
Asset retirement obligation
|
| | | | (25,942) | | | | | | (100,711) | | |
Total liabilities assumed
|
| | | | (25,942) | | | | | | (341,932) | | |
Net assets assumed
|
| | | | 30,300 | | | | | | 161,120 | | |
Fair value of the consideration transferred
|
| | | | 23,813 | | | | | | 148,992 | | |
Gain from bargain purchases
|
| | | ¥ | 6,487 | | | | | ¥ | 12,128 | | |
| | |
Thousands of Yen
|
| |||||||||
| | |
December 31,
2019 |
| |
December 31,
2018 |
| ||||||
Leasehold improvements
|
| | | ¥ | 215,524 | | | | | ¥ | 231,760 | | |
Vehicles
|
| | | | 7,786 | | | | | | 7,786 | | |
Tools, furniture and fixtures
|
| | | | 19,755 | | | | | | 21,698 | | |
Total
|
| | | | 243,065 | | | | | | 261,244 | | |
Accumulated depreciation and amortization
|
| | | | (74,110) | | | | | | (72,186) | | |
| | | | ¥ | 168,955 | | | | | ¥ | 189,058 | | |
| | |
Thousands of Yen
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Intangible assets subject to amortization: | | | | | | | | | | | | | |
Software for internal use
|
| | | ¥ | 54,710 | | | | | ¥ | 41,020 | | |
Reacquired franchise rights
|
| | | | 9,802 | | | | | | 7,860 | | |
Other
|
| | | | 10,750 | | | | | | 10,750 | | |
Total
|
| | | | 75,262 | | | | | | 59,630 | | |
Accumulated amortization
|
| | | | (36,694) | | | | | | (22,419) | | |
Net carrying amount
|
| | | | 38,568 | | | | | | 37,211 | | |
Intangible assets not subject to amortization: | | | | ||||||||||
Trademark
|
| | | | 38,922 | | | | | | 38,922 | | |
Goodwill
|
| | | | 78,282 | | | | | | 63,955 | | |
Telephone rights
|
| | | | 148 | | | | | | 148 | | |
Total
|
| | | | 117,352 | | | | | | 103,025 | | |
Total intangible assets
|
| | | ¥ | 155,920 | | | | | ¥ | 140,236 | | |
| | |
Thousands of Yen
|
| |||
Year ending December 31: | | | | | | | |
2020
|
| | | ¥ | 16,410 | | |
2021
|
| | | | 13,514 | | |
2022
|
| | | | 5,362 | | |
2023
|
| | | | 1,740 | | |
2024
|
| | | | 1,392 | | |
Thereafter
|
| | | | 150 | | |
Total
|
| | | ¥ | 38,568 | | |
| | |
Thousands of Yen
|
| |||
Balance at January 1, 2018
|
| | |||||
Goodwill
|
| | | ¥ | 22,645 | | |
Acquisitions of relaxation salons*
|
| | | | 44,770 | | |
Sales of directly-operated salons to franchisees
|
| | | | (3,460) | | |
Balance at December 31, 2018
|
| | |||||
Goodwill
|
| | | | 63,955 | | |
Acquisitions of relaxation salons*
|
| | | | 22,156 | | |
Sales of directly-operated salons to franchisees, and disposal of relaxation salons
|
| | | | (7,829) | | |
Balance at December 31, 2019
|
| | |||||
Goodwill
|
| | | ¥ | 78,282 | | |
| | |
Ownership
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Re.Ra.Ku (Hongkong) Health Science and Technology Co., Limited
|
| | | | ― | | | | | | 44.0% | | |
| | |
Carrying amount
|
| | | | | | | | | | | | | |||||||||
| | |
Thousands of Yen
|
| |
Ownership
|
| ||||||||||||||||||
| | |
2019
|
| |
2018
|
| |
2019
|
| |
2018
|
| ||||||||||||
Matrix Industries, Inc.
|
| | | ¥ | 5,544 | | | | | ¥ | ― | | | | | | 14.3% | | | | | | ― | | |
Kabushiki Kaisha ReRaKu WEST
|
| | | | 3,000 | | | | | | 3,000 | | | | | | 16.6% | | | | | | 16.6% | | |
Other
|
| | | | 5,500 | | | | | | 500 | | | | | | ― | | | | | | ― | | |
Total
|
| | | ¥ | 14,044 | | | | | ¥ | 3,500 | | | | | | | | | | | | | | |
| | |
Thousands of Yen
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Unsecured bank loans (Due through 2025 with weighted average interest
rates of 1.74% as of December 31, 2019 and 2018, respectively) |
| | | ¥ | 342,101 | | | | | ¥ | 576,512 | | |
Current portion of long-term borrowings
|
| | | | (191,570) | | | | | | (233,744) | | |
Total long-term borrowings
|
| | | ¥ | 150,531 | | | | | ¥ | 342,768 | | |
|
| | |
Thousands of Yen
|
| |||
Year ending December 31: | | | | | | | |
2020
|
| | | ¥ | 191,570 | | |
2021
|
| | | | 91,081 | | |
2022
|
| | | | 25,970 | | |
2023
|
| | | | 19,698 | | |
2024
|
| | | | 9,732 | | |
2025
|
| | | | 4,050 | | |
Total
|
| | | ¥ | 342,101 | | |
| | |
Thousands of Yen
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Beginning balance
|
| | | ¥ | 119,519 | | | | | ¥ | 46,539 | | |
Liabilities incurred
|
| | | | 63,623 | | | | | | 118,832 | | |
Liabilities settled
|
| | | | (55,954) | | | | | | (46,059) | | |
Accretion expense
|
| | | | 223 | | | | | | 207 | | |
Ending balance
|
| | | ¥ | 127,411 | | | | | ¥ | 119,519 | | |
| | |
Thousands of Yen
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Fixed lease cost(a)
|
| | | ¥ | 851,555 | | | | | ¥ | 817,288 | | |
Variable lease cost(b)
|
| | | | 30,901 | | | | | | 28,774 | | |
Short-term cost
|
| | | | 10,979 | | | | | | 31,691 | | |
Total
|
| | | ¥ | 893,435 | | | | | ¥ | 877,753 | | |
| | |
Thousands of Yen
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Cash paid for amounts included in the measurement of lease liabilities: | | | | | | | | | | | | | |
Operating cash flows
|
| | | ¥ | 375,270 | | | | | ¥ | 337,293 | | |
Right-of-use assets obtained in exchange for lease liabilities
|
| | | | 749,008 | | | | | | 766,827 | | |
Weighted average remaining lease term (in years)
|
| | | | 3.3 | | | | | | 3.6 | | |
Weighted average discount rate
|
| | | | 1.45% | | | | | | 1.45% | | |
| | |
Thousands of Yen
|
| |||
Year ending December 31: | | | | | | | |
2020
|
| | | ¥ | 708,552 | | |
2021
|
| | | | 560,080 | | |
2022
|
| | | | 346,190 | | |
2023
|
| | | | 143,012 | | |
2024
|
| | | | 69,596 | | |
2025 and thereafter
|
| | | | 62,130 | | |
Total
|
| | | | 1,889,560 | | |
Less: Interest component
|
| | | | (48,737) | | |
Present value of minimum lease payments
|
| | | ¥ | 1,840,823 | | |
| | |
Thousands of Yen
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Fixed sublease income
|
| | | ¥ | 580,074 | | | | | ¥ | 557,579 | | |
Variable sublease income
|
| | | | 27,606 | | | | | | 23,743 | | |
Total
|
| | | ¥ | 607,680 | | | | | ¥ | 581,322 | | |
| | |
Thousands of Yen
|
| |||
Year ending December 31: | | | | | | | |
2020
|
| | | ¥ | 494,567 | | |
2021
|
| | | | 392,987 | | |
2022
|
| | | | 229,180 | | |
2023
|
| | | | 108,298 | | |
2024
|
| | | | 46,114 | | |
2025 and thereafter
|
| | | | 34,994 | | |
Total
|
| | | ¥ | 1,306,140 | | |
| | | | | | | | |
Yen
|
| |
Years
|
| |
Thousands of Yen
|
| |||||||||
| | |
Number of
shares |
| |
Weighted-
average exercise price |
| |
Weighted-
average remaining contractual term |
| |
Aggregate
intrinsic value |
| ||||||||||||
Outstanding at January 1, 2018
|
| | | | 2,120,500 | | | | | ¥ | 705 | | | | | | 7.9 | | | | | ¥ | ― | | |
Granted
|
| | | | ― | | | | | | ― | | | | | | ― | | | | | | | | |
Exercised
|
| | | | ― | | | | | | ― | | | | | | ― | | | | | | | | |
Forfeited/Expired
|
| | | | 1,571,000 | | | | | | 409 | | | | | | | | | | | | | | |
Outstanding at December 31, 2018
|
| | | | 549,500 | | | | | | 1,552 | | | | | | 7.6 | | | | | | ― | | |
Exercisable at December 31, 2018
|
| | | | 549,500 | | | | | | 1,552 | | | | | | 7.6 | | | | | | ― | | |
Granted
|
| | | | ― | | | | | | ― | | | | | | ― | | | | | | | | |
Exercised
|
| | | | ― | | | | | | ― | | | | | | ― | | | | | | | | |
Forfeited/Expired
|
| | | | 30,000 | | | | | | 800 | | | | | | | | | | | | | | |
Outstanding at December 31, 2019
|
| | | | 519,500 | | | | | | 1,595 | | | | | | 6.7 | | | | | | ― | | |
Exercisable at December 31, 2019
|
| | | | 519,500 | | | | | ¥ | 1,595 | | | | | | 6.7 | | | | | ¥ | ― | | |
| | |
Thousands of Yen
|
| |||||||||||||||||||||
| | |
Relaxation
Salon |
| |
Digital
Preventative Healthcare |
| |
Corporate
and elimination |
| |
Consolidated
|
| ||||||||||||
Year ended December 31, 2019 | | | | | | | | | | | | | | | | | | | | | | | | | |
Revenues
|
| | | ¥ | 3,864,656 | | | | | ¥ | 43,608 | | | | | ¥ | ― | | | | | ¥ | 3,908,264 | | |
Operating income (loss)
|
| | | | 279,439 | | | | | | (43,056) | | | | | | (202,033) | | | | | | 34,350 | | |
Depreciation and amortization
|
| | | | 34,025 | | | | | | 4,764 | | | | | | 7,385 | | | | | | 46,174 | | |
Total assets
|
| | | | 3,346,739 | | | | | | 29,565 | | | | | | 1,381,161 | | | | | | 4,757,465 | | |
Year ended December 31, 2018 | | | | | | | | | | | | | | | | | | | | | | | | | |
Revenues
|
| | | ¥ | 3,348,042 | | | | | ¥ | 85,093 | | | | | ¥ | ― | | | | | ¥ | 3,433,135 | | |
Operating income (loss)
|
| | | | 362,765 | | | | | | (40,903) | | | | | | (248,594) | | | | | | 73,268 | | |
Depreciation and amortization
|
| | | | 34,898 | | | | | | ― | | | | | | 9,369 | | | | | | 44,267 | | |
Total assets
|
| | | | 3,584,260 | | | | | | 26,843 | | | | | | 910,875 | | | | | | 4,521,978 | | |
| | |
Thousands of Yen
|
| |
Thousands of Yen
|
| ||||||||||||||||||
| | |
2019
|
| |
2018
|
| ||||||||||||||||||
| | |
Domestic
|
| |
Total
|
| |
Domestic
|
| |
Total
|
| ||||||||||||
Income before income taxes
|
| | | ¥ | 32,737 | | | | | ¥ | 32,737 | | | | | ¥ | 91,921 | | | | | ¥ | 91,921 | | |
Income taxes | | | | | | | | | | | | | | | | | | | | | | | | | |
Current
|
| | | | 10,222 | | | | | | 10,222 | | | | | | 6,784 | | | | | | 6,784 | | |
Deferred
|
| | | | 5,739 | | | | | | 5,739 | | | | | | 18,468 | | | | | | 18,468 | | |
Total
|
| | | ¥ | 15,961 | | | | | ¥ | 15,961 | | | | | ¥ | 25,252 | | | | | ¥ | 25,252 | | |
| | |
2019
|
| |
2018
|
| ||||||
Statutory tax rate
|
| | | | 30.6% | | | | | | 30.9% | | |
Increases (reductions) in taxes due to:
|
| | | | | | | | | | | | |
Change in valuation allowance
|
| | | | (10.2) | | | | | | (9.7) | | |
Nondeductible expenses
|
| | | | 3.2 | | | | | | 0.9 | | |
Inhabitant tax-per capita*
|
| | | | 24.5 | | | | | | 3.9 | | |
Effect of business combination
|
| | | | ― | | | | | | 0.5 | | |
Stock-based compensation
|
| | | | ― | | | | | | 0.1 | | |
Other-net
|
| | | | 0.7 | | | | | | 0.9 | | |
Effective income tax rate
|
| | | | 48.8% | | | | | | 27.5% | | |
| | |
Thousands of Yen
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Deferred tax assets: | | | | | | | | | | | | | |
Accounts receivable-trade
|
| | | ¥ | 13,485 | | | | | ¥ | 13,485 | | |
Provision for bad debt
|
| | | | 50,271 | | | | | | 50,188 | | |
Goodwill
|
| | | | 1,135 | | | | | | 8,838 | | |
Other prepaid expenses−currently not deductible
|
| | | | 54,235 | | | | | | 74,658 | | |
Asset retirement obligation
|
| | | | 39,013 | | | | | | 36,597 | | |
Operating lease liability
|
| | | | 563,660 | | | | | | 640,678 | | |
Operating loss carryforwards
|
| | | | 95,490 | | | | | | 63,700 | | |
Other
|
| | | | 51,485 | | | | | | 48,567 | | |
Gross deferred tax assets
|
| | | | 868,774 | | | | | | 936,711 | | |
Valuation allowance
|
| | | | (42,395) | | | | | | (45,750) | | |
Total deferred tax assets
|
| | | | 826,379 | | | | | | 890,961 | | |
Deferred tax liabilities: | | | | | | | | | | | | | |
Property and equipment
|
| | | | (18,141) | | | | | | (18,169) | | |
Intangible assets
|
| | | | (6,485) | | | | | | (1,861) | | |
Right-of-use asset−operating lease
|
| | | | (560,336) | | | | | | (638,109) | | |
Deferred offering costs
|
| | | | (17,609) | | | | | | ― | | |
Advances received
|
| | | | (1,303) | | | | | | (3,604) | | |
Other
|
| | | | ― | | | | | | (851) | | |
Total deferred tax liabilities
|
| | | | (603,874) | | | | | | (662,594) | | |
Net deferred tax assets
|
| | | ¥ | 222,505 | | | | | ¥ | 228,367 | | |
| | |
Operating loss
carryforwards |
| |||
| | |
(Thousands of Yen)
|
| |||
Years ending December 31: | | | | | | | |
Between 2020 and 2023
|
| | | ¥ | 75,596 | | |
Between 2024 and 2027
|
| | | | 78,353 | | |
2028 and thereafter
|
| | | | 157,906 | | |
Total
|
| | | ¥ | 311,855 | | |
| | |
Thousands of Yen
|
| |||||||||||||||
| | |
Before Tax
Amount |
| |
Tax
(Expense) Benefit |
| |
Net of Tax
Amount |
| |||||||||
Year ended December 31, 2018 | | | | | | | | | | | | | | | | | | | |
Foreign currency translation adjustments
|
| | | | | | | | | | | | | | | | | | |
Amount arising during the period
|
| | | ¥ | (400) | | | | | ¥ | 122 | | | | | ¥ | (278) | | |
Reclassification adjustments for gains and losses realized in net income
|
| | | | ― | | | | | | ― | | | | | | ― | | |
Net change during the year
|
| | | | (400) | | | | | | 122 | | | | | | (278) | | |
Other comprehensive income (loss)
|
| | | ¥ | (400) | | | | | ¥ | 122 | | | | | ¥ | (278) | | |
Year ended December 31, 2019 | | | | | | | | | | | | | | | | | | | |
Foreign currency translation adjustments
|
| | | | | | | | | | | | | | | | | | |
Amount arising during the period
|
| | | ¥ | ― | | | | | ¥ | ― | | | | | ¥ | ― | | |
Reclassification adjustments for gains and losses realized in net income
|
| | | | 400 | | | | | | (122) | | | | | | 278 | | |
Net change during the year
|
| | | | 400 | | | | | | (122) | | | | | | 278 | | |
Other comprehensive income (loss)
|
| | | ¥ | 400 | | | | | ¥ | (122) | | | | | ¥ | 278 | | |
| | |
Thousands of Yen
|
| |||
| | |
Foreign currency
translation adjustments |
| |||
Balance at January 1, 2018
|
| | | ¥ | ― | | |
Other comprehensive income (loss) before reclassifications
|
| | | | (278) | | |
Amounts reclassified from accumulated other comprehensive income
(loss) |
| | | | ― | | |
Net change during the year
|
| | | | (278) | | |
Balance at December 31, 2018
|
| | | | (278) | | |
Other comprehensive income (loss) before reclassifications
|
| | | | ― | | |
Amounts reclassified from accumulated other comprehensive income
(loss) |
| | | | 278 | | |
Net change during the year
|
| | | | 278 | | |
Balance at December 31, 2019
|
| | | ¥ | ― | | |
|
| | |
Thousands of Yen
|
| |
Affected line items
in consolidated statements of income |
| |||||||||
| | |
2019
|
| |
2018
|
| |||||||||
Foreign currency translation adjustments
|
| | | ¥ | 400 | | | | | ¥ | ― | | | | Other−net | |
| | | | | (122) | | | | | | ― | | | |
Income tax expense
|
|
| | | | | 278 | | | | | | ― | | | | Net income | |
Total amount reclassified, net of tax
|
| | | ¥ | 278 | | | | | ¥ | ― | | | | | |
| | |
2019
|
| |
2018
|
| ||||||||||||||||||
| | |
Common
|
| |
Class A
|
| |
Common
|
| |
Class A
|
| ||||||||||||
| | |
(Thousands of Yen)
|
| |
(Thousands of Yen)
|
| ||||||||||||||||||
Income (Numerator) | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income attributable to shareholders of the Company
|
| | | ¥ | 17,335 | | | | | | — | | | | | ¥ | 66,310 | | | | | | — | | |
| | |
(Number of shares)
|
| |
(Number of shares)
|
| ||||||||||||||||||
Shares (Denominator) | | | | | | | | | | | | | | | | | | | | | | | | | |
Weighted average common shares outstanding
|
| | | | 3,747,295 | | | | | | 1 | | | | | | 3,672,500 | | | | | | 1 | | |
Effect of dilutive instruments:
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Stock options
|
| | | | 525,007 | | | | | | ― | | | | | | 1,048,777 | | | | | | ― | | |
Weighted average common shares for diluted
computation |
| | | | 4,272,302 | | | | | | 1 | | | | | | 4,721,277 | | | | | | 1 | | |
| | |
(Yen)
|
| |
(Yen)
|
| ||||||||||||||||||
Earnings per common share attributable to shareholders of the Company
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Basic
|
| | | ¥ | 4.63 | | | | | ¥ | 4.63 | | | | | ¥ | 18.06 | | | | | ¥ | 18.06 | | |
Diluted
|
| | | ¥ | 4.06 | | | | | ¥ | 4.06 | | | | | ¥ | 14.04 | | | | | ¥ | 14.04 | | |
| | |
Thousands of Yen
|
| |||||||||||||||||||||
| | |
2019
|
| |
2018
|
| ||||||||||||||||||
| | |
Carrying
amount |
| |
Estimated
fair value |
| |
Carrying
amount |
| |
Estimated
fair value |
| ||||||||||||
Long-term borrowings−net of current portion
|
| | | ¥ | (150,531) | | | | | ¥ | (145,600) | | | | | ¥ | (342,768) | | | | | ¥ | (331,065) | | |
| | |
Thousands of Yen
|
| |||||||||||||||||||||
| | |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |
Impairment
loss |
| ||||||||||||
Year ended December 31, 2019 | | | | | | | | | | | | | | | | | | | | | | | | | |
Assets
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Leasehold improvements
|
| | | ¥ | ― | | | | | ¥ | ― | | | | | ¥ | 161,330 | | | | | ¥ | 9,825 | | |
Right-of-use asset−operating lease
|
| | | | ― | | | | | | ― | | | | | | 1,829,968 | | | | | | 34,721 | | |
Total
|
| | | ¥ | ― | | | | | ¥ | ― | | | | | ¥ | 1,991,298 | | | | | ¥ | 44,546 | | |
Year ended December 31, 2018 | | | | | | | | | | | | | | | | | | | | | | | | | |
Assets
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Leasehold improvements
|
| | | ¥ | ― | | | | | ¥ | ― | | | | | ¥ | 177,949 | | | | | ¥ | 4,315 | | |
Right-of-use asset−operating lease
|
| | | | ― | | | | | | ― | | | | | | 2,083,963 | | | | | | 36,463 | | |
Total
|
| | | ¥ | ― | | | | | ¥ | ― | | | | | ¥ | 2,261,912 | | | | | ¥ | 40,778 | | |
| Grant date | | | The date to be determined within one year from the date of the Company’s extraordinary general meeting resolution. | |
| Number of Stock Options to be granted | | | Upper limit 150,000 | |
| Number of shares to be issued | | | Upper limit 150,000 shares | |
| Grant date | | | The date to be determined within one year from the date of the Company’s extraordinary general meeting resolution. | |
| Number of Stock Options to be granted | | | Upper limit 300,000 | |
| Number of shares to be issued | | | Upper limit 300,000 shares | |
| | |
June 30,
2020 |
| |
December 31,
2019 |
| ||||||
| | |
(Unaudited)
|
| | | | | | | |||
ASSETS
|
| | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | ¥ | 225,060 | | | | | ¥ | 513,621 | | |
Time deposits
|
| | | | 32,520 | | | | | | 38,520 | | |
Accounts receivable-trade, net of allowances of ¥23,630 and ¥22,920, respectively
|
| | | | 144,246 | | | | | | 337,048 | | |
Accounts receivable-other
|
| | | | 251,348 | | | | | | 428,278 | | |
Due from shareholder
|
| | | | 300 | | | | | | 8,266 | | |
Inventories
|
| | | | 5,880 | | | | | | 5,511 | | |
Prepaid expenses and other current assets
|
| | | | 90,642 | | | | | | 47,485 | | |
Total current assets
|
| | | | 749,996 | | | | | | 1,378,729 | | |
Property and equipment, net
|
| | | | 237,632 | | | | | | 168,955 | | |
Goodwill
|
| | | | 163,008 | | | | | | 78,282 | | |
Other intangible assets, net
|
| | | | 75,538 | | | | | | 77,638 | | |
Investments
|
| | | | 14,044 | | | | | | 14,044 | | |
Long-term accounts receivable-other, net of allowances of ¥135,251 and ¥141,256, respectively
|
| | | | 142,110 | | | | | | 106,208 | | |
Right-of-use asset−operating lease, net
|
| | | | 1,631,410 | | | | | | 1,829,968 | | |
Lease and guarantee deposits
|
| | | | 684,781 | | | | | | 769,104 | | |
Deferred tax assets, net
|
| | | | 211,459 | | | | | | 222,505 | | |
Deferred offering costs
|
| | | | 125,574 | | | | | | 57,509 | | |
Other assets
|
| | | | 62,419 | | | | | | 54,523 | | |
Total assets
|
| | | ¥ | 4,097,971 | | | | | ¥ | 4,757,465 | | |
| | |
June 30,
2020 |
| |
December 31,
2019 |
| ||||||
| | |
(Unaudited)
|
| | | | | | | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
| | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | |
Accounts payable
|
| | | ¥ | 70,196 | | | | | ¥ | 122,590 | | |
Accrued expenses
|
| | | | 437,321 | | | | | | 447,974 | | |
Short-term borrowings and current portion of long-term borrowings
|
| | | | 357,285 | | | | | | 371,570 | | |
Accrued income taxes
|
| | | | 20,939 | | | | | | 17,834 | | |
Advances received
|
| | | | 358,296 | | | | | | 483,124 | | |
Short-term lease liability
|
| | | | 683,026 | | | | | | 704,024 | | |
Other current liabilities
|
| | | | 92,097 | | | | | | 115,573 | | |
Total current liabilities
|
| | | | 2,019,160 | | | | | | 2,262,689 | | |
Long-term borrowings−net of current portion
|
| | | | 380,159 | | | | | | 150,531 | | |
Deposit received
|
| | | | 408,193 | | | | | | 474,388 | | |
Long-term lease liability−net of current portion
|
| | | | 964,973 | | | | | | 1,136,799 | | |
Asset retirement obligation
|
| | | | 158,680 | | | | | | 127,411 | | |
Other liabilities
|
| | | | 9,719 | | | | | | 5,589 | | |
Total liabilities
|
| | | | 3,940,884 | | | | | | 4,157,407 | | |
COMMITMENTS AND CONTINGENCIES (NOTE 12) | | | | | | | | | | | | | |
SHAREHOLDERS’ EQUITY: | | | | | | | | | | | | | |
Common stock, no par value;
9,999,999 shares authorized; 4,115,000 shares issued and 4,022,500 shares outstanding at June 30, 2020 and December 31, 2019 |
| | | | 595,000 | | | | | | 595,000 | | |
Class A common stock, no par value;
1 share authorized; 1 share issued and 1 share outstanding at June 30, 2020 and December 31, 2019 |
| | | | 100 | | | | | | 100 | | |
Treasury stock, at cost−92,500 common shares at June 30, 2020 and December 31, 2019
|
| | | | (3,000) | | | | | | (3,000) | | |
Additional paid-in capital
|
| | | | 713,267 | | | | | | 713,267 | | |
Accumulated deficit
|
| | | | (1,148,280) | | | | | | (705,309) | | |
Total shareholders’ equity
|
| | | | 157,087 | | | | | | 600,058 | | |
Total liabilities and shareholders’ equity
|
| | | ¥ | 4,097,971 | | | | | ¥ | 4,757,465 | | |
| | |
Six Months Ended June 30,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Revenues: | | | | | | | | | | | | | |
Revenue from directly-operated salons
|
| | | ¥ | 751,267 | | | | | ¥ | 1,045,945 | | |
Franchise revenue
|
| | | | 593,236 | | | | | | 964,561 | | |
Other revenues
|
| | | | 11,774 | | | | | | 21,025 | | |
Total revenues
|
| | | | 1,356,277 | | | | | | 2,031,531 | | |
Cost of revenues and operating expenses: | | | | | | | | | | | | | |
Cost of revenue from directly-operated salons
|
| | | | 866,297 | | | | | | 994,631 | | |
Cost of franchise revenue
|
| | | | 394,906 | | | | | | 529,408 | | |
Cost of other revenues
|
| | | | 8,017 | | | | | | 9,780 | | |
Selling, general and administrative expenses
|
| | | | 521,364 | | | | | | 411,717 | | |
Impairment loss on long-lived assets
|
| | | | ― | | | | | | 23,604 | | |
Total cost of revenues and operating expenses
|
| | | | 1,790,584 | | | | | | 1,969,140 | | |
Operating (loss) income
|
| | | | (434,307) | | | | | | 62,391 | | |
Other income (expense): | | | | | | | | | | | | | |
Dividend income
|
| | | | 2 | | | | | | 2 | | |
Interest income
|
| | | | 674 | | | | | | 556 | | |
Interest expense
|
| | | | (6,076) | | | | | | (7,155) | | |
Gain from bargain purchases
|
| | | | 1,624 | | | | | | 4,343 | | |
Other, net
|
| | | | 14,142 | | | | | | 5,057 | | |
Total other income
|
| | | | 10,366 | | | | | | 2,803 | | |
(Loss) income before income tax expense and equity in earnings of investment
|
| | | | (423,941) | | | | | | 65,194 | | |
Income tax expense
|
| | | | 19,030 | | | | | | 11,429 | | |
Equity in earnings of investment
|
| | | | ― | | | | | | 280 | | |
Net (loss) income
|
| | | ¥ | (442,971) | | | | | ¥ | 54,045 | | |
Net (loss) earnings per share | | | | | | | | | | | | | |
Basic
|
| | | ¥ | (110.12) | | | | | ¥ | 14.72 | | |
Diluted
|
| | | ¥ | (110.12) | | | | | ¥ | 12.86 | | |
Weighted average shares outstanding | | | | | | | | | | | | | |
Basic
|
| | | | 4,022,501 | | | | | | 3,672,501 | | |
Diluted
|
| | | | 4,022,501 | | | | | | 4,203,106 | | |
| | |
Six Months Ended June 30,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Net (loss) income
|
| | | ¥ | (442,971) | | | | | ¥ | 54,045 | | |
Foreign currency translation adjustments, net of tax
|
| | | | ― | | | | | | (980) | | |
Comprehensive (loss) income
|
| | | ¥ | (442,971) | | | | | ¥ | 53,065 | | |
| | |
Common stock
|
| |
Class A
common stock |
| |
Treasury stock
|
| |
Additional
paid-in capital |
| |
Accumulated
deficit |
| |
Total
|
| ||||||||||||||||||||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| ||||||||||||||||||||||||||||||||||||
Balance, December 31, 2019
|
| | | | 4,115,000 | | | | | ¥ | 595,000 | | | | | | 1 | | | | | ¥ | 100 | | | | | | 92,500 | | | | | ¥ | (3,000) | | | | | ¥ | 713,267 | | | | | ¥ | (705,309) | | | | | ¥ | 600,058 | | |
Net loss
|
| | | | ― | | | | | | ― | | | | | | ― | | | | | | ― | | | | | | ― | | | | | | ― | | | | | | ― | | | | | | (442,971) | | | | | | (442,971) | | |
Balance, June 30, 2020
|
| | | | 4,115,000 | | | | | ¥ | 595,000 | | | | | | 1 | | | | | ¥ | 100 | | | | | | 92,500 | | | | | ¥ | (3,000) | | | | | ¥ | 713,267 | | | | | ¥ | (1,148,280) | | | | | ¥ | 157,087 | | |
| | |
Six Months Ended June 30,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Cash flows from operating activities: | | | | | | | | | | | | | |
Net (loss) income
|
| | | ¥ | (442,971) | | | | | ¥ | 54,045 | | |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
|
| | | | | | | | | | | | |
Depreciation and amortization
|
| | | | 33,105 | | | | | | 22,793 | | |
Losses on sales of directly-operated salons to franchisees
|
| | | | 65 | | | | | | 8,721 | | |
(Recovery of) provision for bad debt
|
| | | | (5,295) | | | | | | 6,895 | | |
Losses on disposal of long-lived assets, net
|
| | | | 26,913 | | | | | | 540 | | |
Impairment loss on long-lived assets
|
| | | | ― | | | | | | 23,604 | | |
Gain from bargain purchases
|
| | | | (1,624) | | | | | | (4,343) | | |
Deferred income tax expense
|
| | | | 11,046 | | | | | | 6,318 | | |
Other non-cash expense (gains)−net
|
| | | | 121 | | | | | | (156) | | |
Changes in operating assets and liabilities:
|
| | | | | | | | | | | | |
Accounts receivable-trade, net
|
| | | | 192,093 | | | | | | 108,749 | | |
Accounts receivable-other
|
| | | | 89,518 | | | | | | 108,501 | | |
Inventories
|
| | | | (369) | | | | | | 777 | | |
Prepaid expenses and other current assets
|
| | | | (37,422) | | | | | | (1,570) | | |
Lease and guarantee deposits
|
| | | | 84,323 | | | | | | 51,050 | | |
Accounts payable
|
| | | | (52,394) | | | | | | 42,184 | | |
Accrued expenses
|
| | | | (62,280) | | | | | | (78,015) | | |
Accrued income taxes
|
| | | | 3,105 | | | | | | (8,523) | | |
Advances received
|
| | | | (124,828) | | | | | | (160,286) | | |
Other current liabilities
|
| | | | (23,476) | | | | | | 2,790 | | |
Deposit received
|
| | | | (66,195) | | | | | | 2,323 | | |
Other assets and other liabilities−net
|
| | | | 1,704 | | | | | | (4,836) | | |
Net cash (used in) provided by operating activities
|
| | | | (374,861) | | | | | | 181,561 | | |
Cash flows from investing activities: | | | | | | | | | | | | | |
Purchases of time deposits
|
| | | | (13,500) | | | | | | (18,700) | | |
Proceeds from maturities of time deposits
|
| | | | 10,000 | | | | | | ― | | |
Proceeds from sale of affiliated company securities
|
| | | | 50,000 | | | | | | ― | | |
Acquisition of investment securities
|
| | | | ― | | | | | | (8,544) | | |
Acquisition of property and equipment
|
| | | | (70,803) | | | | | | ― | | |
Proceeds from sale of property and equipment
|
| | | | 3,227 | | | | | | ― | | |
Cost additions to internal use software
|
| | | | (9,492) | | | | | | (6,473) | | |
Acquisition of businesses−net of cash acquired
|
| | | | (42,393) | | | | | | (3,201) | | |
Proceeds from due from shareholder
|
| | | | 7,966 | | | | | | 1,793 | | |
Payment received on short-term loans receivable
|
| | | | 225 | | | | | | 225 | | |
Payment received on long-term accounts receivable-other, net
|
| | | | 7,515 | | | | | | 9,126 | | |
Net cash used in investing activities
|
| | | ¥ | (57,255) | | | | | ¥ | (25,774) | | |
| | |
Six Months Ended June 30,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Cash flows from financing activities: | | | | | | | | | | | | | |
Proceeds from long-term borrowings
|
| | | ¥ | 330,000 | | | | | ¥ | ― | | |
Repayment of long-term borrowings
|
| | | | (114,657) | | | | | | (121,260) | | |
Payment of installment payables related to business acquisitions
|
| | | | (30,199) | | | | | | (16,000) | | |
Payment of deferred offering costs
|
| | | | (41,589) | | | | | | ― | | |
Repayment of corporate bonds
|
| | | | ― | | | | | | (7,500) | | |
Net cash provided by (used in) financing activities
|
| | | | 143,555 | | | | | | (144,760) | | |
Net (decrease) increase in cash and cash equivalents
|
| | | | (288,561) | | | | | | 11,027 | | |
Cash and cash equivalents at beginning of period
|
| | | | 513,621 | | | | | | 211,688 | | |
Cash and cash equivalents at end of period
|
| | | ¥ | 225,060 | | | | | ¥ | 222,715 | | |
Supplemental disclosure of cash flow information: | | | | | | | | | | | | | |
Cash paid during the period for:
|
| | | | | | | | | | | | |
Interest
|
| | | ¥ | 4,896 | | | | | ¥ | 6,579 | | |
Income taxes
|
| | | | 4,953 | | | | | | 13,634 | | |
Non-cash investing and financing activities:
|
| | | | | | | | | | | | |
Right-of-use assets obtained in exchange for lease liabilities
|
| | | | 189,240 | | | | | | 240,790 | | |
Purchases of property and equipment included in accrued expenses
|
| | | | 9,548 | | | | | | ― | | |
Payables related to acquisition of businesses included in accrued expenses
|
| | | | 60,902 | | | | | | 95,101 | | |
Deferred offering costs included in accrued expenses
|
| | | | 26,476 | | | | | | 15,184 | | |
| | |
Number of Relaxation Salons
|
| |||||||||
| | |
As of June 30,
2020 |
| |
As of December 31,
2019 |
| ||||||
Directly-operated
|
| | | | 138 | | | | | | 107 | | |
Franchised
|
| | | | 151 | | | | | | 176 | | |
Total
|
| | | | 289 | | | | | | 283 | | |
| | |
Thousands of Yen
|
| |||||||||
| | |
Six Months Ended June 30,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Franchise fee and royalty income
|
| | | ¥ | 203,568 | | | | | ¥ | 446,197 | | |
Staffing service revenue
|
| | | | 125,227 | | | | | | 190,389 | | |
Sublease revenue
|
| | | | 264,441 | | | | | | 327,975 | | |
Total
|
| | | ¥ | 593,236 | | | | | ¥ | 964,561 | | |
| | |
Thousands of Yen
|
| |||
| | |
Fair value of
assets/liabilities |
| |||
| | |
Six Month Ended
June 30, 2020 |
| |||
Cash and cash equivalents
|
| | | ¥ | 350 | | |
Property and equipment−net
|
| | | | 51,832 | | |
Goodwill
|
| | | | 84,726 | | |
Asset retirement obligation
|
| | | | (48,018) | | |
Net assets assumed
|
| | | | 88,890 | | |
Fair value of the consideration transferred
|
| | | | 87,266 | | |
Gain from bargain purchases
|
| | | ¥ | 1,624 | | |
| | |
Thousands of Yen
|
| |||
Balance at December 31, 2019 | | | | | | | |
Goodwill
|
| | | ¥ | 78,282 | | |
Acquisitions of relaxation salons*
|
| | | | 84,726 | | |
Balance at June 30, 2020 | | | | | | | |
Goodwill
|
| | | ¥ | 163,008 | | |
| | |
Thousands of Yen
|
| |||||||||
| | |
As of
June 30, 2020 |
| |
As of
December 31, 2019 |
| ||||||
Unsecured bank loans (Due through 2030 with weighted average interest rates of 1.20% as of June 30, 2020, due through 2025 with weighted average interest rates of 1.74% as of December 31, 2019)
|
| | | ¥ | 557,444 | | | | | ¥ | 342,101 | | |
Current portion of long-term borrowings
|
| | | | (177,285) | | | | | | (191,570) | | |
Total long-term borrowings
|
| | | ¥ | 380,159 | | | | | ¥ | 150,531 | | |
| | |
Thousands of Yen
|
| |||
Year ending December 31: | | | | | | | |
2020 (remainder)
|
| | | ¥ | 91,783 | | |
2021
|
| | | | 122,281 | | |
2022
|
| | | | 68,460 | | |
2023
|
| | | | 61,938 | | |
2024
|
| | | | 51,972 | | |
2025 and thereafter
|
| | | | 161,010 | | |
Total
|
| | | ¥ | 557,444 | | |
|
| | |
Thousands of Yen
|
| |||||||||
| | |
Six Months Ended June 30,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Fixed lease cost(a)
|
| | | ¥ | 372,769 | | | | | ¥ | 433,220 | | |
Variable lease cost(b)
|
| | | | 7,476 | | | | | | 14,952 | | |
Short-term cost
|
| | | | 4,458 | | | | | | 12,247 | | |
Total
|
| | | ¥ | 384,703 | | | | | ¥ | 460,419 | | |
| | |
Thousands of Yen
|
| |||||||||
| | |
Six Months Ended June 30,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Cash paid for amounts included in the measurement of lease liabilities: | | | | | | | | | | | | | |
Operating cash flows
|
| | | ¥ | 99,758 | | | | | ¥ | 210,917 | | |
Right-of-use assets obtained in exchange for lease liabilities
|
| | | | 189,240 | | | | | | 240,790 | | |
Weighted average remaining lease term (in years)
|
| | | | 3.1 | | | | | | 3.3 | | |
Weighted average discount rate
|
| | | | 1.45% | | | | | | 1.45% | | |
|
| | |
Thousands of Yen
|
| |||
Year ending December 31: | | | | | | | |
2020 (remainder)
|
| | | ¥ | 351,677 | | |
2021
|
| | | | 616,323 | | |
2022
|
| | | | 400,899 | | |
2023
|
| | | | 168,612 | | |
2024
|
| | | | 85,950 | | |
2025 and thereafter
|
| | | | 68,199 | | |
Total
|
| | | | 1,691,660 | | |
Less: Interest component
|
| | | | 43,661 | | |
Present value of minimum lease payments
|
| | | ¥ | 1,647,999 | | |
| | |
Thousands of Yen
|
| |||||||||
| | |
Six Months Ended June 30,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Fixed sublease income
|
| | | ¥ | 260,194 | | | | | ¥ | 316,217 | | |
Variable sublease income
|
| | | | 5,674 | | | | | | 13,184 | | |
Total
|
| | | ¥ | 265,868 | | | | | ¥ | 329,401 | | |
| | |
Thousands of Yen
|
| |||
Year ending December 31: | | | | | | | |
2020 (remainder)
|
| | | ¥ | 218,828 | | |
2021
|
| | | | 383,353 | | |
2022
|
| | | | 235,877 | | |
2023
|
| | | | 115,395 | | |
2024
|
| | | | 53,623 | | |
2025 and thereafter
|
| | | | 39,572 | | |
Total
|
| | | ¥ | 1,046,648 | | |
| | |
Thousands of Yen
|
| |||||||||||||||||||||
| | |
Relaxation
Salon |
| |
Digital
Preventative Healthcare |
| |
Corporate and
elimination |
| |
Consolidated
|
| ||||||||||||
Six months ended June 30, 2020 | | | | | | | | | | | | | | | | | | | | | | | | | |
Revenues
|
| | | ¥ | 1,344,503 | | | | | ¥ | 11,774 | | | | | ¥ | ― | | | | | ¥ | 1,356,277 | | |
Operating loss
|
| | | | (166,200) | | | | | | (21,016) | | | | | | (247,091) | | | | | | (434,307) | | |
Depreciation and amortization
|
| | | | 14,453 | | | | | | 3,771 | | | | | | 14,881 | | | | | | 33,105 | | |
Six months ended June 30, 2019 | | | | | | | | | | | | | | | | | | | | | | | | | |
Revenues
|
| | | ¥ | 2,010,506 | | | | | ¥ | 21,025 | | | | | ¥ | ― | | | | | ¥ | 2,031,531 | | |
Operating income (loss)
|
| | | | 132,984 | | | | | | (18,200) | | | | | | (52,393) | | | | | | 62,391 | | |
Depreciation and amortization
|
| | | | 17,571 | | | | | | 1,191 | | | | | | 4,031 | | | | | | 22,793 | | |
| | |
Six Months Ended June 30,
|
| |||||||||||||||||||||
| | |
2020
|
| |
2019
|
| ||||||||||||||||||
| | |
Common
|
| |
Class A
|
| |
Common
|
| |
Class A
|
| ||||||||||||
| | |
(Thousands of Yen)
|
| |
(Thousands of Yen)
|
| ||||||||||||||||||
Income (Numerator) | | | | | | | | | | | | | | | | | | | | | | | | | |
Net (loss) income attributable to
shareholders of the Company |
| | | ¥ | (442,971) | | | | | | ― | | | | | ¥ | 54,045 | | | | | | ― | | |
| | |
(Number of shares)
|
| |
(Number of shares)
|
| ||||||||||||||||||
Shares (Denominator) | | | | | | ||||||||||||||||||||
Weighted average shares outstanding
|
| | | | 4,022,500 | | | | | | 1 | | | | | | 3,672,500 | | | | | | 1 | | |
Effect of dilutive instruments:
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Stock options
|
| | | | ― | | | | | | ― | | | | | | 530,605 | | | | | | ― | | |
Weighted average shares for diluted computation
|
| | | | 4,022,500 | | | | | | 1 | | | | | | 4,203,105 | | | | | | 1 | | |
| | |
(Yen)
|
| |
(Yen)
|
| ||||||||||||||||||
(Loss) earnings per common share attributable to
shareholders of the Company |
| | | | | ||||||||||||||||||||
Basic
|
| | | ¥ | (110.12) | | | | | ¥ | (110.12) | | | | | ¥ | 14.72 | | | | | ¥ | 14.72 | | |
Diluted
|
| | | ¥ | (110.12) | | | | | ¥ | (110.12) | | | | | ¥ | 12.86 | | | | | ¥ | 12.86 | | |
| | |
Thousands of Yen
|
| |||||||||||||||||||||
| | |
As of June 30, 2020
|
| |
As of December 31, 2019
|
| ||||||||||||||||||
| | |
Carrying
amount |
| |
Estimated
fair value |
| |
Carrying
amount |
| |
Estimated
fair value |
| ||||||||||||
Long-term borrowings – net of current portion
|
| | | ¥ | (380,159) | | | | | ¥ | (371,327) | | | | | ¥ | (150,531) | | | | | ¥ | (145,600) | | |
| Grant date | | | The date to be determined within one year from the date of the Company’s extraordinary general meeting resolution. | |
| Number of Stock Options to be granted | | | 150,000 | |
| Number of shares to be issued | | | 150,000 shares | |
| Grant date | | | The date to be determined within one year from the date of the Company’s extraordinary general meeting resolution. | |
| Number of Stock Options to be granted | | | 300,000 | |
| Number of shares to be issued | | | 300,000 shares | |
| | | | MEDIROM Healthcare Technologies Inc. | | |||
| | | | By: | | |
/s/ Kouji Eguchi
Name: Kouji Eguchi
Title: Chief Executive Officer |
|
|
Signature
|
| |
Title
|
| |
Date
|
|
|
/s/ Kouji Eguchi
Kouji Eguchi
|
| | Chief Executive Officer and Representative Director (Principal Executive Officer) | | |
November 20, 2020
|
|
|
/s/ Fumitoshi Fujiwara
Fumitoshi Fujiwara
|
| | Chief Financial Officer and Director (Principal Financial and Accounting Officer) | | |
November 20, 2020
|
|
|
/s/ Miki Aoki
Miki Aoki
|
| | Director | | |
November 20, 2020
|
|
|
/s/ Akira Nojima
Akira Nojima
|
| | Independent Director | | |
November 20, 2020
|
|
|
/s/ Tomoya Ogawa
Tomoya Ogawa
|
| | Independent Director | | |
November 20, 2020
|
|
| | | | COGENCY GLOBAL INC. | | |||
| | | | By: | | |
/s/ Colleen A. De Vries
Name: Colleen A. De Vries
Title:
Sr. Vice President on behalf of Cogency Global Inc.
|
|