FreeBit Co., Ltd.
Q2 Financial Results Briefing for the Fiscal Year Ending April 2021
December 11, 2020

Presentation
Shimizu: Hello, I am Shimizu, Director, Executive Vice President and CFO of FreeBit Co., Ltd. I would like tocommence the financial results briefing for the Q2 of the fiscal year ending April 2021.

With regard to today's agenda, we will report on the following three points: the second quarters consolidated
results and business progress by segment, the progress of the consolidated results for the year ending April
2021, and the forecasts.

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First of all, although the emergency declaration for the coronavirus has been lifted at present, I think that theoutbreak of the coronavirus in the winter will be more worrisome than expected. With regard to this, I think
the outlook for the economy and economic activities in the future is also very difficult.
Under such circumstances, we, including our customers and business partners, intend to conduct our businessactivities with the utmost consideration for the health of our staff and their families.
In addition, as our own initiative, we disseminate the use of FreeBit Save You to all employees and staff. By
developing and operating these services, we will consider maintaining the health of our employees, and we
intend to continue conducting our business activities in the future.

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Next, I would like to explain our consolidated financial results for the second quarter.
First, in a timely manner, the Company will disclose the sale of subsidiaries and changes in the scope of
consolidation on two days, September 17 and September 30.
The transfer of shares in FreeBit EPARK Healthcare and ALC PRESS INC. and the recording of extraordinary
income are timely disclosed on September 17. On September 30, we made a timely disclosure of the transferof shares in Four-Members.

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In response to this, we have made major changes to the scope of consolidation and the situation is as shownin this sheet. Especially with regard to the announcement of today's financial results, we will report on therange enclosed in red.
For Four-Members, it is deconsolidated at the end of Q2 and for the FreeBit EPARK Health Group in the
HealthTech Business, it is also deconsolidated at the end of Q2.
On the other hand, with respect to the ALC Group of EdTech, since the share transfer is settled on November
30, deconsolidation procedure will be done at the beginning of Q3.
The accounting is based on these standards, and I will show you the data.

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4This is the result of consolidated results.
Net sales were JPY28.117 billion, EBITDA was JPY2.52 billion, operating income was JPY1.989 billion, ordinary
income was JPY2.029 billion, and quarterly net income was JPY1.405 billion. Net income per share amounted
to JPY64.27.
The two segments of InfraTech and Real Estate Tech, as well as Internet Infrastructure, contributed
significantly to higher sales and profits.
As for net sales, the EdTech and AdTech Businesses were particularly affected by the expansion of coronavirus,
especially in Q1, but the increase in sales in the Internet Infrastructure Category mentioned earlier made asignificant contribution, resulting in increase of 3.8% YoY.
Operating income nearly doubled YoY, rising 101.7%, reflecting the increase in sales of InfraTech and the
expansion of Real Estate Tech's Condominium Business.
Ordinary income increased 123.3% YoY due to the increase in operating income.
With regard to quarterly net income, in addition to the increase in ordinary income, there was a change in thescope of consolidation as mentioned above, so an extraordinary profit or loss was recorded due to the impactof the change. As a result, compared with the previous fiscal year, sales were negative, but the businessreturned to profitability in the current fiscal year. As a result, sales increased by JPY1.587 billion YoY.
Despite an increase in quarterly net income, net income per share increased as a result of considering theimpact of the acquisition of treasury stock.
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5This sheet shows the Q2 accounting period which is extracted.
Even if we extract only the Q2 accounting period on a YoY basis, we have made significant progress in profits.
In this Q2, net sales were JPY14.7 billion and operating income was JPY1.371 billion.
As can be seen from the quarterly trends, even if Q1 is included, we are in a situation in which we are able toachieve considerable profit growth.
In particular, in the AdTech and EdTech Businesses, the Q1’s staying home coronavirus crisis significantly
affected Q1 result. I hope that you will understand that this trend is being achieved in response to the resultsof the improvement in that area in Q2, plus the solid business progress in the Internet Infrastructure Category.

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Continuing on, we have made up a percentage of sales.
Again, we refer to the InfraTech Business and the Real Estate Tech Business, and the Internet Infrastructure
Category. Both sales and segment income are positive YoY, and this portion is attributable to a large increasein sales and profits.

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In light of the above, this is an analysis of YoY differences in net sales.
This represents a YoY increase of 3.8%, as the increase in net sales in the Internet Infrastructure Category andthe HealthTech Business exceeded the negative in the EdTech and AdTech Businesses.

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Operating income increased 101.7% YoY due to the strong contribution of higher profits in the InfraTech
Business and higher profits in the HealthTech Business, which have been linked to the growth in net sales.

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9This is the trend of earnings structure of consolidated business results.
Now, the increase in net sales has led to an increase in operating income.

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10Here is a trend of selling, general and administrative expenses.
As a result, selling, general and administrative expenses declined slightly from the previous fiscal year, partly
due to the goodwill impairment in Q4 of the previous fiscal year. Also, the goodwill generated by the
consolidation of the Full Speed Inc. Group has decreased in Q2 from the previous fiscal year, and this has led
to a decrease in SG&A expenses.

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11Next is a trend of number of employees.
In this regard, the number of employees has decreased significantly due to the deconsolidation of FreeBit
EPARK Healthcare.
Looking ahead to Q3, the ALC Group in the EdTech Business will also be deconsolidated, so the number of
employees is expected to shift to just under 900.

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12This is an analysis of YoY differences in ordinary income.
This was due to an increase in operating income, which increased 123.3% YoY.

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13This is the quarterly net income.
This is due to the fact that there is a significant inflow and outflow, but first of all, it was an increase of JPY1.12
billion as a result of the increase in ordinary profit. There are two items of gain on sales of shares in subsidiaries
and affiliates, and the first is an increase of JPY949 million in EPARK Healthcare. As for Four-Members, this isalmost offsetting the provision for credit losses on loans, but it is recorded as both.
We have continued to account for the loss due to the negative impact, and there are two businesses, namely,
the depletion of TONE Mobile Inc.’s goodwill and the newly acquired business. However, we are also carryingout the depletion of these businesses.
As a result, the quarterly net income has changed from negative JPY181 million to JPY1.405 billion.

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14This is a comparison of BS from the end of the previous fiscal year.
Since we are selling shares of Four-Members and FreeBit EPARK Healthcare, we have experienced substantialchanges in assets/liabilities. The shareholders' equity ratio was 23.9%, up 4.9% from the end of the previous
fiscal year.
We believe that the capital adequacy ratio will improve significantly to a level exceeding 25% if we additionallyconsider the ALC PRESS INC.’s off balance sheet at the beginning of Q3.

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In the following section, we will report on business results and business progress by segment.
First of all, I will talk about the progress in the InfraTech Business.
In this business, net sales were JPY4.087 billion and segment profit/loss was JPY318 million for two quarters.
YoY comparison of segment profit/loss by segment. This is a comparison of Q2 cumulative period, but there
was an increase in mobile-related sales, an increase in sales of collaborative and optional services, and anincrease in profits from unprofitable businesses that were liquidated. Considering the increase in profit fromthe business succession of TONE Mobile Inc., which was acquired in the middle of the previous fiscal year, andthe decrease in profit from the fixed network, the segment profit has shifted from JPY345 million to JPY590
million.

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16This is the topic. The progress of the InfraTech Business.
On November 20 and December 11, we are presenting new services and campaigns that make full use of ourtechnology.

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Next is the Real Estate Tech Business.
Both sales and profits increased YoY, thanks to the continued strong performance of the condominium
internet service.
As for the difference in segment income/loss compared to the same period last year, gross profit increased
due to the increase in sales in the infrastructure area. In addition, considering the increase in sales of realestate brokerage services and the impact of structural reforms, the figure for the fiscal year under review was
JPY1.01 billion, compared with JPY780 million for the previous fiscal year, reflecting a significant increase inprofits.

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As a major KPI, the number of units provided is an important indicator for this segment. The current progress
is 646,000 units toward the target of 694,000 units for the current fiscal year, so we believe that we are making
good progress.

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Next is the progress of the AdTech Business.
In particular, both sales and profits declined YoY in Q1, partly due to the significant impact of the spread of
the coronavirus. As for Q2, as you can see the trends for each quarter, the segment income/loss for Q1 of theprevious fiscal year was JPY121 million, but it recovered in the form of JPY199 million in Q2.
As a result, segment income for the fiscal year under review was JPY320 million, compared with segment
income of JPY390 million for the previous fiscal year.

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In the AdTech Business, given the situation surrounding the coronavirus crisis, I think that DX demand iscurrently accelerating in particular. In response to this situation, we are accelerating the development of oursocial media and marketing business.
In this regard, we are working to improve our comprehensive solutions while forming strategic alliances withexternal companies, which are our strengths in each area.

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Next is the HealthTech Business.
In this regard, we have undertaken major structural reforms since Q3 of the previous fiscal year and based on
the results of these reforms, we are seeing solid sales and segment income.
Although there was a negative JPY281 million in the previous fiscal year, in light of the impact of thesestructural reforms and the increase in net sales, segment income for the fiscal year under review amounted
to JPY305 million.

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Next is the EdTech Business.
In this segment, the impact of the coronavirus was extremely strong, and net sales fell 27.0% YoY, indicatinga significant decline in net sales.
Segment income was significantly negative in Q1 of the fiscal year under review, particularly in comparison
with Q1 of the previous fiscal year. However, in Q2 of the fiscal year under review, we recovered partly in the
portion of orders received as a result of the Company's efforts to control costs and other measures in earlystage. As a result, segment income improved significantly in Q2 of the fiscal year under review.
In light of these results, the segment recorded a loss of JPY240 million, compared with a loss of JPY258 million
in the previous fiscal year.

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I would like to report on the progress of our consolidated financial results and our outlook for the future basedon the past results up to Q2.
Today, we have also announced revisions to our earnings forecasts, so the content of these revisions will be
here.
The revised figures are JPY52 billion for net sales, JPY2.4 billion for operating income, JPY2.3 billion forordinary income, and JPY750 million for quarterly net income.
Regarding net sales, we have reported a figure of negative JPY2 billion from the previous forecast. As I
explained earlier, sales of Q3 and Q4 will disappear in the three businesses of HealthTech, EdTech, and Real
Estate Brokerage. Therefore, although we did not expect a decrease in sales of that portion and profits to besignificant, the content of this report incorporates a slight decrease in profits.
On the other hand, the growth in sales in the Internet Infrastructure Category, such as the InfraTech Businessand the Real Estate Tech Business, has been extremely robust at present in some areas, so the content
considers the increase in sales and the increase in profits in these areas.
On the other hand, as is the case with daily news, the spread of the coronavirus has been increasing in somecases during winter season extremely. For this part, we have made considerable reference to risks such as
trends in the figures at the time of Q1 and are forecasting business progress in that part.
In addition, although the investment measures were planned at the beginning of the fiscal year, the timing of
implementation of these measures has been postponed due to the impact of the coronavirus disease andSupportJapan
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other factors, and related investments in accordance with the medium-term vision for the future have beenfactored in at JPY1.95 billion.
Based on these results, we have announced revisions to our earnings forecasts.

After considering these revisions to our earnings forecasts, we have presented trends in net sales andoperating income per employee.
Compared to the past, we are currently focusing on the off-balancing of FreeBit EPARK Healthcare and ALC
PRESS INC. and on business efficiency. Therefore, we expect sales and operating income per employee toincrease significantly due to the improvement in productivity.

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In the current fiscal year, we have positioned this period as a strategic transition period, transformation term,with the aim of becoming a corporate group capable of sustainable growth even under the new normal. We
have positioned this period as a strategic transition period.

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We have just discussed our investment policy for the second half of the fiscal year, but we will continue tomake investments that will lead to the next stage of business expansion in the next fiscal year and beyond
despite the impact of coronavirus.
CEO Ishida has uploaded a video titled Initiatives for SiLK VISION 2024, which I hope you will watch to gain abetter understanding of the contents of this video.

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27This is pre-5G investment.
As a result of separating the HealthTech and EdTech Businesses, we will continue to actively invest in thefollowing areas.
In this regard, we will allocate off-balance-sheet resources, funds, and other general management resources,
mainly in the Internet Infrastructure Category, to invest in pre 5G areas.
We would like to conclude the explanation of our financial results for the Q2 of the fiscal year ending April
2021.
Thank you for watching until the end.
[END]______________
Document Notes
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This document has been translated by SCRIPTS Asia.

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