Summary of Financial Statements
for the First Three Months of Fiscal Year Ending December 31, 2022
[Japanese GAAP] (Consolidated)
May 11, 2022
Company Name

SymBio Pharmaceuticals Limited

Listing: Tokyo Stock Exchange

Securities Code4582

URL: https://www.symbiopharma.com/

Representative

Representative Director,
President and Chief Executive Officer

Fuminori Yoshida

Contact Person

Corporate Officer andChief Financial Officer

Takaaki Fukushima

TEL +81-3-5472-1125

Date of Dividend
Payment (plan)—

Scheduled Date to File Quarterly May 12, 2022
ReportSupplementary materials for the quarterly financial statements:

Yes ・ No

Holding of quarterly earnings performance review:

Yes ・ No

(Amounts of less than one million yen are rounded down.)
1. Business Results for the First Three Months of FY 2022 (January 1, 2022 to March 31, 2022)(1) Consolidated Operating Results (cumulative)(Percentages indicate year-on-year changes.)
Net Sales

Operating Profit

Millions of yen%

Millions of yen%

Millions of yen

2,315
509
－
Q1 FY 2022—－－－
Q1 FY 2021—
Note: Comprehensive income:For the three months ended March 31, 2022:
For the three months ended March 31, 2021:
Earnings per ShareProfit attributable toowners of parent

Ordinary Profit%

Millions of yen

%

—
－
—
163 million yen ( -%)- million yen ( -%)

163

—
—

478

－

Diluted Earnings per Share
Yen

Yen

Q1 FY 2022
4.25
4.18
—
Q1 FY 2021—
(Note) Figures for Q1 FY 2021 and year-on-year changes are not shown since consolidated accounting has been adopted from Q1 FY
2022.
(2) Consolidated Financial Position
Total Assets
Q1 FY 2022 (as of March 31, 2022)
FY 2021 (as of December 31, 2021)(Reference) Shareholders’ equity:

Net Assets

Equity Ratio

Millions of yen

Millions of yen

%

8,258
—

6,848
—

76.5
—

Q1 FY 2022 (as of March 31, 2022)
FY 2021 (as of December 31, 2021)

6,321 million yen— million yen(Note) Figures for FY 2021 are not shown since consolidated accounting has been adopted from Q1 FY 2022.
2. Dividends
Annual Dividend per Share
1st QuarterYen

2nd Quarter
Yen

3rd Quarter
Yen

FY 2021—0.00—
FY 2022—
FY 2022 (Forecast)
0.00—(Note) Revision of dividend forecasts most recently announced: Yes ・ No

―1―

Fiscal Year End
Yen

Full Year
Yen

0.00

0.00

0.00

0.00

3. Earnings Forecasts for FY 2022 (January 1, 2022 to March 31, 2022)

Net Sales
Millions of yen

Operating Profit% Millions of yen(Percentages indicate year-on-year changes.)
Profit attributable toEarnings per Shareowners of parent

Ordinary Profit% Millions of yen

10,992—
Full Year
1,770
—
1,750
(Note) Revision of earnings forecasts most recently announced: Yes ・ No

% Millions of yen

%

Yen

—

—

38.55

Notes:(1) Changes in significant subsidiaries during the period:(change in specific subsidiaries involving changes in the scope of consolidation)
Addition: 1
Company name: SymBio Pharma USA, Inc.

(2) Application of special accounting treatment in preparing the quarterly financial
statements:

1,480

Yes ・ NoYes ・ No

(3) Changes in accounting policies, changes in accounting estimates and restatements after error corrections(a) Changes in accounting policies due to revision of accounting standards:
Yes ・ NoYes ・ No(b) Changes in accounting policies due to other reasons:(c) Changes in accounting estimates:

Yes ・ No(d) Restatements after error corrections:

Yes ・ No

(4) Number of issued shares (common stock)(i) Total number of issued shares at the end of
the period (including treasury shares)

Q1 FY 2022

38,486,156 shares

FY 202138,457,206 shares(ii) Total number of treasury shares at the endof the period

Q1 FY 2022

83,268 shares

FY 202182,618 shares

Q1 FY 2022

38,392,424 shares(iii) Average number of shares during theperiod (cumulative)

Q1 FY 2021

38,183,021 shares* Summary of the quarterly financial statements is not subject to quarterly reviews by certified public accountants or accounting
corporations.
* Explanation regarding the appropriate use of earnings forecasts and other matters
All forecasts presented in this document, including earnings forecasts, are based on the information currently available to theCompany and assumptions judged to be reasonable. Actual results may differ substantially from these forecasts due to various
factors. Regarding the assumptions made in the Company’s earnings forecasts, please refer to “1. Qualitative Information on
Quarterly Financial Results (3) Explanation of consolidated earnings forecast and other forward-looking information” on Page 4of the attachment.

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Index of the attachment
1. Qualitative Information on Quarterly Financial Results ........................................................................................................................ 2(1) Business results ................................................................................................................................................................................ 2(2) Explanation of financial position...................................................................................................................................................... 4(3) Explanation of earnings forecasts and other forward-looking information ...................................................................................... 4
2. Quarterly Consolidated Financial Statements and Primary Notes ......................................................................................................... 5(1) Quarterly consolidated balance sheet ............................................................................................................................................... 5(2) Quarterly consolidated statement of income and consolidated statement of comprehensive income ............................................... 7
Quarterly consolidated statement of income for the first three months of FY 2022 ........................................................................... 7
Quarterly consolidated statement of comprehensive income for the first three months of FY 2022 .................................................. 8(3) Notes to quarterly consolidated financial statements ....................................................................................................................... 9(Notes to going concern assumptions) ............................................................................................................................................... 9(Notes in case of significant changes to shareholders’ equity) ........................................................................................................... 9(Accounting policy changes) ............................................................................................................................................................. 9(Additional information) .................................................................................................................................................................. 10(Significant subsequent events) ....................................................................................................................................................... 11―1―

1. Qualitative Information on Quarterly Financial Results(1) Business results
Starting from the first three months of FY 2022, the Company will prepare consolidated quarterly financial statements in connection
with the commencement of full-fledged operations at SymBio Pharma USA, Inc. (CEO and President: Fuminori Yoshida), which willserve as a strategic base for our global operations as a specialty pharmaceutical company. As reference, we have provided year-onyear comparisons with the non-consolidated quarterly financial statements in the same period last year, since there have been no
substantial changes in our business composition.

(i) Business results for the period under review
In December 2020, the Company began selling TREAKISYM® (generic name: bendamustine hydrochloride) through its own salesorganization. This was a critical step of the Company to attain profitability in FY 2021, which was a top priority for the fiscal year.
The Company has assigned medical representatives nationwide and hematology experts in each region of operation to establish ahighly productive salesforce capable of addressing local needs. To achieve nationwide distribution, we have entered into distributionagreements with Suzuken Co., Ltd. and Toho Pharmaceutical Co., Ltd. with both companies as exclusive distributors. We are also
working with S.D. Collabo Co., Ltd. to establish two logistics centers, one in Eastern Japan and the other in Western Japan.
In February 2022, the Company obtained approval for a partial change to the marketing authorization of the ready-to-dilute (RTD)
intravenous formulation of TREAKISYM®, which was launched in January 2021, to add rapid infusion (RI) administration.
Compared to the freeze-dried (FD) formulation, the RTD formulation reduces the time required for the complicated dissolution
process of. RI administration further benefits both patients and healthcare providers by reducing the infusion time to 10 minutes
from the 60 minutes required by the RTD formulation.
With the cooperation of medical institutions, we have steadily converted from the FD to RTD formulation. More than 99% of
medical institutions had started using the RTD formulation by the end of March 2022. In addition, by the end of April 2022, over
93% of medical institutions had expressed an intention to convert to RI administration. We have also taken necessary steps to ensure
the stable supply of FD and RTD formulations of TREAKISYM®.
Despite sales activities being constrained by factors including delays in treatment and restrictions on facility visits due to the
COVID-19 situation, net sales rose to 2,150,638 thousand yen (+51.4% year-over-year). The increase was largely due to the approvalin March 2021 of TREAKISYM® for combination use in bendamustine-rituximab (BR) therapy and in polatuzumab vedotin plus
bendamustine-rituximab (P+BR) therapy to treat recurrent/refractory diffuse large B-cell lymphoma (r/r DLBCL). The NHI pricelisting of Chugai Pharmaceutical’s polatuzumab vedotin occurred in May 2021.
Selling, general and administrative expenses totaled 1,290,812 thousand yen (+5.8% year-over-year). This amount includes
research and development expenses of 469,380 thousand yen (+2.0% year-over-year).
As a result, in the first three months of FY 2022, operating profit was 446,286 thousand yen (versus an operating loss of 210,518
thousand yen in the same period of FY 2021), ordinary profit was 416,275 thousand yen (versus an ordinary loss of 208,907 thousand
yen in the same period of FY 2021), and bottom-line profit was 352,313 thousand yen (versus a bottom-line loss of 209,659 thousand
yen in the same period of FY 2021).
Segment information has been omitted since the Company operates within a single segment, which includes the research anddevelopment, manufacturing, and marketing of pharmaceutical drugs and other related activities.

(ii) Research and development activities
During the first three months of FY 2022, we conducted the following development activities in each of our development pipelines.
(a) Anticancer agents: SyB L-0501 (FD formulation), SyB L-1701 (RTD formulation), and SyB L-1702 (RI administration)(generic name: bendamustine hydrochloride or bendamustine hydrochloride hydrate, trade name: TREAKISYM ®)In March 2021, the Company obtained approval for the use of the FD formulation of TREAKISYM® in BR therapy to treat r/r
DLBCL as an additional indication.
In January 2021, the Company commenced sales of the ready-to-dilute (or RTD) liquid formulation of TREAKISYM® inlicensed from Eagle Pharmaceuticals, Inc. (head office: New Jersey, U.S.), having obtained marketing approval in September 2020.
In April 2021, the Company obtained approval for a partial change to the marketing approval of the RTD formulation for its use in
BR and P+BR therapy for the treatment of r/r DLBCL.

―2―

For the RI administration, the Company completed clinical studies on safety and filed a partial change application in May 2021.
The application was approved in February 2022.
The Company will continue to actively conduct research on TREAKISYM®, such as the ongoing clinical research with Saitama
Medical University and joint research with Kyoto University, to explore new potential applications of the drug.

(b) Anticancer agents: SyB L-1101 (intravenous formulation) and SyB C-1101 (oral formulation) (generic name: rigosertib
sodium)Onconova Therapeutics, Inc., the drug’s licensor, announced in August 2020 that INSPIRE, the pivotal Phase 3 study assessing
the efficacy and safety of IV rigosertib in higher-risk MDS (HR-MDS) patients comparing to physician’s choice of treatment, did
not meet its primary endpoint. The Company is in charge of clinical development in Japan and has been in discussion with
Onconova regarding the future development of rigosertib.
For rigosertib and TREAKISYM®, the Company is searching for new indications as well as new applications for the drugs usedin combination with each other or with other existing drugs, through joint research with the University of Tokyo and otherinstitutions.

(c) Antiviral drug: SyB V-1901 (generic name: brincidofovir)
In the development of the intravenous and oral formulations of antiviral drug brincidofovir (SyB V-1901; hereinafter “BCV IV”
and “BCV Oral”), for which the Company envisions a global rollout, the Company is conducting joint research with top research
institutions specialized in each field in Japan and overseas in light of the broad spectrum of their effectiveness against dsDNA virus
infections, and will consider additional global clinical trials based on the scientific findings of the research. Earlier clinical trials in
the U.S. and Europe conducted by Chimerix Inc. (head office: North Carolina, U.S.) have demonstrated that BCV Oral has broadspectrum antiviral effects against a variety of dsDNA viruses. BCV IV is expected to be effective and safe for the prevention andtreatment of many dsDNA viruses, including adenovirus (AdV) infections after hematopoietic stem cell transplantation. In June
2021, Chimerix announced that the U.S. FDA had granted brincidofovir approval for the treatment of smallpox.
Based on the review by the Global Advisory Board held in February 2020, the Company has decided to prioritize the global
development of BCV IV primarily in Japan, the U.S., and Europe, targeting disseminated AdV infections occurring after
hematopoietic stem cell transplantation, a niche area with a high unmet medical need. In March 2021, the Company filed an IND
application with the FDA to conduct a Phase II clinical trial primarily in pediatric patients suffering from AdV infections (alsoincludes adults). This development program was granted a fast-track designation by the FDA, and the investigational drug wasadministered to the first patient enrolled (first patient in or FPI) in August 2021. Further, in January 2022, the Company successfully
filed a clinical trial application to the Medicines and Healthcare products Regulatory Agency of the U.K.
BK virus nephropathy after kidney transplantation is also considered a disease with serious consequences for the recipient, thedonor, the medical practitioner, and the society, as it impairs the function of the transplanted kidney. The Company has been working
toward an early solution to this problem through an international framework, preparing for clinical development targeting BK virus
infection after kidney transplantation. Separately, the Company has also been preparing for clinical development targeting EB
virus-related diseases such as difficult-to-treat multiple sclerosis, as well as post-COVID-19 conditions, which are assumed to be
associated with EB virus.
Through the accumulation of clinical trial data, we will examine the efficacy of BCV in humans against various dsDNA virus
infections and expand target indications to include multiviral infections. As a result, we aim to expand the target market andmaximize the business value of BCV.
In addition to strong antiviral effects, BCV is also expected to have antitumor effects. Through joint research with the National
Cancer Centre Singapore and University of California San Francisco Brain Tumor Center, SymBio is exploring new indications
for BCV in oncology, including rare brain tumors and EB virus-positive lymphoma. In March 2022, we commenced joint researchwith Brown University in the U.S. to investigate the anti-tumor effects of BCV on cytomegalovirus-associated glioblastoma (GBM).

(iii) Business outside JapanThe Company’s U.S.-based wholly-owned subsidiary, SymBio Pharma USA, Inc. (CEO and President: Fuminori Yoshida),
appointed Dr. Carolyn Yanavich as Chief Operating Officer and Chief Development Officer in April 2022, to further expand theglobal development structure. Dr. Yanavich had been Vice President and Head of Project Management and Clinical Operations at―3―

SymBio Pharma USA since October 2021. We expect her to spearhead and accelerate our global development of brincidofovir, with
SymBio Pharma USA serving as a driving force behind the international clinical trials.

(iv) Licensing of new drug candidates
SymBio is moving ahead with global development of brincidofovir, an antiviral drug in-licensed in September 2019. At the sametime, the Company continues to evaluate new drug candidates for potential in-licensing. Through these efforts, the Company aims
to create medium- to long-term business value as a profitable biopharmaceutical company with growth potential.

(2) Explanation of financial position
Total assets as of March 31, 2022 stood at 8,258,088 thousand yen. Current assets totaled 6,811,409 thousand yen, mainly consistingof 4,182,712 thousand yen in cash and deposits, 1,698,188 thousand yen in accounts receivable-trade, and 356,359 thousand yen insemi-finished goods. Non-current assets amounted to 1,446,679 thousand yen, mainly consisting of 1,036,433 thousand yen in deferred
tax assets and 235,519 thousand yen in software.
Total liabilities stood at 1,410,034 thousand yen. Current liabilities totaled 1,407,033 thousand yen, mainly consisting of 592,162
thousand yen in accounts payable-other. Non-current liabilities amounted to 3,001 thousand yen, mainly consisting of 3,001 thousand
yen in liabilities for retirement benefits.
Total net assets stood at 6,848,054 thousand yen, mainly consisting of 17,169,303 thousand yen in capital stock, 17,144,188
thousand yen in capital surplus, and 526,566 thousand yen in share acquisition rights.
As a result, the equity ratio was 76.5%.

(3) Explanation of earnings forecasts and other forward-looking information
There was no change to the earnings forecast for FY 2022 as of the date of this Summary of Financial Statements.
We expect continued growth in sales taking into account the full-year contribution from the additional indication of r/r DLBCL
approved in March 2021 and the impact of the NHI price listing of Chugai Pharmaceutical's genetically engineered polatuzumab
vedotin in May 2021.
In February 2022, the Ministry of Health, Labour and Welfare approved the marketing of generic drugs with the RTD formulationof TREAKISYM® as the brand name drug. However, we believe this approval may infringe on our exclusive rights to use the patent
for this product, and have reported this matter to Eagle Pharmaceuticals, Inc., the licensor. We have also notified in writing the four
companies that have obtained marketing approvals for generic drugs regarding our concerns about infringement of our patent rights
and have demanded that they take appropriate measures. If it becomes clear that the said approval infringes our patent rights, we will
cooperate with Eagle Pharmaceuticals to take the necessary legal measures against companies that have obtained marketing approvalfor generic products.

―4―

2. Quarterly Consolidated Financial Statements and Primary Notes(1) Quarterly consolidated balance sheet(Unit: thousands of yen)
Q1 FY 2022
(as of March 31, 2022)
AssetsCurrent assets
4,182,712

Cash and deposits
Accounts receivable–trade

1,698,188
36,181

Merchandise and finished goods
Semi-finished goods

356,359
166,444

Prepaid expenses
Other

371,521
6,811,409

Total current assets
Non-current assets
Property, plant and equipment
Buildings, net

43,895Tools, furniture and fixtures, net
Construction in progress

36,638836

Total property, plant and equipment

81,370Intangible assets
Software
Software in progress

235,519
7,030

Total intangible assets

242,549

Investments and other assets
Deferred tax assets
Leasehold and guarantee deposits

1,036,433

Total investments and other assets

1,122,759

86,325

Total non-current assets

1,446,679

Total assets

8,258,088

Liabilities
Current liabilities
192,298

Accounts payable–trade
Accounts payable–other592,162
136,887

Income taxes payable
Provision for product changeover

275,939
209,744

Other
Total current liabilities

1,407,033

Non-current liabilities
Liabilities for retirement benefits

3,001

Total non-current liabilities

3,001

Total liabilities

1,410,034―5―

(Unit: thousands of yen)
Q1 FY 2022
(as of March 31, 2022)
Net assets
Shareholders’ equity
17,169,303

Share capital
Capital surplus

17,144,188(27,905,553)

Retained earnings
Treasury shares(86,689)
6,321,248

Total shareholders’ equity
Accumulated other comprehensive income
Foreign currency translation adjustment

239

Total accumulated other comprehensive income

239

Share acquisition rights

526,566

Total net assets

6,848,054
8,258,088

Total liabilities and net assets―6―

(2) Quarterly consolidated statement of income and consolidated statement of comprehensive income
Quarterly consolidated statement of income for the first three months of FY 2022

Cost of sales(Unit: thousands of yen)
Q1 FY 2022
(from January 1, 2022
to March 31, 2022)
2,315,992
417,901

Gross profit

1,898,090

Selling, general and administrative expenses

1,388,889

Net sales

509,200

Operating profit (loss)
Non-operating income
Interest income
Foreign exchange gains

22
17,010Total non-operating income

17,032Non-operating expenses
Commission expenses

47,319298

Share issuance costs
Total non-operating expenses

47,617

Ordinary profit

478,616

Profit before income taxes

478,616

Income taxes - current

76,119

Income taxes - deferred

239,325

Total income taxes

315,444

Profit163,171

Profit attributable to non-controlling interests―
163,171

Profit attributable to owners of parent―7―

Quarterly consolidated statement of comprehensive income for the first three months of FY 2022

Profit(Unit: thousands of yen)
Q1 FY 2022
(from January 1, 2022
to March 31, 2022)
163,171

Accumulated other comprehensive income
Foreign currency translation adjustment

239

Total other comprehensive income

239
163,410Comprehensive income
Comprehensive income attributable to163,410Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests――8―

(3) Notes to quarterly consolidated financial statements(Notes to going concern assumptions)None to be reported.
(Notes in case of significant changes to shareholders’ equity)
In the first three months of FY 2022, the Company issued new shares due to the exercise of some of share acquisition rights
pertaining to the 33rd, 36th, 41st, 43rd, 44th, and 49th warrants. As a result, share capital and capital surplus each increased by
11,675 thousand yen. The total value of treasury shares increased 657 thousand yen as a result of share repurchases.
The disposal of treasury shares in response to the request to sell shares by shareholders of less-than-one unit of shares led to adecrease of 14 thousand yen in the total value of treasury shares and an increase of 11 thousand yen in other capital surplus.
As a result, as of March 31, 2022, share capital was 17,169,303 thousand yen, capital surplus was 17,144,188 thousand yen, andthe total value of treasury shares was 86,689 thousand yen.

(Accounting policy changes)(Application of Accounting Standard for Revenue Recognition)
The Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29; March 31, 2020;
hereinafter “Revenue Recognition Standard”) from the beginning of the first three months of FY 2022. As a result of the applicationof this standard, revenue will be recognized in the amount expected to be received in exchange for the promised goods or services
at the time control of the promised goods or services is transferred to the customer.
Under the previous accounting standard, for transactions where the total amount of consideration that the Company entitled toreceive in exchange for goods or services, was reduced after a contract is signed with the customer, the Company would change theconsideration once reduced amount was finalized. However, under the new accounting standard, the Company will make a reasonableestimate of the reduction and subtracts it from the consideration at the time the goods or services are transferred to the customer.
Further, under the previous accounting standard, the Company recorded expected sales returns in the amount equivalent to grossprofit. However, in accordance with the new accounting standard regarding variable consideration, the Company no longer
recognizes revenue at the time of sale and records refund liabilities as “other” under the current liabilities section of the balance
sheet.
The Company has followed the transitional treatment prescribed in the provision of Paragraph 84 of the Revenue Recognition
Standard, and has applied the new accounting standard from the beginning balance of retained earnings for the first three months of
FY 2022, whereby the cumulative effect of retrospective application of the new accounting standard prior to the beginning of thefirst three months of FY 2022 is added to or deducted from the beginning balance of retained earnings.
As a result, during the first three months of FY 2022, net sales increased by 42,074 thousand yen, profit before income taxes (oroperating profit and ordinary profit) increased by 42,074 thousand yen, respectively. In addition, the balance of retained earnings at
the beginning of the period decreased by 92,822 thousand yen.
In accordance with the transitional treatment prescribed by the “Accounting Standard for Quarterly Financial Reporting” (ASBJ
Statement No. 12), the Company has not presented information that breaks down revenue from contracts with customers during thefirst three months of FY 2021.

(Application of Accounting Standard for Fair Value Measurement)
The Company has applied the “Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30; July 4, 2019;
hereinafter “Fair Value Measurement Standard”) from the beginning of the first three months of FY 2022.
In applying the Fair Value Measurement Standard, the Company has followed the transitional treatment prescribed in the provisionof Paragraph 19 of the Fair Value Measurement Standard and Paragraph 44-2 of the “Accounting Standard for Financial Instruments”(ASBJ Statement No. 10; July 4, 2019), and will apply the new accounting standard prescribed by the Fair Value Measurement
Standard prospectively.
The adoption of this accounting standard has no effect on the quarterly consolidated financial statements.

―9―(Additional information)(Basis of presenting quarterly consolidated financial statements)
SymBio Group Company began preparing quarterly consolidated financial statements in the first three months of FY 2022. The
following is a summary of the significant matters that form the basis for the preparation of the quarterly consolidated financial
statements.
1. Scope of consolidation
Number of consolidated subsidiaries:
Name of consolidated subsidiary:

1
SymBio Pharma USA, Inc.

2. Application of equity method
None
3. Fiscal year of consolidated subsidiaries
The quarter-end date of consolidated subsidiaries is the same as the consolidated quarter-end date.
4. Matters related to accounting policies(1) Valuation rules and methods for significant assets
i. Marketable and investment securities
Other marketable and investment securities
Securities other than those without market value
Stated at fair value (unrealized gains and losses are accounted for as a component of net assets, with the cost of securities
sold calculated according to the moving-average method).
Securities without market value
Stated at cost determined by the moving average method.
ii. Derivatives
Stated at fair value.
iii. Inventories
Merchandise and finished goods are stated at cost determined by the first-in, first-out method, and semi-finished goods arestated at cost determined by the weighted average method (the amount stated in the balance sheet is calculated by writing
down the book value based on a decline in profitability).
Inventory items are classified into separate categories to keep detailed track of inventory movements and perform proper
valuation.
(2) Depreciation method for significant depreciable assets
i. Property, plant and equipment (excluding lease assets)
Determined by the straight-line method.
The useful life of principal assets is as follows.
Building
3 to 18 years
Tools, furniture and fixtures
4 to 20 years
ii. Intangible assets (excluding lease assets)
Determined by the straight-line method.
Software for internal use is amortized over the estimated useful life (5 years).
iii. Lease assets
The straight-line method is used, where the lease period is deemed as the useful life of the asset and the residual value isset as zero.
(3) Accounting for significant deferred assets
Stock issuance costs and bond issuance costs are fully expensed when incurred.
(4) Standards for translation of significant assets and liabilities in foreign currencies into yen
Assets and liabilities in foreign currency are translated into yen at the spot exchange rate on the final day of the accounting term
and the foreign exchange gains and losses from the translations are recognized in the income statement.

―10―(5) Basis for recording significant provisions
Provision for product changeover
The Company recognizes provisions for the estimated amount of expenses to be incurred in connection with the conversion
from FD to RTD formulations.
(6) Accounting for retirement benefits
The Company adopts a simplified method for the calculation of liabilities for retirement benefits and retirement benefit expenses,
whereby the amount payable at the end of the fiscal year for retirement benefits is deemed to be the retirement benefit obligation.
(7) Basis for recording significant revenues and expenses
The Company and its consolidated subsidiaries have adopted the “Accounting Standard for Revenue Recognition” (ASBJ
Statement No. 29; March 30, 2018) and “Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30; March
30, 2018). As a result of the application of these standards, revenue will be recognized in the amount expected to be received in
exchange for the promised goods or services at the time control of the promised goods or services is transferred to the customer.
(8) Other important matters that serve as the basis for the preparation of quarterly consolidated financial statements
Accounting for consumption taxes
Accounted for using the tax-excluded method.

(Significant subsequent events)
1. Issuance of the 56th warrant (stock options)On April 22, 2022, the Company issued and granted share acquisition rights in the form of stock options to five directors as
indicated below. This issuance of share acquisition rights was based on a resolution by the Board of Directors on March 29, 2022.
Number of share acquisition rights

3,200 units

Class and number of shares to be issued upon the exercise ofshare acquisition rights

80,000 common shares

Issue price of share acquisition rights and total issue amountIssue price: 17,200 yen
Total issue amount: 55,040,000 yen

Amount to be paid in for share acquisition rights

Amount to be paid in per share: 688 yen
Individuals who receive share acquisition rights shall offset
the amount to be paid in for the relevant share acquisitionrights against cash compensation equivalent to the amount.

Exercise price of share acquisition rights

Exercise price per share: 1 yen

Exercise period of share acquisition rights

From March 30, 2025 to March 29, 2032

Conditions for the exercise of share acquisition rights

Increase in share capital in case of the issuance of sharesthrough the exercise of share acquisition rights

Matters regarding transfer of share acquisition rights(1) Individuals to whom these share acquisition rights are
granted must hold a position as a director or employee of
the Company or with an affiliate to exercise these rights.
However, this will not apply to directors at the Company
or its affiliates who have left their positions due to expiryof their terms of offices, employees at the Company or its
affiliates who have retired as a result of reachingretirement age or directors or employees at the Company
or its affiliates who have been deemed to have left theirpositions or retired amicably by the Board of Directors.
(2) Other conditions will be established in the Share
Acquisition Rights Allocation Agreement concluded
between the Company and the employees.
Increase in share capital related to the issuance of sharesthrough the exercise of share acquisition rights shall equal toone half of the maximum amount by which share capital canbe increased as calculated in accordance with Article 17 of
the Ordinance on Company Accounting. Any fraction lessthan one yen shall be rounded up to the nearest one yen.
Transfers will require approval from the Board of Directors.

―11―

2. Issuance of the 57th warrant (stock options)On April 22, 2022, the Company issued and granted share acquisition rights in the form of stock options to 124 employees as
indicated below. This issuance of share acquisition rights was based on a resolution by the Board of Directors on March 29, 2022.
Number of share acquisition rights

6,493 units

Class and number of shares to be issued upon the exercise ofshare acquisition rights

162,325 common shares

Issue price of share acquisition rights and total issue amountIssue price: 17,200 yen
Total issue amount: 111,679,600 yen

Amount to be paid in for share acquisition rights

Exercise price per share: 688 yen
Individuals who receive share acquisition rights shall offset
the amount to be paid in for the relevant share acquisitionrights against cash compensation equivalent to the amount.

Exercise price of share acquisition rights

Exercise price per share: 1 yen

Exercise period of share acquisition rights

From March 30, 2025 to March 29, 2032

Conditions for the exercise of share acquisition rights

Increase in share capital in case of the issuance of sharesthrough the exercise of share acquisition rights

Matters regarding transfer of share acquisition rights(1) Individuals to whom these share acquisition rights are
granted must hold a position as a director or employee of
the Company or with an affiliate to exercise these rights.
However, this will not apply to directors at the Company
or its affiliates who have left their positions due to expiryof their terms of offices, employees at the Company or its
affiliates who have retired as a result of reachingretirement age or directors or employees at the Company
or its affiliates who have been deemed to have left theirpositions or retired amicably by the Board of Directors.
(2) Other conditions will be established in the Share
Acquisition Rights Allocation Agreement concluded
between the Company and the directors.
Increases in share capital related to the issue of shares throughthe exercise of share acquisition rights shall be equal to one
half of the maximum amount by which share capital can beincreased as calculated in accordance with Article 17 of theOrdinance on Company Accounting. Any fraction less than
one yen shall be rounded up to the nearest one yen.
Transfers will require approval from the Board of Directors.

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