June 19, 2024
BrightPath Biotherapeutics Co., Ltd.
(4594 Tokyo Stock Exchange Growth)
Kenichi Nagai
President and CEO
Contact: Yoichi Takeshita, CFO(mail: irpr@brightpathbio.com)
Announcement of Issuance of Series 17 to 19 Moving Strike Warrants, Conclusion of a Warrant
Purchase Agreement, and Issuance of Unsecured Bonds (Private Placement Bonds)
BrightPath Biotherapeutics Co., Ltd. (“BrightPath” or the “Company”) announces that the Company’s board of
directors approved, at its meeting held on June 19, 2024, a resolution to issue the 17th, 18th and 19th series ofmoving strike warrants (“Series 17 warrants”, “Series 18 warrants” and “Series 19 warrants” respectively, and“Warrants” individually or collectively) to EVO FUND, a prospective allottee (“EVO FUND” or the “Allottee”) andto conclude a purchase agreement for the Warrants with EVO FUND (the “Purchase Agreement”) after the
relevant notification filed under the Financial Instruments and Exchange Act of Japan becomes effective, and toissue the 3rd series of unsecured bonds through a private placement (“Bonds”). The fund procurement to beeffected through the issuance of the Warrants followed by their exercise and the issuance of the Bonds ishereinafter referred to as the “Fundraising” or “Fundraising Scheme.”
Together with the approval of this resolution, the board of directors approved the Company’s acquisition andcancellation of the 16th series of moving strike warrants (“Series 16 warrants”) issued by the Company on
November 30, 2023.
1. Outline of the Offering
1

Allotment date
Total number of2warrants to beissuedJuly 5, 2024
360,000 warrants
Series 17 warrants:

150,000 warrants

Series 18 warrants:

120,000 warrants

Series 19 warrants:

90,000 warrants

Total amount of issue: 2,670,000 yen
3Issue price

Series 17 warrants:

9 yen per warrant

Series 18 warrants:

8 yen per warrant

Series 19 warrants:

4 yen per warrant

36 million shares (100 shares per warrant)
4

Number of

There is no upper limit on the exercise price.

potential shares

The minimum exercise price for each series of the Warrants is 32 yen. If all theissuable

Warrants are exercised at the minimum exercise price, the number of shares tobe issued is 36 million shares.

5

6

Amount of funds tobe raised

2,232,670,000 yen (note)

Exercise price andInitial exercise price for Series 17 warrants:

62 yenconditions for

Initial exercise price for Series 18 warrants:

62 yenmoving theInitial exercise price for Series 19 warrants:

64 yenexercise price(1) Series 17 warrants and Series 18 warrants
The exercise prices for Series 17 warrants and Series 18 warrants are
subject to the initial revision on the trading day immediately following theallotment date and the subsequent revision on each trading day thereafter.
In this regard, a “trading day” means a day on which a trading session isheld on the Tokyo Stock Exchange. The date for revising the exercise priceon any trading day as described above and the date for revising the exercise
price for Series 19 warrants described in paragraph (2) below arerespectively referred to as “Revision Date.” On each Revision Date, theexercise price for Series 17 warrants and Series 18 warrants will be revised
to an amount equal to 96% of the closing price of the Company’s common
stock in regular trading published by the Tokyo Stock Exchange on the
trading day immediately preceding the Revision Date (“Calculation Date”),
rounded down to the nearest one yen. The exercise price applicable after
such revision and the exercise price for Series 19 warrants revised inaccordance with paragraph (2) below are respectively referred to as“Revised Exercise Price.” If, however, the Revised Exercise Price obtained insuch calculation falls below the minimum exercise price, the minimum
exercise price will be adopted as the Revised Exercise Price. In the event
there is no applicable closing price on any Calculation Date, the exercise
price then in effect will remain unrevised. If an event triggering an adjustment
to the exercise price described in Section 11 of the Terms and Conditions for
the Warrants occurs, the exercise price and minimum exercise price then in
effect may be adjusted accordingly.
(2) Series 19 warrants
The exercise price for Series 19 warrants is subject to the initial revision on
the trading day immediately following the allotment date and the subsequent
revision on the third trading day after the immediately preceding RevisionDate. On each Revision Date, the exercise price will be revised to an
amount equal to either: (a) the average value of the closing prices of theCompany's common stock in regular trading published by the Tokyo Stock
Exchange on the three consecutive trading days immediately preceding the
Revision Date, but excluding the days on which no closing price is available(“Calculation Period”), rounded down to the nearest one yen, or (b) 90% of
the closing price of the Company's common stock in regular trading
published by the Tokyo Stock Exchange on the trading day immediately
preceding the Revision Date, rounded down to the nearest one yen,whichever is the higher. If, however, a revised exercise price calculated
above is to fall below the minimum exercise price, the minimum exercise
price will be adopted as the Revised Exercise Price. In the event there is no
applicable closing price on all the trading days of any Calculation Period, theexercise price then in effect will remain unrevised.
If an event triggering an adjustment to the exercise price described in
Section 11 of the Terms and Conditions for the Warrants occurs, the exercise
price and minimum exercise price then in effect may be adjusted
accordingly.

2

7

Method of offering

To be allotted to EVO FUND (the Allottee) by way of the so-called third-partyor allotment

allotment, that is, allotment of securities to specified third parties (which may(Allottee candidate)include specific existing shareholders)(1) Series 17 warrants and Series 18 warrants

8

Exercise period

From July 8, 2024 to July 7, 2026
(2) Series 19 warrants
From July 8, 2024 to July 7, 2027
After the Company’s securities registration statement for the Warrants filed under

9

Other terms andconditions

the Financial Instruments and Exchange Act of Japan comes into effect, theCompany will enter into the Purchase Agreement with EVO FUND. The Purchase
Agreement is going to stipulate that the Allottee’s transfer of the Warrants will be
subject to the approval of the Company’s board of directors.

Note:

The total amount of funds to be raised through the issuance of the Warrants is the sum of the total issue
price of the Warrants and the total value to be contributed through warrant exercise, minus an estimatedamount of various expenses related to the issuance of the Warrants. If the exercise price is revised or
adjusted, the amount of funds to be raised will vary accordingly. The amount of funds to be raised may
decrease if some Warrants are not exercised within the specified exercise period, or if the Company
acquires and cancels some Warrants. The total value to be contributed through warrant exercise, as
referred to above, is calculated on the assumption that all the Warrants are exercised at the initial
exercise price. The amount of funds to be actually procured by the Company may differ from the figures
stated in this table, depending on market conditions in the future.

2. Purpose and Reason for the Offering
BrightPath is a clinical-stage biopharmaceutical company dedicated to the development of innovative cancer
treatment with the mission of creating a world where cancers will become a curable disease. To achieve thismission, the Company has been devoting itself to developing cancer immunotherapy drugs, which have amechanism of killing cancer cells with use of the immune system in the body.1 Presently, the Company is focusing
its management resources on the development of cell therapy agents and antibody drugs, rather than other typesof medicine. Among others, the Company is planning to spend the proceeds from the Fundraising for the following
two objectives.
One is to promote preparatory activities to manufacture cells necessary for starting clinical trials for the
prototype product of BP2202 in the United States. BP2202 is the allogeneic CAR-T platform using NKT cells
manufactured from iPS cells (CAR-iPSNKT).2,3 This platform exhibits the Company’s outstanding originality
worldwide. The other is the effort to gather data in the ongoing antibody drug pipelines, which is the last criticalstep for their commercialization and licensing to pharmaceutical companies.
Since the Company has been procuring new funds in phases in step with the exercise of the existing warrants,
the Company is going to seek alliances or partnering to further obtain funds for collaborative development in
anticipation of the licensing to pharma companies as aforesaid.
The Company’s allogeneic CAR-T platform (CAR-iPSNKT) has a potential to bring innovation to treatment ofhematologic cancers. After the mechanism of action of autologous CAR-T cells had been verified in clinicalsettings, the evolution of CAR-T cell therapy has been leveling off and remaining in a state of being unable to finda path to improvement and develop next-generation products. In this situation, the Company believes that aunique feature of NKT cells is likely to make a breakthrough, which are used in the Company’s platform as effector
CAR-T cells. NKT cells are characterized by the immunostimulatory function to activate surrounding dendritic

3

cells and T-cells. Unlike autologous CAR-T cells, allogeneic CAR-T cells manufactured from non-diseased
donors’ blood are pressured into being eliminated by the patient’s immune system when given to the patient.
Therefore, allogeneic CAR-T cells are inferior to autologous CAR-T cells in respect of durable antitumor effects
and clinical efficacy. In contrast, iPS cell-derived NKT cells, which are adopted in the Company’s platform, canpromote patients’ endogenous T-cell immunity and help their immune cells eliminate cancer cells. In theenvironment where the long-term effects of next-generation CAR-T cell products are yet to be demonstrated inclinical settings, the Company’s strategy of using iPS cell-derived NKT cells is expected to radically reshape thecompetitive landscape.
The Company plans to reinforce its efforts to develop CAR-iPSNKT cells in the United States. This is firstly
because the US has a climate and culture supportive of clinical studies of pioneering drugs and secondly because
major pharmaceutical firms, which are the Company’s prospective licensees, consider the US as a major drug
market and intend to focus on drug development activities there. On the assumption that the Company willconduct a Phase 1 clinical trial for allogeneic CAR-T cell therapy, for which preparatory activities will start soon,
the manufacture of the investigational drug for this trial is going to be outsourced to a US contract development
and manufacturing organization (CDMO). The process for selecting a CDMO is underway, with a particular focus
on whether the cell therapy agent can be properly manufactured at an adequate site. Although recent trends inthe foreign exchange market seem to significantly affect the Company’s burden of development costs, taking on
the challenge in the US will be a path to successful commercialization of this allogeneic CAR-T platform for theCompany as a drug discovery startup.
The proceeds from the Fundraising will be used for the preparatory activities for this Phase 1 clinical trial, which
include, among others: the creation of a master cell bank for cell lines manufactured by transducing CAR-T cells
into iPS cells, the transfer of a NKT cell manufacturing technology from the Company to the CDMO, i.e., thetechnology for differentiation of iPS cells and proliferation of NKT cells, manufacturing tests at the CDMO’s factory,
and tumorigenicity assessment (non-clinical tests).
In the ongoing antibody drug pipelines, the Company’s recent efforts focus on redefining target product profiles(TPP), in order to clarify pharmacological properties and underlying mechanisms of the antibody drugs and to
identify unmet medical needs for specific diseases that can be properly addressed by those antibody drugs. In
the advanced development stage of the Company’s antibody therapeutics program, an antibody drug targeting
specific molecules was created. Based on the outcomes of its clinical trials, the Company was able to find certain
disadvantages and pharmacological effects different from those initially expected. This helped the Company
redefine a direction that the Company should take, and the latest scientific advances have enabled the Company
to identify the field where the Company’s findings described above can be leveraged to the fullest extent. By
exploiting a highly differentiated position of the Company’s antibody development program, the Company ispursuing licensing to pharmaceutical firms. During the course of negotiating with prospective licensees, theCompany may probably need to conduct non-clinical studies to confirm pharmaceutical benefits, pharmacologicaleffects and pharmacokinetics necessary for supporting the preclinical data. The proceeds from the Fundraising
will be used for such data gathering activities.
In 2023, the Company discontinued the Phase 2 clinical trial of the cancer peptide vaccine GRN-1201
conducted in the US, for which non-clinical studies had commenced in 2014. During the COVID-19 pandemic,
the Phase 2 trial for GRN-1201 was delayed while other competing new drugs were discovered or launched.
These situations made it difficult to find a commercial path for GRN-1201, and the Company was forced to revisit
the indications and trial protocols in an attempt to make a fresh start in a different setting. Although the Company
approached over 100 globally operating firms including Chinese pharma companies to find a partner forcollaborative development, this effort ended in vain under the circumstances where new drugs have been4

appearing one after another. As a result of prioritizing both R&D and business development projects, theCompany abandoned the resumption of GRN-1201. Regarding the fully-personalized neoantigen vaccine forwhich the Company embarked on research studies in 2018, it has been developed into an advanced version
called BP1209, capable of more enhanced delivery of antigens.4 After confirming its antitumor efficacy in an
animal model, the Company entered the stage of non-clinical studies and formulation development to prepare
for clinical trials. However, the Company has decided to exclude BP1209 from the scope of prioritized investmentof the proceeds from the Fundraising because the Company has chosen to give priority to cell therapy agent andantibody drug pipelines.
For the fiscal year ended March 2024, the Company recorded 1,168 million yen of net loss mainly due tospending for R&D activities before earning income. As of the end of March 2024, the Company held 1,057 million
yen of cash and deposits. This value is nearly equal to the funding for the new fiscal year since the projected net
loss for the fiscal year ending March 2025 is 927 million yen, as publicly announced on May 10, 2024. In orderto steadily promote R&D efforts in the prioritized areas as explained above, the Company needs to secure a
considerable amount of development funds, while increasing cash reserves and maintaining liquidity to stably
operate business. From this viewpoint, the Company’s present financial condition stands at a level requiring
capital reinforcement. For the purpose of covering business funds for the full year from now on to push ahead
with the development based on the iPS-NKT cell platform and continue the research and development
investment focused on cell therapy agents and antibody drugs, the Company needs to secure expeditious
funding in a way not detrimental to the interests of existing shareholders. For this reason, the Company has
resolved the Fundraising on this occasion.
On November 30, 2023, the Company issued Series 16 warrants and allotted 156,600 warrants (15,660,000
shares) to Macquarie Bank Limited under the scheme called third-party allotment, that is, allotment of securities
to specified third parties. Since 82,501 warrants (8,250,100 shares) had been exercised till today, the total amountprocured by the Company from Series 16 warrants remains at 600,082,000 yen, representing the sum of the total
issue price of 2,722,000 yen and the total exercise price of 597,360,000 yen (580,082,000 yen on a net basis,
after deducting issue expenses). Presently, the Company’s stock price is hovering around 57 yen. This figure isequal to the minimum exercise prices for Series 16 warrants. Since April 2024 until now, that is, till the date offiling the securities registration statement for the Warrants and the Bonds, Series 16 warrants brought 23,132,000
yen in total as a result of the exercise of 4,000 warrants (400,000 shares). In light of the recent trends in thewarrant holder’s exercise, the Company is anxious about a slowdown in the planned fund procurement. Under
these circumstances, the Company determined that it would be necessary to procure new funds in terms of theCompany’s capital policy, more specifically, to issue new warrants after acquiring and canceling unexercised
Series 16 warrants. The Company has therefore passed a resolution to acquire all remaining Series 16 warrants
on July 18, 2024 and then immediately cancel them. Regarding the use of the funds procured from Series 16
warrants, please see Section 11.4.2 (Series 16 warrants (issued under the scheme of third-party allotment)).
BrightPath Biotherapeutics Co., Ltd. Series 2 Unsecured Bonds, which had been issued concurrently with Series
16 warrants, were fully redeemed in April 2024.
<Description of the acquisition and cancellation of Series 16 warrants>
1

Security name

BrightPath Biotherapeutics Co., Ltd. Series 16 Warrants

2

Date of acquisition

July 18, 2024

Number of warrants to3

be acquired and total

74,099 warrants of Series 16 warrants

value

33 yen per warrant (2,445,267 yen in total)ofacquisition(note)

5

4

Date of cancellation
Number5

ofJuly 18, 2024

warrants

remaining unexercisedZeroafter the cancellation
Note: The number of warrants to be acquired and the total value of acquisition are calculated on
the assumption that Series 16 warrants will no longer be exercised on and after today.
<Glossary>
1. Immunity
A system consisting of specific cells, tissues and organs for protecting the body against foreign substancessuch as viruses or pathogens and internal enemies such as cancer cells.
2. NKT cell
NKT cells are immune cells having the ability to directly kill cancer cells and at the same time having an
adjuvant action that activates other immune cells. When activated, NKT cells produce a variety of cytokinesand promote the activation of NK cells belonging to the innate immune system and the maturation ofdendritic cells. Mature dendritic cells further proliferate and activate cytotoxic T-cells (CTL) belonging to theacquired immune system, thereby synergistically enhancing anti-tumor effects. At the same time, NKT cells
can activate the innate immune system and induce the ability of killing MHC-negative tumor cells, whichcannot be killed by T-cells.
3. CAR-T cell
A chimeric antigen receptor T-cell, or CAR-T cell,is an immune cell called “T-cell” into which a chimeric antigen receptor (CAR) that recognize tumor cells of
specific types of cancer is transduced. Cell therapy is a method of treatment by proliferating CAR-transduced
T-cells outside the patient’s body and infusing them into the patient, classified into autologous cell therapy
using T-cells collected from the patient and allogeneic cell therapy using T-cells collected from a nondiseased donor. Allogeneic cell therapy can apply to many different patients, without dependence on typesof human leukocyte antigens (HLA).
4. Fully-personalized neoantigen vaccine
A tailor-made cancer vaccine that searches for neoantigens in cancer cells of individual patients. The clinical
trials for some fully-personalized neoantigen vaccines are underway outside Japan.
3. Overview of the Proposed Fundraising and Reasons for such Proposal
3.1 Overview of the Fundraising
BrightPath examined the possibility of fundraising through indirect financing in light of the Company’s financial
standing and business deployment planning, as well as the ways of raising funds through direct financing. In thecourse of seeking suitable financing solutions, BrightPath has decided to issue the Warrants and the Bonds under
the scheme called third-party allotment (allotment of securities to specified third parties, which may include
existing shareholders), as proposed by EVO FUND. This decision is based on the comparison with otherfinancing alternatives described in Section 3.4 below, after comprehensively considering the advantages anddisadvantages explained in Section 3.3. The Fundraising as proposed is characterized by a scheme of
concurrently issuing the Warrants and the Bonds to the Allottee whereby the amounts paid by the Allottee upon
warrant exercise will be used as funds available to the Company’s business and as the source for redeeming theBonds. This scheme enables the Company to procure a certain amount of funds before the Warrants are
exercised. The Warrants and the Bonds are outlined as follows.

63.1.1 Warrants
The Company will issue and allot 360,000 Warrants to the Allottee in total, which consist of Series 17
warrants and Series 18 warrants exercisable for a period of two years and Series 19 warrants exercisable
for a period of three years. Then, the Allottee’s exercise of those Warrants will bring about an increase in
the Company’s capital.
The outline of the Warrants is as follows. Since the number of the Company’s shares covered by one
Warrant is fixed at 100 shares, the total number of the Company’s shares covered by all those Warrants
is 36 million shares.
The Allottee can, in principle, exercise the Warrants at its sole discretion. Series 17 warrants will be
exercisable on and after the business day immediately following the payment date. Regarding Series 18
warrants and Series 19 warrants, the blackout periods will be stipulated in the Purchase Agreement, which
will be concluded between the Company and the Allottee after the Company’s relevant notification filed
under the Financial Instruments and Exchange Act of Japan comes into effect. The Allottee will be
prohibited from exercising Series 18 warrants for the period of 12 months commencing on the trading day
immediately following the payment date and exercising Series 19 warrants for the period of 24 months
commencing on the trading day immediately following the payment date. If, however, there areunredeemed Bonds, Series 18 warrants can be exercised at any time after Series 17 warrants have been
fully exercised, and Series 19 warrants can be exercised at any time after Series 18 warrants have been
fully exercised, even before the expiration of the time frame specified respectively in the preceding
sentence. In addition, the Company can instruct the Allottee to exercise Series 18 warrants or Series 19
warrants, as the case may be, in whole or in part, before the expiration of the specified time frame in theevent that the Company cannot procure funds as scheduled due to stock price fluctuations or for any otherreason. If the Company provides such instruction, the Allottee may exercise Series 18 warrants or Series
19 warrants, as the case may be, on or after the trading day immediately following the day designated by
the Company, within a range not exceeding the quantity designated by the Company. If the Company
decides to instruct any such accelerated exercise, the Company will publicly disclose this decision in atimely manner.
Series 18 warrants and Series 19 warrants are designed to allow the Company to acquire all or part ofremaining unexercised warrants and partly cancel the Fundraising upon occurrence of any predefined
event. Such events include, for example, the case where the Company no longer needs to procure newfunds after redeeming the Bonds and the case where the Company needs to choose a different financing
solution in the wake of changing circumstances.
The issuance of three series of warrants with staggered exercise periods is expected to prevent existing
shareholders’ equity ownership from being rapidly diluted within a short period. In addition, the Company
can ask for accelerated exercise of warrants for any specific series or acquire remaining unexercised
warrants. In this way, the Fundraising Scheme as proposed is designed to enable the Company to control
the quantities and timing for exercise of the Warrants at some level in light of the Company’s funding needs
or other circumstances.
The exercise price for Series 17 warrants and Series 18 warrants will be revised for the first time on the
trading day immediately following the allotment date and then revised on each subsequent trading day.
On each such Revision Date, the exercise price will be revised to an amount equal to 96% of the closing
price of the Company's common stock in regular trading published by the Tokyo Stock Exchange on the
trading day immediately preceding the Revision Date (or, if no closing price is available on that trading day,the closing price on its immediately preceding trading day), rounded down to the nearest one yen. If,
however, the Revised Exercise Price obtained in this calculation falls below the minimum exercise price,
the minimum exercise price will be adopted as the Revised Exercise Price. Regarding Series 19 warrants,
the exercise price will be revised for the first time on the trading day immediately following the allotment
date and then revised on the third trading day after the immediately preceding revision. On each Revision7

Date, the exercise price will be revised to an amount equal to either: (a) the average value of the closing
prices of the Company's common stock in regular trading published by the Tokyo Stock Exchange on thethree consecutive trading days immediately preceding the Revision Date, but excluding the days on which
no closing price is available, or (b) 90% of the closing price of the Company's common stock in regular
trading published by the Tokyo Stock Exchange on the trading day immediately preceding the Revision
Date, rounded down to the nearest one yen, whichever is the higher. If, however, the Revised Exercise
Price obtained in this calculation falls below the minimum exercise price, the minimum exercise price will
be adopted as the Revised Exercise Price.
3.1.2 Bonds
At the same time as issuing the Warrants, the Company will issue the Bonds to the Allottee (EVO FUND),
with the total amount of issue at 500 million yen, in accordance with the terms and conditions outlined
below, on the understanding that typical conditions precedent have been fulfilled. The proceeds from theexercise of the Warrants will be used to redeem the Bonds, in general, insofar as there are unredeemed
Bonds. In the meantime, there is a possibility that the Warrants may remain unexercised, depending on
price fluctuations of the Company’s common stock in the future. In this case, the proceeds from theexercise of the Warrants cannot be obtained or the total amount procured by the Company may fall below
the initially planned amount. However, the Company will be able to procure funds and increase its cashon hand at the time of issuing the Bonds, even before the Warrants are exercised. That is why theCompany has decided to adopt a scheme of issuing the Warrants and the Bonds simultaneously.
<Outline of Bonds>
1

Bond name

BrightPath Biotherapeutics Co., Ltd. Series 3 Unsecured Straight Bonds

2

Total amount of

500 million yen

the bonds
3

Amount per bond

12,500,000 yen

4Payment dateAugust 1, 2024

5

Maturity dateJuly 31, 2025

6

Coupon rate

0.0% per annum

7

Issue price

100 yen for a 100-yen par value

8

Maturity value

100 yen for a 100-yen par value

9

Method of

One-time lump-sum repayment on the maturity dateredemption(1) With written notice to the holders of unredeemed Bonds at least fivebusiness days prior to the desired date of advanced redemption (“Advanced
Redemption Date”), the Company may redeem all or part of the Bonds thenremaining unredeemed, on the Advanced Redemption Date, at 100 yen per
100-yen par value of each Bond.
(2) If the closing price of the Company's common stock in regular trading on theTokyo Stock Exchange falls below 32 yen (as may be adjusted based on theminimum exercise price of the Warrants then in effect) on five trading days
in total after August 1, 2024, the holders of unredeemed Bonds may at any
time thereafter ask the Company to redeem all or part of the Bonds thenremaining unredeemed, on a specified Advanced Redemption Date, at 100
yen per 100-yen par value of each Bond with written notice to the Company
at least five business days prior to the Advanced Redemption Date.
(3) If all or part of the Warrants have been exercised and the cumulative amount
paid to the Company through such exercise since the issue date of the8Warrants minus the cumulative par value of the Bonds redeemed by theCompany before maturity in accordance with the provisions of the preceding
paragraphs reaches or exceeds an integral multiple of the Bond amount(12,500,000 yen), the Company will redeem the Bonds corresponding to thevalue of such integral multiple, before maturity, at 100 yen per 100-yen parvalue of each Bond. The Advanced Redemption Date in this event will beeither the third business day following the date of the Company’s receipt ofmoney which has caused the cumulative amount described above to reachor exceed an integral multiple of the Bond amount or any other day to be
separately agreed upon by the Company and the Bond holder.
10

Subscriber for the

EVO FUND

total amount
The Purchase Agreement for the Bonds is going to stipulate the following conditions.
(1) Lockup
While the Bonds remain unredeemed, the Company will be prohibited from soliciting subscriptions for
the Company’s common stock or securities convertible to or exchangeable for the Company’s common
stock, establishing any security interest in, issuing or selling such common stock or securities, concluding
their sales agreement, granting the right to purchase or subscribed for them, lending, transferring orotherwise disposing of them directly or indirectly, issuing the Company’s common stock by way of a debtequity swap or any other means, making a swap or any other arrangement to give rise to a transfer of
economic benefits from ownership of the Company’ common stock in whole or in part, and having anyof the acts listed above performed by anyone else who is authorized to act based on the Company’s
instructions, without obtaining the approval of EVOLUTION JAPAN SECURITIES Co., Ltd. (“EJS”) in
writing in advance. However, this restriction will not apply when the Company:(i)performs such act with the Allottee or its affiliate as a counterparty;(ii)

issues or delivers shares of the Company’s common stock by means of a stock split;(iii) allots shares of the Company’s common stock without contribution;(iv) sells the Company’s treasury shares to holders of shares less than one unit pursuant to Article 194,
paragraph (3) of the Companies Act of Japan;(v)

issues or delivers the Company’s stock options or common stock shares under the Company’s
stock option program or stock compensation plan;(vi) issues the Warrants;(vii) issues or delivers shares of the Company’s common stock in response to an exercise of theWarrants or Series 16 warrants; or(vii) is required to perform any such act under applicable laws.
(2) First refusal rightIf the Company intends to issue or deliver its shares, stock options, warrants, bonds or other securities(collectively, “Additional Securities”) to any third party other than the Allottee while the Bonds remain
unredeemed, the Company must notify the Allottee in writing at least three weeks prior to the date forholding a board of directors’ meeting to resolve the issuance or delivery of Additional Securities. Such
written notice (“Additional Securities Notice”) will state their detailed description and major conditions,
including the type of Additional Securities, prices, quantities, payment dates, terms and conditions of thesubscription agreement, and the name and address of the subscriber.
Within one week after receiving an Additional Securities Notice, the Allottee may subscribe for the
Additional Securities in accordance with the conditions stated in the Additional Securities Notice by

9issuing a written notice expressing its intention of subscription to the Company. Only in the absence ofsuch subscription notice from the Allottee, the Company may pass a resolution to issue or deliver the
Additional Securities in accordance with the conditions stated in the Additional Securities Notice.
The foregoing requirements will not apply when:(i)the Company’s stock options are granted or its common stock shares are issued or delivered to its
officers, employees, consultants or advisors under the Company’s stock option program or stockcompensation plan (excluding the cases of issuing shares in response to any exercise of such stock
options) in accordance with the capital policy duly approved by the Company's board of directors,
insofar as the scale of such issue falls below 5% of the total number of issued shares of theCompany (to be calculated based on the number of shares as of the date of execution of thePurchase Agreement);(ii)

the Company’s shares (including class shares or other securities with the right to request
conversion to the Company’s common stock), stock options, bonds, warrants or other securities
already issued as stated in applicable disclosure documents are exercised or converted inaccordance with the conditions stated in the disclosure documents without being modified in any
respect; or(iii) the Company and the Allottee agree in writing to exclude application of the first refusal right.
If the Company breaches the foregoing requirements, the Company must pay a penalty to the Allottee
without delay.
3.2 Reasons for proposing the Fundraising
Before deciding to propose the Fundraising, the Company examined and compared various financing solutions.
Around April 2024, the Company sought advice on fund procurement from EJS, since EJS has a remarkable
track record and know-how for financial arrangements using various forms of securities including stock options,convertible bonds and warrants. Then, the Company received a proposal for the Fundraising Scheme from EJS,
which involves the issuance of both of the Warrants and the Bonds. The Fundraising Scheme, as proposed by
EJS, is considered as a preferable solution in terms of the Company’s business continuity and stability, and it can
mitigate near-term impacts on the Company’s stock price and allow for flexible funding, compared to otherfinancing solutions. For the advantages and disadvantages of the Fundraising Scheme and other alternatives.
please see Sections 3.3 and 3.4. Series 18 warrants and Series 19 warrants are designed to allow the Company
to acquire all or part of remaining unexercised warrants and cancel the Fundraising upon occurrence of any
predefined event. Such events include, for example, the case where the Company no longer needs to procure
new funds after redeeming the Bonds and the case where the Company needs to choose a different financing
solution in the wake of changing circumstances. By invoking this call option when necessary, the Company will
be able to mitigate dilution of existing shareholders’ ownership. Taking into consideration all of the foregoing, theCompany has decided to adopt the Fundraising Scheme.
3.3 Observations about the Fundraising
The advantages and disadvantages of the Fundraising Scheme are as follows.
3.3.1 Advantages(1) Speedy financing
By issuing the Bonds, the Company can procure a certain amount of funds before the Warrants are
exercised. Since the coupon rate is set at 0.0%, the Company will have no burden of interest payment.
(2) Call option
The call option attached to Series 18 warrants and Series 19 warrants enables the Company toacquire and cancel remaining Warrants at its discretion in light of its financial needs or market
conditions in the future, subject to the Company’s payment of the amount equal to the issue price of10Series 18 warrants or Series 19 warrants, as the case may be. Such flexibility is helpful in mitigating
the dilutive effect on existing stockholders.
(3) Saving in funding costs
The Fundraising Scheme consists of three series of the Warrants and the Bonds to be issued
simultaneously, while the Company will receive their proceeds at different times. Rather than carryingout the procedures for decision-making, board resolution and issuance separately for each facility,
the Company can save total funding costs.
(4) Limiting the maximum number of shares to be issued
Since the number of the Company’s common stock shares covered by the Warrants is fixed at 36
million shares in total, the maximum number of shares issuable under the Fundraising Scheme
remain unchanged, regardless of stock price behavior. Therefore, the equity dilution ratio will not
exceed the initially estimated percentage.
(5) Mitigating the impact on the Company’s stock price
The minimum exercise price is set for the Warrants. While the exercise price may be revised or
adjusted according to circumstances, it will never fall below this minimum exercise price. This serves
as a break to avoid oversupply of the Company’s common stock, which could further lower the stock
price, in such situation where the Company’s stock price remains sluggish and seems likely to fall
below the minimum exercise price.
(6) Increase in the amounts to be procured when the stock price is rising
Since the exercise price for the Warrants is supposed to be revised in tandem with the Company’s
stock price, a rise in the stock price will lead to an increase in the amounts that the Company canprocure.
3.3.2 Disadvantages(1) Unable to procure the planned amount in full at the beginning
One characteristic inherent in warrants is that the issuer can raise money only after a warrant holder’s
exercise, which is equivalent to the amount obtained by multiplying the exercise price by the numberof shares covered by the exercised warrants. This means that the total amount expected to be raisedcannot be obtained at the time of issuing the Warrants.
(2) Possibility that the amount of funds raised may fall far below the initially estimated amount if the stock
price is sluggish
When the stock price is on the decline, the exercise price for the Warrants will be revised downward.
If any warrant exercise occurs after such downward revision, the aggregate amount procured fromthe Warrants will fall below the initially estimated amount. If the stock price is lower than thepredetermined minimum exercise price for the Warrants, the Allottee will refrain from exercising theWarrants. In this regard, the exercise price will never fall below the minimum exercise price.
(3) Possibility of a decline in the Company's stock price as a result of the Allottee’s sale of the Company's
common stock shares in the market (a downside risk inevitable under the Fundraising Scheme)
The Allottee’s holding policy for the Company’s common stock is short-term holding. Under this policy,
the Allottee is highly likely to exercise the Warrants and sell the shares acquired through such
exercise in the market. In light of the current liquidity of the Company’s common stock, the Allottee’ssale of shares in the Company may cause the stock price to decline.
Since the exercise price for the Warrants is supposed to be revised in tandem with the Company’s
stock price, new funds from the Warrants are expected to be procured in incremental steps throughthe Allottee’s warrant exercise and stock sale on several occasions. This downward risk is inevitable
due to the features of the Fundraising Scheme.
(4) Limited access to a large number of unspecified prospective investors
Since new securities are issued to the Allottee alone under the scheme of third-party allotment, the11Company has fewer opportunities to interact with an unspecified number of new investors and solicit
their investments.
(5) No blackout period
The Fundraising Scheme is designed to place utmost priority on ensuring highly viable funding withina short period. Therefore, the Fundraising Scheme does not allow the Company to freely set a
blackout period, or a period for which the Warrants cannot be exercised. This means that it is difficult
for the Company to control warrant exercise in a situation where the stock price is on the decline.
3.4 Alternative financing solutions
3.4.1 Capital increase through issuing new shares
3.4.1.1

Public offering

Issuing new shares in a public offering enables the issuer to raise money at once. On the other hand, thefunding size is influenced by the issuer’s market capitalization value and stock liquidity. Taking into
consideration the Company’s capitalization value and stock liquidity, it seems difficult for the Company toprocure its necessary amount through a public offering. A public offering usually requires a long time forprior examination and preparation. In addition, the feasibility of a public offering is greatly affected by stock
price behavior and market forces at that time. Once the Company missed the timing for a public offering,
the Company would be forced to wait for the next opportunity for at least several months in the context ofannual or quarterly financial reporting or registration of securities reports by specified deadlines. Due tothese factors, public offering is less flexible and the Fundraising Scheme as proposed is moreadvantageous and expeditious.
3.4.1.2

Pro rata allotment of new shares to existing shareholders

Under this scheme, subscribes for new shares are existing shareholders only. Whether they will subscribe
for new shares or not is uncertain in light of their financial resources. On a practical level, there are very
few actual cases of this scheme in recent years. For these reasons, it is very difficult for the Company toaccurately estimate the amount that can be procured from pro rata allotment of new shares to existing
shareholders.
3.4.1.3

Allotment of new shares to specified third parties (the so-called third-party allotment of shares)

While third-party allotment is an effective means for immediately raising money at once, it would definitely
cause dilution of earnings per share and directly affect the stock price. Furthermore, the Company isunable to find suitable investors at this moment.
3.4.1.4

Straight-equity issue program (STEP)

STEP is analogous to the Fundraising Scheme in that new funds will be procured through issuance of newshares in phases. However, STEP is less flexible in some other respects. For example, the Company will
be unable to pass a resolution to issue new shares in the form of STEP if there are any undisclosed
material fact on the part of the Company as of the date for fixing the issue price. Under the Fundraising
Scheme, the exercise of the Warrants is, in general, left to the Allottee’s discretion, regardless of any
material facts emerging after the issuance of the Warrants. The Company can therefore promote
negotiations and make important business decisions such as business alliances with no need to disclosematerial facts on the occasion of the Allottee’s warrant exercise.
3.4.2 Convertible bonds (CB) with a fixed conversion priceCB issue is advantageous since the issuer can surely procure its necessary amount at the time of theissue. If, however, the conversion of issued bonds into shares does not proceed as expected, theCompany’s indebtedness will eventually increase, which may affect the Company’s borrowing capacity.
123.4.3 Moving strike convertible bonds (MSCB)In Japan, MSCB is a convertible bond with warrant in which the conversion price is kept floating andrevised in tandem with the underlying stock price. The terms and conditions for issuance and exercise of
MSCB are diversified recently. Since the number of shares to be issued upon conversion depends on theconversion price, the number of shares to be issued in each instance cannot be fixed until the conversion
in question is completed. This structure directly has a significant impact on the underlying stock price. In
this respect, the impact on existing shareholders’ interests is more moderate under the Fundraising
Scheme.
3.4.4 Warrants with a fixed exercise priceIn case of warrants in which the exercise price remains unrevised, the Company will not be able to enjoy
the advantage of a hike in the Company’s stock price. On the other hand, the warrants will not be exercisedwhen the stock price is declining, resulting in failure to procure new funds. This scheme is therefore subject
to a higher degree of uncertainty than the Fundraising Scheme. As another issue, it is difficult at thismoment to set an adequate exercise price, considering the present level of the Company’s stock volatility.
3.4.5 Rights issue
Rights issue is a method of capital increase through granting warrants to all existing shareholders withoutcompensation. In case of a rights issue with underwriting commitment, the Company will enter into anunderwriting agreement with a financial instruments business operator. In case of a rights issue with nounderwriting commitment, such underwriting agreement will not be concluded and the exercise of thewarrants will be left to each shareholder’s discretion. Until today, the former type of rights issue is very rarein Japan, and the Company has no prospect of realizing this scheme. Regarding the latter type of rights
issue, the Company is not qualified for using this solution under the rules established by the Tokyo Stock
Exchange since the Company has recorded a current-account deficit for the most recent two fiscal years.
3.4.6 Debt financing
If the Company raised money from debt financing such as borrowing or issuance of company bonds orsubordinated bonds, the full amount of money procured would constitute the Company’s indebtedness.
This might deteriorate the Company’s financial soundness and undermine its borrowing capacity in the
future. Considering these aspects as well as the intended use of new funds that the Company is going toprocure, the Company has decided to refrain from debt financing at this time.
4. Fundraising Amount, Intended Use and Disbursement Schedule
4.1 Estimated fundraising amount (net)Total amount to be paid in for the Warrants

2,670,000 yen

Value of the property to be contributed through exercise of the Warrants
Total estimated expenses for issue

20,000,000 yen

Net proceeds
Notes

1.

2.

2,250,000,000 yen
2,232,670,000 yen

The total amount to be paid in for the Warrants is the sum of the total issue price of theWarrants of all series (2,670,000 yen in total, obtained by adding 1,350,000 yen for Series
17, 960,000 yen for Series 18 and 360,000 yen for Series 19) and the total value of
property to be contributed through exercise of the Warrants of all series (2,250 million yen
in total, obtained by adding 930 million yen for Series 17, 744 million yen for Series 18
and 576 million yen for Series 19).
The total value to be contributed through exercise of the Warrants is calculated on the

13

3.
4.

assumption that all the Warrants are exercised at the initial exercise price. If the exercise
price is revised or adjusted, the total amount to be paid in for the Warrants and the total
value to be contributed through exercise of the Warrants will vary accordingly. If someWarrants are not exercised within the specified exercise period, or if the Company
acquires and cancels some Series 18 warrants or Series 19 warrants, the total amount tobe paid in for the Warrants and the total value to be contributed through exercise of theWarrants will decrease accordingly.
Total estimated expenses for issue include survey costs, statutory registration costs,
attorney fees, and costs for appraisal of the Warrants.
The amount of total estimated expenses for issue is net of Japanese national and local
consumption taxes.

4.2 Intended use of new funds
The amount of net proceeds from the issuance of the Warrants and their exercise by the Allottee is estimatedat 2,232,670,000 yen in total. These new funds will be used for the following projects.
Project covered by new funds

Amount (Millions of yen)

(1) R&D for cancer immunotherapy pipelines

Total 1,709
1,368• Cell therapy agents• Antibody drugs

341(2) Working capital

523
Total

Notes

1.

2.

3.
4.

Time for disbursement
July 2024 – March 2026
July 2024 – March 2026

2,232

Among the proceeds from the exercise of the Warrants, an amount equivalent to 500
million yen will be scheduled to be used for redeeming the Bonds. However, the primary
purpose of use of the proceeds from the issuance of the Bonds is to cover costs for either
type of the projects described in the table above, whichever will be implemented earlier.
For more details about the Bonds, please see Section 3.1.2 (Bonds).
The funds to be raised will be disbursed preferentially for either type of the projects
described above, which will be implemented earlier. If necessary amounts are notprocured as scheduled, the Company’s disbursement will not go as planned. On the other
hand, if the amount actually procured at any specific time is larger than the planned
amount, the surplus amount will be allocated appropriately to both types of projects in lightof their progress.
The amounts actually procured from the Bonds and the Warrants will be deposited in the
Company's bank accounts or managed in the form of any other low-risk assets until thoseamounts are disbursed for the planned purposes.
If the Company cannot procure sufficient amounts through the Allottee’s warrant exercise
during the scheduled disbursement period, the Company will allocate then available
amounts to the cell therapy agent pipelines in priority to other projects and may seek any
alternative fundraising solution or revise the business plan underway. In addition, theCompany’s procurement of some new funds may occur after one year following the endof the planned disbursement period shown above (July 2027) since the exercise period
for Series 19 warrants falls after such disbursement period. In either case, any change in
the intended use of new funds or their disbursement schedule will be promptly disclosed.

The costs for the projects to be covered by new funds are more detailed as follows.
Whether to exercise the Warrants or not and the timing for exercise depend on the warrant holder’s discretion,
which are beyond the Company’s control. Furthermore, the exercise price for the Warrants may be revised or
adjusted in the future. For these reasons, the amounts of new funds and the schedule for their procurement anddisbursement described here are mere estimates and the actual amounts and time schedule may differ fromthese estimates.
(1) R&D for cancer immunotherapy pipelines

14

The investigator-initiated clinical trial of BP2201, or non-genetically edited iPS cell-derived NKT cells(iPS-NKT), for head and neck cancer has been finished. The next milestone that the Company mustachieve is clinical safety assessment through the world’s first-in-human administration of iPS-NKT cells.
The Company aims to embark on platform licensing transactions for CAR-transduced iPS-NKT (CARiPSNKT, or BP2202) with big pharma. To this end, the Company is developing a prototype productserving as a model for CAR-iPS-NKT, which is desired by big pharma. Using this prototype product, theCompany is going to gather experimental data for profiling the properties of CAR-iPSNKT. New funds
will be used not only for experiments in the Company’s laboratory, but also for the preparation of materials
and facilities for GMP-compliant manufacturing. The near-term goal is to advance non-clinical testing
and manufacturing outsourcing for the prototype product.
The Phase 1 investigator-initiated clinical trial of BP2301, or anti-HER2 CAR-T cell therapy, is currently
underway at the Company’s collaborator, Shinshu University. Since this clinical trial (together with the
manufacture of the investigational drug) is mostly funded by a research grant from the Japan Agency for
Medical Research and Development (AMED), a large part of the proceeds from the Fundraising to beallocated to BP2301 will be spent to pay for the Company’s research personnel costs and other related
expenses during the periods of clinical trials. If clinical safety and efficacy is confirmed in the clinical trials,
the opportunities for the Company’s licensing transactions will be greatly broadened.
The antibody drug pipelines achieved a proof-of-concept in a mouse model (in vivo). The effort to obtainfurther non-clinical data for antibody profiling is underway, with the aim of preparing for licensing to amajor pharmaceutical company. New funds to be allocated to this pipeline will cover the costs forresearch personnel, as well as for reagents and research facilities and equipment.
(2) Working capital
The Company's business activities include research and development for drug discovery and non-clinicaland clinical development, commercial development centered on licensing transactions (both in-licensing
and out-licensing), and support and management of research and development projects.
Working capital is used to cover general and administrative expenses (other than R&D expenses), which
consist mainly of personnel expenses for researchers and other staff and include remuneration, rents,
and business taxes. The estimated amount of new funds to be allocated to cover such non-R&D
expenses is calculated based on the Company's actual results for the past years.
The Company’s stock price is currently hovering around 57 yen, which is equal to the minimum exercise pricefor Series 16 warrants. The Company has therefore determined that the Company should choose to acquire andcancel Series 16 warrants and to procure funds through issuing new securities in light of the Company’s capital
policy, as explained in Section 2 (Purpose and Reason for the Offering). While the Intended use of new funds
from Series 16 warrants was disclosed in “Announcement of Completion of Payments for Series 16 Warrants
and Unsecured Bonds (PPB)” issued by the Company on November 14, 2023, the amounts and times for
disbursement of such funds are now modified as follows in the context of the Company’s acquisition andcancellation of Series 16 warrants. The figures shown below are estimated amounts on a net basis after
deducting various issue expenses.
<Before modification>
Project covered by new funds

Amount(Millions of yen)

(1) R&D for cancer immunotherapy pipelines

Time for disbursement

Total 1,370
1,227• Cell therapy agents143• Antibody drugs

15

December 2023 – December 2024

(2) Working capital
Total

244

December 2023 – December 2024

1,614

－

<After modification>
Project covered by new funds

Amount(Millions of yen)

(1) R&D for cancer immunotherapy pipelines

Time for disbursement

Total 451

• Cell therapy agents303• Antibody drugs

148(2) Working capital

129

December 2023 – June 2024

580

－

Total

December 2023 – June 2024

The funds procured by the Company from the issuance of Series 16 warrants have been disbursed in phases
up until June 2024. The following is a summary of the Company's use of those funds by modality (meaning amethod of treatment).
Cell therapy agents:• Developed prototype CAR-iPSNKT; promoted preparation for GMP-compliant manufacturing
Antibody drugs:• Gathered non-clinical data including the data for tumor growth inhibition in animal models◊ Additional information: Development pipelines of BrightPath
The Company’s pipelines underway for which the funds from Series 16 warrants have been spent andtheir progress are as follows.

5. Justification for the Intended Use of New Funds
As explained in Section 2 (Purpose and Reason for the Offering), the Company intends to use new funds fromthe Fundraising for the purpose of improving the Company's value, which is expected to ensure medium- and16

long-term revenue and profits and to contribute to steady business growth. The Company therefore believes theintended use of new funds procured from the Fundraising will eventually help enhance the interests of theCompany’s existing shareholders.
6. Reasonableness of the Terms and Conditions for the Financing
6.1 Pricing for the Warrants
The Company asked Akasaka International Accounting Co., Ltd. (headquartered at 1-1-8 Motoakasaka,
Minato-ku, Tokyo and represented by Kenzo Yamamoto), an independent appraiser, for valuation of the Warrants
based on the terms and conditions described in this document and the provisions of a drafted Purchase
Agreement. No material conflict of interest exists between this appraiser and the Company and between theappraiser and the Allottee.
For the purpose of the valuation, the appraiser adopted the Monte Carlo method after examining andcomparing this method and other pricing models such as the Black-Scholes model and the binomial model.
Monte Carlo simulation is a general price calculation model capable of relatively and appropriately reflecting theterms and conditions for issuing the Warrants and the terms and conditions to be contained in the Purchase
Agreement in the valuation results. The appraiser’s valuation was conducted based on certain preconditions
defined for the valuation purpose. Such preconditions include the following data for the Company's shares: stock
price at 64 yen, volatility at 66.4%, expected dividend at zero yen, risk-free interest rate at 0.3%, and the Allottee’s
expected behavior in exercising its rights.
After closely examining the appraiser’s valuation based on the preconditions described above, the Company
has set the amount to be paid in for one Series 17 warrant at 9 yen, for one Series 18 warrant at 8 yen, and for
one Series 19 warrant at 4 yen, all of which are the same amounts as calculated by the appraiser. The initialrevision of the exercise prices for Series 17 warrants and Series 18 warrants will be made on the trading day
following the allotment date, which will subsequently revised on each trading day. On each such Revision Date,the exercise price will be set at an amount equal to 96% of the closing price of the Company's common stock inregular trading on the Tokyo Stock Exchange on the trading day immediately preceding the Revision Date (or, if
no closing price is available on that trading day, the closing price on its immediately preceding trading day),rounded down to the nearest one yen. With regard to Series 19 warrants, the initial revision of the exercise pricewill be made on the trading day following the allotment date, which will subsequently revised on the third trading
day after the immediately preceding Revision Date. On each Revision Date, the exercise price will be set at an
amount equal to either: (a) the average value of the closing prices of the Company's common stock in regular
trading published by the Tokyo Stock Exchange on the three consecutive trading days immediately preceding
the Revision Date, but excluding the days on which no closing price is available, or (b) 90% of the closing priceof the Company's common stock in regular trading published by the Tokyo Stock Exchange on the trading day
immediately preceding the Revision Date, rounded down to the nearest one yen, whichever is the higher. If,
however, the Revised Exercise Price obtained in any of the foregoing calculations falls below the minimum
exercise price, the minimum exercise price will be adopted as the Revised Exercise Price. The minimum exercise
price is the value equal to 50% of the closing price on the trading day immediately preceding the date of approving
the resolution to issue the Warrants. The Company considers that this value is reasonable and unobjectionable,compared to the pricing for similar warrants of other issuers.
In the course of the valuation, the appraiser considered some potential events that could affect the fair valueof the Warrants and calculated the fair value using Monte Carlo simulation, which is a method commonly used
for this kind of valuation. Therefore, the appraiser’s valuation is found to be reasonable. In the context of fixing
the issue price of the Warrants by reference to such reasonable valuation result, the Company has finally set theissue price at the same value as calculated by the appraiser. The Company has therefore determined that theissue price set in this way does not constitute a particularly favorable value and concluded that it is a fair andreasonable price.
All three incumbent company auditors (including three outside company auditors) of BrightPath have17

expressed an opinion upholding the legitimacy of the directors’ conclusion that the terms and conditions for
issuing the Warrants do not constitute a favorable issue, as a result of their audit conducted in the course of theirduties required under the Companies Act. This auditors’ opinion is based on their recognition as follows: (i)Akasaka International Accounting Co., Ltd. is found to be in a position that is adequately independent from theCompany’s management since there is no advisory services contract between the appraiser and the Company;(ii) the appraiser conducted its valuation in a position independent from the Allottee; (iii) the method used for
pricing the Warrants is a generally adopted method conforming to market practices; (iv) the Company’s decision
to set the issue price for the Warrants at the same amount as calculated by the appraiser is found reasonable;and (v) it is found reasonable to decide the terms and conditions for the Warrants based on the closing price of
the Company's common stock in regular trading on the Tokyo Stock Exchange on June 18, 2024.
6.2 Grounds for concluding that the number of shares to be issued and the scale of share dilution arereasonable
The number of shares of the Company's common stock to be issued after the exercise of all the Warrants is
36 million shares (corresponding to the number of voting rights at 360,000), resulting in the dilution ratio of 50.89%
based on the total number of issued shares of the Company as of March 31, 2024 at 70,741,300 shares(corresponding to the number of voting rights at 707,311) as the denominator (and the dilution ratio for the numberof voting rights represented by such shares is 50.90%). In this sense, the issuance of the Warrants will obviously
cause a certain level of dilution of the Company’s common stock.
Nevertheless, the Company has decided to implement the Fundraising on the grounds that the Company’s
use of new funds for covering R&D costs for cancer immunotherapy pipelines and working capital in accordancewith the purpose and reason explained in this document will contribute to ensuring the Company’s growth andimproving its corporate value. Given that 36 million shares of the Company’s common stock will be issued in total
if all the Warrants are exercised, while the average daily trading volume of the Company’s common stock on theTokyo Stock Exchange for the past six months is 666,503 shares, the Company's shares have a certain degreeof liquidity. As a result, the dilution of the Company’s common stock that is expected to be caused by the Warrants
is unlikely to have an excessive impact on the market and found to fall within a reasonable range when paying
due regard to the enhancement of shareholder value.
Meanwhile, the dilution ratio caused by the third-party allotment of the Warrants is expected to surely exceed
25%. The Company therefore set up a committee consisting of those who are adequately independent from theCompany’s management pursuant to Rule 432 of the Securities Listing Regulations established by the Tokyo
Stock Exchange (the “Independent Committee”). The members of the Independent Committee are Mr. Tsutomu
Kishino, currently in office as BrightPath’ outside company auditor, Mr. Taketoshi Abe, currently in office as
BrightPath’ outside company auditor and independent officer, and Mr. Jinnosuke Matsumoto (attorney at law,
Miyakezaka Sogo Law Offices), as an external expert who has no vested interest in BrightPath. The Company
asked the Independent Committee to deliberate whether the scale of dilution is reasonable, whether theFundraising Scheme is appropriate, and the adequacy of the Allottee, among others. In consequence, theIndependent Committee expressed an opinion upholding the necessity and suitability of the Fundraising.
7. Reasons for Appointment of the Allottee
7.1 Profile of the Allottee
1

Name

EVO FUND
c/o Intertrust Corporate Services (Cayman) Limited

2

Head office3Form of organization

4

Purpose of organization

One Nexus Way, Camana Bay, Grand Cayman KY1-9005 Cayman Islands
Exempted limited liability company incorporated under the laws of the Cayman
Islands
Investment18

5Date of organization

6

Total amount ofDecember 2006
Paid-in capital:

One US dollar

contribution

Net assets:

About 75 million US dollars

Profile of the investors

7

and investment ratios

89Voting rights: 100% held by Evolution Japan Group Holding Inc. (100% of thevoting rights in Evolution Japan Group Holding Inc. are indirectly owned byMichael L. Lerch.)

Representative’s nameMichael L. Lerch, Representative Director

and title

Richard G. Chisholm, Representative Director
Name

EVOLUTION JAPAN SECURITIES Co., Ltd.

Head office

4-1 Kioicho, Chiyoda-ku, Tokyo

Profile of the Allottee’s

Representative’s

agent in Japanand title

Director

Description of business

Financial instruments business

Capital stock

994,058,875 yen

nameShaun M. Lawson, President and Representative

Relationship between the
Company and theNone

Allottee as a fund
10

Relationships between

Relationship between the

the Company and theCompany and the

Allottee

Allottee’s representative

None

Relationship between the
Company and the
Note:

None

Allottee’s agent in JapanThe descriptions in this table are based on the information available on April 30, 2024, except asotherwise stated.

* EVO FUND was originally introduced by EJS to the Company. 100% of EVO FUND’s equity is indirectly
owned by one of its officers, Mr. Michael L. Lerch. The Company retrieved and examined past newspaper
articles and information posted on websites or other media about EVO FUND, Mr. Lerch and another officer
of EVO FUND, Mr. Richard G. Chisholm to verify whether they have any relationship with antisocial forces.
As a result, the Company ascertained that the Allottee is not an antisocial force. The Company has obtained
a written commitment issued by VO FUND proving that it has no relationship with any antisocial forces.
For double-checking, the Company asked JP Research & Consulting, Inc. (headquartered at 3-7-12
Toranomon, Minato-ku, Tokyo and represented by Keisuke Furuno), to investigate EVO FUND, Mr. Lerch
and Mr. Chisholm. JP Research & Consulting is an independent research agency specialized in enterpriseinvestigation, credit checking and other related surveys. On June 17, 2024, the Company received
investigation reports from JP Research & Consulting prepared based on its investigations including collation
with its database. No information contained in those reports suggest that EVO FUND and its investors andofficers are associated in any way with antisocial forces.
Based on all of the foregoing, the Company has determined that none of the Allottee and its investors andofficers has any involvement with antisocial forces and submitted a written confirmation to this effect to theTokyo Stock Exchange.
7.2 Reasons for appointment
To choose a swift and reliable financing method conducive to enhancing the Company’s value and ensuring
its business growth, the Company examined and compared multiple financing solutions. In this context, theCompany received a proposal for the Fundraising from EJS in April 2024. After scrutinizing this proposal, the19Company has determined that the Fundraising Scheme matches the Company’s financial needs because it
allows for flexible funding while curbing near-term impacts on the Company’s stock price. Since EVO FUND has
a proven track record of similar investments, as explained below, the Company has determined based on its
internal deliberation that EVO FUND qualifies as an allottee. In consequence, the Company has decided to adopt
the Fundraising Scheme and appoint EVO FUND as the Allottee.
EVO FUND is a fund established for the purpose of investments in listed stocks in December 2006, as an
exempted limited liability company incorporated under the laws of the Cayman Islands. According to its
investment track record, EVO FUND subscribed for warrants issued by means of the so-called third-party
allotment and allotted under a scheme similar to the Warrants in multiple financing projects and EVO FUND
eventually contributed to the issuing companies’ fundraising by exercising all those warrants.
EJS, which is an affiliated company of EVO FUND, undertook the intermediary service as an arranger forclosing the Fundraising. EJS is a wholly owned subsidiary of Tiger Inn Enterprises Limited (headquartered at
Craigmuir Chambers, PO Box 71, Road Town, Tortola VG1110, British Virgin Islands and represented by Michael
L. Lerch and Richard G. Chisholm).
When the Company intends to issue equity securities during the period for which there are unexercised Series
16 warrants, the Company is required to obtain the prior approval of Macquarie Bank Limited, an allottee of Series
16 warrants, under the purchase agreement for Series 16 warrants between the two parties. To effect theFundraising, the Company obtained Macquarie Bank’s approval.
Note: The Company’s allotment of the Warrants is effected through the intermediary service provided by EJS
as a member of the Japan Securities Dealers Association (JSDA). The offering of the Warrants is
implemented in accordance with the Rules Concerning Handling of Allotment of New Shares to Third Party,
Etc. established by the JSDA as its self-regulatory rules.
7.3 Holding policy of the Allottee and measures for controlling warrant exercise
Given that EVO FUND’s holding policy is pure investment, the Allottee has no intention of holding shares of
the Company’s common stock for a long term, in principle, after acquiring them through exercising the Warrants.
To fulfill the responsibility to its investors, Allottee will closely watch changes in the Company’s stock price and, ingeneral, seek to sell the Company’s stock in the market. Meanwhile, the Company has verbally confirmed the
Allottee’s current stance to: seek an off-market sale of the Company’s stock if the Allottee can find a purchaser
who is to accept a block trade; refrain from such transactions that might make unclear the number of shares
virtually held or controlled by the Allottee (e.g., swap trading with financial institutions or institutional investors
during the exercise period for the Warrants); and have no intention of transferring the Warrants to prime brokers
or other similar financial institutions.
The Purchase Agreement to be concluded between the Company and the Allottee is going to contain thefollowing conditions.
(1) The Allottee’s warrant exercise is restricted, in principle, to the extent that the number of shares to beacquired through warrant exercise in any single calendar month will not exceed 10% of the number of theCompany’s listed shares as of the payment date for the Warrants ("Overstepping Exercise"). This
restriction is imposed in accordance with Rule 434, Paragraph 1 of the Securities Listing Regulations
established by the Tokyo Stock Exchange and Rule 436, Paragraphs 1 through 5 of the Enforcement
Rules for Securities Listing Regulations.
(2) The Allottee must agree that Overstepping Exercise is prohibited, except as otherwise specificallypermitted. Before each warrant exercise, the Allottee must seek the Company’s confirmation as to whether
or not the intended exercise constitutes Overstepping Exercise.
(3) If the Allottee intends to transfer the Warrants, the Allottee must force the transferee, in advance, to assure
the Company of the transferee’s acceptance and compliance with the requirements concerning
Overstepping Exercise. If a transferee acquiring the Warrants from the Allottee intends to resell those20

Warrants to another third party, the Allottee must ensure that such third party will assure the Company of
its acceptance and compliance with the requirements concerning Overstepping Exercise.
In addition to the foregoing, the Purchase Agreement is going to stipulate that any transfer of the Warrants will
be subject to the approval of the Company’s board of directors. In the event of any such transfer, the Company
will, before seeking approval from the Company's board of directors, verify the identity of the transferee, ascertainthat the transferee is not an antisocial force, confirm the transferee’s financial ability to subscribe for the Warrants,
and check the transferee’s holding policy. Such transfer, if effected, will be followed by the Company’s timely
disclosure.
7.4 Confirmation of the existence of financial resources necessary for the Allottee’s contribution in theFundraising
The Company verified multiple prime brokers’ reports on asset balances as of March 29, 2024, which serve as
supporting evidence for EVO FUND’s retained property, showing the value of net assets obtained by deducting
the total amount of borrowings and other liabilities from the total amount of cash, securities and other assets. The
Company has consequently determined that EVO FUND has sufficient funds capable of subscribing for all of theWarrants and the Bonds as of the payment date.
Since EVO FUND’s investment style is to repeat exercising warrants and selling shares acquired through theexercise for the purpose of collecting investment money, EVO FUND is, in general, unlikely to need to spentmassive amounts of money for any single exercise of the Warrants. With staggered exercise periods for therespective series of the Warrants, the Company expects that EVO FUND will have a sufficient amount forexercising the Warrants in each instance.
While EVO FUND has already subscribed for warrants allotted by multiple issuers as of today, EVO FUND
plans to repeat a process of warrant exercise and stock sale, as explained above, and therefore has no need tohave a large amount of cash for each such process. After adding up all expected proceeds and costs for all such
unexercised warrants and deducting the sum from EVO FUND’s present balance of net assets, EVO FUND isfound to retain sufficient funds for paying for the total issue price of the Warrants and the Bonds and exercising
the Warrants.
7.5 Agreements concerning share certificate lending
Between the Allottee and the Company or any of its officers and shareholders, there is no agreement forborrowing and lending of share certificates in relation to the Company’s stock. No such agreement is planned tobe concluded in the future as well.
8. Major Shareholders and Shareholding Ratios
Shareholder

Notes:

Shareholding ratio

MACQUARIE BANK LIMITED DBU AC

1.19%

JP Morgan Securities Japan Co., Ltd.

1.11%

Rakuten Securities, Inc.

1.08%

Matsui Securities Co., Ltd.

0.93%

Hiroshi Akeo, an individual

0.85%

Kazumi Araki, an individual

0.66%

Mitsubishi UFJ Capital Co., Ltd.

0.64%

Takehiko Nakasato, an individual

0.60%

SBI Securities Co., Ltd.

0.58%

Japan Securities Finance Co., Ltd.

0.58%

1. The shareholding ratios are calculated based on the numbers of shares recorded in the shareholder
21

register as of March 31, 2024.
2. The purpose of the Allottee’s retention of the Warrants is pure investment. The Allottee is expected
to sell shares of the Company’s common stock acquired through the exercise of the Warrants. EVO
FUND therefore has made no commitment to hold shares of the Company’s common stockacquired through the exercise of the Warrants on a long-term basis. For this reason, this table dose
not state the shareholding ratios after the allotment to EVO FUND.
3. The figures are rounded to two decimal places.
9. Future Outlook
The proceeds from the exercise of the Warrants are expected to contribute to the expansion of the Company's
business, the enhancement of its corporate value and shareholder value and the reinforcement of its financial
foundation over the medium- to long-term, as explained in Section 4.2 (Intended use of new funds).
The amounts actually procured and the times for obtaining new funds from the Fundraising will depend on thestatus of exercise of the Warrants, as explained in Section 4.2. How and when to use new funds will be decided
more specifically based on the progress of actual exercise of the Warrants, and the impacts on the Company’sbusiness performance for the current fiscal year will be timely disclosed as soon as they become clear.
10. Procedures Required under the Code of Corporate Conduct
If all the Warrants (corresponding to 36 million shares) are exercised, the Allottee’s shareholding ratio basedon the Company’s issued shares as of March 31, 2024 (70,741,300 shares) will be 50.89% (rounded to two
decimal places) and the Allottee’s voting interest in the Company based on 707,311 voting rights in total as of thesame day will be 50.90% (rounded to two decimal places), with the dilution ratio of over 25%. This situation
constitutes a case specified in Rule 432 (Matters to be Observed for Third-Party Allotment) of the Securities
Listing Regulations established by the Tokyo Stock Exchange where the issuer is required to: (1) receive an
opinion regarding the necessity and suitability of the allotment from an entity who has a specific degree of
independence from the Company's management or (2) confirm the intent of shareholders regarding the allotment
by means of a resolution in a general meeting of shareholders or otherwise.
The Company chose to seek an opinion regarding the necessity and suitability of the Fundraising from a thirdparty committee, after taking into comprehensive consideration the following points. First, the Fundraising will not
immediately bring stock dilution, unlike stock issue. Second, if the Company chose to carry out the procedure forholding an extraordinary general meeting of shareholders to confirm the intent of shareholders in relation to theFundraising, it would take about two months to pass a resolution at such shareholders meeting. Third, holding
an extraordinary general meeting of shareholders requires a considerable cost. To seek a third-party opinion, theCompany set up a committee consisting of Mr. Jinnosuke Matsumoto, Mr. Tsutomu Kishino and Mr. Taketoshi
Abe (the “Independent Committee”). These three persons are external experts who have a certain degree of
independence from the Company's management and have no vested interest in the Company. In response to
the Company’s request for objective comments on the necessity and and suitability of the Fundraising, theIndependent Committee delivered its opinion dated June 18, 2024. The Independent Committee’s opinion issummarized as follows.
<Summary of the Independent Committee’s Opinion>
A. Conclusion
The Independent Committee has concluded that the third-party allotment proposed by the issuing company is foundnecessary and suitable.
B. Reasons
B.1. Necessity
At present, the issuing company intends to focus its management resources on the product development in cell therapy
agent pipelines and antibody drug pipelines. Among others, the highest priority issues are as follows, for which the22issuing company intends to use the proceeds from the proposed fundraising intensively. One is to promote preparatory
activities to manufacture cells necessary for starting clinical trials for the prototype product of BP2202 in the UnitedStates. BP2202 is the allogeneic CAR-T platform using NKT cells manufactured from iPS cells (CAR-iPSNKT),
which exhibits the issuing company’s outstanding originality worldwide. The other is the effort to gather data in theongoing antibody drug pipelines, which is the last critical step for their commercialization and licensing topharmaceutical companies.
As of the end of March 2024, the issuing company held 1,057 million yen of cash and deposits. This value is nearly
equal to the funding for business operation for the new fiscal year since the projected net loss for the fiscal year ending
March 2025 is 927 million yen, as publicly announced on May 10, 2024. In order to steadily promote R&D activities,
the issuing company considers that it needs to secure a considerable amount of development funds, while increasing
cash reserves and maintaining liquidity. From this viewpoint, the issuing company believes that its present financial
condition stands at a level requiring capital reinforcement. For the purpose of covering business funds for the full year
from now on to push ahead with the development based on the iPS-NKT cell platform and continue the research anddevelopment investment focused on cell therapy agents and antibody drugs, the issuing company desires to secure
expeditious funding in a way not detrimental to the interests of existing shareholders.
The total amount of funds that the issuing company plans to procure on this occasion is 2,232 million yen, with thefollowing breakdown.
(1)

R&D for cancer immunotherapy pipelines:

1,709 million yen(2)Working capital:

523 million yen

To check more detailed cost breakdown, the Independent Committee asked the issuing company for additional
documentation and explanation and scrutinized and deliberated such additional information. Since there was anything
unreasonable in the explanations given by the issuing company’s officers and managers in charge, the Independent
Committee has shared the issuing company’s view on the necessity of the proposed fundraising.
B.2. Suitability
B.2.1. Comparison with other financing alternatives
During the course of seeking an optimum financing solution, the issuing company examined the third-party
allotment of warrants under review, as well as other alternative solutions, which include public offering, pro rata
allotment of new shares to existing shareholders, third-party allotment of new shares, straight-equity issue
program (STEP), convertible bonds (CB) with a fixed strike price, moving strike convertible bonds (MSCB),
warrants with a fixed strike price, rights issue, and debt financing such as borrowing or issuance of bonds orsubordinated bonds. Regarding public offering and pro rata allotment of new shares to existing shareholders, theissuing company found them inappropriate because of a required length of time, costs and inability to fix theamount to be procured earlier. Regarding third-party allotment of new shares, the issuing company found it
inappropriate due to an expected impact on its stock price and further due to the difficulty in finding investors
subscribing for new shares. Regarding CB with a fixed strike price, the issuing company was not able to adopt
this solution because it would affect the company’s borrowing capacity. In the issuing company’s view, MSCB
is less preferable than the fundraising scheme under review. MSCB would directly have a significant impact on
the company’s stock price because the number of shares to be issued in each instance cannot be fixed until theconversion in question is completed. In this regard, the issuing company considers that the fundraising scheme
under review will have a relatively less impact on shareholders’ interests. Regarding warrants with a fixed strikeprice, the issuing company found it difficult to set an adequate strike price in light of the present level of its stockvolatility. According to the issuing company’s explanation, rights issue is virtually infeasible and the company
cannot fulfill the qualification criteria at this moment. Regarding debt financing, the issuing company insisted that
this solution might adversely affect the company’s financial soundness. Since the Independent Committee

23

considers that all of these views about financing alternatives are reasonable, the fundraising scheme under review
is found to be a relatively suitable solution.
B.2.2. Allottee screening
To evaluate the adequacy of the allottee candidate, the Committee examined survey reports prepared by JP
Research & Consulting, Inc. These reports state investigation findings about the allottee and its substantial owners
and officers. The Independent Committee confirmed that there were no particular problems in connection withthese persons. As a consequence, the Committee has concluded that the allottee is found adequate.
B.2.3. Terms and conditions for issuanceTo verify the suitability of the issue price for the warrants under review, the Independent Committee examined
an appraisal report prepared by Akasaka International Accounting Co., Ltd. and interviewed the certified public
accountant in charge. As a result, no particular problems were detected in the process of appraising the value ofthe warrants. The Independent Committee has therefore concluded that the proposed issue price is considered
suitable. With regard to the terms and conditions for issue, except for pricing matters, the Independent Committee
confirmed that an independent law firm acting as an agent for the issuing company was adequately involved in
the process of negotiation with the allottee and that no particular problem is discovered in a drafted agreement
under negotiation. The Independent Committee has therefore concluded that the terms and conditions for issue
are considered appropriate.
B.2.4. Concern for dilution
The third-party allotment under review will cause certain detriment to the issuing company’s existing shareholders,that is, dilution of their shareholding interests with a dilution ratio as high as 50.90%. The Independent Committee
asked for the issuing company’s explanation as to whether or not advantages would outweigh disadvantageous
dilution in the fundraising scheme under review. According to the issuing company’s explanation, the proceedsfrom the fundraising under review will be used to cover R&D costs for cancer immunotherapy pipelines andworking capital, and this fundraising scheme can secure expeditious funding with due regard to existing
shareholders’ interests. The issuing company further asserted that such funding could facilitate licensing
transactions in the future and increase revenue potential. On these grounds, the issuing company decided to choose
the fundraising scheme under review with the belief that it would contribute to ensuring the Company’s growthand improving its corporate value. Since no unreasonable or objectionable point was found in the issuing
company’s explanation, the Independent Committee agrees that the fundraising through the third-party allotment
as proposed will bring advantages outweighing the disadvantage of diluting existing shareholders’ interests.
* Since there is no advisory contract or transaction of any other kind between the Company and Mr. Jinnosuke
Matsumoto, his independence from the Company is ensured. Although Mr. Tsutomu Kishino is not appointed
as an independent officer for BrightPath, he qualifies for such position. Therefore, no conflict of interests islikely to occur between Mr. Kishino and any general shareholder.

24

11. Business Results and Equity Finance for the Last Three Years
11.1 Business results for the last three years(Thousands of yen)
Fiscal year

Year ended March 2022

Year ended March 2023

Year ended March 2024

15,4085,280

72

Operating loss (-)(1,476,033)(1,467,059)(1,155,133)

Ordinary loss (-)(1,481,945)(1,473,774)(1,158,929)

Net loss (-) or net loss attributableto owners of the parent (-)(1,484,192)(1,485,633)(1,168,082)(28.55)(24.90)(18.21)

–

–

–

45.40

24.60

13.52

Net sales

Net loss per share (-) (yen)Dividend per share (yen)Net assets per share (yen)11.2 Numbers of issued shares and potential shares(As of March 31, 2024)
Number of shares
Number of issued shares

Ratio

70,741,300 shares

100%

790,900 shares

1.18%

Number of potential shares issuable at the minimum exercise price––

Number of potential shares issuable at the maximum exercise price––

Number of potential shares issuable at the current exercise priceNotes: 1. All potential shares in this table are shares issuable through exercise of stock options.
2. As explained in Section 2 (Purpose and Reason for the Offering), the Company intends to acquireand cancel all Series 16 warrants on July 18, 2024. Therefore, the figures in this table do not include
the number of potential shares issuable from of Series 16 warrants.
11.3 Recent stock prices
11.3.1 Past three years

Note:

Year ended March 2022

Year ended March 2023

Year ended March 2024

Opening price

198 yen103 yen

170 yenHighest price

199 yen

270 yen

185 yenLowest price

85 yen61 yen63 yenClosing price

103 yen

172 yen

67 yenEach stock price was quoted on the Growth Market of the Tokyo Stock Exchange.

11.3.2 Past six months
Jan. 2024

Feb. 2024

Mar. 2024

Apr. 2024

May 2024

Jun. 2024

Opening price

86 yen81 yen78 yen66 yen59 yen59 yenHighest price

99 yen

83 yen90 yen

68 yen

68 yen65 yenLowest price

80 yen67 yen63 yen56 yen56 yen58 yenClosing price81 yen80 yen67 yen60 yen58 yen64 yenNotes: 1. Each stock price was quoted on the Growth Market of the Tokyo Stock Exchange.
2. The stock prices in June 2024 are the data as of June 18, 2024.
11.3.3 Trading day immediately preceding the date of resolution to issue the Warrants and the Bonds

25

June 18, 2024
Opening price

63 yenHighest price

65 yenLowest price

63 yenClosing price

64 yen11.4 Equity finance for the past three years
11.4.1 Series 15 warrants (issued under the scheme of third-party allotment)
Allotment dateFebruary 1, 2022

Number of warrants issued

105,000 warrants

Issue price

35 yen per warrant (3,675,000 yen in total)

Amount of new funds planned

1,127,175,000 yen (Net proceeds: 1,107,175,000 yen)

to be raised at the time ofBreakdown:

issuing the warrants (estimated

Amount procured through the warrant issue:

3,675,000 yen

amount of net proceeds)

Amount procured through warrant exercise:

1,123,500,000 yen

Total estimated expenses for issue:
Total number of issued shares

20,000,000 yen

52,368,000 shares of common stock

upon the offering
Allottee

Macquarie Bank Limited

Status of warrant exercise to105,000 warrants exerciseddateAmount of new funds raised to774,619,000 yen

date
Projects covered by new funds(1) R&D for cancer immunotherapy pipelines(2) Working capital

Originalschedulefor(1) July 2022 – September 2023

disbursement(2) July 2022 – September 2023

Status of use of new funds to(1) R&D for cancer immunotherapy pipelines:

date

322 million yen for celltherapy pipelines, 180 million yen for antibody drug pipelines, and 75
million yen for cancer vaccine pipelines; disbursed from December
2022 to July 2023
(2) Working capital:
2022 to July 2023

26

197 million yen, disbursed from December

11.4.2 Series 16 warrants (issued under the scheme of third-party allotment)
Allotment dateNovember 30, 2023

Number of warrants issued

156,600 warrants

Issue price

33 yen per warrant (5,167,800 yen in total)

Initially planned amount of

1,633,807,000 yen (Net proceeds: 1,613,807,000 yen)

new funds to be raised

Breakdown:(estimated net proceeds)

Amount procured through the warrant issue:

5,167,000 yen

Amount procured through warrant exercise:

1,628,640,000 yen

Total estimated expenses for issue:
Total number of issued

20,000,000 yen

62,891,200 shares of common stock

shares upon the offering
Allottee

Macquarie Bank Limited

Status of warrant exercise

82,501 shares warrants exercised

to dateAmount of new funds raised

580,082,000 yen

to dateProjects covered by new
funds(1) R&D for cancer immunotherapy pipelines• Cell therapy agents• Antibody drugs(2) Working capital

Originalschedulefor(1) December 2023 – December 2024

disbursement(2) December 2023 – December 2024

Status of use of new funds(1) R&D for cancer immunotherapy pipelines:

to date303 million yen for celltherapy pipelines, and 148 million yen for antibody drug pipelines;
disbursed from December 2023 to June 2024
(2) Working capital:

129 million yen, disbursed from December 2023

to June 2024
Note:

As explained in Section 2 (Purpose and Reason for the Offering), the Company intends to acquire andcancel all Series 16 warrants on July 18, 2024.

27

Attachment

BrightPath Biotherapeutics Co., Ltd. Series 17 Warrants
Terms and Conditions
1．Name of the Warrants
BrightPath Biotherapeutics Co., Ltd. Series 17 Warrants（hereinafter referred to as the “Warrant(s)”）
2. Total amount of issue
1,350,000 yen (9 yen per warrant)
3．Subscription period
Until July 5, 2024
4．Date of allotment and payment
July 5, 2024
5．Offering method
All Warrants are allotted to EVO FUND by the method of allotment of securities to specified third parties(third-party allotment).
6．Class and number of shares underlying the Warrants(1) The class of shares underlying all Warrants shall be common stock of BrightPath Biotherapeutics Co., Ltd(hereinafter referred to as the “Company”).
(2) Total number of shares underlying all Warrants shall be 15,000,000 shares. The number of shares
underlying one Warrant shall be 100 shares (hereinafter referred to as the “Number of Allotted Shares”). If
the Company conducts a stock split or a consolidation of shares for the Company's common stock(hereinafter collectively referred to as “Stock Reconstruction”), the Number of Allotted Shares shall be
adjusted in accordance with the following formula. However, fractions less than one share arising from theadjustment shall be rounded down.
Number of Allotted Shares after adjustment= Number of Allotted Shares before adjustment x Ratio of Stock Reconstruction
If, however, the Number of Allotted Shares is adjusted pursuant to the other reasons, the Number of Allotted
Shares shall be adjusted subject to the resolution of the board of directors of the Company as far as it isrational.
7．Total number of the Warrants
150,000 warrants
8．Amount to be paid in for each Warrant28

9 yen per Warrant
9．Value of the property to be contributed upon exercise of the Warrants or method of calculating suchvalue(1) The property to be contributed upon exercise of each Warrant shall be cash, and its value shall be an amountobtained by multiplying the Exercise Price (as defined below) by the Number of Allotted Shares.
(2) The amount per share of the Company’s common stock to be contributed upon exercise of the Warrants(hereinafter referred to as “Exercise Price”) shall initially be 62 yen.
10．Revision of the Exercise Price(1) The exercise price is subject to the initial revision on the trading day (as defined below) immediately after
the date of allotment and the subsequent revision on each trading day thereafter (hereinafter referred to as
the “Revision Date”). The exercise price shall be revised to an amount equal to 96% of the closing priceof the Company's common stock in regular trading on the Tokyo Stock Exchange on the trading day
immediately preceding the Revision Date (as defined below), rounded up to the nearest one yen. If therevised exercise price calculated in the way specified above is to fall below the Minimum Exercise Price (asdefined below), the Minimum Exercise Price shall be adopted as the revised exercise price. If, however,there is no closing price on the Revision Date, the exercise price shall not be revised. If an event definedin Section 11 occurs, the closing date on the Revision Date shall be adjusted rationally.
A “trading day” means a day on which a trading session is held on the Tokyo Stock Exchange.
“Revision Date” means the effective date for revising the exercise price on any trading day.
(2) The minimum exercise price is 32 yen (hereinafter referred to as the “Minimum Exercise Price”).
(3) The Minimum Exercise Price shall be adjusted pursuant to Section 11.
11．Adjustment to the Exercise Price(1) If the total number of issued shares of the Company’s common stock changes or is likely to change in anyof the cases specified in Section 11(2) after the Warrants have been issued, the Company shall adjust theExercise Price in accordance with the following formula (hereinafter referred to as the “Exercise Price
Adjustment Formula”).
Numbershares newly

Number of=
Exercise
Price after
adjustment

outstanding
Price

+

issuedordisposed ofsharesExerciseofAmountxcontributed per
share

Market value per share×

beforeNumber ofadjustment

outstanding
sharesNumber of shares+

newly issued or
disposed of(2) The Exercise Price shall be adjusted by the Exercise Price Adjustment Formula in any of the following cases.
The Exercise Price so adjusted shall be effective from the day specified for each applicable case.

29

(i)

In the case where the Company newly issues shares of the Company’s common stock or disposes ofany such shares held by the Company at a price less than the market price specified in Section 11(4)(ii)(including the cases of allotting shares without contribution), except where the Company issues ordisposes of shares as stock-based compensation subject to transfer restriction for the Company’s
officers or employees, delivers shares based on exercise of warrants (including those attached tobonds), acquires shares with put options or shares subject to call, or delivers shares based on exercise
of any other right to ask for such delivery, or delivers shares of the Company’s common stock in thecontext of a company split, share exchange or merger. The Exercise Price after adjustment shallbecome effective on the payment date (which shall be the last day of the payment period designatedfor the offering or on the effective date for the allotment of securities without contribution, as applicable),or on the day immediately following the record date, if any, for identifying the shareholders eligible forthe allotment in such issuance or disposition.

(ii)

In the case of issuing shares of the Company’s common stock through a stock split, the exercise priceafter adjustment shall be effective on the day immediately following the record date for the stock split.
In the case of issuing shares of the Company’s common stock through allotment of shares without
contribution, the exercise price after adjustment shall be effective on the day immediately following therecord date for the allotment of shares without contribution if such date exists, or on the day immediately
following the date the allotment of shares without contribution get effective.

The “number of shares newly issued or disposed of” used in the Exercise Price Adjustment Formula means
an increase in the number of shares of the Company’s common stock arising as a result of the stock
split.
(iii) In the case of issuing or granting shares with put options for which shares of the Company’s common
stock are to be delivered at a price lower than the market value specified in Section 11(4)(ii) or issuingor granting warrants (including those attached to bonds) for which their holders are entitled to ask forthe delivery of shares of the Company’s common stock at a price lower than the market value specified
in Section 11(4)(ii) (excluding series 18 warrants and series 19 warrants), except where the Company
issues stock options to its officers or employees, the exercise price after adjustment shall be calculatedby the Exercise Price Adjustment Formula on the assumption that all put options or all warrants, as thecase may be, are exercised under the original conditions. the Exercise Price so adjusted shall become
effective on the payment date for shares with put options, on the allotment date of warrants, or on theeffective date for the allotment of securities without contribution, as the case may be. If, however, arecord date for identifying the shareholders eligible for the allotment is set, the Exercise Price after
adjustment shall be effective from the day immediately following the record date.
(iv) In the case where shares of the Company’s common stock are delivered at a price lower than themarket value specified in Section 11(4)(ii), in exchange for the Company’s acquisition of shares subject
to call or warrants (including those attached to bonds) subject to call that the Company has alreadyissuedThe Exercise Price after adjustment shall become effective on the day immediately following theacquisition date.
Notwithstanding the foregoing, if any adjustment to the exercise price made under Item (iii) occurs
before the adjustment made pursuant to the preceding paragraphs in relation to the shares subject to30

call or warrants (including those attached to bonds) subject to call in question, the exercise price to beobtained after the latter adjustment shall be calculated with consideration for the former adjustment.
(v)

Notwithstanding Items (i) to (iii) above, if a record date is set in any of the cases described in thoseItems and the validity of the Exercise Price after adjustment is subject to the approval of theshareholders meeting, the board of directors or any other authorized organization of the Company tobe obtained after the record date, the Exercise Price after adjustment shall become effective on the
day immediately following the approval date. In this situation, if any Warrant Holder exercises Warrants
during the period from the day immediately following the record date to the approval date, the Company
shall additionally deliver shares of its common stock to the Warrant Holder in the number calculated by
the following formula.
Exercise
Price

Numberof=sharesbeforeadjustment

Exercise−

Number of shares issued at thePrice afterx

adjustment

Exercise Price before adjustment
during the period in question

Exercise Price after adjustment
Fractions less than one share shall be rounded down.
(3) If the difference between the Exercise Price after adjustment calculated by the Exercise Price Adjustment
Formula and the Exercise Price before adjustment is less than one yen, the Exercise Price shall not be
adjusted. If ,however, the Exercise Price subsequently needs to be adjusted upon occurrence of an event
requiring adjustment, the amount obtained by subtracting such difference from the Exercise Price then in
effect shall be used as the Exercise Price before adjustment in the Exercise Price Adjustment Formula.
(4) In the calculation by the Exercise Price Adjustment Formula:(i)

The value shall be calculated to the first decimal place and rounded to the nearest yen unit.

(ii)

The market value used in the Exercise Price Adjustment Formula shall be the average closing price of
the Company’s common stock at the Tokyo Stock Exchange for the 30 consecutive trading days
(excluding days on which no closing price is available) beginning on the 45th trading day prior to theeffective date of the Exercise Price after adjustment (or prior to the record date, in the case of Item(2)(v) of this Section). In this case, the average value shall be calculated to the second decimal place
and rounded off to the first decimal place.

(iii) The number of outstanding shares to be used in the Exercise Price Adjustment Formula shall be thetotal number of issued shares of the Company’s common stock as of the record date, if any, for
identifying the shareholders eligible for the allotment or as of the day one month prior to the effective
date of the Exercise Price after adjustment, if there is no such record date, less the number of suchcommon stock shares held by the Company as of the same date. In the case described in Section
11(2)(ii), the number of shares newly issued or disposed of used in the Exercise Price Adjustment
Formula shall not include the number of shares of the Company’s common stock to be allotted to suchcommon stock shares held by the Company as of the record date.
(5) In addition to the case where the Exercise Price is required to be adjusted under Section 11(2), the Company
shall make necessary adjustment to the Exercise Price in any of the following cases.
(i)

In the case where the Exercise Price needs to be adjusted for the purpose of a consolidation of shares,
31

company split, share exchange or merger(ii)

In the case where the Exercise Price needs to be adjusted due to the occurrence of any other event
leading to a change or likely to give rise to a change in the number of shares of the Company’s common
stock(iii) In the case where multiple events requiring adjustment to the Exercise Price occurs sequentially andthe effects from a certain event need to be considered for the purpose of fixing the Exercise Price
before adjustment to be used for calculating the Exercise Price after adjustment in connection with anyother event(6) Notwithstanding the case described in Section 11(2), if the date the exercise price after adjustment is initiallyapplied falls on the Revision Date as defined in Section 10, the Company shall make necessary adjustment.
(7) When intending to adjust the Exercise Price (or the Minimum Exercise Price), the Company shall notify the
Warrant Holders in writing on or before the day immediately preceding the effective date of the adjustment,
which notification shall state the intention of making such adjustment, reasons for the adjustment, theExercise Price before adjustment, the Exercise Price after adjustment (or the Minimum Exercise Price after
adjustment), the effective date and other necessary matter. If, however, the Company is unable to provide
such advance notification in the case specified in Section 11(2)(v) or under any other circumstances, theCompany shall provide the notification of the adjustment promptly after the effective date.
12．Exercise Period for the Warrants
From July 8, 2024 to July 7, 2026
13．Other conditions for exercising Warrants
Exercising any Warrant in part is not allowed.
14．Acquisition of Warrants
Not applicable.
15．Issuance of warrant certificates
The Company will not issue warrant certificates for the Warrants.
16．Increase in the stated capital and capital reserves when shares are issued based upon exercise of
the Warrants
When shares are issued based upon exercise of Warrants, the amount of stated capital to be increased
shall be the amount obtained by multiplying the maximum amount of increase in stated capital as calculated
pursuant to Article 17(1) of the Regulations on Corporate Accounting by 0.5, rounding up fractions less than
one yen. As a result, the amount of capital reserves to be increased shall be the amount obtained bysubtracting the amount of stated capital to be increased as calculated above from the maximum amount of
increase in stated capital as aforesaid.
17．Procedure for exercising Warrants(1) To exercise Warrants, the Warrant Holder shall submit a warrant exercise notice stating required matters to32

the office specified in Section 19 during the exercise period specified in Section 12.
(2) To exercise Warrants, the Warrant Holder shall, in addition to submitting the exercise notice specified in
Section 16(1), pay the full amount of the property required to be contributed upon the warrant exercise in
cash by transfer to the Company’s designated account in the office for payment specified in Section 20.
(3) A notice of exercise of Warrants shall become effective on the day on which all of the following are fulfilled:
the office for warrant exercise specified in Section 19 shall have been fully informed of all required mattersfor the warrant exercise and the full amount of the property required to be contributed upon the warrant
exercise shall have been paid into the account specified in Section 17(2).
18．Delivery of shares
The Company will deliver shares by book-entry transfer to the account the Warrant Holder designates after
the warrant exercise become effective.
19．Office for warrant exercise
Securities Agency Division, Mitsubishi UFJ Trust and Banking Corporation
20．Office for payment
Shinbashi Branch, Sumitomo Mitsui Banking Corporation
21．Amount to be paid in for the Warrants and grounds for the calculation of the amount of property to
be contributed upon their exercise
The amount to be paid in for one Warrant has been set at the amount specified in Section 8 by taking into
consideration these Terms and Conditions and the provisions of the purchase agreement between the
Company and the allottee, using a Monte Carlo simulation, which is a general pricing model. In addition, theamount of property to be contributed upon exercise of the Warrants has been set at the amount specified
in Section 9.
22．Application of the Act on Book-Entry Transfer of Corporate Bonds and Shares
Given that the Warrants are Book-Entry Transfer Warrants defined in the Act on Book-Entry Transfer ofCorporate Bonds and Shares, all Warrants are governed by this Act. The Warrants shall be handled inaccordance with the Operational Rules for Book-Entry Transfer of Shares, etc., the enforcement regulations
thereof and other regulations established by Japan Securities Depository Center, Inc.
23．Book-entry transfer institution
Japan Securities Depository Center, Inc.
7-1 Nihonbashi Kabutocho, Chuo-ku, Tokyo
24．Miscellaneous conditions(1) We will take necessary measures such as replacing with appropriate words when Companies Act or otherrelevant laws are revised.
(2) These Terms and Conditions shall be effective when the relevant securities registration statement filed in33

accordance with the Financial Instruments and Exchange Act takes effect.
(3) In addition to these Terms and Conditions, other matters necessary for the issuance of the Warrants shall be
determined at the discretion of the Company’s representative director.

34

BrightPath Biotherapeutics Co., Ltd. Series 18 Warrants
Terms and Conditions
1．Name of the Warrants
BrightPath Biotherapeutics Co., Ltd. Series 18 Warrants（hereinafter referred to as the “Warrant(s)”）
2. Total amount of issue
960,000 yen (8 yen per warrant)
3．Subscription period
Until July 5, 2024
4．Date of allotment and payment
July 5, 2024
5．Offering method
All Warrants are allotted to EVO FUND by the method of allotment of securities to specified third parties(third-party allotment).
6．Class and number of shares underlying the Warrants(1) The class of shares underlying all Warrants shall be common stock of BrightPath Biotherapeutics Co., Ltd(hereinafter referred to as the “Company”).
(2) Total number of shares underlying all Warrants shall be 12,000,000 shares. The number of shares
underlying one Warrant shall be 100 shares (hereinafter referred to as the “Number of Allotted Shares”). If
the Company conducts a stock split or a consolidation of shares for the Company's common stock(hereinafter collectively referred to as “Stock Reconstruction”), the Number of Allotted Shares shall be
adjusted in accordance with the following formula. However, fractions less than one share arising from theadjustment shall be rounded down.
Number of Allotted Shares after adjustment= Number of Allotted Shares before adjustment x Ratio of Stock Reconstruction
If, however, the Number of Allotted Shares is adjusted pursuant to the other reasons, the Number of Allotted
Shares shall be adjusted subject to the resolution of the board of directors of the Company as far as it isrational.
7．Total number of the Warrants
120,000 warrants
8．Amount to be paid in for each Warrant35

8 yen per Warrant
9．Value of the property to be contributed upon exercise of the Warrants or method of calculating suchvalue(1) The property to be contributed upon exercise of each Warrant shall be cash, and its value shall be an amountobtained by multiplying the Exercise Price (as defined below) by the Number of Allotted Shares.
(2) The amount per share of the Company’s common stock to be contributed upon exercise of the Warrants(hereinafter referred to as “Exercise Price”) shall initially be 62 yen.
10．Revision of the Exercise Price(1) The exercise price is subject to the initial revision on the trading day (as defined below) immediately after
the date of allotment and the subsequent revision on each trading day thereafter (hereinafter referred to as
the “Revision Date”). The exercise price shall be revised to an amount equal to 96% of the closing priceof the Company's common stock in regular trading on the Tokyo Stock Exchange on the trading day
immediately preceding the Revision Date (as defined below), rounded up to the nearest one yen. If therevised exercise price calculated in the way specified above is to fall below the Minimum Exercise Price (asdefined below), the Minimum Exercise Price shall be adopted as the revised exercise price. If, however,there is no closing price on the Revision Date, the exercise price shall not be revised. If an event definedin Section 11 occurs, the closing date on the Revision Date shall be adjusted rationally.
A “trading day” means a day on which a trading session is held on the Tokyo Stock Exchange.
“Revision Date” means the effective date for revising the exercise price on any trading day.
(2) The minimum exercise price is 32 yen (hereinafter referred to as the “Minimum Exercise Price”).
(3) The Minimum Exercise Price shall be adjusted pursuant to Section 11.
11．Adjustment to the Exercise Price(1) If the total number of issued shares of the Company’s common stock changes or is likely to change in anyof the cases specified in Section 11(2) after the Warrants have been issued, the Company shall adjust theExercise Price in accordance with the following formula (hereinafter referred to as the “Exercise Price
Adjustment Formula”).
Numbershares newly

Number of=
Exercise
Price after
adjustment

outstanding
Price

+

issuedordisposed ofsharesExerciseofAmountxcontributed per
share

Market value per share×

beforeNumber ofadjustment

outstanding
sharesNumber of shares+

newly issued or
disposed of(2) The Exercise Price shall be adjusted by the Exercise Price Adjustment Formula in any of the following cases.
The Exercise Price so adjusted shall be effective from the day specified for each applicable case.

36

(i)

In the case where the Company newly issues shares of the Company’s common stock or disposes ofany such shares held by the Company at a price less than the market price specified in Section 11(4)(ii)(including the cases of allotting shares without contribution), except where the Company issues ordisposes of shares as stock-based compensation subject to transfer restriction for the Company’s
officers or employees, delivers shares based on exercise of warrants (including those attached tobonds), acquires shares with put options or shares subject to call, or delivers shares based on exercise
of any other right to ask for such delivery, or delivers shares of the Company’s common stock in thecontext of a company split, share exchange or merger. The Exercise Price after adjustment shallbecome effective on the payment date (which shall be the last day of the payment period designatedfor the offering or on the effective date for the allotment of securities without contribution, as applicable),or on the day immediately following the record date, if any, for identifying the shareholders eligible forthe allotment in such issuance or disposition.

(ii)

In the case of issuing shares of the Company’s common stock through a stock split, the exercise priceafter adjustment shall be effective on the day immediately following the record date for the stock split.
In the case of issuing shares of the Company’s common stock through allotment of shares without
contribution, the exercise price after adjustment shall be effective on the day immediately following therecord date for the allotment of shares without contribution if such date exists, or on the day immediately
following the date the allotment of shares without contribution get effective.

The “number of shares newly issued or disposed of” used in the Exercise Price Adjustment Formula means
an increase in the number of shares of the Company’s common stock arising as a result of the stock
split.
(iii) In the case of issuing or granting shares with put options for which shares of the Company’s common
stock are to be delivered at a price lower than the market value specified in Section 11(4)(ii) or issuingor granting warrants (including those attached to bonds) for which their holders are entitled to ask forthe delivery of shares of the Company’s common stock at a price lower than the market value specified
in Section 11(4)(ii) (excluding series 17 warrants and series 19 warrants), except where the Company
issues stock options to its officers or employees, the exercise price after adjustment shall be calculatedby the Exercise Price Adjustment Formula on the assumption that all put options or all warrants, as thecase may be, are exercised under the original conditions. the Exercise Price so adjusted shall become
effective on the payment date for shares with put options, on the allotment date of warrants, or on theeffective date for the allotment of securities without contribution, as the case may be. If, however, arecord date for identifying the shareholders eligible for the allotment is set, the Exercise Price after
adjustment shall be effective from the day immediately following the record date.
(iv) In the case where shares of the Company’s common stock are delivered at a price lower than themarket value specified in Section 11(4)(ii), in exchange for the Company’s acquisition of shares subject
to call or warrants (including those attached to bonds) subject to call that the Company has alreadyissuedThe Exercise Price after adjustment shall become effective on the day immediately following theacquisition date.
Notwithstanding the foregoing, if any adjustment to the exercise price made under Item (iii) occurs
before the adjustment made pursuant to the preceding paragraphs in relation to the shares subject to37

call or warrants (including those attached to bonds) subject to call in question, the exercise price to beobtained after the latter adjustment shall be calculated with consideration for the former adjustment.
(v)

Notwithstanding Items (i) to (iii) above, if a record date is set in any of the cases described in thoseItems and the validity of the Exercise Price after adjustment is subject to the approval of theshareholders meeting, the board of directors or any other authorized organization of the Company tobe obtained after the record date, the Exercise Price after adjustment shall become effective on the
day immediately following the approval date. In this situation, if any Warrant Holder exercises Warrants
during the period from the day immediately following the record date to the approval date, the Company
shall additionally deliver shares of its common stock to the Warrant Holder in the number calculated by
the following formula.
Exercise
Price

Numberof=sharesbeforeadjustment

Exercise−

Number of shares issued at thePrice afterx

adjustment

Exercise Price before adjustment
during the period in question

Exercise Price after adjustment
Fractions less than one share shall be rounded down.
(3) If the difference between the Exercise Price after adjustment calculated by the Exercise Price Adjustment
Formula and the Exercise Price before adjustment is less than one yen, the Exercise Price shall not be
adjusted. If ,however, the Exercise Price subsequently needs to be adjusted upon occurrence of an event
requiring adjustment, the amount obtained by subtracting such difference from the Exercise Price then in
effect shall be used as the Exercise Price before adjustment in the Exercise Price Adjustment Formula.
(4) In the calculation by the Exercise Price Adjustment Formula:(i)

The value shall be calculated to the first decimal place and rounded to the nearest yen unit.

(ii)

The market value used in the Exercise Price Adjustment Formula shall be the average closing price of
the Company’s common stock at the Tokyo Stock Exchange for the 30 consecutive trading days
(excluding days on which no closing price is available) beginning on the 45th trading day prior to theeffective date of the Exercise Price after adjustment (or prior to the record date, in the case of Item(2)(v) of this Section). In this case, the average value shall be calculated to the second decimal place
and rounded off to the first decimal place.

(iii) The number of outstanding shares to be used in the Exercise Price Adjustment Formula shall be thetotal number of issued shares of the Company’s common stock as of the record date, if any, for
identifying the shareholders eligible for the allotment or as of the day one month prior to the effective
date of the Exercise Price after adjustment, if there is no such record date, less the number of suchcommon stock shares held by the Company as of the same date. In the case described in Section
11(2)(ii), the number of shares newly issued or disposed of used in the Exercise Price Adjustment
Formula shall not include the number of shares of the Company’s common stock to be allotted to suchcommon stock shares held by the Company as of the record date.
(5) In addition to the case where the Exercise Price is required to be adjusted under Section 11(2), the Company
shall make necessary adjustment to the Exercise Price in any of the following cases.
(i)

In the case where the Exercise Price needs to be adjusted for the purpose of a consolidation of shares,
38

company split, share exchange or merger(ii)

In the case where the Exercise Price needs to be adjusted due to the occurrence of any other event
leading to a change or likely to give rise to a change in the number of shares of the Company’s common
stock(iii) In the case where multiple events requiring adjustment to the Exercise Price occurs sequentially andthe effects from a certain event need to be considered for the purpose of fixing the Exercise Price
before adjustment to be used for calculating the Exercise Price after adjustment in connection with anyother event(6) Notwithstanding the case described in Section 11(2), if the date the exercise price after adjustment is initiallyapplied falls on the Revision Date as defined in Section 10, the Company shall make necessary adjustment.
(7) When intending to adjust the Exercise Price (or the Minimum Exercise Price), the Company shall notify the
Warrant Holders in writing on or before the day immediately preceding the effective date of the adjustment,
which notification shall state the intention of making such adjustment, reasons for the adjustment, theExercise Price before adjustment, the Exercise Price after adjustment (or the Minimum Exercise Price after
adjustment), the effective date and other necessary matter. If, however, the Company is unable to provide
such advance notification in the case specified in Section 11(2)(v) or under any other circumstances, theCompany shall provide the notification of the adjustment promptly after the effective date.
12．Exercise Period for the Warrants
From July 8, 2024 to July 7, 2026
13．Other conditions for exercising Warrants
Exercising any Warrant in part is not allowed.
14．Acquisition of Warrants
If all of BrightPath Biotherapeutics Co., Ltd. Series 3 Unsecured Straight Bonds issued on August 1, 2024
are redeemed and the Company’s board of directors adopts a resolution to approve the necessity ofacquiring Warrants, the Company may, on the acquisition date determined by the board of directors, acquire
all or part of the Warrants held by the Warrant Holders at a price equal to the amount paid in for each
Warrant, upon giving 2 weeks' prior notice in accordance with the provisions of Articles 273 and 274 of theCompanies Act. If such acquisition covers only a part of all remaining and unexercised Warrants, random
drawings or any other impartial selection system shall be used.
15．Issuance of warrant certificates
The Company will not issue warrant certificates for the Warrants.
16．Increase in the stated capital and capital reserves when shares are issued based upon exercise of
the Warrants
When shares are issued based upon exercise of Warrants, the amount of stated capital to be increased
shall be the amount obtained by multiplying the maximum amount of increase in stated capital as calculated
pursuant to Article 17(1) of the Regulations on Corporate Accounting by 0.5, rounding up fractions less than
one yen. As a result, the amount of capital reserves to be increased shall be the amount obtained by39

subtracting the amount of stated capital to be increased as calculated above from the maximum amount of
increase in stated capital as aforesaid.
17．Procedure for exercising Warrants(1) To exercise Warrants, the Warrant Holder shall submit a warrant exercise notice stating required matters to
the office specified in Section 19 during the exercise period specified in Section 12.
(2) To exercise Warrants, the Warrant Holder shall, in addition to submitting the exercise notice specified in
Section 16(1), pay the full amount of the property required to be contributed upon the warrant exercise in
cash by transfer to the Company’s designated account in the office for payment specified in Section 20.
(3) A notice of exercise of Warrants shall become effective on the day on which all of the following are fulfilled:
the office for warrant exercise specified in Section 19 shall have been fully informed of all required mattersfor the warrant exercise and the full amount of the property required to be contributed upon the warrant
exercise shall have been paid into the account specified in Section 17(2).
18．Delivery of shares
The Company will deliver shares by book-entry transfer to the account the Warrant Holder designates after
the warrant exercise become effective.
19．Office for warrant exercise
Securities Agency Division, Mitsubishi UFJ Trust and Banking Corporation
20．Office for payment
Shinbashi Branch, Sumitomo Mitsui Banking Corporation
21．Amount to be paid in for the Warrants and grounds for the calculation of the amount of property to
be contributed upon their exercise
The amount to be paid in for one Warrant has been set at the amount specified in Section 8 by taking into
consideration these Terms and Conditions and the provisions of the purchase agreement between the
Company and the allottee, using a Monte Carlo simulation, which is a general pricing model. In addition, theamount of property to be contributed upon exercise of the Warrants has been set at the amount specified
in Section 9.
22．Application of the Act on Book-Entry Transfer of Corporate Bonds and Shares
Given that the Warrants are Book-Entry Transfer Warrants defined in the Act on Book-Entry Transfer ofCorporate Bonds and Shares, all Warrants are governed by this Act. The Warrants shall be handled inaccordance with the Operational Rules for Book-Entry Transfer of Shares, etc., the enforcement regulations
thereof and other regulations established by Japan Securities Depository Center, Inc.
23．Book-entry transfer institution
Japan Securities Depository Center, Inc.
7-1 Nihonbashi Kabutocho, Chuo-ku, Tokyo

40

24．Miscellaneous conditions(1) We will take necessary measures such as replacing with appropriate words when Companies Act or otherrelevant laws are revised.
(2) These Terms and Conditions shall be effective when the relevant securities registration statement filed inaccordance with the Financial Instruments and Exchange Act takes effect.
(3) In addition to these Terms and Conditions, other matters necessary for the issuance of the Warrants shall be
determined at the discretion of the Company’s representative director.

41

BrightPath Biotherapeutics Co., Ltd. Series 19 Warrants
Terms and Conditions
1．Name of the Warrants
BrightPath Biotherapeutics Co., Ltd. Series 19 Warrants（hereinafter referred to as the “Warrant(s)”）
2. Total amount of issue
360,000 yen (4 yen per warrant)
3．Subscription period
Until July 5, 2024
4．Date of allotment and payment
July 5, 2024
5．Offering method
All Warrants are allotted to EVO FUND by the method of allotment of securities to specified third parties(third-party allotment).
6．Class and number of shares underlying the Warrants(1) The class of shares underlying all Warrants shall be common stock of BrightPath Biotherapeutics Co., Ltd(hereinafter referred to as the “Company”).
(2) Total number of shares underlying all Warrants shall be 9,000,000 shares. The number of shares underlying
one Warrant shall be 100 shares (hereinafter referred to as the “Number of Allotted Shares”). If theCompany conducts a stock split or a consolidation of shares for the Company's common stock (hereinaftercollectively referred to as “Stock Reconstruction”), the Number of Allotted Shares shall be adjusted inaccordance with the following formula. However, fractions less than one share arising from the adjustment
shall be rounded down.
Number of Allotted Shares after adjustment= Number of Allotted Shares before adjustment x Ratio of Stock Reconstruction
If, however, the Number of Allotted Shares is adjusted pursuant to the other reasons, the Number of Allotted
Shares shall be adjusted subject to the resolution of the board of directors of the Company as far as it isrational.
7．Total number of the Warrants
90,000 warrants
8．Amount to be paid in for each Warrant42

4 yen per Warrant
9．Value of the property to be contributed upon exercise of the Warrants or method of calculating suchvalue(1) The property to be contributed upon exercise of each Warrant shall be cash, and its value shall be an amountobtained by multiplying the Exercise Price (as defined below) by the Number of Allotted Shares.
(2) The amount per share of the Company’s common stock to be contributed upon exercise of the Warrants(hereinafter referred to as “Exercise Price”) shall initially be 64 yen.
10．Revision of the Exercise Price(1) The exercise price is subject to the initial revision on the trading day (as defined below) immediately after
the date of allotment and the subsequent revision on the third trading day after the immediately preceding
revision date (hereinafter referred to as the “Revision Date”). On each Revision Date, the exercise price will
be revised to an amount equal to either: (a) the average value of the closing prices of the Company's
common stock in regular trading published by the Tokyo Stock Exchange on the three consecutive trading
days immediately preceding the Revision Date, but excluding the days on which no closing price is available(“Calculation Period”), rounded down to the nearest one yen, or (b) 90% of the closing price of theCompany's common stock in regular trading published by the Tokyo Stock Exchange on the trading day
immediately preceding the Revision Date, rounded down to the nearest one yen, whichever is the higher. If
the revised exercise price calculated in the way specified above is to fall below the Minimum Exercise Price(as defined below), the Minimum Exercise Price shall be adopted as the revised exercise price. If, however,there is no closing price on the Revision Date, the exercise price shall not be revised. If an event definedin Section 11 occurs, the closing date on the Revision Date shall be adjusted rationally.
A “trading day” means a day on which a trading session is held on the Tokyo Stock Exchange.
“Revision Date” means the effective date for revising the exercise price on any trading day.
(2) The minimum exercise price is 32 yen (hereinafter referred to as the “Minimum Exercise Price”).
(3) The Minimum Exercise Price shall be adjusted pursuant to Section 11.
11．Adjustment to the Exercise Price(1) If the total number of issued shares of the Company’s common stock changes or is likely to change in anyof the cases specified in Section 11(2) after the Warrants have been issued, the Company shall adjust theExercise Price in accordance with the following formula (hereinafter referred to as the “Exercise Price
Adjustment Formula”).
Numbershares newly

Number of=
Exercise
Price after
adjustment

outstanding

ExercisePrice
beforeadjustment

×

of

+

issuedordisposed ofsharesAmountxcontributed per
share

Market value per share
Number ofoutstanding

43+

Number of shares
newly issued orshares

disposed of(2) The Exercise Price shall be adjusted by the Exercise Price Adjustment Formula in any of the following cases.
The Exercise Price so adjusted shall be effective from the day specified for each applicable case.
(i)

In the case where the Company newly issues shares of the Company’s common stock or disposes ofany such shares held by the Company at a price less than the market price specified in Section 11(4)(ii)(including the cases of allotting shares without contribution), except where the Company issues ordisposes of shares as stock-based compensation subject to transfer restriction for the Company’s
officers or employees, delivers shares based on exercise of warrants (including those attached tobonds), acquires shares with put options or shares subject to call, or delivers shares based on exercise
of any other right to ask for such delivery, or delivers shares of the Company’s common stock in thecontext of a company split, share exchange or merger. The Exercise Price after adjustment shallbecome effective on the payment date (which shall be the last day of the payment period designatedfor the offering or on the effective date for the allotment of securities without contribution, as applicable),or on the day immediately following the record date, if any, for identifying the shareholders eligible forthe allotment in such issuance or disposition.

(ii)

In the case of issuing shares of the Company’s common stock through a stock split, the exercise priceafter adjustment shall be effective on the day immediately following the record date for the stock split.
In the case of issuing shares of the Company’s common stock through allotment of shares without
contribution, the exercise price after adjustment shall be effective on the day immediately following therecord date for the allotment of shares without contribution if such date exists, or on the day immediately
following the date the allotment of shares without contribution get effective.

The “number of shares newly issued or disposed of” used in the Exercise Price Adjustment Formula means
an increase in the number of shares of the Company’s common stock arising as a result of the stock
split.
(iii) In the case of issuing or granting shares with put options for which shares of the Company’s common
stock are to be delivered at a price lower than the market value specified in Section 11(4)(ii) or issuingor granting warrants (including those attached to bonds) for which their holders are entitled to ask forthe delivery of shares of the Company’s common stock at a price lower than the market value specified
in Section 11(4)(ii) (excluding series 17 warrants and series 18 warrants), except where the Company
issues stock options to its officers or employees, the exercise price after adjustment shall be calculatedby the Exercise Price Adjustment Formula on the assumption that all put options or all warrants, as thecase may be, are exercised under the original conditions. the Exercise Price so adjusted shall become
effective on the payment date for shares with put options, on the allotment date of warrants, or on theeffective date for the allotment of securities without contribution, as the case may be. If, however, arecord date for identifying the shareholders eligible for the allotment is set, the Exercise Price after
adjustment shall be effective from the day immediately following the record date.
(iv) In the case where shares of the Company’s common stock are delivered at a price lower than themarket value specified in Section 11(4)(ii), in exchange for the Company’s acquisition of shares subject
to call or warrants (including those attached to bonds) subject to call that the Company has alreadyissued44

The Exercise Price after adjustment shall become effective on the day immediately following theacquisition date.
Notwithstanding the foregoing, if any adjustment to the exercise price made under Item (iii) occurs
before the adjustment made pursuant to the preceding paragraphs in relation to the shares subject tocall or warrants (including those attached to bonds) subject to call in question, the exercise price to beobtained after the latter adjustment shall be calculated with consideration for the former adjustment.
(v)

Notwithstanding Items (i) to (iii) above, if a record date is set in any of the cases described in thoseItems and the validity of the Exercise Price after adjustment is subject to the approval of theshareholders meeting, the board of directors or any other authorized organization of the Company tobe obtained after the record date, the Exercise Price after adjustment shall become effective on the
day immediately following the approval date. In this situation, if any Warrant Holder exercises Warrants
during the period from the day immediately following the record date to the approval date, the Company
shall additionally deliver shares of its common stock to the Warrant Holder in the number calculated by
the following formula.
Exercise
Price

Numberof=sharesbeforeadjustment

Exercise−

Number of shares issued at thePrice afterx

adjustment

Exercise Price before adjustment
during the period in question

Exercise Price after adjustment
Fractions less than one share shall be rounded down.
(3) If the difference between the Exercise Price after adjustment calculated by the Exercise Price Adjustment
Formula and the Exercise Price before adjustment is less than one yen, the Exercise Price shall not be
adjusted. If ,however, the Exercise Price subsequently needs to be adjusted upon occurrence of an event
requiring adjustment, the amount obtained by subtracting such difference from the Exercise Price then in
effect shall be used as the Exercise Price before adjustment in the Exercise Price Adjustment Formula.
(4) In the calculation by the Exercise Price Adjustment Formula:(i)

The value shall be calculated to the first decimal place and rounded to the nearest yen unit.

(ii)

The market value used in the Exercise Price Adjustment Formula shall be the average closing price of
the Company’s common stock at the Tokyo Stock Exchange for the 30 consecutive trading days
(excluding days on which no closing price is available) beginning on the 45th trading day prior to theeffective date of the Exercise Price after adjustment (or prior to the record date, in the case of Item(2)(v) of this Section). In this case, the average value shall be calculated to the second decimal place
and rounded off to the first decimal place.

(iii) The number of outstanding shares to be used in the Exercise Price Adjustment Formula shall be thetotal number of issued shares of the Company’s common stock as of the record date, if any, for
identifying the shareholders eligible for the allotment or as of the day one month prior to the effective
date of the Exercise Price after adjustment, if there is no such record date, less the number of suchcommon stock shares held by the Company as of the same date. In the case described in Section
11(2)(ii), the number of shares newly issued or disposed of used in the Exercise Price Adjustment
Formula shall not include the number of shares of the Company’s common stock to be allotted to such45

common stock shares held by the Company as of the record date.
(5) In addition to the case where the Exercise Price is required to be adjusted under Section 11(2), the Company
shall make necessary adjustment to the Exercise Price in any of the following cases.
(i)

In the case where the Exercise Price needs to be adjusted for the purpose of a consolidation of shares,
company split, share exchange or merger(ii)

In the case where the Exercise Price needs to be adjusted due to the occurrence of any other event
leading to a change or likely to give rise to a change in the number of shares of the Company’s common
stock(iii) In the case where multiple events requiring adjustment to the Exercise Price occurs sequentially andthe effects from a certain event need to be considered for the purpose of fixing the Exercise Price
before adjustment to be used for calculating the Exercise Price after adjustment in connection with anyother event(6) Notwithstanding the case described in Section 11(2), if the date the exercise price after adjustment is initiallyapplied falls on the Revision Date as defined in Section 10, the Company shall make necessary adjustment.
(7) When intending to adjust the Exercise Price (or the Minimum Exercise Price), the Company shall notify the
Warrant Holders in writing on or before the day immediately preceding the effective date of the adjustment,
which notification shall state the intention of making such adjustment, reasons for the adjustment, theExercise Price before adjustment, the Exercise Price after adjustment (or the Minimum Exercise Price after
adjustment), the effective date and other necessary matter. If, however, the Company is unable to provide
such advance notification in the case specified in Section 11(2)(v) or under any other circumstances, theCompany shall provide the notification of the adjustment promptly after the effective date.
12．Exercise Period for the Warrants
From July 8, 2024 to July 7, 2027
13．Other conditions for exercising Warrants
Exercising any Warrant in part is not allowed.
14．Acquisition of Warrants
If all of BrightPath Biotherapeutics Co., Ltd. Series 3 Unsecured Straight Bonds issued on August 1, 2024
are redeemed and the Company’s board of directors adopts a resolution to approve the necessity ofacquiring Warrants, the Company may, on the acquisition date determined by the board of directors, acquire
all or part of the Warrants held by the Warrant Holders at a price equal to the amount paid in for each
Warrant, upon giving 2 weeks' prior notice in accordance with the provisions of Articles 273 and 274 of theCompanies Act. If such acquisition covers only a part of all remaining and unexercised Warrants, random
drawings or any other impartial selection system shall be used.
15．Issuance of warrant certificates
The Company will not issue warrant certificates for the Warrants.
16．Increase in the stated capital and capital reserves when shares are issued based upon exercise of46

the Warrants
When shares are issued based upon exercise of Warrants, the amount of stated capital to be increased
shall be the amount obtained by multiplying the maximum amount of increase in stated capital as calculated
pursuant to Article 17(1) of the Regulations on Corporate Accounting by 0.5, rounding up fractions less than
one yen. As a result, the amount of capital reserves to be increased shall be the amount obtained bysubtracting the amount of stated capital to be increased as calculated above from the maximum amount of
increase in stated capital as aforesaid.
17．Procedure for exercising Warrants(1) To exercise Warrants, the Warrant Holder shall submit a warrant exercise notice stating required matters to
the office specified in Section 19 during the exercise period specified in Section 12.
(2) To exercise Warrants, the Warrant Holder shall, in addition to submitting the exercise notice specified in
Section 16(1), pay the full amount of the property required to be contributed upon the warrant exercise in
cash by transfer to the Company’s designated account in the office for payment specified in Section 20.
(3) A notice of exercise of Warrants shall become effective on the day on which all of the following are fulfilled:
the office for warrant exercise specified in Section 19 shall have been fully informed of all required mattersfor the warrant exercise and the full amount of the property required to be contributed upon the warrant
exercise shall have been paid into the account specified in Section 17(2).
18．Delivery of shares
The Company will deliver shares by book-entry transfer to the account the Warrant Holder designates after
the warrant exercise become effective.
19．Office for warrant exercise
Securities Agency Division, Mitsubishi UFJ Trust and Banking Corporation
20．Office for payment
Shinbashi Branch, Sumitomo Mitsui Banking Corporation
21．Amount to be paid in for the Warrants and grounds for the calculation of the amount of property to
be contributed upon their exercise
The amount to be paid in for one Warrant has been set at the amount specified in Section 8 by taking into
consideration these Terms and Conditions and the provisions of the purchase agreement between the
Company and the allottee, using a Monte Carlo simulation, which is a general pricing model. In addition, theamount of property to be contributed upon exercise of the Warrants has been set at the amount specified
in Section 9.
22．Application of the Act on Book-Entry Transfer of Corporate Bonds and Shares
Given that the Warrants are Book-Entry Transfer Warrants defined in the Act on Book-Entry Transfer ofCorporate Bonds and Shares, all Warrants are governed by this Act. The Warrants shall be handled inaccordance with the Operational Rules for Book-Entry Transfer of Shares, etc., the enforcement regulations
thereof and other regulations established by Japan Securities Depository Center, Inc.
47

23．Book-entry transfer institution
Japan Securities Depository Center, Inc.
7-1 Nihonbashi Kabutocho, Chuo-ku, Tokyo
24．Miscellaneous conditions(1) We will take necessary measures such as replacing with appropriate words when Companies Act or otherrelevant laws are revised.
(2) These Terms and Conditions shall be effective when the relevant securities registration statement filed inaccordance with the Financial Instruments and Exchange Act takes effect.
(3) In addition to these Terms and Conditions, other matters necessary for the issuance of the Warrants shall be
determined at the discretion of the Company’s representative director.

48