FreeBit Co., Ltd.
Financial Results Briefing for the Fiscal Year Ended April 2020
June 19, 2020

Presentation
Tanaka: I am Tanaka of FreeBit Co., Ltd. Today, I would like to explain the financial results for the fiscal year
ending April 2020.
FreeBit has transitioned to a new management structure from the new fiscal year starting on May 1, but I will
present today as it is for the announcement of the results for the previous fiscal year. From this fiscal year
onward, Shimizu, Director and Executive Vice President, will explain the earnings forecasts later. I am in aposition today to thank everyone for the support I have received to the date and I would like to ask for yourcontinuous support for FreeBit Co., Ltd. going forward. Now, let me begin.

First, this is the consolidated financial results. Net sales amounted to JPY55.295 billion, an increase of 9.8%
YoY. EBITDA was JPY4.638 billion, operating income was JPY2.587 billion, and ordinary income was JPY2.481
billion.
So far, we have made progress in line with the performance forecast that we announced the other day and inline with the financial forecast we revised the day before yesterday. As we announced the day before
yesterday, the final profit was negative JPY619 million.

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Unfortunately, both operating income and ordinary income declined from the previous year. The Company
also posted a net loss of JPY600 million due to a large extraordinary loss resulting from a review of valuableassets considering this business performance and the status of the new coronavirus.
In terms of sales, we saw an increase. This increase is attributable to the full-year contribution of the Real
Estate Tech and EdTech businesses.
The operating income has been negative, and this is mainly because the existing operations in the EdTechbusiness have suffered a slight decline in earnings from the third quarter of the previous fiscal year due to thecompetitive situation. In addition, the situation of the new coronavirus has been significantly impacted,
resulting in a decline in earnings.
For the AdTech business, there have been several circumstances that have slowed down the growth in thepast two fiscal years or so. Also, in the fiscal year under review, profit declined 13.2% from the previous fiscal
year. This has also contributed to the decline of operating income.

Continuing onto an extraordinary loss I just mentioned. We have decided to post it significantly this time. The
reason for this is, firstly, that the HealthTech business is negative because the operations for services fornursing care providers were temporarily stopped in the context of the new coronavirus. As the business has
not yet fully recovered, the impact of this situation remains.

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2Secondly, in the EdTech business, there was virtually no demand for corporate training and overseas training
services in March and April. Originally, this is the period for the peak demand, but the loss of such demand
had an extremely large impact on the business.
Considering this, considering that the risk of impacts will remain in the current fiscal year onward, we have
impaired assets so that they will not have as much impact on our business results from the current fiscal year
onward.
As described here, the largest impairment loss was for the business assets of the EdTech business amounting
to JPY752 million.
Including software impairment losses, the EdTech business alone recorded impairment losses of nearly JPY1
billion.
In addition, in the HealthTech business, although we have been amortizing the goodwill for nursing careservices monthly till now, we have amortized it all at once at the end of this fiscal year.
Furthermore, in the Real Estate Tech business, we have impaired the goodwill from its subsidiary and otherassets because the operation of our stores has been greatly reduced by the impact of the new coronavirus.
Although the negative risk related to the new coronavirus to the business will continue, we conducted the
impairment based on the judgment that this impairment of the asset will eliminate some of the depreciation
burden going forward.

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Going back to the topics of the consolidated financial results. Net sales increased 9.8%, as I mentioned earlier,
thanks to the expansion of the Real Estate Tech business and the launch of the EdTech business. We haveachieved net sales growth for the eighth consecutive year and a record high.
In terms of operating income, the delays in digitalization in the EdTech business have made it difficult to win
in competition. In the AdTech business, the success of Internet advertising depends on the proper targetingof customers. However, based on the view that this conflicts with the issue of privacy, the internet advertisingsystem is being reviewed in various ways worldwide, not only in our company, over the past two years. Under
these circumstances, we were unable to achieve our initial target.
Next, I will talk about detailed topics for each segment. In the InfraTech business, cloud-based services andmobile-based services showed steady growth.
In addition, we incorporated the Tone mobile business in the fall of last year, succeeded it, and it has beenreflected in our performance since this year.
In terms of our initiatives with ALPS ALPINE CO., LTD., in CASE/MaaS marketplace, we are still in the processof preparing for the project.
The Real Estate Tech segment continues to be driven by the condominium Internet, with sales up 25.2% andextremely high growth continuing in this segment. Of course, the growth in sales contributed to the profit
significantly, resulting in a 17% increase.

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In the HealthTech business segment, FreeBit EPARK Health Care, Inc. continues to grow steadily, resulting in
a 17.4% increase YoY.
In the nursing care business, however, segment income was negative JPY140 million due to the suspension ofoperations.
However, as we saw an increase in the profit of FreeBit EPARK Health Care Inc. and the separation of
unprofitable businesses in the third quarter, we were able to achieve the blacks in this segment at the end.
In the EdTech business, we recorded a full-year profit for the last fiscal year when we acquired the business,but from the second half of the last fiscal year, the business performance has gradually become sluggish. In
the end, we were affected by the new coronavirus significantly, which had an extremely large negative impact
on our business performance.

In terms of quarterly performance, as shown in the chart, sales have grown considerably since the fiscal year
ended April 2016. Sales of the previous quarter were JPY15.234 billion, which seems to be a little smaller than
the fourth quarter of one year ago. However, this is because of the special situation in which fourth quarterof a year ago booked sales for six months following the acquisition of ALC PRESS Inc. If this is excluded,
quarterly sales also reached a record high.
Furthermore, on a fourth quarter basis, operating income reached a record high, although we regrettably fell
short of the operating income forecast in the medium-term plan. We were able to achieve record high profits

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on a quarterly basis and sales were significantly higher than expected. As a result, the Group remained on a
growth track, and this is the result up to the fourth quarter.

The segment that contributed the most to this substantial growth in sales is the Real Estate Tech business,
which achieved sales growth of 25.2% and earnings growth of 17% YoY.
The AdTech business, which had been driving growth for some time, recorded only a 5.3% increase in sales
due to a slight decline in growth caused by the changes in the external environment.
The growth of the HealthTech business and the sales of the newly added EdTech business offset the slowdownof growth in sales of the AdTech business, resulting in a significant increase in sales.

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The significant increase in sales is illustrated in this chart. The Real Estate Tech business, which is the leftmost,contributed JPY2.743 billion to sales, and the EdTech business contributed JPY1.13 billion. In the AdTechbusiness, although the growth rate was low, the actual amount of sales increased to JPY858 million and the
HealthTech business, which is a new business, increased sales to JPY519 million. Altogether sales increased
by about JPY5 billion on a full-year basis.

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Operating income increased due to the steady growth in the profit in the Real Estate Tech, HealthTech, andInfraTech businesses. The AdTech business was unable to cover the increase in expenses through revenue
growth, and its operating income decreased compared with the previous fiscal year.
Up until this point, the overall structure was such that profits would increase. However, as I mentioned earlier,the EdTech business started to slow down gradually. Impacted also by the new coronavirus, the businesssuffered a substantial decline in profits and, with the profit in the previous fiscal year and the loss in this fiscal
year, it posted the decrease of JPY614 million YoY. in profit. As a result, operating income posted JPY2.587
billion, down from previous fiscal year on a full-year basis.

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Looking at trends in the profit structure, although sales growth is extremely steady as shown in the chart,
SG&A expenses are also increasing along with growth. As a result, profits have declined from the previous
year due also in part to the impact of the new coronavirus.

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9As shown in the chart, SG&A expenses are rising sharply. The reason that the one bar chart stands out isbecause the expenses for six months were posted along with the posting of sales for six months of ALC PRESS
Inc. Please regard this as a singular value.

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The number of employees is increasing. However, the acquisition of ALC PRESS Inc. has been the largest factor
in the increase in recent years, and the increase remains small in each of other businesses.

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In terms of ordinary income, from JPY2.569 billion in the previous year, we had planned to post about JPY3
billion considering a decrease in equity in losses and other factors. However, due to the decrease in profit of
the EdTech business, ordinary income ended at the same level of operating income.

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Net income is the one that has changed most drastically this time. The EdTech business had about JPY1 billionof the extraordinary loss and the loss of about JPY600 million at the stage of ordinary income. As a result, theloss was JPY1.617 billion in EdTech business alone as shown in the bar second from right in the chart.
Consequently, we regret to report a final loss.
Excluding this factor, we would have had a final profit of about JPY1 billion. We deeply regret this point andconsidering the business risks in the future, we have taken such measures in the belief that the disposal of
losses at this point may have a positive effect of lightening assets in the future.

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Although the balance sheet is not a special major topic, the increase in sales of the business has resulted in
an increase in the total assets base.
The amount of net assets has not changed significantly, but the equity ratio has declined slightly due to theincrease in total assets. Liabilities have been rising because we had increased our cash position before the
new coronavirus emerged, in preparation for our future business development and a possible sudden change
in the external environment around the world.

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Next, we will report on the progress of each business segment.
In the InfraTech business, sales remained almost unchanged with a decline of 1.6% YoY. Profit increased by
4.3% because of efficient cost control.

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The Real Estate Tech Business continued to achieve significant growth in sales and as a result, profits also
increased.

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In terms of the number of users in the Real Estate Tech business, it continues to grow steadily and exceeded
564,000 units in the fiscal year ended March 2020. This trend will continue to be promoted in the future, so
we believe that it will continue to be a driving force behind our performance.

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17One of the topics in the Real Estate Tech business is the launch of a service called SPES. This is originally ashort-distance Ethernet standard for automobiles, but we have adopted this standard for apartment buildings
for the first time, and we have begun installing it to the housing of Daito Trust Construction Co. Ltd.
As you know, Daito Trust Construction Co. Ltd. is one of the largest companies in the industry, so if it works
well, it will become one of the greatest growth areas.
Another initiative we worked on is to upgrade embedded Wi-Fi services. This contributes to the initiatives by
GIGA PRIZE CO., LTD. to reduce operating costs as well as to improve the quality for customers.

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Continuing onto the AdTech business. Sales increased 5.3% while segment profit decreased 16.3%.
To improve the situation suffering from the deterioration in the industry due to the changes in the external
environment, we were strengthening the system by investing in the development costs and others. However,
due to the impact of the new coronavirus, there were also cancellations or postponements of the client
campaigns in March, April, and May, and a considerable portion of the business has been affected, resulting
in a decrease in profits.

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On the other hand, we will continue to pursue the creation of various new markets through overseas
expansion and others, and there is no change in our policy of continuing to grow while properly controlling
costs.

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20Moving onto the HealthTech business. FreeBit EPARK Health Care, Inc. is growing steadily, resulting in a 17.4%
increase in sales.
Segment profit was JPY111 million in the fourth quarter. While there were other businesses such as nursing
care business that were struggling, this segment is expected to continue to grow.

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21This is an image of FreeBit EPARK Health Care Inc.'s monthly bookings for the Drug Desk, which are steadilyrising. However, since the number of patients visiting hospitals in March and April was reduced by their selfrestraint of action due to the impact of the new coronavirus, the number of bookings has been slightly
affected.

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Furthermore, the number of downloads of drug handbooks continues to increase every month, exceeding
1.26 million units and this drug handbook is becoming extremely prominent in the industry. As there is still alarge room left in the market, we will continue to focus on this service.

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23This is the EdTech business. First, the reason for the acquisition of this business into our group was to convert
our business structure through digitization, meaning digital transformation, to generate more profit. We havebegun to invest in a variety of ways, but we have not yet been able to convert it to sales. Also, we are not yet
in the position to beat our competitors. Therefore, for the fiscal year under review, we began to see thedownward trend in sales and profits from summer onwards.
To improve this situation, we have made up-front investments by strengthening our personnel and increasing
our advertising expenditures, which had a negative impact on profit. Furthermore, the impact of the newcoronavirus led to a substantial loss of corporate demand and resulted in a significant negative impact on the
profit.
This is all about our business condition.

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As for the impact of the new coronavirus, I have just mentioned several impacts we had in my review ofbusiness performance. Since economic activities are not expected to return to their original status, we needto figure out how to continue our business in this new environment.
In our case, the InfraTech business and the mobile business in the InfraTech business are in the situation to
grow supported by a tailwind of growing needs of remote working. Therefore, despite the substantial negative
impact on EdTech business, the Group itself is not in the critical condition. The cash position was also
expanded prior to the spread of the new coronavirus, so measures around it have been taken properly.
However, if the spread of the new coronavirus prolonged, its impact will become larger. Therefore, we
continue to take utmost care in our business activities by taking measures such as promoting remote working
within our group.

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My last explanation is on the "SiLK VISION 2020", the medium-term business policy. We have promoted ourbusiness according to the medium-term business targets for the last fiscal year, the fiscal year ended April
2020. Our initial target was to become a company with consolidated net sales of JPY50 billion and consolidated
operating income of JPY5 billion. For sales, we achieved this target one year ahead of schedule, and this fiscal
year also saw a substantial increase. Therefore, the sales target was met completely.
On the other hand, the operating income was only about half of the JPY5 billion level, which we have regretted
deeply.
Last year, operating income was JPY3 billion, therefore originally, we had expected to reach the target thisyear if we continue to increase the profit as in the past. However, we had to make a downward revision
halfway, which we regret deeply as well.

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So, we achieved the sales target and this shows how we were able to achieve it. We have been working on
the AdTech business since 2009 in addition to the InfraTech business we originally had. Therefore, we started
from the condition where our business mostly consisted of the ones we had started at an early stage and at
the level of about JPY28 billion.
In that flow, the InfraTech business has matured and failed to achieve an increase in sales. However, the
AdTech business has grown very quickly and the Real Estate Tech business has won major customers andcontinues to grow significantly. In addition, in the past two to three years, the HealthTech business and EdTechbusiness have begun their operations. Thus, overall, we achieved the significant growth.

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As a result, in addition to mobile and AdTech, we have added HealthTech and Real Estate Tech to our growthdomain. Also EdTech was added as a new domain that is not stated here. Altogether, they formed the Groupbusiness. From here on, we expect new developments to be made with the new management. With this, I
would like to conclude my remarks.
Shimizu will continue with the explanation. Thank you very much.

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Shimizu: I am Shimizu, Director and Executive Vice President.
I will explain our consolidated earnings forecasts for the fiscal year ending April 2021.
We have already disclosed this information on April 16, but since May 1, we have changed the representative
director. Tanaka has been appointed as the Chairman of the Board from the President and Representative
Director, and Hiroki Ishida has been appointed as the President, CEO, and CTO from the Chairman and
Representative Director.
From the fiscal year ending April 2021, we intend to operate the Group with a management team centeredon the representative, Hiroki Ishida.

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First, this is the figures for the first year of the fiscal year ending April 2021. In our forecast of business results,
net sales are JPY54 billion, operating income is JPY1.9 billion, ordinary income is JPY1.7 billion, and profit
attributable to owners of parent is negative JPY200 million.
Regarding these figures, given that the EdTech and AdTech businesses are significantly affected by the newcoronavirus, we expect net sales to be negative 2.3% due to their impact.
On the other hand, in the "SiLK VISION 2020", the previous medium-term management plan, our net sales
have been extremely expanding and our portfolios have been extremely expanding in line with this. These
expanded portfolios are mainly infrastructures and platforms. We are considering optimizing these portfolios
to suit the new normal age of with coronavirus.
In addition, we have prepared figures based on these related costs, considering the Group's large-scale
structural reforms by making maximum use of the Group's human resources, technological resources, andpossessed data.
However, in the AdTech business, while we are considering the figures that are based on the expectation ofbusiness recovery to a certain extent, there are some cases where the second wave of the new coronavirus
has occurred or recovery has not been carried out as expected. As a result of these factors, there is a possibility
that the figures will change in the future. Therefore, we would like to promptly disclose any impacts on
business results.

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We are currently formulating the "SiLK VISION 2023" as our new medium-term management plan. We would
like to announce it gradually from August 2020, so we would like to ask for your patience.
This concludes the explanation of the full-year financial results for the fiscal year ending April 2020. Thank you
for watching until the end.
[END]______________
Document Notes
1.
2.

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TollfreePortions of the document where the audio is unclear are marked as follows: [Inaudible].
This document has been translated by SCRIPTS Asia.

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