FinTech Global Incorporated : Summary of Financial Statements for the First Two Quarters of Fiscal 2022 (under Japanese GAAP) (Update to Completed Version on May 25, 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

		May 11, 2022
Company Name:	FinTech Global Incorporated	(Code Number: 8789 Tokyo Stock Exchange)
	(URL:http://www.fgi.co.jp/english/)	TEL: [phone]
Representative:	President and Chief Executive Officer	Name: Nobumitsu Tamai
Contact:	Director, Senior Executive Officer	Name: Takashi Senda

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

(Rounded down to the nearest million)

1. Consolidated results for the first two quarters of fiscal 2022 (October 1, 2021 - March 31, 2022)

(1) Consolidated operating results							（Percentages indicate year-on-year	changes.）
		Revenues	Operating income/(loss)	Ordinary profit/(loss)	Profit/(loss) attributable to
		owners of the parent
	Millions of yen		%	Millions of yen		%	Millions of yen		%	Millions of yen		%
First two quarters of fiscal 2022		4,421		(9.3)	(39)		-	(51)		-	(203)		-
First two quarters of fiscal 2021		4,874		14.2	840		-	831		-	618		-
(For reference) Comprehensive income:			(84) million yen for the first two quarters of fiscal 2022	(－)%
				651 million yen for the first two quarters of fiscal 2021	(－)%
		Net income/(loss)	Net income
		per share
		per share
		(diluted)
				Yen			Yen
First two quarters of fiscal 2022			(1.01)			-
First two quarters of fiscal 2021			3.07			3.07
(2) Consolidated financial position
		Total assets	Net assets		Equity ratio
			Millions of yen	Millions of yen			%
First two quarters of fiscal 2022			16,172			7,243	38.0
Fiscal 2021			16,457			7,439	38.5
(For reference) Shareholders' equity:		6,142 million yen for the first two quarters of fiscal 2022
			6,328 million yen for fiscal 2021

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2. Dividends
			Dividend per share
	End of	End of	End of	End of	Total
	first quarter	second quarter	third quarter	fiscal year
	Yen	Yen	Yen	Yen	Yen
Fiscal 2021	－	0.00	－	0.00	0.00
Fiscal 2022	－	0.00
Fiscal 2022 (Forecast)			－	0.00	0.00
(Note) Change from the latest dividend forecast: None

3. Consolidated financial forecasts for fiscal 2022 (October 1, 2021 - September 30, 2022)

(Percentages indicate year-on-year changes.)

	Revenues		Operating income	Ordinary profit	Profit attributable to	E.P.S.
		owners of the parent
	Millions of yen		%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
Fiscal 2022	8,000		(1.3)	450	152.7	300	159.0	100	(23.6)	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 "2. Consolidated Financial Statements and Primary Notes (3) Notes to Quarterly Consolidated Financial Statements (Change in accounting policies)".

(4) Number of shares issued (common shares)
1. Number of shares issued (including treasury stock):	201,295,200 shares in the first two quarters of fiscal 2022
	201,115,600 shares in fiscal 2021
2. Number of shares of treasury stock:	－ shares for the first two quarters of fiscal 2022
	－ shares for fiscal 2021
3. Average number of shares issued during the first two quarters:	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. For such performance forecasts, please refer to

"1. Qualitative Information on Business Results and Financial Position

(3) Information on Forward-Looking Statements, including Consolidated Performance Forecasts"

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1. Qualitative Information on Business Results and Financial Position

(1) Business Results

During the first two quarters-October 1, 2021 to March 31, 2022-of the fiscal 2022 consolidated accounting period for FinTech Global Incorporated (FGI) ending September 30, 2022, the investment banking business pushed forward on the formation of deals to further accelerate private equity investment addressing such issues as business succession, leading to an increase in the number of deals formed and a larger balance of investments. In the entertainment service business, steps were taken to remodel facilities at Moominvalley Park and reinforce the operating structure in meet an anticipated increase in guests as society moves into with-COVID and post-COVID times. In addition, in licensing activities, the handling volume of Moomin merchandise by licensees expanded, driving up revenues, and efforts were directed into laying a platform for further growth.

Looking at consolidated results for the first two quarters of fiscal 2022, revenues came to ¥4,421 million, slipping 9.3% year on year, and gross profit decreased 32.5%, to ¥1,609 million, despite a favorable contribution from the investment banking business, namely private equity investment and aircraft asset management services, because of a concentration of private equity investment deals in the corresponding first two quarters of fiscal 2021. Selling, general and administrative expenses rose 6.9%, to ¥1,649 million, mainly owing to an increase in staffing as well as greater outsourcing of office work to match business expansion. This led to an operating loss of ¥39 million, compared with operating income of ¥840 million in the corresponding first two quarters of fiscal 2021, and an ordinary loss of ¥51 million, compared with ordinary profit of ¥831 million a year ago. FGI recorded a loss attributable to owners of the parent, at ¥203 million, reversing from an income position of ¥618 million for the first two quarters of fiscal 2021, the level would have been deeper due to ¥122 million in quarterly profit attributable to non- controlling interests. Of note, revenues and cost of revenues each decreased by ¥37 million, compared with the previously applied accounting treatment method due to the application of "Accounting Standard for Revenue Recognition (Accounting Standards Board of Japan Statement No.29, March 31, 2020), but gross profit, operating loss, ordinary loss and quarterly loss before taxes have not been affected by the change in accounting treatment.

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(Unit: Millions of yen)

	First Two Quarters	First Two Quarters	YOY Change
	of Fiscal 2021	of Fiscal 2022
Revenues	4,874	4,421	(453)
Investment banking business	2,669	2,193	(475)
Public management consulting business	118	201	82
Entertainment service business	2,231	2,179	(52)
Elimination	(144)	(153)	(8)
Gross profit	2,384	1,609	(774)
Investment banking business	1,991	1,081	(910)
Public management consulting business	70	103	32
Entertainment service business	391	489	97
Elimination	(69)	(64)	4
Operating income/ (loss)	840	(39)	(880)
〔Segment income/ (loss)〕
Investment banking business	1,322	310	(1,011)
Public management consulting business	(3)	12	15
Entertainment service business	(155)	(25)	129
Elimination or corporate expenses	(323)	(337)	(14)
Ordinary income/ (loss)	831	(51)	(882)
Income / (Loss) before income taxes	833	(37)	(870)
Income/ (Loss) attributable to owners of parent	618	(203)	(821)

A breakdown of performance by business segment is presented below. Revenues include intersegment revenues and transfers.

a. Investment Banking Business

In the investment banking business, inquiries for private equity investment continued, with the segment marking favorable progress on transaction services and posting fee income under revenues, and marking progress in executing associated investments. In asset management activities, several new requests were received with an emphasis on investment in residences and renewable energy facilities, contributing to revenues. Consequently, the balance of assets under management rose 51.5% over the level recorded at the end of fiscal 2021, on September 30, 2021, to ¥40.1 billion, and the foundation for stock-typeearnings-that is, recurring fee revenues-was reinforced. In addition, in aircraft asset management services, requests for aircraft inspections and technical services that accompany return of aircraft and other situations remained brisk as a consequence of the pandemic. Reliance on outsourcing grew to meet increasing inquiries and to meet demand for services.

As outlined above, the investment banking business shifted into expansion mode, but due to a concentration of private equity investment deals during the first two quarters of fiscal 2021, segment

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revenues for the first two quarters of fiscal 2022 retreated 17.8% year on year, to ¥2,193 million. Segment income tumbled 76.5%, to ¥310 million.

b. Public Management Consulting Business

In the public management consulting business, which hinges on Public Management Consulting Corporation, the marketing push begun in fiscal 2021 to help large local governments in particular with preparation of financial documents continued, with the number of requests for contract services from prefectures to create financial documents and build better fixed asset ledgers increasing by four, to seven, in the current fiscal year for prefectures that runs from April 2021 through March 2022 compared with the local governments' previous fiscal year (April 2020-March 2021). In addition, the Ministry of Internal Affairs and Communications asked local public entities in January 2021 to execute a review of their general management plans, including those for public facilities, and Public Management Consulting vigorously pushed ahead on marketing activities related to services that would help local governments execute these reviews. This emphasis helped the company cultivate new clients for services, leading to a cumulative total of 385 contracted clients in fiscal 2021, up 27 from fiscal 2020. Reviews of general management plans, including those for public facilities, were to be completed by the end of March 2022, but the ministry announced that any regional public enterprises that had not done so would have until the end of March 2024 to complete the task. Therefore, PMC will continue its marketing activities to capture demand for contracted services.

The segment thus saw a 69.7% year-on-year surge in revenues, to ¥201 million, and reversed its loss position-¥3 million in the first two quarters of fiscal 2021-with income of ¥12 million.

c. Entertainment Service Business

In Metsâ operations, remodeling work under a new theme-"Well-being"-commenced in late- November and early-December 2021 to reimagine content and services geared to the needs of guests to Moominvalley Park. Through this, the site switched to an operating format matched to the needs of guests seeking a place of nature, healing and relaxation, and shifted to a fee structure that is easier-to-understand, with ticket prices based exclusively on a one-day pass. The Metsä guest count decreased 4.1% over the corresponding period in fiscal 2021, owing to continued impacts caused by the pandemic, such as the application of priority measures between January and March 2022 to prevent the spread of COVID-19, as well as an 11-day closure of the park for the remodeling work. However, Moomin Monogatari Ltd. welcomed the launch of an official online shop in Japan on March 1, 2022, in cooperation with licenser Moomin Characters Ltd., which is headquartered in the Moomin homeland of Finland, and expanded its revenue opportunities. But given prevailing challenges, Metsä-related revenues fell 8.5% year on year, to ¥1,191 million. Note that application of an accounting standard on revenue recognition caused a revenue reduction of ¥37 million that would not have occurred under if the previous accounting standard had been applied.

In licensing-related operations, licensing income was up, paralleling increased handling volume of licensed Moomin merchandise, mainly because of wider demand in the field of fashion, especially casual wear, and higher sales of magazines offering a free gift. As a result, licensing-related revenues climbed 6.3% year on year, to ¥988 million. Note that work is under way to build a unified CRM platform to underpin data-based marketing and to explore branding strategies to pave a path for medium- to long-term growth in licensing-related operations.

All told, the entertainment service business saw a 2.3% year-on-year drop in revenues, to ¥2,179 million. Note that if the standard on revenue recognition had not been applied, the year-on-year decrease would have been only 0.6%. While still posting a segment loss, at ¥25 million, this was considerably less than the ¥155 million recorded a year ago, as profitability improved following the remodeling work at Moominvalley Park.

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