Elematec Corporation Forms a Business Alliance with and Agrees to Make a Strategic Investment in MEDIROM Healthcare Technologies’ MOTHER Labs Subsidiary

Rhea-AI Summary

MEDIROM Healthcare Technologies Inc. (NASDAQ: MRM) has announced a capital and business alliance between its subsidiary MEDIROM MOTHER Labs Inc. and Elematec (TOKYO PRIME: 2715), a member of the Toyota Tsusho group. Elematec has agreed to make a strategic investment in MEDIROM MOTHER Labs' Series A round at a pre-money valuation of 9 billion yen (approximately US$60,000,000).

Elematec is an electronics trading company with over 70 locations globally, providing commercial products in various fields including electronic devices, home appliances, and industrial equipment. The alliance aims to leverage Elematec's parts procurement, manufacturing services, and vast network of business partners to provide an additional distribution channel for MEDIROM's MOTHER Bracelet.

The MOTHER Bracelet offers advanced features for 24/7 health monitoring without the need for recharging, aligning with Elematec's customers' demand for new and feature-rich personal electronics.

Positive

• Strategic investment from Elematec at a 9 billion yen pre-money valuation
• Access to Elematec's global network and distribution channels
• Potential for increased sales and market expansion for the MOTHER Bracelet
• Synergies with Elematec's parts procurement and manufacturing services

Negative

• None.

Insights

Financial Analyst

This strategic investment and business alliance between Elematec and MEDIROM's MOTHER Labs subsidiary is a significant development for MEDIROM Healthcare Technologies. The 9 billion yen ($60 million) pre-money valuation for MOTHER Labs indicates substantial confidence in its potential.

Key points to consider:

• The alliance provides MEDIROM with access to Elematec's extensive distribution network and manufacturing expertise, potentially accelerating the MOTHER Bracelet's market penetration.
• Elematec's involvement could lead to cost efficiencies in production and supply chain management.
• The partnership may enhance MEDIROM's credibility in the healthcare technology sector, potentially attracting further investments or partnerships.
• However, investors should note that the impact on MEDIROM's overall financials will depend on the size of Elematec's investment and the terms of the alliance, which are not disclosed in this announcement.

While this news is positive for MEDIROM's growth prospects, particularly in expanding its MOTHER Bracelet business, the company's relatively small market cap of $12.9 million suggests it's still in a growth phase with associated risks. Investors should monitor how this alliance translates into revenue growth and market share gains in the coming quarters.

Tech Expert

The MOTHER Bracelet represents an intriguing entry into the competitive wearable health tech market. Its standout feature of continuous monitoring without the need for recharging addresses a significant pain point in current wearable devices. This could be a game-changer if the technology lives up to its promise.

Key technological aspects to consider:

• The "no recharge" claim suggests innovative power management or energy harvesting techniques, which could have broader applications beyond this device.
• 24/7 continuous monitoring implies advanced sensor technology and data processing capabilities, potentially offering more comprehensive health insights than intermittent monitoring.
• Integration with Elematec's expertise in electronics and components could lead to further refinements and cost optimizations in future iterations of the device.

However, the success of the MOTHER Bracelet will depend not only on its technical capabilities but also on factors such as user comfort, data accuracy and the value of the health insights provided. The partnership with Elematec could help address these aspects through improved manufacturing processes and component selection. As the wearable health tech market continues to grow, MEDIROM's innovation in continuous monitoring could position it well for future growth, especially if it can leverage Elematec's industry connections effectively.

TOKYO, Oct. 15, 2024 (GLOBE NEWSWIRE) -- MEDIROM Healthcare Technologies Inc. (NASDAQ: MRM) announces that its subsidiary MEDIROM MOTHER Labs Inc. has formed a capital and business alliance with Elematec Corporation (TOKYO PRIME: 2715), a member of the Toyota Tsusho Corporation group. Under the capital and business alliance agreement, Elematec Corporation has agreed to make a strategic investment in MEDIROM MOTHER Labs’ Series A round at a pre-money valuation of 9 billion yen (approximately US$60,000,000, calculated at an exchange rate of JPY150 to US$1).

Elematec is an electronics trading company with over 70 locations in Japan and abroad. The Company provides commercial products in various fields, including the latest electronic products such as smartphones, tablets, home appliances, automobiles, OA equipment, and industrial equipment.

“We anticipate the capital and business alliance will produce strong synergies with Elematec's parts procurement and manufacturing services and allow us to leverage its vast network of business partners to provide an additional distribution channel for MEDIROM’s MOTHER Bracelet,” said Yoshio Uekusa, CEO, MEDIROM MOTHER Labs.

With demand from Elematec’s customers for new and feature-rich personal electronics, the MOTHER Bracelet offers appealing advanced features that enable customers to monitor their health 24 hours a day, 365 days a year without the need for recharging and allowing for uninterrupted continuous monitoring.

About Elematec Corporation

Elematec Corporation is an electronics trading company created in 2009 through the integration of Takachiho Electric Co., Ltd. and Onishi Denki Co., Ltd. Since the establishment of Takachiho Electric in 1947, the company has continued to grow while wielding flexibility and speed to earn the trust of customers in the fast-evolving electronics industry. As a partner in manufacturing, the company aligns itself with customers from the starting line of product development and works together with them to realize one-stop solutions by being involved from the planning and development, all the way through design, prototyping, and mass production stages. Through the company’s industry-leading network in Japan and overseas, it delivers products from electronic materials, parts and module products to finished products, on a global scale. Elematec Corporation is a member of the Toyota Tsusho Corporation group, with Toyota Tsusho Corporation being the sole general trading company of the Toyota Group.

Web: https://www.elematec.com/en/

About MEDIROM MOTHER Labs Inc.

A subsidiary of MEDIROM Healthcare Technologies Inc. (NASDAQ: MRM) (“MEDIROM”), MEDIROM MOTHER Labs Inc. (“MOTHER Labs”) focuses on the health-tech sector. The company’s core activities include the "Specific Health Guidance Program" offered through the "Lav" health application and development and sales of the 24/7 recharge-free MOTHER Bracelet^®︎ smart tracker. By leveraging the features of the recharge-free MOTHER Bracelet^®︎, MOTHER Labs offers customizable health management solutions across diverse sectors, including caregiving, logistics, manufacturing, etc.

For more information visit: https://mother-bracelet.com

MEDIROM Healthcare Technologies Inc.
NASDAQ Symbol: MRM
Tradepia Odaiba, 2-3-1 Daiba, Minato-ku, Tokyo, Japan
Web https://medirom.co.jp/en
Contact: ir@medirom.co.jp

MEDIROM MOTHER Labs Inc.
Tradepia Odaiba, 2-3-1 Daiba, Minato-ku, Tokyo, Japan

Forward-Looking Statements Regarding MEDIROM Healthcare Technologies Inc. and MEDIROM MOTHER Labs Inc.

Certain statements in this press release are forward-looking statements for purposes of the safe harbor provisions under the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements may include estimates or expectations about MEDIROM’s possible or assumed operational results, financial condition, business strategies and plans, market opportunities, competitive position, industry environment, and potential growth opportunities. In some cases, forward-looking statements can be identified by terms such as “may,” “will,” “should,” “design,” “target,” “aim,” “hope,” “expect,” “could,” “intend,” “plan,” “anticipate,” “estimate,” “believe,” “continue,” “predict,” “project,” “potential,” “goal,” or other words that convey the uncertainty of future events or outcomes. These statements relate to future events or to MEDIROM’s future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause MEDIROM’s actual results, levels of activity, performance, or achievements to be different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond MEDIROM’s control and which could, and likely will, affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects MEDIROM’s current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to MEDIROM’s operations, results of operations, growth strategy and liquidity. Some of the factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements in this press release include:

• MEDIROM’s ability to achieve its development goals for its business and execute and evolve its growth strategies, priorities and initiatives;
• MEDIROM’s and Elematec Corporation’s ability to collaborate in the anticipated manner;
• changes in Japanese and global economic conditions and financial markets, including their effects on MEDIROM’s expansion in Japan and certain overseas markets;
• MEDIROM’s ability to achieve and sustain profitability in its Digital Preventative Healthcare Segment;
• the fluctuation of foreign exchange rates, which affects MEDIROM’s expenses and liabilities payable in foreign currencies;
• MEDIROM’s ability to maintain and enhance the value of its brands and to enforce and maintain its trademarks and protect its other intellectual property;
• MEDIROM’s ability to raise additional capital on acceptable terms or at all;
• MEDIROM’s level of indebtedness and potential restrictions on MEDIROM under MEDIROM’s debt instruments;
• changes in consumer preferences and MEDIROM’s competitive environment;
• MEDIROM’s ability to respond to natural disasters, such as earthquakes and tsunamis, and to global pandemics, such as COVID-19; and
• the regulatory environment in which MEDIROM operates.

More information on these risks and other potential factors that could affect MEDIROM’s business, reputation, results of operations, financial condition, and stock price is included in MEDIROM’s filings with the Securities and Exchange Commission (the “SEC”), including in the “Risk Factors” and “Operating and Financial Review and Prospects” sections of MEDIROM’s most recently filed periodic report on Form 20-F and subsequent filings, which are available on the SEC website at www.sec.gov. MEDIROM assumes no obligation to update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ from those anticipated in these forward-looking statements, even if new information becomes available in the future.

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/87e4abd5-0267-4d6a-97ca-b1d56e56f3d6

FAQ

What is the pre-money valuation of MEDIROM MOTHER Labs in the Series A round with Elematec?

The pre-money valuation of MEDIROM MOTHER Labs in the Series A round with Elematec is 9 billion yen (approximately US$60,000,000).

How will the alliance with Elematec benefit MEDIROM's MOTHER Bracelet?

The alliance will provide an additional distribution channel for the MOTHER Bracelet through Elematec's vast network of business partners and leverage their parts procurement and manufacturing services.

What are the key features of MEDIROM's MOTHER Bracelet mentioned in the press release?

The MOTHER Bracelet offers advanced features that enable customers to monitor their health 24 hours a day, 365 days a year without the need for recharging, allowing for uninterrupted continuous monitoring.

Which stock exchange is MEDIROM Healthcare Technologies (MRM) listed on?

MEDIROM Healthcare Technologies Inc. (MRM) is listed on the NASDAQ stock exchange.