# EDGAR Filing Document

**Accession Number:** 0002078570
**File Stem:** 0001493152-26-005914
**Filing Date:** 2026-2
**Character Count:** 653300
**Document Hash:** 1d7fc8ddceca31a9210ca3ff4bbf8790
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001493152-26-005914.hdr.sgml**: 20260210

**ACCESSION NUMBER**: 0001493152-26-005914

**CONFORMED SUBMISSION TYPE**: S-1/A

**PUBLIC DOCUMENT COUNT**: 7

**FILED AS OF DATE**: 20260210

**DATE AS OF CHANGE**: 20260210

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** AMATUHI HOLDINGS, INC.
- **CENTRAL INDEX KEY:** 0002078570
- **STANDARD INDUSTRIAL CLASSIFICATION:** GEN BUILDING CONTRACTORS - RESIDENTIAL BUILDINGS [1520]
- **ORGANIZATION NAME:** 05 Real Estate & Construction
- **EIN:** 393087053
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 0331

**FILING VALUES:**
- **FORM TYPE:** S-1/A
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 333-290245
- **FILM NUMBER:** 26613803

**BUSINESS ADDRESS:**
- **ADDRESS IS A NON US LOCATION:** YES
- **STREET 1:** 10TH FLOOR, NISSEKI YOKOHAMA BUILDING,
- **STREET 2:** 1-8, SAKURAGICHO 1-CHOME, NAKA-KU,
- **CITY:** YOKOHAMA-SHI, KANAGAWA-KEN
- **PROVINCE COUNTRY:** M0
- **ZIP:** 231-0062
- **BUSINESS PHONE:** 81-045-263-8670

**MAIL ADDRESS:**
- **ADDRESS IS A NON US LOCATION:** YES
- **STREET 1:** 10TH FLOOR, NISSEKI YOKOHAMA BUILDING,
- **STREET 2:** 1-8, SAKURAGICHO 1-CHOME, NAKA-KU,
- **CITY:** YOKOHAMA-SHI, KANAGAWA-KEN
- **PROVINCE COUNTRY:** M0
- **ZIP:** 231-0062

**As filed with the Securities and Exchange Commission on February 6, 2026.**

**Registration No. 333-290245**

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

Amendment No. 5

to

**FORM S-1/A**

**REGISTRATION STATEMENT**

**UNDER**

**THE SECURITIES ACT OF 1933**

**AMATUHI HOLDINGS, INC.**

(Exact name of registrant as specified in its charter)

---

| | | |
|:---|:---|:---|
| **Delaware** | **8399** | **39-3087053** |
| (State or other jurisdiction<br> of incorporation or organization) | (Primary Standard Industrial<br> Classification Code Number) | (I.R.S. Employer<br> Identification No.) |

---

**AMATUHI HOLDINGS, INC.**

**Nisseki Yokohama Building, 10th Floor**

**1-1-8, Sakuragichō, Naka Ward, Yokohama-shi, Kanagawa, Japan 231-0062**

**Telephone: +81-45-263-8670**

(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)

**Law Offices of T. J. Jesky**

**205 N. Michigan Ave., Suite 810**

**Chicago, IL 60601-5902**

**Telephone: 312-894-1030**

**Email: tj@jeskylaw.com**

(Name, address, including zip code, and telephone number, including area code, of agent for service)

*Copies to:*

---

| | |
|:---|:---|
| **Law Offices of T. J. Jesky**<br> **205 N. Michigan Ave., Suite 810**<br> **Chicago, IL 60601-5902**<br> **Telephone: 312-894-1030**<br> **Email: tj@jeskylaw.com** | **Cavas S. Pavri**<br> **Jeffrey Kennedy**<br> **ArentFox Schiff LLP**<br> **1717 K Street NW**<br> **Washington, DC 20006**<br> **Tel: (202) 857-6000** |

---

**Approximate date of commencement of proposed sale to the public:**

**As soon as practicable after this Registration Statement is declared effective.**

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ <br> Non-accelerated filer ☒ Smaller reporting company ☒ <br> Emerging growth company ☒

If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided to Section 7(a)(2)(B) of the Securities Act. ☐

**The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.**

**The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.**

---

| | | |
|:---|:---|:---|
| **PRELIMINARY PROSPECTUS** | **SUBJECT TO COMPLETION** | **DATED [●], 2025** |

---

**3,000,000** **Shares Common Stock**

![](forms-1_001.jpg)

**AMATUHI HOLDINGS, INC.**

------

This is the initial public offering of 3,000,000 shares of common stock. The estimated initial public offering price is expected to be in the range of $4.00 to $6.00 per share. For purposes of this prospectus, the assumed initial public offering price per share is $5.00, which is the midpoint of the estimated initial public offering price range. Currently, no public market exists for our common stock. We intend to apply to have our common stock listed on the Nasdaq Capital Market.

We have granted the Underwriters the option, exercisable for 45 days from the date of this prospectus, to purchase up to an additional 450,000 shares from us at the initial public offering price less the underwriting discount and commissions to cover over-allotments.

**We are an "emerging growth company," as that term is used in the Jumpstart Our Business Startups Act of 2012, as amended, and will be subject to certain reduced public company reporting requirements for this prospectus and future filings. See "Prospectus Summary — Emerging Growth Company Status."**

**We will be deemed to be a "controlled company" under the Nasdaq listing rules because Japan Lifestyle No.1 Investment Limited Partnership will own 82.9% of our outstanding common stock upon completion of this offering (81.3 % if the underwriter's over-allotment option is exercised in full). As a controlled company, we are not required to comply with certain of NASDAQ's corporate governance requirements. We currently intend to take advantage of any of these exceptions. See "Prospectus Summary — Controlled Company."**

**Investing in our common stock is highly speculative and involves a significant degree of risk. See "Risk Factors," which begins on Page 7.**

**Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.**

---

| | | |
|:---|:---|:---|
|  | **Per share** | **Total** |
| Initial public offering price | $— | $— |
| Underwriting discounts and commissions (1) | $— | $— |
| Proceeds, before expenses, to us | $— | $— |

---

(1) Represents
 underwriting discount and commissions of 8% per share. We have agreed to a reduced underwriting discount and commission of 5% per
 share on investors in this offering introduced by us. For the purpose of this calculation only, we assume the maximum underwriting
 discount and commissions are payable. The Underwriters will receive compensation in addition to the underwriting discount and commission,
 as set forth in the section entitled "Underwriting" beginning on page 67 upon the closing of this offering. We have also
 agreed to reimburse Underwriters for certain expenses incurred by it and to issue to the Underwriters upon closing of this offering.
 See "Underwriting" for additional information.

The Underwriters may also exercise their option to purchase up to 450,000 additional shares of common stock from us at the public offering price, less the underwriting discount, for 45 days after the date of this prospectus to cover over-allotments, if any. If the Underwriters exercise the over-allotment option in full, the total underwriting discounts and commissions payable will be $1,380,000, and the total proceeds to us, before expenses, will be $15,870,000.

The Underwriters expect to deliver the common stock to purchasers in the offering on or about [●], 2026.

*Sole Underwriter*

**Spartan Capital Securities, LLC**

The date of this prospectus is [●] , 2025

**TABLE OF CONTENTS**

---

| | |
|:---|:---|
|  | **Page** |
| [MARKET AND INDUSTRY DATA](#D_001) | 1 |
| [TRADEMARKS, SERVICE MARKS AND TRADE NAMES](#D_002) | 1 |
| [BASIS OF PRESENTATION](#D_003) | 1 |
| [ENFORCEABILITY OF CIVIL LIABILITIES](#ab_001) | 2 |
| [PROSPECTUS SUMMARY](#D_004) | 2 |
| [RISK FACTORS](#D_006) | 7 |
| [SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS](#a_001) | 24 |
| [Use of Proceeds](#a_002) | 25 |
| [Dividend Policy](#a_003) | 26 |
| [Capitalization](#a_004) | 26 |
| [DILUTION](#a_005) | 27 |
| [MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](#a_006) | 28 |
| [CORPORATE HISTORY AND STRUCTURE](#a_007) | 39 |
| [BUSINESS](#a_008) | 40 |
| [REGULATIONS](#a_009) | 48 |
| [MANAGEMENT](#a_010) | 50 |
| [EXECUTIVE AND DIRECTOR COMPENSATION](#a_011) | 54 |
| [RELATED PARTY TRANSACTIONS](#pri_028) | 58 |
| [SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT](#a_012) | 59 |
| [DESCRIPTION OF SECURITIES](#a_013) | 60 |
| [SHARES ELIGIBLE FOR FUTURE SALE](#a_014) | 63 |
| [MATERIAL U.S. FEDERAL TAX CONSIDERATIONS FOR NON-U.S. HOLDERS OF COMMON STOCK](#a_015) | 64 |
| [UNDERWRITING](#a_016) | 67 |
| [LEGAL MATTERS](#a_017) | 74 |
| [EXPERTS](#a_018) | 74 |
| [WHERE YOU CAN FIND MORE INFORMATION](#a_019) | 74 |
| [INDEX TO FINANCIAL STATEMENTS](#f_001) | F-1 |

---

**About this Prospectus**

You should rely only on the information contained in this prospectus and any free writing prospectus we may authorize to be delivered or made available to you. We have not, and the underwriters have not, authorized anyone to provide you with additional or different information from that contained in this prospectus and any free writing prospectus we have authorized. We and the underwriters take no responsibility for and can provide no assurance as to the reliability of any other information that others may give you. We are offering to sell, and seeking offers to buy, shares of common stock only in jurisdictions where offers and sales are permitted. The information in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of the common stock. Our business, financial condition, results of operations and prospects may have changed since that date.

This prospectus contains forward-looking statements that are subject to a number of risks and uncertainties, many of which are beyond our control. "Risk Factors" and "Special Note Regarding Forward-Looking Statements" contain additional information regarding these risks.

For investors outside the United States: We have not, and the underwriters have not, done anything that would permit this offering, or possession or distribution of this prospectus, in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, this offering of the shares of common stock and the distribution of this prospectus outside of the United States. See "*Underwriting*."

**MARKET AND INDUSTRY DATA**

Unless otherwise indicated, information contained in this prospectus concerning our industry and the markets in which we operate is based on information from independent industry and research organizations, other third-party sources (including industry publications, surveys and forecasts), and management estimates. Management estimates are derived from publicly available information released by independent industry analysts and third-party sources, as well as data from our internal research, and are based on assumptions made by us upon reviewing such data and our knowledge of such industry and markets which we believe to be reasonable. Any industry forecasts are based on data (including third-party data), models and experience of various professionals and are based on various assumptions, all of which are subject to change without notice. In addition, projections, assumptions and estimates of the future performance of the industry in which we operate, and our future performance are necessarily subject to uncertainty and risk due to a variety of factors, including those described in "Risk Factors" and "Special Note Regarding Forward-Looking Statements." These and other factors could cause results to differ materially from those expressed in the estimates made by the independent parties and by us.

**TRADEMARKS, SERVICE MARKS AND TRADE NAMES**

We own or have rights to various trademarks, service marks and trade names that we use in connection with the operation of our business. This prospectus may also contain trademarks, service marks and trade names of third parties, which are the property of their respective owners. Our use or display of third parties' trademarks, service marks, trade names or food products in this prospectus is not intended to imply a relationship with, or endorsement or sponsorship by, these other parties. Solely for convenience, the trademarks, service marks and trade names referred to in this prospectus may appear without the <sup>®</sup>, TM or SM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensor to these trademarks, service marks and trade names.

**BASIS OF PRESENTATION**

Certain monetary amounts, percentages, and other figures included in this prospectus have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables may not be the arithmetic aggregation of the figures that precede them, and figures expressed as percentages in the text may not total 100% or, as applicable, may not reflect precise sums.

In this prospectus, "AMATUHI," "we," "us," "our," or the "Company" refer to AMATUHI HOLDINGS, Inc., a Delaware corporation, and, where applicable, its wholly owned subsidiary, AMATUHI Inc. a Japanese company. Unless otherwise indicated or the context otherwise requires, references to the "parent company" refer to AMATUHI HOLDINGS, Inc.

Prior to this offering, Japan Lifestyle No.1 Investment Limited Partnership beneficially owns 19,475,000 shares of the outstanding common stock of AMATUHI HOLDINGS, Inc., representing 95.0% of the voting power of the Company's capital stock.

The Company's fiscal year begins on April 1 and ends on March 31. Our financial statements are prepared in U.S. dollars and in accordance with accounting principles generally accepted in the United States ("GAAP").

**Enforceability of Civil Liabilities**

While Amatuhi Holdings, Inc. is organized under the laws of the State of Delaware, the Company's headquarters are located outside of the U.S. It is a passive company that acts as a holding company for its subsidiary, which is an operating company. The operating company of the Amatuhi Japan, which is a Japanese corporation. Substantially all the assets and operations of Amatuhi Holdings are located in Japan. Moreover, the Company's officers and directors Tatsuma Yoshida and Yoshihito Arita are nationals of Japan and substantially all their assets are located outside the United States.

If an event should occur that results in the liability of the Company or its officers and directors to shareholders, it could be very difficult for the shareholder to process their claims against the Company or an officer and director. For example, it may be difficult for investors to effect service of process in the United Statement and enforce judgments obtained in U.S. courts. Obviously, it could be difficult for the stockholders of the Company to effect service of process within the United States upon the Company's officers and directors. In addition, there is uncertainty on whether the Courts of Japan would recognize or enforce judgments of U.S. Courts obtained against the Company, officers, directors predicated on the civil liability provisions of the securities laws of the United States or any other laws. It may be difficult or impossible for U.S. investors to collect a judgment against the Company or its officers and directors and therefore, any judgment obtained in the United States against the Company, or its officers or directors may not be enforceable.

**PROSPECTUS SUMMARY**

*This summary highlights certain information contained elsewhere in this prospectus and is qualified in its entirety by the more detailed information and financial statements and related notes included elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in our common stock. You should read this entire prospectus carefully, especially the matters set forth under the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operation" sections of this prospectus and our consolidated financial statements and related notes appearing elsewhere in this prospectus, before making an investment decision. All figures are in U.S. dollars, unless otherwise stated.*

**Company Overview**

AMATUHI HOLDINGS, Inc., was incorporated on June 24, 2025 in Delaware to act as the holding company of AMATUHI Inc. AMATUHI Inc. ("AMATUHI") was incorporated on February 22, 2021 and is an operating company in Japan with the headquarter in Yokohama, Kanagawa and a branch in Osaka. AMATUHI operates under the "AMANEKU" brand in Japan.

Our company operates group homes in Japan for people with disabilities under the brand name of "AMANEKU." "AMANEKU" is a "communal living assistance" service based on the "Comprehensive Support for Persons with Disabilities Act" which is implemented based on the self-support benefits provided by the Japanese government under the act. The act supports people who wish to live independently so that they can advance toward their respective goals through communal living in small groups and interaction with the local community.

AMANEKU provides group homes with Daytime Service Support, which was established as a result of amendments to the Comprehensive Support for Persons with Disabilities Act, that allows for the provision of extensive 24-hour services in response to the increasing aging population and people with disabilities.

Our primary services to the disable include but are not limited to: Three nutritionally balanced meals daily, counselling and support, assistance with personal care (bathing, dressing, mobility, oral care), medication management, money management, room cleaning, working with medical professionals to provide required medical care and helping our clientele with public assistance, pensions and family matters.

AMANEKU daytime support group homes are mainly two-story buildings with a capacity of 10 residents on each floor. Based on the aging population ins Japan, there is a shortage of group homes for people with severe disabilities. Our Company is working to fulfil the needs of the growing disabled population, by providing a number of services to address their needs.

We are reimbursed for the services we provide to the disabled people through Japanese government funding issued under the Comprehensive Support for Persons with Disabilities Act.

We are engaged in businesses that support the lives of people with disabilities, including the construction of group homes for people with disabilities and social participation for people with disabilities.

We are specialized in designing, constructing and operating group homes for individuals with disabilities. We also focus on providing supportive living environments, particularly for individuals with significant needs through our Daytime Service Support Type group homes. We are expanding within a market characterized by high demand and insufficient supply, positioning ourselves as a key provider addressing critical social needs related to disability care and housing.

AMATUHI specializes in providing communal living assistance (group homes) as defined under Japan's "Comprehensive Support Law for Persons with Disabilities." This is a government-regulated sector where services are funded primarily through social security benefits.

Japan Lifestyle No.1 Investment Limited Partnership directly and indirectly controls approximately 95.0% of the voting power of our outstanding capital stock. As a result, it will have the ability to determine all matters requiring approval by stockholders. In other words, the fund will be able to control any action requiring general stockholder approval, including the election of our Board of Directors, the adoption of amendments to our certificate of incorporation and bylaws, and the approval of any merger or sale of substantially all of our assets.

If we obtain a listing on the Nasdaq Capital Market, we will be a "controlled company" as defined in Nasdaq Listing Rule 5615(c)(1) because more than 50% of our voting power will be held by a single entity — Japan Lifestyle No.1 Investment Limited Partnership — after the offering.

As a "controlled company," we will be exempt under Nasdaq listing standards from certain corporate governance requirements that would otherwise apply to companies that are not controlled, including the requirements that:

(i) a majority of the Board of Directors consist of "independent" directors as defined under Nasdaq listing standards,

(ii) we have a nominating and corporate governance committee composed entirely of independent directors with a written committee charter, and

(iii) we have a compensation committee composed entirely of independent directors with a written committee charter.

As a result, we will be exempt from the corporate governance requirements under Nasdaq Listing Rules 5605(b)(1), 5605(d), and 5605(e). However, we will remain subject to the requirements of Rule 5605(b)(2) with respect to independent director executive sessions, and Rule 5605(c)(3) with respect to audit committee composition.

Accordingly, you may not have the same protections afforded to stockholders of companies that are subject to all of the Nasdaq corporate governance requirements. In addition, Japan Lifestyle No.1 Investment Limited Partnership, as our controlling shareholder, will have the ability to exercise significant influence over fundamental corporate matters and transactions, and may have interests that differ from those of other stockholders. For additional information, please see "Risk Factors — Risks Related to Our Business and Industry" — If the voting power of our capital stock continues to be highly concentrated, it may prevent you and other minority stockholders from influencing significant corporate decisions and may result in conflicts of interest.

**Implications of Being an Emerging Growth Company and a Smaller Reporting Company**

As a company with less than $1.235 billion in revenues during our last fiscal year, we qualify as an emerging growth company as defined in the Jumpstart Our Business Startups Act enacted in 2012 (the "JOBS Act"). As an emerging growth company, we expect to take advantage of reduced reporting requirements that are otherwise applicable to public companies. These provisions include, but are not limited to:

● being permitted to present only two years of audited financial statements, in addition to any required unaudited interim financial statements, with correspondingly reduced "Management's Discussion and Analysis of Financial Condition and Results of Operations" disclosure in this prospectus;

● not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended;

● reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and registration statements; and

● exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the "Securities Act") for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our consolidated financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.

We may use these provisions until the last day of our fiscal year following the fifth anniversary of the completion of this offering. However, if certain events occur prior to the end of such five-year period, including if we become a "large accelerated filer," our annual gross revenues exceed $1.235 billion or we issue more than $1.07 billion of non-convertible debt in any three-year period, we will cease to be an emerging growth company prior to the end of such five-year period.

To the extent that we continue to qualify as a "smaller reporting company," as such term is defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended, (the "Exchange Act"), after we cease to qualify as an emerging growth company, certain of the exemptions available to us as an emerging growth company may continue to be available to us as a smaller reporting company, including: (i) not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes Oxley Act; (ii) scaled executive compensation disclosures; and (iii) the requirement to provide only two years of audited financial statements, instead of three years.

**Implications of Being a Controlled Company**

The "controlled company" exception to the Nasdaq Capital Market rules provides that a company of which more than 50% of the voting power is held by an individual, group or another company, a "controlled company," need not comply with certain requirements of the Nasdaq corporate governance rules. As of the date of this prospectus, Japan Lifestyle No.1 indirectly beneficially owns an aggregate of 19,475,000 shares of our common stock, which represents 95.0% of the voting power of our outstanding capital stock. Following this offering, Japan Lifestyle No. 1 Investment Limited Partnership will control approximately 82.9% of the voting power of our outstanding capital stock if all the common stock being offered are hereby sold (or 81.3% of our outstanding voting power if the underwriters' option to purchase additional shares is exercised in full).

Controlled companies are exempt from the Nasdaq Capital Market's corporate governance rules requiring that listed companies have (i) a majority of the Board of Directors consist of "independent" directors under the listing standards of the Nasdaq, (ii) a nominating/corporate governance committee composed entirely of independent directors and a written nominating/corporate governance committee charter meeting the requirements of the Nasdaq, and (iii) a compensation committee composed entirely of independent directors and a written compensation committee charter meeting the requirements of the Nasdaq. We currently utilize and presently intend to continue to utilize these exemptions. As a result, we may not have a majority of independent directors, our nomination and corporate governance committee and compensation committee may not consist entirely of independent directors and such committees may not be subject to annual performance evaluations. Accordingly, you may not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the Nasdaq. See also "*Management—Board Committees and Director Independence – Controlled Company and Director Independence*."

**Corporate Information**

We are currently incorporated and in good standing in the State of Delaware where we were formed on June 24, 2025, under the corporate name: AMATUHI HOLDINGS, Inc. Our principal executive offices are located at Nisseki Yokohama Building, 10th Floor, 1-1-8 Sakuragichō, Naka Ward, Yokohama, Kanagawa 231-0062, Japan, and our telephone number is +81-45-263-8670. Our website address is <u>https://amatuhi.co.jp</u>. The information contained on our website is not incorporated by reference into this prospectus, and you should not consider any information contained on, or that can be accessed through, our website as part of this prospectus or in deciding whether to purchase our common stock.

**THE OFFERING**

---

| | |
|:---|:---|
| Securities offered by us: | 3,000,000 shares of common stock (or 3,450,000 shares if the Representative exercises its over-allotment option in full). |
| Public offering price: | We currently estimate that the initial public offering price will be $5.00 per common stock, which is the midpoint of the estimated initial public offering price range set forth on the cover page of this prospectus. |
| Over-allotment option: | We have granted to the Representative an option to purchase up to an additional 450,000 shares of common stock exercisable solely to cover over-allotments, if any, at the applicable public offering price less the underwriting discounts and commissions shown on the cover page of this prospectus. The Representative may exercise this option in full or in part at any time and from time to time until 45 days after the date of this prospectus. |
| Common stock outstanding before this offering: | 20,500,000 shares of common stock, par value $0.000001 (reflects August 6, 2025 5,000:1 forward stock split). |
| Common stock to be outstanding after this offering: | 23,500,000 shares of common stock. If the Representative's over-allotment option is exercised in full, the total number of shares of common stock outstanding immediately after this offering would be 23,950,000. <sup>(1)</sup> |
| Controlled Company: | Following this offering, Japan Lifestyle No. 1 Investment Limited Partnership will control approximately 82.9% of the voting power of our outstanding capital stock if all the common stock being offered hereby are sold (or 81.3% of our outstanding voting power if the underwriters' option to purchase additional shares is exercised in full). As a result, if we obtain a listing on the Nasdaq Capital Market, we will be a "controlled company" under the Nasdaq corporate governance standards and consequently we may elect not to comply with certain corporate governance standards. See "*Management – Board Committees and Director Independence - Controlled Company and Director Independence*." |
| Use of proceeds: | We intend to use all of the proceeds from this offering for various purposes. See "*Use of Proceeds*" on page 25 for more information*.* |

---

---

| | |
|:---|:---|
| Risk factors: | See "*Risk Factors*" beginning on page 7 of this prospectus for a discussion of some of the factors you should carefully consider before deciding to invest in our common stock. |
| Listing: | We intend to apply to have our common stock listed on Nasdaq. At this time, Nasdaq has not yet approved our application to list our common stock. The closing of this offering is conditioned upon Nasdaq's final approval of our listing application, and there is no guarantee or assurance that our common stock will be approved for listing on Nasdaq. |
| Proposed ticker symbol | "AMTU" |
| Transfer Agent | VStock Transfer, LLC |
| Lock-Ups: | All of our directors and officers and our principal stockholders (5% or more stockholders) have agreed with the underwriters, subject to certain exceptions, not to sell or pledge, directly or indirectly, any number of shares issued by us or any securities convertible into or exercisable or exchangeable for shares issued by us for a period of 180 after the date of this prospectus. See "*Underwriting—Lock-up Agreements*" for more information. |

---

Unless we indicate otherwise, all information in this prospectus:

● is based on 20,500,000 shares of common stock issued and outstanding as of the date of this prospectus; and

● assumes no exercise by the Representative of its option to purchase up to an additional 450,000 shares of common stock to cover over-allotments, if any.

**Risk Factors Summary**

Investing in our common stock involves a high degree of risk. Below is a summary of material factors that make an investment in our common stock speculative or risky. Importantly, this summary does not address all of the risks that we face. Please refer to the information contained in and incorporated by reference under the heading "Risk Factors" on page 7 of this prospectus.

<u>Risks Related to Our Business and Industry</u>

● Our long-term success is highly dependent on our ability to identify and secure appropriate sites.

● Our Japanese group homes could be negatively affected by conditions specific to these areas.

● Our expansion into new markets may present increased risks due in part to our unfamiliarity with the areas.

● New group homes, once opened, may not be profitable, and the past may not be indicative of future results.

● Our sales and profit growth could be adversely affected if comparable group sales are less than we expect.

● Our failure to manage our growth effectively could harm our business and operating results.

● Difficulties recruiting, training and retaining employees could adversely affect our business.

● A decline of people with disabilities where our group homes are located could affect our facility sales.

● We have historically received payment for self-support benefits provided by the Japanese government.

● Opening new group homes in existing markets may negatively affect sales at our existing group homes.

● Operating results at our facilities could be significantly affected by competition.

● Negative publicity could reduce sales at some or all of our other group homes.

● We must achieve solid occupancy rates at rental prices that enable us to offset the lease.

● We rely on information technology, and any material failure, could damage our operating our business.

● Social media could materially adversely impact our business, financial condition or results of operations.

● Our current insurance may not provide adequate levels of coverage against claims.

● Failure to obtain and maintain required licenses and permits could harm our business, or results of operations.

● We may need capital in the future, and we may not be able to raise that capital on favorable terms.

● The loss of a large customer would have an adverse effect on our operating results

● It may be difficult for U.S. investors to effect service or judgment against a Japanese company.

● Changes in the operations, regulations, or financial condition of the unconsolidated entity could adversely affect the value of the Company's investment.

<u>Risks Related to Management and Employees</u>

● Voting power is concentrated, minority shareholders are prevented from influencing corporate decisions.

● As a controlled company, we are not subject to all of the corporate governance rules of the Nasdaq

● The loss of senior management and key employees could have an adverse effect on results of operations.

● Our Management does not have experience managing a U.S. public company.

● Labor disputes may disrupt our operations and affect our results of operations.

● Changes in employment laws may adversely affect our business, results of operations or cash flow.

<u>Risks Related to Legal, Regulatory, Environmental, Intellectual Property and Privacy Matters</u>

● Compliance with environmental laws may negatively affect our business.

● Governmental regulation may adversely affect our business, financial condition or results of operations.

<u>General Risks</u>

● Failure to implement and maintain effective internal controls can have an adverse effect on our securities  *.*** 

● Changes to accounting rules may adversely affect our business, financial condition or results of operations.

● As an emerging growth company, our auditor is not required to attest if our internal controls are effective.

● We may need capital in the future, and we may not be able to raise that capital on favorable terms.

● Our certificate of incorporation and bylaws makes State of Delaware the sole forum for legal disputes.

● By purchasing common stock in this offering, you are bound by the fee-shifting provision in our bylaws.

<u>Risks Related to This Offering and Ownership of Our Common Stock</u>

● There can be no assurance that we will be able to comply with the Nasdaq Capital Market's listing standards.

● The market price of our common stock may be volatile, and you could lose all or part of your investment.

● Our management team will have broad discretion over the use of the net proceeds from this offering.

● If we are unable to obtain additional funding when needed, our business operations will be harmed.

● Our common stock may be subject to the "penny stock" rules which makes it more difficult to resell.

● You will experience substantial dilution as a result of this offering and additional dilution in the future.

● Shares eligible for future sale may adversely affect the market.

● Anti-takeover provisions in our certificate of incorporation and bylaws, could impair a takeover attempt.

● We have never paid dividends on our common stock and have no plans to do so in the future.

● We will indemnify and hold harmless our officers and directors to the maximum extent permitted by law.

**RISK FACTORS**

*An investment in our securities carries a significant degree of risk. You should carefully consider the following risks, as well as the other information contained in this prospectus, including our historical financial statements and related notes included elsewhere in this prospectus, before you decide to purchase our securities. Any one of these risks and uncertainties has the potential to cause material adverse effects on our business, prospects, financial condition and operating results which could cause actual results to differ materially from any forward-looking statements expressed by us and a significant decrease in the value of our common shares. Refer to "Special Note Regarding Forward-Looking Statements."*

*We may not be successful in preventing the material adverse effects that any of the following risks and uncertainties may cause. These potential risks and uncertainties may not be a complete list of the risks and uncertainties facing us. There may be additional risks and uncertainties that we are presently unaware of, or presently consider immaterial, that may become material in the future and have a material adverse effect on us. You could lose all or a significant portion of your investment due to any of these risks and uncertainties.*

**Risks Related to Our Business and Industry**

***Our long-term success is highly dependent on our ability to identify and secure appropriate sites.***

One of the key means of achieving our growth strategies will be through opening and operating new group homes on a profitable basis for the foreseeable future. We opened 11 group homes by March 31, 2024. We opened 18 new group homes in the fiscal year ended March 31, 2025. It is management's goal to open and operate 48 group homes by the end of the fiscal year ending March 31, 2026. We need to identify target markets where we can enter or expand, taking into account numerous factors such as the locations of our current group homes, demographics, the number of disabled people in the area needing services and information gathered from various sources. We may not be able to open our planned new group homes within budget or on a timely basis, if at all, given the uncertainty of these factors, which could adversely affect our business, financial condition and results of operations. As we operate more group homes, our rate of expansion relative to the size of our group homes base will eventually decline.

The number and timing of new group homes opened during any given period may be negatively impacted by a number of factors including, without limitation:

● competition in existing and new markets, including competition for group home sites;

● the ability to negotiate suitable lease terms;

● recruitment and training of qualified personnel in the local market;

● our ability to obtain all required governmental permits, including zonal approvals, on a timely basis;

● our ability to control construction and development costs of new group homes;

● landlord delays; and

● the cost and availability of capital to fund construction costs and pre-opening costs.

Accordingly, we cannot assure you that we will be able to successfully expand as we may not correctly analyze the suitability of a location or anticipate all of the challenges imposed by expanding our operations. Our growth strategy, and the substantial investment associated with the development of each new group home, may cause our operating results to fluctuate and be unpredictable or adversely affect our business, financial condition or results of operations. If we are unable to expand in existing markets or penetrate new markets, our ability to increase our sales and profitability may be materially harmed or we may face losses.

***Our Japanese group homes could be negatively affected by conditions specific to these areas.***

We are headquartered in Yokohama, Kanagawa, with a branch in Osaka Japan. Adverse changes in demographic, unemployment, economic, regulatory or weather conditions in Japan may have, material adverse effects on our business, financial condition or results of operations. As a result of our concentration in these markets, we have been, and in the future may be, disproportionately affected by adverse conditions in either of these markets compared to other chain facilities with a national footprint.

***Our expansion into new markets may present increased risks due in part to our unfamiliarity with the areas.***

As of June 15, 2025, we operate our group homes in Kanagawa, Tokyo, Chiba, and Saitama, Japan. We plan to continue to increase the number of our group homes in the next several years as part of our expansion strategy. This growth strategy and the substantial investment associated with the development of each new group home may cause our operating results to fluctuate and be unpredictable or adversely affect our business, financial condition or results of operations. Group homes we open in new markets may take longer to reach expected sales and profit levels on a consistent basis and may have higher construction, occupancy or operating costs than group homes we open in existing markets, thereby affecting our overall profitability. New markets may have competitive conditions, consumer tastes and discretionary spending patterns that are more difficult to predict or satisfy than our existing markets and there may be little or no market awareness of our brand in these new markets. We may need to make greater investments than we originally planned in advertising and promotional activity in new markets to build brand awareness. We also may find it more difficult in new markets to hire, motivate and keep qualified employees who share our vision, passion and business culture. If we do not successfully execute our plans to enter new markets, our business, financial condition or results of operations could be materially adversely affected.

***New group homes, once opened, may not be profitable, and the past may not be indicative of future results.***

Our new group homes have historically tended to gain recognition and sales as the number of months in operation increases, with no "honeymoon" period during which sales generally rise at the time of opening. In new markets, the length of time before average sales for new group home stabilize is less predictable as a result of our limited knowledge of these markets and consumers' limited awareness of our brand. There are no assurances that new group homes in the future may not be profitable, and their sales performance may not follow historical patterns. In addition, our average group home sales and comparable group home sales may not increase at the rates achieved over the past several years. Our ability to operate new group homes profitably and increase average group home sales and comparable group home sales will depend on many factors, some of which are beyond our control, including:

● consumer awareness and understanding of our brand and our Daytime Service Support niche;

● general economic conditions, which can affect group home occupancy rate, local labor costs and prices we pay for the food products and other supplies we use;

● competition, either from our competitors in the industry or our own group homes;

● temporary and permanent site characteristics of new group homes; and

● changes in government regulation dealing with the Japanese Act on Providing Comprehensive Support for the Daily Life and Life in Society of Persons with Disabilities .

If our new group homes do not perform as planned, our business and future prospects could be harmed. In addition, if we are unable to achieve our expected average group home sales, our business, financial condition or results of operations could be adversely affected.

***Our sales and profit growth could be adversely affected if comparable group sales are less than we expect.***

The level of comparable group sales growth, which represents the change in year-over-year sales for group homes open for at least 18 months, could affect our sales growth. Our ability to increase comparable group home sales depends in part on our ability to successfully implement our initiatives to build sales. It is possible such initiatives will not be successful, that we will not achieve our target comparable group home sales growth or that the change in comparable group home sales could be negative, which may cause a decrease in our profitability and would materially adversely affect our business, financial condition or results of operations.

***Our failure to manage our growth effectively could harm our business and operating results.***

Our growth plan includes opening new group homes each year. Our existing group home management systems, financial and management controls and information systems may be inadequate to support our planned expansion. Managing our growth effectively will require us to continue to enhance these systems, procedures and controls and to hire, train and retain managers and team members. We may not respond quickly enough to the changing demands that our expansion will impose on our management, facility teams and existing infrastructure which could harm our business, financial condition or results of operations.

***Difficulties recruiting, training and retaining employees could adversely affect our business.***

Our ability to grow our business through planned expansion in the number of group homes we operate depends in large part on our ability to recruit, train employees for such facilities. The industry in dealing with people with disabilities has a high turnover rate. There is no assurance we will be successful in recruiting, training and retaining a sufficient number of employees to support our existing group homes as well as our future group homes from our planned expansion.

In addition to the expected increased costs of labor, if we are unable to identify and recruit a sufficient number of employees to meet our growing needs, we may need to decrease the operating hours of some of our group homes, which would result in lost sales.

We place a heavy emphasis on the qualification and training of our employees and spend a significant amount of time and money training them. Any inability to recruit and retain qualified employees may result in higher turnover and increased labor costs, and could compromise the quality of our service, all of which could adversely affect our business. Any such inability could also delay the planned openings of new group homes and could adversely impact our existing group homes. Such increased costs of attracting qualified employees or delays in group home openings could adversely affect our business, financial condition and results of operations.

***A decline of people with disabilities where our group homes are located could negatively affect our facility sales.***

Our group homes are primarily located in Tokyo, Kanagawa, Chiba and Saitama area. We depend on servicing people with physical and mental disabilities to our group homes. Factors that may result in declining resident rates include economic or political conditions, changes in government subsidy or other factors, which may adversely affect our business, financial condition or results of operations.

***We have historically received payment for self-support benefits provided by the Japanese government.***

For our operation of group homes, we are dependent on continuous payments for self-support benefits from the Japanese government based on the Comprehensive Support Act for Persons with Disabilities. We are funded under the Act on Providing Comprehensive Support for the Daily Life and Life in Society of Persons with Disabilities [Act No. 123 of November 7, 2005]. Under the Act, we are reimbursed through people who receive disability payments from the government. It is the recipients of these disability checks that pay for our services. We are highly dependent that this Act continues to make these payments to people with disabilities. Our financial performance is heavily reliant on the continuity and structure of government funding programs. If these disability payments are cut or curtailed, it would adversely affect our business.

***Opening new group homes in existing markets may negatively affect sales at our existing group homes.***

The target area of our group homes varies by location, depending on a number of factors, including population density, other local retail and business attractions, area demographics and geography. As a result, the opening of a new group home in or near markets in which we already have group home could adversely affect the revenues of these existing group homes and thereby adversely affect our business, financial condition or results of operations. Existing facilities could also make it more difficult to build our consumer base for a new group home in the same market. Our core business strategy does not entail opening new group homes that we believe will materially affect sales at our existing group homes, but we may selectively open new group homes in and around areas of existing group homes that are operating at or near capacity to effectively serve our guests. Sales cannibalization between our group homes may become significant in the future as we continue to expand our operations and could affect our sales growth, which could, in turn, materially adversely affect our business, financial condition or results of operations.

***Operating results at our facilities could be significantly affected by competition.***

We face significant competition from a variety of competitive group homes. Our competition continues to intensify as competitors open new locations. We also compete with many facilities for site locations and group home-level employees.

***Negative publicity relating to one of our group homes could reduce sales at some or all of our other group homes.***

Our success is dependent in part upon our ability to maintain and enhance the value of our brand and people who need services for their disabilities. We may, from time to time, be faced with negative publicity relating to our group homes and services offered. The negative impact of adverse publicity relating to one group homes may extend far beyond the group home involved to affect some or all of our other group homes, thereby causing an adverse effect on our business, financial condition or results of operations.

The considerable expansion in the use of social media over recent years can further amplify any negative publicity that could be generated by such incidents. Many social media platforms immediately publish the content their subscribers and participants post, often without filters or checks on accuracy of the content posted. Information posted on such platforms may be adverse to our interests and/or may be inaccurate. The dissemination of inaccurate or irresponsible information online could harm our business, reputation, prospects, financial condition, or results of operations, regardless of the information's accuracy. The damage may be immediate without affording us an opportunity for redress or correction.

Additionally, employee claims against us based on, among other things, wage and hour violations, discrimination, harassment or wrongful termination may also create negative publicity that could adversely affect us and divert our financial and management resources that would otherwise be used to benefit the future performance of our operations. A significant increase in the number of these claims or an increase in the number of successful claims could materially adversely affect our business, financial condition or results of operations. Consumer demand for our facilities and our brand's value could diminish significantly if any such incidents or other matters create negative publicity or otherwise erode consumer confidence in us or our group homes, which would likely result in lower sales and could materially adversely affect our business, financial condition or results of operations.

***We must achieve solid occupancy rates at rental prices that enable us to offset the lease.***

Our business depends substantially on property owners leasing to us group homes that meet our criteria on lease terms and work within our business model. We may be unable to negotiate satisfactory leases or other arrangements to operate new group homes, on board new group homes in a timely manner, or renew or replace existing group homes on satisfactory terms or at all. The pricing terms under these leases thus become relatively fixed costs and we must achieve occupancy rates at rental prices that enable us to offset the lease, maintenance and operations costs of each group home in order to be profitable. We may not accurately predict future demand for our group homes, market them in a manner that achieves desired occupancy rates, or set proper rental terms that ensure profitability of each group home or profitability of our group home portfolio in its entirety.

***We rely on information technology, and any material failure, could damage operating our business.***

We rely providing disability services and individual health information systems. Our ability to efficiently and effectively manage our business depends significantly on the reliability and capacity of these systems. Failures of these systems to operate effectively, maintenance problems, upgrading or transitioning to new platforms, or a breach in the security of these systems could result in delays in customer service and reduce efficiency in our operations. Remediation of such problems could result in significant, unplanned capital investments.

***Social media could materially adversely impact our business, financial condition or results of operations.***

Our marketing efforts rely heavily on the use of social media. In recent years, there has been a marked increase in the use of social media platforms, including weblogs (blogs), mini-blogs, chat platforms, social media websites, and other forms of Internet-based communications which allow individuals access to a broad audience of consumers and other interested persons. Many of our competitors are expanding their use of social media, and new social media platforms are rapidly being developed, potentially making more traditional social media platforms obsolete. As a result, we need to continuously innovate and develop our social media strategies in order to maintain broad appeal with guests and brand relevance. We also continue to invest in other digital marketing initiatives that allow us to reach our guests across multiple digital channels and build their awareness of, engagement with, and loyalty to our brand. These initiatives may not be successful, resulting in expenses incurred without the benefit of higher sales or increased brand recognition.

***Our current insurance may not provide adequate levels of coverage against claims.***

There are types of losses we may incur that cannot be insured against or that we believe are not economically reasonable to insure. Such losses could have a material adverse effect on our business, financial condition or results of operations. In addition, our current insurance policies may not be adequate to protect us from liabilities that we incur in our business in areas such as workers' compensation, general liability and property. In the future, our insurance premiums may increase, and we may not be able to obtain similar levels of insurance on reasonable terms, or at all. Any substantial inadequacy of, or inability to obtain, insurance coverage could materially adversely affect our business, financial condition and results of operations. As a public company, we intend to adjust our existing directors' and officers' insurance. While we expect to obtain such coverage, we may not be able to obtain such coverage at all or at a reasonable cost now or in the future. Failure to obtain and maintain adequate directors' and officers' insurance would likely adversely affect our ability to attract and retain qualified officers and directors.

***Failure to obtain and maintain required licenses and permits could or results of operations.***

Our industry is subject to various government regulations, including those relating to the care of people with disabilities. Such regulations are subject to change from time to time. The failure to obtain and maintain licenses, permits and approvals relating to such regulations could adversely affect our business, financial condition or results of operations. Typically, licenses must be renewed annually and may be revoked, suspended or denied renewal for cause at any time if governmental authorities determine that our conduct violates applicable regulations. Difficulties or failure to maintain or obtain the required licenses and approvals could adversely affect our existing group homes and delay or result in our decision to cancel the opening of new group homes, which would adversely affect our business, financial condition or results of operations.

***We may need capital in the future, and we may not be able to raise that capital on favorable terms.***

Developing our business will require significant capital in the future. Historically, our main sources of liquidity have been operating cash flows and financing from financial institutions. As of September 30, 2025, we had accounts payable and accrued expenses of $10,093,000, operating lease liabilities of $3,072,000 and finance lease liabilities of $31,209,000. As of March 31, 2025, we had accounts payable and accrued expenses of $5,542,000, operating lease liabilities of $2,539,000 and finance lease liabilities of $25,784,000. Additionally, as of September 30, 2025 and March 31, 2025, the Company had total borrowings of $35,808,000 and $15,737,000, respectively, of which $22,295,000 and $14,508,000, respectively, was secured by certain of the Company's assets. After the completion of this offering, we do not expect to receive any additional capital contributions. For investment funds for new group homes in Japan, we plan to increase our borrowings from financial institutions in Japan. There can be no assurance that the Company will enter into such agreements on the terms contemplated, if at all, or that any such will be repaid with earnings and within the time period described in the preceding sentence. See "*Use of Proceeds*." To meet our capital needs, we expect to rely on cash flows from operations, the proceeds from this offering, future offerings and other third-party financing. Third-party financing in the future may not, however, be available on terms favorable to us, or at all. Our ability to obtain additional funding will be subject to various factors, including market conditions, our operating performance, lender sentiment and our ability to incur additional debt in compliance with other contractual restrictions such as financial covenants under term loans or other debt documents. These factors may make the timing, amount, or terms and conditions of additional financing unattractive. Our inability to raise capital could impede our growth and could materially adversely affect our business, financial condition or results of operations.

***The loss of a large customer would have an adverse effect on our operating results.***

For the fiscal years ended March 31, 2025 and 2024, there were customers who accounted for more than 10% of the Company's total revenue. There are no guarantees that these customers will continue to generate revenue for us. If the concentration with major customers fails to occur in our future operations, any decline in such customers' transaction volume would lower our revenues, which would adversely affect our operating results.

***It may be difficult for U.S. investors to effect service or judgment against a Japanese company.***

While the Company is organized under the laws of the State of Delaware, the Company's headquarters are located in Japan. Consequently, it may be difficult for investors to affect service of process in the U.S. and to enforce judgments obtained in U.S. courts. It may be difficult or impossible for U.S. investors to collect a judgment against us. Any judgment obtained in the U.S. against us may not be enforceable. (See Also "Enforceability of Civil Liabilities.")

If an event occurs that results in any liability of any of its officers and directors, shareholders will probably have difficulty in enforcing such liabilities, because its officers and directors reside outside of the United States. Even if personal service is accomplished and a judgment is entered against a person, the shareholder would then have to locate assets of that person, and register the judgment in the foreign jurisdiction where his or her assets are located. Accordingly, it may be difficult to enforce any liabilities against its officers and directors. (See Also "Enforceability of Civil Liabilities.")

***Changes in the operations, regulations, or financial condition of the unconsolidated entity could adversely affect the value of the Company's investment.***

The Company holds a 100% interest in a non-profit entity that operates nursing homes in Japan. The Company does not have voting rights, decision-making authority, or the ability to direct the activities of the entity that most significantly affect its economic performance, and the entity's financial results are not consolidated in the Company's financial statements. As a result, the Company's ability to influence the operations or realize economic benefits from this investment is limited. Changes in the operations, regulations, or financial condition of the entity could adversely affect the value of the Company's investment. See "Note 4 — Investment in unconsolidated entity" of the financial statements for additional information.

**Risks Related to Management and Employees**

***Voting power is concentrated, minority shareholders are prevented from influencing corporate decisions.***

Currently, Japan Lifestyle No. 1 Investment Limited Partnership beneficially owns an aggregate of 19,475,000 shares of our Common Stock, which represents 95% of the voting power of our outstanding capital stock. Following this offering, Japan Lifestyle No. 1 Investment Limited Partnership will control approximately 82.9% of the voting power of our outstanding capital stock if all the Common Stock being offered are hereby sold (or 81.3% of our outstanding voting power if the underwriters' option to purchase additional shares is exercised in full). As a result, Japan Lifestyle No. 1 Investment Limited Partnership will have majority voting power over all matters requiring stockholder votes, including: the election of directors; mergers, consolidations and acquisitions; the sale of all or substantially all of our assets and other decisions affecting our capital structure; amendments to our certificate of incorporation or our bylaws; and our winding up and dissolution.

This concentration of voting power may delay, deter or prevent acts that would be favored by our other stockholders. The interests of Japan Lifestyle No. 1 Investment Limited Partnership may not always coincide with our interests or the interests of our other stockholders. This concentration of voting power may also have the effect of delaying, preventing or deterring a change in control of us. Also, Japan Lifestyle No. 1 Investment Limited Partnership may seek to cause us to take courses of action that, in his judgment, could enhance his investment in us, but which might involve risks to our other stockholders or adversely affect us or our other stockholders, including investors in this offering. As a result, the market price of our common stock could decline, or stockholders might not receive a premium over the current market price of our common stock upon a change in control. In addition, this concentration of voting power may adversely affect the trading price of our common stock because investors may perceive disadvantages in owning shares in a company with significant stockholders. See "*Executive and Director Compensation*" and "*Description of Securities*."

***As a controlled company, we are not subject to all of the corporate governance rules of the Nasdaq.***

The "controlled company" exception to the Nasdaq Capital Market rules provides that a company of which more than 50% of the voting power is held by an individual, group or another company, a "controlled company," need not comply with certain requirements of the Nasdaq Capital Market corporate governance rules. As of the date of this prospectus, Japan Lifestyle No. 1 Investment Limited Partnership beneficially owns an aggregate of 19,475,000 shares of our Common Stock, which represents 95% of the voting power of our outstanding capital stock. Following this offering, Japan Lifestyle No. 1 Investment Limited Partnership will control approximately 82.9% of the voting power of our outstanding capital stock if all the Common Stock being offered are hereby sold (or 81.3% of our outstanding voting power if the underwriters' option to purchase additional shares is exercised in full). If we obtain a listing on Nasdaq Capital Market, we will be a "controlled company" within the meaning of the corporate governance rules of the Nasdaq. Controlled companies are exempt from the Nasdaq's corporate governance rules requiring that listed companies have (i) a majority of the Board of Directors consist of "independent" directors under the listing standards of the Nasdaq, (ii) a nominating/corporate governance committee composed entirely of independent directors and a written nominating/corporate governance committee charter meeting the requirements of the Nasdaq, and (iii) a compensation committee composed entirely of independent directors and a written compensation committee charter meeting the requirements of the Nasdaq. We intend to utilize certain of these exemptions. More specifically, although we intend to have a majority of independent directors on our Board of Directors, we do not intend to have a nomination and corporate governance committee or a compensation committee. Accordingly, you may not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the Nasdaq. See "*Management — Board Committees and Director Independence — Controlled Company and Director Independ*ence."

 ****

***The loss of senior management team and other key employees, could have an adverse effect on our results of operations.***

Our success depends largely upon the continued services of our key executives. We also rely on our leadership team in setting our strategic direction, operating our business, identifying, recruiting and training key personnel, identifying expansion opportunities, arranging necessary financing, and for general and administrative functions. From time to time, there may be changes in our executive management team resulting from the hiring or departure of executives, which could disrupt our business. The loss or replacement of one or more of our executive officers or other key employees could have a serious adverse effect on our business, financial condition or results of operations.

We might not be successful in continuing to attract and retain qualified personnel. Failure to identify, hire and retain necessary key personnel could have a material adverse effect on our business, financial condition or results of operations.

***Management does not have experience managing a U.S. public company.***

Following the closing of this offering, we will be subject to various regulatory requirements, including those of the SEC and the Nasdaq Capital Market. These requirements include recordkeeping, financial reporting and corporate governance rules and regulations. Our management team does not have experience in managing a U.S. public company and, historically, has not had the resources typically found in a public company. Our internal infrastructure may not be adequate to support our increased reporting obligations and we may be unable to hire, train or retain necessary staff and may be reliant on engaging outside consultants or professionals to overcome our lack of experience or employees. Our business, financial condition or results of operations could be adversely affected if our internal infrastructure is inadequate, including if we are unable to engage outside consultants or are otherwise unable to fulfil our public company obligations.

***Labor disputes may disrupt our operations and affect our results of operations.***

As an employer, we are presently, and may in the future be, subject to various employment-related claims, such as individual or class actions or government enforcement actions relating to alleged employment discrimination, employee classification and related withholding, wage-hour, labor standards or healthcare and benefit issues. The courts in Japan tend to favor employees, and arbitrary dismissals can lead to legal issues. Employers are required to show socially acceptable reasons for any termination of employment, which means providing a valid reason for termination. Advance notice or payment in lieu of notice of termination is also mandatory. Any future actions brought against us and successful in whole or in part, may affect our ability to compete or could materially adversely affect our business, financial condition or results of operations.

***Changes in employment laws may adversely affect our business, results of operations or cash flow.***

Various labor laws govern the relationship with our employees and affect operating costs. These laws include employee classification as exempt/non-exempt for overtime and other purposes, minimum wage requirements, unemployment tax rates, workers' compensation rates, and other wage and benefit requirements. Significant additional government-imposed increases in the following areas could materially affect our business, financial condition, operating results or cash flow:

● minimum wages;

● mandatory health benefits;

● vacation accruals;

● paid leaves of absence, including paid sick leave; and

● tax reporting.

**Risks Related to Legal, Regulatory, Environmental, Intellectual Property and Privacy Matters**

***Compliance with environmental laws may negatively affect our business.***

We are subject to environmental laws. Third parties may also make claims against the owners or operators of properties for personal injuries and property damage associated with releases of, or actual or alleged exposure to, such hazardous or toxic substances at, on or from our facilities. Environmental conditions relating to releases of hazardous substances at prior, existing or future facility sites could materially adversely affect our business, financial condition or results of operations.

***Governmental regulation may adversely affect our business, financial condition or results of operations.***

We are subject to various government regulations. Our facilities are subject licensing and regulation by public health department, other agencies. We may experience material difficulties or failures in obtaining the necessary licenses, approvals or permits for our group homes, which could delay planned group home openings or affect the operations at our existing group homes. In addition, stringent and varied requirements of local regulators with respect to zoning, land use and environmental factors could delay or prevent development of new group homes in particular locations.

In Japan, with respect to persons with disabilities, the Act for Eliminating Discrimination against Persons with Disabilities (Act No. 65 of 2013, hereinafter referred to as the "Disability Discrimination Act") prohibits governments and businesses from engaging in unfair discriminatory treatment on the grounds of disability and prescribes that they are required to provide reasonable accommodation (companies must endeavour to provide reasonable accommodation). The Act on Employment Promotion Etc. of Persons with Disabilities (Act No. 123 of 1960) prohibits businesses from taking discriminatory measures in the area of employment based on disability and requires provision of reasonable accommodation.

<u>Environmental Regulations</u>

There are various environmental-related laws in Japan, including the Air Pollution Control Act (Act No. 97 of June 10, 1968, as amended), Water Pollution Prevention Act (Act No. 138 of December 25, 1970, as amended), Soil Contamination Countermeasures Act (Act No. 53 of May 29, 2002, as amended), and Noise Regulation Act (Act No. 98 of June 10, 1968, as amended). In May 2019, the Diet, Japan's parliament, enacted the Act on Promoting Food Loss Reduction (Food Loss Act) (Act No. 19 of 2019 (Reiwa 1).)

<u>Regulations on Advertising</u>

The Premiums and Representations Act (Act No. 134 of May 15, 1962) stipulates the restricted methods and means of various advertisements, representations, and sales promotions, in a broad sense. When we advertise our facilities, we must provide appropriate information under this act, so as not to mislead our customers. We comply with these regulations.

<u>Regulations on Lease Agreements</u>

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). The terms and conditions of our lease agreements are consistent with these laws and are valid and enforceable as provided for in these agreements.

<u>Fire Protection Act</u>

Facilities must maintain and inspect proper fire protection equipment in accordance with the Fire Protection Act for Fire Prevention and Evacuation. In addition, the security of evacuation routes and measures in the event of a fire must also meet the standards stipulated by law.

<u>Building Code</u>

Designing or renovating a facility building requires obtaining the appropriate permits in accordance with the Building Code. It is important to ensure that the structure, safety, and barrier-free measures of buildings meet the standards established by law.

**General Risks**

***Failure to implement and maintain effective internal controls can have an adverse effect on our securities.***

As a public company, we would be required to maintain internal control over financial reporting and to report any material weaknesses in such internal control. Further, we will be required to report any changes in internal controls on a quarterly basis. In addition, we would be required to furnish a report by management on the effectiveness of internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act. We will design, implement, and test the internal controls over financial reporting required to comply with these obligations. If we identify material weaknesses in our internal control over financial reporting, if we are unable to comply with the requirements of Section 404 in a timely manner or assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of its internal control over financial reporting when required, investors may lose confidence in the accuracy and completeness of our financial reports and the value of our securities could be negatively affected. We also could become subject to investigations by the Commission or other regulatory authorities, which could require additional financial and management resources.

***Changes to accounting rules may adversely affect our business, financial condition or results of operations.***

Changes to existing accounting rules or regulations may impact our business, financial condition or results of operations. Other new accounting rules or regulations and varying interpretations of existing accounting rules or regulations have occurred and may occur in the future. For instance, accounting regulatory authorities have recently issued new accounting rules which require lessees to capitalize operating leases in their financial statements in the next few years. When adopted, such a change would require us to record significant operating lease obligations on our balance sheet and make other changes to our financial statements. This and other future changes to accounting rules or regulations could materially adversely affect our business, financial condition or results of operations.

***As an emerging growth company, our auditor is not required to attest if our internal controls are effective.***

Our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting while we are an emerging growth company. This means that the effectiveness of our financial operations may differ from our peer companies in that they may be required to obtain independent registered public accounting firm attestations as to the effectiveness of their internal controls over financial reporting and we are not. While our management will be required to attest to internal control over financial reporting and we will be required to detail changes to our internal controls on a quarterly basis, we cannot provide assurance that the independent registered public accounting firm's review process in assessing the effectiveness of our internal controls over financial reporting, if obtained, would not find one or more material weaknesses or significant deficiencies. Further, once we cease to be an emerging growth company and cease to be a smaller reporting company (as described below), we will be subject to independent registered public accounting firm attestation regarding the effectiveness of our internal controls over financial reporting. Even if management finds such controls to be effective, our independent registered public accounting firm may decline to attest to the effectiveness of such internal controls and issue a qualified report.

***We may need capital in the future, and we may not be able to raise that capital on favorable terms.***

Developing our business will require significant capital in the future. After the completion of this initial public offering on the Nasdaq Capital Market, we do not expect to receive any additional capital contributions. To meet our capital needs, we expect to rely on cash flows from operations, the proceeds from this offering, future offerings and other third-party financing. Third-party financing in the future may not, however, be available on terms favorable to us, or at all. Our ability to obtain additional funding will be subject to various factors, including market conditions, our operating performance, lender sentiment and our ability to incur additional debt in compliance with other contractual restrictions such as financial covenants under term loans or other debt documents. These factors may make the timing, amount, or terms and conditions of additional financing unattractive. Our inability to raise capital could impede our growth and could materially adversely affect our business, financial condition or results of operations.

***Our certificate of incorporation and bylaws makes the State S of Delaware will be the sole forum for legal disputes.***

This exclusive forum provision may limit a shareholder's ability to bring a claim in a judicial forum of its choosing for disputes with us or our directors, officers or other employees, which may discourage lawsuits against us or our directors, officers or other employees. In addition, shareholders who do bring a claim in the state or federal court in the State of Delaware could face additional litigation costs in pursuing any such claim, particularly if they do not reside in or near Delaware. The state or federal court of the State of Delaware may also reach different judgments or results than would other courts, including courts where a shareholder would otherwise choose to bring the action, and such judgments or results may be more favorable to us than to our shareholders. However, the enforceability of similar exclusive forum provisions in other companies' certificates of incorporation have been challenged in legal proceedings, and it is possible that a court could find this type of provision to be inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings. If a court were to find the exclusive forum provision contained in our certificate of incorporation and our bylaws to be inapplicable or unenforceable in an action, we might incur additional costs associated with resolving such action in other jurisdictions.

***By purchasing common stock in this offering, you are bound by the fee-shifting provision in our bylaws.***

Section 7.4 of our bylaws provides that "[i]f any action is brought by any party against another party, relating to or arising out of these Bylaws, or the enforcement hereof, the prevailing party shall be entitled to recover from the other party reasonable attorneys' fees, costs and expenses incurred in connection with the prosecution or defense of such action, provided that the provisions of this sentence shall not apply with respect to "internal corporate claims" as defined in Section 109(b) of the DGCL."

Our bylaws provide that for this section, the term "attorneys' fees" or "attorneys' fees and costs" means the fees and expenses of counsel to the Company and any other parties asserting a claim subject to Section 7.4 of the bylaws, which may include printing, photocopying, duplicating and other expenses, air freight charges, and fees billed for law clerks, paralegals and other persons not admitted to the bar but performing services under the supervision of an attorney, and the costs and fees incurred in connection with the enforcement or collection of any judgment obtained in any such proceeding.

We adopted the fee-shifting provision to eliminate or decrease nuisance and frivolous litigation. We intend to apply the fee-shifting provision broadly to all actions except for claims brought under the Exchange Act and Securities Act.

There is no set level of recovery required to be met by a plaintiff to avoid payment under this provision. Instead, whoever is the prevailing party is entitled to recover the reasonable attorneys' fees, costs and expenses incurred in connection with the prosecution or defense of such action. Any party who brings an action, and the party against whom such action is brought under Section 7.4 of our bylaws, which could include, but is not limited to former and current shareholders, Company directors, officers, affiliates, legal counsel, expert witnesses and other parties, are subject to this provision. Additionally, any party who brings an action, and the party against whom such action is brought under Section 7.4 of our bylaws, which could include, but is not limited to former and current shareholders, Company directors, officers, affiliates, legal counsel, expert witnesses and other parties, would be able to recover fees under this provision.

In the event you initiate or assert a claim against us, in accordance with the dispute resolution provisions contained in our Bylaws, and you do not, in a judgment prevail, you will be obligated to reimburse us for all reasonable costs and expenses incurred in connection with such claim, including, but not limited to, reasonable attorney's fees and expenses and costs of appeal, if any. Additionally, this provision in Section 7.4 of our bylaws could discourage shareholder lawsuits that might otherwise benefit the Company and its shareholders.

THE FEE SHIFTING PROVISION CONTAINED IN THE BYLAWS IS NOT INTENDED TO BE DEEMED A WAIVER BY ANY HOLDER OF COMMON STOCK OF THE COMPANY'S COMPLIANCE WITH THE U.S. FEDERAL SECURITIES LAWS AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER. THE FEE SHIFTING PROVISION CONTAINED IN THE BYLAWS DO NOT APPLY TO CLAIMS BROUGHT UNDER THE EXCHANGE ACT AND SECURITIES ACT.

**Risks Related to This Offering and Ownership of Our Common Stock**

***There can be no assurance that we will be able to comply with the Nasdaq Capital Market's listing standards.***

Prior to this offering, there has been no public market for shares of our common stock. Accordingly, in connection with the filing of the registration statement of which this prospectus forms a part, we intend to apply for listing on the Nasdaq Capital Market. Assuming that our common stock is listed and after the consummation of this offering, there can be no assurance any broker will be interested in trading our common stock. Therefore, it may be difficult to sell your shares of common stock if you desire or need to sell them. Our underwriters are not obligated to make a market in our common stock, and even if it makes a market, it can discontinue market making at any time without notice. Neither we nor the underwriters can provide any assurance that an active and liquid trading market in our common stock will develop or, if developed, that such a market will continue.

If we are successful in obtaining listing on the Nasdaq Capital Market, there is no guarantee that we will be able to maintain such a listing for any period of time by perpetually satisfying the continued listing requirements. Our failure to continue to meet these requirements may result in our common stock being delisted from the Nasdaq Capital Market.

***The market price of our common stock may be volatile, and you could lose all or part of your investment.***

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

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

We cannot predict the prices at which our common stock will trade. The initial public offering price of our common stock will be determined by negotiations between us and the underwriters and may not bear any relationship to the market price at which our common stock will trade after this offering or to any other established criteria of the value of our business and prospects, and the market price of our common stock following this offering may fluctuate substantially and may be lower than the initial public offering price. The market price of our common stock following this offering will depend on a number of factors, including those described in this "Risk Factors" section, many of which are beyond our control and may not be related to our operating performance. In addition, the limited public float of our common stock following this offering will tend to increase the volatility of the trading price of our common stock. These fluctuations could cause you to lose all or part of your investment in our common stock, since you might not be able to sell your shares at or above the price you paid in this offering. Factors that could cause fluctuations in the market price of our common stock include, but are not limited to, the following:

● actual or anticipated changes or fluctuations in our results of operations;

● the financial projections we may provide to the public, any changes in these projections, or our failure to meet these projections;

● announcements by us or our competitors of new products or new or terminated significant contracts, commercial relationships, or capital commitments;

● industry or financial analyst or investor reaction to our press releases, other public announcements, and filings with the SEC;

● rumors and market speculation involving us or other companies in our industry;

● price and volume fluctuations in the overall stock market from time to time;

● changes in operating performance and stock market valuations of other technology companies generally, or those in our industry in particular;

● the expiration of market stand-off or contractual lock-up agreements and sales of shares of our common stock by us or our stockholders;

● failure of industry or financial analysts to maintain coverage of us, changes in financial estimates by any analysts who follow our Company, or our failure to meet these estimates or the expectations of investors;

● actual or anticipated developments in our business, or our competitors' businesses, or the competitive landscape generally;

● litigation involving us, our industry, or both, or investigations by regulators into our operations or those of our competitors;

● developments or disputes concerning our intellectual property rights, our products, or third-party proprietary rights;

● announced or completed acquisitions of businesses or technologies by us or our competitors;

● new laws or regulations or new interpretations of existing laws or regulations applicable to our business;

● any major changes in our management or our Board of Directors;

● general economic conditions and slow or negative growth of our markets; and

● other events or factors, including those resulting from war, incidents of terrorism, or responses to these events.

In addition, the stock market in general has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of companies. Broad market and industry factors may seriously affect the market price of our common stock, regardless of our actual operating performance. In addition, in the past, following periods of volatility in the overall market and the market prices of a particular company's securities, securities class action litigation has often been instituted against that company. Securities litigation, if instituted against us, could result in substantial costs and divert our management's attention and resources from our business. This could materially adversely affect our business, financial condition, results of operations, and prospects.

***Our management team will have broad discretion over the use of the net proceeds from this offering.***

The net proceeds from this offering will be immediately available to our management to use at their discretion. Accordingly, our management will have significant discretion and flexibility in applying the net proceeds of this offering. You will be relying on the judgment of our management with regard to the use of these net proceeds, and you will not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used appropriately. It is possible that the net proceeds will be invested in a way that does not yield a favorable, or any, return for us or our stockholders. The failure of our management to use such funds effectively could have a material adverse effect on our business, prospects, financial condition, and results of operation.

***If we are unable to obtain additional funding when needed, our business operations will be harmed.***

As we take steps in the commercialization and marketing of our products and services or respond to potential opportunities and/or adverse events, our working capital needs may change. We anticipate that if our cash and cash equivalents are insufficient to satisfy our liquidity requirements, we will require additional funding to sustain our ongoing operations and to continue our research and development activities. We do not have any contracts or commitments for additional funding, and there can be no assurance that financing will be available in amounts or on terms acceptable to us, if at all, if needed. The inability to obtain additional capital will restrict our ability to grow and may reduce our ability to conduct business operations. If we are unable to obtain additional financing to finance a revised growth plan, we will likely be required to curtail such plans or cease our business operations. Any additional equity financing may involve substantial dilution to our then existing shareholders.

***Our common stock may be subject to the "penny stock" rules which makes it more difficult to resell.***

Our common stock may be subject to "penny stock" rules (generally defined as non-exchange traded stock with a per-share price below $5.00) in the future. While our common stock will not be considered "penny stock" following this offering since they will be listed on the Nasdaq Capital Market, if we are unable to maintain that listing and our common stock is no longer listed on the Nasdaq, unless we maintain a per-share price above $5.00, our common stock will become "penny stock." These rules impose additional sales practice requirements on broker-dealers that recommend the purchase or sale of penny stocks to persons other than those who qualify as "established customers" or "accredited investors." For example, broker-dealers must determine the appropriateness for non-qualifying persons of investments in penny stocks. Broker-dealers must also provide, prior to a transaction in a penny stock not otherwise exempt from the rules, a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, disclose the compensation of the broker-dealer and its salesperson in the transaction, furnish monthly account statements showing the market value of each penny stock held in the customer's account, provide a special written determination that the penny stock is a suitable investment for the purchaser, and receive the purchaser's written agreement to the transaction.

Legal remedies available to an investor in "penny stocks" may include the following:

● If a "penny stock" is sold to the investor in violation of the requirements listed above, or other federal or states securities laws, the investor may be able to cancel the purchase and receive a refund of the investment.

● If a "penny stock" is sold to the investor in a fraudulent manner, the investor may be able to sue the persons and firms that committed the fraud for damages.

These requirements may have the effect of reducing the level of trading activity, if any, in the secondary market for a security that becomes subject to the penny stock rules. The additional burdens imposed upon broker-dealers by such requirements may discourage broker-dealers from effecting transactions in our securities, which could severely limit the market price and liquidity of our securities. These requirements may restrict the ability of broker-dealers to sell our common stock and may affect your ability to resell our common stock.

Many brokerage firms will discourage or refrain from recommending investments in penny stocks. Most institutional investors will not invest in penny stocks. In addition, many individual investors will not invest in penny stocks due, among other reasons, to the increased financial risk generally associated with these investments.

For these reasons, penny stocks may have a limited market and, consequently, limited liquidity. We can give no assurance at what time, if ever, our common stock will not be classified as a "penny stock" in the future.

***You will experience substantial dilution as a result of this offering and additional dilution in the future.***

You will incur immediate and substantial dilution as a result of this offering. After giving effect to the sale by us of up to 3,000,000 shares of common stock offered in this offering, at an assumed public offering price of $5.00 per share which is the midpoint of the estimated initial public offering price range set forth on the cover page of this prospectus., and after deducting the underwriters' discounts and commissions and other estimated offering expenses payable by us, investors in this offering can expect an immediate dilution of approximately $4.26 per share , assuming an initial public offering price of $5.00, which is the midpoint of the estimated initial public offering price range set forth on the cover page of this prospectus. See "Dilution." In addition, you may experience further dilution to the extent that additional shares of Common Shares are issued upon exercise of outstanding options we may grant from time to time.

***Shares eligible for future sale may adversely affect the market.***

From time to time, certain of our stockholders may be eligible to sell all or some of their shares of Common Stock by means of ordinary brokerage transactions in the open market pursuant to Rule 144 promulgated under the Securities Act, subject to certain limitations. In general, pursuant to Rule 144, non-affiliate stockholders may sell freely after six months, subject only to the current public information requirement. Affiliates may sell after six months, subject to the Rule 144 volume, manner of sale (for equity securities), current public information, and notice requirements. Of the approximately 20,500,000 shares of our Common Stock outstanding as of September 1, 2025, none of such shares are tradable without restriction. Given the limited trading of our Common Stock, resale of even a small number of shares of our Common Stock pursuant to Rule 144 or an effective registration statement may adversely affect the market price of our common stock.

***Anti-takeover provisions in our certificate of incorporation and bylaws could impair a takeover attempt.***

The Company's certificate of incorporation and bylaws contain provisions that could have the effect of delaying or preventing changes in control or changes in our management without the consent of our board of directors. These provisions include:

● no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;

● the ability of our board of directors to determine whether to issue shares of our preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer;

● limiting the liability of, and providing indemnification to, our directors and officers;

● providing that a special meeting of the stockholders may only be called by a majority of the board of directors;

● providing that directors may be removed prior to the expiration of their terms by the affirmative vote of the holders of not less than two-thirds (2/3) of the voting power of the issued and outstanding stock entitled to vote;

● providing that the bylaws may be altered, amended or repealed by the board of directors by an affirmative vote of a majority of the board of directors at any regular meeting of the board of directors; and

● advance notice procedures that stockholders must comply with in order to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders' meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer's own slate of directors or otherwise attempting to obtain control of the Company.

These provisions, alone or together, could delay hostile takeovers and changes in control of the Company or changes in our board of directors and management.

Any provision of our certificate of incorporation or bylaws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our security holders to receive a premium for their securities and could also affect the price that some investors are willing to pay for our securities.

***Provisions in our charter documents and Delaware law may delay or prevent our acquisition by a third party.***

Our amended and restated certificate of incorporation and amended and restated bylaws, and Delaware law, contain several provisions that may make it more difficult for a third party to acquire control of us without the approval of our Board of Directors. These provisions may make it more difficult or expensive for a third party to acquire a majority of our outstanding equity interests. These provisions also may delay, prevent or deter a merger, acquisition, tender offer, proxy contest or other transaction that might otherwise result in our stockholders receiving a premium over the market price for their common stock. See "*Description of Securities*."

***We have never paid dividends on our common stock and have no plans to do so in the future.***

Holders of shares of our common stock are entitled to receive such dividends as may be declared by our Board of Directors. To date, we have paid no cash dividends on our shares of common stock, and we do not expect to pay cash dividends on our common stock in the foreseeable future. We intend to retain future earnings, if any, to provide funds for the operations of our business. Therefore, any return investors in our common stock may have will be in the form of appreciation, if any, in the market value of their shares of common stock. See "*Dividend Policy*."

***We will indemnify and hold harmless our officers and directors to the maximum extent permitted by Delaware law.***

Our certificate of incorporation, as amended, provides that we will indemnify and hold harmless our officers and directors against claims arising from our activities to the maximum extent permitted by Delaware law. If we were called upon to perform under our indemnification obligations, then the portion of our assets expended for such a purpose would reduce the amount otherwise available for our business.

**SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS**

This prospectus contains forward-looking statements that involve risks and uncertainties. The forward-looking statements are contained principally in "Prospectus Summary," "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Business." In some cases, you can identify forward-looking statements by terms such as "target," "may," "might," "will," "objective," "intend," "should," "could," "can," "would," "expect," "believe," "design," "estimate," "continue," "predict," "potential," "plan," "anticipate" or the negative of these terms, and similar expressions intended to identify forward-looking statements. These statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties. Given these assumptions, risks and uncertainties, you should not place undue reliance on these forward-looking statements. All forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that we expected, including:

● our ability to successfully maintain increases in our comparable facility sales;

● our ability to successfully execute our growth strategy and open new facilities that are profitable;

● our ability to expand in existing and new markets;

● our projected growth in the number of our facilities;

● macroeconomic conditions and other economic factors;

● our ability to compete with many other facilities;

● minimum wage increases and mandated employee benefits that could cause a significant increase in our labor costs;

● the failure of our information technology systems or the breach of our network security;

● the loss of key members of our management team;

● the impact of governmental laws and regulations; and

● volatility in the price of our common stock.

● those other risk factors described in this prospectus supplement and our reports filed with the SEC and incorporated by reference into this prospectus supplement.

We discuss many of these risks in this prospectus in greater detail under the heading "Risk Factors." Also, these forward-looking statements represent our estimates and assumptions only as of the date of this prospectus. Unless required by United States federal securities laws, we do not intend to update any of these forward-looking statements to reflect circumstances or events that occur after the statement is made.

The market data and certain other statistical information used throughout this prospectus are based on independent industry publications, governmental publications, reports by market research firms or other independent sources. Some data are also based on our good faith estimates. Our estimates have not been verified by any independent source.

You should read this prospectus and the documents that we reference in this prospectus and have filed as exhibits to the registration statement, of which this prospectus is a part, completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

**USE OF PROCEEDS**

We estimate that the net proceeds we will receive from this offering will be $13,269,000 based on an assumed initial public offering price of $5.00 per share, which is the midpoint of the price range set forth on the cover of this prospectus, after deducting the underwriting discounts and commissions of $1,200,000 and estimated offering expenses of $531,000 payable by us. If the underwriters' option to purchase additional shares in this offering from us is exercised in full, our net proceeds will be $15,339,000 after deducting the underwriting discounts and commissions of $1,380,000 and estimated offering expenses of $531,000 payable by us.

Each $1.00 increase (decrease) in the assumed initial public offering price of $5.00 per share of common stock, which is the midpoint of the price range set forth on the cover of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, would increase (decrease) net proceeds to us from this offering by approximately $2,760,000, assuming that the number of shares of common stock offered by us, as set forth on the cover page of this prospectus, remains the same. We may also increase or decrease the number of shares of common stock we are offering. Each 100,000 increase (decrease) in the number of shares of common stock we are offering would increase (decrease) the net proceeds to us from this offering by approximately $460,000, assuming no change in the assumed initial public offering price per share.

We plan to use the net proceeds we receive from this offering for opening new group homes.

Our expected use of net proceeds from this offering represents our current intentions based upon our present plans and business condition. As of the date of this prospectus, we cannot predict with certainty all of the particular uses for the net proceeds to be received upon the completion of this offering or the amounts that we will actually spend. The amounts and timing of our actual use of net proceeds will vary depending on numerous factors. As a result, our management will have broad discretion in the application of the net proceeds of this offering, and investors will be relying on our judgment regarding the application of the net proceeds.

Pending use of the net proceeds from this offering as described above, we may invest the net proceeds in short-and intermediate-term interest-bearing obligations, investment-grade instruments, certificates of deposit or direct or guaranteed obligations of the United States government.

**DIVIDEND POLICY**

No dividends have been declared or paid on our shares of common stock. We do not anticipate paying any cash dividends on shares of our common stock in the foreseeable future. We currently intend to retain any earnings to finance the development and expansion of our business. Any future determination to pay dividends will be at the discretion of our Board of Directors and will be dependent upon then-existing conditions, including our earnings, capital requirements, results of operations, financial condition, business prospects and other factors that our Board of Directors considers relevant. See "*Management's Discussion and Analysis of Financial Condition and Results of Operations*" and "*Certain Relationships and Related Party Transactions*" for additional information regarding our financial condition.

**CAPITALIZATION**

The following table sets forth our capitalization as of September 30, 2025:

● on
 an actual basis; and

● on
 a pro forma as adjusted basis, and to give effect to the (i) sale of 3,000,000 shares of common stock in this offering at
 an assumed initial public offering price of $5.00 (the midpoint of the price range set forth on the cover page of this prospectus)
 after deducting estimated underwriting discounts and estimated offering expenses payable by us, and the application of the net proceeds
 thereof.

The pro forma as-adjusted information below is illustrative only and our capitalization following the completion of the initial public offering is subject to adjustment based on the initial public offering price of our common stock and other terms of the initial public offering determined at pricing. You should read this table together with our financial statements and the related notes included elsewhere in this prospectus and the information under "*Management's Discussion and Analysis of Financial Condition and Results of Operations*."

---

| | | |
|:---|:---|:---|
|  | **As of September 30, 2025** | **As of September 30, 2025** |
| **(in thousands, except share and per share data)** | **Actual** | **Pro Forma**<br> **As Adjusted<sup>(1)(2)</sup>** |
| Cash and cash equivalents | $14858 | 28127 |
| Indebtedness: |  |  |
| Finance lease liabilities | 31209 | 31209 |
| Long-term debt | 35808 | 35808 |
| Stockholder's Equity: |  |  |
| &nbsp;&nbsp;&nbsp;Common stock, $0.000001 par value per share; 300,000,000 shares authorized, 20,500,000 shares issued and outstanding, actual; and 21,500,000 shares issued and outstanding, pro forma as adjusted |  |  |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 337 | 13606 |
| &nbsp;&nbsp;&nbsp;Retained earnings | 5882 | 5882 |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss | (18) | (18) |
| Total stockholders' equity | 6201 | 19470 |
| Total capitalization | $73218 | 86487 |

---

(1) The
 number of shares of common stock to be outstanding after this offering is based on 23,500,000 which is the number of shares
 outstanding on September 30, 2025, assumes no exercise by the Representative of its option to purchase up to an additional 450,000
 shares of common stock to cover over-allotments.

Each $1.00 increase (decrease) in the assumed initial public offering price of $5.00 per share, the midpoint of the price range set forth on the cover of this prospectus, would increase (decrease) our as adjusted cash and cash equivalents, additional paid-in capital, total stockholder's equity and total capitalization by approximately $2,760,000, assuming that the number of shares of common stock offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. We may also increase or decrease the number of shares of common stock we are offering. Each 100,000 increase (decrease) of in the number of shares of common stock we are offering would increase (decrease) our as adjusted cash and cash equivalents, additional paid-in capital, total stockholder's equity and total capitalization by approximately $460,000, assuming no change in the assumed initial public offering price per share, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

**DILUTION**

Dilution is the amount by which the initial public offering price paid by purchasers of shares of our common stock exceeds the net tangible book value per share of our equity interests immediately following the completion of the offering. Net tangible book value represents the amount of our total tangible assets reduced by our total liabilities. Net tangible book value per share represents our net tangible book value divided by the number of shares of our common stock outstanding. The Company defines total tangible assets as total assets less intangible assets (including deferred tax assets and deferred offering costs). As of September 30, 2025, prior to giving effect to the offering, our net tangible book value was $4,093,000 and our net tangible book value per share was $0.20.

After giving effect to (i) the issuance and sale of the 3,000,000 shares of common stock offered in this offering and the application of the estimated net proceeds of this offering received by us, as described in "*Use of Proceeds*," based upon an assumed initial public offering price of $5.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus. This represents an immediate increase in the net tangible book value to our existing stockholder, of $0.54 per share and an immediate dilution to new investors in this offering of $4.26 per share. The following table illustrates this per share dilution net tangible book value to new investors after giving effect to this offering:

The following table illustrates such dilution:

---

| | |
|:---|:---|
|  | **Post-Offering** |
| Assumed initial public offering price per share | $5.00 |
| Net tangible book value per share as of September 30, 2025 | $0.20 |
| Increase in net tangible book value per share attributable to payments by new investors | $0.54 |
| As-adjusted net tangible book value per share immediately after this offering | $0.74 |
| Amount of dilution in net tangible book value per share to new investors in the offering | $4.26 |

---

The following tables summarize, on an as adjusted basis as of September 30, 2025, the differences between existing stockholders and the new investors with respect to the number of shares of our common stock purchased from us, the total consideration paid and the average price per share before deducting the estimated underwriting discounts and the estimated offering expenses payable by us.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Shares<br> purchased** | **Shares<br> purchased** | **Total consideration** | **Total consideration** | **Average<br> price** |
|  | **Number** | **Percent** | **Amount** | **Percent** | **Per share** |
| Existing stockholders | 20500000 | 87.2% | $337000 | 2.2% | $0.02 |
| New investors | 3000000 | 12.8% | $15000000 | 97.8% | $5.00 |
| Total | 23500000 | 100.0% | $15337000 | 100.0% | $0.65 |

---

The as adjusted information as discussed above is illustrative only. Our net tangible book value following the completion of this offering is subject to adjustment based on the actual initial public offering price of our common stock and other terms of this offering determined at the pricing.

**MANAGEMENT'S DISCUSSION AND ANALYSIS OF**

**FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

*You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes and other financial information included elsewhere in this prospectus. Some of the information contained in this discussion and analysis or set forth elsewhere in this prospectus, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. You should review the "Special Note Regarding Forward-Looking Statements" and "Risk Factors" sections of this prospectus for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.*

**Overview**

AMATUHI HOLDINGS, Inc., was incorporated on June 24, 2025 in Delaware to act as the holding company of AMATUHI, Inc. ("AMATUHI") that was incorporated on February 22, 2021 and is an operating company in Japan with the headquarter in Yokohama, Kanagawa and a branch in Osaka. AMATUHI operates under the "AMANEKU" brand in Japan.

We are specialized in designing, constructing and operating group homes for individuals with disabilities. We also focus on providing supportive living environments, particularly for individuals with significant needs through our Daytime Service Support Type group homes. We are expanding within a market characterized by high demand and insufficient supply, positioning ourselves as a key provider addressing critical social needs related to disability care and housing.

In Japan, more than 1 in 10 people are now aged 80 or older, according to the latest national data. And, almost a third of its population is over 65 – an estimated 36.23 million. According to the Japanese Ministry of Health, Labor, and Welfare, the number of people with disabilities in Japan has increased by approximately 10% over the past decade. The breakdown reveals that there are about 4.36 million people with physical disabilities, 1.09 million with intellectual disabilities, and 4.19 million with mental disabilities. Notably, the number of people with mental disabilities has grown significantly. According to Disabled World. (2010, March 14 - Last revised: 2025, January 20) government statistics show that, out of a population of around 127 million, some 3.5 million are physically disabled, 2.5 million are mentally ill and 500,000 are mentally disabled. That's a total of around 6.5 million individuals. Roughly one in 20 people in Japan has some disability or another. As the population ages the supply of disability care and housing becomes more limited.

AMATUHI specializes in providing communal living assistance (group homes) as defined under Japan's "Comprehensive Support Law for Persons with Disabilities." This is a government-regulated sector where services are funded primarily through social security benefits.

We leverage Japanese government funding through the Act on Providing Comprehensive Support for the Daily Life and Life in Society of Persons with Disabilities, [Japanese Act No. 123 of November 7, 2005] to be reimbursed for the services we offer. We operate group homes for people with disabilities, and we also provide construction services specifically focused on developing purpose-built homes designed for people with disabilities and social participation for our residents. These initiatives are designed to support the lives of people with disabilities. Through these initiatives, we aim to create "opportunities" that allow everyone, regardless of their disability, to excel in their own way.

For the fiscal years ended March 31, 2025 and 2024, we generated revenues of $49.1 million and $15.2 million, respectively. We reported net income of $2.4 million and $0.5 million, respectively, and cash flow provided by operating activities of $7.6 million, with working capital of $319 thousand as of March 31, 2025.

We do not know of any trends, demands, commitments, events or uncertainties that will result in, or that are reasonable likely to result in, our liquidity increasing or decreasing in any material way.

AMATUHI is a specialized participant in Japan's disability welfare sector, focused on the designing and constructing and strategic expansion of modern group homes under the AMANEKU brand. We serve individuals with significant care needs through supportive residential environments designed in compliance with Japan's regulated disability care framework. Our integrated model spans designing and constructing group homes, provision of operational support, and long-term leasing, while leveraging public reimbursement programs to address structural gaps in disability housing and care. We intend to list our common stock on the Nasdaq Capital Market under the symbol AMTU.

**Key Financial Performance Indicators**

***Revenues***

Our revenues are primarily derived from our construction service provider, where we offer physical construction services for group homes, that includes designing, supervising, and executing physical construction work to ensure projects are safe, on time, and within budget. Within our construction real estate revenue, we have revenues earned from sales of real estate properties.

Additionally, we derive revenues from operating group homes and providing welfare support services to residents, who may need housing, healthcare, senior care and other support where we are reimbursed for services provided by the Japanese government under the "Comprehensive Support for Persons with Disabilities Act."

***Cost of revenues***

Our cost of revenue is primarily composed of the costs paid to third party contractors for constructing group homes and payroll costs to our employees for providing welfare services.

***Selling, general and administrative expenses***

Selling, general and administrative expenses are primarily composed of personnel costs for general corporate functions and sales and marketing staff and outsourcing expenses.

***Operating profit and operating profit margin***

Operating profit is the difference between our revenue and cost of revenue and selling, general and administrative expenses. Operating profit margin is the profit margin as a percentage of revenue.

***Other income/(expenses)***

From time to time, we have non-recurring, non-operating gains and losses which are reflected through other income/(expenses).

***Interest expenses***

Interest expenses consist of interest expenses arising from borrowings.

**Results of Operations**

***Comparison of Results of Operations for the Six Months Ended September 30, 2025 and 2024***

The following table presents selected comparative results of operations from our consolidated financial statements for the six months ended September 30, 2025, compared to the six months ended September 30, 2024. Our financial results for these periods are not necessarily indicative of the financial results that we will achieve in future periods. Certain totals for the table below may not sum to 100% due to rounding. The data should be read in conjunction with our financial statements included elsewhere in this prospectus.

**(in thousands, except change % data)**

---

| | | | |
|:---|:---|:---|:---|
|  | **Six Months Ended <br> September 30,** | **Six Months Ended <br> September 30,** | **Change <br> (2025 vs. 2024)** |
|  | **2025 ($)** | **2024($)** | **YoY %** |
| **Revenues** |  |  |  |
| &nbsp;&nbsp;&nbsp;Construction real estate revenue - Constructing group homes | 37923 | 10491 | 261.5% |
| &nbsp;&nbsp;&nbsp;Welfare services revenue | 9003 | 2140 | 320.7% |
| &nbsp;&nbsp;&nbsp;Other | 40 | - | 100.0% |
| Total Revenues | 46966 | 12631 | 271.8% |
| Cost of revenues | (34227) | (8524) | 301.5% |
| **Gross Profit** | **12739** | **4107** | **210.2%** |
| Operating expenses: |  |  |  |
| Selling, General and Administrative Expenses | (7113) | (3139) | 126.6% |
| &nbsp;&nbsp;&nbsp;Depreciation expenses | (60) | (25) | 140.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | (7173) | (3164) | 126.7% |
| **Profit from operations** | **5566** | **943** | **490.2%** |
| &nbsp;&nbsp;&nbsp;Other income (expenses), net | (144) | (118) | 22.0% |
| &nbsp;&nbsp;&nbsp;Interest expenses | (796) | (208) | 282.7% |
| **Income before income taxes** | **4626** | **617** | 649.8% |
| Provision for income taxes | (1595) | (210) | 659.5% |
| **Net Income** | **3031** | **407** | **644.7%** |

---

***Revenue***

Revenues were $47.0 million for the six months ended September 30, 2025, presenting growth in sales of approximately $34.3 million, 271.8% increase from the same period in prior year. Our overall sales growth was primarily due to the increase in number of group homes we constructed as well as the increase in the number of group homes we operate during the six months ended September 30, 2025. As of September 30, 2025, we were operating total 38 group homes, up by 20 group homes compared to 18 group homes were operating as of September 30, 2024.

*<u>Disaggregation of Revenue</u>*

The tables below reflect revenue by major source and timing of transfer of goods and services for the six months ended September 30, 2025 and 2024. The Company had no revenue derived from geographical regions outside of Japan during the six months ended September 30, 2025 and 2024. All revenue during the six months ended September 30, 2025 and 2024 was recognized when the performance obligation was satisfied over time.

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended September 30,** | **Six Months Ended September 30,** |
|  | **2025** | **2024** |
| Construction real estate revenue - Constructing group homes | $37923 | $10491 |
| Welfare services revenue | 9003 | 2140 |
| Other | 40 |  |
| &nbsp;&nbsp;&nbsp;Total | $46966 | $12631 |

---

 ****

***Cost of Revenues***

Cost of revenues were $34.2 million for the six months ended September 30, 2025, presenting an increase of $25.7 million or by 301.5%, which reflect the higher direct costs associated with the higher revenues for the six months ended September 30, 2025.

**<u>Development of Facilities:</u>**

Our growth of group homes since the incorporation of AMATUHI Inc.:

● Fiscal year ended March 31, 2022: 3 group homes

● Fiscal year ended March 31, 2023: 5 group homes (cumulatively 8 group homes)

● Fiscal year ended March 31, 2024: 3 group homes (cumulatively 11 group homes)

● Fiscal year ended March 31, 2025: 18 group homes (cumulatively 29 group homes)

● For fiscal year ending March 31, 2026, it is management's goal to open and operate 48 group homes

Note: None of these properties have been sold or closed since acquired.

***Operating Expenses***

Total operating expenses were $7.2 million for the six months ended September 30, 2025, presenting an increase of $4.0 million or by 126.7%. The overall increase was primarily due to the increase in selling, general and administrative expenses such as personnel costs and recruitment expenses resulted from the higher headcount in the six months ended September 30, 2025 to increase the number of group homes and to strengthen headquarters' personnel for future expansion strategies.

***Interest Expenses***

Interest expenses increased by $0.6 million or 282.7% from $0.2 million in the six months ended September 30, 2024 to $0.8 million in the six months ended September 30, 2025 primarily due to the increase in borrowings and finance lease.

***Net Income***

As a result of the foregoing, the net income was $3.0 million during the six months ended September 30, 2025 compared to $0.4 million during the six months ended September 30, 2024, presenting growth of approximately $2.6 million or 644.7%.

***Comparison of Results of Operations for the Fiscal Year Ended March 31, 2025 and 2024***

The following table presents selected comparative results of operations from our audited consolidated financial statements for the fiscal year ended March 31, 2025, compared to the fiscal year ended March 31, 2024. Our financial results for these periods are not necessarily indicative of the financial results that we will achieve in future periods. Certain totals for the table below may not sum to 100% due to rounding. The data should be read in conjunction with our audited financial statements included elsewhere in this prospectus.

**(in thousands, except change % data)**

---

| | | | |
|:---|:---|:---|:---|
|  | **Years Ended March 31,** | **Years Ended March 31,** | **Change <br> (2025 vs. 2024)** |
|  | 2025($) | 2024($) | **YoY %** |
| **Revenues** |  |  |  |
| &nbsp;&nbsp;&nbsp;Construction real estate revenue - Constructing group homes | 28849 | 12104 | 138.3% |
| &nbsp;&nbsp;&nbsp;Construction real estate revenue - Sales of real estate properties | 13056 | - | 100.0% |
| &nbsp;&nbsp;&nbsp;Welfare services revenue | 7182 | 2596 | 176.7% |
| &nbsp;&nbsp;&nbsp;Other | - | 494 | (100.0%) |
| Total Revenues | 49087 | 15194 | 223.1% |
| Cost of revenues | (36450) | (11390) | 220.0% |
| **Gross Profit** | 12637 | 3804 | **232.2%** |
| Operating expenses: |  |  |  |
| &nbsp;&nbsp;&nbsp;Selling, General and Administrative Expenses | (8265) | (2915) | 183.5% |
| &nbsp;&nbsp;&nbsp;Depreciation expenses | (77) | (8) | 862.5% |
| &nbsp;&nbsp;&nbsp;Total operating expenses | (8342) | (2923) | 185.4% |
| **Profit from operations** | 4295 | 881 | **387.5%** |
| &nbsp;&nbsp;&nbsp;Other income (expenses), net | (86) | 62) | (238.7%) |
| &nbsp;&nbsp;&nbsp;Interest expenses | (672) | (182) | 269.2% |
| **Income before income taxes** | 3537 | 761 | 364.8% |
| Provision for income taxes | (1150) | (231) | 397.8% |
| **Net Income** | 2387 | 530 | **350.4%** |

---

 ****

***Revenue***

Revenues were $49.1 million for the fiscal year ended March 31, 2025, presenting growth in sales of approximately $33.9 million, 223.1% increase from the prior year. Our overall sales growth was primarily due to the increase in number of group homes we constructed as well as the increase in the number of group homes we operate in the fiscal year ended March 31, 2025. As of March 31, 2025, we were operating total 29 group homes, up by 18 group homes compared to 11 group homes were operating as of March 31, 2024.

Sales of Real Estate Properties

Additionally, we had revenue of 13.1 million from sales of real estate properties which lead to the higher revenue in the fiscal year ended March 31, 2025. The Company's two transactions in real estate consisted of an off-business focus opportunity. Two properties were referred to the Company by its clients, as an opportunity that offered the Company a favorable balance of risk and return, allowing profits to be realized within a relatively short period of time. The first property was vacant land and second property consisted of land and a building. The Company does not intend to continue engaging in real estate sales transactions in the future.

 ****

*Concentration of Revenues*

For the fiscal years ended March 31, 2025 and 2024, there were customers who accounted for more than 10% of the Company's total revenue. Although we expect our concentration of revenues to vary among customers in future periods depending upon the timing of certain sales, we anticipate that sales to our largest customers will continue to account for a portion of our revenues in future periods. Sales to the large customers present risks which could adversely affect our revenues, including, without limitation, potential disruption to appropriation and spending patterns. Although we do not anticipate that any of our revenues with large customers will be renegotiated, a large number of cancelled or renegotiated business or renegotiation of any of our existing arrangements with our larger customers can have a material adverse effect on our business.

 ****

*<u>Disaggregation of Revenue</u>*

The tables below reflect revenue by major source and timing of transfer of goods and services for the fiscal years ended March 31, 2025, and 2024. The Company had no revenue derived from geographical regions outside of Japan during the fiscal years ended March 31, 2025, and 2024.

---

| | | |
|:---|:---|:---|
|  | **Fiscal Year Ended March 31,** | **Fiscal Year Ended March 31,** |
|  | **2025** | **2024** |
| Construction real estate revenue – Constructing group homes | $28849 | $12104 |
| Construction real estate revenue – Sales of real estate properties | 13056 |  |
| Welfare services revenue | 7182 | 2596 |
| Other | - | 494 |
| Total | $49087 | $15194 |

---

---

| | | |
|:---|:---|:---|
|  | **Fiscal Year Ended March 31,** | **Fiscal Year Ended March 31,** |
|  | **2025** | **2024** |
| <u>Timing of transfer of goods and services</u> |  |  |
| Point in time | $13056 | $- |
| Over time | 36031 | 15194 |
| **Total** | $49087 | $15194 |

---

 ****

***Cost of Revenues***

Cost of revenues were $36.5 million for the fiscal year ended March 31, 2025, presenting an increase of $25.1 million or by 220.0%, which reflect the higher direct costs associated with the higher revenues for the fiscal year ended March 31, 2025.

**<u>Development of Facilities:</u>**

Our growth of group homes since the incorporation of AMATUHI Inc.:

● Fiscal year ended March 31, 2022: 3 group homes

● Fiscal year ended March 31, 2023: 5 group homes (cumulatively 8 group homes)

● Fiscal year ended March 31, 2024: 3 group homes (cumulatively 1 1 group homes)

● Fiscal year end ed March 31, 2025: 18 group homes (cumulatively 29 group homes)

● For fiscal year ending March 31, 2026, it is management's goal to open and operate 4 8 group homes

Note: None of these properties have been sold or closed since acquired.

***Operating Expenses***

Total operating expenses were $8.3 million for the fiscal year ended March 31, 2025, presenting an increase of $5.4 million or by 185.4%. The overall increase was primarily due to the increase in selling, general and administrative expenses resulted from the higher headcount in the fiscal year ended March 31, 2025 to increase the number of group homes and the strengthening of headquarters personnel for future expansion strategies.

***Interest Expenses***

Interest expenses increased by $0.5 million or 269.2% from $0.2 million in the fiscal year ended March 31, 2024 to $0.7 million in the fiscal year ended March 31, 2025 due to the increase in borrowings.

***Net Income***

As a result of the foregoing, the net income was $2.4 million during the fiscal year ended March 31, 2025 compared to $0.5 million during the fiscal year ended March 31, 2024, presenting growth of approximately $1.9 million or 350.4%.

**Liquidity and Capital Resources**

As of September 30, 2025, March 31, 2025 and March 31, 2024, our principal sources of liquidity were cash, cash equivalents and short-term investments of $16.9 million, $13.7 million and $2.0 million, respectively, which were held for working capital purposes. Our short-term investments generally consist of time deposits. Historically, our main sources of liquidity have been operating cash flows and financing from financial institutions.

We believe our existing cash, cash equivalents and short-term investments will be sufficient to meet our needs for at least the next 12 months. Our future capital requirements will depend on many factors including our revenue growth rate, timing of collection and billing, the timing and extent of spending to support our further expansion strategies, as well as expenses associated with our international expansion, including the timing and extent of additional capital expenditures to invest in existing and new office spaces and additional human resources. We may in the future enter into arrangements to acquire or invest in complementary businesses and services, and we may need to seek additional equity or debt financing. In the event that additional financing is needed from outside sources, we may not be able to raise the necessary capital or raise the capital on terms acceptable to us or at all. If we are unable to raise additional capital when desired, our business, results of operations and financial condition could be materially and adversely affected.

**Summary of Cash Flows**

The following table summarizes our cash flows for the periods presented:

(in thousands)

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended September 30,** | **Six Months Ended September 30,** |
|  | **2025** | **2024** |
| **Statement of Cash Flow Data:** |  |  |
| Net cash provided by operating activities | $8491 | $3525 |
| Net cash used in investing activities | (26926) | (11822) |
| Net cash provided by financing activities | 19817 | 14657 |

---

***Cash Flows Provided by Operating Activities***

Net cash provided by operating activities during the six months ended September 30, 2025 was $8.5 million, which resulted from net income of $3.0 million from continuing operations, an increase in contract liabilities and an increase in accounts payable and accrued expenses, partially offset by an increase in accounts receivable and an increase in prepaid expenses and other current assets.

Net cash provided by operating activities during the six months ended September 30, 2024 was $3.5 million, which resulted from net income of $0.4 million from continuing operations, an increase in contract liabilities, partially offset by an increase in prepaid expenses and other current assets.

***Cash Flows Used in Investing Activities***

Net cash used in investing activities during the six months ended September 30, 2025 was $27.0 million, primarily due to the payment for investments in debt securities of $28.3 million, purchase of property of equipment of $19.4 million and the acquisition of subsidiary of $1.9 million, partially offset by payment received from investments in debt securities of $22.9 million.

Net cash used in investing activities during the six months ended September 30, 2024 was $11.8 million, primarily due to the purchase of property and equipment of $13.9 million, partially offset by payment received from short-term loan receivable.

***Cash Flows Provided by Financing Activities***

Net cash provided by financing activities during the six months ended September 30, 2025 was $19.8 million, primarily due to the proceeds received from additional debt of $20.5 million.

Net cash provided by financing activities during the six months ended September 30, 2024 was $14.7 million, primarily due to the proceeds received from additional debt of $14.9 million.

(in thousands)

---

| | | |
|:---|:---|:---|
|  | **Fiscal Years Ended<br> March 31,** | **Fiscal Years Ended<br> March 31,** |
|  | 2025 | 2024 |
| **Statement of Cash Flow Data:** |  |  |
| Net cash provided by operating activities | $7576 | $4815 |
| Net cash used in investing activities | (10459) | (4509) |
| Net cash provided by financing activities | 13998 | 230 |

---

 ****

***Cash Flows Provided by Operating Activities***

Net cash provided by operating activities during the fiscal year ended March 31, 2025 was $7.6 million, which resulted from net income of $2.4 million from continuing operations, an increase in contract liabilities and an increase in accounts payable and accrued expenses, partially offset by an increase in accounts receivable and prepaid expenses and other current assets.

Net cash provided by operating activities during the fiscal year ended March 31, 2024 was $4.8 million, which resulted from net income of $0.5 million from continuing operations, an increase in accounts payable and accrued expenses and contract liabilities.

***Cash Flows Used in Investing Activities***

Net cash used in investing activities during the fiscal year ended March 31, 2025 was $10.5 million, primarily due to purchases of property and equipment of $14.0 million, partially offset by payment received from short-term loan receivable of $4.3 million.

Net cash used in investing activities during the fiscal year ended March 31, 2024 was $4.5 million, primarily due to the payment for short-term loan receivable of $4.5 million.

***Cash Flows Provided by Financing Activities***

Net cash provided by financing activities during the fiscal year ended March 31, 2025 was $14.0 million, primarily due to the proceeds received from additional debt of $14.9 million.

Net cash provided by financing activities during the fiscal year ended March 31, 2024 was $0.2 million, primarily due to the proceeds received from additional debt of $0.5 million.

**Contractual Obligations and Commitments**

As of September 30, 2025, the Company had a total of $81,496,000 in contractual obligations for future payments.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **As of September 30, 2025** | **As of September 30, 2025** | **As of September 30, 2025** | **As of September 30, 2025** | **As of September 30, 2025** |
| <br>**(in thousands)** | **Payments due by period:** | **Payments due by period:** | **Payments due by period:** | **Payments due by period:** | **Payments due by period:** |
|  | **Total** | **Less than <br> 1 year** | **1 – 3 years** | **4 – 5 years** | **More than <br> 5 years** |
| Long-term debt payments | $35927 | $558 | $2126 | $1688 | $31555 |
| Operating lease payments | 3162 | 933 | 1847 | 349.00 | 33.00 |
| Financing lease payments | 42407 | 847 | 3462 | 3413 | 34685 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total** | $81496 | $2338 | $7435 | $5450 | $66273 |

---

As of March 31, 2025, the Company had a total of $53,681,000 in contractual obligations for future payments.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **As of March 31, 2025** | **As of March 31, 2025** | **As of March 31, 2025** | **As of March 31, 2025** | **As of March 31, 2025** |
| <br>**(in thousands)** | **Payments due by period:** | **Payments due by period:** | **Payments due by period:** | **Payments due by period:** | **Payments due by period:** |
|  | **Total** | **Less than <br> 1 year** | **1 – 3 years** | **4 – 5 years** | **More than <br> 5 years** |
| Long-term debt payments | $15856 | $632 | $1171 | $839 | $13214 |
| Operating lease payments | 2630 | 1115 | 1241 | 253.00 | 21.00 |
| Finance lease payments | 35195 | 1376 | 2864 | 2808 | 28147 |
| **Total** | $53681 | $3123 | $5276 | $3900 | $41382 |

---

**Off-Balance Sheet Arrangements**

As of September 30, 2025 and March 31, 2025, the Company did not have any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.

**Capital Expenditures**

Our capital expenditure primarily consists of acquisition of property and equipment.

During the six months ended September 30, 2025 and 2024, we spent $19,445,000 and $13,891,000, respectively, on acquisitions of property and equipment.

During the fiscal years ended March 31, 2025 and 2024, we spent $13,956,000 and $5,000, respectively, on acquisitions of property and equipment.

**Quantitative and Qualitative Disclosure of Market Risks**

***Foreign Currency Risk***

We transact our operating activities in Japanese yen. Foreign exchange risk may arise from future commercial transactions, recognized assets and liabilities, and net investments in foreign operations, if we acquire any. We acknowledge the recent volatility of certain currencies such as the U.S dollar, but believe we are relatively insulated from foreign exchange risk, as our economical transactions are primarily conducted within Japan and using Japanese yen.

 ****

***Commodity and Food Price Risks***

Our profitability is dependent on, among other things, our ability to anticipate and react to changes in the costs of key operating resources. We have been able to partially offset cost increases resulting from a number of factors, including market conditions, shortages or interruptions in supply due to weather or other conditions beyond our control, governmental regulations and inflation, by increasing our menu prices, as well as making other operational adjustments that increase productivity. However, substantial increases in costs and expenses could impact on our operating results to the extent that such increases cannot be offset by menu price increases or operational adjustments.

***Inflation Risk***

The primary inflationary factors affecting our operations are labor costs, and material costs for construction. Our group home operations are subject to federal wage and other laws governing such matters as working conditions, and overtime. Significant numbers of our group home personnel are paid at rates related to the federal minimum wage and, accordingly, increases in the minimum wage could increase our labor costs. To the extent permitted by competition and the economy, we have mitigated increased costs. Substantial increases in costs and expenses could impact our operating results to the extent such increases cannot be passed on to our clientele. Historically, inflation has not had a material effect on the results of operations. Severe increases in inflation, however, could affect the global economies and could have an adverse impact on our business, financial condition or results of operations.

Inflation poses a significant risk to construction costs by increasing expenses for materials, labor, and other inputs, potentially leading to project delays, budget overruns, and reduced profitability. Factors like rising material prices, labor shortages, and supply chain disruptions, exacerbated by inflation, can significantly impact project costs and timelines. Inflation is also responsible for driving up the cost of essential construction materials like steel, lumber, and concrete. Inflation often leads to increased wages for skilled construction workers as they demand higher pay to keep up with the rising cost of living.

While we have been able to partially offset inflation and other changes in the costs of core operating resources by gradually increasing the prices for our services, coupled with more efficient purchasing practices, productivity improvements and greater economies of scale, there can be no assurance that we will be able to continue to do so in the future. From time to time, competitive conditions could limit our pricing flexibility. In addition, macroeconomic conditions could make additional price increases imprudent. There can be no assurance that future cost increases can be offset by increased prices or that increased prices will be fully absorbed by our clientele without any resulting change to their visit frequencies or purchasing patterns. In addition, there can be no assurance that we will generate the same sales growth in an amount sufficient to offset inflationary or other cost pressures.

**Critical Accounting Policies and Estimates**

Our consolidated financial statements and accompanying notes have been prepared in accordance with U.S. GAAP. The preparation of these consolidated financial statements and accompanying notes requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis of making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We have identified certain accounting policies that are significant to the preparation of our consolidated financial statements. These accounting policies are important for an understanding of our financial condition and results of operation. Critical accounting policies are those that are most important to the portrayal of our financial conditions and results of operations and require management's difficult, subjective, or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Certain accounting estimates are particularly sensitive because of their significance to financial statements and because of the possibility that future events affecting the estimate may differ significantly from management's current judgments. While our significant accounting policies are more fully described in Note 2 to the consolidated financial statements included elsewhere in this prospectus, we believe the following critical accounting policies involve the most significant estimates and judgments used in the preparation of our consolidated financial statements.

***Use of Estimates***

The preparation of the consolidated financial statements in conformity with the U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the reporting date, and the reported amounts of revenue and expense during the reporting period. These estimates are based on management's best knowledge of current events and actions that the Company may undertake in the future and include, but are not limited to, revenue recognition, fair values and useful lives of assets acquired and liabilities assumed through business combinations, allowance for credit losses, useful lives of property and equipment and intangible assets, the carrying value of operating lease right-of-use assets and liabilities, impairment of long-lived assets, and valuation allowance against net deferred tax assets. Actual results could differ from those estimates.

***Revenue Recognition***

The Company applies ASC Topic 606, *Revenue from Contracts with Customers* ("ASC 606") for all periods presented in the consolidated financial statements. To determine the appropriate amount of revenue to be recognized in accordance with ASC 606, the Company follows a five-step model as follows:

1 – Identification of the contract with a customer

2 – Identification of the performance obligation in the contract

3 – Determination of the transaction price

4 – Allocation of the transaction price to the performance obligation in the contract

5 – Recognition of revenue when, or as, a performance obligation is satisfied

The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring promised goods or services to a customer. The transaction price is generally fixed. None of the Company's contracts contain a significant financing component. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to government entities.

*<u>Construction real estate sales</u>*

1) Constructing group homes

The Company recognizes revenue from constructing group homes over time as performance obligations are satisfied. These contracts are entered into with third-party customers. All revenues generated from construction and home sale activities are derived from unrelated, third-party customers.

Revenue is generally recognized using an input method based on the ratio of costs incurred to total estimated costs, which the Company believes best reflects its progress toward satisfying the performance obligation.

The average time to complete the construction of a group home typically ranges from six to seven months, depending on project scope, site conditions, and permitting processes. All homes sold to customers are constructed under the Company's direction and control, using third-party subcontractors for portions or all the construction work. The Company is responsible for managing the construction process, including project oversight, design specifications, permitting, and compliance. The Company does not purchase completed group homes from third-party builders for resale.

The Company does not classify group homes under construction or completed group homes awaiting sale as inventory. Instead, all costs incurred on construction contracts are billed to customers as construction progresses. When amounts billed exceed costs incurred, the excess is recorded as contract liabilities, representing cash received in advance for services not yet completed. No inventory is recorded on the balance sheet, as the Company does not own or hold group homes it constructs for resale.

As of March 31, 2025, and 2024, the Company had uncompleted construction contracts, but all services performed up to the balance sheet date had been billed to customers. Instead, amounts billed in excess of costs incurred are recorded as contract liabilities, reflecting cash received in advance for services yet to be completed. The Company's balance sheet does not include inventory related to group homes under construction or completed homes awaiting sale.

When either party to a contract has performed, the Company presents the contract as a contract asset or contract liability, depending on the relationship between the Company's performance and the customer's payment. A contract asset represents the Company's right to consideration for services transferred to the customer. A contract liability represents the Company's obligation to transfer services for which it has already received payment or for which payment is due.

Recognition of revenue and profit is dependent upon a number of factors, including the accuracy of a variety of estimates made at the balance sheet date, such as engineering progress, material quantities, the achievement of milestones, penalty provisions, labor productivity and cost estimates. Variable consideration is included in the estimate of the transaction price only to the extent that a significant reversal would not be probable. Management continuously monitors factors that may affect the quality of its estimates, and material changes in estimates are disclosed accordingly.

The Company currently leases all the group homes it operates. All such leases are entered into with unrelated third-party lessors. The Company does not lease properties from related parties or affiliates.

*<u>Welfare services revenue</u>*

Revenue from welfare services is generated from operating group homes and providing support services to residents. Rental agreement with tenants are accounted for as operating leases. Minimum lease payment (rent) are recognized on a straight-line basis over the term of the respective lease, beginning when the tenant takes possession of, or are granted control over, the physical use of the space. Any excess of straight-line rents recognized over amounts contractually billed is recorded as deferred rents receivable, if any. Revenue from ancillary services, such as food, beverage and personal support services, is recognized over time as the services are provided, in accordance with ASC 606.

The Company also receives government subsidies to support its welfare services. Revenue related to these subsidies is recognized when the related performance obligations are satisfied, and collection is reasonably assured, consistent with ASC 606.

***Business Combination***

Business combination is accounted for under the acquisition method of accounting. This method requires, among other things, allocation of the fair value of purchase consideration to the tangible and intangible assets acquired and liabilities assumed at their estimated fair values on the acquisition date. The excess of the fair value of purchase consideration over the values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair value of assets acquired and liabilities assumed, management makes estimates and assumptions, especially with respect to intangible assets. Management's estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, not to exceed one year from the date of acquisition, the Company may record adjustments to the assets acquired and liabilities assumed, with a corresponding offset to goodwill if new information is obtained related to facts and circumstances that existed as of the acquisition date. After the measurement period, any subsequent adjustments are reflected in the Consolidated Statements of Operations. Acquisition costs, consisting primarily of third-party legal and consulting fees, are expensed as incurred.

 ****

 ****

***Leases***

In accordance with FASB ASC Topic 842, *Leases*, the Company determines if an arrangement is a lease at inception based on whether there is an identified asset and whether the Company controls the use of the identified asset throughout the period of use. The Company classifies leases as either finance or operating. The classification criteria is based on estimates regarding the fair value of the leased asset, minimum lease payments, effective cost of funds, economic life of the asset, and certain other terms in the lease agreements.

As of March 31, 2025 and 2024, the Company's finance lease liability is entirely related to leases with third-party lessors for group homes. These leases are classified as finance leases under ASC 842, meeting the criteria for such classification, including transfer of ownership at the end of the lease term or the presence of a bargain purchase option.

*Operating leases*

Operating leases are included in operating lease right-of-use (ROU) assets, current portion of operating lease liabilities, and non-current operating lease liabilities in the Consolidated Balance Sheets. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date.

For leases with terms greater than 12 months, the Company records a ROU asset and a lease liability representing the present value of future lease payments. The discount rate used to measure the lease asset and liability is determined at the beginning of the lease term using the rate implicit in the lease, or the Company's collateralized incremental borrowing rate. The implicit rate within the Company's leases is generally not determinable and, therefore, the incremental borrowing rate at lease commencement is utilized to determine the present value of lease payments. The Company estimates its incremental borrowing rate based on third-party lender quotes to obtain secured debt in a like currency for a similar asset over a timeframe similar to the term of the lease. For those contracts that include fixed rental payments for both the use of the asset ("lease costs") as well as for other occupancy or service costs relating to the asset ("non-lease costs"), the Company generally includes both the lease costs and non-lease costs in the measurement of the lease asset and liability.

The Company accounts for each lease and any non-lease components associated with that lease as a single lease component for all asset classes. Lease expenses for the Company's operating leases are recognized on a straight-line basis over the lease term except for variable lease costs, which are expensed as incurred. The Company does not recognize ROU assets and operating lease liabilities that arise from leases with an initial lease term of 12 months or less.

*Finance leases*

Finance lease right-of-use assets are recognized within property and equipment, net on the Company's Consolidated Balance Sheets. The Company recognizes interest expense on the finance lease liabilities utilizing the effective interest method. The right-of-use asset is generally amortized to depreciation and amortization expense on a straight-line basis over the lease term unless the lease contains an option to purchase the underlying asset that the Company is reasonably certain to exercise. If the Company is reasonably certain to exercise the purchase option, the asset is amortized over the useful life.

**Jumpstart Our Business Startups Act of 2012**

As a company with less than $1.235 billion in revenues during our last fiscal year, we qualify as an emerging growth company as defined in the Jumpstart Our Business Startups Act enacted in 2012 (the "JOBS Act"). As an emerging growth company, we expect to take advantage of reduced reporting requirements that are otherwise applicable to public companies. These provisions include, but are not limited to:

● being permitted to present only two years of audited financial statements, in addition to any required unaudited interim financial statements, with correspondingly reduced "Management's Discussion and Analysis of Financial Condition and Results of Operations" disclosure in this prospectus;

● not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended;

● reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and registration statements; and

● exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the "Securities Act") for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our consolidated financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.

We may use these provisions until the last day of our fiscal year following the fifth anniversary of the completion of this offering. However, if certain events occur prior to the end of such five-year period, including if we become a "large accelerated filer," our annual gross revenues exceed $1.235 billion or we issue more than $1.07 billion of non-convertible debt in any three-year period, we will cease to be an emerging growth company prior to the end of such five-year period.

To the extent that we continue to qualify as a "smaller reporting company," as such term is defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended, (the "Exchange Act"), after we cease to qualify as an emerging growth company, certain of the exemptions available to us as an emerging growth company may continue to be available to us as a smaller reporting company, including: (i) not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes Oxley Act; (ii) scaled executive compensation disclosures; and (iii) the requirement to provide only two years of audited financial statements, instead of three years.

**CORPORATE HISTORY AND STRUCTURE**

**Overview**

AMATUHI HOLDINGS, Inc. was incorporated in the State of Delaware on June 24, 2025. We conduct business activities principally through our wholly owned operating subsidiaries indicated below.

Upon incorporation, we were authorized to issue 380,000,000 shares of common stock, par value $0.000001 per share, and 20,000,000 shares of preferred stock, par value $0.000001 per share. The total number of issued and outstanding shares of common stock were 20,500,000 and no outstanding shares of preferred stock as of the date of this prospectus.

In connection with this offering, we have conducted the following corporate restructuring steps:

● On June 24, 2025, AMATUHI HOLDINGS, Inc. was incorporated under the laws of the state of Delaware as a business corporation and issued five shares of common stock to Tatsuma Yoshida.

● On July 25, 2025, AMATUHI HOLDINGS, Inc. issued 4,100 shares of common stock to Japan Lifestyle No. 1 Investment Limited Partnership (3,895 shares) and Tatsuma Yoshida (205 shares) in exchange for the 100% equity interest in AMATUHI Inc. Ltd. from Japan Lifestyle No. 1 Investment Limited Partnership and Tatsuma Yoshida.

● On August 6, 2025, AMATUHI HOLDINGS, Inc. forward split its common stock, where the par value remained unchanged at $0.000001. As of the date of this Prospects Japan Lifestyle No. 1 Investment Limited Partnership owned 19,475,000 common shares and Tatsuma Yoshida owns 1,025,000 common shares.

In connection with the filing of this registration statement, we are in the process of completing a corporate restructuring pursuant to which AMATUHI HOLDINGS, INC., a Delaware corporation, will become the parent holding company of our Japanese operating subsidiary, AMATUHI Inc., through a share transfer and, if applicable, redemption of certain outstanding shares. This prospectus reflects the post-restructuring corporate structure, which is expected to be completed shortly following the initial submission.

**Corporate Structure**

The following diagram depicts our corporate structure as of the date of this prospectus.

**BUSINESS**

**Company Overview**

AMATUHI HOLDINGS, Inc., was incorporated on June 24, 2025 in Delaware to act as the holding company of AMATUHI Inc. AMATUHI Inc. ("AMATUHI") was incorporated on February 22, 2021 and is an operating company in Japan with the headquarter in Yokohama, Kanagawa and a branch in Osaka. AMATUHI operates under the "AMANEKU" brand in Japan.

Life Shine Co. Ltd. ("Life Shine) is a wholly owned subsidiary of AMATUHI, and Sendankai Medical Corporation Associationis ("Sendankai") is a wholly owned uncontrolled entity of AMATUHI. Life Shine and Sendankai were acquired in August 2024 and July 2025, respectively. Life Shine was originally founded in 1993 and operates its business in the welfare industry. In 2003, Life Shine built a leading-edge home for seniors. This subsidiary operates elderly care facilities that provides specialized dementia care and hospice care. Sendaikai was founded in 2002 and operates a comprehensive network of medical, nursing, rehabilitation, and home-care services. The operations of Life Shine and Sendankai represent a small portion of AMATUHI's business; and, it not considered material to our overall business.

Our company operates group homes in Japan for people with disabilities under the brand name of "AMANEKU." "AMANEKU" is a "communal living assistance" service based on the "Comprehensive Support for Persons with Disabilities Act" which is implemented based on the self-support benefits provided by the Japanese government under the act. The act supports people who wish to live independently so that they can advance toward their respective goals through communal living in small groups and interaction with the local community.

AMANEKU provides group homes with Daytime Service Support, which was established as a result of amendments to the Comprehensive Support for Persons with Disabilities Act, that allows for the provision of extensive 24-hour services in response to the increasing aging population and people with disabilities.

We are engaged in businesses that support the lives of people with disabilities, including the construction of group homes for people with disabilities, social participation for people with disabilities, and employment support services aimed at self-realization.

Our primary services to the disable include but are not limited to: Three nutritionally balanced meals daily, counseling and support, assistance with personal care (bathing, dressing, mobility, oral care), medication management, money management, room cleaning, working with medical professionals to provide required medical care and helping our clientele with public assistance, pensions and family matters.

We are specialized in designing, constructing and operating group homes for individuals with disabilities. We also focus on providing supportive living environments, particularly for individuals with significant needs through our Daytime Service Support Type group homes. We are expanding within a market characterized by high demand and insufficient supply, positioning ourselves as a key provider addressing critical social needs related to disability care and housing.

AMATUHI specializes in providing communal living assistance (group homes) as defined under Japan's "Comprehensive Support Law for Persons with Disabilities." This is a government-regulated sector where services are funded primarily through social security benefits.

We are reimbursed for the services we provide to the disabled people through Japanese government funding issued under the Comprehensive Support for Persons with Disabilities Act. We leverage Japanese government funding through the Act on Providing Comprehensive Support for the Daily Life and Life in Society of Persons with Disabilities, [Japanese Act No. 123 of November 7, 2005] to be reimbursed for the services we offer. We operate group homes for people with disabilities, and we also provide construction services specifically focused on developing purpose-built homes designed for people with disabilities and social participation for our residents. These initiatives are designed to support the lives of people with disabilities. Through these initiatives, we aim to create "opportunities" that allow everyone, regardless of their disability, to excel in their own way.

AMATUHI was founded with the goal of further expanding its business operations in high population density in the greater Tokyo area. If we obtain a listing on the Nasdaq Capital Market, we will be a "controlled company" as defined under Nasdaq Capital Market listing standards because more than 50% of our voting power will be held by Japan Lifestyle No. 1 Investment Limited Partnership after this offering. As a "controlled company," we are exempt under Nasdaq Capital Market listing standards that would otherwise require us to have (i) a majority of the Board of Directors consist of "independent" directors under the listing standards of the Nasdaq, (ii) a nominating/corporate governance committee composed entirely of independent directors and a written nominating/corporate governance committee charter meeting the requirements of the Nasdaq, and (iii) a compensation committee composed entirely of independent directors and a written compensation committee charter meeting the requirements of the Nasdaq. Consequently, we are exempt from independent director requirements of Sections 802(a), 804, and 805 of Nasdaq listing standards, except for the requirements under Section 802(c) of Nasdaq thereof pertaining to executive sessions of independent directors and those under Section 803(B)(2) of the Nasdaq pertaining to the Audit Committee. Accordingly, you may not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the Nasdaq. In addition, Mr. Yoshida can exercise significant voting influence over fundamental and important corporate matters and transactions and may have interests that differ from yours. For details, please see "*Risk Factors - Risk Related to Our Business and Industry - If the voting power of our capital stock continues to be highly concentrated, it may prevent you and other minority stockholders from influencing significant corporate decisions and may result in conflicts of interest*."

**Our Mission Statement**

Creating a rich and fulfilling life where everyone can live authentically, regardless of disability.

**Our Business Model:** Our business model focuses on the following:

● **Our primary focus is our Daytime Service Support Type group homes**, which **c** ater to individuals with higher support needs by offering comprehensive 24/7/365 care in larger group homes that typically accommodate 20 residents plus short-stay options. These group homes address a significant market gap for individuals requiring intensive support services. The daytime support group homes are mainly two-story buildings with a capacity of 10 residents on each floor. Separate floors for men and women have been set up to take into consideration the characteristics of disabilities and safety. Based on the aging population ins Japan, there is a shortage of group homes for people with severe disabilities. Separate floors for men and women have been set up to take into consideration the characteristics of disabilities and safety.

![](drsa_001.jpg)

![](drsa_002.jpg)

![](drsa_003.jpg)

In the Daytime Support Type Group Homes, there are four shared toilets per floor. The wheelchair-accessible toilets have wide openings so that caregivers can easily enter together. They are ostomate-friendly and equipped with an emergency buzzer. Regular restrooms are also available on-site.<br>Machine bathtub<br>Handrails and mechanical baths are installed so that people with physical disabilities can bathe safely. Safety-conscious features accommodate both independent bathing and bathing with assistance.<br>Elevator (Caregiver allowed)<br>The large hallways allow for safe passing. Residents on the second floor have access to an elevator that allows wheelchair users to move from the entrance.<br>

● **We also operate Care Service Comprehensive Type group homes** that serve residents with moderate disabilities who are typically active outside the home during the day. These group homes provide focused staff support during evening and morning hours when residents require the most assistance.

**<u>Core Business (under the AMANEKU Brand):</u>**

We operate different types of group homes tailored to the residents' support needs, with a strong focus on the "Daytime Service Support Type":

● **Daytime Service Support Type:** This is a key focus area for AMATUHI, designed for individuals with higher support needs (often categorized as severely disabled) who may spend significant time at the home during the day. These facilities offer extensive 24/7/365 support, have a larger capacity (typically total 20 residents per 2-unit building, plus short-stay rooms), and were established by Japan's Ministry of Health, Labor and Welfare in as a newly established category to address the increasing severity and aging of the disabled population. We position these as core entities in community-based disability support.

The eligible users of our services, include:

● People with intellectual disabilities

● People with incurable diseases

● People with physical disabilities

● Those who have difficulty receiving support from relatives, etc.

● People with mental disorders such as schizophrenia and depression

● Those who want to improve their social skills

● People with developmental disabilities

● **Comprehensive Nursing Care Service Type:** For individuals with moderate disabilities who are typically active outside the home during the day (e.g., work, day programs). Staff provide support primarily during the evening and morning hours.

Fees: Our fees to an individual who wants to stay at one of our facilities is approximately ¥90,000 ($600 USD) for daytime service support type and ¥80,000 ($530 USD) for comprehensive nursing care service type, which includes monthly rent, cost of utilities, food expenses, and daily necessities. Based on government payment under the Comprehensive Support for Persons with Disabilities Act, local municipalities disability payments and separate pensions, over 90% of our customers use our services with no out-of-pocket costs.

The fee for home-visit nursing services is based on the medical fee schedule established by the Ministry of Health, Labor and Welfare, ranging from approximately ¥5,000 to ¥8,000 (US$33 to US$53) per visit. For elderly individuals, there is a co-payment of 10% to 30% depending on income. For individuals with disabilities, the co-payment portion is often subsidized by public funds through programs such as the Medical Expense Assistance Program for Persons with Severe Disabilities implemented by many municipalities. Consequently, in most cases, individuals with disabilities can utilize this service with no out-of-pocket expense.

**<u>Services Provided Under the AMANEKU Brand:</u>**

AMANEKU group homes offer a comprehensive range of services aimed at supporting residents' daily lives, health, and social integration:

● **Daily Living Support:** Assistance with personal care (bathing, dressing, mobility, oral care), counselling and support, medication management, money management, room cleaning, and garbage disposal.

● **Meal Provision:** Three nutritionally balanced meals daily, with accommodations for special dietary needs (e.g., minced or pureed food).

● **Health Management:** Vital checks, collaboration with medical professionals (doctors, visiting nurses), accompaniment to hospital visits, emergency response, support with hospital admission/discharge, and light exercise/weight management.

● **Professional Consultation:** Access to advice from welfare specialists and nurses regarding life issues, administrative procedures (public assistance, pensions), and family matters like inheritance.

● **Daytime & Leisure Activities:** Support in accessing external daytime programs (day care, employment support) and organizing activities within the home or community (shopping, outings, recreation, seasonal events, creative activities).

● **Home-Visit Nursing Services**: Support to manage current health issues, health and wellness checks, screening and health education, connections to health, social services and community resources.

**<u>Business Model & Operations:</u>**

We utilize an integrated model:

● **Development & Construction:** Possesses in-house capabilities and licenses to design and build new, high-quality, accessible group homes, emphasizing wooden construction and modern amenities. AMATUHI emphasizes building new, accessible wooden facilities with features like elevators, security systems, sprinklers, and wheelchair-friendly designs.

● **Operation:** We operate the group homes directly, employing around 1,058 staff as of June 1, 2025. Their operational model relies heavily on government funding paid based on resident disability levels.

● **Funding:** Relies primarily on stable government funding based on resident disability levels, supplemented by resident contributions (rent, utilities, etc.) typically covered by pensions or public assistance. The government provides funds for assisted living services performed, it does not provide funding to construct our facilities.

**<u>Target Population:</u>**

● The homes cater to adults with various disabilities, including:

● Mental disabilities

● Intellectual disabilities

● Developmental disabilities (e.g., ASD, ADHD, Asperger's)

● Physical disabilities

● Intractable diseases

● Eligibility is based on need, provided a doctor's diagnosis confirms the need for support.

**<u>Revenue Model:</u>**

● **Payment Structure:** Monthly payments per resident vary based on their assessed Disability Support Category with an average cited around JPY272,000 or $1,890 per month.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Category
 3: e.g. (i) Mobility impairments; (ii) Visual and hearing disabilities Speech and language
 disorders; (iii) Intellectual and developmental disabilities. JPY195,000 or $1,345 per month.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Category
 4: e.g. (i) intellectual disabilities impact cognitive functioning, learning, and adaptive
 behaviors; (ii) Sensory disabilities involve impairments in vision, hearing, taste, touch,
 or smell; (iii) Mental health disabilities include disorders like depression and anxiety
 impacting emotions and behaviors; (iv) Blindness is defined as the state of being sightless.
 JPY272,000 or $1,875 per month.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Category
 5: e.g. (i) Autism spectrum disorder (ASD); (ii) Intellectual disability; (iii) Learning
 disabilities; (iv) Attention deficit hyperactivity disorder (ADHD); (iv) Cerebral palsy.
 JPY297,000, or $2,048 per month.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. Category
 6: e.g. (i) Emotional disturbance, which covers mental health issues such as anxiety disorder,
 bipolar disorder, and oppositional defiant disorder; (ii) Multiple disabilities, where two
 or more disabilities are present simultaneously, such as motor and intellectual disabilities.
 JPY331,000 or $2,282 per month.

● **Resident Contributions**: Residents payments contribute towards rent, utilities, and food, typically covered by disability pensions or public assistance, often with subsidies reducing out-of-pocket costs.

● **Stability:** This government-backed funding model provides a highly stable and predictable revenue stream, contingent on maintaining occupancy and consistent government policy.

**<u>Market Position:</u>**

We operate within a market consisting of several key market factors in Japan:

● The Japanese market for disability support services continues to expand, driven by demographic shifts and an aging population that increasingly requires specialized care and support services. This trend has created substantial opportunities for established service providers in the sector.

● Government Policy: There is a national push for deinstitutionalization (moving people from psychiatric hospitals to community settings).

● Aging Society: Increasing need for care solutions as family caregivers age,

● Housing Shortage: There is a lack of sufficient group home capacity, especially in major urban areas and particularly for the high-support Daytime Service Support Type.

● Community Integration: Acting as a hub within the local welfare network, collaborating with hospitals, clinics, support offices, and administrative agencies.

**<u>Growth & Expansion:</u>**

AMATUHI has demonstrated aggressive expansion since its incorporation:

● Fiscal year ended March 31, 2022: 3 group homes

● Fiscal year ended March 31, 2023: 5 group homes (cumulatively 8 group homes)

● Fiscal year ended March 31, 2024: 3 group homes (cumulatively 11 group homes)

● Fiscal year ended March 31, 2025: 18 group homes (cumulatively 29 group homes)

Note: These numbers represent the number of group homes we are currently operating.

**Current Scale (As of September 2025):** Operating or constructing 65 group home bases (which includes 39 group homes we are operating and 26 group homes under construction), of which 59 group homes have short-stay bases, across Kanagawa, Tokyo, Chiba, and Saitama. The 65 group homes provide communal living assistance, where the 59 short-stay facilities are the Daytime Service Support facilities designed for individuals who are often categorized as severely disabled.

**Occupancy:** Our occupancy rates (>85% typically achieved within 6 months) support the financial viability of new facilities and the expansion strategy.

**<u>Construction & Development Capabilities</u>**

We have demonstrated strong growth, aiming to operate 48 group homes by the end of the fiscal year ending March 31, 2026, capitalizing on the high demand and favorable market dynamics. We possess in-house capabilities and licenses, e.g. specific construction, and first-class architect to design and build new, high-quality, accessible group homes, emphasizing wooden construction and modern amenities.

**<u>Operational Scale</u>**

As at September 30, 2025, we employ approximately 1,017 employees, including 67 managers. The occupancy rate for our facilities has consistently exceeded 95.7% over the past 6 months (performance of group homes that have been open for more than 12 months). As we expand our operations through listing on the Nasdaq Capital Markets, we anticipate increasing our workforce including employees and manager to maintain high quality of our service standards and to best serve our clientele.

We currently lease all of our group homes. Our group homes are a different area of focus than our Daytime Service Support and our construction service provider. As a construction service provider, we offer physical construction services for group homes, where we handle tasks like designing, supervising, and executing physical construction work to ensure projects are safe, on time, and within budget.

With regards to our group homes, we first identify and select a suitable site, and conduct negotiations with landowners regarding the construction of a group home. Upon successful conclusion of such negotiations and execution of a contract, a group home is constructed on the site. Following completion of construction, we generally enter into a 20 to 30-year, non-cancellable bulk lease agreement with landowners, while we manage the operations of group homes. This offers landowners stable rental income while we manage operations. Landowners are independent from our operations, and we hold no ownership interest in the properties. This arrangement allows us to utilize a building on our fixed lease terms. It reduces our risk to unexpected rent increases.

**<u>Social Context</u>**

We operate within a growing market driven by several key factors in Japan: This includes

● **Aging Society:** There is an increasing need to offer care solutions as family caregivers age (the "8050 problem"). The "8050 problem" refers to children in their 50s whose only means of support are parents in their 80s. Japan is aging faster than any other developed nation. By 2036, one in three Japanese will be 65 or older (National Institute of Population and Social Security Research, 2017). This demographic shift puts immense pressure on both the working-age population and social services. As the elderly parents in 8050 households age, they require more medical care and support. With their middle-aged children or children with disabilities unable to contribute to the workforce or pension system, the burden on Japan's already strained social security system intensifies. The social security expenditure in Japan reached a record high of 132.2 trillion yen ($854 billion USD) in FY2020 (Ministry of Health, Labour and Welfare, 2021).

● **Government Policy:** In Japan there is a national push for deinstitutionalization (moving people from psychiatric hospitals to community settings). The primary goal is to shift from a hospital-centric model of mental health care to a more community-based approach, emphasizing support and inclusion in the community especially for individuals with mental illness. Efforts have been made to strengthen the collaboration between mental health care, medical services, and welfare, and in 2017, the development of a community-based integrated care system that also supports people with mental disorders was emphasized from the perspective of community life support. This includes establishing community mental health centers, day care centers, and providing home-visit services to increase access to mental health support in local communities.

● **Community Integration Role:** Community integration in Japan plays a crucial role in various aspects, particularly concerning the increasing elderly population. Japan faces a growing elderly population, and community-based integrated care systems are crucial for providing healthcare, long-term care, and daily life support to ensure older people can age in place with health and peace of mind. There is a housing shortage in Japan. There is a lack of sufficient group home capacity, especially in major urban areas and particularly for the high-support Daytime Service Support Type. Further, with an aging population there is a significant and rising number of individuals require disability support services.

**<u>Our Competitive Advantages</u>**

We differentiate ourselves through:

● Focus on High-Need Business Areas: Specializing in the undersupplied Daytime Service Support Type. We believe by offering Daytime Service Support, this gives us a strategic niche positioning over other operators.

● New Construction & Quality: Emphasizing in-house design and construction, newly built, high-quality, accessible facilities, potentially contrasting with older or converted properties used by some competitors.

● Integrated Model: Offering end-to-end services (land sourcing, design, construction, operation) provides control over quality and potentially efficiency.

● Rapid Expansion: Demonstrating the ability to scale operations quickly.

**<u>Market Size</u>**

According to Disability: IN, of Alexandria, VA, in Japan, approximately ¥1.6 trillion (equivalent to USD 8.3 billion) is allocated annually to support approximately 9.63 million people living with disabilities, representing 7.6 percent of the total population. This significant market demonstrates the substantial government commitment to disability support services.9.63 million people in Japan live with some kind of disability, including people with intellectual and mental disabilities. That's about 7.6 percent of the total population, or about one in every 13 people. Approximately 700,000 people in Japan with disabilities work in the private and public sectors, less than 10% of the total number.

**<u>Site Selection Process</u>**

Our site selection process starts with mapping of the market to understand where there is a concentration of older people and people with disabilities. We strategically target these as they best align with the demographics we seek to provide our services. Based on these demographics, we choose a site that we believe will bring us our targeted clientele. Management believes that this type of site selection helps us develop our niche market for daytime service support.

We strategically target regions with a high concentration of individuals who align with the mentioned demographics, often leading to a focus on cities with dense populations.

**<u>Site Expansion</u>**

Going forward, we plan to utilize the skills and recognition gained from its existing operations. Management's goal for the fiscal year ending March 31, 2026 is to open and operate the business in 48 group homes, up from cumulatively 29 group homes as of March 31, 2025. Our goal is to maintain profitability, thereby achieving further synergies.

**<u>Competition:</u>**

The market for disabled persons group homes in Japan is highly fragmented, with 8,189 operators nationwide as of March 2023. Management believes that this suggests a lack of dominant players and potentially lower barriers to entry for new facilities, but also intense competition at a local level.

**<u>Our Strengths</u>**

Our Company has established the AMANEKU brand where we are recognized to offer extensive 24/7/365 support, and we address the increasing severity and aging of the disabled population. This positions us an entity in community-based disability support.

**<u>Employees</u>**

As of September 30, 2025, we had a headcount of total 1,017 employees (including our managers) which includes full-time, part-time and contract employees of 116, 759, and 172 employees, respectively. All of our employees are based in Japan. We have 67 managers.

**<u>Government Act</u>**

The Government Action Act (Act No. 123 of November 7, 2005) entitled "On Providing Comprehensive Support for the Daily Life and Life in Society of Persons with Disabilities," that funds the Company's operations states:

This law is based on the fundamental principles of the Basic Law for Persons with Disabilities (Law No. 84 of 1970) and, in conjunction with the Welfare Law for Persons with Physical Disabilities (Law No. 283 of 1949), the Welfare Law for Persons with Intellectual Disabilities (Law No. 37 of 1960), the Law Concerning Mental Health and Welfare for Persons with Mental Disabilities (Law No. 123 of 1950),the Child Welfare Act (Act No. 164 of 1947), and other laws concerning the welfare of persons with disabilities and children with disabilities. It aims to ensure that persons with disabilities and children with disabilities can lead daily or social lives commensurate with their dignity as individuals entitled to fundamental human rights by providing necessary disability welfare services, comprehensive support through regional living support programs and other measures, thereby promoting the welfare of persons with disabilities and children with disabilities, and contributing to the realization of a regional society where all citizens, regardless of disability, can live in mutual respect for each other's personalities and individuality and with peace of mind.

(Fundamental Principles)

Article 1-2 Support for persons with disabilities and children with disabilities to lead daily and social lives is based on the principle that all citizens, regardless of disability, are irreplaceable individuals who are equally entitled to fundamental human rights and should be respected as such. This support aims to realize a society where all citizens, regardless of disability, live together in harmony, respecting each other's personalities and individuality, without discrimination based on disability. All persons with disabilities and children with disabilities must be provided with the necessary support to enable them to lead daily or social lives as close to their homes as possible, thereby ensuring opportunities for social participation and the freedom to choose where and with whom to live, without being hindered from living in harmony with others in the community. Additionally, all obstacles in society that hinder persons with disabilities and children with disabilities from leading daily or social lives, including physical barriers, systems, customs, concepts, or any other factors that may serve as barriers to the daily or social lives of persons with disabilities and children with disabilities.

(Responsibilities of the Municipalities)

Article 2(1) - Municipalities (including special wards; the same applies hereinafter) shall have the following responsibilities in implementing this Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) To ensure that persons with disabilities may reside in locations of their own choosing, or that persons with disabilities or children with disabilities (hereinafter referred to as "persons with disabilities, etc.") may lead independent daily lives or social lives, municipalities shall, based on an understanding of the actual living conditions of persons with disabilities, etc., within their respective jurisdictions, cooperate with public employment security offices, disability employment centers (as defined in Article 19, paragraph 1 of the Act on the Promotion of Employment of Persons with Disabilities (Law No. 123 of 1960)), disability employment support centers (as defined in Article 27, paragraph 2 of the same Act), and other entities engaged in vocational rehabilitation (as defined in Article 2, item 7 of the same Act), and take necessary measures to promote the employment of persons with disabilities, etc. hereinafter the same), disability employment and living support centers (as defined in Article 27, Paragraph 2 of the same Act; hereinafter the same), and other institutions implementing vocational rehabilitation measures (as defined in Article 2, Item 7 of the same Act; hereinafter the same), as well as educational institutions and other relevant organizations, and to comprehensively and systematically implement necessary self-support benefits and community living support programs.

**Recent Developments**

***Formation***

AMATUHI HOLDINGS, Inc. was incorporated in the State of Delaware on June 24, 2025. Upon incorporation, we were authorized to issue 380,000,000 shares of common stock, par value $0.000001 per share, and 20,000,000 shares of preferred stock, par value $0.000001 per share. On June 25, 2025, we issued shares of common stock, par value $0.000001 per share, to Tatsuma Yoshida and Yoshihito Arita as the founding directors of the company.

***Reorganization and Share Exchange Agreement***

On July 25, 2025, AMATUHI Inc. a Japanese corporation, made an investment in kind of all issued and outstanding common shares of AMATUHI Holdings, Inc. (4,100 shares) to AMATUHI, a Japanese corporation.

On July 22, 2025, pursuant to the terms of a Reorganization Agreement and Plan of Share Exchange between AMATUHI HOLDINGS, Inc. and the shareholders of AMATUHI Inc. we issued 4,100 shares of our common stock to the shareholders of AMATUHI Inc. in exchange for all outstanding shares of common stock of the shareholders., which holds 100% of the issued and outstanding capital stock.

***Forward Stock Split***

On August 6, 2025, the Company announced its decision to forward stock split its common shares on a 5000:1 basis. One hundred percent of the shareholders granted approval for the 1:5,000 reverse stock split at a general meeting on August 6, 2025, where par value $0.000001 remained unchanged. The forward stock split increased the current issued and outstanding Common Stock from 4,100 shares to 20,500,000 shares, par value $0.000001. As the stock split applies equally to all shareholders, individual shareholdings will be increased in the same ratio as the total number of shares. Accordingly, the stock split will have no material effect on the percentage interest of each individual shareholder. All other equity securities of the Company will be adjusted accordingly.

***Independent Director Agreement***

On October 3, 2025, Chika Kawazoe was appointed as an independent director of the Board of Directors of the Company. Ms. Kawazoe entered into an Independent Director Agreement with the Company dated as of October 3, 2025. For a detailed description of the terms of the Independent Director Agreement, see "*Executive and Director Compensation —Independent Director Agreements"* of this prospectus*.*

**Legal Proceedings**

From time to time, we are involved in various claims and legal actions arising in the ordinary course of business. There are no pending legal proceedings to which we are a party or in which any director, officer or affiliate of ours, any owner of record or beneficially of more than 5% of any class of our voting securities, or security holder is a party adverse to us or has a material interest adverse to us.

**Description of Real Property**

Our corporate headquarter is located in Kanagawa, Japan, where we currently lease office space pursuant to lease expiring in July 31, 2026. We also lease facilities, ranging in terms of 2 to 35 years, with monthly lease rates ranging from JPY37,000 to JPY2,900,000.

We believe that our facilities are suitable to meet our current needs.

**REGULATIONS**

Our business model integrates disability-support services, home-visit nursing, and real-estate development. Each strand is governed by a distinct statutory framework in Japan, and full compliance with these regulations is essential to our continued growth and to the protection of our service users, residents, and investors. The principal regulations affecting our business operations are summarized below.

**Disability-Welfare Services**

Our group homes can operate only after each residence is designated by the local government under the Act on Comprehensive Support for Persons with Disabilities, a process that confirms the building meets equipment requirement including safety, and staffed around the clock at nationally prescribed ratios. In practice we exceed several of those ratios, assigning Service Managers in some facilities at levels above the statutory minimum, and we monitor every resident's Individual Support Plan more frequently and in greater detail than the law requires. We must also keep those plans up to date and bill for disability welfare services at the rates set by the national government. Should an inspection reveal chronic understaffing or inaccurate claims, the prefectural governor can freeze new admissions, demand repayment of fees already received, or—at the extreme—revoke a home's license. Because the amounts of self-support benefits that is based on the Comprehensive Support Act for Persons with Disabilities are reviewed only every three years, future rate changes that fail to match rising wages or utility costs could also squeeze margins.

**Home-Visit Nursing Services**

Our home-visit nursing teams hold dual certificates under the Health Insurance Act and the Long-Term Care Insurance Act. Each certificate must be renewed every six years and depends on our keeping a full-time registered nurse on staff, following strict clinical protocols and charging only the point values published in the national fee table. Prefectural health bureaus can audit our electronic claims and even visit our offices on unannounced as necessary; if they uncover over-billing, sub-standard care or a breach of data privacy, they can demand immediate repayment, impose temporary suspension from the billing system or cancel a station's certificate. A certificate loss would halt service delivery in that region, so sustained compliance is critical to both revenue continuity and reputation.

**Construction & Real-Estate Operations**

All development and brokerage activities rest on Minister of Land, Infrastructure, Transport and Tourism and a prefectural real-estate broker license and, for construction projects, a construction-business permit. The license obliges us to employ licensed real-estate agents, belong to a client-compensation guarantee association or deposits of security and provide purchasers with a statutory "Explanation of Important Matters" before contract signing. Every new building must pass local structural, fire-safety and accessibility inspections depending on their use and size; with some exceptions, occupancy is illegal without the final certificate. If a project were to violate zoning rules, omit required disclosures or fail inspection, regulators could levy fines, suspend our brokerage activities for up to a year or, in a severe case, revoke the license, forcing us to halt property sales and leases until reinstatement.

**Labor Laws**

We comply with all major Japanese labor laws, including the Labor Standards Act, the Industrial Safety and Health Act, and the Labor Contracts Act. Our internal work rules incorporate the minimum standards set forth by these laws regarding working hours, overtime, rest breaks, and paid leave. Working time is recorded through an electronic time and attendance system. Employment contracts—whether open-ended or fixed-term—include change-management and disciplinary clauses that conform to the requirements of the Labor Contracts Act, and the full text of our work rules has been filed with the competent Labor Bureau.

**Personal Information**

We handle personal data in three principal categories — (a) employees, whose records we maintain for payroll, tax, and HR management; (b) residents of our AMANEKU group homes, whose care plans and medical information fall under "Special Care-Required Personal Information"; and (c) clients and counterparties in real-estate and land-brokerage transactions, for whom we collect contact details and know-your-customer data. All such processing is governed by Japan's Act on the Protection of Personal Information (Act No. 57 of 2003, as amended) and its implementing guidelines, which require secure custody, role-based access, and strict limits on third-party sharing. Recent amendments extend the Act to cover both pseudonymised information (kamei kakō jōhō) and individual-related information (kojin kanren jōhō). As of the date of this prospectus, we are in full compliance with all applicable personal-data regulations.

**Cross-Cutting Regulatory Risks**

Across all three domains, our ability to generate revenue depends on holding multiple licenses, meeting evolving quality standards and complying with government-controlled pricing. Regulatory changes—such as higher minimum staffing ratios, tighter construction codes or reimbursement cuts—could increase costs or reduce margins. Major non-compliance could trigger license suspension, fee claw-backs or service interruptions, which in turn would affect occupancy, cash flow and brand reputation. To mitigate these risks we maintain a company-wide compliance office, and we have had no material sanctions since our founding in 2021.

**MANAGEMENT**

**Executive Officers and Directors**

Set forth below is information concerning our directors and executive officers.

---

| | | |
|:---|:---|:---|
| **Name** | **Age** | **Position** |
| Tatsuma Yoshida | 37 | Chairman of the Board, President, Chief Executive Officer, Director |
| Yoshihito Arita | 39 | Chief Financial Officer, Director |
| Chika Kawazoe | 44 | Independent Director |

---

Set forth below is a brief biography of each of our executive officers and directors.

***Executive Officers***

**Tatsuma Yoshida.** Mr. Yoshida founded AMATUHI Inc. in 2021. He has served as our Chief Executive Officer since June 2025. Since 2021, Mr. Yoshida has been the Chief Executive Officer and director of AMATUHI Inc. where he is responsible for the overall management of the company. Since 2024, he has been the director of Life Shine Co., Ltd., our subsidiary, where he provides board-level oversight of the operation. Since 2020, he has been the director of Tasukeai General Incorporate Association, where he oversees its governance and training program. Since 2018, he has been a Representative Certified Administrative Procedures Legal Specialist of Minaterrace Gyoseishoshi Office, where he provides legal consulting and preparation of permits, immigration, and corporate compliance documents as well as supervises its employees. Mr. Yoshida qualifies as a Director based on his past work experience a Director of Life Shine Co., Ltd, and Tasukeai General Incorporate Association.

**Yoshihito Arita.** Mr. Yoshihito Arita has served as our Chief Financial Officer since June 2025. Mr. Arita has been the Chief Financial Officer and director of AMATUHI Inc. where he is responsible for its accounting, finance, and corporate planning. Since 2022, he has been a Chief Executive Office of Kuno&Arita Tax Co., where he is responsible for supervising management and sales. Since 2018, he has been a Chief Executive Office of Kuno&Arita FP&A Solutions Inc., where he is responsible for supervising management and sales. Mr. Arita received his bachelor's degree in Political Science and Economics from Meiji University in 2010. Mr. Arita's financial experience, work background and management skills qualify him to serve as a Director.

**Chika Kawazoe.** Ms. Kawazoe is our Independent Director. Since July 2017, Ms. Kawazoe has served as the representative director at General Incorporated Association Institute of Education and Human Sciences where she manages operation of private after-school childcare facilities and various extracurricular activity classes. From August 2004 to July 2016, Ms. Kawazoe was the attendant at the Graduate University for Advanced Studies, SOKENDAI where she was in charge of general affairs section, personnel section and faculty and student affairs section. Ms. Kawazoe received her bachelor's degree in Faculty of Education and Human Sciences in School Education Program from Yokohama National University in 2004. We believe Ms. Kawazoe has the requisite qualifications to serve as our Independent Director because of her expertise in business management experience.

**Family Relationships**

There are no family relationships among any of our directors or executive officers.

**Involvement in Certain Legal Proceedings**

To the best of our knowledge, none of our directors or executive officers has, during the past ten years:

● been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offences);

● had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or within two years prior to that time;

● been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to be associated with persons engaged in any such activity;

● been found by a court of competent jurisdiction in a civil action or by the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;

● been the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

● been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

**Board Committees and Director Independence**

Prior to this offering, there has been no public market for our common stock. Our common stock is not currently listed on any national securities exchange market nor quoted on the OTC Markets. We intend to list our common stock on the Nasdaq Capital Market, upon pending approval of our Registration Statement.

*Controlled Company and Director Independence*

The "controlled company" exception to the rules of the Nasdaq Capital Market provides that a company of which more than 50% of the voting power is held by an individual, group or another company, a "controlled company," need not comply with certain requirements of the Nasdaq Capital Market corporate governance rules. As stated above, Tatsuma Yoshida and Yoshihito Arita collectively own shares of our Common Stock which represents 100% of the voting power of our outstanding capital stock. As a result, the Company is a "controlled company" under the Nasdaq Capital Market corporate governance standards. As a controlled company, the Company does not have to comply with certain corporate governance requirements under the Nasdaq Capital Market rules, including the following:

● A majority of the Company's Board of Directors to consist of "independent directors" as defined by the applicable rules and regulations of the Nasdaq Capital Market;

● The compensation of the Company's executive officers to be determined, or recommended to the Board of Directors for determination, by independent directors constituting a majority of the independent directors of the Board in a vote in which only independent directors participate or by a Compensation Committee comprised solely of independent directors; and

● That director nominees to be selected, or recommended to the Board of Directors for selection, by independent directors constituting a majority of the independent directors of the Board in a vote in which only independent directors participate or by a nomination committee comprised solely of independent directors.

The Company intends to avail itself of these exemptions. Therefore, for as long as the Company remains a "controlled company," the Company will not have the same protections afforded to shareholders of companies that are subject to all of these corporate governance requirements. If at any time the Company ceases to be a "controlled company" under the rules of the Nasdaq Capital Market, the Company's Board of Directors will take all action necessary to comply with the corporate governance rules of the Nasdaq Capital Market, including establishing certain committees composed entirely of independent directors, subject to a permitted "phase-in" period.

Notwithstanding the Company's status as a controlled company, the Company will remain subject to the corporate governance standard of the Nasdaq Capital Market that requires the Company to have an audit committee with at least three independent directors as well as composed entirely of independent directors. As a result, the Company must have at least one independent director on our audit committee at the time of listing on the Nasdaq Capital Market, at least two independent directors within 90 days of listing on the Nasdaq Capital Market and at least three independent directors within one year of listing on the Nasdaq Capital Market, where at least one of the independent directors qualifies as an audit committee financial expert under SEC rules and as a financially sophisticated audit committee member under the Nasdaq Capital Market rules.

**Committees of the Board of Directors**

***Audit Committee***

We have established an audit committee, which currently consists of Chika Kawazoe, who is an independent director. Following the completion of this offering, we intend to appoint two additional independent directors who will satisfy the independence requirements of Nasdaq Rules. At which time our Audit Committee will be fully constituted.

Our audit committee is responsible for, among other things:

● approve and retain the independent auditors to conduct the annual audit of our financial statements;

● review the proposed scope and results of the audit;

● review and pre-approve audit and non-audit fees and services;

● review accounting and financial controls with the independent auditors and our financial and accounting staff;

● review and approve transactions between us and our directors, officers and affiliates;

● recognize and prevent prohibited non-audit services;

● establish procedures for complaints received by us regarding accounting matters; and

● oversee internal audit functions, if any.

***Compensation Committee***

Because we will be a "controlled company" within the meaning of the corporate governance standards of the Nasdaq Capital Market, we will not be required to, and do not currently expect to, have a compensation committee. If and when we are no longer a "controlled company", we will be required to establish a compensation committee. We anticipate that such a compensation committee would consist of three directors who will be "independent" under the rules of the SEC, subject to the permitted "phase-in" period pursuant to the rules of the Nasdaq Capital Market. Upon formation of a compensation committee, we would expect to adopt a compensation committee charter defining the committee's primary duties in a manner consistent with the rules of the SEC and the Nasdaq Capital Market standards.

***Nominating and Corporate Governance Committee***

Because we will be a "controlled company" within the meaning of the corporate governance standards of the Nasdaq, we will not be required to, and do not currently expect to, have a nominating and corporate governance committee. If and when we are no longer a "controlled company", we will be required to establish a nominating and corporate governance committee. We anticipate that such a nominating and corporate governance committee would consist of three directors who will be "independent" under the rules of the SEC, subject to the permitted "phase-in" period pursuant to the rules of the Nasdaq. Upon formation of a nominating and corporate governance committee, we would expect to adopt a nominating and corporate governance committee charter defining the committee's primary duties in a manner consistent with the rules of the SEC and the Nasdaq standards.

A stockholder may nominate one or more people for election as a director at an annual meeting of stockholders if the stockholder complies with the notice and information provisions contained in our bylaws. Such notice must be in writing to our Company not less than 90 days and not more than 120 days prior to the anniversary date of the preceding year's annual meeting of stockholders or as otherwise required by the requirements of the Exchange Act. In addition, stockholders furnishing such notice must be a holder of record on both (i) the date of delivering such notice and (ii) the record date for the determination of stockholders entitled to vote at such meeting.

**Code of Ethics**

The Company has adopted a Code of Ethics and Business Conduct that applies to all of its directors, officers (including our principal executive officer, principal financial officer, principal accounting officer or controller, and any person performing similar functions) and employees.

We are required to disclose any amendment to, or waiver from, a provision of our code of ethics applicable to our principal executive officer, principal financial officer, principal accounting officer, controller, or persons performing similar functions. We intend to use our website as a method of disseminating this disclosure, as permitted by applicable SEC rules. Any such disclosure will be posted to our website within four (4) business days following the date of any such amendment to, or waiver from, a provision of our code of ethics.

**Limitation on Liability and Indemnification of Officers and Directors**

Our certificate of incorporation provides that our officers and directors will be indemnified by us to the fullest extent authorized by Delaware law, as it now exists or may in the future be amended. In addition, our certificate of incorporation provides that our directors will not be personally liable for monetary damages to us for breaches of their fiduciary duty as directors, except to the extent such exemption from liability or limitation thereof is not permitted by the General Corporation Law of the State of Delaware.

We intend to enter into separate indemnification agreements with our directors and officers. Each indemnification agreement will provide, among other things, for indemnification to the fullest extent permitted by law and our amended and restated certificate of incorporation and bylaws against any and all expenses, judgments, fines, penalties and amounts paid in settlement of any claim. The indemnification agreements will provide for the advancement or payment of all expenses to the indemnitee and for reimbursement to us if it is found that such indemnitee is not entitled to such indemnification under applicable law and our certificate of incorporation and bylaws.

Our certificate of incorporation also permits us to maintain insurance on behalf of any officer, director or employee for any liability arising out of his or her actions, regardless of whether Delaware law would permit such indemnification. We intend to purchase a policy of directors' and officers' liability insurance that insures our officers and directors against the cost of defense, settlement or payment of a judgment in some circumstances and insures us against our obligations to indemnify our officers and directors.

These provisions may discourage stockholders from bringing a lawsuit against our directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against officers and directors, even though such an action, if successful, might otherwise benefit us and our stockholders. Furthermore, a stockholder's investment may be adversely affected to the extent we pay the costs of settlement and damage awards against officers and directors pursuant to these indemnification provisions.

We believe that these provisions and the insurance are necessary to attract and retain talented and experienced officers and directors.

Any repeal or amendment of provisions of our certificate of incorporation affecting indemnification rights, whether by our Board of Directors, stockholders or by changes in applicable law, or the adoption of any other provisions inconsistent therewith, will (unless otherwise required by law) be prospective only, except to the extent such amendment or change in law permits us to provide broader indemnification rights on a retroactive basis, and will not in any way diminish or adversely affect any right or protection existing thereunder with respect to any act or omission occurring prior to such repeal or amendment or adoption of such inconsistent provision.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the provisions described above, or otherwise, we have been advised that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than our payment of expenses incurred or paid by our director, officer or controlling person in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

**EXECUTIVE AND DIRECTOR COMPENSATION**

**Summary Compensation Table**

The following table sets forth, for the fiscal years ended March 31, 2025 and 2024, the dollar value of all cash and noncash compensation earned by any person that was our principal executive officer ("PEO") or other executive officer during the last fiscal year.

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Name and Position** | **Yr.** | **Salary ($)** | **Bonus ($)** | **Stock**<br> **Awards**<br> **($)** | **Option**<br> **Awards**<br> **($)** | **Non-**<br> **Equity**<br> **Incentive**<br> **Plan**<br> **Compensation**<br> **($)** | **Non-**<br> **qualified**<br> **Deferred**<br> **Compensation**<br> **Earnings**<br> **($)** | **All**<br> **Other**<br> **Compensation**<br> **($)** | **Total**<br> **($)** |
| Tatsuma Yoshida | 2025 | $110118 |  |  |  |  |  |  | 110118 |
| Chief Executive Officer and Director | 2024 | $90765 |  |  |  |  |  |  | 90765 |
| Yoshihito Arita | 2025 | 47193 |  |  |  |  |  |  | 47193 |
| Chief Financial Officer and Director | 2024 |  |  |  |  |  |  |  |  |

---

**Employment Agreements with Our Named Executive Officers**

Our executive officers do not have employment agreements with AMATUHI HOLDINGS, Inc directly. Instead, they provide services to us pursuant to the director's appointment agreements entered into with our wholly owned operating subsidiary, AMATUHI, Inc. These agreements set forth the terms and conditions under which the executives manage the operations of our companies. A summary of the terms of each of these director's appointment agreements is set forth below.

*Director Appointment Agreement with Tatsuma Yoshida*

Pursuant to the director appointment agreement by and between our subsidiary, AMATUHI, Inc. and Tatuma Yoshida, Mr. Yoshida serves as the representative director for our subsidiary, AMATUHI, Inc. and is entitled to an annual salary of $110,000, minus applicable taxes. Either party may terminate the employment relationship at any time without cause, and with or without notice. The compensation may be adjusted based on agreements reached by relevant parties at a later date.

*Director Appointment Agreement with Yoshihito Arita*

Pursuant to the director appointment agreement by and between our subsidiary, AMATUHI, Inc. and Yoshihito Arita, Mr. Arita serves as the director for our subsidiary, AMATUHI, Inc. and is entitled to an annual salary of $47,000, minus applicable taxes. Either party may terminate the employment relationship at any time without cause, and with or without notice. The compensation may be adjusted based on agreements reached by relevant parties at a later date.

*Provisions Applicable to All Executive Employment Agreements*

The Executive Employment Agreements described above include the following terms, unless otherwise noted below:

An initial term of 3 years, provided that the term of each agreement will automatically be extended for one or more additional terms of one year each unless either the Company or applicable executive provides notice to the other of their desire to not so renew the initial term or renewal term (as applicable) at least 30 days prior to the expiration of then-current initial term or renewal term (as applicable). Each of the agreements provide that the applicable executive's employment with the Company shall be "at will," meaning that either applicable executive or the Company may terminate the applicable executive's employment at any time and for any reason, subject to the other provisions of the agreement.

Each of the agreements provide that they may be terminated by the Company, either with or without "Cause", or by the applicable executive, either with or without "Good Reason".

For purposes of each agreement, "Cause" means:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● a violation of any material written rule or policy of the Company for which violation any employee may be terminated pursuant to the written policies of the Company reasonably applicable to an executive employee;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● misconduct by the applicable executive to the material detriment of the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● the applicable executive's conviction (by a court of competent jurisdiction, not subject to further appeal) of, or pleading guilty to, a felony;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● the applicable executive's gross negligence in the performance of the applicable executive's duties and responsibilities to the Company as described in this Agreement; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● the applicable executive's material failure to perform the applicable executive's duties and responsibilities to the Company as described in the agreement (other than any such failure resulting from the applicable executive's incapacity due to physical or mental illness or any such failure subsequent to the applicable executive being delivered a notice of termination without Cause by the Company or delivering a notice of termination for Good Reason to the Company), in either case after written notice from the Board to the applicable executive of the specific nature of such material failure and the applicable executive's failure to cure such material failure within 10 days following receipt of such notice.

For purposes of each agreement, "Good Reason" means:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● at any time following a Change of Control (as defined below), a material diminution by the Company of compensation and benefits (taken as a whole) provided to the applicable executive immediately prior to a Change of Control;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● a reduction in base salary or target or maximum bonus, other than as part of an across-the-board reduction in salaries of management personnel;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● the relocation of the applicable executive's principal executive office to a location more than 50 miles further from the applicable executive's principal executive office immediately prior to such relocation; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● a material breach by the Company of any of the terms and conditions of the agreement which the Company fails to correct within 10 days after the Company receives written notice from the applicable executive of such violation.

For purposes of each agreement a "Change of Control" of the Company will be deemed to have occurred if, after the effective date of the applicable agreement, (i) the beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of securities representing more than 50% of the combined voting power of the Company is acquired by any "person" as defined in sections 13(d) and 14(d) of the Exchange Act (other than the Company, any subsidiary of the Company, or any trustee or other fiduciary holding securities under an employee benefit plan of the Company), (ii) the merger or consolidation of the Company with or into another corporation where the shareholders of the Company, immediately prior to the consolidation or merger, would not, immediately after the consolidation or merger, beneficially own (as such term is defined in Rule 13d-3 under the Exchange Act), directly or indirectly, shares representing in the aggregate 50% or more of the combined voting power of the securities of the corporation issuing cash or securities in the consolidation or merger (or of its ultimate parent corporation, if any) in substantially the same proportion as their ownership of the Company immediately prior to such merger or consolidation, or (iii) the sale or other disposition of all or substantially all of the Company's assets to an entity, other than a sale or disposition by the Company of all or substantially all of the Company's assets to an entity, at least 50% of the combined voting power of the voting securities of which are owned directly or indirectly by shareholders of the Company, immediately prior to the sale or disposition, in substantially the same proportion as their ownership of the Company immediately prior to such sale or disposition.

In the event that the Company terminates the term of the applicable agreement or the applicable executive's employment with Cause, or if the applicable executive terminates their agreement without Good Reason, then, subject to any other agreements between the Company with respect to other equity grants made to such executive, we expect that each of the agreements will provide that:

● the Company will pay to the applicable executive any unpaid base salary and benefits then owed or accrued, and any unreimbursed expenses;

● any unvested portion of any equity granted to the applicable executive under the applicable agreement or any other agreements with the Company will immediately be forfeited; and

● all of the parties' rights and obligations under the agreement will cease, other than those rights or obligations which arose prior to the termination date or in connection with such termination, and subject to the survival provisions of the agreements.

Each of the agreements provides that, in the event that the Company terminates the term of the applicable agreement or the applicable executive's employment without Cause, or if the applicable executive terminates their agreement with Good Reason, then, subject to any other agreements between the Company with respect to other equity grants made to such executive:

● the Company will pay to the applicable executive any base salary, bonuses, and benefits then owed or accrued, and any unreimbursed expenses;

● any unvested portion of any equity granted to the applicable executive under the applicable agreement or any other agreements with the Company will, to the extent not already vested, be deemed automatically vested; and

● all of the parties' rights and obligations under the agreement will cease, other than those rights or obligations which arose prior to the termination date or in connection with such termination, and subject to the survival provisions of the agreements.

The agreement provides that, in the event of the applicable executive's death or total disability during the term of the applicable agreement, the term of the applicable agreement and the applicable executive's employment shall terminate on the date of death or total disability. In the event of such termination, the Company's sole obligations to the applicable executive (or the applicable executive's estate) will be for unpaid base salary, accrued but unpaid bonus and benefits (then owed or accrued and owed in the future), a pro-rata bonus for the year of termination based on the applicable executive's target bonus for such year and the portion of such year in which the applicable executive was employed, and reimbursement of expenses pursuant to the terms hereon through the effective date of termination, and any unvested portion of any equity granted to the applicable executive under the applicable agreement or any other agreements with the Company will immediately be forfeited as of the termination date.

The agreement provides that in the event that the term of the applicable agreement is not renewed by either party, any unvested portion of any equity granted to the applicable executive under the applicable agreement or any other agreements with the Company will immediately be forfeited as of the expiration of the term of the applicable agreement without any further action of the parties.

During the term of the applicable agreement, the agreements provides that the executive will be entitled to fringe benefits consistent with the practices of the Company, and to the extent the Company provides similar benefits to the Company's executive officers, and is entitled to reimbursement for all reasonable and necessary out-of-pocket business, entertainment and travel expenses incurred by the applicable executive in connection with the performance of the applicable executive's duties hereunder and in accordance with the Company's expense reimbursement policies and procedures.

The agreement provides that, during the term of the applicable agreement, the executive will be entitled to indemnification and insurance coverage for officers' liability, fiduciary liability and other liabilities arising out of the applicable executive's position with the Company in any capacity, in an amount not less than the highest amount available to any other executive, and such coverage and protections, with respect to the various liabilities as to which the applicable executive has been customarily indemnified prior to termination of employment, shall continue for at least six years following the end of the term of the applicable agreement. Any indemnification agreement entered into between the Company and the applicable executive shall continue in full force and effect in accordance with its terms following the termination of the applicable.

The agreement contains customary confidentiality provisions, and customary provisions related to Company ownership of intellectual property conceived or made by the applicable executive in connection with the performance of their duties under the applicable agreement (i.e., a "work-made-for-hire" provision).

The agreement, contains a non-compete provision which provides that, for the term of the applicable agreement and for a period of 2 years thereafter, the applicable executive shall not, directly or indirectly: (i) engage in any other business, association or relationship of any kind with any business which provides, in whole or in part, the same or similar services and/or products offered by the which directly or indirectly competes with Company; nor (ii) solicit or accept, or induce any person or entity to reduce goods or services to Company, or in any manner assist others in the solicitation, acceptance, or inducement of, any business transactions with Company's existing and prospective clients, accounts, suppliers and/or other persons or entities with whom the Company has had business relationships (or whom Company had specifically identified for a prospective business relationship). These restrictions extend to the geographic area in which the Company actively conducted business immediately prior to termination of the applicable agreement.

Due to the application of various jurisdiction's laws, there is no assurance that any non-compete provisions or the non-solicitation provisions as set forth above will be enforced. We expect that each of the agreements which contain these provisions will contain a "blue pencil" provision that, in the event that a court determines that any of these restrictions are unenforceable, the parties to the agreement agreed that it is their desire that the court substitute an enforceable restriction in place of any restriction deemed unenforceable, and that the substitute restriction be deemed incorporated in the agreement and enforceable against the applicable executive.

The agreement contains customary representations and warranties by the applicable executive, relating to the agreement, and any securities of the Company that may be issued to the executive, and contains other customary miscellaneous provisions relating to waivers, assignments, third party rights, survival of provisions following termination, severability, notices, waiver of jury trials and other provisions.

The agreement provides that the agreement is governed by and construed and enforced in accordance with the internal laws of the State of Delaware, and for all purposes shall be construed in accordance with such laws, without giving effect to the choice of law provisions thereof. Each of the agreements provides that all legal proceedings concerning the applicable agreement will be in either (i) the courts of the State of New York and the federal courts of the United States of America in each case located in New York City, New York; or (ii) the Tokyo District Courts, provided that each agreement also includes a provision relating to any disputes being settled by arbitration, with such arbitration to take place in New York City, New York.

**Director Compensation**

We did not pay any compensation or make any equity awards or non-equity awards to any of our directors during the year ended March 31, 2025. Directors may be reimbursed for travel and other expenses directly related to their activities as directors. Directors who serve as employees receive no additional compensation for their service as directors.

**Agreements with Independent Directors**

The Company has entered into and expects to enter into Independent Director Agreements (each, a "Director Agreement") with each of its independent directors, providing for certain matters related to each such person's service as an independent director of the Company.

Pursuant to the Director Agreement, each independent director agrees to serve as an independent director of the Company and to devote as much time as is reasonably necessary to perform director's duties as a director of the Company, including duties as a member of one or more committees of the Board, to which the director may hereafter be appointed. The director party to the Director Agreement agrees that he or she will not, without the prior notification to the Board, engage in any other business activity which could materially interfere with the performance of Director's duties, services and responsibilities to the Company or which is in violation of the reasonable policies established from time to time by the Company, provided that the foregoing will not limit the applicable director's activities on behalf of any current employer and its affiliates the Board of Directors of any entities on which applicable director currently sits. The Director Agreements provide that the Board may require the resignation of the director if it determines that the director's other business activity materially interferes with the performance of the Director's duties, services and responsibilities to the Company.

The Director Agreements provide that the applicable director confirms that they are an "independent director" with respect to the Company (as such term has been construed under Japanese law with respect to directors of Japanese companies and the Nasdaq Capital Market), and the director will also provide certain customary representations and warranties as to such director's "accredited investor" status with respect to the receipt of any securities of the Company.

Each Director Agreement provides the compensation payable to the applicable director. In addition, the Company may grant to director certain Shares or other options or awards related thereto, as may be determined by the Board or a committee thereof, and the Director Agreement also provides that the Company will reimburse the applicable director for all reasonable out-of-pocket expenses incurred by the director in attending any in-person meetings or incurred in good faith in connection with the performance of the director's duties for the Company.

The Director Agreements include customary confidentiality provisions, and provisions related to the assignment of intellectual property rights to the Company. The Director Agreements contain customary miscellaneous provisions relating to successors and assigns, interpretation, enforcement, amendments and waivers. The Director Agreements are governed by Delaware law and are subject to jurisdiction in (i) the federal courts of the United States of America; (ii) State Courts; or (iii) the Tokyo District Courts.

The term of the Director Agreements continue until the director resigns or is removed in accordance with the Articles, or the death of the Director.

On October 3, 2025, the Company entered into an Independent Director Agreement with Chika Kawazoe in connection with her services as a director of the Company.

**RELATED PARTY TRANSACTIONS**

**Material Transactions with Related Parties**

These related parties of the Company with whom transactions are reported in these financial statements are as follows:

---

| | |
|:---|:---|
| Name of Related Parties | Nature of Relationship at September 30, 2025 and March 31, 2025 |
| Minaterrace Inc. | A company controlled by Tatsuma Yoshida, the CEO and the principal stockholder of the Company |
| at A&C Inc. | A company controlled by Yoshihito Arita, the director of the Company |
| Tasukeai General Incorporated Association | A company that is controlled by Minako Osawa, the director of the Company |

---

In the ordinary course of business, during the fiscal years ended March 31, 2025 and 2024, the Company was involved in certain transactions, either at cost or current market prices, and on the normal commercial terms with related parties.

The Company had the following related party balances as of September 30, 2025, March 31, 2025 and March 31, 2024 (in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | | **September 30,** | **March 31,** | **March 31,** |
|  | <br>Nature of transactions | **2025** | **2025** | **2024** |
| **Payable due to related parties:** |  |  |  |  |
| at A&C Inc. | Payable related to outsourcing expenses | $24 | $37 | $— |
| Tasukeai General Incorporated Association | Payable related to outsourcing expenses | 30 | 39 | 13 |

---

Outsourcing expenses represent the delegation specific tasks and services to external providers rather than managing them internally. These expenses are designed to reduce costs, especially when it comes to lowering hiring costs. Here the outsourcing expenses include from: A&C Inc. providing management and administrative services; Minaterrace, Inc. providing regulatory compliance service; and Tasukeai General Incorporation Association providing BPO services.

The Company had the following related party balances transactions for the six months ended September 30, 2025 and 2024 and for the fiscal years ended March 31, 2025 and 2024 (in thousands):

---

| | | | |
|:---|:---|:---|:---|
|  | | **Six Months Ended September 30,** | **Six Months Ended September 30,** |
|  | <br>**Nature of transactions** | **2025** | **2024** |
| **Revenue from related parties:** |  |  |  |
| at A&C Inc. | Revenue from outsourced services | $40 | $— |
| **Selling, General and Administrative Expenses with related parties:** |  |  |  |
| at A&C Inc. | Outsourcing expenses | 204 |  |
| Minaterrace Inc. | Outsourcing expenses | 8 | 13 |
| Tasukeai General Incorporated Association | Outsourcing expenses | 143 | 92 |

---

---

| | | | |
|:---|:---|:---|:---|
|  | | **Fiscal Year Ended March 31,** | **Fiscal Year Ended March 31,** |
|  | <br>**Nature of transactions** | **2025** | **2024** |
| **Selling, General and Administrative Expenses with related parties:** | **Selling, General and Administrative Expenses with related parties:** |  |  |
| at A&C Inc. | Outsourcing expenses | $212 | $— |
| Minaterrace Inc. | Outsourcing expenses | 21 | 114 |
| Tasukeai General Incorporated Association | Outsourcing expenses | 171 | 137 |

---

***Indemnification Agreements***

We intend to enter into indemnification agreements with each of our directors and executive officers. These agreements, among other things, require us or will require us to indemnify each director and executive officer to the fullest extent permitted under the Delaware General Corporation Law, including indemnification of expenses such as attorneys' fees, judgments, fines and settlement amounts incurred by the director or executive officer in any action or proceeding, including any action or proceeding by or in right of us, arising out of the person's services as a director or executive officer. For further information, see "Description of Securities—Limitations on Liability and Indemnification Matters."

**SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT**

The following table sets forth the number of shares of and percent of the Company's common stock beneficially owned as of the date of this prospectus by all directors, our named executive officers, our directors and executive officers as a group, and persons or groups known by us to own beneficially 5% or more of our common stock, immediately prior to this offering, and immediately after the closing of this offering, as adjusted to reflect the sale of [●] shares of our common stock in this offering, which assumes the Representative exercises its over-allotment option in-full to purchase additional shares of our common stock.

Beneficial ownership is determined in accordance with SEC rules and generally includes voting or investment power with respect to securities. Unless we have indicated otherwise, each person named in the table has sole voting power and sole investment power for the shares listed opposite such person's name. For purposes of this table, a person or group of persons is deemed to have "beneficial ownership" of any shares of common stock that such person or any member of such group has the right to acquire within sixty (60) days of September 1, 2025. For purposes of computing the percentage of outstanding shares of our common stock held by each person or group of persons named above, any shares that such person or persons has the right to acquire within sixty (60) days of September 1, 2025, are deemed to be outstanding for such person, but not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. The inclusion herein of any shares listed as beneficially owned does not constitute an admission of beneficial ownership by any person. The share ownership numbers after this offering for the beneficial owners indicated below exclude any potential purchases that may be made by such persons in this offering. The business address of each of the beneficial owners listed below is c/o AMATUHI HOLDINGS, Inc., Nisseki Yokohama Building, 10th Floor, 1-1-8 Sakuragichō, Naka Ward, Yokohama, Kanagawa 231-0062, Japan.

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Common Stock Beneficially**<br> **Owned Prior to this Offering<sup>(1)</sup>** | **Common Stock Beneficially**<br> **Owned Prior to this Offering<sup>(1)</sup>** | **Common Stock Beneficially**<br> **Owned After this Offering<sup>(2)</sup>** | **Common Stock Beneficially**<br> **Owned After this Offering<sup>(2)</sup>** |
| <br>**Name of Beneficial Owner** | **Shares** | **Percent** | **Shares** | **Percent** |
| **Directors and Executive Officers** |  |  |  |  |
| Tatsuma Yoshida | 1025000 | 5% | 1025000 | 4.4% |
| Yoshihito Arita |  | -% |  | -% |
| Chika Kawazoe |  | -% |  | -% |
| All directors and officers as a group (3 persons) <sup>(3)</sup> | 1025000 | 5% |  | 4.4% |
| **Principal Shareholders (more than 5%):** |  |  |  |  |
| Japan Lifestyle No. 1 Investment Limited Partnership<sup>(4)</sup> | 19475000 | 95% | 19475000 | 82.9% |

---

\* less than 1%.

&nbsp;&nbsp;&nbsp;&nbsp;(1) Based
 on 20,500,000 shares of our common stock outstanding as of the date of this prospectus.

(2) Based
 on 23,500,000 shares of common stock issued and outstanding after this offering, which assumes the Representative does not
 exercise its over-allotment option to purchase additional shares of our common stock.

(3) Includes
 the directors and named executive officers listed above.

(4) Japan Lifestyle No. 1 Investment Limited Partnership is a Japanese
 Limited Partnership. 17Value Co., Ltd., is the General Partner who exercises the sole voting and dispositive powers with respect
 to the 19,475,000 shares. The registered address of 17Value Co., Ltd., is 1-9-15-1904 Kaigan, Minato-ku, Tokyo, Japan 105-0022. 17Value
 Co., Ltd. is controlled by Takafumi Kumamoto.

**DESCRIPTION OF SECURITIES**

The following description of our capital stock is based upon our certificate of incorporation, as amended, our bylaws and applicable provisions of law, in each case as currently in effect. This discussion does not purport to be complete and is qualified in its entirety by reference to our certificate of incorporation, as amended, and our bylaws, copies of which are filed with the SEC as exhibits to the registration statement of which this prospectus is a part.

**Authorized Capital Stock**

We are authorized to issue 360,000,000 shares of common stock, par value $0.000001 per share, and 40,000,000 shares of preferred stock, par value $0.000001 per share.

As of the date of the prospectus, we had 20,500,000 shares of common stock issued and outstanding and no shares of preferred stock issued and outstanding. As of such date, there were two holders of record of our common stock and no holders of record of our preferred stock.

**Common Stock**

The holders of our common stock are entitled to one vote for each share held on all matters to be voted on by the Company's stockholders. There shall be no cumulative voting.

Subject to the rights of holders of preferred stock, the holders of shares of our common stock are entitled to dividends when and as declared by the Board from funds legally available therefor if, as and when determined by the Board of Directors of the Company in their sole discretion, subject to provisions of law, and any provision of the Company's certificate of incorporation, as amended from time to time. In the event of any voluntary or involuntary liquidation, dissolution or winding up of our affairs, the holders of our common stock will be entitled to share ratably in the net assets legally available for distribution to stockholders after the payment of or provision for all of our debts and other liabilities. There are no preemptive, conversion or redemption privileges, nor sinking fund provisions with respect to the common stock.

All outstanding shares of common stock are, and the common stock to be outstanding upon completion of this offering will be duly authorized, validly issued, fully paid and non-assessable.

**Preferred Stock**

Our certificate of incorporation authorizes our Board to issue up to 20,000,000 shares of preferred stock in two series. The two series consist of: Series A Voting Preferred Shares, 10,000,000 authorized, none issued; and, Series B, non-designated Preferred Shares, 10,000,000 authorized, none issued. The Series A Voting Preferred shares have no dividend nor liquidation rights. The holders of Series A Voting Preferred Stock shall be entitled to: (a) notice of any meeting of the shareholders of the Corporation; and (b) have the power to vote each share at any shareholder meeting, where each share of Series A Voting Preferred Stock carries the weight of ten (10) votes for each share of common stock. The Series B Preferred Shares are not designated, and the designation of these shares may be determined by the Board of Directors prior to issuance., Our Board of Directors could, without stockholder approval, issue preferred stock with voting and other rights that could adversely affect the voting power and other rights of the holders of common stock, and which could have the effect of making it more difficult for a third party to acquire, or of discouraging a third party from attempting to acquire, a majority of our outstanding voting stock.

**Exclusive Forum Provision**

This choice of forum provision may limit a bondholder's ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits against us and our directors, officers and employees. Alternatively, a court could find these provisions of our certificate of incorporation and our bylaws to be inapplicable or unenforceable in respect of one or more of the specified types of actions or proceedings, which may require us to incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business and financial condition.

**Fee Shifting Provision**

Section 7.4 of our bylaws provides that "[i]f any action is brought by any party against another party, relating to or arising out of these Bylaws, or the enforcement hereof, the prevailing party shall be entitled to recover from the other party reasonable attorneys' fees, costs and expenses incurred in connection with the prosecution or defense of such action, provided that the provisions of this sentence shall not apply with respect to "internal corporate claims" as defined in Section 109(b) of the DGCL."

Our bylaws provide that for this section, the term "attorneys' fees" or "attorneys' fees and costs" means the fees and expenses of counsel to the Company and any other parties asserting a claim subject to Section 7.4 of the bylaws, which may include printing, photocopying, duplicating and other expenses, air freight charges, and fees billed for law clerks, paralegals and other persons not admitted to the bar but performing services under the supervision of an attorney, and the costs and fees incurred in connection with the enforcement or collection of any judgment obtained in any such proceeding.

We adopted the fee-shifting provision to eliminate or decrease nuisance and frivolous litigation. We intend to apply the fee-shifting provision broadly to all actions except for claims brought under the Exchange Act and Securities Act.

There is no set level of recovery required to be met by a plaintiff to avoid payment under this provision. Instead, whoever is the prevailing party is entitled to recover the reasonable attorneys' fees, costs and expenses incurred in connection with the prosecution or defense of such action. Any party who brings an action, and the party against whom such action is brought under Section 7.4 of our bylaws, which could include, but is not limited to former and current shareholders, Company directors, officers, affiliates, legal counsel, expert witnesses and other parties, are subject to this provision. Additionally, any party who brings an action, and the party against whom such action is brought under Section 7.4 of our bylaws, which could include, but is not limited to former and current shareholders, Company directors, officers, affiliates, legal counsel, expert witnesses and other parties, would be able to recover fees under this provision.

In the event you initiate or assert a claim against us, in accordance with the dispute resolution provisions contained in our Bylaws, and you do not, in a judgment prevail, you will be obligated to reimburse us for all reasonable costs and expenses incurred in connection with such claim, including, but not limited to, reasonable attorney's fees and expenses and costs of appeal, if any. Additionally, this provision in Section 7.4 of our bylaws could discourage shareholder lawsuits that might otherwise benefit the Company and its shareholders.

THE FEE SHIFTING PROVISION CONTAINED IN THE BYLAWS IS NOT INTENDED TO BE DEEMED A WAIVER BY ANY HOLDER OF COMMON STOCK OF THE COMPANY'S COMPLIANCE WITH THE U.S. FEDERAL SECURITIES LAWS AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER. THE FEE SHIFTING PROVISION CONTAINED IN THE BYLAWS DO NOT APPLY TO CLAIMS BROUGHT UNDER THE EXCHANGE ACT AND SECURITIES ACT.

**Anti-Takeover Effects of Certain Provisions of Our Certificate of Incorporation, as Amended, and Our Bylaws**

The provisions of our certificate of incorporation and our bylaws could make it more difficult to acquire us by means of a merger, tender offer, proxy contest, open market purchases, removal of incumbent directors and otherwise. These provisions, which are summarized below, are expected to discourage types of coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of us to first negotiate with us. We believe that the benefits of increased protection of our potential ability to negotiate with the proponent of an unfriendly or unsolicited proposal to acquire or restructure us outweigh the disadvantages of discouraging takeover or acquisition proposals because negotiation of these proposals could result in an improvement of their terms.

*Removal of Directors.* Our certificate of incorporation and bylaws provide that directors may be removed prior to the expiration of their terms by the affirmative vote of the holders of not less than fifty one percent (51%) of the voting power of the issued and outstanding stock entitled to vote.

*Preferred Stock.* Our certificate of incorporation authorizes the issuance of up to 40,000,000 shares of preferred stock with such rights and preferences as may be determined from time to time by our Board of Directors in their sole discretion. Our Board of Directors may, without stockholder approval, issue a series of preferred stock with dividends, liquidation, conversion, voting or other rights that could adversely affect the voting power or other rights of the holders of our common stock.

*Series A Preferred Shares.* Section 4. States the holders of Series A Voting Preferred Stock shall be entitled to (a) notice of any meeting of the shareholders of the Corporation; and (b) have the power to vote each share at any shareholder meeting, where each share of Series B Voting Preferred Stock carries the weight of ten (10) votes for each share of common stock.

*Amendment of Bylaws.* The certificate of incorporation and bylaws provide that the bylaws may be altered, amended or repealed by the Board of Directors by an affirmative vote of a majority of the Board of Directors at any regular meeting of the Board of Directors.

*Limitation of Liability*. The certificate of incorporation provides for the limitation of liability of, and provides indemnification to, our directors and officers.

*Special Stockholders Meeting*. The certificate of incorporation provides that a special meeting of the stockholders may only be called by a majority of the Board of Directors.

 

*Nominations of Directors*. The Bylaws provide for advance notice procedures that stockholders must comply with in order to nominate candidates to our Board of Directors or to propose matters to be acted upon at a stockholders' meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer's own slate of directors or otherwise attempting to obtain control of the Company.

**Transfer Agent**

The transfer agent and registrar for our common stock is VStock Transfer, LLC. The transfer agent and registrar's address is 18 Lafayette Place, Woodmere, New York 11598, and its telephone number is 212-828-8436.

**SHARES ELIGIBLE FOR FUTURE SALE**

Before this offering, there has not been a public market for shares of our common stock. Future sales of substantial amounts of shares of our common stock, in the public market after this offering, or the possibility of these sales occurring, could cause the prevailing market price for our common stock to fall or impair our ability to raise equity capital in the future.

Immediately following the closing of this offering, we will have 21,500,000 shares of common stock issued and outstanding. In the event the Representative exercises its over-allotment option in full, we will have 21,650,000 shares of common stock issued and outstanding. The common stock sold in this offering will be freely tradable without restriction or further registration or qualification under the Securities Act.

Previously issued shares of common stock that were not offered and sold in this offering, as well as shares issuable upon the exercise of warrants and subject to employee stock options, are or will be upon issuance, "restricted securities," as that term is defined in Rule 144 under the Securities Act. These restricted securities are eligible for public sale only if such public resale is registered under the Securities Act or if the resale qualifies for an exemption from registration under Rule 144 or Rule 701 under the Securities Act, which are summarized below.

**Rule 144**

In general, a person who has beneficially owned restricted shares of our common stock for at least twelve months, or at least six months in the event we have been a reporting company under the Exchange Act for at least ninety (90) days before the sale, would be entitled to sell such securities, provided that such person is not deemed to be an affiliate of ours at the time of sale or to have been an affiliate of ours at any time during the ninety (90) days preceding the sale. A person who is an affiliate of ours at such time would be subject to additional restrictions, by which such person would be entitled to sell within any three-month period only a number of shares that does not exceed the greater of the following:

● 1% of the number of shares of our common stock then outstanding; or

● 1% of the average weekly trading volume of our common stock during the four calendar weeks preceding the filing by such person of a notice on Form 144 with respect to the sale; provided that, in each case, we are subject to the periodic reporting requirements of the Exchange Act for at least 90 days before the sale. Rule 144 trades must also comply with the manner of sale, notice and other provisions of Rule 144, to the extent applicable.

**Rule 701**

In general, Rule 701 allows a stockholder who purchased shares of our capital stock pursuant to a written compensatory plan or contract and who is not deemed to have been an affiliate of ours during the immediately preceding 90 days to sell those shares in reliance upon Rule 144, but without being required to comply with the public information, holding period, volume limitation or notice provisions of Rule 144. All holders of Rule 701 shares, however, are required to wait until ninety (90) days after the date of this prospectus before selling shares pursuant to Rule 701.

**Lock-Up Agreements**

We and all of our directors and executive officers have agreed not to offer for sale, issue, sell, contract to sell, pledge or otherwise dispose of any of our common stock or securities convertible into common stock without the prior written consent of the representative for a period of twelve (12) months from the date of this prospectus, subject to certain limited exceptions. Our holders of our outstanding common stock (or securities convertible into shares of our common stock) have agreed not to offer for sale, issue, sell, contract to sell, pledge or otherwise dispose of any of our common stock or securities convertible into common stock without the prior written consent of the representative for a period of twelve (12) months from the date of this prospectus, subject to certain limited exceptions. See "Underwriting—Lock-Up Agreements."

**MATERIAL U.S. FEDERAL TAX CONSIDERATIONS FOR**

**NON-U.S. HOLDERS OF COMMON STOCK**

The following is a summary of certain material U.S. federal income and estate tax consequences to a non-U.S. holder (as defined below) of the purchase, ownership and disposition of our common stock as of the date hereof. Except where noted, this summary deals only with common stock that is held as a capital asset.

A "non-U.S. holder" means a beneficial owner of our common stock (other than an entity treated as a partnership for U.S. federal income tax purposes) that is not, for U.S. federal income tax purposes, any of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;➢ an individual citizen or resident of the United States;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;➢ a corporation (or any other entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;➢ an estate the income of which is subject to U.S. federal income taxation regardless of its source; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;➢ a trust if it (1) is subject to the primary supervision of a court within the United States and one or more

U.S. persons have the authority to control all substantial decisions of the trust or (2) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.

This summary is based upon provisions of the Code, and the Treasury Regulations promulgated thereunder, rulings and judicial decisions as of the date hereof. Those authorities may be changed, perhaps retroactively, so as to result in U.S. federal income and estate tax consequences different from those summarized below. We cannot assure you that such a change in law will not alter significantly the U.S. federal income and estate tax considerations we describe in this summary. This summary does not address all aspects of U.S. federal income and estate taxes and does not deal with foreign, state, local or other tax considerations that may be relevant to non-U.S. holders in light of their particular circumstances. In addition, it does not represent a detailed description of the U.S. federal income and estate tax consequences applicable to you if you are subject to special treatment under the U.S. federal income tax laws (including if you are a U.S. expatriate, foreign pension fund, financial institution, insurance company, tax-exempt organization, trader, broker or dealer in securities "controlled foreign corporation," "passive foreign investment company," a partnership or other pass-through entity for U.S. federal income tax purposes (or an investor in such a pass-through entity), a person who acquired shares of our common stock as compensation or otherwise in connection with the performance of services, or a person who has acquired shares of our common stock as part of a straddle, hedge, conversion transaction or other integrated investment).

If a partnership (or other entity treated as a partnership for U.S. federal income tax purposes) holds our common stock, the tax treatment of a partner will generally depend upon the status of the partner and the activities of the partnership. If you are a partner of a partnership holding our common stock, you should consult your tax advisors.

**If you are considering the purchase of our common stock, you should consult your own tax advisors concerning the particular U.S. federal income and estate tax consequences to you of the purchase, ownership and disposition of our common stock, as well as the consequences to you arising under other U.S. federal tax laws and the laws of any other taxing jurisdiction.**

**Distributions**

As discussed above under "Dividend Policy," we do not currently anticipate paying cash dividends on shares of our common stock in the foreseeable future. If we make distributions of cash or other property (other than certain pro rata distributions of our stock) in respect of our common stock, the distribution will generally be treated as a dividend for U.S. federal income tax purposes to the extent it is paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Any portion of a distribution that exceeds our current and accumulated earnings and profits generally will be treated first as a tax-free return of capital to the extent of the non-U.S. holder's adjusted tax basis in our common stock, causing a reduction in the adjusted tax basis of a non-U.S. holder's common stock, but not below zero. To the extent the amount of the distribution exceeds our current and accumulated earnings and profits and a non-U.S. holder's adjusted basis in our common stock, the excess will be treated as described below under "— Gain on Disposition of Common Stock."

Dividends paid to a non-U.S. holder of our common stock generally will be subject to withholding of U.S. federal income tax at a 30% rate or such lower rate as may be specified by an applicable income tax treaty. However, dividends that are effectively connected with the conduct of a trade or business by the non-U.S. holder within the United States (and, if required by an applicable income tax treaty, are attributable to a U.S. permanent establishment of the non-U.S. holder) are not subject to such withholding tax, provided certain certification and disclosure requirements are satisfied. Instead, such dividends are subject to U.S. federal income tax on a net income basis in the same manner as if the non-U.S. holder were a "United States person" as defined under the Code. Any such effectively connected dividends received by a foreign corporation may be subject to an additional "branch profits tax" at a 30% rate or such lower rate as may be specified by an applicable income tax treaty.

A non-U.S. holder of our common stock who wishes to claim the benefit of an applicable treaty rate and avoid backup withholding, as discussed below, for dividends will be required (a) to provide the applicable withholding agent with a properly executed Internal Revenue Service Form W-8BEN or Form W-8BEN-E (or other applicable form) certifying under penalty of perjury that such holder is not a United States person as defined under the Code and is eligible for treaty benefits or (b) if our common stock is held through certain foreign intermediaries, to satisfy the relevant certification requirements of applicable U.S. Treasury regulations. Special certification and other requirements apply to certain non-U.S. holders that are pass-through entities rather than corporations or individuals.

A non-U.S. holder of our common stock eligible for a reduced rate of U.S. federal withholding tax pursuant to an income tax treaty may obtain a refund of any excess amounts withheld by timely filing an appropriate claim for refund with the Internal Revenue Service. Non-U.S. holders are urged to consult their own tax advisors regarding their entitlement to the benefits under any applicable income tax treaty.

**Gain on Disposition of Common Stock**

Subject to the discussion of backup withholding below, any gain realized by a non-U.S. holder on the sale or other taxable disposition of our common stock generally will not be subject to U.S. federal income tax unless:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;➢ the gain is effectively connected with a trade or business of the non-U.S. holder in the United States (and, if required by an applicable income tax treaty, is attributable to a U.S. permanent establishment of the non-U.S. holder);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;➢ the non-U.S. holder is an individual who is present in the United States for 183 days or more in the taxable year of the disposition, and certain other conditions are met; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;➢ we are or have been a "United States real property holding corporation" for U.S. federal income tax purposes and certain other conditions are met.

A non-U.S. holder described in the first bullet point immediately above will be subject to tax on the gain derived from the sale under regular graduated U.S. federal income tax rates. In addition, if any non-U.S. holder described in the first bullet point immediately above is a foreign corporation, the gain realized by such non-U.S. holder may be subject to the branch profits tax at a 30% rate (or such lower rate as may be specified by an applicable income tax treaty). An individual non-U.S. holder described in the second bullet point immediately above will be subject to a tax equal to 30% (or such lower rate as may be specified by an applicable income tax treaty) on the gain derived from the sale, which may be offset by U.S. source capital losses, even though the individual is not considered a resident of the United States, provided that the individual has timely filed U.S. federal income tax returns with respect to such losses.

We believe we are not, and have not been at any time since formation, and do not anticipate becoming a "United States real property holding corporation" for U.S. federal income tax purposes.

**Federal Estate Tax**

Common stock held by an individual non-U.S. holder at the time of death will be included in such holder's gross estate for U.S. federal estate tax purposes, unless an applicable estate tax treaty provides otherwise.

**Information Reporting and Backup Withholding**

We must report annually to the Internal Revenue Service and to each non-U.S. holder the amount of distributions paid to such holder and the tax withheld with respect to such distributions, regardless of whether withholding was required. Copies of the information returns reporting such distributions and any withholding may also be made available to the tax authorities in the country in which the non-U.S. holder resides under the provisions of an applicable income tax treaty.

A non-U.S. holder will not be subject to backup withholding on dividends received if such holder certifies under penalty of perjury that it is a non-U.S. holder (and the payor does not have actual knowledge or reason to know that such holder is a U.S. person as defined under the Code), or such holder otherwise establishes an exemption.

Information reporting and, depending on the circumstances, backup withholding will apply to the proceeds of a sale or other disposition of our common stock made within the United States or conducted through certain U.S.-related financial intermediaries, unless the beneficial owner certifies under penalty of perjury that it is a non-U.S. holder (and the payor does not have actual knowledge or reason to know that the beneficial owner is a U.S. person as defined under the Code), or such owner otherwise establishes an exemption.

Backup withholding is not an additional tax and any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against a non-U.S. holder's U.S. federal income tax liability provided the required information is timely furnished to the Internal Revenue Service.

**Additional Withholding Requirements**

Under Sections 1471 through 1474 of the Code (such Sections commonly referred to as "FATCA"), a 30% U.S. federal withholding tax may apply to any dividends paid on our common stock to (i) a "foreign financial institution" (as specifically defined in the Code) which does not provide sufficient documentation, typically on IRS Form W-8BEN-E, evidencing either (x) an exemption from FATCA, or (y) its compliance (or deemed compliance) with FATCA (which may alternatively be in the form of compliance with an intergovernmental agreement with the United States) in a manner which avoids withholding, or (ii) a "non-financial foreign entity" (as specifically defined in the Code) which does not provide sufficient documentation, typically on IRS Form W-8BEN-E, evidencing either (x) an exemption from FATCA, or (y) adequate information regarding certain substantial U.S. beneficial owners of such entity (if any). If a dividend payment is both subject to withholding under FATCA and subject to the withholding tax discussed above under "— Distributions," the withholding under FATCA may be credited against, and therefore reduce, such other withholding tax. While withholding under FATCA would have also applied to payments of gross proceeds from the sale or other disposition of our common stock on or after January 1, 2019, recently proposed Treasury Regulations eliminate such withholding on payments of gross proceeds entirely. Taxpayers generally may rely on these proposed Treasury Regulations until final Treasury Regulations are issued. You should consult your own tax advisors regarding these requirements and whether they may be relevant to your ownership and disposition of our common stock.

**UNDERWRITING**

Spartan Capital, LLC is acting as representative (the "Representative") of the underwriters. Subject to the terms and conditions of an underwriting agreement between us and the Representative (the "Underwriting Agreement"), we have agreed to sell to each underwriter named below, and each underwriter named below has severally agreed to purchase, at the public offering price less the underwriting discounts set forth on the cover page of this prospectus, the number of shares of common stock listed next to its name in the following table:

---

| | |
|:---|:---|
| **Underwriter** | **Number of**<br> **Shares** |
| Spartan Capital, LLC | [●] |
| Total |  |

---

The underwriters have committed to purchase all of the Common Stock offered by us in this offering, other than those covered by the over-allotment option described below. The obligations of the underwriters may be terminated upon the occurrence of certain events specified in the Underwriting Agreement. Furthermore, pursuant to the Underwriting Agreement, the underwriters' obligations are subject to customary conditions, representations, and warranties, such as receipt by the underwriters of officers' certificates and legal opinions.

The underwriters are offering the common stock subject to prior sale when, as, and if issued to and accepted by them, subject to approval of legal matters by their counsel and other conditions. The underwriters reserve the right to withdraw, cancel, or modify offers to the public and to reject orders in whole or in part.

The underwriters propose to offer the common stock to the public at the public offering price set forth on the cover of the prospectus. After the shares of common stock are released for sale to the public, the underwriters may from time to time change the offering price and other selling terms.

**Over-Allotment Option**

We have granted a 45-day option to the Representative to purchase up to 450,000 additional shares of our common stock (15% of the shares sold in this offering), solely to cover over-allotments, if any. If the representative exercises all or part of this option, it will purchase shares covered by the option at the initial public offering price per share that appears on the cover page of this prospectus, less the underwriting discount. If this option is exercised in full, the gross proceeds from this offering will be $17,250,000 and the total net proceeds, before expenses, to us will be $15,870,000.

**Discounts and Commissions**

The underwriters propose initially to offer the shares of common stock to the public at the public offering price set forth on the cover page of this prospectus and to dealers at those prices less a concession not in excess of $[●] per share of common stock, of which up to $[●] may be re-allowed to other dealers. If all of the shares of common stock offered by us are not sold at the public offering price, the underwriters may change the offering price and other selling terms by means of a supplement to this prospectus.

The following table shows the public offering price, underwriting discounts and commissions and proceeds before expenses to us. The information assumes either no exercise or full exercise of the over-allotment option we granted to the Representative.

---

| | | | |
|:---|:---|:---|:---|
|  | **Per Share** | **Total Without**<br> **Over-**<br> **allotment**<br> **Option** | **Total With**<br> **Over-**<br> **allotment**<br> **Option**  |
| Assumed Initial Public offering price | $[●] | $[●] | $[●] |
| Underwriting discount (8.0%) (1) | $[●] | $[●] | $[●] |
| Proceeds, before expenses, to us | $[●] | $[●] | $[●] |

---

(1) We have agreed to a reduced underwriting discount and commission of 5% per share on investors in this offering introduced by us. For the purpose of this calculation only, we assume the maximum underwriting discount and commissions are payable.

We have paid an expense deposit of $25,000 to the representative, which will be applied against the out-of-pocket accountable expenses that will be paid by us to the underwriters in connection with this offering, and will be reimbursed to us to the extent not actually incurred in compliance with FINRA Rule 5110(g)(4)(A). We have agreed to reimburse the Representative for the fees and expenses of its legal counsel in connection with this offering and for all other expenses in an amount not to exceed $125,000 plus up to $25,00 for clearing firm settlement expenses for this offering.

Our total estimated expenses of the offering, including registration, filing and listing fees, printing fees and legal and accounting expenses, but excluding underwriting discounts and commissions, are approximately $579,000.

**Lock-Up Agreements**

Pursuant to "lock-up" agreements, we, our executive officers and directors, and our stockholders prior to completion of this offering, have agreed, without the prior written consent of the representative not to directly or indirectly, offer to sell, sell, pledge or otherwise transfer or dispose of any of shares of (or enter into any transaction or device that is designed to, or could be expected to, result in the transfer or disposition by any person at any time in the future of) our common stock, enter into any swap or other derivatives transaction that transfers to another, in whole or in part, any of the economic benefits or risks of ownership of shares of our common stock, make any demand for or exercise any right or cause to be filed a registration statement, including any amendments thereto, with respect to the registration of any shares of common stock or securities convertible into or exercisable or exchangeable for common stock or any other securities of ours or publicly disclose the intention to do any of the foregoing, subject to customary exceptions, for a period of 180 days after the date of this prospectus in the case of us, our directors, and executive officers, and [●] with respect to our stockholders.

**Right of First Refusal**

Until six months from the closing date of this offering, the Representative will have an irrevocable right of first refusal, in its sole discretion, (i) to act as sole investment banker, sole book-runner, and/or sole underwriter, at the Representative's sole discretion, for each and every future public and private equity and debt offering, including all equity linked financings and financing or refinancing of any indebtedness, during such six month period, on terms customary to the representative; or (ii) to act as financial advisor if we decide to dispose of or acquire business units or acquire any of our outstanding securities or make any exchange or tender offer or enter into a merger, consolidation or other business combination or any recapitalization, reorganization, restructuring or other similar transaction, including, without limitation, an extraordinary dividend or distributions or a spin-off or split-off. The Representative will have the sole right to determine whether or not any other broker-dealer will have the right to participate in any such offering and the economic terms of any such participation. The Representative will not have more than one opportunity to waive or terminate the right of first refusal in consideration of any payment or fee.

**Discretionary Accounts**

The underwriters do not intend to confirm sales of the shares of common stock offered hereby to any accounts over which they have discretionary authority.

**Determination of Offering Price**

The public offering price of the securities we are offering was negotiated between us and the underwriters. Factors considered in determining the public offering price of the shares include the history and prospects of the Company, the stage of development of our business, our business plans for the future and the extent to which they have been implemented, an assessment of our management, general conditions of the securities markets at the time of the offering and such other factors as were deemed relevant.

**Other**

From time to time, certain of the underwriters and/or their affiliates may in the future provide various investment banking and other financial services for us for which they may receive customary fees. In the course of their businesses, the underwriters and their affiliates may actively trade our securities or loans for their own account or for the accounts of customers, and, accordingly, the underwriters and their affiliates may at any time hold long or short positions in such securities or loans. Except for services provided in connection with this offering, no underwriter has provided any investment banking or other financial services to us during the 180-day period preceding the date of this prospectus and we do not expect to retain any underwriter to perform any investment banking or other financial services for at least 90 days after the date of this prospectus.

**Price Stabilization, Short Positions and Penalty Bids**

In connection with this offering, the underwriters may engage in transactions that stabilize, maintain or otherwise affect the price of our common stock. Specifically, the underwriters may over-allot in connection with this offering by selling more shares than are set forth on the cover page of this prospectus. This creates a short position in our common stock for its own account. The short position may be either a covered short position or a naked short position. In a covered short position, the number of shares of common stock over-allotted by the underwriters is not greater than the number of shares of common stock that they may purchase in the over-allotment option. In a naked short position, the number of shares of common stock involved is greater than the number of shares common stock in the over-allotment option. To close out a short position, the underwriters may elect to exercise all or part of the over-allotment option. The underwriters may also elect to stabilize the price of our common stock or reduce any short position by bidding for, and purchasing, common stock in the open market.

The underwriters may also impose a penalty bid. This occurs when a particular underwriter or dealer repays selling concessions allowed to it for distributing shares of common stock in this offering because the underwriter repurchases the shares of common stock in stabilizing or short covering transactions.

Finally, the underwriters may bid for, and purchase, shares of our common stock in market making transactions, including "passive" market making transactions as described below.

These activities may stabilize or maintain the market price of our common stock at a price that is higher than the price that might otherwise exist in the absence of these activities. The underwriters are not required to engage in these activities and may discontinue any of these activities at any time without notice. These transactions may be affected on the national securities exchange on which our shares of common stock are traded, in the over-the-counter market, or otherwise.

**Indemnification**

We have agreed to indemnify the underwriters against liabilities relating to this offering arising under the Securities Act and the Exchange Act, liabilities arising from breaches of some, or all of the representations and warranties contained in the underwriting agreement, and to contribute to payments that the underwriters may be required to make for these liabilities.

**Electronic Distribution**

This prospectus in electronic format may be made available on websites or through other online services maintained by one or more of the underwriters, or by their affiliates. Other than this prospectus in electronic format, the information on any underwriter's website and any information contained in any other website maintained by an underwriter is not part of this prospectus or the registration statement of which this prospectus forms a part, has not been approved and/or endorsed by us or any underwriter in its capacity as underwriter, and should not be relied upon by investors.

**Offer restrictions outside the United States**

Other than in the United States, no action has been taken by us or the underwriters that would permit a public offering of the securities offered by this prospectus in any jurisdiction where action for that purpose is required. The securities offered by this prospectus may not be offered or sold, directly or indirectly, nor may this prospectus or any other offering material or advertisements in connection with the offer and sale of any such securities be distributed or published in any jurisdiction, except under circumstances that will result in compliance with the applicable rules and regulations of that jurisdiction. Persons into whose possession this prospectus comes are advised to inform themselves about and to observe any restrictions relating to the offering and the distribution of this prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities offered by this prospectus in any jurisdiction in which such an offer or a solicitation is unlawful.

***Australia***

This prospectus is not a disclosure document under Chapter 6D of the Australian Corporations Act, has not been lodged with the Australian Securities and Investments Commission and does not purport to include the information required of a disclosure document under Chapter 6D of the Australian Corporations Act. Accordingly, (i) the offer of the securities under this prospectus is only made to persons to whom it is lawful to offer the securities without disclosure under Chapter 6D of the Australian Corporations Act under one or more exemptions set out in section 708 of the Australian Corporations Act, (ii) this prospectus is made available in Australia only to those persons as set forth in clause (i) above, and (iii) the offeree must be sent a notice stating in substance that by accepting this offer, the offeree represents that the offeree is such a person as set forth in clause (i) above, and, unless permitted under the Australian Corporations Act, agrees not to sell or offer for sale within Australia any of the securities sold to the offeree within 12 months after its transfer to the offeree under this prospectus.

***Canada***

The shares of common stock may be sold only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the securities must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable securities laws.

Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this prospectus (including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser's province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser's province or territory for particulars of these rights or consult with a legal advisor.

***China***

The information in this document does not constitute a public offer of the securities, whether by way of sale or subscription, in the People's Republic of China (excluding, for purposes of this paragraph, Hong Kong Special Administrative Region, Macau Special Administrative Region and Taiwan). The securities may not be offered or sold directly or indirectly in the PRC to legal or natural persons other than directly to "qualified domestic institutional investors."

***European Economic Area—Belgium, Germany, Luxembourg and Netherlands***

The information in this document has been prepared on the basis that all offers of securities will be made pursuant to an exemption under the Directive 2003/71/EC ("Prospectus Directive"), as implemented in Member States of the European Economic Area (each, a "Relevant Member State"), from the requirement to produce a prospectus for offers of securities.

An offer to the public of securities has not been made, and may not be made, in a Relevant Member State except pursuant to one of the following exemptions under the Prospectus Directive as implemented in that Relevant Member State:

● to legal entities that are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities;

● to any legal entity that has two or more of (i) an average of at least 250 employees during its last fiscal year; (ii) a total balance sheet of more than €43,000,000 (as shown on its last annual unconsolidated or consolidated financial statements) and (iii) an annual net turnover of more than €50,000,000 (as shown on its last annual unconsolidated or consolidated financial statements);

● to fewer than 100 natural or legal persons (other than qualified investors within the meaning of Article 2(1)(e) of the Prospectus Directive) subject to obtaining the prior consent of the Company or any underwriter for any such offer; or

● in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of securities shall result in a requirement for the publication by the Company of a prospectus pursuant to Article 3 of the Prospectus Directive.

***France***

This document is not being distributed in the context of a public offering of financial securities (offre au public de titres financiers) in France within the meaning of Article L.411-1 of the French Monetary and Financial Code (Code Monétaire et Financier) and Articles 211-1 et seq. of the General Regulation of the French Autorité des marchés financiers ("AMF"). The securities have not been offered or sold and will not be offered or sold, directly or indirectly, to the public in France.

This document and any other offering material relating to the securities have not been, and will not be, submitted to the AMF for approval in France and, accordingly, may not be distributed or caused to distributed, directly or indirectly, to the public in France.

Such offers, sales and distributions have been and shall only be made in France to (i) qualified investors (investisseurs qualifiés) acting for their own account, as defined in and in accordance with Articles L.411-2-II-2° and D.411-1 to D.411-3, D.744-1, D.754-1 ;and D.764-1 of the French Monetary and Financial Code and any implementing regulation and/or (ii) a restricted number of non-qualified investors (cercle restreint d'investisseurs) acting for their own account, as defined in and in accordance with Articles L.411-2-II-2° and D.411-4, D.744-1, D.754-1; and D.764-1 of the French Monetary and Financial Code and any implementing regulation.

Pursuant to Article 211-3 of the General Regulation of the AMF, investors in France are informed that the securities cannot be distributed (directly or indirectly) to the public by the investors otherwise than in accordance with Articles L.411-1, L.411-2, L.412-1 and L.621-8 to L.621-8-3 of the French Monetary and Financial Code.

***Ireland***

The information in this document does not constitute a prospectus under any Irish laws or regulations and this document has not been filed with or approved by any Irish regulatory authority as the information has not been prepared in the context of a public offering of securities in Ireland within the meaning of the Irish Prospectus (Directive 2003/71/EC) Regulations 2005 (the "Prospectus Regulations"). The securities have not been offered or sold, and will not be offered, sold or delivered directly or indirectly in Ireland by way of a public offering, except to (i) qualified investors as defined in Regulation 2(l) of the Prospectus Regulations and (ii) fewer than 100 natural or legal persons who are not qualified investors.

***Israel***

The securities offered by this prospectus have not been approved or disapproved by the Israeli Securities Authority (the ISA), nor have such securities been registered for sale in Israel. The shares may not be offered or sold, directly or indirectly, to the public in Israel, absent the publication of a prospectus. The ISA has not issued permits, approvals or licenses in connection with the offering or publishing the prospectus; nor has it authenticated the details included herein, confirmed their reliability or completeness, or rendered an opinion as to the quality of the securities being offered. Any resale in Israel, directly or indirectly, to the public of the securities offered by this prospectus is subject to restrictions on transferability and must be affected only in compliance with the Israeli securities laws and regulations.

***Italy***

The offering of the securities in the Republic of Italy has not been authorized by the Italian Securities and Exchange Commission (Commissione Nazionale per le Società e la Borsa, or "CONSOB") pursuant to the Italian securities legislation and, accordingly, no offering material relating to the securities may be distributed in Italy and such securities may not be offered or sold in Italy in a public offer within the meaning of Article 1.1(t) of Legislative Decree No. 58 of 24 February 1998 ("Decree No. 58"), other than:

● to Italian qualified investors, as defined in Article 100 of Decree no.58 by reference to Article 34-ter of CONSOB Regulation no. 11971 of 14 May 1999 ("Regulation no. 1197l") as amended ("Qualified Investors"); and

● in other circumstances that are exempt from the rules on public offer pursuant to Article 100 of Decree No. 58 and Article 34-ter of Regulation No. 11971 as amended.

● Any offer, sale or delivery of the securities or distribution of any offer document relating to the securities in Italy (excluding placements where a Qualified Investor solicits an offer from the issuer) under the paragraphs above must be:

● made by investment firms, banks or financial intermediaries permitted to conduct such activities in Italy in accordance with Legislative Decree No. 385 of 1 September 1993 (as amended), Decree No. 58, CONSOB Regulation No. 16190 of 29 October 2007 and any other applicable laws; and

● in compliance with all relevant Italian securities, tax and exchange controls and any other applicable laws.

Any subsequent distribution of the securities in Italy must be made in compliance with the public offer and prospectus requirement rules provided under Decree No. 58 and the Regulation No. 11971 as amended unless an exception from those rules applies. Failure to comply with such rules may result in the sale of such securities being declared null and void and in the liability of the entity transferring the securities for any damage suffered by the investors.

***Japan***

The securities have not been and will not be registered under Article 4, paragraph 1 of the Financial Instruments and Exchange Law of Japan (Law No. 25 of 1948), as amended (the "FIEL") pursuant to an exemption from the registration requirements applicable to a private placement of securities to Qualified Institutional Investors (as defined in and in accordance with Article 2, paragraph 3 of the FIEL and the regulations promulgated thereunder). Accordingly, the securities may not be offered or sold, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan other than Qualified Institutional Investors. Any Qualified Institutional Investor who acquires securities may not resell them to any person in Japan that is not a Qualified Institutional Investor, and acquisition by any such person of securities is conditional upon the execution of an agreement to that effect.

***Portugal***

This document is not being distributed in the context of a public offer of financial securities (oferta pública de valores mobiliários) in Portugal, within the meaning of Article 109 of the Portuguese Securities Code (Código dos Valores Mobiliários). The securities have not been offered or sold and will not be offered or sold, directly or indirectly, to the public in Portugal. This document and any other offering material relating to the securities have not been, and will not be, submitted to the Portuguese Securities Market Commission (Comissăo do Mercado de Valores Mobiliários) for approval in Portugal and, accordingly, may not be distributed or caused to distributed, directly or indirectly, to the public in Portugal, other than under circumstances that are deemed not to qualify as a public offer under the Portuguese Securities Code. Such offers, sales and distributions of securities in Portugal are limited to persons who are "qualified investors" (as defined in the Portuguese Securities Code). Only such investors may receive this document and they may not distribute it, or the information contained in it to any other person.

***Sweden***

This document has not been, and will not be, registered with or approved by Finansinspektionen (the Swedish Financial Supervisory Authority). Accordingly, this document may not be made available, nor may the securities be offered for sale in Sweden, other than under circumstances that are deemed not to require a prospectus under the Swedish Financial Instruments Trading Act (1991:980) (Sw. lag (1991:980) om handel med finansiella instrument). Any offering of securities in Sweden is limited to persons who are "qualified investors" (as defined in the Financial Instruments Trading Act). Only such investors may receive this document and they may not distribute it or the information contained in it to any other person.

***Switzerland***

The securities may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange ("SIX") or on any other stock exchange or regulated trading facility in Switzerland. This document has been prepared without regard to the disclosure standards for issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure standards for listing prospectuses under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland. Neither this document nor any other offering material relating to the securities may be publicly distributed or otherwise made publicly available in Switzerland.

Neither this document nor any other offering material relating to the securities have been or will be filed with or approved by any Swiss regulatory authority. In particular, this document will not be filed with, and the offer of securities will not be supervised by, the Swiss Financial Market Supervisory Authority (FINMA).

This document is personal to the recipient only and not for general circulation in Switzerland.

**United Kingdom**

Neither the information in this document nor any other document relating to the offer has been delivered for approval to the Financial Services Authority in the United Kingdom and no prospectus (within the meaning of section 85 of the Financial Services and Markets Act 2000, as amended ("FSMA") has been published or is intended to be published in respect of the securities. This document is issued on a confidential basis to "qualified investors" (within the meaning of section 86(7) of FSMA) in the United Kingdom, and the securities may not be offered or sold in the United Kingdom by means of this document, any accompanying letter or any other document, except in circumstances which do not require the publication of a prospectus pursuant to section 86(1) FSMA. This document should not be distributed, published or reproduced, in whole or in part, nor may its contents be disclosed by recipients to any other person in the United Kingdom.

Any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) received in connection with the issue or sale of the securities has only been communicated or caused to be communicated and will only be communicated or caused to be communicated in the United Kingdom in circumstances in which section 21(1) of FSMA does not apply to the Company.

In the United Kingdom, this document is being distributed only to, and is directed at, persons (i) who have professional experience in matters relating to investments falling within Article 19(5) (investment professionals) of the Financial Services and Markets Act 2000 (Financial Promotions) Order 2005 ("FPO"), (ii) who fall within the categories of persons referred to in Article 49(2)(a) to (d) (high net worth companies, unincorporated associations, etc.) of the FPO or (iii) to whom it may otherwise be lawfully communicated (together "relevant persons"). The investments to which this document relates are available only to, and any invitation, offer or agreement to purchase will be engaged in only with, relevant people. Any person who is not a relevant person should not act or rely on this document or any of its contents.

**LEGAL MATTERS**

The validity of the securities covered by the registration statement of which this prospectus is a part has been passed upon for us by Law Office of T. J. Jesky, 205 N. Michigan Ave., Suite 810, Chicago, IL 60601-5902. The underwriters have been represented in connection with this offering by ArentFox Schiff LLP, Washington, DC.

**EXPERTS**

The financial statements of AMATUHI HOLDINGS, Inc. for the years ended March 31, 2025, and 2024, included in this prospectus and elsewhere in the registration statement have been so included in reliance upon the report of Assentsure PAC, independent registered public accountants, upon the authority of said firm as experts in accounting and auditing.

**WHERE YOU CAN FIND MORE INFORMATION**

We have filed with the SEC a registration statement on Form S-1/A under the Securities Act with respect to the shares of Common Stock offered hereby. This prospectus, which constitutes a part of the registration statement, does not contain all of the information set forth in the registration statement or the exhibits and schedules filed therewith. For further information about us and the shares of Common Stock offered hereby, we refer you to the registration statement and the exhibits and schedules filed thereto. Statements contained in this prospectus regarding the contents of any contract or any other document that is filed as an exhibit to the registration statement are not necessarily complete, and each such statement is qualified in all respects by reference to the full text of such contract or other document filed as an exhibit to the registration statement. Upon completion of this offering, we will be required to file periodic reports, proxy statements, and other information with the SEC pursuant to the Exchange Act. You may obtain information on the operation of the public reference rooms by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet website that contains reports, proxy statements and other information about registrants, like us, that file electronically with the SEC. The address of that site is *www.sec.gov*.

**AMATUHI HOLDINGS, INC.**

**INDEX TO FINANCIAL STATEMENTS**

**AMATUHI HOLDINGS, INC. AND SUBSIDIARIES**

**INDEX TO CONSOLIDATED FINANCIAL STATEMENTS**

---

| | |
|:---|:---|
|  | **Page** |
| **Unaudited Financial Statements as of and for the Six Months Ended September 30, 2025 and 2024** |  |
| [Consolidated Balance Sheets as of September 30, 2025 and March 31, 2025](#sj_001) | F-2 |
| [Consolidated Statements of Operations for the Six Months Ended September 30, 2025 and 2024 (unaudited)](#sj_002) | F-3 |
| [Consolidated Statements of Comprehensive Income for the Six Months Ended September 30, 2025 and 2024 (unaudited)](#sj_003) | F-4 |
| [Consolidated Statements of Shareholders' Equity for the Six Months Ended September 30, 2025 and 2024 (unaudited)](#sj_004) | F-5 |
| [Consolidated Statements of Cash Flows for the Six Months Ended September 30, 2025 and 2024 (unaudited)](#sj_005) | F-6 |
| [Notes to Consolidated Financial Statements for the Six Months Ended September 30, 2025 and 2024](#sj_006) | F-7 |
| **Audited Financial Statements as of and for the Fiscal Years Ended March 31, 2025 and 2024** |  |
| **[Report of Independent Registered Public Accounting Firm](#ak_007) (PCAOB #6783)** | **F-25** |
| **[Consolidated Balance Sheets as of March 31, 2025 and 2024](#ak_001)** | **F-26** |
| **[Consolidated Statements of Operations for the Fiscal Years Ended March 31, 2025 and 2024](#ak_002)** | **F-27** |
| **[Consolidated Statements of Comprehensive Income for the Fiscal Years Ended March 31, 2025 and 2024](#ak_003)** | **F-** **28** |
| **[Consolidated Statements of Shareholders' Equity for the Fiscal Years Ended March 31, 2025 and 2024](#ak_004)** | **F-29** |
| **[Consolidated Statements of Cash Flows for the Fiscal Years Ended March 31, 2025 and 2024](#ak_005)** | **F-30** |
| **[Notes to Consolidated Financial Statements for the Fiscal Years Ended March 31, 2025 and 2024](#ak_006)** | **F-31** |

---

**AMATUHI HOLDINGS, INC. AND SUBSIDIARIES**

**CONSOLIDATED BALANCE SHEETS**

**(in thousands, except share and per share data)**

---

| | | |
|:---|:---|:---|
|  | **September 30,** | **March 31,** |
|  | **2025** | **2025** |
|  | **(unaudited)** | **(audited)** |
| **ASSETS** |  |  |
| Current Assets: |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $14858 | $13373 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net | 3897 | 2315 |
| &nbsp;&nbsp;&nbsp;Contract assets | 2295 |  |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 7058 | 1638 |
| &nbsp;&nbsp;&nbsp;Total Current Assets | 28108 | 17326 |
| Non-current Assets: |  |  |
| &nbsp;&nbsp;&nbsp;Property and equipment, net | 63143 | 38955 |
| &nbsp;&nbsp;&nbsp;Operating lease right-of-use assets, net | 3037 | 2483 |
| &nbsp;&nbsp;&nbsp;Intangible assets, net | 893 | 726 |
| &nbsp;&nbsp;&nbsp;Goodwill | 193 | 190 |
| &nbsp;&nbsp;&nbsp;Investment - debt securities | 5407 |  |
| &nbsp;&nbsp;&nbsp;Deferred tax assets | 270 | 266 |
| &nbsp;&nbsp;&nbsp;Investment in unconsolidated entity | 1876 |  |
| &nbsp;&nbsp;&nbsp;Other assets | 2761 | 1937 |
| &nbsp;&nbsp;&nbsp;Total Assets | $105688 | $61883 |
| **LIABILITIES AND STOCKHOLDERS' EQUITY** |  |  |
| Current Liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | $10093 | $5542 |
| &nbsp;&nbsp;&nbsp;Payable due to related party | 54 | 76 |
| &nbsp;&nbsp;&nbsp;Income tax payable | 1574 | 1175 |
| &nbsp;&nbsp;&nbsp;Contract liabilities | 17057 | 6761 |
| &nbsp;&nbsp;&nbsp;Current portion of operating lease liabilities | 1783 | 1062 |
| &nbsp;&nbsp;&nbsp;Current portion of financing lease liabilities | 940 | 740 |
| &nbsp;&nbsp;&nbsp;Current portion of long-term debt | 1052 | 632 |
| &nbsp;&nbsp;&nbsp;Other current liabilities | 548 | 1019 |
| &nbsp;&nbsp;&nbsp;Total Current Liabilities | 33101 | 17007 |
| Non-current Liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Non-current operating lease liabilities | 1289 | 1477 |
| &nbsp;&nbsp;&nbsp;Non-current financing lease liabilities | 30269 | 25044 |
| &nbsp;&nbsp;&nbsp;Non-current portion of long-term debt | 34756 | 15105 |
| &nbsp;&nbsp;&nbsp;Other liabilities | 72 | 82 |
| &nbsp;&nbsp;&nbsp;Total Liabilities | 99487 | 58715 |
| Commitment and Contingencies (Note 9) |  |  |
| Stockholders' Equity: |  |  |
| Preferred stock, $0.000001 par value – 20,000,000 shares authorized as of September 30, 2025 and March 31, 2025; No shares issued and outstanding as of September 30, 2025 and March 31, 2025 Common stock, $0.000001 par value – 380,000,000 shares authorized as of September 30, 2025 and March 31, 2025; 20,500,000 shares issued and outstanding as of September 30, 2025 and March 31, 2025\* |  |  |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 337 | 337 |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss | (18) | (20) |
| &nbsp;&nbsp;&nbsp;Retained earnings | 5882 | 2851 |
| &nbsp;&nbsp;&nbsp;Total Stockholders' Equity | 6201 | 3168 |
| &nbsp;&nbsp;&nbsp;Total Liabilities and Stockholders' Equity | $105688 | $61883 |

---

The accompanying notes are an integral part of the financial statements.

\*The number of shares issued and outstanding presented above is adjusted retrospectively to reflect the 1 for 5,000 sub-division effected on August 6, 2025.

**AMATUHI HOLDINGS, INC. AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF OPERATIONS**

**(in thousands, except share and per share data)**

**(unaudited)**

---

| | | |
|:---|:---|:---|
|  | **Six months Ended September 30,** | **Six months Ended September 30,** |
|  | **2025** | **2024** |
| Revenue | $46926 | $12631 |
| Revenue - related party | 40 |  |
| Cost of revenue | (34227) | (8524) |
| Gross profit | 12739 | 4107 |
| Operating expenses: |  |  |
| &nbsp;&nbsp;&nbsp;Selling, General and Administrative Expenses | (6758) | (3034) |
| &nbsp;&nbsp;&nbsp;Selling, General and Administrative Expenses - related party | (355) | (105) |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization expenses | (60) | (25) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | (7173) | (3164) |
| Profit from operations | 5566 | 943 |
| Other expenses, net | (144) | (118) |
| Interest expenses | (796) | (208) |
| Profit before income taxes | 4626 | 617 |
| Income tax expenses | (1595) | (210) |
| Net income | $3031 | $407 |
| Net income per share attributable to common stockholders, basic and diluted | $0.15 | $0.03 |
| Weighted-average number of common stocks outstanding used to compute net income per share, basic and diluted\* | 20500000 | 20500000 |

---

The accompanying notes are an integral part of the consolidated financial statements.

\* Giving retroactive effect to the 1 for 5,000 sub-division effected on August 6, 2025.

**AMATUHI HOLDINGS, INC. AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME**

**(in thousands, except share and per share data)**

**(unaudited)**

---

| | | |
|:---|:---|:---|
|  | **Six month Ended September 30,** | **Six month Ended September 30,** |
|  | **2025** | **2024** |
| Net income | $3031 | $407 |
| Other comprehensive income: |  |  |
| &nbsp;&nbsp;&nbsp;Currency translation adjustments | 2 | 67 |
| Total other comprehensive income | 2 | 67 |
| Comprehensive income | $3033 | $474 |

---

**AMATUHI HOLDINGS, INC. AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY**

**(in thousands, except share data)**

**(unaudited)**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Stock Class** | **Stock Class** | | | | |
|  | **Common Stocks** | **Common Stocks** | | | | |
|  | **Shares** | **Amount** | **Additional**<br>**Paid-In**<br>**Capital** |<br>**Retained**<br>**Earnings** | **Accumulated other**<br>**comprehensive**<br>**(loss)/income** | **Total**<br>**Stockholders'**<br>**Equity** |
| **Balance, March 31, 2024** | 20500000 | $— | $337 | $464 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(69) | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;732 |
| &nbsp;&nbsp;&nbsp;Other comprehensive income, net of tax |  |  |  |  | 67 | 67 |
| &nbsp;&nbsp;&nbsp;Net income |  |  |  | 407 |  | 407 |
| **Balance, September 30, 2024** | 20500000 | $— | $337 | $871 | $(2) | $1206 |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Stock Class** | **Stock Class** | | | | |
|  | **Common Stocks** | **Common Stocks** | | | | |
|  | **Shares** | **Amount** | **Additional**<br> **Paid-In**<br>**Capital** |<br>**Retained**<br>**Earnings** | **Accumulated other**<br>**comprehensive**<br>**loss** | **Total**<br>**Stockholders'**<br>**Equity** |
| **Balance, March 31, 2025** | 20500000 | $— | $337 | $2851 | $(20) | $&nbsp;&nbsp;&nbsp;&nbsp;3168 |
| &nbsp;&nbsp;&nbsp;Other comprehensive income, net of tax |  |  |  |  | 2 | 2 |
| &nbsp;&nbsp;&nbsp;Net income |  |  |  | 3031 |  | 3031 |
| **Balance, September 30, 2025** | 20500000 | $— | $337 | $5882 | $(18) | $6201 |

---

The accompanying notes are an integral part of the consolidated financial statements.

The number of shares issued and outstanding presented above is adjusted retrospectively to reflect the 1 for 5,000 sub-division effected on August 6, 2025.

**AMATUHI HOLDINGS, INC. AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(in thousands)**

**(unaudited)**

---

| | | |
|:---|:---|:---|
|  | **(in thousands)** | **(in thousands)** |
|  | **Six months Ended September 30,** | **Six months Ended September 30,** |
|  | **2025** | **2024** |
| **Cash flows from operating activities:** |  |  |
| Net income | $3031 | $407 |
| Adjustments to reconcile net income to net cash provided by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 1176 | 435 |
| &nbsp;&nbsp;&nbsp;Noncash lease expenses | 451 | 218 |
| &nbsp;&nbsp;&nbsp;Amortization of debt issuance costs | 2 |  |
| &nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | (1572) | 170 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contract assets | (2325) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | (5469) | (2554) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other assets | (809) | (377) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | 4278 | 1309 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payable due to related party | (24) | (14) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income tax payable | 389 | (88) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contract liabilities | 10340 | 3141 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other liabilities | (505) | 1052 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating lease liabilities | (472) | (174) |
| Net cash provided by operating activities | 8491 | 3525 |
| **Cash flows from investing activities:** |  |  |
| Purchase of property and equipment | (19445) | (13891) |
| Purchase of intangible assets | (161) | (252) |
| Payment received from short-term receivable |  | 2321 |
| Acquisition of uncontrolled entity | (1843) |  |
| Payment for investments in debt securities | (28342) |  |
| Payment received from investment in debt securities | 22865 | - |
| Net cash used in investing activities | (26926) | (11822) |
| **Cash flows from financing activities** |  |  |
| Repayments of long-term debt | (415) | (169) |
| Proceeds from long-term debt | 20537 | 14948 |
| Repayments of financing lease liabilities | (305) | (122) |
| Net cash provided by financing activities | 19817 | 14657 |
| Effect of exchange rate change on cash and cash equivalents | 103 | 528 |
| Net change in cash and cash equivalents | 1485 | 6888 |
| Cash and cash equivalents at beginning of period | 13373 | 2044 |
| Cash and cash equivalents at end of period | $14858 | $8932 |
| **Supplemental disclosures of cash flow information:** |  |  |
| &nbsp;&nbsp;&nbsp;Cash paid for interest | $427 | $76 |
| &nbsp;&nbsp;&nbsp;Cash paid for income taxes | $1205 | $298 |
| **Non-cash investing and financing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;Purchase of property and equipment included in accrued expenses | $255 | $84 |

---

The accompanying notes are an integral part of the consolidated financial statements.

**AMATUHI HOLDINGS, INC. AND ITS SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(in thousands, except share and per share data)**

**1. Organization, Nature of Business**

AMATUHI Holdings, Inc. (the "Company") was incorporated on June 24, 2025 in Delaware to act as the holding company of AMATUHI, Co., Ltd., ("AMATUHI Japan"), which was incorporated in Japan on February 22, 2021 and is an operating entity. AMATUHI Japan primarily designs and construct care homes called "group homes" for people with disabilities and seniors. The Company also operates groups homes and provides wide ranges of support services.

At incorporation, the Company issued five shares of common stock with the par value of $0.000001. On July 22, 2025, as part of its reorganization, the Company entered into a Reorganization Agreement and Plan of Share Exchange with AMATUHI Japan and its shareholders and acquired 4,100 shares of AMATUHI Japan's ordinary shares from its shareholders in exchange for the Company's 4,100 shares of common stock. The Company filed a Certificate of Ownership and Merger, with the Delaware Secretary of State, pursuant to Section 253 of the Delaware General Corporation Law, to effectuate the reorganization. After the share exchange, AMATUHI Japan became a wholly owned subsidiary of the Company.

The reorganization involves entities under common control. Under the guidance in ASC 805-50, for transactions between entities under common control, the assets, liabilities, and results of operations are recognized at their carrying amounts on the date of the restructuring, which required retrospective combination of the Company and AMATUHI Japan. The Company's unaudited consolidated financial statements have been prepared as if the existing corporate structure had been in existence throughout all periods presented rather than from the incorporation. This includes a retrospective presentation for all equity related disclosures, which were under common control throughout the relevant periods as a single economic enterprise although legal parent-subsidiary relationship were not established.

On July 31, 2025, the Company acquired a 100% interest in a privately held non-profit medical corporation operating nursing homes in Japan. The Company does not control the entity and does not consolidate its financial results. The investment provides the Company with an interest in the healthcare/nursing home sector in Japan.

**2. Summary of Significant Accounting Policies**

***Basis of Presentation***

 

The accompanying unaudited consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). The unaudited interim consolidated financial statements are condensed and should be read in conjunction with the Company's latest annual financial statements. The interim disclosures generally do not repeat those in the annual statements.

The unaudited consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the Company's financial position, results of operations, shareholders' equity, and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be expected for the full year ending March 31, 2026 or any other future interim periods.

As an emerging growth company, the Jumpstart Our Business Startups Act allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The Company has elected to delay adoption of certain new or revised accounting standards. As a result, the Company's unaudited financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective date for new or revised accounting standards that are applicable to public companies.

On August 6, 2025, the Company's Board of Directors approved a sub-division of the Company's issued and outstanding shares at a ratio of 1:5,000, which became effective on August 6, 2025. As a result of the sub-division, the number of shares issued and outstanding became 20,500,000 shares. The Company believes it is appropriate to reflect the above transactions on a retroactive basis in accordance with ASC 260. All references made to share or per share amounts herein have been retroactively adjusted to reflect the 1:5,000 sub-division.

***Going concern and liquidity***

The Company has evaluated whether there are certain conditions and events, considered in aggregate, that raise substantial doubt about the Company's ability to continue as a going concern within one year after the issuance of the unaudited consolidated financial statements.

As of September 30, 2025, the Company reported a net current liability position of $4,993, which includes contract liabilities of $17,057. These contract liabilities reflect advance payments received from customers for goods and services to be delivered in the future, and the Company will recognize this revenue over time as it satisfies its performance obligations.

Despite the current net liability position, the Company generated a net income of $3,031 and net cash operating inflows of $8,491 for the six-month period ended September 30, 2025, and held cash and cash equivalents of $14,858 as of the reporting date. These positive financial metrics, along with the contract liabilities already paid by customers, provide the Company with sufficient liquidity to meet both operating and capital requirements, including the fulfilment of its contract obligations.

Management believes that the Company has the resources and operational capacity to continue fulfilling its obligations related to the contract liabilities and other financial commitments. As such, management has determined that there is no substantial doubt regarding the Company's ability to continue as a going concern within the next year.

***Basis of Consolidation***

 

The unaudited consolidated financial statements include the accounts of the Company and all of its wholly owned subsidiaries: AMATUHI, Co., Ltd., and Life Shine Co., Ltd. Life Shine Co. Ltd. is a privately held company operating senior nursing homes. Intercompany balances and transactions have been eliminated in consolidation.

***Foreign Currency Translation***

 

The Company's functional currency is generally Japanese Yen. Results of operations are translated to U.S. dollars using the average exchange rates during the period. Assets and liabilities are translated using the exchange rates in effect as of the date of the balance sheet. Resulting translation adjustments are recorded as a foreign currency translation adjustment into other accumulated comprehensive income/(loss) in the consolidated statement of stockholders' equity.

 ****

***Related Party Transactions***

 

The Company conducts transactions with certain related parties in the ordinary course of business. Related parties include entities owned by the Company's directors. These transactions are conducted on terms equivalent to those that prevail in arm's-length transactions and are subject to oversight by the Company's board of directors, as applicable.

 ****

***Use of Estimates***

 

The preparation of the unaudited consolidated financial statements in conformity with the U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the reporting date, and the reported amounts of revenue and expense during the reporting period. These estimates are based on management's best knowledge of current events and actions that the Company may undertake in the future and include, but are not limited to, revenue recognition, fair values and useful lives of assets acquired and liabilities assumed through business combinations, allowance for credit losses, useful lives of property and equipment and intangible assets, the carrying value of operating lease right-of-use assets and liabilities, impairment of long-lived assets, and valuation allowance against net deferred tax assets. Actual results could differ from those estimates.

***Revenue Recognition***

 

The Company applies ASC Topic 606, *Revenue from Contracts with Customers* ("ASC 606") for all periods presented in the unaudited consolidated financial statements. To determine the appropriate amount of revenue to be recognized in accordance with ASC 606, the Company follows a five-step model as follows:

1 – Identification of the contract with a customer

2 – Identification of the performance obligation in the contract

3 – Determination of the transaction price

4 – Allocation of the transaction price to the performance obligation in the contract

5 – Recognition of revenue when, or as, a performance obligation is satisfied

The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring promised goods or services to a customer. The transaction price is generally fixed. None of the Company's contracts contain a significant financing component. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to government entities.

*<u>Construction real estate sales</u>*

1) Constructing group homes

The Company recognizes revenue from constructing group homes over time as performance obligations are satisfied. These contracts are entered into with third-party customers. All revenues generated from construction and home sale activities are derived from unrelated, third-party customers.

Revenue is generally recognized using an input method based on the ratio of costs incurred to total estimated costs, which the Company believes best reflects its progress toward satisfying the performance obligation.

The average time to complete the construction of a group home typically ranges from six to seven months, depending on project scope, site conditions, and permitting processes. All homes sold to customers are constructed under the Company's direction and control, using third-party subcontractors for portions or all the construction work. The Company is responsible for managing the construction process, including project oversight, design specifications, permitting, and compliance. The Company does not purchase completed group homes from third-party builders for resale.

The Company does not classify group homes under construction or completed group homes awaiting sale as inventory. Instead, all costs incurred on construction contracts are billed to customers as construction progresses. When amounts billed exceed costs incurred, the excess is recorded as contract liabilities, representing cash received in advance for services not yet completed. No inventory is recorded on the balance sheet, as the Company does not own or hold group homes it constructs for resale.

When either party to a contract has performed, the Company presents the contract as a contract asset or contract liability, depending on the relationship between the Company's performance and the customer's payment. A contract asset represents the Company's right to consideration for services transferred to the customer. A contract liability represents the Company's obligation to transfer services for which it has already received payment or for which payment is due.

Recognition of revenue and profit is dependent upon a number of factors, including the accuracy of a variety of estimates made at the balance sheet date, such as engineering progress, material quantities, the achievement of milestones, penalty provisions, labor productivity and cost estimates. Variable consideration is included in the estimate of the transaction price only to the extent that a significant reversal would not be probable. Management continuously monitors factors that may affect the quality of its estimates, and material changes in estimates are disclosed accordingly.

The Company currently leases all the group homes it operates. All such leases are entered into with unrelated third-party lessors. The Company does not lease properties from related parties or affiliates.

2) Sales of real estate properties

Revenue from sales of real estate properties is generated from sales to third-party customers. Revenue is recognized at a point in time (i.e., at the time of closing of a sale) when title to and possession of the property are transferred to the buyer.

The Company engages subcontractors for constructing group homes. The Company assesses whether it is acting as a principal or an agent in these arrangements in accordance with ASC 606, *Revenue from Contracts with Customers*. Based on this assessment, the Company recognizes revenue on a gross basis (as principal) rather than on a net basis (as agent). The Company has concluded that gross reporting is appropriate because the Company (i) is responsible for identifying and hiring qualified vendors, (ii) has the discretion to select the vendors and establish their price and duties, and (iii) bears the risk for services that are not fully paid for by its customers.

All sales of real estate properties are made to third-party customers, and the Company does not engage in sales to related parties or internal entities.

*<u>Welfare services revenue</u>*

Revenue from welfare services is generated from operating group homes and providing support services to residents. Rental agreement with tenants are accounted for as operating leases. Minimum lease payment (rent) are recognized on a straight-line basis over the term of the respective lease, beginning when the tenant takes possession of, or are granted control over, the physical use of the space. Any excess of straight-line rents recognized over amounts contractually billed is recorded as deferred rents receivable, if any. Revenue from ancillary services, such as food, beverage and personal support services, is recognized over time as the services are provided, in accordance with ASC 606.

The Company also receives government subsidies to support its welfare services. Revenue related to these subsidies is recognized when the related performance obligations are satisfied, and collection is reasonably assured, consistent with ASC 606.

***Segment Information***

 

ASC 280, Segment Reporting, establishes standards for companies to report in their financial statement information about operating segments, on a basis consistent with the Company's internal organizational structure as well as information about geographical areas, business segments and major customers in financial statements for details on the Company's business segments.

<br> The Company operates and manages its business as one operating and reportable segment, focused on the development, operation, and management of group homes and the provision of welfare-related services. The Company's Chief Executive Officer ("CEO") is considered the Chief Operating Decision Maker ("CODM"). The CODM evaluates the Company's financial performance and allocates resources on a consolidated basis. As such, the Company has determined that it has one operating and reportable segment in accordance with ASC Topic 280, *Segment Reporting*. All of the Company's revenue is currently generated from customers located in Japan, and all of its long-lived assets are also located in Japan.

Revenue is derived primarily from two sources:

1. Construction
 of group homes and sales of real estate properties

2. Welfare
 services provided to residents of the Company's group homes

The Company will disclose customer concentration information if any individual customer accounts for 10% or more of consolidated revenue in any reporting period.

***Concentration of Customers and Vendors***

The balance sheet items that potentially subject the Company to concentrations of credit risk are primarily cash and accounts receivable. The Company monitors and manages the overall exposure of its cash balances to individual financial institutions on an ongoing basis. The Company continuously evaluates the credit worthiness of its customers' financial condition and generally does not require collateral. The Company incurred no losses from such accounts and management considers the risk of loss to be minimal.

For the six months ended September 30, 2025 and 2024, there was one customer who accounted for more than 10% of the Company's total revenue in both periods. As of September 30, 2025 and March 31, 2025, there was one customer who accounted for more than 10% of the Company's total accounts receivable in both periods.

For the six months ended September 30, 2025 and 2024, there was no supplier and there was one supplier, respectively, who accounted for more than 10% of the Company's total purchase in the respective periods. As of September 30, 2025 and March 31, 2025, there were three and four suppliers, respectively, who accounted for more than 10% of the Company's total accounts payable the respective periods.

***Business Combination***

 

Business combination is accounted for under the acquisition method of accounting. This method requires, among other things, allocation of the fair value of purchase consideration to the tangible and intangible assets acquired and liabilities assumed at their estimated fair values on the acquisition date. The excess of the fair value of purchase consideration over the values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair value of assets acquired and liabilities assumed, management makes estimates and assumptions, especially with respect to intangible assets. Management's estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, not to exceed one year from the date of acquisition, the Company may record adjustments to the assets acquired and liabilities assumed, with a corresponding offset to goodwill if new information is obtained related to facts and circumstances that existed as of the acquisition date. After the measurement period, any subsequent adjustments are reflected in the unaudited consolidated statements of operations. Acquisition costs, consisting primarily of third-party legal and consulting fees, are expensed as incurred.

***Cash and Cash Equivalents***

 

The Company considers all highly liquid short-term investments purchased with an initial maturity date of three months or less to be cash equivalents.

 ****

***Accounts Receivable, Net***

 

Accounts receivable primarily consist of the amounts billed and currently due from customers, net of an allowance for credit losses, if recorded. When the Company has an unconditional right to payment, subject only to the passage of time, the right is treated as receivable. The Company's accounts receivable balances are unsecured, bearing no interest. Fees billed in advance of the related contractual term represent contract liabilities.

Accounts receivable are subject to collection risk. The Company performs evaluations of its customers' financial positions and generally extends credit on account, without collateral.

At each balance sheet date, the Company recognizes an expected allowance for credit losses. In addition, also at each reporting date, this estimate is updated to reflect any changes in credit risk since the receivable was initially recorded. This estimate is calculated on a pooled basis where similar risk characteristics exist.

The allowance estimate is derived from a review of the Company's historical losses on the aging of receivables. This estimate is adjusted for management's assessment of current conditions, reasonable and supportable forecasts regarding future events, and any other factors deemed relevant by the Company. The Company believes historical loss information is a reasonable starting point in which to calculate the expected allowance for credit losses as the Company's customers' composition have remained constant. The Company did not record an allowance for credit loss as of September 30, 2025 and March 31, 2025.

The Company writes off receivables when there is information that indicates the debtor is facing significant financial difficulty and there is no possibility of recovery. If any recoveries are made from any accounts previously written off, they will be recognized in income or an offset to credit loss expense in the year of recovery. The Company did not have any write-offs of receivable during the six months ended September 30, 2025 and the fiscal year ended March 31, 2025.

 ****

 ****

***Other Current Assets***

 

Other current assets consist of amounts expected to be realized or consumed within one year. These may include deferred costs, advance payment, deferred offering costs and short-term investments.

***Short-term Investments***

 

The Company's short-term investments include time deposits with financial institutions having original maturities greater than three months and less than one year. These investments are held to maturity and are stated amortized cost, which approximates fair value. As of September 30, 2025 and March 31, 2025, the Company held $2,068 and $374, respectively.

 **

***Deferred Offering Costs***

 **

Deferred offering costs include specific incremental costs directly attributable to the Company's initial public. Offering of securities. Deferred offering costs exclude management salaries or other general and administrative expenses. These costs are being deferred and will be charged against the gross proceeds of the offering.

 ****

***Property and Equipment, Net***

 

Property and equipment are recorded at the cost less accumulated depreciation. Depreciation is computed using the straight-line method. The estimated useful lives of assets are as follows:

---

| | |
|:---|:---|
| **Property and Equipment** | **Estimated Useful Life** |
| Buildings | 15 - 22 years |
| Building fixtures | 8 - 15 years |
| Vehicles | 1 - 3 years |
| Tools and Equipment | 3 years |
| Computers | 3 - 4 years |
| Leased asset | 5 years |
| Leasehold improvement | Shorter of 20 years or lease term |
| Land | Indefinite |

---

Repair and maintenance costs are expensed as incurred.

 ****

***Intangible Assets, Net***

 

Intangible assets primarily consist of capitalized software. The Company accounts for its software development costs in accordance with the guidance in ASC 350-40, *Internal-use software*. The costs incurred prior to the application development stage and post implementation are expensed as incurred. Direct and incremental internal and external costs incurred during the application development stage are capitalized until the application is substantially complete and ready for its intended use, at which point amortization begins. Training, data conversion and maintenance costs are expensed as incurred. Costs of capitalized software are amortized on a straight-line basis over the estimated period of benefit, which is approximately one to five years.

 ****

***Impairment or Disposal of Long-Lived Assets***

 

Long-lived assets used in operations are reviewed for impairment whenever events or changes in circumstances indicate that carrying amounts may not be recoverable. For long-lived assets to be held and used, the Company recognizes an impairment loss only if the carrying amount is not recoverable when compared to the Company's undiscounted cash flows, and the impairment loss is measured based on the difference between the carrying amount and fair value. Long-lived assets held for sales are reported at the lower of cost or fair value less costs to sell.

***Goodwill***

Goodwill represents the excess of the cost of an acquired business over the fair value of the assets acquired at the date of acquisition. Goodwill is not subject to amortization but is subject to impairment testing on an annual basis, or whenever events and circumstances indicate that the carrying value of the reporting unit may be in excess of the reporting unit's fair value. The Company has one reporting unit and tests goodwill for impairment at the reporting unit level. As part of the goodwill impairment test, the Company first performs a qualitative assessment to determine whether further impairment testing is necessary. If, as a result of its qualitative assessment, it is more-likely-than-not that the fair value of the Company's reporting unit is less than its carrying amount, a two-step impairment test is required.

If factors indicate that the fair value of the reporting unit is less than its carrying amount, the Company performs a quantitative assessment, and the fair value of the reporting unit is determined by analyzing the expected present value of future cash flows. If the carrying value of the reporting unit continues to exceed its fair value, the implied fair value of the reporting unit's goodwill is calculated and an impairment loss equal to the excess is recorded. The Company has not recorded any impairments related to goodwill as of September 30, 2025 and March 31, 2025.

***Leases***

 

In accordance with FASB ASC Topic 842, *Leases*, the Company determines if an arrangement is a lease at inception based on whether there is an identified asset and whether the Company controls the use of the identified asset throughout the period of use. The Company classifies leases as either financing or operating. The classification criteria is based on estimates regarding the fair value of the leased asset, minimum lease payments, effective cost of funds, economic life of the asset, and certain other terms in the lease agreements.

*Operating leases*

Operating leases are included in operating lease right-of-use (ROU) assets, current portion of operating lease liabilities, and non-current operating lease liabilities in the unaudited consolidated balance sheets. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date.

For leases with terms greater than 12 months, the Company records a ROU asset and a lease liability representing the present value of future lease payments. The discount rate used to measure the lease asset and liability is determined at the beginning of the lease term using the rate implicit in the lease, or the Company's collateralized incremental borrowing rate. The implicit rate within the Company's leases is generally not determinable and, therefore, the incremental borrowing rate at lease commencement is utilized to determine the present value of lease payments. The Company estimates its incremental borrowing rate based on third-party lender quotes to obtain secured debt in a like currency for a similar asset over a timeframe similar to the term of the lease. For those contracts that include fixed rental payments for both the use of the asset ("lease costs") as well as for other occupancy or service costs relating to the asset ("non-lease costs"), the Company generally includes both the lease costs and non-lease costs in the measurement of the lease asset and liability.

The Company accounts for each lease and any non-lease components associated with that lease as a single lease component for all asset classes. Lease expenses for the Company's operating leases are recognized on a straight-line basis over the lease term except for variable lease costs, which are expensed as incurred. The Company does not recognize ROU assets and operating lease liabilities that arise from leases with an initial lease term of 12 months or less.

*Finance leases*

Finance lease right-of-use assets are recognized within property and equipment, net on the Company's unaudited consolidated balance sheets. The Company recognizes interest expense on the finance lease liabilities utilizing the effective interest method. The right-of-use asset is generally amortized to depreciation and amortization expense on a straight-line basis over the lease term unless the lease contains an option to purchase the underlying asset that the Company is reasonably certain to exercise. If the Company is reasonably certain to exercise the purchase option, the asset is amortized over the useful life.

As of September 30, 2025 and March 31, 2025, the Company's finance lease liability is entirely related to leases with third-party lessors for group homes. These leases are classified as finance leases under ASC 842, meeting the criteria for such classification, including transfer of ownership at the end of the lease term or the presence of a bargain purchase option.

***Investments in Debt securities***

 

The Company's investments in debt securities include corporate bonds with contractual maturities of July 2028. These corporate bonds are classified as held-to-maturity and carried at amortized cost.

 ****

***Other Assets***

 

Other assets include items not expected to be realized within one year from the balance sheet date. These may consist of long-term prepaid expenses, security deposits and long-term investments.

 ****

***Long-term Investments***

 

Time deposits with original maturities exceeding one year are classified as long-term investments. These deposits are held with high-credit-quality financial institutions and are measured at amortized cost. As of September 30, 2025 and March 31, 2025, the Company held $436 and $371, respectively, in long-term deposits maturing over the next 22 to 55 months.

 ****

***Borrowings***

Borrowings are recognized as liabilities when the Company receives the funds and are initially recorded at the amount of cash received, net of directly attributable transaction costs. Borrowings are subsequently measured at amortized cost using the effective interest method, unless designated under the fair value option.

Interest expense is recognized using the effective interest method. Commitment fees, loan origination costs, and other directly related fees are deferred and amortized over the term of the loan.

Short-term borrowings are those due within one year. Long-term borrowings include amounts due after one year or refinanced borrowings with contractual maturities greater than one year as of the balance sheet date.

The Company classifies borrowings in accordance with ASC 470, *"Debt"* and evaluates compliance with loan covenants and potential reclassification requirements.

***Debt Issuance Costs***

Direct costs incurred in connection with financing such as legal fees are classified as debt issuance costs. The Company capitalized these costs and reported the amounts as a direct deduction from the carrying amount of the financial statement line item for which those costs relate. The capitalized debt issuance costs are amortized over the life of the underlying debt obligation utilizing the straight-line methods.

 **

***Fair Value Measurements***

 **

The Company reports financial assets and liabilities and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis in accordance with ASC Topic 820 *Fair Value Measurement* ("ASC 820"). ASC 820 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions and credit risk.

ASC 820 also establishes a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three levels. The U.S. GAAP established a hierarchy framework to classify the fair value based on the observability of significant inputs to the measurement.

The levels of the fair value hierarchy are as follows:

Level 1: Quoted price in an active market for identical assets or liabilities.

Level 2: Quoted prices for similar assets and liabilities in active markets or inputs that are observable.

Level 3: Inputs that are unobservable (for example, cash flow modelling inputs based on assumptions)

The carrying amounts of the Company's financial instruments, such as cash, accounts receivable, short-term loan receivable, accounts payable, accrued expenses, income tax payable and contract liabilities approximate fair values due to the short-term nature of these instruments.

***Advertising and Marketing Costs***

 ****

Advertising and marketing costs are expensed as incurred and are included in cost of revenue and selling, general and administrative expenses in the unaudited consolidated statement of operations. For the six months ended September 30, 2025, and 2024, these costs were $201 and $83, respectively.

***Employee Benefits***

 ****

The Company contributes to government-mandated employee benefit programs in Japan, such as social insurance, health insurance, unemployment insurance, and employee pension insurance. These contributions are expensed as incurred.

***Commitments and Contingencies***

 ****

The Company recognizes contingent liabilities in accordance with ASC 450 *Contingencies* when a loss is probable and the amount can be reasonably estimated. If both conditions are met, a liability is recorded. If a loss is reasonably possible but not probable, or if the amount cannot be reasonably estimated, disclosure is made in the footnotes to the unaudited consolidated financial statements but no liability is recorded.

The Company also discloses commitments, such as future minimum payments under non-cancellable contracts, guarantees, and operating lease obligations. These are recognized as liabilities when incurred, or disclosed if not yet recognized.

***Income Taxes***

 

The Company accounts for income taxes under the asset and liability method in accordance with ASC Topic 740, *Income Taxes*, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements. Under this method, deferred tax assets and liabilities are determined on the differences between the financial statement and tax basis of assets, liabilities and net operating loss by using enacted tax rate in effect for the fiscal year in which the differences are expected to reverse. The effect of a change in tax rate on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

The Company recognizes deferred tax assets to the extent that these assets are believed to be more likely than not to be realized. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts that are more likely than not expected to be realized. In making such a determination, all available positive and negative evidence is considered, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations.

The Company files tax returns in the tax jurisdictions of Japan. Tax benefits for uncertain tax positions are based upon management's evaluation of the information available at the reporting date. To be recognized in the financial statements, a tax benefit must be at least more likely than not to be sustained based on technical merits. The benefit for positions meeting the recognition threshold is measured as the largest benefit more likely than not of being realized upon settlement with a taxing authority that has full knowledge of all relevant information.

***Net Income per Share***

 

Basic net income per common stock is calculated by dividing the net income by the weighted-average number of common stocks outstanding during the period, without consideration for potentially dilutive securities. Diluted net income per common stock is computed by dividing the net income by the weighted-average number of common stocks and potentially dilutive securities outstanding for the period determined using the treasury stock method.

***Recently Issued Accounting Pronouncements***

 

The following Accounting Standards Updates ("ASUs") were issued by the Financial Accounting Standards Board ("FASB") which relate to or could relate to the Company as concerns the Company's normal ongoing operations or the industry in which the Company operates.

In September 2025, the FASB issued ASU 2025-07, *Derivatives and Hedging (ASC 815) and Revenue from Contracts with Customers (ASC 606): Scope Refinements and Share-Based Noncash Consideration*. This ASU clarifies the scope of derivative accounting for certain contracts and the accounting for share-based noncash consideration received from customers. The guidance is effective for fiscal years beginning after December 15, 2026, including interim periods. The Company is currently evaluating the impact that adoption of this guidance will have on its consolidated financial statements.

In July 30, 2025, the FASB issued ASU No. 2025-05 Financial Instruments - Credit Losses (Topic 326): *Measurement of Credit Losses for Accounts Receivable and Contract Assets*. This ASU provide (1) all entities with a practical expedient and (2) entities other than public business entities with an accounting policy election when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606. The requirements are effective for fiscal years beginning after December 15, 2025, including interim periods within those fiscal years. Early adoption is permitted, and entities should apply the amendments prospectively. The Company is currently evaluating the impact that the adoption of this ASU will have on its consolidated financial statements.

In May 2025, the FASB issued ASU 2025-03, which clarifies how to determine the acquirer in business combinations where the acquiree is a variable interest entity. The guidance is effective for fiscal years beginning after December 15, 2026, including interim periods. The Company is currently evaluating the impact that adoption of this guidance will have on its consolidated financial statements.

In November 2024, the FASB issued ASU No. 2024-03 Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): *Disaggregation of Income Statement Expenses*. This ASU requires public business entities to disclose, for interim and annual reporting periods, additional information about certain income statement expense categories. The requirements are effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027. Entities are permitted to apply either the prospective or retrospective transition methods. The Company is currently evaluating the impact that the adoption of this ASU will have on its consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740): *Improvements to Income Tax Disclosures*. The standard requires entities to disclose specific categories in the rate reconciliation and to provide additional information for reconciling items that meet a quantitative threshold. It also requires entities to disclose certain information about income taxes paid and other disclosures related to income and income tax expense from continuing operations. The standard is effective for fiscal years beginning after December 15, 2024 for public business entities and for fiscal years beginning after December 15, 2025 for all other entities. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic *280*): *Improvements to Reportable Segment Disclosures* to update reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses and information used to assess segment performance. This update is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The adoption of this guidance did not have any impact on the Company's segment reporting.

In October 2023, the FASB issued ASU 2023-06, "Disclosure Improvements: Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative" ("ASU 2023-06"). This ASU incorporates certain SEC disclosure requirements into the FASB Accounting Standards Codification ("ASC"). The amendments in the ASU are expected to clarify or improve disclosure and presentation requirements of a variety of ASC Topics, allow users to more easily compare entities subject to the SEC's existing disclosures with those entities that were not previously subject to the requirements, and align the requirements in the ASC with the SEC's regulations. The ASU has an unusual effective date and transition requirements since it is contingent on future SEC rule setting. If the SEC fails to enact required changes by June 30, 2027, this ASU is not effective for any entities. Early adoption is not permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statement.

In June 2022, the FASB issued ASU 2022-03, *Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions*. This ASU clarifies that contractual sale restrictions should not be considered when measuring the fair value of equity securities and requires certain related disclosures. The amendments are effective for entities that are not public business entities for fiscal years beginning after December 15, 2024. The Company does not currently have any equity securities subject to contractual sale restrictions.

**3. Business Combination and goodwill**

In August 2024, the Company completed the acquisition of 100% of the outstanding common stocks of Life Shine Co., Ltd. ("Line Shine"), a privately held company operating senior nursing homes, for the consideration of $901. The acquisition was accounted for using the acquisition method under ASC 805, *Business Combinations*. The result of operations of Life Shine has been included in the Company's unaudited consolidated financial statements since the acquisition date.

Goodwill recognized resulted from a substantial assembled workforce, which does not qualify for separate recognition, as well as expected future synergies from combining operations.

The following table summarizes the allocation of estimated fair value of net assets acquired and liabilities assumed:

---

| | |
|:---|:---|
| Accounts receivable, net | $126 |
| Prepaid expenses and other current assets | 13 |
| Property and equipment, net | 585 |
| Other assets | 12 |
| Accounts payable and accrued expenses | (61) |
| Other current liabilities | (10) |
| Borrowings | (269) |
| Total purchase price for acquisition, net of $314 of cash | (586) |

---

**4. Investment in unconsolidated entity**

On July 31, 2025, the Company entered into an agreement to acquire a medical corporation, a privately held non-profit medical corporation operating nursing homes in Japan, for a total purchase price of JPY277,524 (approximately $1,843 based on the exchange rate in effect on the transaction date). The shares do not provide the Company with voting rights, decision-making authority, or rights to distributions or residual assets.

The nonprofit is considered a variable interest entity ("VIE") under ASC 810, *Consolidation*. However, the Company does not have the power to direct the activities of the nonprofit that most significantly impact its economic performance and does not receive economic benefits from the nonprofit. Accordingly, the Company is not the primary beneficiary and does not consolidate the entity.

**5. Prepaid expenses and other currents assets**

As of September 30, 2025, and March 31, 2025, prepaid expenses and other current assets include the following components:

---

| | | |
|:---|:---|:---|
|  | **September 30,** | **March 31,** |
|  | **2025** | **2025** |
|  | **(unaudited)** | |
| Deferred costs | $2413 | $560 |
| Prepaid expenses | 401 | 222 |
| Advance payment | 72 | 98 |
| Deferred offering costs | 1022 | 381 |
| Short-term investments | 2068 | 374 |
| Other | 1082 | 3 |
| &nbsp;&nbsp;&nbsp;Total prepaid expenses and other current assets | $7058 | $1638 |

---

**6. Property and Equipment, Net**

As of September 30, 2025, and March 31, 2025, property and equipment, which include assets under finance lease, consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **September 30,** | **March 31,** |
|  | **2025** | **2025** |
|  | **(unaudited)** | |
| Buildings | $16544 | $7478 |
| Building fixtures | 8100 | 3219 |
| Vehicles | 28 | 19 |
| Tools and Equipment | 40 | 11 |
| Computers | 22 | 16 |
| Leased asset | 31891 | 26161 |
| Leasehold improvement | 7 | 7 |
| Land | 9182 | 3546 |
| &nbsp;&nbsp;&nbsp;Total property and equipment | 65814 | 40457 |
| Less: Accumulated depreciation | (2671) | (1502) |
| &nbsp;&nbsp;&nbsp;Total property and equipment, net | $63143 | $38955 |

---

The Company recognized depreciation expenses on property and equipment of $1,174, and $433 during the six months ended September 30, 2025, and 2024, respectively.

**7. Intangible Assets, Net**

The Company's intangible assets primarily consist of internally developed capitalized software. As of September 30, 2025 and March 31, 2025, the balance of the capitalized software was $880 and $713, respectively, which represent the capitalized amount under the application development stage as of the respective period end. The Company has performed impairment assessment and identified no triggering events or circumstances indicating that the carrying amount of the intangibles may be impaired and determined no impairment was necessary.

As of September 30, 2025 and March 31, 2025, intangible assets consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **September 30,** | **March 31,** |
|  | **2025** | **2025** |
|  | **(unaudited)** | |
| Software | $21 | $18 |
| Software under the application development stage | 880 | 713 |
| Total intangible assets | 901 | 731 |
| Less: Accumulated amortization | (8) | (5) |
| Total intangible assets, net | $893 | $726 |

---

The following table presents the expected amortization expense for the next five years:

---

| | |
|:---|:---|
| Fiscal year ending March 31, | Estimated amortization expense |
| 2026 (remaining) | $1614 |
| 2027 | 3228 |
| 2028 | 3228 |
| 2029 | 2485 |
| 2030 | 814 |
| Total (2026 - 2030) | $11369 |

---

The Company recognized amortization expenses on intangible assets of $2 and $2 during the six months ended September 30, 2025, and 2024, respectively.

**8*.* Leases**

As of September 30, 2025 and March 31, 2025, the following amounts were recorded in the unaudited consolidated balance sheets relating to the Company's operating and finance leases.

---

| | | |
|:---|:---|:---|
|  | **September 30,** | **March 31,** |
|  | **2025** | **2025** |
|  | **(unaudited)** | |
| **Right-of-Use Assets** |  |  |
| Operating lease assets | $3037 | $2483 |
| **Lease Liabilities** |  |  |
| Operating lease liabilities - Current | $1783 | $1062 |
| Operating lease liabilities - Non-current | 1289 | 1477 |
| Finance lease liabilities - Current | 940 | 740 |
| Finance lease liabilities - Non-current | 30269 | 25044 |

---

The following table illustrates information for the Company's operating and finance leases during the six months ended September 30, 2025 and the fiscal year ended March 31, 2025:

---

| | | |
|:---|:---|:---|
|  | **September 30,** | **March 31,** |
|  | **2025** | **2025** |
|  | **(unaudited)** | |
| Operating leases: |  |  |
| Total operating lease cost | $472 | $424 |
| Cash paid for amounts included in the measurement of the operating lease liability | $529 | $450 |
| Weighted average remaining lease term (years) | 2.1 | 2.6 |
| Weighted average discount rate | 2.49% | 2.49% |
| Finance leases: |  |  |
| Amortization of right-of-use assets | 616 | 720 |
| Interest expenses | 349 | 394 |
| Total finance lease costs | 965 | 1114 |
| Weighted average remaining lease term (years) | 25.6 | 26.3 |
| Weighted average discount rate | 2.49% | 2.49% |

---

The following table summarizes the contractual maturities of operating and finance lease liabilities as of September 30, 2025:

---

| | |
|:---|:---|
| Fiscal year ending March 31, | Operating leases |
| 2026 (remaining) | $933 |
| 2027 | 1565 |
| 2028 | 282 |
| 2029 | 203 |
| 2030 | 146 |
| Thereafter | 33 |
| Total lease payments | 3162 |
| Less amounts representing interest | (90) |
| Present value of lease payments | 3072 |
| Less: current portion | (1783) |
| Non-current lease liabilities | $1289 |

---

---

| | |
|:---|:---|
| Fiscal year ending March 31, | Finance leases |
| 2026 (remaining) | $847 |
| 2027 | 1728 |
| 2028 | 1734 |
| 2029 | 1734 |
| 2030 | 1679 |
| Thereafter | 34685 |
| Total lease payments | 42407 |
| Less amounts representing interest | (11198) |
| Present value of lease payments | 31209 |
| Less: current portion | (940) |
| Non-current lease liabilities | $30269 |

---

**9. Commitments and Contingencies**

***Guarantees and Commitments***

 ****

There were no commitments under certain purchase or guarantee arrangements as of September 30, 2025 and March 31, 2025.

 **

***Legal Matters***

 **

From time to time, in the normal course of business, the Company may be subject to various legal matters such as threatened or pending claims or proceedings. There were no such material matters as of September 30, 2025 and March 31, 2025.

***Indemnification***

 ****

In the ordinary course of business, the Company often includes standard indemnification provisions in its arrangements with third parties. To date, the Company has not paid any material claims or been required to defend any material actions related to its indemnification obligations. However, the Company may record charges in the future as a result of these indemnification obligations.

**10. Accounts payable and accrued expenses**

As of September 30, 2025 and March 31, 2025, accounts payable and accrued expenses include the following components:

---

| | | |
|:---|:---|:---|
|  | **September 30,** | **March 31,** |
|  | **2025** | **2025** |
|  | **(unaudited)** | |
| Accounts payable | $7657 | $3637 |
| Salaries payable | 987 | 724 |
| Deferred rent | 543 | 404 |
| Accrued expenses | 195 | 176 |
| Other | 711 | 601 |
| &nbsp;&nbsp;&nbsp;Total Accounts payable and accrued expenses | $10093 | $5542 |

---

**11. Other current liabilities**

As of September 30, 2025 and March 31, 2025, other current liabilities include the following components:

---

| | | |
|:---|:---|:---|
|  | **September 30,** | **March 31,** |
|  | **2025** | **2025** |
|  | **(unaudited)** | |
| Accrued consumption taxes | $6 | $674 |
| Deposit received | 376 | 242 |
| Other | 166 | 103 |
| &nbsp;&nbsp;&nbsp;Total other current liabilities | $548 | $1019 |

---

**12. Borrowings**

Long-term borrowings as of September 30, 2025 and March 31, 2025 consisted of the following:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Principal** | **Interest rate** | | **Maturity** | **September 30, 2025** | **March 31, 2025** |
| Lender 1 | ¥55500 | 2.03% | Fixed rate | December 26, 2028 | $244 | $278 |
| Lender 2 | 35000 | 2.60% | Fixed rate | January 1, 2029 | 112 | 127 |
| Lender 3 | 20000 | 1.90% | Variable rate | November 27, 2026 | 52 | 74 |
| Lender 3 | 48000 | 1.40% | Fixed rate | September 27, 2027 | 130 | 160 |
| Lender 3 | 80000 | 1.95% | Variable rate | June 27, 2029 | 405 | 454 |
| Lender 3 | 10000 | 2.15% | Variable rate | September 30, 2030 | 68 |  |
| Lender 4 | 1300000 | 2.80% | Variable rate | April 30, 2060 | 8724 |  |
| Lender 4 | 1650000 | 2.50% | Variable rate | August 31, 2059 | 10939 | 10892 |
| Lender 4 | 550000 | 2.70% | Variable rate | May 31, 2059 | 3632 | 3616 |
| Lender 4 | 1625000 | 3.30% | Fixed rate | June 30, 2060 | 10940 |  |
| Lender 5 | 30000 | 0.05% | Fixed rate | August 10, 2035 | 203 | 200 |
| Lender 6 | 40000 | 0.70% | Fixed rate | August 2, 2026 | 39 | 55 |
| Lender 7 | 40000 | 2.00% | Fixed rate | September 30, 2030 | 270 |  |
| Lender 8 | 25000 | 3.60% | Fixed rate | September 30, 2030 | 169 | - |
| Total outstanding principal balance |  |  |  |  | 35927 | 15856 |
| Less: Unamortized debt issuance costs |  |  |  |  | (119) | (119) |
| Subtotal |  |  |  |  | 35808 | 15737 |
| Less: Current portion |  |  |  |  | (1052) | (632) |
| &nbsp;&nbsp;&nbsp;&nbsp;Long-term portion |  |  |  |  | $34756 | $15105 |

---

As of September 30, 2025 and March 31, 2025, certain borrowings totalling $647 and $741, respectively, were guaranteed by the credit guarantee corporation. These guarantees provide credit enhancement and mitigate the risk of borrower default for the financial institution.

Under the terms of the guarantee agreement, the guarantee is in effect for the full term of the loan. The Company is required to pay a guarantee fee to the credit guarantee corporation, which is recognized as an expense over the life of the loan.

In the event of a default, the lender may recover principal and interest from the credit guarantee corporation, which would then seek reimbursement from the Company. While these borrowings are secured through credit guarantee corporation, the Company remains ultimately liable for repayment. As such, the guaranteed portion of the debt is not derecognized, and the full obligation is included in the Company's unaudited consolidated balance sheet under current portion of long-term debt or non-current portion of long-term debt, as appropriate.

As of September 30, 2025 and March 31, 2025, the Company had total borrowings of $35,808 and $15,737, respectively, of which $23,295 and $14,508, respectively, was secured by certain of the Company's assets.

As of September 30, 2025, future minimum payments for long-term loans are as follows:

---

| | |
|:---|:---|
| **Fiscal year ending March 31,** | |
| 2026 (remaining) | $559 |
| 2027 | 1094 |
| 2028 | 1027 |
| 2029 | 920 |
| 2030 | 772 |
| Thereafter | 31555 |
| Total | $35927 |

---

**13*.* Net Income per Share**

The following table sets forth the computation of basic and diluted net income per share:

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended September 30,** | **Six Months Ended September 30,** |
|  | **2025** | **2024** |
|  | **(unaudited)** | **(unaudited)** |
| Basic and Diluted Net Income Per Common Share: |  |  |
| Net income attributable | $3031 | $407 |
| Weighted average common shares outstanding – basic and diluted | 20500000 | 20500000 |
| Net income per common share – basic and diluted | $0.15 | $0.02 |

---

**14. Stockholders' Equity**

**Preferred Stock**

As of September 30, 2025, the Company has authorized 20,000,000 shares of preferred stock with rights and preferences, including voting rights, to be designated from time to time by the board of directors. There were no shares of preferred stock issued or outstanding as of September 30, 2025.

**Common Stock** 

As of September 30, 2025, the Company has authorized 380,000,000 shares of common stock. Each holder of common stock shall be entitled to one vote for each share held as of the record date and shall be entitled to receive dividends, when, as and if declared by the stockholders' meeting or the Board of Directors. The total common stock issued and outstanding as of September 30, 2025, was 20,500,000 shares.

**15. Revenue**

<u>Disaggregation of Revenue</u>

The tables below reflect revenue by major source and timing of transfer of goods and services for the six months ended September 30, 2025 and 2024. The Company had no revenue derived from geographical regions outside of Japan during the six months ended September 30, 2025 and 2024. All revenue during the six months ended September 30, 2025 and 2024 was recognized when the performance obligation was satisfied over time.

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended September 30,** | **Six Months Ended September 30,** |
|  | **2025** | **2024** |
| Construction real estate revenue - Constructing group homes | $37923 | $10491 |
| Welfare services revenue | 9003 | 2140 |
| Other | 40 |  |
| &nbsp;&nbsp;&nbsp;Total | $46966 | $12631 |

---

The following table summarizes the activity in contract liabilities during the six months ended September 30, 2025 and the fiscal year ended March 31, 2025.

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended<br> September 30,** | **Fiscal Year Ended<br> March 31,** |
|  | **2025** | **2025** |
|  | **(unaudited)** | |
| Contract liabilities, beginning of period | $6761 | $2586 |
| Contract liabilities, end of period | 17057 | 6761 |
| Revenue recognized in the period from amounts included in contract liabilities at the beginning of period | 6761 | 2586 |

---

As of March 31, 2025, and 2024, contract liabilities represent advance payments received from customers for construction services that have not yet been performed. These advances will be recognized as revenue as the Company satisfies its performance obligations in completing the construction of group homes. The Company expects to recognize the associated revenue within the next 6 to 7 months, as the remaining construction work is completed. Revenue will be fully recognized upon the completion of the construction and transfer of the home to the customer.

As of March 31, 2025, the Company has no contract assets, as all costs incurred to date for ongoing construction projects have been billed to customers. Revenue has been recognized using the cost-to-cost method, based on the progress of construction. Since all costs incurred up to March 31, 2025, have been billed to customers, there are no amounts due for services already performed, and therefore no contract assets exist as of that date.

As of September 30, 2025, the Company has recognized a contract asset of $2,295, reflecting services performed but not yet billed to customers as of that date. This contract asset represents the difference between the revenue recognized and the amounts billed, which will be invoiced in future periods.

The Company had unsatisfied or partially unsatisfied performance obligations under construction service contracts totaling approximately $26,763 in aggregate transaction price as of September 30, 2025. The Company expects to recognize revenue related to these performance obligations in the amount of approximately $26,763 during the fiscal year ending March 31, 2026.

Because the Company operates solely as a construction service provider and does not engage in the sale of group homes it constructs, it does not hold any inventory of group homes at the end of the reporting period. Revenue is recognized exclusively for services performed, and no group homes are maintained for resale.

**16. Cost of Revenue**

<u>Disaggregation of Cost of revenue</u>

The table below reflects cost of revenue by major source for the six months ended September 30, 2025 and 2024.

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended September 30,** | **Six Months Ended September 30,** |
|  | **2025** | **2024** |
|  | **(unaudited)** | **(unaudited)** |
| Construction real estate revenue - Constructing group homes | $24917 | $5671 |
| Welfare services revenue | 9310 | 2853 |
| Total | $34227 | $8524 |

---

**17. Segment Information**

The Company operates as a single reportable segment. The chief operating decision maker reviews financial performance and allocates resources on a consolidated basis, using a single measure of operating profit and a total expense amount. No disaggregated expense categories are regularly reviewed by the CODM. As such, the Company has not identified any segment expense categories that meet the criteria for disclosure under ASC 280, as amended by ASU 2023-07.

**18. Related Party**

The related parties that had material balances as of September 30, 2025 and March 31, 2025 and transactions for the six months ended September 30, 2025 and 2024 consist of the following:

---

| | |
|:---|:---|
| Name of Related Parties | Nature of Relationship at September 30, 2025 |
| Minaterrace Inc. | A company controlled by Tatsuma Yoshida, the CEO and the principal stockholder of the Company |
| at A&C Inc. | A company controlled by Yoshihito Arita, the director of the Company |
| Tasukeai General Incorporated Association | A company that is controlled by an immediate family member of Tatsuma Yoshida, the CEO and the principal shareholder of the Company |

---

The Company had the following related party balances as of September 30, 2025 and March 31, 2025:

---

| | | | |
|:---|:---|:---|:---|
|  | | **September 30,** | **March 31,** |
|  | <br>Nature of transactions | **2025** | **2025** |
|  |  | **(unaudited)** | |
| **Payable due to related parties:** |  |  |  |
| at A&C Inc. | Payable related to outsourcing expenses | $&nbsp;&nbsp;&nbsp;&nbsp;24 | $37 |
| Tasukeai General Incorporated Association | Payable related to outsourcing expenses | 30 | 39 |

---

The Company had the following related party transactions for the six months ended September 30, 2025 and 2024:

---

| | | | |
|:---|:---|:---|:---|
|  | | **Six Months Ended September 30,** | **Six Months Ended September 30,** |
|  | <br>Nature of transactions | **2025** | **2024** |
|  |  | **(unaudited)** | **(unaudited)** |
| **Revenue from related parties:** |  |  |  |
| at A&C Inc. | Revenue from outsourced services | $40 | $— |
| **Selling, General and Administrative Expenses with related parties:** |  |  |  |
| at A&C Inc. | Outsourcing expenses | 204 |  |
| Minaterrace Inc. | Outsourcing expenses | 8 | 13 |
| Tasukeai General Incorporated Association | Outsourcing expenses | 143 | 92 |

---

Compensation for directors is determined by the Board of Directors and/or shareholders in accordance with the Company's Articles of Incorporation. Total compensation paid to directors during the six months ended September 30, 2025 and 2024 were $84 and $108, respectively.

**19. Subsequent Events**

The Company has evaluated subsequent events after the consolidated balance sheet date through February 6, 2026, the date the consolidated financial statements were available for issuance. Management has determined that no significant events or transactions have occurred subsequent to the consolidated balance sheet date that require both recognition and disclosure in the consolidated financial statements.

**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

To the shareholders and the board of directors of AMATUHI HOLDINGS, Inc.

**Opinion on the Financial Statements**

 ****

We have audited the accompanying consolidated balance sheets of AMATUHI HOLDINGS, Inc. and its subsidiaries (the "Company") as of March 31, 2025 and 2024, the related consolidated statements of operations and comprehensive income, consolidated statements of changes in stockholders' equity, consolidated statements of cash flows for the years ended March 31, 2025 and 2024, and the related notes (collectively referred to as the "Financial Statements"). In our opinion, the Financial Statements present fairly, in all material respects, the consolidated balance sheets of the Company as of March 31, 2025 and 2024, and the consolidated statements of operations and comprehensive income, consolidated statements of changes in stockholders' equity and its consolidated statements of cash flows for the years in the period ended March 31, 2025 and 2024, in conformity with accounting principles generally accepted in the United States.

**Basis for Opinion**

 ****

These Financial Statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's Financial Statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (the "PCAOB") and are required to be independent with respect to the Company in accordance with the United States federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB and in accordance with the auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the Financial Statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the Financial Statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the Financial Statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Assentsure PAC

Singapore, July 29, 2025, except for Note 1 and Note 12 as to which date is September 12, 2025

PCAOB ID number: 6783

We have served as the Company's auditor since 2025.

**AMATUHI HOLDINGS, INC. AND SUBSIDIARIES**

**CONSOLIDATED BALANCE SHEETS**

**(in thousands, except share and per share data)**

---

| | | |
|:---|:---|:---|
|  | **March 31,** | **March 31,** |
|  | **2025** | **2024** |
| **ASSETS** |  |  |
| Current Assets: |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $13373 | $2044 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net | 2315 | 559 |
| &nbsp;&nbsp;&nbsp;Short-term loan receivable |  | 4327 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 1638 | 78 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Current Assets | 17326 | 7008 |
| Non-current Assets: |  |  |
| &nbsp;&nbsp;&nbsp;Property and equipment, net | 38955 | 7656 |
| &nbsp;&nbsp;&nbsp;Operating lease right-of-use assets, net | 2483 | 889 |
| &nbsp;&nbsp;&nbsp;Intangible assets, net | 726 | 4 |
| &nbsp;&nbsp;&nbsp;Goodwill | 190 |  |
| &nbsp;&nbsp;&nbsp;Deferred tax assets | 266 | 118 |
| &nbsp;&nbsp;&nbsp;Other assets | 1937 | 407 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Assets | $61883 | $16082 |
| **LIABILITIES AND STOCKHOLDERS' EQUITY** |  |  |
| Current Liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | $5542 | $2584 |
| &nbsp;&nbsp;&nbsp;Payable due to related party | 76 | 13 |
| &nbsp;&nbsp;&nbsp;Income tax payable | 1175 | 300 |
| &nbsp;&nbsp;&nbsp;Contract liabilities | 6761 | 2586 |
| &nbsp;&nbsp;&nbsp;Current portion of operating lease liabilities | 1062 | 360 |
| &nbsp;&nbsp;&nbsp;Current portion of finance lease liabilities | 740 | 292 |
| &nbsp;&nbsp;&nbsp;Current portion of long-term debt | 632 | 214 |
| &nbsp;&nbsp;&nbsp;Other current liabilities | 1019 | 179 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Current Liabilities | 17007 | 6528 |
| Non-current Liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Non-current operating lease liabilities | 1477 | 559 |
| &nbsp;&nbsp;&nbsp;Non-current finance lease liabilities | 25044 | 7622 |
| &nbsp;&nbsp;&nbsp;Non-current portion of long-term debt | 15105 | 633 |
| &nbsp;&nbsp;&nbsp;Other liabilities | 81 | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Liabilities | 58714 | 15350 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commitment and Contingencies |  |  |
| Stockholders' Equity: |  |  |
| Preferred stock, $0.000001 par value – 20,000,000 shares authorized as of March 31, 2025 and 2024; No shares issued and outstanding as of March 31, 2025 and 2024<br> Common stock, $0.000001 par value – 380,000,000 shares authorized as of March 31, 2025 and 2024; 20,500,000 shares issued and outstanding as of March 31, 2025 and 2024\* |  |  |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 337 | 337 |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive income | (20) | (69) |
| &nbsp;&nbsp;&nbsp;Retained earnings | 2852 | 464 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Stockholders' Equity | 3169 | 732 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Liabilities and Stockholders' Equity | $61883 | $16082 |

---

The accompanying notes are an integral part of the consolidated financial statements.

\*The number of shares issued and outstanding presented above is adjusted retrospectively to reflect the 1 for 5,000 sub-division effected on August 6, 2025.

**AMATUHI HOLDINGS, INC. AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF OPERATIONS**

**(in thousands, except share and per share data)**

---

| | | |
|:---|:---|:---|
|  | **Fiscal Year Ended March 31,** | **Fiscal Year Ended March 31,** |
|  | **2025** | **2024** |
| Revenue | $49087 | $15194 |
| Cost of revenue | (36450) | (11390) |
| Gross profit | 12637 | 3804 |
| Operating expenses: |  |  |
| &nbsp;&nbsp;&nbsp;Selling, General and Administrative Expenses | (7861) | (2664) |
| &nbsp;&nbsp;&nbsp;Selling, General and Administrative Expenses – related parties | (404) | (251) |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization expenses | (77) | (8) |
| &nbsp;&nbsp;&nbsp;Total operating expenses | (8342) | (2923) |
| Profit from operations | 4295 | 881 |
| Other (expenses)/ income, net | (86) | 62 |
| Interest expenses | (672) | (182) |
| Profit before income taxes | 3537 | 761 |
| Income tax expenses | (1150) | (231) |
| Net income | $2387 | $530 |
| Net income per share attributable to common stockholders, basic and diluted | $0.12 | $0.03 |
| Weighted-average number of common stocks outstanding used to compute net income per share, basic and diluted\* | 20500000 | 20500000 |

---

The accompanying notes are an integral part of the consolidated financial statements.

\* Giving retroactive effect to the 1 for 5,000 sub-division effected on August 6, 2025.

**AMATUHI HOLDINGS, INC. AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME**

**(in thousands, except share and per share data)**

---

| | | |
|:---|:---|:---|
|  | **Fiscal Year Ended March 31,** | **Fiscal Year Ended March 31,** |
|  | **2025** | **2024** |
| Net income | $2387 | $530 |
| Other comprehensive income/(loss): |  |  |
| &nbsp;&nbsp;&nbsp;Currency translation adjustments | 49 | (51) |
| Total other comprehensive income/(loss) | 49 | (51) |
| Comprehensive income | $2436 | $479 |

---

**AMATUHI HOLDINGS, INC. AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY**

**(in thousands, except share data)**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Stock Class** | **Stock Class** | | | | |
|  | **Common Stocks** | **Common Stocks** | | | | |
|  | **Shares** | **Amount** | **Additional**<br>**Paid-In**<br>**Capital** | **(Accumulated losses)/**<br>**Retained**<br>**Earnings** | **Accumulated**<br> **other**<br>**comprehensive**<br>**income/(loss)** | **Total**<br>**Stockholders'**<br>**Equity** |
| **Balance, March 31, 2023** | 20500000 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;— | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;337 | $(66) | $18 | $253 |
| &nbsp;&nbsp;&nbsp;Other comprehensive loss, net of tax |  |  |  |  | (51) | (51) |
| &nbsp;&nbsp;&nbsp;Net income |  |  |  | 530 |  | 530 |
| **Balance, March 31, 2024** | 20500000 | $— | $337 | $464 | $(69) | $732 |
| &nbsp;&nbsp;&nbsp;Other comprehensive income, net of tax |  |  |  |  | 49 | 49 |
| &nbsp;&nbsp;&nbsp;Net income |  |  |  | 2387 |  | 2387 |
| **Balance, March 31, 2025** | 20500000 | $— | $337 | $2851 | $(20) | $3168 |

---

The accompanying notes are an integral part of the consolidated financial statements.

The number of shares issued and outstanding presented above is adjusted retrospectively to reflect the 1 for 5,000 sub-division effected on August 6, 2025.

**AMATUHI HOLDINGS, INC. AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(in thousands)**

---

| | | |
|:---|:---|:---|
|  | **Fiscal Years Ended March 31,** | **Fiscal Years Ended March 31,** |
|  | **2025** | **2024** |
| **Cash flows from operating activities:** |  |  |
| Net income | $2387 | $530 |
| Adjustments to reconcile net income to net cash provided by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 1143 | 327 |
| &nbsp;&nbsp;&nbsp;Noncash lease expenses | (1559) | (707) |
| &nbsp;&nbsp;&nbsp;Amortization of debt issuance costs | 2 |  |
| &nbsp;&nbsp;&nbsp;Loss from sales of property and equipment | 54 |  |
| &nbsp;&nbsp;&nbsp;Change in deferred income taxes | (145) | (75) |
| &nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | (1596) | (272) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | (1518) | (32) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other assets | (1488) | (404) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | 2824 | 2042 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payable due to related party | 62 | 14 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income tax payable | 857 | 312 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contract liabilities | 4079 | 2289 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other liabilities | 890 | 52 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating lease liabilities | 1584 | 739 |
| Net cash provided by operating activities | 7576 | 4815 |
| **Cash flows from investing activities:** |  |  |
| Purchase of property and equipment | (13956) | (5) |
| Proceeds from sales of property and equipment | 496 |  |
| Purchase of intangible assets | (712) | (5) |
| Payment for short-term receivable |  | (4499) |
| Payment received from short-term receivable | 4289 |  |
| Acquisition of the subsidiary | (576) | - |
| Net cash used in investing activities | (10459) | (4509) |
| **Cash flows from financing activities:** |  |  |
| Repayments of long-term debt | (470) | (135) |
| Proceeds from long-term debt | 14945 | 519 |
| Repayments of financing lease liabilities | (356) | (154) |
| Payment for debt issuance costs | (121) | - |
| Net cash provided by financing activities | 13998 | 230 |
| Effect of exchange rate change on cash and cash equivalents | 214 | (233) |
| Net change in cash and cash equivalents | 11329 | 303 |
| Cash and cash equivalents at beginning of period | 2044 | 1741 |
| Cash and cash equivalents at end of period | $13373 | $2044 |
| **Supplemental disclosures of cash flow information:** |  |  |
| &nbsp;&nbsp;&nbsp;Cash paid for interest | $102509 | $13 |
| &nbsp;&nbsp;&nbsp;Cash paid for income taxes | $307 | $— |

---

The accompanying notes are an integral part of the consolidated financial statements.

**AMATUHI HOLDINGS, INC. AND ITS SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(in thousands, except share and per share data)**

**1. Organization, Nature of Business**

AMATUHI Holdings, Inc. (the "Company") was incorporated on June 24, 2025 in Delaware to act as the holding company of AMATUHI, Co., Ltd., ("AMATUHI Japan"), which was incorporated in Japan on February 22, 2021 and is an operating entity. AMATUHI Japan primarily designs and construct care homes called "group homes" for people with disabilities and seniors. The Company also operates groups homes and provides wide ranges of support services.

At incorporation, the Company issued five shares of common stock with the par value of $0.000001. On July 22, 2025, as part of its reorganization, the Company entered into a Reorganization Agreement and Plan of Share Exchange with AMATUHI Japan and its shareholders and acquired 4,100 shares of AMATUHI Japan's ordinary shares from its shareholders in exchange for the Company's 4,100 shares of common stock. The Company filed a Certificate of Ownership and Merger, with the Delaware Secretary of State, pursuant to Section 253 of the Delaware General Corporation Law, to effectuate the reorganization. After the share exchange, AMATUHI Japan became a wholly owned subsidiary of the Company.

The reorganization involves entities under common control. Under the guidance in ASC 805-50, for transactions between entities under common control, the assets, liabilities, and results of operations are recognized at their carrying amounts on the date of the restructuring, which required retrospective combination of the Company and AMATUHI Japan. The Company's consolidated financial statements have been prepared as if the existing corporate structure had been in existence throughout all periods presented rather than from the incorporation. This includes a retrospective presentation for all equity related disclosures, which were under common control throughout the relevant periods as a single economic enterprise although legal parent-subsidiary relationship were not established.

On August 6, 2025, the Company's Board of Directors approved a sub-division of the Company's issued and outstanding shares at a ratio of 1:5,000, which became effective on August 6, 2025. As a result of the sub-division, the number of shares issued and outstanding became 20,500,000 shares. The Company believes it is appropriate to reflect the above transactions on a retroactive basis in accordance with ASC 260. All references made to share or per share amounts herein have been retroactively adjusted to reflect the 1:5,000 sub-division.

**2. Summary of Significant Accounting Policies**

***Basis of Presentation***

 

The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission ("SEC").

As an emerging growth company, the Jumpstart Our Business Startups Act allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The Company has elected to delay adoption of certain new or revised accounting standards. As a result, the Company's consolidated financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective date for new or revised accounting standards that are applicable to public companies.

***Going concern and liquidity***

The Company has evaluated whether there are certain conditions and events, considered in aggregate, that raise substantial doubt about the Company's ability to continue as a going concern within one year after the date that the consolidated financial statements are issued.

The Company's consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. The Company's ability to continue as a going concern is dependent upon the Company's ability to attract and retain revenue generating customers, acquire new customer contracts, and additional financing. If substantial doubt exists, management evaluates whether its plans, if appropriately implemented, will alleviate that doubt. Disclosures are made in the consolidated financial statements when substantial doubt exists or is alleviated by management's plans.

The Company manages liquidity to ensure that it has sufficient cash and available funding to meet its operating and capital requirements. As of March 31, 2025, the Company had cash and cash equivalents of $13,373.

 ****

***Basis of Consolidation***

 

The consolidated financial statements include the accounts of the Company and all of its wholly owned subsidiaries: AMATUHI, Inc. and Life Shine Co., Ltd. Life Shine Co. Ltd. is a privately held company operating senior nursing homes. Intercompany balances and transactions have been eliminated in consolidation.

***Foreign Currency Translation***

 

The Company's functional currency is generally Japanese Yen. Results of operations are translated to U.S. dollars using the average exchange rates during the period. Assets and liabilities are translated using the exchange rates in effect as of the date of the balance sheet. Resulting translation adjustments are recorded as a foreign currency translation adjustment into other accumulated comprehensive income/(loss) in stockholders' equity.

 ****

***Related Party Transactions***

 

The Company conducts transactions with certain related parties in the ordinary course of business. Related parties include entities owned by the Company's directors. These transactions are conducted on terms equivalent to those that prevail in arm's-length transactions, and are subject to oversight by the Company's board of directors, as applicable.

 ****

***Use of Estimates***

 

The preparation of the consolidated financial statements in conformity with the U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the reporting date, and the reported amounts of revenue and expense during the reporting period. These estimates are based on management's best knowledge of current events and actions that the Company may undertake in the future and include, but are not limited to, revenue recognition, fair values and useful lives of assets acquired and liabilities assumed through business combinations, allowance for credit losses, useful lives of property and equipment and intangible assets, the carrying value of operating lease right-of-use assets and liabilities, impairment of long-lived assets, and valuation allowance against net deferred tax assets. Actual results could differ from those estimates.

***Revenue Recognition***

 

The Company applies ASC Topic 606, *Revenue from Contracts with Customers* ("ASC 606") for all periods presented in the consolidated financial statements. To determine the appropriate amount of revenue to be recognized in accordance with ASC 606, the Company follows a five-step model as follows:

1 – Identification of the contract with a customer

2 – Identification of the performance obligation in the contract

3 – Determination of the transaction price

4 – Allocation of the transaction price to the performance obligation in the contract

5 – Recognition of revenue when, or as, a performance obligation is satisfied

The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring promised goods or services to a customer. The transaction price is generally fixed. None of the Company's contracts contain a significant financing component. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to government entities.

*<u>Construction real estate sales</u>*

1) Constructing group homes

The Company recognizes revenue from constructing group homes over time as performance obligations are satisfied. These contracts are entered into with third-party customers. All revenues generated from construction and home sale activities are derived from unrelated, third-party customers.

Revenue is generally recognized using an input method based on the ratio of costs incurred to total estimated costs, which the Company believes best reflects its progress toward satisfying the performance obligation.

The average time to complete the construction of a group home typically ranges from six to seven months, depending on project scope, site conditions, and permitting processes. All homes sold to customers are constructed under the Company's direction and control, using third-party subcontractors for portions or all the construction work. The Company is responsible for managing the construction process, including project oversight, design specifications, permitting, and compliance. The Company does not purchase completed group homes from third-party builders for resale.

The Company does not classify group homes under construction or completed group homes awaiting sale as inventory. Instead, all costs incurred on construction contracts are billed to customers as construction progresses. When amounts billed exceed costs incurred, the excess is recorded as contract liabilities, representing cash received in advance for services not yet completed. No inventory is recorded on the balance sheet, as the Company does not own or hold group homes it constructs for resale.

As of March 31, 2025, and 2024, the Company had uncompleted construction contracts, but all services performed up to the balance sheet date had been billed to customers. Instead, amounts billed in excess of costs incurred are recorded as contract liabilities, reflecting cash received in advance for services yet to be completed. The Company's balance sheet does not include inventory related to group homes under construction or completed homes awaiting sale.

When either party to a contract has performed, the Company presents the contract as a contract asset or contract liability, depending on the relationship between the Company's performance and the customer's payment. A contract asset represents the Company's right to consideration for services transferred to the customer. A contract liability represents the Company's obligation to transfer services for which it has already received payment or for which payment is due.

Recognition of revenue and profit is dependent upon a number of factors, including the accuracy of a variety of estimates made at the balance sheet date, such as engineering progress, material quantities, the achievement of milestones, penalty provisions, labor productivity and cost estimates. Variable consideration is included in the estimate of the transaction price only to the extent that a significant reversal would not be probable. Management continuously monitors factors that may affect the quality of its estimates, and material changes in estimates are disclosed accordingly.

The Company currently leases all the group homes it operates. All such leases are entered into with unrelated third-party lessors. The Company does not lease properties from related parties or affiliates.

2) Sales of real estate properties

Revenue from sales of real estate properties is generated from sales to third-party customers. Revenue is recognized at a point in time (i.e., at the time of closing of a sale) when title to and possession of the property are transferred to the buyer.

The Company engages subcontractors for constructing group homes. The Company assesses whether it is acting as a principal or an agent in these arrangements in accordance with ASC 606, *Revenue from Contracts with Customers*. Based on this assessment, the Company recognizes revenue on a gross basis (as principal) rather than on a net basis (as agent). The Company has concluded that gross reporting is appropriate because the Company (i) is responsible for identifying and hiring qualified vendors, (ii) has the discretion to select the vendors and establish their price and duties, and (iii) bears the risk for services that are not fully paid for by its customers.

All sales of real estate properties are made to third-party customers, and the Company does not engage in sales to related parties or internal entities.

*<u>Welfare services revenue</u>*

Revenue from welfare services is generated from operating group homes and providing support services to residents. Rental agreement with tenants are accounted for as operating leases. Minimum lease payment (rent) are recognized on a straight-line basis over the term of the respective lease, beginning when the tenant takes possession of, or are granted control over, the physical use of the space. Any excess of straight-line rents recognized over amounts contractually billed is recorded as deferred rents receivable, if any. Revenue from ancillary services, such as food, beverage and personal support services, is recognized over time as the services are provided, in accordance with ASC 606.

The Company also receives government subsidies to support its welfare services. Revenue related to these subsidies is recognized when the related performance obligations are satisfied, and collection is reasonably assured, consistent with ASC 606.

***Segment Information***

 

ASC 280, Segment Reporting, establishes standards for companies to report in their financial statement information about operating segments, on a basis consistent with the Company's internal organizational structure as well as information about geographical areas, business segments and major customers in financial statements for details on the Company's business segments.

<br> The Company operates and manages its business as one operating and reportable segment, focused on the development, operation, and management of group homes and the provision of welfare-related services. The Company's Chief Executive Officer ("CEO") is considered the Chief Operating Decision Maker ("CODM"). The CODM evaluates the Company's financial performance and allocates resources on a consolidated basis. As such, the Company has determined that it has one operating and reportable segment in accordance with ASC Topic 280, *Segment Reporting*. All of the Company's revenue is currently generated from customers located in Japan, and all of its long-lived assets are also located in Japan.

Revenue is derived primarily from two sources:

1. Construction
 of group homes and sales of real estate properties

2. Welfare
 services provided to residents of the Company's group homes

The Company will disclose customer concentration information if any individual customer accounts for 10% or more of consolidated revenue in any reporting period.

***Concentration of Customers and Vendors***

The balance sheet items that potentially subject the Company to concentrations of credit risk are primarily cash and accounts receivable. The Company monitors and manages the overall exposure of its cash balances to individual financial institutions on an ongoing basis. The Company continuously evaluates the credit worthiness of its customers' financial condition and generally does not require collateral. The Company incurred no losses from such accounts and management considers the risk of loss to be minimal.

For the fiscal years ended March 31, 2025 and 2024, there were two customers and there was one customer, respectively, who accounted for more than 10% of the Company's total revenue in the respective periods. As of March 31, 2025 and 2024, there was one customer and there were no customers, respectively, who accounted for more than 10% of the Company's total accounts receivable in the respective periods.

For the fiscal years ended March 31, 2025 and 2024, there was two suppliers who accounted for more than 10% of the Company's total purchase in both periods. As of March 31, 2025 and 2024, there were four and two suppliers, respectively, who accounted for more than 10% of the Company's total accounts payable in the respective periods.

***Business Combination***

 

Business combination are accounted for under the acquisition method of accounting. This method requires, among other things, allocation of the fair value of purchase consideration to the tangible and intangible assets acquired and liabilities assumed at their estimated fair values on the acquisition date. The excess of the fair value of purchase consideration over the values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair value of assets acquired and liabilities assumed, management makes estimates and assumptions, especially with respect to intangible assets. Management's estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, not to exceed one year from the date of acquisition, the Company may record adjustments to the assets acquired and liabilities assumed, with a corresponding offset to goodwill if new information is obtained related to facts and circumstances that existed as of the acquisition date. After the measurement period, any subsequent adjustments are reflected in the Consolidated Statements of Operations. Acquisition costs, consisting primarily of third-party legal and consulting fees, are expensed as incurred.

***Cash and Cash Equivalents***

 

The Company considers all highly liquid short-term investments purchased with an initial maturity date of three months or less to be cash equivalents.

 ****

***Accounts Receivable, Net***

 

Accounts receivable primarily consist of the amounts billed and currently due from customers, net of an allowance for credit losses, if recorded. When the Company has an unconditional right to payment, subject only to the passage of time, the right is treated as receivable. The Company's accounts receivable balances are unsecured, bearing no interest. Fees billed in advance of the related contractual term represent contract liabilities.

Accounts receivable are subject to collection risk. The Company performs evaluations of its customers' financial positions and generally extends credit on account, without collateral.

At each balance sheet date, the Company recognizes an expected allowance for credit losses. In addition, also at each reporting date, this estimate is updated to reflect any changes in credit risk since the receivable was initially recorded. This estimate is calculated on a pooled basis where similar risk characteristics exist.

The allowance estimate is derived from a review of the Company's historical losses on the aging of receivables. This estimate is adjusted for management's assessment of current conditions, reasonable and supportable forecasts regarding future events, and any other factors deemed relevant by the Company. The Company believes historical loss information is a reasonable starting point in which to calculate the expected allowance for credit losses as the Company's customers' composition have remained constant. The Company did not record an allowance for credit loss as of March 31, 2025, and 2024.

The Company writes off receivables when there is information that indicates the debtor is facing significant financial difficulty and there is no possibility of recovery. If any recoveries are made from any accounts previously written off, they will be recognized in income or an offset to credit loss expense in the year of recovery. The Company did not have any write-offs of receivable during the fiscal years ended March 31, 2025, and 2024.

***Other Current Assets***

 

Other current assets consist of amounts expected to be realized or consumed within one year. These may include deferred costs, advance payment, deferred offering costs and short-term investments.

***Short-term Investments***

 

The Company's short-term investments include time deposits with financial institutions having original maturities greater than three months and less than one year. There investments are held to maturity and are stated amortized cost, which approximates fair value. As of March 31, 2025, and 2024, the Company held $374 and nil, respectively.

 ****

 **

***Deferred Offering Costs***

 **

Deferred offering costs include specific incremental costs directly attributable to the Company's initial public. Offering of securities. Deferred offering costs exclude management salaries or other general and administrative expenses. These costs are being deferred and will be charged against the gross proceeds of the offering.

 ****

***Property and Equipment, Net***

 

Property and equipment are recorded at the cost less accumulated depreciation. Depreciation is computed using the straight-line method. The estimated useful lives of assets are as follows:

---

| | |
|:---|:---|
| **Property and Equipment** | **Estimated Useful Life** |
| Buildings | 15 - 22 years |
| Building fixtures | 8 - 15 years |
| Vehicles | 1 - 3 years |
| Tools and Equipment | 3 years |
| Computers | 3 - 4 years |
| Leased asset | 5 years |
| Leasehold improvement | Shorter of 20 years or lease term |
| Land | Indefinite |

---

Repair and maintenance costs are expensed as incurred.

 ****

***Intangible Assets, Net***

 

Intangible assets primarily consist of capitalized software. The Company accounts for its software development costs in accordance with the guidance in ASC 350-40, *Internal-use software*. The costs incurred prior to the application development stage and post implementation are expensed as incurred. Direct and incremental internal and external costs incurred during the application development stage are capitalized until the application is substantially complete and ready for its intended use, at which point amortization begins. Training, data conversion and maintenance costs are expensed as incurred. Costs of capitalized software are amortized on a straight-line basis over the estimated period of benefit, which is approximately one to five years.

 ****

***Impairment or Disposal of Long-Lived Assets***

 

Long-lived assets used in operations are reviewed for impairment whenever events or changes in circumstances indicate that carrying amounts may not be recoverable. For long-lived assets to be held and used, the Company recognizes an impairment loss only if the carrying amount is not recoverable when compared to the Company's undiscounted cash flows, and the impairment loss is measured based on the difference between the carrying amount and fair value. Long-lived assets held for sales are reported at the lower of cost or fair value less costs to sell.

 ****

 ****

***Goodwill***

Goodwill represents the excess of the cost of an acquired business over the fair value of the assets acquired at the date of acquisition. Goodwill is not subject to amortization but is subject to impairment testing on an annual basis, or whenever events and circumstances indicate that the carrying value of the reporting unit may be in excess of the reporting unit's fair value. The Company has one reporting unit and tests goodwill for impairment at the reporting unit level. As part of the goodwill impairment test, the Company first performs a qualitative assessment to determine whether further impairment testing is necessary. If, as a result of its qualitative assessment, it is more-likely-than-not that the fair value of the Company's reporting unit is less than its carrying amount, a two-step impairment test is required.

If factors indicate that the fair value of the reporting unit is less than its carrying amount, the Company performs a quantitative assessment, and the fair value of the reporting unit is determined by analyzing the expected present value of future cash flows. If the carrying value of the reporting unit continues to exceed its fair value, the implied fair value of the reporting unit's goodwill is calculated and an impairment loss equal to the excess is recorded. The Company has not recorded any impairments related to goodwill as of March 31, 2025.

***Leases***

 

In accordance with FASB ASC Topic 842, *Leases*, the Company determines if an arrangement is a lease at inception based on whether there is an identified asset and whether the Company controls the use of the identified asset throughout the period of use. The Company classifies leases as either finance or operating. The classification criteria is based on estimates regarding the fair value of the leased asset, minimum lease payments, effective cost of funds, economic life of the asset, and certain other terms in the lease agreements.

As of March 31, 2025 and 2024, the Company's finance lease liability is entirely related to leases with third-party lessors for group homes. These leases are classified as finance leases under ASC 842, meeting the criteria for such classification, including transfer of ownership at the end of the lease term or the presence of a bargain purchase option.

*Operating leases*

Operating leases are included in operating lease right-of-use (ROU) assets, current portion of operating lease liabilities, and non-current operating lease liabilities in the Consolidated Balance Sheets. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date.

For leases with terms greater than 12 months, the Company records a ROU asset and a lease liability representing the present value of future lease payments. The discount rate used to measure the lease asset and liability is determined at the beginning of the lease term using the rate implicit in the lease, or the Company's collateralized incremental borrowing rate. The implicit rate within the Company's leases is generally not determinable and, therefore, the incremental borrowing rate at lease commencement is utilized to determine the present value of lease payments. The Company estimates its incremental borrowing rate based on third-party lender quotes to obtain secured debt in a like currency for a similar asset over a timeframe similar to the term of the lease. For those contracts that include fixed rental payments for both the use of the asset ("lease costs") as well as for other occupancy or service costs relating to the asset ("non-lease costs"), the Company generally includes both the lease costs and non-lease costs in the measurement of the lease asset and liability.

The Company accounts for each lease and any non-lease components associated with that lease as a single lease component for all asset classes. Lease expenses for the Company's operating leases are recognized on a straight-line basis over the lease term except for variable lease costs, which are expensed as incurred. The Company does not recognize ROU assets and operating lease liabilities that arise from leases with an initial lease term of 12 months or less.

*Finance leases*

Finance lease right-of-use assets are recognized within property and equipment, net on the Company's Consolidated Balance Sheets. The Company recognizes interest expense on the finance lease liabilities utilizing the effective interest method. The right-of-use asset is generally amortized to depreciation and amortization expense on a straight-line basis over the lease term unless the lease contains an option to purchase the underlying asset that the Company is reasonably certain to exercise. If the Company is reasonably certain to exercise the purchase option, the asset is amortized over the useful life.

***Other Assets***

 

Other assets include items not expected to be realized within one year from the balance sheet date. These may consist of long-term prepaid expenses, security deposits and long-term investments.

 ****

***Long-term Investments***

 

Time deposits with original maturities exceeding one year are classified as long-term investments. There deposits are held with high-credit-quality financial institutions and are measured at amortized cost. As of March 31, 2025, the Company held $371 in long-term deposits maturing over the next 29 months.

 ****

***Borrowings***

Borrowings are recognized as liabilities when the Company receives the funds and are initially recorded at the amount of cash received, net of directly attributable transaction costs. Borrowings are subsequently measured at amortized cost using the effective interest method, unless designated under the fair value option.

Interest expense is recognized using the effective interest method. Commitment fees, loan origination costs, and other directly related fees are deferred and amortized over the term of the loan.

Short-term borrowings are those due within one year. Long-term borrowings include amounts due after one year or refinanced borrowings with contractual maturities greater than one year as of the balance sheet date.

The Company classifies borrowings in accordance with ASC 470, *"Debt"* and evaluates compliance with loan covenants and potential reclassification requirements.

***Debt Issuance Costs***

Direct costs incurred in connection with financing such as legal fees are classified as debt issuance costs. The Company capitalized these costs and reported the amounts as a direct deduction from the carrying amount of the financial statement line item for which those costs relate. The capitalized debt issuance costs are amortized over the life of the underlying debt obligation utilizing the straight-line methods.

 **

***Fair Value Measurements***

 **

The Company reports financial assets and liabilities and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis in accordance with ASC Topic 820 *Fair Value Measurement* ("ASC 820"). ASC 820 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions and credit risk.

ASC 820 also establishes a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three levels. The U.S. GAAP established a hierarchy framework to classify the fair value based on the observability of significant inputs to the measurement.

The levels of the fair value hierarchy are as follows:

Level 1: Quoted price in an active market for identical assets or liabilities.

Level 2: Quoted prices for similar assets and liabilities in active markets or inputs that are observable.

Level 3: Inputs that are unobservable (for example, cash flow modeling inputs based on assumptions)

The carrying amounts of the Company's financial instruments, such as cash, accounts receivable, short-term loan receivable, accounts payable, accrued expenses, income tax payable and contract liabilities approximate fair values due to the short-term nature of these instruments.

***Advertising and Marketing Costs***

 ****

Advertising and marketing costs are expensed as incurred and are included in selling, general and administrative expenses in the Consolidated Statement of Operations. For the fiscal years ended March 31, 2025, and 2024, these costs were $189 and $82, respectively.

***Employee Benefits***

 ****

The Company contributes to government-mandated employee benefit programs in Japan, such as social insurance, health insurance, unemployment insurance, and employee pension insurance. These contributions are expensed as incurred.

***Commitments and Contingencies***

 ****

The Company recognizes contingent liabilities in accordance with ASC 450 *Contingencies* when a loss is probable and the amount can be reasonably estimated. If both conditions are met, a liability is recorded. If a loss is reasonably possible but not probable, or if the amount cannot be reasonably estimated, disclosure is made in the footnotes to the consolidated financial statements but no liability is recorded.

The Company also discloses commitments, such as future minimum payments under non-cancelable contracts, guarantees, and operating lease obligations. These are recognized as liabilities when incurred, or disclosed if not yet recognized.

***Income Taxes***

 

The Company accounts for income taxes under the asset and liability method in accordance with ASC Topic 740, *Income Taxes*, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements. Under this method, deferred tax assets and liabilities are determined on the differences between the financial statement and tax basis of assets, liabilities and net operating loss by using enacted tax rate in effect for the fiscal year in which the differences are expected to reverse. The effect of a change in tax rate on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

The Company recognizes deferred tax assets to the extent that these assets are believed to be more likely than not to be realized. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts that are more likely than not expected to be realized. In making such a determination, all available positive and negative evidence is considered, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations.

The Company files tax returns in the tax jurisdictions of Japan. Tax benefits for uncertain tax positions are based upon management's evaluation of the information available at the reporting date. To be recognized in the financial statements, a tax benefit must be at least more likely than not to be sustained based on technical merits. The benefit for positions meeting the recognition threshold is measured as the largest benefit more likely than not of being realized upon settlement with a taxing authority that has full knowledge of all relevant information.

***Net Income per Share***

 

Basic net income per common stock is calculated by dividing the net income by the weighted-average number of common stocks outstanding during the period, without consideration for potentially dilutive securities. Diluted net income per common stock is computed by dividing the net income by the weighted-average number of common stocks and potentially dilutive securities outstanding for the period determined using the treasury stock method.

***Recently Issued Accounting Pronouncements***

 

The following Accounting Standards Updates ("ASUs") were issued by the Financial Accounting Standards Board ("FASB") which relate to or could relate to the Company as concerns the Company's normal ongoing operations or the industry in which the Company operates.

In November 2024, the FASB issued ASU No. 2024-03 Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): *Disaggregation of Income Statement Expenses*. This ASU requires public business entities to disclose, for interim and annual reporting periods, additional information about certain income statement expense categories. The requirements are effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027. Entities are permitted to apply either the prospective or retrospective transition methods. The Company is currently evaluating the impact that the adoption of this ASU will have on its consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740): *Improvements to Income Tax Disclosures*. The standard requires entities to disclose specific categories in the rate reconciliation and to provide additional information for reconciling items that meet a quantitative threshold. It also requires entities to disclose certain information about income taxes paid and other disclosures related to income and income tax expense from continuing operations. The standard is effective for fiscal years beginning after December 15, 2024 for public business entities and for fiscal years beginning after December 15, 2025 for all other entities. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic *280*): *Improvements to Reportable Segment Disclosures* to update reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses and information used to assess segment performance. This update is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The adoption of this guidance did not have any impact on the Company's segment reporting.

In October 2023, the FASB issued ASU 2023-06, "Disclosure Improvements: Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative" ("ASU 2023-06"). This ASU incorporates certain SEC disclosure requirements into the FASB Accounting Standards Codification ("ASC"). The amendments in the ASU are expected to clarify or improve disclosure and presentation requirements of a variety of ASC Topics, allow users to more easily compare entities subject to the SEC's existing disclosures with those entities that were not previously subject to the requirements, and align the requirements in the ASC with the SEC's regulations. The ASU has an unusual effective date and transition requirements since it is contingent on future SEC rule setting. If the SEC fails to enact required changes by June 30, 2027, this ASU is not effective for any entities. Early adoption is not permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statement

**3. Business Combination and goodwill**

In August 2024, the Company completed the acquisition of 100% of the outstanding common stocks of Life Shine Co. Ltd. ("Line Shine"), a privately held company operating senior nursing homes, for the consideration of $901. The acquisition was accounted for using the acquisition method under ASC 805, *Business Combinations*. The result of operations of Life Shine has been included in the Company's consolidated financial statements since the acquisition date.

Goodwill recognized resulted from a substantial assembled workforce, which does not qualify for separate recognition, as well as expected future synergies from combining operations.

The following table summarizes the allocation of estimated fair value of net assets acquired and liabilities assumed:

---

| | |
|:---|:---|
| Accounts receivable, net | $126 |
| Prepaid expenses and other current assets | 13 |
| Property and equipment, net | 585 |
| Other assets | 12 |
| Accounts payable and accrued expenses | (61) |
| Other current liabilities | (10) |
| Borrowings | (269) |
| Total purchase price for acquisition, net of $314 of cash | (586) |

---

**4. Prepaid expenses and other currents assets**

As of March 31, 2025, and 2024, prepaid expenses and other current assets include the following components:

---

| | | |
|:---|:---|:---|
|  | **March 31,** | **March 31,** |
|  | 2025 | 2024 |
| Deferred costs | $560 | $— |
| Prepaid expenses | 222 | 75 |
| Advance payment | 98 | 3 |
| Deferred offering costs | 381 |  |
| Short-term investments | 374 |  |
| Other | 3 |  |
| Total prepaid expenses and other current assets | $1638 | $78 |

---

**5. Property and Equipment, Net**

As of March 31, 2025, and 2024, property and equipment, which include assets under finance lease, consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **March 31,** | **March 31,** |
|  | 2025 | 2024 |
| Buildings | $7478 | $— |
| Building fixtures | 3219 |  |
| Vehicles | 19 | 17 |
| Tools and Equipment | 11 | 1 |
| Computers | 16 | 9 |
| Leased asset | 26161 | 7955 |
| Leasehold improvement | 7 | 7 |
| Land | 3546 |  |
| Total property and equipment | 40457 | 7989 |
| Less: Accumulated depreciation | (1502) | (333) |
| Total property and equipment, net | $38955 | $7656 |

---

The Company recognized depreciation expenses on property and equipment of $1,140 and $326 during the fiscal years ended March 31, 2025, and 2024, respectively.

**6. Intangible Assets, Net**

The Company's intangible assets primarily consist of internally developed capitalized software. As of March 31, 2025, and 2024, the balance of the capitalized software was $713 and nil, respectively, which represent the capitalized amount under the application development stage as of the respective period end. The Company has performed impairment assessment and identified no triggering events or circumstances indicating that the carrying amount of the intangibles may be impaired and determined no impairment was necessary.

As of March 31, 2025, and 2024, intangible assets consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **March 31,** | **March 31,** |
|  | 2025 | 2024 |
| Software | $18 | $6 |
| Software under the application development stage | 713 |  |
| Total intangible assets | 731 | 6 |
| Less: Accumulated amortization | (5) | (2) |
| Total intangible assets, net | $726 | $4 |

---

The following table presents the expected amortization expense for the next five years:

---

| | |
|:---|:---|
| Fiscal year ending March 31, | Estimated amortization expense |
| 2026 | $3130 |
| 2027 | 3130 |
| 2028 | 3130 |
| 2029 | 2410 |
| 2030 | 790 |
| Total (2026 - 2030) | $3200 |

---

The Company recognized amortization expenses on intangible assets of $3 and $1 during the fiscal years ended March 31, 2025, and 2024, respectively.

**7*.* Leases**

As of March 31, 2025, and 2024, the following amounts were recorded in the Consolidated Balance Sheets relating to the Company's operating and finance leases.

---

| | | |
|:---|:---|:---|
|  | **March 31,** | **March 31,** |
|  | 2025 | 2024 |
| **Right-of-Use Assets** |  |  |
| Operating lease assets | $2483 | $889 |
| **Lease Liabilities** |  |  |
| Operating lease liabilities - Current | $1062 | $360 |
| Operating lease liabilities - Non-current | 1477 | 559 |
| Financing lease liabilities - Current | 740 | 287 |
| Financing lease liabilities - Non-current | 25044 | 7622 |

---

The following table illustrates information for the Company's operating and finance leases during the fiscal years ended March 31, 2025, and 2024:

---

| | | |
|:---|:---|:---|
|  | **March 31,** | **March 31,** |
|  | **2025** | **2024** |
| Operating leases; |  |  |
| Total operating lease cost | $424 | $218 |
| Cash paid for amounts included in the measurement of the operating lease liability | $450 | $227 |
| Weighted average remaining lease term (years) | 2.6 | 2.6 |
| Weighted average discount rate | 2.49% | 2.49% |
| Finance leases: |  |  |
| Amortization of right-of-use assets | 720 | 319 |
| Interest expenses | 394 | 169 |
| Total finance lease costs | 1114 | 488 |
| Weighted average remaining lease term (years) | 26.3 | 26.1 |
| Weighted average discount rate | 2.49% | 2.49% |

---

The following table summarizes the contractual maturities of operating and finance lease liabilities as of March 31, 2025:

---

| | |
|:---|:---|
| Fiscal year ending March 31, | Operating leases |
| 2026 | $1115 |
| 2027 | 1071 |
| 2028 | 170 |
| 2029 | 151 |
| 2030 | 102 |
| Thereafter | 21 |
| Total lease payments | 2630 |
| Less amounts representing interest | (91) |
| Present value of lease payments | 2539 |
| Less: current portion | (1062) |
| Non-current lease liabilities | $1477 |

---

---

| | |
|:---|:---|
| Fiscal year ending March 31, | Finance leases |
| 2026 | $1376 |
| 2027 | 1432 |
| 2028 | 1432 |
| 2029 | 1432 |
| 2030 | 1377 |
| Thereafter | 28147 |
| Total lease payments | 35196 |
| Less: amounts representing interest | (9410) |
| Present value of lease payments | 25786 |
| Less: current portion | (740) |
| Non-current lease liabilities | $25046 |

---

**8. Commitments and Contingencies**

***Guarantees and Commitments***

 ****

There were no commitments under certain purchase or guarantee arrangements as of March 31, 2025, and 2024.

 **

***Legal Matters***

 **

From time to time, in the normal course of business, the Company may be subject to various legal matters such as threatened or pending claims or proceedings. There were no such material matters as of March 31, 2025, and 2024.

***Indemnification***

 ****

In the ordinary course of business, the Company often includes standard indemnification provisions in its arrangements with third parties. To date, the Company has not paid any material claims or been required to defend any material actions related to its indemnification obligations. However, the Company may record charges in the future as a result of these indemnification obligations.

**9. Accounts payable and accrued expenses**

As of March 31, 2025, and 2024, Accounts payable and accrued expenses include the following components:

---

| | | |
|:---|:---|:---|
|  | **March 31,** | **March 31,** |
|  | **2025** | **2024** |
| Accounts payable | $3637 | $2201 |
| Salaries payable | 724 | 289 |
| Deferred rent | 404 |  |
| Accrued expenses | 176 | 47 |
| Other | 601 | 47 |
| &nbsp;&nbsp;&nbsp;Total Accounts payable and accrued expenses | $5542 | $2584 |

---

**10. Other current liabilities**

As of March 31, 2025, and 2024, other current liabilities include the following components:

---

| | | |
|:---|:---|:---|
|  | **March 31,** | **March 31,** |
|  | **2025** | **2024** |
| Accrued consumption taxes | $674 | $112 |
| Deposit received | 242 | 22 |
| Other | 103 | 45 |
| Total other current liabilities | $1019 | $179 |

---

**11. Borrowings**

Long-term borrowings as of March 31, 2025, and 2024 consisted of the following:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Interest rate** | | **Maturity** | **March 31, 2025** | **March 31, 2024** |
| Lender 1 | 2.03% | Fixed rate | December 26, 2028 | $278 | $349 |
| Lender 2 | 2.60% | Fixed rate | January 1, 2029 | 127 | 159 |
| Lender 3 | 1.90% | Variable rate | November 27, 2026 | 74 | 118 |
| Lender 3 | 1.40% | Fixed rate | September 27, 2027 | 160 | 221 |
| Lender 3 | 1.95% | Variable rate | June 27, 2029 | 454 |  |
| Lender 4 | 2.50% | Variable rate | August 31, 2059 | 10892 |  |
| Lender 4 | 2.70% | Variable rate | May 31, 2059 | 3616 |  |
| Lender 5 | 0.05% | Fixed rate | August 10, 2035 | 200 |  |
| Lender 6 | 0.70% | Fixed rate | August 2, 2026 | 55 | - |
| Total outstanding principal balance | Total outstanding principal balance | Total outstanding principal balance | Total outstanding principal balance | 15856 | 847 |
| Less: Unamortized debt issuance costs | Less: Unamortized debt issuance costs | Less: Unamortized debt issuance costs | Less: Unamortized debt issuance costs | (119) | - |
| Subtotal | Subtotal | Subtotal | Subtotal | 15737 | 847 |
| Less: Current portion | Less: Current portion | Less: Current portion | Less: Current portion | (632) | (214) |
| Long-term portion | Long-term portion | Long-term portion | Long-term portion | $15105 | $633 |

---

As of March 31, 2025, certain borrowings totaling $741 were guaranteed by the credit guarantee corporation. These guarantees provide credit enhancement and mitigate the risk of borrower default for the financial institution.

Under the terms of the guarantee agreement, the guarantee is in effect for the full term of the loan. The Company is required to pay a guarantee fee to the credit guarantee corporation, which is recognized as an expense over the life of the loan.

In the event of a default, the lender may recover principal and interest from the credit guarantee corporation, which would then seek reimbursement from the Company. While these borrowings are secured through credit guarantee corporation, the Company remains ultimately liable for repayment. As such, the guaranteed portion of the debt is not derecognized, and the full obligation is included in the Company's Consolidated Balance Sheet under current portion of long-term debt or non-current portion of long-term debt, as appropriate.

As of March 31, 2025, the Company had total borrowings of $15,737, of which $14,508 was secured by certain of the Company's assets.

As of March 31, 2025, future minimum payments for long-term loans are as follows:

**Fiscal year ending March 31,**

---

| | |
|:---|:---|
| 2026 | $632 |
| 2027 | 624 |
| 2028 | 547 |
| 2029 | 497 |
| 2030 | 342 |
| Thereafter | 13214 |
| Total | $15856 |

---

**12*.* Net Income per Share**

The following table sets forth the computation of basic and diluted net income per share:

---

| | | |
|:---|:---|:---|
|  | **Fiscal Year Ended March 31,** | **Fiscal Year Ended March 31,** |
|  | **2025** | **2024** |
| Basic and Diluted Net Income Per Common Share: |  |  |
| Net income attributable | $2387 | $530 |
| Weighted average common shares outstanding – basic and diluted | 20500000 | 20500000 |
| Net income per common share – basic and diluted | $0.12 | $0.03 |

---

**13. Income Taxes**

The component of profit before income taxes for the fiscal years ended March 31, 2025, and 2024 was as follow:

---

| | | |
|:---|:---|:---|
|  | **Fiscal Year Ended March 31,** | **Fiscal Year Ended March 31,** |
|  | **2025** | **2024** |
| Japan | $2387 | $530 |

---

The components of income tax expense for the fiscal years ended March 31, 2025 and 2024 were as follows:

---

| | | |
|:---|:---|:---|
|  | **Fiscal Year Ended March 31,** | **Fiscal Year Ended March 31,** |
|  | **2025** | **2024** |
| Current | $1295 | $306 |
| Deferred | (145) | (75) |
| Total | $1150 | $231 |

---

A reconciliation of income tax expense to the amount of income tax expense at the statutory rate in the Japan for the fiscal years ended March 31, 2025, and 2024 is as follows:

---

| | | |
|:---|:---|:---|
|  | **Fiscal Year Ended March 31,** | **Fiscal Year Ended March 31,** |
|  | **2025** | **2024** |
| Income tax benefit at the statutory rate | 34.0% | 34.0% |
| Increase (reduction) in taxes resulting from: |  |  |
| &nbsp;&nbsp;&nbsp;Non-deductible expenses | 0.0% | 2.6% |
| &nbsp;&nbsp;&nbsp;Utilization of net operating loss carryforwards | -0.9% | 0.0% |
| &nbsp;&nbsp;&nbsp;Tax credits | -5.9% | -5.0% |
| &nbsp;&nbsp;&nbsp;Permanent differences | 0.0% | -3.4% |
| &nbsp;&nbsp;&nbsp;Other | 3.0% | 2.6% |
| Income tax expense | 30.3% | 30.8% |

---

The tax effects of temporary differences that gave rise to a significant portion of the deferred tax assets and liabilities as of March 31, 2025, and 2024, were as follows:

---

| | | |
|:---|:---|:---|
|  | **March 31,** | **March 31,** |
|  | **2025** | **2024** |
| **Deferred tax assets:** |  |  |
| &nbsp;&nbsp;&nbsp;Lease liabilities | $9545 | $3003 |
| &nbsp;&nbsp;&nbsp;Net operating loss carry forwards | 47 |  |
| &nbsp;&nbsp;&nbsp;Accrued expenses and reserves | 51 | 16 |
| &nbsp;&nbsp;&nbsp;Other | 1 | 2 |
| Total deferred tax assets | 9644 | 3021 |
| **Deferred tax liabilities:** |  |  |
| &nbsp;&nbsp;&nbsp;Operating leases right-of-use assets | 845 | 1746 |
| &nbsp;&nbsp;&nbsp;Leased assets | 8464 | 1157 |
| &nbsp;&nbsp;&nbsp;Other | 23 |  |
| Total deferred tax liabilities | 9332 | 2903 |
| Less: Valuation allowance | (46) |  |
| Net deferred tax assets | $266 | $118 |

---

As of March 31, 2025 and 2024, the Company had a net operating loss ("NOL") carryforwards of $138 and nil, respectively.

The Company has evaluated the positive and negative evidence bearing upon the realizability of its net deferred tax assets. Due to the history of net losses of its subsidiary, Life Shine, Co. Ltd., and the difficulty in predicting future results, the Company concluded it was not more likely than not that the deferred tax assets recognized by Life Shine Co. Ltd. would be utilized. Accordingly, the Company recorded a partial valuation allowance against its deferred tax assets as of March 31, 2025. The Company intends to continue maintaining a partial valuation allowance on its deferred tax assets until there is sufficient evident to support the reversal of all or some portion of these allowances. The valuation allowance the Company recorded as of March 31, 2025 and 2024 was $46 and nil, respectively.

The net changes in the total valuation allowance for net deferred tax assets for the fiscal years ended March 31, 2025, and 2024 consist of the following:

---

| | | |
|:---|:---|:---|
|  | **Fiscal Year Ended March 31,** | **Fiscal Year Ended March 31,** |
|  | **2025** | **2024** |
| Valuation allowance at beginning of year | $— | $— |
| Additions (deductions) | 46 |  |
| Valuation allowance at end of year | $46 | $— |

---

Currently, there are no federal or state tax audits pending. The Company's corporate federal and state tax returns from the fiscal years ended March 31, 2023 to 2025 remain subject to examination by tax authorities.

At March 31, 2025, the Company did not have any unrecognized tax benefits and did not anticipate any significant changes to the unrecognized tax benefits within twelve months of this reporting date. In the fiscal year ended March 31, 2025, the Company recorded no interest and penalties on income taxes. As of March 31, 2025, there was no accrued interest included in income taxes payable.

**14. Stockholders' Equity**

**Preferred Stock**

As of March 31, 2025, the Company has authorized 20,000,000 shares of preferred stock with rights and preferences, including voting rights, to be designated from time to time by the board of directors. There were no shares of preferred stock issued or outstanding as of March 31, 2025.

**Common Stock** 

As of March 31, 2025, the Company has authorized 380,000,000 shares of common stock. Each holder of common stock shall be entitled to one vote for each share held as of the record date and shall be entitled to receive dividends, when, as and if declared by the stockholders' meeting or the Board of Directors. The total common stock issued and outstanding as of March 31, 2025, was 20,500,000 shares.

**15. Revenue**

<u>Disaggregation of Revenue</u>

The tables below reflect revenue by major source and timing of transfer of goods and services for the fiscal years ended March 31, 2025, and 2024. The Company had no revenue derived from geographical regions outside of Japan during the fiscal years ended March 31, 2025, and 2024.

---

| | | |
|:---|:---|:---|
|  | **Fiscal Year Ended March 31,** | **Fiscal Year Ended March 31,** |
|  | **2025** | **2024** |
| Construction real estate revenue – Constructing group homes (over-time) | $28849 | $12104 |
| Construction real estate revenue – Sales of real estate properties (at point in time) | 13056 | - |
| Welfare services revenue (over-time: straight-line basis over lease terms) | 7182 | 2596 |
| Other | - | 494 |
| Total | $49087 | $15194 |

---

---

| | | |
|:---|:---|:---|
|  | **Fiscal Year Ended March 31,** | **Fiscal Year Ended March 31,** |
|  | **2025** | **2024** |
| <u><u>Timing of transfer of goods and services</u></u> |  |  |
| Point in time | $13056 | $- |
| Over time | 36031 | 15194 |
| **Total** | $49087 | $15194 |

---

The following table summarizes the activity in contract liabilities during the fiscal years ended March 31, 2025 and 2024.

---

| | | |
|:---|:---|:---|
|  | **Fiscal Year Ended March 31,** | **Fiscal Year Ended March 31,** |
|  | **2025** | **2024** |
| Contract liabilities, beginning of period | $2586 | $439 |
| Contract liabilities, end of period | 6761 | 2586 |
| Revenue recognized in the period from amounts included in contract liabilities at the beginning of period | 2586 | 439 |

---

As of March 31, 2025, and 2024, contract liabilities represent advance payments received from customers for construction services that have not yet been performed. These advances will be recognized as revenue as the Company satisfies its performance obligations in completing the construction of group homes. The Company expects to recognize the associated revenue within the next 6 to 7 months, as the remaining construction work is completed. Revenue will be fully recognized upon the completion of the construction and transfer of the home to the customer.

As of March 31, 2025, and 2024, the Company has no contract assets, as all costs incurred to date for ongoing construction projects have been billed to customers. Revenue has been recognized using the cost-to-cost method, reflecting the progress of construction. Since all costs incurred to date have been billed, no contract assets exist, as there are no amounts due from customers for services already performed.

The Company had unsatisfied or partially unsatisfied performance obligations under construction services representing approximately $7,475 in aggregate transaction price as of March 31, 2025. The Company expects to earn revenue as it satisfies the performance obligations under those contracts in the amount of approximately $7,475 during the fiscal year ending March 31, 2026.

Because the Company operates solely as a construction service provider and does not engage in the sale of group homes it constructs, it does not hold any inventory of group homes at the end of the reporting period. Revenue is recognized exclusively for services performed, and no group homes are maintained for resale.

**16. Cost of Revenue**

<u>Disaggregation of Cost of revenue</u>

The table below reflects cost of revenue by major source for the fiscal years ended March 31, 2025, and 2024.

---

| | | |
|:---|:---|:---|
|  | **Fiscal Year Ended March 31,** | **Fiscal Year Ended March 31,** |
|  | **2025** | **2024** |
| Construction real estate revenue – Constructing group homes | $18606 | $9160 |
| Construction real estate revenue – Sales of real estate properties | 9334 |  |
| Welfare services revenue | 8510 | 2230 |
| Total | $36450 | $11390 |

---

**17. Segment Information**

The Company operates as a single reportable segment. The chief operating decision maker reviews financial performance and allocates resources on a consolidated basis, using a single measure of operating profit and a total expense amount. No disaggregated expense categories are regularly reviewed by the CODM. As such, the Company has not identified any segment expense categories that meet the criteria for disclosure under ASC 280, as amended by ASU 2023-07.

**18. Related Party**

The related parties that had material balances and transactions as of and for the fiscal years ended March 31, 2025, and 2024 consist of the following:

---

| | |
|:---|:---|
| Name of Related Parties | Nature of Relationship at March 31, 2025 |
| Minaterrace Inc. | A company controlled by Tatsuma Yoshida, the CEO and the principal stockholder of the Company |
| at A&C Inc. | A company controlled by Yoshihito Arita, the director of the Company |
| Tasukeai General Incorporated Association | A company that is controlled by Minako Osawa, the director of the Company |

---

The Company had the following related party balances as of March 31, 2025, and 2024:

---

| | | | |
|:---|:---|:---|:---|
|  | | **March 31,** | **March 31,** |
|  | <br>Nature of transactions | **2025** | **2024** |
| **Payable due to related parties:** |  |  |  |
| at A&C Inc. | Payable related to outsourcing expenses | $37 | $— |
| Tasukeai General Incorporated Association | Payable related to outsourcing expenses | 39 | 13 |

---

The Company had the following related party transactions for the fiscal years ended March 31, 2025, and 2024:

---

| | | | |
|:---|:---|:---|:---|
|  | | **Fiscal Year Ended March 31,** | **Fiscal Year Ended March 31,** |
|  | <br>Nature of transactions | **2025** | **2024** |
| **Selling, General and Administrative Expenses with related parties:** |  |  |  |
| at A&C Inc. | Outsourcing expenses | $212 | $— |
| Minaterrace Inc. | Outsourcing expenses | 21 | 114 |
| Tasukeai General Incorporated Association | Outsourcing expenses | 171 | 137 |

---

Compensation for directors is determined by the Board of Directors and/or shareholders in accordance with the Company's Articles of Incorporation. Total compensation paid to directors during the fiscal years ended March 31, 2025, and 2024 were $157 and $91, respectively.

**19. Subsequent Events**

The Company has evaluated subsequent events after the consolidated balance sheet date through July 29, 2025, the date the consolidated financial statements were available for issuance. Management has determined that no significant events or transactions have occurred subsequent to the consolidated balance sheet date that require both recognition and disclosure in the consolidated financial statements, except those disclosed below.

On April 30, 2025, the Company entered into a new loan agreement with the existing lender for the amount of $8,672 with a maturity date of April 30, 2060. The loan bears interest rate of 2.8% per annum and is secured by certain assets of the Company.

On July 3, 2025, the Company entered into a new loan agreement with the existing lender for the amount of $10,841 with a maturity date of June 30, 2060. The loan bears interest rate of 3.3% per annum and is secured by certain assets of the Company.

**[●] Shares of Common Stock**

![](forms-1_001.jpg)

**AMATUHI HOLDINGS, INC.**

**PRELIMINARY PROSPECTUS**

*Sole Underwriter*

**Spartan Capital Securities, LLC**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2026

Through and including , 2025 (the 25<sup>th</sup> day after the date of this offering), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer's obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

**Part II**

**INFORMATION NOT REQUIRED IN PROSPECTUS**

**Item 13. Other Expenses of Issuance and Distribution.**

The following table indicates the expenses to be incurred in connection with this offering described in this registration statement, other than underwriting discounts and commissions, all of which will be paid by us. All amounts are estimated except the SEC registration fee, the Financial Industry Regulatory Authority, Inc. ("FINRA"), filing fee and the Nasdaq Global listing fee.

---

| | |
|:---|:---|
| **Description** | **Amount** |
| U.S. Securities and Exchange Commission registration fee | $2382 |
| Financial Industry Regulatory Authority filing fee | 3500 |
| The Nasdaq Capital Market listing fee | 50000 |
| Accounting fees and expenses | 200000 |
| Legal fees and expenses | 75000 |
| Roadshow expenses\* | 25000 |
| Underwriter Expenses\* | 100000 |
| Printing expenses\* | 10000 |
| Non-accountable expenses\* | 50000 |
| Miscellaneous\* | 15000 |
| **Total** | $530882 |

---

\*Estimated expenses.

**Item 14. Indemnification of Directors and Officers.**

Section 145 of the General Corporation Law of the State of Delaware provides that a corporation may indemnify directors and officers as well as other employees and individuals against expenses, including attorneys' fees, judgments, fines and amounts paid in settlement in connection with specified actions, suits and proceedings whether civil, criminal, administrative, or investigative, other than a derivative action by or in the right of the corporation, if they acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe their conduct was unlawful. A similar standard is applicable in the case of derivative actions, except that indemnification extends only to expenses, including attorneys' fees, incurred in connection with the defense or settlement of such action and the statute requires court approval before there can be any indemnification where the person seeking indemnification has been found liable to the corporation. The statute provides that it is not exclusive of other indemnification that may be granted by a corporation's certificate of incorporation, bylaws, disinterested director vote, stockholder vote, agreement or otherwise.

Our certificate of incorporation provides that our officers and directors will be indemnified by us to the fullest extent authorized by Delaware law, as it now exists or may in the future be amended. In addition, our certificate of incorporation provides that our directors will not be personally liable for monetary damages to us for breaches of their fiduciary duty as directors, except to the extent such exemption from liability or limitation thereof is not permitted by the General Corporation Law of the State of Delaware.

We intend to enter into separate indemnification agreements with our directors and officers. Each indemnification agreement will provide, among other things, for indemnification to the fullest extent permitted by law and our amended and restated certificate of incorporation and bylaws against any and all expenses, judgments, fines, penalties and amounts paid in settlement of any claim. The indemnification agreements will provide for the advancement or payment of all expenses to the indemnitee and for reimbursement to us if it is found that such indemnitee is not entitled to such indemnification under applicable law and our certificate of incorporation and bylaws.

Our certificate of incorporation also permits us to maintain insurance on behalf of any officer, director or employee for any liability arising out of his or her actions, regardless of whether Delaware law would permit such indemnification. We intend to purchase a policy of directors' and officers' liability insurance that insures our officers and directors against the cost of defense, settlement or payment of a judgment in some circumstances and insures us against our obligations to indemnify our officers and directors.

These provisions may discourage stockholders from bringing a lawsuit against our directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against officers and directors, even though such an action, if successful, might otherwise benefit us and our stockholders. Furthermore, a stockholder's investment may be adversely affected to the extent we pay the costs of settlement and damage awards against officers and directors pursuant to these indemnification provisions.

We believe that these provisions and the insurance are necessary to attract and retain talented and experienced officers and directors.

Any repeal or amendment of provisions of our certificate of incorporation affecting indemnification rights, whether by our Board of Directors, stockholders or by changes in applicable law, or the adoption of any other provisions inconsistent therewith, will (unless otherwise required by law) be prospective only, except to the extent such amendment or change in law permits us to provide broader indemnification rights on a retroactive basis, and will not in any way diminish or adversely affect any right or protection existing thereunder with respect to any act or omission occurring prior to such repeal or amendment or adoption of such inconsistent provision.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers, and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment of expenses incurred or paid by a director, officer or controlling person in a successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to the court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

**Item 15. Recent Sales of Unregistered Securities.**

Set forth below is information regarding unregistered securities issued by us since June 24, 2025:

On June 24, 2025, we issued five common shares to our founders. On July 22, 2025, pursuant to the terms of a Reorganization Agreement and Plan of Share Exchange between AMATUHI HOLDINGS, Inc and the shareholders of AMATUHI Inc. a Japanese entity, we issued 4,100 shares of AMATUHI HOLDINGS, Inc. common stock to the shareholders of AMATUHI Inc. in exchange for all outstanding shares of common stock of the shareholders., which holds 100% of the issued and outstanding capital stock. The originally issued five common shares were subsequently cancelled.

***Forward Stock Split***

On August 6, 2025, the Company announced its decision to forward stock split its common shares on a 5000:1 basis. One hundred percent of the shareholders granted approval for the 1:5,000 reverse stock split at a general meeting on August 6, 2025, where par value $0.000001 remained unchanged. The forward stock split increased the current issued and outstanding Common Stock from 4,100 shares to 20,500,000 shares, par value $0.000001. As the stock split applies equally to all shareholders, individual shareholdings will be increased in the same ratio as the total number of shares. Accordingly, the stock split will have no material effect on the percentage interest of each individual shareholder. All other equity securities of the Company will be adjusted accordingly.

**Item 16. Exhibits and Financial Statement Schedules.**

(a) Exhibits.

---

| | | |
|:---|:---|:---|
| **Exhibit**<br> **Number** | **Description of Exhibit** | **Filed and Incorporated by Reference Herein:** |
| 1.1\* | [Form of Underwriter Agreement](ex1-1.htm) |  |
| 2.1 | [Share Exchange Agreement](https://www.sec.gov/Archives/edgar/data/2078570/000149315225013334/ex2-1.htm) | Exhibit 2.1 to Form S-1 filed on Sept 15, 2025 |
| 3.1 | [Articles of Incorporation, filed with the Secretary of State of Delaware](https://www.sec.gov/Archives/edgar/data/2078570/000149315225013334/ex3-1.htm) | Exhibit 3.1 to Form S-1 filed on Sept 15, 2025 |
| 3.2\*\*\* | [Amended Articles of Incorporation](https://www.sec.gov/Archives/edgar/data/2078570/000149315225013334/ex3-2.htm) | Exhibit 3.2 to Form S-1 filed on Sept 15, 2025 |
| 3.3 | [Certificate of Ownership and Merger](https://www.sec.gov/Archives/edgar/data/2078570/000149315225013334/ex3-3.htm) | Exhibit 3.3 to Form S-1 filed on Sept 15, 2025 |
| 3.4 | [Bylaws in effect](https://www.sec.gov/Archives/edgar/data/2078570/000149315225013334/ex3-4.htm) | Exhibit 3.4 to Form S-1 filed on Sept 15, 2025 |
| 5.1 | [Opinion of Legal Counsel](https://www.sec.gov/Archives/edgar/data/2078570/000149315225013334/ex5-1.htm) | Exhibit 5.1 to Form S-1 filed on Sept 15, 2025 |
| 5.2\*\*\* | [Opinion of Legal Counsel](https://www.sec.gov/Archives/edgar/data/2078570/000149315226005519/ex5-2.htm) |  |
| 10.1 | [Form of Indemnification Agreement between the Resistant and its directors](https://www.sec.gov/Archives/edgar/data/2078570/000149315225026267/ex10-1.htm) | Exhibit 10.1 to Form S-1 filed on December 5, 2025 |
| 21.1 | [List of Subsidiaries of Amatuhi Holdings, Inc.](https://www.sec.gov/Archives/edgar/data/2078570/000149315225026267/ex21-1.htm) | Exhibit 21.1 to Form S-1 filed on December 5, 2025 |
| 23.1 | [Consent of Independent Registered Public Accounting Firm](https://www.sec.gov/Archives/edgar/data/2078570/000149315225013334/ex23-1.htm) | Exhibit 23.1 to Form S-1 filed on Sept 15, 2025 |
| 23.2 | [Consent of Law Offices of T. J. Jesky (included in Exhibit 5.1)](https://www.sec.gov/Archives/edgar/data/2078570/000149315225013334/ex5-1.htm) | Exhibit 23.2 to Form S-1 filed on Sept 15, 2025 |
| 23.3 | [Consent of Independent Registered Public Accounting Firm](https://www.sec.gov/Archives/edgar/data/2078570/000149315225027615/ex23-3.htm) | Exhibit 23.3 to Form S-1 filed on Dec. 15, 2025 |
| 23.4\*\*\* | [Consent of Independent Registered Public Accounting Firm](https://www.sec.gov/Archives/edgar/data/2078570/000149315226005519/ex23-4.htm) |  |
| 23.5 | [Consent of Law Offices of T. J. Jesky (included in Exhibit 5.1)](https://www.sec.gov/Archives/edgar/data/2078570/000149315225013334/ex5-1.htm) | Exhibit 23.2 to Form S-1 filed on Sept 15, 2025 |
| 23.6\*\*\* | [Consent of Law Offices of T. J. Jesky (included in Exhibit 5.2)](https://www.sec.gov/Archives/edgar/data/2078570/000149315226005519/ex5-2.htm) |  |
| 24.1 | [Power of Attorney (included on signature page)](https://www.sec.gov/Archives/edgar/data/2078570/000149315225013334/forms-1.htm#z_001) | Exhibit 24.1 to Form S-1 filed on Sept 15, 2025 |
| 107\*\*\* | [Filing Fee Table](https://www.sec.gov/Archives/edgar/data/2078570/000149315226005519/ex107.htm) |  |

---

\* Filed herewith. <br> \*\* To be filed by amendment <br> \*\*\* previously filed

(b) Financial Statement Schedules. Schedules not listed above have been omitted because the information required to be set forth therein is not applicable or is shown in the financial statements or notes thereto.

**Item 17. Undertakings.**

The undersigned registrant hereby undertakes as follows, pursuant to Item 512 of Regulation S-K:

1. To file, during any period in which offers or sales of the registered securities are being made, a post-effective amendment to this registration statement:

i. to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

ii. to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price set represent no more than 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement, and

iii. to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

2. That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

3. To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

4. That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

5. That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

i. Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

ii. Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

iii. The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

iv. Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

6. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

The undersigned registrant hereby undertakes as follows, pursuant to Item 512 of Regulation S-K:

1. To file, during any period in which offers or sales of the registered securities are being made, a post-effective amendment to this registration statement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price set represent no more than 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

2. That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

3. To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

4. That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

5. That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iv. Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

6. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

***Undertakings Required by Regulation S-K, Item 512(i)***

That, for purposes of determining any liability under the Securities Act:

(i) the information omitted from the form of prospectus filed as part of the registration statement in reliance upon Rule 430A and contained in the form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of the registration statement as of the time it was declared effective; and

(ii) each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

**SIGNATURES**

Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement on Form S-1/A to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Yokohama, Japan, on this February 6, 2026.

---

| | |
|:---|:---|
| **AMATUHI HOLDINGS, INC.** | **AMATUHI HOLDINGS, INC.** |
| By: | */s/ Tatsuma Yoshida* |
|  | Tatsuma Yoshida |
|  | Chief Executive Officer and Director |

---

**Power of Attorney**

Pursuant to the requirements of the Securities Act of 1933, this registration statement on Form S-1 has been signed by the following persons in the capacities held on the dates indicated.

---

| | | |
|:---|:---|:---|
| **Signature** | **Title** | **Date** |
| */s/ Tatsuma Yoshida* | Chief Executive Officer and | February 6, 2026 |
| Tatsuma Yoshida | Director (principal executive officer) |  |
| \* | Chief Administrative Officer, Executive |  |
| /s/ Yoshihito Artia | Chief Financial Officer, Principal Accounting Officer | February 6, 2026 |
| Yoshihito Arita | and Director, Principal Financial Officer |  |
| /s/ Chika Kawazoe | Independent Director | February 6, 2026 |
| Chika Kawazoe |  |  |

---

---

| | |
|:---|:---|
| By: | */s/ Tatsuma Yoshida* |
|  | Tatsuma Yoshida |
|  | Attorney-in-fact\* |

---

## Exhibit 1.1

**Exhibit 1.1**

**UNDERWRITING AGREEMENT**

[●], 2025

Spartan Capital Securities, LLC

45 Broadway, 19<sup>th</sup> Floor

New York, NY 10006

*As Representative of the several Underwriters<br> named on Schedule 1 attached hereto*

Ladies and Gentlemen:

The undersigned, **Amatuhi Holdings, Inc**., a Delaware corporation (the "**Company**"), hereby confirms its agreement (this "**Agreement**") with Spartan Capital Securities, LLC (hereinafter referred to as "you" (including its correlatives) or the "**Representative**") and with the other underwriters named on <u>Schedule 1</u> hereto for which the Representative is acting as representative (the Representative and such other underwriters being collectively called the "**Underwriters**" or, individually, an "**Underwriter**") as follows:

1. <u>Purchase and Sale of Shares</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1 *<u>Firm Shares</u>.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1.1. <u>Nature and Purchase of Firm Shares</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) On the basis of the representations and warranties herein contained, but subject to the terms and conditions herein set forth, the Company agrees to sell in the aggregate [●] shares of common stock of the Company, par value $0.000001 per share (the "**Common Stock**"), and the Underwriters agree to purchase, severally and not jointly, at the Closing, an aggregate of [●] shares ("**Firm Shares**" or "**Shares**") of the Common Stock. The offering and sale of the Shares is herein referred to as the "**Offering**."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The Firm Shares are to be offered together to the public at the offering price per one Firm Share as set forth on <u>Schedule 2-A</u> hereto (the "**Purchase Price**"). The Underwriters, severally and not jointly, agree to purchase from the Company the number of Firm Shares set forth opposite their respective names on <u>Schedule 1</u> attached hereto and made a part hereof at the purchase price for one Firm Share of $[●] (or 92% of the Purchase Price) (or $[●] (or 95% of the Purchase Price) with respect to certain introduced investors as mutually determined by the Company and the Representative).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1.2. <u>Firm Shares Payment and Delivery</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Delivery and payment for the Firm Shares shall be made on or before 1:00 p.m., Eastern time, on the first (1<sup>st</sup>) Business Day following the effective date (the "**Effective Date**") of the Registration Statement (as defined in <u>Section 2.1.1</u> below) (or the second (2<sup>nd</sup>) Business Day following the Effective Date if the Registration Statement is declared effective after 4:01 p.m., Eastern time) or at such earlier time as shall be agreed upon by the Representative and the Company, at the offices of ArentFox Schiff LLP at 1717 K Street, NW, Washington, DC 20006 ("**Representative's Counsel**"), or at such other place (or remotely by facsimile or other electronic transmission) as shall be agreed upon by the Representative and the Company. The hour and date of delivery and payment for the Firm Shares is called the "**Closing Date**."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Payment for the Firm Shares shall be made on the Closing Date by wire transfer in federal dollars (same day) funds in U.S. dollars, payable to the order of the Company upon delivery of the certificates (in form and substance satisfactory to the Underwriters) representing the Firm Shares (or through the facilities of the Depository Trust Company ("**DTC**")) for the account of the Underwriters. The Firm Shares shall be registered in such name or names and in such authorized denominations as the Representative may request in writing prior to the Closing Date. The Company shall not be obligated to sell or deliver the Firm Shares except upon tender of payment by the Representative for all of the Firm Shares. The term "**Business Day**" means any day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions are authorized or obligated by law to close in New York, New York.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2. *<u>Over-allotment Option</u>.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2.1. <u>Option Shares</u>. For the purposes of covering any over-allotments in connection with the distribution and sale of the Firm Shares, the Company hereby grants to the Underwriters an option (the "**Over-allotment Option**") to purchase, in the aggregate, up to [●] additional shares of the Common Stock (the "**Option Shares**", and along with the Firm Shares, the "**Shares**"), representing fifteen percent (15%) of the Firm Shares sold in the offering, from the Company. The purchase price to be paid per Option Share shall be equal to the price per Option Share set forth in <u>Schedule 2-A</u>. The Shares shall be issued directly by the Company and shall have the rights and privileges described in the Registration Statement, the Pricing Disclosure Package and the Prospectus referred to below. The offering and sale of the Shares is herein referred to as the "**Offering**."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2.2. <u>Exercise of Option</u>. The Over-allotment Option granted pursuant to <u>Section 1.2.1</u> hereof may be exercised by the Representative as to all or any part of the Option Shares, in whole or in part from time to time, within forty-five (45) days after the Effective Date. The Underwriters shall not be under any obligation to purchase any of the Option Shares prior to the exercise of the Over-allotment Option. The Over-allotment Option granted hereby may be exercised by the giving of written or oral notice to the Company from the Representative, setting forth the number of the Option Shares to be purchased and the date and time for delivery of and payment for the Option Shares (the "**Option Closing Date**"), which shall not be later than five (5) full Business Days after the date of the notice or such other time as shall be agreed upon by the Company and the Representative, at the offices of Representative's Counsel or at such other place (including remotely by facsimile or other electronic transmission) as shall be agreed upon by the Company and the Representative. If such delivery and payment for the Option Shares does not occur on the Closing Date, the Option Closing Date will be as set forth in the notice. Upon exercise of the Over-allotment Option with respect to all or any portion of the Option Shares subject to the terms and conditions set forth herein, (i) the Company shall become obligated to sell to the Underwriters the number of the Option Shares specified in such notice and (ii) each of the Underwriters, acting severally and not jointly, shall purchase that portion of the total number of the Option Shares then being purchased as set forth in <u>Schedule 1</u> opposite the name of such Underwriter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2.3. <u>Payment and Delivery</u>. Payment for the Option Shares shall be made on the Option Closing Date by wire transfer in Federal (same day) funds, payable to the order of the Company upon delivery to the Representative of certificates (in form and substance satisfactory to the Underwriters) representing the Option Shares (or through the facilities of DTC or via DWAC transfer) for the account of the Underwriters. The Option Shares shall be registered in such name or names and in such authorized denominations as the Representative may request in writing prior to the Option Closing Date. The Company shall not be obligated to sell or deliver the Option Shares except upon tender of payment by the Representative for applicable Option Shares. The Option Closing Date may be simultaneous with, but not earlier than, the Closing Date; and in the event that such time and date are simultaneous with the Closing Date, the term "Closing Date" shall refer to the time and date of delivery of the Firm Shares and Option Shares.

2. <u>Representations and Warranties of the Company</u>. The Company represents and warrants to the Underwriters as of the Applicable Time (as defined below), as of the Closing Date and as of the Option Closing Date, if any, as follows:

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.1. <u>Filing of Registration Statement</u>.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1.1. <u>Pursuant to the Securities Act</u>. The Company has filed with the U.S. Securities and Exchange Commission (the "**Commission**") a registration statement, and amendments thereto, on Form S-1 (File No. 333-290245), including any related prospectus or prospectuses, for the registration of the Shares under the Securities Act of 1933, as amended (the "**Securities Act**"), which registration statement and amendment or amendments have been prepared by the Company in all material respects in conformity with the requirements of the Securities Act and the rules and regulations of the Commission under the Securities Act (the "**Securities Act Regulations**") and will contain all material statements that are required to be stated therein in accordance with the Securities Act and the Securities Act Regulations. Except as the context may otherwise require, such registration statement, as amended, on file with the Commission at the time the registration statement became effective (including the Preliminary Prospectus included in the registration statement, financial statements, schedules, exhibits and all other documents filed as a part thereof and all information deemed to be a part thereof as of the Effective Date pursuant to paragraph (b) of Rule 430A of the Securities Act Regulations (the "**Rule 430A Information**")), is referred to herein as the "**Registration Statement**." If the Company files any registration statement pursuant to Rule 462(b) of the Securities Act Regulations, then after such filing, the term "**Registration Statement**" shall include such registration statement filed pursuant to Rule 462(b) of the Securities Act Regulations. The Registration Statement has been declared effective by the Commission on the date hereof.

Each prospectus used prior to the effectiveness of the Registration Statement, and each prospectus that omitted the Rule 430A Information that was used after such effectiveness and prior to the execution and delivery of this Agreement, is herein called a "**Preliminary Prospectus**." The Preliminary Prospectus, subject to completion, dated [●], that was included in the Registration Statement immediately prior to the Applicable Time is hereinafter called the "**Pricing Prospectus**." The final prospectus in the form first furnished to the Underwriters for use in the Offering is hereinafter called the "**Prospectus**." Any reference to the "**most recent Preliminary Prospectus**" shall be deemed to refer to the latest Preliminary Prospectus included in the Registration Statement.

"**Applicable Time**" means [●] p.m., Eastern time, on the date of this Agreement.

"**Issuer Free Writing Prospectus**" means any "issuer free writing prospectus," as defined in Rule 433 of the Securities Act Regulations ("**Rule 433**"), including without limitation any "free writing prospectus" (as defined in Rule 405 of the Securities Act Regulations) relating to the Shares that is (i) required to be filed with the Commission by the Company, (ii) a "road show that is a written communication" within the meaning of Rule 433(d)(8)(i), whether or not required to be filed with the Commission, or (iii) exempt from filing with the Commission pursuant to Rule 433(d)(5)(i) because it contains a description of the Shares or of the Offering that does not reflect the final terms, in each case in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company's records pursuant to Rule 433(g).

"**Issuer General Use Free Writing Prospectus**" means any Issuer Free Writing Prospectus that is intended for general distribution to prospective investors (other than a "*bona fide* electronic road show," as defined in Rule 433 (the "**Bona Fide Electronic Road Show**")), as evidenced by its being specified in <u>Schedule 2-B</u> hereto.

"**Issuer Limited Use Free Writing Prospectus**" means any Issuer Free Writing Prospectus that is not an Issuer General Use Free Writing Prospectus.

"**Pricing Disclosure Package**" means any Issuer General Use Free Writing Prospectus issued at or prior to the Applicable Time, the Pricing Prospectus and the information included on <u>Schedule 2-A</u> hereto, all considered together.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1.2. <u>Pursuant to the Exchange Act</u>. The Company has filed with the Commission a Form 8-A (File Number 001- [●]) providing for the registration pursuant to Section 12(b) under the Securities Exchange Act of 1934, as amended (the "**Exchange Act**"), of the Common Stock. The registration of the Common Stock under the Exchange Act has become effective on or prior to the date hereof. The Company has taken no action designed to, or likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act, nor has the Company received any notification that the Commission is contemplating terminating such registration.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.2. <u>Share Exchange Listing</u>.* The Shares have been approved for listing on the Nasdaq Capital Market (the "**Exchange**"), subject to official notice of issuance, and the Company has taken no action designed to, or likely to have the effect of, delisting of the Shares from the Exchange, nor has the Company received any written notification that the Exchange is contemplating terminating such listing.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.3. <u>No Stop Orders, etc</u>.* Neither the Commission nor, to the Company's knowledge, any state regulatory authority has issued any written order preventing or suspending the use of the Registration Statement, any Preliminary Prospectus or the Prospectus or has instituted or, to the Company's knowledge, threatened to institute, any proceedings with respect to such an order. The Company has complied with each request (if any) from the Commission for additional information.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.4. <u>Disclosures in Registration Statement</u>.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4.1. <u>Compliance with Securities Act and 10b-5 Representation</u>. The Company represents and warrants the following to the Representative:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Each of the Registration Statement and any post-effective amendment thereto, at the time it became effective, complied in all material respects with the requirements of the Securities Act and the Securities Act Regulations. Each Preliminary Prospectus, including the prospectus filed as part of the Registration Statement as originally filed or as part of any amendment or supplement thereto, and the Prospectus, at the time each was filed with the Commission, complied in all material respects with the requirements of the Securities Act and the Securities Act Regulations. Each Preliminary Prospectus delivered to the Underwriters for use in connection with this Offering and the Prospectus was or will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Neither the Registration Statement nor any amendment thereto, at its effective time, as of the Applicable Time, at the Closing Date or at any Option Closing Date (if any), contained, contains or will contain an untrue statement of a material fact or omitted, omits or will omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The Pricing Disclosure Package, as of the Applicable Time, at the Closing Date or at any Option Closing Date (if any), did not, does not and will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and each Issuer Limited Use Free Writing Prospectus, if any, does not conflict with the information contained in the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, and each such Issuer Limited Use Free Writing Prospectus, if any, as supplemented by and taken together with the Pricing Prospectus as of the Applicable Time, did not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; *provided*, *however*, that this representation and warranty shall not apply to statements made in reliance upon and in conformity with written information furnished to the Company in writing with respect to the Underwriters by the Representative expressly for use in the Registration Statement, the Pricing Prospectus or the Prospectus or any amendment thereof or supplement thereto. The parties acknowledge and agree that such information provided by or on behalf of any Underwriter consists solely of the information in the table set forth in the second paragraph of the "Underwriting" section and the disclosure contained in the "Underwriting" subsections "- Discounts and Commissions" of the Prospectus (the "**Underwriters' Information**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) Neither the Prospectus nor any amendment or supplement thereto (including any prospectus wrapper), as of its issue date, at the time of any filing with the Commission pursuant to Rule 424(b) of the Securities Act Regulations, at the Closing Date or at any Option Closing Date (if any), included, includes or will include an untrue statement of a material fact or omitted, omits or will omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; *provided*, *however*, that this representation and warranty shall not apply to the Underwriters' Information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4.2. <u>Disclosure of Agreements</u>. The agreements and documents described in the Registration Statement, the Pricing Disclosure Package and the Prospectus conform in all material respects to the descriptions thereof contained therein and there are no agreements or other documents required by the Securities Act and the Securities Act Regulations to be described in the Registration Statement, the Pricing Disclosure Package and the Prospectus or to be filed with the Commission as exhibits to the Registration Statement, that have not been so described or filed. Each agreement or other instrument (however characterized or described) to which the Company is a party or by which it is or may be bound or affected and (i) that is referred to in the Registration Statement, the Pricing Disclosure Package and the Prospectus, or (ii) is material to the Company's business, has been duly authorized and validly executed by the Company, is in full force and effect in all material respects and is enforceable against the Company and, to the Company's knowledge, the other parties thereto, in accordance with its terms, except (x) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally, (y) as enforceability of any indemnification or contribution provision may be limited under the federal and state securities laws, and (z) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought. None of such agreements or instruments has been assigned by the Company, and neither the Company nor, to the Company's knowledge, any other party is in default thereunder and, to the Company's knowledge, no event has occurred that, with the lapse of time or the giving of notice, or both, would constitute a default thereunder, except for any default or event which would not reasonably be expected to result in a Material Adverse Change (as defined below). To the Company's knowledge, performance by the Company of the material provisions of such agreements or instruments will not result in a violation of any existing applicable law, rule, regulation, judgment, order or decree of any governmental agency or court, domestic or foreign, having jurisdiction over the Company or any of its assets or businesses (each, a "**Governmental Entity**"), including, without limitation, those relating to environmental laws and regulations, except for any violation which would not reasonably be expected to result in a Material Adverse Change (as defined below).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4.3. <u>Prior Securities Transactions</u>. No securities of the Company have been sold by the Company or by or on behalf of, or for the benefit of, any person or persons controlling, controlled by or under common control with the Company, except as disclosed in the Registration Statement, the Pricing Disclosure Package and the Preliminary Prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4.4. <u>Regulations</u>. The disclosures in the Registration Statement, the Pricing Disclosure Package and the Prospectus concerning the effects of federal, state, local and all foreign regulation on the Offering and the Company's business as currently contemplated are correct in all material respects and no other such regulations are required to be disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus which are not so disclosed

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.5. <u>Changes after Dates in Registration Statement</u>.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5.1. <u>No Material Adverse Change</u>. Since the respective dates as of which information is given in the Registration Statement, the Pricing Disclosure Package and the Prospectus, except as otherwise specifically stated therein: (i) there has been no material adverse change in the financial position or results of operations of the Company or its Subsidiaries taken as a whole, nor any change or development that, singularly or in the aggregate, would involve a material adverse change in or affecting the condition (financial or otherwise), results of operations, business, or assets of the Company or its Subsidiaries taken as a whole (a "**Material Adverse Change**"); (ii) there have been no material transactions entered into by the Company or its Subsidiaries, other than as contemplated pursuant to this Agreement; and (iii) no officer or director of the Company has resigned from any position with the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5.2. <u>Recent Securities Transactions, etc</u>. Subsequent to the respective dates as of which information is given in the Registration Statement, the Pricing Disclosure Package and the Prospectus, and except as may otherwise be indicated or contemplated herein or disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company has not: (i) issued any securities or incurred any liability or obligation, direct or contingent, for borrowed money; or (ii) declared or paid any dividend or made any other distribution on or in respect to its capital stock.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.6. <u>Independent Accountants</u>*. To the knowledge of the Company, Assentsure PAC ("**Auditor**"), whose report is filed with the Commission as part of the Registration Statement, the Pricing Disclosure Package and the Prospectus, is an independent registered public accounting firm as required by the Securities Act and the Securities Act Regulations and the Public Company Accounting Oversight Board. The Auditor has not, during the periods covered by the financial statements included in the Registration Statement, the Pricing Disclosure Package and the Prospectus, provided to the Company any non-audit services, as such term is used in Section 10A(g) of the Exchange Act.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.7. <u>Financial Statements, etc</u>.* The financial statements, including the notes thereto and supporting schedules, if any, included in the Registration Statement, the Pricing Disclosure Package and the Prospectus, fairly present in all material respects the financial position and the results of operations of the Company at the dates and for the periods to which they apply; and such financial statements have been prepared in conformity with U.S. generally accepted accounting principles ("**GAAP**"), consistently applied throughout the periods involved (provided that unaudited interim financial statements are subject to year-end audit adjustments that are not expected to be material in the aggregate and do not contain all footnotes required by GAAP); and any supporting schedules included in the Registration Statement present fairly in all material respects the information required to be stated therein. Except as included therein, no historical or pro forma financial statements are required to be included in the Registration Statement, the Pricing Disclosure Package or the Prospectus under the Securities Act or the Securities Act Regulations. The pro forma and pro forma as adjusted financial information and the related notes, if any, included in the Registration Statement, the Pricing Disclosure Package and the Prospectus have been properly compiled and prepared in all material respects in accordance with the applicable requirements of the Securities Act and the Securities Act Regulations and present fairly in all material respects the information shown therein, and the assumptions used in the preparation thereof are reasonable and the adjustments used therein are appropriate to give effect to the transactions and circumstances referred to therein. All disclosures contained in the Registration Statement, the Pricing Disclosure Package or the Prospectus regarding "non-GAAP financial measures" (as such term is defined by the rules and regulations of the Commission), if any, comply with Regulation G of the Exchange Act and Item 10 of Regulation S-K of the Securities Act, to the extent applicable. Each of the Registration Statement, the Pricing Disclosure Package and the Prospectus discloses all material off-balance sheet transactions, arrangements, obligations (including contingent obligations), and other relationships of the Company with unconsolidated entities or other persons that may have a material current or future effect on the Company's financial condition, changes in financial condition, results of operations, liquidity, capital expenditures, capital resources, or significant components of revenues or expenses. Except as disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus, (a) neither the Company nor any of its subsidiaries (each, a "**Subsidiary**" and, collectively, the "**Subsidiaries**"), has incurred any material liabilities or obligations, direct or contingent, or entered into any material transactions other than in the ordinary course of business, (b) the Company has not declared or paid any dividends or made any distribution of any kind with respect to its Common Stock or preferred stock (c) there has not been any change in the capital of the Company or any of its Subsidiaries, or, other than in the course of business, any grants under any stock compensation plan, and (d) there has not been any Material Adverse Change in the Company's long-term or short-term debt. The Company represents that it has no direct or indirect subsidiaries other than those listed in Exhibit 21.1 to the Registration Statement.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.8. <u>Authorized Capital; Options, etc</u>*. The Company had, at the date or dates indicated in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the duly authorized, issued and outstanding capitalization as set forth therein. Based on the assumptions stated in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company will have on the Closing Date the adjusted capitalization set forth therein. Except as set forth in, or contemplated by, the Registration Statement, the Pricing Disclosure Package and the Prospectus, on the Effective Date, as of the Applicable Time and on the Closing Date or at any Option Closing Date, there will be no options, warrants, or other rights to purchase or otherwise acquire any authorized, but unissued Common Stock or any security convertible or exercisable into Common Stock, or any contracts or commitments to issue or sell Common Stock or any such options, warrants, rights or convertible securities.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.9. <u>Valid Issuance of Securities, etc.</u>*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.9.1. <u>Outstanding Securities</u>. All issued and outstanding securities of the Company issued prior to the transactions contemplated by this Agreement have been duly authorized and validly issued and are fully paid and non-assessable; the holders thereof have no rights of rescission with respect thereto, and are not subject to personal liability by reason of being such holders; and none of such securities were issued in violation of the preemptive rights of any holders of any security of the Company or similar contractual rights granted by the Company. The Common Stock, preferred stock, and any other securities outstanding or to be outstanding upon consummation of the Offering conform in all material respects to all statements relating thereto contained in the Registration Statement, the Pricing Disclosure Package and the Prospectus. The offers and sales of the outstanding Common Stock were at all relevant times either registered under the Securities Act and the applicable state securities or "blue sky" laws or, based in part on the representations and warranties of the purchasers of such shares, exempt from such registration requirements. The description of the Company's stock option, stock bonus and other stock plans or arrangements, and the options or other rights granted thereunder, as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, accurately and fairly present, in all material respects, the information required to be shown with respect to such plans, arrangements and the options and rights granted thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.9.2. <u>Securities Sold Pursuant to this Agreement</u>. The Shares have been duly authorized for issuance and sale and, when issued and paid for, will be validly issued, fully paid and non-assessable; the holders thereof are not and will not be subject to personal liability by reason of being such holders; the Shares are not and will not be subject to the preemptive rights of any holders of any security of the Company or similar contractual rights granted by the Company; and all corporate action required to be taken for the authorization, issuance and sale of the Shares has been duly and validly taken. The Shares conform in all material respects to all statements with respect thereto contained in the Registration Statement, the Pricing Disclosure Package and the Prospectus.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.10. <u>Registration Rights of Third Parties</u>*. Except as set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus, no holders of any securities of the Company or any rights exercisable for or convertible or exchangeable into securities of the Company have the right to require the Company to register any such securities of the Company under the Securities Act or to include any such securities in a registration statement to be filed by the Company.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.11. <u>Validity and Binding Effect of Agreements</u>.* This Agreement has been duly and validly authorized by the Company, and, when executed and delivered, will constitute, the valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except: (i) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally; (ii) as enforceability of any indemnification or contribution provision may be limited under the federal and state securities laws; and (iii) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.12. <u>No Conflicts, etc</u>.* The execution, delivery and performance by the Company of this Agreement and all ancillary documents, the consummation by the Company of the transactions herein and therein contemplated and the compliance by the Company with the terms hereof and thereof do not and will not, with or without the giving of notice or the lapse of time or both: (i) result in a material breach of, or conflict in any material respect with any of the terms and provisions of, or constitute a material default under, or result in the creation, modification, termination or imposition of any lien, charge or encumbrance upon any property or assets of the Company pursuant to the terms of any agreement or instrument to which the Company is a party; (ii) result in any violation of the provisions of the Company's Articles of Incorporation (as the same may be amended or restated from time to time, the "**Charter**") or the by-laws of the Company; or (iii) violate any existing applicable law, rule, regulation, judgment, order or decree of any Governmental Entity as of the date hereof; except, in the case of clause (iii) above, for such violations that would not reasonably be expected to result in a Material Adverse Change.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.13. <u>No Defaults; Violations</u>.* No material default exists in the due performance and observance of any term, covenant or condition of any material license, contract, indenture, mortgage, deed of trust, note, loan or credit agreement, or any other agreement or instrument evidencing an obligation for borrowed money, or any other material agreement or instrument to which the Company is a party or by which the Company may be bound or to which any of the properties or assets of the Company is subject. The Company is not (i) in violation of any term or provision of its Charter or by-laws, or (ii) in violation of any franchise, license, permit, applicable law, rule, regulation, judgment or decree of any Governmental Entity, except in the case of clause (ii) for such violations which would not reasonably be expected to cause a Material Adverse Change.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.14. <u>Corporate Power; Licenses; Consents</u>.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.14.1. <u>Conduct of Business</u>. Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company has all requisite corporate power and authority, and has all necessary authorizations, approvals, orders, licenses, certificates and permits of and from all governmental regulatory officials and bodies that it needs as of the date hereof to conduct its business purpose as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, except for the absence of which would not reasonably be expected to result in a Material Adverse Change.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.14.2. <u>Transactions Contemplated Herein</u>. The Company has all corporate power and authority to enter into this Agreement and to carry out the provisions and conditions hereof, and all consents, authorizations, approvals and orders required in connection therewith have been obtained. No consent, authorization or order of, and no filing with, any court, government agency, the Exchange or other body is required for the valid issuance, sale and delivery of the Shares and the consummation of the transactions and agreements contemplated by this Agreement and as contemplated by the Registration Statement, the Pricing Disclosure Package and the Prospectus, except with respect to applicable Securities Act Regulations, state securities laws and the rules and regulations of the Financial Industry Regulatory Authority, Inc. ("**FINRA**"),.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.15. <u>D&O Questionnaires</u>.* To the Company's knowledge, all information contained in the questionnaires (the "**Questionnaires**") completed by each of the Company's directors and officers immediately prior to the Offering (the "**Insiders**") as supplemented by all information concerning the Company's directors, officers and principal shareholders as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, as well as in the Lock-Up Agreement (as defined in <u>Section 2.24</u> below), provided to the Underwriters, is true and correct in all material respects and the Company has not become aware of any information which would cause the information disclosed in the Questionnaires to become materially inaccurate and incorrect.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.16. <u>Litigation; Governmental Proceedings</u>.* There is no action, suit, proceeding, inquiry, arbitration, investigation, litigation or governmental proceeding pending or, to the Company's knowledge, threatened against, or involving the Company or, to the Company's knowledge, any executive officer or director that is required to be disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus which has not been disclosed*.* 

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.17. <u>Good Standing</u>.* The Company has been duly organized and is validly existing as a corporation and is in good standing under the laws of the State of Delaware as of the date hereof, and is duly qualified to do business and is in good standing in each other jurisdiction in which its ownership or lease of property or the conduct of business requires such qualification, except where the failure to qualify, singularly or in the aggregate, would not have or reasonably be expected to result in a Material Adverse Change.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.18. <u>Insurance</u>.* The Company carries or is entitled to the benefits of insurance, (including, without limitation, as to directors and officers insurance coverage), with, to the Company's knowledge, reputable insurers, in such amounts and covering such risks which the Company believes are adequate, and all such insurance is in full force and effect. The Company has no reason to believe that it will not be able (i) to renew its existing insurance coverage as and when such policies expire or (ii) to obtain comparable coverage from similar institutions as may be necessary or appropriate to conduct its business as now conducted and at a cost that would not result in a Material Adverse Change.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.19. <u>Transactions Affecting Disclosure to FINRA</u>.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.19.1. <u>Finder's Fees</u>. Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, there are no claims, payments, issuances, arrangements, agreements or understandings relating to the payment of a finder's, consulting or origination fee by the Company or any Insider with respect to the sale of the Shares hereunder or any other arrangements, agreements or understandings of the Company or, to the Company's knowledge, any of its shareholders that may affect the Underwriters' compensation, as determined by FINRA and neither the Company nor, to the Company's knowledge, any Insider has paid any monies or other compensation or issued any securities to any member of FINRA, or to any affiliate or associate of such a member, regarding this Offering.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.19.2. <u>Payments within Six (6) Months</u>. Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company has not made any direct or indirect payments (in cash, securities or otherwise) to: (i) any person, as a finder's fee, consulting fee or otherwise, in consideration of such person raising capital for the Company or introducing to the Company persons who raised or provided capital to the Company; (ii) any FINRA member; or (iii) any person or entity that has any direct or indirect affiliation or association with any FINRA member, within the six (6) months immediately prior to the original filing of the Registration Statement, other than the payment to the Underwriters as provided hereunder in connection with the Offering.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.19.3. <u>Use of Proceeds</u>. None of the net proceeds of the Offering will be paid by the Company to any participating FINRA member or its affiliates, except as specifically authorized herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.19.4. <u>FINRA Affiliation</u>. To the Company's knowledge, and except as may otherwise be disclosed in FINRA questionnaires provided to the Representative's Counsel, there is no (i) officer or director of the Company, (ii) beneficial owner of 5% or more of any class of the Company's securities or (iii) beneficial owner of the Company's unregistered equity securities which were acquired during the 180-day period immediately preceding the filing of the Registration Statement that is an affiliate or associated person of a FINRA member participating in the Offering (as determined in accordance with the rules and regulations of FINRA).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.19.5. <u>Information</u>. All information provided by the Company and, to the Company's knowledge, all information provided by its officers and directors, in their FINRA questionnaire to Representative's Counsel specifically for use by Representative's Counsel in connection with its Public Offering System filings (and related disclosure) with FINRA is true, correct and complete in all material respects.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.20. <u>Foreign Corrupt Practices Act</u>.* None of the Company and its Subsidiaries or, to the Company's knowledge, any director, officer, agent, employee or affiliate of the Company and its Subsidiaries or any other person acting on behalf of the Company and its Subsidiaries, has, directly or indirectly, given or agreed to give any money, gift or similar benefit (other than legal price concessions to customers in the ordinary course of business) to any customer, supplier, employee or agent of a customer or supplier, or official or employee of any governmental agency or instrumentality of any government (domestic or foreign) or any political party or candidate for office (domestic or foreign) or other person who was, is, or may be in a position to help or hinder the business of the Company (or assist it in connection with any actual or proposed transaction) that (i) might subject the Company to any damage or penalty in any civil, criminal or governmental litigation or proceeding, (ii) if not given in the past, might have had a Material Adverse Change or (iii) if not continued in the future, might adversely affect the assets, business, operations or prospects of the Company. The Company has taken reasonable steps to ensure that its accounting controls and procedures are sufficient to cause the Company to comply in all material respects with the Foreign Corrupt Practices Act of 1977, as amended.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.21. <u>Compliance with OFAC</u>.* None of the Company and its Subsidiaries or, to the Company's knowledge, any director, officer, agent, employee or affiliate of the Company and its Subsidiaries or any other person acting on behalf of the Company and its Subsidiaries, is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury ("**OFAC**"), and the Company will not, directly or indirectly, use the proceeds of the Offering hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.

 

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.22. <u>Money Laundering Laws</u>.* The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any Governmental Entity (collectively, the "**Money Laundering Laws**"); and no action, suit or proceeding by or before any Governmental Entity involving the Company with respect to the Money Laundering Laws is pending or, to the best knowledge of the Company, threatened.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.23. <u>Officers' Certificate</u>.* Any certificate signed by any duly authorized officer of the Company and delivered to you or to Representative's Counsel shall be deemed a representation and warranty by the Company to the Underwriters as to the matters covered thereby.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.24. <u>Lock-Up Agreements</u>*<u>.</u> Schedule 3 hereto contains a complete and accurate list of the Company's officers, directors and each owner of at least 5% of the Company's outstanding Common Shares (or securities convertible or exercisable into Common Shares) that will be subject to a Lock-Up Agreement (collectively, the "**Lock-Up Parties**"). The Company has caused each of the Lock-Up Parties to deliver to the Representative an executed Lock-Up Agreement, in a form substantially similar to that attached hereto as Exhibit A (the "**Lock-Up Agreement**"), prior to the execution of this Agreement.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.25. <u>Subsidiaries</u>*. All Subsidiaries of the Company are duly organized and in good standing under the laws of the place of organization or incorporation, and each Subsidiary is in good standing in each jurisdiction in which its ownership or lease of property or the conduct of business requires such qualification, except where the failure to qualify would not have a Material Adverse Change. The Company's ownership and control of each Subsidiary is as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.26. <u>Related Party Transactions</u>.* There are no business relationships or related party transactions involving the Company, its Subsdiaries or any other person required to be described in the Registration Statement, the Pricing Disclosure Package and the Prospectus that have not been described as required by the Securities Act Regulations.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.27. <u>Board of Directors</u>.* The Board of Directors of the Company is comprised of the persons set forth under the heading of the Pricing Prospectus and the Prospectus captioned "Management." The qualifications of the persons serving as board members and the overall composition of the board comply with the Exchange Act, the Exchange Act Regulations, the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder (the "**Sarbanes-Oxley Act**") applicable to the Company and the listing rules of the Exchange. At least one member of the Audit Committee of the Board of Directors of the Company qualifies as an "audit committee financial expert," as such term is defined under Regulation S-K and the listing rules of the Exchange. In addition, at least a majority of the persons serving on the Board of Directors qualify as "independent," as defined under the listing rules of the Exchange.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.28. <u>Sarbanes-Oxley Compliance</u>.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.28.1. <u>Disclosure Controls</u>. Except as disclosed in the Registration Statement, Pricing Disclosure Package and the Prospectus, the Company has developed and currently maintains disclosure controls and procedures that will comply with Rule 13a-15 or 15d-15 under the Exchange Act Regulations, and such controls and procedures are effective to ensure that all material information concerning the Company will be made known on a timely basis to the individuals responsible for the preparation of the Company's Exchange Act filings and other public disclosure documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.28.2. <u>Compliance</u>. The Company is, or at the Applicable Time and on the Closing Date will be, in material compliance with the provisions of the Sarbanes-Oxley Act applicable to it, and has implemented or will implement such programs and has taken reasonable steps to ensure the Company's future compliance (not later than the relevant statutory and regulatory deadlines therefor) with all of the material provisions of the Sarbanes-Oxley Act..

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.29.* <u>Accounting Controls</u>. Except as disclosed in the Registration Statement, Pricing Disclosure Package and the Prospectus, the Company maintains systems of "internal control over financial reporting" (as defined under Rules 13a-15 and 15d-15 under the Exchange Act Regulations) that comply in all material respects with the requirements of the Exchange Act and have been designed by, or under the supervision of, its respective principal executive and principal financial officers, or persons performing similar functions, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, including, but not limited to, internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management's general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management's general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company is not aware of any material weaknesses in its internal control over financial reporting, and, if applicable, with respect to such remedial actions disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company represents that it has taken all remedial actions set forth in such disclosure. The Company's auditors and the Audit Committee of the Board of Directors of the Company have been advised of: (i) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are known to the Company's management and that have adversely affected or are reasonably likely to adversely affect the Company's ability to record, process, summarize and report financial information; and (ii) any fraud known to the Company's management, whether or not material, that involves management or other employees who have a significant role in the Company's internal controls over financial reporting.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.30. <u>No Investment Company Status</u>*. The Company is not and, after giving effect to the Offering and the application of the proceeds thereof as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, will not be, required to register as an "investment company," as defined in the Investment Company Act of 1940, as amended.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.31. <u>No Labor Disputes</u>.* No material labor dispute with the employees of the Company or any of its Subsidiaries exists or, to the knowledge of the Company, is imminent. The Company is not aware that any key employee or significant group of employees of the Company or any of its Subsidiaries plans to terminate employment with the Company.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.32. <u>Intellectual Property Rights</u>*. The Company and each of its Subsidiaries owns or possesses or has valid rights to use all patents, patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, copyrights, licenses, inventions, trade secrets and similar rights (collectively, the "**Intellectual Property Rights**") necessary for the conduct of the business of the Company and its Subsidiaries as currently carried on and as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus. To the knowledge of the Company, no action or use by the Company or any of its Subsidiaries necessary for the conduct of its business as currently carried on and as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus will involve or give rise to any infringement of, or license or similar fees for, any Intellectual Property Rights of others. Neither the Company nor any of its Subsidiaries has received any written notice alleging any such infringement, fee or conflict with asserted Intellectual Property Rights of others. Except as would not reasonably be expected to result, individually or in the aggregate, in a Material Adverse Change (A) to the knowledge of the Company, there is no infringement, misappropriation or violation by third parties of any of the Intellectual Property Rights owned by the Company; (B) there is no pending or, to the knowledge of the Company, threatened action, suit, proceeding or claim by others challenging the rights of the Company in or to any such Intellectual Property Rights, and the Company is unaware of any facts which would form a reasonable basis for any such claim, that would, individually or in the aggregate, together with any other claims in this <u>Section 2.32</u>, reasonably be expected to result in a Material Adverse Change; (C) the Intellectual Property Rights owned by the Company and, to the knowledge of the Company, the Intellectual Property Rights licensed to the Company have not been adjudged by a court of competent jurisdiction invalid or unenforceable, in whole or in part, and there is no pending or, to the Company's knowledge, threatened action, suit, proceeding or claim by others challenging the validity or scope of any such Intellectual Property Rights, and the Company is unaware of any facts which would form a reasonable basis for any such claim that would, individually or in the aggregate, together with any other claims in this <u>Section 2.32</u>, reasonably be expected to result in a Material Adverse Change; (D) there is no pending or, to the Company's knowledge, threatened action, suit, proceeding or claim by others that the Company infringes, misappropriates or otherwise violates any Intellectual Property Rights or other proprietary rights of others, the Company has not received any written notice of such claim and the Company is unaware of any other facts which would form a reasonable basis for any such claim that would, individually or in the aggregate, together with any other claims in this <u>Section 2.32</u>, reasonably be expected to result in a Material Adverse Change; and (E) to the Company's knowledge, no employee of the Company is in or has ever been in violation in any material respect of any term of any employment contract, patent disclosure agreement, invention assignment agreement, non-competition agreement, non-solicitation agreement, nondisclosure agreement or any restrictive covenant to or with a former employer where the basis of such violation relates to such employee's employment with the Company, or actions undertaken by the employee while employed with the Company and could reasonably be expected to result, individually or in the aggregate, in a Material Adverse Change. To the Company's knowledge, all material technical information developed by and belonging to the Company which has not been patented has been kept confidential. The Company is not a party to or bound by any options, licenses or agreements with respect to the Intellectual Property Rights of any other person or entity that are required to be set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus and are not described therein. The Registration Statement, the Pricing Disclosure Package and the Prospectus contain in all material respects the same description of the matters set forth in the preceding sentence. None of the technology employed by the Company has been obtained or is being used by the Company in violation of any contractual obligation binding on the Company or, to the Company's knowledge, any of its officers, directors or employees, or otherwise in violation of the rights of any persons. The Company and each of its Subsidiaries owns or has a valid right to access and use all computer systems, networks, hardware, software, databases, websites, and equipment used to process, store, maintain and operate data, information, and functions used in connection with the business of the Company and each of its Subsidiaries (the "**Company IT Systems**"). The Company IT Systems are adequate for, and operate and perform in all material respects as required in connection with, the operation of the business of the Company and each of its Subsidiaries as currently conducted, except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Company and each of its Subsidiaries has implemented commercially reasonable backup, security and disaster recovery technology consistent in all material respects with applicable regulatory standards and customary industry practices.

 

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.33. <u>Taxes</u>*. Each of the Company and its Subsidiaries has filed all returns (as hereinafter defined) required to be filed with taxing authorities prior to the date hereof or has duly obtained extensions of time for the filing thereof, except in any case in which the failure so to file would not reasonably be expected to cause a Material Adverse Change. Each of the Company and its Subsidiaries has paid all taxes (as hereinafter defined) shown as due on such returns that were filed and has paid all taxes imposed on or assessed against the Company or such respective Subsidiary, except for any such taxes that are currently being contested in good faith or as would not reasonably be expected to cause a Material Adverse Change. The provisions for taxes payable, if any, shown on the financial statements filed with or as part of the Registration Statement are sufficient for all accrued and unpaid taxes, whether or not disputed, and for all periods to and including the dates of such consolidated financial statements. Except as disclosed in writing to the Underwriters, (i) no issues have been raised (and are currently pending) by any taxing authority in connection with any of the returns or taxes asserted as due from the Company or its Subsidiaries, and (ii) no waivers of statutes of limitation with respect to the returns or collection of taxes have been given by or requested from the Company or its Subsidiaries. The term "taxes" means all federal, state, local, foreign and other net income, gross income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, license, lease, service, service use, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, windfall profits, customs, duties or other taxes, fees, assessments or charges of any kind whatever, together with any interest and any penalties, additions to tax or additional amounts with respect thereto. The term "returns" means all returns, declarations, reports, statements and other documents required to be filed in respect to taxes.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.34. <u>ERISA Compliance</u>.* The Company is not subject to the Employee Retirement Income Security Act of 1974, as amended, or the regulations and published interpretations thereunder.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.35. <u>Compliance with Laws</u>*. Except as otherwise disclosed in the Registration Statement, Pricing Disclosure Package and Prospectus and as could not, individually or in the aggregate, be expected to result in a Material Adverse Change, each of the Company and each Subsidiary: (A) is and at all times has been in compliance with all statutes, rules, or regulations applicable to the services provided by the Company ("**Applicable Laws**"), except as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Change; (B) has not received any warning letter, untitled letter or other correspondence or notice from any governmental authority alleging or asserting noncompliance with any Applicable Laws or any licenses, certificates, approvals, clearances, authorizations, permits and supplements or amendments thereto required by any such Applicable Laws ("**Authorizations**"); (C) possesses all material Authorizations and such material Authorizations are valid and in full force and effect and are not in material violation of any term of any such Authorizations; (D) has not received written notice of any claim, action, suit, proceeding, hearing, enforcement, investigation, arbitration or other action from any governmental authority or third party alleging that any product operation or activity is in violation of any Applicable Laws or Authorizations and has no knowledge that any such governmental authority or third party is considering any such claim, litigation, arbitration, action, suit, investigation or proceeding that if brought would result in a Material Adverse Change; (E) has not received written notice that any Governmental Authority has taken, is taking or intends to take action to limit, suspend, modify or revoke any Authorizations and has no knowledge that any such Governmental Authority is considering such action; and (F) has filed, obtained, maintained or submitted all material reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments as required by any Applicable Laws or Authorizations and that all such reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments were complete and correct in all material respects on the date filed (or were corrected or supplemented by a subsequent submission).

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.36. <u>Ineligible Issuer</u>.* At the time of filing the Registration Statement and any post-effective amendment thereto, at the time of effectiveness of the Registration Statement and any amendment thereto, at the earliest time thereafter that the Company or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) of the Securities Act Regulations) of the Shares and at the date hereof, the Company was not and is not an "ineligible issuer," as defined in Rule 405 of the Securities Act Regulations, without taking account of any determination by the Commission pursuant to Rule 405 of the Securities Act Regulations that it is not necessary that the Company be considered an ineligible issuer.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.37. <u>Real Property</u>.* Except as set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company and its Subsidiaries have good and marketable title in fee simple to, or have valid rights to lease or otherwise use, all items of real or personal property which are material to the business of the Company and its Subsidiaries taken as a whole, in each case free and clear of all liens, encumbrances, security interests, claims and defects that do not, singly or in the aggregate, materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company or its Subsidiaries; and all of the leases and subleases material to the business of the Company and its Subsidiaries, considered as one enterprise, and under which the Company or any of its Subsidiaries holds properties described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, are in full force and effect, and neither the Company nor any Subsidiary has received any written notice of any material claim of any sort that has been asserted by anyone adverse to the rights of the Company or any Subsidiary under any of the leases or subleases mentioned above, or affecting or questioning the rights of the Company or such Subsidiary to the continued possession of the leased or subleased premises under any such lease or sublease, which would result in a Material Adverse Change.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.38. <u>Contracts Affecting Capital</u>*. There are no transactions, arrangements or other relationships between and/or among the Company, any of its affiliates (as such term is defined in Rule 405 of the Securities Act Regulations) and any unconsolidated entity, including, but not limited to, any structured finance, special purpose or limited purpose entity that could reasonably be expected to materially affect the Company's or its Subsidiaries' liquidity or the availability of or requirements for their capital resources required to be described or incorporated by reference in the Registration Statement, the Pricing Disclosure Package and the Prospectus which have not been described or incorporated by reference as required.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.39. <u>Loans to Directors or Officers</u>.* There are no outstanding loans, advances (except normal advances for business expenses in the ordinary course of business) or guarantees or indebtedness by the Company or its Subsidiaries to or for the benefit of any of the officers or directors of the Company, its Subsidiaries or any of their respective family members, except as disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.40. <u>Industry Data; Forward-looking statements</u>.* The statistical and market-related data included in each of the Registration Statement, the Pricing Disclosure Package and the Prospectus are based on or derived from sources that the Company reasonably and in good faith believes are reliable and accurate or represent the Company's good faith estimates that are made on the basis of data derived from such sources. No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) contained in the Prospectus has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.41. <u>Testing-the-Waters Communications</u>*. The Company has not (i) alone engaged in any Testing-the-Waters Communications and (ii) authorized anyone to engage in Testing-the-Waters Communications. The Company has not distributed any Written Testing-the-Waters Communications. "Written Testing-the-Waters Communication" means any Testing-the-Waters Communication that is a written communication within the meaning of Rule 405 under the Securities Act; "Testing-the-Waters Communication" means any oral or written communication with potential investors undertaken in reliance on Section 5(d) of the Securities Act.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.42. Emerging Growth Company*. From the time of the initial confidential submission of the Registration Statement to the Commission (or, if earlier, the first date on which the Company engaged directly in or through any Person authorized to act on its behalf in any Testing-the Waters Communication) through the date hereof, the Company has been and is an "emerging growth company," as defined in Section 2(a) of the Securities Act.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.43. <u>Environmental Matters</u>.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.43.1. The business and operations of the Company have been and are being conducted in compliance with all applicable laws, ordinances, rules, regulations, licenses, permits, approvals, plans, authorizations or requirements relating to occupational safety and health, or protection of health of any governmental department, commission, board, bureau, agency or instrumentality of all domestic and foreign jurisdictions that govern the Company's business and operations, any state or political subdivision thereof, and all applicable judicial or administrative agency or regulatory decrees, awards, judgments and orders relating thereto ("**Environmental Laws**"), except where the failure to be in such compliance would not be reasonably expected, individually or in the aggregate, to have a Material Adverse Change; and the Company has not received any notice from any governmental instrumentality or any third party alleging any material violation thereof or liability thereunder (including, without limitation, liability for costs of investigating).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.43.2. There has been no storage, generation, transportation, use, handling, treatment, Release or threat of Release of Hazardous Materials (as defined below) by or caused by the Company (or, to the knowledge of the Company, any other entity (including any predecessor) for whose acts or omissions the Company is or could reasonably be expected to be liable) at, on, under or from any property or facility now or previously owned, operated or leased by the Company, or at, on, under or from any other property or facility, in violation of any Environmental Laws or in a manner or amount or to a location that could reasonably be expected to result in any liability under any Environmental Law, except for any violation or liability which would not, individually or in the aggregate, have a Material Adverse Change. "**Hazardous Materials**" means any material, chemical, substance, waste, pollutant, contaminant, compound, mixture, or constituent thereof, in any form or amount, including petroleum (including crude oil or any fraction thereof) and petroleum products, natural gas liquids, asbestos and asbestos containing materials, naturally occurring radioactive materials, brine, and drilling mud, regulated or which can give rise to liability under any Environmental Law. "**Release**" means any spilling, leaking, seepage, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, disposing, depositing, dispersing, or migrating in, into or through the environment, or in, into from or through any building or structure.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.44. <u>Margin Securities</u>.* The Company owns no "margin securities" as that term is defined in Regulation U of the Board of Governors of the Federal Reserve System (the "**Federal Reserve Board**"), and none of the proceeds of the Offering will be used, directly or indirectly, for the purpose of purchasing or carrying any margin security, for the purpose of reducing or retiring any indebtedness which was originally incurred to purchase or carry any margin security or for any other purpose which might cause any of the Common Stock to be considered a "purpose credit" within the meanings of Regulation T, U or X of the Federal Reserve Board*.* 

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.45. <u>Dividends and Distributions</u>*. Except as disclosed in the Pricing Disclosure Package, Registration Statement and the Prospectus, no Subsidiary of the Company is currently prohibited or restricted, directly or indirectly, from paying any dividends to the Company, from making any other distribution on such Subsidiary's capital stock, from repaying to the Company any loans or advances to such Subsidiary from the Company or from transferring any of such Subsidiary's property or assets to the Company or any other Subsidiary of the Company.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.46. <u>Lending Relationships</u>*. Except as disclosed in the Pricing Disclosure Package, Registration Statement and the Prospectus, the Company (i) does not have any material lending or other relationship with any bank or lending affiliate of the Underwriters and (ii) does not intend to use any of the proceeds from the sale of the Securities hereunder to repay any outstanding debt owed to any affiliate of the Underwriters.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.47. <u>Smaller Reporting Company</u>*. The Company is a "smaller reporting company," as defined in Rule 12b-2 of the Exchange Act Regulations.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.48. <u>Confidentiality and Non-Competition</u>*. To the Company's knowledge, no director, officer, key employee or consultant of the Company is subject to any confidentiality, non-disclosure, non-competition agreement or non-solicitation agreement with any employer (other than the Company) or prior employer that could materially affect his or her ability to be and act in his or her respective capacity of the Company or reasonably be expected to result in a Material Adverse Change.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.49. <u>Corporate Records</u>*. The minute books of the Company and its Subsidiaries have been made available to the Representative and Representative Counsel and such books (i) contain minutes of all material meetings and actions of the Board of Directors (including each board committee) and shareholders of the Company and its Subsidiaries, and (ii) reflect all material transactions referred to in such minutes.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.50. <u>Diligence Materials</u>*. The Company has provided to the Representative and Representative Counsel all materials required or necessary to respond in all material respects to the diligence request submitted to the Company or its counsel by the Representative.

3. <u>Covenants of the Company</u>. The Company covenants and agrees as follows:

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*3.1. <u>Amendments to Registration Statement</u>.* The Company shall deliver to the Representative, prior to filing, any amendment or supplement to the Registration Statement or Prospectus proposed to be filed after the Effective Date and not file any such amendment or supplement to which the Representative shall reasonably object in writing.

 

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*3.2. <u>Federal Securities Laws</u>.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2.1. <u>Compliance</u>. The Company, subject to <u>Section 3.2.2</u>, shall comply with the requirements of Rule 430A of the Securities Act Regulations, and will notify the Representative promptly, and confirm the notice in writing, (i) when any post-effective amendment to the Registration Statement shall become effective or any amendment or supplement to the Prospectus shall have been filed; (ii) of the receipt of any comments from the Commission; (iii) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or for additional information; (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or any post-effective amendment or of any order preventing or suspending the use of any Preliminary Prospectus or the Prospectus, or of the suspension of the qualification of the Shares for offering or sale in any jurisdiction, or of the initiation or threatening of any proceedings for any of such purposes or of any examination pursuant to Section 8(d) or 8(e) of the Securities Act concerning the Registration Statement and (v) if the Company becomes the subject of a proceeding under Section 8A of the Securities Act in connection with the Offering of the Shares. The Company shall effect all filings required under Rule 424(b) of the Securities Act Regulations, in the manner and within the time period required by Rule 424(b) (without reliance on Rule 424(b)(8)), and shall take such steps as it deems necessary to ascertain promptly whether the form of prospectus transmitted for filing under Rule 424(b) was received for filing by the Commission and, in the event that it was not, it will promptly file such prospectus. The Company shall use its reasonable best efforts to prevent the issuance of any stop order, prevention or suspension and, if any such order is issued, to obtain the lifting thereof at the earliest possible moment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2.2. <u>Continued Compliance</u>. The Company shall comply with the Securities Act, the Securities Act Regulations, the Exchange Act and the Exchange Act Regulations so as to permit the completion of the distribution of the Shares as contemplated in this Agreement and in the Registration Statement, the Pricing Disclosure Package and the Prospectus. If at any time when a prospectus relating to the Shares is (or, but for the exception afforded by Rule 172 of the Securities Act Regulations ("**Rule 172**"), would be) required by the Securities Act to be delivered in connection with sales of the Shares, any event shall occur or condition shall exist as a result of which it is necessary, in the opinion of counsel for the Underwriters or for the Company, to (i) amend the Registration Statement in order that the Registration Statement will not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; (ii) amend or supplement the Pricing Disclosure Package or the Prospectus in order that the Pricing Disclosure Package or the Prospectus, as the case may be, will not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in the light of the circumstances existing at the time it is delivered to a purchaser or (iii) amend the Registration Statement or amend or supplement the Pricing Disclosure Package or the Prospectus, as the case may be, in order to comply with the requirements of the Securities Act or the Securities Act Regulations, the Company will promptly (A) give the Representative notice of such event; (B) prepare any amendment or supplement as may be necessary to correct such statement or omission or to make the Registration Statement, the Pricing Disclosure Package or the Prospectus comply with such requirements and, a reasonable amount of time prior to any proposed filing or use, furnish the Representative with copies of any such amendment or supplement and (C) file with the Commission any such amendment or supplement; *provided* that the Company shall not file or use any such amendment or supplement to which the Representative or Representative's Counsel shall reasonably object. The Company will furnish to the Underwriters such number of copies of such amendment or supplement as the Underwriters may reasonably request. The Company has given the Representative notice of any filings made pursuant to the Exchange Act or the Exchange Act Regulations within 48 hours prior to the Applicable Time. The Company shall give the Representative notice of its intention to make any such filing from the Applicable Time until the Closing Date and the exercise in full or expiration of the Over-allotment Option specified in <u>Section 1.2</u> hereof and will furnish the Representative with copies of the related document(s) a reasonable amount of time prior to such proposed filing, as the case may be, and will not file or use any such document to which the Representative or counsel for the Underwriters shall reasonably object.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2.3. <u>Exchange Act Registration</u>. For a period of three (3) years after the date of this Agreement, the Company shall use its commercially reasonable efforts to maintain the registration of the Common Stock under the Exchange Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2.4. <u>Free Writing Prospectuses</u>. The Company agrees that, unless it obtains the prior written consent of the Representative, it shall not make any offer relating to the Shares that would constitute an Issuer Free Writing Prospectus or that would otherwise constitute a "free writing prospectus," or a portion thereof, required to be filed by the Company with the Commission or retained by the Company under Rule 433; *provided* that the Representative shall be deemed to have consented to each Issuer General Use Free Writing Prospectus set forth in <u>Schedule 2-B</u>. The Company represents that it has treated or agrees that it will treat each such free writing prospectus consented to, or deemed consented to, by the Underwriters as an "issuer free writing prospectus," as defined in Rule 433, and that it has complied and will comply with the applicable requirements of Rule 433 with respect thereto, including timely filing with the Commission where required, legending and record keeping. If at any time following issuance of an Issuer Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer Free Writing Prospectus conflicted or would conflict with the information contained in the Registration Statement or included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at that subsequent time, not misleading, the Company will promptly notify the Underwriters and will promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2.5. <u>Reserved</u>.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*3.3. <u>Delivery to the Underwriters of Registration Statements</u>*. The Company has delivered or made available or shall deliver or make available to the Representative and Representative's Counsel, without charge, signed copies of the Registration Statement as originally filed and each amendment thereto (including exhibits filed therewith) and signed copies of all consents and certificates of experts, and upon request will also deliver to the Underwriters, without charge, a conformed copy of the Registration Statement as originally filed and each amendment thereto (without exhibits) for each of the Underwriters. The copies of the Registration Statement and each amendment thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*3.4. <u>Delivery to the Underwriters of Prospectuses</u>.* The Company has delivered or made available or will deliver or make available to each Underwriter, without charge, as many copies of each Preliminary Prospectus as such Underwriter reasonably requested, and the Company hereby consents to the use of such copies for purposes permitted by the Securities Act. The Company will furnish to each Underwriter, without charge, during the period when a prospectus relating to the Shares is (or, but for the exception afforded by Rule 172, would be) required to be delivered under the Securities Act, such number of copies of the Prospectus (as amended or supplemented) as such Underwriter may reasonably request. The Prospectus and any amendments or supplements thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*3.5. <u>Effectiveness and Events Requiring Notice to the Representative</u>.* The Company shall notify the Representative immediately and confirm the notice in writing: (i) of the cessation of the effectiveness of the Registration Statement and any amendment thereto; (ii) of the issuance by the Commission of any stop order or of the initiation, or the threatening, of any proceeding for that purpose; (iii) of the issuance by any state securities commission of any proceedings for the suspension of the qualification of the Shares for offering or sale in any jurisdiction or of the initiation, or the threatening, of any proceeding for that purpose; (iv) of the mailing and delivery to the Commission for filing of any amendment or supplement to the Registration Statement or Prospectus; (v) of the receipt of any comments or request for any additional information from the Commission; and (vi) of the happening of any event during the period described in this <u>Section 3.5</u> that, in the judgment of the Company, makes any statement of a material fact made in the Registration Statement, the Pricing Disclosure Package or the Prospectus untrue or that requires the making of any changes in (a) the Registration Statement in order to make the statements therein not misleading, or (b) in the Pricing Disclosure Package or the Prospectus in order to make the statements therein, in light of the circumstances under which they were made, not misleading. If the Commission or any state securities commission shall enter a stop order or suspend such qualification at any time, the Company shall make every reasonable effort to obtain promptly the lifting of such order.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*3.6. <u>Review of Financial Statements.</u>* For a period of three (3) years after the date of this Agreement, the Company, at its expense, shall cause its regularly engaged independent registered public accounting firm to review (but not audit) the Company's financial statements for each of the three fiscal quarters immediately preceding the announcement of any quarterly financial information.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*3.7. <u>Listing</u>.* The Company shall use its commercially reasonable efforts to maintain the listing of the Shares on the Exchange for at least three (3) years from the date of this Agreement.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*3.8. <u>Intentionally omitted</u>*.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*3.9. <u>Reports to the Representative</u>.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.9.1. <u>Periodic Reports, etc</u>. For a period of three (3) years after the date of this Agreement, the Company shall furnish or make available to the Representative copies of such financial statements and other periodic and special reports as the Company from time to time furnishes generally to holders of any class of its securities and also furnish or make available to the Representative: (i) a copy of each periodic report the Company shall be required to file with the Commission under the Exchange Act and the Exchange Act Regulations; (ii) a copy of every press release and every news item and article with respect to the Company or its affairs which was released by the Company; (iii) a copy of each Form 8-K prepared and filed by the Company; (iv) a copy of each registration statement filed by the Company under the Securities Act; and (v) such additional documents and information with respect to the Company and the affairs of any future subsidiaries of the Company as the Representative may from time to time reasonably request; *provided* the Representative shall sign, if requested by the Company, a Regulation FD compliant confidentiality agreement which is reasonably acceptable to the Representative and Representative's Counsel in connection with the Representative's receipt of such information. Documents filed with the Commission pursuant to its EDGAR system shall be deemed to have been delivered to the Representative pursuant to this <u>Section 3.9.1</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.9.2. <u>Transfer Agent; Transfer Sheets</u>. For a period of three (3) years after the date of this Agreement, the Company shall retain a transfer agent and registrar acceptable to the Representative (the "**Transfer Agent**") and shall furnish to the Representative at the Company's sole cost and expense such transfer sheets of the Company's securities as the Representative may reasonably request, including the daily and monthly consolidated transfer sheets of the Transfer Agent and DTC. VStock Transfer, LLC is acceptable to the Representative to act as Transfer Agent for the Common Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.9.3. <u>Trading Reports</u>. For a period of six (6) months after the date hereof, during such time as the Shares are listed on the Exchange, the Company shall provide to the Representative, at the Company's expense, such reports published by the Exchange relating to price trading of the Shares, as the Representative shall reasonably request.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*3.10. <u>Payment of Expenses</u>*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.10.1. <u>General Expenses Related to the Offering</u>. The Company hereby agrees to pay on the Closing Date and the Option Closing Date, if any, all expenses incident to the performance of the obligations of the Company under this Agreement, including, but not limited to: (a) all filing fees and communication expenses relating to the registration of the Shares to be sold in the Offering (including the Over-allotment Option) with the Commission; (b) all Public Filing System filing fees associated with the review of the Offering by FINRA; (c) all fees, expenses and disbursements relating to the registration, qualification or exemption of the Shares under the securities laws of such foreign jurisdictions as the Representative may reasonably designate; (d) reimbursement of the out-of-pocket cost of the escrow agent or clearing agent, as applicable, which closing costs shall not exceed $25,000; (e) fees and expenses of the Representative's Counsel; (f) the Underwriters' due diligence expenses; and (g) the Underwriters' "road show" expenses for the Offering, with all of the Underwriters' actual out-of-pocket expenses under sub-sections 3.10.1(e)-(g) not to exceed $125,000 (less any amounts previously advanced to the Representative for such expenses). The Representative may deduct from the net proceeds of the Offering payable to the Company on the Closing Date or the Option Closing Date, if any, the expenses set forth herein to be paid by the Company to the Underwriters; *provided*, *however*, that in the event that the Offering is terminated, the Company agrees to reimburse the Underwriters pursuant to <u>Section 8.3</u> hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.10.2. <u>Reserved</u>.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*3.11. <u>Application of Net Proceeds</u>.* The Company shall apply the net proceeds from the Offering received by it in a manner consistent with the application thereof described under the caption "Use of Proceeds" in the Registration Statement, the Pricing Disclosure Package and the Prospectus.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*3.12. <u>Delivery of Earnings Statements to Security Holders</u>*. The Company will timely file such reports pursuant to the Exchange Act as are necessary in order to make generally available to its security holders as soon as practicable, an earnings statement (which need not be certified by independent registered public accounting firm unless required by the Securities Act or the Securities Act Regulations, but which shall satisfy the provisions of Rule 158(a) under Section 11(a) of the Securities Act) covering a period of at least twelve (12) consecutive months beginning after the date of this Agreement.

 

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*3.13. <u>Stabilization</u>.* Neither the Company nor any of its employees, directors or shareholders has taken or shall take, directly or indirectly, any action designed to or that has constituted or that might reasonably be expected to cause or result in, under Regulation M of the Exchange Act, or otherwise, stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Shares.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*3.14. <u>Internal Controls</u>*. Except to the extent disclosed in the Registration Statement, Pricing Disclosure Package and Prospectus, the Company shall maintain a system of internal accounting controls sufficient to provide reasonable assurances that: (i) transactions are executed in accordance with management's general or specific authorization; (ii) transactions are recorded as necessary in order to permit preparation of financial statements in accordance with GAAP and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management's general or specific authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*3.15. <u>Accountants</u>*. As of the date of this Agreement, the Company has retained an independent registered public accounting firm reasonably acceptable to the Representative, and the Company shall continue to retain a nationally recognized independent registered public accounting firm for a period of at least three (3) years after the date of this Agreement. The Representative acknowledges that the Auditor is acceptable to the Representative.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*3.16. <u>FINRA</u>*. For a period of ninety (90) days from the later of the Closing Date or the Option Closing Date, the Company shall advise the Representative (who shall make an appropriate filing with FINRA) if it is or becomes aware that (i) any officer or director of the Company, (ii) any beneficial owner of 5% or more of any class of the Company's securities or (iii) any beneficial owner of the Company's unregistered equity securities which were acquired during the 180 days immediately preceding the filing of the original Registration Statement is or becomes an affiliate or associated person of a FINRA member participating in the Offering (as determined in accordance with the rules and regulations of FINRA).

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*3.17. <u>No Fiduciary Duties</u>*. The Company acknowledges and agrees that the Underwriters' responsibility to the Company is solely contractual in nature and that none of the Underwriters or their affiliates or any selling agent shall be deemed to be acting in a fiduciary capacity, or otherwise owes any fiduciary duty to the Company or any of its affiliates in connection with the Offering and the other transactions contemplated by this Agreement.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*3.18. <u>Company Lock-Up</u>*. The Company, on behalf of itself and any successor entity, agrees that, without the prior written consent of the Representative, it will not, for a period of 180 days after the date of this Agreement (the "<u>Lock-Up Period</u>"), (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, modify, amend, or change the terms of, or grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of capital stock of the Company or any securities convertible into or exercisable or exchangeable for shares of capital stock of the Company; (ii) file or cause to be filed any registration statement with the Commission relating to the offering of any shares of capital stock of the Company or any securities convertible into or exercisable or exchangeable for shares of capital stock of the Company (other than pursuant to a registration statement on Form S-8 for employee benefit plans); (iii) complete any offering of debt securities of the Company, other than entering into a line of credit with a traditional bank; or (iv) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of capital stock of the Company, whether any such transaction described in clause (i), (ii), (iii) or (iv) above is to be settled by delivery of shares of capital stock of the Company or such other securities, in cash or otherwise. The restrictions contained in this Section 3.18 shall not apply to (i) the Common Stock to be sold hereunder, (ii) the issuance by the Company of Common Stock upon the exercise of a stock option or warrant or the conversion of a security outstanding on the date hereof and disclosed in the Registration Statement, Pricing Disclosure Package and Prospectus, (iii) the issuance by the Company of stock options or shares of capital stock of the Company under any equity compensation plan of the Company disclosed in the Registration Statement, Pricing Disclosure Package and Prospectus, or (iv) the filing of a registration statement on Form S-8 with the Commission.

 

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*3.19. <u>Release of D&O Lock-up Period</u>*. If the Representative, in its sole discretion, agrees to release or waive the restrictions set forth in the Lock-Up Agreements described in <u>Section 2.24</u> hereof for an officer or director of the Company and provides the Company with notice of the impending release or waiver at least three (3) Business Days before the effective date of the release or waiver, the Company agrees to announce the impending release or waiver by a press release through a major news service at least two (2) Business Days before the effective date of the release or waiver.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*3.20. <u>Blue Sky Qualifications</u>.* The Company shall use its best efforts, in cooperation with the Underwriters, if necessary, to qualify the Shares for offering and sale under the applicable securities laws of such states and other jurisdictions (domestic or foreign) as the Representative may designate and to maintain such qualifications in effect so long as required to complete the distribution of the Shares; *provided*, *however*, that the Company shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*3.21. <u>Reporting Requirements</u>.* The Company, during the period when a prospectus relating to the Shares is (or, but for the exception afforded by Rule 172, would be) required to be delivered under the Securities Act, will file all documents required to be filed with the Commission pursuant to the Exchange Act within the time periods required by the Exchange Act and Exchange Act Regulations. Additionally, the Company shall report the use of proceeds from the issuance of the Shares as may be required under Rule 463 under the Securities Act Regulations.

4. <u>Conditions of Underwriters' Obligations</u>. The obligations of the Underwriters to purchase and pay for the Shares, as provided herein, shall be subject to (i) the continuing accuracy of the representations and warranties of the Company as of the date hereof and as of each of the Closing Date and the Option Closing Date, if any, (ii) the accuracy of the statements of officers of the Company made pursuant to the provisions hereof; (iii) the performance by the Company of its obligations hereunder; and (iv) the following conditions:

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*4.1. <u>Regulatory Matters</u>.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1.1. <u>Effectiveness of Registration Statement; Rule 430A Information</u>. The Registration Statement has become effective not later than 5:00 p.m., Eastern time, on the date of this Agreement or such later date and time as shall be consented to in writing by you, and, at the Closing Date and the Option Closing Date, if any, no stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto has been issued under the Securities Act, no order preventing or suspending the use of any Preliminary Prospectus or the Prospectus has been issued and no proceedings for any of those purposes have been instituted or are pending or, to the Company's knowledge, contemplated by the Commission. The Company has complied with each request (if any) from the Commission for additional information. The Prospectus containing the Rule 430A Information shall have been filed with the Commission in the manner and within the time frame required by Rule 424(b) (without reliance on Rule 424(b)(8)) or a post-effective amendment providing such information shall have been filed with, and declared effective by, the Commission in accordance with the requirements of Rule 430A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1.2. <u>FINRA Clearance</u>. On or before the date of this Agreement, the Representative shall have received clearance from FINRA as to the amount of compensation allowable or payable to the Underwriters as described in the Registration Statement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1.3. <u>Exchange Share Market Clearance</u>. On the Closing Date, the Firm Shares shall have been approved for listing on the Exchange, subject only to official notice of issuance. On the first Option Closing Date (if any), the Option Shares shall have been approved for listing on the Exchange, subject only to official notice of issuance.

 

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*4.2. <u>Company Counsel Matters</u>.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2.1. <u>Closing Date Opinions of Counsels</u>. On the Closing Date, the Representative shall have received the favorable opinions of the Law Offices of T. J. Jesky, corporate counsel for the Company, and [___], Japanese counsel for the Company, in form and substance reasonably satisfactory to Representative's Counsel addressed to the Representative and stating that such opinions may be relied upon by Representative's Counsel.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2.2. <u>Option Closing Date Opinion of Counsel</u>. On the Option Closing Date, if any, the Representative shall have received the favorable opinions of the Law Offices of T. J. Jesky, corporate counsel for the Company, and [___], Japanese counsel for the Company, dated the Option Closing Date, addressed to the Representative and in form and substance reasonably satisfactory to the Representative, confirming as of the Option Closing Date, the statements made by such counsel in their opinions delivered on the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2.3. <u>Reliance</u>. In rendering such opinions, such counsel may rely: (i) as to matters involving the application of laws other than the laws of the United States and jurisdictions in which they are admitted, to the extent such counsel deems proper and to the extent specified in such opinion, if at all, upon an opinion or opinions (in form and substance reasonably satisfactory to the Representative) of other counsel reasonably acceptable to the Representative, familiar with the applicable laws; and (ii) as to matters of fact, to the extent they deem proper, on certificates or other written statements of officers of the Company and officers of departments of various jurisdictions having custody of documents respecting the corporate existence or good standing of the Company, *provided* that copies of any such statements or certificates shall be delivered to Representative's Counsel if requested.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*4.3. <u>Comfort Letters</u>.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3.1. <u>Cold Comfort Letter</u>. At the time this Agreement is executed the Representative shall have received a cold comfort letter containing statements and information of the type customarily included in accountants' comfort letters with respect to the financial statements and certain financial information contained in the Registration Statement, the Pricing Disclosure Package and the Prospectus, addressed to the Representative and in form and substance satisfactory in all respects to the Representative and to the Auditor, dated as of the date of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3.2. <u>Bring-down Comfort Letter</u>. At each of the Closing Date and the Option Closing Date, if any, the Representative shall have received from the Auditor a letter, dated as of the Closing Date or the Option Closing Date, as applicable,, to the effect that the Auditor reaffirms the statements made in the letter furnished pursuant to <u>Section 4.3.1</u>, except that the specified date referred to shall be a date not more than three (3) Business Days prior to the Closing Date or the Option Closing Date, as applicable.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*4.4. <u>Officers' Certificates</u>.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4.1. *<u>Officers' Certificate</u>*. The Company shall have furnished to the Representative a certificate, dated the Closing Date and any Option Closing Date (if such date is other than the Closing Date), of its Chief Executive Officer, its President and its Chief Financial Officer stating that (i) such officers have carefully examined the Registration Statement, the Pricing Disclosure Package, any Issuer Free Writing Prospectus and the Prospectus and, in their opinion, the Registration Statement and each amendment thereto, as of the Applicable Time and as of the Closing Date (or any Option Closing Date if such date is other than the Closing Date) did not include any untrue statement of a material fact and did not omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and the Pricing Disclosure Package, as of the Applicable Time and as of the Closing Date (or any Option Closing Date if such date is other than the Closing Date), any Issuer Free Writing Prospectus as of its date and as of the Closing Date (or any Option Closing Date if such date is other than the Closing Date), the Prospectus and each amendment or supplement thereto, as of the respective date thereof and as of the Closing Date, did not include any untrue statement of a material fact and did not omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances in which they were made, not misleading, (ii) since the effective date of the Registration Statement, no event has occurred which should have been set forth in a supplement or amendment to the Registration Statement, the Pricing Disclosure Package or the Prospectus, (iii) to the best of their knowledge after reasonable investigation, as of the Closing Date (or any Option Closing Date if such date is other than the Closing Date), the representations and warranties of the Company in this Agreement are true and correct in all material respects (except for those representations and warranties qualified as to materiality, which shall be true and correct in all respects and except for those representations and warranties which refer to facts existing at a specific date, which shall be true and correct as of such date) and the Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to the Closing Date (or any Option Closing Date if such date is other than the Closing Date), and (iv) there has not been, subsequent to the date of the most recent audited financial statements included or incorporated by reference in the Pricing Disclosure Package, a Material Adverse Change.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4.2. *<u>Secretary's Certificate</u>*. At each of the Closing Date and the Option Closing Date, if any, the Representative shall have received a certificate of the Company signed by the Secretary of the Company, dated the Closing Date or the Option Date, as the case may be, respectively, certifying: (i) that each of the Charter and Bylaws is true and complete, has not been modified and is in full force and effect; (ii) that the resolutions of the Company's Board of Directors (and any pricing committee thereof) relating to the Offering are in full force and effect and have not been modified; (iii) as to the good standing of the Company and each of its Subsidiaries as of the Closing Date and the Option Closing Date, as applicable (in each case in writing or any standard form of telecommunication from the appropriate governmental authorities of such jurisdictions except in such jurisdictions where the concept of good standing is not applicable or where good standing certificates are not available from governmental authorities); and (iv) as to the incumbency of the officers of the Company. The documents referred to in such certificate shall be attached to such certificate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4.3. *<u>Chief Financial Officer's Certificate</u>*. At each of the Closing Date and the Option Closing Date, if any, the Representative shall have received a certificate of the Chief Financial Officer of the Company, dated the Closing Date or the Option Closing Date, as the case may be, respectively, with respect to the accuracy of certain information contained in the Registration Statement, the Pricing Disclosure Package and the Prospectus, in a form reasonably acceptable to the Representative.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*4.5. <u>No Material Changes</u>*. Prior to and on each of the Closing Date and each Option Closing Date, if any: (i) there shall have been no Material Adverse Change in the condition or prospects or the business activities, financial or otherwise, of the Company from the latest dates as of which such condition is set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus; (ii) no action, suit or proceeding, at law or in equity, shall have been pending or threatened against the Company or any Insider before or by any court or federal, state, or foreign commission, board or other administrative agency or arbitral tribunal wherein an unfavorable decision, ruling or finding may reasonably be expected to cause a Material Adverse Change, except as set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus; (iii) no stop order shall have been issued under the Securities Act and no proceedings therefor shall have been initiated or threatened by the Commission; and (iv) the Registration Statement, the Pricing Disclosure Package and the Prospectus and any amendments or supplements thereto shall contain all material statements which are required to be stated therein in accordance with the Securities Act and the Securities Act Regulations and shall conform in all material respects to the requirements of the Securities Act and the Securities Act Regulations, and neither the Registration Statement, the Pricing Disclosure Package nor the Prospectus nor any amendment or supplement thereto shall contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*4.6. <u>Delivery of Agreements</u>.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.6.1. <u>Lock-Up Agreements</u>. On or before the date of this Agreement, the Company shall have delivered to the Representative executed copies of the Lock-Up Agreements from each of the persons listed in Schedule 3 hereto.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*4.7. <u>Additional Documents</u>*. At the Closing Date and at each Option Closing Date (if any), Representative's Counsel shall have been furnished with such documents and opinions as they may require for the purpose of enabling Representative's Counsel to deliver an opinion to the Underwriters, or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the conditions, herein contained; and all proceedings taken by the Company in connection with the issuance and sale of the Shares as herein contemplated shall be satisfactory in form and substance to the Representative and Representative's Counsel.

5. <u>Indemnification</u>.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*5.1. <u>Indemnification of the Underwriters</u>.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.1. <u>General</u>. Subject to the conditions set forth below, the Company agrees to indemnify and hold harmless each Underwriter, its affiliates and each of its and their respective directors, officers, members, employees, representatives, partners, shareholders, affiliates, counsel, and agents and each person, if any, who controls any such Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (collectively the "**Underwriter Indemnified Parties**," and each an "**Underwriter Indemnified Party**"), against any and all loss, liability, claim, damage and expense whatsoever (including but not limited to any and all legal or other expenses reasonably incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever, whether arising out of any action between any of the Underwriter Indemnified Parties and the Company or between any of the Underwriter Indemnified Parties and any third party, or otherwise) to which they or any of them may become subject under the Securities Act, the Exchange Act or any other statute or at common law or otherwise or under the laws of foreign countries (a "**Claim**"), arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, in (A) the Registration Statement, the Pricing Disclosure Package, any Preliminary Prospectus, the Prospectus, or in any Issuer Free Writing Prospectus or in any Written Testing-the-Waters Communication (as from time to time each may be amended and supplemented); (B) any materials or information provided to investors by, or with the approval of, the Company in connection with the marketing of the Offering, including any "road show" or investor presentations made to investors by the Company (whether in person or electronically); or (C) any application or other document or written communication (in this <u>Section 5</u>, collectively called "application") executed by the Company or based upon written information furnished by the Company in any jurisdiction in order to qualify the Shares under the securities laws thereof or filed with the Commission, any state securities commission or agency, the Exchange or any other national securities exchange; *unless*, with respect to each subsection (A) through (C), such statement or omission was made in reliance upon, and in conformity with, the Underwriters' Information. With respect to any untrue statement or omission or alleged untrue statement or omission made in the Registration Statement, Pricing Disclosure Package or Prospectus, the indemnity agreement contained in this <u>Section 5.1.1</u> shall not inure to the benefit of any Underwriter Indemnified Party to the extent that any loss, liability, claim, damage or expense of such Underwriter Indemnified Party results from the fact that a copy of the Prospectus was not given or sent to the person asserting any such loss, liability, claim or damage at or prior to the written confirmation of sale of the Shares to such person as required by the Securities Act and the Securities Act Regulations, and if the untrue statement or omission has been corrected in the Prospectus, unless such failure to deliver the Prospectus was a result of non-compliance by the Company with its obligations under <u>Section 3.3</u> hereof. The Company also agrees that it will reimburse each Underwriter Indemnified Party for all reasonable fees and expenses (including but not limited to any and all legal or other expenses reasonably incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever, whether arising out of any action between any of the Underwriter Indemnified Parties and the Company or between any of the Underwriter Indemnified Parties and any third party, or otherwise) (collectively, the "**Expenses**"), and further agrees wherever and whenever possible to advance payment of Expenses as they are incurred by an Underwriter Indemnified Party in investigating, preparing, pursuing or defending any Claim.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.2. <u>Procedure</u>. If any action is brought against an Underwriter Indemnified Party in respect of which indemnity may be sought against the Company pursuant to <u>Section 5.1.1</u>, such Underwriter Indemnified Party shall promptly notify the Company in writing of the institution of such action and the Company shall assume the defense of such action, including the employment and fees of counsel (subject to the approval of such Underwriter Indemnified Party (which approval shall not be unreasonably delayed or withheld)) and payment of actual expenses if an Underwriter Indemnified Party requests that the Company do so. Such Underwriter Indemnified Party shall have the right to employ its or their own counsel in any such case, and the fees and expenses of such counsel shall be at the expense of the Company and shall be advanced by the Company; *provided*, *however*, that the Company shall not be obligated to bear the reasonable fees and expenses of more than one firm of attorneys selected by the Underwriter Indemnified Party (in addition to local counsel). Notwithstanding anything to the contrary contained herein, and provided that the Company has timely honored its obligations under <u>Section 5</u>, the Underwriter Indemnified Party shall not enter into any settlement without the prior written consent (which shall not be unreasonably withheld) of the terms of any settlement by the Company. The Company shall not be liable for any settlement of any action effected without its prior written consent (which shall not be unreasonably delayed or withheld). In addition, the Company shall not, without the prior written consent of the Underwriters (which consent shall not be unreasonably withheld), settle, compromise or consent to the entry of any judgment in or otherwise seek to terminate any pending or threatened action in respect of which advancement, reimbursement, indemnification or contribution may be sought hereunder (whether or not such Underwriter Indemnified Party is a party thereto) unless such settlement, compromise, consent or termination (i) includes an unconditional release of each Underwriter Indemnified Party, acceptable to such Underwriter Indemnified Party, from all liabilities, expenses and claims arising out of such action for which indemnification or contribution may be sought and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any Underwriter Indemnified Party.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*5.2. <u>Indemnification of the Company</u>*. Each Underwriter, severally and not jointly, agrees to indemnify and hold harmless the Company, its directors, its officers who signed the Registration Statement and persons who control the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act against any and all loss, liability, claim, damage and expense described in the foregoing indemnity from the Company to the several Underwriters, as incurred, but only with respect to such losses, liabilities, claims, damages and expenses (or actions in respect thereof) which arise out of or are based upon untrue statements or omissions, or alleged untrue statements or omissions made in the Registration Statement, any Preliminary Prospectus, the Pricing Disclosure Package or Prospectus or any amendment or supplement thereto or in any application, in reliance upon, and in conformity with, the Underwriters' Information. In case any action shall be brought against the Company or any other person so indemnified based on any Preliminary Prospectus, the Registration Statement, the Pricing Disclosure Package or Prospectus or any amendment or supplement thereto or any application, and in respect of which indemnity may be sought against any Underwriter, such Underwriter shall have the rights and duties given to the Company, and the Company and each other person so indemnified shall have the rights and duties given to the several Underwriters by the provisions of <u>Section 5.1.2</u>. The Company agrees promptly to notify the Representative of the commencement of any litigation or proceedings against the Company or any of its officers, directors or any person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, in connection with the issuance and sale of the Shares or in connection with the Registration Statement, the Pricing Disclosure Package, the Prospectus, or any Issuer Free Writing Prospectus or any Written Testing-the-Waters Communication.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*5.3. <u>Contribution</u>.* If the indemnification provided for in this Section 5 shall for any reason be unavailable to or insufficient to hold harmless an indemnified party under Section 5.1 or 5.2 in respect of any liabilities and Expenses referred to therein, then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to the amount paid or payable by such indemnified party as a result of such liabilities and Expenses, (i) in such proportion as shall be appropriate to reflect the relative benefits received by the Company, on the one hand, and each of the Underwriters, on the other hand, from the Offering, or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company, on the one hand, and the Underwriters, on the other hand, in connection with the matters as to which such liabilities or Expenses relate, as well as any other relevant equitable considerations. The relative benefits received by the Company, on the one hand, and the Underwriters, on the other, with respect to such Offering shall be deemed to be in the same proportion as the total net proceeds actually received by the Company from the Offering of the Shares purchased under this Agreement (before deducting expenses) received by the Company bear to the total underwriting discounts and commissions actually received by the Underwriters in connection with the Offering, in each case as set forth in the table on the cover page of the Prospectus. The relative fault of the Company, on the one hand, and the Underwriters, on the other, shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company, on the one hand, or the Underwriters, on the other, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement, omission, act or failure to act; *provided* that the parties hereto agree that the written information furnished to the Company through the Representative by or on behalf of any Underwriter for use in any Preliminary Prospectus, any Registration Statement or the Prospectus, or in any amendment or supplement thereto, consists solely of the Underwriters' Information. The Company and the Underwriters agree that it would not be just and equitable if contributions pursuant to this Section 5.3 were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take into account the equitable considerations referred to above in this Section 5.3. Notwithstanding the above, no person guilty of fraudulent misrepresentation within the meaning of Section 11(f) of the Securities Act shall be entitled to contribution from a party who was not guilty of such fraudulent misrepresentation.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*5.4.* <u>Limitation</u>. The Company also agrees that no Underwriter Indemnified Party shall have any liability (whether direct or indirect, in contract or tort or otherwise) to the Company for or in connection with advice or services rendered or to be rendered by any Underwriter Indemnified Party pursuant to this Agreement, the transactions contemplated thereby or any Underwriter Indemnified Party's actions or inactions in connection with any such advice, services or transactions, except to the extent that a court of competent jurisdiction has made a final, non-appealable finding that liabilities (and related Expenses) of the Company have resulted from such Underwriter Indemnified Party's fraud, bad faith, gross negligence or willful misconduct in connection with any such advice, actions, inactions or services or such Underwriter Indemnified Party's breach of this Agreement or any obligations of confidentiality owed to the Company.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*5.5.* <u>Survival & Third-Party Beneficiaries</u>. The advancement, reimbursement, indemnity and contribution obligations set forth in this Section 5 shall remain in full force and effect regardless of any termination of, or the completion of any Underwriter Indemnified Party's services under or in connection with, this Agreement. Each Underwriter Indemnified Party is an intended third-party beneficiary of this Section 5, and has the right to enforce the provisions of Section 5 as if he/she/it was a party to this Agreement.

6. <u>Default by an Underwriter</u>.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*6.1. <u>Default Not Exceeding 10% of Firm Shares or Option Shares</u>.* If any Underwriter or Underwriters shall default in its or their obligations to purchase the Firm Shares or the Option Shares, if the Over-allotment Option is exercised hereunder, and if the number of the Firm Shares or Option Shares with respect to which such default relates does not exceed in the aggregate 10% of the number of Firm Shares or Option Shares that all Underwriters have agreed to purchase hereunder, then such Firm Shares or Option Shares to which the default relates shall be purchased by the non-defaulting Underwriters in proportion to their respective commitments hereunder.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*6.2. <u>Default Exceeding 10% of Firm Shares or Option Shares</u>*. In the event that the default addressed in <u>Section 6.1</u> relates to more than 10% of the Firm Shares or Option Shares, the Representative may in its discretion arrange for itself or for another party or parties satisfactory to the Company to purchase such Firm Shares or Option Shares to which such default relates on the terms contained herein. If, within one (1) Business Day after such default relating to more than 10% of the Firm Shares or Option Shares, you do not arrange for the purchase of such Firm Shares or Option Shares, then the Company shall be entitled to a further period of one (1) Business Day within which to procure another party or parties satisfactory to you to purchase said Firm Shares or Option Shares on such terms. In the event that neither you nor the Company arrange for the purchase of the Firm Shares or Option Shares to which a default relates as provided in this <u>Section 6</u>, this Agreement will automatically be terminated by you or the Company without liability on the part of the Company (except as provided in <u>Sections 8.3</u> and <u>5</u> hereof) or the several Underwriters (except as provided in <u>Section 5</u> hereof); *provided*, *however*, that if such default occurs with respect to the Option Shares, this Agreement will not terminate as to the Firm Shares; and *provided*, *further*, that nothing herein shall relieve a defaulting Underwriter of its liability, if any, to the other Underwriters and to the Company for damages occasioned by its default hereunder.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*6.3. <u>Postponement of Closing Date</u>*. In the event that the Firm Shares or Option Shares to which the default relates are to be purchased by the non-defaulting Underwriters, or are to be purchased by another party or parties as aforesaid, you or the Company shall have the right to postpone the Closing Date or Option Closing Date for a reasonable period, but not in any event exceeding five (5) Business Days, in order to effect whatever changes may thereby be made necessary in the Registration Statement, the Pricing Disclosure Package or the Prospectus or in any other documents and arrangements, and the Company agrees to file promptly any amendment to the Registration Statement, the Pricing Disclosure Package or the Prospectus that in the opinion of counsel for the Underwriter may thereby be made necessary. The term "Underwriter" as used in this Agreement shall include any party substituted under this <u>Section 6</u> with like effect as if it had originally been a party to this Agreement with respect to such Firm Shares or Option Shares.

7. <u>Additional Covenants</u>.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*7.1. <u>Right of First Refusal</u>*. If, from the date hereof until the six-month anniversary following consummation of this Offering, the Company or any of its subsidiaries (a) decides to dispose of or acquire business units or acquire any of its outstanding securities or make any exchange or tender offer or enter into a merger, consolidation or other business combination or any recapitalization, reorganization, restructuring or other similar transaction, including, without limitation, an extraordinary dividend or distributions or a spin-off or split-off, and the Company decides to retain a financial advisor for such transaction, the Representative (or any affiliate designated by the Representative) shall have the right to act as the Company's exclusive financial advisor for any such transaction; or (b) decides to finance or refinance any indebtedness using a manager or agent, the Representative (or any affiliate designated by the Representative) shall have the right to act as sole book-runner, sole manager, sole placement agent or sole agent with respect to such financing or refinancing; or (c) decides to raise funds by means of a public offering (including through an at-the-market facility) or a private placement or any other capital-raising financing of equity, equity-linked or debt securities using an underwriter or placement agent, the Representative (or any affiliate designated by the Representative) shall have the right to act as sole book-running manager, sole underwriter or sole placement agent for such financing. The Company shall provide written notice to the Representative of any proposed transaction set forth in (a)-(c) above, including a detailed term sheet. The Representative (including through its affiliates) shall have ten (10) business days following receipt of such detailed term sheet to determine whether to waive its rights under this Section 7.1. If the Representative or one of its affiliates decides to accept any such engagement, the agreement governing such engagement (each, a "Subsequent Transaction Agreement") will contain, among other things, provisions for customary fees for transactions of similar size and nature, but in no event will the fees be less than those outlined herein, and the provisions of this Agreement, including indemnification, that are appropriate to such a transaction.

8. <u>Effective Date of this Agreement and Termination Thereof</u>.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*8.1. <u>Effective Date</u>*. This Agreement shall become effective when both the Company and the Representative have executed the same and delivered counterparts of such signatures to the other party.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*8.2. <u>Termination</u>.* The Representative shall have the right to terminate this Agreement at any time prior to any Closing Date, (i) if any domestic or international event or act or occurrence has materially disrupted, or in your opinion will in the immediate future materially disrupt, general securities markets in the United States; or (ii) if trading on the New York Stock Exchange or the Nasdaq Stock Market LLC shall have been suspended or materially limited, or minimum or maximum prices for trading shall have been fixed, or maximum ranges for prices for securities shall have been required by FINRA or by order of the Commission or any other government authority having jurisdiction; or (iii) if the United States shall have become involved in a new war or an increase in major hostilities as in the reasonable judgment of the Representative is material and adverse and would make it impracticable to proceed with the offering, sale and/or delivery of the Shares or to enforce contracts made by the Underwriters for the sale of the Shares; or (iv) if a banking moratorium has been declared by a New York State or federal authority; or (v) if a moratorium on foreign exchange trading has been declared which materially adversely impacts the United States securities markets; or (vi) if the Company shall have sustained a material loss by fire, flood, accident, hurricane, earthquake, theft, sabotage or other calamity or malicious act which, whether or not such loss shall have been insured, will, in your opinion, make it inadvisable to proceed with the delivery of the Firm Shares or Option Shares; or (vii) if the Company is in material breach of any of its representations, warranties or covenants hereunder; or (viii) if the Representative shall have become aware after the date hereof of such a Material Adverse Change, or such adverse material change in general market conditions as in the Representative's judgment would make it impracticable to proceed with the offering, sale and/or delivery of the Shares or to enforce contracts made by the Underwriters for the sale of the Shares; or (ix) in the event the Exchange refuses to initiate trading or ceases trading of the Company's Shares in advance of settlement, the Representative shall have the right to terminate the Offering and return all funds invested in the Offering to the investors.

 

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*8.3. <u>Expenses</u>.* Notwithstanding anything to the contrary in this Agreement, except in the case of a default by the Underwriters, pursuant to <u>Section 6.2</u> above, in the event that this Agreement shall not be carried out for any reason whatsoever, within the time specified herein or any extensions thereof pursuant to the terms herein, the Company shall be obligated to pay to the Underwriters their actual and accountable out-of-pocket expenses related to the transactions contemplated herein then due and payable up to the amounts set forth in *Section 3.10.1* and upon demand the Company shall pay such amount thereof to the Representative on behalf of the Underwriters; *provided*, *however*, that such expense cap in no way limits or impairs the indemnification and contribution provisions of this Agreement. Notwithstanding the foregoing, any advance received by the Representative will be reimbursed to the Company to the extent not actually incurred in compliance with FINRA Rule 5110(g)(4)(A).

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*8.4. <u>Indemnification</u>*. Notwithstanding any contrary provision contained in this Agreement, any election hereunder or any termination of this Agreement, and whether or not this Agreement is otherwise carried out, the provisions of <u>Section 5</u> shall remain in full force and effect and shall not be in any way affected by, such election or termination or failure to carry out the terms of this Agreement or any part hereof.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*8.5. <u>Representations, Warranties, Agreements to Survive</u>*. All representations, warranties and agreements contained in this Agreement or in certificates of officers of the Company submitted pursuant hereto, shall remain operative and in full force and effect regardless of (i) any investigation made by or on behalf of any Underwriter or its Affiliates or selling agents, any person controlling any Underwriter, its officers or directors or any person controlling the Company or (ii) delivery of and payment for the Shares.

9. <u>Miscellaneous</u>.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*9.1. <u>Notices</u>.* All communications hereunder, except as herein otherwise specifically provided, shall be in writing and shall be mailed (registered or certified mail, return receipt requested), emailed, personally delivered or sent by facsimile transmission and confirmed and shall be deemed given when so delivered or faxed and confirmed or if mailed, two (2) days after such mailing.

If to the Representative:

**Spartan Capital Securities, LLC**

45 Broadway, 19<sup>th</sup> Floor

New York, NY 10006

Attn: [●]

Email: [●]

 

*With a copy (which shall not constitute notice) to:*

**ArentFox Schiff LLP**

1717 K Street, NW

Washington, DC 20006

Attention: Cavas S. Pavri, Esq.

Fax No: (202) 778-6460

If to the Company:

**Amatuhi Holdings, Inc.**

[●]

Attention: [●]

Email: [●]

 

*With a copy (which shall not constitute notice) to*:

**Law Offices of T. J. Jesky**

205 N. Michigan Ave., Suite 810

Chicago, IL 60601-5902

Attention: T.J. Jesky, Esq.

Email: tj@jeskylaw.com

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*9.2. <u>Headings</u>.* The headings contained herein are for the sole purpose of convenience of reference, and shall not in any way limit or affect the meaning or interpretation of any of the terms or provisions of this Agreement.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*9.3. <u>Amendment</u>.* This Agreement may only be amended by a written instrument executed by each of the parties hereto.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*9.4. <u>Entire Agreement</u>.* This Agreement (together with the other agreements and documents being delivered pursuant to or in connection with this Agreement) constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and thereof, and supersedes all prior agreements and understandings of the parties, oral and written, with respect to the subject matter hereof. Notwithstanding anything to the contrary set forth herein, it is understood and agreed by the parties hereto that all other terms and conditions of that certain engagement letter between the Company and Representative dated as of July 15, 2025 shall remain in full force and effect to the extent such terms do not conflict with the terms of this Agreement. In the event of any conflict between the terms of this Agreement and the Engagement Letter, the terms of this Agreement shall control.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*9.5. <u>Binding Effect</u>.* This Agreement shall inure solely to the benefit of and shall be binding upon the Representative, the Underwriters, the Company and the controlling persons, directors and officers referred to in <u>Section 5</u> hereof, and their respective successors, legal representatives, heirs and assigns, and no other person shall have or be construed to have any legal or equitable right, remedy or claim under or in respect of or by virtue of this Agreement or any provisions herein contained. The term "successors and assigns" shall not include a purchaser, in its capacity as such, of securities from any of the Underwriters.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*9.6. <u>Governing Law; Consent to Jurisdiction; Trial by Jury</u>.* This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York, without giving effect to conflict of laws principles thereof. The Company hereby agrees that any action, proceeding or claim against it arising out of, or relating in any way to this Agreement shall be brought and enforced in the New York, New York, or in the United States District Court located in New York, New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. The Company hereby waives any objection to such exclusive jurisdiction and waives any claim that such courts represent an inconvenient forum. Any such process or summons to be served upon the Company may be served by transmitting a copy thereof by registered or certified mail, return receipt requested, postage prepaid, addressed to it at the address set forth in <u>Section 9.1</u> hereof. Such mailing shall be deemed personal service and shall be legal and binding upon the Company in any action, proceeding or claim. The Company agrees that the prevailing party(ies) in any such action shall be entitled to recover from the other party(ies) all of its reasonable attorneys' fees and expenses relating to such action or proceeding and/or incurred in connection with the preparation therefor. The Company (on its behalf and, to the extent permitted by applicable law, on behalf of its shareholders and affiliates) and each of the Underwriters hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*9.7. <u>Execution in Counterparts</u>.* This Agreement may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement, and shall become effective when one or more counterparts has been signed by each of the parties hereto and delivered to each of the other parties hereto. Delivery of a signed counterpart of this Agreement by facsimile or email/pdf transmission shall constitute valid and sufficient delivery thereof.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*9.8. <u>Waiver, etc</u>*. The failure of any of the parties hereto to at any time enforce any of the provisions of this Agreement shall not be deemed or construed to be a waiver of any such provision, nor to in any way effect the validity of this Agreement or any provision hereof or the right of any of the parties hereto to thereafter enforce each and every provision of this Agreement. No waiver of any breach, non-compliance or non-fulfillment of any of the provisions of this Agreement shall be effective unless set forth in a written instrument executed by the party or parties against whom or which enforcement of such waiver is sought; and no waiver of any such breach, non-compliance or non-fulfillment shall be construed or deemed to be a waiver of any other or subsequent breach, non-compliance or non-fulfillment.

 

*[Signature Page Follows]*

 

If the foregoing correctly sets forth the understanding between the Underwriters and the Company, please so indicate in the space provided below for that purpose, whereupon this letter shall constitute a binding agreement between us.

---

| |
|:---|
| Very truly yours, |
| **Amatuhi Holdings, Inc.** |
| By: |
| Name: |
| Title: |

---

Confirmed as of the date first written above mentioned, on behalf of itself and as Representative of the several Underwriters named on <u>Schedule 1</u> hereto:

---

| |
|:---|
| **Spartan Capital Securities, LLC** |
| By: |
| Name: |
| Title: |

---

**<u>SCHEDULE 1</u>**

---

| | | |
|:---|:---|:---|
| ***Underwriter*** | **Total<br> Number of<br> Firm Shares<br> to be<br> Purchased** | **Number of Additional<br> Option Shares to be<br> Purchased if the Over-<br> Allotment Option is<br> Fully Exercised** |
| **Spartan Capital Securities, LLC** | [●] | [●] |
| **TOTAL** | [●] | [●] |

---

**<u>SCHEDULE 2-A</u>**

**Pricing Information**

Number of Firm Shares: [●]

Number of Option Shares: [●]

Public Offering Price per Firm Share: $[●]

Public Offering Price per Option Share: $[●]

Underwriting Discount per Firm Share: $[●]

Underwriting Discount per Option Share: $[●]

**<u>SCHEDULE 2-B</u>**

**Issuer General Use Free Writing Prospectuses**

[●]

**<u>SCHEDULE 3</u>**

**List of Lock-Up Parties**

**[●]**

**<u>EXHIBIT A</u>**

**Form of Lock-Up Agreement**

**Lock-Up Agreement**

______, 2025

Spartan Capital Securities, LLC (the "**<u>Representative</u>**")

45 Broadway, 19<sup>th</sup> Floor

New York, NY 10006

Ladies and Gentlemen:

The undersigned, a holder of common stock, par value $0.000001 ("**<u>Common Stock</u>**"), or rights to acquire Common Stock, of Amatuhi Holdings, Inc. (the "**<u>Company</u>**") understands that you, as Representative of the several Underwriters, propose to enter into an Underwriting Agreement (the "**<u>Underwriting Agreement</u>**") with the Company, providing for the public offering (the "**<u>Public Offering</u>**") by the several Underwriters named a schedule to the Underwriting Agreement (the "**<u>Underwriters</u>**"), of shares of Common Stock of the Company (the "**<u>Securities</u>**"). Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Underwriting Agreement.

In consideration of the Underwriters' agreement to enter into the Underwriting Agreement and to proceed with the Public Offering of the Securities, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the undersigned hereby agrees for the benefit of the Company, you and the other Underwriters that, without the prior written consent of the Representative on behalf of the Underwriters, the undersigned will not, during the period commencing on the date hereof and ending **<u>180 days</u>** after the date of the final prospectus (the "**<u>Prospectus</u>**") relating to the Public Offering (the "**<u>Lock-Up Period</u>**"), (1) offer, pledge, sell, contract to sell, grant, lend, or otherwise transfer or dispose of, directly or indirectly, any Common Stock, any securities convertible into or exercisable or exchangeable for Common Stock, whether now owned or hereafter acquired by the undersigned or with respect to which the undersigned has or hereafter acquires the power of disposition (collectively, the "**<u>Lock-Up Securities</u>**"); (2) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Lock-Up Securities, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Lock-Up Securities, in cash or otherwise; (3) make any demand for or exercise any right with respect to the registration of any Lock-Up Securities; or (4) publicly disclose the intention to make any offer, sale, pledge or disposition, or to enter into any transaction, swap, hedge or other arrangement relating to any Lock-Up Securities.

Notwithstanding the foregoing, and subject to the conditions below, the undersigned may transfer Lock-Up Securities without the prior written consent of the Representative in connection with (a) transfers of Lock-Up Securities as a *bona fide* gift, by will or intestacy or to a family member or trust for the benefit of a family member (for purposes of this lock-up agreement, "family member" means any relationship by blood, marriage or adoption, not more remote than first cousin); (b) transfers of Lock-Up Securities to a charity or educational institution; or (c) if the undersigned, directly or indirectly, controls a corporation, partnership, limited liability company or other business entity, any transfers of Lock-Up Securities to any shareholder, partner or member of, or owner of similar equity interests in, the undersigned, as the case may be; <u>provided</u> that in the case of any transfer pursuant to the foregoing clauses, (i) any such transfer shall not involve a disposition for value, (ii) each transferee shall sign and deliver to the Representative a lock-up agreement substantially in the form of this lock-up agreement and (iii) no filing under Section 16(a) of the Securities Exchange Act of 1934, as amended (the "**<u>Exchange Act</u>**") shall be required or shall be voluntarily made. The undersigned also agrees and consents to the entry of stop transfer instructions with the Company's transfer agent and registrar against the transfer of the undersigned's Lock-Up Securities except in compliance with this lock-up agreement.

Any release or waiver granted by the Representative hereunder shall only be effective two (2) business days after the publication date of a press release announcing such release or waiver. The provisions of this paragraph will not apply if (a) the release or waiver is effected solely to permit a transfer of Lock-Up Securities not for consideration and (b) the transferee has agreed in writing to be bound by the same terms described in this lock-up agreement to the extent and for the duration that such terms remain in effect at the time of such transfer.

No provision in this agreement shall be deemed to restrict or prohibit the exercise, exchange or conversion by the undersigned of any securities exercisable or exchangeable for or convertible into Common Stock, as applicable; <u>provided</u> that the undersigned does not transfer the Common Stock acquired on such exercise, exchange or conversion during the Lock-Up Period, unless otherwise permitted pursuant to the terms of this lock-up agreement. In addition, no provision herein shall be deemed to restrict or prohibit the entry into or modification of a so-called "10b5-1" plan at any time (other than the entry into or modification of such a plan in such a manner as to cause the sale of any Lock-Up Securities within the Lock-Up Period).

The undersigned understands that the Company and the Underwriters are relying upon this lock-up agreement in proceeding toward consummation of the Public Offering. The undersigned further understands that this lock-up agreement is irrevocable and shall be binding upon the undersigned's heirs, legal representatives, successors and assigns.

The undersigned understands that, if the Underwriting Agreement is not executed within 90 days of the date hereof, or if the Underwriting Agreement (other than the provisions thereof which survive termination) shall terminate or be terminated prior to payment for and delivery of the Shares to be sold thereunder, then this lock-up agreement shall be void and of no further force or effect.

Whether or not the Public Offering actually occurs depends on a number of factors, including market conditions. Any Public Offering will only be made pursuant to an Underwriting Agreement, the terms of which are subject to negotiation between the Company and the Underwriters.

[SIGNATURE PAGE TO FOLLOW]

---

| |
|:---|
| Very truly yours, |
| (Name - Please Print) |
| (Signature) |
| (Name of Signatory, in the case of entities - Please Print) |
| (Title of Signatory, in the case of entities - Please Print) |

---

Address: