Notice Regarding Reduction of Capital and Capital Reserve and Appropriation of Surplus

Overview of Capital Policy

The company will implement a reduction of capital and capital reserve at the 27th Annual General Meeting of Shareholders scheduled for November 26, 2026, for the purpose of covering the deficit in retained earnings. The reduction amounts are 281,065 thousand yen and 205,565 thousand yen, respectively, resulting in capital of 10,000 thousand yen and capital reserve of 0 yen after the reduction. Correspondingly, the transfer destination will be other capital surplus of 486,631 thousand yen, which will be allocated to retained earnings as an appropriation of surplus. This will be a no-consideration capital reduction and will not affect the number of shares held by shareholders or their ownership ratios.

Outlook and Impact

This measure is a reclassification among accounts within net assets and does not affect the company's total net assets, nor does it have a direct impact on operating performance. Implementation is subject to approval at the shareholders meeting and completion of creditor protection procedures. The objective is to establish a refreshed capital policy environment and enable more agile financial management. The planned start date for related procedures is January 5, 2027.