Robot Consulting Co., Ltd.

Robot Consulting Co., Ltd. operates in the Japanese market for human resource and financial management platforms, AI legal consultation chat services, bill payment and invoice management services, business-to-business e-learning, and other digital transformation-related consulting services for small and medium-sized businesses. The cloud-based accounting and human resource software market in Japan is not as mature as the on-premises enterprise software market, and the company's success depends on the widespread adoption of cloud computing in general and human resource and financial management services in particular. The markets are highly competitive with relatively low barriers to entry.

The company's primary competitors in the Japanese market for Labor Robot are Yayoi Co., Ltd. and freee K.K., well-established providers of human resource and financial management platforms with long-standing customer relationships. Other competitors include Jobcan operated by Donuts Co., Ltd. and SmartHR. Inc. For other services, competitors include WriteUp Co., Ltd., a Tokyo Stock Exchange-listed company offering AI-related e-learning courses and grant application support. For Robot Lawyer, the most direct domestic competitor is Bengo4.com, Inc., which offers a consumer-oriented AI legal consultation chat service leveraging over 1.25 million consultation records. For Billing Robot, primary competitors include Shiharai.com, a service jointly provided by UPSIDER Inc. and Credit Saison Co., Ltd., and Invoice Card Payment by GMO Payment Gateway, Inc. These competitors are larger companies with greater brand recognition, longer operating histories, larger marketing budgets, and significantly greater resources.

The company generates revenue through sales of software products including Labor Robot, Robot Lawyer, and Billing Robot, as well as consulting and support services, e-learning services, and software installation services. Revenue is derived from both point-in-time transfers and over-time transfers. A significant part of revenue for the last three fiscal years derived from sales of Labor Robot and consulting and support services. The company plans to promote Robot Lawyer as its principal product for the fiscal year ending March 31, 2027. The business model includes helping customers apply for government grants and subsidies, particularly the Digitalization & AI Implementation Subsidy provided by METI, which subsidizes costs for software licenses, cloud service fees of no more than two years, and costs relating to installation.

Labor Robot, launched in September 2022, is a cloud-based human resource and financial management platform. The number of Labor Robot users grew to 715 ¹ as of March 31, 2026, with 179 ² new users added during the fiscal year ended March 31, 2026. Robot Lawyer is an AI legal consultation chat service that the company plans to incorporate into a platform by the end of the fiscal year ending March 31, 2027. The company has used LLM APIs connecting Robot Lawyer with multiple LLMs to avoid dependence on any single LLM. Billing Robot is a bill payment and invoice management service. The company also offers e-learning services hosted with ShareWis Co., Ltd., and consulting and support services including Digitalization & AI Implementation Subsidy application support. During the fiscal year ended March 31, 2026, the company outsourced 69.9% ³ of applications for the Digitalization & AI Implementation Subsidy to Kizashi Inc., Apricot Inc., and Senkou Co., Ltd.

On July 18, 2025, the company closed its initial public offering (IPO). On February 5, 2024, shareholders approved a 1,000-for-1 share split of issued and outstanding Ordinary Shares, increasing the total number of outstanding Ordinary Shares from 7,035 to 7,035,000. On December 19, 2024, the board of directors approved a 6-for-1 share split and an increase of authorized shares from 28,000,000 to 168,000,000, effective January 7, 2025, increasing outstanding shares from 7,035,000 to 42,210,000. On February 6, 2024, the board approved the issuance of options to purchase an aggregate of 2,268,000 ⁴ Ordinary Shares at JPY200 ⁵ per share to various officers, directors, employees, consultants, and service providers. During the fiscal years ended March 31, 2023 and 2024, the company issued 296,000 and 576,000 Ordinary Shares (or 1,776,000 and 3,456,000 Ordinary Shares after the 6-for-1 split) in private transactions for aggregate gross proceeds of approximately JPY325.6 million ⁶ and JPY348.5 million ⁷, respectively.

The company experienced revenue growth but has a history of operating losses. Total revenues for the fiscal year ended March 31, 2026 were JPY1,489,414 thousand ⁸ (approximately $9.4 million ⁹), compared to a loss of JPY534,685 thousand ¹⁰ for the fiscal year ended March 31, 2025 and JPY661,966 thousand ¹¹ for the fiscal year ended March 31, 2024. The accumulated deficit was JPY3,271,899 thousand ¹² (approximately $20.6 million ¹³) as of March 31, 2026, compared to JPY1,782,485 thousand ¹⁴ as of March 31, 2025 and JPY1,247,800 thousand ¹⁵ as of March 31, 2024. Management has concluded there is substantial doubt about the company's ability to continue as a going concern.

The company plans to promote Robot Lawyer as its principal product for the fiscal year ending March 31, 2027, and is focused on building a platform into which it will incorporate Robot Lawyer by the end of that fiscal year. The company has invested in the development of Junior Lawyer X by CJK Group, where CJK Group employs AI technology, and the company may earn profit from a profit-sharing scheme. The company also plans to expand into the legal technology business in Japan through Robot Lawyer and into the metaverse business in Japan. The company is building its research and development team and hiring more engineers as it trains its focus on legal technology and metaverse-related business.

The company spent 0.0% ¹⁶ of its supply cost to outsource software development to third-party vendors during the fiscal year ended March 31, 2026, compared to 8.7% ¹⁷ in each of the fiscal years ended March 31, 2025 and 2024, indicating a shift toward internal development. The company anticipates significantly expanding its operations and headcount in the near term, which will place significant strain on management, administrative, operational, and financial infrastructure.

The company hosts its products and services, including Labor Robot, Robot Lawyer, and Billing Robot, using Amazon Web Services (AWS) with its data center in the AWS Tokyo Region. E-learning services are hosted with ShareWis Co., Ltd. The company fully relies on its cloud service providers to maintain servers and infrastructure, including cybersecurity protection and recovery from server failure. The company's team is still small, and it may need to incur substantial costs to develop additional features in Labor Robot or to develop new products or services.

The filing does not specify R&D spending levels, capital expenditure plans, share repurchase authorization amounts, or dividend policy with exact figures for the upcoming period.

The company faces significant headwinds including a history of operating losses and substantial doubt about its ability to continue as a going concern. The company had a loss of JPY1,489,414 thousand ¹⁸ for the fiscal year ended March 31, 2026. The company's successful application rates for the Digitalization & AI Implementation Subsidy were 73.5% ¹⁹, 91.0% ²⁰, and 96.3% ²¹ for the fiscal years ended March 31, 2026, 2025, and 2024, respectively, indicating a declining trend. The company is heavily reliant on third-party software development vendors and cloud service providers, and any disruption could adversely affect business. The company also faces risks from rapidly evolving AI regulation in Japan and the United States, including Japan's Act on Promotion of Research and Development, and Utilization of Artificial Intelligence-related Technology enacted on June 4, 2025, and the U.S. AI Action Plan announced in July 2025.

The company has a history of operating losses with a loss of JPY1,489,414 thousand ²² for the fiscal year ended March 31, 2026 and an accumulated deficit of JPY3,271,899 thousand ²³ as of that date, leading to substantial doubt about its ability to continue as a going concern. The markets for its products are intensely competitive, with primary competitors including Yayoi Co., Ltd., freee K.K., and Bengo4.com, Inc., which have greater brand recognition, longer operating histories, and significantly larger resources. The company's successful application rate for the Digitalization & AI Implementation Subsidy declined to 73.5% ²⁴ in the fiscal year ended March 31, 2026 from 96.3% ²⁵ in the fiscal year ended March 31, 2024, and any further decline could materially affect revenue from software sales and consulting services. The company depends on a single cloud storage service provider, AWS, to operate its core products, and any disruption or termination of that service could adversely affect business. The company faces rapidly evolving AI regulation, including Japan's Act on Promotion of Research and Development, and Utilization of Artificial Intelligence-related Technology enacted on June 4, 2025, and the U.S. AI Action Plan announced in July 2025, which could affect the legality, profitability, or sustainability of its AI-integrated products.

Management's message emphasizes the company's transition toward legal technology and metaverse-related businesses, with a plan to promote Robot Lawyer as the principal product for the fiscal year ending March 31, 2027. The strategic priorities include expanding the customer and user base, scaling up sales of Labor Robot, e-learning services, software installation services, and new products, and incorporating Robot Lawyer into a platform by the end of the fiscal year ending March 31, 2027. Management acknowledges the company's history of operating losses and the substantial doubt about its ability to continue as a going concern, but believes that current cash and anticipated cash flow from operations, plus a portion of the net proceeds from the IPO and other financings, will be sufficient to meet anticipated cash needs for the next 12 months.