Earlyworks Co., Ltd. Reports Financial and Operational Performance for the Six Months Ended October 31, 2023
For the six months ended
Management Commentary
The six-month period ended
First, the Company achieved its initial public offering and listing on the NASDAQ in the six months ended
Second, the Company has been able to leverage its research and development achievements for business opportunities. In the 2023 fiscal year, the Company was dedicated to the research and development of its proprietary blockchain system (Grid Ledger System, hereinafter “GLS”). This was a strategic decision made by Company’s management to contribute to its future business. During the six months ended
Third, the Company has updated its revenue generation model. The Company’s previous model centered on securing system development contracts using blockchain technology. With the development of GLS, the Company has been able to provide decentralized blockchain solutions based on GLS. Large and venture companies in
Comparison Between the Six Months Ended
UNAUDITED INTERIM CONDENSED STATEMENTS OF OPERATIONS |
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For the six months ended 2022 |
For the six months ended 2023 |
For the six months ended 2023 |
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JPY | JPY | USD | ||||||||||
OPERATING REVENUES | ||||||||||||
Software and system development services | 11,358,517 | 4,812,000 | 31,771 | |||||||||
Consulting and solution services | 20,847,940 | 1,267,620 | 8,369 | |||||||||
Sale of NFTs | — | 48,864,935 | 322,626 | |||||||||
TOTAL OPERATING REVENUES | 32,206,457 | 54,944,555 | 362,766 | |||||||||
COST OF REVENUES | (20,229,847 | ) | (3,336,792 | ) | (22,031 | ) | ||||||
GROSS PROFIT | 11,976,610 | 51,607,763 | 340,735 | |||||||||
OPERATING EXPENSES: | ||||||||||||
Selling and marketing expenses | (11,366,838 | ) | (27,077,415 | ) | (178,776 | ) | ||||||
General and administrative expenses | (162,606,424 | ) | (200,231,599 | ) | (1,322,010 | ) | ||||||
Share-based compensation expenses | — | (1,616,463 | ) | (10,673 | ) | |||||||
Research and development expenses | (50,234,955 | ) | (44,821,606 | ) | (295,930 | ) | ||||||
TOTAL OPERATING EXPENSES | (224,208,217 | ) | (273,747,083 | ) | (1,807,389 | ) | ||||||
LOSS FROM OPERATIONS | (212,231,607 | ) | (222,139,320 | ) | (1,466,654 | ) | ||||||
Loss on digital assets | — | (167,879 | ) | (1,108 | ) | |||||||
Interest expenses, net | (700,617 | ) | (1,789,278 | ) | (11,814 | ) | ||||||
Foreign exchange gain, net | — | 38,823,264 | 256,327 | |||||||||
Other (expense) income, net | (213,799 | ) | 129,617 | 856 | ||||||||
LOSS BEFORE INCOME TAXES | (213,146,023 | ) | (185,143,596 | ) | (1,222,393 | ) | ||||||
Provision for income (tax) benefit | ||||||||||||
Current | (145,000 | ) | — | — | ||||||||
Deferred | (56,966 | ) | 188,496 | 1,245 | ||||||||
Total provision for income (tax) benefit | (201,966 | ) | 188,496 | 1,245 | ||||||||
NET LOSS | (213,347,989 | ) | (184,955,100 | ) | (1,221,148 | ) | ||||||
LOSS PER SHARE | ||||||||||||
Basic | (15.42 | ) | (12.77 | ) | (0.08 | ) | ||||||
Diluted | (15.42 | ) | (12.77 | ) | (0.08 | ) | ||||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING* | ||||||||||||
Basic | 13,839,400 | 14,478,530 | 14,478,530 | |||||||||
Diluted | 13,839,400 | 14,478,530 | 14,478,530 | |||||||||
The accompanying notes are an integral part of these unaudited interim condensed financial statements.
UNAUDITED INTERIM CONDENSED BALANCE SHEETS |
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As of 2023 |
As of 2023 |
As of 2023 |
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JPY | JPY | USD | ||||||||||
(Unaudited) | (Unaudited) | |||||||||||
ASSETS | ||||||||||||
CURRENT ASSETS | ||||||||||||
Cash | 177,886,393 | 701,384,530 | 4,630,824 | |||||||||
Digital assets | 750,307 | 465,464 | 3,073 | |||||||||
Accounts receivable, net | 30,934,916 | 10,986,371 | 72,536 | |||||||||
Prepayments | 2,591,297 | 24,329,264 | 160,632 | |||||||||
Short-term deposits | 3,096,509 | 3,096,509 | 20,444 | |||||||||
Income tax receivable | 19,147,994 | 9,635,241 | 63,616 | |||||||||
Other current assets, net | 275,577 | 2,226,920 | 14,703 | |||||||||
TOTAL CURRENT ASSETS | 234,682,993 | 752,124,299 | 4,965,828 | |||||||||
Property and equipment, net | 2,067,013 | 1,752,601 | 11,571 | |||||||||
Operating lease right-of-use assets | 3,467,368 | 15,781,366 | 104,195 | |||||||||
Deferred initial public offering (“IPO”) costs | 212,160,121 | — | — | |||||||||
Long-term deposits | 657,740 | 657,740 | 4,343 | |||||||||
TOTAL ASSETS | 453,035,235 | 770,316,006 | 5,085,937 | |||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||
CURRENT LIABILITIES: | ||||||||||||
Bank loans – current portion, net | 123,819,000 | 121,969,000 | 805,289 | |||||||||
Other payables and accrued liabilities | 47,250,464 | 95,948,571 | 633,491 | |||||||||
Operating lease liabilities, current | 3,467,368 | 8,173,403 | 53,964 | |||||||||
Income taxes payable | 145,000 | — | — | |||||||||
Contract liabilities | 1,397,470 | — | — | |||||||||
TOTAL CURRENT LIABILITIES | 176,079,302 | 226,090,974 | 1,492,744 | |||||||||
Bank loans – non-current, net | 68,252,500 | 57,268,000 | 378,106 | |||||||||
Operating lease liabilities, non-current | — | 6,911,713 | 45,634 | |||||||||
Deferred tax liabilities – non-current | 188,496 | — | — | |||||||||
TOTAL LIABILITIES | 244,520,298 | 290,270,687 | 1,916,484 | |||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||||
SHAREHOLDERS’ EQUITY: | ||||||||||||
Ordinary shares, 55,300,000 shares authorized; 13,839,400 and 15,039,400 shares issued and outstanding as of |
100,000,000 | 881,200,000 | 5,818,038 | |||||||||
Additional paid-in capital | 1,702,120,099 | 1,377,405,581 | 9,094,187 | |||||||||
Accumulated deficit | (1,593,605,162 | ) | (1,778,560,262 | ) | (11,742,772 | ) | ||||||
TOTAL SHAREHOLDERS’ EQUITY | 208,514,937 | 480,045,319 | 3,169,453 | |||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | 453,035,235 | 770,316,006 | 5,085,937 | |||||||||
Total revenue for the six months ended on
Cost of revenue decreased by approximately
Total operating expenses increased by approximately
As of
About
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Contact E-MAIL: ew-ir@e-arly.works
Forward-Looking Statements
Certain statements in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company’s current expectations and projections about future events that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. Investors can find many (but not all) of these statements by the use of words such as “approximates,” “believes,” “hopes,” “expects,” “anticipates,” “estimates,” “projects,” “intends,” “plans,” “will,” “would,” “should,” “could,” “may,” or other similar expressions. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company’s registration statement and other filings with the
Source: EARLYWORKS CO., LTD.