Interim report
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Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31 , 2027 August 5 , 2026 The financial statements herein have been prepared in accordance with accounting principles and practices widely accepted in Japan , and are for reference purposes only . MEDIPAL HOLDINGS CORPORATION Stock exchange listing : Tokyo Stock Exchange Stock exchange code : 7459 Website : https://www.medipal.co.jp/english/ Representative : Shuichi Watanabe , Representative Director , President and CEO Contact : Toshiyuki Ikeuchi , Executive Officer , Head of Corporate Communications Department Telephone : + 81-3-3517-5171 Start of distribution of dividends ( scheduled ) : Supplementary materials for the financial statements : Yes Presentation to explain the financial statements : No ( All amounts are rounded down to the nearest million yen . ) 1. Consolidated Financial Results for the First Quarter of the Fiscal Year Ending March 31 , 2027 ( April 1 , 2026 , to June 30 , 2026 ) ( 1 ) Sales and Profits ( The year - on - year change refers to the same period of the previous fiscal year . ) Net sales ( Millions of yen ) Year - on- year change ( % ) Operating profit ( Millions of yen ) Year - on- year change ( % ) Ordinary Year - on- profit ( Millions of yen ) year change ( % ) Profit attributable to owners of parent Year - on- year change ( % ) Three months ended June 30 , 989,503 4.7 13,386 ( 4.7 ) 17,919 ( 1.7 ) 13,646 42.3 2026 Three months ended June 30 , 945,159 3.9 14,053 5.8 18,234 7.8 9,586 6.4 2025 Note : Comprehensive income decreased by 40.1 % year on year to ¥ 5,870 million in the three months ended June 30 , 2026 , and by 35.1 % year on year to ¥ 9,804 million in the three months ended June 30 , 2025 . Three months ended June 30 , 2026 Three months ended June 30 , 2025 ( 2 ) Financial Position Earnings per share ( Yen ) Earnings per share ( diluted ) ( Yen ) 66.67 46.17 As of June 30 , 2026 As of March 31 , 2026 Total assets ( Millions of yen ) 1,937,423 1,924,086 Net assets ( Millions of yen ) Net worth ratio * ( % ) Net assets per share ( Yen ) 3,174.07 791,716 795,399 33.5 33.9 3,186.01 Reference : * Calculated based on net worth of ¥ 649,725 million as of June 30 , 2026 , and ¥ 652,172 million as of March 31 , 2026 . Note : Although the accounting treatment related to the business combination ( allocation of the acquisition cost ) was provisionally applied for the fiscal year ended March 31 , 2026 , this treatment was finalized in the first quarter of the fiscal year ending March 31 , 2027. Accordingly , in this report , the figures regarding the consolidated financial position for the fiscal year ended March 31 , 2026 have been replaced from the provisional values with the final values .
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2. Dividend Payments Dividends per share (Yen) 1st quarter 2nd quarter 3rd quarter Year-end Full year Paid for the year ended March 31, 2026 Paid for the year ending March 31, 2027 － 32.00 － 34.00 66.00 － Planned for the year ending March 31, 2027 44.00 44.00 88.00 Note: Revisions to the planned dividend payments announced on July 14, 2026 3. Forecast of Consolidated Financial Results for the Fiscal Year Ending March 31, 2027 (April 1, 2026 to March 31, 2027) Net sales Operating profit Ordinary profit Profit attributable to owners of parent Earnings per share (Millions of yen) YoY change (Millions of yen) YoY change (Millions of yen) YoY change (Millions of yen) YoY change (Yen) Full fiscal year 3,944,000 3.3% 53,500 0.6% 67,500 (10.9%) 43,000 1.1% 210.06 Note: Revisions to the most recent forecast announced: None Notes (1) Significant changes in scope of consolidation during the three months ended June 30, 2026: None Subsidiaries added to the scope of consolidation: None Subsidiaries removed from the scope of consolidation: None (2) Application of accounting methods specific to the preparation of the quarterly consolidated financial statements: None (3) Changes in accounting policies and estimates, and restatements of accounting estimates (a) Changes in accounting policies due to revisions of accounting standards: None (b) Changes in accounting policies other than (a) above: None (c) Changes in accounting estimates: None (d) Restatements: None (4) Number of shares issued and outstanding (common stock) (a) Number of shares issued at the end of the period (including treasury stock) As of June 30, 2026 215,975,042 As of March 31, 2026 215,975,042 (b) Number of treasury shares at the end of the period As of June 30, 2026 11,276,654 As of March 31, 2026 11,276,403 (c) Average number of shares during the period April 1 to June 30, 2026 204,698,536 April 1 to June 30, 2025 207,628,161 * Non-mandatory review of the Japanese-language originals of the consolidated quarterly financial statements herein by certified public accountants or an audit firm: Completed * Disclaimer Regarding Forward-Looking Statements The forecast of consolidated financial results is based on information at the time of the publication of this report. Results may differ from the forecast amounts owing to a wide range of factors. Availability of Supplemental Materials Covering the Financial Results Supplemental materials are made available in the “IR Library” section of the Company’s website.
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1 Table of Contents 1. Overview of Financial Results (1) Overview of Results of Operations (2) Overview of Financial Position 2 2 5 2. Quarterly Consolidated Financial Statements (1) Quarterly Consolidated Balance Sheets (2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income Quarterly Consolidated Statements of Income Quarterly Consolidated Statements of Comprehensive Income (3) Notes to the Quarterly Consolidated Financial Statements Segment Results Notes in the Event of Significant Changes in Shareholders’ Equity Notes Regarding Assumptions of Going Concern Notes Regarding Quarterly Consolidated Statements of Cash Flows Notes Regarding Business Combinations 6 6 8 8 9 10 10 10 10 10 11 3. Others Regarding the Results of the Tender Offer for Shares of PALTAC CORPORATION (Securities Code: 8283) 11 11 [Mid-Period Review Report]
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2 1. Overview of Financial Results (1) Overview of Results of Operations Consolidated financial results for the first three months ended June 30, 2026, are as follows. (Millions of yen, rounded down to the nearest million) Three months ended June 30, 2025 Three months ended June 30, 2026 Difference YoY change Net sales 945,159 989,503 +44,344 +4.7% Gross profit Percentage of net sales 64,677 6.84% 65,733 6.64% +1,055 (0.20pp) +1.6% Selling, general and administrative expenses Percentage of net sales 50,624 5.36% 52,346 5.29% +1,721 (0.07pp) +3.4% Selling, general and administrative expenses excluding (i) and (ii) below 50,032 51,695 +1,663 +3.3% (i) Business investment and other expenses 8 107 +98 +1,095.6% (ii) Amortization of goodwill and intangible assets* 582 543 (39) (6.8%) Operating profit Percentage of net sales 14,053 1.49% 13,386 1.35% (666) (0.13pp) (4.7%) Operating profit excluding (i) and (ii) above 14,645 14,037 (607) (4.2%) Ordinary profit 18,234 17,919 (314) (1.7%) Net extraordinary income 431 5,779 +5,347 +1,238.3% Profit before income taxes 18,666 23,699 +5,033 +27.0% Profit attributable to owners of parent 9,586 13,646 +4,059 +42.3% * Amortization of goodwill and intangible assets associated with growth investments set forth in the 2027 MEDIPAL Medium-Term Vision Net Sales Net sales grew by ¥44,344 million (4.7%) year on year to ¥989,503 million. ・ All business segments posted net sales growth compared with the same period of the previous fiscal year, with increases of ¥30,554 million (5.1%) in the Prescription Pharmaceutical Wholesale Business segment, ¥10,879 million (3.4%) in the Cosmetics, Daily Necessities and OTC Pharmaceutical Wholesale Business segment, and ¥2,991 million (9.9%) in the Animal Health Products and Food Processing Raw Materials Wholesale and Related Business segment. Operating Profit Operating profit decreased by ¥666 million (4.7%) year on year to ¥13,386 mill ion. ・ Gross profit increased by ¥1,055 million (1.6%) to ¥65,733 million mainly due to the increase in net sales. However, the ratio of gross profit to net sales was 6.64%, down 0.20 of a percentage point from 6.84% in the same period of the previous fiscal year, reflecting changes in the product mix in the Prescription Pharmaceutical Wholesale Business segment and increases in rebates and center fees paid to customers in the Cosmetics, Daily Necessities and OTC Pharmaceutical Wholesale Business segment. ・ Selling, general and administrative (SG&A) expenses increased by ¥1,721 million (3.4%) year on yea r to ¥52,346 million, mainly due to increases in personnel expenses, logistics expenses and other costs in the Cosmetics, Daily Necessities and OTC Pharmaceutical Wholesale Business segment. The ratio of SG&A expenses to net sales improved by 0.07 of a percentage point from 5.36% in the same period of the previous fiscal year to 5.29%. Ordinary Profit Ordinary profit decreased by ¥314 million (1.7%) year on year to ¥17,919 million. ・ Although operating profit decreased, non-operating income and expenses improved by ¥351 million, which narrowed the decline in ordinary profit Profit Attributable to Owners of Parent Profit attributable to owners of parent increased by ¥4,059 million (42.3%) year on year to ¥13,646 million. ・ Due to factors such as the recording of a gain on sale of investment securities, extraordinary income and loss improved by ¥5,347 million year on year to a gain of ¥5,779 million.
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3 Prescription Pharmaceutical Wholesale Business Segment (Millions of yen, rounded down to the nearest million) Three months ended June 30, 2025 Three months ended June 30, 2026 Difference YoY change Net sales 600,001 630,556 +30,554 +5.1% Gross profit Percentage of net sales 36,786 6.13% 37,239 5.91% +452 (0.23pp) +1.2% Selling, general and administrative expenses Percentage of net sales 31,253 5.21% 30,935 4.91% (317) (0.30pp) (1.0%) Selling, general and administrative expenses excluding (i) and (ii) below 31,175 30,759 (416) (1.3%) (i) Business investment and other expenses 8 107 +98 +1,095.6% (ii) Amortization of goodwill* 68 68 － － Operating profit Percentage of net sales 5,533 0.92% 6,303 1.00% +770 +0.08pp +13.9% Operating profit excluding (i) and (ii) above 5,611 6,479 +868 +15.5% * Amortization of goodwill associated with growth investments set forth in the 2027 MEDIPAL Medium-Term Vision Net Sales Net sales increased by ¥30,554 million (5.1%) year on year to ¥630,556 million. • The increase was attributable to higher demand for products subject to the "Patent-period price Maintenance Program for Innovative Drugs" (PMP)* (by Japan’s Ministry of Health, Labour and Welfare [MHLW]), stronger sales of growth products, and higher sales through dispensing channels . Explanation of Terms *In conjunction with the FY2026 drug price system reform, the name was changed from the previous "Price Maintenance Premium" (PMP) to the "Patent-period price Maintenance Program for Innovative Drugs" (PMP). Operating Profit Operating profit rose by ¥770 million (13.9%) year on year to ¥6,303 million. • Gross profit increased by ¥452 million (1.2%) to ¥37,239 million, as a result of the increase in net sales. However, the ratio of gross profit to net sales was 5.91%, down 0.23 of a percentage point from 6.13% in the same period of the previous fiscal year, reflecting a higher sales composition of products subject to the "Patent-period price Maintenance Program for Innovative Drugs." • SG&A expenses decreased by ¥317 million (1.0%) year on year to ¥30,935 million, owing to productivity improvements from structural reforms in the logistics business. The ratio of SG&A expenses to net sales improved by 0.30 of a percentage point from 5.21% in the same period of the previous fiscal year to 4.91%. Cosmetics, Daily Necessities and OTC Pharmaceutical Wholesale Business Segment (Millions of yen, rounded down to the nearest million) Three months ended June 30, 2025 Three months ended June 30, 2026 Difference YoY change Net sales 316,047 326,927 +10,879 +3.4% Gross profit Percentage of net sales 23,686 7.49% 23,500 7.19% (185) (0.31pp) (0.8%) Selling, general and administrative expenses Percentage of net sales 16,062 5.08% 17,366 5.31% +1,303 +0.23pp +8.1% Operating profit Percentage of net sales 7,623 2.41% 6,134 1.88% (1,488) (0.54pp) (19.5%)
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4 Net Sales Net sales rose by ¥10,879 million (3.4%) year on year to ¥326,927 million. • Although affected by consumers’ tendency to economize, the business secured new wholesale accounts and conducted sales activities that accurately captured changes in purchasing behavior. It also expanded its lineup of high-value-added products, particularly cosmetics. As a result, sales volume was maintained at the previous year’s level, and higher selling prices led to the increase in net sales . Operating Profit Operating profit decreased by ¥1,488 million (19.5%) year on year to ¥6,134 million. • Gross profit decreased by ¥185 million (0.8%) to ¥23,500 million, mainly due to increases in rebates and center fees paid to customers. The ratio of gross profit to net sales was 7.19%, down 0.31 of a percentage point from 7.49% in the same period of the previous fiscal year. • SG&A expenses increased by ¥1,303 million (8.1%) to ¥17,366 million, reflecting higher personnel and logistics expenses as well as increases in repair costs and expenses associated with the operation of externally leased centers. The ratio of these expenses to net sales rose by 0.23 of a percentage point from 5.08% in the same period of the previous fiscal year to 5.31%. Animal Health Products and Food Processing Raw Materials Wholesale and Related Business Segment (Millions of yen, rounded down to the nearest million) Three months ended June 30, 2025 Three months ended June 30, 2026 Difference YoY change Net sales 30,103 33,094 +2,991 +9.9% Gross profit Percentage of net sales 4,219 14.02% 5,007 15.13% +788 +1.11pp +18.7% Selling, general and administrative expenses Percentage of net sales 3,453 11.47% 3,935 11.89% +482 +0.42pp +14.0% Selling, general and administrative expenses excluding the following: 2,939 3,461 +521 +17.8% Amortization of goodwill and intangible assets* 514 474 (39) (7.7%) Operating profit Percentage of net sales 766 2.54% 1,071 3.24% +305 +0.69pp +39.9% Operating profit excluding the above amortization 1,280 1,546 +266 +20.8% * Amortization of goodwill and intangible assets associated with growth investments set forth in the 2027 MEDIPAL Medium-Term Vision Net Sales Net sales increased by ¥2,991 million (9.9%) year on year to ¥33,094 million. ・ This increase was due to the inclusion of Cygni Corporation. (Koto-ku, Tokyo; hereinafter "Cygni") in the scope of consolidation. Operating Profit Operating profit increased by ¥305 million (39.9%) year on year to ¥1,071 million. ・ Gross profit increased by ¥788 million (18.7%) to ¥5,007 million due to the increase in net sales. The ratio of gross profit to net sales improved by 1.11 percentage points from 14.02% in the same period of the previous fiscal year to 15.13%, reflecting the inclusion of Cygni in the scope of consolidation. ・ SG&A expenses increased by ¥482 million (14.0%) to ¥3,935 million, due to the inclusion of Cygni in the scope of consolidation. The ratio of these expenses to net sales rose by 0.42 of a percentage point from 11.47% in the same period of the previous fiscal year to 11.89%. Note: Segment sales include inter-segment transactions.
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5 (2) Overview of Financial Position Assets As of June 30, 2026, total assets amounted to ¥1,937,423 million, an increase of ¥13,336 million from the end of the previous fiscal year. Current assets rose by ¥29,425 million from the end of the previous fiscal year to ¥1,400,451 million. This was mainly due to increases of ¥27,009 million in notes and accounts receivable – trade and ¥4,460 million in merchandise and finished goods. Non-current assets decreased by ¥16,088 million from the end of the previous fiscal year to ¥536,972 million. This was mainly due to a decrease of ¥18,404 million in investment securities. Liabilities As of June 30, 2026, total liabilities stood at ¥1,145,707 million, an increase of ¥17,020 million from the end of the previous fiscal year. Current liabilities increased by ¥21,598 million from the end of the previous fiscal year to ¥1,089,640 million, mainly due to an increase in notes and accounts payable – trade of ¥36,013 million. Non-current liabilities decreased by ¥4,578 million from the end of the previous fiscal year to ¥56,067 million, mainly as a result of a decrease in deferred tax liabilities of ¥4,393 million (included in the “other” line item under “non - current liabilities”). Net Assets As of June 30, 2026, net assets totaled ¥791,716 million, a decrease of ¥3,683 million from the end of the previous fiscal year. Shareholders’ equity increased by ¥6,700 million from the end of the previous fiscal year to ¥590,752 million. This was mainly due to an increase of ¥6,686 million in retained earnings. Accumulated other comprehensive income decreased by ¥9,146 million from the end of the previous fiscal year to ¥58,973 million, mainly due to a decrease in valuation difference on available-for-sale securities of ¥9,257 million. Non-controlling interests decreased by ¥1,237 million from the end of the previous fiscal year to ¥ 141,988 million, mainly due to a decrease in the net assets of PALTAC Corporation. Note: During the first quarter of the current consolidated fiscal year, the business combination involving Cygni Holdings, Inc.—for which provisional accounting treatment had been applied in the previous consolidated fiscal year—was finalized. As the compa rative information included in "(1) Quarterly Consolidated Balance Sheets " of "2. Quarterly Consolidated Financial Statements" (and subsequent notes) reflects a significant revision to the initial allocation of the acquisition cost, the amounts representin g changes from the end of the previous consolidated fiscal year are calculated based on a comparison with the figures incorporating this revision.
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6 2. Quarterly Consolidated Financial Statements (1) Quarterly Consolidated Balance Sheets (Millions of yen, rounded down to the nearest million) As of March 31, 2026 As of June 30, 2026 ASSETS Current assets Cash and deposits 289,073 289,923 Notes and accounts receivable – trade 807,848 834,858 Merchandise and finished goods 190,396 194,856 Other 83,748 80,853 Allowance for doubtful accounts (41) (40) Total current assets 1,371,025 1,400,451 Non-current assets Property, plant and equipment: Buildings and structures, net 101,881 100,581 Land 117,174 116,761 Other, net 42,781 44,583 Total property, plant and equipment 261,837 261,926 Intangible assets Goodwill 7,808 7,623 Customer-related intangible assets 21,748 21,364 Other 9,986 9,813 Total intangible assets 39,543 38,801 Investments and other assets Investment securities 212,459 194,055 Other 39,810 42,711 Allowance for doubtful accounts (589) (522) Total investments and other assets 251,680 236,244 Total non-current assets 553,061 536,972 Total assets 1,924,086 1,937,423
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7 (Millions of yen, rounded down to the nearest million) As of March 31, 2026 As of June 30, 2026 LIABILITIES Current liabilities Notes and accounts payable – trade 984,534 1,020,547 Income taxes payable 17,193 10,109 Provision for bonuses 8,320 5,393 Other 57,992 53,589 Total current liabilities 1,068,041 1,089,640 Non-current liabilities Retirement benefit liability 12,677 12,836 Other 47,968 43,230 Total non-current liabilities 60,646 56,067 Total liabilities 1,128,687 1,145,707 NET ASSETS Shareholders’ equity Share capital 22,398 22,398 Capital surplus 100,106 100,120 Retained earnings 484,985 491,672 Treasury shares (23,437) (23,438) Total shareholders’ equity 584,052 590,752 Accumulated other comprehensive income Valuation difference on available-for-sale securities 75,186 65,929 Deferred gains or losses on hedges 29 67 Revaluation reserve for land (13,518) (13,518) Foreign currency translation adjustment 3,002 3,362 Remeasurements of defined benefit plans 3,419 3,132 Total accumulated other comprehensive income 68,119 58,973 Share acquisition rights 1 1 Non-controlling interests 143,225 141,988 Total net assets 795,399 791,716 Total liabilities and net assets 1,924,086 1,937,423
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8 (2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income Quarterly Consolidated Statements of Income (Millions of yen, rounded down to the nearest million) Three months ended June 30, 2025 Three months ended June 30, 2026 Net sales 945,159 989,503 Cost of sales 880,481 923,770 Gross profit 64,677 65,733 Selling, general and administrative expenses Salaries and allowances 18,662 19,059 Welfare expenses 3,643 3,584 Provision for bonuses 3,689 3,498 Retirement benefit expenses 607 320 Distribution expenses 6,192 6,639 Rent expenses on land and buildings 1,386 1,576 Depreciation 3,353 3,513 Other 13,088 14,152 Total selling, general and administrative expenses 50,624 52,346 Operating profit 14,053 13,386 Non-operating income Interest income 0 68 Dividend income 916 803 Research fee income 2,184 2,243 Rental income from real estate 617 812 Share of profit of entities accounted for using equity method 860 893 Other 310 659 Total non-operating income 4,890 5,480 Non-operating expenses Interest expenses 3 3 Rental expenses on real estate 643 593 Loss on investments in investment partnerships － 237 Other 62 113 Total non-operating expenses 709 947 Ordinary profit 18,234 17,919 Extraordinary income Gain on sale of non-current assets － 148 Gain on sale of investment securities 886 6,061 Insurance claim income 478 － Other 0 1 Total extraordinary income 1,365 6,211 Extraordinary losses Loss on sale and retirement of non-current assets 4 19 Impairment losses 5 0 Loss on valuation of investment securities 0 410 Expenses for business restructuring 922 － Other 1 1 Total extraordinary losses 934 431 Profit before income taxes 18,666 23,699 Income taxes – current 9,742 10,169
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9 Income taxes – deferred (3,688) (2,412) Total income taxes 6,053 7,756 Profit 12,612 15,942 Profit attributable to non-controlling interests 3,025 2,296 Profit attributable to owners of parent 9,586 13,646 Quarterly Consolidated Statements of Comprehensive Income (Millions of yen, rounded down to the nearest million) Three months ended June 30, 2025 Three months ended June 30, 2026 Profit 12,612 15,942 Other comprehensive income Valuation difference on available-for-sale securities (2,257) (9,957) Deferred gains or losses on hedges 14 31 Remeasurements of defined benefit plans, net of tax (153) (310) Share of other comprehensive income of entities accounted for using equity method (411) 164 Total other comprehensive income (2,808) (10,072) Comprehensive income 9,804 5,870 Comprehensive income attributable to Comprehensive income attributable to owners of parent 6,154 4,499 Comprehensive income attributable to non-controlling interests 3,650 1,370
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10 (3) Notes to the Quarterly Consolidated Financial Statements Segment Results I. Results for the three months ended June 30, 2025 Breakdown of Net Sales and Profit by Segment (Millions of yen, rounded down to the nearest million) Prescription Pharmaceutical Wholesale Business Cosmetics, Daily Necessities and OTC Pharmaceutical Wholesale Business Animal Health Products and Food Processing Raw Materials Wholesale and Related Business Total Adjustment (Note 1) Amount reported in quarterly consolidated statements of income (Note 2) Net sales Sales to customers 599,082 315,974 30,103 945,159 － 945,159 Intersegment sales and transfers 919 73 0 993 (993) － Total 600,001 316,047 30,103 946,153 (993) 945,159 Segment profit 5,533 7,623 766 13,922 130 14,053 Notes: 1. The adjustment of segment profit amounting to ¥130 million is the net balance of ¥792 million in inter-segment eliminations and ¥(661) million in group-wide expenses that are not allocated to reportable segments. 2. Segment profit is adjusted to operating profit as reported in the quarterly consolidated statements of income. II. Results for the three months ended June 30, 2026 Breakdown of Net Sales and Profit by Segment (Millions of yen, rounded down to the nearest million) Prescription Pharmaceutical Wholesale Business Cosmetics, Daily Necessities and OTC Pharmaceutical Wholesale Business Animal Health Products and Food Processing Raw Materials Wholesale and Related Business Total Adjustment (Note 1) Amount reported in quarterly consolidated statements of income (Note 2) Net sales Sales to customers 629,560 326,849 33,094 989,503 － 989,503 Intersegment sales and transfers 996 77 0 1,074 (1,074) － Total 630,556 326,927 33,094 990,578 (1,074) 989,503 Segment profit 6,303 6,134 1,071 13,509 (122) 13,386 Notes: 1. The adjustment of segment profit amounting to ¥(122) million is the net balance of ¥803 million in inter-segment eliminations and ¥(926) million in group-wide expenses that are not allocated to reportable segments. 2. Segment profit is adjusted to operating profit as reported in the quarterly consolidated statements of income. Notes in the Event of Significant Changes in Shareholders’ Equity None applicable Notes Regarding Assumptions of Going Concern None applicable Notes Regarding Quarterly Consolidated Statements of Cash Flows Statements of consolidated cash flows for the first three months of the fiscal year ending March 31, 2027, have not been prepared. Amounts of depreciation (including amortization of intangible assets excluding goodwill) and amortization of goodwill for the first three months of the fiscal year ended March 31, 2026, are as follows.
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11 (Millions of yen) Three months ended June 30, 2025 Three months ended June 30, 2026 Depreciation 4,251 4,518 Amortization of goodwill 331 184 (Notes Regarding Business Combinations) Finalization of Provisional Accounting for Business Combinations Regarding the business combination with Cygni Holdings, Inc. executed on January 30, 2026, provisional accounting treatment was applied in the previous consolidated fiscal year; however, this treatment was finalized duri ng the first quarter of the current consolidated fiscal year. As a result of finalizing this provisional accounting, significant revisions to the initial allocation of the acquisition cos t are reflected in the comparative information included in the consolidated financial statements for the first quarter of the current consolidated fiscal year. Specifically, the goodwill amount of ¥9,945 million, provisionally calculated in the consolidated balance sheet at the end of the previous consolidated fiscal year, decreased by ¥4,532 million upon finalization of the accounting treatment, resulting in a final amount of ¥5,413 million. This decrease in goodwill is attributable to increases of ¥6,617 million in customer-related assets (classified as intangible assets) and ¥2,084 million in deferred tax liabilities (classified as other non-current liabilities). Goodwill and the customer-related assets allocated as intangible assets are being amortized on a straight-line basis over their respective useful lives (15 years and 24 years). 3. Others Regarding the Results of the Tender Offer for Shares of PALTAC CORPORATION (Securities Code: 8283) At a meeting of the Board of Directors held on May 11, 2026, the Company resolved to acquire common shares of PALTAC CORPORATION (Tokyo Stock Exchange Prime Market; Securities Code: 8283) through a tender offer pursuant to the Financial Instruments and Exchange Act (Act No. 25 of 1948, as amended). The Com pany had been conducting this tender offer since May 12, 2026, and the offer period concluded on July 7, 2026. For details, please refer to the "Notice Regarding the Results of the Tender Offer for the Company's Shares by MEDIPAL HOLDINGS CORPORATION, the Company's Parent Company," released on July 8, 2026. In addition, for the purpose of funding the tender offer, we executed a borrowing (bridge loan) on July 13, 2026, as follows. Lender Mizuho Bank, Ltd. Loan amount ¥162,700 million Interest rate Base rate + spread Loan execution date July 13, 2026 Loan term July 13, 2026 to July 30, 2027 Collateral status Unsecured and unguaranteed Financial covenants None The English version of this document is a translation of the Japanese original and is provided for information purposes only. While reasonable efforts have been made to provide an accurate translation, no liability is assumed by MEDIPAL HOLDINGS CORPORATION for any errors, omissions, or ambiguities in the translation. In the event of any inconsistency or conflict between the English version and the Japanese original, the Japanese original shall prevail.