Consolidated Financial Results for the Fiscal Year Ended December 31, 2022 [Japanese GAAP]
February 10, 2023
Listed company name

Frontier Management Inc.

Code No.

7038

URL https://www.frontier-mgmt.com(Title)Representative Director

Representative(Name) Shoichiro Onishi

Co-President and Executive Officer(Title)Contact

Listed Tokyo Stock Exchange

Executive Officer, Head of Company Planning and
Administration Department

Scheduled date of ordinary general
Scheduled date of filing of annual

TEL 03-6862-8335

Scheduled date of commencement

March 24, 2023

meeting of shareholders(Name) Hiroaki Hamada

of dividend payment

March 27, 2023

March 24, 2023

securities report
Preparation of supplementary material on
financial results: Yes
Financial results briefing: Yes(for institutional investors and analysts)(Millions of yen are rounded down)

1. Consolidated financial results for the fiscal year ending December 31, 1.2022 (January 1, 2022 to December 31, 2022)(1)Consolidated Operating Results
Net sales

Operating income(Percentages indicate year-on-year changes.)
Net income attributableto owners of parent

Ordinary income

JPY mil.

%

JPY mil.

%

JPY mil.

%

JPY mil.

%End of FY 2022

7,915

37.9

908

81.2

921

79.1

556

64.4

End of FY 2021

5,741

10.6

501

△13.7

514

△10.6

338

△19.5

(NOTE)
Comprehensive income

FY12/2022

565JPY mil. (68.2%)

Net income
Per share

FY12/2021

Fully diluted
Net income per share

336JPY mil. (△20.0%)

Shareholders' equity
Net income margin

Total assets
Ordinary income ratio

Net sales
Operating income
margin

Yen

Yen

%

%

%

End of FY2022

48.67

47.93

20.9

19.4

11.5

End of FY2021

29.70

29.24

14.0

13.5

8.7

(Reference) Equity in earnings of

FY12/2022

affiliates

8JPY mil.

FY12/2021

6JPY mil.

(2)Consolidated Financial Position
Total assets

Net assets

Equity ratio

Net assets per share

JPY mil

JPY mil%Yen

End of FY2022

5,658

3,015

51.7

255.37

End of FY2021

3,819

63.0

215.40

Reference: Shareholders' equity FY12/2022

2,454
2,927JPY mil

FY12/2021

2,407JPY mil(3)Consolidated Cash Flows
Operating

InvestingCash and cash equivalents
end of fiscal year

Financing

JPY mil

JPY mil

JPY mil

JPY milEnd of FY2022

1,250

△486

646

3,199

End of FY2021

316

△31

△404

1,784

2. Dividends
Annual dividends
End ofFirst quarterEnd ofsecond quarterEnd ofthird quarter

Term end

Total dividend amount(Total)

Total

Dividend payout
ratio(Consolidated)

Ratio ofdividends to net
assets(consolidated)

Yen

Yen

Yen

Yen

Yen

JPY mil%%End of FY2021

-

0.00

-

10.00

10.00

113

33.7

4.7

End of FY2022

-

0.00

-

28.00

28.00

320

57.5

11.9

End of FY 2023(Forecast)

-

0.00

-

-

-

-

(NOTE)We plan to pay a dividend for the fiscal year ending December 2023, but we have not yet determined the expected year-end dividend amount.

3. Forecasts for the fiscal year ending December 31,2023 (January 1, 2023 to December 31, 2023)((Percentages indicate year-on-year changes.)
Net sales

Full year

Operating income

Attributable to owners ofparent Net income

Ordinary income

Per share
Net income

JPY mil%

JPY mil%

JPY mil%

JPY mil%Yen

10,000

26.3

1,200

32.1

1,200

30.2

700

25.7

61.06

(NOTE)Due to the large fluctuation in business results during the fiscal year due to the timing of recording sales of incentive fees in the M&A Advisory Business, it is difficult to calculate consolidated
earnings forecasts for the second quarter (cumulative). In addition, because the Group manages its earnings over the course of the year, the Group has announced its earnings forecasts only forthe full fiscal year.

※ Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes in the scope of consolidation): Yes
New: 2 companies (company name) Celebrain Corporation and Frontier Capital Inc.
(2) Changes in accounting policies and changes or restatement of accounting estimates① Changes in accounting policies due to revisions to accounting standards, etc.: Yes② Changes in accounting policies other than ①: None
③ Changes in accounting estimates: None
④ Restatement of revisions: None
(3) Number of shares outstanding (common shares)① Number of shares outstanding at the end of the period

FY12/2022(including treasury stock)

11,468,478Shares

FY12/2021

11,418,398Shares② Number of treasury stock at the end of the period

FY12/2022

5,821Shares

FY12/2021

25,819Shares③ Average number of shares outstanding

FY12/2022

11,437,677Shares

FY12/2021

11,404,286Shares(Reference) Summary of Non-consolidated Financial Results
Non-consolidated results for the year ended December 31, 1.2022 (January 1, 2022 to December 31, 2022)(1)Non-Consolidated Results of Operations
Net sales

Operating income(Percentages represent previous fiscal year changes.)
Ordinary income

Net income

JPY mil.

%

JPY mil.

%

JPY mil.

%

JPY mil.

%End of FY 2022

7,546

31.6

1,078

110.3

1,081

110.8

754

118.4

End of FY2021

5,732

10.5

512

△10.0

513

△7.9

345

△16.4

Net income
Per share

Fully diluted
Net income per share
Yen

Yen

End of FY 2022

65.96

64.96

End of FY2021

30.29

29.82

(2)Non-Consolidated Financial Position
Total assets

Net assets

Equity ratio

Net assets per share

JPY mil.

JPY mil.

%Yen

End of FY 2022

5,646

3,136

54.9

270.56End of FY2021

3,800

62.7

213.24

Reference: Shareholders' equity FY2022

2,429
3,101JPY mil

FY2021

2,382JPY mil※ The financial results are outside the scope of audits by a certified public accountant or an auditing firm.
※ Explanations and other special notes concerning the appropriate use of business performance forecasts(Notes on forward-looking statements)
The earnings forecasts and other forward-looking statements herein are based on information currently available to the Company and on certain assumptions
deemed to be reasonable, and do not constitute guarantees by the Company of future performance.
Actual results may differ materially from the forecast depending on a range of factors. Please refer to "1. Overview of Operating Results, etc., (4) Future Outlook"on page 4 of the attached material for the assumptions upon which the forecasts are based and notes on the use of the forecasts.

○Accompanying Materials – Contents

1. Overview of Financial Results, etc. ………………………………………………………………………………………………………………………………

2(1) Overview of Operating Results for the Fiscal Year……………………………………………………………………………………………………………

2(2) Overview of Financial Position for the Fiscal Year……………………………………………………………………………………………………………

3(3) Overview of Cash Flows for the Fiscal Year…………………………………………………………………………….…………………………………….

3(4) Future outlook …................................................................................................................................................................……………………………………

4

2.Basic Concept to Selection of Accounting Standards….........................................................................................................……………………………………..

4

3.Consolidated Financial Statements…………………………………………………………………………………………………………………………………

5(1) Consolidated Balance Sheets ….......................................................................................................................................……………………………………

5(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income……………………….…………………………………….

7

Consolidated Statements of Income……………………………………………………………………………….…………………………………….

7

Consolidated Statement of Comprehensive Income …........................................................................................ .…………………………………….

8(3) Consolidated Statements of Shareholders’ Equity….................................................................................................... .……………………………………….

9(4) Consolidated Statements of Cash Flows…………………………………………………………………………….……………………………………….

11(5) Notes to Consolidated financial statements …...............................................................................................................…………………………………….

12(Notes on the Going Concern) ...................................................................................................................................…………………………………….

12(Changes in Accounting Policies) .................................................................................................................................…………………………………….

12(Additional Information) ..............................................................................................................................................…………………………………….

12(Segment Information) ……………………………………………………………………………………………......…………………………………….

13(Per Share Information) .................................................................................................................................................…………………………………….

16(Significant Subsequent Events) ....................................................................................................................................…………………………………….

16

-1-

1. Overview of Financial Results, etc.
(1) Overview of Operating Results for the Fiscal Year under Review
During the fiscal year under review (January 1, 2022 to December 31, 2022), the Japanese economy experienced a gradual relaxation of behavioral controls
accompanying the spread of the outbreak of a new type of coronavirus infectious disease (COVID-19) and the normalization of social and economic activities andsigns of an economic recovery. Nevertheless, the economic outlook remains largely uncertain, as evidenced by the shortage of supplies of natural resources due to theprolonged situation in Russia and Ukraine, soaring energy prices, and rising prices accompanying the depreciation of the yen.
In this company environment, our group continued to focus on proposing and executing one-stop solutions to executive officer issues by providing comprehensive
services that leverage management consulting, M&A advisory, revitalization support, and other functions. In January, we welcomed Celebrain Corporation which
operates a personnel-related consulting business, to our group, and expanded the solutions domain in management consulting. In April, we established Frontier Capital
Inc. which operates an investment business involving the dispatch of management personnel, and made preparations for the start of the business.
As a result of the above, our Group reported consolidated net sales of JPY7,915,655k (up 37.9% year on year), operating income of JPY908,131k (up 81.2%),
ordinary income of JPY921,511k (up 79.1%), and net income attributable to owners of parent of JPY556,722k (up 64.4%).

Operating results by segment are as follows.
Until now, the business of our group had been a single segment. However, from this consolidated fiscal year, we have changed to two segments: the Consulting andAdvisory Business and the Investment Business. The details are described in "(5) Notes to Consolidated Financial Statements (Segment Information)" of "3.
Consolidated Financial Statements and Major Notes." As a result, year-on-year comparisons and analyses are not performed except for net sales, operating income andnet sales by business in the Consulting and Advisory Business.

[Consulting and Advisory Business Segment]
In the Consulting and Advisory business segment, the management consulting business and the M&A advisory business performed well, with sales of
JPY7,912,655k (up 37.8%) and operating income of JPY1,099,403k (up 119.3%).

Results of operations by business segment are as follows.

< Management Consulting Business >The business results of the management consulting business for this consolidated fiscal year were JPY4,351,972k in net sales (up 32.7%). In the fiscal year underreview, sales increased substantially compared with the previous fiscal year. In addition to the benefits of increased personnel resulting from aggressive recruitment,
the Company contributed to the expansion of its consulting-related services, including SR/IR services, DX services, and human resources.

<M&A Advisory Business>
In the M&A Advisory business, consolidated net sales for the fiscal year under review were JPY2,793,465k (up 61.9%). In the fiscal year under review, sales
increased substantially compared with the previous fiscal year as a result of the successful completion of large-and medium-sized M&A deals.

< Revitalization Support Business >In the revitalization support business, net sales for the fiscal year under review were JPY601,236k (down 9.2%). In the fiscal year under review, the continuation offinancial institutions' support for loans to companies prevented the expansion of the need for revitalization support, and net sales decreased compared with theprevious fiscal year.

< Other Business >Operating revenues in the Other segment for the fiscal year under review were JPY165,982k (up 124.9%).

[Investment Business Segment]
In the investment business segment, the Company posted a net sales of JPY17,603k and an operating loss of JPY191,272k as a result of the recording of personnel
expenses and other expenses associated with the start-up of this business.

-2-(2) Overview of Financial Position for the Fiscal Year under Review(Assets)
Total assets at the end of the fiscal year under review were JPY5,658,644k (compared with JPY3,819,274k at the end of the previous fiscal year), an increase of
JPY1,839,369k from the end of the previous fiscal year. The breakdown shows JPY4,276,116k in current assets (JPY2,998,206k at the end of the previous fiscal
year), JPY1,375,149k in non-current assets (JPY821,068k at the end of the previous fiscal year) and JPY7,379k in deferred assets (-JPY1 thousand at the end of theprevious fiscal year). As a result, current assets increased by JPY1,277,909k, non-current assets increased by JPY554,081k and deferred assets increased by
JPY7,379k from the end of the previous fiscal year. The main changes in current assets were an increase of JPY1,414,871k in cash and deposits and a decrease of
JPY160,549k in notes and accounts receivable, trade and contract assets (notes and accounts receivable in the previous fiscal year). The main components of thechange in fixed assets were a JPY265,130k increase in goodwill, a JPY149,347k increase in lease and guarantee deposits, a JPY88,738k increase in facilities
attached to buildings, a JPY68,838k increase in deferred tax assets, and a JPY53,209k decrease in investment securities. The change in deferred charges was anincrease of JPY7,379k in founding costs.

(Liabilities)
Total liabilities at the end of the fiscal year under review were JPY2,642,688k (compared with JPY1,365,207k at the end of the previous fiscal year), an increaseof JPY1,277,480k from the end of the previous fiscal year. Of this, current liabilities were JPY1,868,624k (JPY1,282,944k at the end of the previous fiscal year)
and non-current liabilities were JPY774,063k (JPY82,262k at the end of the previous fiscal year). As a result, current liabilities increased JPY585,680k and noncurrent liabilities increased JPY691,800k from the end of the previous fiscal year. The main changes in current liabilities were a JPY211,471k increase in provision
for bonuses, a JPY138,388k increase in current portion of long-term loans payable, a JPY135,647k increase in other current liabilities due to an increase in accrued
consumption taxes and an increase in accrued expenses, a JPY34,161k increase in accounts payable-other, a JPY28,510k increase in income taxes payable, and a
JPY25,606k increase in accounts payable-trade. The main changes in long-term liabilities were an increase of JPY639,313k in long-term loans payable and anincrease of JPY52,487k in asset retirement obligations.

(Net Assets)
Net assets at the end of the fiscal year under review were JPY3,015,956k (compared with JPY2,454,066k at the end of the previous fiscal year), an increase of
JPY561,889k from the end of the previous fiscal year. This was mainly due to the recording of profit attributable to owners of parent of JPY556,722k.

(3) Overview of cash flows for the fiscal year under review
Cash and cash equivalents (hereinafter referred to as "cash") at the end of the fiscal year under review increased by JPY1,414,871k from the end of the previous
fiscal year to JPY3,199,089k.
The status of cash flows and their factors for the current consolidated fiscal year are as follows.

Cash flows from operating activities
Net cash provided by operating activities was JPY1,250,257k (compared with net cash provided by operating activities of JPY316,813k in the previous fiscal year).
This was mainly attributable to income before income taxes and minority interests of JPY868,006k, a decrease in notes and accounts receivable-trade of
JPY215,932k, an increase in provision for bonuses of JPY211,471k, stock-based compensation expenses of JPY88,167k, valuation loss on investment securities of
JPY53,505k, and depreciation and amortization of JPY47,495k, as well as a decrease in income taxes paid of JPY343,093k.

Cash flows from investing activities
Net cash used in investing activities was JPY486,911k (compared with net cash used of JPY31,524k in the previous fiscal year). This was mainly due to purchase ofshares of subsidiaries resulting in change in scope of consolidation of JPY238,932k, payment for lease and guarantee deposits of JPY148,174k, and purchase ofproperty, plant and equipment of JPY87,142k.

Cash flows from financing avtivities
Net cash provided by financing activities was JPY646,534k (compared with net cash used of JPY404,765k in the previous fiscal year). This was mainly due to anincrease of JPY860,000k in proceeds from long-term loans payable, and cash dividends paid of JPY113,750k and repayments of long-term loans payable of
JPY90,284k.

-3-

(4) Future outlook
Our 17th fiscal year (fiscal year ended December 2023) is the final year of the Medium-Term Management Plan for Fiscal 2021-2023 announced on February 9,
2021. We will make every effort to achieve our target for the fiscal year ending December 2023 (JPY8.7b in sales and an operating income margin of at least 20%・ROE20%).
Our key measures for the year ending December 2023 include ① enhancing our organizational sales structure (enhancing our organizational coverage system toexpand sales), ② enhancing our investment business (enhancing earning power through the start of operations of Frontier Capitals, Inc. and differentiating our group's
services in general), ③ enhancing branding (raising the awareness of our front desk staff through our owned media, magazine contributions, book publishing, etc.), ④
further improving the working environment for our employees (building and enhancing retention of the work environment where diverse human resources can play anactive role through the promotion of our sustainability basic policy and materiality with human resources as the core, and DE&I).
Through these priority measures, in the management consulting business and the M&A advisory business, we will expand profit opportunities by making
multifaceted proposals to client companies, while expanding the earnings base by continuously recruiting human resources and improving the retention rate.
In the revitalization support business, the need for revitalization support is expected to increase along with the normalization of social and economic activities dueto the convergence of the corona disaster, and we are strengthening our system to respond to these needs.
In addition to the existing businesses mentioned above, we believe that the full-scale operation of our consolidated subsidiary Frontier Capital Co., Ltd. willcontribute to the expansion of the Group's business scale and enhancement of shareholder value.
As a result of the above, for the fiscal year ending December 2023, we forecast consolidated net sales of JPY10,000,000k (up 26.3% year on year), operating
income of JPY1,200,000k (up 32.1%), ordinary income of JPY1,200,000k (up 30.2%), and profit attributable to owners of parent of 700 million yen (up 25.7%).

2.Basic Approach to Selection of Accounting Standards
Our group prepares consolidated financial statements in accordance with Japanese GAAP, considering the comparability of consolidated financial statements
between periods and among companies. The Company's policy regarding the application of International Financial Reporting Standards is to respond appropriately,
taking into account various domestic and overseas circumstances.

-4-

3.Consolidated Financial Statements(1)Consolidated Balance Sheets(Thousands of yen)
End of fiscal year
(As of December 31, 2021)

End of fiscal year
(As of December 31, 2022)

AssetsCurrent assets
Cash and deposits

1,784,218

Notes and accounts receivable

1,073,376--

912,827

Notes, accounts receivable and contract assets
Operational investment securities
Other

3,199,089

9,837

23,833

147,710

164,580

Allowance for doubtful accounts△16,936△24,214

Total current assets

2,998,206

4,276,116

Buildings, net

193,854282,593

Tools, furniture and fixtures, net

14,47331,122

Net property, plant and equipment

208,328

313,716

Fixed assets
Tangible assets

Intangible fixed assets
Software

11,267

10,471

Goodwill-

265,130-

18,750

Customer related asset
Other
Total intangible assets

102

102

11,369294,454

Investments and other assets
Investment securities

56,8003,591

Investments in affiliates

43,63351,707

Contribution to affiliated company

-

2,485

Lease deposits

212,055

361,403

Deferred tax assets

277,356

346,194

Other

11,524

1,595

Total investments and other assets

601,370

766,978

821,068

1,375,149

Organization expenses

-

7,379

Total deferred assets

-

7,379

3,819,274

5,658,644

Total fixed assets
Deferred assets

Total assets-5-

(Thousands of yen)Previous fiscal year
(As of Dec 31, 2021)

End of fiscal year
(As of December 31, 2022)

Liabilities
Current liabilities
Accounts payable

45,424

71,030-138,388

Accounts payable

94,699128,860

Income taxes payable

259,633

288,143

Accrued bonuses

553,014

764,486

Current portion of long-term debt

Provision for directors' bonuses
Provision for shareholder benefit program
Other
Total current liabilities

-

5,050

7,079

13,924

323,095

458,742

1,282,944

1,868,624

Fixed liabilities
Long-term debt-

639,313

Asset retirement obligations

82,262

134,750

Total long-term liability

82,262774,063

1,365,207

2,642,688

Common stock

178,723

210,062

Capital surplus

558,745577,503

Retained earnings

1,696,822

2,139,619

Total liabilities
Net assets
Shareholders' equity

Treasury stock△36,575△8,246

Total shareholders' equity

2,397,717

2,918,939

Foreign currency translation adjustments

9,380

8,352

Total accumulated other comprehensive income

9,380

8,352

46,96934,673

Other accumulated comprehensive income

Stock acquisition rightNon-controlling shareholders' equity
Total net assets
Total liabilities and net assets-6--

53,9902,454,066

3,015,956

3,819,274

5,658,644

(2)Consolidated Statement of Income and Consolidated Statement of Comprehensive Income(Consolidated Profit and Loss Statement)(Thousands of yen)
End of previous fiscal year
(January 1, 2021
to December 31, 2021)

End of current fiscal year
(January 1, 2022
to December 31, 2022)

Net sales

5,741,654

7,915,655

Cost of sales

2,247,959

3,230,126

Gross income

3,493,695

4,685,528

Salaries and allowances

1,302,744

1,419,541

Provision for bonuses

269,041

364,820

Selling, general and administrative expenses

Provision for directors' bonuses

-

2,025

Recruiting expenses

231,835

469,080Retirement benefit expenses

23,17423,259Provision for shareholder benefit program

7,079

6,845

Provision for allowance for doubtful accounts

1,303

6,903

Other

1,157,231

1,484,921

Total selling, general and administrative expenses

2,992,409

3,777,396

501,285

908,131

Operating income
Non-operating income
Interest income

125

158

Equity in earnings of affiliates

6,506

8,059

Insurance dividend income

1,125

1,802

Administrative fees received

2,268

1,502

Income from subsidies

686-

Foreign exchange gains

6,751

9,158

Other

239

375

17,702

21,057

Interest expense

1,253

7,429

Charges for stock compensation

2,902

-

256

247

Total non-operating income
Non-operating expenses

Other
Total non-operating expenses

4,411

7,676

514,576

921,511

Write-down of investment securities-

53,505

Total extraordinary loss-

53,505514,576

868,006

Ordinary income
Extraordinary losses

Income before income taxes and minority interests
Income taxes

228,988366,689

Income taxes-deferred△53,119△65,019

Total income taxes

175,868

301,670

Net income

338,707566,336

Net income attributable to owners of non-controlling interests
Net income attributable to owners of parent

-7-

-

9,614

338,707556,722

Consolidated Statements of Comprehensive Income(Thousands of yen)
End of previous fiscal year
(January 1, 2021
to December 31, 2021)
Net income

End of current fiscal year
(January 1, 2022
To December 31, 2022)
338,707566,336

Foreign currency translation adjustments△2,603△1,027

Other total comprehensive income△2,603△1,027336,103565,308

336,103555,694-

9,614

Other comprehensive income

Comprehensive income(Comprehensive income attributable to)Comprehensive income attributable to owners of the parent
Comprehensive income attributable to noncontrolling interests-8-(3)Consolidated Statements of Shareholders’ Equity
Previous fiscal year (January 1, 2021, to December 31, 2021)(Thousands of yen)
Shareholders' equity
Common stock
Opening balance

Capital surplus

163,530

835,220

1,597

1,597

Retained earnings

Treasury stock

1,496,027

Total shareholders' equity
2,436,614△58,163

Change during the year
Issuance of new shares (exercise of subscription rights
to shares)
Dividends of surplus;
Net income attributable to owners of parent

3,195△137,912△137,912

338,707

338,707

Purchase of treasury stock
Retirement of treasury stock
Restricted stock awards△291,668△270,080△270,080

291,668-

13,596

13,59627,192

Total changes of items during the period

15,193△276,474

200,794

21,588△38,897

Ending Balance

178,723558,745

1,696,822△36,575

2,397,717

Net changes of items other than shareholders' equity((net))

Other accumulated comprehensive income

Opening balance

Foreign currencytranslation adjustments

Total accumulated othercomprehensive income

11,984

11,984

Stock acquisition right

Total net assets-

2,448,598

Change during the year
Issuance of new shares (exercise of subscription rights
to shares)

3,195

Dividends of surplus;△137,912

Net income attributable to owners of parent

338,707

Purchase of treasury stock△270,080

Retirement of treasury stock-

Restricted stock awards
Net changes of items other than shareholders' equity((net))
Total changes of items during the periodEnding Balance

27,192△2,603△2,603

46,96944,365△2,603△2,603

46,969

5,467

9,380

9,380

46,9692,454,066-9-

Current fiscal year (from January 1, 2022 to December 31, 2022)(Thousands of yen)
Shareholders' equity
Common stock
Opening balance

Capital surplus

178,723558,745

26,80626,806

Retained earnings
1,696,822

Treasury stock

Total shareholders' equity
2,397,717△36,575

Change during the year
Issuance of new shares (exercise of subscription rights
to shares)
Dividends of surplus;
Net income attributable to owners of parent
Restricted stock awards

4,532△8,048

Total changes of items during the period

31,33818,758Ending Balance

210,062

577,50353,613△113,925△113,925

556,722556,722
28,32924,812442,796

28,329521,222

2,139,619△8,2462,918,939

Net changes of items other than shareholders' equity((net))

Other accumulated comprehensive income

Opening balance

Foreign currencytranslation adjustments

Total accumulated othercomprehensive income

9,380

9,380

Stock acquisition right46,969Non-controllingshareholders' equity

Total net assets-

2,454,066

Change during the year
Issuance of new shares (exercise of subscription rights
to shares)

53,613

Dividends of surplus;△113,925

Net income attributable to owners of parent

556,722

Restricted stock awards

24,812

Net changes of items other than shareholders' equity((net))
Total changes of items during the periodEnding Balance△1,027△1,027△12,295

53,99040,666△1,027△1,027△12,295

53,990561,889

8,352

8,352

34,67353,9903,015,956- 10 -

(4)Consolidated Statements of Cash Flows(Thousands of yen)
The previous fiscal year
(January 1, 2021
To December 31, 2021)

The current Account fiscal year
(January 1, 2022
To December 31, 2022)

Net cash provided by operating activities
Income before income taxes and minority interests

514,576

868,006

Depreciation and amortization

36,47847,495

Amotization of deferred charge

-

1,302

Amortization of goodwill-

29,458

Amortization of customer-related assets

-

6,250

Equity in earnings (△) of investments△6,506△8,059Charges for stock compensation

102,189

88,167

Unrealized gains (losses) on available-for-sale securities. (Gain on △)-53,505

Increase (decrease) in accrued bonuses

47,277

211,471

Increase (decrease) in provision for directors' bonuses (decrease in △)△1,0005,050

Increase (decrease) in provision for shareholder benefits (△: decrease)

7,079

6,845

Increase (decrease) in allowance for doubtful accounts (△: decrease)

1,303

6,952

Interest income

△125

△158

Interest expense

1,253

7,429

△109,713

215,932△8,473△13,995△14,741

11,792

Decrease (increase) in notes and accounts receivable-trade (increase in△)
Increase (decrease) in operational investment securities. (△ increased)
Increase (decrease) in notes and accounts payable-trade (decrease in△)
Increase (decrease) in accounts payable-other (decrease in △)△51,600

22,160

Other

4,685

42,018Sub total

522,681

1,601,625

Interest received

125

158

△1,253△8,433△204,740△343,093

316,8131,250,257

Purchases of property, plant and equipment△25,876△87,142

Purchase of intangible assets△4,800△3,133-△238,932

Interest paid
Income taxes paid
Net cash provided by operating activities
Net cash used in investing activities

Additional investments in newly consolidated entities
Disbursement for investment in affiliated company
Payments for lease and guarantee deposits-△2,500△847△148,174

Proceeds from collection of lease and guarantee deposits

-

1,652

Purchase of deferred charges-△8,681△31,524△486,911

Net cash used in investing activities
Net cash used in financing activities
Proceeds from long-term debt-

860,000

Repayments of long-term debt-

△90,284

Purchase of treasury stock△270,080-

Dividends paid

△137,880△113,750-△11,100

Dividends paid to non-controlling interests
Proceeds from exercise of stock options
Net cash used in financing activities
Effect of exchange rate changes on cash and cash equivalents

3,195

1,669

△404,765

646,534

4,593

4,991

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS△114,882

1,414,871

Cash and cash equivalents at beginning of year

1,899,100

1,784,218

Cash and cash equivalents at end of year

1,784,218

3,199,089- 11 -

(5)Notes fo consolidated financial statements(Going Concern)
Not applicable.
(Changes in accounting policies)(Application of Accounting Standard for Revenue Recognition)
The Company adopted the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020, "Revenue Recognition AccountingStandard") from the beginning of the fiscal year under review, and decided to recognize revenue at the amount expected to be received in exchange for thepromised goods or services when control of those goods or services is transferred to customers.
With regard to the application of the Revenue Recognition Accounting Standard, the Company follows the transitional treatment stipulated in the proviso inparagraph 84 of the Revenue Recognition Accounting Standard. The cumulative effect of retroactively applying the new accounting policy prior to the beginning of
the current fiscal year is to be adjusted to include retained earnings at the beginning of the current fiscal year, and the new accounting policy is to be applied fromthe beginning of the current fiscal year. However, there is no cumulative effect that should be added to or deducted from retained earnings at the beginning of thecurrent fiscal year.
In addition, there is no impact on profit and loss for the current fiscal year.
Due to the adoption of the Revenue Recognition Accounting Standards, the Company has decided to include "Notes and accounts receivable-trade," which had
been presented as "Current assets" in the Consolidated Balance Sheets for the previous fiscal year, in "Notes and accounts receivable-trade" from the current fiscal
year. In accordance with the transitional treatment stipulated in paragraph 89-2 of the Revenue Recognition Accounting Standard, no reclassifications have been
made for the previous fiscal year using the new presentation method.

(Application of Accounting Standard for Calculation of Market Value)
The Company adopted the "Accounting Standard for Calculation of Market Value" (ASBJ Statement No. 30, July 4, 2019, hereinafter referred to as the "Market
Value Accounting Standard") from the beginning of the fiscal year under review, and adopted the new accounting policy stipulated by the Current Value
Accounting Standard in accordance with the transitional treatment stipulated in Article 19 of the Current Value Accounting Standard and Article 44-2 of the
Financial Instruments Accounting Standard (ASBJ Statement No. 10, July 4, 2019). There is no impact on the consolidated financial statements.
(Additional Information)(Accounting Estimate of the Impact of spread of COVID-19)
The Company has made accounting estimates, such as the recoverability of deferred tax assets based on currently available information, assuming thatcurrent conditions will continue at least during fiscal 2023 for the status of contagious new coronavirus infectious diseases (COVID-19).
As a consequence, we are not aware of any material impact on the valuation of our fiscal estimates; however, the impact of the spread of new-type
coronavirus infectious disease (COVID-19) is highly uncertain and, accordingly, depending on the future course of action, our financial condition and results ofoperations may be affected.

- 12 -

Segment Information
1.The outline of any Reporting Segment
The reportable segments of the Group are components of the Group for which separate financial information is available, and which are subject toperiodic review by the decision-making bodies of the Board of Directors and other bodies in order to determine the allocation of management resources andevaluate business performance.
Our Group consists of segments by business type, and we have two reportable segments: the Consulting and Advisory Business and the Investment
Business.
The Consulting and Advisory business operates a management consulting business, an M&A advisory business, and a revitalization support business. The
Investment Business operates an investment business involving the dispatch of management personnel with the aim of enhancing the long-term andsustainable corporate value of the investee.
2.Matters concerning changes in reportable segments
Until now, our Group's segment has been a single segment. However, in the current fiscal year, we established Frontier Capital Inc. and commenced aninvestment business involving the dispatch of management personnel. Accordingly, we have added the Investment Business as a new reportable segment andchanged it to two segments: the Consulting and Advisory Business and the Investment Business.
The information prepared by the segment information for the previous fiscal year using the classification method for the reportable segments for thecurrent fiscal year is not disclosed because the "Investment Business" was added from the current fiscal year.

3.Methods of calculating net sales, income or loss, assets, liabilities and other items by reportable segment
The method of accounting for reportable business segments is in accordance with the accounting policies used to prepare the consolidated financial
statements.

4.Information on net sales, income or loss, assets, liabilities and other items by reportable segment

Previous fiscal year (January 1, 2021, to December 31, 2021)
Disclosure is omitted because the business segments of our group are single segments.
Current fiscal year (from January 1, 2022 to December 31, 2022)(Unit: thousand yen)
Reportable Segments
Adjusted amount

Carrying value

Consulting Advisory
Business

Investment business

Sales to customers

7,912,655

3,000

7,915,655-

7,915,655

Intersegment sales-

14,603

14,603△14,603-

Total

7,912,655

17,6037,930,258△14,603

7,915,655

Segment profit (loss) (△)

1,099,403△191,272

908,131-

908,1314,800,439

858,204

5,658,644-

5,658,644

Depreciation and amortization

47,495-47,495-47,495

Amortization of goodwill

29,458-29,458-29,458Investments in affiliated companies

54,193-54,193-54,193

473,430-

473,430-

473,430

Segment assets

Total

Other items

Increase in property, plant and equipment,
and intangible assets(NOTE)"Segment income (loss)" is the same as operating income in the consolidated statements of income.

- 13 -

(Per Share Information)
End of previous fiscal year
(January 1, 2021
to December 31, 2021)

End of current fiscal year
(January 1, 2022
to December 31, 2022)

Net assets per share

JPY 215.40.

JPY 255.37.

Net income per share

JPY 29.70.

JPY 48.67.

Diluted net income per share

JPY 29.24.

JPY 47.93.

(NOTE)The basis for calculating net income per share and diluted net income per share is as follows.

End of previous fiscal year
(January 1, 2021
to December 31, 2021)

End of current fiscal year
(January 1, 2022
to December 31, 2022)

338,707556,722--338,707556,722

11,404,286

11,437,677--

177,288

176,925(177,288)(176,925)--

Net income per share
Net income attributable to owners of parent(thousand yen)Amount not attributable to common shareholders
Profit attributable to owners of parent related to common stock(thousand yen)
Average number of shares of common stock outstanding during theperiod (shares)
Diluted net income per share
Adjustment to net income that is available for parent-company
stockholders(thousand yen)
Increase in common stock (shares)(Stock acquisition rights (shares))
Explanation of residual stock not included in calculation of diluted net
income per share due to lack of dilutive potential(Significant subsequent events)(Capital increase by subsidiaries)
At the Board of Directors meeting held on December 27, 2022, Frontier Capital Inc., a consolidated subsidiary, resolved to raise funds through a third-party
allocation of new shares from seven financial institutions, and the payment was completed on January 18, 2023.
(1) Purpose of capital increase
Funds were raised to fund the investment business involving the dispatch of management personnel to be conducted by Frontier Capital Inc.
We believe that the investment business of Frontier Capital Inc. will contribute to enhancing our corporate value by enabling us to achieve growth throughreforming the business model and industry reorganization of investee companies by making direct investments with the aim of enhancing the corporate valueof investee companies over the medium to long term, and by accelerating the expansion of the scale of our group.
In promoting our investment business, in addition to dispatching management personnel from Frontier Capital Inc. to investee companies, we will also provide
consulting services as necessary.
THE BANK OF FUKUOKA, LTD., JAPAN POST BANK Co., Ltd., and The Bank of Yokohama,Ltd. are positioned as anchor investors, and four otherbanks (Saitama Resona Bank, Limited ,Daishi Hokuetsu Bank, Ltd., THE HOKURIKU BANK, LTD., and Sumitomo Mitsui Banking Corporation) also invest
in the business. This will enable us to utilize a combination of the regional relations and finance expertise that each bank maintains, and the consulting, M&A,
management staffing, and revitalization support expertise held by us and Frontier Capital Inc., and further strengthen the promotion of this business. Throughthese initiatives, we will increase the corporate value of our portfolio companies and Frontier Capital Inc.

- 14 -

(2) Consolidated Companies① NameFrontier Capital Inc.

② Address

3-2-1, Roppongi, Minato-ku, Tokyo③ Job Title/Name of Representative

Shoichiro Onishi President, CEO and COO
Masahiro Matsuoka Representative Director④ Description of Businesses

Investment business involving the dispatch of management personnel⑤ Capital before capital increase

500 million yen (500 million yen in capital, 500 million yen in capital reserve)⑥ Date of Incorporation

April 1, 2022

⑦ Fiscal year end

December 31⑧ Our ownership and voting rights before thecapital increase

100% shareholding and 100% voting rights(3) Funding Profile① Number of newly issued shares

26,673 stocks (26,664 Class A shares and 9 Class B shares)② Issue price

100,000 per share③ Amount incorporated into capital

1.333 billion yen (50,000 yen per share)④ Payment date

January 18, 2023
[Class A shares]
THE BANK OF FUKUOKA, LTD., JAPAN POST BANK Co., Ltd., The Bank of Yokohama,Ltd., Saitama⑤ Allottee

Resona Bank, Limited ,Daishi Hokuetsu Bank, Ltd., THE HOKURIKU BANK, LTD., Sumitomo Mitsui
Banking Corporation[Class B shares]
THE BANK OF FUKUOKA, LTD., JAPAN POST BANK Co., Ltd., The Bank of Yokohama,Ltd.

⑥ Capital after capital increase⑦ Number of shares outstanding after the capitalincrease⑧ Our ownership and voting rights ratio after thecapital increase

1.833 billion yen
36,673 shares
27.3% shareholding and 91.0% voting rights[Class A shares]
・Dividends of surplus in cash shall be paid to Class A Shareholders prior to the shareholders, etc. who
hold shares of other classes.
・Distribution of residual assets to allotment shall be made prior to shareholders holding other types ofshares.
・Allottees may not exercise their voting rights at the shareholders' meeting of Frontier Capital Inc.
・Class A Shareholders may request Frontier Capital Inc. to acquire all or part of Class A Shares in⑨ Conditions of certain class of shareexchange for the payment of monies ten years after the day of the first Class A Shares issue.
[Class B shares]
・Dividends of surplus will not be paid to Class B Shareholders, etc.
・In the event that residual assets are further distributed to Class A Shareholders after distribution ofresidual assets to Class A Shareholders, the distribution of residual assets to Class B Shareholders shallbe made prior to Class C Shareholders, etc. and Ordinary Shareholders, etc.
・The allottee has one voting right for each Class B share at the shareholders' meeting of Frontier CapitalInc.

- 15 -