ULURU : Summary of Consolidated Financial Results for the Fiscal Year Ended March 31, 2022

May 13, 2022

Summary of Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 [Japanese GAAP]

Company name:	ULURU.CO., LTD.	Listing: Tokyo Stock Exchange
Stock code:	3979	URL: https://www.uluru.biz/
Representative:	Tomoya Hoshi, Representative Director and President
Contact:	Yasuaki Uchimaru, Executives Director, Co-CFO
	Tel: [phone]
Scheduled date of Annual General Meeting of Shareholders:	June 28, 2022

Scheduled date of payment of dividend:

Scheduled date of filing of Annual Securities Report: Preparation of supplementary materials for financial results: Holding of financial results meeting:

-

June 29, 2022

Yes

Yes (for institutional investors and analysts) *Individual investors can watch the meeting online

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

1. Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 (April 1, 2021 - March 31, 2022)

(1) Consolidated operating results							(Percentages represent year-on-year changes)
	Net sales	EBITDA*	Operating profit		Ordinary profit		Profit attributable
			to owners of
													parent
	Million yen		%	Million yen	%	Million yen		%		Million yen	%		Million yen		%
Fiscal year ended Mar. 31, 2022	4,029		25.1	(164)	-	(241)		-		(251)	-	(64)		-
Fiscal year ended Mar. 31, 2021	3,219		29.8	185	-	135		-		148	-	42		-
*EBITDA = Operating profit +	Depreciation + Amortization of goodwill
Note: Comprehensive income (million yen)			Fiscal year ended Mar. 31, 2022:(64)	(-%)
				Fiscal year ended Mar. 31, 2021:	44		(-%)
	Net income per	Diluted net income	Return on equity	Ordinary profit to		Operating profit
	share	per share					total assets		to net sales
			Yen		Yen			%			%				%
Fiscal year ended Mar. 31, 2022		(9.37)		-	(3.0)			(5.9)		(6.0)
Fiscal year ended Mar. 31, 2021		6.17		6.10			1.9			3.8				4.2
Reference: Equity in earnings of	affiliates (million yen) Fiscal year ended Mar. 31, 2022: -	Fiscal year ended Mar. 31, 2021: -

Note: ULURU conducted a 2-for-1 common stock split on October 1, 2021. Net income per share and diluted net income per share have been calculated as if this stock split has taken place at the beginning of the fiscal year ended March 31, 2021.

Note: Diluted net income per share for the fiscal year ended March 31, 2022 is not presented because net loss was posted although there were outstanding dilutive shares.

(2) Consolidated financial position

	Total assets	Net assets	Equity ratio	Net assets per share
	Million yen	Million yen	%	Yen
As of Mar. 31, 2022	4,338	2,128	49.1	308.12
As of Mar. 31, 2021	4,198	2,208	52.6	322.36

Reference: Shareholders' equity (million yen) As of Mar. 31, 2022: 2,128 As of Mar. 31, 2021: 2,208

Note: ULURU conducted a 2-for-1 common stock split on October 1, 2021. Net income per share has been calculated as if this stock split has taken place at the beginning of the fiscal year ended March 31, 2021.

(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
	Million yen	Million yen	Million yen	Million yen
Fiscal year ended Mar. 31, 2022	(30)	(416)	(39)	2,805
Fiscal year ended Mar. 31, 2021	701	(196)	(78)	3,291

2. Dividends

		Dividend per share				Total	Payout ratio		Dividend on
									net assets
	1Q-end	2Q-end	3Q-end	Year-end	Total		dividends	(consolidated)
		(consolidated)
	Yen	Yen	Yen		Yen	Yen		Million yen	%	%
Fiscal year ended Mar. 31, 2021	-	0.00	-		0.00	0.00	-	-	-
Fiscal year ended Mar. 31, 2022	-	0.00	-		0.00	0.00	-	-	-
Fiscal year ending Mar. 31, 2023	-	0.00	-		0.00	0.00			-
(forecast)

3. Consolidated Earnings Forecasts for the Fiscal Year Ending March 31, 2023 (April 1, 2022 - March 31, 2023)

(Percentages represent year-on-year changes)

	Net sales		EBITDA		Operating profit	Ordinary profit	Profit attributable	Net income
			to owners of parent	per share
	Million yen	%	Million yen	%	Million yen	%	Million yen	%	Million yen	%	Yen
Full year	4,850	20.4	50	-	(50)	-	(60)	-	(90)	-	(13.09)

Note: There is no first half forecast.

(Percentages represent year-on-yearchanges)

* Notes

1. Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes in scope of consolidation): None
2. Changes in accounting policies and accounting-based estimates, and restatements
3. 1. Changes in accounting policies due to revisions in accounting standards, others: Yes
   2. Changes in accounting policies other than 1) above: None
   3. Changes in accounting-based estimates: None
   4. Restatements: None
4. Number of issued shares (common stock)
5. 1. Number of shares issued at the end of period (including treasury shares)

As of Mar. 31, 2022:	6,908,000 shares	As of Mar. 31, 2021:	6,851,000 shares
2) Number of treasury shares at the end of period
As of Mar. 31, 2022:	256 shares	As of Mar. 31, 2021:	256 shares
3) Average number of shares during the period
Fiscal year ended Mar. 31, 2022:	6,876,330 shares	Fiscal year ended Mar. 31, 2021:	6,843,111 shares

Note: ULURU conducted a 2-for-1 common stock split on October 1, 2021. The number of shares issued at the end of period, number of treasury shares at the end of period and average number of shares during the period have been calculated as if this stock split has taken place at the beginning of the fiscal year ended March 31, 2021.

Reference: Summary of Non-consolidated Financial Results

1. Non-consolidated Financial Results for the Fiscal Year Ended March 31, 2022 (April 1, 2021 - March 31, 2022)

(1) Non-consolidated operating results

	Net sales	EBITDA		Operating profit	Ordinary profit	Profit
	Million yen	%	Million yen		%	Million yen	%	Million yen	%	Million yen	%
Fiscal year ended Mar. 31, 2022	2,857	28.6	(104)		-	(121)	-	(141)	-	61	164.5
Fiscal year ended Mar. 31, 2021	2,222	35.6		87		-	70	-	80	-	23	-
	Net income per share	Diluted net income per share
			Yen					Yen
Fiscal year ended Mar. 31, 2022			8.88					8.83
Fiscal year ended Mar. 31, 2021			3.37					3.34

Note: ULURU conducted a 2-for-1 common stock split on October 1, 2021. Net income per share and diluted net income per share have been calculated as if this stock split has taken place at the beginning of the fiscal year ended March 31, 2021.

(2) Non-consolidated financial position

	Total assets	Net assets	Equity ratio		Net assets per share
	Million yen	Million yen		%		Yen
As of Mar. 31, 2022	3,982	2,023		50.8		292.98
As of Mar. 31, 2021	3,617	1,958		54.1		285.84
Reference: Shareholders' equity	(million yen)	As of Mar. 31, 2022:	2,023	As of	Mar. 31, 2021:	1,958

Note: ULURU conducted a 2-for-1 common stock split on October 1, 2021. Net assets per share have been calculated as if this stock split has taken place at the beginning of the fiscal year ended March 31, 2021.

• The current financial report is not subject to audit by certified public accountants or auditing firms.
• Explanation of appropriate use of earnings forecasts, and other special items Note concerning forward-looking statements
  Forecasts of future performance in this report are based on assumptions judged to be valid and information available to the ULURU's management at the time the materials were prepared but are not promises by ULURU regarding future performance. Actual results may differ significantly from these forecasts for a number of reasons. Please refer to "1. Overview of Results of Operations, (4) Outlook" on page 5 for forecast assumptions and notes of caution for usage.
  How to view supplementary information at the financial results meeting
  ULURU plans to hold an information meeting for institutional investors and analysts on May 16, 2022. Individual investors can use the internet to view this meeting.
  Materials used at this meeting were posted on the ULURU website and TDnet on the same day that fiscal year results of operations were announced. ULURU plans to post a video and audio file of the information meeting on its website soon after this meeting.

		ULURU.CO.,LTD. (3979) Financial Results for FY3/22
Contents of Attachments
1. Overview of Results of Operations	2
(1)	Results of Operations	2
(2)	Financial Position	5
(3)	Cash Flows	5
(4)	Outlook	6
2. Basic Approach to the Selection of Accounting Standards	6
3. Consolidated Financial Statements and Notes	7
(1)	Consolidated Balance Sheet	7
(2)	Consolidated Statements of Income and Comprehensive Income	9
	Consolidated Statement of Income	9
	Consolidated Statement of Comprehensive Income	10
(3)	Consolidated Statement of Changes in Equity	11
(4)	Consolidated Statement of Cash Flows	13
(5)	Notes to Consolidated Financial Statements	14
	Going Concern Assumption	14
	Changes in Accounting Policies	14
	Reclassifications	14
	Additional Information	15
	Segment and Other Information	15
	Per Share Information	17
	Subsequent Events	17

1

ULURU.CO.,LTD. (3979) Financial Results for FY3/22

1. Overview of Results of Operations

(1) Results of Operations

Japan's working age population is forecast to decrease by about 16 million between 2017 and 2040 according to the 2018 White Paper on Information and Communications in Japan. This outlook points to serious social and economic issues as a labor shortage reduces the size of the economy and makes Japan less competitive in global markets. The ULURU Group has many activities centered on the software-as-a-service (SaaS) model for providing alternative solutions for labor shortages in a broad range of fields.

In April 2002, we announced the new corporate vision of "Solve the labor shortage and enrich people and companies." We are reaffirming our commitment to becoming a "leading company for labor shortage solutions" as we work even harder at taking actions that target these social issues.

In November 2003, we started the Business Process Outsourcing (BPO) business to meet the outsourcing needs of companies with the goal of establishing the standard for employees working at home rather than the company's workplace. The diversity of our customers' needs increased along with the volume of orders we received. We responded by launching a crowdsourcing business called Shufti in February 2007. Shufti increases the efficiency of the BPO business by facilitating direct matching of the requirements of client companies and the availability of crowdworkers, chiefly housewives, without using the ULURU Group. In addition, we used knowledge acquired from BPO operations and the resources of the crowdsourcing business to start the Crowd Generated Service (CGS) business, which allows the ULURU Group itself to utilize crowdworkers. In September 2008, we started the NJSS (Nyusatsu Joho Sokuho Service) business, an up-to-date and other bid solicitations database service about bids and winning bids for public-sector tenders in Japan. This business currently accounts for the majority of our sales and earnings. In October 2014, we launched en-photo, a photo sales management system for nursery schools and kindergartens. In February 2019, we started the fondesk, a telephone call answering service that uses crowdworkers. To benefit from synergies with en-photo, we made OurPhoto Co., Ltd. a wholly owned subsidiary in December 2020. This company operates a matching service for its members and professional photographers. These operations are the current business portfolio of the ULURU Group.

NJSS, fondesk and en-photo are all SaaS operations, which makes the SaaS category the basis for the growth of the ULURU Group. Japan's SaaS market was 601.6 billion yen in fiscal 2019 and is expected to grow to 1,117.8 billion yen in fiscal 2024 according to "Software Business New Markets 2020" by Fuji Chimera Research Institute, Inc.

The business climate was consistently uncertain during the fiscal year that ended in March 2022 because of COVID-19. During this period, the ULURU Group continued to make progress with numerous initiatives for accomplishing the three medium-term goals of the medium-term business plan for the five-year period ending in March 2024 that was announced on May 14, 2019 and revised on May 14, 2021.

During the fiscal year that ended in March 2022, net sales increased 25.1% year-on-year to 4,029 million yen, EBITDA (Operating profit + Depreciation + Amortization of goodwill) was a loss of 164 million yen compared with a profit of 185 million yen one year earlier, operating loss was 241 million yen compared with a profit of 135 million yen one year earlier, ordinary loss was 251 million yen compared with a profit of 148 million yen one year earlier, and the loss attributable to owners of parent was 64 million yen compared with a profit of 42 million yen one year earlier. Total annual recurring revenue (ARR) increased to about 3,000 million yen. This is the sum of revenue for NJSS, en-photo and fondesk, which all use a SaaS business model.

Differences between results of operations and the initial forecasts announced on May 14, 2021 for the fiscal year that ended in March 2022 are as follows.

			(Millions of yen)
	FY3/22	FY3/22	Difference using initial
	(Initial forecasts)	(Results)	forecasts (%)
Net sales	3,900	4,029	103.3
EBITDA	(250)	(164)	-
Operating profit	(340)	(241)	-
Ordinary profit	(340)	(251)	-
Profit attributable to owners of parent	(380)	(64)	-

2

ULURU.CO.,LTD. (3979) Financial Results for FY3/22

ULURU has applied the Accounting Standard for Revenue Recognition (Accounting Standards Board of Japan (ASBJ) Statement No. 29, March 31, 2020) from the beginning of the current fiscal year. Please refer to "3. Consolidated Financial Statements and Notes, (5) Notes to Consolidated Financial Statements, Changes in Accounting Policies" for the effects of the application of the new standard on financial position and operating results.

Business segment sales were as follows.

(Millions of yen)

	FY3/21		FY3/22		YoY change in
Segment	(Apr. 1, 2020 - Mar. 31, 2021)	(Apr. 1, 2021 - Mar. 31, 2022)
net sales (%)
	Net sales		Comp. (%)	Net sales		Comp. (%)
CGS Business	2,202		68.4	2,917		72.4	32.5
NJSS	1,645		51.1	1,997		49.6	21.4
fondesk	280		8.7	454		11.3	62.3
Photo	267		8.3	465		11.5	73.8
Others	9		0.3	-		-	-
BPO Business	986		30.6	1,081		26.8	9.6
Crowdsourcing Business	30		1.0	30		0.7	(2.9)
Total	3,219		100.0	4,029		100.0	25.1

1) CGS NJSS

NJSS is the primary SaaS of the CGS business. We have been taking many actions with the goal of achieving consistent sales growth for many years by optimizing average revenue per user (ARPU; average daily sales per user) and the number of customers who have purchased contracts with fees . Although there was a small decrease in ARPU to 1,213 yen, these activities raised the number of customers who have purchased contracts from 744 at the end of March 2021 to 4,704 at the end of March 2022. This growth was the result of a steady increase in the number of new contracts while using the optimization of sales processes and other steps to hold down contract cancelations.

In addition, due to an improvement in customer success, the average churn rate during the past 12 months based on fee-paying contracts was 1.5% compared with an average of 1.7% for the year that ended in March 2021 and annual recurring revenue (ARR) increased to more than 2,000 million yen.

Consequently, NJSS sales increased 21.4% to 1,997 million yen, EBITDA was down 6.0% to 703 million yen and segment profit was down 6.3% to 696 million yen.

NJSS KPI			FY3/21				FY3/22
	1Q	2Q		3Q	4Q	1Q	2Q		3Q	4Q
Fee-paying contracts		3,395	3,571		3,749	3,960	4,139	4,388		4,480	4,704
ARPU (Yen)		1,187	1,206		1,220	1,223	1,226	1,199		1,232	1,213
Churn rate (%)		2.0	2.0		1.9	1.7	1.6	1.5		1.5	1.5
LTV (Thousands of yen)	1,594	1,695		1,748	1,917	2,153	2,229		2,337	2,220
ARR (Millions of yen)		1,467	1,585		1,684	1,744	1,848	1,936		2,032	2,055
Notes: 1. ARPU:	Daily sales per fee-paying contracts

2. Churn rate: Ratio of cancellations during a month to the number of fee-paying contracts at the end of the previous month; 12-month averages are shown in this table.

3. LTV:	ARPU × (1/Churn rate) × Gross profit margin of 90%
4. ARR:	Quarterly subscription sales multiplied by four

2) CGS fondesk

In the CGS business, there was an increase in expenses in the fondesk SaaS business because of expenditures for marketing and other activities to generate growth. The performance of fondesk benefited from the increasing awareness of this service as a method for supporting the digital transformation of back office tasks, which is needed due to the growth of remote work during the pandemic. By successfully targeting the demand for this support, fondesk consistently increased the number of fee-paying contracts. The result was 3,315 contracts at the end of March 2022, 1,085 more than at the end of March 2021. There were also numerous measures for more convenience for users, such as a system upgrade for an improved UI/UX. Due to these measures, the average churn rate during

3