Updated: August 10, 2022

Consolidated Financial Results for the Nine Months Ended June 30,2022(Under Japanese GAAP)
August 10, 2022
Listed company name:

Systemsoft Corporation

Listing

Tokyo Stock Exchange

Code number

7527

URL:

https://www.systemsoft.co.jp/

Representative

President and Representative Director:

Contact person

General Manager, Administration Division: Yasunori Tomita, (TEL) +81 (0)92-732-1515

Haruki Yoshio

Scheduled date to file quarterly securities report: August 10, 2022
Scheduled start date to commence dividend payments: －Preparation of supplementary materials on quarterly financial results: Yes
Holding of quarterly financial results briefings: No(Yen amounts are rounded down to millions, unless otherwise noted.)
Consolidated financial results for the nine months ended June 30, 2022 (From October 1, 2021 to June 30, 2022)(1) Consolidated financial results (cumulative)1.

(% is Year-on-year rate of increase / decrease)
Net Sales
Nine months ended

Quarterly net income
Attributable to owners ofparent company

Ordinary income

million yen%

million yen%

million yen%

million yen

%

3,314

-6.8

10

-97.0

39

-87.8

-21

―

3,556

67.3

354

―

326

―

490

―

June 30, 2022
June 30, 2021
Note: Comprehensive income

Operating Income

For the Nine months ended, June 30, 2022 - ¥91 million yen (―%)
For the Nine months ended, June 30, 2021 ¥484 million yen (―%)

Quarterly
Net earnings per
share

Quarterly
Diluted net earnings per
share

Nine months endedyenJune 30, 2022

-0.26

―

6.37

6.31

June 30, 2021

yen

Note: The "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) and others have been applied fromthe beginning of the first quarter of the fiscal year ended December 31, 2021. The figures for the third quarter of the fiscal year
ending Sept, 2022 are after the application of the said accounting standards. As a result, the percentage change from the same
period of the previous year is based on the calculation method using different standards.

(2) Consolidated financial condition
Total Assets

Net Assets

Equity-to-asset ratio

million yen

million yen%

June 30, 2022

6,897

5,654

81.5

September 30, 2021

7,467

5,838

77.6

As of

Reference: Equity capital

As of June 30, 2022
¥5,622 million
As of September 30, 2021
¥5,794 million
Note: The "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) and others have been applied fromthe beginning of the first quarter of the fiscal year ended December 31, 2021. The figures for the third quarter of the fiscal year
ending September, 2022 are after the application of the said accounting standards, etc.

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Updated: August 10, 2022

2. Cash dividends
Annual dividends
First quarter-end Second quarter-end

Third quarter-end

Fiscal year-end

Total

Fiscal year ended

yen

yen

yen

yen

yen

September 30, 2021

―

0.00

―

2.00

2.00

―

0.00
―

―

―

Fiscal year ending

September 30, 2022
Fiscal year ending

September 30, 2022
(Forecast)

Note: Revision to the forecast of cash dividends most recently announced: None
The year-end dividend for the fiscal year ending September 30, 2022 is undecided at this time.

3. Forecast of consolidated financial results for the fiscal year ending September 30, 2022 (October 1, 2021 – September
30, 2022)(% increase or decrease from the previous year)

Sales

Full-year

Operating income

Ordinary income

Profit attributable toEarnings per shareowners of parent

million yen%

million yen%

million yen%

million yen

%

yen

5,000

1.6

400

5.9

370

8.0

220

-54.5

2.62

Note: 1. Revisions to the most recently announced earnings forecasts:
None
2. The Company has applied the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020), etc.
from the beginning of the current first quarter consolidated accounting period. As a result, the above forecast of consolidated
financial results is based on the figures after the application of these accounting standards. As a result, the percentage change
from the previous fiscal year is based on a different calculation method.

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Updated: August 10, 2022

* Notes(1) Changes in significant subsidiaries during the quarterly consolidated financial statements period: None(*) Although not a specified subsidiary of the Company, SS Support Corporation was included in the scope of
consolidation from the third quarter of the current fiscal year following the acquisition of shares on April 1, 2022.
(2) Adoption of accounting treatment specific to the preparation of quarterly consolidated financial statements: None
(3) Changes in accounting policies, changes in accounting estimates, and re-display of amendments(i) Changes in accounting policies due to revisions to accounting standards: Yes(ii) Changes in accounting policies due to other reasons: None(iii) Changes in accounting estimates: None(iv) Retrospective restatement: None(*) For details, please refer to Page 9 “1. Quarterly Consolidated Financial Statements and Key Notes (3) Notes onquarterly consolidated financial statements.
(4) Number of issued shares (common shares)(i) Total number of issued shares at the end of the period (including treasury shares)
As of June 30, 2022

84,834,140 shares

As of September 30, 2021

84,136,240 shares(ii) Number of treasury shares at the end of the period
As of June 30, 2022

31,924 shares

As of September 30, 2021

31,864 shares(iii) Average number of shares outstanding during the period (cumulative from the beginning of the fiscal year)
Nine months ended June 30, 2022

84,676,970 shares

Nine months ended June 30, 2021

77,022,743 shares*Quarterly financial results reports are exempt from quarterly review conducted by certified public accountants or an audit
corporation.
*Proper use of earnings forecasts, and other special matters
Forward-looking statements, such as each business outlook, described in this document are based on information currently
obtained by the Company and certain assumptions that it deems reasonable, and are not to the effect that the Company
promises to achieve such results. Actual results may differ materially due to various factors.

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Consolidated Financial Results for the Nine Months Ended June 30,2022(Under Japanese GAAP)
Updated: August 10, 2022

Table of Contents
1. Quarterly Consolidated Financial Statements and Key Notes ······································································ 5(1) Quarterly Consolidated Balance Sheet ........................................................................................................... 5(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Comprehensive Income
Statements ......................................................................................................................................................... 7(3) Notes on quarterly consolidated financial statements...................................................................................... 9(Notes on going concern assumptions)9(Notes on significant changes in the amount of shareholders' equity)9(Change in scope of consolidation or application of equity method)

9(Change in accounting policy)

9(Information by Segment)

11(Significant subsequent events)

13

2. Other ·············································································································································· 14

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Consolidated Financial Results for the Nine Months Ended June 30,2022(Under Japanese GAAP)
Updated: August 10, 2022

1. Quarterly Consolidated Financial Statements and Key Notes(1) Quarterly Consolidated Balance Sheet(Unit: thousand yen)Previous Consolidated Fiscal Year
(October 31, 2020 to
September 30, 2021)

Current Consolidated Third Quarter(April 1 to June 30, 2022)

ASSETS
Current assets
Cash and deposits

2,081,361

1,084,684

Notes and accounts receivable
Notes, accounts receivable and contract
assetsWork in progress

1,678,727――

1,759,091

122,725

228,562

21

60

Other

281,093533,758

Reserve for bad loans-5,397-5,397

Total current assets

4,158,531

3,600,759

Property, plant and equipment (net)27,85328,409Tools, furniture and fixtures (net)19,318

16,203

Total tangible fixed assets

47,172

44,612

2,044,403

2,105,075

Raw materials and stored products

Fixed assets
Tangible fixed assets

Intangible fixed assets
Goodwill
Other414,314369,824

Total intangible assets

2,458,718

2,474,899

Investments and other assets

803,055

777,034

Total fixed assets

3,308,946

3,296,547

7,467,478

6,897,307

Notes and accounts payable

436,292

239,465

Short-term loans payable

200,000

50,000

Income taxes payable

82,010―Order loss reserve

4,929

4,929

Other

379,880

502,829

Total current liabilities

1,103,113

797,225

Bonds

380,000

310,000

Asset retirement obligations

10,145

10,168

Other

135,696

125,358

Total assets
LIABILITIES AND EQUITYCurrent liabilities

Fixed liabilities

Total fixed liabilities
Total liabilities

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525,841445,527

1,628,954

1,242,752

Consolidated Financial Results for the Nine Months Ended June 30,2022(Under Japanese GAAP)
Updated: August 10, 2022

(Unit: thousand yen)Previous Consolidated Fiscal Year
(October 31, 2020 to
September 30, 2021)

Current Consolidated Third
Quarter(April 1 to June 30, 2022)

EquityShareholders' equity
Capital1,663,904

1,706,476

Capital surplus
Retained earnings

3,879,259
278,1033,712,343
299,184

Treasury stock
Total shareholders' equity
Accumulated other comprehensive income(loss)
Other securities valuation differences
Exchange conversion adjustment accountTotal other comprehensive income
Stock acquisition rights
Non-controlling interests-8,064-8,071

5,813,203

5,709,932-2,523-15,743-7,660-79,956-18,266-87,617

35,686

24,519

7,900

7,719

Total net assets

5,838,523

5,654,554

Total liabilities and net assets

7,467,478

6,897,307

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Consolidated Financial Results for the Nine Months Ended June 30,2022(Under Japanese GAAP)
Updated: August 10, 2022

(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Comprehensive Income
Statements
Quarterly Consolidated Statement of Income
Cumulative period for consolidated third quarter, nine months ended June 30, 2022
(Unit: Thousand yen)
Current nine months ended
June 30, 2022
(October 1, 2021 toJune 30, 2022)

Previous nine months ended
June 30, 2021
(October 1, 2020 toJune 30, 2021)

Sales
Cost of sales

3,556,335
2,516,379

3,314,973
2,584,990

Gross profit

1,039,955

729,982

Selling, general and administrative expenses

685,454

719,503

Operating income

354,500

10,478Interest income
Dividend received

1,946
494

274
548

Foreign exchange gains
Subsidy income

12,556
7,748

67,7383,203

Consulting revenue
Other

11,250
577

1,250
716

Total non-operating income

34,57373,731

Interest expenses
Fees

7,881
25,755

11,494
14,924

Other

28,842

17,954Non-operating income

Non-operating expenses

Total non-operating expenses
Ordinary income

62,47944,373

326,594

39,836―238,106

4,464
―

3,244

―

241,350

4,464

4,691
―

6,191
3,063

―
―

2,068
25,357

4,691

36,680563,253

7,620

73,40529,694-540―

Extraordinary gains
Gain on sales of investment securities
Marginal gain on step acquisitions
Gain on reversal of provision for loss ontransfer
Total extraordinary gains
Extraordinary loss
Fixed assets retirement losses
Loss on sales of investment securities
Loss on valuation of investment securities
Loss on store closing
Total extraordinary loss
Quarterly net Income before taxes or net loss
before adjustments to taxes, etc
Corporate tax, municipal tax and business taxes
Adjustment to corporate taxes, etc
Total corporate taxes, etc.

72,86429,694

Quarterly net income or quarterly net loss

490,389-22,074

-265

-181

490,654-21,892

Quarterly net loss attributable to non-controllingshareholders
Net income attributable to owners of parent or net
loss attributable to owners of parent

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Consolidated Financial Results for the Nine Months Ended June 30,2022(Under Japanese GAAP)
Updated: August 10, 2022

Consolidated quarterly statements of comprehensive income
Cumulative period for consolidated third quarter, nine months ended June 30, 2022
Previous nine months ended
June 30, 2021
(October 1, 2020 toJune 30, 2021)

Quarterly net income
Other comprehensive income
Other securities valuation difference
Exchange conversion adjustment accountTotal other comprehensive income
Quarterly comprehensive income(Breakdown)
Quarterly comprehensive income for ownersof parent
Quarterly comprehensive income fornon-controlling shareholders

8/14(Unit: Thousand yen)
Current nine months ended
June 30, 2022
(October 1, 2021 toJune 30, 2022)

490,389-22,074

6,235-12,238-5,137-64,213-6,002-69,350484,386-91,424484,652-91,243

-265

-181

Consolidated Financial Results for the Nine Months Ended June 30,2022(Under Japanese GAAP)
Updated: August 10, 2022

(3) Notes on quarterly consolidated financial statements(Notes on going concern assumptions)
Nothing applicable.
(Notes on significant changes in the amount of shareholders' equity)
In the first quarter consolidated accounting period, in accordance with the resolution of the Board of Directors
meeting held on November 12, 2021, and pursuant to the provisions of Article 452, Article 459, Paragraph 1, Item 3of the Companies Act and Article 38 of the Company's Articles of Incorporation, other capital surplus was reducedby 41,279 thousand yen and transferred to retained earnings brought forward. In addition, capital stock and capitalreserve increased by 42,571 thousand yen and 42,571 thousand yen, respectively, as a result of the exercise ofstock acquisition rights. Furthermore, capital surplus decreased by 168,208 thousand yen due to the payment ofdividends from capital surplus effective December 8, 2021. As a result, capital stock and capital surplus amounted
to 1,706,476 thousand yen and 3,712,343 thousand yen, respectively, at the end of the third quarter of the current
fiscal year.
(Change in scope of consolidation or application of equity method)
As a result of the acquisition of SS Support Corporation's shares on April 1, 2022, the company was included in
the scope of consolidation effective from the third quarter of the current fiscal year.
(Change in accounting policy)
Application of Accounting Standard for Revenue Recognition
The "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020. (hereinafterreferred to as the "Accounting Standard for Revenue Recognition") etc. are applied from the beginning of the firstquarter of the current fiscal year, and revenue is recognized at the amount expected to be received in exchange forthe promised goods or services when control of the promised goods or services is transferred to the customer.
As a result, for made-to-order software development contracts, the Company previously applied the percentageof-completion method if the outcome of the construction activity could be estimated reliably, and applied thecompleted-contract method for other contracts. Effective from the first quarter of the fiscal year ending March 31,
2022, the Company and its consolidated subsidiaries changed the method of recognizing revenue over a certain
period of time as the performance obligation to transfer goods or services to customers is satisfied, if control overthe goods or services is transferred to the customers over a certain period of time. For performance obligations to
be satisfied over a specified period of time, if the degree of progress toward satisfying the performance obligation
cannot be reasonably estimated at the initial stage of the contract, the Company does not recognize revenue at theinitial stage of the contract but recognizes revenue when the degree of progress can be reasonably estimated.
In addition, some made-to-order software development contracts that are determined to be a single performanceobligation as a whole, although the contract with the customer is divided into processes, they are combined so thatthe revenue is recognized over a certain period of time based on a reasonable estimate of the degree of progress.
The measurement of progress toward satisfying performance obligations is based on the percentage ofdevelopment costs incurred by the end of each reporting period to the total expected development costs.
For software development contracts with a very short period of time between the transaction start date and the point
in time when the performance obligation is expected to be fully satisfied, an alternative treatment is applied, whereby
revenue is not recognized over a specified period of time and revenue is recognized when the performanceobligation is fully satisfied.
The Company has followed the transitional treatment stipulated in the proviso of Paragraph 84 of the AccountingStandard for Revenue Recognition, and the cumulative effect of retrospective application of the new accounting
policy prior to the beginning of the first quarter of the current fiscal year has been adjusted to retained earnings at
the beginning of the first quarter of the current fiscal year, and the new accounting policy has been applied to the

9/14Consolidated Financial Results for the Nine Months Ended June 30,2022(Under Japanese GAAP)
Updated: August 10, 2022

beginning balance of the current fiscal year. The cumulative effect of the retrospective application of the new
accounting policy prior to the beginning of the first quarter of the current fiscal year is added to or deducted fromretained earnings at the beginning of the first quarter of the current fiscal year, and the new accounting policy isapplied from the beginning balance of the said period.
As a result, net sales, operating income, ordinary income, and income before income taxes and minority interests
each increased by 2,091 thousand yen in the third quarter of the current consolidated cumulative period.
In addition, the balance of retained earnings at the beginning of the period increased by 1,693 thousand yen.
Due to the application of the revenue recognition accounting standard, "Notes and accounts receivable," which
was presented in "Current assets" in the consolidated balance sheet for the previous consolidated fiscal year, is
included in "Notes, accounts receivable and contract assets" from the first quarter of the consolidated fiscal year
under review. In accordance with the transitional treatment prescribed in Paragraph 89-2 of the Accounting Standard
for Revenue Recognition, no reclassification has been made for the previous consolidated fiscal year using the newpresentation.
(Application of Accounting Standards for Calculation of Fair Value)
The new accounting standard referred to as “The Accounting Standard for Calculation of Fair Value" (ASBJ
Statement No. 30, July 4, 2019) for fair value calculation, etc. is applied from the beginning of the first quarter of the
fiscal year. The new accounting policy prescribed by the Accounting Standard for Fair Value Calculation will beapplied prospectively in accordance with the transitional treatment stipulated in Paragraph 19 of the AccountingStandard for Fair Value Calculation and Paragraph 44-2 of the Accounting Standard for Financial Instruments (ASBJ
Statement No. 10, July 4, 2019) from the beginning of the first quarter of the fiscal year. There is no impact on thequarterly consolidated financial statements.

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Consolidated Financial Results for the Nine Months Ended June 30,2022(Under Japanese GAAP)
Updated: August 10, 2022

(Information by Segment)
Segment Information
I. Previous nine months ended, from October 1, 2020 to June 30, 2021, consolidated period
1.

Information on the sales, profits or losses per reporting segment(Unit: Thousand yen)
Reporting Segment
Technology
business

Open
Innovation
Business

Other*
Investment

Total

Subtotal

Sales
Sales to external customers

2,665,702

733,251

156,9313,555,885

450

3,556,335

Sales or transfers inside or
between segments

4,154

22,890―27,044―

27,044

2,669,856

756,141

156,9313,582,929

450

3,583,379

248,096

94,512

149,952

492,560

25

492,585

Subtotal
Segment profit or
Loss

Note: *"Other" refers to business segments not included as reporting segments.

2.

Information on assets by reportable segment(Significant increase in assets due to merger, etc.)
As of January 1, 2021, the Company merged with fabbit Co., Ltd. and took over the financial statements of fabbit Co.,
Ltd. and other assets, segment assets of the open innovation business increased by 1,633,139 thousand yen
compared to the end of the previous fiscal year.

3.

Difference between the total reported segment amount and the amount recorded in the quarterly consolidated
income statement, and the main elements of the difference (related to the adjustment)(Unit: Thousand yen)

RevenueAmount492,560

Reporting segment subtotal

25“Other” revenue
Company-wide expenses*-138,084

Operating income on quarterly consolidated income
statement

354,500

Note: *Company-wide expenses are general and administrative expenses that are not primarily attributable to the reporting segment.

4.

Information on impairment loss on fixed assets and goodwill by reportable segment(Significant changes in the amount of goodwill)
As of January 1, 2021, the Company merged with fabbit Co., Ltd. and took over its financial statements, and goodwillof the Open Innovation Business increased by 1,094,539 thousand yen compared to the end of the previous fiscal
year.

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Consolidated Financial Results for the Nine Months Ended June 30,2022(Under Japanese GAAP)
Updated: August 10, 2022

II. Current nine months ended, from October 1, 2021 to June 30, 2022, consolidated period
1.

Information on the sales, profits or losses per reporting segment(Unit: Thousand yen)
Reporting Segment
Technology
business

Open Innovation
Business

Other*

Total

Subtotal

Sales
Sales to external customers

2,416,637

898,335

3,314,973―

3,314,973

Sales or transfers inside or
between segments

169

27,91728,086―28,0862,416,807

926,252

3,343,059―

3,343,059

116,957

17,487

134,445-247

134,198

Subtotal
Segment profit or Loss

Note: *"Other" refers to business segments not included as reporting segments.

2. Difference between the total reported segment amount and the amount recorded in the quarterly consolidated income
statement, and the main elements of the difference (related to the adjustment)(Unit: Thousand yen)
ProfitAmount134,445

Reporting segment subtotal"Other" profit-247

Company-wide expenses*-123,719

Operating income on quarterly consolidated income
statement

10,478

Note: *Company-wide expenses mainly consist of general administration expenses not attributable to any particular reporting segment.

3. Matters related to changes in reportable segments
Effective from the first quarter of the current fiscal year, the "Investment Business" segment was discontinued due to achange in fund management policy.
As a result, the reporting segments were changed from the previous three segments of "Technology Business," "OpenInnovation Business," and "Investment Business" to two segments of "Technology Business" and "Open Innovation
Business.”
As described in "Changes in Accounting Policies," the Company has applied the Accounting Standard for Revenue
Recognition and other accounting standards from the beginning of the first quarter of the current fiscal year, and haschanged its accounting method for revenue recognition, and therefore, the calculation method of profit or loss by businesssegment has been changed in the same manner.
As a result of this change, net sales and segment income of "Technology business" for the nine months of theconsolidated fiscal year under review increased by 2,091 thousand yen each, compared with those based on the previous
method.

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Consolidated Financial Results for the Nine Months Ended June 30,2022(Under Japanese GAAP)
Updated: August 10, 2022

(Significant subsequent events)
Business combination through acquisition
1 Outline of Business Combination(1) Name of acquired company and its business
Name of acquired company: SS Support Corporation
Business Description: On-site mobilization and maintenance of electrical, plumbing, air conditioning, ventilation, andother facilities when problems occur.
Rush services such as investigation of the problem and emergency work(2) Main reasons for the business combination
The purpose is to achieve greater operational efficiency and productivity and to further promote DX for real estate
operators by developing and providing real estate operators with a one-stop cloud system that handles everything fromsubscription application procedures to subscriber status monitoring, in addition to emergency response services in theevent of a problem.
(3) Date of business combination
April 1, 2022
(4) Legal form of business combination
Acquisition of shares for cash(5) Name of company after combination
The name will remain unchanged(6) Percentage of voting rights acquired
87.7%(7) Main basis for determining the acquiring company
The Company's consolidated subsidiary SS Technologies, Inc. acquired the shares for cash consideration.
2. Period of the acquired company's results included in the quarterly consolidated statement of income for the quarter
From April 1, 2022 to June 30, 2022
3. Breakdown of acquisition cost and consideration for each type of acquired company
The acquisition cost, which is undisclosed due to contractual confidentiality obligations, was determined by taking into
consideration the results of a third-party valuation of the shares.
4 Description and amount of major acquisition-related expenses
Fees and commissions for advisory services: 520 thousand yen
5. Amount of goodwill incurred, reason for incurrence, amortization method and amortization period(1) Amount of goodwill incurred
157,667 thousand yen
The above amounts are tentatively calculated.
(2) Cause of occurrenceThis is the excess earning power expected from future business development.
(3) Amortization method and period
Equal amortization over 20 years

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Consolidated Financial Results for the Nine Months Ended June 30,2022(Under Japanese GAAP)
Updated: August 10, 2022

2. Other
Nothing applicable.

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