Retty : Non - consolidated Financial Results for the Second Quarter of the Fiscal Year Ending September 30,2021

May 13,2021

	Non - consolidated Financial Results
	for the Six Months Ended March 31, 2021
	< Japanese GAAP>
Company name:	Retty Inc.
Listing:	Tokyo Stock Exchange
Stock code:	7356
URL:	https://corp.retty.me/
Representative	Kazuya Takeda, CEO
Contact	Yuzaburo Tsuchiya, CFO
TEL	[phone]

Schedule date to file quarterly securities report: Schedule date to commence dividend payments:

Preparation of supplementary materials for financial results: Holding of financial results presentation meeting:

May 14, 2021

－

Yes

Yes (for institutional investors and securities analysts)

(All amounts are rounded down to the nearest million yen)

1. Performance for the six months ended March 31, 2021 (from October 1, 2020 to March 31, 2021)

(1) Result of operations

(Percentages indicate year-on-year changes)

Net sales

Operating profit

Ordinary profit

Profit

Six months ended

Million yen

%

Million yen

%

Million yen

%

Million yen

%

March 31, 2021

989

－

(43)

－

(114)

－

(115)

－

March 31, 2020

－

－

－

－

－

－

－

－

Basic quarterly

Diluted quarterly

earnings per share

earnings per share

Six months ended

Yen

Yen

March 31, 2021

(10.19)

－

March 31, 2020

－

－

(2) Financial Position

	Total assets		Net assets	Equity ratio
		Million yen		Million yen	%
As of March 31, 2021		2,517		1,324	52.6
As of September 30, 2020		1,533		429	28.0
Reference: Equity
As of March 31, 2021:	¥1,324 million
As of September 30, 2020:	¥429 million

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• Notes
• 1. Use of special accounting methods for preparation of quarterly consolidated financial statements: Yes
  2. Changes in accounting principles and estimates, and retrospective restatement
  1. Changes due to revision of accounting standards: None
  2. Changes other than in (a): None
  3. Changes in accounting estimates: None
  4. Retrospective restatement: None

(2) Number of shares outstanding (common stock)
(a) Shares outstanding (including treasury shares)	End of 2Q of	11,565,724	End of FY9/20	10,612,504
	FY9/21
(b) Treasury shares	End of 2Q of	92	End of FY9/20	－
	FY9/21
(c) Average number of shares outstanding during the	1H of FY9/21	11,305,601	1H of FY9/20	－
six months

• This quarterly report is exempt from the audit procedure by certified public accountants or accounting firms.
• Cautionary statement regarding forecasts of operating results and special notes

Forward-looking statements in these materials are based on information available to management at the time this report was prepared and assumptions that management believes are reasonable, and does not represent a guarantee from the Company that they will be achieved. Actual results may differ significantly from these statements for several reasons.

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Accompanying Material-Table of Contents
1. Qualitative Information on Quarterly Results.........................................................................................................	2
(1) Explanation about Operating Results..................................................................................................................	2
(2) Explanation about Financial Position...................................................................................................................	2
(3) Explanation about Forward-Looking Statements, Including Forecast of Non-consolidated Financial Results3
2. Quarterly Non-consolidated Financial Statements and Notes ..............................................................................	4
(1) Quarterly Non-consolidated Balance Sheet..........................................................................................................	4
(2) Quarterly Non-consolidated Statements of Income..............................................................................................	6
Six Months Ended March 31, 2021..........................................................................................................	6
(3) Quarterly Non-consolidated Cash Flow Statement..............................................................................................	7
(4) Notes to Quarterly Non-consolidated Financial Statements..............................................................................	8
(Going Concern Assumption) .................................................................................................................................	8
(Notes on significant changes in the amount of shareholders' equity) ................................................................	8
(Additional information).........................................................................................................................................	8
(Use of special accounting methods for preparation of quarterly non-consolidated financial statements)........	8
(Segment information)........................................................................................................ ........................	8

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1. Qualitative Information on Quarterly Results

1. Explanation about Operating Results

The Japanese economy is still being battered by the novel coronavirus (COVID-19) pandemic since its outbreak from around the end of 2019. While there are signs of certain economic recovery since the lifting of the state of emergency in May 2020, which was declared in April of the same year, the outlook remains unclear given factors such as the declaration of two more rounds of the state of emergency in January and April 2021.

Despite these circumstances, the Company's Retty restaurant review service, with reviewers using real names, strengthened its online reservation function to enhance the ability of restaurants to attract customers and carried out various campaigns that contribute to the recovery of business performance of the restaurants so as to become a service of choice of as many restaurants and advertisers as possible.

Regarding the Fan Relationship Management (FRM) service, while there was a certain level of impact of the state of emergency declared in January 2021 on the number of new paying member restaurants in the second quarter of the current fiscal year, the average number of paying member restaurants per month came to about 470 in the first half of the current fiscal year (from October 2020 to March 2021) thanks to the relatively strong figures for new member restaurants in the first quarter of the current fiscal year. Meanwhile, in October 2020 there were about 500 cases of irregular cancellations of the trial contract for large restaurant corporations, whose ARPU is lower than regular contracts, resulting in a member count of 9,399 restaurants as of the end of the second quarter of the current fiscal year. The Company waived a total of 24 million yen in monthly fees from some restaurants which were forced to remain closed during the state of emergency declared from January to March 2021.

The unit price of advertisement continued to decline since the declaration of the state of emergency in April 2020. While the number of users temporarily declined due to the impact of the state of emergency declared in January 2021, the user count is once again on a recovery trend in February and March 2021 after bottoming in January. In terms of expenses, measures to control various costs, including server expenses, were tightened further, facilitating optimized business efficiency. As a result, net sales totaled 989 million yen, cost of sales totaled 313 million yen, and the selling, general and administrative expenses were 719 million yen.

In addition, the Company posted non-operating expenses of 71 million yen due to the share issuance costs on issuing new shares for the listing of its stock on the Mothers section of the Tokyo Stock Exchange in October 2020 and allowance for doubtful accounts for loans to ZINEYOU, Inc., regarding which the Company made a timely disclosure on April 2, 2021, as well as interest expenses.

As a result of the above, the Company in the six months ended March 31, 2021 reported an operating loss of 43 million yen, an ordinary loss of 114 million yen, and a net loss of 115 million yen. The Company has a single business segment, which operates Retty business, a restaurant review service with reviewers using real names, and therefore it omits description of business by segment.

1. Explanation about Financial Position

1. Financial Position

(Assets)

Current assets at the end of the period under review increased by 1,027 million yen compared with the end of the previous fiscal year to 2,162 million yen. This was mainly due to an increase of 988 million yen in cash and deposits as a result of issuance of new shares due to the listing of its stock on the Mothers section of the Tokyo Stock Exchange in October 2020, the issuance of new shares in a third-party allotment to Daiwa Securities Co., Ltd. related to share sale in over-allotment, and bank borrowings. Non-current assets at the end of the period decreased by 44 million yen compared with the end of the previous fiscal year to 354 million yen. This was mainly due to a decrease of 39 million yen in the long-term prepaid expenses due to decreased long-term prepayment of sales fees to the Company's sales agents.

As a result of the above, total assets at the end of the period under review increased by 983 million yen compared with the end of the previous fiscal year to 2,517 million yen.

(Liabilities)

Current liabilities at the end of the period under review increased by 122 million yen compared with the end

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