To our Shareholders

Internet disclosure related to the Notice of the
16th Ordinary General Meeting of Shareholders

June 9, 2020
CYBERDYNE Inc.

Table of contents

Business Report
II Matters regarding the Company shares
3. Matters regarding Stock Acquisition Rights................................................................................ 2

VII System to ensure the properness of the business and actual ......................................... 3
operation of the system

Consolidated financial statements
Consolidated statement of changes in equity and notes to consolidated financial statements .................... 8

Non-consolidated financial statements
Statement of changes in shareholders’ equity and notes to non-consolidated financial statements ............ 23

The matters mentioned above are deemed to have been provided to all shareholders through disclosure via the interneton the Company website (https://www.cyberdyne.jp/english/company/IR.html) pursuant to the provisions of laws andregulations and Article 22 of the Company’s Articles of Incorporation.

1

Business Report
II Matters regarding the Company shares
3. Matters regarding the Stock Acquisition Rights(i) Status of the Stock Acquisition Rights issued to the CYBERDYNE’s Members of theBoard of Directors as remuneration for the performance of their duties
No items to report(ii) Status of the Stock Acquisition Rights issued to the CYBERDYNE’s employees asremuneration for the performance of their duties
No items to report(iii) Other important matters regarding the Stock Acquisition Rights
2015 1st Series Stock Options of CYBERDYNE Inc. / 2016 1st Series Stock Options of
CYBERDYNE Inc. / 2017 1st Series Stock option of CYBERDYNE Inc.
Name
(Date of resolution)2015 1st Series Stock Option of
CYBERDYNE Inc.
(Resolved on July 28, 2015)2016 1st Series Stock Option of
CYBERDYNE Inc.
(Resolved on May 24, 2016)2017 1st Series Stock Option of
CYBERDYNE Inc.
(Resolved on July 25, 2017)

Number of Stock Acquisition Rights

78 units

46 units

105 units

Class and number of shares coveredby the Stock Option

Common Share(100 Common Shares constitute 1 share unit)
7,800 shares

Common Share(100 Common Shares constitute 1 share unit)
4,600 shares

Common Share(100 Common Shares constitute 1 share unit)
10,500 shares

Gratis

Gratis

Gratis¥180,600 per unit(¥1,806 per share)¥306,000 per unit(¥3,060 per share)¥178,800 per unit(¥1,788 per share)

Amount to be paid in to obtain the
Stock Option
Amount to be paid in upon exercise of
the Stock Option
Exercise period

From July 29, 2017 to July 28, 2025

From May 25, 2018 to May 24, 2026

From July 26, 2019 to July 25, 2027

Issue price of shares upon exerciseof the Stock Options and increase ofstated capital per share

Issue price per share¥1,806
Increase of stated capital per share¥903

Issue price per share¥3,060
Increase of stated capital per share ¥1,530

Issue price per share¥1,788
Increase of stated capital per share¥894

Conditions on exercise of the Stock
Options(Refer to the note below)(Refer to the note below)(Refer to the note below)

1 external consultant

1 external consultant

1 external consultant

Allottee(Note)
Condition on exercise of Stock Option are stated below.
- In cases where holders of the Stock Option waive the Stock Option, such Stock Options may not be exercised.

2VII System to ensure the appropriateness of business operations andimplementation status of the system

1. System to ensure the appropriateness of business operations
The Company resolved the system to ensure the appropriateness of business operations of theMembers of the Board of Directors in compliance with laws, regulations and Articles of Incorporationand the structure to ensure the appropriateness of other business as below at the Board of Directors’Meeting.
(i) Systems to ensure that Members of the Board of Directors and employees of CYBERDYNE
Inc. (the “Company”) and its subsidiaries (collectively referred to as the “Group”) performtheir duties in accordance with laws, regulations and the Articles of Incorporation
The Company shall establish compliance-related internal regulations embodying the Company
Code of Conduct, for the Group’s Members of the Board of Directors and employees to ensure
adherence to laws, regulations, the Articles of Incorporation and the internal regulations.
A designated Member of the Board of Directors of the Company shall have crossorganizational control over the Group’s compliance initiatives. The designated Members of
the Board of Directors shall disseminate the spirit of compliance to Members of the Board of
Directors and employees of the Group to identify and solve problems.
The Company shall establish the Affiliated Company Management Policy and, in conformity
with that, appoint Members of the Board of Directors and, if necessary, Members of Audit
and Supervisory Board of subsidiaries, approve their important matters and take up part oftheir administrative works. Consequently the Company shall ensure the appropriateness of theaffiliated companies’ work pursuant to the Affiliated Company Management Policy.
The Company shall establish the Internal Audit Office who will work directly under theCompany CEO. The Internal Audit Office shall conduct internal audits in accordance with theInternal Audit Policy and the Affiliated Company Management Policy to check the compliancestatus with laws, regulations, the Articles of Incorporation, and internal regulations andmonitor the overall risk management status. Results of the internal audits shall be reported to
the Company CEO, the Audit and Supervisory Board, and the Board of Directors.
The Company shall establish and operate the Hotline System Policy as a means for employees
to directly provide information about legally suspicious behaviors. The method of providing
information by means of oral communication, e-mail, chat and the opinion boxes shall be thesubject of the compliance hotline protocol.

3

(ii) System to store and manage information related to the execution of duties by theCompany’s Members of the Board of Directors
The Company shall establish the Document Management Policy which states the method ofstoring and managing information related to the execution of duties. Pursuant to the law andthis protocol, the information related to the execution of duties shall be recorded and stored in
paper or electronic media.
This information shall always be accessible by Members of the Board of Directors andMembers of Audit and Supervisory Board.
(iii) Policies, procedures and other systems of the Company and the Group to manage the riskof losses
In order to strengthen the risk management structure of the Group, the designated Member ofthe Board of Directors shall put a relevant operating unit in charge of each risk category andeach operating unit in charge is to define risk scopes and profiles, and create self evaluation
policies and guidelines. The Member of the Board of Directors in charge of finance shallmonitor risks across the organization and address company-wide risks. When a new risk arises,
the Company CEO shall quickly appoint a Member of the Board of Directors or Head of an
operating unit in charge of handling such risks.
(iv) System of the Group to ensure the efficient execution of duties by Members of the Boardof Directors of the Company and the GroupAs a system to ensure the efficient execution of duties by Members of the Board of Directors,
The Board of Directors shall meet once a month and extraordinary meetings of the Board of
Directors shall be conducted whenever necessary.
Regarding the execution status of matters resolved by the meeting of the Board of Directors,
each in-charge Member of the Board of Directors or Head of an operating unit shall report ona regular basis and Audit and Supervisory Board shall perform audits.
The Company shall establish medium-term business policies and, if necessary, update themto cope with the changes in the business environment. The status of business performance inthat regard shall be reported to the Board of Directors’ Meeting whenever necessary.
The Company shall also establish the Affiliated Company Management Policy in order tomanage the subsidiaries under the related units of the Company so that Members of the Boardof Directors of the subsidiaries can execute their duties efficiently.
(v) System to ensure reporting on the performance of duties by subsidiaries’ Member of theBoard of Directors to the Company
The Company shall establish the Affiliated Company Management Policy and the subsidiaries
shall report to the Company’s units in charge of managing them where necessary with regard
to the status of their duties.
45(vi) Matters regarding employees who assist Audit and Supervisory Board with the fulfilmentof its duties
When the Audit and Supervisory Board requests assignment of staff to assist with its duties,
the Board of Directors may designate the appropriate employees who shall serve as assistant
employees or as employees who also hold a post as an assistant upon consulting with Audit
and Supervisory Board.
During the assistance period, the authority over the designated employees shall be delegatedto the Audit and Supervisory Board, and the employees shall not be subject to the chain ofcommand of the directors. Any performance evaluation and changes in the relevant personnel
providing assistance shall require the consent of the Audit and Supervisory Board.
(vii) System for Members of the Board of Directors and employees of the Company to reportto the Audit and Supervisory Board, and a system for Members of the Board of Directors
and employees of the subsidiaries, or the Company’s personnel who received reports
from Members of the Board of Directors and employees of the subsidiaries, to report to
the Audit and Supervisory Board of the Company
The Members of the Board of Directors and employees of the Company as well as the Membersof the Board of Directors and employees of the subsidiaries shall report any significant mattersthat is against the law or the Articles of Incorporation and matters that are considered dishonest
acts and matters that may have a significant impact on the Company, to the Members of the Audit
and Supervisory Board immediately. In addition, if a Member of the Audit and Supervisory
Board asks for a report from the Members of the Board of Directors or employees of theGroup pursuant to the law, Auditing Standards or Auditor’s Meeting Rules established by the
Audit and Supervisory Board, the relevant Members of the Board of Directors or employees inconcern shall report promptly. In order to improve comprehensiveness of the report regarding
any significant matters which are against the law or the Articles of Incorporation, matters thatare considered dishonest acts, and matters that may have a significant impact on the Company,
Members of the Board of Directors and employees of the Company as well as Members of theBoard of Directors and employees of the subsidiaries shall endeavor to conduct hearing andgather information from the reports stated in this clause and matters stated in Internal Audits,
hot-lines and Accounting Audits.
Pursuant to the Hotline System Policy, if matters that may violate the law or corporate
compliance in the Group are found, they shall be reported to the Board of Directors by the
Designated Member of the Board of Director in charge of compliance. Furthermore, thecontents reported and the research results shall be reported to the full-time Member of the
Audit and Supervisory Board.
The Internal Audit Office of the Company shall report the status of the internal audit to
Audit and Supervisory Board Members. Furthermore, the director in charge of complianceshall report the status regarding compliance to Audit and Supervisory Board when necessary.

(viii) System to ensure that the person who made reports to a Member of Audit andSupervisory Board Member will not be put in a disadvantageous position
The Company shall not conduct any treatment that puts a person in a disadvantageous position
because of his/her report made to a Audit and Supervisory Board Member.
(ix) Matters regarding the Company policy of processing auditing fees
If Member of the Audit and Supervisory Board requests a payment required in accordance withthe execution of their duty in advance or to be reimbursed, with the exception of cases wheresuch a payment is recognized to be completely unnecessary for the execution of their duty, it
shall be paid promptly upon request.
(x) Other systems to ensure the effective execution of audits by Members of the Audit andSupervisory Board of the Company
Members of the Board of Directors and employees of the Company and the subsidiaries shallcomply with hearing or visitation and other methods of examination by Members of the Audit
and Supervisory Board in order to secure the effectiveness of the audits.
The Company shall provide enough opportunities for Members of the Audit and Supervisory
Board to exchange opinions with Members of the Board of Directors, Accounting Auditors andany other personnel required to appropriately execute the duty as auditors.
Upon request of Members of the Audit and Supervisory Board, the Company shall also
provide enough opportunities for Members of the Audit and Supervisory Board to coordinate
with the subsidiaries’ Members of the Audit and Supervisory Board and to gather informationfrom employees of the subsidiaries.

62. Implementation status of the systems to ensure appropriateness of business operations
The Group established and implemented the aforementioned systems. Notable actions conductedwithin this fiscal year, which are thought to be important with regard to internal control, are statedbelow.
(i) Corporate Compliance System
All members of the Group endeavor to be compliant with the laws and regulations in executionof their duties in accordance with internal policies, such as the Company Code of Conduct
based on the aforementioned compliance systems. Furthermore, in order to detect or avoid
violation of compliance at the earliest opportunity, the Hotline System Policy and its methodof utilization are notified to related personnel in a thorough fashion.
(ii) Risk Management System
For the Group, the designated Member of the Board of Directors of the Company in charge ofrisk management determines the operating unit in charge of each risk category, monitor the risk
status and respond accordingly. Furthermore, the status of this risk management is subject toInternal Audits and audits conducted by Members of the Audit and Supervisory Board.
(iii) Efficiency of the execution of duty by Members of the Board of Directors
For the Group, the Board of Directors shall meet once a month with provisional Board of
Directors meetings conducted whenever necessary, in order to check the reports of businessexecution (including reports from subsidiaries), progress of business performance for the fiscal
year (including performance of subsidiaries), and so on.

7This is an English translation of financial statements as well as notes to financial statements,
originally in Japanese. Japanese original were audited by Deloitte Touche Tohmatsu LLC.

Consolidated financial statements

Consolidated statements of changes in shareholders’ equity (from April 1, 2019 to March 31, 2020)
Unit : Millions of yen
Equity attributable to owners of parent
Other components of equity

Capital stock

Capital surplus

Treasury shares

Financial assets measured
at fair value through othercomprehensive income

April 1, 2019

26,74526,494(0)Profit (loss)––

Other comprehensive income––

Total comprehensive income–

Purchase of treasury stock–

Foreign currency translation
adjustments of foreign
operations

Stock Acquisition Rights(1,071)

3

19

–

–

–

–

–

191

3

–

–

–

191

3

–

–

(0)

–

–

–

Share-based payments transactions

8

–

–

–

–

–

Equity transaction with noncontrolling interest

–

–

–

–

–

–

Changes due to a businesscombinations

–

–

–

–

–

–

8

–

(0)

–

–

–

26,75326,494

(0)

(880)

6

19

Total transactions with owners
March 31, 2020

Equity attributable to owners of parent
Other componentsof equity
Retained earnings
Total

Total equity

Non-controlling interests

Total(1,048)(7,972)

44,217(15)

44,203

Profit (loss)

–

(152)

(152)

3

(149)

Other comprehensive income

194

–

194

1

195

Total comprehensive income

194

(152)

42

4

46

Purchase of treasury stock

–

–

(0)

–

(0)

April 1, 2019

Share-based payments transactions

–

–

8

–

8

Equity transaction with noncontrolling interest

–

–

–

8

8

Changes due to a businesscombinations

–

–

–

(6)

(6)

Total transactions with owners

–

–

8

2

10

(854)

(8,124)44,268(9)44,259March 31, 2020
(Rounded down to the closest millions of yen)8

Notes to consolidated financial statements(Important items that form the basis for preparing “consolidated financial statements)
1. Basis of preparation of consolidated financial statements
The consolidated financial statements of CYBERDYNE Inc. (the “Company”) and its group companies(collectively referred to as the “Group”) have been prepared in accordance with International AccountingStandards (“IFRS”) from the fiscal year under review, in accordance with Article 120, Paragraph 1 of theOrdinance on Accounting of Companies. Certain items of the consolidated financial statements required
by IFRS are omitted in accordance with other statements in Paragraph 1 of the aforementioned ordinance.
2. Scope of consolidation
Status of consolidated subsidiaries
Number of consolidated subsidiaries: 13 companies
Names of major consolidated subsidiaries:‌Suzuka Robo Care Center Co., Ltd., Shonan Robo Care Center Co., Ltd., Oita Robo Care Center Co.,
Ltd., Cyberdyne Care Robotics GmbH, CYBERDYNE USA Inc., CEJ Capital Inc., CYBERDYNE &BROOKS, Inc., Cybernic Excellence Japan Fund 1 Investment Limited Partnership.
3. Scope of equity method
Status of affiliated companies included in the scope of the equity method
Number of affiliated companies included in the scope of the equity method: 1 company
Names of affiliated companies included in the scope of equity method:
Shisei Datum Ltd.
Status of jointly controlled companies included in the scope of the equity method
Number of jointly controlled companies included in the scope of the equity method: 1 company
Names of jointly controlled companies included in the scope of equity method:CYBERDYNE Omni Networks, INC.
4. Matters regarding account processing standards(i) Evaluation standards and methods for financial assets(1) Evaluation standards and methods for financial assets
The Group classifies financial assets to the following categories at the time of initial recognitiona) financial assets at fair value through profit or loss, b) financial assets at fair value throughcomprehensive income, c) financial assets measured at amortized cost.
The Group recognizes and de-recognizes all sales and purchases of financial assets in thenormal course of business on a settlement date basis. Sales and purchase of financial assets in9the normal course of business means sales and purchase of financial assets for which the delivery of
the asset is required within a period generally permitted by market rules or practices.
All financial assets are measured at fair value, plus transaction costs, unless they are classified as
financial assets measured at fair value through profit or loss.
Financial assets are classified as financial assets measured at amortized cost if all of the following
conditions are met.
• Assets are held based on a business model that aims to hold assets to collect contractual cashflows
• Cash flows, which consist only of the principal and interest payments on the principalbalance, occur on specific dates due to the terms of the contract related to the financial
asset.
Financial assets other than financial assets measured at amortized cost are classified as financial
assets measured at fair value. For financial instruments measured at fair value, with the exception of
those that are held for trading purposes that must be measured at fair value through profit or loss, theGroup designates whether of each individual financial instrument should be measured at fair value
through profit or loss or if it should be measured at fair value through comprehensive income. The
same designation shall be applied continuously.
(2) Post measurement
Measurements of financial assets after initial recognition are measured in accordance to its
classification as listed below.
a) Financial assets measured at amortized cost
Financial assets are measured at amortized cost using the effective interest method.
b) Financial assets measured at fair value
Changes in the fair value of financial assets measured at fair value are recognized as net profit
or net loss. However for financial instruments classified as financial instruments measured at fairvalue through other comprehensive income, changes in the fair value are recognized as othercomprehensive income. Dividends from such financial assets are recognized as profit or loss
included in the finance income.
(3) De-recognition of financial asset
The Group de-recognizes financial assets if the contractual rights to cash flows from those assets
expire, or if the Group transfers almost all of the risk and economic value of its ownership of thoseassets. If the Group continues to control the transferred financial assets, the Group recognizes theassets and related liabilities to the extent of its continuing involvement.

10(4) Impairment of financial assets
For financial assets measured at amortised cost, the Group recognizes an allowance for doubtful
accounts against estimated credit losses.
At the end date of each quarter, the Group evaluates whether the credit risk associated witheach financial asset has increased significantly from the initial recognition date.
If the credit risk associated with a has not increased significantly since the initial recognition,
the allowance for doubtful accounts is measured at the same amount as the expected credit loss
for 12 months. On the other hand, if the credit risk associated with a has increased significantly
since the initial recognition, the allowance for doubtful accounts is measured at the same amountas the expected credit loss for the entire period.
Whether or not there has been a significant increase in credit risk is determined based on
the risk of default, which is determined by downgrading the internal credit rating, considering
deterioration in the business performance of the counterparts, and considering information on
past due dates.
If the credit risk associated with a financial asset is deemed to be low as of the end date ofeach quarters, the credit risk associated with that financial asset is not deemed to have increased
significantly since the initial recognition.
However, for trade receivables that do not contain significant elements, the allowance for
doubtful accounts is always recognized in an amount equal to the expected credit losses for theentire period, regardless of any significant increase in credit risk from the initial recognition.
The Group estimates expected credit losses on financial assets in a manner that reflects thefollowing:.
• an unbiased probabilistic weighted sum computed by evaluating a range of possible
outcomes• time value of money• reasonable and supportable information available at the reporting date on past events,
current conditions and projections of future economic conditions without excessive costor effort
The amount of such measurement is recognized in net profit or net loss.
In the event that the impairment loss is reduced after the impairment loss is recognized, thedecrease in the impairment loss is reversed to net profit or net loss.
(ii) Evaluation standards and methods for inventories
Inventories are measured at the lower of cost or net realizable value. Acquisition costs are determinedby the specific identification method for products and work in process and by the moving-averagemethod for goods and raw materials. Net realizable value is the estimated selling price for theinventories in the ordinary course of business, less estimated cost and estimated selling expenses.
11

(iii) Depreciation methods of property, plant and equipment
Property, plant and equipment are stated at cost less any accumulated depreciation and impairment
losses.
The cost of an item of property, plant and equipment comprises any costs directly attributable toacquisition of the asset and the initial estimate of the costs of dismantling and removing the item andrestring the site on which it is located.
Depreciation of assets other than land and construction in progress is calculated on a straight-line
basis over the estimated useful lives of the assets. The estimated useful lives of major asset items are
as follows:
Buildings and structures

3 to 38 years

Operating lease assets

5 years

Tools, furniture and fixtures

2 to 20 years

The estimated useful lives, residual value and depreciation method are reviewed at each fiscal year
end, and any revisions are applied prospectively as changes in accounting estimates.
(iv) Leases
The Group determines whether a contract is a lease or includes a lease at the time the contract isentered into. If the contract transfers the right to control the use of the identified assets to consideration
for a period of time, the contract is considered to be a lease or to contain a lease.
Leases as lessee
Right-of-use assets and lease liabilities are recognized at the start date of the lease.
Right-of-use assets are initially measured at acquisition cost, which is obtained by making
adjustment to the amount initially measured as lease liability, lease payments made prior to the startdate and initial direct cost generated.
After initial recognition, right-of-use assets are depreciated using the straight-line method over the
shorter period of the following, useful lives or lease terms. The lease term is measured as the periodthat includes the non-cancelable period of the lease, the extended option period if it is reasonably
certain that the lease will be exercised, and the cancellation option period if it is not reasonably
certain that the lease will be exercised.
Lease liabilities are initially measured at the present value, which is the total amount of lease
payments payable discounted at the rate of interest on the lease or the rate of interest on additionalborrowings of the lessee.

12Lease payments are allocated to finance costs and the repayment of lease liabilities using theinterest method, with finance costs recognized in the consolidated statements of income.
For short-term leases with 12 months or less or leases with small underlying assets, right-of-use
assets and lease liabilities are not recognized and lease payments are amortized over the lease termby the straight-line method or other regular basis.
Leases as lessor
Leases for which the Group is the lessor are classified as finance leases or operating leases at the
point where the lease contract becomes effective.
When the Group classifies leases, the Group conducts comprehensive evaluates whether all of
the risks and economic values associated with ownership of the underlying asset are substantiallytransferred. A transfer is classified as a finance lease; otherwise, it is classified as an operating lease.
As part of this evaluation, the Group considers certain indicators, such as whether the lease period
based on the non-cancelable period accounts for the majority of the economic useful life of theunderlying asset.
Lease payments under operating leases are recognized in the consolidated statements of income
on a straight-line basis over the lease term. Units such as HAL that are leased as operating leases arepresented as operating lease assets in the consolidated statement of financial position.
In finance leases, when the Group becomes a lessor who is a manufacturer or a seller, the Group
recognizes revenue, cost of sales, and gains or losses on sales as asset transferred at a point of time,to which policy of IFRS 15 applies.
(v) Goodwill
Goodwill arising from the business combination is initially measured as the excess of the acquisition
price measured at the acquisition date over the fair value of the acquiree’s identifiable assets andliabilities and is not amortized. Goodwill is presented as amount obtained by deducting accumulated
impairment loss from the acquisition cost.
(vi) Depreciation methods of intangible assets
Intangible assets acquired separately are measured using acquisition cost at the initial recognition.
After initial recognition, with the exception of intangible assets with indefinite useful life,
intangible assets are amortized on a straight-basis over their estimated useful lives and are presented
at acquisition cost reduced by the accumulated depreciation and the accumulated impairment loss.
Expenditures related to internal generated intangible assets are recognized as expenses whenincurred, with the exception of development expenses that meet the criteria for capitalization.

The Group has no intangible assets with indefinite useful lives. The estimated useful lives of major
intangible assets are as follows:
Software3 to 5 years

Patents

8 years

The estimated useful lives, residual values and amortization method are reviewed at each fiscal year
end, and any revisions are applied prospectively as changes in accounting estimates.
(vii) Impairment of non-financial assets
Non-financial assets excluding inventories are assessed at the end of each reporting period todetermine whether there is any indication of impairment. If there is an indication of impairment, therecoverable amount of the asset is estimated.
A cash-generating unit, which is a unit for conducting impairment testing, is the smallest groupof assets that generates cash inflows that are generally independent of cash flows of other assets orgroups of assets.
Recoverability is measured, first by using the higher of fair value after deducting disposal costs andvalue in use as recoverable amount. If the recoverable amount is less than the carrying amount, thecarrying amount is reduced to the recoverable amount and the amount is recognized as an impairment
loss. When testing goodwill for impairment, the cash-generating units to which goodwill is allocatedare consolidated so that impairment is tested to reflect the smallest unit to which goodwill relates.
Goodwill acquired through a business combination is allocated to cash-generating units that are
expected to generate synergies from the combination. An impairment loss recognized in connection
with a cash-generating unit is allocated first to reduce the carrying amount of goodwill allocatedto that unit, and then to reduce the carrying amount of other assets in the cash-generating unit
proportionally. Value in use is the present value of future cash flows expected to accrue from theasset or cash-generating unit.
Impairment losses related to goodwill have not been reversed. As for the reversal of impairment
losses on the other assets or cash-generating units, if there is an indication at the end of each reporting
period that an asset or cash-generating unit that has incurred an impairment loss in a prior period
may have either disappeared or decreased, the recoverability of the asset or cash-generating unit isassessed. If the recoverable amount exceeds the carrying amount of the asset or cash-generating
unit, the impairment loss is reversed up to the carrying amount after the necessary depreciation oramortization is deducted from the carrying amount that would have been recorded if no impairment
loss had been recognized in a prior year.

(viii) Provisions
Provisions are recognized when the Group has a present legal or constructive obligation as a result ofa past event, it is probable that an outflow of resources embodying economic benefits will be required
to settle the obligation, and a reliable estimate can be made of the amount of obligation. Where timevalue of money is material, a provision is measured by its present value to which estimated future
cash flows are discounted using a pre-tax discount rate that reflects the risks specific to the provision.
Interest cost associated with the passage of time is recognized as finance costs.
(ix) Employee Benefits
Short term employee benefit obligations are measured on an undiscounted basis, and are recognized
as an expense when the related services are rendered. For bonuses, when there is a present legal orconstructive obligation to make payments of bonuses, and a reliable estimate of the obligation canbe made, the estimated amount to be paid is accounted for as a liability.
(viii) Revenue
The Group recognizes revenue based on the following five-step model, excluding revenue from
dividend and interest income based on IFRS 9 “financial instruments”.
Step 1: Identify the contract with a customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognize revenue when the entity satisfies a performance obligation
For further details, please refer to “Notes to consolidated statement of profit and loss” (Revenue)(x) Foreign currency transaction(1) Foreign currency transactions
Foreign currency transactions are translated into the functional currency of each companyof the Group at the spot exchange rate at the date of the transaction, or an exchange rate thatapproximates the spot rate.
Foreign currency monetary items are translated into the functional currency using the rates atthe end of reporting period.
Non-monetary items that are measured at fair value in foreign currencies are translated into
the functional currency using the exchange rates at the date when the fair value was measured.
Exchange differences arising from such translations and settlements are recognized in profit orloss. However, exchange differences arising from financial assets measured at fair value throughother comprehensive income are recognized in other comprehensive income.
13

(2) Financial statements of foreign operations
Assets and liabilities of foreign operations are translated at the rate at the end of each reporting
period. Income and expenses are translated at the average exchange rates for the period,
provided that there were no significant fluctuations in the exchange rates during the period.
Exchange differences arising from translation of the financial statements of foreign operations
are recognized in other comprehensive income. On the disposal of a foreign operation, thecumulative amount of exchange differences relating to that foreign operation is reclassified
from equity to profit or loss when the gain or loss on disposal is recognized.
(xi) Significant accounting policy related to Cybernic Excellence Japan Fund 1 Investment
Limited Partnership(1) Consolidation of Cybernic Excellence Japan Fund 1 Investment Limited Partnership by theCompany
The Company consolidates Cybernic Excellence Japan Fund 1 Investment Limited Partnershipdue to the following reasons.
The Company practically makes the decision of investment of CEJ Fund through theCompanies consolidated subsidiary CEJ Capital, Inc. (unlimited liability partner of CEJ Fund)thus the Company has the control based on IFRS 10 “Consolidated Financial Statements”.
Management fees and contingency pays that is to be paid from CEJ Fund to CEJ Capital, Inc.,
one of the GP of CEJ Fund, are eliminated in consolidation as intercompany transactions.
(2) Investment by CEJ FundFor s measured at fair value, with the exception of financial assets that are held for trading
purposes that must be measured at fair value through profit or loss, for each individual financial
instruments, the Group classfies each individual capital-based financial assets to either financial
assets measured at fair value through profit or loss or financial assets measured at fair value
through other comprehensive income. The same classification are applied continuously.
(3) LP (limited partner) equity ownership in CEJ FundCEJ Fund will request funding (capital call) to its LPsa) equity interest in LP other than the Company
The term of existence (up to 12 years from the effective date) is prescribed in the investment
limited partnership agreement of the CEJ Fund. In this agreement, it is stated that equity
interests in the CEJ Fund held by LPs other than the Company (hereafter, “Outside Investor”)
that invest in the CEJ Fund shall be distributed and refunded. As such it is recorded as aliability under “third-party interests in CEJ Fund” in the consolidated statement of financial
position and classified as “financial liabilities measured at amortized cost”.

14The book value of the liabilities is the amount of equity vested in Outside Investors under thelimited partnership agreement for investment assuming that the Fund is liquidated at the end ofeach quarter. “Third-party interests in CEJ Fund” is subject to change depending on paymentsfrom Outside Investors based on capital calls, distributions and refunds to Outside Investors, andthe performance of the CEJ Fund. Changes in the performance of the CEJ Fund are included in“gains or losses related to CEJ fund” in the accompanying consolidated statements of profit orloss. “Gains or losses related to CEJ fund” includes the costs of establishing and managing the
CEJ Fund.
b) equity interest in the Company
The Company’s equity investment in the CEJ Fund as a LP will be elimanated on consolidation.
(Notes on changes in accounting policy)
The Group has applied the following accounting standards from the beginning of the fiscal year
ended March 31, 2020.
Referred document
IFRS 16

Name of the referred document
LeasesOutline of the new establishment and revisions
Revised accounting for leases

The Group adopted IFRS 16 “Leases” (issued on January 2019; hereinafter “IFRS 16”) in the
beginning of the fiscal year ended March 31, 2020.
Upon applying IFRS 16, the Group recognizes cumulative effect of application at the pointof effective date. Furthermore, in transition to IFRS 16, the Group has chosen the practical
expedient detailed in IFRS 16 paragraph C3 by conducting assessment of whether contracts
contain leases based on IAS 17 “Leases” (hereinafter “IAS 17”) and IFRIC 4 “Determining
whether an Arrangement contains a Lease.”
For the leases that the Group previously classified as operating leases based on IAS 17, theGroup recognizes lease liabilities at the point of effective date. These lease liabilities are measured
at the present value of the remaining lease payments discounted using the lessee’s incremental
borrowing rate at the point of effective date. At the point of effective date, the amount of leaseliabilities recognized by the Group is ¥363 million and the weighted average of the lessee’s
incremental borrowing rates is 0.7%.

15

Upon applying IFRS 16 the Group has chosen the following practical expedient.
• A single discount rate is applied to portfolios of leases with reasonably similar characteristics• As an alternative to performing an impairment review, the Group relies on its assessmentof whether leases are onerous applying IAS 37 “Provisions, Contingent Liabilities andContingent Assets” immediately before the date of initial application - Leases for whichlease contracts ends after 12 months from the point of effective date are processed in thesame manner as short-term lease• Initial direct costs are excluded from the measurement of right-of-use assets at the point ofeffective date
• Use hindsight: e.g. in determining the lease term of the contract that contains options toextend or terminate the lease(Notes to consolidated balance sheet)
1. Allowance of doubtful accounts deducted directly from the assets
Trade and other receivables¥2 million

2. Accumulated depreciation and impairment loss on property, plant and equipment ¥2,709 million
3. Accumulated depreciation and impairment loss on right-of-use assets¥45 million

4. Reduction entry deducted from the acquisition cost due to government subsidy, etc.
Buildings¥631 million

Machinery & equipment¥145 million

Tools, furniture & fixtures¥211 million

Land¥96 million

Software¥17 million

5. Overdraft agreement
The Company has entered overdraft agreements with banks that the Company has transactions
with, in order to efficiently fund ongoing operations. Balance of unused line of credit based on
the overdraft agreements as of the end of this consolidated fiscal year is written below.
Maximum limit of total line of credit¥900 million

Balance of used line of credit¥– million

Balance of unused line of credit¥900 million

16

(Notes to consolidated statement of profit and loss)(Revenue)
Details of aggregation of revenue are set forth below.
Timing of revenue recognition
Service transferred over time

¥1,315 million

Asset transferred at a point of time¥186 million

Service transferred at a point of timeTotal

¥291 million¥1,792 million(Note) Since the Group operates under a single segment of business related to robotics, segment information on revenue is omitted.

Service transferred over time
Service transferred over time includes rental income based on the individual rental contract
and maintenance income based on the maintenance contract in relation to finance lease income
where the Group acts as a lessor of right-of-use asset.
The Group recognizes rental income as income generated throughout the rental period after
the customer acceptance of the relevant product, by either of the following method. Pay-per-use
model based on times of product usage in the relevant month and base fee model based on fixedmonthly price.
The Group recognizes maintenance income as performance obligation satisfied over time.
The Company records this revenue during this contract period based on average amount during
the period.
Asset transferred at a point of time
Asset transferred at a point of time includes revenue from sales of commodities and products
based on sales contract.
The Group mainly determines that performance obligation of sales of commodities as wellas products are satisfied at the point of customer acceptance the relevant product. The Group
receives most of the payment within one month from the point of satisfying the performanceobligation. With regards to transaction price, there is no significance in the amount of sales
revenue that includes variable consideration. Furthermore, there are no significant financial
components in the amount of promised consideration.
Furthermore, if the Group acts as a lessor of right-of-use of its devices such as HAL, theGroup classifies the relevant lease as finance lease. Finance lease income is processed in thesame way as cases where the Group acts as a lessor of manufacturer or distributor of sales ofgoods. The Group determines that performance obligation is satisfied at the point of customer
acceptance and the revenue is recognized at a point of time.

17Service transferred at a point of time
Service transferred at a point of time includes revenue from offering Cybernic Treatment
and training service at Cybernic Treatment Center and Robocare Centers, to end users (suchas patients). It also includes revenue received in return of providing outcomes of consigned
research projects.
The Group determines that performance obligation of Cybernic Treatment as well as training
services are satisfied at the point of completion of such services. The Group determines that
performance obligation of providing outcomes of consigned research projects are satisfied at the
point when the customer inspects and accepts the outcome.
(Notes to consolidated statement of changes in equity)
1. Total number and class of the issued shares within the consolidated fiscal year under review
Number of shares issued
as of April 1, 2019
(shares)Number of shares issued
Common SharesClass B Shares
Total

137,445,809
77,700,000
215,145,809

Increase (shares)

Number of shares issued
as of March 31, 2020
(shares)

Decrease (shares)

–
–
–

–
–
–

137,445,809
77,700,000
215,145,809

2. Number and a class of shares to be issued upon exercise of Stock Acquisition Rights(Excluding Stock Acquisition Rights of which the commencement date of exercise period has not
yet arrived)
Common Shares

22,900 shares(Notes to consolidated statement of changes in equity)
Status of financial instruments(i) Capital management
The Group is a company centered on research and development of innovative devices. It promotes
clinical research, verification and endeavors to obtain approvals from various regulators, in order tointroduce the Group’s product into the market and services, which will realize sustainable growth.
In line with these challenges, the Group manages its financial instruments to maximize its corporate
value.
There are no capital restrictions that affect the Group.

18

(ii) Risk management for financial instruments
In the process of its operation, the Group is exposed to various financial risks such as, credit risk,
liquidity risk and exchange rate risk. In order to mitigate these financial risks, the Group selects
financial instruments with very low risk. For financing, the Group either borrows from the bank or
issue bonds. Furthermore, all equity instruments held by the Group are non-marketable securities andit is not affected by the risk of stock market.
On derivative transaction, the Group has a policy not to conduct any speculative transactions.
(1) Credit risk management
Credit risk is the risk that a counterparty to financial assets held by the Group is unable to fulfil
its contractual obligations, resulting in a risk of financial loss for the Group.
a) Credit risk management– Trade and other receivables
Accounts receivable-trade expose the Group to customer credit risk. The Group manages
that risk with an internal audit process for investigating and approving customer credit on
initial transaction. Furthermore, according to Customer Credit Management protocol, theGroup also manages due dates and outstanding balances by customer, in order to mitigate
any concerns about collection due to deterioration in their financial positions and otherreasons.
Accounts receivables-other expose the Group to business partner credit risk, but thesereceivables are almost entirely settled in the short term.
– Short-term investments
Short-term investments are recognized in cash and cash equivalents and other financial
assets. They are highly safe and liquid financial instruments that include negotiable
deposit and jointly-managed money trust.
The carrying amount after impairment of financial assets in the consolidated statement offinancial position represents the Group’s maximum exposure to the credit risk of financial
assets. The Group is not exposed to excessive credit risk associated with a particularcustomer that requires exceptional management.
The Group recognizes allowance for doubtful accounts for trade receivables andother financial assets measured at amortized cost by estimating future credit losses
in consideration of recoverability and significant increases in credit risk. The Group
determines if credit risk has increased significantly by evaluating changes in default risk
with reference to factors including the decline of counterparty results, and delinquency
information.

19

Accounts receivable-trade are particularly important financial assets for the Group. The Group
collectively measures expected credit losses of the financial assets for the entire period torecognize the allowance for doubtful accounts. In the following situations, that would adversely
affect future cash flows, however, the Group measures expected credit losses individually bytreating each receivable as a credit-impaired financial asset:• Where the customer has serious financial difficulties• Where the customer defaults or becomes delinquent in accounts receivable payments despite
repeated demands for payment• Where it is more likely that the customer will go into bankruptcy or face a situation thatforces it to reconstruct its business
The Group directly writes down the carrying amount if it does not reasonably expect to recover
all or part of the trade receivables, following an internal process of investigation and approval.
The Group is not exposed to excessive credit risk associated with a particular customerthat requires exceptional management. Furthermore, the customers of the Group are highly
creditworthy and the credit risk is limited. As the customer of the Group are highly credit
worthy, there are very few delinquent in accounts receivables and impact towards impairmentsin accounts receivable-trade and allowance for doubtful accounts are insignificant.
The Group always sets its limit of allowance for doubtful accounts towards trade receivables
that does not include important financial elements at the amount of expected credit losses forthe entire period.
The Group does not have excessively concentrated credit risk with respect to singles
counterparties or groups to which such counterparties belong. As the customers’ of the Groupare credit worthy companies with limited credit risk, the Group has few past due receivables
and little impact on the impairment of accounts receivable and the allowance for doubtful
accounts. The Group always provides an allowance for doubtful accounts at amounts sufficient
to cover probable losses on trade receivables that do not have a material financial component.
b) Liquidity risk management
Liquidity risk is the risk that an entity is unable to make a payment by its due date in performing
its repayment obligations for financial liabilities that become due.
The Corporate Unit of the Group renews the funding plans where necessary and maintains thelevel of liquidity on hand above certain level, in order to manage liquidity risk.

20c) Exchange rate risk management
The Group also operates outside Japan, and therefore is exposed to the risks of exchange
rate fluctuations associated with transactions conducted in foreign currencies etc.
As the impact of changes in exchange rate is insignificant, related information is omitted.
Furthermore, translation of the financial statements of the subsidiaries operating outsideof Japan affects the amount of other comprehensive income. However, the Group does notregard this impact to be material.
(3) Fair value of financial instruments
Fair value in the consolidated financial statements as of March 31, 2020 are as follows:.
Unit : Millions of yen
Fair value

Amount on consolidated financial statement(Financial assets)
Financial assets measured at fair value through amortized costs
Leasehold and guarantee deposits

68

76

3,550

3,550

367

367

6

6

864

864

1,714

1,714

88

88

Financial assets measured at fair value through profit or loss
StocksConvertible bonds
Other
Financial assets measured at fair value through other comprehensive income
Stocks(Financial liabilities)
Financial liabilities measured at fair value through amortized costs
Third-party interests in CEJ Fund
Bonds and borrowings

Measurement methods of the fair value
The Group adopts the following measurement methods for the main financial instruments
measured at fair value:(Cash and cash equivalents, trade and other receivables, other financial assets (current), tradeand other payables)
Carrying amounts approximate fair values because these are settled in the short-term.

21

(Other financial assets (non-current))
Fair value of non-marketable equity securities is calculated using the most appropriate valuation
method, including the most recent transaction price method, comparable company method,
equity in net assets based on the most recent available information, and discounted present valueof future cash flows.
Fair value of leasehold and guarantee deposits is measured by present value obtained throughdiscounting yield to maturity of long term bonds with high security by planned schedule ofredemption.
(Third-party interests in CEJ Fund)The carrying amount of the third-part interests in CEJ Fund is the amount of equity interest
attributable to third-party investors assuming that the fund is liquidated at the end of each quarter.
As such the fair value of the equity interest is determined based on the carrying amount of theequity interest.
(Bonds and borrowings)
Bonds are calculated based on market prices or prices offered by financial institutions.
Short-terms loans payables are recorded at carrying amount as it is settled in a short period oftime and their carrying amounts approximate their fair values.
Long-term loans payable with floating interest are recorded at carrying amount, as it reflects
market interest rates over a short period of time and their carrying amounts is approximately
equal to their fair values.
Long-term loans payable with fixed interest rates are calculated based on the present value of
future cash flows discounted at the interest rate that would be applied if similar contracts were
newly executed.

22

(Notes to per-share data)
1. Owner’s equity per share(Note) Owners equity per share are calculated based on the following
Total amount of owner’s equity per share
Amount deducted from total amount of owner’s equity per share
Owner’s equity per share at end of year pertaining to Common Shares and shareequivalent to Common Shares
Number of Common Shares and shares equivalent to Common Shares that is usedin calculation of owner’s equity per share

2. Basic loss per share(Note) Basic loss per share are calculated based on the following
Loss attributable to CYBERDYNE
Amount not available for Common Shareholders and Shareholders equivalent toCommon Shareholders
Loss attributable to Common Shares and shares equivalent to Common Shares of
CYBERDYNE
Average number of Common Shares and shares equivalent to Common Shares
during the period(Notes on premise of going concern)
There are no items to report¥205.71¥44,268 million¥10 million¥44,257 million
215,141,358 shares¥0.71¥152million¥– million¥152 million
215,141,368 sharesNon-consolidated financial statements

Non-consolidated statements of changes in shareholders’ equity (from April 1, 2019 to March 31, 2020)
Unit : Millions of yen
Equity attributable to owners of parent

April 1, 2019

Retained earnings

Capital surplus

Capital stock

Other retained earning

Legal retained
earning

Total capitalsurplus

Legal capitalsurplusRetained earning brought forward

26,77826,714

26,7140(9,506)

Change of item during year
Net loss

–

–

–

–

(849)

Acquisition of treasury shares

–

–

–

–

–

Net changes in item other thanshareholders’ equity

–

–

–

–

–

Total change of item during year
March 31, 2020

–

–

–

–

(849)

26,77826,714

26,714

0(10,355)

Shareholders’ equity

Valuation and translation adjustments

Retained earnings

Total shareholders’equityTreasury shares

Total retained
earnings(9,506)

April 1, 2019

Valuation difference on
available-for-sale securities

Total valuation andtranslation adjustments(0)43,98715

15

Change of item during year
Net loss

(849)

–

(849)

–

–

Acquisition of treasury shares

–

(0)

(0)

–

–

Net changes in item other thanshareholders’ equity

–

–

–

(4)

(4)

Total change of item during year
March 31, 2020

(849)

(0)

(849)

(4)

(4)

(10,355)(0)43,138

11

11

Stock Acquisition
RightsApril 1, 2019

Total net assets
19

44,020Change of item during year
Net loss–(849)

Acquisition of treasury shares–(0)

Net changes in item other thanshareholders’ equity–(4)

Total change of item during year

–

(853)

March 31, 2020

19

43,167(Rounded down to the closest millions of yen)23

Notes to non-consolidated financial statements(Important items that form the basis for preparing “non-consolidated financial statements”)
1. Evaluation standards and method for important assets(i) Evaluation standards and methods for securities
Bonds held to maturity

Amortized cost method (straight-line method)

Other securities
Non-marketable securities
Shares of subsidiaries and associates as well as investments
in capital of subsidiaries and associates

Moving average cost method
Moving average cost method(ii) Evaluation standards and methods for inventories
Finished goods, work in process

Specific cost method

Raw materials and merchandises

Moving average cost method

Supplies

Last purchase price method

Inventories with reduced profitability were devalued.

2. Depreciation methods of non-current assets(i) Property, plant and equipment
Declining-balance method is adopted. However, for buildings (excluding attached equipments tobuildings), attached equipments to buildings and structures obtained after April 1, 2016, assets forrent, as well as part of tools, furniture and fixtures, the straight-line method is adopted. The useful
lives for major assets are as follows.
Buildings

3-38 years

Structure

10-20 years

Machinery and equipment

5-7 years

Vehicles2-6 years

Tools, furniture and fixtures

2-20 years

Assets for rent

5 years(ii) Intangible assets
Straight-line method was adopted. Software for internal use is amortized using the straight-line
method over the estimated useful lives (within five years)
Software5 years

Patent rights

8 years24

(iii) Long-term prepaid expenses
The straight-line depreciation method is adopted.
3. Basis for recording provision and allowance for doubtful receivables
Allowance for doubtful accounts
To provide for losses incurred through bad debts, the amount of potential loss is calculated by using
the historical loss ratio in case of non-classified loans/receivables. Potential losses for classified loans/receivables are individually assessed.
4. Other material information regarding the preparation of financial statements(i) Basis for evaluating foreign-currency-denominated assets and liabilities in Japanese yen
Foreign-currency-denominated money claims and liabilities are converted into Japanese yen at the
spot exchange rates in effect at the balance sheet date, and the exchange differences are scored as
profits/losses.
Furthermore, Foreign-currency-denominated securities (other securities) are converted into
Japanese yen at the spot exchange rates and the valuation difference is included in the net assets asvaluation difference on available-for-sale securities.
(ii) Accounting treatment of consumption taxes, etc.
Consumption taxes and local consumption taxes are excluded from the transaction accounts.
(iii) Treatment method of deferred assets
New share issuance costs are recognized as expenses when disbursed.

25

(Notes to the non-consolidated balance sheet)
1. Accumulated depreciation deducted directly from the assets
Property, plant and equipment¥2,480 million
Amount stated above includes accumulated impairment losses
2. Reduction entry deducted from the acquisition cost due to government subsidy, etc.
Buildings¥631 million
Machinery & equipment¥145 million
Tools, furniture & fixtures¥211 million
Land¥96 million
Software¥17 million
3. Overdraft agreement
The Company has entered overdraft agreements with banks that the Company has transactions
with, in order to efficiently fund ongoing operations. Balance of unused line of credit based on
the overdraft agreements as of the end of this consolidated fiscal year is written below.
Maximum limit of total line of credit¥900 million

Balance of used line of credit¥– million

Balance of unused line of credit¥900 million

4. Money claims and liabilities toward subsidiaries
Short-term money claims¥213 million

Long-term money claims¥96 million

Short-term money liabilities¥6 million(Notes to non consolidated statement of income)Business transactions with subsidiaries and associates
Business turnover from operating transactions
Net sales
Other operating transaction
Transaction amount other than business transactions¥42 million¥54 million¥155 million(Notes to statement of changes in shareholders’ equity)
Number of treasury shares as of the end of business year ended March 31, 2020
Common Share
4,451 Shares
26

(Notes to tax effect accounting)
The deferred tax liabilities are mainly due to retirement costs for asset retirement obligations.
(Notes to revenue recognition)
Same as “Notes on Consolidated Statements of Income (Revenue)” in the notes to consolidated
financial statements.
(Notes on transaction with related parties)
Subsidiaries and associates etc.
Type

Name
CEJ Capital, Inc.

Subsidiary

Cybernics Excellence
Japan Fund 1
Investment Limited
Partnership

Ownership ratio Relationship withof voting rights*1 the related party
Interlocking
Direct ownershipduties forof 60%
directors
Investment in
Direct ownershipan investmentof 60%
limited(60%)
partnership

Description oftransaction

Transaction amount(millions of yen)

Year end balance(millions of yen)

Items

Receipt ofbrokerage fee*2

147 Unearned revenue

122

Underwriting of
capital increase*3

600

–

–

(Notes)*1 The bracket inside “ownership ratio of voting rights” represents indirect ownership percentage included.
*2 The receipt of consignment fees is reasonably determined by discussion between the two parties in consideration of the nature of business.
*3 The underwriting of capital increase was in response to capital calls.

(Notes to per-share data)
1. Net assets per share(Note) Net assets per share are calculated based on the following
Total net assets
Amount deducted from total net assets
Net assets at end of year pertaining to Common Shares and shares equivalent toCommon Shares
Number of Common Shares and shares equivalent to Common
Shares at the end of the fiscal year that is used in calculation of net assets per share

2. Net loss per share(Note) Net loss per share are calculated based on the following
Net lossAmount not available for Common Shareholders and shareholders equivalent toCommon Shareholders
Net loss attributable to common shares and shares equivalent to Common Shares
Average number of Common Shares and shares equivalent to Common Shares
during the fiscal year

¥200.56¥43,167 million¥19 million¥43,148 million
215,141,358 shares¥3.95¥849 million¥– million¥849 million
215,141,368 shares

Although there were dilutive shares, diluted net income per share is not disclosed because the Company posted a net loss per share.

27

This is an English translation of financial statements as well as notes to financial statements,
originally in Japanese. Japanese original were audited by Deloitte Touche Tohmatsu LLC.