Healthcare Technologies Inc. (MRM) details 2025 results and new convertible bonds
Rhea-AI Filing Summary
Healthcare Technologies Inc. has called its 26th Ordinary General Meeting of Shareholders for May 29, 2026 to approve Japanese GAAP non‑consolidated financial statements for fiscal 2025 and elect five directors, including two outside directors. The board unanimously recommends voting “FOR” all proposals and stresses the importance of proxy voting for holders unable to attend in Tokyo.
Under Japanese GAAP, fiscal 2025 revenue was JPY 604,533 thousand and net income was JPY 56,058 thousand, with a capital adequacy ratio of 32.11%. The company continued reorganizing its relaxation salon operations, expanded its healthtech and rehabilitation businesses, and raised JPY 400 million via 3rd series unsecured convertible‑type bonds. It also issued a 4th series of convertible‑type bonds with a balance of JPY 275 million and maintained total assets of JPY 4,153,929 thousand and net assets per common share of JPY 168.32 at year‑end.
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Insights
Routine meeting notice with modest JGAAP profit and added convertible debt.
Healthcare Technologies Inc. is convening its 26th shareholder meeting to approve Japanese GAAP non‑consolidated accounts and elect five directors, keeping two outside directors on the board. This is standard corporate governance for a Japanese holding company with overseas ADS listings.
For 2025, Japanese GAAP revenue was JPY 604,533 thousand and net income was JPY 56,058 thousand, yielding a capital adequacy ratio of 32.11%. Total assets stood at JPY 4,153,929 thousand and net assets at JPY 1,333,962 thousand, indicating a positive equity base.
Financing actions included issuing the 3rd series of unsecured convertible‑type bonds with stock acquisition rights totaling JPY 400 million and a 4th series with a balance of JPY 275 million. These instruments provide funding but introduce potential future share issuance. U.S. GAAP consolidated results will appear later in the Form 20‑F, which will give a fuller picture of group performance.
Key Figures
Key Terms
Unsecured Convertible-Type Corporate Bonds with Stock Acquisition Rights financial
Digital Preventative Healthcare financial
Adjusted Consolidated Revenues financial
Companies Act of Japan regulatory
capital adequacy ratio financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of April, 2026
Commission File Number 001-39809
MEDIROM HEALTHCARE TECHNOLOGIES INC.
(Translation of registrant’s name into English)
2-3-1 Daiba, Minato-ku
Tokyo 135-0091, Japan
(Address of principal executive office)
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
INFORMATION CONTAINED IN THIS FORM 6-K REPORT
Convocation of Ordinary General Meeting of Shareholders of MEDIROM Healthcare Technologies Inc. for Fiscal Year 2025; Proxy Materials
In accordance with the rules and regulations of the Japanese Companies Act, on April 16, 2026, MEDIROM Healthcare Technologies Inc. (the “Company”) circulated a notice and accompanying information (the “Notice”), including proxy card and voting instructions, to all holders of its common shares and American Depositary Shares representing such common shares, with respect to its 26th Ordinary General Meeting of Shareholders (the “Meeting”) to be held in Tokyo, Japan on May 29, 2026.
Copies of the Notice and accompanying proxy cards for holders of common shares (the “Japanese Card”) and holders of American Depositary Shares (the “ADS Card”) and voting instructions are being furnished as Exhibits 99.1, 99.2 and 99.3, respectively, to this report on Form 6-K and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section.
This report on Form 6-K does not constitute a proxy solicitation. Shareholders wishing to attend, and/or vote their shares at, the Meeting should refer to, and follow the instructions set forth in, the Notice and the Japanese Card or the ADS Card, as the case may be.
EXHIBIT INDEX
Exhibit No. | | Description |
99.1 | | Notice of Convocation of the 26th Ordinary General Meeting of Shareholders |
99.2 | | Proxy card and voting instructions for holders of common shares |
99.3 | | Proxy card and voting instructions for holders of American Depositary Shares |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| MEDIROM HEALTHCARE TECHNOLOGIES INC. | |
Date: April 22, 2026 | | |
| By: | Fumitoshi Fujiwara |
| | Name: Fumitoshi Fujiwara |
| | Title: Chief Financial Officer |
Exhibit 99.1
Annex A to Notice of Convocation
【Note】 | This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the Japanese original shall prevail. The Company assumes no responsibility for this translation or for direct, indirect or any other forms of damages arising from the translation. |
Please note that the attached financial statements have been prepared in accordance with Japanese law and therefore include only the non-consolidated financial statements of MEDIROM Healthcare Technologies Inc., a holding company. As a result, they differ from the consolidated financial statements under U.S. GAAP. Please refer to any separately disclosed information for further details. |
Ticker: MRM
April 16, 2026
MEDIROM Healthcare Technologies Inc.
Tradepia Odaiba 2-3-1 Daiba, Minato-ku,
Tokyo, Japan, 135-0091
Notice of Convocation of the 26th Ordinary General Meeting of Shareholders
Dear Shareholders:
You are cordially invited to attend the 26th Ordinary General Meeting of Shareholders of MEDIROM Healthcare Technologies Inc. (the “Company”). The meeting will be held at the head office of the Company (16F, Tradepia Odaiba, 2-3-1 Daiba, Minato-ku, Tokyo, Japan) on Friday, May 29, 2026 at 9:00 a.m., Japan Standard Time. At the meeting, you will be asked to consider the following proposals: (1) to approve the Company’s financial statements; (2) to re-elect four directors and elect one new director, each to serve for the ensuing year as members of the Board of Directors. The accompanying Details of the 26th Ordinary General Meeting of Shareholders describe these matters in more detail. We urge you to read this information carefully. The Board of Directors recommends a vote “FOR” each of the proposals.
YOUR VOTE IS VERY IMPORTANT. In the event you cannot attend the meeting in person, you may vote your common shares by completing, dating and signing the proxy card enclosed herein. To do so, please review the accompanying Reference Documents for General Meeting of Shareholders, and make sure to mail the completed proxy card in accordance with the instructions included in this notice of convocation.
Details of the 26th Ordinary General Meeting of Shareholders
1. | Date and Time: Friday, May 29, 2026, at 9:00 a.m., Japan Standard Time |
2. | Venue: Head Office of the Company (16F, Tradepia Odaiba, 2-3-1 Daiba, Minato-ku, Tokyo, Japan) |
3. | Agenda: |
Matters to be reported:
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The Business Report for the 26th fiscal year (from January 1, 2025 to December 31, 2025). The Business Report and the Unaudited Non-Consolidated Financial Statements are attached to this notice of convocation as Annex A.
Matters to be resolved:
Proposal 1: To approve the Company’s Non-Consolidated Financial Statements for the 26th fiscal year (from January 1, 2025 to December 31, 2025), which financial statements are based upon our statutory non-consolidated financial results prepared in accordance with Japanese generally accepted accounting principles (“GAAP”), and have not been reviewed or audited by an independent auditor under Japanese generally accepted auditing standards (“GAAS”), U.S. GAAS, or otherwise. As such, these financial results and financial statements may differ in material respects from the audited consolidated financial results and financial statements prepared in accordance with U.S. GAAP that will be reported at a later date and included in our Annual Report on Form 20-F to be filed with the U.S. Securities and Exchange Commission (the “SEC”) and available at www.sec.gov. The discussion of our financial results and unaudited non-consolidated financial statements under Japanese GAAP is presented to our shareholders and holders of American Depository Shares, each representing one (1) common share of the Company (the “ADSs”), solely for purposes of compliance with requirements under the Japanese Companies Act in connection with our annual meeting of shareholders.;
Proposal 2: To re-elect four (4) directors and elect one (1) new director, each to serve for the ensuing year as members of the Board of Directors.
Recommendation of the Board
Our Board of Directors unanimously recommends that the shareholders and ADS holders vote “FOR” each of the proposals listed above.
* | If you attend the meeting in person, please complete the proxy card enclosed herein and submit the completed proxy card at the reception desk at the meeting location on the day of the meeting. |
* | If you are a holder of the common shares of the Company and you cannot attend the meeting in person, you may vote your common shares by completing, dating and signing the proxy card enclosed herein. To do so, please review the accompanying Reference Documents for General Meeting of Shareholders, and make sure to mail the completed proxy card for the Company to receive NO LATER THAN 6:00 P.M., JAPAN STANDARD TIME, ON THURSDAY, MAY 28, 2026. |
* | If you are a holder of the ADSs, each representing one (1) common share of the Company, you may instruct Bank of New York Mellon, as the depositary for the ADSs, as to how to vote the number of deposited common shares your ADSs represent. The accompanying Reference Documents for General Meeting of Shareholders describe the matters to be voted on and explain how you, as an ADS holder, may instruct the depositary as to how to vote. For voting instructions to be valid, they must reach the depositary by the date and time set by the depositary (which shall be NO LATER THAN 12 P.M., EASTERN STANDARD TIME, ON THURSDAY, MAY 21, 2026). The depositary will try, as far as practical, subject to the laws of Japan and the provisions of our Articles of Incorporation or similar documents, to vote or to have its agents vote the common shares as instructed by you. |
* | The depositary will not exercise any discretion in voting the deposited common shares and it will only vote or attempt to vote as instructed, with the exception that, under certain circumstances, the depositary may give a discretionary proxy to a person designated by us to vote the number of common shares of certain ADS holders. |
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Reference Documents for General Meeting of Shareholders
Proposal 1: To approve the Company’s Financial Statements for the 26th Fiscal Year
I. Reason for Proposal and Details
This proposal requests your approval of the financial statements for the Company’s 26th fiscal year, in accordance with Article 438, Paragraph 2 of the Companies Act of Japan (the “Companies Act”). As the Company has not engaged an accounting auditor since the 25th fiscal year, the Companies Act requires that the financial statements, which have been approved by the Board of Directors, be submitted to the General Meeting of Shareholders for approval. The contents of the balance sheet, income statement, statement of changes in shareholders’ equity, and the individual notes are as described in the attached documents.
II. Board Recommendation
Our Board of Directors unanimously recommends that you vote “FOR” this proposal.
Proposal 2: To re-elect four (4) directors and elect one (1) new director, each to serve for the ensuing year as members of the Board of Directors
I. Details of Proposal
The terms of office of all four (4) current members of the Company’s Board of Directors will expire at the conclusion of this Ordinary General Meeting of Shareholders. Accordingly, in order to further strengthen the Company’s management structure, we are seeking to increase the number of directors by one (1) and to re-elect four (4) directors and elect one (1) new director, for a total of five (5) directors, including two (2) outside directors. The nominees for director are as described below.
Name | Biography, Position, Responsibilities, and Significant Concurrent Positions, etc. | Number of Shares Held (as of December 31, 2025) |
Kouji Eguchi (July 27, 1973) | March 1996: Bachelor of Oceanography, Department of Marine Resources, Tokai University April 1996: Curtis Holdings, Inc. December 1999: Senior Managing Director, PriceDown.com, Inc. (Curtis Holdings’s subsidiary) July 2000: Founder and Representative Director, MEDIROM Healthcare Technologies Inc. (current) June 2010: Director, the Japan Relaxation Industry Association (current) May 2021: Representative Director, SAWAN CO., LTD. (current) July 2023: Representative Director, MEDIROM MOTHER Labs Inc. June 2024: Representative Director, MEDIROM Rehab Solutions Inc. January 2025: Representative Director, MEDIROM Wellness Co. (current) Significant Concurrent Positions Representative Director, MEDIROM Wellness Co. Representative Director, SAWAN CO. LTD. Director, the Japan Relaxation Industry Association | 1,925,003 Common Shares 1 Class A Share |
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Fumitoshi Fujiwara (December 28, 1965） | March 1989: Bachelor in Law, Meiji Gakuin University April 1989: Shuwa Corporations April 1993: Koei Tecmo Holdings Co., Ltd. December 1998: CFO, Executive Officer Management Division June 2000: Director and CFO, Spiralstar Japan, Inc. June 2002: CEO, AC Capital Inc. November 2009: Founder & CEO, Eaglestone Capital Management (current) March 2017: Director and CFO, MEDIROM Healthcare Technologies Inc. (current) April 2023: Representative Member, Linden Capital Partners LLC (current) July 2023: Representative Director, MEDIROM Shared Services Inc. (current) March 2024: Corporate Auditor, MEDIROM MOTHER Labs Inc. (current) September 2024: Outside Director, SBC Medical Holdings Group Inc. (current) Significant Concurrent Positions Representative Director, Eaglestone Capital Management Representative Member, Linden Capital Partners LLC Representative Director, MEDIROM Shared Services Inc. Corporate Auditor, MEDIROM MOTHER Labs Inc. Outside Director, SBC Medical Holdings Group Inc. | 40,000 Common Shares |
Yoshio Uekusa (December 3, 1990) | March 2014: Graduated from Keio University, Faculty of Economics April 2014: Joined Re.Ra.Ku Co., Ltd. (currently MEDIROM Healthcare Technologies Inc.) January 2017: CEO Assistant and New Graduate Recruitment Team June 2019: General Manager of Recruitment Group June 2022: General Manager of MOTHER Group July 2023: Representative Director, MEDIROM MOTHER Labs Inc. (current) Significant Concurrent Positions Representative Director, MEDIROM MOTHER Labs Inc. | 28,837 Common Shares |
Tomoya Ogawa (November 9, 1976) Outside Director | September 1999: Bachelor of Economics, Tokyo University September 2001: Monitor Group Tokyo Branch April 2004: Master in Law, Hitotsubashi University April 2006: Legal Training Institute September 2007: Abe, Ikubo & Katayama Law Office December 2010: DeNA Inc. March 2014: Outside Director, MEDIROM Healthcare Technologies Inc. (current) December 2014: Director, Akatsuki Corporation December 2020: Founder & Representative Director, Kreation Inc. (current) Significant Concurrent Positions Representative Director, Kreation Inc. Reason for Election Mr. Tomoya Ogawa has abundant experience as a lawyer, expertise in a broad area of law and a track record as CFO and director of a listed company, and we believe Mr. Ogawa can provide advice, direction and supervision to our management in a proper manner. For this reason, we consider Mr. Ogawa to be an excellent fit for an outside director position with the Company and believe he will be able to perform his duties as an outside director. | 28,500 Common Shares |
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Akira Nojima (May 23, 1964) Outside Director | March 1988: Bachelor in Law, Meiji Gakuin University April 1988: Recruit Holdings Co., Ltd. April 2013: Visiting Professor, May Ushiyama Academy’s Hollywood Graduate School (current) January 2015: Director and CEO, No Track Inc. (current) January 2015: Advisor, Japan Beauty Coordinator Association (current) April 2016: Director, Japan Academy of Beauty Business (current) January 2018: Vice President, Japan Cosmetic Licensing Association (current) January 2020: Advisor, Customer Loyalty Association (current) March 2020: Director, MEDIROM Healthcare Technologies Inc. (current) April 2021: Visiting Professor, Professional University of Information and Management for Innovation (current) April 2021: Outside Corporate Auditor, GO TODAY SHAiRE SALON Inc. (current) July 2022: Member of Audit Committee, Beauty Garage Inc. (current) September 2022: Outside Director, Atelier M H Co., Ltd. (current) February 2023: Outside Director, Kabushiki Kaisha soeasy (current) July 2024: Outside Director, ZACC Kabushiki Kaisha (current) January 2025: Outside Director, Jet Set Co. Ltd. (current) Significant Concurrent Positions Visiting Professor, May Ushiyama Academy’s Hollywood Graduate School Director and CEO, No Track Inc. Visiting Professor, Professional University of Information and Management for Innovation Outside Corporate Auditor, GO TODAY SHAiRE SALON Inc. Member of Audit Committee, Beauty Garage Inc. Outside Director, Atelier M H Co., Ltd. Outside Director, Kabushiki Kaisha soeasy Outside Director, ZACC Kabushiki Kaisha Outside Director, Jet Set Co. Ltd. Reason for Election Mr. Akira Nojima has broad experience and expertise in management and serving on boards of directors for various organizations in Japan and has an especially high level of knowledge in the field of healthcare. We believe that Mr. Nojima can provide advice, direction and supervision to our management in a proper manner. For this reason, we consider him to be an excellent fit for an outside director position with the Company and believe he will be able to perform his duties as an outside director. | 1,200 Common Shares |
Note 1: There is no conflict of interest between each director nominee and the Company.
Note 2: The Company has obtained the consent of each director nominee to assume the office, subject to the approval of this proposal.
Note 3: The Company has purchased a limited liability insurance policy for the directors and officers as stipulated under Article 430-3, Paragraph 1 of the Companies Act, which provides that the insured shall be liable for damages and litigation expenses incurred by the insured in connection with the performance of his/her duties under the law. All premiums are paid by the Company. If the director nominee is elected as a director, he/she will be included as an insured under the policy and the policy will be renewed with the same coverage during his/her term of office.
Note 4: At present, Mr. Tomoya Ogawa and Mr. Akira Nojima are outside directors of the Company and the length of time they have served in such position is cumulatively 12 years and 6 years as of the end of this meeting, respectively.
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Note 5: The number of common shares of the Company held by Mr. Kouji Eguchi and Mr. Yoshio Uekusa includes shares that he indirectly holds, such as ADSs.
II. Board Recommendation
Our Board of Directors unanimously recommends that you vote “FOR” this proposal.
Forward-Looking Statements in this Notice of Convocation
Certain statements in this notice of convocation (including its attachments) are forward-looking statements for purposes of the safe harbor provisions under the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements may include estimates or expectations about the Company’s possible or assumed operational results, financial condition, business strategies and plans, market opportunities, competitive position, industry environment, and potential growth opportunities. In some cases, forward-looking statements can be identified by terms such as “may,” “will,” “should,” “design,” “target,” “aim,” “hope,” “expect,” “could,” “intend,” “plan,” “anticipate,” “estimate,” “believe,” “continue,” “predict,” “project,” “potential,” “goal,” or other words that convey the uncertainty of future events or outcomes. These statements relate to future events or to the Company’s future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, levels of activity, performance, or achievements to be different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond the Company’s control and which could, and likely will, affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects the Company’s current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to the Company’s operations, results of operations, growth strategy and liquidity. Some of the factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements in this notice of convocation include:
· | the Company’s ability to achieve its development goals for its business and execute and evolve its growth strategies, priorities and initiatives; |
· | the Company’s ability to sell certain of its owned salons to investors, and receive management fees from such sold salons, on acceptable terms; |
· | changes in Japanese and global economic conditions and financial markets, including their effects on the Company’s expansion in Japan and certain overseas markets; |
· | the Company’s ability to achieve and sustain profitability in its Digital Preventative Healthcare Segment; |
· | the fluctuation of foreign exchange rates, which affects the Company’s expenses and liabilities payable in foreign currencies; |
· | the Company’s ability to hire and train a sufficient number of therapists and place them at salons in need of additional staffing; |
· | changes in demographic, unemployment, economic, regulatory or weather conditions affecting the Tokyo region of Japan, where the Company’s relaxation salon base is geographically concentrated; |
· | the Company’s ability to maintain and enhance the value of its brands and to enforce and maintain its trademarks and protect its other intellectual property; |
· | the financial performance of the Company’s franchisees and the Company’s limited control with respect to their operations; |
· | the Company’s ability to raise additional capital on acceptable terms or at all; |
· | the Company’s level of indebtedness and potential restrictions on the Company under the Company’s debt instruments; |
· | changes in consumer preferences and the Company’s competitive environment; |
· | the Company’s ability to respond to natural disasters, such as earthquakes and tsunamis, and to global pandemics, such as COVID-19; and |
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· | the regulatory environment in which the Company operates. |
More information on these risks and other potential factors that could affect the Company’s business, reputation, results of operations, financial condition, and stock price is included in the Company’s filings with the SEC, including in the “Risk Factors” and “Operating and Financial Review and Prospects” sections of the Company’s most recently filed periodic report on Form 20-F and subsequent filings, which are available on the SEC website at www.sec.gov. The Company assumes no obligation to update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ from those anticipated in these forward-looking statements, even if new information becomes available in the future.
[English Translation of Business Report Originally Issued in the Japanese Language]
【Note】 This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the Japanese original shall prevail. The Company assumes no responsibility for this translation or for direct, indirect or any other forms of damages arising from the translation.
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Fiscal Year 2025 Business Report
(From January 1 to December 31, 2025)
Forward-Looking Statements
The information contained herein includes forward-looking statements. These statements relate to future events or to our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. You should not place undue reliance on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could, and likely will, materially affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects our current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. We assume no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. The safe harbor for forward-looking statements contained in the Securities Litigation Reform Act of 1995 (the “Act”) protects companies from liability for their forward-looking statements if they comply with the requirements of the Act. See “Forward-Looking Statements in this Notice of Convocation” in the notice of convocation to which this business report is attached.
1. | Current status of MEDIROM Healthcare Technologies Inc. (the “Company”, “we”, “us” and “our”) |
(1) | Business Progress and Activities |
During our 26th fiscal year (from January 1, 2025 to December 31, 2025), the Japanese economy continued on a moderate recovery trend, supported by personal consumption reflecting improved employment and income conditions, as well as further expansion in inbound tourism demand. However, factors such as rising import prices driven by the depreciation of the yen and unstable international conditions have continued to create uncertainty for both domestic and international economies and markets.
Under these circumstances, we continued to strengthen our structure as a pure holding company following the transition in July 2023 and focused on improving group management efficiency and expanding our revenue base. Through the reorganization of certain of our subsidiaries effective January 1, 2025 (integration into MEDIROM Wellness Co.), we consolidated the management structure of the relaxation salon segment and promoted the optimal allocation of management resources.
With respect to the relaxation salon operation segment, primarily through MEDIROM Wellness Co., we continued to work on shortening the lead time before newly hired staff are deployed to salons through improvements in our training and education programs, and strengthening recruitment of contract-based therapists, in response to the intensification of competition for talent in the job market. We also promoted the adoption of our in-house payment system “Re.Ra.Ku PAY” to improve customer convenience and enhance the efficiency of salon operations through cashless payments. Furthermore, in commemoration of our 25th anniversary, we held a special customer appreciation event and offered “Special Value Tickets” to strengthen customer relationships and drive customer acquisition. In terms of new salon openings, we continued working to close certain existing salons and open new salons with caution, resulting in a total of 292 salons in the group as of December 31, 2025. Additionally, sales of salons to investors also grew steadily, with MEDIROM Wellness Co. selling 58 salons (including resales and brokering sales between investors), respectively, during the fiscal year.
Furthermore, in August 2025, in collaboration with Hakuhodo Inc., we announced our participation in the “World” protocol promoted by Tools for Humanity (“TFH”), co-founded and chaired by Sam Altman, co-founder of OpenAI. We commenced entry into a new business area contributing to the development of a “proof of humanity” infrastructure for the AI era, through the installation and operation of the World ID authentication device “Orb” at our “Re.Ra.Ku” salons. Subsequently, effective February 2, 2026, this business transitioned to a direct contract with TFH.
With respect to the healthtech segment (which mainly consists of the following operations: government-sponsored specific health guidance program and our MOTHER Bracelet® business), primarily through MEDIROM MOTHER Labs Inc., we
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continued to promote our health guidance program utilizing our internally-developed on-demand health monitoring smartphone application, Lav®, and steadily expanded our client base, which mainly consists of health insurance providers, and as of December 31, 2025, we had entered into contracts with 102 health insurance providers. We also worked to promote MOTHER Bracelet®, the world's self-charging smart tracker, and in light of the severe heat conditions experienced in recent summers, we enhanced our heat illness prevention solution utilizing the device's function to detect changes in physical condition from vital data. As a result, adoption expanded across construction sites with a large proportion of outdoor workers, care facilities and local governments with high monitoring needs, contributing to the resolution of social challenges and advancing the establishment of a business-to-business (BtoB) revenue model.
With respect to the rehabilitation center operation segment, MEDIROM Rehab Solutions Inc. continued to work toward establishing a solid revenue base for the rehabilitation center operation business acquired in the previous fiscal year.
With respect to financing activities, with the aim of flexible financing and strengthening of our financial base, we issued the 3rd series of Unsecured Convertible-Type Corporate Bonds with Stock Acquisition Rights on November 27, 2025 raising a total of JPY 400 million. Through these measures, we have worked to secure a stable financial foundation for future growth investments.
Financial Results Under Japanese GAAP
Note: The following discussion is based upon our statutory non-consolidated financial results prepared in accordance with Japanese generally accepted accounting principles (“GAAP”) which have not been reviewed or audited by an independent auditor. As such, these results may differ in material respects from the financial results and audited consolidated financial statements prepared in accordance with U.S. GAAP that will be reported at a later date and included in our Annual Report on Form 20-F to be filed with the U.S. Securities and Exchange Commission (the “SEC”) and available at www.sec.gov. U.S. GAAP results for the year ended December 31, 2025 remain subject to the completion of management’s reviews and reconciliations and/or adjustments under U.S. GAAP, the Company’s other financial closing procedures, and the audit by the Company’s independent auditor in accordance with the standards of the Public Company Accounting Oversight Board (“PCAOB”). Furthermore, in addition to reflecting the consolidation of entities that is not reflected in these non-consolidated Japanese GAAP financial results, these U.S. GAAP financial statements and results may differ from our Japanese GAAP results due to the completion of the Company’s financial closing procedures, the audit under the standards of the PCAOB, and other developments that may arise during the audit process under the standards of the PCAOB. Accordingly, you should not place undue reliance on this information. See “Important Notice Regarding Japanese GAAP Financial Information” below.
The discussion of financial results below is presented to our shareholders and holders of our American Depositary Shares (“ADSs”) solely for purposes of compliance with requirements under the Japanese Companies Act in connection with our 26th Ordinary General Meeting of Shareholders. For your convenience, information presented in Japanese yen has been translated into U.S. dollars based upon the conversion rate of $1.00 = JPY 156.80, as reported by the Federal Reserve Bank on December 31, 2025.
For the year ended December 31, 2025, the Company recorded (i) net revenues of 604,533 thousand yen (US$3,855 thousand), while the Company recorded net revenue of 778,035 thousand yen (US$4,949 thousand) for the year ended December 31, 2024, (ii) operating income of 61,980 thousand yen (US$395 thousand), while the Company recorded operating income of 116,562 thousand yen (US$740 thousand) for the year ended December 31, 2024, and (iii) ordinary income of 39,893 thousand yen (US$254 thousand), while the Company recorded ordinary income of 115,609 thousand yen (US$734 thousand) for the year ended December 31, 2024, on a non-consolidated basis, under Japanese GAAP. These standalone figures reflect the impact, among other factors, of optimizing our commissioned fees charged to our subsidiaries, following the revision of the store sales fee calculation standards to better manage the group’s overall profit and loss.
Our audited consolidated financial statements for the year ended December 31, 2025 prepared in accordance with U.S. GAAP will be reported at a later date and included in our Annual Report on Form 20-F to be filed with the SEC.
Important Notice Regarding Japanese GAAP Financial Information
The financial results for the year ended December 31, 2025 presented in this business report and the accompanying Japanese GAAP financial statements are prepared solely in accordance with Japanese GAAP on a non-consolidated basis, have not been reviewed or audited under Japanese generally accepted auditing standards (“GAAS”), the standards of the PCAOB or
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U.S. GAAS, and do not present all information necessary for an understanding of the Company’s results of operations for the year ended December 31, 2025. Our U.S. GAAP results for the year ended December 31, 2025 remain subject to the completion of management’s reviews and reconciliations and/or adjustments under U.S. GAAP, the Company’s other financial closing procedures, and the audit by the Company’s independent auditor in accordance with the standards of the PCAOB, and may differ from the Japanese GAAP results for this period due to the completion of the Company’s financial closing procedures, the audit under the standards of the PCAOB, and other developments that may arise during the audit process.
The Company expects that its audited consolidated U.S. GAAP results for the year ended December 31, 2025, in addition to reflecting the consolidation of entities that is not reflected in the non-consolidated Japanese GAAP financial results, may differ from the Japanese GAAP results contained in this business report and the accompanying Japanese GAAP financial statements in the following line items, among others: (1) increase/decrease in amortization expenses recognized from the difference in the accounting treatment of salon purchases; (2) recognition of impairment losses on our long-lived salon assets, goodwill and other intangible assets; (3) increase/decrease in allowance or provisional expenses; and (4) the accounting treatment of the Company’s sales of shares of one of its subsidiaries.
The Japanese GAAP financial results included in this business report have been prepared by and are the responsibility of the Company’s management. In addition, the Japanese GAAP financial results have not been reviewed or audited by an independent auditor and therefore do not reflect any potential changes that may have resulted had such financial results been audited under Japanese GAAS. The Company’s independent U.S. auditor has not audited, reviewed, compiled, or performed any procedures with respect to the Japanese GAAP financial results presented in this business report or the accompanying Japanese GAAP financial statements under either the standards of the PCAOB or U.S. GAAS. Accordingly, the Company’s independent U.S. auditor does not express an opinion or any other form of assurance with respect thereto.
The Company intends to file its Annual Report on Form 20-F containing the audited financial statements for the year ended December 31, 2025 prepared in accordance with U.S. GAAP by the filing deadline prescribed by the SEC, and such financial information for 2025 contained in the Annual Report, including the Company’s audited financial statements prepared in accordance with U.S. GAAP, may differ from the Japanese GAAP financial information disclosed in this business report and the accompanying Japanese GAAP financial statements. As such, this Japanese GAAP financial information should not be viewed as a substitute for the Company’s audited annual financial statements prepared in accordance with U.S. GAAP and is not necessarily indicative of any future period. Accordingly, you should not place undue reliance on this Japanese GAAP information.
(2) | Capital Investment |
There are no matters to be stated.
(3) | Status of the Business Transfer, Absorption-type Demerger or Incorporation-type Demerger |
On January 1, 2025, an absorption-type merger was conducted with Wing Inc. as the surviving company and Medirom Human Resources Inc. as the extinguished company, along with an absorption-type company split in which Wing Inc. was the succeeding company and JOYHANDS WELLNESS Inc. was the splitting company, transferring JOYHANDS WELLNESS Inc.'s relaxation salon operation business to Wing Inc. On the same date, Wing Inc. changed its company name to MEDIROM Wellness Co.
(4) | Acquisition of Business from Other Companies |
There are no matters to be stated.
(5) | Financing Activities |
With the aim of flexible financing and strengthening of our financial base, on November 27, 2025, we issued the 3rd series of Unsecured Convertible-Type Corporate Bonds with Stock Acquisition Rights, raising JPY 400 million.
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(6) | Challenges to be Addressed |
While we continue to face a challenging business environment due to rising prices driven by the depreciation of the yen and increasing labor costs, we are working to build a robust internal structure that can withstand these conditions and aim to secure stable earnings.
In respect of the relaxation salon segment, we will continue our efforts to optimize personnel allocation in response to busy and off-peak periods at salons, shorten the lead time before newly hired staff are deployed to salons through improvements in our training and education programs, strengthen recruitment of contract-based therapists, and work to strengthen our revenue base through accelerating cashless adoption by promoting “Re.Ra.Ku PAY” and improving customer repeat ratios. We will continue to strive to improve customer satisfaction and increase sales, improve the efficiency of directly managed and franchised salon operations, and expand salon sales to investors.
In connection with our participation in the “World” protocol, we will collaborate with TFH to promote the installation and operation of “Orb” devices at our “Re.Ra.Ku” salons, contribute to the domestic expansion of World ID, and aim to establish a new revenue model.
In connection with the healthtech segment, we will strive to further expand the number of health insurance providers under contract with us in our health guidance program utilizing the Lav® application, while working to improve profitability. Additionally, with regard to our heat illness prevention solution and “REMONY”, a remote monitoring and centralized management system using MOTHER Bracelet®, we will promote expanded adoption primarily in the construction, care facility, and local government sectors, and aim to further establish a business-to-business (BtoB) revenue model.
With respect to the rehabilitation center operation segment, MEDIROM Rehab Solutions Inc. will steadily advance the monetization of existing locations while also working to create business synergies in the wellness domain.
Additionally, our Company views acquiring business opportunities through M&A as a strategic priority for achieving sustainable growth and maximizing corporate value. Moving forward, we intend to continue to strengthen our organizational structure, enhance risk management, expedite and optimize the integration process of acquired businesses, and proactively implement measures to ensure these initiatives contribute reliably to our performance.
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(7) | Changes in Assets and Profit/Loss (Non-consolidated, Under Japanese GAAP) |
(Unit: thousand yen other than per share or ratio information, and convenience translation for fiscal 2025)
| December 31, 2022 | December 31, 2023 | December 31, 2024 | December 31, 2025 | December 31, 2025 Convenience translation in $‘000 other than per share and ratio information |
Revenue | 1,162,454 | 1,901,620 | 778,035 | 604,533 | 3,855 |
Ordinary income | 90,053 | 797,274 | 115,609 | 39,893 | 254 |
Net income | 83,550 | 464,728 | 92,625 | 56,058 | 357 |
Net income attributable to each common share | 17.11 yen | 95.18 yen | 17.81 yen | 7.09 yen | US$0.04 |
Total assets | 4,134,464 | 3,948,790 | 6,589,649 | 4,153,929 | 26,491 |
Net assets | 52,845 | 497,916 | 1,277,149 | 1,333,962 | 8,507 |
Net assets per common share | 9.49 yen | 100.64 yen | 159.75 yen | 168.32 yen | US$1.07 |
Capital adequacy ratio | 1.12% | 12.60% | 19.38% | 32.11% | 32.11% |
(Note 1) | For the convenience of the reader, the December 31, 2025 figures are translated into U.S. dollars based upon the conversion rate of $1.00 = JPY156.80, as reported by the Federal Reserve Bank on December 31, 2025. |
(8) | Status of Important Subsidiaries, etc. |
① | Important parent companies |
There are no matters to be stated.
② | Important subsidiaries (As of December 31, 2025) |
Name | Paid-in Capital | Ratio of our voting right | Major Businesses |
MEDIROM Wellness Co. | 1 million yen | 100% | Relaxation industry Salon staff education/school |
Medirom Shared Services Inc. | 1 million yen | 100% | Outsourcing management Salon development Administrative function |
SAWAN CO. LTD. | 0.5 million yen | 100% | Relaxation industry |
ZACC Kabushiki Kaisha | 10 million yen | 100% | Hair salon industry |
MEDIROM MOTHER Labs Inc. | 141 million yen | 93.71% | Healthtech industry |
MEDIROM Rehab Solutions Inc. | 1 million yen | 100% | Operation of rehabilitation centers |
③ | Significant affiliated companies |
There are no matters to be stated.
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(9) | Main business activities (as of December 31, 2025) |
Business Segments | Business Description |
Salon operations | Directly-operated relaxation salon operations and management outsourcing business |
Franchise operations | Support for operation of relaxation salons under franchise agreements |
Salon staff education and school business | Educational business for therapists conducting treatments at relaxation salons |
Healthtech business | Health guidance program utilizing smartphone application Sales and planning of “MOTHER Bracelet®”; development of “REMONY”, a remote monitoring and centralized management system using “MOTHER Bracelet®”; and sales and installation of “Gateway”, a communication device that mediates data communication between that system and the bracelets. |
Hair salon business | Operation of hair salon ZACC |
Rehabilitation center operation business | Operation of rehabilitation centers |
(10) | Main sales offices (as of December 31, 2025) |
Head Office and Re.Ra.Ku® College located at 3-1, Daiba 2-chome, Minato-ku, Tokyo, 16th Floor Tradepia Odaiba.
(11) | Employees (as of December 31, 2025) |
Number of employees | Increase/decrease from the previous year end |
0 | No changes |
(Note) The Company is a holding company which does not have any employees.
(12) | Major Lenders (Financial Institutions) (as of December 31, 2025) |
Lenders | Balance of Borrowings |
MUFG Bank | 191,671 |
Higashi-Nippon Bank | 182,800 |
Japan Finance Corporation | 100,640 |
Resona Bank | 350,000 |
Shoko Chukin Bank | 82,750 |
Kufu Company Holdings Inc. | 200,000 |
(13) | Other Significant Matters Concerning the Company’s Status |
In December 2025, the Company issued the 4th series of Unsecured Convertible-Type Corporate Bonds with Stock Acquisition Rights in the face amount of JPY 275 million to Kufu Company Holdings Inc. In lieu of cash payment, the Company received delivery of a portion of the 1st series of Unsecured Convertible-Type Corporate Bonds with Stock Acquisition Rights held by Kufu Company Holdings Inc., and completed the issuance procedures for the 4th series on that basis.
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2. | Matters Concerning the Status of Our Common Shares (As of December 31, 2025) |
①Total Number of Shares | | Common shares | | 19,899,999 Shares |
Authorized to be Issued | | Class A shares | | 1 Share |
| | | | |
②Total Number of Issued Shares | | Common shares | | 7,994,450 Shares |
| | Class A shares | | 1 Share |
| | | | |
(NOTE)The total number of issued shares includes 92,500 shares of treasury stock. | ||||
| | | | |
③Number of Shareholders | | Common shares | | 24 (excluding treasury stock) |
| | | | |
④Major Shareholders | | | | |
| Number of shares held | |||
| Number of | Number of | | |
Name of Shareholders | common shares | Class A | Total number of | Voting rights |
| held | shares held | Holdings | ratio |
The Bank of New York Mellon | 5,623,933 | | 5,623,933 | 71.17% |
Kouji Eguchi | 1,877,460 | 1 | 1,877,460 | 23.76% |
Daihachiro Kawaguchi | 200,000 | | 200,000 | 2.53% |
Fumitoshi Fujiwara | 40,000 | | 40,000 | 0.51% |
Tomoya Ogawa | 28,500 | | 28,500 | 0.36% |
COZY LLC | 25,000 | | 25,000 | 0.32% |
Yohei Umezaki | 17,500 | | 17,500 | 0.22% |
Kazuyoshi Takahashi | 12,500 | | 12,500 | 0.16% |
Norito Kawada | 10,000 | | 10,000 | 0.13% |
Hirano Works Co., Ltd. | 10,000 | | 10,000 | 0.13% |
(Note 1) Although we own 92,500 shares of treasury stock, such holdings are excluded from the list above of major shareholders.
(Note 2) The ratio of voting rights is calculated by deducting the number of treasury shares from the total number of common shares and excludes the Class A share.
(Note 3) The Bank of New York Mellon serves as depositary for the ADSs.
(Note 4) Mr. Kouji Eguchi, the CEO of our Company, is the sole beneficial owner of COZY LLC. In addition to the shares of our Company described above, COZY LLC holds 22,543 American Depositary Shares (ADS), each representing one common share per ADS.
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[English Translation of Convocation Notice Originally Issued in the Japanese Language]
3. | Matters concerning the status of stock acquisition rights, etc. (Stock acquisition rights issued and outstanding as of December 31, 2025) |
(1) | Status of stock acquisition rights (“SARs”) granted to and held by Directors and Corporate Auditors (without payment, but in consideration of their engagement) as of the end of this fiscal year |
(Note: The 5th Series of Stock Acquisition Rights (exercise price: JPY 400 per share, 25 units, 12,500 common shares subject to SAR) previously granted to an outside director expired on December 21, 2025.)
(2) | Stock acquisition rights granted to Company employees, etc. during this fiscal year |
(3) | Other material items to be stated concerning stock acquisition rights |
(i) Status of other stock acquisition rights granted to and held by Directors and Corporate Auditors as of the end of this fiscal year
The 8th Series of Stock Acquisition Rights (SARs)
Date of Resolution | October 2, 2020 |
Number of Holders | 1 director (internal) |
Number of SAR Units | 150,000 units |
Type of Shares Subject to SAR | Common Shares |
Number of Shares Subject to SAR | 150,000 shares |
Issue Price | 0.23 yen |
Exercise Price | 2,000 yen per share |
Exercise Period | From October 1, 2021 to September 30, 2026 |
The 11th Series of Stock Acquisition Rights (SARs)
Date of Resolution | July 18, 2025 |
Number of Holders | 2 directors (internal) 2 outside directors 3 corporate auditors |
Number of SAR Units | Directors (internal): 73,000 units Outside directors: 10,000 units Corporate auditors: 15,000 units |
Type of Shares Subject to SAR | Common Shares |
Number of Shares Subject to SAR | Directors (internal): 73,000 shares Outside directors: 10,000 shares Corporate auditors: 15,000 shares |
Issue Price | 2 yen |
Exercise Price | US$1.74 per share |
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[This is an English translation of the original issued in Japanese]
Performance Condition | The holders may exercise their SARs if, in any fiscal year from the fiscal year ending December 31, 2026 through the fiscal year ending December 31, 2028, the adjusted consolidated revenues of the Company (“Adjusted Consolidated Revenues”), calculated by deducting (A) revenue from Digital Preventative Healthcare and (B) revenue from Sales of Directly-Owned Salons from the consolidated total revenues stated in the Company’s audited consolidated financial statements, exceeds JPY10 billion at least once. For the purpose of this item (i), “Digital Preventative Healthcare” means the segment labelled “Digital Preventative Healthcare” in the segment information and revenue stream table contained in the Company’s audited consolidated financial statements and the notes thereto and “Sales of Directly-Owned Salons” means the line item labelled “sale of directly-owned salons” in the same segment information and revenue stream table. |
Exercise Period | From July 18, 2026 to July 17, 2030 |
(ii) 1st Unsecured Convertible-Type Corporate Bonds with SARs
The 1st Unsecured Convertible-Type Corporate Bonds with SARs were fully extinguished as of December 31, 2025.
(iii) 2nd Unsecured Convertible-Type Corporate Bonds with SARs
The Board of Directors held a meeting on October 7, 2024 and passed a resolution to issue the Company’s 2nd Unsecured Convertible-Type Corporate Bonds with stock acquisition rights. Payment for the bonds was completed on October 11, 2024. A summary of the bonds is as follows:
Name of Bonds | 2nd Unsecured Convertible-Type Corporate Bonds with SARs |
Balance of Bonds | 300 million yen |
Number of SAR Units | 3 units |
Type of Shares Subject to SAR | Common Shares |
Exercise Period | From October 25, 2024 to October 29, 2027 |
Exercise Price | 957 yen |
(iv) 3nd Unsecured Convertible-Type Corporate Bonds with SARs
The Board of Directors held a meeting on November 27, 2025 and passed a resolution to issue the Company's 3rd Unsecured Convertible-Type Corporate Bonds with stock acquisition rights. Payment for the bonds was completed on December 12, 2025. A summary of the bonds is as follows:
Name of Bonds | 3rd Unsecured Convertible-Type Corporate Bonds with SARs |
Balance of Bonds | 400 million yen |
Number of SAR Units | 40 units |
Type of Shares Subject to SAR | Common Shares |
Exercise Period | From December 12, 2025 to June 10, 2026 (or December 7, 2026 if the maturity date is extended) |
Exercise Price | 343 yen |
16
[This is an English translation of the original issued in Japanese]
(v) 4nd Unsecured Convertible-Type Corporate Bonds with SARs
The Board of Directors held a meeting on December 16, 2025 and passed a resolution to issue the Company's 4th Unsecured Convertible-Type Corporate Bonds with stock acquisition rights. In lieu of cash payment, the issuance procedures were completed on December 31, 2025 by receiving delivery of a portion of the 1st series of Unsecured Convertible-Type Corporate Bonds with SARs. A summary of the bonds is as follows:
Name of Bonds | 4th Unsecured Convertible-Type Corporate Bonds with SARs |
Balance of Bonds | 275 million yen |
Number of SAR Units | 11 units |
Type of Shares Subject to SAR | Common Shares |
Exercise Period | From December 31, 2025 to June 29, 2026 (or December 24, 2026 if the maturity date is extended) |
Exercise Price | 330 yen |
4. | Matters concerning Directors and Corporate Auditors |
(1) Status of Directors and Corporate Auditors (As of December 31, 2025)
Title | Name | Position | Concurrent positions |
CEO | Kouji Eguchi | CEO | Representative Director, MEDIROM Wellness Co. (Note) Representative Director, SAWAN CO. LTD. Director, the Japan Relaxation Industry Association |
CFO | Fumitoshi Fujiwara | CFO | Representative Director, Eaglestone Capital Management Representative Member, Linden Capital Partners LLC Representative Director, Medirom Shared Services Inc. Corporate Auditor, MEDIROM MOTHER Labs Inc. Outside Director, SBC Medical Holdings Group Inc. |
Director | Tomoya Ogawa | Outside Director | Representative Director, Kreation Inc. |
Director | Akira Nojima | Outside Director | Visiting Professor, May Ushiyama Academy’s Hollywood Graduate School Director and CEO, No Track Inc. Visiting Professor, Professional University of Information and Management for Innovation Outside Corporate Auditor, GO TODAY SHAiRE SALON Inc. Member of Audit Committee, Beauty Garage Inc. Outside Director, Atelier M H Co., Ltd. Outside Director, Kabushiki Kaisha soeasy |
17
[This is an English translation of the original issued in Japanese]
Outside Director, ZACC Kabushiki Kaisha Outside Director, Jet Set Co., Ltd. (Note) | |||
Full-time Corporate Auditor | Toshiaki Komatsu | Outside Corporate Auditor | Chairman of the Board of Directors, Photocreate Taiwan Corp. |
Corporate Auditor | Osamu Sato | Outside Corporate Auditor | Professor, School of Business Administration, Aoyama Gakuin University |
Corporate Auditor | Tsukasa Karyu | Outside Corporate Auditor | Director, Karyu Tsukasa Tax Advisor Office Outside Corporate Auditor, Five Ring Kabushiki Kaisha |
(2)Summary of Directors & Officers insurance
The Company has entered into an insurance agreement with an insurance company covering liabilities of directors and officers provided for by Paragraph 1 of Article 430-3 of the Companies Act. The Company expects the agreement to be renewed with the same terms.
| (i) | Scope of the insured |
Directors and Corporate Auditors of the Company (Note: The insurance premium is not paid by the insured.)
| (ii) | Summary of terms of the agreement |
Liabilities for which the insured is legally responsible and litigation expenses arising out of the insured’s acts (including failure to act) in connection with the insured’s position will be covered.
| (iii) | Measures taken to ensure the insured persons perform their duties appropriately |
By setting a limitation on the coverage amount, we ensure the insured persons perform their duties appropriately.
(3)Remuneration of Directors and Corporate Auditors during this fiscal year
Role | Total remuneration | Amount by type of remuneration (in thousands) | Number of persons | |
Basic | Performance-based payment and payment in-kind | |||
Directors | JPY 45,450 | JPY 45,450 | - | 4 |
(Outside directors included) | (JPY 4,200) | (JPY 4,200) | (-) | (2) |
Corporate Auditors | JPY 5,700 | JPY 5,700 | - | 3 |
(Outside auditors included) | (JPY 5,700) | (JPY 5,700) | (-) | (3) |
(Note 1) The Company was authorized to pay remuneration to Directors up to 200 million yen annually in total at the Annual General Meeting of Shareholders held on December 21, 2016. The number of Directors was four (4) at the time of the authorization.
(Note 2) The Company was authorized to pay remuneration to Corporate Auditors up to 50 million yen annually in total at the Annual General Meeting of Shareholders held on December 21, 2016. The number of Corporate Auditors was three (3) at the time of the authorization.
18
[This is an English translation of the original issued in Japanese]
(Note 3) The Board of Directors authorized Kouji Eguchi, CEO of the Company, to make decisions on the amount of base renumeration for each Director. The reason for such authorization is that the Board of Directors considers the CEO suitable for evaluating the performance of each Director and the Company.
(4)Matters regarding Outside Directors and Corporate Auditors
① | Relationship between the Company and significant entities in which an outside director or corporate auditor has a concurrent business position |
Role | Name | Concurrent business position and description of position | Relationship with the Company |
Outside Director | Tomoya Ogawa | Representative Director, Kreation Inc. | The Company has no material relationship with such concurrent business. |
Outside Director | Akira Nojima | Visiting Professor, May Ushiyama Academy’s Hollywood Graduate School Director and CEO, No Track Inc. Visiting Professor, Professional University of Information and Management for Innovation Outside Corporate Auditor, GO TODAY SHAiRE SALON Inc. Member of Audit Committee, Beauty Garage Inc. Outside Director, Atelier M H Co., Ltd. Outside Director, Kabushiki Kaisha soeasy Outside Director, ZACC Kabushiki Kaisha Outside Director, Jet Set Co., Ltd. | The Company has no material relationship with such concurrent businesses. |
Outside Corporate Auditor | Toshiaki Komatsu | Chairman of the Board of Directors, Photocreate Taiwan Corp. | The Company has no material relationship with such concurrent business. |
Outside Corporate Auditor | Osamu Sato | Professor, Aoyama Gakuin University | The Company has no material relationship with such concurrent business. |
Outside Corporate Auditor | Tsukasa Karyu | Principal, Karyu Tax Accountant Office Outside Corporate Auditor, Five Ring Inc. | The Company has no material relationship with such concurrent businesses. |
19
[This is an English translation of the original issued in Japanese]
② | Primary activities in the Company |
Role | Name | Primary activities |
Outside Director | Tomoya Ogawa | Attended 12 of 13 meetings of the Board of Directors held during the fiscal year 2025 (92%), and offered advice from a professional perspective as a lawyer and corporate manager when necessary. |
Outside Director | Akira Nojima | Attended 13 of 13 meetings of the Board of Directors held during the fiscal year 2025 (100%), and offered advice from a professional perspective as a corporate manager when necessary. |
Outside Corporate Auditor | Toshiaki Komatsu | Attended 13 of 13 meetings of the Board of Directors (100%) and 12 of 12 meetings of the Board of Corporate Auditors (100%) held during the relevant fiscal year, and made comments from a professional perspective as a corporate manager when necessary. |
Outside Corporate Auditor | Osamu Sato | Attended 11 of 13 meetings of the Board of Directors (85%) and 12 of 12 meetings of the Board of Corporate Auditors (100%) held during the relevant fiscal year, and made comments from his perspective as a management scientist as necessary. |
Outside Corporate Auditor | Tsukasa Karyu | Attended 13 of 13 meetings of the Board of Directors (100%) and 12 of 12 meetings of the Board of Corporate Auditors (100%) held during the relevant fiscal year, and made comments from his perspective as a certified tax expert when necessary. |
5.Matters concerning the status of the accounting auditor for statutory Japanese financial statements
The Company prepares consolidated financial statements in accordance with U.S. GAAP to meet the SEC and Nasdaq listing requirements. Such financial statements submitted to the SEC and NASDAQ are audited by GuzmanGray. In light of this, although the subsidiaries are not audited on a standalone basis, the Company's consolidated financial statements prepared in accordance with U.S. GAAP, which include those subsidiaries, are audited.
6. | Company Structure and Policies |
(1)System to ensure the appropriateness of operations
The basic policy regarding the system to ensure the Company's operations, or systems of internal controls, is as follows.
① | A system to ensure that the execution of duties by the directors and employees of the Company complies with laws and regulations and the Articles of Incorporation (compliance system) |
In the event of any of the following circumstances, the Company's directors, etc. (meaning directors, executive officers, or any other officers, the same shall apply hereinafter) shall determine the basic policy of compliance in the Company, establish an organization and regulations to make it effective, and promote it by incorporating it into each activity within the Company. At the same time, the Company shall provide education on compliance, clarify the procedures for responding to compliance violations, and make these procedures known to each subsidiary of the Company. For these systems' establishment and operation, the Company's internal audit department shall conduct internal audits. The internal audit department of each subsidiary of the Company shall request reports on the content of audits conducted and provide advice
20
[This is an English translation of the original issued in Japanese]
as necessary. In addition, the Company shall establish a reporting system for internal control to ensure the reliability of financial reporting and operate and evaluate the system effectively and efficiently.
② | System for the storage and management of information related to the execution of duties by directors of the Company (information storage and management system) |
The Company's Directors shall prepare and preserve documents (including electromagnetic records) that record information related to the execution of their duties. The Company's directors shall prepare and store documents (including electromagnetic records) that record information related to the performance of their duties and maintain them where can be viewed as necessary. Information management shall be conducted pursuant to the “Basic Policy on Information Security” and the “Personal Information Protection Policy”.
③ | Rules and other systems for managing the risk of loss in the Company (Risk Management System) |
The Company's directors shall determine the basic policy of risk management for the Company, establish an organization, regulations, bylaws, internal rules, guidelines and manuals to make this policy effective, and promote it by incorporating it into the activities of each subsidiary of the Company. At the same time, the Company shall provide education on risk management, clarify the procedures for disclosing risks and responding to crises, and make these procedures known to each subsidiary of the Company. The Company's internal audit department (including the internal audit departments of each subsidiary of the Company) shall monitor these systems' establishment and operation. The Company's internal audit department (including the internal audit departments of each subsidiary of the Company) shall conduct internal audits of each subsidiary of the Company concerning these systems' establishment and operation.
④ | A system to ensure the efficient execution of duties by the directors, etc. of the Company (Efficient Duty Execution System). |
The directors of the Company shall ensure efficiency in the execution of duties by the directors, etc., of the Company by establishing a business management system consisting of the following items.
| ● | In addition to the Board of Directors, the Group Management Committee shall be organized to deliberate on important matters affecting the entire Company to make decisions carefully after multifaceted consideration. |
| ● | The Company shall appoint executive officers to be in charge of business execution and shall dispatch directors to each Company in the MEDIROM Group as necessary to supervise appropriate business execution and decision-making. |
| ● | The Company shall execute its duties appropriately and efficiently following the duties and authority and decision-making rules based on the Company’s Rules on Duties and Authority. |
| ● | Each subsidiary of the Company shall formulate quantitative and qualitative targets as its annual plan and manage its performance through quarterly monitoring, etc. |
21
[This is an English translation of the original issued in Japanese]
⑤ | System for reporting on the execution of duties by the directors of the Company and other strategies for ensuring the appropriateness of business operations (reporting on the performance of duties and other Group internal control systems). |
The Company's Directors shall establish rules and standards applicable to each subsidiary of the Company, including the following items, and shall manage the business under these rules and standards and request various reports based on these rules and standards.
| ● | Matters related to governance and monitoring of each subsidiary of the Company |
| ● | Matters related to the guidance and management of the development of internal control systems at each subsidiary of the Company |
| ● | Matters related to the Company's information communication system* |
| ● | Matters concerning the internal audit of the Company by the Company's Corporate Audit Department |
* Matters including the system for sharing information within the Company and the internal whistle-blowing system
⑥ | Matters related to employees who the Company's Corporate Auditors request to assist them in their duties* (*hereinafter collectively referred to as “corporate auditor-related systems”) |
The directors of the Company shall appoint employees to assist in the Company's Corporate Auditors' duties. These employees shall assist in the Corporate Auditors' responsibilities and shall be subject to the direction and orders of the Corporate Auditors.
⑦ | Matters of the independence of employees mentioned in the preceding item from the Company’s directors and issues concerning ensuring the effectiveness of instructions to such employees by the Corporate Auditors of the Company. |
To ensure the independence of employees mentioned in the preceding item, decisions on matters related to personnel affairs, such as the appointment, transfer, and evaluation of such employees, shall require the consent of the Company's Corporate Auditors. Besides, such employees shall not concurrently hold positions related to the execution of business and shall be subject only to the direction and orders of the Company's Corporate Auditors.
⑧ | System for Directors, Corporate Auditors and Employees of the Company to Report to the Company's Corporate Auditors. |
The Company's directors shall report to the Company's Corporate Auditors on matters designated in advance by the Company's Corporate Auditors under the auditing standards for Corporate Auditors of the Company, etc. The main issues shall be as follows.
| ● | Matters that are likely to cause significant damage to any company in the MEDIROM Group. |
| ● | Statutory matters that require the consent of the Company's Corporate Auditors |
| ● | Status of development and operation of the internal control system of the Company |
22
[This is an English translation of the original issued in Japanese]
The Company's Corporate Auditors may request reports from the directors, Corporate Auditors, and employees of each subsidiary of the Company at any time as necessary, not limited to the above matters, and those requested to report shall promptly make appropriate reports. The Directors, Corporate Auditors, and employees of each subsidiary of the Company (including those who have received information from such directors, Corporate Auditors, and employees) may request reports from the Directors, Corporate Auditors, and employees of each subsidiary of the Company. Directors, Corporate Auditors, and employees of each subsidiary of the Company (including those who have received reports from such directors, Corporate Auditors, and employees) shall report directly to the Company's Corporate Auditors when matters arise that they deem appropriate to report to the Company's Corporate Auditors to ensure the Company's business is operating appropriately.
The Corporate Auditors of the Company shall receive reports on the operation of the internal reporting system once a quarter. The Company's Corporate Auditors shall receive notifications on the operation of the whistle-blowing system once a quarter. If they deem it necessary, the Corporate Auditors may have relevant personnel immediately report on the system's operation.
⑨ | System to ensure that a person who has made a report as described in the preceding item is not treated disadvantageously for the reason that he or she has made a report to the Company's Corporate Auditors. |
The Directors of the Company shall establish the standard rules of the Company stipulating that those who have made the report described in the preceding item shall not be treated disadvantageously because of such information and shall operate the rules appropriately after making them known to each subsidiary of the Company.
⑩ | Policy on procedures for prepayment or redemption of expenses incurred in the execution of duties by the Company's Corporate Auditors |
If the Company's Corporate Auditors request advance payment or redemption procedures of expenses incurred in the performance of their duties, the Company's Directors shall promptly pay such fees, except in cases where such payment is deemed unnecessary for the performance of the Corporate Auditors' duties, under the internal rules established through consultation with the Company's Corporate Auditors.
⑪ | Other systems to ensure that the audits by the Company's Corporate Auditors are conducted effectively |
The Company's Corporate Auditors shall hold meetings to exchange opinions with the representative directors and outside directors of the Company regularly. Besides, the Directors of the Company shall establish a system to ensure that the audits by the Company's Corporate Auditors are conducted effectively, such as by ensuring that the Company's Corporate Auditors have the opportunity to attend meetings of each subsidiary of the Company at the request of the Company's Corporate Auditors.
(2)Overview of the operation of the system to ensure the appropriateness of operations.
In 2020, our common shares represented by ADSs became listed on the Nasdaq Stock Market in the United States, and as a large company under the Companies Act, we have worked to establish a so-called “system of internal control over financial reporting” to ensure appropriate business operations. Specifically, we worked to document business processes and improve deficiencies in internal controls to comply with the Sarbanes-Oxley Act of the United States, prepare for the replacement and introduction of business systems, and reinforce accounting personnel. At the same time, we promoted the acceleration of the account closing process and the strengthening of the review process by allocating operations more efficiently.
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[This is an English translation of the original issued in Japanese]
In addition, the Board of Directors met 13 times, these being the main meetings to monitor and supervise the appropriate operation of the business described in (1) above. In addition to ensuring the legality of the execution of duties by directors, Mr. Ogawa and Mr. Nojima, outside directors who have no conflicts of interest with the Company, attended 12 meetings and all meetings of the Board of Directors, respectively. The Board of Corporate Auditors met 12 times.
The members of the Board of Corporate Auditors conduct audits based on the audit plans established by the Board of Corporate Auditors, and exchange opinions with our representative directors, other directors, the Internal Audit Office, and the accounting auditor.
In order to confirm the appropriateness of the operational status of our business, we established the Internal Audit Office and appointed dedicated personnel.
(3)Basic Policy on Control of Kabushiki Kaisha
As a Japanese company with ADSs listed on overseas markets, we respect the free trading of our ADSs in the market, and according to our amended and restated articles of incorporation and under the Companies Act, the final decision on whether to accept a proposal for a purchase of the Company's shares that would result in a change of control should be left to the shareholders.
The Company has issued one (1) Class A share with Kouji Eguchi, the founder, and representative director, as the holder. The Class A share is so-called “golden share” with the same rights as common shares in terms of dividends and receipt of residual assets and has the right to consent to critical corporate decisions such as reorganization and disposal of substantial assets and issuance of new shares.
The Company's Board of Directors, including outside directors, shall determine whether a party conducting a tender offer for a significant purchase of the Company's shares is a party that contributes to the enhancement of the Company's corporate value and, in turn, the common interests of its shareholders. The Board of Directors, including the outside directors, will take appropriate measures to consider the laws of Japan and the United States, where the Company's ADSs are listed.
Under the Japanese Companies Act and our Articles of Incorporation, our shareholders are entitled to have information and time to consider whether or not to accept a tender offer for a change of control and protect the Company's corporate value and the shareholders' common interests. The Company believes that it is essential to ensure that shareholders have such information and time.
(4)Company policy in regard to the decisions related to distribution of dividends etc.
The Company considers the distribution of earnings to our shareholders as an essential management policy. Our basic approach is to strive to continuously provide stable returns to our shareholders while securing the necessary internal reserves to respond to future growth and changes in the business environment. However, currently we plan to actively invest in our business to achieve further growth in the future, and we do not expect to pay any dividends on our common shares for the foreseeable future.
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[This is an English translation of the original issued in Japanese]
7. | Matters concerning important events, etc. |
No such event occurred.
* Fractions less than the indicated figures are rounded down to the nearest whole number in this business report.
Statutory Financial Statements Prepared in Accordance with Japanese GAAP
Note: The unaudited statutory non-consolidated financial statements on the following pages have been prepared in accordance with Japanese GAAP. These results may differ in material respects from our audited consolidated financial results under U.S. GAAP that will be reported at a later date and included in our Annual Report on Form 20-F, which will be filed with the U.S. Securities and Exchange Commission and available at www.sec.gov. The attached unaudited statutory non-consolidated financial statements are provided to our shareholders and ADS holders solely in accordance with requirements under the Japanese Companies Act in connection with our Annual Meeting. See “Important Notice Regarding Japanese GAAP Financial Information” above.
25
[This is an English translation of the original issued in Japanese]
Balance Sheet
(Prepared in accordance with JGAAP as of December 31, 2025)
(Unit: thousand yen)
Accounts | | Balance | |
(Assets) | | | |
Total current assets | | 3,568,546 | |
Cash and cash equivalents | | 20,125 | |
Accounts receivable-trade | | 897,182 | |
Accounts receivable-other | | 1,106,208 | |
Short-term loan receivable | | 1,635,104 | |
Other current assets | | 22,542 | |
Allowance for doubtful accounts | | 112,615 | |
| | | |
Total non-current assets | | 585,383 | |
Total tangible assets | | 80,846 | |
Property and equipment | | 91,872 | |
Vehicles | | 6,329 | |
Tools, furniture, and fixtures | | 29,126 | |
Work in progress | | 39,930 | |
Accumulated depreciation | | 86,411 | |
| | | |
Total intangible assets | | 16,141 | |
Software, net | | 15,918 | |
Other intangible assets, net | | 223 | |
| | | |
Total investment and other assets | | 488,396 | |
Investments | | 87,418 | |
Shares of subsidiaries | | 148,202 | |
Long-term accounts receivable-other | | 210,493 | |
Lease and guarantee deposits | | 161,349 | |
Deferred tax assets | | 74,031 | |
Other assets | | 17,396 | |
Allowance for doubtful accounts | | 210,493 | |
| | | |
Total assets | | 4,153,929 | |
| | | |
(Liabilities) | | | |
Total current liabilities | | 2,040,380 | |
Contract liability (current) | | 37,375 | |
Short-term borrowings | | 960,938 | |
Current portion of long-term borrowings | | 100,440 | |
Accounts payable-other | | 224,018 | |
Accrued income taxes | | 986 | |
Short-term convertible bond | | 675,000 | |
Deposits received | | 29,459 | |
Other current liabilities | | 12,164 | |
| | | |
Total non-current liabilities | | 779,588 | |
Long-term borrowings | | 295,750 | |
Convertible bond | | 300,000 | |
Long-term accounts payable-other | | 5,787 | |
Asset retirement obligation | | 37,843 | |
Special account arising from reorganization | | 140,208 | |
| | | |
Total liabilities | | 2,819,968 | |
| | | |
(Shareholders’ Equity) | | | |
Shareholders’ equity | | 1,330,129 | |
Share capital | | 20,000 | |
Capital surplus | | 719,374 | |
Legal capital surplus | | 365,019 | |
Other capital surplus | | 354,355 | |
Total retained earnings | | 593,755 | |
Other retained earnings | | 593,755 | |
Treasury shares | | 3,000 | |
Share acquisition rights | | 3,832 | |
Total shareholders’ equity | | 1,333,961 | |
Total liabilities and shareholders’ equity | | 4,153,929 | |
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[This is an English translation of the original issued in Japanese]
Income Statement
(Prepared in accordance with JGAAP for the fiscal year ended December 31, 2025)
(Unit: thousand yen)
Accounts | | Amount |
| ||
Revenues | | | 604,533 | ||
Cost of revenue | | | 5,731 | ||
Gross profit | | | 598,802 | ||
Selling, general and administrative expenses | | | 536,822 | ||
Operating income | | | 61,980 | ||
Non-operating income | | | | ||
Interest income | | 32,737 | | ||
Foreign exchange gains | | 3,260 | | ||
Other non-operating income | | 934 | 36,931 | ||
Non-operating expenses | | | | ||
Interest expenses | | 57,603 | | ||
Other non-operating expenses | | 1,415 | 59,018 | ||
Ordinary income | | | 39,893 | ||
Extraordinary income | | | | ||
Gain from sales of long-lived assets | | 1,940 | | ||
Gain from sales of shares of its subsidiary | | 15,000 | 16,940 | ||
Income before taxes | | | 56,833 | ||
Income taxes | | | 775 | ||
Net income | | | 56,058 | ||
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[This is an English translation of the original issued in Japanese]
Statement of Changes in Shareholders’ Equity
（Prepared in accordance with JGAAP for the fiscal year ended December 31, 2025）
（Unit: thousand yen）
| | Shareholders’ equity | | ||||||
| | | | Capital Surplus | | ||||
| | Share capital | Legal capital | Other capital | Total capital surplus | | |||
Beginning balance | | 365,019 | 365,019 | 9,336 | 374,355 | ||||
Changes during the year | | | | | | ||||
Reduction in capital | | 345,019 | — | 345,019 | 345,019 | ||||
Net income | | — | — | — | — | ||||
Changes during the year without shareholders’ equity items | | — | — | — | — | ||||
Total changes during the year | | 345,019 | — | 345,019 | 345,019 | ||||
Ending balance | | 20,000 | 365,019 | 354,355 | 719,374 | ||||
（Unit: thousand yen）
| | Shareholders’ equity | | | | | |||||||
| | Retained earnings | | | Total | Share | Total | ||||||
| | Other retained | Total retained | Treasury | shareholders’ | acquisition | shareholders’ | ||||||
| | earnings | earnings | shares | capital | rights | equity | ||||||
Beginning Balance | | 537,697 | 537,697 | 3,000 | 1,274,071 | 3,078 | 1,277,149 | ||||||
Changes during the year | | | | | | | | ||||||
Reduction in capital | | — | — | — | — | — | — | ||||||
Net income | | 56,058 | 56,058 | — | 56,058 | — | 56,058 | ||||||
Changes during the year without shareholders’ equity items | | — | — | — | — | 754 | 754 | ||||||
Total changes during the year | | 56,058 | 56,058 | — | 56,058 | 754 | 56,812 | ||||||
Ending balance | | 593,755 | 593,755 | 3,000 | 1,330,129 | 3,832 | 1,333,961 | ||||||
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[This is an English translation of the original issued in Japanese]
Notes to the specific items
The financial results and financial statements included herein are prepared solely in accordance with Japanese Generally Accepted Accounting Principles (“GAAP”), and have not been reviewed or audited under either the standards of the Public Company Accounting Oversight Board (“PCAOB”). As such, financial results for the year ended December 31, 2025 prepared in accordance with U.S. GAAP remain subject to the completion of management’s reviews and reconciliations and/or adjustments under U.S. GAAP, the Company’s other financial closing procedures, and the audit by the independent auditor in accordance with the standards of the PCAOB, and may differ from the financial results under Japanese GAAP contained herein. For the financial results and audited consolidated financial statements prepared in accordance with U.S. GAAP, please see the Annual Report on Form 20-F, which will be filed by the Company with the U.S. Securities and Exchange Commission and available at www.sec.gov. at a later date.
(Significant accounting policies)
1. | Standards and methodologies of evaluation of assets |
(1) | Available for sale securities |
Securities without market price are stated at the moving average cost.
2. | Depreciation and amortization methodologies of non-current assets |
(1) | Tangible non-current assets |
The depreciation methods and applicable usage periods are as follows:Property and equipment: Straight-line method, 7-15 years
Vehicles: Declining balance method, 6 years
Tools, furniture and fixtures: Declining balance method, 3-10 years
(2) | Intangible assets |
Straight-line method is adopted. Software for company use is amortized over the useful life (5 years depending on each software).
3.Basis to recognize allowances
(1) | Allowance for doubtful accounts |
The Company estimates uncollectible amounts of its receivables by multiplying historical bad debt ratio of receivables with accounts receivable amount for those without specific sign of default, and by individually estimating collectability of each specific receivable such as those with sign of default.
4. | Revenue and cost recognition |
Revenues are recognized when control of the promised goods or services are transferred to the customers, in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services.
The Company determines revenue recognition through the following steps:
Step 1: identification of the contract with a customer;
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[This is an English translation of the original issued in Japanese]
Step 2: identification of the performance obligations in the contract;
Step 3: determination of the transaction price;
Step 4: allocation of the transaction price to the performance obligations in the contract; and
Step 5: recognition of revenue when, or as, the Company satisfies a performance obligation.
The Company’s primary revenue sources consist of the consulting fees determined based on the number of sales of salon transactions that are closed by its subsidiaries and the royalty income related to its trademarks. The Company is entitled to a performance bonus when a sale of salon transaction is closed as the Company provides consulting services to find buyers and close transactions, and the Company recognizes the revenue upon a salon sale transaction is closed as a performance obligation is considered to be satisfied. The Company calculates the amount of royalty income based on the number of salons and the certain fees per salon, and the Company allows the subsidiaries to use the Company’s trademarks over the contract period and performance obligation is deemed to be satisfied as the time passes. As such, the Company recognizes royalty income over the contract period. The considerations for the above revenue transactions do not include significant financial elements.
(Notes related to accounting estimates)
(Evaluation of investments, loans receivable, and accounts receivable from our subsidiaries)
1. | The amounts on the financial statements as of end of this fiscal year |
Common shares of subsidiaries | | JPY148,202 thousand |
Short-term loans receivable from subsidiaries | | JPY1,635,104 thousand |
Accounts receivable-trade from subsidiaries | | JPY871,001 thousand |
Accounts receivable-other from subsidiaries | | JPY1,104,390 thousand |
Allowance for doubtful accounts related to receivables from subsidiaries | | JPY105,820 thousand |
2．Information related to accounting estimates over the identified items
The judgments on necessity/unnecessity to impair the investments on common shares of subsidiaries without market prices is done by comparing the purchase price and practical price, and if the practical price has dramatically decreased, the Company impairs the investment amounts except the case that collectability of the invested amounts is sufficiently supported by enough evidences. The Company uses future plans and so on for the judgment of such collectability.
The receivables from our subsidiaries are evaluated by each entity for the estimated uncollectible amounts, and such estimated uncollectible amounts are recognized as allowance for doubtful accounts. Such uncollectible amounts are estimated based on the financial position of each subsidiary considering general ability to pay by each subsidiary.
If the financial positions or operating performance of the subsidiaries are worsened in the following fiscal year, there is a risk that the Company needs to recognize losses from impairment of the investments on subsidiaries and/or allowance for doubtful accounts, which could impact our financial positions and/or operating performance.
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[This is an English translation of the original issued in Japanese]
(Notes regarding the Balance Sheet)
1. | Assets provided as collaterals and liabilities collateralized by them |
(1) | Assets provided as collaterals |
Time deposits: JPY5,657 thousand
(2) | Liabilities collateralized by the assets. |
Current portion of long-term borrowings: | | JPY40,080 thousand |
Long-term borrowings: | | JPY142,720 thousand |
Total | | JPY182,800 thousand |
2. | Guaranteed liabilities |
The Company guarantees the lease payments on the following subsidiaries’ salon facility: MEDIROM Wellness Co., Ltd., MEDIROM MOTHER Labs Inc. and SAWAN Co., Ltd.: 73 salons, JPY440,866 thousand
3. | Receivables from and payables to subsidiaries Short-term receivables: JPY3,610,495 thousand |
(Notes regarding the Income Statement)
1.Transactions with subsidiaries
(1) | Operating transactions: |
Revenues: | | JPY556,933 thousand |
Expenditures: | | JPY4,200 thousand |
(2) | Non-operating transactions: |
Income: | | JPY32,702 thousand |
Expenditures: | | JPY3,082 thousand |
(Notes regarding the Statement of Shareholders’ Equity)
| ① | Number of shares issued as of fiscal year end: |
Common shares: | | 7,994,450 |
Class A share: | | 1 |
| ② | Number of treasury shares as of fiscal year end: |
Common shares: | | 92,500 |
| ③ | Notice regarding dividends of retained earnings |
| (1) | Dividends paid: |
No dividend was paid during this fiscal year.
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[This is an English translation of the original issued in Japanese]
| (2) | Dividend to be paid after the ending date of this fiscal year: |
No dividend is scheduled to be paid.
④ | Notice regarding share acquisition rights: |
Number of shares subject to the share acquisition rights:
The 7th Series of Stock Options: Common shares | | 66,500 |
The 8th Series of Stock Options: Common shares | | 150,000 |
The 10th Series of Stock Options: Common shares | | 143,000 |
The 11th Series of Stock Options: Common shares | | 377,000 |
Total | | 736,500 |
(Note regarding financial instruments)
(1) | Items regarding transactions related to the financial instruments |
| ① | The Company policy on financial instruments |
The Company plans its necessary financing at its Board of Directors based on the investment plan and operating cash flow prospect, and finances its working capital by means of bank loans after approval by the Board.
② | Details of the financial instruments and related risks |
Accounts receivable-trade and accounts receivable-other are operating claims and are subject to credit risk of our customers.
Investments in securities are stocks of private companies with whom we have transaction relationship and subject to credit risk and market risk of the issuers.
Loans receivable are subject to credit risk of the borrowers.
Lease and guarantee deposits are deposited for the purpose of entering into lease agreements of our offices and salons and are subject to credit risk of the landlords.
Accounts payable-other and long-term accounts payable-other are subject to liquidity risk that the Company is not able to make the payments on the due dates.
Borrowings are for working capital purpose and are subject to liquidity risk.
③ | Risk management system over financial instruments |
i. | Credit risk (risks related to breach of contracts, etc.) management |
The relevant divisions of the Company periodically monitor the primary customers and/or vendors over operating claims and loans receivable, manage due dates and balances, and try to collect information in the early timing about the risk of collectability due to worsened financial positions of them or mitigate risk of bad debt.
ii. | Market risk management |
The Company collects information about the issuers’ (transaction parties’) financial positions, etc. in regard to investments on securities.
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[This is an English translation of the original issued in Japanese]
iii. | Liquidity risk (risk not to be able to pay on due) management |
The Company recognizes the due dates on monthly basis based on reports submitted from each division, makes/updates payment plans, and prepares liquidity on hand. By doing such, the Company manages the liquidity risk.
④ | Supplemental explanation about the fair value of financial instruments |
The fair values of financial instruments include reasonably estimated amounts in case there is no market value. Such a value calculation reflects volatile factors, and so subject to change of the value due to adopting different assumptions.
(2) | Fair value of financial instruments |
The disclosed amounts on the Balance Sheet, fair values, the differences as of December 31, 2025 are as presented in the following table. The table excludes financial instruments, the fair value of which is deemed impossible to determine. (Please see Note 2 below.) Furthermore, cash is omitted from the table and bank balances, accounts receivable-trade, accounts receivable-other, accounts payable-other, short-term loans receivable, accounts payable-trade, accounts payable-other, and short-term loans payable are omitted from the table since they can be settled within a short period and so their fair values approximate their book values.
(Unit: thousand yen)
| Ending | | |
Account | balance | Fair value | Difference |
(1) Long-term accounts receivable-other (※1 and ※2) | — | — | — |
(2) Long-term borrowings (※3) | 396,190 | 362,698 | △33,492 |
(3) Convertible bonds with share acquisition rights (※5) | 300,000 | 287,324 | △12,676 |
(4) Long-term accounts payable-other (※4) | 7,433 | 7,106 | △327 |
※1 Net of allowance for doubtful accounts.
※2 Long-term accounts receivable-other due within 1 year are included.
※3 Long-term borrowings due within 1 year are included.
※4 Long-term accounts payable-other due within 1 year are included.
※5 Convertible bond due within 1 year is included.
(Note 1) Items related to calculation methodologies of financial instruments and securities or derivative transactions
| (1) | Long-term accounts receivable-other |
Since the estimated uncollectible amounts are calculated based on the expected collectible amounts, etc., the fair values of them are approximate with the amount disclosed on the Balance Sheet less the latest estimated bad debt as of fiscal year end. Hence, the Company regards the amount as the fair value of this account.
| (2) | Long-term borrowings, (3)Convertible bonds with share acquisition rights, (4)Long-term accounts payable-other |
The fair value of the Long-term borrowings, Convertible bonds with share acquisition rights, and Long-term accounts payable-other are calculated under the method that the sum of principals and interest payable is discounted by the interest rates assumed to be applicable provided the Company newly entered into the loan agreements with the same terms and conditions.
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[This is an English translation of the original issued in Japanese]
(Note 2) Financial instruments the fair values of which are deemed impossible to determine since there is no market to trade it
| (Unit: thousand yen) |
Account | Ending balance |
Shares of private companies | 87,418 |
Shares of subsidiaries and affiliates | 148,202 |
(Note regarding the asset retirement obligations)
1. | The details of the asset retirement obligations |
The restoration costs over headquarter office and ReRaKu College.
2. | The methodology to calculate the asset retirement obligations |
The restoration costs of headquarter office, Re.Ra.Ku College are recognized based on the estimated removal costs provided by the construction contractor.
3. | The increase or decrease of the total asset retirement obligations in this fiscal year is as follows: |
Beginning balance: | | JPY37,763 thousand |
Adjustments due to passing of time: | | JPY 80 thousand |
Ending balance: | | JPY37,843 thousand |
(Note regarding deferred tax accounting)
Schedule of deferred tax assets by primary cause:
Deferred tax assets:
Loss carried forward | | JPY247,321 thousand |
Shares of subsidiaries and affiliates | | JPY211,201 thousand |
Allowance for doubtful accounts | | JPY111,780 thousand |
Accounts receivable | | JPY15,236 thousand |
Asset retirement obligations | | JPY13,092 thousand |
Deposits receivable | | JPY12,108 thousand |
Others | | JPY12,191 thousand |
Sub-total Deferred tax assets | | JPY622,929 thousand |
Valuation allowance | | JPY546,875 thousand |
Total Deferred tax assets | | JPY76,054 thousand |
Deferred tax liabilities:
Asset retirement costs | | JPY1,242 thousand |
Others | | JPY781 thousand |
Sub-total Deferred tax liabilities | | JPY2,023 thousand |
Net deferred tax assets | | JPY74,031 thousand |
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[This is an English translation of the original issued in Japanese]
(Note regarding transactions with related parties)
1. | With subsidiaries and affiliates: |
（Unit：thousand yen）
Entity type | Entity name | Ownership % | Transaction(s) | Transaction amount | Account | Ending balance |
Subsidiary | MEDIROM Wellness Co., Ltd. | Direct 100% | Guarantee of liabilities | 398,836 | Accounts receivable-trade | 494,075 |
| | | Guarantor of the Company’s debts | 283,440 | Short-term loan receivable | 1,585,176 |
| | | Receipt of salon sale success fees | 369,254 | | |
| | | Receipt of royalties | 176,880 | | |
| | | Receipt of interest income | 31,704 | | |
Subsidiary | SAWAN Co., Ltd. | Direct 100% | Guarantee of liabilities | 39,737 | Accounts receivable-trade | 376,926 |
| | | Receipt of royalties | 10,080 | Short-term loan receivable | 49,928 |
| | | Receipt of interest income | 999 | Accounts receivable-other | 17,794 |
Subsidiary | ZACC Kabushiki Kaisha | Direct 100% | Borrowing of loans | 187,750 | Accounts receivable-other | 104,725 |
| | | Repayments of loans | 116,062 | Short-term loans payable | 219,268 |
| | | Payment of interest expenses | 3,082 | | |
Subsidiary | Medirom Shared Services Inc. | Direct 100% | Payment of business and clerical administration service fees | 4,200 | Accounts receivable-other | 533,657 |
| | | Guarantor of the Company’s debts | 100,640 | | |
Subsidiary | MEDIROM MOTHER Labs Inc. | Direct 93.71% | Receipt of royalties | 720 | Accounts receivable-other | 386,572 |
| | | Guarantee of liabilities | 1,659 | | |
| | | Guarantor of the Company’s debts | 633,440 | | |
Subsidiary | MEDIROM Rehab Solutions Inc. | Direct 100% | － | － | Accounts receivable-other | 61,643 |
(Note 1) | The guarantees to MEDIROM Wellness Co., Ltd., MEDIROM MOTHER Labs Inc. and SAWAN Co. Ltd. were for the lease payments for the salons. |
(Note 2) | The loan amount of JPY283,440 thousand borne by the Company is guaranteed by MEDIROM Wellness Co., Ltd., without any guarantee fees. |
(Note 3) | The loan amount of JPY100,640 thousand borne by the Company is guaranteed by Medirom Shared Services Inc. without any guarantee fees. |
(Note 4) | The loan amount of JPY633,440 thousand borne by the Company is guaranteed by MEDIROM MOTHER Labs Inc. without any guarantee fees. |
(Note 5) | The inter-company loans were lent at interest rates reasonably decided by referencing the market rates. |
(Note 6) | The terms and conditions over the outsourcing of salon operation support and back-office services were decided considering market fee prices, etc. |
(Note 7) | The Company recognizes the allowance for doubtful accounts of JPY105,820 thousand to subsidiaries and affiliates in total. |
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[This is an English translation of the original issued in Japanese]
2. | With Directors and primary individual shareholders: |
（Unit: thousand yen）
Type | Name | Voting | Relationship | Transaction | Amount | Accounts | Ending |
Director | Kouji Eguchi | Direct 23.76% | Representative director | Payment guarantees for the Company’s debt and lease obligations | 182,800 | - | - |
(Note) | Guarantees were provided by Mr. Eguchi for the Company’s bank loans and rent expenses of our salons. No guarantee fees are paid. |
(Per-share information)
1.Net income per common share | | JPY 7.09 |
2.Net assets per common share | | JPY 168.32 |
(Material subsequent events)
Not applicable.
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[This is an English translation of the original issued in Japanese]
Annexed Detailed Statements
1. Schedule of Non-Current Tangible Assets and Intangible Assets
(Unit: thousand yen)
Classification | Type of assets | Beg. book bal. | Increase | Decrease | Depreciation | End book bal. | Accum. dep. | End. acq. cost |
Tangible assets | Property and equipment | 38,713 | － | － | 4,691 | 34,022 | 57,850 | 91,872 |
| Vehicles | 4,292 | 6,329 | 2,981 | 1,661 | 5,979 | 350 | 6,329 |
| Tools, furniture, and fixtures | 2,706 | － | － | 1,791 | 915 | 28,211 | 29,126 |
| Work in progress | 27,960 | 11,970 | － | － | 39,930 | － | 39,930 |
| Subtotal | 73,671 | 18,299 | 2,981 | 8,143 | 80,846 | 86,411 | 167,257 |
Intangible assets | Software, net | 22,583 | － | － | 6,665 | 15,918 | － | － |
| Other intangible assets, net | 298 | － | － | 75 | 223 | － | － |
| Subtotal | 22,881 | － | － | 6,740 | 16,141 | － | － |
Note 1. Increase during the year primarily consists of the following:
(1) Purchase of company vehicles
Vehicles: JPY 6,329 thousand
(2) Purchase of stretch equipment
Work in progress: JPY 11,970 thousand
Note 2. Decrease during the year primarily consists of the following:
(1) Sale of company vehicles
Vehicles: JPY 2,981 thousand
2. Details of Allowances
(Unit: thousand yen)
Account | Beginning | Increase during the year | Decrease during the year | Ending balance |
Allowance for doubtful accounts | 223,429 | 99,679 | － | 323,108 |
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[This is an English translation of the original issued in Japanese]
3. Schedule of Selling, General, and Administrative Expenses
(Unit: thousand yen)
Account | Amount | Note |
Remuneration for directors | 51,150 | |
Salaries | 1,200 | |
Legal welfare expenses | 4,905 | |
Rent expenses | 68,364 | |
Advertising expenses | 100 | |
Travel and transportation expenses | 3,024 | |
Commission expenses | 27,304 | |
Fee expenses | 231,986 | |
Taxes and dues | 3,624 | |
Depreciation expenses | 14,883 | |
Bad debts expenses | 99,679 | |
Other | 30,603 | |
Total | 536,822 | |
38
[This is an English translation of the original issued in Japanese]
Audit Report
MEDIROM Healthcare Technologies Inc.
Attn: Board of Directors
The Board of Corporate Auditors has prepared this audit report as a result of deliberations on the execution of duties by the Directors for the 26rd fiscal year from January 1, 2025 to December 31, 2025 based on the reports prepared by each Corporate Auditor. We hereby report as follows:
1. | Auditing Methods of Corporate Auditors and the Board of Corporate Auditors and Their Contents |
(1) | The Board of Corporate Auditors established audit policies and division of duties and received reports on the status and results of audits from each corporate auditor, received reports on the status of execution of duties from each director, and requested explanations as necessary. |
(2) | In accordance with the audit standards established by the Board of Corporate Auditors, each corporate auditor worked to collect information in accordance with the audit policy and the division of duties, communicated with directors, internal audit departments, and other employees, and worked to collect information and improve the auditing environment. In addition, audits were conducted in the following manner. |
① | We attended meetings of the Board of Directors and other important meetings, received reports from directors and employees on the status of the execution of their duties, requested explanations, when necessary, inspected various important documents, and inspected the status of business operations and assets at the head office and major business sites. In addition, we exchanged information with directors and corporate auditors of subsidiaries and received business reports as necessary. |
② | The Board of Directors regularly received reports from directors and employees on the contents of resolutions adopted at meetings of the Board of Directors concerning the development of the system stipulated in Paragraph 1 and Paragraph 3 of Article 100 of the Ordinance for Enforcement of the Companies Act and the status of the system (internal control system) developed based on the said resolutions as necessary to ensure that the execution of duties by directors complies with laws and regulations and the Articles of Incorporation, and other matters necessary to ensure the appropriateness of the operations of the corporate group consisting of the Stock Company and its Subsidiaries. The Board of Directors requested explanations and expressed opinions as necessary. |
③ | The basic policies and measures for the control of the Company described in the business report were reviewed based on the status of deliberations at the Board of Directors and other meetings. |
④ | We monitored and verified whether the accounting auditor maintained an independent position and conducted appropriate audits, and received reports on the status of execution of duties from the accounting auditor, and requested explanations as necessary. In addition, we received notice from the accounting auditor that the “System to Ensure Proper Execution of Duties” (matters listed in each item of Article 131 of the Corporate Accounting Rules) has been developed in accordance with the “Quality Control Standards for Audits” (October 28, 2005, Business Accounting Council), etc., and requested explanations where necessary. |
Based on the above method, we examined the business report and the supplementary schedules thereof, as well as the financial statements (balance sheet, profit and loss statement, statement of changes in shareholders' equity, and non-consolidated explanatory notes) and the supplementary schedules thereof for the relevant business year.
39
[This is an English translation of the original issued in Japanese]
2. | Audit Results |
(1)Audit results concerning business reports
① | We acknowledge that the business report and supplementary schedules accurately indicate the status of the Company in accordance with laws and regulations and the Articles of Incorporation. |
② | We acknowledge that there are no improper acts or material facts in violation of laws and regulations or the Articles of Incorporation with regard to the execution of duties by Directors. |
③ | The contents of resolutions of the Board of Directors on the internal control system and the status of their operation are considered appropriate. In addition, it is recognized that continuous improvement has been made with regard to the status of the development and operation of the relevant internal control system. |
④ | There are no issues that need to be pointed out in the basic policy regarding the manner of persons who control decisions on financial and business policies contained in the business report. In addition, we acknowledge that such efforts are in line with the said basic policy, do not impair the common interest of our shareholders, and do not intend to maintain the position of our corporate officers. |
The auditing method and results of the independent auditor's order are considered appropriate.
April 9, 2026 | | ||
| |||
MEDIROM Healthcare Technologies Inc. | |||
Board of Corporate Auditors | |||
2-3-1 Daiba, Minato-ku, Tokyo | |||
| | | |
Full-time Corporate Auditor: | | Toshiaki Komatsu | |
| | | |
Outside Auditor: | | Osamu Sato | |
| | | |
Outside Auditor: | | Tsukasa Karyu | |
40
Exhibit 99.2
[NOTICE: This is a translation of the Japanese original for reference purposes only, and in
the event of any discrepancy, the Japanese original shall prevail.]
Voting Form
To MEDIROM Healthcare Technologies Inc.
I hereby vote on each proposal for the annual general meeting of MEDIROM Healthcare Technologies Inc. to be held on Friday, May 29, 2026, as indicated by the circle below. If no indication is presented on a certain proposal, please treat my vote on such proposal as “For”.
Proposal 1 | | For ・Against |
Proposal 2 | Kouji Eguchi | For ・Against |
Fumitoshi Fujiwara | For ・Against | |
Yoshio Uekusa | For ・Against | |
Tomoya Ogawa | For ・Against | |
Akira Nojima | For ・Against |
| | , 2026 |
Address | | | |
| | | |
Name | | | [Seal] |
| | | |
Number of Votes | | | |
Exhibit 99.3
| Copyright © 2026 BetaNXT, Inc. or its affiliates. All Rights Reserved styleIPC Instructions to The Bank of New York, as Depositary (Must be received prior to 12:00 p.m. EST on May 21, 2026) The undersigned registered holder of American Depositary Receipts ("Receipts") hereby requests and instructs The Bank of New York, as Depositary, to endeavor, insofar as practicable, to vote or cause to be voted the amount of shares or other Deposited Securities represented by such Receipts of MEDIROM Healthcare Technologies Inc. registered in the name of the undersigned on the books of the Depositary as of the close of business on February 27, 2026 at the Annual General Meeting of Shareholders of MEDIROM Healthcare Technologies Inc. to be held on May 29, 2026 in Minato-ku, Tokyo, Japan. NOTE: 1. Please direct the Depositary how it is to vote by placing an X in the appropriate box opposite the resolution. 2. It is understood that, if this form is signed and returned but no instructions are indicated in the boxes, then the Depositary will not vote such items. 3. It is understood that, if this form is not signed, or not returned, the Depositary will not vote such items. MEDIROM Healthcare Technologies Inc. PLEASE BE SURE TO SIGN AND DATE THIS PROXY CARD AND MARK ON THE REVERSE SIDE MEDIROM Healthcare Technologies Inc. Annual General Meeting For Shareholders of record as of February 27, 2026 Friday, May 29, 2026 9:00 AM, Local Time BNY: PO BOX 505006, Louisville, KY 40233-5006 Internet: www.proxypush.com/MRM • Cast your vote online • Have your Proxy Card ready • Follow the simple instructions to record your vote Phone: 1-866-834-5915 • Use any touch-tone telephone • Have your Proxy Card ready • Follow the simple recorded instructions Mail: • Mark, sign and date your Proxy Card • Fold and return your Proxy Card in the postage-paid YOUR VOTE IS IMPORTANT! envelope provided PLEASE VOTE BY: 12:00 p.m. EST on May 21, 2026 Have your ballot ready and please use one of the methods below for easy voting: Your vote matters! Your control number Have the 12 digit control number located in the box above available when you access the website and follow the instructions. |
| MEDIROM Healthcare Technologies Inc. Annual General Meeting Please make your marks like this: PROPOSAL YOUR VOTE BOARD OF DIRECTORS RECOMMENDS FOR AGAINST (i) To approve the Company's Financial Statements for the 26th Fiscal Year #P1# #P1# FOR (ii) To re-elect four (4) directors and elect one (1) new director, each to serve for the ensuing year as members of the Board of Directors Kouji Eguchi #P3# #P3# FOR Fumitoshi Fujiwara #P4# #P4# FOR Yoshio Uekusa #P5# #P5# FOR Tomoya Ogawa #P6# #P6# FOR Akira Nojima #P7# #P7# FOR Proposal_Page - VIFL Authorized Signatures - Must be completed for your instructions to be executed. Please sign exactly as your name(s) appears on your account. If held in joint tenancy, all persons should sign. Trustees, administrators, etc., should include title and authority. Corporations should provide full name of corporation and title of authorized officer signing the Proxy/Vote Form. Signature (and Title if applicable) Date Signature (if held jointly) Date |
