English Translation

This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

To Our Shareholders

Other Matters regarding Electric Provision Mesure of
the 26th Annual General Meeting of Shareholders(Matters Omitted in the Documents to be Delivered)Start of Measures for Electronic Provision: November 6, 2023

CyberAgent, Inc. (TSE Prime Market 4751)

1. Main Business Activities (as of September 30, 2023)
Business Segment

Business LineMediaABEMA and WINTICKET, etc.

Internet Advertisement

Advertising business and AI business, etc.

Game

Game application for smartphone, etc.

Investment Development

Venture capital, etc.

Other

Crowdfunding service , etc.

2. Main Business Locations (as of September 30, 2023)
CyberAgent, Inc.

Head Office: Shibuya-ku, Tokyo

Cygames, Inc.

Shibuya-ku, Tokyo

AbemaTV, Inc.

Shibuya-ku, Tokyo

CyberZ, Inc.

Shibuya-ku, Tokyo

Colorful Palette Inc.

Shibuya-ku, Tokyo

WinTicket, Inc.

Shibuya-ku, Tokyo

3. Major Creditors (as of September 30, 2023)
Creditor

Amount of bank loan

Mizuho Bank, Ltd.

40,000 million yen

4. Other Important Matters Concerning the Current State of the Corporate Group
There are no important items to be stated.

-2-

5. Status of Stock Acquisition Rights, etc.
①

Status of stock acquisition rights held by Company directors issued as remuneration for
the execution of duties (as of September 30, 2023)
The 11th Stock
Acquisition Rights

The 12th Stock
Acquisition Rights

The 13th Stock
Acquisition Rights

October 8, 2015

December 19, 2018

December 11, 2020

Common stock

Common stock

Common stock

Gratis

Gratis

Gratis

1 yen

1 yen

1 yen

Exercise period

From October 10, 2018
To October 9, 2025

From December 28, 2022
To December 27, 2028

From December 19, 2024
To December 18, 2030

Conditions for execution ofstock acquisition rights(Additional notes)(Additional notes)(Additional notes)

Directors who are not the
Audit and Supervisory
Committee members

Directors who are not the
Audit and Supervisory
Committee members

Directors who are not the
Audit and Supervisory
Committee members

153

270

338

122,400

108,000

135,200

1

2

3

Issuance Date
Type of shares to be issued
upon exercise of stockacquisition rights
Amount paid for stockacquisition rights
Exercise price per share attime of exercise

Category

Directorholdings

Number ofstockacquisitionrightsNumber ofshares to beissued upon
exercise ofstock
acquisitionrightsNumber ofholders

The 14th Stock
Acquisition Rights
Issuance Date
Type of shares to be issued
upon exercise of stockacquisition rights
Amount paid for stockacquisition rights
Exercise price per share attime of exercise

December 9, 2022
Common stock
Gratis1 yen

Exercise period

From December 17, 2026
To December 16, 2032

Conditions for execution ofstock acquisition rights(Additional notes)

Category

Directorholdings

Number ofstockacquisitionrightsNumber ofshares to beissued upon
exercise ofstock
acquisitionrightsNumber ofholders

Directors who are not the
Audit and Supervisory
Committee members
1,352

135,200

3-3-

Notes:1.

2.

On October 1, 2016, the Company conducted a two-for-one stock split. Accordingly, when exercising subscription
rights after the same date, the number of shares subject to the stock acquisition rights and the value of the assets
per share to be capitalized upon exercise will be adjusted according to the spilit ratio, respectively. (However,the value of assets per share to be contributed upon exercise of the 11th, the 12th, the 13th and the 14th stockacquisition rights will remain at 1 yen.)
On April 1, 2021, the Company conducted a four-for-one stock split. Accordingly, when exercising subscription rights
after the same date, the number of shares subject to the stock acquisition rights and the value of the assets per
share to be capitalized upon exercise will be adjusted according to the spilit ratio, respectively. (However,the value of assets per share to be contributed upon exercise of the 11th, the 12th, the 13th and the 14th stockacquisition rights will remain at 1 yen.)

Additional Notes : Conditions for execution of stock acquisition rights
1.

2.
3.
4.
5.

②

Subject individuals must be a director or an employee of the Company or its subsidiaries when rights are exercised.
However, in consideration of various circumstances, this limitation does not apply when the Board of Directors
approves special cases.
Inheritance of stock acquisition rights shall not be allowed. However, in consideration of various circumstances, thislimitation does not apply when the Board of Directors approves special cases.
Pledging or other disposal of stock acquisition rights is not permitted.
Partial execution of stock acquisition rights is permitted.
In addition to each of the preceding items, the terms governing the exercise of rights shall be as stipulated in thecontract for granting stock acquisition rights to be concluded separately between the Company and the subject
individuals.

Status of stock acquisition rights granted to employees, etc., in consideration of theperformance of duties during the current fiscal year
The 14th Stock Acquisition Rights
Issuance Date

December 9, 2022

Type of shares to be issued upon
exercise of stock acquisition rights

Common stock

Amount paid for stock acquisitionrightsExercise price per share at time of
exercise

Gratis1 yen
From December 17, 2026
To December 16, 2032

Exercise period
Conditions for execution of stockacquisition rights(Additional notes)

Category

Employees of the Company(excluding Directors andExecutive Officers)

Directors of the subsidiaies

Number of stock acquisition rights

6,691

2,222

Number of shares to be issued
upon exercise of stock acquisitionrights669,100

222,200

Number of holders

9430

Additional Notes : Conditions for execution of stock acquisition rights
1.

2.
3.
4.
5.

Subject individuals must be a director or an employee of the Company or its subsidiaries when rights are exercised.
However, in consideration of various circumstances, this limitation does not apply when the Board of Directors
approves special cases.
Inheritance of stock acquisition rights shall not be allowed. However, in consideration of various circumstances, thislimitation does not apply when the Board of Directors approves special cases.
Pledging or other disposal of stock acquisition rights is not permitted.
Partial execution of stock acquisition rights is permitted.
In addition to each of the preceding items, the terms governing the exercise of rights shall be as stipulated in thecontract for granting stock acquisition rights to be concluded separately between the Company and the subject
individuals.

-4-③ Important Matters Concerning the Convertible Bonds (as of September 30, 2023)
Euro-yen DenominatedConvertible Bonds with Subscription
Rights due 2025

Euro-yen DenominatedConvertible Bonds with Subscription
Rights due 2029

Issuance Date

February 1, 2018

November 1, 2022

Number of subscription rights

2,000

4,000

Common stock

Common stock

1,566.30 yen

1,507 yen

Exercise period

From March 5, 2018
To February 5, 2025

From December 1, 2022
To November 2, 2029

Balance of convertible
bonds

20,059 million yen

40,525 million yen

Type of shares to beissued upon exercise ofstock acquisition rights
Exercise price per share attime of exercise

6. Outline of the Liability Limitation Agreement with Directors
The Company has executed an agreement with Directors (excluding Executive Directors) to limit
their liability for damages under Article 423, Paragraph 1 of the Companies Act based on the provisionsof Article 427, Paragraph 1 of the same Act. The upper limit of the compensation for damage specified insaid agreement is equal to the minimum liability set forth in law.
7. Situation of the Accounting Auditor①

Name: Deloitte Touche Tohmatsu LLC②

Amount of Remunerations, etc.
Amount of Remunerations, etc.

Amount of remunerations, etc. paid to the accounting
auditor for the fiscal 2023
The sum of the amounts to be paid by the Company andour subsidiaries to the accounting auditor and otherproperty benefits

65 million yen
172 million yen

Notes:
1.

2.
3.

The audit contract executed between the Company and the accounting auditor does not distinguish between theamount of audit remunerations, etc. for the audit based on the Companies Act and that for the audit based on the
Financial Instruments and Exchange Act, and it is practically impossible to distinguish them. Accordingly, thesum of them was written as the amount of remunerations, etc. for the current fiscal year.
The Company pays the accounting auditor compensation for services other than those stipulated in Article 2,
Paragraph 1 of the Certified Public Accountants Law, such as preparation of comfort letter in English.
The Audit and Supervisory Committee discussed the appropriateness and reasonableness of the results of theaudit by the accounting auditor, the performance of the accounting auditor, and the ground for estimating its
remunerations, and then agreed with the remunerations, etc. of the accounting auditor.

-5-

③

Policy for deciding to dismiss or not to reappoint an accounting auditor
If this is considered necessary, for example, when the performance of an accounting auditor isdefective, the Audit and Supervisory Committee will determine the content of a bill for dismissing or
not reappointing said the accounting auditor, which is to be discussed at a general meeting ofshareholders.
In addition, if an accounting auditor falls under any of the items in Paragraph 1, Article 340 of theCompanies Act, we will dismiss the accounting auditor based on the consent of all auditors. In thiscase, an Audit and Supervisory Committee member selected by the Audit and Supervisory
Committee will report the dismissal of the accounting auditor and the reason for it at the first general
meeting of shareholders after the dismissal.

8. Outline of a System for Securing the Appropriateness of Business Operation and the Status ofOperation of the System①

System for securing the appropriateness of business operation
The following outline the determined contents regarding the system for ensuring that the businessexecution of directors complies with laws, regulations, and the articles of incorporation and thesystem for securing the appropriateness of the business of a joint-stock corporation and thebusiness of a corporate group composed of the joint-stock corporation and its subsidiaries.

1.

Items regarding the storage and management of information on business execution by theCompany’s directors
The board of directors selects a general manager in charge of the storage and management of
information on business execution of directors from among directors, and stores the information on
business execution in writing or with electromagnetic records in accordance with the regulations forhandling documents and confidential information, protecting personal information, and managing
insider information, etc.

2.

Regulations for managing the risk of loss of the Company, and other systems
For the management of the risk of loss, the regulations for emergency response assume andclassify concrete risks, and a system for swift appropriate communication and response to
emergencies. The internal audit division grasps and monitors the risk status in a cross-sectoral
manner in accordance with the regulations for internal audit, and regularly reports the items
regarding risk control to the board of directors.

3.

System for securing the efficient business execution of the Company’s directors
In order to improve the efficiency and speed of the execution by directors, a part of the authority of
the Board of Directors has been delegated to the Corporate Executive Office. The executive officers
in charge set targets for each division. The Corporate Executive Office reviews and approves thetargets, checks progress regularly, and reports the results to the Board of Directors when necessary
to ensure management efficiency.

4.

System for ensuring that the business execution by the Company’s directors and employees
complies with laws, regulations, and the articles of incorporation.
The management section monitors the business execution of directors and employees, and offers
in-house education and training if necessary. In cooperation with the Audit and Supervisory
Committee, the internal audit division grasps the situation of business execution of directors andemployees, regularly audits it, and reports it to the board of directors.

5.

System for securing the appropriateness of business of the Company and a corporate groupcomposed of its parent company and subsidiaries
The board of directors sets numerical goals for the entire corporate group (composed of theCompany and subsidiaries) for the Corporate Executive Office, and delegates the authority andresponsibility for managing risks and developing a system for observing the laws and regulations to
the Corporate Executive Office. The management section promotes and manages the goals in across-sectoral manner. In addition, we establish the regulations for managing affiliated companies todevelop a system for regularly reporting the business performance of our subsidiaries so that each-6-

group company will improve its performance and contribute to the business results of the entire
corporate group. Our subsidiaries are obliged to report specific important items and risk information
to the board of directors of the Company and the Corporate Executive Office in advance, and theimportant items are to be discussed at a meeting of the board of directors. The internal audit division
regularly audits our subsidiaries, and reports the results to the board of directors of the Company.
6.

Items regarding employees for assisting the Audit and Supervisory Committee in their tasks
The Audit and Supervisory Committee can ask the employees belonging to the internal audit division
to give necessary assistance in audit tasks.

7.

Items regarding the independence of employees described in the previous clause from the directorsof the Company, and the securing of the effectiveness of directors serving on the Audit andSupervisory Committee’ instructions toward said employees
The employees who are supposed to assist directors serving on the Audit and Supervisory
Committee in their tasks will follow the instructions from directors serving on the Audit andSupervisory Committee when assisting them. When said employees are replaced, the opinions of
the Audit and Supervisory Committee will be respected,and the Company will ensure theindependence of such employees and the effectiveness of the direction regarding their duties.

8.

System to reporting for directors (excluding directors serving on the Audit and Supervisory
Committee) and employees of the Company and director and/or employee who is reported, to thedirectors serving on the Audit and Supervisory Committee.
Directors, executive officers, the management section, and the internal audit division regularly report
the following important items regarding our corporate group to a full-time member of the Audit andSupervisory Committee, and the full-time member of the Audit and Supervisory Committee submit
reports to the Audit and Supervisory Committee.
i.
Important resolutionsii.
Important matters of business administrationiii.
Items that could cause significant damage to the Company
iv.
State of internal audit and important items regarding risk controlv.
Serious violation of laws, regulations, and the articles of incorporationvi.
Other important matters

9.

System to ensure that those who reported the previous item shall not be treated disadvantageously
for making such reports
The Company has established and disseminated the Internal Reporting Rules to ensure that those
who have reported to Directors who are Audit and Supervisory Comittee Members are not treateddisadvantageously for making such reports.

10. Matters concerning procedures for prepayment or reimbursement of expenses incurred in theexecution of duties by the Audit and Supervisory Committee and other policies concerning thehandling of expenses or reimbursement incurred in the execution of such duties
If an Audit and Supervisory Committee member requests the Company to pay the expenses inadvance or the like based on Article 399-2, Paragraph 4 of the Companies Act, the section in charge
will examine said charging and pay said expenses, etc. swiftly unless it is judged that said
expenses, etc. are unnecessary for conducting said Audit and Supervisory committee member’stasks.
11. System for securing the effective audit of the Audit and Supervisory Committee
The Representative Director exchanges opinions with the Audit and Supervisory Committee on
important management issues and other matters. The Audit and Supervisory Committee canexchange opinions with external specialists such as an attorney or a certified accountant when it isnecessary to conduct its duty.
State of operation of a system for securing the appropriateness of business
The outline of the state of operation of a system for securing the appropriateness of business of theCompany in the current fiscal year is as follows.
②

1.

Regarding the execution of duties by Directors
The company holds a regular meeting of the board of directors once a month and an irregularmeeting of the board of directors when necessary. The board of directors is attended by directors,-7-

independent outside directors, and also directors serving on the Audit and Supervisory committee,
who oversee the decision making about important business execution.
2.

Regarding a risk control system
Directors, the management section, and the persons in charge of compliance of our groupcompanies join hands to strengthen and promote our risk control system, and the regulations forresponding to emergencies assume and classify concrete risks, and develop a system for swift,
appropriate communication and response to emergencies. In accordance with the regulations forinternal audit, the internal audit division grasps and monitors the situation of risks in a cross-sectoral
manner, and regularly reports items related to risk control to the board of directors.

3.

Regarding internal audit
The internal audit division checks whether each section and each group company conduct businessactivities properly in accordance with laws, regulations, the articles of incorporation, social norms,
in-house rules, and guidelines specified by industry associations, and whether appropriate checksystems are functioning in their business flow, by reviewing documents and conducting on-site
investigation in cooperation with the Audit and Supervisory Committee. In addition, the internal audit
division audits multiple sections and each group company every quarter, produces internal audit
reports, and submits them to the board of directors.

4.

Regarding the business execution by the Audit and Supervisory committee members
Three Audit and Supervisory Committee members (including two outside directors) attend important
meetings, such as the board meetings, or the audit the business execution of directors, based on
the audit policy and plans designed by the Audit and Supervisory Committee.
Full-time Audit and Supervisory Committee member has a meeting with the internal audit division
regularly, to receive reports on the situation and results of internal audit, exchange opinions about
internal audit plans, concrete methods for audit, measures for improving business operations, etc.,
and interview directors and employees about situations, review documents, and conduct on-site
investigation, etc. for auditing each section and each group company in cooperation with the internal
audit division.

-8-

Consolidated Financial Report
Consolidated Statements of Changes in Shareholders’ Equity
Fiscal year 2023 (October 1, 2022 to September 30, 2023)[unit: million yen]
Shareholders’ equity
Common stock

Balance at the beginning ofyear
Changes in the year
Issuance of new shares(Exercise of stock acquisitionrights)Cash dividends
Purchase of treasury stock
Change in the parent’s
ownership interest due totransactions with noncontrolling interests
Change in scope of
consolidation
Net income attributable toowners of the parent
Net changes in the year
Total changes of items in theyear
Balance at the end of year

Capitalsurplus

7,239

11,636130130Retainedearnings

119,204

Change in the parent’s
ownership interest due totransactions with noncontrolling interests
Change of scope of
consolidation
Net income attributable toowners of the parent
Net change in the year
Total changes of items in theyear
Balance at the end of year

(1)

138,079

260(7,082)(7,082)
(0)

(0)

451

451
(5)

(5)

5,332

5,332

130

581

(1,756)(0)(1,044)

7,369

12,218117,448(1)

137,034

Accumulated other comprehensive income
Unrealized
Foreign
Total othergain oncurrency
comprehensive
available-fortranslation
incomesale securities
adjustments

Balance at the beginning ofyear
Change in year
Issuance of new shares(Exercise of stock acquisitionrights)Cash dividends
Disposal of treasury stock

Total shareholders’equityTreasury stock

5,887

298

6,185

Stock
acquisitionrights

Noncontrollinginterests

1,747

76,903Total
equity222,915260(7,082)
(0)
451
(5)
5,332
1,308

(106)

1,202

345

8,492

10,040

1,308

(106)

1,202

345

8,492

8,996

7,196

191

7,388

2,092

85,396

231,911

Note: The stated amount is rounded down to 1 million yen or less.

-9-Notes to Consolidated Financial Statements
1. Important Items Forming Basis for Creation of Consolidated Financial Statement(1) Items related to the scope of consolidation① Number of consolidated subsidiaries and names of major consolidated subsidiariesi.
Number of consolidated subsidiaries: 90ii.
Major consolidated subsidiaries
AbemaTV, Inc.
WinTicket, Inc.
CyberZ, Inc.
Cygames, Inc.
Colorful Palette Inc.
Sumzap, Inc.
Applibot, Inc.
CyberAgent Capital, Inc
Makuake, Inc.
REALGATE INC.
Zelvia Co., Ltd.
② Name of major non consolidated subsidiaries
i. Name of major non consolidated subsidiaries
Non applicable
ii. Reasons;
All the non consolidated subsidiaries are excluded from the scope of consolidation due to theirsmall scale and its total net assets, net sales, net income or loss (amount corresponding to theequity interest), and retained earnings (amount corresponding to the equity interest), etc. do nothave a significant impact on the consolidated financial statements.
(2) Items related to the application of the equity method① Number of equity method affiliates which are affiliated companies or non-consolidated subsidiary andnames of major companiesi.
Number of equity method affiliates: 9ii.
Name of major companies:
AWA Co., Ltd.
AbemaNews, Inc.
② Non-consolidated subsidiaries and affiliates excluded from scope of equity method:i. Name of major companies
Non applicable
ii. Reasons;
All the non-consolidated subsidiaries and affiliates which are excluded from scope of equity
method as its impact on the consolidated financial statements is minor and there is little significancein totality,taking into account various factors, such as net income or loss (amount corresponding to
the equity interest) and retained earnings (amount corresponding to the equity interest).
③ Name of non affiliated companies that we own 20% or more, or 50% or less of the voting rights in our
calculation.
i. Name of the companies
Non applicable
ii. Reasons:
They are not categorized as affiliate companies because the purpose of our deals with thosecompanies is not to control the companies via operating, personnel, or financial channels, butaugment investment chances, our business objective.

- 10 -

(3) Matters on the change in scope of consolidation and application of the equity method① The change in the scope of consolidation
From this consolidated fiscal year, the Company will include the following companies in the scopeof consolidation; CA Reskilling Partners, Inc., and three other companies as these firms have been
established, and Nelke Planning co.,ltd. and one other company by the acquisition of shares.
The Company has excluded the following companies in the scope of consolidation; Pontem, Inc.
and nine other companies due to their dissolution, 7gogo,Inc..and four other company due to theabsorption-type of merger.
② The change in the scope of application of equity method
The Company has excluded the following companies from the scope of application of equity
method; CA-JAIC China Internet fund Ⅱ, L.P. due to their dissolution.
(4) Matters on the fiscal year of consolidated subsidiaries
The fiscal year-end of consolidated subsidiaries except eight companies is September 30, the sameas the fiscal year-end. The fiscal year end of the above eight companies is mainly December 31.
To prepare a consolidated financial report, the settlement necessary for making the financial
statements that form the basis of preparation of consolidated financial statements is conducted on
the fiscal year-end.
(5) Matters concerning Accounting Policy① Evaluation standards and methods for important assets
i. Valuation difference on available-for-sale securities (include operational investment securities)
a. Securities other than shares that do not have a market value
We adopt the market value method (valuation differences are treated according to the direct net
assets method, and the cost of securities sold is determined mainly by the moving averagemethod)b. Shares that do not have a market value
We adopt cost method by the moving average method.
In addition, investment in the limited liability investment partnership and similar partnerships(those deemed as marketable securities under Article 2-2 of the Financial Instruments andExchange Law) is calculated based on the financial statements available as of the reporting datedescribed in the partnership agreement.
ii. Evaluation standards and methods for inventories- Products and work-in-progress
We adopt the cost method by individual method (with respect to the balance sheet value, the bookvalue devaluation method based on the decline in profitability)②

Method of depreciation of important depreciable assets

i. Property and equipment
We adopt the straight line method. The useful life of buildings and structures are five (5) to thirtyeight (38) years, five (5) to eight (8) years for tools, instruments and fixtures.
ii. Intangible assets
We adopt the straight line method. For in-house use software, it is based on the anticipatedavailable period (within five (5) years) within the company.

③ Criteria for recording important provisions
i. Allowance for doubtful accounts
To prepare for losses due to bad debts, allowance for doubtful receivables is calculated based onloan loss ratio, for specific claims such as doubtful accounts receivables, we consider collection
possibility individually and record the estimated uncollectible amount.
ii. Provision for long service rewards for employees
To prepare the rewards for long service of employees, we estimated payment based on internal
regulations.
④

Criteria for recording important revenue and expense
The details of the main performance obligations in our corporate group's main businesses and theusual times of satisfaction of such performance obligations (usual time of revenue recognition) are as
follows.
- 11 -

In addition, for transactions that are determined to be more in the nature of an personal, theCompany recognizes as revenue the gross amount of consideration received from the customer. On
the other hand, for transactions in which the Company does not control the goods or services in theprovision of goods or services to customers and is determined to be an agent, the Company
recognizes as revenue the total consideration received from the customer less any related costs or
the amount of fees. The amount of consideration promised is generally received within one year anddoes not include a significant financial component.
i. Media Business
Revenues in the media business consist primarily of advertising and billing revenues.
The primary performance obligation in advertising revenues is to distribute customers'
advertisements on the Company's media. Such performance obligation is satisfied over the termof the advertisement and therefore revenue is recognized over the term of the advertisement.
The primary performance obligation in billing revenues is to provide services to paying subscribers.
The Company recognizes revenue based on the contract period because such performanceobligations are satisfied over the contract period.
ii. Internet Advertising Business
The main performance obligation in the Internet advertising business is to place advertisementsin the media based on the contractual terms and conditions agreed to with the customer. The
performance obligation is satisfied over the term of the advertizement, and therefore the Company
recognizes revenue in accordance with the terms of each contract with the customer.
iii. Game Business
The main performance obligation in the game business is to maintain an environment in whichusers can use items, etc. that they acquire using in-game currency.
The performance obligation is satisfied based on the use of items by users, and therefore revenue
is recognized based on the estimated period of the performance obligation.
⑤ Other important items to create the consolidated financial report.
i.
Items concerning amortization of goodwill
We judge for each individual case and amortized in a reasonable number of years within twenty(20) years. If the amount is insignificant, it is fully amortized when it occurs.
ii.
Application of the group tax sharing system
We adopt the group tax sharing system.
2. Changes in Accounting Policies(Application of Implementation Guidance on Accounting Standard for Fair Value Measurement)
The Company has applied the “Implementation Guidance on Accounting Standard for Fair Value
Measurement” (ASBJ Statement No. 31, June 17, 2021) and other standards from the beginning of thecurrent fiscal year. The new accounting policy will be applied in the future, in line with the transitional
treatment specified in Paragraph 27-2 of the Implementation Guidance on Accounting Standard for
Fair Value Measurement. There is no impact on the quarterly consolidated financial statements.
3 . Additional Information(Adoption of the Practical Solution on the Accounting and Disclosure Under the Group Tax Sharing
System)The Company and some of its domestic consolidated subsidiaries have made the transition from theconsolidated corporate tax system to the group tax sharing system from the current fiscal year.
Accordingly, we disclose corporate tax, local corporate tax and tax effect accounting with applying thePractical Solution on the Accounting and Disclosure Under the Group Tax Sharing System (PITF No.42
issued August 12, 2021) which set forth the accounting treatment. In addition, based on PITF No.42
Paragraph 32 Item (1), there is no impact on the quarterly consolidated financial statements.
4 . Changes to Indication Methods(Consolidated Profit and Loss Statement)(1) Subsidy income (46 million yen in this fiscal year) presented separately in non-operating income
section in the previous fiscal year, has been reclassified and aggregated into "other" in the current
fiscal year due to decrease materiality.
(2) Foreign exchange losses (9 million yen in the previous fiscal year) and depreciation (56 million yen in
the previous fiscal year) , which were included in "other" in non-operating expenses section in theprevious fiscal year, have been presented separately in the current fiscal year due to increasedmateriality.
- 12 -

(3) Gain on sales of non-current assets (0 million yen in this fiscal year) presented separately inextraordinary gain section in the previous fiscal year, has been reclassified and aggregated into"other" in the current fiscal year due to decrease materiality.
5. Notes on Consolidated Statement of Balance Sheet(1) Trade notes and accounts receivable and contract assets arising from contracts with customers are
as follows.
Trade notes
986 million yen
Accounts receivable
82,293 million yen
Contract assets
92 million yen(2) Collateral Assets① Assets pledged as collateral (book value)
Inventories
755 million yen
Buildings and structures, net
915 million yen
Others2,228 million yen
Total

3,900 million yen② Secured liabilities (book value)
Short-term bank loans
Current portion of long-term bank loans
Long-term bank loans

1,800 million yen
146 million yen
1,639 million yen

Total

3,586 million yen(3)

Accumulated depreciation of property and equipment
Accumulated depreciation of property and equipment(4)

Contingent liability
Cygames Inc. (hereinafter referred to as "Cygames"), a consolidated subsidiary of the Company, hasbeen sued for patent infringement by Konami Digital Entertainment Co., Ltd. (hereinafter referred toas "Konami Digital Entertainment") on March 31, 2023 (date of filing of the complaint: May 10, 2023).
The details are as follows.

17,016 million yen①

Cause and background of the lawsuit
Cygames has been in discussions with Konami Digital Entertainment regarding patent rights forcertain parts of the game system and program of "Uma Musume Pretty Derby" operated byCygames. However, Cygames’s opinion has not accepted by Konami Digital Entertainment,
which resulted in the lawsuit being filed.

②

Outline of the plaintiff
Name: Konami Digital Entertainment Co., Ltd.
Location: 1-11-1, Ginza, Chuo-ku, Tokyo, Japan
Representative: Hideki Hayakawa, Representative Director, President③

Details of the claim
ⅰThe nature of the claim- Claim for damages due to patent infringement by “Uma Musume Pretty Derby” operated byCygames.
- Request for an injunction against the production, usage, and provision throughtelecommunication lines of “Uma Musume Pretty Derby.”
ⅱ The amount of money claimed for damages and others and its subject matter
Amount claimed: Four (4) billion yen and the amount of the relevant delay charges
Subject matter in case: “Uma Musume Pretty Derby”④

Future Outlook
The Company believes that there is no such fact that “Uma Musume Pretty Derby” has infringed
the patents of Konami Digital Entertainment. Therefore, we will clarify our legality through the
responses to the case.
- 13 -

6. Notes on Consolidated Statement of Changes in Shareholders’ Equity(1) Total number of outstanding shares as of the current fiscal year-end
Common stock
506,191,200 shares(2) Items concerning surplus allocations① Amount of dividend payments
Items related to dividends determined by resolution at the 25th Annual General Meeting of
Shareholders held on December 9, 2022.
Resolution

Type of
Stock

Dividend
Amount per
Share (yen)Record Date

Effective Date

December 9, 2022
Shareholders’meeting

Total Dividend
Amount (Millionsof yen)Common
stock

7,082

14

September 30,
2022

December 12,
2022②

Dividends for which the record date is within the current consolidated fiscal year but the effective
date falls in the following consolidated fiscal year
At the 26th Annual General Meeting of Shareholders to be held on December 8, 2023, the following
proposal will be made.
Type of
Stock

Total
Dividend
Amount(Millionsof yen)Dividend
resource

Dividend
Amount per
Share (yen)Record Date

Effective Date

Common
stock

7,592

Retainedearnings

15

September 30,
2023

December 11,
2023

Resolution
December 8, 2023
Shareholders’meeting(3) Items concerning stock acquisition rights as of the end of this consolidated fiscal year
The 11th Stock
Acquisition Rights

The 12th Stock
Acquisition Rights

October 8, 2015

December 19, 2018

Common stock

Common stock

283,200

582,000

Issuance date
Type of shares to beissuedNumber of shares tobe issued

Subscription

RightsonEuro-yen

Subscription

RightsonEuro-yendenominated convertible bonds due

denominated convertible bonds due

2025

2029

Issuance dateFebruary 1, 2018

November 1, 2022

Type of shares to be issued

Common stock

Common stock

Number of shares to be issued

12,768,945

26,542,800

7. Notes Regarding Financial Instruments(1) Items regarding the situations of financial instruments①
Policy for financial instruments
Our corporate group offers comprehensive internet services to internet users and advertisers
through the business of media, Internet advertisement and games. For bearing costs of these services,
we signed contracts for overdraft facility and commitment lines with multiple financial institutions to
prepare for future demand for funds in addition to the maintenance of liquidity and the issuance of
convertible bonds in hand.
Contents and risks of financial instruments
Notes and accounts receivable, which are operating receivables, are exposed to the credit risk ofcustomers. Operational investment securities and investment securities are mainly composed ofshares, bonds, and investments in associations, which are held for the purposes of net investment and②- 14 -

business promotion. These are exposed to the credit risk of each issuer, the fluctuation risks of interest
rates and market prices. The payment deadlines for all of accounts payable, which are operating
payables, are within one year.
③ Risk control systems for financial instruments
i. Management of credit risks (risks regarding business partners’ failure to fulfill their duties in acontract)
Our corporate group examines new business partners, etc. and manages credit in accordancewith the guidelines for them. In accordance with the accounting regulations, we manage thedeadlines and remaining amounts of operating receivables for each transaction, and monitor thesituations of major business partners to early grasp and reduce uncollectible accounts caused by theworsening of their financial standing, in cooperation with the management and accounting divisionsof each business department.
ii. Management of market risks (fluctuation risks of exchange rates, interest rates, etc.)
As for operating investment securities and investment securities, we regularly grasp current prices
and the financial positions of issuers (business partners), and the fair value of listed shares for eachquarter.
④ Supplementary explanation of items regarding the fair value, etc. of financial instruments
The fair value of financial instruments include those based on market prices and those calculated
rationally when there are no market prices. Since fluctuation factors are taken into account whencalculating said prices, said prices may change through the adoption of different assumptions.
(2) Items regarding the fair value, etc. of financial instruments
The following table shows the amount posted in the consolidated balance sheet, fair value,and theirdifference as of September 30, 2023.
[unit: million yen]

(1) Operating investment securities

Amount posted in the
consolidated balance
sheet*
5,872

Fair value*

Difference

5,872

－

(2) Investment securities
Other securities

29,93429,934－

Shares of subsidiaries and affiliates

1,490

10,272

8,781

Total assets(1) Convertible bonds(2) Long-term bank loans(including Current portion of long-term bankloans)
Total liabilities

37,29846,079（60,584）(44,239)（58,078）(43,850)

8,781(2,506)(389)（104,824）（101,928）(2,896)*: The parenthesis “( )” represents the amount posted in the section of liabilities.
(Note 1) "Cash and deposits," "Trade notes and accounts receivable and contract assets," "Tradeaccounts payable" "Other payables," "Income taxes payable," "short-term bank loans, " are omitted
because these are cash, and their fair value is nearly equal to book values due to be all settled in a shortperiod of time.
(Note 2) Shares that do not have a market value are not included "(1)Operating investment securities,"and "(2)Investment securities,". The amounts of these financial assets in the consolidated balance
sheets are as follows.
[unit: million yen]
Category

Amount posted in the consolidated balance sheet
13,927

Unlisted shares, etc- 15 -

(Note 3) Investments in partnerships and other similar entities in which the Company's ownership interestis recorded on the consolidated balance sheets at a net amount are omitted. The amounts of suchfinancial assets recognized in the consolidated balance sheets are as follows.
[unit: million yen]
Category

Amount posted in the consolidated balance sheet
4,558

Contributions to investment partnership, etc(3) Items regarding the breakdown, etc of the fair value of financial instruments by levels
The fair value of financial instruments is classified into the following three levels based on theobservability and materiality of the inputs used to calculate fair value.
Level 1 fair value: Fair value calculated based on quoted market prices for assets or liabilities for whichsuch fair value is calculated that are formed in an active market among the inputs forthe calculation of observable fair value.
Level 2 fair value: Fair value calculated using inputs other than Level 1 inputs for the calculation ofobservable fair value.
Level 3 fair value: Fair value calculated using inputs for calculating unobservable fair value.
When multiple inputs that have a significant impact on the fair value calculation are used, the fair value isclassified into the level with the lowest priority in the fair value calculation among the levels to whichthose inputs belong.
① Financial instruments accounted on the consolidated balance sheet at fair value[unit: million yen]
Category

Fair value
Level 1

Level 2

Level 3

Total

Operating investment securities
5,827

－

－

5.872

Shares29,934－－29,934

Total assets

35,807－－35,807

SharesInvestment securities
Other securities② Financial instruments other than accounted on the consolidated balance sheet at fair value[unit: million yen]
Category
Investment securities
Shares of subsidiaries
and affiliates
SharesTotal assets
Convertible bonds
Long-term bank loans(including Current portion of longterm bank loans)
Total liabilities

Fair value
Level 1

Level 2

Level 3

Total

10,272－－

10,272

10,272－

10,272－－－
58,07843,850－－58,07843,850－101,928－

101,928(Note) Explanation of valuation techniques used in the calculation of fair value and inputs related to thecalculation of fair value.
i. Operating investment securities
Regarding of Shares that have a market value, the market price as of the end of the current fiscal
year is used as fair value and classified as Level 1 based on market activity.

- 16 -

ii.

Investment securities
Regarding of Shares that have a market value, the market price as of the end of the current fiscal
year is used as fair value and classified as Level 1 based on market activity.
iii. Shares of subsidiaries and affiliates
Regarding of Shares that have a market value, the market price as of the end of the current fiscal
year is used as fair value and classified as Level 1 based on market activity.
iv. Convertible bonds
Regarding of Convertible bonds issued by the Company, are classified as Level 2, which is basedon the prices quoted by the securities companies.
v. Long-term bank loans
Regarding of Long-term bank loans, are classified as Level 2, which is calculated based on thepresent value of the total principal and interest discounted by an appropriate index such as the yieldon government bonds plus a credit spread.
(4) Monetary claims and securities with maturity that are to be amortized after the consolidated fiscal
year-end[unit: million yen]Over 1 year
within 5 years

Within 1 year

Over 5 years
within 10 years

Over 10 years

Cash and deposits

199,579－－－

Trade notes and accounts
receivable and contract assets

83,372－－－(5) Expected repayment of corporate bonds, long-term loans payable, lease obligations and otherinterest-bearing debts after the consolidated fiscal year-end[unit: million yen]Over 1 year
within 5 years

Within 1 year
Convertible bonds－

Long-term bank loans

883

Over 5 years
within 10 years

20,00040,00041,903

988

Over 10 years－463

8. Notes regarding revenue recognition
1 Information that disaggregate revenue from contracts with customers[unit: million yen]
Reportable segment

Investment
Other
Development Businesses
Business

Media
Business

Internet
Advertisement
Business

Game
Business

Revenue from contracts withcustomers

132,384

381,206

178,618

3,198

24,799720,207

Sales to external customers

132,384

381,206

178,618

3,198

24,799720,207

Total(Note) The amount of revenues other than revenues from contracts with customers is not presented
separately from revenues from contracts with customers, because it is not material.
2 Information that provides a basis for understanding revenue from contracts with customers
Information that provides a basis for understanding revenue from contracts with customers is included
in "Notes to Consolidated Financial Statements (Important Items Forming Basis for Creation ofConsolidated Financial Statement) (5) Matters concerning Accounting Policy ④ Criteria for recording
important revenue and expense".
3 Information about the relationship between the satisfaction of performance obligations undercontracts with customers and cash flows from such contracts, and the amount and timing of revenue- 17 -

from contracts with customers that existed at the end of the current fiscal year, expected to berecognized in the following fiscal year.
(1) Balance of contract assets and contract liabilities, etc.
[unit: million yen]This fiscal year
Receivables from contracts with customers(beginning balance)

72,363

Receivables from contracts with customers(ending balance)

83,279Contract assets(beginning balance)

8

Contract assets(ending balance)

92

Contract liabilities(beginning balance)

13,948Contract liabilities(ending balance)

15,847(2) Transaction price allocated to remaining performance obligations
Our corporate group does not have any significant transactions with an expected contract term
exceeding one year. In addition, there are no material amounts of consideration from contracts withcustomers, not included in the transaction price.
9. Notes Regarding Per-Share Information(1)
Equity per share(2)
Basic earnings per share

285.31 yen
10.53 yen

10. Notes Regarding Important Subsequent Events
No applicable items.

- 18 -

Non-consolidated Financial ReportNon-consolidated Statements of Changes in Shareholders’ Equity
Fiscal year 2023 (October 1, 2022 to September 30, 2023)[unit: million yen]
Shareholders’ equity
Capital surplus
Commonstock

Balance at the beginning ofyear
Changes in the year
Issuance of new shares(Exercise of stockacquisition rights)
Cash dividends
Purchase of treasure stock
Net income
Net changes in the year
Total changes of items inthe year
Balance at the end of year

7,239

2,325

130

130

130

130

7,369

2,456

Shareholders’ equity
Treasurystock

Balance at the
beginning of year
Change in year
Issuance of newshares(Exercise ofstock acquisitionrights)Cash dividends
Purchase oftreasury stock
Net income
Net change inthe year
Total changes of
items in the year
Balance at theend of year

(1)

(0)

Other
capitalsurplusCapitalreserve

Retained earnings
Total capitalsurplus

Other retained
earnings
Retainedearnings
carried forward

3,259

18,15818,158(7,082)(7,082)

7,292

7,292

130

209

209

3,389

18,36818,368933

Total
Retainedearnings

130933

Valuation and Translation Adjustments

Totalshareholders’equity28,655

Unrealized
gain onavailablefor-salesecurities

Foreigncurrencytranslation
adjustments

Total
ValuationandTranslation
Adjustments

5,705

251

5,957

Stock
acquisitionrights

1,693

Total
equity36,306260

260(7,082)(7,082)

(0)

(0)

7,292

7,292
560

(144)

416

344

760

(0)

469

560

(144)

416

344

1,230

(1)

29,125

6,266

107

6,373

2,038

37,536

Note: The stated amount is rounded down to 1 million yen or less.

- 19 -

Notes to non-consolidated financial statements
1. Notes Concerning Important Accounting Policy(1) Evaluation standards and methods for assets① Investments in subsidiaries and associated companies
We adopt cost method by the moving average method.
② Valuation difference on available-for-sale securities (include operational investment securities)
i. Securities other than shares that do not have market value
We adopt the market value method (valuation differences are treated according to the direct net
assets method, and the cost of securities sold is determined mainly by the moving-average method )ii. Shares that do not have a market value
We adopt cost method by the moving average method.
In addition, investment in the limited liability investment partnership and similar partnerships (thosedeemed as marketable securities under Article 2-2 of the Financial Instruments and Exchange Law)is calculated based on the financial statements available as of the reporting date described in thepartnership agreement.
③ Evaluation standards and methods for inventories- Products and work-in-progress
We adopt the cost method by individual method (with respect to the balance sheet value, the bookvalue devaluation method based on the decline in profitability)(2) Method of depreciation of non-current assets① Property and equipment
We adopt the straight line method. The useful life of buildings is five (5) to fifteen (15) years, five (5)to eight (8) years for tools, instruments and fixtures.
② Intangible assets
We adopt the straight line method. For in-house use software, it is based on the anticipated available
period (within five (5) years) within the company.

(3) Criteria for recording provisions① Allowance for doubtful accounts
To prepare for losses due to bad debts, allowance for doubtful receivables is calculated based onloan loss ratio, for specific claims such as doubtful accounts receivables, we consider collection
possibility individually and record the estimated uncollectible amount.
② Provision for long service rewards for employees
To prepare the rewards for long service of employees, we estimated payment based on internal
regulations.
(4) Criteria for recording revenue and expense
The details of the main performance obligations in our company's main businesses and the usual
times of satisfaction of such performance obligations (usual time of revenue recognition) are as follows.
In addition, for transactions that are determined to be more in the nature of an personal, theCompany recognizes as revenue the gross amount of consideration received from the customer. On
the other hand, for transactions in which the Company does not control the goods or services in theprovision of goods or services to customers and is determined to be an agent, the Company
recognizes as revenue the total consideration received from the customer less any related costs or
the amount of fees. The amount of consideration promised is generally received within one year anddoes not include a significant financial component.
① Media Business
The primary performance obligation in media business is to distribute customers' advertisementson the Company's media.Such performance obligation is satisfied over the term of theadvertisement and therefore revenue is recognized over the term of the advertisement.
② Internet Advertising Business
The main performance obligation in the Internet advertising business is to place advertisementsin the media based on the contractual terms and conditions agreed to with the customer. The
performance obligation is satisfied over the term of the advertisement, and therefore the Company
recognizes revenue in accordance with the terms of each contract with the customer.

(5) Other important items to create the consolidated financial report.
- 20 -

① Application of the group tax sharing system
We adopt the group tax sharing system.
2. Changes in Accounting Policies(Application of Implementation Guidance on Accounting Standard for Fair Value Measurement)
The Company has applied the “Implementation Guidance on Accounting Standard for Fair Value
Measurement” (ASBJ Statement No. 31, June 17, 2021) and other standards from the beginning of thecurrent fiscal year. The new accounting policy will be applied in the future, in line with the transitional
treatment specified in Paragraph 27-2 of the Implementation Guidance on Accounting Standard for
Fair Value Measurement. There is no impact on the quarterly consolidated financial statements.
3. Notes Regarding Accounting Estimates.
1. Allowance for doubtful accounts for loans to affiliates(1) Amount recorded in the financial statements for the current fiscal year
Long-term loans receivable to subsidiaries and affiliates
151,228 million yen
Allowance for doubtful accounts for long-term loans
to subsidiaries and affiliates
94,505 million yen(2) Information about the nature of significant accounting estimates for identified items
The Company records allowance for doubtful accounts for loans to subsidiaries and affiliates asnecessary, taking into consideration their individual financial conditions and operating results. The
primary assumptions used in these evaluations are the business plans and growth of each subsidiaries
and affiliates, which reflect management's assessment of future trends in the relevant industry and are
based on historical data from both external and internal sources. The financial position and operating
results of subsidiaries and affiliates may affect the amount of the allowance for doubtful accounts inthe financial statements for the following fiscal year.
4. Changes to Indication Methods
No applicable items.
5. Notes Regarding Non-consolidated Balance Sheet
1. Accumulated depreciation of Property and equipment
6,909 million yen
2. Monetary claims and obligations to subsidiaries and affiliates (excluding presented separately) are as
follows;
Short-term monetary claim
9,946 million yen
Short-term monetary obligations
4,559 million yen
6. Notes to Non-consolidated Statement of Income
Transactions with subsidiaries and affiliates are as follows
Total amount of transactions by operating transactions
Net sales
64,750 million yen
Cost of sales
21,031 million yen
Selling, general and administrative expenses
12,238 million yen
Total amount of non-operating transactions
5,003 million yen
7. Notes Regarding Non-consolidated Statement of Changes in Equity
Number of treasury stock at the end of the current fiscal year
Common stock
1,040 shares- 21 -

8. Notes Regarding Tax Effect Accounting
The detail of deferred tax assets and deferred tax liabilities by main cause
Deferred tax assets
Loss on valuation of investment securities
Allowance for doubtful receivables
Depreciation on software
Loss on valuation of stocks of subsidiaries and affiliates
Other payables
Enterprise tax payable
Provision for long service rewards for employees

678 million yen
28,952 million yen
493 million yen
1,214 million yen
150 million yen
49 million yen
796 million yen

Stock-based compensation expense
Other
Sub-total
Valuation Allowance

624 million yen
1,186 million yen
34,146 million yen- 30,295 million yen

Total deferred tax assets
Deferred tax liabilities
Unrealized gain(loss) on available-for-sale securities
Asset retirement obligation
Total deferred tax liabilities
Total Deferred tax assets (liabilities)

3,851 million yen- 2,577 million yen- 207 million yen- 2,785 million yen
1,065 million yen

9. Notes Concerning Transactions with Related Parties(1) Parent company and major shareholders (companies only) of the Company
No applicable items.
(2) Subsidiaries and affiliated companies of the Company
Type

Company nameAbemaTV, Inc.

Ratio of voting
rights held(ownership)(%)(Owned)Direct: 55.2

Relationshipwith related
party

Concurrent
directorpostings, etc.

Subsidiary
Applibot, Inc.

AWA, Co., Ltd.

(Owned)Direct: 100

Concurrent
directorpostings, etc.

(Owned)Direct: 48.5

Concurrent
directorpostings, etc.

(Owned)Direct: 50.0

Concurrent
directorpostings, etc.

AffiliatedCompany
AbemaNews, Inc.

Transaction
details(Note 1)
Lending offunds

Transaction
amount(Millions ofyen)Classification

Year-endbalance(Millionsof yen)Affiliate company
19,000 Long-term loan
(Note 2)

135,800

Receipt ofinterest

409

－

－

Lending of
funds

2,800

Affiliate company
Long-term loan

5,540

Receipt ofinterest

14－－

Lending offunds－ Long-term loan

Receipt ofinterest

16－－

Lending of
funds

200

Affiliate company
Long-term loan

4,400

Receipt ofinterest

14－－

Affiliate company(Note 3)Note 1: Lending of funds is determined rationally considering market interest rates.
Note 2: Allowance for doubtful accounts of 90,000 million yen was recorded in the current fiscal year.
Note 3: Allowance for doubtful accounts of 3,000 million yen was recorded in the current fiscal year.

- 22 -

3,000

(3) Company directors and major shareholders (individuals only)
No applicable items.
10. Notes Regarding Revenue Recognition
The same information regarding to the basis for understanding revenue from contracts with customers ispresented in the "Notes to Revenue Recognition" in the Notes to Consolidated Financial Statements in the
consolidated financial statements. Therefore, notes related to such information have been omitted.
11. Notes Regarding Per Share Information(1) Equity per share(2) Basic earnings per share

70.12 yen
14.41 yen

12. Significant Subsequent Events
No applicable items.

- 23 -