Notice Regarding Capital Increase of Consolidated Subsidiary

Overview and Background of Capital Increase

Futaba Industrial Co., Ltd. resolved at the Board of Directors meeting held on February 2, 2026, to increase the capital of its Chinese consolidated subsidiary, Tianjin Shuangxie Machinery Industry Co., Ltd. The capital increase amount is 20.5 million USD (approx. 3.1 billion JPY), bringing the capital after increase to 27 million USD (approx. 4.1 billion JPY). This measure aims to eliminate the subsidiary's excess liabilities and is part of preparations for liquidation procedures following the production suspension and consolidation completion in 2025. Tianjin Shuangxie is a subsidiary engaged in manufacturing and sales of automotive parts, and its financial results for the fiscal year ending March 2025 show net assets of negative 2,543 million JPY, sales of 5,030 million JPY, and net income of negative 2,757 million JPY, indicating a challenging financial situation.

Impact on Performance and Future Outlook

At this point, there is no significant impact on consolidated earnings due to this capital increase; however, the company will promptly disclose any material matters if they arise in the future. Additionally, on the same day, a capital reduction of the Chinese consolidated subsidiary was decided as part of group-wide capital efficiency improvements, with details to be announced separately. This capital increase is part of an organizational restructuring to improve the financial soundness of the consolidated subsidiary and is expected to contribute to the overall management efficiency of the group going forward.