Annual Financial Results for FY 2025

(1) Explanation of Operating Results

Total current assets at the end of the semi-annual period of the fiscal year under review were 8,147,434 thousand yen, a decrease of Operating revenue was none (operating revenue was none for the previous fiscal year).

R&D expenses was 1,394,651 thousand yen for the current fiscal year ended July 31, 2025, a decrease of 59,318 thousand yen from the previous fiscal year. Other selling, general and administrative expenses was 576,881 thousand yen for the fiscal year ended July 31, 2025, a decrease of 45,233 thousand yen from the previous fiscal year. The decrease in R&D expenses was mainly due to a decrease in research material costs and a decrease in stock-based compensation for research personnel. Similarly, the decrease in Other selling, general and administrative expenses was primarily due to a decrease in stock-based compensation for directors and administrative staff. As a result, the Company recorded 1,971,532 thousand yen in operating expenses for the fiscal year ended July 31, 2025, a decrease of 104,552 thousand yen from the previous fiscal year, and 1,971,532 thousand yen in Operating loss for the fiscal year ended July 31, 2025 (operating loss of 2,076,084 thousand yen for the previous fiscal year).

Non-operating income was 1,113 thousand yen for the current fiscal year, an increase of 817 thousand yen from the previous fiscal year. Non-operating expenses was 24 thousand yen for the current fiscal year, a decrease of 2,058 thousand yen from the previous fiscal year. The main component of non-operating income was a consumption tax refund surcharge of 579 thousand yen, along with a gain on sale of goods of 463 thousand yen. In addition, the main component of non-operating expenses was removal costs amounting to 20 thousand yen. As a result, Ordinary loss was 1,970,444 thousand yen (ordinary loss of 2,077,872 thousand yen for the previous fiscal year).

Extraordinary income was 42,870 thousand yen (extraordinary income of 59,047 thousand yen for the previous fiscal year). The main component of extraordinary income was gain on reversal of share acquisition rights. Extraordinary loss was 210 thousand yen. The main component of the extraordinary loss was a loss on the sale of fixed assets totaling 140 thousand yen. Net loss before taxes was 1,927,784 thousand yen (net loss before taxes of 2,018,825 thousand yen for the previous fiscal year ). Income taxes for the current fiscal year was 1,652 thousand yen. As a result, net loss for the current fiscal year was 1,929,437 thousand yen (net loss of 2,022,166 thousand yen for the previous fiscal year).

(2) Explanation of Financial Position

Assets

Total current assets at the end of the fiscal year under review were 7,325,049 thousand yen, a decrease of 1,552,439 thousand yen from the end of the previous fiscal year. This was mainly due to a decrease of 1,415,857 thousand yen in cash and cash deposits. Total non-current assets were 193,610 thousand yen, a decrease of 9,315 thousand yen from the end of the previous fiscal year. This was due to a decrease of 5,618 thousand yen in property, plant and equipment, a decrease of 139 thousand yen in intangible assets due to acquisition and depreciation of software, and a decrease of 3,558 thousand yen in investments and other assets. As a result, total assets were 7,518,659 thousand yen, a decrease of 1,561,755 thousand yen from the previous fiscal year.

Liabilities

Total current liabilities at the end of the fiscal year under review were 87,884 thousand yen, an increase of 20,357 thousand yen from the end of the previous fiscal year. This was mainly due to an increase of 27,126 thousand yen in accrued consumption taxes included in other current liabilities. Total non-current liabilities were 116,545 thousand yen, a decrease of 1,807 thousand yen from the end of the previous fiscal year. This was mainly due to a decrease of 1,980 thousand yen in deferred tax liabilities. As a result, total liabilities were 204,430 thousand yen, an increase of 18,549 thousand yen from the previous fiscal year.

Net assets

Total net assets at the end of the fiscal year under review were 7,314,229 thousand yen, a decrease of 1,580,305 thousand yen from the end of the previous fiscal year. This was mainly due to the recording of 1,929,437 thousand yen in net loss, an increase of 137,831 thousand yen in stock acquisition rights, and an increase of 105,650 thousand yen in capital stock and capital surplus because of the exercise of stock acquisition rights and issuance of new shares through restricted stock compensation. Capital stock a decrease of 106,400 thousand yen and capital reserve an increase of 106,400 thousand yen as a result of capital reductions in July 30,2025. As a result, capital stock was 10,000 thousand yen, capital surplus was 9,634,875 thousand yen, and retained earnings (3,783,253) thousand yen.

(3) Explanation of Cash Flows

Cash and cash equivalents at the fiscal year under review were 6,994,592 thousand yen, a decrease of 1,415,857 thousand yen from the end of the previous fiscal year.

Cash flows from operating activities

Net cash used in operating activities was 1,414,608 thousand yen (outflow of 1,881,497 thousand yen in the previous fiscal year). This was mainly due to the recording of a net loss before tax of 1,927,784 thousand yen, the recording of stock compensation expenses of 391,553 thousand yen, a decrease in unreceived consumption tax of 79,495 thousand yen.

Cash flows from investing activities

Net cash used in investing activities was 42,498 thousand yen (outflow of 4,784 thousand yen in the previous fiscal year). This was mainly due to the acquisition of property, plant and equipment. Research equipment is expensed as research and development expenses at the time of acquisition.

Cash flows from financing activities

Net cash provided by financing activities was 41,250 thousand yen (inflow of 78,966 thousand yen in the previous fiscal year). This is due to the issuance of shares as a result of the exercise of stock acquisition rights.

FY	FY2021.7	FY2022.7	FY2023.7	FY2024.7	FY2025.7
Operating revenue	1,400,000	22,976	2,350,000	―	―
Ordinary income(loss)	(583,827)	(1,972,325)	145,373	(2,077,872)	(1,970,444)
Net income(loss)	(582,448)	(1,948,307)	168,350	(2,022,166)	(1,929,437)
Capital stock	32,424	76,315	15,752	10,750	10,000
Net Assets	10,696,640	9,404,943	10,370,460	8,894,534	7,314,229
Total Assets	10,909,279	9,597,373	10,706,482	9,080,415	7,518,659
Equity Ratio（％）	94.4	88.7	85.9	83.4	78.0