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PicoCELA Inc.

PicoCELA Inc.PCLAEarnings & Financial Report

Nasdaq

PicoCELA Inc. is a global technology company specializing in low-power, high-reliability wireless connectivity solutions, including Wi-Fi HaLow modules and edge network infrastructure. It caters to industrial IoT, smart city, retail, and smart home segments, with a primary operational footprint across Asia, North America, and European markets.

What changed in PicoCELA Inc.'s 20-F — 2024 vs 2025

Top changes in PicoCELA Inc.'s 2025 20-F

305 paragraphs added · 226 removed · 186 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

42 edited+17 added−10 removed292 unchanged
Such volatility, including any stock run-ups, 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 the ADSs.
Such volatility, including any stock run-ups, 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 the ADSs.
Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”) requires that we include a report of management on our internal control over financial reporting in our annual report on Form 20-F beginning with our second annual report following the completion of our initial public offering.
Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”) requires that we include a report of management on our internal control over financial reporting in our annual report on Form 20-F beginning with our second annual report following the completion of our initial public offering (“IPO”).
The enterprise mesh Wi-Fi access points market in Japan is highly competitive. Our industry of enterprise mesh Wi-Fi access points in Japan are dominated by a few global market leaders, such as Cisco’s Meraki and Hewlett Packard’s Aruba.
The enterprise mesh Wi-Fi access points market in Japan is highly competitive. Our industry of enterprise mesh Wi-Fi access points in Japan is dominated by a few global market leaders, such as Cisco’s Meraki and Hewlett Packard’s Aruba.
This is mainly because our ability to manufacture and deliver our products to the market has recovered from the shortage of Wi-Fi Chips which caused a delay to our product launch and delivery of our products to the market.
This is mainly because our ability to manufacture and deliver our products to the market has recovered from the shortage of Wi-Fi Chips which caused a delay in our product launch and delivery of our products to the market.
As our sales volume increases, our dependence on our major distributors’ sales network increases. 21 Distributors assist us in marketing and sales, as well as collecting customers’ feedback and advice related to PCWL series .
As our sales volume increases, our dependence on our major distributors’ sales network increases. Distributors assist us in marketing and sales, as well as collecting customers’ feedback and advice related to PCWL series .
Depending on our operations, together with any other assets held for the production of passive income, it is possible that, for our 2025 taxable year or for any subsequent year, more than 50% of our assets may be assets which produce passive income, in which case we would be deemed a PFIC, which could have adverse U.S. federal income tax consequences for U.S. taxpayers who are shareholders.
Depending on our operations, together with any other assets held for the production of passive income, it is possible that, for our 2026 taxable year or for any subsequent year, more than 50% of our assets may be assets which produce passive income, in which case we would be deemed a PFIC, which could have adverse U.S. federal income tax consequences for U.S. taxpayers who are shareholders.
Quality or performance failures of our products or changes in our manufacturers’ financial or business condition could disrupt our ability to supply quality products to our customers and thereby have a material and adverse effect on our business and operating results. 18 For the fiscal years ended September 30, 2024, 2023, and 2022, we relied on three, two, and three manufacturers, respectively, to manufacture our PCWL series .
Quality or performance failures of our products or changes in our manufacturers’ financial or business condition could disrupt our ability to supply quality products to our customers and thereby have a material and adverse effect on our business and operating results. 18 For the fiscal years ended September 30, 2025, 2024, and 2023, we relied on three, three, and two manufacturers, respectively, to manufacture our PCWL series .
Our international sales plan may also fail due to other risks inherent in foreign operations, including: ● varied, unfamiliar, unclear, and changing legal and regulatory restrictions, including different legal and regulatory standards applicable to the enterprise mesh Wi-Fi access points industry; ● compliance with multiple and potentially conflicting regulations; ● difficulties in staffing and managing foreign operations; ● longer collection cycles; ● differing intellectual property laws that may not provide sufficient protections for our intellectual property; ● proper compliance with local tax laws, which can be complex and may result in unintended adverse tax consequences; 16 ● localized spread of infection resulting from a global pandemic, including any economic downturn and other adverse impacts; ● difficulties in enforcing agreements in foreign legal systems; ● impact of different enterprise mesh Wi-Fi access points trends in different regions; ● fluctuations in currency exchange rates that may affect mesh Wi-Fi access points demand and may adversely affect the profitability in JPY of mesh Wi-Fi access points provided by us in foreign markets where payment for our mesh Wi-Fi access points is made in the local currency; ● changes in general economic, health, and political conditions in countries where our mesh Wi-Fi access points are sold; ● potential labor strikes, lockouts, work slowdowns, and work stoppages; and ● different consumer preferences and requirements in specific international markets.
Our international sales plan may also fail due to other risks inherent in foreign operations, including: ● varied, unfamiliar, unclear, and changing legal and regulatory restrictions, including different legal and regulatory standards applicable to the enterprise mesh Wi-Fi access points industry; ● laws and policies affecting trade, investment and taxes, including tariffs; ● compliance with multiple and potentially conflicting regulations; ● difficulties in staffing and managing foreign operations; ● longer collection cycles; ● differing intellectual property laws that may not provide sufficient protections for our intellectual property; ● proper compliance with local tax laws, which can be complex and may result in unintended adverse tax consequences; 16 ● localized spread of infection resulting from a global pandemic, including any economic downturn and other adverse impacts; ● difficulties in enforcing agreements in foreign legal systems; ● impact of different enterprise mesh Wi-Fi access points trends in different regions; ● fluctuations in currency exchange rates that may affect mesh Wi-Fi access points demand and may adversely affect the profitability in JPY of mesh Wi-Fi access points provided by us in foreign markets where payment for our mesh Wi-Fi access points is made in the local currency; ● changes in general economic, health, and political conditions in countries where our mesh Wi-Fi access points are sold; ● potential labor strikes, lockouts, work slowdowns, and work stoppages; and ● different consumer preferences and requirements in specific international markets.
While we may have certain contractual remedies against them, if any of our major manufacturers becomes unable or unwilling to continue to manufacture our PCWL series , such remedies may not be sufficient in scope, we may not be able to effectively enforce such remedies, and we may incur significant costs in enforcing such remedies. See “Item 4.
While we may have certain contractual remedies against them, if any of our major manufacturers become unable or unwilling to continue to manufacture our PCWL series , such remedies may not be sufficient in scope, we may not be able to effectively enforce such remedies, and we may incur significant costs in enforcing such remedies. See “Item 4.
The license has been renewed periodically without interruption since its inception of April 1, 2014, and the current licensing term ends on March 31, 2025, subject to renewal, pursuant to terms and conditions of the license agreement between us and Kyushu University. See “Item 4. Information on the Company—B.
The license has been renewed periodically without interruption since its inception of April 1, 2014, and the current licensing term ends on March 31, 2028, subject to renewal, pursuant to terms and conditions of the license agreement between us and Kyushu University. See “Item 4. Information on the Company—B.
We have not been profitable and have incurred negative cash flows in operating activities, both of which may continue in the future. During the fiscal years ended September 30, 2024, 2023, and 2022, we recorded a net loss.
We have not been profitable and have incurred negative cash flows in operating activities, both of which may continue in the future. During the fiscal years ended September 30, 2025, 2024, and 2023, we recorded a net loss.
The revenue generated from our development and sales of our mesh Wi-Fi access points, PCWL series , have been uncertain and volatile, depending on our ability to obtain stable supply of Wi-Fi Chips sufficient to meet our manufacturing need.
The revenue generated from our development and sales of our mesh Wi-Fi access points, PCWL series , have been uncertain and volatile, depending on our ability to obtain stable supply of Wi-Fi Chips sufficient to meet our manufacturing needs.
One major obstacle to implement this growth strategy is maintaining low production cost of our PBE module to meet our customer’s pricing requirement of their own products, in which our PBE module is installed.
One major obstacle to implement this growth strategy is maintaining low production cost of our PBE module to meet our customers’ pricing requirement of their own products, in which our PBE module is installed.
We plan to continue to expand our operations into Europe in December 2025 and the United States in June 2026. See “Item 4. Information on the Company—B.
We plan to continue to expand our operations into Europe in December 2026 and the United States in June 2028. See “Item 4. Information on the Company—B.
We mainly rely on those professionals to provide them with their knowledge and experience regarding their end user customers and the customer input gained from their marketing and sale of our PCWL series . Approximately 68%, 88%, and 65% of our sales were made through our distributors for the fiscal years ended September 30, 2024, 2023, and 2022, respectively.
We mainly rely on those professionals to provide them with their knowledge and experience regarding their end user customers and the customer input gained from their marketing and sale of our PCWL series . Approximately 94%, 68%, and 88% of our sales were made through our distributors for the fiscal years ended September 30, 2025, 2024, and 2023, respectively.
As of the date of this annual report, of total 42 patents of inventions, 21 patents of inventions are registered and owned by Kyushu University and exclusively licensed to us. Another 21 patents of inventions are registered and owned by us.
As of the date of this annual report, of total 51 patents of inventions, 21 patents of inventions are registered and owned by Kyushu University and exclusively licensed to us. Another 30 patents of inventions are registered and owned by us.
As of the date of this annual report, of total 42 patents of inventions, 21 patents of inventions are registered and owned by Kyushu University and exclusively licensed to us. Another 21 patents of inventions are registered and owned by us.
As of the date of this annual report, of total 51 patents of inventions, 21 patents of inventions are registered and owned by Kyushu University and exclusively licensed to us. Another 30 patents of inventions are registered and owned by us.
However, we do not have insurance coverage against potential losses or damages with respect to business interruption. Our contractors may not be sufficiently insured themselves or have the financial ability to absorb any losses that may arise with respect to our products and services or pay our claims.
We currently maintain fire insurance, life insurance, and product liability insurance. However, we do not have insurance coverage against potential losses or damages with respect to business interruption. Our contractors may not be sufficiently insured themselves or have the financial ability to absorb any losses that may arise with respect to our products and services or pay our claims.
To date, we have funded our investment in our third-party manufactured inventory of products primarily through short-term bank loans, typically with terms ranging from one to four months, and we have funded our general and administrative expenses using cash generated from our operations. As of September 30, 2024, we had approximately JPY217,970 thousand (approximately $1,522 thousand) in short-term borrowings outstanding.
To date, we have funded our investment in our third-party manufactured inventory of products primarily through short-term bank loans, typically with terms ranging from one to four months, and we have funded our general and administrative expenses using cash generated from our operations. As of September 30, 2025, we had approximately JPY261,940 thousand (approximately $1,629 thousand) in short-term borrowings outstanding.
For the fiscal year ended September 30, 2024 and a s of the date of this annual report, the shortage of Wi-Fi Chips has been alleviated and our supply chain has resumed normal activities.
For the fiscal year ended September 30, 2025 and as of the date of this annual report, the shortage of Wi-Fi Chips has been alleviated and our supply chain has resumed normal activities.
As of September 30, 2024, 2023, and 2022, the Company had net operating loss carryforwards in Japan of approximately JPY2,354 million (approximately $16 million), JPY1,748 million (approximately $12 million), and JPY1,091 million, respectively, which can be carried forward to offset future taxable income.
As of September 30, 2025, 2024, and 2023, the Company had net operating loss carryforwards in Japan of approximately JPY3,249 million (approximately $22 million), JPY2,354 million, and JPY1,748 million, respectively, which can be carried forward to offset future taxable income.
In recent years, the economic indicators in Japan have shown mixed signs, and the future growth of the Japanese economy is subject to many factors beyond our control. The Japanese government has introduced policies to combat deflation and promote economic growth.
In recent years, the economic indicators in Japan have shown mixed signs, and the future growth of the Japanese economy is subject to many factors beyond our control.
During the fiscal year ended September 30, 2024, we repaid JPY 469 million (approximately $ 3 million), and newly borrowed JPY 461 million (approximately $ 3 million) in our short-term borrowings. As of September 30, 2023, we had approximately JPY215,000 thousand (approximately $1,422 thousand) in short-term borrowings outstanding.
During the fiscal year ended September 30, 2024, we repaid JPY469 million, and newly borrowed JPY461 million in our short-term borrowings. As of September 30, 2023, we had approximately JPY215,000 thousand in short-term borrowings outstanding.
During the fiscal years ended September 30, 2024, 2023, and 2022, the net loss was JPY479,921 thousand (approximately $3,350 thousand), JPY633,956 thousand (approximately $4,426 thousand), and JPY5,180 thousand, respectively. See “Item 5. Operating and Financial Review and Prospects—A. Operating Results” and audited financial statements for the fiscal years ended September 30, 2024, 2023, and 2022.
During the fiscal years ended September 30, 2025, 2024, and 2023, the net loss was JPY626,312 thousand (approximately $4,233 thousand), JPY479,921 thousand, and JPY633,956 thousand, respectively. See “Item 5. Operating and Financial Review and Prospects—A. Operating Results” and audited financial statements for the fiscal years ended September 30, 2025, 2024, and 2023.
During the fiscal year ended September 30, 2022, we repaid JPY6,588 thousand and renewed JPY5,728 thousand of our short-term borrowings. We expect that we will be able to renew all of the existing bank loans upon their maturity based on our past experience and credit history.
During the fiscal year ended September 30, 2023, we repaid JPY100,728 thousand and newly borrowed JPY220,000 thousand in our short-term borrowings. 7 We expect that we will be able to renew all of the existing bank loans upon their maturity based on our past experience and credit history.
In addition, we have only entered into written distribution agreements with a limited number of major domestic distributors. Accordingly, at any time, the distributors can reduce the quantities of products they order from us, or cease purchasing products from us. Such reductions or terminations could have a material adverse impact on our revenue, profits, and financial condition.
In addition, we have only entered into written distribution agreements with a limited number of major domestic distributors. Accordingly, at any time, the distributors can reduce the quantities of products they order from us, or cease purchasing products from us.
If Nasdaq subsequently delists the ADSs from trading, we could face significant consequences, including: ● a limited availability for market quotations for the ADSs; ● reduced liquidity with respect to the ADSs; ● a determination that the ADS is a “penny stock,” which will require brokers trading in the ADSs to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for the ADSs; ● limited amount of news and analyst coverage; and ● a decreased ability to issue additional securities or obtain additional financing in the future.
If this were to occur, we could face significant material adverse consequences, including: (a) a limited availability of market quotations for the ADSs; (b) reduced liquidity for the ADSs; (c) a significant reduction in the trading price of our ADSs; (d) a determination that the ADSs are “penny stock,” which will require brokers trading in the ADSs to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for the ADSs; (e) a limited amount of news and analyst coverage; and (f) a decreased ability to issue additional securities or obtain additional financing in the future.
We are an “emerging growth company” within the meaning of the Securities Act, and we have taken advantage of certain exemptions from disclosure requirements available to emerging growth companies, this will make it more difficult to compare our performance with other public companies.
We intend to comply with the requirements of Nasdaq Listing Rules in determining whether shareholder approval is required on such matters. 27 We are an “emerging growth company” within the meaning of the Securities Act, and we have taken advantage of certain exemptions from disclosure requirements available to emerging growth companies, this will make it more difficult to compare our performance with other public companies.
If we are unable to adequately protect our brand, trademarks, and other intellectual property rights, our reputation may be harmed and our business may be adversely affected. We do not have sufficient insurance to cover potential losses and claims. We currently maintain fire insurance, life insurance, and product liability insurance.
Monitoring and preventing unauthorized use are difficult. The measures we take to protect our intellectual property rights may not be adequate. If we are unable to adequately protect our brand, trademarks, and other intellectual property rights, our reputation may be harmed and our business may be adversely affected. We do not have sufficient insurance to cover potential losses and claims.
In addition, as of September 30, 2024, 2023, and 2022, we had accumulated deficit of JPY2,202,668 thousand (approximately $15,376 thousand), JPY1,722,747 thousand (approximately $12,026 thousand), and JPY1,088,791 thousand, respectively.
In addition, as of September 30, 2025, 2024, and 2023, we had accumulated deficit of JPY2,828,980 thousand (approximately $19,119 thousand), JPY2,202,668 thousand, and JPY1,722,747 thousand, respectively.
As of the date of this annual report, 24,683,860 of our Common Shares are issued and outstanding, and 3,750,040 ADSs (representing 3,750,040 Common Shares) are issued, outstanding, and freely tradeable.
As of the date of this annual report, 4,153,805 of our Common Shares are issued and outstanding, and 493,026 ADSs (representing 493,026 Common Shares) are issued, outstanding, and freely tradeable.
For the fiscal years ended September 30, 2024, 2023, and 2022, revenue generated from sales of our mesh Wi-Fi access points, PCWL series was JPY625,482 thousand (approximately $4,366 thousand), JPY465,691 thousand (approximately $3,251 thousand), and JPY540,857 thousand (approximately $3,776 thousand), respectively, accounting for approximately 79.7%, 83.2%, and 79.3% of our total revenue, respectively.
For the fiscal years ended September 30, 2025, 2024, and 2023, revenue generated from sales of our mesh Wi-Fi access points, PCWL series was JPY447,069 thousand (approximately $3,021 thousand), JPY627,720 thousand, and JPY465,691 thousand, respectively, accounting for approximately 82.1%, 80.0%, and 83.2% of our total revenue, respectively.
In addition, limitations imposed by applicable law on our ability to utilize net operating loss carryforwards could cause income taxes to be paid earlier than these taxes would be paid if such limitations were not in effect, thereby reducing or eliminating the benefit of such net operating loss carryforwards.] We expect to continue the development and expansion of our business, particularly to invest significantly in upgrading our Wi-Fi access point hardware products to meet various industrial needs, and these investments may not result in an increase in revenue or positive cash flow on a timely basis, or at all.
We expect to continue the development and expansion of our business, particularly to invest significantly in upgrading our Wi-Fi access point hardware products to meet various industrial needs, and these investments may not result in an increase in revenue or positive cash flow on a timely basis, or at all.
They also may be able to develop and deploy malicious software programs that attack our technology and/or operating systems or otherwise exploit any security vulnerabilities.
Experienced computer programmers and hackers may be able to penetrate our security controls and misappropriate or compromise sensitive proprietary or confidential information, create system disruptions or cause shutdowns. They also may be able to develop and deploy malicious software programs that attack our technology and/or operating systems or otherwise exploit any security vulnerabilities.
During the fiscal year ended September 30, 2023, we repaid JPY100,728 thousand (approximately $666 thousand) and newly borrowed JPY220,000 thousand (approximately $1,455 thousand) in our short-term borrowings. 7 As of September 30, 2022, we had approximately JPY95,728 thousand in short-term borrowings outstanding.
During the fiscal year ended September 30, 2025, we repaid JPY243 million (approximately $1.6 million), and newly borrowed JPY287 million (approximately $1.9 million) in our short-term borrowings. As of September 30, 2024, we had approximately JPY217,970 thousand in short-term borrowings outstanding.
As of September 30, 2024, we had approximately JPY186,650 thousand (approximately $1,303 thousand) in short-term borrowings and JPY59,604 thousand (approximately $416 thousand) in long-term borrowings outstanding.
As of September 30, 2025, we had approximately JPY261,940 thousand (approximately $1,770 thousand) in short-term borrowings and JPY10,436 thousand (approximately $71 thousand) in long-term borrowings outstanding.
We currently own eight trademarks for mesh Wi-Fi access points products and related services in Japan, have registered or been licensed to 16 patents in Japan, 10 patents in the U.S., six patents in Europe, four patents in mainland China, four patents in Taiwan, and one patent in Australia, respectively, and have eight trademarks in Japan.
We currently have registered or been licensed to 22 patents in Japan, 12 patents in the U.S., seven patents in Europe, five patents in mainland China, four patents in Taiwan, and one patent in Australia, respectively, and one pending patent application in Japan.
We believe our brand, trademarks, and other intellectual property rights are important to our success. Any unauthorized use of our brand, trademarks, and other intellectual property rights could harm our competitive advantages and business. Monitoring and preventing unauthorized use are difficult. The measures we take to protect our intellectual property rights may not be adequate.
Business Overview—Intellectual Property.” We rely on the Japanese and U.S. intellectual property and anti-unfair competition laws and contractual restrictions to protect our brand name and trademarks. We believe our brand, trademarks, and other intellectual property rights are important to our success. Any unauthorized use of our brand, trademarks, and other intellectual property rights could harm our competitive advantages and business.
We believe the availability of third-party software depends in part on the developers’ perception and analysis of the relative benefits of developing, maintaining, and upgrading such software and services.
Currently, PicoManager primarily serves as a cloud platform for enterprise customers to install proprietary edge-computing software into PCWL mesh Wi-Fi access points. We believe the availability of third-party software depends in part on the developers’ perception and analysis of the relative benefits of developing, maintaining, and upgrading such software and services.
If we sustain cyber-attacks or other privacy or data security incidents that result in security breaches, we could be subject to increased costs, liabilities, reputational harm, or other negative consequences. We may be subject to cyber-attacks, viruses, malicious software, break-ins, theft, computer hacking, phishing, employee error or malfeasance, or other security breaches.
Such reductions or terminations could have a material adverse impact on our revenue, profits, and financial condition. 21 If we sustain cyber-attacks or other privacy or data security incidents that result in security breaches, we could be subject to increased costs, liabilities, reputational harm, or other negative consequences.
We have one pending trademark application in Japan and one in the U.S., as of the date of this annual report. See “Item 4. Information on the Company—B. Business Overview—Intellectual Property.” We rely on the Japanese and U.S. intellectual property and anti-unfair competition laws and contractual restrictions to protect our brand name and trademarks.
We have eight trademarks for mesh Wi-Fi access points products and related services in Japan and four pending trademark applications in the U.S., as of the date of this annual report. See “Item 4. Information on the Company—B.
Hackers and data thieves are increasingly sophisticated and operate large-scale and complex automatic hacks. Experienced computer programmers and hackers may be able to penetrate our security controls and misappropriate or compromise sensitive proprietary or confidential information, create system disruptions or cause shutdowns.
We may be subject to cyber-attacks, viruses, malicious software, break-ins, theft, computer hacking, phishing, employee error or malfeasance, or other security breaches. Hackers and data thieves are increasingly sophisticated and operate large-scale and complex automatic hacks.
Removed
Currently, PicoManager primarily serves as a cloud platform for enterprise customers to install proprietary edge-computing software into PCWL mesh Wi-Fi access points. However, by March 2026, we plan to transform PicoManager into an online software store.
Added
In addition, limitations imposed by applicable law on our ability to utilize net operating loss carryforwards could cause income taxes to be paid earlier than these taxes would be paid if such limitations were not in effect, thereby reducing or eliminating the benefit of such net operating loss carryforwards.
Removed
This store will enable third-party software developers to sell a variety of edge-computing software tailored to the needs of specific industries, such as construction, large-scale plants, and outdoor facilities, to our PicoManager users. See “Item 4. Information on the Company—B.
Added
The number of Common Shares here reflects (i) a 60-for-1 forward split of our Common Shares effective October 24, 2024, and (ii) a 1-for-30 reverse split of our Common Shares effective January 26, 2026.
Removed
Business Overview—Our Growth Strategies—Expanding PicoManager , our SaaS model.” There can be no assurance third-party developers will be willing to sell their software through our store or if so, continue to develop and maintain software in our store.
Added
We may not maintain the listing of the ADSs on Nasdaq, which could limit investors’ ability to make transactions in the ADSs and subject us to additional trading restrictions. The ADSs are listed on Nasdaq.
Removed
If third-party developers do not want to sell their software in our store or their software cease to be developed and maintained, customers may choose not to purchase any software at PicoManager .
Added
In order to continue listing the ADSs on Nasdaq, we must maintain certain financial and ADS price levels and we may be unable to meet these requirements.
Removed
In addition, the Bank of Japan introduced a plan for a quantitative and qualitative monetary easing in April 2013 and announced a negative interest rate policy in January 2016. However, the long-term impact of these policy initiatives on Japan’s economy remains uncertain.
Added
On April 22, 2025, we received a letter from the Listings Qualifications Department of Nasdaq, notifying us that we had not been in compliance with the minimum bid price requirement as set forth under Nasdaq Listing Rule 5550(a)(2) for continued listing on Nasdaq (“Minimum Bid Price Requirement”) for a period of consecutive 30 business days from March 10, 2025 to April 21, 2025.
Removed
In addition, the occurrence of pandemics, such as the COVID-19 pandemic, the occurrence of large-scale natural disasters, such as earthquakes and typhoons, as well as an increase in the consumption tax rate, which took place in April 2014 with a further increase in October 2019, may also adversely impact the Japanese economy, potentially impacting our business.
Added
On June 25, 2025, the Company received a letter from Nasdaq stating that the Company regained compliance with the Minimum Bid Price Requirement by maintaining a minimum closing bid price of the ADSs of $1.00 or greater per ADS for the preceding 10 consecutive business days, from June 10, 2025 to June 24, 2025, and that this matter was now closed.
Removed
We have not received a 12-month license termination notice from Kyushu University for the current license which will expire on March 31, 2025. Consequently, the license will be automatically extended for three years until March 31, 2028.
Added
However, on August 26, 2025, we received another letter from the Listings Qualifications Department, notifying us that we had not been in compliance with the Minimum Bid Price Requirement for a period of consecutive 30 business days from July 15, 2025 to August 25, 2025.
Removed
We intend to comply with the requirements of Nasdaq Listing Rules in determining whether shareholder approval is required on such matters. 27 If we cannot continue to satisfy the continued listing requirements and other rules of Nasdaq, the ADSs may be delisted, which could negatively impact the price of the ADSs and your ability to sell them.
Added
In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we have been provided 180 calendar days, or until February 23, 2026, to regain compliance with Nasdaq Listing Rule 5550(a)(2). To regain compliance, the ADSs must have a closing bid price of at least US$1.00 for a minimum of 10 consecutive business days.
Removed
In order to maintain our listing on Nasdaq, we are required to comply with certain rules of Nasdaq, including those regarding minimum stockholders’ equity, minimum share price, minimum market value of publicly held shares, and various additional requirements.
Added
On December 29, 2025, our shareholders resolved to implement reverse share split at the reverse share split ratio of 1-for-30, which became effective on January 26, 2026.
Removed
Even if we initially met the listing requirements and other applicable rules of Nasdaq, we may not be able to continue to satisfy these requirements and applicable rules. If we are unable to satisfy Nasdaq criteria for maintaining our listing, the ADSs could be subject to delisting.
Added
On February 10, 2026, the Company received a letter from Nasdaq stating that the Company regained compliance with the Minimum Bid Price Requirement by maintaining a minimum closing bid price of the ADSs of $1.00 or greater per ADS for the preceding 10 consecutive business days, from January 26, 2026 to February 9, 2026, and that this matter was now closed.
Added
While we have regained compliance with the Minimum Bid Price Requirement, we cannot assure you that we will be able to maintain compliance with the Minimum Bid Price Requirement or any other listing requirements and that the ADSs will continue to be listed on Nasdaq in the future.
Added
If Nasdaq delists the ADSs and we are unable to list the ADSs on another national securities exchange, we expect the ADSs could be quoted on an over-the-counter market in the United States.
Added
As long as the ADSs are listed on Nasdaq, U.S. federal law prevents or pre-empts the states from regulating their sale. However, the law does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar their sale.
Added
Further, if we were no longer listed on Nasdaq, we would be subject to regulations in each state in which we offer the ADSs.
Added
Share ownership remains concentrated in the hands of our management, who will continue to be able to exercise a direct or indirect controlling influence on us. As of the date of this annual report, our directors and executive officers together beneficially own approximately 74.62% of our Common Shares issued and outstanding.
Added
As a result, these shareholders, acting together, will have significant influence over all matters that require approval by our shareholders, including the election of directors and approval of significant corporate transactions. Corporate action might be taken even if other shareholders oppose them.
Added
This concentration of ownership might also have the effect of delaying or preventing a change of control of our Company that other shareholders may view as beneficial.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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SolidRun JPY37,999 thousand (approximately $265 thousand); 10% Service scope: SolidRun purchases raw material parts specified by the Company, manufactures PCWL-0400 products as required by the Company, and delivers and sell the completed products to the Company at the agreed price. Term: The initial term was one year from April 1, 2018, the date of execution of the original framework contract.
(“SolidRun”) JPY37,999 thousand (approximately $265 thousand); 10% Service scope: SolidRun purchases raw material parts specified by the Company, manufactures PCWL-0400 products as required by the Company, and delivers and sell the completed products to the Company at the agreed price. Term: The initial term was one year from April 1, 2018, the date of execution of the original framework contract.
Name Registration/Filing Date Expiration Date Patent Status Patent Registrant 1 Japan JP5515072B2 Network system, node, packet forwarding method, program, and recording medium 04/11/2014 01/29/2028 Registered and effective Kyushu University* 2 Japan JP5388137B2 Network system, node, packet forwarding method, program, and recording medium 10/18/2013 03/30/2029 Registered and effective Kyushu University* 3 Japan JP5777112B2** Communication system, master node, the routing method and program 06/17/2015 02/22/2031 Registered and effective Kyushu University* 4 Japan JP5493131B2 Packet communication system, emission control apparatus, antenna control method and computer program 03/14/2014 09/08/2030 Registered and effective Kyushu University* 5 Japan JP5888785B2 The transmission period determining method, the transmission cycle decision apparatus and program 02/26/2016 02/17/2032 Registered and effective Kyushu University* 6 Japan JP5652872B2 Wireless relay device, wireless relay method, and program 11/28/2014 12/03/2030 Registered and effective PicoCELA 7 Japan JP6413054B2 Network system, path control method, node, and program 10/12/2018 10/31/2033 Registered and effective PicoCELA 8 Japan JP6508745B2 Network system, method and program 04/12/2019 10/31/2033 Registered and effective PicoCELA 9 Japan JP7025479B2 The reception status display method, node, slave nodes, and program 02/15/2022 10/31/2033 Registered and effective PicoCELA 10 Japan JP6624780B2 Positioning method, server, and program 12/06/2019 12/10/2034 Registered and effective PicoCELA 11 Japan JP6580462B2 Network system, node, communication method, and program 09/06/2019 11/02/2035 Registered and effective PicoCELA 12 Japan JP6905275B2 Network system, node, communication method, and program 06/29/2021 11/02/2035 Registered and effective PicoCELA 13 Japan JP7218852 The wireless routing control method, a radio communication system, a radio node, and a radio path control program 01/30/2023 05/02/2038 Registered and effective PicoCELA 14 Japan JP7152476 The wireless routing control method, a radio communication system, a radio node, and a radio path control program 10/03/2022 05/02/2038 Registered and effective PicoCELA 15 Japan JP7465462B Wireless communication system and wireless nodes 04/03/2024 11/06/2039 Registered and effective PicoCELA 53 No.
Name Registration/Filing Date Expiration Date Patent Status Patent Registrant 1 Japan JP5515072B2 Network system, node, packet forwarding method, program, and recording medium 04/11/2014 01/29/2028 Registered and effective Kyushu University* 2 Japan JP5388137B2 Network system, node, packet forwarding method, program, and recording medium 10/18/2013 03/30/2029 Registered and effective Kyushu University* 3 Japan JP5777112B2** Communication system, master node, the routing method and program 06/17/2015 02/22/2031 Registered and effective Kyushu University* 4 Japan JP5493131B2 Packet communication system, emission control apparatus, antenna control method and computer program 03/14/2014 09/08/2030 Registered and effective Kyushu University* 5 Japan JP5888785B2 The transmission period determining method, the transmission cycle decision apparatus and program 02/26/2016 02/17/2032 Registered and effective Kyushu University* 6 Japan JP5652872B2 Wireless relay device, wireless relay method, and program 11/28/2014 12/03/2030 Registered and effective PicoCELA 7 Japan JP6413054B2 Network system, path control method, node, and program 10/12/2018 10/31/2033 Registered and effective PicoCELA 8 Japan JP6508745B2 Network system, method and program 04/12/2019 10/31/2033 Registered and effective PicoCELA 9 Japan JP7025479B2 The reception status display method, node, slave nodes, and program 02/15/2022 10/31/2033 Registered and effective PicoCELA 10 Japan JP6624780B2 Positioning method, server, and program 12/06/2019 12/10/2034 Registered and effective PicoCELA 11 Japan JP6580462B2 Network system, node, communication method, and program 09/06/2019 11/02/2035 Registered and effective PicoCELA 12 Japan JP6905275B2 Network system, node, communication method, and program 06/29/2021 11/02/2035 Registered and effective PicoCELA 13 Japan JP7218852 The wireless routing control method, a radio communication system, a radio node, and a radio path control program 01/30/2023 05/02/2038 Registered and effective PicoCELA 14 Japan JP7152476 The wireless routing control method, a radio communication system, a radio node, and a radio path control program 10/03/2022 05/02/2038 Registered and effective PicoCELA 53 No.
Risk Factors—Risks Related to Our Business and Industry—A shortage of Wi-Fi Chips or labor, or increases in their costs, could delay delivery and launch of our mesh Wi-Fi access points or increase its cost, which could materially and adversely affect us,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Factors Impacting Our Operating Results—Changes in supply or price of Wi-Fi Chips or labor costs.” Moreover, during the fiscal years ended September 30, 2024, 2023, and 2022, we recorded a net loss.
Risk Factors—Risks Related to Our Business and Industry—A shortage of Wi-Fi Chips or labor, or increases in their costs, could delay delivery and launch of our mesh Wi-Fi access points or increase its cost, which could materially and adversely affect us,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Factors Impacting Our Operating Results—Changes in supply or price of Wi-Fi Chips or labor costs.” Moreover, during the fiscal years ended September 30, 2025, 2024, and 2023, we recorded a net loss.
Risk Factors—Risks Related to Our Business and Industry—We have not been profitable and have incurred negative cash flows in operating activities, both of which may continue in the future” and our audited consolidated financial statements for the fiscal years ended September 30, 2024, 2023, and 2022. 31 Today, Wi-Fi communications are developed to make the internet communication wireless.
Risk Factors—Risks Related to Our Business and Industry—We have not been profitable and have incurred negative cash flows in operating activities, both of which may continue in the future” and our audited consolidated financial statements for the fiscal years ended September 30, 2025, 2024, and 2023. 31 Today, Wi-Fi communications are developed to make the internet communication wireless.
This could impact our revenue and results of operations.” Global expansion and partnering with local distributors We are planning to extend the availability of our PCWL mesh Wi-Fi access points to international markets, focusing on the United States and Europe. Our phased approach involves entry into Europe in December 2025 and the United States in June 2026.
This could impact our revenue and results of operations.” Global expansion and partnering with local distributors We are planning to extend the availability of our PCWL mesh Wi-Fi access points to international markets, focusing on the United States and Europe. Our phased approach involves entry into Europe in December 2026 and the United States in June 2028.
We also lease offices in Warsaw, Poland, from an independent third party with an area of approximately 156 square feet, with a flexible lease until either party terminates it and a monthly rent of PLN3,250. This office is intended to provide a working space for the two local engineering contractors we engage there.
We also lease offices in Warsaw, Poland, from an independent third party with an area of approximately 156 square feet, with a flexible lease until either party terminates it and a monthly rent of PLN3,750. This office is intended to provide a working space for the two local engineering contractors we engage there.
We have trained the manufacturers on how to produce our products and we conduct product quality monitoring. 50 For the fiscal years ended September 30, 2024, 2023, and 2022, we relied on three, two, and three manufacturers, respectively, to manufacture our PCWL series. As of the date of this annual report, we maintain a stable relationship with our major manufacturers.
We have trained the manufacturers on how to produce our products and we conduct product quality monitoring. 50 For the fiscal years ended September 30, 2025, 2024, and 2023, we relied on three, three, and two manufacturers, respectively, to manufacture our PCWL series. As of the date of this annual report, we maintain a stable relationship with our major manufacturers.
We anticipate launching the PBE module in March 2026, further solidifying our goal to be a leader in wireless mesh technology. One major obstacle to implement this growth strategy is maintaining low production cost of our PBE module to meet our customer’s pricing requirement of their own products, in which our PBE module is installed.
We anticipate launching the PBE module in December 2026, further solidifying our goal to be a leader in wireless mesh technology. One major obstacle to implement this growth strategy is maintaining low production cost of our PBE module to meet our customer’s pricing requirement of their own products, in which our PBE module is installed.
Sales and Marketing We primarily sell our enterprise-use wireless mesh Wi-Fi network products to major B2B distributors of telecommunication devices and major IT consulting firms in Japan by our enterprise sales team. Our enterprise sales team targets the large enterprises of end purchasers and promote our products to them by collaborating with distributors and IT consulting firms.
Sales and Marketing We primarily sell our enterprise-use wireless mesh Wi-Fi network products to major B2B distributors of telecommunication devices and major IT consulting firms in Japan by our enterprise sales team. Our enterprise sales team targets the large enterprises of end purchasers and promotes our products to them by collaborating with distributors and IT consulting firms.
The exclusive license was granted on April 1, 2014 and has been renewed until March 31, 2025. ** As of the date of this annual report, six patents licensed from Kyushu University are used in our products, including PCWL series and PBE module.
The exclusive license was granted on April 1, 2014 and has been renewed until March 31, 2028. ** As of the date of this annual report, six patents licensed from Kyushu University are used in our products, including PCWL series and PBE module.
We believe that we maintain a good working relationship with our employees, and we have not experienced material labor disputes in the past. None of our employees is represented by labor unions. Seasonality Our business is not subject to seasonal fluctuations. Properties We do not own any real estate.
We believe that we maintain a good working relationship with our employees, and we have not experienced material labor disputes in the past. None of our employees is represented by a labor union. Seasonality Our business is not subject to seasonal fluctuations. Properties We do not own any real estate.
Risk Factors—Risks Related to Our Business and Industry—We rely on third parties to manufacture our mesh Wi-Fi access points devices we offer, and depend on them for the supply and quality of our products.” “Business—Manufacturing and Suppliers.” Intellectual Property We value our intellectual property.
Risk Factors—Risks Related to Our Business and Industry—We rely on third parties to manufacture our mesh Wi-Fi access points devices we offer, and depend on them for the supply and quality of our products” and “Business—Manufacturing and Suppliers.” Intellectual Property We value our intellectual property.
There were three, two, and three suppliers from whom the purchases made individually represent more than 10% of our total purchases for the fiscal years ended September 30, 2024, 2023, and 2022, respectively. Below are the tables listing our major suppliers for the fiscal years ended September 30, 2024, 2023, and 2022.
There were two, three, and two suppliers from whom the purchases made individually represent more than 10% of our total purchases for the fiscal years ended September 30, 2025, 2024, and 2023, respectively. Below are the tables listing our major suppliers for the fiscal years ended September 30, 2025, 2024, and 2023.
Automatically renewed annually for successive one-year periods unless either party provides a written notice of its intent not to renew at least three months prior to the expiration of the applicable term. Price and payment: The prices of the products sold by NISHIO to end-users are determined the Company in a form of price list distributed to all distributors.
Automatically renewed annually for successive one-year periods unless either party provides a written notice of its intent not to renew at least three months prior to the expiration of the applicable term. Price and payment: The prices of the products sold by SCSK Minori to end-users are determined the Company in a form of price list distributed to all distributors.
The lease term for the office on the 4th floor is from July 27, 2024 to July 26, 2026, with a monthly rent of JPY240,000. The current lease term for the office on the 5th floor is from June 13, 2023 to June 12, 2025, with a monthly rent of JPY125,000.
The lease term for the office on the 4th floor is from July 27, 2024 to July 26, 2026, with a monthly rent of JPY240,000. The current lease term for the office on the 5th floor is from June 13, 2025 to June 12, 2027, with a monthly rent of JPY125,000.
Moreover, we enter into confidentiality agreements with our employees to protect our intellectual property rights. In addition to our full-time employees, we had two, two, and one independent contractors as of September 30, 2024, 2023, and 2022, respectively. These independent contractors are based in Poland and are primarily responsible for engineering and technical consultation.
Moreover, we enter into confidentiality agreements with our employees to protect our intellectual property rights. In addition to our full-time employees, we had two, two and two independent contractors as of September 30, 2025, 2024, and 2023, respectively. These independent contractors are based in Poland and are primarily responsible for engineering and technical consultation.
Term: The initial term was one year from October 1, 2018, the date of execution of the original framework contract. Automatically renewed for successive one-year periods unless either party provides a written notice of its intent not to renew at least three months prior to the expiration of the applicable term.
Term: The initial term was one year from October 1, 2019, the date of execution of the original framework contract. Automatically renewed annually for successive one-year periods unless either party provides a written notice of its intent not to renew at least three months prior to the expiration of the applicable term.
Risk Factors—Risks Related to Our Business and Industry— We are dependent on patents licensed from Kyushu University. If we were to lose our rights to licensed patents due to license expiration or termination, we may not be able to continue developing or commercializing our products.
Key Information—D. Risk Factors—Risks Related to Our Business and Industry— We are dependent on patents licensed from Kyushu University. If we were to lose our rights to licensed patents due to license expiration or termination, we may not be able to continue developing or commercializing our products.
US08693366B2** Communication system, a slave node, a route making method and a program 02/23/2011 (PCT filed) 02/22/2031 Registered and effective Kyushu University* 21 U.S. US08937986B2 Packet communication system, emission control apparatus, antenna control method and computer program 09/07/2011 (PCT filed) 09/06/2031 Registered and effective Kyushu University* 22 U.S.
US08693366B2** Communication system, a slave node, a route making method and a program 02/23/2011 (PCT filed) 02/22/2031 Registered and effective Kyushu University* 26 U.S. US08937986B2 Packet communication system, emission control apparatus, antenna control method and computer program 09/07/2011 (PCT filed) 09/06/2031 Registered and effective Kyushu University* 27 U.S.
Price and payment: The prices of the products sold by SCSK Minori to end-users are determined the Company in a form of price list distributed to all distributors. SCSK Minori shall accept the prices before purchasing relevant products from the Company. SCSK Minori shall pay the Company for the products it purchases monthly.
Price and payment: The prices of the products sold by NISHIO to end-users are determined the Company in a form of price list distributed to all distributors. NISHIO shall accept the prices before purchasing relevant products from the Company. NISHIO shall pay the Company for the products it purchases monthly.
(“NISHIMATSU”) JPY123,000 thousand (approximately $859 thousand); 16% Contract scope: NISHIMATSU agreed to manufacture the products the Company developed exclusively for NISHIMATSU to be resold under NISHIMATSU’s brand name at NISHIMATSU’s request and order, and NISHIMATSU agreed to purchase such products from the Company.
NISHIMATSU CONTSTRUCTION CO., LTD. (“NISHIMATSU”) JPY123,000 thousand (approximately $859 thousand); 16% Contract scope: NISHIMATSU agreed to manufacture the products the Company developed exclusively for NISHIMATSU to be resold under NISHIMATSU’s brand name at NISHIMATSU’s request and order, and NISHIMATSU agreed to purchase such products from the Company.
Approximately 32%, 12%, and 35% of our sales are made directly to our end customers for the fiscal years ended September 30, 2024, 2023, and 2022, respectively. In addition, we also sell subscriptions to our Wi-Fi monitoring portal service, PicoManager , to end-user customers of our wireless mesh Wi-Fi network products.
Approximately 6%, 32%, and 12% of our sales are made directly to our end customers for the fiscal years ended September 30, 2025, 2024, and 2023, respectively. In addition, we also sell subscriptions to our Wi-Fi monitoring portal service, PicoManager , to end-user customers of our wireless mesh Wi-Fi network products.
Automatically renewed annually for successive one-year periods unless either party provides a written notice of its intent not to renew at least three months prior to the expiration of the applicable term.
Automatically renewed annually for successive one-year periods, with the current term until unless either party provides a written notice of its intent not to renew at least three months prior to the expiration of the applicable term.
Term: The initial term was one year from February 26, 2019, the date of execution of the original framework contract. Automatically renewed annually for successive one-year periods unless either party provides a written notice of its intent not to renew at least three months prior to the expiration of the applicable term.
Term: The initial term was one year from January 17, 2019, the date of execution of the original framework contract. Automatically renewed annually for successive one-year periods unless either party provides a written notice of its intent not to renew at least three months prior to the expiration of the applicable term.
Approximately 68%, 88%, and 65% of our sales were made through our distributors for the fiscal years ended September 30, 2024, 2023, and 2022, respectively. We also sell Wi-Fi network products to our end customers directly.
Approximately 94%, 68%, and 88% of our sales were made through our distributors for the fiscal years ended September 30, 2025, 2024, and 2023, respectively. We also sell Wi-Fi network products to our end customers directly.
US08526365B2 Network system, node, packet forwarding method, program, and recording medium 01/28/2009 (PCT (“Patent Cooperation Treaty”) filed) 01/27/2029 Registered and effective Kyushu University* 19 U.S. US09220047B2 Network system, node, packet forwarding method, program, and recording medium 03/30/2009 (PCT filed) 03/29/2029 Registered and effective Kyushu University* 20 U.S.
US08526365B2 Network system, node, packet forwarding method, program, and recording medium 01/28/2009 (PCT (“Patent Cooperation Treaty”) filed) 01/27/2029 Registered and effective Kyushu University* 24 U.S. US09220047B2 Network system, node, packet forwarding method, program, and recording medium 03/30/2009 (PCT filed) 03/29/2029 Registered and effective Kyushu University* 25 U.S.
As of the date of this annual report, of total 42 patents of inventions, 21 patents of inventions are registered and owned by Kyushu University and exclusively licensed to us. Another 21 patents of inventions are registered and owned by us.
As of the date of this annual report, of total 51 patents of inventions, 21 patents of inventions are registered and owned by Kyushu University and exclusively licensed to us. Another 30 patents of inventions are registered and owned by us.
The Labor Contracts Act regulates, among others, the change of terms of employment contracts and work rules, and dismissal and disciplinary action. We are in compliance with these regulations as of the date of this annual report. C. Organizational Structure See “—A. History and Development of the Company.” D. Property, Plants and Equipment See “—B. Business Overview—Properties.” Item 4A.
The Labor Contracts Act regulates, among others, the change of terms of employment contracts and work rules, and dismissal and disciplinary action. We believe that we are in compliance with these regulations as of the date of this annual report. C. Organizational Structure See “—A. History and Development of the Company.” D. Property, Plants and Equipment See “—B.
We lease offices in Fukuoka, Japan, from an independent third party with an area of approximately 953 square feet, with a lease term from February 1, 202 5 to January 31, 202 7 and a monthly rent of JPY202,716.
We lease offices in Fukuoka, Japan, from an independent third party with an area of approximately 953 square feet, with a lease term from February 1, 2025 to January 31, 2027 and a monthly rent of JPY202,716.
Nakanish, has extensive experience in corporate governance and administration at a Japanese public company listed in Tokyo Stock Exchange. He also has extensive experience as a human resource director.
Nakanishi, has extensive experience in corporate governance and administration at a Japanese public company listed on the Tokyo Stock Exchange. He also has extensive experience as a human resource director.
Name Registration/Filing Date Expiration Date Patent Status Patent Registrant 29 China CN102792737B** Communications system, slave node, route building method, and program 03/25/2015 02/22/2031 Registered and effective Kyushu University* 30 China CN103460748B Transmission period determination method, transmission period determination device and program 02/15/2017 02/17/2032 Registered and effective Kyushu University* 31 China ZL201680063517.2 Network system, node, frame communication method, and computer storage medium 02/25/2022 11/01/2036 Registered and effective PicoCELA 32 China ZL201910343794.4 Wireless route control method, wireless communication system, and wireless node and storage medium 05/12/2023 04/26/2039 Registered and effective PicoCELA 33 Europe EP2242326B2 Network system, packet forwarding method, program, and recording medium 01/28/2009 01/27/2029 Registered and effective Kyushu University* 34 Europe EP2268083B1 Network system, node, packet forwarding method, program, and recording medium 03/30/2009 03/29/2029 Registered and effective Kyushu University* 35 Europe EP2541989B1** Communications system, slave node, route building method, and program 02/22/2011 02/21/2031 Registered and effective Kyushu University* 36 Europe EP2677796B1 Transmission period determination method, transmission period determination device, and program 02/17/2012 02/16/2032 Registered and effective Kyushu University* 37 Europe EP3373691B1 Network system, node, frame communication method, and program 11/01/2016 10/31/2036 Registered and effective PicoCELA 38 Europe EP3565314B1 Wireless route control method, wireless communication system, and wireless node 05/02/2018 05/01/2038 Registered and effective PicoCELA 39 Taiwan TWI457034B Network system, node, packet forwarding method, program, and recording medium 10/11/2014 01/22/2029 Registered and effective Kyushu University* 40 Taiwan TWI472245B** Communications system, slave node, route building method, and program 02/01/2015 02/21/2031 Registered and effective Kyushu University* 41 Taiwan TWI517619B Packet communication system, emission control apparatus, antenna control method and computer program 01/11/2016 09/06/2031 Registered and effective Kyushu University* 42 Taiwan TWI520629B Transmission period determination method, transmission period determination device, and program 02/01/2016 02/15/2032 Registered and effective Kyushu University* 55 Additionally, as of the date of this annual report, we have four pending patent applications in Japan, two pending patent applications in the U.S., one pending patent application in Europe, and one pending patent application in mainland China. * As of the date of this annual report, there are 21 patents of inventions created by Hiroshi Furukawa, the founder and CEO of PicoCELA, when he was a professor at Kyushu University.
Name Registration/Filing Date Expiration Date Patent Status Patent Registrant 35 Australia AU2011218961B2** Communications system, slave node, route building method, and program 02/22/2011 02/22/2031 Registered and effective Kyushu University* 36 China CN102792737B** Communications system, slave node, route building method, and program 03/25/2015 02/22/2031 Registered and effective Kyushu University* 37 China CN103460748B Transmission period determination method, transmission period determination device and program 02/15/2017 02/17/2032 Registered and effective Kyushu University* 38 China ZL201680063517.2 Network system, node, frame communication method, and computer storage medium 02/25/2022 11/01/2036 Registered and effective PicoCELA 39 China ZL201910343794.4 Wireless route control method, wireless communication system, and wireless node and storage medium 05/12/2023 04/26/2039 Registered and effective PicoCELA 40 China ZL201880093076.X Wireless route control method, wireless communication system, and wireless node 05/02/2018 05/02/2038 Registered and effective PicoCELA 41 Europe EP2242326B2 Network system, packet forwarding method, program, and recording medium 01/28/2009 01/27/2029 Registered and effective Kyushu University* 42 Europe EP2268083B1 Network system, node, packet forwarding method, program, and recording medium 03/30/2009 03/29/2029 Registered and effective Kyushu University* 43 Europe EP2541989B1** Communications system, slave node, route building method, and program 02/22/2011 02/21/2031 Registered and effective Kyushu University* 44 Europe EP2677796B1 Transmission period determination method, transmission period determination device, and program 02/17/2012 02/16/2032 Registered and effective Kyushu University* 45 Europe EP3373691B1 Network system, node, frame communication method, and program 11/01/2016 10/31/2036 Registered and effective PicoCELA 46 Europe EP3565314B1 Wireless route control method, wireless communication system, and wireless node 05/02/2018 05/01/2038 Registered and effective PicoCELA 47 Europe EP3790321 Wireless route control method, wireless communication system, wireless node, and wireless route control program 12/04/2024 05/02/2038 Registered and effective PicoCELA 48 Taiwan TWI457034B Network system, node, packet forwarding method, program, and recording medium 10/11/2014 01/22/2029 Registered and effective Kyushu University* 49 Taiwan TWI472245B** Communications system, slave node, route building method, and program 02/01/2015 02/21/2031 Registered and effective Kyushu University* 50 Taiwan TWI517619B Packet communication system, emission control apparatus, antenna control method and computer program 01/11/2016 09/06/2031 Registered and effective Kyushu University* 51 Taiwan TWI520629B Transmission period determination method, transmission period determination device, and program 02/01/2016 02/15/2032 Registered and effective Kyushu University* 55 Additionally, as of the date of this annual report, we have one pending patent applications in Japan. * As of the date of this annual report, there are 21 patents of inventions created by Hiroshi Furukawa, the founder and CEO of PicoCELA, when he was a professor at Kyushu University.
There are no minimum purchase requirements. ● Fiscal year ended September 30, 2023 Supplier Amount for (JPY); Percentage Major Contract Terms Compex JPY221,953 thousand (approximately $1,549 thousand); 55% See the description of the major contract terms above.
There are no minimum purchase requirements. 44 ● Fiscal year ended September 30, 2023 Supplier Amount for (JPY); Percentage Major Contract Terms Compex JPY221,953 thousand (approximately $1,549 thousand); 55% See the description of the major contract terms above. SolidRun JPY51,687 thousand (approximately $361 thousand); 13% See the description of the major contract terms above.
There were four, four, and five customers from whom the revenue derived individually represents greater than 10% of our total revenue for the years ended September 30, 2024, 2023, and 2022, respectively.
There were three, four, and four from whom the revenue derived individually represents greater than 10% of our total revenue for the years ended September 30, 2025, 2024, and 2023, respectively.
As we do not collect the personal information of our customers, this law applies to us only because we collect personal information of our employees necessary to comply with labor laws and payroll tax regulations as well as for our human resource management purposes. We are in compliance with these regulations as of the date of this annual report.
As we do not collect the personal information of our customers, this law applies to us only because we collect personal information of our employees necessary to comply with labor laws and payroll tax regulations as well as for our human resource management purposes.
Risk Factors—Risks Related to Our Business and Industry—Our business is geographically concentrated, which subjects us to greater risks from changes in local or regional conditions.” For the fiscal years ended September 30, 2024, 2023, and 2022, we had a total revenue of JPY784,403 thousand (approximately $5,476 thousand), JPY559,521 thousand (approximately $3,906 thousand), and JPY682,121 thousand, respectively.
Risk Factors—Risks Related to Our Business and Industry—Our business is geographically concentrated, which subjects us to greater risks from changes in local or regional conditions.” For the fiscal years ended September 30, 2025, 2024, and 2023, we had a total revenue of JPY544,690 thousand (approximately $3,681 thousand), JPY784,403 thousand, and JPY559,521 thousand, respectively.
Employees We had 53, 55, and 40 full-time employees and two, two, and three temporary employees as of September 30, 2024, 2023, and 2022, respectively.
Employees We had 55, 53, and 55 full-time employees and two, two, and two temporary employees as of September 30, 2025, 2024, and 2023, respectively.
As of September 30, 2024, 2023, and 2022, the Company has net operating loss carryforwards in Japan of approximately JPY2,354 million (approximately $16 million), JPY1,748 million (approximately $12 million), and JPY1,091 million, respectively, which can be carried forward to offset future taxable income.
As of September 30, 2025, 2024, and 2023, the Company has net operating loss carryforwards in Japan of approximately JPY3,249 million (approximately $22 million), JPY2,354 million, and JPY1,748 million, respectively, which can be carried forward to offset future taxable income.
Patents As of the date of this annual report, we have 17 patents in Japan, 10 patents in the U.S., six patents in Europe, four patents in mainland China, four patents in Taiwan, and one patent in Australia, respectively, totaling 42 patents. Patent applications filed in different countries for the same invention are counted individually.
Patents As of the date of this annual report, we have 22 patents in Japan, 12 patents in the U.S., seven patents in Europe, five patents in mainland China, four patents in Taiwan, and one patent in Australia, respectively, totaling 51 patents. Patent applications filed in different countries for the same invention are counted individually.
If any of the events specified in the agreement occur in respect to either party, the other party may immediately terminate the agreement, in whole or in part, without any notice. 47 ● Fiscal year ended September 30, 2023 Customer Sales Amount (JPY); Percentage Major Contract Terms SCSK Minori JPY 205,767 thousand (approximately $1,377 thousand); 34% See the description of the major contract terms above.
If any of the events specified in the agreement occur in respect to either party, the other party may immediately terminate the agreement, in whole or in part, without any notice. 46 ● Fiscal year ended September 30, 2024 Customer Sales Amount (JPY); Percentage Major Contract Terms SCSK Minori JPY207,804 thousand (approximately $1,451 thousand); 26% See the description of the major contract terms above.
(“Emplus”) JPY155,236 thousand (approximately $1,084 thousand); 41% Service scope: Emplus purchases raw material parts specified by the Company, manufactures products as required by the Company, and delivers and sells the completed products to the Company at the agreed price. Term: The current contract is in effect from June 20, 2023 to June 19, 2026.
Emplus Technologies, Inc. (“Emplus”) JPY41,081 thousand (approximately $278 thousand); 14% Service scope: Emplus purchases raw material parts specified by the Company, manufactures products as required by the Company, and delivers and sells the completed products to the Company at the agreed price. Term: The current contract is in effect from June 20, 2023 to June 19, 2026.
The following table sets forth the number of our full-time employees categorized by areas of operations as of September 30, 2024: Function: Number Management 6 Finance 5 Sales and product 21 Engineering 18 Administrative and human resources 3 Total 53 57 We enter into employment agreements with our full-time employees.
The following table sets forth the number of our full-time employees categorized by areas of operations as of September 30, 2025: Function: Number Management 7 Finance 5 Sales and product 19 Engineering 20 Administrative and human resources 4 Total 55 57 We enter into employment agreements with our full-time employees.
Revenue derived from SaaS, maintenance and others was JPY158,921 thousand (approximately $1,109 thousand), JPY93,830 thousand (approximately $655 thousand), and JPY141,264 thousand for the fiscal years ended September 30, 2024, 2023, and 2022, respectively. However, our revenue has been uncertain and volatile, subject to our supply chain of Wi-Fi Chips. See “Item 3. Key Information—D.
Revenue derived from SaaS, maintenance and others was JPY97,621 thousand (approximately $660 thousand), JPY156,683 thousand, and JPY93,830 thousand for the fiscal years ended September 30, 2025, 2024, and 2023, respectively. However, our revenue has been uncertain and volatile, subject to our supply chain of Wi-Fi Chips. See “Item 3. Key Information—D.
Term: The initial term was one year from June 12, 2024, the date of execution of the original framework contract. Automatically renewed annually for successive one-year periods, with the current term until unless either party provides a written notice of its intent not to renew at least three months prior to the expiration of the applicable term.
Automatically renewed annually for successive one-year periods, with the current term until unless either party provides a written notice of its intent not to renew at least three months prior to the expiration of the applicable term.
Trademark Trademark Name Class Registration Number Registration Date Valid Until 1 Picocela 09 5305139 02/26/2010 02/26/2030 2 PC 09 53055140 02/26/2010 02/26/2030 3 PicoCELA 09; 42 6058941 07/06/2018 07/06/2028 51 4 PicoManager 09; 42 6058942 07/06/2018 07/06/2028 5 PCWL 09; 42 6168808 08/02/2019 08/02/2029 6 PicoHUB station 09; 42 6168809 08/02/2019 08/02/2029 7 稼ぐWi-Fi 35; 42 6369881 03/29/2021 03/29/2031 8 ケーブルいらず 09; 42 6348232 02/03/2021 02/03/2026 In addition, we have one pending trademark application in Japan and one in the U.S., as of the date of this annual report.
Trademark Trademark Name Class Registration Number Registration Date Valid Until 1 Picocela 09 5305139 02/26/2010 02/26/2030 2 PC 09 53055140 02/26/2010 02/26/2030 3 PicoCELA 09; 42 6058941 07/06/2018 07/06/2028 51 4 PicoManager 09; 42 6058942 07/06/2018 07/06/2028 5 PCWL 09; 42 6168808 08/02/2019 08/02/2029 6 稼ぐWi-Fi 35; 42 6369881 03/29/2021 03/29/2031 7 PicoCELA 09; 42 6851588 10/07/2024 10/07/2034 8 PicoMesh 09; 42 6958219 08/18/2025 08/18/2035 In addition, we have four pending trademark applications in the U.S., as of the date of this annual report.
We are in compliance with these regulations as of the date of this annual report. Labor laws There are various labor-related laws in Japan, including the Labor Standards Act (Act No. 49 of 1947, as amended), the Industrial Safety and Health Act (Act No. 57 of 1972, as amended), and the Labor Contracts Act (Act No. 128 of 2007).
Labor laws There are various labor-related laws in Japan, including the Labor Standards Act (Act No. 49 of 1947, as amended), the Industrial Safety and Health Act (Act No. 57 of 1972, as amended), and the Labor Contracts Act (Act No. 128 of 2007).
Below are the lists of our major customers for the fiscal years ended September 30, 2024, 2023, and 2022. 45 ● Fiscal year ended September 30, 2024 Customer Sales Amount (JPY); Percentage Major Contract Terms SCSK Minori JPY207,804 thousand (approximately $1,451 thousand); 26% Contract scope: the Company grants SCSK Minori non-exclusive rights to sell the products as negotiated between the parties in Japan.
Below are the lists of our major customers for the fiscal years ended September 30, 2025, 2024, and 2023. 45 ● Fiscal year ended September 30, 2025 Customer Sales Amount (JPY); Percentage Major Contract Terms EXEO Group JPY119,328 thousand (approximately $806 thousand); 22% Contract scope: the Company grants EXEO Group non-exclusive rights to sell the products as negotiated between the parties in Japan.
US09154981B2 Transmission period determination method, transmission period determination device and program 02/17/2012 (PCT filed) 02/16/2032 Registered and effective Kyushu University* 23 U.S. US10862707B2 Network system, node, frame communication method, and program 11/01/2016 (PCT filed) 10/31/2036 Registered and effective PicoCELA 24 U.S. US11019550B2 Wireless route control method, wireless communication system, and wireless node 05/02/2019 05/01/2039 Registered and effective PicoCELA 25 U.S.
US09154981B2 Transmission period determination method, transmission period determination device and program 02/17/2012 (PCT filed) 02/16/2032 Registered and effective Kyushu University* 28 U.S. US10862707B2 Network system, node, frame communication method, and program 11/01/2016 (PCT filed) 10/31/2036 Registered and effective PicoCELA 29 U.S.
During the fiscal year ended September 30, 2024, 2023, and 2022, the net loss was JPY479,921 thousand (approximately $3,350 thousand), JPY633,956 thousand (approximately $4,426 thousand), and JPY5,180 thousand, respectively. See our audited financial statements for the fiscal years ended September 30, 2024, 2023, and 2022.
During the fiscal year ended September 30, 2025, 2024, and 2023, the net loss was JPY626,312 thousand (approximately $4,233 thousand), JPY479,921 thousand, and JPY633,956 thousand, respectively. See our audited financial statements for the fiscal years ended September 30, 2025, 2024, and 2023.
The loss of any of these suppliers or licenses may cause us to incur additional transition costs, result in delays in the manufacturing and delivery of our products, or cause us to carry excess or obsolete inventory and could cause us to redesign our products,” and “Item 3. Key Information—D.
Some of the technologies we used are licensed from Kyushu University. The loss of any of these suppliers or licenses may cause us to incur additional transition costs, result in delays in the manufacturing and delivery of our products, or cause us to carry excess or obsolete inventory and could cause us to redesign our products,” and “Item 3.
If any of the events specified in the agreement occur in respect to either party, the other party may immediately terminate the agreement, in whole or in part, without any notice. NISHIO JPY 81,792 thousand; 12% See the description of the major contract terms above.
If any of the events specified in the agreement occur in respect to either party, the other party may immediately terminate the agreement, in whole or in part, without any notice. EXEO Group JPY 60,011 thousand (approximately $402 thousand); 10% See the description of the major contract terms above.
In addition, as of September 30, 2024, 2023, and 2022, we had accumulated deficit of JPY2,202,668 thousand (approximately $15,376 thousand), JPY1,722,747 thousand (approximately $12,026 thousand), and JPY1,088,791 thousand, respectively. See “Item 3. Key Information—D.
In addition, as of September 30, 2025, 2024, and 2023, we had accumulated deficit of JPY2,828,980 thousand (approximately $19,119 thousand), JPY2,202,668 thousand, and JPY1,722,747, respectively. See “Item 3. Key Information—D.
EXEO Group JPY 78,142 thousand (approximately $545 thousand); 10% Contract scope: the Company grants EXEO Group non-exclusive rights to sell the products as negotiated between the parties in Japan. Term: The initial term was one year from January 17, 2019, the date of execution of the original framework contract.
Nikken JPY89,686 thousand (approximately $606 thousand); 17% Contract scope: the Company grants Nikken non-exclusive rights to sell the products as negotiated between the parties in Japan. Term: The initial term was one year from August 22, 2019, the date of execution of the original framework contract.
On July 5, 2024, we converted all the preferred share then issued and outstanding to Common Shares, and, on July 17, 2024, all classes of preferred shares were eliminated from our authorized share capital.
On July 5, 2024, we converted all the preferred share then issued and outstanding to Common Shares, and, on July 17, 2024, all classes of preferred shares were eliminated from our authorized share capital. As such, we have only one class of shares, the Common Shares, authorized for issuance as of the date of this annual report.
NISHIO JPY 80,682 thousand (approximately $540 thousand); 13% Contract scope: the Company grants NISHIO non-exclusive rights to sell the products as negotiated between the parties in Japan. Term: The initial term was one year from October 1, 2019, the date of execution of the original framework contract.
KAGA FEI JPY 65,825 thousand (approximately $441 thousand); 11% Contract scope: the Company grants KAGA FEI non-exclusive rights to sell the products as negotiated between the parties in Japan. Term: The initial term was one year from November 28, 2019, the date of execution of the original framework contract.
The Agreement is effective unless either party provides a written notice of its intent not to renew at least three months prior to the intended termination date. Price and payment: The prices of the products sold by Daifuku to end-users are determined the Company in a form of price list distributed to all distributors.
Automatically renewed for successive one-year periods unless either party provides a written notice of its intent not to renew at least three months prior to the expiration of the applicable term. Price and payment: The prices of the products sold by Nikken to end-users are determined the Company in a form of price list distributed to all distributors.
Amount: SCSK Minori shall purchase and maintain at least 10 PCWL-0400 devices. Termination provisions: Either party may terminate the agreement anytime during the agreement period with a written notice submitted at least six months in advance.
Termination provisions: Either party may terminate the agreement anytime during the agreement period with a written notice submitted at least six months in advance.
Key Information—D. Risk Factors—Risks Related to Our Business and Industry—Some of the components used in our products are purchased from a limited number of sources. Some of the technologies we used are licensed from Kyushu University.
Since we rely on the technologies licensed by Kyushu University to develop our products, the termination of these licenses could have a material adverse effect on our business. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry—Some of the components used in our products are purchased from a limited number of sources.
Revenue generated from the sales of product equipment was JPY625,482 thousand (approximately $4,366 thousand), JPY465,691 thousand (approximately $3,251 thousand), and JPY540,857 thousand for the fiscal years ended September 30, 2024, 2023, and 2022, respectively.
Revenue generated from the sales of product equipment was JPY447,069 thousand (approximately $3,021 thousand), JPY627,720 thousand, and JPY465,691 thousand for the fiscal years ended September 30, 2025, 2024, and 2023, respectively.
If any of the events specified in the agreement occur in respect to either party, the other party may immediately terminate the agreement, in whole or in part, without any notice. NISHIMATSU CONTSTRUCTION CO., LTD.
The prices of the products sold by NISHIMATSU to its end-user customers are determined by NISHIMATSU. Termination provisions: If any of the events specified in the agreement occur in respect to either party, the other party may immediately terminate the agreement, in whole or in part, without any notice.
EXEO Group JPY 60,011 thousand (approximately $402 thousand); 10% See the description of the major contract terms above. ● Fiscal year ended September 30, 2022 Customer Sales Amount (JPY); Percentage Major Contract Terms SCSK Minori JPY 115,335 thousand; 17% See the description of the major contract terms above.
EXEO Group JPY 78,142 thousand (approximately $545 thousand); 10% See the description of the major contract terms above. 47 ● Fiscal year ended September 30, 2023 Customer Sales Amount (JPY); Percentage Major Contract Terms SCSK Minori JPY 205,767 thousand (approximately $1,377 thousand); 34% See the description of the major contract terms above.
Country Registration No. Name Registration/Filing Date Expiration Date Patent Status Patent Registrant 16 Japan JP7307909B The wireless nodes, wireless communication system, and wireless communication method 07/05/2023 11/29/2039 Registered and effective PicoCELA 17 Japan JP7352241B Radio communication system, radio communication method, and radio nodes. 09/20/2023 11/29/2039 Registered and effective PicoCELA 18 U.S.
Name Registration/Filing Date Expiration Date Patent Status Patent Registrant 15 Japan JP7465462B Wireless communication system and wireless nodes 04/03/2024 11/06/2039 Registered and effective PicoCELA 16 Japan JP7307909B The wireless nodes, wireless communication system, and wireless communication method 07/05/2023 11/29/2039 Registered and effective PicoCELA 17 Japan JP7352241B Radio communication system, radio communication method, and radio nodes. 09/20/2023 11/29/2039 Registered and effective PicoCELA 18 Japan JP7557817B Node 09/19/2024 09/19/2044 Registered and effective PicoCELA 19 Japan JP7620278B Wireless route control method, wireless communication system, and wireless node 01/18/2023 01/18/2043 Registered and effective PicoCELA 20 Japan JP7565546B Wireless node, wireless communication system, and wireless communication method 06/22/2023 06/22/2043 Registered and effective PicoCELA 21 Japan JP7549851B Wireless node, wireless communication system, and wireless communication method 09/06/2023 09/06/2043 Registered and effective PicoCELA 22 Japan JP7539679B Node, system, method, and program 01/15/2024 01/15/2044 Registered and effective PicoCELA 23 U.S.
There are no minimum purchase requirements. 43 Compex JPY87,883 thousand (approximately $613 thousand); 23% Service scope: Compex purchases raw material parts specified by the Company, manufactures products as required by the Company and delivers and sells the completed products to the Company at the agreed price.
Compex JPY87,883 thousand (approximately $613 thousand); 23% Service scope: Compex purchases raw material parts specified by the Company, manufactures products as required by the Company and delivers and sells the completed products to the Company at the agreed price. Term: The first term of the contract was in effect between June 17, 2022 and June 16, 2024.
US11765639 Controlling tree topology over mesh topology based on autonomous decentralized control 04/23/2021 04/22/2041 Registered and effective PicoCELA 26 U.S. US11483757 Wireless route control method, wireless communication system, and wireless node 05/02/2018 (PCT filed) 05/01/2038 Registered and effective PicoCELA 27 U.S.
US11483757B2 Wireless route control method, wireless communication system, and wireless node 05/02/2018 (PCT filed) 05/01/2038 Registered and effective PicoCELA 32 U.S. US11838847B2 Wireless route control method, wireless communication system, and wireless node 09/22/2022 09/21/2042 Registered and effective PicoCELA 33 U.S. US12143915B2 Controlling tree topology over mesh topology based on autonomous decentralized control 08/08/2023 08/08/2043 Registered and effective PicoCELA 34 U.S.
Our services PicoManager , which is a cloud-based service monitoring communication quality and connectivity, is provided together with the PCWL series mesh Wi-Fi access points. 36 Figure 2 PicoCELA Products & Services Our revenue, disaggregated by revenue stream for the fiscal years ended September 30, 2024, 2023, and 2022, was as follows (in thousands): (in thousands, except change % data) Fiscal Years Ended September 30, Change (2024 vs 2023) 2024($) 2024(¥) 2023($) 2023(¥) 2022(¥) ¥ YoY % Revenue from product equipment 4,366 625,482 3,080 465,691 540,857 159,791 34.3 % Revenue from SaaS, Maintenance and others 1,109 158,921 620 93,830 141,264 65,091 69.4 % Total revenue 5,475 784,403 3,700 559,521 682,121 224,882 40.2 % Below are the details of our PBE technology, PCWL series , and PicoManager services.
Our services PicoManager , which is a cloud-based service monitoring communication quality and connectivity, is provided together with the PCWL series mesh Wi-Fi access points. 36 Figure 2 PicoCELA Products & Services Our revenue, disaggregated by revenue stream for the fiscal years ended September 30, 2025, 2024, and 2023, , was as follows (in thousands): (in thousands, except change % data) Fiscal Years Ended September 30, Change (2025 vs 2024) 2025($) 2025(¥) 2024(¥) 2023(¥) ¥ YoY % Revenue from product equipment 3,021 447,069 627,720 465,691 (180,651 ) -28.8 % Revenue from SaaS, Maintenance and others 660 97,621 156,683 93,830 (59,062 ) -37.7 % Total revenue 3,681 544,690 784,403 559,521 (239,713 ) -30.6 % Below are the details of our PBE technology, PCWL series , and PicoManager services.
While we currently offer a basic version of PicoManager with the purchase of our access points, we also provide an option to subscribe to upgraded PicoManager services. Starting approximately in June 2025, we plan to require a recurring subscription to PicoManager as a condition for purchasing our mesh Wi-Fi access point devices.
While we currently offer a basic version of PicoManager with the purchase of our access points, we also provide an option to subscribe to upgraded PicoManager services.
NISHIO shall accept the prices before purchasing relevant products from the Company. NISHIO shall pay the Company for the products it purchases monthly. Amount: NISHIO shall purchase and maintain 100 PCWL-0410 devices in the first year after signing the original framework contract (the “First Contract Term”).
SCSK Minori shall accept the prices before purchasing relevant products from the Company. SCSK Minori shall pay the Company for the products it purchases monthly. Amount: SCSK Minori shall purchase and maintain at least 10 PCWL-0400 devices.
Advertising The Premiums and Representations Act (Act No. 134 of 1962, as amended) stipulates the restricted methods and means of various advertisements, representations, and sales promotions, in a broad sense. When we advertise our products, we must provide appropriate information under this act, so as not to mislead our customers.
We believe that we are in compliance with these regulations as of the date of this annual report. Advertising The Premiums and Representations Act (Act No. 134 of 1962, as amended) stipulates the restricted methods and means of various advertisements, representations, and sales promotions, in a broad sense.
Term: The initial term was one year from November 28, 2019, the date of execution of the original framework contract. Automatically renewed annually for successive one-year periods, with the current term until unless either party provides a written notice of its intent not to renew at least three months prior to the expiration of the applicable term.
It can be automatically renewed annually for successive one-year periods unless either party provides a written notice of its intent not to renew at least 90 days prior to the expiration of the applicable term. As of the date of this annual report, the parties have renewed the contract, and it is still in effect.
The amounts in the tables refer to our payment amount paid to our suppliers for the products they manufactured and their services. The percentages refer to the payment amount occupied in our total payment to all our suppliers. ● Fiscal year ended September 30, 2024 Supplier Amount for (JPY); Percentage Major Contract Terms Emplus Technologies, Inc.
The amounts in the tables refer to our payment amount paid to our suppliers for the products they manufactured and their services.
Termination provisions: If any of the events specified in the agreement occur in respect to either party, the other party may immediately terminate the agreement, in whole or in part, without any notice. 46 FURUNO ELECTRIC CO., LTD (“FURUNO”) JPY85,436 thousand (approximately $596 thousand); 11% Contract scope: the Company grants FURUNO non-exclusive rights to sell the products as negotiated between the parties in Japan.
FURUNO ELECTRIC CO., LTD (“FURUNO”) JPY85,436 thousand (approximately $596 thousand); 11% Contract scope: the Company grants FURUNO non-exclusive rights to sell the products as negotiated between the parties in Japan. Term: The initial term was one year from June 12, 2024, the date of execution of the original framework contract.
Daifuku shall accept the prices before purchasing relevant products from the Company. Daifuku shall pay the Company for the products it purchases monthly. Termination provisions: Either party may terminate the agreement at any time during the agreement period with a written notice submitted at least six months in advance.
Termination provisions: Either party may terminate the agreement at any time during the agreement period with a written notice submitted at least six months in advance. If any of the events specified in the agreement occur in respect to either party, the other party may immediately terminate the agreement, in whole or in part, without any notice.
The purchasing amount and products are decided by separate purchasing orders after the First Contract Term and no minimum purchasing amount of certain PCWL devices is needed. Termination provisions: Either party may terminate the agreement at any time during the agreement period with a written notice submitted at least six months in advance.
Amount: NISHIO shall purchase and maintain 100 PCWL-0410 devices in the first year after signing the original framework contract (the “First Contract Term”). The purchasing amount and products are decided by separate purchasing orders after the First Contract Term and no minimum purchasing amount of certain PCWL devices is needed.
(8) Representing an aggregate of 8,841,960 Common Shares held by 28 holders, each one of which holds less than 5% of our voting interest, as of the date of this annual report. 30 Corporate Information Our headquarters are located at 2-34-5 Ningyocho, SANOS Building, Nihonbashi, Chuo-ku, Tokyo 103-0013, Japan, and our phone number is +81 03-6661-2780.
The details of the foregoing notice are described in the report of foreign private issuer on Form 6-K filed with the SEC on February 11, 2026 (File No. 001-42470), which is incorporated by reference herein. Corporate Information Our headquarters are located at 2-34-5 Ningyocho, SANOS Building, Nihonbashi, Chuo-ku, Tokyo 103-0013, Japan, and our phone number is +81 03-6661-2780.
Item 4. INFORMATION ON THE COMPANY A. History and Development of the Company Corporate History PicoCELA was incorporated in Tokyo, Japan in 2008 as a joint-stock corporation ( kabushiki kaisha ) with limited liability.
All representations of share amounts issued and outstanding prior to January 26, 2026 under this heading do not reflect the 1-for-30 reverse share split which took effect on January 26, 2026. PicoCELA was incorporated in Tokyo, Japan in 2008 as a joint-stock corporation ( kabushiki kaisha ) with limited liability.
US11838847 Wireless route control method, wireless communication system, and wireless node 09/22/2022 09/21/2042 Registered and effective PicoCELA 28 Australia AU2011218961B2** Communications system, slave node, route building method, and program 02/22/2011 02/22/2031 Registered and effective Kyushu University* 54 No. Country Registration No.
US12200597B2 Wireless route control method, wireless communication system, and wireless node 10/24/2023 10/24/2043 Registered and effective PicoCELA 54 No. Country Registration No.
Based on our past experience, if the agreement is renewed after March 31, 2025, it is likely to be renewed on the same terms as are currently in effect. Since we rely on the technologies licensed by Kyushu University to develop our products, the termination of these licenses could have a material adverse effect on our business. See “Item 3.
As of the date of this annual report, the license will expire on March 31, 2028, subject to other termination provisions. Based on our past experience, the agreement is likely to be renewed on the same terms as are currently in effect.
Termination provisions: If any of the events specified in the agreement occur with respect to either party, the other party may terminate the agreement. Purchase Order with down payment of 50% of the total order for the products to be manufactured within five business days after signing a separate purchase order.
Termination provisions: Either party may terminate the agreement anytime during the agreement period with a written notice submitted at least six months in advance. If any of the events specified in the agreement occur in respect to either party, the other party may immediately terminate the agreement, in whole or in part, without any notice.
As such, we have only one class of shares, the Common Shares, authorized for issuance as of the date of this annual report. 29 On October 6, 2024, our board of directors approved a forward split of our Common Shares at a ratio of 60-for-1 share.
On October 6, 2024, our board of directors approved a forward split of our Common Shares at a ratio of 60-for-1 share. The forward split became effective on October 24, 2024. Consulting Agreement On March 31, 2023, the Company entered into a consulting and services agreement (the “Consulting Agreement”) with Spirit Advisors LLC (“Spirit Advisors”).
Removed
Corporate Structure The following chart illustrates our corporate structure as of the date of this annual report. (1) Representing 3,543,960 Common Shares held by our founder and CEO, Hiroshi Furukawa, as of the date of this annual report. (2) Representing 1,330,140 Common Shares held by Kluk Jan Juliusz Zygmunt, with business address at Warsaw 00-116, ul.
Added
Item 4. INFORMATION ON THE COMPANY A. History and Development of the Company Corporate History All representations of share amounts issued and outstanding prior to October 24, 2024 under this heading do not reflect the to a 60-for-1 share split, which took effect on October 24, 2024.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

28 edited+21 added−2 removed66 unchanged
Operating Results Comparison of Results of Operations for the Fiscal Years Ended September 30, 2024 and 2023 The following table sets forth our statements of operations for the fiscal years ended September 30, 2024 and 2023: (in thousands, except change % data) Fiscal Years Ended September 30, Change 2024 vs 2023 2024($) 2024(¥) 2023(¥) ¥ YoY % Revenue from product equipment 4,366 625,482 465,691 159,791 34.3 % Revenue from SaaS, maintenance and others 1,109 158,921 93,830 65,091 69.4 % Total revenue 5,475 784,403 559,521 224,882 40.2 % Cost of revenue 2,521 361,202 290,090 71,112 24.5 % Selling, general and administrative expenses 6,076 870,385 897,965 (27,580 ) (3.1 )% Operating loss (3,122 ) (447,184 ) (628,534 ) 181,350 (28.9 )% Interest income (expense), net (217 ) (31,028 ) 245 (31,273 ) (1,2764.5 )% Other income (expense), net (12 ) (1,709 ) (5,667 ) 3,958 (69.8 )% Net loss before tax (3,351 ) (479,921 ) (633,956 ) 154,035 (24.3 )% Income tax benefit (expense) - - - - 0.0 % Net loss (3,351 ) (479,921 ) (633,956 ) 154,035 -24.3 % Revenue Revenue increased by JPY224,882 thousand, or 40.2%, year-over-year to JPY784,403 thousand ($5,475 thousand).
Comparison of Results of Operations for the Fiscal Years Ended September 30, 2024 and 2023 The following table sets forth our statements of operations for the fiscal years ended September 30, 2024 and 2023: (in thousands, except change % data) Fiscal Years Ended September 30, Change 2024 vs 2023 2024($) 2024(¥) 2023(¥) ¥ YoY % Revenue from product equipment 4,366 625,482 465,691 159,791 34.3 % Revenue from SaaS, maintenance and others 1,109 158,921 93,830 65,091 69.4 % Total revenue 5,475 784,403 559,521 224,882 40.2 % Cost of revenue 2,521 361,202 290,090 71,112 24.5 % Selling, general and administrative expenses 6,076 870,385 897,965 (27,580 ) (3.1 )% Operating loss (3,122 ) (447,184 ) (628,534 ) 181,350 (28.9 )% Interest income (expense), net (217 ) (31,028 ) 245 (31,273 ) (1,2764.5 )% Other income (expense), net (12 ) (1,709 ) (5,667 ) 3,958 (69.8 )% Net loss before tax (3,351 ) (479,921 ) (633,956 ) 154,035 (24.3 )% Income tax benefit (expense) - - - - 0.0 % Net loss (3,351 ) (479,921 ) (633,956 ) 154,035 -24.3 % Revenue Revenue increased by JPY224,882 thousand, or 40.2%, year-over-year to JPY784,403 thousand.
Comparison of Results of Operations for the Fiscal Years Ended September 30, 2023 and 2022 The following table sets forth our statements of operations for the fiscal years ended September 30, 2023 and 2022: (in thousands, except change % data) Years Ended September 30, Change (2023 vs 2022) 2023 ($) 2023 (¥) 2022(¥) ¥ YoY % Revenue from product equipment 3,251 465,691 540,857 (75,166 ) -13.9 % Revenue from SaaS, maintenance and others 655 93,830 141,264 (47,434 ) -33.6 % Total revenue 3,906 559,521 682,121 (122,600 ) -18.0 % Cost of revenue 2,025 290,090 244,815 45,275 18.5 % Selling, general and administrative expenses 6,269 897,965 453,545 444,420 98.0 % Operating loss (4,388 ) (628,534 ) (16,239 ) (612,295 ) 3770.5 % Other income (expense), net (38 ) (5,422 ) 11,059 (16,481 ) -149.0 % Net loss before tax (4,426 ) (633,956 ) (5,180 ) (628,776 ) 12138.5 % Income tax benefit (expense) - - - - 0.0 % Net loss (4,426 ) (633,956 ) (5,180 ) (628,776 ) 12138.5 % Revenue Revenue decreased by JPY122,600 thousand, or 18.0%, from JPY682,121 thousand for the fiscal year ended September 30, 2022 to JPY559,521 thousand (approximately $3,906 thousand) for the fiscal year ended September 30, 2023.
Comparison of Results of Operations for the Fiscal Years Ended September 30, 2023 and 2022 The following table sets forth our statements of operations for the fiscal years ended September 30, 2023 and 2022: (in thousands, except change % data) Fiscal Years Ended September 30, Change (2023 vs 2022) 2023 ($) 2023 (¥) 2022(¥) ¥ YoY % Revenue from product equipment 3,251 465,691 540,857 (75,166 ) -13.9 % Revenue from SaaS, maintenance and others 655 93,830 141,264 (47,434 ) -33.6 % Total revenue 3,906 559,521 682,121 (122,600 ) -18.0 % Cost of revenue 2,025 290,090 244,815 45,275 18.5 % Selling, general and administrative expenses 6,269 897,965 453,545 444,420 98.0 % Operating loss (4,388 ) (628,534 ) (16,239 ) (612,295 ) 3770.5 % Other income (expense), net (38 ) (5,422 ) 11,059 (16,481 ) -149.0 % Net loss before tax (4,426 ) (633,956 ) (5,180 ) (628,776 ) 12138.5 % Income tax benefit (expense) - - - - 0.0 % Net loss (4,426 ) (633,956 ) (5,180 ) (628,776 ) 12138.5 % Revenue Revenue decreased by JPY122,600 thousand, or 18.0%, from JPY682,121 thousand for the fiscal year ended September 30, 2022 to JPY559,521 thousand for the fiscal year ended September 30, 2023.
Risk Factors—Risks Related to Our Business and Industry—A shortage of Wi-Fi Chips or labor, or increases in their costs, could delay delivery and launch of our mesh Wi-Fi access points or increase its cost, which could materially and adversely affect us.” 66 ● Ability to maintain quantity and quality of our products supplied by third-party manufacturers We outsource the manufacturing of all hardware products, PCWL series , and our mesh Wi-Fi access points devices, and are therefore subject to certain risks if our third-party manufacturers do not provide our end-customers with the quality and performance they expect from our products.
Risk Factors—Risks Related to Our Business and Industry—A shortage of Wi-Fi Chips or labor, or increases in their costs, could delay delivery and launch of our mesh Wi-Fi access points or increase its cost, which could materially and adversely affect us.” 68 ● Ability to maintain quantity and quality of our products supplied by third-party manufacturers We outsource the manufacturing of all hardware products, PCWL series , and our mesh Wi-Fi access points devices, and are therefore subject to certain risks if our third-party manufacturers do not provide our end-customers with the quality and performance they expect from our products.
Cash flows for the fiscal years ended September 30, 2024 and 2023: (Yen in thousands) Fiscal Years Ended September 30, 2024 2023 Cash flows from operating activities: Net loss ¥ (479,921 ) ¥ (633,956 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 20,668 12,176 Loss on disposal of assets 28 43 Noncash operating lease expense 10,660 9,835 Changes in assets and liabilities: Accounts receivable (6,604 ) 52,728 Related party receivable 54,678 (48,693 ) Inventories (22,739 ) (114,057 ) Advance payments 79,100 (49,052 ) Prepaid expenses and other current assets (12,246 ) (34,351 ) Other assets 2,593 (3,921 ) Accounts payable 30 1,736 Contract liabilities 75,307 47,915 Accrued expenses and other liabilities 46,293 29,646 Operating lease liabilities (10,660 ) (9,964 ) Net cash used in operating activities (242,813 ) (739,915 ) Cash flows from investing activities: Purchases of property and equipment (18,814 ) (20,477 ) Purchases of intangible assets (25,211 ) - Net cash used in investing activities (44,025 ) (20,477 ) Cash flows from financing activities: Proceeds from borrowing 501,000 250,000 Payments on borrowing (496,022 ) (109,068 ) Proceeds from convertible bond 299,997 Proceeds from common stock issuance 9,890 Proceeds from preferred C stock issuance 138,720 852,137 Payments on deferred initial public offering costs (128,049 ) (77,700 ) Net cash provided by (used in) financing activities 315,646 925,259 Net increase (decrease) in cash and cash equivalents 28,808 164,867 Cash and cash equivalents at beginning of year 427,967 263,100 Cash and cash equivalents at end of year ¥ 456,775 ¥ 427,967 Operating Activities Net cash used in operating activities decreased from JPY739,915 thousand during the fiscal year ended September 30, 2023 to JPY242,813 thousand ($1,695 thousand) during the fiscal year ended September 30, 2024.
Cash flows for the fiscal years ended September 30, 2024 and 2023: (Yen in thousands) Fiscal Years Ended September 30, 2024 2023 Cash flows from operating activities: Net loss ¥ (479,921 ) ¥ (633,956 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 20,668 12,176 Loss on disposal of assets 28 43 Noncash operating lease expense 10,660 9,835 Changes in assets and liabilities: Accounts receivable (6,604 ) 52,728 Related party receivable 54,678 (48,693 ) Inventories (22,739 ) (114,057 ) Advance payments 79,100 (49,052 ) Prepaid expenses and other current assets (12,246 ) (34,351 ) Other assets 2,593 (3,921 ) Accounts payable 30 1,736 Contract liabilities 75,307 47,915 Accrued expenses and other liabilities 46,293 29,646 Operating lease liabilities (10,660 ) (9,964 ) Net cash used in operating activities (242,813 ) (739,915 ) Cash flows from investing activities: Purchases of property and equipment (18,814 ) (20,477 ) Purchases of intangible assets (25,211 ) - Net cash used in investing activities (44,025 ) (20,477 ) Cash flows from financing activities: Proceeds from borrowing 501,000 250,000 Payments on borrowing (496,022 ) (109,068 ) Proceeds from convertible bond 299,997 - Proceeds from common stock issuance - 9,890 Proceeds from preferred C stock issuance 138,720 852,137 Payments on deferred IPO costs (128,049 ) (77,700 ) Net cash provided by (used in) financing activities 315,646 925,259 Net increase (decrease) in cash and cash equivalents 28,808 164,867 Cash and cash equivalents at beginning of year 427,967 263,100 Cash and cash equivalents at end of year ¥ 456,775 ¥ 427,967 Operating Activities Net cash used in operating activities decreased from JPY739,915 thousand during the fiscal year ended September 30, 2023 to JPY242,813 thousand during the fiscal year ended September 30, 2024.
Risk Factors—Risks Related to Our Business and Industry—Changes in the policies of the Japanese government that affect demand for enterprise mesh Wi-Fi access points may adversely affect the ability or willingness of prospective customers to purchase our Wi-Fi access points devices.” 67 ● Ability to attract and retain talent and scale our team Our success depends in part upon our ability to attract, train, assimilate, and retain a sufficient number of employees, including engineers, researchers, product and service developers, and quality assurance professionals in the field of radio and Internet communication.
Risk Factors—Risks Related to Our Business and Industry—Changes in the policies of the Japanese government that affect demand for enterprise mesh Wi-Fi access points may adversely affect the ability or willingness of prospective customers to purchase our Wi-Fi access points devices.” 69 ● Ability to attract and retain talent and scale our team Our success depends in part upon our ability to attract, train, assimilate, and retain a sufficient number of employees, including engineers, researchers, product and service developers, and quality assurance professionals in the field of radio and Internet communication.
Other Income (Expense), net Other expenses decreased by JPY3,958 thousand, or 69.8%, year-over-year to JPY1,709 thousand ($12 thousand), primarily due to the decrease in foreign currency settlement losses.
Other Income (Expense), net Other expenses decreased by JPY3,958 thousand, or 69.8%, year-over-year to JPY1,709 thousand, primarily due to the decrease in foreign currency settlement losses.
Interest Income (Expense), net Interest income (expense) decreased from the interest income of JPY245 thousand in the fiscal year ended September 30, 2023 to the interest expense of JPY31,028 thousand ($217 thousand) in the fiscal year ended September 30, 2024, mainly due to the increase in borrowings.
Interest Income (Expense), net Interest income (expense) decreased from the interest income of JPY245 thousand in the fiscal year ended September 30, 2023 to the interest expense of JPY31,028 thousand in the fiscal year ended September 30, 2024, mainly due to the increase in borrowings.
Actual results could differ from those estimates, and these differences could have a significant impact on the financial statements. The significant accounting estimates include impairment of inventory and property and equipment, incentive compensation expenses, and income taxes. 68 Revenue Recognition The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”) for all periods presented.
Actual results could differ from those estimates, and these differences could have a significant impact on the financial statements. The significant accounting estimates include impairment of inventory and property and equipment, incentive compensation expenses, and income taxes. 70 Revenue Recognition The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”) for all periods presented.
Other Income (Expense), net Other income (expense), net decreased by JPY 16,481 thousand, or 149.0%, year-over-year from the income of JPY11,059 thousand during the fiscal year ended September 30, 2022 to the expense of JPY 5,422 thousand (approximately $38 thousand) during the fiscal year ended September 30, 2023 primarily due to foreign exchange loss incurred due to yen’s sharp depreciation against U.S. dollars.
Other Income (Expense), net Other income (expense), net decreased by JPY 16,481 thousand, or 149.0%, year-over-year from the income of JPY11,059 thousand during the fiscal year ended September 30, 2022 to the expense of JPY 5,422 thousand during the fiscal year ended September 30, 2023 primarily due to foreign exchange loss incurred due to yen’s sharp depreciation against U.S. dollars.
Liquidity and Capital Resources As of September 30, 2024 and 2023, we had cash of JPY456,775 thousand ($3,189 thousand) and JPY427,967 thousand, respectively. Liquidity is a measure of our ability to meet potential cash requirements. We generally funded our operations with cash flow from operations, and, when needed, borrowing from Japanese financial institutions and capital injections from our principal shareholders.
Liquidity and Capital Resources As of September 30, 2024 and 2023, we had cash of JPY456,775 thousand and JPY427,967 thousand, respectively. Liquidity is a measure of our ability to meet potential cash requirements. We generally funded our operations with cash flow from operations, and, when needed, borrowing from Japanese financial institutions and capital injections from our principal shareholders.
Years Ended September 30, 2023 2022 (in thousands of Japanese yen) Cash flows from operating activities: Net loss ¥ (633,956 ) ¥ (5,180 ) Adjustments to reconcile net loss to net cash (used in) provided by operating activities: Depreciation and amortization 12,176 8,234 Loss (gain) on disposal of assets 43 - Noncash operating lease expense 9,835 8,901 Changes in assets and liabilities: Accounts receivable 4,035 (158,421 ) Inventories (114,057 ) 30,139 Advance payments (49,052 ) (22,519 ) Prepaid expenses and other current assets (34,351 ) 4,418 Other assets (3,921 ) (4,288 ) Accounts payable 1,736 (4,182 ) Contract liabilities 47,915 16,215 Accrued expenses and other liabilities 29,646 20,325 Operating lease liabilities (9,964 ) (8,900 ) Net cash used in operating activities (739,915 ) (115,258 ) Cash flows from investing activities: Purchases of property and equipment (20,477 ) (3,561 ) Purchases of intangible assets - (11,886 ) Net cash used in investing activities (20,477 ) (15,447 ) Cash flows from financing activities: Proceeds from borrowing 250,000 - Payments on borrowing (109,068 ) (6,588 ) Proceeds from Common Shares issuance 9,890 - Proceeds from Class C preferred shares issuance 852,137 Payments on deferred initial public offering costs (77,700 ) - Net cash (used in) provided by financing activities 925,259 (6,588 ) Net decrease in cash and cash equivalents 164,867 (137,293 ) Cash and cash equivalents at beginning of year 263,100 400,393 Cash and cash equivalents at end of year ¥ 427,967 ¥ 263,100 65 Operating Activities Net cash used in operating activities increased from JPY 115,258 thousand during the fiscal year ended September 30, 2022 to JPY 739,915 thousand (approximately $5,165 thousand) during the fiscal year ended September 30, 2023.
Fiscal Years Ended September 30, 2023 2022 (in thousands of Japanese yen) Cash flows from operating activities: Net loss ¥ (633,956 ) ¥ (5,180 ) Adjustments to reconcile net loss to net cash (used in) provided by operating activities: Depreciation and amortization 12,176 8,234 Loss (gain) on disposal of assets 43 - Noncash operating lease expense 9,835 8,901 Changes in assets and liabilities: Accounts receivable 4,035 (158,421 ) Inventories (114,057 ) 30,139 Advance payments (49,052 ) (22,519 ) Prepaid expenses and other current assets (34,351 ) 4,418 Other assets (3,921 ) (4,288 ) Accounts payable 1,736 (4,182 ) Contract liabilities 47,915 16,215 Accrued expenses and other liabilities 29,646 20,325 Operating lease liabilities (9,964 ) (8,900 ) Net cash used in operating activities (739,915 ) (115,258 ) Cash flows from investing activities: Purchases of property and equipment (20,477 ) (3,561 ) Purchases of intangible assets - (11,886 ) Net cash used in investing activities (20,477 ) (15,447 ) Cash flows from financing activities: Proceeds from borrowing 250,000 - Payments on borrowing (109,068 ) (6,588 ) Proceeds from Common Shares issuance 9,890 - Proceeds from Class C preferred shares issuance 852,137 - Payments on deferred IPO costs (77,700 ) - Net cash (used in) provided by financing activities 925,259 (6,588 ) Net decrease in cash and cash equivalents 164,867 (137,293 ) Cash and cash equivalents at beginning of year 263,100 400,393 Cash and cash equivalents at end of year ¥ 427,967 ¥ 263,100 Operating Activities Net cash used in operating activities increased from JPY 115,258 thousand during the fiscal year ended September 30, 2022 to JPY 739,915 thousand during the fiscal year ended September 30, 2023.
The increase was primarily due to net loss from operations. Investing Activities Net cash used in investing activities increased from JPY 15,447 thousand during the fiscal year ended September 30, 2022 to JPY 20,477 thousand (approximately $143 thousand) during the fiscal year ended September 30, 2023.
The increase was primarily due to net loss from operations. Investing Activities Net cash used in investing activities increased from JPY 15,447 thousand during the fiscal year ended September 30, 2022 to JPY 20,477 thousand during the fiscal year ended September 30, 2023.
Net Loss As a result of the foregoing, the net loss was JPY479,921 thousand ($3,351 thousand) during the fiscal year ended September 30, 2024 compared to the net loss of JPY633,956 thousand during the fiscal year ended September 30, 2023.
Net Loss As a result of the foregoing, the net loss was JPY479,921 thousand during the fiscal year ended September 30, 2024 compared to the net loss of JPY633,956 thousand during the fiscal year ended September 30, 2023.
The increase was mainly due to the purchase of software. Financing Activities Net cash provided by financing activities decreased from JPY925,259 thousand to JPY315,646 thousand ($2,203 thousand).
The increase was mainly due to the purchase of software. Financing Activities Net cash provided by financing activities decreased from JPY925,259 thousand to JPY315,646 thousand.
Cash flows for the fiscal years ended September 30, 2023 and 2022 As of September 30, 2023 and 2022, we had cash of JPY427,967 thousand (approximately $2,988 thousand) and JPY263,100 thousand, respectively. Liquidity is a measure of our ability to meet potential cash requirements.
Cash flows for the fiscal years ended September 30, 2023 and 2022 As of September 30, 2023 and 2022, we had cash of JPY427,967 thousand and JPY263,100 thousand, respectively. Liquidity is a measure of our ability to meet potential cash requirements.
The revenue is recognized over the contract term of up to six years since the customers simultaneously receive and consume the benefits provided by the services over the contract period. 69 Inventories Inventories consist of finished goods, raw materials, and work in progress.
The revenue is recognized over the contract term of up to six years since the customers simultaneously receive and consume the benefits provided by the services over the contract period. 71 Inventories Inventories consist of finished goods, raw materials, and work in progress (“WIP”).
The decrease was primarily due to the smaller loss we had during the fiscal year ended September 30, 2024. 64 Investing Activities Net cash used in investing activities increased from JPY20,477 thousand during the fiscal year ended September 30, 2023 to JPY44,025 thousand ($307 thousand) during the fiscal year ended September 30, 2024.
The decrease was primarily due to the smaller loss we had during the fiscal year ended September 30, 2024. 66 Investing Activities Net cash used in investing activities increased from JPY20,477 thousand during the fiscal year ended September 30, 2023 to JPY44,025 thousand during the fiscal year ended September 30, 2024.
In addition, extra-manufacturing and engineering costs was incurred to adjust the new product’s design to cope with Wi-Fi IC chip shortage. 63 Selling, General and Administrative Expenses SG&A expenses increased by JPY444,420 thousand, or 98.0%, year-over-year from JPY453,545 thousand for the fiscal year ended September 30, 2022 to JPY 897,965 thousand (approximately $6,269 thousand) for the fiscal year ended September 30, 2023.
In addition, extra-manufacturing and engineering costs was incurred to adjust the new product’s design to cope with Wi-Fi IC chip shortage. 64 Selling, General and Administrative Expenses SG&A expenses increased by JPY444,420 thousand, or 98.0%, year-over-year from JPY453,545 thousand for the fiscal year ended September 30, 2022 to JPY 897,965 thousand for the fiscal year ended September 30, 2023.
The increase was mainly due to the purchase of technical equipment for research and development. Financing Activities Net cash provided by financing activities increased from the cash use of JPY6,588 during the fiscal year ended September 30, 2022 to the source of JPY925,259 thousand (approximately $6,459 thousand) during the fiscal year ended September 30, 2023.
The increase was mainly due to the purchase of technical equipment for research and development. 67 Financing Activities Net cash provided by financing activities increased from the cash use of JPY6,588 during the fiscal year ended September 30, 2022 to the source of JPY925,259 thousand during the fiscal year ended September 30, 2023.
Cost of Revenue Cost of revenue increased by JPY45,275 thousand, or 18.5%, year-over-year from JPY244,815 thousand for the fiscal year ended September 30, 2022 to JPY290,090 thousand (approximately $2,025 thousand) for the fiscal year ended September 30, 2023.
Cost of Revenue Cost of revenue increased by JPY45,275 thousand, or 18.5%, year-over-year from JPY244,815 thousand for the fiscal year ended September 30, 2022 to JPY290,090 thousand for the fiscal year ended September 30, 2023.
Net Loss As a result of the foregoing, the net loss was JPY 633,956 thousand (approximately $4,426 thousand) during the fiscal year ended September 30, 2023 compared to the net loss of JPY 5,180 thousand during the fiscal year ended September 30, 2022. B.
Net Loss As a result of the foregoing, the net loss was JPY 633,956 thousand during the fiscal year ended September 30, 2023 compared to the net loss of JPY 5,180 thousand during the fiscal year ended September 30, 2022. B.
During the fiscal years ended September 30, 2024 and 2023, we spent JPY44,025 thousand (approximately $307 thousand) and JPY20,477 thousand, respectively, on the acquisitions of machinery, equipment, and intangible assets. C. Research and Development, Patents and Licenses, etc. See “Item 4. Information on the Company—B. Business Overview—Intellectual Property.” D.
During the fiscal years ended September 30, 2025, 2024 and 2023, we spent JPY45,997 thousand, JPY44,025 thousand and JPY20,477 thousand, respectively, on the acquisitions of machinery, equipment, and intangible assets. C. Research and Development, Patents and Licenses, etc. See “Item 4. Information on the Company—B. Business Overview—Intellectual Property.” D.
Cost of Revenue Cost of revenue increased by JPY71,112 thousand, or 24.5%, year-over-year to JPY361,202 thousand ($2,521 thousand), reflecting the higher direct costs associated with the higher revenue during the fiscal year ended September 30, 2024. 62 Selling, General and Administrative Expenses (“SG&A expenses”) SG&A expenses decreased by JPY27,580 thousand, or 3.1%, year-over-year to JPY870,385 thousand ($6,076 thousand), primarily due to efficient marketing spending .
Cost of Revenue Cost of revenue increased by JPY71,112 thousand, or 24.5%, year-over-year to JPY361,202 thousand, reflecting the higher direct costs associated with the higher revenue during the fiscal year ended September 30, 2024. 63 Selling, General and Administrative Expenses (“SG&A expenses”) SG&A expenses decreased by JPY27,580 thousand, or 3.1%, year-over-year to JPY870,385 thousand, primarily due to efficient marketing spending.
The increase was primarily due to financing by preferred share issuance and additional bank borrowings. Contractual Obligations and Commitments As of September 30, 2024, the Company had a total of JPY257,500 thousand (approximately $1,798 thousand) contractual obligations for future payments.
The increase was primarily due to financing by preferred share issuance and additional bank borrowings. Contractual Obligations and Commitments As of September 30, 2025, the Company had a total of JPY281,727 thousand (approximately $1,904 thousand) contractual obligations for future payments.
The cost of services received from employees and non-employees in exchange for awards without performance conditions is recognized in the statements of income based on the estimated fair value of those awards on the grant date and amortized on a straight-line basis over the requisite service period or vesting period.
Stock Based Compensation The Company accounts for stock-based compensation awards in accordance with ASC Topic 718, “ Compensation – Stock Compensation. ” The cost of services received from employees and non-employees in exchange for awards without performance conditions is recognized in the statements of income based on the estimated fair value of those awards on the grant date and amortized on a straight-line basis over the requisite service period or vesting period.
The Company’s assumptions about future conditions that are important to its assessment of potential impairment of its long-lived assets are subject to uncertainty, and the Company will continue to monitor these conditions in future periods as new information becomes available.
The Company’s assumptions about future conditions that are important to its assessment of potential impairment of its long-lived assets are subject to uncertainty, and the Company will continue to monitor these conditions in future periods as new information becomes available. There were no impairments of property, equipment and intangible assets during the fiscal years ended September 30, 2025 and 2024.
If circumstances require a long-lived asset or asset group to be tested for impairment, the Company first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying amount.
If circumstances require a long-lived asset or asset group to be tested for impairment, the Company first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying amount unless the Company is able to satisfy itself that there is no impairment loss by doing some analysis without the need for detailed projections.
Fair value is determined using various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. There were no events or circumstances identified during the fiscal years ended September 30, 2024, 2023, and 2022 that required the Company to perform a quantitative impairment assessment.
Fair value is determined using various valuation techniques depending on the type and nature of assets including discounted cash flow models, quoted market values, third-party independent appraisals and depreciated replacement cost method, as considered necessary.
Removed
In making these determinations, the Company uses certain assumptions, including, but not limited to: (i) estimated fair value of the assets; and (ii) estimated undiscounted future cash flows expected to be generated by these assets, which are based on additional assumptions such as asset utilization, length of the asset being used in the Company’s operations, and (iii) estimated residual values.
Added
Operating Results Comparison of Results of Operations for the Fiscal Years Ended September 30, 2025 and 2024 The following table sets forth our statements of operations for the fiscal years ended September 30, 2025 and 2024: (in thousands, except change % data) Fiscal Year Ended September 30, Change 2025 vs 2024 2025($) 2025(¥) 2024(¥) ¥ YoY % Revenue from product equipment 3,021 447,069 627,720 (180,651 ) -28.8 % Revenue from SaaS, Maintenance and others 660 97,621 156,683 (59,062 ) -37.7 % Total revenues 3,681 544,690 784,403 (239,713 ) -30.6 % Cost of revenues 1,717 254,079 361,202 (107,123 ) -29.7 % Selling, general and administrative expenses 6,029 892,048 870,385 21,663 2.5 % Operating loss (4,065 ) (601,437 ) (447,184 ) (154,253 ) 34.5 % Interest income (expense), net (118 ) (17,412 ) (31,028 ) 13,616 -43.9 % Other income (expense), net (50 ) (7,463 ) (1,709 ) (5,754 ) 336.7 % Net loss before tax (4,233 ) (626,312 ) (479,921 ) (146,391 ) 30.5 % Income tax benefit (expense) - - - - 0.0 % Net loss (4,233 ) (626,312 ) (479,921 ) (146,391 ) 30.5 % Revenue Revenue decreased by JPY239,713 thousand, or 30.6%, year-over-year to JPY544,690 thousand (approximately $3,681 thousand).
Removed
There were no impairments of property, equipment and intangible assets during the fiscal years ended September 30, 2024, 2023, and 2022. Stock Based Compensation The Company accounts for stock-based compensation awards in accordance with ASC Topic 718, “ Compensation – Stock Compensation ”.
Added
The decrease was primarily driven by following factors: ● Revenue from product equipment decreased by JPY180,651 thousand, mainly due to the delay in completion and delivery of our tailor-made products for special industry-use customers. ● Revenue from SaaS and maintenance services decreased by JPY59,062 thousand, mainly due to the decrease in revenue from the hardware products.
Added
Cost of Revenue Cost of revenue decreased by JPY107,123 thousand, or 29.7%, year-over-year to JPY254,079 thousand (approximately $1,717 thousand), reflecting the lower direct costs associated with the lower revenue during the fiscal year ended September 30, 2025. 62 Selling, General and Administrative Expenses (“SG&A expenses”) SG&A expenses increased by JPY21,663 thousand, or 2.5%, year-over-year to JPY892,048 thousand (approximately $6,028 thousand), primarily due to professional fees and expenses related to the US securities depositary and the filing of the reports required for the US securities registration.
Added
Interest Income (Expense), net Interest expense decreased from JPY31,028 thousand in the fiscal year ended September 30, 2024 to JPY17,412 thousand in the fiscal year ended September 30, 2025, mainly due to the decrease in borrowings. Other Income (Expense), net Other expenses increased by JPY5,754 thousand, or 336.7%, year-over-year to JPY7,463 thousand (approximately $50 thousand).
Added
Net Loss As a result of the foregoing, the net loss was JPY626,312 thousand during the fiscal year ended September 30, 2025 compared to the net loss of JPY479,921 thousand during the fiscal year ended September 30, 2024.
Added
Cash flows for the fiscal years ended September 30, 2025 and 2024 (Yen in thousands) Fiscal Years Ended September 30, 2025 2024 Cash flows from operating activities: Net loss ¥ (626,312 ) ¥ (479,921 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 26,528 20,668 Loss on disposal of assets - 28 Noncash operating lease expense 9,442 10,660 Share-based compensation expense 5,213 - Changes in assets and liabilities: Accounts receivable 169,679 (6,604 ) Related party receivable (30,829 ) 54,678 Inventories (57,650 ) (22,739 ) Advance payments (53,329 ) 79,100 Prepaid expenses and other current assets 5,288 (12,246 ) Other assets 4,511 2,593 Accounts payable (5,054 ) 30 Contract liabilities 41,562 75,307 Accrued expenses and other liabilities (23,628 ) 46,293 Operating lease liabilities (9,441 ) (10,660 ) Net cash used in operating activities (544,020 ) (242,813 ) Cash flows from investing activities: Purchases of property and equipment (28,338 ) (18,814 ) Purchases of intangible assets (17,659 ) (25,211 ) Net cash used in investing activities (45,997 ) (44,025 ) Cash flows from financing activities: Proceeds from borrowing 372,292 501,000 Payments on borrowing (346,170 ) (496,022 ) Proceeds from convertible bond - 299,997 Repayments of convertible bond (299,997 ) - Proceeds from common stock issuance 1,241,458 - Proceeds from preferred C stock issuance - 138,720 Payments on deferred offering costs (299,452 ) (128,049 ) Net cash provided by financing activities 668,131 315,646 Net increase in cash and cash equivalents 78,114 28,808 Cash and cash equivalents at beginning of year 456,775 427,967 Cash and cash equivalents at end of year ¥ 534,889 ¥ 456,775 Operating Activities Net cash used in operating activities increased from JPY242,813 thousand during the fiscal year ended September 30, 2024 to JPY544,020 thousand (approximately $3,677 thousand) during the fiscal year ended September 30, 2025.
Added
The increase was primarily due to the larger loss we had during the fiscal year ended September 30, 2025. 65 Investing Activities Net cash used in investing activities increased slightly from JPY44,025 thousand during the fiscal year ended September 30, 2024 to JPY45,997 thousand (approximately $311 thousand) during the fiscal year ended September 30, 2025.
Added
The increase was mainly due to the purchase of property and equipment. Financing Activities Net cash provided by financing activities increased from JPY315,646 thousand during the fiscal year ended September 30, 2024 to JPY668,131 thousand (approximately $4,515 thousand) during the fiscal year ended September 30, 2025.
Added
The increase was primarily due to the proceeds received from issuance of common stocks during the fiscal year ended September 30, 2025.
Added
As of September 30, 2025 Yen in thousands Payments due by period: Total Less than 1 year 1 – 3 years 4 – 5 years More than 5 years Long-term debt ¥ 272,376 ¥ 261,940 ¥ 10,436 ¥ - ¥ - Operating lease payments 9,351 7,540 1,811 — — Total ¥ 281,727 ¥ 269,480 ¥ 12,247 ¥ - ¥ - As of September 30, 2024, the Company had a total of JPY257,500 thousand contractual obligations for future payments.
Added
The Company bills customers (i) upon the execution of the contract and (ii) when control of the product is transferred to the customer, and customers generally pay within the same day of each billing. SaaS, maintenance and others The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”) for all periods presented.
Added
Consistent with the criteria of ASC 606, the Company recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to receive in exchange for those goods or services. The consumption tax that the Company collects concurrent with revenue-producing activities is excluded from revenue.
Added
The Company recognizes revenue as it satisfies a performance obligation when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services.
Added
To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price, including variable consideration, if any; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation.
Added
The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration to which it is entitled in exchange for the goods it transfers to the customer.
Added
Once a contract is determined to be within the scope of ASC 606 at contract inception, the Company reviews the contract to determine which performance obligations it must deliver and which of these performance obligations are distinct.
Added
The Company recognizes revenue based on the amount of the transaction price that is allocated to each performance obligation when that performance obligation is satisfied or as it is satisfied.
Added
The Company is a principal and records revenue on a gross basis when the Company is primarily responsible for fulfilling the obligation, has discretion in establishing pricing and controls the promised goods before transferring those goods or services to customers. The Company derives its revenue mainly from two sources: (1) Product equipment, and (2) SaaS, maintenance and others.
Added
All of the Company’s contracts with customers do not contain cancellable or refund-type provisions. The following is a description of the accounting policy for the principal revenue streams of the Company: Product equipment The Company generally sells the product based on market price plus a minor markup and sets the selling price per device based on cost plus margin.
Added
The Company does not offer discounts, price concessions, or right of return to the customers.
Added
Performance obligations are satisfied at the point in time when control of the product is transferred to the customer, which is generally the closing date on which title to and possession of the product or the completed installation and the risks and rewards of ownership are transferred to the customer.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

26 edited+27 added−12 removed23 unchanged
During the years ended September 30, 2017 to September 30, 2019, the Company issued four batches of stock options to acquire the equivalent of total 1,680,000 Common Shares of the Company (the “Plan No. 1”). The options granted under Plan No. 1 generally vest two years after the grant date and have an exercise period of 10 years.
During the years ended September 30, 2017 to September 30, 2019, the Company issued four batches of stock options to acquire the equivalent of total 56,000 Common Shares of the Company (the “Plan No. 1”). The options granted under Plan No. 1 generally vest two years after the grant date and have an exercise period of 10 years.
Compensation Recovery Policy We have adopted a compensation recovery policy to provide for the recovery of erroneously-awarded incentive compensation, as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act, final SEC rules, and applicable listing standards Stock Based Compensation Plan The Company has historically awarded stock options to various officers, directors, and employees of the Company to purchase Common Shares of the Company.
Share Ownership.” Compensation Recovery Policy We have adopted a compensation recovery policy to provide for the recovery of erroneously-awarded incentive compensation, as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act, final SEC rules, and applicable listing standards Stock Based Compensation Plan The Company has historically awarded stock options to various officers, directors, and employees of the Company to purchase Common Shares of the Company.
The stock options may not be transferred, pledged, or otherwise disposed of in any manner. 72 Exercise of Stock Options. Any stock options granted under the Plan is exercisable at such times and under such conditions under the terms of the Plan and specified in the stock option agreement.
The stock options may not be transferred, pledged, or otherwise disposed of in any manner. 74 Exercise of Stock Options. Any stock options granted under the Plan is exercisable at such times and under such conditions under the terms of the Plan and specified in the stock option agreement.
Limitation of Liability of Directors Under the Companies Act and our articles of incorporation we may exempt, by resolution of the board of directors, our directors from liabilities to us arising in connection with their failure to execute their duties in good faith and without gross negligence, within the limits stipulated by applicable laws and regulations.
Corporate Governance.” Limitation of Liability of Directors Under the Companies Act and our articles of incorporation we may exempt, by resolution of the board of directors, our directors from liabilities to us arising in connection with their failure to execute their duties in good faith and without gross negligence, within the limits stipulated by applicable laws and regulations.
He specialized in audit, mergers and acquisitions, and initial public offering at Price Waterhouse and Deloitte & Touche as a certified public accountant (U.S.) from September 1990 to September 2002, and was a Foreign Stock Trader at Nikko Securities Ltd. from July 1987 to August 1989.
He specialized in audit, mergers and acquisitions, and IPO at Price Waterhouse and Deloitte & Touche as a certified public accountant (U.S.) from September 1990 to September 2002, and was a Foreign Stock Trader at Nikko Securities Ltd. from July 1987 to August 1989.
The stock options granted under Plan No. 2 are exercisable only after (i) May 15, 2025, and (ii) the Company successfully completes its initial public offering. Some stock options originally awarded have been forfeited by the officers, directors, and employees who have departed from the Company.
The stock options granted under Plan No. 2 are exercisable only after (i) May 15, 2025, and (ii) the Company successfully completes its IPO. Some stock options originally awarded have been forfeited by the officers, directors, and employees who have departed from the Company.
Each award under the Plan is designated in a stock option agreement, which is a written agreement evidencing the grant of certain stock options executed by the Company and the grantee. Conditions of the Plan. The stock options under Plan No. 1 are not exercisable until the completion of the initial public offering of the Company.
Each award under the Plan is designated in a stock option agreement, which is a written agreement evidencing the grant of certain stock options executed by the Company and the grantee. Conditions of the Plan. The stock options under Plan No. 1 are not exercisable until the completion of the IPO of the Company.
The stock options under Plan No. 2 are not exercisable until (i) May 15, 2025, and (ii) the completion of the initial public offering of the Company. Terms of the Plan. The term of the Plan is stated in the stock option agreement between the Company and the grantee of such stock options. Transfer Restrictions.
The stock options under Plan No. 2 are not exercisable until (i) May 15, 2025, and (ii) the completion of the IPO of the Company. Terms of the Plan. The term of the Plan is stated in the stock option agreement between the Company and the grantee of such stock options. Transfer Restrictions.
We obtained directors and officers liability insurance upon the consummation of the initial public offering of the Company, which covers expenses, capped at a certain amount, that our directors and officers may incur in connection with their conduct as our directors or executive officers.
We obtained directors and officers liability insurance upon the consummation of the IPO of the Company, which covers expenses, capped at a certain amount, that our directors and officers may incur in connection with their conduct as our directors or executive officers.
Stock options granted under the Plan are not automatically convertible or exercisable in conjunction with the initial public offering of the Company.
Stock options granted under the Plan are not automatically convertible or exercisable in conjunction with the IPO of the Company.
Share Ownership The following table sets forth information with respect to the beneficial ownership, within the meaning of Rule 13d-3 under the Exchange Act, of our shares as of the date of this annual report, and as adjusted to reflect the sale of 1,750,000 ADSs representing the Common Shares being offered in the initial public offering of the Company for: ● each of our directors and executive officers; ● all directors and executive officers as a group; and ● each person known to us to own beneficially more than 5% each class of our voting Common Shares.
Share Ownership The following table sets forth information with respect to the beneficial ownership, within the meaning of Rule 13d-3 under the Exchange Act, of our shares as of the date of this annual report for: ● each of our directors and executive officers; ● all directors and executive officers as a group; and ● each person known to us to own beneficially more than 5% each class of our voting Common Shares.
On May 31, 2023, the Company awarded options to purchase an aggregate of 180,000 and 337,740 Common Shares at an exercise price of JPY250 and JPY183 per Common Share, respectively, to various officers, directors, and employees of the Company (the “Plan No. 2,” and Plan No. 1 and Plan No. 2 are collectively referred to as the “Plan”).
On May 31, 2023, the Company awarded options to purchase an aggregate of 6,000 and 11,258 Common Shares at an exercise price of JPY7,500 and JPY5,490 per Common Share, respectively, to various officers, directors, and employees of the Company (the “Plan No. 2,” and Plan No. 1 and Plan No. 2 are collectively referred to as the “Plan”).
Percentage of beneficial ownership of each listed person is based on 24,683,860 Common Shares outstanding as of the date of this annual report (reflecting a 60-for-1 forward split of our Common Shares approved by our board of directors on October 6, 2024) and any Common Shares deemed to be outstanding which are underlying any options, warrants, rights or other conversable securities held by such listed person.
Percentage of beneficial ownership of each listed person is based on 4,153,805 Common Shares outstanding as of the date of this annual report (reflecting (i) a 60-for-1 forward split of our Common Shares effective October 24, 2024, and (ii) a 1-for-30 reverse split of our Common Shares effective January 26, 2026) and any Common Shares deemed to be outstanding which are underlying any options, warrants, rights or other conversable securities held by such listed person.
As of the date of this annual report, 732,000 of Plan 1 stock options and 370,680 of Plan 2 stock options, totaling 1,102,680 stock options of Plan, are outstanding. The following paragraphs summarize the terms of the Plan. Eligibility. Our officers, directors, and employees are eligible to participate in the Plan. Designation of the Plan.
As of the date of this annual report, 24,400 of Plan 1 stock options and 12,356 of Plan 2 stock options, totaling 36,756 stock options of Plan, are outstanding. The following paragraphs summarize the terms of the Plan. Eligibility. Our officers, directors, and employees are eligible to participate in the Plan. Designation of the Plan.
The options are exercisable once after the Company successfully completes its initial public offering.
The options are exercisable once after the Company successfully completes its IPO.
The board of directors may appoint from among its members a chairperson and a president, or one or more vice-presidents, senior managing directors, and executive managing directors of the board. Our board of directors currently consists of three directors.
The board of directors may appoint from among its members a chairperson and a president, or one or more vice-presidents, senior managing directors, and executive managing directors of the board. Our board of directors currently consists of five directors. We have determined that Mr. Yoshinari Noguchi and Ms.
Name Age Position(s) Hiroshi Furukawa 55 CEO and Representative Director Hideaki Horikiri 65 CFO and Director Toshihito Kanai 64 CTO and Director Kosuke Nakanishi 47 Head of Corporate Affairs Mirei Kuroda 65 Audit and Supervisory Board Member Yoshinari Noguchi 53 Audit and Supervisory Board Member Mutsuko Oba 38 Audit and Supervisory Board Member 70 Mr.
Name Age Position(s) Hiroshi Furukawa 55 CEO and Representative Director Hideaki Horikiri 65 CFO, Director, and Member of the Audit and Supervisory Committee Toshihito Kanai 65 CTO and Director Kosuke Nakanishi 48 Head of Corporate Affairs Yoshinari Noguchi 54 Independent Director and Member of the Audit and Supervisory Committee Mutsuko Oba 39 Independent Director and Member of the Audit and Supervisory Committee 72 Mr.
He earned a Master and a Bachelor of Science in Engineering in 1985 and 1983, respectively, from Kyoto University . Mr. Mirei Kuroda has served as our Audit and Supervisory Board member since January 2025. From April 2023 to present, Mr.
He earned a Master and a Bachelor of Science in Engineering in 1985 and 1983, respectively, from Kyoto University . Mr. Yoshinari Noguchi has served as our director and member of our audit and supervisory committee since October 2025. Mr.
None of our directors or executive officers has a family relationship as defined in Item 401 of Regulation S-K. 71 B. Compensation In accordance with the Companies Act, compensation for our directors, including bonuses, retirement allowances, and incentive stock options, must be approved at our general meeting of shareholders, unless otherwise specified in our articles of incorporation in the future.
Compensation In accordance with the Companies Act, compensation for our directors, including bonuses, retirement allowances, and incentive stock options, must be approved at our general meeting of shareholders, unless otherwise specified in our articles of incorporation in the future.
Furukawa received Ph.D. in engineering from Kyushu University in 1998, and bachelor’s degree in engineering and information technology from Kyushu Institute of Technology in 1992. Mr. Hideaki Horikiri has served as our CFO and Director since November 2022. He manages our finance and corporate governance matters, as well as intellectual property matters. Prior to joining our Company, Mr.
Furukawa received Ph.D. in engineering from Kyushu University in 1998, and bachelor’s degree in engineering and information technology from Kyushu Institute of Technology in 1992. Mr. Hideaki Horikiri has served as our CFO and director since November 2022. He has also served as a member of our audit and supervisory committee since October 2025 .
Audit and Supervisory Board We currently have an audit and supervisory board consisting of three members, Hisayoshi Kumai, Yoshinari Noguchi, and Mutsuko Oba.
Audit and Supervisory Committee We currently have an audit and supervisory committee pursuant the Companies Act of Japan, consisting of three members, Mr. Hideaki Horikiri, Mr. Yoshinari Noguchi, and Ms. Mutsuko Oba.
She is also an outside director of JTOWER Inc., a telecom infrastructure service company in Japan, since June 2018, and TASUKI Corp, a real estate company, since December 2021. She used to work at KPMG AZSA LLC from April 2014 to June 2018.
Oba is a certified public accountant and an Audit and Supervisory Board member of M&A Capital Partners Co., Ltd. She is also an outside director of JTOWER Inc., a telecom infrastructure service company in Japan, since June 2018, and TASUKI Corp, a real estate company, since December 2021.
For the fiscal year ended September 30, 2024, we paid an aggregate of JPY 68,364 thousand (approximately $ 477 thousand) as compensation to our executive officers and directors.
For the fiscal year ended September 30, 2025, we paid an aggregate of JPY65,557 thousand (approximately $443 thousand) as compensation to our executive officers and directors. Issuance of Common Shares to Mr. Hideaki Horikiri On December 30, 2025, we issued 1,333,333 Common Shares (the “CFO Compensation Shares”) to Mr.
(7) 1,264,500 5.12 % Sojitz Corporation (8) 1,264,500 5.12 % Notes: (1) Unless otherwise indicated, the business address of each of the individuals is 2-34-5 Ningyocho, SANOS Building, Nihonbashi, Chuo-ku, Tokyo 103-0013 Japan. 74 (2) Number of Common Shares held by Kosuke Nakanishi represents 60,000 stock options granted by the Company, convertible to 60,000 Common Shares.
(1) Unless otherwise indicated, the business address of each of the individuals is 2-34-5 Ningyocho, SANOS Building, Nihonbashi, Chuo-ku, Tokyo 103-0013 Japan.
Mutsuko Oba has served as our Audit and Supervisory Board member since December 2021. Ms. Oba is a certified public accountant and an Audit and Supervisory Board member of M&A Capital Partners Co., Ltd.
Mutsuko Oba has served as our director and member of our audit and supervisory committee since October 2025. Ms.
As of the date of this annual report, none of our issued and outstanding Common Shares are held in the United States. None of the Company’s major shareholders have any different or special voting rights with respect to their Common Shares.
To our knowledge, the Company is not directly or indirectly owned or controlled by another corporation(s), by any foreign government, or by any other natural or legal person(s) severally or jointly. None of the Company’s major shareholders have any different or special voting rights with respect to their Common Shares.
Removed
Kuroda served as an Audit and Supervisory Board member at KINGSOFT JAPAN Inc. , a Japanese SaaS provider , from April 2022 to June 2023, an Audit and Supervisory Board member at Ubitus K.K., a Japanese cloud gaming software developer, from July 2021 to March 2022, ahead of management office at Kyash Inc., a fin-tech application provider, and a CFO at Internet Research Institute, Inc., a research and consultation service firm on cyber security and A.I., from October 2017 to June 2022.
Added
He manages our finance and corporate governance matters, as well as intellectual property matters. Prior to joining our Company, Mr.
Removed
Mr. Kuroda obtained his Master of B usiness Administration in June 1990 from Institut Européen d’Administration des Affaires (INSEAD ) and a Bachelor of Arts in Political Science from Waseda University in March 1983. Mr. Yoshinari Noguchi has served as our Audit and Supervisory Board member since December 2022. Mr.
Added
Noguchi served as our Audit and Supervisory Board member from December 2022 to September 2025, before we changed our corporate structure from a company with an audit and supervisory board to a company with an audit and supervisory committee pursuant to the Companies Act. Mr.
Removed
In addition, under Companies Act, the Company is required to establish audit and supervisory board to independently monitor directors’ activities and report to the shareholders. Our audit and supervisory board consists of three members: Mirei Kuroda, Yoshinari Noguchi, and Mutsuko Oba.
Added
Oba served as our Audit and Supervisory Board member from December 2021 to September 2025, before we changed our corporate structure from a company with an audit and supervisory board to a company with an audit and supervisory committee pursuant to the Companies Act. Ms.
Removed
The audit and supervisory board, in accordance with our Regulations of the Audit and Supervisory Board, (i) audits the execution by our directors of their duties and the preparation of audit reports and (ii) determines the details of proposals concerning the election, dismissal, or non-reappointment of the accounting auditor to be submitted to general meetings of shareholders by the board of directors.
Added
She used to work at KPMG AZSA LLC from April 2014 to June 2018. None of our directors or executive officers has a family relationship as defined in Item 401 of Regulation S-K. 73 B.
Removed
With respect to financial reporting, the audit and supervisory board has the statutory duty to examine financial statements and business reports to be submitted to the shareholders by a representative director and is authorized to report its opinion to the ordinary general meeting of shareholders. 73 D. Employees See “Item 4. Information on the Company—B. Business Overview—Employees.” E.
Added
Hideaki Horikiri, the chief financial officer and director of the Company, pursuant to that certain restricted common share compensation agreement (the “CFO Compensation Agreement”) between the Company and Mr. Horikiri, dated December 15, 2025. Pursuant to the CFO Compensation Agreement, the issuance of the CFO Compensation Shares was in consideration for Mr.
Removed
Common Shares Beneficially Owned Number Percent Directors and Executive Officers (1) Hiroshi Furukawa 3,543,960 14.36 % Toshihito Kanai — — Mirei Kuroda — — Yoshinari Noguchi — — Mutsuko Oba — — Hideaki Horikiri — — Kosuke Nakanishi (2) 60,000 0.24 % All directors and executive officers as a group (seven individuals) 3, 6 03,960 14.60 % 5% Shareholders: Kluk Jan Juliusz Zygmunt (3) 1,330,140 5.39 % EXEO Group (4) 1,727,820 7.00 % SHIMIZU CORPORATION (5) 1,696,440 6.87 % MCC Venture Capital Limited Liability Company (6) 1,264,500 5.12 % Japan Post Capital Co., Ltd.
Added
Horikiri’s services rendered and included a prohibition on any sale, transfer, loan or pledge of the CFO Compensation Shares for a period of 20 years from the date of grant. However, the prohibition may be canceled by a resolution of our board of directors.
Removed
(3) Representing 1,330,140 Common Shares held by Kluk Jan Juliusz Zygmunt, with business address at Warsaw 00-116, ul.Swietokrzyska 30m65., Poland, as of the date of this annual report. (4) Representing 1,727,820 Common Shares held by EXEO Group, a joint-stock corporation ( Kabushiki kaisha ) with limited liability incorporated in Japan, as of the date of this annual report.
Added
The execution of the CFO Compensation Agreement and the issuance of CFO Compensation Shares were authorized by our shareholder resolution and board of directors’ resolution dated September 30, 2025 and December 15, 2025, respectively. Giving the effect of the reverse stock split at the ratio of 1-for-30 on January 26, 2026, as of the date of this annual report, Mr.
Removed
Its business address is at 29-20, Shibuya 3-chome, Shibuya-ku, Tokyo, Japan. (5) Representing 1,696,440 Common Shares held by SHIMIZU CORPORATION (TYO: 1803; NAG: 1803), a joint-stock corporation ( Kabushiki kaisha ) with limited liability incorporated in Japan, as of the date of this annual report. Its business address is at 2-16-1 Kyobashi, Chuo-ku, Tokyo, Japan.
Added
Horikiri holds 1,333,333 Common Shares. See also “—E. Share Ownership.” Issuance of Common Shares to Mr. Hiroshi Furkuawa On December 29, 2025, we entered into a restricted common share compensation agreement (the “CEO Compensation Agreement”) with Mr. Hiroshi Furukawa, our chief executive officer and representative director.
Removed
(6) Common Shares beneficially owned prior to this offering represent 1,264,500 Common Shares held by MCC Venture Capital Limited Liability Company, as of the date of this annual report. MCC Venture Capital Limited Liability Company is a limited liability company ( godo kaisha ) and its business address is at 1-10-15 Jonouchi Chuo-ku, Osaka City, Osaka, Japan.
Added
Pursuant to the CEO Compensation Agreement, we agreed to issue 1,666,667 Common Shares (the “CEO Compensation Shares”) to Mr. Furukawa on January 20, 2026. The issuance of the CEO Compensation Shares was in consideration for Mr.
Removed
The beneficial owner of MCC Venture Capital Limited Liability Company is Jikei Co. Ltd and its business address is 1-10-15 Jonouchi Chuo-ku, Osaka City, Osaka, Japan. (7) Representing 1,264,500 Common Shares held by Japan Post Capital Co., Ltd. as of the date of this annual report.
Added
Furukawa’s services rendered and included a prohibition on any sale, transfer, loan or pledge of the CEO Compensation Shares for a period of 20 years from the date of grant. However, the prohibition may be canceled by a resolution of our board of directors. On January 20, 2026, we issued the CEO Compensation Shares to Mr.
Removed
Japan Post Capital Co., Ltd. is a joint-stock corporation (Kabushiki kaisha) with limited liability incorporated in Japan. Its business address is at Otemachi 2 chome 3-1, Chiyoda-ku, Tokyo, Japan. It is a wholly-owned subsidiary of Japan Post Holdings Co., Ltd. (TYO: 6178), whose beneficial owner is the Japanese Government.
Added
Furukawa pursuant to the CEO Compensation Agreement. The execution of the CEO Compensation Agreement and the issuance of the CEO Compensation Shares were authorized by our shareholders’ resolution and board of directors’ resolution, both dated December 29, 2025.
Removed
(8) Representing 1,264,500 Common Shares held by Sojitz Corporation (TYO: 2768), a joint-stock corporation ( Kabushiki kaisha ) with limited liability incorporated in Japan, as of the date of this annual report. Its business address is at 1-1, Uchisaiwaicho 2-chome, Chiyoda-ku, Tokyo, Japan.
Added
Giving the effect of the reverse stock split at the ratio of 1-for-30 on January 26, 2026, as of the date of this annual report, Mr. Furukawa holds 1,759,798 Common Shares. See also “—E.
Added
Mutsuko Oba satisfy the “independence” requirements of the Nasdaq listing rules and Rule 10A-3 under the Exchange Act. As a foreign private issuer, we follow Japanese law and corporate practices in lieu of Nasdaq Rule 5605(b)(1). See also “Item 16G.
Added
With respect to the requirements of Rule 10A-3 under the Exchange Act and Nasdaq Rule 5600 relating to audit committees, we chose to rely on exemptions under these rules that are available to foreign private issuers with an audit and supervisory committee meeting certain requirements.
Added
Directors who are audit and supervisory committee members are not required to be certified public accountants.
Added
Under the Companies Act, the majority of the members of the audit and supervisory committee must be outside directors as defined under the Companies Act, who have not served as executive directors, corporate executive officers, managers or any other type of employee for us or any of our subsidiaries for ten years prior to their election and fulfill certain other requirements specified in the Companies Act.
Added
We believe that Mutsuko Oba and Yoshinari Noguchi are outside directors, causing the audit and supervisory committee to meet the requirements under the Companies Act. The audit and supervisory committee oversees our accounting and financial reporting processes and the audits of our financial statements.
Added
An audit and supervisory committee member may note his or her opinion in the audit report issued by the audit and supervisory committee if such an opinion differs from that expressed in the audit report.
Added
The audit and supervisory committee is responsible for, among other things: ● supervising the administration of affairs by the directors and also examining the financial statements and business reports to be submitted to the general meeting of shareholders by a representative director and preparing an audit report; ● appointing the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors; ● reviewing with the independent auditors any audit problems or difficulties and management’s response; ● discussing the annual audited financial statements with management and the independent auditors; ● reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major financial risk exposures; ● reviewing and approving all proposed related party transactions; ● meeting separately and periodically with management and the independent auditors; ● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance; and ● determining the opinion on election, removal, resignation of, or compensation for directors who are not audit and supervisory committee members, which may be expressed at a general meeting of shareholders.
Added
In addition to our audit and supervisory committee, we must appoint accounting auditors (kaikei kansa-nin) from independent certified public accountants or an independent audit firm in Japan.
Added
The accounting auditors have the statutory duties of examining the financial statements to be submitted to the shareholders by a representative director at the general meetings of shareholders and reporting their opinion thereon to the relevant directors and the audit and supervisory committee.
Added
The accounting auditors also audit the financial statements to be included in the securities reports that, if required, will be filed with the relevant local finance bureau of the Ministry of Finance. We have appointed Nanatsu-boshi Audit Corporation as our accounting auditor. 75 D. Employees See “Item 4. Information on the Company—B. Business Overview—Employees.” E.
Added
Common Shares Beneficially Owned Number Percent Directors and Executive Officers (1) Hiroshi Furukawa (2) 1,765,798 42.45 % Hideaki Horikiri (3) 1,333,633 32.10 % Toshihito Kanai — * Yoshinari Noguchi — * Mutsuko Oba — * Kosuke Nakanishi (4) 2,750 * All directors and executive officers as a group (six individuals) 3,102,181 74.62 % 5% Shareholders: Hiroshi Furukawa (2) 1,765,798 42.45 % Hideaki Horikiri (3) 1,333,633 32.10 % * Represents less than 1% of ownership.
Added
(2) The number of Common Shares held by Hiroshi Furukawa represents (i) 1,759,798 Common Shares he holds as of the date of this annual report, and (ii) 6,000 stock options granted by the Company, convertible to 6,000 Common Shares (a) after the IPO, and (b) after May 15, 2025.
Added
(3) The number of Common Shares held by Hideaki Horikiri represents (i) 1,333,333 Common Shares he holds as the date of this annual report, and (ii) 300 stock options granted by the Company, convertible to 300 Common Shares (a) after the IPO, and (b) after May 15, 2025.
Added
(4) The number of Common Shares held by Kosuke Nakanishi represents (i) 750 stock options granted by the Company, convertible to 750 Common Shares (a) after the IPO, and (b) after May 15, 2025; and (ii) 2,000 stock options granted by the Company, convertible to 2,000 Common Shares after the IPO. 76 As of the date of this annual report, none of our issued and outstanding Common Shares are held in the United States.
Added
The number of individual holders of record is based exclusively upon our share register and does not address whether a share or shares may be held by the holder of record on behalf of more than one person or institution who may be deemed to be the beneficial owner of a share or shares in our company.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

12 edited+13 added−1 removed1 unchanged
During the fiscal year ended September 30, 2023 and 2022, KAGA ELECTRONICS CO., LTD., a holder of more than 5% of the Company’s outstanding share capital during the year and a multinational electronics wholesaler, purchased mesh Wi-Fi access points PCWL devices from the Company for a total amount of JPY35,952 thousand and JPY41,547 thousand, respectively.
During the fiscal year ended September 30, 2023, KAGA ELECTRONICS CO., LTD., a holder of more than 5% of the Company’s outstanding share capital during such fiscal year and a multinational electronics wholesaler, purchased mesh Wi-Fi access points PCWL devices from the Company for a total amount of JPY35,952 thousand.
The Company incurred guarantee fees of JPY132 thousand during the fiscal year ended September 30, 2024 and had prepaid expenses of JPY660 thousand and unpaid guarantee fees of JPY792 thousand as of September 30, 2024 to Hiroshi Furukawa, the Company’s CEO and Representative Director.
The Company incurred guarantee fees of JPY132 thousand during the fiscal year ended September 30, 2024 and had prepaid expenses of JPY660 thousand and unpaid guarantee fees of JPY792 thousand as of September 30, 2024 to Hiroshi Furukawa.
The Company’s sale was in the arm’s length transaction, and the sale price was based on the price lists distributed to other third-party distributors. The account receivable balance from SHIMIZU CORPORATION as of September 30, 2024, 2023, and 2022 was nil, JPY165 thousand, and nil, respectively.
The Company’s sale was in the arm’s length transaction, and the sale price was based on the price lists distributed to other third-party distributors. The account receivable balance from SHIMIZU CORPORATION as of September 30, 2025 and 2024 was nil and nil, respectively.
The Company’s sale was in the arm’s length transaction, and the sale price was based on the price lists distributed to other third-party distributors. The account receivable balance from EXEO Group as of September 30, 2024 and 2023 was JPY1,394 thousand (approximately $9 thousand) and JPY48,044 thousand, respectively.
The Company’s sale was in the arm’s length transaction, and the sale price was based on the price lists distributed to other third-party distributors. The account receivable balance from Nikken as of September 30, 2025 was JPY1,077 thousand (approximately $7 thousand). The contract liabilities balance to Nikken as of September 30, 2025 was JPY136 thousand (approximately $1 thousand).
The Company also paid him the past unpaid guarantee fees and accrued interest of JPY8,513 thousand arising from the past personal loans and guarantee transactions from 2012 through 2019.
The Company also paid him the past unpaid guarantee fees and accrued interest of JPY8,513 thousand arising from the past personal loans and guarantee transactions from 2012 through 2019. As of September 30, 2025 and 2024, MCC held more than 5% of the Company’s outstanding share capital.
Related Party Transactions During the fiscal years ended September 30, 2024 and 2023, EXEO Group, a holder of more than 5% of the Company’s outstanding share capital and a multinational radio and telecommunication device distributor, purchased mesh Wi-Fi access points PCWL devices from the Company for a total amount of JPY78,142 thousand (approximately $545 thousand) and JPY60,011 thousand, respectively.
EXEO Group purchased mesh Wi-Fi access points PCWL devices from the Company for a total amount of JPY105,607 thousand (approximately $714 thousand), JPY78,142 thousand, and JPY60,011 thousand during the fiscal years ended September 30, 2025, 2024 and 2023, respectively.
During the fiscal year ended September 30, 2024, MCC Venture Capital Limited Liability Company, a holder of more than 5% of the Company’s outstanding share capital during such fiscal year, entered into a convertible bond agreement with the Company in the amount of JPY199,998 thousand.
MCC entered into a convertible bond agreement with the Company during the fiscal year ended September 30, 2024, in the amount of JPY199,998 thousand (approximately $1,352 thousand). As of September 30, 2024, the Company had a bond payable of JPY199,998 thousand.
During the fiscal years ended September 30, 2024, 2023, and 2022, Sojitz Corporation, a holder of more than 5% of the Company’s outstanding share capital and a multinational trading company, purchased mesh Wi-Fi access points PCWL devices from the Company for a total amount of nil, nil, and JPY28 thousand, respectively.
SHIMIZU CORPORATION purchased mesh Wi-Fi access points PCWL devices from the Company for a total amount of JPY219 thousand (approximately $1 thousand), JPY1,856 thousand, and JPY189 thousand during the fiscal years ended September 30, 2025, 2024 and 2023, respectively.
Item 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS A. Major Shareholders See “Item 6. Directors, Senior Management and Employees—E. Share Ownership.” B.
Item 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS A. Major Shareholders See “Item 6. Directors, Senior Management and Employees—E. Share Ownership.” B. Related Party Transactions Share Issuance to Related Parties For information on private placements with Nikken and MCC, see “Private Placement with Nikken”, “Private Placement with MCC and You Planning”, in “Item 4. Information on the Company –A.
The Company’s sale was in the arm’s length transaction, and the sale price was based on the price lists distributed to other third-party distributors. The Company had no account receivable balance from Sojitz Corporation as of September 30, 2024, 2023, and 2022.
The Company also provided SaaS and maintenance related service for a total amount of JPY13,720 thousand (approximately $93 thousand), nil, and nil during the fiscal years ended September 30, 2025, 2024 and 2023, respectively. The Company’s sale was in the arm’s length transaction, and the sale price was based on the price lists distributed to other third-party distributors.
The contract liabilities balance to EXEO Group as of September 30, 2024 and 2023 was JPY13,822 thousand (approximately $96 thousand) and JPY10,929 thousand, respectively. 75 During the fiscal years ended September 30, 2024, 2023, and 2022, SHIMIZU CORPORATION, a holder of more than 5% of the Company’s outstanding share capital and a multinational construction company, purchased mesh Wi-Fi access points PCWL devices from the Company for a total amount of JPY1,856 thousand (approximately $13 thousand), JPY189 thousand, and JPY21,735 thousand, respectively.
The accounts receivable balance from EXEO Group as of December 31, 2025 was JPY38,057 thousand (approximately $257 thousand). As of September 30, 2025, 2024, and 2023 or at some point during the fiscal years then ended, SHIMIZU CORPORATION, a multinational construction company, held more than 5% of the Company’s outstanding share capital.
The Company’s sale was in the arm’s length transaction, and the sale price was based on the price lists distributed to other third-party distributors. The account receivable balance from KAGA ELECTRONICS CO., LTD. as of September 30, 2023 and 2022 was JPY7,863 thousand and JPY7,379 thousand, respectively.
The Company’s sale was in the arm’s length transaction, and the sale price was based on the price lists distributed to other third-party distributors. 77 The Company incurred guarantee fees of JPY660 thousand (approximately $4,460) to Hiroshi Furukawa, the Company’s CEO and representative director, during the fiscal year ended September 30, 2025.
Removed
As of September 30, 2024, the Company has a bond payable of JPY199,998 thousand and accrued interest expenses of JPY19,178 thousand to MCC Venture Capital Limited Liability Company. C. Interests of Experts and Counsel Not applicable.
Added
History and Development of the Company—Corporate History.” For information on issuance of Common Shares to Hideaki Horikiri, our CFO and director, see “Item 6. Directors, Senior Management and Employees—B. Compensation—Issuance of Common Shares to Mr. Hideaki Horikiri.” For information on issuance of Common Shares to Mr. Hiroshi Furukawa, our CEO and representative director, see “Item 6.
Added
Directors, Senior Management and Employees—B. Compensation—Issuance of Common Shares to Mr. Hiroshi Furukawa.” Management Compensation For the details of ethe compensation of directors and executive officers, see “Item 6. Directors, Senior Management and Employees—B.
Added
Compensation.” Material Transactions with Related Parties As of September 30, 2025, 2024, and 2023 or at some point during the fiscal years then ended, EXEO Group, a multinational radio and telecommunication device distributor, held more than 5% of the Company’s outstanding share capital.
Added
The account receivable balance from EXEO Group as of September 30, 2025 and 2024 was JPY31,146 thousand (approximately $210 thousand) and JPY1,394 thousand, respectively. The contract liabilities balance to EXEO Group as of September 30, 2025 and 2024 was JPY15,947 thousand (approximately $108 thousand) and JPY13,822 thousand, respectively.
Added
During the three months ended December 31, 2025, EXEO Group purchased mesh Wi-Fi access points PCWL devices from the Company for a total amount of JPY42,513 thousand (approximately $287 thousand). The Company also provided SaaS and maintenance related services for a total amount of JPY3,147 thousand.
Added
During the three months ended December 31, 2025, SHIMIZU CORPORATION purchased mesh Wi-Fi access points PCWL devices from the Company for a total amount of JPY253 thousand (approximately $2 thousand). The account receivable balance from SHIMIZU CORPORATION as of December 31, 2025 was nil.
Added
As of September 30, 2025, 2024, and 2023 or at some point during the fiscal years then ended, Sojitz Corporation, a multinational trading company, held more than 5% of the Company’s outstanding share capital. The Company had advance payments of JPY39,325 thousand (approximately $266 thousand) as of September 30, 2025.
Added
During the fiscal years ended September 30, 2025 and 2024, the Company had interest expenses of JPY9,370 thousand (approximately $63 thousand) and JPY19,178 thousand to MCC, respectively. As of September 30, 2025, Nikken, a multinational leasing company, held more than 5% of the Company’s outstanding share capital.
Added
Nikken purchased mesh Wi-Fi access points PCWL devices from the Company for a total amount of JPY83,348 thousand (approximately $563 thousand) during the fiscal year ended September 30, 2025. The Company also provided SaaS and maintenance related service for a total amount of JPY6,337 thousand (approximately $43 thousand) during the fiscal year ended September 30, 2025.
Added
During the three months ended December 31, 2025, Nikken purchased mesh Wi-Fi access points PCWL devices from the company for a total amount of JPY1,844 thousand (approximately $12 thousand). The Company also provided SaaS and maintenance related service for a total amount of JPY2,008 thousand.
Added
The account receivable balance from Nikken as of December 31, 2025 was JPY2,611 thousand (approximately $18 thousand). At September 30, 2025, Citibank N.A., a multinational bank, held more than 5% of the Company’s outstanding share capital on behalf of the Company’s ADS holders.
Added
Offering related expenses and securities registration maintenance fee of JPY71,730 thousand (approximately $485 thousand) incurred to Citibank N.A. during the fiscal year ended September 30, 2025. The accrued expenses balance to Citibank N.A. as of September 30, 2025 was JPY24,474 thousand (approximately $165 thousand).
Added
During the three months ended December 31, 2025, the Company incurred securities registration maintenance fee of JPY9,717 thousand (approximately $66 thousand) to Citibank N.A. The accrued expenses balance to Citibank N.A. as of December 31, 2025 was JPY34,191 thousand (approximately $231 thousand). C. Interests of Experts and Counsel Not applicable.