August 24, 2021
Company name: HOPE, INC.
Representative:
Takayasu Tokitsu, CEO(Stock code: 6195 TSE-Mothers/FSE Q-Board)
Contact:
Kensuke Ohshima, CFO
Tel: +81-(0)92-716-1404(Numerical and Other Corrections) Announcement of Corrections toConsolidated Financial Results for the Fiscal Year Ended June 30, 2021
HOPE, INC. has made the corrections to the Consolidated Financial Results for the Fiscal Year Ended June 30,
2021 that was announced on August 11, 2021.
1. Details and reasons for corrections(1) Deferred tax assets
In relation to the recoverability of deferred tax assets, considering the scale of our energy business (in terms of the
expected purchase volume), the price volatility on the JEPX, as assessed in the course of the settlement of theaccounts, has had a significant and uncertain impact on the cost of sales of this business. Moreover, the mediumterm management plan [HOPE NEXT 3] announced on August 11, 2020 needs to be reformulated in light of thecurrent situation facing the company. Consequently, the deferred tax assets (15,334 thousand yen) carried on the
year-end balance sheet for the fiscal year ended June 30, 2020, have been fully reversed in strict compliance with
the Guidance on Recoverability of Deferred Tax Assets (ABSJ Guidance No. 26). No deferred tax assets will berecorded for the year ending June 30, 2021 (balance: 0 yen). Accordingly income taxes-deferred has been corrected
to 15,334 thousand yen (before correction: minus 2,127 thousand yen, difference: 17,462 thousand yen).
This change will have no impact on the consolidated earnings forecast for the fiscal year ending June 30, 2022.
(2) Energy business sales and cost of sales (imbalance fees for June 2021)
HOPE revised segment sales and cost of sales (imbalance fees) for June 2021 (partly based on estimates) following
the company’s decision that the data should more appropriately represent the company’s management conditions.
After the final figures are determined, sales were revised to 34,615,567 thousand yen (before correction: 34,617,405
thousand yen, difference: minus 1,837 thousand yen) and the cost of sales was received to 40,457,415 thousandyen (before correction: 40,460,891 thousand yen, difference: minus 3,475 thousand yen) after receiving
preliminary data on imbalance fees from every electricity distribution company involved.
2. Corrections
Sections that have been corrected are underlined. Only the complete documents after corrections are provided dueto the large number of corrections.

Consolidated Financial Results for the Fiscal Year Ended June 30, 2021
[Japanese GAAP]
August 11, 2021

Company name: HOPE, INC.
Stock code:
6195
Representative: Takayasu Tokitsu, CEOContact:
Kensuke Ohshima, CFO
Scheduled date of Annual General Meeting of Shareholders:
Scheduled date of filing of Annual Securities Report:
Scheduled date of payment of dividend:
Preparation of supplementary materials for financial results:
Holding of financial results meeting:

Listing: TSE-Mothers/FSE Q-Board
URL: https://www.zaigenkakuho.com/
Tel: +81-(0)92-716-1404
September 28, 2021
September 29, 2021
Yes
Yes (for institutional investors and analysts)(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the Fiscal Year Ended June 30, 2021 (July 1, 2020 to June 30, 2021)(1) Consolidated results of operations(Percentages represent year-on-year changes)
Net sales

Operating profit

Profit attributable toowners of parent

Ordinary profit

Millions of yen%

Millions of yen

Fiscal year ended Jun. 30, 2021
34,615
Fiscal year ended Jun. 30, 2020
Note: Comprehensive income (millions of yen)-

(6,895)(6,935)
Fiscal year ended Jun. 30, 2021: (6,976) (-%)
Fiscal year ended Jun. 30, 2020:- (-%)Net income per
share

%

Millions of yen%

Millions of yen(6,978)-%-

Diluted net
Ordinary profit to Operating profit to
Return on equity
income per sharetotal assets
net sales

Yen

Yen

%

%

%

Fiscal year ended Jun. 30, 2021
(1,109.09)
Fiscal year ended Jun. 30, 2020
Reference: Equity in earnings of affiliates (millions of yen)

(63.3)(19.9)
Fiscal year ended Jun. 30, 2021: Fiscal year ended Jun. 30, 2020: Notes: 1. Diluted net income per share is not presented because net loss was posted although there were outstanding dilutive shares.
2. Year-on-year changes for the fiscal years ended June 30, 2021 and 2020 and figures for the fiscal year ended June 30,
2020 are not presented because HOPE started preparing consolidated financial statements from the fiscal year ended June30, 2021. In addition, the return on equity and ordinary profit to total assets were calculated based on the shareholders’equity and total assets at the end of the fiscal year, respectively, since this is the first fiscal year the consolidated financial
statements were prepared.

(2) Consolidated financial position
Total assets

Net assets

Millions of yen

Equity ratio

Millions of yen

Net assets per share%

Yen

As of Jun. 30, 2021
10,964(2,498)(23.1)(326.50)
As of Jun. 30, 2020
Reference: Shareholders’ equity (millions of yen)
As of Jun. 30, 2021: (2,530)
As of Jun. 30, 2020: Note: Figures as of June 30, 2020 are not presented because HOPE started preparing consolidated financial statements from thefiscal year ended June 30, 2021.

(3) Consolidated cash flows
Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash equivalents at
end of period

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Fiscal year ended Jun. 30, 2021
(2,847)
4
3,475
1,921
Fiscal year ended Jun. 30, 2020
Note: Figures for the fiscal year ended June 30, 2020 are not presented because HOPE started preparing consolidated statement ofcash flows from the fiscal year ended June 30, 2021.

2. Dividends
Dividend per share
1Q-end2Q-endYen

Yen

3Q-end Year-end
Yen

Yen

Total

Total
dividends

Yen Millions of yen

Dividend
Dividends on
payout ratio
equity(consolidated) (consolidated)%%

Fiscal year ended Jun. 30, 2020
0.00
15.00
15.00
89
Fiscal year ended Jun. 30, 2021
0.00
0.00
0.00
Fiscal year ending Jun. 30, 2022
(forecasts)
Notes: 1. The year-end dividend for the fiscal year ended June 30, 2020 is a commemorative dividend of 15.00 yen. The
consolidated dividend payout ratio and consolidated dividends on equity for the fiscal year ended June 30, 2020 are notpresented because HOPE started preparing consolidated financial statements from the fiscal year ended June 30, 2021.
2. The dividend forecast for the fiscal year ending June 30, 2022 is to be determined.

3. Consolidated Earnings Forecast for the Fiscal Year Ending June 30, 2022 (July 1, 2021 to June 30, 2022)
Net salesFirst half
Full year(Percentages represent year-on-year changes)
Profit attributable to
Net income
Ordinary profit
owners of parent
per share

Operating profit

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

Yen

22,12634,850

57.5
0.7

(46)
479

-

(82)
424

-

(95)
398

-

(9.72)
32.18* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes inscope of consolidation): Yes
Newly added: 1 (HOPE ENERGY, INC.)
Excluded: (2) Changes in accounting policies and accounting estimates, and restatements
1) Changes in accounting policies due to revisions in accounting standards, others: None
2) Changes in accounting policies other than 1) above: None
3) Changes in accounting estimates: None
4) Restatements: None

(3) Number of shares outstanding (common shares)
1) Number of outstanding shares as of the end of the period (including treasury shares)

As of Jun. 30, 2021:

7,775,100 shares

As of Jun. 30, 2020:

6,002,800 shares

As of Jun. 30, 2020:

24,960 shares

2) Number of treasury shares as of the end of the period

As of Jun. 30, 2021:

24,981 shares

3) Average number of outstanding shares during the period
Fiscal year ended Jun. 30, 2021:

6,292,514 sharesFiscal year ended Jun. 30, 2020:

5,637,136 shares

Note: HOPE conducted a 4-for-1 common stock split effective on January 1, 2020. The number of outstanding shares as of theend of the period, the number of treasury shares as of the end of the period and the average number of outstanding shares
during the period have been calculated as if this stock split had taken place at the beginning of the previous fiscal year.

(Reference) Overview of Non-consolidated Financial Results
Non-consolidated Financial Results for the Fiscal Year Ended June 30, 2021 (July 1, 2020 to June 30, 2021)(1) Non-consolidated results of operations(Percentages represent year-on-year changes)
Net sales

Operating profit

Millions of yen

Fiscal year ended Jun. 30, 2021
Fiscal year ended Jun. 30, 2020

34,615
14,407% Millions of yen

140.3
273.0

(6,892)
1,020

Net income per
share

Diluted net
income per share

Yen

Yen

Ordinary profit%

Millions of yen-(6,924)
1,012

Profit% Millions of yen

961.9(6,967)
665

%

779.9

Fiscal year ended Jun. 30, 2021
(1,107.25)
Fiscal year ended Jun. 30, 2020
117.97109.33
Note: Diluted net income per share is not presented because net loss was posted although there were outstanding dilutive shares in
the fiscal year ended June 30, 2021.

(2) Consolidated financial position
Total assets
Millions of yen

Net assets
Millions of yen

Equity ratio

Net assets per share%

Yen

As of Jun. 30, 2021
10,975(2,486)(22.9)(325.01)
As of Jun. 30, 2020
6,519
1,259
19.1
208.57
Reference: Shareholders’ equity (millions of yen)
As of Jun. 30, 2021: (2,518)
As of Jun. 30, 2020: 1,246
Note: HOPE conducted a 4-for-1 common stock split effective on January 1, 2020. Net assets per share have been calculated as if
this stock split had taken place at the beginning of the previous fiscal year.
* The current financial results are not subject to the audit by certified public accountants or auditing firms..
* Explanation of appropriate use of earnings forecasts, and other special items- Forecasts of future performance in these materials are based on assumptions judged to be valid and information available tothe management of HOPE at the time these materials were prepared. Actual results of operations may differ from forecasts
due to uncertainty involving these judgments and assumptions or to changes in business operations and market conditions.
HOPE does not guarantee the certainty of any forward-looking statements.

HOPE, INC. (6195) Consolidated Financial Results for FY6/21

Contents of Attachments
1. Overview of Results of Operations

2(1) Results of Operations

2(2) Financial Position

5(3) Cash Flows

5(4) Outlook

5

2. Basic Approach to the Selection of Accounting Standards

6

3. Consolidated Financial Statements and Notes

7(1) Consolidated Balance Sheet

7(2) Consolidated Statements of Income and Comprehensive Income

9

Consolidated Statement of Income

9

Consolidated Statement of Comprehensive Income

10(3) Consolidated Statement of Changes in Equity

11(4) Consolidated Statement of Cash Flows

12(5) Notes to Consolidated Financial Statements

14

Going Concern Assumption

14

Segment and Other Information

15

Additional Information

16

Per-share Information

17

Material Subsequent Events

18

1

HOPE, INC. (6195) Consolidated Financial Results for FY6/21

1. Overview of Results of Operations(1) Results of Operations
The COVID-19 pandemic continued to severely restrict economic activity in Japan and other countries in thefiscal year ended June 30, 2021 and the outlook for the Japanese economy remains unclear.
All business activities are based on the HOPE corporate philosophy of “providing new forms of value to citizens
through local governments and aiming for more growth of our business and our people.” Since HOPE’s
establishment, cumulative additional local government revenue generated by the advertising business is about
8,440 million yen as of the end of June 2021 and the energy business has reduced expenses of local governments
by about 32,500 million yen (estimate of saving during the entire length of all contracts received since the energy
business started). These savings have made a significant contribution to local governments throughout Japan aswell as the residents of these communities.
On August 11, 2020, HOPE announced HOPE NEXT 3, a three-year medium-term management plan beginning in
the fiscal year that ended in June 2021. To accomplish the goals of this plan, many business activities with theaim of medium-term growth are under way. Between the middle of December 2020 and late January 2021, theprice of electricity on the Japan Electric Power Exchange (JEPX) was very high. This big increase in the cost ofelectricity had an enormous negative impact on the performance of the energy business, which is HOPE’s largest
business segment. A number of organizations made announcements concerning the probable causes of this sharp
increase in the price of electricity. According to the Ministry of Economy, Trade and Industry, the primary causes
are a big increase in demand for electricity due to several cold waves and limitations on the output of liquefied
natural gas (LNG) power plants due to a decline in the inventory of LNG, which was partially the result of
problems involving gas liquefaction plants. According to a Comprehensive Renewable Energy Regulations
Inspection Task Force, the problem began with restrictions of an unusually magnitude and length on LNG andpetroleum, which account for a large share of electricity generated in Japan. This situation created a big gap at
JEPX between the volume of bids to buy and sell electricity, resulting in an unprecedented surge in the price ofelectricity.
Reference: “Interim Report on Examination of Tight Supply and Demand Balance of Electricity and the Price
Surge in the Wholesale Electricity Market during Fiscal 2020 Winter” page 3
The 36th Electricity and Gas Basic Policy Subcommittee, Electricity and Gas Industry Committee,
the Advisory Committee for Natural Resources and Energy (June 15, 2021)
Agency for Natural Resources and Energy, the Ministry of Economy, Trade and Industry
https://www.meti.go.jp/shingikai/enecho/denryoku_gas/denryoku_gas/pdf/036_04_03.pdf
Reference: “Recommendations for Power System Restructuring” page 4 (April 27, 2021)
The 8th Comprehensive Renewable Energy Regulations Inspection Task Force, Cabinet Officehttps://www8.cao.go.jp/kisei-kaikaku/kisei/conference/energy/20210427/210427energy07.pdf
The high cost of wholesale electricity significantly raised the cost of electricity purchased by HOPE. As a result,January 2021 imbalance fees (see note) were about 6,500 million yen, including taxes. Due to the loss in the
fourth quarter (April to June 2021) of the current fiscal year, we used a third-party allotment of stock and othermeasures to procure funds. These activities were announced in a press release titled “Notice of Sale of Stock
Through a Third-party Allotment, and Issuance of Ninth Share Acquisition Rights with Exercise Price Adjustment
Clause and Unsecured Bonds (Japanese version only).” In addition, energy business earnings were expected torecover in the spring, which is normally a profitable season of the year for this business. However, the cost ofelectricity on the JEPX remained high in the fourth quarter and the energy business was still unable to produce
the level of earnings that we had anticipated.
HOPE has several core strengths. One is the expertise to reproduce new businesses in a broad range of fields
based on a large number of relationships with local governments established over many years of business
operations and legal frameworks consisting of new and amended laws and regulations. Another is the expertise toeasily reproduce business expansion in the local government business domain. Our objective is to use these twostrengths for growth of the three existing businesses and creation of new businesses. Making advertising a
profit-generating business is one goal. We are continuing to improve profitability by making changes to achieve
the proper size of this business and working on reducing over the next several years the high percentage of fiscal

2

HOPE, INC. (6195) Consolidated Financial Results for FY6/21

year earnings of this business in the fourth quarter. These steps are aimed at making this business more cost
efficient and receiving higher rates for advertising services. In the energy business, which we position as a driverof growth, our goals are more growth in the scale of this business and consistent profitability. Our short andmedium-term strategy has two elements. First is to continue existing measures for growth centered on using
competitive bids to capture new contracts. Second is to reduce vulnerability to the price volatility risk concerning
the cost of electricity we purchase. This involves achieving the most suitable combination of fixed-priceprocurement using one-to-one transactions and the purchase of electricity at current market prices on the JEPX.
However, the sharp increase in the price of electricity on the JEPX forced us to alter this strategy. In the Jichitai
Works business (former media business), the market for promotions targeting local governments still has muchpotential for more public-private sector collaboration and measures to become more competitive. Our goal is toposition ourselves at the very top of upstream information flows in order to capitalize on opportunities involving
this potential. This business is upgrading content, strengthening information dissemination capabilities andreinforcing the ability to keep up with the latest information. The objective is firmly establishing the value of the
Jichitai Works brand in order to stimulate more growth of the market for promotions targeting local governments.
In addition, we believe that these activities will make possible even more public-private sector collaboration
based on government information circulation centered on HOPE as well as the use of local government
information databases for strengthening, supporting and creating business activities. We will use many activities
to accomplish these goals. These measures will include upgrading and expanding our content production
capabilities, increasing activities for B-to-G solutions (former B-to-G marketing) and making extensive use of
Jichitai Works HA×SH, which is an internet platform for supporting public-private sector collaboration.
In the fiscal year ended June 30, 2021, net sales were 34,615 million yen. The operating loss was 6,895 million
yen, the ordinary loss was 6,935 million yen, and there was a loss attributable to owners of parent of 6,978
million yen.
Note: An imbalance fee is paid when a company selling electricity is unable to supply the required amount ofelectricity over any 30-minute period and must purchase electricity from a utility to cover the shortfall.
This fee is included in the cost of sales of the energy business.
Business segment performance was as follows.
1) Advertising BusinessIn this business, the Smart Resource service purchases a variety of advertising space from local governments bysubmitting competitive bids and then sells this space to companies. The Smart Creation service jointly produces
with local governments Machilet publications for residents at no cost and sells advertising space in thesepublications to companies. During the current fiscal year, there were measures to achieve the proper size of theMachilet service. Machilet, which is the primary medium of the advertising business, is operating in all areas ofJapan while concentrating on six themes: marriage, raising children, senior nursing care, measures involving
vacant houses, end-of-life messages, and condolence messages.
An advertising business for the Japan Meteorological Agency website is a prime example of the operations of theSmart Resource service in the fourth quarter of the current fiscal year. This business provides its own
advertisement distribution system that was developed jointly with Geniee, Inc. based on a business alliance withthis company. We plan to expand this system to make it possible to offer this advertisement distribution service tolocal governments throughout Japan.
We started providing the Smart FR (“Financial Resources”) Consulting service during the current fiscal year. This
service encompasses consulting for every step from assistance for attracting advertisements to the creation andutilization of media. Our goal is to use this new service to take the advertising business beyond simply providing
assistance for advertisements in order to be a source of a broad range of ideas and support concerning
advertisements to secure financial resources. Smart FR Consulting was launched in June 2021 and we havereceived a consultation contract from the city of Fukuoka.
Segment sales were 1,719 million yen and segment profit was 328 million yen.

3

HOPE, INC. (6195) Consolidated Financial Results for FY6/21

2) Energy BusinessThis business, which uses the Genewat brand for the retail of electricity, has the goal of reducing the expenses of
local governments by providing new forms of value based on the concept of electricity as a generic product. On
October 22, 2020, Hope Energy, Inc. was established as a wholly owned subsidiary of HOPE and started business
operations on April 1, 2021. As was explained earlier, the sharp increase in the cost of purchasing electricity due
to the higher cost of electricity on the JEPX had a significant negative impact on the energy business. After thisspike in the cost of electricity had largely ended, we established measures for the stability of energy businessearnings, stronger governance and other revisions to the framework for operating this business. In the fourth
quarter, which is normally a time when there is a small number of electricity contracts submitted for bids, theenergy business submitted 55 successful bids.
The fourth quarter is usually a period when the energy business can easily be profitable because prices on the
JEPX are normally low. As a result, we expected the earnings of this business to recover in the fourth quarter.
Unfortunately, contrary to our outlook, the price of electricity on the JEPX remained high during the fourth
quarter and earnings were below our forecast.
Segment sales were 32,663 million yen and the segment loss was 6,924 million yen.
3) Media Business
The media business was renamed the Jichitai Works business in July 2021. This business has distributed the
Jichitai Works magazine for three and a half years, steadily raising awareness of this publication among local
government employees. We decided to change the name of this business in order to clearly represent the conceptof this business as a next step. In addition to this magazine, the Jichitai Works brand will be used for a variety ofservices for collaboration between HOPE and local governments. The new concept for the Jichitai Works brand is“invigoration for experiences and people concerning local government jobs.”
One element of the Jichitai Works business is extensive activities for B-to-G solutions aimed at matching theneeds of local governments and companies. These activities leverages our relationships with local governments.
This business also includes the Jichitai Works magazine, which contains ideas, examples of local government
innovations and other useful information for government employees. In June of the fourth quarter, this businessstarted the Jichitai Works Free Name Card service. We started this service in response to the results of a survey
showing that a large number of local government employees pay for making their own name cards. Providing
name cards at no charge provides another channel of communications with local government employees. This is
expected to speed up progress involving our government employee platform concept.
In June 2021, we established a business alliance with CHANGE Inc., which provides assistance for the physician
and pharmacist recruiting service of the M3 Group. This service helps local governments recruit health care
professionals needed to provide COVID-19 vaccinations in areas other than Japan’s major metropolitan areas.
Furthermore, this collaboration utilizes our B-to-G solutions that are backed by our many relationships with local
governments. Since starting this program, we have helped six local governments recruit physicians (as of June 21,2021), mainly in locations with a shortage of health care professionals. These activities are playing a role inraising the percentage of regions other than major cities in Japan that are served by a physician recruiting
network.
Segment sales were 228 million yen and segment profit was 58 million yen.
4) Other businesses
Other businesses include Machiiro, Jichitai Works HA×SH and other services that are not part of the reportablesegments. In prior years, Jichitai Works HA×SH was included in the media business. Beginning with the fiscal
year that ended in June 2021, this activity is included in this category because Jichitai Works HA×SH is still in
the investment phase.
Segment sales were 3 million yen and the segment loss was 47 million yen.

4

HOPE, INC. (6195) Consolidated Financial Results for FY6/21(2) Financial Position
AssetsTotal assets amounted to 10,964 million yen at the end of the current fiscal year. Current assets amounted to
10,396 million yen. Major items are cash and deposits of 1,932 million yen, notes and accounts receivable-tradeof 7,336 million yen, merchandise and finished goods of 427 million yen, and other under current assets of 501
million yen. Non-current assets amounted to 567 million yen. Major items are other under intangible assets of 55
million yen and leasehold and guarantee deposits of 458 million yen.
Liabilities
Liabilities totaled 13,462 million yen. Current liabilities amounted to 12,880 million yen. Major items areaccounts payable-trade of 11,290 million yen, short-term borrowings of 950 million yen, and current portion of
long-term borrowings of 366 million yen. Non-current liabilities amounted to 582 million yen. Major items arebonds payable of 100 million yen and long-term borrowings of 482 million yen.
Net assets
At the end of the current fiscal year, there were negative net assets of 2,498 million yen because of loss
attributable to owners of parent of 6,978 million yen as described above. Shareholders’ equity was negative 2,530
million yen and major items include share capital of 1,959 million yen, capital surplus of 1,913 million yen andretained earnings of negative 6,333 million yen.
(3) Cash flows
Cash and cash equivalents (hereinafter “net cash”) as of the end of the current fiscal year amounted to 1,921
million yen. The cash flow components and the main reasons for changes are as described below.
Cash flows from operating activities
Net cash used in operating activities totaled 2,847 million yen. The main factors include loss before income taxesof 6,935 million yen, an increase of 3,707 million yen in trade receivables, a decrease of 601 million yen in
accrued consumption taxes and income taxes paid of 428 million yen, while there were a decrease of 181 million
yen in sales deposit and an increase of 8,543 million yen in trade payables.
Cash flows from investing activities
Net cash provided by investing activities totaled 4 million yen. This was mainly due to proceeds from sale ofinvestment securities of 25 million yen, while there were purchase of property, plant and equipment of 8 million
yen and purchase of intangible assets of 12 million yen.
Cash flows from financing activities
Net cash provided by financing activities totaled 3,475 million yen. This was mainly due to a net increase of 517
million yen in short-term borrowings, proceeds from long-term borrowings of 200 million yen, proceeds fromissuance of shares of 500 million yen, and proceeds from issuance of shares resulting from exercise of shareacquisition rights of 2,777 million yen, while there were repayments of long-term borrowings of 411 million yen
and dividends paid of 89 million yen.
(4) Outlook
The economic outlook in Japan continues to be uncertain because of the drop in social and economic activities
caused by COVID-19. To ensure the safety of employees and reduce the impact of this crisis on businessactivities, we are using teleworking and rigorous measures to prevent infections at our workplaces. We expect at
this time that there will be no problem concerning the continuity of business operations.
Translating the corporate philosophy into actions and achieving more growth of corporate value will require an
intent focus on our relationships with local governments. We have been using our business activities since our
inception to increase the number of the relationships, which are a key strength of ours. Our objective is the5

HOPE, INC. (6195) Consolidated Financial Results for FY6/21

growth of existing businesses and creation of new businesses in two ways. The first is creating new businesses
that can be easily reproduced in many fields while accurately responding to new and amended laws. The second is
the easy reproduction of business expansion in the local government business domain. Taking these actions willallow us to support local governments as they create a self-reliant and sustainable social framework that utilize
the distinctive strength and characteristics of individual communities. Moreover, we believe these actions will
result in the realization of our corporate philosophy accompanied by the growth of corporate value.
In the fiscal year ending on June 30, 2022, we forecast a 0.7% increase in net sales to 34,850 million yen,operating profit of 479 million yen (operating loss of 6,895 million yen in the current fiscal year), ordinary profitof 424 million yen (ordinary loss of 6,935 million yen in the current fiscal year), and profit attributable to ownersof parent of 398 million yen (loss attributable to owners of parent of 6,978 million yen in the current fiscal year).
Assumptions of the cost of sales in the energy business, which will significantly affect our sales and earnings, areas follows.
These forecasts for the cost of purchasing electricity on the JEPX are weighted averages using expected prices
and the level of purchases in each area of Japan.
Forecast for market
prices(Yen, including tax)

2021

2022

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

9.82

10.69

9.50

8.09

8.30

9.84

11.07

8.39

7.47

7.28

7.65

7.75

The pandemic is still restricting economic activity in Japan. The effects of this crisis on the balance between the
supply and demand for electricity on the JEPX may cause changes in the cost of electricity. This forecast is basedon the premise that the pandemic will have an effect on the electricity prices throughout the fiscal year ending in
June 2022.
In the energy business, in accordance with the renewable energy feed-in tariff system in Japan, fees received from
customers were classified as sales and payments to the cost adjustment organization (same as fees received) wererecognized as cost of sales in prior years. After applying Accounting Standard for Revenue Recognition (ASBJ
Statement No. 29) from the first quarter of the fiscal year ending on June 30, 2022, we will switch from this grossrecognition method to net recognition for using the netting method in paragraph 47 of this accounting standard.
As a result, only the difference between fees received and payments made will be recognized. The application of
the Accounting Standard for Revenue Recognition will have no effect on earnings at all levels. Sales, cost of sales
and gross profit for the three prior fiscal years when using the netting method are as follows.
(Thousands of yen)
Net sales

Cost of sales

Gross profit

FY6/19Amount before adjustment

3,862,460

2,822,717

1,039,742

Change(208,157)(208,157)-

Amount after adjustment

3,654,302

2,614,560

1,039,742

Amount before adjustment

14,407,904

12,146,393

2,261,511

Change(1,937,180)(1,937,180)-

Amount after adjustment

12,470,724

10,209,212

2,261,511

Amount before adjustment

34,615,567

40,457,415(5,841,847)

Change(6,170,786)(6,170,786)-

Amount after adjustment

28,444,781

34,286,629(5,841,847)

FY6/20FY6/21

2. Basic Approach to the Selection of Accounting Standards
All of the operations of HOPE are in Japan and there are no plans to start operations in other countries in the near
future. Consequently, consolidated financial statements are based on accounting standards used in Japan.

6

HOPE, INC. (6195) Consolidated Financial Results for FY6/21

3. Consolidated Financial Statements and Notes(1) Consolidated Balance Sheet(Thousands of yen)
FY6/21(As of Jun. 30, 2021)
AssetsCurrent assets
Cash and deposits

1,932,991

Notes and accounts receivable-trade

7,336,855
427,497

Merchandise and finished goods

1,717Work in process

193

Supplies
Prepaid expenses

14,230

Advance payments to suppliers

185,594

Other

501,928(4,012)

Allowance for doubtful accounts

10,396,997

Total current assets
Non-current assets
Property, plant and equipment

9,895

Buildings(5,903)

Accumulated depreciation

3,992

Buildings, net

1,630

Vehicles(1,191)

Accumulated depreciation

438

Vehicles, net
Tools, furniture and fixtures

35,700

Accumulated depreciation(21,218)

Tools, furniture and fixtures, net

14,481

Total property, plant and equipment

18,912Intangible assets
Software27,958Other

55,922

Total intangible assets

83,881

Investments and other assets
Investment securities

6,447

Distressed receivables

11,864

Leasehold and guarantee deposits

458,279
19

Other
Allowance for doubtful accounts(11,864)

Total investments and other assets

464,745567,539

Total non-current assets

10,964,536

Total assets

7

HOPE, INC. (6195) Consolidated Financial Results for FY6/21(Thousands of yen)
FY6/21(As of Jun. 30, 2021)
Liabilities
Current liabilities
Accounts payable-trade

11,290,446

Short-term borrowings

950,000

Current portion of long-term borrowings

366,952

Accounts payable-otherAccrued expenses
Income taxes payable

30,745
119,088

Advances received

71,367

Deposits received

8,535

42,242666

Other12,880,045

Total current liabilities
Non-current liabilities
Bonds payable

100,000

Long-term borrowings

482,658

Deferred tax liabilities

221
582,879

Total non-current liabilities

13,462,924

Total liabilities
Net assets
Shareholders’ equity

1,959,676

Share capital
Capital surplus

1,913,476

Retained earnings(6,333,191)(70,902)

Treasury shares(2,530,939)

Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Total accumulated other comprehensive income

504
504
32,047

Share acquisition rights(2,498,387)

Total net assets

10,964,536

Total liabilities and net assets

8

HOPE, INC. (6195) Consolidated Financial Results for FY6/21(2) Consolidated Statements of Income and Comprehensive Income
Consolidated Statement of Income(Thousands of yen)
FY6/21(Jul. 1, 2020 – Jun. 30, 2021)
Net sales

34,615,567

Cost of sales

40,457,415

Gross loss

(5,841,847)
1,053,572

Selling, general and administrative expenses(6,895,420)

Operating loss
Non-operating income
Interest income

22

Dividend income

6

Penalty income

3,774

Subsidy income

1,532

Gain on sale of investment securities

16,067642

Other22,045

Total non-operating income
Non-operating expenses
Interest expenses

11,176

Commission expenses

3,530

Loss on sale of investment securities

1,763

Share issuance costs

43,782

Other

1,999

Total non-operating expenses

62,252

Ordinary loss

(6,935,626)

Loss before income taxes(6,935,626)

Income taxes-current

27,989

Income taxes-deferred

15,334

Total income taxes

43,323Loss(6,978,950)

Loss attributable to owners of parent(6,978,950)

9

HOPE, INC. (6195) Consolidated Financial Results for FY6/21

Consolidated Statement of Comprehensive Income(Thousands of yen)
FY6/21(Jul. 1, 2020 – Jun. 30, 2021)(6,978,950)

Loss
Other comprehensive income
Valuation difference on available-for-sale securities

2,388

Total other comprehensive income

2,388(6,976,562)

Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners ofparentComprehensive income attributable tonon-controlling interests(6,976,562)-

10

HOPE, INC. (6195) Consolidated Financial Results for FY6/21(3) Consolidated Statement of Changes in Equity
FY6/21 (Jul. 1, 2020 – Jun. 30, 2021)(Thousands of yen)
Shareholders’ equity
Share capital
Balance at beginning of
periodChanges during period
Issuance of new shares
Issuance of newshares-exercise of shareacquisition rights
Dividends of surplus
Loss attributable to ownersof parent
Purchase of treasury shares
Net changes in items otherthan shareholders’ equity
Total changes during period
Balance at end of period

Totalshareholders’equityCapital surplus Retained earnings Treasury shares

315,149

268,949

250,091

250,091

500,182

1,394,436

1,394,436

2,788,872

735,427(70,827)

1,248,698(89,667)(89,667)(6,978,950)(6,978,950)
(75)

(75)

1,644,527

1,644,527(7,068,618)(75)(3,779,638)

1,959,676

1,913,476(6,333,191)(70,902)(2,530,939)

Accumulated other comprehensive income
Valuation
Total accumulated Share acquisition Total net assets
difference onrightsother comprehensive
available-for-saleincomesecurities
Balance at beginning of
periodChanges during period
Issuance of new shares
Issuance of newshares-exercise of shareacquisition rights
Dividends of surplus
Loss attributable to ownersof parent
Purchase of treasury shares
Net changes in items otherthan shareholders’ equity
Total changes during period
Balance at end of period(1,889)(1,889)13,011

1,259,820

500,1822,788,872(89,667)(6,978,950)
(75)
2,394

2,394

19,035

21,429

2,394

2,394

19,035(3,758,208)

504

504

32,047(2,498,387)

11

HOPE, INC. (6195) Consolidated Financial Results for FY6/21(4) Consolidated Statement of Cash Flows(Thousands of yen)
FY6/21(Jul. 1, 2020 – Jun. 30, 2021)
Cash flows from operating activities(6,935,626)

Loss before income taxes
Depreciation

17,524

Share-based payment expenses

4,406

Increase (decrease) in allowance for doubtful accounts

3,276

Share issuance costs

43,782(28)

Interest and dividend income

11,176

Interest expenses

204

Loss (gain) on valuation of investment securities(3,707,409)

Decrease (increase) in trade receivables
Decrease (increase) in inventories

83,793

Decrease (increase) in advance payments to suppliers

48,222

Decrease(increase) in sales deposit

181,714

Increase (decrease) in trade payables

8,543,004

Increase (decrease) in accrued expenses(69,237)

Increase (decrease) in advances received
Decrease/increase in consumption taxes
receivable/payable
Other, net

9,828(601,057)(43,016)(2,409,442)

Subtotal

29

Interest and dividends received
Interest paid

(12,258)

Income taxes refund (paid)(428,964)
3,315

Other, net(2,847,320)

Net cash provided by (used in) operating activities
Cash flows from investing activities(11,016)

Payments into time deposits

11,015

Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment(8,720)Purchase of intangible assets(12,176)

Purchase of investment securities(282)

Proceeds from sale of investment securities
Proceeds from collection of long-term loans receivablefrom employees
Proceeds from refund of leasehold and guarantee deposits

25,027

Net cash provided by (used in) investing activities

4,057

202
8

12

HOPE, INC. (6195) Consolidated Financial Results for FY6/21(Thousands of yen)
FY6/21(Jul. 1, 2020 – Jun. 30, 2021)
Cash flows from financing activities
Net increase (decrease) in short-term borrowings

517,000

Proceeds from long-term borrowings

200,000

Repayments of long-term borrowings(411,952)

Proceeds from issuance of bonds

600,000(600,000)

Redemption of bonds
Proceeds from issuance of shares

500,182

Payments for issuance of shares(43,782)
25,919Proceeds from issuance of share acquisition rights
Proceeds from issuance of shares resulting from exerciseof share acquisition rights
Purchase of treasury shares

2,777,582

Dividends paid

(89,492)

Net cash provided by (used in) financing activities

3,475,382(75)

Net increase (decrease) in cash and cash equivalents

632,118

Cash and cash equivalents at beginning of period

1,289,856

Cash and cash equivalents at end of period

1,921,974

13

HOPE, INC. (6195) Consolidated Financial Results for FY6/21(5) Notes to Consolidated Financial Statements
Going Concern Assumption
There are reasons for significant doubts concerning the going concern assumption due to consistently negative
cash flows in prior years. In addition, due to a very large increase in the JEPX price of electricity between the
middle of December 2020 and late January 2021, there was a 6,895 million yen operating loss, 6,935 million yen
ordinary loss and 6,978 million yen loss attributable to owners of parent in the current fiscal year. Furthermore,
net assets were negative 2,498 million yen at the end of June 2021.
HOPE, which is a company that prepares consolidated financial statements, is taking the following actions to end
these problems.
1. Stabilize earnings of business operations(1) Management of risk involving volatility of market prices
The HOPE Group has no electricity generation facilities and therefore purchases most of the electricity sold to its
customers by using the JEPX. As a result, this business is vulnerable to changes in the cost of electricity. Many
actions have been taken in order to reduce exposure to this price volatility risk. Major initiatives include
establishing new risk management policies and adjusting the amount of electricity purchased by using the JEPX
and one-to-one transactions for each area and season.
(2) Payment in installments of the January 2021 imbalance fees associated with the insufficient supply ofelectricity
On January 29, 2021, the Ministry of Economy, Trade and Industry announced that companies meeting certain
requirements will be allowed to pay January 2021 imbalance fees in equal installments over a period of up to fivemonths. (On March 19, 2021, the ministry increased the maximum number of these installments from five tonine.) HOPE applied for the use of this installment payment program and, after receiving permission from every
electricity distribution company involved, made the first of nine equal installment payments in April 2021.
2. Stabilize cash flows(1) Financial covenants
HOPE has received the agreement of financial institutions to not exercise the acceleration clause, which would
require the immediate repayment of all applicable debt if HOPE is unable to fulfill the obligations of its debt
covenants.
(2) Procurement of funds
HOPE is maintaining sound relationships with financial institutions, primarily its main banks, and management
believes these institutions will continue to provide assistance. Furthermore, HOPE received proceeds ofapproximately 2 billion yen due to the May 17, 2021 sale of stock through a third-party allotment and the exerciseof the issued Ninth Share Acquisition Rights with an exercise price adjustment clause. We will continue toconsider many methods for procuring funds.
The goal of these actions is the stabilization of the earnings of business operations and of cash flows. However,
we are only at the beginning of these actions. Moreover, there is a limit to the degree to which we can reduce ourvulnerability to the volatility of the price of electricity. Consequently, there are significant uncertainties
concerning the going concern assumption at this time.
The going concern assumption was used as the basis for the consolidated financial statements and thesestatements do not reflect the significant uncertainties concerning this assumption.

14

HOPE, INC. (6195) Consolidated Financial Results for FY6/21

Segment and Other Information
Segment information
1. Overview of reportable segment(1) Method for identifying reportable segments
Segments used for financial reporting are HOPE’s constituent units for which separate financial information isavailable and for which the Board of Directors performs periodic studies for the purposes of determining theallocation of resources and evaluating performance.
There are three reportable segments: advertising, energy, and media, which are based on HOPE’s core advertising,energy, and media businesses.
(2) Information related to changes in reportable segments, etc.
Change in method for measuring profit (loss) of reportable segments
Beginning in FY6/21, the standards used for the allocation of corporate expenses have been revised for the
purpose of more accurately showing the actual profitability of each segment.
(3) Types of products and services in each reportable segment
Products and services in the reportable segments are as follows.
Reportable segments

Products and services
Smart Resource service
Ads in public info publications, banner ads, etc.
Smart Creation service
MachiletAdvertising

Genewat

EnergyMedia

Jichitai Works, B-to-G solutions

2. Information related to net sales, profit or loss, assets, liabilities and other items for each reportable segment
FY6/21 (Jul. 1, 2020 – Jun. 30, 2021)
Reportable segment
Advertising

EnergyMedia

Subtotal

Other

Total

(Thousands of yen)Amounts shownon consolidated
Adjustment
financialstatements

Net sales
External sales
1,719,457 32,663,973 228,944 34,612,376
3,191 34,615,567
34,615,567
Inter-segment
sales and transfers
Total
1,719,457 32,663,973 228,944 34,612,376
3,191 34,615,567
34,615,567
Segment profit
58,425 (6,538,234) (47,821) (6,586,055) (309,364)(6,895,420)
328,200 (6,924,860)(loss)
Segment assets
800,142
7,652,970
64,0058,517,119
24 8,517,144 2,447,392
10,964,536
Other items
Depreciation
8,416
114
8,531
8,531
8,993
17,524
Increase inproperty, plantand equipment
12,726
12,726
12,726
8,245
20,971and intangible
assets
Notes: 1. Other consists of the businesses which are not included in any of the reportable segments and mainly includes
Machiiro and Jichitai Works HA×SH services.
2. The negative 309,364 thousand yen adjustment to segment profit (loss) is corporate expenses that are not allocatedto any of the reportable segments. Corporate expenses mainly consist of general and administrative expenses thatare not attributable to any of the reportable segments.
3. Segment profit (loss) is adjusted to be consistent with operating loss shown on the consolidated statement ofincome.
4. Segment liabilities are not presented as they are not used for making decisions about allocation of management
resources and evaluating results of operations.

15

HOPE, INC. (6195) Consolidated Financial Results for FY6/21

Additional Information(Significant Accounting Policies for the Preparation of Consolidated Financial Statements)
HOPE started preparing the consolidated financial statements from the fiscal year ended June 30, 2021. Basis ofpreparation of the consolidated financial statements is as follows.
1. Matters concerning the scope of consolidation
Number of consolidated subsidiaries: 1
Name of principal consolidated subsidiary: HOPE ENERGY, INC.
2. Matters concerning application of the equity method
Not applicable.
3. Matters concerning accounting period of consolidated subsidiary
The fiscal year of a consolidated subsidiary ends on the consolidated balance sheet date.
4. Accounting standards(1) Valuation criteria and methods for marketable securities
Other securities
Securities with market quotations
Stated at market value at the accounting closing date (valuation difference is comprehensively reported as acomponent of net assets and the cost of securities sold is computed using the moving-average method.)
Securities without market quotations
Stated at cost by the moving-average method.
(2) Valuation criteria and methods for inventories
a. Merchandise and finished goods and work in process
Stated at cost on an individual specified cost basis (the balance sheet value is computed by the method ofdevaluing book price to reflect declines in profitability).
b. Supplies
Stated at cost, cost being determined by the last purchased cost method (the balance sheet value is computedby the method of devaluing book price to reflect declines in profitability).
(3) Depreciation and amortization methods for non-current assets
a. Property, plant and equipment
Declining-balance method except for buildings (excluding attached structures) acquired on or after April 1,
1998, which are accounted for by the straight-line method.
Useful lives of principle assets are as follows:
Buildings: 10 years
Vehicles: 5 to 6 years
Tools, furniture and fixtures: 2 to 8 years
b. Intangible assets
The straight-line method. Software for internal use is amortized over an expected useful life of five years.
(4) Recognition of allowances
Allowance for doubtful accounts
To prepare for losses on doubtful accounts such as notes and account receivables-trade and loans receivable,
allowances equal to the estimated amount of uncollectible receivables are booked for general receivables basedon the historical write-off ratio, and bad receivables based on case-by-case determination of collectibility.
(5) Cash and cash equivalents in the Consolidated Statement of Cash Flows
Cash and cash equivalents consist of cash on hand, bank deposits which can be withdrawn at any time, andshort-term investments with the duration of three months or less which can be easily converted to cash and are
exposed to little risk of change in value.
16

HOPE, INC. (6195) Consolidated Financial Results for FY6/21(6) Other significant accounting policies in the preparation of consolidated financial statements
Accounting for consumption taxes
National and local consumption taxes are accounted by the tax-exclusion method. Non-deductible national andlocal consumption taxes are charged to expenses for the fiscal year when they were incurred.

Per-share Information(Yen)
FY6/21(Jul. 1, 2020 – Jun. 30, 2021)
Net assets per share(326.50)

Net loss per share(1,109.09)-

Diluted net income per share

Notes: 1. Diluted net income per share is not presented because net loss was posted although there were outstanding dilutive
shares.
2. The basis for calculating net assets per share is as follows.
(Thousands of yen, unless otherwise stated)
FY6/21(As of Jun. 30, 2021)
Total net assets(2,498,387)

Amount deducted from total net assets(32,047)[of which share acquisition rights][(32,047)]

Net assets at the end of the fiscal year applicable tocommon shares
Number of common shares at the end of the fiscal year
used for the calculation of net assets per share (shares)(2,530,435)
7,750,119

3. The basis for calculating net loss per share and diluted net income per share is as follows.
(Thousands of yen, unless otherwise stated)
FY6/21(Jul. 1, 2020 – Jun. 30, 2021)
Net loss per share(6,978,950)

Loss attributable to owners of parent-

Amount not attributable to common shareholders
Loss attributable to owners of parent applicable tocommon shares
Average number of common shares outstanding
during the period (shares)(6,978,950)
6,292,514

Diluted net income per share-

Adjustment to profit attributable to owners of parent

503,548

Increase in the number of common shares (shares)[503,548][of which share acquisition rights (shares)]

Summary of dilutive shares not included in thecalculation of diluted net income per share since there
was no dilutive effect

The Eighth Share Acquisition
Rights (Number of shareacquisition rights: 600)
The Ninth Share Acquisition
Rights (Number of shareacquisition rights: 22,370)
The tenth Share Acquisition
Rights (Number of shareacquisition rights: 579)

17

HOPE, INC. (6195) Consolidated Financial Results for FY6/21

Material Subsequent Events
The Board of Directors of HOPE approved a resolution on August 11, 2021 to conclude an absorption-type split
agreement with Hope Energy, Inc., a wholly owned subsidiary of HOPE, to succeed the electricity retail sales
business operated by HOPE to Hope Energy, Inc. on December 1, 2021 (tentative). For more details, please refer
to “Notice of Company Split (Absorption-type Split) (Japanese version only),” which was announced today(August 11, 2021).

This financial report is solely a translation of “Kessan Tanshin” (in Japanese, including attachments), which has been
prepared in accordance with accounting principles and practices generally accepted in Japan, for the convenience of readers
who prefer an English translation.

18