UNOFFICIAL TRANSLATION
The formal official document is in Japanese

Summary of Consolidated Financial Results for the First Three Quarters of
Fiscal Year ending September 30, 2022 (Japanese Accounting Standards)
August 5, 2022
Tokyo Stock Exchange

Listed Company Name: MTI Ltd.
Listing Exchanges:
Securities Code9438
URL
https://ir.mti.co.jp/eng/
Representative:
Toshihiro Maeta, President and Chief Executive Officer
Contact:
Hiroshi Matsumoto, Senior Managing Director
Phone: +81-3-5333-6323
Scheduled date to submit the Quarterly Securities Report (Shihanki Houkokusho): August 15, 2022
Scheduled date of dividend payment: Supplementary documents for quarterly results: Yes
Quarterly results briefing: Yes (for securities analysts and institutional investors(On-demand))(Figures less than one millions of yen are omitted)

1. Consolidated business results for the nine months ended June 30, 2022
(October 1, 2021– June 30, 2022)(1) Consolidated operating results (cumulative total)
Net salesFirst three quarters of fiscal year
ending September 30, 2022
First three quarters of fiscal year
ended September 30, 2021
(Note) Comprehensive income

Operating income

Millions of yen%

19,354(0.8)

19,504

0.1

Millions of yen%

Millions of yen%

Millions of yen%

422 (76.5)

87 (93.1)(88)－

1,796 (11.0)

1,269 (35.3)(1,094)－

Nine months ended June 30, 2022: (273) millions of yen (－%)
Nine months ended June 30, 2021: (1,025) millions of yen (－%)
Net income
per shareFirst three quarters of fiscal year
ending September 30, 2022
First three quarters of fiscal year
ended September 30, 2021

(Percentages represent year-on-year changes)
Profit attributable toOrdinary income
owners of parent

Net income
per share/diluted
Yen

Yen

(1.62)－(20.02)－(2) Consolidated financial position
Total assets
As of June 30, 2022
As of September 30, 2021
(Reference) Shareholders’ equity:

Net assets

Equity ratio

Millions of yen

Millions of yen%

28,61631,90818,567
21,243

51.7
54.6

As of June 30, 2022: 14,786 millions of yen
As of September 30, 2021: 17,426 millions of yen

2. Dividends
Dividend per share
End of firstquarter

End of second
quarter

Yen

Fiscal year ended September 30, 2021－
Fiscal year ending September 30, 2022－
Fiscal year ending
September 30, 2022(forecast)(Note) Revisions to dividend forecasts published most recently: No

End of third
quarterYear end

Annual

Yen

Yen

Yen

Yen

8.00
8.00

－
－

8.00

16.00

8.00

16.00

3. Forecast for consolidated business results for the fiscal year ending September 30, 2022
(October 1, 2021 – September 30, 2022)
Net sales
Full year(Percentages represent year-on-year changes.)
Profit attributable to
Net income
Ordinary income
owners of parent
per share

Operating income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

Yen

25,8000.2

300(84.5)

(100)

－

(190)

－

(3.47)(Note) Revisions to forecasts for consolidated business results published most recently: Yes* Note:(1) Important changes of subsidiaries during the term(changes in specified subsidiaries resulting in change in scope of consolidation): Not applicable
New: –
Exception: –(2) Application of specific accounting treatment to the preparation of quarterly consolidated financial statements: Not

applicable(3) Changes in accounting policies and changes or restatement of accounting estimates(i) Changes in accounting policies due to the modification in accounting methods:(ii) Changes in accounting policies other than (i):(iii) Changes in accounting estimates:(iv) Restatement:

ApplicableNot applicableNot applicableNot applicable(4) Number of outstanding shares (common shares)(i) Number of shares outstanding at the end of period (including treasury shares):6/22: 61,248,200 shares
9/21: 61,248,200 shares(ii) Number of treasury shares at the end of period
6/22: 6,450,273 shares
9/21: 6,496,273 shares(iii) Average number of shares during the period (quarterly consolidated cumulative period)
Nine months ended 6/22: 54,774,419 shares
Nine months ended 6/21 54,687,183 shares* Status of a quarterly review
This earnings release is not subject to an audit.

* Cautionary statement with respect to forward-looking statements
The forward-looking statements included in this material are based on the Company’s judgments, assumptions, andconvictions based on information available to the Company at the time of publication of this document and may differ
materially from actual results for a range of factors, including conditions of Japanese and overseas economies, changes inthe situation of operations in Japan and overseas, and uncertainties and potential risks inherent in forward-looking
statements. The risks and uncertainties include unforeseeable effects of future events. The information on consolidated
earnings forecasts and other future forecasts on page 4 of the Accompanying Materials describes notes on the assumptionsof the earnings forecasts and the use of the earnings forecasts.
While the Company planned to hold a briefing on earnings in the first three quarters chiefly for securities analysts andinstitutional investors, will post the on-demand delivery of the briefing and related materials on its website on Monday,
August 8, 2022, for original Japanese version. English dubbing will be available at a later date.

Accompanying materials – Contents
1. Qualitative information on financial results for the current quarterly settlement ....................................................2(1) Explanation on operating results .....................................................................................................................2(2) Explanation on financial position ...................................................................................................................4(3) Explanation of future forecast information including consolidated forecast ..................................................4
2. Quarterly Consolidated financial statements and important notes ......................................................................5(1) Quarterly consolidated balance sheet ...........................................................................................................5(2) Quarterly consolidated statement of income and quarterly consolidated statement ofcomprehensive income ..................................................................................................................................71

1. Qualitative information on financial results for the current quarterly settlement(1) Explanation on operating results overview of the first three quarters of fiscal year ending September 30,
2022 (Period from October 1, 2021 to June 30, 2022)
Looking at the Group's business environment during the first nine months under review, the Japanese economy was
severely affected by the prolonged COVID-19 pandemic, although the impact on the Group's consolidated financial
results was minor.
In the content business, the Group increased the number of new subscribers to the “AdGuard” security-relatedapp, which was in high demand, although the acquisition of new subscribers through mobile phone stores remained
weak. It also increased monthly distribution of original comics to digital comic distributors.
In the healthcare business, the Group facilitated collaboration with its partner, Medipal Holdings Corporation,
in a bid to spur more pharmacies to introduce the cloud drug record service, given that the appetite for the
introduction of this service was growing, and to promote sales of child bearing-related solutions, such as thematernal health record book app, to local governments.
As a result, net sales stood at ¥19,354 million yen (down 0.8% year on year).
Gross profit declined to ¥13,597 million (down 5.3% year on year) although net sales remained almost at thesame level. This is because the other business, where the rate of cost of sales was high, accounted for a larger
percentage of total net sales due to a rise in sales in the business and low-profit projects increased in this business.
Operating income and ordinary income came to ¥422 million (down 76.5% year on year) and ¥87 million (down
93.1% year on year), respectively. This reflected an increase in selling, general and administration (SG&A)
expenses primarily due to rises in personnel expenses, subcontracting expenses and depreciation as a result ofefforts made to strengthen the Group’s product development capability, particularly in the school digitaltransformation business that Motivation Works Inc., a subsidiary, is actively working to develop, although there
were reductions in rents linked to a shift to the teleworking system.
Loss attributable to owners of parent came to ¥88 million (compared to a loss of ¥1,094 million in the same
period of the previous year) mainly because the recorded amount of corporate taxes was significantly lower than
the year-ago level, despite a decline in ordinary income.
Consolidated business results(Period from October 1, 2021 to June 30, 2022)
First three quarters

First three quartersof the fiscal year endingof the fiscal year ended

September 30, 2022

September 30, 2021

ChangeAmountPercentage

Millions of yen

Millions of yen

Millions of yen%

Net sales

19,354

19,504

(149)

(0.8)

Cost of sales

5,756

5,147

+608

+11.8

Gross profit

13,597

14,356

(758)

(5.3)

SG&A

13,175

12,560+615+4.9Operating income

422

1,796

(1,373)(76.5)

Ordinary income

87

1,269

(1,181)(93.1)

Loss attribute to ownersof parent(88)(1,094)+1,006-2

Breakdown of SG&A
(Period from October 1, 2021 to June 30, 2022)
First three quartersof the fiscal year ending
September 30, 2022

First three quartersof the fiscal year ended
September 30, 2021

Millions of yen

Millions of yen

Millions of yen

%

Total

13,175

12,560+615+4.9

Advertising expense

1,137

1,104

+33

+3.0

Personnel expenses

5,786

5,251

+534

+10.2

Commission fee

2,315

2,351

(35)

(1.5)

Subcontract expenses

1,542

1,340

+202

+15.1

991

846

+145

+17.2

1,400

1,666

(265)

(15.9)

Depreciation
Other

ChangeAmountPercentage

Operating results by segment are as follows.
① Content business
The content business includes B2C monthly billing services (excluding the “Luna-Luna” healthcare service forwomen and the “CARADA medica” health Q&A service in cooperation with healthcare professionals) and theB2B original comic distribution business that offers original comic content to comic distributors.
This segment served 3.20 million of paying subscribers. The figure was 320 thousand smaller than at the endof September 2021. Following mobile carriers’ termination of the feature phone service, the net decrease in thenumber of paying subscribers expanded. Excluding this factor, however, a net decline in the number of paying
subscribers was becoming moderate in the content business, reflecting continuing growth in the number ofpaying subscribers to the “AdGuard” security-related app.
Net sales stood at ¥13,418 million (down 7.2% year on year), reflecting a year-on-year decrease in the numberof paying subscribers, which more than offset an increase in sales in the original comics business. Operating
income was ¥4,186 million (down 13.5% year on year) mainly due to a year-on-year decrease in the number ofpaying subscribers.
② Healthcare business
The healthcare business includes B2C monthly billing services under the “Luna-Luna” and “CARADA medica”
brands and B2B and B2B2C healthcare services for medical institutions and local governments, such as thecloud drug record service and the maternal health record book app.
This segment served 600 thousand of paying subscribers. The figure was 40 thousand smaller than at the endof September 2021. On the other hand, the number of pharmacies that offer the cloud drug record service came
to 1,096 at the end of June 2022 (up 331 from the end of September 2021) as the result of great efforts focusedon increasing the number of pharmacies whose motivation to introduce such service is growing.
Net sales came to ¥2,916 million (up 2.3% year on year). Although a rise in the sales of the cloud drug record
service, it was not enough to offset a year-on-year decrease in the number of paying subscribers.
Operating loss was stood at ¥899 million (compared to a loss of ¥1,008 million recorded for the same periodof the previous year) due to the continued burden of upfront investment spending.
③ Other business
Other business includes the B2B-type AI business operated by Automagi Inc., a consolidated subsidiary, theCompany’s DX support business for large companies and solution business, and the school DX business
operated by Motivation Works Inc., a consolidated subsidiary.
In this segment, net sales stood at ¥4,010 million (up 28.8% year on year), reflecting steady sales in the AI
business and a rise in sales in the DX support business for major companies and the school DX business. The
operating loss came to ¥963 million (compared to a loss of ¥36 million recorded for the same period of theprevious fiscal year) chiefly due to a rise in the cost of sales, which resulted from an increase in low-profit
projects in the DX support business for major companies, higher personnel expenses due to an increase in thenumber of personnel for strengthening the school DX business structure, and increases in subcontract expenses
for strengthening development capability and depreciation.
3

(2) Explanation on financial position① Assets, liabilities and net assets
At the end of the first three quarters under review, total assets decreased ¥3,292 million from the end of
September 2021, to ¥28,616 million.
Current assets decreased ¥3,558 million mainly due to a fall in cash and deposits. Non-current assets rose¥265 million chiefly due to an increase in software, which more than offset a decrease in investment securities.
Current liabilities decreased ¥387 million, primarily reflecting a decline in income taxes payable, more thanoffsetting an increase in contract liabilities linked to the application of the Accounting Standard for Revenue
Recognition, etc. Non-current liabilities fell ¥228 million mainly due to a decline in long-term loans payable.
Net assets decreased ¥2,676 million due to the payment of dividends and the effects of the application of the
Accounting Standard for Revenue Recognition, etc., despite the posting of ¥88 million as loss attributable toowners of parent.
(3) Explanation of future forecast information including consolidated forecast
The Company will work hard to expand sales and cut losses of its healthcare business, which is expected to playa key role in increasing revenue and earnings in the future. In the content business, it will make every effort toincrease the number of paying subscribers by expanding sales of the “AdGuard” security-related app andstriving to bolster the original comic distribution business.
In the other business, the Group will focus on expanding the school DX business that Motivation Works Inc.,a subsidiary of the Company, is actively working to develop. In response to a large number of business inquiries
about “BLEND”, the cloud-based school affairs support system provided by Motivation Works Inc., the Groupis making an investment, which is upfront investment from a short-term perspective, to achieve businessexpansion from the next fiscal year. The investments are made to increase the number of personnel to strengthen
the business structure, using subcontractors to deal with increasing implementations of the system, anddeveloping the system to improve its scalability.
The Company takes medium- and long-term perspectives in its engagement in the healthcare business, which
has strong potential for future growth and compared with B2C transactions, may move toward a more stable
stock-type business through the establishment of long-term business relationships with customers. Therefore,
the Company is committed to implementing a variety of measures to achieve sales growth.
Among others, the cloud drug record service will help the healthcare business attain continuous sales growth,since the appetite for introducing the service has been growing among pharmacies. The Company will acceleratesales tie-ups with companies that provide IT solutions to pharmacies to make sure that more stores will introduce
the service, while simultaneously strengthening collaboration with its partner, Medipal Holdings Corporation.
It will also enhance childcare-related services with a focus on local governments that have introduced the“Boshimo”, a maternal health record book app, and will advance digital cooperation among local governments,
hospitals, and residents, thereby advancing its “Boshimo” childcare DX platform strategy to enable thehealthcare business to make a contribution to profit in the medium term.
With regards to forecasts for consolidated business results for the fiscal year ending September 30, 2022,
operating income, ordinary income and profit (loss) attributable to owners of parent were revised as stated in
the “Notice of Revision of Consolidated Results Forecast for Fiscal Year Ending September 2022” announced
today.
Earnings forecast for the fiscal year ending September 30, 2022
(Period from October 1, 2021 to September 31, 2022)(Millions of yen)

YoY(%)Net sales

25,800+0.2

Operating income

300(84.5)

Ordinary income

(100)

－

Loss attributable toowners of parent

(190)

－

4

2. Quarterly consolidated financial statements and important notes(1) Quarterly consolidated balance sheet（Unit: thousands of yen）
Previous fiscal year
(As of September 30, 2021)

Current fiscal year
(As of June 30, 2022)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Notes and accounts receivable - trade, and contract
assetsOther
Allowance for doubtful accounts

15,540,084
4,501,674

11,055,142－

4,198,304

1,254,252

2,489,395－(33,173)(38,111)

21,262,838

17,704,730

203,001

196,880

Software
Goodwill

1,791,596
556,4212,728,804
664,872

Customer-related assets
Other

1,333,800
30,009

1,017,900
133,424

Total intangible assets

3,711,827

4,545,002

Investments and other assets
Investment securities

4,511,728

3,742,054

Lease and guarantee deposits
Deferred tax assets

318,761
1,803,442

315,4902,010,968

Other
Allowance for doubtful accounts

108,143(10,904)

112,212(10,904)

Total investment and other assets
Total non-current assets

6,731,170
10,646,000

6,169,821
10,911,703

31,908,839

28,616,434

Total current assets
Non-current assets
Property, plant and equipment
Intangible assets

Total assets

5

(Unit: thousands of yen)Previous fiscal year
(As of September 30, 2021)

Current fiscal year
(As of June 30, 2022)

Liabilities
Current liabilities
Account payable-trade

1,147,543

998,095

Current portion of long-term borrowings
Accounts payable-other451,780
1,230,095

451,780
1,355,171

Income taxes payable
Contract liabilities

2,156,218

8,256
2,594,294－

Provision for bonuses
Provision for point card certificates－
115,396

206,508

Other

1,554,849－
654,025

Total current liabilities

6,655,884

6,268,131

2,429,790
1,572,854

2,090,955
1,681,410

6,935

8,707

Non-current liabilities
Long-term borrowings
Retirement benefit liability
Other
Total non-current liabilities

4,009,579

3,781,072

10,665,464

10,049,204

Share capital
Capital surplus

5,197,909
6,660,831

5,212,239
6,586,804

Retained earnings
Treasury shares

8,665,046(3,281,839)

6,066,153(3,257,237)

Total shareholders' equity

17,241,947

14,607,959

Total liabilities
Net assets
Shareholders' equity

Accumulated other comprehensive income
Valuation difference on available-for-sale securities

165,205

90,590Foreign currency translation adjustment
Remeasurements of defined benefit plans

5,908
13,87976,417
11,727

Total accumulated other comprehensive income

184,993

178,735

Subscription rights to shares

161,887

158,944

Non-controlling interests

3,654,545

3,621,589

Total net assets

21,243,375

18,567,229

31,908,839

28,616,434

Total liabilities and net assets

6

(2) Quarterly consolidated statements of income and quarterly consolidated statement of comprehensive
incomeQuarterly consolidated statement of income
For the first three quarters(Unit: thousands of yen)
For the first three quarters
For the first three quartersof the current fiscal yearof the current fiscal year
(from Oct 1, 2020 to Jun 30, 2021) (from Oct 1, 2021 to Jun 30, 2022)

Net sales
Cost of sales

19,504,023
5,147,613

19,354,186
5,756,213

Gross profit

14,356,410

13,597,973

Selling, general and administrative expenses

12,560,021

13,175,305

Operating income

1,796,389

422,668

Non-operating income
Interest income

8089

Dividend income
Foreign exchange gains－
16,1407,012
71,966

Subsidy income
Cancellation of treasury share acquisition rights gains

28,43821,424

13,542

Other

26,953－
24,417

Total non-operating income

93,037

117,027

5,273

4,239

521,996406,668

92,67840,827

Non-operating expenses
Interest expenses
Share of loss of entities accounted for using equity
methodOther
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sale of non-current assets
Gain on sales of investment securities
Gain on sale of shares of subsidiaries and associates

619,948451,735

1,269,477

87,960

3,030

－

3,184

－
12,417

Gain on change in equity－
80,082

Total extraordinary income

86,29688,898Loss on sale of non-current assets
Loss on retirement of non-current assets

8,217
26,591－
14,926

Impairment loss
Loss on sale of investment securities

76,949909
3,240

76,481

Extraordinary losses－
11

Loss on valuation of investment securities
Loss on step acquisitions

－

－
4,700

Total extraordinary losses

111,769

23,776

Income before income taxes

1,244,004

153,082

Income taxes-current

2,448,114

26,437

Income taxes-deferred

82,247394,349

Total income taxes

2,530,362

420,786Loss(1,286,358)(267,704)(191,607)(179,095)(1,094,750)(88,609)

Loss attributable to non-controlling interests
Loss attributable to owners of parent

7

Quarterly consolidated statement of comprehensive income
For the first three quarters(Unit: thousands of yen)
For the first three quarters
For the first three quartersof the current fiscal yearof the current fiscal year
(from Oct 1, 2020 to Jun 30, 2021) (from Oct 1, 2021 to Jun 30, 2022)

Loss
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment, before tax(1,286,358)(267,704)

222,592(68,238)
69,856

12,167(4,347)

Remeasurements of defined benefit plans, before tax
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income(2,152)30,334(5,114)

260,748(5,649)(1,025,610)(273,353)(833,970)(94,867)(191,640)(178,485)

Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

8