Summary of Financial Statements
for the First Six Months of Fiscal Year Ending December 31, 2022
[Japanese GAAP] (Consolidated)
August 4, 2022
Company Name

SymBio Pharmaceuticals Limited

Listing: Tokyo Stock Exchange

Securities Code4582

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

Representative

Representative Director,
President and Chief Executive Officer

Fuminori Yoshida

Contact Person

Corporate Officer andChief Financial Officer

Takaaki Fukushima

TEL +81-3-5472-1125

Date of Dividend
Payment (plan)—

Scheduled Date to File Quarterly August 5, 2022
ReportSupplementary materials for the quarterly financial statements:

Yes ・ No

Holding of quarterly earnings performance review:

Yes ・ No

(Amounts of less than one million yen are rounded down.)
1. Business Results for the First Six Months of FY 2022 (January 1, 2022 to June 30, 2022)(1) Consolidated Operating Results (cumulative)(Percentages indicate year-on-year changes.)
Net Sales
Q2 FY 2022
Q2 FY 2021

Operating Profit

Millions of yen

%

4,873
－

(Note) Comprehensive income:Millions of yen

1,372
－

－
－

Q2 FY 2022
Q2 FY 2021

Earnings per ShareProfit attributable toowners of parent

Ordinary Profit%——

Millions of yen

1,447
－

%

Millions of yen

1,108
－

—
—

%

—
—

1,108 million yen ( -%)— million yen ( -%)Diluted Earnings per Share
Yen

Yen

Q2 FY 2022
28.71
28.32
—
Q2 FY 2021—
Note regarding consolidated quarterly operating results:
The Company began preparing consolidated quarterly financial statements from Q1 FY 2022 with the start of full-fledged operations
at SymBio Pharma USA. As a result, figures for Q2 FY 2021 as well as year-on-year comparisons against Q2 FY 2021 have not been
provided.
(2) Consolidated Financial Position
Total Assets
Q2 FY 2022 (as of June 30, 2022)
FY 2021 (as of December 31, 2021)(Reference) Shareholders’ equity:

Net Assets

Millions of yen

9,551
—

Equity Ratio

Millions of yen

8,380
—

%

83.6
—

Q2 FY 2022 (as of June 30, 2022)
7,988 million yen
FY 2021 (as of December 31, 2021)— million yen
Note regarding consolidated quarterly financial position:
The Company began preparing consolidated quarterly financial statements from Q1 FY 2022, and hence figures for FY 2021 havenot been provided.

2. Dividends
Annual Dividend per Share
1st QuarterYen

2nd Quarter
Yen

3rd Quarter
Yen

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

Fiscal Year End
Yen

Full Year
Yen

0.00

0.00

0.00

0.00

3. Earnings Forecasts for FY 2022 (January 1, 2022 to December 31, 2022)
Net Sales
Millions of yen

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

Ordinary Profit% Millions of yen% Millions of yen

10,003—Full Year
1,770
—
1,750
(Note) Revision of earnings forecasts most recently announced: Yes ・ No

—

1,480

%

Yen

—

38.35

Notes:(1) Changes in significant subsidiaries during the period:
Yes ・ No
(Transfer of specified subsidiary accompanying a change in the scope of consolidation)
New: SymBio Pharma USA, Inc.
Removed: None
(2) Application of special accounting treatment in preparing the quarterly financial
statements:

Yes ・ No

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

Yes ・ No(d) Restatements after error corrections:

Yes ・ No

(4) Number of issued shares (common stock)(i) Total number of issued shares at the end of
the period (including treasury shares)(ii) Total number of treasury shares at the endof the period(iii) Average number of shares during theperiod (cumulative)

Q2 FY 2022

39,560,581 shares

FY 202138,457,206 shares

Q2 FY 2022

83,743 shares

FY 202182,618 shares

Q2 FY 2022

38,592,106 shares

Q2 FY 2021

38,259,460 shares* Summary of the quarterly financial statements is not subject to quarterly reviews by certified public accountants or accounting
corporations.
* Explanation regarding the appropriate use of earnings forecasts and other matters
All forecasts presented in this document, including earnings forecasts, are based on the information currently available to theCompany and assumptions judged to be reasonable. Actual results may differ substantially from these forecasts due to various
factors. Regarding the assumptions on which the Company’s earnings forecasts are based and their usage, please refer to “1.
Qualitative Information on Quarterly Financial Results (3) Explanation of consolidated earnings forecast and other forwardlooking information” on Page 4 of the attachment.

Index of the attachment
1. Qualitative Information on Quarterly Financial Results ........................................................................................................................ 2(1) Business results ................................................................................................................................................................................ 2(2) Explanation of financial position...................................................................................................................................................... 4(3) Explanation of earnings forecasts and other forward-looking information ...................................................................................... 4
2. Quarterly Consolidated Financial Statements and Primary Notes ......................................................................................................... 5(1) Quarterly consolidated balance sheet ............................................................................................................................................... 5(2) Quarterly consolidated statement of income and consolidated statement of comprehensive income ............................................... 7
Quarterly consolidated statement of income for the first six months of FY 2022 .............................................................................. 7
Quarterly consolidated statement of comprehensive income for the first six months of FY 2022 ..................................................... 8(3) Quarterly consolidated statement of cash flows ............................................................................................................................... 9(4) Notes to quarterly consolidated financial statements ..................................................................................................................... 10(Notes to going concern assumptions) ............................................................................................................................................. 10(Notes in case of significant changes to shareholders’ equity) ......................................................................................................... 10(Accounting policy changes) ........................................................................................................................................................... 10(Additional information) .................................................................................................................................................................. 11(Significant subsequent events) ....................................................................................................................................................... 12―1―

1. Qualitative Information on Quarterly Financial Results(1) Business results
From the first three months of FY 2022, the Company began preparing consolidated quarterly financial statements in connection
with the commencement of full-fledged operations at its wholly-owned U.S.-based subsidiary, SymBio Pharma USA, Inc. (President:
Carolyn Yanavich), which serves as a strategic base for our global operations as a specialty pharmaceutical company. As reference,
we have provided year-on-year comparisons with the non-consolidated quarterly financial statements in the same period last year,
since there have been no substantial changes in our business composition.
(i) Business results for the period under review
In December 2020, the Company began selling TREAKISYM® (generic name: bendamustine hydrochloride) through its own salesorganization. This was a critical step of the Company to attain profitability in FY 2021, which was a top priority for the fiscal year.
The Company has assigned medical representatives nationwide and hematology experts in each region of operation to establish ahighly productive salesforce capable of addressing local needs. To achieve nationwide distribution, we have entered into distributionagreements with Suzuken Co., Ltd. and Toho Pharmaceutical Co., Ltd. with both companies as exclusive distributors. We are also
working with S.D. Collabo Co., Ltd. and have established two logistics centers, one in Eastern Japan and the other in Western Japan.
In February 2022, the Company obtained approval for a partial change to the marketing authorization of the ready-to-dilute (RTD)
liquid formulation of TREAKISYM®, which was launched in January 2021, to add rapid infusion (RI) administration. Compared to
the freeze-dried (FD) formulation, the RTD formulation of TREAKISYM® simplifies and reduces the time required for preparationcompared to the conventional freeze-dried (FD) formulation. RI administration has the benefits of RTD and further reduces theinfusion time to 10 minutes, benefitting both patients and healthcare providers. In addition, RI’s reduced infusion volume has lesssaline solution and accordingly less salt (sodium chloride), which makes TREAKISYM® RI more suitable for elderly patients.
With the cooperation of medical institutions, the switch from the FD to RTD formulation of TREAKISYM® was near completionby the end of June 2022, with almost all medical institutions converted to liquid formulation. In addition, we made progress on thewider adoption of RI administration as planned, with over 90% of medical institutions confirming their intention to switch to RI
administration as of the end of June 2022. As a quality assurance measure, we established a system to ensure a stable supply of RTD
formulation of TREAKISYM®.
Despite sales activities being constrained due to factors such as the delays in treatment and continued restrictions on facility visits
due to the spread of COVID-19, net sales rose to 4,873,695 thousand yen (+54.9% year on year). The increase was largely due tothe March 2021 approval for the use of TREAKISYM® in the bendamustine-rituximab (BR) therapy and in polatuzumab vedotin
plus bendamustine-rituximab (Pola+BR) therapy to treat recurrent/refractory diffuse large B-cell lymphoma (r/r DLBCL), as well as
the NHI price listing of Chugai Pharmaceutical’s polatuzumab vedotin in May 2021.
Selling, general and administrative expenses totaled 2,637,976 thousand yen (+6.8% year on year). This amount includes researchand development expenses of 1,009,402 thousand yen (+10.7% year on year).
As a result, in the first six months of FY 2022, operating profit was 1,372,472 thousand yen (versus an operating loss of 194,941
thousand yen in the same period of FY 2021) and ordinary profit was 1,447,214 thousand yen (versus an ordinary loss of 203,858
thousand yen in the same period of FY 2021). Profit attributable to SymBio Japan amounted to 1,108,091 thousand yen (versus aloss of 205,560 thousand yen in the same period of FY 2021).
Segment information has been omitted since the SymBio Group operates within a single segment, which includes the research anddevelopment, manufacturing, and marketing of pharmaceutical drugs and other related activities.
(ii) Research and development activities
During the first six months of FY 2022, we conducted the following research and development activities in each of ourdevelopment pipelines.
(a) Anticancer agents: SyB L-0501 (FD formulation), SyB L-1701 (RTD formulation), and SyB L-1702 (RI administration)(generic name: bendamustine hydrochloride or bendamustine hydrochloride hydrate, trade name: TREAKISYM®)In March 2021, the Company obtained approval for the use of the FD formulation of TREAKISYM® in BR therapy to treat r/r
DLBCL as an additional indication.
In January 2021, the Company commenced sales of the ready-to-dilute (or RTD) liquid formulation of TREAKISYM® in-―2―

licensed from Eagle Pharmaceuticals, Inc. (head office: New Jersey, U.S.), having obtained marketing approval in September 2020.
In April 2021, the Company obtained approval for a partial change to the marketing approval of the RTD formulation for its use in
BR and Pola+BR therapy for the treatment of r/r DLBCL. For the RI administration, the Company completed clinical studies onsafety and filed a partial change application in May 2021. The application was approved in February 2022, enabling the use of RI
administration for all approved indications of the RTD formulation.
The Company will continue to actively conduct research on TREAKISYM®, such as the ongoing clinical research with Saitama
Medical University and joint research with Kyoto University, to explore new potential applications of the drug.
(b) Anticancer agents: SyB L-1101 (intravenous formulation) and SyB C-1101 (oral formulation) (generic name: rigosertib
sodium)Onconova Therapeutics, Inc., the drug’s licensor, announced in August 2020 that INSPIRE, the pivotal Phase 3 study assessing
the efficacy and safety of IV rigosertib in higher-risk MDS (HR-MDS) patients comparing to physician’s choice of treatment, did
not meet its primary endpoint. The Company is in charge of clinical development in Japan and has been in discussion with
Onconova regarding the future development of rigosertib.
For rigosertib and TREAKISYM®, the Company is searching for new indications as well as new applications for the drugs usedin combination with each other or with other existing drugs, through joint research and the offering of academia-industry
collaborative courses with the University of Tokyo.
(c) Antiviral drug: SyB V-1901 (generic name: brincidofovir [BCV])In the development of the intravenous and oral formulations of antiviral drug brincidofovir (SyB V-1901; hereinafter “BCV IV”
and “BCV Oral”), for which the Company envisions a global rollout, the Company is conducting joint research with top research
institutions specialized in each field in Japan and overseas in light of the broad spectrum of their effectiveness against dsDNA virus
infections, and will consider additional global clinical trials based on the scientific findings of the research. Earlier clinical trials in
the U.S. and Europe conducted by Chimerix Inc. (head office: North Carolina, U.S.) have demonstrated that BCV Oral has broadspectrum antiviral effects against a variety of dsDNA viruses. BCV IV is expected to be effective and safe for the prevention andtreatment of many dsDNA viruses, including adenovirus (AdV) infections after hematopoietic stem cell transplantation. In June
2021, Chimerix obtained approval from the U.S. Food and Drug Administration (FDA) for BCV Oral as a medical countermeasurefor smallpox. In May 2022, Chimerix announced that it had entered into a definitive agreement with Emergent BioSolutions Inc.
(Headquarters: Gaithersburg, Maryland, "Emergent") to acquire Chimerix’s exclusive worldwide rights for BCV. SymBio's
exclusive worldwide license to develop, manufacture, and commercialize BCV from Chimerix in September 2019 for all indications
except the prevention and treatment of orthopox infections (including smallpox and monkey pox) will be assigned from Chimerix
to Emergent but will not be affected otherwise by the aforementioned acquisition.
Based on the review by the Global Advisory Board held in February 2020, the Company has decided to prioritize the global
development of BCV IV primarily in Japan, the U.S., and Europe, targeting disseminated AdV infections occurring after
hematopoietic stem cell transplantation, a niche area with a high unmet medical need. In March 2021, the Company filed an
Investigational New Drug (IND) application with the FDA to conduct a Phase II clinical trial primarily in pediatric patients sufferingfrom AdV infections (also includes adults). This development program was granted a fast-track designation by the FDA, and theinvestigational drug was administered to the first patient enrolled (first patient in or FPI) in August 2021. Further, in January 2022,
the Company successfully filed a clinical trial application to the Medicines and Healthcare products Regulatory Agency of the U.K.
BK virus nephropathy after kidney transplantation is also a disease with serious consequences for the recipient, the donor, themedical practitioner, and the society, as it impairs the function of the transplanted kidney. In order to find an early solution to thisproblem, in May 2022, the Company submitted a clinical trial notification for a global Phase II study in patients infected with BK
virus after kidney transplantation to the Pharmaceuticals and Medical Devices Agency (PMDA), and is preparing for clinical trials
in Australia and other regions. Separately, the Company has also been preparing for clinical development targeting EB virus-relateddiseases such as difficult-to-treat multiple sclerosis, as well as post-COVID-19 conditions, which are assumed to be associated with
EB virus.
Through the accumulation of clinical trial data, we will examine the efficacy of BCV in humans against various dsDNA virus
infections and expand target indications to include multiviral infections. Through these efforts, we aim to expand the target market
and maximize the business value of BCV.

―3―

In addition to its strong antiviral effects, BCV is also expected to have antitumor effects. Through joint research with the National
Cancer Centre Singapore and University of California San Francisco Brain Tumor Center, SymBio is exploring new indications
for BCV in oncology, including refractory brain tumors and EB virus-positive lymphoma. In March 2022, we commenced joint
research with Brown University in the U.S. to investigate the anti-tumor effects of BCV on cytomegalovirus-associatedglioblastoma (GBM).
(iii) Business outside JapanIn April 2022, the Company’s U.S.-based wholly-owned subsidiary, SymBio Pharma USA, Inc. appointed Dr. Carolyn Yanavich
as President, Chief Operating Officer, and Chief Development Officer, to further expand the global development structure. Dr.
Yanavich had been Vice President and Head of Project Management and Clinical Operations at SymBio Pharma USA since October
2021. We expect her to spearhead and accelerate our global development of brincidofovir, with SymBio Pharma USA serving as adriving force behind the international clinical trials.
(iv) Licensing of new drug candidates
SymBio is moving ahead with global development of brincidofovir, an antiviral drug in-licensed in September 2019. At the sametime, the Company continues to evaluate new drug candidates for potential in-licensing. Through these efforts, the Company aims
to create medium- to long-term business value as a profitable biopharmaceutical company with growth potential.

(2) Explanation of financial position
Total consolidated assets as of June 30, 2022 stood at 9,551,518 thousand yen. Current assets totaled 8,148,488 thousand yen,mainly consisting of 5,805,810 thousand yen in cash and deposits, 1,311,057 thousand yen in accounts receivable-trade, and 239,012
thousand yen in semi-finished goods. Non-current assets amounted to 1,403,030 thousand yen, mainly consisting of 1,016,184
thousand yen in deferred tax assets and 215,348 thousand yen in software.
Total liabilities stood at 1,171,200 thousand yen. Current liabilities totaled 1,144,902 thousand yen, mainly consisting of 630,162
thousand yen in accounts payable-other. Non-current liabilities amounted to 26,298 thousand yen, mainly consisting of 23,330
thousand yen in provision for product changeover.
Total net assets stood at 8,380,317 thousand yen, mainly consisting of 17,530,548 thousand yen in capital stock, 17,505,446
thousand yen in capital surplus, and 392,059 thousand yen in share acquisition rights.
As a result, the equity ratio was 83.6%.

(3) Explanation of earnings forecasts and other forward-looking information
Regarding the earnings forecast for FY 2022, the Company reduced its initial projection for sales by 989 million yen to 10,003
million yen, in light of delays in treatments and constraints in sales activities caused by continued restrictions on visiting medical
institutions due to the spread of COVID-19, as well as the NHI price listing of a generic drug in June 2022. Meanwhile, the Company
maintained its initial forecast for all profit categories, which are operating profit of 1,770 million yen, ordinary profit of 1,750 million
yen, and profit attributable to SymBio Japan of 1,480 million yen. The profit targets were left unchanged, and the Company madeefforts to curtail SG&A expenses to offset the impact of lower sales by reviewing all expense items while placing the highest priority
on R&D investment in global development plan for antiviral drug brincidofovir.
In February 2022, the Ministry of Health, Labour and Welfare approved the marketing of generic drugs with the RTD formulation of
bendamustine. However, we believe this approval may infringe on our exclusive rights to use the patent for this product. We havenotified in writing the four companies that obtained marketing approvals for generic versions of the drug regarding our concerns about
infringement of our patent rights. In June 2022, only one company out of the four has listed its generic product in the NHI drug pricelist. If it becomes clear that the said generic product infringes on our patent rights, we will cooperate with our licensor, Eagle
Pharmaceuticals, Inc., to take necessary and appropriate legal steps against any infringement of applicable patents.

―4―

2. Quarterly Consolidated Financial Statements and Primary Notes(1) Quarterly consolidated balance sheet(Unit: thousands of yen)
Q2 FY 2022
(as of June 30, 2022)
AssetsCurrent assets
5,805,810

Cash and deposits
Accounts receivable–trade

1,311,057
98,449Merchandise and finished goods
Semi-finished goods

239,012
179,716

Prepaid expenses
Other

514,442
8,148,488

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

42,820Tools, furniture and fixtures, net
Construction in progress

33,422836

Total property, plant and equipment

77,079Intangible assets
Software
Software in progress

215,348
8,860

Total intangible assets

224,208

Investments and other assets
Deferred tax assets
Leasehold and guarantee deposits

1,016,184

Total investments and other assets

1,101,743

85,558

Total non-current assets

1,403,030

Total assets

9,551,518

Liabilities
Current liabilities
16,059Accounts payable–trade
Accounts payable–other630,162
310,551

Income taxes payable
Other

188,129

Total current liabilities

1,144,902

Non-current liabilities
Provision for product changeover
Liabilities for retirement benefits

23,3302,968

Total non-current liabilities

26,968

Total liabilities

1,171,200―5―

(Unit: thousands of yen)
Q2 FY 2022
(as of June 30, 2022)
Net assets
Shareholders’ equity
17,530,548

Share capital
Capital surplus

17,505,446(26,960,633)

Retained earnings
Treasury shares(87,041)
7,988,319

Total shareholders’ equity
Accumulated other comprehensive income
Foreign currency translation adjustment(61)

Total accumulated other comprehensive income(61)

Share acquisition rights

392,059

Total net assets

8,380,317
9,551,518

Total liabilities and net assets―6―

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

Cost of sales(Unit: thousands of yen)
Q2 FY 2022
(from January 1, 2022
to June 30, 2022)
4,873,695
863,247

Gross profit

4,010,448

Selling, general and administrative expenses

2,637,976

Operating profit (loss)

1,372,472

Net sales

Non-operating income
Interest income
Foreign exchange gains

29
168,142

Total non-operating income

168,171

Non-operating expenses
Commission expenses

47,59045,302

Share issuance costs
Other

536

Total non-operating expenses

93,4291,447,214

Ordinary profit
Extraordinary income
Gain on reversal of share acquisition rights

106,401

Total extraordinary income

106,401

Profit before income taxes

1,553,615

Income taxes - current
Income taxes - deferred

185,950
259,574

Total income taxes

445,524
1,108,091

ProfitProfit attributable to non-controlling interests―

Profit attributable to owners of parent

1,108,091―7―

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

Profit(Unit: thousands of yen)
Q2 FY 2022
(from January 1, 2022
to June 30, 2022)
1,108,091

Accumulated other comprehensive income
Foreign currency translation adjustment(61)

Total other comprehensive income(61)
1,108,029

Comprehensive income
Comprehensive income attributable to1,108,029

Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests――8―

(3) Quarterly consolidated statement of cash flows(Unit: thousands of yen)
Q2 FY 2022
(from January 1, 2022
to June 30, 2022)
Cash flows from operating activities
Profit before income taxes

1,553,615

Depreciation
Amortization of guarantee deposits

48,380669

Share-based payment expenses
Increase (decrease) in provision for retirement
benefits
Increase (decrease) in provision for productchangeover
Interest income
Foreign exchange losses (gains)

49,339192(163,107)(29)(289,630)

Commission expenses
Share issuance costs

47,59045,302Gain on reversal of share acquisition rights
Loss on retirement of non-current assets(106,401)
536

Decrease (increase) in trade receivables
Decrease (increase) in inventories

836,453
47,745Decrease (increase) in prepaid expenses
Increase/decrease in consumption taxes
payable/consumption taxes refund receivable
Increase (decrease) in trade payables
Increase (decrease) in accounts payable–other(34,705)(363,569)(53,623)
94,171

Decrease (increase) in other current assets
Increase (decrease) in other current liabilities(303,641)(113,856)

Other, net

156,280

Subtotal

1,451,712

Interest and dividends received

29

Commitment fees paid
Income taxes paid

(47,590)(240,360)

Net cash provided by (used in) operating activities

1,163,790

Cash flows from investing activities
Purchase of property, plant and equipment(2,034)Purchase of intangible assets
Proceeds from refund of leasehold and guarantee
deposits
Net cash provided by (used in) investing activities(4,407)432(6,009)Cash flows from financing activities
Proceeds from issuance of shares resulting fromexercise of share acquisition rights
Proceeds from issuance of share acquisition rights
Payments for issuance of shares

103
13,760(38,193)

Proceeds from issuance of shares
Purchase of treasury shares

662,000(1,052)

Proceeds from disposal of treasury shares81

Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents

636,699
137,585
1,932,065

Cash and cash equivalents at beginning of period
Increase in cash and cash equivalents resulting from
inclusion of subsidiaries in consolidation
Cash and cash equivalents at end of period

3,860,106
13,637
5,805,810―9―

(4) Notes to quarterly consolidated financial statements(Notes to going concern assumptions)None to be reported.
(Notes in case of significant changes to shareholders’ equity)
In the first six months of FY 2022, the Company issued new shares due to the exercise of some of share acquisition rights pertaining
to the 33rd, 36th, 38th, 41st, 43rd, 44th, 48th, and 49th warrants. As a result, share capital and capital surplus each increased by
41,920 thousand yen.
Further, the Company received payments from CVI Investments, Inc. for the issue of new shares through third party allotment onJune 1, 2022, which resulted in an increase of 331,000 thousand yen each in share capital and capital surplus.
As a result, as of June 30, 2022, consolidated share capital was 17,530,548 thousand yen, and capital surplus was 17,505,446
thousand yen.
(Accounting policy changes)(Application of Accounting Standard for Revenue Recognition)
The Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29; March 31, 2020;
hereinafter “Revenue Recognition Standard”) from the beginning of the first three months of FY 2022. As a result of the applicationof this standard, revenue will be recognized in the amount expected to be received in exchange for the promised goods or services
at the time control of the promised goods or services is transferred to the customer.
Under the previous accounting standard, for transactions where the total amount of consideration the Company is entitled to inexchange for the transfer of promised goods or services, i.e., the transaction price, is likely to be reduced after a contract is signedwith the customer, the Company revised the transaction price once the amount to be reduced was fixed. However, under the new
accounting standard, the Company makes a reasonable estimate of the variable amount and subtracts it from the transaction price atthe time the goods or services are transferred to the customer. Further, under the previous accounting standard, the Company
accounted for expected sales returns by recording provisions for sales returns in the amount equivalent to gross profit; however, in
accordance with the provisions regarding variable consideration, the Company no longer recognizes revenue at the time of sale andrecords refund liabilities as “other” under the current liabilities section of the balance sheet.
The Company has followed the transitional treatment prescribed in the provision of Paragraph 84 of the Revenue Recognition
Standard, and has applied the new accounting standard from the beginning balance of retained earnings for the first three months of
FY 2022, whereby the cumulative effect of retrospective application of the new accounting standard prior to the beginning of thefirst three months of FY 2022 is added to or deducted from the beginning balance of retained earnings.
As a result, during the first six months of FY 2022, net sales increased by 57,249 thousand yen, operating profit and ordinary profit
increased by 57,249 thousand yen, respectively, and profit before income taxes increased by 57,249 thousand yen. In addition, thebalance of retained earnings at the beginning of the period decreased by 92,822 thousand yen.
In accordance with the transitional treatment prescribed by the “Accounting Standard for Quarterly Financial Reporting” (ASBJ
Statement No. 12), the Company has not presented information that breaks down revenue from contracts with customers during thefirst six months of FY 2021.
(Application of Accounting Standard for Fair Value Measurement)
The Company has applied the “Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30; July 4, 2019;
hereinafter “Fair Value Measurement Standard”) from the beginning of the first three months of FY 2022.
In applying the Fair Value Measurement Standard, the Company has followed the transitional treatment prescribed in the provisionof Paragraph 19 of the Fair Value Measurement Standard and Paragraph 44-2 of the “Accounting Standard for Financial Instruments”(ASBJ Statement No. 10; July 4, 2019), and will apply the new accounting standard prescribed by the Fair Value Measurement
Standard, prospectively.
The adoption of this accounting standard has no effect on the quarterly consolidated financial statements.

―10―(Additional information)(Accounting estimates regarding the impact of the COVID-19 pandemic)
No significant change has been made to the accounting estimates regarding the impact of the COVID-19 pandemic andassumptions underlying the estimates for the first six months of FY 2022 from those reported (under “Additional information”) inthe Annual Securities Report for the previous fiscal year.
(Basis of presenting quarterly consolidated financial statements)
SymBio Group Company began preparing quarterly consolidated financial statements in the first three months of FY 2022. The
following is a summary of the significant matters that form the basis for the preparation of the quarterly consolidated financial
statements.
1. Scope of consolidation
Number of consolidated subsidiaries:
Name of consolidated subsidiary:

1
SymBio Pharma USA, Inc.

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

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(4) Standards for translation of assets and liabilities in foreign currencies into yen
Assets and liabilities in foreign currency are translated into yen at the spot exchange rate on the final day of the accounting term
and the foreign exchange gains and losses from the translations are recognized in the income statement.
(5) Basis for recording provisions
Provision for product changeover
The Company recognizes provisions for the estimated amount of expenses to be incurred in connection with the conversion
from FD to RTD formulations.
(6) Accounting for retirement benefits
The Company adopts a simplified method for the calculation of liabilities for retirement benefits and retirement benefit expenses,
whereby the amount payable at the end of the fiscal year for retirement benefits is deemed to be the retirement benefit obligation.
(7) Basis for recording revenues and expenses
The Company and its consolidated subsidiaries have adopted the “Accounting Standard for Revenue Recognition” (ASBJ
Statement No. 29; March 31, 2020) and “Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30; March
26, 2021). As a result of the application of these standards, revenue will be recognized in the amount expected to be received in
exchange for the promised goods or services at the time control of the promised goods or services is transferred to the customer.
(8) Scope of cash and cash equivalents in the quarterly consolidated statement of cash flows
Cash and cash equivalents consist of cash on hand, deposits that can be withdrawn on demand, and short-term investments thatcan be easily converted into cash and have a minimal risk of fluctuation in value, with maturities of three months or less fromthe date of acquisition.
(Significant subsequent events)
None to be reported.

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