FinTech Global Incorporated : Summary of Financial Statements for the First Two Quarters of Fiscal 2020(under Japanese GAAP)

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 2020

		May 12, 2020
Company Name: FinTech Global Incorporated	(Code Number: 8789 TSE Mothers)
	(URL:http://www.fgi.co.jp/english/)	TEL: [phone]
Representative:	President and Chief Executive Officer	Name: Nobumitsu Tamai
Contact:	Executive Vice President - Member of the Board,	Name: Seigo Washimoto

Senior Executive Officer

Scheduled date for filing of securities report: May 14, 2020

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 2020 (October 1, 2019 -March 31, 2020)

(1) Consolidated operating results				（Percentages indicate	year-on-year changes.）
		Revenues		Operating		Ordinary		Profit/(loss) attributable to
			income/(loss)		profit/(loss)			owners of the parent
		Millions of yen	%	Millions of yen	%	Millions of yen	%		Millions of yen	%
First two quarters of fiscal 2020		4,269	30.3	(495)	-	(560)	-		(581)	-
First two quarters of fiscal 2019		3,277	91.3	(1,467)	-	(1,567)	-		(1,244)	-

(For reference) Comprehensive income:	(660) million yen for the first two quarters of fiscal 2020	(－)%
		(1,601) million yen for the first two quarters of fiscal 2019	(－)%
	Net income/(loss)	Net income/(loss)
	per share
		per share
		(diluted)
		Yen	Yen
First two quarters of fiscal 2020		(2.89)		-
First two quarters of fiscal 2019		(6.50)		-
(2) Consolidated financial position
		Total assets		Net assets	Equity ratio
		Millions of yen		Millions of yen	%
First two quarters of fiscal 2020		17,453		8,135	39.0
Fiscal 2019		19,025		8,873	39.1

(For reference) Shareholders' equity: 6,811 million yen for the first two quarters of fiscal 2020 7,446 million yen for fiscal 2019

1

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 2019	－	0.00	－	0.00	0.00
Fiscal 2020	－	0.00
Fiscal 2020 (Forecast)			－	－	－
(Note) Change from the latest dividend forecast: None
The dividend forecast for fiscal year ending September 30, 2020 is yet to be determined.

3. Full-year performance forecasts for fiscal 2020 (October 1, 2019 - September 30, 2020)

In the environment where spread of new coronavirus(COVID-19) infection could affect the Group's future performance, projection

of consolidated results for fiscal 2020 is not indicated, as it is difficult to reasonably calculate our forecast at this point. We will disclose our consolidated forecast of results when a reasonable projection becomes possible.

4. 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: None

(b). Changes other than those in (a) above: None

(c). Changes in accounting estimates: None

(d). Restatements: None

1. Number of shares issued (common shares)
   1. Number of shares issued (including treasury stock): 201,114,600 shares in the first two quarters of fiscal 2020 201,109,600 shares in fiscal 2019

2. Number of shares of treasury stock:

－ shares for the first two quarters of fiscal 2020

• shares for fiscal 2019

3. Average number of shares issued during the first two quarters:

201,113,146 shares in the first two quarters of fiscal 2020 191,572,055 shares in the first two quarters of fiscal 2019

• 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

FinTech Global Incorporated and Consolidated Subsidiaries

As of and for the Six months ended March 31, 2020

(1) Quarterly Consolidated Balance Sheets

				(Unit: Thousands of yen)
				First two Quarters
			Fiscal 2019	of Fiscal 2020
			(As of September 30, 2019)	(As of March 31, 2020)
	Assets
	Current assets
	Cash and time deposits		2,533,187	2,251,436
	Accounts receivable, trade	727,499	733,316
	Investments in securities, trade		1,359,941	1,241,997
	Loans receivable, trade	548,625	529,995
	Real estate for sale		4,211,988	3,910,618
	Merchandise	208,577	284,077
	Other		948,410	293,997
	Allowance for doubtful accounts	(99,641)	(95,438)
	Total current assets		10,438,589	9,150,001
	Noncurrent assets
	Property, plant and equipment
	Buildings and structures	5,328,377	5,365,911
	Accumulated depreciation		(137,112)	(233,716)
	Buildings and structures, net		5,191,265	5,132,195
	Other		2,092,587	1,927,884
	Total property, plant and equipment		7,283,853	7,060,079
	Intangible fixed assets
	Goodwill	180,388	149,263
	Other		544,540	532,225
	Total intangible fixed assets		724,929	681,488
	Investments and other assets
	Investment securities	211,068	207,022
	Other		366,683	354,765
	Allowance for doubtful accounts	(110)	(242)
	Total investments and other assets		577,641	561,544
	Total noncurrent assets		8,586,424	8,303,112
	Total assets		19,025,014	17,453,114

3

				(Unit: Thousands of yen)
				First two Quarters
			Fiscal 2019	of Fiscal 2020
			(As of September 30, 2019)	(As of March 31, 2020)
	Liabilities
	Current liabilities
	Accounts payable, trade		213,256	207,562
	Short-term loans payable	373,904	79,283
	Current portion of long-term loans payable		752,968	300,968
	Income taxes payable	98,999	113,839
	Accrued employee bonuses		157,244	145,361
	Other	1,413,720	1,316,723
	Total current liabilities		3,010,093	2,163,738
	Noncurrent liabilities
	Long-term loans payable		6,086,260	6,220,871
	Net defined benefit liability	94,633	102,696
	Other		960,856	830,144
	Total noncurrent liabilities		7,141,750	7,153,711
	Total liabilities		10,151,843	9,317,450
	Net assets
	Shareholders' equity
	Common stock	6,461,911	6,462,062
	Additional paid-in capital		5,015,924	5,016,132
	Retained earnings	(3,997,770)	(4,627,756)
	Total shareholders' equity		7,480,064	6,850,439
	Accumulated other comprehensive income
	Valuation difference on available-for-sale securities		(3,935)	(8,187)
	Foreign currency translation adjustment	(29,558)	(30,301)
	Total accumulated other comprehensive income		(33,493)	(38,488)
	Stock acquisition rights		65,837	62,162
	Non-controlling interests		1,360,762	1,261,550
	Total net assets		8,873,170	8,135,664
	Total liabilities and net assets		19,025,014	17,453,114

4

1. Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income Quarterly Consolidated Statements of Income

				(Unit: Thousands of yen)
			First two Quarters	First two Quarters
			of Fiscal 2019	of Fiscal 2020
			(From October 1, 2018	(From October 1, 2019
			to March 31, 2019)	to March 31, 2020)
	Revenues		3,277,955	4,269,822
	Cost of revenues	2,327,007	2,968,595
	Gross profit		950,948	1,301,227
	Selling, general and administrative expenses		2,418,784	1,796,335
	Operating income/(loss)		(1,467,835)	(495,107)
	Non-operating income
	Interest income		2,653	521
	Foreign exchange gains		－	6,985
	Settlement received		5,821	－
	Other	397	1
	Total non-operating income		8,871	7,508
	Non-operating expenses
	Interest expense		63,514	68,823
	Share of loss of entities accounted for using equity
	method		－	2,085
	Foreign exchange losses		14,223	－
	Commission paid	30,833	1,500
	Other		23	363
	Total non-operating expenses		108,594	72,772
	Ordinary profit/(loss)		(1,567,558)	(560,371)
	Extraordinary income
	Gain on sales of non-current assets		－	1,185
	Gain on sales of subsidiaries and associates	58,845	－
	Gain on reversal of stock acquisition rights		1,448	4,486
	Total extraordinary income		60,294	5,672
	Extraordinary losses
	Loss on sales of non-current assets	891	－
	Loss on retirement of non-current assets		28,587	899
	Loss on valuation of investments in capital		－	2,140
	Loss on temporary closure		－	71,787
	Other	178	－
	Total extraordinary loss		29,657	74,827
	Income/(Loss) before income taxes		(1,536,922)	(629,526)
	Income taxes (current)		56,917	55,223
	Income taxes (deferred)	(9,821)	(29,347)
	Total income taxes		47,096	25,875
	Profit/(Loss)		(1,584,018)	(655,401)
	Profit (Loss) attributable to non-controlling interests		(339,502)	(73,870)
	Profit (Loss) attributable to owners of the parent		(1,244,515)	(581,531)

5

Quarterly Consolidated Statements of Comprehensive Income

				(Unit: Thousands of yen)
			First two Quarters	First two Quarters
			of Fiscal 2019	of Fiscal 2020
			(From October 1, 2018	(From October 1, 2019
			to March 31, 2019)	to March 31, 2020)
	Profit/(Loss)		(1,584,018)	(655,401)
	Other comprehensive income
	Valuation difference on available-for-sale securities		(14,077)	(4,252)
	Foreign currency translation adjustment	(3,103)	(1,315)
	Total other comprehensive income		(17,180)	(5,567)
	Comprehensive income		(1,601,198)	(660,969)
	Comprehensive income attributable to
	Comprehensive income attributable to owners of the
	parent	(1,260,798)	(296,213)
	Comprehensive income attributable to non-controlling
	interests		(340,400)	(74,443)

6

1. Notes to Quarterly Consolidated Financial Statements (Assumption of Going Concern)
   Not applicable.

(Material Change in Shareholders' Equity)

I.Six months ended March 31, 2019 (October 1, 2018 to March 31, 2019)

During the first two quarters of fiscal 2019, the exercise of stock acquisition rights pushed common stock as well as additional paid-in capital up ¥910,492 thousand. Due to this and other changes, common stock reached ¥6,461,911 thousand and additional paid-in capital reached ¥4,963,469 thousand, as of March 31, 2019.

1. Six months ended March 31, 2020 (October 1, 2019 to March 31, 2020) Not applicable.

(Segment Information)

I. Six months ended March 31, 2019 (October 1, 2018 to March 31, 2019)

1. Information about the amount of revenues, profits or losses pursuant to each reporting segment

（Unit: Thousands of yen）

			Reporting Segments
	Investment		Public		Entertainment				Other		Total	Adjustment		Consolidated
		Management							(Note 2)		(Note 3)
	Banking			Service		Total		(Note 1)
		Consulting
	Business			Business
		Business
Revenues
Revenues to	1,257,912		439,787		1,558,897		3,256,598		21,357		3,277,955	－		3,277,955
third party
Inter-segment
revenues and	123,307		6,000		4,150		133,457		－		133,457	(133,457)		－
transfers (Note
4)
Total	1,381,220		445,787		1,563,048		3,390,055		21,357		3,411,413	(133,457)		3,277,955
Segment	(404,967)		76,059		(691,918)		(1,020,826)		(3,646)		(1,024,472)	(443,362)		(1,467,835)
income (loss)

Notes:

1. Other is a segment for businesses that do not fall under reporting segments. This includes software development and sales business and other businesses.
2. Adjustment of segment income (loss), at ¥ (443,362) thousand, includes elimination of transactions among segments of ¥121,808 thousand and corporate expenses of ¥ (565,171) thousand, which are not allocatable to reporting segments. Corporate expenses are mainly general and administrative expenses, which do not belong to any reporting segments.
3. Segment income (loss) is reconciled with operating loss in the quarterly consolidated statements.
4. Intersegment revenues and transfers in the investment banking business include Metsä Village rental income of

¥108,688 thousand that FGI, under the investment banking business, receives from Moomin Monogatari, a consolidated subsidiary under the entertainment service business.

2. Information related to goodwill and impairment loss on fixed assets by reporting segment Significant impairment loss on fixed assets

Not applicable.

Significant change in amount of goodwill

In the entertainment service business, bringing Rights and Brands Japan Co., Ltd., under consolidation generated goodwill of ¥64,681 thousand.

Significant gain on negative goodwill

Content has been omitted because significance is negligible.

7

Ⅱ. Six months ended March 31, 2020 (October 1, 2019 to March 31, 2020)

1. Information about the amount of revenues, profits or losses pursuant to each reporting segment

（Unit: Thousands of yen）

				Reporting Segments
		Investment		Public		Entertainment				Adjustment		Consolidated
			Management					(Note 1)		(Note 2)
		Banking			Service		Total
			Consulting
		Business			Business
			Business
Revenues
Revenues to third		1,301,931		120,770		2,847,120		4,269,822		－		4,269,822
party
Inter-segment
revenues and		102,457		6,000		2,929		111,387		(111,387)		－
transfers (Note 3)
Total		1,404,388		126,770		2,850,050		4,381,210		(111,387)		4,269,822
Segment income		(35,019)		(13,138)		(160,658)		(208,817)		(286,290)		(495,107)
(loss)

Notes:

1. Adjustment of segment income (loss), at ¥ (286,290) thousand, includes elimination of transactions among segments of ¥119,167 thousand and corporate expenses of ¥ (405,457) 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.
3. Intersegment revenues and transfers in the investment banking business include Metsä Village rental income of

¥82,056 thousand that FGI, under the investment banking business, receives from Moomin Monogatari, a consolidated subsidiary under the entertainment service business.

2. Changes in reporting segments

Adacotech Incorporated which was indicated under "Other" segment executed mainly a third-party allocation of shares in June 2019. As FGI's ratio of voting rights declined, Adacotech has been removed from the scope of consolidation and is now accounted for by the equity method. As such, "Other" segment is no longer indicated as a reporting segment in fiscal 2020.

3. Information related to goodwill and impairment loss on fixed assets by reporting segment Significant impairment loss on fixed assets

Not applicable.

Significant change in amount of goodwill

Not applicable.

Significant gain on negative goodwill

Not applicable.

8