Accelerating the Monetization of New Businesses and Optimizing the Portfolio through Strategic Investment

「To respond to this urgent demand while making maximum use of limited funds, the Company determined that strategically using anonymous partnership investments to invest in high-quality grid-scale battery storage projects, in addition to its own capital expenditures and business development, would further accelerate the growth of its energy storage solutions business, diversify risk and contribute to securing more stable earnings and enhancing corporate value. Accordingly, it made an anonymous partnership investment in NC Pioneer GK, which acquires, develops, owns and operates grid-scale battery storage facilities.」

「To improve profitability across the Group, the Company had been considering the optimal allocation of management resources and restructuring its business portfolio, including launching a digital asset management business promoting crypto-asset investments and other activities the previous year. However, because it determined that concentrating more management resources on its core businesses through this share transfer would contribute to enhancing corporate value, it decided to sell the shares in the subsidiary.」

「The Group will seek to implement agile strategies to further expand its earnings scale by investing in business areas highly compatible with existing businesses and fields that create new business opportunities, including through M&A, and by strengthening organizational capabilities through measures such as securing personnel.」

「At a meeting of the Board of Directors held on 14 November 2024, the Company resolved to additionally acquire crypto assets totaling ¥1 billion. The planned additional acquisition comprises ¥800 million of bitcoin, ¥150 million of Solana and ¥50 million of Ethereum, for a total of ¥1 billion. The Company plans to complete the acquisition by around December 2024, taking market conditions into account.」

「The Company entered into a share exchange agreement with ゼロメディカル Co., Ltd. (head office: 1-5-4 Higashiyama, Meguro-ku, Tokyo; representative director: Hara Masahiro (原 征弘); hereinafter, “ゼロメディカル”), which promotes businesses primarily aimed at resolving social issues relating to “health” and “welfare,” under which the Company would be the wholly owning parent company resulting from the share exchange and ゼロメディカル would be the wholly owned subsidiary resulting from the share exchange. ゼロメディカル became a wholly owned subsidiary on the effective date, 1 December 2023.」

「This share exchange is scheduled to take effect on 1 December 2023 through a simplified share exchange procedure that does not require shareholder approval for the Company under Article 796, paragraph 2 of the Companies Act.」

「In the financial-related business, the Company transferred a 51% interest in BPJ shares, which had been included in the financial-related business as shares of a consolidated subsidiary, to a group company of SBI Holdings,Inc. on 1 July 2022, and transferred the remaining 49% of BPJ shares to a group company of SBI Holdings,Inc. on 31 March 2023. As a result, the Company no longer recognized its share of profit or loss of investments accounted for using the equity method, and discontinued the financial-related business on 12 May 2023.」

「The Company decided to discontinue the automotive business, having determined that concentrating management resources as a result would contribute to enhancing corporate value.」

「The Company entered into a comprehensive capital and business alliance agreement with SBI Holdings,Inc. dated 12 May 2022 in the energy and Crypto fields. Going forward, it will maximize the synergies from this alliance to expand the Group’s businesses and enhance corporate value.」

「Of the investment transactions previously conducted by the Company, those related to the crypto-asset business have been included in the financial-related business as operating transactions since the first quarter of the current consolidated fiscal year. Segment revenue and segment profit include ¥15 million in profit from investments related to the crypto-asset business.」

「The Company had invested in venture companies and others related to crypto assets. Following the registration of its consolidated subsidiary BitPoint Japan Co., Ltd. as a Type I Financial Instruments Business Operator on 10 May 2021, it clarified through an organizational restructuring the department responsible for managing the execution of investments related to the crypto-asset business and commenced an investment business from the first quarter of the current consolidated fiscal year.」

「The Group will periodically review its business portfolio, promote improvements in profitability and efficiency, and seek to establish a foundation for medium- to long-term growth. To accelerate growth, it will also promote alliances with other corporate groups, including overseas groups, and strategic investments as necessary in light of the management environment at the time.」

「The Group will periodically review its business portfolio, promote improvements in profitability and efficiency, and seek to establish a foundation for medium- to long-term growth. To accelerate growth, it will also promote alliances with other corporate groups, including overseas groups, and strategic investments.」

「⑤ Amount of funds raised ¥4,039 million” “d Strengthening funds for procuring electricity in the electricity trading business ¥500 million” “e Funding for new business development in the energy-related business ¥200 million” “f Funding for business assets in the travel-related business (loan to ジャービス) ¥300 million” “g Investment in blockchain-related businesses ¥500 million」

「The Group decided that taking Smart Financial outside the Group through this MBO would help optimize the allocation of the Group’s management resources and enhance corporate value, and reached this decision accordingly.」

「The Group decided, after comprehensively considering that BPJ’s continued provision on a one-stop basis of crypto-asset-related services, including crypto-asset margin trading and services involving electronically recorded transferable rights, would be optimal from the standpoint of user convenience, and that the president and representative director of Smart Financial had offered to acquire all of the shares in the company held by the Group through an MBO, that taking Smart Financial outside the Group through the MBO would help optimize the allocation of the Group’s management resources and enhance corporate value.」

「In the next fiscal year, the Group plans to take measures in the high-growth financial-related business to strengthen the financial base of its crypto-asset exchange business and enhance customer convenience through system enhancements and other initiatives.」

「However, on the revenue side, the Group was affected by falling cryptocurrency prices because it temporarily increased its cryptocurrency holdings for trading in response to higher trading volumes. On the profit side, earnings declined because of increased marketing costs and intensive system development for anti-money laundering and counter-terrorist financing measures ahead of the FATF’s fourth-round mutual evaluation of Japan.」

「Against this backdrop, the Group advanced plans to strengthen its systems and increase staffing to accommodate the expansion of the financial-related business.」

「Among its five business areas, energy-related, automotive-related, financial-related, travel-related and other businesses, the Group made particularly active investments in the financial-related business and expanded its scale substantially. In the next fiscal year, it plans to expand its businesses, particularly the financial-related business, which is expected to grow, by developing systems, implementing marketing initiatives and taking other measures to secure liquidity in cryptocurrency trading.」

「To accelerate and efficiently achieve the launch and growth of its businesses, the Group will actively make strategic investments for the future, including capital and business alliances involving M&A and capital expenditures. It will also seek to achieve early monetization of new businesses through the appropriate allocation of management resources.」