WirelessGate : Consolidated Financial Results for the Fiscal Year Ended December 31, 2021 (Under Japanese GAAP)

HAMA NOBUHIRO

TAKANO HIROYUKI

March 24, 2022

March 24, 2022

-

Yes

Yes

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)

Company name:	WirelessGate, Inc.
Stock exchange listing:	Tokyo
Stock code:	9419	URL https://www.wirelessgate.co.jp/

February 14, 2022

Representative:

Representative Member of the Board and

CEO

Inquiries:

Corporate Officer, CFO and Head of Administration Department

TEL [phone]

Scheduled date of ordinary general meeting of shareholders:

Scheduled date to file Securities Report:

Scheduled date to commence dividend payments:

Preparation of supplementary material on financial results:

Holding of financial results meeting:

										(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	9,776		(9.0)	(283)		-		(337)		-			(388)		-
Year ended December 31, 2020	10,745		(5.2)	71		(26.2)		61		(8.1)			(139)		-
	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	(36.22)			-			(46.8)						(9.9)					(2.9)
Year ended December 31, 2020	(13.07)			-			(17.5)						1.6					0.7
(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				3,036					892					28.5							80.57
As of December 31, 2020				3,752					802					21.2							74.15
(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				297					234					657							1,360
Year ended December 31, 2020				239					(107)					(270)							1,148
2. Cash dividends
					Annual dividends per share				Total cash		Dividend payout		Ratio of dividends
															to net assets
	1st quarter-end	2nd quarter-end	3rd quarter-end	Fiscal year-end	Total		dividends (Total)	ratio (Consolidated)	(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)
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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

9,004

(7.9)

200

-

50

-

9

-

0.91

4. Notes

(1) Changes in significant subsidiaries during the year ended December 31, 2021

Yes

(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	10,779,774	shares	As of December 31, 2020	10,779,774	shares
Number of treasury shares at the end of the period
	As of December 31, 2021	53,000	shares	As of December 31, 2020	53,000	shares
Average number of shares during the period
	Year ended December 31, 2021	10,726,774	shares	Year ended December 31, 2020	10,649,816	shares

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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	1,148,460	1,360,954
Accounts receivable - trade	1,099,338	831,734
Merchandise	47,624	28,838
Advance payments to suppliers	397,517	6
Prepaid expenses	188,443	188,697
Income taxes receivable	-	1,098
Other	25,650	14,547
Allowance for doubtful accounts	(15,943)	(15,065)
Total current assets	2,891,091	2,410,811
Non-current assets
Property, plant and equipment
Buildings	28,906	26,390
Accumulated depreciation	(17,603)	(16,959)
Buildings, net	11,303	9,430
Other	351,966	281,449
Accumulated depreciation	(269,509)	(235,986)
Other, net	82,456	45,463
Total property, plant and equipment	93,759	54,894
Intangible assets	114,713	6,408
Investments and other assets
Investment securities	145,300	418,765
Long-term prepaid expenses	250,676	80,923
Insurance funds	203,216	-
Long-term accounts receivable - other	56,964	190,810
Deferred tax assets	30,877	31,335
Other	22,729	33,838
Allowance for doubtful accounts	(56,964)	(190,810)
Total investments and other assets	652,800	564,862
Total non-current assets	861,273	626,165
Total assets		3,752,365	3,036,977

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			(Thousands of yen)
		As of December 31, 2020	As of December 31, 2021
Liabilities
Current liabilities
Accounts payable - trade	1,239,777	908,991
Short-term borrowings	550,000	500,000
Current portion of long-term borrowings	364,968	100,008
Accounts payable - other	440,768	504,563
Current portion of bonds with share acquisition rights	60,000	-
Income taxes payable	36,841	-
Other	47,671	29,058
Total current liabilities	2,740,026	2,042,622
Non-current liabilities
Long-term borrowings	200,042	91,634
Asset retirement obligations	9,962	10,066
Total non-current liabilities	210,004	101,700
Total liabilities	2,950,031	2,144,322
Net assets
Shareholders' equity
Share capital	908,009	908,009
Capital surplus	787,727	1,245,157
Retained earnings	(772,681)	(1,161,224)
Treasury shares	(127,657)	(127,657)
Total shareholders' equity	795,398	864,285
Share acquisition rights	6,935	28,369
Total net assets	802,334	892,655
Total liabilities and net assets		3,752,365	3,036,977

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Consolidated statements of income and consolidated statements of comprehensive income

		(Thousands of yen)
	Fiscal year ended	Fiscal year ended
	December 31, 2020	December 31, 2021
Net sales	10,745,349	9,776,033
Cost of sales	7,283,225	6,111,562
Gross profit	3,462,123	3,664,470
Selling, general and administrative expenses	3,390,322	3,948,379
Operating profit (loss)	71,801	(283,909)
Non-operating income
Interest income	3	31
Gain on forfeiture of unclaimed dividends	1,125	-
Royalty income	7,585	1,001
Reversal of allowance for doubtful accounts	4,500	800
Other	1,190	642
Total non-operating income	14,404	2,475
Non-operating expenses
Interest expenses	4,494	7,263
Share of loss of entities accounted for using equity method	-	42,305
Amortization of long-term prepaid expenses	13,999	1,936
Share issuance costs	163	-
Loss on investments in investment partnerships	5,507	2,838
Loss on cancellation of insurance policies	-	1,759
Other	318	139
Total non-operating expenses	24,484	56,243
Ordinary profit (loss)	61,721	(337,677)
Extraordinary losses
Loss on retirement of non-current assets	0	1,359
Loss on valuation of investment securities	8,246	76,534
Impairment losses	191,684	6,778
Loss on business restructuring	79,970	-
Total extraordinary losses	279,901	84,672
Loss before income taxes	(218,179)	(422,350)
Income taxes - current	25,959	5,377
Income taxes - deferred	(4,959)	(457)
Total income taxes	20,999	4,919
Loss	(239,179)	(427,269)
Profit attributable to
Loss attributable to owners of parent	(139,186)	(388,543)
Loss attributable to non-controlling interests	(99,992)	(38,726)
Comprehensive income	(239,179)	(427,269)
Comprehensive income attributable to
Comprehensive income attributable to owners of parent	(139,186)	(388,543)
Comprehensive income attributable to non-controlling interests	(99,992)	(38,726)

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