Rakumo : Summary of Consolidated Financial Results for the Year Ended December 31, 2021 (Based on Japanese GAAP)

Translation

Notice: This document is an excerpt translation of the original Japanese document and is only for reference purposes. In the event of any discrepancy between this translated document and the original Japanese document, the latter shall prevail.

Summary of Consolidated Financial Results

for the Year Ended December 31, 2021

(Based on Japanese GAAP)

												February 10, 2022
Company name:	rakumo Inc.
Stock exchange listing:	Tokyo
Stock code:	4060	URL https://corporate.rakumo.com/
Representative:	President and CEO			Daisuke Mitarai
Inquiries:	Director CFO			Yuya Nishimura	TEL [phone]
Scheduled date of ordinary general meeting of shareholders:	March 28, 2022
Scheduled date to file Securities Report:			March 29, 2022
Scheduled date to commence dividend payments:			-
Preparation of supplementary material on financial results:		Yes
Holding of financial results meeting:				Yes	(for institutional investors and analysts)
							(Amounts less than one million yen are rounded down)
1. Consolidated financial results for the year ended December 31, 2021 (from January 1, 2021 to December 31, 2021)
(1) Consolidated operating results								Percentages indicate year-on-year changes
		Net sales		Operating profit	Ordinary profit	Profit attributable to
			owners of parent
		Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%
Year ended December 31, 2021		963	17.2	227	69.7		221	96.0		188	50.7
Year ended December 31, 2020		822	23.7	134	446.3		113	460.0		125	-
		Earnings per share	Diluted earnings per	Profit attributable to	Ordinary profit/total Operating profit/net
			share		owners of			assets		sales
						parent/equity
			Yen		Yen			%				%		%
Year ended December 31, 2021		33.68		32.11			22.7				16.0		23.6
Year ended December 31, 2020		31.36		28.56			32.5				12.8		16.3
(2) Consolidated financial position
		Total assets		Net assets		Equity ratio	Net assets per share
		Millions of yen	Millions of yen				%			Yen
As of December 31, 2021		1,517			947				62.5			166.44
As of December 31, 2020		1,251			717				57.3			129.91
(3) Consolidated cash flows	Cash flows from	Cash flows from	Cash flows from	Cash and cash equivalents
		operating activities	investing activities	financing activities	at end of period
		Millions of yen	Millions of yen		Millions of yen	Millions of yen
Year ended December 31, 2021			286			(53)				11			1,239
Year ended December 31, 2020			258			(52)				501			987
2. Cash dividends
				Annual dividends per share				Total cash	Dividend payout	Ratio of dividends
										to net assets
										dividends (Total)	ratio (Consolidated)
		1st quarter-end	2nd quarter-end	3rd quarter-end Fiscal year-end	Total		(Consolidated)
		Yen		Yen	Yen		Yen	Yen Millions of yen	%		%
Year ended December 31, 2020	-		0.00	-		0.00	0.00		-	-		-
Year ended December 31, 2021	-		0.00	-		0.00	0.00		-	-		-
Year ending December 31, 2022	-		0.00	-		0.00	0.00			-
(Forecast)

1

3. Forecast of consolidated financial results for the year ending December 31, 2022 (from January 1, 2022 to December 31, 2022)

Percentages indicate year-on-year changes

	Net sales		Operating profit		Ordinary profit		Profit attributable to	Earnings per share
				owners of parent
	Millions of yen	%	Millions of yen		%	Millions of yen		%	Millions of yen		%	Yen
Full year	1,100	-	248		-	244		-	190		-	33.42

4. Notes

(1) Changes in significant subsidiaries during the year ended December 31, 2021No (changes in specified subsidiaries resulting in the change in scope of consolidation):

(2) Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements

Changes in accounting policies due to revisions to accounting standards and other regulations:	No
Changes in accounting policies due to other reasons:	No
Changes in accounting estimates:	No
Restatement of prior period financial statements:	No

(3) Number of issued shares (common shares)

Total number of issued shares at the end of the period (including treasury shares)

	As of December 31, 2021	5,695,500	shares	As of December 31, 2020	5,520,400	shares
Number of treasury shares at the end of the period
	As of December 31, 2021	67	shares	As of December 31, 2020	-	shares
Average number of shares during the period
	Year ended December 31, 2021	5,604,632	shares	Year ended December 31, 2020	3,993,498 shares

2

Consolidated financial statements

Consolidated balance sheets

			(Thousands of yen)
		As of December 31, 2020	As of December 31, 2021
Assets
Current assets
Cash and deposits	1,037,860	1,291,240
Accounts receivable - trade	33,530	40,899
Work in process	1,043	62
Supplies	167	155
Other	35,107	39,108
Total current assets	1,107,709	1,371,465
Non-current assets
Property, plant and equipment
Facilities attached to buildings	34,822	35,930
Accumulated depreciation	(14,109)	(16,979)
Facilities attached to buildings, net	20,712	18,951
Tools, furniture and fixtures	15,172	20,257
Accumulated depreciation	(12,795)	(17,136)
Tools, furniture and fixtures, net	2,376	3,120
Total property, plant and equipment	23,089	22,072
Intangible assets
Software	66,518	46,175
Software in progress	8,486	8,214
Total intangible assets	75,004	54,390
Investments and other assets
Deferred tax assets	18,558	44,540
Other	26,682	24,618
Total investments and other assets	45,240	69,159
Total non-current assets	143,334	145,621
Total assets	1,251,044	1,517,087

3

			(Thousands of yen)
		As of December 31, 2020	As of December 31, 2021
Liabilities
Current liabilities
Accounts payable - trade	21,926	26,089
Current portion of long-term borrowings	20,004	14,982
Income taxes payable	15,326	30,195
Unearned revenue	329,117	365,781
Provision for bonuses	3,448	4,022
Other	67,935	59,029
Total current liabilities	457,757	500,100
Non-current liabilities
Long-term borrowings	64,982	50,000
Asset retirement obligations	10,173	10,392
Other	975	8,643
Total non-current liabilities	76,130	69,035
Total liabilities	533,888	569,136
Net assets
Shareholders' equity
Share capital	369,121	385,260
Capital surplus	329,971	346,110
Retained earnings	21,507	210,255
Treasury shares	-	(112)
Total shareholders' equity	720,600	941,513
Accumulated other comprehensive income
Foreign currency translation adjustment	(3,444)	6,437
Total accumulated other comprehensive income	(3,444)	6,437
Total net assets	717,155	947,950
Total liabilities and net assets	1,251,044	1,517,087

4

Consolidated statements of income and consolidated statements of comprehensive income Consolidated statements of income

			(Thousands of yen)
		Fiscal year ended	Fiscal year ended
		December 31, 2020	December 31, 2021
Net sales	822,422	963,779
Cost of sales	341,745	364,274
Gross profit	480,677	599,504
Selling, general and administrative expenses	346,359	371,595
Operating profit	134,317	227,909
Non-operating income
Interest income	47	42
Other	3	38
Total non-operating income	51	81
Non-operating expenses
Interest expenses	2,426	2,152
Share issuance costs	9,327	-
Listing expenses	9,345	-
Foreign exchange losses	172	4,217
Other	13	0
Total non-operating expenses	21,284	6,370
Ordinary profit	113,084	221,619
Extraordinary losses
Impairment losses	-	29,398
Total extraordinary losses	-	29,398
Profit before income taxes	113,084	192,221
Income taxes - current	8,904	29,445
Income taxes - deferred	(21,042)	(25,972)
Total income taxes	(12,137)	3,472
Profit	125,222	188,748
Profit attributable to non-controlling interests	-	-
Profit attributable to owners of parent	125,222	188,748

5