January 13, 2023
Kidswell Bio Corporation
Code: 4584 (TSE Mothers)
Masaharu Tani, President & CEO

The Company’s opinion on shareholders’ proposal(Excerpt from Japanese version)

Tokyo, January 13, 2023 –As announced on Dec. 6, 2022 in the “Announcement of request forconvocation of extraordinary meeting of shareholders”, Kidswell Bio Corporation (hereafter the Company)
received a request for the convocation of an extraordinary meeting of shareholders on Dec. 5, 2022 andthe opposition to the proposal on the election of one director (outside) (hereafter the shareholders’proposal) has been resolved at the Board Meeting. Details of the Company’s opinion on the shareholders’proposal are below.
1. Shareholders who made the proposal
Mr. Koichi Otomo, former President & CEO of Advanced Cell Technology and Engineering Ltd. (ACTE),
and four other shareholders
2. Proposal by the shareholders(1) Purpose of the extraordinary meeting of shareholders
Election of One (1) Director (outside)(2) Reasons for convocation
As a solution for improvement of stock prices, Mr. Otomo, who has a track record of media
exposure as former president & CEO of ACTE and is also the largest retail investor of theCompany, is expected to be able to build a relationship and a trust with shareholders and improve
corporate value.

3. Opinion of the KWB’s Board of Directors on shareholders’ proposal
The Board of Directors opposes the shareholders’ proposal for the following reasons.
【Summary of the opinion of the Company’s Board of Directors】① The Board of Directors has considered that the candidate is not suitable as a director of the Company
for the following reasons.

 Through good relationships with various stakeholders (shareholders, patients, doctors, academia,CROs, CDMOs, pharmaceutical companies, etc.), our top priority is to promote research anddevelopment for the creation of innovative new biologic drugs, cell therapies, and new biosimilars forpatients who are waiting for, and to steadily provide launched biosimilar products. As a result, theCompany aims to improve corporate value and stock price, and our directors are required to have theability to supervise the execution status of these operations from multiple perspectives.

 The candidate contributed to improve ACTE’s stock value as the founder of ACTE. However, as theCompany is engaged not only in the cell therapy business but also in the biosimilar and new biologics
business, etc., and the skills of the candidates differ from the required skills of directors in thesebusinesses (especially specialized knowledge of drug development and strict compliance knowledge
and experience at listed companies), it is difficult to expect timely and appropriate exchange ofopinions and decision-making. In addition, although the Company is not considering adding directors
to improve the stock price, even if the Company dares to consider new directors for such purpose, theCompany’s cell therapy business has progressed, e.g., completion of SHED (stem cells from human
exfoliated deciduous teeth) Master Cell Bank (MCB), and the current stage of the Company’s celltherapy business is significantly different from the time when the Company acquired ACTE.
Therefore, the Board of Directors determined that the experience and knowledge of the candidate is
not effective in improving the corporate value and stock price of the Company. After considering
these factors, the Board of Directors of the Company has resolved that there is no need to add acandidate as a director of the Company.
② The advertising activities proposed by the candidate differ from the Company's IR and PR policies.

 Considering the Company's current stock price trends, for the improvement of the Company's stock
price over the medium to long term, it is indispensable to have institutional investors in Japan andoverseas correctly understand the growth potential of each pipeline developed and to reach a wide
variety of investors who invest in the Company over the medium to long term.

We believe that it isimportant to provide timely information to investors such as analysts with deep knowledge of thepharmaceutical field, showing the progress of our development and published data on efficacy fortargeted diseases.

Timely disclosure of scientific information both domestically and internationallyis important for our current IR and PR activities (information disclosure that encourages appropriate
investment decisions), and the Company believes that the proposed advertising activities on TV

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programs and newspapers will not lead to investment from institutional investors or a sustainable
increase in stock prices.
The Company fully understands the importance of information disclosure for general and retailinvestors in an easy-to-understand manner. Under the leadership of the Company's Board ofDirectors and management team, the Company collaborates with advisors and partnercompanies that have professional experience in IR and PR activities, e.g., issuing corporate
reports, holding briefings in cooperation with securities companies, providing explanation videos
on disclosures and approaching to the media. For this reason, the Board of Directors resolvedthat there are no advantages in adding a candidate to the Board of Directors.

Additional explanation of the Company's opinion【Aptitude of the candidate as a director of the Company】
Under the mid-term strategic plan KWB 2.0 announced on May 2022, the Company has been striving for
creating new medical treatment methods in cell therapy and new biologics business. As to developmentof reasonable high-quality biosimilars, the Company has been promoting R&D activities to provide better
access to medical care while reducing the economic burden on patients, and to improve corporate value
through these social contributions.
For realizing better drug discovery with the accumulated development and launch experience ofbiopharmaceuticals, the Company established a hybrid and virtual management business model to pursue
technology alliance with biotech ventures as well as seek and leverage seeds from academia.

Fordeveloping our business, it is crucial to pursue efficiency of pharmaceutical production by optimizing
manufacturing process of the partner companies and to maximize synergistic effects by the combination
with drug discovery technologies.

It is necessary to integrate technologies and know-how throughbusiness alliances through joint research with various bio-ventures, pharmaceutical companies, academia,
etc. in Japan and overseas. Required skills of directors of the Company are as follows.

 Technical knowledge and experience in pharmaceutical development field such as celltherapy, biosimilars and antibody drugs
Working experience in global companies for global business expansionWide range of knowledge and analysis ability in medical industry and pharmaceutical market

 Communication and negotiation skills for partner companies, retail and institutional investorsCompliance

ESG activity experience

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The Board of Directors of the Company determines that the candidate does not have sufficient knowledge
and experience in many of the above skills and experience.

Especially, the candidate does not have thenecessary R&D knowledge and experience for launching pharmaceutical products. Furthermore, as thecandidate does not have strict compliance experience at listed companies, the Board of Directors of theCompany is seriously concerned about keeping steady business activities of the Company and promoting
stable IR & PR activities based on the sound business management of the Company.
Although the candidate insists that he is the former President & CEO of ACTE as the founder of launching
the business related to SHED MCB, the Company made ACTE a wholly owned subsidiary of the Company
through a share exchange in 2019, and the Company divested culture supernatant and pulp cell banking(business for individuals and clinics) business. In 2022, the Company completed manufacturing SHEDMCB (a clinical SHED banking for pharmaceutical research and development), and the Company has
been developing the Company’s pipelines while fundamentally sorting out ACTE’s business.

TheCompany has been striving for cell therapy business utilizing SHED and accelerating R&D activities of
SHED business expansion both domestically and globally.
In this way, since the current state of the SHED business is significantly different from the businesssituation at the time of the acquisition of ACTE, the experience and knowledge of the candidate who is not
involved in SHED development after the acquisition is not necessary for the future business expansion ofthe Company, and the Board of Directors resolved that the Company should continue to develop thepipelines and expand the business under the current management member.
【Lack of advertising activities】
The candidate insists that the company's weak stock price is mainly due to a lack of advertising activities,
and that advertising activities using national newspapers and television can be expected to improve thestock price. However, the Company does not believe that advertising exposure of the Company throughadvertising activities proposed by the candidate alone leads to an increase in the stock price.

TheCompany believes that the current challenge for stock prices is not to raise the Company’s recognition,
but to reach more institutional as well as retail investors and carefully disclose information for investment
decisions.
Specifically, it is particularly important for a drug discovery bio-venture like the Company to steadily develop
the R&D pipelines and disclose science-based data with efficacy for diseases and its impact on future
performance, that is, earnings. The culture supernatant and pulp cell banking business that the candidate
managed are for individuals and clinics and, comparing to the research and development of cell therapy
utilizing SHED, which the Company is currently focusing, advertisement objects and the information toconvey are different. Therefore, the Company does not believe that advertisement activities based on4

experience of the candidate are effective in improving the stock price of the Company.

Since theCompany completed manufacturing SHED MCB with the current management member and is now at thestage where the Company begins conducting clinical research and development of SHED based on
scientific data of non-clinical research, the Company believes that it is time to increase the number of
institutional and retail investors and expand the range of investors by timely and sufficiently disclosing
information on investment decisions.

The Company will actively promote information disclosure that

focuses the diversification of the investors.
Moreover, as the Company has already started new IR & PR activities with IR & PR experienced advisors,
there is no doubt from the candidate's background that the candidate does not have sufficient experienceor knowledge to promote IR & PR activities for the current state of business activities and the policies ofthe Company.
From the above reasons, the Board of Directors of the Company resolved that it is not necessary to add
the candidate as a director of the Company and opposes the shareholders’ proposal.
4. Reference information
This is the first time that the Company has received a proposal regarding the appointment of Mr.
Otomo, a candidate for this shareholders’ proposal, to an outside director or similar participationin the management team.

There is no fact that it has been submitted as a proposal at theCompany's Ordinary General or Extraordinary Meeting of Shareholders in the past.
After the acquisition of ACTE, Mr. Otomo held 1,920,750 shares in the shareholder registry as ofSeptember 30, 2019, and then 1,206,150 shares (a decrease of 714,600 shares) as of September30, 2022.
Note:
This notice of The Company’s opinion on the shareholders’ proposal is an English translation of theoriginal Japanese notice. This translation is for your convenience only and Kidswell Bio Corporation does
not guarantee accuracy of this translation.

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【Appendix】

Profile of the candidate
Name of the candidate: Mr. Koichi Otomo
Date of birth: October 18, 1964
Profile:April 1983

Jointed Ishibashi gastroenterological hospitalJanuary 1991

Joined Medical Corporation Foundation Keiwa-kai as a Medical Administration
ManagerJuly 2001

Joined Medical Corporation Ishin-kai as a director and Corporate Strategies Officer

May 2003

Founded O.T. A and appointed as the CEOOctober 2008

Founded Advanced Cell Technology and Engineering Ltd. and appointed as theCEO

March 2019

Made Advanced Cell Technology and Engineering Ltd. a wholly owned subsidiary ofKidswell Bio Corporation (formerly known as Gene Techno Science Co., Ltd.)through a share exchange and became one of the shareholders of Kidswell BioCorporation.

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