Consolidated Financial Results
for the Fiscal Year Ended January 31, 2023
[Japanese GAAP]
March 16, 2023
Company name: SanBio Company Limited
Stock exchange listing: Tokyo Stock Exchange
Code number: 4592
URL: https://www.sanbio.com/
Representative: Keita Mori, Representative Director and President
Contact: Yoshihiro Kakutani, Corporate Officer of Management Administration
Phone: +81-3-6264-3481
Scheduled date of the Annual General Meeting of Shareholders: April 26, 2023
Scheduled date of commencing dividend payments: —Scheduled date of filing annual securities report: April 26, 2023
Availability of supplementary briefing material on financial results: Yes
Schedule of financial results briefing session: Yes (for institutional investors and analysts)(Amounts of less than one million yen are rounded down.)
1. Consolidated Financial Results for the Fiscal Year Ended January 31, 2023 (February 1, 2022 to January 31,
2023)(1) Consolidated Operating Results(% indicates changes from the previous corresponding period.)
Net income
Operating revenue
Operating income
Ordinary income
attributable toowners of parent
Fiscal year ended
Million yen%
Million yen%
Million yen%
Million yen%
January 31, 2023－－
(7,899)－(4,698)－(5,559)－January 31, 2022－－
(6,620)－(4,579)－(4,677)－(Note) Comprehensive income: Fiscal year ended January 31, 2023: ¥(8,832) million [–%]
Fiscal year ended January 31, 2022: ¥(6,430) million [–%]Net income
per share

Diluted net
Ordinary income
Return on Equity
income per shareto total assets

Operating income
to operating
revenue

Fiscal year ended
Yen
Yen
%
%
%
(195.4)(74.8)–
January 31, 2023–
(95.99)(95.1)(48.6)–
January 31, 2022–
(90.33)(Reference) Equity earnings (losses) of affiliates: Fiscal year ended January 31, 2023: ¥ – million
Fiscal year ended January 31, 2022: ¥ – million(Note) Diluted net income per share is not stated as net loss per share was recorded although there are potential shareswith dilutive effect.
(2) Consolidated Financial Position
Total assets
Million yen

Net assets
Million yen

As of January 31, 2023
7,045
4,428
As of January 31, 2022
5,510
2,035
(Reference) Equity: As of January 31, 2023: ¥3,980 million
As of January 31, 2022: ¥1,708 million

Equity ratio

Net assets per share
%

Yen

56.5
31.0

62.12
32.99

(3) Consolidated Cash Flows
Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash
equivalents at endof period

Million yen

Million yen

Million yen

Million yen(7,434)(6,546)

(10)
(66)

9,445
(1,495)

6,675
4,557

Fiscal year ended
January 31, 2023
January 31, 2022
2. Dividends

Annual dividends
1st
2nd
3rd
Year-endquarter-end quarter-end quarter-end
Fiscal year ended
January 31, 2022
January 31, 2023
Fiscal year ending
January 31, 2024
(Forecast)

Total

Total
dividends(Total)Payoutratio(Consolidated)

Dividends
tonet assets(Consolidated)

Yen

Yen

Yen

Yen

Yen

Million yen

%

%

–

0.00

–

0.00

0.00

–

–

–

–

0.00

–

0.00

0.00

–

–

–

–

0.00

–

0.00

0.00

–

3. Consolidated Financial Results Forecast for the Fiscal Year Ending January 31, 2024 (February 1, 2023 toJanuary 31, 2024)(% indicates changes from the previous corresponding period.)
Net income
OperatingOperating
Net income
Ordinary
incomeattributabletorevenueincomeper shareowners of parent
Million yen%

Million yen%

Million yen%

Million yen%

Yen

First half––

(2,398)–(2,341)–(2,344)–(36.85)Full year––(4,642)–(4,597)–(4,598)–(72.30)Notes:(1) Changes in significant subsidiaries during the period under review (changes in specified subsidiaries resulting inchanges in scope of consolidation): No(2) Changes in accounting policies, changes in accounting estimates and retrospective restatement
1) Changes in accounting policies due to the revision of accounting standards: Yes
2) Changes in accounting policies other than 1) above: No
3) Changes in accounting estimates: No4) Retrospective restatement: No(Note) For details, please refer to “3. Consolidated Financial Statements and Primary Notes (5) Notes to theConsolidated Financial Statements (Changes in accounting policies)” on page 12.
(3) Total number of issued shares (common shares)
1) Total number of issued shares at the end of the period (including treasury shares):
January 31, 2023: 64,076,202 shares
January 31, 2022: 51,793,402 shares2) Total number of treasury shares at the end of the period:
January 31, 2023: 230 shares

January 31, 2022: 196 shares
3) Average number of shares during the period
Fiscal year ended January 31, 2023: 57,918,166 sharesFiscal year ended January 31, 2022: 51,789,136 shares(Reference) Overview of Non-Consolidated Financial Results
Non-Consolidated Financial Results for the Fiscal Year Ended January 31, 2023 (February 1, 2022 to January 31,2023)(1) Non-Consolidated Operating Results
Operating revenue
Fiscal year ended
Million yen%
January 31, 2023－－
January 31, 2022－－
Net income per share(% indicates changes from the previous corresponding period.)
Operating income
Ordinary income
Net income
Million yen%

Million yen%

Million yen%(1,930)(1,477)

－
－

1,863
932

－
－

(8,871)(6,439)－－Diluted net income
per share

Fiscal year ended
Yen
Yen
January 31, 2023–
(153.17)January 31, 2022–
(124.35)(Note) Diluted net income per share is not stated as net loss per share was recorded although there are potential shareswith dilutive effect.
(2) Non-Consolidated Financial Position
Total assets
Million yen

Net assets
Million yen

As of January 31, 2023
6,593
4,388
As of January 31, 2022
4,883
2,033
(Reference) Equity: As of January 31, 2023: ¥3,939 million
As of January 31, 2022: ¥1,707 million

Equity ratio

Net assets per share
%

Yen

59.7
35.0

61.48
32.96

*Non-Consolidated Operating Results compared to the previous fiscal year
A change in ordinary income from the previous fiscal year is mainly due to the foreign exchange gains resulting
from fluctuations in foreign exchange rates. A change in net loss from the previous fiscal year is mainly due to loss on
valuation of shares of subsidiaries and associates.
*These financial results are outside the scope of audit procedures by a certified public accountant or an audit
corporation.
* Explanation of the proper use of the financial results forecast and other notes(Note on forward-looking statements, etc.)
The earnings forecasts and other forward-looking statements herein are based on information available to theCompany at the time of preparation and certain assumptions deemed to be reasonable, and the Company does not assure
the achievement of any of these. Furthermore, actual results may vary significantly due to various factors. For theassumptions and notes for earnings forecasts, please refer to “1. Overview of Operating Results, etc., (4) Future Outlook”
on page 4 of the attachment.

Table of Contents
1. Overview of Operating Results, etc. .................................................................................................... 2(1) Overview of Operating Results for the Fiscal Year Under Review ................................................. 2(2) Overview of Financial Position for the Fiscal Year Under Review ................................................ 3(3) Overview of Cash Flows for the Fiscal Year Under Review ........................................................... 4(4) Future Outlook ................................................................................................................................ 4(5) Basic Policy for Distribution of Profit and Dividends for FY2023.1 and FY2024.1 ...................... 4
2. Basic Policy on Selection of Accounting Standards ............................................................................ 5
3. Consolidated Financial Statements and Primary Notes ....................................................................... 6(1) Consolidated Balance Sheets .......................................................................................................... 6(2) Consolidated Statements of Income and Comprehensive Income .................................................. 7
Consolidated Statements of Income ................................................................................................ 7
Consolidated Statements of Comprehensive Income ...................................................................... 8(3) Consolidated Statements of Changes in Net Assets ........................................................................ 9(4) Consolidated Statements of Cash Flows ....................................................................................... 11(5) Notes to the Consolidated Financial Statements ........................................................................... 12(Notes on going concern assumption) ...................................................................................... 12(Changes in accounting policies) .............................................................................................. 12(Segment information) ............................................................................................................. 12(Per share information) ............................................................................................................. 15(Significant subsequent events) .................................................................................................. 16

1

1. Overview of Operating Results, etc.
(1) Overview of Operating Results for the Fiscal Year Under Review
In the Japanese regenerative medicine industry, amid ongoing promotion of the industry by implementationof the Act on the Safety of Regenerative Medicine and the Revised Pharmaceutical Affairs Act of November
2014, three products were approved for manufacture and marketing as regenerative medicine products in 2022.
This brought the number of approved regenerative medicine products to 17. In addition, in the US, theRegenerative Medicine Advanced Therapy (RMAT) Designation program was established under the 21stCentury Cures Act which was passed in December 2016, which enables expedited approval of regenerative
medicine products for the purpose of treatment of serious diseases. In 2021, biologics license applications(BLAs) were approved for three products designated as RMAT, including one that received BLA approval as an
RMAT-designated product for the first time. No RMAT-designated items received BLA approval in 2022, but 14
items received new RMAT designation. As described above, practical application of regenerative medicine
advanced continuously in Japan and the US in 2022.
In this environment, the Group (hereinafter referring to three companies: the Company, SanBio, Inc. of
Mountain View, California, US, and SanBio Asia Pte. Ltd. of Singapore) promoted research and development
aiming at the commercialization of its unique regenerative cell medicine, SB623, mainly for central nervous
system diseases with high unmet medical needs.
For the SB623 development program for treatment of chronic traumatic brain injury, in the Phase 2 global
clinical trial including Japan and involving 61 patients, the Group obtained positive results in November 2018that the “patients treated with SB623 cells demonstrated a statistically significant improvement in their motor
function compared to the control group, and the primary endpoint was met.” In April 2019, the development
program for treatment of chronic traumatic brain injury in Japan was chosen as a designated regenerative medical
product by the Ministry of Health, Labour and Welfare under the “SAKIGAKE Designation System.” Since thedesignation, under the framework of the SAKIGAKE Designation System, the Company has negotiated with thePharmaceuticals and Medical Devices Agency (PMDA), completed the SAKIGAKE comprehensive evaluation
consultation in January 2022, and submitted the application for approval of manufacture and marketing ofregenerative medicine products in Japan in March 2022 for the first time. While the timing for approval is outsideof the Company’s control, the Company will continue to work on regulatory review and aims to obtain theapproval in the fiscal year ending January 31, 2024. The Company will also continue to build sales infrastructure
to ensure quick commercial launch upon approval.
For the SB623 development program for treatment of chronic hemorrhagic stroke that began following thepositive results of the program for treatment of chronic traumatic brain injury, efforts are being made to begin
clinical trials in Japan.
For the SB623 development program for treatment of chronic ischemic stroke, efforts are being made to
begin clinical trials in Japan based on the results of an additional analysis on the Phase 2b clinical trial in 163
patients in the US, which failed to meet its primary endpoint.
Under these circumstances, for the fiscal year ended January 31, 2023, the Company recorded ¥6,118
million in research and development expenses consisting of higher expenses attributed to a weakening yen
against the US dollar, an increase of manufacturing-related costs incurred to obtain approval with respect to theSB623 development program for treatment of chronic traumatic brain injury, and an increase of expenses
attributed to the booking of R&D expenses following the Company’s decision to use supplies initially set aside
for use in commercial production in R&D instead. As a result, operating loss was ¥7,899 million (operating lossof ¥6,620 million for the previous fiscal year). Ordinary loss was ¥4,698 million (ordinary loss of ¥4,579 million
for the previous fiscal year) due to the recording of ¥3,326 million of foreign exchange gains as non-operating
income owing to the foreign exchange gains resulting from fluctuations in foreign exchange rates. Furthermore,
net loss attributable to owners of parent was ¥5,559 million (net loss attributable to owners of parent of ¥4,677
million for the previous fiscal year).
The Group consists of a single business segment, regenerative cell therapy using modified allogeneic stem
cells. Therefore, description of business performance by segment is omitted.

2(2) Overview of Financial Position for the Fiscal Year Under Review(Current assets)
The balance of current assets at the end of the fiscal year under review was ¥6,967 million, an increaseof ¥1,615 million compared to the end of the previous fiscal year (¥5,351 million), mainly due to an increaseof ¥2,175 million in cash and deposits, despite a decrease of ¥467 million yen in supplies.
(Non-current assets)
The balance of non-current assets at the end of the fiscal year under review was ¥77 million, a decreaseof ¥81 million compared to the end of the previous fiscal year (¥159 million), mainly due to a decrease of ¥64
million in intangible assets.
(Current liabilities)
The balance of current liabilities at the end of the fiscal year under review was ¥1,090 million, a decreaseof ¥372 million compared to the end of the previous fiscal year (¥1,463 million), mainly due to decreases of¥244 million in current portion of long-term loans payable and ¥137 million in accrued expenses.
(Non-current liabilities)
The balance of non-current liabilities at the end of the fiscal year under review was ¥1,525 million, adecrease of ¥486 million compared to the end of the previous fiscal year (¥2,012 million), due to a decrease of¥1,347 million in long-term loans payable, despite an increase of ¥860 million in deferred tax liabilities.
(Net assets)
Total net assets at the end the fiscal year under review were ¥4,428 million, an increase of ¥2,393 million
compared to the end of the previous fiscal year (¥2,035 million), mainly due to an increase of ¥5,552 million
in capital stock and capital surplus respectively resulting from exercise of subscription rights to shares, despite
the recording of ¥5,559 million in net loss attributable to owners of parent and a decrease of ¥3,272 million inforeign currency translation adjustment.

3(3) Overview of Cash Flows for the Fiscal Year Under Review
Cash and cash equivalents (hereinafter referred to as “cash”) at the end of the fiscal year under review
were ¥6,675 million, an increase of ¥2,118 million compared to the end of the previous fiscal year (¥4,557
million).
Cash flows in each area of activity and their respective contributing factors are as follows.
(Cash flows from operating activities)
Net cash used in operating activities for the fiscal year under review was ¥7,434 million (an outflow of¥6,546 million for the previous fiscal year). This was primarily due to the recording of a loss before income
taxes of ¥4,697 million, foreign exchange gains of ¥3,380 million, and decrease in supplies of ¥510 million.
(Cash flows from investing activities)
Net cash used in investing activities for the fiscal year under review was ¥10 million (an outflow of ¥66
million for the previous fiscal year). This was primarily due to an outflow of¥7 million for purchase of property,
plant and equipment and an outflow of ¥3 million for payments of leasehold deposits.
(Cash flows from financing activities)
Net cash provided by financing activities for the fiscal year under review was ¥9,445 million (an outflow
of ¥1,495 million for the previous fiscal year). This was primarily due to an outflow of ¥1,592 million for
repayments of long-term loans payable and ¥10,956 million in proceeds from issuance of shares resulting fromexercise of subscription rights to shares.
(4) Future Outlook
The Group will continue with the review process to obtain approval of the SB623 development program
for treatment of chronic traumatic brain injury in Japan in the fiscal year ending January 31, 2024. At the sametime, in anticipation of the approval, the Group will also promote steady establishment of manufacturing,logistics, and sales infrastructure for the distribution of SB623 in Japan. Thereafter, the Group will work on
efforts to begin clinical trials of the SB623 programs for treatment of ischemic stroke and hemorrhagic stroke inJapan. At the same time, the Group will diligently control expenses to significantly reduce costs while
maintaining the outcome of the activities required for the approval of the SB623 development program fortreatment of chronic traumatic brain injury in Japan. All other activities will be scrutinized for opportunities forcost reduction.
Based on the above, the Group forecasts the financial results for the fiscal year ending January 31, 2024 toincur operating expenses of ¥4,642 million in total, including expenses related to the manufacture and marketing
approval for the SB623 development program for treatment of chronic traumatic brain injury and expenses toestablish manufacturing, logistics, and sales structure in Japan following its launch. As a result, the Group
forecasts an operating loss of ¥4,642 million, an ordinary loss of ¥4,597 million, and net loss attributable toowners of parent of ¥4,598 million.
The forecast is based on an exchange rate of ¥138.00 per U.S. dollar.
(5) Basic Policy for Distribution of Profit and Dividends for FY2023.1 and FY2024.1
The Company recognizes that the return of profits to shareholders is one of its most important management
policies. We determine dividends after taking into account the buildup of internal reserves in preparation forinvestments into research and development.
The Company has a basic principle of distributing dividends once a year at the fiscal year-end if dividends
from surplus are to be paid. The General Meeting of Shareholders is the decision-making body for the payment.
Additionally, the Company stipulates in its Articles of Incorporation that payment of interim dividends issubject to the resolution of the Board of Directors, with July 31 of each year as the record date.
As to the fiscal year ended January 31, 2023, no dividend will be paid, as there is no distributable amountpursuant to Article 461 of the Companies Act and Article 149 of the Ordinance on Accounting of Companies.
For the time being, the Company does not expect to pay dividends, in order to proactively engage in the researchand development of medicine, and intends to use its internal reserves from profits for reinvestments.

4

2. Basic Policy on Selection of Accounting Standards
The Group will prepare its consolidated financial statements based on Japanese GAAP for the time being,
given its comparability from period to period and between companies.
The Group plans to appropriately respond to the application of International Financial Reporting Standards(IFRS) upon considering the circumstances in Japan and overseas.

5

3. Consolidated Financial Statements and Primary Notes(1) Consolidated Balance Sheets(Thousand yen)
As of January 31, 2022
AssetsCurrent assets
Cash and deposits
Supplies
Advance payments
Other
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Tools, furniture and fixtures
Accumulated depreciation
Construction in progress
Total property, plant and equipment
Intangible assets
Investments and other assets
Other
Total investments and other assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Current portion of long-term loans payable
Accounts payable - otherAccrued expenses
Income taxes payable
Provision for bonuses
Other
Total current liabilities
Non-current liabilities
Long-term loans payable
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Foreign currency translation adjustment
Total accumulated other comprehensive income
Subscription rights to shares
Total net assets
Total liabilities and net assets

6

As of January 31, 2023

4,557,006
467,846
182,565
144,091
5,351,509

6,732,775－
46,506
187,980
6,967,262

240,412236,546(418,210)－
58,74866,283110,911
239,067(306,748)
4,633
47,863
1,292

34,36034,360159,392
5,510,901

28,69528,69577,851
7,045,114

512,500
340,149
451,898
122,494
21,65814,565
1,463,266

268,000
331,073314,590
605
60,875
115,129
1,090,274

2,012,500－
2,012,500
3,475,766

665,000
860,930
1,525,930
2,616,205

4,075,135
7,786,578(9,057,369)(853)
2,803,491

6,407,189
10,118,632(8,177,057)(899)
8,347,864(1,094,792)(1,094,792)
326,436
2,035,135
5,510,901(4,367,549)(4,367,549)
448,593
4,428,909
7,045,114

(2) Consolidated Statements of Income and Comprehensive Income
Consolidated Statements of Income(Thousand yen)
For the fiscal year ended
January 31, 2022

For the fiscal year ended
January 31, 2023－－

4,955,385
1,665,498
6,620,884(6,620,884)

6,118,125
1,781,183
7,899,308(7,899,308)

2,240
3,172
1,961,737
128,403328
2,095,882

4,010－
3,326,951－
3,532
3,334,494

44,606
10,194－－54,801(4,579,802)

25,27030,967
71,981
5,834
134,053(4,698,867)－
29,48729,487

1,434
－
1,434

10,107
10,107(4,560,423)
117,433－
117,433(4,677,856)(4,677,856)

9
9(4,697,443)
1,210
860,930
862,141(5,559,584)(5,559,584)

Operating revenue
Operating expenses
Research and development expenses
Other selling, general and administrative expenses
Total operating expenses
Operating loss
Non-operating income
Interest income
Dividend income
Foreign exchange gains
Gain on forgiveness of debts
Other
Total non-operating income
Non-operating expenses
Interest expenses
Financing expenses
Share issuance costs
Other
Total non-operating expenses
Ordinary loss
Extraordinary income
Gain on sale of non-current assets
Gain on reversal of subscription rights to shares
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Total extraordinary losses
Loss before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Net loss
Net loss attributable to owners of parent

7

Consolidated Statements of Comprehensive Income(Thousand yen)
For the fiscal year ended
January 31, 2022
Net loss
Other comprehensive income
Foreign currency translation adjustment
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to:Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

8

For the fiscal year ended
January 31, 2023

(4,677,856)(5,559,584)(1,752,436)(1,752,436)(6,430,293)(3,272,756)(3,272,756)(8,832,341)(6,430,293)(8,832,341)–－

(3) Consolidated Statements of Changes in Net Assets
For the fiscal year ended January 31, 2022 (From February 1, 2021 to January 31, 2022)(Thousand yen)
Shareholders’ equity
Capital stock
Balance at beginning ofcurrent period
Changes of items during
periodIssuance of new shares
Net loss attributable toowners of parent
Purchase of treasury shares
Transfer from share capitalto other capital surplus
Deficit disposition
Net changes of items otherthan shareholders’ equity
Total changes of items
during period
Balance at end of current
periodCapital surplus

Retained earnings

Treasury shares

5,561,072

9,272,515(7,356,499)

(853)

2,556

2,556

Total
shareholders’equity7,476,235

5,112(4,677,856)(4,677,856)－(1,488,493)

1,488,493(2,976,986)－
2,976,986－－(1,485,937)(1,485,937)(1,700,870)－(4,672,744)

4,075,135

7,786,578(9,057,369)(853)

2,803,491

Subscription

Total net assets

Accumulated other comprehensive income

Foreign currencytranslation
adjustment

Balance at beginning ofcurrent period
Changes of items during
periodIssuance of new shares
Net loss attributable toowners of parent
Purchase of treasury
sharesTransfer from share capitalto other capital surplus
Deficit disposition
Net changes of items otherthan shareholders’ equity
Total changes of items
during period
Balance at end of current
period657,644

Total
accumulated
othercomprehensive
income657,644rights to shares

216,044

8,349,925

5,112(4,677,856)－－－(1,752,436)(1,752,436)

110,391(1,642,045)(1,752,436)(1,752,436)

110,391(6,314,789)(1,094,792)(1,094,792)

326,436

2,035,135

9

For the fiscal year ended January 31, 2023 (From February 1, 2022 to January 31, 2023)(Thousand yen)
Shareholders’ equity
Capital stock
Balance at beginning ofcurrent period
Changes of items during
periodIssuance of new shares
Net loss attributable toowners of parent
Purchase of treasury
sharesTransfer from sharecapital to other capitalsurplus
Deficit disposition
Net changes of items otherthan shareholders’ equity
Total changes of items
during period
Balance at end of current
periodCapital surplus

Retained earnings

Treasury shares

4,075,135

7,786,578(9,057,369)(853)

5,552,002

5,552,002

Total
shareholders’equity2,803,491

11,104,004(5,559,584)(5,559,584)(46)(3,219,947)(46)

3,219,947－(6,439,895)

6,439,895

2,332,054

2,332,054

880,311(46)

5,544,373

6,407,189

10,118,632(8,177,057)(899)

8,347,864－

Accumulated other comprehensive income

Foreign currencytranslation
adjustment

Balance at beginning of current
periodChanges of items during period
Issuance of new shares
Net loss attributable toowners of parent
Purchase of treasury shares
Transfer from share capital toother capital surplus
Deficit disposition
Net changes of items other thanshareholders’ equity
Total changes of items
during period
Balance at end of current
period(1,094,792)

Total
accumulated
othercomprehensive
income(1,094,792)

Subscription

Total net assets

rights to shares

326,436

2,035,135

11,104,004(5,559,584)(46)－－(3,272,756)(3,272,756)

122,157(3,150,599)(3,272,756)(3,272,756)

122,157

2,393,773(4,367,549)(4,367,549)

448,593

4,428,909

10

(4) Consolidated Statements of Cash Flows(Thousand yen)
For the fiscal year ended
January 31, 2022
Cash flows from operating activities:
Loss before income taxes
Depreciation
Share based compensation expenses
Increase (decrease) in provision for bonuses
Interest and dividend income
Foreign exchange losses (gains)
Gain on forgiveness of debts
Interest expenses
Financing expenses
Share issuance costs
Gain on reversal of subscription rights to shares
Loss (gain) on sale of non-current assets
Loss on retirement of non-current assets
Decrease (increase) in supplies
Decrease (increase) in advance payments
Increase (decrease) in accounts payable - other
Increase (decrease) in accrued expenses
Other
SubtotalInterest and dividends received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Purchase of intangible assets
Payments for asset retirement obligations
Payments of leasehold deposits
Proceeds from refund of leasehold deposits
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Repayments of long-term loans payable
Payments of financing expenses
Proceeds from issuance of shares resulting from exercise ofsubscription rights to shares
Proceeds from issuance of share acquisition rights
Other
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
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

11

For the fiscal year ended
January 31, 2023

(4,560,423)
132,467
141,241
14,663(5,412)(1,964,023)(128,403)
44,606
10,194－(4,697,443)
24,615102,978
37,720(4,010)(3,380,690)－
25,27030,967(29,487)－
10,107
3,487(61,019)
101,261(22,421)(5,831)(6,318,993)
5,412(45,531)(187,553)(6,546,664)－(1,434)9
510,107
162,585(52,410)(189,169)
35,580(7,323,342)
4,010(25,583)(89,232)(7,434,147)(41,668)－(14,409)(10,800)(18,036)
18,652(66,261)(7,908)
1,434
(95)
－
(3,530)－(10,100)(500,000)(975,000)(24,234)－(1,592,000)(17,527)

3,749

10,956,657－－(1,495,484)
185,250(7,923,159)
12,480,165
4,557,006

98,700(46)
9,445,783
116,655
2,118,192
4,557,006
6,675,198

71,981

(5) Notes to the Consolidated Financial Statements(Notes on going concern assumption)
None(Changes in accounting policies)(Application of the Accounting Standard for Revenue Recognition, etc.)
The Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29,
March 31, 2020; hereinafter referred to as the “Revenue Recognition Accounting Standard”) and otherstandards from the beginning of the fiscal year under review. The Company recognizes revenue when control
of a promised good or service is transferred to a customer in an amount that reflects the consideration to which
the Company expects to be entitled in exchange for those goods and services.
The application of the Revenue Recognition Accounting Standard has no effect on the consolidated
financial statements.

(Application of the Accounting Standard for Fair Value Measurement, etc.)
The Company has applied the “Accounting Standard for Fair Value Measurement” (ASBJ Statement No.
30, July 4, 2019; hereinafter referred to as the “Fair Value Measurement Accounting Standard”) and otherstandards from the beginning of the fiscal year under review, and will prospectively apply the new accounting
policies stipulated by the Fair Value Measurement Accounting Standard, etc. in accordance with thetransitional treatment provided in Paragraph 19 of the Fair Value Measurement Accounting Standard andParagraph 44-2 of the “Accounting Standard for Financial Instruments” (ASBJ Statement No. 10, July 4, 2019).
This has no effect on the consolidated financial statements.

(Segment information)<Segment information>
For the fiscal year ended January 31, 2022 (from February 1, 2021 to January 31, 2022)
Segment information is omitted as the Group consists of a single business segment, regenerative celltherapy using modified allogeneic stem cells.

For the fiscal year ended January 31, 2023 (from February 1, 2022 to January 31, 2023)
Segment information is omitted as the Group consists of a single business segment, regenerative celltherapy using modified allogeneic stem cells.

<Related information>
Fiscal year ended January 31, 2022 (from February 1, 2021 to January 31, 2022)
1. Information by products and services
None

2. Information by geographical segment
12(1) Operating revenue
None(2) Property, plant and equipment(Thousand yen)
Japan

US

Total

39,233

19,51458,748

3. Information by major customer
None

Fiscal year ended January 31, 2023 (from February 1, 2022 to January 31, 2023)
1. Information by products and services
None

2. Information by geographical segment(1) Operating revenue
None(2) Property, plant and equipment(Thousand yen)
Japan

US
41,493

Total
6,370

3. Information by major customer
None

13

47,863

<Information concerning impairment loss on non-current assets by reporting segment>
Fiscal year ended January 31, 2022 (from February 1, 2021 to January 31, 2022)
None

Fiscal year ended January 31, 2023 (from February 1, 2022 to January 31, 2023)
None<Information concerning amortization and unamortized balance of goodwill by reporting segment>
Fiscal year ended January 31, 2022 (from February 1, 2021 to January 31, 2022)
None

Fiscal year ended January 31, 2023 (from February 1, 2022 to January 31, 2023)
None<Information concerning gain on bargain purchase by reporting segment>
Fiscal year ended January 31, 2022 (from February 1, 2021 to January 31, 2022)
None

Fiscal year ended January 31, 2023 (from February 1, 2022 to January 31, 2023)
None

14

(Per share information)(Yen)
For the fiscal year

For the fiscal year

ended January 31, 2022

ended January 31, 2023

Net assets per share

32.99

62.12

Net (loss) per share(90.33)(95.99)(Notes) 1. Diluted net income per share is not stated, despite the existence of potential shares, due to theposting of net loss per share.
2. The basis for calculating net loss per share is as follows.
For the fiscal year

For the fiscal year

ended January 31, 2022

ended January 31, 2023

Net (loss) attributable to owners ofparent (Thousand yen)

(4,677,856)(5,559,584)－－(4,677,856)(5,559,584)

51,789,136

57,918,166

Amount not attributable to commonshareholders (Thousand yen)
Net (loss) attributable to owners ofparent associated with commonshares (Thousand yen)
Average number of shares during theperiod (Shares)
Outline of potential shares that were

7th, 8th, 12th,

7th, 8th, 9th, 12th,

not included in the calculation of

14th through 21st,

14th through 21st,

diluted net income per share because

23rd through 25th,

23rd through 25th,

they have no dilutive effects

and 27th through 31st Shareand 27th through 31st, 33rd Share

Acquisition Rights

Acquisition Rights(total number of subscription rights(total number of subscription

to shares: 372,716)

rights to shares: 413,759)

15

(Significant subsequent events)(Exercise of the 34th share acquisition rights with exercise price amendment clause by third-party allotment)
The 34th share acquisition rights issued by the Company were exercised from February 1, 2023 to February
28, 2023 as follows
Number of exercised share acquisitionrights4,200 (4.67% of total issued)

Number of shares issued

420,000 shares

Total exercise price292,480 thousand yen

Number of unexercised share acquisition

41,100 units

rightsNumber of shares to be increased

420,000 shares

Capital increase

147,353 thousand yen

Capital reserves increase

147,353 thousand yen(Acquisition and cancellation of stock options (share acquisition rights))
At a meeting of the Board of Directors on February 15, 2023, the Company passed a resolution to acquireand cancel a portion of the share acquisition rights already issued by the Company.
1. Reason for acquisition and cancellation of share acquisition rights
Of the share acquisition rights already issued by the Company, with respect to the 7th, 9th, 15th, 16th, 18th
through 20th, and 22nd through 26th share acquisition rights, some of the grantees have ceased to be service
providers as stipulated in the issuance guidelines for each series of share acquisition rights and have become
subject to the reasons for acquisition without compensation in the relevant issuance guidelines. Therefore, theCompany has decided to cancel a total of 119,734 share acquisition rights (119,734 shares of common stock
being the target of said rights) after acquiring them for no compensation, in accordance with the provisions of
the relevant issuance guidelines.
2. Date of acquisition and cancellation of share acquisition rights
March 3, 2023
3. Share acquisition rights subject to acquisition and cancellation(1) 7th share acquisition rights
5,000 units(2) 9th share acquisition rights
434 units(3) 15th share acquisition rights
3,000 units(4) 16th share acquisition rights
3,000 units(5) 18th share acquisition rights
20,000 units(6) 19th share acquisition rights
2,500 units(7) 20th share acquisition rights
4,000 units(8) 22nd share acquisition rights
4,900 units(9) 23rd share acquisition rights
51,000 units(10) 24th share acquisition rights
12,000 units(11) 25th share acquisition rights
4,000 units(12) 26th share acquisition rights
9,900 units(Reduction in amounts of stated capital and capital reserves and appropriation of capital surplus)
At the meeting of Board of Directors held on March 16, 2023, the Company resolved to submit to theCompany’s 10th annual general meeting of shareholders, to be held on April 26, 2023, a proposal to reduce
the amounts of stated capital and capital reserves and to make an appropriation of capital surplus.

16

1. Purpose of reduction in amounts of stated capital and capital reserves and appropriation of capital surplus
With the aim of reducing the Company’s tax burden through a reduction in its stated capital andcapital reserves, achieving a healthier financial platform by covering this deficit, and ensuring agile
capital policy, including shareholder returns (dividends and acquisition of treasury shares) for the future,
the Company will carry out a reduction in the amounts of its stated capital and its capital reserves andappropriation of capital surplus.

2. Outline of reduction in amounts of stated capital and capital reserves
The Company will reduce the amounts in stated capital and capital reserves in accordance with
Article 447, Paragraph 1 and Article 448, Paragraph 1 of the Companies Act, and then post these to othercapital surplus.
(1) Amounts by which stated capital and capital reserves will be reduced:
Stated capital: ¥4,435,693,788 of ¥6,407,189,913
Capital surplus: ¥4,435,693,788 of ¥6,404,689,897(2) Amount by which other capital surplus will be increased:
Other capital surplus: ¥8,871,387,576

3. Outline of appropriation of other capital surplus
Subject to the reduction in the amounts of stated capital and capital reserves (detailed above)
becoming effective, the Company will, in accordance with Article 452 of the Companies Act, post theother capital surplus to retained earnings brought forward so as to cover the deficit. In doing so, theamount of retained earnings brought forward after the posting will be 0 yen.
(1) Amount by which other capital surplus will be reduced:
Other capital surplus: ¥8,871,387,576(2) Amount by which retained earnings brought forward will be increased:
Retained earnings brought forward: ¥8,871,387,576

4. Schedule of reduction in amounts of stated capital and capital reserves and appropriation of capital surplus(1) Date of resolution by Board of Directors: March 16, 2023
(2) Date of resolution at annual general meeting of shareholders: April 26, 2023 (planned)(3) Deadline for submission of objections by creditors: May 30, 2023 (planned)(4) Effective date: June 6, 2023 (planned)

17