English translation

March 22, 2024

Annual Report(January 1, 2023 through December 31, 2023)

1. Current Status of the Corporate Group(1) Business conditions and operating results
Progress of the Group’s business in the fiscal year ended December 31, 2023 (FY 2023) is as follows.
(i) Business results
In December 2020, the Group began selling TREAKISYM® (generic name: bendamustine hydrochloride or
bendamustine hydrochloride hydrate) through its own sales organization. This was a critical step of the Group to
attain profitability in FY 2021, which was a top priority for the fiscal year.
To achieve nationwide distribution, we have entered into distribution agreements with Suzuken Co., Ltd. andToho Pharmaceutical Co., Ltd. with both companies as exclusive distributors. We are also working with S.D.
Collabo Co., Ltd. and have established two logistics centers, one in Eastern Japan and the other in Western Japan.
Further, by deploying medical representatives nationwide, we have established a system through which we canbetter provide science-backed information.
In FY 2022, the Group obtained approval for a partial change to the marketing authorization of the ready-todilute (RTD) liquid formulation of TREAKISYM® to add rapid infusion (RI) administration. Compared to thefreeze-dried (FD) formulation, the RTD formulation of TREAKISYM® reduces the time required for thecomplicated dissolution process. RI administration significantly reduces the infusion time from 60 minutes it tookpreviously to 10 minutes, benefitting both patients and healthcare providers. The reduction in infusion volume to
50mL, from 250mL required previously, also lowers the volume of saline solution and, accordingly, the amount ofsalt (sodium chloride) used.
Conversion to the RI administration is ongoing, with over 90% of medical institutions having switched to RI
administration as of the end of December 2023.
During the fiscal year under review, due to the spread of COVID-19 and other viral infections, medical
professionals continued to refrain from prescribing bendamustine out of concerns for the increased risk of infection
in patients with hematologic malignancies, especially malignant lymphomas, and the possibility of prolonged orsevere infection during or after treatment with bendamustine. However, with the approval of the additional
indication of r/r DLBCL for the bendamustine-rituximab (BR) therapy and the polatuzumab vedotin (geneticallymodified) plus bendamustine-rituximab (genetically modified) (Pola-BR) therapy, sales of TREAKISYM®, largely
owing to sales for the treatment of r/r DLBCL, amounted to 5,589,708 thousand yen (-44.1% year on year).
In terms of SG&A expenses, the Group recorded R&D expenses of 2,638,234 thousand yen (+3.3% YoY), andthis combined with other SG&A expenses amounted to 5,222,681 thousand yen (-7.3% YoY).
As a result, in FY 2023, operating loss was 811,668 thousand yen (versus operating profit of 1,963,625 thousand
yen in FY 2022) and ordinary loss was 736,130 thousand yen (versus ordinary profit of 1,999,878 thousand yen in
FY 2022). Loss attributable to owners of parent amounted to 1,962,817 thousand yen (versus profit attributable toowners of parent of 1,179,238 thousand yen in FY 2022), due to the recording of 560,590 thousand yen in
impairment losses resulting from the review of recoverability in accordance with the Accounting Standard for
Impairment of Fixed Assets and the recording of 744,728 thousand yen in deferred income taxes due to the reversalof deferred tax assets.
In February 2022, four companies obtained marketing approval for the generic versions of TREAKISYM®, andtwo of the companies began selling their generic versions of the drug. Then, the two companies obtained approval
for the generic versions of the rapid infusion (RI) formulation of TREAKISYM® and began selling them. Given
the potential infringement of Eagle’s patents related to TREAKISYM® in Japan, which are exclusively licensed to
the Company, the Company, jointly with Eagle, filed a lawsuit in December 2022, seeking an injunction against
the manufacture and sale of Pfizer’s and Towa’s generic version of TREAKISYM® and compensation for damages
arising from the infringement. The lawsuit against the two companies is ongoing, and the Company is doing its
best to protect and preserve its rights.
Segment information has been omitted since the Group operates within a single segment, which includes the1research and development, manufacturing, and marketing of pharmaceutical drugs and other related activities.
(ii) Research and development activities
During the fiscal year under review, we conducted the following research and development activities in each ofour development pipelines.
(a) Anticancer agents: SyB L-0501 (FD formulation), SyB L-1701 (RTD formulation), and SyB L-1702 (RIadministration) (generic name: bendamustine hydrochloride or bendamustine hydrochloride hydrate, trade
name: TREAKISYM®)
For the RI administration, the Group completed clinical studies on safety and a partial change application wasapproved in February 2022, enabling the use of RI injection for all approved indications of the RTD formulation
in-licensed from Eagle.
The Group will actively conduct joint research on TREAKISYM® with the University of Tokyo and Saitama
Medical University, to explore new development possibilities.
(b) Anticancer agents: SyB L-1101 (intravenous formulation) and SyB C-1101 (oral formulation) (generic name:rigosertib sodium)For rigosertib in-licensed from Onconova Therapeutics, Inc. (head office: Pennsylvania, U.S.; hereinafter“Onconova”) and TREAKISYM®, the Group is searching for new indications as well as new applications for the
drugs used in combination with each other or with other existing drugs, through joint research and the offering ofacademia-industry collaborative courses with the University of Tokyo.
(c) Antiviral drug: SyB V-1901 (generic name: brincidofovir [BCV])In the development of the intravenous and oral formulations of antiviral drug brincidofovir (SyB V-1901;
hereinafter “IV BCV” and “Oral BCV”), in-licensed from Chimerix Inc. (head office: North Carolina, U.S.;
hereinafter “Chimerix”) with a view to global rollout, the Group has been carrying out joint research with top
research institutions of each specialized field in Japan and overseas in light of the drugs’ broad effectivenessagainst double-stranded DNA (dsDNA) viruses.
The Group has decided to prioritize the global development of IV BCV primarily in Japan, the U.S., andEurope, targeting AdV infection or infectious diseases associated with hematopoietic stem cell transplantation ororgan transplantation in immunocompromised patients. In March 2021, the Group filed an Investigational New
Drug (IND) application with the US Food and Drug Administration (FDA) to conduct a Phase IIa clinical trial
primarily in pediatric patients (also including adults) suffering from AdV infection or infectious diseases. Thisdevelopment program was granted Fast Track designation by the FDA in April 2021. In May 2023, the Phase IIa
study confirmed that IV BCV demonstrated anti-AdV activity, establishing proof of concept (PoC) in humans.
In December 2023, oral presentation was given on the positive data obtained from the study indicating theeffectiveness of IV BCV at the 65th American Society of Hematology (ASH) Annual Meeting and Exposition.
Further, a use patent for BCV for the treatment of AdV infection and infectious diseases filed based on the resultsof the study was granted and registered in Japan in January 2024.
BK virus (BKV) infection after kidney transplantation is a disease with serious consequences for the recipient,the donor, the medical practitioner, and the society, due to the risk of impaired renal function and loss of thetransplanted kidney (graft loss). The Group submitted a clinical trial notification for a Phase II study in patients
infected with BKV after kidney transplantation to the Pharmaceuticals and Medical Devices Agency (PMDA) of
Japan in May 2022 and filed another notification with the Therapeutic Goods Administration (TGA) of Australia
in August 2022, and the investigational drug was administered to the first patient (first patient dosing [FPD]).
The study was scheduled to conclude in 2025, but due to delays in patient enrollment against the plan, the Group,
together with researchers involved in the study, is considering making revisions to the study protocol.
The Group is also looking to develop BCV to treat multiple sclerosis, an intractable disease that has recently
been proven to be associated with Epstein-Barr virus (EBV). In August 2022, the Group entered into acollaboration agreement with the National Institute of Neurological Disorders and Stroke (NINDS), part of the
National Institutes of Health (NIH) in the U.S., for the transfer of materials for evaluation of BCV’s potential
antiviral effect on EBV. In March 2023, with the goals of verifying the efficacy of BCV against EB virus
infections in the treatment of multiple sclerosis and acquiring information necessary to conduct future clinicalstudies, the Group concluded a Cooperative Research and Development Agreement (CRADA), and in October
2023, Dr. Maria Chiara Monaco presented the research results at the 9th Joint ECTRIMS–ACTRIMS Meeting
held in Milan, Italy. Further, in April 2023, the Group entered into a CRADA with the National Institute ofAllergy and Infectious Diseases (NIAID) of the US National Institute of Health, to evaluate the effectiveness of
BCV in treating EBV-associated lymphoproliferative diseases.
Among dsDNA viruses, polyomaviruses, especially JC viruses (JSV), are known to cause serious brain
diseases through their infection. As existing antiviral drugs show little efficacy, the development of an effective

2

treatment is eagerly awaited. In November 2022, the Group entered into Material Transfer Agreement with Penn
State College of Medicine whereby the Group will provide BCV for use in a non-clinical study to evaluate theefficacy of BCV in mouse models of mouse polyomavirus infection.
Some dsDNA viruses, such as HSV1 and VZV, are directed against cranial nerve tissues, and recent studies
have suggested that the reactivation of latent strains of these viruses may play a role in causing serious
neurological disorders, including Alzheimer's disease. In December 2022, the Group entered into a SponsoredResearch Agreement with Tufts University to conduct joint research on BCV. This joint research is a nonclinicalstudy that will evaluate the efficacy of BCV in a herpes simplex virus (HSV) infection model using a 3D (threedimensional) brain model established by Tufts University.
In addition to having its strong antiviral effect, BCV also is expected to have an antitumor effect, and theGroup is exploring new indications such as EBV-positive lymphoma, refractory brain tumors, and other cancers
via research collaborations with the National Cancer Centre Singapore (NCCS) and University of California San
Francisco (UCSF) Brain Tumor Center. In December 2022, the results of collaborative research with NCCS on
the therapeutic efficacy of BCV in the treatment of NK/T-cell lymphoma for which no effective treatment iscurrently available were presented at the 64th American Society of Hematology (ASH) Annual Meeting in New
Orleans. In June 2023, the results of research on biomarkers that predict the antitumor efficacy of BCV were
presented at the 17th International Conference on Malignant Lymphoma (ICML) held in Lugano, Switzerland.
In September 2022, Chimerix announced that it has completed the closing of the sale of BCV to Emergent
BioSolutions Inc. (head office: Maryland, U.S.). The Group’s exclusive worldwide development, manufacturing,and marketing rights to BCV for all indications except orthopox virus infections (including smallpox andmonkeypox) will not be affected.
(iii) Business outside Japan
In August 2023, Dr. Stephane Berthier was appointed CEO and president of SymBio Pharma USA, Inc., and in
September 2023, Dr. Nkechi Azie joined the management team as global chief medical officer (CMO). The Groupwill further expand its global development structure and position SymBio Pharma USA as the driving force behind
the international clinical trials, spearheading and accelerating the global development plan for BCV.
(iv) Licensing of new drug candidates
The Group is moving ahead with global development of brincidofovir, an antiviral drug in-licensed in 2019. At
the same time, the Group continues to evaluate new drug candidates for potential in-licensing. Through these
efforts, the Group aims to create medium- to long-term business value as a profitable biopharmaceutical company
with growth potential.
(v) Capital investment
The total amount of capital expenditures during the fiscal year under review was 204 thousand yen, mainly
consisting of office investments and the purchase of appliances, network devices, and business software.

(2) Fundraising status

In the consolidated fiscal year under review, the Group raised 692,400 thousand yen through the issue of newshares with EVO FUND as the allottee.

(3) Status of assets and profit and loss
Fiscal year

FY 2020
The 16th Term

FY 2021
The 17th Term

FY 2022
The 18th Term

(Unit: thousands of yen)
FY 2023
The 19th Term

(Consolidated fiscal year)
Classification
Net sales——
10,008,338
5,589,708
Operating profit (loss)
1,963,625(811,668)——
Ordinary profit (loss)——
1,999,878(736,130)
Profit (loss) attributable to owners——
1,179,238(1,962,817)
of parent
Profit (Loss) per share (yen)
30.20
—
—
(49.19)Total assets
10,433,347——
8,170,243
Net assets
8,506,092
7,209,909——
Net assets per share (yen)204.83——
164.32(Note) Figures for the 17th and prior terms have been omitted as the Company began preparing consolidated financial statementsfrom the 18th term.

(4) Issues to be addressed by the Group3

The Group is committed to focusing on the following key management objectives.
(i) Further expansion of the pipeline
In order to enhance the enterprise value as a specialty pharmaceutical company, we need to expand the pipeline
through ongoing in-licensing of new drug candidates for development.
The Group is conducting or planning development of the following anticancer agents: SyB L-0501, SyB L-1101,
SyB C-1101, SyB L-1701, SyB L-1702, and antiviral drug SyB V-1901. Currently we are in discussion withcounterparties regarding the in-licensing of several new drug candidates, and will continue with active efforts toin-license new drug candidates for development in order to further expand our pipeline.
(ii) Life cycle management of products in the existing pipeline
In order to enhance the enterprise value, not only in-licensing new drug candidates but also promoting productlife cycle management is important. Therefore, it is critical to maximize returns from each drug under development
through indication expansion after the in-licensed drugs’ initial approval.
TREAKISYM® is approved for manufacturing and marketing in Japan for the indications of recurrent/refractory
low-grade non-Hodgkin’s lymphoma and mantle cell lymphoma, chronic lymphocytic leukemia, and first-line
treatment of low-grade non-Hodgkin’s lymphoma and mantle cell lymphoma. TREAKISYM® was also granted
approval for recurrent/refractory diffuse large B-cell lymphoma (r/r DLBCL) in March 2021. In addition, theCompany in-licensed the RTD formulation and RI injection of TREAKISYM® from Eagle Pharmaceuticals inefforts to maximize the business value of TREAKISYM® by promoting the product life cycle management of the
product. For the RTD formulation, the Company obtained manufacturing and marketing approval in September
2020, and launched the product in January 2021. For the RI injection, the Company filed a partial change
application in May 2021, and obtained approval in February 2022.
With respect to rigosertib, U.S. licenser Onconova had been conducting a global Phase III study (INSPIRE
study) of the drug in patients with myelodysplastic syndromes (MDS), but in August 2020, it announced that the
primary endpoint of the study—improved overall survival compared to physician’s choice of treatment—had notbeen met. The Company is in charge of clinical development in Japan and is reviewing ways to utilize findings
from the additional analysis of the INSPIRE study in future development of rigosertib.
With the aim of maximizing the business value of rigosertib and TREAKISYM®, the Company intends to
conduct joint research with the University of Tokyo, to investigate the efficacy of the drugs used in combination
as well as used in combination with other existing drugs and look for new indications.
The Company is pressing forward with the global development of antiviral drug brincidofovir targeting
adenovirus infections occurring after hematopoietic stem cell transplantation and BK virus infections occurring
after kidney transplantation, areas with a high unmet medical need, ahead of any other indications. In the PhaseIIa clinical trial targeting adenovirus infections associated with hematopoietic stem cell transplantation, in May
2023, proof of concept (PoC) was established in humans for the intravenous formulation of brincidofovir. For thePhase II clinical trial of brincidofovir targeting BK virus infections associated with kidney transplantation, due todelays in patient enrollment against the study plan, the Company will again consider revising the study protocol
with researchers. It has also begun to explore the potential of the drug in treating virus-induced cancers. We aim
to maximize earnings through managing the lifecycle of our products as we transform into a specialty
pharmaceutical company with the capacity to expand into global markets. Further, in March and April 2023, weentered into a Cooperative Research and Development Agreement (CRADA) with two research institutions
belonging to the US National Institutes of Health. Moreover, by accumulating data from joint research with Tufts
University in the US, we will investigate the effectiveness of brincidofovir in treating various dsDNA virus
infections in humans and expand its indication to multiple viral infections. In doing so, we aim to maximize themarket and business value of brincidofovir.
(iii) Countermeasures to generic drugs
In February 2022, four pharmaceutical companies obtained approval to manufacture and market genericversions of the RTD formulation of TREAKISYM®, and two of the four companies began sales of the genericversions. The two companies then obtained approval for the rapid infusion (RI) formulation of TREAKISYM®
and began selling it. Given the potential infringement of the licensor Eagle Pharmaceuticals, Inc.’s patent and theexclusive patent license granted to SymBio, the Company, after discussing with Eagle, jointly filed a lawsuit with
Eagle against Pfizer Japan Inc. and Towa Pharmaceutical Co., Ltd. in December 2022, seeking an injunction
against the manufacture and sale of the generic versions of TREAKISYM® and claiming damages based on patent
infringement. The lawsuit against the two companies is still ongoing, and the Company is working tirelessly toprotect and preserve its rights.
(iv) Global expansion for further growth
In addition to Japan, the Group identifies China, South Korea, Taiwan, and Singapore as strategic regions and4has moved forward with business development in Asia. However, with expanding medical expenditures due to theaging population in Japan, and the advent of the “era of generic drugs comprising 80% of all drugs dispensed” asa governmental policy of Japan, the business environment for innovative drug developers is expected to remain
extremely challenging. Such a policy may also be implemented by other Asian countries.
Under these circumstances, the Group will promote global expansion aiming for further growth. Utilizing its
experience fostered through its business in Asia, the Company will search, evaluate, and negotiate concerning new
drug candidates that can follow antiviral drug brincidofovir in order to acquire their rights on a global scale.
(v) Securing personnel
The Group places the highest priority on personnel as the Company’s principal management resource. Without
talent, we cannot make superior achievements in terms of exploring, developing, and providing information
concerning new drugs; nor can we roll out these new drugs on a global scale. We have been continually recruiting
talented people; especially after being listed, we have recruited the best and brightest people in order to strengthen
the management organization. Going forward, we plan to continue to further strengthen our human resources by
providing on-the-job training and employee development programs.
(vi) Financial issue
It is necessary for the Group to raise funds required for business activities such as R&D expenditures as pipeline
development and global business expansion progress and as drug candidates increase in number.
Therefore, we make every effort to further strengthen the financial base by continually diversifying the methodof fund raising and curtailing costs through tight budget control.

(5) Major business activities (as of December 31, 2023)

The Group regards underserved therapeutic areas that lack the development of new drugs, despite significant
unmet medical needs, as business opportunities. We develop new drugs with a primary focus on the treatment ofrare diseases, mainly in the areas of oncology, hematology, and multiple viral infections, and conduct integrated
business activities that encompass search for new drug candidates, development, manufacturing, and sales.

(6) Main office and employees(i) Main office (as of December 31, 2023)
Name

Location

Main office

Minato-ku, Tokyo(ii) Employees (as of December 31, 2023)
Classification

Number of employees

Male

74

Female35

Total or average

109

Increase or decrease
from previous fiscal
year-end-18

Average age (years)

Average number ofyears of service

55.2

4.8

+5

51.9

4.7

-13

54.2

4.8

(Notes) 1. Number of employees refers to full time employees.
2. The above number of employees does not include 20 temporary staff (none at consolidated subsidiary).

(7) Status of significant subsidiaries
Company name

CapitalVoting rights ratio

Main business

SymBio Pharma USA, Inc.

USD1.00

100.0%

Pharmaceutical R&D(8) Main lenders and amount of borrowings (as of December 31, 2023)
Not applicable.

52. Matters Related to Stock (as of December 31, 2023)(1) Total number of authorized shares
Common stock: 65,000,000 shares(2) Total number of shares outstanding

Common stock: 42,190,361 shares (excluding 87,720 shares of treasury stock)(3) Number of shareholders
37,176(4) Major shareholders (10 largest)
Name of shareholder
Fuminori Yoshida
BofAS Inc. Segregation Account
Norihiro Kuroda
Sukenori Ito
Matsui Securities Co., Ltd.
Nomura Securities Co., Ltd.
State Street Bank and Trust Company 510643
SBI Securities Co Ltd.
BNP Paribas London Branch for Prime Brokerage
Clearance Acc for Third Party
Morgan Stanley MUFG Securities Co., Ltd.

Number of shares held
1,179,700
1,009,775
610,000
430,000
271,000
270,030
258,000
255,980

Shareholding ratio
2.8%
2.4%
1.4%
1.0%
0.6%
0.6%
0.6%
0.6%

249,700

0.6%

224,8190.5%(Notes) Shareholding ratio (%) indicates the percentage of shares outstanding held. Shares outstanding is equal to the number ofshares issued minus treasury shares.).

63. Matters Related to Share Acquisition Rights(1) Share acquisition rights held by the Company’s Officers that were issued as compensation
for services (as of December 31, 2023)
The 48th warrant
by resolution of the Board of
Directors meetingon March 28, 2019

The 52nd warrant
by resolution of the Board of
Directors meetingon March 26, 2020

The 54th warrant
by resolution of the Board of
Directors meetingon March 24, 2021

Number of share acquisitionrights3,150 units

4,600 units

1,630 units

Number of shares to be issued
upon the exercise of shareacquisition rights (Note 3)

78,750 shares

115,000 shares

40,750 shares

19,400 yen per unit

8,100 yen per unit

29,225 yen per unit

1 yen per share

1 yen per share

1 yen per share

From: March 30, 2022
To: March 29, 2029

From: March 27, 2023
To: March 26, 2030

From: March 25, 2024
To: March 24, 2031——

1,000 units (1 holder)
25,000 shares

250 units (1 holder)
6,250 shares

400 units (1 holder)
10,000 shares

450 units (3 holders)
11,250 shares

The 56th warrant
by resolution of the Board of
Directors meetingon March 29, 2022

The 59th warrant
by resolution of the Board of
Directors meetingon March 23, 2023

Number of share acquisitionrights3,200 units

3,160 units

Number of shares to be issued
upon the exercise of shareacquisition rights (Note 3)

80,000 shares

79,000 shares

Amount paid for shareacquisition rights (Note 1) (Note 3)

17,200 yen per unit

11,000 yen per unit

Value of property to becontributed upon the exerciseof each share acquisition right1 yen per share

1 yen per share

Period in which exercise ofshare acquisition rights ispossible

From: March 30, 2025
To: March 29, 2032

From: March 24, 2026
To: March 23, 2033

Status of possession by
Directors (excluding Audit &Supervisory Committee
Members and Outside
Directors) (Note 3)

2,000 units (1 holder)
50,000 shares

2,560 units (1 holder)
64,000 shares

Amount paid for shareacquisition rights
Value of property to becontributed upon the exerciseof each share acquisition right
Period in which exercise ofshare acquisition rights ispossible
Status of possession by
Directors (excluding Audit &Supervisory Committee
members and Outside
Directors) (Note 3)
Status of possession by
Outside Directors (excluding
Audit & Supervisory
Committee Members)

Status of possession by
450 units (3 holders)
600 units (3 holders)Outside Directors (excluding
Audit& Supervisory
11,250 shares
15,000 shares
Committee Members) (Note 3)(Notes) 1. The person who receives the allotment of share acquisition rights shall offset the amount to be paid for the relevant shareacquisition rights against cash compensation equivalent to the amount.
2. There are no share acquisition rights held by Directors serving as Audit & Supervisory Committee Members.
3. The Company conducted a 1-for-4 consolidation of common shares on July 1, 2019. Number of shares to be issued upon7

the exercise of share acquisition rights and exercise price have been adjusted accordingly.

(2) Share acquisition rights distributed to the Company’s employees as compensation forservices during the fiscal year under review (as of December 31, 2023)
The 60th warrant
by resolution of the Board of
Directors meeting on March
23, 2023
Number of share acquisitionrights10,801 units

Number of shares to be issued
upon the exercise of shareacquisition rights

270,025 shares

Amount paid for shareacquisition rights (Note 2)

11,000 yen per unit

Value of property to becontributed upon the exercise ofeach share acquisition right1 yen per share

Period in which exercise of shareacquisition rights is possible

From: March 24, 2026
To: March 23, 2033

Status of allotment to theCompany’s employees (Note 1)

7,986 units (85 holders)
199,650 shares(Notes) 1. Of the share acquisition rights mentioned above, 2,815 units (70,375 shares) have been forfeited due to theretirement or resignation of employees.
2. The person who receives the allotment of share acquisition rights shall offset the amount to be paid for the relevant
share acquisition rights against cash compensation equivalent to the amount.

(3) Other important matters concerning share acquisition rights (as of December 31, 2023)

The details of the issue of share acquisition rights via third-party allotment were determined as below byresolution of the Board of Directors at a meeting held on May 16, 2022.
The 58th warrant by resolutionof the Board of Directors
meeting
on May 16, 2022

Allotee

CVI INVESTMENT, Inc.

Number of share acquisitionrights

20,000 units

Number of shares to be issued
upon the exercise of shareacquisition rights

2,000,000 shares

Amount paid for shareacquisition rights

688 yen per unit

Value of property to becontributed upon the exercise ofeach share acquisition right

261 yen per share

Period in which exercise of shareacquisition rights is possible

From: June 2, 2022
To: June 1, 2027

8

4. The Company’s Officers (as of December 31, 2023)(1) Names of Directors and Audit & Supervisory Board Members
Company position

Name

Responsibility and significant concurrent position

Representative Director

Fuminori Yoshida

Representative Director, President and CEO

Director

Shigetoshi Matsumoto

Audit Practice Counselor, Japan Audit &Supervisory Board Members Association

Director

Bruce David Cheson

Doctor, Cancer and Blood Disorders Center

Director

Eiji Ebinuma

Partner, Tanabe & Partners
Outside Director, Rakuten Bank, Ltd.

Director (full-time Audit &Kiyoshi Watanabe
Supervisory Committee Member)
Director (Audit & Supervisory
Committee Member)

Kesao Endo

Representative, Endo C.P.A. Firm
Outside Director, Careerlink Co., Ltd.
Representative Partner, ABS Audit Corp.

Director (Audit & Supervisory
Committee Member)

Yasuhiro Tamo

Partner, Nomura & Partners(Notes) 1. Shigetoshi Matsumoto, Bruce David Cheson, Eiji Ebinuma, Kiyoshi Watanabe, Kesao Endo, and Yasuhiro Tamo are
Outside Directors.
2. The Company has designated Outside Directors Shigetoshi Matsumoto, Eiji Ebinuma, Kiyoshi Watanabe, and Kesao
Endo as independent officers pursuant to the provisions of the Tokyo Stock Exchange (TSE) and registered them assuch with the TSE.
3. Director (Audit & Supervisory Committee Member) Kesao Endo possesses deep insight in finance and accounting,which he gained through his profession as a certified public accountant.
4. The Company has appointed Outside Director Kiyoshi Watanabe as full-time Audit & Supervisory Committee
Member to enable gathering of information from Directors (excluding Audit & Supervisory Committee Members)
and information sharing at important meetings, as well as sufficient cooperation between the Internal Audit Division
and Audit & Supervisory Committee, with the aim of strengthening the Committee’s audit and supervisory functions.
5. The Company has adopted the Corporate Officer System. The Corporate Officers who do not hold concurrent
positions as Directors are as follows:
Vice President and Corporate Officer
Takaaki Fukushima
Corporate Officer
Koji Fukushima
Corporate Officer
Kozo Yoshida
Corporate Officer
Hiroyuki Hotta
Corporate Officer
Stephane Berthier(2) Summary of the contents of the liability limitation agreement

The Company has entered into a liability limitation agreement with all Directors excluding those engaged inbusiness execution based on the provisions of Article 427, Paragraph 1 of the Companies Act. Under the terms of
the agreement, in the event that a Director has caused loss to the Company due to negligence of his or her duties,
and if the Director performed his or her duties in good faith and without gross negligence, the Director’s liability
will be limited to the higher of 1,000,000 yen or the minimum liability amount set forth in Article 425, Paragraph 1of the Companies Act.

(3) Summary of the contents of the indemnification contract

The Company has entered into an indemnification contract with Fuminori Yoshida, Shigetoshi Matsumoto, Bruce
David Cheson, Kiyoshi Watanabe, Kesao Endo, and Yasuhiro Tamo as stipulated in Article 430-2, Paragraph 1 of
the Companies Act. In addition to expenses related to shareholder lawsuits that may arise due to misconduct, theindemnification contract covers a wide range of expenses that individual directors and the Company may incur,
including the costs of dealing with criminal proceedings and public investigations outside Japan.

(4) Directors and Officers Liability Insurance Policies

The Company has obtained Directors and Officers Liability Insurance Policies covering the Directors andCorporate Officers of the Company and its subsidiaries.
The aforementioned insurance is payable as indemnification for losses suffered by the insureds as a result of alegal action brought for alleged wrongful acts in their capacity as Directors and Corporate Officers. However, theinsurance policies exclude coverage for claims arising out of fraudulent or dishonest acts conducted knowing thatthey were in violation of the laws and regulations. By establishing such exclusions, we have taken steps to ensure

9the appropriateness of the execution of duties by officers is not compromised.
Costs of premiums paid on the aforementioned insurance are borne entirely by the Company.

(5) Compensation of members of the Board of Directors(i) Matters related to the policy for determining the details of individual compensation for Directors
The Company’s basic policy is to set the compensation for Directors at an appropriate level in consideration of
their responsibilities. The amount of compensation for Directors does not include the share of salary as an
employee for Directors who are concurrently serving as employees.
The Audit & Supervisory Committee has the authority to make decisions on the policy concerning thedetermination of the amount of compensation, or the calculation method thereof, for Directors serving as Audit &Supervisory Committee Members. The contents of such authority and the scope of discretion shall be determinedby the Audit & Supervisory Committee with the consent of all of its members, within the limit of the total amountdetermined at the General Meeting of Shareholders.
1. Basic policy
The compensation system for Directors (excluding those serving as Audit & Supervisory Committee
Members) shall be linked to shareholders’ profit to function sufficiently as an incentive for the sustainableenhancement of corporate value. Furthermore, the compensation of individual Directors (excluding those serving
as Audit & Supervisory Committee Members) shall be determined at an appropriate level based on the
responsibilities of each position, and compensation shall consist of basic compensation as fixed compensation,
performance-linked compensation, and stock-based compensation.
2. Policy on determination of the amount of basic compensation (monetary compensation) of individual Directors(excluding those serving as Audit & Supervisory Board Members; including policies on determining thetiming or conditions for granting compensation)
The basic compensation for Directors (excluding those serving as Audit & Supervisory Committee Members)of the Company shall be a monthly fixed compensation, and shall be determined based on a comprehensive
consideration of the role, responsibilities, years of service taking into account the level of compensation at othercompanies, the Company’s business performance, and the level of employee salaries. In making the decision, theCompany confirms that the decision is in line with the above policy, based on the report of the Nomination andCompensation Committee, which is composed of a majority of Outside Directors, with an Outside Director
serving as the chairperson. The decision is then delegated to the Representative Director by a resolution of theBoard of Directors. In addition, the Company ensures reasonableness by delegating the decision to theRepresentative Director within the scope of the report that has been appropriately reviewed by the Nomination
and Compensation Committee.
3. Policy on determining the ratio of performance-linked compensation and other compensation of Directors(excluding those serving as Audit & Supervisory Committee Members)
Performance-linked compensation may be linked to the Medium-Term Management Plan, etc. to raiseawareness of the need to improve business performance, and compensation may be paid in a way that links
business performance to compensation, or stock options may be granted. The ratio of performance-linked
compensation to other compensation shall be considered by the Nomination and Compensation Committee. The
Board of Directors shall delegate the President and Representative Director to respect the content of the reportof the Nomination and Compensation Committee and to determine the content of compensation for eachindividual Director (excluding those serving as Audit & Supervisory Committee Members). The ratio ofcompensation for Directors who engage in business execution is considered based on the level of compensation
benchmarked to companies of a similar scale as the Company or companies in related industries and businesscategories.
4. Matters concerning the determination of the content of individual compensation of Directors (excluding thoseserving as Audit & Supervisory Committee Members)
The amount of compensation and stock options for each individual shall be reviewed by the Nomination andCompensation Committee. The Board of Directors shall delegate the Representative Director, President and CEO
to make decisions while respecting the content of the report of the Nomination and Compensation Committee.
Based on the delegation by the resolution of the Board of Directors, Representative Director, President and CEO
Fuminori Yoshida decides the amount, timing, and method of payment of compensation to each Director for thecurrent fiscal year. The above authority was delegated to Fuminori Yoshida, as the Company deems it appropriate
for the Representative Director, President and CEO to make decisions on the contents of compensation in orderto make decisions that take into account the evaluation of each Director’s business performance while taking a

10

comprehensive view of the Company’s performance.
(ii) Reasons for the Board of Directors’ determination that the contents of the compensation of Directors(excluding those serving as Audit & Supervisory Committee Members) for the fiscal year under review is in linewith the said policy
In determining the compensation for each individual Director (excluding those serving as Audit & Supervisory
Committee Members), the Board of Directors has determined that the contents of the decision are in line with theabove policy, given that the Representative Director makes the decision in line with the said policy.
(iii) Matters concerning the resolution of the General Meeting of Shareholders regarding compensation
At the 17th Ordinary General Meeting of Shareholders held on March 29, 2022, it was resolved that the
maximum annual amount of compensation for Directors (excluding those serving as Audit & Supervisory
Committee Members) shall be 130 million yen (40 million yen for Outside Directors; does not include employee
salaries for Directors concurrently serving as employees). The number of Directors (excluding those serving as
Audit & Supervisory Committee Members) at the conclusion of the said General Meeting of Shareholders wasfive (5), including three (3) Outside Directors.
Separate from the monetary compensation, it was resolved at the said General Meeting of Shareholders that the
maximum annual amount of stock options granted to Directors (excluding those serving as Audit & Supervisory
Committee Members) shall be 90 million yen (30 million yen for Outside Directors), and that the maximum
number of stock acquisition rights granted within a year from the date of the General Meeting of Shareholders ofeach fiscal year shall be 3,200 units (does not include employee salaries for Directors concurrently serving as
employees). The number of Directors (excluding those serving as Audit & Supervisory Committee Members) at
the conclusion of the said General Meeting of Shareholders was five (5), including three (3) Outside Directors.
At the 17th Ordinary General Meeting of Shareholders held on March 29, 2022, it was resolved that the
maximum annual amount of monetary compensation for Directors serving as Audit & Supervisory Committee
Members shall be 30 million yen, and that the specific amount and timing of payments shall be determined bydiscussions among Directors serving as Audit & Supervisory Committee Members. The number of Directors
serving as Audit & Supervisory Committee Members at the conclusion of the said General Meeting of Shareholders
was three (3).
(iv) Total amount of compensation for Directors and Audit & Supervisory Board Members

Classification
Directors, excluding
Audit & Supervisory
Committee Members(Outside Directors)
Directors serving as
Audit & Supervisory
Committee Members(Outside Directors)

Total amount ofcompensation(thousand yen)

Total amount of compensation by type (thousandyen)
PerformanceBase
Non-monetary
linkedcompensationcompensationcompensation

Number of
eligible
officers

104,132(33,050)

64,501(23,791)―(―)

39,631(9,259)4(3)26,283(26,283)

26,283(26,283)

―
(―)

―
(―)

3
(3)

(Notes) 1. The amount of compensation for Directors does not include the share of salary as an employee for Directors who areconcurrently serving as employees.
2. The contents of non-monetary compensation are the amount of expenses recorded during the fiscal year under review
related to stock acquisition rights granted as stock options.

11(6) Matters Concerning Outside Directors and outside members of the Audit & Supervisory
Board(i) Status of main activities during the fiscal year under review
Position

Director

Director

Director

Director (fulltime Audit &Supervisory
Committee
Member)Director (Audit& Supervisory
Committee
Member)Director (Audit& Supervisory
Committee
Member)Name

Shigetoshi Matsumoto

Bruce David Cheson

Eiji Ebinuma

Kiyoshi Watanabe

Kesao Endo

Yasuhiro Tamo

Status of attendanceat the Board of
Directors meetings

Status of attendanceOpinions at the Board of Directors
at the Audit &meetings, the Audit & Supervisory Board
Supervisory
meetings, and the Audit & Supervisory
Committee meetings
Committee meetings

21 out of 21(100%)

21 out of 21(100%)

21 out of 21(100%)

21 out of 21(100%)

21 out of 21(100%)

21 out of 21(100%)—Mr. Matsumoto expressed opinionsfrom an objective perspective
independent from the Company’s
management engaged in business
operations, leveraging his extensive
knowledge and experience with thebusiness practices of companies in thesame industry and with auditing work.

—

Dr. Cheson expressed opinions from an
objective perspective independent fromthe Company’s management engaged inbusiness operations, leveraging his
extensive knowledge and experience asa physician.

—Mr. Ebinuma expressed opinions froman objective perspective independent
from the Company’s management
engaged in business operations, using
his knowledge and experience atfinancial institutions and as an attorneyat law, mainly in the area of labor law,and his extensive knowledge as an
Outside Director.

18 out of 18(100%)

Mr. Watanabe actively expressed
opinions from an objective and fair
perspective based on his extensive
experience and knowledge as an audit &supervisory board member at listedcompanies in order to achieve highly
effective managerial supervision.

18 out of 18(100%)

Mr. Endo actively expressed opinionsfrom a neutral perspective based on thespecialized knowledge and extensive
experience he accumulated as a certified
public accountant in order to achieve
highly effective managerial supervision.

18 out of 18(100%)

Mr. Tamo expressed opinions from an
objective perspective independent fromthe Company’s management engaged inbusiness operations, based on his
knowledge and experience as an
attorney at law, mainly in the area ofcorporate law.

(ii) Summary of duties performed in roles expected to be fulfilled by Outside Directors
1. Shigetoshi Matsumoto and Eiji Ebinuma have been involved as members of the Nomination andCompensation Committee from an objective and neutral standpoint in the selection of candidates for theCompany’s Board of Directors and the determination of compensation for Directors.
2. Bruce David Cheson has contributed to the enhancement of the Company’s group-wide governance andsupervisory functions from a global perspective, and to the monitoring and supervision of the managementof the Company from an independent standpoint.
3. Kiyoshi Watanabe has contributed to the enhancement and reinforcement of the Company’s corporate
governance and to the monitoring and supervision of the Company’s management from an independent
standpoint, leveraging his track record at financial institutions and his broad experience and deep insight inmanagement.
4. Kesao Endo has monitored and supervised the Company’s management and contributed to strengthening its
supervisory function over business execution from an independent standpoint, drawing on his expertise and12abundant experience as a certified public accountant.
5. Yasuhiro Tamo has monitored and supervised the Company’s management and contributed to strengthening
the supervisory function of business execution from an independent standpoint, based on his knowledge andextensive experience as an attorney at law, mainly in the area of corporate law.

13

5. Status of Accounting Auditor(1) Name of accounting auditor
Ernst & Young ShinNihon LLC(2) Summary of the contents of the liability limitation agreement
Not applicable.

(3) Summary of the contents of the compensation agreement
Not applicable.

(4) Amount of compensation
Amount of compensation paid to the accounting auditor concerning the fiscal
year under review
Total amount of monetary and other property benefits to be paid by the Company
and its subsidiary

Amount paid
33,300 thousand yen
33,300 thousand yen(Notes) 1. Reasons for the Audit & Supervisory Committee’s approval of the amount of compensation to be paid to theaccounting auditor
The Audit & Supervisory Committee verified the contents of the audit planning by the accounting auditor, performanceof its duties in previous years, and status of planning and actual performance, and as a result of a careful review on theadequacy of the amount of compensation for the fiscal year under review, has approved the amount of compensation
to be paid to the accounting auditor, pursuant to the provisions of Article 399, Paragraph 1 of the Companies Act.
2. The amounts of compensation for audits paid in accordance with the Companies Act, and the audits conducted inaccordance with the Financial Instruments and Exchange Act, are not distinguished in the contract agreement between
the Company and the accounting auditor. It is not possible to distinguish between compensation paid for these two
types of audits; therefore the total amount thereof is stated.

(5) Policies for dismissal or non-reappointment of the accounting auditor

When it is deemed necessary to dismiss (or not reappoint) the accounting auditor for reasons relating to theaccounting auditor’s execution of duties, the Audit & Supervisory Committee shall determine the contents of a
proposal to be presented to a General Meeting of Shareholders in respect of the dismissal (or non-reappointment).
In addition, when the accounting auditor falls under any of the items of Article 340, Paragraph 1 of the Companies
Act, the Audit & Supervisory Committee shall dismiss the accounting auditor with the consent of all members of
the Audit & Supervisory Committee. If this is the case, an Audit & Supervisory Committee Member selected by the
Audit & Supervisory Committee shall report the dismissal of the accounting auditor and the reasons for suchdismissal at the first General Meeting of Shareholders convened after the dismissal.

14

6. System to Ensure the Appropriateness of Operations(1) The corporate system to ensure that Directors and employees comply with laws andordinances, as well as the Articles of Incorporation, in the process of performing their duties(i) Dissemination and thorough implementation of management philosophy
In order to implement its management philosophy, the Company has established for the Group a Corporate
Action Charter and standards of conduct to which all Company members are expected to adhere. The Company
informs all executives and staff regarding these policies and asks for each member’s understanding regarding thespirit of these regulations and for thorough compliance with the same. All business activities of the Company arebased on the premise of compliance with laws and ordinances and the maintenance of corporate ethical standards(below, “compliance”).
(ii) Establishment of internal control committee
The Company develops internal control systems and employs other measures to support thorough compliance,risk management, and financial reporting. In addition, an internal control committee has been established at theCompany to ensure the Group’s complete observance of laws and ordinances, the Articles of Incorporation, andother internal regulations through exhaustive supervision.
(iii) Establishment of internal audit office, etc.
The Company has established an internal audit office as an independent unit under the direct supervision of the
President and appoints internal auditors to its subsidiary as necessary. Through regular audits and related activities,
objective assessments are made as to the effectiveness and efficiency of business, the reliability of various financial
reports, safeguarding of assets, compliance status of operations, and the appropriateness and effectiveness ofcorporate risk management policies. When necessary, the Company ensures the efficacy of internal controls by
accepting advice and proposals concerning recommended improvements to the maintenance and operation ofsystems.
(iv) Establishment of compliance reporting and consultation hot-lines
The Company has established compliance reporting and consultation hot-lines both internal to and outside theCompany, and has designated compliance liaisons to respond to reports and requests for consultation from
employees of the Group, and to identify and resolve any compliance issues at the earliest stage possible.
(v) Systems for securing reliable financial reporting
The Company establishes internal control systems and oversees their appropriate operation in order to ensure
reliable financial reporting for the Group.

(2) Corporate system for maintenance and control of information regarding the performance of
duties by Directors

The Group appoints an individual to be responsible for the general management of corporate documents and to
appropriately maintain and otherwise control all important documents containing information as to the performanceby Directors of their duties in addition to legally required records of proceedings of Shareholders meetings andBoard of Directors meetings, as provided in laws and ordinances as well as in the Company’s own “Rules for theManagement of Documents.”(3) Corporate system for control of risk of loss, including in-house rules for such control

The Group practices risk control under its basic risk control policy and related rules. The Internal Control
Committee is responsible for the supervision and promotion of risk management. Additionally, the Company willswiftly respond to emergency situation by establishing an emergency response headquarters managed by the
Representative Director and President.

(4) Corporate system to ensure the efficient performance of duties by Directors(i) Directors and employees perform their duties in appropriate and efficient accordance with the “Rules for the
Board of Directors” and “Rules for the Internal Approvals,” as well as other related regulations.
(ii) The Company regularly holds Executive Management Committee meetings pursuant to the “Rules for the
Executive Management Committee” and reviews key proposals for the purpose of supporting careful and timely
decision-making from the Representative Director and President.

15

(iii) The Company develops mid- to long-term business plans and operates and expands its business in accordancewith these plans. In addition, the Company establishes numerical targets within its business plans for each fiscal
year and, through monthly closings, manages progress toward these targets while making relevant reports to
Directors.

(5) Basic policy against anti-social forces and their associates

The Group resolutely opposes anti-social forces and their associates that pose a threat to the order or safety ofsociety and forbids their participation in any and all business activities.

(6) Assistant to Audit & Supervisory Committee Members

Audit & Supervisory Committee Members may request that the Representative Director and President appoint an
employee to act as an assistant to Audit & Supervisory Committee Members. Upon receiving such a request, theRepresentative Director and President shall make an appropriate appointment.

(7) Ensuring the independence of assistants to Audit & Supervisory Committee Members from
Directors (excluding those serving as Audit &Supervisory Committee Members) and theeffectiveness of the Audit & Supervisory Committee Members’ instructions to employees(i) Assistants to Audit & Supervisory Committee Members shall not receive instructions concerning theirsupporting duties from anyone other than Audit & Supervisory Committee Members.
(ii) Matters such as personnel evaluation and transfer and disciplinary actions concerning employees that assist
Audit & Supervisory Committee Members shall be subject to the prior consent of the Audit & Supervisory
Committee.

(8) Corporate system for Directors and employees to report to the Audit & Supervisory
Committee; corporate system for other reports to the Audit & Supervisory Committee; andcorporate system to ensure the efficient performance of audits by the Audit & Supervisory
Committee(i) Any Director or employee shall promptly inform the Audit & Supervisory Committee if and when he/she
becomes aware of any circumstance that threatens to cause any significant damage to, or could adversely affect,
the Company.
(ii) Audit & Supervisory Committee Members may participate in all matters that they consider important in termsof gaining a better understanding of decision-making processes, conditions, and statuses of the Company’sbusinesses. Accordingly, they may attend Board of Directors meetings, Executive Management Committee
meetings, and other important meetings. In addition, they are permitted to view key decision-making documents
related to these meetings.
(iii) Audit & Supervisory Committee Members may individually interview Directors and employees in key
positions of responsibility to obtain information regarding the management conditions of the Company’sbusinesses.
(iv) Audit & Supervisory Committee Members will regularly exchange opinions with the Representative Director
and President and the accounting auditor.
(v) The Company will not apply any sort of unfavorable treatment or unjust punishment to individuals who makereports to the Audit & Supervisory Committee.

(9) Matters related to the treatment of expenses or obligations associated with the execution ofduties of Audit & Supervisory Committee Members (limited to the execution of duties of Audit& Supervisory Committee), including the procedures for prepayment or reimbursement of such
expenses(i) The Company will respond without delay to claims for the prepayment of expenses made by Audit &Supervisory Committee Members under Article 399-2 of the Companies Act, accepting responsibility for
associated expenses and processing related obligations, except in cases in which these have been determined
unnecessary for the execution of the duties of Audit & Supervisory Committee Members.
(ii) The Company authorizes and shoulders expenses incurred when Audit & Supervisory Committee Members
seek opinions or advice from external experts, including attorneys and certified public accountants, if it is foundnecessary for the execution of their duties.

(10) System to ensure appropriate operations of the corporate organization consisting of the16Company and its subsidiary

The Company will take the following measures to properly manage and operate the Group.
(i) We will apply SymBio Charter of Corporate Conduct to our subsidiary, and strive to ensure thorough awarenessof the Charter, along with the Codes of Conduct of subsidiary created based on the Charter.
(ii) The Company will build and operate an appropriate internal control system related to the following, to enableappropriate management and business execution of the Group.
1) System for reporting matters related to the execution of duties of subsidiary Directors to the Company
2) Regulations and other systems for risk management and loss control of the subsidiary3) System to ensure that Directors of subsidiary are executing their duties efficiently
4) System to ensure that Directors and employees of subsidiary are executing their duties in compliance with laws
and regulations and the Articles of Incorporation

7. Summary of the Status of System to Ensure the Appropriateness of Operations(i) The Company is striving to foster a culture of compliance across the organization and ensure appropriate

operation of internal control systems through its communications with Directors and employees, andthrough publication of information such as the basic policies regarding internal control systems,
corporate compliance conduct principles, basic risk control policies, and the whistleblowing systemmanual on the Company’s intranet bulletin board, etc.
(ii) At the Board of Directors meetings of the Company, Outside Directors (including Directors serving as Audit &Supervisory Committee Members) participate in resolutions from an independent standpoint and monitor andsupervise the management. Each Audit & Supervisory Committee Member carries out management audits aswell.
(iii) Full-time Audit & Supervisory Committee Members attend important meetings such as the Board of Directors
meetings as well as Executive Management Committee meetings, and exchange views with representative
directors monthly.

17

Consolidated Balance Sheet(As of December 31, 2023)
Item

AmountItem(Assets)(Unit: thousands of yen)AmountMerchandise and finished goods
Supplies
Advance payments
Prepaid expenses

231,650380
271,516
119,271(Liabilities)
Current liabilities
Accounts payable
Provision for office relocation
expenses
Income taxes payable
Other
Non-current liabilities
Provision for retirement benefits

Other

29,607

Total liabilities

Non-current assets
Property, plant and equipment

87,716(Net assets)
Shareholders’ equity

Current assets
Cash and deposits
Accounts receivable–trade

Buildings
Tools, furniture and fixtures
Accumulated depreciation
Investments and other assets
Leasehold and guarantee deposits

Total assets

8,082,526
6,517,007
913,094－
237,233
105,107(342,341)
87,71687,716

8,170,243(Note) Amounts of less than one thousand yen are rounded down.

18

Capital stock
Capital surplus
Retained earnings
Treasury shares
Accumulated other comprehensive
incomeForeign currency translation
adjustment
Share acquisition rights

956,625
853,825
16,784
18,47467,5403,709
3,709
960,334
6,938,849
17,952,692
17,927,584(28,852,303)(89,122)(5,985)(5,985)
277,044

Total net assets

7,209,909

Total liabilities and net assets

8,170,243

Consolidated Statement of Income
January 1, 2023
( toFrom
December 31, 2023 )Item(Unit: thousands of yen)AmountI. Net sales

5,589,708

II. Cost of goods sold

1,178,694

Gross profit

4,411,013

III. Selling, general and administrative expenses

5,222,681

Operating loss

(811,668)

IV. Non-operating income
Interest income

11,972Foreign exchange gains
Other

117,106
3,711

132,789

V. Non-operating expenses
Commission fee
Share issuance cost

12,728
11,478Provision for office relocation expenses
Loss on retirement of fixed assets

25,176
7,868

Ordinary loss
VI. Extraordinary income

57,252(736,130)

Gain on reversal of share acquisition rights

101,333

101,333

VII. Extraordinary loss
Impairment loss

560,590

Loss before income taxes
Income taxes–current

22,700

Income taxes–deferred

744,728

560,590(1,195,387)
767,429

Loss(1,962,817)

Loss attributable to non-controlling interests
Loss attributable to owners of parent－(1,962,817)(Note) Amounts of less than one thousand yen are rounded down.

19Consolidated Statement of Changes in Equity
January 1, 2023
( Fromto December 31, 2023 )Balance as of January 1, 2023

Changes during period
Issuance of new shares

Retainedearnings

Capital surplus

17,548,459

17,523,357

346,200

346,200

692,400

58,03258,032116,065404,232

404,226

Balance as of December 31, 2023

17,952,692

17,927,584(26,889,486)

Treasury shares

Total
Shareholders’equity8,094,176

Share capitalIssuance of new shares(exercise of share acquisitionrights)Loss attributable to owners ofparentPurchase of treasury shares
Disposal of treasury shares
Net changes of items otherthan shareholders’ equity
Total changes during period(88,154)(1,962,817)

243

243

(1,962,817)
(996)
28

(996)
21

(1,962,817)(968)(1,155,326)(28,852,303)(89,122)

6,938,849(6)

Accumulated other comprehensive
incomeTotal
Foreignaccumulated
currency
othertranslation
comprehensive
adjustment
incomeBalance as of January 1, 2023

(Unit: thousands of yen)
Shareholders’ equity

Share
acquisitionrightsTotal net assets

411,672

8,506,092

Changes during period
Issuance of new shares
Issuance of new shares(exercise of share acquisitionrights)Loss attributable to owners ofparentPurchase of treasury shares
Disposal of treasury shares

692,400
116,065(1,962,817)
(996)
21

Net changes of items otherthan shareholders’ equity(6,228)(6,228)(134,627)(140,856)

Total changes during period(6,228)(6,228)(134,627)(1,296,183)

Balance as of December 31, 2023

(5,985)(5,985)

277,044

7,209,909(Note) Amounts of less than one thousand yen are rounded down.

20Notes to Consolidated Financial Statements(Basis of consolidated financial statements)(Scope of consolidation)

Number of consolidated subsidiaries and the name of key consolidated subsidiary
Number of consolidated subsidiaries
One
Name of consolidated subsidiary
SymBio Pharma USA, Inc.

(Application of equity method accounting)None to be reported.

(Significant accounting policies)(1) Valuation basis and method of marketable and investment securities
Marketable and investment securities
Shares of subsidiaries and affiliates

Shares of subsidiaries are stated at cost determined by the movingaverage method.

Other marketable and investment
securities
Available-for-sale securities withdeterminable market value

Available-for-sale securities with a determinable market value arestated at fair value based on marketable value on the closing dateand other premises. Any valuation differences are included directly
in shareholders’ equity. Cost of securities sold is calculated by themoving-average method.

Available-for-sale securities
without determinable market value

Available-for-sale securities without determinable market value arestated at cost determined by the moving-average method.

Derivative transactions

Derivative financial instruments are stated at fair value.

Inventories

Merchandise and finished goods are stated at cost determined by
the first-in, first-out method, and semi-finished goods are stated atcost determined by the weighted average cost method. The amounton the balance sheet is calculated by reducing book value when thecontribution of inventories to profitability declines. Inventory items
are classified into separate categories for the purpose of detailed
monitoring of inventory movements and appropriate valuation.

(2) Depreciation and amortization of non-current assets
Property, plant and equipment
Depreciation of property, plant and equipment is computed by the(excluding lease assets)straight-line method.
The useful lives of major property, plant and equipment aresummarized as follows:
Buildings
15 years
Tools, furniture and fixtures
6 to 10 years
Intangible assets(excluding lease assets)

Amortization of intangible assets is computed by the straight-line
method.
Capitalized software costs are being amortized over the period of
the internal use of five years.

Lease assets

Depreciation of lease assets is computed by the straight-line method
over the lease term with no residual value.

21

(3) Basis for reserves and provisions
Provision for office relocation
Due to the relocation of the head office, an amount equivalent to the rent
expensesduring restoration work was recorded for FY2023.
(4)

Recognition of significant revenues and expenses
The Group recognizes revenue from the sale of merchandise and finished goods at the time of delivery to
the customer, as this is when the control of the merchandise and finished goods is transferred to the customer
and performance obligations are satisfied. Revenue from the sale of merchandise and finished goods isestimated within the range in which it is highly probable that there will not be a significant reversal of theconsideration promised in the contract with the customer less sales rebates in accordance with the terms of thesales contract. The amount of consideration expected to be refunded to the customer is recorded as a refund
liability. The refund liability is estimated based on the terms of the contract and past records.

(5)

Other significant matters for preparation of consolidated financial statements(i) Fiscal year of the consolidated subsidiary
The closing date of the consolidated subsidiary is the same as the consolidated closing date.
(ii) Accounting method for deferred assets
Share issuance costs and bond issuance costs are recorded in full as expenses when incurred.
(iii) Accounting method for retirement benefits
A simplified method is applied in calculating the retirement benefit liabilities and retirement benefit
expenses, using the amount of benefits that would be payable if all employees voluntarily retired at theend of the fiscal year as retirement benefit liabilities.
(iv) Standard for translation of foreign-currency denominated assets or liabilities into Japanese yen
Monetary assets and liabilities denominated in foreign currencies are translated into Japanese yen at
the spot exchange rate prevailing on the closing date, and the difference arising from such translation isrecorded as profit or loss.

(Notes on changes in accounting policy)(Application of the "Guidance on Accounting Standard for Measurement of Fair Value")
The Company applied for the "Guidance on Accounting Standard for Measurement of Fair Value" (ASBJ
Guidance No. 31, June 17, 2021, from the beginning of the fiscal year under review.
In applying the "Guidance on Accounting Standard for Measurement of Fair Value", the Company has followed
the transitional treatment prescribed in the provision of Paragraph 27-2 of the "Guidance on Accounting Standard
for Measurement of Fair Value" and will apply the new accounting standard prescribed by the "Guidance on
Accounting Standard for Measurement of Fair Value", prospectively.
The adoption of this accounting standard has no effect on the financial statements.

(Note to Accounting Estimates)(1) Amount recorded in the consolidated financial statements for the fiscal year under review
Impairment loss recorded in the fiscal year under review: 560,590 thousand yen(2) Information regarding accounting estimates on the identified item(i) Calculation method
The Company generally groups its assets by the smallest unit that generates independent cash flows,
assesses each grouping for indications of impairment, and determines the recognition of impairment losses
for those assets or asset groups for which there are indications of impairment. The Company operates asingle business and groups its business assets as a whole company.
When there is an indication of impairment, the Company determines whether an impairment loss should
be recognized, and if so, the carrying amount of the asset is reduced to its recoverable amount and an
impairment loss is recognized. The recoverable amount is the higher of the net realizable value or the value
in use of the asset or asset group, and the recoverable amount for the current fiscal year was measured by
the value in use. Value in use is calculated as the discounted present value of future cash flows, and future
cash flows are based on the budget approved by the Board of Directors.
(ii) Major assumptions
Future cash flows are estimated on a budgetary basis. Future cash flows are developed based on certain
assumptions that take into account important uncertainties, such as the sales situation affected by the sales
volume of existing drugs, the timing and likelihood of the launch of drugs in the development stage, and theimpact of the progress of the development plan.
(iii) Impact on the consolidated financial statements for subsequent fiscal years
The above major assumptions may be affected by future changes in economic trends and other factors,

22and if it becomes necessary to revise the assumptions, new impairment losses may be incurred in the next
fiscal year.

(Additional information)(Overdraft and commitment line contracts)
The Group has overdraft and commitment line contracts with three banks in a business relationship to efficiently
procure working capital. The status of the bank overdraft and loan commitments based on these contracts at the endof the fiscal year under review is as follows:(Unit: thousands of yen)
Total amounts of bank overdraft limit and loan commitment line
3,150,000
Balance of borrowing outstanding—
Unused balance
3,150,000(Consolidated Balance sheet)

Accumulated depreciation included accumulated impairment losses.

(Consolidated statement of income)R&D costs included in general and administrative expenses:

2,638,234 thousand yen(Statement of changes in equity)(1) Type and number of shares issued and treasury shares

Commonstock

At beginning ofcurrent period
Shares issued

Increase

39,603,606(Unit: number of shares)
At end of current
Decrease
period2,674,475－

42,278,081(Notes) Increase of 2,400,000 shares in the total number of outstanding common shares is due to a capital increase and increaseof 274,475 shares issued in common stock is due to the exercise of share acquisition rights.

(2) Number of shares to be issued upon exercise of share acquisition rights issued at the end of the fiscal year
under review
Common stock
2,183,925 shares(Note) Excludes share acquisition rights for which the commencement date of the exercise period has not yet arrived.

(3) Matters related to dividends from surplus paid during the current fiscal year.
None to be reported(Financial instruments)(1) Financial instruments(i) Policies for financial instruments
The Group procures the funds necessary in light of the pipeline development plan (primarily by third-party
allotment and offering by new share issuance). A temporary surplus fund is invested in financial instruments
which are highly safe and liquid.
As a principle, the Group does not enter into derivative transactions for speculative trading purposes but uses
them within the scope prescribed in the Group’s internal rules.
(ii) Types of financial instruments and related risks
Operating receivables such as accounts receivable–trade are exposed to the credit risk of customers and joint
development partners. Operating receivables denominated in foreign currencies are exposed to foreign exchange
fluctuation risk.
Operating payables such as accounts payable–trade and accounts payable–other are mostly due within 60 days.
Operating payables denominated in foreign currencies are exposed to foreign exchange fluctuation risk.
The Group uses derivative transactions to avoid foreign exchange fluctuation risks and enters into forward
exchange contracts within the scope prescribed in the internal rules based on balances of receivables and payables
denominated in foreign currencies as well as the actual volume of export and import transactions denominated inforeign currencies.

23Leasehold and guarantee deposits are mostly security deposits related to leased office premises and theirrefunds are subject to the credit risk of the lessor.
(iii) Risk management for financial instruments
1. Monitoring of credit risks (the risk that customers or counterparties may default on obligations)
In accordance with the Group’s internal credit policies for managing credit risk arising from operatingreceivables, the department in charge periodically monitors the creditworthiness of major customers andmonitors due dates and outstanding balances by individual customers. In addition, the Company is making
efforts to promptly identify and mitigate risks of bad debts from customers who are having financial
difficulties.
The Group enters into derivative transactions only with financial institutions which have a sound credit
profile in order to mitigate the counterparty risk.
2. Monitoring of market risk (the risk arising from fluctuations in foreign exchange rates, interest rates, andothers)The Group deposits cash primarily with financial institutions with high credit ratings.
The Group enters into forward exchange contracts in order to avoid foreign exchange fluctuation risks inconnection with receivables and payables denominated in foreign currencies.
Followed by appropriate authorization procedures prescribed in the Group’s internal rules, the Finance &Accounting department executes and monitors derivative transactions. Transaction performances are reported
to the Executive Management Committee on a regular basis.
3. Monitoring of liquidity risks (the risk that the Company may not be able to meet its obligations on thescheduled due date)
Based on the report from each department, the responsible department of the Group prepares and updates
its cash flow plans on a timely basis and ensures to maintain the liquidity on hand to manage liquidity risk.
(iv) Supplementary explanation of the estimated fair value of financial instruments
The fair value of financial instruments is based on their quoted market price, if available. When there is noquoted market price available, fair value is reasonably estimated. Since various assumptions and factors arereflected in estimating the fair value, different assumptions and factors could result in different fair value.
(v) Concentration of credit risk
As of the end of fiscal year under review, 100% operating receivables are from one particular major customer.

(2) Fair value of financial instruments

The carrying value on the consolidated balance sheet, fair values, and their differences as of December 31, 2023
are as follows.
(Unit: thousands of yen)
Carrying value on the balance
sheet

Fair value

Difference

Leasehold and guarantee deposits

87,716

79,894(7,822)

Assets, total

87,716

79,894(7,822)Derivative transactions (*1)

(9,827)(9,827)―(Note) 1. Receivables and liabilities arising from derivative transactions are presented on a net basis and net liabilities are shown inparentheses.
(Note) 2. Cash and deposits, Accounts receivable–trade, Accounts payable–trade, Accounts payable–other, Income taxes payable
and Consumption taxes payable are omitted because they are cash or are settled within a short time and the fair value isalmost equal to the book value.
(Note) 3. The redemption schedule for monetary assets and securities with maturities after the closing date

(Unit: thousands of yen)24

Due in one year or
less
Cash and deposits
Accounts receivable–
trade
Total
(Notes)—Due after five
years through ten
years
—

—

—

—

—

—

—

Due after one year
through five years

6,517,007
913,0947,430,101

Due after ten
years—

Lease and guarantee deposits are not included because it is not possible to clearly determine the return date necessary
to estimate the amortized amount of lease and guarantee deposits.

(4) Fair Value of Financial Instruments by levels
The fair value of financial instruments is classified into the following three levels based on the observability andmateriality of the
inputs used to calculate fair value.
Level 1: Fair value derived from quoted prices in active markets for identical assets or liabilities.
Level 2: Fair value derived from observable inputs that are not included in Level 1 inputs.
Level 3: Fair value derived from unobservable inputs.
When multiple inputs that have a significant impact on the fair value calculation are used, the fair value isclassified at lower level
category.
(ⅰ)Financial instruments measured at fair value
Classification

Level 1

Derivative transactions
Currency-relatedtransactions
Liabilities, total(Notes)item(Unit: thousands of yen)
Fair value
Level 2

Level 3

Total—

(9,827)—(9,827)—(9,827)—(9,827)—(9,827)—(9,827)

Net receivables and payables, which were derived from derivative transactions, are presented in net amounts, and any
for which the total becomes a net liability is indicated in parentheses.

(ⅱ)Financial instruments other than those measured at fair value
Classification
Leasehold and guarantee
deposits
Assets, total(Unit: thousands of yen)
Fair value

Level 1

Level 2—

79,894—

79,894

Level 3

Total——

79,894
79,894(Notes) Derivative transactions
Fair value calculations are based on quoted prices provided by counterparty financial institutions and are classified as Level
2 fair value.
Leasehold and guarantee deposits
Based on a reasonably estimated expected return period, the fair value is calculated based on the present value of the future
cash flows discounted by the Japanese government bond yields corresponding to the period until redemption, and isclassified as Level 2 fair value.

(Revenue recognition)(1) Information about breakdown of revenue from contracts with customers(Unit: thousands of yen)
Current Consolidated Fiscal Year
(From January 1, 2023 to
December 31, 2023）

25

Sales of Merchandise and finished goods

5,589,708

Revenue from contracts with customers

5,589,708

Sales to external customers

5,589,708(2) Underlying information in understanding revenue
Underlying information in understanding revenue is as stated in (Basis of consolidated financial statements),(Significant accounting policies), (4) Recognition of significant revenues and expenses.
(3) Information for understanding the revenue amount for the fiscal year under review and subsequent fiscal years(i) Balance of contract assets and contract liabilities
The Group has no balance of contract assets and contract liabilities. In addition, no revenue was recognized in
the fiscal year under review from performance obligations satisfied in previous fiscal years.
(ⅱ) Transaction price allocated to remaining performance obligations
The Group does not have any material transactions with an initial expected term of contract exceeding one
year. Further, there is no material amount of consideration arising from contracts with customers that is notincluded in the transaction price.

(Per-share information)(1) Net assets per share(2) Net loss per share
Average number of shares outstanding during the year

164.32 yen(49.19) yen
39,902,249 shares(Significant subsequent events)(Execution of agreement establishing share issuance program and issuance of new shares by way of third-party
allotment)
On October 6, 2023 (the “Initial Press Release”), the Company announced that the Company’s

Board ofDirectors, at a meeting held on the same date, had resolved to enter into an agreement with EVO FUND (the“Allottee”) to set up an equity issue program (the “Agreement to Set up an Equity Issue Program”), and based on
the equity issue program established under the Agreement to Set up an Equity Issue Program (the “Program”), toissue new shares in five tranches (shares issued to the Allottee, whether individually or collectively, under the
Program are referred to as the “Shares”).
The Company is authorized to issue up to a total of 6,000,000 ordinary shares by way of third-party allotment tothe allottees in the period from 25 October 2023 to 3 April 2024, with ordinary shares to be issued by way of a totalof five allotments, from the first to the fifth allotment.
As at the date of submission, the new shares to be issued by way of third-party allotment are as follows.
(3rd allotment)
The payment was completed on February 7, 2024.
1Class and Numbers Shares Offered

1,200,000 common shares

2

Issue Price

230 yen per share

3

Capital inclusion amount

115 yen per share

4

Total Issue Price

276,000,000 Yen

5

Increases in Capital Stock and Legal Capital Surplus

138,000,000 Yen

26

6Allotment resolution date

January 22, 2024

7

Deadline for Application

February 7, 2024

8

Due Date of Payment

February 7, 2024

9

Allottee

EVO FUND(1) Development funds for antiviral drug
brincidofovir (direct expenses)(2) Development funds for antiviral drug

10

Specific uses

brincidofovir (indirect expenses)(3) Investment in new in-licensing and M&A forthe purpose of securing long-term growth
opportunities.

(4th allotment) *Note 1
1Class and Numbers Shares Offered

1,200,000 common shares

2

Issue Price

To be determined *Note 2
The amount to be contributed to capital stock shall behalf the upper limit of an increase in capital stock
under Article 14, Paragraph 1, of the Rules of3

Corporate Accounting (with any fractional amounts

Capital inclusion amountless than one yen resulting from such calculation
rounded up). The increase in the legal surplus shallbe the upper limit of an increase in capital stock lessthe amount of the increase in capital stock.

4

Total Issue Price

To be determined.

5

Increases in Capital Stock and Legal Capital Surplus

To be determined.

6

Allotment resolution dateFebruary 29, 2024 *Note 3

7

Deadline for Application

March 18, 2024

8

Due Date of Payment

March 18, 2024 *Note 3

9Allottee

EVO FUND(1) Development funds for antiviral drug
brincidofovir (direct expenses)(2) Development funds for antiviral drug

10

Specific uses

brincidofovir (indirect expenses)(3) Investment in new in-licensing and M&A forthe purpose of securing long-term growth
opportunities.

27

(5th allotment) *Note 1
1Class and Numbers Shares Offered

1,200,000 common shares

2

Issue Price

To be determined
The amount to be contributed to capital stock shall behalf the upper limit of an increase in capital stock
under Article 14, Paragraph 1, of the Rules of3

Corporate Accounting (with any fractional amounts

Capital inclusion amountless than one yen resulting from such calculation
rounded up). The increase in the legal surplus shall be
the upper limit of an increase in capital stock less theamount of the increase in capital stock.

4

Total Issue Price

To be determined.

5

Increases in Capital Stock and Legal Capital Surplus

To be determined.

6

Allotment resolution date

April 3, 2024 *Note 3

7

Deadline for Application

April 19, 2024

8

Due Date of Payment

April 19, 2024 *Note 3

9Allottee

EVO FUND(1) Development funds for antiviral drug
brincidofovir (direct expenses)(2) Development funds for antiviral drug

10

Specific uses

brincidofovir (indirect expenses)(3) Investment in new in-licensing and M&A forthe purpose of securing long-term growth
opportunities.

*Note 1. The number of shares for each of the 4th through 5th allotments will range from 1,200,000 shares to 2,500,000
shares, and the total will not exceed the 6,000,000 shares stipulated for issuance under the Program. The actual number
will be determined by the Allottee notifying the Company prior to the date of the resolution by the Board of Directors
for each allotment (the “Allotment Resolution Date”).
*Note 2. The issue price for each allotment will be the amount equal to the simple average of the closing price ofcommon shares of the Company announced by the Tokyo Stock Exchange, Inc. (the “TSE”) during the 10 trading days
up to and including the day immediately preceding the Allotment Resolution Date (rounded off to the first decimal
place). (However, if there is no closing price for any of the 10 trading days, the Allotee may decide whether to include
such a day in the calculation of the issue price.)*Note 3. The Allotment Resolution Date and the due date of payment may be changed, if agreed upon by the Company
and the Allottee. If such changes occur, the Company will withdraw the securities registration statement allotment andsubmit a new securities registration statement.

28

Balance Sheet(As of December 31, 2023)
Item(Assets)
Current assets
Cash and deposits
Accounts receivable–trade
Merchandise and finished goods
Supplies
Advance payments
Prepaid expenses
Other
Non-current assets

AmountItem

231,650380
271,516
366,524
29,60787,716-

Buildings
Tools, furniture and fixtures
Accumulated depreciation

237,233
105,107

Investments and other assets
Shares of subsidiaries andassociates
Leasehold and guarantee deposits(Liabilities)
Current liabilities
Accounts payable
Provision for office relocation
expenses
Income taxes payable
Consumption taxes payable
Deferred income
Other
Non-current liabilities
Provision for retirement benefits

8,089,294
6,276,521
913,094

Property, plant and equipment

Total liabilities

976,136
873,337
16,784
18,47432,5099,827
25,2033,709
3,709
979,845(342,341)(Net assets)
Shareholders’ equity
Capital stock

87,7160Capital surplus
Legal capital surplus

17,927,584

87,716

Other capital surplus
Retained earnings

4,891(28,871,032)

Other retained earnings(28,871,032)

Retained earnings brought
forwardTreasury shares
Share acquisition rights
Total assets(Unit: thousands of yen)Amount8,177,010(Note) Amounts of less than one thousand yen are rounded down.

29

6,920,120
17,952,692
17,922,692(28,871,032)(89,122)
277,044

Total net assets

7,197,165

Total liabilities and net assets

8,177,010

Statement of Income
January 1, 2023
( toFrom
December 31, 2023 )Item(Unit: thousands of yen)AmountI. Net sales

5,589,708

II. Cost of goods sold

1,178,694

Gross profit

4,411,013

III. Selling, general and administrative expenses

5,263,120

Operating loss

(852,107)

IV. Non-operating income
Interest income

11,972Foreign exchange gains
Other

119,854
3,711

135,537

V. Non-operating expenses
Commission fee
Stock issuance expenses

12,728
11,478Provision for office relocation expenses
Loss on retirement of fixed assets

25,176
7,868

Ordinary loss
VI. Extraordinary income

57,252(773,822)

Gain on reversal of share acquisition rights

101,333

101,333

Ⅶ. Extraordinary Loss
Impairment loss

560,590

Loss before income taxes
Income taxes–current

8,915

Income taxes–deferred

744,728

560,590(1,233,079)

Net loss

753,643(1,986,723)(Note) Amounts of less than one thousand yen are rounded down.

30

Statement of Changes in Equity
January 1, 2023
( Fromto December 31, 2023 )(Unit: thousands of yen)

Shareholders’ equity
Capital surplus

Balance as of January 1, 2023

Capital stock

Legal capitalsurplus

Other capitalsurplus

Total capitalsurplus17,548,459

17,518,459

4,898

17,523,357

346,200

346,200

346,200

58,03258,03258,032Retained earnings
Other retained
earnings
Retained earnings
brought forward(26,884,309)

Changes during period
Issuance of new shares
Issuance of new shares(exercise of share acquisitionrights)Loss(1,986,723)

Purchase of treasury shares
Disposal of treasury shares

(6)

(6)

Net changes of items other thanshareholders’ equity
Total changes during period
Balance as of December 31, 2023

404,232

404,232(6)

404,226(1,986,723)

17,952,692

17,922,692

4,891

17,927,584(28,871,032)

Shareholders’ equity
Total shareholders’ Share Acquisition rights

Treasury shares

Balance as of January 1, 2023

Total net assets

equity(88,154)

8,099,352

411,672

8,511,025

Changes during period
Issuance of new shares
Issuance of new shares(exercise of share acquisitionrights)Loss692,400

692,400

116,065

116,065(1,986,723)(1,986,723)

Purchase of treasury shares

(996)

(996)

(996)

Disposal of treasury shares

28

21

21

Net changes of items other thanshareholders’ equity
Total changes during period
Balance as of December 31, 2023

(134,627)(134,627)(968)(1,179,232)(134,627)(1,313,859)(89,122)6,920,120

277,044

7,197,165(Note) Amounts of less than one thousand yen are rounded down.

31Notes to Non-Consolidated Financial Statements(Significant accounting policies)(1) Valuation basis and method of marketable and investment securities
Marketable and investment securities
Shares of subsidiaries and affiliates

Shares of subsidiaries are stated at cost determined by the movingaverage method.

Other marketable and investment
securities
Available-for-sale securities withdeterminable market value

Available-for-sale securities with a determinable market value arestated at fair value based on marketable value on the closing dateand other premises. Any valuation differences are included directly
in shareholders’ equity. Cost of securities sold is calculated by themoving-average method.

Available-for-sale securities
without determinable market value

Available-for-sale securities without determinable market value arestated at cost determined by the moving-average method.

Derivative transactions

Derivative financial instruments are stated at fair value.

Inventories

Merchandise and finished goods are stated at cost determined by
the first-in, first-out method, and semi-finished goods are stated atcost determined by the weighted average cost method. The amounton the balance sheet is calculated by reducing book value when thecontribution of inventories to profitability declines. Inventory items
are classified into separate categories for the purpose of detailed
monitoring of inventory movements and appropriate valuation.

(2) Depreciation and amortization of non-current assets
Property, plant and equipment(excluding lease assets)

Depreciation of property, plant and equipment is computed by thestraight-line method.
The useful lives of major property, plant and equipment aresummarized as follows:
Buildings
15 years
Tools, furniture and fixtures
6 to 10 years

Intangible assets(excluding lease assets)

Amortization of intangible assets is computed by the straight-line
method.
Capitalized software costs are being amortized over the period of
the internal use of five years.

Lease assets

Depreciation of lease assets is computed by the straight-line method
over the lease term with no residual value.

(3) Deferred assets
Share issuance costs and bondissuance costs

Share issuance costs and bond issuance costs are recorded as expenses infull at the time of expenditure.

(4) Basis for translating assets and liabilities denominated in foreign currencies into Japanese yen
Monetary assets and liabilities denominated in foreign currencies are translated into Japanese yen at the spot
exchange rates prevailing on the closing date, and resulting gains or losses are credited or charged to income.

(5) Basis for reserves and provisions
Provision for retirement
benefits

The provision for retirement benefits is provided based on an estimatedamount for retirement benefit obligations at the end of fiscal year underreview.
The Company applies the simplified method to calculate amounts of32

provision for retirement benefits and retirement benefit expenses. That is,
the amount of retirement benefit obligations are the payments required forvoluntary retirement as of each fiscal year end.
Provision for office relocation
expenses

Due to the relocation of the head office, an amount equivalent to the rent
during restoration work was recorded for FY2023.

(6) Recognition of revenues and expenses

The Company recognizes revenue from the sale of merchandise and finished goods at the time of delivery to
the customer, as this is when the control of the merchandise and finished goods is transferred to the customer andperformance obligations are satisfied. Revenue from the sale of merchandise and finished goods is estimatedwithin the range in which it is highly probable that there will not be a significant reversal of the consideration
promised in the contract with the customer less sales rebates in accordance with the terms of the sales contract.
The amount of consideration expected to be refunded to the customer is recorded as a refund liability. The refund
liability is estimated based on the terms of the contract and past performance.

(Notes on changes in accounting policy)(Application of the “Guidance on Accounting Standard for Measurement of Fair Value”)

The Company applied for the “Guidance on Accounting Standard for Measurement of Fair Value” (ASBJ
Guidance No. 31, June 17, 2021, from the beginning of the fiscal year under review.
In applying the “Guidance on Accounting Standard for Measurement of Fair Value”, the Company has followed
the transitional treatment prescribed in the provision of Paragraph 27-2 of the “Guidance on Accounting Standard
for Measurement of Fair Value” and will apply the new accounting standard prescribed by the “Guidance on
Accounting Standard for Measurement of Fair Value”, prospectively.
The adoption of this accounting standard has no effect on the financial statements.

(Note to Accounting Estimates)(1) Amount recorded in the consolidated financial statements for the fiscal year under review
Impairment loss recorded in the fiscal year under review: 560,590 thousand yen(2) Information regarding accounting estimates on the identified item(i) Calculation method

The Company generally groups its assets by the smallest unit that generates independent cash flows,
assesses each grouping for indications of impairment, and determines the recognition of impairment losses
for those assets or asset groups for which there are indications of impairment. The Company operates asingle business and groups its business assets as a whole company.
When there is an indication of impairment, the Company determines whether an impairment loss should
be recognized, and if so, the carrying amount of the asset is reduced to its recoverable amount and an
impairment loss is recognized. The recoverable amount is the higher of the net realizable value or the value
in use of the asset or asset group, and the recoverable amount for the current fiscal year was measured by
the value in use. Value in use is calculated as the discounted present value of future cash flows, and future
cash flows are based on the budget approved by the Board of Directors.

(ii) Major assumptions

Future cash flows are estimated on a budgetary basis. Future cash flows are developed based on certain
assumptions that take into account important uncertainties, such as the sales situation affected by the sales
volume of existing drugs, the timing and likelihood of the launch of drugs in the development stage, and theimpact of the progress of the development plan.

(iii) Impact on the consolidated financial statements for subsequent fiscal years

The above major assumptions may be affected by future changes in economic trends and other factors,
and if it becomes necessary to revise the assumptions, new impairment losses may be incurred in the next
fiscal year.

33

(Additional information)(Overdraft and commitment line contracts)
The Company has overdraft and commitment line contracts with three banks in a business relationship to
efficiently procure working capital. The status of the bank overdraft and loan commitments based on these contracts
at the end of the fiscal year under review is as follows:(Unit: thousands of yen)
Total amounts of bank overdraft limit and loan commitment line
3,150,000
Balance of borrowing outstanding—
Unused balance
3,150,000(Balance sheet)(1) Monetary assets receivable from subsidiaries are as follows.
Short-term monetary assets receivable:
247,253 thousand yen(2) Accumulated depreciation included accumulated impairment losses.

(Statement of income)(1) R&D costs included in general and administrative expenses:
2,678,673 thousand yen(2) Transaction volume with subsidiaries and affiliates is as follows.
Transaction volume of operating transactions:

569,556 thousand yen(Statement of changes in equity)

Type and number of shares issued and treasury shares

Commonstock

At beginning ofcurrent period
Treasury shares

Increase

85,268(Unit: number of shares)
At end of current
Decrease
period2,502

5087,720(Notes) 1. Increase of 2,750 treasury shares in common stock is due to the purchase of shares less than one unit.
2. Decrease of 100 treasury shares in common stock is due to the sale of shares less than one unit to shareholders.

(Tax effect accounting)Significant components of deferred tax assets and liabilities
Deferred tax assets:(Unit: thousands of yen)
Excess depreciation for lump-sum depreciable assets
1,319
Excess amortization for deferred assets
96,046
Research and development expenses disallowed
2,273,704
Accounts payable–other disallowed
4,173
Provision for retirement benefits disallowed
1,135Enterprise taxes payable disallowed
59,215
Asset retirement obligations disallowed
43,137
Share-based compensation expenses disallowed
25,260Loss on valuation of inventories disallowed
43,278
Impairment loss disallowed
129,303
Provision for office relocation expenses disallowed
7,709
Loss carried forward
4,497,522
Subtotal of deferred tax assets
7,181,801
Valuation allowances for loss carried forward(4,497,522)
Valuation allowances for deductible temporary differences(2,684,279)
Subtotal of valuation allowances
Total deferred tax assets(7,181,801)―34

(Transactions with affiliated parties)
Category

Name of
Location
Capital orcompany orinvestment
person(thousands ofyen)

Business details or
profession

Ratio of voting
rights and otherforms ofownership (%)

Relationships
with affiliatedparties

Transaction
details

Transaction
amount(thousands ofyen)

Account
title

Year-endbalance(thousands ofyen)

Executive

Fuminori
Yoshida——Representative Director,
President and Chief
Executive Officer of theCompany(Ownership)
Direct: 2.82—

Exercise ofshareacquisitionrights

22,750(70,000 shares)——

Executive

Shigetoshi
Matsumoto——Executive Officer of theCompany(Ownership)
Direct: 0.05—

Exercise ofshareacquisitionrights

13,062(22,500 shares)——(Note) This information describes the exercise during the fiscal year under review of share acquisition rights granted based on
resolutions of the Board of Directors meetings held on March 29,2018, March 28, 2019 and March 26,2020.

(Notes on revenue recognition)

Underlying information for understanding revenue arising from contracts with customers
Underlying information for understanding revenue arising from contracts with customers is as stated in (Significant
accounting
policies), (6) Recognition of revenues and expenses.

(Per-share information)(1) Net assets per share(2) Net loss per share
Average number of shares outstanding during the year

164.02 yen(49.79) yen
39,902,249 shares(Significant subsequent events)(Execution of agreement establishing share issuance program and issuance of new shares by way of third-party
allotment)
On October 6, 2023 (the “Initial Press Release”), the Company announced that the Company’s

Board ofDirectors, at a meeting held on the same date, had resolved to enter into an agreement with EVO FUND (the“Allottee”) to set up an equity issue program (the “Agreement to Set up an Equity Issue Program”), and based on
the equity issue program established under the Agreement to Set up an Equity Issue Program (the “Program”), toissue new shares in five tranches (shares issued to the Allottee, whether individually or collectively, under the
Program are referred to as the “Shares”).
The Company is authorized to issue up to a total of 6,000,000 ordinary shares by way of third-party allotment tothe allottees in the period from 25 October 2023 to 3 April 2024, with ordinary shares to be issued by way of a totalof five allotments, from the first to the fifth allotment.
As at the date of submission, the new shares to be issued by way of third-party allotment are as follows.
(3rd allotment)
The payment was completed on February 7, 2024.
1Class and Numbers Shares Offered

1,200,000 common shares

2

Issue Price

230 yen per share

3

Capital inclusion amount

115 yen per share

4

Total Issue Price

276,000,000 Yen

5

Increases in Capital Stock and Legal Capital Surplus

138,000,000 Yen

356Allotment resolution date

January 22, 2024

7

Deadline for Application

February 7, 2024

8

Due Date of Payment

February 7, 2024

9

Allottee

EVO FUND(1) Development funds for antiviral drug
brincidofovir (direct expenses)(2) Development funds for antiviral drug
10

Specific uses

brincidofovir (indirect expenses)(3) Investment in new in-licensing and M&A
for the purpose of securing long-term
growth opportunities.

36

(4th allotment) *Note 1
1Class and Numbers Shares Offered

1,200,000 common shares

2

Issue Price

To be determined *Note 2
The amount to be contributed to capital stock shall behalf the upper limit of an increase in capital stock
under Article 14, Paragraph 1, of the Rules of3

Corporate Accounting (with any fractional amounts

Capital inclusion amountless than one yen resulting from such calculation
rounded up). The increase in the legal surplus shallbe the upper limit of an increase in capital stock lessthe amount of the increase in capital stock.

4

Total Issue Price

To be determined.

5

Increases in Capital Stock and Legal Capital Surplus

To be determined.

6

Allotment resolution dateFebruary 29, 2024 *Note 3

7

Deadline for Application

March 18, 2024

8

Due Date of Payment

March 18, 2024 *Note 3

9Allottee

EVO FUND(1) Development funds for antiviral drug
brincidofovir (direct expenses)(2) Development funds for antiviral drug
10

Specific uses

brincidofovir (indirect expenses)(3) Investment in new in-licensing and M&A
for the purpose of securing long-term
growth opportunities.
(5th allotment) *Note 1
1Class and Numbers Shares Offered

1,200,000 common shares

2

Issue Price

To be determined
The amount to be contributed to capital stock shall behalf the upper limit of an increase in capital stock
under Article 14, Paragraph 1, of the Rules of3

Corporate Accounting (with any fractional amounts

Capital inclusion amountless than one yen resulting from such calculation
rounded up). The increase in the legal surplus shall be
the upper limit of an increase in capital stock less theamount of the increase in capital stock.

4

Total Issue Price

To be determined.

5

Increases in Capital Stock and Legal Capital Surplus

To be determined.

37

6

Allotment resolution date

April 3, 2024 *Note 3

7

Deadline for Application

April 19, 2024

8

Due Date of Payment

April 19, 2024 *Note 3

9Allottee

EVO FUND(1) Development funds for antiviral drug
brincidofovir (direct expenses)(2) Development funds for antiviral drug
10

Specific uses

brincidofovir (indirect expenses)(3) Investment in new in-licensing and M&A
for the purpose of securing long-term
growth opportunities.
*Note 1. The number of shares for each of the 4th through 5th allotments will range from 1,200,000 shares to 2,500,000
shares, and the total will not exceed the 6,000,000 shares stipulated for issuance under the Program. The actual number
will be determined by the Allottee notifying the Company prior to the date of the resolution by the Board of Directors
for each allotment (the “Allotment Resolution Date”).
*Note 2. The issue price for each allotment will be the amount equal to the simple average of the closing price ofcommon shares of the Company announced by the Tokyo Stock Exchange, Inc. (the “TSE”) during the 10 trading days
up to and including the day immediately preceding the Allotment Resolution Date (rounded off to the first decimal
place). (However, if there is no closing price for any of the 10 trading days, the Allotee may decide whether to include
such a day in the calculation of the issue price.)*Note 3. The Allotment Resolution Date and the due date of payment may be changed, if agreed upon by the Company
and the Allottee. If such changes occur, the Company will withdraw the securities registration statement allotment andsubmit a new securities registration statement.

38

Audit report on consolidated financial statements by accounting auditor

Independent Auditor’s ReportFebruary 26, 2024
The Board of Directors
SymBio Pharmaceuticals Limited

Ernst & Young ShinNihon LLC
Tokyo, Japan
Tetsuya Tomita
Designated Engagement Partner
Certified Public Accountant
Kinuyo Matsuo
Designated Engagement Partner
Certified Public Accountant

OpinionPursuant to Article 444, paragraph 4 of the Companies Act, we have audited the accompanying consolidated
financial statements, which comprise the consolidated balance sheet, the consolidated statement of income, theconsolidated statement of changes in equity, and notes to the consolidated financial statements of SymBio
Pharmaceuticals Limited and its consolidated subsidiaries (the Group) applicable to the 19th fiscal year from January
1, 2023 to December 31, 2023.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, theconsolidated financial position and results of operations of the Group applicable to the fiscal year ended December
31, 2023, in accordance with accounting principles generally accepted in Japan.

Basis for Opinion

We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial
Statements section of our report. We are independent of the Group in accordance with the ethical requirements that are
relevant to our audit of the consolidated financial statements in Japan, and we have fulfilled our other ethicalresponsibilities in accordance with these requirements. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our opinion.

Other Information

The other information comprises the information included in the Group’s business report and its supplementaryschedules. Management is responsible for preparation and disclosure of the other information. The Audit andSupervisory Committee is responsible for overseeing the Group’s reporting process of the other information.
Our opinion on the consolidated financial statements does not cover the other information and we do not express
any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistent with the consolidated
financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this otherinformation, we are required to report that fact.
We have nothing to report in this regard.

Responsibilities of Management, the Audit and Supervisory Committee for the Consolidated
Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements inaccordance with accounting principles generally accepted in Japan, and for such internal control as management
determines is necessary to enable the preparation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.

39

In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability tocontinue as a going concern and disclosing, as required by accounting principles generally accepted in Japan, mattersrelated to going concern.
The Audit and Supervisory Committee is responsible for overseeing the Group’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free frommaterial misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated
financial statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise professional
judgment and maintain professional skepticism throughout the audit.
We also:・ Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficientand appropriate to provide a basis for our opinion.
・ Consider internal control relevant to the audit in order to design audit procedures that are appropriate in thecircumstances for our risk assessments, while the purpose of the audit of the consolidated financial statements is
not expressing an opinion on the effectiveness of the Group’s internal control.
・ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management.
・ Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt
on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements
or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence
obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease
to continue as a going concern.
・ Evaluate the overall presentation, structure and content of the consolidated financial statements, including thedisclosures, and whether the consolidated financial statements represent the underlying transactions and events ina manner that achieves fair presentation in accordance with accounting principles generally accepted in Japan.
・ Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the Group to express an opinion on the consolidated financial statements. We are responsible for the
direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with the Audit and Supervisory Committee regarding, among other matters, the planned scope andtiming of the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the Audit and Supervisory Committee with a statement that we have complied with the ethicalrequirements regarding independence that are relevant to our audit of the consolidated financial statements in Japan,
and to communicate with them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, actions taken to eliminate threats or safeguards applied to reduce threats to an
acceptable level.

Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan

Our firm and its designated engagement partners do not have any interest in the Group which is required to bedisclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.

40

Audit report by accounting auditor

Independent Auditor’s ReportFebruary 26, 2024

The Board of Directors
SymBio Pharmaceuticals Limited
Ernst & Young ShinNihon LLC
Tokyo, Japan
Tetsuya Tomita
Designated Engagement Partner
Certified Public Accountant
Kinuyo Matsuo
Designated Engagement Partner
Certified Public Accountant

OpinionPursuant to Article 436, Section2, paragraph 1 of the Companies Act, we have audited the accompanying financial
statements, which comprise the balance sheet, the statement of income, the statement of changes in equity, the notes tonon-consolidated financial statements and the related supplementary schedules of SymBio Pharmaceuticals Limited(the ”Company”) applicable to the 19th fiscal year from January 1, 2023 to December 31, 2023.
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position
and results of operations of the Company applicable to the fiscal year ended December 31, 2023, in accordance withaccounting principles generally accepted in Japan.

Basis for Opinion

We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements
section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant toour audit of the financial statements in Japan, and we have fulfilled our other ethical responsibilities in accordance withthese requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our opinion.

Other Information

The other information comprises the information included in the Group’s business report and its supplementaryschedules. Management is responsible for preparation and disclosure of the other information. The Audit andSupervisory Committee is responsible for overseeing the Group’s reporting process of the other information.
Our opinion on the financial statements does not cover the other information and we do not express any form ofassurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial statements or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this otherinformation, we are required to report that fact.
We have nothing to report in this regard.

Responsibilities of Management, the Audit and Supervisory Committee for the Financial
Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance withaccounting principles generally accepted in Japan, and for such internal control as management determines is necessary
to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or
error.

41

In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as agoing concern and disclosing, as required by accounting principles generally accepted in Japan, matters related to going
concern.
The Audit and Supervisory Committee is responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Misstatements canarise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise professional
judgment and maintain professional skepticism throughout the audit. We also:・ Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion.
・ Consider internal control relevant to the audit in order to design audit procedures that are appropriate in thecircumstances for our risk assessments, while the purpose of the audit of the financial statements is not expressing
an opinion on the effectiveness of the Company’s internal control.
・ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management.
・ Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt
on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if suchdisclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to
the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue
as a going concern.
・ Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, andwhether the financial statements represent the underlying transactions and events in a manner that achieves fairpresentation in accordance with accounting principles generally accepted in Japan.
We communicate with the Audit and Supervisory Committee regarding, among other matters, the planned scope andtiming of the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the Audit and Supervisory Committee with a statement that we have complied with the ethicalrequirements regarding independence that are relevant to our audit of the financial statements in Japan, and tocommunicate with them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, actions taken to eliminate threats or safeguards applied to reduce threats to an
acceptable level.

Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan

Our firm and its designated engagement partners do not have any interest in the Company which is required to bedisclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.

42

Audit report by Audit & Supervisory Committee

Report of the Audit & Supervisory Committee
We, Audit & Supervisory Committee Members, prepare this report of audit with regard to the execution of Directors’
duties during the 19th Term of the Company from January 1, 2023 to December 31, 2023. The methods and results of
the audit are as follows.

1. Methods and Contents of the Audit

The Audit & Supervisory Committee regularly received reports from Directors and employees regarding the contentsof resolution by the Board of Directors related to matters stipulated in Article 399-13, Paragraph 13, Item 1, B and Cof the Companies Act and the status of establishment and operation of the internal control system set up based on thesaid resolution, and requested additional explanation as necessary. The Committee has expressed its opinion andconducted an audit using the methods outlined below.
(i) We conducted the audit in compliance with the standards for audits by Audit & Supervisory Board Committee set
forth by the said Committee, and abided by the audit policy and division of duties. In cooperation with theCompany’s Internal Control Division, we attended important meetings and received reports from Directors andemployees regarding their execution of duties, requesting additional explanation if necessary. We also reviewed
documents for important settlements, and investigated the status of operations and assets of the headquarters andkey business offices. Regarding the Company’s subsidiary, we communicated and exchanged information with
Directors, etc. of the subsidiary, and received reports on the subsidiary’s business operations as necessary.
(ii) In addition, we monitored and inspected the independent position of the accounting auditor and the execution of
appropriate audits by the accounting auditor, and also received the reporting from the accounting auditor withregard to the state of execution of its duties, requesting additional explanation as deemed necessary. Furthermore,
we received the notification from the accounting auditor that “the system to ensure that its duties are executed as
appropriate (the items listed by the respective paragraphs of Article 131 of the Ordinance on the Accounting ofCompanies)” is maintained in accordance with “the standards for quality control of audits (Business Accounting
Council, October 28, 2005),” requesting additional explanation as deemed necessary.
Based on the methods described above, we reviewed the business reports and related supplementary schedules,
financial reports (including balance sheet, statement of income, statement of changes in equity, and notes to nonconsolidated financial statements) and related supplementary schedules, and consolidated financial statements(consolidated balance sheet, consolidated statement of income, consolidated statement of changes in equity, and notes
to consolidated financial statements) for the Term reported.

2. Results of Audit(1) Results of the audit of the business reporta. The business report and supplementary schedules fairly present the Company’s situation in accordance withlaws and ordinances and the Company’s Articles of Incorporation.
b. No misconduct in the execution of Directors’ duties or any material facts in violation of laws or ordinances or
the Company’s Articles of Incorporation was observed.
c. The contents of resolution by the Board of Directors with regard to the Internal Control System are appropriate.
Also, there is no matter to be noted as for the descriptions in the business report regarding such Internal Control
System and the execution of Directors’ duties.
(2) Results of the audit of the financial statements and related supplementary schedules
Both the methods used for and the results of the audit conducted by the accounting auditor, Ernst & Young
ShinNihon LLC, are appropriate.
(3) Results of the audit of the consolidated financial statements
Both the methods used for and the results of the audit conducted by the accounting auditor, Ernst & Young
ShinNihon LLC, are appropriate.
February 19, 2024
Audit & Supervisory Committee,
SymBio Pharmaceuticals Limited
Kiyoshi Watanabe
Full-time Audit & Supervisory Committee Member

43

Kesao Endo
Audit & Supervisory Committee Member
Yasuhiro Tamo
Audit & Supervisory Committee Member(Note) Audit & Supervisory Committee Members Kiyoshi Watanabe, Kesao Endo, and Yasuhiro Tamo are Outside
Directors of the Company as stipulated in Article 2, Item 15 and Article 331, Paragraph 6 of the Companies Act.
End of Report
End of Document44