FY2021 2Q Financial Statement 2

FY2021 ２Q Report

Gala Inc. 2020/11/13 JQ: 4777 1 1. FY2021 2Q Financial Statement 2. Business Reports 3. Gala Group Organization

Unit：Million JPY

FY2021 2Q FY2020 2Q Change

Sales 155 96 61.5% Cost of sales 39 31 24.6% Gross profit 115 64 79.7% SGA 197 139 41.7% Operating profit △ 81 △ 74 - Ordinary profit △ 82 △ 80 - Net income attributed to Gala Inc. △ 83 △ 81 -

Unit：Million JPY Sales Gross profit 155 144 115 105 96 92 99 77 64 69

FY20/2Q FY20/3Q FY20/4Q FY21/1Q FY21/2Q FY20/2Q FY20/3Q FY20/4Q FY21/1Q FY21/2Q

Operating profit Net income attributed to Gala

△ 47 △ 74 △ 83 △ △ 70 △ 93 81 △ 81 △ 87 △ 83

△ 202

FY20/2Q FY20/3Q FY20/4Q FY21/1Q FY21/2Q FY20/2Q FY20/3Q FY20/4Q FY21/1Q FY21/2Q

Unit：Million JPY CF from Operating Activities CF from Investing Activities 13

△ 1 △ 1 △ △ 56 69 △ 89 △ 83 △ 77 △ 117 △ 130

FY19 Second Half FY20 Second Half FY21 FY19 Second Half FY20 Second Half FY21 First Half First Half First Half First Half First Half First Half

CF from Financing Activities Cash and Cash Equivalents 405

310 258 211 203 146 100 93 96

FY19 Second Half FY20 Second Half FY21 FY19 Second Half FY20 Second Half FY21 First Half First Half First Half First Half First Half First Half

Mobile PC Others Mobile Others 5 4 56 1 62 1 45 35 41

87 2 70 50 52 2 42 4 7 4 4 5 2 1 FY20/2Q FY20/3Q FY20/4Q FY21/1Q FY21/2Q FY20/2Q FY20/3Q FY20/4Q FY21/1Q FY21/2Q

In South Korea, sales from PC online games and smartphone apps increased during the second quarter due to the lockdown in many countries to prevent the spread of the COVID-19, whereas sales in Japan decreased because of the termination of the English version of "Arcane" due to the decrease in the number of users. © 2020 Gala Inc. All Rights Reserved. 6 1. FY2021 2Q Financial Statement Sales performance FY2020 2Q

Others 7%

PC Online Games 36% FY2021 2Q Sales 155,435,873 JPY Mobile Apps 56%

SGA Expenses Employees (Consolidated) Other Expenses HR Expenses Directors Employees

110 124

96 86 82 64 62 60 62 62 82 73 53 42 55 9 9 9 13 13 FY20/2Q FY20/3Q FY20/4Q FY21/1Q FY21/2Q FY20/2Q FY20/3Q FY20/4Q FY21/1Q FY21/2Q Unit: million JPY

SGA expenses increased due to an increase in software depreciation and HR expenses.

As of 2020/9/23 Rappelz Online and Flyff Online, developed by Gala Lab, are available on BORA ISLAND*, a blockchain platform using BORA Coin. Website：https://island.boraecosystem.com/

2020/9/23: Global Service relaunched on BORA Island Regions: North America・Europe (Preparing for other areas) Languages: English, French, German

2020/7/29: Rappelz Online published in Taiwan by Digeam Co. Ltd. Website: 9fo.digeam.com

Publishing regions: Korea, Russia, North America, Europe, Middle-East, Taiwan

SCHEDULE US service: FY2021 4Q EU service: FY2022 1Q Arabic version: FY2022 2Q

© 2020 Gala Inc. All Rights Reserved. 14 * Malaysia, Vietnam, Singapore, Indonesia, Thailand, Papa New Guinea, Philippines, New Zealand, Australia NEW! 2. Business Reports Rewarded Quiz App: Play to Learn Smartphone Apps Business Play to Earn

Downloads FY2021 2Q Downloads FY2021 2Q To be released in ~94,000 ~67,000 FY2021 3Q

The following activities are provided to MEGAZONE Japan, as a business alliance, for its expansion in Japan.

Gala Activities: 1. Customization and localization support of Megazone’s solutions for the Japanese market 2. Support for promotions and events in Japan 3. Resale of Japan's cloud service owned by Megazone (sales agency business) 4. Operation of Japanese customers, client support 5. Planning of new cloud-related business 6. Support for recruitment, HR, and accounting

Gala Inc. Group CEO: Satoru Kikugawa

*100% *80% *58.88% Gala Japan Gala Mix Gala Lab

VR & Cloud Business Smartphone Apps Smartphone & PC Games

*Percentage of Gala Inc.’ shares. To ensure clear responsibility, each CEO invested in his/her respective company.