Business results summary

Amount of Sales

1,473 One million yen

YoY change rate 30.2 % OFF

Operating income

△573 One million yen

YoY change rate -

Ordinary profit

△506 One million yen

YoY change rate -

Net income attributable to owners of parent company

△453 One million yen

YoY change rate -

Net income per share

△11.52 Yen

YoY change rate 31.0%

Business results

Based on our corporate philosophy of ``Achieving Bright Value - Providing solutions that do not overlook risks and opportunities hidden in records, and realizing fairness in the information society,'' our group uses our proprietary artificial intelligence (AI) engine. We utilize advanced information analysis technology using KIBIT to provide necessary and appropriate information in various fields such as our original business, international litigation support, fraud investigation, manufacturing, finance, retail, distribution, and medical fields. We are contributing to the realization of a fair world where people can meet each other and to solving social issues.

■The activity status of each business for the first quarter of the current consolidated cumulative period is as follows.
(AI solution business)
In the AI ​​drug discovery field within the life science AI field, during the first quarter of the current consolidated cumulative period, we made preparations to launch the “Drug Discovery AI Factory” (hereinafter referred to as DD-AIF) business (July 1). We started our business on the 2023th).
The most important issue in current drug development is that the use of AI in the target selection process, which is the most upstream stage of research, is not progressing. In the newly launched DD-AIF business, our drug discovery researchers will utilize our in-house developed AI engine and AI applications to support our customers' drug discovery research in the target selection process, where AI has not yet been utilized. We will provide new drug discovery support services that continuously provide analysis and proposals that contribute to efficiency, acceleration, and increased success rates. In addition, during the first quarter of the current consolidated cumulative period, our drug discovery researchers conducted research using FRONTEO's unique drug discovery technology method (hereinafter referred to as DD-BKM) at the annual meeting of the Japanese Society of Toxicology. The contents have been announced. The AI ​​analysis technology used in the presentation is a widely applicable approach, from searching for risk factors for the development of organ toxicity to generating important hypotheses in searching for highly novel therapeutic targets in drug discovery, and is useful in the target selection process. We believe this will be effective in promoting the use of AI. We will accelerate the promotion of the DD-AIF business by accurately capturing the needs of our customers, those involved in drug development, and continuously providing the necessary output.
Continuing on from this, in the field of AI medical devices, we are steadily progressing with the development of a program that uses conversational audio as input data (a program with an automatic voice transcription function) for the ``Conversational Dementia Diagnosis Support AI Program''. In parallel, we are also developing consumer products that utilize the high-quality data sets and development know-how collected during the development process. During the first quarter of the fiscal year under review, we participated in the event ``Town Veranda Health Room Cafe'' held in Nagareyama City, Chiba Prefecture, and provided general participants and elderly care professionals with a demonstration system of consumer products. Through research, development, and provision, we will contribute to solving medical and nursing care issues and improving the QOL (Quality of Life) of patients and the elderly.
Furthermore, development of other products such as the "Schizophrenia Diagnosis Support AI Program" and the "Depression Diagnosis Support AI Program" is progressing smoothly, and we will work to expand our development pipeline.

In the business intelligence field, sales for the first quarter of the current consolidated cumulative period got off to a solid start. We continue to see strong demand from last year as companies promote DX, and we believe that there is a particularly strong need for investment in compliance measures. Among these, the ordinary audit system “KIBIT Eye” announced in March 1 has contributed to consolidated sales in the first quarter of the current consolidated cumulative period, and currently has relationships with multiple companies. We are continuing discussions towards its introduction.
Additionally, during the first quarter of the current consolidated cumulative period, the KIBIT Knowledge Probe was utilized in the Koe-Katsu Project, which is promoted by Japan Post Holdings Co., Ltd. across all group companies, and efforts are being made to strengthen the governance system. We are making steady progress in social implementation of our AI, as we have announced case studies.
Furthermore, in terms of product development, the development and improvement of products such as "KIBIT WordSonar for VoiceView" and "KIBIT WordSonar for AccidentView" is progressing smoothly. We will promote our business by providing output that meets customer needs.

In the area of ​​economic security, amid growing concerns about the dual use of cutting-edge technologies and the presence or absence of human rights risks in supply chains, we are focusing on assessing the soundness of our company's and our business partners' supply chains, and implementing cutting-edge technologies. Both government agencies and private companies are becoming more interested in economic security, with countermeasures against information leaks becoming an urgent issue, and inquiries to our company are on the rise. During the first quarter of the current consolidated cumulative period, we are making progress toward full-scale business operations, such as obtaining a patent for vectorization technology for supply chain analysis AI solutions. We will continue to strive to expand our business by understanding the needs of each company in each location and providing accurate solutions.

As a result of the above, consolidated business results for the first quarter of the current fiscal year were as follows: net sales of 1 thousand yen (down 1,473,397% year-on-year), operating loss of 30.2 thousand yen (operating loss of 573,122 thousand yen for the same period of the previous year), ordinary loss of 167,629 thousand yen (ordinary loss of 506,572 thousand yen for the same period of the previous year), and net loss attributable to shareholders of the parent company of 101,909 thousand yen (net loss attributable to shareholders of the parent company of 453,078 thousand yen for the same period of the previous year). Net loss attributable to owners of the parent amounted to 345,460 thousand yen (compared with a net loss attributable to owners of the parent of 90,408 thousand yen in the same period of the previous fiscal year). In addition, an impairment loss of XNUMX thousand yen was recorded as an extraordinary loss due to the decision to suspend the future use of a portion of in-house software in the Legal Technologies AI business. Translated with DeepL.com (free version)

Financial situation summary

Total assets

9,014 One million yen

Compared to the end of the previous period 1.4 % OFF

Net worth

5,001 One million yen

Compared to the end of the previous period 0.9 % OFF

Capital adequacy ratio

53.1 %

Compared to the end of the previous period 0.0 points

Financial situation

(assets)
Total assets decreased by 131,213 yen compared to the end of the previous consolidated fiscal year, to 9,014,016 yen. Current assets decreased by 178,591 thousand yen compared to the end of the previous fiscal year to 3,484,547 thousand yen. This was mainly due to decreases in accounts receivable and contract assets of 360,375 thousand yen and accounts receivable - other by 63,100 thousand yen, although cash and deposits increased by 446,670 thousand yen.
Fixed assets increased by 47,377 thousand yen compared to the end of the previous consolidated fiscal year to 5,529,468 thousand yen. This was mainly due to an increase in goodwill of 90,408 thousand yen and customer-related assets of 65,227 thousand yen due to exchange rate effects, while software decreased by 56,700 thousand yen due to impairment accounting.

(liabilities)
Total liabilities decreased by 83,020 thousand yen compared to the end of the previous fiscal year, to 4,012,158 thousand yen.
Current liabilities increased by 302,305 thousand yen compared to the end of the previous fiscal year to 2,511,479 thousand yen. This was mainly due to an increase in short-term loans payable of 300,000 thousand yen due to borrowings.
Fixed liabilities decreased by 385,325 thousand yen compared to the end of the previous fiscal year to 1,500,678 thousand yen. This was mainly due to a decrease in long-term loans payable of 288,880 thousand yen due to transfer to current liabilities.

(Net assets)
Total net assets decreased by 48,193 thousand yen compared to the end of the previous fiscal year to 5,001,857 thousand yen. This was mainly due to the recording of a quarterly net loss attributable to owners of the parent company, while foreign currency translation adjustments increased due to the impact of the weaker yen.