Exhibit 99.1

 

LEAD REAL ESTATE CO., LTD

 

INDEX TO CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
TABLE OF CONTENTS

 

CONTENTS   PAGE(S)
UNAUDITED CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF COMPREHENSIVE INCOME (LOSS)    
     
CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2024 (UNAUDITED) AND JUNE 30, 2024   F-2
     
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) FOR THE SIX MONTHS ENDED DECEMBER 31, 2024 AND 2023   F-3
     
NOTE 1 – REVISION OF UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME   F-4

 

F-1

 

 

LEAD REAL ESTATE CO., LTD

CONSOLIDATED BALANCE SHEETS

(Japanese yen in thousands, except share data)

 

   December 31,
202
4
   June 30,
2024
 
    (Unaudited)      
ASSETS          
Current assets:          
Cash and cash equivalents  ¥346,260   ¥1,300,684 
Accounts receivable, net   30,630    22,859 
Real estate inventory   11,686,479    9,267,825 
Contract assets   244,197    236,499 
Prepaid and other current assets   489,312    493,819 
Total current assets   12,796,878    11,321,686 
Property and equipment, net   6,655,037    5,449,101 
Intangible asset, net   44,593    54,138 
Investments in marketable securities   20,496    20,844 
Right-of-use assets, operating lease, net   181,593    154,613 
Investments   46,946    46,394 
Other assets   186,016    170,588 
Total assets  ¥19,931,559   ¥17,217,364 
LIABILITIES AND SHAREHOLDERS' EQUITY          
Current liabilities:          
Accounts payable  ¥709,231   ¥602,013 
Current portion of notes payable   10,054,610    6,815,181 
Contract liabilities   285,143    130,259 
Current portion of operating lease liabilities   91,360    67,938 
Accrued expenses and other current liabilities   192,810    356,856 
Total current liabilities   11,333,154    7,972,247 
Notes payable, net of current portion   4,601,919    4,598,151 
Deferred tax liabilities, net   75,610    85,018 
Operating lease liabilities, net of current portion   94,884    91,471 
Other liabilities   235,131    233,109 
Total liabilities   16,340,698    12,979,996 
COMMITMENTS AND CONTINGENCIES SHAREHOLDERS’ EQUITY          
Ordinary shares, 50,000,000 shares authorized, 15,628,000 shares issued and 13,641,900 shares outstanding as of June 30, 2025 and December 31, 2024, with no stated par value    1,206,765    1,206,765 
Retained earnings   2,514,576    3,159,815 
Treasury stock, at cost, 1,986,100 shares as of June 30, 2025 and December 31, 2024   (154,121)   (154,121)
Non-controlling interest   (8,058)   (7,558)
Accumulated translation gain   31,699    32,467 
Total shareholders' equity   3,590,861    4,237,368 
Total liabilities and shareholders' equity  ¥19,931,559   ¥17,217,364 

 

F-2

 

 

LEAD REAL ESTATE CO., LTD

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Japanese yen in thousands, except share and per share data)

 

   Six Months Ended December 31, 
   2024   2023 
       (Revised) 
Revenue:        
Real estate sales  ¥4,812,944   ¥6,438,863 
Other revenue   218,905    197,535 
Total revenue   5,031,849    6,636,398 
Expenses:          
Cost of sales - real estate   4,309,767    5,469,184 
Cost of sales - other   125,049    120,785 
Selling, general, and administrative   1,191,386    1,114,467 
Total expenses   5,626,202    6,704,436 
Operating loss   (594,353)   (68,038)
Other income (expense):          
Interest expenses   (23,301)   (10,008)
Other, net   (8,639)   199,970 
Total other income (expense), net   (31,940)   189,962 
Income before income taxes   (626,293)   121,924 
Income taxes   (21,980)   51,702 
Net income   (604,313)   70,222 
Net loss attributable to the noncontrolling interests   -    (219)
Net income (loss) attributable to ordinary shareholders   (604,313)   70,441 
Foreign currency translation loss   (276)   -
Total comprehensive income (loss)  ¥(604,589)  ¥70,441 
Earnings per share:          
Basic  ¥(44.32)  ¥5.16 
Diluted  ¥(44.32)  ¥5.16 
Weighted average shares outstanding:          
Basic   13,641,900    13,641,900 
Diluted   13,641,900    13,641,900 

 

See the accompanying Note 1 for the revised unaudited consolidated statement of comprehensive income.

 

F-3

 

 

1.            REVISION OF UNAUDITED CONSOLIDATED STATEMENT OF CONPREHENSIVE INCOME

 

Subsequent to the original issuance of the Company’s interim consolidated financial statements as of and for the six months ended December 31, 2023, the Company identified errors related to the accounting treatment of certain transactions. The Company concluded that the impact was not material to its interim consolidated financial information and has revised the impact of these errors. Corrections are made prospectively.

 

The revised financial information presented corrects the following errors:

 

(i) Revenue and cost of sales were understated due to not properly recognizing the revenue of a construction project and the related cost of sales. Certain payroll cost in selling, general and administrative expenses were reclassified as cost of sales due to the nature of the cost incurred directly related to construction.
(ii) Selling, general and administrative and other expenses were overstated due to errors in sales commission and valuation of investments in marketable securities.
(iii) Foreign currency translation loss was overstated due to calculation errors.

 

Each of the affected financial information line items has been corrected and are identified in the tables below.

 

   Six Months Ended December 31, 2023 
   As originally filed   Adjustments   As revised 
Revenue:            
Real estate sales  ¥6,411,863    27,000   ¥6,438,863 
Other revenue   197,535    -    197,535 
Total revenue   6,609,398    27,000    6,636,398 
Expenses:               
Cost of sales - real estate   5,419,874    49,310    5,469,184 
Cost of sales – other   120,785    -    120,785 
Selling, general, and administrative   1,115,915    (1,448)   1,114,467 
Total expenses   6,656,574    47,862    6,704,436 
Operating loss   (47,176)   (20,862)   (68,038)
Other income (expense):               
Interest expenses   (10,008)   -    (10,008)
Other, net   203,319    (3,349)   199,970 
Total other income, net   193,311    (3,349)   189,962 
Income before income taxes   146,135    (24,211)   121,924 
Income taxes   51,702    -    51,702 
Net income   94,433    (24,211)   70,222 
Net loss attributable to the noncontrolling interests   (219)   -    (219)
Net income attributable to ordinary shareholders   94,652    (24,211)   70,441 
Foreign currency translation loss   (2,990)   2,990    -
Total comprehensive income  ¥91,662    (21,221)  ¥70,441 
Earnings per share:               
Basic  ¥6.72    (1.56)  ¥5.16 
Diluted  ¥6.72    (1.56)  ¥5.16 
Weighted average shares outstanding:               
Basic   13,641,900    13,641,900    13,641,900 
Diluted   13,641,900    13,641,900    13,641,900 

 

F-4