institutions and with experts such as lawyers and tax attorneys.

By including Ricordi in the group's management, the Company seeks to cater to the need for asset management, which is of growing importance in a 100-year life society. The Company will do so by offering a replete product lineup through the RENOSY Marketplace, as well as through improved customer service that provides high value- added services that fits well into customers' life plans. Additionally, Ricordi will further improve customer convenience and increase productivity with the electronic real estate transactions in which the Company excels.

Japanese individuals have a balance of 1,992 trillion yen in individual financial assets in Japan, of which 1,072 trillion yen is in cash and deposits.*3 Ricordi's inclusion in the Company group's leadership will further implement our business philosophy of creating a world-class company that impresses people with technology and innovation, improve the customer experience, and enable one-click real estate purchases, thus helping customers build assets so they can lead lives of abundance.

(*1) According to a February 2021 study by Tokyo Shoko Research, Ltd. See the Company's press release, "RENOSY, No. 1 Nationwide in Compact Condominium Investment for First Time!" (in Japanese, https://www.ga-tech.co.jp/news/8531/).

(*2) From a 2021 survey by TPC Marketing Research Corp. Reference: Itandi press release, "Itandi's Moshikomi Uketsuku-kun Gains Most Users for New Tenant Applications!" (in Japanese, https://www.itandi.co.jp/press_releases/34).

(*3) "Flow of Funds for the Second Quarter of 2021" (https://www.boj.or.jp/en/statistics/sj/sjexp.pdf)

2. Schedule for the Integration

(*1) The above schedule may be subject to change by agreement among the involved companies in the event that such a change is necessary to proceed with the integration.

(*2) The share exchange shall be conducted according to the simple share exchange procedures that do not require approval by a general meeting of shareholders, pursuant to the provisions of Article 796, paragraph 2 of the Companies Act.

(*3) The schedule for the integration is tentative at the present time. As the procedures for the integration move forward, notifications to the Japan Fair Trade Commission may cause changes to the aforementioned schedule.

3. Overview of the Share Acquisition

1. Form of the share acquisition
   The Company will, on December 15, 2021, conclude the agreement on transfer of stock to receive 75 shares of Ricordi stock from Toshitaka Fukuda, and in accordance with the agreement, the Company

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shall receive Ricordi shares in exchange for cash by (tentatively) March 1, 2022.

1. Overview of the counterparty in the share acquisition

1. State of the acquisition: number of acquired shares, value of acquisition, and ownership of stock before and after acquisition

*The value of the acquisition will not be disclosed due to a non-disclosure obligation with Mr. Toshitaka Fukuda.

4. Overview of the Share Exchange

1. Schedule for the share exchange
   See "2. Schedule for the Integration" above.
2. Form of the share exchange
   The share exchange will be executed with the Company as the wholly owning parent company resulting from a share exchange and Ricordi a wholly owned subsidiary resulting from a share exchange. As consideration for the share exchange for Ricordi shareholders, they will be allocated common shares of stock in the Company.
   The share exchange was approved at a general meeting of Ricordi shareholders convened on December 15, 2021. With regard to the Company, the share exchange will be conducted according to the simple share exchange procedures that do not require approval by a general meeting of shareholders, pursuant to the provisions of Article 796, paragraph 2 of the Companies Act.

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1. Allocation under the share exchange
   At the time of the share exchange, the Company will issue 961,600 shares of new common stock, with no treasury shares, to Ricordi shareholders who are listed or recorded on the latest register of Ricordi shareholders other than the Company as of the day prior to the date on which the share exchange comes into effect. In the event that the number of the Company's shares to be issued to an eligible shareholder under the allocation is a fraction less than 1, the matter will be processed in accordance with the provisions of Article 234 of the Companies Act and other relevant laws and regulations.

1. Handling of Subscription Rights to Shares and Bonds with Subscription Rights to Shares Accompanying the Share Exchange
   There are no applicable matters, as Ricordi, the wholly owned subsidiary resulting from the share exchange, will not issue either subscription rights to shares or bonds with subscription rights to shares.
2. Basis for Allocation Under the Share Exchange
3. 1. Overview of valuation
      Since the Company is a listed company with a stock market price, the valuations are based on the stock market price. As a result of negotiations between the parties, the price is 1403.55 yen, based on a valuation using the Company's stock price on trading days in the Tokyo Stock Exchange's Mothers section between and including the dates of November 14 and December 13, 2021. (Excluding dates on which there was no trading, the stock price used was the final average price per share of common stock in the Company, rounded down to the nearest whole number). With regard to the stock price of Ricordi, an unlisted company, to ensure fairness and impartiality, an independent third-party institution, WARC Inc. ("WARC" below), was asked to perform the valuation. Based on the range of the valuation in the valuation book (19.42 million - 29.54 million yen) and following deliberate discussion between the parties, a decision was taken to allot 7124.79 shares of stock in the Company to each share of Ricordi stock.
      When valuing the stock price of Ricordi, WARC applied the discounted cash flow method ("DCF method" below) and comparable company analysis to reflect an appraisal of future business activity.

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The business plan used when valuing Ricordi's stock price is presumed to produce synergies through the integration.

The appraisal range of common shares of Ricordi stock will be as follows in the event that the stock price is 1 per share of the Company's common stock according to the valuation.

The future profit plan, which forms the foundation of DCF valuation and which was produced based on interviews the Company had with Ricordi, includes significant profit/revenue/income fluctuations in its forecasts for the fiscal year compared to the previous fiscal year. Through actions such as streamlining Ricordi's non-consolidated business, Ricordi's operating profit for the fiscal year ending June 2023 is forecasted to grow by 79 million yen compared to the fiscal year ending June 2022, and is forecasted to also grow at a fixed rate each business year thereafter.

1. Relationship with valuation institution
   WARC is a party with no ties to either the Company or Ricordi, and has no noteworthy interests in the share exchange.
2. Reasons for forecasting a delisting
   There are no applicable matters, as the Company will become a wholly owning parent company resulting from the share exchange and Ricordi, which will become the wholly owned subsidiary resulting from a share exchange, is a non-listed company.
3. Steps to ensure fairness
   To ensure fairness and impartiality when determining the cash, etc. to be issued at the time of the share exchange, the Company selected a third-party institution that is independent of the Company and requested said institution to appraise the stock price of Ricordi shares. It should be noted that the Company has not received a fairness opinion from the institution, WARC, on the fairness of the offsetting exchange in the share exchange.
4. Steps to prevent conflict of interest
   As of December 15, 2021, no special steps have been taken because there is no parent company- subsidiary relationship between the Company and Ricordi and there are no executives serving both companies simultaneously.

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