・Broadleaf ("the Company") will start providing new cloud-based software, ".c Series," in 2022
・Transition of industry-specific software to monthly subscription models has progressed as planned.
・In 2021, the Company sold monthly subscription contracts for conventional software to some clientsin order to realize quick transition from conventional software, “.NS Series," to new cloud-based software.
・There was a negative impact of 1,654 million yen on revenue compared to the sales method undermulti-year lease contracts.
・Transition of software to monthly subscription models is a negative factor for revenue in the earlystages, while those sales will become stock revenue and stabilize the revenue over the long term.
・Transition to stock revenue also progressed as planned.

・The monthly sales ratio rose by 3.9 points year-on-year, to 39.9%.

・Device sales decreased, partly due to a decline in reaction to large-scale orders.
・Software sales increased due to additional sales of software to clients.
・Sales of SaaS, which are monthly subscription models of software, increased.
Monthly sales increased due to an increase in the total number of software users.
・Since conventional software was offered to some clients under monthly subscription contracts,
revenue decreased by 1,654 million yen.
・If the transition to monthly subscription models had not been conducted and the Company had continued tooffer the software under multi-year lease contracts, revenue would have increased year-on-year.
・The Company promoted the transition to monthly subscription models in order to stabilize and enhance
the revenue in the future.

・Major factors for the changes, including the content on page 5, are listed on the right-hand side of thetable.

・The transition to monthly subscription contracts for conventional software was a factor behind theincrease in sales of SaaS.
・When a client purchases software under multi-year lease contracts, it is recorded as sales in both
Application "By industry" and Application "PaaS/IaaS (basic)".
・The impact of 1,654 million yen due to the transition of software to monthly subscription models was afactor behind the decline in sales of Platform "PaaS/IaaS (basic)" and Application "By industry."

・Software users increased by 606 companies year-on-year to 38,006 companies.
・The number of clients is on an increasing trend, and the business situation is favorable.
・Not only did sales of SaaS increase due to the promotion of the transition to monthly subscription models,
but monthly sales also increased in proportion to the number of users.

・Cost of sales decreased by 335 million yen year-on-year.
While amortization expense of cloud-based software increased, there was a decrease in purchases.
・Update cost for service infrastructure increased due to the strengthening and expansion of the operating
infrastructure in preparation for the diversification of cloud-based software and platform-type services.
・Personnel expenses increased due to a temporal increase in legal welfare expenses related tostock compensation.

・SG&A expenses, etc. increased by 564 million yen as a result of upfront costs and temporal costs.
・In addition to the above cost factors, the decline in sales had a significant impact.
As a result, operating profit decreased by 740 million yen.

・Non-current assets increased due to investment in development of cloud infrastructure, including new
cloud-based software.

・For current liabilities, short-term interest-bearing debts increased due to short-term borrowings.
・Total shareholders’ equity increased due to the recording of profit, despite the dividend payout.

・Operating cash flow decreased year-on-year due to a decrease in profit before tax and an increase intrade receivables.

・Cash used in investing activities increased due to investments in the development of cloud services.
・As a result, free cash flow also decreased, resulting in cash of 395 million .
・Cash balance at the end of the fiscal year increased year-on-year due in part to short-term borrowings.

・The reasons for the sharp decrease in revenue will be explained on the next page.

・Business conditions will continue to be favorable in 2022.
・Meanwhile, the main product for software sales will be changed to new cloud-based software, ".c Series."
・The Company will provide cloud-based software to clients at the timing of expiration of lease contracts
for the conventional software, ".NS Series."
・The Company will record sales of ".c Series" on a monthly basis regardless of the type of contract theclient chooses.
・In 2022, cloud-based software will account for the majority of total software sales.
About 8 billion yen negative impact on sales will occur compared to the case where conventional
software is sold under multi-year lease contracts.
・Business conditions will continue to be favorable, but sales of cloud-based software, a mainstay product,
will decrease significantly since the sales is recorded on a monthly basis.

・The majority of software sales are cloud-based software, so sales of SaaS will increase.
・Sales growth will accelerate in the 2H because sales in the 1H will become stock revenue.
・Sales will decline in both Platform "PaaS/IaaS (basic)" and Application "By industry" which consist of
conventional software sales.
・Negative impact of about 8 billion yen corresponds to this portion.
・Monthly support services for cloud-based software are included in SaaS.
Therefore, sales of "Support" will also decrease as transition from conventional software progresses.
・EDI and Settlement, which are sales of the ordering platform for auto parts, will be about the same level
as the previous fiscal year.

・Sales of the Platform "DX," including website creation tools and groupware, will increase thanks to thetailwind of clients’ response to DX.
・Device sales will decrease due to the transition to cloud-based software.

・Cost of sales will decrease by 253 million year-on-year.
While amortization costs for cloud services will increase, purchases will decrease.

・ Update costs for service infrastructure will increase as the Company enhances cloud-based software andplatform-type services at the timing of release.
・Advertising expenses will increase due to the strengthening of sales of cloud-based software and newservices.
・SG&A expenses, etc. will increase by 97 million yen.
・Operating profit is expected to decrease by 8,195 million yen due to the significant impact of the decline
in sales in addition to the cost factors.

・Cloud-based software ".c Series" can be selected from a monthly subscription contract and a 5-year lease
contract.

・The majority of clients are expected to choose lease contracts, as before.
・For cloud-based software, even in the case of lease contracts, sales are recorded on a monthly basis.
Cash for 5 years are received in a lump sum at the time of conclusion of the contract.
・Cash flows is not expected to change largely compared to 2021 and before.
・Even if majority of the clients choose monthly subscription contracts, there are no concerns about ashortage in working capital, since the Company will utilize the existing available credit.
・In the balance sheet, while trade receivables are expected to decrease, advances received are expected toincrease.
・Equity will decrease due to the expected loss.
Still, there will be no problem with financial soundness.

・The year-end dividend for FY12/2021 will be 4.7 yen, an increase of 0.7 yen from the previous forecast of
4.0 yen per share, since the profit exceeded the forecast.

・Annual dividend will be 8.7 yen per year.
・Dividend forecast for FY12/2022 is currently "undecided."・In principle, dividends are linked to performance, but the dividend forecast will be determined in light ofthe progress made in the medium-term management plan and the status of retained earnings.
The forecast will be promptly announced as soon as the Company becomes able to announce the forecast.

・Background for the formulation of the new medium-term management plan is as follows.
・The Company announced management policy from 2021 in February 2021.
Performance plan was not announced at this point since it was before the release of cloud-based
software, ".c Series."
・Cloud-based software was released in October 2021.
The Company will start providing services to clients in 2022.
・Therefore, the Company updated priority measures that have been underway since 2021 and newly
formulated performance plan as well.
・Starting in 2022, clients for conventional software will gradually transit to cloud-based software.
Completion of the transition are expected to be in FY2028, so the Company formulated a plan up to
FY2028.

・Growth strategy is "Cloud penetration" and "Expansion of services"・ The Company’s services use "Broadleaf Cloud Platform" as the common infrastructure.
・ Priority measures for Growth Strategy ① "Cloud Penetration" are to raise the installation rate of themainstay cloud-based software, ".c Series."
・Growth Strategy ② “Expansion of services" focuses on enhancing IT services that are essential to clients’business operations, placing cloud-based software at the core.
・"Broadleaf Cloud Platform" provides a variety of APIs that allow third-party services, such as third-party
software, to be offered as a one-stop service.
・The Company will promote these priority measures from the perspective of the "2 DX."

・The first DX is digital transformation.
The Company will contribute to construction of clients’ business base that will lead to the creation of newvalue by promoting clients' digital transformation (DX).
・The second DX is Data Exchanger.
The Company will enhance the added value of its services by collecting and analyzing data obtained not
only from clients using software, but also from 3rd parties, on its unique cloud infrastructure "Broadleaf
Cloud Platform."・Data will become the added value of its services, and further data will be accumulated.
Through these processes, "Eco-Cycle" of data will be generated as a new source of value.

・The Company will expand the functions of cloud-based software, ".c Series," which will become themainstay product from 2022, through 2023, and expand the number of applicable client industries.

・Clients using conventional software will gradually transit to cloud-based software at the timing of
expiration of existing lease contracts.
・This time, the Company announced performance plan up to 2028, when the transition for all clients is
expected to be completed.
・The performance is expected to bottom out in 2022, return to profit in 2024, and hit a record high in 2026.
・When the transition to cloud-based software is completed in 2028, the operating margin is expected to beat the 40% level, and profit is expected to grow to 8 billion yen as well.
・The Company will record losses for the initial 2 years (2022-2023), but there will be no shortage ofshareholders' equity, so there is no need for equity financing to strengthen its equity.

・Cloud business does not solely consist of cloud-based software, but also consist of services that develop
from "Broadleaf Cloud Platform."

・Cloud business is broadly divided into Platform services and Software service (SaaS).
・The provision of ".c Series," cloud-based software, which is included in Software service, will drive thegrowth of cloud business.
・Conventional business mainly consists of sales of conventional software.
・From 2022 to 2023 is the early stages of transition from conventional business to cloud business.
・Since conventional business already has a stock revenue, the scale of sales stays large at the early stagesof transition.

・As the transition of sales to cloud business progresses, including the stock revenue portion of
conventional business, the growth of the cloud business will accelerate.

・Software service consists of cloud-based software, ".c Series," and various DX solutions such asgroupware.

・ A certain number of clients using conventional software will transit to cloud-based software every year,
and market share is expected to expand as well due to high product competitiveness.
・Revenue will continue to increase due to progress in transition to stock revenue.
・The shaded green graph corresponds to this, which will drive the growth in revenue.
・For Platform services, sales of the ordering platform will also grow.
・The Company expects penetration of ordering platform in line with transition to cloud-based software.
The Company will promote the adoption of the ordering platform as an industry standard for sales andpurchase transaction of auto parts.
・The Company will also promote the development of new platform services which utilize "Broadleaf
Cloud Platform" as the starting point, which are not included in the performance plan.
・The Company will provide new services that become upper factors for revenue plan in the future.

・Conventional business will shrink along with transition to cloud business.
・The Company has a lineup of software for multiple industries, and there are some conventional software
for which cloud development is undecided, so license sales for conventional software are not expected to
become zero in terms of revenue plan.
・Since ancillary services are monthly sales, the sales will be reduced over a certain period of time alongwith transition to cloud-based software, and those sales will transit to cloud business.
・PC sales are expected to decline due to transition to cloud-based software, and sales of forms and printers
are also expected to decline due to the trend toward paperless operations.
・Device sale is a low-margin business.
・Promotion of transition to a cloud business which has a higher marginal profit ratio will lead to theacceleration of profit.

・Penetration of ".c Series," cloud-based software, is the most important factor in achieving revenue plan.
・The Company sets four key indicators to watch the progress of penetration measures.
・One is the cloud transition rate.
This is mainly a determinant of the time-line.
・The number of cloud-based software licenses, average monthly license fee, and churn rate are factors that
determine the amount of sales.
・These four indicators shows set values at a particular point of time in the future, and actual results will be
disclosed at an appropriate timing.

・The total number of users of the Company’s software is 38,000 companies.
The target of ".c Series," cloud-based software, is 33,000 companies. The target include four industries:
auto maintenance shops, auto body shops, auto parts dealers, and recycling shops.
・One of the assumptions for 2024 revenue plan is that 40% of the 33,000 companies will transit to cloudbased software by the end of 2024.
・In order to realize the rate of 40%, the Company will make clients transit to cloud-based software in linewith the expiration of lease contracts for conventional software.
・The percentage of users repeating the use of conventional software is over 95%.
・Since cloud-based software has better merchantability and is easier to install, the Company expects nearly
all of the users to adopt cloud-based software unless there are special reasons like closing of business.
・This is the reason the Company adopts “cloud transition rate” as a time-line indicator, and in the future,
actual results will be announced at an appropriate timing.

・The license system for “.c Series,” cloud-based software, is different from conventional software.
・For conventional software, one PC was necessary for installing one license.
Consequently, majority of the companies adopted one license per company or store.
・Since cloud-based software is a terminal-free web app, license can be distributed to each individuals
based on the end users’ ID accounts.
・As a result, the way of thinking of the target clients changes from the number of companies or stores tothe number of personnel.
・In the target four industries, the number of companies is more than 0.1 million, while the number of
personnel is more than five times the number of companies.
・The Company optimized set price and assumed number of sales for each target company after carefully
investigating the number of employees and its occupational mix.
・There are various types of licenses according to the combination of industries and jobs, as well as thesize of a company. Although the unit price varies according to the type of license, 24,000 licenses in total
are expected to be provided by the end of 2024.
・The average monthly license fee in 2024 is expected to be 23,000 yen.
・Actual results for “number of licenses” and “monthly price” will be announced at an appropriate timing.

・Since cloud-based software is a terminal-free Web app, license can be distributed to each individuals
based on the end users’ ID accounts.

・"Basic pack," which is set according to each industry, will be installed to each store.
・The first person can use the software by using the “basic pack.”
From the second person onward, “role license," which is a job type-specific license, needs to be adopted.
・In this figure, licenses for manager role, mechanic role, and front role are added in addition to the “basic
pack,” which add up to four licenses in total.
・The system is changed from the conventional system of one license per one store to the new system of
one license for each employee in cloud-based software.
・Due to this change in the license system, the number of adopted licenses per store will increase compared
to conventional software.

・For conventional software, the percentage of repeat users who renew the contract after expiration of thelease contract is 95% or more.

・Since renewal occurs every 6 years, when all users are considered as a parameter, the churn rate in one
year is less than 1%.
・Cloud-based software “.c Series” is not a mere administrative system, but is positioned as a total
management system that is indispensable to the business operations of clients.
It is equipped with various functions and services that support clients’ business development.
・The churn rate for cloud-based software is expected to be extremely low because it will be used over alonger period than conventional software.

・Cloud-based software, ".c Series," can control other systems and external networks by closely linking
with them through the API of "Broadleaf Cloud Platform."

・".c Series" will play a key role in the enterprise system.
・Since ".c Series" has AI-based learning function, it learns operation method and process specific to eachcompany, store, or ID, and organize them as a knowledge.
・".c Series" accumulates knowledge significant for continuous and efficient business operations andrealize knowledge sharing within the company and store.
・The Company shifts from the way of thinking of business processing system to the way of thinking ofa total management system which becomes the core of clients' business, such as ERP.
・Another feature of cloud-based software is that it can easily establish system-to-system linkage, like ERP.
This feature is expected to contribute to an increase in the number of licenses and an increase in theunit price per client.

・“Broadleaf Cloud Platform” provides the required functions for IT-systems in the form of micro-modules.
・Since “Broadleaf Cloud Platform” has high scalability, it enables creation of services throughcombination of micromodules.
・Since the Platform is constructed from such modules, the Company can flexibly structure various
software and provide them to its clients.
・It can be provided not only as software but also as module, and be used by the 3rd party as an API.
・Not only does it serve as the operating infrastructure for other companies’ software, but it also links theirfunctions and data with the Company’s cloud-based software via API.
・System development companies can develop add-ons for the Company’s cloud-based software sincedevelopment environment for the system is prepared as a kit.
・Development resources of 3rd party system companies become available, enabling the Company torespond to customization needs from major clients.
・The Platform is also equipped with system in which data is gathered from users other than the Company’s
software users which will enhance the added value of services in a cyclical manner.
・With the architecture described above, the Company will develop new services based on "Broadleaf
Cloud Platform."

・The ordering platform for auto repair parts is one of the platform services that the Company has been
providing from the past.

・It is used when sales and purchase transactions are conducted between auto maintenance shop and autoparts dealer, between auto parts dealer and other auto parts dealer, or between recycling shop and autoparts dealer.
・The rate of client adopting the ordering platform are rising year by year, buy the EDI adoption rate asof the end of 2021 was still 28.4%.
・In cloud-based software, “.c Series,” not only will the ordering platform be installed as a standard, but
its linkage, operability, etc. will be enhanced as well. Therefore, usage frequency is expected to increase.
・Cloud-based software will be sequentially provided from auto maintenance shops which have beenfrequently using the ordering platform from the past.
・The Company will strategically promote expansion measures so that the use of the ordering platform will
expand to auto parts dealers in response to the frequent use in auto maintenance shops, eventually
expanding to small and medium-sized auto maintenance shops as well.
・Compliance with the Electronic Book Storage Act will also become an opportunity for promoting
electronic sales and purchase transactions. The Company will accelerate sales at an annual growthrate of more than 30%.

・In October 2021, the Company started collaboration with Toyota Finance and are preparing for the fullscale deployment of the auto finance business.

・The Company is planning to provide Toyota Finance‘s financial services to car dealers, auto maintenanceshops, auto body shops, etc. that are users of the Company’s software.
・Due to this measure, Toyota's auto financial services, which had previously provided only to Toyotaaffiliated stores, will be available at non-affiliated companies which are the Company’s users.
・The service is planned to be launched in the 1H of 2022.
・Eventually, by offering a variety of auto finance services of many financial companies, it will become amarketplace on “Broadleaf Cloud Platform.”
・Since the Company already has many software users and many car owners who are a customer of its
clients, it expects an increase in the total number of transactions by increasing the number of various
finance products.

・In order to promote both “Penetration of cloud-based products” and “Expansion of services,”
strengthening of internal infrastructure in addition to strengthening of development and sales resources
are necessary.
・In 2022 and 2023, while no profit is expected from an accounting perspective, the Company will maintainexisting management resources in order to lead to acceleration of growth in the future.
・The Company will continue capital allocation with an emphasis on growth investments.
・The Company will conduct strict business management and aim to maximize management efficiency.

・In order to solve environmental issues such as climate change and social issues such as traffic accidents,
the automobility industry and related administrations are undergoing significant changes.

・Typical initiatives include the shift of automobiles to EV.
・These changes are positive in terms of the Company’s business environment.
・Investment in IT represented by DX is expected to increase in order for business operators in theautomobility industry to respond to changes.
・The Company’s client companies will continue to support the changing infrastructure of the automobility
society.

・The Company works to contribute to clients’ business continuity and business creation
・The Company believes that striving to build an affluent society together with its clients will lead to theenhancement of its corporate value.
・Through its corporate activities, the Company will not only minimize the negative impact on theenvironment and society, but also work more actively with clients to promote activities that lead to theresolution of environmental issues and social issues.

・The Company indirectly contributes to resolution of issues since its business provides IT services tocompanies.

・Direct contact points with environmental and social issues are difficult to identify, but the Company willcontinue to promote activities while always being aware of the relationship between these issues.