SBC 10-K/A
SBC Medical Group Holdings Inc (SBC)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
Amendment No. 1
(Mark One)
For
the fiscal year ended
OR
For the transition period from __________ to __________
Commission
File Number
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s
telephone number, including area code:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Securities registered pursuant to Section 12(g) of the Act: None
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate
by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report.
If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
The
aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of June 30, 2025, the last
business day of the Registrant’s most recently completed second fiscal quarter, was approximately $
The number of shares of the registrant’s Common Stock outstanding as of April 29, 2026 was (after deducting 270,000 shares held by a wholly-owned subsidiary).
DOCUMENTS INCORPORATED BY REFERENCE
Explanatory Notes
Pursuant to the rules of the SEC, Part IV, Item 15 has also been amended to revise Exhibits 10.9 and 10.10 and to add currently dated certifications from the Company’s principal executive officer and principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. The new certifications of the Company’s principal executive officer and principal financial officer are attached to this Form 10-K/A as Exhibits 31.3 and 31.4. Because no financial statements have been included in this Form 10-K/A and this Form 10-K/A does not contain or amend any disclosure with respect to Items 307 and 308 of Regulation S-K, paragraphs 3, 4 and 5 of the certifications have been omitted. Additionally, we are not including the certifications required under Section 906 of the Sarbanes-Oxley Act of 2002 as no financial statements are being filed with this Form 10-K/A
Except as described above and other conforming revisions, no other changes have been made to the 2025 10-K, and this Form 10-K/A does not modify, amend or update the financial or other information contained in the 2025 10-K. This Form 10-K/A does not reflect events occurring after the date of the filing of the 2025 10-K, nor does it amend, modify or otherwise update any other information in the 2025 10-K. Accordingly, this Form 10-K/A should be read in conjunction with the 2025 10-K and with the Company’s filings with the SEC subsequent to the filing of the 2025 10-K.
We were originally incorporated in Delaware on March 11, 2022 under the name “Pono Capital Two, Inc.,” referred to herein as “Pono,” as a special purpose acquisition company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.
On August 9, 2022, Pono consummated its IPO of 11,500,000 units (the “Units” and, with respect to the Class A common stock included in the Units being offered, the “Public Shares” and with respect to the warrants included in the Units, the “Public Warrants”) (the “Pono IPO”).
Simultaneously with the consummation of the closing of the Pono IPO, Pono consummated the private placement of an aggregate of 634,375 units (the “Placement Units”) at a price of $10.00 per Placement Unit in a private placement to the Sponsor (the “Private Placement”).
On January 31, 2023, Pono entered into an Agreement and Plan of Merger (as subsequently amended from time to time, the “Merger Agreement”) with Pono Two Merger Sub, Inc., a Delaware corporation (“Merger Sub”) and then a wholly-owned subsidiary of Pono, SBC Medical Group, Inc., then named SBC Medical Group Holdings Incorporated, a Delaware corporation (“Legacy SBC”), Mehana Capital LLC, a Delaware limited liability company (“Sponsor”) in its capacity as the representative of the stockholders of Pono, and Dr. Yoshiyuki Aikawa in his personal capacity and his capacity as the representative of the stockholders of Legacy SBC.
On September 17, 2024, the closing (the “Closing”) of the merger (the “Merger”) and other transactions contemplated thereby (collectively, the “Business Combination”) took place and the Merger was consummated with Merger Sub merging with and into Legacy SBC with Legacy SBC surviving the Merger as a wholly-owned subsidiary of Pono, and Pono then changed its name to SBC Medical Group Holdings Incorporated and on September 17, 2024, Legacy SBC changed its name to SBC Medical Group, Inc.
Effective September 17, 2024, Pono’s units ceased trading, and effective September 18, 2024, SBC’s common stock began trading on the Nasdaq Global Market under the symbol “SBC” and the public warrants began trading on the Nasdaq Capital Market under the symbol “SBCWW.”
As a result of the Closing of the Merger and the Business Combination, the business of Legacy SBC became the business of the Company.
Capitalized terms used herein and not otherwise defined are defined as set forth in the Original Filing.
This Amendment No. 1 includes references to our website and the information contained on, or accessible from, our website is not a part of this report by reference or otherwise.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Form 10-K/A contains forward-looking statements regarding, among other things, the plans, strategies and prospects, both business and financial, of the Company. These statements are based on the beliefs and assumptions of the management of the Company. Although the Company believes that its plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, the Company cannot assure you that it will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Generally, statements that are not historical facts, including statements concerning possible or assumed future actions, business strategies, events or results of operations, are forward-looking statements. These statements may be preceded by, followed by or include the words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” or similar expressions, but the absence of these words does not mean that a statement is not forward-looking. These forward-looking statements are based on information available as of the date of this Form 10-K/A, and current expectations, forecasts and assumptions, and involve a number of risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
For additional information on forward-looking statements and risks and uncertainties that could cause actual results to differ from those implied by the forward-looking statements, see the 2025 10-K, including “Part I, Item 1A. Risk Factors” therein, and the Company’s other filings that have been made or will be made with the SEC.
Table of Contents
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PART III
Item 10. Directors, Executive Officers and Corporate Governance.
Our Fifth Amended and Restated Charter provides that the business and affairs of the Corporation shall be managed by and under the direction of the Board.
Our directors are elected at each annual meeting of stockholders to serve for a one-year term or until his or her death, resignation, removal or the earlier termination of his or her term of office. Our board of directors currently consists of five (5) individuals. The directors serve until their respective successors are duly elected and qualified, or until their earlier death, resignation, retirement, disqualification or removal. The Company’s board of directors currently consists of Ken Edahiro, Mike Sayama, Fumitoshi Fujiwara, Yuya Yoshida, and Yoshiyuki Aikawa, each to hold office until the 2026 annual meeting of stockholders.
Set forth below are the names of our directors, their ages, their offices in the Company, if any, their principal occupations or employment for at least the past five years, the length of their tenure as directors and the names of other public companies in which such persons hold or have held directorships during the past five years as of April 30, 2026. Additionally, information about the specific experience, qualifications, attributes or skills that led to our board of directors’ conclusion that each person listed below should serve as a director is set forth below.
| Name | Age | Position(s) with the Company | ||
| Yoshiyuki Aikawa | 55 | Director, Chairman and Chief Executive Officer | ||
| Yuya Yoshida | 47 | Director, Chief Financial Officer and Chief Operating Officer | ||
| Ken Edahiro | 44 | Independent Director | ||
| Mike Sayama | 72 | Independent Director | ||
| Fumitoshi Fujiwara | 60 | Independent Director |
Our board of directors has reviewed the materiality of any relationship that each of our directors has with the Company, either directly or indirectly. Based upon this review, our Board has determined that the following members of our board of directors are “independent directors” as defined by The Nasdaq Stock Market: Ken Edahiro, Mike Sayama, and Fumitoshi Fujiwara; therefore, the majority of our Board consists of independent directors.
Yoshiyuki Aikawa. Dr. Aikawa has served as our Chief Executive Officer and Chairman of our Board of Directors since September 17, 2024, and in the same positions with SBC Medical Group, Inc. since January 20, 2023. Additionally, since September 2017, Dr. Aikawa has been the Chief Executive Officer of SBC Medical Group Co., Ltd. (formerly known as Aikawa Medical Group Co., Ltd.), a Japanese company that provides management services to clinics. Dr. Aikawa, stepped down from his position as Chief Executive Officer and Representative of SBC Medical Group Co., Ltd. on September 1, 2024, and remains as a director of SBC Medical Group Co., Ltd. In March 2000, Dr. Aikawa opened Shonan Beauty Clinic in Fujisawa, Japan, as a private clinic. Subsequently, he expanded his operations to include multiple cosmetic surgery clinics, transforming the clinic into a corporation. From January 2016 to December 2019, Dr. Aikawa served as the chairman of the MC. From 2014 to 2015, Dr. Aikawa was the president and a director of the Japanese Society of Aesthetic Plastic Surgery. Additionally, from 2008, he was associated with Harvard Medical School, PGA. Dr. Aikawa is also a member of the Japanese Society of Aesthetic Plastic Surgery, Japan Laser Therapy Association, Japan Liposuction Society, Chemical Peeling Society, Japanese Society of Anesthesiologists, and PostGraduate Assembly of Anesthesiology at Harvard Medical School. Dr. Aikawa holds a medical license from Nihon University Medical School, where he graduated in 1997. Dr. Aikawa does not hold, and has not previously held, any directorships in any reporting companies. We believe that Dr. Aikawa’s extensive professional experience with MCs, including as a founder and a chairman, as well as his experience as the chief executive officer of a company providing management services to clinics, and his experience as a doctor and in the aesthetic plastic surgery field qualifies him to serve as a director on the Company’s board of directors.
Yuya Yoshida. Mr. Yoshida has served as our Chief Operating Officer and member of our Board of Directors since September 17, 2024, and in the same positions with SBC Medical Group, Inc. since September 29, 2023, and was appointed as our Chief Financial Officer effective April 1, 2025. Mr. Yoshida has also served as the Executive Vice President and the Chief Financial Officer of SBC Medical Group Co., Ltd. (Japan) since July 1, 2023. From January 2016 to June 2023, Mr. Yoshida worked in Corporate Development (Global Head and Director of Corporate Development in 2018) at Rakuten Group Co., Ltd. From 2003 to 2016, Mr. Yoshida worked in securities, principal M&A, and investment banking at Mitsubishi UFJ Financial Group. Mr. Yoshida has extensive knowledge in E -Commerce, logistics, settlement, finance, mergers and acquisitions and divestiture transactions. Mr. Yoshida graduated with a Master of Law degree from Keio University in 2003. Mr. Yoshida also graduated with a Master of Business Administration degree from UCLA Anderson Business School in 2014. Mr. Yoshida does not hold, and has not previously held, any directorships in any reporting companies. We believe that Mr. Yoshida’s professional experience working in corporate development as well as his extensive knowledge of E-Commerce, logistics, settlement, finance, mergers and acquisitions and divestiture transactions qualifies him to serve as a director on the Company’s board of directors.
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Ken Edahiro. Mr. Edahiro has served as a director of the Company since September 17, 2024. Mr. Edahiro has served as the Chief Strategy and Marketing Officer of BizReach, a Cloud service provider since November 2023, and has, additionally, served as General Manager of BizReach Business Division since February 2025. From January 2014 through May 2019, he served as the General Manager of King, a leading interactive entertainment company. From August 2012 through December 2013, Mr. Edahiro served as the head of global strategy and marketing of gloops, a provider of computer games. From April 2004 through July 2012, he served as a Chief Account Executive at Dentsu, a provider of advertising services. In 2004, Mr. Edahiro received a degree from Hitotsubashi University. We believe that Mr. Edahiro’s experience as a chief strategy officer and extensive knowledge of marketing qualifies him to serve as a director on the Company’s board of directors.
Mike Sayama, Ph.D. Dr. Mike Sayama serves as an independent director of the Company since March 11, 2022 (including for time prior to the Business Combination). Dr. Sayama was formerly the Executive Director of Community First since it was established in July 2016 until January 2021. As the founding executive director, he was responsible for operations, developing a strategic plan for an accountable health community in East Hawaii, community relations, and fund raising. From January 2021 to June 2021 he served as the Director of Strategy to facilitate the transition to a new management team. From October 2013 to December 2018, Dr. Sayama served as a Vice President at Pono Health and was Director of Learning Health Homes, a project where he was responsible for managing the East Hawaii Independent Physicians Association and implementing a data platform integrating health plan, hospital, and physician data. Dr. Sayama also facilitated the reorganization of EHI and development of its strategic direction. Community First, a 501(c)3 non-profit, which serves as a neutral forum for healthcare stakeholders in East Hawaii, grew out of the Learning Health Homes Initiative. From August 1997 to October 2013, Dr. Sayama served as a Vice President of the Hawaii Medical Service Association, first in Health Benefits Management and then in Customer Relations. In the first position, he streamlined preauthorization and appeal processes, including the elimination of preauthorization for inpatient admissions without increase in inpatient utilization. In his second position he established call centers in Hilo which stabilized the call center work force and improved the timeliness and accuracy of customer service. From April 2001 to April 2005, Dr. Sayama was a Director on the City Bank Board, and from April 2005 to April 2009, was a Director on the Boards of Central Pacific Bank and Central Pacific Financial Corporation. Regarding education: In May 1975, he received his Bachelor of Arts degree in Psychology from Yale University, and in August 1979, his Master of Arts degree in Clinical Psychology from University of Michigan. In August 1982, Dr. Sayama received his Ph.D. degree in Clinical Psychology from University of Michigan. He is the author of several books on psychotherapy and Zen Buddhism. His community service includes having been a Director on the Bay Clinic Board (the Federally Qualified Health Center in East Hawaii) and currently serving as the Abbot of Chozen-ji, International Zen Dojo. Mr. Sayama brings broad knowledge of the healthcare technology industry, as well as prior experience serving as a founding executive director, which makes him a valuable member of our board of directors.
Fumitoshi Fujiwara. Mr. Fujiwara has served as a director of the Company since September 17, 2024. Mr. Fujiwara has served as an executive officer to Medirom Healthcare Technologies Inc. (NASDAQ: MRM) since March 2017. In addition, since 2023, he has served as managing partner and chief executive officer of Linden Capital Partners LLC. Furthermore, since November 2009, Mr. Fujiwara has served as a director, managing partner and chief executive officer to Eaglestone Capital Management Inc. From 2001 to 2009, he served as a director, managing partner and chief executive officer of AC Capital Inc. From 2000 to 2001, Mr. Fujiwara served as a director, managing partner and chief investment officer to Spiral & Star Co., Ltd. From 1993 to 2000, he served as the chief executive officer and chief financial officer to KOEI Tecmo Holdings Co., Ltd. From 1989 to 1993, Mr. Fujiwara served as a manager to Shuwa Corporation. He graduated from Meiji Gakuin University, Faculty of Law in 1989. Mr. Fujiwara does not hold, and has not held, any directorships in any reporting companies. We believe that Mr. Fujiwara’s experience as a chief financial officer of a Nasdaq listed company and extensive knowledge of financial and accounting issues qualifies him to serve as a director on the Company’s board of directors.
Executive Officers
In addition to Dr. Aikawa and Mr. Yoshida, whose biographical information is set forth above, Ms. Miki (Shimizu) Yamazaki serves as an executive officer of the Company.
Miki (Shimizu) Yamazaki, age 40, has served as our Chief Strategy Officer since April 10, 2025. Previously, she spent 16 years at Goldman Sachs Japan (2008-2024) within their Investment Banking Division. From 2016 onward, she served as Vice President of the Advisory Group, specializing in M&A and capital transactions, including cross-border acquisitions, IPOs, and anti-activist advisory services. Additionally, she serves as President and Representative Director of Ai-Med Inc. since February 2026. She graduated from Keio University with a Bachelor’s degree in 2008.
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Board Leadership Structure and Role in Risk Oversight
The Board believes that its leadership structure currently serves the best interests of our shareholders, partners, customers, and other stakeholders because of Dr. Aikawa’s deep expertise in the Company’s business.
One of the Board’s key functions is informed oversight of our risk management process. In particular, our Board is responsible for monitoring and assessing strategic risk exposure, including a determination of the nature and level of risk appropriate for the Company. The Board does not have a standing risk management committee but rather administers this oversight function directly through the Board as a whole, as well as through various Board standing committees that address risks inherent in their respective areas of oversight. Our Board and its committees consider specific risk topics, including risks associated with our strategic plan, business operations, capital structure, information technology, data privacy and cyber security. It is the responsibility of the committee chairs to report findings regarding material risk exposures to the Board as quickly as possible.
Our Audit Committee has the responsibility to consider and discuss with management and the auditors, as appropriate, our guidelines and policies with respect to financial risk management and financial risk assessment, including the Company’s major financial risk exposures and the steps taken by management to monitor and control these exposures. In addition, the Audit Committee reviews and discusses with management and the auditors, as appropriate, the Company’s guidelines and policies with respect to financial risk management and financial risk assessment, including the Company’s major litigation and risk exposures and the steps taken by management to monitor and control these exposures. Our Compensation Committee assesses and monitors whether any of our compensation policies and programs has the potential to encourage excessive risk-taking, including risks related to our practices and policies of employee compensation as they relate to risk management and risk-taking incentives, to determine whether such compensation policies and practices are reasonably likely to have a material adverse effect on us, including whether our incentive compensation plans encourage excessive or inappropriate risk taking. Our Nominating and Corporate Governance Committee monitors the effectiveness of our corporate governance guidelines, including proxy advisory firm policies and recommendations. The Nominating and Corporate Governance Committee also oversees and reviews with management our major legal compliance risk exposures and the steps management has taken to monitor or mitigate such exposures, including our procedures and any related policies with respect to risk assessment and risk management.
In connection with our reviews of the operations and corporate functions of our company, our Board addresses the primary risks associated with those operations and corporate functions. In addition, our Board reviews the risks associated with our company’s business strategies periodically throughout the year as part of its consideration of undertaking any such business strategies. While the Board and its committees oversee risk management strategy, management is responsible for implementing and supervising day-to-day risk management processes and reporting to the Board and its committees on such matters.
Stockholder Communications to our Board of Directors
Stockholders who have questions or concerns regarding our business should contact our Investor Relations team at [email protected]. Communications will be distributed to our board of directors, or to any individual director or directors as appropriate, depending on the facts and circumstances outlined in the communications. Items that are unrelated to the duties and responsibilities of our board of directors may be excluded, such as:
| ● | junk mail and mass mailings; |
| ● | resumes and other forms of job inquiries; |
| ● | surveys; and |
| ● | solicitations or advertisements. |
In addition, any material that is unduly hostile, threatening, or illegal in nature may be excluded, in which case it will be made available to any outside director upon request.
Meeting Attendance.
During the fiscal year ended December 31, 2025, there were five (5) meetings of our board of directors. No director attended fewer than 75% of the total number of meetings of our board of directors and of committees of our board of directors on which he served during fiscal 2025. Members of our board of directors are encouraged to attend the annual meetings of our stockholders. All of our directors attended our last annual stockholders meeting, which was held on June 13, 2025.
Committees of the Board of Directors
The Company’s board of directors has the authority to appoint committees to perform certain management and administration functions. The Company’s board of directors has established an audit committee, a compensation committee, and a nominating and corporate governance committee. The composition and responsibilities of each committee are described below. Members will serve on these committees until their resignation or until otherwise determined by the board of directors. The charters for each of these committees are available on the Company’s website at https https://ir.sbc-holdings.com/.
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Audit Committee
The audit committee of the board of directors of the Company consists of Messrs. Ken Edahiro, Mike Sayama, and Fumitoshi Fujiwara. The Company’s board of directors has determined each member of this committee is independent under the Nasdaq listing standards and Rule 10A-3(b)(1) under the Exchange Act. Our audit committee met five (5) times during fiscal 2025. The chairperson of the audit committee is Mr. Fujiwara. Mr. Fujiwara also qualifies as an “audit committee financial expert” as such term is defined in Item 407(d)(5) of Regulation S-K and possesses financial sophistication, as defined under the rules of Nasdaq.
The primary purpose of the audit committee is to discharge the responsibilities of the board of directors with respect to our accounting, financial, and other reporting and internal control practices and to oversee our independent registered accounting firm. Specific responsibilities of our audit committee include:
| ● | selecting a qualified firm to serve as the independent registered public accounting firm to audit the Company’s financial statements; | |
| ● | helping to ensure the independence and performance of the independent registered public accounting firm; | |
| ● | discussing the scope and results of the audit with the independent registered public accounting firm, and reviewing, with management and the independent accountants, our interim and year-end operating results; | |
| ● | developing procedures for employees to submit concerns anonymously about questionable accounting or audit matters; | |
| ● | reviewing policies on risk assessment and risk management; | |
| ● | related party transactions; | |
| ● | obtaining and reviewing a report by the independent registered public accounting firm at least annually, that describes the Company’s internal quality-control procedures, any material issues with such procedures, and any steps taken to deal with such issues when required by applicable law; and | |
| ● | approving (or, as permitted, pre-approving) all audit and all permissible non-audit service to be performed by the independent registered public accounting firm. |
Compensation Committee
The compensation committee consists of Messrs. Ken Edahiro, Mike Sayama, and Fumitoshi Fujiwara. The Company’s board of directors has determined each member of this committee is a “non-employee director” as defined in Rule 16b-3 promulgated under the Exchange Act. The chairperson of the compensation committee is Fumitoshi Fujiwara. The primary purpose of the compensation committee is to discharge the responsibilities of the board of directors to oversee its compensation policies, plans and programs and to review and determine the compensation to be paid to its executive officers, directors and other senior management, as appropriate. Our compensation committee met five (5) times during fiscal 2025.
Specific responsibilities of the compensation committee include:
| ● | reviewing and approving on an annual basis the corporate goals and objectives relevant to the Company’s Chief Executive Officer’s compensation, evaluating the Company’s Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of the Company’s Chief Executive Officer based on such evaluation. These decisions will be made without the Chief Executive Officer present; | |
| ● | reviewing and approving the compensation of the Company’s other executive officers; | |
| ● | reviewing and recommending to the Company’s board of directors the compensation of the Company’s directors; | |
| ● | reviewing the Company’s executive compensation policies and plans; | |
| ● | reviewing and approving, or recommending that the Company’s board of directors approve, incentive compensation and equity plans, severance agreements, change-of-control protections and any other compensatory arrangements for the Company’s executive officers and other senior management, as appropriate; | |
| ● | administering the Company’s incentive compensation equity-based incentive plans; |
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| ● | selecting independent compensation consultants and assessing whether there are any conflicts of interest with any of the committee’s compensation advisors; | |
| ● | assisting management in complying with the Company’s proxy statement and annual report disclosure requirements; | |
| ● | if required, producing a report on executive compensation to be included in the Company’s annual proxy statement; | |
| ● | reviewing and establishing general policies relating to compensation and benefits of the Company’s employees; and | |
| ● | reviewing the Company’s overall compensation philosophy. |
Nominating and Corporate Governance Committee
The nominating and corporate governance committee of the Company’s board of directors consists of Messrs. Ken Edahiro, Mike Sayama, and Fumitoshi Fujiwara. The Company’s board of directors has determined that each member of this committee is independent under Nasdaq listing standards. The chairperson of the nominating and corporate governance committee is Mr. Fumitoshi Fujiwara.
Specific responsibilities of the nominating and corporate governance committee include:
| ● | identifying, evaluating and selecting, or recommending that the Company’s board of directors approve, nominees for election to the Company’s board of directors; |
| ● | evaluating the performance of the Company’s board of directors and of individual directors; |
| ● | reviewing developments in corporate governance practices; |
| ● | evaluating the adequacy of the Company’s corporate governance practices and reporting; |
| ● | reviewing management succession plans; and |
| ● | developing and making recommendations to the Company’s board of directors regarding corporate governance guidelines and matters. |
Our nominating committee will consider candidates recommended by stockholders as well as from other sources such as other directors or officers, third party search firms or other appropriate sources. Once identified, the nominating committee will evaluate a candidate’s qualifications. Threshold criteria include: personal integrity and sound judgment, business and professional skills and experience, independence, knowledge of our industry, possible conflicts of interest, the extent to which the candidate would fill a present need on our board of directors, and concern for the long-term interests of our stockholders. Our nominating committee has not adopted a formal diversity policy in connection with the consideration of director nominations or the selection of nominees. However, the nominating committee will consider issues of diversity among its members in identifying and considering nominees for director, and strive where appropriate to achieve a diverse balance of backgrounds, perspectives, experience, age, gender, ethnicity and country of citizenship on our board of directors and its committees.
If a stockholder wishes to propose a candidate for consideration as a nominee for election to our board of directors, it must follow the procedures described in our Bylaws. Any such recommendations should be made in writing to the nominating committee, care of our Corporate Secretary at our principal office and should be accompanied by the following information concerning each recommending stockholder and the beneficial owner, if any, on whose behalf the nomination is made:
| ● | all information relating to such person that would be required to be disclosed in a proxy statement; | |
| ● | certain biographical and share ownership information about the stockholder and any other proponent, including a description of any derivative transactions in the Company’s securities; | |
| ● | a description of certain arrangements and understandings between the proposing stockholder and any beneficial owner and any other person in connection with such stockholder nomination; and | |
| ● | a statement whether or not either such stockholder or beneficial owner intends to deliver a proxy statement and form of proxy to holders of voting shares sufficient to carry the proposal. |
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The recommendation must also be accompanied by the following information concerning the proposed nominee:
| ● | certain biographical information concerning the proposed nominee; | |
| ● | all information concerning the proposed nominee required to be disclosed in solicitations of proxies for election of directors; | |
| ● | certain information about any other security holder of the Company who supports the proposed nominee; | |
| ● | a description of all relationships between the proposed nominee and the recommending stockholder or any beneficial owner, including any agreements or understandings regarding the nomination; and | |
| ● | additional disclosures relating to stockholder nominees for directors, including completed questionnaires and disclosures required by our Bylaws. |
Code of Ethics and Business Conduct
The Company’s Code of Ethics and Business Conduct applies to all of its employees, officers and directors, including those officers responsible for financial reporting. The Code of Ethics and Business Conduct is available on the Company’s website at https https://ir.sbc-holdings.com/. The Company intends to disclose any amendments to the Code of Ethics and Business Conduct, or any waivers of its requirements, on its website to the extent required by the applicable rules and exchange requirements.
Policy on Insider Trading
We
have
Implications of Being a Controlled Company
The Company is a “controlled company” within the meaning of the applicable rules of Nasdaq and, as a result, we qualify for exemptions from certain corporate governance requirements. If the Company relies on these exemptions, its stockholders will not have the same protections afforded to stockholders of companies that are subject to such requirements. Dr. Yoshiyuki Aikawa controls approximately 81.7% of the voting power of our outstanding common stock, and, therefore controls a majority of the voting power of the Company’s outstanding common stock, and the Company is a “controlled company” within the meaning of applicable rules of Nasdaq. Under these rules, a company of which more than 50% of the voting power for the election of directors is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including the requirements:
| ● | that a majority of the board consists of independent directors; |
| ● | that the controlled company has a nominating and corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and |
| ● | that the controlled company has a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibility. |
While the Company does not intend to rely on these exemptions, the Company may use these exemptions now or in the future. As a result, the Company’s stockholders may not have the same protections afforded to stockholders of companies that are subject to all of the Nasdaq corporate governance requirements.
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Item 11. Executive Compensation.
Summary Compensation Table
The following table presents information regarding the compensation paid by to Yoshiyuki Aikawa, our Chief Executive Officer, Yuya Yoshida, our Chief Financial Officer and Chief Operating Officer, and Miki (Shimizu) Yamazaki, our Chief Strategy Officer, for services rendered to the Company and its subsidiaries during the fiscal years ended December 31, 2025 and 2024, as applicable. We refer to these individuals as our “named executive officers.” We do not have any other executive officers. Payment was made by the Company or its subsidiaries, as applicable.
| Name and Position | Year | Salary ($) (1) | Bonus ($) (4) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Non-qualified referred Compensation Earnings ($) | All Other Compensation ($) | Total ($) | ||||||||||||||||||||||||||
| Yoshiyuki Aikawa | 2025 | 12,000,000 | — | — | — | — | — | — | 12,000,000 | ||||||||||||||||||||||||||
| Chief Executive Officer (principal executive officer | 2024 | 14,506,032 | — | — | — | — | — | — | 14,506,032 | ||||||||||||||||||||||||||
| Yuya Yoshida(2) | 2025 | 316,734 | 99,338 | — | — | — | — | — | 416,072 | ||||||||||||||||||||||||||
| Chief Financial Officer and Chief Operating Officer | 2024 | 304,404 | — | — | — | — | — | — | 304,404 | ||||||||||||||||||||||||||
| Miki (Shimizu) Yamazaki (3) | 2025 | 275,783 | 83,391 | 359,174 | |||||||||||||||||||||||||||||||
| Chief Strategy Officer | |||||||||||||||||||||||||||||||||||
| (1) | Amounts reported in this column reflect the base salary earned by our named executive officers during 2025 and 2024. Compensation paid to our named executive officers may be denominated in either U.S. dollars or Japanese Yen depending on the applicable Employment Agreement and period; amounts originally denominated in Japanese Yen have been translated into U.S. dollars at the exchange rate in effect on the applicable payment date. |
| (2) | Mr. Yoshida has served as our Chief Operating Officer and member of the Board of Directors since September 29, 2023, and as our Chief Financial Officer since April 1, 2025. |
| (3) | Ms. Yamazaki assumed the role of Chief Strategy Officer, effective as of April 10, 2025. Accordingly, we do not show any compensation for her for 2024. |
| (4) | The amounts reported in this column represent discretionary annual incentive bonus amounts paid to Mr. Yoshida and Ms. Yamazaki in respect of 2025. Such bonus amounts were denominated in Japanese Yen and translated into U.S. dollars on the same basis as described in footnote (1). |
Executive Compensation Philosophy and Objectives
Our executive compensation program is designed to:
| ● | attract, motivate, incentivize, and retain employees at the executive level who contribute to our long-term success; and |
| ● | provide compensation packages to our executives that are fair, easy to understand, and competitive; provide high retention value; and reward high performance and the achievement of our business objectives. |
The design of our executive compensation program is influenced by a variety of factors, with the primary goals being to align the interests of our named executive officers and stockholders and to link pay to performance. Although compensation of named executive officers currently consists of only cash compensation, in the future, we expect to utilize long-term incentive compensation opportunities in the form of equity awards.
Compensation-Setting Process
Role of Compensation Committee and Board of Directors
The compensation committee discharges the responsibilities of our board of directors relating to the compensation of our named executive officers as set forth in its charter and reports to our board of directors on its discussions, decisions, recommendations, and other actions. Generally, the compensation committee makes all final decisions regarding the compensation of the CEO and other named executive officers.
The compensation committee has overall responsibility for overseeing our compensation and benefits policies generally, and overseeing and evaluating the compensation plans, policies, and practices applicable to the CEO and other named executive officers. In carrying out its responsibilities, the compensation committee evaluates our compensation policies and practices with a focus on the degree to which these policies and practices reflect our executive compensation philosophy, develops strategies and makes decisions that it believes further our philosophy or align with developments in best compensation practices, and considers the performance of our named executive officers, including through formal performance reviews of each of the CEO and other named executive officers, when formulating recommendations or making decisions with respect to their compensation.
Setting Target Total Direct Compensation
The compensation committee reviews the annual base salary levels and considers long-term incentive compensation opportunities of our named executive officers.
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The compensation committee does not establish a specific target for formulating its recommendations about the target total direct compensation opportunities of our named executive officers. Instead, the members of the compensation committee rely primarily on their general experience, business judgment and subjective considerations of various factors, our executive compensation program objectives, past and expected future company and individual performance, the executive officer’s role and responsibilities within the organization and expected contributions to the company, internal equity among the members of the executive team, compensation practices of our compensation peer group and/or selected broad-based compensation surveys, and the recommendations of the CEO (other than with respect to his own compensation).
These factors provide the framework for compensation decision-making and final decisions regarding the compensation opportunity for each named executive officer. No single factor is determinative in setting compensation levels, nor is the impact of any individual factor on the determination of pay levels quantifiable.
The compensation committee does not weight these factors in any predetermined manner, nor does it apply any formulas in developing its compensation recommendations or decisions.
The compensation committee does not engage in formal benchmarking against other companies’ compensation programs or practices to establish our compensation levels or make specific compensation decisions with respect to our named executive officers. Instead, in making its determinations, the compensation committee reviews information summarizing the compensation paid at a representative group of peer companies and more broad-based compensation surveys to gain a general understanding of market compensation levels.
Executive Employment Agreements
The Company has entered into employment agreements (the “Employment Agreements”) with Dr. Yoshiyuki Aikawa (Chief Executive Officer) Yuya Yoshida (Chief Financial Officer and Chief Operating Officer) and Ms. Miki (Shimizu) Yamazaki (Chief Strategy Officer).
The Employment Agreements all provide for at-will employment that may be terminated by the Company due to the executive’s death, due to total disability (as defined in Section 22(e)(3) of the Internal Revenue Code of 1986, as amended (the “Code”)), and with or without Cause (as defined below), by the executive with or without Good Reason (as defined below), or by either party by providing notice of their desire to not renew. The Employment Agreements provide for annual base salaries for the 2025 fiscal year of $12,000,000 for Dr. Aikawa, JPY 44,000,000 (increased to JPY 47,000,000 effective July 1, 2025) for Mr. Yoshida and JPY 38,000,000 (increased to JPY 43,700,000 effective June 1, 2025) for Ms. Yamazaki. Each of the Employment Agreements also provides for possible annual performance bonuses and equity grants under the equity incentive plan if so determined by the Company’s Compensation Committee. Mr. Yoshida, and Ms. Yamazaki each received a discretionary bonus in respect of 2025, as disclosed in the Summary Compensation Table. No equity grants were made to any of the named executive officers with respect to 2025.
Provisions Applicable to All Employment Agreements
Each of the Employment Agreements has an initial term of one year, and provides that the term will automatically be extended for additional terms of one year each unless either the Company or the applicable executive provides notice to the other party of their desire to not so renew the initial term or renewal term (as applicable) at least 30 days prior to the expiration of then-current term. Each of the Employment Agreements provide that the applicable executive’s employment with the Company is “at will,” meaning that either the applicable executive or the Company may terminate the applicable executive’s employment at any time and for any reason, subject to the other provisions of the Employment Agreement.
Each of the Employment Agreements may be terminated by the Company, either with or without “Cause”, or by the applicable executive, either with or without “Good Reason”.
For purposes of each agreement, “Cause” means:
| ● | a violation of any material written rule or policy of the Company for which violation any employee may be terminated pursuant to the written policies of the Company reasonably applicable to an executive employee; | |
| ● | misconduct by the applicable executive to the material detriment of the Company; | |
| ● | the applicable executive’s conviction (by a court of competent jurisdiction, not subject to further appeal) of, or pleading guilty to, a felony; | |
| ● | the applicable executive’s gross negligence in the performance of the applicable executive’s duties and responsibilities to the Company as described in the Employment Agreement; or | |
| ● | the applicable executive’s material failure to perform the applicable executive’s duties and responsibilities to the Company as described in the Employment Agreement (other than any such failure resulting from the applicable executive’s incapacity due to physical or mental illness or any such failure subsequent to the applicable executive being delivered a notice of termination without Cause by the Company or delivering a notice of termination for Good Reason to the Company), in either case after written notice from the Board to the applicable executive of the specific nature of such material failure and the applicable executive’s failure to cure such material failure within 10 days following receipt of such notice. |
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For purposes of each Employment Agreement, “Good Reason” means:
| ● | at any time following a Change of Control (as defined below), a material diminution by the Company of compensation and benefits (taken as a whole) provided to the applicable executive immediately prior to a Change of Control; | |
| ● | a reduction in the applicable executive’s base salary or target or maximum bonus, other than as part of an across-the-board reduction in salaries of management personnel; | |
| ● | the relocation of the applicable executive’s principal executive office to a location more than 50 miles further from the applicable executive’s principal executive office immediately prior to such relocation; or | |
| ● | a material breach by the Company of any of the terms and conditions of the Employment Agreement which the Company fails to correct within 10 days after the Company receives written notice from the applicable executive of such violation. |
For purposes of each Employment Agreement a “Change of Control” of the Company will be deemed to have occurred if, after the effective date of the Employment Agreement, (i) the beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of securities representing more than 50% of the combined voting power of the Company is acquired by any “person” as defined in sections 13(d) and 14(d) of the Exchange Act (other than the Company, any subsidiary of the Company, or any trustee or other fiduciary holding securities under an employee benefit plan of the Company), (ii) the Company is merged or consolidated with or into another corporation where the shareholders of the Company, immediately prior to the consolidation or merger, would not, immediately after the consolidation or merger, beneficially own (as such term is defined in Rule 13d-3 under the Exchange Act), directly or indirectly, shares representing in the aggregate 50% or more of the combined voting power of the securities of the corporation issuing cash or securities in the consolidation or merger (or of its ultimate parent corporation, if any) in substantially the same proportion as their ownership of the Company immediately prior to such merger or consolidation, or (iii) there is a sale or other disposition of all or substantially all of the Company’s assets to an entity, other than a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity, at least 50% of the combined voting power of the voting securities of which are owned directly or indirectly by shareholders of the Company, immediately prior to the sale or disposition, in substantially the same proportion as their ownership of the Company immediately prior to such sale or disposition.
If the Company terminates the applicable executive’s employment without Cause, or if the applicable executive terminates employment for Good Reason, then, subject to any other agreements between the company with respect to equity grants made to such executive:
| ● | the Company will pay to the applicable executive any base salary, bonus, and benefits then owed or accrued, and any unreimbursed expenses incurred by the applicable executive in each case through the termination date; | |
| ● | the Company will pay to the applicable executive, in one lump sum, an amount equal to the base salary that would have been paid to the applicable executive for the remainder of the term of the Employment Agreement; | |
| ● | any equity granted to the applicable executive under the Employment Agreement, any award agreement or any other agreements with the Company will, to the extent not already vested, be deemed automatically vested; and | |
| ● | all of the parties’ rights and obligations under the agreement will cease, other than those rights or obligations which arose prior to the termination date or in connection with such termination, and subject to the survival provisions of the agreements. |
In the event of the applicable executive’s death or termination by the Company due to total disability (as defined in Section 22(e)(3) of the Code), the applicable executive is entitled to any unpaid base salary, any accrued but unpaid bonus and benefits (then owed or accrued and owed in the future), a pro-rata bonus for the year of termination based on the applicable executive’s target bonus for such year and the portion of such year in which the applicable executive was employed, and reimbursement of expenses pursuant to the terms of the Employment Agreement through the effective date of termination. Any equity granted to the applicable executive will, to the extent not already vested, be immediately and automatically forfeited as of the termination date.
If it is determined that any payment or benefit provided to the applicable executive under the Employment Agreement or otherwise, whether or not in connection with a Change of Control (a “Payment”), would constitute an “excess parachute payment” within the meaning of Section 280G of the Code, such that the Payment would be subject to an excise tax under Section 4999 of the Code (the “Excise Tax”), the Company will pay to the applicable executive an additional amount (the “Gross-Up Payment”) such that the net amount of the Gross-Up Payment retained by the applicable executive after the payment of any Excise Tax and any federal, state and local income and employment tax on the Gross-Up Payment, shall be equal to the Excise Tax due on the Payment and any interest and penalties in respect of such Excise Tax.
Each Employment Agreement contains customary confidentiality provisions, and customary provisions related to Company ownership of intellectual property conceived or made by the applicable executive in connection with the performance of their duties to the Company.
Incentive Compensation Clawback Policy
We have adopted a clawback policy for incentive compensation in accordance with the requirements of Nasdaq, which is filed as Exhibit 97.1 to our Annual Report on Form 10-K for the year ended December 31, 2024.
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Compensation Committee Interlocks and Insider Participation
No member of the Company’s compensation committee has ever been an officer or employee of the Company. None of Company’s executive officers serve, or have served during the last year, as a member of the board of directors, compensation committee, or other board committee performing equivalent functions of any other entity that has one or more executive officers serving as one of our directors or on the Company’s compensation committee.
Risks Related To Compensation Practices and Policies
We believe that, through a combination of risk-mitigating features and incentives guided by relevant market practices and company-wide goals, our compensation policies, programs and practices do not create risks that are reasonably likely to have a material adverse effect on the Company.
Policies and Practices Related to the Grants of Certain Equity Awards
Director Compensation
The following table shows the total compensation paid or accrued during the fiscal year ended December 31, 2025 to each of our non-employee directors. Directors who are employed by us are not compensated for their service on our board of directors. Compensation paid to Dr. Aikawa and Mr. Yoshida, our directors who are also executive officers, is reported in the Summary Compensation Table above.
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) | Total ($) | |||||||||
| Fumitoshi Fujiwara | 80,128 | — | 80,128 | |||||||||
| Ken Edahiro | 40,064 | — | 40,064 | |||||||||
| Mike Sayama | 40,064 | — | 40,064 | |||||||||
Each non-employee director is paid an annual cash retainer of JPY 6,000,000. Our non-employee director who serves as the chair of three committees (Mr. Fujiwara) receives an additional JPY 6,000,000 in cash. Cash payments to non-employee directors are paid monthly on a prorated basis. Cash compensation to our non-employee directors is denominated in Japanese Yen under the Company’s director compensation program; the U.S. dollar amounts reported in the table above represent the sum of each monthly payment translated into U.S. dollars at the exchange rate in effect on the applicable payment date.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The following table sets forth certain information with respect to the beneficial ownership of our common stock, known to us, as of April 29, 2026 for (a) our named executive officers, (b) each of our directors, (c) all of our current directors and executive officers as a group and (d) each stockholder that beneficially owns more than 5% of our common stock. Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if they possess sole or shared voting or investment power over that security, including options and warrants that are currently exercisable or exercisable within 60 days. The amounts and percentages of shares beneficially owned are reported on the basis of SEC regulations governing the determination of beneficial ownership of securities. Under SEC rules, a person is deemed to be a “beneficial owner” of a security if that person has or shares voting power or investment power, which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which that person has a right to acquire beneficial ownership within 60 days. Securities that can be so acquired are deemed to be outstanding for purposes of computing such person’s ownership percentage, but not for purposes of computing any other person’s percentage. Under these rules, more than one person may be deemed to be a beneficial owner of the same securities and a person may be deemed to be a beneficial owner of securities as to which such person has no economic interest. Except as indicated in footnotes to this table, we believe that the stockholders named in this table have sole voting and investment power with respect to all shares of common stock shown to be beneficially owned by them based on information provided to us by these stockholders. Percentage of ownership is based on 102,576,943 shares of common stock outstanding on April 29, 2026 (after deducting 270,000 shares held by a wholly-owned subsidiary).
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Unless otherwise noted, the business address of each of the beneficial owners listed below is c/o the Company at 200 Spectrum Center Dr., Suite 300, Irvine, CA 92618.
| Number of | ||||||||
| Shares | ||||||||
| Beneficially | ||||||||
| Name and Address of Beneficial Owners | Owned | % of Class | ||||||
| Directors and Executive Officers | ||||||||
| Yoshiyuki Aikawa(1) | 83,839,460 | 81.7 | % | |||||
| Yuya Yoshida | - | - | ||||||
| Ken Edahiro | - | - | ||||||
| Mike Sayama | 15,000 | * | % | |||||
| Fumitoshi Fujiwara | - | - | ||||||
| Miki (Shimizu) Yamazaki | - | - | ||||||
| All executive officers and directors as a group (6 persons) | 83,854,460 | 81.7 | % | |||||
| Beneficial Owner of More than 5% | ||||||||
| Aikawa Equity Management Co., Ltd.(2) | 5,284,500 | 5.2 | % | |||||
| * | Less than 1.0% | |
| (1) | Based on the Schedule 13D/A filed by Dr. Aikawa on April 21, 2026 and further updated by a Form 4, filed on April 29, 2026. Dr. Aikawa may be deemed to be the beneficial owner of 83,839,460 shares of common stock, consisting of 78,839,460 shares of common stock held directly by Dr. Aikawa and 5,000,000 shares of common stock held by Aikawa Investment Co., Ltd., a company wholly owned by Dr. Aikawa. | |
| (2) | Based on a Schedule 13G filed by Aikawa Equity Management Co., Ltd. on March 13, 2026. The business address of Aikawa Equity Management Co., Ltd. is 908 Kamikurata-Cho, Totsuka-ku, Yokohama, Kanagawa, 244-0816. |
Equity Compensation Plans
The following table sets forth securities authorized for issuance under the SBC Medical Group Holdings Incorporated 2024 Equity Incentive Plan as of December 31, 2025, which is our only equity incentive plan with shares available for issuance as of such date.
| Plan category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (Column A) | Weighted average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in Column A) | |||||||||
| Equity compensation plans approved by stockholders | - | - | 15,000,000 | |||||||||
| Equity compensation plans not approved by stockholders | - | - | - | |||||||||
Item 13. Certain Relationships and Related Transactions, and Director Independence.
Policies and Procedures for Related Person Transactions
Under Item 404 of SEC Regulation S-K, a related person transaction is any actual or proposed transaction, arrangement or relationship or series of similar transactions, arrangements or relationships, including those involving indebtedness not in the ordinary course of business, to which we or our subsidiary were or are a party, or in which we or our subsidiary were or are a participant, in which the amount involved exceeded or exceeds the lesser of $120,000 or 1% of the average of our total assets at year-end for the last two completed fiscal years and in which any of our directors, nominees for director, executive officers, beneficial owners of more than 5% of any class of our voting securities (a “significant shareholder”), or any member of the immediate family of any of the foregoing persons, had or will have a direct or indirect material interest.
We recognize that transactions between us and any of our directors or executives or with a third party in which one of our officers, directors or significant shareholders has an interest can present potential or actual conflicts of interest and create the appearance that our decisions are based on considerations other than the best interests of our Company and stockholders.
The Audit Committee of the Board of Directors is charged with responsibility for reviewing, approving and overseeing any transaction between the Company and any related person (as defined in Item 404 of Regulation S-K), including the propriety and ethical implications of any such transactions, as reported or disclosed to the Audit Committee, and to determine whether the terms of the transaction are not less favorable to us than could be obtained from an unaffiliated party.
The agreements described in this section, or forms of such agreements are filed as exhibits to the 2025 Form 10-K, and the following descriptions are qualified by reference thereto.
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Related Party Transactions Prior to the Business Combination
Convertible Promissory Note
On May 18, 2023, Pono entered into a Convertible Promissory Note with the Company, pursuant to which the Company agreed to loan Pono an aggregate principal of $1,000,000 (the “Convertible Promissory Note”). The Convertible Promissory Note was non-interest bearing and was due and payable upon the earlier to occur of (i) the first business day following the consummation of the Company’s initial Business Combination and (ii) May 17, 2024, unless accelerated upon the occurrence of an event of default.
On February 27, 2024, Pono and the Company entered into an Amendment to the Note (the “Amended Note Purchase Agreement”), which increased the purchase price of the note from $1,000,000 to $2,700,000 and amended the maturity date to the earlier to occur of (i) the first business day following the consummation of the Company’s initial Business Combination and (ii) August 29, 2024, unless accelerated upon the occurrence of an event of default. In consideration for entering into the Amended Note, each of the parties to the Merger Agreement agreed to release each other party from any claims arising out of any termination of the Merger Agreement or failure to consummate the transactions contemplated thereby. The Convertible Promissory Note automatically converted into Class A Common Stock at one share for each $10 in outstanding principal amount at the Closing.
Non-redemption Agreement
On May 5, 2023, the Company held a special meeting of stockholders (the “Special Meeting”), and the chairman adjourned the Special Meeting to May 8, 2023. On May 8, 2023, the Company held the Special Meeting. During the Special Meeting, stockholders approved an amendment to the Company’s amended and restated certificate of incorporation (i) to extend the date by which the Company has to consummate a business combination from May 9, 2023 to February 9, 2024 for no additional amount to be paid by the Sponsor into the Trust Account, and (ii) to provide for the right of a holder of Class B common stock to convert such shares into shares of Class A common stock on a one -for-one basis prior to the closing of a business combination at the election of the holder. As approved by the stockholders of the Company, the Company filed an amendment to its Amended and Restated Certificate of Incorporation with the Delaware Secretary of State on May 8, 2023. The Company’s stockholders elected to redeem an aggregate of 9,577,250 shares of Class A common stock of the Company in connection with the Special Meeting. Following such redemptions, the amount of funds remaining in the trust account was approximately $20 million.
In connection with the Special Meeting, the Company and the Sponsor entered into non-redemption agreements with certain unaffiliated stockholders owning, in the aggregate, 998,682 shares of the Company’s Class A common stock, pursuant to which such stockholders agreed, among other things, not to redeem or exercise any right to redeem such public shares in connection with the Extension Amendment. On February 5, 2024, the Company’s stockholders approved a proposal to extend the date by which the Company had to consummate a business combination from February 9, 2024 to November 9, 2024.
The Company estimated the aggregate fair value of the 339,565 Sponsor Shares attributable to the Non-Redeeming Stockholders to be $709,691 or $ 2.09 per share. Each Non-Redeeming Stockholder acquired from the Sponsor an indirect economic interest in the Sponsor Shares. The excess of the fair value of the Sponsor Shares was determined to be an offering cost in accordance with Staff Accounting Bulletin Topic 5A. Accordingly, in substance, it was recognized by the Company as a capital contribution by the Sponsor to induce these holders of the Class A shares not to redeem, with a corresponding charge to additional paid -in capital to recognize the fair value of the shares transferred as an offering cost.
In February 2025, the Company issued 860,435 shares of common stock, with no proceeds, to Mehana Capital LLC as incentive shares pursuant to the Non-Redemption Agreements.
Related Party Transactions of Legacy SBC and After the Business Combination
Material Contracts between SBC Medical Sub and MCs
Our wholly owned subsidiary, SBC Medical Group Co., Ltd., a Japanese corporation (“SBC Medical Sub”, or “SBC Japan”), is designated as a “medical service corporation” in Japan. In Japan, a medical service corporation is a legal entity that provides management services to “medical corporations”. The management services are conducted through franchisor-franchisee contracts and/or service contracts with the medical corporations and/or general incorporated associations that own and operate domestic franchisee treatment centers in Japan. Separately, we also enter into franchise arrangements with certain independently operated clinics in Japan, which differ in certain respects from our arrangements with the medical corporations. In addition, following the July 2025 acquisition of MB career lounge, Co., Ltd. (“MB career lounge”), a company providing comprehensive management supporting services for medical institutions in Japan, including medical professional recruiting and operational consulting, the Company, through MB career lounge, provides management and operational support services to Medical Corporation Misakikai and General Incorporated Association Miotokai, and the related revenues are included in the Company’s consolidated revenues.
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The Company’s subsidiaries have entered into franchisor-franchisee contracts and service contracts (including business consignment agreements of the same nature) with seven medical corporations, consisting of Medical Corporation Shobikai, Medical Corporation Kowakai, Medical Corporation Nasukai, Medical Corporation Aikeikai, Medical Corporation Jukeikai, and Medical Corporation Ritz Cosmetic Surgery, as amended and restated effective as of April 2025, and Medical Corporation Association Furinkai, effective as of June 2025.
In addition, the Company has entered into service contracts since September 2023 with Medical Corporation Association Furinkai and Medical Corporation Association Junikai; and in July 2025 with Medical Corporation Misakikai and General Incorporated Association Miotokai, following the acquisition of MB career lounge Co., Ltd. (collectively with the seven franchisee medical corporations, the “Medical Corporations and/or General Incorporated Associations” or “MCs”).
All of the MCs are deemed to be related parties of the Company since relatives of the CEO of the Company are the members (or shain) of general meetings of members of the MCs. The CEO of the Company was previously a member of the six franchisee MCs until he ceased being a member in July 2023. The Company, through SBC Medical Sub, owns equity interests (or mochibun) of the six franchisee MCs. Although the Company, through SBC Medical Sub, has an equity interest to the rights to receive a distribution of residual assets in proportion to the amount of contribution in certain circumstances as provided in the Japanese Medical Care Act and the articles of incorporation of each of the six MCs, the Company or SBC Medical Sub does not have voting control over the corporate actions at general meetings of members (or shain) of the MCs per the requirements of the Japanese Medical Care Act and the MCs’ articles of incorporation. The Company does not hold equity interests (mochibun) in Medical Corporation Misakikai or General Incorporated Association Miotokai; the Company’s arrangements with these entities are based on service contracts. “Members (or shain) of a general meeting of members (or shain)” means constituent members of the general meeting of members (or shain) of a Japanese Medical Corporation. Each member (or shain) has one voting right. “General meeting of members (or shain)” means one of the organs of a Japanese Medical Corporation and the highest decision-making body of the Medical Corporation, the main duties of which include the election and dismissal of directors (or riji) and auditors (or kanji) of the Medical Corporation, and the approval of financial statements and statutory business reports of the Medical Corporation.
“Equity interest (or mochibun)” means the right to receive distribution of the residual assets of a Japanese Medical Corporation in proportion to the amount of contribution (Article 10.3.3.2 brackets of the Supplementary Provision of the Japanese Medical Care Act.). However, the procedures for an equity interest (or mochibun) holder to exercise and realize the right to receive distribution of the residual assets of the Medical Corporation is more complicated than that of a stock corporation due to the restrictions under the Medical Care Act.
Our primary mission is to provide quality comprehensive management services to the MCs and expand our “Shonan Beauty Clinic” brand. We plan to achieve the mission by maintaining and strengthening our market position and brand in the cosmetic medical treatment management market in Japan, Vietnam, Singapore, while pursuing growth opportunities in the United States through strategic investments and alliances, and by continuing to grow our presence globally. Accordingly, we have entered into franchise agreements and service contracts (including consulting and management service agreements) (collectively, the “Support Agreements”) with the MCs to define the scope of the management services that we provide to the MCs as well as the franchise operational provisions that the MCs must comply with. Separately, we have entered into partner doctor independence support program agreements with certain independent practitioners. The Support Agreements generally have one-year terms and are subject to renewal unless either party provides notice of non-renewal in accordance with the applicable agreement. We receive a portion of our overall compensation for providing management services with the following MCs:
| ● | Medical Corporation Shobikai: from September 29, 2017 |
| ● | Medical Corporation Kowakai: from September 29, 2017 |
| ● | Medical Corporation Nasukai: from September 29, 2017 |
| ● | Medical Corporation Aikeikai: from September 29, 2017 |
| ● | Medical Corporation Jukeikai: from February 21, 2020 |
| ● | Medical Corporation Ritz Cosmetic Surgery: from May 31, 2021 |
| 13 |
Effective as of April 1, 2025, the Company revised the fee structure to pursue a long-term growth strategy aimed at expanding and stabilizing the business foundation by creating an environment that can better facilitate the establishment of new clinics by MCs. This updated fee structure introduces a more tailored, performance-based approach to determining service fees for each clinic, based on several key criteria:
| 1. | Medical service category (facility type): The type of medical services provided by the clinic (for example, cosmetic medicine, dermatology, hair restoration (AGA) treatment, fertility treatment, insured medical care, or other specialized fields). |
| 2. | Operational tenure: The length of time since the clinic’s opening (with newly established clinics in their first year of operation recognized in a dedicated category). |
| 3. | Monthly revenue: The clinic’s revenue for the given month. |
| 4. | Patient volume: The number of patients the clinic has served over the past year. |
These factors collectively determine each clinic’s tier classification (e.g., as a small, medium, or large clinic), as defined in the updated service agreement’s appendix. Under this system, each clinic is assigned to an appropriate tier based on its profile, and a corresponding fixed monthly fee is applied according to the schedule set forth in the contract. Notably, clinics offering cosmetic medical services are categorized using a more granular tier system reflecting their scale, with tiers ranging from newly opened clinics in their first year up to “super-large” clinics. In contrast, clinics focusing on other types of medical services (such as dermatology, AGA hair restoration, fertility treatments, or dental and orthopedic care) are classified into the standard small, medium, or large clinic tiers. This tiered approach ensures that service fees are aligned with each clinic’s size and performance, supporting newer and smaller clinics as they grow while accommodating the higher capacities of larger established clinics. Following the acquisition of MB career lounge in July 2025, we entered into new service contracts for the first time with Medical Corporation Misakikai and General Incorporated Association Miotokai.
Material Contracts between the Company and MCs
The Company has entered into Support Agreements (franchise agreements and service contracts) and an SBC Operating Agreement with each of the MCs. Separately, the Company has entered into Partner Doctor Independence Support Program Agreements (“PDISPA”) with certain independent practitioners.
The term of the PDISPA is for a period of 5 years from September 1, 2021, to August 31, 2026. The PDISPA will be renewed under the same terms for successive one-year periods upon conclusion of the initial term unless either party requests in writing to terminate the PDISPA 6 months prior to the expiration date of the PDISPA. Pursuant to the PDISPA, the Company permits such independently operated clinics to use (i) the “Shonan Beauty Clinic” name and (ii) certain trade names associated with our clinic network, including those of Medical Corporation Shobikai, Medical Corporation Kowakai, Medical Corporation Nasukai, Medical Corporation Aikeikai, L’Ange Cosmetique Co., Ltd. and Shobikai Co., Ltd. (collectively, “SBC Medical”). The Company also grants such independently operated clinics the right to use the “SBC Medical Group” name, our know-how of clinic operation, trademarks, trade names, and to provide the treatments designated by the Company and conduct business activities as a partner of the SBC Medical Group under a unified brand image.
PDISPA does not charge a franchise fee or a deposit fee, instead the independently operated clinics are to pay fees to the Company, which are to be calculated as follows: total amount of sales at the clinic multiplied by 12% excluding consumption tax. If the total sales amount exceeds 100,000,000 yen per clinic, the maximum fee amount will be 10,000,000 yen. For the purposes of the PDISPA the total amount of sales means the amount of sales after discounting preferential tickets, and other campaigns and discounts.
SBC’s Operating Agreement
The Company previously entered into an SBC Operating Agreement (the “SBCOA”) with each of the MCs. The original term of the SBCOA was from April 1, 2023, to March 31, 2025, and the term was extended until March 31, 2026 (and thereafter, automatically extended for a year term pursuant to the revised fee structure). Pursuant to the SBCOA the Company agreed to provide the MCs with the following consulting services related to: (i) marketing related services for developing new clients (ii) aiming to ensure stable performance and increase customer satisfaction through the creation of repeat customers (iii) the establishment and operation of a system seeking to ensure medical safety (iv) securing attorneys and medical institutions to transport in the event of claims or medical accidents, (v) measures to improve employee satisfaction, and design of organizational chart and personnel evaluation system (vi) the selection of medical equipment and materials, (vii) the acquisition of properties for new medical facilities (trade area survey, area selection, lease agreement signing, etc.) (viii) various types of general skills training for healthcare facility employees (ix) specialized and advanced skills training in leadership, motivation, communication, etc., for chiefs, leaders, and other employees with subordinates (x) development of new type of medical facilities (xi) development of new treatment methods (xii) hiring employees with national certifications, professional skills, and interpersonal skills, such as doctors, nurses, and reception counselors (xiii) performance management, business analysis, and management decision making utilizing financial statements such as income statements, cash flow statements, and balance sheets (xiv) use of the likeness of the Company’s officers or employees on websites, commercials, and other advertising media and (xv) efficient operation methods that allow for more customer service during the same clinic hours.
Under the SBCOA in effect prior to April 2025, in exchange for the foregoing services, each MC is required to pay the Company 3,000,000 yen per month (excluding consumption tax) for each medical facility at which such MC provides medical services to its clients.
In light of the current challenging competitive environment, we are pursuing a long-term growth strategy aimed at expanding and stabilizing our business foundation by creating an environment that can better facilitate the establishment of new clinics by MCs. In line with this objective, effective April 1, 2025, we amended and renewed the SBCOA with each MC. Under the revised SBCOA, if neither party expresses an intention not to renew the agreement before the expiration of the effective period, the agreement will be renewed for successive one-year periods under the same terms and conditions.
| 14 |
The main revisions include:
| 1. | Revised Fee Structure |
| ● | First-Year Fee Reduction for Newly Opened Clinics: Fees will be reduced during the first year of operation for newly established clinics, significantly reducing initial cost burdens at a stage when clinics have yet to fully establish their customer base. |
| ● | Fees Based on Service Utilization from the Second Year Onward: Starting from the second year of operation, fees will be calculated based on the scale of services utilized and the operational size of each clinic. |
| 2. | Changes to Provided Consulting Services Following the revision, consulting services provided by the Company to MCs will include: |
| ● | Management consulting for medical corporations and facilities |
| ● | Human resources and labor management services |
| ● | Recruitment-related services |
| ● | General administrative services |
| ● | Information system management services |
| ● | Customer relations services |
| ● | Accounting, finance, and taxation services |
| ● | Legal services |
| ● | Clinic establishment and facilities management services |
| ● | Infrastructure introduction, improvement, and operational support services related to insurance-covered medical treatments |
Service Contracts
We entered into service contracts with Medical Corporation Association Furinkai (the service contract regarding operation on November 22, 2023 and the service contract regarding management consulting on November 25, 2023 respectively) and Medical Corporation Association Junikai (the service contract regarding operation and the service contract regarding management consulting both on November 16, 2023). On June 30, 2025, we entered into renewed business consignment agreements with Medical Corporation Association Furinkai and Medical Corporation Association Junikai, each effective as of June 1, 2025, which superseded the prior service contracts.
The scope of work (“SOW”) under the renewed agreements includes management consulting and operational support services (including, among others, marketing support, procurement support for medical equipment and materials, operational process support, human resources and recruitment-related support (for Junikai), and information system management services).
Business Consignment Agreement for Management Consulting and Operational Support Services to Medical Corporation Association Furinkai
The material terms of our renewed business consignment agreement with Medical Corporation Association Furinkai are as follows:
| ● | Signing Date: |
| ○ | June 30, 2025 |
| ● | management consulting and operational support services relating to the operation of medical facilities of Medical Corporation Association Furinkai, including: |
| ○ | marketing support for developing new clients; |
| ○ | selection and procurement support for medical equipment and medical materials; |
| ○ | measures to ensure stable performance and increase customer satisfaction through the creation of repeat customers; |
| 15 |
| ○ | planning and consulting for management and operational strategies; |
| ○ | renewal of existing treatment methods and development of new treatment methods and manuals, and support for implementation; |
| ○ | establishment and operation support for systems intended to help ensure medical safety; |
| ○ | support for the integration and improvement of accounting and management processes through the introduction of new accounting systems and related tools; and |
| ○ | information system management services, including advisory services relating to information security, IT networks, data centers and communication tools, account management, and business process automation support. |
| ● | Effective Period |
| ○ | June 1, 2025 until May 31, 2026 |
| ○ | If neither party expresses an intention not to renew the agreement before the expiration of the effective period, the agreement will be renewed for successive one (1) year periods under the same terms and conditions. |
| ● | Fees Payable Under the Agreement |
| ○ | On June 30, 2025, we entered into two separate business consignment agreements with Medical Corporation Association Furinkai, both effective as of June 1, 2025. Under both agreements, the monthly service fee for the applicable month is payable for each medical facility and is determined based on the facility’s tier classification set forth in the applicable appendix, considering the length of time since the facility’s opening, the facility’s monthly revenue, and patient volume over the past year. The specific fee ranges are as follows: |
| ● | For medical facilities that use the terms “Shonan Beauty” or “SBC” as part of their facility name (such as SBC Beauty Dermatology Clinics): The monthly service fee ranges from JPY 300,000 to JPY 6,230,000 per facility (excluding consumption tax). |
| ● | For other medical facilities (excluding any medical facility that uses the terms “Shonan Beauty” or “SBC” as part of its facility name): The monthly service fee ranges from JPY 1,700,000 to JPY 5,800,000 per facility (excluding consumption tax). |
Business Consignment Agreement for Management Consulting Services to Medical Corporation Association Junikai
The material terms of our renewed business consignment agreement for management consulting services to Medical Corporation Association Junikai are as follows:
| ● | Signing Date |
| ○ | June 30, 2025 |
| ● | management consulting and operational support services relating to the operation of medical facilities of Medical Corporation Association Junikai, including: |
| ○ | advisory services to strengthen branding and develop new clients; |
| ○ | selection and procurement support for medical equipment and medical materials; |
| ○ | renewal of existing treatment methods and development of new treatment methods and manuals, and support for implementation; |
| ○ | establishment and operation support for systems intended to help ensure medical safety; |
| ○ | planning and consulting for management and operational strategies; |
| ○ | support for the integration and improvement of accounting and management processes through the introduction of new accounting systems and related tools; |
| ○ | human resources and labor management support (including consultations on employment rules and internal policies and initiatives to improve employee engagement); |
| 16 |
| ○ | recruitment-related advisory and support (including strategic recruiting and support for retention and onboarding); and |
| ○ | information system management services, including advisory services relating to information security, IT networks, data centers and communication tools, account management, and business process automation support. |
| ● | Effective Period |
| ○ | June 1, 2025 until May 31, 2026 |
| ○ | if neither party expresses an intention not to renew the agreement before the expiration of the effective period, the agreement shall be renewed for another one (1) year under the same terms and conditions. |
| ● | Fees Payable Under the Agreement |
| ○ | The monthly service fee for the applicable month is payable for each medical facility where Medical Corporation Association Junikai provides medical services, and is determined based on the facility’s tier classification set forth in the appendix, considering the length of time since the facility’s opening, the facility’s monthly revenue, and patient volume over the past year. |
| ○ | The monthly service fee ranges from JPY 450,000 to JPY 1,440,000 per facility (excluding consumption tax). Consumption tax is charged separately. |
Summary of Related Parties and Transactions
The related parties that had material transactions for the years ended December 31, 2025 and 2024 consist of the following:
| Name of Related Parties | Nature of Relationship as of December 31, 2025 | |
| Yoshiyuki Aikawa | Controlling shareholder, director and CEO of the Company | |
| Medical Corporation Shobikai | The relatives of CEO of the Company being the Members of the MC | |
| Medical Corporation Kowakai | The relatives of CEO of the Company being the Members of the MC | |
| Medical Corporation Nasukai | The relatives of CEO of the Company being the Members of the MC | |
| Medical Corporation Aikeikai | The relatives of CEO of the Company being the Members of the MC | |
| Medical Corporation Jukeikai | The relatives of CEO of the Company being the Members of the MC | |
| Medical Corporation Ritz Cosmetic Surgery | The relatives of CEO of the Company being the Members of the MC | |
| Medical Corporation Association Furinkai | The relatives of CEO of the Company being the Members of the MC | |
| Medical Corporation Association Junikai | The relatives of CEO of the Company being the Members of the MC | |
| Medical Corporation Misakikai | The relatives of CEO of the Company being the Members of the MC | |
| General Incorporated Association Miotokai | The relatives of CEO of the Company being the Members of the MC | |
| Hariver Inc. | Controlled by the CEO of the Company | |
| Skynet Academy Co., Ltd. * | Subsidiary of Hariver, Inc., a company controlled by the CEO of the Company | |
| Japan Medical & Beauty Inc. | Controlled by the CEO of the Company | |
| AI Med Inc. | The CEO of the Company is a principal shareholder of AI Med Inc. | |
| Co-medical Co., Ltd. | The CEO of the Company is a principal shareholder of Co-medical Co., Ltd. | |
| SBC Inc. | Controlled by the CEO of the Company | |
| SBC Shonan Osteopathic Clinic Inc. | The CEO of the Company is a principal shareholder of SBC Shonan Osteopathic Clinic Inc. | |
| General Incorporated Association SBC | The CEO of the Company being the Member of General Incorporated Association SBC | |
| Public Interest Foundation SBC Medical Promotion Foundation | The relative of CEO of the Company being a Member of Public Interest Foundation SBC Medical Promotion Foundation | |
| SBC Tokyo Medical University | The CEO of the Company is the chairman of SBC Tokyo Medical University | |
| SBC Irvine MC | Significantly influenced by the Company | |
| MEDIROM Healthcare Technologies Inc. (“MEDIROM”) | Fumitoshi Fujiwara, an independent director and Chairman of the Audit Committee of the Company, serves as a Director and Chief Financial Officer of MEDIROM, a company listed on Nasdaq. | |
| SBC Kijimadaira Resort Inc. * | Previously a subsidiary of SBC Inc., a company controlled by the CEO of the Company; Merged with and into SBC Inc. on July 1, 2025, and corporate existence ceased. | |
| General Incorporated Association Taiseikai | The relatives of CEO of the Company being the Members of General Incorporated Association Taiseikai | |
| Waqoo, Inc. | Prior to December 19, 2025, the CEO of the Company was a principal shareholder of Waqoo, Inc. Since then, it has been a majority-owned subsidiary. |
* Former subsidiaries of the Company that were disposed of to entities controlled by the CEO of the Company on December 23, 2024.
| 17 |
During the years ended December 31, 2025 and 2024, the transactions with related parties are as follows:
| For the Years Ended December 31, | ||||||||
| Revenues, net | 2025 | 2024 | ||||||
| Medical Corporation Shobikai | $ | 40,953,913 | $ | 53,862,520 | ||||
| Medical Corporation Kowakai | 37,101,866 | 46,756,189 | ||||||
| Medical Corporation Nasukai | 39,559,694 | 46,355,437 | ||||||
| Medical Corporation Aikeikai | 13,519,257 | 17,997,072 | ||||||
| Medical Corporation Jukeikai | 4,140,162 | 5,666,907 | ||||||
| Medical Corporation Ritz Cosmetic Surgery | 4,353,503 | 7,435,446 | ||||||
| Japan Medical & Beauty Inc. | 40,514 | 39,620 | ||||||
| Hariver Inc. | 20,050 | 19,810 | ||||||
| SBC Inc. | 760 | 2,512 | ||||||
| Public Interest Foundation SBC Medical Promotion Foundation | 67 | 107 | ||||||
| General Incorporated Association SBC | — | 801 | ||||||
| SBC Tokyo Medical University | 93,068 | 45,286 | ||||||
| SBC Shonan Osteopathic Clinic Inc. | 3,884 | 56,740 | ||||||
| Yoshiyuki Aikawa | 39,781 | 98,445 | ||||||
| AI Med Inc. | 377 | 787 | ||||||
| SBC Irvine MC | 239,538 | 1,204,107 | ||||||
| Medical Corporation Association Furinkai | 11,092,065 | 11,708,183 | ||||||
| Medical Corporation Association Junikai | 7,272,431 | 3,923,228 | ||||||
| General Incorporated Association Taiseikai | — | 692 | ||||||
| Skynet Academy Co., Ltd. | 26,734 | — | ||||||
| SBC Kijimadaira Resort Inc. | 78 | — | ||||||
| Medical Corporation Misakikai | 373,152 | — | ||||||
| General Incorporated Association Miotokai | 30,076 | — | ||||||
| Total | $ | 158,860,970 | $ | 195,173,889 | ||||
| For the Years Ended December 31, | ||||||||
| Cost of revenues | 2025 | 2024 | ||||||
| Medical Corporation Nasukai | $ | 79,424 | $ | — | ||||
| Medical Corporation Aikeikai | 4,797 | — | ||||||
| Japan Medical & Beauty Inc. | 12,095,280 | 8,472,202 | ||||||
| SBC Tokyo Medical University | 364,552 | — | ||||||
| SBC Kijimadaira Resort Inc. | 78,285 | — | ||||||
| SBC Inc. | 734,398 | — | ||||||
| Waqoo, Inc. | 300,479 | — | ||||||
| Co-medical Co., Ltd. | 350 | — | ||||||
| Total | $ | 13,657,565 | $ | 8,472,202 | ||||
| 18 |
| For the Years Ended December 31, | ||||||||
| Selling, general and administrative expenses | 2025 | 2024 | ||||||
| Medical Corporation Shobikai | $ | 598,483 | $ | — | ||||
| Medical Corporation Kowakai | 8,244 | — | ||||||
| Medical Corporation Nasukai | 21,601 | — | ||||||
| Medical Corporation Aikeikai | 77,544 | — | ||||||
| Medical Corporation Jukeikai | 791 | — | ||||||
| Medical Corporation Association Junikai | 337 | — | ||||||
| Medical Corporation Association Furinkai | 429 | — | ||||||
| SBC Inc. | 7 | — | ||||||
| General Incorporated Association SBC | 19,859 | — | ||||||
| Co-medical Co., Ltd. | 1,166 | — | ||||||
| Medical Corporation Association Misakikai | 22,635 | — | ||||||
| Total | $ | 751,096 | $ | — | ||||
| For the Years Ended December 31, | ||||||||
| Other income | 2025 | 2024 | ||||||
| Medical Corporation Shobikai | $ | — | $ | 999,350 | ||||
| Medical Corporation Kowakai | — | 568,092 | ||||||
| Medical Corporation Nasukai | — | 764,809 | ||||||
| Medical Corporation Aikeikai | — | 316,352 | ||||||
| Medical Corporation Jukeikai | — | 24,474 | ||||||
| Skynet Academy Co., Ltd. | 3,069 | — | ||||||
| Total | $ | 3,069 | $ | 2,673,077 | ||||
As of December 31, 2025 and 2024, the balances with related parties are as follows:
| Accounts receivable | December 31, 2025 | December 31, 2024 | ||||||
| Medical Corporation Shobikai | $ | 6,618,853 | $ | 5,091,430 | ||||
| Medical Corporation Nasukai | 7,268,301 | 8,552,722 | ||||||
| Medical Corporation Kowakai | 6,930,382 | 7,742,251 | ||||||
| Medical Corporation Aikeikai | 2,938,667 | 3,071,378 | ||||||
| Medical Corporation Jukeikai | 920,649 | 993,944 | ||||||
| Medical Corporation Association Furinkai | 1,065,239 | 1,263,602 | ||||||
| Medical Corporation Ritz Cosmetic Surgery | 978,614 | 817,283 | ||||||
| Medical Corporation Association Junikai | 700,794 | 283,298 | ||||||
| SBC Tokyo Medical University | 5,614 | 536 | ||||||
| AI Med Inc. | 33 | 33 | ||||||
| SBC Inc. | 382 | 137 | ||||||
| Public Interest Foundation SBC Medical Promotion Foundation | 30 | 36 | ||||||
| SBC Shonan Osteopathic Clinic Inc. | — | 4 | ||||||
| SBC Irvine MC | — | 693,850 | ||||||
| General Incorporated Association SBC | 5,171 | — | ||||||
| SBC Kijimadaira Resort Inc. | — | 336,176 | ||||||
| Medical Corporation Misakikai | 73,734 | — | ||||||
| General Incorporated Association Miotokai | 5,267 | — | ||||||
| Total | $ | 27,511,730 | $ | 28,846,680 | ||||
| Short-term investments | December 31, 2025 | December 31, 2024 | ||||||
| MEDIROM Healthcare Technologies Inc. | $ | 319,193 | $ | — | ||||
| Total | $ | 319,193 | $ | — | ||||
| 19 |
| Finance lease receivables | December 31, 2025 | December 31, 2024 | ||||||
| Medical Corporation Shobikai | $ | 4,830,319 | $ | 1,877,291 | ||||
| Medical Corporation Kowakai | 5,586,393 | 2,490,705 | ||||||
| Medical Corporation Nasukai | 6,633,510 | 3,872,683 | ||||||
| Medical Corporation Aikeikai | 2,206,227 | 1,047,821 | ||||||
| Medical Corporation Ritz Cosmetic Surgery | 1,885,804 | 2,479,771 | ||||||
| Medical Corporation Jukeikai | 953,857 | 500,244 | ||||||
| Medical Corporation Association Furinkai | 1,432,106 | 1,891,412 | ||||||
| Medical Corporation Association Junikai | 3,033,529 | 197,452 | ||||||
| SBC Shonan Osteopathic Clinic Inc. | 17,123 | 32,788 | ||||||
| Total | 26,578,868 | 14,390,167 | ||||||
| Less: current portion | (12,832,355 | ) | (5,992,585 | ) | ||||
| Non-current portion | $ | 13,746,513 | $ | 8,397,582 | ||||
| Due from related party, net | December 31, 2025 | December 31, 2024 | ||||||
| SBC Irvine MC | $ | 2,762,999 | $ | 2,836,013 | ||||
| Less: allowance for credit loss | (2,762,999 | ) | (2,836,013 | ) | ||||
| Total | $ | — | $ | — | ||||
| Long-term investments in MCs | December 31, 2025 | December 31, 2024 | ||||||
| Medical Corporation Shobikai | $ | 6,384 | $ | 6,378 | ||||
| Medical Corporation Kowakai | 6,384 | 6,378 | ||||||
| Medical Corporation Nasukai | 6,384 | 6,378 | ||||||
| Medical Corporation Aikeikai | 6,384 | 6,378 | ||||||
| Medical Corporation Jukeikai | 6,866,219 | 6,859,913 | ||||||
| Medical Corporation Ritz Cosmetic Surgery | 10,945,538 | 10,935,485 | ||||||
| Total | $ | 17,837,293 | $ | 17,820,910 | ||||
| Accounts payable | December 31, 2025 | December 31, 2024 | ||||||
| Japan Medical & Beauty Inc. | $ | 48,839 | $ | 659,044 | ||||
| Medical Corporation Shobikai | 230,354 | — | ||||||
| Medical Corporation Kowakai | 101,565 | — | ||||||
| Medical Corporation Nasukai | 127,750 | — | ||||||
| Medical Corporation Aikeikai | 57,068 | — | ||||||
| Medical Corporation Jukeikai | 8,718 | — | ||||||
| Medical Corporation Association Furinkai | 11,674 | — | ||||||
| Medical Corporation Ritz Cosmetic Surgery | 10,462 | — | ||||||
| General Incorporated Association SBC | 536 | — | ||||||
| SBC Tokyo Medical University | 31,919 | — | ||||||
| SBC Shonan Osteopathic Clinic Inc. | 958 | — | ||||||
| Medical Corporation Association Misakikai | 21,620 | — | ||||||
| Total | $ | 651,463 | $ | 659,044 | ||||
| 20 |
| Advances from customers | December 31, 2025 | December 31, 2024 | ||||||
| Medical Corporation Shobikai | $ | 1,712,820 | $ | 5,076,300 | ||||
| Medical Corporation Kowakai | 1,145,776 | 1,801,034 | ||||||
| Medical Corporation Nasukai | 1,098,435 | 1,745,069 | ||||||
| Medical Corporation Aikeikai | 430,305 | 379,931 | ||||||
| Medical Corporation Jukeikai | 100,808 | 140,170 | ||||||
| Medical Corporation Ritz Cosmetic Surgery | 64,569 | 45,701 | ||||||
| SBC Shonan Osteopathic Clinic Inc. | — | 16,395 | ||||||
| Medical Corporation Association Furinkai | 370,797 | 940,007 | ||||||
| Medical Corporation Association Junikai | 433,711 | 1,594,926 | ||||||
| Total | $ | 5,357,221 | $ | 11,739,533 | ||||
| Notes payables | December 31, 2025 | December 31, 2024 | ||||||
| Medical Corporation Shobikai | $ | — | $ | 4,653 | ||||
| Medical Corporation Kowakai | — | 14,672 | ||||||
| Medical Corporation Nasukai | — | 8,827 | ||||||
| Medical Corporation Aikeikai | — | 2,236 | ||||||
| Medical Corporation Ritz Cosmetic Surgery | — | 1,201 | ||||||
| Total | — | 31,589 | ||||||
| Less: current portion | — | (26,255 | ) | |||||
| Non-current portion | $ | — | $ | 5,334 | ||||
| Due to related party | December 31, 2025 | December 31, 2024 | ||||||
| Yoshiyuki Aikawa | $ | 2,692,673 | $ | 2,823,590 | ||||
| Total | $ | 2,692,673 | $ | 2,823,590 | ||||
| For the Years Ended December 31, | ||||||||
| Allowance for credit loss movement | 2025 | 2024 | ||||||
| Beginning balance | $ | 2,836,013 | $ | 3,238,209 | ||||
| Provision for credit loss | — | 622,804 | ||||||
| Reversal of credit loss | (73,014 | ) | (1,025,000 | ) | ||||
| Ending balance | $ | 2,762,999 | $ | 2,836,013 | ||||
The balances of due to and due from related parties represent outstanding loans to and from related parties, respectively, as of December 31, 2025 and 2024. These loans are non-secured, interest-free and due on demand.
For the year ended December 31, 2025, the Company paid officer compensation of approximately JPY240 million ($1,604,028) to Yoshiko Aikawa, the CEO of the Company’s subsidiaries and mother of the Company’s CEO, and recorded it in selling, general and administrative expenses.
Waqoo
On January 1, 2024, the Company obtained 353,600 shares of common stock of Waqoo, Inc. (“Waqoo”), representing approximately 9.49% of Waqoo’s equity interest, through a share exchange agreement in connection with the disposal of a subsidiary, Cell Pro Japan Co., Ltd. (“Cell Pro Japan”). Waqoo is listed on the Tokyo Stock Exchange (Stock Code: 4937), and the CEO of the Company is a non-controlling shareholder with more than 10% of Waqoo’s equity interest.
On December 19, 2025, the Company acquired an additional 575,052 shares through a tender offer, at a price of JPY1,900 per share for a total consideration of JPY1.09 billion ($6.98 million), and 989,802 shares pursuant to a share transfer agreement with the Company’s CEO (an off-market transaction outside of the tender offer), at a price of JPY1,445 per share for a total consideration of JPY1.43 billion ($9.13 million). The Company’s ownership of Waqoo thereby increased to approximately 54.3%, and Waqoo and its subsidiary, Cell Pro Japan, became subsidiaries of the Company. The Company recorded a remeasurement gain of $815,328 on its previously held equity interest in Waqoo at the acquisition date fair value.
| 21 |
Disposal of SBC Kijimadaira Resort Inc. and Skynet Academy Co., Ltd.
On December 23, 2024, the Company disposed of its subsidiary, SBC Kijimadaira Resort Inc. (“Kijima”) to SBC Inc., a company controlled by the CEO of the Company, who is also the controlling shareholder of the Company, for a cash consideration of JPY 1. In connection with this transaction, Kijima’s existing loans of JPY826,000,000 ($5,268,227) from SBC Inc. were deemed effectively settled as a result of the disposal.
On December 23, 2024, the Company disposed of its subsidiary, Skynet Academy Co., Ltd. (“Skynet”), to Hariver Inc., a company controlled by the CEO of the Company, who is also the controlling shareholder of the Company, for a cash consideration of JPY70,000,000 ($446,460).
The consideration received in excess of the net book value of net assets disposed, totaling $1,473,571 for Kijima and Skynet, was included as a deemed contribution in connection with disposal of subsidiaries in the Company’s consolidated statements of changes in stockholders’ equity, including the derecognition of goodwill of $1,724,040. The disposal of Kijima and Skynet did not constitute a strategic shift that would have a major effect on the Company’s operations and financial results. As a result, the results of operations for Kijima and Skynet were not reported as discontinued operations.
Aircraft Sales
In June 2025, the Company entered into a memorandum of sale for an aircraft pursuant to the property sales agreement dated August 18, 2023 with General Incorporated Association SBC, an entity controlled by the CEO of the Company, who is also the controlling shareholder of the Company. The original sale price was increased by approximately $10.35 million, which was recorded as a deemed contribution in connection with price modification on disposal of property and equipment in the Company’s consolidated statements of changes in stockholders’ equity.
MEDIROM Notes
In December 2025, the Company purchased unsecured convertible bonds issued by MEDIROM of with a principal amount of JPY50,000,000 ($334,173 when purchased). The bonds bear interest at 2% per annum, mature on June 30, 2026 with an option for extension to December 25, 2026, at the issuer’s discretion, and are convertible into common shares of MEDIROM at a conversion price of JPY343 per common share, subject to customary adjustments upon the occurrence of certain events. The bonds were classified as available-for-sale debt securities and recorded as short-term investments - related parties.
Employment Agreements
Please see the description of the employment agreements between the Company and its executive officers contained in Item 11 of this Form 10-K/A.
Indemnification Agreements
On September 17, 2024, the Company entered into indemnification agreements with each of its directors containing provisions which are in some respects broader than the specific indemnification provisions contained in the Delaware General Corporation Law. The indemnification agreements will require the Company, among other things, to indemnify its directors against certain liabilities that may arise by reason of their status or service as directors and to advance their expenses incurred as a result of any proceeding against them as to which they could be indemnified.
Registration Rights
In connection with the closing of the Business Combination, the Company entered into registration rights agreements, with certain investors, including with Dr. Aikawa, providing for the right to demand registrations, piggy-back registrations and shelf registrations. The registration rights agreements contain reciprocal provisions on indemnification and contribution as between the Company and each applicable investor party. Additionally, the Company will bear the expenses incurred in connection with the filing of any such registration statements. On April 19, 2026, the Company entered into an underwriting agreement (the “Underwriting Agreement”) by and among the Company, Dr. Yoshiyuki Aikawa, the Company’s CEO and Chairman of the board of directors, as selling stockholder (the “Selling Stockholder”) and Maxim Group LLC, as representative of the several underwriters named in Schedule 1 thereto (the “Underwriters”), relating to an underwritten offering of 3,100,000 shares of the Company’s common stock pursuant to the Company’s Registration Statement on Form S-3 (File No. 333-292451). The offering closed on April 21, 2026, and the closing in respect of the Underwriters’ 45-day option to purchase up to an additional 465,000 shares closed on April 28, 2026. The Company did not sell any Shares in the offering and did not receive any proceeds from the offering.
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Director Independence
Our Board of Directors has reviewed the composition of our Board of Directors and its committees and the independence of each director. Based upon information requested from and provided by each director concerning his background, employment and affiliations, including family relationships, our Board of Directors has determined that each of our directors, with the exception of Dr. Aikawa and Mr. Yoshida, is an “independent director” as defined under Rule 5606(a)(2) of the Nasdaq Listing Rules. Our Board of Directors determined that each of Ken Edahiro, Mike Sayama, and Fumitoshi Fujiwara satisfy the applicable independence standards established by the SEC and the Nasdaq Listing Rules. In making such determinations, our Board of Directors considered the relationships that each non-employee director has with our Company and all other facts and circumstances our Board of Directors deemed relevant in determining independence.
Item 14. Principal Accountant Fees and Services.
MaloneBailey, LLP served as the independent registered public accounting firm of Legacy SBC prior to the Business Combination for the fiscal years ending 2021, 2022 and 2023. In connection with the Business Combination, Marcum LLP (“Marcum”), Pono’s independent registered public accounting firm prior to the Business Combination, was informed that it would be dismissed on September 19, 2024 and replaced by MaloneBailey, LLP as the Company’s independent registered public accounting firm.
The audit report of Marcum on the financial statements of Pono, the Company’s legal predecessor, as of December 31, 2023 and 2022, and for the year ended December 31, 2023 and for the period from March 11, 2022 (inception) to December 31, 2022, did not contain an adverse opinion or a disclaimer of opinion, and was not qualified or modified as to uncertainties, audit scope, or accounting principles except for an explanatory paragraph in such report regarding substantial doubt about Pono’s ability to continue as a going concern.
During the period from March 11, 2022 (date of inception) through December 31, 2023, and the subsequent interim periods through June 30, 2024, there were no disagreements with Marcum on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Marcum, would have caused it to make a reference in connection with their opinion to the subject matter of the disagreement or reportable events as defined in Item 304(a)(1)(v) of Regulation S-K (“Regulation S-K”) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), other than a previously disclosed material weakness in Pono’s internal control over financial reporting identified by Pono, which resulted in the restatement of Pono’s financial statements for certain interim periods.
Most recently, in deciding to appoint MaloneBailey, LLP, the audit committee reviewed auditor independence issues and existing commercial relationships with MaloneBailey, LLP and concluded that MaloneBailey, LLP has no commercial relationship with the Company that would impair its independence for the fiscal year ending December 31, 2026.
The following table presents fees for professional audit services rendered by MaloneBailey, LLP for the audit of the Company’s financial statements for the fiscal years ended December 31, 2025 and December 31, 2024.
| 2025 | 2024 | |||||||
| Audit Fees(1) | $ | 1,405,797 | $ | 1,531,727 | ||||
| Audit-Related Fees | - | - | ||||||
| Tax Fees | - | - | ||||||
| All Other Fees | - | - | ||||||
| Total | $ | 1,405,797 | $ | 1,531,727 | ||||
| (1) | Audit fees consisted of fees billed for professional services rendered for the audit of our year-end financial statements and reviews of our quarterly interim financial statements filed with the SEC, as well as work generally only the independent registered public accounting firm can reasonably be expected to provide, such as consents and review of documents filed with the SEC, including certain 8-K filings. |
Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Public Accountant
Consistent with SEC policies regarding auditor independence, the audit committee has responsibility for appointing, setting compensation and overseeing the work of our independent registered public accounting firm. In recognition of this responsibility, the audit committee has established a policy to pre-approve all audit and permissible non-audit services provided by our independent registered public accounting firm.
Prior to engagement of an independent registered public accounting firm for the next year’s audit, management will submit an aggregate of services expected to be rendered during that year for each of four categories of services to the audit committee for approval.
1. Audit services include audit work with respect to the financial statements, as well as work that generally only an independent registered public accounting firm can reasonably be expected to provide, including comfort letters, statutory audits, and attest services and consultation regarding financial accounting and/or reporting standards.
2. Audit-Related services are for assurance and related services that are traditionally performed by an independent registered public accounting firm, including due diligence related to mergers and acquisitions, employee benefit plan audits, and special procedures required to meet certain regulatory requirements.
3. Tax services include all services performed by an independent registered public accounting firm’s tax personnel except those services specifically related to the audit of the financial statements, and include fees in the areas of tax compliance, tax planning, and tax advice.
4. Other Fees are those associated with services not captured in the other categories. We generally do not request such services from our independent registered public accounting firm.
Prior to engagement, the audit committee pre-approves these services by category of service. The fees are budgeted and the audit committee requires our independent registered public accounting firm and management to report actual fees versus the budget periodically throughout the year by category of service. During the year, circumstances may arise when it may become necessary to engage our independent registered public accounting firm for additional services not contemplated in the original pre-approval. In those instances, the audit committee requires specific pre-approval before engaging our independent registered public accounting firm.
The audit committee may delegate pre-approval authority to one or more of its members. The member to whom such authority is delegated must report, for informational purposes only, any pre-approval decisions to the audit committee at its next scheduled meeting. Our audit committee pre-approved all of the services provided by our independent registered public accounting firms for the years ended December 31, 2025 and 2024.
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PART IV
Item 15. Exhibits and Financial Statement Schedules
| a) | Financial Statements and Schedules: The required information is set forth in “Part II, Item 8 - Financial Statements and Supplementary Data” in the 2025 10-K. | |
| b) | Exhibits: The following exhibits are filed or furnished as an exhibit to this Annual Report on Form 10-K. |
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| * | Filed herewith |
| ** | Previously included with the Annual Report on Form 10-K filed with the SEC on March 27, 2026. |
| + | Indicates a management or compensatory plan |
The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.
Item 16. Form 10-K Summary
None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| SBC Medical Group Holdings Incorporated | ||
| Dated: April 30, 2026 | /s/ Yoshiyuki Aikawa | |
| Name: | Yoshiyuki Aikawa | |
| Title: | Chairman and Chief Executive Officer | |
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