English translation

Summary of Financial Statements
for the First Quarter of Fiscal Year Ending December 31, 2019
[Japanese GAAP] (Non-consolidated)
May 14, 2019
Company Name
Securities Code
Representative

SymBio Pharmaceuticals Limited
4582
Representative Director,
President and Chief Executive Officer

Listing: Tokyo Stock Exchange
URL: https://www.symbiopharma.com/
Fuminori Yoshida

Contact Person

Director, Head of Corporate Planning & Admin.
Division and Chief Financial Officer

Kenji Murata

TEL +81-3-5472-1125

Scheduled Date to File
Quarterly Report

May 15, 2019

Date of Dividend
Payment (plan)—

Supplementary materials for the quarterly financial statements:

Yes・ No

Holding of quarterly earnings performance review:

Yes・ No(Amounts of less than one million yen are rounded down.)
1. Business Results for the First Three Months of FY 2019 (January 1, 2019 to March 31, 2019)(1) Operating Results (cumulative)(Percentages indicate year-on-year changes.)
Net Sales
Operating Profit (Loss) Ordinary Profit (Loss)
Profit (Loss)
Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen

%

1,611
888

81.4
2.1

(595)
(714)

—
—

(616)
(748)

—
—

(616)
(759)

—
—

Q1 FY 2019
Q1 FY 2018

Earnings (Loss)
per Share

Diluted Earnings
per ShareYen

Yen

Q1 FY 2019
(7.48)—Q1 FY 2018(13.28)—(Note) Diluted earnings per share is not stated above due to loss per share, despite the potential dilution of shares.
(2) Financial Position
Total Assets

Net Assets

Millions of yen

Q1 FY 2019 (as of March 31, 2019)
FY 2018 (as of December 31, 2018)(Reference) Shareholders’ equity:

Equity Ratio

Millions of yen

5,576
6,239
Q1 FY 2019 (as of March 31, 2019)
FY 2018 (as of December 31, 2018)

%

4,524
4,901
3,951 million yen
4,371 million yen

70.9
70.1

2. Dividends
Annual Dividend per Share
2nd Quarter
3rd Quarter
Fiscal Year End

1st Quarter
FY 2018
FY 2019
FY 2019 (Forecast)

Full Year

Yen

Yen

Yen

Yen

Yen

—
—

0.00

—

0.00

0.00

0.00

—

0.00

0.00

(Note) Revision of dividend forecasts recently announced:

Yes・ No3. Earnings Forecasts for FY 2019 (January 1, 2019 to December 31, 2019)
Operating
Profit (Loss)

Net Sales
Full Year(Percentages indicate year-on-year changes.)
Earnings (Loss)
Profit (Loss)
per Share

Ordinary
Profit (Loss)

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen

%

Yen

4,465

16.4

(3,587)—(3,612)—(3,616)—(43.88)(Note) Revision of earnings forecasts recently announced:

Yes・ No

Notes:(1) Application of special accounting treatment in preparation of quarterly financial reports: Yes ・ No
(2) Changes in accounting policies, changes in accounting estimates and restatements after error corrections(a) Changes in accounting policies due to revision of accounting standards:

Yes ・ No(b) Changes in accounting policies due to other reasons:Yes ・ No(c) Changes in accounting estimates:

Yes ・ No(d) Restatements after error corrections:

Yes ・ No

(3) Number of shares outstanding (common stock)(i) Number of issued shares at the end of theperiod (including treasury shares)(ii) Number of treasury shares at the end of
the period(iii) Average number of shares during theperiod (cumulative)

Q1 FY 201983,398,924 shares

FY 2018

82,398,924 shares

Q1 FY 201975 shares

FY 201875 shares

Q1 FY 201982,476,627 shares

Q1 FY 201857,221,360 shares* Summary of the quarterly financial statements is not subject to quarterly reviews by certified public accountants or accounting
corporations.
* Explanation regarding the appropriate use of earnings forecasts and other matters
All forecasts presented in this document, including earnings forecasts, are based on the information currently available tomanagement and assumptions judged to be reasonable. Actual results may differ substantially from these forecasts due to various
factors. Regarding the assumptions on which the Company’s earnings forecasts are based and their usage, please refer to “1.
Qualitative Information on Quarterly Financial Results, (3) Explanation of earnings forecasts and other forward-looking
information,” on Page 7 of the attachment.

Index of the attachment

1. Qualitative Information on Quarterly Financial Results .................................................................................................. 1(1) Explanation of business results ................................................................................................................................... 1(2) Explanation of financial position ................................................................................................................................ 4(3) Explanation of earnings forecasts and other forward-looking information ................................................................ 4
2. Quarterly Financial Statements and Primary Notes ......................................................................................................... 5(1) Quarterly balance sheet .............................................................................................................................................. 5(2) Quarterly statement of income .................................................................................................................................... 7(3) Notes to quarterly financial statements ....................................................................................................................... 8(Notes to going concern assumptions) ......................................................................................................................... 8(Notes to significant changes in shareholders’ equity) ................................................................................................. 8(Significant subsequent events) .................................................................................................................................... 9

1. Qualitative Information on Quarterly Financial Results(1) Explanation of business results
Progress in the Company’s business for the first three months of the fiscal year under review is as follows.
(i) Domestic[Preparation for the establishment of the Company’s own salesforce]
In October 2018, the Company began preparations to establish its own salesforce for the sale of TREAKISYM ® in Japan, forthe purpose of maximizing benefit to patients and shareholders after the expiration of a business partnership agreement with Eisai
Co., Ltd. (“Eisai”) in December 2020. The Company’s top management objectives in terms of business development are to attainprofitability in the fiscal year ending December 31, 2021 and to achieve sustainable growth thereafter. By transitioning to its own
salesforce in early 2021, the Company plans to make the achievement of these objectives a firm likelihood.
The Company sees 20 TREAKISYM® managers forming the core of its salesforce’s framework and progressed necessary
recruitment by March 31, 2019 as planned. It is now beginning to work on establishing a high-performance commercialorganization which is highly productive based on deep expertise and abundant experience. In parallel, it has begun building
infrastructure for logistics, distribution, and information systems.
[Anticancer agents: SyB L-0501 (lyophilized powder formulation), SyB L-1701 (ready-to-dilute (“RTD”) formulation), SyB L1702 (rapid infusion (“RI”) formulation), and SyB C-0501 (oral formulation) (generic name: bendamustine hydrochloride; trade
name: TREAKISYM®)]
The Company markets TREAKISYM® in Japan through its business partner, Eisai. The Company obtained manufacturing andmarketing approval for first-line treatment of low-grade non-Hodgkin’s lymphoma (Note 1) (low-grade NHL) and mantle cell
lymphoma (MCL) in December 2016, for recurrent/refractory low-grade NHL and MCL in October 2010, and for chronic
lymphocytic leukemia (CLL) in August 2016. Following this indication expansion, TREAKISYM ® is steadily increasing its
market share in the area of first-line treatment by replacing R-CHOP, the conventional standard treatment, at medical clinics andhospitals. Further, the combination treatment (BR therapy) of TREAKISYM® and rituximab was newly included in the
Guidelines for Tumors of Hematopoietic and Lymphoid Tissues 2018 edited and published by the Japanese Society of
Hematology in July 2018, becoming recommended as a choice for standard treatment to all indications which have already been
approved. With this development, TREAKISYM® has been effectively establishing its foothold as the standard treatment for
malignant lymphoma. Sales (NHI price basis) for the first three months of the fiscal year ending December 31, 2019 posted arobust 11.0% increase year on year.
In addition to the three already-approved indications, the Company is conducting a Phase III clinical trial for TREAKISYM®
targeting recurrent/refractory diffuse large B-cell lymphoma (r/r DLBCL) and making steady progress toward obtaining approval.
The trial is in response to serious need at clinics and hospitals as there is currently no reliable standard treatment. Patient groups
and academic society have petitioned to the regulatory authorities for the approval of BR therapy. With a view to providing new
therapeutic alternatives and maximizing product value, the Company began the Phase III clinical trial in August 2017 and, after
enrolling its first patient in January 2018, steadily continued to accumulate cases, finally completing the enrollment in April
2019. After the follow-up period for enrolled patients is complete, the Company will promptly proceed with preparations for an
approval of the Company’s application for the additional indication.
In addition the Company entered into an exclusive license agreement with Eagle Pharmaceuticals, Inc. (head office: New
Jersey, U.S.) (“Eagle”) in September 2017, under which Eagle licensed to the Company rights under Eagle’s intellectual property
to develop, market, and sell Eagle’s TREAKISYM® liquid formulation (RTD and RI liquid formulations) (Note 2) in Japan. The
shift to liquid formulation will further enable the Company to extend the product life until 2031 through patent protection, whilebringing significant benefit and value to patients and healthcare providers by easing their burdens. At present, after being
consulted with the Pharmaceutical and Medical Devices Agency, the Company has already been in the process of diligent
preparation for approval of its application concerning RTD liquid formulation products. A clinical trial for RI liquid formulation
began in November 2018, with the primary goal of confirming its safety. The first patient enrollment for this clinical trial wascompleted in April 2019.
Further, the Company acquired approval for the partial change to the manufacturing and marketing authorization in July 2018.
As a result, TREAKISYM® can now be used in combination with not only rituximab but also other new anti-CD20 antibodies forthe treatment of CD20 positive follicular lymphoma (FL), a common histologic type of low-grade NHL. This also enables
obinutuzumab (Note 3) (one of new anti-CD20 antibodies, launched in August 2018) to be used in combination therapy and the―1―Company to provide patients with a choice of new treatment. In March 2019, the Company received approval for partial changes
to its manufacturing and marketing authorization concerning the use of TREAKISYM® as a pretreatment agent for tumorspecific T-Cell infusion therapy. (Note 4) This will allow TREAKISYM® to be used as a pretreatment for Kymriah® intravenous
infusion (Note 5), which was approved as the first chimeric antigen receptor T-cell (CAR-T) therapy (Note 6) in Japan in March 2019,
after it launches.
In addition to the intravenous formulation currently under development and on sale, the Company is exploring the potential of
TREAKISYM® as the treatment for solid tumors and autoimmune diseases through the development of an oral formulation, withan aim to solidify its business through a platform of TREAKISYM ® products. Amid such initiatives, the Company commenced a
Phase I clinical trial for progressive solid tumors in January 2018, with the aims of examining the recommended dosage andadministration schedule as well as tolerability and safety of the oral formulation of TREAKISYM ®, and identifying potential
target tumor types. After completing enrollment of the first patient in May 2018, the Company is currently working toaccumulate cases. Meanwhile, with a view to evaluating the effect of oral administration of TREAKISYM ® on the immune
system, the Company concluded a joint research agreement with Keio University in May 2018 to conduct a preclinical trial toverify the therapeutic effect of this product in the treatment of systemic lupus erythematosus (SLE), an autoimmune disease thatis giving rise to extremely high treatment demand. The preclinical trial is currently underway.
(Note 1)

Non-Hodgkin’s lymphoma (NHL) is a generic term of all types of malignant lymphoma other than Hodgkin’s
lymphoma. Malignant lymphoma refers to malignant growths that form when the lymphatic corpuscles inside of whiteblood cells become cancerous. The majority of malignant lymphoma identified in Japanese patients is non-Hodgkin’s
lymphoma.

(Note 2)

RTD and RI are predissolved liquid formulations that differ from the currently available freeze-dried (“FD”) powder
formulation. RTD (ready-to-dilute) will significantly reduce the preparation time and labor cost for healthcare
providers, and RI (rapid infusion) will reduce infusion duration to 10 minutes from the current 60 minutes, providing
significant benefit and value to both patients and healthcare providers.

(Note 3)Obinutuzumab (Gazyva®, marketed by Chugai Pharmaceutical Co., Ltd.): Like rituximab recommended by treatment
guidelines for non-Hodgkin’s lymphoma in Japan and overseas, obinutuzumab is a glycoengineered type II anti-20
monoclonal antibody that directly binds to CD20 (a protein expressed on B-cells other than stem cells or plasma cells)
on target B-cells, and attacks and destroys them along with the body’s immune system.

(Note 4)

Tumor-specific T-cell infusion therapy is a treatment method in which tumor-specific T-cells (T-cells that specificallyrecognize cancer cells) taken from cancer patients are artificially bestowed with cancer specificity extracorporeally,
amplified and then administered to the patient.

(Note 5)Kymriah® intravenous infusion (generic name: tisagenlecleucel; marketed by Novartis Pharma K.K.): Kymriah®
intravenous infusion is the first chimeric antigen receptor T-cell (CAR-T) therapy approved within Japan. The
Company received manufacturing and marketing approval for Kymriah® for use in the treatment of CD19 positive
recurrent/refractory B-cell acute lymphoblastic leukemia (B-ALL) and CD19 positive recurrent/refractory diffuse
large B-cell lymphoma (DLBCL) in March 2019.

(Note 6)

Chimeric antigen receptor T-cell (CAR-T) therapy is a type of tumor-specific T-cell infusion therapy that introduces
genes that code chimeric antigen receptors (CARs) into T-cells, amplifies these cells and then infuses them. These
chimeric antigen receptors are produced by combining the intracellular domains of T-cell receptors with the antigenbinding sites of antibodies capable of recognizing membrane antigens attached to tumor cells. In clinical trials using
CARs to target CD19 that expresses on B-cells, CD19-targeting CARs were introduced into T-cells that were later
administered to patients with B-cell tumors. These modified cells produced clear clinical effects.

[Anticancer agents: SyB L-1101 (intravenous formulation) and SyB C-1101 (oral formulation) (generic name: rigosertib
sodium)]U.S. Licensor Onconova Therapeutics, Inc. (head office: Pennsylvania, U.S.) (“Onconova”) is conducting a global Phase III
clinical trial (with trial sites in more than 20 countries) of the intravenous formulation of rigosertib for higher-risk
myelodysplastic syndromes (HR-MDS) which do not respond to the current standard treatment with hypomethylating agents,
which relapse after treatment under the current standard of care, or which are intolerant to hypomethylating agents. The
Company is responsible for clinical development in Japan and in December 2015 began the trial. Forty-three patients wereenrolled as of the submission day. Out of the target of 360 total patients worldwide, 75% had been enrolled as of March 2019.

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Based on the results of the trial, the Company is planning to apply for approval in Japan at the same time as in the U.S. andEurope.
As for the oral formulation of rigosertib, Onconova completed Phase I/II clinical trials in the U.S. for the target indication of
first-line HR-MDS (in combination with azacitidine (Note 7)) and is conducting a Phase II clinical trial for the target indication oftransfusion-dependent lower-risk MDS. The Company started a domestic Phase I clinical trial in June 2017 to confirm thetolerability and safety of the oral formulation of rigosertib for Japanese patients. The first patient was enrolled in October 2017
and the clinical trial is proceeding favorably. After completion of this trial, the Company plans to promptly conduct a Phase I
clinical trial for combination therapy with azacitidine. Further, to apply for approval of the oral formulation of rigosertib in Japanno later than in the U.S. and Europe, it plans to take part in a global Phase III clinical trial for combination therapy withazacitidine for the first-line treatment of patients with higher-risk MDS, which Onconova currently plans to conduct. In order toaccelerate this global clinical trial’s examination process, Onconova applied for a Special Protocol Assessment (SPA) (Note 8) with
the US Food and Drug Administration (FDA) in December 2018. The conclusions regarding this application are projected to bereleased for the first half of 2019. With respect to the development for the target indication of transfusion-dependent lower-risk
MDS, the Company will continue to consider participating from Japan in view of the status of the development by Onconova.
(Note 7)

Azacitidine (Vidaza®: marketed by Nippon Shinyaku Co., Ltd.): This hypomethylating agent (for injection) wasapproved in 2011 upon successful confirmation of extended overall survival for the first time in the Phase III clinical
trial for the indication of MDS. It is currently used as a first-line drug for MDS patients who have difficulties inhematopoietic stem cell transplantation. MDS is a preleukemic state, and decrease in tumor suppressor gene due toexcessive methylation of DNA is thought to be related to the disease. Hypomethylating agents such as azacitidine arethought to suppress progress to leukemia by restoring tumor suppressor gene with a deterrent effect against
methylation of DNA.

(Note 8)Special Protocol Assessment (SPA): A system under which after completion of a phase II trial and prior to the launchof phase III trial, sponsors can reach an agreement with the FDA regarding the phase III trial protocol such as target
illness, purpose, trial design, primary and secondary endpoints, and method of data analysis. The agreement indicatesthat the FDA concurs with the adequacy of the overall protocol design and the design can be used (without changing
the terms) in the approval filing process when the phase III trial is completed. The SPA is intended to shorten FDA’s
review period of new drug application, as it boosts the possibility of drug approval provided the trial endpoints areachieved.

[Patient-controlled pain management drug: SyB P-1501]
In October 2015, the Company entered into an agreement with Incline Therapeutics, Inc., a wholly owned subsidiary of The
Medicines Company (head office: New Jersey, U.S.) for an exclusive license to develop and commercialize SyB P-1501 in
Japan. The Company, acting in the best interest of patients, determined to temporarily suspend new patient enrollment for SyB P1501 from April 21, 2017 due to its arising concern as to the continuity of The Medicines Company’s business regarding the
product.
The Company later initiated arbitration against The Medicines Company on October 11, 2017 under the rules of theInternational Chamber of Commerce, seeking damages of 82 million U.S. dollars (approximately 9.0 billion yen) arising fromThe Medicines Company’s repudiation of the license agreement. The Company claims that The Medicines Company was notable to provide the Company with adequate assurance of performance of its contractual obligations under the license agreement
in light of its decision to discontinue commercialization activities regarding the product and withdraw from markets in the U.S.
and Europe, and that such failure by The Medicines Company is a material breach of the license agreement. Furthermore, theCompany terminated the license agreement on November 30, 2017, based on the fact that breach of the license agreement by The
Medicines Company was not remedied within the stipulated time, and terminated the development of SyB P-1501 on February 9,
2018.
Arbitration proceedings against The Medicines Company are still ongoing.
[New drug candidates]
The Company continues to actively seek new drug candidates and in-licensing opportunities, aiming to expand bothprofitability and growth potential over the long-term aligned with management objectives and strategies, and discussions withmultiple potential licensors are ongoing.
In May 2016, the Company established a wholly owned subsidiary, SymBio Pharma USA, Inc. (head office: Menlo Park,
California, U.S., “SymBio Pharma USA”), as the Company’s planned strategic base for overseas business development.

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Acquiring licenses to new drug candidates through SymBio Pharma USA as the base of global business will be part of theCompany’s continued transformation into a global specialty pharmaceutical company with capability to develop andcommercialize new drugs in the U.S., Japan, Europe, and other major global markets.
(ii) Markets outside Japan
SyB L-0501 is also marketed in South Korea, Taiwan, and Singapore and the product sales of SyB L-0501 in these countries
progressed in line with the Company’s forecasts.
(iii) Business results
As a result of the above, net sales totaled 1,611,458 thousand yen for the first three months of fiscal year ending December 31,
2019, primarily reflecting product sales of TREAKISYM®. Overall net sales rose 81.4% year on year.
Selling, general and administrative expenses totaled 1,204,838 thousand yen (a year-on-year increase of 25.0%), including
research and development (“R&D”) expenses of 471,593 thousand yen (a year-on-year increase of 13.3%) primarily due to
expenses associated with the clinical trial for the intravenous and oral formulations of TREAKISYM® as well as the intravenous
and oral formulations of rigosertib, and other selling, general and administrative expenses of 733,244 thousand yen (a year-onyear increase of 33.9%).
As a result, an operating loss of 595,948 thousand yen was recognized for the first three months of fiscal year ending
December 31, 2019 (compared to an operating loss of 714,524 thousand yen for the first three months of the previous fiscal
year). In addition, including non-operating expenses totaling 20,205 thousand yen primarily comprised of foreign exchange
losses, ordinary loss totaled 616,009 thousand yen (compared to an ordinary loss of 748,913 thousand yen for the first threemonths of the previous fiscal year) and loss totaled 616,959 thousand yen (compared to a loss of 759,692 thousand yen for the
first three months of the previous fiscal year).
Segment information has been omitted as the Company operates within a single segment, which includes the research anddevelopment, manufacturing, and marketing of pharmaceutical drugs and other related activities.

(2) Explanation of financial position
Total assets as of March 31, 2019 stood at 5,576,482 thousand yen, a decrease of 662,940 thousand yen from December 31,
2018. The decrease primarily reflected decreases of 1,199,312 thousand yen in cash and deposits, 376,736 thousand yen inmerchandise and finished goods, and 124,855 thousand yen in consumption taxes receivable, despite increases of 1,025,518
thousand yen in accounts receivable–trade and 22,400 thousand yen in software in progress.
Liabilities stood at 1,051,536 thousand yen, a decrease of 286,086 thousand yen from December 31, 2018, primarily reflecting
decreases of 370,877 thousand yen in accounts payable–trade and 39,455 thousand yen in income taxes payable, offsetting an
increase of 109,112 thousand yen in accounts payable–other.
Net assets decreased by 376,853 thousand yen from December 31, 2018 to 4,524,946 thousand yen, due to a decrease of
616,959 thousand yen in retained earnings following the recognition of loss, offsetting increases of 98,220 thousand yen in sharecapital, 98,220 thousand yen in capital surplus, and 43,665 thousand yen in share acquisition rights.
As a result, the equity ratio consequently rose by 0.8 percentage points to 70.9% from December 31, 2018.

(3) Explanation of earnings forecasts and other forward-looking information
No revision was made to the earnings forecasts for FY 2019 as of the date of this document.

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2. Quarterly Financial Statements and Primary Notes(1) Quarterly balance sheet(Unit: thousands of yen)
FY 2018(as of December 31, 2018)
AssetsCurrent assets
Cash and deposits
Accounts receivable–trade
Merchandise and finished goods
Prepaid expenses
Advances paid
Consumption taxes receivable
Other
Total current assets
Non-current assets
Property, plant and equipment
Buildings, net
Tools, furniture and fixtures, net
Total property, plant and equipment
Intangible assets
Software
Software in progress
Total intangible assets
Investments and other assets
Shares of subsidiaries
Long-term prepaid expenses
Leasehold and guarantee deposits
Total investments and other assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Accounts payable–trade
Accounts payable–other
Income taxes payable
Other
Total current liabilities
Non-current liabilities
Provision for retirement benefits
Total non-current liabilities
Total liabilities―5―

Q1 FY 2019(as of March 31, 2019)

4,821,355
411,720533,824
83,372
31,147
124,855
32,214
6,038,490

3,622,043
1,437,239
157,088
88,80623,992—30,537
5,359,707

36,771
20,18056,95135,956
18,27854,23450,946
20,43071,37648,552
42,83091,3820
1,225
71,37872,604200,932
6,239,423

0—71,15871,158
216,775
5,576,482

726,100
503,637
71,24935,354
1,336,342

355,223
612,750
31,79450,391
1,050,159

1,281
1,281
1,337,623

1,377
1,377
1,051,536

FY 2018(as of December 31, 2018)(Unit: thousands of yen)
Q1 FY 2019(as of March 31, 2019)

12,972,579
12,942,579(21,543,238)(17)
4,371,902
529,897
4,901,799
6,239,423

13,070,799
13,040,799(22,160,198)(17)
3,951,383
573,5624,524,946
5,576,482

Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Share acquisition rights
Total net assets
Total liabilities and net assets―6―

(2) Quarterly statement of income(For the first three months of the fiscal year ending December 31, 2019)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit (loss)
Non-operating income
Interest income
Interest on tax refund
Other
Total non-operating income
Non-operating expenses
Commission expenses
Share issuance cost
Foreign exchange losses
Total non-operating expenses
Ordinary profit (loss)
Extraordinary losses
Loss on retirement of non-current assets
Total extraordinary losses
Profit (loss) before income taxes
Income taxes–current
Total income taxes
Profit (loss)

Q1 FY 2018(from January 1, 2018
to March 31, 2018)888,229
638,729
249,500
964,024(714,524)(Unit: thousands of yen)
Q1 FY 2019(from January 1, 2019
to March 31, 2019)
1,611,458
1,002,568
608,890
1,204,838(595,948)

405
116
54
575

67
76
—
144

2,736
5,012
27,21534,964(748,913)

2,640
757
16,807
20,205(616,009)

9,829
9,829
(758,742)
950
950(759,692)——(616,009)
950
950(616,959)―7―

(3) Notes to quarterly financial statements(Notes to going concern assumptions)None to be reported.
(Notes to significant changes in shareholders’ equity)
During the first three months of fiscal year ending December 31, 2019, new shares were issued upon the exercise of part of the
46th warrant. As a result, during the first three months of the fiscal year under review, share capital and legal capital surplus
increased by 98,220 thousand yen and 98,220 thousand yen respectively, amounting to 13,070,799 thousand yen and 13,040,799
thousand yen respectively as of March 31, 2019.

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(Significant subsequent events)
1. Issuance of the 48th warrant (stock options)On April 22, 2019, the Company issued and granted share acquisition rights in the form of stock options to six directors as
indicated below. This issuance of share acquisition rights was based on a resolution by the Board of Directors on March 28, 2019.
Number of share acquisition rights
3,150 units
Class and number of shares to be issued upon
the exercise of share acquisition rights

315,000 shares of common stock

Issue price of share acquisition rights and total
issue amountIssue price: 19,400 yen
Total issue amount: 61,110,000 yen

Amount to be paid in for share acquisitionrightsAmount to be paid in per share: 194 yen
Individuals who receive share acquisition rights shall offset the amount tobe paid in for the relevant share acquisition rights against cash
compensation equivalent to the amount.

Exercise price of share acquisition rights

Exercise price per share: 1 yen

Exercise period of share acquisition rights

From March 30, 2022 to March 29, 2029

Conditions for the exercise of share acquisitionrights(1) Individuals to whom these share acquisition rights are granted must
hold a position as a director or employee with the Company or with anaffiliate to exercise these rights. However, this will not apply to
directors at the Company or its affiliates who have left their positions
due to expiry of their terms of offices, employees at the Company or
its affiliates who have retired as a result of reaching retirement age or
directors or employees at the Company or its affiliates who have been
deemed to have left their positions or retired amicably by the Board of
Directors.
(2) Other conditions will be as established in the Share Acquisition Rights
Allocation Agreement concluded between the Company and the
directors.

Increase in share capital in case of the issuanceof shares through the exercise of shareacquisition rights

Increases in share capital related to the issuance of shares through theexercise of share acquisition rights shall be equal to one half of the
maximum amount by which share capital can be increased as calculated inaccordance with Article 17 of the Ordinance on Company Accounting.
Any fraction less than one yen arising therefrom shall be rounded up to thenearest one yen.

Matters regarding transfer of share acquisitionrightsTransfers will require approval from the Board of Directors.

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2. Issuance of the 49th warrant (stock options)On April 22, 2019, the Company issued and granted share acquisition rights in the form of stock options to ninety-two
employees as indicated below. This issuance of share acquisition rights was based on a resolution by the Board of Directors on
March 28, 2019.
Number of share acquisition rights

7,165 units

Class and number of shares to be issued upon
the exercise of share acquisition rights

716,500 shares of common stock

Issue price of share acquisition rights and total
issue amountIssue price: 19,400 yen
Total issue amount: 139,001,000 yen

Amount to be paid in for share acquisitionrightsAmount to be paid in per share: 194 yen
Individuals who receive share acquisition rights shall offset the amount tobe paid in for the relevant share acquisition rights against cash
compensation equivalent to the amount.

Exercise price of share acquisition rights

Exercise price per share: 1 yen

Exercise period of share acquisition rights

From March 30, 2022 to March 29, 2029

Conditions for the exercise of share acquisitionrights(1) Individuals to whom these share acquisition rights are granted must
hold a position as a director or employee with the Company or with anaffiliate to exercise these rights. However, this will not apply to
directors at the Company or its affiliates who have left their positions
due to expiry of their terms of offices, employees at the Company or
its affiliates who have retired as a result of reaching retirement age or
directors or employees at the Company or its affiliates who have been
deemed to have left their positions or retired amicably by the Board of
Directors.
(2) Other conditions will be as established in the Share Acquisition Rights
Allocation Agreement concluded between the Company and theemployees.

Increase in share capital in case of the issuanceof shares through the exercise of shareacquisition rights

Increases in share capital related to the issue of shares through the exerciseof share acquisition rights shall be equal to one half of the maximum
amount by which share capital can be increased as calculated inaccordance with Article 17 of the Ordinance on Company Accounting.
Any fraction less than one yen arising therefrom shall be rounded up to thenearest one yen.

Matters regarding transfer of share acquisitionrightsTransfers will require approval from the Board of Directors.

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