TryHard Holdings Ltd 披露财务与治理风险

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

OR

For the Fiscal Year Ended June 30, 2026

OR

OR

Commission File Number: 001-42820

TryHard Holdings Limited

(Exact name of Registrant as specified in its charter)

Cayman Islands

(Jurisdiction of incorporation or organization)

#502 PMOEX Hommachi,

3-1-10 Hommachi, Chuo-ku, Osaka

Japan (541-0053)

(Address of principal executive offices)

Rakuyo Otsuki, Chief Executive Officer

Telephone: +81 06 4708 6470

At the address of the Company set forth above

(Name, Telephone, email and/or fax number and address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act: None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

5,004,661 Ordinary Shares and 200,000 Series A Preferred Shares, US$0.0002 par value per share, as at June 30, 2026, giving retroactive effect to the 10-for-1 share consolidation effected on August 10, 2026.

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act of 1933.

Yes ☐ No ☒

If the report is an annual or transition report, indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15D of the Securities Exchange Act of 1934.

Yes ☐ No ☒

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company.

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark which basis of accounting the Registrant has used to prepare the financial statements included in this filing:

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the Registrant has elected to follow:

Item 17 ☐ Item 18 ☐

If this is an annual report, indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.)

Yes ☐ No ☒

TABLE OF CONTENTS

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 20-F contains forward-looking statements that relate to our current expectations and views of future events. These forward-looking statements are contained principally in the sections entitled “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Industry Overview” and “Business.” These statements relate to events that involve known and unknown risks, uncertainties and other factors, including those listed under “Risk Factors,” which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

In some cases, these forward-looking statements can be identified by words or phrases such as “believe”, “plan”, “expect”, “intend”, “should”, “seek”, “estimate”, “will”, “aim” and “anticipate”, or other similar expressions, but these are not the exclusive means of identifying such statements. All statements other than statements of historical facts included in this document, including those regarding future financial position and results, business strategy, plans and objectives of management for future operations (including development plans and dividends) and statements on future industry growth are forward-looking statements. In addition, we and our representatives may from time to time make other oral or written statements which are forward-looking statements, including in our periodic reports that we will file with the SEC, other information sent to our shareholders and other written materials.

These forward-looking statements are subject to risks, uncertainties and assumptions, some of which are beyond our control. In addition, these forward-looking statements reflect our current views with respect to future events and are not a guarantee of future performance. Actual outcomes may differ materially from the information contained in the forward-looking statements as a result of a number of factors, including, without limitation, the risk factors set forth in “Risk Factors” and the following:

FINANCIAL STATEMENTS AND CURRENCY PRESENTATION

Basis of Presentation

Unless otherwise indicated, all financial information contained in this report are prepared in accordance with the International Financial Reporting Standards, or IFRS, issued by the International Accounting Standards Board, or IASB, and the interpretations issued by the IASB’s International Financial Reporting Interpretation Committee.

Certain amounts, percentages and other figures included in this Annual Report have been subject to rounding adjustments. Accordingly, amounts, percentages and other figures shown as totals in certain tables or charts may not be the arithmetic aggregation of those that precede them, and amounts and figures expressed as percentages in the text may not total 100% or, when aggregated may not be the arithmetic aggregation of the percentages that precede them.

Financial Information in U.S. Dollars

TryHard Holdings Limited is a holding company with operations conducted in Japan through its operating subsidiary in Japan, using Japan yen. Our functional currency and reporting currency are the Japanese yen (“JPY” or “¥”), the legal currency of Japan. The terms “dollar” or “$” refer to U.S. dollars, the legal currency of the United States. Convenience translations included in this report of Japanese yen into U.S. dollars have been made at the exchange rate of ¥162.61 = $1.00, which was the exchange rate used for convenience translations as of June 30, 2026, as reported by the Board of Governors of the United States Federal Reserve System (the “U.S. Federal Reserve”) in its H.10 statistical release. Historical and current exchange rate information may be found at https://www.federalreserve.gov/releases/h10.

Recent Events

Nasdaq Delinquency Notification Letter and Compliance Letter

On March 11, 2026, we received a notice from Nasdaq that we were not in compliance with Nasdaq’s minimum bid price requirement under Nasdaq Listing Rule 5550(a)(2) as the minimum bid price of our Ordinary Shares had been below $1.00 per share for 30 consecutive business days (the “Minimum Bid Price Requirement”). Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), we had until August 27, 2026 (the “Compliance Period”) to regain compliance with the Minimum Bid Price Requirement. To regain compliance, the minimum bid price of our Ordinary Shares needed to exceed $1.00 per share for a minimum of ten consecutive business days during the Compliance Period. On August 28, 2026, after implementing the Share Consolidation (as defined and described below) which took effect on August 10, 2026, we received a notice from Nasdaq that we had regained compliance with Listing Rule 5550(a)(2).

Share Consolidation

On July 21, 2026 at an extraordinary general meeting, our shareholders approved a reverse share split, or share consolidation (the “Share Consolidation”) whereby every ten (10) issued and unissued Ordinary Shares and Series A Preferred Shares of par value US$ 0.00002 each was consolidated into one (1) Ordinary Share and one (1) Series A Preferred Share, respectively, of par value US$0.0002 each. Following the Share Consolidation, the Company’s authorized share capital remained at US$500,000, divided into 2,500,000,000 shares of a par value of US$0.0002 each, comprising 2,250,000,000 Ordinary Shares and 250,000,000 Series A Preferred Shares.

Star Party Joint Venture

On January 15, 2026, we entered into a memorandum of cooperation (the “MOC”) with STAR PARTY HK LIMITED (“Star Party”) pursuant to which the Company and Star Party plan to jointly register and establish Star Party Japan Investment Co., Ltd. (final name subject to approval by the relevant authorities), a joint venture which would be responsible for the localized operation and expansion of entertainment and social space businesses in Japan (the “Star Party JV”).

Under the MOC, Star Party shall contribute RMB 7.5 million in cash (or equivalent foreign currency), of which JPY 58.5 million (or equivalent foreign currency) shall be recorded as the registered capital of the Star Party JV, and the remaining contribution amount (or equivalent foreign currency) shall be recorded as capital reserve of the Star Party JV. Star Party shall hold 65% of the equity in the Star Party JV.

The Company shall contribute RMB 7.5 million in cash (or equivalent foreign currency), of which JPY 31.5 million (or equivalent foreign currency) shall be recorded as the registered capital of the Star Party JV, and the remaining contribution amount (or equivalent foreign currency) shall be recorded as capital reserve of the Star Party JV. TryHard shall hold 35% of the equity in the Star Party JV.

PART I

ITEM 1. IDENTITY OF DIRECTORS, OFFICERS, SENIOR MANAGEMENT AND ADVISORS

Not Applicable

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not Applicable

ITEM 3. KEY INFORMATION

A. RESERVED

B. CAPITALIZATION AND INDEBTEDNESS

Not applicable

C. REASONS FOR THE OFFER AND USE OF PROCEEDS.

Not applicable

D. RISK FACTORS

You should carefully consider the following risk factors, together with all of the other information included in this Annual Report. Investment in our securities involves a high degree of risk. You should carefully consider the risks described below together with all of the other information included in this Annual Report before making an investment decision. The risks and uncertainties described below represent our known material risks to our business. If any of the following risks actually occurs, our business, financial condition or results of operations could suffer. In that case, you may lose all or part of your investment.

Risks Related to Our Business and Industry

Our event curation business is exposed to significant risks related to unpredictable demand and potential event cancellations, both of which could adversely impact our revenue and profitability.

Unpredictable demand for events poses a major challenge to our business. Consumer interest in events, whether self-produced or subcontracted, can vary widely due to factors such as economic conditions, changing consumer preferences, and competition. A decline in consumer interest or attendance could result in reduced revenue from event curation, negatively affecting our financial performance. Furthermore, the production of self-organized events is inherently vulnerable to disruptions caused by external factors. Unforeseen circumstances such as adverse weather conditions, public health concerns (e.g., pandemics), or venue-related issues can lead to event cancellations or reduced attendance. These disruptions not only impact revenue projections but may also result in sunk costs and reputational damage, further affecting our business operations.

The operation of our club business is inherently subject to significant regulatory and operational risks.

Changes in regulations represent a major challenge for the nightlife and club industry in Japan. This sector is heavily regulated, with strict requirements related to licensing, noise restrictions, health and safety standards, and alcohol laws. Any amendments to these regulations, or a tightening of compliance requirements, could result in increased operating costs or impose restrictions that limit our ability to operate clubs profitably. In addition to regulatory challenges, operational liabilities pose another significant risk. The nature of club operations involves inherent risks such as accidents, safety violations, or security incidents. Any legal claims or reputational harm resulting from such incidents could lead to financial liabilities, loss of customer trust, and potential damage to our brand image. Managing these risks effectively is critical to sustaining our business and maintaining our market position.

Our sub-leasing business is subject to significant risks related to lease agreements and fluctuations in the real estate market.

We face risks associated with lease agreements, as we are responsible for securing long-term tenants for the properties we sub-lease. If we are unable to sub-lease venues to clubs at favorable rates, or if tenant clubs default on their lease obligations, we may still be obligated to pay rent to landlords under the original lease terms. This could result in significant pressure on our profit margins and negatively impact our financial performance. Additionally, fluctuations in the real estate market, including changes in rental prices and property values, pose another layer of risk to our sub-leasing operations. If rental rates increase or demand for leased venues decreases, we may encounter difficulties in maintaining profitable sub-leasing arrangements. Such changes in the market could lead to reduced profitability or even financial losses, adversely affecting our overall business performance.

We operate in a highly-competitive market and our failure to compete effectively could adversely affect our results of operations.

The restaurant and F&B industry is inherently challenging, characterized by high operating costs, evolving consumer preferences, and fluctuations in food supply costs. Any operational issues, such as food safety incidents, unfavorable customer reviews, or inefficiencies in management, could have a material adverse effect on our reputation, revenue, and profitability. Maintaining consistent quality and service across our restaurant locations is essential, and failure to do so could diminish customer trust and loyalty. Economic downturns or periods of financial uncertainty often result in reduced discretionary spending by consumers, particularly in areas like dining and entertainment. A significant portion of our revenue is derived from our club and restaurant operations, and a decline in consumer spending could lead to reduced customer traffic and lower sales volumes. Prolonged periods of economic instability could further compound these effects, impacting our financial condition and results of operations.

The failure to attract and retain key entertainers and highly skilled employees could prevent us from executing our business strategy.

To execute our business strategy, we must attract and retain key entertainers and highly skilled employees. In particular, high-quality performers are very important to our brand success and are difficult to replace. We have from time to time in the past experienced, and we expect to continue to experience in the future, difficulty in hiring and difficulty in retaining highly skilled employees. In particular, we have experienced a competitive hiring environment in Japan, where we are headquartered and will continue to experience a competitive hiring environment as we recruit for remote talent worldwide. Many of the companies with which we compete for experienced personnel may have greater resources than we do. In addition, in making employment decisions, job candidates often consider the value of the stock options or other equity incentives they are to receive in connection with their employment. If the price of our stock declines, or experiences significant volatility, our ability to attract or retain key employees will be adversely affected. If we fail to attract new personnel or fail to retain and motivate our current personnel, our growth prospects could be severely harmed.

Our success depends on the continuing efforts of our key employees, including our senior management members and other key personnel. If we fail to hire, retain and motivate our key employees, we could lose the innovation, collaboration and focus that contribute to our business.

We believe that our success depends substantially on the continued efforts of our key employees, including our senior management members and other qualified and key personnel. We rely on our executive officers, senior management and key employees to generate business and execute our initiatives successfully. Rakuyo Otsuki, our Chief Executive Officer, has a wealth of knowledge and business experience in the event produce, club management, sub-lease, and restaurant industry, the core business of our Group, as well as numerous personal and business relationships in this industry, and plays an extremely important role in the management of our Company. In addition, the relationships and reputation that members of our management and key employees have established and maintain with government personnel and other business partners contribute to our ability to maintain good relations and to identify new business opportunities. The loss of any key personnel or our failure to attract additional talent could reduce our employee retention, disrupt our research and development activities and operations, and impair our revenue growth and competitiveness. If one or more of our executive officers or key employees were unable or unwilling to continue their services with us, we might not be able to replace them easily, in a timely manner, or at all, and we might lose the innovation, collaboration and focus that contribute to our business.

We are vulnerable to changes in consumer preferences and economic conditions that could harm our business, financial condition, results of operations and cash flow.

Our businesses depend on discretionary consumer spending and are often affected by changes in consumer tastes, national, regional and local economic conditions, and demographic trends. Factors such as traffic patterns, weather, local demographics, and the type, number and locations of competitors may adversely affect the performance of individual locations. In addition, economic downturns, rapid inflation, tight labor market conditions and the resulting increase of general wage levels and increases in lease expenses could harm the industry in general and our locations in particular. Adverse changes in any of these factors could reduce consumer traffic or impose practical limits on pricing that could harm our business, financial condition, results of operations and cash flow. There can be no assurance that consumers will continue to regard our brand favorably or that we will be able to develop new services that appeal to consumer preferences. Our business, financial condition and results of operations depend in part on our ability to anticipate, identify and respond to changing consumer preferences and economic conditions. If we are unable to adapt to changes in consumer preferences and trends, we may lose customers and our revenues may decline.

Cyber-attacks and security vulnerabilities could result in serious harm to our reputation, business, and financial condition.

Threats to network and data security are constantly evolving and becoming increasingly diverse and sophisticated. Our products and services, as well as our servers and computer systems and those of third parties that we rely on, are subject to cybersecurity risks inherent to companies that process personal data. An increasing number of organizations have disclosed breaches of their information security systems, some of which have involved sophisticated and highly targeted attacks.

We were recently informed, in July of 2025, by the underwriter in our recent initial public offering that it had suffered a cybersecurity incident and specifically a ransomware incident, which has resulted in unauthorized access to some of the Representative’s systems and data, and the exfiltration of certain data from the Representative’s systems as well. It seems likely that confidential information regarding the Company that we had provided the underwriter in connection with its due diligence in our initial public offering was included in the data that was exfiltrated The underwriter is still investigating the extent of this incident, and has also informed us that it does not have any evidence that this data has been misused at this time. While we believe that any material data regarding the Company that was exfiltrated is reflected in our publicly available documents, we could be subject to liability risks to the extent the data consists of sensitive information about our officers, directors, personnel, contractors, customers, suppliers or vendors. We believe that any such risk is manageable and can be absorbed and addressed by our existing cybersecurity policies, procedures, and controls.

To that end, we employ robust security to defend against intrusion and attack of our systems, to protect our data and to resolve and mitigate the impact of any incidents. We also regularly educate our employees on these risks, and provide training to them to learn how to identify and respond to the same. Like most companies today, despite these efforts there is no way to fully remove the possibility of a cybersecurity incident from occurring and we, and third parties that we rely on, will likely experience cyber incidents in the future. Thus, in addition to the identified risk above, any additional future cyber incidents and resulting data breaches could result in substantial liability, regulatory actions, financial penalties, significant out of pocket costs, damage to our data and ability to do business, and reputational harm.

We and third parties that we rely on may experience cybersecurity incidents due to human error, malfeasance, system errors or vulnerabilities, or other issues. Actual or perceived cybersecurity incidents relating to our data or confidential information could subject us to regulatory investigations and orders, litigation, indemnity obligations, damages, penalties, fines and other costs in connection with actual and alleged contractual breaches, violations of applicable laws and regulations and other liabilities. Any such incident could also materially damage our reputation and harm our business, results of operations and financial condition. We do not maintain errors, omissions, and cyber liability insurance policies that cover security and privacy damages and hence have no insurance coverage in the event of liabilities actually incurred related to any such damages.

We are exposed to the risk of natural disasters, unusual weather conditions, pandemic outbreaks such as COVID-19, political events, war, terrorism, and unfavorable macroeconomic conditions such as inflation, which could disrupt business and limit our ability to grow our business and negatively affect our results of operations.

We and some of our suppliers, manufacturers, and customers are located in areas that have been or may be affected by natural disasters such as floods, typhoons, tsunamis, tornadoes, fires, earthquakes, volcanic eruptions, global pandemics such as COVID-19, war, and terrorism. Extreme weather events such as severe weather, resulting electrical or technological failures, or even a leak at a nuclear power plant could disrupt our operations and adversely affect our ability to sell our products and services. Any of these events could adversely affect our ability to sell our products and services and host events, and any of them could affect customer trends and purchasing, which in turn could adversely affect our revenues, assets or business.

In addition, our business may be affected by force majeure events, such as natural disasters. Temporary or prolonged disruptions in the transportation of goods, delays in our goods and supplies, disruptions in our technical support or information systems, fuel or power shortages or sharp increases in fuel or power prices could increase the cost of doing business. These events could also have indirect consequences, such as increased insurance or tax costs, if they result in a material loss of property or other insurable losses. Any one or a combination of these factors could have an adverse effect on our business and financial results.

Negative conditions in the general economy both in Japan and globally, including conditions resulting from changes in gross domestic product growth, financial and credit market fluctuations, inflation, recessions, international trade relations, pandemics (such as the COVID-19 pandemic), political turmoil, uncertain geopolitical conditions, natural catastrophes, warfare, and terrorist attacks could cause a decrease in business investments and consumer demand, and negatively affect the growth of our business. Additionally, inflation has accelerated in Japan and globally due in part to global supply chain issues, the Ukraine-Russia war, a rise in energy prices, and strong consumer demand as economies continue to reopen from restrictions related to the COVID-19 pandemic. An inflationary environment can increase our cost of labor, as well as our other operating costs, which may have a material adverse impact on our financial results. In addition, economic conditions could impact and reduce the number of customers who purchase our products or services as credit becomes more expensive or unavailable. Although interest rates have increased and are expected to increase further, inflation may continue. Further, increased interest rates could have a negative effect on the securities markets generally and increase the cost of capital to us, in particular, which may, in turn, have a material adverse effect on the market price of the shares.

We are exposed to risk of accidents and injuries in the course of our business.

We are in the business of the managing and curating events, many of which hosts hundreds to thousands of participants, and there is an inherent risk that accidents and injuries may occur during such events notwithstanding we have security staff in attendance. Claims may be made against us for such accidents and/or fatalities on grounds such as negligence or any failure by us to properly manage the events. If we cannot successfully defend ourselves against such claims, we could incur substantial liabilities. Regardless of merit or eventual outcome, liability claims may result in:

Any such outcomes could materially and adversely affect our business, financial condition, results of operations and growth prospects.

Our current insurance coverage may not sufficiently protect us against all the risks we are exposed to and our insurance premiums may increase.

There can be no assurance that our current insurance will cover all our risks or adequately protect us against all liabilities arising from claims and litigation against us. We will have to bear any losses, damages or liabilities in the course of our operations arising from events for which we do not have adequate insurance coverage. Further, our insurance premiums depend on various factors, including the scope and estimated contract sum set out in the service contracts with our customers and our insurance claim track record. There is no assurance that our insurance premiums will not increase or that our insurance coverage will not be reduced in the future. If we were held liable for uninsured losses, the amounts of claims for insured losses exceed the limits of our insurance coverage or the insurance premium payable by us increases significantly, our business, results of operations and financial condition may be materially and adversely affected.

We may need to raise additional capital required to grow our business, and we may be unable to raise capital on terms acceptable to us or at all.

Growing and operating our business may require significant cash outlay, capital expenditures and commitments. Although our current cash and cash equivalents and anticipated cash flows from operating activities, together with the net proceeds from our completed initial public offering, are expected to be sufficient  to meet our anticipated working capital requirements and capital expenditures in the ordinary course of business for at least 12 months following this Annual Report, there is a risk that we may need additional cash resources in the future to fund our growth plans or if we experience adverse changes in business conditions or other developments. We may also need additional cash resources in the future if we find and wish to pursue opportunities for new investments, acquisitions, capital expenditures or similar actions. If we determine that our cash requirements exceed the amount of cash and cash equivalents we have on hand at the time, we will need to seek additional capital, potentially through equity or debt financing, to fund our growth. Our ability to access the credit and capital markets in the future as a source of liquidity, and the borrowing costs associated with such financing, are dependent upon market conditions. We cannot provide any assurance that our assumptions used to estimate our liquidity requirements will remain accurate due to unseen factors such as ta global pandemic, risks of war, regional conflicts and natural disasters. In the event of a sustained market deterioration, and continued declines in revenues, we may need additional liquidity, which would require us to evaluate available alternatives and take appropriate actions. We cannot provide any assurance that we will be able to obtain additional sources of financing or liquidity in amounts or on terms acceptable to us, or at all.

Our executive officers have no prior experience in operating a U.S. public company, and their inability to operate the public company aspects of our business could harm us. Further, planned increases to our Executive Officer compensation will raise our operating costs and our failure to generate commensurately higher revenue could result in negative impacts to our financial results.

Our executive officers have no previous experience in operating a U.S. public company, which makes our ability to comply with applicable laws, rules and regulations uncertain. Our failure to comply with all laws, rules and regulations applicable to U.S. public companies could subject us or our management to regulatory scrutiny or sanction, which could harm our reputation and share price.

Further, we raised the compensation of our executive officers at the end of 2025 and will need to make commensurately higher revenue in order to maintain profitability. Our failure to perform at levels to generate enough revenue to pay these higher operating costs could negatively impact our financial results.

Risks Relating to our Securities

The market price of our Ordinary Shares may be volatile or may decline regardless of our operating performance, and you may not be able to resell your shares at or above the initial public offering price.

The market price of our Ordinary Shares may fluctuate significantly in response to numerous factors, many of which are beyond our control, including:

In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. Stock prices of many companies have fluctuated in a manner unrelated or disproportionate to the operating performance of those companies. In the past, stockholders have filed securities class action litigation following periods of market volatility. If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business, and adversely affect our business.

Holders of our Series A Preferred Shares have significant influence over us, including control over decisions that require the approval of holders of our common share.

Mr. Otsuki holds our Series A Preferred Shares and controls, in the aggregate with the Ordinary Shares, approximately 70.32% of the voting power represented by all our outstanding shares of share capital. As a result, the holder(s) of our Series A Preferred Shares will continue to exercise significant influence over all matters on which holders of Ordinary Shares are entitled to vote, including the election and removal of directors, amendments to our amended and restated articles of incorporation or amended and restated articles of association, and any approval of significant corporate transactions (including a sale of all or substantially all of our assets), and will continue to have significant control over our business, affairs, and policies, including the appointment of our management, through their influence over the board composition. The directors, whom the holder(s) of our Series A Preferred Shares will have the ability to elect through their voting power, will have the authority to incur additional debt, issue or repurchase shares, declare dividends, and make other decisions that could be detrimental to shareholders.

We expect that Mr. Otsuki, our executive director, will continue to be a holder of our Series A Preferred Shares. The holder(s) of our Series A Preferred Shares can take actions that have the effect of delaying or preventing a change of control of us or discouraging others from making tender offers for our shares, which could prevent shareholders from receiving a premium for their shares. These actions may be taken even if other shareholders oppose them. The concentration of voting power with the holder(s) of our Series A Preferred Shares may have an adverse effect on the price of our Ordinary Shares. The holder(s) of our Series A Preferred Shares may have interests that are different from yours and may vote in a way with which you disagree and that may be adverse to your interests.

As a result, for so long as certain members of our board will continue to be holders of our Series A Preferred Shares own a controlling or significant voting power in our issued and outstanding share capital, they generally will be able to control or significantly influence, directly or indirectly and subject to applicable law, all matters affecting us, including:

We may experience extreme stock price volatility unrelated to our actual or expected operating performance, financial condition, or prospects, making it difficult for prospective investors to assess the rapidly changing value of our Ordinary Shares.

Recently, there have been instances of extreme stock price run-ups followed by rapid price declines and strong stock price volatility with a number of recent initial public offerings, especially among companies with relatively smaller public floats. As a relatively small-capitalization company with relatively small public float, we may experience greater stock price volatility, extreme price run-ups, lower trading volume, and less liquidity than large-capitalization companies. In particular, our Ordinary Shares may be subject to rapid and substantial price volatility, low volumes of trades, and large spreads in bid and ask prices. Such volatility, including any stock run-up, may be unrelated to our actual or expected operating performance, financial condition, or prospects, making it difficult for prospective investors to assess the rapidly changing value of our Ordinary Shares.

In addition, if the trading volumes of our Ordinary Shares are low, persons buying or selling in relatively small quantities may easily influence prices of our Ordinary Shares. This low volume of trades could also cause the price of our Ordinary Shares to fluctuate greatly, with large percentage changes in price occurring in any trading day session. Holders of our Ordinary Shares may also not be able to readily liquidate their investment or may be forced to sell at depressed prices due to low volume trading. Broad market fluctuations and general economic and political conditions may also adversely affect the market price of our Ordinary Shares. As a result of this volatility, investors may experience losses on their investment in our Ordinary Shares. A decline in the market price of our Ordinary Shares also could adversely affect our ability to issue additional Ordinary Shares or other securities and our ability to obtain additional financing in the future. No assurance can be given that an active market in our Ordinary Shares will develop or be sustained. If an active market does not develop, holders of our Ordinary Shares may be unable to readily sell the shares they hold or may be unable to sell their shares at all.

If we fail to implement and maintain an effective system of internal controls, we may be unable to accurately or timely report our results of operations or prevent fraud, and investor confidence and the market price of our ordinary shares may be materially and adversely affected.

Prior to the completion of our initial public offering, we were a private company with limited accounting personnel. Our management had not performed an assessment of the effectiveness of our internal control over financial reporting, and our independent registered public accounting firm had not conducted an audit of our internal control over financial reporting. We are now required to include management’s report on internal control over financial reporting in this second annual report.

Our failure to implement and maintain effective internal controls over financial reporting could result in errors in our financial statements that could result in a restatement of our financial statements, cause us to fail to meet our reporting obligations and cause investors to lose confidence in our reported financial information, which may result in volatility in and a decline in the market price of our ordinary shares.

Upon completion of our initial public offering, we became a public company in the United States subject to the Sarbanes-Oxley Act of 2002. Section 404 now requires management’s report on our internal control over financial reporting in this second annual report. As an emerging growth company and non-accelerated filer, we are not required to obtain an auditor attestation report. Management may conclude that our internal control over financial reporting is not effective.

The Public Company Accounting Oversight Board, or PCAOB, has defined a material weakness as “a deficiency, or a combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim statements will not be prevented or detected on a timely basis.”

Generally speaking, if we fail to achieve and maintain an effective internal control environment, we could suffer material misstatements in our financial statements and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial information. This could in turn limit our access to capital markets, harm our results of operations and lead to a decline in the trading price of our ordinary shares. Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud, misuse of corporate assets and legal actions under the United States securities laws and subject us to potential delisting from Nasdaq, to regulatory investigations and to civil or criminal sanctions.

We incur substantial increased costs as a result of being a public company.

We incur significant legal, accounting, and other expenses as a public company that we did not incur as a private company. The Sarbanes-Oxley Act of 2002, as well as rules subsequently implemented by the SEC and Nasdaq, impose various requirements on the corporate governance practices of public companies.

Compliance with these rules and regulations increases our legal and financial compliance costs and makes some corporate activities more time-consuming and costlier. We will incur additional costs in obtaining director and officer liability insurance. In addition, we incur additional costs associated with our public company reporting requirements. It may also be more difficult for us to find qualified persons to serve on our board of directors or as executive officers.

We are an “emerging growth company,” as defined in the JOBS Act.

As required by Section 404 for this second annual report, we have incurred and may continue to incur additional expenses and management effort to comply with internal-control requirements.

We are currently evaluating and monitoring developments with respect to these rules and regulations, and we cannot predict or estimate with any degree of certainty the amount of additional costs we may incur or the timing of such costs.

Substantial future sales of our Ordinary Shares, including the Ordinary Shares that may be registered for resale in the future, could cause the price of our Ordinary Shares to decline.

Sales of substantial amounts of our Ordinary Shares in the public market, including the potential resale of Ordinary Shares that may be offered for resale in the future, could cause the market price of our Ordinary Shares to decline. Any Ordinary Shares offered for resale in the future may introduce risks such as increased market volatility or downward pressure on your share price.

Further, while our directors and officers named in the section “Management,” and certain shareholders have agreed not to sell any shares until 180 days after the date our Ordinary Shares commenced trading on the Nasdaq Capital Market without the prior written consent of the underwriter (subject to certain exceptions in the relevant lock-up agreements), the underwriter may release these securities from these restrictions at any time.

If securities or industry analysts do not publish research or reports about our business, or if they publish a negative report regarding our Ordinary Shares, the price of our Ordinary Shares and trading volume could decline.

Any trading market for our Ordinary Shares may depend in part on the research and reports that industry or securities analysts publish about us or our business. We do not have any control over these analysts. If one or more of the analysts who cover us downgrade us, the price of our Ordinary Shares would likely decline. If one or more of these analysts cease coverage of our Company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause the price of our Ordinary Shares and the trading volume to decline.

Our management has broad discretion to determine how to use the funds raised in the offering and may use them in ways that may not enhance our results of operations or the price of our Ordinary Shares.

We have completed our initial public offering. The net proceeds to the Company were approximately US$2.8 million, after deducting underwriting discounts and commissions and offering expenses. We will use the proceeds for purposes described in this Annual Report, subject to management’s discretion.

If we cease to qualify as a foreign private issuer, we would be required to comply fully with the reporting requirements of the Exchange Act applicable to U.S. domestic issuers, and we would incur significant additional legal, accounting and other expenses that we would not incur as a foreign private issuer.

As a foreign private issuer, we will be exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements, and our officers, directors and principal shareholders will be exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we will not be required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently or as promptly as United States domestic issuers, and we will not be required to disclose in our periodic reports all of the information that United States domestic issuers are required to disclose. While we currently qualify as a foreign private issuer, we may cease to qualify as a foreign private issuer in the future, in which case we would incur significant additional expenses that could have a material adverse effect on our results of operations.

You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law.

We are an exempted company incorporated under the laws of the Cayman Islands with limited liability. Our corporate affairs are governed by our Second Amended Memorandum and Articles of Association, the Companies Act and the common law of the Cayman Islands. We will also be subject to the U.S. securities laws. The rights of shareholders to take action against our directors and us, actions by minority shareholders and the fiduciary duties of our directors to us under Cayman Islands law are governed by our Second Amended Memorandum and Articles of Association, the Companies Act and the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands (as compared to the U.S. law) as well as from English common law. The decisions of the English courts are of highly persuasive authority, but are not binding on Cayman Islands courts (except for those decisions handed down from the Judicial Committee of the Privy Council to the extent that these have been appealed from the Cayman Islands courts). The rights of our shareholders and the fiduciary duties of our directors under Cayman Islands law are broadly similar to those in other common law jurisdictions, but there may be differences in the statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a different body of securities laws than the United States, and provide significantly less protection to investors. In addition, if shareholders want to proceed against us outside of the Cayman Islands, they will need to demonstrate that they have the standing to initiate a shareholder derivative action in a federal court of the United States. There is no guarantee that the courts of the Cayman Islands would automatically recognize or enforce against us judgments of courts of the United States predicated upon the civil liability provisions of the federal securities laws of the United States or any state. In addition, the courts of the Cayman Islands will not recognize and enforce a judgment predicated upon the civil liability provisions of the federal securities laws of the United States or any state, so far as the liabilities imposed by those provisions are taxes, fines or penal in nature, or otherwise contrary to public policy, including punitive damages.

If we cannot continue to satisfy the listing requirements and other rules of the Nasdaq Capital Market, our securities may be delisted, which could negatively impact the price of our securities and your ability to sell them.

Our Ordinary Shares are listed on the Nasdaq Capital Market under the symbol “THH.” To maintain that listing, we must comply with Nasdaq’s continued listing requirements, including those regarding minimum bid price, minimum stockholders’ equity, minimum market value of publicly held shares and corporate governance.

We have previously failed to satisfy the Nasdaq Listing Requirements. On March 11, 2026, we received a deficiency letter from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) notifying us that we were not in compliance with Nasdaq Listing Rule 5550(a)(2), because the closing bid price of our Ordinary Shares had been below US$1.00 per share for 30 consecutive business days. On August 28, 2026, Nasdaq notified us that we had regained compliance and that the matter was closed.

There can be no assurance that we will maintain compliance with the Nasdaq Listing Requirements. If the Nasdaq Capital Market delists our securities from trading, we could face significant consequences, including:

Proposed changes to Nasdaq’s continued listing standards, including a minimum market value of listed securities requirement, could increase the risk that our Ordinary Shares will be suspended or delisted without an opportunity to regain compliance.

On July 22, 2026, the SEC’s Division of Trading and Markets, acting under delegated authority, approved a Nasdaq rule change that would require companies listed on the Nasdaq Global Select Market, Nasdaq Global Market or Nasdaq Capital Market to maintain a minimum market value of listed securities (“MVLS”) of at least US$5 million. Under that rule, if a listed company’s MVLS remained below US$5 million for 30 consecutive business days, Nasdaq would issue a Staff Delisting Determination and immediately suspend and delist the company’s securities, without the compliance period generally available for other continued listing deficiencies.

Petitions for review of the delegated approval automatically stayed the effectiveness of the rule, and on September 11, 2026, the SEC granted review of the delegated action. As a result, the proposed MVLS requirement is not currently effective, and Nasdaq’s existing continued listing standards continue to apply while the SEC’s review is pending. We cannot predict whether or when the rule will become effective, or whether it will be adopted in its current form or with modifications.

We have a relatively small public float and market capitalization, and the market value of our Ordinary Shares may be affected by factors beyond our control, including fluctuations in our operating results, general market conditions, investor sentiment and the trading price and volume of our Ordinary Shares. If the rule becomes effective and the market value of our listed securities remains below US$5 million for the prescribed period, our Ordinary Shares could be suspended and delisted immediately, without an opportunity to regain compliance. We cannot assure you that we would be able to take remedial action sufficient to maintain compliance with the proposed requirement.

Any suspension or delisting of our Ordinary Shares could materially reduce their liquidity and market price, impair our ability to raise capital, reduce the ability of shareholders to trade their shares and result in a loss of investor confidence.

We are an “emerging growth company” within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies, this will make it more difficult to compare our performance with other public companies.

We are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act. Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This will make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Because we are an “emerging growth company,” we may not be subject to requirements that other public companies are subject to, which could affect investor confidence in us and our Ordinary Shares.

For as long as we remain an “emerging growth company,” as defined in the JOBS Act, we have elected to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies,” including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of shareholder approval of any golden parachute payments not previously approved. Because of these lessened regulatory requirements, our shareholders would be left without information or rights available to shareholders of more mature companies. If some investors find our Ordinary Shares less attractive as a result, there may be a less active trading market for our Ordinary Shares and our share price may be more volatile. See “Implications of Our Being an ‘Emerging Growth Company.’”

As a “controlled company” under the Nasdaq Listing Rules, we may choose to exempt our Company from certain corporate governance requirements that could have an adverse effect on our public shareholders.

Mr. Otsuki beneficially owns 200,000 Series A Preferred Shares (which are entitled to twenty-five (25) votes on any matter or which action of the shareholders of the Company is sought) and 2,035,157 Ordinary Shares and is able to exercise over a majority of our voting power. Under the Nasdaq Marketplace Rules 5615(c), a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company”. A “controlled company” may elect not to comply with certain corporate governance requirements, including the requirement that a majority of our directors be independent, as defined in the Nasdaq Marketplace Rules, the requirement that our director nominees must be selected or recommended to the board of directors for determination, by either a Nominating Committee comprised solely of independent directors or by a majority of the independent directors, the requirement that we have a formal written charter or board resolution, as applicable, addressing the nominations process and such related matters as may be required under the federal securities laws, and the requirement that compensation of the chief executive officer must be determined, or recommended to the board of directors for determination, either by a Compensation Committee comprised of independent directors or by a majority of the independent directors on its board of directors and that compensation for all other officers must be determined, or recommended to the board of directors for determination, either by such Compensation Committee or a majority of the independent directors on the company’s board of directors. Although we do not intend to rely on the “controlled company” exemption under the Nasdaq Marketplace Rules, we could elect to rely on this exemption in the future. If we elect to rely on the “controlled company” exemption, a majority of the members of our board of directors might not be independent directors and our nominating and corporate governance and compensation committees might not consist entirely of independent directors. Accordingly, during any time while we remain a controlled company relying on the exemption and during any transition period following a time when we are no longer a controlled company, you would not have the same protections afforded to shareholders of companies that are subject to all of the Nasdaq Marketplace Rules corporate governance requirements. Our status as a controlled company could cause our common shares to look less attractive to certain investors or otherwise harm our trading price.

The laws of the Cayman Islands may not provide our shareholders with benefits comparable to those provided to shareholders of corporations incorporated in the United States.

Our corporate affairs are governed by our memorandum and articles of association, by the Cayman Companies Act and by the common law of the Cayman Islands. The rights of shareholders to take action against our directors, actions by minority shareholders, and the fiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law in the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands and from English common law. Decisions of the Privy Council (which is the final Court of Appeal for British overseas territories such as the Cayman Islands) are binding on a court in the Cayman Islands. Decisions of the English courts, and particularly the Supreme Court and the Court of Appeal are generally of persuasive authority but are not binding in the courts of the Cayman Islands. Decisions of courts in other Commonwealth jurisdictions are similarly of persuasive but not binding authority. The rights of our shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedents in the United States. In particular, the Cayman Islands has a less developed body of securities laws relative to the United States. Therefore, our public shareholders may have more difficulty protecting their interests in the face of actions by our management, directors, or controlling shareholders than would shareholders of a corporation incorporated in a jurisdiction in the United States.

You may be unable to present proposals before annual general meetings or extraordinary general meetings not called by shareholders.

The Companies Act does not provide shareholders with any right to requisition a general meeting or to put any proposal before a general meeting. However, these rights may be provided in a company’s articles of association. Our articles of association allow our shareholders holding shares which carry in aggregate not less than one-tenth of all votes attaching to all of our issued and outstanding shares, to requisition an extraordinary general meeting of our shareholders, in which case our board of directors is obliged to call such meeting. Advance notice of at least ten (10) clear days is required for the convening of any general meeting of our shareholders. A quorum required for a meeting of shareholders consists of at least two shareholders, present in person or by proxy, holding shares which carry in aggregate in excess of 50% of all votes attaching to all of our shares in issue and entitled to vote at such meeting.

If we are classified as a passive foreign investment company, United States taxpayers who own our Ordinary Shares may have adverse United States federal income tax consequences.

A non-U.S. corporation such as ourselves will be classified as a passive foreign investment company, which is known as a PFIC, for any taxable year if, for such year, either:

Passive income generally includes dividends, interest, rents and royalties (other than rents or royalties derived from the active conduct of a trade or business), and gains from the disposition of passive assets.

If we are determined to be a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. taxpayer who holds our Ordinary Shares, the U.S. taxpayer may be subject to increased U.S. federal income tax liability and may be subject to additional reporting requirements.

It is possible that, for our 2023 taxable year or for any subsequent year, more than 50% of our assets may be assets which produce passive income, in which case we would be deemed a PFIC, which could have adverse U.S. federal income tax consequences for U.S. taxpayers who are shareholders. We will make this determination following the end of any particular tax year.

For purposes of the PFIC analysis, in general, a non-U.S. corporation is deemed to own its pro rata share of the gross income and assets of any entity in which it is considered to own at least 25% of the equity by value.

For a more detailed discussion of the application of the PFIC rules to us and the consequences to U.S. taxpayers if we were or are determined to be a PFIC, see “Material Income Tax Consideration — United States Federal Income Taxation — PFIC.”

ITEM 4. INFORMATION ON THE COMPANY

CORPORATE HISTORY AND STRUCTURE

Corporate Structure

We are a Cayman Islands exempted company incorporated with limited liability on September 12, 2024. Exempted companies are Cayman Islands companies conducting business mainly outside the Cayman Islands and, as such, are exempted from complying with certain provisions of the Companies Act (as amended) of the Cayman Islands (the “Cayman Companies Act”).

The following diagram illustrates our corporate structure as of June 30, 2026. The percentages reflect the voting ownership interests held by our shareholders. Each holder of Ordinary Shares is entitled to one vote per Ordinary Share and each holder of Series A Preferred Share is entitled to twenty-five (25) votes per one Series A Preferred Share. The Company completed its initial public offering on August 27, 2025, the Ordinary Shares began trading on the Nasdaq Capital Market under the ticker symbol “THH” on August 28, 2025, and the Company effected a 10-for-1 share consolidation on August 10, 2026. For more details on our corporate history, please refer to “Corporate History and Structure.”

Implications of Our Being an “Emerging Growth Company”

We continue to qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or the “JOBS Act.” Our total annual gross revenues for the fiscal year ended June 30, 2026 were approximately US$19.5 million (JPY3,167.1 million), which is less than US$1.235 billion, and we remain within five years of the completion of our initial public offering on August 27, 2025. An “emerging growth company” may take advantage of reduced reporting requirements that are otherwise applicable to larger public companies. In particular, as an emerging growth company, we:

We intend to take advantage of all of these reduced reporting requirements and exemptions, including the longer phase-in periods for the adoption of new or revised financial accounting standards under §107 of the JOBS Act. Our election to use the phase-in periods may make it difficult to compare our financial statements to those of non-emerging growth companies and other emerging growth companies that have opted out of the phase-in periods under §107 of the JOBS Act.

Under the JOBS Act, we may take advantage of the above-described reduced reporting requirements and exemptions until we no longer meet the definition of an emerging growth company. The JOBS Act provides that we would cease to be an “emerging growth company” at the end of the fiscal year in which the fifth anniversary of our initial sale of common equity pursuant to a registration statement declared effective under the Securities Act of 1933, as amended (the “Securities Act”) occurred, if we have more than $1.235 billion in annual revenue, have more than $700 million in market value of our Ordinary Shares held by non-affiliates, or issue more than $1 billion in principal amount of non-convertible debt over a three-year period.

Implications of Being a Controlled Company

The Company completed its initial public offering on August 27, 2025 and remains a “controlled company” under the Nasdaq Marketplace Rules 5615(c). This “controlled company” status is due to the fact that Mr. Otsuki is able to exercise approximately 70.32% of our voting power and will be able to determine all matters requiring approval by our shareholders. Mr. Otsuki will therefore be able to influence the election and removal of directors, amendments to our amended and restated articles of incorporation or amended and restated articles of association, and any approval of significant corporate transactions (including a sale of all or substantially all of our assets) and will have significant control over our business, affairs and policies, including appointment of our management, through his influence over the board. See page [7] for the risk factor beginning “Holders of our Series A Preferred Shares will continue to have significant influence over us after this offering, including control over decisions that require the approval of holders of our common share” for more information.

As a controlled company, we may elect to rely on exemptions from certain Nasdaq corporate governance requirements.

Although we do not intend to rely on the controlled company exemptions under the Nasdaq Marketplace Rules even if we are deemed a controlled company, we could elect to rely on these exemptions in the future, and if so, you would not have the same protection afforded to stockholders of companies that are subject to all of the corporate governance requirements of the Nasdaq Marketplace Rules.

Implications of Our Being a Foreign Private Issuer

As a public company, we report under the Exchange Act as a non-U.S. company with foreign private issuer status. Even if we no longer qualify as an emerging growth company, as long as we qualify as a foreign private issuer under the Exchange Act, we will be exempt from certain provisions of the Exchange Act that are applicable to U.S. domestic public companies, including:

Both foreign private issuers and emerging growth companies are also exempt from certain more stringent executive compensation disclosure rules. Thus, even if we no longer qualify as an emerging growth company but remain a foreign private issuer, we will continue to be exempt from the more stringent compensation disclosures required of companies that are neither emerging growth companies nor foreign private issuers.

BUSINESS OPERATIONS

contribute their best throughout their careers, promoting a culture of belonging, safety, and lifelong growth and development.

Mission

Delighting audiences worldwide through our music, culture and entertainment offerings, we aim to become a leading global lifestyle entertainment company. We seek to deliver unforgettable experiences to enrich lives and foster vibrant communities and promote a healthy and sustainable lifestyle entertainment economy.

Company Overview 

We are a lifestyle entertainment company that operates in Japan offering a diverse range of services across the entertainment and hospitality sectors. Our aspiration is to be a pre-eminent player in the entertainment industry by providing innovative solutions, exceptional experiences, and unparalleled service. Our principal businesses are (i)event curation ; (ii) consultancy and management services; (iii) sub-leasing of entertainment venues; and (iv) ownership and operation of restaurants.

We started our journey in 2013 and have sought to be at the forefront of Japan’s evolving entertainment landscape. During this transformative decade, we witnessed a significant shift in consumer preferences, driven by the rise of social media, changing demographics, and a growing desire for immersive experiences.

Embracing Change, Driving Innovation

In response to the evolving landscape, we adapted and innovated, capitalizing on emerging trends and demands. Our strategic focus areas include curating immersive experiences through unique events and festivals that blend music, art, fashion, and cuisine, as well as diversified entertainment options to cater to diverse tastes and preferences. Additionally, we introduce global talent and collaborations, bringing international perspectives and creativity to the Japanese market, and leverage social media and online platforms for digital engagement to connect with our audience and promote events and artists.

By embracing these shifts, we believe we have established ourselves as a prominent player in Japan’s lifestyle entertainment industry, delivering exceptional experiences that inspire, entertain, and unite. We believe that our commitment to innovation has fostered brand recognition and a reputation for quality that has allowed us to thrive in Japan’s lifestyle entertainment scene. With a commitment to innovation, cultural exchange, and building community through shared events, we seek to play a vital role in promoting Japan’s entertainment industry and tourism sector, while celebrating the boundless power of music, entertainment and shared experiences to unite people in Japan and beyond.

Our principal businesses are (i) event curation; (ii) consultancy and management; (iii) sub-leasing of entertainment venues, and (iv) ownership and operation of restaurants. Each are discussed in more detail below.

EVENT CURATION

We provide multi-genre event curation services to our customers based on our experience gained over the years. We plan, produce, manage, design and coordinate all aspects of an event or stage set. Depending on the needs of a customer, we provide a comprehensive range of services from conceptualizing an event or function, designing and creating a theme for a stage or event, provision of public announcement sound systems, lighting, disc jockey (“DJ”) and video jockey (“VJ”) technicians, provision of security services, graphics/web design, music video production and enhancement and ticketing.

Upon the request for our services from a customer, our sales team will engage with the customer for a sit down or virtual meeting to understand the requirements of the customer. Once the customers’ ideas and needs are visualized, our sales team will arrange a brainstorming session with our design and event planning team to come up with a concept and design befitting for the customer. Criteria that our team will consider range from the size of the event, the capacity of the crowd anticipated, the location of the event (ie, indoor or outdoor), the seasonality of event (ie winter or summer), any specific of the artist/DJ/VJ etc. In addition, we will provide the customer with a costing proposal. Based on this, we will prepare design boards and sketches based on our customer’s specifications and based on our team’s experience for similar events. Preliminary designs are shown to the customer for discussion following which, modification and refining may be necessary based on their feedback. We generally go through several rounds of design and concept amendments before a final proposal is accepted by the customer.

Once the final proposal is accepted by the customer, our team will proceed to the procurement stage whereby we source the required products, materials, equipment, venue, ticketing, food etc from such service providers. To the extent necessary, we subcontract certain parts of an event to third parties such as construction companies. Our quality control team will engage at all stages of the curation process to ensure that only quality products, as well as where applicable, environmental and sustainability standards, are used/adhered to.

Prior to handover of an event, numerous checks are made by the customer and our team running through every aspect of the event from sound, visual, equipment, safety, security, ticketing etc. As we are generally also engaged to manage the operation of the event and not just the curation, we would see the entire event throughout its course. We pay special attention to health and safety, as we must ensure that each event has sufficient security staff for crowd control purposes as well as enough exit routes in case of emergency so as to have an orderly and efficient exiting of a venue.

Over time, we believe we have established ourselves as a premier event curator, delivering exceptional experiences that captivate audiences and foster memorable connections. Our event curation vertical has successfully launched over 30 events in the past three years, showcasing our expertise in creating immersive and engaging experiences that cater to diverse tastes and preferences.

Showcase Events: 

Our portfolio includes several events that showcase our capabilities and creativity, including the following:

1. MUSIC CIRCUS: A flagship festival that has attracted 626,500 people over 10 years, featuring over 100 groups and 1,000 artists from Japan and abroad – more than a music festival, MUSIC CIRCUS presents an array of artists, including dancers, fashion shows as well as a variety of hip hop, electronic and pop performers. This project has not only demonstrated our ability to curate large-scale events but also our commitment to promoting Japanese culture and music to a globally-diverse crowd. By joining forces with SBI Holdings Inc, NEXYZ.Group and Risenet Co., Ltd, we have expanded our reach and capabilities, enabling us to launch new regional revitalization projects that combine music, travel, and local culture.

2. Senshu Dream Fireworks: A large-scale fireworks festival held in Sennan, Osaka, renowned for its stunning backdrop overlooking the Kansai International Airport and Southern Beach. This event has become a popular tourist attraction in the Osaka region, featuring additional festivities like food stalls, live performances, and traditional dancing alongside the fireworks show. Our expertise in event curation has enabled us to create an immersive experience that combines entertainment, culture, and community engagement.

3. Osaka Night Fusion: A live entertainment show primarily directed at foreign visitors, showcasing Japanese culture, dance music, and performers, including elements of sword play and Kabuki lion dancers. Held every Friday at Pivot BASE Café & Bar in Dotonbori, Osaka, this event has become a hub for cultural exchange and creativity, featuring a unique blend of traditional and modern Japanese elements. Our ability to curate innovative events has enabled us to attract a diverse audience and create a new type of nightlife experience in Osaka.

Below are recent events hosted by TryHard:

Family Events

Music Festivals 

Cultural Events

These events demonstrate our expertise in hosting a varied array of events. We want to continue pushing the boundaries of innovation and creativity by creating new and exciting experiences that captivate audiences and foster memorable connections.

Revenue in event curation segment decreased from JPY898.8 million for the year ended June 30, 2025, to JPY894.6 million for the year ended June 30, 2026, reflecting a 0.5% decline year-over-year. This performance was driven by an increase in the number of events held, particularly in the music and entertainment sectors and our ability to attract larger audiences and secure more sponsorship deals.

CONSULTANCY AND MANAGEMENT

As part of the provision of our comprehensive services to customers in the entertainment industry, we also provide management and consulting services. Our customers may have clubs, functions and events of their own but lack the experience, manpower, etc to manage such projects. In this regard, we engage with customers offering our management and consulting services which comprises our in-depth knowledge of how to successfully and safely operate an entertainment venue/event. Under this aspect of our business, we may provide a whole comprehensive range of services such as venue management, artist production and management, security, food and beverage, ticketing, accounting, visual designs, VIP packages, photography, logo design, marketing etc. We have a vast database of reputable and renowned artists, DJs, VJs, MCs, dancers, entertainers both locally and internationally that we can readily source to match the requirements of an event or club. We negotiate all the terms of an engagement with the artists, DJs, VJs, MCs, dancers, entertainers or their agents directly before we sign off on a management contract with our customers. We will generally ensure a backup replacement artist/DJ for events in the unlikely scenario any of them backing out or are unable to perform for any reason. We also have collaborations with influencers for marketing purposes. As at the date of this report, we provide comprehensive management and consultancy services to a portfolio of 22 clubs across Japan. Our services encompass various aspects of club management, including:

Venue Management: We provide oversight of day-to-day club operations to ensure smooth and efficient management. Our team handles maintenance and repairs of club facilities to maintain a safe and welcoming environment for customers. We also manage club staff and personnel, including recruitment, training, and performance evaluation.

Artist Production: Our team books and manages local and international artists to perform at our clubs, ensuring a diverse and exciting lineup of events. We organize live performances and events, handling logistics, marketing, and promotion. We also liaison with artists, managers, and agents to negotiate contracts and ensure successful events.

Management: We provide strategic planning and direction for club operations, setting goals and objectives to drive growth and profitability. Our team handles financial management and accounting, including budgeting, forecasting, and financial reporting. We also develop and implement marketing and promotional activities to attract customers and drive revenue.

Security: Our team provides security personnel for club events, ensuring a safe and secure environment for customers. We develop and implement security protocols, including risk management and emergency response planning. Our security team is trained to handle incidents and ensure compliance with relevant laws and regulations.

Food and Beverage: We manage bar and kitchen operations, including menu development, inventory management, and supply chain management. Our team develops and implements menus and drink offerings, ensuring a high-quality and diverse range of options for customers. We also provide exceptional customer service and support to ensure a positive experience for all customers.

Ticketing: Our team manages ticket sales and revenue, including ticketing system development and implementation. We provide customer service and support for ticketing-related inquiries and issues. Our team also analyzes ticket sales data to inform marketing and promotional strategies.

Accounting: We provide financial reporting and analysis, including budgeting and forecasting. Our team ensures compliance with financial regulations and laws, including tax compliance and financial reporting requirements. We also provide financial planning and advisory services to support business growth and development.

Visual Design: Our team develops visual branding and identity for our clubs, including logos, signage, and marketing materials. We design and develop marketing materials and promotional items, including flyers, posters, and social media graphics. Our team also creates digital content and graphics for use on social media, websites, and other digital platforms.

VIP Packages: We develop and sell VIP packages and experiences, including exclusive access to events, priority entry, and personalized service. Our team manages VIP guest services and amenities, including VIP areas, bottle service, and personalized concierge services. We also liaison with VIP clients and guests to ensure an exceptional experience.

Photography: Our team provides photography services for club events, capturing high-quality images for use on social media, marketing materials, and other promotional channels. We develop visual content for marketing and promotional purposes, including photo shoots, video production, and graphic design. Our team also manages photography staff and equipment, ensuring high-quality results.

Logo Design: We develop logos and branding materials for our clubs, including design concepts, revisions, and final delivery. Our team designs and develops marketing materials and promotional items, including business cards, letterheads, and other branded materials. We also create digital content and graphics for use on social media, websites, and other digital platforms.

Marketing: Our team develops and implements marketing strategies to attract customers and drive revenue. We manage social media and online presence, including content creation, posting, and engagement. Our team also organizes promotional events and activities, including parties, concerts, and other events to drive foot traffic and revenue.

Our Club Portfolios:

Below is a list of the 22 clubs under our management:

Address: B1, No2 Toa Kaikan Building, 1-21-1 Kabukicho, Shinjuku-ku, Tokyo, Japan

Address: 2F, 11-2 Hanabatacho, Chuo-ku, Kumamoto City, Kumamoto Prefecture, Japan

Address: B1, Umeda Rakutenchi Building, 5-1 Kakudacho, Kita-ku, Osaka City, Osaka Prefecture, Japan

Address: 6F, Don Quijote Building, 12-1 Koyamachi, Aoi-ku, Shizuoka City, Shizuoka Prefecture, Japan

Address: B1, Park 10 Building, 1-18-27 Higashishinsaibashi, Chuo-ku, Osaka City, Osaka Prefecture, Japan

Address: 1F/12F, Sakae Nanairo, 3-17-15 Nishiki, Naka-ku, Nagoya City, Aichi Prefecture, Japan

Address: 3F/4F, F・S Kiyamachi Building, 179 Zaimokucho, Kiyamachi Sanjo-sagaru, Nakagyo-ku, Kyoto City, Kyoto Prefecture, Japan

Address: B1, New Koyo Building, 1-5-1 Kitanozaka-dori, Chuo-ku, Kobe City, Hyogo Prefecture, Japan

Address: 4-2-4, Minami16-jonishi, Sapporo Shi Chuo Ku, Hokkaido, Japan

Address: 7F, Don Quijote Kokusai Dori Store, 2-8-19 Matsuo, Naha City, Okinawa Prefecture, Japan

Address: B1/B2, Build Up Nagahoribashi Building, 1-18-8 Shimanouchi, Chuo-ku, Osaka City, Osaka Prefecture, Japan

Address: 2F, Minex 88 Building, 3-18-12 Nishiki, Naka-ku, Nagoya City, Aichi Prefecture, Japan

Address: B1, Arc Building, 3-22-7 Nishiki, Naka-ku, Nagoya City, Aichi Prefecture, Japan

Address: 2F, F・S Kiyamachi Building, 179 Zaimokucho, Kiyamachi Sanjo-sagaru, Nakagyo-ku, Kyoto City, Kyoto Prefecture, Japan

Address: B1, The Atrium, 1-5-30 Shinsaibashisuji, Chuo-ku, Osaka City, Osaka Prefecture, Japan

Address: 1st Floor, Nangin Chuo Building, 1-53-4 Nakacho, Omiya Ward, Saitama City, Saitama Prefecture

Address: 1F, Tamahachi Building, 2-3-22 Higashishinsaibashi, Chuo-ku, Osaka City, Osaka Prefecture, Japan

Address: 8th Floor, Plaza Umeda Building, 8-17 Taiyuji-cho, Kita-ku, Osaka City

Address: akazakuidaore Bld.5F-11, 1-7-21, Dotombori, Osaka Shi Chuo Ku, Osaka Fu,Japan

Address: 2-11-4 Kokubuncho, Aoba-ku, Sendai-shi, Miyagi, Japan

Address: 1-14-28 Daimyo, Chuo-ku, Fukuoka-shi, Fukuoka, Japan

Address: 4-2-4, Minami6-jonishi, Sapporo Shi Chuo Ku, Hokkaido, Japan

Strategic Partnerships and Collaborations within our consultancy and management business:

At TryHard, we believe that strategic partnerships and collaborations are essential to driving growth, innovation, and excellence in the event production industry. Our partnerships enable us to leverage the expertise, resources, and networks of our partners, enhancing our capabilities and delivering exceptional value to our clients. We have established a diverse range of collaborations and partnerships with various government entities and organizations across Japan. These partnerships have enabled us to expand our business operations, enhance our service offerings, and drive revenue growth. An overview of the types of partnerships we have entered into to date are as follows:

We host MUSIC CIRCUS events through Music Circus Co., an entity in which we hold a 20% interest with the remaining 80% held by three Japanese companies: NEXYZ.Group Corporation, an entertainment and media conglomerate; SBI Holdings Inc, a financial services company with a focus on innovation and technology; and Risenet Co., Ltd, a specialized event production and management company.

The Music Circus Co. partnership was established to leverage the collective strengths and expertise of its shareholders to host large-scale music festivals in Japan branded as MUSIC CIRCUS. Our primary objective for this partnership is to deliver high-quality events, expand our brand’s reach and presence in the Japanese event production industry. Since its establishment in 2014, Music Circus Co. has achieved demonstrable success in organizing and executing multiple large-scale music festivals that have attracted thousands of attendees.

We are optimistic about the prospects of the Music Circus Co. partnership, with plans to expand our event portfolio to include new and diverse events, further linking our brand to a premier event organizer in Japan. We also plan to enhance our brand presence and recognition, both domestically and internationally, and continue to drive revenue growth through the successful execution of music festivals and events.

We have collaborated with government agencies to promote tourism and regional revitalization. Specifically:

Examples of our sponsored events include:

We have partnered with several beverage and hospitality companies, including entering into the following agreements to promote specific beverages at our managed locations or events:

Other corporate partnerships include the following: 

Our team of seasoned experts delivers comprehensive management and consultancy services to each venue, as we work to provide seamless operations, exceptional customer service, and optimal profitability. With expertise spanning all aspects of club management, our portfolio boasts a diverse range of establishments across major Japanese cities, including Tokyo, Osaka, Nagoya, Kyoto, Hiroshima, and Okinawa. This geographic footprint enables us to leverage vibrant local markets, capitalize on tourism, and establish a robust national presence. Our portfolio includes large-scale clubs, intimate lounges, and trendy bars, each offering a unique atmosphere and entertainment experience that caters to a broad clientele, from locals to tourists.

Through our comprehensive management and consultancy services, we are committed to delivering exceptional club experiences, maintaining unwavering operational standards, and establishing ourselves as a leading player in Japan’s dynamic nightlife industry.

We aggressively expanded our footprint from 16 clubs under management as of the commencement of the year ended June 30, 2025 to 22 clubs by the year ended June 30, 2026, representing a 37.5% increase in portfolio size. This expansion was driven by our territory coverage strategy focused on securing market share and establishing presence in key entertainment districts.

Revenue from the consultancy and management segment was JPY2,096.8 million for the year ended June 30, 2026, compared to JPY2,480.3 million for the prior year, reflecting a decrease of 15.5%. The decrease was primarily attributable to our strategic market penetration phase, where initial management fees were structured competitively to facilitate rapid onboarding of new venues and long-term market share acquisition. We expect these new venues to contribute positively to revenue as operations mature.

SUB-LEASING

Our sub-leasing business vertical is a strategic expansion of our lifestyle entertainment offerings, leveraging on our expertise in venue management, event curation, and hospitality to provide unique and flexible sub-leasing solutions to entertainment venue owners and operators.

The concept and strategy behind our sub-leasing business involve partnering with entertainment venue owners and operators to sub-lease their properties on a short-term or long-term basis. This strategy enables us to identify opportunities for venue revitalization and provide a steady stream of revenue to venue owners and operators.

Our sub-leasing business focuses on finding entertainment venues that are underutilized or require revitalization and partnering with their owners or operators to sub-lease the properties. We invest in revitalizing these venues, enhancing their amenities, and improving their overall appeal to attract new customers.

In addition, we program a diverse range of events and activities at the sub-leased venues, including concerts, festivals, fashion shows, and corporate events. We share revenue with the venue owners or operators, providing them with a steady stream of income while minimizing their operational risks.

Our sub-leasing business vertical offers several benefits to entertainment venue owners and operators. The sub-leasing model provides venue owners and operators with a steady stream of revenue, helping to offset their operational costs. By partnering with us, venue owners and operators can minimize their operational risks, as we assume responsibility for programming and managing the venues.

Furthermore, our investment in revitalizing the sub-leased venues enhances their appeal and attractiveness to new customers, increasing their long-term value. Our expertise in venue management, event curation, and hospitality is also made available to venue owners and operators, helping them to improve their operational efficiency and effectiveness.

Our sub-leasing business vertical benefits from synergies with our other business verticals. Our expertise in event curation and management enables it to program a diverse range of events and activities at the sub-leased venues. Our consultancy and management services can also be leveraged to support the operations of the sub-leased venues.

Additionally, our restaurant business vertical can be integrated with the sub-leasing business, providing customers with a comprehensive entertainment and dining experience. By leveraging these synergies and focusing on providing unique and flexible sub-leasing solutions, our sub-leasing business vertical is well positioned for growth and success.

As part of the consultancy and management services we offer, some clients request a one-stop solution including the selection and securing of the venue for the nightclubs. As of the date of this report, of the 22 clubs we manage the following eight club portfolios are on the sub-leasing model with us.

Address: B1, No2 Toa Kaikan Building, 1-21-1 Kabukicho, Shinjuku-ku, Tokyo, Japan

Address: 2F, 11-2 Hanabatacho, Chuo-ku, Kumamoto City, Kumamoto Prefecture, Japan

Address: 6F, Don Quijote Building, 12-1 Koyamachi, Aoi-ku, Shizuoka City, Shizuoka Prefecture, Japan

Address: B1, Arc Building, 3-22-7 Nishiki, Naka-ku, Nagoya City, Aichi Prefecture, Japan

Address: B1, The Atrium, 1-5-30 Shinsaibashisuji, Chuo-ku, Osaka City, Osaka Prefecture, Japan

Address: B1, Nagarekawa Eight Building, 8-20 Nagarekawacho, Naka-ku, Hiroshima City, Hiroshima Prefecture, Japan

Address: Nakazakuidaore Bld.5F-11, 1-7-21, Dotombori, Osaka Shi Chuo Ku, Osaka Fu,Japan

Address: 4-2-4, Minami6-jonishi, Sapporo Shi Chuo Ku, Hokkaido, Japan

RESTAURANTS

Our restaurants business vertical represents a strategic expansion of our lifestyle entertainment offerings, leveraging on our expertise in creating immersive experiences to combine high-quality dining, often with entertainment elements.

The concept and strategy behind our restaurants business focuses on developing and operating unique dining concepts that cater to diverse tastes and preferences. This involves seeking to create immersive dining experiences that integrate exceptional cuisine with entertainment options. We also operate upscale dining restaurants where we seek to showcase excellent cuisine and exceptional service, as well as casual dining outlets that offer high-quality, affordable dining options including collaborations with local chefs.

Furthermore, we strive to create sophisticated settings for our bars and lounges by providing premium beverages and light bites in a refined setting. Our restaurants business vertical benefit from synergies with other business verticals, including event curation and management, allowing us to develop immersive dining experiences.

Our consultancy and management services also support the operations of our restaurants and food and beverage (“F&B”) outlets, while our sub-leasing business provides opportunities to operate restaurants and F&B outlets within entertainment venues. By leveraging these synergies and focusing on quality, innovation, and customer experience, we believe that our restaurants’ business vertical is well-positioned for growth and success.

Restaurant Portfolio

We operate a diverse portfolio of restaurants, offering a range of cuisines and dining experiences to cater to various tastes and preferences.

Located in the heart of Osaka, at 1-8-11 Higashi-Shinsaibashi, Chuo-ku, Osaka-shi, Le Salon 2100 is a Western bistro and cigar bar that seeks to embody a blend of architectural sophistication and gastronomic excellence. Le Salon 2100’s building was designed by the renowned Japanese architect, Tadao Ando, who is famous for his minimalist and modernist designs. Ando’s design philosophy, which emphasizes the importance of natural light, space, and materials, is reflected in Le Salon 2100’s sleek and sophisticated architecture.

Revenue Model:

As described in detail in the Business section, our revenue model for our four principal operations as:

Event Curation

Our event curation and production services deliver unique experiences, generating revenue through (a) project-based fees for event conceptualization and execution; and (b) revenue from sponsors.

Club Management and Consultancy

Our generates revenue through its club management and consultancy services by charging a fixed or monthly retainer fee. Additionally, we earn a percentage-based commission on club revenue, reflecting its successful management and consultancy efforts.

Sub-Leasing

Our sub-leasing services generate revenue through strategic leasing agreements. Pursuant to these leasing agreements, a fixed monthly fee is payable by the customer to us.

Restaurants

Our restaurant vertical segment generate revenue primarily through food and beverage sales, catering and events and partnerships.

Market Opportunity: 

We believe that the lifestyle entertainment industry is poised for significant growth, driven by increasing demand for experiential events and nightlife experiences. Japan’s tourism industry is expected to grow at a CAGR of 3.8% from 210 billion in 2024 to 245 billion in 2028, with a growing middle class seeking unique experiences.¹ This trend presents a compelling opportunity for us to expand its domestic market presence.

Globally, the lifestyle entertainment market is projected to grow at a CAGR of 7% from 2.71 trillion in 2024 to 3.55 trillion in 2028,² with the Asia Pacific region leading the charge at 7.5% CAGR from 740 billion in 2024 to 1 trillion in 2028.³ The increasing popularity of experiential events and festivals worldwide, coupled with growing demand for Japanese culture and entertainment, positions TryHard for significant potential global market expansion.

The tourism industry of Japan will have a CAGR of 5% increase from 50 billion in 2023 to 70.2 billion in 2030. The event industry globally has a CAGR of 8.2% from 1.1 trillion in 2023 to 1.9 trillion in 2030; and a CAGR of 9.5% from 400 billion in 2023 to 750 billion in 2030 for Asia Pacific. And for the event industry in Japan, there’= is an increase in CAGR of 6.8% from 90 billion in 2023 to 140 billion in 2030. The night club industry in APAC will be having growth of CAGR of 9.1%, from 35 billion in 2023 to 60 billion in 2030. Southeast Asia is also expected to have an increase of 10.5% CAGR with 8 billion in 2023 and 16 billion in 2030. And as for Japan, there will also be a growth in CAGR of 5.2% from 12 billion in 2023 to 16 billion in 2030.

The tourism, event, and nightlife industries are expected to experience significant growth, driven by increasing demand for experiential events and unique experiences. The Asia-Pacific region, particularly Japan, is poised to drive this growth, presenting opportunities for businesses to expand and capitalize on these trends. With its existing service offerings, TryHard is well-positioned and in line with the market trends to take advantage of these opportunities and drive growth.⁴

TryHard’s existing expertise in event curation, nightclub management, and tourism-related services makes it an ideal candidate to capitalize on the growing demand for experiential events and nightlife experiences. By expanding its service offerings and entering new markets, TryHard can leverage its existing strengths to drive growth and establish itself as a leading lifestyle entertainment company in the Asia-Pacific region.

¹ Japan National Tourism Organization (JNTO) data and reports OECD Tourism Trends and Policies (Japan-specific)

² World Travel & Tourism Council (WTTC) - Global Economic Impact & Trends reports OECD Tourism Trends and Policies publications & United Nations World Tourism Organization (UNWTO) Tourism Highlights report

³ UNWTO Tourism Towards 2030: Asia and the Pacific, McKinsey & Company reports on Asian travel and tourism & Deloitte Global Powers of Luxury Goods reports

⁴ Additional reference Sources:

World Travel & Tourism Council (WTTC) “Global Economic Impact & Trends 2023”

Euromonitor International “Travel 2023”

PATA (Pacific Asia Travel Association) “Asia Pacific Visitor Forecasts 2023-2025”

McKinsey & Company “The future of Asia: Asian flows and networks are defining the next phase of globalization”

ASEAN (Association of Southeast Asian Nations) Tourism Strategic Plan 2016-2025

Statista “Tourism industry in Southeast Asia - statistics & facts”

Japan National Tourism Organization (JNTO) “Japan Tourism Statistics”

OECD “OECD Tourism Trends and Policies 2020”

Precedence Research “Events Industry Market Size, Share, Trends, Opportunity Analysis Report, 2023-2030”

Grand View Research “Events Industry Market Size, Share & Trends Analysis Report, 2023 - 2030”

MICE (Meetings, Incentives, Conferences, and Exhibitions) Industry Association of India “APAC Events Industry Outlook 2023-2030”

Frost & Sullivan “Asia-Pacific Events Industry Trends and Forecasts”

ASEAN (Association of Southeast Asian Nations) “ASEAN Meetings, Incentives, Conferences, and Exhibitions (MICE) Strategic Plan 2021-2025”

Colliers International “Southeast Asia Events Industry Report 2023”

Japan Convention Bureau “Japan MICE Industry Overview and Forecast 2023-2030

Nikkei Asia “Japan’s events industry rebounds, driven by pent-up demand”

Statista “Global nightclub industry revenue 2023-2030”

Allied Market Research “Nightclub Market by Type, Revenue Stream, and Business Model: Global Opportunity Analysis and Industry Forecast, 2023-2030”

ResearchAndMarkets.com “Asia-Pacific Nightclub Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023-2028)”

GlobalData “Asia-Pacific Nightclub Market Size, Trends and Forecasts 2023-2030”

Euromonitor International “Nightlife and Bars in Southeast Asia”

ASEAN Briefing “The Nightlife and Entertainment Industry in Southeast Asia”

Japan Entertainment Industry Association “Japan Nightclub Market Trends and Forecasts 2023-2030”

REAL PROPERTY

In February 2026, the Company sold its former head-office property in Japan, comprising land, a building and related leasehold improvements, to an independent third party for total consideration of JPY959,661 thousand. The carrying amount of the related assets was JPY627,115 thousand and the Company recognized a gain of JPY311,940 thousand before other disposal losses.

As of the date of this report, we have leased the following properties, all of which are located in Japan: 

Note:

BUSINESS STRATEGIES

Our growth strategy is powered by several key drivers that we believe position us for sustained success:

The increasing popularity of unique and immersive experiences is expected to drive demand for our events and nightlife services. As consumers prioritize memorable experiences over material possessions, TryHard’s expertise in curating exceptional events places us in a strong position for growth.

Japan’s growing middle class, with increasing disposable income for leisure activities, presents a significant opportunity for our entertainment and hospitality offerings. Our targeted marketing strategies and premium services are tailored to this demographic, aiming to enhance customer engagement and revenue.

We intend to collaborate with international brands, event organizers, and innovative startups to enhance our reputation, expand our network, and create new business opportunities. These partnerships will help us stay at the forefront of industry trends and solidify our market position.

Strategic expansion into new markets, both domestically and globally, will allow us to capitalize on emerging opportunities and diversify our revenue streams. By successfully adapting our business model to new regions, we can increase growth potential and establish a strong presence in the global entertainment industry.

We will enhance customer engagement and operations through user-friendly mobile apps for event ticketing and information, while utilizing data insights to optimize our operations and marketing efforts. Exploring the integration of cutting-edge technologies, such as Augmented Reality/Virtual Reality and AI, will enrich event experiences and broaden our audience.

Implementing eco-friendly practices will reduce operational costs and environmental impact. We aim to invest in renewable energy solutions and host events that promote social responsibility and brand loyalty.

By leveraging these key growth drivers and executing our comprehensive growth strategies, we believe we are well-positioned for significant market expansion, both in Japan and internationally. Our focus on experiential events, premium services, and strategic partnerships is expected to drive revenue growth and enhance our status as a premier lifestyle entertainment company.

COMPETITION

The nightclub and event production industry in Japan is highly competitive with a number of experienced providers in the same space as us. There are a diverse range of nightclubs and bars catering to different demographics, from high-end lounges to dance clubs and niche-themed bars. Major players must constantly innovate with unique concepts, celebrity DJs, and maintain exclusivity while still being accessible in order to stand out in large cities such as Tokyo and Osaka that are known in particular, to have an ever-evolving entertainment culture. Further, given the high amount of turnover, the barriers to entry are relatively low for competitors who are willing to take over empty spaces and quickly provide a new alternative to existing clubs and bar.

Challenges of Nightclub Operations and Event Production Companies in Japan

Japan’s nightlife and the event production industry face numerous challenges that can impact operations, profitability, and sustainability. Here are some key challenges:

Nightclub operators in Japan face increasing rent costs, which can strain their budgets and limit investment in other areas. This challenge is particularly significant in major cities like Tokyo and Osaka, where rent costs are already high.

Japanese consumers are known for their love of new and exciting experiences. As a result, nightclubs must continually reinvent themselves to stay relevant and attract customers. This can be a significant challenge, particularly for smaller nightclubs with limited resources.

Japan has strict regulations regarding noise levels, operating hours, and alcohol service. Nightclub operators must navigate these complex regulations to avoid fines, penalties, and reputational damage.

Japan’s entertainment landscape is highly competitive, with many options for consumers to choose from. Nightclubs compete with other entertainment options, such as karaoke venues, live music venues, and theme parks, as well as local bars and restaurants.

Attracting and retaining top talent is a significant challenge for nightclubs and event production companies in Japan. This includes DJs, performers, and other staff who are essential to delivering high-quality events and experiences.

Effective marketing and promotion are critical for nightclubs and event production companies in Japan. However, reaching and engaging with target audiences can be a significant challenge, particularly in a crowded and competitive market.

Managing logistics and operations is a significant challenge for nightclubs and event production companies in Japan. This includes coordinating with suppliers, managing inventory, and ensuring that events are delivered on time and to budget.

Ensuring the safety and security of customers and staff is a top priority for nightclubs and event production companies in Japan. This includes managing risk, implementing safety protocols, and responding to emergencies. In addition, since COVID-19, there is an increased emphasis on health and hygiene practices implemented at our venue.

Finally, nightclubs and event production companies in Japan face growing pressure to prioritize sustainability and eco-friendliness. This includes reducing waste, conserving energy, and promoting environmentally friendly practices throughout their operations.

SALES AND MARKETING

We employ a multi-channel approach to drive its sales and marketing efforts. Our strategy focuses on building a strong brand, raising awareness, and leveraging both online and offline marketing channels.

In terms of online marketing channels, we utilize Instagram, TikTok, and Meta to reach our target audience. These platforms enable the company to create engaging content, promote events, and build brand awareness. Additionally, we collaborate with social media influencers and content creators to amplify its brand message and attract new customers.

We also employ offline marketing channels to promote our brand and attract new customers. Word of mouth is a key driver of business for our Group, with customers encouraged to refer friends and family to our nightclubs and events. We also host and participate in various events, such as MUSIC CIRCUS, to promote our brand and attract new customers. Furthermore, we engage in strategic partnerships with other businesses, organizations, and artists to expand its reach and credibility.

Our marketing strategy is designed to build brand awareness, drive customer acquisition, and increase customer retention. To achieve these goals, we focus on delivering exceptional customer experiences at our nightclubs and events. By building a strong brand and fostering loyalty among our customers, we aim to maintain our position as a leading lifestyle entertainment company in Japan.

In terms of performance metrics, we measure the success of our sales and marketing efforts through customer flow, social media engagement, and event attendance. Our Group generates approximately 3 million customer visits across our nightclubs and events annually, and track engagement metrics such as followers, likes, and shares to gauge the effectiveness of its online marketing efforts. By monitoring these metrics, TryHard can refine its marketing strategy and make data-driven decisions to drive business growth.

INTELLECTUAL PROPERTY

Currently, our business and profitability are not materially dependent on any intellectual property such as patents, patent rights, licenses and processes or other intellectual property rights. Except as disclosed below, we have not paid or received royalties for any license or use of an intellectual property, nor do we use or own any other registered patents, trademarks or intellectual property which are material to our business.

Trademarks

As of the date of this report, we have registered the following trademarks in Japan.

As of the date of this report, we have registered the domain name https://tryhard.me/.

As of the date of this report, we were not involved in any proceedings with regard to, and we have no received notice of any claims of infringement of, any intellectual property rights that may be threatened or pending, in which we may be involved either as a claimant or respondent.

EMPLOYEES

We had 105 full-time employees as of the date of this report. The following table sets forth the numbers of our full-time employees, categorized by function, as of that date:

INSURANCE

We maintain public liability insurance policies in accordance with customary industry practice. We carry occupational accident, comprehensive property, business, construction compensation, comprehensive compensation, business interruption, fire and trust liability insurance for our employees in compliance with applicable regulations. We do not carry general business interruption or “key person” insurance. We will continue to review and assess our risk portfolio and make necessary and appropriate adjustments to our insurance practices to align with our needs and with industry practice in Japan.

LITIGATION AND OTHER LEGAL PROCEEDINGS

As of the date of this Annual Report, we are not party to any significant proceedings.

REGULATORY ENVIRONMENT

Our principal business activities are located in Japan and are subject to regulation by applicable laws, regulations and government agencies in Japan.

As of the date of this report we have obtained the following material licenses and permits for our business operations:

Company Laws

The formation, organization, operation and management of companies are governed by the Companies Act (Act No. 86 of July 26, 2005, as amended) and other related laws. Our Company is categorized as “Company with a Board of Company Auditors” provided by this Act.

According to our Japanese legal counsel, as of the date of this report, we comply with these laws and regulations.

Intellectual Property Protection Laws

There are various intellectual property laws in Japan, including the Patent Act (Act No. 121 of April 13, 1959, as amended), the Utility Model Act (Act No. 123 of April 13, 1959, as amended), the Design Act (Act No. 125 of April 13, 1959, as amended), the Trademark Act (Act No. 127 of April 13,1959, as amended), the Copyright Act (Act No. 48 of May 6, 1970). The Patent Act provides patent right and regulates protection and utilization of inventions. The Utility Model Act provides utility model right and regulates protection and utilization of devices. The Design Act provides design rights. The Trademark Act provides trademark rights. The Copyright Act provides provide for authors’ rights and neighboring rights. The aforementioned regulations apply to our intellectual property rights in Japan, and accordingly we are subject to complying with such regulations. According to our Japanese legal counsel, as of the date of this report, TryHard and MUSIC CIRCUS have registered 6 and 4 trademarks in Japan respectively.

Labor Laws

There are various labor-related laws in Japan, including the Labor Standards Act (Act No. 49 of April 7, 1947, as amended), the Industrial Safety and Health Act (Act No. 57 of June 8, 1972, as amended), and the Labor Contracts Act (Act No. 128 of December 5, 2007). The Labor Standards Act regulates, among others, minimum standards for working conditions such as working hours, leave period, and leave days. The Industrial Safety and Health Act requires, among others, the implementation of measures to secure employee safety and protect the health of workers in the workplace. The Labor Contracts Act regulates, among others, the change of terms of employment contracts and working rules, and dismissal and disciplinary action. A portion of our personnel are paid at rates related to the applicable minimum wage and further increases in the minimum wage or other changes in these laws could increase our labor costs. Our ability to respond to minimum wage increases by increasing service and product prices will depend on the responses of our competitors and patients. We may also be subject to lawsuits from our employees, Labor Standards Inspection Office, or others alleging violations of laws regarding workplace and employment matters, discrimination and similar matters. According to our Japanese legal counsel, as of the date of this report, we comply with these laws and regulations.

Regulations on Lease Agreements

Our lease agreements are generally subject to the Civil Code (Act No. 89 of April 27, 1896, as amended) and Act on Land and Building Leases (Act No. 90 of October 4, 1991, as amended). A failure to comply with the Act may harm our brand and directly result in a reduction of the Company’s revenue. According to our Japanese legal counsel, as of the date of this report, the terms and conditions of our lease agreements are consistent with these laws and are valid and enforceable as provided for in these agreements.

Regulations on Privacy Protection

The Act on the Protection of Personal Information (Act No. 57 of May 30, 2003, as amended) aims to protect an individual’s rights and interests and establishes obligations that a personal information handling business operator shall fulfill. According to our Japanese legal counsel, as of the date of this report, we comply with these laws and regulations. Additionally, the European Commission has adopted the adequacy decision on the basis of article 45 of Regulation (EU) 2016/679 (GDPR) on Japan on 23 January, 2019. Based on this decision and related mutual agreement, transfer of personal data between Japan and the EU is allowed without the adequate safeguards required by GDPR.

Regulations on Whistleblower Protection

The Whistleblower Protection Act No. 122 of June 18, 2004 (Act No. 122 of June 18, 2004, as amended) provides prohibition of disadvantageous treatment of whistleblowers on the grounds of whistleblowing and the measures that a business operator and administrative organ should take concerning whistleblowing to protect whistleblowers. A failure to comply with the Act may harm our brand and directly result in a reduction of the Company’s revenue. According to our Japanese legal counsel, as of the date of this report, we comply with these laws and regulations.

Taxation Regulations

The taxes levied in Japan on income generated by the activities of a corporation include corporate tax (national tax), local corporate tax (national tax), corporate inhabitant tax (local tax), enterprise tax (local tax), and special local corporate tax (a national tax). According to tax-related laws and regulations, including the Corporation Tax Act (Act No. 34 of March 31, 1965, as amended) and the Local Corporation Tax Act (Act No.11 of March 31,2014, as amended), the scope of income subject to the taxes is determined and the taxable income is calculated. Corporate inhabitant taxes are levied on income and a per capita basis using the corporation’s capital and the number of its employees as the tax base. Business transaction is levied consumption tax which is a type of value-added tax. According to our Japanese legal counsel, as of the date of this report, we comply with these laws and regulations.

Foreign Exchange Regulations

The Foreign Exchange and Foreign Trade Act (Act No. 228 of December 1, 1949, as amended) (the “FEFTA”) and related cabinet orders administerial ordinances, which we refer to collectively as the Foreign Exchange Regulations, govern certain aspects relating to the acquisition and holding of shares by “exchange non-residents” and by “foreign investors” (as these terms are defined below). In general, the Foreign Exchange Regulations currently in effect do not affect transactions between exchange non-residents to purchase or sell Ordinary Shares outside Japan using currencies other than Japanese yen.

Exchange residents are defined in the Foreign Exchange Regulations as:

Exchange non-residents are defined in the Foreign Exchange Regulations as:

Generally, branches and other offices of non-resident corporations located within Japan are regarded as exchange residents. Conversely, branches and other offices of Japanese corporations located outside Japan are regarded as exchange non-residents.

Foreign investors are defined in the Foreign Exchange Regulations as:

Acquisition of Shares

Acquisition by a foreign investor of shares of a Japanese corporation from a non-foreign investor requires pre or post facto reporting by the foreign investor through an exchange resident to the Minister of Finance of Japan through the Bank of Japan. No such reporting requirement is imposed, however, if:

Our counsel to Japanese law confirmed that the transfer of Tryhard to the Company was done in accordance to Japanese Law.

Dividends and Proceeds of Sale

Under the Foreign Exchange Regulations, dividends paid on, and the proceeds from sales in Japan of, shares held by exchange non-residents of Japan may generally be converted into any foreign currency and repatriated abroad.

Under the Foreign Exchange and Foreign Trade Act and related regulations, a Non-Resident of Japan who acquires shares from a resident of Japan is generally not subject to any prior filing requirement, although the Foreign Exchange and Foreign Trade Act and related regulations require such Non-Resident of Japan to obtain prior approval for any such acquisition from the Minister of Finance of Japan in certain limited circumstances. While such prior approval is not required in general, in each case where a resident of Japan receives a single payment of more than JPY30,000,000 from a Non-Resident of Japan for a transfer of shares in a Japanese company, such resident of Japan is required to report each receipt of payment to the Minister of Finance of Japan.

Laws and Regulations Specific to Our Business

Our current and planned business activities are subject to a variety of laws and regulations. Since many of these laws regulations include penalty provisions, if we violate these provisions, we may receive guidance or punishment from the regulatory authorities.

In order to engage in a fee-charging employment placement business (i.e., receiving offers for posting job offerings and offers for registering as a job seeker and extending services to establish employment relationships between job offerors and job seekers with receiving commissions or other compensation), a license must be obtained from the Minister of Health, Labor and Welfare under the Employment Security Act (Act No. 141 of November 30, 1947, as amended). We have received such license as of August 1, 2017, and received a current certificate (valid from August 1, 2025 to July 31, 2030) as of February 8, 2022.

When carrying out a worker dispatching business (i.e., having a worker employed by one person so as to be engaged in work for another person under the instructions of the latter, while maintaining the worker’s employment relationship with the former), it is necessary to obtain a license from the Minister of Health, Labour and Welfare under the Act on Securing the Proper Operation of Worker Dispatching Businesses and Protecting Dispatched Workers (Act No. 88 of July 5, 1985 as amended). We have received such license as of August 1, 2017, and received a current certificate (valid from August 1, 2025 to July 31, 2030) as of April 7, 2021. 

A person who operates a construction business, except for the operator who only undertake simple construction work (i.e., work for which the contract price is less than JPY15 million or wooden housing work with a total floor space of less than 150m² (for a complete building construction) or work for which the contract price is less than JPY5 million (for construction work other than a complete building construction)), must obtain a license from the Minister of Land, Infrastructure, Transport and Tourism or the prefectural governor under the Construction Business Act (Act No. 100 of May 24, 1949, as amended). We are not engaged in any construction business that requires a construction business license.

The design and construction of events and stores, as well as the sale and installation of audio, lighting, and visual equipment, must meet building and disaster prevention standards for the venue’s capacity, fire prevention equipment, evacuation plan, etc. in accordance with the Building Standards Act and the Fire Service Act (Act No. 186 of July 24, 1948, as amended). In particular, when selling audio, lighting, and visual equipment, it is necessary to comply with safety standards based on the Electrical Appliance and Material Safety Act (Act No. 234 of November 16, 1961, as amended) and other product safety laws and regulations. In addition, when installing audio, lighting, and visual equipment, we may be required to be qualified as an electrician under the Electrician Act (Act No. 139, August 1, 1960, as amended). According to our Japanese legal counsel, as of the date of this report, we comply with these laws and regulations.

To engage in security services, a company must be certified by the Prefectural Public Safety Commission in accordance with the Security Services Act (Act No. 117 of July 5, 1972, as amended). In addition, security guards are required to have certain qualifications and education. According to our Japanese legal counsel, as of the date of this report, we comply with these laws and regulations.

When arranging event companions, dancers, staff, etc. for events, regulations under the Employment Security Act and the Act on Securing the Proper Operation of Worker Dispatching Businesses and Protecting Dispatched Workers are relevant. In addition, the Act against Unjustifiable Premiums and Misleading Representations (Act No. 134 of May 15, 1962, as amended) requires that advertisements for sales promotions and prizes at events do not constitute unfair labeling or excessive premiums. With regard to influencer marketing, stealth marketing is regulated under the Act against Unjustifiable Premiums and Misleading Representations (Act No. 134 of May 15, 1962, as amended). According to our Japanese legal counsel, as of the date of this report, we comply with these laws and regulations.

The use of copyrighted works such as music, images and designs in events requires appropriate rights processing based on the Copyright Act. Copyright and other intellectual property laws are relevant to video production and advertising design.

Those who intend to operate a “specified amusement-providing and food and drink-serving business” (i.e., a business which runs nightclubs or other facilities and serves the customers food and drink while entertaining them (limited to businesses which provide alcoholic beverage to customers), excluding businesses which only operate in the period starting after 6 a.m. and ending before 0 a.m. of the following day (excluding those falling under amusement business) (Article 2.11 of the Act on Control and Improvement of Amusement Business (Act No. 122 of July 10, 1948, as amended))) must obtain the following two licenses.

All of the clubs produced by us have obtained licenses for restaurant business and specified amusement-providing and food and drink-serving business.

In the design and operation of stores, building and disaster prevention standards must be met in accordance with the Building Standards Act (Act No. 201 of May 24, 1950, as amended) and the Fire Service Act.

When subleasing, the lessor’s consent is required (Article 612.1 of the Civil Code (Act No. 89 of April 27, 1896, as amended)). In addition, the Act on Land and Building Leases (Act No. 90 of October 4, 1991) applies to the sub-lease business.

Restaurants, etc. are required to obtain an approval from the prefectural governor in accordance with the Food Sanitation Act (Act No. 233 of December 24, 1947, as amended). The procedure for applying for the approval is as follows.

Prior to commencing construction, a restaurant operator must consult with the food hygiene department of the public health center that has jurisdiction over the business (the “Authority”) and submit the design plans of the facility.

The restaurant operator must submit an application form etc., to the Authority approximately 10 days prior to the scheduled completion date of the facility construction. The application form must include that: (a) the structure and equipment of the facility conform to the Food Sanitation Act etc., (b) a food sanitation manager has been appointed, and (c) there have been no violations of the Food Sanitation Act in the past two years.

At that time, the restaurant operator is required to discuss with the Authority how to keep in touch about the progress of the construction and the inspection date etc.

The inspection will be conducted in the presence of the restaurant operator.

Upon confirmation of compliance with the facility standards, an approval is issued.

ITEM 4A. UNRESOLVED STAFF COMMENTS

Not Applicable

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

A. Operating Results.

Business Overview

We are an entertainment company that operates in Japan, offering a diverse range of services across the entertainment and hospitality sectors. We have established four key revenue streams: Consultancy and management, Event curation, Sub-Leasing, and Restaurants, positioning ourselves as a comprehensive service provider in the nightlife and event industries.

In our Consultancy and management segment, we deliver a wide array of management and operational services to clubs. These services encompass everything from club planning and day-to-day operations to accounting support, event management, entertainer bookings, and organizing periodic events to ensure consistent audience engagement. The Company also provides ongoing brand exposure in club venues, to generate sponsorship revenue from the customers. This ongoing involvement allows us to maintain a strong presence in Japan’s entertainment scene while generating stable, recurring revenue from club partnerships.

Through our Event curation segment, we generate revenue in two distinct ways. First, we organize and produce our own events. This involves internal teams developing creative concepts, followed by a detailed financial projection to estimate expected revenue before the event is executed. Second, we serve as a subcontractor for external clients. In this capacity, we provide a full suite of services, including event planning, construction, entertainment booking, event operation, and ticket sales. For subcontracted events, revenue is derived from a combination of fixed fees and a revenue-sharing model with the client.

Through our Sub-Leasing segment, we act as an intermediary between landlords and clubs. We lease venues directly from property owners and subsequently sub-lease these spaces to clubs. This provides an additional revenue stream for us, while enabling clubs to access prime locations without negotiating directly with landlords.

Lastly, under the Restaurants segment, we operate several restaurants, further diversifying our portfolio within the hospitality industry. These restaurants complement our core entertainment offerings, creating additional synergies between our event and club activities.

Our total revenues decreased by JPY371.8 million, or 10.5%, from JPY3,538.9 million (US$24.5 million) for the year ended June 30, 2025 to JPY3,167.1 million (US$19.5 million) for the year ended June 30, 2026. Our gross profit decreased from JPY700.5 million to JPY306.6 million, and our gross margin decreased from 19.8% to 9.7%. Our operating result changed from a profit of JPY57.0 million to a loss of JPY263.9 million, while net income increased from JPY15.1 million to JPY17.8 million, principally reflecting gains on the disposal of an associate interest and property. Gross profit decreased primarily due to lower profit generated from our consultancy and management services, resulting from weaker operating performance of certain clubs and the termination of cooperation arrangements with two clubs. Management remains focused on portfolio optimization and expects profitability to improve over the long-term.

Key Factors Affecting Our Results of Operation

Consultancy and Management Risk

Event curation Risk

Sub-Leasing Risk

Restaurants Risk

Depending risk on Key Personnel and Entertainers

Macroeconomic and Market Risk

Grow Strategies

Expand Consultancy and management through Strategic Collaborations with Advertising Companies

Increase Self-Produced Events to Maximize Revenue

Combined Growth Potential

These two growth strategies, expanding consultancy and management and scaling self-produced events—complement each other and create synergies. More self-produced events not only increase revenue but also enhance our brand visibility, which can be leveraged when negotiating new consultancy and management contracts. Meanwhile, an increased number of clubs provides additional venues for hosting these self-produced events, creating a virtuous cycle of growth.

Expanding partnerships with advertising agencies can amplify both strategies, ensuring that our events and club services reach a larger and more wide audience base, thereby maximizing the potential for long-term growth and market leadership in Japan’s entertainment sector.

Forward-Looking Statements

We plan to expand our consultancy and management segment by collaborating with leading advertising companies, which will allow us to reach new markets and secure long-term partnerships with club owners. This strategic collaboration is expected to accelerate the growth of our consultancy and management division, leading to a broader footprint in the nightlife and entertainment industry. Additionally, we anticipate significant growth in the coming years through the expansion of our self-produced events, which are expected to generate higher revenue and enhance brand recognition. By leveraging our event curation expertise and diversifying our event offerings, we aim to increase both attendance and profitability in this segment.

As we continue to explore opportunities to enhance our sub-leasing segment and restaurants segment, we remain committed to optimizing our revenue streams and driving operational efficiencies. This includes exploring potential geographic expansion, investing in technology to enhance customer experiences, and improving internal processes to support sustainable growth.

While we are optimistic about our future prospects, we acknowledge that our success is contingent on several factors, including market demand for entertainment services, regulatory changes, competition, and broader economic conditions. We will continue to monitor these risks closely and adjust our strategies as needed to maintain strong financial performance.

Management remains focused on delivering long-term value to our stakeholders and is confident in our ability to adapt to evolving market conditions while capitalizing on growth opportunities.

Key Component of Results of Operations

Revenues

Our revenues are derived from providing consultancy and management, event curation, sub-leasing services and restaurants. The following table sets forth the components of our revenue in amounts and percentages of the total revenue for the periods presented:

Consultancy and management

Revenues from consultancy and management focus on the operation and management of entertainment venues and nightclubs. We provide a whole comprehensive range of services such as venue management, artist production and management, security, food and beverage, ticketing, accounting, visual designs, VIP packages, photography, logo design, marketing etc. Consultancy and management revenue consists of base management fees and incentive management fees. Base management fees are fixed-monthly fee agreed with the customer. Incentive management fees are variable consideration equal to 1% to 5% of each night club’s monthly gross revenues. Consultancy and management revenue is recognized over time as services are provided to the customer.

We generate sponsorship revenue by providing ongoing brand exposure in club venues, by displaying the banners with logos in clubs, signage on client desks. The sponsorship revenue is recognized over time as services of brand exposure are provided.

We generate revenue by creating unique entertainment formats, including hosting themed nights and seasonal events with a mix of live artists, DJs, dancers and guest performers in the club. The revenue is recognized at a point in time when the designated services have been completed.

We also generate commission revenue from sales promotion activities for brand owners and distributors. Such revenue is recognised at a point in time when the designated sales promotion services have been completed.

Event curation

Revenue from entertainment event management services includes revenue generated from managing concerts, tour, and outdoor events. We provide a range of services to the customers, including planning, designing, managing and producing all aspects of an event.

Sub-leasing

Revenue from sub-leasing includes income from renting out real estate and club to third parties.

Restaurants

Revenue from restaurant operation generates revenue from the operation of restaurants which provide food and beverage to customers.

Cost of Revenues

Cost of revenues represent costs directly related to revenue-generating activities, including event setup and performance fee, salaries and other compensation-related expenses for operating personnel, rental expenses for equipment used for events, depreciation expenses of right-of-use assets, property and equipment for operations, foods, beverage and supplies and other costs directly attributable to the business.

Operating expenses

The following table sets forth the component of our operating expenses by amounts and percentages of total operating expenses for the periods presented.

Results of Operations

The following table sets forth a summary of our consolidated results of operations for the periods indicated. This information should be read together with our consolidated financial statements and related notes included elsewhere in this annual report. The operating results in any period are not necessarily indicative of the results that may be expected for any future period.

Segment Results of Operation

Our business is divided into four main segments: Consultancy and management, Event curation, Sub-leasing, and Restaurants. Each segment contributed differently to our overall financial performance. The following table sets forth the segment results of operation for the periods indicated.

Year ended June 30, 2025 compared to year ended June 30, 2026

Revenues

Revenue decreased from JPY3,538.9 million for the year ended June 30, 2025 to JPY3,167.1 million (US$19.5 million) for the year ended June 30, 2026, representing a decrease of 10.5%., which was primarily due to the decreased revenue in our consultancy and management segment.

Revenue in the consultancy and management segment decreased from JPY2,480.3 million for the year ended June 30, 2025 to JPY2,096.8 million for the year ended June 30, 2026, representing a decrease of 15.5%. The decrease was primarily attributable to declining operating results at clubs during the year. While three new clubs were opened, revenue contributions from these new venues were not sufficient to make up for revenue lost from the termination of cooperation with two clubs and reduced management fees from existing clubs. In addition, sponsorship and advertising income also declined within the segment. 

Event curation revenue remained relatively stable at approximately JPY898.8 million and JPY894.6 million for the years ended June 30, 2025 and 2026, respectively. Looking ahead, we plan to drive revenue growth through multiple initiatives, including collaborations with government entities and tourism associations, as well as co-hosting events with strategic partners. By leveraging both our production and operational expertise and the branding strength of strategic partners, we aim to expand our event portfolio, diversify revenue sources, and enhance profitability over the medium term.

The sub-leasing segment increased from JPY67.3 million for the year ended June 30, 2025 to JPY102.6 million for the year ended June 30, 2026, representing an increase of 52.3%. The growing revenue was driven by higher rental rates together with stable occupancy.

Revenue in the restaurants segment decreased from JPY92.5 million for the year ended June 30, 2025 to JPY73.1 million for the year ended June 30, 2026, representing a decrease of 21.0%，mainly due to the closure of a restaurant in December 2025.

Cost of revenue  

Cost of revenue increased by JPY22.0 million, or 0.8%, from JPY2,838.4 million for the year ended June 30, 2025 to JPY2,860.5 million (US$17.6 million) for the year ended June 30, 2026, despite a 10.5% decrease in revenue. The increase was primarily attributable to higher depreciation expenses of JPY36.7 million, event production expenses of JPY6.9 million and utilities expenses of JPY6.9 million, partially offset by decreases in equipment expenses of JPY12.1 million, installation and construction expenses of JPY6.3 million and service fee expenses of JPY5.5 million. Performance fees and payroll and personnel expenses remained relatively stable during the year, notwithstanding the decline in revenue.

Cost of revenue in the consultancy and management segment increased slightly from JPY1,829.3 million for the year ended June 30, 2025 to JPY1,833.3 million for the year ended June 30, 2026. Although segment revenue decreased significantly, major cost components, particularly performance fees and payroll and personnel expenses, remained largely unchanged. The increase in event production expenses and depreciation expenses was substantially offset by lower equipment and installation and construction expenses. As a result, the segment’s cost base did not decrease proportionately with its revenue.

Cost of revenue in the event curation segment increased by JPY21.4 million, from JPY845.0 million for the year ended June 30, 2025 to JPY866.5 million for the year ended June 30, 2026. The increase was primarily attributable to higher depreciation expenses, which increased by approximately JPY30.3 million, mainly reflecting an increase in depreciation of right-of-use assets allocated to event-related operations. This increase was partially offset by lower expenses for event security, consumables, food and beverages and other operating costs. Other major direct costs, including performance fees, event production expenses and payroll and personnel expenses, remained relatively stable.

Cost of revenue in the sub-leasing segment increased by JPY13.5 million, from JPY43.7 million for the year ended June 30, 2025 to JPY57.2 million for the year ended June 30, 2026. The increase was primarily attributable to higher depreciation expenses of approximately JPY9.3 million, and higher utilities expenses of approximately JPY8.0 million. These increases were partially offset by a decrease in service fee expenses of approximately JPY4.9 million. 

Cost of revenue in the restaurants segment decreased by JPY16.9 million, from JPY120.4 million for the year ended June 30, 2025 to JPY103.5 million for the year ended June 30, 2026. The decrease was mainly associated with the closure of a restaurant and the resulting reduction in operating activities. In particular, depreciation expenses decreased by approximately JPY7.5 million, together with reductions in food and beverage costs, equipment expenses and utilities expenses. However, certain payroll and other operating costs did not decline proportionately with the reduction in revenue. 

Gross profit  

Gross profit decreased by JPY393.8 million, or 56.2%, from JPY700.5 million for the year ended June 30, 2025 to JPY306.6 million (US$1.9 million) for the year ended June 30, 2026. Gross profit margin decreased from 19.8% to 9.7%. The decreasing was primarily attributable to the decline in gross profit from the consultancy and management segment, together with lower gross profit from event curation, partially offset by improved gross profit from the sub-leasing segment.

Gross profit in the consultancy and management segment decreased by JPY387.5 million, from JPY651.0 million for the year ended June 30, 2025 to JPY263.4 million for the year ended June 30, 2026, while gross profit margin decreased from 26.2% to 12.6%. The decline was primarily attributable to a JPY383.5 million reduction in segment revenue, while cost of revenue remained relatively stable. In particular, performance fees and personnel-related expenses did not decrease proportionately with revenue, resulting in margin compression.

Gross profit in the event curation segment decreased by JPY25.5 million, from JPY53.8 million for the year ended June 30, 2025 to JPY28.2 million for the year ended June 30, 2026, while gross profit margin declined from 6.0% to 3.2%. With segment revenue remaining relatively stable, the decline in gross profit was mainly driven by higher depreciation expenses, partially offset by decreases in other direct operating costs.

Gross profit in the sub-leasing segment increased by JPY21.7 million, from JPY23.7 million for the year ended June 30, 2025 to JPY45.4 million for the year ended June 30, 2026, while gross profit margin improved from 35.1% to 44.2%. The improvement was primarily attributable to a JPY35.2 million increase in segment revenue, which exceeded the JPY13.5 million increase in cost of revenue, notwithstanding higher depreciation and utilities expenses.

Gross loss in the restaurants segment increased slightly from JPY27.9 million for the year ended June 30, 2025 to JPY30.4 million for the year ended June 30, 2026. Gross profit margin decreased from negative 30.2% to negative 41.6%, primarily because the JPY19.4 million decrease in segment revenue exceeded the corresponding JPY16.9 million reduction in cost of revenue. Although certain expenses declined following the closure of a restaurant, remaining operating costs continued to weigh on the segment’s profitability.

Operating expenses

Our operating expenses increased by JPY211.7 million, or 27.3%, from JPY774.5 million for the year ended June 30, 2025 to JPY986.2 million (US$6.1 million) for the year ended June 30, 2026. The increase was primarily attributable to higher general and administrative expenses, partially offset by a reduction in selling and marketing expenses.

Our selling and marketing expenses decreased by JPY34.0 million, or 12.5%, from JPY272.3 million for the year ended June 30, 2025 to JPY238.2 million (US$1.5 million) for the year ended June 30, 2026. The decrease was primarily attributable to a JPY55.0 million reduction in advertising and marketing expenses, partially offset by increases of JPY15.3 million in staff-related costs and JPY6.0 million in market expansion expenses.

Our general and administrative expenses increased by JPY245.6 million, or 48.9%, from JPY502.3 million for the year ended June 30, 2025 to JPY747.9 million (US$4.6 million) for the year ended June 30, 2026. The increase was primarily attributable to (i) a JPY123.2 million increase in expected credit loss expenses, from JPY26.7 million in FY2025 to JPY149.9 million in FY2026; (ii) a JPY44.6 million increase in staff-related costs; (iii) a JPY36.8 million increase in miscellaneous administrative expenses; (iv) a JPY23.7 million increase in insurance and service fees; (v) a JPY11.4 million increase in legal and professional fees; (vi) a JPY8.4 million increase in travel and transportation expenses；and (vii) a JPY1.2 million increase in directors’ fees. These increases were partially offset by a decrease JPY6.1 million in office expenses. Depreciation expenses and maintenance and supplies expenses remained relatively stable during the year.

Other income and expenses

Other income increased from JPY182.4 million for the year ended June 30, 2025 to JPY432.3million (US$2.7 million) for the year ended June 30, 2026, which was primarily attributable to a gain of JPY267.4 million on disposal of property and equipment recognised during the year. The increase was partially offset by (i) a decrease of JPY15.7 million in gain on derecognition of right-of-use assets, as there were fewer lease modification and sublease reclassification transactions compared with the prior year; and (ii) a decrease of JPY10.2 million in gain on lease modification or termination, with no such lease termination transactions occurring in the year ended June 30, 2026.

Other expenses decreased from JPY51.3 million for the year ended June 30, 2025 to JPY16.7 million (US$0.1 million) for the year ended June 30, 2026. The decrease was mainly driven by no loss on disposal of equipment and furniture recognised in the current year, compared with a loss of JPY34.0 million for the year ended June 30, 2025, together with no share of profit to project investors for the current year, compared with a charge of JPY17.1 million in the prior year. This was partially offset by new charges including lease termination penalty of JPY12.4 million and loss on lease modification or termination of JPY1.5 million.

Gain on disposal of investments in an associate

SBI Music Circus Co. (formerly known as Music Circus Co.) was incorporated on August 8, 2022 by the Company under the law of Japan. On April 11, 2024, the Company transferred 60% shares of SBI Music Circus Co. to a third party at a consideration of JPY100 million. After the disposal, SBI Music Circus Co. is recorded as investments in an associate. On September 10, 2025, the Company entered into an agreement to transfer 200 shares of SBI Music Circus Co. to an independent third party at a consideration of JPY400 million. A gain on disposal of JPY385.5 million was recorded in the consolidated statements of profit or loss and comprehensive income for the year ended June 30, 2026.

Fair value change on financial assets at fair value through profit or loss

Fair value losses of JPY39.2 million recognised in profit or loss during the year ended June 30, 2026 primarily related to the Company’s two club business investments classified as financial assets at FVTPL. The Company made contributions of JPY40 million to Investment A and JPY100 million to Investment B in November 2025 and March 2026, respectively. Fair value was measured using a discounted cash flow model with significant unobservable inputs including forecasted revenue growth rates, projected operating cash flows, discount rates and expected holding-period assumptions.

Financial costs

Finance costs decreased from JPY22.0 million for the year ended June 30, 2025 to JPY18.5 million (US$0.1 million) for the year ended June 30, 2026.The decrease was primarily attributable to a decrease of JPY3.7 million in interest expenses on bank and other borrowings; partially offset by a slight increase of JPY0.2 million in interest expenses on lease liabilities.

Income tax expenses

Income tax expenses increased from JPY34.1 million for the year ended June 30, 2025 to JPY66.5 million (US$0.4 million) for the year ended June 30, 2026. This increase was primarily attributable to a higher pre-tax profit for the year ended June 30, 2026.

Net income

As a result of the foregoing, we incurred net income of JPY17.8 million (US$0.1 million) for the year ended June 30, 2026, compared to net income of JPY15.1 million for the year ended June 30, 2025.

Year ended June 30, 2024 compared to year ended June 30, 2025

Revenues

Revenue increased from JPY3,461.2 million for the year ended June 30, 2024 to JPY3,538.9 million (US$24.5 million) for the year ended June 30, 2025, representing an increase of 2.2%, which was primarily due to the increased revenue in our consultancy and management segment.

Revenue in consultancy and management segment increased from JPY2,170.8 million for the year ended June 30, 2024 to JPY2,480.3 million for the year ended June 30, 2025, reflecting an increase of 14.3%. The increase was primarily attributable to the opening of three new clubs during the year, which contributed approximately JPY176.2 million in our revenue. In addition, enhanced marketing efforts effectively attracted a larger customer base and stimulated higher customer spending at our existing clubs, further supporting the segment’s revenue growth.

Event curation revenue remained relatively stable at approximately JPY894.6 million and JPY898.8 million for the years ended June 30, 2024 and 2025, respectively. Looking ahead, we plan to drive revenue growth through multiple initiatives, including collaborations with government entities and tourism associations, as well as co-hosting events with strategic partners. By leveraging both our production and operational expertise and the branding strength of strategic partners, we aim to expand our event portfolio, diversify revenue sources, and enhance profitability over the medium term.

The sub-leasing segment, which involves the leasing of real estate properties, experienced a significant decline in performance for the year ended June 30, 2025. Revenue decreased by JPY215.8 million, or 76.2%, from JPY283.1 million for the year ended June 30, 2024 to JPY67.3 million for the year ended June 30, 2025. The decrease was primarily attributable to a modification to the head lease term for one of our sub-leasing arrangements. As a result, the arrangement was reclassified as a finance sublease, leading to a substantial reduction in revenue recognized under this segment.

Revenue in restaurants segment, which served as a supplement to other types of revenues, decreased by JPY20.2 million, or 17.9%, from JPY112.7 million for the year ended June 30, 2024 to JPY92.5 million for the year ended June 30, 2025, which was mainly due to the closing of a restaurant.

Cost of revenue

Cost of revenue increased from JPY2,680.7 million for the year ended June 30, 2024 to JPY2,838.4 million (US$19.7 million) for the year ended June 30, 2025, representing an increase of 5.9%, which was generally in line with the revenue increase.

Cost of revenue for consultancy and management segment increase from JPY1,571.9 million for the year ended June 30, 2024 to JPY1,829.3 million for the year ended June 30, 2025, primarily due to higher staff costs, event setup and performance fees, as well as increased expenses for club-based events to support the opening of new clubs and enhance customer experiences.

Cost of revenue in event curation segment increased from JPY800.9 million for the year ended June 30, 2024 to JPY845.0 million for the year ended June 30, 2025, primarily due to higher event setup and performance fees, as well as a rise in depreciation expense of right-of-use assets arising from the use of several leased venues to host events during the period.

Cost of revenue in sub-leasing segment decreased from JPY129.6 million for the year ended June 30, 2024 to JPY43.7 million for the year ended June 30, 2025. The decrease was mainly due to a reduction in depreciation expense of right-of-use asset resulting from the modification of one of our sub-leasing arrangements into a finance sublease.

Cost of revenue in restaurants segment also decreased from JPY178.3 million for the year ended June 30, 2024 to JPY120.4 million for the year ended June 30, 2025, which was mainly due to the closing of a restaurant.

Gross profit

Gross profit decreased from JPY780.6 million for the year ended June 30, 2024 to JPY700.5 million (US$4.9 million) for the year ended June 30, 2025, reflecting a 10.3% decrease. Our gross margin was 22.6% and 19.8% for the years ended June 30, 2024 and 2025, respectively. The decreasing was primarily attributable to the decline in gross profit from the sub-leasing and event curation segments.

Gross margin for consultancy and management segment was 27.6% and 26.2% for the years ended June 30, 2024 and 2025, respectively, which remained relatively stable. The segment maintained our profitability through effective cost management and by offering premium services that commanded higher prices.

Gross margin for event curation segment was 10.5% and 6.0% for the year ended June 30, 2024 and 2025, respectively. The decrease was primarily due to losses on several events undertaken to expand market presence and strengthen brand recognition, positioning us for future growth. Over time, we believe we have established ourselves as a premier event curator, delivering exceptional experiences that captivate audiences and foster memorable connections.

Gross margin for sub-leasing segment decreased from 54.2% for the year ended June 30, 2024 to 35.1% for the year ended June 30, 2025. The reduction in the gross profit margin was mainly due to liquidated damages from an early lease termination, as well as the reclassification of a sub-leasing arrangement as a finance lease, which reduced revenue more than costs.

The restaurants segment, which serves as a supplement to other types of revenues, continued to operate at a negative gross margin. The negative margins were 58.2% for the year ended June 30, 2024, and improved to 30.2% for the year ended June 30, 2025. We are proactively taking steps to optimize restaurant operations. Our focus lies on implementing strategies to reduce the share of fixed costs in the total cost structure, thereby boosting the segment’s profitability. This strategic approach has effectively led to a 28.0% reduction in the negative margin.

Operating expenses

Our operating expenses increased by 22.5% from JPY632.3 million for the year ended June 30, 2024 to JPY774.5 million (US$5.4 million) for the year ended June 30, 2025.

Selling and marketing expenses Our selling and marketing expenses increased by 19.4%, from JPY228.1 million for the year ended June 30, 2024 to JPY272.3 million (US$1.9 million) for the year ended June 30, 2025. This increase was primarily driven by the higher advertising and marketing expenses, as well as increased staff-related costs, to support our business expansion.

General and administrative expenses Our general and administrative expenses increased by JPY98.1 million, or 24.3% from JPY404.2 million for the year ended June 30, 2024 to JPY502.3 million (US$3.5 million) for the year ended June 30, 2025, which was primarily attributable to (i) the allowance of credit losses of JPY26.7 million the year ended June 30, 2025, compared to the reversal of expected credit losses of JPY0.9 million the year ended June 30, 2024, primarily due to higher accounts receivable resulting from revenue growth during the year; (ii) an increase of JPY 29.6 million in legal and professional fees, primarily attributable to audit expenses associated with our initial public offering, which were expensed as incurred; (iii) an increase of JPY29.2 million and JPY12.7 million in staff-related expenses and service fees as a result of business expansion; and (iv) an increase of JPY11.4 million in director fees, which was mainly due to higher remuneration levels for directors to remain competitive in retaining experienced management personnel.

Other income and expenses

Other income increased by JPY166.0 million, from JPY16.4 million for the year ended June 30, 2024 to JPY182.4 million (US$1.3 million) for the year ended June 30, 2025, which was primarily attributable to (i) an increase of JPY162.2 million in gain on derecognition of right-of-use assets mainly following the reclassification of a sub-leasing arrangement as a finance lease due to lease modification; (ii) an increase of JPY10.1 million in gain on lease termination as a result of the termination of several leases; and partially offset by (i) a decrease of JPY1.3 million in government subsidies as the subsidy received in 2023 was a one-off grant.

Other expenses increased by JPY46.9 million, from JPY4.4 million for the year ended June 30, 2024 to JPY51.3 million (US$0.4 million) for the year ended June 30, 2025, which was primarily attributable to an increase of JPY32.8 million in loss on disposal of equipment and furniture following the closing of a restaurant.

Financial costs

Financial costs increased from JPY21.6 million for the year ended June 30, 2024 to JPY22.0 million (US$0.2 million) for the year ended June 30, 2025. The increase was primarily attributable to an increase of JPY4.4 million in interest expenses on bank and other borrowings, mainly driven by a higher interest rate on borrowings from a non-financial institution; partially offset by a decrease of JPY3.9 million in interest expenses on lease liabilities following the reduction of the term of one lease from 14 years to 3 years.

Income tax expenses

Income tax expenses decreased by JPY60.1 million, from JPY94.2 million for the year ended June 30, 2024 to JPY34.1 million (US$0.2 million) for the year ended June 30, 2025. This decrease was primarily attributable to a lower pre-tax profit for the year ended June 30, 2025.

Net Income

As a result of the foregoing, we incurred net income of JPY15.1 million (US$0.1 million) for the year ended June 30, 2025, compared to net income of JPY137.4 million for the year ended June 30, 2024.

B. Liquidity and Capital Resources.

The primary source of liquidity historically has been cash generated from our business operations, equity contributions from our shareholders and borrowings, which have historically been sufficient to meet our working capital and capital expenditure requirements. As of June 30, 2025 and 2026, our cash and cash equivalents were JPY13.3 million and JPY119.7 million (US$0.7 million), respectively, and our term deposits were JPY1.8 million and JPY140.3 million (US$0.9 million), respectively.

We believe that our existing cash and cash equivalents, anticipated cash flow from operations and the net proceeds from our completed initial public offering will be sufficient to meet our anticipated cash needs for at least the next 12 months from the date of this annual report. The net proceeds amount is US$2.8 million. The exact amount of proceeds used for operations and expansion will depend on cash generated from operations and strategic decisions.

Cash flows  

The following table provides a summary of our cash flows for the years ended June 30, 2024, 2025 and 2026.

Operating Activities

Net cash used in operating activities was JPY661.5 million (US$4.1 million) for the year ended June 30, 2026, which primarily reflected our profit before income tax expenses of JPY84.3 million as mainly adjusted by (i) certain non-cash items, primarily comprising (a) depreciation expense of property and equipment of JPY67.0 million, (b) depreciation expense of right-of-use assets of JPY196.8 million, (c) gain on derecognition of right-of-use assets of JPY154.7 million, (d) gain on disposal of property, plant and equipment of JPY267.4 million, (e) gain on disposal of investments in an associate of JPY385.5 million, (f) loss on lease modification or termination of JPY1.5 million, (g) share of income of investments in an associate of JPY20.1 million, (h) fair value change on financial assets at fair value through profit or loss of JPY39.2 million, (i) finance costs of JPY18.5 million, and (j) allowance for expected credit losses of JPY149.9 million; and (ii) changes in working capital, primarily comprising (a) an increase in accounts receivable of JPY252.3 million, (b) an increase in inventories of JPY1.3 million, (c) an increase in other current assets of JPY180.2 million, (d) a decrease in asset retirement obligation of JPY0.4 million, (e) a decrease in accounts and other payables of JPY18.3 million, (f) an increase in contract liabilities of JPY3.2 million, and (g) an increase in income tax payable of JPY108.3 million.

Net cash used in operating activities was JPY197.5 million (US$1.4 million) for the year ended June 30, 2025, which primarily reflected our profit before income tax expenses of JPY49.2 million as mainly adjusted by (i) certain non-cash items, primarily comprising (a) depreciation expense of property and equipment of JPY69.8 million, (b) depreciation expense of right-of-use assets of JPY155.6 million, (c) gain on derecognition of right-of-use assets of JPY170.4 million, (d) loss on disposal of property and equipment of JPY34.0 million, (e) gain on termination of lease of JPY10.2 million, (f) share of income of investments in an associate of JPY14.0 million, (g) allowance for expected credit losses of JPY26.7 million; and (ii) changes in working capital, primarily comprising (a) an increase in accounts receivables of JPY396.4 million as a result of higher revenues, (b) an increase in accounts and other payables of JPY138.1 million, and (c) an increase in other current assets of JPY49.0 million.

Net cash provided by operating activities was JPY142.9 million for the year ended June 30, 2024, which primarily reflected our profit before income tax expenses of JPY231.6 million as mainly adjusted by (i) certain non-cash items, primarily comprising (a) depreciation expense of property and equipment of JPY66.6 million, (b) depreciation expense of right-of-use assets of JPY192.7 million, (c) gain on disposal of a subsidiary of JPY94.0 million, (d) gain on derecognized of right-of-use assets of JPY8.2 million; and (ii) changes in working capital, primarily comprising (a) an increase in accounts receivables of JPY187.4 million as a result of surge increased revenue, (b) an increase in accounts and other payables of JPY24.4 million, (c) a decrease in contact liabilities of JPY50.2 million.

Investing Activities

For the year ended June 30, 2026, our net cash generated from investing activities was JPY1,357.3 million (US$8.3 million), which was primarily attributable to (i) net proceeds from disposal of property, plant and equipment of JPY911.9 million, (ii) proceeds from disposal of investments in an associate of JPY400.0 million and (iii) receipt of the principal portion of net investments in subleases of JPY372.9 million; and was mainly offset by (i) purchase of property and equipment of JPY49.1 million, (ii) purchase of financial assets of JPY140.0 million and (iii) purchase of term deposit of JPY138.5 million.

For the year ended June 30, 2025, our net cash generated from investing activities was JPY301.5 million (US$2.1 million), which was primarily attributable to receipt of the principal portion of net investments in subleases of JPY349.3 million; and was mainly offset by (i) purchase of property and equipment of JPY46.1 million; and (ii) purchase of term deposit of JPY1.8 million.

For the year ended June 30, 2024, our net cash generated from investing activities was JPY114.9 million, which was primarily attributable to (i) receipt of the principal portion of net investments in subleases of JPY113.4 million; (ii) proceeds from disposal of a subsidiary of JPY100.0 million; and was mainly offset by (i) purchase of property and equipment of JPY98.5 million.

Financing Activities

For the year ended June 30, 2026, net cash used in financing activities was JPY589.5 million (US$3.6 million), primarily attributable to (i) repayments of bank and other borrowings of JPY585.7 million; (ii) principal elements of operating lease payments of JPY401.2 million; (iii) distribution to shareholders of JPY266.7 million; (iv) principal elements of finance lease payments of JPY5.4 million; and (v) payment for deferred offering costs of JPY28.9 million; and was mainly offset by (i) proceeds from IPO of JPY649.8 million and (ii) proceeds from bank and other borrowings of JPY48.6 million.

For the year ended June 30, 2025, net cash used in financing activities was JPY184.7 million (US$1.3 million), which was primarily attributable to (i) repayments of bank and other borrowings of JPY413.1 million; (ii) principal elements of operating and finance lease payments of JPY329.4 million; (iii) payment for deferred offering cost of JPY207.5 million; and was mainly offset by (i) proceeds from bank and other borrowings of JPY386.0 million; (ii) capital contribution from the shareholder of JPY379.4 million.

For the year ended June 30, 2024, net cash used in financing activities was JPY233.2 million, which was primarily attributable to (i) repayments of bank and other borrowings of JPY170.9 million; (ii) principal elements of operating and finance lease payments of JPY283.7 million; and was mainly offset by (i) proceeds from bank and other borrowings of JPY191.4 million; (ii) capital contribution from the shareholder of JPY30.0 million.

C. Contractual Obligations and Commitments

The following table sets forth our contractual obligations as of June 30, 2026.

Except for those disclosed above, we did not have any significant capital or other commitments, long-term obligation, or guarantees as of June 30, 2026.

Off-balance sheet commitments and arrangements

We did not have any off-balance sheet arrangements as of June 30, 2026.

D. Trend information

Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments, or events that are reasonably likely to have a material effect on our revenue, profitability, liquidity, or capital resources, or that would cause reported financial information to be not necessarily indicative of future operating results or financial condition.

E. Critical Accounting Estimates

We prepare our consolidated financial statements in accordance with the International Financial Reporting Standards, or IFRS, issued by the International Accounting Standards Board, or IASB, and the interpretations issued by the IASB’s International Financial Reporting Interpretation Committee, which requires us to make judgments, estimates and assumptions that affect (i) the reported amounts of our assets and liabilities; (ii) the disclosure of our contingent assets and liabilities at the end of each reporting period; and (iii) the reported amounts of revenues and expenses during each reporting period. We continually evaluate these judgments, estimates and assumptions based on our own historical experience, knowledge and assessment of current business and other conditions and our expectations regarding the future based on available information, which together form our basis for making judgments about matters that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, our actual results could differ from those estimates. Some of our accounting policies require a higher degree of judgment than others in their application.

When reading our consolidated financial statements, you should consider our selection of critical accounting policies, the judgment and other uncertainties affecting the application of such policies and the sensitivity of reported results to changes in conditions and assumptions. Our critical accounting policies and practices include the following: (i) revenue recognition. See Note 2 — Summary of Material Accounting Policies to our consolidated financial statements for the disclosure of these accounting policies. We believe the following accounting estimates involve the most significant judgments used in the preparation of our consolidated financial statements.

Allowance for ECL of accounts receivable

The Company has applied the simplified approach in IFRS 9 and use provision matrix to measure the ECL for accounts receivable. The ECL rates are based on the Company’s historical loss experience of the customers, geographical locations, product types and internal ratings, adjusted for forward-looking factors specific to the debtors and the economic environment which could affect the ability of the debtors to settle the accounts receivable. In considering the impact of the economic environment on the expected credit losses rates, the Company assesses, for example, the country default risk. The Company adjusts the allowance matrix at each reporting date. Such estimation of the expected credit losses rates may not be representative of the actual default in the future.

Accounts receivable aged within 90 days accounted for 82.8% and 46.1% of the total accounts receivable as of June 30, 2025 and 2026, respectively. Till the issuance of the consolidated financial statements, the Company collected JPY433.4 million from these balances.

Fair value measurements

A number of assets and liabilities included in the Company’s consolidated financial statements require measurement at and disclosure of fair value. The fair value measurement utilises market observable inputs and data as far as possible. The Company uses the following hierarchy for determining the fair value of financial instruments measured at fair value:

The classification of an item into the above levels is based on the lowest level of the inputs used that has a significant effect on the fair value measurement of the item. Transfers of items between levels are recognised in the period they occur.

Recent Accounting Pronouncements

New accounting guidance that we have recently adopted, as well as accounting guidance that has been recently issued but not yet adopted by us, is included in Note 2, “Summary of Significant Accounting Policies” to our audited consolidated financial statements included elsewhere in this annual report.

Internal Control over Financial Reporting

In connection with the preparation of our consolidated financial statements, we identified a material weakness in our over financial reporting. The material weakness identified relates to the lack of sufficient competent financial reporting and accounting personnel with appropriate understanding of IFRS and SEC rules and regulations to address complex technical accounting issues and SEC reporting requirements. See “Risk Factors—Risks Related to this Offering and our Securities — If we fail to implement and maintain an effective system of internal controls, we may be unable to accurately or timely report our results of operations or prevent fraud, and investor confidence and the market price of our ordinary shares may be materially and adversely affected.” We are in the process of implementing measures designed to improve our over financial reporting and remediate the material weakness. This includes implementing additional review procedures within our accounting and finance department, and hiring additional staff and engaging external accounting experts to support improving our accounting processes.

ITEM 6. DIRECTORS, OFFICERS AND SENIOR MANAGEMENT

6.A. Directors and Executive Officers

The following table sets forth the names, ages and titles of our Executive Directors, Executive Officers and Independent Non-executive Directors as of [●], 2026: