Strengthening the Financial Base and Expanding Capital Measures

「In October 2025, we strengthened our capital by ¥1.5 billion through the allotment of Class E preferred shares to グロースパートナーズ㈱ and worked to stabilize our financial base, including by acquiring some of the Class C preferred shares, which carry a high dividend rate.」

「Payment for the issuance of the Class E preferred shares and the 28th series of stock acquisition rights was completed on 3 October 2025, and we launched a collaborative structure with グロースパートナーズ株式会社.」

「26th Series of Stock Acquisition Rights Number of the stock acquisition rights with exercise price adjustment clauses exercised during the interim accounting period (units) 1,000 Number of shares delivered upon exercise during the interim accounting period (shares) 100,000 Funds raised through exercises during the interim accounting period (¥ million) 12 Cumulative funds raised through exercises of the stock acquisition rights with exercise price adjustment clauses as of the end of the interim accounting period (¥ million) 244」

「26th Series of Stock Acquisition Rights …Number of the stock acquisition rights with exercise price adjustment clauses exercised during the period (units): 15,500 Number of shares delivered upon exercise during the period (shares): 1,550,000 Funds raised through exercises during the period (¥ million): 232」

「In December 2023, we resolved to issue, through a third-party allotment, the 26th and 27th series of stock acquisition rights with exercise price adjustment clauses and exercise designation and suspension designation clauses, with the aim of strengthening our financial base and securing financial flexibility to respond flexibly to future investment needs.」

「During the cumulative nine-month period under review, a loss on the sale of the transferred assets of ¥12 million was recorded as a loss on the sale of fixed assets under extraordinary losses.」

「To make effective use of management resources, we resolved to transfer the following fixed assets. …Transfer price: ¥55 million; book value: ¥57 million; loss on transfer: ¥10 million. …Scheduled property transfer date: late November 2022.」

「Total net assets increased by ¥7,443 million from the end of the previous consolidated fiscal year to ¥2,963 million. This was mainly due to increases of ¥750 million each in share capital and capital surplus from the issuance of Class C preferred shares through a third-party allotment, increases of ¥2,250 million each in share capital and capital surplus from the debt-to-equity conversion by financial institutions, increases of ¥215 million each in share capital and capital surplus from the exercise of the 25th series of stock acquisition rights with an exercise price adjustment clause, and an increase in retained earnings following the recognition of ¥1,009 million in net income attributable to owners of the parent.」

「For the effective use of management resources and the reduction of interest-bearing debt.」

「To make effective use of management resources and reduce interest-bearing debt, we resolved to transfer the following fixed assets. A loss on the sale of fixed assets of approximately ¥10 million is expected. Scheduled property transfer date: mid-August 2021.」

「We will eliminate the excess of liabilities over assets after stabilizing our financial position through the issuance of ¥1.5 billion of Class C preferred shares to RKD Encourage Fund Investment Limited Partnership and ¥4.5 billion of Class D preferred shares to Resona Bank, Ltd., Mizuho Bank, Ltd., The Bank of Yokohama, Ltd., Sumitomo Mitsui Banking Corporation and Deutsche Bank Tokyo Branch.」

「For restructuring costs and working capital during the business revitalization ADR period, we entered into an overdraft agreement with Resona Bank, Ltd., our principal bank, and secured a ¥700 million credit facility dated 28 December 2020 and an additional ¥270 million credit facility dated 15 February 2021.」

「Funds provided by financing activities amounted to ¥690 million, compared with an outflow of ¥339 million in the same quarter of the previous year. This was mainly due to an ¥800 million increase in short-term borrowings, partly offset by repayments of ¥25 million in long-term borrowings and ¥79 million in lease liabilities.」

「In addition, to improve liquidity, amid an uncertain economic outlook resulting from the spread of COVID-19, Resona Bank, Ltd., our principal bank, established a new credit facility during the cumulative first quarter to support liquidity and strengthen the financial stability of our group.」

「Going forward, amid an uncertain economic outlook, we will build up our cash position and take measures to strengthen our financial base in order to restore the substantially reduced net assets.」

「The group’s principal funding needs are capital expenditures for stores, business development investments, and M&A and capital and business alliances. As a basic policy, the group funds these investments through proceeds from capital increases, long-term borrowings, and internal funds.」

「The group’s principal funding needs are capital expenditures for stores, business development investments, and M&A and capital and business alliances. As a basic policy, the group funds these investments through proceeds from capital increases, long-term borrowings, and internal funds.」

「Number of convertible bonds with stock acquisition rights with revised exercise price provisions and other instruments exercised during the quarter 79 Number of shares delivered upon exercise during the quarter 7,900 shares Funds raised through exercises during the quarter ¥5 million Cumulative funds raised through the relevant convertible bonds with stock acquisition rights with revised exercise price provisions and other instruments as of the end of the quarter ¥1,953 million」

「Net cash used in financing activities was ¥228 million, compared with ¥683 million provided in the previous consolidated fiscal year. This was mainly due to the repayment of ¥499 million in long-term borrowings and payment of ¥172 million in lease obligations, partly offset by ¥443 million in proceeds from the issuance of shares upon the exercise of stock acquisition rights.」

「Number of convertible bonds with stock acquisition rights with revised exercise price provisions and other instruments exercised during the second quarter accounting period 6,500 Number of shares delivered upon exercise during the second quarter accounting period 650,000 shares Funds raised through exercises during the second quarter accounting period ¥443 million Cumulative number of convertible bonds with stock acquisition rights with revised exercise price provisions and other instruments exercised as of the end of the second quarter accounting period 27,400 Cumulative funds raised through the relevant convertible bonds with stock acquisition rights with revised exercise price provisions and other instruments as of the end of the second quarter accounting period ¥1,948 million」

「Based on a resolution of the Board of Directors dated 19 July 2017, part of the 21st series of stock acquisition rights with revised exercise price provisions issued on 7 August 2017 was exercised during the period from 1 July 2018 to 31 July 2018 as follows. (1) Class and number of shares issued Common shares 500,000 shares (2) Number of stock acquisition rights exercised 5,000 rights (3) Total exercise proceeds ¥343 million (4) Increase in share capital ¥171 million (5) Increase in capital surplus ¥171 million」

「Share capital and capital surplus each increased by ¥1,010 million as a result of the exercise of stock acquisition rights with revised exercise price provisions, among other factors.」

「Share capital and capital surplus each increased by ¥700 million as a result of the exercise of stock acquisition rights with revised exercise price provisions, among other factors.」

「The company received payment for the issuance of new shares upon the exercise of the 21st and 22nd series of stock acquisition rights issued through a third-party allotment on 7 August 2017, increasing share capital and capital surplus by ¥241 million each.」

「At a Board of Directors meeting held on 19 July 2017, the company resolved to issue the 21st and 22nd series of stock acquisition rights with revised exercise price provisions through a third-party allotment. Payment for the stock acquisition rights was completed on 7 August 2017. Amount of funds raised ¥5,449 million (Note) Exercise period 8 August 2017 to 7 August 2020」

「To strengthen its financial foundation and secure growth capital, the company extended the maturities of its borrowings, established a commitment line, and raised funds through a public offering, among other measures. It has also sought to reduce borrowings in stages from the perspective of optimizing its capital structure. Going forward, the company will raise funds required for its growth strategy while implementing further measures to strengthen its financial foundation.」

「To secure human resources and strengthen the financial foundation supporting these strategies, the company transferred its shares to the First Section of the Tokyo Stock Exchange in December 2016.」

「The company also plans to strengthen the financial foundation supporting these strategies and expand its capital policy options.」

「The company also plans to strengthen the financial foundation supporting these strategies and expand its capital policy options.」