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SYLA Reports Full Year 2022 Financial and Operational Results

32% Net Revenue and 14% Gross Profit Increases for the Full Year 2022 Compared to the Full Year 2021

Successful IPO in March of 2023, Netting the Company $12.5 Million for Working Capital, and General Corporate Purposes

TOKYO, Japan, April 10, 2023 (GLOBE NEWSWIRE) — SYLA Technologies Co., Ltd. (NASDAQ: SYT) (“SYLA” or “the Company”), operator of the largest membership real estate crowd-funding platform in Japan, Rimawari-kun, reported financial results for the full year ended December 31, 2022.

Full Year 2022 and Recent Operational Highlights

 Completed a successful IPO in March 2023, raising gross proceeds of $15.0 million, and net proceeds of approximately $12.5 million after deducting underwriting commissions, discounts, and offering expenses payable by SYLA. The ADSs began trading on the Nasdaq Capital Market on March 31, 2023, under the symbols “SYT.”
 SYLA is scheduled to ring the Nasdaq opening bell on April 10, 2023.
 As of December 31, 2022, the number of Rimawari-kun members reached 237,004.
 The average annual occupancy rate in 2022 for the SYFORME series of original brand condominiums was 99.23%.

Management Commentary

“After the successful close of our IPO and Nasdaq listing in late March, we look to fulfill our mission statement of democratizing real estate investment around the world through technology and asset management by means of our crowdfunding platform, Rimawari-kun,” said Chairman, Founder, and CEO Hiroyuki Sugimoto. “As a publicly traded company, we believe we have the opportunity to access larger capital investments, increase our brand visibility at an international scale, and strengthen our internal talent while enhancing our corporate governance. Our focus turns to optimizing and expanding our three primary business segments including operating the crowdfunding arm of the Rimawari-kun platform on behalf of individual and institutional investors, and asset management including leasing, brokering, and investing in real estate-centric opportunities. Our existing strategy includes providing Rimawari-kun to investors as an alternative to the rigid real estate financing system in Japan. We’ve allied our platform with Rakuten Group, Inc. through marketing and co-selling opportunities to offer mutual circulation of customers and services through our services.”

“At this time, SYLA offers a dynamic and multi-faceted approach to investors and the real estate financial markets, with the express goal of achieving international access and market penetration for investors and the Company alike. In our current economic environment, it is important for investors to have access to managed assets in the real estate market at any level of investment. We believe that our platform is uniquely positioned to enable our investors and customers to achieve financial diversity in their portfolios via our multi-pronged approach to crowdfunding. We thank you for your support as we look to provide lasting value to our customers and investors.”

Full Year 2022 Financial Results

Results compare the full year ended December 31, 2022 to the full year ended December 31, 2021, unless otherwise indicated. Results below are for SYLA Technologies Co., Ltd.

 Revenue for the full year 2022 increased to ¥22,055,785 thousand ($167,330 thousand) from ¥16,665,382 thousand ($126,435 thousand) for the full year 2021. The increase was mainly due to the numbers of units sold increased from 407 units in the year ended December 31, 2021 to 588 units (increased by 181 units) in the year ended December 31, 2022, an increase of ¥2,967,997 thousand ($22,517 thousand) in real estate sales, and an increase of ¥775,982 thousand ($5,887 thousand) in solar power related revenue as a result of acquisition of SYLA Solar Co., Ltd. and its subsidiaries in February 2022.
   
 Gross profit increased to ¥3,603,816 thousand ($27,341 thousand) for the year ended December 31, 2022 from ¥3,149,089 thousand ($23,891 thousand) for the year ended December 31, 2021. The increase was mainly due to higher sales.
   
 Total operating expenses increased to ¥2,825,104 thousand ($21,433 thousand) for the full year of 2022 from ¥2,466,731 thousand ($18,714 thousand) for the full year of 2021. The increase mainly consists of a ¥53,855 thousand ($409 thousand) increase in personnel expenses due to new business expansion, and a ¥370,430 thousand ($2,810 thousand) increase in legal and professional expenses including the costs for IPO to NASDAQ. In addition, the Company spent approximately ¥300,000 thousand ($2,276 thousand) expenses related to investments on technologies (including Rimawari-kun) during the year ended December 31, 2022.
   
 Net income attributable to SYLA Technologies Co., Ltd. was ¥394,955 thousand ($2,996 thousand) (¥1,650.09($12.52) per basic share and ¥1,393.86 ($10.57) per diluted share) for the year ended December 31, 2022 compared to net income attributable to SYLA Technologies Co., Ltd. of ¥277,489 thousand ($2,105 thousand) (¥1,201.09 ($9.11) per basic share and ¥1,022.40 ($7.76) per diluted share) for the year ended December 31, 2021.
   
 As of December 31, 2022, SYLA Technologies Co., Ltd. had ¥2,542,795 thousand ($19,291 thousand) cash and cash equivalents.
   
 Total net assets increased to ¥6,566,690 thousand ($49,819 thousand) as of December 31, 2022 from ¥5,582,336 thousand ($42,351 thousand) as of December 31, 2021.
   
  (Conversion rate ¥131.81=US$1.00)

About SYLA Technologies Co., Ltd.

Headquartered in Tokyo, Japan, SYLA Technologies Co., Ltd. consists of the Company and its consolidated subsidiaries (SYLA Co., Ltd., SYLA Solar Co., Ltd. and its subsidiaries, SYLA Brain Co., Ltd., and SYLA Biotech Co., Ltd.). The Company owns and operates the largest membership real estate crowd-funding platform in Japan, Rimawari-kun, which targets individuals, corporate and institutional investors, as well as high net worth individuals. Their mission is to democratize real estate investment around the world through technology and asset management through the Rimawari-kun platform. They are engaged in the overall investment condominium business, including planning, development, construction, sales, rental management, building management, repair work, and the sale of properties. Additional information about the Company’s products and services is available at www.syla-tech.jp/en.
  
Cautionary Note Regarding Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act and other securities laws. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and similar expressions or variations of such words are intended to identify forward-looking statements. For example, the Company is using forward-looking statements when it discusses the expected gross proceeds and the closing of the offering. Forward-looking statements are not historical facts, and are based upon management’s current expectations, beliefs and projections, many of which, by their nature, are inherently uncertain. Such expectations, beliefs and projections are expressed in good faith. However, there can be no assurance that management’s expectations, beliefs and projections will be achieved, and actual results may differ materially from what is expressed in or indicated by the forward-looking statements. Forward-looking statements are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the forward-looking statements. For a more detailed description of the risks and uncertainties affecting the Company, reference is made to the Company’s reports filed from time to time with the Securities and Exchange Commission (“SEC”), including, but not limited to, the risks detailed in the Company’s prospectus that forms a part of the registration statement on Form S-1 (File No. 333-268420), declared effective by the SEC on March 30, 2023. Forward-looking statements speak only as of the date the statements are made. The Company assumes no obligation to update forward-looking statements to reflect actual results, subsequent events or circumstances, changes in assumptions or changes in other factors affecting forward-looking information except to the extent required by applicable securities laws. If the Company does update one or more forward-looking statements, no inference should be drawn that the Company will make additional updates with respect thereto or with respect to other forward-looking statements. References and links to websites have been provided as a convenience, and the information contained on such websites is not incorporated by reference into this press release.

Contact Information

SYLA Technologies Investor Relations Contact:
Gateway Group, Inc.
John Yi and Thomas Thayer
SYLA@gatewayir.com
(949) 574-3860

Underwriter Inquiries:

Boustead Securities, LLC
Keith Moore
offerings@boustead1828.com
Tel +1 (949) 502 4408


SYLA TECHNOLOGIES CO., LTD.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands of Japanese Yen (“JPY”), except for share data)

  December 31,  December 31, 
  2022  2021 
       
ASSETS        
Current assets        
Cash and cash equivalents  2,542,795   2,742,424 
Restricted cash  168,630   27,198 
Term deposits  160,089   133,350 
Short-term investments     182,313 
Accounts receivable, net  67,776   27,237 
Inventories, net  10,517,193   5,081,601 
Prepaid expenses, net  647,534   638,894 
Other current assets, net  185,350   59,082 
Current assets of discontinued operations  10,600   51,748 
Total current assets  14,299,967   8,943,847 
         
Non-current assets        
Restricted cash, non-current  76,578   76,095 
Long-term deposits  30,511   78,712 
Long-term investments, net  413,805   123,824 
Property, plant and equipment, net  10,231,057   8,354,631 
Solar power systems, net  361,422    
Intangible assets, net  194,361   63,860 
Goodwill  727,701   417,897 
Operating lease right-of-use assets  2,597,500   2,582,861 
Finance lease right-of-use assets  11,396   6,142 
Other assets, net  848,676   636,315 
Non-current assets of discontinued operations     179,795 
Total non-current assets  15,493,007   12,520,132 
         
TOTAL ASSETS  29,792,974   21,463,979 
         
LIABILITIES AND EQUITY        
Current liabilities        
Accounts payable  419,058   134,822 
Accrued liabilities  159,533   48,802 
Short-term loans  697,179   1,447,746 
Current portion of long-term loans  1,030,850   677,919 
Current portion of long-term bonds  126,525   154,089 
Deferred revenue  228,426   94,376 
Income tax payables  431,418   133,937 
Operating lease liabilities, current  427,856   423,464 
Finance lease liabilities, current  4,821   2,177 
Other current liabilities  1,603,498   1,030,993 
Current liabilities of discontinued operations  3,308    
Total current liabilities  5,132,472   4,148,325 
         
Non-current liabilities        
Long-term loans  15,257,106   8,797,321 
Long-term bonds  205,769   334,231 
Operating lease liabilities, non-current  2,175,786   2,165,558 
Finance lease liabilities, non-current  6,795   4,106 
Other liabilities  448,356   372,694 
Non-current liabilities of discontinued operations     59,408 
Total non-current liabilities  18,093,812   11,733,318 
         
TOTAL LIABILITIES  23,226,284   15,881,643 
         
EQUITY        
Capital stock (900,000 and 10,000,000 shares authorized, 239,489 and 237,889 shares issued and outstanding as of December 31, 2022 and 2021, with no stated value)  161,580   155,000 
Capital surplus  2,987,795   2,709,808 
Retained earnings  2,767,001   2,383,940 
Total SYLA Technologies Co., Ltd.’s equity  5,916,376   5,248,748 
Noncontrolling interests  650,314   333,588 
TOTAL EQUITY  6,566,690   5,582,336 
TOTAL LIABILITIES AND EQUITY  29,792,974   21,463,979 

  

SYLA TECHNOLOGIES CO., LTD.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Amounts in thousands of JPY, except for share and per share data)

  For the Years Ended December 31, 
  2022  2021 
       
Revenues, net  22,055,785   16,665,382 
Cost of revenues  (18,451,969)  (13,516,293)
Gross profit  3,603,816   3,149,089 
         
Operating expenses        
Selling, general and administrative expenses  (2,825,104)  (2,466,731)
Total operating expenses  (2,825,104)  (2,466,731)
         
Income from continuing operations  778,712   682,358 
         
Other income (expenses)        
Other income  201,954   43,951 
Income (loss) from equity method investments  (748)  109 
Other expenses  (323,977)  (226,346)
Total other expenses  (122,771)  (182,286)
Income from continuing operations before income taxes  655,941   500,072 
Income tax expense  (345,180)  (221,384)
Net income from continuing operations  310,761   278,688 
Income from discontinued operations, net of income taxes  78,628    
Net income  389,389   278,688 
Net income from continuing operations attributable to noncontrolling interests  4,329   1,199 
Net loss from discontinued operations attributable to noncontrolling interests  (9,895)   
Less: net income (loss) attributable to noncontrolling interests  (5,566)  1,199 
Net income attributable to SYLA Technologies Co., Ltd.  394,955   277,489 
         
Net income from continuing operations per share:        
– Basic  1,298.34   1,206.28 
– Diluted  1,096.72   1,026.82 
         
Income from discontinued operations per share:        
– Basic  328.50    
– Diluted  277.49    
         
Net income attributable to SYLA Technologies Co., Ltd. per share:        
– Basic  1,650.09   1,201.09 
– Diluted  1,393.86   1,022.40 
         
Weighted average shares used in calculating basic and diluted net income per share:        
– Basic  239,353   231,031 
– Diluted  283,354   271,409 
         
Comprehensive income        
Net income  389,389   278,688 
Other comprehensive income, net of tax        
Reclassification of unrealized loss on available-for-sale debt securities to net income when realized, net of tax effect of nil and 175 for the years ended December 31, 2022 and 2021, respectively     396 
Other comprehensive income, net of tax     396 
Comprehensive income  389,389   279,084 
Comprehensive income (loss) attributable to noncontrolling interests  (5,566)  1,199 
Comprehensive income attributable to SYLA Technologies Co., Ltd.  394,955   277,885 

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