Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated
document and the Japanese original, the original shall prevail.

Consolidated Financial Results
for the Three Months Ended June 30, 2024
[Japanese GAAP]
August 9, 2024
Company name: SUNCORPORATION
Listing: Tokyo
Securities code: 6736
URL: https://www.sun-denshi.co.jp
Representative: Ryusuke Utsumi
President and Representative Director
Inquiries: Yoshimi Kimura
Representative and Executive managing director
Telephone: +81-52-756-5981
Scheduled date to commence dividend payments: Preparation of supplementary material on financial results: None
Holding of financial results briefing: None
(Yen amounts are rounded down to millions, unless otherwise noted.)
1. Consolidated Financial Results for the Three Months Ended June 30, 2024 (April 1, 2024 to June 30, 2024)(1) Consolidated Operating Results(Percentages indicate year-on-year changes.)
Profit attributable to
Net sales
Operating profit
Ordinary profit
owners of parent
Millions of yen% Millions of yen% Millions of yen% Millions of yen%
Three months ended
June 30, 2024
2,356
(0.6)
(130)
(75)
207
June 30, 2023
2,370
(75.2)
25(2,792)(2,614)(Note) Comprehensive income:Three months ended June 30, 2024:¥
1,644 million [-%]Three months ended June 30, 2023:¥(1,084) million [-%]Basic earnings
per share

Diluted earnings per
share

Yen
Yen
Three months ended
June 30, 2024
9.33
9.32
June 30, 2023
(117.08)(Note) Diluted net income per share for the first quarter of the fiscal year ending March 31, 2024 is not shown in the above table,
because net income per share was negative although there are residual shares.

(2) Consolidated Financial Position
Total assets
As ofJune 30, 2024
March 31, 2024
(Reference) Equity:

Millions of yen

48,911
46,838

As of June 30, 2024:
As of March 31, 2024:

Net assets
Millions of yen¥¥

Capital adequacy ratio

38,00637,25937,939 million
37,157 million

%

77.6
79.3

2. Dividends
Annual dividends
1stquarter-end

2ndquarter-end

3rdquarter-end

Yen

Yen

Yen

Yen

Yen

Fiscal year ended March 31, 2024

-

0.00

-

40.00

40.00

Fiscal year ending March 31, 2025

-

-

-

-

Fiscal year ending March 31, 2025
(Forecast)Year-end

Total(Note) The dividend forecast for the fiscal year ending March 31, 2025 is undecided at this time.
3. Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2025(April 1, 2024 to March 31, 2025)(Percentages indicate year-on-year changes.)
Net sales
Millions of yen

Operating profit%

Millions of yen%

Full year
12,28522.29
709
126.66(Note) Revision to the financial results forecast announced most recently:
None
The impact of recent geopolitical risks and financial instability on the Company's financial forecast for the fiscal year ending
March 31, 2025 is uncertain. And since it is difficult to reasonably calculate the impact on our business performance of changes
in fair value of price adjustment clauses, certain restricted stock rights, and derivative warrant liabilities recognized in our equitymethod affiliate Cellebrite DI Ltd. at this point in time, we are unable to make a reasonable estimate of the impact on our businessperformance at each level below ordinary Therefore, the Company has not yet determined the fair value of the fair value of therestricted stock and the derivative warrants liability.
* Notes:(1) Significant changes in the scope of consolidation during the period:None(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 restatement
1) Changes in accounting policies due to revisions to accounting standards and other regulations: Yes
2) Changes in accounting policies due to other reasons: None
3) Changes in accounting estimates: None
4) Restatement: None
(4) Number of issued shares (common shares)
1) Total number of issued shares at the end of the period (including treasury shares):
June 30, 2024:
24,007,728 shares
March 31, 2024:
24,007,728 shares
2) Number of treasury shares at the end of the period:
June 30, 2024:
1,752,457 shares
March 31, 2024:
1,769,277 shares
3) Average number of shares outstanding during the period:
Three months ended June 30, 2024:
22,243,289 shares
Three months ended June 30, 2023:
22,332,587 shares* Review of the Japanese-language originals of the attached consolidated quarterly financial statements by certified public
accountants or an audit firm: None
* Proper use of earnings forecasts, and other special matters
The forward-looking statements in this document, including earnings forecasts, are based on information currently available to
the Company and certain assumptions that the Company deems reasonable, and are not intended to be a promise by theCompany that they will be achieved. Actual results may differ materially due to various factors.

1. Qualitative Information on Financial Results for the Three Months Ended June 30, 2024
(1) Explanation of Operating Results
Forward-looking statements contained in this document are based on judgments of the Group as of June 30,
2024.
<External environment>
The data intelligence market, which our Global Data Intelligence business serves, saw a favorable response to
the Case-to-Closure platform of Cellebrite DI Ltd. (hereafter, “Cellebrite”), suggesting that the new Inseyets digitalforensic software have been gaining popularity. Meanwhile, leading-edge digital intelligence tools, such as Inseyets,
are now indispensable solutions and have been adopted by an increasing number of U.S. police organizations.
Regarding the pachinko and pachislot market, one of the markets that our Entertainment-related business serves,
smart game machines began being introduced in November 2022, and now there are popular games for thesemachines. Thus, the demand for such machines, mainly smart pachislot machines, has been increasing. Meanwhile,
although there have been signs of recovery from the 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.
Although games have been established as enjoyable home entertainment during the COVID-19 pandemic, nowthat other leisure consumption has also recovered, we can see a slight contraction trend in the game content market
in developed countries. Furthermore, 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 asingle person to develop video game with a single PC.
In the Internet of things (IoT) market, one of the markets that our New IT-related business serves, demand formonitoring and control systems that can access from remote locations to alleviate labor shortages and improve
productivity is increasing, and the industrial network device Rooster capable of stably operating for a long periodof time, which is our strength, has been widely installed. Furthermore, migration from 3G to LTE (4G) is smoothly
ongoing as communication carriers are scheduled to successively terminate 3G services by March 2026. While thecrunch 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.
The market environments of some of our core businesses are uncertain as described above. Against this backdrop,
we will work to establish new core products and services in line with the current social trend of moving towards
utilization of leading-edge technologies, such as IoT, augmented reality (AR), and artificial intelligence (AI) for
further improvement of the Group’s business performance.
<Competitive advantages>
In the Global Data Intelligence business, 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 them with state-of-the-art digital intelligence tools, as well as training and services over the years,
to enhance the productivity of investigation resources. The next-generation solution “Inseyets,” which was releasedin January 2024, combines advanced Premium extraction with next-generation UFED, as an all-in digital forensic
solution that encompasses the functions of Physical Analyzer (including reader), Cloud and Commander,
contributing to a significant reduction in the work time of investigation agencies. In the Japanese market, full-scaledeliveries began in April 2024.
In the game machine business of our Entertainment-related business, the Company specializes in certain businessfields and customers to establish strong trustful relationships and step up our expressive and technical abilities inthe 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
console games and mobile games under the famous Shanghai brand. This enables us to maintain cost-efficientprofits over a long term. Furthermore, having a number of intellectual properties (IPs) in the genre of retro games,
which is regaining popularity mainly in the European market, we have the prospect 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 our partners such as individual communication carriers
and system integrators, and acquiring patents related to migration from 3G to LTE (4G) networks based ontechnologies accumulated over many years; and to further reinforce our competitiveness by developing productswith 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 theeffects 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 alleviate increasing operational management burdens of a large number of IoT
devices installed in remote locations as they move from the introduction to operational phase. To address this issue,
our device management service called SunDMS enables alive monitoring and centralized control of Rooster,
enabling remote and secure operational management. As a result, on-site maintenance costs such as personnel,
operational adjustments, and travel time can be cut down, and the operational burden can be greatly reduced. We
are also developing SunDMS-Insight. This makes it possible to collect, control, and visualize any device or network
data, such as OKUDAKE Sensor and Programmable Logic Controllers (PLCs). In the future, BI/AI will be used
for aggregation, analysis, and detection to improve the efficiency and security of remote operational managementin the IoT field, thereby securing a competitive advantage.
<Management initiatives>
We have reviewed our existing business strategies, and have formulated the new Medium-Term Management
Plan, which covers three years starting from the fiscal year ending March 2025, with an aim of establishing our
future growth base. The quantitative targets for the fiscal year ending March 2027, the last fiscal year covered by
the new Medium-Term Management Plan, are net sales of ¥19,200 million and operating profit of ¥2,100 million.
Furthermore, the medium- to long-term management targets after the new Medium-Term Management Plan
period have been set to net sales of ¥50,000 million and an operating profit margin of 15% in pursuit of oursustainable growth and corporate value enhancement.
To achieve the above goals, we set up specific strategic themes: 1) Improving our earning power in existing
businesses; 2) Creating new growth drivers; and 3) Establishing management base to support business. Under these
themes, the following business development is being planned for individual business divisions.
The Global Data Intelligence business will aspire for contributing to global human safety and security andprovide products, solutions, and services that are needed to achieve that goal. Specifically, we will strengthen oursales activities based on up-selling and cross-selling and reduce the churn rate so as to expand stock businesses,that is, to acquire stable profit opportunities.
Furthermore, as an initiative related to “creating new growth driver,” aiming for providing new digital tool
solutions not limited to the digital forensics field, we will advance our search for products with high added value
by leveraging the networks we have developed to date, such as one in Israel.
In the Entertainment-related business, as an initiative related to “improving our earning power in existing
businesses”, we will focus on promoting measures such as increasing the number of newly developed games in thegame machine business, as well as developing new IPs and promoting overseas marketing in the game business.
The New IT-related business will seek ways to shift from the conventional hardware-based business to a solution
business that covers IoT and video solutions, as well as collection, control, visualization, and analysis of data on
Rooster and networks. Furthermore, we will strive to shift into the field of intelligence to be capable of, for example,
advanced data processing of device data on a network using artificial intelligence (AI).
Meanwhile, we created the R&D Department in October 2022 by combining the Marketing Department andTechnology Development to improve our earning power. In consideration of the Company’s future businessdevelopment, the R&D Department has already started technological development in AI, information security, andhealthcare fields under its immediate theme of moving forward with data businesses. Additionally, in research anddevelopment, we are aiming to develop differentiated products by conducting joint research with a university thatowns a technological seed.
<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 Cellebrite’s digital intelligence products thathave been conventionally sold in Japan. Aiming to expand sales of Cybersixgill as a new product that can searchfor usually invisible information on the dark web, we are making active efforts including showcasing the productat an exhibition for industrial sectors.
In the game machine business of the Entertainment-related business, we work as a contractor responsible for allphases of content development for pachinko and pachislot games, including planning, designing, video production,and programming, as well as all phases related to control boards from designing to manufacturing. In addition,leveraging on our know-how in content development, we also offer smartphone applications simulating realpachinko and pachislot machines to contribute to the operation of real pachinko and pachislot machines in themarket and raise awareness of contents.
In the game content business, several plans utilizing IPs related to retro games are now underway. Ikki Unite
was released for Nintendo SwitchTM on April 18, 2024. In addition, early access (an arrangement offered before
the full release of a game to enable playing it in its development phrase) to Ark of Charon, an all-new product for
Steam (PC), was started in July 2024, and this game has gain popularity as indicated by, for example, its high scoreson game evaluation sites.
In the New IT-related business, several major beverage vendors adopted our strategic products for beveragevending machines, A330 and A900, in order to reduce management costs and improve operational efficiency,
including product replenishment, and more than 500,000 units have already been introduced. Our router products
such as Rooster are promoted as products differentiated from those of other companies with the emphasis onfeatures of network redundancy and linkage with the device management service 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, this edge 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 Hazard Analysis and CriticalControl Points (HACCP)-based temperature management or predictive maintenance based on acceleration(vibration) sensor.

<Overview of the consolidated statements of income>
The Group posted consolidated net sales of ¥2,356 million (down 0.6% year-on-year). Likewise, gross profit,
indicative of the added value created by the Group, decreased to ¥658 million (down 6.1% year-on-year), and grossprofit margin decreased to 27.9% (down by 1.7 points), due in part to a reduction in game machine-related
contracted development in the Entertainment-related business.
Consolidated net sales
Segment
Global Data Intelligence
Entertainment-related
New IT-related
Adjustment
Total

Three months ended
June 30, 2023
(Millions of yen)
222
1,465
687
(4)
2,370

Three months ended Year-on-year change
June 30, 2024
in percent(Millions of yen)
(%)
271
21.8
1,425
2.7
664
(3.3)
(4)
2,356
(0.6)

Three months ended
June 30, 2023
(Millions of yen)
49
424
222
4
700

Three months ended
June 30, 2024
(Millions of yen)
69
354
229
4
658

Gross profit
Segment
Global Data Intelligence
Entertainment-related
New IT-related
Adjustment
Total

Year-on-year change
in percent(%)
41.5(16.5)
3.3(6.1)

Gross profit margin
Segment
Global Data Intelligence
Entertainment-related
New IT-related
Total

Three months ended
June 30, 2023(%)

Three months ended
June 30, 2024
(%)
22.1
29.0
32.4
29.6

25.7
24.9
34.6
27.9

<Overview of selling, general and administrative expenses>
Consolidated selling, general and administrative expenses came to ¥789 million (up 16.9% year-on-year). Thisis mainly because the expenses for the enhancement of the operational base and the corporate functions for the
future increased.
Selling, general and administrative expenses
Three months ended
Segment
June 30, 2023
(Millions of yen)
Global Data Intelligence
25Entertainment-related
242
New IT-related
172
Adjustment
235
Total
675

Three months ended
June 30, 2024
(Millions of yen)
39
254
208
287
789

Year-on-year change
in percent
(%)
55.2
4.8
20.9
16.9

Research and development expenses
Segment
Global Data Intelligence
Entertainment-related
New IT-related
Adjustment
Total

Fiscal year ended
March 31, 2023
(Millions of yen)
163
46
36
246

Fiscal year ended
March 31, 2024
(Millions of yen)

Year-on-year change inpercent
(%)
0
158
(2.7)
55
19.8
28
242
(1.4)

<Overview of operating loss>
The Company posted operating loss of ¥130 million (operating profit of ¥25 million for the three months ended
June 30, 2023) on a consolidated basis. This is mainly because of a decrease in gross profit and an increase in
selling, general and administrative expenses.
Operating profit (loss)
Segment
Global Data Intelligence
Entertainment-related
New IT-related
Adjustment
Total

Three months ended
June 30, 2023
(Millions of yen)
24
186
50
(235)
25

Three months ended Year-on-year change
June 30, 2024
in percent(Millions of yen)
(%)
30
27.3
104
(43.9)
21(57.0)
(287)
(130)
-

<Overview of ordinary profit and profit attributable to owners of parent>
The Company posted ordinary loss of ¥75 million (ordinary loss of ¥2,792 million for the three months ended
June 30, 2023) on a consolidated basis, and profit attributable to owners of parent of ¥207 million (loss attributableto owners of parent of ¥2,614 million for the previous fiscal year).

<Overview of individual segments>[Global Data Intelligence business]
Three months ended Three months ended Year-on-year change Year-on-year change
June 30, 2023
June 30, 2024
in amountin percent(Millions of yen)
(Millions of yen)
(Millions of yen)(%)
Net sales
222
271
48
21.8
Segment profit

24

30

6

27.3

Net sales and profit for the Global Data Intelligence business both increased mainly due to an increase in thenumber of orders in the subscription business.
[Entertainment-related business]
Three months ended Three months ended Year-on-year change Year-on-year change
June 30, 2023
June 30, 2024
in amountin percent(Millions of yen)
(Millions of yen)
(Millions of yen)(%)
Net sales
1,465
1,425
(39)
(2.7)
Segment profit

186

104

(81)

(43.9)Net sales and profit both decreased mainly due to a reduction in contracted development in the game machine
business.
[New IT-related business]
Three months ended Three months ended Year-on-year change Year-on-year change
June 30, 2023
June 30, 2024
in amountin percent(Millions of yen)
(Millions of yen)
(Millions of yen)(%)
Net sales
687
664
(22)
(3.3)
Segment profit

50

21

(28)

(57.0)Net sales and profit for this segment as a whole both decreased because the M2M business remained affected tosome extent by soaring raw material prices although the difficulty in component procurement has been easing.

(2) Explanation of Financial Position(i) State of assets, liabilities, and net assets(Assets)
Total assets stood at ¥48,911 million, an increase of ¥2,072 million from the end of the previous fiscal year.
Current assets stood at ¥23,435 million, a decrease of ¥13 million from the end of the previous fiscal year.
Non-current assets stood at ¥25,475 million, an increase of ¥2,086 million from the end of the previous fiscal
year. The main factor for increase was an increase of ¥2,146 million in investment securities.
(Liabilities)
Total liabilities stood at ¥10,904 million, an increase of ¥1,325 million from the end of the previous fiscal year.
Current liabilities stood at ¥5,850 million, an increase of ¥945 million from the end of the previous fiscal year.
The main factor for increase was an increase of ¥998 million in short-term borrowings.
Non-current liabilities stood at ¥5,053 million, an increase of ¥379 million from the end of the previous fiscal
year. The main factor for increase was an increase of ¥392 million in deferred tax liabilities.
(Net assets)
Total net assets stood at ¥38,006 million, an increase of ¥747 million from the end of the previous fiscal year.
The main factor for increase was an increase of ¥1,424 million in valuation difference on available-for-salesecurities. On the other hand, the main factor for decrease was a decrease of ¥682 million in retained earnings.
2.Quarterly Consolidated Financial Statements and Principal Notes
Quarterly Consolidated Financial Statements
Quarterly Consolidated Balance Sheets(Thousands of yen)
As of March 31, 2024
AssetsCurrent assets
Cash and deposits
Money held in trust
Notes and accounts receivable - tradeFinished goods
Work in process
Raw materials
Accounts receivable
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Land
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Shares of subsidiaries and associates
Other
Total investments and other assets
Total non-current assets
Total assets

As of June 30, 2024

1,732,014
14,200,000
1,812,896
744,912447,404
3,711,585
86,655
714,601(499)
23,449,570

1,542,783
14,200,000
1,685,402
781,249
515,583
3,799,915
69,735841,271(198)
23,435,742

949,043
630,967
1,580,010

949,043
619,781
1,568,825

457,630
229,538
687,169

442,115
222,151664,266

20,663,685
1,000
457,01221,121,697
23,388,877
46,838,448

22,810,087
1,000
431,213
23,242,300
25,475,392
48,911,135

(Thousands of yen)
As of March 31, 2024
Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term borrowings
Current portion of long-term borrowings
Accrued expenses
Income taxes payable
Contract liabilities
Provision for bonuses
Other
Total current liabilities
Non-current liabilities
Long-term borrowings
Deferred tax liabilities
Deferred tax liabilities for land revaluation
Retirement benefit liability
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Revaluation reserve for land
Foreign currency translation adjustment
Total accumulated other comprehensive income
Share award rights
Share acquisition rights
Total net assets
Total liabilities and net assets

As of June 30, 2024

1,989,206
1,095,392
37,445
246,421361,112
891,842
149,664
133,926
4,905,012

1,781,344
2,094,294
36,504
280,469
11,442
1,284,883
122,885
238,830
5,850,654

257,366
4,372,346
9,920
10,741
23,6704,674,045
9,579,057

247,723
4,765,038
9,920
10,90920,266
5,053,858
10,904,513

2,097,606
3,316,731
26,543,187(3,643,498)
28,314,026

2,097,606
3,309,838
25,861,156(3,608,933)
27,659,667

9,269,293

10,693,878(434,203)
8,197
8,843,288
24,012
78,06437,259,391
46,838,448(434,203)
20,485
10,280,160
3,448
63,34538,006,622
48,911,135

Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statements of Income (For the three months)(Thousands of yen)
For the three months
ended June 30, 2023
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit (loss)
Non-operating income
Interest and dividend income
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Share of loss of entities accounted for using equity
methodCommission for purchase of treasury shares
Other
Total non-operating expenses
Ordinary loss
Extraordinary income
Gain on reversal of share acquisition rights
Total extraordinary income
Loss before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Profit (loss)
Profit (loss) attributable to owners of parent

For the three months
ended June 30, 2024

2,370,501
1,669,548
700,952
675,189
25,7632,356,786
1,698,409
658,376
789,112(130,736)

8,587
3,573
12,161

74,9801,937
76,918961
13,8303,620
13,8482,787,858-

22,7044,719
2,830,073(2,792,148)

3,848
21,318(75,135)476
476(2,791,671)
178,780(355,742)(176,962)(2,614,709)(2,614,709)

11,688
11,688(63,446)
10,353(281,308)(270,954)
207,507
207,507

Quarterly Consolidated Statements of Comprehensive Income (For the three months)(Thousands of yen)
For the three months
ended June 30, 2023
Profit (loss)
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners ofparent

For the three months
ended June 30, 2024

(2,614,709)

207,507

1,597,215
1,113

1,424,584
12,287(68,129)-

1,530,199(1,084,510)

1,436,872
1,644,379(1,084,510)

1,644,379

(3) Notes on Quarterly Consolidated Financial Statements(Notes regarding assumption of going concern)
Not applicable(Notes if there are significant changes in the amount of shareholders' equity)
Not applicable(Changes in accounting policies)
The Company has applied the Accounting Standard for Current Income Taxes (ASBJ Statement No. 27, October28, 2022; hereafter, “Revised Accounting Standard 2022”) and other standards from the beginning of the threemonths ended June 30, 2024.
Regarding the revisions to the classification of income taxes (taxation on other comprehensive income), theCompany follows the transitional treatment stipulated in the proviso to paragraph 20-3 of Revised AccountingStandard 2022 and the transitional treatment stipulated in the proviso to paragraph 65-2 (2) of the Guidance on
Accounting for Tax Effect Accounting (ASBJ Guidance No. 28, October 28, 2022; hereafter, “Revised Guidance2022”). The adoption of this accounting standard has no impact on the quarterly consolidated financial statements.
Furthermore, the Company has applied Revised Guidance 2022 from the beginning of the three months ended
June 30, 2024, regarding the revisions to the treatment in consolidated financial statements of gains or losses arisingfrom the sale of shares in subsidiaries, etc. between consolidated companies when they are deferred for tax purposes.
The Company has applied this change in accounting policy retrospectively, and has adjusted the quarterly
consolidated financial statements for the three months ended June 30, 2023 and the consolidated financial
statements for the previous fiscal year accordingly. This change in accounting policy has no impact on the quarterly
consolidated financial statements for the three months ended June 30, 2023 and the consolidated financial
statements for the previous fiscal year.
(Additional information)(Debt instruments in Cellebrite)
Cellebrite, which is the Company’s associate accounted for using equity method, assessed certain restricted
shares and warrant liabilities, both of which it inherited from TWC Tech Holding II Corp. (hereafter, “TWC
Corp.”), at fair value and recognized 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 reports share of loss (profit) of entities accounted for using equity method as a resultof 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 the volume weighted average price (VWAP)
of Cellebrite’s share 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 time each condition is satisfied, Cellebrite will issue 5,000,000 shares respectively(up to 15,000,000 shares) for the shareholders at the time of closing, including the Company, according to theirholding ratios. Also, if change of control which is defined in the merger 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, if change 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. under the merger agreement with the latter. Holders of the warrant liabilities haverights to purchase shares of Cellebrite at the price of USD 11.5 per share on and after September 29, 2021. The
warrant liabilities will expire upon either of five years after the closing date, redemption by Cellebrite based on
certain requirements, or Cellebrite’s liquidation.
(Segment information, etc.)[Segment information]
Ⅰ. Three months ended June 30, 2023 (April 1 to June 30, 2023)
1. Information on net sales and profit (loss) for each reportable segment and information on the disaggregation ofrevenue(Thousands of yen)Amountreported onquarterly
Global Data EntertainNew ITAdjusted
consolidatedIntelligence ment-related
relatedTotalamountbusinessbusinessbusiness(Note 1) statements ofincome(Note 2)
Sales
Goods transferred at apoint in time
Goods transferred overtime
Revenue from contracts
with customers
Revenue from externalcustomers
Transactions with othersegments

6,259

1,460,907

673,948

2,141,115-

2,141,115

216,296-

13,089229,385-

229,385

222,556

1,460,907

687,037

2,370,501-

2,370,501

222,556

1,460,907

687,037

2,370,501-

2,370,501

-

4,342

-

4,342

-

Total

222,556

1,465,249

687,0372,374,843(4,342)2,370,501

Segment profit

24,095186,515

50,376

260,987(235,223)

25,763(4,342)(Notes) 1. Adjusted amount for segment profit of ¥(235,223) thousand mainly consists of general andadministrative expenses not attributable to reportable segments and elimination of intersegment
transactions.
2. Segment profit has been adjusted with operating profit on the quarterly consolidated statements ofincome.
2. Information on assets for each reportable segment
In the three months ended June 30, 2023, segment assets of the Global Data Intelligence business decreased by¥3,010,428 thousand as the Company reported share of loss of entities accounted for using equity method regarding
Cellebrite, which is the Company’s associate accounted for using equity method.

ⅠI. Three months ended June 30, 2024 (April 1 to June 30, 2024)
1. Information on net sales and profit (loss) for each reportable segment and information on the disaggregation ofrevenue(Thousands of yen)Amountreportedon
New ITquarterly
Global Data EntertainAdjusted
relatedIntelligence ment-related businessTotalamountconsolidated
businessbusiness(Note 1) statements ofincome(Note 2)
Sales
Goods transferred at a point
in time15,673

1,421,386

485,671

1,922,731-

1,922,731

Goods transferred over time

255,335-

178,719434,054-434,054

Revenue from contracts
with customers
Revenue from externalcustomers
Transactions with othersegments

271,008

1,421,386

664,3902,356,786-

2,356,786

271,008

1,421,386

664,3902,356,786-

2,356,786

-

4,063

-

4,063

-

Total

271,008

1,425,450

664,3902,360,849(4,063)2,356,786

30,664

104,624

21,645

156,934(287,670)(130,736)

Segment profit (loss)(4,063)(Notes) 1. Adjusted amount for segment profit (loss) of ¥(287,670) thousand mainly consists of general andadministrative expenses not attributable to reportable segments and elimination of intersegment
transactions.
2. Segment profit (loss) has been adjusted with operating (loss) on the quarterly consolidated statements
of income.
(Notes on quarterly consolidated statement of cash flows)
No quarterly consolidated statement of cash flows has been prepared for the three months ended June 30, 2024.
Depreciation (including amortization of intangible assets excluding goodwill and customer-related assets) andamortization of goodwill and customer-related assets for the three months ended June 30 are as follows:

Depreciation
Amortization of goodwill
Amortization of customer-related assets

For the three months
ended June 30, 2023

For the three months
ended June 30, 2024

¥53,603 million¥12,796 million¥2,203 million¥54,450 million¥15,515 million¥2,671 million