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UNAUDITED INTERIM CONDENSED STATEMENTS OF OPERATIONS For the six monthsended October 31,2023 For the six monthsended October 31,2024 For the six monthsended October 31,2024 JPY JPY USD OPERATING REVENUES Software and system development services4,812,000 217,699,635 1,428,944 Consulting and solution services1,267,620 7,284,000 47,811 Sale of NFTs48,864,935 - - TOTAL OPERATING REVENUES54,944,555 224,983,635 1,476,755 COST OF REVENUES(3,336,792) (92,182,568) (605,071)GROSS PROFIT51,607,763 132,801,067 871,684 OPERATING EXPENSES: Selling and marketing expenses(27,077,415) (37,830,288) (248,312)General and administrative expenses(200,231,599) (176,938,483) (1,161,395)Share-based compensation expenses(1,616,463) - - Research and development expenses(44,821,606) (21,583,147) (141,668)TOTAL OPERATING EXPENSES(273,747,083) (236,351,918) (1,551,375)LOSS FROM OPERATIONS(222,139,320) (103,550,851) (679,691)Gain (loss) on digital assets, net(167,879) 81,900 538 Interest expenses, net(1,789,278) (1,184,561) (7,775)Foreign exchange gain (loss), net38,823,264 (6,768,200) (44,425)Government grants- 1,255,000 8,238 Other income, net129,617 1,100 7 LOSS BEFORE INCOME TAXES(185,143,596) (110,165,612) (723,108)Provision for income taxes Current- - - Deferred188,496 - - Total provision for income taxes188,496 - - NET LOSS(184,955,100) (110,165,612) (723,108) LOSS PER SHARE Basic(12.77) (7.31) (0.05)Diluted(12.77) (7.31) (0.05)WEIGHTED AVERAGE COMMON SHARES OUTSTANDING* Basic14,478,530 15,076,900 15,076,900 Diluted14,478,530 15,076,900 15,076,900 The accompanying notes are an integral part of these unaudited interim condensed financial statements.EARLYWORKS CO., LTD.
UNAUDITED INTERIM CONDENSED BALANCE SHEETS As of April 30,2024 As ofOctober 31,2024 As of October 31,2024 JPY JPY USD (Unaudited) (Unaudited) ASSETS CURRENT ASSETS: Cash 337,911,102 212,493,024 1,394,769 Time deposit 100,000,000 - - Digital assets 44,662 116,854 767 Accounts receivable, net 40,711,929 28,309,600 185,819 Contract assets 40,359,303 37,233,604 244,395 Prepayments 8,227,532 58,066,704 381,140 Short-term deposits 3,096,509 3,096,509 20,325 Income tax receivable 325 - - Other current assets, net 39,600 3 - TOTAL CURRENT ASSETS 530,390,962 339,316,298 2,227,215 Property and equipment, net 1,319,884 1,085,713 7,126 Operating lease right-of-use assets 11,711,000 7,607,963 49,937 Long-term deposits 657,740 657,740 4,317 Restricted cash 31,486,253 31,486,253 206,671 TOTAL ASSETS 575,565,839 380,153,967 2,495,266 LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES: Bank loans – current portion, net 119,189,500 15,807,000 103,755 Other payables and accrued liabilities 65,573,842 73,011,094 479,230 Operating lease liabilities, current 8,239,009 6,911,713 45,367 Contract liabilities - 2,404,025 15,780 Deferred income - 20,000,000 131,277 TOTAL CURRENT LIABILITIES 193,002,351 118,133,832 775,409 Bank loans – non-current, net 49,063,000 41,461,000 272,143 Operating lease liabilities, non-current 2,775,741 - - TOTAL LIABILITIES 244,841,092 159,594,832 1,047,552 COMMITMENTS AND CONTINGENCIES SHAREHOLDERS’ EQUITY: Ordinary shares, 55,300,000 shares authorized; 13,839,400 and 15,076,900 shares issued and outstanding as of April 30, 2023 and 2024 50,000,000 50,000,000 328,192 Additional paid-in capital 2,210,480,581 2,210,480,581 14,509,226 Accumulated deficit (1,929,755,834) (2,039,921,446) (13,389,704)TOTAL SHAREHOLDERS’ EQUITY 330,724,747 220,559,135 1,447,714 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 575,565,839 380,153,967 2,495,266 The accompanying notes are an integral part of these unaudited interim condensed financial statements.
The decrease in research and development expenses was primarily because the Company was dedicated to the research and development of GLS in the six-months ended October 31, 2023, which was a strategic decision made by the Company’s management to contribute to its future business.
