Consolidated financial result

SIOS Corporation

Consolidated Financial Result(For the 6-month period ended Jun 30, 2022)
July 28, 2022
Company name:
Address:
Stock exchange listings:
Code number :URL:
Representative:
Contact:

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 for filing of quarterly financial report: August 10, 2022
(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, 2022 through Jun 30, 2022)(1) Consolidated business results
Net sales
Million yen(% of change from previous second quarter)

Operating income%%

Million yen

-225
295

443.2

-207
316

6-month period(2022/6)
7,256
-10.2
6-month period(2021/6)
8,079
11.0
(Note)Comprehensive income
As of Jun. 30, 2022: -239 million yen/ -%Net income%

Million yen

446.0

%

-339
234

-

As of Jun. 30, 2021: 271 million yen/ -%Net income per share- Basic

Net income per share- Diluted

Yen

Yen

-39.21
27.06-

6-month period(2022/6)
6-month period(2021/6)

Ordinary income

Million yen(2) Consolidated financial position
Total assets

Net assets

Equity ratio

Million yen

Million yen

%

1,551
1,897

24.2
27.7

6-month period(2022/6)
6,104
FY2021
6,649(Reference) Equity
As of Jun. 30, 2022: 1,476 million yen

As of Dec. 31, 2021: 1,838 million yen

2. Cash dividends
Record Date

End of Q1

Interim

Dividend per share
End of Q3

Year-end

Annual

Yen

Yen

Yen

Yen

Yen

FY2021-0.00

FY2022-0.00

FY2022 (expected)

-

15.00

15.00

-

10.00

10.00

(Note) Revisions to recent dividend forecast: None

3. Forecast of consolidated results for FY2022 (January 1, 2022 through December 31, 2022)
Net sales
Million yen

Operating income%

Ordinary income(% of change from previous year)
Net income
Net income
per share

Million yen%

Million yen%

Million yen%

Yen

FY2022
15,000-4.6-550(Note) Revisions to recent business forecast: YES

-

-500

-

-650

-

-74.98- 1 -Consolidated financial result

SIOS Corporation

4. Others(1) Reclassification of significant subsidiaries during the period (Reclassification due to change in scope of consolidation): None
(2) Application of special accounting methods for the preparation of the consolidated quarterly financial statements: None
(3) Change in accounting policies, accounting estimates and restatement(i) Change in accounting policies associated with revision of accounting standards: YES(ii) Change arising from other factors: None(iii) Change in accounting estimates: None(iv) Restatement: None
(4) 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(6-month period)

Second quarter of
FY2022
Second quarter of
FY2022
Second quarter of
FY2022

8,874,400 shares

FY20218,874,400 shares

205,838 shares

FY2021205,838 shares

8,668,562 shares

Second quarter of
FY2021

8,668,562 shares

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 quarterly review offinancial statements as required under the financial instruments and Exchange Act of Japan. The aforementioned procedures havenot been completed as of the time of disclosure of this document.

2.

Net income per share was calculated by the number of outstanding shares (excluding treasury stocks) at the end of fiscal year.

3.

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.

4.

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 -Consolidated financial result

SIOS Corporation○Table of Contents of the Attached Document

1. Qualitative Information on Quarterly Results..................................................................................... 4(1) Results of Operations .................................................................................................................... 4(2) Summary of Financial Position....................................................................................................... 5(3) Forward-looking Statements Including Consolidated Business Forecasts ............................................. 5
2. Quarterly Consolidated Financial Statements ..................................................................................... 6(1) Quarterly Consolidated Balance Sheet ............................................................................................. 6(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive
Income ............................................................................................................................................. 8
Quarterly Consolidated Statements of Income .............................................................................. 8
Quarterly Consolidated Statements of Comprehensive Income ....................................................... 9(3) Quarterly Consolidated Statements of Cash Flows .......................................................................... 10(4) Notes to Quarterly Consolidated Financial Statements ..................................................................... 11(Notes to Going Concern Assumption) ...................................................................................... 11(Notes on significant changes in the amount of shareholders' equity)............................................. 11(Changes in accounting policies) .............................................................................................. 11(Segment Information) ............................................................................................................ 13(Additional Information).......................................................................................................... 14(Significant subsequent events) ................................................................................................ 14- 3 -Consolidated financial result

SIOS Corporation

1. Qualitative Information on Quarterly Results(1) Results of Operations
During the six months ended June 30, 2022, the global economy continued to face lingering uncertainty amid the alarming resurgenceof COVID-19, the Russian invasion of Ukraine, the sharp devaluation of the Japanese yen, and the prolonged chip shortages.
To better adapt to this fast-changing socioeconomic landscape, many businesses continued to invest aggressively in implementing
digital transformation¹ solutions, including making greater use of cloud environments. In this business environment, the SIOS Groupleveraged its vast technical expertise and experience in open-source software development to offer corporate clients the right solutions toassist them in moving forward with DX, with a focus on products and services that work in the cloud, as well as the SaaS² business.
The Group achieved consolidated business results by segment for the six months ended June 30, 2022, as follows:
On a side note, effective at the beginning of the period under review, the Company has adopted the Accounting Standard for Revenue
Recognition (Accounting Standards Board of Japan Statement No. 29, issued on March 31, 2020) in its financial reporting.
(i) Open System Infrastructure Business Segment
Revenue from OSS3-related products and their support services increased over the same period the previous year. In contrast, sales of
Red Hat Enterprise Linux4 and other software products sourced from Red Hat, Inc.5 plummeted. This was primarily because
high-volume sales to corporate clients were sluggish, due to delays in their system development projects caused by longer delivery leadtimes for hardware products at the height of chip shortages. Sales of LifeKeeper6, which is one of the Group's core software products,
decreased over the same period the previous year. This was because strong sales in the Americas, Asia, and Oceania were more thanoffset by weak perpetual license sales in Japan. As a result, net sales in this segment fell 14.9% year on year to 4,303 million yen.
Segment profit dropped 92.9% to 15 million yen, due to the decrease in sales described above and an increase in personnel expenses.
The application of the Accounting Standard for Revenue Recognition had no effect on the segment sales or profit during the period
under review.
(ii) Application Business Segment
While revenue from the Gluegent series7 and software applications for MFPs8 was up from the previous year, sales of the
management support system were slow to financial institutions. This was primarily because of delays in their system development
projects, caused by longer delivery lead times for hardware products at the height of chip shortages. Combined with the effect of theapplication of the Accounting Standard for Revenue Recognition, net sales in this segment were down 2.6% year on year to 2,947
million yen.
The Group posted a segment loss of 246 million yen, compared with a profit of 79 million yen the year before, due to the decrease insales described above, an increase in personnel expenses, and an increase in investments in new products and services.
The application of the Accounting Standard for Revenue Recognition resulted in a decrease of 186 million yen in segment sales andan increase of 9 million yen in segment profit.
The Group's combined net sales in these two segments for the period under review were down 10.2% year on year to 7,256 million
yen. The Company posted a consolidated operating loss of 225 million yen, compared with an operating profit of 295 million yen theyear before, and an ordinary loss of 207 million yen, compared with an ordinary profit of 316 million yen a year earlier. The Company
posted a loss of 339 million yen attributable to owners of parent, compared with a profit of 234 million yen the year before. The loss
included an impairment loss of 29 million on non-current assets associated with sales of the management support system to financial
institutions, and deferred income taxes of 77 million yen resulting from the reversal of deferred tax assets.
The application of the Accounting Standard for Revenue Recognition resulted in a decrease of 186 million yen in consolidated net
sales, an increase of 9 million yen each in operating profit and ordinary profit, and an increase of 13 million yen in profit attributable toowners of parent.
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 and interest-bearing debts) for the fiscal year
under review are as follows:
EBITDA: -157 million yen, compared with +334 million yen for the same period the previous year
ROIC (annualized): -16.1%, compared with 16.9% for the same period the previous year

- 4 -Consolidated financial result
1

SIOS Corporation

Digital transformation(DX)A process in which a company uses data and digital technology to transform its products, services, andbusiness models to more effectively respond to constantly changing business environments 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.

2

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.

3

OSS
Abbreviation for open source software, Software whose source code, which is the fundamental component of the program, ismade available for free and can be used, modified, and redistributed.

4

Red Hat Enterprise Linux

5

Red Hat, Inc. Related Items

Linux OS developed by the open solution provider Red Hat, Inc.
Linux OS product developed by Red Hat, Inc., a provider of open source solutions.
6

LifeKeeper

7

Gluegent series

A failover software product that automatically switches a failed primary server to a backup server.
Service 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.
8

Software application for multifunction printers
A multifunction printer (MFP) is a piece of office equipment that incorporates print, scan, copy, and fax capabilities into one
unit. SIOS develops, markets, and updates Quick Scan and Speedoc, document management software applications runningon an MFP.

(2) Summary of Financial Position(i) Assets
Current assets amounted to 5,287 million yen as of June 30, 2022, down 8.4% from the end of the previous
fiscal year, reflecting primarily a decrease of 410 million yen in cash and deposits.
Non-current assets amounted to 816 million yen, down 6.6%, reflecting a decrease of 29 million yen inguarantee deposits.
As a result, total assets decreased 8.2% to 6,104 million yen.
(ii) Liabilities
Current liabilities amounted to 4,084 million yen, down 4.3% from the previous fiscal year-end, reflecting
primarily a decrease of 321 million yen in accounts payable trade.
Non-current liabilities amounted to 468 million yen, down 3.2%, reflecting primarily a decrease of 33 million
yen in long-term borrowings.
As a result, total liabilities decreased 4.2% to 4,552 million yen.
(iii) Net assets
Total net assets amounted to 1,551 million yen, down 18.2% from the previous fiscal year-end, reflecting
primarily a decrease of 461 million yen in retained earnings.
(3) Forward-looking Statements Including Consolidated Business Forecasts
We have updated the consolidated business forecasts for the fiscal year ending December 31, 2022, whichwere originally announced on February 3, 2022.
For details, refer to “A Revision to Consolidated Business Forecasts,” announced on July 28, 2022.

- 5 -Consolidated financial result

SIOS Corporation

2. Quarterly Consolidated Financial Statements(1) Quarterly Consolidated Balance Sheet(Unit: thousand yen)

FY 2021(as of December 31, 2021)

FY 2022 Q2(as of June 30, 2022)

3,148,805
2,101,204

2,738,295－

2,026,076

6,842
81,243
223,317
213,671-200
5,774,885

8,752
1,731
214,630
298,193-200
5,287,478

59,276
61,929121,206

59,77853,575
113,353

86,913
11,524
1,781
100,218

66,651
29,8791,441
97,971

289,22253,453
172,939
142,205-4,221
653,599875,025
6,649,910

352,301
51,514143,044
62,929-4,221
605,568
816,893
6,104,372

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Notes and accounts receivable - trade, andcontract assets
MerchandiseWork in progress
Advance payments to suppliers
Other
Allowance for doubtful accounts
Total current assets
Fixed assets
Tangible fixed assets
Buildings (net)Other (net)Total tangible fixed assets
Intangible fixed assets
Software
Software in progress
Other
Total intangible fixed assets
Investment and other assets
Investment securities
Retirement benefit asset
Guarantee deposits
Other
Allowance for doubtful accounts
Total investment and other assets
Total fixed assets
Total assets

- 6 -

－

Consolidated financial result

SIOS Corporation(In thousands of yen)
December 31, 2021
Liabilities
Current liabilities
Accounts payable-trade
Current portion of long-term borrowings
Lease liabilities
Income taxes payable
Advances received
Contract liabilities
Other
Total current liabilities
Non-current liabilities
Long-term borrowings
Retirement benefit liability
Lease liabilities
Long-term deposits received
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Total accumulated other comprehensive income
Subscription rights to shares
Total net assets
Total liabilities and net assets- 7 -June 30, 2022

1,216,499
109,000
6,000
24,484
2,399,175－
513,734
4,268,894

894,823
80,440
5,897
3,723
－
2,740,500
359,466
4,084,849

181,500
271,844
18,353
11,632
483,3314,752,225

148,500
292,530
15,409
11,632
468,072
4,552,922

1,481,520
630,831-87,254
2,025,096

1,481,520
168,928-87,254
1,563,194-3,592

2,064-182,701-186,294
58,882
1,897,685
6,649,910-88,454-86,389
74,646
1,551,450
6,104,372

Consolidated financial result

SIOS Corporation(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive
IncomeQuarterly Consolidated Statements of Income
Six months ended June 30

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Gain on valuation of derivatives
Share of profit of entities accounted for using
equity method
Other
Total non-operating income
Non-operating expenses
Interest expenses
Loss on investments in investment partnerships
Foreign exchange losses
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sale of non-current assets
Total extraordinary income
Extraordinary losses
Impairment losses
Loss on retirement of non-current assets
Total extraordinary losses
Profit before income taxes
Income taxes-current
Income taxes-deferred
Total income taxes
Profit (loss)
Profit (loss) attributable to owners of parent

Six months ended June 30,
2021
8,079,445
5,592,718
2,486,726
2,191,237
295,489(In thousands of yen)Six months ended June 30,
2022
7,256,374
4,958,021
2,298,353
2,523,635-225,282

2,242
35,4792,586
94,202

19,75625,1207,329
64,808

6,236
128,145

1,131－
42,581
255
43,968316,329838
4,450
105,445－
110,735-207,872

74
74

－
－

－
2,856
2,856
313,546
46,75832,24279,000234,546
234,546

29,074
767
29,842-237,714
24,68577,489102,174-339,888-339,888- 8 -Consolidated financial result

SIOS Corporation

Quarterly Consolidated Statements of Comprehensive Income
Six months ended June 30

Profit (loss)
Other comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Share of other comprehensive income ofentities accounted for using equity method
Total other comprehensive income
Quarterly comprehensive income(Comprehensive income attributable to)
Quarterly comprehensive income attributableto owners of the parent(Unit: thousand yen)Six months ended
June 30, 2021
Six months ended June 30,(From January 1,
2022
2021
(From January 1, 2022
through June 30,
through June 30, 2022)
2021)
234,546-339,888

- 9 -

3,032

5,657

33,592

94,181

618

66

37,242271,789

99,904-239,984

271,789-239,984

Consolidated financial result

SIOS Corporation(3) Quarterly Consolidated Statements of Cash Flows(In thousands of yen)
Six Months Ended
June 30, 2021
Cash flows from operating activities
Profit (loss) before income taxes
Depreciation
Impairment losses
Interest and dividend income
Interest expenses
Loss (gain) on investments in partnership
Share of (profit) loss of entities accounted forusing equity method
Decrease (increase) in trade receivables
Increase (decrease) in trade receivables andcontract assets
Decrease (increase) in inventories
Increase (decrease) in trade payables
Increase (decrease) in retirement benefit liability
Increase (decrease) in advances received
Increase (decrease) in contract liabilities
Decrease (increase) in advance payments to
suppliers
Increase (decrease) in accrued consumption taxes
Other
Sub-totalInterest and dividends received
Interest paid
Income taxes refund
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Purchase of intangible assets
Payments of guarantee deposits
Proceeds from refund of guarantee deposits
Payments for asset retirement obligations
Purchase of short-term and long-term investment
securities
Other
Net cash provided by (used in) investing activities
Cash flows from financing activities
Dividends paid
Net increase (decrease) in short-term borrowings
Repayments of long-term borrowings
Other
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of quarter- 10 -Six Months Ended
June 30, 2022

313,546
39,461－-2,5081,131－-237,714
67,311
29,074-3,492838
4,450-19,756-25,120

420,868－－

110,911481,234-865,208
12,718467,414－77,602-321,676
20,685－220,933-13,898

8,687-29,776-65,140
740,084
2,508-1,131－-97,059
644,402-143,976-2,980-194,464
9,067-838
40,802-73,194-218,628

130,000-7,119-3,300-7,297－-30,535－-22,476-18,354-418
95－-25,200-45,000-8,55947,989－-86,155-86,938-50,000-61,560-9,529-208,027-129,272－-61,560-3,047-193,880

28,17988,154

512,5442,728,289
3,240,834-410,509
3,148,805
2,738,295

Consolidated financial result

SIOS Corporation(4) Notes to Quarterly Consolidated Financial Statements(Notes to Going Concern Assumption)
Not applicable(Notes on significant changes in the amount of shareholders' equity)
Not applicable.
(Changes in accounting policies)(Application of the Accounting Standard for Revenue Recognition)
Effective at the beginning of the period under review, the Company has adopted the Accounting Standard for Revenue
Recognition (ASBJ Statement No. 29, issued on March 31, 2020) in its financial reporting. Under this standard, the Company
recognizes revenue when control of a promised good or service has been transferred to a customer, and the recognized amountof revenue is the amount of the consideration expected to be received from the customer in exchange for the good or service.
With the application of the Accounting Standard for Revenue Recognition, the Company has made the following changes to its
accounting policies:(1) Recognizing revenue from transactions in which the Group acts as an agent
When the Group acts as an agent in providing a good or service to a customer, the Company previously recognized as revenue
the total amount of the consideration to be received from the customer in exchange for the good or service. Under the new
accounting policy, the Company recognizes as revenue the net amount after the amount to be paid to the supplier (principal) forthe product or service is deducted from the amount of the consideration to be received from the customer.
(2) Recognizing revenue from made-to-order software development projects
The Company previously recognized revenue from made-to-order software development projects, based on thepercentage-of-completion method when the outcome of the completed portion of development was deemed certain, and basedon the completed-contract method when it was not. Under the new accounting policy, the Company recognizes revenue fromsuch a project over a period of time, based on a reasonably estimated performance obligation satisfied to date as a percentage ofthe total obligation to be performed under the contract. In cases where such a reasonable estimate cannot be made, the Company
recognizes revenue based on the cost-recovery method.
In a contract under which a performance obligation is expected to be fully satisfied shortly after the transaction begins, theCompany employs an alternative method of recognizing revenue only when the performance obligation is fully satisfied.
(3) Recognizing revenue from the transfer of control of a licensed intellectual property
The Company previously recognized revenue from the transfer of control of a licensed intellectual property when the right toaccess the property was granted to a customer.
Under the new accounting policy, the Company recognizes revenue when the customer has acquired the ability to direct theuse of, and receive the benefit from, a licensed intellectual property.
In accordance with the transitional treatment as permitted in the proviso of Paragraph 84 of the Accounting Standard for
Revenue Recognition, the Company has treated the assumed cumulative amount of effect from retroactively applying the new
accounting policies up to the end of the previous fiscal year as an adjustment to retained earnings at the beginning of the period
under review, and has begun to apply the new accounting policies to the beginning balance of retained earnings from the period
under review.
As a result of the application of the new accounting policies, consolidated net sales decreased by 186.609 million yen for theperiod under review; cost of sales decreased by 196.172 million yen; operating profit, ordinary profit, and profit before income
taxes increased by 9.562 million yen each; and profit attributable to owners of parent increased by 13.801 million yen. Retained
earnings increased by 8.014 million yen at the beginning of the period under review.

- 11 -

Consolidated financial result

SIOS Corporation

With the application of the Accounting Standard for Revenue Recognition, “Notes and accounts payable trade,” presented
under “Current Assets” in the Consolidated Balance Sheet for the previous fiscal year, is included in “Notes, accounts payable
trade, and contract assets,” beginning in the period under review. “Advances received,” presented under “Current Liabilities” in
the Consolidated Balance Sheet for the previous fiscal year, is included in “Contract liabilities,” beginning in the period underreview. “Decrease (increase) in trade receivables,” presented under “Cash flows from operating activities” in the Consolidated
Statement of Cash Flows for the same period the previous year, is included in “Decrease (increase) in trade receivables andcontract assets,” and “Increase (decrease) in advances received” is included in “Increase (decrease) in contract liabilities,”
beginning in the period under review.
In accordance with the transitional treatment as permitted in Paragraph 89-2 of the Accounting Standard for Revenue
Recognition, the Company has not restated the results for the previous fiscal year, using the new presentation methods describedabove.
Application of the Accounting Standard for Fair Value Measurement
Effective at the beginning of the period under review, the Company has adopted the Accounting Standard for Fair Value
Measurement (ASBJ Statement No. 30, issued on July 4, 2019) in its financial reporting. In accordance with the transitional
treatment as permitted in Paragraph 19 of the standard and Paragraph 44-2 of the Accounting Standard for Financial Instruments(ASBJ Statement No. 10, issued on July 4, 2019), the Company will prospectively apply a new accounting policy as prescribedby the Accounting Standard for Fair Value Measurement. The application of the new accounting policy has no effect on the
Company's quarterly consolidated financial statements.

- 12 -

Consolidated financial result

SIOS Corporation(Segment Information)【Segment Information】
I. For the Six months ended June 30, 2021 (From January 1, 2021 through June 30, 2021)
1. Information on the amount of sales and income/loss by reportable segment(Unit: thousand yen)
Reportable segment
Adjustments

Amount recordedin quarterly
consolidated
statements ofincome(Note)

Open systeminfrastructurebusiness

Application
business

5,054,452

3,024,692

8,079,145

300

8,079,445

928

9,828

10,757-10,757－

5,055,381

3,034,520

8,089,902-10,457

8,079,445

215,807

79,382

295,189300

295,489

Total

Net sales
Sales to external customers
Inter-segment sales and transfers
Total
Segment profit (loss)

Note: The total amount of segment profits is adjusted to be equal to the operating profit presented in the Consolidated Statements ofIncome for the period under review.
Supplementary Information
Information by region
In addition to the disclosure required by “Accounting Standard for Quarterly Financial Statements,” information (Sales) by region isdisclosed in accordance with “Accounting Standard for the Disclosure of Segment Information” for the purpose of providing users offinancial statement with valuable information.
Net sales
Six months ended June 30, 2021 (From January 1, 2021 through June 30, 2021)(Unit: thousand yen)Japan
7,742,208

Americas221,740

Europe78,596

Other regions
36,899Note: Sales are classified by country or region in which customers are located.
2. Information on impairment loss of fixed assets or goodwill by reportable segment
Not applicable- 13 -

Total
8,079,445

Consolidated financial result

SIOS Corporation

II. For the six months ended June 30, 2022 (From January 1, 2022 through June 30, 2022)
1. Information on the amount of sales and income by reportable segment(Unit: thousandyen)

Adjustments

Amount recordedin quarterly
consolidated
statements ofincome(Note)

7,250,962

5,411

7,256,374

3,996

3,996

-3,996－

4,303,677

2,951,282

7,254,959

1,414

7,256,374

15,331-246,024-230,693

5,411-225,282

Reportable segment
Open systeminfrastructurebusiness

Application
business

4,303,677

2,947,285

－

Total

Net sales
Sales to external customers
Inter-segment sales and transfers
Total
Segment profit

Note: The total amount of segment profits or losses is the same as the amount of operating loss presented in the Consolidated
Statements of Income for the period under review.
Supplementary Information
Information by region
In addition to the disclosure required by “Accounting Standard for Quarterly Financial Statements,” information (Sales) by region isdisclosed in accordance with “Accounting Standard for the Disclosure of Segment Information” for the purpose of providing users offinancial statement with valuable information.
For the six months ended June 30, 2022 (From January 1, 2022 through June 30, 2022)(Unit: thousand yen)Japan

Americas6,879,442

248,178

EuropeOther regions

81,87546,877

Total
7,256,374

Note: Sales are classified by country or region in which customers are located.
2. Information on impairment loss of fixed assets or goodwill by reportable segment
As described in “Changes in accounting policies,” effective at the beginning of the period under review, the Company has adopted
the Accounting Standard for Revenue Recognition and revised the accounting methods for revenue recognition. Accordingly, theCompany has changed the methods of accounting for net sales and profit/loss for each reportable segment.
As a result of this change, net sales in the Application Business Segment for the period under review decreased by 186.609 million
yen, and the segment profit increased by 9.562 million yen, compared with using the previous methods. The change had no effect on
net sales or profit/loss in the Open System Infrastructure Business Segment.
(Additional Information)
There is no significant change to the assumptions we made earlier about the effect that the COVID-19 crisis might have on theGroup's business performance going forward, which were provided in the "Additional Information" section of the Company's
securities filings for the fiscal year ended December 31, 2020.
(Significant subsequent events)
Not applicable- 14 -