フィンテック　グローバル（8789） – Summary of Financial Statements for the First Two Quarters of Fiscal 2022

UNOFFICIAL TRANSLATION The following is a translation, for convenience only, of the original document issued in Japanese Summary of Financial Statements for the First Two Quarters of Fiscal 2022 Company Name: FinTech Global Incorporated (URL: http://www.fgi.co.jp/english/) Representative: President and Chief Executive Officer Contact: Director, Senior Executive Officer Scheduled date for filing of securities report: May 13, 2022 Scheduled date of commencement of dividend payment: － Preparation of explanatory materials for quarterly financial results: Yes Information meetings arranged related to quarterly financial results: None 1. Consolidated results for the first two quarters of fiscal 2022 (October 1, 2021 – March 31, 2022) (1) Consolidated operating results May 11, 2022 (Code Number: 8789 Tokyo Stock Exchange) TEL: +81-50-5864-3978 Name: Nobumitsu Tamai Name: Takashi Senda (Rounded down to the nearest million) （Percentages indicate year-on-year changes.） Revenues Operating income/(loss) Ordinary profit/(loss) Millions of yen 4,421 (9.3) 14.2 4,874 % Millions of yen (39) 840 % Millions of yen – (51) 831 – (84) million yen for the first two quarters of fiscal 2022 (－)% 651 million yen for the first two quarters of fiscal 2021 (－)% Profit/(loss) attributable to owners of the parent % Millions of yen (203) – 618 – % – – Net income/(loss) per share Net income per share (diluted) Yen (1.01) 3.07 Yen – 3.07 Total assets Net assets Equity ratio Millions of yen 16,172 16,457 Millions of yen 7,243 7,439 % 38.0 38.5 6,142 million yen for the first two quarters of fiscal 2022 6,328 million yen for fiscal 2021 First two quarters of fiscal 2022 First two quarters of fiscal 2021 (For reference) Comprehensive income: First two quarters of fiscal 2022 First two quarters of fiscal 2021 (2) Consolidated financial position First two quarters of fiscal 2022 Fiscal 2021 (For reference) Shareholders’ equity: 1 2. Dividends End of first quarter End of second quarter End of third quarter End of fiscal year Total Dividend per share Fiscal 2021 Fiscal 2022 Fiscal 2022 (Forecast) Yen － － Yen 0.00 0.00 Yen 0.00 0.00 Yen － － (Note) Change from the latest dividend forecast: None 3. Consolidated financial forecasts for fiscal 2022 (October 1, 2021 – September 30, 2022) Revenues Operating income Ordinary profit (Percentages indicate year-on-year changes.) Profit attributable to owners of the parent E.P.S. Millions of yen % Millions of yen % Millions of yen % Millions of yen % Fiscal 2022 8,000 (1.3) 450 152.7 300 159.0 100 (23.6) Yen 0.00 0.00 Yen 0.50 (Notes) 1. Change from the latest consolidated financial forecasts: None *Notes (1) Changes in significant subsidiaries during the period: None (2) Adoption of specific accounting policies for quarterly consolidated financial statements: None (3) Changes in accounting policies, changes in accounting estimates, and restatements: (a). Changes in accounting policies required by accounting standard: Yes (b). Changes other than those in (a) above: None (c). Changes in accounting estimates: None (d). Restatements: None Note: For details, please refer to “ Consolidated Financial Statements and Primary Notes (3) Notes to Quarterly Consolidated Financial Statements (Change in accounting policies)”. 1. Number of shares issued (including treasury stock): 201,295,200 shares in the first two quarters of fiscal 2022 (4) Number of shares issued (common shares) 2. Number of shares of treasury stock: 3. Average number of shares issued during the first two quarters: 201,115,600 shares in fiscal 2021 － shares for the first two quarters of fiscal 2022 － shares for fiscal 2021 201,213,740 shares in the first two quarters of fiscal 2022 201,115,303 shares in the first two quarters of fiscal 2021 * This summary of financial statements is exempt from the review procedures. * Explanation of the appropriate use of performance forecasts and other related items. The forward-looking statements included in this summary of financial statements are based on the assumptions, forecasts, and plans of the Company as of the date on which this document is made public. The Company’s actual results may differ substantially from such statements due to various risks and uncertainties. 2 Consolidated Financial Statements and Primary Notes (1) Quarterly Consolidated Balance Sheets Fiscal 2021 (As of September 30, 2021) (Unit: Thousands of yen) First two Quarters of Fiscal 2022 (As of March 31, 2022) 2,379,230 753,826 － 1,042,651 455,415 4,038,343 192,176 398,443 (92,518) 9,167,569 5,380,820 (522,495) 4,858,325 1,440,780 6,299,105 129,334 486,976 616,310 65,865 33,336 8,445 267,025 (70) 374,602 7,290,019 16,457,588 2,273,808 － 1,245,637 754,524 418,565 4,042,526 130,925 354,698 (100,020) 9,120,665 5,383,329 (618,932) 4,764,396 1,288,194 6,052,591 117,984 515,763 633,747 75,066 39,170 11,980 247,763 (8,041) 365,938 7,052,277 16,172,943 Assets Current assets Cash and time deposits Accounts receivable, trade Accounts receivable, trade, and contract assets Investments in securities, trade Loans receivable, trade Real estate for sale Merchandise Other Allowance for doubtful accounts Total current assets Noncurrent assets Property, plant and equipment Buildings and structures Accumulated depreciation Buildings and structures, net Other Total property, plant and equipment Intangible fixed assets Goodwill Other Total intangible fixed assets Investments and other assets Investments in securities Long-term loans receivable Deferred tax assets Other Allowance for doubtful accounts Total investments and other assets Total noncurrent assets Total assets 3 Fiscal 2021 (As of September 30, 2021) (Unit: Thousands of yen) First two Quarters of Fiscal 2022 (As of March 31, 2022) Liabilities Current liabilities Accounts payable, trade Short-term loans payable Current portion of long-term loans payable Income taxes payable Lease obligations Provision for bonuses Other Total current liabilities Noncurrent liabilities Long-term loans payable Lease obligations Deferred tax liabilities Retirement benefit liability Other Total noncurrent liabilities Total liabilities Net assets Shareholders’ equity Common stock Additional paid-in capital Retained earnings Total shareholders’ equity Stock acquisition rights Non-controlling interests Total net assets Total liabilities and net assets Accumulated other comprehensive income Valuation difference on available-for-sale securities Foreign currency translation adjustment Total accumulated other comprehensive income 130,687 125,600 393,194 75,228 247,203 146,703 1,273,293 2,391,910 6,041,300 388,207 64,885 99,040 33,122 6,626,556 9,018,467 6,462,099 4,987,549 (5,120,066) 6,329,582 6,249 (7,167) (918) 78,503 1,031,953 7,439,120 16,457,588 371,165 27,600 457,624 96,001 251,224 139,866 1,177,924 2,521,407 5,976,052 269,987 23,651 105,721 33,122 6,408,535 8,929,943 6,471,266 4,996,716 (5,323,174) 6,144,808 9,308 (11,191) (1,882) 46,893 1,053,181 7,243,000 16,172,943 4 (2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income Quarterly Consolidated Statements of Income First two Quarters of Fiscal 2021 (From October 1, 2020 to March 31, 2021) (Unit: Thousands of yen) First two Quarters of Fiscal 2022 (From October 1, 2021 to March 31, 2022) Share of profit of entities accounted for using equity method Selling, general and administrative expenses Revenues Cost of revenues Gross profit Operating income/(loss) Non-operating income Interest income Foreign exchange gains Subsidy income Other Total non-operating income Non-operating expenses Interest expense Foreign exchange losses Provision of allowance for doubtful accounts Other Total non-operating expenses Gain on reversal of stock acquisition rights Ordinary profit/(loss) Extraordinary income Other Total extraordinary income Extraordinary losses Loss on valuation of investments in capital of subsidiaries and associates Loss on retirement of non-current assets Loss on valuation of shares of subsidiaries and associates Loss on liquidation of subsidiaries and associates Total extraordinary loss Income/(loss) before income taxes Income taxes (current) Income taxes (deferred) Total income taxes Profit/(Loss) Profit/(Loss) attributable to non-controlling interests Profit/(Loss) attributable to owners of the parent 5 4,421,191 2,811,670 1,609,521 1,649,476 (39,955) 516 11,629 9,563 34,051 3,196 58,957 59,120 － 9,627 2,055 70,804 (51,802) 15,691 － 15,691 999 － － 362 1,362 (37,473) 89,868 (46,958) 42,909 (80,383) 122,724 (203,107) 4,874,665 2,490,402 2,384,262 1,543,450 840,812 460 － 9,664 53,425 2,231 65,780 58,369 15,521 － 1,536 75,426 831,166 3,108 14 3,123 － 801 320 － 1,122 833,168 235,203 (22,019) 213,183 619,984 1,690 618,293 Quarterly Consolidated Statements of Comprehensive Income Profit/(Loss) Other comprehensive income Valuation difference on available-for-sale securities Foreign currency translation adjustment Total other comprehensive income Comprehensive income Comprehensive income attributable to Comprehensive income attributable to owners of the parent Comprehensive income attributable to non-controlling interests First two Quarters of Fiscal 2021 (From October 1, 2020 to March 31, 2021) (Unit: Thousands of yen) First two Quarters of Fiscal 2022 (From October 1, 2021 to March 31, 2022) 619,984 7,988 24,015 32,003 651,988 640,479 11,508 (80,383) 3,058 (7,372) (4,313) (84,696) (204,072) 119,375 6 (3) Notes to Quarterly Consolidated Financial Statements (Assumption of Going Concern) Not applicable. (Significant Change in Shareholders’ Equity) Not applicable. (Change in accounting policies) 1. Application of Accounting Standard for Revenue Recognition The Company has applied the “Accounting Standard for Revenue Recognition” (Accounting Standards Board of Japan [hereinafter, the “ASBJ”] Statement No.29, March 31, 2020) effective from the start of the first quarter of the current fiscal year. It recognizes revenue based on the amount expected to be received in exchange for such goods or services at the time when control of the promised goods or services is transferred to the customer. The application of the Accounting Standard for Revenue Recognition is subject to the transitional treatment provided for in paragraph 84 of the Accounting Standard for Revenue Recognition. The cumulative effect of the retrospective application, assuming the new accounting policy had been applied to periods before the start of the first quarter of the current fiscal year, was added to or subtracted from the beginning balance of retained earnings of the first quarter of the current fiscal year, and thus the new accounting policy was applied from such beginning balance. There is no impact of this change on the beginning balance of retained earnings. Also, there is no impact on operating loss, ordinary loss, and loss before income taxes. The main changes due to the adoption of the Accounting Standard for Revenue Recognition are as follows. (1) Revenue recognition for agent transactions Revenue related to consignment buying was previously recognized in the gross amount of consideration received from customers, but as a result of determining whether the Company was a principal or an agent in providing those goods or services to customers, the Company changed the method of revenue recognition to recognize revenue in the net amount, obtained by subtracting the amount paid to suppliers from the gross amount. Such revenue is recorded in net revenues. As a result, both revenues and cost of revenues decreased by 37 million yen for the first two quarters of the current fiscal year. Due to the application of the Accounting Standard for Revenue Recognition, “Accounts receivable, trade,” which were presented under “Current assets” in the consolidated balance sheet for the previous fiscal year, are included in “Accounts receivable, trade, and contract assets” effective from the first quarter of the current fiscal year. In accordance with the transitional treatment provided for in Paragraph 89-2 of the Accounting Standard for Revenue Recognition, figures for the previous fiscal year have not been restated in accordance with the new presentation approach. 2. Application of Accounting Standard for Fair Value Measurement The Company has applied the “Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30, July 4, 2019) and relevant ASBJ regulations effective from the start of the first quarter of the current fiscal year, and it has applied the new accounting policy provided for by the Accounting Standard for Fair Value Measurement prospectively in accordance with the transitional measures provided for in paragraph 19 of the Accounting Standard for Fair Value Measurement, and paragraph 44-2 of the “Accounting Standard for Financial Instruments” (ASBJ Statement No. 10, July 4, 2019). The application of the “Accounting Standard for Fair Value Measurement” and relevant ASBJ regulations has no impact on the quarterly consolidated financial statements for the first two quarters of the current fiscal year. 7 (Additional Information) (Accounting estimates related to impact from spread of COVID-19) There is no material change concerning the assumption, and the accounting estimates based on it, about how COVID-19, the disease caused by the new coronavirus, will spread further and influence economic and corporate activities, when it will subside, etc., which were stated in the Annual Securities Report for the previous fiscal year. 8 (Segment Information) I. Six months ended March 31, 2021 (October 1, 2020 to March 31, 2021) 1. Information about the amount of revenues, profits or losses pursuant to each reporting segment Investment Banking Business Reporting Segments Public Management Consulting Business Entertainment Service Business Total Adjustment (Note 1) Consolidated (Note 2) 2,570,956 112,727 2,190,981 4,874,665 4,874,665 (Thousands of yen) 98,560 6,000 40,250 144,811 (144,811) 2,669,516 118,727 2,231,232 5,019,476 (144,811) 4,874,665 1,322,505 (3,230) (155,078) 1,164,195 (323,383) 840,812 1. Adjustment of segment income (loss), at ¥ (323,383) thousand, includes elimination of transactions among segments of ¥110,533 thousand and corporate expenses of ¥ (433,916) thousand, which are not allocatable to reporting segments. Corporate expenses are mainly general and administrative expenses, which do not belong to any reporting segments. 2. Segment income (loss) is reconciled with operating income in the quarterly consolidated statements. Ⅱ. Six months ended March 31, 2022 (October 1, 2021 to March 31, 2022) 1. Information about the amount of revenues, profits or losses pursuant to each reporting segment Reporting Segments Investment Banking Business Public Management Consulting Business Entertainment Service Business Total Adjustment (Note 1) Consolidated (Note 2) 2,078,743 195,453 2,146,994 4,421,191 4,421,191 (Thousands of yen) 114,800 6,000 32,228 153,029 (153,029) 2,193,543 201,453 2,179,223 4,574,220 (153,029) 4,421,191 310,961 12,404 (25,897) 297,468 (337,423) (39,955) 1. Adjustment of segment income, at ¥ (337,423) thousand, includes elimination of transactions among segments of ¥96,170 thousand and corporate expenses of ¥ (433,594) thousand, which are not allocatable to reporting segments. Corporate expenses are mainly general and administrative expenses, which do not belong to any reporting segments. 2. Segment income (loss) is reconciled with operating loss in the quarterly consolidated statements. － － － － Revenues Revenues to third party Inter-segment revenues and transfers Total Segment income (loss) Notes: Revenues Revenues to third party Inter-segment revenues and transfers Total Segment income (loss) Notes: 9