Notice Regarding the Issuance of Paid Stock Options (Subscription Warrants)

Purpose and Overview of Stock Option Issuance

Convano Corporation has resolved to issue 250,000 paid stock options (subscription warrants) to 58 directors and employees, aiming for medium- to long-term business growth and corporate value enhancement. This will result in the issuance of up to 25,000,000 ordinary shares, representing approximately 5.0% of total outstanding shares. The subscription warrants are issued at a fair price and are obtained based on individual investment decisions rather than as compensation. Exercise conditions include performance targets, stock price conditions, and employment requirements, with achievement targets set for adjusted operating income and net sales from fiscal 2027 through fiscal 2032, as well as stock price exceeding 200 yen by the end of March 2029.

Impact on Shareholders and Details of Exercise Conditions

The dilution rate from share increase due to exercising these subscription warrants is approximately 5.0%. However, since exercise is contingent upon meeting performance and stock price conditions, it is judged to contribute to enhancing corporate and shareholder value. The exercise period is set from July 1, 2032, to March 9, 2036, with an exercise price of 124 yen per share. Transfer of subscription warrants requires board approval, and detailed provisions are established regarding treatment during corporate reorganizations. The allocation date and payment due date are both March 10, 2026.