SBC Medical Group Holdings Incorporated

It is now the scheduled time. I'd like to begin today's session. Thank you very much for taking time out of your busy schedule to join the earning briefing of SBC Medical Group Holdings. Today, we will be presenting our third quarter financial results, business progress, and capital policy. At the bottom of your screen, you will find the question box. If you have any questions, please enter them briefly and concisely We will address them after the presentation. Now, I would like to hand the presentation over to our CFO, Mr. Yoshida. Mr. Yoshida, the floor is yours.

Good afternoon. I'm Yuya Yoshida, CFO of SBC Medical Group Boardings. Thank you very much for joining our conference call today despite your busy schedules. I will now walk you through our results for the third quarter the progress of our business and our capital policy. It's time on slide five. OK. First, regarding our franchisee clinic performance. We added the non-web clinic. to 258 clinics by 34 locations increase. And the annual number of customers continue to increase steadily and has now expanded to approximately 6.5 million. Next, please. I'm going to touch up on the ability to spend power for customers. The graph on the left shows the quarterly trend of average spend per customer. As you can see, thanks to initiatives such as pricing and promotion strategy optimization and our multi-brand strategy in the dermatology segment, which has successfully captured high spending customer groups, the overall average living per customer visit is clearly showing signs of recovery. We intend to sustain this positive trend by accurately capturing customer needs and continuing to provide high-quality, high-satisfaction services. Next, please. Next, financial performance for the third quarter. Sales had been affected by a restriction and a division to franchise fees. but have since bottomed out, supported by an increase in points-related revenues. Additionally, the decline in listing-related costs, including share-based compensation expenses, contributed to a tolerance in both operating income and net income. From here, we aim to place the company firmly back on a sustainable growth trajectory. Next, please. We are pleased to announce that our first step in entering into Thailand is through a partnership with BlazeAzure. We have entered into a consulting agreement with BlazeAzure Corporate Limited, a company with more than 10 years of experience on the network of over 25 mainly in Thailand, to provide laser treatment at affordable price. By deepening our collaboration with Space Asia, we will accelerate our full-scale entry into Thailand's rapidly growing aesthetic medical market. Next, please. Yes, regarding our initiative for Waku, Recently, we announced the commencement of a tender offer to acquire majority stake in Waku, which engages in R&D for regenerative medicine and skincare product with the goal of making it a subsidiary. By combining the strengths of both companies, we aim to enhance the speed and innovation of our R&D and expand new treatments, and unique service offerings in clinical areas such as AGA and orthopedics. Through this initiative, we seek to strengthen the group's overall competitiveness and achieve sustainable growth for both companies. Next, please. Next, I'm going to touch upon the balance sheet. We maintain our sound and robust financial views with sufficient cash and deposits. To further accelerate growth, building strong relationships with financial institutions is essential. Recently, we utilized bank financing for work and capital purposes. Our ample liquidity will continue to be actively deployed for strategic investments, including both organic growth and M&A in Japan and overseas. Finally, regarding our capital policy, we recognize that the liquidity of our shares is too low. making it difficult for many institutional investors to trade. To address this, we will work on improving supply and demand and pursue measures such as new share insurance and partial sales held by the founders. This will help create a more investment-friendly environment for a broader range of investors. That concludes my presentation. Thank you very much for your attention.

Thank you very much, Mr. Yoshida. So we will now move on to the Q1 session. Here is the first question. Why was COGS elaborated during Q3 2025? And when do you expect a franchise fee division impact to be clearly absorbed going forward? Thank you.