Director［ Kibe-log ］

Representative Executive OfficerPresident and CEOKibe Kazunari#9

The Digital World INFRONEER aims to create
Dear Stakeholders, I am Kazunari Kibe, President and CEO of INFRONEER Holdings Inc.
Thank you so much for reading the "Kibe-log" again.
This time I would like to explain the background and intentions behind our collaboration with the Whole Earth
Foundation ("WEF"), including the establishment of a new company, which was released on May 9, 2023.
As explained in a recent release, INFRONEER will provide 2 billion yen in funding to the WEF, which operates
the blockchain-based TEKKON gaming app, and will establish a new company that will utilize various
infrastructure data collected by TEKKON, a citizen participation data collection app developed by the WEF.
This new company is looking to build a new infrastructure management service using the collected
infrastructure data with citizen participation in collaboration with the “Fantasy Marketing Department”, an
informal division of Maeda Corporation, a group company under INFRONEER.
Why is INFRONEER investing in the blockchain and game app business? We will elaborate our objectives andbackground one by one in the following.

Collaboration with Japan’s proud entrepreneur
First, let me talk about the WEF and TEKKON, the partners in this partnership.
The WEF is a corporation established in Singapore by Takashi Kato, a well-known "serial entrepreneur".
Mr. Kato, a former banker at Bank of Tokyo-Mitsubishi, started SCHAFT, a humanoid robot venturecompany in Silicon Valley, U.S. In November 2013, he sold the company to Google, attracting the world
attention.

In June 2015, he founded FRACTA in Silicon Valley, an AI startup that develops software to optimize-1-water piping updates through artificial intelligence. In May 2018, he sold a majority stake of FRACTA toKurita Water Industries (Mr. Kato served as its CEO until 2021).
He then established the WEF in 2020 to implement a mechanism he devised that combines blockchain
and infrastructure data collection.
As these footprints indicate, Mr. Kato is an entrepreneur who has used technology to provide solutions to
the problems of aging infrastructure and maintenance that the world is facing.
Next, I would like to talk about TEKKON, which is operated by the WEF.
TEKKON is a location-based game in which players earn points by taking and posting pictures ofinfrastructure such as manholes, utility poles, and electric lights. "Pokémon GO," which caused a hugeboom, is a game in which players catch Pokémon in the city, but TEKKON is characterized not by
Pokémon, but by the fact that players take pictures of various infrastructure in the city.
“Pokémon Go made me addicted to catching Pokémon, so what's the fun in shooting manholes?" Youmight be thinking, " Why would it be fun to take pictures of manholes?”But there are incentives in place.
Earned points can be exchanged for crypto asset tokens listed on overseas crypto asset exchanges (a typeof crypto asset, in TEKKON's case, WEC), which can ultimately be converted to cash. With that said,
since September 2022, when TEKKON was released, the number of registered users has reached about
130,000 globally, as well as 3.94 million manhole postings, and 550,000 utility poles postings. (As of May23, 2023)

Existing infrastructure with no digital data
So why the infrastructure images? Behind this is the problem of aging infrastructure that countries aroundthe world are facing.
Japan, for example, is entering a period of renewal for many of its civil engineering infrastructure and publicbuildings, including roads, ports, water supply, and sewage systems, many of which have been in place fora long time. According to the Cabinet Office, the total cost of maintenance and renewal of civil engineering
infrastructure and public buildings required between 2015 and 2054 will be 547 trillion yen. That amount-2-is enormous.
But the problem is not only the cost of maintenance and renewal. Japan has been developing its
infrastructure since the era of high-speed economic growth. However, the information on the infrastructure
is incomplete and is not stored in the form of digital data.
For example, in the case of waterworks, there is almost no information remaining on water pipes laid before
1975. For water pipes installed after that, information on when and where they were buried is recorded, but
the data on the documents often differs from the actual location. Manhole data has also not been digitized.
The same thing is happening with other infrastructure. Power companies do not have data in digital formon the utility poles they have placed, and municipalities do not have data on the streetlights they haveinstalled on the roads. Without digital data, they cannot proceed with DX.
Of course, it is conceivable that local governments and electric power companies could check infrastructure
once again. But this is not very realistic as it would require a tremendous amount of money and manpower
to check all the infrastructure throughout the country. When I was searching for a way to collect digital data
to diagnose and predict the deterioration of roads, waterworks, sewage, and other infrastructure, I met Mr.
Kato, the founder of FRACTA, and learned about TEKKON.
To collect digital data of infrastructure, TEKKON is trying to harness the power of the general public by
combining location-based games, crypto tokens, and social contributions. This game is not very suitable forunderground pipes like water pipes, but for above-ground infrastructure, taking pictures and visuallychecking the condition is not a problem. I believe this is a very well-designed system.
Japan has 15 million sewage manholes and 36 million utility poles. Looking at the world, it is estimated that
there are 200 million sewage manholes and 460 million utility poles. Similarly, infrastructure data has notbeen digitized in other countries. We see TEKKON's potential as quite high.

The world we want to realize through TEKKON
As you can see, it is important for society to collect digital data on various infrastructures. Now, let me
answer the question of why INFRONEER is establishing a new company with the WEF and how this willcontribute to INFRONEER's growth.

-3-One of the reasons we partnered with the WEF this time is the value of the data itself that is collected byTEKKON.
As we have written in the Kibe-log, INFRONEER is committed to "de-contracting" as a pillar of its businessstrategy. In addition to the traditional contracting business, "de-contracting" means taking business risks
for projects as an operator who knows construction inside out. One direction in this area is to focus onconcessions, in which the company acquires the rights to operate infrastructure such as roads, water supply,
sewage systems, and arenas.
We believe that infrastructure business with its investment, can generate more returns than contracting
business by leveraging our engineering and financial expertise.
In this infrastructure business, data on aging infrastructure is highly valuable.
INFRONEER, through its subsidiaries Maeda Corporation and Maeda Road Construction Co., Ltd., isundertaking the maintenance and management of roads and public facilities that are under the control ofthe municipalities. Right now, we are checking the condition of the infrastructure by ourselves, but if wecan utilize the data those local citizens have posted, it will be possible to increase the value of the existing
infrastructure together with the users.
In addition, as data on aging can lead to the invention of new models for infrastructure renewal, thisinformation must be highly sought after by related companies. We think that the data itself is also in highdemand.
The other reason we partnered with the WEF is its technology for developing algorithms.
As mentioned earlier, Mr. Kato, who founded the WEF, started FRACTA in Silicon Valley, USA, before
establishing the company. FRACTA is a company that provides software services to diagnose and predictthe deterioration of various types of infrastructure, such as waterworks and railroads. This company has
already been sold to Kurita Water Industries Ltd., but the engineers involved in FRACTA remain at theWEF. I think that we can work with them to create a new algorithm for diagnosis of deterioration.
Aging water pipes are not only affected by when they were laid, but also by various other factors such as
road congestion, temperature, soil, and the burial depth of the pipes. If we can develop an algorithm that
can input such data and identify the optimal time for renewal, it would be a major competitive advantage
for the infrastructure business in the future.
And the last thing I want to mention is the importance of "moving first".
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To remain a front runner
As you are all aware, the construction industry is very conservative, and there are still many aspects of theindustry that remain unchanged. It is symbolized by the fact that the business model of contracting, which
has been in use since the Edo period, is still the mainstream. In this circumstance, INFRONEER ispromoting "de-contracting" to create a new business model for the construction industry, but very few
people would feel that the construction industry is innovative.
The world is changing at an incredible pace. Like ChatGPT for generative AI, blockchain, metaverse, andso on. The only way to incorporate these new technologies and services into your business model is to try
them out.
We expect the use of virtual reality (VR) and metaverse will expand in the fields of construction andinfrastructure in the future. By reproducing real structures such as buildings and condominiums within themetaverse, it will be possible to simulate optimal construction methods, construction periods, costs, andmore. Demolition can also be simulated risk-free within the metaverse. I think there is a high affinity
between the fields of construction and infrastructure and the metaverse.
In addition, as TEKKON has shown, combining blockchain and crypt tokens may enable the creation of a
new mechanism for citizen-participatory infrastructure management. As the cost of infrastructure
maintenance and management increases in the future, if we can successfully involve the power of citizens,
we may be able to reduce those costs.
To open up new business areas in these construction and infrastructure industry, it is essential to haveoutside help like Mr. Kato, who is familiar with cutting-edge technology, as well as traditional resources.
To this end, we want to team up with challenging people in different industries and start something new.
As is widely believed, the future of business is all about data. The world of infrastructure is no different. To
be a front runner in the infrastructure business, we need to have a variety of data related to infrastructure.
Of course, there are many companies that are far ahead of us, but we believe that it is very meaningful toenter this world of data as a pioneer in the construction and infrastructure industry.
It may be a while before we see results, but we hope to see this investment recognized as a major turning
point when we look back on INFRONEER's footsteps in the future.

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