1. Purposes of and crushed for the Third-Party Allotment

The Kadokawa Group advocates a “global media premix with technology” arsenic its cardinal strategy that combines the unchangeable instauration of intelligence spot (IP) consisting of a assortment of portfolio contented chiefly successful the Publication, Video, Game, Web Service, and Education businesses arsenic good arsenic the rollout of this IP connected a planetary standard done the extended usage of technology, seeking to execute sustained maturation and heighten firm worth from medium- to agelong word perspectives. FromSoftware is driving the Game Business arsenic it has continually been creating world-famous works, specified arsenic Sekiro: Shadows Die Twice and Elden Ring, leveraging its precocious crippled IP improvement strength. With an oculus connected further enlargement of the Game Business, the Group recognizes the enhancement of capabilities for the creation, improvement and deployment of crippled IP arsenic 1 of the Group’s highest priorities. In enactment with this policy, the Company has decided to person FromSoftware instrumentality money procurement by mode of a Third-Party Allotment to Sixjoy and SIE, the scheduled allottees, for the reasons outlined below.

Tencent acquired superior successful Guangzhou Tianwen Kadokawa Animation and Comics Co., Ltd., a consolidated subsidiary of the Company, successful 2016, and the 2 companies person been jointly promoting their media premix strategy targeting the Chinese market. In addition, the Company, Sixjoy and Tencent Japan entered into a superior and concern confederation statement arsenic of October 2021 to fortify their strategical confederation successful the anime and crippled fields. Tencent and its subsidiaries and affiliates (hereinafter, the “Tencent Group”) are a planetary Internet radical that provides communication, social, gaming, integer content, advertising, fintech and unreality services, and operates the starring connection and societal level successful the Internet manufacture successful China.

Sony and its subsidiaries (hereinafter the “Sony Group”) and the Company person developed a collaborative concern narration crossed a wide scope of areas related to the Sony Group’s planetary Direct-to-Consumer (DTC) concern operations, branded hardware concern and games business. In February 2021, the Company conducted a third-party allotment with Sony arsenic the allottee with the purpose of strengthening its narration with the Sony Group implicit the agelong term, and creating caller IP of the Company and maximizing the utilization of its existing IP successful anime and crippled fields.

Through the implementation of the money procurement, FromSoftware volition purpose to proactively put successful improvement of much almighty crippled IP for itself to fortify FromSoftware’s improvement capabilities and volition question to found a model that allows the enlargement of the scope of its ain publishing successful the importantly increasing planetary market. In summation to these purposes, for an summation of the fig of users successful the planetary marketplace for crippled IP that FromSoftware creates and develops, FromSoftware decided to behaviour the Third-Party Allotment to Sixjoy wrong the Tencent Group, which has spot successful its capabilities to make and deploy mobile games and different web technologies successful the planetary marketplace including China, and SIE wrong the Sony Group, which has spot successful its capabilities to deploy IP successful games, videos and assorted different media successful the planetary market, concurrently and separately.

2. Outline of Third-party Allotment

• Payment Period: From September 7, 2022 to September 12, 2022
• Number of New Shares to Be Issued: 3,179 shares of communal stock
• Issuance Price: 11,450,000 yen per share
• Capital to Be Acquired: 36,399,550,000 yen
• Method of Subscription oregon Allotment (Scheduled Subscriber): By mode of a third-party allotment (Sixjoy 1,703 shares, SIE 1,476 shares)
• Shareholding Ratio After Issuance:
  • Kadokawa Corporation: 69.66%
  • Sixjoy Hong Kong Limited: 16.25%
  • Sony Interactive Entertainment Inc.: 14.09%

(Note) Payment related to the Third-Party Allotment, which is expected to beryllium made connected September 7, 2022, whitethorn instrumentality spot connected different time during the supra outgo play owed to procedures required for planetary remittance, among different factors.

3. Use of the Capital (Total Paid-In Capital: 36,399,550,000 yen)

• Specific Use of Funds:
  • For strengthening FromSoftware’s capabilities to make and make crippled IP.
  • For establishing a model that allows enlargement of the scope of FromSoftware’s ain publishing successful the planetary market.

4. Outline of Subsidiary Subject to Capital Increase

• • Title: FromSoftware, Inc.
  • Location: 2-26-2 Sasazuka, Shibuya-ku, Tokyo
  • Title / Name of Representative: Hidetaka Miyazaki, Representative Director and President
  • Business Contents:
    • Planning, development, income regarding crippled software.
    • Planning and improvement of net content.
  • Capital: 268,500,000 yen

• Date of Establishment: November 1, 1986
• Major Shareholders and Their Shareholding Ratios:
  • Kadokawa Corporation:
    • Direct: 100%
• Relationship betwixt the listed institution and the applicable company:
  • Capital relationships The Company holds 100% of the outstanding shares of the company.
  • Personnel relationships Two officers of the Company are seconded to the applicable company.
  • Business relationships The Company and the applicable institution person concern transactions.

5. Outline of Scheduled Subscribers

• Title: Sixjoy Hong Kong Limited
• Location: 29/F., Three Pacific Place, No. 1 Queen’s Road East, Wanchai, Hong Kong
• Title / Name of Representative: Wang Zheng, Director; Ai Ximin, Director; Byun Jung-won Elizabeth, Director; and Tse Cheuk Yin Tiffany, Director
• Business Contents: Licensing and publishing of mobile games.
• Capital: 1,000 Hong Kong dollars
• Date of Establishment: February 28, 2011
• Major Shareholders and Their Shareholding Ratios:
  • Tencent Holdings Limited:
    • Indirect: 100％
• Relationship Between the Listed Company and the Relevant Company:
  • Capital Relationships:
    • The applicable institution is simply a holder of 9,724,400 shares (ratio of ownership voting rights: 6.86%) of the Company’s banal (Note 1).
  • Personnel Relationships:
    • Not applicable.
  • Business Relationships:
    • The Company and the Tencent Group person maintained a strategical concern successful the publishing concern done a associated task institution successful Guangzhou, China since 2016. In addition, the Company, Tencent Japan, and the allottee Sixjoy entered into a concern confederation statement arsenic of October 29, 2021 to fortify their strategical confederation successful the animation business.

(Note 1): This point is based connected the ample shareholder study submitted by Sixjoy connected November 16, 2021.

(Note 2): In the stock subscription statement that the Company and FromSoftware entered into with Sixjoy the Company and FromSoftware person received a practice and warranty from Sixjoy that it is not an antisocial unit and it has nary relationships with antisocial forces. The Company besides commissioned JP Research & Consulting, Inc.

(Address: 3-7-12 Toranomon, Minato-ku, Tokyo; Representative: Keisuke Furuno, Representative Director), an autarkic probe organization, to behaviour an investigation. The study they produced states that determination are nary facts that bespeak Sixjoy is progressive with antisocial forces. Based connected the above, the Company determined that Sixjoy, Tencent, their officers and large shareholders person nary relationships with antisocial forces.

• Title: Sony Interactive Entertainment Inc.
• Location: 1-7-1, Konan, Minato-ku, Tokyo
• Title / Name of Representative: Jim Ryan, Representative Director and President
• Business Contents:
  • Planning, development, and income of hardware, software, content, and web services for PlayStation.
  • Planning, development, and income of “toio,” software, and content.
• Capital: 110,000,000 yen
• Date of Establishment: April 1, 2010
• Major Shareholders and Their Shareholding Ratios:
  • Sony Group Corporation:
    • Direct: 100％
• Relationship Between the Listed Company and the Relevant Company:
  • Capital Relationships:
    • Sony, the genitor of the applicable company, is simply a holder of 2,844,950 shares (ratio of ownership voting rights: 2.01%) of the Company’s banal (as of the extremity of March 2022).
  • Personnel Relationships:
    • Not applicable.
  • Business Relationships:
    • The Company engages successful transactions specified arsenic the merchantability and acquisition of finished products and services with Sony and its affiliated companies.

(Note) In the stock subscription statement entered into with SIE, the Company and FromSoftware received a practice and warranty from SIE that it and its officers are not an antisocial unit and they person nary relationships with antisocial forces successful notation to the stock subscription agreement. Sony, the genitor institution of SIE, is listed connected the Tokyo Stock Exchange. By confirming its basal stance for the elimination of antisocial forces and constitution of applicable systems therefor, which were referred to arsenic matters concerning the interior power systems successful the Corporate Governance Report that Sony submitted to the Tokyo Stock Exchange, Inc. connected July 5, 2022 the Company determined that Sony and its officers had nary transportation whatsoever with antisocial forces.

6. Schedule for the Third-Party Allotment

• Resolution of the Board of Directors and General Shareholder Meeting of FromSoftware: August 31, 2022
• Date of Share Subscription Agreement Regarding the Third-Party Allotment: August 31, 2022
• Payment Period: From September 7, 2022 to September 12, 2022

(Note) Payment for this third-party allotment is scheduled to beryllium made connected September 7, 2022.

7. Future Outlook

The Company believes that the Third-Party Allotment volition lend to the medium- to semipermanent betterment of the Group’s firm value, portion the interaction of the Third-Party Allotment connected the Company’s consolidated fiscal results for the fiscal twelvemonth ending March 31, 2023 is expected, astatine the clip of this report, to beryllium minor. When determination is simply a request for the disclosure of information, the Company volition promptly supply the information.