SCHEDULE: MEDIROM CEO Eguchi Updates Stake, Adds COZY LLC as Joint Filer

MEDIROM Healthcare Technologies Inc. CEO Kouji Eguchi has updated his beneficial ownership to 25.77% and added his wholly-owned entity, COZY LLC, as a joint filer in an amended Schedule 13D.

Summary

• Kouji Eguchi, CEO of MEDIROM Healthcare Technologies Inc., and COZY LLC, his wholly-owned entity, filed an Amendment No. 1 to their Schedule 13D.
• The amendment updates Mr. Eguchi's beneficial ownership to 2,075,003 Common Shares, representing 25.77% of the outstanding shares.
• COZY LLC is now a joint filer, beneficially owning 47,543 Common Shares, or 0.60% of the outstanding shares.
• The update reflects the Issuer's issuance of additional American Depositary Shares (ADSs) on December 11, 2024, and COZY's prior acquisition of Common Shares and ADSs.
• Mr. Eguchi holds 150,000 stock options exercisable until September 30, 2026, with an exercise price of JPY 2,000.
• He also holds 36,500 stock options exercisable from July 18, 2026, to July 17, 2030, with an exercise price of US$1.74, contingent on the company achieving JPY 10 billion in adjusted consolidated revenues in any fiscal year from 2026 to 2028.
• COZY LLC acquired 22,543 ADSs and 25,000 Common Shares since January 25, 2023, using cash on hand.
• Mr. Eguchi transferred 7,500 Common Shares to an individual in June 2025.

Sentiment

Score: 6

Explanation: The filing provides increased transparency regarding the CEO's beneficial ownership and performance-based incentives, which is positive. However, the late filing due to administrative oversight is a minor negative. The overall content is largely procedural and expected for an insider ownership update.

Positives

• Increased transparency regarding beneficial ownership structure with the addition of COZY LLC as a joint filer.
• Management (CEO Kouji Eguchi) has significant equity alignment with shareholders, holding over 25% of outstanding shares.
• The 11th Series Stock Options for Mr. Eguchi are performance-based, tied to achieving JPY 10 billion in adjusted consolidated revenues, aligning management incentives with company growth.

Negatives

• The filing of this Amendment No. 1 was late due to administrative oversight by the Reporting Persons.
• Mr. Eguchi transferred 7,500 Common Shares to an individual in June 2025, which slightly reduces his direct holdings.

Risks

• The exercise of 11th Series Stock Options is contingent on achieving specific revenue targets (JPY 10 billion adjusted consolidated revenues by fiscal year 2028), introducing performance risk for the options' value.
• Future acquisitions or dispositions of shares by Reporting Persons are subject to various factors, including market conditions and the Issuer's performance, which could introduce volatility.

Future Outlook

Reporting Persons currently have no present plans or proposals for major corporate transactions (e.g., mergers, liquidations, changes in management, or capital structure). However, they reserve the right to formulate such plans in the future and may acquire or sell additional Common Shares or ADSs based on market conditions, the Issuer's business performance, and other investment opportunities.

Management Comments

• "The Reporting Persons do not have any present plans or proposals that relate to or would result in any of the transactions described in subparagraphs (a) through (j) of Item 4 of Schedule 13D."
• "However, the Reporting Persons reserve the right to formulate in the future plans or proposals which may relate to or result in the transactions described in subparagraphs (a) through (j) of Item 4 of Schedule 13D."
• "Any actions the Reporting Persons might undertake will be dependent upon each Reporting Person's review of numerous factors, including, among other things, the price levels of the ADSs, general market and economic conditions, ongoing evaluation of the Issuer's business, financial condition, operations and prospects, the relative attractiveness of alternative business and investment opportunities, investor's need for liquidity, and other future developments."

Industry Context

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Corporate Governance

Related Party Transactions

• Kouji Eguchi is the CEO of MEDIROM Healthcare Technologies Inc. and wholly owns COZY LLC, which is a joint filer and holds shares in the Issuer.
• Stock options were granted to Kouji Eguchi by the Issuer.

Stakeholder Impact

• Shareholders: Increased transparency regarding the CEO's significant beneficial ownership and performance-based incentives. The late filing due to administrative oversight is a minor concern.
• Management/Employees: The CEO's stock options are tied to company performance, aligning interests.

Next Steps

• Kouji Eguchi may exercise his 8th Series Stock Options by September 30, 2026.
• Kouji Eguchi may exercise his 11th Series Stock Options from July 18, 2026, to July 17, 2030, provided the company meets the JPY 10 billion adjusted consolidated revenue target.
• Reporting Persons may acquire or sell additional shares in the future based on market conditions and company performance.

Key Dates

Recommendation

The filing is primarily an administrative update to beneficial ownership and details existing stock option agreements for the CEO. While the CEO's significant stake and performance-based options are positive for long-term alignment, there are no new material financial or strategic developments that would warrant a change in investment thesis. The administrative oversight leading to a late filing is a minor concern but does not fundamentally alter the company's outlook. Investors should continue to monitor the company's operational performance and progress towards the revenue targets tied to the CEO's 11th Series Stock Options.

Keywords

MEDIROM Healthcare Technologies, Kouji Eguchi, COZY LLC, Schedule 13D, Beneficial Ownership, Stock Options, Corporate Governance, CEO Stake, Equity Incentive Plan, Healthcare Technology