| RELATED PARTY TRANSACTIONS |
NOTE 18 — RELATED PARTY TRANSACTIONS The related parties had material transactions for the nine months ended September 30, 2025 and 2024 consist of the following:
|
|
|
Name of Related Parties |
|
Nature of Relationship as of September 30, 2025 |
Yoshiyuki Aikawa |
|
Controlling shareholder, director and CEO of the Company |
Medical Corporation Shobikai |
|
The relatives of CEO of the Company being the Members of the MC |
Medical Corporation Kowakai |
|
The relatives of CEO of the Company being the Members of the MC |
Medical Corporation Nasukai |
|
The relatives of CEO of the Company being the Members of the MC |
Medical Corporation Aikeikai |
|
The relatives of CEO of the Company being the Members of the MC |
Medical Corporation Jukeikai |
|
The relatives of CEO of the Company being the Members of the MC |
Medical Corporation Ritz Cosmetic Surgery |
|
The relatives of CEO of the Company being the Members of the MC |
Medical Corporation Association Junikai |
|
The relatives of CEO of the Company being the Members of the MC |
Medical Corporation Association Furinkai |
|
The relatives of CEO of the Company being the Members of the MC |
Japan Medical & Beauty Inc. |
|
Controlled by the CEO of the Company |
SBC Inc. |
|
Controlled by the CEO of the Company |
Hariver Inc. |
|
Controlled by the CEO of the Company |
Public Interest Foundation SBC Medical Promotion Foundation |
|
The relative of CEO of the Company being a Member of Public Interest Foundation SBC Medical Promotion Foundation |
AI Med Inc. |
|
The CEO of the Company is a principal shareholder of AI Med Inc. |
SBC Irvine MC |
|
Significantly influenced by the Company |
SBC Tokyo Medical University |
|
The CEO of the Company is the chairman of SBC Tokyo Medical University |
SBC Shonan Osteopathic Clinic Inc. |
|
The CEO of the Company is a principal shareholder of SBC Shonan Osteopathic Clinic Inc. |
General Incorporated Association Taiseikai |
|
The relatives of CEO of the Company being the Members of General Incorporated Association Taiseikai |
General Incorporated Association SBC |
|
The CEO of the Company being the Member of General Incorporated Association SBC |
Skynet Academy Co., Ltd. |
|
Subsidiary of Hariver, Inc., a company controlled by the CEO of the Company |
Kijimadairakanko Inc. |
|
Subsidiary of SBC Inc., a company controlled by the CEO of the Company |
Medical Corporation Misakikai |
|
The relatives of CEO of the Company being the Members of the MC |
General Incorporated Association Miotokai |
|
The relatives of CEO of the Company being the Members of General Incorporated Association Miotokai |
Waqoo, Inc. |
|
The CEO of the Company is a principal shareholder of Waqoo, Inc. |
Co-medical Co., Ltd. |
|
The CEO of the Company is a principal shareholder of Co-medical Co., Ltd. |
NOTE 18 — RELATED PARTY TRANSACTIONS (cont.) During the three and nine months ended September 30, 2025 and 2024, the transactions with related parties are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended September 30, |
|
|
For the Nine Months
Ended September 30, |
|
Revenues, net |
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
Medical Corporation Shobikai |
|
$ |
10,289,857 |
|
|
$ |
17,432,767 |
|
|
$ |
32,805,049 |
|
|
$ |
43,637,973 |
|
Medical Corporation Kowakai |
|
|
8,663,847 |
|
|
|
11,847,370 |
|
|
|
28,686,100 |
|
|
|
37,846,051 |
|
Medical Corporation Nasukai |
|
|
9,784,466 |
|
|
|
10,608,288 |
|
|
|
32,320,003 |
|
|
|
34,722,269 |
|
Medical Corporation Aikeikai |
|
|
3,380,455 |
|
|
|
3,911,210 |
|
|
|
10,669,386 |
|
|
|
15,025,186 |
|
Medical Corporation Jukeikai |
|
|
1,126,342 |
|
|
|
1,121,440 |
|
|
|
3,190,549 |
|
|
|
4,819,541 |
|
Medical Corporation Ritz Cosmetic Surgery |
|
|
852,589 |
|
|
|
1,343,935 |
|
|
|
3,410,800 |
|
|
|
4,016,818 |
|
Japan Medical & Beauty Inc. |
|
|
10,173 |
|
|
|
10,063 |
|
|
|
30,379 |
|
|
|
29,776 |
|
Hariver Inc. |
|
|
5,087 |
|
|
|
5,032 |
|
|
|
15,190 |
|
|
|
14,888 |
|
SBC Inc. |
|
|
221 |
|
|
|
324 |
|
|
|
535 |
|
|
|
2,166 |
|
Public Interest Foundation SBC Medical Promotion Foundation |
|
|
14 |
|
|
|
26 |
|
|
|
55 |
|
|
|
85 |
|
General Incorporated Association SBC |
|
|
— |
|
|
|
498 |
|
|
|
— |
|
|
|
802 |
|
SBC Tokyo Medical University |
|
|
74,946 |
|
|
|
3,975 |
|
|
|
91,263 |
|
|
|
44,792 |
|
SBC Shonan Osteopathic Clinic Inc. |
|
|
— |
|
|
|
17,837 |
|
|
|
— |
|
|
|
20,717 |
|
Yoshiyuki Aikawa |
|
|
69 |
|
|
|
23,244 |
|
|
|
30,056 |
|
|
|
77,374 |
|
AI Med Inc. |
|
|
95 |
|
|
|
519 |
|
|
|
285 |
|
|
|
726 |
|
SBC Irvine MC |
|
|
— |
|
|
|
278,881 |
|
|
|
239,538 |
|
|
|
960,938 |
|
Medical Corporation Association Furinkai |
|
|
3,182,443 |
|
|
|
3,104,905 |
|
|
|
8,121,389 |
|
|
|
7,985,014 |
|
Medical Corporation Association Junikai |
|
|
2,040,455 |
|
|
|
1,497,395 |
|
|
|
3,988,976 |
|
|
|
3,510,845 |
|
General Incorporated Association Taiseikai |
|
|
— |
|
|
|
1,534 |
|
|
|
— |
|
|
|
2,527 |
|
Skynet Academy Co., Ltd. |
|
|
6,782 |
|
|
|
— |
|
|
|
20,253 |
|
|
|
— |
|
Kijimadairakanko Inc. |
|
|
— |
|
|
|
— |
|
|
|
78 |
|
|
|
— |
|
Medical Corporation Misakikai |
|
|
184,517 |
|
|
|
— |
|
|
|
184,517 |
|
|
|
— |
|
General Incorporated Association Miotokai |
|
|
15,190 |
|
|
|
— |
|
|
|
15,190 |
|
|
|
— |
|
Total |
|
$ |
39,617,548 |
|
|
$ |
51,209,243 |
|
|
$ |
123,819,591 |
|
|
$ |
152,718,488 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended September 30, |
|
|
For the Nine Months
Ended September 30, |
|
Cost of revenues |
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
Medical Corporation Nasukai |
|
$ |
10,980 |
|
|
$ |
— |
|
|
$ |
76,939 |
|
|
$ |
— |
|
Medical Corporation Aikeikai |
|
|
836 |
|
|
|
— |
|
|
|
4,578 |
|
|
|
— |
|
Japan Medical & Beauty Inc. |
|
|
3,637,091 |
|
|
|
2,039,492 |
|
|
|
11,438,827 |
|
|
|
7,452,954 |
|
SBC Tokyo Medical University |
|
|
61,798 |
|
|
|
— |
|
|
|
245,487 |
|
|
|
— |
|
Kijimadairakanko Inc. |
|
|
6,881 |
|
|
|
— |
|
|
|
78,285 |
|
|
|
— |
|
Waqoo, Inc. |
|
|
300,479 |
|
|
|
— |
|
|
|
300,479 |
|
|
|
— |
|
Co-medical Co., Ltd. |
|
|
312 |
|
|
|
— |
|
|
|
312 |
|
|
|
— |
|
Total |
|
$ |
4,018,377 |
|
|
$ |
2,039,492 |
|
|
$ |
12,144,907 |
|
|
$ |
7,452,954 |
|
NOTE 18 — RELATED PARTY TRANSACTIONS (cont.)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended September 30, |
|
|
For the Nine Months
Ended September 30, |
|
Selling, general and administrative expenses |
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
Medical Corporation Shobikai |
|
$ |
123,331 |
|
|
$ |
— |
|
|
$ |
478,261 |
|
|
$ |
— |
|
Medical Corporation Kowakai |
|
|
1,939 |
|
|
|
— |
|
|
|
5,636 |
|
|
|
— |
|
Medical Corporation Nasukai |
|
|
2,098 |
|
|
|
— |
|
|
|
17,276 |
|
|
|
— |
|
Medical Corporation Aikeikai |
|
|
19,196 |
|
|
|
— |
|
|
|
47,414 |
|
|
|
— |
|
Medical Corporation Jukeikai |
|
|
— |
|
|
|
— |
|
|
|
791 |
|
|
|
— |
|
Medical Corporation Association Junikai |
|
|
— |
|
|
|
— |
|
|
|
337 |
|
|
|
— |
|
Medical Corporation Association Furinkai |
|
|
— |
|
|
|
— |
|
|
|
429 |
|
|
|
— |
|
SBC Inc. |
|
|
— |
|
|
|
— |
|
|
|
7 |
|
|
|
— |
|
General Incorporated Association SBC |
|
|
6,333 |
|
|
|
— |
|
|
|
18,513 |
|
|
|
— |
|
Co-medical Co., Ltd. |
|
|
1,166 |
|
|
|
— |
|
|
|
1,166 |
|
|
|
— |
|
Total |
|
$ |
154,063 |
|
|
$ |
— |
|
|
$ |
569,830 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended September 30, |
|
|
For the Nine Months
Ended September 30, |
|
Other income |
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
Skynet Academy Co., Ltd. |
|
$ |
3,069 |
|
|
$ |
— |
|
|
$ |
3,069 |
|
|
$ |
— |
|
Total |
|
$ |
3,069 |
|
|
$ |
— |
|
|
$ |
3,069 |
|
|
$ |
— |
|
As of September 30, 2025 and December 31, 2024, the balances with related parties are as follows:
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
September 30,
2025 |
|
|
December 31,
2024 |
|
Medical Corporation Shobikai |
|
$ |
15,386,034 |
|
|
$ |
5,091,430 |
|
Medical Corporation Nasukai |
|
|
15,923,131 |
|
|
|
8,552,722 |
|
Medical Corporation Kowakai |
|
|
15,876,461 |
|
|
|
7,742,251 |
|
Medical Corporation Aikeikai |
|
|
6,032,102 |
|
|
|
3,071,378 |
|
Medical Corporation Jukeikai |
|
|
1,727,954 |
|
|
|
993,944 |
|
Medical Corporation Association Furinkai |
|
|
1,404,431 |
|
|
|
1,263,602 |
|
Medical Corporation Ritz Cosmetic Surgery |
|
|
1,534,151 |
|
|
|
817,283 |
|
Medical Corporation Association Junikai |
|
|
578,993 |
|
|
|
283,298 |
|
SBC Tokyo Medical University |
|
|
80,379 |
|
|
|
536 |
|
AI Med Inc. |
|
|
35 |
|
|
|
33 |
|
SBC Inc. |
|
|
442 |
|
|
|
137 |
|
Public Interest Foundation SBC Medical Promotion Foundation |
|
|
64 |
|
|
|
36 |
|
SBC Shonan Osteopathic Clinic Inc. |
|
|
— |
|
|
|
4 |
|
SBC Irvine MC |
|
|
— |
|
|
|
693,850 |
|
Kijimadairakanko Inc. |
|
|
— |
|
|
|
336,176 |
|
Medical Corporation Misakikai |
|
|
35,525 |
|
|
|
— |
|
General Incorporated Association Miotokai |
|
|
5,571 |
|
|
|
— |
|
Total |
|
$ |
58,585,273 |
|
|
$ |
28,846,680 |
|
NOTE 18 — RELATED PARTY TRANSACTIONS (cont.)
|
|
|
|
|
|
|
|
|
Finance lease receivables |
|
September 30,
2025 |
|
|
December 31,
2024 |
|
Medical Corporation Shobikai |
|
$ |
4,626,376 |
|
|
$ |
1,877,291 |
|
Medical Corporation Kowakai |
|
|
4,601,042 |
|
|
|
2,490,705 |
|
Medical Corporation Nasukai |
|
|
7,303,110 |
|
|
|
3,872,683 |
|
Medical Corporation Aikeikai |
|
|
1,795,887 |
|
|
|
1,047,821 |
|
Medical Corporation Ritz Cosmetic Surgery |
|
|
2,009,829 |
|
|
|
2,479,771 |
|
Medical Corporation Jukeikai |
|
|
699,403 |
|
|
|
500,244 |
|
Medical Corporation Association Furinkai |
|
|
1,814,218 |
|
|
|
1,891,412 |
|
Medical Corporation Association Junikai |
|
|
1,595,407 |
|
|
|
197,452 |
|
SBC Shonan Osteopathic Clinic Inc. |
|
|
22,344 |
|
|
|
32,788 |
|
Total |
|
|
24,467,616 |
|
|
|
14,390,167 |
|
Less: current portion |
|
|
(9,757,901 |
) |
|
|
(5,992,585 |
) |
Non-current portion |
|
$ |
14,709,715 |
|
|
$ |
8,397,582 |
|
|
|
|
|
|
|
|
|
|
Due from related party, net |
|
September 30,
2025 |
|
|
December 31,
2024 |
|
SBC Irvine MC |
|
$ |
2,766,013 |
|
|
$ |
2,836,013 |
|
Less: allowance for credit loss |
|
|
(2,766,013 |
) |
|
|
(2,836,013 |
) |
Total |
|
$ |
— |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
Long-term investments in MCs |
|
September 30,
2025 |
|
|
December 31,
2024 |
|
Medical Corporation Shobikai |
|
$ |
6,753 |
|
|
$ |
6,378 |
|
Medical Corporation Kowakai |
|
|
6,753 |
|
|
|
6,378 |
|
Medical Corporation Nasukai |
|
|
6,753 |
|
|
|
6,378 |
|
Medical Corporation Aikeikai |
|
|
6,753 |
|
|
|
6,378 |
|
Medical Corporation Jukeikai |
|
|
7,263,511 |
|
|
|
6,859,913 |
|
Medical Corporation Ritz Cosmetic Surgery |
|
|
11,578,867 |
|
|
|
10,935,485 |
|
Total |
|
$ |
18,869,390 |
|
|
$ |
17,820,910 |
|
|
|
|
|
|
|
|
|
|
Accounts payable |
|
September 30,
2025 |
|
|
December 31,
2024 |
|
Japan Medical & Beauty Inc. |
|
$ |
2,083,510 |
|
|
$ |
659,044 |
|
Medical Corporation Shobikai |
|
|
175,064 |
|
|
|
— |
|
Medical Corporation Nasukai |
|
|
101,259 |
|
|
|
— |
|
Medical Corporation Kowakai |
|
|
79,905 |
|
|
|
— |
|
Medical Corporation Aikeikai |
|
|
47,243 |
|
|
|
— |
|
Medical Corporation Jukeikai |
|
|
6,726 |
|
|
|
— |
|
Medical Corporation Association Furinkai |
|
|
16,609 |
|
|
|
— |
|
Medical Corporation Ritz Cosmetic Surgery |
|
|
11,060 |
|
|
|
— |
|
General Incorporated Association SBC |
|
|
567 |
|
|
|
— |
|
Waqoo, Inc. |
|
|
320,792 |
|
|
|
— |
|
Co-medical Co., Ltd. |
|
|
142 |
|
|
|
— |
|
Total |
|
$ |
2,842,877 |
|
|
$ |
659,044 |
|
NOTE 18 — RELATED PARTY TRANSACTIONS (cont.)
|
|
|
|
|
|
|
|
|
Advances from customers |
|
September 30,
2025 |
|
|
December 31,
2024 |
|
Medical Corporation Shobikai |
|
$ |
3,895,895 |
|
|
$ |
5,076,300 |
|
Medical Corporation Kowakai |
|
|
383,401 |
|
|
|
1,801,034 |
|
Medical Corporation Nasukai |
|
|
475,795 |
|
|
|
1,745,069 |
|
Medical Corporation Aikeikai |
|
|
24,812 |
|
|
|
379,931 |
|
Medical Corporation Jukeikai |
|
|
7,081 |
|
|
|
140,170 |
|
Medical Corporation Ritz Cosmetic Surgery |
|
|
5,845 |
|
|
|
45,701 |
|
SBC Shonan Osteopathic Clinic Inc. |
|
|
16,627 |
|
|
|
16,395 |
|
Medical Corporation Association Furinkai |
|
|
787,891 |
|
|
|
940,007 |
|
Medical Corporation Association Junikai |
|
|
1,360,130 |
|
|
|
1,594,926 |
|
Total |
|
$ |
6,957,477 |
|
|
$ |
11,739,533 |
|
|
|
|
|
|
|
|
|
|
Notes and other payables |
|
September 30,
2025 |
|
|
December 31,
2024 |
|
Medical Corporation Shobikai |
|
$ |
263,566 |
|
|
$ |
4,653 |
|
Medical Corporation Kowakai |
|
|
178,975 |
|
|
|
14,672 |
|
Medical Corporation Nasukai |
|
|
170,790 |
|
|
|
8,827 |
|
Medical Corporation Aikeikai |
|
|
33,700 |
|
|
|
2,236 |
|
Medical Corporation Jukeikai |
|
|
16,196 |
|
|
|
— |
|
Medical Corporation Ritz Cosmetic Surgery |
|
|
20,416 |
|
|
|
1,201 |
|
General Incorporated Association SBC |
|
|
953,727 |
|
|
|
— |
|
Total |
|
|
1,637,370 |
|
|
|
31,589 |
|
Less: current portion |
|
|
(1,637,370 |
) |
|
|
(26,255 |
) |
Non-current portion |
|
$ |
— |
|
|
$ |
5,334 |
|
|
|
|
|
|
|
|
|
|
Due to related party |
|
September 30,
2025 |
|
|
December 31,
2024 |
|
Yoshiyuki Aikawa |
|
$ |
2,791,808 |
|
|
$ |
2,823,590 |
|
Total |
|
$ |
2,791,808 |
|
|
$ |
2,823,590 |
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months
Ended September 30, |
|
Allowance for credit loss movement |
|
2025 |
|
|
2024 |
|
Beginning balance |
|
$ |
2,836,013 |
|
|
$ |
3,238,209 |
|
Provision for credit loss |
|
|
— |
|
|
|
617,804 |
|
Reversal of credit loss |
|
|
(70,000 |
) |
|
|
(745,000 |
) |
Ending balance |
|
$ |
2,766,013 |
|
|
$ |
3,111,013 |
|
The balances of due to and due from related parties represent the outstanding loans to and from related parties, respectively, as of September 30, 2025 and December 31, 2024. These loans are non-secured, interest-free and due on demand. In June 2025, the Company entered into a memorandum of sale for an aircraft pursuant to the property sales agreement dated August 18, 2023 with General Incorporated Association SBC, an entity controlled by the CEO of the Company, who is also the controlling shareholder of the Company. The original sale price was increased by approximately $9.68 million, which was recorded as a deemed contribution in connection with price modification on disposal of property and equipment in the Company’s unaudited consolidated statements of changes in stockholders’ equity. Also see Note 2(a), 10, 13, 14, 17 and 20 for more transactions with related parties.
|