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, 2024 | 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