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

July 12, 2024

Consolidated Financial Results
for the Fiscal Year Ended May 31, 2024
(Based on Japanese GAAP)
Company name:Gunosy Inc.
Listing:
Tokyo Stock Exchange
Securities code:
6047
URL:
https://gunosy.co.jp/
Representative:
Representative Director and President Kentaro Nishio
Inquiries:
Corporate Officer and CFO
Tatsuyuki Iwase
Telephone:+81-3-5953-8030
Scheduled date of annual general meeting of shareholders:August 23, 2024
Scheduled date to commence dividend payments:–
Scheduled date to file annual securities report:
August 28, 2024
Preparation of supplementary material on financial results:
Yes
Holding of financial results briefing:
Yes (for institutional investors andanalysts)(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated financial results for the fiscal year ended May 31, 2024 (from June 1, 2023 to May
31, 2024)(1) Consolidated operating results(Percentages indicate year-on-year changes.)

Net sales
Fiscal year ended

Operating profit

Millions of yen%

Profit attributable toowners of parent

Ordinary profit

Millions of yen%

Millions of yen%

Millions of yen%

May 31, 2024

7,344

(8.8)

70

–

(829)

–

(1,186)–

May 31, 2023

8,052

(10.5)(268)–(1,705)–(1,150)–Note: Comprehensive income

For the fiscal year ended May 31, 2024:
For the fiscal year ended May 31, 2023:

Basic earnings
per share
Fiscal year ended

Diluted earnings
per shareYen¥(849) million¥(1,110) million
Ratio of ordinary
profit to total assets

Ratio of operating
profit to net sales

%

%

%

Return on equity

Yen

[–%]
[–%]

May 31, 2024

(49.33)–(11.5)(7.0)

1.0

May 31, 2023

(47.99)–(10.2)(13.2)(3.3)

Reference:

Share of profit (loss) of entities accounted for using equity method
For the fiscal year ended May 31, 2024:¥(933) million
For the fiscal year ended May 31, 2023:¥(1,428) million(2) Consolidated financial position
Total assets
As ofMillions of yen

Net assets

Equity-to-asset ratio

Millions of yen

Net assets per share%

Yen

May 31, 2024

11,339

9,970

87.2

412.80

May 31, 2023

12,324

10,85787.5

449.24

Reference:

EquityAs of May 31, 2024:
As of May 31, 2023:¥9,890 million¥10,788 million

(3) Consolidated cash flows
Cash flows fromoperating activities
Fiscal year ended

Cash flows frominvesting activities

Cash and cash
equivalents at end of
periodCash flows fromfinancing activities

Millions of yen

Millions of yen

Millions of yen

Millions of yen

May 31, 2024

(206)

271

(103)

5,090

May 31, 2023

(433)

604

0

5,100

2. Cash dividends
Annual dividends per share
First
SecondThird
quarter-end quarter-end quarter-end
Yen
Fiscal year ended

May 31, 2023
Fiscal year ended

May 31, 2024

Yen

Fiscalyear-end

Yen

Total cash
dividends(Total)

Total

Yen

Ratio of
Payout ratio dividends to(Consolidated) net assets(Consolidated)

Yen Millions of yen

%

%

–

0.00

–

0.00

0.00

–

–

–

–

0.00

–

0.00

0.00

–

–

–

–

–

–

–

–

Fiscal year ending

May 31, 2025–

(Forecast)

Note: The forecasts of the annual dividends per share for the fiscal year ending May 31, 2025 are currently undetermined.

3. Consolidated earnings forecasts for the fiscal year ending May 31, 2025 (from June 1, 2024 to
May 31, 2025)
Net sales

Fiscal year ending
May 31, 2025

(Percentages indicate year-on-year changes.)
Profit attributable to Basic earnings per
Ordinary profit
owners of parent
share

Operating profit

Millions of
yen

%

6,300

(14.2)

Millions ofyen%Millions ofyen

450 535.3

(101)

%

–

Millions of
yen

(308)

%

–

Yen

(12.85)

* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in thechange in scope of consolidation): None
Note: Although not a change in specified subsidiaries, Smarprise, Inc., which was a consolidated subsidiary, was
excluded from the scope of consolidation due to the sale of shares held.

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

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

24,237,774 shares

As of May 31, 2023

24,237,774 shares(ii) Number of treasury shares at the end of the period
As of May 31, 2024

278,119 shares

As of May 31, 2023

222,444 shares(iii) Average number of shares outstanding during the period
Fiscal year ended May 31, 2024

24,047,377 sharesFiscal year ended May 31, 2023

23,976,325 shares

Note: The number of treasury shares includes shares of the Company held by the stock-granting ESOP trust account(99,792 shares for the fiscal year ended May 31, 2023, and 86,067 shares for the fiscal year ended May 31,2024).

[Reference] Overview of non-consolidated financial results
1. Non-consolidated financial results for the fiscal year ended May 31, 2024 (from June 1, 2023 to
May 31, 2024)(1) Non-consolidated operating results(Percentages indicate year-on-year changes.)

Net sales
Fiscal year ended

Operating profit

Ordinary profit

Millions of yen%

Millions of yen

May 31, 20244,474

(20.6)

(486)

–

(528)

–

(549)

–

May 31, 2023

5,633

(16.5)

(376)

–

(387)

–

(665)

–

Basic earnings
per share
Fiscal year ended%

ProfitDiluted earnings
per share
Yen

Yen

May 31, 2024

(22.86)–

May 31, 2023

(27.74)–

Millions of yen%

Millions of yen%

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

Net assets

Equity-to-asset ratio

Net assets per share

Millions of yen

Millions of yen

May 31, 2024

10,282

9,486

91.5

392.63

May 31, 2023

11,075

10,11990.8

418.53

Reference:

EquityAs of May 31, 2024:
As of May 31, 2023:%

Yen¥9,407 million¥10,051 million

2. Non-consolidated earnings forecasts for the fiscal year ending May 31, 2025 (from June 1, 2024 to
May 31, 2025)
Net sales
Millions of yen

Fiscal year ending
May 31, 2025

3,730

(Percentages indicate year-on-year changes.)
Basic earnings
Profitper share

Ordinary profit% Millions of yen(16.6)

76% Millions of yen

–

76

%

–

Yen

3.17

* Financial results reports are exempt from audit conducted by certified public accountants or an audit
corporation.
* Proper use of earnings forecasts, and other special matters
Earnings forecasts and other forward-looking statements herein are based on information currently
available to the Company and certain assumptions deemed reasonable, and are not intended to guarantee
achievement. Actual results may differ significantly from forecasts due to a wide range of factors. For
assumptions underlying earnings forecasts and notes on the use of forecasts, refer to “1. Overview ofBusiness Results, etc. (4) Future Outlook” on page 4 of the attached material.

Attached Material
Index
1. Overview of Business Results, etc. ........................................................................................................... 2(1) Overview of Business Results for the Period Under Review ............................................................. 2(2) Overview of Financial Position for the Period Under Review ........................................................... 3(3) Overview of Cash Flows for the Period Under Review ..................................................................... 3(4) Future Outlook ................................................................................................................................... 4
2. Basic Stance Concerning Choice of Accounting Standards ...................................................................... 5
3. Consolidated Financial Statements and Significant Notes Thereto .......................................................... 6(1) Consolidated Balance Sheets.............................................................................................................. 6(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income ......... 8(Consolidated Statements of Income) ................................................................................................ 8(Consolidated Statements of Comprehensive Income) ...................................................................... 9(3) Consolidated Statements of Changes in Equity ................................................................................ 10(4) Consolidated Statements of Cash Flows .......................................................................................... 12(5) Notes to the Consolidated Financial Statements .............................................................................. 13(Notes on going concern assumption) .............................................................................................. 13(Changes in presentation) ................................................................................................................. 13(Related to the Consolidated Statement of Income) ......................................................................... 14(Segment information, etc.) .............................................................................................................. 16(Per share information)..................................................................................................................... 17(Significant subsequent events) ........................................................................................................ 19- 1 -1. Overview of Business Results, etc.
(1) Overview of Business Results for the Period Under Review
Regarding the business environment surrounding the Group, smartphones continued to become
increasingly common, with the percentage of smartphone users in Japan rising by 1.6 percentage points
compared to the previous year to 78.9% in 2023 (Source: Ministry of Internal Affairs andCommunications). Also, advertising expenditures hit a full-year record high in 2023, increasing to
7,316.7 billion yen (103% of the previous year), despite the impacts of sweltering heat from summer
through autumn and the conflict in the Middle East, among other factors. Among the factors
contributing to market growth, brisk online advertising expenditures against the backdrop of
digitalization in society grew to 3,333.0 billion yen (107.8% of the previous year). Other contributions
to market growth included elevated demand for video advertising owing to the increased use ofConnected TVs (TV terminals connected to the Internet), as well as growth in the digital promotions
market. On the other hand, display advertising for reservation-based ads—one of the products wehandle—fared less favorably, declining to 82.8% of the previous year (Dentsu Inc. study).
Under these circumstances, for the existing media business, the Group has focused on improving
profitability at Gunosy, and on au Service Today and NewsPass, which are apps hosted collaboratively
with KDDI Corporation, to strengthen partnership with KDDI.
Gunosy is designed to be a news media for the new era that will serve as an infrastructure for society,and initiatives are implemented to enable optimal delivery of “must-know information” with highsocial value and “want-to-know information” with high personal value. In the fourth quarter of the
fiscal year under review, we limited our investments in advertising in light of our profitability situation
and uncertainties in the advertising market. Owing to the fact that the user retention rate has remained
stable, we have maintained roughly the same number of users from the previous quarter, at 100% of theprevious quarter. As for profitability per user, a metric we have thus far sought to improve, byimplementing various measures in the second quarter to modify our advertising logic and beef up oursales activities, we have maintained a certain level of profitability (95% of the previous quarter) evendespite the challenging conditions in the display advertising market for reservation-based ads. Goingforward, we will press ahead with efforts aimed at improving profitability per user, strive to lower
operating costs, and aim to get full-year non-consolidated operating profit back into positive territory.
In the Game8 business, we posted record-high net sales and operating profit in the fourth quarter of the
fiscal year under review as a result of not only the steady performance of the domestic media solutions
business, but the continued strong profitability in overseas operations.
At our equity-method affiliate GaragePreneurs Internet Pvt. Ltd. (hereinafter, “GaragePreneurs”),
progress is being made on the process for merging with North East Small Finance Bank Ltd.
(hereinafter, “NESFB”). We obtained approval from the RBI for the merger with NESFB in September
2023, followed by approval from the Competition Commission of India (CCI) in March 2024. We
continue to carry out the various procedures so that the merger between GaragePreneurs and NESFB
will become legally binding.
Regarding revenues, net sales related to Gunosy Ads amounted to 3,978 million yen for the current
fiscal year. Net sales related to ad networks amounted to 317 million yen for the current fiscal year
while continuing strict ad examinations.
As for expenses, as a result of partially limiting our investments in advertising in response to changes
in market conditions, we recorded advertising expenses of 863 million yen (down 19.0% comparedwith the previous fiscal year), while media costs decreased as a result of lower net sales related to ad
networks.
Additionally, we recorded 933 million yen in investment losses through the equity method for ourequity-method affiliate GaragePreneurs. In addition, we recorded 386 million yen in gain on sale ofshares of subsidiaries and associates as extraordinary income and 380 million yen in loss on valuationof investment securities as an extraordinary loss.
As a result, for the current fiscal year, net sales decreased by 8.8% from the previous fiscal year to
7,344 million yen, ordinary loss was 829 million yen compared to ordinary loss of 1,705 million yen in
the previous fiscal year, and loss attributable to owners of parent was 1,186 million yen compared toloss attributable to owners of parent of 1,150 million yen in the previous fiscal year.
- 2 -The cumulative number of downloads of all Gunosy, NewsPass, and au Service Today in Japan for thecurrent fiscal year increased by 5.28 million from the end of the previous fiscal year to 70.72 million.
Descriptions related to segment information are omitted because the Group has only one major
segment, the Media business.
(2) Overview of Financial Position for the Period Under Review(Assets)
Assets at the end of the current fiscal year decreased by 985 million yen from the end of the previous
fiscal year to 11,339 million yen. This is mainly attributable to a decrease in other under current assets(a decrease of 178 million yen from the end of the previous fiscal year) and a decrease in investment
securities (a decrease of 764 million yen from the end of the previous fiscal year).
(Liabilities)
Liabilities at the end of the current fiscal year decreased by 97 million yen from the end of the previous
fiscal year to 1,368 million yen. This is mainly attributable to a decrease in advances received (adecrease of 179 million yen from the end of the previous fiscal year).
(Net assets)
Net assets at the end of the current fiscal year decreased by 887 million yen from the end of theprevious fiscal year to 9,970 million yen. This is mainly attributable to a decrease in retained earnings(a decrease of 1,254 million yen from the end of the previous fiscal year) and an increase in foreign
currency translation adjustment (an increase of 348 million yen from the end of the previous fiscal
year).
(3) Overview of Cash Flows for the Period Under Review
Cash and cash equivalents (hereinafter referred to as “capital”) for the current fiscal year decreased by
9 million yen from the previous fiscal year to 5,090 million yen. The following describes the situationof the current fiscal year details for each type of cash flow.
(Cash flows from operating activities)
Capital used by operating activities during the current fiscal year amounted to 206 million yen(compared with 433 million yen used during the previous fiscal year). This is mainly attributable torecording loss before income taxes of 840 million yen, an increase in trade receivables of 75 million
yen, a decrease in advances received of 79 million yen, and share of loss of entities accounted for using
equity method of 933 million yen.
(Cash flows from investing activities)
Capital provided by investing activities during the current fiscal year amounted to 271 million yen(compared with 604 million yen provided during the previous fiscal year). This is mainly attributable topayments into time deposits of 741 million yen and proceeds from withdrawal of time deposits of 882
million yen.
(Cash flows from financing activities)
Capital used by financing activities during the current fiscal year amounted to 103 million yen(compared with 0 million yen provided during the previous fiscal year). This is mainly attributable topurchase of treasury shares of 99 million yen.

- 3 -(Reference) Changes in indicators related to cash flows
Fiscal year
Fiscal year
Fiscal year
Fiscal year
Fiscal year
ended
ended
ended
ended
ended
May 31, 2020 May 31, 2021 May 31, 2022 May 31, 2023 May 31, 2024
Equity ratio (%)

84.8

85.0

87.3

87.5

87.2

Equity ratio based on fair value (%)

170.1

169.2

151.4

119.6

152.8

Interest-bearing debt to cash flows
ratio (Years)

–

–

–

–

–

Interest coverage ratio (Times)–

3,487.3–––

Equity ratio: Shareholders’ equity / Total assets
Equity ratio based on fair value: Total market value of shares / Total assets
Interest-bearing debt to cash flows ratio: Interest-bearing debts / Cash flows
Interest coverage ratio: Cash flows / Interest paid
(Notes) 1. The indicators were calculated using consolidated financial figures.
2. The total market value of shares was calculated based on the number of shares outstanding, excluding
treasury shares.
3. In the description above, “Cash flows” represent cash flows from operating activities.
4. Interest-bearing debts include all debts recorded on the Consolidated Balance Sheets for which interest is
paid. Interest paid is the interest expenses paid shown on the Consolidated Statements of Cash Flows.
5. The interest coverage ratio was not calculated for the fiscal years ended May 31, 2020, 2022 and 2024, as the
cash flows from operating activities were negative. Furthermore, as there was no interest paid from theinterest coverage ratio (times) for the fiscal year ended May 31, 2023, it has not been provided.

(4) Future Outlook
In the fiscal year ended May 31,2024, in light of the trends in advertising market conditions and othermacroeconomic factors, we sought to return to full-year non-consolidated operating profitability byshifting away from our initial policy of sales growth through investments in advertising and instead
focus on enhancing productivity whilst partially limiting, by more than in the past, our advertising
investments.
Based on the circumstances mentioned above, on the assumption of a swing back to consolidated andnon-consolidated operating profitability, the Group will pare back its advertising investments for
Gunosy in the next fiscal year, but press ahead with business structure improvements and measures for
improving user convenience, for example, by integrating LLM-enabled functions. Additionally, for au
Service Today, run jointly with KDDI Corporation, and NewsPass, the Group will focus on improving
products to increase adoption by au users. For Game8 Inc., a consolidated subsidiary, while continuingstable operations of game8.jp, which is a game strategy media, the Company will create drivers for
growth by developing overseas businesses and other new businesses. As for GaragePreneurs Internet
Pvt. Ltd. (hereinafter, “GaragePreneurs”), the Company’s equity-method affiliate, we continue to makeprogress on the process for a merger with NESFB. Until the merger is realized, we will focus on
appropriate risk control and improve earnings through stable business growth. After the merger, we will
aim to accelerate further growth by providing an inclusive digital finance experience and overhaulingthe existing banking business model. Moreover, to enhance capital efficiency and our ability togenerate profits, we will examine the possibility of M&As with the use of cash and deposits on hand.
We will also pursue our own DX by leveraging the Group’s technology and endeavor to create new
businesses with the use of LLMs.
Regarding the consolidated financial results forecast for the fiscal year ending May 31, 2025, based on
the business factors outlined above, net sales are projected to be 6,300 million yen (a decrease of 14.2%
from the previous fiscal year), operating profit to be 450 million yen (an increase of 535.3% from theprevious fiscal year), ordinary loss to be 101 million yen (compared with an ordinary loss of 829
million yen for the previous fiscal year), and loss attributable to owners of parent to be 308 million yen(compared with a loss attributable to owners of parent of 1,186 million yen in the previous fiscal year).

- 4 -To make a financial results forecast for the fiscal year ending May 31, 2025, the numbers ofdownloads, net sales, and expenses for the existing business areas are determined as follows:(a) Number of downloads
The number of new downloads is calculated based on some factors, such as advertising expenses to be
spent, actual past cost per download (Advertising expenses / Number of new downloads), and an
expected decrease in the download rate. The financial results forecast is made based on the assumptionthat the cumulative number of downloads of all Gunosy, NewsPass, and au Service Today will reach
76.34 million at the end of the fiscal year ending May 31, 2025.
(b) Net sales
Net sales related to Gunosy Ads are calculated based on past performance and other factors, such as thenumber of downloads, the retention rate of users who downloaded apps, and the profitability ofretained users. Net sales related to other media are also calculated based on past performance and otherfactors.
(c) Cost of sales
The calculation is based on labor costs calculated from the human resource plan and actual past costs,
such as server costs.
(d) Selling, general and administrative expenses
The calculation takes into account advertising expenses of 689 million yen will be required for the
fiscal year ending May 31, 2025, to achieve the expected number of downloads described above, as
well as other factors including labor costs calculated from the human resource plan and actual past
costs, such as rent expenses on buildings and other factors.

2. Basic Stance Concerning Choice of Accounting Standards
The Group prepares its consolidated financial statements using Japanese GAAP. Carefully observing thetrend of introducing International Financial Reporting Standards (IFRS) in the future, the Group will makeefforts to establish a system to appropriately adapt to trends.

- 5 -3. Consolidated Financial Statements and Significant Notes Thereto(1) Consolidated Balance Sheets(Millions of yen)
As of May 31, 2023
AssetsCurrent assets
Cash and deposits
Accounts receivable - trade
Other
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Deferred tax assets
Other
Total investments and other assets
Total non-current assets
Total assets- 6 -As of May 31, 2024

5,925
669
677
7,272

5,874
676
499
7,050

8
4
12

7
2
10

40
0
40

–
0
0

4,940
18
39
4,998
5,051
12,324

4,175
62
40
4,277
4,288
11,339(Millions of yen)
As of May 31, 2023
Liabilities
Current liabilities
Accounts payable - trade
Accounts payable - other
Income taxes payable
Advances received
Provision for point card certificates
Provision for share awards
Other
Total current liabilities
Non-current liabilities
Provision for share awards
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Total accumulated other comprehensive income
Share acquisition rights
Total net assets
Total liabilities and net assets- 7 -As of May 31, 2024

421
325
42
466
0
9
172
1,438

249
288
334
287
–
9
135
1,306

9
19
28
1,466

8
54
62
1,368

4,099
4,099
2,478
(307)
10,369

4,099
4,099
1,223
(288)
9,134

16
90
311
419
68
10,857
12,324

58
37
660
756
79
9,970
11,339(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income(Consolidated Statements of Income)(Millions of yen)
Fiscal year ended
May 31, 2023
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit (loss)
Non-operating income
Interest income
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Commission expenses
Loss on investments in investment partnerships
Share of loss of entities accounted for using equity
methodOther
Total non-operating expenses
Ordinary loss
Extraordinary income
Gain on sale of investment securities
Gain on sale of shares of subsidiaries and associates
Gain on change in equity
Gain on reversal of share acquisition rights
Other
Total extraordinary income
Extraordinary losses
Impairment losses
Loss on valuation of investment securities
Loss on sale of shares of subsidiaries and associates
Total extraordinary losses
Loss before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Loss
Loss attributable to non-controlling interests
Loss attributable to owners of parent- 8 -Fiscal year ended
May 31, 2024

8,052
4,945
3,106
3,375
(268)

7,344
4,375
2,969
2,898
70

19
12
4
35

34
38
5
78

–
15
23

0
9
34

1,428

933

4
1,473
(1,705)

0
978
(829)

9
–
1,001
18
14
1,042

4
386
–
0
–
391

65
111
11
188
(851)
93
224
317
(1,169)(18)(1,150)

22
380
–
403
(840)
355
(10)
345
(1,186)–(1,186)

(Consolidated Statements of Comprehensive Income)(Millions of yen)
Fiscal year ended
May 31, 2023
Loss
Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests- 9 -Fiscal year ended
May 31, 2024

(1,169)(1,186)

(30)
35
(1)

41
(53)
–

55

348

59
(1,110)336(849)(1,091)

(849)

(18)

–

(3) Consolidated Statements of Changes in Equity
For the fiscal year ended May 31, 2023
(Millions of yen)
Shareholders’ equity

Balance at
beginning of
periodChanges during
periodLossattributableto owners ofparentSharecapitalCapitalsurplusRetainedearnings

TreasurysharesTotalshareholders’equity

4,099

4,099

3,709

(463)

11,444(1,150)Purchase oftreasuryshares
Disposal oftreasurysharesNet changes
in items
other thanshareholders’equityTotal changes
during period
Balance at end of
periodAccumulated other comprehensive income(80)

Valuation
Foreigndifference Deferred currencyongains or translaavailable- losses on tion
for-salehedges adjustsecurities
ment
47

55

257

NonSharecontroTotal
acquisiTotal net
lling
accumulatedtion
assetsinterotherrightsests
comprehensive income
360

86

43

11,934(1,150)(1,150)

(0)

(0)

(0)

156

75

75

(30)

35

54

59

(17)

(43)

(2)

–

–

(1,231)156(1,075)

(30)

35

54

59

(17)

(43)

(1,077)

4,099

4,099

2,478

(307)

10,369

16

90

311

419

68

–

10,857- 10 -

For the fiscal year ended May 31, 2024
(Millions of yen)
Shareholders’ equity

Balance at
beginning of
periodChanges during
periodLossattributableto owners ofparentSharecapitalCapitalsurplusRetainedearnings

TreasurysharesTotalshareholders’equity

4,099

4,099

2,478

(307)

10,369(1,186)

Purchase oftreasuryshares
Disposal oftreasurysharesNet changes
in items
other thanshareholders’equityTotal changes
during period
Balance at end of
periodAccumulated other comprehensive income(68)

Valuationdifferenceonavailablefor-salesecurities

Deferred
gains orlosses onhedgesForeigncurrencytranslation
adjustment

16

90

311

Share
Total
Total netaccumulated acquisition
assetsrightsothercomprehensive income
419

68

10,857(1,186)(1,186)

(99)

(99)

(99)

119

51

51

41

(53)

348

336

10

347

–

–

(1,254)19(1,235)

41

(53)

348

336

10

(887)

4,099

4,099

1,223

(288)

9,134

58

37

660

756

79

9,970

- 11 -

(4) Consolidated Statements of Cash Flows(Millions of yen)
Fiscal year ended
May 31, 2023
Cash flows from operating activities
Loss before income taxes
Depreciation
Impairment losses
Amortization of goodwill
Foreign exchange losses (gains)
Interest income
Interest expenses
Loss (gain) on sale of investment securities
Loss (gain) on valuation of investment securities
Loss (gain) on sale of shares of subsidiaries andassociates
Share of loss (profit) of entities accounted for using
equity method
Loss (gain) on change in equity
Decrease (increase) in trade receivables
Increase (decrease) in trade payables
Increase (decrease) in accounts payable - other
Decrease (increase) in prepaid expenses
Increase (decrease) in advances received
Increase (decrease) in provision for share awards
Other, net
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of investment securities
Proceeds from sale of investment securities
Payments for sale of shares of subsidiaries resulting inchange in scope of consolidation
Proceeds from sale of shares of subsidiaries resulting inchange in scope of consolidation
Proceeds from refund of leasehold and guarantee
deposits
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Proceeds from short-term borrowings
Repayments of short-term borrowings
Purchase of treasury shares
Proceeds from disposal of treasury shares
Commission fee paid
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period- 12 -

Fiscal year ended
May 31, 2024

(851)
22
65
23
(145)
(19)
–
(9)
111

(840)
4
22
17
(178)
(34)
0
(4)
380

–

(386)

1,428

933

(1,001)
72
(203)
49
(111)
120
20
104
(322)
19
–
(129)
(433)

–
(75)
(55)
(13)
81
(79)
14
23
(189)
33
(0)
(50)
(206)

(891)
1,816
(323)
29

(741)
882
(194)
4

(33)

–

–

323

0

–

6
604

(3)
271

–
–
(0)
16
(15)
0

2,000
(2,000)
(99)
6
(10)
(103)

(18)

29

152
4,947
5,100

(9)
5,100
5,090

(5) Notes to the Consolidated Financial Statements(Notes on going concern assumption)
There is no relevant information.
(Changes in presentation)(Consolidated Statements of Cash Flows)
For the previous fiscal year, “Purchase of treasury shares” was included in “Other, net” under “Cashflows from financing activities.” The Company decided to present it separately starting from the current
fiscal year because its financial importance increased. In addition, “Commissions fee paid” has also
been separated to enhance clarity of presentation. To reflect the presentation change, a reclassification
is made to the consolidated financial statements for the previous fiscal year.
As a result, on the Consolidated Statements of Cash Flows for the previous fiscal year, the amount of(15) million yen recorded in “Other, net” under “Cash flows from financing activities” is reclassified
into “Purchase of treasury shares” under “Cash flows from financing activities” with an amount of (0)million yen and “Commission fee paid” with an amount of (15) million yen.

- 13 -

(Related to the Consolidated Statement of Income)Impairment losses
The Group recorded impairment losses on the following asset groups.
For the fiscal year ended May 31, 2023
(Millions of yen)
Location

Shibuya-ku, Tokyo

Use

Type

Business assets

AmountBuildings and structures

0

Property, plant andequipment (other)

1

Intangible fixed assets(other)32

Investments and other assets(other)

30

Total

65

(a) History leading to the recognition of impairment losses
With revisions to the Company’s business plan, as the estimation period for the remaining usefullife of our main assets, as a result of comparing future cash flow based on the business plan withthe book value of fixed assets, because future cash flow fell below book value, we havedepreciated the book value to the recoverable value and recorded the impairment loss on theamount of the reduction in question as an extraordinary loss.
(b) Method for asset grouping
The Group conducts assets grouping using the minimum unit created by mostly independent cash
flows based on the main business categories.
(c) Calculation method for the recoverable value
The recoverable value is measured using the utility value, and the recoverable value is calculated
as zero as no future cash flow is expected.
For the fiscal year ended May 31, 2024
(Millions of yen)
Location

Shibuya-ku, Tokyo

Use

Business assets

Type

AmountProperty, plant andequipment (other)2

Investments and other assets(other)

19

Total

22

(a) History leading to the recognition of impairment losses
Impairment losses were recorded mostly in the first six months of the fiscal year.
As a result of comparing future cash flow based on the business plan with the book value of fixed
assets as of the end the second quarter, because future cash flow fell below book value, we havedepreciated the book value to the recoverable value and recorded the impairment loss on theamount of the reduction in question as an extraordinary loss.
(b) Method for asset grouping
The Group conducts assets grouping using the minimum unit created by mostly independent cash
flows based on the main business categories.

- 14 -

(c) Calculation method for the recoverable value
The recoverable value is measured using the utility value, and the recoverable value is calculated
as zero as no future cash flow is expected.

- 15 -

(Segment information, etc.)[Segment information]
Segment information is omitted because the Group has only one major segment, the Media business.
[Related information]
For the fiscal year ended May 31, 2023
1. Information by product and service
Omitted because net sales to outside customers in the single product/service category accountfor more than 90% of net sales on the Consolidated Statements of Income.
2. Information by geographical area
(1) Net sales
Omitted because net sales to outside customers in Japan account for more than 90% of net sales
on the Consolidated Statements of Income.
(2) Property, plant and equipment
There is no relevant information because there are no property, plant and equipment owned
outside Japan.
3. Information by major customer
Customer name

Net sales (Million yen)

Related segment

KDDI Corporation

823

Media business

For the fiscal year ended May 31, 2024
1. Information by product and service
Omitted because net sales to outside customers in the single product/service category accountfor more than 90% of net sales on the Consolidated Statements of Income.
2. Information by geographical area
(1) Net sales
Omitted because net sales to outside customers in Japan account for more than 90% of net sales
on the Consolidated Statements of Income.
(2) Property, plant and equipment
There is no relevant information because there are no property, plant and equipment owned
outside Japan.
3. Information by major customer
Customer name

Net sales (Million yen)

Related segment

KDDI Corporation

898

Media business- 16 -

[Information about impairment losses on non-current assets by reportable segment]
For the fiscal year ended May 31, 2023
Segment information is omitted because the Group has only one major segment, the Media business.
Furthermore, impairment losses were 65 million yen in the previous fiscal year.
For the fiscal year ended May 31, 2024
Segment information is omitted because the Group has only one major segment, the Media business.
Furthermore, impairment losses were 22 million yen in the current fiscal year.
[Information about amortization amount and unamortized balance of goodwill by reportable segment]
For the fiscal year ended May 31, 2023
Segment information is omitted because the Group has only one major segment, the Media business.
For the fiscal year ended May 31, 2024
Segment information is omitted because the Group has only one major segment, the Media business.
[Information about gain on bargain purchase by reportable segment]
There is no relevant information.
(Per share information)(Yen)
For the fiscal year
ended May 31, 2023

For the fiscal year
ended May 31, 2024

Net assets per share

449.24412.80

Basic earnings (loss) per share(47.99)(49.33)(Notes) 1. Regarding diluted earnings per share, while there are residual shares, they are not provided as there werediluted losses per share.
2. In the calculation of net assets per share, the Company’s shares that are recorded as treasury shares under theshareholders’ equity and held by the stock-granting ESOP trust account are included in treasury shares thatare excluded from the total number of outstanding shares at the end of the period. In the calculation of basic
earnings (loss) per share and diluted earnings per share, they are included in treasury shares that are excluded
when calculating the average number of shares during the period.
3. In the calculation of net assets per share, the number of the treasury shares excluded from the total number ofoutstanding shares at the end of the period is 99,792 shares for the previous fiscal year and 86,067 shares forthe current fiscal year. In the calculation of basic earnings (loss) per share and diluted earnings (loss) per
share, the number of the treasury shares excluded from the average number of shares during the period is
109,735 shares for the previous fiscal year and 91,530 shares for the current fiscal year.
4. The basis for calculating basic earnings (loss) per share is as follows:- 17 -

For the fiscal year
ended May 31, 2023

Loss attributable to owners of parent(Million yen)

For the fiscal year
ended May 31, 2024

(1,150)(1,186)––

Loss attributable to owners of parent(Million yen)

(1,150)(1,186)

Average number of shares ofcommon shares outstanding during
the period (Shares)

23,976,325

24,047,377

Amount not attributed to commonshareholders (Million yen)

For the fiscal year
ended May 31, 2023

7th share acquisition rights
30,000 units(30,000 common shares)
Issued on July 29, 2016
9th share acquisition rights
1,600 units(1,600 common shares)
Issued on July 29, 2019
10th share acquisition rights
8,700 units(8,700 common shares)
Issued on September 14, 2020
Overview of residual shares notincluded in calculation of diluted
earnings per share due to lack ofdilutive effect

11th share acquisition rights
82,900 units(82,900 common shares)
Issued on June 2, 2021
12th share acquisition rights
8,000 units(8,000 common shares)
Issued on September 30, 2021
13th share acquisition rights
23,000 units(23,000 common shares)
Issued on May 2, 2022
14th share acquisition rights
31,800 units(31,800 common shares)
Issued on June 29, 2022

- 18 -For the fiscal year
ended May 31, 2024
7th share acquisition rights
30,000 units(30,000 common shares)
Issued on July 29, 2016
9th share acquisition rights
1,600 units(1,600 common shares)
Issued on July 29, 2019
10th share acquisition rights
8,700 units(8,700 common shares)
Issued on September 14, 2020
11th share acquisition rights
74,900 units(74,900 common shares)
Issued on June 2, 2021
12th share acquisition rights
8,000 units(8,000 common shares)
Issued on September 30, 2021
13th share acquisition rights
20,000 units(20,000 common shares)
Issued on May 2, 2022
14th share acquisition rights
24,700 units(24,700 common shares)
Issued on June 29, 2022
15th share acquisition rights
24,000 units(24,000 common shares)
Issued on July 3, 2023

5. The basis for calculating net assets per share is as follows:
As of May 31, 2023
Total net assets (Million yen)

As of May 31, 2024

10,857

9,970

Amount deducted from total net
assets (Million yen)

68

79

(Share acquisition rights) (Million
yen)

(68)

(79)

10,7889,890

24,015,330

23,959,655

Year-end net assets related tocommon shares (Million yen)
Number of common shares at yearend used to calculate net assets per
share (Shares)(Significant subsequent events)
There is no relevant information.

- 19 -