Summary of Financial Statements
for the First Quarter of Fiscal Year Ending December 31, 2021
[Japanese GAAP] (Non-consolidated)
May 13, 2021
Company Name

SymBio Pharmaceuticals Limited

Listing: Tokyo Stock Exchange

Securities Code4582

URL: https://www.symbiopharma.com/

Representative

Representative Director,
President and Chief Executive Officer

Fuminori Yoshida

Contact Person

Corporate Officer and Chief Financial Officer Takaaki Fukushima

Scheduled Date to File Quarterly May 14, 2021
ReportTEL +81-3-5472-1125

Date of Dividend
Payment (plan)

Supplementary materials for the quarterly financial statements:

Yes ・ No

Holding of quarterly earnings performance review:

Yes ・ No—

(Amounts of less than one million yen are rounded down.)
1. Business Results for the first Three Months of FY 2021 (January 1, 2021 to March 31, 2021)(1) Operating Results (cumulative)(Percentages indicate year-on-year changes.)
Net Sales

Operating Profit (Loss)

Ordinary Profit (Loss)

Profit (Loss)

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen

%

1,420
551

157.6
(65.8)

(210)
(961)

—
—

(208)
(991)

—
—

(209)
(992)

—
—

Q1 FY 2021
Q1 FY 2020

Earnings (Loss) per Share Diluted Earnings per Share
Yen

Yen

(5.49)Q1 FY 2021—
(35.84)Q1 FY 2020—
(Note) Diluted earnings per share is not stated above due to recording of a net loss per share, despite the potential dilution of shares.
(2) Financial Position
Total Assets
Q1 FY 2021 (as of March 31, 2021)
FY 2020 (as of December 31, 2020)(Reference) Shareholders’ equity:

Net Assets

Equity Ratio

Millions of yen

Millions of yen

%

5,440
6,274

4,439
4,657

70.7
64.3

Q1 FY 2021 (as of March 31, 2021)
FY 2020 (as of December 31, 2020)

3,844 million yen
4,037 million yen

2. Dividends
Annual Dividend per Share
1st QuarterYen

2nd Quarter
Yen

3rd Quarter
Yen

Fiscal Year End
Yen

FY 2020—
0.00
FY 2021—
FY 2021 (Forecast)
0.00(Note) Revision of dividend forecasts recently announced:

—

0.00

0.00

—
Yes ・ No

0.00

0.00

―1―

Full YearYen

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

Full Year9,151 206.4
1,361(Note) Revision of earnings forecasts recently announced:

Ordinary Profit(Loss)

Earnings (Loss) per
Share

Profit (Loss)% Millions of yen% Millions of yen

%

Yen

—

—

—

30.08

1,350
Yes・ No

1,149

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)(ii) Total number of treasury shares at the endof the period(iii) Average number of shares during theperiod (cumulative)

Q1 FY 2021

38,258,331 shares

FY 2020

38,202,956 shares

Q1 FY 2021

62,968 shares

FY 2020

30,143 shares

Q1 FY 2021

38,183,022 shares

Q1 FY 2020

27,683,335 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) Business results ................................................................................................................................................................................ 2(2) Financial position ............................................................................................................................................................................. 5(3) 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) Notes to quarterly financial statements .......................................................................................................................................... 10(Notes to going concern assumptions) ............................................................................................................................................. 10(In case of significant changes to shareholders’ equity) ................................................................................................................... 10(Accounting policy changes) ........................................................................................................................................................... 10(Changes in statement methods) ...................................................................................................................................................... 10(Significant subsequent events) ....................................................................................................................................................... 11―1―

1. Qualitative Information on Quarterly Financial Results(1) Business results
Progress in the Company’s business for the first three 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. in FY 2020, in December 2020, the company
transitioned TREAKISYM® sales to its own sales organization. The transition to its own salesforce was a key step towardattaining profitability in FY 2021 and achieving sustainable growth thereafter, which are top priorities of the Company.
The Company has assigned medical representatives nationwide and hematology experts in each region of operation in order toestablish a highly productive salesforce capable of addressing local needs. To achieve nationwide distribution, we have entered
distribution agreements with Suzuken Co., Ltd. and Toho Pharmaceutical Co., Ltd. We are also working with S.D. Collabo Co.,
Ltd. to establish two logistics centers — one in Eastern Japan and the other in Western Japan — for nationwide coverage.
On January 12, 2021, the Company commenced sales of TREAKISYM® ready-to-dilute (“TREAKISYM® RTD” or “RTD”)
intravenous formulation. TREAKISYM® RTD was approved for manufacturing and marketing in September 2020.
On March 23, 2021, the Company obtained approval of a partial change to its marketing authorization to allow use of
TREAKISYM® lyophilized formulation in bendamustine-rituximab (BR) therapy and in the polatuzumab vedotin plus
bendamustine-rituximab (Pola+BR) therapy for treatment of recurrent/refractory diffuse large B-cell lymphoma (r/r DLBCL).
The lyophilized powder formulation of TREAKISYM® became available for use in BR therapy upon this approval and it will beavailable for use in Pola+BR therapy after NHI price listing of polatuzumab vedotin.
On April 28, 2021, the Company obtained approval of a partial change to its marketing authorization to allow use of
TREAKISYM® RTD in BR and Pola+BR therapies to treat r/r DLBCL. The Company expects BR therapy and Pola+BR therapy
will become common treatment options.
[Stable product supply]
As noted above, the Company commenced sales of TREAKISYM® RTD on January 12, 2021. The Company currently sells
both RTD and the lyophilized powder formulation of TREAKISYM®.
RTD is imported from Eagle Pharmaceuticals, Inc. (head office: New Jersey, U.S.). TREAKISYM® lyophilized formulation isimported from Astellas Deutschland GmbH, a subsidiary of Astellas Pharma Inc. In the first quarter, the Company conductedsecondary packaging and quality screening on imported batches and currently maintains adequate inventory for stable supply of
product.
The Company is promoting the replacement of TREAKISYM® lyophilized formulation with TREAKISYM® RTD, aiming toachieve 91% replacement by the end of 2021.
[Anticancer agents: SyB L-0501 (lyophilized powder formulation), SyB L-1701 (ready-to-dilute (“RTD”) formulation), SyB
L-1702 (rapid infusion (“RI”) formulation) (generic name: bendamustine hydrochloride or bendamustine hydrochloride hydrate,
trade name: TREAKISYM®)]
SymBio obtained manufacturing and marketing approval for TREAKISYM® for the indications of first-line treatment of lowgrade non-Hodgkin’s lymphoma (low-grade NHL)(Note 1) and mantle cell lymphoma (MCL) in December 2016,
recurrent/refractory low-grade NHL and MCL in October 2010, and chronic lymphocytic leukemia (CLL) in August 2016.
TREAKISYM® is currently used to treat a wide array of malignant lymphoma. Further, BR therapy was first included in the
Guidelines for Tumors of Hematopoietic and Lymphoid Tissues published by the Japanese Society of Hematology in July 2018,
thereby becoming a recommended choice for standard treatment for all previously approved indications. With this development,
TREAKISYM® established a position as a standard treatment for malignant lymphoma.
In July 2018, the Company obtained approval of a partial change to its TREAKISYM® marketing authorization allowing the
product to be used in combination with rituximab and other new anti-CD20 antibodies for the treatment of CD-20 positive
follicular lymphoma (FL), a typical histologic type of low-grade NHL. After this approval, TREAKISYM® is offered to patientsas a new treatment option in combination with Obinutuzumab.(Note 2) In March 2019, the Company obtained approval of afurther partial change to allow the use of TREAKISYM® as a pretreatment agent for tumor-specific T-cell infusion
therapy.(Note 3) This allowed TREAKISYM® to be used as a pretreatment agent for Kymriah® intravenous infusion(Note 4),
the first chimeric antigen receptor T-cell (CAR-T) therapy (Note 5) to be approved in Japan. With the increased use as a―2―

pretreatment agent for regenerative medicine and other pharmaceutical products, TREAKISYM® position as a standard
treatment for malignant lymphoma has further solidified.
In addition to the already-approved indications, SymBio conducted a Phase III clinical trial of BR therapy targeting r/r DLBCL
and, in May 2020, applied for a corresponding partial change to its manufacturing and marketing authorization. The approval was
granted in March 2021. In April 2021, the Company obtained approval of a partial change to its marketing authorization to allow
use of TREAKISYM® RTD in BR and Pola+BR therapies to treat r/r DLBCL. As survival data (e.g., overall survival andprogression-free survival) for the BR therapy is crucial in establishing TREAKISYM® as a DLBCL treatment, the Company also
conducted a follow-up study with overall survival as the primary endpoint. The Company is currently preparing to publish thefollow-up study results. In June 2020, Chugai Pharmaceutical Co., Ltd. (“Chugai”) filed for manufacturing and marketing
approval of polatuzumab vedotin(Note 6) for use in combination with BR therapy targeting r/r DLBCL, and in July 2020, theCompany applied for a partial change to its manufacturing and marketing authorization to allow the use of TREAKISYM® incombination with polatuzumab vedotin and rituximab. The related approvals were granted in March 2021. As a result,
TREAKISYM® will be available for use in Pola+BR therapy as soon as polatuzumab vedotin is NHI price listed. As no effective
treatment for r/r DLBCL currently exists and combination therapies comprising multiple anticancer drugs are being used as
rescue chemotherapy, there is significant medical need for the development of effective and safe drugs and the newly added
indication for TREAKISYM®. BR therapy is already used to treat patients with r/r DLBCL in Europe and the U.S. In Japan,
patient groups and academic organizations have requested that the Ministry of Health, Labour and Welfare, make BR therapy
available as soon as possible. Going forward, the Company expects TREAKISYM® to be widely available as a treatment option
for patients.
In September 2017, SymBio entered an exclusive license agreement with Eagle Pharmaceuticals and obtained the exclusive
right to development and commercialize the ready-to-dilute and rapid infusion (enabling shorter administration time) liquid
formulations in Japan.(Note 7) The Company obtained manufacturing and marketing approval of RTD on September 18, 2020,and launched RTD in January 2021. With respect to the rapid infusion formulation (“RI”), the Company has concluded clinical
trials to confirm safety and has applied approval on May 7, 2021. In comparison with the current lyophilized powder formulation,
TREAKISYM® RTD does not require complex manual reconstitution, which shortens preparation time and brings significant
benefit to healthcare providers. The RI formulation has the further advantage of reducing infusion time to 10 minutes from thecurrent 60 minutes, bringing significant further benefit to both patients and healthcare providers and enabling the Company toprovide substantial added value. As the RTD and RI liquid formulations are patent protected through 2031, the Company is able
to extend the product life of TREAKISYM® 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
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―3―

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 lyophilized (freeze-dried) powder injection. The RTD formulation does not require complex manual
reconstitution, significantly simplifying preparation and reducing preparation time and the associated costs forhealthcare providers. The RI formulation has the further advantage of reducing infusion time to 10 minutes from thecurrent 60 minutes, and will bring significant benefits to both patients and healthcare providers.

[Anticancer agents: SyB L-1101 (intravenous formulation) and SyB C-1101 (oral formulation) (generic name: rigosertib
sodium)]In August 2020, U.S. licensor Onconova Therapeutics, Inc. (head office: Pennsylvania, U.S.) (“Onconova”) announced withrespect to its global Phase III clinical trial (with trial sites in more than 20 countries; INSPIRE study) of the intravenous
formulation of rigosertib for higher-risk myelodysplastic syndromes (HR-MDS) that the primary endpoint — improved survival
compared to physician’s choice of treatment — was not met. The Company is responsible for clinical development in Japan andcontinues to review the findings of the INSPIRE study to determine the future development of rigosertib.
With respect to 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
formulation of rigosertib and azacitidine used in combination were 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.
The Company is conducting joint research with the Institute of Medical Science, the University of Tokyo, to explore thepotential use of TREAKISYM® and rigosertib in combination as well as use of rigosertib in combination with other existing
drugs.
(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 entered an exclusive global licensing agreement with Chimerix Inc. (head office: North
Carolina, U.S.). under which the Company obtained the exclusive worldwide rights to develop, manufacture, and commercialize
the antiviral drug brincidofovir (“BCV”)(Note 9) (SyB V-1901) for all human indications excluding orthopox virus.
The Company is prioritizing global development of the intravenous formulation of BCV for treatment of adenovirus infections
occurring after hematopoietic stem cell transplantation, an area with high unmet medical need as there currently exists noeffective treatment. In March 2021, the Company submitted an Investigational New Drug (IND) application to the U.S. Food andDrug Administration (FDA) to initiate a Phase II clinical trial targeting adenovirus infections primarily in pediatric patients (alsoincluding adult patients). The FDA granted Fast Track designation to the development program.
Based on the efficacy and safety findings from the clinical trials targeting adenovirus infections, the Company plans toinvestigate the efficacy of BCV against a range of dsDNA(Note 10) viral infections and potential expansion of target indications
to include multiple viral infections occurring after hematopoietic stem cell transplantation. The Company will also pursue thepossibility of expanding target indications to viral infections in kidney or other organ transplant recipients. The oral formulationof brincidofovir has demonstrated broad-spectrum antiviral activity in clinical trials conducted in Europe and the U.S. by
Chimerix. Based on the antiviral effect of the oral formulation of brincidofovir (“BCV Oral”) against various dsDNA viruses, the―4―Company expects the intravenous formulation of brincidofovir will prove to be effective and safe in the treatment and preventionof various viral infections occurring after hematopoietic stem cell transplantation.
In December 2020, Chimerix announced that the U.S. FDA accepted its filing of a New Drug Application (NDA) for BCV
Oral as a medical countermeasure for smallpox. The FDA has granted priority review designation, with the review deadline
currently set to July 7, 2021.
(Note 9)

Brincidofovir (BCV) is a lipid conjugate of cidofovir (CDV; an antiviral drug approved and marketed in the U.S. andEurope but not approved in Japan) with hexadecyloxypropyl (HDP), showing a rapid incorporation to the plasma
membrane with efficient cellular uptake due to the lipid conjugate. Once uptaken inside target cells, the lipid chain iscleaved by action of intracellular phospholipases releasing CDV, which is then converted to the active form, CDV
diphosphate. As a result of CDV diphosphate being retained in the cell for an extended period, the antiviral activity of
BCV is dramatically improved compared with CDV. Furthermore, BCV can greatly reduce the risk of nephrotoxicity
associated with CDV because HDP conjugation brings no accumulation of CDV in renal tubular epithelial cellthrough the transporter (OAT-1) and low plasma exposure of CDV.

(Note 10) Double-stranded DNA (dsDNA) viruses include herpesviridae, adenoviridae, polyomaviridae, papillomaviridae,
poxviridae families of viruses, such as CMV, AdV, HHV-6, BK virus, HSV1/2, VZV, HPV, JCV, and smallpox 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
In addition to its focus on global development of the antiviral drug brincidofovir, the Company will continue its initiatives toseek promising new drug candidates for potential in-licensing. Through these efforts, the Company aims to create long-termbusiness value as a profitable biopharmaceutical company with potential for growth.
(iv) Business results
Net sales for the first three months of FY 2021 increased to 1,420,332 thousand yen (+157.6% year on year) due to thetransition of sales of TREAKISYM® from Eisai to the Company’s own sales force. Notwithstanding factors negatively
impacting sales, including postponed treatments and limited in-person sales activity due to COVID-19, and residual inventory of
Eisai in the market, demand for Treakisym® remained strong in the first quarter. In the second quarter, the impact of Eisai’s
residual inventory is expected to be negligible, and sales are expected to increase due to the additional indication of r/r DLBCL
for TREAKISYM®, which was approved on March 23, 2021.
Selling, general and administrative expenses totaled 1,220,506 thousand yen (+12.0% year on year), composed of research anddevelopment expenses of 473,245 thousand yen (+8.0% year on year) – primarily costs associated with clinical trials for the
intravenous formulation of TREAKISYM® and the intravenous formulation of brincidofovir) – and selling, general andadministrative expense of 747,261 thousand yen (+14.7% year on year), which includes higher selling expense due to theCompany’s transition to in-house sales.
As a result, an operating loss of 210,518 thousand yen was recognized in the first three months of FY 2021 (versus an
operating loss of 961,910 thousand yen in the same period of FY 2020). Although the Company recorded non-operating incomeof 14,851 thousand yen, consisting mostly of 14,757 thousand yen in commission income, it also recorded non-operating
expenses of 13,240 thousand yen, primarily comprising foreign exchange losses of 8,687 thousand yen and commission expenses
of 4,110 thousand yen. As a result, ordinary loss totaled 208,907 thousand yen (versus an ordinary loss of 991,220 thousand yen
in the same period of FY 2020) and bottom-line loss in the first three months of the FY 2021 totaled 209,659 thousand yen(versus a loss of 992,170 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) Financial position
Total assets as of March 31, 2021 were 5,440,160 thousand yen, a decrease of 834,546 thousand yen from the previous fiscal
year end. This was primarily due to decreases of 914,960 thousand yen in cash and deposits, 314,761 thousand yen in consumption
taxes receivable, 62,981 thousand yen in semi-finished goods, and 12,770 thousand yen in software, offset by increases of 454,761―5―thousand yen in accounts receivable–trade, 82,640 thousand yen in merchandise and finished goods, and 47,840 thousand yen in
prepaid expenses.
Total liabilities stood at 1,000,214 thousand yen, a decrease of 617,175 thousand yen from the previous fiscal year end, due
mainly to decreases of 451,937 thousand yen in accounts payable-trade, 166,433 thousand yen in accounts payable-other, and36,269 thousand yen in income taxes payable.
Under net assets, increases of 25,549 thousand yen in capital surplus and 25,425 thousand yen in share capital were offset bydecreases of 209,659 thousand yen in retained earnings due to the recording of a bottom-line loss and 24,565 thousand yen in shareacquisition rights. As a result, total net assets decreased to 4,439,946 thousand yen, a decrease of 217,371 thousand yen from theprevious fiscal year end.
The equity ratio consequently rose 6.3 percentage points from the previous fiscal year end to 70.7%.

(3) Earnings forecasts and other forward-looking information
No revision was made to the earnings forecasts for FY 2021 as of the date of this document since the Company is still in theprocess of examining the effects of the approval of TREAKISYM® for the additional indication of r/r DLBCL.

―6―

2. Quarterly Financial Statements and Primary Notes(1) Quarterly balance sheet(Unit: thousands of yen)
FY 2020(as of December 31, 2020)
AssetsCurrent assets
Cash and deposits
Accounts receivable–trade
Merchandise and finished goods
Semi-finished goods
Prepaid expenses
Consumption taxes receivable
Other
Total current assets
Non-current assets
Property, plant and equipment
Buildings, net
Tools, furniture and fixtures, net
Total property, plant and equipment
Intangible assets
Software
Software in progress
Total intangible assets
Investments and other assets
Shares of subsidiaries
Leasehold and guarantee deposits
Total investments and other assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Accounts payable–trade
Accounts payable–other
Income taxes payable
Other
Total current liabilities
Non-current liabilities
Provision for retirement benefits
Total non-current liabilities
Total liabilities―7―

Q1 FY 2021
(as of March 31, 2021)

3,848,626
406,988271,550
672,891
80,645
314,761
219,828
5,815,292

2,933,665
861,749
354,191
609,909
128,485—
114,895
5,002,896

42,73533,96676,701

41,931
31,51773,448296,005
5,836
301,841

283,234—
283,234

080,87180,871
459,415
6,274,707

080,58080,580437,2635,440,160

665,460
645,81381,928222,137
1,615,339

213,523
479,380
45,658259,442
998,004

2,050
2,050
1,617,389

2,210
2,210
1,000,214

(Unit: thousands of yen)
FY 2020(as of December 31, 2020)
Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Share acquisition rights
Total net assets
Total liabilities and net assets

17,044,943
17,019,485(30,009,713)(17,538)
4,037,177
620,140
4,657,318
6,274,707―8―

Q1 FY 2021
(as of March 31, 2021)

17,070,368
17,045,034(30,219,373)(51,659)
3,844,371
595,575
4,439,946
5,440,160

(2) Quarterly statement of income(For the first three months of FY 2021)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit (loss)
Non-operating income
Interest income
Interest on tax refund
Commission income
Other
Total non-operating income
Non-operating expenses
Commission expenses
Share issuance costs
Foreign exchange losses
Other
Total non-operating expenses
Ordinary profit (loss)
Extraordinary income
Gain on reversal of share acquisition rights
Total extraordinary income
Profit (loss) before income taxes
Income taxes–current
Total income taxes
Profit (loss)

Q1 FY 2020
(from January 1, 2020
to March 31, 2020)
551,369
423,669
127,700
1,089,611(961,910)(Unit: thousands of yen)
Q1 FY 2021
(from January 1, 2021
to March 31, 2021)
1,420,332
410,344
1,009,987
1,220,506(210,518)

87
120
—
—
207

25
68
14,7570
14,851—
12,786
15,983
747
29,517(991,220)

4,110
442
8,687
—
13,240(208,907)——(991,220)
950
950(992,170)

198
198(208,709)
950
950(209,659)―9―

(3) 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 three months of FY 2021, the Company issued new shares due to the exercise of some of share acquisition rights
pertaining to the 33rd, 36th, 38th, 40th, 41st and 44th warrants. As a result, share capital and capital surplus each increased by
25,425 thousand yen. The total value of treasury shares increased 34,266 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 145 thousand yen in the total value of treasury shares and an increase of 124 thousand yen in other capital surplus.
As a result, as of March 31, 2021, share capital was 17,070,368 thousand yen, capital surplus 17,045,034 thousand yen, and thetotal value of treasury shares 51,659 thousand yen.
(Accounting policy changes)(Change in inventory valuation methods)
The Company has up till FY 2020 used the weighted average method for inventory valuation, but as of Q1 FY 2021, it now uses
the first in, first out (FIFO) method for merchandise and finished goods and the weighted average method for semi-finished goods.
Occasioned by the transition to its own sales force, the Company studied the adoption of new definitions and valuation methods forinventories to enable more detailed ascertainment 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 restated as 672,891 thousand in “semi-finished goods” and 271,550 thousand in “merchandise and finishedgoods.”―10―

(Significant subsequent events)
1. Issuance of the 54th warrant (stock options)On April 23, 2021, the Company issued and granted share acquisition rights in the form of stock options to five directors as
indicated below. This issuance of share acquisition rights was based on a resolution by the Board of Directors on March 24, 2021.
Number of share acquisition rights

1,630 units

Class and number of shares to be issued upon the exercise ofshare acquisition rights

40,750 shares of common stock

Issue price of share acquisition rights and total issue amountIssue price: 29,225 yen
Total issue amount: 47,636,750 yen

Amount to be paid in for share acquisition rights

Amount to be paid in per share: 1,169 yen
Individuals who receive share acquisition rights shall offset
the amount to be paid in for the relevant share acquisitionrights against cash compensation equivalent to the amount.

Exercise price of share acquisition rights

Exercise price per share: 1 yen

Exercise period of share acquisition rights

From March 25, 2024 to March 24, 2031

Conditions for the exercise of share acquisition rights(1) Individuals to whom these share acquisition rights are
granted must hold a position as a director or employeewith the Company or with an affiliate to exercise theserights. However, this will not apply to directors at theCompany or its affiliates who have left their positions
due to expiry of their terms of offices, employees at theCompany or its affiliates who have retired as a result ofreaching retirement age or directors or employees at theCompany or its affiliates who have been deemed to haveleft their positions or retired amicably by the Board of
Directors.
(2) Other conditions will be as established in the Share
Acquisition Rights Allocation Agreement concluded
between the Company and the directors.

Increase in share capital in case of the issuance of sharesthrough the exercise of share acquisition rights

Increases in share capital related to the issuance of sharesthrough the exercise of share acquisition rights shall be equal
to one half of the maximum amount by which share capitalcan be increased as calculated in accordance with Article 17of the Ordinance on Company Accounting. Any fraction lessthan one yen arising therefrom shall be rounded up to thenearest one yen.

Matters regarding transfer of share acquisition rights

Transfers will require approval from the Board of Directors.

―11―

2. Issuance of the 55th warrant (stock options)On April 23, 2021, the Company issued and granted share acquisition rights in the form of stock options to 134 employees as
indicated below. This issuance of share acquisition rights was based on a resolution by the Board of Directors on March 26, 2021.
Number of share acquisition rights

4,565 units

Class and number of shares to be issued upon the exercise ofshare acquisition rights

114,125 shares of common stock

Issue price of share acquisition rights and total issue amountIssue price: 29,225 yen
Total issue amount: 133,412,125 yen

Amount to be paid in for share acquisition rights

Amount to be paid in per share: 1,169 yen
Individuals who receive share acquisition rights shall offset
the amount to be paid in for the relevant share acquisitionrights against cash compensation equivalent to the amount.

Exercise price of share acquisition rights

Exercise price per share: 1 yen

Exercise period of share acquisition rights

From March 25, 2024 to March 24, 2031

Conditions for the exercise of share acquisition rights(1) Individuals to whom these share acquisition rights are
granted must hold a position as a director or employeewith the Company or with an affiliate to exercise theserights. However, this will not apply to directors at theCompany or its affiliates who have left their positions
due to expiry of their terms of offices, employees at theCompany or its affiliates who have retired as a result ofreaching retirement age or directors or employees at theCompany or its affiliates who have been deemed to haveleft their positions or retired amicably by the Board of
Directors.
(2) Other conditions will be as established in the Share
Acquisition Rights Allocation Agreement concluded
between the Company and the employees.

Increase in share capital in case of the issuance of sharesthrough the exercise of share acquisition rights

Increases in share capital related to the issue of sharesthrough the exercise of share acquisition rights shall be equal
to one half of the maximum amount by which share capitalcan be increased as calculated in accordance with Article 17of the Ordinance on Company Accounting. Any fraction lessthan one yen arising therefrom shall be rounded up to thenearest one yen.

Matters regarding transfer of share acquisition rights

Transfers will require approval from the Board of Directors.

―12―