[Cover][Document Submitted]

Quarterly Securities Report (“Shihanki-Hokokusho”)[Article of the Applicable Law Requiring
Submission of This Document]

Article 24-4-7, Paragraph 1 of the Financial Instruments andExchange Act of Japan[Submitted to]

Director-General of the Tokai Local Finance Bureau[Date of Submission]

November 14, 2023

[Quarterly Accounting Period]

Second Quarter of the 53rd Fiscal Year (from July 1, 2023 to
September 30, 2023)[Company Name]Sun Denshi Kabushiki Kaisha[Company Name in English]

SUNCORPORATION (the “Company”)[Position and Name of Representative]

Ryusuke Utsumi, Representative Director and President[Location of Head Office]

250 Asahi, Kochino-cho, Konan-shi, Aichi[Phone No.]058-755-2201 (main)[Contact for Communications]

Yoshimi Kimura, Senior Managing Director and Representative
Director[Nearest Contact]

Nagoya Building Sakura-Kan 2F, 4-2-25 Meieki, Nakamuraku, Nagoya-shi, Aichi[Phone No.]052-756-5981 (main)[Contact for Communications]

Yoshimi Kimura, Senior Managing Director and Representative
Director[Place Where Available for Public Inspection] Tokyo Stock Exchange, Inc.
(2-1 Nihombashi Kabutocho, Chuo-ku, Tokyo)
SUNCORPORATION Tokyo Office(5-6-10 Tsukiji, Chuo-ku, Tokyo)―1―

Part I

Information on the Company

I. Overview of the Company
1. Key Financial Data and Trends
52nd term
53rd term(Six months ended(Six months ended
September 30, 2022) September 30, 2023)

Fiscal term

52nd term(Fiscal year ended
March 31, 2023)

From April 1, 2022 to From April 1, 2023 to From April 1, 2022 toSeptember 30, 2022 September 30, 2023
March 31, 2023

Period of accountNet sales(Thousands of yen)

21,195,296

4,648,104

37,449,092

Ordinary profit (loss)(Thousands of yen)

12,788,185(4,448,383)

14,174,666

Profit (loss) attributable to owners ofparent(Thousands of yen)

6,414,746(4,229,062)

6,878,387

Comprehensive income(Thousands of yen)

11,061,965(1,393,974)

13,510,337

Net assets(Thousands of yen)

38,724,188

32,300,801

35,013,806

Total assets(Thousands of yen)

80,492,371

40,372,113

41,767,380

Basic earnings per share(Yen)

270.30(189.88)292.82

Diluted earnings per share(Yen)

257.22−278.46Equity ratio

(%)

42.7

79.7

83.6

Cash flows from operating activities(Thousands of yen)

(9,484,261)

3,816,820(13,518,612)

Cash flows from investing activities(Thousands of yen)

(4,974,196)(3,495,276)(25,131,298)

Cash flows from financing activities(Thousands of yen)

18,904,261(1,385,180)

25,574,225

Cash and cash equivalents at end of
period(Thousands of yen)

35,797,654

1,892,432

2,934,094

Fiscal term

52nd term(Three months ended
September 30, 2022)

53rd term(Three months ended
September 30, 2023)

Period of accountFrom July 1, 2022 toSeptember 30, 2022

From April 1, 2023 to
September 30, 2023

102.07(72.67)

Basic earnings per share(Notes)(Yen)

1. The Company prepares quarterly consolidated financial statements, and thus does not present the trends in key
financial data, etc. of the filing company.
2. Diluted earnings per share for the six months ended September 30, 2023 in the 53rd term are not shown in the abovetable because basic earnings per share were negative despite the existence of dilutive shares.
3. In the 53rd term (fiscal year ending March 31, 2024), the Company finalized the provisional accounting for thebusiness combination, and the consolidated financial position for the 52nd term (fiscal year ended March 31, 2023)
reflects the details of the finalization of the provisional accounting.

2. Description of Business
During the six months ended September 30, 2023, there were no material changes in the description of business conducted by
the Group (the Company and its subsidiaries and associates). There were also no changes in the main subsidiaries and associates.
As the corporate performance management segmentation within the Company Group has partially been changed, the name of thereportable segment “Mobile Data Solution business” has been changed to “Global Data Intelligence business” from the first quarterof the current fiscal year. This name change has no effect on the segment information.

―2―

II. Business Overview
1. Business and Other Risks
During the six months ended September 30, 2023, there were neither new business and other risks nor material changes in thebusiness and other risks that were described in the Company’s Annual Securities Report for the fiscal year ended March 31, 2023.

2. Management’s Analysis of Financial Position, Business Performance, and Cash Flows
Forward-looking statements presented in this document are based on judgments made by the Group as of September 30, 2023.
As the corporate performance management segmentation within the Company Group has partially been changed, the name of thereportable segment “Mobile Data Solution business” has been changed to “Global Data Intelligence business” from the first quarterof the current fiscal year .This name change has no effect on the segment information.
(1) Review of financial performance<External environment>
The data intelligence market, which our Global Data Intelligence business serves, is growing in the Asia Pacific region. The
market owes its growth to law enforcement agencies, for whom leading-edge digital intelligence tools from Cellebrite DI Ltd.
(hereafter, “Cellebrite"), such as Universal Forensic Extraction Device (UFED), are now indispensable solutions. In addition, themarket has seen an increasing number of users introducing new digital intelligence tools to combat increasingly diverse cybercrimes.
Regarding the pachinko and pachislot market, one of the markets that our Entertainment-related business serves, smart gamemachines began being introduced in November, 2022, and now there are popular games for these machines. Thus, the demand forsuch machines, mainly smart pachislot machines, has been increasing. Meanwhile, although there have been signs of recovery fromthe semiconductor supply crunch due to the global shortage, there are still issues such as the ongoing upsurge of raw material prices
and a decrease in number of pachinko parlors. The future of the market thus remains uncertain.
The game content market is expected to continue growing as games have been established as enjoyable home entertainment
during the COVID-19 pandemic. Meanwhile, the market has been increasingly competitive as the number of games released has been
increasing in an accelerated manner because the technological advancement has made it possible for a single person to develop video
game with a single PC.
The market environments of some of our core businesses are uncertain as described above. Against this backdrop, we are working
to establish new core products and services in line with the current social trend of moving towards utilization of leading-edge
technologies, such as the Internet of things (IoT), augmented reality (AR), and artificial intelligence (AI) for further improvement of
the Group’s business performance.
In the IoT market, one of the markets that our New IT-related business serves, the range of IoT applications has been expanding
because digitalization is imperative to eliminate labor shortages and enhance productivity. Thus, the demand for monitoring andcontrol systems for remotely accessing industrial or other equipment has been increasing. Meanwhile, there recently has been a trendof utilizing edge computing whereby network devices locally process more data than central-management devices so that dependence
and loads on clouds can be reduced. To respond to this recent trend, industrial network equipment capable of stably operating for along period of time has become essential. Furthermore, migration from 3G to LTE (4G) is smoothly ongoing as communication carriers
are scheduled to successively terminate 3G services by March 2026.
While the crunch in overall semiconductor supply is easing, component prices are continuing to soar, which may have impacts
on supply of our products and our profits, and the impacts remain uncertain at present.
<Competitive advantages>
In the Global Data Intelligence business, over many years, the Company served law enforcement agencies who deal with techsavvy criminals (criminal organizations) as well as explosive increases in digital evidence. More specifically, we have provided themwith state-of-the-art digital intelligence tools, as well as training and services over the years, to enhance the productivity ofinvestigation resources. UFED Ultra, our next-generation solution, makes it easier for digital investigation agencies to legally accessall mobile phones and extract digital evidence. We are also moving forward with investments in AI development to significantly
contribute to investigation agencies’ identifying and extracting relevant evidence from a massive amount of data and huge numbers―3―

of devices, applications, and search warrants.
In the game machine business of our Entertainment-related business, the Company specializes in certain business fields andcustomers to establish strong trustful relationships and step up our expressive and technical abilities in the specific areas. This enables
us to execute development of contents highly attractive as products, as well as development of high-quality control boards, thus
allowing us to enhance our competitive advantages.
In the game content business, the Company internally handles all phases, from development to operation, of mobile games under
the famous Shanghai brand. This enables us to maintain cost-efficient profits over a long term. Furthermore, having a number ofintellectual properties (IPs) in the genre of retro games, which is regaining popularity mainly in the European market, we have theprospect of further profit expansion through effective utilization of the IPs.
In the New IT-related business, our efforts center on the following: to maintain technological competitive advantages by
establishing strong trustful relationships with individual communication carriers and partners and acquiring patents related tomigration from 3G to LTE (4G) networks based on technologies accumulated over many years; and to further reinforce ourcompetitiveness by developing products with keywords being 5G and edge AI. Rooster, an industrial network device, supports dual
SIM and makes it possible to use lines of different communication carriers redundantly. This device automatically detects a failure in
a communication carrier network and switches from the main network to the sub-network, thereby eliminating the effects of network
communication failures and enabling uninterrupted operation of remote monitoring and control, and data collection. Thus, sales of
Rooster have been growing steadily.
In the IoT field, a problem is to reduce large operational management burdens and maintenance costs that are required for a large
number of IoT devices installed in remote locations once they are started to be installed. Our device management service called
SunDMS enables alive monitoring and centralized control of Rooster, thus considerably reducing operational costs. This service has
been already employed by about 1,000 companies for their operation. SunDMS, an essential service in network redundancy
construction and maintenance operation, can realize stable operation, whereby the Company can be differentiated from andadvantageous over other companies.
<Management initiatives>
The Global Data Intelligence business has been increasingly interrelated with the following phases in the scenes of increasingly
sophisticated and organized cybercrimes: digital intelligence (forensics), which is investigation and analysis after the occurrence ofincidences; and active cyber defense and threat intelligence, which are intended to predict and prevent in advance incidents where law
enforcement agencies are targeted. We are determined to fortify our training and support structures into more specialized ones andconduct activities of providing a lineup of products equipped with new technologies so that Japanese law enforcement agencies cancope with a range of modus operandi, and also enhance sales activities in the Asia Pacific region. In response to growing calls forincreasingly diverse cybercrimes to be tackled, we have begun to domestically market relevant new products based on information on
its own global digital intelligence tools.
In the new IT business, we are committed to expanding our stock businesses through the following measures: further expanding
the sales of the industrial network device Rooster; making efforts to develop solutions including OKUDAKE Sensor Solution; focusing
on data businesses such as data visualization and analysis; and increasing added values by enhancing our services.
Furthermore, to improve our earning power, the R&D Department—a department created in October 2022 by combining theMarketing Department and Technology Development Department—is moving forward with data businesses, more specifically,
technological development in the AI, information security, and healthcare fields. The Company is conducting joint research with auniversity that owns a technological seed, thereby pursuing development of differentiated products.

<Overview of products and services>
In the Global Data Intelligence business, we are moving forward with providing products, services, and support related to threat
intelligence and active cyber defense in addition to conventional digital intelligence products.
We released Cellebrite Guardian, a new SaaS-based evidence management solution, which has been introduced by an increasing
number of users. Cellebrite Guardian facilitates the process flow of centralized digital-evidence control including storage, management,
and sharing of digital evidence. This solution also enables users to share, copy, and forward evidence data and browse past data under
the authority of law enforcement agencies to enhance the efficiency of investigation flows.

―4―Meanwhile, we have proven our high technological capability in digital forensics, for example, by winning two Forensic
Focus4:cast awards—DFIR Commercial Tool of the Year and Investigator of the Year—for three consecutive years.
To add new products to our lineup, we have signed a strategic partnership agreement for sales in Japan with Sixgill headquarteredin Israel, a global leading company in the threat intelligence field, and started selling its threat intelligence solution named Cybersixgill.
This product is equipped with a high-performance automatic information collection capability based on Sixgill’s original algorithms,
targeting the deep web and dark web. It serves as a tool that enables organizations to detect and protect itself against phishing, dataleakage, fraud, malware, misuse of vulnerability, etc. and strengthen cyber resilience in real-time to keep their exposure to risks as
small as possible. We expect Cybersixgill to be introduced into not only government and law enforcement agencies but also privatecompanies, such as financial institutions, at an accelerated pace.
In the game machine business of the Entertainment-related business, we work as a contractor responsible for all phases of content
development for pachinko and pachislot games, including planning, designing, video production, and programming, as well as allphases related to control boards from designing to manufacturing. In addition, leveraging on our know-how in content development,
we also offer smartphone applications simulating real pachinko and pachislot machines to contribute to the operation of real pachinko
and pachislot machines in the market and raise awareness of contents.
In the game content business, several plans utilizing IPs related to retro games are now underway. We plan to launch SHANGHAILEGEND for Nintendo Switch™ in December 7, 2023, and Hebereke2 for Nintendo Switch™ by March 31, 2024.
In the New IT-related business, our LTE (4G) migration strategy products for beverage vending machines, A330 and A900, havebeen adopted by several major beverage vendors and already started to be installed. Our router products such as Rooster are promoted
as products differentiated from those of other companies with the emphasis on features of network redundancy and linkage with
SunDMS, and have been producing steady sales. Aiming to further expand our businesses, we have released an edge computer named
LBX8110 in September 2023, where AI image analysis can be implemented. Serving us as a new product in the new IoT field, thisedge computer offers new solutions based on the AI technologies such as image analysis.
Lastly, our sensor device OKUDAKE Sensor has entered the full-scale introduction phase for HACCP-based temperature
management or predictive maintenance based on acceleration (vibration) sensor.
<Overview of the consolidated statements of income>
The Company as a whole posted net sales of ¥4,648 million (down 78.1% year-on-year). This is mainly because Cellebrite, which
was a consolidated subsidiary throughout the six months ended September 30, 2022, became an associate accounted for using equity
method as of December 31, 2022. Likewise, gross profit, indicative of the added value created by the Group, decreased to ¥1,393
million (down 90.7% year-on-year), and gross profit margin decreased to 30.0% (down by 40.7 points), due in part to the net sales
decrease as mentioned above.
Consolidated net sales
Six months ended
September 30, 2022
(Millions of yen)
17,246Six months ended
September 30, 2023
(Millions of yen)
484

Year-on-year change
in percent(%)(97.2)

3,135

2,742

(12.5)New IT-related

822

1,430

74.0

Adjustment

(9)

(9)

21,195

4,648

Segment
Global Data Intelligence
Entertainment related

Total

―5―

(78.1)

Gross profit
Six months ended
September 30, 2022
(Millions of yen)
13,897Six months ended
September 30, 2023
(Millions of yen)
110Year-on-year change
in percent(%)(99.2)

Entertainment related

770

814

5.7

New IT-related

304

458

50.7

Adjustment

9

9

-

Total

14,982

1,393

Segment

Six months ended
September 30, 2022(%)

segment
Global Data Intelligence(90.7)

Gross profit margin
Six months ended
September 30, 2023(%)

Global Data Intelligence

80.6

22.8

Entertainment-related

24.6

29.7

New IT-related

37.0

32.1

70.7

30.0

Total

<Overview of selling, general and administrative expenses>
Consolidated selling, general and administrative expenses came to ¥1,322 million (down 92.0% year-on-year). This is mainly
because Cellebrite, which was a consolidated subsidiary throughout the six months ended September 30, 2022, became an associateaccounted for using equity method as of December 31, 2022.
Selling, general and administrative expenses
Six months ended
September 30, 2022
(Millions of yen)
15,146Six months ended
September 30, 2023
(Millions of yen)
51

Year-on-year change
in percent(%)(99.7)

Entertainment-related

439

482

9.7

New IT-related

284

354

24.7

Segment
Global Data Intelligence

Adjustment

556

434

-

16,4271,322(92.0)

Six months ended
September 30, 2022
(Millions of yen)
5,374

Six months ended
September 30, 2023
(Millions of yen)-

Year-on-year change
in percent(%)(100.0)Entertainment-related

244

323

32.0

New IT-related

140

109

(22.2)

Adjustment

45

66

-

5,804

499

(91.4)

Total
Research and development expenses
Segment
Global Data Intelligence

Total<Overview of operating profit>

The Company posted operating profit of ¥71 million (operating loss of ¥1,445 million for the six months ended September 30,2022) on a consolidated basis. This is mainly because Cellebrite, which was a consolidated subsidiary throughout the six months
ended September 30, 2022, became an associate accounted for using equity method as of December 31, 2022.

―6―

Operating profit
Six months ended
September 30, 2022
(Millions of yen)
(1,249)Six months ended
September 30, 2023
(Millions of yen)
59

Year-on-year change
in percent(%)-

Entertainment-related

340

341

0.3

New IT-related

20

104

416.6

Adjustment

(556)

(434)

-

(1,445)71-

Segment
Global Data Intelligence

Total<Overview of ordinary profit and profit attributable to owners of parent>
The Company posted ordinary loss of ¥4,448 million (ordinary profit of ¥12,788 million for the six months ended September 30,2022) on a consolidated basis. This is mainly because it recorded share of loss of entities accounted for using equity method, amounting
to ¥4,498 million, due to loss on valuation of derivatives in Cellebrite. The Company posted loss attributable to owners of parent of¥4,229 million (profit attributable to owners of parent of ¥6,414 million for the six months ended September 30, 2022).
<Overview of individual segments>[Global Data Intelligence business]
Six months ended
September 30, 2022
(Millions of yen)Six months ended
September 30, 2023
(Millions of yen)

Year-on-year change
in amount(Millions of yen)

Year-on-year change
in percent(%)

Net Sales

17,246484(16,762)(97.2)

Segment profit (loss)(1,249)

59

1,308

-

Net sales decreased by ¥16,762 million mainly because Cellebrite, which was a consolidated subsidiary throughout the six months
ended September 30, 2022, became an associate accounted for using equity method as of December 31, 2022.
[Entertainment-related business]

Net Sales
Segment profit

Six months ended
September 30, 2022
(Millions of yen)Six months ended
September 30, 2023
(Millions of yen)

Year-on-year change
in amount(Millions of yen)

Year-on-year change
in percent
(%)

3,135

2,742

(393)

(12.5)

340

341

1

0.3

Net sales for the game machine business decreased as a result of sales of control boards being less than forecast due to the low
operation level of pachinko machines, despite favorable sales and operation of pachislot machines that we developed as a contractor.
[New IT-related business]
Six months ended
September 30, 2022
(Millions of yen)Six months ended
September 30, 2023
(Millions of yen)

Year-on-year change
in amount(Millions of yen)

Year-on-year change
in percent(%)

Net Sales

822

1,430

608

74.0

Segment profit

20

104

84

416.6

Net sales and profit for this segment as a whole both increased because the M2M business saw the difficulty in component
procurement easing although still being affected to some extent by soaring raw material prices.
(2) Explanation of financial position(Assets, liabilities, and net assets)(Assets)
Total assets stood at ¥40,372 million, a decrease of ¥1,395 million from the end of the previous fiscal year.
Current assets stood at ¥23,251 million, a decrease of ¥584 million from the end of the previous fiscal year. The main factors
for decrease were decreases of ¥3,871 million in accounts receivable, ¥1,041 million in cash and deposits, and ¥791 million in notes―7―and accounts receivable - trade. The main factors for increase were increases of ¥3,300 million in money held in trust, ¥1,316
million in raw materials, ¥293 million in finished goods, and ¥151 million in work in process.
Non-current assets stood at ¥17,120 million, a decrease of ¥811 million from the end of the previous fiscal year. The main
factor for increase was an increase of ¥2,639 million in investment securities, while the main factor for decrease was a decrease of¥3,468 million in shares of subsidiaries and associates.
(Liabilities)
Total liabilities stood at ¥8,071 million, an increase of ¥1,317 million from the end of the previous fiscal year. Current liabilities
stood at ¥4,967 million, an increase of ¥942 million from the end of the previous fiscal year. The main factors for increase wereincreases of ¥524 million in notes and accounts payable – trade, ¥338 million in contract liabilities, and ¥249 million in income
taxes payable.
Non-current liabilities stood at ¥3,103 million, an increase of ¥375 million from the end of the previous fiscal year. The main
factor for increase was an increase of ¥387 million in deferred tax liabilities.
(Net assets)
Total net assets stood at ¥32,300 million, a decrease of ¥2,713 million from the end of the previous fiscal year. The main
factor for decrease was a decrease of ¥4,681 million in retained earnings, while the main factor for increase was an increase of¥1,828 million in valuation difference on available-for-sale securities.

(3) Statuses of cash flows
As of September 30, 2023, the amount of cash and cash equivalents (“Cash”) declined by ¥1,041 million to ¥1,892 million fromthe end of the previous fiscal year on a consolidated basis. The respective statuses of cash flows and their contributing factors during
the six months ended September 30, 2023 are as follows.
(Cash flows from operating activities)
Net cash provided by operating activities in the six months ended September 30, 2023 was ¥3,816 million ( ¥9,484 million
used in the six months ended September 30, 2022). The main factor for increase in cash was income taxes refund of ¥3,844 million.
(Cash flows from investing activities)
Net cash used in investing activities in the six months ended September 30, 2023 was ¥3,495 million ( ¥4,974 million used in
the six months ended September 30, 2022). The main factor for decrease in cash was investments in money held in trust of ¥4,000
million.
(Cash flows from financing activities)
Net cash used in financing activities in the six months ended September 30, 2023 was ¥1,385 million (¥18,904 million provided
in the six months ended September 30, 2022). The main factors for decrease in cash were purchase of treasury shares of ¥903
million and dividends paid of ¥452 million.
(4) Issues in business and finance to be addressed
There has been no material change in issues to be addressed by the Group during the six months ended September 30, 2023.
(5) Research and development activities
The Company recorded research and development expenses of ¥499 million in total on a consolidated bases during the six months
ended September 30, 2023.

―8―

3. Material Business Agreements, etc.
Not applicable.

―9―III. Information on the Filing Company
1. Information on the Company’s Shares(1) Total number of shares, etc.
1) Total number of shares
Class

Total number of shares authorized to be issued

Common share

48,000,000

Total

48,000,000

2) Total number of shares issued
As of the end of theperiod under review(September 30, 2023)

As of thesubmission date(November 14, 2023)

Common share

24,007,728

Total

24,007,728

Class

Stock exchange
on which theCompany is listed

Description

24,007,728

Standard Market of theTokyo Stock Exchange

One unit of stock
constitutes 100 shares.

24,007,728−−

Note: The number of shares issued as of the submission date does not include the number of shares issued upon exercise of shareacquisition rights between November 1, 2023 and the filing date of this Quarterly Securities Report.

(2) Status of the stock acquisition rights
1) Details of stock option plans
Not applicable2) Rights plans
Not applicable(3) Status in the exercise of bonds with stock acquisition rights with exercise price amendment
Not applicable(4) Changes in the total number of shares issued, the amount of capital stock, and others
Date
July 1 to September
30, 2023

Change in total Balance of total
Changes in
number of shares number of shares capital stock
issuedissued(Thousands of(Shares)(Shares)yen)−−

24,007,728―10―

Balance ofcapital stock(Thousands ofyen)
2,097,606

Changes in legal Balance of legal
capital surplus capital surplus(Thousands of (Thousands of
yen)
yen)
−

2,111,073

(5) Major shareholders

Name

Address

As of September 30, 2023
Percentage of shares
Number ofheld to the total
shares heldnumber of issued(Shares)shares (excluding
treasury shares) (%)

Tokai Engineering Kabushiki
Kaisha26-2 Aza-Ishizaka, Hiroji-cho, Showa-ku, Nagoyashi, Aichi

4,267,600

19.2

FUJISHOJI CO., LTD.

1-1-4 Uchihonmachi, Chuo-ku, Osaka-shi, Osaka

940,000

4.2

MLI FOR CLIENT GENERALOMNI NON COLLATERAL NON
TREATY-PB (Standing proxy:
BofA Securities Japan Co., Ltd.)

Merrill Lynch Financial Centre, 2 King Edward
Street, London, United Kingdom (Nihombashi 1chome Mitsui Building, 1-4-1 Nihombashi, Chuo-ku,
Tokyo)

918,210

4.1

Interactive Brokers LLC(Standing proxy: Interactive
Brokers Securities Japan Inc.)

One Pickwick Plaza Greenwich, Connecticut 06830,
USA (3-2-5 Kasumigaseki, Chiyoda-ku, Tokyo)

837,900

3.8

STATE STREET BANK CLIENTOMNIBUS OM04 (Standing proxy:
HSBC Bank Tokyo Branch)

338 Pitt Street, Sydney, NSW 2000, Australia (3-11-1
Nihombashi, Chuo-ku, Tokyo)

717,158

3.2

Goldman Sachs International(Standing proxy: Goldman Sachs
Japan, Co., Ltd.)

Plumtree Court, 25 Shoe Lane, London EC4A 4AU,
U.K. (Roppongi Hills Mori Tower, 6-10-1 Roppongi,
Minato-ku, Tokyo)

708,642

3.2

CEPLUX-THE INDEPENDENTUCITS PLATFORM 2 (Standing
proxy: Citibank, N.A., Tokyo
Branch)31, Z.A. Bourmicht, L-8070, Bertrange, Luxembourg(6-27-30 Shinjuku, Shinjuku-ku, Tokyo)

703,200

3.2

Michie Utsumi

Showa-ku, Nagoya-shi, Aichi

680,000

3.1

Yashue Watanabe

Tempaku-ku, Nagoya-shi, Aichi

680,000

3.1

OASIS INVESTMENTS II
MASTER FUND LTD. (Standing
proxy: Citibank, N.A., Tokyo
Branch)Maples Corporate Services Ltd., PO BOX 309,
Ugland House South Church Street, George Town,
Grand Cayman KY1-1104, Cayman Islands(6-27-30 Shinjuku, Shinjuku-ku, Tokyo)

678,220

3.0

Total

−

11,130,930

50.1

―11―

(6) Status of voting rights
1) Issued shares
As of September 30, 2023
Number of shares(Shares)Number of voting
rights (Units)

Details

Shares without voting rights

−

−

−

Shares with limited voting rights(treasury shares, etc.)
Shares with limited voting rights(others)
Shares with full voting rights(treasury shares, etc.)
Shares with full voting rights(others)

−

−

−

−

−

−

(Treasury shares)
Common shares
1,794,100−−

Classification

Shares below one unit−

Common shares

22,208,600

Common shares

5,028

−

−

24,007,728−−

Total number of shares issued
Total voting rights held by all
shareholders

222,086−−

222,086

2) Treasury shares, etc.
Number of shares Number of shares
held under own held under thenamenames of others(Shares)(Shares)

As of September 30, 2023
Percentage of
Total
shares held to the(Shares)
total number ofshares issued (%)

Shareholder

Address of shareholder(Treasury shares)
SUNCORPORATION

250 Asahi, Kochino-cho,
Konan-shi, Aichi

1,794,100−

1,794,100

7.47

Total

−

1,794,100−

1,794,100

7.47

2. Directors and Officers
Not applicable―12―IV Financial Information
1．Basis of preparation of the quarterly consolidated financial statements
The quarterly consolidated financial statements of the Company are prepared in accordance with the “Regulation on the Terminology,
Forms, and Preparation Methods of Quarterly Consolidated Financial Statements” (Cabinet Office Order No. 64 of 2007).

2．Note on independent audit
Pursuant to the first paragraph of Article 193-2 of the Financial Instruments and Exchange Act, the Company’s quarterly consolidated
financial statements for the three months ended September 30, 2023 (July 1, 2023 to September 30, 2023) and for the six months
ended September 30, 2023 (April 1, 2023 to September 30, 2023) received a quarterly review from Frontier Audit Corporation.

―13―

1. Quarterly Consolidated Financial Statements(1) Quarterly Consolidated Balance Sheet

Previous fiscal year
(As of March 31, 2023)(Thousands of yen)
The second quarter ofthe current fiscal year
(As of September 30, 2023)

AssetsCurrent assets
Cash and deposits
Money held in trust

3,138,716
10,900,000

2,097,055
14,200,000

Notes and accounts receivable - trade
Accounts receivable

2,550,051
3,892,155* 1,758,576

Finished goods
Work in process

265,381394,134

559,199545,293

Raw materials
Other2,055,861
639,898

3,372,655
698,111

Allowance for doubtful accounts

21,044

(597)

(398)

23,835,600

23,251,537

949,043
679,701

949,043
666,0121,628,744

1,615,055

510,007483,691

Other

274,529

275,904

Total intangible assets

784,537

759,596

11,646,475
3,468,520

14,286,454―

Other
Allowance for doubtful accounts

426,543(23,040)

483,439(23,970)

Total investments and other assets

15,518,498

14,745,923

17,931,780

17,120,575

41,767,380

40,372,113

Total current assets
Non-current assets
Property, plant and equipment
Land
Other, net
Total property, plant and equipment
Intangible assets
Goodwill

Investments and other assets
Investment securities
Shares of subsidiaries and associates

Total non-current assets
Total assets―14―

Previous fiscal year
(As of March 31, 2023)(Thousands of yen)
The second quarter ofthe current fiscal year
(As of September 30, 2023)

Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term borrowings

2,411,060
161,395* 2,935,984

43,778290,385

39,287
248,577

Accounts payable
Income taxes payable

1,355
2,904

3,887
252,233

Advances received
Contract liabilities

45,559782,468

80,111
1,120,775

Provision for bonuses
Other

197,175
88,737152,067
39,385

Total current liabilities

4,024,821

4,967,385

249,1112,398,498

282,737
2,785,653

Deferred tax liabilities for land revaluation
Retirement benefit liability

9,920
10,4289,920
10,438

Other

60,794

15,1772,728,752

3,103,926

6,753,574

8,071,311

Share capital
Capital surplus

2,089,685
3,317,507

2,097,606
3,323,557

Retained earnings
Treasury shares

30,773,457(2,806,314)

26,091,745(3,694,780)

Total shareholders’ equity

33,374,335

27,818,128

2,964,829

4,793,291(24,755)(434,203)―(434,203)

Current portion of long-term borrowings
Accrued expenses

95,075

Non-current liabilities
Long-term borrowings
Deferred tax liabilities

Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity

Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation adjustment(972,154)

9,715

Total accumulated other comprehensive income

1,533,715

4,368,803

Share award rights

27,01324,012

Share acquisition rights

78,74189,85735,013,806

32,300,801

41,767,380

40,372,113

Total net assets
Total liabilities and net assets―15―

(2) Quarterly Consolidated Statement of Income and Consolidated Statement of Comprehensive Income(Quarterly Consolidated Statement of Income)(For the six months ended September 30)

Net sales
Cost of sales

For the six months ended
September 30, 2022
(From April 1, 2022
to September 30, 2022)
21,195,296
6,212,749(Thousands of yen)
For the six months ended
September 30, 2023
(From April 1, 2023
to September 30, 2023)
4,648,104
3,254,613

Gross profit

14,982,546

1,393,491* 16,427,743* 1,322,034(1,445,196)

71,456116,059

15,7305,191,406
8,974,378――

11,53825,807

14,293,383

41,538Interest expenses
Foreign exchange losses
Share of loss of entities accounted for using equity
methodProvision of allowance for doubtful accounts

10,319―1,823
29,640―4,498,420

28,566―

Commission for purchase of treasury shares
Other

2,884
18,231

22,704
8,789

Selling, general and administrative expenses
Operating profit (loss)
Non-operating income
Interest and dividend income
Foreign exchange gains
Gain on valuation of derivatives
Other
Total non-operating income
Non-operating expenses

Total non-operating expenses

60,001

4,561,378

12,788,185(4,448,383)

Gain on sale of non-current assets
Gain on reversal of share acquisition rights

59
198

―
476

Total extraordinary income

257

476

Ordinary profit (loss)
Extraordinary income

Extraordinary losses
Loss on sale of non-current assets

3,807

―

Loss on sale of shares of subsidiaries
Loss on liquidation of subsidiaries

85,491
―

―
2,342

Other

31,0670

Total extraordinary losses

120,366

2,342

Profit (loss) before income taxes

12,668,076(4,450,248)

856,639
153,998

228,027(449,213)

Total income taxes

1,010,637(221,186)

Profit (loss)

11,657,438(4,229,062)

Profit attributable to non-controlling interests

5,242,691―

Profit (loss) attributable to owners of parent

6,414,746(4,229,062)

Income taxes - current
Income taxes - deferred―16―

(Quarterly Consolidated Statement of Comprehensive Income)(For the six months ended September 30)
For the six months ended
September 30, 2022
(From April 1, 2022
to September 30, 2022)
11,657,438(Thousands of yen)
For the six months ended
September 30, 2023
(From April 1, 2023
to September 30, 2023)(4,229,062)

Valuation difference on available-for-sale securities
Deferred gains or losses on hedges(8,172)(423,892)

1,795,472―

Foreign currency translation adjustment
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income(163,408)

9,715

―

1,029,900

Profit (loss)
Other comprehensive income(595,472)

2,835,087

Comprehensive income

11,061,965(1,393,974)

Comprehensive income attributable toComprehensive income attributable to owners ofparentComprehensive income attributable to non-controllinginterests

5,652,428(1,393,974)

5,409,537――17―

(3) Quarterly Consolidated Statement of Cash Flows(Thousands of yen)
For the six months ended
September 30, 2023
(From April 1, 2023
to September 30, 2023)

For the six months ended
September 30, 2022
(From April 1, 2022
to September 30, 2022)
Cash flows from operating activities
Profit (loss) before income taxes

12,668,076(4,450,248)

Depreciation
Amortization of goodwill

667,787
261,926

119,285
26,315

Share-based payment expenses
Increase (decrease) in allowance for doubtful
accounts）
Increase (decrease) in provision for bonuses
Increase (decrease) in retirement benefit liability

368,077

26,16563,178(198)(515,455)(25,300)(45,857)
9

Interest and dividend income
Interest expenses(116,059)
10,319(15,730)
1,823(5,461,213)(19,370)―4,498,420(8,974,378)
85,491――

Loss (gain) on sale of non-current assets
Gain on reversal of share acquisition rights

3,747
(198)

―
(476)

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

81,440(597,677)

796,132(1,761,585)

Increase (decrease) in trade payables
Decrease (increase) in prepaid expenses(402,748)―

522,999(112,726)

Increase (decrease) in contract liabilities
Increase (decrease) in accrued expenses(265,058)(805,960)

338,163
63,134

Other, net

1,059,167(26,698)

Subtotal(1,894,838)(40,444)

164,129

15,730(10,319)(7,743,233)(1,823)(673)―

3,844,031(9,484,261)

3,816,820

Foreign exchange losses (gains)Share of loss (profit) of entities accounted for using
equity method
Loss (gain) on valuation of derivatives
Loss (gain) on sale of shares of subsidiaries

Interest and dividends received
Interest paid
Income taxes paid
Income taxes refund
Net cash provided by (used in) operating activities―18―

For the six months ended
September 30, 2022
(From April 1, 2022
to September 30, 2022)(Thousands of yen)
For the six months ended
September 30, 2023
(From April 1, 2023
to September 30, 2023)

Cash flows from investing activities
Net decrease (increase) in time deposits

2,310,932―

Purchase of securities
Proceeds from redemption of securities(4,433,176)
1,239,801――

Proceeds from cancellation of money held in trust
Investments in money held in trust――

Purchase of investment securities
Proceeds from redemption of investment securities(3,456,715)―(4,000,000)―
46,484(608,176)(61,282)(87,435)(159,916)

34,4205,591

Net cash provided by (used in) investing activities(4,974,196)(3,495,276)

Cash flows from financing activities
Net increase (decrease) in short-term borrowings(3,403,000)(9,062)

Proceeds from long-term borrowings
Repayments of long-term borrowings

20,000(21,998)―(30,261)

Dividends paid
Proceeds from exercise of employee share options
Proceeds from share issuance to non-controllingshareholders
Purchase of treasury shares
Proceeds from sale of shares of subsidiaries not
resulting in change in scope of consolidation
Other, net(478,821)
5,374(452,648)
11,988627,357―(414,193)(903,099)

22,561,992―

Purchase of property, plant and equipment
Purchase of intangible assets
Other, net

700,000

7,549(2,097)

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

18,904,261(1,385,180)

3,913,412

21,9748,359,215(1,041,662)

Cash and cash equivalents at beginning of period

27,438,438

2,934,094* 35,797,654* 1,892,432

Cash and cash equivalents at end of period―19―[Notes](Additional Information)(Liability financial instruments in Cellebrite)
Cellebrite, which is the Company’s associate accounted for using equity method, assessed certain restricted shares andwarrant liabilities, both of which it inherited from TWC Tech Holding II Corp. (hereafter, “TWC Corp.”), at fair value andrecognized them as liabilities based on the price adjustment clause in the merger agreement signed on August 30, 2021 when it
was listed on the NASDAQ market in the United States of America.
The Company therefore reported share of loss (profit) of entities accounted for using equity method as a result of changes
in fair value of the liabilities due to the fluctuation of Cellebrite’s share price, etc. as non-operating income/expenses.
(1) Price adjustment clauses based on the merger agreement
As consideration adjustment after the closing of the transaction, if Cellebrite’s volume weighted average price (VWAP)
exceeds USD 12.5, USD 15 and USD 17.5 for 20 days out of any 30 days within five years from the closing date, every timeeach condition is satisfied, respectively, Cellebrite will issue 5,000,000 shares (up to 15,000,000 shares) for the shareholders at
the time of closing, including the Company, according to their holding ratios. Also, if change of control which is defined in themerger agreement takes place in the same period, 15,000,000 shares will be issued at the timing of occurrence of the event.
(2) Restricted shares
Cellebrite has inherited restricted shares for TWC Corp.’s sponsors. If Cellebrite’s volume weighted average price(VWAP) exceeds USD 12.5 and USD 15 for 20 days out of any 30 days within seven years from the closing date, rights on
3,000,000 shares will be vested, respectively. When it exceeds USD 30, rights on 1,500,000 shares will be vested. Also, ifchange of control which is defined in the merger agreement takes place in the same period, 7,500,000 shares will be issued at
the timing of occurrence of the event.
(3) Warrant liabilities
Cellebrite has inherited the warrant liabilities (publicly offered warrant liability and privately offered warrant liability)
issued by TWC Corp. in the merger agreement with the latter. Holders of the warrant liabilities have rights to purchase sharesof Cellebrite at the price of USD 11.5 per share on and after September 29, 2021. The warrant liabilities will expire upon eitherof five years after the closing date, redemption by Cellebrite based on certain requirements, or Cellebrite’s liquidation.
(Notes to Quarterly Consolidated Balance Sheet)*

For the accounting treatment of matured notes due on quarterly balance sheet date, the balance sheet date of the second
quarter of the current fiscal year fell on a holiday of financial institutions. The Company, however, treated them as having been
settled on the maturity date. The amounts of the notes due on the balance sheet date of the second quarter of the current fiscal
year are as follows:

Notes receivable - trade― thousand yen

The second quarterof the current fiscal year
(As of September 30, 2023)
10,660 thousand yen

Notes payable - trade― thousand yen

103,164 thousand yen

Previous fiscal year
(As of March 31, 2023)―20―

(Notes to Quarterly Consolidated Statement of Income)*

Major items of expenses of selling, general and administrative expenses and their amounts are as follows:
Six months ended September 30, 2022 Six months ended September 30, 2023
(From April 1, 2022
(From April 1, 2023
to September 30, 2022)
to September 30, 2023)
5,341,185 thousand yen
278,439 thousand yen

Salaries, allowances and bonuses
Research and development expenses
Provision of allowance for doubtful
accounts
Provision for bonuses

5,804,771 thousand yen
82,227 thousand yen

Retirement benefit expenses

499,296

thousand yen(625) thousand yen

37,500 thousand yen

44,098thousand yen

260,477 thousand yen

8,864

thousand yen(Notes to Quarterly Consolidated Statement of Cash Flows)*

The relationship between the balance of cash and cash equivalents at the end of the six months ended September 30, 2023
and the amount of items stated in quarterly consolidated balance sheet is as follows:

Cash and deposits
Time deposits with deposit terms ofover three months
Cash and cash equivalents

Six months ended September 30, 2022 Six months ended September 30, 2023
(From April 1, 2022
(From April 1, 2023
to September 30, 2022)
to September 30, 2023)
38,495,378 thousand yen
2,097,055 thousand yen(2,697,724) thousand yen(204,623) thousand yen

35,797,654 thousand yen

1,892,432 thousand yen(Notes to Shareholders’ Equity, etc.)
Six months ended September 30, 2022 (From April 1, 2022 to September 30, 2022)
1. Dividends paid
Resolution

Class ofsharesTotal amount(thousands ofyen)

Dividend pershare (yen)Ordinary General
Meeting of
Shareholders heldon June 23, 2022

Commonstock

478,821

20

Record date

Effective date

Sources ofdividend

March 31, 2022

June 24, 2022

Retainedearnings

Record date

Effective date

Sources ofdividend

March 31, 2023

June 23, 2023

Retainedearnings

Six months ended September 30, 2023 (From April 1, 2023 to September 30, 2023)
1. Dividends paid
Resolution

Class ofsharesTotal amount(thousands ofyen)

Dividend pershare (yen)Ordinary General
Meeting of
Shareholders heldon June 22, 2023

Commonstock

452,648

20―21―

(Segment information, etc.)[Segment information]Ⅰ

Six months ended September 30, 2022 (From April 1, 2022 to September 30, 2022)

1．Information on net sales and profit (loss) for each reportable segment and information on the disaggregation of revenue(Thousands of yen)Amountreported on the
Global Data
AdjustedquarterlyEntertainment- New IT-relatedIntelligenceTotalamountconsolidated
related businessbusinessbusiness(Note 1)statement ofincome(Note 2)
Sales
Goods transferred at a point in
time

5,210,081

3,125,932

796,521

9,132,535―

9,132,535

Goods transferred over time

12,036,895―

25,865

12,062,760―

12,062,760

17,246,977

3,125,932

822,387

21,195,296―

21,195,296

17,246,977

3,125,932

822,387

21,195,296―

21,195,296

―

9,597

―

9,597

―

Total

17,246,977

3,135,529

822,387

21,204,894(9,597)

21,195,296

Segment profit (loss)(1,249,336)

340,732

20,241(888,362)(556,833)(1,445,196)

Revenue from contracts withcustomers
Revenue from externalcustomers
Transactions with othersegments(Note) 1

2(9,597)

Adjusted amount for segment loss of ¥(556,833) thousand includes elimination of intersegment transactions of ¥13
thousand and company-wide expenses not allocated to each reportable segment of ¥(556,846) thousand. The companywide expenses mainly consist of general and administrative expenses not attributable to reportable segments.
Segment profit (loss) has been adjusted with operating (loss) on the quarterly consolidated statement of income.

―22―

Ⅱ

Six months ended September 30, 2023 (From April 1, 2023 to September 30, 2023)

1．Information on net sales and profit (loss) for each reportable segment and information on the disaggregation of revenue(Thousands of yen)Amountreported on the
Global Data
AdjustedquarterlyEntertainment- New IT-relatedIntelligenceTotalamountconsolidated
related businessbusinessbusiness(Note 1)statement ofincome(Note 2)
Sales
Goods transferred at a point in
time

41,466

2,732,334

1,406,629

4,180,430―

4,180,430

Goods transferred over time

443,462―

24,211

467,673―

467,673

484,928

2,732,334

1,430,841

4,648,104―

4,648,104

484,928

2,732,334

1,430,841

4,648,104―

4,648,104

―

9,687

―

9,687

―

484,928

2,742,022

1,430,841

4,657,792(9,687)59,251

341,747

104,559

505,558

Revenue from contracts withcustomers
Revenue from externalcustomers
Transactions with othersegments
Total
Segment profit(Note) 1

2(9,687)(434,102)

4,648,104
71,456

Adjusted amount for segment profit of ¥(434,102) thousand includes company-wide expenses not allocated to eachreportable segment of ¥(434,102) thousand. The company-wide expenses mainly consist of general and administrative
expenses not attributable to reportable segments.
Segment profit has been adjusted with operating profit on the quarterly consolidated statement of income.

2．Information on changes in reportable segments, etc.
(Changes in reportable segments)
As the corporate performance management segmentation within the Company Group has partially been changed, the nameof the reportable segment “Mobile Data Solution business” has been changed to “Global Data Intelligence business” from the firstquarter of the current fiscal year.
Note that the segment name after the aforementioned change is disclosed in segment information for the six months ended
September 30, 2022. The change, however, has no impact on the segment information for the six months ended September 30, 2022.
3．Information on assets for each reportable segment
In the six months ended September 30, 2023, segment assets of the Global Data Intelligence business decreased by¥3,567,450 thousand as the Company reported shares of loss of entities accounted for using equity method regarding Cellebrite,
which is the Company’s associate accounted for using equity method.

―23―

(Revenue recognition)
Information on the disaggregation of revenue from contracts with customers are as described in Notes to “Segment information,
etc.”(Per share information)
Basic earnings (losses) per share and the basis for its calculation as well as diluted earnings per share and the basis for its calculation
are as follows.
Six months ended
September 30, 2022
(From April 1, 2022
to September 30, 2022)

Item(1) Basic earnings (losses) per share

Six months ended
September 30, 2023
(From April 1, 2023
to September 30, 2023)

270.30 yen(189.88) yen

6,414,746(4,229,062)(The basis for calculation)
Profit (loss) attributable to owners of parent (thousand yen)
Profit not attributable to common shareholders (thousand yen)―

Profit (loss) attributable to owners of parent in relation tocommon stock (thousand yen)

6,414,746

Weighted average number of common shares during the fiscal
year (thousand yen)

(4,229,062)

23,732

22,272257.22 yen―(300,904)―(2) Diluted earnings per share(The basis for calculation)
Adjustments to profit attributable to owners of parent(thousand yen)
[Of which adjustments by dilutive shares of consolidated
subsidiaries (thousand yen)][(300,904)]―

Number of increased common stock (thousand shares)

37―[Of which share award rights (thousand shares)]

[22]

―

[Of which share acquisition rights (thousand shares)]

[14]

―

Details of shares not included in calculation of fully diluted
earnings per share due to non-dilutive effect, for which there
was a significant change since the end of the previous fiscal
year

―

―

(Note) Diluted earnings per share for the six months ended September 30, 2023 are not shown in the above table because the basic
earnings per share were negative despite the existence of dilutive shares.
(Significant Subsequent Events)
Not applicable.

―24―2 [Others]
Not applicable.

―25―

Part II Information on Guarantors of the Filing Company
Not applicable.

―26―

Quarterly Review Report of Independent Auditors
November 13, 2023
To the Board of Directors of
SUNCORPORATION
Frontier Audit Corporation
Shinagawa-ku, Tokyo
Designated andEngagement Partner

Certified Public
Yukio Fujii
Accountant

Designated andEngagement Partner

Certified Public
Daisuke Hongo
Accountant

Auditor’s Conclusion
Pursuant to the first paragraph of Article 193-2 of the Financial Instruments and Exchange Act, Frontier Audit Corporation has
reviewed the quarterly consolidated financial statements of SUNCORPORATION listed under “Financial Information”, namely thequarterly consolidated balance sheet, the quarterly consolidated statement of income, the quarterly consolidated statement ofcomprehensive income, the quarterly consolidated statement of cash flows and notes, for the second quarter (from July 1, 2023 to
September 30, 2023) and for the six months period (from April 1, 2023 to September 30, 2023) of the fiscal year from April 1, 2023 toMarch 31, 2024.
In the quarterly review which we conducted, we have concluded that the quarterly consolidated financial statements referred toabove are prepared in accordance with standards for preparation of quarterly consolidated financial statements generally accepted inJapan, and nothing has come to our attention that causes us to believe that they do not fairly present, in all material respects, the financial
positions of SUNCORPORATION and its consolidated subsidiaries as of September 30, 2023, their operating results and their cash
flows for the six months ended on the same date.
Basis for Auditor’s Conclusion
We have conducted our quarterly review based on quarterly review standards that are generally accepted in Japan. Our responsibility
under the quarterly review standards is stated in “Auditor’s Responsibilities for the Quarterly Review of the Quarterly Financial
Statements”. We are independent of the Company and its consolidated subsidiaries in accordance with the code of professional ethics inJapan and fulfill other ethical responsibilities as an auditor. We believe that we have obtained the evidence to provide a basis for ourconclusion.
Management’s and the Audit and Supervisory Committee’s Responsibilities for the Quarterly Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the quarterly consolidated financial statements based on thestandards for the preparation of quarterly consolidated financial statements generally accepted in Japan. This includes the development
and operation of internal control as management judges necessary to enable the preparation and fair presentation of quarterly consolidated
financial statements which are free from material misstatement, whether due to fraud or error.
In preparing the quarterly consolidated financial statements, management is responsible for assessing whether it is appropriate toprepare the quarterly consolidated financial statements in accordance with the going concern assumption and disclosing items regarding
the going concern assumption in accordance with the standards for preparation of quarterly consolidated financial statements generally
accepted in Japan if such items are required to be disclosed.
The Audit and Supervisory Committee is responsible for monitoring the execution of Directors’ duties in the development andoperation of the financial reporting process.

―27―

Auditor’s Responsibilities for the Quarterly Review of the Quarterly Consolidated Financial Statements
We are responsible for expressing a conclusion on the quarterly consolidated financial statements in the quarterly review reportfrom an independent perspective based on the quarterly review which we have conducted.
We exercise professional judgements and conduct the followings with an attitude of professional skepticism throughout the processof a quarterly review in accordance with quarterly review standards generally accepted in Japan.
・We principally make inquiries to the management and the persons who are responsible for financial and accounting matters, etc.
applying analytical procedures and conducting other quarterly review procedures. The quarterly review procedures are lessexhaustive than the annual audits on financial statements conducted in accordance with audit standards generally accepted in Japan.

・If we deem that there is a material uncertainty regarding events or conditions which may cast significant doubt on matters on thegoing concern assumption, we conclude whether the quarterly consolidated financial statements are found to contain any mattersthat would lead one to believe that those are not fairly presented in accordance with the standards for preparation of quarterly
consolidated financial statements generally accepted in Japan based on the evidence we obtain. If there is a material uncertainty
regarding the going concern assumption, we are required to raise awareness in notes to the quarterly consolidated financial
statements in the quarterly review report, or if notes to a material uncertainty in the quarterly financial statements are inappropriate,
we are required to express a qualified or negative conclusion on the quarterly consolidated financial statements. While ourconclusion is based on the evidence that we obtained by the date of the quarterly review report, the Company may not be able toexist as a going concern, depending on future events or circumstances.

・

We evaluate not only whether the presentation and notes of the quarterly consolidated financial statements are found to contain any
matters that would lead one to believe that those are not in accordance with the standards for preparation of quarterly consolidated
financial statements generally accepted in Japan, but also assess the presentation, structure and content of the quarterly consolidated
financial statements, including the related notes, as well as whether the quarterly consolidated financial statements are found tocontain any matters that would lead one to believe that those do not fairly present underlying transactions and accounting events.

・In order to express a conclusion on the quarterly consolidated financial statements, we obtain evidence on the financial informationof the Company and its consolidated subsidiaries. We are responsible for the instructions, supervision and execution of the quarterly
review of the quarterly consolidated financial statements. We bear sole responsibility for our conclusion.
We report to the Audit and Supervisory Committee on the scope and timing of implementation of a planned quarterly review andmaterial findings in a quarterly review.
We report to the Audit and Supervisory Committee that we have observed the code of professional ethics in Japan in terms of
independence and on matters that are reasonably believed to impact our independence, as well as on details of any countermeasures if
those are applied to eliminate obstacles or on any safeguards if those are applied to reduce obstacles to an acceptable level.
Interest
There exists no special interest between the Company as well as its consolidated subsidiaries and this audit corporation or its
engagement partners which is required to be stated pursuant to the provisions of the Certified Public Accountants Act.
End of text
(Note) 1. The original of the quarterly review report stated above is separately archived by the Company (the company submitting
the quarterly report).
2．XBRL data is not included in the target of the quarterly review.

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