Consolidated Financial Result(For the fiscal year ended December 31, 2023)

February 8, 2024

SIOS Corporation
2-12-3 Minami Azabu, Minato-ku, Tokyo 106-0047 JapanTokyo Stock Exchange (TSE)3744
https://www.sios.com/
Nobuo Kita, Representative Director
Tokutaro Kobayashi, S.V.P. of Finance & Accounting
Phone: +81-3-6401-5111
Scheduled date of annual shareholders’ meeting:March 28, 2024
Scheduled date of financial report FSA filing:
March 29, 2024
Scheduled date of dividend payment:
March 29, 2024
Company name:
Address:
Stock exchange listings:
Code number :URL:
Representative:
Contact:(Note) All figures in the financial statements are rounded down to the nearest millionth.
‘-‘ indicates a loss or negative figure.

1. Consolidated results (January 1, 2023 through December 31, 2023)(1) Consolidated business results
Net sales

Million yen%

Operating income

Million yen

FY2023
15,88910.2-208
FY2022
14,420-8.3-572(Note)Comprehensive income :FY2023: 17 million yen/ -%Net income per share- Basic
FY2023
FY2022(Note) Equity in earnings:

Yen(2) Consolidated financial position
Total assets
FY2023
FY2022(Reference) Equity:

Million yen

Record Date

End ofQ1

Yen

FY2022
FY2023
FY2024 (forecast)

‐
‐
‐

%

-18
-639

-

-

Ratio of ordinary
income to total assets

Operating income
ratio

-0.2
-7.9

-1.3
-4.0

%

Equity ratio%

Net assets per share

%

16.4
19.4
As of Dec. 31, 2022: 1,168 million yen

Yen

126.83134.76

Cash flow from financing
activities

Cash and cash equivalents- ending

188
-107

-157
-245

2,604
2,505

Million yen

End of
Q2

Million yen

Cash flow from investing
activities

28
-370

2. Cash dividends%

Net income

%

-1.7
-42.6

FY2022: 51 million yen

6,706
1,187
6,022
1,243
As of Dec. 31, 2023: 1,099 million yen
Cash flow fromoperating activities

FY2023
FY2022

Yen

Million yen(3) Consolidated cash flows

Million yen

Return on equity

Net assets

Million yen

Ordinary income

%

-15
-499
FY2022: -548 million yen/ -%Net income per share- Diluted-2.18-73.81
FY2023: 56 million yen(% of change from previous year)

Dividend per share
End ofYear-end
Q3

Million yen

Annual

Yen

Yen

Yen

Yen

0.00
0.00
0.00

‐
‐
‐

10.00
5.00
10.00

10.00
5.00
10.00

Total ofdividend(annual)Million yen

Net assets
dividend ratio(consolidated)

Payout ratio(consolidated)

Million
yen

%

86
43

%

7.4
3.9

‐
‐
39.4

3. Forecast of consolidated results for FY2024 (January 1, 2024 through December 31, 2024)
Net sales
FY2024

Million yen

16,600Operating income%

4.5

Million yen

250

Ordinary income
%

‐

- 1 -

Million yen

330

%

‐

(% of change from previous year)
Profit attributable to
Net income
owners of parent
per share
Million yen

220

%

‐

Yen

25.38

4. Others(1) Reclassification of significant subsidiaries during the period (Reclassification due to change in scope of consolidation): None
(2) Change in accounting policies, accounting estimates and restatement(i) Change in accounting policies associated with revision of accounting standards: None(ii) Change arising from other factors: None(iii) Change in accounting estimates: None(iv) Restatement: None
(3) Number of outstanding shares (common shares)(i)

Number of outstanding shares(including treasury stock)(ii) Number of treasury stock(iii) Average number of outstanding shares

FY20238,874,400 shares

FY2022

8,874,400 shares

FY2023205,838 shares

FY2022205,838 shares

FY20238,668,562 shares

FY2022

8,668,562 shares(Reference)

1. Non-consolidated results (January 1, 2023 through December 31, 2023)(1) Non-consolidated financial results
Net sales

FY2023
FY2022

FY2023
FY2022

Operating income

Ordinary income

Net income

Million yen%

Million yen%

Million yen%

Million yen

%

1,020
1,277

-20.1
-2.2

109
318

-65.5
-8.3

174
299

-41.7
-11.8

129
285

-54.7
-7.9

Net income per share- Basic

Net income per share- Diluted

14.93
32.97

-

Yen

(2) Non-consolidated financial position
Total assets
FY2023
FY2022(Note) Equity(% of change from previous year)

Million yen

Yen

Net assets

3,060
3,051
As of Dec. 31, 2023: 2,066 million yen

Million yen

Equity ratio%

Net assets per share

2,066
67.5
2,023
66.3
As of Dec. 31, 2022: 2,023 million yen

Yen

238.36233.41

Explanation about proper use of forecasts of consolidated financial results and other special notes
1.

Information Regarding the Audit Review Procedure: This report is outside the scope of the procedures for audit of financial
statements as required under the financial instruments and Exchange Act of Japan. The aforementioned procedures have not been
completed as of the time of disclosure of this document.

2.

Forecasts announced by the company referred to above were prepared based on management’s assumption with information
available at this time and therefore involve known and unknown risks and uncertainties. Please note such risks and uncertainties
may cause the actual results to be materially different from the forecasts.

3.

This information to above is an UNOFFICIAL English-language translation of the original Japanese-language version. The format
and contents of this document are defined by the requirements of the Tokyo Stock Exchange’s Standard.
To the extent that there are discrepancies between this translation and the original version, the original version shall be definitive.

- 2 -Table of Contents of the Attached Document
Table of Contents of the Attached Document .............................................................................................................................. 3
1. Business Results ...................................................................................................................................................................... 4(1) Summary of Business Results ............................................................................................................................................ 4(2) Summary of Financial Position .......................................................................................................................................... 5(3) Summary of Cash Flows .................................................................................................................................................... 5(4) Forward-looking Statements .............................................................................................................................................. 7
2. Basic Policy on the Selection of Accounting Standards .......................................................................................................... 7
3. Consolidated Financial Statements .......................................................................................................................................... 8(1) Consolidated Balance Sheets.............................................................................................................................................. 8(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income........................................ 10(3) Consolidated Statements of Changes in Equity ................................................................................................................ 12(4) Consolidated Statements of Cash Flows........................................................................................................................... 14(5) Notes on Consolidated Financial Statements.................................................................................................................... 15
Notes on Going Concern Assumption ................................................................................................................................ 15
Segment Information .......................................................................................................................................................... 15
Per-Share Information ........................................................................................................................................................ 19
Significant Subsequent Events ........................................................................................................................................... 19- 3 -1. Business Results(1) Summary of Business Results

Overview of Consolidated Business Results for the Fiscal Year Ended December 31, 2023
During the fiscal year ended December 31, 2023, although the COVID-19 pandemic was settling down, the global

economy continued to face lingering uncertainty, due to soaring materials prices amid rising geopolitical risks, andvolatile foreign-exchange markets caused by a global monetary-tightening trend.
In this business environment, the SIOS Group ("the Group") continued to restructure its business operations to makeits revenue and profit base more robust, and expanded its offerings of SaaS1 and other cloud-based products andservices² to better assist corporate clients in implementing DX³ solutions.
The Group achieved consolidated business results by segment for the fiscal year under review as follows:(i) Open System Infrastructure Business Segment
Sales of our products and services for on-premise application4 picked up, as chip shortages were resolved and the
supply of hardware products started to clear a backlog of orders. As a result, sales of Red Hat Enterprise Linux5 andother software products sourced from Red Hat Inc.6, increased compared with the same period the previous year. We
also enjoyed strong sales of LifeKeeper7, which is one of our core products, for both on-premise and cloud
application. As a result, net sales in this segment increased 13.7% year on year to 9,909 million yen. The segment
income was 90 million yen, compared with a loss of 13 million yen the year before.
(ii) Application Business Segment
Sales of the management support system to financial institutions were slow. In contrast, revenues from the provisionof support for system development and implementation were up year on year, especially from the support provided forAPI8 projects and business management systems of stock brokerage firms. The Gluegent series9 also achieved a yearon-year increase in sales. As a result, net sales in this segment increased 4.8% to 5,967 million yen.
The Company posted a segment loss of 311 million yen, compared with a loss of 570 million yen the year before,
due to rising personnel expenses and more aggressive investments in developing and marketing new products andservices, mainly in the Med Tech10 business.
The Group's combined net sales in these two segments for the period under review were up 10.2% year on year, to15,889 million yen. The Company posted a consolidated operating loss of 208 million yen, compared with a loss of
572 million yen the year before, and an ordinary loss of 15 million yen—which reflected a favorable impact of theshare of profit of entities accounted for using the equity method, a gain on investments in investment partnerships, anda gain on valuation of derivatives—compared with an ordinary loss of 499 million yen a year earlier. As a result of
posting a loss on valuation of shares of subsidiaries and associates, an impairment loss, and a loss on sales ofbusinesses—which were partially offset by reduced income taxes from the posting of deferred tax assets—the loss
attributable to owners of parent declined to 18 million yen from a loss of 639 million yen the previous year.
The Group’s key management metrics EBITDA (the sum of operating profit, depreciation, and amortization of
goodwill) and ROIC (ratio obtained by dividing operating profit after tax by the sum of shareholders’ equity andinterest-bearing debts) for the period under review were as follows:
EBITDA: -147 million yen, compared with -469 million yen for the previous year
ROIC (annualized): -10.1%, compared with -25.1% for the previous year
Notes: 1. SaaS
Software as a Service. A software licensing and distribution model that allows users to connect to and use cloud-based software
applications over the internet.
2. Cloud
A user enterprise uses services provided by networks without owning servers or software on its premises.

- 4 -3. DX(Digital transformation)
A process in which a company uses data and digital technology to transform its products, services, and business models to
respond to constantly changing business environments more effectively and deliver greater value to customers and society as
well as to transform its business processes and organizational structure and culture to gain greater competitive advantage.
4. On-premises
A user enterprise owns and operates servers and software on its premises.
5. Red Hat Enterprise LinuxLinux OS developed by Red Hat, Inc., a provider of open-source solutions.
6. Red Hat, Inc. Related Items
Linux OS product developed by Red Hat, Inc., a provider of open source solutions.
7. LifeKeeper
A failover software product that automatically switches a failed primary server to a backup server.
8. APIA set of protocols that enables different software programs and applications to share information and functions.
9. Gluegent seriesService products designed to assist corporate clients in achieving greater operational efficiency using cloud solutions. The
series includes the Gluegent Gate cloud-based management of user IDs, the Gluegent Flow cloud-based workflow system, and
the Gluegent Apps Group Scheduler, which incorporated a function to manage schedules of team members into Google Calendar.
10. Med Tech
Short for medical technology.It refers to technology that delivers medical services through software applications.

(2) Summary of Financial Position
Assets, Liabilities, and Net Assets(i)

AssetsCurrent assets amounted to 5,741 million yen as of December 31, 2023, up 10.5% from the end of the previous fiscal year, reflecting

primarily an increase of 404 million yen in notes and accounts receivable trade, as well as contract assets.
Non-current assets amounted to 965 million yen, up 16.7%, reflecting primarily an increase of 100 million yen in deferred tax assets.
As a result, total assets increased 11.4% to 6,706 million yen.
(ii)

Liabilities

Current liabilities amounted to 5,130 million yen, up 18.3% from the previous fiscal year-end, reflecting primarily an increase of 451
million yen in contract liabilities.
Non-current liabilities amounted to 388 million yen, down 12.1%, reflecting primarily a decrease of 66 million yen in long-termborrowings.
As a result, total liabilities increased 15.5% to 5,518 million yen.
(iii) Net assets
Total net assets amounted to 1,187 million yen, down 4.5% from the previous fiscal year-end, reflecting primarily a decrease of 105
million yen in retained earnings.

(3) Summary of Cash FlowsThe balance of cash and cash equivalents at the end of the fiscal year under review increased by 98 million yen to 2,604 million yen, comparedwith the previous fiscal year-end.

（In millions of yen）

FY 2022

FY 2023

ChangeCash flows from operating activities

-370

28

398

Cash flows from investing activities

-107

188

295

Cash flows from financing activities

-245

-157

88

Net cash provided by operating activities amounted to 28 million yen for the fiscal year under review. The increase from the previous year wasdue primarily to an increase in contract liabilities.

- 5 -Net cash provided by investing activities amounted to 188 million yen. The increase was due primarily to a gain in derivative transactions.
Net cash used in financing activities amounted to 157 million yen. This reflected primarily the payment of dividends and the repayment of longterm borrowings.

- 6 -(4) Forward-looking Statements
The global economy is projected to face continued uncertainty due to inflationary trends amid rising geopolitical risks, and volatilefinancial markets. To remain flexible and agile in responding to a changing business environment, the Group intends to restructure its
business operations while investing in its SaaS and subscription-based businesses. In addition, we intend to step up investing indeveloping and expanding new business lines. With these actions to be taken for FY2024 through FY2026, we expect we will be able
to achieve an EBITDA of 880 million yen and a ROIC of 24.3% in FY2026.
The Group anticipates achieving consolidated net sales of 16,600 million yen for the fiscal year ending December 31, 2024, up
4.5% year on year; an operating profit of 250 million yen, compared with an operating loss of 208 million yen the previous year; anordinary profit of 330 million yen, compared with an ordinary loss of 15 million yen the previous year; and a profit of 220 million yen
attributable to owners of parent, compared with a loss of 18 million yen the previous year.
The Company plans to pay a year-end dividend of 5.0 yen per share for the fiscal year under review. The Company anticipates
paying a year-end dividend of 10.0 yen per share for the fiscal year ending December 31, 2024, based on the consolidated financial
guidance just provided.

2. Basic Policy on the Selection of Accounting Standards
The Group will, for the time being, continue to prepare its consolidated financial statements under the Japanese GAAP inconsideration of comparability of period-to-period operating performance as well as comparability with other Japanese companies.
We will consider adopting IFRS in the preparation of consolidated financial statements if developments in Japan and abroad warrant
it.

- 7 -

3. Consolidated Financial Statements(1) Consolidated Balance Sheets(In thousands of yen)
December 31, 2022

December 31, 2023

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade, and contract
assetsMerchandiseWork in process

2,505,766

2,604,002

2,028,395

2,433,031

13,55813,2672,267

Advance payments to suppliers
Other272,047
362,291

532,496
169,429

Allowance for doubtful accounts

-200

-200

5,195,125

5,741,026

182,331

139,856-132,199

97,706

Total current assets
Non-current assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Leased assets
Accumulated depreciation
Leased assets, net
Total property, plant and equipment

50,13142,149173,538-143,142

182,162-152,925

30,39629,236132,117-99,81488,587-27,151

32,30361,435

112,830

132,822

48,49629,87936,78034,332Intangible assets
Software
Software in progress
Other

1,441

1,441

Total intangible assets

79,81772,554

Investment securities
Retirement benefit asset

380,634
50,635407,162
57,004

Guarantee deposits
Deferred tax assets

127,063
28,865

119,273
129,377

Other

47,35947,359Total investment and other assets

634,558

760,177

827,206

965,554

6,022,332

6,706,581

Investment and other assets

Total non-current assets
Total assets- 8 -(In thousands of yen)
December 31, 2022

December 31, 2023

Liabilities
Current liabilities
Accounts payable-trade
Current portion of long-term borrowings
Lease liabilities
Income taxes payable
Contract liabilities
Other

1,084,110

1,235,031

66,00029,70066,00059,0392,760,665

30,5093,212,077

396,729

527,833

4,337,206

5,130,492

Long-term borrowings
Retirement benefit liability

115,500
302,71249,500320,317

Lease liabilities
Long-term deposits received

11,746
11,632

6,676
11,632

Total current liabilities
Non-current liabilities

Total non-current liabilities

441,591

388,127

4,778,798

5,518,619

Shareholders’ equity
Capital stock

1,481,520

1,481,520

Retained earnings
Treasury shares-130,975-87,254-236,541-87,254

Total shareholders’ equity

1,263,289

1,157,723

5,147
-

9,796
187

Foreign currency translation adjustment-100,273-68,280

Total accumulated other comprehensive income-95,125-58,296

Total liabilities
Net assets

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges

Subscription rights to shares
Total net assets
Total liabilities and net assets- 9 -75,36988,534

1,243,534

1,187,961

6,022,332

6,706,581

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Consolidated Statements of Income(In thousands of yen)
Fiscal Year Ended
December 31, 2022

Fiscal Year Ended
December 31, 2023

Net sales
Cost of sales

14,420,269
9,753,613

15,889,487
10,673,285

Gross profit

4,666,656

5,216,202

Selling, general and administrative expenses

5,239,539

5,424,916

Operating loss

-572,883-208,713

6,435

16,437

1,310
1,711

1,098
1,898

Non-operating income
Interest income
Dividend income
Outsourcing service income
Gain on investments in investment partnerships
Share of profit of entities accounted for using equity
methodGain on valuation of derivatives-

82,586

51,71056,66775,38437,648

Other

9,777

6,133

146,328

202,469

1,541

947

64,915
6,364

3,897
2,395

-

2,059
3

72,8219,303-499,376-15,547

Gain on sale of non-current assets-

124

Total extraordinary income-

124

Loss on valuation of investment securities
Loss on retirement of non-current assets

40,60919,00030,744

Loss on sale of businesses

2,409

123

Total extraordinary losses-

27,933

Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Loss on investments in investment partnerships
Foreign withholding tax
Other
Total non-operating expenses
Ordinary loss
Extraordinary income

Extraordinary losses

Loss before income taxes

43,01977,801

Income taxes-current
Income taxes-deferred-542,395
44,435-93,224
32,44452,962-106,788

97,397-74,344-639,793-18,880

Total income taxes
Profit (Loss)
Loss attributable to owners of parent- 10 -

Consolidated Statements of Comprehensive Income(In thousands of yen)
Fiscal Year Ended
December 31, 2022
Loss

Fiscal Year Ended
December 31, 2023

-639,793-18,880

8,740

4,648

81,966

187
30,275462

1,716

91,16836,828Comprehensive income-548,624

17,948Comprehensive income attributable to:Comprehensive income attributable to owners of parent-548,624

17,948Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income- 11 -

(3) Consolidated Statements of Changes in Equity
Fiscal Year Ended December 31, 2022

Shareholders' equity
Capital stock
Balance at beginning of
periodCumulative effects ofchanges in accounting
policies
Restated balance

1,481,520

Retained earnings

Treasury shares

Total shareholders’equity630,831-87,254

2,025,096

8,014
1,481,520

8,014

638,846-87,254

2,033,111

Changes during period
Dividends of surplus
Loss attributable toowners of parent
Net changes in items
other than shareholders'equityTotal changes during
periodBalance at end of period-130,028-130,028-639,793-639,793--769,821--769,821

1,481,520-130,975-87,254

1,263,289

Total accumulated
othercomprehensive
incomeShare acquisitionrightsTotal net assets-186,294

58,882

1,897,685

Accumulated other comprehensive income
Valuation difference Foreign currencytranslation
on available-for-saleadjustment
securities
Balance at beginning of
periodCumulative effects ofchanges in accounting
policies
Restated balance-3,592-182,701

8,014-3,592-182,701-186,294

58,882

1,905,699

Changes during period
Dividends of surplus-130,028

Loss attributable toowners of parent
Net changes in items
other than shareholders'equityBalance at end of current
period8,740

82,42891,16816,487

107,656

8,740

82,42891,16816,487-662,165

Balance at end of period

5,147-100,273-95,12575,3691,243,534-639,793- 12 -

Fiscal Year Ended December 31, 2023
Shareholders' equity
Capital stock
Balance at beginning of
period

1,481,520

Retained earnings

Treasury shares

Total shareholders’equity-130,975-87,254

1,263,289

Restated balance
Dividends of surplus
Loss attributable toowners of parent
Net changes in items
other than shareholders'equityTotal changes of during
periodBalance at end of period-86,685-86,685-18,880-18,880--105,566--105,566

1,481,520-236,541-87,254

1,157,723

Accumulated other comprehensive income
Valuation difference
Deferred gains or
on available-for-salelosses on hedges
securities
Balance at beginning of
period5,147

Foreign currencytranslation
adjustment

Total accumulated
othercomprehensive
incomeShare acquisitionrightsTotal net assets-100,273-95,12575,3691,243,534-

Restated balance
Dividends of surplus-86,685

Loss attributable toowners of parent
Net changes in items
other than shareholders'equityTotal changes of during
period4,648

187

31,99236,828

13,16449,993

4,648

187

31,99236,828

13,164-55,572

Balance at end of period

9,796

187

-68,280-58,296

88,534

1,187,961-18,880- 13 -

(4) Consolidated Statements of Cash Flows(In thousands of yen)
Fiscal Year Ended
December 31, 2022
Cash flows from operating activities
Loss before income taxes

Fiscal Year Ended
December 31, 2023

-542,395-93,224

Depreciation
Impairment losses

103,079
40,60961,03430,744

Loss on sale of businesses
Interest and dividend income-7,74527,933-17,535

Interest expenses
Loss (gain) on investments in investment
partnerships
Share of loss (profit) of entities accounted forusing equity method
Decrease (increase) in accounts receivable - trade,and contract assets
Decrease (increase) in inventories

1,541

947

6,364

-80,191-51,710-56,667

177,759-393,749-9,33523,124

Increase (decrease) in trade payables
Increase in retirement benefit liability-132,389
30,868150,920
17,604

Increase in contract liabilities
Increase in advance payments to suppliers

265,931-48,729

399,386-260,449

Increase (decrease) in accrued consumption taxes
Other-144,217-5,504

117,495
50,326Sub-total-315,873-22,299

13,320-1,54125,308-947

Income taxes refund
Income taxes paid

40,802-107,086

45,078-18,650

Net cash provided by (used in ) operating activities-370,380

28,490Interest and dividends received
Interest paid

Cash flows from investing activities
Purchase of property, plant and equipment-43,146-16,983

Purchase of intangible assets
Payments of guarantee deposits-18,996-447-24,517-551

Proceeds from refund of guarantee deposits
Purchase of investment securities

8,918-45,000

49,229-1,000

Proceeds from collection of loans receivable
Payments for asset retirement obligations

6,583-35,864

7,031-

Proceeds from derivative transaction
Proceeds from sale of businesses
Proceeds from distributions from investment
partnerships
Other

20,237-

103,840-26,150-

97,100-128

Net cash provided by (used in) investing activities-107,717

188,128-129,638-86,270-109,000-7,232-66,000-5,447

Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents-245,871-157,718

80,92939,335-643,038

98,235

Cash and cash equivalents at beginning of year

3,148,805

2,505,766

Cash and cash equivalents at end of year

2,505,766

2,604,002

Cash flows from financing activities
Dividends paid
Repayments of long-term borrowings
Repayments of lease liabilities- 14 -

(5) Notes on Consolidated Financial Statements
Notes on Going Concern Assumption
Not applicable

Segment Information
1. Outline of reportable segments
The Group's reportable segments are components of the Group for which separate financial information is available and which are subject toperiodic reviews by the Company's Board of Directors to determine the allocations of resources and evaluate business performance.
The Company has established business units and subsidiaries, each of which serves specific markets and customers as well as specializes in specifictechnology fields: Some provide products and services in the open system infrastructure field, which includes operating systems and middleware,and some in the application field, which includes enterprise applications.
Therefore, the Group has two reportable segments: the open system infrastructure business segment, and the application business segment.
The description of each segment is as follows:
・Open System Infrastructure Business Segment
In this business segment, the Group markets LifeKeeper, which automatically switches a failed primary system to a backup system, andOSS-related software products, including those sourced from Red Hat, Inc., and provides OSS support services as well as consulting services
for a wide range of information systems.
・Application Business Segment
In this business segment, the Group markets software applications for MFPs, management support system for financial institutions, and the
Gluegent series, which is a SaaS product that works with cloud, develops enterprise information systems for corporate clients on a contract
basis, and provides consulting services for a wide range of information systems.

2. Basis for calculating net sales, profit or loss, assets, liabilities, and other items by reportable segment
Accounting methods used for the reported business segments are the same as those described in "Basis for the Preparation of
the Consolidated Financial Statements."
Profit of reportable segments is based on operating profit. Intersegment sales and transfers are calculated based on market prices.
Please note that the Company does not report assets or liabilities by segment.

- 15 -

3. Information on net sales, profit or loss, assets, liabilities, and other items by reportable segment
Fiscal year ended December 31, 2022
(In thousands of yen)
Reportable segment
Open systeminfrastructurebusiness

Application
business

Total

Adjustments

Amount on
consolidated
financialstatements*

Net sales
Sales to external customers
Intersegment sales andtransfers
Total
Segment loss

8,716,945

5,691,612

14,408,558

11,711

14,420,269

－

6,651

6,651

-6,651－

8,716,945

5,698,263

14,415,209

5,060

14,420,269-13,792-570,802-584,594

11,711-572,883

26,383

76,695103,079－

103,079

Other items
Depreciation* Note: The total amount of segment loss is the same as the amount of operating loss presented in the Consolidated Statements ofIncome.
Fiscal year ended December 31, 2022
(In thousands of yen)
Reportable segment
Open systeminfrastructurebusiness

Application
business

Total

Adjustments

Amount on
consolidated
financialstatements*

Net sales
Sales to external customers
Intersegment sales andtransfers
Total
Segment profit (loss)

9,909,414

5,967,473

15,876,887

12,60015,889,487

－

5,927

5,927

-5,927－

9,909,414

5,973,400

15,882,814

6,672

15,889,487

90,085-311,399-221,313

12,600-208,713

22,43338,60061,034－61,034

Other items
Depreciation* Note: The total amount of segment income or loss is the same as the amount of operating profit or loss presented in the Consolidated
Statements of Income.

- 16 -

Related Information
Fiscal year ended December 31, 2022
1. Information by product and service
Information is omitted as similar information is disclosed in the Segment Information section.
2. Information by region(1) Net sales(In thousands of yen)Japan

Americas13,627,952

522,702

EuropeOther regions

169,900

Total

99,713

14,420,269

Note: Sales are classified by country or region in which customers are located.
(2) Property, plant and equipment(In thousands of yen)Japan

Americas85,51527,315

Total
112,830

3. Information by major customer(In thousands of yen)
Name of customer

Net sales

Relevant segments

Otsuka Corporation

3,895,330

Networld Corporation

1,612,241

Open system infrastructure businessand application businessOpen system infrastructure businessand application business

Fiscal year ended December 31, 2023
1. Information by product and service
Information is omitted as similar information is disclosed in the Segment Information section.
2. Information by region(1) Net sales(In thousands of yen)Japan

Americas15,068,145

536,857

EuropeOther regions

175,994

108,490

Total
15,889,487

Note: Sales are classified by country or region in which customers are located.
(2) Property, plant and equipment(In thousands of yen)Japan

Americas75,011

57,810

Total
132,822

3. Information by major customer(In thousands of yen)
Name of customer

Net sales

Relevant segments

Otsuka Corporation

4,229,893

Networld Corporation

2,026,750- 17 -

Open system infrastructure businessand application businessOpen system infrastructure businessand application businessInformation Regarding Impairment Loss on Non-Current Assets by Reportable Segment
Fiscal year ended December 31, 2022
Reportable segment

Year-endbalance

Open systeminfrastructurebusiness

Application
business－

40,609Total

Adjustment

40,609－Total

40,609Fiscal year ended December 31, 2023
Reportable segment

Year-endbalance

Open systeminfrastructurebusiness

Application
business－

30,744

Total

Adjustment

30,744－

Total

30,744

Information Regarding Amortization of Goodwill and Remaining Goodwill Balance by Reportable Segment
Fiscal year ended December 31, 2022
Not applicable
Fiscal year ended December 31, 2023
Not applicable
Information Regarding Gain on Negative Goodwill by Reportable Segment
Fiscal year ended December 31, 2022
Not applicable
Fiscal year ended December 31, 2023
Not applicable- 18 -

Per-Share Information
Fiscal year ended
December 31, 2022

Fiscal year ended
December 31, 2023

Net assets per share

134.76 yen

126.83 yen

Profit per share-73.81 yen-2.18 yen

Notes: 1. Diluted profit per share is not presented because the Company posted a loss per share and had no outstanding
dilutive shares.
2. The basis for calculating loss per share is as follows:
Fiscal year ended
December 31, 2022

Fiscal year ended
December 31, 2023

Loss per share
Loss attributable to owners of parent (thousand yen)

-639,793-18,880--

Loss attributable to owners of parent relating to common
stock (thousand yen)

-639,793-18,880

Average number of common stock outstanding during theperiod (shares)

8,668,562

8,668,562

Share options for
570,750 commonshares resolved by the
Board of Directors on
May 22, 2012

Share options for
638,917 commonshares resolved by the
Board of Directors on
May 22, 2012

Share options for
107,000 commonshares resolved by the
Board of Directors on
May 30, 2022

Share options for
197,125 commonshares resolved by the
Board of Directors on
May 30, 2022

Amount not attributable to ordinary shareholders (thousandyen)

Descriptions of potentially dilutive common shares that were
not included in the calculation of diluted profit per share

Significant Subsequent Events
Not applicable- 19 -