SBC Medical Group Holdings Inc 10-K

Item 1. Business. Unless the context indicates otherwise, any references herein to the “Company”, “we”, “us” and “our” refer to (i) SBC Medical Group, Inc. (formerly known as SBC Medical Group Holdings Incorporated), a Delaware corporation (“Legacy SBC”), and its consolidated subsidiaries and variable interest entity (“VIE”), prior to the consummation of Business Combination and to (ii) SBC Medical Group Holdings Incorporated, the Combined Entity and its consolidated subsidiaries and VIE following the Business Combination, and reference herein to “Pono” refers to predecessor company prior to the consummation of the Business Combination. Company Overview History We were originally incorporated in Delaware on February 12, 2021 under the name “Pono Capital Two, Inc.,” referred to herein as “Pono,” as a special purpose acquisition company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. On August 9, 2022, Pono consummated its IPO of 11,500,000 units (the “Units” and, with respect to the Class A common stock included in the Units being offered, the “Public Shares” and with respect to the warrants included in the Units, the “Public Warrants”) (the “Pono IPO”). Simultaneously with the consummation of the closing of the Pono IPO, Pono consummated the private placement of an aggregate of 634,375 units (the “Placement Units”) at a price of $10.00 per Placement Unit in a private placement to the Sponsor (the “Private Placement”). On September 26, 2022, the Class A common stock and Public Warrant included in the Units began separate trading on The Nasdaq Global Market under the symbols “PTWO” and “PTWOW,” respectively. On January 21, 2023, Pono entered into an Agreement and Plan of Merger (as subsequently amended from time to time, the “Merger Agreement”) with Pono Two Merger Sub, Inc., a Delaware corporation (“Merger Sub”) and then a wholly-owned subsidiary of Pono, SBC Medical Group, Inc., then named SBC Medical Group Holdings Incorporated, a Delaware corporation (“Legacy SBC”), Mehana Capital LLC, a Delaware limited liability company (“Sponsor” or “Purchaser Representative”) in its capacity as the representative of the stockholders of Pono, and Yoshiyuki Aikawa in his personal capacity and his capacity as the representative of the stockholders of Legacy SBC (“Seller Representative”). On September 17, 2024, the closing (the “Closing”) of the merger (the “Merger”) and other transactions contemplated thereby (collectively, the “Business Combination”) took place and the Merger was consummated with Merger Sub merging with and into Legacy SBC with Legacy SBC surviving the Merger as a wholly-owned subsidiary of Pono, and Pono then changed its name to SBC Medical Group Holdings Incorporated and on September 17, 2024, Legacy SBC changed its named to SBC Medical Group, Inc. Effective September 17, 2024, Pono’s units ceased trading, and effective September 18, 2024, SBC’s common stock began trading on the Nasdaq Global Market under the symbol “SBC” and the public warrants began trading on the Nasdaq Capital Market under the symbol “SBCWW.” As a result of the Closing of the Merger and the Business Combination, the business of SBC Medical Group, Inc. (“Legacy SBC”), became the business of the Company. Business Overview The Company is a management company headquartered in Irvine California and Tokyo, Japan, that owns, operates, and provides management services to cosmetic treatment centers mainly in Japan, with footprint also in Vietnam, Singapore and the United States. The history of Legacy SBC began with the establishment of L’Ange Cosmetique Co., Ltd. in 2003 and SBCMG (formerly Aikawa Medical) in 2017 for the purpose of providing management services to medical corporations and the medical clinics of the medical corporations. The history of the medical corporations and the medical clinics began in 2000 with the opening of Shonan Beauty Clinic in Fujisawa City, Japan, where Dr. Aikawa opened in private practice. Subsequently, Dr. Aikawa opened clinics in Yokohama in 2001 and Shinjuku in 2003, incorporated as Medical Corporation Shobikai in 2004, acquired a medical corporation named Medical Corporation Kowakai in 2009 and Medical Corporation Nasukai in 2009. 7 The Company is primarily focused on providing comprehensive management services to franchisee clinics, including but not limited to advertising and marketing needs across various platforms (such as social media networks), staff management (such as recruitment and training), booking reservations for franchisee clinic customers, assistance with franchisee employee housing rentals and facility rentals, construction and design of franchisee clinics, medical equipment and medical consumables procurement (resale), the provision of cosmetic products to franchisee clinics for resale to clinic customers, licensure of the use of patent-pending and non-patented medical technologies, trademark and brand use, IT software solutions (including but not limited to remote medical consultations), management of the franchisee clinic’s customer rewards program (customer loyalty point program), and payment tools for the franchisee clinics. In 2017, we began providing our management services to our franchisee treatment center. The Company and its subsidiaries now provide management services to a total of 241 franchisee treatment centers located in Japan. The Company also (i) owns and operates 1 treatment center under its “SBC” brand name in Ho Chi Minh City, Vietnam, as well as (ii) provides management service to 1 treatment center under its “SBC” brand name in Irvine, California in the United States (the “CA Clinic”), which is owned and operated by the related party. Our treatment center in Vietnam, and the franchisee treatment centers that we provide management services to, provide an array of surgical and non-surgical medical services that vary based upon location, including cosmetic surgery, dermatology, and dentistry. These medical services include but are not limited to breast augmentation, liposuction, rejuvenation treatments (including treatment of wrinkles, acne, scars, cellulite, excess fat, discoloration, and signs of aging), laser skin toning and spot removal, eyes double fold surgery, rhinoplasty, treatment of osmidrosis and hyperhidrosis, hair transplants, gynecological formation treatments, laser hair removal, face line surgeries, cosmetical dental procedures, tattoo removal, lasik eye surgery, lateral canthoplasty, brow lift procedures, androgenetic alopecia treatment, and cheek sagging prevention methods. In November 2024, we acquired 100% equity interest of Aesthetic Healthcare Holdings (“AHH”) and its subsidiaries, companies incorporated in Singapore and principally engaged in medical aesthetics business, with a cash consideration of SGD$7.8 million (equivalent to approximately US$5.8 million). Through the acquisition of AHH, the Company currently operates several clinics in Singapore. Since our inception, we have been committed to delivering high quality management services to our franchisee clinics. We believe our team of highly qualified and experienced professionals have underpinned our strong reputation as we continue to provide multifaceted management services to our franchisee clinics. Business Segments The Company operates as a single operating segment. The Company’s Chief Executive Officer, who serves as the Chief Operating Decision Maker (“CODM”), is responsible for evaluating performance and allocating resources. Our revenues are primarily derived from providing comprehensive management services to franchisee cosmetic treatment centers, including advertising, staffing, procurement, IT solutions, and the licensing of medical technologies and trademarks. For additional details, see Note 20, “Segment Reporting,” in the accompanying notes to our consolidated financial statements. Corporate Structure The Company’s subsidiary, SBC Medical Group, Inc., primarily operates through 16 wholly owned subsidiaries, one majority owned subsidiaries and one variable interest entity. The wholly owned subsidiaries consist of SBC Medical Group Co., Ltd., a Japan corporation (“SBC Medical Sub”), L’Ange Cosmetique Co., Ltd., a Japan corporation (“Lange Sub”), Shobikai Co., Ltd., a Japan corporation (“Shobikai Sub”), Liesta Co., Ltd., a Japan corporation (“Liesta”), SBC Sealane Co., Ltd., a Japan corporation (“SBC Sealane”), SBC Marketing Co., Ltd., Japan corporation (“SBC Marketing”), SBC Medical Consulting Co., Ltd., a Japan corporation (“SBC Medical Consulting”), Shoubikai Medical Vietnam Co. Ltd., a Vietnam corporation (“SBC Vietnam”), SBC Healthcare, Inc., a Delaware corporation (“SBC Healthcare”), SBC Irvine, LLC, a Delaware limited liability company (“SBC Irvine”), Aesthetic Healthcare Holdings Pte., Ltd., a Singapore corporation (“AHH”), Wen & Wang Family Clinic Pte., Ltd., a Singapore corporation (“WWFC”), Wen & Wang Medical Group Pte., Ltd., a Singapore corporation (“WWMG”), Rochor Clinic Pte., Ltd., a Singapore corporation (“RCC”), Dermasolutions Pte., Ltd., a Singapore corporation (“DS”), and Dermasolutions Services Pte., Ltd., a Singapore corporation (“DSS”). The majority owned subsidiary is Medical Payment Co., Ltd., a Japan corporation (“Med Payment”). The variable interest entity is Aikawa Medical Management, Inc. 8 Disposal of Kijimadairakanko Inc. (“Kijima”) and Skynet Academy Co., Ltd. (“Skynet”) On December 17, 2024, the Company entered into definitive agreements to sell and transfer all of the shares in its subsidiaries, Kijima and Skynet, to entities owned by Yoshiyuki Aikawa, CEO of the Company, for cash. The Company pursued the transactions to concentrate business and management resources on its main medical business. The disposal of Kijima and Skynet did not constitute a strategic shift that would have a major effect on the Company’s operations and financial results. The transactions closed on December 23, 2024, subject to customary closing conditions. The Company received total cash consideration of one Japanese Yen ($0) for Kijima and $446,460 for Skynet. In accounting for the disposals, operating results of Kijima and Skynet are included in the Company’s consolidated financial statements up to the disposal date. The difference between (i) the fair value of the net assets disposed and (ii) the consideration received was recognized as an adjustment to Additional Paid-in Capital (“APIC”). No retrospective adjustments have been made to prior-period consolidated financial statements. Following the completion of these transactions, Kijima and Skynet ceased to be subsidiaries of the Company after December 23, 2024. Their financial results are therefore excluded from the Company’s consolidated financial statements for periods subsequent to the disposal date. Acquisition of AHH On November 20, 2024, the Company completed the payment of SGD 7.8 million in cash for the acquisition of 100% of the voting equity interest AHH and its subsidiaries, following the execution of a Share Purchase Agreement with Dr. Ewen Chee Yew Wen, Dr. Lee Tee Kit, Dr. Phua Vanessa Mae, Dr. Charlotte Kim Thomas, and Dr. Gary Si Khin Yuen. AHH is based in Singapore and operates aesthetic medical clinics, family clinics, and quick facial aesthetics outlets. The founder, Dr. Ewen Chee, is known as one of the pioneers in the field of aesthetic medicine in Singapore and is a co-chair of the first Asia Pacific Thread Lift Conference (APEM) and a board-certified physician by the American Academy of Aesthetic Medicine. He is a frequent speaker at international conferences and workshops, and his expertise and knowledge have been featured in numerous scientific publications. AHH’s major brands and number of clinics are The Chelsea Clinics, Gangnam Laser Clinic, SkinGo! and Family clinics. Due to AHH’s fiscal year ending on September 30, the financial results of AHH and its subsidiaries have been included in the Company’s consolidated financial statements with a three-month lag. For the current period, only the balance sheet information as of the acquisition date has been included in the consolidated financial statements. For the fiscal years ended December 31, 2024 and 202 3 , the Company generated revenues of $205,415,542 and $193,542,423, respectively, reported net income of $46,689,892 and $38,560,606, respectively, and cash flow provided by operating activities of $20,582,933 and $50,670 ,322 , respectively. As of December 31, 2024, the Company had retained earnings of $189,463,007. SBC Medical Group Co., Ltd., a Japan corporation (“SBC Medical Sub”), L’Ange Cosmetique Co., Ltd., a Japan corporation (“Lange Sub”), Shobikai Co., Ltd., a Japan corporation (“Shobikai Sub”) are each designated as a “medical service corporation” in Japan. In Japan, a medical service corporation is a legal entity that provides management service to “MCs”. The management services are conducted through FC contracts and service contracts between certain subsidiaries of the Company (SBC Medical Sub, Lange Sub, and Shobikai Sub) and the MCs that own all 241 of the treatment centers in Japan. There are currently six MCs that the Company’s subsidiaries have entered into franchisor-franchisee contracts and service contracts with, consisting of Medical Corporation Shobikai, Medical Corporation Kowakai, Medical Corporation Nasukai, Medical Corporation Aikeikai, Medical Corporation Jukeikai, and Medical Corporation Ritz Cosmetic Surgery (collectively, the “MCs”). In addition to the six MCs, we have entered into service contracts with Medical Corporation Association Furinkai (the service contract regarding operation on November 22, 2023 and the service contract regarding management consulting on November 25, 2023 respectively) and Medical Corporation Association Junikai (the service contract regarding operation and the service contract regarding management consulting both on November 16, 2023). The scope of work (“SOW”) of the service contracts with these two MCs is limited to marketing, introduction of new treatment technologies and future business development while the SOW of the FC contracts with the six MCs are broad and define general rules in order to allow MCs to use the SBC brand name. Accordingly, the service contracts with these two MCs are different from the FC contracts with the six MCs and the clinics of these two MCs do not use the “Shonan Beauty Clinic” brand. Please see “— Material Contracts between the Company and MCs — Service Contracts” for more information regarding the service contracts with Medical Corporation Association Furinkai and Medical Corporation Association Junikai. 9 All of the MCs are deemed to be related parties of the Company since relatives of the CEO of the Company are the members (or shain ) of general meetings of members of the MCs. The CEO of the Company was previously a member of the six franchisee MCs until he ceased being a member in July 2023. The Company, through SBC Medical, owns equity “deposit” interests (or mochibun ) of the six franchisee MCs. Although the Company, through SBC Medical, has an equity “deposit” interest to the rights to receive a distribution of residual assets in proportion to the amount of contribution in certain circumstances as provided in the articles of incorporation of each of the six MCs, the Company or SBC Medical does not have voting control over the corporate actions at general meetings of members (or shain ) of the MCs per the requirements of the Japanese Medical Care Act and the MCs’ articles of incorporation. Mission Our primary mission is to provide quality comprehensive management services to the MCs and expand our “Shonan Beauty Clinic” brand. We plan to achieve the mission by maintaining and strengthening our market position and brand in the cosmetic medical treatment management market in Japan, Vietnam, Singapore and the United States, and by continuing to grow our presence globally. Accordingly, we have entered into franchise agreements and partner doctor independence support program agreements (the “Support Agreements”) with the MCs to define the scope of the management services that we provide to the MCs as well as the franchise operational provisions that the MCs must comply with. The term of the Support Agreements is until August 31, 2026, provided that such Support Agreements will continue to automatically renew for one (1) year successive periods unless either the Company or the respective MC provides notice of termination at least six (6) months prior to the expiration date of the Support Agreement. We receive a portion of our overall compensation for providing management services under the Support Agreements with the following MCs: ● Medical Corporation Shobikai: from September 29, 2017 ● Medical Corporation Kowakai: from September 29, 2017 ● Medical Corporation Nasukai: from September 29, 2017 ● Medical Corporation Aikeikai: from September 29, 2017 ● Medical Corporation Jukeikai: from February 21, 2020 ● Medical Corporation Ritz Cosmetic Surgery: from May 31, 2021 Material Contracts between the Company and MCs The Company has entered into a Partner Doctor Independence Support Program Agreement and an SBC Operating Agreement with each of the MCs. Partner Doctor Independence Support Program Agreement The Company has entered into a Partner Doctor Independence Support Program Agreement (the “PDISPA”) with each of the MCs. The term of the PDISPA is for a period of 5 years from September 1, 2021, to August 31, 2026. The PDISPA will be renewed under the same terms for successive one-year periods upon conclusion of the initial term unless either party requests in writing to terminate the PDISPA 6 months prior to the expiration date of the PDISPA. Pursuant to the PDISPA, the Company agreed to provide the use of the name of the “Shonan Beauty Clinic” and the “SBC Medical Group” (Medical Corporation Shobikai, Medical Corporation Kowakai, Medical Corporation Nasukai, Medical Corporation Aikeikai, L’Ange Cosmetique Co., Ltd. and Shobikai Co., Ltd., which together are referred to as the “SBC Medical”) to the MCs for the purpose of operating clinics. The Company also granted to the MCs the right to use the name “SBC Medical Group,” the know-how of clinic operation, trademark, trade name, and the right to provide the treatment designated by the Company, and the right to conduct business activities as a partner of the SBC Medical Group under a unified image. 10 PDISPA does not charge franchise fee or deposit fee, instead the MCs are to pay fees to the Company, which are to be calculated as follows: total amount of sales at the clinic multiplied by 12% excluding consumption tax. If the total sales amount exceeds 100,000,000 yen per MCs, the maximum amount fee will be 10,000,000 yen. For the purposes of the PDISPA the total amount of sales means the amount of sales after discounting preferential tickets, and other campaigns and discounts. SBC’s Operating Agreement The Company previously entered into an SBC Operating Agreement (the “SBCOA”) with each of the MCs. The term of the SBCOA is from April 1, 2023, to March 31, 2025. Either party may terminate the SBCOA by giving notice to the other party of the intended termination at least 6 months prior to the scheduled termination date. Pursuant to the SBCOA the Company agreed to provide the MCs with the following consulting services related to: (i) marketing related services for developing new clients (ii) aiming to ensure stable performance and increase customer satisfaction through the creation of repeat customers (iii) the establishment and operation of a system seeking to ensure medical safety (iv) securing attorneys and medical institutions to transport in the event of claims or medical accidents, (v) measures to improve employee satisfaction, and design of organizational chart and personnel evaluation system (vi) the selection of medical equipment and materials, (vii) the acquisition of properties for new medical facilities (trade area survey, area selection, lease agreement signing, etc.) (viii) various types of general skills training for healthcare facility employees (ix) specialized and advanced skills training in leadership, motivation, communication, etc., for chiefs, leaders, and other employees with subordinates (x) development of new type of medical facilities (xi) development of new treatment methods (xii) hiring employees with national certifications, professional skills, and interpersonal skills, such as doctors, nurses, and reception counselors (xiii) performance management, business analysis, and management decision making utilizing financial statements such as income statements, cash flow statements, and balance sheets (xiv) use of the likeness of the Company’s officers or employees on websites, commercials, and other advertising media and (xv) efficient operation methods that allow for more customer service during the same clinic hours. Under the existing SBCOA, in exchange for the foregoing services, each MCs are to pay the Company 3,000,000 yen per month (excluding consumption tax) for each medical facility where a MC provides medical services to its clients. In light of the current challenging competitive environment, we are pursuing a long-term growth strategy aimed at expanding and stabilizing our business foundation by creating an environment that can better facilitate the establishment of new clinics by MCs. In line with this objective, we have decided to amend and renew the SBCOA with each MC, effective from April 1, 2025. Under the revised SBCOA, similar with prior terms, either party may terminate the agreement by providing written notice to the other party no later than six months before the scheduled expiration date. The main revisions include: 1. Revised Fee Structure ● First-Year Fee Reduction for Newly Opened Clinics: Fees will be reduced during the first year of operation for newly established clinics, significantly reducing initial cost burdens at a stage when clinics have yet to fully establish their customer base. ● Fees Based on Service Utilization from the Second Year Onward: Starting from the second year of operation, fees will be calculated based on the scale of services utilized and the operational size of each clinic. 2. Changes to Provided Consulting Services Following the revision, consulting services provided by the Company to MCs will include: ● Management consulting for medical corporations and facilities 11 ● Human resources and labor management services ● Recruitment-related services ● General administrative services ● Information system management services ● Customer relations services ● Accounting, finance, and taxation services ● Legal services ● Clinic establishment and facilities management services ● Infrastructure introduction, improvement, and operational support services related to insurance-covered medical treatments For the financial impact of these revisions, please refer to the “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Recent Developments—Upcoming Changes to Service Fee Structure.” Service Contracts We entered into service contracts with Medical Corporation Association Furinkai (the service contract regarding operation on November 22, 2023 and the service contract regarding management consulting on November 25, 2023 respectively) and Medical Corporation Association Junikai (the service contract regarding operation and the service contract regarding management consulting both on November 16, 2023). The scope of work (“SOW”) of the service contracts with these two MCs is limited to marketing, introduction of new treatment technologies and future business development while the SOW of the FC contracts with the six MCs are broad and define general rules in order to allow MCs to use the SBC brand name. Accordingly, the service contracts with these two MCs are different from the FC contracts with the six MCs and the clinics of these two MCs do not use the “Shonan Beauty Clinic” brand. Business Consignment Agreement for Management Consulting Services to Medical Corporation Association Furinkai The material terms of our business consignment agreement for management consulting services to Medical Corporation Association Furinkai are as follows: ● Signing Date: ◌ November 22, 2023 ● Consulting Services by the Company to Medical Corporation Association Furinkai ◌ consulting on the use of business systems used in medical facilities ◌ consulting on the development of new treatments and manuals ◌ consulting for repeat customer acquisition measures related to cosmetic dermatology 12 ◌ consulting on the efficient operation with more customer service during the same clinic hours related to cosmetic dermatology consulting ◌ consulting for building management strategies related to cosmetic dermatology treatment ● Effective Period ◌ September 1, 2024 until August 31, 2027 ◌ if neither party expresses an intention not to renew the agreement before the expiration of the effective period, the agreement shall be renewed for another two (2) years under the same terms and conditions ● Termination Provisions & Penalties ◌ Either party may terminate this agreement by notifying the other party at least six months prior to the scheduled termination date. ● Fees Payable Under the Agreement ◌ JPY60,000,000 per month (excluding consumption tax). Business Consignment Agreement for Operational Support to Medical Corporation Association Furinkai The material terms of our business consignment agreement for operational support services to Medical Corporation Association Furinkai are as follows: ● Signing Date ◌ November 22, 2023 ● Consulting Services by the Company to Medical Corporation Association Furinkai ◌ secure stable business performance and increase customer satisfaction through creation of repeat customers related to cosmetic dermatology ◌ selection of medical devices and medical materials for cosmetic dermatology ◌ establishment and operation of a system to ensure the safety of cosmetic dermatology treatment ◌ general skills training associated with cosmetic dermatology treatment for medical facility employees ◌ efficient operation methods that enable more customers to be served during the same clinic hours related to cosmetic dermatology ◌ planning management strategies related to cosmetic dermatology treatment ◌ development of new treatment methods, formulation of manuals, and support for implementation ◌ support and management of business system implementation ◌ design and implementation support, operation and maintenance of servers, networks and IT infrastructure 13 ● Effective Period ◌ September 1, 2023 until August 31, 2027 ◌ if neither party expresses an intention not to renew the agreement before the expiration of the effective period, the agreement shall be renewed for another two (2) years under the same terms and conditions ● Termination Provisions & Penalties ◌ Either party may terminate this agreement by notifying the other party at least six months prior to the scheduled termination date. ● Fees Payable Under the Agreement ◌ JPY1,700,000 per month for each medical facility (excluding consumption tax). Business Consignment Agreement for Management Consulting Services to Medical Corporation Association Junikai The material terms of our business consignment agreement for management consulting services to Medical Corporation Association Junikai are as follows: ● Signing Date ◌ November 16, 2023 ● Consulting Services by the Company to Medical Corporation Association Junikai ◌ consulting on the use of business systems used in medical facilities ◌ consulting on the development of new treatments and manuals ◌ consulting for repeat customer acquisition measures related to cosmetic dermatology ◌ consulting on the efficient operation with more customer service during the same clinic hours related to cosmetic dermatology consulting ◌ consulting for building management strategies related to cosmetic dermatology treatment ● Effective Period ◌ September 1, 2024 until August 31, 2026 ◌ if neither party expresses an intention not to renew the agreement before the expiration of the effective period, the agreement shall be renewed for another two (2) years under the same terms and conditions ● Termination Provisions & Penalties ◌ Either party may terminate this agreement by notifying the other party at least six months prior to the scheduled termination date. ● Fees Payable Under the Agreement ◌ JPY10,000,000 per month (excluding consumption tax). 14 Business Consignment Agreement for Operational Support to Medical Corporation Association Junikai The material terms of our business consignment agreement for operational support services to Medical Corporation Association Junikai are as follows: ● Signing Date ◌ November 16, 2023 ● Consulting Services by the Company to Medical Corporation Association Junikai ◌ secure stable business performance and increase customer satisfaction through creation of repeat customers related to cosmetic dermatology ◌ selection of medical devices and medical materials for cosmetic dermatology ◌ establishment and operation of a system to ensure the safety of cosmetic dermatology treatment ◌ general skills training associated with cosmetic dermatology treatment for medical facility employees ◌ efficient operation methods that enable more customers to be served during the same clinic hours related to cosmetic dermatology ◌ planning management strategies related to cosmetic dermatology treatment ◌ development of new treatment methods, formulation of manuals, and support for implementation ◌ support and management of business system implementation ◌ design and implementation support, operation and maintenance of servers, networks and IT infrastructure ◌ support and advisory services for the use of marketing analysis tools, etc. ● Effective Period ◌ September 1, 2023 until August 31, 2027 ◌ if neither party expresses an intention not to renew the agreement before the expiration of the effective period, the agreement shall be renewed for another two (2) years under the same terms and conditions ● Termination Provisions & Penalties ◌ Either party may terminate this agreement by notifying the other party at least six months prior to the scheduled termination date. ● Fees Payable Under the Agreement ◌ JPY800,000 per month for each medical facility (excluding consumption tax). 15 The use and regulatory status of certain products The Company acts in the capacity of a purchasing agent by reselling medical supplies, cosmetic products, and medical equipment to the MCs for use in their clinics. The Company acts as a purchasing agent, for the following cosmetic products: MT Stem Eye Cream, MT Cleansing Gel, MT Contour Lotion, MT Essential Serum, MT Contour B Cream, MT Premium Coffret 2024, MT Facial Foaming Wash, MT Protect UV Gel, MT Condense C Serum, MT Crystal Shot. These products are used to enhance the attractiveness, change the appearance, or maintain the health of the skin or hair of a person and more specifically are used as eye cream, cleanser, toner, serum, moisturizing cream, skincare set face wash, and sunscreen gel. The following table describes the primary use and regulatory status of each of the products that we resell: Available for Sale In Product Category Product Line Primary Use United States Vietnam Japan Cosmetics MT Stem Eye Cream Eye cream P P P Cosmetics MT Cleansing Gel Cleanser P P P Cosmetics MT Contour Lotion Toner P P P Cosmetics MT Essential Serum Serum P P P Cosmetics MT Contour B Cream moisturizing cream P P P Cosmetics MT Premium Coffret 2024 Skincare Set P P P Cosmetics MT Facial Foaming Wash face wash P P P Cosmetics MT Protect UV Gel sunscreen gel P P P Cosmetics MT Condense C Serum Serum P P P Cosmetics MT Crystal Shot Serum P P P The Company acts as a purchasing agent, for the following medical equipment: Embryo Scope, PQX Pico Laser, Nordlys, Coolsculpting ELITE, Stellar M22 IPL, General-purpose video scope for upper gastrointestinal tract GIF-1200N, Sperm motility analyzer with SMAS Biological Microscope, Surgitron DualEMC, Gas Sterilizer CT-540C, Centrifugal Separator H-36α. This equipment is used for the diagnosis, treatment, or prevention of human or animal diseases, or to affect the structure or function of the human or animal body, and more specifically is used for observation of fertilized eggs, skincare treatment, fat removal, observation, imaging, diagnosis, and treatment of the upper gastrointestinal tract, analysis of sperm motility, skin incision and coagulation for surgical use, sterilization of medical supplies vulnerable to high pressure, and separation of aspirated fat. 16 The following table describes the primary use and regulatory status of each of the products that we resell: Available for Sale In Product Category Product Line Primary Use United States* Vietnam** Japan Incubator EmbryoScope Observation of fertilized eggs An incubator for growing fertilized eggs of patients. A camera takes pictures at regular intervals, and the division can be observed like a movie on the monitor. Time-lapse incubator No No P Laser Therapy Machine PQX Pico Laser Skin Care Treatment Picotoning, Picolaser Fractional No No P Laser Therapy Machine Nordlys Skin Care Treatment IPL Light Therapy (Photo Double/Photo Triple) No No P Slimming equipment coolsculpting ELITE fat reduction Fat cooling (slimming) No No P Laser Therapy Machine Stellar M22 IPL Skin Care Treatment IPL Light Therapy (Photo Double Photo Triple) No No P Endoscope General-purpose video scope for upper gastrointestinal tract GIF-1200N Observation, imaging, diagnosis, and treatment of the upper gastrointestinal tract No No P Analyzer Sperm motility analyzer with SMAS Biological Microscope Analysis of sperm motility The system automatically tracks moving sperm and displays and outputs a number of measurement results accurately and quickly, including the number of moving sperm, their movement trajectories, discrimination from immobile sperm, and various types of motility. No No P Electrosurgical instrument Surgitron DualEMC Skin incision and coagulation for surgical use MD-style minimal downtime No No P Sterilizer Gas sterilizer CT-540C Sterilization of medical supplies vulnerable to high pressure Sterilizer, low temperature up to 40°C No No P Centrifugal separator Centrifugal separator H-36 ‹ Separation of aspirated fat condense rich face No No P The Company does not distribute the products above in the US or in Vietnam for the following reasons. * A foreign entity must apply to Food and Drug Administration, “FDA,” with regard to medical equipment in advance in order to import and distribute it in the U.S., and needs to pass examination by the FDA. In addition, the entity must register the equipment after passing examination. However, the Company has not applied yet and has no current intention to apply and accordingly does not distribute any of the above products in the U.S. ** A foreign entity should apply to Ministry of Health, “MOH”, with regard to medical equipment in advance in order to import and distribute it in Vietnam. In particular, the entity should obtain circulation number and declaration of eligibility to trade medical equipment. However, the Company has not applied yet and has no current intention to apply and accordingly does not distribute any of the above products in Vietnam. 17 The Company acts as a purchasing agent, for the following medical supplies: Coolsculpting Elite Reorder Pack, Allergan VISTA, Juv Voluma, Condense Rich Syringe, Juv Volift, MiraDry BioChips, Juv Volbella, VISTA Ultra Plus XC, Juv Volux, Cellution Disposable Kit. The supplies are used for the diagnosis, treatment or prevention of human or animal diseases and are not quasi-drugs, regenerative medicine products or machinery and equipment such as dental materials and hygiene products and more specifically is used for treatment to reduce fat cells and improve body contours, wrinkle-improving injection, medical consumables, hyperhidrosis treatment. The following table describes the primary use and regulatory status of each of the products that we resell: Available for Sale In Product Category Product Line Primary Use United States* Vietnam* Japan coolsculpting coolsculpting Elite reorder pack Body Contouring Equipment Consumables; Reduces fat cells and improves body contours; No No P Botox injection Allergan VISTA Wrinkle-improving injections No No P hyaluronic acid injection Juv Voluma Wrinkle-improving injections No No P fat injections condense rich syringe medical consumables No No P hyaluronic acid injection Juv Volift Wrinkle-improving injections No No P MiraDry MiraDry BioChips hyperhidrosis treatment No No P hyaluronic acid injection Juv Volbella Wrinkle-improving injections No No P hyaluronic acid injection VISTA Ultra Plus XC Wrinkle-improving injections No No P hyaluronic acid injection Juv Volux Wrinkle-improving injections No No P fat injections Cellution Disposable Kit medical consumables No No P The Company does not distribute the products above in the US or in Vietnam for the following reasons. * A foreign entity must register its facility, such as a clinic, drug store, etc., with the Food and Drug Administration, “FDA,” in order to distribute medical supplies in advance in the US. However, the Company has not registered yet and has no current intention to register and accordingly does not distribute any of the above products in the U.S. ** A foreign entity should obtain the pharmaceutical approval in order to distribute medical supply in advance in Vietnam. However, the Company has not obtained approval yet and has no current intention to seek approval and accordingly does not distribute any of the above products in Vietnam. Types of Services Provided Advertising and Marketing Services. The Company, through its subsidiary SBC Marketing, provides advertising and marketing services primarily to the MCs, including but not limited to the promotion of the MCs’ clinics’ services and brand on social media networks. We use various marketing and advertising methods to increase awareness of the “Shonan Beauty Clinic” brand. 18 The marketing services that we provide to the MCs include raising the profile of products and services, creating demand, promoting sales, and building brand image. Our public relations staff has set up target audiences, created promotional materials, and understand patient characteristics and needs, and continue to deliver effective messages to target audiences. Additionally, we utilize social media platforms such as Instagram and YouTube to establish a direct connection with end-users and foster a community. We also believe it is important to measure the effectiveness of marketing advertising and analyze the results. Our public relations staff evaluates the effectiveness of our advertising and makes the necessary adjustments to maximize the MC’s return on investment (ROI) and optimize it on a frequent basis, including but not limited to focusing on the types of services that are popular in each specific geographical location of our franchisee clinics. Staff Recruitment, Training, and Management. The Company, through its subsidiary SBC Medical Consulting and Shobikai Sub, provides staff recruitment and management services to the MCs. The Company maintains a working relationship with SBC Tokyo Medical University, previously known as Ryotokuji University, a medical professional education institution located in Urayasu City of Chiba Prefecture in Japan, which acts as a platform for our recruitment management services. The university provides instruction and professional education to the students of the educational institution, including but not limited to physicians and nurses. We work directly with the university in an effort to recruit students that have completed the applicable education course, to work at one of our franchisee treatment centers. This allows our franchisee treatment centers to reduce recruitment costs by having access to a continuous flow of employee candidates that are newly trained for positions that the franchisee treatment centers need to fill. It also increases employee retention rates at our franchisee treatments centers since we have assisted in the recruitment of an employee that is trained for a specific position at the franchisee treatment center. Our staff recruitment service provides our franchisee clinics with access to a pool of skilled professionals who are well-prepared to make meaningful contributions to their respective healthcare environments. This allows for cost-effective talent acquisition, talent mobility, and enhanced retention rates. We also provide training program services for all of the employees of our franchisee clinics. This training program is designed to provide employees with the knowledge and skills needed in our franchisee clinic operations, and is intended to improve employee competence and overall company productivity. The content of the training program is wide-ranging. First, we provide team-building training to strengthen cooperation and communication skills among employees. By fostering teamwork, we ensure that cooperation among staff members is smooth and efficient store operations are achieved. We also provide training on clinic hygiene standards to help the MCs’ employees understand the importance of clinic hygiene. Adherence to strict standards in clinic hygiene is essential, and we ensure that the MCs’ employees are well-informed to protect the health and safety of the franchisee clinics’ patients. The program also provides training on the basic operating rules and protocols. We train the MCs’ employees to make appropriate decisions in order to provide appropriate services to the patients of the franchisee clinics. In a further effort to improve the work environment and promote respect for employees, we also provide sexual harassment training services. We emphasize the importance of creating a safe working environment for all staff. Customer Management. The Company, through its subsidiary Medical Payment, provides payment management services to the MCs. These services include but are not limited to the use of payment tools at the point of sale for the MC’s collection of payment from customers of the franchisee clinics. 19 Additionally, we earn revenue through our points services, which involves managing the customer rewards program offered to customers of the franchisee clinics. The customer rewards program gives customers points for their birthday, certain referrals, and purchasing products or services at the franchisee clinic locations. The customers also receive additional loyalty benefits in connection with their accumulated points once they reach a certain number of visits to our franchisee clinics or reach certain spending thresholds, as further described below. The three tiers of the customer points ranking system are silver, gold, and diamond. The silver tier rank is the lowest tier rank and does not require a specific number of visits or spending amount to obtain. Silver tier rank customers receive 5,000 points on their birthday, 1% of the total spending amount back in points if the payment method for clinic services is cashless, 3% of the total spending amount back in points if the payment method for clinic services is in cash or through a medical loan, and 0% of the total spending amount back in points if the payment method for clinic services is entirely through medical insurance. The gold tier rank is achieved when the customer visits the franchisee clinics more than 6 times or spends more than 500,000 yen in a two-year period. Gold tier rank customers receive 10,000 points on their birthday, 2% of the total spending amount back in points if the payment method for clinic services is cashless, 4% of the total spending amount back in points if the payment method for clinic services is in cash or through a medical loan, and 0% of the total spending amount back in points if the payment method for clinic services is entirely through medical insurance. The diamond tier rank is achieved when the customer visits the franchisee clinics more than 8 times or spends more than 1,000,000 yen in a two-year period. Diamond tier rank customers receive 15,000 points on their birthday, 3% of the total spending amount back in points if the payment method for clinic services is cashless, 6% of the total spending amount back in points if the payment method for clinic services is in cash or through a medical loan, and 0% of the total spending amount back in points if the payment method for clinic services is entirely through medical insurance. The customers may use the earned points for discounts on select services offered by our franchisee clinics, and each point may be used for a discount amount equal to 1 yen. The customer’s points expire if the customer does not make any additional qualified purchase at a participating clinic within a year. Accordingly, at the time that a customer’s points expire, the Company earns 1 yen for each customer point that expires. Employee Services. The Company, through its subsidiary Liesta, provides employee management services to the MCs, including assistance with the location and securement of rental housing in Japan for employees of the MCs as well as facility rentals in Japan for the MCs. Construction and Design. The Company, through its subsidiary SBC Sealane, provides construction and design management services to the MCs, by coordinating engagement with our preferred general contractors for the clinic construction and design, as well as overseeing the process. Medical Equipment and Supplies. The Company acts in the capacity of a purchasing agent by supplying medical devices, medical equipment (including through leases of such equipment), implants, injection materials, other medical consumables, as well as skin care and beauty products that we resell to the MCs for use in their clinics. Licensure of Intellectual Property and Technologies. The Company licenses the use of patent-pending and non-patented intellectual property, including but not limited to medical technologies, trademark, trade names, and brand use, to the MCs. Each of the clinics owned by the MCs licenses the use of our brand name, “Shonan Beauty Clinic”, as well as the right to use the name “SBC Medical Group”. We have also granted the MCs the right to use the know-how of the clinic operations, offer the procedures designated by us, conduct business activities under our brand name, and utilize our specialized technologies for procedures. We license the use of our highly standardized operational procedures, developed through years of industry experience and accumulated know-how, to the MCs. Our specialized technologies for procedures enhance the safety and efficiency of these cosmetic surgery procedures and include, but are not limited to, puncture devices for buried double eyelid procedures, simplified buried method surgical equipment, proprietary surgical sutures, silicone bags for breast augmentation simulations, and microscopic hair volume evaluation method for the treatment of androgenetic alopecia. Additionally, we license the use of patent-pending and non-patented safety management methods to the MCs for procedures such as full-incision double eyelid surgery, lateral canthoplasty, brow lift procedures, cheek sagging prevention methods, hair removal safety management methods, tattoo removal treatments, and hyperhidrosis procedures. 20 The Company licenses the use of simulation technology to the MCs aimed at enhancing the skills, standardization, and education of professional staff that are providing medical services at the MCs’ clinics, and licenses the use of such technologies to the MCs. By utilizing our collection of medical cases and artificial intelligence, we employ technologies such as virtual reality, rendering, computing, 5G/6G, and Web3.0 to create simulators for the services that the MCs’ treatment centers provide. For example, SBC AI Eye is the industry’s first double AI simulation service. The highly accurate double AI simulation service has been achieved by learning from actual case data of franchisee’s clinic, which totals 600,000 double layer cases, using an AI model based on the most advanced AI technology, GAN (adversarial generative network). This service enables a 10-step simulation of double layer width on “your own face”, whereas double layer surgery has generally been studied using photographs of other people’s cases. These new technologies offer benefits to our franchisee treatment centers, such as efficient education, knowledge sharing, improved procedural accuracy, proactive support, and remote operations. Through simulation technology, medical professionals can simulate various scenarios and anticipate potential complications, enabling them to develop proactive strategies and responses. We believe this improves the level of patient safety and care at our franchisee clinics. The integration of advanced technologies, such as 5G/6G, allows for remote operations and consultations, enabling medical experts at our franchisee clinics to provide guidance and perform procedures from a distance, expanding access to specialized care and expertise. Supplementary information regarding other business activities and service overview diagram Subsidiaries under our group operate businesses not only our core medical business services. Corporations whose sales account for less than 1% of the group are omitted. Our revenues Franchising Revenue The Company generates franchising revenue (royalty income) by licensing its intellectual properties, including but not limited to the Company’s brand name (“Shonan Beauty Clinic”), trade name, and trademarks, as a franchisor pursuant to franchise agreements with certain MCs (the “MC”) in Japan. Prior to April 2023, royalty income was based on a percentage of sales and recognized at the time when the related sales occur; since April 2023, it is based on a fixed amount to each clinic of the MCs; since September 2023, it is based on a fixed amount to each MC and a fixed amount to each clinic of the MCs and recognized over time as services are rendered. Starting in April 2025, the Company plans to revise its fee model for newly opened clinics by reducing fees in the first year to better reflect the lower service utilization during the initial period, before transitioning to a performance-based structure thereafter. This change aims to create a more sustainable long-term revenue model while aligning fees with the actual operations of newly opened clinics. Procurement Services Revenue The Company generates procurement services revenue by purchasing primarily advertising services and medical materials from qualified vendors on behalf of MCs to maintain brand quality consistency. Procurement services revenue is recognized at the point in time upon the delivery of products or over time as services are performed. Occasionally, the Company receives vendor discounts on certain large purchases. It recognizes revenue based on actual payments and will return the over-collection resulting from such discounts to MCs. Management Services Revenue The Company provides loyalty program management services, labor supporting services, function supporting services, and management consulting services to MC. 21 Loyalty program management services The Company awards loyalty points on behalf of MCs to MCs’ customers, who earn loyalty points from each qualified purchase made at the loyalty program participating clinics of MCs, in exchange for a handling fee. The revenue is based on a percentage of the related payment amount made by MCs’ customers and is recognized when the loyalty points are awarded. At the time loyalty points are awarded, a MC pays the Company cash in an amount equivalent to the awarded loyalty points, which is recorded as advances from customers. When a MC’s customers redeem the loyalty points, the Company returns the cash back to the MC in an amount equivalent to the redeemed loyalty points. The awarded loyalty points expire if a MC’s customer does not make any additional qualified purchase at a participating clinic within a year. The Company accumulates and tracks the points on behalf of MCs until the loyalty points expire, at which time the Company recognizes an amount equivalent to the expired loyalty points as revenue, which is normally not significant. The Company also awards certain points to MCs’ customers on behalf of MC for free in order to increase the volume of MCs’ sales, from which the Company earns other types of revenues, such as royalty income. When a MC’s customers redeem such points, the Company reimburses MC in an amount equivalent to the used free points and records it as a reduction of the revenue recognized. The Company is an agent in the management of loyalty programs, and as a result, revenues are recognized net of the cost of redemptions. Labor supporting services The Company generates revenue by dispatching staff to MCs to provide a range of services, primarily including clinic operation, IT, and administrative services, among which, clinic operation service has been fully terminated since October 2024. The Company recognizes the revenue over the time when services are rendered. Function supporting services The revenue is derived from providing functional supporting services to MCs, such as accounting and human resources services. The Company recognizes the revenue over the time when services are rendered. Management consulting services The Company generates revenue by providing consulting services to MCs in relation to business operations of cosmetic dermatology. The Company recognizes the revenue over the time when services are rendered. Rental Services Revenue The Company generates rental income from operating leases and sales-type leases, which is accounted for under ASC Topic 842. Operating lease revenue is generally recognized on straight-line basis over the terms of the lease agreements and sales-type leases revenue is generally recognized on the lease commitment date. Other Revenues The Company generates other miscellaneous revenues such as accommodation services income, medicine dispensed sales revenue, brokerage services revenue, construction services revenue, pilot training services revenue, interest income, etc. These revenues are recognized when the Company satisfies performance obligations. 22 Revenues generated from these different revenue streams by the Company consist of the following: For the Years Ended December 31, 2024 2023 Franchising Revenue $ 61,033,032 $ 42,103,380 Procurement Revenue 54,814,399 53,186,662 Management Services Revenue 53,113,155 72,282,549 Rental Services Revenue 16,141,714 7,336,768 Other Revenues 20,313,242 18,633,064 Total Revenues $ 205,415,542 $ 193,542,423 Our Strengths Brand. Our group’s brand name “Shonan Beauty Clinic” has been developed for over 20 years in the medical industry on the basis of safe and reliable medical services that are primarily cosmetic in nature. We maintain high standards for quality control and customer service in both our directly owned and operated clinic, as well as our franchisee clinics in order to continue to build upon this foundation. In addition, some of the doctors that provide services at our franchisee clinics also publish medical related articles and participate in conferences in Japan and overseas. We believe that this cohesive approach and consistent quality of service promotes global recognition of our brand name. Comprehensive Medical Services. The Company’s directly owned and franchisee clinics provide a variety of medical treatments to meet all of the clinics’ patients’ needs. Both the Company and the MC franchisees focus on building long-term relationships with patients, and customer satisfaction rate ranks highly among Japanese beauty medical service providers. According to an internal report from our MCs’ franchisee clinics, the franchisee clinics have an average repeat customer rate of over 71%, and a total of over 6.0 million customers globally during 2024. Accordingly, we have been able to continue to provide a high level of management services to the MCs while benefiting from the increasing number of clinics. Technology. The Company focuses on developing and licensing simulation technology aimed at enhancing the skills, standardization, and education of professional doctors that are providing medical services at our franchisee clinics. By utilizing our collection of medical cases and artificial intelligence, we employ technologies such as virtual reality, rendering, computing, 5G/6G, and Web3.0 to create simulators for the services that our treatment centers provide. These simulators offer benefits to our treatment centers, such as efficient education, knowledge sharing, improved procedural accuracy, proactive support, and remote operations. Through simulation technology, medical professionals can simulate various scenarios and anticipate potential complications, enabling them to develop proactive strategies and responses. We believe this improves the level of patient safety and care at our franchisee clinics. Our goal is to achieve standardized medical techniques through the development of these technological advancements. The integration of advanced technologies, such as 5G/6G, allows for remote operations and consultations, enabling medical experts to provide guidance and perform procedures from a distance, expanding access to specialized care and expertise. Management Services. The management services that we provide to our franchisee clinics, through our subsidiaries, include but are not limited to advertising and marketing needs across various platforms (such as social media networks), staff management (such as recruitment and training), booking reservations for customers, assistance with franchisee employee housing rental, facility rentals, construction and design, medical equipment procurement ( resale ), the provision of cosmetic products to franchisees for resale at the franchise locations ( resale ), licensure of the use of patent-pending and non-patented medical technologies, trademark and brand use, IT software solutions for remote medical consultations, and payment tools for franchisee customers. We believe that our advertising and marketing services (including but not limited to promotion on social media networks) help create effective campaigns that promote our franchisee clinic services and attract a wider audience of customers. We also believe that our maintenance and operation of the booking and reservation process for customers ensures a seamless user experience when booking services at our franchisee clinic locations. These services provide valuable guidance and expertise to our franchisee clinics, helping them optimize their operations, improve patient experience, and enhance overall performance. We believe this to be a crucial component of fostering our franchisees’ growth and success. 23 Internal Processes and Protocols. To promote high standards of quality and service, we have implemented internal processes and protocols. These measures include ongoing training and education programs for our employees and the employees of our franchisee clinics, continuous monitoring of treatment outcomes, and adherence to industry guidelines and regulations. By upholding these standards, we aim to maintain and enhance our franchisees’ reputation as a trusted provider of cosmetic medical services. Our Growth Strategies Pursue New Clinic Development. We have pursued a disciplined new clinic growth strategy, having expanded our concept and franchisee model across varying clinic sizes and geographies. We plan to leverage our expertise in opening new clinics and our success in the Japan market to fill in existing markets and expand into new geographies with the same careful planning as we have demonstrated in the past. We will continue to utilize our existing strategy of exploring opportunities for directly owned and operated clinics (including but not limited to merger and acquisition transactions) as well as additional franchisee clinics. See also our real estate strategy under “Site Development and Expansion — Site Selection Process.” We believe that our revenue will increase if we are able to increase the number of franchisee clinics that we provide management services to, since we would be providing our services to additional locations. We believe that we have the potential to increase global recognition of our brand. However, we cannot predict the time period over which we can achieve any level of franchisee clinic growth or whether we will achieve this level of growth at all. Our ability to achieve new franchisee clinic growth is impacted by a number of risks and uncertainties beyond our control, including those described in “Part I, Item 1A. Risk Factors”. Deliver Consistent Comparable Franchisee Clinic Sales Growth. We believe we will be able to generate comparable franchisee clinic growth by growing our customer base through increased brand awareness, consistent delivery of quality surgical and non-surgical medical services by our clinic and our franchisee clinics, acquiring and developing cutting edge medical services to be licensed to our franchisee clinics, and franchisee clinic renovations. We will continue to manage our franchisee clinics and pricing as part of our overall strategy to increase the number of customers and the average amount spent by customers. We continue to explore initiatives to increase skin care product sales, enhance the services offered by our clinic and our franchisee clinics, and improve our appointment booking process. Our franchisee client rewards program, which has been rolled out across the entire franchisee clinic base in Japan, tracks customers’ spending and awards customers with points based upon such spending (1 point for each 1 yen spent). The rewards program also gives customers points for their birthday and certain referrals. The customers also receive additional loyalty benefits in connection with their accumulated points once they reach a certain number of visits to our franchisee clinics (tiers for a total of 6 visits and 8 visits in 2 years) or reach certain spending thresholds (tiers for a total of 500,000 yen spent and 1,000,000 yen spent in 2 years). The customers may use the earned points for discounts on select services offered by our franchisee clinics. Increase Profitability. During our expansion, we have invested in our infrastructure and personnel, which we believe positions us to continue to scale our business operations. As we continue to grow, we expect to drive higher profitability at the corporate level by leveraging our existing support infrastructure, as we believe that as the number of the franchisee clinics that we provide management services to grows, our general and administrative costs over several years will increase at a slower rate than our revenues. Heighten Brand Awareness. We intend to continue to pursue targeted local and global marketing efforts and plan to increase our brand awareness (including but not limited to advertising on social media platforms). We intend to continue to promote limited time discounts on services provided by the franchisee clinics through our advertising services to build customer loyalty and brand awareness. The number of patients that undergo cosmetic procedures at our franchisee clinics and patient growth trajectory have been a key indicator of our success and brand awareness. In 2021, our franchisee clinic patient base reached 3.0 million individuals. This figure increased further in 2024, reaching approximately 3.9 million users. This growth reflects the growing demand for cosmetic surgery procedures and the confidence that patients have in our brand and services. 24 Procedure and Product Development. We intend to continue to collect and analyze extensive medical data, develop innovative procedures and products, and obtain intellectual property rights to new products and procedure methodologies relating to skin care and the medical services provided by our franchisee clinics. These assets are then provided to our franchisees. We intend to continue to offer guidance and technical training to our franchisee clinics’ employees with respect to these new products and procedure methodologies in order to stay at the forefront of medical advancements. Site Development and Expansion Site Selection Process We consider franchisee clinic site selection to be critical to our success. As part of our strategic site selection process, our team receives potential site locations from networks of local real estate brokers, which are then reviewed by our development and senior management teams. This review includes site visits, key deal terms, and analyses of the estimated profitability of clinics at the proposed properties for our franchisee clinics. Our current real estate strategy focuses on high-traffic markets with a diverse population and above-average household income. In site selection, we also consider factors such as visibility, traffic patterns, accessibility, parking, and competition when considering approval of a location for a franchisee clinic. We also utilize site analytics tools for demographic analysis and data collection for both existing and new market areas, which we believe allows us to further understand the market area (including but not limited to the types of services desired by the local residents) and set clear market development strategies. Our existing framework and experienced management team allow us to efficiently manage the opening of new franchisee clinics on behalf of the MCs in desired locations and penetrate markets in both suburban and urban areas. Expansion Strategy and Market Share The strong market share presence of our franchisee clinics in the Japanese cosmetic surgery industry reflects the success of our brand and customer satisfaction. With our cutting-edge technology, the MC’s skilled medical professionals, and the comprehensive range of services offered at our franchisee clinics, we have established our brand as a trusted and preferred choice among patients seeking cosmetic enhancements. We plan to pursue a two-pronged expansion strategy by opening new clinics in both new and existing markets (directly and through our franchisee partners). We believe this expansion will be crucial to executing our growth strategy, as well as building awareness of “Shonan Beauty Clinic” as a global brand and provider of surgical and non-surgical medical services and skin care products. Expansion into new markets occurs in parallel with ongoing growth in existing markets, with the goal of maintaining a pipeline of top-tier development opportunities. Upon selecting a new market, we typically manage the opening of one or two clinics to prove concept viability in that market. We have a remote management system whereby our operations team can monitor clinics in real-time from our headquarters to maintain operational quality in new markets. When selecting sites, we look to replicate the site attributes, trade area quality, and co-tenant mix of our most successful clinics. We frequently reevaluate our market area development plan (targeted areas and pacing for development) and our site selection strategy within those targeted areas. Clinic Design Franchisee clinic design is handled by our in-house development team on behalf of the MCs in conjunction with outsourced vendor relationships. Our franchisee clinics’ sizes currently average approximately 357 square feet. Our average customer capacity per franchisee clinic varies greatly depending upon the services being provided at the time. Our franchisee clinic layout evokes a relaxing experience characterized by an efficient use of staff and patient space as well as modern furniture. Construction of a new franchisee clinic takes approximately 6 months. We oversee and coordinate engagement with our preferred general contractors on behalf of the MCs for the franchisee clinic construction process. On average, our franchisee clinics opened during fiscal year 2024 required a cash build-out cost of approximately $333,000 per clinic, net of landlord tenant improvement allowances ; however, this amount could be materially higher or lower depending on the utilization of union labor, market, clinic size, and condition of the premises upon landlord delivery. The franchisee MCs are responsible for paying for the build-out cost of the respective franchisee location. 25 Human Capital Management As of the date of this Annual Report, we had approximately 863 employees globally, a majority of which are located in Japan, Singapore, Vietnam, and the United States. As of the date of this Annual Report, there were no unions represented within our employee base. We anticipate that we will continue to expand our workforce as our company grows. We believe that empowered employees make a difference in our ability to execute our strategy. As such, we strive to provide an inclusive, rewarding and engaging environment for employees to develop professionally and contribute to our success. Competition Management Service Competition. With respect to our management services, we do not face significant competition from third parties because all of our management service revenue is derived from our relationship with the MCs, which are related parties. Clinic and Brand Competition Our franchisee clinics face significant competition from a variety of locally owned beauty clinics and Japanese chain beauty clinics offering both cosmetic medical services, as well as cosmetic products. Major competitors of our franchisee clinics including those in Japan but also in the global cosmetic surgery market such as Aesthetic Medispa, Alma Lasers, B. Braun SE, Cynosure Aesthetics, Evolus, Inc., Galderma S.A., Genesis Biosystems, Inc., Inmode Ltd., IRIDEX Corporation, Lumenis Be Ltd., Revance Therapeutics, Inc., Sientra, Inc., Sinclair Pharma Limited, Stryker Corporation, and Surgery Partners. To further strengthen our competitive position in the international market, we acquired a Singapore-based cosmetic surgery group in November 2024. Our clinics in Vietnam and our related party’s clinic in the US are still in the early stages of development in our efforts to penetrate global competition. However, we believe that our franchisee clinics, clinics in Singapore, a clinic in Vietnam and a clinic in the US compete primarily based on service quality, patient experience, ambience, location, convenience, value perception, and price. The competition continues to intensify as competitors to our clinic in Vietnam and Singapore and our franchisee clinics increase the breadth and depth of their cosmetic medical service and cosmetic product offerings, and open new clinics. A decrease in the revenue of the MCs’ franchisee clinics as a result of such increased competition would directly result in a reduction of the Company’s revenue since we receive substantial revenue from the MCs as part of our compensation for management services. We investigate the brand image and concept of competitors to our clinic and our franchisee clinics from the viewpoint of brand and awareness. It is important to understand the franchisee clinic’s impact on its patients because each competitor offers unique characteristics and value. Also, famous chain clinics and locally popular clinics can be a competitive factor. In terms of pricing strategies, we compare pricing strategies from competitors to our clinic and our franchisee clinics, such as price ranges, extent of services provided, and discount campaigns. Because prices have a significant impact on consumer choice, we understand price competition with competitors and consider our own pricing strategy when we set the guidelines for the pricing of services for our franchisee clinics and our clinics in Vietnam and Singapore. However, it is important to strike a balance, because customers value quality and service as well as price. In terms of quality and service, we evaluate the quality of service provided by and the working experience of our franchisee clinics’ competitors’ employees. Because patients want high quality service and highly experienced staff members (such as doctors and nurses), the aim is to understand the quality provided by competitors and to find the point of differentiation of the company. We use review sites and word-of-mouth information to gather patient opinions and understand the potential for improvement of our franchised brand. 26 In terms of the number of clinics and development, we evaluate our regional competitiveness by comparing the number of clinics and the regions in which the franchisee clinics’ competitors operate. We track franchisee clinics’ competitors’ plans to open new clinics and their expansion strategies to understand the status of competition in the market. This provides us with useful information to consider when determining franchisee clinic growth opportunities. In terms of customer satisfaction and feedback, we analyze patient satisfaction surveys and feedback from the patients of our clinics in Vietnam and Singapore and the franchisee clinics as part of our management services to the MCs. The goal is to understand the patient’s assessment and find ways to improve our franchised brand. We compare the patient experience at the franchisee clinics with that of our competitors and consider differentiation strategies and service improvement measures in order to preserve our franchised brand integrity. Considering the above points of view, we analyze competitors to understand our strengths and competitive challenges, and conduct strategic decision making. By comparing the competitors to our franchisee clinics and our clinics in Vietnam and Singapore, we are determining the direction to improve the competitiveness of our franchise in the market. Business Trends In the cosmetic medical service and product industry, patient preferences and needs are very important. Service trends and patient interests can change. For example, there is a growing demand for non-invasive cosmetic services. The key to success is for our clinics in Vietnam and Singapore and the franchisee clinics to offer cosmetic services and products tailored to patient’s needs and preferences. The success of the MCs’ franchisee clinics would directly impact our success since we receive substantial revenue from the MCs as part of our compensation for management services. The cosmetic medical industry is highly dependent on general economic conditions. During economic boom times, patient discretionary income tends to increase and demand for cosmetic medical services and products tends to increase. In particular, due to inflation, costs and wages are on an upward trend. In the event of rapid inflation, there is a risk of deterioration in business performance, such as inability to pass on higher purchase costs and other costs to price. To date, inflationary pressures have not materially impacted our operations. On the other hand, during economic downturns, demand may fall due to economic uncertainty and the impact of spending cuts, especially since many of the cosmetic medical services our franchisee clinics and our clinic are elective. Depending on economic conditions and individual circumstances, patient discretionary spending priorities may change, and some patients may place a higher priority on obtaining cosmetic services and products and actively allocate their budget accordingly. Other patients may be more likely to refrain from buying elective cosmetic services and products to save money. These trends have a significant impact on the demand for our franchisee clinics’ cosmetic services and products. A decrease in the revenue of the MCs’ franchisee clinics as a result of such increased economic conditions would directly result in a reduction of the Company’s revenue since we receive substantial revenue from the MCs as part of our compensation for management services. Demographic trends, such as changes in population age structure, family structure, and lifestyle, are also important factors. For example, younger and middle age generations may be more willing to undergo elective cosmetic procedures and purchase cosmetic products. Older generations, on the other hand, may be more likely to be apprehensive about undergoing elective cosmetic procedures. Competitive presence is an important factor in the cosmetic clinic industry. The presence of competitors in the same category or an increase in new entrants can increase patient choices and diversify demand. Differentiation and uniqueness from competitors are required, especially in high income geographical locations. These factors also directly or indirectly affect consumer confidence. Patients choose beauty clinics they trust based on economic and competitive conditions. Newly opened clinics, especially in new geographical locations, also tend to have an initial revenue peak, known as the honeymoon period, followed by a decline. 27 While these factors influence the success of the beauty clinic industry, it is important to understand trends and customer needs across the industry, and to develop flexible strategies and appropriate measures for preserving our brand integrity. Focusing on improving clinic quality, service, and patient experience are required to maintain our franchised brand. Suppliers As of December 31, 2024, we had a large and diverse network of suppliers, providing us with a diverse selection of medical equipment, supplies and medical consumables. We facilitate the sale of medical equipment, supplies and medical consumables to the MCs as part of our management services. Our suppliers fall into five key categories: medical devices, medical equipment, implants, injection materials and other medical consumables. We have a system for selecting reliable and quality suppliers, with a selection and review process based on qualification of the business and/or products, pricing, reputation, service quality, delivery schedule and product offerings. We maintain multiple suppliers for key categories of purchases to ensure continuity and quality of supply. Payment terms with the majority of our suppliers are on open account. Certain suppliers grant us credit periods ranging from 20 to 60 days, although we generally pay on delivery. We have not previously encountered any major problems in sourcing despite not having long-term contracts with our suppliers, nor did we encounter any business disruption due to supply shortages or delays. In any event, we believe any shortage or delay in the supply of implants, injection materials and medical consumables will not have any material impact on us as we are able to switch to other suppliers with comparable quality and prices. If these third parties experience shutdowns or continued business disruptions, our ability to conduct our business and facilitate the sale of medical equipment, supplies and medical consumables to the MCs in the manner and on the timelines presently planned could be materially and negatively impacted, including but not limited to delays in our supply chain which could delay or otherwise impact our business. A decrease in the revenue of the MCs’ franchisee clinics as a result of supply chain delays and a decrease in the volume of purchases of medical equipment, supplies and medical consumables by the MCs would directly result in a reduction of the Company’s revenue. Our customers The majority of the customers of our directly owned and operated clinics, as well as our franchisee clinics, are individuals aged between 20 and 40. 28 The Company generates more than 90% of its revenue from provision of management services to the MCs pursuant to the franchisor-franchisee agreements and/or service agreements. For the Years Ended December 31, Revenues from related parties 2024 2023 Medical Corporation Shobikai $ 53,862,520 $ 56,554,316 Medical Corporation Kowakai 46,756,189 45,115,149 Medical Corporation Nasukai 46,355,437 45,893,461 Medical Corporation Aikeikai 17,997,072 21,521,302 Medical Corporation Jukeikai 5,666,907 4,518,846 Medical Corporation Ritz Cosmetic Surgery 7,435,446 2,603,405 Japan Medical & Beauty Inc. 39,620 488,023 Hariver Inc. 19,810 21,740 SBC Inc., previously known as SBC China Inc. 2,512 467 Public Utility Foundation SBC Foundation for Medical Promotion 107 387 General Incorporated Association SBC 801 569 SBC Tokyo Medical University, previously known as Ryotokuji University 45,286 231,191 SBC Shonan Osteopathic Clinic Inc. 56,740 69,227 Yoshiyuki Aikawa 98,445 67,516 Mizuho Yamashita — 19,214 Amulet Inc. — 3,587 AI Med Inc. 787 556,397 SBC Irvine MC 1,204,107 1,298,539 Medical Corporation Association Furinkai 11,708,183 2,923,608 Medical Corporation Association Junikai 3,923,228 851,105 General Incorporated Association Taiseikai 692 — Total $ 195,173,889 $ 182,738,049 Misappropriations of Funds In January 2024, before the issuance of the Company’s consolidated financial statements as of December 31, 2023 and for the year then ended, in connection with a routine tax examination of SBC Medical Group Co., Ltd.’s income tax returns, the Japanese tax authority discovered misappropriations of SBC Medical Group Co., Ltd. funds by a former manager of general affairs and legal department of L’Ange Cosmetique Co., Ltd., which is a subsidiary of SBC Medical Group Co., Ltd. (the “former manager”), who received kickbacks from multiple vendors of SBC Japan (collectively with the former manager, the “participants”) possibly beginning as early as 2012 until the misappropriations were discovered. The Japanese tax authority, who has the authority to access bank deposit information of companies and individuals under investigation, uncovered this misconduct during their examination of such deposits. The former manager was suspended immediately upon the discovery and was terminated effective February 23, 2024. SBC Medical Group Co., Ltd. has commenced a criminal complaint in Tokyo against the participants. Shortly after this discovery, SBC Medical Group Co., Ltd. engaged independent legal counsel and forensic consultants to investigate the misappropriations. The investigation, which was completed in March 2024, revealed that the participants had misappropriated approximately JPY632 million ($5.6 million), including consumption tax, from SBC Medical Group Co., Ltd., of which the former director received approximately JPY335 million ($3.0 million), between April 2016 and the discovery of the misappropriations in January 2024. The amount misappropriated prior to April 2016 could not be accurately determined because certain data for the period prior to April 2016 was unavailable, SBC Medical Group Co., Ltd. does not expect such amount to be material based on current estimates. 29 SBC Medical Group Co., Ltd. found no evidence that any other employee of SBC Medical Group Co., Ltd. was aware of, or colluded in, the misappropriations of SBC Medical Group Co., Ltd. funds or that there was any unlawful activity apart from that associated with the participants’ misappropriations of SBC Medical Group Co., Ltd. funds. The misappropriated amounts, excluding the consumption tax, representing advertising services purchased on behalf of a related-party MC, were originally included in the revenues reported on a net basis. After discovery of the misappropriations, the amounts were reported as a misappropriation loss. For the year ended December 31, 2023, the Company recorded a misappropriation loss of $ 409,030 . Remediation Plan Immediately upon learning of the misappropriation of funds, SBC Medical Group Co., Ltd. engaged independent legal counsel and forensic consultants to investigate the misappropriations. As stated above in this Annual Report, based on its internal investigation, SBC Medical Group Co., Ltd. found no evidence that any other employee of SBC Medical Group Co., Ltd. was aware of, or colluded in, the misappropriations of Company funds or that there was any unlawful activity apart from that associated with the participants’ misappropriations of Company funds. Based on the results of the investigation, management identified the following material weaknesses: 1. Control Environment. SBC Medical Group Co., Ltd. did not maintain an effective control environment that fully emphasized the establishment of adherence to effective internal controls over financial reporting throughout SBC Medical Group Co., Ltd.’s management. SBC Medical Group Co., Ltd. did not give sufficient consideration to the risk of senior management override of internal controls. SBC Medical Group Co., Ltd. had not ensured that certain personnel were adequately trained to properly execute critical internal controls. 2. Control Activities. SBC Medical Group Co., Ltd. did not effectively implement or maintain control activities, such as ensuring a sufficient functioning of the mechanism of reconciliation of invoices to contracts and multi-level approvals of contracts, invoices and payments. SBC Medical Group Co., Ltd. did not maintain sufficient segregation of duties with respect to certain activities and did not maintain adequate monitoring and oversight for those activities. 3. Risk Assessment . SBC Medical Group Co., Ltd. did not have an effective risk assessment process and the related documentation. 4. Information and Communication. SBC Medical Group Co., Ltd. did not adequately communicate to all employees of the organization information regarding the importance of internal controls over financial reporting and employees’ duties and responsibilities, including segregation of duties. 5. Monitoring Activities . SBC Medical Group Co., Ltd. did not maintain effective monitoring controls related to the evaluation and testing of its internal controls over financial reporting. 30 Management has implemented, or is in the process of implementing, the following changes to the Company’s internal control systems and procedures: ● We will clarify the organization structure and employee positions promoting (i) segregation of duties, (ii) monitoring and oversight, (iii) reconciliation of invoices to contracts and (iv) multi-level approvals of contracts, invoices and payments. ● We will communicate to all employees of the organization information regarding the importance of internal controls and employees’ duties and responsibilities, including segregation of duties. ● We have initiated a project led by Head of Internal Control and Internal Audit Office, and aided by outside consultants, to fully document its processes to serve as the basis for activities during 2024 to assess its fraud risks and evaluate and test its internal controls over financial reporting. ● We are progressing with a project, led by our Head of Internal Control and Internal Audit Office, to design, implement, and document internal controls to address risks related to financial reporting. This year, our activities are focused on “laying the foundation to complete our response to key financial reporting risks by the end of 2025,” and we are making progress as planned. The former manager was suspended immediately upon the discovery and was terminated effective February 23, 2024. Subsequently, SBC Medical Group Co., Ltd. filed a complaint, which was accepted by the police on February 25, 2025. Meanwhile, SBC Medical Group Co., Ltd. has initiated a search for a new manager of general affairs and legal department and hired an attorney(JP)-qualified manager in February 2025. In order to improve the overall level of competence in the accounting department, the Company is hiring personnel with accounting experience at listed companies and personnel with CPA(JP). Management focused on building internal controls in 2024. From 2025 onwards, we will test and monitor the operational effectiveness of these controls and, if necessary, take additional corrective actions to address any deficiencies. The Company believes the remediation measures described above will strengthen its internal control over financial reporting and remediate the material weaknesses identified. Government Regulation and Environmental Matters In General The Company and the MCs are subject to extensive and varied federal, state, and local government regulations globally, including regulations relating, among others, to public and occupational health and safety, product labeling, healthcare, the environment, sanitation, and fire prevention. We operate our clinic, and the MCs operate the franchisee clinics, in accordance with standards and procedures designed to comply with applicable codes and regulations. However, an inability to obtain or retain health department or other licenses by us or the MCs would adversely affect our operations. Although the Company and the MCs have not experienced, and do not anticipate, any significant difficulties, delays or failures in obtaining required licenses, permits or approvals, any such problem could delay or prevent the opening of, or adversely impact the viability of, a particular clinic or group of clinics. Additionally, difficulties, delays or failure to retain or renew licenses, permits or approvals, or increased compliance costs due to changed regulations, by us or the MCs, could adversely affect operations at our clinic and the MCs’ franchisee clinics. A decrease in the revenue of the MCs’ franchisee clinics as a result of such difficulties, delays, or failure would directly result in a reduction of the Company’s revenue since we receive substantial revenue from the MCs as part of our compensation for management services. 31 The Company and the MCs are subject to federal, state and local environmental laws and regulations globally concerning waste disposal, pollution, protection of the environment, and the presence, discharge, storage, handling, release and disposal of, or exposure to, hazardous or toxic substances (“environmental laws”). These environmental laws can provide for significant fines and penalties for non-compliance and liabilities for remediation, sometimes without regard to whether the owner or operator of the property knew of, or was responsible for, the release or presence of the hazardous or toxic substances. Third parties may also make claims against owners or operators of properties for personal injuries and property damage associated with releases of, or actual or alleged exposure to, such substances. We are not aware of any environmental laws that will materially affect our earnings or competitive position, or result in material capital expenditures relating to our clinic or our franchisee clinics. However, we cannot predict what environmental laws will be enacted in the future, how existing or future environmental laws will be administered, interpreted or enforced, or the amount of future expenditures that we may need to make to comply with, or to satisfy claims relating to, environmental laws. It is possible that the Company and the MCs will become subject to environmental liabilities, and any such liabilities could materially affect our business, financial condition or results of operations. We are also subject to laws and regulations globally relating to information security, privacy, cashless payments, gift cards and consumer credit, protection and fraud, and any failure or perceived failure to comply with these laws could harm our reputation or lead to litigation, which could adversely affect our business, financial condition or results of operations. Furthermore, we are subject to import laws and tariffs globally which could impact our ability to source and secure medical products, other supplies and equipment necessary to supply our clinic and franchisee clinics. In addition, as part of managing the development and construction of franchisee clinics for the MCs, we must ensure that the applicable zoning, land use and environmental regulations in the applicable jurisdiction are being complied with. The process of obtaining regulatory approvals and the compliance with appropriate federal, state, local and foreign statutes and regulations require the expenditure of substantial time and financial resources. Because of the breadth of these laws and the narrowness of available statutory and regulatory exemptions, it is possible that some of our business activities now and in the future could be subject to challenge under one or more of these laws. If our operations are found to be in violation of any of the federal and state laws described above or any other governmental regulations that apply to us, we may be subject to significant penalties, including criminal and significant civil monetary penalties, damages, fines, imprisonment, exclusion of products from reimbursement under government healthcare programs, integrity oversight and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our results of operations. To the extent that any of our cosmetic products are sold in a foreign country, we may be subject to similar foreign laws and regulations, which may include, for instance, applicable post-marketing requirements, including safety surveillance, anti-fraud and abuse laws and implementation of corporate compliance programs and reporting of payments or transfers of value to healthcare professionals. As our business continues to expand in the U.S. and other jurisdictions, and as laws and regulations continue to be passed and their interpretations continue to evolve in numerous jurisdictions, additional laws and regulations may become relevant to us. Japan Laws and Regulations Personal Information Protection In Japan, the Act on the Protection of Personal Information (the “APPI”) and its related guidelines impose various requirements on businesses, including us, that use databases containing personal information. Under the APPI, the Company and the MCs are required to lawfully use personal information we have obtained within the purpose of use we have specified and taken appropriate measures to maintain the security of such personal information. The Company and the MCs are also restricted from providing the personal information of a person (the “principal”) to third parties without the consent of the principal. The APPI also includes regulations relating to the handling of sensitive personal data and anonymous personal data and the transfer of personal information to foreign countries. A Personal Information Handling Business Operator (as defined below) shall not transfer a person’s personal data to third parties, including its affiliated entities without the prior consent of the principal unless an exception applies (Article 27, Paragraph 1 of the APPI). 32 A “Personal Information Handling Business Operator” is defined as a person (including a judicial person and excluding any administrative organizations) providing a personal information database for use in business (Article 16, Paragraph 2). The Company’s business collects personal information from customers, thereby subjecting the Company to the provisions applicable to the Personal Information Handling Business Operator. Under the APPI, the prior consent of the principal to a transfer of such person’s personal data (including Sensitive Information (as defined below)) is not required if the transfer: (a) is specifically required or authorized by any laws or regulation; (b) is necessary for protecting the life, health, or property of an individual and consent of the principal is difficult to obtain; (c) is necessary for improving public health and sanitation, or promoting the sound upbringing of children, and the consent of the principal is difficult to obtain; or (d) is made in a case where there is a need to cooperate in regard to a central government organization or a local government, or a person entrusted by them performing affairs prescribed by laws and regulations, and when there is a possibility that obtaining the principal’s consent would interfere with the performance of the said affairs. Furthermore, the Personal Information Handling Business Operator shall, unless an exception listed above applies, not acquire Sensitive Information (such as personal information relating to physical or mental disabilities, medical records, and medical and pharmacological treatment) without obtaining prior consent from the principal (Article 2, Paragraph 3 and Article 20, Paragraph 2 of the APPI). The MCs gather personal information from customers through questionnaires and other methodologies in connection with the provision of medical services. Some of the information that the MCs collect could fall under the category of sensitive personal data under the APPI. In addition, the MCs gather personal information including diagnosis records, which is understood to typically fall under the Sensitive Information. Therefore, the MCs are required to obtain consent from the customers prior to the transfer of their information. When storing personal information, it is necessary to manage it safely so that it will not be leaked or the database breached. For the safe management, the APPI requires the Personal Information Handling Business Operator to establish an information security system. It includes establishment of the fundamental rule of personal information management, appointment of personnel responsible for personal information management, provisions of regular training courses on privacy and security breach, and physical security control. A failure by the MCs to comply with the APPI may harm our franchised brand and directly result in a reduction of the Company’s revenue, since we receive substantial revenue from the MCs as part of our compensation for management services. Regulations Governing our Franchises Japan has antitrust laws that protect consumers and regulate how companies operate their businesses. Among the various Japanese antitrust laws, the seminal antitrust law is the Act on Prohibition of Private Monopolization and Maintenance of Fair Trade (Act No. 54 of 1947, as amended) (which we refer to as the “Antimonopoly Act”). The Antimonopoly Act prohibits certain activities that inappropriately induce or mislead persons into entering into a business relationship with us through our granting of seemingly preferable trade terms and conditions that could create false impressions in relation to other franchisors we compete with. The Japan Fair Trade Commission (which we refer to as the “JFTC”) enforces the Antimonopoly Act and other Japanese antitrust laws. The JFTC issued the “Guidelines Concerning the Franchise System Under the Antimonopoly Act” on April 24, 2002 (last amended on June 23, 2011) (which we refer to as the “Guidelines”), under which the JFTC suggests that, prior to entering into a franchise relationship, a franchisor should adequately disclose and explain material trade terms to a potential franchisee in order to prevent any misunderstanding of the material trade terms, and to prevent such potential franchisee from being misled or improperly induced into entering into such franchise relationship. Material trade terms include terms relating to the following: ● the supply of products after the party becomes a franchisee (such as a system for recommending suppliers); 33 ● guidance, procedures, frequency, and cost to the franchisee relating to the business activities of the franchise; ● nature and amount of payments to be collected when the party joins the franchise, whether the payments are refundable or may be returned, and the conditions for refunding or returning the payments; ● royalties that the franchisee pays to the franchisor for use of trademarks and trade names and for guidance relating to management procedures, including the amount of, procedure for calculating, and the time and method of payment, of royalties; ● loans the franchisor extends to the franchisee, including the interest rate and the mechanism and conditions of settlement; ● compensation for any losses the business incurs, including the details of such compensation and whether there is management support from the franchisor in the event of a decline in business; ● terms of the franchise agreement and the conditions and procedures for renewing or terminating the franchise agreement, including early termination prior to the expiration of its term; and ● restrictions with respect to the franchisor or other franchisees of the franchise setting up an identical or similar business near the proposed business of the potential party to join the franchise, including whether there are any plans to set up additional businesses and the details of such plans. In addition, when a franchisor markets its franchise, in the event such franchisor provides a prospective franchisee with an estimate of the revenue or profit that could possibly be generated upon becoming a franchisee, such estimated revenue or profit must be based on a reasonable method of calculation and established facts, such as the results of an existing franchise operating in a similar environment. The franchisor is required to present to the prospective franchisee such methods and facts. If the JFTC finds any activities that violate the Antimonopoly Act, including any “deceptive customer inducement”, then the JFTC may order the offending franchisor to cease and desist from engaging in such unlawful activities, delete any applicable unlawful clauses from the franchise contract, or carry out any other measures necessary to eliminate such unlawful activities. In the event the JFTC suspects any violation of the Antimonopoly Act or alleges that we have misled or wrongly induced any of our franchisees based upon any particular trade terms, we could be exposed to risks, including governmental action against us. Regulations Governing Medical Care and Services The MCs provide services strictly in accordance with the medical-related laws and regulations of the Medical Care Act (Law No. 205) adopted on July 30, 1948, as amended. The Medical Care Act defines rights and obligations regarding medical treatment, advertisement, authority, license, treatment of information, safety and security for patients, doctors and other individuals and organizations engaged in medical activities. The purpose of the Medical Care Act is to protect the health of the nation by safeguarding the interests of medical care recipients and ensuring a system that efficiently delivers high quality and well-suited medical care, by means of providing for the necessary particulars to support well-suited choices about medical care by the recipients thereof, to ensure the safety of medical care, concerning the establishment and management of hospitals, clinics, and birthing centers, and to develop such facilities and promote the sharing of functions and cooperation between medical institutions. The MCs also comply with other laws such as the Medical Practitioners’ Act, Dental Practitioners Act, Radiology Technician Act, Clinical Trials Act, Industrial Safety and Health Act when providing relevant services. A failure by the MCs to comply with the Medical Care Act may harm our franchised brand and directly result in a reduction of the Company’s revenue, since we receive substantial revenue from the MCs as part of our compensation for management services. 34 Regulations Governing our Recruiting License In November 2022, we obtained a recruiting agency license (which we refer to as a “Recruiting License”) from the Ministry of Health, Labor and Welfare of Japan under the under the Act for Securing the Proper Operation of Worker Dispatching Undertakings and Improved Working Conditions for Dispatched Workers (which we refer to as the “Dispatch Act”). We are required to obtain the Recruiting License because we assist with the placement of staff and employee training at the MCs’ franchisee clinics. Regulations Governing our Use of Certain Substances The MCs are required to comply with the Poisonous and Deleterious Substances Control Act (Act No. 303 of December 28, 1950, as amended) of Japan. The purpose of this Act is to provide for the necessary control of poisonous and deleterious substances from the standpoint of health and hygiene and regulates the use of deleterious substances. The aforementioned regulations apply to the MCs’ franchisee clinics’ handling of such substances in Japan. A failure by the MCs to comply with the Poisonous and Deleterious Substances Control Act may harm our franchised brand and directly result in a reduction of the Company’s revenue, since we receive substantial revenue from the MCs as part of our compensation for management services. Regulations on Intellectual Property In Japan, patents are protected by the Patent Act and the Utility Model Act of Japan (Act No. 123 of 1959 as amended). Designs are protected by the Design Act of Japan (Act No. 125 of 1959 as amended), and trademarks by the Trademark Act (Act No. 127 of 1959 as amended). Copyrights are protected by the Copyrights Act (Act No. 48 of 1970 as amended). Trade secrets are protected by the Unfair Competition Prevention Act (Act No. 47 of 1993 as amended). The aforementioned regulations apply to our intellectual property rights in Japan, and accordingly we are subject to complying with such regulations. Japanese Employment and 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 in Japan 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. Our distributors and suppliers also may be affected by higher minimum wage and benefit standards, which could result in higher costs of goods and services supplied to us. We may also be subject to lawsuits from our employees, Labor Standards Inspection Office, or others alleging violations of federal and state laws regarding workplace and employment matters, discrimination and similar matters. 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). We believe that the terms and conditions of our lease agreements are consistent with these laws and are valid and enforceable as provided for in these agreements. 35 Regulations regarding Maintenance of Websites and E-commerce The Act on Special Provisions to the Civil Code Concerning Electronic Consumer Contracts and Electronic Acceptance Notice (Act No. 95 of June 29, 2001, as amended) and the Act on Specified Commercial Transactions (Act No. 57 of June 4, 1976, as amended) regulate sales of goods through e-commerce within Japan. For example, under these acts, we as a seller must explicitly show prices of products, timing and method of payment, timing of delivery, conditions for return of goods, our name and contact information, and name of representative person, among others. We comply with these regulations. Regulations regarding Product Quality and Customer Protection We are subject to laws and regulations, as well as pending legislative and regulatory proposals, regarding product quality and customer protection, which could affect us in jurisdictions in which we sell our products. In Japan, the Product Liability Act (Act No.85 of July 1, 1994, as amended) and Consumer Contract Act (Act No. 61 of May 12, 2000, as amended) mainly regulate the product quality and customer protection. The Product Liability Act sets forth the liabilities of a manufacturer, processor, or importer for damages caused by defects in a product. A seller who was not involved in the manufacturing, processing, or import of a product could still be liable under this act if its name, trade name, or trademark, etc. was indicated on the product as the manufacturer, processor, or importer, such indications on the product might mislead others into believing that the seller was the manufacturer, processor, or importer, or such indications on the product might be recognized by others as those of the substantial manufacturer, processor, or importer. Liability under this act can be imposed even if the manufacturer, processor, or importer (and the said seller) was not negligent. The Consumer Contract Act invalidates certain provisions in contracts with consumers, such as exemption of compensation for damages to consumers and restrictions of termination by consumers due to the seller’s breach of contract. We comply with these regulations. Vietnam Laws and Regulations Regulations regarding the Environment We are required to comply with the Environmental Protection Law No. 72/2020/QH14 adopted by the National Assembly on November 17, 2020 (as amended from time to time), which regulates environmental protection activities, including the rights, duties, and responsibilities of authorities, organizations, residential communities, households, and individuals involved in environmental protection activities. Specifically, it establishes certain regulations regarding the protection of the environment in medical activities and the control of the effects of environmental pollution on human health. Regulations regarding Labor and Health We are required to comply with several labor-related standards prescribed by the local laws and regulations. The principal statute is the Labor Code No. 45/2019/QH14 adopted by the National Assembly on November 20, 2019 (as amended from time to time), which provides for labor standards, the rights, duties, and responsibilities of employees, employers, employees’ representative organizations at establishment, and employers’ representative organizations in labor-management relations, other relations directly related to labor-management relations, as well as state control over labor. Law on Occupational Safety and Hygiene The Law on Occupational Safety and Hygiene No. 84/2015/QH13 adopted by the National Assembly on June 25, 2015 (as amended from time to time) regulates measures to ensure occupational safety and hygiene, policies and compensation for victims of occupational accidents and diseases, responsibilities and rights of organizations and individuals regarding occupational safety and hygiene activities, and state control over occupational safety and hygiene. 36 The Law on Social Insurance No. 58/2014/QH13 adopted by the National Assembly on November 20, 2014 (as amended from time to time) regulates mandatory social insurance benefits and policies, the rights and responsibilities of employees and employers, other institutions, organizations, and individuals involved in social insurance, representative organizations of employees, representative organizations of employers, social insurance authorities, social insurance funds, social insurance implementation procedures, and state administration of social insurance. We will comply with the new Law on Social Insurance No. 41/2024/QH15, which will take effect from July 1, 2025. The Law on Health Insurance No. 25/2008/QH12 adopted by the National Assembly on November 14, 2008 (as amended from time to time) regulates mandatory health insurance system and policies regarding health insurance, health insurance funds, and the rights and responsibilities of parties involved in health insurance, including enrollees, premium rates, health insurance premium sharing and payment methods, health insurance cards, health insurance beneficiaries, medical care for insured persons, and the payment of medical expenses. We will also comply with the Law on Amendment to the Law on Health Insurance No. 51/2024/QH15, which will take effect from July 1, 2025. Regulations regarding Business Activities We are required to comply with several regulations regarding investments and company-related activities such as (a) the Investment Law No. 61/2020/QH14 adopted by the National Assembly on June 17, 2020 (as amended from time to time) providing regulations on business investment activities in Vietnam and business investment activities from Vietnam to foreign countries and (b) the Law on Enterprises No. 59/2020/QH14 adopted by the National Assembly on June 17, 2020 (as amended from time to time) regulating the formation, management, reorganization, dissolution and related activities of companies consisting of limited liability companies, joint stock companies, partnership companies and private companies, and groups of companies. Since our beauty clinic service is considered as a commercial activity in general, we are also required to comply with the Commercial Law No. 36/2005/QH11 adopted by the National Assembly on June 14, 2005 (as amended from time to time). This law applies to commercial activities (including the sale and purchase of goods, provision of services, investment, commercial promotion and other commercial activities) in the territory of Vietnam. In Vietnam, (a) massage services (comprising of the use of physical therapies for massage or manual therapies to improve human health) and (b) plastic surgery services (comprising of using medical techniques to perform surgery for the purpose of alternation of shape or appearance of body parts) are deemed to be “sensitive” services and therefore must comply with Decree No. 96/2016/ND-CP adopted by the Government on July 1, 2016 regarding security and order conditions for a number of conditional business sectors. Regulations regarding Medical Treatment We are also subject to the Law on Medical Examination and Treatment No. 15/2023/QH15 adopted by the National Assembly on January 9, 2023 (as amended from time to time), which defines the rights and obligations of patients, physicians, and clinics in relation to matters such as technical expertise in health diagnosis and treatment, health diagnosis and treatment provided by traditional medicine and by a combination of traditional and modern medicine, humanitarian or non-profit health diagnosis and treatment, transfer of technical expertise, the application of new technologies and methods and clinical trials, errors of technical expertise in medicine, operating assumptions, as well as the mobilization and dispatch of resources to be used for medical examination and treatment in the event of natural disasters, catastrophes, Group A infectious diseases, and emergency situations. Regulations regarding Liability In principle, our relationship with customers is a civil transaction and therefore governed by the Civil Code No. 91/2015/QH13 adopted by the National Assembly on November 24, 2015 (as amended from time to time). This fundamental code specifies the legal status and legal standards for the conduct of natural and juridical persons, as well as the rights and obligations of natural and juridical persons in their civil relations. 37 In addition, we are subject to the Law on Product and Goods Quality No. 05/2007/QH12 adopted by the National Assembly on November 21, 2007 (as amended from time to time), which is a specialized legislation regulating the product liability of manufacturers and traders (i.e., importers, exporters, sellers, service suppliers). Under this law, enterprises engaging in manufacturing and/or trading products are required to provide customers with accurate information on products, recover and remedy defective products, and compensate for losses due to defective products. We are also subject to the Law on Protection of Consumers’ Rights No. 19/2023/QH15 adopted by the National Assembly on June 20, 2023 (as amended from time to time), which provides for principles and policies for protecting consumers’ rights, the rights and obligations of consumers, traders’ responsibility to consumers, consumer right protection activities by agencies and organizations, settlement of disputes between consumers and traders, as well as state management of protection of consumers’ rights. Regulations regarding Firefighting and Fire Prevention The Law on Firefighting and Fire Prevention No. 27/2001/QH10 adopted by the National Assembly on June 29, 2001 (as amended from time to time) regulates fire prevention, firefighting, human rescue, property rescue, assurance of operating conditions, as well as the rights, obligations, and responsibilities of relevant agencies, organizations, households, and individuals in fire and rescue operations. We will comply with the new Law on Fire and Rescue No. 55/2024/QH15, which will take effect from July 1, 2025. United States Laws and Regulations Regulations Governing Disabilities Act Federal and state environmental regulations have not had a material effect on our operations to date, but more stringent and varied requirements of local governmental bodies with respect to zoning, land use and environmental factors could delay or even prevent construction and increase development costs for new franchisee clinics. SBC Irvine MC is required to comply with the accessibility standards mandated by the U.S. Americans with Disabilities Act with respect to the CA Clinic in the United States, which generally prohibits discrimination in accommodation or employment based on disability. SBC Irvine MC may in the future have to modify clinics, for example, by adding access ramps or redesigning certain architectural fixtures, to provide service to or make reasonable accommodations for disabled persons. While these expenses could be material, SBC Irvine MC’s current expectation is that any such actions will not require them to expend substantial funds. A failure by SBC Irvine MC to comply with the U.S. Americans with Disabilities Act may harm our franchised brand and directly result in a reduction of the Company’s revenue, since we receive revenue from SBC Irvine MC as part of our compensation for operational services that we provide to SBC Irvine MC. Regulations Governing Labor Further, we are subject to the U.S. Fair Labor Standards Act, the U.S. Immigration Reform and Control Act of 1986, the Occupational Safety and Health Act and various other federal and state laws governing similar matters including minimum wages, overtime, workplace safety and other working conditions. A portion of our personnel in the United States 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. Our distributors and suppliers also may be affected by higher minimum wage and benefit standards, which could result in higher costs of goods and services supplied to us. We may also be subject to lawsuits from our employees, the U.S. Equal Employment Opportunity Commission or others alleging violations of federal and state laws regarding workplace and employment matters, discrimination and similar matters. 38 Regulations Governing Healthcare Providers and Information The Company’s and SBC Irvine MC’s current and future arrangements with healthcare providers, third-party payors, customers, and others may expose the Company and SBC Irvine MC to broadly applicable fraud and abuse and other healthcare laws and regulations, which may constrain the business or financial arrangements and relationships through which we research, as well as, sell, market and distribute any product for which we obtain marketing approval. Health Insurance Portability and Accountability Act (“HIPAA”) also imposes, among other things, certain standards and obligations on covered entities including certain healthcare providers, health plans and healthcare clearinghouses, as well as their respective business associates and subcontractors that create, receive, maintain, or transmit individually identifiable health information for or on behalf of a covered entity relating to the privacy, security, transmission and breach reporting of individually identifiable health information. HIPAA imposes strict privacy, security, and breach notification obligations and standards on “covered entities” related to their use and disclosure of individually identifiable health information, defined by HIPAA as Protected Health Information (“PHI”). Covered entities are defined under HIPAA to include healthcare providers that undertake certain electronic transmissions of PHI, such as submitting electronic claims for reimbursement for the treatment of patients. SBC Irvine MC is considered to be a covered entity. HIPAA also applies to Business Associates. HIPAA is generally enforced by the Office for Civil Rights ( the “OCR”) that can bring enforcement actions against companies that violate HIPAA’s privacy, security or breach notification rules and levy significant civil fines and/or require changes to the manner in which PHI is used and disclosed. The U.S. Department of Justice has jurisdiction under HIPAA to bring criminal enforcement actions against covered entities, Business Associates and possibly other entities for fraudulent misuse of PHI and other criminal acts. Further, HIPAA provides state attorneys general authority to file civil actions for damages or injunctions in federal courts to enforce HIPAA and seek attorney’s fees and costs associated with pursuing federal civil actions. If we are in possession of PHI as a business associate or as part of our health plan covered entity and we have an unauthorized use or disclosure of the PHI, we will be required pursuant to the HIPAA breach notification rule, to notify our customer covered entity, impacted individuals, and/or OCR. Several states, including, but not limited to, California, Colorado, Connecticut, Utah and Virginia, have adopted generally applicable and comprehensive privacy laws, although most have an exception for information regulated by HIPAA. These new and developing state laws provide a number of new privacy rights for residents of these states and impose corresponding obligations on organizations doing business in these states. For example, the California Consumer Privacy Act (the “CCPA”) imposes obligations on covered businesses to provide specific disclosures related to a business’ collecting, using, and disclosing personal data and to respond to certain requests from California residents related to their personal data (for example, requests to know of the business’s personal data processing activities, to delete the individual’s personal data, and to opt out of certain personal data disclosures). The CCPA provides for civil penalties and a private right of action for data breaches which may include an award of statutory damages. In addition, the California Privacy Rights Act (“CPRA”), which took substantial effect January 1, 2023 with enforcement scheduled for July 1, 2023, expanded the CCPA. The CPRA, among other things, gives California residents the ability to limit use of certain sensitive personal data, establish restrictions on personal data retention, expand the types of data breaches that are subject to the CCPA’s private right of action, and establish a new California Privacy Protection Agency to implement and enforce the new law. A failure by us or SBC Irvine MC to comply with HIPAA may harm our franchised brand and directly result in a reduction of the Company’s revenue, since we receive revenue from SBC Irvine MC as part of our compensation for operational services that we provide to SBC Irvine MC. For a discussion of the various risks we face from regulation and compliance matters, see “Part I, Item 1A. Risk Factors”. Singapore Laws and Regulations Licensing, Operations, and Compliance We are subject to the Healthcare Services Act 2020 (“ HCSA ”) and the regulations promulgated under it, which governs the licensing, regulation, and operation of private healthcare institutions, including aesthetic clinics. We are required to obtain a license under this legislation to operate our clinics. 39 The Healthcare Services (General) Regulations 2021 also require licensed healthcare service providers to adhere to strict standards of patient care and service (including for the protection of patient privacy), and we must meet the necessary standards of infrastructure, medical equipment, and operational procedures, as well as the maintenance of a safe and hygienic clinical environment. Regulation of Our Doctors In Singapore, the Medical Registration Act 1997 regulates the registration and professional conduct of medical practitioners. This legislation mandates that only doctors who are properly registered as a medical practitioner and holding a valid practicing certificate may perform medical procedures in aesthetic clinics. Under this legislation, any person who wishes to practice medicine or perform medical procedures that involve medical risks, such as injectable treatments (e.g., botulinum toxin and dermal fillers) and laser treatments, must be performed by registered medical practitioners holding a valid practicing certificate. Health Products and Medicines The Health Products Act 2007 (“ HPA ”) governs the regulation of health products (including, inter alia , medical devices and therapeutic products) used in clinical settings, including aesthetic clinics. Under this legislation, we are prohibited from using health products that are not approved by the Health Sciences Authority of Singapore (“ HSA ”), and we are obligated to only use products that have passed the HSA’s evaluation and are registered for clinical use in Singapore. If a product is found to be defective or harmful, this legislation requires us to comply with any product recalls or safety notices issued by the HSA. We are also obligated to report any adverse events or complications related to the use of medical devices and health products in our clinics. The Medicines Act 1975 (“ MA ”) regulates the importation, manufacture, and sale of medicinal products, including drugs, vaccines, and injectable products used in aesthetic treatments in Singapore. Under this legislation, aesthetic clinics are prohibited from using any unapproved or substandard medicines and must ensure that all prescription products are licensed and approved by the HSA. This legislation also covers the distribution of medicines and medicinal products, and aesthetic clinics must ensure that any injectable or medicinal product used in their treatments is legally sourced, licensed, and approved by the HSA for use in Singapore. Advertisements We are subject to strict advertising guidelines for healthcare services issued by the HSA pursuant to the HCSA. Advertising materials, including brochures, websites, and social media content, must comply with ethical advertising standards set by the HSA, and cannot be false, misleading, unsubstantiated, or contain exaggerated claims about medical treatments. We are prohibited from using testimonials or endorsements that violate patient confidentiality, and are required to provide accurate, clear, and truthful information about the services we offer, the potential risks of treatments, and the expected outcomes. The HPA also regulates the advertising of health products, including medical devices and therapeutic products. Under this legislation, we are required to ensure that all advertisements for products such as dermal fillers, botulinum toxin, and lasers are not misleading, do not overstate the efficacy of treatments, and clearly communicate any risks associated with such procedures. The Health Products (Advertisement of Specified Health Products) Regulations 2016 also strictly prohibit the direct advertising of prescription-only medicines to the general public, to ensure that treatments are only administered following proper medical consultation. The MA also imposes restrictions on the advertising of medicinal products, including prescription-based treatments like botulinum toxin, which are commonly used in aesthetic clinics and require oversight by licensed medical professionals. This legislation prohibits false or misleading advertisements and representations of medicinal products. 40 Consumer Protection We are also required to comply with the Consumer Protection (Fair Trading) Act 2003, which regulates the trade practices of businesses, protects consumers from unfair practices which includes, inter alia : (a) misleading or deceiving a consumer, (b) falsifying claims to a consumer, and (c) taking advantage of a consumer who may not be in a position to protect their interests due to not understanding the nature of the transaction, and provide consumers with the right to seek remedies if they have been wronged. If a beauty product is found to be defective or unsafe after purchase, consumers are entitled under this legislation to request a refund, replacement, and/or repair (if applicable). This legislation prohibits practices such as false advertising, misleading statements, or failing to disclose important information about products or services. Product Quality In addition to the HPA and the MA, we are also subject to the Sale of Goods Act 1979, which governs the sale of goods in Singapore, including beauty products sold at aesthetic clinics. This legislation provides a framework for the contractual obligations between buyers and sellers and ensures that products are among other things, safe, of satisfactory quality, and fit for their intended purpose. Personal Data Protection The Personal Data Protection Act 2012 governs, among other things, the collection, use, and protection of personal data in Singapore. As a healthcare provider, we are required to comply with this legislation to safeguard the privacy and confidentiality of our patients’ personal and medical information, including obtaining consent from patients before collecting their personal information, such as contact details, medical histories, and treatment records, implementing strict measures to protect patient data from unauthorized access, loss, or misuse, and facilitating our patients’ right to access their personal data, request corrections, and withdraw consent for the use of their information. This legislation also requires healthcare providers to make reasonable efforts to ensure the accuracy of the personal data collected from the patients as the personal data will likely be used to make a decision that affects the patient. If there are reasons to believe in data breaches that affect a patient’s personal data, the healthcare provider has a duty to assess the severity of said breach. Given the confidentiality of the patients’ medical information, should a breach be severe enough to result in significant harm to the patient, or is of a significant scale, there will be a duty to notify the Personal Data Protection Commission. Employment and Workplace Safety We are subject to the Employment Act 1968, the key legislation governing employment practices in Singapore. This legislation outlines the minimum terms and conditions of employment, covering aspects such as wages (including when and how they should be paid), working hours and overtime, rest days, and employee benefits. It ensures the protection of employees’ rights and provides a framework for fair and lawful employment practices. We are also subject to the Employment of Foreign Manpower Act 1990, which governs the employment of foreign workers in Singapore. This legislation regulates the employment pass system and ensures that businesses that hire foreign workers comply with specific requirements related to work passes, employment conditions, and other related responsibilities. Under this legislation, all foreign employees must hold a valid work pass to work in Singapore and the onus lies on the employer to ensure that the foreign employee is permitted to work in Singapore. The Workplace Safety and Health Act 2006 applies to all businesses in Singapore, including aesthetic clinics. Under this legislation, we are required to adhere to stringent health and safety protocols to protect both our patients and staff, including maintaining work environments that are safe and without risks to health, ensuring proper waste disposal, implementing emergency procedures, and training all staff members in basic health and safety measures, including infection control and proper use of medical equipment. 41 Intellectual Property and Trademarks As of December 31, 2024, the Company and its subsidiaries together had filed a significant number of patent and trademark applications in Japan, as well as a substantial numbers of trademark applications with the International Bureau of the World Intellectual Property Organization. The Company also holds registered patents and trademarks in Japan. Additionally, the only trademarks registered in Singapore are those registered by the Singapore subsidiary acquired in late November. The Company does not have any registered trademarks, domain names, or patents in Vietnam or the United States. Our registered trademarks include, but are not limited to, “SBC”, “Shonan Beauty Clinic”, “SBCLABO”, “Hair Renaissance”, “SBC MEDISPA”, and “ACNEED”, and are further described in the table below. Material Contract with Intellectual Property and Trademarks The Company and the MCs have each entered into a contract with regard to intellectual property as set forth below. The entry dates of these agreements range from September 2017 to May 2021. The term of the agreements is for a period of 9 years. However, if neither the party makes a written request at least 3 months prior to the expiration of the term, the term of these agreements will continue for successive 2 year terms going forward unless terminated by either party. Pursuant to these agreements, the Company grants the MCs a non-exclusive right to use Company’s trademarks, as listed in the agreements for the goods and services offered by the MCs in Japan and the U.S. (including U.S. territories) for the duration of the agreement. Pursuant to the Agreements, the MCs cannot grant a sublicense to a third party without the Company’s written consent. Pursuant to these agreements, the MCs agreed to pay the Company royalties for the license granted, in the form of a monthly fee ranging from 14,000,000 yen (excluding tax) to 53,000,000 yen (excluding tax). However, the parties may change such monthly fee by mutual agreement through consultation. The agreements may be terminated by the Company without notice or demand in certain circumstances as listed out in the agreement, including but not limited to, if a MC has their business license revoked or suspended by regulatory authorities, becomes insolvent or when one of the notes or checks that they have drawn or accepted is dishonored, when a petition for commencement of bankruptcy proceedings, civil rehabilitation proceedings, corporate reorganization proceedings, or special liquidation proceedings has been filed, against or when a MC itself has filed such a petition or when there has been a material breach by a MC of their agreement with the Company. Additionally, either party can terminate the agreements if the other party breaches the agreement and such breach is not corrected within 14 days after written notice. Additionally, the parties can terminate the agreement mid-term by mutual agreement through consultation. Upon termination of an agreement, regardless of the reason for such termination, or if the term of the agreement expires, a MC must immediately cease using the Company’s intellectual property and must destroy all information in its possession regarding the Company’s intellectual property. As a result of these agreements, the Company collects the following royalty fees from each MC. Patent Trademark Total Medical Corporation Shobikai 53,000,000 yen 14,000,000 yen 67,000,000 yen Medical Corporation Kowakai 43,000,000 yen 57,000,000 yen 100,000,000 yen 42 Medical Corporation Nasukai 24,000,000 yen 60,000,000 yen 84,000,000 yen Medical Corporation Aikeikai 13,000,000yen 4,000,000 yen 17,000,000 yen Medical Corporation Jukeikai 700,000 yen 200,000 yen 900,000 yen Medical Corporation Ritz Cosmetic Surgery 2,000,000 yen 3,000,000 yen 5,000,000 yen Total 135,700,000 yen 138,200,000 yen 273,900,000 yen List of Trademarks Jurisdiction Application No./ Office’s Reference No. Registration No. Trademark Reference Translation: Trademark Japan JP2004-113837 4872872 リッツ・メディカルクリニック Ritz Medical Clinic Japan JP2005-118409 4960547 湘南美容外科クリニック Shonan Beauty Surgery Clinic Japan JP2007-068373 5137474 ＳＢＣ SBC Japan JP2007-087297 5154425 根こそぎ脂肪吸引 Thoroughly　liposuction Japan JP2008-006713 5188529 心のプチ整形 Petit Plastic Surgery of the Mind Japan JP2011-018430 5432190 うるおい女神 goddess of (lucky) directions Japan JP2011-027111 5446903 1ＤＡＹリフト 1DAY Lift Japan JP2012-004740 5504628 根こそぎベイザーシェービング法 Thoroughly Vaser Shaving Method Japan JP2012-035980 5532879 六本木レディースクリニック Roppongi Ladies Clinic Japan JP2012-070102 5554735 マルチプラセンタ Multi-placenta Japan JP2013-088725 5665240 マルチゲルＯg（オーガニック） Multi Gel Og (Organic) Japan JP2015-076589 5827834 §ＳＢ∞Ｃ §ＳＢ∞Ｃ Japan JP2015-123949 5862075 アクセル＋ブレーキ療法 Gas pedal + brake therapy Japan JP2016-065374 5922799 VARIO desigin 手術 VARIO desigin surgery Japan JP2016-065380 5922800 サーマアップ Therma up Japan JP2016-108172 5967546 東京リッツ美容クリニック Tokyo Ritz Cosmetic Clinic Japan JP2016-108174 5967547 東京リッツ美容形成外科 Tokyo Ritz Cosmetic Plastic Surgery Japan JP2018-005037 6135218 フォーエバー二重術 Forever Double Surgery Japan JP2018-109281 6246705 ＳＢＣ　ＭＥＤＩＳＰＡ SBC MEDISPA 43 Japan JP2018-123585 6258359 ＳＢＣ SBC Japan JP2019-006775 6219739 Ｈａｉｒ　Ｒｅｎａｉｓｓａｎｃｅ Hair Renaissance Japan JP2019-095442 6316271 レグノクリニック Regno Clinic Japan JP2019-116526 6311044 ＳＢＣ／ＭＥＤＩＳＰＡ SBC/MEDISPA Japan JP2020-007680 6440611 リバスト Rebast Japan JP2020-007681 6440612 週末二重 Weekend Double Surgery Japan JP2020-007682 6440613 腫れずらいスクエア二重 Square bifold surgery with minimal swelling Japan JP2020-007686 6442941 リッチフェイス Rich face Japan JP2020-007689 6440614 湘南二重 Shonan bifid surgery Japan JP2020-007697 6442942 プリマリフト PrimaLift Japan JP2020-007698 6452042 ３D注入豊胸 3D Injection Breast Augmentation Japan JP2020-007699 6442943 プレミアム注入豊胸 Premium Injection Breast Augmentation Japan JP2020-007719 6411821 湘南美容クリニック Shonan Beauty Clinic Japan JP2020-087298 6489169 パシャ助 Pashazo Japan JP2020-106484 6427255 フィナス Finas Japan JP2021-057101 6531256 メディカルサイズダウン Medical Size Down Japan JP2021-057102 6531257 フィナス治療 Finas　Medical Treatment Japan JP2021-057107 6531258 YELLクリニック YELL Clinic Japan JP2021-057108 6531259 湘南美容YELLシリーズ Shonan Beauty YELL Series Japan JP2021-057109 6531260 ベビースキンライト Baby Skin Light Japan JP2021-057110 6571732 シミ取り10 Stain Removal 10 Japan JP2021-057111 6531261 ワンデーリフトアップ One Day Lift Up Japan JP2021-057112 6551007 ピュアグラフト1UP Pure Graft 1UP Japan JP2021-104550 6554074 ミスト脱毛 Mist hair removal Japan JP2022-022482 6753631 湘南美容皮フ科 Shonan Beauty Dermatology Japan JP2022-022483 6611984 メディカルサイズダイエット Medical-size diet Japan JP2022-022488 6668667 Teen二重 Teen double Japan JP2022-067044 6858201 SBCイテウォンビューティークリニック SBC Itaewon Beauty Clinic Japan JP2022-067045 6858202 SBC梨泰院ビューティークリニック SBC Itaewon Beauty Clinic Japan JP2022-076824 6673722 ミストシャワー脱毛 Mist shower hair removal Japan JP2022-135452 6693235 ＡＣＮＥＥＤ ACNEED Japan JP2022-143150 6793985 ＳＢＣ (logo) SBC (logo) Japan JP2022-143151 6735600 湘南美容外科 Shonan Beauty Surgery Japan JP2022-143152 6735601 湘南美容クリニック Shonan Beauty Clinic Japan JP2022-143153 6772456 Ｓｈｏｎａｎ　Ｂｅａｕｔｙ　Ｃｌｉｎｉｃ Shonan Beauty Clinic Japan JP2022-143155 6826211 ＳＢＣ　Ｍｅｄｉｃａｌ　Ｇｒｏｕｐ SBC Medical Group Japan JP2022-143156 6735602 ＳＢＣＬＡＢＯ SBCLABO 44 Japan JP2022-143157 Application Pending ＳＢＣ SBC Japan JP2022-143158 6826212 ＳＢＣメディカルグループ SBC Medical Group Japan JP2022-143161 6711813 ＳＢＣ　ＭＥＤＩＳＰＡ SBC MEDISPA Japan JP2022-143162 6711814 うるおい女神 goddess of (lucky) directions Japan JP2022-143165 6701663 HRタブレット HR Tablet Japan JP2022-143166 6701664 HRアクア HR Aqua Japan JP2022-143167 6701665 HRスプレー HR Spray Japan JP2022-143168 6711815 ギャラ・ドクターライト Gala Dr. Light. Japan JP2022-143169 6711816 スソドライ soot-dry Japan JP2022-143171 6702889 うる艶美髪カクテル Lush and beautiful hair cocktail Japan JP2022-143173 6711817 ジュリエット Juliet Japan JP2022-143179 6711818 スマートシェイプリフト Smart Shape Lift Japan JP2022-143181 6708518 アクネソニック acnesonic Japan JP2022-143184 6708519 脂肪溶解リニア Lipolysis Linear Japan JP2022-143187 6708520 輪郭スッキリQ＋ Contouring Q+ Japan JP2022-143189 6708521 ボディスッキリQ＋ Body Refresh Q+ Japan JP2022-143190 6708522 フォトダブル photo double Japan JP2022-143191 6702890 プラチナカクテル Platinum Cocktail Japan JP2022-143194 6708523 スマートメソセラピー smart mesotherapy Japan JP2022-143196 6708524 リポフラット Lipo flat Japan JP2022-143197 6708525 ジェットメソセラピー Jet Mesotherapy Japan JP2022-143199 6722690 ＳＢＣメディカルグループホールディングス SBC Medical Group Holdings, Inc. Japan JP2022-143200 6722691 ＳＢＣ　Ｍｅｄｉｃａｌ　Ｇｒｏｕｐ　Ｈｏｌｄｉｎｇｓ SBC Medical Group Holdings Japan JP2022-143201 6793624 ＳＢＣ　ＡＲＴＭＡＫＥ　ＳＣＨＯＯＬ SBC ARTMAKE SCHOOL Japan JP2022-147132 6861583 ノンシェーブン non-shaven Japan JP2022-147133 6861584 スマートFUE Smart FUE Japan JP2022-147134 6861585 シークレットシェイブン secret shaven Japan JP2022-147135 6861586 ダブルマトリックス double matrix Japan JP2022-147136 6861587 スマートメソ smart method Japan JP2022-147137 6861588 クイックメソ Quick Meso Japan JP2022-147138 6861589 ジェットメソ jet meso Japan JP2022-147139 6757836 女優注射 Actress Injection Japan JP2022-147140 6829876 クイックコスメティーク Quick Cosmetics Japan JP2022-147141 6702893 ナノメソッドHQ Nano Method HQ Japan JP2022-147142 6711819 SBC MEDISPA ホワイトサプリメント SBC MEDISPA White Supplement Japan JP2022-147143 6702894 ACNEED ACNEED Japan JP2022-147144 6829877 SBC Ｔｅｅｎ二重 SBC Teen Double Japan JP2022-147145 6829878 SBC Ｔｅｅｎ脱毛 SBC Teen Hair Removal Japan JP2022-147146 6711820 SBCハイブリッドセラミック SBC Hybrid Ceramic Japan JP2022-147147 6711821 SBCマウスピース SBC Mouthpiece Japan JP2022-150047 6751859 リバース小顔 Reverse face 45 Japan JP2022-150048 6751860 リバース二重 Reverse double Japan JP2022-150052 6751861 1DAYモデル小顔 1DAY Model Small Face Japan JP2022-150053 6751862 1DAYフル梨泰院 1DAY Full Itaewon Japan JP2022-150054 6751863 1DAYモデル体型 1DAY Model Body Shape Japan JP2022-150056 6751864 1DAYリッチフェイス 1DAY Rich Face Japan JP2022-150060 6774385 Fat Padリフト Fat Pad Lift Japan JP2022-150061 6774386 週末リフト Weekend Lift Japan JP2022-150062 Application Pending 週末2daysスリム Weekend 2days Slim Japan JP2022-150063 Application Pending バービーボディ Barbie Body Japan JP2022-150064 Application Pending 1DAYクマ取り 1DAY dark circles removal Japan JP2022-150065 6774387 エイジングリフト Aging Lift Japan JP2023-038087 6744631 SBC AI SBC AI Japan JP2023-038088 6782966 目袋3脂肪 Eye bag 3 fat Japan JP2023-038089 6782967 ぽろぽろ脱毛 Poroporo Hair Removal Japan JP2023-038090 6782968 リバスト注射 Livestock Injection Japan JP2023-038091 Application Pending 増活 hair growth Japan JP2023-038092 6782969 余髪 extra hair Japan JP2023-038093 Application Pending 玉の肌ダーマペン Jade Skin Dermapen Japan JP2023-038094 Application Pending ワンコイン脱毛 One Coin Hair Removal Japan JP2023-040937 6737348 ＨＡＩＲＳＰＡ HAIRSPA Japan JP2023-073150 6777865 SBC DreamMeeting SBC DreamMeeting Japan JP2023-073151 6777866 DreamMeeting DreamMeeting Japan JP2023-076804 6826221 ＳＢＣ４方向リフト SBC 4-way lift Japan JP2023-080584 6826223 湘南美容 Shonan Aesthetic Japan JP2023-080585 6826224 ＳＢＣ　Ｍｅｄｉｃａｌ　Ｇｒｏｕｐ　Ｈｏｌｄｉｎｇｓ SBC Medical Group Holdings Japan JP2023-080586 Application Pending 湘南美容外科クリニック Shonan Beauty Surgery Clinic Japan JP2023-080587 6826225 ＳＢＣ SBC Japan JP2023-080588 Application Pending 湘南美容外科 Shonan Beauty Surgery Japan JP2023-080589 6826226 ＳＢＣＬＡＢＯ SBCLABO Japan JP2023-080590 6826227 ＳＢＣ　ＭＥＤＩＳＰＡ SBC MEDISPA Japan JP2023-080591 Application Pending 湘南美容クリニック Shonan Beauty Clinic Japan JP2023-080592 Application Pending Ｓｈｏｎａｎ　Ｂｅａｕｔｙ　Ｃｌｉｎｉｃ Shonan Beauty Clinic Japan JP2023-080593 6826228 ＱＣＷ QCW Japan JP2023-080594 6826229 Ｑｕｉｃｋ　ｃｏｓｍｅｔｉｃ　ｄｏｕｂｌｅ Quick cosmetic double Japan JP2023-080595 6826230 Ｓｈｏｎａｎ　Ｂｅａｕｔｙ　Ｃｌｕｂ Shonan Beauty Club Japan JP2023-099091 Application Pending 脂肪吸引注射 Liposuction Injection Japan JP2023-123325 6858214 ＳＢＣ　ＡＲＴ SBC ART 46 Japan JP2023-140581 Application Pending 下垂脂肪 Ptosis Fat Japan JP2023-140582 Application Pending 自然癒着法 Spontaneous Adhesion Japan JP2023-140583 Application Pending 自然癒着二重術 Natural Adhesion Bifid Surgery Japan JP2023-143680 6858240 ＳＢＣ　ＴＩＭＥＬＥＳＳ　Ｃ SBC TIMELESS C Japan JP2024-010669 Application Pending リッツ美容外科 Ritz Cosmetic Surgery Japan JP2024-033024 Application Pending 脂肪細胞ズ(logo) Fat Cells(logo) Japan JP2024-033025 Application Pending 脂肪細胞ズ(logo) Fat Cells (logo) Japan JP2024-033026 Application Pending 脂肪細胞ズ(logo) Fat Cells(logo) Japan JP2024-033027 Application Pending 脂肪細胞ズ Fat Cells Japan JP2024-040264 Application Pending 脂肪抽出注射 Fat Extraction Injection Japan JP2024-040265 Application Pending 脂肪抽出法 Fat extraction Japan JP2024-056347 Application Pending 毛根再生注射 Hair root regeneration injection Japan JP2024-057812 Application Pending 湘南美容 Shonan Aesthetic Japan JP2024-068007 Application Pending 週末豊胸 Weekend Breast Augmentation Japan JP2024-068008 Application Pending ママ豊胸 Mom Breast Augmentation Japan JP2024-069739 Application Pending カスタマイズリフト Customized Lift Japan JP2024-069740 Application Pending カスタマイズヒアル Customized Hyal Japan JP2024-077906 6847737 韓流肌(logo) Hallyu Skin(LOGO) Japan JP2024-077907 6847738 韓流肌 Hallyu Skin Japan JP2024-092611 Application Pending 悪玉M字ホルモン Bad M Hormone Japan JP2024-092612 Application Pending 身長予想シミュレーション Height Projection Simulation Japan JP2024-100228 Application Pending ナチュラル脂肪注射 Natural Fat Injection International registration 1753629 Application Pending ＱＣＷ QCW International registration 1753670 Application Pending Ｑｕｉｃｋ　ｃｏｓｍｅｔｉｃ　ｄｏｕｂｌｅ Quick cosmetic double International registration 1753673 Application Pending ＳＢＣ SBC International registration 1753672 Application Pending ＳＢＣ　Ｍｅｄｉｃａｌ　Ｇｒｏｕｐ　Ｈｏｌｄｉｎｇｓ SBC Medical Group Holdings International registration 1753626 Application Pending ＳＢＣ　ＭＥＤＩＳＰＡ SBC MEDISPA International registration 1753625 Application Pending ＳＢＣＬＡＢＯ SBCLABO International registration 1753627 Application Pending Ｓｈｏｎａｎ　Ｂｅａｕｔｙ　Ｃｌｉｎｉｃ Shonan Beauty Clinic International registration 1753628 Application Pending Ｓｈｏｎａｎ　Ｂｅａｕｔｙ　Ｃｌｕｂ Shonan Beauty Club International registration 1754407 Application Pending 湘南美容 Shonan Aesthetic 47 International registration 1754273 Application Pending 湘南美容クリニック Shonan Beauty Clinic International registration 1754272 Application Pending 湘南美容外科 Shonan Beauty Surgery International registration 1754271 Application Pending 湘南美容外科クリニック Shonan Beauty Surgery Clinic International registration 1754406 Application Pending ＳＢＣ (logo) SBC (logo) Singapore 2017/3591939103Q 40201708950W N/A The Chelsea Clinic Singapore 2017/292151539X 40201618496V N/A Gangnam Laser Clinic Singapore TM/19/05/2849 40201910975V N/A SkinGO! (Singapore) Singapore TM/2021/09/036 40202123160R N/A Bio White Our patent applications, as further described in the table below, include, but are not limited to, specialized technologies for procedures such as puncture devices for buried double eyelid procedures, simplified buried method surgical equipment, proprietary surgical sutures, silicone bags for breast augmentation simulations, and microscopic hair volume evaluation method for the treatment of androgenetic alopecia. Additionally, we have developed patent-pending safety management methods for procedures such as full-incision double eyelid surgery, lateral canthoplasty, brow lift procedures, cheek sagging prevention methods, and hair removal safety management methods. Furthermore, we have established unique safety management methods for tattoo removal treatments and hyperhidrosis procedures. By leveraging these patent-pending technologies, our franchisee clinics enhance the safety and efficiency of these cosmetic surgery procedures. List of Patent Rights Name of Patent right Type Jurisdiction Date of Application Application No. Status Feature and Content Microscope-Based Hair Quantity Evaluation Method Patent Japan 8/25/2023 JP2023-136711 Application Pending Invention of a medical audit system using a microscope and machine learning to observe and analyze hospital procedures Hair Quantity Evaluation Method Patent Japan 8/25/2023 JP2023-136712 Application Pending Machine learning model trained on beauty clinic procedure videos to auto-evaluate correct performance Utilization of Pre-Consultation Educational Videos for AGA Examination Patent Japan 8/25/2023 JP2023-136713 Application Pending Medical auditing system uses machine learning to evaluate procedural correctness in beauty clinics Case Imaging System Patent Japan 8/25/2023 JP2023-136714 Application Pending Medical audit system using image-based machine learning for procedural conformance Treatment Progress History Management System Patent Japan 8/25/2023 JP2023-136715 Application Pending Invention for documenting treatment procedures in beauty clinics using continuous image or video capture, supporting understanding, diagnoses, training of machine learning models, and auditing of procedure compliance. AGA Oral Treatment Drug Patent Japan 8/25/2023 JP2023-136716 Application Pending An invention harnessing machine learning for evaluating procedural accuracy based on video data AGA Topical Treatment Drug Patent Japan 8/25/2023 JP2023-136717 Application Pending Machine Learning-Based Medical Audit System for Evaluating Hospital Procedures AGA Topical Treatment Drug Patent Japan 8/25/2023 JP2023-136718 Application Pending A method that uses deep learning to verify procedural compliance in aesthetic clinics User Burden Reduction Method in Hair Transplant Surgery Patent Japan 8/25/2023 JP2023-136719 Application Pending Patented medical audit system for hair transplant surgery which includes cutting and collection of hair roots, video recording of the procedure, and use of a learning model for audit. User Burden Reduction Method in Hair Transplant Surgery Patent Japan 8/25/2023 JP2023-136720 Application Pending System that captures and analyzes videos of the donor hair shaving process at aesthetic clinics to ensure procedure compliance, and provides a wig to reduce psychological stress. 48 User Burden Reduction Method in Hair Transplant Surgery Patent Japan 8/25/2023 JP2023-136721 Application Pending An invention involving a procedure of hair follicle collection, concealed by remaining hair, integrated with an algorithm for auditing surgical compliance User Positioning Guide Method Patent Japan 8/25/2023 JP2023-136722 Application Pending Surgical Audit System for Hair Transplantation Using Machine Learning Treatment Efficiency and Safety Management Methods Patent Japan 8/25/2023 JP2023-136723 Application Pending AI technology applied to auditing cosmetic clinic procedures for monitoring the appropriateness of specific treatments Treatment Efficiency and Safety Management Methods Patent Japan 8/25/2023 JP2023-136724 Application Pending The present invention is a medical audit system that collects image data, generates a machine learning model for correct hair loss treatment using Botox, and evaluates newly acquired treatment videos using this model to assess the correctness of the procedure. Treatment Efficiency and Safety Management Methods Patent Japan 8/25/2023 JP2023-136725 Application Pending Medical procedures are photographed, features extracted, and using machine learning, models are created to determine conformity of new procedure recordings, suggesting improvements when necessary. Treatment Efficiency and Safety Management Methods Patent Japan 8/25/2023 JP2023-136726 Application Pending Machine Learning Based Audit of Hair Growth Treatments Using DermaPen, Growth Factors and Minoxidil Treatment Efficiency and Safety Management Methods Patent Japan 8/25/2023 JP2023-136727 Application Pending Machine Learning utilization for medical procedure compliance and improvement Management Method for Hair Transplant Cells Patent Japan 8/25/2023 JP2023-136728 Application Pending Invention for assessing medical procedures through machine learning models generated from video imagery Photo Capture Method for Hair Medical Purposes Patent Japan 8/25/2023 JP2023-136729 Application Pending The invention initially involves photographing the user from various angles in a bright room, using the captured images to generate a machine learning model, which evaluates if the treatment procedure is carried out as per the procedure in new images or videos. Hair Growth Composition Patent Japan 8/25/2023 JP2023-136730 Application Pending Invention of a medical auditing system using machine learning to validate procedures from images taken during treatments at beauty clinics Hair Growth Composition Patent Japan 8/25/2023 JP2023-136731 Application Pending An invention for auditing procedural compliance in a medical system using a learning model inclusive of IV drip mixture ratios and their impacts on health Information Processing System, Information Processing Method, and Program Patent Japan 2/24/2023 JP2023-027740 Application Pending Technology capable of verifying the effects of double-eyelid surgery Information Processing System, Information Processing Method, and Program Patent Japan 2/24/2023 JP2023-027741 Application Pending Technology capable of verifying the effects of double-eyelid surgery Safety Management Method for Hair Removal Treatment Patent Japan 8/25/2023 JP2023-136732 Application Pending Invention involves creating a learning model using images of handpiece operation, incorporating relationships between energy hertz number and moving speed along with the overlapping process at the large head, auditing new treatments based on this model. Safety Management Method for Hair Removal Treatment Patent Japan 8/25/2023 JP2023-136733 Application Pending Machine learning model generated from hair removal procedure videos for auditing procedural correctness and preventing hair growth Safety Management Method for Hair Removal Treatment Patent Japan 8/25/2023 JP2023-136734 Application Pending The invention involves capturing hospital procedure activities, identifying procedural issues from the images, using these images as training data for machine learning models, and analyzing new videos with the model to ensure proper procedure adherence. 49 Safety Management Method for Skin Treatment Patent Japan 8/25/2023 JP2023-136735 Application Pending A system that learns surgical procedures from images to generate a model for auditing and preventing omissions in future surgeries Safety Management Method for Skin Treatment Patent Japan 8/25/2023 JP2023-136736 Application Pending A method involving image capturing of hospital procedures, creating a learning model from those images using machine learning algorithms, and auditing new footage based on this model, with feedback provision for quality improvement if required. Safety Management Method for Skin Treatment Patent Japan 8/25/2023 JP2023-136737 Application Pending Invention monitoring procedural operations in hospitals via learning model from activity images, checking correct execution of operations with specific procedures. Safety Management Method for Skin Treatment Patent Japan 8/25/2023 JP2023-136738 Application Pending Procedure for creating a learning model from surgical operation images for surgery evaluation and feedback Safety Management Method for Skin Treatment Patent Japan 8/25/2023 JP2023-136739 Application Pending The invention is an audit system using machine learning algorithms to verify and guide surgical procedures, ensuring that newly acquired procedure videos are following defined procedures. Safety Management Method for Skin Treatment Patent Japan 8/25/2023 JP2023-136740 Application Pending System for auditing hospital procedures through machine learning analysis of captured images Safety Management Method for Skin Treatment Patent Japan 8/25/2023 JP2023-136741 Application Pending Machine learning model generated from recorded procedures to evaluate new treatments for pain and acne Safety Management Method for Ion Introduction Treatment Patent Japan 8/25/2023 JP2023-136742 Application Pending Invention creating machine-learning models from hospital procedure videos for treatment accuracy and quality control Safety Management Method for Ion Introduction Treatment Patent Japan 8/25/2023 JP2023-136743 Application Pending A system for managing, guiding, verifying, and automating needleless therapy procedures, using learning models from existing treatment videos Safety Management Method for Skin Treatment Patent Japan 8/25/2023 JP2023-136744 Application Pending Invention of a medical audit system that uses machine learning to ensure adherence to correct hospital procedures Safety Management Method for Skin Treatment Patent Japan 8/25/2023 JP2023-136745 Application Pending Machine-learning algorithms are used to create a therapeutic protocol for phototherapy procedures, auditing new videos of the procedure for correctness and safety, reducing workload and ensuring effective treatment. Safety Management Method for Skin Treatment Patent Japan 8/25/2023 JP2023-136746 Application Pending Patent for a skin treatment method and process analysis using specific wavelength light and machine learning procedure adherence verification Safety Management Method for Skin Treatment Patent Japan 8/25/2023 JP2023-136747 Application Pending Using Machine Learning for Auditing Beauty Treatment Procedures Safety Management Method for Skin Treatment Patent Japan 8/25/2023 JP2023-136748 Application Pending Machine learning model for quality auditing of ThermaCool procedure Safety Management Method for Skin Treatment Patent Japan 8/25/2023 JP2023-136749 Application Pending Invention of process using machine learning model to analyze hospital procedure images for automatic procedural audit. Safety Management Method for Skin Treatment Patent Japan 8/25/2023 JP2023-136750 Application Pending Invention on creating a learning model using machine learning methods for auditing procedures in beauty clinics, particularly the ‘Thermacool Eye’ procedure, based on sequential image data. 50 Safety Management Method for Skin Treatment Patent Japan 8/25/2023 JP2023-136751 Application Pending A medical audit system for beauty clinics utilizing machine learning for procedure adherence and quality improvement Safety Management Method for Skin Treatment Patent Japan 8/25/2023 JP2023-136752 Application Pending Machine learning based auditing and feedback on beauty clinic procedures by using treatment images and analysis Safety Management Method for Skin Treatment Patent Japan 8/25/2023 JP2023-136753 Application Pending Enlighton’s laser treatment procedure learning model based on hospital images and machine learning for auditing treatment alignment Safety Management Method for Skin Treatment Patent Japan 8/25/2023 JP2023-136754 Application Pending System using machine learning to recognise and audit treatment procedures in clinics Safety Management Method for Tattoo Removal Treatment Patent Japan 8/25/2023 JP2023-136755 Application Pending The invention is a medical audit system that employs machine learning to formulate a hospital action model based on videos of treatment procedures, and verifies the appropriateness of spot size selection and wavelength utilization. Safety Management Method for Hyperhidrosis Treatment Patent Japan 8/25/2023 JP2023-136756 Application Pending A medical audit system using machine learning to analyze MiraDry beauty treatments, alerting deviations from normal procedures and improving from irregularities. Safety Management Method for Skin Treatment Patent Japan 8/25/2023 JP2023-136757 Application Pending An invention of an automated auditing procedure using a machine learning model created from filmed medical procedures, specifically for snoring treatments using a YAG laser Safety Management Method for Skin Treatment Patent Japan 8/25/2023 JP2023-136758 Application Pending Documentation of Device Power Setup, Filming and Light Exposure Procedure with Sterispot Handpiece for Training Model Creation Safety Management Method for Skin Treatment Patent Japan 8/25/2023 JP2023-136759 Application Pending System Produces Learning Model for Medical Procedures from Hospital Images and Audits New Videos for Protocol Adherence Safety Management Method for Skin Treatment Patent Japan 8/25/2023 JP2023-136760 Application Pending Medical Audit System Utilizing Machine Learning for Procedure Adherence Analysis Safety Management Method for Skin Treatment Patent Japan 8/25/2023 JP2023-136761 Application Pending Invention embodying a machine learning model analyzing hospital surgery procedures from video data for adherence verification and progress monitoring Safety Management Method for Skin Treatment Patent Japan 8/25/2023 JP2023-136762 Application Pending Invention records and analyses videos of HIFU shower treatment procedures in hospitals using a deep learning model. Safety Management Method for Skin Treatment Patent Japan 8/25/2023 JP2023-136763 Application Pending Invention proposes the use of machine learning to monitor medical procedures via camera recordings, generating a model from recorded images for safe evaluation, and auditing new video content according to the model Safety Management Method for Skin Treatment Patent Japan 8/25/2023 JP2023-136764 Application Pending Patent for a method in beauty clinics using machine learning to ensure correct procedure during High-Intensity Focused Ultrasound treatment Safety Management Method for Salicylic Acid Facial Peeling Treatment Patent Japan 8/25/2023 JP2023-136765 Application Pending Machine learning used to ensure accuracy and safety in chemical peeling procedures with salicylic acid macrogol Safety Management Method for Salicylic Acid Body Peeling Treatment Patent Japan 8/25/2023 JP2023-136766 Application Pending The invention is a medical audit system that uses machine learning techniques to create a model from surgery images, analyzes new surgical procedures for guideline adherence, and suggests corrective measures for inappropriate procedures, thus improving procedure quality and safety. 51 Safety Management Method for Skin Treatment Using Plant-Based Activated Charcoal and Lactic Acid Patent Japan 8/25/2023 JP2023-136767 Application Pending Invention relating to a learning model for recognition and adherence to correct black peel application procedure Safety Management Method for Skin Treatment Using Plant-Based Activated Charcoal and Lactic Acid Patent Japan 8/25/2023 JP2023-136768 Application Pending A system that records and analyzes medical activities in a hospital using machine learning to detect specific patterns and improve accuracy. Safety Management Method for Skin Treatment Patent Japan 8/25/2023 JP2023-136769 Application Pending Invention of a medical audit system that generates a learning model from images of specific beauty clinic procedures and evaluates new treatments Safety Management Method for Procedures Patent Japan 8/25/2023 JP2023-136770 Application Pending Automated Medical Audit System for Beauty Clinics Safety Management Method for Procedures Patent Japan 8/25/2023 JP2023-136771 Application Pending Machine Learning System Developed to Enhance Quality of Medical Procedures Safety Management Method for Procedures Patent Japan 8/25/2023 JP2023-136772 Application Pending Video analysis method for performance evaluation in beauty clinics using machine learning Safety Management Method for Procedures Patent Japan 8/25/2023 JP2023-136773 Application Pending The system generates a learning model from pre-operative images, trains it using deep learning for ProShock Shape procedures, analyzes real-time videos for correctness, reports any anomalies, and counters the long tail problem using diverse treatment image datasets. Safety Management Method for Procedures Patent Japan 8/25/2023 JP2023-136774 Application Pending Invention of a medical auditing system that uses machine learning to analyze procedural adherence in clinics Safety Management Method for Procedures Patent Japan 8/25/2023 JP2023-136775 Application Pending Procedure for auditing treatments using machine learning models derived from filmed treatment procedures Safety Management Method for Procedures Patent Japan 8/25/2023 JP2023-136776 Application Pending Machine Learning System for Safety and Quality Assurance in Beauty Clinics Safety Management Method for Procedures Patent Japan 8/25/2023 JP2023-136777 Application Pending A procedural audit system for cosmetic treatments using machine learning model based on video footage of procedures Safety Management Method for Procedures Patent Japan 8/25/2023 JP2023-136778 Application Pending System creates a learning model for medical procedures using image recognition, information extraction, and machine learning, and compares new procedures against this model for accuracy and appropriateness. Safety Management Method for Procedures Patent Japan 8/25/2023 JP2023-136779 Application Pending Patent covers a machine learning method to ensure procedural standards in beauty clinics Safety Management Method for Procedures Patent Japan 8/25/2023 JP2023-136780 Application Pending Invention uses machine learning model to analyze images or video frames from hospital actions to deduce correctness of procedures Safety Management Method for Procedures Patent Japan 8/25/2023 JP2023-136781 Application Pending An innovative surgical procedure combining cooling, disinfection, needle insertion, hemostasis, and various other techniques, with automatic auditing and learning models for improving treatment efficiency. Safety Management Method for Procedures Patent Japan 8/25/2023 JP2023-136782 Application Pending Medical auditing system using AI to verify adherence to cosmetic treatment procedures Safety Management Method for Procedures Patent Japan 8/25/2023 JP2023-136783 Application Pending Medical audit system using machine learning for validating skin treatments 52 Safety Management Method for Procedures Patent Japan 8/25/2023 JP2023-136784 Application Pending AI used for learning and verifying adherence to medical procedures in hospitals using collected image data. Safety Management Method for Procedures Patent Japan 8/25/2023 JP2023-136785 Application Pending A medical audit system employing image recognition and machine learning to ensure correct hospital procedures Safety Management Method for Procedures Patent Japan 8/25/2023 JP2023-136786 Application Pending Invention of a Learning Model for Treatment Procedure Recognition and Surveillance in Beauty Clinics Safety Management Method for Procedures Patent Japan 8/25/2023 JP2023-136787 Application Pending The invention documents beauty clinic procedures, especially HIFU treatments, creates a learning model using the recorded data and deep learning, using it for predictive analysis of new video data for real-time treatment auditing. Safety Management Method for Procedures Patent Japan 8/25/2023 JP2023-136788 Application Pending Patent for a machine learning model generated from a three-step procedure, used to audit the adherence of treatment videos to the established procedure Safety Management Method for Procedures Patent Japan 8/25/2023 JP2023-136789 Application Pending A processing device audits beauty clinic procedures by extracting and learning from past treatment videos, evaluating new videos, reporting inaccuracies, and continually updating its learning model for accurate future audits. Evaluation and Effect Measurement Method for Aesthetic Medicine Patent Japan 8/25/2023 JP2023-136790 Application Pending Invention creates a learning model for auditing adherence to procedural steps in skin disease treatments using machine learning Evaluation and Effect Measurement Method for Aesthetic Medicine Patent Japan 8/25/2023 JP2023-136791 Application Pending Beauty clinic procedure involving liver-spot treatment via pulsed needle oscillation being audited through a machine learning model. Evaluation and Effect Measurement Method for Aesthetic Medicine Patent Japan 8/25/2023 JP2023-136792 Application Pending System for recording and analyzing treatment processes using machine learning Evaluation and Effect Measurement Method for Aesthetic Medicine Patent Japan 8/25/2023 JP2023-136793 Application Pending Patent for a medical procedure using botulinum toxin, featuring a machine learning tool which audits the treatment process using filmed visual data Evaluation and Effect Measurement Method for Aesthetic Medicine Patent Japan 8/25/2023 JP2023-136794 Application Pending Medical audit system uses deep learning to analyze and monitor cosmetic clinic procedures Evaluation and Effect Measurement Method for Aesthetic Medicine Patent Japan 8/25/2023 JP2023-136795 Application Pending Invention uses machine learning to evaluate the accuracy of acne treatment procedures in a beauty clinic. Evaluation and Effect Measurement Method for Aesthetic Medicine Patent Japan 8/25/2023 JP2023-136796 Application Pending Machine learning model developed for analyzing fat freezing procedure videos to detect complications Evaluation and Effect Measurement Method for Aesthetic Medicine Patent Japan 8/25/2023 JP2023-136797 Application Pending A three-step procedure at a beauty clinic uses photographic evidence collected during a fat cooling treatment to create a machine learning model that assesses procedure compliance and symptom occurrence. Evaluation and Effect Measurement Method for Aesthetic Medicine Patent Japan 8/25/2023 JP2023-136798 Application Pending Learning model developed from hyaluronic acid injection videos monitors for side effects and provides response instructions Evaluation and Effect Measurement Method for Aesthetic Medicine Patent Japan 8/25/2023 JP2023-136799 Application Pending A medical audit system learns from images of various treatments in hospitals, and uses this learning model to evaluate and update treatment procedures for ailments such as liver spots, red face, and pores, using devices such as VISIA_Evolution. 53 Evaluation and Effect Measurement Method for Aesthetic Medicine Patent Japan 8/25/2023 JP2023-136800 Application Pending Invasive short pulse bipolar high-frequency device utilizes a single-use chip with 25 micro needle electrode pins for facial treatments, with machine learning enhancing auditing of the process. Evaluation and Effect Measurement Method for Aesthetic Medicine Patent Japan 8/25/2023 JP2023-136801 Application Pending Application of Machine Learning in Auditing and Improving RF Microneedling Therapeutic Procedures Evaluation and Effect Measurement Method for Aesthetic Medicine Patent Japan 8/25/2023 JP2023-136802 Application Pending An invention that incorporates a machine learning model for assessing adherence to body contouring procedures in Asian patients using RF and BioEMS devices, coupled with image capture methods such as CT scan or ultrasound, through videos from beauty clinic treatments. Evaluation and Effect Measurement Method for Aesthetic Medicine Patent Japan 8/25/2023 JP2023-136803 Application Pending This invention is a method for deploying a medical audit system using a Radio Frequency (RF) micro needling device to monitor and review treatment procedures. Evaluation and Effect Measurement Method for Aesthetic Medicine Patent Japan 8/25/2023 JP2023-136804 Application Pending Invention for auditing medical procedures using a learning model generated from collected images Evaluation and Effect Measurement Method for Aesthetic Medicine Patent Japan 8/25/2023 JP2023-136805 Application Pending Invention utilizes machine learning to analyze and validate procedure of age spot treatments in beauty clinics Method for Accelerating Recovery of Motor Ability After Anesthesia Patent Japan 8/25/2023 JP2023-136806 Application Pending A staged auditing system utilizing machine learning from past surgical videos to provide guidelines on procedural technique, anesthetic dosage, and post-procedure recovery measures Estimation Method for Recovery Time of Motor Ability Patent Japan 8/25/2023 JP2023-136807 Application Pending Machine learning model using in-hospital images and parameters to estimate anesthetic duration and ensure procedural adherence Estimation Method for Anesthesia Effect Patent Japan 8/25/2023 JP2023-136808 Application Pending Patent for a system capturing and analyzing video footage of treatments in beauty clinics for machine-learning-based auditing of anesthesia administration. Device for Puncturing Buried Double Eyelids Patent Japan 8/25/2023 JP2023-136809 Application Pending Deep learning model for evaluating surgical procedures at beauty clinics Simplified Buried Suture Surgery Apparatus Patent Japan 8/25/2023 JP2023-136810 Application Pending Method and System for Auditing Surgical Procedures through Machine Learning Surgical Thread Patent Japan 8/25/2023 JP2023-136811 Application Pending Medical audit system using machine learning to assess the appropriateness of medical procedures in cosmetic clinics from images Silicone Bag for Breast Augmentation Simulation Patent Japan 8/25/2023 JP2023-136812 Application Pending Invention of a silicone bag for simulating breast augmentation surgery that assists in visualizing post-surgery appearance and monitoring surgical progress using a learning model. Clinic Reservation Reception System Patent Japan 8/25/2023 JP2023-136813 Application Pending Invention for optimizing medical services by matching users with suited physicians using a personalized database Surgery Applicability Determination System Patent Japan 8/25/2023 JP2023-136814 Application Pending A system utilizing a database of medical histories and a machine learning model based on hospital video data to ascertain surgical feasibility and process understanding Surgery Applicability Determination System Patent Japan 8/25/2023 JP2023-136815 Application Pending Automated System for Managing Treatment Intervals Using a Learning Model Information Sharing Fixed System Patent Japan 8/25/2023 JP2023-136816 Application Pending Machine learning method to monitor and analyze hospital procedures through images and video data 54 Safety Management Method for Procedures Patent Japan 8/25/2023 JP2023-136817 Application Pending Invention that tracks and verifies the number of cotton balls used in surgery via image analysis and deep learning algorithms Safety Management Method for Procedures Patent Japan 8/25/2023 JP2023-136818 Application Pending Invention of a Medical Audit System Using Machine Learning for Procedure Verification and Reoperation Decision-Making Safety Management Method for Procedures Patent Japan 8/25/2023 JP2023-136819 Application Pending Method for auditing medical procedures through machine learning from hospital images Safety Management Method for Full Incision Method Double Eyelid Surgery Patent Japan 8/25/2023 JP2023-136820 Application Pending An invention of an auditing system that uses a machine learning model to analyze medical procedures through images, ensuring procedures are carried out correctly without human visual inspection. Safety Management Method for Outer Corner Cutting Surgery Patent Japan 8/25/2023 JP2023-136821 Application Pending Machine learning model generated from past surgical images to automatically audit new surgical videos for correct procedure Safety Management Method for Brow Lift Surgery Patent Japan 8/25/2023 JP2023-136822 Application Pending Invention for a Learning Model to Monitor and Assess Correctness of Beauty Clinic Procedures Using Filmed Footage and Machine Learning Safety Management Method for Procedures Patent Japan 8/25/2023 JP2023-136823 Application Pending Invention uses Machine Learning to Evaluate the Compliance of Procedure Performance Safety Management Method for Procedures Patent Japan 8/25/2023 JP2023-136824 Application Pending A machine learning model based on medical procedure steps for analyzing and verifying procedural adherence in new videos Safety Management Method for Procedures Patent Japan 8/25/2023 JP2023-136825 Application Pending A medical audit system using machine learning to map surgical images to pre-surgical procedures, identify procedures in new surgical images, and verify their sequence against therapeutic procedures Safety Management Method for Procedures Patent Japan 8/25/2023 JP2023-136826 Application Pending Innovation in a Surgical Procedure: Monitoring Compliance through Machine Learning Safety Management Method for Procedures Patent Japan 8/25/2023 JP2023-136827 Application Pending Invention of a learning model using recorded actions from blepharoptosis surgery to analyze new surgical videos Safety Management Method for Procedures Patent Japan 8/25/2023 JP2023-136828 Application Pending Machine Learning Model for Quality Analysis of Epicanthoplasty Procedures Safety Management Method for Procedures Patent Japan 8/25/2023 JP2023-136829 Application Pending A medical audit system for ophthalmological procedures that uses a machine learning model to analyze surgical videos for procedural adherence. Safety Management Method for Procedures Patent Japan 8/25/2023 JP2023-136830 Application Pending System that creates learning model based on surgical images to audit newly recorded surgical procedures and provide detailed surgical records for future medical care Safety Management Method for Procedures Patent Japan 8/25/2023 JP2023-136831 Application Pending Technology that uses surgical videos for machine learning to standardize medical procedures. Safety Management Method for Procedures Patent Japan 8/25/2023 JP2023-136832 Application Pending Machine learning model using Convolutional Neural Network identifies actions in beauty clinic treatment videos to ensure predetermined procedures are being followed. Safety Management Method for Procedures Patent Japan 8/25/2023 JP2023-136833 Application Pending A medical audit system that uses machine learning to analyze image data and ensure procedural compliance in surgical operations 55 Safety Management Method for Procedures Patent Japan 8/25/2023 JP2023-136834 Application Pending A system that uses machine learning to audit and improve surgical procedures in a beauty clinic Safety Management Method for Procedures Patent Japan 8/25/2023 JP2023-136835 Application Pending The medical audit system employs two methods; the first one uses a micropore and a Denver splint, while the second method uses an Orfit and hot water combined with a series of taping procedures Safety Management Method for Procedures Patent Japan 8/25/2023 JP2023-136836 Application Pending Invention of an audit system for capturing and analyzing physician’s procedural steps during nose tip surgery Safety Management Method for Procedures Patent Japan 8/25/2023 JP2023-136837 Application Pending Invention involves a surgical procedure with application of machine learning model trained by deep learning to verify newly acquired images against procedure steps Safety Management Method for Procedures Patent Japan 8/25/2023 JP2023-136838 Application Pending The process involves designing thread placement in surgery, creating a learning model using images, utilizing image recognition technology for feature extraction, and employing the model to analyze the adherence to proper procedures. Safety Management Method for Procedures Patent Japan 8/25/2023 JP2023-136839 Application Pending A method for monitoring medical procedures using machine learning analysis of image data Safety Management Method for Procedures Patent Japan 8/25/2023 JP2023-136840 Application Pending A method of using a machine learning model to monitor the removal and suturing of nasal wing skin in a cosmetic procedure, notifying stakeholders if the process is being improperly performed. Safety Management Method for Procedures Patent Japan 8/25/2023 JP2023-136841 Application Pending Machine learning method for error detection and quality improvement in alar reduction surgeries Safety Management Method for Procedures Patent Japan 8/25/2023 JP2023-136842 Application Pending Invention involves a procedure including creating a design, administering anesthesia, inserting a thread into the puncture site, carrying out hemostasis, auditing number of needles used, erasing the design and protecting the puncture site, all informing the creation of a learning model from hospital images for procedural compliance audit. Safety Management Method for Procedures Patent Japan 8/25/2023 JP2023-136843 Application Pending Invention for a machine-learning algorithm to record, analyze and provide feedback on the correctness of nasal septum extension procedures Safety Management Method for Procedures Patent Japan 8/25/2023 JP2023-136844 Application Pending Invention involves creating learning model from hospital procedure images for auditing accuracy of procedures using machine learning Safety Management Method for Equipment Patent Japan 8/25/2023 JP2023-136845 Application Pending Method for Efficient Management and Utilization of PDS Sheets in Medical Procedures Safety Management Method for Procedures Patent Japan 8/25/2023 JP2023-136846 Application Pending Development of a learning model from image analysis of cosmetic surgery procedure for chin repositioning using prosthetic cartilage Cheek Sag Prevention Method Patent Japan 8/25/2023 JP2023-136847 Application Pending Medical audit system uses machine learning to record procedures, generate learning models, and evaluate new procedures’ appropriateness. Safety Management Method for Procedures Patent Japan 8/25/2023 JP2023-136848 Application Pending Invention of a Monitoring System utilizing Machine Learning to Audit Procedures based on Captured Images 56 Safety Management Method for Procedures Patent Japan 8/25/2023 JP2023-136849 Application Pending Invention related to an auditing system for ensuring adherence to prescribed steps in liposuction surgery to improve healthcare quality Safety Management Method for Procedures Patent Japan 8/25/2023 JP2023-136850 Application Pending This patent describes a minimally invasive surgery procedure for obesity and body contouring, using an 18G perforator and fat suction injections, with the operation filmed and continuously improved through the advancement of machine learning models. Manual compliance monitoring system, manual display guide system, manual compliance record system, and robotics application system for the white face bandage (balance cargo) method. Patent Japan 8/25/2023 JP2023-136851 Application Pending A patent system involving White Faceband (Balance Cargo) method with manual compliance monitoring and recording systems, display guide system, and a robotics application system. Manual compliance monitoring system, manual display guide system, manual compliance record system, and robotics application system for the chin-neck bandage (Lumbic) method. Patent Japan 8/25/2023 JP2023-136852 Application Pending A system for monitoring, guiding, recording compliance, and utilizing robotics for the Ranbick method for Chin Neck Bandages. Manual compliance monitoring system, manual display guide system, manual compliance recording system, and robotics application system for the upper arm S compression method. Patent Japan 8/25/2023 JP2023-136853 Application Pending This is regarding various systems for implementing upper arm S compression, such as manual compliance monitoring, display guidance, recording systems, and robotic application. Abdomen, waist, and hip S Manual compliance monitoring system, manual display guide system, manual compliance record system, and robotics application system for compression methods. Patent Japan 8/25/2023 JP2023-136854 Application Pending System for manual monitoring, guidance, and recording of abdomen, waist, and lower back compression with robotics application Waist and waist S Compression method of liposuction — Amulet — Manual compliance monitoring system, manual display guide system, manual compliance record system, and robotics application system related to the method. Patent Japan 8/25/2023 JP2023-136855 Application Pending A system for waist and abdominal fat liposuction using the ‘Amulet’ compression method with compliance monitoring, guidance display, record keeping, and robotic applications. Waist and waist liposuction compression method — abdominal band — manual compliance monitoring system, manual display guide system, manual compliance record system, and robotics application system related to the method. Patent Japan 8/25/2023 JP2023-136856 Application Pending A system for monitoring compliance with manual guidelines in the compression method for waist fat suction using an abdominal band, including a guide display, record system, and application of robotics. Manual compliance monitoring system, manual display guide system, manual compliance record system, and robotics application system for the gluteal knee S compression method. Patent Japan 8/25/2023 JP2023-136857 Application Pending Patent regarding systems for applying major gluteal knee S compression methods including monitoring, guiding, recording compliance, and robotic application. Manual compliance monitoring system, manual display guide system, manual compliance recording system, and robotics application system for the lower leg S compression method. Patent Japan 8/25/2023 JP2023-136858 Application Pending Systems for monitoring and recording compliance with a manual for lower leg S compression method, manual guidance display, and application system for robotics 57 Manual compliance monitoring system, manual display guide system, manual compliance record system, and robotics application system for the lower body S compression method. Patent Japan 8/25/2023 JP2023-136859 Application Pending Systems related to lower body comfort involving pressure techniques, including systems for manual adherence, guidance, recording compliance, and robotics applications. Manual compliance monitoring systems, manual display guide systems, manual compliance recording systems, and robotics application systems for thigh fixation methods. Patent Japan 8/25/2023 JP2023-136860 Application Pending A femur fixation method with manual adherence monitoring, guidance display, compliance recording, and robotic application system. Manual compliance monitoring systems, manual display guide systems, manual compliance recording systems, and robotics application systems related to the two arm fixation method. Patent Japan 8/25/2023 JP2023-136861 Application Pending System for Monitoring and Recording Compliance with Upper Arm Securing Manual using a Guide Display and Robotics Induction Method for Hair Removal Device Patent Japan 7/25/2023 JP2023-120738 Application Pending Patent for Surgery Audit System Using Machine Learning for Quality and Safety Assessment Induction Method for Hair Removal Device Patent Japan 7/25/2023 JP2023-120739 Application Pending Using a machine learning model to evaluate the accuracy of laser hair removal treatment based on observed laser movements Safety Management Method for Hair Removal Treatment Patent Japan 7/25/2023 JP2023-120740 Application Pending Invention uses machine learning to audit hospital procedures and compliance, checking actions against generated models and ensuring record keeping. Safety Management Method for Hair Removal Treatment Patent Japan 7/25/2023 JP2023-120741 Application Pending Use of Multiscale Health Assessment Procedure with Machine Learning for Risk Evaluation and Compliance Check in Treatment Procedures Safety Management Method for Hair Removal Treatment Patent Japan 7/25/2023 JP2023-120742 Application Pending Invention involves utilizing captured images of hospital procedures to develop a learning model for operations, specifically for evaluating correct use of a spacer and guide light in irradiation range. Safety Management Method for Hair Removal Treatment Patent Japan 7/25/2023 JP2023-120743 Application Pending Improve Laser Surgery Techniques and Cleanliness in Beauty Clinics using Machine Learning Safety Management Method for Hair Removal Treatment Patent Japan 7/25/2023 JP2023-120744 Application Pending Invention embodies a process of evaluating and reducing levels of pain, redness, swelling and hypersensitivity post exposure, and generates a learning model using machine learning algorithms to monitor new operations. Safety Management Method for Hair Removal Treatment Patent Japan 7/25/2023 JP2023-120745 Application Pending Invention for auditing medical procedures using a learning model generated from filmed actions, focusing on irradiation speed and overlap degree. Safety Management Method for Hair Removal Treatment Patent Japan 7/25/2023 JP2023-120746 Application Pending Invention for auditing health procedures using a learning model generated from recorded data Safety Management Method for Hair Removal Treatment Patent Japan 7/25/2023 JP2023-120747 Application Pending A patent detailing a machine learning model that generates and uses a database of images captured within a hospital to analyze and determine proper actions Safety Management Method for Hair Removal Treatment Patent Japan 7/25/2023 JP2023-120748 Application Pending An auditing system for procedures in aesthetic clinics utilizing hair removal lasers, providing monitoring, learning models, analysis and feedback on procedure accuracy. 58 Checklist Manual compliance monitoring system, manual display guide system, manual compliance record system, and robotics application system for implantation double prosthesis method. Patent Japan 7/25/2023 JP2023-120749 Application Pending System for monitoring, guiding, recording checklist compliance and applying robotics for buried double-treatment methods Checklist Manual compliance monitoring system, manual display guide system, manual compliance record system, and robotics application system for the chin prosthesis method. Patent Japan 7/25/2023 JP2023-120750 Application Pending The document discusses systems related to the Agoprosthesis method, including monitoring, guiding, record tracking, and robotics application. Checklist Manual compliance monitoring system, manual display guide system, manual compliance record system, and robotics application system related to the bacar fat and molluscum contagiosum method. Patent Japan 7/25/2023 JP2023-120751 Application Pending Invention related to a system for monitoring adherence to the Checklist Buckelfat-Meelerfat method, displaying guidelines, logging compliance, and application in robotics. Manual compliance monitoring system, manual display guide system, manual compliance record system, and robotics application system related to the fat injection breast augmentation method. Patent Japan 7/25/2023 JP2023-120752 Application Pending Manual and robotics systems for compliance monitoring, display guide, recording, related to fat injection for breast augmentation. Manual compliance monitoring system, manual display guide system, manual compliance record system, and robotics application system related to the pure graft 1UP method. Patent Japan 7/25/2023 JP2023-120753 Application Pending The patent pertains to the PureGraft 1UP method incorporating a manual compliance monitoring system, display guide system, recording system, and a robotics application system. A manual compliance monitoring system, a manual display guide system, a manual compliance record system, and a robotics application system related to the condensed rich liposuction method. Patent Japan 7/25/2023 JP2023-120754 Application Pending A system pertaining to condensed rich fat injection featuring a monitoring system for manual compliance, a descriptive manual guide system, a record system, and a robotics application system. Manual compliance monitoring system, manual display guide system, manual compliance record system, and robotics application system related to the serration method. Patent Japan 7/25/2023 JP2023-120755 Application Pending Invention about cell fusion techniques systems including supervision, display and recording of manual guidelines, and a robotics application system. Manual compliance monitoring system, manual display guide system, manual compliance record system, and robotics application system related to the method of fat augmentation injection (petit breast augmentation) with anesthesia for peace of mind. Patent Japan 7/25/2023 JP2023-120756 Application Pending System for Monitoring and Automating Fat Grafting Breast Enhancement Injection Procedures Manual compliance monitoring system, manual display guide system, manual compliance record system, and robotics application system related to the submammary method of breast augmentation by inserting artificial breast implants. Patent Japan 7/25/2023 JP2023-120757 Application Pending System for monitoring and recording the compliance of implantation procedures for artificial breast augmentation with sub-mammary techniques 59 Breast augmentation by insertion of artificial breast implants: Manual compliance monitoring system, manual display guide system, manual compliance record system, and robotics application system for the submammary method. Patent Japan 7/25/2023 JP2023-120758 Application Pending A system for breast augmentation with artificial implants using subpectoral method featuring manual adherence monitoring, display guide, recording compliance, and application of robotics. Breast augmentation with artificial breast implants: Manual compliance monitoring system, manual display guide system, manual compliance record system, and robotics application system related to the subpectoral fascia method. Patent Japan 7/25/2023 JP2023-120759 Application Pending A system related to breast augmentation surgery using the Subpectoral method, comprising a manual adherence monitoring system, display guide system, compliance record system, and robotics application. Manual compliance monitoring system, manual display guide system, manual compliance record system, and robotics application system for the ENT method. Patent Japan 7/25/2023 JP2023-120760 Application Pending The manual paper discusses the ENT method including systems for manual compliance monitoring, display guides, recording adherence and the use of robotics. Manual compliance monitoring systems, manual display guide systems, manual compliance recording systems, and robotics application systems related to MMBAG compression methods. Patent Japan 7/25/2023 JP2023-120761 Application Pending Document on MMBAG compression method featuring monitoring, display guide, compliance recording, and robotics application systems Manual compliance monitoring system, manual display guide system, manual compliance record system, and robotics application system for MMBAG breath band fixation method. Patent Japan 7/25/2023 JP2023-120762 Application Pending Patent on MMBAG wristband fixation method in compliance monitoring, manual display guide, compliance recording and robotics application systems Manual compliance monitoring system, manual display guide system, manual compliance record system, and robotics application system for SNP breast duct preservation method. Patent Japan 7/25/2023 JP2023-120763 Application Pending System related to SNP ductal preservation method including manual adherence monitoring, display guide, record system and robotics application Manual compliance monitoring system, manual display guide system, manual compliance record system, and robotics application system for SNP conventional method. Patent Japan 7/25/2023 JP2023-120764 Application Pending SNP method involves systems for monitoring, displaying, recording manual adherence, and applying robotics. LA Manual compliance monitoring system, manual display guide system, manual compliance record system, and robotics application system for the nipple base excision method. Patent Japan 7/25/2023 JP2023-120765 Application Pending Document on LA mammary papillary base resection method, discussing compliance monitoring, guide and recording systems, and robotic application 60 Manual compliance monitoring system, manual display guide system, manual compliance record system, and robotics application system for LA nipple circumference excision method. Patent Japan 7/25/2023 JP2023-120766 Application Pending A system related to the LA nipple periphery excision method, featuring a manual compliance monitoring, display guide, recording system, and applications in robotics. Manual compliance monitoring system, manual display guide system, manual compliance record system, and robotics application system for the method of sunken nipple removal. Patent Japan 7/25/2023 JP2023-120767 Application Pending A system related to the innie nipple method, including monitoring, display guide, compliance recording, and robotics application systems. Manual compliance monitoring system, manual display guide system, manual compliance record system, and robotics application system for Montgomery gland removal method. Patent Japan 7/25/2023 JP2023-120768 Application Pending A method for removing Montgomery glands using a manual adherence monitoring, display guide, recording system, and robotics application system. Manual compliance monitoring system, manual display guide system, manual compliance record system, and robotics application system for breast reduction round method. Patent Japan 7/25/2023 JP2023-120769 Application Pending Patent for a manual and robotic system for monitoring, guiding and recording compliance in breast reduction surgeries using the ‘Round method’ Manual compliance monitoring system, manual display guide system, manual compliance record system, and robotics application system for the inverted T-shape breast reduction method. Patent Japan 7/25/2023 JP2023-120770 Application Pending An oversight and guidance system for ‘Reverse T’ breast reduction surgery ensuring procedural adherence and record compliance Manual compliance monitoring system, manual display guide system, manual compliance record system, and robotics application system for rich face, CRF, and nano rich methods. Patent Japan 7/25/2023 JP2023-120771 Application Pending A system involving RichFace, CRF, and NanoRich methods with manual compliance monitoring, display guide, recording systems and a robotics application. Manual compliance monitoring systems, manual display guide systems, manual compliance record systems, and robotics application systems related to filagelar methods. Patent Japan 7/25/2023 JP2023-120772 Application Pending The excerpt discusses a system connected to the Filagera method that incorporates manual compliance monitoring, display guide systems, compliance recording, and robotics application. Manual compliance monitoring systems, manual display guide systems, manual compliance record systems, and robotics application systems related to balancer handling methods. Patent Japan 7/25/2023 JP2023-120773 Application Pending Systems pertaining to balancer handling including monitoring adherence to manual, manual display guidance, compliance recording, and robotics applications. Manual compliance monitoring systems, manual display guide systems, manual compliance recording systems, and robotics application systems for muftogun methods. Patent Japan 7/25/2023 JP2023-120774 Application Pending The Maftogan method encompasses systems for manual compliance monitoring, display guide, compliance recording, and robotics application, providing an efficient framework for procedural tasks execution and oversight. 61 Manual compliance monitoring systems, manual display guide systems, manual compliance recording systems, and robotics application systems for the thread lift floating method in which the piercing part is not a hairy part. Patent Japan 7/25/2023 JP2023-120775 Application Pending A system including a thread lift floating method, a compliance monitoring system, a display guide system, a compliance recording system, and a robotics application system without hairy area insertion. Manual compliance monitoring system, manual display guide system, manual compliance record system, and robotics application system for methods in which the thread lift floating insertion site is a hairy part. Patent Japan 7/25/2023 JP2023-120776 Application Pending A method involving thread lift floating with hair insertion, alongside monitoring, display, recording systems for manual compliance, and an application for robotics. (Limited) A manual compliance monitoring system, a manual display guide system, a manual compliance recording system, and a robotics application system relating to a small face rejuvenation lift method. Patent Japan 7/25/2023 JP2023-120777 Application Pending A facial rejuvenation lift system featuring compliance monitoring, display guide, compliance recording and a robotic application to ensure correct and efficient procedures. A manual compliance monitoring system, a manual display guide system, a manual compliance recording system, and a robotics application system relating to an incisional forehead lift method. Patent Japan 7/25/2023 JP2023-120778 Application Pending A system related to the Incision Forehead Lift method including a manual compliance monitoring system, display guide, recording system, and a robotics application. A manual compliance monitoring system, a manual display guide system, a manual compliance record system, and a robotics application system related to the submental muscle binding method. Patent Japan 7/25/2023 JP2023-120779 Application Pending Patent about systems related to restraining submandibular muscles, including adherence monitoring, manual guide display, compliance record keeping, and robotics application. A manual compliance monitoring system, a manual display guide system, a manual compliance record system, and a robotics application system related to a baser shaving method. Patent Japan 7/25/2023 JP2023-120780 Application Pending Patent for systems that supervise, guide, and record manual compliance with ‘Beyzer Shaving Methods’ and apply robotics. Manual compliance monitoring system, manual display guide system, manual compliance record system, and robotics application system for shaving method. Patent Japan 7/25/2023 JP2023-120781 Application Pending System for monitoring adherence to a shaving manual, providing display guides, recording compliance, and applying robotics. Manual compliance monitoring system, manual display guide system, manual compliance record system, and robotics application system related to the complete extraction method. Patent Japan 7/25/2023 JP2023-120782 Application Pending Detailed extraction method system featuring manual compliance monitoring, display guide, record system, and robotics application. Manual compliance monitoring systems, manual display guide systems, manual compliance recording systems, and robotics application systems related to the Sooso OS method. Patent Japan 7/25/2023 JP2023-120783 Application Pending SksoOS method concerning a monitoring system for manual compliance, a display guide system, documentation system for manual compliance and an application system for robotics 62 Manual Compliance Monitoring System, Manual Display Guide System, Manual Compliance Recording System, and Robotics Application System for Tattoo Removal Method by Excision. Patent Japan 7/25/2023 JP2023-120784 Application Pending The system for tattoo removal by ablation includes compliance monitoring, instruction guide display, manual compliance record, and robotics application. Manual compliance monitoring system, manual display guide system, manual compliance record system, and robotics application system for tattoo removal by skin grafting. Patent Japan 7/25/2023 JP2023-120785 Application Pending A patent about a tattoo removal system utilizing skin grafts, which includes features for operation manual compliance monitoring, display guidance, record keeping, and robotics application. Tattoo removal by skin grafting Manual compliance monitoring system, manual display guide system, manual compliance record system, and robotics application system for skin grafting method. Patent Japan 7/25/2023 JP2023-120786 Application Pending A tattoo removal method using skin grafting with system to track and ensure adherence to the manual procedures, including a guide display and robotics application. Tattoo removal by skin grafting Manual compliance monitoring system, manual display guide system, manual compliance record system, and robotics application system for full-layer skin grafting methods. Patent Japan 7/25/2023 JP2023-120787 Application Pending System for tattoo removal via skin transplantation with compliance monitoring, display guide, recording system, and robotics application Manual compliance monitoring system, manual display guide system, manual compliance record system, and robotics application system related to the “Cachi” and “Folded ear” methods. Patent Japan 7/25/2023 JP2023-120788 Application Pending System incorporating manual compliance monitoring, display guide, recording systems, and applied robotics for manipulating ears Manual compliance monitoring system, manual display guide system, manual compliance record system, and robotics application system for the split-ear straight line method. Patent Japan 7/25/2023 JP2023-120789 Application Pending A system for monitoring, displaying, recording adherence to manuals, and a robotics implementation using the straight-line method of split ear. The manual compliance monitoring system, the manual display guide system, the manual compliance record system, and the robotics application system related to the cleft ear W-type method. Patent Japan 7/25/2023 JP2023-120790 Application Pending A system related to the ‘W-type’ method for monitoring manual compliance, display guidance, record adherence, and robotics application. Manual compliance monitoring system, manual display guide system, manual compliance record system, and robotics application system related to the split-ear Z-type method. Patent Japan 7/25/2023 JP2023-120791 Application Pending Systems for the ‘Split-ear Z-type’ method involving manual compliance monitoring, display guide, compliance recording, and robotics application Manual compliance monitoring system, manual display guide system, manual compliance record system, and robotics application system for NVL method. Patent Japan 7/25/2023 JP2023-120792 Application Pending The text discusses NVL method-based systems for monitoring, displaying, recording compliance with manuals and applications for robotics 63 Manual compliance monitoring system, manual display guide system, manual compliance record system, and robotics application system for lip enlargement method. Patent Japan 7/25/2023 JP2023-120793 Application Pending Lip enlargement method incorporating systems of compliance monitoring, guide display, adherence recording, and robotics utilization Manual compliance monitoring system, manual display guide system, manual compliance record system, and robotics application system for lip reduction method. Patent Japan 7/25/2023 JP2023-120794 Application Pending A system for monitoring, guiding, recording compliance, and applying robotics to a lip reduction method Manual compliance monitoring system, manual display guide system, manual compliance record system, and robotics application system for gummiesmile and mucous membrane resection methods. Patent Japan 7/25/2023 JP2023-120795 Application Pending A system for monitoring and recording adherence to a manual, guidance display, and application of robotics in the method of mucosal excision for gummy smile treatment Manual compliance monitoring system, manual display guide system, manual compliance record system, and robotics application system for gum resection method. Patent Japan 7/25/2023 JP2023-120796 Application Pending A system for gummy smile gingival resection including manual compliance monitoring, display guide, recording, and robotics application. Manual compliance monitoring system, manual display guide system, manual compliance recording system, and robotics application system for the gummintomy method. Patent Japan 7/25/2023 JP2023-120797 Application Pending A system for monitoring compliance, displaying manual guides, recording compliance, and applying robotics in muscle resection for gummy smile correction. Manual compliance monitoring systems, manual display guide systems, manual compliance recording systems, and robotics application systems related to lip lift methods. Patent Japan 7/25/2023 JP2023-120798 Application Pending A lip lift procedure that employs a system for monitoring, guiding, documenting compliance with manual, and robot application. Manual compliance monitoring systems, manual display guide systems, manual compliance recording systems, and robotics application systems for osteotomy and mandibular angioplasty (gill osteotomy and osteotomy) methods. Patent Japan 7/25/2023 JP2023-120799 Application Pending A system concerning bone cutting and mandibular angle formation procedural methods, incorporating manual adherence monitoring, display guide, compliance recording systems and a component for robotics application. Manual compliance monitoring system, manual display guide system, manual compliance record system, and robotics application system for osteotomy and mastoid (jaw) plasty methods. Patent Japan 7/25/2023 JP2023-120800 Application Pending A system for bone cutting and jaw reshaping procedures with compliance monitoring, display guide, adherence recording features, and the application of robotic technology. Manual compliance monitoring system, manual display guide system, manual compliance record system, and robotics application system for osteotomy (upper and lower setback) method. Patent Japan 7/25/2023 JP2023-120801 Application Pending A system encompassing osteotomy method, manual compliance monitoring, manual display guide, records keeping, and robotics applications. 64 Manual compliance monitoring systems, manual display guide systems, manual compliance recording systems, and robotics application systems related to forehead shaping methods. Patent Japan 7/25/2023 JP2023-120802 Application Pending Methodology for designing a frontal area featuring a monitoring and guiding system for manual adherence, record-keeping for compliance, and application of robotics A manual compliance monitoring system, a manual display guide system, a manual compliance recording system, and a robotics application system related to the pre-procedure photography procedure and the points to keep in mind when taking photographs. Patent Japan 7/25/2023 JP2023-120803 Application Pending The patent relates to various systems for manual adherence monitoring, manual display, recording adherence to manuals, and a robotic application, specifically regarding surgical imaging procedures. Manual compliance monitoring systems, manual display guide systems, manual compliance recording systems, and robotics application systems related to pre-procedure photography procedures and methods to keep in mind when taking photographs. Patent Japan 7/25/2023 JP2023-120804 Application Pending A technology system for monitoring adherence to pre-treatment photography manual procedures, including a displaying guide, compliance recording, and a robotics application system. Manual compliance monitoring systems, manual display guide systems, manual compliance recording systems, and robotics application systems related to cleaning methods. Patent Japan 7/25/2023 JP2023-120805 Application Pending Methods of cleansing involving manual compliance monitoring, display guide, compliance recording systems, and robotics application system Manual compliance monitoring systems, manual display guide systems, manual compliance record systems, and robotics application systems for equipment assembly and sterilization process methods. Patent Japan 7/25/2023 JP2023-120806 Application Pending Invention relating to systems for the assembly and sterilization process of equipment with monitoring, guidance, recording compliance, and robotic application features. We recognize the importance of protecting and enforcing our intellectual property rights. We believe that we have registered all the principal trademarks and internet domain names in Japan that are necessary for us to carry out our business operations. We believe that we have filed all patent applications in Japan that are necessary for us to carry out our business operations. We have no patents or patent applications in Vietnam, Singapore or the United States. We will take the necessary legal action to protect our intellectual property rights if we discover any infringement of those rights. We license certain intellectual property relating to our business to our franchisee clinics. In addition, we rely on trade secrets, proprietary know-how, and concepts that are critical to our business, which we also license to our franchisee clinics. Any termination or limitation of, or loss of intellectual property rights would have a material adverse effect on us and could adversely affect our business, financial condition or results of operations. We are not currently aware of any material infringement of our intellectual property rights and we believe that we have taken reasonable measures to prevent infringement of our own intellectual property rights. We do not currently have any pending or, to our knowledge, threatened claims against us or any of our subsidiaries relating to the infringement of any intellectual property rights owned by third parties. 65 It is possible that our current patent applications, or patents which we may later acquire or develop, may be successfully challenged or invalidated in whole or in part. It is also possible that we may not obtain issued patents from our pending patent applications or for other inventions we seek to protect. Due to uncertainties inherent in prosecuting patent applications, sometimes patent applications are rejected and we subsequently abandon them. It is also possible that we may develop proprietary products or technologies in the future that are not patentable or that the patents of others will limit or altogether preclude our ability to do business. In addition, any patent issued to us in the future, or any of our pending patent applications, may provide us with little or no competitive advantage, in which case we may abandon such patent, or patent applications, or license them to another entity. Please refer to “Part I, Item 1A. Risk Factors — Risks Related to our Intellectual Property” for more information. Insurance We do not maintain product liability insurance for the medical devices, products, and equipment that we sell to the MCs are part of our provision of purchases services, since we are not the manufacturer of those products. We have fire insurance, leaseholder liability insurance, and facility liability insurance for our leased spaces (consisting primarily of office space) in case of damages which may be caused by any incidents or disasters. Further, we maintain cyber insurance in order to combat the increasing risks of cyber-attacks and theft of patient information, which may lead to litigation, damage to our brand, loss of existing customers and potential customers, regulatory violations, suspension of operations, and ultimately deterioration of business performance and financial position. We do not maintain business interruption insurance or key employee insurance for our executive officers. The MCs are responsible for maintaining fire insurance, leaseholder liability insurance, and facility liability insurance for the franchisee clinic properties. Accordingly, we might be subject to liabilities that exceed our insurance coverage. See “Part I, Item 1A. Risk Factors — Risk relating to our business and our industry — Our business is subject to liabilities for which we may not be insured.” Available Information We file our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports electronically with the U.S. Securities and Exchange Commission (“SEC”) and such reports can be accessed on our Investor Relations website at sbc-holdings.com . Alternatively, you may access these reports at the SEC’s website at www.sec.gov. We make available, free of charge, copies of these reports as soon as reasonably practicable after filing these reports with the SEC or otherwise furnishing it to the SEC. The contents of our website is not incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC, and any references to our website is intended to be an inactive textual references only.