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

July 12, 2024

Non-consolidated Financial Results
for the Three Months Ended May 31, 2024
[Japanese GAAP]
Company name: TMS Co., Ltd.
Listing:
Tokyo Stock Exchange
Securities code:
4891
URL:
https://www.tms-japan.co.jp/
Representative:
Takuro Wakabayashi, Chief Executive Officer
Inquiries:
Go Ito, Chief Financial Officer
Telephone:+81-42-307-7480
Scheduled date to file quarterly securities report:
July 12, 2024
Scheduled date to commence dividend payments:–
Preparation of supplementary material on quarterly financial results: None
Holding of quarterly financial results briefing:
None(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Non-consolidated financial results for the three months ended May 31, 2024 (from March 1, 2024 to
May 31, 2024)(1) Non-consolidated operating results (cumulative)
Operating revenue
Three months ended(Percentages indicate year-on-year changes.)

Operating income

Ordinary income

Net income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

May 31, 2024

–

–

(223)

–

(223)

–

(247)

–

May 31, 2023

–

–

(151)

–

(148)

–

(148)

–

Basic earnings per share
Three months ended

Diluted earnings per
share

Yen

Yen

May 31, 2024

(6.15)–

May 31, 2023

(4.07)–

Notes: 1. The Company began disclosing the non-consolidated financial results for the first three months of the fiscal year startingfrom the fiscal year ended February 29, 2024. Therefore, the year-on-year changes for the three months ended May 31,
2023 are not shown.
2. Diluted earnings per share is not stated because, although potential shares existed, a basic loss per share was recorded.

(2) Non-consolidated financial position
Total assets
As of

Net assets

Equity-to-asset ratio

Millions of yen

Millions of yen%

May 31, 2024

3,326

3,213

96.1

February 29, 2024

3,554

3,457

96.9

Reference:

EquityAs of May 31, 2024
As of February 29, 2024

¥3,197 million¥3,445 million

2. Cash dividends
Annual dividends per shareFirst quarter-end
Fiscal year ended
February 29, 2024
Fiscal year ending
February 28, 2025
Fiscal year ending
February 28, 2025
(Forecast)Second quarter-end

Third quarter-end

Fiscal year-end

Total

Yen

Yen

Yen

Yen

Yen

–

0.00

–

0.00

0.00

0.00

–

0.00

0.00

–

Note: Revisions to the forecast of cash dividends most recently announced: None

3. Forecast of non-consolidated financial results for the fiscal year ending February 28, 2025 (from March
1, 2024 to February 28, 2025)

The forecast of non-consolidated financial results for the fiscal year ending February 28, 2025 has not been presented as it isdifficult to reasonably calculate the forecast for financial results. For details concerning the reasons, business policy, estimatedcosts, etc. for the fiscal year ending February 28, 2025, please refer to “(3) Explanation of earnings forecasts and other forwardlooking statements” under “1. Qualitative information regarding financial results for the three months ended May 31, 2024” onpage 4 of the attached material.

* Notes(1) Adoption of accounting treatment specific to the preparation of quarterly financial statements: Yes
Note: For details, please refer to “Adoption of accounting treatment specific to the preparation of quarterly financial statements”
under “(3) Notes to quarterly financial statements” of “2. Quarterly financial statements and significant notes thereto” onpage 7 of the attached material.

(2) Changes in accounting policies, changes in accounting estimates, and restatement(i) Changes in accounting policies due to revisions to accounting standards and other regulations: None(ii) Changes in accounting policies due to other reasons: None(iii) Changes in accounting estimates: None(iv) Restatement: None
(3) Number of issued shares (common shares)(i)

Total number of issued shares at the end of the period (including treasury shares)
As of May 31, 2024

40,304,367 shares

As of February 29, 2024

40,304,367 shares(ii) Number of treasury shares at the end of the period
As of May 31, 2024

10 shares

As of February 29, 2024

10 shares(iii) Average number of shares outstanding during the period (cumulative from the beginning of the fiscal year)
Three months ended May 31, 2024

40,304,357 shares

Three months ended May 31, 2023

36,574,880 shares* Quarterly financial results reports are exempt from quarterly review conducted by certified public accountants oran audit corporation.
* Proper use of earnings forecasts, and other special matters
Caution regarding forward-looking statements and others
The forward-looking statements, including earnings forecasts, contained in these materials are based on
information currently available to the Company and on certain assumptions deemed to be reasonable.
Consequently, any statements herein do not constitute assurances regarding actual results by the Company.
Actual financial results may differ significantly from the forecasts for various reasons. For the suppositions thatform the assumptions for earnings forecasts and cautions concerning the use thereof, please refer to “(3)Explanation of earnings forecasts and other forward-looking statements” of “1. Qualitative information regarding
financial results for the three months ended May 31, 2024” on page 4 of the attached material.

Attached Material
Index
1. Qualitative information regarding financial results for the three months ended May 31, 2024 ................................... 2(1) Explanation of operating results ......................................................................................................................... 2(2) Explanation of financial position ........................................................................................................................ 3(3) Explanation of earnings forecasts and other forward-looking statements ........................................................... 4
2. Quarterly financial statements and significant notes thereto........................................................................................ 5(1) Quarterly balance sheet ....................................................................................................................................... 5(2) Quarterly statement of income ............................................................................................................................ 6(Cumulative) ....................................................................................................................................................... 6(3) Notes to quarterly financial statements ............................................................................................................... 7
Notes on premise of going concern..................................................................................................................... 7
Notes when there are significant changes in amounts of shareholders’ equity ................................................... 7
Adoption of accounting treatment specific to the preparation of quarterly financial statements ........................ 7
Segment information ........................................................................................................................................... 7
Subsequent events ............................................................................................................................................... 8- 1 -1. Qualitative information regarding financial results for the three months ended May 31, 2024
(1) Explanation of operating results
In the previous fiscal year, our clinical stage pipeline products increased from one to three. During the first
three months of this fiscal year (March 1, 2024 - May 31, 2024), we made steady progress in our pipeline
products and made efforts to further expand the pipeline through both internal and external sources.
The following is the summary of each clinical-stage pipeline product.
(i)

TMS-007-related activities

TMS-007 (JX10) is a member of the Stachybotrys microspora triprenyl phenol (SMTP) compound family,a large family of small molecules derived from fungus S. microspora, and has been developed for thetreatment of acute cerebral infarction. It has dual mechanisms in restoring blood flow throughplasminogen-mediated thrombolysis and anti-inflammatory effects by the inhibition of soluble epoxidehydrolase (sEH). Because of its unique feature of the dual mechanisms of action, TMS-007 is considered
to have advantages over other drugs and drug candidates for this indication with limited treatment options
despite the life-threatening serious condition.
In the previous placebo-controlled randomized phase 2a clinical trial conducted by the Company in Japan,
TMS-007 showed encouraging results. Subjects for the trial were patients who could not be treated withexisting drugs (t-PA) which should be administered within 4.5 hours after onset of symptoms but could
be treated with TMS-007 within 12 hours after symptom onset (average 9.5 hours in the TMS-007 group).
TMS-007 showed an excellent safety profile with no cases of symptomatic intracranial hemorrhage withworsening on the National Institutes of Health Stroke Scale (NIHSS) of four points or more reported (0%in the TMS-007 group vs. 2.6% in the placebo group). As for the efficacy, TMS-007 demonstrated astatistically significant difference in the outcome of the patients measured by the modified Rankin Scale(mRS), a gold standard used for the outcome measure in acute cerebral infarction clinical trials.
Currently, the Company has the exclusive rights to develop and commercialize TMS-007 in Japan and theright to receive milestone payments and royalties from Ji Xing Pharmaceuticals (Hong Kong) Limited(hereinafter, “JIXING”) for development and sales worldwide, excluding Japan. During the first quarter,
we cooperated with JIXING to prepare the initiation of the next clinical trials.
In addition to activities related to the clinical development, a patent related to the SMTP compounds was
granted in Japan in May 2024 for “an agent for treating or preventing cerebral hemorrhage and a method
for treating or preventing cerebral hemorrhage using said agent,” which was granted in the US in May
2021.
(ii) JX09-related activities
JX09 is an oral, small-molecule aldosterone synthesis inhibitor indicated for the treatment of patients withtreatment-resistant or uncontrolled hypertension. As aldosterone synthesis inhibitors for hypertension
treatment, it is considered important to selectively inhibit the aldosterone synthase CYP11B2 but not theclosely related CYP11B1 (cortisol synthase). Given that JX09 has shown high selectivity to CYP11B2, itis considered to have the potential to be the best-in-class compound.
The Company has been granted the exclusive rights to develop and market JX09 in Japan by JIXING. The
phase 1 clinical trial is currently being conducted by JIXING in healthy subjects in Australia. The
Company is considering a plan to play a role in future global trials by conducting studies in Japan.
(iii) TMS-008 related activities
TMS-008 is one of the SMTP family compounds that exhibits anti-inflammatory effects by inhibiting sEH
with little pro-thrombolytic activity, and is being developed for acute kidney injury and cancer cachexia.
TMS-008 has a potential to be indicated for a wide range of inflammatory diseases.
The exclusive worldwide development and marketing rights have been granted by JIXING for certain
TMS-008 indications.
During the three months ended May 31, 2024, efforts were made to prepare the initiation of the phase 1
clinical trial in Japan. This study is a first-in-human, dose-escalation trial of TMS-008 to evaluate the- 2 -pharmacokinetics, pharmacodynamics, and safety of TMS-008 in healthy adult males. The firstadministration was completed after the end of this reporting period.
(iv) Pipeline expansion-related activities
During the three months ended May 31, 2024, the Company has made substantial efforts in research anddevelopment to expand its pipeline through internal and external initiatives.
With regard to the internal initiatives, the Company continued to search for novel sEH inhibitors byleveraging the Company’s knowledge and experience on the enzyme accumulated through developmentof SMTP compounds. To achieve this goal, the Company has been taking multiple approaches including
optimization of AI-generated compounds and screening of a natural compound library. From these
activities, promising candidate compounds were discovered, and further characterization of the novelcompounds is ongoing. As a part of pipeline expansion, additional indications for which TMS-008 could
be developed were investigated.
With regard to the external initiatives, the Company continued to search for and evaluate early-stage
programs being developed in academic research institutions and biopharma companies. Two seed-stage
products developed at Hokkaido University have been undergoing exclusive evaluation. Following thecareful assessments from a number of different perspectives, we entered into a license agreement for oneof the programs on July 3, 2024, after the end of the first quarter. Through this agreement, TMS obtained
an exclusive worldwide license for a drug candidate (TMS-010) indicated for the treatment of spinal cord
injury.
As a result of these activities, operating expenses for the three months ended May 31, 2024 totaled¥223,250 thousand, which included ¥154,173 thousand in research and development expenses, mainly for
TMS-008, and ¥69,077 thousand in other selling, general and administrative expenses.
Based on these results, operating loss was ¥223,250 thousand (compared to operating loss of ¥151,762
thousand in the same period of the previous fiscal year), ordinary loss was ¥223,808 thousand (compared
to ordinary loss of ¥148,619 thousand in the same period of the previous fiscal year), and net loss was¥247,670 thousand (compared to net loss of ¥148,856 thousand in the same period of the previous fiscal
year).
As the Company operates a single segment of drug development business, operating results by segment
are omitted.
(2) Explanation of financial position
AssetsTotal assets as of the end of the first quarter were ¥3,326,260 thousand, a decrease of ¥228,493 thousand
from the end of the previous fiscal year.
This was mainly due to a decrease of ¥190,597 thousand in cash and deposits mainly due to payments for
operating expenses.
Liabilities
Total liabilities as of the end of the first quarter were ¥113,216 thousand, an increase of ¥15,526 thousand
from the end of the previous fiscal year.
This was mainly due to an increase of ¥17,014 thousand in accounts payable - other, including thosepayable to contractors, in line with an increase in research and development expenses.
Net assets
Net assets as of the end of the first quarter were ¥3,213,044 thousand, a decrease of ¥244,020 thousand
from the end of the previous fiscal year.

- 3 -This was mainly due to a decrease of retained earnings, resulting from the recording of ¥247,670 thousandin net loss.
(3) Explanation of earnings forecasts and other forward-looking statements
The Company’s policy for future outlook is to postpone the disclosure of its earnings forecasts for the time
being. It is difficult to carry out earnings forecasts right now, since the Company is presently at a stage of
implementing upfront investment to advance research and development without having products brought
to market, and its financial results are influenced significantly by milestone revenue and other external
events. Once the Company is in the position of being able to forecast stable revenue from royalty and otherrecurrent revenue, it will disclose its earnings forecasts.
In the fiscal year ending February 28, 2025, the Company will work toward the development of eachpipeline product at the clinical stage, adding TMS-007 and JX09, for which we have newly acquired therights in Japan, to TMS-008, which has been under development for some time. In addition, it will work
to expand its pipeline by 1) searching for candidate compounds for sEH inhibitors, leveraging its drug
discovery expertise, and 2) introducing early-stage programs from academia, research institutions, andbiopharma companies.
In light of this, operating expenses for the fiscal year ending February 28, 2025 are expected to be as
follows.
 Research and development expenses are expected to be in the range of ¥750 million to ¥1,100 million.
 Other selling, general and administrative expenses are expected to be in the range of ¥300 million to¥400 million.

- 4 -2. Quarterly financial statements and significant notes thereto(1) Quarterly balance sheet(Thousands of yen)
As of February 29, 2024
AssetsCurrent assets
Cash and deposits
Supplies
Advance payments to suppliers
Prepaid expenses
Consumption taxes refund receivable
Other
Total current assets
Non-current assets
Property, plant and equipment
Investments and other assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Accounts payable - otherAccrued expenses
Income taxes payable
Provision for bonuses
Other
Total current liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Share acquisition rights
Total net assets
Total liabilities and net assets- 5 -As of May 31, 2024

3,446,630–
32,65817,36754,925–3,551,581

3,256,032
178
27,43324,06015,36815
3,323,088

0
3,172
3,172
3,554,754

0
3,172
3,172
3,326,260

32,85339,206
14,195
2,956
8,478
97,68997,68949,86742,915
5,844
12,0192,569
113,216
113,216

1,506,650
2,682,793(744,106)(2)3,445,335
11,7293,457,065
3,554,754

1,506,650
2,682,793(991,777)(2)
3,197,664
15,3803,213,044
3,326,260

(2) Quarterly statement of income(Cumulative)(Thousands of yen)Three months ended
May 31, 2023
Operating revenue
Operating expenses
Research and development expenses
Other selling, general and administrative expenses
Total operating expenses
Operating loss
Non-operating income
Subsidy income
Interest on tax refund
Miscellaneous income
Total non-operating income
Non-operating expenses
Foreign exchange losses
Total non-operating expenses
Ordinary loss
Extraordinary losses
Impairment losses
Total extraordinary losses
Loss before income taxes
Income taxes
Net loss- 6 -Three months ended
May 31, 2024––

76,927
74,834
151,762(151,762)

154,173
69,077223,250(223,250)

3,202
–
–
3,202

–
27
13
40

59
59
(148,619)

598
598(223,808)––(148,619)
237(148,856)

23,624
23,624(247,433)
237(247,670)

(3) Notes to quarterly financial statements
Notes on premise of going concern
Not applicable.
Notes when there are significant changes in amounts of shareholders’ equity
Not applicable.
Adoption of accounting treatment specific to the preparation of quarterly financial statements
Calculation of tax expenses
The Company calculates tax expenses by rationally estimating the effective tax rate after applying the tax
effect on income before income taxes for the fiscal year including the first quarter of the year ending
February 28, 2025, and multiplying income before income taxes by the estimated effective tax rate.
However, in cases where the calculation of tax expenses using the estimated effective tax rate yields a
result that is considered not to be reasonable to a significant extent, the effective statutory tax rate is used.
Segment information[Segment information]I

Three months ended May 31, 2023
Segment information is omitted as the Company operates a single segment of drug development
business.

II Three months ended May 31, 2024
Segment information is omitted as the Company operates a single segment of drug development
business.

- 7 -Subsequent events
Conclusion of material agreement
On July 3, 2024, the Company entered into an exclusive worldwide license agreement (the “Agreement”)
with Hokkaido University concerning the intellectual property rights to a drug candidate substanceindicated for the treatment of spinal cord injury (the “Drug”) owned by the university.
1. Purpose
Spinal cord injury is a serious condition for which there are still no effective medication, even though
it affects approximately 5,000 new patients per year in Japan and 180,000 per year worldwide.
Currently, steroid therapy is approved as the standard treatment, but it is difficult to say that sufficienttherapeutic effect has been achieved, and the Agreement is concluded to develop a new therapeutic
agent.
2. Name of counterparty to the agreement
Hokkaido University
3. Content of the agreement
Under the terms of the Agreement, the Company obtains the exclusive right to conduct activities
related to the development, production, use, and sale of the Drug in all countries of the world, including
Japan.
4. Material impact of the conclusion of the agreement on business activities, etc.
Under the Agreement, the Company will make an upfront payment and pay annual minimum fees, aswell as make milestone payments depending on future development progress and obtainment ofapprovals, to Hokkaido University. The total amount of such payments can be, at maximum,
approximately 30% of the Company’s expected research and development expenses for the fiscal year
ending February 28, 2025. In addition, if development progresses and the product is launched, theCompany may pay royalties to Hokkaido University based on the sales amount.

- 8 -