F-1/A: rYojbaba Co., Ltd. Files Amendment No. 1 to Form F-1 for Initial Public Offering

rYojbaba Co., Ltd. is proceeding with its IPO, offering 1,250,000 common shares with an expected price between $4.00 and $5.00 per share.

Summary

• rYojbaba Co., Ltd., a Japanese company, has filed Amendment No. 1 to its Form F-1 registration statement for an initial public offering.
• The company plans to offer 1,250,000 common shares to the public.
• The anticipated initial public offering price is expected to be between $4.00 and $5.00 per share.
• The company is also registering warrants to purchase 87,500 common shares for the underwriters and the shares issuable upon exercise of those warrants.
• rYojbaba intends to list its common shares on the NYSE American or the Nasdaq under the symbol RYOJ.
• Ryoji Baba, the CEO, currently controls approximately 80.2% of the voting power and will control approximately 71.3% after the offering.
• The company operates two primary businesses in Japan: consulting services and health services through osteopathic clinics and beauty salons.
• In 2023, the company generated revenues of $10,963,365 and a net income of $770,571.
• The company is an emerging growth company and a foreign private issuer, allowing it to take advantage of reduced reporting requirements.

Sentiment

Score: 7

Explanation: The document presents a generally positive outlook, highlighting revenue growth and improved profitability, but also acknowledges risks and challenges associated with the business and the IPO process.

Positives

• The company achieved a net income of $770,571 in 2023, a significant improvement from the net loss in 2022.
• The company has a high repeat customer rate of over 80% in its osteopathic clinics.
• The company is expanding its consulting business and health services.
• The company's CEO has extensive knowledge and experience in labor laws, providing a competitive advantage.
• The company is developing new consulting services, such as whistleblower systems and stress checks.

Negatives

• The company is controlled by its CEO, which may limit minority shareholder influence.
• The company is exposed to fluctuations in foreign currency exchange rates.
• The company operates in a competitive industry.
• The company is dependent on its senior management team.
• The company may be classified as a PFIC, which could result in material adverse U.S. federal income tax consequences if you are a U.S. holder.

Risks

• The company may need to raise additional capital in the future, which could dilute current shareholders' ownership.
• The company's success depends on maintaining its brand value.
• The company is subject to regulatory requirements in the healthcare industry.
• The company's level of indebtedness could materially and adversely affect its business.
• The price of the common shares could be subject to rapid and substantial volatility.
• The company may face restrictions on foreign investment related to Foreign Exchange and Foreign Trade Act in Japan.

Future Outlook

The company intends to use the net proceeds from this offering for working capital and general corporate purposes, which may include implementation and development of an information technology (IT) platform for our labor consulting services, hiring of additional consultants and an expansion abroad of consulting business as well as an expansion of our osteopathic clinics and osteopathic beauty salons through mergers and acquisitions and franchising.

Management Comments

• Our primary mission is to improve and restore physical and mental health diminished by work related stress through our consulting and health services.
• We believe that work-induced stress is a serious and growing problem as profits over people dominate all sectors of contemporary business culture.

Industry Context

The document provides context on the labor and osteopathic industries in Japan, highlighting the challenges faced by labor unions and the increasing competition in the osteopathic clinic market.

Comparison to Industry Standards

• The document mentions that the number of osteopathic clinics in Japan has almost doubled in the last 20 years, exceeding 50,000 in 2023.
• The document cites a 2022 survey by the Yano Economic Research Institute, estimating a 5.3% year-over-year increase in the judo therapy, acupuncture, moxibustion and massage market to 968 billion yen in 2021.
• The document compares the company's annual average number of visits per customer to industry averages.
• The document compares the company's monthly customer count per osteopathic beauty salon to national averages.
• The document compares the company's average monthly insurance claims per clinic to other companies in the Kyushu area.

Related Party Transactions

• The company acquired contracts with 10 customers for HR consulting services from Global HR Technology Co., Ltd., of which the CEO/director was a minority shareholder at the time of the acquisition.
• The company recorded commission expenses from Global HR Technology, of which the CEO/director is a shareholder.
• The company paid rent to Runbridge Inc., of which the CEO/director is a shareholder.

Stakeholder Impact

• Shareholders may experience dilution due to the issuance of new shares.
• Shareholders may benefit from the company's growth and improved profitability.
• Employees may benefit from the company's efforts to improve the working environment.
• Customers may benefit from the company's expanded services and improved quality of care.

Next Steps

• The company intends to apply to list its common shares on the NYSE American or the Nasdaq.
• The company will determine the final offering price based on market conditions.
• The company will use the net proceeds from the offering for various corporate purposes.

Key Dates

Keywords

IPO, initial public offering, common shares, RYOJBABA, osteopathic clinics, consulting services, health services, Japan, emerging growth company, foreign private issuer, NYSE American, Nasdaq