Investment
Invincible Corporation

Audited Financial Statements
for the 40th Fiscal Period(from January 1, 2023 to June 30, 2023)

INDEX TO FINANCIAL STATEMENTS
Page

Independent Auditor’s Report ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ 1

Balance Sheet as of June 30, 2023 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ 4

Statement of Income and Retained Earnings for the six months ended June 30, 2023∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ 6

Statement of Changes in Net Assets for the six months ended June 30, 2023 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ 7

Statement of Cash Flows for the six months ended June 30, 2023 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ 9

Notes to Financial Statements as of and for the six months ended June 30, 2023∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ 10

Independent Auditor’s Report

The Board of Directors
Invincible Investment Corporation

OpinionWe have audited the accompanying financial statements of Invincible Investment Corporation(the Company), which comprise the balance sheet as at June 30, 2023, and the statements ofincome and retained earnings, changes in net assets, and cash flows for the six months period
then ended, and notes to the financial statements.
In our opinion, the accompanying financial statements present fairly, in all material respects, thefinancial position of the Company as at June 30, 2023, and its financial performance and its cash
flows for the six months period then ended 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 Financial Statements section of our report. We are independent of the Company
in accordance with the ethical requirements that are relevant to our 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 andappropriate to provide a basis for our opinion.
Other Information
Other information comprises the information included in disclosure document that contains
audited financial statements, but does not include the financial statements and our auditor’sreport thereon.
We have concluded that other information does not exist. Accordingly, we have not performed
any work related to the other information.
Responsibilities of Management and the Supervisory Director for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statementsin accordance with accounting principles generally accepted in Japan, and for such internal
control as management determines is necessary to enable the preparation of financial statementsthat are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s
ability to continue as a going concern and disclosing, as required by accounting principles
generally accepted in Japan, matters related to going concern.
The Supervisory Director 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 awhole are free from material misstatement, whether due to fraud or error, and to issue anauditor’s report that includes our opinion. Misstatements can arise from fraud or error and areconsidered material if, individually or in the aggregate, they could reasonably be expected toinfluence 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, andobtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.
・ Consider internal control relevant to the audit in order to design audit procedures that areappropriate in the circumstances 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 ofaccounting estimates and related disclosures made by management.
・ Conclude on the appropriateness of management’s use of the going concern basis ofaccounting 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 tocontinue 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 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 Company to cease to continue as a going concern.
・ Evaluate the overall presentation, structure and content of the financial statements, including
the disclosures, and whether the financial statements represent the underlying transactions
and events in a manner that achieves fair presentation in accordance with accounting
principles generally accepted in Japan.
We communicate with the Executive Director regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies ininternal control that we identify during our audit.
We also provide the Executive Director with a statement that we have complied with the ethicalrequirements regarding independence that are relevant to our audit of the financial statements inJapan, and to communicate with them all relationships and other matters that may reasonably bethought to bear on our independence, and where applicable, actions taken to eliminate threats or
safeguards applied.
Fee-related information
The fees paid or payable to us and other EY Member Firms for the audits of the financial
statements of the Company and other non-audit fees charged in the audit period to the Company
are 18 million yen and 6 million yen, respectively.

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 whichis required to be disclosed pursuant to the provisions of the Certified Public Accountants Act ofJapan.
Convenience Translation
The U.S. dollar amounts in the accompanying financial statements with respect to the six
months period ended June 30, 2023 are presented solely for convenience. Our audit also
included the translation of Japanese yen amounts into U.S. dollar amounts and, in our opinion,such translation has been made on the basis described in Note 3 to the financial statements.
Ernst & Young ShinNihon LLC
Tokyo, Japan
September 26, 2023

/s/ Natsuki Saiki
Natsuki Saiki
Designated Engagement Partner
Certified Public Accountant/s/ Teruyo Okubo
Teruyo Okubo
Designated Engagement Partner
Certified Public Accountant

INVINCIBLE INVESTMENT CORPORATIONBALANCE SHEET
June 30, 2023
As ofJune 30,
2023

December 31,
2022

June 30,2023(in thousands of
U.S. dollars)(in thousands of yen)
ASSETS
Current assets:
Cash and bank deposits (Notes 5 and 16) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥Cash and bank deposits in trust (Notes 5 and 16) ∙∙Rental receivables ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Deposits paid ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Prepaid expenses ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Income taxes receivable∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Other ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total current assets ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Non‐current assets:
Property and equipment (Notes 6 and 7):
Buildings, at cost ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Buildings and accompanying facilities, at cost ∙∙∙∙∙∙∙
Structures, at cost ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Tools, furniture and fixtures, at cost ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Construction in progress∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Buildings in trust, at cost ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Buildings and accompanying
facilities in trust, at cost ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Structures in trust, at cost ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Tools, furniture and fixtures in trust, at cost ∙∙∙∙∙∙∙∙∙∙∙∙
Land in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Construction in progress in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Subtotal ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Less: Accumulated depreciation ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total property and equipment, net ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Intangible assets:
Leasehold rights ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Leasehold rights in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total intangible assets ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Investments and other assets:
Investment securities (Note 17 and 22)∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Guarantee deposits ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Long‐term prepaid expenses ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Derivatives assets (Note 18) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Other ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total investments and other assets ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total non‐current assets ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Deferred assets:
Investment corporation bond issuance costs ∙∙∙∙∙∙∙∙∙∙∙∙
Total deferred assets ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙TOTAL ASSETS ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

15,553,174
7,768,621
4,845,162
1,703,315
651,46913
5,060
30,526,816¥

18,377,030
10,464,171
5,750,301
542,947
821,11715
397
35,955,980$

126,746
72,171
39,659
3,744
5,663
0
2
247,989

19,479,753
5,308,557
1,458
1,228,513
714,997
159,079,641

19,479,753
5,311,502
1,458
1,282,552
720,331
159,247,341

134,352
36,633
10
8,845
4,968
1,098,333

32,688,012

33,186,709

228,889

212,818
3,195,160
241,319,447‐
463,228,359(44,278,794)
418,949,564

266,849
3,370,722
241,319,447
25,767464,212,436(47,986,485)
416,225,951

1,840
23,247
1,664,386
177
3,201,685(330,964)
2,870,721

10,637,811
14,419,422
25,057,234

10,637,811
14,380,825
25,018,637

73,36999,184
172,554

17,856,387
1,372,719
271,704
142,841
22,667
19,666,320
463,673,119

17,856,387
1,372,719
290,589
9,306
22,667
19,551,670
460,796,259

123,155
9,467
2,004
64
156
134,848
3,178,124

37,84437,844494,237,781

67,69067,690496,819,930

466
466
3,426,580¥$

4

As ofJune 30,
2023

December 31,
2022

June 30,2023(in thousands of
U.S. dollars)(in thousands of yen)
LIABILITIESCurrent liabilities:
Accounts payable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥Short‐term loans payable (Notes 9 and 16) ∙∙∙∙∙∙∙∙∙∙∙∙
Current portion of investment corporation
bonds (Notes 8 and 16) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Current portion of long‐term loans payable(Notes 9 and 16) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Accounts payable‐other ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Accrued expenses ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Income taxes payable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Consumption taxes payable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Advances received ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Deposits received ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total current liabilities ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Non‐current liabilities:
Investment corporation bonds (Notes 8 and 16) ∙Long‐term loans payable (Notes 9 and 16) ∙∙∙∙∙∙∙∙∙∙∙∙
Tenant leasehold and security deposits in trust(Note 16) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Derivatives liabilities (Note 18) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Asset retirement obligations (Note 19)∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total non‐current liabilities ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙TOTAL LIABILITIES ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙NET ASSETS (Note 10)
Unitholders’ equity:
Unitholders’ capital ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Surplus:Capital surplus ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Allowance for temporary differences
Adjustment (Note 4) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Other deduction of capital surplus ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total deduction of capital surplus ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Capital surplus (net) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Voluntary reserve
Retained earnings ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total surplus ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total unitholders’ equity ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Valuation and translation adjustments:
Deferred gains or losses on hedges∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total valuation and translation adjustments ∙∙∙∙TOTAL NET ASSETS ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙TOTAL LIABILITIES AND NET ASSETS∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥629,231
114,515,000¥

599,562
111,453,000

$

4,135
768,6943,000,000

2,000,000

13,79442,405,000

46,139,000

318,2213,366
264,276605
371,675
317,350
13,490161,519,996

3,514
247,903605
422,723
305,914
11,663
161,183,886

24
1,709
4
2,915
2,109
80
1,111,689

5,200,000
75,677,000

11,400,000
68,198,000

78,626
470,363

1,485,701

1,484,328

10,237

119
33,87282,396,693
243,916,689

495,525
34,097
81,611,951
242,795,838

3,417
235
562,879
1,674,569

235,701,512

235,701,512

1,625,639

6,264,432

6,264,432

43,205(6,130)(6,130)(42)(5,524,006)(5,530,137)
734,294(5,524,006)(5,530,137)
734,294(38,099)(38,141)
5,064

13,742,562
14,476,857
250,178,369

17,583,734
18,318,029
254,019,541

121,275
126,339
1,751,979

142,721
142,721250,321,091

4,550
4,550
254,024,091

31
31
1,752,011

494,237,781¥

496,819,930$

3,426,580

The accompanying notes are an integral part of these financial statements.

5

INVINCIBLE INVESTMENT CORPORATIONSTATEMENT OF INCOME AND RETAINED EARNINGSFor the six months ended June 30, 2023
For the six months ended

December 31,
2022

June 30,
2023

June 30,2023(in thousands of
U.S. dollars)(in thousands of yen)
Operating revenue
Rental revenue－real estate (Note 12) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥
Management contract revenue (Note 13) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total operating revenue ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Operating expenses
Property related expenses (Note 12) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Management contract expenses (Note 13) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Asset management fees ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Directors’ compensation ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Asset custody fees ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Administrative service fees ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Other ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total operating expenses ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Operating income ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Non‐operating income
Interest income∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Foreign exchange gains∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Interest on tax refund ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Other ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total non‐operating income ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Non‐operating expenses
Interest expenses ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Foreign exchange losses ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Interest expenses on investment corporation bonds ∙∙∙∙
Amortization of investment corporation bondissuance costs∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Loan‐related costs ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Loss on derivatives ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total non‐operating expenses ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Ordinary income ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Income before income taxes ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Income taxes (Note 14):
Current ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total income taxes ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙Net income ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Retained earnings / losses brought forward ∙∙∙∙∙∙∙∙∙∙∙∙∙∙Unappropriated retained earnings / losses (Note 11) ∙∙∙∙¥

10,182,751
1,746,848
11,929,599¥

12,000,955
3,914,026
15,914,981$

82,77026,995
109,766

4,606,538
569,669
300,000
4,800
24,47550,047
117,057
5,672,588
6,257,011

4,488,341
649,329300,000
4,800
24,736
39,162
51,871
5,558,241
10,356,739

30,956
4,478
2,069
33
170
270
357
38,33571,43090‐
92
17,657
17,840100
178,185‐
3,821
182,107

0
1,228
‐
26
1,256

542,104
68,85928,230507,601‐
33,881

3,500
‐
233

6,303

7,053

48

553,412‐
1,198,910
5,075,941
5,075,941

538,693537,269
1,624,499
8,914,347
8,914,347

3,715
3,705
11,204
61,482
61,482

605
605
5,075,336
8,667,226
13,742,562

605
605
8,913,742
8,669,991
17,583,734

4
4
61,47859,797
121,275¥$

The accompanying notes are an integral part of these financial statements.

6

INVINCIBLE INVESTMENT CORPORATIONSTATEMENT OF CHANGES IN NET ASSETSFor the six months ended June 30, 2023
Unitholdersʹ equity
SurplusCapital surplus
Deduction of capital surplus

Unitholdersʹ
capitalCapital surplus

Allowance fortemporarydifferences
adjustment¥

6,264,432¥(6,130)¥6,264,432¥(6,130)¥6,264,432¥(6,130)

Other deduction ofcapital surplus

Capital surplus (net)

Deduction ofcapital surplus(in thousands of yen)
Balance as of July 1, 2022 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥235,701,512¥(5,524,006)¥(5,524,006)¥(5,524,006)¥(5,530,137)¥(5,530,137)¥(5,530,137)¥

734,294¥734,294¥734,294

Changes during the period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Distributions from surplus ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙Net income ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Changes other than unitholders’ equity(net) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total changes during the period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙‐

Balance as of December 31, 2022 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥235,701,512

‐

‐

‐

‐

‐

Changes during the period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Distributions from surplus ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙Net income ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Changes other than unitholders’ equity(net) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total changes during the period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙‐

Balance as of June 30, 2023 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥235,701,512

‐

‐

‐

Unitholdersʹ equity‐

Valuation and translation adjustments

SurplusRetainedearnings‐

Total surplus

Total unitholdersʹ
equityDeferred gains
or losses onhedgesTotal valuationand translation
adjustments

Total net assets¥¥(in thousands of yen)
Balance as of July 1, 2022 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

9,679,301¥

10,413,596¥

246,115,108¥

96,02096,020246,211,129

Changes during the period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Distributions from surplus ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(1,012,075)(1,012,075)(1,012,075)

Net income ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

5,075,336

5,075,336

5,075,336(1,012,075)
5,075,336

Changes other than unitholders’ equity(net) ∙∙∙∙∙∙∙∙∙∙∙∙
4,063,260

Total changes during the period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Balance as of December 31, 2022 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

13,742,562

4,063,260¥

14,476,857

4,063,260¥

250,178,369¥

46,701

46,701

46,701

46,701

46,701

4,109,962

142,721¥

142,721¥250,321,091

Changes during the period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Distributions from surplus ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(5,072,570)(5,072,570)(5,072,570)

Net income ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

8,913,742

8,913,742

8,913,742(5,072,570)
8,913,742

Changes other than unitholders’ equity(net) ∙∙∙∙∙∙∙∙∙∙∙∙
Total changes during the period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Balance as of June 30, 2023 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

3,841,171¥

17,583,734

3,841,171¥

18,318,029

3,841,171¥

254,019,541¥(138,171)(138,171)(138,171)(138,171)(138,171)3,703,000

4,550

¥

4,550

¥

254,024,091

7

Unitholdersʹ equity
SurplusCapital surplus
Deduction of capital surplus

Unitholdersʹ
capitalCapital surplus

Allowance fortemporarydifferences
adjustment$

43,205$(42)$

43,205$(42)

Other deduction ofcapital surplus

Capital surplus (net)

Deduction ofcapital surplus(in thousands of U.S dollars)
Balance as of January 1, 2023 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ $1,625,639$(38,099)$(38,099)$(38,141)$(38,141)

$

5,064

$

5,064

Changes during the period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Distributions from surplus ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙Net income ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Changes other than unitholders’ equity(net) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total changes during the period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙‐

Balance as of June 30, 2023 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ $‐1,625,639‐‐

Unitholdersʹ equity‐

Valuation and translation adjustments

SurplusRetainedearnings‐

Total
unitholdersʹ
equityTotal surplus

Deferred gains
or losses onhedgesTotal valuationand translation
adjustments

Total net assets$$(in thousands of U.S dollars)
Balance as of January 1, 2023 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙$

94,782$

99,847

1,725,487

$

984

984

1,726,471

Changes during the period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Distributions from surplus ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(34,985)(34,985)(34,985)

Net income ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

61,47861,47861,478(34,985)
61,478Changes other than unitholders’ equity(net) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total changes during the period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Balance as of June 30, 2023 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

26,492$

121,275

26,492$

126,339

26,492$

1,751,979

$

(952)

(952)

(952)

(952)

(952)

25,539

31

$

31

$

1,752,011

The accompanying notes are an integral part of these financial statements.

8

INVINCIBLE INVESTMENT CORPORATIONSTATEMENT OF CASH FLOWSFor the six months ended June 30, 2023
For the six months ended
June 30,
2023

December 31,
2022

June 30,2023(in thousands of
U.S. dollars)(in thousands of yen)
Cash flows from operating activities:
Income before income taxes ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥
Depreciation and amortization ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Amortization of investment corporation bond issuance costs∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Loan‐related costs ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Interest income ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Interest expenses ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Foreign exchange losses (gains) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Loss (gain) on derivatives ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Decrease (increase) in rental receivables ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Decrease (increase) in deposits paid ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Decrease (increase) in receivable income taxes∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Increase (decrease) in accounts payable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Increase (decrease) in consumption taxes payable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Increase (decrease) in accounts payable‐other ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Increase (decrease) in accrued expenses ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Increase (decrease) in advances received ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Increase (decrease) in deposits received ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Other, net ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Subtotal ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Interest income received ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Interest expenses paid ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Income taxes paid ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

5,075,941
3,756,303
6,303
553,412(90)
570,334(29)‐(1,448,964)(1,370,438)(1)(3,505)
321,485(26,469)
20,843(585)
3,093(219,196)
7,238,437
90(567,445)(605)¥

8,914,347
3,746,513
7,053
538,693(100)
541,482(90)
537,269(905,138)
1,160,368(1)
13,731
51,048‐(19,097)(11,435)(1,827)(250,984)
14,321,833
100(538,660)(605)$

61,482
25,839
48
3,715
(0)
3,734
(0)
3,705
(6,242)
8,003
(0)
94
352
‐
(131)
(78)
(12)
(1,731)
98,7780(3,715)(4)

Net cash provided by operating activities ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

6,670,476

13,782,668

95,059Cash flows from investing activities:
Payments into time deposits ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Proceeds from withdrawal of time deposits ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Purchases of property and equipment ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Purchases of property and equipment in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Repayments of tenant leasehold and security deposits in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Proceeds from tenant leasehold and security deposits in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Other, net‐investing activities ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(800,000)
800,000(102,499)(875,748)(27,487)
12,239‐‐2,000,000(62,318)(965,159)(30,246)
28,873(46,500)‐
13,794(429)(6,656)
(208)
199
(320)

Net cash used in investing activities ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(993,494)

924,648

6,377

Cash flows from financing activities:
Proceeds from short‐term loans payable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Repayments of short‐term loans payable∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Proceeds from long‐term loans payable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Repayments of long‐term loans payable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Proceeds from issuance of investment corporation bonds ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Redemption of investment corporation bonds ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Payments for loan‐related costs ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Payments of distributions of earnings ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

87,471,000(61,091,000)
1,790,000(28,745,000)‐‐(591,633)(1,011,803)

27,660,000(30,722,000)
12,317,000(16,062,000)
6,163,101(1,000,000)(473,134)(5,070,967)

190,771(211,890)
84,950(110,780)
42,507(6,897)(3,263)(34,974)

Net cash provided by (used in) financing activities ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(2,178,436)(7,188,001)(49,575)

Effect of exchange rate change on cash and cash equivalents ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙Net increase (decrease) in cash and cash equivalents ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙Cash and cash equivalents at beginning of period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙Cash and cash equivalents at end of period (Note 6) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

29
3,498,574
17,023,221
20,521,796

90
7,519,406
20,521,796
28,041,202

0
51,861
141,539
193,400¥$

The accompanying notes are an integral part of these financial statements.

9

INVINCIBLE INVESTMENT CORPORATIONNOTES TO FINANCIAL STATEMENTS
As of and for the six months ended June 30, 2023

1. Organization
Invincible Investment Corporation (the “Company”), a real estate investment corporation, was incorporated on January 18, 2002, underthe Act on Investment Trusts and Investment Corporations of Japan (the“Investment Trust Act”) with initial capital of ¥200 million.
The Company is externally managed by a registered asset management company, Consonant Investment Management Co., Ltd. (the“Asset Manager”). The Asset Manager is currently owned 100% by Calliope Godo Kaisha (Calliope). The Company was formed toinvest primarily in properties in Japan.
On May 17, 2004, the Company raised ¥3,377,250 thousand through an initial public offering of 9,000 investment units. As a“comprehensive investment REIT focusing on the Tokyo metropolitan area and on residential properties,” the Company was listed on
the Osaka Securities Exchange in May 2004.
On February 7, 2005, the Company completed its second public offering of 10,650 investment units at a price of ¥369,734 per unit inconnection with a public offering in Japan.
On July 31, 2006, the Company completed its third public offering of 25,000 investment units at a price of ¥332,045 per unit in connection
with a public offering in Japan. The Company was listed on the J‐REIT market of the Tokyo Stock Exchange in August 2006 (in order tofocus trading on one securities exchange and reduce administrative tasks and costs accompanying a duplicate listing, the Company
delisted from the Osaka Securities Exchange on October 6, 2007).
Effective on February 1, 2010, the Company executed a five‐to‐one unit split and 215,596 investment units were issued in connection
with the unit split. Effective on the same day, the Company also merged with LCP Investment Corporation (LCP) and allocated 367,200
investment units at a ratio of 4 units (post‐unit split) of the Company per one investment unit of LCP. As a result, investment units issued
and outstanding were 636,695 units as of February 1, 2010.
On July 29, 2011, the Company completed a third party allotment of 711,597 investment units at a price of ¥9,837 per unit.
On December 20, 2013, the Company completed a third party allotment of 224,887 investment units at a price of ¥13,340 per unit.
On July 16, 2014, the Company completed its fourth public offering totaling 1,040,000 new investment units at a price of ¥21,873 per unit.
527,322 of such units were issued in connection with a Domestic Public Offering, and the remaining 512,678 units were issued inconnection with an International Offering pursuant to Rule 144A and Regulation S under the U.S. Securities Act of 1933. On August 13,
2014, the Company issued 55,507 investment units domestically in connection with the exercise of an over‐allotment option. Net
proceeds of approximately ¥23.9 billion were used to repay the Company’s outstanding short term borrowings and in connection withthe acquisition of 18 properties during this fiscal period.
On July 15, 2015, the Company completed its fifth public offering totaling 500,000 new investment units at a price of ¥57,817 per unit.
211,250 of such units were issued in connection with a Domestic Public Offering, and the remaining 288,750 units were issued inconnection with an International Offering pursuant to Rule 144A and Regulation S under the U.S. Securities Act of 1933. On August 12,
2015, the Company issued 25,000 investment units domestically in connection with the exercise of an over‐allotment option. Net
proceeds of approximately ¥29.3 billion were used to repay the Company’s outstanding long term borrowings and in connection withthe acquisition of 14 properties during this fiscal period.
On March 30, 2016, the Company completed its sixth public offering totaling 459,512 new investment units at a price ¥81,217 per unit.
194,144 of such units were issued in connection with a Domestic Public Offering, and the remaining 265,368 units were issued inconnection with an International Offering pursuant Rule 144A and Regulation S under the U.S. Securities Act of 1933. On April 27, 2016,
the Company issued 22,626 investment units domestically in connection with the exercise of an over‐allotment option. Net proceeds ofapproximately ¥37.9 billion were used to repay the Company’s outstanding long term borrowing and in connection with the acquisitionof 6 properties during this fiscal period.
On March 13, 2017, the Company completed its seventh public offering totaling 185,000 new investment units at a price ¥46,897 per unit
in connection with Japanese Primary Offering.

10

On October 12, 2017, the Company completed its eighth public offering totaling 887,959 new investment units at a price ¥44,118 per unit.
515,017 of such units were issued in connection with a Domestic Public Offering, and the remaining 372,942 units were issued inconnection with an International Offering pursuant Rule 144A and Regulation S under the U.S. Securities Act of 1933. On November 1,
2017, the Company issued 44,398 investment units domestically in connection with the exercise of an over‐allotment option. Net
proceeds of approximately ¥39.8 billion were used to repay the Company’s outstanding long term borrowing and in connection withthe acquisition of 4 properties and 1 preferred security during this fiscal period.
On August 1, 2018, the Company completed its ninth public offering totaling 909,524 new investment units at a price ¥45,776 per unit.
432,024 of such units were issued in connection with a Domestic Public Offering, and the remaining 477,500 units were issued inconnection with an International Offering pursuant Rule 144A and Regulation S under the U.S. Securities Act of 1933. On August 21,
2018, the Company issued 45,476 investment units domestically in connection with the exercise of an over‐allotment option. Net
proceeds of approximately ¥42.2 billion were used to repay the Company’s outstanding long term borrowing and in connection withthe acquisition of 4 properties and 1 TK investment during this fiscal period.
On July 18, 2019, the Company completed its ninth public offering totaling 409,524 new investment units at a price ¥56,939 per unit.
194,524 of such units were issued in connection with a Domestic Public Offering, and the remaining 215,000 units were issued inconnection with an International Offering pursuant Rule 144A and Regulation S under the U.S. Securities Act of 1933. On August 15,
2019, the Company issued 20,476 investment units domestically in connection with the exercise of an over‐allotment option. Net
proceeds of approximately ¥24.4 billion were used to repay the Company’s outstanding long term borrowing and in connection withthe acquisition of 18 properties during this fiscal period.

2. Summary of Significant Accounting Policies(a) Basis of Presentation
The Company maintains its accounts and records in conformity with accounting principles and practices generally accepted in Japan(“Japanese GAAP”), including provisions set forth in the Investment Trust Act, the Companies Act of Japan, the Financial Instruments
and Exchange Act of Japan, and other related regulations, which are different in certain respects from the application and disclosure
requirements of International Financial Reporting Standards or accounting principles generally accepted in the United States of America.
The financial statements are prepared based on the Japanese audited financial statements of the Company, which were prepared inaccordance with Japanese GAAP and filed with the Kanto Local Finance Bureau as required by the Financial Instruments and Exchange
Act of Japan. In preparing the accompanying financial statements, certain information in the notes has been added and certain
reclassifications have been made from the financial statements issued domestically for the convenience of the readers outside Japan.
The financial statements are not intended to present the financial position and the results of operations in accordance with accounting
principles and practices generally accepted in countries and jurisdictions other than Japan.
The Company’s fiscal period is a six‐month period, which ends at the end of June and December of each year.

Amounts less than ¥1 thousand and US$1 thousand have been rounded down. As a result, the totals shown in the financial statements
and notes thereto do not necessarily agree with the sum of the individual amounts.
The Company does not prepare consolidated financial statements as it has no subsidiaries.
(b) Cash and Cash Equivalents
Cash and cash equivalents consist of cash, demand deposits, and short‐term investments which are highly liquid and readily convertible
to cash, have a low risk of price fluctuation, and mature within three months from the date of acquisition.
(c) Valuation standard and method for shares in an Affiliated Company
Shares in an Affiliated Company are recorded at cost being determined by the moving average method.
(d) Valuation standard and method for Claims and obligations from derivative transactions
Claims and obligations from derivative transactions are evaluated at the market values.
(e) Property and Equipment

11Property and equipment are recorded at cost. Depreciation of property and equipment, except for land, is calculated on a straight‐line
basis over the estimated useful lives of the assets as stated below:

For the six months ended
June 30, 2023

Buildings ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

16‐50

Buildings and accompanying facilities ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

5‐29

Structures ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

20

Tools, furniture and fixtures ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

3‐18

Buildings in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

5‐67

Buildings and accompanying facilities in trust ∙∙∙∙∙∙∙∙∙∙∙

3‐33

Structures in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

7‐55

Tools, furniture and fixtures in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

3‐20

(f)

Intangible Assets

Amortization of a domestic term leasehold interest for business use is calculated by the straight‐line method over the lease term.
(g) Long‐term Prepaid Expenses
Long‐term prepaid expenses are amortized on a straight‐line basis.
(h) Investment corporation bond issuance costs
Investment corporation bond issuance costs are amortized using the straight‐line method over the period through the redemption of thebonds.
(i)

Allowance for Doubtful Accounts

Allowance for doubtful accounts is provided based on past experience for normal receivables and on a valuation of any receivables fromcompanies and individuals with financial difficulties.
(j)

Conversion of assets and liabilities in foreign currency into Japanese yen

Receivables and payables denominated in foreign currencies are translated into yen at the exchange rate in effect at the balance sheet
date, and differences arising from the translation are included in the statements of income.
(k) Impairment of Fixed Assets
An assessment for impairment is carried out on an asset or group of assets, such as fixed assets, intangible assets and investments,
whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the asset or group of assets isdeemed to be impaired, an impairment loss is recognized for the difference between the carrying amount and the recoverable value ofthe asset or group of assets using the discounted cash flow model.
(l)

Accounting Treatment of Trust Beneficiary Interests in Real Estate Trusts

For trust beneficiary interests in real estate trusts, which are commonly utilized to obtain ownership in investment properties in Japanand through which the Company holds all of its real estate, all assets and liabilities with respect to assets in trust, as well as all income
generated and expenses incurred with respect to assets in trust, are recorded in the relevant accounts of the balance sheet and statementof income and retained earnings of the Company in proportion to the percentage that such trust beneficiary interest represents. Certain
material accounts with respect to assets and liabilities in trust are presented separately from other accounts in the balance sheets of theCompany.
(m) Income Taxes
Deferred tax assets and liabilities are computed based on the temporary differences between the financial statement and income tax
basis of assets and liabilities using the applicable statutory tax rate.
(n) Consumption Taxes
Non‐deductible consumption taxes applicable to the acquisition of assets are included in the cost of acquisition for each asset.

12(o) Taxes on Property and Equipment
Property and equipment are subject to various taxes, such as property taxes and urban planning taxes on an annual basis. An owner of aproperty is registered in the record maintained by the local government in each jurisdiction, and such taxes are imposed on the ownerregistered in the record as of January 1 of each year based on the assessment made by the local government.
Under the above tax rules, a seller of a property at the time of disposal is liable for these taxes on the property from the date of disposal tothe end of the calendar year in which the property is disposed. The seller, however, is reimbursed by the purchaser for these accrued tax
liabilities and the amount of settlement reflects this adjustment. For the purchaser, a portion of such taxes calculated from the acquisition
date to the end of the calendar year is capitalized as a cost of the property in accordance with Japanese GAAP. In subsequent calendar
years, taxes paid in each fiscal year are expensed.
No taxes on property and equipment were capitalized for the six months ended June 30, 2023.
(p) Revenue Recognition
The details of main performance obligations concerning revenue generated from contracts between the Company and its customers andthe ordinary time to fulfil said performance obligations (ordinary time to recognize revenue) are as follows.
1.Sale of real estate property
Revenue from sale of real estate properties is recorded as revenue when a buyer who is a customer obtains control over a real estate
property following the seller’s fulfilment of its obligation to hand over the property which is stipulated in the contract associated withthe sale of real estate property(q) Method of hedge accounting
1.Method of hedge accounting
Deferred hedge accounting is applied.
2.Hedging instruments and hedged items
Hedging instruments : Interest rate swaps Hedged items : Interest rates on loans payable
3.Hedging policy
The Company enters into certain derivative transactions in accordance with its financial policy in order to manage risks, which isprovided in the Articles of Incorporation.
4.Method for assessing hedge effectiveness
The Company evaluates hedge effectiveness by comparing the cumulative changes in cash flow of hedging instruments and thehedged items and assessing the ratio between the changes.

3. U.S. Dollar Amounts
The Company maintains its accounting records in Japanese yen. The U.S. dollar amounts included in the accompanying financial
statements and notes there to represent the arithmetical result of translating Japanese yen into U.S. dollars at the rate of ¥144.99 = US$1,
the effective rate of exchange prevailing at June 30, 2023. The inclusion of such U.S. dollar amounts associated with the fiscal six months
ended June 30, 2023 is solely for the convenience of readers outside Japan. Such translations should not be construed as representations
that the Japanese yen amounts represent, or have been, or could be converted into, U.S. dollars at that or any other rate.

4. Allowance for temporary differences adjustment
For the six months ended December 31, 2022
On the Balance Sheet, there are the increase and decrease of allowance for temporary differences adjustment.
(a). Reason, related assets and amounts(in thousands of yen)13

Allowance
Related assets,

Reason for

InitialBeginning

set asideetc.

occurrence

amountbalanceduringrights in trust

Amortization

EndingduringReason for reversal

balanceperiodperiodLeaseholdReversalofleasehold rights in¥ (131,332)¥ (6,130)‐‐¥ (6,130)¥ (131,332)¥ (6,130)‐‐¥ (6,130)

‐

trust

Total

(b). Method of reversal(i ) Leasehold rights in trust
Upon the sale of the relevant properties, the corresponding amount is scheduled to be reversed.

For the six months ended June 30, 2023
On the Balance Sheet, there are the increase and decrease of allowance for temporary differences adjustment.
(a). Reason, related assets and amounts(in thousands of yen)
Allowance
Related assets,

Reason for

InitialBeginning

set asideetc.

occurrence

amountbalanceduringrights in trust

Amortization

EndingduringbalanceperiodperiodLeaseholdReversalReason for reversalofleasehold rights in¥ (131,332)¥ (6,130)‐‐¥ (6,130)¥ (131,332)¥ (6,130)‐‐¥ (6,130)

‐

trust

Total

(in thousands of U.S dollars)
Allowance
Related assets,

Reason for

InitialBeginning

set asideetc.

occurrence

amountbalanceduringrights in trust

Amortization

EndingduringbalanceperiodperiodLeaseholdReversalReason for reversalofleasehold rights in$ (905)$ (42)-‐$ (42)$ (905)$ (42)-‐$ (42)

‐

trust

Total

(b). Method of reversal(i ) Leasehold rights in trust
Upon the sale of the relevant properties, the corresponding amount is scheduled to be reversed.

14

5. Cash and Cash Equivalents
Cash and cash equivalents shown in the statements of cash flows consist of the following balance sheet items.
As ofDecember 31,
2022

June 30,
2023

June 30,2023(in thousands of
U.S. dollars)(in thousands of yen)
Cash and bank deposits ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥Cash and bank deposits in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥Time deposits with maturities of more than¥
three months ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥Cash and cash equivalents ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

15,553,174
7,768,621¥¥

18,377,030
10,464,171$$

126,746
72,171(2,800,000)¥(800,000)$(5,517)

20,521,796¥

28,041,202$

193,400

6. Property and Equipment
The following tables show the summary of movement in property and equipment For the six months ended June 30, 2023.
At costBeginningbalance

Increase

Endingbalance

Decrease

Accumulated
depreciation

Depreciation
for the period

Net property andequipment(in thousands of yen)
Buildings ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥
Buildings and accompanying facilities∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Structures ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

19,479,753

¥

1,458

‐

‐

1,458

216

32

1,242

Tools, furniture and fixtures ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

1,228,513

54,039‐1,282,552

474,151

63,091

808,401

Leasehold rights ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

10,637,811‐‐

10,637,811‐‐

10,637,811

Construction in progress ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

714,997

12,602

7,268

720,331‐‐

720,331

Buildings in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Buildings and accompanying facilities
in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Structures in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

159,079,641

167,700‐

159,247,341

28,861,119

2,223,029

130,386,221

32,688,012

498,697‐

33,186,709

13,472,710

858,599

19,713,998

212,818

54,030‐266,849

115,188

5,674

151,661

Tools, furniture and fixtures in trust ∙∙∙∙∙

3,195,160

175,562‐

3,370,722

1,995,319

184,735

1,375,402

Land in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

241,319,447‐‐

241,319,447‐‐

241,319,447

Leasehold rights in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

14,934,534‐‐

14,934,534

553,70938,597

14,380,825

Construction in progress in trust ∙∙∙∙∙∙∙∙∙∙∙∙‐

25,767‐25,767‐‐

Total ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

488,800,705

7,268¥ 489,784,783

5,308,557

‐

¥

‐

2,945

¥

991,346¥‐¥

19,479,753¥

1,807,607

5,311,502¥

1,260,171¥

48,540,195

219,278¥

153,475¥

3,746,513

17,672,145
4,051,330

25,767¥441,244,588

At costBeginningbalance

Increase

Endingbalance

Decrease

Accumulated
depreciation

Depreciation
for the period

Net property andequipment(in thousands of U.S dollars)
Buildings ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙$

134,352

$

‐

$

‐

$

Buildings and accompanying facilities

36,613

20‐

134,352
36,633$

12,467
8,691

$

1,058

1,512

Structures ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

10

‐

‐

10

1

‐

8

Tools, furniture and fixtures ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

8,473

372

‐

8,845

3,270

435

5,575

Leasehold rights ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

73,369‐‐73,369‐‐73,369Construction in progress ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

4,931

86

50

4,968

‐

‐

4,968

Buildings in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Buildings and accompanying facilities
in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Structures in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

1,097,176

1,156

‐

1,098,333

199,055

15,332899,277

225,450

3,439‐

228,889

92,921

5,921

135,967

1,467

372

‐

1,840

794

39

1,046

Tools, furniture and fixtures in trust ∙∙∙∙∙

22,037

1,210‐

23,247

13,761

1,274

9,486

Land in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

1,664,386‐‐

1,664,386‐‐

1,664,386
99,184

Leasehold rights in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

103,003‐‐

103,003

3,818

266

Construction in progress in trust ∙∙∙∙∙∙∙∙∙∙∙∙

‐

177

‐

177

‐

‐

Total ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙$

3,371,271

$

6,837

$

50

$

3,378,059$

334,783$

25,839$

121,885
27,942177$

3,043,276

7.Fair Value of Investment and Rental Properties

15

The following tables show the net book value and the fair value of the investment and rental properties in the aggregate For the six
months ended December 31, 2022 and June 30, 2023.
Residential
As of / For the six months ended

December 31,
2022

June 30,
2023

June 30,2023(in thousands of
U.S. dollars)(in thousands of yen)
Net book value
Balance at the beginning of period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

34,567,566

Net increase (decrease) during period ∙∙∙∙∙∙∙∙∙∙
Balance at the end of period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(184,066)
34,383,500

Fair value ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

47,357,000¥

34,383,500$

237,143(172,720)
34,210,779¥

48,017,000(1,191)
235,952$

331,174Retail facilities
As of / For the six months ended

December 31,
2022

June 30,
2023

June 30,2023(in thousands of
U.S. dollars)(in thousands of yen)
Net book value
Balance at the beginning of period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

1,621,984

Net increase (decrease) during period ∙∙∙∙∙∙∙∙∙∙
Balance at the end of period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(16,661)
1,605,322

Fair value ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

2,380,000¥

1,605,322$

11,071(16,598)
1,588,724¥

2,380,000(114)
10,957$

16,414Hotel
As of / For the six months ended

December 31,
2022

June 30,2023(in thousands of yen)

June 30,2023(in thousands of
U.S. dollars)

Net book value
Balance at the beginning of period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

409,587,102

Net increase (decrease) during period ∙∙∙∙∙∙∙∙∙∙
Balance at the end of period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(2,284,122)
407,302,979

Fair value ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

482,833,730¥

407,302,979$

2,809,179(2,603,993)
404,698,985¥

510,566,211(17,959)
2,791,219$

3,521,389

Total
As of / For the six months ended

December 31,
2022

June 30,2023(in thousands of yen)

June 30,2023(in thousands of
U.S. dollars)

Net book value
Balance at the beginning of period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

445,776,652

Net increase (decrease) during period ∙∙∙∙∙∙∙∙∙∙
Balance at the end of period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(2,484,850)
443,291,801

Fair value ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

532,570,730¥

443,291,801$(2,793,312)
440,498,489¥

560,963,211

3,057,395(19,265)
3,038,130$

3,868,978Notes:
1. Fair value has been determined based on the appraisals or research provided by independent real estate appraisers.
2.For rental revenues and expenses For the six months ended December 31, 2022 and June 30, 2023, please refer to “Note 12: Rent Revenues－Real Estate and Expenses Related toProperty Rental Business“

8.Investment corporation bonds
The following table shows the details of investment corporation bonds For the six months ended June 30, 2023.

16

For the six months ended June 30, 2023
Beginning

EndingBeginning

EndingInterestbalancebalancebalancebalancerate (%)(in thousands of yen)
1st unsecured investment corporation bond(Issued on May 25, 2018 and due on May 25, 2023)(1)(2)
2nd unsecured investment corporation bond(Issued on May 25, 2018 and due on May 25, 2028) (1)(2)(in thousands of U.S. dollars)

1,000,000

‐

6,897

‐

0.400

1,000,000

1,000,000

6,897

6,897

0.800

2,000,000

2,000,000

13,794

13,7940.550

1,000,000

1,000,000

6,897

6,897

0.480

2,000,000

2,000,000

13,794

13,7940.900

1,200,000

1,200,000

8,276

8,276

0.850

‐

5,000,000‐

34,4851.000‐

1,200,000

‐

8,276

1.200

8,200,000

13,400,000

56,55592,420

3rd unsecured investment corporation bond(Issued on October 12, 2018 and due on October 12, 2023)(1)(3)
4th unsecured investment corporation bond(Issued on October 28, 2019 and due on October 28, 2024)(1)(4)
5th unsecured investment corporation bond(Issued on October 28, 2019 and due on October 26, 2029)(1)(4)
6th unsecured investment corporation bond(Issued on March 13, 2020 and due on March 13, 2030)(1)(3)
7th unsecured investment corporation bond(Issued on May 25, 2023 and due on May 25, 2026)(1)(5)
8th unsecured investment corporation bond(Issued on May 25, 2023 and due on May 25, 2028)(1)(5)
Total investment corporation bonds
Notes:(1)

The bonds were issued with pari passu conditions among specified investment corporation bonds.

(2)

The funds are mainly used to acquire properties in trust.

(3)

The funds are mainly used to repay existing borrowing.

(4)

The funds are mainly used for capital expenditures(5)

The funds are mainly used to redeem investment corporation bonds and repay existing borrowing.

(6)

Repayment schedule of investment corporation bonds for the next five years after each balance sheet date are as follows:

As ofWithin 1 year ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

June 30,
2023

June 30,2023(in thousands of yen)(in thousands of
U.S. dollars)

2,000,000 $

13,794

1‐2 years∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

1,000,000

6,897

2‐3 years∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

5,000,000

34,4853‐4 years∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙‐‐

4‐5 years∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

2,200,000

15,17317

9. Loans Payable
The following table shows the details of loans payable For the six months ended June 30, 2023.

Classificati
onName oflender

Beginningbalance

Increase

Decrease

Endingbalance

Beginningbalance(in thousands of yen)

Short‐termloanspayableIncrease

Decrease

Endingbalance(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

Maturitydate

MUFG
Bank, Ltd.

1,700,000‐

1,700,000‐

11,724‐

11,724‐0.318

24‐Jan‐23

Sumitomo
MitsuiTrust Bank,
Limited

6,800,000‐

6,800,000‐

46,899‐46,899‐0.318

24‐Jan‐23

MizuhoBank, Ltd.

1,733,000‐

1,733,000‐

11,952‐

11,952‐0.302

14‐Mar‐23

The
Shizuoka
Bank, Ltd.

200,000‐

200,000

‐

1,379

‐

1,379

‐

0.302

14‐Mar‐23

The Bank ofFukuoka,Ltd.

333,000‐

333,000

‐

2,296

‐

2,296

‐

0.302

14‐Mar‐23

MizuhoBank, Ltd.

386,000‐

386,000

‐

2,662

‐

2,662

‐

0.302

14‐Mar‐23

MUFG
Bank, Ltd.

1,275,000‐

1,275,000

‐

8,793

‐

8,793

‐

0.302

14‐Mar‐23

Sumitomo
MitsuiTrust Bank,
Limited2,100,000‐

2,100,000‐

14,483‐

14,483‐0.302

14‐Mar‐23

SBI Shinsei
Bank,
Limited

297,000‐

297,000

‐

2,048

‐

2,048

‐

0.302

14‐Mar‐23

Developme
nt Bank ofJapan Inc.

1,000,000‐

1,000,000

‐

6,897

‐

6,897

‐

0.302

14‐Mar‐23

The
Shizuoka
Bank, Ltd.

1,270,000‐

1,270,000

‐

8,759

‐

8,759

‐

0.302

14‐Mar‐23

MizuhoBank, Ltd.

1,215,500‐

1,215,500

‐

8,383

‐

8,383

‐

0.302

14‐Mar‐23

MUFG
Bank, Ltd.

199,000‐

199,000

‐

1,372

‐

1,372

‐

0.302

14‐Mar‐23

Sumitomo
MitsuiTrust Bank,
Limited

447,500‐

447,500

‐

3,086

‐

3,086

‐

0.302

14‐Mar‐23

The
NomuraTrust andBankingCo., Ltd.

800,000‐

800,000

‐

5,517

‐

5,517

‐

0.302

14‐Mar‐23

The
Shizuoka
Bank, Ltd.

375,000‐

375,000

‐

2,586

‐

2,586

‐

0.302

14‐Mar‐23

The Bank ofFukuoka,
Ltd.

525,000‐

525,000

‐

3,620

‐

3,620

‐

0.302

14‐Mar‐23

MizuhoBank, Ltd.

902,000‐

902,000

‐

6,221

‐

6,221

‐

0.302

14‐Mar‐23

MUFG
Bank, Ltd.

692,000‐

692,000

‐

4,772

‐

4,772

‐

0.302

14‐Mar‐23

Use ofproceeds(2)

Remarks

Unsecured
andunguaranteed

18Classificati
onName oflender

Beginningbalance

Increase

Decrease

Endingbalance

Beginningbalance(in thousands of yen)

Short‐termloanspayableIncrease

Decrease

Endingbalance(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

Maturity
date

Sumitomo
Mitsui
Banking
Corporation

681,000‐

681,000

‐

4,696

‐

4,696

‐

0.302

14‐Mar‐23

Sumitomo
MitsuiTrust Bank,
Limited

617,000‐

617,000

‐

4,255

‐

4,255

‐

0.302

14‐Mar‐23

Developme
nt Bank ofJapan Inc.

147,000‐

147,000

‐

1,013

‐

1,013

‐

0.302

14‐Mar‐23

Citibank,
N.A., Tokyo
Branch2,349,000‐

2,349,000‐

16,201‐

16,201‐

0.295

17‐Jun‐23

Developme
nt Bank ofJapan Inc.

1,000,000‐

1,000,000

‐

6,897

‐

6,897

‐

0.295

17‐Jun‐23

MizuhoBank, Ltd.

11,643,000‐‐

11,643,000

80,302‐‐80,3020.295

19‐Jul‐23

MUFG
Bank, Ltd.

11,567,000‐‐

11,567,000

79,777‐‐

79,7770.295

19‐Jul‐23

Sumitomo
Mitsui
Banking
Corporation

9,203,000‐‐

9,203,000

63,473‐‐63,4730.295

19‐Jul‐23

Sumitomo
MitsuiTrust Bank,
Limited

4,450,000‐‐

4,450,000

30,691‐‐

30,691

0.295

19‐Jul‐23

Citibank,
N.A., Tokyo
Branch5,120,000‐‐

5,120,000

35,312‐‐35,3120.295

19‐Jul‐23

SBI Shinsei
Bank,
Limited

5,513,000‐‐

5,513,000

38,023‐‐38,0230.295

19‐Jul‐23

Developme
nt Bank ofJapan Inc.

666,000‐‐

666,000

4,593

‐

‐

4,593

0.295

19‐Jul‐23

ResonaBank,
Limited.

1,335,000‐‐

1,335,000

9,207

‐

‐

9,207

0.295

19‐Jul‐23

The Ogaki
Kyoritsu
Bank, Ltd.

187,000‐‐

187,000

1,289

‐

‐

1,289

0.295

19‐Jul‐23

Sumitomo
Mitsui
Banking
Corporation

3,000,000‐‐

3,000,000

20,691‐‐

20,691

0.295

14‐Sep‐23

MizuhoBank, Ltd.

3,287,000‐‐

3,287,000

22,670‐‐22,6700.295

26‐Sep‐23

MUFG
Bank, Ltd.

2,600,000‐‐

2,600,000

17,932‐‐

17,9320.295

26‐Sep‐23

Sumitomo
Mitsui
Banking
Corporation

3,287,000‐‐

3,287,000

22,670‐‐22,6700.295

26‐Sep‐23

Sumitomo
MitsuiTrust Bank,
Limited1,000,000‐‐

1,000,000

6,897

‐

‐

6,897

0.295

26‐Sep‐23

Citibank,
N.A., Tokyo
Branch

667,000‐‐

667,000

4,600

‐

‐

4,600

0.295

26‐Sep‐23

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed

19Classificati
onName oflender

Beginningbalance

Increase

Decrease

Endingbalance

Beginningbalance(in thousands of yen)

Short‐termloanspayableIncrease

Decrease

Endingbalance(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

Maturitydate

SBI Shinsei
Bank,
Limited833,000‐‐

833,000

5,745

‐

‐

5,745

0.295

26‐Sep‐23

Developme
nt Bank ofJapan Inc.

500,000‐‐

500,000

3,448

‐

‐

3,448

0.295

26‐Sep‐23

ResonaBank,
Limited.

445,000‐‐

445,000

3,069

‐

‐

3,069

0.295

26‐Sep‐23

The
NomuraTrust andBankingCo., Ltd.

590,000‐‐

590,000

4,069

‐

‐

4,069

0.295

26‐Sep‐23

MizuhoBank, Ltd.

2,850,000‐‐

2,850,000

19,656‐‐

19,656

0.295

26‐Sep‐23

MUFG
Bank, Ltd.

2,133,000‐‐

2,133,000

14,711‐‐

14,711

0.295

26‐Sep‐23

Sumitomo
Mitsui
Banking
Corporation

2,521,500‐‐

2,521,500

17,390‐‐17,3900.295

26‐Sep‐23

Sumitomo
MitsuiTrust Bank,
Limited

1,328,500‐‐

1,328,500

9,162

‐

‐

9,162

0.295

26‐Sep‐23

SBI Shinsei
Bank,
Limited

1,244,000‐‐

1,244,000

8,579

‐

‐

8,579

0.295

26‐Sep‐23

Developme
nt Bank ofJapan Inc.

500,000‐‐

500,000

3,448

‐

‐

3,448

0.295

26‐Sep‐23

ResonaBank,
Limited.

442,000‐‐

442,000

3,048

‐

‐

3,048

0.295

26‐Sep‐23

MizuhoBank, Ltd.

500,000‐‐

500,000

3,448

‐

‐

3,448

0.295

26‐Sep‐23

Sumitomo
Mitsui
Banking
Corporation

500,000‐‐

500,000

3,448

‐

‐

3,448

0.295

26‐Sep‐23

Sumitomo
MitsuiTrust Bank,
Limited

500,000‐‐

500,000

3,448

‐

‐

3,448

0.295

26‐Sep‐23

Citibank,
N.A., Tokyo
Branch

355,000‐‐

355,000

2,448

‐

‐

2,448

0.295

26‐Sep‐23

SBI Shinsei
Bank,
Limited

355,000‐‐

355,000

2,448

‐

‐

2,448

0.295

26‐Sep‐23

Developme
nt Bank ofJapan Inc.

1,500,000‐‐

1,500,000

10,345‐‐

10,3450.295

26‐Sep‐23

ResonaBank,
Limited.

333,000‐‐

333,000

2,296

‐

‐

2,296

0.295

26‐Sep‐23

The Bank ofFukuoka,Ltd.

300,000‐‐

300,000

2,069

‐

‐

2,069

0.295

26‐Sep‐23

MizuhoBank, Ltd.

190,000‐

190,000

‐

1,310

‐

1,310

‐

0.295

26‐Sep‐23(3)

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed20Classificati
onName oflender

Beginningbalance

Increase

Decrease

Endingbalance

Beginningbalance(in thousands of yen)

Short‐termloanspayableIncrease

Decrease

Endingbalance(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

Maturitydate

MUFG
Bank, Ltd.

146,000‐

146,000

‐

1,006

‐

1,006

‐

0.295

26‐Sep‐23(3)

Sumitomo
Mitsui
Banking
Corporation

143,000‐

143,000

‐

986

‐

986

‐

0.295

26‐Sep‐23(3)

Sumitomo
MitsuiTrust Bank,
Limited

130,000‐

130,000

‐

896

‐

896

‐

0.295

26‐Sep‐23(3)Developme
nt Bank ofJapan Inc.

30,000‐30,000

‐

206

‐

206

‐

0.295

26‐Sep‐23(3)

Citibank,
N.A., Tokyo
Branch1,256,000‐‐

1,256,000

8,662

‐

‐

8,662

0.295

26‐Sep‐23

MizuhoBank, Ltd.

4,321,000‐‐

4,321,000

29,802‐‐29,8020.295

29‐Nov‐23

MizuhoBank, Ltd.

‐1,656,400‐

1,656,400‐

11,424‐

11,4240.295

16‐Jan‐24

MUFG
Bank, Ltd.

‐2,451,800‐

2,451,800‐

16,910‐16,9100.295

16‐Jan‐24

Sumitomo
Mitsui
Banking
Corporation‐

2,318,200‐

2,318,200‐

15,988‐15,9880.295

16‐Jan‐24

Sumitomo
MitsuiTrust Bank,
Limited‐1,312,600‐

1,312,600

‐

9,053

‐

9,053

0.295

16‐Jan‐24

Citibank,
N.A., Tokyo
Branch

‐1,500,000‐

1,500,000‐

10,345‐

10,3450.295

16‐Jan‐24

SBI Shinsei
Bank,
Limited‐169,000‐

169,000

‐

1,165

‐

1,165

0.295

16‐Jan‐24

Developme
nt Bank ofJapan Inc.

‐

300,000‐

300,000

‐

2,069

‐

2,069

0.295

16‐Jan‐24

ResonaBank,
Limited.

‐600,000‐

600,000

‐

4,138

‐

4,138

0.295

16‐Jan‐24

The
NomuraTrust andBankingCo., Ltd.

‐

100,000‐

100,000

‐

689

‐

689

0.295

16‐Jan‐24

MUFG
Bank, Ltd.

‐1,700,000‐

1,700,000‐

11,724‐

11,7240.295

24‐Jan‐24

Sumitomo
MitsuiTrust Bank,
Limited

‐6,800,000‐

6,800,000‐

46,899‐46,8990.295

24‐Jan‐24

MizuhoBank, Ltd.

‐

333,000‐

333,000

‐

2,296

‐

2,296

0.295

14‐Mar‐24

MUFG
Bank, Ltd.

‐

148,000‐

148,000

‐

1,020

‐

1,020

0.295

14‐Mar‐24

Sumitomo
MitsuiTrust Bank,
Limited

‐254,000‐

254,000

‐

1,751

‐

1,751

0.295

14‐Mar‐24

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed

21

Classificati
onName oflender

Beginningbalance

Increase

Decrease

Endingbalance

Beginningbalance(in thousands of yen)

Short‐termloanspayableLong‐term
loans
payableIncrease

Decrease

Endingbalance(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

Maturitydate

SBI Shinsei
Bank,
Limited

‐281,000‐

281,000

‐

1,938

‐

1,938

0.295

14‐Mar‐24

Developme
nt Bank ofJapan Inc.

‐

100,000‐

100,000

‐

689

‐

689

0.295

14‐Mar‐24

The
NomuraTrust andBankingCo., Ltd.

‐

700,000‐

700,000

‐

4,827

‐

4,827

0.295

14‐Mar‐24

The
Shizuoka
Bank, Ltd.

‐1,845,000‐

1,845,000‐

12,725‐

12,7250.295

14‐Mar‐24

The Bank ofFukuoka,
Ltd.

‐858,000‐

858,000

‐

5,917

‐

5,917

0.295

14‐Mar‐24

MUFG
Bank, Ltd.

‐85,000‐85,000

‐

586

‐

586

0.295

14‐Mar‐24

Sumitomo
MitsuiTrust Bank,
Limited‐

109,000‐

109,000

‐

751

‐

751

0.295

14‐Mar‐24

MizuhoBank, Ltd.

‐902,000

902,000

‐

‐

6,221

6,221

‐

0.295

14‐Mar‐24(3)

MUFG
Bank, Ltd.

‐

692,000

692,000

‐

‐

4,772

4,772

‐

0.295

14‐Mar‐24(3)

Sumitomo
Mitsui
Banking
Corporation‐

681,000

681,000

‐

‐

4,696

4,696

‐

0.295

14‐Mar‐24(3)

Sumitomo
MitsuiTrust Bank,
Limited

‐617,000

617,000

‐

‐

4,255

4,255

‐

0.295

14‐Mar‐24(3)Developme
nt Bank ofJapan Inc.

‐

147,000

147,000

‐

‐

1,013

1,013

‐

0.295

14‐Mar‐24(3)

SBI Shinsei
Bank,
Limited‐1,000,000‐

1,000,000

‐

6,897

‐

6,897

0.295

27‐Jun‐24

Total
short‐termloanspayable114,515,000

27,660,000

30,722,000

111,453,000

789,813

190,771

211,890768,694

MizuhoBank, Ltd.

1,250,000‐‐

1,250,000

8,621

‐

‐

8,621

0.745

13‐Oct‐23

Sumitomo
MitsuiTrust Bank,
Limited

1,065,000‐‐

1,065,000

7,345

‐

‐

7,345

0.745

13‐Oct‐23

Sumitomo
Mitsui
Banking
Corporation

1,250,000‐‐

1,250,000

8,621

‐

‐

8,621

0.745

13‐Oct‐23

MizuhoBank, Ltd.

1,250,000‐‐

1,250,000

8,621

‐

‐

8,621

0.845

11‐Oct‐24

Sumitomo
MitsuiTrust Bank,
Limited

1,060,000‐‐

1,060,000

7,310

‐

‐

7,310

0.845

11‐Oct‐24

Sumitomo
Mitsui
Banking
Corporation

1,250,000‐‐

1,250,000

8,621

‐

‐

8,621

0.845

11‐Oct‐24

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed(2)

Unsecured
andunguaranteed

22Classificati
onName oflender

Beginningbalance

Increase

Decrease

Endingbalance

Beginningbalance(in thousands of yen)

Long‐term
loans
payableIncrease

Decrease

Endingbalance(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

Maturitydate

SBI Shinsei
Bank,
Limited1,000,000‐

1,000,000

‐

6,897

‐

6,897

‐

0.750

27‐Jun‐23

MUFG
Bank, Ltd.

500,000‐

500,000

‐

3,448

‐

3,448

‐

0.750

27‐Jun‐23

MizuhoBank, Ltd.

2,442,000‐‐

2,442,000

16,842‐‐

16,8420.545

14‐Jul‐23

MUFG
Bank, Ltd.

2,220,000‐‐

2,220,000

15,311‐‐

15,311

0.545

14‐Jul‐23

Sumitomo
Mitsui
Banking
Corporation

1,997,000‐‐

1,997,000

13,773‐‐

13,7730.545

14‐Jul‐23

SBI Shinsei
Bank,
Limited

1,110,000‐‐

1,110,000

7,655

‐

‐

7,655

0.545

14‐Jul‐23

Citibank,
N.A., Tokyo
Branch1,000,000‐‐

1,000,000

6,897

‐

‐

6,897

0.545

14‐Jul‐23

Sumitomo
MitsuiTrust Bank,
Limited

890,000‐‐

890,000

6,138

‐

‐

6,138

0.545

14‐Jul‐23

MizuhoBank, Ltd.

3,287,500‐‐

3,287,500

22,673‐‐

22,673

0.545

26‐Sep‐23

Sumitomo
Mitsui
Banking
Corporation

3,287,500‐‐

3,287,500

22,673‐‐

22,673

0.545

26‐Sep‐23

MUFG
Bank, Ltd.

2,600,000‐‐

2,600,000

17,932‐‐

17,932

0.545

26‐Sep‐23

Sumitomo
MitsuiTrust Bank,
Limited1,000,000‐‐

1,000,000

6,897

‐

‐

6,897

0.545

26‐Sep‐23

SBI Shinsei
Bank,
Limited833,000‐‐

833,000

5,745

‐

‐

5,745

0.545

26‐Sep‐23

Citibank,
N.A., Tokyo
Branch

667,000‐‐

667,000

4,600

‐

‐

4,600

0.545

26‐Sep‐23

Developme
nt Bank ofJapan Inc.

500,000‐‐

500,000

3,448

‐

‐

3,448

0.545

26‐Sep‐23

ResonaBank,
Limited.

445,000‐‐

445,000

3,069

‐

‐

3,069

0.545

26‐Sep‐23

The
NomuraTrust andBankingCo., Ltd.

166,000‐‐

166,000

1,144

‐

‐

1,144

0.545

26‐Sep‐23

AEON
Bank, Ltd.

333,000‐‐

333,000

2,296

‐

‐

2,296

0.545

26‐Sep‐23

AozoraBank, Ltd.

1,000,000‐‐

1,000,000

6,897

‐

‐

6,897

0.594

29‐Mar‐24

THE
NISHI‐NI
PPON
CITY
BANK,
LTD.

921,000‐‐

921,000

6,352

‐

‐

6,352

0.594

29‐Mar‐24

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed

23

Classificati
onName oflender

Beginningbalance

Increase

Decrease

Endingbalance

Beginningbalance(in thousands of yen)

Increase

Decrease

Endingbalance(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

Maturitydate

The Tochigi
Bank, Ltd.

480,000‐‐

480,000

3,310

‐

‐

3,310

0.594

29‐Mar‐24

Kiraboshi
Bank, Ltd.

961,000‐‐

961,000

6,628

‐

‐

6,628

0.845

29‐Mar‐29

MizuhoBank, Ltd.

571,400‐

571,400

‐

3,940

‐

3,940

‐

0.400

16‐Jan‐23

MUFG
Bank, Ltd.

1,464,800‐

1,464,800‐

10,102‐

10,102‐0.400

16‐Jan‐23

Sumitomo
Mitsui
Banking
Corporation

1,331,200‐

1,331,200

‐

9,181

‐

9,181

‐

0.400

16‐Jan‐23

Sumitomo
MitsuiTrust Bank,
Limited628,600‐

628,600

‐

4,335

‐

4,335

‐

0.400

16‐Jan‐23

Citibank,
N.A., Tokyo
Branch1,000,000‐

1,000,000

‐

6,897

‐

6,897

‐

0.400

16‐Jan‐23

SBI Shinsei
Bank,
Limited

200,000‐

200,000

‐

1,379

‐

1,379

‐

0.400

16‐Jan‐23

ResonaBank,
Limited.

600,000‐

600,000

‐

4,138

‐

4,138

‐

0.400

16‐Jan‐23

MizuhoBank, Ltd.

571,400‐‐

571,400

3,940

‐

‐

3,940

0.499

16‐Jan‐24

Long‐term
loans
payableMUFG
Bank, Ltd.

1,464,800‐‐

1,464,800

10,102‐‐

10,102

0.499

16‐Jan‐24

Sumitomo
Mitsui
Banking
Corporation

1,331,200‐‐

1,331,200

9,181

‐

‐

9,181

0.499

16‐Jan‐24

Sumitomo
MitsuiTrust Bank,
Limited628,600‐‐

628,600

4,335

‐

‐

4,335

0.499

16‐Jan‐24

Citibank,
N.A., Tokyo
Branch1,000,000‐‐

1,000,000

6,897

‐

‐

6,897

0.499

16‐Jan‐24

SBI Shinsei
Bank,
Limited

200,000‐‐

200,000

1,379

‐

‐

1,379

0.499

16‐Jan‐24

ResonaBank,
Limited.

600,000‐‐

600,000

4,138

‐

‐

4,138

0.499

16‐Jan‐24

MizuhoBank, Ltd.

1,171,400‐‐

1,171,400

8,079

‐

‐

8,079

0.563

16‐Jul‐24

MUFG
Bank, Ltd.

1,464,800‐‐

1,464,800

10,102‐‐

10,1020.563

16‐Jul‐24

Sumitomo
Mitsui
Banking
Corporation

1,331,200‐‐

1,331,200

9,181

‐

‐

9,181

0.563

16‐Jul‐24

Sumitomo
MitsuiTrust Bank,
Limited628,600‐‐

628,600

4,335

‐

‐

4,335

0.563

16‐Jul‐24

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed

24Classificati
onName oflender

Beginningbalance

Increase

Decrease

Endingbalance

Beginningbalance(in thousands of yen)

Long‐term
loans
payableIncrease

Decrease

Endingbalance(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

Maturity
date

Citibank,
N.A., Tokyo
Branch1,000,000‐‐

1,000,000

6,897

‐

‐

6,897

0.563

16‐Jul‐24

SBI Shinsei
Bank,
Limited

200,000‐‐

200,000

1,379

‐

‐

1,379

0.563

16‐Jul‐24

MizuhoBank, Ltd.

2,171,400‐‐

2,171,400

14,976‐‐

14,9760.595

16‐Jan‐25

MUFG
Bank, Ltd.

1,464,800‐‐

1,464,800

10,102‐‐

10,102

0.595

16‐Jan‐25

Sumitomo
Mitsui
Banking
Corporation

1,331,200‐‐

1,331,200

9,181

‐

‐

9,181

0.595

16‐Jan‐25

Sumitomo
MitsuiTrust Bank,
Limited628,600‐‐

628,600

4,335

‐

‐

4,335

0.595

16‐Jan‐25

SBI Shinsei
Bank,
Limited

200,000‐‐

200,000

1,379

‐

‐

1,379

0.595

16‐Jan‐25

MizuhoBank, Ltd.

2,170,400‐‐

2,170,400

14,969‐‐14,9690.745

16‐Jul‐25

MUFG
Bank, Ltd.

1,464,800‐‐

1,464,800

10,102‐‐

10,1020.745

16‐Jul‐25

Sumitomo
Mitsui
Banking
Corporation

1,331,200‐‐

1,331,200

9,181

‐

‐

9,181

0.745

16‐Jul‐25

Sumitomo
MitsuiTrust Bank,
Limited628,600‐‐

628,600

4,335

‐

‐

4,335

0.745

16‐Jul‐25

SBI Shinsei
Bank,
Limited

200,000‐‐

200,000

1,379

‐

‐

1,379

0.745

16‐Jul‐25

MizuhoBank, Ltd.

1,085,000‐

1,085,000

‐

7,483

‐

7,483

‐

0.413

16‐Jan‐23

MUFG
Bank, Ltd.

987,000‐

987,000

‐

6,807

‐

6,807

‐

0.413

16‐Jan‐23

Sumitomo
Mitsui
Banking
Corporation

987,000‐

987,000

‐

6,807

‐

6,807

‐

0.413

16‐Jan‐23

Sumitomo
MitsuiTrust Bank,
Limited

684,000‐

684,000

‐

4,717

‐

4,717

‐

0.413

16‐Jan‐23

Citibank,
N.A., Tokyo
Branch

500,000‐

500,000

‐

3,448

‐

3,448

‐

0.413

16‐Jan‐23

Developme
nt Bank ofJapan Inc.

300,000‐

300,000

‐

2,069

‐

2,069

‐

0.413

16‐Jan‐23

AEON
Bank, Ltd.

300,000‐

300,000

‐

2,069

‐

2,069

‐

0.413

16‐Jan‐23

The
NomuraTrust andBankingCo., Ltd.

100,000‐

100,000

‐

689

‐

689

‐

0.413

16‐Jan‐23

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed

25Classificati
onName oflender

Beginningbalance

Increase

Decrease

Endingbalance

Beginningbalance(in thousands of yen)

Increase

Decrease

Endingbalance(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

Maturitydate

MizuhoBank, Ltd.

712,000‐‐

712,000

4,910

‐

‐

4,910

0.525

16‐Jan‐24

MUFG
Bank, Ltd.

986,000‐‐

986,000

6,800

‐

‐

6,800

0.525

16‐Jan‐24

Sumitomo
Mitsui
Banking
Corporation

986,000‐‐

986,000

6,800

‐

‐

6,800

0.525

16‐Jan‐24

Sumitomo
MitsuiTrust Bank,
Limited

684,000‐‐

684,000

4,717

‐

‐

4,717

0.525

16‐Jan‐24

Citibank,
N.A., Tokyo
Branch

500,000‐‐

500,000

3,448

‐

‐

3,448

0.525

16‐Jan‐24

Developme
nt Bank ofJapan Inc.

300,000‐‐

300,000

2,069

‐

‐

2,069

0.525

16‐Jan‐24

AEON
Bank, Ltd.

300,000‐‐

300,000

2,069

‐

‐

2,069

0.525

16‐Jan‐24

The
NomuraTrust andBankingCo., Ltd.

100,000‐‐

100,000

689

‐

‐

689

0.525

16‐Jan‐24

AozoraBank, Ltd.

237,000‐‐

237,000

1,634

‐

‐

1,634

0.525

16‐Jan‐24

MizuhoBank, Ltd.

712,000‐‐

712,000

4,910

‐

‐

4,910

0.580

16‐Jul‐24

Long‐term
loans
payableMUFG
Bank, Ltd.

986,000‐‐

986,000

6,800

‐

‐

6,800

0.580

16‐Jul‐24

Sumitomo
Mitsui
Banking
Corporation

986,000‐‐

986,000

6,800

‐

‐

6,800

0.580

16‐Jul‐24

Sumitomo
MitsuiTrust Bank,
Limited

684,000‐‐

684,000

4,717

‐

‐

4,717

0.580

16‐Jul‐24

Citibank,
N.A., Tokyo
Branch

500,000‐‐

500,000

3,448

‐

‐

3,448

0.580

16‐Jul‐24

Developme
nt Bank ofJapan Inc.

300,000‐‐

300,000

2,069

‐

‐

2,069

0.580

16‐Jul‐24

AEON
Bank, Ltd.

300,000‐‐

300,000

2,069

‐

‐

2,069

0.580

16‐Jul‐24

The
NomuraTrust andBankingCo., Ltd.

100,000‐‐

100,000

689

‐

‐

689

0.580

16‐Jul‐24

AozoraBank, Ltd.

375,000‐‐

375,000

2,586

‐

‐

2,586

0.580

16‐Jul‐24

MizuhoBank, Ltd.

1,212,000‐‐

1,212,000

8,359

‐

‐

8,359

0.595

16‐Jan‐25

MUFG
Bank, Ltd.

986,000‐‐

986,000

6,800

‐

‐

6,800

0.595

16‐Jan‐25

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed

26

Classificati
onName oflender

Beginningbalance

Increase

Decrease

Endingbalance

Beginningbalance(in thousands of yen)

Long‐term
loans
payableIncrease

Decrease

Endingbalance(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

Maturity
date

Sumitomo
Mitsui
Banking
Corporation

986,000‐‐

986,000

6,800

‐

‐

6,800

0.595

16‐Jan‐25

Sumitomo
MitsuiTrust Bank,
Limited

684,000‐‐

684,000

4,717

‐

‐

4,717

0.595

16‐Jan‐25

Developme
nt Bank ofJapan Inc.

300,000‐‐

300,000

2,069

‐

‐

2,069

0.595

16‐Jan‐25

AEON
Bank, Ltd.

300,000‐‐

300,000

2,069

‐

‐

2,069

0.595

16‐Jan‐25

The
NomuraTrust andBankingCo., Ltd.

100,000‐‐

100,000

689

‐

‐

689

0.595

16‐Jan‐25

AozoraBank, Ltd.

375,000‐‐

375,000

2,586

‐

‐

2,586

0.595

16‐Jan‐25

MizuhoBank, Ltd.

1,211,000‐‐

1,211,000

8,352

‐

‐

8,352

0.745

16‐Jul‐25

MUFG
Bank, Ltd.

986,000‐‐

986,000

6,800

‐

‐

6,800

0.745

16‐Jul‐25

Sumitomo
Mitsui
Banking
Corporation

986,000‐‐

986,000

6,800

‐

‐

6,800

0.745

16‐Jul‐25

Sumitomo
MitsuiTrust Bank,
Limited

684,000‐‐

684,000

4,717

‐

‐

4,717

0.745

16‐Jul‐25

Developme
nt Bank ofJapan Inc.

300,000‐‐

300,000

2,069

‐

‐

2,069

0.745

16‐Jul‐25

AEON
Bank, Ltd.

300,000‐‐

300,000

2,069

‐

‐

2,069

0.745

16‐Jul‐25

The
NomuraTrust andBankingCo., Ltd.

100,000‐‐

100,000

689

‐

‐

689

0.745

16‐Jul‐25

AozoraBank, Ltd.

375,000‐‐

375,000

2,586

‐

‐

2,586

0.745

16‐Jul‐25

The Tokyo
Star Bank,
Limited

700,000‐‐

700,000

4,827

‐

‐

4,827

0.745

16‐Jul‐25

MizuhoBank, Ltd.

2,882,000‐‐

2,882,000

19,877‐‐

19,8770.462

16‐Jan‐24

San ju San
Bank, Ltd.

662,000‐‐

662,000

4,565

‐

‐

4,565

0.462

16‐Jan‐24

San ju San
Bank, Ltd.

1,700,000‐‐

1,700,000

11,724‐‐

11,7240.486

15‐Apr‐24

San ju San
Bank, Ltd.

1,000,000‐‐

1,000,000

6,897

‐

‐

6,897

0.595

15‐Apr‐25

THE
NISHI‐NI
PPON
CITY
BANK,
LTD.

1,000,000‐‐

1,000,000

6,897

‐

‐

6,897

0.745

15‐Oct‐25

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed27

Classificati
onName oflender

Beginningbalance

Increase

Decrease

Endingbalance

Beginningbalance(in thousands of yen)

Long‐term
loans
payableIncrease

Decrease

Endingbalance(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

Maturity
date

Sumitomo
MitsuiTrust Bank,
Limited

1,550,000‐

1,550,000‐

10,690‐10,690‐0.417

06‐Jan‐23

Sumitomo
MitsuiTrust Bank,
Limited

3,050,000‐‐

3,050,000

21,035‐‐21,0350.643

06‐Jan‐25

MomijiBank,Ltd.

961,000‐‐

961,000

6,628

‐

‐

6,628

0.643

06‐Jan‐25

The Kiyo
Bank, Ltd.

480,000‐‐

480,000

3,310

‐

‐

3,310

0.643

06‐Jan‐25

MizuhoBank, Ltd.

634,000‐‐

634,000

4,372

‐

‐

4,372

0.487

16‐Mar‐25

ResonaBank,
Limited.

300,000‐‐

300,000

2,069

‐

‐

2,069

0.487

16‐Mar‐25

Developme
nt Bank ofJapan Inc.

1,000,000‐‐

1,000,000

6,897

‐

‐

6,897

0.487

16‐Mar‐25

The Bank ofFukuoka,Ltd.

333,000‐‐

333,000

2,296

‐

‐

2,296

0.487

16‐Mar‐25

The
NomuraTrust andBankingCo., Ltd.

333,000‐‐

333,000

2,296

‐

‐

2,296

0.487

16‐Mar‐25

The
Shizuoka
Bank, Ltd.

200,000‐‐

200,000

1,379

‐

‐

1,379

0.487

16‐Mar‐25

The
Yamaguchi
Bank, Ltd.

411,000‐‐

411,000

2,834

‐

‐

2,834

0.487

16‐Mar‐25

MUFG
Bank, Ltd.

850,000‐

850,000

‐

5,862

‐

5,862

‐

0.352

16‐Mar‐23

Sumitomo
MitsuiTrust Bank,
Limited

1,090,000‐

1,090,000

‐

7,517

‐

7,517

‐

0.352

16‐Mar‐23

The Bank ofFukuoka,Ltd.

333,000‐

333,000

‐

2,296

‐

2,296

‐

0.352

16‐Mar‐23

MizuhoBank, Ltd.

582,000‐‐

582,000

4,014

‐

‐

4,014

0.545

16‐Mar‐25

MUFG
Bank, Ltd.

628,000‐‐

628,000

4,331

‐

‐

4,331

0.545

16‐Mar‐25

Sumitomo
MitsuiTrust Bank,
Limited

1,090,000‐‐

1,090,000

7,517

‐

‐

7,517

0.545

16‐Mar‐25

SBI Shinsei
Bank,
Limited

570,000‐‐

570,000

3,931

‐

‐

3,931

0.545

16‐Mar‐25

ResonaBank,
Limited.

500,000‐‐

500,000

3,448

‐

‐

3,448

0.545

16‐Mar‐25

The
NomuraTrust andBankingCo., Ltd.

270,000‐‐

270,000

1,862

‐

‐

1,862

0.545

16‐Mar‐25

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed28

Classificati
onName oflender

Beginningbalance

Increase

Decrease

Endingbalance

Beginningbalance(in thousands of yen)

Long‐term
loans
payableIncrease

Decrease

Endingbalance(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

Maturitydate

AozoraBank, Ltd.

1,000,000‐‐

1,000,000

6,897

‐

‐

6,897

0.545

16‐Mar‐25

The
Shizuoka
Bank, Ltd.

270,000‐‐

270,000

1,862

‐

‐

1,862

0.545

16‐Mar‐25

The
KagawaBank, Ltd.

500,000‐‐

500,000

3,448

‐

‐

3,448

0.545

16‐Mar‐25

The
Yamaguchi
Bank, Ltd.

550,000‐‐

550,000

3,793

‐

‐

3,793

0.545

16‐Mar‐25

The Chukyo
Bank, Ltd.

961,000‐‐

961,000

6,628

‐

‐

6,628

0.545

16‐Mar‐25

The Tokyo
Star Bank,
Limited

1,582,000‐‐

1,582,000

10,911‐‐

10,911

0.395

20‐Jul‐24

The Tokyo
Star Bank,
Limited

600,000‐‐

600,000

4,138

‐

‐

4,138

0.395

20‐Jul‐25

The Tokyo
Star Bank,
Limited

1,190,000‐‐

1,190,000

8,207

‐

‐

8,207

0.545

13‐Oct‐27

Sumitomo
MitsuiTrust Bank,
Limited

‐1,550,000‐

1,550,000‐

10,690‐10,6900.295

24‐Jan‐24

MizuhoBank, Ltd.

‐3,001,500‐

3,001,500‐

20,701‐

20,7010.425

14‐Mar‐26

MUFG
Bank, Ltd.

‐1,326,000‐

1,326,000

‐

9,145

‐

9,145

0.425

14‐Mar‐26

Sumitomo
MitsuiTrust Bank,
Limited‐2,293,500‐

2,293,500‐

15,818‐15,8180.425

14‐Mar‐26

Developme
nt Bank ofJapan Inc.

‐

900,000‐

900,000

‐

6,207

‐

6,207

0.425

14‐Mar‐26

MUFG
Bank, Ltd.

‐765,000‐

765,000

‐

5,276

‐

5,276

0.425

14‐Mar‐26

Sumitomo
MitsuiTrust Bank,
Limited

‐981,000‐

981,000

‐

6,765

‐

6,765

0.425

14‐Mar‐26

Developme
nt Bank ofJapan Inc.

‐

1,000,000‐

1,000,000

‐

6,897

‐

6,897

0.375

19‐Jun‐26

MUFG
Bank, Ltd.

‐

500,000‐

500,000

‐

3,448

‐

3,448

0.375

27‐Jun‐26

Total
long‐term
loans
payable118,082,000

12,317,000

16,062,000

114,337,000

814,41484,950110,780

788,585

232,597,000

39,977,000

46,784,000

225,790,000

1,604,227

275,722322,670

1,557,279

Total loans payable

Use ofproceeds

Remarks(2)

Unsecured
andunguarante
ed

Notes:(1)

The average interest rate is weighted by the balance of each borrowing at the end of the period and rounded to three decimal places.

(2)

The funds are mainly used to acquire properties in trust and for repayment of loans payable.

29

(3)

The loan was repaid prior to maturity on June 30, 2023.

(4)

Long‐term loans payable include current portion.

(5)

Repayment schedule of long‐term loans payable for the next five years after each balance sheet date are as follows:

As ofWithin 1 year ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

June 30,
2023

June 30,2023(in thousands of yen)(in thousands of
U.S. dollars)¥

46,139,000 $

318,221

1‐2 years∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

42,243,000

291,351

2‐3 years∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

23,804,000

164,176

3‐4 years∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙‐‐

4‐5 years∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

1,190,000

8,207

10. Net Assets
The Company issues only non‐par value units in accordance with the Investment Trust Act, and the entire amount of the issue price of
new investment units is allocated to unitholders’ capital within net assets. The Company is required to maintain net assets of at least¥50,000 thousand (US$344 thousand) as required by Article 67‐4 of the Investment Trust Act.
The number of investment units authorized was 10,000,000 units as of December 31, 2022 and June 30, 2023.
The number of investment units issued and outstanding were 6,096,840 units as of December 31, 2022 and June 30, 2023, respectively.

11.Appropriation of Retained Earnings
In accordance with the distribution policy in Article 17, Paragraph 1, of the Company’s articles of incorporation which stipulates making
distributions in excess of 90% of distributable profit as defined in Article 67‐15, Paragraph 1 of the Special Taxation Measures Act of Japanfor the fiscal period.
The following table shows the appropriation of retained earnings For the six months ended December 31, 2022 and June 30, 2023.
For the six months ended

December 31,
2022

June 30,
2023

June 30,2023(in thousands of
U.S. dollars)(in thousands of yen)
Unappropriated retained earnings ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥13,742,562

Distributions ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(5,072,570)

Retained earnings / losses carried forward ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥8,669,991¥

17,583,734$(8,925,773)¥

8,657,960

121,275(61,561)$

59,714The distribution in respect of the six months ended June 30, 2023 of ¥1,464 (US$10.0) per investment unit, amounting to a total
distribution of ¥8,925,773thousand (US$61,561thousand) was proposed and approved at the Board of Directors meeting on August 25,
2023. These financial statements do not reflect these distributions payable.
Cash distributions per investment unit were ¥832 and ¥1,464 (US$10.0) For the six months ended December 31, 2022 and June 30, 2023
respectively.
Notes related to provision and reversal of allowance for temporary differences adjustment is below.
For the six months ended December 31, 2022
Not Applicable
For the six months ended June 30, 2023
Not Applicable

12. Rent Revenues － Real Estate and Expenses Related to Property Rental Business

30

Rent revenue – real estate and expenses related to property rental business For the six months ended December 31, 2022 and June 30,2023 consist of the following:
For the six months ended

December 31,
2022

June 30,
2023

June 30,2023(in thousands of
U.S. dollars)(in thousands of yen)
Rental revenue – real estate:
Rental revenue and common area charges (*)∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥Other ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total rental revenue – real estate ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥10,037,349
145,401
10,182,751¥

Expenses related to property rental business:
Facility management fees ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥Property related taxes ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Insurance expense ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Depreciation ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Other ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total expenses related to property rental business ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥Operating income from property leasing activities∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥426,784
739,194
20,233
3,323,690
96,6344,606,538
5,576,212¥(*)Variable rental revenue of hotels ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥3,118,811

11,729,696
271,259
12,000,955

$

$

¥
¥

445,723596,132
20,4753,311,017
114,992
4,488,341
7,512,613

$
$

3,074
4,111
141
22,836793
30,95651,814¥4,615,327$

31,832¥80,9001,870
82,770$13. Management Contract Revenue
For the six months ended

December 31,
2022

June 30,
2023

June 30,2023(in thousands of
U.S. dollars)(in thousands of yen)Management contract revenue:
Hotel management revenue∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥Hotel management expenses ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Management contract revenue ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥5,096,139
3,349,290
1,746,848

Insurance expense ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Depreciation ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Other ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total management contract expenses ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥Operating income (loss) from management contract ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥136,505
432,613550
569,669
1,177,179¥¥

8,388,052
4,474,026
3,914,026¥¥

152,464
435,496
61,368649,329
3,264,696$$

57,85230,857
26,995

$
$

1,051
3,003
423
4,478
22,516

14. Income Taxes
The Company is subject to corporate income taxes in Japan. The Company may deduct from its taxable income the amounts distributed
to its unitholders, provided the requirements are met under the Special Taxation Measures Act of Japan. Under this act, the Company
must meet a number of tax requirements, including a requirement to distribute in excess of 90% of distributable profit for the fiscal
period in order to be able to deduct such amounts. If the Company does not satisfy all of the requirements, the entire taxable income of
the Company will be subject to regular corporate income taxes in Japan.
The Company has a policy of making distributions in excess of 90% of its distributable profit for the fiscal period to qualify for conditions
set forth in the Special Taxation Measures Act of Japan to achieve a deduction of distributions for income tax purpose and it distributes
approximately 100% of distributable profit. Hence, the Company has treated the distributions as a tax allowable deduction as defined in
the Special Taxation Measures Act of Japan.
(a) Reconciliations of the Company’s effective tax rates and statutory tax rates are as follows:
For the six months ended

December 31,
2022

June 30,
2023(Rate)
Statutory tax rates ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Deductible cash distributions ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Increase (decrease) in valuation allowance ∙∙∙∙∙∙∙∙∙∙∙

31.46 %
(31.44)(3.60)

31.46 %
(31.50)(3.52)

31

Expiration of net operating loss carried forward∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

3.58

3.55

Other ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

0.01

0.01

Effective tax rates ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

0.01 %

0.01 %(b) Deferred tax assets and liabilities consist of the following:
As of

December 31,
2022

June 30,
2023

June 30,2023(in thousands of
U.S. dollars)(in thousands of yen)
Deferred tax assets:
Enterprise tax payable
Buildings and other (merger) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Land (merger) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙Net loss carried forward(*1) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

615
186,398
116,724
1,609,063

615
185,229

¥

4
1,277

$

10,656
162,054449,589

116,724
1,288,595
10,727
174,196445,643

805
8,887
73
1,201
3,073

Subtotal ‐ deferred tax assets ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Valuation allowance for tax loss carried forward
Valuation allowance for the sum of deductible temporary differences

2,535,101(1,609,063)(926,038)

2,221,732(1,288,595)(933,137)

15,323(8,887)(6,435)

Subtotal ‐ valuation allowance(*2) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(2,535,101)(2,221,732)(15,323)

Total ‐ deferred tax assets ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

‐

‐

-

Asset retirement obligations ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Fixed‐term leasehold ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Adjustment of acquisition price (Overseas properties)(*1)The amounts of tax loss carried forward and the deferred tax assets are indicated by carry‐forward period.
For the six months ended December 31, 2022

Within 1 year

1‐2 years

2‐3 years

3‐4 years

4‐5 years

Over 5 years

Total(in thousands of yen)Tax loss carried forward (a)330,700

Valuation allowance ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Deferred tax assets ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙‐

1,278,362(1,278,362)

1,609,063(1,609,063)

‐

‐

‐

‐

‐

‐

‐

(330,700)

‐

‐

‐

‐

‐

‐

‐

(a)Tax loss carried forward shown in the above table is after multiplying the statutory tax rate.
For the six months ended June 30, 2023

Within 1 year

1‐2 years

2‐3 years

3‐4 years

4‐5 years

Over 5 years

Total(in thousands of yen)
Valuation allowance ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

‐

‐

‐

‐

‐

1,288,595(1,288,595)

Deferred tax assets ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

‐

‐

‐

‐

‐

‐

Tax loss carried forward (a)‐Within 1 year

‐

‐

‐

‐

1‐2 years

2‐3 years

3‐4 years

4‐5 years

Over 5 years

1,288,595(1,288,595)
‐

Total

(in thousands of U.S. dollars)
Tax loss carried forward (a)Valuation allowance ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Deferred tax assets ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

‐
‐
‐

‐
‐
‐

‐
‐
‐

‐
‐
‐

‐
‐
‐

8,887
(8,887)8,887(8,887)‐‐(a) Tax loss carried forward shown in the above table is after multiplying the statutory tax rate.
(*2) The valuation allowance decreased by 313,369 thousand yen (US$2,161thousand). This decrease is mainly due to an decrease in tax
loss carryforwards.

32

15. Leases(a) Lease rental revenues
The future minimum rental revenues pursuant to existing rental contracts as of December 31, 2022 and June 30, 2023 scheduled to bereceived are summarized as follows:
As of

December 31,
2022

June 30,
2023

June 30,2023

Due within one year ∙∙∙∙∙∙∙∙∙∙∙∙¥
Due over one year ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

13,068,093
44,885,587¥

13,119,003
39,197,781(in thousands of
U.S. dollars)
90,482$
270,348

Total ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

57,953,680¥

52,316,785$(in thousands of yen)

360,830(b) Lease rental expenses
The future minimum rental expenses pursuant to existing rental contracts as of December 31, 2022 and June 30, 2023. scheduled to be
paid are summarized as follows:
As of

December 31,
2022

June 30,
2023

June 30,2023

Due within one year ∙∙∙∙∙∙∙∙∙∙∙∙¥
Due over one year ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

320,447
8,229,974¥

320,951
8,089,958(in thousands of
U.S. dollars)
2,213$
55,796

Total ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

8,550,422¥

8,410,909$(in thousands of yen)

58,01016. Financial Instruments(a) Qualitative information for financial instruments(i) Policy for financial instrument transactions
The Company raises funds through loans payable , investment corporation bonds, and the issuance of investment units toacquire real estate properties, pay property maintenance expenses and/or repay existing loans payable. Surplus funds aremanaged carefully through investments in financial instruments taking into account liquidity and safety in light of the current
financial market conditions. Derivative instruments are used only for hedging purposes and not for speculation.
(ii) Nature and extent of risks arising from financial instruments and risk management
The funds raised through loans payable and investment corporation bonds are mainly used to acquire real estate properties orproperties in trust and for the repayment of existing loans payable. Liquidity risks relating to loans payable are managed by thefinance department of the Asset Manager by preparing monthly plans for funds, and monitoring the covenants defined in loan
agreements.
(iii) Supplemental information for financial instruments
The fair value of financial instruments is estimated using valuation techniques which contain various assumptions. If othervaluation models or assumptions were used, the estimated value may differ.
(b) Quantitative information for financial instruments
The following table shows the carrying amounts, fair values and valuation differences of financial instruments for which fairvalue is available as of December 31, 2022 and June 30, 2023. Furthermore, “cash and deposits” and “short‐term loans payable”
are omitted as they are settled with cash and in a short span of time and are therefore similar in fair value to the book value. Also,“tenant leasehold and security deposits in trust” is omitted as it lacks in significance.
As ofDecember 31,
2022

June 30,
2023

June 30,
2023

33

Carryingamounts

Fair value

Carrying
amounts

Difference

Fair value

Carrying
amounts

Difference(in thousands of yen)

Fair value

Difference(in thousands of U.S. dollars)

Assets:Current:(1) Investment securities ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥17,856,387¥

17,553,373¥(303,014)¥

17,856,387¥

18,935,791¥

1,079,404$

123,155$

130,600$

7,444

Total assets ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥17,856,387¥

17,553,373¥(303,014)¥

17,856,387¥

18,935,791¥

1,079,404$

123,155$

130,600$

7,444

Liabilities:(2) Current portion of investment
corporation bonds ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(3) Current portion of long‐term loans
payable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

3,000,000

2,970,200(29,800)

2,000,000

1,996,000(4,000)13,794

13,766(27)

42,405,000

42,405,000‐

46,139,000

46,139,000‐

318,221318,221‐(1,607)(4) Investment corporation bonds ∙∙∙∙∙∙∙∙

5,200,000

4,734,340(465,660)

11,400,000

11,166,860(233,140)

78,62677,018(5) Long‐term loans payable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

75,677,000

75,677,000‐

68,198,000

68,198,000‐

470,363

470,363

Total liabilities ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥126,282,000¥

125,786,540¥(495,460)¥

127,737,000¥

127,499,860¥(237,140)$

881,005$

879,370$(1,635)(6) Derivatives∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥142,721¥

142,721¥‐¥(486,218)¥(486,218)¥‐$(3,353)$(3,353)

$

‐

‐

Notes

(i)The methods and assumptions used to estimate fair value are as follows:(1) Investment securities
For preferred securities, the market value is the amount equivalent to the equity interest in the net assets at market value obtained by valuing the assets and liabilities of theinvestee at market value.
(2) Current portion of Investment corporation bonds(4) Investment corporation bonds
The fair values of investment corporate bonds are determined based on the present value of contractual cash flows discounted at current market interest rates which would
be applicable to new investment corporate bonds under the same conditions and terms.
(3)Current portion of long‐term loans payable(5)Long‐term loans payable
Long‐term loans payable with floating interest rates reflecting changes in market rates within a short term period are stated at their carrying amounts as their carrying
amounts approximate their fair values.
(6)Derivatives
Please refer to the “18. Derivatives” below.

(ⅱ) Cash flow schedule of financial liabilities after the balance sheet dateWithin 1 year

1‐2 years

2‐3 years

3‐4 years

4‐5 years

Over 5 years(in thousands of yen)
As of December 31, 2022:
Current portion of investment corporation
bonds ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Current portion of long‐term loans payable ∙∙∙Investment corporation bonds ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Long‐term loans payable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

3,000,000

‐

‐

‐

‐

‐

42,405,000‐‐‐
1,000,000
34,127,000‐‐
39,399,000

‐
‐
‐

‐
‐
1,190,000‐
4,200,000
961,000

Total ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

45,405,000

As of June 30, 2023:
Current portion of investment corporation
bonds ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

35,127,000¥

39,399,000

¥

‐

¥

1,190,000¥

5,161,000

2,000,000

‐

‐

‐

‐

‐

Current portion of long‐term loans payable ∙∙∙46,139,000

‐

‐

‐

‐

‐

Investment corporation bonds ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙‐

1,000,000

5,000,000‐

2,200,000

3,200,000

Long‐term loans payable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙‐

42,243,000

23,804,000‐

1,190,000

Total ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

48,139,000¥

Within 1 year

43,243,000¥

1‐2 years

28,804,000¥

2‐3 years‐¥

3‐4 years

3,390,000

961,000¥

4‐5 years

4,161,000

Over 5 years(in thousands of U.S. dollars)
As of June 30, 2023:
Current portion of investment corporation
bonds ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Current portion of long‐term loans payable ∙∙∙Investment corporation bonds ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Long‐term loans payable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

13,794

‐

‐

‐

‐

‐

318,221
‐
‐

‐
6,897
291,351‐
34,485
164,176‐‐‐‐
15,173
8,207‐
22,070
6,628

Total ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙$

332,016$

298,248$

198,661$‐$

23,380$28,69834

17. Investment securities
As ofDecember 31,
2022
Carrying
amounts

June 30,2023

Fair value

Carrying
amounts

Difference

June 30,2023

Fair value

Carrying
amounts

Difference(in thousands of yen)

Fair value

Difference(in thousands of U.S. dollars)

Shares in an Affiliated Company ∙∙∙∙¥

17,856,387¥

17,553,373¥ (303,014)¥

17,856,387¥

18,935,791¥ 1,079,404$

123,155$

130,600$

7,444

Total ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

17,856,387¥

17,553,373¥ (303,014)¥

17,856,387¥

18,935,791¥ 1,079,404$

123,155$

130,600$

7,444

18. Derivatives
Information on derivative transactions undertaken by the Company as of December 31, 2022 and June 30, 2023 is as follows.
(a) Transactions for which hedge accounting is not applied
As of December 31, 2022:
Not Applicable
As of June 30, 2023:
Contract amount
Method ofhedge
accounting

Type ofderivativetransaction

Main hedged
itemcurrency
exchange
forwardcontract
USD SellFuturetransactions
denominatedina foreign
currency

Fair
Value
(*1)

Over 1year

Total(in thousands of U.S. dollars)(in thousands of yen)

Principle
accounting
method¥5,158,490¥

1,872,600

Fair
Value
(*2)

Over 1
year

Total

¥

(490,769)$

35,578$12,915$(3,384)(*1) Calculation of fair value is based on information provided by financial institutions.

(b) Transactions for which hedge accounting is applied
As of December 31, 2022:
Contract amount(*1)
Method ofhedge
accounting

Type ofderivativetransaction

Principle
accounting
methodInterest rate
swap
transaction
floating ratereceivable
and Fixed
rate payable

Main hedged
item

Fair
Value
(*2)

Over 1year

Total(in thousands of yen)

Long‐term
borrowings¥

50,476,000¥ 36,687,000¥

142,721(*1) The interest rate swap contract amount is based on the notional principal amount.
(*2) Calculation of fair value is based on information provided by financial institutions.

As of June 30, 2023:
Contract amount(*1)
Method ofhedge
accounting

Type ofderivativetransaction

Principle
accounting
methodInterest rate
swap
transaction
floating ratereceivable
and Fixed
rate payable

Main hedged
item

Fair
Value
(*2)

Over 1year

Total(in thousands of U.S. dollars)(in thousands of yen)

Long‐term
borrowings¥

36,687,000¥ 18,441,000

Fair
Value
(*2)

Over 1
year

Total

¥

4,550

$

253,031$

127,188$(*1) The interest rate swap contract amount is based on the notional principal amount.
(*2) Calculation of fair value is based on information provided by financial institutions.

35

31

19. Asset Retirement Obligations
The Company has an obligation under a fixed‐term leasehold agreement to restore its leased land, which represents the land where
COMFORT HOTEL MAEBASHI, owned by the Company, is located upon the termination of agreement. The estimated period of useof property is estimated at 43 years based on the lease period per the agreement. The assets retirement obligation for the restoration isrecognized as a liability using discount rate at 1.342%.
Movements of asset retirement obligations For the six months December 31, 2022 and June 30, 2023 are as follows.

For the six months ended

December 31,
2022

June 30,
2023

June 30,2023(in thousands of
U.S. dollars)(in thousands of yen)
Balance at the beginning of the period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥33,644

Liabilities incurred due to the acquisition of properties ∙∙∙∙∙∙∙¥

33,872‐

Accretion expense ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

227

Balance at the end of the period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥33,872

$

233

‐

‐

225
¥

34,0971$235

20. Revenue Recognition(a) Information from analysis of revenues generated from contracts with customers
For the six months ended December 31, 2022
Revenues generated from

Sales to external customers

contracts with customers (*1)
(in thousands of yen)
Revenue from sale of real estate property(in thousands of yen)
‐

‐

Other

31,966

11,929,599

Total

31,966

11,929,599(*1)The rental revenues, etc. subject to the “Accounting Standard for Lease Transactions” (ASBJ Statement No. 13), the dividend income subject to the “Accounting Standards for
Financial Instruments” (ASBJ statement No. 10), and the sale of real estate, etc. subject to the “Practical Guidelines on Accounting by Transferors for Securitization of Real Estate Using
Special Purpose Companies” (Accounting System Committee Report No. 15 of the Japanese Institute of Certified Public Accountants) are not included in the above amount as they
are not applied to the Revenue Recognition Accounting Standard. Moreover, the main revenue from contracts with customers are revenue from sale of real estate.

For the six months ended June 30, 2023
Revenues generated fromcontracts with customers (*1)
(in thousands of(in thousands ofyen)
U.S. dollars)
Revenue from sale of real estate property

Sales to external customers(in thousands ofyen)(in thousands of
U.S. dollars)

‐

‐

‐

‐

Other

27,645190

15,914,981

109,766

Total

27,645190

15,914,981

109,766(*1)The rental revenues, etc. subject to the “Accounting Standard for Lease Transactions” (ASBJ Statement No. 13), the dividend income subject to the “Accounting Standards for
Financial Instruments” (ASBJ statement No. 10), and the sale of real estate, etc. subject to the “Practical Guidelines on Accounting by Transferors for Securitization of Real Estate Using
Special Purpose Companies” (Accounting System Committee Report No. 15 of the Japanese Institute of Certified Public Accountants) are not included in the above amount as they
are not applied to the Revenue Recognition Accounting Standard. Moreover, the main revenue from contracts with customers are revenue from sale of real estate.

(b) Foundational information for understanding revenues generated from contracts with customers
The information is described in the notes on the Summary of Significant Accounting Policies(c) Information on relationship of fulfillment of performance obligations based on contracts with customers with cashflow
generated from said contracts and amount and period of revenue expected to be recognized in the next fiscal period or
thereafter from contracts with customers existing at the end of the fiscal period(i )Balance of contract assets and contract liabilities, etc.

36

For the six months ended

December 31,
2022

June 30,
2023

June 30,2023(in thousands of
U.S. dollars)(in thousands of yen)
Claims generated from contracts with customers (balance¥at beginning of fiscal year) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Claims generated from contracts with customers (balanceat end of fiscal year) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Contract assets (balance at beginning of fiscal year) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙

2,250

¥

4,231

$

29

4,231

3,093

21
‐

‐

‐

Contract assets (balance at end of fiscal year) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

‐

‐

‐

Contract liabilities (balance at beginning of fiscal year) ∙∙∙∙∙

‐

‐

‐

Contract liabilities (balance at end of fiscal year) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

‐

‐

‐

(i i)Transaction value allocated to remaining performance obligations

Not Applicable

21. Segment Information
Segment information For the six months ended December 31, 2022 and June 30, 2023 are as follows :(a) Operating Segment Information
Disclosure is omitted as the Company is comprised of a single reportable segment engaged in the property rental business.
(b) Enterprise‐wide Disclosures(i) Information about Products and Services
Disclosure is not required as revenues from external customers for the single segment are in excess of 90% of total revenues.
(ii) Information about Geographic Areas(1) Revenues from Overseas Customers:
For the six months ended December 31, 2022
(in thousands of yen)
Japan

Grand Cayman
10,182,751

Total

1,746,848

11,929,599

For the six months ended June 30, 2023
(in thousands of yen)
Japan

Grand Cayman
12,000,955

Total

3,914,026

15,914,981(in thousands of U.S. dollars)
Japan

Grand Cayman
82,770Total
26,995

109,766(2)Tangible Fixed Assets:
Disclosure is not required as tangible fixed assets located in Japan are in excess of 90% of total tangible fixed assets.
(c) Information about Major Customers
Information about major clients for the six‐month periods ended December 31, 2022 and June 30, 2023 were as follows:37For the six months ended December 31, 2022
Operating Revenues

Name of client

Related segment(in thousands of yen)

Mystays Hotel Management Co., Ltd.

5,771,441

Real estate investing business

For the six months ended June 30, 2023

Name of client

Operating Revenues

Operating Revenues(in thousands of yen)(in thousands of U.S. dollars)

Mystays Hotel Management Co., Ltd.

8,022,489

Related segment

55,331

Real estate investing business

22. Profit or Loss from Equity Method, etc
For the six months ended December 31, 2022
(in thousands of yen)
Investments in affiliates

17,856,387

Investments, if equity method was adopted

17,360,140(59,347)

Investment gains (losses), if equity method was adopted

For the six months ended June 30, 2023
(in thousands of yen)(in thousands of US dollars)

Investments in affiliates

17,856,387

123,155

Investments, if equity method was adopted

17,341,860

119,607(18,280)(126)

Investment gains (losses), if equity method was adopted

23. Related‐Party Transactions(a) Parent Company and Major Corporate Unitholders
For the six months ended December 31, 2022
SharecapitalType ofrelated‐party

Interested
party of the
Asset
ManagerCompany
nameLocation

Business(inmillionsof yen)Transactions for the period
Voting interestin the Company

Relationshi
p with theCompany

Balance at the end of period

Type oftransactionsAmounts(1)(inthousandsof yen)Balancesheet
account

Amounts(1)(in thousands ofyen)

Naqua Hotel& Resorts
Management
Co., Ltd.(2)Minato‐ku,
Tokyo

Hotel
managementbusiness¥10‐

Leaseholder
and operatorof hotelRentalrevenues¥1,152,194

Rentalreceivables¥404,531

Mystays
HotelManagement
Co., Ltd.(2)Minato‐ku,
Tokyo

Hotel
managementbusiness¥100‐

Leaseholder
and operatorof hotelRentalrevenues¥5,771,441

Rentalreceivables¥3,864,932

Notes:(1)

Consumption taxes are not included in the transaction amount, but are included in the balance at the end of periods.

38

(2)

Naqua Hotel & Management Resorts Management Co. Ltd, and Mystays Hotel Management, Co. Ltd has no relationship to be stated, they receive investment through funds
that are managed by FIG, a subsidiary of Softbank Group; a parent company of the asset manager directly and indirectly owning 100% of issued shares. Accordingly, we
treat , Naqua Hotel & Management Resorts Management Co. Ltd, and Mystays Hotel Management as a related party.

For the six months ended June 30, 2023
Transactions for the period

Share capital
Type ofrelated‐party

Interested
party of the
Asset
Manager

Votinginterest intheCompany

Relationshipwith theCompany

Type oftransactions(inmillionsof yen)(inthousandsof U.S.
dollars)

Hotelmanagementbusiness

¥10

$68

‐

Leaseholder andoperator of hotelHotelmanagementbusiness

¥100

$689

‐

Leaseholder andoperator of hotel

Company
nameLocation

Business

Naqua Hotel& Resorts
Management
Co., Ltd.(2)Minato‐ku,
Tokyo

Mystays
HotelManagement
Co., Ltd.(2)Minato‐ku,
Tokyo

Balance at the end of period

Amounts (1)Amounts(1)(inthousandsof yen)(inthousandsof U.S.
dollars)

Rentalrevenues¥612,959$4,227

Rentalrevenues¥8,022,489$55,331

Balancesheet
account(inthousandsof yen)(in thousandsof U.S.
dollars)

Rentalreceivables¥261,128$1,801

Rentalreceivables¥3,227,566$22,260

Notes:(1)

Consumption taxes are not included in the transaction amount, but are included in the balance at the end of periods.

(2)

Naqua Hotel & Management Resorts Management Co. Ltd, and Mystays Hotel Management, Co. Ltd has no relationship to be stated, they receive investment through funds
that are managed by FIG, a subsidiary of Softbank Group; a parent company of the asset manager directly and indirectly owning 100% of issued shares. Accordingly, we
treat , Naqua Hotel & Management Resorts Management Co. Ltd, and Mystays Hotel Management as a related party.

(b) Affiliates
For the six months ended December 31, 2022
Not Applicable
For the six months ended June 30, 2023
Not Applicable(c) Board of Directors and Major Individual Unitholders
For the six months ended December 31, 2022

Type ofrelated‐party

Directors
and close
relatives

Name

Naoki
FukudaVotinginterest intheCompany

Business / Occupation

Executive officer of theCompany andmanagement director ofConsonant Investment
Management Co., Ltd.

‐

Transactions for the period

Balance at the end of period
Amounts(3)(in thousands of yen)
Payment of the assets management
fee to Consonant Investment
Management Co., Ltd.(1)Payment of institution
management fee to Consonant
Investment Management Co.,
Ltd.(2)

Amounts(3)Balance sheet
account

Type of transactions(in thousands ofyen)¥300,064

Accruedexpenses¥165,000¥1,100Accruedexpenses¥880

Notes:(1)

Naoki Fukuda serves as a representative of the Asset Manager and the asset management fee is established in the Articles of Incorporation of the Company.

(2)

Naoki Fukuda serves as a representative of Asset Manager and the fee is established in the “Administrative Agency Agreement for Organizational Management” which wasagreed between the Asset Manager and the Company.

(3)

Consumption taxes are not included in the transaction amount, but are included in the balance at the end of period.

For the six months ended June 30, 2023
Transactions for the period
Type ofrelated‐party

Directors
and close
relatives

Name

Naoki
FukudaBusiness /Occupation

Executive officer of
the Company andmanagement
director ofConsonantInvestment

Votinginterest intheCompany‐

Balance at the end of period

Amounts(3)Type of transactions

Payment of the assets
management fee to Consonant
Investment Management Co.,
Ltd.(1)
Payment of institution
management fee to Consonant

Amounts(3)(inthousandsof yen)(inthousandsof U.S.
dollars)¥300,000$2,069

¥600

$4

(in
thousandsof yen)(inthousandsof U.S.
dollars)

Accruedexpenses¥165,000$1,138

Accruedexpenses¥330$2

Balance sheet
account

39

Management Co.,
Ltd.

Investment Management Co.,
Ltd.(2)

Notes:(1)

Naoki Fukuda serves as a representative of the Asset Manager and the asset management fee is established in the Articles of Incorporation of the Company.

(2)

Naoki Fukuda serves as a representative of Asset Manager and the fee is established in the “Administrative Agency Agreement for Organizational Management” which wasagreed between the Asset Manager and the Company.

(3)

Consumption taxes are not included in the transaction amount, but are included in the balance at the end of period.

24. Parent company and/or significant affiliates(a) Information on the parent company
Not Applicable.

(b) Summary of financial statements of the significant affiliates
The significant affiliates in the year ended June 30, 2023 is Kingdom TMK. Summary of financial information is as follows:
Kingdom TMK
As of / For the six months ended
March 31, 2023

September 30, 2022

(in thousands of yen)
Total specified assets
Total other assets
Total current liabilities

March 31, 2023
(in thousands of US dollars)

100,114,466

99,527,689

686,445

1,550,642

1,974,338

13,61773,592

161,817

1,116

Total non‐current liabilities

66,184,166

65,970,166

454,998

Total net assets

35,407,351

35,370,044

243,948

Operating revenue

565,320652,802

4,502

Income before income taxes(120,512)(36,702)(253)

Net income(121,117)(37,307)(257)

25. Per Unit Information
The following table shows net asset value per unit as of December 31, 2022 and June 30, 2023 and net income per unit for the six months
then ended. Net income per unit is calculated by dividing the net income attributable to unitholders by the weighted average number ofunits outstanding. In regard to diluted net income per unit for the previous fiscal year, there were no dilutive units. Accordingly, diluted
net income per unit for the previous fiscal year is not presented. In regard to diluted net income per unit for the subject fiscal year, there
was a net loss per unit, and there were no dilutive units. Accordingly, diluted net income per unit for the subject fiscal year is notpresented.
As of / For the six months ended

December 31,
2022

June 30,
2023

June 30,
2023

(Yen)

(U.S. dollars)

Net asset value per unit ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥41,058¥41,665$287

Net income per unit ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥

832

¥

1,462

$

10

Weighted average number of units ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

6,096,840

6,096,840‐

26．Subsequent Events(a) Issuance of New Investment Units
The board of directors held on July 19, 2023 and July 25, 2023 approved the issuance of new investment units and secondary distributionof investment units. Payment for the new investment units issued via public offering was completed on July 31, 2023. In addition, withthe respect to the issuance of new investment units through the third‐party allotment in connection with the overallotment for the public

40

offering, the payment was completed on August 28, 2023. As a result, holders’ capital becomes JPY270,101 million and the number ofinvestment units issued and outstanding become 6,737,121 units.

(i) Issuance of new investment units through public offering
Number of investment units

Domestic public offering : 353,680 units
International: 256,112 units

Total: 609,792 units

Issue price (offer price): ¥55,566 per unit

Total issue price (total offer price): ¥33,883,702,272

Amount paid in (issue value): ¥53,726 per unit

Total amount paid in (total issue value): ¥32,761,684,992

Payment date

: July 31, 2023(ii) Secondary offering of investment units (overallotment secondary offering)Number of investment units: 30,489 units

Offer price: ¥55,566 per unit

Total offer value: ¥1,694,151,774

Delivery date

: August 1, 2023(iii) Issuance of new investment units through third‐party allotment
Number of investment units: 30,489 units

Amount paid in (issue value): ¥53,726 per unit

Total amount paid in (total issue value): ¥1,638,052,014

Delivery date

: August 28, 2023

Allotee: Mizuho Securities Co, Ltd.

(b) New borrowings
In order to raise a part of the funds to be used for the acquisition of the 6 hotel properties acquired on August 1,2023, the Company
decided on the implementation of the following borrowings at its board of directors’ meeting held and entered into the borrowing
agreement on July 19, 2023.

New Syndicate Loan (010)
LenderSyndicate formed by Mizuho Bank, Ltd.

Borrowing amount¥29,856 million

41Interest rate, etc.

Base rate (3‐month JPY TIBOR) +0.500%, 0.300%,
Base rate (1‐month JPY TIBOR) +0.200%

Interest payment date(i) The last Japanese business day of March, June, September and December before the principal
maturity date, beginning with September 30, 2023, and (ii) the principal maturity date,(i) The last Japanese business day of each month before the principal maturity date, beginningwith August 31, 2023, and (ii) the principal maturity date,Principal repayment method

Lump‐sum repayment

Borrowing method

Unsecured / with no guarantee

Borrowing dateAugust 1, 2023,

Maturity dateJuly 14, 2028, July 16, 2026, August 1, 2024(c) Acquisition of assets (properties)
The Company decided to acquire 6 hotel properties as shown in the following table, of which the total acquisition price is JPY
57,230million, on July 19, 2023 and the acquisitions have been closed on August 1, 2023.
Acquisition

Use

Property
number

Property
nameLocation

Construction

pricecompletion

(JPY

date

million)

Total

Category

rentable
area

Seller(㎡)

ofspecified
asset(Note)

Fusaki
Beach
Hotel

D84

ResortSheffield

June 1982
Ishigaki City, Okinawa

Hotel &

June 201940,293

23,573.57

March 2020

Hotel

D85

Grand
Hotel

August 1966
Chino City, Nagano

Hotel

D86

MyStaysOkayama

Hotel

D87

8,365

20,577.41

July 1988

Takinoyu

Hotel

July 1967

Okayama City,
OkayamaMarch 1986

2,613

3,023.27

Mokuteki

2,445

3,963.86

MyStays

Lake Resort& OnsenMokuteki
KaishaNippori
Chiba City, Chiba

February
1994

2,039

3,398.18

Tokutei
Mokuteki
KaishaDecember

Tazawako
D89

TokuteiTokutei

Soga

Hotel

interest

Shiretoko

Hotel
D88

beneficial

KaishaHotel
June 2007

Semboku City, Akita

1981
November
1988

1,475

7,289.75

interest

Mokuteki

KaishaAomori City, Aomori

beneficial

Trust

MyStays
Aomori

Trust

Heijo Tokutei

Nippori

StationHotel

Mokuteki
KaishaVillasTateshina

Asset Tokutei

Trustbeneficial
interest

Trust
beneficial
interest

Trust
beneficial
interest

Heijo Tokutei

Trust

Mokuteki

beneficial

Kaishainterest

42

(Note) Acquisition prices do not include adjustments for property taxes or city planning taxes, or national or local consumption taxes; hereinafter the same.

43