Retty : Non-consolidated Financial Results for the Three Months Ended December 31 2021 Japanese GAAP

Non-consolidated Financial Results for the Three Months Ended December 31, 2021

		< Japanese GAAP>
			February 10, 2022
Company name:	Retty Inc.		Listing: Tokyo
Share code:	7356	URL http://corp.retty.me/
Representative: (Title)	CEO	(Name)Kazuya Takeda
Contact:	(Title)	Executive Officer in charge(Name)Yuzaburo Tsuchiya Phone: +81+3-6852-1002
		of corporate division
Scheduled date of filing		Scheduled date of
February 14, 2022	commencing dividend -
quarterly report
		payments

Preparation of supplementary materials for financial results: Yes Holding of financial results

presentation meeting: Yes

(for institutional investors and securities analysts)

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

1. Non-consolidated Financial Results for the Three Months Ended December 31, 2021(from October 1, 2021 to December 31, 2021)

(1)Result of operations								(Percentages indicate year-on-year changes.
	Net sales				Operating profit		Ordinary profit				Profit
	million yen		%		Million yen		%	Million yen			%		Million yen		%
Three months ended	428		(18.0)		(163)		-		(164)			-		(164)		-
December 31, 2021
Three months ended	521		-		(3)		-		(16)			-		(14)		-
December 31, 2020
	Basic earnings			Diluted
			earnings
	per share
					per share
				Yen					Yen
Three months ended	(14.07)					-
December 31, 2021
Three months ended			(1.31)					-
December 31, 2020
(2) Financial Conditions
	Total assets				Net assets							Equity ratio
				million yen				Million yen							%
As of December 31,						1,993					974							48.9
2021
As of September 30,						1,727					1,114							64.5
2021
							millio	As of							millio
Reference: Equity As of December 31, 2021		974n yen		September 30,	1,113n yen
										2021
2. Dividends
								Annual dividends
	First quarter-end		Second quarter-end	Third quarter-end		Fiscal year-end		Total
		Yen			Yen			Yen						Yen		Yen
As of September 30,	-			0.00			-					0.00			0.00
2021

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*Notes

(1) Use of special accounting methods for preparation of quarterly consolidated financial statements: Yes

(2) Changes in accounting policies and estimates, and retrospective restatement

(a) Changes due to revision of accounting standards: Yes

(b) Changes other than in (a): None

(c) Changes in accounting estimates: None

(d) Retrospective restatement: None

(3) Number of shares outstanding (common share)
(a) Shares outstanding at the end of
Three months	sh	As of September	sh
the period (including treasury	ended December	11,738,404ar	11,627,804ar
30, 2021
shares)	31, 2021	es	es
(b) Total number of treasury shares at	Three months	sh	As of September	sh
the end of the period	ended December	161ar	30, 2021	121ar
31, 2021	es	es
(c) Average number of shares	Three months	sh	Three months	sh
ended December	11,701,376ar	ended December	11,055,196ar
outstanding during the period
31, 2021	es	31, 2020	es

*These quarterly financial results are exempt from the audit procedure by certified public accountants or accounting firms.

*Cautionary statement regarding earnings forecast and special notes (Cautionary Statement with Respect to Forward-Looking Statements)

Forward looking statements including earnings forecasts in these materials are based on information available to the management at the time this report was prepared and assumptions that management believes are reasonable, and do 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 Materials -Table of Contents

1. Qualitative Information on Quarterly Financial Results for the Period under Review……………………………………………………………………………………

1. Explanation of Operating

Results……………………………………………………………………………………………

(2) Explanation of Financial

Position……………………………………………………………………………………………

1. Explanation of Non-consolidated Financial Results Forecast and Other Forward-looking Information ……………………………………………………………………

2. Quarterly Non-consolidated Financial Statements and Primary

Notes…………………………………………………………………………………………

1. Quarterly Non-consolidated Balance Sheet
   …………………………………………………………………………………………………
2. Quarterly Non-consolidated Statements of Income
   …………………………………………………………………………………………………
   (For the three months ended December 31)
   ………………………………………………………………………………………………
3. Notes to the Quarterly Non-consolidated Financial

Statements………………………………………………………………………………

(Notes to Going Concern Assumptions)

…………………………………………………………………………………

(Notes in the case of significant changes in shareholders' equity)…………………………………………………………

(Changes in accounting

policy)…………………………………………………………………………………………………

(Use of special accounting methods for preparation of quarterly consolidated financial statements)……………………………………………………………

(Segment Information, etc.) …………………………………………………………………………

………………………………………………………………………………………………

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1. Qualitative Information on Quarterly Financial Results for the Period under Review

1. Explanation of Operating Results

The Company's business environment continues to be affected by the new coronavirus infection (hereafter referred to as COVID-19). Although the lifting of the state of emergency declaration at the end of September 2021 has resulted in a certain recovery in customers visiting restaurants, the outlook remains unclear.Under these circumstances, the average number of new paying member restaurants per month for our Fan Relationship Management (FRM) service for the first quarter under review from October to December 2021 totaled 329. The result indicates that restaurants' appetite for sales promotions is still in the process of recovering due to the uncertainty of COVID-19's future, given that the average number of new paying member restaurants for the service is 500 per month in normal times. The number of member restaurants declined by 445 from the end of the previous fiscal year to 7,905 at the end of the first quarter under review due to irregular cancellations of the trial contracts for large corporations led by izakaya (Japanese-style dining bars) chain operators caused by restaurant closures. On the other hand, the number of member restaurants from the end of November to the end of December 2021 showed a net increase of approximately 45, due to the strong number of new paying member restaurants in December. This is the first time since December 2020 that the number of participating stores has increased on a monthly basis. The Company believes this indicates that, even under the impact of COVID-19, if a certain number of new member restaurants can be secured due to the lifting of the state-of-emergency declaration, etc., which improves the external environment and recovers the number of customers visiting restaurants, the overall number of member restaurants will also tend to increase along with it.

As for advertisement and contents, the impact of the decline of the advertisement unit price has continued since the declaration of the first state of emergency declaration in April 2020. Although the number of users has been recovering to a certain extent due to the lifting of the state of emergency declaration at the end of September 2021, it has not yet completely recovered compared to the figures prior to the impact of COVID-19.

As a result of the above, net sales for the first three months under review amounted to 428 million yen (down 18.0% year on year).

In terms of expenses, as a result of the recruitment of development personnel and sales personnel to strengthen the development structure and restaurant sales channels disclosed in the full-year financial results briefing materials for the fiscal year ended September 2021, cost of sales was 188 million yen (up 17.9% year on year), and selling, general and administrative expenses were 403 million yen (up 10.4% year on year).

In addition, non-operating income of 1 million yen (up 126.5% year-on-year) was recorded due to interest subsidy related to the new Corona Virus special loan, etc., and non-operating expenses of 1 million yen (down 87.6% year-on-year) were recorded due to interest expenses, etc.

As a result of the above, the Company, in the first three months ended December 31, 2021, reported an operating loss of 163 million yen (an operating loss of 3 million yen for the same period of the previous fiscal year), an ordinary loss of 164 million yen (an ordinary loss of 16 million yen for the same period of the previous fiscal year), and a net loss of 164 million yen (a net loss of 14 million yen for the same period of the previous fiscal year).

Segment information is omitted because the Company is engaged only in the operation of "Retty," a restaurant review platform service with reviewers using real names.

1. Explanation of Financial Position (Assets)
   Current assets at the end of the first quarter under review increased by 273 million yen compared with the end of the previous fiscal year to 1,696 million yen. This was mainly due to an increase of 396 million yen in cash and deposits due to the implementation of bank loans, a decrease of 58 million yen in prepaid expenses mainly reflecting a decrease in advance payments of sales commissions to sales agents, and a decrease of 50 million yen in accounts receivable. Non- current assets at the end of the first quarter under review decreased by 7 million yen compared with the end of the previous fiscal year to 297 million yen. This was mainly due to a decrease of 8 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, total assets at the end of the period under review increased by 266 million yen compared with the end of the previous fiscal year to 1,993 million yen.
   (Liabilities)
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