BEENOS : Quarterly Securities Report for Q2 FY2024

[Cover]

[Documents to be submitted]	Quarterly Securities report
[Applicable provision]	Article 24-4-7, Paragraph 1 of the Financial Products and Exchange Act
[Submission destination]	Director-General of the Kanto Local
[Date of submission]	May 14, 2024
[Quarterly accounting period]	Second quarter of the 25th fiscal year (January 1, 2024 to March 31, 2024)
[Company name]	BEENOS Inc.
[English translation]	BEENOS Inc.
[Title and Name of	Shota Naoi, President and CEO
Representative]
[Location of the head office]	4-7-35 Kitashinagawa, Shinagawa-ku
[Phone number]	03 (5739) 3350 (Main)
[Name of administrative	Executive Officer Hisanori Matsuda
contact]
[Nearest Contact]	4-7-35 Kitashinagawa, Shinagawa-ku
[Phone number]	03(6859)3328
[Name of administrative	Executive Officer Hisanori Matsuda
contact]
[Place for public inspection]	Tokyo Stock Exchange
	(2-1 Nihonbashi Kabutocho, Chuo-ku, Tokyo)

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Part I [Corporate Information]

Section 1 [Overview of the Company]

1. Changes in Major Management Indicators

Turn			2Q FY2023	2Q FY2024	FY2023
			From October 1, 2022	From October 1, 2023	From October 1, 2022
Accounting period			to March 31, 2023	to March 31, 2024	to September 30, 2023
Net sales	(Millions	14,631	16,077	32,508
	of yen)
Ordinary income	(Millions	1,435	649	4,053
	of yen)
Net income attributable to	(Millions	819	229	2,198
owners of the parent		of yen)
Quarterly Comprehensive	(Millions
income or comprehensive	△3,990	384	△4,273
	of yen)
income
Net asset value	(Millions	13,919	13,186	13,010
	of yen)
Total assets	(Millions	28,814	29,500	27,911
	of yen)
Net income per share		(Yen)	66.17	18.94	180.76
Diluted net income per share		(Yen)	62.73	18.42	172.30
Capital adequacy ratio		(%)	47.6	44.0	45.8
Net cash provided by (used	(Millions
in) operating activities	655	2,033	2,988
	of yen)
Cash flow from investing	(Millions
activities	△294	△75	△726
	of yen)
Cash flow from financing	(Millions
activities	326	△643	△1,192
	of yen)
Cash and cash equivalents at	(Millions	10,615	12,578	11,233
the end of the quarter		of yen)
Turn			2Q FY2023	2Q FY2024
			From January 1, 2023	From January 1, 2024
Accounting period			to March 31, 2023	to March 31, 2024
Quarterly Net Income or Loss	(Yen)	33.88	16.78
(△) per share

(Note) As the Company prepares quarterly consolidated financial statements, changes in major management indicators, etc. of the submitting company are not stated.

2. Description of Business

There have been no significant changes in the contents of the business conducted by the Group (the Company and its affiliated companies) during the second quarter consolidated cumulative period. There have been no changes in major affiliated companies.

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Section 2 [Business Status]

1. Business and Other Risks

"During the six months ended March 31, 2024 there were no occurrences of matters that may have a significant impact on investors' decisions among the matters related to the status of business, accounting, etc. described in this quarterly report, or any significant changes in the" "Business and Other Risks" "described in the securities report for the previous business year."

2. Management's Analysis of Financial Position, Operating Results and Cash Flow

The forward-looking statements herein are based on the judgment of the Group (the Company and its consolidated

subsidiaries) as of the end of the second quarter of the current fiscal year.

(1) Business Performance Report

The BEENOS Group is committed to becoming a leader on the "Global Platform Frontier," setting new standards and unlocking possibilities by fusing people, products, and information with the global commerce market. This ambition is fueled by leveraging technological advancements and our comprehensive expertise in global commerce.

For this fiscal year, we are concentrating on tailored strategies for each of our business segments to attain our objectives. Our goal in Global Commerce is to broaden our distribution channels by enhancing the Buyee service with AI technology, reducing operational costs, and engaging in vigorous promotional efforts. Our focus in Entertainment is on boosting profit margins through the systematization and automation of operations.

Our intentions in Value Cycle were to increase profit margins by launching new purchasing outlets and employing data-driven strategies to buy and sell at optimal prices, but we have completed the transfer of shares for the 2 companies within this segment as announced in "Notice of Changes in Consolidated Subsidiaries (Share Transfer)" on 14 February 2024 and "(Progress of Disclosed Matters) Notice of Completion of Change in Consolidated Subsidiaries (Shares Transfer) and Forecast of Extraordinary Income" on 30 April 2024. The Value Cycle segment will be deconsolidated from the BEENOS Group after 2Q FY2024.

During FY2024 2Q, our E-commerce Business experienced notable growth across its segments. In Global Commerce, the implementation of cost-effective campaigns significantly increased total GMV and enhanced profit margins. The Value Cycle segment saw the opening of new purchasing stores coupled with improvements to gross profit margins. Meanwhile, the Entertainment segment increased its GMV through large scale events of the artists it supports while expanding its lineup of new artists on Groobee. In the Incubation business, although there were no sales of operating investment securities during this period, provisions and impairments

were recognized in response to changes in the valuation of these securities.

As a result, the consolidated GMV was 58,862 mil JPY (up 26.6% year on year), net sales were 16,077 mil JPY (up 9.9% year on year), operating income was 672 mil JPY (down 61.3% year on year), ordinary income was 649 mil JPY (down 54.7% year on year), and net income attributable to owners of parent was 229 mil JPY (down 72.0% year on year).

The achievements of each business segment are as follows.

1. E-CommerceBusiness

1. Global Commerce Business
   In the Overseas Forwarding and Proxy Purchasing Business (From Japan) via our Buyee platform, we

managed more cost-effective campaigns with precision, which significantly expanded our GMV and enhanced our profit margins from 1Q. The effectiveness of these campaigns was notably seen through discounts on product prices across various e-commerce sites and product categories with which we collaborate, playing a key role in broadening our distribution reach.

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In an effort to boost user convenience, we improved the Buyee's search capabilities using AI, in addition to

making UI/UX enhancements. Moreover, we took steps to lower operation costs and server expenses, aiming to operate with a heightened focus on maintaining a healthy operating profit margin in relation to GMV. Buyee Connect, the Cross Border EC support service that allows EC sites in Japan to enable overseas sales by adding tag lines, onboarded menswear brand, D'URBAN Official Online Store, operated by Oggi INTERNATIONAL Co., ltd. and apparel brand, louren Official Online Store, operated by aeka corporation.

In our Global Shopping Business (TO JAPAN), we expanded our product supply with the addition of products from Italy's eBay. We also aimed to expand distribution by enhancing marketing efforts, including campaigns for repeat customers and SEO strategies. However, the continued trend of a weaker yen affected our operations, leading to a sustained decrease in user demand.

As a result, GMV was 43,226 mil JPY (up 30.9% year on year), net sales were 6,938 mil JPY (up 16.3% year on year) and operating income was 2,076 mil JPY (up 5.5% year on year).

ii) Value Cycle Business

In the Apparel Reuse Business, focusing on the acquisition of high-priced items, such as luxury brand products, we further expanded our specialty purchase store "Brandear" by opening the "Jiyuugaoka Store" in March 2024. This new store increased our presence to 10 locations in the metropolitan area and 17 across Japan. The growth in repeat customers, spurred by effective marketing strategies like SEO and MEO, along with service improvements in-store, led to the highest quarterly purchase amount recorded so far.

On the sales front, leveraging the strong purchasing performance from last year, we engaged in vigorous sales activities, utilizing a rich inventory to boost sales revenue. Gross margin on operating profit improved QoQ in

2Q due to the adjustment of sale prices. Cutting costs in SG&A also contributed to the improvement of operating profitability.

In the Liquor Mediation Business, we opened the first JOYLAB store in Japan's northeastern region with the "JOYLAB Sendai Store" which brings the total number of stores to 10. The launch of diverse purchase campaigns aimed at boosting purchase volumes significantly increased the acquisition of pivotal products like domestic whiskey and wine, leading to a comprehensive enhancement in purchase volumes.

Sales-wise, whiskey and wine, which experienced strong purchasing, showcased excellent sales performance, bolstering overall results. Specifically, for domestic whiskey, despite market shifts caused by rising market prices, we achieved consistent sales by regularly adjusting our prices to ensure transactions were conducted at fair market values.

As a result, GMV was 8,267 mil JPY (up 17.7% year on year), net sales were 8,387 mil JPY (up 18.6% year on year) and operating losses were 63 mil JPY (operating income in 2Q FY2023 was 60 mil JPY).

As mentioned earlier, this segment will be deconsolidated after 2Q FY2024.

iii) Entertainment Business

In our Entertainment Business, strategically organized performances and seasonal events tailored for the artists we represent have seamlessly driven merchandise sales and CD distributions, resulting in an uplift in overall GMV.

Our entertainment industry-specific EC platform, Groobee, onboarded Sunarrow Co., Ltd.'s "Sunarrow Official Online Shop" in 2Q. As the platform welcomed more adopting companies, we have focused on enhancing systematization across various operational aspects to mitigate the internal workload associated with this expansion.

As a result, GMV was 7,071 mil JPY (up 19.4% year on year), net sales were 693 mil JPY (up 18.8% year on year) and operating losses were 35 mil JPY (operating losses in FY2023 2Q were 125 mil JPY).

For the E-Commerce Business as a whole, GMV was 58,541 mil JPY (up 27.4% year on year), net sales were 16,019 mil JPY (up 17.6% year on year) and operating income was 1,977 mil JPY (up 3.9% year on year).

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• Incubation Business

The Incubation Business booked 2 million JPY through dividends from its operational investment securities

but incurred impairment losses due to the devaluation of some of its investment securities.

As a result, net sales were 2 mil JPY (down 99.7% year on year) and operating losses were 244 mil JPY (operating income in FY2023 2Q was 736 mil JPY).

(iii) Other Businesses

In our Cross-BorderE-Commerce Support Business, we offer a comprehensive suite of one-stop services for Japanese companies aiming to penetrate major international marketplaces like "Shopee" and "eBay." Our offerings cover everything from store setup and customer support to international shipping and payment processing. GMV has decreased as some restrictions has been placed on the listing of certain product categories for a few of our foreign marketplaces.

In the domain of our SaaS-basedCross-Border HR Platform Business, we renewed the current function and added new features to "Linkus," a specialized skill support management system, to restaurant management

companies among others.

As a result, GMV was 408 mil JPY (down 44.5% year on year), net sales were 334 mil JPY (down 18.6% year on year) and operating losses were 520 mil JPY (operating losses in FY2023 2Q were 445 mil JPY).

1. Analysis of Financial Position
   (I) Assets
   Total assets at the end of the second quarter were 29.500 billion yen, an increase of 1.588 billion yen from the end of the previous fiscal year.
   The breakdown shows total current assets at 24.139 billion yen, an increase of 1.406 billion yen from the end of the previous fiscal year. This was mainly due to an increase of 1.425 billion yen in cash and deposits.
   Total fixed assets were 5.361 billion yen, an increase of 182 million yen from the end of the previous fiscal year. This was mainly due to an increase of 126 million yen in investment securities.

(ii) Liabilities

Total liabilities at the end of the second quarter of the fiscal year under review increased by 1.412 billion yen from the end of the previous fiscal year to 16.314 billion yen.

The breakdown shows total current liabilities at 15.691 billion yen, an increase of 1.63 billion yen from the end of the previous fiscal year. This was mainly due to an increase of 776 million yen in deposits received, 546 million yen in accounts payable-other, 492 million yen in Income taxes payable, and a decrease of 247 million yen in current portion of long-term loans payable.

On the other hand, total fixed liabilities were 623 million yen, a decrease of 218 million yen from the end of the previous fiscal year. This was mainly due to a decrease of 129 million yen in deferred tax liabilities and 100 million yen in long-term loans payable.

(iii) Net assets

Total net assets at the end of the second quarter of the current fiscal year increased by 176 million yen from the end of the previous fiscal year to 13.186 billion yen. This was mainly due to increases of 95 million yen in foreign currency translation adjustment and 60 million yen in valuation difference on securities-for-sale securities.

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(3) Status of cash flows

Cash and cash equivalents (hereinafter referred to as "Funds") at the end of the second quarter of the fiscal year under review were 12.578 billion yen, an increase of 1.345 billion yen from the end of the previous fiscal year.

The status of each cash flow and the factors thereof are as follows.

(Net cash provided by (used in) operating activities)

Net cash provided by operating activities amounted to 2.033 billion yen. The main factors for the increase were an increase in Deposits received of 776 million yen, a decrease in notes and accounts receivable - trade of 717 million yen, and Net Income or Loss (△) before income taxes of 659 million yen. The main factors for the decrease were an increase in accounts receivable - trade of 1.228 billion yen and Income taxes paid 607 million yen.

(Cash flow from investing activities)

Net cash used in investing activities was 75 million yen. The main factors for the decrease were 98 million yen for the acquisition of Intangible assets, 37 million yen for the acquisition of Tangible Assets, and 35 million yen for the acquisition of Investment securities. The main factor for the increase was 103 million yen in income from dividends from investment partnerships.

(Cash flow from financing activities)

Net cash used in financing activities was 643 million yen. The main factors for the decrease were repayment of Long-term loans payable of 347 million yen and Cash dividends paid 324 million yen.

(4) Management Policies and Strategies

There have been no significant changes in the Group's management policies and strategies for the second quarter of the current fiscal year.

(5) Business and financial challenges to be addressed

There have been no significant changes in the issues to be addressed by the Group during the second quarter consolidated cumulative period.

1. Research and Development Activities Not Applicable.
2. Number of employees

There have been no significant changes in the number of employees of the Group during the second quarter of the current consolidated cumulative period.

3. Important Management Contracts

At a board meeting held on February 14, 2024, the Company resolved to transfer all shares of Defactostandard, Ltd. and JOYLAB, Inc., consolidated subsidiaries of the Company, to AUCNET INC.. Based on this resolution, a share transfer agreement was concluded on the same day, and the transfer was completed on April 30, 2024.

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No. 3 [Status of Reporting Company]

1. Status of Shares, etc.

1. [Total Number of Shares]

1. [Total number of shares]

	Type		Total number of authorized shares (shares)
	Common stock				45,000,000
	Total				45,000,000
(ii) [Issued shares]
				Name of Listed
	Number of shares			Financial Products
	issued at the end of the	Number of shares	Exchange or Registered
Type	second quarter (March	issued as of the filing	Authorized Financial	Contents
31, 2024)	date (May 14, 2024)	Products Firms
				Association
				Tokyo Stock
Common stock	12,931,295	12,931,295	Exchange Prime	The number of shares
Market	per unit is 100 shares.
Total	12,931,295	12,931,295	-	-

"(Note) The" "Number of issued shares as of the submission date" "column does not include the number of shares issued through the exercise of Share subscription rights from May 1, 2024 to the submission date of this quarterly report."

1. [Status of Share subscription rights, etc.]

1. [Details of the stock option plan]

Not Applicable.

1. Status of Other Share subscription rights Not Applicable.

1. [Status of Exercise of Corporate Bonds with Share subscription rights Subject to Exercise Value Change, etc.] Not Applicable.
2. Changes in Total Number of Issued Shares and Capital stock

	Increase	Total number	Increase		Increase	Capital
	(decrease) in	Capital stock	(decrease) in	surplus
	of shares	(decrease) in
	number of	(Millions of	additional	(Millions of
Date	outstanding	Capital stock
shares issued	yen)	paid-in capital	yen)
		(million yen)
January 15, 2024	54,300	12,931,295	36	2,812	36	1,851
(Note)

(Note) This is due to the issuance of new shares as restricted stock compensation. Issue price: 1360 yen

Capitalization: 680 yen Allottee:

Directors of the Company (*): 3

Executive officers: 7

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Employee of the Company: 1

Directors of the Company's subsidiaries: 8

Executive officers of the Company's subsidiaries: 5

1. • Excluding directors who are members of the Audit and Supervisory Committee and outside directors
2. Status of Major Shareholders

As of March 31, 2024

			Ratio of the
			number of
			shares held to
		Number of	the total
The name of the applicant;	Address	shares held	number of
			issued shares
			(excluding
			Treasury
			Stocks) (%)
The Master Trust Bank of	1-8-1 Akasaka, Minato-ku, Tokyo	960,300	7.91
Japan, Ltd. (Trust Account)
AVI JAPAN OPPORTUNITY
TRUST PLC (Standing proxy:	BEAUFORT HOUSE EXETER EX4 4 ep
Settlement & Clearing Services	UNITED KINGDOM (15-1, Konan 2-	879,000	7.24
Department, Mizuho Bank,	chome, Minato-ku, Tokyo)
Ltd.)
BNYM AS AGT/CLTS NON	240 GREENWICH STREET, NEW
TREATY JASDEC (Standing	YORK, NEW YORK 10286 U.S.A. (2-7-1	672,082	5.54
proxy: MUFG Bank, Ltd.)	Marunouchi, Chiyoda-ku, Tokyo)
GOLDMAN, SACHS & CO.	200 WEST STREET NEW YORK, NY, USA
REG (Standing proxy:
(10-1, Roppongi 6-chome,Minato-ku,
Goldman Sachs Japan Co.,	617,639	5.09
Tokyo)
Ltd.)
GOLDMAN SACHS	PLUMTREE COURT, 25 SHOE LANE,
INTERNATIONAL (Standing
LONDON EC4A4AU, U.K. (10-1, Roppongi
proxy: Goldman Sachs Japan	472,927	3.90
6-chome,Minato-ku, Tokyo)
Co., Ltd.)
NORTHERN TRUST GLOBAL
SERVICES SE,	10 RUE DU CHATEAU D' EAUL-3364
LUXEMBOURG RE CLIENTS
LEUDELANGE GRANDDUCHY OF
NON-TREATY ACCOUNT
LUXEMBOURG 3-11-1 Nihombashi, Chuo-	440,000	3.62
(Standing proxy: The Hong
ku
Kong and Shanghai Banking
Corporation, Tokyo Branch)
BBH CO FOR GRANDEUR
PEAK GLOBAL	1290 n BROADWAY STE 1100 DENVER
CONTRARIAN FUND	COLORADO 80203 U.S.A. (7-1,	332,300	2.74
(Standing proxy: MUFG Bank,	Marunouchi 2-chome,Chiyoda-ku, Tokyo)
Ltd.)
INTERACTIVE BROKERS	ONE PICKWICK PLAZA GREENWICH,
LLC (standing proxy:
CONNECTICUT 06830 USA (3-2-5
Interactive Brokers Securities	300,406	2.47
Kasumigaseki, Chiyoda-ku, Tokyo)
Co., Ltd.)
Teruhide Sato	Singapore	281,800	2.32
MSIP CLIENT SECURITIES	25 CABOT SQUARE, CANARY WHARF,
(Standing proxy: Morgan
LONDON E14 4 qa, U.K. (1-9-7 Otemachi,
Stanley MUFG Securities Co.,	267,845	2.21
Chiyoda-ku, Tokyo)
Ltd.)
Total	-	5,224,299	43.03

(Notes) 1. In addition to the above, the Company holds 791,333 shares of Treasury Stock.

In the Change Report of the Report of Possession of Large Volume made available for public inspection on March 26, 2.2024, it is stated that VARECS Partners, Ltd. owns the following shares as of March 18,

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2024. However, since the Company is unable to confirm the actual number of shares owned as of March 31, 2024, they are not included in the above Status of Major Shareholders.

		Number	of	share
The name of the applicant;	Address	certificates, etc. held (total	Percentage of shares held
number) (shares, units)	(%)
	1-6-17			1,095,200
VARECS Partners, Ltd.	Nihonbashikayabacho,			8.47
	Chuo-ku

In the Change Report of the Report of Possession of Large Volume made available for public inspection on April 4, 3.2024, it is stated that Asset Value Investors Limited owned the following shares as of March 28, 2024. However, since the Company is unable to confirm the actual number of shares owned as of March 31, 2024, they are not included in the above Status of Major Shareholders.

		Number	of	share
The name of the applicant;	Address	certificates, etc. held (total	Percentage of shares held
number) (shares, units)	(%)
Asset Value Investors	2 Cavendish Square,			979,000	7.57
Limited	London, UK

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In the Change Report of the Report of Possession of Large Volume made available for public inspection as of April 4, 4.2024, it is stated that Nomura Securities Co., Ltd. and its joint holders, NOMURA INTERNATIONAL PLC and Nomura Asset Management Co., Ltd., own the following shares as of March 29, 2024. However, since the Company is unable to confirm the actual number of shares owned as of March 31, 2024, they are not included in the above Status of Major Shareholders.

		Number	of	share
The name of the applicant;	Address	certificates, etc. held (total	Percentage of shares held
number) (shares, units)	(%)
Nomura Securities Co.,	1-13-1 Nihonbashi, Chuo-			194,983	1.51
Ltd.	ku, Tokyo
NOMURA	1 Angel Lane, London
INTERNATIONAL PLC
EC4R 3AB, United			143,975	1.11
(Nomura International
Kingdom
PLC)
Nomura Asset	2-1, Toyosu 2-chome, Koto-			640,300	4.95
Management Co., Ltd.	ku, Tokyo

1. Status of voting rights

1. [Issued Shares]

As of March 31, 2024

Category

Number of shares

Number of voting rights

Contents

(shares)

Non-voting stock

-

-

-

Shares with restricted voting

-

-

-

rights (Treasury Stock, etc.)

Shares with restricted voting

-

-

-

rights (Other)

Shares with full voting rights

(Treasury Shares)

-

-

Common

(Treasury Stocks, etc.)

791,300

stock

Shares with full voting rights

Common

12,111,500

121,115

-

(Other)

stock

Fractional unit of shares

Common stock

28,495

-

-

Total number of issued shares

12,931,295

-

-

Voting

rights

of

all

-

121,115

-

shareholders

(ii) Treasury Stock, etc.

As of March 31, 2024

Ratio of the

Number of

number of

Number of

shares held to

shares held in

Total number

shares held in

other person's

the total

The name of the owner;

Owner Address

own name

of shares held

number of

(shares)

name

shares issued

(shares)

(%)

(Treasury Shares)

4-7-35 Kitashinagawa,

Shinagawa-ku

791,300

-

791,300

6.1

BEENOS Inc.

Total

-

791,300

-

791,300

6.1

2. Status of Directors

After the submission of the securities report for the previous business year, there have been no changes in officers

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