August 9, 2024

Financial Results Q1 FY25/3

Agenda1. Executive Summary
2. Financial Results and KPI Highlights
3. Review of FY25/3 Growth Strategy and Q1 Business Highlights

2

Executive Summary

FY25/3 Q1results• Sales of JPY69MM ( (32.6)% YoY)
• Progress rate against FY25/3 full-year sales forecast (JPY1,710MM) is 4%. As thecompletion of joint development, for which revenue is recorded, tends to beconcentrated in the second half of the fiscal year, we do not change the full-year target.
• Progress rate on contract basis reached 51% (JPY879MM).

KPI• Number of new contracts: Acquired 5 new contracts, 17% progress against FY25/3
target (29 contracts).
• Number of total contracts: Total 27 contracts signed, 44% progress against FY25/3
target (61 contracts), including 5 contracts delivered already.

BusinessHighlights• We advanced the development in the chemical recycling business and the metalsmelting process, which are the focus of the green business areas.
– Completed metal smelting process standard bench equipment (in-housedevelopment)– Demonstrated calcination and reduction of nickel ore (Pacific Metals Co.,Ltd.)– Completed continuous demonstration equipment for chemical recycling (in-housedevelopment)

3

Agenda1. Executive Summary
2. Financial Results and KPI Highlights
3. Review of FY25/3 Growth Strategy and Q1 Business Highlights

4

Financial Results of FY25/3 Q1• We plan to achieve operating surplus by controlling SG&A expenses for the FY25/3 full-year plan.
• Q1 sales are 4% of the full-year plan, but the progress on a contracted basis is JPY879MM(51%).
（JPYMM）
Net sales

FY24/3

FY25/3Q1

Q1YoY comparison
Difference%

FY25/3

Progress

Forecasts%

10269(33)(32.6)%

1,7104.0%

Phase 1699(59)(85.8)%

490

2.0%

Phase 233592678.8%

1,2014.9%-

150.0%

Phase 3--Phase 4-

Others

---

-

30.0%

Gross profit

8052(27)(34.8)%

1,021

5.1%

% Net sales

78.0%

75.5%

(2.5)pt

-

59.7%

-

Operating profit

(169)

(194)

(25)

-

48

-

% Net sales

----

2.8%

-

Ordinary profit

(170)

(196)

(25)

-40-

Profit before tax

(181)

(196)

(14)-40-

Profit after tax

(184)

(196)

(12)

-37-

00---5

Quarterly Sales and Costs (FY22/3Q1-FY25/3Q1）(JPYMM))
1,200

Sales
COGSR&D Cost

1,032

Other SG&A

1,000

815
800

620
600

592

548
512

593

412
213

400

96

281

284

252
228
221

40

196

185

200

1669

2964

6892

116

182 848473

61

193 18556
157 2090

105

70

99

88

94

67

1Q

2Q

3Q

263
16125

229
30

60

160

109

271
22
135

102

136 98

125

122

193

190
113

100

69
121

99

01Q

2Q

3Q
FY22/34Q

FY23/34Q

1Q

2Q

3Q
FY24/34Q

1Q

2Q

3Q

4Q

FY25/3

6

Seasonal Fluctuations / Revenue Recognition
Seasonal Fluctuations•Our major clients, chemical companies, finalizes budgets by March, just before the start of the new fiscal year, so projects
with MWCC often begin in the first or second quarter. As a result, the completion of the contracts, in which our company'srevenues are recorded, tends to be biased toward the second half of the year. There is also an impact from the completion
timing of large-scale projects.

•In addition, as the majority of SG&A expenses are fixed costs, the proportion of profits also tends to be weighted toward thesecond half of the year, which would affect investors' decisions.
Quarterly Net Sales(JPYMM)

1,032

400
0Revenue Recognition

620

548

800
6861

Q1

Q2

Q3

FY22/3

182

157

185252

Q4

Q1

Q2

Q3

FY23/3

Q4592
102

136

Q1

Q269
Q3

FY24/3Q4Q1
FY25/3

The following is a description of the main performance obligations in the Company's main business related to revenues arisingfrom contracts with clients and the usual time at which such performance obligations are met. Payment is made generally within
one month after obligation is fulfilled and dose not include financial component.
(1) Joint development agreement (JDA）
The Company submits reports, samples, etc. stipulated in the JDA and receives payment. Under such agreements, revenue isbooked upon acceptance of the report, samples, etc. by the client.
(2) License agreement
Under license agreements, the Company licenses its intellectual property to clients and receives upfront payments and runningroyalties as compensation. The upfront payment is booked as revenue at the time the intellectual property is licensed. Runningroyalties are based on the sales revenue of the licensee company, and revenue is recognized when the product is sold by thelicensee company.
7

KPI (Key Performance Indicator）• Important KPIs for our business are (1) number of new contracts, (2) total number ofcontracts, and (3) sales by phase.
– Contracts are executed with clients based on our solutions and service per phase.
– Multiple contracts would be executed with one project as indicated below.
• (3) Sales by phase shows progress of the contracts by sales in each phase.
• Contracts are basis of our sales. We disclose number of contracts which are expected to becompleted and book sales within this FY.

(FY+0) Period(FY+1) Period

Project XContracts
derived fromProject X

Contract #1: Reaction processdevelopment (Phase 1)

Contract #2: Reaction processdevelopment (Phase 2)
Contract #3: Basic design ofmicrowave equipment (Phase 3)

8

FY25/3 Q1 KPI Highlights

1

Number of New Contracts

 Acquired 5 contracts out of 29 annual target (17% progress).

2

Total Number of Contracts

 27 contracts were executed and 5 delivered (FY25/3 target is 61 contracts).

3Sales by Phase JPY879MM (51% progress) achieved on contract basis (FY25/3 target JPY1,710MM).

9KPI (1) Number of New Contracts• 17% progress against FY25/3 target.

YoY Comparison# of New Contracts
2930

3530

2525

2020

15
27

1051527

1855500
FY22/3(96%)

109
FY21/32710

FY23/3

ActualPlan

FY24/3

FY25/3 Q1

9FY24/3 Q1

Delivered

FY25/3 Q1

Executed

10

KPI (2) Total Number of Contracts• 44% progress against FY25/3 target.
YoY ComparisonProgress vs. Full-year plan
7061(100%)

60605050404027(44.3%)

30Phase 430

Phase 3202010Others

Phase 2105(8.2%)

100

Phase 150
FY25/3 Q1（Delivered）

FY25/3Plan

FY25/3 Q1（Executed）

FY24/3 Q1（Delivered）

FY25/3 Q1（Delivered）(Difference)
Phase 1293972(5)Phase 221620220

Phase 300

1000

Phase 4110110

Others011000Total

52761105(5)11KPI (3) Sales by Phase• 51% progress against FY25/3 target.
FY25/3 Q1(Reference) FY24/3 Q1(JPYMM)

1,800

1,800

1,500

1,448(78.5%)

1,500

1,200

1,200879(51.4%)

900

Others

900600300

1,846(100%)(JPYMM)
1,710(100%)

600
69(4.0%)3000

Phase 4

Mitsui
Chemicals
CarbonFiber PJ:
768

Phase 3Phase 2102(5.6%)

Phase 10
FY25/3 Q1(Delivered)

FY25/3 Q1(Executed)

FY25/3Plan

FY24/3 Q1(Delivered)

FY24/3 Q1(Executed)

FY24/3Plan

Phase 19133490

69290559

Phase 259742

1,20133

1,1581,284

Phase 3--15---Phase 400----Others-

33--

3Total

69879

1,710

102

1,448

1,846

12

Agenda1. Executive Summary
2. Financial Results and KPI Highlights
3. Review of FY25/3 Growth Strategy and Q1 Business Highlights

13

Reposted p.21 of FY24/3Q4
Earning Presentation Materials

FY25/3 Growth Strategy• As implemented in FY24/3, we continue to make up-front investments in focusing business areas, andproceed with hypothesis verification of new standardization business for further growth.

Business Model# ofContracts

Unit Price

1Business AreasAcquisition of high-quality contracts• Rather than simply pursuing quantity, will
focus on high-quality inquiries that lead tolarge-scale projects.

2 Enhance certainty of project phasedevelopment by strengthening
technology platform• Improvement of efficiency and profitability
by strengthening our technology platforms
focusing on areas with technological superiority
and market demand.

Project
Phase
Development

3
Packaged
Solution

4

Focus on growth areas• Accelerate growth by active investmentsin the carbon-neutral field.

Green businessElectronics
Healthcare

Expansion and business scale throughstandardization• Acceleration of existing standardization business(chemical recycling and metal smelting process)and launch of new standardized business

Infrastructure Development
To accommodate the increase in stage-up contracts, we will gradually strengthen (1) personnel and (2) R&D infrastructure(laboratory & pilot facilities).
14

Reposted p.22 of FY24/3Q4
Earning Presentation Materials

4 Growth Image in Green Business Areasi•

Steadily develop existing projects in petrochemical process, carbon fiber production, and hydrogenproduction, etc. toward Phase 3 (actual equipment installation) with our partners to achieve profit.

ii•

We have conducted hypothesis verification in various business areas and progressed standardization oftechnologies and accumulation of business track records especially in the chemical recycling and the metalsmelting process. In these areas, we aim to expand business and maximize earnings by promoting
horizontal development.

iii•

In addition to the above businesses, we will simultaneously proceed with hypothesis verification to establish
multiple new business areas.

iii

New business

Establish new business through hypothesis verificationand maximize microwave-applicable markets
ii

Metal smelting process

Business and revenue expansionthrough technology standardization
Chemical recycling
Present2022

2024

i

Existing business:
Petrochemical process, carbon
fiber, hydrogen production, etc.

2030
15

Demonstration of calcination and reduction of nickel ore (Pacific Metals Co.,Ltd.)• We collaborate with Pacific Metals Co.,Ltd. to replace the traditional coal combustion method withmicrowave heating for the calcination of nickel ore, which is a primary source of CO2 emissions currently.
• Announced a successful demonstration of calcination and reduction of nickel ore using the standard
microwave bench-scale equipment in May 2024.
– Calcined c.10 kg of nickel ore by heating it to 900°C using microwaves, which facilitated the removal of
crystalline water (i.e. calcination) within the ore.
– Furthermore, when we added coals as a reducing agent in the calcination process, the reduction ofnickel and iron in the ore progressed effectively (reduction rates comparable to those observed in
traditional rotary kilns method).
• Continue scaling-up development using this equipment to install the commercialized equipment by 2030.

Nickel ore during calcination (900℃)

16

Completion of continuous demonstration equipment for chemical recycling• In May 2024, we completed construction of a continuous demonstration equipment for chemical recycling(CR) to verify the compact, decentralized, and continuous type of CR process.
– High efficiency through continuous decomposition of waste plastics which would generate residues.
– Can change the operating conditions according to the composition of waste plastics and target recycledmaterials.
– Downsized equipment relative to the amount of waste plastic processed (space saving).

– Reduces CO2 emissions and energy consumption through the improvement of thermal efficiency.
• We conduct a series of decomposition tests on various waste plastics with this equipment.

Microwave-based continuous chemical recycling demonstration unit

17

End of Document