LFS 6-K
LEIFRAS Co., Ltd. (LFS)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of October 2026
Commission File Number: 001-42877
(Translation of registrant’s name into English)
Ebisu
Garden Place Tower Floor 20
4-20-3, Ebisu, Shibuya-ku
Tokyo, Japan
+81-30-6451-1341
(Address and telephone number, including area code, of Registrant’s principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
| Form 20-F ☒ | Form 40-F ☐ |
Explanatory Note
LEIFRAS Co., Ltd. (the “Company”) is furnishing its unaudited financial statements and notes for the six months ended June 30, 2026. The financial statements and notes are attached as Exhibit 99.1 to this report. Management’s Discussion and Analysis of Financial Condition and Results of Operations for the six months ended June 30, 2026 is attached as Exhibit 99.2 to this report. The Company also hereby furnishes its investor presentation and press release, attached as Exhibit 99.3 and Exhibit 99.4 to this report, respectively.
1
Exhibit Index
| Exhibit No. | Description | |
| 99.1 | Unaudited Interim Condensed Consolidated Financial Statements and Notes of LEIFRAS Co., Ltd. For the Six Months Ended June 30, 2025 and 2026 | |
| 99.2 | Management’s Discussion and Analysis of Financial Condition and Results of Operations | |
| 99.3 | Investor Presentation | |
| 99.4 | Press Release, dated October 7, 2026 | |
| 101. INS | Inline XBRL Instance Document | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| LEIFRAS Co., Ltd. | ||
| Date: October 7, 2026 | By: | /s/ Kiyotaka Ito |
| Name: | Kiyotaka Ito | |
| Title: | Representative Director and Chief Executive Officer | |
3
Exhibit 99.1
LEIFRAS CO., LTD. AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
| December 31, | June 30, | June 30, | ||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| JPY | JPY | US$ | ||||||||||
| (Unaudited) | (Unaudited) | |||||||||||
| ASSETS | ||||||||||||
| CURRENT ASSETS | ||||||||||||
| Cash and cash equivalents | ||||||||||||
| Accounts receivable, net | ||||||||||||
| Inventories, net | ||||||||||||
| Prepaid expenses | ||||||||||||
| Other current assets | ||||||||||||
| TOTAL CURRENT ASSETS | ||||||||||||
| NON-CURRENT ASSETS | ||||||||||||
| Property and equipment, net | ||||||||||||
| Intangible assets, net | ||||||||||||
| Operating lease right-of-use assets | ||||||||||||
| Finance lease right-of-use assets | ||||||||||||
| Long-term deposits | ||||||||||||
| Long-term investment | ||||||||||||
| Deferred tax assets, net | ||||||||||||
| Goodwill | ||||||||||||
| Other non-current assets | ||||||||||||
| TOTAL NON-CURRENT ASSETS | ||||||||||||
| TOTAL ASSETS | ||||||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||
| CURRENT LIABILITIES | ||||||||||||
| Short-term loans | ||||||||||||
| Current portion of long-term loans | ||||||||||||
| Bond payable, current | ||||||||||||
| Accounts payable | ||||||||||||
| Accrued liabilities | ||||||||||||
| Income tax payable | ||||||||||||
| Contract liabilities, current | ||||||||||||
| Operating lease liabilities, current | ||||||||||||
| Finance lease liabilities, current | ||||||||||||
| Other current liabilities | ||||||||||||
| TOTAL CURRENT LIABILITIES | ||||||||||||
| NON-CURRENT LIABILITIES | ||||||||||||
| Long-term loans, net of current portion | ||||||||||||
| Bond payable, non-current | ||||||||||||
| Contract liabilities, non-current | ||||||||||||
| Operating lease liabilities, non-current | ||||||||||||
| Finance lease liabilities, non-current | ||||||||||||
| Assets retirement obligations | ||||||||||||
| Deferred tax liabilities, net | ||||||||||||
| TOTAL NON-CURRENT LIABILITIES | ||||||||||||
| TOTAL LIABILITIES | ||||||||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||||||
| SHAREHOLDERS’ EQUITY | ||||||||||||
| Ordinary shares, shares authorized; shares issued and shares outstanding as of December 31, 2025 and June 30, 2026, respectively. | ||||||||||||
| Additional paid-in capital | ||||||||||||
| Treasury shares, shares as of December 31, 2025 and June 30, 2026, respectively. | ( |
) | ( |
) | ( |
) | ||||||
| Retained earnings | ||||||||||||
| TOTAL SHAREHOLDERS’ EQUITY | ||||||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
F-1
LEIFRAS CO., LTD. AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME
| For the six months ended June 30 | ||||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| JPY | JPY | US$ | ||||||||||
| NET REVENUE | ||||||||||||
| Cost of revenue | ( |
) | ( |
) | ( |
) | ||||||
| GROSS PROFIT | ||||||||||||
| Selling, general, and administrative expenses | ( |
) | ( |
) | ( |
) | ||||||
| INCOME FROM OPERATIONS | ||||||||||||
| OTHER INCOME (EXPENSE) | ||||||||||||
| Interest income | ||||||||||||
| Interest expense | ( |
) | ( |
) | ( |
) | ||||||
| Dividend income | ||||||||||||
| Grant income | ||||||||||||
| Unrealized loss on short-term investment | ( |
) | ||||||||||
| Unrealized gain on long-term investment | ||||||||||||
| Loss (Gain) on disposal of long-lived assets | ( |
) | ||||||||||
| Other income (expense), net | ( |
) | ||||||||||
| Total other income (expense), net | ( |
) | ||||||||||
| INCOME BEFORE INCOME TAXES | ||||||||||||
| PROVISION FOR INCOME TAXES | ||||||||||||
| Current | ( |
) | ( |
) | ( |
) | ||||||
| Deferred | ( |
) | ( |
) | ||||||||
| Total benefit from (provision for) income taxes | ( |
) | ( |
) | ||||||||
| NET INCOME | ||||||||||||
| WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES | ||||||||||||
| Basic | ||||||||||||
| Diluted | ||||||||||||
| EARNINGS PER SHARE | ||||||||||||
| Basic | ||||||||||||
| Diluted | ||||||||||||
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
F-2
LEIFRAS CO., LTD. AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED
STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
| Ordinary shares | Additional | Treasury shares | Total | |||||||||||||||||||||||||
| No. of Shares |
Amount | Paid-in Capital |
No. of Shares |
Amount | Retained Earnings |
Shareholders’ Equity |
||||||||||||||||||||||
| JPY | JPY | JPY | JPY | JPY | ||||||||||||||||||||||||
| Balance as of December 31, 2024 | ( |
) | ( |
) | ||||||||||||||||||||||||
| Net income | - | - | ||||||||||||||||||||||||||
| Balance as of June 30, 2025 | ( |
) | ( |
) | ||||||||||||||||||||||||
| Balance as of December 31, 2025 | ( |
) | ( |
) | ||||||||||||||||||||||||
| Net income | - | - | ||||||||||||||||||||||||||
| Balance as of June 30, 2026 (JPY) | ( |
) | ( |
) | ||||||||||||||||||||||||
| Balance as of June 30, 2026 (US$) | ( |
) | ( |
) | ||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
F-3
LEIFRAS CO., LTD. AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| For the six months ended June 30, | ||||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| JPY | JPY | US$ | ||||||||||
| Cash flows from operating activities | ||||||||||||
| Net income | ||||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities | ||||||||||||
| Depreciation and amortization expense | ||||||||||||
| Provision for expected credit loss | ||||||||||||
| Loss (Gain) on disposal of property and equipment | ( |
) | ( |
) | ||||||||
| Loss on disposal of ROU asset | ||||||||||||
| Provision for inventory impairment | ||||||||||||
| Unrealized loss on short-term investment | ||||||||||||
| Unrealized gain on long-term investment | ( |
) | ( |
) | ||||||||
| Other non-cash expenses | ||||||||||||
| Deferred tax expense | ( |
) | ||||||||||
| Changes in operating assets and liabilities | ||||||||||||
| Accounts receivable, net | ||||||||||||
| Inventories | ( |
) | ( |
) | ||||||||
| Prepaid expenses | ( |
) | ( |
) | ||||||||
| Long-term deposits | ( |
) | ( |
) | ( |
) | ||||||
| Other current assets | ( |
) | ||||||||||
| Other non-current assets | ( |
) | ( |
) | ( |
) | ||||||
| Accounts payable | ( |
) | ( |
) | ( |
) | ||||||
| Accrued liabilities | ||||||||||||
| Contract liabilities | ||||||||||||
| Operating lease liabilities | ( |
) | ( |
) | ||||||||
| Income tax payable | ( |
) | ( |
) | ( |
) | ||||||
| Amount due to a director | ( |
) | ||||||||||
| Other current liabilities | ( |
) | ( |
) | ( |
) | ||||||
| Net cash provided by operating activities | ||||||||||||
| Cash flows from investing activities | ||||||||||||
| Purchase of investment securities | ( |
) | ( |
) | ||||||||
| Purchase of property and equipment | ( |
) | ( |
) | ( |
) | ||||||
| Purchase of intangible assets | ( |
) | ( |
) | ( |
) | ||||||
| Acquisition, net of cash acquired | ( |
) | ( |
) | ||||||||
| Net cash used in investing activities | ( |
) | ( |
) | ( |
) | ||||||
| Cash flows from financing activities | ||||||||||||
| Payment of finance lease liabilities | ( |
) | ( |
) | ( |
) | ||||||
| Repayment of bank loans | ( |
) | ( |
) | ( |
) | ||||||
| Proceeds from bond payable | ||||||||||||
| Repayment of bond payable | ( |
) | ( |
) | ( |
) | ||||||
| Payment of deferred IPO costs | ( |
) | ||||||||||
| Net cash (used in) provided by financing activities | ( |
) | ||||||||||
| Net (decrease) increase in cash | ( |
) | ||||||||||
| Cash at the beginning of period | ||||||||||||
| Cash at the end of the period | ||||||||||||
| Supplementary cash flow information | ||||||||||||
| Cash paid for income taxes, net of refunds | ||||||||||||
| Cash paid for interest expenses | ||||||||||||
| Non-cash financing and investing activities | ||||||||||||
| Operating lease right-of-use assets obtained in exchange for operating lease liabilities | ||||||||||||
| Finance lease right-of-use assets obtained in exchange for finance lease liabilities | ||||||||||||
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
F-4
LEIFRAS CO., LTD. AND SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1 — NATURE OF BUSINESS AND COMPANY
Leifras Co., Ltd. (the “Company” or “Leifras”) was incorporated in Tokyo, Japan, in August 2001. The Company operates its business and manages its subsidiaries with a focus on providing services related to operation of sports schools and organizing events for children, selling sports equipment, managing extracurricular activities in elementary and junior high schools, offering sports therapy for children with developmental disabilities, and providing health exercise guidance for the elderly.
The unaudited interim condensed consolidated financial statements reflect the activities of each of the following entities:
| Name | Background | Ownership | Principal activities | |||
|
● A Japan company
● Incorporated on August 28, 2001 |
- | Engaged in management and operation of sports clubs, sports classes and cultural classes, management of extracurricular activities in elementary and junior high schools, sports and healthcare facility management, selling sports equipment, and investment holding | ||||
|
● A Japan company
● Incorporated on April 9, 2019
● Liquidated on June 15, 2026 |
Engaged in travel business based on the Travel Agency Act | |||||
|
● A Japan company
● Incorporated on January 6, 2020 |
Engaged in management of after-school childcare facilities | |||||
|
● A Japan company
● Incorporated on April 9, 1992
● Acquired on June 1, 2026 |
Engaged in management and operation of sports clubs, sports classes, and cultural classes |
F-5
Note 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES
Initial Public Offering
On October 10, 2025, the Company completed its initial public offering (“IPO”) of American Depositary Shares (“ADSs”), representing ordinary shares, at a public offering price of $ per ADS. The Company received net proceeds of approximately JPY
Basis of presentation
The unaudited interim condensed consolidated financial statements do not include all the information and footnotes required by accounting principles generally accepted in the United States of America (“U.S. GAAP” or “GAAP”) for complete consolidated financial statements. Certain information and note disclosures normally included in the annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted consistent with Article 10 of Regulation S-X. In the opinion of the Company’s management, the unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and include all adjustments, in normal recurring nature, as necessary for the fair statement of the Company’s financial position as of June 30, 2026, and results of operations and cash flows for the six months ended June 30, 2025 and 2026. The unaudited interim condensed consolidated balance sheet as of June 30, 2026 has been derived from the unaudited consolidated financial statements at that date but does not include all the information and footnotes required by U.S. GAAP. Interim results of operations are not necessarily indicative of the results expected for the full fiscal year or for any future period. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of and for the fiscal years ended December 31, 2024 and 2025, and related notes included in the Company’s audited consolidated financial statements.
Principles of consolidation
The unaudited interim condensed consolidated financial statements include the financial statements of the Company and its subsidiaries. A subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting power; has the power to appoint or remove the majority of the members of the board of directors; and has the power to cast majority of votes at the meeting of the board or to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders. All inter-company transactions have been eliminated upon consolidation.
Use of estimates and assumptions
In preparing the unaudited interim condensed consolidated financial statements in conformity with U.S. GAAP, the management is required to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited interim condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. These estimates are based on information available as of the date of the unaudited interim condensed consolidated financial statements. Significant estimates required to be made by management include, but are not limited to, allowance of expected credit losses, inventory valuation, useful lives of property, equipment and intangible assets, the impairment of long-lived assets and goodwill, provision of refund liabilities, valuation of share-based compensation, valuation allowance of deferred tax assets, uncertain income tax positions, the period during which revenue for registration fees is recognized over time, and implicit interest rate of operating and finance leases. Actual results could differ from those estimates, as the current economic environment has increased the degree of uncertainty inherent in these estimates and assumptions.
Business combinations
The purchase price of an acquired company is allocated between tangible and intangible assets acquired and liabilities assumed from the acquired business based on their estimated fair values, with the residual of the purchase price recorded as goodwill. Transaction costs associated with business combinations are expensed as incurred and are included in general and administrative expenses in the Company’s unaudited interim condensed consolidated statements of income. The results of operations of the acquired business are included in the Company’s results of operations from the date of acquisition.
F-6
Convenience translation
Cash and cash equivalents
For purposes of the statements of cash flows, the Company considers short-term, highly liquid investments that are readily convertible to known amounts of cash and so near their maturity that they present an insignificant risk of changes in value due to changes in interest rates to be cash equivalents. Generally, investments with original maturities of three months or less qualify as cash equivalents. Demand deposits and other accounts from which funds can be withdrawn on demand without any risk of principal loss are also treated as cash equivalents. The Company maintains substantially all of its bank accounts in Japan. Cash balances in bank accounts in Japan are insured by the Deposit Insurance Corporation of Japan, subject to certain limitations.
As of December 31, 2025, the Company did
Accounts receivable, net
Accounts receivable includes trade accounts due from customers. Accounts are considered overdue after 30 days. Management reviews its receivables on a regular basis to determine if the allowance for expected credit loss is adequate and provides allowance when necessary. The allowance is based on management’s best estimates of specific losses on individual customer exposures, as well as the historical trends of collections. Account balances are charged off against the allowance after all means of collection have been exhausted and the likelihood of collection is not probable. As of December 31, 2025 and June 30, 2026, the Company made JPY
Investments in securities
The Company’s investments in equity securities of publicly traded companies are accounted for in accordance with ASC 321, Investments—Equity Securities. These investments are measured at fair value using quoted market prices in active markets. Unrealized gains and losses resulting from changes in fair value are recognized in earnings within other income (expense), net, in the unaudited interim condensed consolidated statements of income. The Company classifies its investments in equity securities as short-term or long-term based on management’s intent and ability to sell the investments within one year from the balance sheet date.
Inventories, net
Inventories, net are stated at the lower of cost or net realizable value, on a weighted average basis. Costs include mainly the cost of merchandise inventories such as uniforms and sports equipment. Any excess of the cost over the net realizable value of each item of merchandise inventories is recognized as a provision for diminution in the value of merchandise inventories. Net realizable value is the estimated selling price in the normal course of business less any costs to sell products. The Company periodically evaluates merchandise inventories for their net realizable value adjustments and reduces the carrying value of those merchandise inventories that are obsolete or in excess of the forecasted usage to their estimated net realizable value based on various factors including aging and expiration dates, as applicable, taking into consideration historical and expected future product sales.
F-7
Prepaid expenses
Prepaid expenses mainly comprise an advance payment for insurance fees, prepaid rent, software subscription and IT service fees, equipment rental fees, and web advertising fees. These expenses are initially recognized as assets and are subsequently transferred to the income statement over time. Management reviews its prepaid expenses on a regular basis to determine if the allowance is adequate and adjusts the allowance when necessary.
Other current assets
Other current assets primarily consist of deferred expenses, including promotional consumables, clothing, and sports equipment. Deferred expenses are initially recorded as assets on the unaudited interim condensed consolidated balance sheet and subsequently expensed over time as they are used. These costs are incurred for supplies to be utilized in future periods. As of December 31, 2025 and June 30, 2026, the total deferred expenses were JPY
Property and equipment, net
Property and equipment are stated at cost less accumulated depreciation and impairment if applicable. Depreciation is computed using the straight-line method or declining balance method over the estimated useful lives of the assets. Cost represents the purchase price of the asset and other costs incurred to bring the asset into its intended use. The estimated useful lives are as follows:
| Useful Life | ||
| Leasehold improvements | ||
| Building and facilities | ||
| Motor vehicle | ||
| Tools and equipment |
Expenditures on maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expense as incurred. Expenditures for major renewals and betterments which substantially extend the useful life of assets are capitalized.
Intangible assets, net
Intangible assets with finite lives are initially recorded at cost and amortized on a straight-line basis over the estimated economic useful lives of the respective assets. Acquired intangible assets from a business combination are recognized and measured at fair value at the time of acquisition. Those assets represent assets with finite lives and are further amortized on a straight-line basis over the estimated economic useful lives of the respective assets. Certain acquired trade names are determined to have an indefinite useful life and are not amortized but instead tested for impairment at least annually. The estimated useful lives of intangible assets with finite lives are as follows:
| Useful Life | ||
| Trademarks | ||
| Software | ||
| Customer-related intangible assets |
F-8
Impairment for long-lived assets
Long-lived assets, including property and equipment and intangible assets with finite lives, are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. The Company assesses the recoverability of the assets based on the undiscounted future cash flows the assets are expected to generate and recognizes an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. If an impairment is identified, the Company will reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. As of December 31, 2025 and June 30, 2026,
Goodwill
Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations. In accordance with ASC Topic 350, “Intangibles—Goodwill and Other,” goodwill is assigned to the Company’s reporting units as of the acquisition date and is tested for impairment at least annually, or more frequently if events or changes in circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount.
The Company has the option to first assess qualitative factors to determine whether it is necessary to perform a quantitative goodwill impairment test in accordance with ASC 350-20. In performing the qualitative assessment, the Company considers factors including industry and market conditions, overall financial performance, and other entity-specific events and circumstances.
During the six months ended June 30, 2026, the Company recognized goodwill in connection with the acquisitions of Well Resource and Tokai Sports. Such goodwill was assigned to the applicable reporting units as of the respective acquisition dates. As of June 30, 2026, the Company evaluated whether any events or changes in circumstances indicated that it was more likely than not that the fair value of the applicable reporting units was less than their carrying amounts and concluded that no such impairment indicators existed.
Operating leases
The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, operating lease liability, and operating lease liability, non-current in the Company’s unaudited interim condensed consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. When determining the lease term, the Company includes options to extend or terminate the lease when it is reasonably certain that it will exercise that option, if any. As the Company’s leases do not provide an implicit rate, the Company used an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company has elected to adopt the following lease policies in conjunction with the adoption of ASU 2016-02: (i) for leases that have lease terms of 12 months or less and do not include a purchase option that is reasonably certain to exercise, the Company elected not to apply ASC 842 recognition requirements; and (ii) the Company elected to apply the package of practical expedients for existing arrangements entered into prior to April 1, 2020 to not reassess (a) whether an arrangement is or contains a lease, (b) the lease classification applied to existing leases, and(c) initial direct costs.
Finance leases
Finance lease assets are subsequently amortized using the straight-line method from the lease commencement date to the earlier of the end of its useful life or the end of the lease term unless the lease transfers ownership of the underlying asset to the Company or the Company is reasonably certain to exercise an option to purchase the underlying asset. In those cases, the finance lease assets are amortized over the useful life of the underlying asset. Accordingly, the assets leased under the finance leases are included in finance lease right-of-use assets, and amortization thereon is recognized in operating expenses in the financial statements. When the Company makes its contractually required payments under finance leases, the Company allocates a portion to reduce the finance lease obligation and a portion is recognized as interest expense.
F-9
Asset retirement obligations
The Company accounts for asset retirement obligations in accordance with ASC 410-20, Asset Retirement Obligations. ASC 410-20 requires the Company to record the fair value of an asset retirement obligation as a liability in the period in which it incurs an obligation associated with the retirement of tangible long-lived assets that result from the operation use of the leased assets. Asset retirement obligations consist of estimated restoration costs to be incurred by the Company in the future once the economic life of its leased assets is reached. The estimated fair value of the asset retirement obligation is based on the current cost escalated at an inflation rate and discounted at a credit adjusted risk-free rate. This liability is capitalized as part of the cost of the related asset and amortized over its useful life. The liability is accreted until the Company settles the obligation.
Deferred IPO costs
Pursuant to ASC 340-10-S99-1, costs that are directly attributable to a proposed offering of equity securities are capitalized as deferred offering costs. Upon the completion of the offering, such costs are recorded as a reduction of the net proceeds and charged against additional paid-in capital. These costs primarily consist of legal, accounting, consulting, filing fees with the U.S. Securities and Exchange Commission, and printing fees directly associated with the registration and offering process.
On October 10, 2025, the Company completed its IPO of ADSs at a public offering price of $ per ADS, generating net proceeds of JPY
Upon the completion of the IPO, total deferred offering costs of JPY
As of December 31, 2025 and June 30, 2026, all deferred offering costs were charged against the net proceeds upon the completion of IPO on October 10, 2025.
Long-term deposits
Long-term deposits primarily consist of security deposits for the leases of headquarters, branch offices, and operational facilities, as well as guaranteed deposits for school club activity support business, travel agency indemnity deposits, and operating guarantee deposits and outsourcing deposits. These amounts are recorded based on the contractual value and are carried to the balance sheet as non-current assets.
Other non-current assets
Other non-current assets primarily consist of long-term prepaid expenses, which mainly comprise advance payments for software subscription fees, as well as key money for property rentals. These expenses are initially recognized as assets and are subsequently transferred to the income statement over time.
Fair value measurement
The accounting standard regarding fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company.
The accounting standards define fair value, establish a three-level valuation hierarchy for disclosures of fair value measurement, and enhance disclosure requirements for fair value measures. The three levels are defined as follow:
| ● | Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. |
F-10
| ● | Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. |
| ● | Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. |
The following table presents information about the Company’s financial assets and liabilities that were measured at fair value on a recurring basis as of December 31, 2025 and June 30, 2026 and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.
Assets and liabilities measured on a recurring basis or disclosed at fair value as of December 31, 2025 and June 30, 2026 are summarized below:
| Fair value measurement or disclosure as of December 31, 2025 using |
||||||||||||||||
| Total Fair Value as of December 31, 2025 |
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
|||||||||||||
| JPY | JPY | JPY | JPY | |||||||||||||
| Fair value disclosure1 | ||||||||||||||||
| Bond payable | ||||||||||||||||
| Fair value measurements on a recurring basis | ||||||||||||||||
| Long-term investments | ||||||||||||||||
| Fair value measurement or disclosure as of June 30, 2026 using |
||||||||||||||||||||
| Total Fair Value as of June 30, 2026 |
Total Fair Value as of June 30, 2026 |
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
||||||||||||||||
| JPY (Unaudited) |
US$ (Unaudited) |
JPY (Unaudited) |
JPY (Unaudited) |
JPY (Unaudited) |
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| Fair value disclosure1 | ||||||||||||||||||||
| Bond payable | ||||||||||||||||||||
| Fair value measurements on a recurring basis | ||||||||||||||||||||
| Long-term investments | ||||||||||||||||||||
| 1 |
F-11
Fair value estimates are made at a specific point in time based on relevant market information about the financial instruments. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.
Contract liabilities
Contract liabilities are the obligation to transfer products or services to customers for which the Company has received the consideration or has billed the customers. The Company’s contract liabilities are non-refundable payments collected in advance from customers. Contract liabilities are reclassified to revenue at the point at which products or services are delivered to customers.
Bond payable
Bond payable represents the contractual obligation of the issuer to make periodic interest payment and principal repayments at maturity. The bondholders have a fixed claim on the issuer’s assets and cash flows, similar to traditional debt instruments. If the contractual terms of the bond payable primarily represent a liability, the bonds are recognized as a liability at their fair value at the issuance date. Transaction costs directly attributable to the issuance are typically allocated to the liability and amortized over the bond’s term and the fair value has been disclosed in the fair value measurement. The bond payable is measured at amortized cost using the effective interest rate method. Interest expense is recognized over the bond’s term based on the effective interest rate, which reflects the market rate at the issuance date.
Revenue Recognition
The Company generates revenue primarily from membership, events hosting, school club support, after-school daycare services, and other fees collected from services provided. Revenue is recognized when a contract exists between the Company and a customer and upon transfer of control of promised products or services to such customer in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. The Company enters into contracts that can include various combinations of products and services, which may be capable of being distinct and accounted for as separate performance obligations. Revenue is recognized as a net of provision for refund and any taxes collected from customers, which are subsequently remitted to governmental authorities. The Company has adopted ASC 606, “Revenue from Contracts with Customers.” ASC 606 establishes principles for reporting information about the nature, amount, timing, and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. This guidance provides a five-step analysis in determining when and how revenue is recognized. Under the guidance, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In addition, the guidance requires the disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The Company is a principal and records revenue on a gross basis when the Company is primarily responsible for fulfilling the goods and services, has discretion in establishing pricing, and controls the promised goods and services before transferring that service to customers. The Company’s continuing operations currently generate revenue from the following main sources:
(i) Sports school business
Membership revenue: Membership revenue comprises registration fees, monthly fees, and annual fees. The Company cultivates professional coaches and provides high-quality professional sports lessons to its customers, who are children registered as the Company’s members. The typical payment terms for membership revenue set forth in the invoice are within 30 days of the invoice date.
F-12
The Company accounts for one-time, non-refundable registration fees as fees for facilitating membership registration. The Company provides administrative support, including creating individual member accounts, performing identity verification and health assessment, and providing onboarding materials and access to member information platforms. The Company recognizes the registration fees ratably over the average duration of membership life, which is generally 1 to 2 years, and reassesses the duration annually based on historical data. The registration fees were JPY
The Company accounts for membership annual fee revenue, net of refunds, on a deferred basis, ratably over the one-year membership period. The Company will bill and receive fixed annual membership revenue from students but not earned as contract liability on an annual basis and recognized over time, based on a straight-line basis over the school year or service period, as the customers simultaneously receive and consume the benefits of these services throughout the service period.
The Company accounts for monthly fees, each membership registration contract represents a series of distinct services, which are delivery of various courses. The services have substantially the same pattern of transfer to the students, and as such, they are considered as a single performance obligation. The transaction price is stated in the contract and known at the time of contract inception. The monthly fees are generally collected in advance and are initially recorded as contract liabilities.
There is no variable consideration in the membership registration contracts with customers, except that the Company offers certain refunds for unattended classes to students who decided to withdraw from a course.
The Company estimates the amount of such refund liability based on historical refund rates on a portfolio basis using the expected value method, and such refund liability is recorded under accrued expenses and other current liabilities on the unaudited interim condensed consolidated balance sheets.
Event hosting: The Company offers event hosting service to customers, including but not limited to services like organizing sport-related events, student camps during school holidays, and day trips, which can cater to different budgets and preferences. To deliver such a service, the Company coordinates and integrates services from selected suppliers such as transportation, accommodation, and tour guide. The typical payment terms for event hosting revenue set forth in the invoices are within 30 days of the invoice date.
The Company enters into a distinct service contract with each customer for the service provided. The whole event hosting service is determined as a single performance obligation with a fixed total consideration as the customer benefits from a series of integrated services from selected suppliers, which are not separately identifiable.
The Company recognizes revenue at a point in time when the performance obligation is satisfied. The Company offers refund options to customers for event hosting fees received in advance for offline events that were subsequently cancelled due to weather conditions or natural disasters.
The Company estimates the amount of such refund liability based on historical refund rates on a portfolio basis using the expected value method, which is recorded under accrued expenses and other current liabilities on the unaudited interim condensed consolidated balance sheets.
Other revenue: Other revenue comprised primarily of non-profit organization (“NPO”) sales, royalty fees from franchises, sponsorship fees, other school revenue, and goods sales. The typical payment terms for other revenue set forth in the invoices are within 30 days of the invoice date.
NPO sales are recognized when the respective services are rendered to the customers or partner organizations, in accordance with the contract terms.
F-13
The Company receives certain royalty fees from franchisees for licensing franchises to operate under the Company’s trademarks and also receives certain other support and maintenance fees professional maintenance and support for the franchisees’ sports school business. The royalty fee is calculated to be a percentage of the revenue earned by a franchisee, which percentage is agreed in the payment schedule. The support and maintenance fees are billed according to negotiated billing terms and revenue is recognized in accordance with the fulfillment of the performance obligations as set forth in the terms and conditions set forth in customer contracts.
Sponsorship fees are recognized over the period specified in the sponsorship agreements as the performance obligations are fulfilled.
The Company sells sports equipment to customers. Each transaction represents a single performance obligation. The billing terms for sales of sports equipment are billed when equipment is delivered and is recognized at a point in time.
The Company offers special guidance services to the customers, mainly by dispatching coaches and instructors to kindergartens and nurseries to conduct sports and gymnastics classes, which are included in other school revenue. The fee is based on payment schedules specifying agreed rates according to the number of classes conducted each month. Each class represents a single performance obligation. The revenue from special guidance services is recognized over the contract term as customers receive and consume benefits of such services as provided. The special guidance services are billed monthly.
(ii) Social business
The Company provides a variety of customized services to municipalities, other governmental authorities, and schools. The Company offers two primary services under the social business umbrella through fixed-fee contracts: school club activity support service and after-school daycare service. The billing terms for the social business are billed on a monthly, quarterly, or annual basis. The typical payment terms for social business set forth in the invoices are 30 to 60 days. The school club activity support service involves managing student club activities for elementary and middle schools, based on contracts with the schools or relevant municipalities or education boards. Service rendered includes providing sports, music, and other cultural lessons and coaching services, with revenue recognized over time on a straight-line basis throughout the contract period as customers receive and benefits from the services continuously. For certain social business contracts, revenue is recognized at a point in time when control of the service is transferred to the customer, which generally occurs upon completion of the service in accordance with the contract terms. Similarly, the after-school daycare service supports children with disabilities or developmental needs, enhancing their daily living skills and social abilities through soccer therapy, known for its developmental benefits. Revenue from after-school daycare service is also recognized over time throughout the contract period, as the benefits are continuously provided to and consumed by the customers.
Cost of revenue
Cost of revenue primarily consists of salaries and related welfare expenses for full-time coaches and instructors, school facility rental fees, event hosting related expenses, the cost of sports equipment sold, and related expenses directly used in the provision of services and goods to customers.
Selling, general, and administrative expenses
Selling, general, and administrative expenses include all operating costs of the Company, except cost of revenue, as described above. As a result, the majority of directors’ compensation and employee payroll-related expenses, commission fees, depreciation, travelling fees, system maintenance fees, advertising expenses, and operating lease expenses are included in selling, general, and administrative expenses. Since these expenses serve similar functions and pertain to the same aspects of the business, the Company has consolidated them into a single line item under this title.
F-14
Advertising expenses
The Company expenses advertising costs as they incurred. Total advertising expenses were JPY
Grant income
The Company recognizes grant income when the related grants are received because such grants are not subject to any past or future performance or use conditions and are not subject to future refunds. Grant income received and recognized totaled JPY
Income taxes
The Company accounts for current income taxes in accordance with the laws of the relevant tax authorities. Deferred income taxes are recognized when temporary differences exist between the tax bases of assets and liabilities and their reported amounts in the unaudited interim condensed consolidated financial statements. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. No significant penalties or interest relating to income taxes have been incurred for the six months ended June 30, 2025 and 2026.
Treasury shares
The Company accounts for treasury shares using the cost method. Under this method, the cost incurred to purchase the shares is recorded in the treasury shares account in shareholders’ equity. At retirement of the treasury shares, the ordinary shares account is charged only for the aggregate par value of the shares. The excess of the acquisition cost of treasury shares over the par value reduces additional paid-in capital.
The Company computes earnings per share (“EPS”) in accordance with ASC 260, “Earnings per Share.” ASC 260 requires companies to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average ordinary share outstanding for the period. Diluted EPS presents the dilutive effect on a per share basis of the potential ordinary shares (for instance, convertible securities, options, and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential ordinary shares that have an anti-dilutive effect (that is, those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. For the six months ended June 30, 2025 and 2026, the Company included incremental dilutive ordinary shares of , in the calculation of diluted EPS.
| For the six months ended, |
||||||||
| June 30 | ||||||||
| 2025 | 2026 | |||||||
| Weighted average number of common shares outstanding - basic | ||||||||
| Dilutive effect of stock options | ||||||||
| Weighted average number of common shares outstanding - diluted | ||||||||
F-15
Share-based compensation
The Company applies ASC 718, Compensation—Stock Compensation (“ASC 718”), to account for its share-based payments to employees and non-employees. In accordance with ASC 718, the Company determines whether an award should be classified and accounted for as a liability award or equity award. All the Company’s share-based awards to employees and non-employees are classified as equity awards and are recognized in the unaudited interim condensed consolidated financial statements based on their grant date fair values. The Company records share-based compensation expenses for employees and non-employees at fair value on the grant date. Share-based compensation is recognized net of forfeitures, as amortized expense on a straight-line basis over the requisite service period, which is the vesting period.
The Company accounts for share-based compensation expenses using an estimated forfeiture rate at the time of grant and revising, if necessary, in subsequent periods if actual forfeitures differ from initial estimates. Share-based compensation expenses are recorded net of estimated forfeitures such that expenses are recorded only for those share-based awards that are expected to vest.
Warrants
The Company evaluates its warrants as either equity-classified or liability-classified derivatives in accordance with ASC 480, Distinguishing Liabilities from Equity and ASC 815, Derivatives and Hedging.
Warrants that are determined to be equity-classified are recorded within additional paid-in capital at their fair value on the date of issuance, and are not subject to subsequent remeasurement. The Company determined that the representative’s warrants issued in connection with the IPO met the criteria for equity classification. The fair value of these warrants was estimated using the Black-Scholes option-pricing model.
Related parties
Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence, such as a family member or relative, a shareholder, or a related corporation.
Commitments and contingencies
In the ordinary course of business, the Company is subject to contingencies, including legal proceedings and claims arising out of the business that relate to a wide range of matters, such as government investigations and tax matters. The Company recognizes a liability for such a contingency if it determines it is probable that a loss has occurred, and a reasonable estimate of the loss can be made. The Company may consider many factors in making these assessments including historical and the specific facts and circumstances of each matter.
Segment reporting
ASC 280, “Segment Reporting,” establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organizational structure as well as information about geographical areas, business segments, and major customers in unaudited interim condensed consolidated financial statements for detailing the Company’s business segments.
Based on the criteria established by ASC 280, the Company’s chief operating decision-maker has been identified as its Chief Executive Officer, who reviews the operating results of each segment when making decisions about allocating resources and assessing the performance. The Company has determined that it has two reportable segments: (1) sports school business and (2) social business. The Company’s long-lived assets are all located in Japan and substantially all of the Company’s revenue is derived from Japan. Therefore, no geographical segments are presented.
F-16
Concentration of risks
Concentration of credit risk
Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and accounts receivable. The Company places its cash with financial institutions with high credit ratings and quality.
Accounts receivable primarily comprise of amounts receivable from the service customers. To reduce credit risk, the Company performs ongoing credit evaluations of the financial condition of these service customers. The Company establishes a provision for expected credit loss based upon estimates, factors surrounding the credit risk of specific service customers and other information.
Concentration of customers
As of December 31, 2025 and June 30, 2026, no customer accounted for more than
For the six months ended June 30, 2025, no customer accounted for more than
Concentration of vendors
As of December 31, 2025, Vendors A and B accounted for
For the
six months ended June 30, 2025 and 2026, no vendor accounted for more than
Recently Adopted or Issued Accounting Pronouncements
The Company considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued. Under the JOBS Act, the Company meets the definition of an emerging growth company and has elected the extended transition period for complying with new or revised accounting standards, which delays the adoption of these accounting standards until they apply to private companies.
In November 2024, the Financial Accounting Standards Board (the “FASB”) issued ASU 2024-03 – Income Statement – Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) to improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion) in commonly presented expense captions (such as cost of sales, SG&A, and research and development). This ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted.
In January 2025, the FASB issued ASU 2025-01 – Income Statement – Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Effective Date to clarify the Effective Date. This ASU clarifies the effective date of ASU 2024-03, specifying that all public business entities must adopt the guidance for annual reporting periods beginning after December 15, 2026, and interim periods within those annual periods beginning after December 15, 2027, with early adoption permitted. As these standards relate solely to expense disaggregation disclosures, their adoption is not expected to affect the recognition or measurement of amounts in the Company’s consolidated financial statements, but may result in additional financial statement disclosures.
F-17
In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. This ASU provides a practical expedient for all entities and an accounting policy election for entities other than public business entities, to simplify the measurement of expected credit losses for current accounts receivable and current contract assets arising from revenue transactions. This standard becomes effective for the Company for annual reporting periods beginning after December 15, 2025. The Company is currently evaluating the impact of this new standard on the Company’s unaudited interim condensed consolidated financial statements.
In October 2025, the FASB issued ASU 2025-10, “Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities.” This ASU provides guidance on the accounting for government grants received by business entities by requiring disclosures about the nature of the grants, the accounting policies used to account for the grants, and the line items on the financial statements that are affected by the grants. This ASU is effective for the Company for fiscal years beginning after December 15, 2025. The Company is currently evaluating the impact of this new standard on the Company’s unaudited interim condensed consolidated financial statements.
In November 2025, the FASB issued ASU 2025-11, “Interim Reporting (Topic 270): Narrow-Scope Improvements.” This ASU provides narrow-scope improvements to Topic 270 to clarify the interim reporting requirements and improve the consistency of information provided in interim periods. This ASU is effective for the Company for fiscal years beginning after December 15, 2025, and interim periods within those fiscal years. The Company does not anticipate that the adoption of this standard will have a significant impact on the Company’s unaudited interim condensed consolidated financial statements.
In December 2025, the FASB issued ASU 2025-12, “Codification Improvements.” This ASU provides amendments to clarify the Codification, correct unintended application of guidance, and make minor improvements to the Codification that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. The effective date varies depending on the specific amendment. The Company does not anticipate that the adoption of this standard will have a significant impact on the Company’s unaudited interim condensed consolidated financial statements.
The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company’s unaudited interim condensed consolidated balance sheets, unaudited interim condensed consolidated statements of income, and unaudited interim condensed consolidated statements of cash flows.
Note 3 — BUSINESS COMBINATIONS
The Company accounts for business combinations using the acquisition method of accounting in accordance with ASC 805, Business Combinations. The consideration transferred in an acquisition is measured at fair value, and the identifiable assets acquired and liabilities assumed are recognized at their acquisition-date fair values.
Well Resources Co., Ltd. (Business Transfer)
On
May 1, 2026, the Company completed a business transfer agreement to acquire the operations and related assets/liabilities of four child
development support and after-school daycare facilities located in Miyagi Prefecture from Well Resources Co., Ltd. (“Well Resources”)
for a total cash consideration of JPY
Tokai Sports Co., Ltd.
On
June 1, 2026, the Company acquired 100% of the outstanding shares of Tokai Sports Co., Ltd. (“Tokai Sports”), a company engaged
in operating sports schools and events for children, for a total cash consideration of JPY
F-18
Consideration Transferred and Purchase Price Allocation
The following table summarizes the consideration transferred, the recognized fair values of identifiable net assets acquired, and the goodwill recognized as of the respective acquisition dates:
| Well Resources | Tokai Sports | Total | ||||||||||
| JPY | JPY | JPY | ||||||||||
| Cash consideration transferred | ||||||||||||
| Recognized amounts of identifiable assets acquired: | ||||||||||||
| Cash and bank deposits | ||||||||||||
| Accounts receivable | ||||||||||||
| Advance payments | ||||||||||||
| Prepaid expenses | ||||||||||||
| Suspense payments and other current assets | ||||||||||||
| Property and equipment, net | ||||||||||||
| Telephone subscription rights | ||||||||||||
| Deposits and guarantees | ||||||||||||
| Operating lease right-of-use assets | ||||||||||||
| Finance lease right-of-use assets | ||||||||||||
| Intangible assets, net | ||||||||||||
| Deferred tax assets | ||||||||||||
| Liabilities assumed: | ||||||||||||
| Accounts payable and accruals | ( | ) | ( | ) | ||||||||
| Other current liabilities | ( | ) | ( | ) | ||||||||
| Deposits received | ( | ) | ( | ) | ||||||||
| Accrued liabilities and other | ( | ) | ( | ) | ||||||||
| Accrued liabilities | ( | ) | ( | ) | ( | ) | ||||||
| Operating lease liabilities, current | ( | ) | ( | ) | ( | ) | ||||||
| Finance lease liabilities, current | ( | ) | ( | ) | ( | ) | ||||||
| Operating lease liabilities, non-current | ( | ) | ( | ) | ( | ) | ||||||
| Finance lease liabilities, non-current | ( | ) | ( | ) | ( | ) | ||||||
| Deferred tax liabilities | ( | ) | ( | ) | ( | ) | ||||||
| Total identifiable net assets acquired | ||||||||||||
| Goodwill recognized | ||||||||||||
The goodwill resulting from these acquisitions is primarily attributable to expected operational synergies, assembled workforce, and future sales growth potential from expanded service offerings.
Acquisition-related
costs associated with these acquisitions were JPY
Since
their respective acquisition dates through June 30, 2026, the amounts of net revenue and net income of Tokai Sports included in the Company’s
consolidated statements of income were JPY
Supplemental pro forma revenue and earnings information has not been presented because the acquisitions of Well Resources and Tokai Sports, individually and in the aggregate, are not material to the Company’s consolidated financial statements.
F-19
Note 4 — NET REVENUE
The Company’s net revenue consisted of the following:
| For the six months ended June 30, | ||||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| JPY | JPY | US$ | ||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||
| Sports school business – Membership | ||||||||||||
| Sports school business – Events | ||||||||||||
| Sports school business – Others | ||||||||||||
| Social business | ||||||||||||
| Subtotal | ||||||||||||
| Add: reversal of sales refund provision | ( |
) | ||||||||||
| Total | ||||||||||||
| For the six months ended June 30, | ||||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| JPY | JPY | US$ | ||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||
| Timing of revenue recognition | ||||||||||||
| Transferred over time | ||||||||||||
| Transferred at a point in time | ||||||||||||
| Total | ||||||||||||
| * | Provision and Reversal for sales refund |
The “reversal (provision) of sales refund” represents the provision for refund for sports school business services. The refund liability is based on estimates made from past refund historical data. The Company will re-evaluate the provision for refund liability based on the estimates to match the actual claims and expects to make use of the refund liability over the next operating period.
The “reversal of sales refund” represents the release of refund obligations initially recorded under ASC 606-10-55-23 through 55-27 for estimated customer refunds. During the reporting period, certain customers did not exercise their refund rights, and the related refund liabilities were reversed. Such reversals are recognized as an increase in revenue in the period in which the change in estimate occurs, consistent with ASC 606-10-32-14. The amount represents the reversal of previously recognized refund liabilities as certain customer refunds were no longer expected to occur. Such reversals are recorded as an increase to revenue in the period of change in estimate.
Liabilities for refund are included in “Other current liabilities” and were JPY
F-20
Note 5 — Contract Liabilities
Contract liabilities primarily represent advance payments received from customers. The opening and closing balances of contract liabilities are as follows:
| As of June 30, | ||||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| JPY | JPY | US$ | ||||||||||
| Beginning balance | ||||||||||||
| Deposits received from customers | ||||||||||||
| Amounts recognized to revenue | ( | ) | ( | ) | ( | ) | ||||||
| Less: refunds to customers | ( | ) | ||||||||||
| Ending balance | ||||||||||||
Contract
liabilities primarily consist of membership fees, registration fees and other amounts received from customers before the related services
are provided. The Company recognizes these amounts as revenue as it satisfies the related performance obligations. During the six months
ended June 30, 2026 and 2025, the Company recognized revenue of JPY
Note 6 — SEGMENT REPORTING
The Company follows ASC 280, “Segment Reporting,” to report information about operating segments. The Company’s reportable segments are components of the Company for which separate financial information is available and evaluated regularly by the Company’s Chief Executive Officer, the Chief Operating Decision-Maker (“CODM”), Mr. Kiyotaka Ito, the representative director and CEO of the Company, in deciding how to allocate resources and in assessing performance. The Company has identified two reportable segments as follows:
Sports school business: This segment focuses on providing services related to the operation of sports schools and organizing events for children.
Social business: This segment provides services including managing extracurricular activities in schools, sports therapy for children with disabilities, and health exercise guidance.
Segment profit or loss measure
The CODM evaluates segment performance based on “direct operating profit,” which is defined as segment net revenue less directly attributable cost of revenue and segment-specific selling, general and administrative expenses. Segment-specific expenses include, but are not limited to, instructor salaries, facility leasing costs, and local marketing expenses. Certain corporate-level selling, general and administrative expenses are excluded from segment results and instead reported within “corporate expenses.” These corporate expenses consist primarily of headquarters-related administrative costs, professional fees (such as audit and legal fees), and other general expenses that are not specifically identifiable to any reportable segment. These costs are not allocated to the reportable segments.
Segment assets
The CODM does not regularly review segment assets for the purposes of making decisions about allocating resources or assessing performance. Accordingly, no measure of segment assets is disclosed.
F-21
Adoption of ASU 2023-07
In accordance with ASU 2023-07, the Company has identified “salaries and welfare expenses” as a significant segment expense (“SSE”) for both segments. These expenses are regularly reviewed by the CODM, are included in the measure of segment profit or loss, and serve as the primary driver in evaluating segment performance and determining resource allocation, as the Company’s business model is highly dependent on specialized human resources. This expense is presented for each reportable segment in the segment disclosure tables below. “Other Expenses” within the segment results primarily consist of travel expenses, communication costs, and small-tool supplies required for local operations.
Segment performance
The following table summarizes financial information by reportable segment, presents SSE, and reconciles total segment profit to consolidated income from operations and net income for the six months ended June 30, 2025 and 2026.
| For the Six Months ended June 30, | ||||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| JPY (Unaudited) |
JPY (Unaudited) |
US$ (Unaudited) |
||||||||||
| Sports school business | ||||||||||||
| Revenue | ||||||||||||
| Salaries and welfare expenses (SSE) | ||||||||||||
| Other Expenses | ||||||||||||
| Segment Profit | ||||||||||||
| Social Business | ||||||||||||
| Revenue | ||||||||||||
| Salaries and welfare expenses (SSE) | ||||||||||||
| Other Expenses | ||||||||||||
| Segment Profit | ||||||||||||
| Total segments | ||||||||||||
| Total Revenue | ||||||||||||
| Total Segment Profit | ||||||||||||
| Total Segment Profit | ||||||||||||
| Corporate Expenses* | ||||||||||||
| Consolidated Income from operations | ||||||||||||
| Other Income / (Expenses), net | ( |
) | ||||||||||
| Income Tax Expense | ( |
) | ( |
) | ||||||||
| Consolidated Net Income | ||||||||||||
| * |
F-22
Note 7 — SUBSEQUENT EVENTS
The Company evaluated all events and transactions from June 30, 2026 up through October 7, 2026, which is the date that these unaudited interim condensed consolidated financial statements are available to be issued.
On
June 23, 2026, the Company entered into a stock transfer agreement with an individual seller to acquire 100% of the outstanding
shares of SWIFT JAPAN Co., Ltd. (“SWIFT JAPAN”), a childcare facility operator in Aichi Prefecture, Japan, for a cash
consideration of JPY
On
September 16, 2026, the Company entered into a Share Transfer Agreement with A to Co., Ltd. and Mr. Masato Takao to acquire 100
issued and outstanding shares (100%) of A TO SPORTS INC. (“A TO SPORTS”), a company operating a soccer school business
in Victoria, British Columbia, Canada, for a cash consideration of JPY
F-23
Exhibit 99.2
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Management’s Discussion and Analysis of Financial Condition and Results of Operations is designed to provide a reader of our financial statements with a narrative from the perspective of our management. You should read the following discussion and analysis of our results of operations and financial condition in conjunction with our financial statements and the related notes. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” and “Disclosure Regarding Forward-Looking Statements” in our annual report on Form 20-F, dated April 8, 2026.
Overview
Headquartered in Shibuya-ku, Tokyo, we are a sports and social business company dedicated to youth sports and community engagement. We primarily provide services related to the organization and operations of sports schools and sports events for children. Building upon our experience and know-how in sports education, we also operate a robust social business sector, dispatching sports coaches to meet various community needs.
At the core of our operations is the children’s sports school business. When we refer to a sports school, it refers to a series of courses and programs that we offer to teach a sport, instead of a physical location. As of June 30, 2026, we were recognized as one of Japan’s largest operators of children’s sports schools in terms of both membership and facilities. As of June 30, 2026, we held our sports classes at more than 4,800 facility locations in Japan nationwide, serving over 68,000 members. The number of members is based on the number of students taking classes; if a student is enrolled in two different classes, this student is counted as two members. We provide 13 sports schools, from soccer school “Liberta” and baseball school “Porte,” to rhythmic karate school “Quore” and kendo school “Kokoro.” We also offer classes that cater to the various needs of different age groups and sports capability levels. For instance, our “JJMIX” classes offer beginners from the age of two and up the opportunity to experience multiple sports, and our “Rugina” classes are designed specifically for girls. Approximately 79% of our sports school members are elementary school students, with additional programs for preschoolers, nursery school children, kindergarteners, and junior high school students. These classes are taught by professional coaches who bring their expertise and passion to each session, ensuring that students receive high-quality coaching in safe environments. Our sports school business also extends to sports merchandise sales and commissioned special guidance services.
Our approach to sports education emphasizes the development of non-cognitive skills, which are crucial for success both inside and outside the sports arena. Following our teaching principle “acknowledge, praise, encourage, and motivate,” our classes integrate non-cognitive skills, such as motivation, teamwork, strategic thinking, and sportsmanship, into our sports curriculum. For instance, our soccer program focuses on developing technical skills, tactical understanding, and teamwork, and our martial arts programs in karate and kendo promote physical fitness and self-discipline. Our holistic approach integrates physical and mental development, setting us apart in the industry.
Building upon our experience and know-how in sports education, our social business mainly dispatches sports coaches to meet various community needs. Our school club support business provides sports coaching in school club activities and physical education classes and coordinates collaborations between school clubs and private companies. Our LEIF after-school daycare service supports children with disabilities or developmental characteristics through soccer therapy, promoting independence and improving life skills. Our involvement also extends to facility management services at public sports facilities, focusing on providing sports coaching for people of all ages. Our elderly healthcare initiative offers exercise programs for the elderly, including exercise instruction such as preventive nursing care exercises, yoga, and other health promotion services at community centers and healthcare facilities. By addressing these diverse needs, we aim to promote physical health, social inclusion, and community well-being across different demographics.
Our revenue increased by JPY490.0 million (US$3.0 million), or 8.9%, from JPY5,488.8 million (US$33.8 million) for the six months ended June 30, 2025, to JPY5,978.8 million (US$36.8 million) for the six months ended June 30, 2026.
Our net income increased by JPY23.4 million (US$0.1 million), or 43.5%, from JPY53.7 million (US$0.3 million) for the six months ended June 30, 2025, to JPY77.1 million (US$0.5 million) for the six months ended June 30, 2026.
As of June 30, 2026, we had JPY100.0 million (US$0.6 million) of short-term loans, JPY75.0 million (US$0.5 million) of current portion of long-term loans, JPY80.0 million (US$0.5 million) of current portion of bond payable, JPY5.9 million (US$0.04 million) of long-term loans outstanding and JPY152.3 million (US$0.9 million) of bond payable, as compared to JPY100.0 million (US$0.6 million) of short-term loans, JPY151.0 million (US$0.9 million) of current portion of long-term loans, JPY40.0 million (US$0.2 million) of current portion of bond payable, JPY24.4 million (US$0.2 million) of long-term loans outstanding, and JPY18.2 million (US$0.1 million) of bond payable as of December 31, 2025.
Our Business Model
Our business model is predicated on our competitive advantage: the development of coaches who can enhance children’s non-cognitive skills through sports, and our expertise in integrating these skills with sports programs. Non-cognitive skills encompass attributes related to an individual’s personality, attitudes, behaviors, and social interactions.
We are committed to training coaches who can effectively foster children’s non-cognitive skills through sports. We pay fees to use public facilities (for instance, school gyms and grounds and municipal venues) capable of hosting these lessons. We tailor a variety of sports lesson programs in order to encourage our students’ interaction and enhance their non-cognitive skills.
Our coaches are expected to be exemplary adult role models who possess not only the skills to facilitate lessons but also the attributes of school teachers and parents. Having our coaches build robust relationships with children and their parents, our lessons become a valuable “third place” for children, alongside school and home, thereby increasing our customers’ switching cost and enhancing customer retention rate.
Trend Information
Our sports school business experiences seasonal fluctuations, with lower membership number around March due to school graduations, followed by growth from April to June when the new school year begins. Revenue from event hosting also peaks during school holidays in March, August, and December–January. Our social business cash flows show seasonality as some governmental contracts settle payments around fiscal year-end in March. For further details, see “Trend Information” under “Item 5. Operating and Financial Review and Prospects” in our annual report on Form 20-F, dated April 8, 2026.
Key Operating Metrics
We use the following key performance indicators to analyze our business performance and financial forecasts and to develop strategic plans. We believe that these indicators provide useful information to help investors understand and evaluate our results of operations in the same manner as our management team. Certain judgments and estimates are inherent in our processes for calculating these metrics.
These key performance indicators are presented for supplemental informational purposes only; they should not be considered a substitute for financial information presented in accordance with U.S. GAAP and may differ from similarly titled metrics or measures presented by other companies. The following table sets forth a summary of the key operating metrics:
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| For the Six Months Ended June 30, | Period- Over-Period |
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| 2025 | 2026 | 2026 | 2025 to 2026 % Change |
|||||||||||||
| Operating Metrics: | ||||||||||||||||
| Sports school business | ||||||||||||||||
| Number of members | 69,500 | 68,873 | - | (0.9 | )% | |||||||||||
| Average membership duration (Year) | 1.88 | 1.99 | - | 5.9 | % | |||||||||||
| Revenue per capita | JPY | 6,117,614 | JPY | 6,517,702 | US$ | 40,082 | 6.5 | % | ||||||||
| Social business | ||||||||||||||||
| Number of schools | 349 | 478 | - | 37.0 | % | |||||||||||
| Number of club activities | 2,095 | 2,224 | - | 6.2 | % | |||||||||||
| Revenue per capita | JPY | 5,063,460 | JPY | 4,655,200 | US$ | 28,628 | (8.1 | )% | ||||||||
For definitions of our key operating metrics, see “Key Operating Metrics” under “Item 5. Operating and Financial Review and Prospects” in our annual report on Form 20-F, dated April 8, 2026.
Results of Operations
The following table sets forth our selected profit or loss data, both in absolute amount and as a percentage of total revenue, for each of the periods indicated:
| For the Six Months Ended June 30, | Fluctuation | |||||||||||||||||||||||||||
| 2025 | 2026 | 2026 | ||||||||||||||||||||||||||
| JPY | % | JPY | US$ | % | JPY | % | ||||||||||||||||||||||
| NET REVENUE | ||||||||||||||||||||||||||||
| Sports school business | 3,937,704,322 | 71.7 | % | 4,148,517,523 | 25,512,069 | 69.4 | % | 210,813,201 | 5.4 | % | ||||||||||||||||||
| Social business | 1,551,106,499 | 28.3 | % | 1,830,269,518 | 11,255,578 | 30.6 | % | 279,163,019 | 18.0 | % | ||||||||||||||||||
| TOTAL REVENUE | 5,488,810,821 | 100.0 | % | 5,978,787,041 | 36,767,647 | 100.0 | % | 489,976,220 | 8.9 | % | ||||||||||||||||||
| COST OF REVENUE | (4,047,686,339 | ) | (73.7 | )% | (4,212,676,644 | ) | (25,906,627 | ) | (70.5 | )% | (164,990,305 | ) | 4.1 | % | ||||||||||||||
| GROSS PROFIT | 1,441,124,482 | 26.3 | % | 1,766,110,397 | 10,861,020 | 29.5 | % | 324,985,915 | 22.6 | % | ||||||||||||||||||
| OPERATING EXPENSES: | ||||||||||||||||||||||||||||
| Selling, general and administrative expenses | (1,373,195,238 | ) | (25.0 | )% | (1,673,800,712 | ) | (10,293,345 | ) | (28.0 | )% | (300,605,474 | ) | 21.9 | % | ||||||||||||||
| TOTAL OPERATING EXPENSES | (1,373,195,238 | ) | (25.0 | )% | (1,673,800,712 | ) | (10,293,344 | ) | (28.0 | )% | (300,605,474 | ) | 21.9 | % | ||||||||||||||
| INCOME FROM OPERATIONS | 67,929,244 | 1.2 | % | 92,309,685 | 567,675 | 1.5 | % | 24,380,441 | 35.9 | % | ||||||||||||||||||
| Interest expenses, net | (8,167,393 | ) | (0.1 | )% | (2,858,462 | ) | (17,579 | ) | (0.0 | )% | 5,308,931 | (65.0 | )% | |||||||||||||||
| Other income and expenses, net | (11,208,513 | ) | (0.2 | )% | 23,270,327 | 143,105 | 0.4 | % | 34,478,840 | (307.6 | )% | |||||||||||||||||
| INCOME BEFORE INCOME TAX PROVISION | 48,553,338 | 0.9 | % | 112,721,550 | 693,202 | 1.9 | % | 64,168,212 | 132.2 | % | ||||||||||||||||||
| Provision for income taxes | 5,152,860 | 0.1 | % | (35,644,710 | ) | (219,204 | ) | (0.6 | )% | (40,797,570 | ) | (791.7 | )% | |||||||||||||||
| NET INCOME | 53,706,198 | 1.0 | % | 77,076,840 | 473,998 | 1.3 | % | 23,370,642 | 43.5 | % | ||||||||||||||||||
| ADJUSTED INCOME FROM OPERATIONS | 67,929,244 | 1.2 | % | 139,675,304 | 858,960 | 2.3 | % | 71,746,060 | 105.6 | % | ||||||||||||||||||
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Revenue
Total revenue increased by JPY490.0 million (US$3.0 million), or 8.9%, for the six months ended June 30, 2026, compared to the six months ended June 30, 2025.
Sports school business revenue increased by JPY210.8 million (US$1.3 million), or 5.4%, for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The increase was primarily driven by: (i) an increase of JPY194.2 million (US$1.2 million) in sports school business-other revenue, mainly attributable to services provided to a new customer, and (ii) an increase of JPY46.5 million (US$0.3 million) in membership fee revenue, mainly attributable to higher monthly membership fee rates, despite a 0.9% decrease in the period-end number of members. These increases were partially offset by a decrease of JPY33.0 million (US$0.2 million), or 4.1%, in event hosting revenue, primarily because the number of customers who joined events decreased by 9.3%, from 90,501 for the six months ended June 30, 2025 to 82,100 for the six months ended June 30, 2026, while higher revenue per participant partially offset the decrease. The number of customers who joined events refers to the total number of participants, including both members and non-members of the Company. We define the number of customers who participated in events as the total number of times customers attended throughout the six-month period. For example, if the same customer attends three events during the same period, this customer is counted as three customers.
Social business revenue increased by JPY279.2 million (US$1.7 million), or 18.0%, for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The increase was primarily driven by: (i) an increase of JPY120.3 million (US$0.7 million) in school club activity support revenue due to increases in the number of contracted schools and club activities, and (ii) an increase of JPY113.1 million (US$0.7 million) in welfare and after-school revenue, primarily attributable to increased revenue from existing contracts, as well as acquisition of a new client.
Cost of revenue and gross profit
Cost of revenue increased by JPY165.0 million (US$1.0 million), or 4.1%, for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The increase was primarily driven by an increase in salaries and welfare expenses of JPY284.4 million (US$1.7 million), or 10.5%, due mainly to business expansion, and an increase in school facility rental fees of JPY30.4 million (US$0.2 million), or 12.5%. These increases were partially offset by decreases in travel expenses of JPY81.0 million (US$0.5 million) and other cost of revenue of JPY57.9 million (US$0.4 million).
| For the Six Months Ended June 30, | Fluctuation | |||||||||||||||||||||||||||
| 2025 | 2026 | 2026 | ||||||||||||||||||||||||||
| JPY | % | JPY | US$ | % | JPY | % | ||||||||||||||||||||||
| Salaries and welfare expenses | 2,720,159,344 | 67.2 | % | 3,004,533,247 | 18,476,928 | 71.3 | % | 284,373,903 | 10.5 | % | ||||||||||||||||||
| Event hosting expenses | 388,428,588 | 9.6 | % | 377,540,974 | 2,321,757 | 9.0 | % | (10,887,614 | ) | (2.8 | )% | |||||||||||||||||
| School facility rental fees | 242,931,266 | 6.0 | % | 273,375,479 | 1,681,173 | 6.5 | % | 30,444,213 | 12.5 | % | ||||||||||||||||||
| Travel expenses | 232,511,197 | 5.7 | % | 151,482,677 | 931,570 | 3.6 | % | (81,028,520 | ) | (34.8 | )% | |||||||||||||||||
| Others | 463,655,944 | 11.5 | % | 405,744,267 | 2,495,199 | 9.6 | % | (57,911,677 | ) | (12.5 | )% | |||||||||||||||||
| Total | 4,047,686,339 | 100.0 | % | 4,212,676,644 | 25,906,627 | 100.0 | % | 164,990,305 | 4.1 | % | ||||||||||||||||||
Our gross profit increased by 22.6%, from JPY1,441.1 million for the six months ended June 30, 2025 to JPY1,766.1 million for the six months ended June 30, 2026. Gross margin increased from 26.3% to 29.5%, as revenue growth exceeded the increase in cost of revenue.
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Selling, general, and administrative expenses
Selling, general, and administrative expenses increased by JPY300.6 million (US$1.8 million), or 21.9%, for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The increase was primarily attributable to: (i) an increase in promotion fees of JPY164.8 million (US$1.0 million), primarily due to business growth and a refinement of our expense classification approach beginning in fiscal 2026, (ii) an increase in outside services of JPY136.5 million (US$0.8 million), mainly reflecting acquisition-related costs, (iii) an increase in taxes and public dues of JPY36.4 million (US$0.2 million) due to higher capital-based taxes following our IPO, and (iv) an increase in travel expenses of JPY16.9 million (US$0.1 million), partly due to the refinement of our expense classification approach.
| For the Six Months Ended June 30, | Fluctuation | |||||||||||||||||||||||||||
| 2025 | 2026 | 2026 | ||||||||||||||||||||||||||
| JPY | % | JPY | US$ | % | JPY | % | ||||||||||||||||||||||
| Salaries and welfare expenses | 452,024,232 | 32.9 | % | 436,969,747 | 2,687,226 | 26.1 | % | (15,054,485 | ) | (3.3 | )% | |||||||||||||||||
| Outside services | 116,348,887 | 8.5 | % | 252,802,451 | 1,554,655 | 15.1 | % | 136,453,564 | 117.3 | % | ||||||||||||||||||
| Office rental fees | 153,673,008 | 11.2 | % | 118,746,356 | 730,252 | 7.1 | % | (34,926,652 | ) | (22.7 | )% | |||||||||||||||||
| System maintenance fees | 138,056,417 | 10.1 | % | 106,347,672 | 654,005 | 6.4 | % | (31,708,745 | ) | (23.0 | )% | |||||||||||||||||
| Commission expenses | 121,999,412 | 8.9 | % | 136,369,797 | 838,631 | 8.1 | % | 14,370,385 | 11.8 | % | ||||||||||||||||||
| Depreciation and amortization expenses | 66,679,088 | 4.9 | % | 64,001,684 | 393,590 | 3.8 | % | (2,677,404 | ) | (4.0 | )% | |||||||||||||||||
| Promotion fees | 66,105,459 | 4.8 | % | 230,950,049 | 1,420,270 | 13.8 | % | 164,844,590 | 249.4 | % | ||||||||||||||||||
| Travel expenses | 51,527,704 | 3.8 | % | 68,453,644 | 420,968 | 4.1 | % | 16,925,940 | 32.8 | % | ||||||||||||||||||
| Recruitment fees | 75,058,719 | 5.5 | % | 66,648,523 | 409,867 | 4.0 | % | (8,410,196 | ) | (11.2 | )% | |||||||||||||||||
| Taxes and public dues | 27,210,817 | 2.0 | % | 63,610,550 | 391,185 | 3.8 | % | 36,399,733 | 133.8 | % | ||||||||||||||||||
| Office supplies | 14,855,827 | 1.1 | % | 19,193,096 | 118,031 | 1.1 | % | 4,337,269 | 29.2 | % | ||||||||||||||||||
| Entertainment expenses | 16,046,742 | 1.2 | % | 10,492,945 | 64,528 | 0.6 | % | (5,553,797 | ) | (34.6 | )% | |||||||||||||||||
| Conference fees | 12,751,812 | 0.9 | % | 23,364,153 | 143,682 | 1.4 | % | 10,612,341 | 83.2 | % | ||||||||||||||||||
| Others | 60,857,114 | 4.4 | % | 75,850,045 | 466,454 | 4.5 | % | 14,992,931 | 24.6 | % | ||||||||||||||||||
| Total | 1,373,195,238 | 100.0 | % | 1,673,800,712 | 10,293,344 | 100.0 | % | 300,605,474 | 21.9 | % | ||||||||||||||||||
Other income and expenses, net
Other income and expenses, net increased by JPY34.5 million (US$0.2 million), from expense of JPY11.2 million for the six months ended June 30, 2025 to income of JPY23.3 million for the six months ended June 30, 2026. The increase was primarily attributable to: (i) the absence of JPY19.6 million of franchise fee refunds recognized in the prior-year period, (ii) an increase in grant income of JPY7.9 million, and (iii) an unrealized gain on long-term investment of JPY4.7 million in the current-year period.
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| For the Six Months Ended June 30, | Fluctuation | |||||||||||||||||||||||||||
| 2025 | 2026 | 2026 | ||||||||||||||||||||||||||
| JPY | % | JPY | US$ | % | JPY | % | ||||||||||||||||||||||
| Dividend income | 87,500 | (0.8 | )% | 87,900 | 541 | 0.4 | % | 400 | 0.5 | % | ||||||||||||||||||
| Grant income | 9,399,558 | (83.9 | )% | 17,310,392 | 106,453 | 74.4 | % | 7,910,834 | 84.2 | % | ||||||||||||||||||
| Loss on disposal of long-lived assets | (168,973 | ) | 1.5 | % | 292,080 | 1,796 | 1.3 | % | 461,053 | (272.9 | )% | |||||||||||||||||
| Unrealized loss on short-term investment | (224,000 | ) | 2.0 | % | - | - | - | % | 224,000 | (100.0 | )% | |||||||||||||||||
| Unrealized gain on long-term investment | - | - | % | 4,665,574 | 28,692 | 20.0 | % | 4,665,574 | 100.0 | % | ||||||||||||||||||
| Franchise income returned | (19,623,522 | ) | 175.1 | % | - | - | - | % | 19,623,522 | (100.0 | )% | |||||||||||||||||
| Unrealized foreign exchange loss | (4,442,405 | ) | 39.6 | % | (324,095 | ) | (1,993 | ) | (1.4 | )% | 4,118,310 | (92.7 | )% | |||||||||||||||
| Other income, net | 3,763,329 | (33.6 | )% | 1,238,476 | 7,616 | 5.3 | % | (2,524,853 | ) | (67.1 | )% | |||||||||||||||||
| Total | (11,208,513 | ) | 100.0 | % | 23,270,327 | 143,105 | 100.0 | % | 34,478,840 | (307.6 | )% | |||||||||||||||||
Income tax provisions
Income tax provisions were JPY35.6 million for the six months ended June 30, 2026, compared to an income tax benefit of JPY5.2 million for the six months ended June 30, 2025. While the statutory tax rate was 30.6% for both periods, our effective tax rates for the six months ended June 30, 2025 and 2026 were (10.6) % and 31.6%, respectively. The effective tax rate for the six months ended June 30, 2025 was lower than the statutory tax rate primarily due to the tax deductibility of certain IPO-related costs that were capitalized for accounting purposes, partially offset by the effect of certain non-deductible expenses.
We had no tax obligation arising from other jurisdictions during the six months ended June 30, 2025 and 2026. During the six months ended June 30, 2025 and 2026, we had no material dispute or unresolved tax issues with the relevant tax authorities.
Net income
As a result of the foregoing reasons, we reported net income of JPY77.1 million (US$0.5 million) for the six months ended June 30, 2026, as compared to net income of JPY53.7 million for the six months ended June 30, 2025.
Adjusted income from operations
As a result of the foregoing reasons, we reported adjusted income from operations of JPY139.7 million (US$0.9 million) for the six months ended June 30, 2026, as compared to adjusted income from operations of JPY67.9 million for the six months ended June 30, 2025. See “Non-GAAP Financial Measures and Reconciliation” below.
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Non-GAAP Financial Measures and Reconciliation
In our report, we discuss key financial measures that are not calculated in accordance with GAAP to supplement our unaudited interim condensed consolidated financial statements presented on a GAAP basis. This non-GAAP financial measure is reconciled from its most directly comparable financial measure determined in accordance with GAAP as follows:
| For the Six Months Ended June 30, | ||||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| JPY | JPY | US$ | ||||||||||
| INCOME FROM OPERATIONS | 67,929,244 | 92,309,685 | 567,676 | |||||||||
| Plus: acquisition-related costs(a) | - | 47,365,619 | 291,284 | |||||||||
| Adjusted INCOME FROM OPERATIONS | 67,929,244 | 139,675,304 | 858,960 | |||||||||
| (a) | Represents acquisition-related costs incurred in connection with our acquisition activities, including transaction-related costs, legal, financial and tax due diligence expenses, integration costs and other acquisition-related costs. These costs have been added back for normalization purposes as they are not considered reflective of our core operating performance. |
Our primary non-GAAP financial measure and corresponding metrics reflect how we evaluate our current and prior year operating results. As new events or circumstances arise, these definitions could change. When our definitions change, we provide the updated definitions. When items no longer impact our current or future presentation of non-GAAP operating results, we remove these items from our non-GAAP definitions.
Adjusted income from operations is a financial measure that is not calculated in accordance with GAAP (collectively referred to as the “non-GAAP financial measures”), and the use of the term adjusted income from operations may differ from similar measures reported by other companies and may not be comparable to other similarly titled measures. We believe the non-GAAP financial measure provides investors with useful information with respect to our historical operations. We present the non-GAAP financial measure as a supplemental performance measure because we believe it facilitates a comparative assessment of our operating performance relative to our performance based on our results under GAAP, while isolating the effects of some items that vary from period to period. Specifically, adjusted income from operations allows us to assess our performance without the impact of the specifically identified items that we believe do not directly reflect our core operations, including acquisition-related costs and other items that management does not consider reflective of our core operating performance. The non-GAAP financial measure also functions as a key performance indicator used to evaluate our operating performance internally, and it is used in connection with the determination of incentive compensation for management, including executive officers.
As our initial public offering was completed during the fiscal year ended December 31, 2025, and the related listing-related and transformational expenses were specific to our initial public offering and related transformation activities, we do not expect to incur such expenses in the fiscal year ending December 31, 2026 or future periods. Accordingly, beginning with the fiscal year ending December 31, 2026, we have revised our presentation of adjusted income from operations and removed listing-related and transformational expenses from the adjustments to adjusted income from operations for all historical periods presented.
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Adjusted income from operations is not a measurement of our financial performance under GAAP and should not be considered in isolation or as an alternative to income from operations or any other financial statement data presented as indicators of financial performance or liquidity, each as presented in accordance with GAAP. Consequently, our non-GAAP financial measure should be considered together with our unaudited interim condensed consolidated financial statements, which are prepared in accordance with GAAP. We understand that although adjusted income from operations is frequently used by securities analysts, lenders and others in their evaluation of companies, it has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:
| ● | adjusted income from operations does not fully reflect our cash expenditures, future requirements for capital expenditures or contractual commitments; |
| ● | adjusted income from operations does not reflect changes in, or cash requirements for, our working capital needs; |
| ● | adjusted income from operations does not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on debt; and |
| ● | although depreciation and amortization expenses are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and adjusted income from operations does not reflect any cash requirements for such replacements. |
Because of these limitations, adjusted income from operations should not be considered as discretionary cash available to us to reinvest in the growth of our business or as a measure of cash that will be available to us to meet our obligations.
Financial Guidance
Revenue is expected to be between US$82.9 million and US$95.7 million for the fiscal year ending December 31, 2026, an increase of approximately 10.8% to 27.9% from US$74.8 million for the fiscal year ended December 31, 2025.
Income from operations is expected to be between US$4.5 million and US$5.4 million for the fiscal year ending December 31, 2026, an increase of approximately 13.2% to 33.9% from US$4.0 million for the fiscal year ended December 31, 2025.
The guidance includes the results of Well Resources (from May 1, 2026), Tokai Sports (from June 1, 2026) and SWIFT JAPAN (from July 1, 2026). It does not assume any further business acquisitions, restructuring activities or legal settlements during the period. The guidance is translated at the FY2025 assumed exchange rate of US$1 = JPY156.80, the same rate used in the first quarter, to eliminate the impact of foreign exchange volatility. This rate will be used for the guidance throughout fiscal 2026.
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Exhibit 99.3
H1 FY202 6 Investor Presentation LEIFRAS Co., Ltd. (Nasdaq: LFS) ｜ October 202 6
1 Copyright © 2026 LEIFRAS CO., LTD. All rights reserved. There is no guarantee that any specific outcome will be achieved. Investments may be speculative, illiquid and there is a ris k o f loss. Past performance is not indicative of future results. This presentation contains forward - looking statements that reflect our current expectations and views of future events, all of w hich are subject to risks and uncertainties. Forward - looking statements give our current expectations or forecasts of future events. You can identify thes e 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 u se of words such as “approximates,” “believes,” “hopes,” “expects,” “anticipates,” “estimates,” “projects,” “intends,” “plans,” “will,” “would,” “sh ould,” “could,” “may” or other similar expressions in this presentation. These statements are likely to address our growth strategy, financial results an d product and development programs. You must carefully consider any such statements and should understand that many factors could cause act ual results to differ from our forward - looking statements. These factors may include inaccurate assumptions and a broad variety of other risks and unc ertainties, including some that are known and some that are not. No forward - looking statement can be guaranteed and actual future results may vary mat erially. 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; ou r a bility to execute our growth, and expansion, including our ability to meet our goals; current and future economic and political conditions; our cap ita l requirements and our ability to raise any additional financing which we may require; our ability to attract customers and further enhance our bran d r ecognition; our ability to hire and retain qualified management personnel and key employees in order to enable us to develop our business; trends and co mpe tition in the sports instruction services industry and the social support services industry; and other assumptions described in this presentation und erlying or relating to any forward - looking statements. We describe certain material risks, uncertainties and assumptions that could affect our business, including our financial con dit ion and results of operations, under "Risk Factors" in our annual report on Form 20 - F (the "Annual Report") filed with the U.S. Securities and Exch ange Commission (the "SEC").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 f rom what is expressed, implied or forecast by our forward - looking statements. Accordingly, you should be careful about relying on any forward - looking s tatements. Except as required under the federal securities laws, we do not have any intention or obligation to update publicly any forward - looking st atements after the distribution of this presentation, whether as a result of new information, future events, changes in assumptions, or otherwis e. The forward - looking statements made in this presentation relate only to events or information as of the date on which the statem ents are made in this presentation. 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 un anticipated events. You should read this presentation, along with the Annual Report and the documents that are filed as exhibits to the Annual Re por t, carefully and with the understanding that our actual future results may differ materially from what we currently expect. Forward - Looking Statements
2 Copyright © 2026 LEIFRAS CO., LTD. All rights reserved. There is no guarantee that any specific outcome will be achieved. Investments may be speculative, illiquid and there is a ris k o f loss. Past performance is not indicative of future results. October 9, 2026 ONE YEAR ON NASDAQ One Year on Nasdaq. Advancing to Our Next Stage of Growth in the Global Capital Markets. 2
3 Copyright © 2026 LEIFRAS CO., LTD. All rights reserved. There is no guarantee that any specific outcome will be achieved. Investments may be speculative, illiquid and there is a ris k o f loss. Past performance is not indicative of future results. INDEX
4 Copyright © 2026 LEIFRAS CO., LTD. All rights reserved. There is no guarantee that any specific outcome will be achieved. Investments may be speculative, illiquid and there is a ris k o f loss. Past performance is not indicative of future results. INDEX 2. Executive Summary 3. H1 FY2026 Consolidated Financial Results 4. Progress of the Growth Strategy 5. Consolidated Financial Position 6. 2026 Full - Year Consolidated Financial Forecast 7. Appendix • Growth Strategy • Capital Allocation • Reference Materials
5 Copyright © 2026 LEIFRAS CO., LTD. All rights reserved. There is no guarantee that any specific outcome will be achieved. Investments may be speculative, illiquid and there is a ris k o f loss. Past performance is not indicative of future results. Corporate Philosophy/History With the corporate philosophy of " To change and design sports ,“ we practice "sports and social business" to address various social issues through sports. ２００ 0 ～ ２００５～ ２０１０～ 2015 ～ ２０２０～ ※ 1 （ FY ２０２５） Founded in 2001 Started sports school business FY2005 10,000 members FY2009 2 0,000 members FY2014 40,000 members FY2013 Started School club support business FY2023 60,000 members FY2024 70,000 members FY2020 Large - scale club activity project contract (Nagoya City elementary school) FY2012 30,000 members FY2021 50,000 members ※ 1:Performance comparison for the same period from FY23 onwards (US GAAP) Ranked No.1 in Japan across 4 major categories The USD amount is based on 25Q4 FX rate ￥ 156.80=$1.00.
6 Copyright © 2026 LEIFRAS CO., LTD. All rights reserved. There is no guarantee that any specific outcome will be achieved. Investments may be speculative, illiquid and there is a ris k o f loss. Past performance is not indicative of future results. Business Model Sports School Business Social Business ● Service details We provide a unique sports service that cultivates the " non - cognitive skills " that are emphasized in modern education. Based on our teaching philosophy of ”acknowledge, praise, encourage, and motivate," we offer a training program that integrates physical and mental growth, focusing not only on developing sports skills, but also on greetings, etiquette, leadership, cooperation, self - management, and problem - solving skills. ● Revenue sources ・ School fees (monthly fee, enrollment fee, annual fee) ・ Event participation fee ● Service details Our social business consists of two main types of projects: the " School Club Support " and " After - School Daycare Services .“ Our club activities project works in collaboration with local governments and schools and involves coaching and running club activities primarily at elementary and junior high schools. Our after - school day care services project supports the independence of children with developmental disabilities through sports. ● Revenue sources Mainly business outsourcing contract fees We operate our business in two segments: "Sports School Business" and "Social Business." ● Sales ratio ● Sales ratio 27 ％ （ FY ２０２５） ７ 3 ％ （ FY ２０２５） Compared to FY2023 ＋ 3 ％ （ FY ２０２３：２４％）
7 Copyright © 2026 LEIFRAS CO., LTD. All rights reserved. There is no guarantee that any specific outcome will be achieved. Investments may be speculative, illiquid and there is a ris k o f loss. Past performance is not indicative of future results. Business Seasonality Our business's profit structure is towards the second half of the year, with the majority of profits being recorded in the second half. Seasonality of sports school business Membership numbers temporarily decrease around March, coinciding with school graduation season. Then, they increase again from April to June, coinciding with the start of the new school year. Event revenue peaks in March and August, and during school holidays from December to January. Seasonality of social business Some contracts with government agencies involve payments being made in March , which introduces seasonality into the cash flow. * For your reference: For more detailed information, please refer to the "Trend Information" section within the "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company’s Report of Foreign Private Issuer on Form 6 - K. 54 33 68 341 487 559 4,227 4,773 5,489 5,077 5,556 6,240 Revenue Income from operations (million yen) (million yen) FY23 first half FY23 second half FY24 first half FY24 second half FY25 first half FY25 second half FY23 first half FY23 second half FY24 first half FY24 second half FY25 first half FY25 second half
8 Copyright © 2026 LEIFRAS CO., LTD. All rights reserved. There is no guarantee that any specific outcome will be achieved. Investments may be speculative, illiquid and there is a ris k o f loss. Past performance is not indicative of future results. INDEX 1. Company Profile 3. H1 FY2026 Consolidated Financial Results 4. Progress of the Growth Strategy 5. Consolidated Financial Position 6. 2026 Full - Year Consolidated Financial Forecast 7. Appendix • Growth Strategy • Capital Allocation • Reference Materials
9 Copyright © 2026 LEIFRAS CO., LTD. All rights reserved. There is no guarantee that any specific outcome will be achieved. Investments may be speculative, illiquid and there is a ris k o f loss. Past performance is not indicative of future results. 330 474 FY25H1 FY26H1 418 859 FY25H1 FY26H1 418 568 FY25H1 FY26H1 33,754 36,768 FY25H1 FY26H1 69,500 68,873 FY25H1 FY26H1 Financial Highlights （ people ） （ clubs ） 2,095 2,224 FY25H1 FY26H1 Growth in the School Club Support Business and Sports School Business drove record - high net revenue, income from operations, adjusted income from operations, net income, and contracted club activities. Net income (in thousands of USD) Sports school members Contracted club activities Net revenue Adjusted income from operations ※ ２ Income from operations (in thousands of USD) (in thousands of USD) (in thousands of USD) *1: Comparison of performance over the same period from H1 FY25 onwards (US GAAP) *2 : Adjusted income from operations is a performance measure of the profitability of our core business. Adjusted income from oper ati ons = Income from operations + acquisition - related costs. JPY162.61=USD1.00
10 Copyright © 2026 LEIFRAS CO., LTD. All rights reserved. There is no guarantee that any specific outcome will be achieved. Investments may be speculative, illiquid and there is a ris k o f loss. Past performance is not indicative of future results. Financial Highlights | Supplementary Explanation | Decrease in School Membership ( YoY) The main factors were an increase in graduating members as existing members reached higher grades and a strategic shift in the timing of new member acquisition to improve service quality. Net revenue and income from operations reached record highs, reflecting a steadily strengthening business foundation. ※ 1 Main factors • As the number of members increases in the upper grades of elementary school, the number of graduated members (members who remained enrolled until the 6th grade of elementary school and graduate in March) has increased compared to the previous year. * Many of our 6th - grade elementary school members graduate from (withdraw from) the school in March, which is the elementary school graduation season. • In line with strengthening new employee training, we are strategically shifting customer acquisition timing. • As a result, the number of new classes opening in the first half of the year decreased , leading to a year - on - year decrease in enrollment. * In Japan, most new employees join their companies in April. • The termination of one franchise location resulted in a decrease in the number of members. In Q2 (YoY), despite a slight dip in membership, revenue and profit grew due to adjusted monthly fees and higher average spend per customer. Membership is expected to recover in Q3 and Q4 through new initiatives. *1: Comparison of H1 results from FY2025 onward (U.S. GAAP)
11 Copyright © 2026 LEIFRAS CO., LTD. All rights reserved. There is no guarantee that any specific outcome will be achieved. Investments may be speculative, illiquid and there is a ris k o f loss. Past performance is not indicative of future results. Key Topics of H1 FY2026 Steady progress achieved across key growth pillars: Sports School Business, Social Business, and M&A . Sports School Business M ＆ A Achieved expansion to all 47 prefectures nationwide. Advancing to the next phase of community integration and club activity transition synergies, following the achievement of founding goals. Acquired 1,185 members through an M&A (Tokai Sports Co., Ltd.) Maximizing lifetime value (“LTV”) by acquiring a sports brand targeting upper elementary school students. Higher revenue per customer drove year - over - year growth in H1 FY2026 net revenue and income from operations. Net revenue: US$25,512 thousand (YoY: +5.4%) ; segment profit: US$5,332 thousand (YoY: +2.5%) . Executing a strategic M&A transaction for full - scale entry into the childcare business. SWIFT JAPAN Co., Ltd. : 5 small - scale licensed daycare centers, 1 corporate - sponsored daycare center, and 1 after - school care facility. We entered into a stock transfer agreement on June 23, 2026, and SWIFT JAPAN became our subs idiary on July 1, 2026. ０ 1 03 ０ 2 Social Business [School Club Support Business ] The number of our support clubs has expanded to 2,224. The strategy is progressing smoothly. New: 5 (including 3 in special wards and ordinance - designated cities ) [ After - school Daycare Service ] Meeting growing demand through the new therapeutic education programs. Providing sports therapy, motor skill development, and independent learning support. New school club activity contracts awarded in FY2025 drove year - over - year growth in H1 FY2026 net revenue and income from operations. Net revenue: US$11,256 thousand (YoY: +18.0%) ; segment profit: US$1,674 thousand (YoY: +156.7%) .
12 Copyright © 2026 LEIFRAS CO., LTD. All rights reserved. There is no guarantee that any specific outcome will be achieved. Investments may be speculative, illiquid and there is a ris k o f loss. Past performance is not indicative of future results. INDEX 1. Company Profile 2. Executive Summary 4. Progress of the Growth Strategy 5. Consolidated Financial Position 6. 2026 Full - Year Consolidated Financial Forecast 7. Appendix • Growth Strategy • Capital Allocation • Reference Materials
13 Copyright © 2026 LEIFRAS CO., LTD. All rights reserved. There is no guarantee that any specific outcome will be achieved. Investments may be speculative, illiquid and there is a ris k o f loss. Past performance is not indicative of future results. Consolidated Statements of Income Highlights Net revenue, gross profit, income from operations, operating margin, adjusted income from operations, and net income reached record highs. ※ 1 ※ 2 YoY % change YoY change H1 FY2026 H1 FY2025 (in thousands of USD) 8.9% 3,014 36,768 33,754 Net revenue 22.6% 1,999 10,861 8,862 Gross profit 35.9% 150 568 418 Income from operations 0.3% ー 1.5% 1.2% Operating margin 43.5% 144 474 330 Net income 105.6% 441 859 418 Adjusted income from operations ※ ２ ※1: Comparison of Earnings for the Same Period Starting in FY25 （ USGAAP ） ※2 ： Adjusted income from operations ： Introduced as a performance management metric to measure the profitability of the core business Adjusted income from operations =Income from operations ＋ M&A - Related Costs USD ¥162.61=$1.00
14 Copyright © 2026 LEIFRAS CO., LTD. All rights reserved. There is no guarantee that any specific outcome will be achieved. Investments may be speculative, illiquid and there is a ris k o f loss. Past performance is not indicative of future results. Adjusted income from operations H1 FY2 ６ H1 FY2 ５ H1 FY25 income from operations H1 FY ２６ income from operations Acquisition - related costs H1 FY26 Adjusted income from operations 418 568 291 859 (in thousands of USD) (in thousands of USD) Adjusted Income from operations *: Adjusted Income from Operations : Introduced as a performance management indicator representing the profitability of the c ore business. Adjusted income from operations = Income from operations + Acquisition - related costs Adjusted income from operations* was JPY139.7 million (US$859 thousand), up 105.6% year over year. The profitability of our core business continued to improve, establishing a foundation for growth in the second half. 0 418 Acquisition - related costs H1 FY25 Adjusted income from operations JPY162.61=USD1.00
15 Copyright © 2026 LEIFRAS CO., LTD. All rights reserved. There is no guarantee that any specific outcome will be achieved. Investments may be speculative, illiquid and there is a ris k o f loss. Past performance is not indicative of future results. Segment summary Sports school business Social business Stable growth through increased LTV due to higher monthly membership fee rates. High growth continues due to a significant increase in the number of club activity contracts. (in thousands of USD) Net revenue Net revenue *1: Comparison of H1 results from FY2025 onward (U.S. GAAP) Both the "Sports School Business" and the "Social Business" are growing steadily, . (in thousands of USD) 24,216 25,512 FY25H1 FY26H1 ＋ 5.4 ％ YoY ＋ 2.5 ％ YoY Segment profit 9,539 11,256 FY25H1 FY26H1 ＋ 18.0 ％ YoY ＋ 156.7 ％ YoY Segment profit 5,200 5,332 FY25H1 FY26H1 652 1,674 FY25H1 FY26H1 (in thousands of USD) (in thousands of USD) JPY162.61=USD1.00
16 Copyright © 2026 LEIFRAS CO., LTD. All rights reserved. There is no guarantee that any specific outcome will be achieved. Investments may be speculative, illiquid and there is a ris k o f loss. Past performance is not indicative of future results. INDEX 1. Company Profile 2. Executive Summary 3. H1 FY2026 Consolidated Financial Results 5. Consolidated Financial Position 6. 2026 Full - Year Consolidated Financial Forecast 7. Appendix • Growth Strategy • Capital Allocation • Reference Materials
17 Copyright © 2026 LEIFRAS CO., LTD. All rights reserved. There is no guarantee that any specific outcome will be achieved. Investments may be speculative, illiquid and there is a ris k o f loss. Past performance is not indicative of future results. Progress of the Sports School Business Topics Net revenue Higher monthly membership fee rates drove net revenue growth; market expansion remains on track. *1: Comparison of performance over the same period from Q1 FY25 onwards ( US GAAP) Higher monthly membership fee rates improved LTV, driving steady FY26H1 sales growth YoY. Sales: $ 25,512 thousand ( YoY : + 5.4 %) We have developed a new sport called “SIX SHOOT” in collaboration with the popular anime “Blue Lock.” First Tournament held in August (Former Japanese national team player Yoichiro Kakitani appointed as official ambassador) “Dribble Designer Mr. Okabe × Leifras ” Opens a Soccer School Specializing in Dribbling. “1v1 DRIBBLE ACADEMY D - UNLOCK,” Supervised by Mr. Okabe, opens its doors Acquired approx. 1,185 sports school members through the M&A of Tokai Sports Co., Ltd. We acquired the gymnastics classes business at approximately 20 affiliated kindergartens and daycare centers, which currently have approximately 1,185 school members. We have signed an alliance agreement with Blaublitz Akita and opened a collaborative school. We opened a collaborative school in Odate City, Akita Prefecture. This completes our expansion to 47 prefectures nationwide. We have launched a new brand, "L - Spo". We are opening a new brand (multi - sports school) aimed at attracting younger children and those with light needs. ❶ ❷ ❸ ❹ (in thousands of USD) 24,216 25,512 FY25H1 FY26H1 ＋ 5.4 ％ YoY 5,200 5,332 FY25H1 FY26H1 ＋ 2.5 ％ YoY Segment profit (in thousands of USD) ❺ ❻ JPY162.61=USD1.00
18 Copyright © 2026 LEIFRAS CO., LTD. All rights reserved. There is no guarantee that any specific outcome will be achieved. Investments may be speculative, illiquid and there is a ris k o f loss. Past performance is not indicative of future results. Progress of the Sports School Business II: Expansion to All 47 Prefectures Expanding to all 47 prefectures in Japan. With a robust nationwide network of instructors, advancing to the next phase of community integration and M&A . prefectures 47 / 47 members 68,873 Growth strategies Achievements in H1 FY2026
19 Copyright © 2026 LEIFRAS CO., LTD. All rights reserved. There is no guarantee that any specific outcome will be achieved. Investments may be speculative, illiquid and there is a ris k o f loss. Past performance is not indicative of future results. Progress of the Sports School Business II : Tokai Sports' M&A and Synergies Through the acquisition of Tokai Sports, a strong brand in the Chukyo region, we added approximately 1,185 members. We aim to maximize LTV by retaining members who seek competitive sports training and acquiring customers efficiently through business - to - business - to - consumer ("B2B2C") partnerships. Improving customer satisfaction through a performance - oriented brand ● Integration with methods for developing non - cognitive skills Providing end - to - end athletic skill coaching and non - cognitive skill development to boost member and parent satisfaction and prevent member attrition . x Acquired a membership base of approximately 1,185 members (soccer and gymnastics) x Expect to further expansion of market share Expanding market share through the acquisition of members x Acquired the B2B2C platform of approximately 20 partner kindergartens and daycare centers x A solid track record of maintaining all contracts over the past three years x Establishing a “seamless development pathway from early childhood through junior high school” B2B2C platform for partner kindergartens and daycare centers
20 Copyright © 2026 LEIFRAS CO., LTD. All rights reserved. There is no guarantee that any specific outcome will be achieved. Investments may be speculative, illiquid and there is a ris k o f loss. Past performance is not indicative of future results. A Paradigm Shift in Education in the Age of AI ｜ The Growth of the “Non - Cognitive Skills” Market As AI commoditizes cognitive skills, parental investment is shifting toward non - cognitive skills. 1 ｜ Drastic Changes in the Macroeconomic Environment 2 ｜ Shifting Demand and Positioning 3 ｜ Future Growth and Business Expansion ● Skills Children Need in the Age of AI （ Parent Survey: Top Priorities ） 76.8% 1.7% Non-cognitive Skills Academic Ability and Grades ※ Survey by Result Design, Inc. (June 2026) Only 1.7% of parents prioritize grades above all else; as AI automates memory and calculation, academic - only cram schools are reaching their limits. The Traditional Cram School Market (Focused on Cognitive Skills) Replaced by AI → Decline in Value Proposition The experiential market for sports schools and similar programs Leadership, Teamwork, and Perseverance ＝ Developing Non - Cognitive Skills That Cannot Be Replaced by AI Our Strengths ： Since our founding, we have focused on developing children's non - cognitive skills rather than prioritizing athletic technique alone. This approach aligns with growing demand for these skills. Partnerships with Cram Schools 2020: Mainichi Kobetsu Juku 5 - Days2026: Ando Juku Building on these partnerships, we aim to expand our collaboration across the education sector as demand for non - cognitive skills grows. Business - to - Consumer Increasing the Number of New Individual Customers Business - to - Business ｜ New Revenue Streams Providing Solutions to Educational Institutions Our business opportunities extend beyond sports schools to the broader education sector. Recognizing this demand, our company will take a leap forward as a new platform provider in the
21 Copyright © 2026 LEIFRAS CO., LTD. All rights reserved. There is no guarantee that any specific outcome will be achieved. Investments may be speculative, illiquid and there is a ris k o f loss. Past performance is not indicative of future results. Progress of Social Business I Topics Net revenue ❶ ❷ ❸ *1: Comparison of performance over the same period from H1 FY25 onwards ( US GAAP) Both the “school club support service” and “after - school daycare service” are scaling as planned . Sales have increased significantly . (in thousands of USD) Secured Q3+ revenue streams via contracts with 24 local governments and 7 private schools. New Business Development (5 cases): Secured "large - scale projects" in special wards and designated cities. 3 of 5 new contracts awarded in special wards/designated cities. Phase 2 Growth Strategy (scaling to major municipalities) is progressing smoothly. Existing Customers ( 19 cases): Achieved an extremely high repeat rate and "increased unit price". Maintained a strong customer base with a 100 % retention rate . Through M & A (Well Resource Co., Ltd.), we acquired " 4 business locations". Two new services, " FLEI" for motor learning support and "ILFE" for independent learning support, have been added. Including the M&A, we added nine business locations, a 45% increase year over year. Number of business locations rapidly expanded from 20 to 29 , a 45 % increase compared to the previous year. School club support service After - school daycare service 9,539 11,256 FY25H1 FY26H1 ＋ 18.0 ％ YoY ＋ 156.7 ％ YoY Segment profit 652 1,674 FY25H1 FY26H1 (in thousands of USD) JPY162.61=USD1.00
22 Copyright © 2026 LEIFRAS CO., LTD. All rights reserved. There is no guarantee that any specific outcome will be achieved. Investments may be speculative, illiquid and there is a ris k o f loss. Past performance is not indicative of future results. Progress of Social Business I ： Expanding Club Activity Contracts Securing contracts nationwide, from major metropolitan areas to regional cities, driving the number of managed club activities to a record high. ※ As Japan’s national “reform implementation period” for club activities begins in fiscal year 2026, we are positioned to capture growth opportunities in the JPY500 billion market and strengthen our position as Japan’s leading school club activity support provider . Market size is estimated by the Company based on past contract performances. Achievements as Strategy progress and new client municipalities Contracted schools 478 Contracted club activities 2,224 Ota Ward, Tokyo ( Population: 0.75 million ) Kawasaki City, Kanagawa Prefecture （ Population: 1.57 million ） Chiba City, Chiba Prefecture ( Population: 1 million ） Fujisawa City, Kanagawa Prefecture ( Population: 0.44 million ) Niiza City, Saitama Prefecture ( Population: 0.17 million ) ＜ Newly Contracted Municipalities ＞ +37.0 ％ YoY +6.2 ％ YoY Conducting proof - of - concept testing & track record building Expansion into government - designated cities and special wards Expansion to cities nationwide & in regional areas Completed Steadily progressing ＰＨＡＳＥ １ ＰＨＡＳＥ 2 ＰＨＡＳＥ 3 Kawasaki City [https://www.city.kawasaki.jp/170/page/0000186995.html]20260501 Chiba City [https://www.city.chiba.jp/sogoseisaku/sogoseisaku/kikaku/tokei/top.html] 20260501 Ota Ward [https://www.city.ota.tokyo.jp/kuseijoho/suuji/jinkou/setai_jinkou/oota_suji0808.html] 20260901 Fujisawa City [https://www.city.fujisawa.kanagawa.jp/bunsho/shise/toke/jinko/jinko/index.html] 20260501 Niiza City [https://www.city.niiza.lg.jp/site/toukei/] 20260901
23 Copyright © 2026 LEIFRAS CO., LTD. All rights reserved. There is no guarantee that any specific outcome will be achieved. Investments may be speculative, illiquid and there is a ris k o f loss. Past performance is not indicative of future results. The number of contracted government - designated cities and Tokyo special wards has increased, steadily expanding our business in urban areas. Market Size: Our own calculation method based on past contract performance Government - designated Cities 3 42.9 % Cities currently under contract Tokyo 23 Special Wards 8 Wards for which we provide services Chiyoda Ward Minato Ward Shinjuku Ward Taito Ward Shinagawa Ward Ota Ward Shibuya Ward Suginami Ward Chiba City Greater Tokyo Area branch Kawasaki City Greater Tokyo Area branch Nagoya City Tokai branch / 7 / 12 ■ Additional Cities Awarded Contracts from July to September 2026 Public Tenders Conducted: 9 Cities Contracts Awarded: 5 Cities Success Rate: 55.6% Sapporo City Kyoto City Public Tenders Conducted: 14 Wards Contracts Awarded: 10 Wards Success Rate: 71.4% ■ Additional Cities Awarded Contracts from July to September 2026 Adachi Ward Edogawa Ward 66.7 % cities that conducted public tenders (out of 20 government - designated cities) wards that conducted public tenders (out of 23 Tokyo special wards) Contract win rate Contract win rate
24 Copyright © 2026 LEIFRAS CO., LTD. All rights reserved. There is no guarantee that any specific outcome will be achieved. Investments may be speculative, illiquid and there is a ris k o f loss. Past performance is not indicative of future results. Progress of Social Business I ： Expanding Contracted Municipalities End of June 2026 End of June 2025 Number of contracted municipalities Number of contracted schools Number of contracted club activities １ 9 municipalities 349 schools 2,095 clubs municipalities schools clubs Number of contracted municipalities Number of contracted schools Number of contracted club activities Market size is estimated by the Company based on past contract performances. Hokkaido Ebetsu City Muroran City Mombetsu City Suita City Yao City Sayama City Osaka Shingu Town Shime Town Fukuoka Beppu City Oita Nagoya City Tobishima Village Nagakute City Aichi Ebetsu City Muroran City Mombetsu City Suita City Yao City Sayama City Osaka Shingu Town Shime Town Fukuoka Beppu City Oita Nagoya City Tobishima Village Nagakute City Aichi Kanagawa Chiba Saitama Shinjuku Ward Shinagawa Ward Suginami Ward Taito Ward Shibuya Ward Minato Ward Chiyoda Ward Tokyo Shinjuku Ward Shinagawa Ward Suginami Ward Taito Ward Shibuya Ward Minato Ward Chiyoda Ward Tokyo Hokkaido
25 Copyright © 2026 LEIFRAS CO., LTD. All rights reserved. There is no guarantee that any specific outcome will be achieved. Investments may be speculative, illiquid and there is a ris k o f loss. Past performance is not indicative of future results. Progress of Social Business II ： Expanding from Our Core Businesses into the Childcare Sector By moving customer touchpoints earlier in the customer journey, entering the childcare business to secure touchpoints with infants aged 0 , and evolving into a lifelong educational growth platform. Childcare services ： SWIFT JAPAN Co., Ltd. 5 small - scale licensed daycare centers, 1 corporate - sponsored daycare center, and 1 after - school care facility Existing businesses: Sports School Business, Social Business While e stablishing a solid, government subsidy - backed foundation and entering new markets. Collaboration with HR Produce, Co., Ltd. partnering with 10,000+ preschools nationwide Solving challenges in the childcare industry through the introduction of the “ Milabo ” non - cognitive skills assessment system and the opening of a school within the facility The share transfer agreement was signed on June 23, 2026, and SWIFT JAPAN became our subsidiary on July 1, 2026.
26 Copyright © 2026 LEIFRAS CO., LTD. All rights reserved. There is no guarantee that any specific outcome will be achieved. Investments may be speculative, illiquid and there is a ris k o f loss. Past performance is not indicative of future results. Progress of Social Business III ｜ After - School Daycare Services We have launched new after - school daycare services with a wider range of developmental support programs. This enables us to meet more diverse needs and lays the groundwork for our regional expansion strategy. The number of facilities 29 Growth rate YoY +9 facilities YoY Existing business Therapeutic education centered on soccer New initiatives Indoor - focused exercise learning support Expansion of service areas in line with service diversification Community - based approach t hrough the dominant strategy Achievements in H1 FY2026 New initiatives Support for independent learning (PC skills, etc.)
27 Copyright © 2026 LEIFRAS CO., LTD. All rights reserved. There is no guarantee that any specific outcome will be achieved. Investments may be speculative, illiquid and there is a ris k o f loss. Past performance is not indicative of future results. Achievements of Leifras : Comprehensive Initiatives in Aichi Prefecture In Aichi Prefecture, we are implementing a regional strategy that integrates sports schools, school club support, welfare services, childcare, and after - school programs. By building this comprehensive “Aichi Model” infrastructure, we aim to address a wide range of social issues. Age ０ Age 3 Age 6 Age 9 Age 12 Age 15 Childcare Business SWIFT JAPAN Elementary School Club Activities Support Business （ Nagoya City ２ ３８ schools ） After - School Daycare Services Nagoya Sports & Culture Community Leifras Sports School (Sports School Offering a Total of 13 Sports) Tokai Sports (A Club Specializing in Soccer) New M&A New M&A Social Business Sports School Business Junior High School Club Activities Support Business Leveraging expertise gained from this model to address a wider range of social issues. Kindergarten and Daycare Center Partnerships After - School Programs The share transfer agreement was signed on June 23, 2026, and SWIFT JAPAN became our subsidiary on July 1, 2026.
28 Copyright © 2026 LEIFRAS CO., LTD. All rights reserved. There is no guarantee that any specific outcome will be achieved. Investments may be speculative, illiquid and there is a ris k o f loss. Past performance is not indicative of future results. INDEX 1. Company Profile 2. Executive Summary 3. H1 FY2026 Consolidated Financial Results 4. Progress of the Growth Strategy 6. 2026 Full - Year Consolidated Financial Forecast 7. Appendix • Growth Strategy • Capital Allocation • Reference Materials
29 Copyright © 2026 LEIFRAS CO., LTD. All rights reserved. There is no guarantee that any specific outcome will be achieved. Investments may be speculative, illiquid and there is a ris k o f loss. Past performance is not indicative of future results. Consolidated BS Highlights Maintaining a sound financial foundation. . Change % Change 2026/6/30 2025/12/31 (in thousands of USD) - 0.5 % - 98 21,260 21,358 Total current assets 23.2 % 1,714 9,107 7,393 Total non - current assets 5.6 % 1,616 30,367 28,751 Total assets 2.1 % 285 14,121 13,836 Total current liabilities 24.1 % 857 4,415 3,558 Total non - current liabilities 6.6 % 1,142 18,536 17,394 Total liabilities 4.2 % 474 11,831 11,357 Total shareholders’ equity 5.6 % 1,616 30,367 28,751 Total liabilities and shareholders’ equity USD ¥162.61=$1.00
30 Copyright © 2026 LEIFRAS CO., LTD. All rights reserved. There is no guarantee that any specific outcome will be achieved. Investments may be speculative, illiquid and there is a ris k o f loss. Past performance is not indicative of future results. Consolidated CF Highlights FY ２ 6 H1 FY ２ 5 H1 (in thousands of USD) 1,554 1,924 Net cash provided by operating activities - 1,310 - 290 Net cash used in investing activities 172 - 1,882 Net cash (used in) provided by financing activities 417 - 249 Changes in cash and cash equivalents 15,939 15,363 Cash and cash equivalents at the end of the period Operating cash flow remained solid, with a strong cash position. USD ¥162.61=$1.00
31 Copyright © 2026 LEIFRAS CO., LTD. All rights reserved. There is no guarantee that any specific outcome will be achieved. Investments may be speculative, illiquid and there is a ris k o f loss. Past performance is not indicative of future results. INDEX 1. Company Profile 2. Executive Summary 3. H1 FY2026 Consolidated Financial Results 4. Progress of the Growth Strategy 5. Consolidated Financial Position 7. Appendix • Growth Strategy • Capital Allocation • Reference Materials
32 Copyright © 2026 LEIFRAS CO., LTD. All rights reserved. There is no guarantee that any specific outcome will be achieved. Investments may be speculative, illiquid and there is a ris k o f loss. Past performance is not indicative of future results. We predict continued growth with no changes to our Earnings Forecast . The guidance includes the results of Well Resources (from May 1, 2026), Tokai Sports (from June 1, 2026) and SWIFT JAPAN (fro m J uly 1, 2026). It does not assume any further business acquisitions, restructuring activities or legal settlements during the period. Consolidated Earnings Forecast for the Fiscal Year Ending December 2026 YoY Change % YoY Change FY26 FY25 FY24 （ in thousand USD ） 27.9% 20,865 95,663 74,798 65,878 Net revenue - - - 10.8% 8,110 82,908 33.9% 1,356 5,357 4,001 3,315 Income from operations - - - 13.2% 527 4,528 0.3% 5.6% 5.3% 5.0% Operating profit margin - - - 0.2% 5.5% (High) (Low) (High) (Low) (High) (Low) The USD amounts are translated at JPY156.80 per US$1.00, the exchange rate used for our FY2026 earnings forecast. 一寺 1
33 Copyright © 2026 LEIFRAS CO., LTD. All rights reserved. There is no guarantee that any specific outcome will be achieved. Investments may be speculative, illiquid and there is a ris k o f loss. Past performance is not indicative of future results. INDEX 1. Company Profile 2. Executive Summary 3. H1 FY2026 Consolidated Financial Results 4. Progress of the Growth Strategy 5. Consolidated Financial Position 6. 2026 Full - Year Consolidated Financial Forecast • Capital Allocation • Reference Materials
34 Copyright © 2026 LEIFRAS CO., LTD. All rights reserved. There is no guarantee that any specific outcome will be achieved. Investments may be speculative, illiquid and there is a ris k o f loss. Past performance is not indicative of future results. Increase in graduates (withdrawals) due to current members reaching higher grades Issues and factors Strategies and measures Expansion of sports school business We are focusing on enhancing the quality of our class offerings and customer services, to continue being chosen by our customers and expanding market share and strengthening customer attraction, for sustainable growth. Internal environment Quality enhancement E xternal environment Growing awareness of the need to protect one's livelihood due to the effects of prolonged price hikes The special demand (rebound demand) after the COVID - 19 pandemic has run its course Market Share expansion and b randing s trengthening customer attraction Differentiation through enhanced branding of the non - cognitive ability measurement system " Milabo “ Opening new student - led schools utilizing school facilities through comprehensive partnership agreements with universities and vocational schools and alliances with other companies in the same industry that share our philosophy
35 Copyright © 2026 LEIFRAS CO., LTD. All rights reserved. There is no guarantee that any specific outcome will be achieved. Investments may be speculative, illiquid and there is a ris k o f loss. Past performance is not indicative of future results. Expanding the share of club activities | Market size and national policy roadmap I 202 3 2024 2025 2026 2027 2028 2029 2030 2031 Reform promotion period 2026 school year will see the start of a "reform implementation period" for club activities. In principle, all club activities held on holidays will be transferred to the local community. TAM | Club activity market size Our current position as of June 30, 2026 Approximately junior high schools nationwide *1 Approximately USD Number of contracted schools: 478 FY2025 Sales: approx. USD 12.9 million *1: <Source> e - Stat Government Statistics Portal Site/Number of Schools in 2025 *2: Market Size: Our own calculation method based on past contract performance *3: <Source> Club Activity Reform Portal Site/New Guidelines Regarding Club Activity Reform (This is merely a national plan a nd is not necessarily guaranteed to be implemented.) Weekends: All school club activities are planned to be expanded to the community Weekdays: Resolve various issues and promote reform. Reform implementation period FY2025 Club Activity Support Business
36 Copyright © 2026 LEIFRAS CO., LTD. All rights reserved. There is no guarantee that any specific outcome will be achieved. Investments may be speculative, illiquid and there is a ris k o f loss. Past performance is not indicative of future results. Expanding the share of club activities | Market size and national policy roadmap II 202 3 Results 2024 Results Scheduled for 2025 Scheduled for 2026 2027 ～ The Japanese government has announced that it plans to transfer "more than 30%" of holiday club activities to local communities and the private sector in fiscal 2026. *1 [ Source ] Survey on the status of club activity reform efforts (Agency for Sports and Agency for Cultural Affairs) 4.7 % ( 6,049 clubs ) 8.5 % ( 10,910 clubs ) 16.6 % ( 21,208 clubs ) ( 38,954 clubs ) Regional club activity development ratio across Japan and plans for * Ratio of local club activities across Japan (number of local club activities: number of clubs) * The percentage was calculated using a total of 128,000 clubs as the denominator (number of lobal club activities nationwide). Reform promotion period (demonstration experiment) *1: <Source> Club Activity Reform Portal Site/New Guidelines Regarding Club Activity Reform (This is merely a national plan a nd is not necessarily guaranteed to be implemented.)
37 Copyright © 2026 LEIFRAS CO., LTD. All rights reserved. There is no guarantee that any specific outcome will be achieved. Investments may be speculative, illiquid and there is a ris k o f loss. Past performance is not indicative of future results. Number of school clubs managed : Repeat rate (continuation rate) from local governments: 100 % Collaboration with local governments (cumulative total from 2013 to 2025 ) • P refectures : ( 47 prefectures nationwide) • Special ward : (all 23 wards in Tokyo) Business areas: of sports instructors (full - time employees): of club activity instructors (part - time employees): Training through unique programs and thorough supervision by the general manager Achievements in safety management • Since accepting club activities in 2013, there Expanding share of club activities business | Competitive advantage I (barriers to entry) We have built up a barrier to entry through our established "trust, track record, and know - how" and our overwhelming "instructor platform" that is unique to our company. Competitive Advantage (Barriers to entry)
38 Copyright © 2026 LEIFRAS CO., LTD. All rights reserved. There is no guarantee that any specific outcome will be achieved. Investments may be speculative, illiquid and there is a ris k o f loss. Past performance is not indicative of future results. Japan Private Education Council Expanding the share of club activities | Competitive advantage II (Network with the national government) Nippon Sport Policy Commission Japan Sport Association ( JSPO ) A strategic think tank and lobbying organization that proposes national sports policies and promotes industrialization A unified organization of the Japanese sports world that works to create an environment for "watching," "playing," and "supporting" sports. Japan Private Education Council An organization that brings together organizations representing various fields of private education to promote social contribution for children and contribute to the development of private education. Representative: Kiyotaka Ito *1: <Source> Club Activity Reform Portal Site/New Guidelines Regarding Club Activity Reform (This is merely a national plan a nd is not necessarily guaranteed to be implemented.) *2: All marks are trademarks or registered trademarks of their respective owners. The display of trademarks herein does not i mpl y that a license of any kind has been granted. Member
39 Copyright © 2026 LEIFRAS CO., LTD. All rights reserved. There is no guarantee that any specific outcome will be achieved. Investments may be speculative, illiquid and there is a ris k o f loss. Past performance is not indicative of future results. Expanding market share in club activity programs | Strategies by phase Phase 2 will focus on "designated cities" where the balance between population density and market size is optimal. Phase 3 will expand to "nationwide and regional cities." Demonstration experiments and track record building Development into "Government - Designated Cities" Expansion to the whole country and regional cities PHASE 1 PHASE 2 PHASE 3 Target Designated cities Approximately Tokyo 23 wards: Approximately (number of schools not currently under contract) Strategy Scaling to a "City Designated by Government Ordinance" • The know - how gained will be expanded to urban areas. • Maximize recruitment and operational efficiency • A shift from "testing" to "commercialization." Completion Medium to long term ● Target nationwide ● Strategy Infrastructure development throughout the entire country • Utilizing the enhanced operating system from Phase 2 • Introduction of a highly efficient remote and supervisory management model that works even in areas with low population density. ● Achievements schools clubs ● Strategy Business model validation Establishing a revenue base * This is merely a national plan and is not necessarily guaranteed to be implemented.
40 Copyright © 2026 LEIFRAS CO., LTD. All rights reserved. There is no guarantee that any specific outcome will be achieved. Investments may be speculative, illiquid and there is a ris k o f loss. Past performance is not indicative of future results. By offering direct employment and clear career paths, we can continuously attract talented young people. by processing approximately 1,000 hiring and terminating transactions per month without delay. utilizing a nationwide network of experienced instructors The high level of reliability that allows for immediate coverage in case of staff shortages With a seamless system that integrates on - site operations and HR, we can quickly respond to the urgent needs of local governments. A llows for both by sharing talent within a given area. The system of allowing side jobs and concurrent employment ensures the availability of diverse professional talent, including current teachers. We are expanding Expanding Market Share in Club Activities | Human Capital Strategy II By utilizing Japan's only "instructor platform," we are building a scalable human resource base to support the rapid expansion of our business. Through comprehensive partnerships with educational institutions (such as Sanko Gakuen ), Human Capital Strategy
41 Copyright © 2026 LEIFRAS CO., LTD. All rights reserved. There is no guarantee that any specific outcome will be achieved. Investments may be speculative, illiquid and there is a ris k o f loss. Past performance is not indicative of future results. Improving operating profit margin | Factors, measures, and future outlook From the “growth investment phase" to the ” margin expansion phase ” . 2023 2024 2025 2026 2027 2028 2029 Management Department School Business Social Business ● Improving LTV (monthly membership fees, events, merchandise sales, etc. ) ● Cost reduction by opening a school in kindergarten or school facilities ● Increase number of members per employee (increase in classes for younger employees) ● Proof of concept → Convert to full contract to increase ● Expand peripheral revenues (insurance, systems, etc.) ● Reduce costs per project through economies of scale ● Utilize Digital Transformation (DX) / Artificial Intelligence ( AI) ● Fixed management costs ● Improving business efficiency From expansion to increased profit density Increase in projects = conversion to profit margin Sales growth = profits source of leverage ・ Club activity demonstration experiment ・ Human resource investment ・ IPO/ management system development LTV of school business ・ Reduce personnel in administrative departments ・ Reduce fixed costs ・ Utilize DX/AI Growth investment phase Margin Expansion Phase * This is merely a national plan and is not necessarily guaranteed to be implemented.
42 Copyright © 2026 LEIFRAS CO., LTD. All rights reserved. There is no guarantee that any specific outcome will be achieved. Investments may be speculative, illiquid and there is a ris k o f loss. Past performance is not indicative of future results. INDEX 1. Company Profile 2. Executive Summary 3. H1 FY2026 Consolidated Financial Results 4. Progress of the Growth Strategy 5. Consolidated Financial Position 6. 2026 Full - Year Consolidated Financial Forecast • Growth Strategy • Reference Materials
43 Copyright © 2026 LEIFRAS CO., LTD. All rights reserved. There is no guarantee that any specific outcome will be achieved. Investments may be speculative, illiquid and there is a ris k o f loss. Past performance is not indicative of future results. Improving corporate value to achieve our mission and social mission of "Changing and Designing Sports" Capital Allocation We will prioritize promoting M&A (growth investment) and aim to improve corporate value through inorganic growth. Purpose Aims of target M & A policy Rigorous investigation and deliberation of consistency with overall strategy, synergy effects, investment rationality, risks and integration issues, etc. Basic Policy M&A with the aim of sustainable business expansion and synergy creation. All companies acquired in the past have completed PMI as planned. Acquired companies have achieved significant growth in collaboration with Leifras . M & A track record * This is merely a plan and is not necessarily guaranteed to be implemented. Expansion of business areas and improvement of customer LTV Strengthening of talent acquisition pipelines and efficient improvement of organizational infrastructure High value - added and efficient services through the use of technology
44 Copyright © 2026 LEIFRAS CO., LTD. All rights reserved. There is no guarantee that any specific outcome will be achieved. Investments may be speculative, illiquid and there is a ris k o f loss. Past performance is not indicative of future results. INDEX 1. Company Profile 2. Executive Summary 3. H1 FY2026 Consolidated Financial Results 4. Progress of the Growth Strategy 5. Consolidated Financial Position 6. 2026 Full - Year Consolidated Financial Forecast • Growth Strategy • Capital Allocation
45 Copyright © 2026 LEIFRAS CO., LTD. All rights reserved. There is no guarantee that any specific outcome will be achieved. Investments may be speculative, illiquid and there is a ris k o f loss. Past performance is not indicative of future results. Adjusted Income from Operations FY ２ 6 H1 FY ２ 5 H1 ( in thousands of USD ) 568 418 Income from operations 291 - Plus: acquisition - related costs (a) 859 418 Adjusted income from operations USD figures are based on JPY to USD ¥162.61=$1.00 (a) Represents acquisition - related costs incurred in connection with our acquisition activities, including transaction - related c osts, legal, financial and tax due diligence expenses, integration costs and other acquisition - related costs. These costs have been added back for normalization purposes as they are not considered reflective of our core ope rating performance. Adjusted income from operations is a financial measure that is not calculated in accordance with U.S. Generally Accepted Acco unt ing Principles (“GAAP”) (collectively referred to as the “non - GAAP financial measures”), and the use of the terms adjusted income from operations may di ffer from similar measures reported by other companies and may not be comparable to other similarly titled measures.. We believe the non - GAAP financial measure provides investors with useful information with respect to our historical operations. We present the non - GAAP financial measure as supplemental performance measures because we believe it facilitates a comparative assessment of our oper ati ng performance relative to our performance based on our results under GAAP, while isolating the effects of some items that vary from period to period. Specifically, adjusted income from operations allows us to assess our performance without the impact of the specifically iden tif ied items that we believe do not directly reflect our core operations, including acquisition - related costs and other items that management does not consider refl ective of our core operating performance. The non - GAAP financial measure also functions as key performance indicator used to evaluate our operating performance internall y, and it is used in connection with the determination of incentive compensation for management, including executive officers.
46 Copyright © 2026 LEIFRAS CO., LTD. All rights reserved. There is no guarantee that any specific outcome will be achieved. Investments may be speculative, illiquid and there is a ris k o f loss. Past performance is not indicative of future results. Supplementary materials on national policy ① <Source> Japan Sports Agency - Club Activity Reform Portal Site / New Guidelines Regarding Club Activity Reform Summary: Overview of the Guidelines for Reform of School Extracurricular Activities 1. Philosophy of the Reform The primary goal is to ensure that students can continue to enjoy sports and cultural activities in the future, despite the rapidly declining birthrate. By shifting from school - based activities to a community - wide support system, the reform aims to create new value and more diverse opportunities for all students. 2. Reform Timeline FY2023 – 2025: Reform Promotion Period FY2026 – 2028: Reform Implementation Period (Phase 1) FY2029 – 2031: Reform Implementation Period (Phase 2) Key Target: Realizing the transition of weekend/holiday activities to community - based clubs, in principle, across all schools during the implementation period starting in FY2026. 1. Key Policies and Certification System Weekends/Holidays: Prioritize the transition to community - based activities. Certification: Municipalities will establish a system to certify "Certified Community Club Activities." To be certified, clubs must meet specific requirements regarding activity hours (e.g., max 3 hours on holidays), rest days, and instructor qualifications. Benefits of Certification: Certified clubs will receive public support (financial aid, priority use of school facilities) and smoother participation in competitions. 2. Implementation and Addressing Challenges Support System: Municipalities take the lead in providing resources, appointing coordinators, and collaborating with private companies and universities. Safety and Standards: Strict measures will be taken to prevent misconduct, including the use of "Japanese version of DBS" (criminal record checks for instructors) and ensuring student safety (heatstroke prevention, etc.).Operational Challenges: Focus areas include securing instructors, finding activity venues, arranging transportation, and ensuring inclusivity for students with disabilities.
47 Copyright © 2026 LEIFRAS CO., LTD. All rights reserved. There is no guarantee that any specific outcome will be achieved. Investments may be speculative, illiquid and there is a ris k o f loss. Past performance is not indicative of future results. Supplementary materials on national policy ② <Source> Japan Sports Agency - Club Activity Reform Portal Site / New Guidelines Regarding Club Activity Reform Summary: Progress Status of Regional Transition for Extracurricular Activities (Weekends/Holidays) 1. Overall Progress Since the "Reform Promotion Period" began in FY2023, the transition of school club activities to the community has been progressing steadily. By FY2026 (the start of the implementation period), it is projected that approximately 30% (30.4%) of all club activities will have transitioned into community - based clubs. 2. Trends in the Number of Club Activities (Sports & Arts/Culture Combined) FY2023 (Actual): 11.2% total (4.7% regional transition + 6.5% regional cooperation). FY2026 (Projected): 36.6% total (30.4% regional transition + 6.2% regional cooperation). Observation: There is a significant shift towards full "regional transition" (becoming community clubs) rather than just "regional cooperation" (such as joint school teams). 3. Number of Participating Municipalities The number of local governments planning to implement regional transitions by FY2026 is increasing sharply: Sports: 1,097 municipalities Arts & Culture: 646 municipalities The data shows a clear upward trend, indicating that the movement to shift school activities to the local community is gaining momentum nationwide.
For inquiries, please contact LEIFRAS Co., Ltd. / IR Department : Email : [email protected]
Exhibit 99.4
LEIFRAS Co., Ltd. Reports First Half of Fiscal Year 2026 Financial Results
Record-High First-Half Revenue and Operating Income, Up 8.9% and 35.9% Year Over Year, Respectively[1]
TOKYO, October 7, 2026 /PRNewswire/ – LEIFRAS Co., Ltd. (Nasdaq: LFS) (the “Company” or “Leifras”), a sports and social business company dedicated to youth sports and community engagement, and a leading operator of children’s sports schools and school club activity support businesses in Japan, today announced its unaudited financial results for the six months ended June 30, 2026.
First Half of Fiscal Year 2026 Financial Highlights
| ● | Revenue was JPY5,978.8 million ($36.8 million), an increase of 8.9% from JPY5,488.8 million for the same period last year. |
| ● | Income from operations was JPY92.3 million ($0.6 million), an increase of 35.9% from JPY67.9 million for the same period last year. |
| ● | Net income was JPY77.1 million ($0.5 million), an increase of 43.5% from JPY53.7 million for the same period last year. |
| ● | Adjusted income from operations was JPY139.7 million ($0.9 million), an increase of 105.6% from JPY67.9 million for the same period last year. |
| ● | Basic and diluted earnings per share were JPY2.95 ($0.02), compared to JPY2.16 for the same period last year. |
First Half of Fiscal Year 2026 Operational Highlights
Sports School Business
| ● | Number of members was 68,873, a decrease of 0.9% from 69,500 as of June 30, 2025. |
| ● | Revenue of the sports school business was JPY4,148.5 million ($25.5 million), an increase of 5.4% from JPY3,937.7 million for the same period last year. |
Social Business
| ● | Number of schools was 478, an increase of 37.0% from 349 as of June 30, 2025. |
| ● | Number of club activities was 2,224, an increase of 6.2% from 2,095 as of June 30, 2025. |
| ● | Revenue of the social business was JPY1,830.3 million ($11.3 million), an increase of 18.0% from JPY1,551.1 million for the same period last year. |
Management Commentary
Mr. Kiyotaka Ito, the Representative Director and Chief Executive Officer of Leifras, commented, “We are pleased to report continued strong financial performance in the first half of fiscal year 2026. Both our sports school business and social business achieved revenue growth, contributing to an 8.9% year-over-year increase in total revenue, a record-high[1]. Profitability also continued to improve, with higher gross profit margin contributing to a 35.9% increase in income from operations and a 43.5% increase in net income.
“In our core sports school business, we remain committed to delivering our distinctive educational services that foster children’s non-cognitive skills. Meanwhile, our social business continued to grow as we expanded our efforts to support local sports environments, increasing the number of contracted schools for club activity support to 478, up 37.0% year over year. We will continue to draw on the people and expertise we have developed through sports education to support children’s growth, address challenges facing local communities, and sustainably enhance corporate value.”
Financial Condition
| ● | As of June 30, 2026, the Company had cash and cash equivalents of JPY2,591.8 million ($15.9 million), compared to JPY2,524.1 million as of December 31, 2025. |
| ● | Net cash provided by operating activities was JPY252.7 million ($1.6 million) for the six months ended June 30, 2026, compared to JPY312.8 million for the same period last year. |
| ● | Net cash used in investing activities was JPY213.0 million ($1.3 million) for the six months ended June 30, 2026, compared to JPY47.2 million for the same period last year. |
| ● | Net cash provided by financing activities was JPY28.0 million ($0.2 million) for the six months ended June 30, 2026, compared to net cash used in financing activities of JPY306.1 million for the same period last year. |
Financial Guidance
| ● | Revenue is expected to be between $82.9 million and $95.7 million for the fiscal year ending December 31, 2026, an increase of approximately 10.8% to 27.9% from $74.8 million for the fiscal year ended December 31, 2025. |
| ● | Income from operations is expected to be between $4.5 million and $5.4 million for the fiscal year ending December 31, 2026, an increase of approximately 13.2% to 33.9% from $4.0 million for the fiscal year ended December 31, 2025. |
The guidance includes the results of Well Resources (from May 1, 2026), Tokai Sports (from June 1, 2026) and SWIFT JAPAN (from July 1, 2026). It does not assume any further business acquisitions, restructuring activities or legal settlements during the period. The guidance is translated at the FY2025 assumed exchange rate of US$1 = JPY156.80, the same rate used in the first quarter, to eliminate the impact of foreign exchange volatility. This rate will be used for the guidance throughout fiscal 2026.
Conference Call Information
The Company will host an English-language conference call at 8:30 a.m. U.S. Eastern Time (9:30 p.m. Japan Standard Time) on October 8, 2026, and a Japanese-language conference call at 3:00 a.m. U.S. Eastern Time (4:00 p.m. Japan Standard Time) on October 9, 2026.
To attend the earnings conference calls, please use the following access information.
Dial-in details for the English-language conference call:
| Date: | October 8, 2026 | ||
| Time: | 8:30 a.m. U.S. Eastern Time (9:30 p.m. Japan Standard Time) | ||
| International: | 1-412-902-4272 | ||
| USA/CANADA TOLL-FREE: | 1-888-346-8982 | ||
| Conference ID: | Leifras Co., Ltd. | ||
| Webcast: | https://event.choruscall.com/mediaframe/webcast.html?webcastid=bdQ8V0Li |
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Dial-in details for the Japanese-language conference call:
| Date: | October 9, 2026 | ||
| Time: | 3:00 a.m. U.S. Eastern Time (4:00 p.m. Japan Standard Time) | ||
| Registration: | https://zoom.us/webinar/register/WN_JUTCspQ2QqGvyKLp5vCfqA |
Please dial in at least 15 minutes before the commencement of the English-language call to ensure timely participation.
A live webcast of the English-language conference call will be available through the webcast link above.
Exchange Rate Information
This announcement contains translations of certain Japanese Yen (“JPY”) amounts into U.S. dollars (“USD” or “$”) for the convenience of the reader. Translations of historical financial amounts from JPY into USD have been made at the exchange rate of JPY162.61 = $1.00, the noon buying rate as of June 30, 2026 published in the H.10 statistical release of the United States Federal Reserve Board.
Note: [1] Record high for the corresponding six-month period in US-GAAP figures since fiscal year 2023.
About LEIFRAS Co., Ltd.
Headquartered in Tokyo, Leifras is a sports and social business company dedicated to youth sports and community engagement. The Company primarily provides services related to the organization and operations of sports schools and sports events for children. Leifras was recognized as Japan’s largest operator of children’s sports schools in terms of both membership and number of schools, as well as the leading provider of school club activity support in terms of the number of contracted schools, according to Tokyo Shoko Research as of December 2025. The Company’s approach to sports education emphasizes the development of non-cognitive skills, following the teaching principle “acknowledge, praise, encourage, and motivate.” Its holistic approach integrates physical and mental development. Building on its experience and expertise in sports education, Leifras also operates a social business that supports school club activities, provides sports therapy for children with developmental disabilities, and offers exercise programs for the elderly. As of June 30, 2026, the Company supported 2,224 club activities at 478 schools.
For more information, please visit the Company’s website: https://ir.leifras.co.jp/.
Non-GAAP Financial Measures
The Company discusses a key financial measure that is not calculated in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) to supplement its unaudited interim condensed consolidated financial statements presented on a GAAP basis. This non-GAAP financial measure is reconciled to its most directly comparable financial measure determined in accordance with GAAP as follows:
Non-GAAP Financial Measures and Reconciliation
Adjusted INCOME FROM OPERATIONS
| For the Six Months Ended June 30, | ||||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| JPY | JPY | US$ | ||||||||||
| INCOME FROM OPERATIONS | 67,929,244 | 92,309,685 | 567,676 | |||||||||
| Plus: acquisition-related costs(a) | - | 47,365,619 | 291,284 | |||||||||
| Adjusted INCOME FROM OPERATIONS | 67,929,244 | 139,675,304 | 858,960 | |||||||||
| (a) | Represents acquisition-related costs incurred in connection with the Company’s acquisition activities, including transaction-related costs, legal, financial and tax due diligence expenses, integration costs and other acquisition-related costs. These costs have been added back for normalization purposes as they are not considered reflective of the Company’s core operating performance. |
3
The Company’s primary non-GAAP financial measure and corresponding metrics reflect how the Company evaluates the Company’s current and prior year operating results. As new events or circumstances arise, these definitions could change. When the Company’s definitions change, the Company provides the updated definitions. When items no longer impact the Company’s current or future presentation of non-GAAP operating results, the Company removes these items from the Company’s non-GAAP definitions.
Adjusted income from operations is a financial measure that is not calculated in accordance with GAAP (collectively referred to as the “non-GAAP financial measures”), and the use of the term adjusted income from operations may differ from similar measures reported by other companies and may not be comparable to other similarly titled measures. The Company believes the non-GAAP financial measure provides investors with useful information with respect to the Company’s historical operations. The Company presents the non-GAAP financial measure as a supplemental performance measure because the Company believes it facilitates a comparative assessment of the Company’s operating performance relative to the Company’s performance based on the Company’s results under GAAP, while isolating the effects of some items that vary from period to period. Specifically, adjusted income from operations allows the Company to assess the Company’s performance without the impact of the specifically identified items that the Company believes do not directly reflect the Company’s core operations, including acquisition-related costs and other items that management does not consider reflective of the Company’s core operating performance. The non-GAAP financial measure also functions as a key performance indicator used to evaluate the Company’s operating performance internally, and it is used in connection with the determination of incentive compensation for management, including executive officers.
As the Company’s initial public offering was completed during the fiscal year ended December 31, 2025, and the related listing-related and transformational expenses were specific to the Company’s initial public offering and related transformation activities, the Company does not expect to incur such expenses in the fiscal year ending December 31, 2026 or future periods. Accordingly, beginning with the fiscal year ending December 31, 2026, the Company has revised the Company’s presentation of adjusted income from operations and removed listing-related and transformational expenses from the adjustments to adjusted income from operations for all historical periods presented.
Adjusted income from operations is not a measurement of the Company’s financial performance under GAAP and should not be considered in isolation or as an alternative to income from operations or any other financial statement data presented as indicators of financial performance or liquidity, each as presented in accordance with GAAP. Consequently, the Company’s non-GAAP financial measure should be considered together with the Company’s unaudited interim condensed consolidated financial statements, which are prepared in accordance with GAAP. The Company understands that although adjusted income from operations is frequently used by securities analysts, lenders and others in their evaluation of companies, it has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of the Company’s results as reported under GAAP. Some of these limitations are: adjusted income from operations does not fully reflect the Company’s cash expenditures, future requirements for capital expenditures or contractual commitments; adjusted income from operations does not reflect changes in, or cash requirements for, the Company’s working capital needs; adjusted income from operations does not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on debt; and although depreciation and amortization expenses are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and adjusted income from operations does not reflect any cash requirements for such replacements.
Because of these limitations, adjusted income from operations should not be considered as discretionary cash available to the Company to reinvest in the growth of the Company’s business or as a measure of cash that will be available to the Company to meet the Company’s obligations.
4
Forward-Looking Statements
Certain statements in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company’s current expectations and projections about future events that the Company believes may affect its financial condition, results of operations, business strategy, and financial needs. Investors 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 press release. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequently occurring events or circumstances, or changes in its expectations, except as may be required by law. These statements are subject to uncertainties and risks, including, but not limited to, the uncertainties related to market conditions, and other factors discussed in the “Risk Factors” section of the annual report on Form 20-F filed with the U.S. Securities and Exchange Commission (the “SEC”). Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the annual report and other filings with the SEC. Additional factors are discussed in the Company’s filings with the SEC, which are available for review at www.sec.gov.
For more information, please contact:
LEIFRAS Co., Ltd.
Investor Relations Department
Email: [email protected]
Ascent Investor Relations LLC
Tina Xiao
Phone: +1-646-932-7242
Email: [email protected]
5
LEIFRAS CO., LTD. AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
| December 31, | June 30, | June 30, | ||||||||||
| 2025 JPY |
2026 JPY |
2026 US$ |
||||||||||
| (Unaudited) | (Unaudited) | |||||||||||
| ASSETS | ||||||||||||
| CURRENT ASSETS | ||||||||||||
| Cash and Cash Equivalents | 2,524,082,266 | 2,591,813,994 | 15,938,835 | |||||||||
| Accounts receivable, net | 731,083,491 | 655,589,901 | 4,031,670 | |||||||||
| Inventories, net | 21,578,477 | 23,882,759 | 146,871 | |||||||||
| Prepaid expenses | 158,040,280 | 159,110,735 | 978,481 | |||||||||
| Other current assets | 38,219,685 | 26,623,593 | 163,727 | |||||||||
| TOTAL CURRENT ASSETS | 3,473,004,199 | 3,457,020,982 | 21,259,584 | |||||||||
| NON-CURRENT ASSETS | ||||||||||||
| Property and equipment, net | 96,456,471 | 97,668,996 | 600,633 | |||||||||
| Intangible assets, net | 29,631,015 | 113,647,566 | 698,897 | |||||||||
| Operating lease right-of-use assets | 482,694,859 | 480,682,783 | 2,956,047 | |||||||||
| Finance lease right-of-use assets | 236,908,226 | 266,307,429 | 1,637,706 | |||||||||
| Long-term deposits | 150,216,792 | 168,875,717 | 1,038,532 | |||||||||
| Long-term investment | 5,736,500 | 26,986,500 | 165,958 | |||||||||
| Deferred tax assets, net | 164,082,227 | 144,808,910 | 890,529 | |||||||||
| Goodwill | 27,999,994 | 160,524,039 | 987,172 | |||||||||
| Other non-current assets | 8,470,398 | 21,447,986 | 131,899 | |||||||||
| TOTAL NON-CURRENT ASSETS | 1,202,196,482 | 1,480,949,926 | 9,107,373 | |||||||||
| TOTAL ASSETS | 4,675,200,681 | 4,937,970,908 | 30,366,957 | |||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||
| CURRENT LIABILITIES | ||||||||||||
| Short-term loans | 100,000,000 | 100,000,000 | 614,968 | |||||||||
| Current portion of long-term loans | 151,030,000 | 75,013,000 | 461,306 | |||||||||
| Bond payable, current | 40,000,000 | 80,000,000 | 491,975 | |||||||||
| Accounts payable | 196,849,154 | 86,843,874 | 534,062 | |||||||||
| Accrued liabilities | 1,160,996,435 | 1,190,944,650 | 7,323,932 | |||||||||
| Income tax payable | 43,499,500 | 15,797,100 | 97,147 | |||||||||
| Contract liabilities, current | 154,074,620 | 362,735,094 | 2,230,706 | |||||||||
| Operating lease liabilities, current | 138,880,117 | 158,454,943 | 974,448 | |||||||||
| Finance lease liabilities, current | 88,017,810 | 98,236,175 | 604,121 | |||||||||
| Other current liabilities | 176,592,537 | 128,245,967 | 788,673 | |||||||||
| TOTAL CURRENT LIABILITIES | 2,249,940,173 | 2,296,270,803 | 14,121,338 | |||||||||
| NON-CURRENT LIABILITIES | ||||||||||||
| Long-term loans, net of current portion | 24,422,000 | 5,871,000 | 36,105 | |||||||||
| Bond payable, non-current | 18,175,440 | 152,289,808 | 936,534 | |||||||||
| Contract liabilities, non-current | 12,817,448 | 16,117,926 | 99,120 | |||||||||
| Operating lease liabilities, non-current | 347,365,643 | 319,835,831 | 1,966,889 | |||||||||
| Finance lease liabilities, non-current | 144,989,192 | 164,032,009 | 1,008,745 | |||||||||
| Assets retirement obligations | 30,775,915 | 30,984,183 | 190,543 | |||||||||
| Deferred tax liabilities, net | - | 28,777,638 | 176,973 | |||||||||
| TOTAL NON-CURRENT LIABILITIES | 578,545,638 | 717,908,395 | 4,414,909 | |||||||||
| TOTAL LIABILITIES | 2,828,485,811 | 3,014,179,198 | 18,536,247 | |||||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||||||
| SHAREHOLDERS’ EQUITY | ||||||||||||
| Ordinary shares, 80,000,000 shares authorized; 26,560,660 shares issued and 26,160,619 shares outstanding as of December 31, 2025 and June 30, 2026, respectively. | 409,833,241 | 409,833,241 | 2,520,345 | |||||||||
| Additional paid-in capital | 786,906,631 | 786,906,631 | 4,839,227 | |||||||||
| Treasury shares, 400,041 shares as of December 31, 2025 and June 30, 2026, respectively. | (100,012,265 | ) | (100,012,265 | ) | (615,044 | ) | ||||||
| Retained earnings | 749,987,263 | 827,064,103 | 5,086,182 | |||||||||
| TOTAL SHAREHOLDERS’ EQUITY | 1,846,714,870 | 1,923,791,710 | 11,830,710 | |||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | 4,675,200,681 | 4,937,970,908 | 30,366,957 | |||||||||
6
LEIFRAS CO., LTD. AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME
| For the Six Months Ended June 30, | ||||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| JPY | JPY | US$ | ||||||||||
| NET REVENUE | 5,488,810,821 | 5,978,787,041 | 36,767,647 | |||||||||
| Cost of revenue | (4,047,686,339 | ) | (4,212,676,644 | ) | (25,906,627 | ) | ||||||
| GROSS PROFIT | 1,441,124,482 | 1,766,110,397 | 10,861,020 | |||||||||
| Selling, general, and administrative expenses | (1,373,195,238 | ) | (1,673,800,712 | ) | (10,293,345 | ) | ||||||
| INCOME FROM OPERATIONS | 67,929,244 | 92,309,685 | 567,675 | |||||||||
| OTHER INCOME (EXPENSE) | ||||||||||||
| Interest income | 1,211,580 | 2,581,856 | 15,878 | |||||||||
| Interest expense | (9,378,973 | ) | (5,440,318 | ) | (33,456 | ) | ||||||
| Dividend income | 87,500 | 87,900 | 541 | |||||||||
| Grant income | 9,399,558 | 17,310,392 | 106,453 | |||||||||
| Unrealized loss on short-term investment | (224,000 | ) | - | - | ||||||||
| Unrealized gain on long-term investment | - | 4,665,574 | 28,692 | |||||||||
| Loss (Gain) on disposal of long-lived assets | (168,973 | ) | 292,080 | 1,796 | ||||||||
| Other income (expense), net | (20,302,598 | ) | 914,381 | 5,623 | ||||||||
| Total other income (expense), net | (19,375,906 | ) | 20,411,865 | 125,527 | ||||||||
| INCOME BEFORE INCOME TAXES | 48,553,338 | 112,721,550 | 693,202 | |||||||||
| PROVISION FOR INCOME TAXES | ||||||||||||
| Current | (2,788,235 | ) | (15,999,345 | ) | (98,391 | ) | ||||||
| Deferred | 7,941,095 | (19,645,365 | ) | (120,813 | ) | |||||||
| Total benefit from (provision for) income taxes | 5,152,860 | (35,644,710 | ) | (219,204 | ) | |||||||
| NET INCOME | 53,706,198 | 77,076,840 | 473,998 | |||||||||
| WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES | ||||||||||||
| Basic | 24,910,619 | 26,160,619 | 26,160,619 | |||||||||
| Diluted | 24,913,619 | 26,163,619 | 26,163,619 | |||||||||
| EARNINGS PER SHARE | ||||||||||||
| Basic | 2.16 | 2.95 | 0.02 | |||||||||
| Diluted | 2.16 | 2.95 | 0.02 | |||||||||
7
LEIFRAS CO., LTD. AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| For the Six Months Ended June 30, | ||||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| JPY | JPY | US$ | ||||||||||
| Cash flows from operating activities | ||||||||||||
| Net income | 53,706,198 | 77,076,840 | 473,998 | |||||||||
| Adjustments to reconcile net income to net cash provided by operating activities | ||||||||||||
| Depreciation and amortization expense | 66,679,088 | 64,001,684 | 393,590 | |||||||||
| Provision for expected credit loss | 5,788,690 | 2,676,936 | 16,462 | |||||||||
| Loss (Gain) on disposal of property and equipment | 168,973 | (292,080 | ) | (1,796 | ) | |||||||
| Loss on disposal of ROU asset | - | 2,401 | 15 | |||||||||
| Provision for inventory impairment | 719,481 | 571,851 | 3,517 | |||||||||
| Unrealized loss on short-term investment | 224,000 | - | - | |||||||||
| Unrealized gain on long-term investment | - | (4,665,574 | ) | (28,692 | ) | |||||||
| Other non-cash expenses | 215,875 | 5,249,247 | 32,281 | |||||||||
| Deferred tax expense | (7,941,095 | ) | 19,645,365 | 120,813 | ||||||||
| Changes in operating assets and liabilities | ||||||||||||
| Accounts receivable, net | 24,970,807 | 73,377,882 | 451,251 | |||||||||
| Inventories | 450,516 | (2,876,133 | ) | (17,687 | ) | |||||||
| Prepaid expenses | 65,923,967 | (1,037,620 | ) | (6,381 | ) | |||||||
| Long-term deposits | (119,850 | ) | (18,134,685 | ) | (111,523 | ) | ||||||
| Other current assets | (8,421,744 | ) | 12,062,482 | 74,180 | ||||||||
| Other non-current assets | (7,728,297 | ) | (12,977,588 | ) | (79,808 | ) | ||||||
| Accounts payable | (20,679,625 | ) | (114,318,251 | ) | (703,021 | ) | ||||||
| Accrued liabilities | 47,765,059 | 24,712,089 | 151,972 | |||||||||
| Contract liabilities | 217,944,834 | 211,960,952 | 1,303,493 | |||||||||
| Operating lease liabilities | 3,212,036 | (5,942,925 | ) | (36,547 | ) | |||||||
| Income tax payable | (72,782,600 | ) | (27,702,400 | ) | (170,361 | ) | ||||||
| Amount due to a director | (1,000,000 | ) | - | - | ||||||||
| Other current liabilities | (56,292,856 | ) | (50,683,167 | ) | (311,685 | ) | ||||||
| Net cash provided by operating activities | 312,803,457 | 252,707,306 | 1,554,070 | |||||||||
| Cash flows from investing activities | ||||||||||||
| Purchase of investment securities | - | (16,584,426 | ) | (101,989 | ) | |||||||
| Purchase of property and equipment | (42,125,175 | ) | (5,821,892 | ) | (35,803 | ) | ||||||
| Purchase of intangible assets | (5,045,000 | ) | (8,548,150 | ) | (52,568 | ) | ||||||
| Acquisition, net of cash acquired | - | (182,039,420 | ) | (1,119,485 | ) | |||||||
| Net cash used in investing activities | (47,170,175 | ) | (212,993,888 | ) | (1,309,845 | ) | ||||||
| Cash flows from financing activities | ||||||||||||
| Payment of finance lease liabilities | (43,752,315 | ) | (50,246,590 | ) | (309,001 | ) | ||||||
| Repayment of bank loans | (156,105,000 | ) | (94,568,000 | ) | (581,563 | ) | ||||||
| Proceeds from bond payable | - | 192,832,900 | 1,185,861 | |||||||||
| Repayment of bond payable | (20,000,000 | ) | (20,000,000 | ) | (122,994 | ) | ||||||
| Payment of deferred IPO costs | (86,232,087 | ) | - | - | ||||||||
| Net cash (used in) provided by financing activities | (306,089,402 | ) | 28,018,310 | 172,304 | ||||||||
| Net (decrease) increase in cash | (40,456,120 | ) | 67,731,728 | 416,528 | ||||||||
| Cash at the beginning of period | 2,538,554,638 | 2,524,082,266 | 15,522,307 | |||||||||
| Cash at the end of the period | 2,498,098,518 | 2,591,813,994 | 15,938,835 | |||||||||
| Supplementary cash flow information | ||||||||||||
| Cash paid for income taxes, net of refunds | 75,570,835 | 38,402,329 | 236,162 | |||||||||
| Cash paid for interest expenses | 8,637,073 | 3,800,582 | 23,372 | |||||||||
| Non-cash financing and investing activities | ||||||||||||
| Operating lease right-of-use assets obtained in exchange for operating lease liabilities | 270,231,476 | 90,595,070 | 557,131 | |||||||||
| Finance lease right-of-use assets obtained in exchange for finance lease liabilities | 68,425,346 | 79,603,279 | 489,535 | |||||||||
8
Non-GAAP Financial Measures and Reconciliation
Adjusted INCOME FROM OPERATIONS
| For the Six Months Ended June 30, | ||||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| JPY | JPY | US$ | ||||||||||
| INCOME FROM OPERATIONS | 67,929,244 | 92,309,685 | 567,676 | |||||||||
| Plus: acquisition-related costs(a) | - | 47,365,619 | 291,284 | |||||||||
| Adjusted INCOME FROM OPERATIONS | 67,929,244 | 139,675,304 | 858,960 | |||||||||
| (a) | Represents acquisition-related costs incurred in connection with the Company’s acquisition activities, including transaction-related costs, legal, financial and tax due diligence expenses, integration costs and other acquisition-related costs. These costs have been added back for normalization purposes as they are not considered reflective of the Company’s core operating performance. |
9