Ladies and gentlemen, thank you very much for taking the time out of your busy schedules to attend Leifras's Full Year Financial Results Briefing for the fiscal year ending December 31st, 2025. During today's call, all participants will be in a listen-only mode. This conference is being recorded today, Tuesday, April 14th, 2026. Before we begin, please review the disclaimer. I would like to remind you that some information discussed on this call will contain forward-looking statements, which involve risks and uncertainties that may cause actual results to differ materially. Further information regarding these and other risks, uncertainties or factors is included in the company's filings with the U.S. Securities and Exchange Commission. Today, the company's Representative Director and CEO, Mr. Kiyotaka Ito, and Director and CFO, Ms. Rei Yamamoto, will present Leifras financial results for the fiscal year ending December 31st, 2025, and the company's future growth strategy. After the presentation, we will address questions submitted in advance, so we would appreciate it if you could stay with us until the end. Now, Mr. Ito, I'll hand the call over to you. Hello, everyone. I am Kiyotaka Ito, the CEO. Thank you very much for taking the time out of your busy schedules to join us today. I would like to express my sincere gratitude for your continued warm support and consideration for our business activities and growth. Now, I will explain things in order, following the index in the materials you have in front of you. Our corporate philosophy is to change and design sports, and we practice sports and social business to address various social issues through sports. Since our founding in 2001, we have strived to transform Japan's traditional physical education into true sports and have continued to grow over the past 25 years. As a result, we have established a solid position as number one in Japan in terms of number of sports school members and number of school club activity contracts. Thanks to the steady growth of both businesses, in 2025, we recorded our best performance. Next, regarding our business model, our business is broadly divided into two segments. Our sports school business accounts for over 70% of our sales. Rather than simply teaching sports techniques, we offer a unique program that cultivates non-cognitive skills such as leadership and teamwork, which are highly valued in modern education. Furthermore, through our proprietary system, Milabo, developed in collaboration with sports psychology experts, we have established a mechanism to visualize the growth of these non-cognitive skills, which were previously only intuitive. This has received extremely high praise from parents. Thanks to this, we have been ranked number one in Japan for both the number of members and the number of schools for four consecutive years. Next, on the right side of the slide is our social business, which accounts for approximately 30% of our sales. This business has expanded strongly as a new growth driver for our company, with its sales contribution increasing by 3 percentage points since fiscal year 2023, two years ago. In this area as well, we have achieved the number one position in Japan for the number of schools contracted to provide club activities for two consecutive years. Next, here is the executive summary. In terms of earnings highlights, strong growth in both segments resulted in record highs across all key metrics. Net revenue increased by 13.5% year-on-year to $74.8 million, and income from operations increased by 20.7% to $4 million. Adjusted income from operations, which indicates the fundamental earning power of the core business, excluding one-time IPO-related costs, increased significantly by 41.8% year-on-year to $4.4 million. Here is a supplementary explanation of the financial highlights on page seven. The three indicators, net income, number of school members, and number of commissioned club activities, only showed slight increases or decreases. In short, these are the results of a strategic selection and focus aimed at future growth. First, regarding the slight increase in net income, this is mainly due to one-time expenses for growth investments and an increase in tax expenses. Specifically, this includes recording fees for syndicated loans in preparation for M&A, et cetera, as non-operating expenses. Additionally, the tax benefits from leasing expenses that were present in the previous year have decreased, and the effective tax rate has returned to normal levels, resulting in an increase in corporate taxes. However, above all, the profitability of our core business is growing steadily. Secondly, regarding the slight increase in the number of school members, the primary reason is the concentration of resources on large-scale club activity projects. We quickly took over a stalled project in Nagoya City and also secured new large-scale projects in Suita City and Shibuya Ward. Because we concentrated our personnel on these as top priorities, the opening of new sports schools was temporarily suppressed. However, as a result of the success of these projects, we have established an advantage in the club activity sector. Finally, the third point concerns the slight decrease in the number of commissioned club activities from fiscal year 2023-fiscal year 2024. This is primarily due to our commitment to compliance in order to play a central role in national policy. With the aim of establishing a solid track record and building relationships with local governments nationwide for future business expansion, we have accepted important projects from the Japan Sports Agency. However, to prevent conflicts of interest, we have decided to forgo contracts with some local governments. Furthermore, regarding the eight wards in Nagoya City that were previously handed over to other companies, we immediately took over six of them following the bankruptcy of the previous operators. As a result, the actual decrease in wards is limited to only two, and we maintain a strong foundation. Overall, these temporary plateaus in top-line metrics are not a sign of slowing growth, but rather a positive step towards capturing a larger market. Here are some highlights from our social business school club activities program that demonstrate how the strategic selection and focus I mentioned earlier is leading to tangible results. Please look at the left side of the slide. This national policy, which is the biggest tailwind for our company, will finally enter the reform implementation period starting this year in fiscal year 2026, marking a historic turning point that will lead to rapid market growth. The new contract received in fiscal year 2025, on the right side, is proof that our company is surely riding this massive wave. As you can see, we have seen a steady increase in new contracts from local governments and other organizations in fiscal year 2025. We have secured contracts all over Japan, from Hokkaido to Fukuoka Prefecture. Notably, we have received requests not only from major metropolitan areas such as Shibuya Ward, Shinagawa Ward, Nagoya City, and Kyoto City, but also from prestigious private schools such as Waseda University Senior High School. This is nothing less than proof of the scalability of our operational scheme. From fiscal year 2026 onward, we will fully leverage the tailwinds of this powerful national policy to accelerate further business growth as the undisputed top runner. Next, I'll hand it over to our CFO, Ms. Yamamoto, who will provide a detailed explanation of the specific financial figures. Thank you, Mr. Ito. I am Rei Yamamoto, CFO. I will now report on our results, focusing on our record-breaking performance and the underlying quality of our evolving earnings structure. I will go over our P&L highlights. As Mr. Ito mentioned earlier, we achieved record highs across all metrics this term from net revenue to every level of profit. I would like to add some further context regarding our enhanced profitability. While revenue achieved double-digit growth of 13.5% to $74.8 million, please note that gross profit rose by 17.6% and income from operations increased by 20.7% to $4.0 million. The fact that our profit growth exceeded our revenue growth is clear evidence of positive operating leverage as the operational efficiency of our personnel and facilities has improved and economies of scale are firmly taking effect. Regarding net income, we secured a record high of $2.8 million. This result was achieved even after accounting for financing costs for future M&A and the normalization of our effective tax rate, which followed a decrease in the tax benefits from our listing preparations. The reason net income growth appears more moderate compared to operating profit is purely due to these strategic investments and technical tax factors. Nonetheless, the fundamental earning power of our core business remains exceptionally strong. I would like to direct your primary attention to adjusted income from operations, which our management team considers the most critical indicator of our core profitability. For the current period, we have excluded non-recurring IPO-related expenses that were expensed on the income statement, as distinguished from those capitalized directly against equity under U.S. GAAP. On this basis, profits reached $4.4 million, marking a significant 41.8% increase year-on-year. As shown in this waterfall chart, we have clearly entered a phase where revenue growth is reliably and efficiently converted into profits at a high multiplier. Moving into fiscal year 2026 and beyond, we remain committed to maintaining this high conversion efficiency while driving further expansion of our profit margins. Turning to slide 12 for our segment-based summary. Both our foundational school business and our growth-driving social business achieved record-high revenues, increasing by 7.8% and 32.8% respectively, demonstrating ideal hybrid growth across our portfolio. While this slide primarily highlights our top-line results, more comprehensive financial data, including profit trends for each segment, is detailed in the segment information notes of our annual report. I highly encourage you to review the report to see how our social business is evolving into a robust revenue base and to gain a deeper understanding of the specific improvement processes driving our long-term profitability. I will now explain again our growth strategy that will shape our company's future. The first strategy is to expand our foundational sports school business. The reasons for the slight increase in membership in 2024-2025 are as explained earlier. Our medium-term strategy involves strengthening the quality of our services to ensure continued customer loyalty, efficiently acquiring customers through inside sales and digital marketing, and developing untapped areas through collaborations with universities and vocational schools, as well as M&A to build an even stronger revenue base. Next, the second growth strategy is to expand our market share in club activities, which is our growth driver. First, I would like to share about the potential of the school club activity business. The TAM of the market we are targeting is estimated to be around 9,800 schools nationwide, amounting to approximately $3.19 billion. On the other hand, our company, which is already the industry leader, currently has sales of only about $20,000. In other words, we recognize that there is still an opportunity for growth. This year, starting in fiscal year 2026, the national reform implementation period will begin, and a policy has been put forward to transfer all holiday club activities to local communities and private companies. At this historic time, when such a huge market is being opened up all at once by national policy, our greatest strength lies in our ability to leverage our first-mover advantage and lead the development of this market. This document outlines the national policy roadmap, showing just how quickly this massive market will open up. The Japanese government has announced a plan to transfer 30% of weekend club activities, or over 38,000 clubs, to local communities and private organizations by fiscal year 2026. As you can see, this represents a sharp upward trend compared to last year's results, marking a turning point where the privatization of school club activities will accelerate rapidly. We see this significant market change brought about by national policy as a definite growth opportunity and will capitalize on the resulting demand. Now, let me explain the five strong barriers to entry that will allow our company to gain a dominant market share in this rapidly expanding market. The first advantage is our number one contract record in Japan. We currently manage 381 schools and 2,120 school clubs, and our repeat customer rate from local governments is 89%. This high retention rate will generate stable revenue for the future. The second key strength is our network with the government. We have strong ties to the heart of national sports policy, including contracts with the Japan Sports Agency and being an official partner of the Japan Sport Association. Our position, which allows us to be involved from the rule-making stage, is something that new entrants can never replicate. The third is our network with local governments nationwide. We have directly collaborated with 33 prefectures and 13 wards of Tokyo. Because we already possess the know-how to solve the unique challenges of each region, we are selected by local governments with a very high success rate. The fourth is a large-scale instructor platform. We currently operate in 45 prefectures and have 1,055 full-time employees and 3,544 part-time employees. The ability to secure such a large pool of talent nationwide and manage it with high quality is our greatest competitive advantage. The fifth point is our safety management system, which has resulted in zero accidents and injuries. Through our unique training and thorough patrols, we have had zero serious accidents or injuries since taking over the contract in 2013. For local governments entrusted with the lives of children, this accident-free record is an invaluable source of absolute trust. These five strengths combined create a robust business foundation barrier to entry that is difficult for other companies to imitate. Among these barriers to entry, the most noteworthy is the network with the government. Our company maintains strong ties with key institutions representing Japan's sports industry and private education, including membership in the Japan Sports Policy Promotion Organization and serving as an official partner of the Japan Sport Association. From a business perspective, this means that we are not merely a private company passively waiting for projects, but rather a partner in jointly promoting national policy, enabling us to be involved in the market from the very initial stages. It is this high level of trust and position that allows local governments across Japan to confidently choose us, ultimately leading to our dominant market share. From here on, we'll discuss our human resource strategy, which underpins the quality of our services. AI is evolving at an astonishing pace, and in routine tasks, it can now perform work many times faster than humans. However, I have absolute confidence that our work is something that AI can never replace. It is about nurturing non-cognitive skills in children through sports. This is not something that can be taught through studying like knowledge. It is a skill that can only be acquired in a group of people with real-life instructors. This includes not only coaching in club activities, but also offering warm words of encouragement to children with developmental differences, looking each child in the eye, and truly supporting them. These are tasks that AI cannot do, and that only professional humans can do. That is why in the age of AI, the value we create will not decrease, but rather become premium. Our company has clearly defined that we will focus on work that only humans can do. To that end, we thoroughly entrust behind the scenes recruitment screening and massive administrative tasks to AI and systems, and we invest all the resources freed up there into on-site instructors who can do what only humans can do. Our instructors are 100% focused on the time, energy, and emotional care they dedicate to each child. This perfect division of labor between technology and human expertise is our hybrid strategy that generates high customer satisfaction. I will now walk through the five human capital strategies that I mentioned earlier, which are designed to maximize the value of people and support the rapid expansion of the business. The first is a scalable labor infrastructure. Our management system, which handles approximately 1,000 hiring and termination cases per month without delay, allows us to respond to sudden increases in cases without slowing down. The second is our operational system that absolutely never leaves a gap. We utilize our nationwide network of experienced instructors to immediately dispatch a replacement in the event of a sudden absence. This robust implementation system is the source of the high retention rate among local governments. The third key feature is our highly efficient and high-utilization organizational structure. Our dominant strategy of sharing personnel within a given area allows us to simultaneously reduce travel costs and maximize utilization rates. The fourth is the evolution into a talent supply infrastructure. By developing its own talent bank system and securing professional personnel such as active teachers through a side job, part-time work system, it has become an infrastructure that supports local club activities. The fifth point is a strong recruitment pipeline. On April 1st, we signed a comprehensive partnership agreement with Sanko Gakuen, which operates more than 60 vocational schools, universities, and junior colleges in 12 cities nationwide, with the aim of building a scheme to continuously produce sports business personnel. Moving forward, we will continue to promote comprehensive partnerships with universities and vocational schools to establish a robust recruitment pipeline that can secure motivated and highly qualified personnel on a stable and large scale. This unique instructor platform in Japan will be our strongest asset in achieving this continuous growth. Next, we will discuss phase-by-phase strategies for expanding our market share in the club activities business. Having completed phase I of the pilot project, we are now focusing on scaling to government-designated cities in phase II, where the balance between population density and market size is optimal. In particular, we are targeting approximately 2,000 schools in Tokyo's 23 wards and government-designated cities nationwide, using a dominant strategy to maximize recruitment and operational efficiency. In the future, in phase III, we aim to introduce a remote and mobile management model that can be implemented even in areas with low population density and expanded to approximately 9,800 schools nationwide, thereby making sports an infrastructure in Japan. The third growth strategy is improving operating profit margins. To put it simply, we have completed the strategic growth investment phase aimed at gaining future market share and will now move into the full-fledged margin expansion phase. In our school business, we will increase unit prices such as membership fees and reduce costs by utilizing school facilities. In our club activities business, we will improve profit margins by converting pilot projects into full contracts and further reduce project-level costs through economies of scale. At the same time, we will suppress fixed costs in the administrative department through digital transformation and establish a more efficient revenue structure in which sales growth is directly linked to the steady expansion of income from operations. Moving forward, I will provide a detailed overview of our robust financial resilience and our strategic framework for capital allocation. Let's begin with the highlights of our consolidated balance sheet, where our financial position has significantly strengthened over the past year. Driven by the steady accumulation of net income, our total net assets expanded to $11.8 million, representing a robust 77.4% increase year-on-year. At the same time, we have successfully optimized our debt profile, reducing total liabilities to $18.0 million. This sound and robust capital base provides us with the necessary financial resilience to support our aggressive growth investments as we move forward into the next phase of expansion. Turning to slide 25, I'd like to highlight our enhanced cash-generating capabilities. Our cash flow from operating activities more than doubled in this period, rising to approximately $3.0 million, which validates that we have established a high-quality business structure capable of generating abundant and sustainable liquidity. Furthermore, to fuel our nonlinear business expansion, we have recently secured a new $16 million syndicated loan from multiple financial institutions. This provides us with significant strategic dry powder, ensuring that we can execute inorganic growth opportunities such as M&A with the speed and flexibility required to capture market opportunities without delay. Next, I will outline our capital allocation policy, detailing exactly how we intend to deploy our robust capital to maximize long-term shareholder value. We are prioritizing the allocation of our abundant liquidity and funding towards strategic M&A activities. Our primary targets are entities that directly contribute to enhancing our customer lifetime value or domestic and international companies that can strengthen our platform through the integration of advanced technology. I would particularly like to emphasize our proven track record of execution. We have successfully integrated every past acquisition exactly according to plan. We do not pursue scale for its own sake. Rather, we practice disciplined M&A, leveraging our deep integration expertise to reliably deliver synergies and maximize overall corporate value. Finally, I will present our consolidated earnings guidance for the fiscal year ending December 2026. As CEO Ito has explained, the powerful synergy between national policy tailwinds and our transition into the margin expansion phase is clear. For fiscal year 2026, we forecast strong double-digit growth across both the top and bottom lines. Specifically, we project net revenue to reach between $82.9 million- $95.7 million. Income from operations is expected to range between $4.5 million- $5.4 million. Beyond simply expanding revenue, we are laser-focused on steadily improving our operating margins to reflect our true earning power. Our mission remains to meet the high expectations of our investment community and to deliver sustainable growth in shareholder value. Thank you very much. We are not just chasing growth. We are engineering a more profitable and resilient future. We are fully prepared to capitalize on the massive tailwinds ahead. That concludes my presentation. Thank you very much. Now we'll move on to the session on where we will answer the questions you submitted in advance. Due to time constraints, we will focus on answering the most frequently asked questions. First question. With your Nasdaq listing, you plan to expand your overseas operations. What are your chances of success with your business model in the U.S. or globally? Mr. Ito, please answer. 10 years ago, our company attempted to expand overseas in Asia, but we faced challenges that forced us to withdraw, such as a lack of creditworthiness, insufficient financial resources, and cultural differences in the local area. This Nasdaq listing is a pivotal opportunity for us, and our main aim was to lay the groundwork in terms of creditworthiness and financial resources necessary to venture into overseas markets. Our specific strategy going forward will be to focus on M&A rather than starting from scratch. Our targets are sports schools, fitness clubs, and education-related companies that are already operating in developed countries such as Asia, Europe, and the Americas. While many countries have mature sports markets, there are a few examples of businesses that have seriously incorporated developing non-cognitive skills, making this a vast blue ocean. By incorporating our absolute strength, such as our non-cognitive skills visualization system into the acquired local companies, we are confident in our ability to gain market share in the global market. Here's the next question. When acquiring a foreign company with a different country or culture, what kind of plan do you have in place to ensure a successful PMI? Mr. Ito, please answer. Yes. Thank you for your question. Up until now, our company has successfully PMI in acquired companies as planned, leading them to growth. Even in our overseas expansion, our discipline policy remains unchanged, not simply expanding in scale, but welcoming partners who share the same philosophy. Regarding national and cultural barriers, we will proceed with a system that ensures synergy is created by respecting local cultures while incorporating our strengths in developing non-cognitive skills and utilizing technology to create added value. Third question is the number of members in the school program has only slightly increased. You mentioned that you focused resources on the club activities program. Are you concerned that this might slow down the growth of the school program, which is the foundation of your business? Mr. Ito, please answer. Thank you. While we strategically reallocated resources temporarily to secure high-trust government projects, our core school business remains a priority. Last year, we strategically and temporarily concentrated our resources to ensure the successful completion of large-scale projects in Nagoya City and other areas, thereby earning overwhelming trust. Going forward, we aim to further expand our market share by introducing inside sales, strengthening customer acquisition through social media advertising, and promoting M&A and alliances with companies that share our philosophy. In addition, recruitment of instructors nationwide is progressing smoothly through comprehensive partnerships, and we already have a system in place to grow both our club activities business and our school business in a hybrid manner. We will also put our school business back on a strong growth trajectory. Fourth question is, how do you plan to retain existing sports school members in the future given the economic factors such as rising prices in Japan? I'd like to know your future plans. Mr. Ito, please answer. Thank you. The value we offer is not merely technical sports instruction, but the development of non-cognitive skills nurtured through the close support of real-life instructors. This is not something that can be taught through studying, and it is a professional job that only humans can do that cannot be replaced by AI. Parents have also appreciated this educational value, and it is recognized as education that should be prioritized even amid rising prices. In the age of AI, we believe that premiumization of the value we offer is the best way to retain our customers. Next question is, now that we've entered the first year of the reform period for club activities, what is the current progress? Mr. Kiyotaka Ito, please answer. Thank you for your question. Now that we've entered the first year of the reform implementation period, we're just about to accelerate our efforts. Up until now, we've focused on building a safe and high-quality operational model, phase I, through pilot projects with various local governments. With this foundation complete, our strategy is now shifting to scaling to designated cities, phase II, which offer the best balance of population density and market size. We already have a track record in major metropolitan areas such as Nagoya and Kyoto, and going forward, we will rapidly accelerate our expansion, targeting approximately 2,000 schools in Tokyo's 23 wards and designated cities nationwide. Furthermore, we have five strong barriers to entry. Specifically, these include our number one contract record and high repeat rate in Japan, our central national network with organizations such as the Japan Sport Association, our track record of collaboration with local governments nationwide, our only large-scale instructor platform in Japan, and our absolute safety management system with zero serious accidents. We recognize that these factors working together have earned us the trust of local governments and established a solid foundation. Next question. You recently issued a press release regarding preparations for listing on the Tokyo Stock Exchange. You are already listed on Nasdaq, so why are you aiming to list on the domestic market at this time? Also, could you tell us about the timeline for the listing? Mr. Ito, please answer. Yes, I will answer that question. Listing on Nasdaq is of great significance in terms of global expansion and fundraising overseas. Our main business at present is the reform of school club activities in Japan, which is a crucial national policy. In order to receive projects from local governments and educational institutions throughout the country and take on the responsibility for Japan's sports infrastructure, we have determined that it is essential to also list on the Tokyo Stock Exchange, which is a domestic market, and to prove absolute credibility and governance as a more public entity in Japan. Regarding the schedule, we are currently working diligently on preparations and aim to realize it as soon as possible. We will promptly inform everyone of the specific application date and other details through disclosure or press releases as soon as there is progress. Final question. Regarding the financial results for the fiscal year ending December 2025, how did they compare to the financial forecast that was initially announced? Ms. Yamamoto, please answer. In summary, our performance for fiscal year 2025 in terms of both revenue and income from operations fell firmly within the range of our initial forecasts. While we shifted human resources to take over large-scale projects in Nagoya, which temporarily suppressed the growth of the school business, the company as a whole firmly secured our planned levels for both the top and bottom lines. Thank you, Mr. Ito. That concludes our answers to the questions we received in advance. We will now conclude the Q&A session. Answers to any remaining questions will be posted on our IR website at a later date, so please check there. If you have any further questions, please contact us via the email address listed in the materials or through our IR website, and our management team will answer your questions as quickly as possible. Finally, we'd like to hear a few words from Mr. Ito. Mr. Ito, thank you for your time. Thank you all for attending our earnings presentation today. For 25 years since our founding, we have strived to transform Japan's traditional physical education into sports by rejecting physical punishment and the emphasis on sheer willpower, and by consistently adhering to a teaching approach that recognizes, praises, encourages, and inspires. We have found that our approach perfectly aligns with the values of today's era, and we feel a strong sense of accomplishment in the significant shift in society. While AI is evolving at a tremendous pace and is advancing in areas such as cram schools, our company's philosophy is people are the main actors, and we are committed to focusing on work that only humans can do. The warm guidance that nurtures children's non-cognitive abilities can never be replaced by AI. In the massive national market of club activity reform, we have set a clear goal to gain a market share in at least 30% of all junior high schools in Japan by 2031 and establish a business that can generate substantial profits. No other company in the world has specialized in children's instruction on this scale and built a nationwide infrastructure. This Nasdaq listing is the biggest step in spreading this strength to the world. Drawing on the setback of withdrawing from overseas expansion approximately 10 years ago, we will now focus on M&A to seriously develop markets in Asia, Europe, and other developed countries. At the same time, in order to become a more public entity as a company that plays a role in national policy in Japan, we will aim to achieve a dual listing on the Tokyo Stock Exchange as soon as possible. For me, making a company bigger is synonymous with making society better. Listing is not the goal, but merely a process. Based on this belief, we are confident that we will meet your expectations with strong business growth, both domestically and internationally. We would appreciate your continued enthusiastic support. Thank you very much for today. This concludes the Leifras Corporation 2025 full-year financial results briefing. Thank you very much for taking the time out of your busy schedules to participate today. We would greatly appreciate your continued support. Have a great day. Thank you.