Disclaimer: This translation is prepared and provided for readers’ convenience only. This summary does not constitute any
guarantee, and the Company will not compensate any losses and/or damage stemming from actions taken based on thesestatements. In the case that there is any discrepancy between the Japanese and English versions, the Japanese version is assumed
to be correct.

August 12, 2021

Summary of Consolidated Financial Results
for the First Six Months of the Fiscal Year Ending December 31, 2021 (JGAAP)
Listed company’s name: RaQualia Pharma Inc.
Listed on:
Tokyo Stock Exchange (TSE)
Stock code:
4579
URL:
https://www.raqualia.com/
Representative:
Hirobumi Takeuchi, President and CEO
Contact:
Hidefumi Sugiyama, General Manager, Finance & Accounting Dept.
Scheduled date of filing of quarterly securities report: August 12, 2021
Scheduled date of dividend payment:―
Supplementary documents for quarterly results:
Yes
Quarterly results briefing:
Yes(TEL) +81-52-446-6100(Amounts are rounded down to the nearest million yen.)

1.

Consolidated financial results for the first six months of the fiscal year ending December 31, 2021 (January 1, 2021 toJune 30, 2021)(1) Consolidated operating results (cumulative)(Percentage figures represent changes from the same period of the previous fiscal year.)Net sales

Operating profit

First six months ended
million yen%
million yen
June 30, 2021
1,320
254.3
314
June 30, 2020
372
(31.7)(403)
Note: Comprehensive income
Six months ended June 30, 2021:
Six months ended June 30, 2020:
Earnings per share (Basic)
First six months ended
June 30, 2021
June 30, 2020

Profit attributable toowners of parent

Ordinary profit%

million yen%

million yen

%

–
–

432
(402)
331 million yen(469) million yen

–
–

302
(459)

–
–

[–%]
[–%]

Earnings per share (Diluted)

yen

yen

14.45
(21.93)

14.45–(2) Consolidated financial position
Total assets
Net assets
Equity ratio
As ofmillion yen
million yen%
June 30, 2021
4,768
4,342
90.8
December 31, 2020
4,251
4,011
94.1
Reference: Equity As of June 30, 2021: 4,331 million yen As of December 31, 2020: 3,999 million yen
2.

Dividends
First quarter-end
yenAnnual dividends per share
Second quarter-end Third quarter-end
Fiscal year-end
yen

Fiscal year ended–
0.00–
December 31, 2020
Fiscal year ending–
0.00
December 31, 2021
Fiscal year ending–
December 31, 2021
(forecast)
Note: Revisions to the forecasts of dividends most recently announced: None

yen

Total

yen

yen

0.00

0.00

0.00

0.00

3.

Forecasts of consolidated financial results for the fiscal year ending December 31, 2021 (January 1, 2021 to December 31,
2021)(Percentage figures represent year-on-year changes)

Net sales
million yen

Operating profit%

million yen

Profit attributable to Earnings perowners of parent
share (Basic)

Ordinary profit%

million yen%

million yen%

yen

Fiscal year ending
118
5.65
2,246 102.9
61
–
184
–
–
December 31, 2021
Note: Revisions to the forecasts of results most recently announced: None
* As the Company conducts performance management on an annualized basis, forecasts of results over a six-month period areomitted.

* Notes(1) Changes in significant subsidiaries during the first six months ended June 30, 2021 (changes in specified subsidiaries resulting
in the change in scope of consolidation): None
(2) Application of special accounting for preparing quarterly consolidated financial statements: Yes
Note: For more details, please refer to the section of “(4) Notes to quarterly consolidated financial statements (Application of
special accounting for preparing quarterly consolidated financial statements)” of “2. Quarterly consolidated financial
statements and significant notes thereto” on page 8 of the attached material.
(3) Changes in accounting policies, changes in accounting estimates, and restatements of prior financial statements
a. Changes in accounting policies due to the revisions to accounting standards and other regulations: Noneb. Changes in accounting policies due to other reasons: Yes
c. Changes in accounting estimates: None
d. Restatements of prior financial statements: None
Note: For more details, please refer to the section of “(4) Notes to quarterly consolidated financial statements (Changes inaccounting policies)” of “2. Quarterly consolidated financial statements and significant notes thereto” on page 8 of theattached material.
(4) Number of issued shares (common shares)
a. Total number of issued shares at the end of the period (including treasury shares)
As of June 30, 2021

20,951,642 shares

As of December 31, 2020

20,951,642 sharesb. Total number of treasury shares at the end of the period
As of June 30, 2021

50 shares

As of December 31, 2020

50 sharesc. Average number of outstanding shares during the period (cumulative from the beginning of the fiscal year)
For the first six months ended June 30, 2021

20,951,592 shares

For the first six months ended June 30, 2020

20,950,454 shares* Quarterly financial results reports are exempt from quarterly review conducted by certified public accountants or an
audit corporation.
* Appropriate use of financial forecasts and other special remarks(Caution concerning forward-looking statements)
Forward-looking statements provided in this document, including financial forecasts, are based on the information currently
available to the Company and certain assumptions considered reasonable. Such statements are included without any guarantee asto their future achievement. Actual results, etc. may differ materially from the forecasts depending on various factors. For the
suppositions that form the assumptions for earnings forecasts and cautions concerning the use thereof, please refer to the sectionof “(3) Qualitative information regarding consolidated earnings forecasts” of “1. Qualitative information regarding settlement ofaccounts for the first six months” on page 3 of the attached material.
(Method of accessing supplementary documents for financial results and details of financial results briefing)
The Company plans to hold a financial results briefing on Friday, August 20, 2021.
The Company plans to post the documents used at the briefing on its website promptly after the briefing is held.

Contents of attachment
1.

Qualitative information regarding settlement of accounts for the first six months ...................................................... 2(1) Qualitative information regarding consolidated operating results ............................................................................ 2(2) Qualitative information regarding consolidated financial position........................................................................... 3(3) Qualitative information regarding consolidated earnings forecasts .......................................................................... 3

2.

Quarterly consolidated financial statements and significant notes thereto ................................................................... 4(1) Consolidated balance sheet ....................................................................................................................................... 4(2) Consolidated statement of income and consolidated statement of comprehensive income ...................................... 6
Consolidated statement of income (cumulative)....................................................................................................... 6
Consolidated statement of comprehensive income (cumulative) ............................................................................. 6(3) Consolidated statement of cash flows ....................................................................................................................... 7(4) Notes to quarterly consolidated financial statements................................................................................................ 8
Notes on premise of going concern .......................................................................................................................... 8
Notes on significant changes in the amount of shareholders’ equity ........................................................................ 8
Application of special accounting for preparing quarterly consolidated financial statements .................................. 8
Changes in accounting policies ................................................................................................................................ 8
Additional information ............................................................................................................................................. 8
Segment information, etc. ......................................................................................................................................... 8
Significant subsequent event .................................................................................................................................... 9

-1-

1.

Qualitative information regarding settlement of accounts for the first six months(1) Qualitative information regarding consolidated operating results
1) Financial results
During the first six months ended June 30, 2021, although there were some companies with strong financial results in the
manufacturing industry, the outlook for the Japanese economy continues to be difficult to forecast as financial results in nonmanufacturing industries saw challenges in general, and personal consumption became polarized. In the pharmaceutical industry,
although many companies are facing declining business performance due to COVID-19, initiatives have been active for thedevelopment of not only new mRNA vaccines and drugs for COVID-19 but also new drugs in general.
Under such conditions, the Group achieved the following financial results during the first six months.
The financial results of marketed drug products were as follows:
Regarding human drug products, the drug for gastro-esophageal reflux disease (tegoprazan/brand name: K-CAB®) licensed to
HK inno.N Corporation (headquarters: Seoul, South Korea) saw a 52.5% decrease compared with the preceding half year due toseasonal fluctuations. However, strong sales were seen as in the previous fiscal year as sales increased by 28.7% year on year.
With regard to pet drug products, strong sales were seen in the EP4 antagonist (grapiprant/brand name: GALLIPRANT®)
especially in the U.S., which was licensed to Elanco Animal Health Inc. (headquarters: Indiana, U.S.) and has been marketed asa drug for osteoarthritis in dogs. The sales in total recorded an increase of 4.9% compared with the preceding quarter. Meanwhile,
the Ghrelin receptor agonist (capromorelin/brand name: ENTYCE®), which has an indication for anorexia management for dogs,
saw an increase of 95.8% and recorded steady sales compared with the preceding quarter due to seasonal fluctuations.
Regarding licensed-out drug products, the retinoic acid receptor alpha agonist (Tamibarotene/TM-411/SY-1425) licensed to Syros
Pharmaceuticals Inc. (headquarters: Massachusetts, U.S.) by the Company’s consolidated subsidiary TMRC Co., Ltd. (“TMRC”)
was administered to the first subjects in the Phase III clinical trials in the U.S. in May 2021, and TMRC received a milestone
payment.
As for collaborative research projects, collaborative research with ASKA Pharmaceutical. Co., Ltd. is progressing steadily. In
parallel, the Group has been promoting internal research projects to generate development candidate compounds.
Accordingly, operating results for the first six months, the reporting period, were as follows. Business revenue for the period was
1,320 million yen (up 254.3% year on year), operating profit totaled 314 million yen (compared with operating loss of 403 million
yen a year earlier), ordinary profit totaled 432 million yen (compared with ordinary loss of 402 million yen a year earlier), andprofit attributable to owners of parent was 302 million yen (compared with loss attributable to owners of parent of 459 million
yen a year earlier).
Business revenue mainly consists of milestone income of 748 million yen (compared with – million yen a year earlier) and sales
royalty income of 488 million yen (up 45.4% year on year). On the other hand, total business expenses were 1,005 million yen(up 29.6% year on year). This total mainly consists of cost of business revenue (174 million yen, a 201.8% increase from thesame period of the previous fiscal year), research and development expenses (496 million yen, a 10.2% increase from the same
period of the previous fiscal year) and other selling, general and administrative expenses (334 million yen, a 24.9% increase fromthe same period of the previous fiscal year). A main reason for an increase of other selling, general and administrative expenses
is that cost for the Ordinary General Meeting of Shareholders associated with shareholder proposals was 60 million yen, morethan double that of ordinary years.
2)

Research and development activities

Research and development expenses of the entire Group during the first six months were 496 million yen. For the first six months,
there were no material changes to the research and development activities.

-2-(2) Qualitative information regarding consolidated financial position
1) Analysis of assets, liabilities and net assets
AssetsTotal assets as of June 30, 2021 were 4,768 million yen, an increase of 517 million yen (up 12.2%) from the end of theprevious fiscal year. This is mainly attributable to an increase in cash and deposits of 631 million yen and a decrease in
securities of 179 million yen.
Liabilities
Total liabilities as of June 30, 2021 were 425 million yen, an increase of 185 million yen (up 77.2%) from the end of theprevious fiscal year. This is mainly attributable to an increase in accounts payable - other of 83 million yen and an increase
in income taxes payable of 85 million yen.
Net assets
Total net assets as of June 30, 2021 were 4,342 million yen, an increase of 331 million yen (up 8.3%) from the end of theprevious fiscal year. This is mainly attributable to the recording of profit attributable to owners of parent of 302 million yen
and an increase in valuation difference on available-for-sale securities of 28 million yen.
Consequently, the equity ratio was 90.8% (down 3.3 percentage points from the end of the previous fiscal year).
2)

Analysis of cash flows

The balance of cash and cash equivalents (“net cash”) as of June 30, 2021 amounted to 2,133 million yen (compared with 2,152
million yen a year earlier), an increase of 71 million yen (up 3.5%) from the end of the previous fiscal year.
The respective cash flows in the first six months and the factors thereof are as follows.
Cash flows from operating activities
Net cash provided by operating activities was 368 million yen (compared with net cash of 35 million yen used a year earlier).
This is mainly attributable to the recording of profit before income taxes of 436 million yen and depreciation of 67 million
yen, a cash inflow from a decrease in trade receivables of 89 million yen, and a cash outflow from an increase in prepaid
expenses of 142 million yen.
Cash flows from investing activities
Net cash used in investing activities was 372 million yen (compared with net cash of 9 million yen provided a year earlier).
This is mainly attributable to payments into time deposits of 207 million yen, purchase of securities of 100 million yen,purchase of investment securities of 100 million yen, and proceeds from sales of investment securities of 110 million yen.
Cash flows from financing activities
Net cash used in financing activities was 5 million yen (compared with net cash of 0 million yen used a year earlier). Thisis mainly attributable to repayments of lease obligations of 5 million yen.
(3) Qualitative information regarding consolidated earnings forecasts
There are no changes to the consolidated earnings forecasts for the fiscal year ending December 31, 2021, announced in “NoticeConcerning Revision to Full-Year FY12/21 Consolidated Earnings Forecast” on June 30, 2021.

-3-

2.

Quarterly consolidated financial statements and significant notes thereto(1) Consolidated balance sheet(Thousands of yen)
As of December 31, 2020

AssetsCurrent assets
Cash and deposits
Accounts receivable - trade
Securities
Work in process
Supplies
Advance payments - trade
Prepaid expenses
Other
Total current assets
Non-current assets
Property, plant and equipment
Buildings, net
Tools, furniture and fixtures, net
Leased assets, net
Total property, plant and equipment
Intangible assets
Trademark right
Software
Other
Total intangible assets
Investments and other assets
Investment securities
Long-term prepaid expenses
Deferred tax assets
Other
Total investments and other assets
Total non-current assets
Total assets-4-

As of June 30, 2021

1,394,128
530,818
719,418–
6,540
36,41250,24396,671
2,834,232

2,025,936
441,003539,970
1,050
13,77548,448
192,917
17,8283,280,930

78,501
208,278
46,187
332,967

74,957
216,180
42,058333,197

4,439
27,927639
33,005

4,235
31,937639
36,812

1,037,601
10
2,959
10,457
1,051,029
1,417,002
4,251,235

1,104,174
205
2,959
10,055
1,117,394
1,487,404
4,768,335

(Thousands of yen)
As of December 31, 2020
Liabilities
Current liabilities
Accounts payable - trade
Lease obligations
Accounts payable - otherAccrued expenses
Income taxes payable
Deposits received
Other
Total current liabilities
Non-current liabilities
Lease obligations
Asset retirement obligations
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Total accumulated other comprehensive income
Share acquisition rights
Total net assets
Total liabilities and net assets-5-

As of June 30, 2021

41,83018,281
52,66649,86820,882
3,133–
186,662

46,97917,394
136,380
49,502
106,2285,804
9,206
371,496

27,23812,031
14,17353,443
240,106

22,171
12,08019,66053,911
425,4072,255,401
2,445,184(706,157)(21)
3,994,407

2,255,401
2,445,184(403,329)(21)
4,297,235

4,809
4,809
11,912
4,011,129
4,251,235

33,77933,77911,912
4,342,927
4,768,335

(2) Consolidated statement of income and consolidated statement of comprehensive income
Consolidated statement of income (cumulative)(Thousands of yen)First six months ended
June 30, 2020
Business revenue
Business expenses
Cost of business revenue
Research and development expenses
Other selling, general and administrative expenses
Total business expenses
Operating profit (loss)
Non-operating income
Interest income
Interest on securities
Foreign exchange gains
Subsidy income
Gain on valuation of compound financial instruments
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Share issuance costs
Loss on valuation of compound financial instruments
Settlement package
Other
Total non-operating expenses
Ordinary profit (loss)
Extraordinary income
Gain on sales of investment securities
Gain on sales of non-current assets
Total extraordinary income
Profit (loss) before income taxes
Income taxes
Profit (loss)
Profit attributable to non-controlling interests
Profit (loss) attributable to owners of parent

First six months ended
June 30, 2021

372,737

1,320,666

57,914450,656
267,662776,233(403,495)

174,812496,527
334,349
1,005,690
314,976

3,160
16,142
–
1,500
3,800
502
25,105642
10,419110,135
5,785
–
2,785
129,768–
24,18378––
024,261(402,652)

665
–
–
1,510
9,600
–
11,775432,969

6,441
750
7,191
(395,461)
63,999(459,460)–(459,460)

3,382
–
3,382
436,352
133,523
302,828–
302,828

Consolidated statement of comprehensive income (cumulative)(Thousands of yen)First six months ended
June 30, 2020
Profit (loss)
Other comprehensive income
Valuation difference on available-for-sale securities
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests-6-

First six months ended
June 30, 2021

(459,460)

302,828(10,270)(10,270)(469,731)

28,96928,969331,798(469,731)

331,798––

(3) Consolidated statement of cash flows(Thousands of yen)First six months ended
June 30, 2020
Cash flows from operating activities
Profit (loss) before income taxes
Depreciation
Interest income
Interest income on securities
Foreign exchange losses (gains)
Subsidy income
Loss (gain) on valuation of compound financial
instruments
Interest expenses
Share issuance costs
Settlement package
Loss (gain) on sales of investment securities
Loss (gain) on sales of non-current assets
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables
Decrease (increase) in advance payments - trade
Decrease (increase) in prepaid expenses
Increase (decrease) in accounts payable - other
Decrease (increase) in consumption taxes refund
receivable
Other, net
SubtotalInterest and dividends received
Interest paid
Subsidies received
Income taxes paid
Settlement package paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Payments into time deposits
Purchase of securities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Proceeds from short-term borrowings
Repayments of short-term borrowings
Proceeds from issuance of shares resulting from exerciseof share acquisition rights
Repayments of lease obligations
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period-7-First six months ended
June 30, 2021

(395,461)
53,781(3,160)(16,142)
20,617(1,500)436,352
67,071(642)(10,419)(95,962)(5,785)(3,800)

1,510

–
78
–
(6,441)(750)
497,672535(1,034)(578)(102,233)(21,576)

665
–
9,600
(3,382)–89,815(8,285)
5,149(12,036)(142,674)(10,584)(15,111)

66,696

6,233
11,12821,041–
1,500(69,207)–(35,537)

25,133412,220
10,509(665)
5,785(49,910)(9,600)368,338––(49,799)750(2,828)(106,933)
168,309185
9,683(207,380)(100,000)(63,088)–(12,398)(100,649)
110,923–(372,592)––

10,000(10,000)

110

–

(370)
(260)
(21,237)(47,353)
2,200,206
2,152,853(5,953)(5,953)82,132
71,9252,061,316
2,133,241

(4) Notes to quarterly consolidated financial statements
Notes on premise of going concern
No items to report.
Notes on significant changes in the amount of shareholders’ equity
No items to report.
Application of special accounting for preparing quarterly consolidated financial statements(Calculation of tax expenses)
Tax expenses are calculated by multiplying the profit before income taxes by the reasonably estimated effective tax rates after
the application of tax effect accounting to the profit before income taxes for the fiscal year including the quarter under review.
Income taxes is the amount inclusive of income taxes - deferred.
Changes in accounting policies(Change in methodology for calculating tax expenses)
Tax expenses were calculated in the same method as that used in year-end closing of accounts. However, the Company has
adopted the consolidated tax payment system starting from the first quarter ended March 31, 2021, aiming to perform quarterly
closing of accounts quickly and efficiently. Accordingly, the calculation method has been changed starting from the firstquarter ended March 31, 2021. With the changed calculation method, tax expenses are calculated by multiplying the profit
before income taxes for the quarter by the reasonably estimated effective tax rates after the application of tax effect accounting
to the profit before income taxes for the fiscal year.
As the effect of this change on quarterly consolidated financial statements is immaterial, no retrospective application has been
performed.
Additional information(Application of tax effect accounting for transition from consolidated taxation system to group tax sharing system)
As for items regarding the transition to the group tax sharing system introduced in the “Act Partially Amending the Income
Tax Act” (Act No. 8 of 2020) and items revised on non-consolidated taxation system in connection with the transition to thegroup tax sharing system, the Company and its consolidated subsidiaries have not applied the provisions of paragraph 44 of
the “Guidance on Accounting Standard for Tax Effect Accounting” (Accounting Standards Board of Japan (ASBJ) Guidance
No. 28, February 16, 2018) as allowed by the provisions of paragraph 3 of the “Tax Effect Accounting for the Transition fromthe Consolidated Taxation System to the Group Tax Sharing System” (ASBJ PITF No. 39, March 31, 2020). Accordingly,
amounts of deferred tax assets and deferred tax liabilities are determined in accordance with the provisions of the tax law
before revision.
(Accounting estimates amid the spread of COVID-19)
The Group has determined the accounting estimates for impairment accounting of non-current assets, etc. based on information
available when preparing the consolidated financial statements. The effects of the spread of COVID-19 on the Group arelimited at the present time and the Group has determined that there will not be a significant impact on the estimates for the
fiscal year under review.
Segment information, etc.
[Segment information]
I. For the first six months ended June 30, 2020 (January 1, 2020 to June 30, 2020)
This information is omitted because the Group consists of a single business segment dealing with research and developmentof pharmaceutical and related businesses.
II.

For the first six months ended June 30, 2021 (January 1, 2021 to June 30, 2021)
This information is omitted because the Group consists of a single business segment dealing with research and developmentof pharmaceutical and related businesses.

-8-Significant subsequent event(Granting of restricted stock units)
The Company resolved at the Board of Directors meeting held on August 12, 2021 to introduce a plan for granting restricted
stock units (the “Plan”) to the Company’s employees as an incentive plan for the employees.
1. Purposes for introducing the Plan
The Company introduced the Plan for employees of the Company and the Company’s subsidiaries in order to provide themwith an incentive to sustainably increase the Company’s corporate value and to promote further shared value with theshareholders.
2. Overview of the Plan
(1) Overview of the Plan
Under the Plan, on condition that the employees of the Company and the Company’s subsidiaries have met certain
conditions, including serving as employees of the Company or the Company’s subsidiaries during the three-year
calculation period (the “Calculation Period”), common shares of the Company (the “Company’s Shares”) and money,
which is to be used as the funds for paying taxes related to the shares granted by the Company, are granted to theemployees upon the expiration of the relevant Calculation Period.
(2) Eligible persons
The persons eligible for the Plan shall be employees specified by the Company in advance (the “Eligible Employees”).
(3) Granting of shares and payment of money
The Company shall grant, to Eligible Employees who serve as employees of the Company or the Company’s subsidiaries
on the final business day of the Calculation Period, an amount of monetary claims, which is calculated by multiplying
the number of the Company’s Shares to be issued or disposed of for the Eligible Employees based on the resolution of
the Company’s Board of Directors by the amount to be paid in per share for the shares and issue or dispose of the sharesin exchange for in-kind contribution of the monetary claims.
The amount to be paid in per share for the Company’s Shares to be issued or disposed of under the Plan shall be
determined based on the closing price of the Company’s common shares on the Tokyo Stock Exchange on the business
day immediately preceding the date of the resolution of the Board of Directors (if no transaction is made on such businessday, the closing price on the closest preceding trading day) and shall not be particularly advantageous to Eligible
Employees.
Furthermore, to ensure the funds for paying taxes related to the granting of the Company’s Shares, the Company shallprovide money to the Eligible Employees as the portion of monetary payments, in addition to the monetary claims related
to the granting of the shares.
(4) Maximum number of the Company’s Shares to be granted to Eligible Employees
The maximum number of the Company’s common shares to be granted to Eligible Employees under the Plan shall be
150,000 shares for each Calculation Period. If the total number of issued shares of the Company increases or decreases
as a result of a share consolidation, share split, etc., the Company shall adjust the maximum number by multiplying it by
the ratio of the consolidation, split, etc.
(5) Maximum amount to be paid under the Plan
The total amount of monetary claims and money provided by the Company to Eligible Employees for use as in-kind
contribution under the Plan shall not exceed 20 million yen for each Calculation Period.
(6) Treatment in the event that reorganization, etc. occurs or other circumstances arise
If matters relating to a merger agreement under which the Company is the disappearing company, a share exchange
agreement or share transfer plan under which the Company becomes a wholly owned subsidiary, or other reorganization,etc. are approved at the Company’s General Meeting of Shareholders, or in the event that other circumstances specified
by the Company arise, the Company shall grant money, etc. for a reasonably determined number.

-9-