DISCLAIMER: This document was prepared using our machine translation, and no manual modification has been made to thetranslated contents. This document is to be used solely as a reference and in cases where any differences occur between English
version and the original Japanese version, the Japanese version shall prevail. The consolidated financial statements in thisdocument are unaudited.

Consolidated Financial Results for the Fiscal Year Ended February 28, 2023 (Japanese GAAP)
April 14, 2023
Company name

MetaReal Corp.

Stock Code
Representative

6182(Title)Contact(Title)Listing Market TSE

URL https://www.metareal.jp
Representative Director and CEO (Name) Junichi Goishi
Director, General Manager of(Name) Taketo Arakawa
Group Administration Division

Scheduled date of annual generalshareholders meeting
Scheduled date of filing of annual
securities report

May 26, 2023

TEL 03-6685-9570

Scheduled date of commencement of dividend payment -May 29, 2023

Preparation of supplementary materials for financial results: Yes
Holding of financial results briefing: Yes(Figures are rounded down to the nearest million yen)
1. Consolidated Financial Results for the Fiscal Year Ended February 28, 2023 (March 1, 2022 to February 28, 2023)(1) Consolidated Results of Operation(Percentages indicate year-on-year changes.)
Net income attributable toowners of parent
Millions of yen
Millions of yen
Millions of yen
Millions of yen%%%%
FY2/23
4,292
3.2
515
460.6
516
29
FY2/22
4,159
3.9
91
21.3
△45
△1,238(Note) Comprehensive income FY2/23
29 Millions of yen(-%)
FY2/22△1,238 Millions of yen (-%)
Net income to
Ordinary income Operating income
Net income per share Diluted net income per share
shareholders' equity
to total assets
to net assets
Yen
Yen
%
%
%
FY2/23
2.77
2.73
2.8
11.3
12.0
FY2/222.2△116.24△72.4△0.9(Reference) Income on equity method investments FY2/23
FY2/22△17 Millions of yen△163 Millions of yen(Note) [Accounting Standard for Revenue Recognition] (ASBJ Statement No. 29, March 31, 2020) and other accounting standards
have been applied since the beginning of the fiscal year under review. Figures related to the fiscal year ended February 28,
2023, represent figures after the application of these accounting standards. Year-on-year changes are calculated by comparing
figures for the fiscal year ended February 28, 2023, following application of the relevant accounting standards etc., with thosefor the fiscal year ended February 28, 2022, prior to application of the relevant accounting standards.
(2) Consolidated Financial Position
Total assets
Net assets
Shareholders' equity ratio
Net asset per share
Millions of yen
Millions of yen%
Yen
FY2/23
4,220
1,133
25.9
102.19FY2/22
4,908
1,098
21.5
99.23
Net sales

Operating income

Ordinary income(Reference) Shareholders' equity
FY2/23
1,092 Millions of yen
FY2/22 1,057 Millions of yen(Note) [Accounting Standard for Revenue Recognition] (ASBJ Statement No. 29, March 31, 2020) and other accounting standards
have been applied since the beginning of the fiscal year under review. Figures related to the fiscal year ended February 28,
2023, represent figures after the application of these accounting standards.
(3) Consolidated Cash Flows
Cash flows from operating Cash flows from investing Cash flows from financing Cash and cash equivalent at
activities
activities
activities
the end of the year
FY2/23
FY2/22Millions of yen

Millions of yen

Millions of yen

Millions of yen

507
523

△155
△351

△217
△49

2,542
2,410

2. Dividend payment

FY2/22
FY2/23
FY2/24(Forecast)

Annual dividend per share
Total amount of dividends Payout ratio Dividend on equity(Total)(Consolidated) (Consolidated)
End of Q1 End of Q2 End of Q3 Year-end Total%%
Millions
of
yen
Yen
Yen
Yen
Yen
Yen
0.00
0.00 0.00
0.00
0.00 0.00
-

0.00

-

0.00

0.00

-

3. Consolidated Business Forecasts for the Fiscal Year Ending February 29, 2024 (March 1, 2023 to February 29, 2024)(Percentages indicate year-on-year changes.)
Net sales
Millions of yen

Full year

4,589

Operating income% Millions of yen
6.9
611

Ordinary income% Millions of yen
18.6
-

%
-

Net income attributable toowners of parent

Net income per
share

%
-

Yen

Millions of yen--◆Consolidated Business Forecasts by Segment(Percentages indicate year-on-year changes.)
Net sales
Full year

Operating income

Millions of yen%

Millions of yen%

MT business

3,152

8.3

599

△4.9

HT business

1,416

3.4

254

△4.6

Metaverse business

20

95.0

△280

-

Other corporate expenses

-

-

36

△15.2

(Note)1.

In the fiscal year ended February 28, 2023, we forecast business results over a range. However, in light of theaccumulation of information from the speech AI translation release and the transition of the COVID-19 to Class 5
infectious diseases, we have decided to make a spot business forecast for the fiscal year ending February 29, 2024 insteadof a business forecast over a range.
While the impact of Metareal AI (see the March 8, 2023, Disclosure [Notice Regarding the Commencement of New
Businesses by Subsidiaries]) on business results is incorporated in the above forecasts, we have recorded expenses in the
MT business in the same amount as the increase in net sales (430 million yen) that corresponds to 10% of net sales for theimmediately preceding fiscal year.
As for Metareal AI expenses, although special expenditures through May 31, the date of business commencement, arelimited, in light of industry trends and growth-curve transformation being very fast and difficult to estimate, we will incur2.

expenses equal to the impact of sales. As a result, we have used a conservative forecast of an increase in sales by Metareal
AI of the same amount.
In addition, gains and losses on Metareal AI are recorded in the MT business for the time being, and we plan to change
the name of the MT business when the numerical value of the actual Metareal AI increases in importance.
With regard to the consolidated business forecasts of [Ordinary income], [Net income attributable to owners of the parent]and [Net income per share] for the fiscal year ending February 29, 2024, due to the uncertainty in financial planning suchas funding from both liabilities and equity associated with Metareal AI of new businesses, items below ordinary income(loss) are not disclosed at this time. We plan to disclose specific figures promptly once we are able to make more accurate
projections.

※ Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes in scope of
consolidation): None
(2) Changes in accounting policies, changes in accounting estimates and restatements① Changes in accounting policies due to revisions of accounting standards, etc.: Yes② Changes in accounting policies other than ①: None
③ Changes in accounting estimates: None
④ Restatements: None
(Note) For details, please refer to [3. Consolidated Financial Statements, (5) Notes on Consolidated Financial Statements (Changes
in Accounting Policies)] on page 12 of the Appendix.

(3) Number of shares outstanding (common stock)① Number of shares outstanding at the end of
the period (including treasury stock)② Treasury shares at the end of the year
③ Average number of shares outstanding during
the period

FY2/23

10,688,460shares

FY2/22

10,657,660shares

FY2/23468shares

FY2/22468shares

FY2/23

10,683,847shares

FY2/22

10,657,208shares(Reference) Summary of Non-consolidated Results of Operation
1. Non-consolidated Financial Results for the Fiscal Year Ended February 28, 2023 (March 1, 2022 to February 28, 2023)(1) Non-Consolidated Results of Operation(Percentages indicate year-on-year changes.)
Net sales
Operating income
Ordinary income
Net income
Millions of yen
Millions of yen
Millions of yen
Millions of yen%%%%
FY2/23
666
326
27.6
△60.1
△6
△245
FY2/22
1,671
255
525.0
△39.7
△263
△1,881
Net income per share

Diluted net income per share

Yen
Yen
FY2/23△23.01
FY2/22△176.54(Note)1. Following the transition to a holding company structure on September 1, 2021, the MT business segment has been
converted to a consolidated subsidiary. As a result, the non-consolidated results of operations for the fiscal year ended
February 28, 2022 include the figures for the first half of the MT business. In the non-consolidated results of operations
for the fiscal year ended February 28, 2023, when business management of the Group subsidiaries was the main businessthroughout the fiscal year, there are increases or decreases in [Net sales] [Operating income] [Ordinary income] and [Netincome] compared to the results of the previous fiscal year. Revenue (operating revenue) from business operations after
the transition date is included in net sales.
2. [Accounting Standard for Revenue Recognition] (ASBJ Statement No. 29, March 31, 2020) and other accounting
standards have been applied since the beginning of the fiscal year under review. Figures related to the fiscal year ended
February 28, 2023, represent figures after the application of these accounting standards. Year-on-year changes arecalculated by comparing figures for the fiscal year ended February 28, 2023, following application of the relevant
accounting standards etc., with those for the fiscal year ended February 28, 2022, prior to application of the relevant
accounting standards.
(2) Non-consolidated Financial Position
Total assets

Shareholders' equity ratio
Net asset per share%Yen
FY2/23
2,412
305
11.0
24.73
FY2/22
3,181
546
15.9
47.39
(Reference) Shareholders' equity FY2/23
264Millions of yen
FY2/22505Millions of yen(Note) [Accounting Standard for Revenue Recognition] (ASBJ Statement No. 29, March 31, 2020) and other accounting standards
have been applied since the beginning of the fiscal year under review. Figures related to the fiscal year ended February 28,
2023, represent figures after the application of these accounting standards.
Millions of yen

Net assets

Millions of yen※ This consolidated financial report is not subject to audit by a certified public accountant or an auditing firm.
※ Explanations and other special notes concerning the appropriate use of business forecasts(Cautionary Statement with Respect to Forward-Looking Statements)
Forecasts regarding future performance in this material are based on information currently available to the Company and certain
assumptions that the Company deems to be reasonable at the time this report was prepared. The Company does not make promises
about the achievements. Actual results may differ significantly from the forecasts due to various factors. Please refer to "1. Overview
of Results of Operation, (2) Consolidated Business Forecasts" on page 3 of the Appendix for the assumptions underlying the forecasts
and cautions concerning the use thereof.
(Method of Obtaining Financial Results Briefing Materials)
Supplementary materials for financial results were disclosed on the TDnet on the same date.
We also plan to hold a briefing for institutional investors, analysts and long-term individual shareholders on Wednesday, April 19,
2023.
Information on this briefing session is provided on our website.

○ Table of Contents of the Appendix
1. Results of Operations and Financial Position. ………………………………………………………………………………

2(1) Overview of Results of Operation and Financial Position ………………………………………………………………

2(2) Consolidated Business Forecasts …………………………………………………………………………………………

3

2. Basic Approach to Selection of Accounting Standards ………………………………………………………………………

3

3. Consolidated Financial Statements and Major Notes ………………………………………………………………………

4(1) Consolidated Balance Sheets ……………………………………………………………………………………………

4(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income …………………………

6

Consolidated Statements of Income …………………………………………………………………………………

6

Consolidated Statements of Comprehensive Income ………………………………………………………………

7(3) Consolidated Statements of Changes in Shareholders' Equity ……………………………………………………………

8(4) Consolidated Statements of Cash Flows …………………………………………………………………………………

10(5) Notes on Consolidated Financial Statements ……………………………………………………………………………

12(Notes on Going Concern Assumptions) ………………………………………………………………………………

12(Changes in Accounting Policies) ………………………………………………………………………………………

12(Changes in Scope of Consolidation or Scope of Equity Method Application) ………………………………………

12(Changes in Presentation Methods) ……………………………………………………………………………………

12(Additional Information) ………………………………………………………………………………………………

12(Notes to the Consolidated Statements of Income) ……………………………………………………………………

13(Segment Information) …………………………………………………………………………………………………

16(Per share Information) …………………………………………………………………………………………………

19(Significant Subsequent Events) ………………………………………………………………………………………

19

- 1 -

1. Overview of Results of Operation and Financial Position(1) Overview of Results of Operation and Financial Position① Overview of Results of Operation for the Fiscal Year under Review
During the fiscal year under review, profits of the MT business were firm as a result of cost reductions in the MT business,
etc., but there were expenses related to upfront investments in the Metaverse business, such as research and development
expenses.
As a result, our group posted net sales of 4,292,042 thousand yen (up 3.2% year on year), operating income of 515,424
thousand yen (up 460.6% year on year), ordinary income of 516,803 thousand yen (ordinary loss of 45,752 thousand yen in theprevious fiscal year), and profit attributable to owners of parent of 29,631 thousand yen (loss attributable to owners of parent of
1,238,785 thousand yen in the previous fiscal year) for the current fiscal year.
Businesses other than the Metaverse business recorded total sales of 4,281,786 thousand yen (up 3.1% year on year) andoperating income of 941,048 thousand yen (up 65.1% year on year).
The performance of each business segment is as follows:① MT business
As for the MT business, sales were 2,911,781 thousand yen (down 0.8% year on year), and segment income was 630,939
thousand yen (up 65.8% year on year).
② HT business
As for the HT business, sales were 1,370,005 thousand yen (up 12.3% year on year), and segment income was 267,226
thousand yen (up 46.7% year on year).
③ Metaverse business
As for the Metaverse business, sales were 10,256 thousand yen (up 126.8% year on year), and segment loss was 425,624
thousand yen (segment loss of 477,987 thousand yen in the previous fiscal year).
② Overview of Financial Position for the Fiscal Year under Review(Assets)
Total assets at the end of the fiscal year under review decreased by 687,312 thousand yen from the end of the previous fiscal
year to 4,220,709 thousand yen.
Current assets increased by 24,582 thousand yen from the end of the previous fiscal year to 2,973,276 thousand yen. Thiswas due mainly to a decrease of 173,829 thousand yen in notes and accounts receivable, an increase of 126,835 thousand yen
in cash and deposits, and a decrease of 43,137 thousand yen in the allowance for doubtful accounts.
Non-current assets decreased by 711,894 thousand yen from the end of the previous fiscal year to 1,247,433 thousand yen.
This was mainly due to a decrease of 90,804 thousand yen in property, plant and equipment, a decrease of 322,270 thousand
yen in intangible assets, and a decrease of 298,820 thousand yen in investments and other assets.
(Liabilities)
Liabilities at the end of the fiscal year under review decreased by 721,964 thousand yen from the end of the previous fiscal
year to 3,087,391 thousand yen.
Current liabilities decreased by 445,178 thousand yen from the end of the previous fiscal year to 1,989,491 thousand yen.
This was due mainly to a decrease of 283,090 thousand yen in provision for surcharges, a decrease of 146,820 thousand yen inadvances received, and a decrease of 63,027 thousand yen in income taxes payable.
Non-current liabilities decreased by 276,786 thousand yen from the end of the previous fiscal year to 1,097,899 thousand
yen. This was mainly due to a decrease of 385,980 thousand yen in long-term debt, an increase of 136,000 thousand yen inbonds, and a decrease of 26,806 thousand yen in lease obligations.
(Net assets)
Net assets at the end of the fiscal year under review increased by 34,652 thousand yen from the end of the previous fiscal
year to 1,133,318 thousand yen.
This was mainly due to an increase of 29,631 thousand yen in retained earnings as a result of recording profit attributable toowners of the parent.

- 2 -③ Overview of cash flows for the fiscal year under review
Net cash provided by operating activities was 507,333 thousand yen, net cash used in investing activities was 155,735
thousand yen, and net cash used in financing activities was 217,877 thousand yen. As a result, cash and cash equivalents(hereinafter "cash") at the end of the fiscal year under review increased by 131,883 thousand yen from the end of the previous
fiscal year to 2,542,027 thousand yen.
(Cash flows from operating activities)
Net cash provided by operating activities was 507,333 thousand yen. Cash inflow was mainly attributable to income before
income taxes of 208,703 thousand yen, depreciation and amortization of 475,735 thousand yen, loss on valuation of investment
securities of 233,763 thousand yen, and a decrease in notes and accounts receivable-trade of 174,698 thousand yen. Cashoutflow was mainly attributable to a decrease in provision for surcharges of 283,090 thousand yen and income taxes paid of
215,866 thousand yen.
(Cash flows from investing activities)
Net cash used in investing activities was 155,735 thousand yen. Cash inflow was mainly attributable to proceeds from loans
receivable of 1,659 thousand yen, cash outflow of 139,623 thousand yen from acquisition of intangible assets, loan
disbursements of 12,450 thousand yen, and purchase of property, plant and equipment of 6,078 thousand yen.
(Cash flows from financing activities)
Net cash used in financing activities was 217,877 thousand yen. Cash inflow was mainly attributable to proceeds fromissuance of bonds of 293,375 thousand yen, and cash outflow was mainly attributable to repayments of long-term debt of
385,980 thousand yen, redemption of bonds of 104,000 thousand yen, and repayments of lease obligations of 26,293 thousandyen.
(2) Consolidated Business Forecasts
Our two management themes for the future are:
① [Metaverser] concept in the Metaverse business and its method [Metaverse x AI]
The Metaverse business will work on the [Metaverser] initiative and the [Metaverse x AI] as a tool as a long-term growthstrategy that anticipates blooming in five years or later.
② MT business and [Metareal AI] concept
We will continue to aim for stable growth in the MT business, which provides services such as [T-4OO] [T-3MT] for AI
document translation and [Onyaku] for AI speech translation. The AI-related service unified platform [Metareal AI] which
released the β version on April 3 (official version is planned to be released on the end of May) is an integration of not only
generative AI such as ChatGPT, but also a number of AI services groups from the perspective of business utilization ofcompanies. In order to provide not only unique applications, but also cutting-edge AI services around the world at high speed,
and to provide a bridge with Japanese companies, we have commenced development and provision. We will promote the shift toa one-stop AI business environment in which Japanese companies can respond to the rapid shift in AI on a global scale. We aim
to grow by 5% to 20% through the MT business and the [Metareal AI] concept.

2. Basic Approach to Selection of Accounting Standards
In light of the comparability of consolidated financial statements between periods and between companies, our group intends
to continue to prepare consolidated financial statements under Japanese GAAP.
However, our policy is to appropriately consider the application of the International Financial Reporting Standards (IFRS) as
necessary in light of various circumstances and business description in Japan and overseas.

- 3 -3. Consolidated Financial Statements and Major Notes(1) Consolidated Balance Sheets(Thousands of yen)Previous fiscal year
(February 28, 2022)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable
Inventories
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Building and structure
Tools, furniture and fixtures
Leased assets
Accumulated depreciation
Total property, plant and equipment
Intangible assets
Goodwill
Software
Software in progress
Leased assets
Other
Total intangible assets
Investments and other assets
Investment securities
Shares of subsidiaries and associates
Long-term loan
Deferred tax asset
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term borrowings
Current portion of long-term loans payable
Current portion of corporate bonds
Accounts payable-other
Lease obligations
Income taxes payable
Provision for bonuses
Advances received
Provision for surcharge
Other
Total current liabilities
Non-current liabilities
Corporate bonds
Long-term debt
Lease obligations
Total non-current liabilities
Total liabilities- 4 -Current fiscal year
(February 28, 2023)

2,396,860
452,567
18,467
165,987△85,189
2,948,694

2,523,695
278,738
16,075
196,817△42,051
2,973,276

18,896760,324
86,968△657,449
208,740

18,896685,40286,968△673,331
117,936

14,496
893,720
61,628
23,110401
993,356

6,709
647,051572
16,374378
671,086

319,675
40,796
231
381,173
114,202△98,848757,230
1,959,327
4,908,021

86,071
23,77910,562
337,478
108,497△107,979
458,4091,247,433
4,220,709

94,145100,000
385,980
74,000102,288
26,293
91,94048,3591,006,259
283,090
222,3132,434,670

74,270100,000
385,980
134,000
96,64626,80628,91344,860859,439
238,575
1,989,491

252,000
1,055,530
67,155
1,374,685
3,809,355

388,000
669,550
40,349
1,097,899
3,087,391

(Thousands of yen)Previous fiscal year
(February 28, 2022)
Net assets
Shareholders' equity
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders' equity
Share subscription rights
Total net assets
Total liabilities and net assets

783,5111,757,458△1,482,498△951
1,057,519
41,146
1,098,666
4,908,021- 5 -Current fiscal year
(February 28, 2023)

786,021
1,759,968△1,452,866△951
1,092,171
41,146
1,133,318
4,220,709

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income(Consolidated Statements of Income)(Thousands of yen)Previous fiscal year
(From March 1, 2021 to
February 28, 2022)
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Remuneration for directors
Salaries, allowances and bonuses
Research and development expenses
Advertising expenses
Provision for doubtful receivables
Provision for bonuses
Retirement benefit expenses
Other
Total selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividends income
Subsidy income
Reversal of allowance for doubtful accounts
Other
Total non-operating income
Non-operating expenses
Interest expenses
Commissions paid
Share of loss of investments accounted for using equity
methodBond issuance expenses
Provision for doubtful receivables
Other
Total non-operating expenses
Ordinary income or loss (△)
Special loss
Expenses related to restatements of prior years
Provision for surcharge
Loss on sales and retirement of noncurrent assets
Impairment loss
Loss on valuation of investment securities
Loss on cancellation of lease agreement
Total special loss
Income or loss (△) before income taxes
Income taxes – current
Income taxes - deferred
Total income taxes
Net income or loss (△)
Net income or loss (△) attributable to owners of parent- 6 -Current fiscal year
(From March 1, 2022 toFebruary 28, 2023)

4,159,109
1,535,781
2,623,327

4,292,042
1,506,580
2,785,461

167,109851,818
241,929
187,582
155,974△3,1108,720
921,3622,531,387
91,940160,314787,237
264,696
210,390
152
8,964
7,221
831,060
2,270,037
515,42444
944,647
11,94856,65063
15,252
27,295
8,302
50,913

13,817327

12,896
1,895

163,038

17,016

2,863
11,456
2,839
194,342△45,752

6,624
10,0001,101
49,534
516,803

207,056
283,090
8,696
366,392
345,528
13,9071,224,672△1,270,424
183,839△215,479△31,639△1,238,785△1,238,785

5,880
68,455
233,763
308,099
208,703
135,376
43,695
179,071
29,631
29,631

(Consolidated Statements of Comprehensive Income)(Thousands of yen)Previous fiscal year
(From March 1, 2021 to
February 28, 2022)
Net income or loss (△)
Comprehensive income
Comprehensive income (loss) attributable to:
Owners of the parent company
Non-controlling interests- 7 -Current fiscal year
(From March 1, 2022 toFebruary 28, 2023)△1,238,785△1,238,785

29,631
29,631△1,238,785-

29,631-

(3) Consolidated Statements of Changes in Shareholders' Equity
Previous fiscal year (From March 1, 2021 to February 28, 2022)(Thousands of yen)
Shareholders' equity
Common stock
Opening balance

Capital surplus

783,511Retained earnings

1,761,699

Treasury stock△180,466△861

Total shareholders'equity2,363,883

Change during the year
Issuance of new shares-

Dividend of surplus
Loss (△) attributable to owners of parent△63,943△63,943△1,238,785△1,238,785

Purchase of treasury stock△89

Changes in scope of consolidation

695

Purchase of investments in consolidated
subsidiaries

695△4,241△4,241

Net change in items other thanshareholders' equity
Total changes of items during the year
Ending balance-△4,241△1,302,032△89△1,306,363

783,5111,757,458△1,482,498△951

1,057,519

Share subscription
rightsOpening balance

41,146

Non-controllinginterests

Total net assets

45,7582,450,788

Change during the year
Issuance of new shares-

Dividend of surplus△63,943

Loss (△) attributable to owners of parent△1,238,785

Purchase of treasury stock△89

Changes in scope of consolidation

695

Purchase of investments in consolidated
subsidiaries△4,241

Net change in items other thanshareholders' equity
Total changes of items during the year
Ending balance△89△45,758△45,758-△45,758△1,352,122

41,146-

1,098,666- 8 -Current fiscal year (From March 1, 2022 to February 28, 2023)(Thousands of yen)
Shareholders' equity
Common stock
Opening balance

Capital surplus

Retained earnings

783,5111,757,458

2,510

2,510

Total shareholders'equityTreasury stock△1,482,498△951

1,057,519

Change during the year
Issuance of new shares

5,020

Dividend of surplus-

Net income attributable to owners ofparent29,631

29,631

Purchase of treasury stock-

Changes in scope of consolidation-

Purchase of investments in consolidated
subsidiaries-

Net change in items other thanshareholders' equity-

Total changes of items during the year
Ending balance

2,510

2,510

29,631-

34,652786,021

1,759,968△1,452,866△951

1,092,171

Share subscription
rightsOpening balance

Non-controllinginterests

41,146

Total net assets-

1,098,666

Change during the year
Issuance of new shares

5,020

Dividend of surplus-

Net income attributable to owners ofparent29,631

Purchase of treasury stock-

Changes in scope of consolidation-

Purchase of investments in consolidated
subsidiaries-

Net change in items other thanshareholders' equity-

Total changes of items during the year
Ending balance--

34,652

41,146-

1,133,318- 9 -(4) Consolidated Statements of Cash Flows(Thousands of yen)Previous fiscal year
(From March 1, 2021 to
February 28, 2022)
Cash flows from operating activities
Income or loss (△) before income taxes
Depreciation
Expenses related to restatements of prior years
Amortization of goodwill
Impairment loss
Increase or decrease in allowance for doubtful
accounts (△ indicates decrease)
Increase or decrease in accrued bonuses (△ indicatesdecrease)
Increase in provision for surcharges (△ indicatesdecrease)
Interest and dividend income
Loss on valuation of investment securities (△indicates gain)
Loss or gain on equity method investments (△indicates gain)
Loss on sales and retirement of noncurrent assets (△indicates gain)
Subsidy income
Interest expenses
Bond issuance expenses
Increase or decrease in advances received (△ indicatesdecrease)
Increase or decrease in notes and accounts receivabletrade (△ indicates increase)
Increase or decrease in inventories (△ indicatesincrease)
Increase or decrease in trade payables (△ indicatesdecrease)
Other
Sub-totalInterest and dividends received
Subsidy income
Interest paid
Income taxes paid
Income taxes refund
Payments for restatements of prior years
Cash flows from operating activities
Cash flows from investing activities
Payments for property, plant and equipment
Proceeds from sale of property, plant and equipment
Payments for intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Purchase of investments in subsidiaries and associates
Payment for loans receivable
Proceeds from loans receivableCollection of lease and guarantee deposits
Cash flows from investing activities- 10 -

Current fiscal year
(From March 1, 2022 toFebruary 28, 2023)△1,270,424
580,053
207,056
21,262366,392

208,703475,735
7,786
68,455

167,106△34,006△9,864△3,498283,090△283,090△54△63

345,528

233,763

163,038

17,016

8,696

5,880

△44,647
13,8172,863△15,252
12,896
6,624

189,394△146,886△92,126

174,698

9,718

2,392

0

△19,874△88,317852,58554
44,647△13,817△156,163
3,122△207,056
523,371△6,528704,752
63
15,252△12,896△215,866
16,027507,333△3,7373,553△396,339△2,005
1,725△3,500△2,3502,601
48,810△351,242△6,078757△139,623△12,450
1,659△155,735

(Thousands of yen)Previous fiscal year
(From March 1, 2021 to
February 28, 2022)
Cash flows from financing activities
Proceeds from issuance of bonds
Redemption of bonds
Proceeds from long-term debt
Repayment of long-term debt
Repayment of lease obligations
Proceeds from issuance of common stock upon
exercise of share subscription rights
Dividends paid
Purchase of investments in subsidiaries that does not
result in change in scope of consolidation
Purchase of treasury stock
Cash flows from financing activities
Effect of exchange rate change on cash and cash
equivalents
Net increase or decrease in cash and cash equivalents (△indicates decrease)
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of the year

- 11 -

Current fiscal year
(From March 1, 2022 toFebruary 28, 2023)

147,136△44,000
450,000△460,279△27,917

293,375△104,000△385,980△26,293-

5,020△63,943-△50,000-△89△49,093△217,877△907△1,836

122,128

131,883

2,288,014
2,410,143

2,410,143
2,542,027

(5) Notes on Consolidated Financial Statements(Notes on Going Concern Assumptions)Not applicable.
(Changes in Accounting Policies)(Application of Accounting Standard for Revenue Recognition)[Accounting Standard for Revenue Recognition] (ASBJ Statement No. 29, March 31, 2020. Hereinafter "Revenue
Recognition Accounting Standard") has been applied since the beginning of the fiscal year under review. Revenue isrecognized in the amount expected to be received in exchange for the promised goods or services when control of the goods orservices is transferred to customers.
In applying the Accounting Standard for Revenue Recognition in accordance with the transitional handling stipulated in theproviso to Paragraph 84 of that Standard the cumulative impact of applying the new accounting policy retrospectively prior to
the beginning of the fiscal year under review is adjusted by retained earnings at the beginning of the fiscal year under review,and the new accounting policy is applied beginning with the starting balance.
As a result, there is no impact on income for the fiscal year under review. It also has had no effect on the starting balance ofretained earnings or the per share information.
Because of the application of the Accounting Standard for Revenue Recognition from the previous fiscal year, we decided toinclude [Notes and accounts receivable] that had been presented under [Current assets] under Contract assets in [Other] fromthe current fiscal year. In accordance with the transitional handling stipulated in Paragraph 89-2 of the Accounting Standard for
Revenue Recognition, no reclassifications have been made using the new presentation method for the previous consolidated
fiscal year.
(Changes in Scope of Consolidation or Scope of Equity Method Application)(Changes in Scope of Consolidation)
Event DX Corporation, which had been our consolidated subsidiary, has been excluded from the scope of consolidation due
to its liquidation.
(Change of Presentation Methods)(Consolidated Statements of Income)[Bond issuance expenses], [Provision for doubtful accounts] that had been included in [Other] under [Non-operating
expenses] until the previous fiscal year is presented separately from the current fiscal year due to its materiality. To reflect thischange in presentation, the consolidated financial statements for the previous fiscal year have been reclassified.
As a result, 17,158 thousand yen that had been presented under [Other] in [Non-operating expenses] in the previous fiscal
year's consolidated statement of income has been reclassified as [Bond issuance costs] of 2,863 thousand yen, [Provision for
doubtful accounts] of 11,456 thousand yen, and [Other] of 2,839 thousand yen.
(Consolidated Statements of Cash Flows)[Bond issuance costs] which had been included in [Other] under [Cash flows from operating activities] until the previous
fiscal year is presented separately from the current fiscal year due to its materiality. To reflect this change in presentation, theconsolidated financial statements for the previous fiscal year have been reclassified.
As a result, △85,453 thousand yen that had been presented under [Other] under [Cash flows from operating activities] in theprevious fiscal year's consolidated statement of cash flows has been reclassified as [Bond issuance expenses] of 2,863 thousand
yen and [Other] of △88,317 thousand yen.
(Additional Information)(Application of Accounting Standard for Calculation of Market Value)[Accounting Standard for Calculation of Market Value] (ASBJ Statement No. 30, July 4, 2019. Hereinafter [Current Value
Accounting Standard]) and other standards have been applied since the beginning of the fiscal year under review. In
accordance with the transitional handling stipulated in Paragraph 19 of the Accounting Standard for Calculation of Market
Value and Paragraph 44-2 of the [Accounting Standard for Financial Instruments] (ASBJ Statement No. 10, July 4, 2019), we
have decided to apply the new accounting policies established by the Accounting Standard for Calculation of Market Value inthe future. Since we do not hold any financial instruments with fair values on the consolidated balance sheet, this has had no
impact on the consolidated financial statements for the fiscal year under review.
(Accounting Estimates Related to the COVID-19 Pandemic)
Because the impact of the COVID-19 pandemic on our group remains uncertain, we have made accounting estimatesassuming that the impact of the situation will remain in the following fiscal year.

- 12 -

(Notes to the Consolidated Statements of Income)(1) Revenue from contracts with customers
Revenue from contracts with customers and other revenues are not presented separately. The amount of revenue arising fromcontracts with customers is as described under [Notes on Consolidated Financial Statements (Segment Information)].
(2) Provision for doubtful receivables
Previous fiscal year (From March 1, 2021 to February 28, 2022)
After evaluating the collectability of trade receivables, we record 155,974 thousand yen in selling, general andadministrative expenses as a provision for doubtful accounts.
Current fiscal year (From March 1, 2022 to February 28, 2023)
This information is omitted because it is not material.
(3) Share of loss of investments accounted for using equity method
Previous fiscal year (From March 1, 2021 to February 28, 2022)
VoicePing Co., Ltd. (name changed from P2P Corporation on September 7, 2021), an entity accounted for using equity
method, has evaluated the recoverable amount in light of the business environment and business performance. As a result, anequivalent amount of goodwill of 162,290 thousand yen has been recorded as investment loss on equity method under nonoperating expenses.
Current fiscal year (From March 1, 2022 to February 28, 2023)
This information is omitted because it is not material.
(4) Expenses related to restatements of prior years
Previous fiscal year (From March 1, 2021 to February 28, 2022)
We established the Special Investigation Committee to reflect the facts that were discovered based on the results of theCommittee's investigation because it was found that there was a possibility of errors in past accounting treatment.
As a result, a total of 207,056 thousand yen in fees for corrective audit fees, expenses for investigations by the Special
Investigation Committee, and expenses to support the preparation of corrective disclosure documents, etc. accrued throughFebruary 28, 2022 due to the revision has been recorded as expenses related to corrections of prior fiscal years in extraordinary
losses.
Current fiscal year (From March 1, 2022 to February 28, 2023)
Not applicable.
(5) Provision for surcharge
Previous fiscal year (From March 1, 2021 to February 28, 2022)
With regard to the revision of the Securities Report, etc. we filed on November 30, 2021, we announced that the Securities
and Exchange Surveillance Commission issued recommendations to the Prime Minister and the Commissioner of the Financial
Services Agency on March 18, 2022 to issue an order to pay a surcharge of 283,090 thousand yen to us in accordance with
Article 20, Paragraph 1 of the Act on Establishment of the Financial Services Agency.
This amount is recorded as a provision for surcharges under extraordinary losses.
Current fiscal year (From March 1, 2022 to February 28, 2023)
Not applicable.

- 13 -

(6) Impairment loss
Previous fiscal year (From March 1, 2021 to February 28, 2022)
1. Amount of impairment loss
During the year, our group recorded impairment loss on the following assets.
Location

Application

Type
Tools, furniture andAmount (thousands ofyen)

Chioda-ku, Tokyo

Business assets

Chioda-ku, Tokyo

Business assets

Software in progress

86,894

Chioda-ku, Tokyo

Business assets

Software214,145

Chioda-ku, Tokyo

Other

Goodwill

11,229Bunkyo-ku, Tokyo

Business assets

Nagaoka, Niigata

Business assets

Nagaoka, Niigata

Business assets

fixtures

Tools, furniture andfixtures
Tools, furniture andfixtures
SoftwareTotal

24,97814,8239,477
4,843
366,392

2. Method of grouping assets
Business assets are grouped based on the smallest cash-flow-generating unit to be largely independent of the cash flows ofother assets or asset groups.
3. Method of calculating the recoverable amountThe recoverable amount of business assets is measured by value in use, and is calculated by discounting future cash flows
from operating activities at a constant discount rate. Assets with negative future cash flows from operating activities areevaluated as zero.
In addition, goodwill is fully impaired with the unamortized balance.
4. Background to recording of impairment loss
As a result of reassessment of the profitability of existing development projects and related businesses and consolidation ofdevelopment and operating resources, the book value was reduced to the minimum recoverable amount and the decrease wasrecorded as an impairment loss.
In addition, with regard to Xtra Co., Ltd., our consolidated subsidiary, we no longer expect to earn the profits assumed in thebusiness plan originally examined, and therefore we have recorded the unamortized balance of goodwill as an impairment loss.

- 14 -

Current fiscal year (From March 1, 2022 to February 28, 2023)
1. Amount of impairment loss
During the year, our group recorded impairment loss on the following assets.
Location

Application

Type

Amount (thousands of yen)Tools, furniture and

Chioda-ku, Tokyo

Business assets

4,587

Chioda-ku, Tokyo

Business assets

Software in progress

1,904

Chioda-ku, Tokyo

Business assets

Software61,963fixturesTotal

68,455

2. Method of grouping assets
Business assets are grouped based on the smallest cash-flow-generating unit to be largely independent of the cash flows ofother assets or asset groups.
3. Method of calculating the recoverable amountThe recoverable amount of business assets is measured by value in use, and is calculated by discounting future cash flows
from operating activities at a constant discount rate. Assets with negative future cash flows from operating activities areevaluated as zero.
In addition, goodwill is fully impaired with the unamortized balance.
4. Background to recording of impairment loss
As a result of reassessment of the profitability of existing development projects and related businesses and consolidation ofdevelopment and operating resources, the book value was reduced to the minimum recoverable amount and the decrease wasrecorded as an impairment loss.
(7) Loss on valuation of investment securities
Previous fiscal year (From March 1, 2021 to February 28, 2022)
We believe that the real value of the following investment securities (unlisted shares) we hold has declined significantly.
Accordingly, we have recorded unrealized gains and losses as losses on valuation of investment securities in extraordinary
losses.
(Thousands of yen)
Investment securities

Loss on valuation of investment securities

Synamon Inc.

44,267

Donut Robotics Co., Ltd.

301,260

Current fiscal year (From March 1, 2022 to February 28, 2023)
We believe that the real value of the following investment securities we hold (e.g., stocks with no market price) has declined
significantly. Accordingly, we have recorded unrealized gains and losses on investment securities as losses on valuation of
investment securities in extraordinary losses.
(Thousands of yen)
Investment securities

Loss on valuation of investment securities

Synamon Inc.

7,525

VoiceApp, Inc.

60,116alt Inc.

166,122- 15 -

(Segment Information)[Segment Information]
1. Overview of Reportable Segments
The target segments of the Company are components of the Company for which separate financial information isavailable and which are regularly reviewed by the Board of Directors in order to determine the allocation of management
resources and evaluate business performance. Our business is centered on the machine translation business and themetaverse business, and we operate the translation outsourcing business as a peripheral business.
(1) MT business
The MT (Machine Translation) business provides AI machine-translation services and generating AI services under
the corporate missions of [liberate Japan from linguistic impairment] and [liberate humanity from the shackles ofmanual labor].
(2) HT business
The Human Translation business provides outsourced services, such as traditional human translation,interpretation, and language training.
(3) Metaverse business
The Metaverse business provides various services. By integrating cutting-edge technologies such as AI, AR(Augmented Reality), VR (Virtual Reality: Virtual Reality), 5G/6G/G7 (High-speed, Multiple Connections),
4K/8K/12K (Super-Resolution), video distribution solutions, robotics, and HA (Human Augmentation: Human
Extension), we aim to realize a world in which people around the world can interact, work, and enjoy their lives [withanyone anytime, anywhere].
2. Method of calculating net sales, income (loss), assets and other items by reportable segment
The accounting methods used for the reportable segments are based on the accounting policies adopted for the
preparation of the consolidated financial statements.
Segment income is based on operating income. Intersegment sales and transfers are based on prevailing market prices.
(Change in Method of Allocation of Segment Assets)
Effective September 1, 2021, our group completed a review of the segment asset management system that we wereconsidering in conjunction with the transition to a holding company structure. As a result, we have changed the allocation
method of segment assets since the fiscal year under review. Segment information for the previous fiscal year has been
prepared based on the classification of reportable segments for the fiscal year under review.

- 16 -

3. Information on net sales, income (loss), assets and other items by reportable segment and breakdown of income
Previous fiscal year (From March 1, 2021 to February 28, 2022)(Thousands of yen)Amounts on the
consolidated
financialstatements(Note 2)

Reportable Segments
Metaverse
business

Total

Adjustments(Note 1,3,4)

MT businessHT business

2,934,632

1,219,954

4,522

4,159,109-

4,159,109

9,154

34,031-

43,186△43,186-

2,943,786

1,253,986

4,522

4,202,296△43,186

4,159,109

380,433

182,187△477,987

84,633

7,306

91,9402,389,234

903,568

552,211

3,845,014

1,063,007

4,908,021

529,561

35,9862,626

568,174

11,879580,053

Amortization of
goodwill-

21,262-

21,262-

21,262

Impairment loss

278,156

84,4253,809

366,392-

366,392

Increase in property,
plant and equipment,

373,111

20,486

1,589

395,187

4,889

400,077

Net sales
Net sales tounaffiliated customers
Intersegment sales ortransfer
Total
Segment income or loss(△)
Segment assets
Other
Depreciationand intangible assets(Note) 1. Adjustments to segment income or loss (△) of 7,306 thousand yen include an elimination of intersegment transactions of
338,799 thousand yen and corporate expenses not attributable to reportable segments of △331,493 thousand yen.
Corporate expenses mainly consist of expenses related to the administrative departments of the parent company that are
not attributable to reportable segments.
2. Segment income or loss (△) is adjusted with operating income in the consolidated statements of income.
3. Adjustments to segment assets of 1,063,007 thousand yen are corporate assets not attributable to reportable segments. They
mainly consist of assets related to the parent company and deferred tax assets.
4. Among adjustments to other items, depreciation and amortization adjustments of 11,879 thousand yen are depreciation andamortization related to the assets of the parent company. Adjustments to increase in property, plant and equipment andintangible assets of 4,889 thousand yen are increases related to the assets of the parent company.

- 17 -

Current fiscal year (From March 1, 2022 to February 28, 2023)(Thousands of yen)
Reportable Segments
Metaverse
business

Total

Amounts on the
consolidated
Adjustments
financial(Note 1,3,4)
statements
Note 2)MT businessHT business

2,820,840
35,922

32,742
1,337,262-

2,853,583
1,373,184-

2,853,583
1,373,184

55,018-

10,256-

10,25655,018-

10,25655,0182,911,781

1,370,005

10,256

4,292,042-

4,292,042

263,425

1,233,162

7,076

1,503,663-

1,503,663

2,648,355

136,8423,180

2,788,378-

2,788,378

2,911,781

1,370,005

10,256

4,292,042-

4,292,042

2,911,781

1,370,005

10,256

4,292,042-

4,292,042

6,092

45,620-51,712△51,712-

Total

2,917,873

1,415,625

10,256

4,343,755△51,712

4,292,042

Segment income or loss (△)

630,939

267,226△425,624

472,541

42,882515,424

2,573,572

829,515

430,825

3,833,914

386,795

4,220,709

439,21221,7092,923

463,845

11,889475,735

-

7,786

-

7,786

-

7,786

Impairment loss

72,607--72,607△4,152

68,455

Increase in property, plantand equipment, and138,726

3,613

3,056

145,396306

145,702

By type of goods or services
Machine translation
Human translation
Metaverse
Consigned development
Revenue from contracts withcustomers
Revenue recognition by
periodGoods or services that aretransferred at one time
Goods or services that aretransferred over a period oftime
Revenue from contracts
with customers
Net sales to unaffiliatedcustomers
Intersegment sales ortransfer

Segment assets
Other
Depreciation
Amortization of goodwill

intangible assets(Note) 1. Adjustments to segment income or loss (△) of 42,882 thousand yen include an elimination of intersegment transactions of353,510 thousand yen and corporate expenses not attributable to reportable segments of △310,627 thousand yen.
Corporate expenses mainly consist of expenses related to the administrative departments of the parent company that are
not attributable to reportable segments.
2. Segment income or loss (△) is adjusted with operating income in the consolidated statements of income.
3. Adjustments to segment assets of 386,795 thousand yen are corporate assets not attributable to reportable segments. They
mainly consist of assets related to the parent company and deferred tax assets.
4. Among adjustments to other items, depreciation adjustment of 11,889 thousand yen is depreciation and amortization related
to assets of the parent. Adjustments to impairment loss of △4,152 thousand yen are adjustments to unrealized gains orlosses. Adjustments to increase in property, plant and equipment and intangible assets of 306 thousand yen are increases
related to assets of the parent company.

- 18 -

[Information on impairment loss on noncurrent assets by reportable segment]
Previous fiscal year (From March 1, 2021 to February 28, 2022)
Impairment loss on non-current assets was 278,156 thousand yen in the MT business, 73,196 thousand yen in the HT
business, and 3,809 thousand yen in the Metaverse business. In addition, the Group recorded impairment loss on goodwillof 11,229 thousand yen in the HT business.
Current fiscal year (From March 1, 2022 to February 28, 2023)
The MT business recorded impairment loss on noncurrent assets of 72,607 thousand yen. The Company also recorded△4,152 thousand yen as a reconciliation of unrealized gains and losses.
(Per share Information)
Previous fiscal year
Current fiscal year
(From March 1, 2021 to February (From March 1, 2022 to February
28, 2022)
28, 2023)
Net assets per share
Net income or loss (△) per share
Diluted net income per share

99.23 yen102.19 yen△116. 24 yen

2.77 yen- Yen

2.73 yen(Note) 1. Diluted net income per share for the previous fiscal year is not presented because net loss per share was recorded despite
the existence of potential shares.
2. The basis for calculating net income or loss per share and diluted net income per share is as follows.
Previous fiscal year
(From March 1, 2021 to February
28, 2022)

Current fiscal year
(From March 1, 2022 to February
28, 2023)

Net income or loss per share
Net income or loss (△) attributable to owners ofparent (thousands of yen)

△1,238,785

29,631--△1,238,785

29,631

10,657,208

10,683,847

Adjustment to net income attributable to owners ofparent (thousands of yen)--

Increase in number of common shares (shares)-

175,353

Amount not attributable to common shareholders(thousands of yen)
Net income or loss (△) attributable to owners ofparent related to common shares (thousands of yen)
Average number of shares of common stock
outstanding during the period (shares)

Diluted net income per share(Share subscription rights (shares))(-)(175,353)

Outline of potential shares that had not been
14th share subscription rights by
included in the calculation of diluted net income per resolution of the Board of Directors
share because they had no dilutive effectat the meeting held on July 14, 2020
Number of share subscription rights:
12,188 rights(1,218,800 shares of common stock)(Significant Subsequent Events)
Not applicable.

- 19 --