3. Earnings Forecasts for FY 2021 (January 1, 2021 to December 31, 2021)(Percentages indicate year-on-year changes.)
Net Sales
Millions of yen

Full Year

9,151

Operating Profit% Millions of yen

206.4

1,361

Ordinary Profit

ProfitEarnings per Share% Millions of yen% Millions of yen

%

Yen

—

—

—

29.99

(Note) Revision of earnings forecasts recently announced:

1,350

1,149

Yes ・ No

Notes:(1) Application of special accounting treatment in preparation of quarterly financial reports: Yes ・ No
(2) Changes in accounting policies, changes in accounting estimates and restatements after error corrections(a) Changes in accounting policies due to revision of accounting standards:
Yes ・ No(b) Changes in accounting policies due to other reasons:Yes ・ No(c) Changes in accounting estimates:

Yes ・ No(d) Restatements after error corrections:

Yes ・ No

(3) Number of issued shares (common stock)(i) Total number of issued shares at the end of
the period (including treasury shares)

1H FY 2021

38,432,981 shares

FY 2020

38,202,956 shares(ii) Total number of treasury shares at the endof the period

1H FY 2021

76,868 shares

FY 2020

30,143 shares(iii) Average number of shares during theperiod (cumulative)

1H FY 2021

38,259,460 shares

1H FY 2020

30,176,512 shares* Summary of the quarterly financial statements is not subject to quarterly reviews by certified public accountants or accounting
corporations.
* Explanation regarding the appropriate use of earnings forecasts and other matters
All forecasts presented in this document, including earnings forecasts, are based on the information currently available to theCompany and assumptions judged to be reasonable. Actual results may differ substantially from these forecasts due to various
factors. Regarding the assumptions on which the Company’s earnings forecasts are based and their usage, please refer to “1.
Qualitative Information on Quarterly Financial Results (3) Explanation of earnings forecasts and other forward-looking
information” on Page 6 of the attachment.

―2―

Index of the attachment
1. Qualitative Information on Quarterly Financial Results ........................................................................................................................ 2(1) Explanation of business results ........................................................................................................................................................ 2(2) Explanation of financial position ..................................................................................................................................................... 6(3) Explanation of earnings forecasts and other forward-looking information ...................................................................................... 6
2. Quarterly Financial Statements and Primary Notes ............................................................................................................................... 7(1) Quarterly balance sheet .................................................................................................................................................................... 7(2) Quarterly statement of income ......................................................................................................................................................... 9(3) Quarterly statement of cash flows .................................................................................................................................................. 10(4) Notes to quarterly financial statements .......................................................................................................................................... 11(Notes to going concern assumptions) ............................................................................................................................................. 11(In case of significant changes to shareholders’ equity) ................................................................................................................... 11(Accounting policy changes) ........................................................................................................................................................... 11(Changes in statement methods) ...................................................................................................................................................... 11(Significant subsequent events) ....................................................................................................................................................... 11―1―

1. Qualitative Information on Quarterly Financial Results(1) Explanation of business results
Progress in the Company’s business for the first six months of the fiscal year under review is as follows.
(i) Domestic business[Transition to the Company’s own salesforce and business expansion]
With the expiration of the business partnership agreement with Eisai Co., Ltd. (“Eisai”) in FY 2020, the Company transitioned
the sale of TREAKISYM® to its own sales organization in December 2020. Attaining profitability in FY 2021 and achieving
sustainable growth are priorities of the Company, and the transition of sales to our own sales organization provides a solid
foundation for our future business development.
To prepare plans tailored to the needs of local communities, and build a more productive sales team, the Company has
assigned medical representatives nationwide and hematology experts in each region of its operation. Given the business
partnership agreement with Eisai has now expired, to achieve nationwide distribution, the Company have signed agreements with
Suzuken Co., Ltd. and Toho Pharmaceutical Co., Ltd. for the distribution of pharmaceutical products, making them theCompany’s exclusive wholesalers. The Company has also begun working with S.D. Collabo Co., Ltd. on building nationwide
logistics and has set up two logistics centers—one in Eastern Japan and the other in Western Japan.
During the first six months of the fiscal year under review, the Company commenced sales of the ready-to-dilute (RTD)
intravenous formulation of TREAKISYM® on January 12, 2021 after obtaining marketing approval in September 2020.
On March 23, 2021, the Company obtained approval for a partial change to the marketing authorization of the freeze-dried(FD) formulation of TREAKISYM®, allowing the product to be used in the bendamustine-rituximab (BR) therapy as well as in
the polatuzumab vedotin plus bendamustine-rituximab (P+BR) therapy to treat recurrent/refractory diffuse large B-cell
lymphoma (r/r DLBCL). Upon receiving the approval, the FD formulation of TREAKISYM® became available for use in BR
therapy. On April 28, 2021, the Company obtained approval for a partial change to the marketing approval of the RTD
formulation of TREAKISYM® for its use in BR therapy and P+BR therapy for the treatment of r/r DLBCL. On May 19, 2021,
polatuzumab vedotin was listed in the NHI drug price list, allowing TREAKISYM® to be used in the P+BR therapy.
[Stable product supply]
The Company commenced sales of the RTD formulation of TREAKISYM® in January 2021, and now sells both RTD liquid
formulation and FD formulation of TREAKISYM®.
The FD formulation of TREAKISYM® is imported from Astellas Deutschland GmbH, a subsidiary of Astellas Pharma Inc.
The Company imports the RTD formulation of TREAKISYM® from Eagle Pharmaceuticals, Inc. (head office: New Jersey, U.S.).
In the first six months of the fiscal year, the Company conducted secondary packaging and quality screening on imported batches
as planned, and currently maintains sufficient inventory to support stable supply of product.
The Company is promoting conversion in the market from FD formulation to RTD formulation, and aims to achieve 91%
conversion by 2021 year-end.
[Anticancer agents: SyB L-0501 (FD formulation), SyB L-1701 (ready-to-dilute (“RTD”) formulation), SyB L-1702 (rapid
infusion (“RI”) injection) (generic name: bendamustine hydrochloride or bendamustine hydrochloride hydrate, trade name:TREAKISYM®)]
SymBio obtained marketing approval for TREAKISYM® for the indication of low-grade non-Hodgkin’s lymphoma (lowgrade NHL) as first-line treatment (Note 1) and mantle cell lymphoma (MCL) in December 2016, and for the indications ofrecurrent/refractory low-grade NHL and MCL in October 2010 and chronic lymphocytic leukemia (CLL) in August 2016.
TREAKISYM® is thus being used to treat a wide array of malignant lymphoma. Further, BR therapy was newly included in the
Guidelines for Tumors of Hematopoietic and Lymphoid Tissues published by the Japanese Society of Hematology in July 2018,
becoming recommended as an option for standard treatment for all previously approved indications. With this development,
TREAKISYM® has established its foothold as a standard treatment for malignant lymphoma.
In July 2018, the Company obtained approval for a partial change to the marketing authorization of TREAKISYM®, allowing
the product to be used in combination with not only rituximab but also other new anti-CD20 antibodies for the treatment of CD20 positive follicular lymphoma (FL), a typical histologic type of low-grade NHL. Having obtained approval for the partialchange, TREAKISYM® is being offered to patients as a new treatment option in combination with obinutuzumab (Note 2). In
March 2019, the Company obtained approval for a partial change to the marketing authorization, allowing the use of
TREAKISYM® as a pretreatment agent for tumor-specific T-cell infusion therapy (Note 3). This allowed TREAKISYM® to be used―2―

as a pretreatment agent for Kymriah® intravenous infusion (Note 4), the first chimeric antigen receptor T-cell (CAR-T) therapy (Note5) to be approved in Japan. Increased use as a pretreatment agent for regenerative medicine and other pharmaceutical products has

further solidified the status of TREAKISYM® as the standard treatment for malignant lymphoma.
Following the already-approved indications, SymBio conducted a Phase III clinical trial of BR therapy targeting r/r DLBCL,
and in May 2020 it applied for a partial change to the marketing authorization to include this additional indication. The approval
was granted in March 2021. In April 2021, the Company obtained approval for a partial change to the marketing approval of the
RTD formulation of TREAKISYM® for its use in BR and P+BR therapies for the treatment of r/r DLBCL. Further, the Company
conducted a follow-up study with overall survival as the primary endpoint, since survival data (e.g., overall survival andprogression-free survival) for the bendamustine®-rituximab combined therapy is crucial in establishing TREAKISYM® as a
DLBCL treatment. The Company is currently preparing to publish the follow-up study results. In June 2020, Chugai
Pharmaceutical Co., Ltd. (“Chugai Pharmaceutical”) filed for marketing approval of polatuzumab vedotin (Note 6) used in
combination with BR therapy targeting r/r DLBCL. Similarly, in July 2020 the Company applied for a partial change to themarketing authorization of TREAKISYM® used in combination with polatuzumab vedotin and rituximab and obtained approvalin March 2021. On May 19, 2021, polatuzumab vedotin was included in the NHI drug price list, allowing TREAKISYM® to be
used in the combination therapy of polatuzumab vedotin and BR therapy (P+BR). Because currently there exists no effective
treatment for r/r DLBCL, the newly added indication for TREAKISYM®, combination therapies comprising multiple anticancer
drugs are being used as rescue chemotherapy, and the development of highly effective and safe drugs is sorely needed. BR
therapy is already being used to treat patients with r/r DLBCL in Europe and the U.S. In Japan, patient organizations and relevant
academic societies have submitted a request to the Ministry of Health, Labour and Welfare, asking to make BR therapy available
as soon as possible. Going forward, the Company expects TREAKISYM® to be widely available as a treatment option for many
patients.
In September 2017, SymBio concluded an exclusive license agreement with Eagle Pharmaceuticals for RTD and RI
formulations (Note 7) of TREAKISYM® in Japan. The RI formulation enables a shortened administration time. The Company
obtained marketing approval for the RTD formulation on September 18, 2020, and launched the product in January 2021. For the
RI injection, the Company concluded clinical trials aimed at confirming the drug’s safety and on May 7, 2021, submitted an
approval application. Unlike the FD formulation, RTD formulation of TREAKISYM® does not require the cumbersome manual
work of dissolving the drug (i.e., drug reconstitution), shortening preparation time and substantially reducing burdens on
healthcare providers. Further, the RI injection significantly reduces the infusion time to 10 minutes, down from the one hourrequired by the currently available FD and RTD formulations. This will greatly reduce burdens on patients and healthcare
providers, enabling the Company to provide substantial added value. Further, with exclusive rights to manufacture these liquid
formulations, which are patent-protected, the Company is able to extend the life of these products until 2031 and further
strengthen the foundation of its business growth.
(Note 1)

Non-Hodgkin’s lymphoma (NHL) refers to malignant lymphoma other than Hodgkin’s lymphoma. Malignant
lymphoma is a cancer of the lymphatic system in which lymphocytes develop malignant growths. The majority ofJapanese malignant lymphoma patients are suffering from NHL.

(Note 2)

Obinutuzumab (Gazyva®, marketed by Chugai Pharmaceutical Co., Ltd.): Like rituximab recommended by treatment
guidelines for non-Hodgkin’s lymphoma in Japan and overseas, obinutuzumab is a glycoengineered type II anti-20
monoclonal antibody that directly binds to CD20 (a protein expressed on B-cells other than stem cells or plasma cells)
on target B-cells to attack and destroy them along with the body’s immune system.

(Note 3)Tumor-specific T-cell infusion therapy is a treatment method in which tumor-specific T-cells (T-cells that specificallyrecognize cancer cells) taken from cancer patients are artificially bestowed with cancer specificity extracorporeally,
amplified and then administered to the patient.

(Note 4)

Kymriah® intravenous infusion (generic name: tisagenlecleucel, marketed by Novartis Pharma K.K.): Kymriah®
intravenous infusion is the first chimeric antigen receptor T-cell (CAR-T) therapy approved within Japan. Novartis
Pharma received manufacturing and marketing approval for Kymriah® for use in the treatment of CD19 positive
recurrent/refractory B-cell acute lymphoblastic leukemia (B-ALL) and CD19 positive DLBCL in March 2019.
Kymriah® intravenous infusion was included in NHI price listings in May 2019.

(Note 5)Chimeric antigen receptor T-cell (CAR-T) therapy is a type of tumor-specific T-cell infusion therapy that introduces
genes that code chimeric antigen receptors (CARs) into T-cells, amplifies these cells and then infuses them. These―3―

chimeric antigen receptors are produced by combining the intracellular domains of T-cell receptors with the antigen
binding sites of antibodies capable of recognizing membrane antigens attached to tumor cells. In clinical trials using
CARs to target CD19 that expresses on B-cells, CD19-targeting CARs were introduced into T-cells that were later
administered to patients with B-cell tumors. These modified cells produced clear clinical effects.
(Note 6)Developed by Roche using Seattle Genetics’ antibody-drug conjugate (ADC) technology, polatuzumab vedotin is a
first-in-class anti-CD79b ADC (targeting CD79b) built by conjugating humanized monoclonal antibody targeting
CD79b to a tubulin polymerization inhibitor. CD79b protein is specifically expressed on the surface of many B-cells,
and is expected to be a promising target in new drug development. Polatuzumab vedotin selectively binds to CD79b
while minimally affecting normal cells, and destroys B-cells with the chemotherapeutic agent it contains.

(Note 7)

Ready-to-dilute (RTD) and rapid infusion (RI) are pre-dissolved liquid formulations that differ from currently
available freeze-dried (FD) formulation. The RTD formulation will significantly reduce the preparation time and labor
cost for healthcare providers, and the RI injection will substantially reduce infusion duration from the current one
hour, providing significant benefit and value to both patients and healthcare providers.

[Anticancer agents: SyB L-1101 (intravenous formulation) and SyB C-1101 (oral formulation) (generic name: rigosertib
sodium)]U.S. licensor Onconova Therapeutics, Inc. (head office: Pennsylvania, U.S.) concluded the global Phase III clinical trials (withtrial sites in more than 20 countries; INSPIRE study) of the intravenous formulation of rigosertib for patients with higher-risk
myelodysplastic syndromes (HR-MDS) who failed to respond to the current standard treatment with hypomethylating agents,
relapsed after treatment under the current standard of care, or were intolerant to hypomethylating agents; the primary endpoint of
the study was overall survival. In August 2020, Onconova announced that the primary endpoint—improved survival compared tophysician’s choice of treatment—was not met. The Company is responsible for clinical development in Japan, and is exploring
ways to use the findings from the additional analysis of the INSPIRE study in the future development of rigosertib (intravenous
formulation).
As for the oral formulation of rigosertib, Onconova completed a Phase I/II clinical trial of the investigational drug (incombination with azacitidine (Note 8)) in the U.S. in first-line HR-MDS patients, and the results suggested that the oral formulationof rigosertib used in combination with azacitidine was safe and effective. In June 2017, the Company initiated a Phase I clinical
trial in Japan to confirm the safety and tolerability of high-dose monotherapy and tolerance in Japanese patients, and completed
patient enrollment in June 2019.
With the aim of maximizing the business value of TREAKISYM® and rigosertib, the Company intends to conduct joint
research with the Institute of Medical Science, the University of Tokyo, to investigate the efficacy of the drugs used in
combination as well as used in combination with other existing drugs and look for new indications.
(Note 8)

Azacitidine (Vidaza®, marketed by Nippon Shinyaku Co., Ltd.): This hypomethylating agent (for injection) wasapproved in 2011 upon successful confirmation of extended overall survival for the first time in the Phase III clinical
trial for the indication of MDS, and is currently used as a first-line drug for MDS patients who have difficulties inhematopoietic stem cell transplantation. MDS is a preleukemic state, and decrease in tumor suppressor gene due toexcessive methylation of DNA is thought to be related to the disease. Hypomethylating agents such as azacitidine arethought to suppress progress to leukemia by restoring tumor suppressor gene with a deterrent effect against
methylation of DNA.

[Antiviral drug: SyB V-1901 (generic name: brincidofovir)]
On September 30, 2019, the Company concluded an exclusive global licensing agreement for intravenous and oral formulationof antiviral drug brincidofovir (Note 9) (SyB V-1901; “BCV IV” and “BCV Oral,” respectively) with Chimerix Inc. (head office:North Carolina, U.S.). Under this agreement, the Company acquired exclusive rights for the worldwide development, marketing,and manufacturing of BCV for all human indications, excluding orthopox viruses.
The Company determined to prioritize the global development of BCV IV targeting adenovirus (AdV) infections occurring
after hematopoietic stem cell transplantation, an area with high unmet medical needs as there currently exists no effective
treatment, primarily in Japan, the U.S., and Europe. In March 2021, the Company submitted an Investigational New Drug (IND)
application to the U.S. Food and Drug Administration (FDA) to initiate a Phase II clinical trial targeting AdV infections primarily
in pediatric patients (also including adult patients). In April 2021, the FDA granted the development program a fast-track
designation.

―4―Based on the efficacy and safety findings from clinical trials targeting AdV infections, the Company plans to investigate theefficacy of BCV against a range of dsDNA(Note 10) viral infections and expand target indications to include multiple viral
infections occurring after hematopoietic stem cell transplantation. It also intends to pursue the possibility of expanding target
indications to viral infections after kidney or other organ transplantation. Through these efforts, the Company aims to expand themarket for BCV and maximize its business value. BCV Oral demonstrated highly active antiviral effects in clinical trials
conducted by Chimerix in Europe and the U.S. These trials also confirmed that BCV Oral had broad-spectrum antiviral effects.
Based on these extensive antiviral effects of BCV Oral against various dsDNA viruses, the Company expects BCV IV to be also
effective and safe in the treatment and prevention of various viral infections occurring after hematopoietic stem celltransplantation.
In December 2020, Chimerix announced that the U.S. FDA accepted its New Drug Application (NDA) for BCV Oral as a
medical countermeasure for smallpox. Chimerix subsequently obtained approval on June 4, 2021.
(Note 9)

Brincidofovir is a lipid conjugate of cidofovir (CDV). CDV is an antiviral drug already approved and marketed in the
United States and the European Union, but unapproved in Japan. It is quickly absorbed into the lipid bilayer
membrane and efficiently transferred into cells, and the bound lipid chain is metabolized and separated from thestructure by intracellular phospholipases. This process generates an activator (CDV-PP; CDV diphosphate) that is
retained in the cells for a long period of time, significantly raising the compound’s antiviral activity. Furthermore,
BCV avoids nephrotoxicity, a fundamental issue plaguing CDV, as the lipid conjugation prevents the accumulation of
the compound in renal tubular epithelial cells through organic anion transporter 1 (OAT1) and CDV is released at low
levels in the bloodstream.

(Note 10) Double-stranded DNA (dsDNA) viruses include herpesviridae, adenoviridae, polyomaviridae, papillomaviridae,
poxviridae families of viruses, such as cytomegalovirus (CMV), adenovirus (AdV), human herpesvirus 6 (HHV-6),
herpes simplex virus type 1 or 2 (HSV-1/2), BK virus (BKV), varicella zoster virus (VZV), human papillomavirus(HPV), JC virus, and small pox virus.
(ii) Business outside Japan
SyB L-0501 is also marketed in China and Hong Kong, and sales of SyB L-0501 in these countries were in line with theCompany’s forecasts.
(iii) Licensing of new drug candidates
SymBio plans to focus on the global development of the antiviral drug brincidofovir in-licensed in September 2019. The
Company will continue its ongoing search and evaluation activities seeking new drug candidates for potential in-licensing.
Through these efforts, it aims to create long-term business value as a profitable biopharmaceutical company with growthpotential.
(iv) Business results
Net sales for the first six months of FY 2021 increased to 3,146,608 thousand yen (+131.3% year on year), as the transition to
in-house sales led to sharp growth. However, sales growth was limited due to the residual inventories of TREAKISYM® FD
formulation in the market sold by Eisai before the transition to in-house sales in December 2020. Another factor contributing to
subdued sales growth was the impact of the resurgence of COVID-19 cases since the end of 2020, which resulted in postponed
treatments or changes of regimen, as well as constricted sales activities due to tighter restrictions on visitations to facilities.
However, from the third quarter of FY 2021, the Company expects sales of TREAKISYM® for r/r DLBCL to increase due to thefollowing factors: gradual resumption of treatments which had thus far been postponed due to COVID-19 vaccination of theelderly patients; approval of BR and P-BR therapies for the additional indication of r/r DLBCL granted on March 23, 2021; andinclusion of Chugai Pharmaceutical’s polatuzumab vedotin in the NHI drug price list on May 19, 2021.
Selling, general and administrative expenses totaled 2,469,708 thousand yen (+13.8% year on year), including research anddevelopment expenses of 912,268 thousand yen (+9.4% year on year) primarily due to expenses associated with clinical trials forthe intravenous formulation of TREAKISYM® and the intravenous formulation of brincidofovir, as well as other selling, generaland administrative expenses of 1,557,439 thousand yen (+16.6% year on year), including higher selling expenses due to thetransition to in-house sales.
As a result, an operating loss of 194,941 thousand yen was recognized in the first six months of FY 2021 (versus an operating
loss of 1,839,942 thousand yen in the same period of FY 2020). Although the Company recorded non-operating income of 14,858―5―thousand yen, consisting mostly of 14,757 thousand yen in commission income, it also recorded non-operating expenses of
23,774 thousand yen, primarily comprising foreign exchange losses of 17,991 thousand yen and commission expenses of 4,487
thousand yen. As a result, ordinary loss totaled 203,858 thousand yen (versus an ordinary loss of 1,883,076 thousand yen in thesame period of FY 2020) and bottom-line loss in the first six months of the FY 2021 totaled 205,560 thousand yen (versus a lossof 1,884,976 thousand yen in the same period of FY 2020).
Segment information has been omitted since the Company operates within a single segment, which includes the research anddevelopment, manufacturing, and marketing of pharmaceutical drugs and other related activities.

(2) Explanation of financial position
Total assets as of June 30, 2021 stood at 5,493,642 thousand yen, a decrease of 781,064 thousand yen from the previous fiscal
year end. This was primarily due to decreases of 1,521,796 thousand yen in cash and deposits, 314,761 thousand yen in
consumption taxes receivable, and 26,030 thousand yen in software, offsetting increases of 653,113 thousand yen in accounts
receivable–trade, 259,927 thousand yen in merchandise and finished goods, 101,116 thousand yen in prepaid expenses, and 92,658
thousand yen in semi-finished goods.
Total liabilities stood at 1,042,581 thousand yen, a decrease of 574,807 thousand yen from the previous fiscal year end, due
mainly to decreases in accounts payable–trade by 528,282 thousand yen and accounts payable–other by 154,305 thousand yen,offsetting increases of 128,029 thousand yen in accrued consumption taxes and 9,725 thousand yen in income taxes payable.
Total net assets stood at 4,451,060 thousand yen, a decrease 206,257 thousand yen from the previous fiscal year end. This was
mainly owed to decreases of 205,560 thousand yen in retained earnings due to the recording of a bottom-line loss and 145,552
thousand yen in share acquisition rights, which offset increases of 102,113 thousand yen in capital surplus and 101,889 thousand
yen in share capital.
The equity ratio consequently rose 8.0% from the previous fiscal year end to 72.4%.

(3) Explanation of earnings forecasts and other forward-looking information
In the first six month of FY 2021, the Company recorded an operating loss of 194,941 thousand yen, an ordinary loss of 203,858
thousand yen, and a bottom-line loss of 205,560 thousand yen. However, in the second quarter (three months) alone, the Company
achieved profitability with operating profit of 15,577 thousand yen, ordinary profit of 5,049 thousand yen, and bottom-line profitof 4,099 thousand yen. With the approval of TREAKISYM® for the additional indication of r/r DLBCL and the inclusion ofpolatuzumab vedotin in the NHI drug price list from the third quarter onward, the probability of the Company achieving
profitability at all profit categories for FY 2021 has further increased. However, that no change had been made to the full-year
forecast as of the date of this document.

―6―(4) Notes to quarterly financial statements(Notes to going concern assumptions)None to be reported.
(In case of significant changes to shareholders’ equity)
In the first six months of FY 2021, the Company issued new shares due to the exercise of some of share acquisition rights
pertaining to the 32nd, 33rd, 35th,36th, 37th, 38th, 40th, 41st, 43rd, and 44th warrants. As a result, share capital increased by
101,889 thousand yen and capital surplus increased by 101,890 thousand yen. The total value of treasury shares increased 59,337
thousand yen as a result of share repurchases.
The disposal of treasury shares in response to the request to sell shares by shareholders of less-than-one unit of shares led to adecrease of 189 thousand yen in the total value of treasury shares and an increase of 224 thousand yen in other capital surplus.
As a result, as of June 30, 2021, share capital was 17,146,833 thousand yen, capital surplus 17,121,599 thousand yen, and thetotal value of treasury shares 76,686 thousand yen.
(Accounting policy changes)(Change in inventory valuation methods)
The Company has up till now used the weighted average method for inventory valuation. However, as of Q1 FY 2021, theCompany has changed to the first in, first out (FIFO) method for merchandise and finished goods and the weighted averagemethod for semi-finished goods. Occasioned by the transition to its own sales force, the Company studied the adoption of new
definitions and valuation methods for inventories to enable more detailed tracking of inventory movement, and more accurate
inventory valuation and periodic profit calculation.
As a result, the Company determined that the use of the FIFO method for merchandise and finished goods and the weighted
average method for semi-finished goods to achieve greater consistency with inventory movement would be a rational choice interms of inventory valuation and periodic profit calculation and that it would more appropriately reflect the state of the Company’sbusiness administration.
Because this change has only a miniscule effect on monetary figures, the Company has not restated historical financial
statements.
(Changes in statement methods)(Balance sheets)
Occasioned by the transition to its own sales force, the Company revised its definitions of merchandise and finished goods andsemi-finished goods to enable more detailed ascertainment of inventory movement, and more accurate inventory valuation andperiodic profit calculation.
As a result, 944,442 thousand yen stated for the “merchandise and finished goods” under current assets in the previous year end
balance sheet has been revised as 672,891 thousand yen in “semi-finished goods” and 271,550 thousand yen in “merchandise andfinished goods.”(Significant subsequent events)
None to be reported.

―11―