T Gaia : Full Version of Consolidated Financial Results for the Third Quarter of Fiscal Year Ending March 31, 2022

(Percentages represent year-over-yearchanges)

Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.

Consolidated Financial Results for the Third Quarter of Fiscal Year Ending March 31, 2022

(Nine Months Ended December 31, 2021) (Based on J-GAAP)

			February 2, 2022
Company name:	T-Gaia Corporation	Listing:	Tokyo Stock Exchange, First Section
Stock code:	3738	URL:	https://www.t-gaia.co.jp/
Representative:	Nobutaka Kanaji, President & CEO
Contact:	Kaoru Hayashi, Managing Officer & General Manager of Corporate Planning & Strategy Dept.
	Tel: [phone]
Scheduled date of filing Quarterly Securities Report: February 3, 2022
Scheduled commencement date of dividend payout: -

Quarterly financial results supplementary explanatory documents: Yes

Quarterly financial results presentation: None

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

1. Consolidated Financial Results for the Third Quarter of Fiscal Year Ending March 31, 2022 (April 1, 2021 - December 31, 2021)

(1) Consolidated results of operations (nine months)

	Net sales		Operating profit		Ordinary profit	Profit attributable to
			owners of parent
3Q FY 2022	Million yen		%	Million yen			%	Million yen		%	Million yen	%
339,744		17.4	7,202		(15.5)	10,881		(20.0)	7,649	(18.9)
3Q FY 2021	289,390		-	8,523			-	13,606		-	9,437	-
Note: Comprehensive	income (million	yen):	3Q FY	2022: 7,620 /		[(18.9)%]		3Q	FY 2021: 9,395 /	[-]
	Earnings per	Diluted earnings
	share	per share
3Q FY 2022		Yen		Yen
137.20		-
3Q FY 2021	169.33		-

Note 1: As the Accounting Standard for Revenue Recognition (Accounting Standards Board of Japan (ASBJ) Statement No. 29, March 31, 2020) and relevant revised ASBJ regulations have been applied from the beginning of the first quarter of FY 2022, the figures for the third quarter of FY 2021 are those after retrospectively applying the accounting standard and relevant revised ASBJ regulations. Therefore, year-over-year changes for the third quarter of FY 2021 are not shown.

Note 2: During the second quarter of FY 2022, the Company finalized the provisional accounting treatment for a business combination. As a result, the figures for the third quarter of FY 2021 reflect this finalization of the provisional accounting treatment.

(2) Consolidated financial position
	Total assets	Net assets		Equity ratio
3Q FY 2022	Million yen		Million yen		%
239,486		67,524		28.2
FY 2021	233,826		64,026		27.4
Reference: Shareholders'	equity (million yen): 3Q FY	2022: 67,490	FY 2021:	63,998

2. Dividends

			Annual dividends
	1Q-end	Interim	3Q-end		Year-end	Annual
FY 2021	Yen	Yen	Yen		Yen	Yen
-	37.50	-		37.50	75.00
FY 2022	-	37.50	-
FY 2022					37.50	75.00
(forecasts)
Note: Revisions to the dividend forecast most recently announced: None

3. Consolidated Forecasts for the Fiscal Year Ending March 31, 2022 (April 1, 2021 - March 31, 2022)

								(Percentages represent year-over-year changes)
	Net sales		Operating profit	Ordinary profit	Profit attributable to	Earnings per
		owners of parent	share
	Million yen		%	Million yen	%	Million yen	%	Million yen	%	Yen
Full year	453,000		7.1	13,400	(4.6)	18,400	(7.1)	12,000	(8.0)	215.30

Note 1: Revisions to the financial forecast most recently announced: None

Note 2: As the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020) and relevant revised ASBJ regulations have been applied from the beginning of the first quarter of FY 2022, the above consolidated forecasts are the amounts after applying the accounting standard and relevant revised ASBJ regulations. The percentage of year-over-year change in net sales was calculated as if the accounting standard and relevant revised ASBJ regulations had been applied in FY 2021.

Notes

1. Changes in significant subsidiaries during the period (nine months) under review (Changes in subsidiaries accompanying change in the scope of consolidation): None
2. Application of accounting procedures specific to creation of quarterly consolidated financial statements: None
3. Changes in accounting principles, estimates and restatements
4. 1. Changes in accounting principles caused by revision of accounting standards, etc.: Yes
   2. Changes in accounting principles other than those mentioned above: None
   3. Changes in accounting estimates: None
   4. Restatement: None

Note: For more details, please refer to "2. Quarterly Consolidated Financial Statements and Notes (3) Notes to quarterly consolidated financial statements (Changes in accounting principles)" on page 6.

(4) Number of shares issued and outstanding (shares of common stock)

1. Number of shares outstanding (including treasury shares) at the end of the period
2. Number of treasury shares at the end of the period
3. Average number of shares outstanding during the period nine months)

3Q FY 2022	56,074,000 shares	FY 2021	56,074,000 shares
3Q FY 2022	308,866 shares	FY 2021	338,866 shares
3Q FY 2022	55,753,571 shares	3Q FY 2021	55,733,864 shares

• Quarterly financial results reports are exempt from quarterly reviews conducted by certified public accountants or an audit corporation.
• Cautionary statement with respect to forward-looking statements

(Disclaimer on forward-looking statements, etc.)

These materials contain forward-looking information including earnings projections based on information currently available to the Company and certain assumptions considered reasonable in the judgment of the Company. Nothing contained in these materials is meant to suggest that the Company promises to attain the said projections. Moreover, due to various factors, actual results may materially differ from projections.

(Concerning quarterly financial results supplementary explanatory documents)

Financial results supplementary explanatory documents will be posted in Japanese on February 2, 2022.

• English version of financial results supplementary explanatory documents will be posted on the English site for Investors of T-Gaia Corporation within days.
• English account title is based on Account List available at website of Financial Service Agency.

T-Gaia Corporation (3738) / Consolidated Financial Results for the Third Quarter of Fiscal Year Ending March 31, 2022 (Nine Months Ended December 31, 2021) (Based on J-GAAP)

• Attachment: Table of Contents

1. Qualitative Information Concerning the Third Quarter Financial Results ..........................................................................................	2
(1)	Explanation of operating performance .........................................................................................................................................	2
(2)	Explanation of financial position..................................................................................................................................................	3
(3)	Explanation of forward-looking information including the consolidated financial forecasts .......................................................	3
2. Quarterly Consolidated Financial Statements and Notes ....................................................................................................................	4
(1)	Quarterly consolidated balance sheets ..........................................................................................................................................	4
(2)	Quarterly consolidated statements of income and quarterly consolidated statements of comprehensive income.........................	5
	(Quarterly consolidated statements of income)
	(Consolidated nine months period) .....................................................................................................................................	5
	(Quarterly consolidated statements of comprehensive income)
	(Consolidated nine months period) .....................................................................................................................................	5
(3)	Notes to quarterly consolidated financial statements....................................................................................................................	6
	(Notes on the going-concern assumption) ....................................................................................................................................	6
	(Notes on significant changes in shareholders' equity) ................................................................................................................	6
	(Changes in accounting principles) ..............................................................................................................................................	6
	(Segment information)..................................................................................................................................................................	6
	(Business combinations and relevant) ..........................................................................................................................................	7

- 1 -

T-Gaia Corporation (3738) / Consolidated Financial Results for the Third Quarter of Fiscal Year Ending March 31, 2022 (Nine Months Ended December 31, 2021) (Based on J-GAAP)

1. Qualitative Information Concerning the Third Quarter Financial Results

The Company has applied the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) and relevant revised ASBJ regulations from the beginning of the first quarter of the current fiscal year. As for applying the accounting standard and relevant revised ASBJ regulations, the Company, in accordance with the general rules for accounting treatment as set forth in paragraph 84 of the accounting standard, retrospectively applies the new accounting principles to all of the prior periods. Therefore, the Company compares its performance with the same period of the previous fiscal year and with the previous fiscal year and analyzes the data using the figures after applying the accounting standard and relevant revised ASBJ regulations.

Regarding the business combination with TF Mobile Solutions Corporation carried out on November 2, 2020 (it was absorbed through an absorption-type merger on February 1, 2021. Below, "TFM."), although a provisional accounting treatment was applied in the third quarter of the previous fiscal year, this was settled in the second quarter of the current fiscal year. Therefore, figures used in comparisons with the same period of the previous fiscal year and with the previous fiscal year and analysis are figures that have been revised following the settlement of this provisional accounting treatment.

1. Explanation of operating performance
   In the period under review (April to December 2021), although progress was made on vaccinations against the COVID-19 infection

and the declaration of a state of emergency was lifted in October 2021, the Japanese economy continued to face uncertain conditions. Looking forward, careful attention needs to be paid to factors including risks such as supply side limitations, trends in raw material and other prices, and the risk of an economic downturn at home and abroad due to the resurgence in infections, particularly of variant strains, as well as fluctuations in the financial and capital markets.

In the market for mobile phone handsets, which is the main business field of the Group (the Company, its consolidated subsidiaries, and its equity-method affiliates), the steady popularization of handsets compatible with 5G (5th-generation mobile communication system) has begun. On the other hand, the provision of online-only plans for service, which will not provide in-store assistance, started in March 2021, which has caused a dramatic change to the role of shops and the competitive environment. In the second quarter of the current fiscal year, commission terms and conditions for some telecommunications carriers were revised. Also, delays to the delivery of some products caused by a global supply shortage of semiconductors, etc., grew more severe.

Under this business environment, the Group's unit sales of mobile handsets, etc. (below, "unit sales") during the period under review jumped from the same period of the previous fiscal year to 3,030,000 as a result of the following factors.

1. The impact of shortened operating hours and suspensions of operations at carrier shops and some limits on services available (in response to a nationwide declaration of a state of emergency) in 1Q FY 2021 (April to June 2020)
2. The shift from 3G (3rd-generation mobile communication system) networks to 4G and 5G networks and increased competition among telecommunications carriers
3. An increase in the number of shops from making TFM a subsidiary in November 2020

On the other hand, in the period under review, growth in unit sales slowed due to factors such as handset supply shortages. Also, the revisions to commission terms and conditions for some telecommunications carriers as mentioned above and an increase in the ratio of sales of products other than main brand products led to a year-on-year decline in Group commission income.

As a result, consolidated business results for the period under review marked net sales of 339,744 million yen (+17.4% compared with the year-earlier period), with operating profit of 7,202 million yen (-15.5%). As a result of a significant year-on-year decrease in the recognized amount of income from hoarded cards, ordinary profit marked 10,881 million yen (-20.0%) and profit attributable to owners of parent posted 7,649 million yen (-18.9%).

Results by business segment for the period under review are described below.

				(Millions of yen)
	Consumer Mobile	Enterprise Solutions	Payment Service	Total
	Business and Other
	Business Segment	Business Segment
	Business Segment
Net sales	289,218	25,329	25,196	339,744
20.3%	14.1%	(5.6%)	17.4%
Profit attributable to	3,799	1,354	2,495	7,649
owners of parent	(17.4%)	(20.5%)	(20.3%)	(18.9%)
Supplementary	5,487	1,713	1	7,202
information -
(13.8%)	(24.4%)	-	(15.5%)
Operating profit (loss)

* Percentages refer to changes compared with the year-earlier period.

[Consumer Mobile Business Segment]

In Consumer Mobile Business Segment, although unit sales increased year on year as mentioned above, commission income declined due to factors such as revisions to commission terms and conditions.

In addition to selling handsets, shops are playing an important role in the area of offering value in the non-telecommunications field, which each telecommunications carrier is focusing on, such as content from various services and payment services using smartphones. Moreover, through such services as our on-site sales service, we have newly created opportunities for sales and service provision and are expanding our points of contact with customers. The period under review also saw the gradual emergence of effects including an improvement in operating profit compared to the second quarter of the current fiscal year as a result of factors such as increased sales of the Group's original products and enhanced productivity of shop operations.

At shops that were formerly directly managed by TFM, we integrated various internal systems and shop management systems in July 2021. We will continue to accelerate initiatives aiming at maximizing synergies.

Also, in the period under review, we closed or transferred ownership of unprofitable shops.

As a result, net sales marked 289,218 million yen (+20.3% compared with the year-earlier period), with profit attributable to owners of parent of 3,799 million yen (-17.4%).

- 2 -

T-Gaia Corporation (3738) / Consolidated Financial Results for the Third Quarter of Fiscal Year Ending March 31, 2022 (Nine Months Ended December 31, 2021) (Based on J-GAAP)

[Enterprise Solutions Business Segment]

In mobile solutions for enterprise clients' business, sales units jumped year on year due to the inclusion of the corporate sales channel of the former TFM. Although workstyle reforms are driving proactive ICT investment and demand for smart devices that can be used for remote work continues to flourish due to the impact of COVID-19 infections, delays to the delivery of some products caused by a global supply shortage of semiconductors, etc., grew more severe.

Selling, general and administrative expenses increased year on year due to staff expansion and system investments, etc. with the aim to expand business scale and improve productivity.

Under these conditions, the Group is expanding products and services for its Life Cycle Management operations revolving around administrative and support services for device life cycles spanning from procurement, propositions, and introduction support for smart devices including PCs, to building Wi-Fi environment, maintenance, operations, and updating services. Moreover, the Group continued to adapt to changes in the business environment, including by focusing on proposing the building, operation, maintenance, etc. of networks that use edge solutions.

In products related to fixed-line telecommunications, the Company has continued to work to improve the quality of support for resale wholesalers and clients for the Company's own "TG Hikari" fiber-optics access service, and to improve business efficiency and strengthen direct sales through the introduction of systems.

As a result, net sales marked 25,329 million yen (+14.1% compared with the year-earlier period), with profit attributable to owners of parent of 1,354 million yen (-20.5%).

[Payment Service Business and Other Business Segment]

In Payment Service Business and Other Business Segment, gift card transaction volumes were down compared with the same period of the previous fiscal year. The demand for a variety of digital content, including games, music, and video streaming, continued to gradually decline from an increase during the nationwide voluntary lockdown.

Sales in the wholesale of smartphone accessories mainly to convenience stores continued to be robust due to the expansion of sales channels and the broadening of the merchandise lineup, despite costs which were recorded in the first quarter, such as the cost of addressing mislabeling of the manufacturing country in some products.

With respect to other new business, we continued to work on such areas as the operation of ICT schools for children and the hosting of online events for the e-Sports business.

QUO CARD Co., Ltd., a consolidated subsidiary, saw a decline in the amount of issuance for QUO Card compared to the same period of the previous fiscal year, when there was the special demand, primarily from local governments and other organizations, in order to support healthcare workers. On the other hand, the number of member stores which accept QUO Card and QUO Card Pay steadily expanded.

As a result, net sales marked 25,196 million yen (-5.6% compared with the year-earlier period), with profit attributable to owners of parent of 2,495 million yen (-20.3%) due to the significant year-on-year decrease related to hoarded cards mentioned above.

1. Explanation of financial position (Assets)
   Current assets at the end of the period under review were 191,944 million yen, which was 8,332 million yen higher than at the end of the previous fiscal year. This was mainly due to a 1,518 million yen increase in merchandise, a 3,462 million yen increase in accounts receivable - other, a 7,570 million yen increase in guarantee deposits, and a 6,141 million yen decrease in notes and accounts receivable - trade. Non-current assets at the end of the period under review were 47,541 million yen, which was 2,672 million yen lower than at the end of the previous fiscal year. This was mainly due to a 958 million yen decrease in goodwill and a 1,793 million yen decrease in deferred tax assets.
   As a result, total assets posted 239,486 million yen, which was 5,659 million yen higher than at the end of the previous fiscal year.
   (Liabilities)
   Current liabilities at the end of the period under review were 162,520 million yen, which was 14,045 million yen higher than at the end of the previous fiscal year. This was mainly due to a 9,000 million yen increase in current portion of long-term borrowings and a 7,374 million yen increase in card deposits. Non-current liabilities at the end of the period under review were 9,442 million yen, which was 11,883 million yen lower than at the end of the previous fiscal year. This was mainly due to a 11,813 million yen decrease in long-term borrowings.
   As a result, total liabilities posted 171,962 million yen, which was 2,162 million yen higher than at the end of the previous fiscal year.
   (Net assets)
   Net assets at the end of the period under review were 67,524 million yen, which was 3,497 million yen higher than at the end of the previous fiscal year. This was mainly due to 7,649 million yen recognized in profit attributable to owners of parent and 4,181 million yen in payment of dividends of surplus.
2. Explanation of forward-looking information including the consolidated financial forecasts

Nine months (April to December 2021) net sales represent 75.0% of the full-year estimate, with percentages for operating profit, ordinary profit, and profit attributable to owners of parent at 53.7%, 59.1%, and 63.7%, respectively.

At present, the full-year consolidated financial forecasts remains unchanged from the forecasts announced on May 7, 2021. Going forward, any information that emerges which should be disclosed will be disclosed as appropriate.

- 3 -