Summary of Financial Results for First Quarter of Fiscal Year Ended December 31, 2024

KLab Inc. reports a significant downturn in financial performance for the first quarter of the fiscal year ending December 31, 2024. Revenue fell 45.3% year-over-year to 1,581 million yen, resulting in an operating loss of 658 million yen and a net loss attributable to owners of the parent of 1,096 million yen. This decline is primarily driven by the game business, where income from paid users dropped by nearly half compared to the previous year. Consequently, the company has withheld consolidated performance forecasts for the remainder of the year, citing the difficulty of making reasonable calculations.

The geographic scope of these results is centered on Japan, covering the three-month period from January 1 to March 31, 2024. A notable structural change occurred during this period as the company sold a portion of its shares in BLOCKSMITH&Co., leading to the exclusion of the blockchain-related business from its reported segments. To address liquidity needs, the company executed a third-party allotment of new stock acquisition rights and unsecured bonds in April 2024, aiming to raise approximately 2.9 billion yen.

Despite three consecutive years of operating deficits and negative cash flows, management maintains that there is no material uncertainty regarding the company's ability to continue as a going concern. The recovery strategy focuses on the development of high-profile titles, such as EA SPORTS FC™ TACTICAL and a project based on the My Hero Academia IP, alongside a shift toward hybrid casual games. Cost-reduction measures, including the rationalization of personnel and outsourcing expenses, are being implemented in tandem with the sale of investment securities to stabilize the financial base.