Leifras (LFS) posts 10% Q1 revenue growth and raises 2026 outlook
Rhea-AI Filing Summary
LEIFRAS Co., Ltd. reported solid growth for the three months ended March 31, 2026, with revenue rising 10.0% to JPY2,954.3 million (US$18.6 million). Net income inched up 1.5% to JPY124.3 million (US$0.8 million) as higher operating costs offset part of the revenue gain.
Social business revenue grew 24.1% to JPY791.4 million, driven by more school club support contracts and new facility management clients, while sports school revenue increased 5.6%. Gross profit rose 20.5% as cost of revenue grew more slowly than sales, but selling, general and administrative expenses climbed 28.0%, partly from advisory and promotion spending.
The company guides full-year 2026 revenue to US$82.9–95.7 million and income from operations to US$4.5–5.4 million, both implying double-digit growth over 2025. LEIFRAS is also expanding through acquisitions, buying Well Resource for JPY120.0 million, Tokai Sports for JPY101.3 million, and approving another Japan-based deal for JPY454.6 million, while liquidating Leifras Travel in an internal reorganization.
Positive
- Double-digit top-line growth and upbeat guidance: Q1 2026 revenue rose 10.0% year over year to JPY2,954.3 million, and management projects 2026 revenue of $82.9–95.7 million and income from operations of $4.5–5.4 million, both implying double-digit increases over 2025.
- High-growth social business segment: Social business revenue grew 24.1% to JPY791.4 million, supported by more school club support contracts and new facility management clients, diversifying the model beyond core sports schools.
- Active M&A to expand footprint: The company completed two acquisitions (Well Resource for JPY120.0 million and Tokai Sports for JPY101.3 million) and approved another deal for JPY454.6 million, positioning for scale in after-school and sports services.
Negative
- None.
Insights
Q1 shows steady growth, higher costs, and aggressive expansion plans.
LEIFRAS delivered Q1 2026 revenue of JPY2,954.3 million, up 10.0%, with net income almost flat at JPY124.3 million. Social business was the main driver, growing 24.1%, while sports schools grew mid‑single digits.
Gross profit increased faster than sales, but selling, general and administrative expenses jumped 28.0%, reflecting higher advisory, promotion, tax and travel costs. Adjusted income from operations was essentially stable at JPY167.8 million, suggesting underlying profitability is holding despite growth investments.
Management guides 2026 revenue to $82.9–$95.7 million and income from operations to $4.5–$5.4 million, implying double‑digit expansion versus 2025. Multiple acquisitions totaling over JPY675 million and a further approved deal indicate an acquisitive strategy; subsequent filings for the fiscal year ending December 31, 2026 will show how well these assets integrate into margins and cash flows.
Key Figures
Key Terms
Adjusted income from operations financial
Non-GAAP financial measure financial
Social business financial
Contract liabilities financial
Asset retirement obligations financial
Revenue from Contracts with Customers financial
Earnings Snapshot
For 2026, revenue is expected between $82.9M and $95.7M and income from operations between $4.5M and $5.4M, both representing double-digit growth over 2025.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of June 2026
Commission File Number: 001-42877
(Translation of registrant’s name into English)
Ebisu
Garden Place Tower Floor 20
4-20-3, Ebisu, Shibuya-ku
Tokyo, Japan
+81-30-6451-1341
(Address and telephone number, including area code, of Registrant’s principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
| Form 20-F ☒ | Form 40-F ☐ |
Explanatory Note
LEIFRAS Co., Ltd. (the “Company”) is furnishing its unaudited financial statements and notes for the three months ended March 31, 2026. The financial statements and notes are attached as Exhibit 99.1 to this report. Management’s Discussion and Analysis of Financial Condition and Results of Operations for the three months ended March 31, 2026 is attached as Exhibit 99.2 to this report. The Company also hereby furnishes its investor presentation and press release, attached as Exhibit 99.3 and Exhibit 99.4 to this report, respectively.
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Exhibit Index
| Exhibit No. | Description | |
| 99.1 | Unaudited Interim Condensed Consolidated Financial Statements and Notes of LEIFRAS Co., Ltd. For the three Months Ended March 31, 2025 and 2026 | |
| 99.2 | Management’s Discussion and Analysis of Financial Condition and Results of Operations | |
| 99.3 | Investor Presentation, dated June [18], 2026 | |
| 99.4 | Press Release, dated June [18], 2026 | |
| 101. INS | Inline XBRL Instance Document | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| LEIFRAS Co., Ltd. | ||
| Date: June [18], 2026 | By: | /s/ Kiyotaka Ito |
| Name: | Kiyotaka Ito | |
| Title: | Representative Director and Chief Executive Officer | |
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Exhibit 99.1
LEIFRAS CO., LTD. AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
| December 31, | March 31, | March 31, | ||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| JPY | JPY | US$ | ||||||||||
| (Unaudited) | (Unaudited) | |||||||||||
| ASSETS | ||||||||||||
| CURRENT ASSETS | ||||||||||||
| Cash | ||||||||||||
| Accounts receivable, net | ||||||||||||
| Inventories, net | ||||||||||||
| Prepaid expenses | ||||||||||||
| Other current assets | ||||||||||||
| TOTAL CURRENT ASSETS | ||||||||||||
| NON-CURRENT ASSETS | ||||||||||||
| Property and equipment, net | ||||||||||||
| Intangible assets, net | ||||||||||||
| Operating lease right-of-use assets | ||||||||||||
| Finance lease right-of-use assets | ||||||||||||
| Long-term deposits | ||||||||||||
| Long-term investment | ||||||||||||
| Deferred tax assets, net | ||||||||||||
| Goodwill | ||||||||||||
| Other non-current assets | ||||||||||||
| TOTAL NON-CURRENT ASSETS | ||||||||||||
| TOTAL ASSETS | ||||||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||
| CURRENT LIABILITIES | ||||||||||||
| Short-term loans | ||||||||||||
| Current portion of long-term loans | ||||||||||||
| Bond payable, current | ||||||||||||
| Accounts payable | ||||||||||||
| Accrued liabilities | ||||||||||||
| Income tax payable | ||||||||||||
| Contract liabilities, current | ||||||||||||
| Operating lease liabilities, current | ||||||||||||
| Finance lease liabilities, current | ||||||||||||
| Other current liabilities | ||||||||||||
| TOTAL CURRENT LIABILITIES | ||||||||||||
| NON-CURRENT LIABILITIES | ||||||||||||
| Long-term loans, net of current portion | ||||||||||||
| Bond payable, non-current | ||||||||||||
| Contract liabilities, non-current | ||||||||||||
| Operating lease liabilities, non-current | ||||||||||||
| Finance lease liabilities, non-current | ||||||||||||
| Assets retirement obligations | ||||||||||||
| TOTAL NON-CURRENT LIABILITIES | ||||||||||||
| TOTAL LIABILITIES | ||||||||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||||||
| SHAREHOLDERS’ EQUITY | ||||||||||||
| Ordinary shares, shares authorized; shares issued and shares outstanding as of December 31, 2025 and March 31, 2026 | ||||||||||||
| Additional paid-in capital | ||||||||||||
| Treasury shares, shares as of December 31, 2025 and March 31, 2026 | ( |
) | ( |
) | ( |
) | ||||||
| Retained earnings | ||||||||||||
| TOTAL SHAREHOLDERS’ EQUITY | ||||||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
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LEIFRAS CO., LTD. AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME
| For the three months ended March 31, |
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| 2025 | 2026 | 2026 | ||||||||||
| JPY | JPY | US$ | ||||||||||
| NET REVENUE | ||||||||||||
| Cost of revenue | ( |
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| GROSS PROFIT | ||||||||||||
| Selling, general, and administrative expenses | ( |
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| INCOME FROM OPERATIONS | ||||||||||||
| OTHER INCOME (EXPENSE) | ||||||||||||
| Interest income | ||||||||||||
| Interest expense | ( |
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| Dividend income | ||||||||||||
| Grant income | ||||||||||||
| Unrealized loss on short-term investment | ( |
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| Unrealized gain on long-term investment | ||||||||||||
| Loss on disposal of long-lived assets | ( |
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| Other income (expense), net | ( |
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| Total other income (expense), net | ( |
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| INCOME BEFORE INCOME TAX PROVISION | ||||||||||||
| PROVISION FOR INCOME TAXES | ||||||||||||
| Current | ( |
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| Deferred | ( |
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| Total provision for income taxes | ( |
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| NET INCOME | ||||||||||||
| WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES | ||||||||||||
| Basic | ||||||||||||
| Diluted | ||||||||||||
| EARNINGS PER SHARE | ||||||||||||
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The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
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LEIFRAS CO., LTD. AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED
STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
| Ordinary shares | Additional | Treasury shares | Total | |||||||||||||||||||||||||
| No. of Shares |
Amount | Paid-in Capital |
No. of Shares |
Amount | Retained Earnings |
Shareholders’ Equity |
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| JPY | JPY | JPY | JPY | JPY | ||||||||||||||||||||||||
| Balance as of December 31, 2024 | ( |
) | ( |
) | ||||||||||||||||||||||||
| Net income | - | - | ||||||||||||||||||||||||||
| Balance as of March 31, 2025 (Unaudited) | ( |
) | ( |
) | ||||||||||||||||||||||||
| Balance as of December 31, 2025 | ( |
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| Net income | - | - | ||||||||||||||||||||||||||
| Balance as of March 31, 2026 (Unaudited) | ( |
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| Balance as of March 31, 2026 (US$) (Unaudited) | ( |
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The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
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LEIFRAS CO., LTD. AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| For the three months ended March 31, |
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| 2025 | 2026 | 2026 | ||||||||||
| JPY | JPY | US$ | ||||||||||
| Cash flows from operating activities | ||||||||||||
| Net income | ||||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities | ||||||||||||
| Depreciation and amortization expense | ||||||||||||
| Provision for expected credit loss | ||||||||||||
| Loss on disposal of property and equipment | ||||||||||||
| Provision for inventory impairment | ||||||||||||
| Unrealized loss on short-term investment | ||||||||||||
| Unrealized gain on long-term investment | ( |
) | ( |
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| Unrealized foreign currency exchange loss | ||||||||||||
| Other non-cash expenses (income) | ( |
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| Deferred tax expense | ||||||||||||
| Changes in operating assets and liabilities | ||||||||||||
| Accounts receivable, net | ( |
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| Inventories | ||||||||||||
| Prepaid expenses | ( |
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| Long-term deposits | ( |
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| Other current assets | ( |
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| Other non-current assets | ( |
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| Accounts payable | ||||||||||||
| Accrued liabilities | ( |
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| Contract liabilities | ( |
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| Operating lease liabilities | ( |
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| Income tax payable | ( |
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| Amount due to a director | ( |
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| Net cash used in operating activities | ( |
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| Cash flows from investing activities | ||||||||||||
| Purchase of investment securities | ( |
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| Purchase of property and equipment | ( |
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| Purchase of intangible assets | ( |
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| Net cash used in investing activities | ( |
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| Payment of finance lease liabilities | ( |
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| Repayment of bank loans | ( |
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| Payment of deferred IPO costs | ( |
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| Net cash (used in) provided by financing activities | ( |
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| Effect of exchange rate | ( |
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| Net decrease in cash | ( |
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| Cash at the beginning of period | ||||||||||||
| Cash at the end of period | ||||||||||||
| Supplementary cash flow information | ||||||||||||
| Cash paid for income taxes | ||||||||||||
| Cash paid for interest expenses | ||||||||||||
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
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LEIFRAS CO., LTD. AND SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1 — NATURE OF BUSINESS AND COMPANY
Leifras Co., Ltd. (the “Company” or “Leifras”) was incorporated in Tokyo, Japan, in August 2001. The Company operates its business and manages its subsidiaries with a focus on providing services related to operation of sports schools and organizing events for children, selling sports equipment, managing extracurricular activities in elementary and junior high schools, offering sports therapy for children with developmental disabilities, and providing health exercise guidance for the elderly.
The unaudited interim condensed consolidated financial statements reflect the activities of each of the following entities:
| Name | Background | Ownership | Principal activities | |||
|
● A Japan company
● Incorporated on August 28, 2001 |
- | Engaged in management and operation of sports clubs, sports classes and cultural classes, management of extracurricular activities in elementary and junior high schools, sports and healthcare facility management, selling sports equipment, and investment holding | ||||
(“Leifras Travel”) |
● A Japan company
● Incorporated on April 9, 2019 |
Engaged in travel business based on the Travel Agency Act | ||||
|
● A Japan company
● Incorporated on June 24, 2020
● Liquidated on December 13, 2024 |
Engaged in management of operation of sports clubs, sports classes, and cultural classes | |||||
|
● A Japan company
● Incorporated on January 6, 2020 |
Engaged in management of after-school childcare facilities | |||||
|
● A Japan company
● Incorporated on January 4, 2022
● Liquidated on June 28, 2024 |
Engaged in after-school child welfare business based on the Child Welfare Act | |||||
|
● A Japan company
● Incorporated on November 27, 2017
● Disposed on April 8, 2024 |
Engaged in management and operation of sports clubs, sports classes, and cultural classes |
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Note 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES
Initial Public Offering
On October 10, 2025, the Company completed its initial public offering (“IPO”) of American Depositary Shares (“ADSs”), representing ordinary shares, at a public offering price of $4.00 per ADS. The Company received net proceeds of approximately JPY
Basis of presentation
The unaudited interim condensed consolidated financial statements do not include all the information and footnotes required by accounting principles generally accepted in the United States of America (“U.S. GAAP” or “GAAP”) for complete consolidated financial statements. Certain information and note disclosures normally included in the annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted consistent with Article 10 of Regulation S-X. In the opinion of the Company’s management, the unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and include all adjustments, in normal recurring nature, as necessary for the fair statement of the Company’s financial position as of March 31, 2026, and results of operations and cash flows for the three months ended March 31, 2025 and 2026. The unaudited interim condensed consolidated balance sheet as of March 31, 2026 has been derived from the unaudited consolidated financial statements at that date but does not include all the information and footnotes required by U.S. GAAP. Interim results of operations are not necessarily indicative of the results expected for the full fiscal year or for any future period. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of and for the fiscal years ended December 31, 2024 and 2025, and related notes included in the Company’s audited consolidated financial statements.
Principles of consolidation
The unaudited interim condensed consolidated financial statements include the financial statements of the Company and its subsidiaries. A subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting power; has the power to appoint or remove the majority of the members of the board of directors; and has the power to cast majority of votes at the meeting of the board or to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders. All inter-company transactions have been eliminated upon consolidation.
Use of estimates and assumptions
In preparing the unaudited interim condensed consolidated financial statements in conformity with U.S. GAAP, the management is required to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited interim condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. These estimates are based on information available as of the date of the unaudited interim condensed consolidated financial statements. Significant estimates required to be made by management include, but are not limited to, allowance of expected credit losses, inventory valuation, useful lives of property, equipment and intangible assets, the impairment of long-lived assets and goodwill, provision of refund liabilities, valuation of share-based compensation, valuation allowance of deferred tax assets, uncertain income tax positions, the period during which revenue for registration fees is recognized over time, and implicit interest rate of operating and finance leases. Actual results could differ from those estimates, as the current economic environment has increased the degree of uncertainty inherent in these estimates and assumptions.
6
Business combinations
The purchase price of an acquired company is allocated between tangible and intangible assets acquired and liabilities assumed from the acquired business based on their estimated fair values, with the residual of the purchase price recorded as goodwill. Transaction costs associated with business combinations are expensed as incurred and are included in general and administrative expenses in the Company’s unaudited interim condensed consolidated statements of income. The results of operations of the acquired business are included in the Company’s results of operations from the date of acquisition.
Convenience translation
Cash
For the purposes of statements of cash flows, the Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. The Company maintains substantially all its bank accounts in Japan. Cash balances in bank accounts in Japan are insured by the Deposit Insurance Corporation of Japan subject to certain limitations. As of December 31, 2025 and March 31, 2026, the Company did
Accounts Receivable, net
Accounts receivable includes trade accounts due from customers. Accounts are considered overdue after 30 days. Management reviews its receivables on a regular basis to determine if the allowance for expected credit loss is adequate and provides allowance when necessary. The allowance is based on management’s best estimates of specific losses on individual customer exposures, as well as the historical trends of collections. Account balances are charged off against the allowance after all means of collection have been exhausted and the likelihood of collection is not probable. As of December 31, 2025 and March 31, 2026, the Company made JPY
Investments in securities
The Company’s investments in equity securities of publicly traded companies are accounted for in accordance with ASC 321, Investments—Equity Securities. These investments are measured at fair value using quoted market prices in active markets. Unrealized gains and losses resulting from changes in fair value are recognized in earnings within other income (expense), net, in the unaudited interim condensed consolidated statements of income. The Company classifies its investments in equity securities as short-term or long-term based on management’s intent and ability to sell the investments within one year from the balance sheet date.
Inventories, net
Inventories, net are stated at the lower of cost or net realizable value, on a weighted average basis. Costs include mainly the cost of merchandise inventories such as uniforms and sports equipment. Any excess of the cost over the net realizable value of each item of merchandise inventories is recognized as a provision for diminution in the value of merchandise inventories. Net realizable value is the estimated selling price in the normal course of business less any costs to sell products. The Company periodically evaluates merchandise inventories for their net realizable value adjustments and reduces the carrying value of those merchandise inventories that are obsolete or in excess of the forecasted usage to their estimated net realizable value based on various factors including aging and expiration dates, as applicable, taking into consideration historical and expected future product sales.
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Prepaid expenses
Prepaid expenses mainly comprise an advance payment for insurance fees, web advertising fees, and software subscription fees. These expenses are initially recognized as assets and are subsequently transferred to the income statement over time. Management reviews its prepaid expenses on a regular basis to determine if the allowance is adequate and adjusts the allowance when necessary.
Other current assets
Other current assets primarily consist of deferred expenses, including promotional consumables, clothing, and sports equipment. Deferred expenses are initially recorded as assets on the unaudited interim condensed consolidated balance sheet and subsequently expensed over time as they are used. These costs are incurred for supplies to be utilized in future periods. As of December 31, 2025 and March 31, 2026, the total deferred expenses were JPY
Property and equipment, net
Property and equipment are stated at cost less accumulated depreciation and impairment if applicable. Depreciation is computed using the straight-line method or declining balance method over the estimated useful lives of the assets. Cost represents the purchase price of the asset and other costs incurred to bring the asset into its intended use. The estimated useful lives are as follows:
| Useful Life | ||
| Leasehold improvements | ||
| Building and facilities | ||
| Motor vehicle | ||
| Tools and equipment |
Expenditures on maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expense as incurred. Expenditures for major renewals and betterments which substantially extend the useful life of assets are capitalized.
Intangible assets, net
Intangible assets with finite lives are initially recorded at cost and amortized on a straight-line basis over the estimated economic useful lives of the respective assets. Acquired intangible assets from a business combination are recognized and measured at fair value at the time of acquisition. Those assets represent assets with finite lives and are further amortized on a straight-line basis over the estimated economic useful lives of the respective assets. The estimated useful lives of intangible assets are as follows:
| Useful Life | ||
| Trademarks | ||
| Software | ||
| Customer-related intangible assets |
8
Impairment for long-lived assets
Long-lived assets, including property and equipment and intangible assets with finite lives, are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. The Company assesses the recoverability of the assets based on the undiscounted future cash flows the assets are expected to generate and recognizes an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. If an impairment is identified, the Company will reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. As of December 31, 2025 and March 31, 2026,
Goodwill
Goodwill represents the excess of the purchase price over the fair value of the identifiable net assets acquired in a business combination. In accordance with ASC Topic 350, “Intangibles—Goodwill and Others,” goodwill is subject to at least an annual assessment for impairment or more frequently if events or changes in circumstances indicate that an impairment may exist, applying a fair-value based test. Fair value is generally determined using a discounted cash flow analysis.
The Company has the option to assess qualitative factors first to determine whether it is necessary to perform the quantitative test in accordance with ASC 350-20. In the qualitative assessment, the Company considers primary factors such as industry and market considerations, overall financial performance of the entity, and other specific information related to the operations. If the Company believes, as a result of the qualitative assessment, that it is more-likely-than-not that the fair value of the reporting unit is less than its carrying amount, the quantitative impairment test described above is required. Otherwise, no further testing is required. For the fiscal year ended December 31, 2025 and the three months ended March 31, 2026, the Company performed qualitative tests by evaluating Apicos, and concluded that it was not more-likely-than-not that the fair value of the reporting unit is less than its carrying amount.
Operating leases
The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, operating lease liability, and operating lease liability, non-current in the Company’s unaudited interim condensed consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. When determining the lease term, the Company includes options to extend or terminate the lease when it is reasonably certain that it will exercise that option, if any. As the Company’s leases do not provide an implicit rate, the Company used an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company has elected to adopt the following lease policies in conjunction with the adoption of ASU 2016-02: (i) for leases that have lease terms of 12 months or less and do not include a purchase option that is reasonably certain to exercise, the Company elected not to apply ASC 842 recognition requirements; and (ii) the Company elected to apply the package of practical expedients for existing arrangements entered into prior to April 1, 2020 to not reassess (a) whether an arrangement is or contains a lease, (b) the lease classification applied to existing leases, and (c) initial direct costs.
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Finance leases
Finance lease assets are subsequently amortized using the straight-line method from the lease commencement date to the earlier of the end of its useful life or the end of the lease term unless the lease transfers ownership of the underlying asset to the Company or the Company is reasonably certain to exercise an option to purchase the underlying asset. In those cases, the finance lease assets are amortized over the useful life of the underlying asset. Accordingly, the assets leased under the finance leases are included in property and equipment, and depreciation thereon is recognized in operating expenses in the financial statements. When the Company makes its contractually required payments under finance leases, the Company allocates a portion to reduce the finance lease obligation and a portion is recognized as interest expenses.
Asset retirement obligations
The Company accounts for asset retirement obligations in accordance with ASC 410-20, Asset Retirement Obligations. ASC 410-20 requires the Company to record the fair value of an asset retirement obligation as a liability in the period in which it incurs an obligation associated with the retirement of tangible long-lived assets that result from the operation use of the leased assets. Asset retirement obligations consist of estimated restoration costs to be incurred by the Company in the future once the economic life of its leased assets is reached. The estimated fair value of the asset retirement obligation is based on the current cost escalated at an inflation rate and discounted at a credit adjusted risk-free rate. This liability is capitalized as part of the cost of the related asset and amortized over its useful life. The liability is accreted until the Company settles the obligation.
Deferred IPO costs
Pursuant to ASC 340-10-S99-1, costs that are directly attributable to a proposed offering of equity securities are capitalized as deferred offering costs. Upon the completion of the offering, such costs are recorded as a reduction of the net proceeds and charged against additional paid-in capital. These costs primarily consist of legal, accounting, consulting, filing fees with the U.S. Securities and Exchange Commission, and printing fees directly associated with the registration and offering process.
On October 10, 2025, the Company completed its IPO of ADSs at a public offering price of $4.00 per ADS, generating net proceeds of JPY
Upon the completion of the IPO, total deferred offering costs of JPY
As of December 31, 2025 and March 31, 2026, all deferred offering costs were charged against the net proceeds upon the completion of IPO on October 10, 2025.
Long-term deposits
Long-term deposits primarily consist of security deposits for the leases of headquarters and branch offices, as well as guaranteed deposits for the club activity business, travel agency indemnity deposits, operating deposits, and outsourcing deposits. These amounts are recorded based on the contractual value and are carried to the balance sheet as non-current assets.
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Other non-current assets
Other non-current assets primarily consist of long-term prepaid expenses, which mainly comprise advance payments for software subscription fees, as well as key money for property rentals. These expenses are initially recognized as assets and are subsequently transferred to the income statement over time.
Fair value measurement
The accounting standard regarding fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company.
The accounting standards define fair value, establish a three-level valuation hierarchy for disclosures of fair value measurement, and enhance disclosure requirements for fair value measures. The three levels are defined as follow:
| ● | Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. |
| ● | Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. |
| ● | Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. |
The following table presents information about the Company’s financial assets and liabilities that were measured at fair value on a recurring basis as of December 31, 2025 and March 31, 2026 and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.
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Assets and liabilities measured on a recurring basis or disclosed at fair value as of December 31, 2025 and March 31, 2026 are summarized below:
| Fair value measurement or disclosure as of December 31, 2025 using |
||||||||||||||||
| Total Fair Value as of December 31, 2025 |
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
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| JPY | JPY | JPY | JPY | |||||||||||||
| Fair value disclosure1 | ||||||||||||||||
| Bond payable | ||||||||||||||||
| Fair value measurements on a recurring basis | ||||||||||||||||
| Long-term investments | ||||||||||||||||
| Fair value measurement or disclosure as of March 31, 2026 using |
||||||||||||||||||||
| Total Fair Value as of March 31, 2026 |
Total Fair Value as of March 31, 2026 |
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
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| JPY (Unaudited) |
US$ (Unaudited) |
JPY (Unaudited) |
JPY (Unaudited) |
JPY (Unaudited) |
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| Fair value disclosure1 | ||||||||||||||||||||
| Bond payable | ||||||||||||||||||||
| Fair value measurements on a recurring basis | ||||||||||||||||||||
| Long-term investments | ||||||||||||||||||||
| 1 |
Fair value estimates are made at a specific point in time based on relevant market information about the financial instruments. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.
Contract liabilities
Contract liabilities are the obligation to transfer products or services to customers for which the Company has received the consideration or has billed the customers. The Company’s contract liabilities are non-refundable payments collected in advance from customers. Contract liabilities are reclassified to revenue at the point at which products or services are delivered to customers.
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Bond payable
Bond payable represents the contractual obligation of the issuer to make periodic interest payment and principal repayments at maturity. The bondholders have a fixed claim on the issuer’s assets and cash flows, similar to traditional debt instruments. If the contractual terms of the bond payable primarily represent a liability, the bonds are recognized as a liability at their fair value at the issuance date. Transaction costs directly attributable to the issuance are typically allocated to the liability and amortized over the bond’s term and the fair value has been disclosed in the fair value measurement. The bond payable is measured at amortized cost using the effective interest rate method. Interest expense is recognized over the bond’s term based on the effective interest rate, which reflects the market rate at the issuance date.
Revenue Recognition
The Company generates revenue primarily from membership, events hosting, school club support, after-school daycare services, and other fees collected from services provided. Revenue is recognized when a contract exists between the Company and a customer and upon transfer of control of promised products or services to such customer in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. The Company enters into contracts that can include various combinations of products and services, which may be capable of being distinct and accounted for as separate performance obligations. Revenue is recognized as a net of provision for refund and any taxes collected from customers, which are subsequently remitted to governmental authorities. The Company has adopted ASC 606, “Revenue from Contracts with Customers.” ASC 606 establishes principles for reporting information about the nature, amount, timing, and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. This guidance provides a five-step analysis in determining when and how revenue is recognized. Under the guidance, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In addition, the guidance requires the disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The Company is a principal and records revenue on a gross basis when the Company is primarily responsible for fulfilling the goods and services, has discretion in establishing pricing, and controls the promised goods and services before transferring that service to customers. The Company’s continuing operations currently generate revenue from the following main sources:
(i) Sports school business
Membership revenue: Membership revenue comprises registration fees, monthly fees, and annual fees. The Company cultivates professional coaches and provides high-quality professional sports lessons to its customers, who are children registered as the Company’s members. The typical payment terms for membership revenue set forth in the invoice are within 30 days of the invoice date.
The Company accounts for one-time, non-refundable registration fees as fees for facilitating membership registration. The Company provides administrative support, including creating individual member accounts, performing identity verification and health assessment, and providing onboarding materials and access to member information platforms. The Company recognizes the registration fees ratably over the average duration of membership life, which is generally 1 to 2 years, and reassesses the duration annually based on historical data. The registration fees were JPY
The Company accounts for membership annual fee revenue, net of refunds, on a deferred basis, ratably over the one-year membership period. The Company will bill and receive fixed annual membership revenue from students but not earned as contract liability on an annual basis and recognized over time, based on a straight-line basis over the school year or service period, as the customers simultaneously receive and consume the benefits of these services throughout the service period.
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The Company accounts for monthly fees, each membership registration contract represents a series of distinct services, which are delivery of various courses. The services have substantially the same pattern of transfer to the students, and as such, they are considered as a single performance obligation. The transaction price is stated in the contract and known at the time of contract inception. The monthly fees are generally collected in advance and are initially recorded as contract liabilities.
There is no variable consideration in the membership registration contracts with customers, except that the Company offers certain refunds for unattended classes to students who decided to withdraw from a course.
The Company estimates the amount of such refund liability based on historical refund rates on a portfolio basis using the expected value method, and such refund liability is recorded under accrued expenses and other current liabilities on the unaudited interim condensed consolidated balance sheets.
Event hosting: The Company offers event hosting service to customers, including but not limited to services like organizing sport-related events, student camps during school holidays, and day trips, which can cater to different budgets and preferences. To deliver such a service, the Company coordinates and integrates services from selected suppliers such as transportation, accommodation, and tour guide. The typical payment terms for event hosting revenue set forth in the invoices are within 30 days of the invoice date.
The Company enters into a distinct service contract with each customer for the service provided. The whole event hosting service is determined as a single performance obligation with a fixed total consideration as the customer benefits from a series of integrated services from selected suppliers, which are not separately identifiable.
The Company recognizes revenue at a point in time when the performance obligation is satisfied. The Company offers refund options to customers for event hosting fees received in advance for offline events that were subsequently cancelled due to weather conditions or natural disasters.
The Company estimates the amount of such refund liability based on historical refund rates on a portfolio basis using the expected value method, which is recorded under accrued expenses and other current liabilities on the unaudited interim condensed consolidated balance sheets.
Other revenue: Other revenue comprised primarily of non-profit organization (“NPO”) sales, royalty fees from franchises, sponsorship fees, other school revenue, and goods sales. The typical payment terms for other revenue set forth in the invoices are within 30 days of the invoice date.
NPO sales are recognized when the respective services are rendered to the customers or partner organizations, in accordance with the contract terms.
The Company receives certain royalty fees from franchisees for licensing franchises to operate under the Company’s trademarks and also receives certain other support and maintenance fees professional maintenance and support for the franchisees’ sports school business. The royalty fee is calculated to be a percentage of the revenue earned by a franchisee, which percentage is agreed in the payment schedule. The support and maintenance fees are billed according to negotiated billing terms and revenue is recognized in accordance with the fulfillment of the performance obligations as set forth in the terms and conditions set forth in customer contracts.
Sponsorship fees are recognized over the period specified in the sponsorship agreements as the performance obligations are fulfilled.
The Company sells sports equipment to customers. Each transaction represents a single performance obligation. The billing terms for sales of sports equipment are billed when equipment is delivered and is recognized at a point in time.
The Company offers special guidance services to the customers, mainly by dispatching coaches and instructors to kindergartens and nurseries to conduct sports and gymnastics classes, which are included in other school revenue. The fee is based on payment schedules specifying agreed rates according to the number of classes conducted each month. Each class represents a single performance obligation. The revenue from special guidance services is recognized over the contract term as customers receive and consume benefits of such services as provided. The special guidance services are billed monthly.
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(ii) Social business
The Company provides a variety of customized services to municipalities, other governmental authorities, and schools. The Company offers two primary services under the social business umbrella through fixed-fee contracts: school club activity support service and after-school daycare service. The billing terms for the social business are billed on a monthly, quarterly, or annual basis. The typical payment terms for social business set forth in the invoices are 30 to 60 days. The school club activity support service involves managing student club activities for elementary and middle schools, based on contracts with the schools or relevant municipalities or education boards. Service rendered includes providing sports, music, and other cultural lessons and coaching services, with revenue recognized over time on a straight-line basis throughout the contract period as customers receive and benefits from the services continuously. For certain social business contracts, revenue is recognized at a point in time when control of the service is transferred to the customer, which generally occurs upon completion of the service in accordance with the contract terms. Similarly, the after-school daycare service supports children with disabilities or developmental needs, enhancing their daily living skills and social abilities through soccer therapy, known for its developmental benefits. Revenue from after-school daycare service is also recognized over time throughout the contract period, as the benefits are continuously provided to and consumed by the customers.
Cost of revenue
Cost of revenue primarily consists of salaries and related welfare expenses for full-time coaches and instructors, school facility rental fees, event hosting related expenses, the cost of sports equipment sold, and related expenses directly used in the provision of services and goods to customers.
Selling, general, and administrative expenses
Selling, general, and administrative expenses include all operating costs of the Company, except cost of revenue, as described above. As a result, the majority of directors’ compensation and employee payroll-related expenses, commission fees, depreciation, travelling fees, system maintenance fees, advertising expenses, and operating lease expenses are included in selling, general, and administrative expenses. Since these expenses serve similar functions and pertain to the same aspects of the business, the Company has consolidated them into a single line item under this title.
Advertising expenses
The Company expenses advertising costs as they incurred. Total advertising expenses were JPY
Grant income
The Company recognizes grant income when the related grants are received because such grants are not subject to any past or future performance or use conditions and are not subject to future refunds. Grant income received and recognized totaled JPY
Income taxes
The Company accounts for current income taxes in accordance with the laws of the relevant tax authorities. Deferred income taxes are recognized when temporary differences exist between the tax bases of assets and liabilities and their reported amounts in the unaudited interim condensed consolidated financial statements. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
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An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. No significant penalties or interest relating to income taxes have been incurred for the three months ended March 31, 2025 and 2026.
Treasury shares
The Company accounts for treasury shares using the cost method. Under this method, the cost incurred to purchase the shares is recorded in the treasury shares account in shareholders’ equity. At retirement of the treasury shares, the ordinary shares account is charged only for the aggregate par value of the shares. The excess of the acquisition cost of treasury shares over the par value reduces additional paid-in capital.
The Company computes earnings per share (“EPS”) in accordance with ASC 260, “Earnings per Share.” ASC 260 requires companies to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average ordinary share outstanding for the period. Diluted EPS presents the dilutive effect on a per share basis of the potential ordinary shares (for instance, convertible securities, options, and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential ordinary shares that have an anti-dilutive effect (that is, those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. For the three months ended March 31, 2025 and 2026, the Company included incremental dilutive ordinary shares of , in the calculation of diluted EPS.
| For the three months Ended |
||||||||
| March 31, | ||||||||
| 2025 | 2026 | |||||||
| Weighted average number of common shares outstanding – basic | ||||||||
| Dilutive effect of stock options | ||||||||
| Weighted average number of common shares outstanding – diluted | ||||||||
Share-based compensation
The Company applies ASC 718, Compensation—Stock Compensation (“ASC 718”), to account for its share-based payments to employees and non-employees. In accordance with ASC 718, the Company determines whether an award should be classified and accounted for as a liability award or equity award. All the Company’s share-based awards to employees and non-employees are classified as equity awards and are recognized in the unaudited interim condensed consolidated financial statements based on their grant date fair values. The Company records share-based compensation expenses for employees and non-employees at fair value on the grant date. Share-based compensation is recognized net of forfeitures, as amortized expense on a straight-line basis over the requisite service period, which is the vesting period.
The Company accounts for share-based compensation expenses using an estimated forfeiture rate at the time of grant and revising, if necessary, in subsequent periods if actual forfeitures differ from initial estimates. Share-based compensation expenses are recorded net of estimated forfeitures such that expenses are recorded only for those share-based awards that are expected to vest.
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Warrants
The Company evaluates its warrants as either equity-classified or liability-classified derivatives in accordance with ASC 480, Distinguishing Liabilities from Equity and ASC 815, Derivatives and Hedging.
Warrants that are determined to be equity-classified are recorded within additional paid-in capital at their fair value on the date of issuance, and are not subject to subsequent remeasurement. The Company determined that the representative’s warrants issued in connection with the IPO met the criteria for equity classification. The fair value of these warrants was estimated using the Black-Scholes option-pricing model.
Related parties
Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence, such as a family member or relative, a shareholder, or a related corporation.
Commitments and contingencies
In the ordinary course of business, the Company is subject to contingencies, including legal proceedings and claims arising out of the business that relate to a wide range of matters, such as government investigations and tax matters. The Company recognizes a liability for such a contingency if it determines it is probable that a loss has occurred, and a reasonable estimate of the loss can be made. The Company may consider many factors in making these assessments including historical and the specific facts and circumstances of each matter.
Segment reporting
ASC 280, “Segment Reporting,” establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organizational structure as well as information about geographical areas, business segments, and major customers in unaudited interim condensed consolidated financial statements for detailing the Company’s business segments.
Based on the criteria established by ASC 280, the Company’s chief operating decision-maker has been identified as its Chief Executive Officer, who reviews the operating results of each segment when making decisions about allocating resources and assessing the performance. The Company has determined that it has two reportable segments: (1) sports school business and (2) social business. The Company’s long-lived assets are all located in Japan and substantially all of the Company’s revenue is derived from Japan. Therefore, no geographical segments are presented.
Concentration of risks
Concentration of credit risk
Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and accounts receivable. The Company places its cash with financial institutions with high credit ratings and quality.
Accounts receivable primarily comprise of amounts receivable from the service customers. To reduce credit risk, the Company performs ongoing credit evaluations of the financial condition of these service customers. The Company establishes a provision for expected credit loss based upon estimates, factors surrounding the credit risk of specific service customers and other information.
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Concentration of customers
As of December 31, 2025 and March 31, 2026, no customer accounted for more than
For the three months ended March 31, 2025 and 2026, no customer accounted for more than
Concentration of vendors
As of December 31, 2025, Vendors A and B accounted for
For the three months ended March 31, 2025, no vendor accounted for more than
Recently Adopted or Issued Accounting Pronouncements
The Company considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued. Under the JOBS Act, the Company meets the definition of an emerging growth company and has elected the extended transition period for complying with new or revised accounting standards, which delays the adoption of these accounting standards until they apply to private companies.
In November 2024, the Financial Accounting Standards Board (the “FASB”) issued ASU 2024-03 – Income Statement – Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) to improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion) in commonly presented expense captions (such as cost of sales, SG&A, and research and development). This ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of this new standard on the Company’s unaudited interim consolidated financial statements and related disclosures.
In January 2025, the FASB issued ASU 2025-01 – Income Statement – Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) to clarify the Effective Date. This ASU clarifies the effective date of ASU 2024-03, specifying that all public business entities must adopt the guidance for annual reporting periods beginning after December 15, 2026, and interim periods within those annual periods beginning after December 15, 2027. The Company is currently evaluating the potential impact of these new standards on our consolidated financial statements and related disclosures. The Company does not anticipate that the adoption of these standards will have a significant impact on the Company’s unaudited interim condensed consolidated financial statements.
In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. This ASU provides a practical expedient for all entities and an accounting policy election for entities other than public business entities, to simplify the measurement of expected credit losses for current accounts receivable and current contract assets arising from revenue transactions. This standard becomes effective for the Company for annual reporting periods beginning after December 15, 2025. The Company is currently evaluating the potential impact of these new standards on our consolidated financial statements and related disclosures. The Company does not anticipate that the adoption of these standards will have a significant impact on the Company’s unaudited interim condensed consolidated financial statements.
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In September 2025, the FASB issued ASU No. 2025-06 – Targeted Improvements to the Accounting for Internal-Use Software (Subtopic 350-40) to modernize the software capitalization requirements. The amendments eliminate the use of prescriptive software development stages and establish a new recognition threshold that requires capitalization to begin when a project is authorized and committed to funding, and it is probable that the project will be completed and used as intended. This evaluation must include an assessment for significant development uncertainty. The ASU also supersedes the separate guidance for website development costs (Subtopic 350-50) and integrates relevant recognition requirements into Subtopic 350-40. This ASU is effective for annual reporting periods beginning after December 15, 2027, with early adoption permitted. The standard permits adoption using a prospective, modified transition, or retrospective approach. The Company is currently evaluating the impact of this new standard on the Company’s unaudited interim condensed consolidated financial statements and related disclosures, including which transition approach will be adopted.
In October 2025, the FASB issued ASU 2025-10, “Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities.” This ASU provides guidance on the accounting for government grants received by business entities by requiring disclosures about the nature of the grants, the accounting policies used to account for the grants, and the line items on the financial statements that are affected by the grants. This ASU is effective for the Company for fiscal years beginning after December 15, 2025. The Company is currently evaluating the impact of this new standard on the Company’s unaudited interim condensed consolidated financial statements.
In November 2025, the FASB issued ASU 2025-11, “Interim Reporting (Topic 270): Narrow-Scope Improvements.” This ASU provides narrow-scope improvements to Topic 270 to clarify the interim reporting requirements and improve the consistency of information provided in interim periods. This ASU is effective for the Company for fiscal years beginning after December 15, 2025, and interim periods within those fiscal years. The Company does not anticipate that the adoption of this standard will have a significant impact on the Company’s unaudited interim condensed consolidated financial statements.
In December 2025, the FASB issued ASU 2025-12, “Codification Improvements.” This ASU provides amendments to clarify the Codification, correct unintended application of guidance, and make minor improvements to the Codification that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. The effective date varies depending on the specific amendment. The Company does not anticipate that the adoption of this standard will have a significant impact on the Company’s unaudited interim condensed consolidated financial statements.
The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company’s unaudited interim condensed consolidated balance sheets, unaudited interim condensed consolidated statements of income, and unaudited interim condensed consolidated statements of cash flows.
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Note 3 — NET REVENUE
The Company’s net revenue consisted of the following:
| For the three months ended March 31, |
||||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| JPY | JPY | US$ | ||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||
| Sports school business – Membership | ||||||||||||
| Sports school business – Events | ||||||||||||
| Sports school business – Others | ||||||||||||
| Social business | ||||||||||||
| Subtotal | ||||||||||||
| Add: reversal (provision) of sales refund* | ( |
) | ||||||||||
| Total | ||||||||||||
| For the three months ended March 31, |
||||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| JPY | JPY | US$ | ||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||
| Timing of revenue recognition | ||||||||||||
| Transferred over time | ||||||||||||
| Transferred at a point in time | ||||||||||||
| Total | ||||||||||||
| * |
The “reversal (provision) of sales refund” represents the provision for refund for sports school business services. The refund liability is based on estimates made from past refund historical data. The Company will re-evaluate the provision for refund liability based on the estimates to match the actual claims and expects to make use of the refund liability over the next operating period.
The “reversal of sales refund” represents the release of refund obligations initially recorded under ASC 606-10-55-23 through 55-27 for estimated customer refunds. During the reporting period, certain customers did not exercise their refund rights, and the related refund liabilities were reversed. Such reversals are recognized as an increase in revenue in the period in which the change in estimate occurs, consistent with ASC 606-10-32-14. The amount represents the reversal of previously recognized refund liabilities as certain customer refunds were no longer expected to occur. Such reversals are recorded as an increase to revenue in the period of change in estimate.
Liabilities for refund are included in “Other current liabilities” and were JPY
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Note 4 — SUBSEQUENT EVENTS
The Company evaluated all events and transactions from March 31, 2026 up through June 18, 2026, which is the date that these unaudited interim condensed consolidated financial statements are available to be issued.
On May 1, 2026, the Company completed the acquisition of the business of Well Resource Co., Ltd. (“Well Resource”) for a total cash consideration of JPY
On
May 21, 2026, the Company entered into a share transfer agreement to acquire 100% of the equity interest of Tokai Sports Co.,
Ltd. (“Tokai Sports”) for a total consideration of JPY
On June 15, 2026, the Company’s Board of Directors approved a share transfer agreement to acquire 100% of the equity interest of
a private company based in Japan for a total consideration of JPY
On June 15, 2026, the Company completed the liquidation of its wholly owned subsidiary, Leifras Travel, upon the approval of the shareholders’ meeting (the corporate registration of which is currently in progress). This decision was made to enhance operational efficiency by centralizing business resources into Leifras. The liquidation represents an internal reorganization within the group and did not have a material impact on the Company’s consolidated financial statements.
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Exhibit 99.2
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Management’s Discussion and Analysis of Financial Condition and Results of Operations is designed to provide a reader of our financial statements with a narrative from the perspective of Company’s management. You should read the following discussion and analysis of our results of operations and financial condition in conjunction with our financial statements and the related notes. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” and “Disclosure Regarding Forward-Looking Statements” in our annual report on Form 20-F, dated Apr 8, 2026.
Overview
Headquartered in Shibuya-ku, Tokyo, we are a sports and social business company dedicated to youth sports and community engagement. We primarily provide services related to the organization and operations of sports schools and sports events for children. Building upon our experience and know-how in sports education, we also operate a robust social business sector, dispatching sports coaches to meet various community needs.
At the core of our operations is the children’s sports school business. When we refer to a sports school, it refers to a series of courses and programs that we offer to teach a sport, instead of a physical location. As of March 31, 2026, we were recognized as one of Japan’s largest operators of children’s sports schools in terms of both membership and facilities. As of March 31, 2026, we held our sports classes at more than 4,600 facility locations in Japan nationwide, serving over 60,960 members. The number of members is based on the number of students taking classes; if a student is enrolled in two different classes, this student is counted as two members. We provide 13 sports schools, from soccer school “Liberta” and baseball school “Porte,” to rhythmic karate school “Quore” and kendo school “Kokoro.” We also offer classes that cater to the various needs of different age groups and sports capability levels. For instance, our “JJMIX” classes offer beginners from the age of two and up the opportunity to experience multiple sports, and our “Rugina” classes are designed specifically for girls. Approximately 88% of our sports school members are elementary school students, with additional programs for preschoolers, nursery school children, kindergarteners, and junior high school students. These classes are taught by professional coaches who bring their expertise and passion to each session, ensuring that students receive high-quality coaching in safe environments. Our sports school business also extends to sports merchandise sales and commissioned special guidance services.
Our approach to sports education emphasizes the development of non-cognitive skills, which are crucial for success both inside and outside the sports arena. Following our teaching principle “acknowledge, praise, encourage, and motivate,” our classes integrate non-cognitive skills, such as motivation, teamwork, strategic thinking, and sportsmanship, into our sports curriculum. For instance, our soccer program focuses on developing technical skills, tactical understanding, and teamwork, and our martial arts programs in karate and kendo promote physical fitness and self-discipline. Our holistic approach integrates physical and mental development, setting us apart in the industry.
Building upon our experience and know-how in sports education, our social business mainly dispatches sports coaches to meet various community needs. Our school club support business provides sports coaching in school club activities and physical education classes and coordinates collaborations between school clubs and private companies. Our LEIF after-school daycare service supports children with disabilities or developmental characteristics through soccer therapy, promoting independence and improving life skills. Our involvement also extends to facility management services at public sports facilities, focusing on providing sports coaching for people of all ages. Our elderly healthcare initiative offers exercise programs for the elderly, including exercise instruction such as preventive nursing care exercises, yoga, and other health promotion services at community centers and healthcare facilities. By addressing these diverse needs, we aim to promote physical health, social inclusion, and community well-being across different demographics.
Our revenue increased by JPY268.1 million ($1.7 million), or 10.0%, from JPY2,686.2 million ($16.9 million) for the three months ended March 31, 2025, to JPY2,954.3 million ($18.6 million) for the three months ended March 31, 2026.
Our net income increased by JPY1.8 million ($0.0 million), or 1.5%, from JPY122.5 million ($0.8 million) for the three months ended March 31, 2025, to JPY124.3 million ($0.8 million) for the three months ended March 31, 2026.
As of March 31, 2026, we had JPY100.0 million ($0.6 million) of short term loans, JPY114.8 million ($0.7 million) of current portion of long term loans, and JPY8.4 million ($0.1 million) of long term loans outstanding as compared to JPY100.0 million ($0.6 million) of short term loans, JPY151.0 million ($0.9 million) of current portion of long term loans, and JPY24.4 million ($0.2 million) of long-term loans outstanding as of December 31, 2025.
Our Business Model
Our business model is predicated on our competitive advantage: the development of coaches who can enhance children’s non-cognitive skills through sports, and our expertise in integrating these skills with sports programs. Non-cognitive skills encompass attributes related to an individual’s personality, attitudes, behaviors, and social interactions.
We are committed to training coaches who can effectively foster children’s non-cognitive skills through sports. We pay fees to use public facilities (for instance, school gyms and grounds and municipal venues) capable of hosting these lessons. We tailor a variety of sports lesson programs in order to encourage our students’ interaction and enhance their non-cognitive skills.
Our coaches are expected to be exemplary adult role models who possess not only the skills to facilitate lessons but also the attributes of school teachers and parents. Having our coaches build robust relationships with children and their parents, our lessons become a valuable “third place” for children, alongside school and home, thereby increasing our customers’ switching cost and enhancing customer retention rate.
Trend Information
Our sports school business experiences seasonal fluctuations, with lower membership number around March due to school graduations, followed by growth from April to June when the new school year begins. Revenue from event hosting also peaks during school holidays in March, August, and December–January. Our social business cash flows show seasonality as some governmental contracts settle payments around fiscal year-end in March. For further details, see “Trend Information” under “Item5 Operating and Financial Review and Prospects” in our annual report on Form 20-F, dated Apr 8, 2026.
Key Operating Metrics
We use the following key performance indicators to analyze our business performance and financial forecasts and to develop strategic plans. We believe that these indicators provide useful information to help investors understand and evaluate our results of operations in the same manner as our management team. Certain judgments and estimates are inherent in our processes for calculating these metrics.
These key performance indicators are presented for supplemental informational purposes only; they should not be considered a substitute for financial information presented in accordance with U.S. GAAP and may differ from similarly titled metrics or measures presented by other companies. The following table sets forth a summary of the key operating metrics:
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|
For the Three Months Ended |
Period- Over-Period |
|||||||||||||||
| 2025 | 2026 | 2026 | 2025 to 2026 % Change |
|||||||||||||
| Operating Metrics: | ||||||||||||||||
| Sports school business | ||||||||||||||||
| Number of members | 62,495 | 60,960 | - | (2.5 | )% | |||||||||||
| Average membership duration (Year) | 1.82 | 1.89 | - | 3.8 | % | |||||||||||
| Revenue per capita | JPY | 3,272,467 | JPY | 3,404,469 | US$ | 21,401 | 4.0 | % | ||||||||
| Social business | ||||||||||||||||
| Number of schools | 352 | 381 | - | 8.2 | % | |||||||||||
| Number of club activities | 1,971 | 2,120 | - | 7.6 | % | |||||||||||
| Revenue per capita | JPY | 2,263,847 | JPY | 2,318,412 | US$ | 14,574 | 2.4 | % | ||||||||
For definitions of our key operating metrics, see “Key Operating Metrics” under “Item5 Operating and Financial Review and Prospects” in our annual report on Form 20-F, dated Apr 8, 2026.
Results of Operations
The following table sets forth our selected profit or loss data, both in absolute amount and as a percentage of total revenue, for each of the periods indicated:
| For the Three Months Ended March 31, | Fluctuation | |||||||||||||||||||||||||||
| 2025 | 2026 | 2026 | ||||||||||||||||||||||||||
| JPY | % | JPY | US$ | % | JPY | % | ||||||||||||||||||||||
| NET REVENUE | ||||||||||||||||||||||||||||
| Sports school business | 2,048,564,200 | 76.3 | % | 2,162,972,933 | 13,596,762 | 73.2 | % | 114,408,733 | 5.6 | % | ||||||||||||||||||
| Social business | 637,650,207 | 23.7 | % | 791,351,187 | 4,974,549 | 26.8 | % | 153,700,980 | 24.1 | % | ||||||||||||||||||
| TOTAL REVENUE | 2,686,214,407 | 100.0 | % | 2,954,324,120 | 18,571,311 | 100.0 | % | 268,109,713 | 10.0 | % | ||||||||||||||||||
| COST OF REVENUE | (1,895,769,261 | ) | (70.6 | )% | (2,002,020,892 | ) | (12,584,995 | ) | (67.8 | )% | (106,251,631 | ) | 5.6 | % | ||||||||||||||
| GROSS PROFIT | 790,445,146 | 29.4 | % | 952,303,228 | 5,986,316 | 32.2 | % | 161,858,082 | 20.5 | % | ||||||||||||||||||
| OPERATING EXPENSES: | ||||||||||||||||||||||||||||
| Selling, general and administrative expenses | (624,299,080 | ) | (23.2 | )% | (798,995,128 | ) | (5,022,599 | ) | (27.0 | )% | (174,696,048 | ) | 28.0 | % | ||||||||||||||
| TOTAL OPERATING EXPENSES | (624,299,080 | ) | (23.2 | )% | (798,995,128 | ) | (5,022,599 | ) | (27.0 | )% | (174,696,048 | ) | 28.0 | % | ||||||||||||||
| INCOME FROM OPERATIONS | 166,146,066 | 6.2 | % | 153,308,100 | 963,717 | 5.2 | % | (12,837,966 | ) | (7.7 | )% | |||||||||||||||||
| Interest expenses, net | (3,499,128 | ) | (0.1 | )% | (46,162 | ) | (290 | ) | 0.0 | % | 3,452,966 | (98.7 | )% | |||||||||||||||
| Other income and expenses, net | (7,422,925 | ) | (0.3 | )% | 16,075,984 | 101,056 | 0.5 | % | 23,498,909 | (316.6 | )% | |||||||||||||||||
| INCOME BEFORE INCOME TAX PROVISION | 155,224,013 | 5.8 | % | 169,337,922 | 1,064,483 | 5.7 | % | 14,113,909 | 9.1 | % | ||||||||||||||||||
| Provision for income taxes | (32,683,751 | ) | (1.2 | )% | (45,009,918 | ) | (282,939 | ) | (1.5 | )% | (12,326,167 | ) | 37.7 | % | ||||||||||||||
| NET INCOME | 122,540,262 | 4.6 | % | 124,328,004 | 781,544 | 4.2 | % | 1,787,742 | 1.5 | % | ||||||||||||||||||
| ADJUSTED INCOME FROM OPERATIONS | 166,146,066 | 6.2 | % | 167,813,252 | 1,054,898 | 5.7 | % | 1,667,186 | 1.0 | % | ||||||||||||||||||
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Revenue
Total revenue increased by JPY268.1 million ($1.7 million), or 10.0%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025.
Sports school business revenue increased by JPY114.4 million ($0.7 million), or 5.6%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase in revenue was mostly driven by: (i) an increase of JPY81.0 million ($0.5 million) in sports school business-other revenue, mainly attributable to our services provided to a new customer, and (ii) an increase of JPY45.6 million ($0.3 million) in membership fees revenue mainly attributable to an increase in monthly membership fee rates, despite a decrease in the period-end number of members as of March 31, 2026 compared to March 31, 2025. These increases were partially offset by a decrease of JPY27.9 million ($0.2 million) in event hosting revenue mainly attributable to a decrease in the number of customers who joined events, from 48,146 for the three months ended March 31, 2025 to 45,394 for the three months ended March 31, 2026. The number of customers who joined events refers to the total number of participants, including both members and non-members of the Company. We define the number of customers who participated in events as the total number of times customers attended throughout the fiscal year. For example, if the same customer attends three events within the same fiscal year, this customer is counted as three customers.
Social business revenue increased by JPY153.7 million ($1.0 million), or 24.1%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase in revenue was mostly driven by: (i) an increase in school club activity support revenue by JPY110.2 million ($0.7 million), driven by an increase in contracts with schools, and (ii) an increase in facility management services revenue by JPY38.0 million ($0.2 million), driven by the acquisition of new clients.
Cost of revenue and gross profit
Cost of revenue increased by JPY106.3 million ($0.7 million), or 5.6%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, driven by: (i) the increase in revenue noted above, (ii) an increase in salaries and welfare expenses of JPY105.8 million ($0.7 million) due primarily to an increase in headcount associated with the expansion of the Company’s business operations, and (iii) an increase in others of JPY30.5 million ($0.2 million), primarily due to the expansion of our social business.
| For the Three Months Ended March 31, | Fluctuation | |||||||||||||||||||||||||||
| 2025 | 2026 | 2026 | ||||||||||||||||||||||||||
| JPY | % | JPY | US$ | % | JPY | % | ||||||||||||||||||||||
| Salaries and welfare expenses | 1,276,976,353 | 67.4 | % | 1,382,820,121 | 8,692,608 | 69.1 | % | 105,843,768 | 8.3 | % | ||||||||||||||||||
| Event hosting expenses | 225,708,432 | 11.9 | % | 231,310,811 | 1,454,053 | 11.6 | % | 5,602,379 | 2.5 | % | ||||||||||||||||||
| School facility rental fees | 122,463,670 | 6.5 | % | 134,856,299 | 847,726 | 6.7 | % | 12,392,629 | 10.1 | % | ||||||||||||||||||
| Travel expenses | 113,804,885 | 6.0 | % | 65,713,295 | 413,084 | 3.3 | % | (48,091,590 | ) | (42.3 | )% | |||||||||||||||||
| Others | 156,815,921 | 8.2 | % | 187,320,366 | 1,177,524 | 9.3 | % | 30,504,445 | 19.5 | % | ||||||||||||||||||
| Total | 1,895,769,261 | 100.0 | % | 2,002,020,892 | 12,584,995 | 100.0 | % | 106,251,631 | 5.6 | % | ||||||||||||||||||
Our gross profit increased by 20.5% from JPY790.4 million for the three months ended March 31, 2025 to JPY952.3 million for the three months ended March 31, 2026, along with business expansion.
4
Selling, general, and administrative expenses
Selling, general, and administrative expenses increased by JPY174.7 million, or 28.0%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The increase in selling, general, and administrative expenses was attributed to (i) an increase in outside services of JPY68.3 million ($0.4 million) due to advisory fees incurred in connection with the proposed acquisition transactions, (ii) an increase in promotion fees of JPY65.6 million ($0.4 million), primarily due to a refinement of our expense classification approach beginning in fiscal 2026, (iii) an increase in taxes and public dues of JPY23.4 million ($0.1 million) due to higher capital-based taxes in connection with our IPO, and (iv) an increase in travel expenses of JPY12.4 million ($0.1 million) incurred due to a refinement of our expense classification approach beginning in fiscal 2026.
| For the Three Months Ended March 31, | Fluctuation | |||||||||||||||||||||||||||
| 2025 | 2026 | 2026 | ||||||||||||||||||||||||||
| JPY | % | JPY | US$ | % | JPY | % | ||||||||||||||||||||||
| Salaries and welfare expenses | 210,193,850 | 33.7 | % | 222,148,114 | 1,396,455 | 27.8 | % | 11,954,264 | 5.7 | % | ||||||||||||||||||
| Outside services | 50,193,105 | 8.0 | % | 118,561,709 | 745,296 | 14.8 | % | 68,368,604 | 136.2 | % | ||||||||||||||||||
| Office rental fees | 72,703,169 | 11.6 | % | 61,428,219 | 386,147 | 7.7 | % | (11,274,950 | ) | (15.5 | )% | |||||||||||||||||
| System maintenance fees | 69,158,807 | 11.1 | % | 57,313,005 | 360,278 | 7.2 | % | (11,845,802 | ) | (17.1 | )% | |||||||||||||||||
| Commission expenses | 58,239,536 | 9.3 | % | 61,883,185 | 389,007 | 7.7 | % | 3,643,649 | 6.3 | % | ||||||||||||||||||
| Depreciation and amortization expenses | 33,078,421 | 5.3 | % | 29,860,560 | 187,708 | 3.7 | % | (3,217,861 | ) | (9.7 | )% | |||||||||||||||||
| Promotion fees | 26,747,826 | 4.3 | % | 92,344,713 | 580,492 | 11.6 | % | 65,596,887 | 245.2 | % | ||||||||||||||||||
| Travel expenses | 15,992,004 | 2.6 | % | 28,437,427 | 178,762 | 3.6 | % | 12,445,423 | 77.8 | % | ||||||||||||||||||
| Recruitment fees | 31,478,767 | 5.0 | % | 31,913,999 | 200,616 | 4.0 | % | 435,232 | 1.4 | % | ||||||||||||||||||
| Taxes and public dues | 5,970,495 | 1.0 | % | 29,377,548 | 184,671 | 3.7 | % | 23,407,053 | 392.0 | % | ||||||||||||||||||
| Office supplies | 4,076,370 | 0.7 | % | 9,282,613 | 58,352 | 1.2 | % | 5,206,243 | 127.7 | % | ||||||||||||||||||
| Entertainment expenses | 6,733,208 | 1.1 | % | 5,097,726 | 32,045 | 0.6 | % | (1,635,482 | ) | (24.3 | )% | |||||||||||||||||
| Conference fees | 5,677,949 | 0.9 | % | 11,190,979 | 70,348 | 1.4 | % | 5,513,030 | 97.1 | % | ||||||||||||||||||
| Others | 34,055,573 | 5.5 | % | 40,155,331 | 252,422 | 5.0 | % | 6,099,758 | 17.9 | % | ||||||||||||||||||
| Total | 624,299,080 | 100.0 | % | 798,995,128 | 5,022,599 | 100.0 | % | 174,696,048 | 28.0 | % | ||||||||||||||||||
Other income and expenses, net
Other income and expenses, net increased by JPY23.5 million, or 316.6%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The increase in other income and expenses, net was attributed to: (i) a decrease in the franchise income returned balance by JPY16.8 million ($0.1 million). As of March 31, 2025, the Company recognized JPY16.8 million of franchise fee refunds related to revisions to its franchise agreement terms, (ii) an increase in grant income by JPY3.9 million, and (iii) an increase in the unrealized gain on long-term investment by JPY2.7 million.
5
| For the Three Months Ended March 31, | Fluctuation | |||||||||||||||||||||||||||
| 2025 | 2026 | 2026 | ||||||||||||||||||||||||||
| JPY | % | JPY | US$ | % | JPY | % | ||||||||||||||||||||||
| Dividend income | 87,500 | (1.2 | )% | 87,500 | 550 | 0.5 | % | - | 0 | % | ||||||||||||||||||
| Grant income | 8,524,957 | (114.8 | )% | 12,400,890 | 77,954 | 77.1 | % | 3,875,933 | 45.5 | % | ||||||||||||||||||
| Loss on disposal of long-lived assets | (168,969 | ) | 2.2 | % | (4 | ) | - | - | % | 168,965 | (100.0 | )% | ||||||||||||||||
| Unrealized loss on short-term investment | (161,000 | ) | 2.1 | % | - | - | - | % | 161,000 | (100.0 | )% | |||||||||||||||||
| Unrealized gain on long-term investment | - | - | % | 2,735,074 | 17,193 | 17.0 | % | 2,735,074 | 100.0 | % | ||||||||||||||||||
| Franchise income returned | (16,803,413 | ) | 226.4 | % | - | - | - | % | 16,803,413 | (100.0 | )% | |||||||||||||||||
| Unrealized foreign exchange loss | (1,325,417 | ) | 17.9 | % | (324,095 | ) | (2,037 | ) | (2.0 | )% | 1,001,322 | (75.5 | )% | |||||||||||||||
| Other income, net | 2,423,417 | (32.6 | )% | 1,176,619 | 7,396 | 7.4 | % | (1,246,798 | ) | (51.4 | )% | |||||||||||||||||
| Total | (7,422,925 | ) | 100.0 | % | 16,075,984 | 101,056 | 100.0 | % | 23,498,909 | (316.6 | )% | |||||||||||||||||
Income tax provisions
Income tax provisions were JPY45.0 million for the three months ended March 31, 2026, as compared to income tax provision of JPY32.7 million for the three months ended March 31, 2025. Our effective tax rate for the three months ended March 31, 2025 and 2026 was 21.1% and 26.6%, respectively. The increase in our effective tax rate was primarily attributable to the non-deductible tax effect of deferred IPO costs recognized in the prior period while we were preparing for our IPO.
We had no tax obligation arising from other jurisdictions during the three months ended March 31, 2025 and 2026. During the three months ended March 31, 2025 and 2026, we had no material dispute or unresolved tax issues with the relevant tax authorities.
Net income
As a result of the foregoing reasons, we reported net income of JPY124.3 million ($0.8 million) for the three months ended March 31, 2026, as compared to net income of JPY122.5 million for the three months ended March 31, 2025.
Adjusted income from operations
As a result of the foregoing reasons, we reported adjusted income from operations of JPY167.8 million ($1.1 million) for the three months ended March 31, 2026, as compared to adjusted income from operations of JPY166.1 million for the three months ended March 31, 2025. See “Non-GAAP Financial Measures and Reconciliation” below.
6
Non-GAAP Financial Measures and Reconciliation
In our report, we discuss key financial measures that are not calculated in accordance with GAAP to supplement our unaudited interim condensed consolidated financial statements presented on a GAAP basis. This non-GAAP financial measure is reconciled from its most directly comparable financial measure determined in accordance with GAAP as follows:
| For the Three Months Ended March 31, | ||||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| JPY | JPY | US$ | ||||||||||
| INCOME FROM OPERATIONS | 166,146,066 | 153,308,100 | 963,717 | |||||||||
| Plus: acquisition-related costs(a) | - | 14,505,152 | 91,181 | |||||||||
| Adjusted INCOME FROM OPERATIONS | 166,146,066 | 167,813,252 | 1,054,898 | |||||||||
| (a) | Represents acquisition-related costs incurred in connection with our acquisition activities, including transaction-related costs, legal, financial and tax due diligence expenses, integration costs and other acquisition-related costs. These costs have been added back for normalization purposes as they are not considered reflective of our core operating performance. |
Our primary non-GAAP financial measure and corresponding metrics reflect how we evaluate our current and prior year operating results. As new events or circumstances arise, these definitions could change. When our definitions change, we provide the updated definitions. When items no longer impact our current or future presentation of non-GAAP operating results, we remove these items from our non-GAAP definitions.
Adjusted income from operations is a financial measure that is not calculated in accordance with GAAP (collectively referred to as the “non-GAAP financial measures”), and the use of the term adjusted income from operations may differ from similar measures reported by other companies and may not be comparable to other similarly titled measures. We believe the non-GAAP financial measure provides investors with useful information with respect to our historical operations. We present the non-GAAP financial measure a supplemental performance measure because we believe it facilitates a comparative assessment of our operating performance relative to our performance based on our results under GAAP, while isolating the effects of some items that vary from period to period. Specifically, adjusted income from operations allows us to assess our performance without the impact of the specifically identified items that we believe do not directly reflect our core operations, including acquisition-related costs and other items that management does not consider reflective of our core operating performance. The non-GAAP financial measure also functions as key performance indicator used to evaluate our operating performance internally, and it is used in connection with the determination of incentive compensation for management, including executive officers.
As our initial public offering was completed during the fiscal year ended December 31, 2025, and the related listing-related and transformational expenses were specific to our initial public offering and related transformation activities, we do not expect to incur such expenses in the fiscal year ending December 31, 2026 or future periods. Accordingly, beginning with the fiscal year ending December 31, 2026, we have revised our presentation of adjusted income from operations and removed listing-related and transformational expenses from the adjustments to adjusted income from operations for all historical periods presented.
Adjusted income from operations is not a measurement of our financial performance under GAAP and should not be considered in isolation or as an alternative to income from operations or any other financial statement data presented as indicators of financial performance or liquidity, each as presented in accordance with GAAP. Consequently, our non-GAAP financial measure should be considered together with our unaudited interim condensed consolidated financial statements, which are prepared in accordance with GAAP. We understand that although adjusted income from operations is frequently used by securities analysts, lenders and others in their evaluation of companies, it has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:
7
| ● | adjusted income from operations does not fully reflect our cash expenditures, future requirements for capital expenditures or contractual commitments; |
| ● | adjusted income from operations does not reflect changes in, or cash requirements for, our working capital needs; |
| ● | adjusted income from operations does not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on debt; and |
| ● | although depreciation and amortization expenses are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and adjusted income from operations does not reflect any cash requirements for such replacements. |
Because of these limitations, adjusted income from operations should not be considered as discretionary cash available to us to reinvest in the growth of our business or as measure of cash that will be available to us to meet our obligations.
Financial Guidance
Revenue is expected to be between $82.9 million and $95.7 million for the fiscal year ending December 31, 2026, an increase of approximately 10.8% to 27.9% from $74.8 million for the fiscal year ended December 31, 2025.
Income from operations is expected to be between $4.5 million and $5.4 million for the fiscal year ending December 31, 2026, an increase of approximately 13.2% to 33.9% from $4.0 million for the fiscal year ended December 31, 2025.
The guidance is based on the assumption that no business acquisitions, restructuring activities, or legal settlements will take place during the period. The convenience translations into U.S. dollars in this section are prepared using the exchange rate as of December 31, 2025 of $1 = 156.80 JPY, consistent with the disclosures in our annual report on Form 20-F dated April 8, 2026.
8
Exhibit 99.3
Q 1 FY20 2 6 I n v e s t o r P r e s entati on Le i fra s Co ., L t d . ( N as d a q : L F S) 㹺 J u ne 2 0 2 6
Th i s p r e s ent ati o n co nt a i ns f o r w a r d - l oo k i ng s t atement s t hat ref l ect o ur cur r ent ex p ect ati o ns and v i e w s o f futu r e event s , a l l o f w hich a r e s u b j ect t o r i s k s and unc e r t a i nt i e s . F o r w a r d - l oo k i ng s t atement s g i ve o ur cur r ent ex p ect ati o ns o r f o r eca s t s o f futu r e event s . Y o u can i d ent i fy t he s e s tate m ent s b y t he fact t hat t hey d o not r e l ate s t r i ct l y t o hi s t o r i cal o r cur r ent facts . Y o u can find m any ( b ut not a l l ) o f t he s e s t atement s b y t he u s e o f w o r d s s uch as “ a p p r o xi m ate s , ” “ b e l i eve s , ” “ ho p e s , ” “ ex p ect s , ” “ ant i ci p ate s , ” “ e s t i m ate s , ” “ p r o j ect s , ” “ i ntend s , ” “ p l a n s , ” “ w ill , ” “ w o uld , ” “ s hou l d , ” “ co uld , ” “ m a y ” o r o t her s i m il ar ex p r e s s i o ns i n t his p r e s ent ati o n. The s e s tate m ent s a r e li k e l y t o a d d r e s s o ur g r o w t h s t r ate g y , financial r e s ults and p r od uct and d eve l o p m ent p r og r am s . Y o u mu s t ca r eful l y co n s i d er any s uch s t atement s and s hou l d un d e r s t and t hat m any fact o r s co uld cau s e act ual r e s ults t o d i ffer f r o m o ur f o r w a r d - l oo k i ng s t atement s . The s e fact o r s m ay i nclu d e i naccur a t e a s s u mp t i o ns and a b r oad va r i et y o f o t her r i s k s and unc e r t a i nt i e s , i nclu d i ng s o m e t hat a r e k no w n and s o m e t hat a r e not. No f o r w a r d - l oo k i ng s t atement can b e g ua r ant eed and act ual futu r e r e s ults m ay va r y m ater i a l l y . F act o r s t hat co uld cau s e act ual r e s ults t o d i ffer f r o m t ho s e d i s cu ss ed i n t he f o r w a r d - l oo k i ng s t atement s i nclu d e, b ut a r e not li m i t ed t o : a s s um p t i o ns a b o ut o ur futu r e financial and o p e r ating r e s ult s , i n clu d i ng r evenue, i ncome, ex p en d i t u r e s , ca s h b a l ance s , and o t her financial i t em s ; o ur a b ili t y t o ex ecut e o ur g r o w t h, and ex p an s i o n, i nclu d i ng o ur a b ili t y t o m eet o ur go a l s ; cur r ent and futu r e eco nom i c and p o li t i cal co n d i t i o n s ; o ur ca p i t al r eq ui r em ent s and o ur a b ili t y t o r a i s e any a d d i t i o nal fi n a nc i ng w h i ch w e m a y r eq u i re; o ur a b ili t y t o att r a ct cu s t om e r s a nd fu r t her en ha nce o ur b r a nd r eco g n i t i o n; o ur a b ili t y t o h i r e a nd r eta i n q u a li fi ed mana g ement p e r s o nn e l a nd k ey em p l o y e e s i n o r d er t o en a b l e us t o d eve l o p o ur b u s i ne s s ; t r en d s and co m p et i t i o n i n t he s p o r t s i n s t r uct i o n s e r v i ces i n d u s t r y and t he s o ci a l s u p p o r t s e r v i c e s i n d u s t r y ; and o t her a s s um p t i o ns d e s c r i bed i n t his p r e s ent ati o n un d e r l y i ng o r r e l ating t o any f o r w a r d - l oo k i ng s t atement s . W e d e s c r i b e ce r t a i n m ater i al r i s k s , unc e r t a i nt i es and a s s u m p t i o ns t hat co uld affect o ur b u s i ne s s , i nclu d i ng o ur financial co n d i t i o n and r e s ults o f o p e r ati on s , un d er “R i s k F act o r s ” i n o ur annual r epo r t o n F o r m 2 0 - F ( t he “ A nnu al Re p o r t ” ) fi l ed w i t h t he U. S . S ecu r i t i es and Ex chang e C o mm i ss i o n ( t he “ S E C ” ). W e b a s e o ur f o r w a r d - l oo k i ng s t atemen t s o n o ur m ana g em ent ’ s b e l i efs and a s s um p t i o ns b a s ed o n i nfo r m ati o n av a il a b l e t o o ur m ana g em ent at t he t i m e t he s tate m ent s a r e m a d e. W e caut i o n y o u t hat act ual o ut co m es and r e s ults m a y , and a r e li k e l y t o , d i ffer m ater i a l l y f r o m w hat i s ex p r e s s ed , i mp li ed o r f o r eca s t b y o ur f o r w a r d - l oo k i ng s t atement s . A cco r d i n g l y , y o u s hou l d b e ca reful a b o ut r e l y i ng o n any f o r w a r d - l oo k i ng s t atement s . Ex cept as r eq uir ed un d er t he fed e r al s ecu r i t i es l aws , w e d o not have any i nt ent i o n o r o b li g ati o n t o u p d ate p u b li cly any f o r w a r d - l oo k i ng s t atement s aft er t he d i s t r i b ut i o n o f t his p r e s ent ati o n, w het her as a r e s ult o f new i nfo r m ati o n, futu r e event s , changes i n a s s um p t i o n s , o r o the r w i s e. The f o r w a r d - l oo k i ng s t atement s m a d e i n t his p r e s ent ati o n r e l ate o nly t o events o r i nfo r m ati o n as o f t he d ate o n w hich t he s tate m ent s a r e m a d e i n t his p r e s ent ati o n. Ex cept as r eq ui r ed b y l aw , w e un d e r t ak e no o b li g ati o n t o u p d ate o r rev i s e p u b li cly any f o r w a r d - l oo k i ng s t atement s , w het her as a r e s ult o f new i nfo r m ati o n, futu r e event s , o r o the r w i s e, aft er t he d ate o n w hich t he s t atement s a r e m a d e o r t o ref l ect t he o ccur r ence o f unant i ci p ated event s . Y o u s hou l d r ead t his p r e s ent ati o n, a l ong w i t h t he A nnu al Re p o r t and t he do cu m ent s t hat a r e fi l ed as ex hib i t s t o t he Re g i s t r a t io n S t atement , ca r eful l y and w i t h t he un d e r s t an d i ng t hat o ur act ual futu r e r e s ults m ay d i ffer m ater i a l l y f r o m w hat w e cur r ent l y ex p ect . Fo r w ar d - L o o k in g S ta t e m ents 1 C o p yr i g h t 202 6 L EI F R A S C O ., L T D . T he r e i s n o gu ar a n t e e th at a n y s pe c if i c o ut c o m e w il l be ac h i e v e d. I n v e s tm e n t s m ay be s pe c u lati v e , ill iq u i d a n d th e r e i s a r i s k o f lo s s . P ast pe r f o r m a n c e i s n o t in d i ca t iv e o f f u tu r e r e s u lt s .
IND EX Com p an y Pr o fi l e E x e c uti v e Summa r y Q 1 FY2026 Con s ol i da t ed Financ i a l R e s ults Pr o g r e s s o f th e G r owt h S t r a t e g y Con s ol i da t ed Financ i a l P o s it i on Capital A l lo cation 202 6 Fu l l Y ear C o n s o l i d a t ed F i nan c ia l Fo r e c a s t Ap p en d ix G r owt h St r ategy Ca pita l All ocation Refe renc e Materia ls 2 C o p yr i g h t 202 6 L EI F R A S C O ., L T D . T he r e i s n o gu ar a n t e e th at a n y s pe c if i c o ut c o m e w il l be ac h i e v e d. I n v e s tm e n t s m ay be s pe c u lati v e , ill iq u i d a n d th e r e i s a r i s k o f lo s s . P ast pe r f o r m a n c e i s n o t in d i ca t iv e o f f u tu r e r e s u lt s .
IND EX Com p an y Pr o fi l e 2. E x e c uti v e Summa r y 3. Q 1 FY2026 Con s ol i da t ed Financ i a l R e s ults 4. Pr o g r e s s o f th e G r owt h S t r a t e g y 5. Con s ol i da t ed Financ i a l P o s it i on 6. Capital A l lo cation 7. 202 6 Fu l l - Y ear C o n s o l i d a t ed F i nan c ia l Fo r e c a s t 8. Ap p en d ix • G r owt h St r ategy • Ca pita l All ocation • Refe renc e Materia ls 3 C o p yr i g h t 202 6 L EI F R A S C O ., L T D . T he r e i s n o gu ar a n t e e th at a n y s pe c if i c o ut c o m e w il l be ac h i e v e d. I n v e s tm e n t s m ay be s pe c u lati v e , ill iq u i d a n d th e r e i s a r i s k o f lo s s . P ast pe r f o r m a n c e i s n o t in d i ca t iv e o f f u tu r e r e s u lt s .
Co rpo r a t e Phil o sophy / H i s t o r y 㸰㸮㸮 0 㹼 㸰㸮㸮㸳 㹼 㸰㸮㸯 㸮 㹼 201 5 㹼 㸰㸮㸰㸮 㹼 F o und e d i n 2001 St a rt e d s po rts sc hoo l bu s ines s F Y20 05 10 ,00 0 m e m bers FY2 009 20,0 00 m e m bers F Y20 12 30,000 m e m bers m e m bers FY2 014 40,0 00 m e m bers FY2 013 Sta rt e d Sc ho o l cl ub s uppo rt bus i n e s s FY2 023 60,0 00 m e m bers FY2 024 70,000 mem b e rs F Y20 20 L a rge - sca l e c lub a c tivity pr o j e c t c o ntra c t (N a g o ya C ity e l e m e nt a ry sc ho o l) F Y20 21 50,000 W i t h t h e cor po r a t e phi l os o ph y o f " T o change an d desig n spo r t s ,“ w e pr a ctice " spo r t s a n d soc i a l bus i ness" t o a d d r ess v a r i o us soc i a l iss u es t h r o u g h spo r ts. Ra nk e d N o . 1 i n J a pan a cro s s 4 m a jor c a t e g o r i e s R ecord H i g h ※ 1 74,798 tho u sand U SD 㸦 F Y 㸰㸮㸰㸳 㸧 T he US D amo unt i s ba s e d on 25Q 4 F X r a t e 㻃 156 . 80 = $1 . 00 . ※ 1:P e r f o r m an c e c om p a ri s o n f o r t h e s a me pe r io d f r o m F Y 23 o n w a r d s ( U S G AA P) 4 C o p yr i g h t 202 6 L EI F R A S C O ., L T D . T he r e i s n o gu ar a n t e e th at a n y s pe c if i c o ut c o m e w il l be ac h i e v e d. I n v e s tm e n t s m ay be s pe c u lati v e , ill iq u i d a n d th e r e i s a r i s k o f lo s s . P ast pe r f o r m a n c e i s n o t in d i ca t iv e o f f u tu r e r e s u lt s .
Bus i ness M o del W e o p er a t e o u r bu s i n ess i n t w o segments: "Sp o r t s Schoo l Bus i ness " a n d "So ci a l Bus i ness ." Sp or t s S choo l Bu s i ness S oci a l Bu s i ness ● Se r v i ce detai l s W e prov i de a un i que sp orts servi c e that c u l t i vates the " no n - c ogn i t i ve skil l s " that are e m phasized i n m odern e du c at i on. B ased on our t e a c h i ng ph i losophy of ”a c kno w l e d g e, praise , en c ourage, and mot iv ate," w e of fer a tra i n i ng program that in t e grat e s p hy si c al and me ntal g ro w th, fo c us i ng not only on d ev e lop i ng sport s skil l s, but a l s o on gre e t in gs, e t i q ue t t e , le adersh i p, c ooperat i on, sel f - managem en t , and prob l e m - solv i ng skil l s. ● R e v e n u e s o u rces ࣭ Sc hool fees (month l y fee, e nrol l me nt fee, annual fee) ࣭ E vent p art i c ip at i on fee ● Se r v i ce detai l s O ur soc ia l b us i ness c onsis t s of t w o mai n ty pes of p roje c ts: the " Sc hool Clu b Suppor t " and " A fte r - Sc hool D a y c are Servi c es .“ O ur c lu b a c t i v i t i es pro j e c t w ork s i n c ol l abora t i on w i t h lo c al gov e rn m en t s and s c hools and in vol v es c oach in g and runn i ng c lu b a c t i v i t i es pr i mari l y at e le me ntary and j un i or h i gh s c hools. O ur af t e r - s c ho o l day c are servi c es pro je c t sup p o rts the independenc e of c h i l d ren w i t h d e ve l opm e ntal d isab i l i t i es th r ough sports. ● R e v e n u e so u rces M ain l y bus i ness outsour c in g c ontra c t fees ● Sa l es ra ti o ● Sa l es r a ti o 27 㸣 㸦 FY 㸰㸮㸰㸳 㸧 㸵 3 㸣 㸦 FY 㸰㸮㸰㸳 㸧 Co m p ared t o F Y 2023 㸩 3 㸣 㸦 FY 㸰㸮 㸰 㸱 㸸 㸰 㸲 㸣㸧 5 C o p yr i g h t 202 6 L EI F R A S C O ., L T D . T he r e i s n o gu ar a n t e e th at a n y s pe c if i c o ut c o m e w il l be ac h i e v e d. I n v e s tm e n t s m ay be s pe c u lati v e , ill iq u i d a n d th e r e i s a r i s k o f lo s s . P ast pe r f o r m a n c e i s n o t in d i ca t iv e o f f u tu r e r e s u lt s .
Bus i ness Season a l ity Ou r business ' s p r o f i t s t ructu r e i s h e avi l y w eigh t ed t o w a r d s t h e second hal f o f t h e y e a r , w i t h t h e majo r it y o f p r o fit s bei n g r eco r de d i n t h e second h a l f . S ea s o nality o f s p o r t s s c h oo l b us i ne s s • Memb e r s h i p numbe r s t e mp o ra rily de c r e a s e a r o un d Ma r ch, coin c i din g w ith s ch o o l gr ad u atio n s e a s o n . • T h e n , th e y inc r e a s e again f r o m A pr i l t o J u n e , coin c i din g w it h th e s ta r t o f th e n e w s ch o o l y e a r . • E v e n t r e v e nu e peaks i n Ma r ch an d A u gu s t, an d dur in g s ch o o l h o li days f r o m De c e mbe r t o J anu a r y . S ea s o nality o f s o c i a l b us i ne s s • Som e co n tr acts w it h go v e r n me n t agen c i e s in v o l v e p ay me n ts be i n g mad e in Ma r c h , w h ic h in t r o du c es s e a s o n ality in t o th e ca s h f l o w . * F o r your r e f e r en c e : F o r m o re d e t a il e d inf or m a t i o n, ple a s e r e f e r to the " T r e nd Inf o r m a t i o n" se c tion with i n the " M an a g e m e nt's Di sc us s i o n and A na l y s i s o f F ina n c ia l C o ndition and R e sul ts o f O per a tions" in the C o m pany’s R e p o rt o f F o r e ign P riv a t e I s su e r o n F o rm 6 - K. 54 33 68 341 487 559 4,227 4,773 5,489 5,07 7 5,556 6,24 0 Rev e n u e Inco m e f r o m ope r a tions 6 C o p yr i g h t 202 6 L EI F R A S C O ., L T D . T he r e i s n o gu ar a n t e e th at a n y s pe c if i c o ut c o m e w il l be ac h i e v e d. I n v e s tm e n t s m ay be s pe c u lati v e , ill iq u i d a n d th e r e i s a r i s k o f lo s s . P ast pe r f o r m a n c e i s n o t in d i ca t iv e o f f u tu r e r e s u lt s . ( m illi on y e n ) ( m illi on y e n ) FY 23 f i r s t h alf FY 23 s e con d h alf FY 24 f i r s t h alf FY 24 s e con d h alf FY 25 f i r s t h alf FY 25 s e con d h alf FY25 FY25 FY24 FY24 FY23 FY23 s e cond h alf f i r s t h alf s e cond h alf f i r s t h alf s e cond h alf f i r s t h alf
IN D E X 1 . Com p an y Pr o fi l e E x e c uti v e Summa r y 3. Q 1 FY2026 Con s ol i da t ed Financ i a l R e s ults 4. Pr o g r e s s o f th e G r owt h S t r a t e g y 5. Con s ol i da t ed Financ i a l P o s it i on 6. Capital A l lo cation 7. 202 6 Fu l l - Y ear C o n s o l i d a t ed F i nan c ia l Fo r e c a s t 8. Ap p en d ix • G r owt h S tr a t egy • Ca p i t a l A l l oca t ion • R efe r e n ce Ma t e r i a ls 7 C o p yr i g h t 202 6 L EI F R A S C O ., L T D . T he r e i s n o gu ar a n t e e th at a n y s pe c if i c o ut c o m e w il l be ac h i e v e d. I n v e s tm e n t s m ay be s pe c u lati v e , ill iq u i d a n d th e r e i s a r i s k o f lo s s . P ast pe r f o r m a n c e i s n o t in d i ca t iv e o f f u tu r e r e s u lt s .
770 782 F Y25 Q 1 F Y26 Q 1 1 , 044 964 F Y25 Q 1 F Y26 Q 1 1 6, 886 1 8, 571 F Y2 5 Q 1 F Y2 6 Q 1 62, 495 60,9 60 F Y25 Q 1 F Y26 Q 1 1 , 971 2, 1 20 F Y25 Q 1 F Y26 Q 1 *1 : Comp a r i s on of p e r fo r m a nc e ov e r the s a m e p e r io d f r om Q 1 F Y 2 5 on w a r ds ( US G AA P ) * 2 : A d j u s t e d op e r a t in g p r of i t : I n t r oduc e d a s a p e r fo r m a nc e m a na g e me nt i n d ic a t or r e p r e s e n t in g t he p r of i t a bi l i t y of t he core bu s i nes s . A d j u s t e d op e r a t in g p r of i t = I nc ome f r om op e r a t ion s + A c quis i t io n - r e l a t e d c os t ( i n t h o u san ds of U SD ) Ne t income Spo r t s s cho o l membe r s Co n tr a c t ed club a ct ivi t ies R e c o r d hig h ※ 㸯 2. 5 㸣 Y oY 7. 6 㸣 Y oY ( i n t h o u san ds of U SD ) ( i n t h o u san ds of U SD ) ( i n t h o u san ds of U SD ) ( m e mb e rs ) Fin a n ci a l H i ghl i gh t s R eco r d hig h n et r eve n u e a n d n et i n come d r i v en b y th e g r owt h o f ou r cl u b a ctivit ie s an d s p o r t s sc h o o l b u si n es s es. A dj u s t ed income R e c o r d hig h ※ Ne t r eve n u e I n come f r o m o p erat io n s f r o m o p erat io n s ※ 㸰 10 0 㸣 7. 7 㸣 Y o Y Y oY R e c o r d hig h ※ (c lu bs ) US D fi gu r e s a r e ba s e d on J P Y t o US D ¥ 159 . 08 = $1 . 0 0 1. 0 㸣 + 5 㸣 Y oY R e c o r d hig h ※ 8 C o p yr i g h t 202 6 L EI F R A S C O ., L T D . T he r e i s n o gu ar a n t e e th at a n y s pe c if i c o ut c o m e w il l be ac h i e v e d. I n v e s tm e n t s m ay be s pe c u lati v e , ill iq u i d a n d th e r e i s a r i s k o f lo s s . P ast pe r f o r m a n c e i s n o t in d i ca t iv e o f f u tu r e r e s u lt s . 1 , 055 Y oY 1 , 044 F Y26 Q 1 F Y25 Q 1
Fin a n ci a l H i ghl i gh t s | Suppl e m enta r y Exp l a n ati o n | Dec r ease i n Sc h o o l M e m be r ship ( Y oY) Im p ac t ed b y school gra d ua t i o ns an d a stra t egic shi f t i n cus t ome r acqu i siti o n timin g t o enhance se r vice qua l i t y . N ev e r theles s , th e u n de r l y i n g bu s ines s fo u n d a ti o n i s s t e a d i l y str en gthe n i n g. Main f a c t o r s I n c r ea s e i n " grad u a ti n g membe r s " d u e t o membe r s r ea ching hi ghe r grades. • A s t he num b e r o f m e m b e r s inc r e ases i n t he u p p e r g r ad e s o f e l e m e nta r y schoo l , th e nu mber o f graduat e d m e mbe r s ( m e mbe r s who r e main e d e n rol l e d un ti l th e 6t h grad e o f e l e m e n ta r y s chool an d graduate i n M arch ) has i n crea s e d com p ar e d t o th e prev i ou s y e a r . * M any of our 6 th - grade e l e m en t ary s c hool memb ers grad uate fro m ( w i t hdraw fro m ) the s c hool i n M arc h, w h ic h i s the e l e m en t ary s c hool grad u at i on season. A s tr a t egic s hi f t i n th e " n ew cus t ome r a cqu i s i t io n ti mi n g " a i m ed a t i mp r ovi n g s e r vice q u a l i t y . • In lin e with s t r e ng t h e nin g n e w em p l o y e e t rain i ng, w e are s trate g i cal l y s hi f tin g custom e r acqui s i ti o n ti m i n g. • A s a r e sul t , t he num b e r o f n e w c lasse s o p e nin g i n M arc h decr e a s e d , l e ad i n g t o a y e a r - on - y e a r decr e a s e i n e n rol l m e n t. • T his i s n o t a r e sp o nse t o d e clin i ng d e mand , b ut r at h e r a s trate g i c m e a s u re t o e n s u re s e r v i ce qual i t y . * I n Japan, m ost n ew e m p l oy e e s j o i n t h e i r c o m pan i es i n A p r il . On e fr a n chis e a g r eement w as t ermi n a t ed. • T he t e r minatio n o f o n e f r anchise l o ca t i o n r e sul t e d i n a d e c r e ase i n t he num b e r o f m e m b e r s. R e v enue i n c r eased du e t o higher mont h l y f ees, despi t e a sli gh t dec r ease i n m e m be rship. I n t ensi f y i ng M&A ac t iv i tie s t o ensure sus t a i n ab l e g r o w t h . 9 C o p yr i g h t 202 6 L EI F R A S C O ., L T D . T he r e i s n o gu ar a n t e e th at a n y s pe c if i c o ut c o m e w il l be ac h i e v e d. I n v e s tm e n t s m ay be s pe c u lati v e , ill iq u i d a n d th e r e i s a r i s k o f lo s s . P ast pe r f o r m a n c e i s n o t in d i ca t iv e o f f u tu r e r e s u lt s .
K ey T op i cs o f Q 1 FY2 0 26 S t eady p r ogr ess achie v ed ac r os s k ey g r o w t h pi l l a r s: Social Business , Spo r t s Sc h o o l Business , an d M& A . 01 Socia l b u siness Spo rts Sc ho o l b u siness M& A • [Scho o l C l u b A ct i v i ti es B u s i n ess ] W e e xec u te d co n tr a cts w i t h 24 m un i c i p al i ti es an d 7 pri v a t e scho o l s n a t i o n w i de , p r ov i di n g a stro n g f o un d a ti on f o r re v e n u e ge n erati o n i n Q 2 an d be y o n d . N e w : 5 ( i ncluding 3 i n s p e ci al w a r ds and o r dinanc e - de s ig n a t ed ci ti e s ) Ex i s ting o n goin g: 19 • [ A f te r - scho o l D a y car e S e r v i ce ] W e ope n ed n i n e n ew b u s i n ess l ocatio ns, repr ese n ti n g a 45 % i n crea se com p a r ed t o th e prev i o u s yea r . N u mbe r o f e s tab li s h me n ts i n FY2026 : 2 9 e s tab li s h me n ts ( c o m p a r e d t o th e s ame period la s t y e a r : + 9 e s tab li s h me n ts + 45 . 0 %) • FY 26 Q 1 sale s i n crea sed steadi l y Y o Y , d r i v en b y n ew c l u b activ i t y co n tr a cts acqu i red i n FY 202 5 . Sa l e s : $5 .0 mi l li o n ( Y oY: + 24 .1 %) • T hro u g h M& A ( T oka i Spo r t s C o. , L td.) , appr o x i m a t e l y 1 ,2 00 m em be r s o f th e spo r t s scho o l w ere acqu i red. T ra n s fe r o f ap p r o xima t e l y 1 ,2 00 s p o r ts s ch o o l me mbe r s an d g y mn a s ti c s c l a s s e s at app r o xima t e l y 2 0 a f f i li a t e d kin de r ga r t e n s an d day c a r e c e n t e r s ( r e f l e c t e d f r o m Q 2) • I n crea sed un i t price s l ed t o i m pro v ed L i f e t i m e V al u e (“ L TV ” ) an d FY 26 Q 1 re v e n u e progr essed sm ooth l y . Sal e s : $13 .6 m illi o n ( Y o Y: + 5 . 6 %) • S trategi c M &A o f thre e com p an i es t o create sy n erg i es wi t h o u r c o re b u s i n es s . 1. W e l l R e s o u r ce Co ., L t d. : A f t e r - s ch o o l day ca r e s e r vi c e b u sine s s e s ( 4 locati o n s ) (do mi nan t e x p an s io n i n th e T o h o ku a r e a) 2. T o ka i Sp o r ts Co ., L t d. : A pp r o xima t e l y 1 ,2 00 me mbe r s an d p r e v e n t th e los s o f o lde r s tu dent s 10 C o p yr i g h t 202 6 L EI F R A S C O ., L T D . T he r e i s n o gu ar a n t e e th at a n y s pe c if i c o ut c o m e w il l be ac h i e v e d. I n v e s tm e n t s m ay be s pe c u lati v e , ill iq u i d a n d th e r e i s a r i s k o f lo s s . P ast pe r f o r m a n c e i s n o t in d i ca t iv e o f f u tu r e r e s u lt s . 0 2 03
IND EX 1. Com p an y Pr o fi l e 2. E x e c uti v e Summa r y Q 1 FY2026 Con s ol i da t ed Financ i a l R e s ults 4. Pr o g r e s s o f th e G r owt h S t r a t e g y 5. Con s ol i da t ed Financ i a l P o s it i on 6. Capital A l lo cation 7. 202 6 Fu l l - Y ear C o n s o l i d a t ed F i nan c ia l Fo r e c a s t 8. Ap p en d ix • G r owt h St r ategy • Ca pita l All ocation • Refe renc e Materia ls 11 C o p yr i g h t 202 6 L EI F R A S C O ., L T D . T he r e i s n o gu ar a n t e e th at a n y s pe c if i c o ut c o m e w il l be ac h i e v e d. I n v e s tm e n t s m ay be s pe c u lati v e , ill iq u i d a n d th e r e i s a r i s k o f lo s s . P ast pe r f o r m a n c e i s n o t in d i ca t iv e o f f u tu r e r e s u lt s .
Co nso l i d a t ed P/ L Highl i gh t s Ne t r e v enu e , A d ju s t ed inc om e f r o m operat i on s * 2 , and N et i n co m e r ea c he d r e c o r d hi g h s * 1 . ( i n t h o u s a n d s o f US D ) FY 㸰 5 Q1 F Y 㸰 6 Q1 Y oY change Y oY cha n g e % Net r e v e nu e 16 ,886 18 , 571 1 , 685 10 . 0% Gro ss pr o f i t 4,969 5, 986 1 , 01 7 20 . 5% Inco me f r o m o pe r at i o ns 1,044 964 - 80 - 7. 7% O pe r at i n g pr o f i t mar g i n 6.2% 5. 2% - - 1 . 0% Net i nc o me 770 782 12 1. 5% Ad j usted i nc o me f r o m o pe r at i o n s *2 1,044 1 , 055 11 1 . 0% US D fi gu r e s a r e ba s e d on J P Y t o US D ¥ 159 . 08 = $1 . 0 0 R e cor d H i g h * 㸯 R e cor d H i g h * 㸯 R e cor d H i g h * 㸯 * 1 : P e r fo r m a nc e com p a r i s o n for t h e s a me p e r iod f r o m Q 1 FY2 5 onw a r d s ( US GAAP) *2: A d ju s t e d Income f r o m O p e r a t ions : In tr o d uc e d a s a p e r fo r m a nc e m a n a g e m e n t in d ic a t o r r e p r e s e n t ing t h e p r ofi t ab i l i t y o f t h e co r e b u s ine ss . A d ju s t e d income f r o m o p e r a t ions = Income f r o m o p e r a t ions + Ac q ui s i tio n - r e l a t e d co s t R e cor d H i g h * 㸯 12 C o p yr i g h t 202 6 L EI F R A S C O ., L T D . T he r e i s n o gu ar a n t e e th at a n y s pe c if i c o ut c o m e w il l be ac h i e v e d. I n v e s tm e n t s m ay be s pe c u lati v e , ill iq u i d a n d th e r e i s a r i s k o f lo s s . P ast pe r f o r m a n c e i s n o t in d i ca t iv e o f f u tu r e r e s u lt s .
A d j us t ed inc o me f r o m o per a tio n s A d j us t ed inc o me f r o m ope r ati o ns* w a s 1,05 5 t h o u sa n d U S D , up 1.0 % Y o Y . Bui l d i n g a st r o n g f o u nd a tio n fo r t h e next qua r t er a n d be y o n d. F Y 2 㸴 Q1 F Y 2 㸳 Q1 Ad justed o p e r a tions 1 . 0 㸣 Y o Y A cq u i s i ti o n - re l a t ed costs FY 2 㸴 Q1 A dj u sted I n c o me f rom operatio ns 1 , 044 13 C o p yr i g h t 202 6 L EI F R A S C O ., L T D . T he r e i s n o gu ar a n t e e th at a n y s pe c if i c o ut c o m e w il l be ac h i e v e d. I n v e s tm e n t s m ay be s pe c u lati v e , ill iq u i d a n d th e r e i s a r i s k o f lo s s . P ast pe r f o r m a n c e i s n o t in d i ca t iv e o f f u tu r e r e s u lt s . 964 91 1 , 055 FY 25 Q1 I n com e from operatio ns FY 26 Q1 I n com e from operatio ns ( i n t h o u san ds of U SD ) ( i n t h o u san ds of U SD ) US D fi gu r e s a r e ba s e d on J P Y t o US D ¥ 159 . 08 = $1 . 0 0 *: A d ju s t e d Income f r o m O p e r a t ions : In tr o d uc e d a s a p e r fo r m a nc e m a n a g e m e n t in d ic a t o r r e p r e s e n t ing t h e p r ofi t ab i l i t y o f t h e c o r e b u s ine ss . A d ju s t e d income f r o m o p e r a t ions = Income f r o m o p e r a t ions + Ac q ui s i tio n - r e l a t e d co s t s
Seg m ent sum m a r y r ea c hin g r e c o r d hi g h s . S p o r t s s cho o l b u s ines s S o c i a l b us i ne s s S ta b l e gro w t h thro u g h i n cr e as ed L T V d ue t o hig h er u n i t p r i ces . Ne t r eve n u e H i g h gro w t h cont i nu e s du e t o a s i gn i f i can t i nc r e as e i n th e n u m b er o f cl ub act i v i t y cont racts. 12,878 13,597 FY25Q 1 FY26Q1 *1 : Comp a r i s on of p e r fo r m a nc e ov e r the s a m e p e r io d f r om Q 1 F Y 2 5 on w a r ds ( US G AA P ) + 5. 6 % YoY Ne t r eve n u e 4,008 4,975 FY25Q1 FY26Q1 + 24. 1 % YoY Bot h t h e "Spo r t s Sc h oo l Bu s ine s s " an d th e "Soc i a l Bu s ine s s " a r e g r ow i ng s t ea d i l y , R e c o r d hig h ※ R e c o r d hig h ※ ( i n t h o u san ds of U SD ) 14 C o p yr i g h t 202 6 L EI F R A S C O ., L T D . T he r e i s n o gu ar a n t e e th at a n y s pe c if i c o ut c o m e w il l be ac h i e v e d. I n v e s tm e n t s m ay be s pe c u lati v e , ill iq u i d a n d th e r e i s a r i s k o f lo s s . P ast pe r f o r m a n c e i s n o t in d i ca t iv e o f f u tu r e r e s u lt s . ( i n t h o u san ds of U SD ) US D fi gu r e s a r e ba s e d on J P Y t o US D ¥ 159 . 08 = $1 . 0 0
IND EX 1. Com p an y Pr o fi l e 2. E x e c uti v e Summa r y 3. Q 1 FY2026 Con s ol i da t ed Financ i a l R e s ults Pr o g r e s s o f th e G r owt h S t r a t e g y 5. Con s ol i da t ed Financ i a l P o s it i on 6. Capital A l lo cation 7. 202 6 Fu l l - Y ear C o n s o l i d a t ed F i nan c ia l Fo r e c a s t 8. Ap p en d ix • G r owt h St r ategy • Ca pita l All ocation • Refe renc e Materia ls 15 C o p yr i g h t 202 6 L EI F R A S C O ., L T D . T he r e i s n o gu ar a n t e e th at a n y s pe c if i c o ut c o m e w il l be ac h i e v e d. I n v e s tm e n t s m ay be s pe c u lati v e , ill iq u i d a n d th e r e i s a r i s k o f lo s s . P ast pe r f o r m a n c e i s n o t in d i ca t iv e o f f u tu r e r e s u lt s .
4,008 4,974 FY25Q1 FY26Q1 P r o g r ess o f Soci a l Bus i ness I Bot h t h e “ sch o ol club su pp o r t se r vic e ” an d “a f t e r - sc hool da y ca r e s e r vice” a r e sc al i ng a s plann e d . Sales h a v e inc r ea s ed s i gn i fi cantl y . T o p ic s Ne t r eve n u e S chool c l u b s u ppo r t s e r v i ce ඹ S e c u r ed Q2 + r e v enue s t r ea m s v i a co n t r ac t s w i t h 2 4 loca l g o v ern m e n t s an d 7 p r i v a t e s c h oo l s . N e w B u s ine ss De v e lopm e n t ( 5 cases): Secu r e d "larg e - s cale proj e cts " i n s p e cial w a rds an d d e signa t e d c i tie s . 3 o f 5 new co n tr acts awa r ded i n s pe c ia l w a r d s /de s ig n a t e d c i ti e s . Ph a s e 2 G r o w th S tr a t e gy ( s ca l in g t o majo r mu n ic i p alit i e s ) i s p r o g r e ss in g s m o o th l y . E x i s ting Cu s tome r s ( 19 ca s e s ): Achi e v e d an e x tre m e l y hi gh r e p e at rate and "incre a s e d un i t pri c e ". Ma in t ain e d a s t r o n g cus t o me r b a s e w it h a 100 % rete n ti o n ra t e . ය T h r o ugh M & A (W e l l R e s o u r ce Co. , L td .), w e ac q uir ed " 4 b u s i ne ss l o c a ti o n s ". T w o n e w s e r vi c e s , " FL E I " for m o t o r l e ar n in g s u ppo r t an d " I LFE " for in d e pen dent l e ar n in g s u ppo r t, h a v e be e n add e d. ර M & A , w e o pene d ni ne new b us i ne s s loc at io n s , r e sulting i n a 45 % i ncrea s e Y o Y . N u mbe r o f b u sine s s e s ra pidly e x p an ded f r o m 2 0 t o 29 , a 45 % inc r e a s e com p a r e d t o th e p r e vio u s y e a r . + 2 4 . 1 % YoY A f t e r - s chool day care s e r v i ce R e c o r d hig h ※ 㸯 US D fi gu r e s a r e ba s e d on J P Y t o US D ¥ 159 . 08 = $1 . 0 0 16 C o p yr i g h t 202 6 L EI F R A S C O ., L T D . T he r e i s n o gu ar a n t e e th at a n y s pe c if i c o ut c o m e w il l be ac h i e v e d. I n v e s tm e n t s m ay be s pe c u lati v e , ill iq u i d a n d th e r e i s a r i s k o f lo s s . P ast pe r f o r m a n c e i s n o t in d i ca t iv e o f f u tu r e r e s u lt s . ( i n t h o u san ds of U SD )
Social Busines s Pr ogr ess I I | Sc h o o l Cl ub S uppo r t : Mun ic i p a l i tie s an d Sc h o o l s U nder Contract W e ha v e s i gn e d c ontr acts w i t h 2 4 muni c i p al i ti e s an d 7 p ri v a t e jun i o r hig h sc hools nationw i d e , s e c uring r e v enue st r eams fo r Q 2 an d be y ond. 17 C o p yr i g h t 202 6 L EI F R A S C O ., L T D . T he r e i s n o gu ar a n t e e th at a n y s pe c if i c o ut c o m e w il l be ac h i e v e d. I n v e s tm e n t s m ay be s pe c u lati v e , ill iq u i d a n d th e r e i s a r i s k o f lo s s . P ast pe r f o r m a n c e i s n o t in d i ca t iv e o f f u tu r e r e s u lt s .
S ocia l B u s in e s s Pr o g r e s s III | A f t e r - S choo l D ayca r e S e r vice s : F acilit y Map Inc l u d i n g M & A , w e o p e n ed n i ne n e w o ff i c e s , e x p and i n g ou r bus i n e s s t o a t ota l o f 2 9 o ffi c es nation w i d e. 18 C o p yr i g h t 202 6 L EI F R A S C O ., L T D . T he r e i s n o gu ar a n t e e th at a n y s pe c if i c o ut c o m e w il l be ac h i e v e d. I n v e s tm e n t s m ay be s pe c u lati v e , ill iq u i d a n d th e r e i s a r i s k o f lo s s . P ast pe r f o r m a n c e i s n o t in d i ca t iv e o f f u tu r e r e s u lt s .
12,878 13,597 FY25Q1 FY26Q1 ( i n t h o u san ds of U SD ) Pr ogr ess o f t h e Spo r t s Sc h o o l Business Ne t r e v enue inc r ea s ed r e s ult i ng f r o m highe r un i t p ri c e s . T h e g r owt h st r a t e g y aim e d a t e x p and i ng ma r k et s h a r e i s p r og r e s s i ng smo o t h l y . A c q uir ed a p p r o x . 1,2 0 0 s p o r t s s c h oo l m embe rs thr o ugh t h e M & A o f T o k a i S p o r t s Co ., L td . W e acqu i r e d th e gy m n a s ti c s c l a s s e s b u sine s s at ap p r o x i ma t e l y 2 0 a f f i li a t e d kin de r ga r t e n s an d day c a r e c e n t e r s , w h ic h cur r e n tly h a v e ap p r o xima t e l y 1, 200 s ch o o l me mbe r s . H i g h er unit p r ic es im p r o v ed L T V , d r i v in g s t ea d y FY26 Q 1 s ale s g r o wt h Y o Y . Sal e s : $ 1 3 .6 m i l l io n ( Y o Y : + 5. 6 %) W e ha v e s i g ned a n all ianc e ag r e e m e nt w i t h B l au b l i t z A k it a an d o p en e d a co l l a b o r a t i v e s c h oo l. W e op ened a col l abo rati v e s cho o l i n O da t e Cit y , Ak it a P r e f e ctu r e . T his comp l e t e s o u r e x p ans i on t o 4 6 p r e f e ctu r e s n atio n w ide . W e ha v e launch e d a new b r and , " L - S p o ". W e a r e o pen in g a n e w br an d ( m u lt i - s p o r ts s ch o o l) aim e d at attra ct i n g y o un ger child r e n an d th o s e w it h li gh t ne ed s . T o p ic s Ne t r eve n u e + 5. 6 % YoY ඹ ය ර R e c o r d hig h ※ 㸯 19 C o p yr i g h t 202 6 L EI F R A S C O ., L T D . T he r e i s n o gu ar a n t e e th at a n y s pe c if i c o ut c o m e w il l be ac h i e v e d. I n v e s tm e n t s m ay be s pe c u lati v e , ill iq u i d a n d th e r e i s a r i s k o f lo s s . P ast pe r f o r m a n c e i s n o t in d i ca t iv e o f f u tu r e r e s u lt s . US D fi gu r e s a r e ba s e d on J P Y t o US D ¥ 159 . 08 = $1 . 0 0
M & A Pr o g r e s s Th e M & A o f t wo com p anie s ha s b ee n com p l e t e d . We will p r ior it ize g r ow t h invest men t s an d ai m t o inc r ease c o r por a t e va l u e t h r oug h i no r ganic gro w t h. Well Reso u r c e Co . , L t d . Toka i Sp or t s Co . , L t d . F ou r afte r school daycare service facilities (exercis e an d learnin g suppor t classrooms ) in Miyagi Prefecture. Overview Approximately 1,200 sports school members and th e gymnastics classes at approximately 20 affiliated kindergartens and daycare centers. Overview E x pan d ing in th e To h o k u re g ion an d strength en i n g th e revenu e base . L e ve ra g ing ex istin g so ci a l bus ine ss loc atio n s for ra p id ma rk e t sh are exp an sio n in To h o k u . An tici p ate hi g h e r ins tru c tio n al qua lit y via kn o w - ho w sharing an d imp ro v ed pro fit marg ins throu g h ba c k - office inte gra tio n . Significant expansion o f school membership maximization o f LTV Expandin g Chubu market share rapidl y with ~1,200 members. Aiming t o significantly boost average LTV and membership by leveragin g olde r - student coachin g expertise group - wide. 20 C o p yr i g h t 202 6 L EI F R A S C O ., L T D . T he r e i s n o gu ar a n t e e th at a n y s pe c if i c o ut c o m e w il l be ac h i e v e d. I n v e s tm e n t s m ay be s pe c u lati v e , ill iq u i d a n d th e r e i s a r i s k o f lo s s . P ast pe r f o r m a n c e i s n o t in d i ca t iv e o f f u tu r e r e s u lt s . 01 02
IND EX 1. Com p an y Pr o fi l e 2. E x e c uti v e Summa r y 3. Q 1 FY2026 Con s ol i da t ed Financ i a l R e s ults 4. Pr o g r e s s o f th e G r owt h S t r a t e g y Con s ol i da t ed Financ i a l P o s it i on 6. Capital A l lo cation 7. 202 6 Fu l l - Y ear C o n s o l i d a t ed F i nan c ia l Fo r e c a s t 8. Ap p en d ix • G r owt h St r ategy • Ca pita l All ocation • Refe renc e Materia ls 21 C o p yr i g h t 202 6 L EI F R A S C O ., L T D . T he r e i s n o gu ar a n t e e th at a n y s pe c if i c o ut c o m e w il l be ac h i e v e d. I n v e s tm e n t s m ay be s pe c u lati v e , ill iq u i d a n d th e r e i s a r i s k o f lo s s . P ast pe r f o r m a n c e i s n o t in d i ca t iv e o f f u tu r e r e s u lt s .
Co nso l i d a t ed B S H i ghl i gh t s M a i n tai n in g a sou nd fin a nc ia l foun d ati o n. N et a sse t s a r e s t e a d i l y i n creas i n g d u e t o th e r ec o r d i ng o f ne t i n c o me fo r t h e c u r r en t pe r i o d . 22 C o p yr i g h t 202 6 L EI F R A S C O ., L T D . T he r e i s n o gu ar a n t e e th at a n y s pe c if i c o ut c o m e w il l be ac h i e v e d. I n v e s tm e n t s m ay be s pe c u lati v e , ill iq u i d a n d th e r e i s a r i s k o f lo s s . P ast pe r f o r m a n c e i s n o t in d i ca t iv e o f f u tu r e r e s u lt s . US D fi gu r e s a r e ba s e d on J P Y t o US D ¥ 159 . 08 = $1 . 0 0 Y oY C h ang e % Y oY C h ange 2 0 2 6 /3/31 2025/12/ 3 1 (in t housan d s of U S D) 3 . 0% 651 2 2 ,483 21 , 832 C ur r e n t assets - 0 . 4% - 32 7,5 2 5 7 , 557 F ix ed a s sets 2 . 1% 619 3 0 ,008 29 , 389 T ot a l A ssets - 6 . 0% - 851 1 3 ,292 14 , 143 C ur r e n t l i abi l itie s 18 . 9% 688 4,3 2 5 3 , 637 F ix ed debt - 0 . 9% - 163 1 7 ,617 17 , 780 T ot a l l i abi l itie s 6 . 7% 782 1 2 ,391 11 , 609 T ot a l Net A ssets 2 . 1% 619 3 0 ,008 29 , 389 T ot a l l i abi l itie s and equ i ty
Co nso l i d a t ed CF H i ghl i gh t s Ca s h f l ow r e m ai n s abundan t. 23 C o p yr i g h t 202 6 L EI F R A S C O ., L T D . T he r e i s n o gu ar a n t e e th at a n y s pe c if i c o ut c o m e w il l be ac h i e v e d. I n v e s tm e n t s m ay be s pe c u lati v e , ill iq u i d a n d th e r e i s a r i s k o f lo s s . P ast pe r f o r m a n c e i s n o t in d i ca t iv e o f f u tu r e r e s u lt s . US D fi gu r e s a r e ba s e d on J P Y t o US D ¥ 159 . 08 = $1 . 0 0 F Y26 Q1 F Y 25 Q1 (in t housan d s of U S D) - 885 - 1 , 505 C ash f lo w f r om oper a ting activ i ties - 142 - 31 C ash f lo w f r om i n v es t i n g activ i ties 735 - 1 , 142 C ash f lo w f r om f i n anc i ng activ i ties - - 8 Ef f ect o f e x change r a t e - 292 - 2 , 686 C hanges i n ca s h and ca s h equ i v a l e nts 15,574 13 , 271 E n d i ng b alance o f ca s h and cash eq u i v ale n ts
IND EX 1. Com p an y Pr o fi l e 2. E x e c uti v e Summa r y 3. Q 1 FY2026 Con s ol i da t ed Financ i a l R e s ults 4. Pr o g r e s s o f th e G r owt h S t r a t e g y 5. Con s ol i da t ed Financ i a l P o s it i on 6. Capital A l lo cation 202 6 Fu l l Y ear C o n s o l i d a t ed F i nan c ia l Fo r e c a s t 8. Ap p en d ix • G r owt h St r ategy • Ca pita l All ocation • Refe renc e Materia ls 24 C o p yr i g h t 202 6 L EI F R A S C O ., L T D . T he r e i s n o gu ar a n t e e th at a n y s pe c if i c o ut c o m e w il l be ac h i e v e d. I n v e s tm e n t s m ay be s pe c u lati v e , ill iq u i d a n d th e r e i s a r i s k o f lo s s . P ast pe r f o r m a n c e i s n o t in d i ca t iv e o f f u tu r e r e s u lt s .
• W e pred i ct c o n ti nu ed growt h wi t h n o cha n ges to o u r E arn i n gs F o recast . • T h i s ear n i n g s f o reca st assu m es tha t n o b u s i n ess a cq u i s i ti o n s, restr u ct u ri n g s or l egal sett l eme n t s w il l b e co n c l u ded. Co nso l i d a t ed E a r n i n g s For e cast f or t h e Fisc al Y ear E n d i ng D ece m ber 2 0 2 6 25 C o p yr i g h t 202 6 L EI F R A S C O ., L T D . T he r e i s n o gu ar a n t e e th at a n y s pe c if i c o ut c o m e w il l be ac h i e v e d. I n v e s tm e n t s m ay be s pe c u lati v e , ill iq u i d a n d th e r e i s a r i s k o f lo s s . P ast pe r f o r m a n c e i s n o t in d i ca t iv e o f f u tu r e r e s u lt s . T he US D amo unt i s ba s e d on 25Q 4 F X r a t e 㻃 156 . 80 = $1 . 00 . Y oY C h ang e % Y oY C h ange FY26 FY25 FY24 㸦 i n thou sa nd USD 㸧 2 7 .9% 2 0 ,865 (H i gh) 9 5 ,663 74 , 798 65 , 878 Net r e v e n ue - - - 1 0 .8% 8,1 1 0 (Lo w ) 8 2 ,908 3 3 .9% 1,3 5 6 (H i gh) 5,3 5 7 4 , 001 3 , 315 Inc o m e f r om oper a tions - - - 1 3 .2% 527 (Lo w ) 4,5 2 8 0.3% ( Hig h) 5.6% 5 . 3% 5 . 0% Operating p ro f i t m a r gin - - - 0.2% (Lo w ) 5.5%
IND EX 1. Com p an y Pr o fi l e 2. E x e c uti v e Summa r y 3. Q 1 FY2026 Con s ol i da t ed Financ i a l R e s ults 4. Pr o g r e s s o f th e G r owt h S t r a t e g y 5. Con s ol i da t ed Financ i a l P o s it i on 6. Capital A l lo cation 7. 202 6 Fu l l - Y ear C o n s o l i d a t ed F i nan c ia l Fo r e c a s t Ap p en d ix G r owt h St r ategy • Ca pita l All ocation • Refe renc e Materia ls 26 C o p yr i g h t 202 6 L EI F R A S C O ., L T D . T he r e i s n o gu ar a n t e e th at a n y s pe c if i c o ut c o m e w il l be ac h i e v e d. I n v e s tm e n t s m ay be s pe c u lati v e , ill iq u i d a n d th e r e i s a r i s k o f lo s s . P ast pe r f o r m a n c e i s n o t in d i ca t iv e o f f u tu r e r e s u lt s .
• A ll ocatio n o f h u m a n r eso u rces i n co n n ect i o n w i t h th e re co n tr a ct i n g o f Nagoy a C i t y c l u b activ i t y proj ects an d th e n ew co n s i gnm e n t o f othe r l a r g e c l u b activ i t y proj ects • A te m por a r y decre a se i n scho o l m em be r s du e t o th e te r m i n a t i o n o f o n e fran ch i se co n tr a ct • I n c r e a s e i n gr ad u a t e s ( w it h dr awal s ) due t o cur r e n t me mbe r s r e ach in g h ig h e r gr ades Is s u es a n d f a c t o r s S tr a t egies a n d me a s u r es Exp a n si o n o f spo r t s school bus i ness W e are f oc u si n g o n e nhan ci n g t h e qua l i t y o f o u r cl a ss o f f e r i n g s a n d cus t ome r s e r vices, t o con tin u e bei n g c h ose n b y o u r cus t ome r s an d ex p a n d i ng mar k et sha r e a n d st r ength e n i ng cus t ome r at t r a ction , fo r sustaina b l e g r o w t h . I n tern al e n v i ron m e n t Qual i ty e n ha n cem e n t E xter n al e n v i ron m e n t • G r o w in g awa r e n e s s o f th e n ee d t o p r o t e ct o n e ' s li v e li h ood due t o th e e f f e cts o f p r o lon ged pr ic e h i k e s • T h e s pe c ia l de m an d ( r e b o un d de m an d) a f t e r th e C O V I D - 1 9 p an de m i c h as r u n it s co u r s e Ma r k et Share ex p ans i o n and b ra n di n g s tren gthe n i n g cu stom er attr a ct i on • S tre n gth e n i n g sc h o o l v i s i t s (o n s i t e trai n i n g an d emp l o y ee de v e l op me n t ) ai med a t q u al i t y i mpro v eme n t • D i f fere n ti a t i o n thro u g h e n ha n ced br a n di n g o f th e n o n - cog n i tiv e abi l i t y m eas u rem e n t syst em " Mi l ab o “ • S tren gthe n i n g th e i n struct i o n an d m anage m e n t syst em thro u g h th e pr oacti v e deploy m e n t o f a ss i stant i n structo r s • S tren gthe n i n g soc i a l m ed i a a d v e r ti s i n g thro u g h w eb m a r k et in g • A cq u iri n g li gh t n eeds cu stom e r s thro u g h th e i n tro d uct i o n o f i n s i d e sale s • 4 7 prefe ct u res an d ex p and i n g i n t o un exp l ore d a r eas • E stab l i s h me n t an d ex p an s i o n o f c l asses e x c l u s i v e l y f or kids (presc h o o l c h il dren) • O pen in g n e w s tu den t - l e d s ch o o l s u til i zi n g s ch o o l fac il iti e s th r o u gh comp r e h e n s i v e p a r tn e r s h i p ag r ee me n ts w ith un i v e r s iti e s an d v o catio n al s ch o o ls • M&A an d all i an c es w it h o th e r com p an i e s i n th e s ame in d u s t r y that s h a r e o u r p h il o s o p h y 27 C o p yr i g h t 202 6 L EI F R A S C O ., L T D . T he r e i s n o gu ar a n t e e th at a n y s pe c if i c o ut c o m e w il l be ac h i e v e d. I n v e s tm e n t s m ay be s pe c u lati v e , ill iq u i d a n d th e r e i s a r i s k o f lo s s . P ast pe r f o r m a n c e i s n o t in d i ca t iv e o f f u tu r e r e s u lt s .
Exp a n d i ng t h e sha r e o f cl u b activitie s | M a r k et size an d nati o n a l po l ic y r o a dmap I 202 6 sc hoo l y ear w i l l s ee t h e sta r t o f a " r efo r m impl e mentat i o n per io d " fo r c l ub activit i e s . In p r inc ipl e , al l c l ub activit i es hel d o n hol i day s w i l l b e tran s fe r r ed t o th e lo c a l c ommunit y . 2023 2024 2025 2026 2027 2028 2029 2030 2031 R e f or m p r omo t i o n p e r i o d T A M | C lu b a ctivity ma r k et size A pp r oxim a t e l y 9,80 0 ju n i or h i gh s c hools nat i on w i d e *1 Approxi m a tel y 3.1 9 b i lli o n USD Ou r cur r e n t loc a ti o n | 2025 r esults N umber o f c o nt r acte d s c h oo l s : 381 S ale s : a pp r ox . 2 0,00 0 U S D R o o m for g r o w th * 1 : < Sour c e > e - S t at Gov er nm e nt S t at i s t ic s P o r ta l Si t e / N um be r of S c hoo l s i n 202 5 * 2 : Ma r ket Siz e : O ur ow n c a lc u l a t io n me t ho d ba s e d on pa s t c on t r a c t p e r fo r m a nc e * 3 : < S ou r c e > C lu b A c t i v i t y R e fo r m P ort a l S i t e / N e w G uide line s R ega r d i ng C lu b A c t i v i t y R e fo r m ( T his i s me r e l y a na t ion a l pla n a nd i s no t n e c e ss a r il y g ua r a n t ee d t o be imple me n t e d. ) R ef o r m i m p l e m entation p e r i o d W ee ke n ds: A l l scho o l c l u b activ i ti es a r e plann ed t o b e ex p ande d t o th e com m un i ty W e e k days: R es o l v e v ari o u s i ss u es an d promot e re f orm. 28 C o p yr i g h t 202 6 L EI F R A S C O ., L T D . T he r e i s n o gu ar a n t e e th at a n y s pe c if i c o ut c o m e w il l be ac h i e v e d. I n v e s tm e n t s m ay be s pe c u lati v e , ill iq u i d a n d th e r e i s a r i s k o f lo s s . P ast pe r f o r m a n c e i s n o t in d i ca t iv e o f f u tu r e r e s u lt s .
Exp a n d i ng t h e sha r e o f cl u b activitie s | M a r k et size an d nati o n a l po l ic y r o a dmap II T h e J a p ane s e g o v e r nment h a s announc e d t h a t i t plan s t o t r ansf e r "mo r e t h a n 30% " o f holi d a y c l ub activit i es t o lo c a l c ommunit i es an d th e p ri v a t e s e c to r i n fi s cal 2026 . *1 2023 Resul t s 2024 Resul t s S ched u led fo r 2025 S ched u led fo r 2026 2027 㹼 4 . 7 % ( 6 , 049 co p i e s ) 8 . 5 % ( 10 , 910 co p i e s ) n crea se Y oY R eg i o n a l c l ub a ctivity de v el o pme n t r a ti o a cross J a p a n a n d pl a ns for [ S o ur ce ] S ur vey o n t h e s t a tus o f c l ub a cti vi t y ref o rm ef f o r t s ( A g ency f o r S p o r t s a nd A g ency f o r C ult u ra l A f f a irs ) * Rati o of lo c al c lu b ac t ivi t ie s acros s J a p an ( nu m b e r of lo c al c lu b ac t ivi t ie s : nu m b e r of c lu bs) * T h e p e rc e n t a ge w a s ca l c u la t e d u sin g a t o t al of 128 , 00 0 c opi e s as t h e d e n om in a t or ( nu m b e r of ju n ior h i g h s c hoo l s n a t io n w i d e ) . 30.4 % 16 . 6 % ( 21 , 208 co p i e s ) ( 38 , 9 5 4 cop i e s ) R e g i o n a l e xpans i o n r a t i o Ap p r o x im a t e l y 14 % R eform p r omotio n p e r io d (d e m o n s t r a tio n ex pe rim e n t) * 1 : < S ou r c e > C lu b A c t i v i t y R e fo r m P ort a l S i t e / N e w G uide line s R ega r d i ng C lu b A c t i v i t y R e fo r m ( T his i s me r e l y a na t ion a l pla n a nd i s no t n e c e ss a r il y g ua r a n t ee d t o be imple me n t e d. ) 29 C o p yr i g h t 202 6 L EI F R A S C O ., L T D . T he r e i s n o gu ar a n t e e th at a n y s pe c if i c o ut c o m e w il l be ac h i e v e d. I n v e s tm e n t s m ay be s pe c u lati v e , ill iq u i d a n d th e r e i s a r i s k o f lo s s . P ast pe r f o r m a n c e i s n o t in d i ca t iv e o f f u tu r e r e s u lt s .
• C om m i ss ion ed by th e J a pan S por t s A ge n cy • N ippo n S por t P oli cy Co m mi s s ion • J a p a n S por t A ssoci a tion • J a p a n P r iv a t e E d u ca tio n Cou n c i l • Numb e r of s c hool c lu bs managed : 381 s c h ool s , 2120 c l u bs . • Repe at rate ( c ont i nuat i on rate) fro m lo c al gov e rn m en t s : 8 9 % • Coll abora t i on w i t h lo c al gov e rn m en t s ( c um ula t i ve t o ta l f r om 201 3 to 202 5 ) • P refe c tu r es : 3 3 P r efect u r es ( 47 prefe c tu r es nat i on w i de) • Spe c i al w ard : 13 W a r d s (all 23 w ar d s i n T ok yo) • Busi n e s s areas: 47 P r efec t u r es (N u m ber o f l o cation s : 47 ) • Nu m b er of sport s in stru c tors (f u l l - t i m e e m p l o y ees): 1 , 055 • Nu m b er of c lu b a c t i v i ty in stru c tors (part - tim e emplo y ee s ) : 3 , 544 • Tra i ning t hro ugh unique progra m s an d t ho rou gh supe rvi sio n by t he general ma nager • A c hiev emen t s i n saf e t y ma n agement • Si n c e a c c ep t i ng c l ub a c t i v i t i es i n 201 3 , t h e r e h a ve bee n 0 s er i o us ac c ide n t s or i n ju r ies . Exp a n d i ng sha r e o f c l ub activ i tie s bus i ness | Co mp e titi v e a d v a n tag e I ( b a r r ie r s t o ent r y ) W e ha v e bu il t up a b a r r ie r t o ent r y t h r o u g h o u r es t ab l ishe d "trust , t r a ck r eco r d , a n d kn o w - how " a n d ou r o v e r whel m i n g " i n s t ruc t or plat f orm " t h a t i s un i qu e t o ou r co m p an y . N o .1 i n J a p a n “ co n t r act r e c o r d N e t w o r k w it h t h e "c o un t r y " Com p eti ti v e A d v a n t a ge (Bar r i e r s to ent r y) ඹ ය Net w o r k w it h loca l g o v ern m e n t s na t io n w i d e La r g e s cale "in s t r uc t o r p latf o r m" A " s afe t y manag e m e nt s y s t e m " t o p r e v ent s ac c i d ent s an d inju r i e s ර ල 30 C o p yr i g h t 202 6 L EI F R A S C O ., L T D . T he r e i s n o gu ar a n t e e th at a n y s pe c if i c o ut c o m e w il l be ac h i e v e d. I n v e s tm e n t s m ay be s pe c u lati v e , ill iq u i d a n d th e r e i s a r i s k o f lo s s . P ast pe r f o r m a n c e i s n o t in d i ca t iv e o f f u tu r e r e s u lt s .
J a p a n P r i v a t e E d uca t ion Co un c i l Ex p a ndi n g th e s ha r e o f club a ct ivi t ie s | Com p eti ti v e a d v a n t a g e I I (Net w or k w i t h th e n a t i o n a l go v er n m e n t) W e ha v e establ i s he d a str o n g mar k et p o si ti o n b y co l l a b o r a tin g w it h l ea d i n g i n stituti o ns i n J a p a n ' s spo r t s i n dust r y a n d p r iv a t e educ a tio n sec t o r . N ip p o n S p o r t P o l i cy Co mm i ss ion J a p a n S p o r t A s s o c i a t io n ( J S P O ) Mem b er A s t r a te gic thi n k tank and l o bb y in g o r g anizat i o n t hat p r o p os e s national sp o r t s p o l icie s and p r om o t e s indus t r iali za t i o n A u n ifi e d o r ganizatio n o f the J a p an ese sp o r t s w o rl d that w o rks t o c r e a t e an e nvi r o n m e nt for " wa t ching , " " p lay ing," and " sup p o rt ing " sp o r t s. O f f i c i a l p a r tner J apa n P r i v a t e Educ a t i o n Co un cil Mem b er A n o r g anizat i o n t hat b r ing s t og e t h e r o r g anizat i o ns r ep r e sen t in g v ar i o us fi e lds o f p r i v a t e e d ucat i o n t o p r om o t e social cont r i b ution for ch i ldr e n and cont r i b u t e t o the de v e l o p m e nt o f p r i v a t e e d ucat i o n. R e p r e s e n tat i v e : Ki y o tak a I t o * 1 : < S ou r c e > C lu b A c t i v i t y R e fo r m P ort a l S i t e / N e w G uide line s R ega r d i ng C lu b A c t i v i t y R e fo r m ( T his i s me r e l y a na t ion a l pla n a nd i s no t n e c e ss a r il y g ua r a n t ee d t o be imple me n t e d. ) * 2 : A l l m a r ks a r e t r a d e m a r ks or r e g i s t e r e d t r a d e m a r ks of t he i r re s p e c t i v e own e r s . T he d i s pla y of t r a d e m a r ks he r e i n do e s n ot i mpl y t ha t a lice n s e of a ny kin d ha s b e e n g r a n t e d. Member 31 C o p yr i g h t 202 6 L EI F R A S C O ., L T D . T he r e i s n o gu ar a n t e e th at a n y s pe c if i c o ut c o m e w il l be ac h i e v e d. I n v e s tm e n t s m ay be s pe c u lati v e , ill iq u i d a n d th e r e i s a r i s k o f lo s s . P ast pe r f o r m a n c e i s n o t in d i ca t iv e o f f u tu r e r e s u lt s .
Exp a n d i ng M a r k et S ha r e i n Cl u b A ctivities | Huma n R esou r ces S tra t egy Enhance hu m a n r esou r ces t h r oug h t ec hno l og y util i zi n g t h e i n c r easing va l ue o f se r vices du e t o t h e sp r ead a n d e v o l utio n o f AI. T h e co mpet iti v e ad v an t ag e o f t h e b us i ne s s H uman r e s o u r c e s s t r a t e g i e s u t i l iz i ng t e c h n o logy ● V alu e r e v e r s a l d ue t o t h e s p r ead o f AI Maximizi ng human v a lue ● An absolu t e r ea s o n t h a t o n l y " p eop l e " can d o . E m p ath y : "War m and c ompass i onate c are" that su ppor t s both setba c ks and j o y s. E n e rgy : T h e passion and aspirat i ons of i nst r u c tors that dr i ve c h i l d ren ' s g ro w th. On th e groun d s k ill s : " H u m an skil ls " to reso l ve unpr e d i c tab l e c onfl i c ts be t w een c h i l d ren. A I s y s t ems " C o gn i t i ve ab ili ties ( kn o w l e d ge an d l o gic ) " " R o ut i ne task s " The a r ea s th a t Leif r a s hand les " N on - c o g n it iv e skills ( i n t e rpe r s o n a l s kills ) " " H uman re la tions" S o a r in g V a lue (P r e m ium i zat io n ) Tho r o u g h u s e o f tech n olo g y [ R e cr uitm e nt ] Hi g h - p r e cision scre e nin g o f " l e v e l o f alignm e nt with com p any p hi l os o p h y " t h r o u g h dat a anal y sis [ Manag e m e nt ] A ccumulation o f t rain i ng kno w - h o w dat a and au t omation o f ad mini s t r at i v e t ask s Foc u s i n g o n "time an d e n e rgy s p e n t w i t h chi l dre n ." M ax i mi z i n g custom e r s ati s f act i o n an d li f e ti m e v alue (“ L T V ” ) throu g h o u tstan din g s e r v i c e qu a l i t y . Dec r ea s ed v a lue A l l r e s o ur c e s g e nerat e d t h r o u g h A I and s y s t e m izati o n w i l l b e in v e s t ed b ac k i nto " p e o p l e " . 32 C o p yr i g h t 202 6 L EI F R A S C O ., L T D . T he r e i s n o gu ar a n t e e th at a n y s pe c if i c o ut c o m e w il l be ac h i e v e d. I n v e s tm e n t s m ay be s pe c u lati v e , ill iq u i d a n d th e r e i s a r i s k o f lo s s . P ast pe r f o r m a n c e i s n o t in d i ca t iv e o f f u tu r e r e s u lt s .
• B y offering d i re c t e m p l o y me nt and c le ar c areer paths, w e c an c ont i nuous l y attrac t ta l en t ed y oung p e op l e. • A s oph i s tic a t e d ma n a g e men t s y s t e m th a t s u ppo r t s b u s in e s s ex pan s ion by p ro cess i ng approx i mate l y 1 ,0 00 h i r i ng and t e rm i nat i ng transa c t i ons pe r month w i t hout d e la y . • I m media t e ba c k u p s y s t e m ut i l i z in g a nat i on w i d e ne t w ork of e x per i en c ed in stru c tors • T h e h i gh le vel of re liabi l i ty that al l o w s for i m me d i ate c overage i n c ase of staf f sh ortages i s the s our ce o f a s t r ong r eve n u e ba s e. • Wi t h a seaml ess s y ste m that in t e grat e s on - si t e operat i ons and H R , w e c an q u ic kly respond t o t he ur g ent ne e ds of lo c al gov e rn m en t s. • A l l o w s fo r both r ed u ced t r a ve l c o s t s a n d max im ize d u tiliza t ion by sharing t ale n t w i t h i n a g i ven area. • T h e s y ste m of a llo win g si d e jobs and c on curre n t e m p l o y me nt ensu r es the avai l abi li t y of d iv erse professional t ale n t, in c lu d i ng c urre n t t e a c hers. • W e are e x p and i ng ou r unique " t a le n t ban k s y s t e m" n a tionwide , beco m in g a n inf r a s t r uc t u r e co m pa n y th a t s upp o r t s l o cal s ch oo l c l ub a ct i vitie s . Exp a n d i ng M a r k et S ha r e i n Cl u b A ctivities | Huma n C a pita l S tra t egy II By util i z i n g J a p a n ' s o n l y "i n struc t or pl a t f o r m," w e are bui l d i ng a scal ab l e hu m a n r esou r ce bas e t o suppo r t t h e r a pi d ex p a n si o n o f o ur bus i ness. R e cr u itme n t throu g h direct ඹ e mpl oyme n t an d s cal abl e l abor b a s e C l u b act iv i tie s s u ppo r t h i gh ය r e t e n tio n ra t e s . Achi e v e s hig h ope rating ර ca p ac i t y an d hig h e ff i c i e n cy organi zationa l s tru cture Uti l i z i n g d i v e r s e human r e s ou rces an d e v olut io n int o a " tal e n t s u pply i n f ras tru ctur e " • T h rough c ompr e hens i ve partne rsh i ps w i t h e d u c at i onal in st i tu t ions (su c h as Sa nko Gak uen ), w e c a s ecu r e a s t a bl e a n d l a r g e nu m b er o f h ig h l y m o tiv a t e d a n d t a le n t e d s t u d e n t s a s ful l time empl o y ee s ( s u pe r vi s ors ) a n d cre w me m be r s (inst r u ctors). S tron g r e l ations hip with ල pri v at e s chool corporati on s r e cruitmen t p i p e li n e Hu m a n C a pit a l S t ra t egy 33 C o p yr i g h t 202 6 L EI F R A S C O ., L T D . T he r e i s n o gu ar a n t e e th at a n y s pe c if i c o ut c o m e w il l be ac h i e v e d. I n v e s tm e n t s m ay be s pe c u lati v e , ill iq u i d a n d th e r e i s a r i s k o f lo s s . P ast pe r f o r m a n c e i s n o t in d i ca t iv e o f f u tu r e r e s u lt s .
Exp a n d i ng mar k et sha r e i n club activ i t y p r o g r a ms | S tra t egies b y p h ase Ph a s e 2 w i l l foc u s o n " des i g n a t ed cit ie s " whe r e t h e b a l a n ce b et w een p o p u l a ti o n den s i t y a n d m a r k et s i z e i s o p ti m a l. Ph a s e 3 w i l l ex p a n d t o " n a ti o n wid e a n d r egio n a l cit ie s ." P H AS E 1 D e m on s tra tio n e x p e ri m e n t s a nd tra ck re cord b uil d ing P H A SE 2 D e ve lo pme n t in t o " G ove rn men t - D esign a t ed C ities " P H A SE 3 Exp a n s ion t o th e w h ol e c ou n t r y a n d r eg ion a l c i ti e s ● T a r get Des i g n ate d c i ti es A ppr o x i m a t e l y 1 ,6 00 s cho o ls T ok y o 23 w a r ds: A ppr o x i m a t e l y 430 s cho o l s ( n u m b er o f s cho o l s not curren t l y u n d er co n t ra ct) ● S tr a t e gy Sca l i n g t o a " C i t y D es i gn a t ed b y Go v er n m e n t O r di n anc e " • T h e kno w - how ga i ned w i l l be ex pand e d to urban areas. • Max i m i z e r e c ru i t m e n t and o p e rat i onal effi c i e n c y • A sh if t fro m "t e st i ng" to " c om m er c ial iz at i on." Co mple t i o n Cu r r ent l o cation Mediu m t o l o ng t erm ● T a r g e t 9 ,8 00 s cho o l s n ationwide ● S t r a t e g y I n f ras tru cture de v e l opme n t throu ghou t the e n ti r e cou n t ry • Util i zi n g th e e nhan c e d o perati n g s y s t e m f r o m Pha s e 2 • I n t r o du ct i o n o f a h ig h l y e f f ic i e n t r e m o t e an d s upe r vi s o r y ma n agem e n t m o del that w o rk s e v e n i n a r e as w it h lo w p o p u latio n dens i t y . ● A chie v e me n ts 38 1 sc h o o l s 2,12 0 c l u bs ● S tr a t e gy Bus i n ess m o d el v a li da ti on Est a bl i sh i n g a re v enu e b a se * T his i s mer e l y a na t ion a l pla n and i s n ot n e c e ss a r il y gua r a n t ee d t o be imple me n t e d. T he r e i s n o gu ar a n t e e th at a n y s pe c if i c o ut c o m e w il l be ac h i e v e d. I n v e s tm e n t s m ay be s pe c u lati v e , ill iq u i d a n d th e r e i s a r i s k o f lo s s . P ast pe r f o r m a n c e i s n o t in d i ca t iv e o f f u tu r e r e s u lt s . 34 C o p yr i g h t 202 6 L EI F R A S C O ., L T D .
Imp r ov i ng ope r ati n g p r o fi t ma r g i n | F ac to r s, m e as u r es, a n d fu t u r e o u tlo o k F r om the “ g r owth i n v es tm e n t p ha s e " t o the ” m a r gi n ex p a n s io n p ha s e ” . 2023 2024 2025 2026 2027 2028 2029 Mana g e m ent D e p a r t m e nt S c h oo l Bus i ne s s S o c i a l Bus i ne s s Fro m e x p a nsio n t o incre a s e d p rof i t d e nsity ● I m p r o v in g L T V ( m onthl y m e m b e r s h i p f ee s , e v e n t s , m e r c h a n d i s e s al e s , e t c . ) ● C o s t r edu c ti o n by o pen i ng a sc h oo l i n kind er ga r t en o r s c h o o l f a c ili ties ● I nc r ease nu m b er o f me m be r s per emp l o y ee ( i nc r ease i n c l as s es f o r y o un ger emp l o y ee s ) ● P r oo f o f c o nc ept → Co n ve rt t o ful l c on t r a c t t o incre a s e ● E x pand pe r i ph e r a l r evenues ( i nsur an c e, s y s tem s , et c .) ● R edu c e c o s ts per p r o j e c t th r o ug h ec o n o m i es o f s c ale ● Utiliz e Digi t a l T r a nsfo r m a t i o n ( D X ) / Ar t ifici a l In t e lli g e n c e ( AI) ● Fi x ed m a na gem ent c o s ts ● I m p r o v i ng bu s i ness ef f i c i en c y In c re a s e i n p roj e c t s = conve rsi o n t o p rof i t m ar g in S al e s g rowth = p rof it s s ourc e o f l e v e r a g e Gr o w t h in v e s t ment p ha s e ࣭ C l u b activ i t y de m o n stra ti o n exp e rime n t ࣭ H u m a n r eso u rce i n v estmen t ࣭ IPO/ ma n ageme n t system de v e l op me n t Mar g i n Exp ans i o n Pha s e I n cre a se operati n g pr of i t m a r gi n f o r c l u b activ i ti es (co n v e rs i o n fro m de m o n stra ti on ex pe r i me n t t o fu l l c o n tract) L TV o f schoo l b u s i n ess ࣭ R edu ce pe r so n n el i n a dm i n i stra tiv e dep a r t m e n ts * T his i s mer e l y a na t ion a l pla n and i s n ot n e c e ss a r il y gua r a n t ee d t o be imple me n t e d. T he r e i s n o gu ar a n t e e th at a n y s pe c if i c o ut c o m e w il l be ac h i e v e d. I n v e s tm e n t s m ay be s pe c u lati v e , ill iq u i d a n d th e r e i s a r i s k o f lo s s . P ast pe r f o r m a n c e i s n o t in d i ca t iv e o f f u tu r e r e s u lt s . 35 C o p yr i g h t 202 6 L EI F R A S C O ., L T D . ࣭ R edu ce f i x ed costs ࣭ U ti li ze D X / A I
IND EX 1. Com p an y Pr o fi l e 2. E x e c uti v e Summa r y 3. Q 1 FY2026 Con s ol i da t ed Financ i a l R e s ults 4. Pr o g r e s s o f th e G r owt h S t r a t e g y 5. Con s ol i da t ed Financ i a l P o s it i on 6. Capital A l lo cation 7. 202 6 Fu l l - Y ear C o n s o l i d a t ed F i nan c ia l Fo r e c a s t Ap p en d ix • G r owt h St r ategy Ca pita l All ocation • Refe renc e Materia ls 36 C o p yr i g h t 202 6 L EI F R A S C O ., L T D . T he r e i s n o gu ar a n t e e th at a n y s pe c if i c o ut c o m e w il l be ac h i e v e d. I n v e s tm e n t s m ay be s pe c u lati v e , ill iq u i d a n d th e r e i s a r i s k o f lo s s . P ast pe r f o r m a n c e i s n o t in d i ca t iv e o f f u tu r e r e s u lt s .
• I m p r ov i n g c o r p o ra t e v alu e t o a c h ie ve o u r m issio n a n d so c ia l m issio n of " C h a n g in g a n d D e sig n in g Spor t s" C a pita l A l l oc a tion P u r p o s e A i ms o f t a r g et M & A p olicy Rigor o u s in ves tig a t io n a n d d e li b e r a t io n of c o n si s t e n c y w i t h over a l l st r a t e g y , syn e r g y e ff e c t s , in ves t m e n t r a t io n a li t y , ri sks a n d in t e g r a t io n is s u e s , e t c . Ba s i c P o l i cy P r e v ious ly ac q uir ed ac h i e v e m ent s M & A tr a ck r eco r d W e w i l l p r i o r iti z e p r omoti n g M&A (g r o w t h i n v es t m e nt) a n d a i m t o imp r o v e cor po r a t e va l ue t h r o u gh i n organ i c g r o w t h . P o s t Merg e r I n t e g r a t ion • M &A wit h th e ai m o f s u s tai n abl e b us ine ss e xp an s io n an d s yn e rgy cr e atio n . • A l l com p an i e s acquire d i n th e p a s t ha v e comp l e t e d P M I a s p l an n e d. • Acq u i r e d com p an i e s ha v e ach i e v e d s i gnifican t growt h i n col l aboratio n wit h L e i f ra s . (PM I ) ucces * T his i s mer e l y a pla n and i s n ot n e c e ss a r il y gua r a n t ee d t o be imple me n t e d. Com p a n i es w i t h h i g h p oten t i a l for syner g y f ro m a g lo b a l p ers p ec t i ve, i ncl u d i n g oversea s com p a n i es . 37 C o p yr i g h t 202 6 L EI F R A S C O ., L T D . T he r e i s n o gu ar a n t e e th at a n y s pe c if i c o ut c o m e w il l be ac h i e v e d. I n v e s tm e n t s m ay be s pe c u lati v e , ill iq u i d a n d th e r e i s a r i s k o f lo s s . P ast pe r f o r m a n c e i s n o t in d i ca t iv e o f f u tu r e r e s u lt s . • Expansio n o f business areas and improvement o f custome r lifetim e valu e (LTV) • Strengthening o f talen t acquisition pipelines and efficient improvement of organizationa l infrastructure • High value - added and efficient services throug h th e us e o f te chnology
IND EX 1. Com p an y Pr o fi l e 2. E x e c uti v e Summa r y 3. Q 1 FY2026 Con s ol i da t ed Financ i a l R e s ults 4. Pr o g r e s s o f th e G r owt h S t r a t e g y 5. Con s ol i da t ed Financ i a l P o s it i on 6. Capital A l lo cation 7. 202 6 Fu l l - Y ear C o n s o l i d a t ed F i nan c ia l Fo r e c a s t Ap p en d ix • G r owt h St r ategy • Ca pita l All ocation Refe renc e Materia ls 38 C o p yr i g h t 202 6 L EI F R A S C O ., L T D . T he r e i s n o gu ar a n t e e th at a n y s pe c if i c o ut c o m e w il l be ac h i e v e d. I n v e s tm e n t s m ay be s pe c u lati v e , ill iq u i d a n d th e r e i s a r i s k o f lo s s . P ast pe r f o r m a n c e i s n o t in d i ca t iv e o f f u tu r e r e s u lt s .
A d j us t ed Inco me f r o m Ope r ati o ns 39 C o p yr i g h t 202 6 L EI F R A S C O ., L T D . T he r e i s n o gu ar a n t e e th at a n y s pe c if i c o ut c o m e w il l be ac h i e v e d. I n v e s tm e n t s m ay be s pe c u lati v e , ill iq u i d a n d th e r e i s a r i s k o f lo s s . P ast pe r f o r m a n c e i s n o t in d i ca t iv e o f f u tu r e r e s u lt s . U S D fi g u res a re ba s ed on JPY t o U S D ¥ 1 59. 0 8= $ 1 .00 ( a) Re p r e s ent s ac q ui s i t i o n - r e l ated co s t s i ncu rr ed i n co nnec t i o n w i t h o ur ac q ui s i t i o n act i v i t i e s , i nclu d i ng t r an s act i o n - r e l ated c o s t s , l eg a l , financial and t ax d ue d ili g ence ex p en s e s , i nt eg r ati o n co s t s and o t her ac q ui s i t i o n - r e l ated co s t s . The s e co s t s have b een a d d ed b ack f o r no r m a l i z ati o n p u r p o s es as t hey a r e not co n s i d e r ed ref l ect i ve o f o ur co r e o p e r ating p e r f o r m ance. A d j u s t e d i n c o m e from op e rat i ons i s a fi nan c i al m easu re t hat i s not c al c u l at e d i n a c c or d an c e w i th U .S. G e n e ra l l y A cc ep t e d A cc o unt i ng P ri n c i p l es (“ G A A P ”) ( c ol l e c t i ve l y referred to as t h e “ no n - G A A P finan c ial m e asures”) , and the u se of the t er m s ad j ust e d i n c ome fro m operat i ons m ay d i ff er fro m si m i l ar me asures repor t ed by o t her c ompan i es and ma y n ot be c omparable to othe r s i m i larl y t i t l ed me asures.. W e be l ie ve the n on - G A A P finan c ia l me asure prov i d e s i nves t ors w i t h useful i nformat i on w i t h resp e c t to our h i stori c al operat i ons. W e p rese n t the n on - G A A P finan c ia l m easure as supp le me ntal p erforman c e me asures b e c ause w e be l ie ve i t fa c i l i t ates a c omparat ive assessm e nt of our op e r at i ng performan c e re l at i ve to our performan c e based on our r e sul ts un d er G A A P , w h i l e iso l at i ng the eff e c ts of som e i t e m s that vary fro m per i od to per i od. Spe c ifi c al l y , ad j ust e d in c ome fro m operat i ons al l o w s u s to assess our p erforman c e w i t hout the i mp a c t of the sp e c ifi c al l y i d en ti f ie d i t e m s that w e be l ie ve do not d i re c t l y refle c t our c ore operat i ons, i n c lu d i ng no n - re c urr i ng c osts, su c h as l i st i ng - re l ated and transformat i onal ex pen ses , othe r non - re c urr i ng in c ome, su c h as l i t i gat i on - re l ated r e i m burs eme nt. T h e non - G A A P fin an c ia l m easure also fun c t i ons as key performan c e in d i c ator used t o ev aluate o u r op e rat i ng performan c e in t e rnal l y , and i t i s used i n c onne c t i on w i t h the de t er m in at i on of i n c en t iv e c omp e nsat i on fo r managem en t , i n c lu d i ng ex e c ut i ve of fi c ers. F Y 㸰 6 Q1 FY 㸰 5 Q1 ( i n thous a nds of USD ) 964 1,044 Income f r om operations 91 - Plus : acqu i s itio n - r ela t e d cost s ( a) 1 , 055 1,044 Adju s t e d incom e f r om op e rations
S u p p l e m e ntar y mat e rial s o n nationa l p olic y ༃ <So u r c e> J ap an S p o r t s Ag en c y - C l ub A c ti v i t y R ef o r m P o r ta l S i te / New G uidel i nes R ega r d i ng C l ub A c ti v i t y R ef o r m 40 C o p yr i g h t 202 6 L EI F R A S C O ., L T D . T he r e i s n o gu ar a n t e e th at a n y s pe c if i c o ut c o m e w il l be ac h i e v e d. I n v e s tm e n t s m ay be s pe c u lati v e , ill iq u i d a n d th e r e i s a r i s k o f lo s s . P ast pe r f o r m a n c e i s n o t in d i ca t iv e o f f u tu r e r e s u lt s . S u mm a r y : O v e r v i ew o f th e Gu i del i n es f o r R e f or m o f Sc h oo l Ex tr a cu rr i cu l a r A ct i v i ti es 1. Ph il o s o p h y o f th e R e for m T h e pr im a r y g o al i s t o e n s u r e that s tu dent s can co n tin u e t o e n jo y s p o r ts an d c u lt ura l activ i ti es i n th e fut u r e , de s pi t e th e ra pidly de c li n in g bi r th ra t e . B y s h i f tin g f r o m s ch o o l - b a s e d activ i ti es t o a commun it y - w id e s u ppo r t s y s t e m , th e r e for m ai m s t o c r ea t e new v alue and m o r e di v e r s e oppo rt u nitie s f or all s tu d e nt s . 2. R e for m T im e li n e FY202 3 – 202 5: R e for m P r o m o tio n P e rio d FY202 6 – 202 8: R e for m I mple me n tat io n P e rio d ( Ph a s e 1) FY202 9 – 203 1: R e for m I mple me n tat io n P e rio d ( Ph a s e 2) K e y T a r get: R e ali z in g th e tr an s itio n o f w ee k e n d/ h o li day activ i ti es t o commun it y - b a s e d cl ub s , i n princip l e , ac r oss all s cho o l s dur in g th e i m pl e m e nt ation p e riod s ta r ting i n FY 2026. 1. K e y P o li c i e s an d Ce r ti f ic atio n S y s t e m W ee k e nd s /Ho li day s : Prio riti z e th e tr an s itio n t o commun ity - b a s e d activ i ti e s . Ce r ti f ic atio n : M u n ic i p alit i e s w il l e s tab li s h a s y s t e m t o c e r ti f y "Ce r ti f i e d Comm u n it y Cl u b A ct iviti e s ." T o be c e r ti f i e d, c l ubs mus t me e t s pe c i f ic r e qu i r e me n ts r e ga r din g activ i ty h o u r s (e .g ., max 3 h o u rs o n h o li day s ), r e s t da y s , an d instr u c t o r qu ali f ic atio n s . B e n e f i ts o f Ce r ti f ic atio n : Ce r ti f i e d c lu bs w il l r e c e i v e p u blic s u ppo r t ( f in a n c i al aid, pr io r it y u s e o f s ch o o l fac il iti e s ) an d s m o o th e r p a r ti ci p atio n i n competitio n s . 2. I mple me n tat io n an d Ad d r e ss in g C h all e n ges Su p p o r t S y s t e m : M u n ic i p alit i e s tak e th e l e ad i n p r o viding r e s o u r c e s , ap p o in t in g co o r din a t o rs, an d c o ll ab o ra tin g w it h pr i v a t e com p an i e s an d u n i v e r s iti e s . Saf e ty an d S ta n da r d s : S tr ic t m e a s u r e s w il l be tak e n t o p r e v e n t m i s co n du ct, inclu din g th e u s e o f " J ap an e s e v e r s io n o f DB S " ( c rim i n al r e co r d che c ks for instr u c t o r s ) an d e n s u rin g s tu dent s af e ty (heat s t r o k e p r e v e n tio n , e t c.).Op e ratio n al C h all e n ge s : F o cus a r e as inclu d e s e curin g instr u c t o r s , f i n din g a c tivity v e nu e s , arr an gin g tr an s p o r tat io n , an d e nsuring inc l us i vity f or s tu d e nt s w it h di sabi l it i e s .
S u p p l e m e n t a r y mat e r ials o n na t ional p olic y ༄ <S our ce> J a pan S por t s A g e n cy - C lu b Activit y Ref o r m P or t a l S it e / Ne w G u idelin e s Rega r din g C lu b Activit y Ref o r m S u mm a r y : P rogr ess S t a tu s o f R eg i o n a l T ra n s i ti o n f o r Ex tr a cu rr i cu l a r A ct i v i ti es ( W e e k e n ds / Ho l i days) 1. O v era l l P rogr ess Si n ce t h e " R e f o rm P r o m o tio n P eri o d " b ega n i n FY 2 023 , t h e tr a n s iti o n o f s ch o o l c l u b activ i ti es t o th e commun it y h as be e n p r o g r e ss in g s t e adil y . B y FY202 6 (th e s ta r t o f th e im ple m e n tat io n period ), i t i s p r o j e c t e d that appr o x i m a t e l y 30 % ( 3 0 .4 % ) o f all c l u b activ i ti es w il l ha v e tr a n s i ti o n ed i n t o com m un i t y - b ase d c l u bs. 2. T re n d s i n th e N u m ber o f C l u b A ct i v i ti es (Spo r t s & A r ts/ C u l tu re C o m bi n ed) FY2 023 (A ct u al ) : 11.2 % t ot al (4.7% r e gion al tran s it i on + 6.5 % r e gion al coop e ratio n ). FY 2026 (P ro j ected): 36 . 6 % to t a l (30. 4% r e gio n al tr an s itio n + 6. 2% r e gio n al co o peratio n ). O b s e r va ti o n: T h e r e i s a s ig n i f ic ant s h i f t t o w a r ds full " r e gio n al tr an s itio n " (be c o mi n g commun it y c l u bs) ra th e r than jus t " r e gio n al co o peratio n " ( s u ch as joi n t s ch o o l t e am s ). 3. N u m ber o f P a r ti c i p a t i n g Mu n i c i p al i ti es T h e numbe r o f loca l go v e r n me n ts plan n in g t o im ple m e n t r e gio n al tr an s itio n s by FY202 6 i s inc r e a s in g s h ar ply : S po r ts : 1,09 7 mu n i c i p al i ti es A r t s & C u l tu re: 646 mu n ic i p alit i e s T h e dat a s h o w s a c l e ar u pwa r d t r e n d, in d ic atin g that the m o v e me n t t o s h i f t s ch o o l activ i ti es t o th e loca l commun it y i s gain in g m o me n tu m n atio n w ide . 41 C o p yr i g h t 202 6 L EI F R A S C O ., L T D . T he r e i s n o gu ar a n t e e th at a n y s pe c if i c o ut c o m e w il l be ac h i e v e d. I n v e s tm e n t s m ay be s pe c u lati v e , ill iq u i d a n d th e r e i s a r i s k o f lo s s . P ast pe r f o r m a n c e i s n o t in d i ca t iv e o f f u tu r e r e s u lt s .
F o r i n q u i r i es, p lease cont a c t LEIFRAS Co., Ltd . / I R Department : Emai l : ir@leifras.co.jp
Exhibit 99.4
LEIFRAS Co., Ltd. Reports Financial Results for the First Quarter of Fiscal Year 2026
Record High Revenue, Adjusted Income from Operations, and Net Income, Up 10.0%, 1.0%, and 1.5% Year-over-Year, Respectively[1]
TOKYO, June 18, 2026 /PRNewswire/ -- LEIFRAS Co., Ltd. (Nasdaq: LFS) (the “Company” or “Leifras”), a sports and social business company dedicated to youth sports and community engagement and Japan’s leading operator of children’s sports schools and school club activity support businesses, today announced its unaudited financial results for the three months ended March 31, 2026.
First Quarter of Fiscal Year 2026 Financial Highlights
| ● | Revenue was JPY3.0 billion ($18.6 million), an increase of 10.0% from JPY2.7 billion for the same period last year. |
| ● | Income from operations was JPY153.3 million ($1.0 million), compared to JPY166.1 million for the same period last year. |
| ● | Net income was JPY124.3 million ($0.8 million), an increase of 1.5% from JPY122.5 million for the same period last year. |
| ● | Adjusted income from operations was JPY167.8 million ($1.1 million), an increase of 1.0% from JPY166.1 million for the same period last year. |
| ● | Basic and diluted earnings per share was JPY4.75 ($0.03), compared to JPY4.92 for the same period last year. |
First Quarter of Fiscal Year 2026 Operational Highlights
Sports School Business
| ● | Number of members was 60,960, compared to 62,495 for the same period last year. |
| ● | Revenue of the sports school business was JPY2.2 billion ($13.6 million), an increase of 5.6% from JPY2.0 billion for the same period last year. |
Social Business
| ● | Number of club activities was 2,120, an increase of 7.6% from 1,971 for the same period last year. |
| ● | Revenue of the social business was JPY791.4 million ($5.0 million), an increase of 24.1% from JPY637.7 million for the same period last year. |
Management Commentary
Mr. Kiyotaka Ito, the Representative Director and Chief Executive Officer of Leifras, commented, “For the first quarter of fiscal year 2026, we achieved record highs in revenue, adjusted income from operations, and net income.[1]
“For the sports school business, despite a temporary slight decrease in membership due to graduations, revenue increased by 5.6% due to higher monthly fees. Moving forward, we plan to focus on expanding our sports school membership base through both organic growth and strategic M&A.
Note: [1] Record high in US-GAAP figures since 2025.
“For the social business, the school club support business expanded under the tailwind of national policy, while the after-school daycare business grew in both scale and revenue, driving an increase in social business revenue by 24.1%. Although strategic investments and M&A-related expenses led to a slight decrease in operating income, we believe these investments are essential to supporting future expansion and unlocking long-term growth through business synergies.
“Fiscal year 2026 marks the first year of the Japanese government’s ‘reform implementation period’ for school club activities, during which these activities are being transitioned to private-sector providers. We plan to fully leverage this powerful policy tailwind and continue to execute with focus. We remain committed to supporting the smiles and growth of children across borders and appreciate the continued support from our valued customers, partners, and shareholders.”
Financial Condition
| ● | As of March 31, 2026, the Company had cash of JPY2.48 billion ($15.6 million), compared to JPY2.52 billion as of December 31, 2025. |
| ● | Net cash used in operating activities was JPY140.9 million ($0.9 million), compared to JPY239.5 million for the same period last year. |
| ● | Net cash used in investing activities was JPY22.5 million ($0.1 million), compared to JPY4.9 million for the same period last year. |
| ● | Net cash provided by financing activities was JPY116.9 million ($0.7 million), compared to net cash used in financing activities of JPY181.6 million for the same period last year. |
Financial Guidance
Following these financial results, there are no changes to Leifras’ financial guidance last provided in its press release issued on April 8, 2026.
| ● | Revenue is expected to be between $82.9 million and $95.7 million for the fiscal year ending December 31, 2026, an increase of approximately 10.8% to 27.9% from $74.8 million for the fiscal year ended December 31, 2025. |
| ● | Income from operations is expected to be between $4.5 million and $5.4 million for the fiscal year ending December 31, 2026, an increase of approximately 13.2% to 33.9% from $4.0 million for the fiscal year ended December 31, 2025. |
The guidance is based on the assumption that no business acquisitions, restructuring activities, or legal settlements will take place during the period.
The guidance is translated at the FY2025 assumed exchange rate of ¥156.80 = $1.00 to eliminate the impact of foreign exchange volatility.
Exchange Rate Information
This announcement contains translations of certain Japanese Yen (“JPY”) amounts into U.S. dollars (“USD,” or “$”) for the convenience of the reader. Translations of amounts from JPY into USD have been made at the exchange rate of JPY159.08 = $1.00, the exchange rate on March 31, 2026 set forth in the H.10 statistical release of the United States Federal Reserve Board.
2
About LEIFRAS Co., Ltd.
Headquartered in Tokyo, Leifras is a sports and social business company dedicated to youth sports and community engagement. The Company primarily provides services related to the organization and operations of sports schools and sports events for children. As of December 31, 2025, Leifras was recognized as one of Japan’s largest operators of children’s sports schools in terms of both membership and facilities by Tokyo Shoko Research. The Company’s approach to sports education emphasizes the development of non-cognitive skills, following the teaching principle “acknowledge, praise, encourage, and motivate.” The holistic approach that integrates physical and mental development sets Leifras apart in the industry. Building upon deep experience and know-how in sports education, Leifras also operates a robust social business sector, dispatching sports coaches to meet various community needs with the aim to promote physical health, social inclusion, and community well-being across different demographics.
For more information, please visit the Company’s website: https://ir.leifras.co.jp/.
Non-GAAP Financial Measures
In the Company’s report, it discusses key financial measures that are not calculated in accordance with the United States Generally Accepted Accounting Principles (“GAAP”) to supplement its unaudited interim condensed consolidated financial statements presented on a GAAP basis. These non-GAAP financial measures are reconciled from their most directly comparable financial measures determined in accordance with GAAP as follows:
| For
the Three Months Ended March 31, |
||||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| JPY | JPY | US$ | ||||||||||
| INCOME FROM OPERATIONS | 166,146,066 | 153,308,100 | 963,717 | |||||||||
| Plus: acquisition-related costs(a) | - | 14,505,152 | 91,181 | |||||||||
| Adjusted INCOME FROM OPERATIONS | 166,146,066 | 167,813,252 | 1,054,898 | |||||||||
| (a) | Represents acquisition-related costs incurred in connection with the Company’s acquisition activities, including transaction-related costs, legal, financial and tax due diligence expenses, integration costs and other acquisition-related costs. These costs have been added back for normalization purposes as they are not considered reflective of the Company’s core operating performance. |
The Company’s primary non-GAAP financial measures and corresponding metrics reflect how it evaluates its current and prior year operating results. As new events or circumstances arise, these definitions could change. When the Company’s definitions change, it provides the updated definitions. When items no longer impact its current or future presentation of non-GAAP operating results, it removes these items from its non-GAAP definitions.
Adjusted income from operations is a financial measure that is not calculated in accordance with GAAP (collectively referred to as the “non-GAAP financial measures”), and the use of the term adjusted income from operations may differ from similar measures reported by other companies and may not be comparable to other similarly titled measures. The Company believes the non-GAAP financial measure provides investors with useful information with respect to its historical operations. The Company presents the non-GAAP financial measure as a supplemental performance measure because the Company believes it facilitates a comparative assessment of the Company’s operating performance relative to its performance based on its results under GAAP, while isolating the effects of some items that vary from period to period. Specifically, adjusted income from operations allows the Company to assess its performance without the impact of the specifically identified items that it believes do not directly reflect its core operations, including acquisition-related costs and other items that management does not consider reflective of its core operating performance. The non-GAAP financial measure also functions as a key performance indicator used to evaluate the Company’s operating performance internally, and it is used in connection with the determination of incentive compensation for management, including executive officers.
3
As the Company’s initial public offering was completed during the fiscal year ended December 31, 2025, and the related listing-related and transformational expenses were specific to its initial public offering and related transformation activities, the Company does not expect to incur such expenses in the fiscal year ending December 31, 2026 or future periods. Accordingly, beginning with the fiscal year ending December 31, 2026, the Company has revised its presentation of adjusted income from operations and removed listing-related and transformational expenses from the adjustments to adjusted income from operations for all historical periods presented.
Adjusted income from operations is not a measurement of the Company’s financial performance under GAAP and should not be considered in isolation or as an alternative to income from operations or any other financial statement data presented as indicators of financial performance or liquidity, each as presented in accordance with GAAP. Consequently, the Company’s non-GAAP financial measure should be considered together with its unaudited interim condensed consolidated financial statements, which are prepared in accordance with GAAP. The Company understands that although adjusted income from operations is frequently used by securities analysts, lenders and others in their evaluation of companies, it has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of the Company’s results as reported under GAAP. Some of these limitations are: adjusted income from operations does not fully reflect the Company’s cash expenditures, future requirements for capital expenditures or contractual commitments; adjusted income from operations does not reflect changes in, or cash requirements for, the Company’s working capital needs; adjusted income from operations does not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on debt; and, although depreciation and amortization expenses are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and adjusted income from operations does not reflect any cash requirements for such replacements.
Because of these limitations, adjusted income from operations should not be considered as discretionary cash available to the Company to reinvest in the growth of the Company’s business or as measure of cash that will be available to the Company to meet its obligations.
Forward-Looking Statements
Certain statements in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company’s current expectations and projections about future events that the Company believes may affect its financial condition, results of operations, business strategy, and financial needs. Investors can find many (but not all) of these statements by the use of words such as “approximates,” “believes,” “hopes,” “expects,” “anticipates,” “estimates,” “projects,” “intends,” “plans,” “will,” “would,” “should,” “could,” “may,” or other similar expressions in this press release. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. These statements are subject to uncertainties and risks, including, but not limited to, the uncertainties related to market conditions, and other factors discussed in the “Risk Factors” section of the registration statement filed with the U.S. Securities and Exchange Commission (the “SEC”). Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the registration statement and other filings with the SEC. Additional factors are discussed in the Company’s filings with the SEC, which are available for review at www.sec.gov.
For more information, please contact:
LEIFRAS Co., Ltd.
Investor Relations Department
Email: IR@leifras.co.jp
Ascent Investor Relations LLC
Tina Xiao
Phone: +1-646-932-7242
Email: investors@ascent-ir.com
4
LEIFRAS CO., LTD. AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
| December 31, | March 31, | March 31, | ||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| JPY | JPY | US$ | ||||||||||
| (Unaudited) | (Unaudited) | |||||||||||
| ASSETS | ||||||||||||
| CURRENT ASSETS | ||||||||||||
| Cash | 2,524,082,266 | 2,477,567,162 | 15,574,347 | |||||||||
| Accounts receivable, net | 731,083,491 | 786,776,869 | 4,945,794 | |||||||||
| Inventories, net | 21,578,477 | 13,735,828 | 86,345 | |||||||||
| Prepaid expenses | 158,040,280 | 253,474,342 | 1,593,377 | |||||||||
| Other current assets | 38,219,685 | 45,019,332 | 282,998 | |||||||||
| TOTAL CURRENT ASSETS | 3,473,004,199 | 3,576,573,533 | 22,482,861 | |||||||||
| NON-CURRENT ASSETS | ||||||||||||
| Property and equipment, net | 96,456,471 | 99,659,727 | 626,475 | |||||||||
| Intangible assets, net | 29,631,015 | 26,881,643 | 168,982 | |||||||||
| Operating lease right-of-use assets | 482,694,859 | 477,316,039 | 3,000,478 | |||||||||
| Finance lease right-of-use assets | 236,908,226 | 227,724,404 | 1,431,509 | |||||||||
| Long-term deposits | 150,216,792 | 155,815,142 | 979,477 | |||||||||
| Long-term investment | 5,736,500 | 25,056,000 | 157,506 | |||||||||
| Deferred tax assets, net | 164,082,227 | 147,566,531 | 927,625 | |||||||||
| Goodwill | 27,999,994 | 27,999,994 | 176,012 | |||||||||
| Other non-current assets | 8,470,398 | 9,030,715 | 56,768 | |||||||||
| TOTAL NON-CURRENT ASSETS | 1,202,196,482 | 1,197,050,195 | 7,524,832 | |||||||||
| TOTAL ASSETS | 4,675,200,681 | 4,773,623,728 | 30,007,693 | |||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||
| CURRENT LIABILITIES | ||||||||||||
| Short-term loans | 100,000,000 | 100,000,000 | 628,615 | |||||||||
| Current portion of long-term loans | 151,030,000 | 114,826,000 | 721,813 | |||||||||
| Bond payable, current | 40,000,000 | 80,000,000 | 502,892 | |||||||||
| Accounts payable | 196,849,154 | 215,326,762 | 1,353,575 | |||||||||
| Accrued liabilities | 1,160,996,435 | 1,068,999,496 | 6,719,886 | |||||||||
| Income tax payable | 43,499,500 | 28,193,977 | 177,232 | |||||||||
| Contract liabilities, current | 154,074,620 | 79,376,490 | 498,972 | |||||||||
| Operating lease liabilities, current | 138,880,117 | 145,575,433 | 915,108 | |||||||||
| Finance lease liabilities, current | 88,017,810 | 88,531,359 | 556,521 | |||||||||
| Other current liabilities | 176,592,537 | 193,682,649 | 1,217,517 | |||||||||
| TOTAL CURRENT LIABILITIES | 2,249,940,173 | 2,114,512,166 | 13,292,131 | |||||||||
| NON-CURRENT LIABILITIES | ||||||||||||
| Long-term loans, net of current portion | 24,422,000 | 8,370,000 | 52,615 | |||||||||
| Bond payable, non-current | 18,175,440 | 171,589,348 | 1,078,635 | |||||||||
| Contract liabilities, non-current | 12,817,448 | 8,660,455 | 54,441 | |||||||||
| Operating lease liabilities, non-current | 347,365,643 | 332,648,745 | 2,091,078 | |||||||||
| Finance lease liabilities, non-current | 144,989,192 | 135,920,091 | 854,414 | |||||||||
| Assets retirement obligations | 30,775,915 | 30,880,049 | 194,117 | |||||||||
| TOTAL NON-CURRENT LIABILITIES | 578,545,638 | 688,068,688 | 4,325,300 | |||||||||
| TOTAL LIABILITIES | 2,828,485,811 | 2,802,580,854 | 17,617,431 | |||||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||||||
| SHAREHOLDERS’ EQUITY | ||||||||||||
| Ordinary shares, 80,000,000 shares authorized; 26,560,660 shares issued and 26,160,619 shares outstanding as of December 31, 2025 and March 31, 2026 | 409,833,241 | 409,833,241 | 2,576,271 | |||||||||
| Additional paid-in capital | 786,906,631 | 786,906,631 | 4,946,610 | |||||||||
| Treasury shares, 400,041 shares as of December 31, 2025 and March 31, 2026 | (100,012,265 | ) | (100,012,265 | ) | (628,692 | ) | ||||||
| Retained earnings | 749,987,263 | 874,315,267 | 5,496,073 | |||||||||
| TOTAL SHAREHOLDERS’ EQUITY | 1,846,714,870 | 1,971,042,874 | 12,390,262 | |||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | 4,675,200,681 | 4,773,623,728 | 30,007,693 | |||||||||
5
LEIFRAS CO., LTD. AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME
| For the three months ended March 31, |
||||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| JPY | JPY | US$ | ||||||||||
| NET REVENUE | 2,686,214,407 | 2,954,324,120 | 18,571,311 | |||||||||
| Cost of revenue | (1,895,769,261 | ) | (2,002,020,892 | ) | (12,584,995 | ) | ||||||
| GROSS PROFIT | 790,445,146 | 952,303,228 | 5,986,316 | |||||||||
| Selling, general, and administrative expenses | (624,299,080 | ) | (798,995,128 | ) | (5,022,599 | ) | ||||||
| INCOME FROM OPERATIONS | 166,146,066 | 153,308,100 | 963,717 | |||||||||
| OTHER INCOME (EXPENSE) | ||||||||||||
| Interest income | 1,202,167 | 2,569,001 | 16,149 | |||||||||
| Interest expense | (4,701,295 | ) | (2,615,163 | ) | (16,439 | ) | ||||||
| Dividend income | 87,500 | 87,500 | 550 | |||||||||
| Grant income | 8,524,957 | 12,400,890 | 77,954 | |||||||||
| Unrealized loss on short-term investment | (161,000 | ) | - | - | ||||||||
| Unrealized gain on long-term investment | - | 2,735,074 | 17,193 | |||||||||
| Loss on disposal of long-lived assets | (168,969 | ) | (4 | ) | - | |||||||
| Other income (expense), net | (15,705,413 | ) | 852,524 | 5,359 | ||||||||
| Total other income (expense), net | (10,922,053 | ) | 16,029,822 | 100,766 | ||||||||
| INCOME BEFORE INCOME TAX PROVISION | 155,224,013 | 169,337,922 | 1,064,483 | |||||||||
| PROVISION FOR INCOME TAXES | ||||||||||||
| Current | (3,626,835 | ) | (28,494,222 | ) | (179,119 | ) | ||||||
| Deferred | (29,056,916 | ) | (16,515,696 | ) | (103,820 | ) | ||||||
| Total provision for income taxes | (32,683,751 | ) | (45,009,918 | ) | (282,939 | ) | ||||||
| NET INCOME | 122,540,262 | 124,328,004 | 781,544 | |||||||||
| WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES | ||||||||||||
| Basic | 24,910,619 | 26,160,619 | 26,160,619 | |||||||||
| Diluted | 24,913,619 | 26,163,619 | 26,163,619 | |||||||||
| EARNINGS PER SHARE | ||||||||||||
| Basic | 4.92 | 4.75 | 0.03 | |||||||||
| Diluted | 4.92 | 4.75 | 0.03 | |||||||||
6
LEIFRAS CO., LTD. AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| For
the three months ended March 31, |
||||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| JPY | JPY | US$ | ||||||||||
| Cash flows from operating activities | ||||||||||||
| Net income | 122,540,262 | 124,328,004 | 781,544 | |||||||||
| Adjustments to reconcile net income to net cash provided by operating activities | ||||||||||||
| Depreciation and amortization expense | 33,078,421 | 29,860,560 | 187,708 | |||||||||
| Provision for expected credit loss | 2,231,985 | 2,098,333 | 13,190 | |||||||||
| Loss on disposal of property and equipment | 168,969 | 4 | - | |||||||||
| Provision for inventory impairment | 58,982 | 538,926 | 3,388 | |||||||||
| Unrealized loss on short-term investment | 161,000 | - | - | |||||||||
| Unrealized gain on long-term investment | - | (2,735,074 | ) | (17,193 | ) | |||||||
| Unrealized foreign currency exchange loss | 1,325,417 | - | - | |||||||||
| Other non-cash expenses (income) | (830,871 | ) | 685,062 | 4,307 | ||||||||
| Deferred tax expense | 29,056,916 | 16,515,696 | 103,820 | |||||||||
| Changes in operating assets and liabilities | ||||||||||||
| Accounts receivable, net | (34,680,981 | ) | (57,791,711 | ) | (363,287 | ) | ||||||
| Inventories | 792,788 | 7,303,723 | 45,912 | |||||||||
| Prepaid expenses | (114,612,715 | ) | (95,467,062 | ) | (600,120 | ) | ||||||
| Long-term deposits | (2,019,600 | ) | (5,598,350 | ) | (35,192 | ) | ||||||
| Other current assets | (17,654,864 | ) | (6,799,647 | ) | (42,744 | ) | ||||||
| Other non-current assets | 271,028 | (560,317 | ) | (3,522 | ) | |||||||
| Accounts payable | 218,656 | 18,477,608 | 116,153 | |||||||||
| Accrued liabilities | (99,770,693 | ) | (91,996,939 | ) | (578,306 | ) | ||||||
| Contract liabilities | (85,961,299 | ) | (78,855,123 | ) | (495,695 | ) | ||||||
| Operating lease liabilities | (416,121 | ) | (2,642,777 | ) | (16,613 | ) | ||||||
| Income tax payable | (72,177,900 | ) | (15,305,523 | ) | (96,213 | ) | ||||||
| Amount due to a director | (1,000,000 | ) | - | - | ||||||||
| Other current liabilities | (264,810 | ) | 17,090,112 | 107,431 | ||||||||
| Net cash used in operating activities | (239,485,430 | ) | (140,854,495 | ) | (885,432 | ) | ||||||
| Cash flows from investing activities | ||||||||||||
| Purchase of investment securities | - | (16,584,426 | ) | (104,252 | ) | |||||||
| Purchase of property and equipment | (1,795,476 | ) | (5,821,892 | ) | (36,597 | ) | ||||||
| Purchase of intangible assets | (3,085,000 | ) | (132,800 | ) | (835 | ) | ||||||
| Net cash used in investing activities | (4,880,476 | ) | (22,539,118 | ) | (141,684 | ) | ||||||
| Cash flows from financing activities | ||||||||||||
| Payment of finance lease liabilities | (20,256,439 | ) | (23,698,391 | ) | (148,972 | ) | ||||||
| Repayment of bank loans | (103,388,000 | ) | (52,256,000 | ) | (328,489 | ) | ||||||
| Proceeds from bond payable | - | 192,832,900 | 1,212,176 | |||||||||
| Payment of deferred IPO costs | (58,000,138 | ) | - | - | ||||||||
| Net cash (used in) provided by financing activities | (181,644,577 | ) | 116,878,509 | 734,715 | ||||||||
| Effect of exchange rate | (1,325,417 | ) | - | - | ||||||||
| Net decrease in cash | (427,335,900 | ) | (46,515,104 | ) | (292,401 | ) | ||||||
| Cash at the beginning of period | 2,538,554,638 | 2,524,082,266 | 15,866,748 | |||||||||
| Cash at the end of period | 2,111,218,738 | 2,477,567,162 | 15,574,347 | |||||||||
| Supplementary cash flow information | ||||||||||||
| Cash paid for income taxes | 75,804,735 | 43,799,745 | 275,332 | |||||||||
| Cash paid for interest expenses | 4,345,433 | 1,930,021 | 12,132 | |||||||||
7
Non-GAAP Financial Measures and Reconciliation
Adjusted INCOME FROM OPERATIONS
| For
the Three Months Ended March 31, |
||||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| JPY | JPY | US$ | ||||||||||
| INCOME FROM OPERATIONS | 166,146,066 | 153,308,100 | 963,717 | |||||||||
| Plus: acquisition-related costs(a) | - | 14,505,152 | 91,181 | |||||||||
| Adjusted INCOME FROM OPERATIONS | 166,146,066 | 167,813,252 | 1,054,898 | |||||||||
| (a) | Represents acquisition-related costs incurred in connection with the Company’s acquisition activities, including transaction-related costs, legal, financial and tax due diligence expenses, integration costs and other acquisition-related costs. These costs have been added back for normalization purposes as they are not considered reflective of the Company’s core operating performance. |
8
FAQ
How did LEIFRAS (LFS) perform financially in Q1 2026?
What drove LEIFRAS (LFS) revenue growth in Q1 2026?
What profit metrics did LEIFRAS (LFS) report for Q1 2026?
What 2026 guidance did LEIFRAS (LFS) provide for revenue and income?
What acquisitions did LEIFRAS (LFS) announce after March 31, 2026?
How is LEIFRAS (LFS) funding growth and managing its balance sheet?
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