July 27, 2023

To whom it may concern

Listed Company Name
Representative
Code Number
Contact Person
TEL:

Drecom Co., Ltd.
President and Representative Director: Yuki Naito
3793
Director: Hideki Goto
+81 (0)50-3101-9977

Notice of Recording of Operating Expenses and Extraordinary Losses at a Consolidated Subsidiary,
Revision of Full-Year Earnings Forecasts, and Revision of Dividend Forecasts
In the first quarter of the fiscal year ending March 31, 2024, we have recorded operating expenses and extraordinary
losses. In consideration of the first quarter results and future outlook, we have revised our full-year consolidated earnings
forecast and dividend forecast for the fiscal year ending March 31, 2024, as follows.

Notice
１. Operating expenses and extraordinary losses of consolidated subsidiaries and their details

On this 27th day of July 2023, studiorex Co., Ltd. (Headquarters: Shinagawa-ku, Tokyo; President: SumitoKasuda) has decided to close the smartphone game application DACHIMEN DENSETSU G, released in thefirst quarter of the current fiscal year due to lower-than-expected sales. In due course, impairment losses
and related costs arising in the future were recorded to assets from the said game application.
Based on the above, in the first quarter of the fiscal year ending March 31, 2024, the Company recorded
20 million yen as operating expenses and 416 million yen as impairment loss on software as anextraordinary loss.

２. Revision of Earnings Forecasts(1) Revision of consolidated earnings forecast for the fiscal year ending March 31, 2024 (April 1, 2023 - March 31, 2024)
OperatingincomeNet sales

Ordinary income

Net income
attributable toowners of theparent

Per share
Net income

Millions of yen

Millions of yen

Millions of yen

Millions of yen

1,100

38.59

Revised forecast (B)11,500500

45000.00

Increase (Decrease) (B-A)-3,500-1,500-1,450-1,100

Increase (Decrease) (%)

-23.3

-75.0

-76.3

-(Reference) Results for theprevious period(Fiscal year ending March31, 2023)

10,800

2,281

2,192

1,159

Previous forecast (A)15,0002,000(2) Reason for revision

1,900

Yen

40.70

For the fiscal year ending March 31, 2024, we aimed to secure long-term stable earnings from titles inoperation in the game business, to achieve sales growth through steady hits of three newly released titles,
and to diversify and layer revenue sources, with the aim of achieving continuous sales growth andbusiness expansion in the future.
However, with sales of new mobile game titles released in the first quarter faring worse than expected,
and sales of some existing operational titles falling below expectations, the Company has decided tochange its future policy and implement countermeasures, such as reviewing the strategy for all mobilegame titles under development, reducing company-wide costs, and revising investment plans.
Looking ahead, we aim to improve the profit-and-loss situation as soon as possible and achieve our full1/2

year forecast through the contribution of new titles to be released in the latter half of the second half ofthe fiscal year.
The details of the revision of the earnings forecast are as follows.
Net sales were revised downward due to lower-than-expected sales of DACHIMEN DENSETSU G, a newtitle by a subsidiary released in the first quarter of the current fiscal year, and in relation to Wizardry
Variants Daphne, a new in-house distributed title under development. The revision was due to thepostponement of the release date of Wizardry Variants Daphne, as a result of additional development anda review of marketing plans. The contribution to net sales from new self-distributed titles, including
DACHIMEN DENSETSU G and Wizardry Variants Daphne, has been revised from 4,929 million yen as
initially projected to 1,784 million yen.
Operating income and ordinary income were revised downward due to a decrease in profit from new inhouse distribution titles and a decrease in profit from some existing titles under operation, despite therevision of advertising expenses from 1,341 million yen to 906 million yen and R&D expenses from 951
million yen to 567 million yen as a result of cost reductions and a review of investment plans. The revision
was due to a decrease in profits expected from new self-distributed titles and a decrease in profits fromsome existing titles under operation.
Net income attributable to owners of the parent company has been revised due to a decrease inoperating income and ordinary income, an extraordinary loss of 416 million yen as described in "1.
Recording and Details of Operating Expenses and Extraordinary Losses at Consolidated Subsidiaries"
above, and a decrease in tax expenses.
(Note) The above forecasts are based on information available as of the date of publication of thisdocument, and actual results may differ from these forecasts due to various factors.
Revision of Dividend Forecast(1) Revision of dividend forecast for the fiscal year ending March 31, 2024
Annual dividend (yen)End of 2nd quarterEnd of periodTotal

Previous Forecast

0.00 yen

5.00 yen

5.00 yen

Revised Forecast

0.00 yenundecided

undecided

0.00 yen

5.00 yen

5.00 yen

Actual results for thecurrent fiscal year
Actual results for theprevious period(Fiscal year endingMarch 31, 2023)(2) Reason for revision

The Company recognizes that returning profits to shareholders is one of its most importantmanagement issues, and decides on the level of profit distribution after careful consideration of trends inoperating results and financial condition, as well as the status and future plans for R&D investments andother activities.
For the fiscal year ending March 31, 2024, as described in "2. Revision of Earnings Forecast," new titles
released in the first quarter of the current fiscal year fell below expectations, and some existing titles
under operation also fell below expectations. As a result, our profit-and-loss situation has worsened, andwe have revised our full-year earnings forecast.
The year-end dividend forecast for the current fiscal year is undecided at this time and will beannounced again after careful consideration of the level of profit distribution based on the progress ofcompany-wide cost reduction and review of investment plans, as well as the trends in businessperformance and financial conditions.

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