Regarding the Filing of a Tax Litigation by a Consolidated Subsidiary

Overview of Corporate Restructuring

Inteia Holdings, Inc., a consolidated subsidiary of our group, conducted corporate restructurings including share exchanges during the fiscal years from March 2018 to March 2022. The Tokyo Regional Taxation Bureau’s voluntary tax audit found that certain corporate restructuring actions did not result in changes in consolidated tax filing status, and consequently denied part of the past tax loss carryforwards as deductible expenses. In response, payments of approximately 2.1 billion yen (corporate tax, local corporate tax, and additional tax for underreporting) were made. Dissatisfied with the tax authorities' decision, we filed an appeal with the National Tax Tribunal under the law, but received a dismissal decision in July 2025. Based on this, on December 26, 2025, we filed a lawsuit with the Tokyo District Court to seek the cancellation of the correction notice.

Purpose and Background of the Restructuring

The corporate restructuring was carried out to optimize the group’s organizational structure, including share exchanges within the group. Our group is confident that the corporate restructuring actions and the group’s tax treatments were legitimate and appropriate based on thorough examination involving experts. We recognize that this aimed to ensure appropriate tax treatment across the group and to improve management efficiency.

Impact on Shareholders and Investors

Although the filing of the tax litigation has resulted in payments of approximately 2.1 billion yen, no heavy additional tax has been imposed. While the restructuring has an impact on consolidated performance, we assert the legitimacy of the corporate restructuring actions and will continue to comply with applicable laws and regulations while fulfilling appropriate tax obligations. There is no explicit direct impact on capital structure or dividend policy. We request investors’ understanding of our group’s response.