To our Shareholders

Internet disclosure related to the Notice of the
15th Ordinary General Meeting of Shareholders

June 5, 2019
CYBERDYNE, INC.

Table of contents

Business Report
II Matters regarding the Company shares
3. Matters regarding Stock Acquisition Rights................................................................................ 2

VII System to ensure the properness of the business and actual ......................................... 3
operation of the system

Consolidated financial statements
Consolidated statement of changes in equity and notes to consolidated financial statements .................... 8

Non-consolidated financial statements
Statement of changes in shareholders’ equity and notes to non-consolidated financial statements ............ 23

The matters mentioned above are deemed to have been provided to all shareholders through disclosure via the interneton the Company website (https://www.cyberdyne.jp/english/company/IR.html) pursuant to the provisions of laws andregulations and Article 22 of the Company’s Articles of Incorporation.

1

Business Report
II Matters regarding the Company shares
3. Matters regarding the Stock Acquisition Rights(i) Status of the Stock Acquisition Rights issued to the CYBERDYNE’s Members of theBoard of Directors as remuneration for the performance of their duties
No items to report(ii) Status of the Stock Acquisition Rights issued to the CYBERDYNE’s employees asremuneration for the performance of their duties
No items to report(iii) Other important matters regarding the Stock Acquisition Rights
2015 1st Series Stock Options of CYBERDYNE, INC. / 2016 1st Series Stock Optionsof CYBERDYNE, INC. / 2017 1st Series Stock option of CYBERDYNE, INC.
Name
(Date of resolution)2015 1st Series Stock Option of
CYBERDYNE, INC.
(Resolved on July 28, 2015)2016 1st Series Stock Option of
CYBERDYNE, INC.
(Resolved on May 24, 2016)2017 1st Series Stock Option of
CYBERDYNE, INC.
(Resolved on July 25, 2017)

Number of Stock Acquisition Rights

78 units

46 units

105 units

Class and number of shares coveredby the Stock Option

Common Share(100 Common Shares constitute 1 share unit)
7,800 shares

Common Share(100 Common Shares constitute 1 share unit)
4,600 shares

Common Share(100 Common Shares constitute 1 share unit)
10,500 shares

Gratis

Gratis

Gratis¥180,600 per unit(¥1,806 per share)¥306,000 per unit(¥3,060 per share)¥178,800 per unit(¥1,788 per share)

Amount to be paid in to obtain the
Stock Option
Amount to be paid in upon exercise of
the Stock Option
Exercise period

From July 29, 2017 to July 28, 2025

From May 25, 2018 to May 24, 2026

From July 26, 2019 to July 25, 2027

Issue price of shares upon exerciseof the Stock Options and increase ofstated capital per share

Issue price per share¥1,806
Increase of stated capital per share¥903

Issue price per share¥3,060
Increase of stated capital per share ¥1,530

Issue price per share¥1,788
Increase of stated capital per share¥894

Conditions on exercise of the Stock
Options(Refer to the note below)(Refer to the note below)(Refer to the note below)

1 external consultant

1 external consultant

1 external consultant

Allottee(Note)
Condition on exercise of Stock Option are stated below.
- In cases where holders of the Stock Option waive the Stock Option, such Stock Options may not be exercised.

2VII System to ensure the appropriateness of business operations andimplementation status of the system

1. System to ensure the appropriateness of business operations
The Company resolved the system to ensure the appropriateness of business operations of
the Members of the Board of Directors in compliance with laws, regulations and Articles ofIncorporation and the structure to ensure the appropriateness of other business as below at theBoard of Directors’ Meeting.
(i) Systems to ensure that Members of the Board of Directors and employees of
CYBERDYNE, INC. (the “Company”) and its subsidiaries (collectively referred to as
the “Group”) perform their duties in accordance with laws, regulations and the Articles
of Incorporation
The Company shall establish compliance-related internal regulations embodying theCompany Code of Conduct, for the Group’s Members of the Board of Directors andemployees to ensure adherence to laws, regulations, the Articles of Incorporation and theinternal regulations.
A designated Member of the Board of Directors of the Company shall have crossorganizational control over the Group’s compliance initiatives. The designated Members of
the Board of Directors shall disseminate the spirit of compliance to Members of the Board of
Directors and employees of the Group to identify and solve problems.
The Company shall establish the Affiliated Company Management Policy and, inconformity with that, appoint Members of the Board of Directors and, if necessary,
Members of Audit and Supervisory Board of subsidiaries, approve their important mattersand take up part of their administrative works. Consequently the Company shall ensure
the appropriateness of the affiliated companies’ work pursuant to the Affiliated Company
Management Policy.
The Company shall establish the Internal Audit Office who will work directly under
the Company CEO. The Internal Audit Office shall conduct internal audits in accordancewith the Internal Audit Policy and the Affiliated Company Management Policy to checkthe compliance status with laws, regulations, the Articles of Incorporation, and internal
regulations and monitor the overall risk management status. Results of the internal audits
shall be reported to the Company CEO, the Audit and Supervisory Board, and the Board of
Directors.
The Company shall establish and operate the Hotline System Policy as a means for
employees to directly provide information about legally suspicious behaviors. The method ofproviding information by means of oral communication, e-mail, chat and the opinion boxes
shall be the subject of the compliance hotline protocol.

3

(ii) System to store and manage information related to the execution of duties by theCompany’s Members of the Board of Directors
The Company shall establish the Document Management Policy which states the method ofstoring and managing information related to the execution of duties. Pursuant to the law andthis protocol, the information related to the execution of duties shall be recorded and storedin paper or electronic media.
This information shall always be accessible by Members of the Board of Directors andMembers of Audit and Supervisory Board.
(iii) Policies, procedures and other systems of the Company and the Group to manage therisk of losses
In order to strengthen the risk management structure of the Group, the designated Member ofthe Board of Directors shall put a relevant operating unit in charge of each risk category andeach operating unit in charge is to define risk scopes and profiles, and create self evaluation
policies and guidelines. The Member of the Board of Directors in charge of finance shallmonitor risks across the organization and address company-wide risks. When a new riskarises, the Company CEO shall quickly appoint a Member of the Board of Directors or Headof an operating unit in charge of handling such risks.
(iv) System of the Group to ensure the efficient execution of duties by Members of the Boardof Directors of the Company and the GroupAs a system to ensure the efficient execution of duties by Members of the Board of Directors,
The Board of Directors shall meet once a month and extraordinary meetings of the Board of
Directors shall be conducted whenever necessary.
Regarding the execution status of matters resolved by the meeting of the Board of
Directors, each in-charge Member of the Board of Directors or Head of an operating unit
shall report on a regular basis and Audit and Supervisory Board shall perform audits.
The Company shall establish medium-term business policies and, if necessary, update themto cope with the changes in the business environment. The status of business performance inthat regard shall be reported to the Board of Directors’ Meeting whenever necessary.
The Company shall also establish the Affiliated Company Management Policy in orderto manage the subsidiaries under the related units of the Company so that Members of theBoard of Directors of the subsidiaries can execute their duties efficiently.
(v) System to ensure reporting on the performance of duties by subsidiaries’ Member of theBoard of Directors to the Company
The Company shall establish the Affiliated Company Management Policy and thesubsidiaries shall report to the Company’s units in charge of managing them where necessary
with regard to the status of their duties.
45(vi) Matters regarding employees who assist Audit and Supervisory Board with thefulfilment of its duties
When the Audit and Supervisory Board requests assignment of staff to assist with its duties,
the Board of Directors may designate the appropriate employees who shall serve as assistant
employees or as employees who also hold a post as an assistant upon consulting with Audit
and Supervisory Board.
During the assistance period, the authority over the designated employees shall bedelegated to the Audit and Supervisory Board, and the employees shall not be subject to thechain of command of the directors. Any performance evaluation and changes in the relevant
personnel providing assistance shall require the consent of the Audit and Supervisory Board.
(vii) System for Members of the Board of Directors and employees of the Company toreport to the Audit and Supervisory Board, and a system for Members of the Board of
Directors and employees of the subsidiaries, or the Company’s personnel who received
reports from Members of the Board of Directors and employees of the subsidiaries, toreport to the Audit and Supervisory Board of the Company
The Members of the Board of Directors and employees of the Company as well as theMembers of the Board of Directors and employees of the subsidiaries shall report any
significant matters that is against the law or the Articles of Incorporation and matters that areconsidered dishonest acts and matters that may have a significant impact on the Company,
to the Members of the Audit and Supervisory Board immediately. In addition, if a Memberof the Audit and Supervisory Board asks for a report from the Members of the Board of
Directors or employees of the Group pursuant to the law, Auditing Standards or Auditor’s
Meeting Rules established by the Audit and Supervisory Board, the relevant Members of
the Board of Directors or employees in concern shall report promptly. In order to improve
comprehensiveness of the report regarding any significant matters which are against thelaw or the Articles of Incorporation, matters that are considered dishonest acts, and mattersthat may have a significant impact on the Company, Members of the Board of Directors andemployees of the Company as well as Members of the Board of Directors and employees ofthe subsidiaries shall endeavor to conduct hearing and gather information from the reports
stated in this clause and matters stated in Internal Audits, hotlines and Accounting Audits.
Pursuant to the Hotline System Policy, if matters that may violate the law or corporate
compliance in the Group are found, they shall be reported to the Board of Directors by the
Designated Member of the Board of Director in charge of compliance. Furthermore, thecontents reported and the research results shall be reported to the full-time Member of the
Audit and Supervisory Board.
The Internal Audit Office of the Company shall report the status of the internal audit to
Audit and Supervisory Board Members. Furthermore, the director in charge of complianceshall report the status regarding compliance to Audit and Supervisory Board when necessary.

(viii) System to ensure that the person who made reports to a Member of Audit andSupervisory Board Member will not be put in a disadvantageous position
The Company shall not conduct any treatment that puts a person in a disadvantageous
position because of his/her report made to a Audit and Supervisory Board Member.
(ix) Matters regarding the Company policy of processing auditing fees
If Member of the Audit and Supervisory Board requests a payment required in accordancewith the execution of their duty in advance or to be reimbursed, with the exception of cases
where such a payment is recognized to be completely unnecessary for the execution of theirduty, it shall be paid promptly upon request.
(x) Other systems to ensure the effective execution of audits by Members of the Audit andSupervisory Board of the Company
Members of the Board of Directors and employees of the Company and the subsidiaries
shall comply with hearing or visitation and other methods of examination by Members of the
Audit and Supervisory Board in order to secure the effectiveness of the audits.
The Company shall provide enough opportunities for Members of the Audit andSupervisory Board to exchange opinions with Members of the Board of Directors,
Accounting Auditors and any other personnel required to appropriately execute the duty as
auditors.
Upon request of Members of the Audit and Supervisory Board, the Company shall also
provide enough opportunities for Members of the Audit and Supervisory Board to coordinate
with the subsidiaries’ Members of the Audit and Supervisory Board and to gather informationfrom employees of the subsidiaries.

62. Implementation status of the systems to ensure appropriateness of business operations
The Group established and implemented the aforementioned systems. Notable actions conductedwithin this fiscal year, which are thought to be important with regard to internal control, are statedbelow.
(i) Corporate Compliance System
All members of the Group endeavor to be compliant with the laws and regulations inexecution of their duties in accordance with internal policies, such as the Company Code of
Conduct based on the aforementioned compliance systems. Furthermore, in order to detect oravoid violation of compliance at the earliest opportunity, the Hotline System Policy and its
method of utilization are notified to related personnel in a thorough fashion.
(ii) Risk Management System
For the Group, the designated Member of the Board of Directors of the Company in chargeof risk management determines the operating unit in charge of each risk category, monitor
the risk status and respond accordingly. Furthermore, the status of this risk management issubject to Internal Audits and audits conducted by Members of the Audit and Supervisory
Board.
(iii) Efficiency of the execution of duty by Members of the Board of Directors
For the Group, the Board of Directors shall meet once a month with provisional Board of
Directors meetings conducted whenever necessary, in order to check the reports of businessexecution (including reports from subsidiaries), progress of business performance for the
fiscal year (including performance of subsidiaries), and so on.

7This is an English translation of financial statements as well as notes to financial statements,
originally in Japanese. Japanese original were audited by Deloitte Touche Tohmatsu LLC.

Consolidated financial statements

Consolidated statements of changes in equity (from April 1, 2018 to March 31, 2019)

Unit : Millions of yen

Equity attributable to owners of parent
Other components of equity

Share capital

Capital surplus

Treasury shares

Financial assets measured
at fair value through othercomprehensive income

Foreign currency translation
adjustments of foreign
operations

Stock Acquisition Rights

April 1, 2018

26,744

26,495

(0)

(77)

(7)

19

Profit (loss)

–

–

–

–

–

–

Other comprehensive income

–

–

–

(858)

10

–

Total comprehensive income

–

–

–

(858)

10

–

Issuance of new shares

1

(2)

–

–

–

–

Transfer from other components ofequity to retained earnings

–

–

–

(135)

–

–

Equity transaction with noncontrolling interest

–

–

–

–

–

–

Total transactions with owners
March 31, 2019

1

(2)

–

(135)

–

–

26,74526,494(0)(1,071)3

19Equity attributable to owners of parent
Other componentsof equity
Retained earnings
Total
April 1, 2018
Profit (loss)

Total equity

Non-controlling interests

Total

(65)

(7,476)45,698(24)

45,674

–

(632)

(632)

(11)

(643)

(848)

–

(848)

4

(845)

Total comprehensive income

(848)

(632)

(1,480)(7)(1,487)Issuance of new shares

–

–

(1)

–

(1)

(135)

135

–

–

–

Equity transaction with noncontrolling interest

–

–

–

17

17

Total transactions with owners

(135)

135

(1)

17

16

(1,048)(7,972)

44,217(15)

44,203

Other comprehensive income

Transfer from other components ofequity to retained earnings

March 31, 2019
(Rounded down to the closest millions of yen)8

Notes to consolidated financial statements(Important items that form the basis for preparing “consolidated financial statements)
1. Basis of preparation of consolidated financial statements
The consolidated financial statements of CYBERDYNE, INC. (the “Company”) and its groupcompanies (collectively referred to as the “Group”) have been prepared in accordance with International
Accounting Standards (“IFRS”) from the fiscal year under review, in accordance with Article 120,
Paragraph 1 of the Ordinance on Accounting of Companies. Certain items of the consolidated financial
statements required by IFRS are omitted in accordance with other statements in Paragraph 1 of theaforementioned ordinance.
2. Scope of consolidation
Status of consolidated subsidiaries
Number of consolidated subsidiaries: 12 companies
Names of major consolidated subsidiaries:‌Suzuka Robo Care Center Co., Ltd., Shonan Robo Care Center Co., Ltd., Oita Robo Care Center Co.,
Ltd., Cyberdyne Care Robotics GmbH, CYBERDYNE USA Inc., CEJ Capital Inc., CYBERDYNE &BROOKS, Inc., Cybernic Excellence Japan Fund 1 Investment Limited Partnership.
Out of the subsidiaries mentioned above, as Cybernic Excellence Japan Fund 1 Investment Limited
Partnership were newly established during the fiscal year ended March 31, 2019, they were newly
included in the scope of consolidation.
3. Scope of equity method
Status of affiliated companies included in the scope of the equity method
Number of affiliated companies included in the scope of the equity method: 1 company
Names of affiliated companies included in the scope of equity method:
Shisei Datum Ltd.
Status of jointly controlled companies included in the scope of the equity method
Number of jointly controlled companies included in the scope of the equity method: 1 company
Names of jointly controlled companies included in the scope of equity method:CYBERDYNE Omni Networks, INC.
4. Matters regarding account processing standards(i) Evaluation standards and methods for financial assets(1) Evaluation standards and methods for financial assets
The Group classifies financial assets to the following categories at the time of initialrecognition a) financial assets at fair value through profit or loss, b) financial assets at fairvalue through comprehensive income, c) financial assets measured at amortized cost.
The Group recognizes and de-recognizes all sales and purchases of financial assets in thenormal course of business on a settlement date basis. Sales and purchase of financial assets in9the normal course of business means sales and purchase of financial assets for which thedelivery of the asset is required within a period generally permitted by market rules orpractices.
All financial assets are measured at fair value, plus transaction costs, unless they areclassified as financial assets measured at fair value through profit or loss.
Financial assets are classified as financial assets measured at amortized cost if all of thefollowing conditions are met:
- Assets are held based on a business model that aims to hold assets to collect contractual
cash flows- Cash flows, which consist only of the principal and interest payments on the principalbalance, occur on specific dates due to the terms of the contract related to the financial
asset
Financial assets other than financial assets measured at amortized cost are classified as
financial assets measured at fair value. For financial instruments measured at fair value, withthe exception of those that are held for trading purposes that must be measured at fair value
through profit or loss, the Group designates whether of each individual financial instrument
should be measured at fair value through profit or loss or if it should be measured at fair value
through comprehensive income. The same designation shall be applied continuously.
(2) Post measurement
Measurements of financial assets after initial recognition are measured in accordance to its
classification as listed below.
a) Financial assets measured at amortized cost
Financial assets are measured at amortized cost using the effective interest method.
b) Financial assets measured at fair value
Changes in the fair value of financial assets measured at fair value are recognized as net profit or
net loss. However for financial instruments classified as financial instruments measured at fairvalue through other comprehensive income, changes in the fair value are recognized as othercomprehensive income. Dividends from such financial assets are recognized as profit or loss
included in the finance income.
(3) De-recognition of financial asset
The Group de-recognizes financial assets if the contractual rights to cash flows from those assets
expire, or if the Group transfers almost all of the risk and economic value of its ownershipof those assets. If the Group continues to control the transferred financial assets, the Group
recognizes the assets and related liabilities to the extent of its continuing involvement.

10(4) Impairment of financial assets
For financial assets measured at amortised cost, the Group recognizes an allowance for doubtful
accounts against estimated credit losses.
At the end date of each quarter, the Group evaluates whether the credit risk associated with eachfinancial asset has increased significantly from the initial recognition date.
If the credit risk associated with a has not increased significantly since the initial recognition,
the allowance for doubtful accounts is measured at the same amount as the expected credit loss for
12 months. On the other hand, if the credit risk associated with a has increased significantly since
the initial recognition, the allowance for doubtful accounts is measured at the same amount as the
expected credit loss for the entire period.
Whether or not there has been a significant increase in credit risk is determined based on the riskof default, which is determined by downgrading the internal credit rating, considering deteriorationin the business performance of the counterparts, and considering information on past due dates.
If the credit risk associated with a financial asset is deemed to be low as of the end date ofeach quarters, the credit risk associated with that financial asset is not deemed to have increased
significantly since the initial recognition.
However, for trade receivables that do not contain significant elements, the allowance for
doubtful accounts is always recognized in an amount equal to the expected credit losses for theentire period, regardless of any significant increase in credit risk from the initial recognition.
The Group estimates expected credit losses on financial assets in a manner that reflects thefollowing:.
- an unbiased probabilistic weighted sum computed by evaluating a range of possible outcomes- time value of money- reasonable and supportable information available at the reporting date on past events, current
conditions and projections of future economic conditions without excessive cost or effort
The amount of such measurement is recognized in net profit or net loss.
In the event that the impairment loss is reduced after the impairment loss is recognized, thedecrease in the impairment loss is reversed to net profit or net loss.
(ii) Evaluation standards and methods for inventories
Inventories are measured at the lower of cost or net realizable value. Acquisition costs are
determined by the specific identification method for products and work in process and by themoving-average method for goods and raw materials. Net realizable value is the estimated selling
price for the inventories in the ordinary course of business, less estimated cost and estimatedselling expenses.

11

(iii) Depreciation methods of property, plant and equipment
Property, plant and equipment are stated at cost less any accumulated depreciation andimpairment losses.
The cost of an item of property, plant and equipment comprises any costs directly
attributable to acquisition of the asset and the initial estimate of the costs of dismantling andremoving the item and restring the site on which it is located.
Depreciation of assets other than land and construction in progress is calculated on astraight-line basis over the estimated useful lives of the assets. The estimated useful lives ofmajor asset items are as follows:
Buildings and structures

3 to 38 years

Operating lease assets

5 years

Tools, furniture and fixtures

2 to 20 years

The estimated useful lives, residual value and depreciation method are reviewed at each fiscal
year end, and any revisions are applied prospectively as changes in accounting estimates.
(iv) Depreciation methods of intangible assets
Intangible assets acquired separately are measured using acquisition cost at the initialrecognition.
After initial recognition, with the exception of intangible assets with indefinite useful life,
intangible assets are amortized on a straight-basis over their estimated useful lives and arepresented at acquisition cost reduced by theaccumulated depreciation and the accumulated impairment loss.
Expenditures related to internal generated intangible assets are recognized as expenses whenincurred, with the exception of development expenses that meet the criteria for capitalization.
The Group has no intangible assets with indefinite useful lives. The estimated useful lives ofmajor intangible assets are as follows:
Software5 years
Patents

8 years

The estimated useful lives, residual values and amortization method are reviewed at each fiscal
year end, and any revisions are applied prospectively as changes in accounting estimates.

12

(v) Impairment of non-financial assets
Non-financial assets excluding inventories are assessed at the end of each reporting period todetermine whether there is any indication of impairment. If there is an indication of impairment,
the recoverable amount of the asset is estimated.
A cash-generating unit, which is a unit for conducting impairment testing, is the smallest groupof assets that generates cash inflows that are generally independent of cash flows of other assets
or groups of assets. The recoverable amount of an asset or a cash-generating unit is the greater ofits value in use or its fair value less cost to sell. Value in use is the present value of the future cash
flow deemed to generate from assets or cash generating unit.
If there is any indication of a reversal of impairment loss recognized in prior year at the end dateof each reporting period, recoverable amount of assets or cash generating unit shall be estimated.
In case where recoverable amounts exceeds the carrying amount of assets or cash generating
units, the Group shall reverse the impairment loss at the maximum of amount calculated bydeducting the depreciation and amortization needed from the carrying amount of unrecognizedimpairment loss in the prior year.
(vi) Provisions
Provisions are recognized when the Group has a present legal or constructive obligation as a resultof a past event, it is probable that an outflow of resources embodying economic benefits will be
required to settle the obligation, and a reliable estimate can be made of the amount of obligation.
Where time value of money is material, a provision is measured by its present value to which
estimated future cash flows are discounted using a pre-tax discount rate that reflects the risks
specific to the provision. Interest cost associated with the passage of time is recognized as financecosts.
(vii)Employee Benefits
Short term employee benefit obligations are measured on an undiscounted basis, and arerecognized as an expense when the related services are rendered. For bonuses, when there is apresent legal or constructive obligation to make payments of bonuses, and a reliable estimate of theobligation can be made, the estimated amount to be paid is accounted for as a liability.

13

(viii) Revenue
The Group recognizes revenue based on the following five-step model, excluding revenue from
dividend and interest income based on IFRS 9 “s”.
Step 1: Identify the contract with a customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognize revenue when the entity satisfies a performance obligation(ix) Foreign currency transaction(1) Foreign currency transactions
Foreign currency transactions are translated into the functional currency of each companyof the Group at the spot exchange rate at the date of the transaction, or an exchange rate thatapproximates the spot rate.
Foreign currency monetary items are translated into the functional currency using the rates atthe end of reporting period.
Non-monetary items that are measured at fair value in foreign currencies are translated into
the functional currency using the exchange rates at the date when the fair value was measured.
Exchange differences arising from such translations and settlements are recognized in profit
or loss. However, exchange differences arising from financial assets measured at fair value
through other comprehensive income are recognized in other comprehensive income.
(2) Financial statements of foreign operations
Assets and liabilities of foreign operations are translated at the rate at the end of each reporting
period. Income and expenses are translated at the average exchange rates for the period,
provided that there were no significant fluctuations in the exchange rates during the period.
Exchange differences arising from translation of the financial statements of foreign operations
are recognized in other comprehensive income. On the disposal of a foreign operation, thecumulative amount of exchange differences relating to that foreign operation is reclassified
from equity to profit or loss when the gain or loss on disposal is recognized.

14

(x) Significant accounting policy related to Cybernic Excellence Japan Fund 1 Investment
Limited Partnership(1) Consolidation of Cybernic Excellence Japan Fund 1 Investment Limited Partnership by theCompany
The Company consolidates Cybernic Excellence Japan Fund 1 Investment Limited Partnership(“CEJ Fund”) due to the following reasons.
The Company practically makes the decision of investment of CEJ Fund through theCompanies consolidated subsidiary CEJ Capital, Inc. (general partner “GP” of CEJ Fund) thus
the Company has the control based on IFRS 10 “Consolidated Financial Statements”.
Inter company transactions such as management fees and performance fees to CEJ Capital,
Inc. , GP of CEJ Fund, to be paid from CEJ Fund are eliminated in consolidation.
(2) Investment by CEJ FundFor financial instruments measured at fair value, with the exception of financial assets that areheld for trading purposes that must be measured at fair value through profit or loss, for eachindividual financial instruments, the Group classfies each individual capital-based financial
assets to either financial assets measured at fair value through profit or loss or financial assets
measured at fair value through other comprehensive income. The same classification are
applied continuously.
(3) Contribution from Limited Partners (“LP”) to CEJ FundCEJ Fund issue capital calls from its respective LP ("Capital Call")a) Contribution from LP other than the Company
The interests attributable to LP of CEJ Fund other than the Company (“Third-Party
Investors”) are classified as financial liabilities, “Third-party interests in CEJ Fund” in the
consolidated statement of financial position, due to the predeter- mined finite life (up to 12
years from the effective date) and contractual payment provision to each of the LP at theend of the finite life within CEJ Fund’s limited partnership agreements. The liabilities areclassified as “financial liabilities measured at amortized cost” upon initial recognition. The
carrying amounts attributable to Third-Party Investors represent the amounts that would be
distributed in accordance with the limited partnership agreement in a theoretical liquidation
scenario at the end of each quarter.
“Third-party interests in CEJ Fund” fluctuate due to the results of CEJ Fund in addition
to contributions from Third-Party Investors in satisfaction of Capital Calls, and distributions
and repayments of investments to Third-Party Investors. The fluctuations due to the resultsof CEJ Fund are presented as “Gains (or losses) related to CEJ Fund” in the consolidated15

statement of income. “Gains (or losses”) related to CEJ Fund” includes the costs ofestablishing and managing the CEJ Fund.
b) Contribution from the Company
Contribution from the Company to CEJ Fund as a LP is eliminated in consolidation.
(Notes to consolidated financial position)
1. Allowance of doubtful accounts deducted directly from the assets
Trade and other receivables¥1 million

2. Accumulated depreciation and impairment loss on property, plant and equipment ¥2,480 million
3. Reduction entry deducted from the acquisition cost due to government subsidy, etc.
Buildings¥631 million

Machinery & equipment¥145 million

Tools, furniture & fixtures¥211 million

Land¥96 million

Software¥20 million

4. Overdraft agreement
The Company has entered overdraft agreements with banks that the Company has transactions
with, in order to efficiently fund ongoing operations. Balance of unused line of credit based on
the overdraft agreements as of the end of this consolidated fiscal year is written below.
Maximum limit of total line of credit¥900 million

Balance of used line of credit¥– million

Balance of unused line of credit¥900 million

16

(Notes to consolidated statement of profit and loss)(Revenue)
Details of aggregation of revenue are set forth below.
Timing of revenue recognition
Service transferred over time

¥1,167 million

Asset transferred at a point of time¥214 million

Service transferred at a point of time
Total

¥328 million¥1,709 million(Note) Since the Group operates under a single segment of business related to robotics, segment information on revenue is omitted.

Service transferred over time
Service transferred over time includes rental income based on the individual rental contract
and maintenance income based on the maintenance contract in relation to finance lease income
where the Group acts as a lessor of right-of-use asset.
The Group recognizes rental income as income generated throughout the rental period after
the customer acceptance of the relevant product, by either of the following method. Pay-peruse model based on times of product usage in the relevant month and base fee model based on
fixed monthly price.
The Group recognizes maintenance income as performance obligation satisfied over time.
The Company records this revenue during this contract period based on average amountduring the period.
Asset transferred at a point of time
Asset transferred at a point of time includes revenue from sales of commodities and products
based on sales contract.
The Group mainly determines that performance obligation of sales of commodities as wellas products are satisfied at the point of customer acceptance the relevant product. The Group
receives most of the payment within one month from the point of satisfying the performanceobligation. With regards to transaction price, there is no significance in the amount of sales
revenue that includes variable consideration. Furthermore, there are no significant financial
components in the amount of promised consideration.
Furthermore, if the Group acts as a lessor of right-of-use of its devices such as HAL, theGroup classifies the relevant lease as finance lease. Finance lease income is processed in thesame way as cases where the Group acts as a lessor of manufacturer or distributor of sales ofgoods. The Group determines that performance obligation is satisfied at the point of customer
acceptance and the revenue is recognized at a point of time.

17Service transferred at a point of time
Service transferred at a point of time includes revenue from offering Cybernic Treatment andtraining service at Cybernic Treatment Center and Robocare Centers, to end users (such as
patients).
The Group determines that performance obligation of Cybernic Treatment as well as
training services are satisfied at the point of completion of such services.
(Notes to consolidated statement of changes in equity)
1. Total number and class of the issued shares within the consolidated fiscal year under review
Number of shares issued
as of April 1, 2018
(shares)Number of shares issued
Common SharesClass B Shares
Total

137,347,609
77,700,000
215,047,609

Increase (shares)

98,200–98,200

Number of shares issued
as of March 31, 2019
(shares)

Decrease (shares)–––

137,445,809
77,700,000
215,145,809(Note) An increase of 98,200 shares in the total number of Common Shares issued was due to the issuance of new shares in remuneration for the Company
employees with restrictions on transfer.

2. Number and a class of shares to be issued upon exercise of Stock Acquisition Rights(Excluding Stock Acquisition Rights of which the commencement date of exercise period has not
yet arrived)
Common Shares

12,400 shares(Notes to consolidated statement of changes in equity)
Status of financial instruments(i) Capital management
The Group is a company centered on research and development of innovative devices. It promotes
clinical research, verification and endeavors to obtain approvals from various regulators, in order tointroduce the Group’s product into the market and services, which will realize sustainable growth.
In line with these challenges, the Group manages its financial instruments to maximize its corporate
value.
There are no capital restrictions that affect the Group.

18

(ii) Risk management for financial instruments
In the process of its operation, the Group is exposed to various financial risks such as, credit risk,
liquidity risk and exchange rate risk. In order to mitigate these financial risks, the Group selects
financial instruments with very low risk. For financing, the Group either borrows from the bank or
issue bonds. Furthermore, all equity instruments held by the Group are non-marketable securities
and it is not affected by the risk of stock market.
On derivative transaction, the Group has a policy not to conduct any speculative transactions.
(1) Credit risk management
Credit risk is the risk that a counterparty to financial assets held by the Group is unable to fulfil
its contractual obligations, resulting in a financial loss for the Group.
a) Credit risk management– Trade and other receivables
Accounts receivable-trade expose the Group to customer credit risk. The Groupmanages that risk with an internal audit process for investigating and approving
customer credit on initial transaction. Furthermore, according to Customer Credit
Management protocol, the Group also manages due dates and outstanding balances bycustomer, in order to mitigate any concerns about collection due to deterioration in theirfinancial positions and other reasons.
Accounts receivables-other expose the Group to business partner credit risk, but thesereceivables are almost entirely settled in the short term.
– Short-term investments
Short-term investments are recognized in cash and cash equivalents and other financial
assets. They are highly safe and liquid financial instruments that include negotiable
deposit and jointly-managed money trust.
The carrying amount after impairment of financial assets in the consolidated
statement of financial position represents the Group’s maximum exposure to the credit
risk of financial assets. The Group is not exposed to excessive credit risk associatedwith a particular customer that requires exceptional management.
The Group recognizes allowance for doubtful accounts for trade receivables andother financial assets measured at amortized cost by estimating future credit losses
in consideration of recoverability and significant increases in credit risk. The Group
determines if credit risk has increased significantly by evaluating changes in default risk
with reference to factors including the decline of counterparty results, and delinquency
information.

19

Accounts receivable-trade are particularly important financial assets for the Group. The
Group collectively measures expected credit losses of the financial assets for the entire period
to recognize the allowance for doubtful accounts. In the following situations, that would
adversely affect future cash flows, however, the Group measures expected credit losses
individually by treating each receivable as a credit-impaired financial asset:• Where the customer has serious financial difficulties• Where the customer defaults or becomes delinquent in accounts receivable payments
despite repeated demands for payment• Where it is more likely that the customer will go into bankruptcy or face a situation thatforces it to reconstruct its business
The Group directly writes down the carrying amount if it does not reasonably expect torecover all or part of the trade receivables, following an internal process of investigation andapproval.
The Group is not exposed to excessive credit risk associated with a particular customerthat requires exceptional management. Furthermore, the customers of the Group arehighly creditworthy and the credit risk is limited. As the customer of the Group arehighly credit worthy, there are very few delinquent in accounts receivables and impact
towards impairments in accounts receivable-trade and allowance for doubtful accounts are
insignificant.
The Group always sets its limit of allowance for doubtful accounts towards tradereceivables that does not include important financial elements at the amount of expectedcredit losses for the entire period.
The Group does not have excessively concentrated credit risk with respect to singles
counterparties or groups to which such counterparties belong. As the customers’ of the Groupare credit worthy companies with limited credit risk, the Group has few past due receivables
and little impact on the impairment of accounts receivable and the allowance for doubtful
accounts. The Group always provides an allowance for doubtful accounts at amounts
sufficient to cover probable losses on trade receivables that do not have a material financial
component.
b) Liquidity risk management
Liquidity risk is the risk that an entity is unable to make a payment by its due date inperforming its repayment obligations for financial liabilities that become due.
The Corporate Unit of the Group renews the funding plans where necessary and maintains
the level of liquidity on hand above certain level, in order to manage liquidity risk.

20c) Exchange rate risk management
The Group also operates outside Japan, and therefore is exposed to the risks of exchange
rate fluctuations associated with transactions conducted in foreign currencies etc.
As the impact of changes in exchange rate is insignificant, related information isomitted.
Furthermore, translation of the financial statements of the subsidiaries operating outsideof Japan affects the amount of other comprehensive income. However, the Group does notregard this impact to be material.
(3) Fair value of financial instruments
Fair value in the consolidated financial statements as of March 31, 2019 are as follows:.
Unit : Millions of yen
Fair value

Amount on consolidated financial statement(Financial assets)
Financial assets measured at fair value through amortized costs
61

70

Equity securities

1,611

1,611

Convertible bonds

337

337

6

6

416

416

544

544

Leasehold and guarantee deposits
Financial assets measured at fair value through profit or loss

Other
Financial assets measured at fair value through other comprehensive income
Equity securities(Financial liabilities)
Financial liabilities measured at fair value through amortized costs
Third-party interests in CEJ Fund

Measurement methods of the fair value
The Group adopts the following measurement methods for the main financial instruments
measured at fair value:(Cash and cash equivalents, trade and other receivables, other financial assets (current), tradeand other payables)
Carrying amounts approximate fair values because these are settled in the short-term.
(Other financial assets (non-current))
Fair value of non-marketable equity securities included in other financial assets is measured byappropriate measurement methods such as measurement using recently available data.

21

Fair value of leasehold and guarantee deposits is measured by present value obtained throughdiscounting yield to maturity of long term bonds with high security by planned schedule ofredemption.
(Third-party interests in CEJ Fund)The carrying amount of the third-part interests in CEJ Fund is the amount of equity interest
attributable to third-party investors assuming that the fund is liquidated at the end of eachquarter. As such the fair value of the equity interest is determined based on the carrying amountof the equity interest.
(Notes to per-share data)
1. Equity attributable to owners of the parent per share(Note) Equity attributable to owners of the parent per share are calculated based on the following
Total amount of equity attributable to owners of the parent
Amount deducted from total amount of equity attributable to owners of the parent
per share
Equity attributable to owners of the parent per share at end of year pertaining toCommon Shares and share equivalent to Common Shares
Number of Common Shares and shares equivalent to Common Shares that is usedin calculation of equity attributable to owners of the parent per share

2. Basic loss per share(Note) Basic loss per share are calculated based on the following
Loss attributable to owners of parent
Amount not available for Common Shareholders and Shareholders equivalent toCommon Shareholders
Loss attributable to Common Shares and shares equivalent to Common Shares ofowners of parent
Average number of Common Shares and shares equivalent to Common Shares
during the period¥205.50¥44,217 million¥5 million¥44,213 million
215,145,671 shares¥2.94¥632million¥– million¥632 million
215,054,735 shares(Notes on premise of going concern)
There are no items to report22Non-consolidated financial statements

Non-consolidated statements of changes in shareholders’ equity (from April 1, 2018 to March 31, 2019)
Unit : Millions of yen
Equity attributable to owners of parent
Retained earnings

Capital surplus

Capital stock

Other retained earning

Legal retained
earning

Total capitalsurplus

Legal capitalsurplusRetained earning brought forward

26,744

26,68026,6800(7,600)Issuance of new shares

35

35

35

–

–

Net loss

–

–

–

–

(1,906)

Net changes in item other thanshareholders’ equity

–

–

–

–

–

April 1, 2018
Change of item during year

Total change of item during year
March 31, 2019

35

35

35

–

(1,906)

26,77826,714

26,7140(9,506)

Shareholders’ equity

Valuation and translation adjustments

Retained earnings

April 1, 2018

Total shareholders’equityTreasury shares

Total retained
earnings

Valuation difference on
available-for-sale securities

Total valuation andtranslation adjustments(7,600)(0)45,824

1

1

–

–

69

–

–

(1,906)–(1,906)

–

–

–

–

–

14

14

Change of item during year
Issuance of new shares
Net loss
Net changes in item other thanshareholders’ equity
Total change of item during year

(1,906)–(1,837)

14

14

March 31, 2019(9,506)(0)43,98715

15

Stock Acquisition
RightsApril 1, 2018

Total net assets
19

45,844

Change of item during year
Issuance of new shares–

69

Net loss–(1,906)

Net changes in item other thanshareholders’ equity–

14

Total change of item during year–

(1,823)

March 31, 201919

44,020(Rounded down to the closest millions of yen)23

Notes to non-consolidated financial statements(Important items that form the basis for preparing “non-consolidated financial statements”)
1. Evaluation standards and method for important assets(i) Evaluation standards and methods for securities
Bonds held to maturity

Amortized cost method (straight-line method)

Other securities
Non-marketable securities
Shares of subsidiaries and associates as well as investments
in capital of subsidiaries and associates

Moving average cost method
Moving average cost method(ii) Evaluation standards and methods for inventories
Finished goods, work in process

Specific cost method

Raw materials and merchandises

Moving average cost method

Supplies

Last purchase price method

Inventories with reduced profitability were devalued.

2. Depreciation methods of non-current assets(i) Property, plant and equipment
Declining-balance method is adopted. However, for buildings (excluding attached equipments tobuildings), attached equipments to buildings and structures obtained after April 1, 2016, assets forrent, as well as part of tools, furniture and fixtures, the straight-line method is adopted. The useful
lives for major assets are as follows.
Buildings

3-38 years

Structures

10-20 years

Machinery & equipment

5-7 years

Vehicles & delivery equipment

2-6 years

Tools, furniture & fixtures

2-20 years

Rental assets

5years(ii) Intangible assets
Straight-line method was adopted. Software for internal use is amortized using the straight-line
method over the estimated useful lives (within five years)
Software5 years

Patents

8 years24

(iii) Long-term prepaid expenses
The straight-line method is adopted.
3. Basis for recording provision and allowance for doubtful receivables
Allowance for doubtful accounts
To provide for losses incurred through bad debts, the amount of potential loss is calculated by using
the historical loss ratio in case of non-classified loans/receivables. Potential losses for classified loans/receivables are individually assessed.
4. Other material information regarding the preparation of financial statements(i) Basis for evaluating foreign-currency-denominated assets and liabilities in Japanese yen
Foreign-currency-denominated money claims and liabilities are converted into Japanese yen at the
spot exchange rates in effect at the balance sheet date, and the exchange differences are scored as
profits/losses.
Furthermore, Foreign-currency-denominated securities (other securities) are converted into
Japanese yen at the spot exchange rates and the valuation difference is included in the net assets asvaluation difference on available-for-sale securities.
(ii) Accounting treatment of consumption taxes, etc.
Consumption taxes and local consumption taxes are excluded from the transaction accounts.
(iii) Treatment method of deferred assets
New share issuance costs are recognized as expenses when disbursed.
(Notes on changes in accounting policy)
Adoption of accounting standards for revenue recognition
As “Accounting standard for revenue recognition” (ASBJ Statement No. 29 of March 30, 2018.
“Revenue Recognition Accounting Standards”) and “Guidance on the application of accounting
standards for revenue recognition” (ASBJ Guidance No. 30 of March 30, 2018) became applicablefrom the beginning of the fiscal year starting on or after April 1, 2018, the Company has adopted
revenue recognition accounting standards, etc. from the beginning of the fiscal year.
The adoption of this accounting standard did not have an impact on the Company’s financial
statements.

25

(Notes to the non-consolidated balance sheet)
1. Accumulated depreciation deducted directly from the assets
Property, plant and equipment¥2,643 million
Amount stated above includes accumulated impairment losses
2. Reduction entry deducted from the acquisition cost due to government subsidy, etc.
Buildings¥631 million
Machinery & equipment¥145 million
Tools, furniture & fixtures¥211 million
Land¥96 million
Software¥20 million
3. Overdraft agreement
The Company has entered overdraft agreements with banks that the Company has transactions
with, in order to efficiently fund ongoing operations. Balance of unused line of credit based on
the overdraft agreements as of the end of this consolidated fiscal year is written below.
Maximum limit of total line of credit¥900 million

Balance of used line of credit¥– million

Balance of unused line of credit¥900 million

4. Money claims and liabilities toward subsidiaries
Short-term money claims¥206 million

Short-term money liabilities¥16 million(Notes to non-consolidated statement of income)Business transactions with subsidiaries and associates
Business turnover from operating transactions
Net sales
Other operating transaction
Transaction amount other than business transactions¥53 million¥50 million¥114 million

26

(Notes to non-consolidated statement of changes in shareholders’ equity)
Number of treasury shares as of the end of business year ended March 31, 2019
Common Share138 Shares(Notes to tax effect accounting)
The deferred tax liabilities are mainly due to retirement costs for asset retirement obligations.
(Notes to revenue recognition)
Same as “Notes to Consolidated Statements of profit or loss (Revenue)” in the notes to consolidated
financial statements.
(Notes on transaction with related parties)
Subsidiaries and associates etc.
Type

Name

Subsidiary

CEJ Capital, Inc.

Ownership ratioof voting rights

Relationship withthe related party
Interlocking
Direct ownershipduties forof 60%
directors

Description oftransaction
Receipt ofoutsourcing
service income

Transaction amount(millions of yen)

Year end balance(millions of yen)

Items

107 Unearned revenue

119(Note) The receipt of consignment fees is reasonably determined by discussion between the two parties in consideration of the nature of business.

(Notes to per-share data)
1. Net assets per share(Note) Net assets per share are calculated based on the following
Total net assets
Amount deducted from total net assets
Net assets at end of year pertaining to Common Shares and shares equivalent toCommon Shares
Number of Common Shares and shares equivalent to Common
Shares that is used in calculation of net assets per share

2. Net loss per share(Note) Net loss per share are calculated based on the following
Net lossAmount not available for Common Shareholders and shareholders equivalent toCommon Shareholders
Net loss attributable to common shares and shares equivalent to Common Shares
Average number of Common Shares and shares equivalent to Common Shares
during the period¥204.52¥44,020 million¥19 million¥44,001 million
215,145,671 shares¥8.86¥1,906 million¥– million¥1,906 million
215,054,735 shares

Although there were dilutive shares, diluted net income per share is not disclosed because the Company posted a net loss per share.

27

This is an English translation of financial statements as well as notes to financial statements,
originally in Japanese. Japanese original were audited by Deloitte Touche Tohmatsu LLC.