Sun Frontier Fudousan Co., Ltd

Business Alliance with Advantage Advisors
Co., Ltd., and Fundraising through Issuanceof Convertible Bonds with Share Acquisition
Rights
September 20, 2023
Security code: 8934

Purpose of Business Alliance and Fundraising
Our corporate group will enter into a Business Alliance Agreement with Advantage Advisors
Co., Ltd. on September 20, 2023 and will raise funds by issuing convertible bonds with shareacquisition rights to the funds for which Advantage Advisors provides services.
Support for growthBusiness Allianceand FundraisingIssuance of convertible bonds• We contribute to the realization of a sustainable society through ourbusiness activities.
• We aim to achieve sustainable growth for our business and to improve
our corporate value over medium to long term.
Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

1

Sun Frontier Fudousan Co., LtdSummary of Advantage Advisors
A pioneer in private equity investment with over 25years of experience in 110 investments worth over 500
billion yen (Note 1) .

Advantage Partners Group

Advantage Partners nurtures its portfolio companies to be able to grow as competitive companies even after they have left its funds, andPhilosophy

supports an investment process and post-investment management process which allows it to provide value not only to its funds andinvestors, but also to all affiliated parties, including other shareholders, employees and their families, business partners, and financialinstitutions, so that they can enjoy the economic value through the fund investments.

Advantage Advisors

Four Investment Strategies ofAdvantage Partners

Within the Advantage Partners Group, a pioneer in Japanese private equity funds,
Advantage Advisors is responsible for a “private solutions” strategy in which it acquires
Buyouts in Japan

Private solutions

shares of listed companies, etc. and works hand in hand with the management teams of
those companies to enhance corporate value.

<Recent Major Clients>
RENAISSANCE INCORPORATED<Strategic Partners>
Development Bank of Japan Inc. (Note 2)
Buyouts in Asia

Renewable
Energy/Sustainability

NTT DoCoMo Inc.

KOSHIDAKA HOLDINGS Co., LTD.
VisasQ Inc.
Saint Marc Holdings Co., Ltd.
Star Flyer Inc.

The Monogatari Corporation
Ferrotec Holdings Corporation

Note 1: The number of investments does not include subsequent investments, and the stated amount includes investments through co-investment funds for which Advantage Partners provides services.
Note 2: The Development Bank of Japan has been supporting the Advantage Advisors Growth Support Investment Limited Partnership since 2019, and is utilizing a “Special Investment Operations” scheme for investment projects from thePartnership which meets the requirements to qualify for “Special Investment Operations” (which meet the policy goals of (i) revitalizing the regional economy or (ii) increasing competitiveness of Japanese companies while (iii) promoting
the supply of funds for the self-reliant development of private businesses) and business requirements (including the effective use of management support, management innovation, and improvement of productivity and profitability). The
Development Bank of Japan will also support this case by utilizing a “Special Investment Operations” scheme.

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

2

Sun Frontier Fudousan Co., Ltd

Business Areas of Sun Frontier
Realizing a sustainable society by solving social issues through business activities

Realizing a sustainable society
Environmental Protection

Office Building Business
Real Estate Real Estate
Revitalization Service- Replanning- Sales brokerage

Hotel and TourismBusinessHotelHotelManagement Development- Management- Real estate small-lot - Rental brokerage
products- Building management- Rental buildings- Maintenance- Assets consultancy

Others- Construction- Delinquent rent guarantee- Rental conference rooms

Regional Revitalization

Human Resource Development

OverseasBusiness
U.S. (NY)- Development- Replanning- Revitalization- SaleTaiwanShimayume BusinessVietnam- Hotel management and development- Tourism business
Taxis, Restaurants
Rental cars, Renal bicycles- Condo development

3- Solar Power
EPC, PPA- Agricultural solar
sharing- Sales brokerage

Regional RevitalizationCopyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Environmental
Energy Business- Sales of storage

batteries- Condo management- Environmental
credits
Sun Frontier Fudousan Co., LtdOur Agenda and Expected Effects of theBusiness Alliance and Fundraising
Our Agenda

Expected Effects- Further broaden the Office Building Business,- On business

which has grown through synergy between the “RealThrough the Business Alliance Agreement withAdvantage Advisors ( “AA”), which has a good

Estate Revitalization Business” and the “Real Estate

track record of increasing corporate value for a wide

Service Business,” and expand and further enhance

range of companies, we expect to receive

our business foundation by promoting themanagement support from AA based on its know-

diversification of our business in related fields.

how and network. We also expect that the business-Bolster business investments to achieve 10,000

alliance will allow us to implement and promotevarious measures by deploying highly specialized

hotel guest rooms (the total number of rooms

external professionals and to train our ownoperated) in 10 years by refining the high value-personnel.
added business model that combines development- On finance(manufacturing) and management capabilities in theWe expect to achieve rapid financing with a“Hotel and Tourism Business”

limited immediate dilutive impact on shares.

-Accelerate business growth through M&ACopyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

4Sun Frontier Fudousan Co., Ltd

Business Alliance Initiatives
Support from AA

Our Initiatives
Expansion of Office Building Business area

- Provide know-how for each initiative and supportfor the steady implementation of measures therefor

Expand business to the areas surrounding the five centralwards of Tokyo/other areas

Promotion of M&A
Enhance the creation of the Office Building Business within
the group, and expand hotels- Provide support for the search of M&A candidates
and for the enhancement of reviewing process andPMIDiversification of sales methods for revitalized
office space
Increase small-lot owned products and expand sales thereof- Provide support for the expansion of sales networks
by utilizing AA’s diverse networks

Accelerate growth of Hotel and Tourism Business
Create highly profitable hotels and increase repeat customers- Provide support for the establishment of businessmodels and enhanced marketing

Operational Upgrading Measures
Promote DX to improve productivity, enhance procurement,
support sales, and reduce costs- Provide support for productivity and improved
efficiency by deploying highly specialized
professionals

OthersFormulate the next mid-term management plan, enhance IR,and support personnel recruitment and training

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

5

Sun Frontier Fudousan Co., Ltd

Use of Funds acquired through theIssuance of Convertible Bonds
Specific use of funds

Amount1. Acquisition of land in
conjunction with newApprox.
hotel development and8 billion
construction work
yeninvestment

2. M&A funds
primarily for the hotel
development businessand construction
businessApprox.
2 billionyen

Scheduledtiming ofexpenditure

Details

October 2023
to March 2026

<Major sites for potential hotel development>
Ishikari-shi, Hokkaido, Sakata-shi, Yamagata,Fujikawaguchiko-machi, Yamanashi, Hakonemachi, Kanagawa, Atami-shi, Shizuoka, Ozumachi, Kumamoto, Ishigaki-shi, Okinawa,
and others

October 2023
to March 2026

<Major business to be considered for M&A>
- Hotel and Tourism Business- Office Building Business (ConstructionBusiness)*There are no specific M&A plans at thistime.

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

6Sun Frontier Fudousan Co., Ltd

Business Growth Example
Aiming to accelerate growth andincrease corporate value by
promoting each project

Effects ofBusinessAlliance

Shift inordinary profits 20
1614.7(billionyen)

FY2023/3
Actualresults

FY2024/3
Forecast

FY2025/3
Mid-termmanagement
plan (target)

Promoting projects through business alliance
Note: This page contains forward-looking figures that may significantly differ from actual
results due to various risks and uncertainties.

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

7

Sun Frontier Fudousan Co., Ltd

Outline of Convertible Bonds with
Share Acquisition Rights
Type

Convertible bonds with share acquisition rights

Scheduled issuance date

October 6, 2023

Amount of funds to beacquired

Approximately 10 billion yen

Bond interest rate
Maturity0%
5 years

Convertible period(Exercisable period)

5 years after the payment due date
However, in principle, non-convertible for 1 year after the payment duedateConversion price(Exercise price)

1,554 yen per share
In principle, convertible (exercisable) only when exceeding 120% of theconversion price (exercise price)
However, this shall not apply to cases such as any conversion (exercise)after the end of the business alliance period.

Maximum dilution ratio

Allottee

13.2%
AAGS S5, L.P.
(100% owned by Advantage Advisors Growth Support Investment LimitedPartnership)

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

8Sun Frontier Fudousan Co., Ltd

Business Alliance andConversion ScheduleIssuance2023/10After 1 year
2024/10After 2years
2025/10After 3years
2026/10After 4years
2027/10After 5years
2028/10Growthsupport
Businessalliance withAAFundraising
Payment to becompleted by thescheduled issuance day
Conversion ofconvertible bonds withshare acquisition rights

Non-exercisable
in principle

In principle, convertible (exercisable) only when exceeding 120% of the conversion price (exercise price)
However, this shall not apply to cases such as any conversion (exercise) after the end of the business alliance period.

(Dilution will not occur)

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

9Sun Frontier Fudousan Co., LtdImpact on Shares
Increase in corporate value from increased liquidity through dilution
55, 190,454 shares
Acquirerof converted
shares11.7%

48,755,500 shares

Outstanding
shares50.6%

Outstanding
shares
56.4%

44.7%
Maximum
13.2% increase

Fixed shares
43.6%

Fixed shares
49.4%

Before conversion of convertible bonds
with share acquisition rights
Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

After conversion of convertible bonds with share acquisition rights (Whenall convertible bonds are converted at the conversion price of 1,554 yen)

10

Sun Frontier Fudousan Co., LtdWe sincerely look forward to yourcontinued support.

Sun Frontier Fudousan Co., Ltd- This document has been prepared only for the purpose of providing information, and should not be construed as an offer, solicitation, orcommercial conduct of any nature associated with any specific products and securities. Investors are advised to invest at their own discretion

and responsibility. Investors wishing to purchase shares of our company should contact their own securities brokers or dealers.
- The information provided in this document does not always align with the Financial Instruments and Exchange Act of Japan, related laws andregulations such as the Building Lots and Buildings Transaction Business Law, or the Security Listing Regulations of the Tokyo StockExchange.
- This document contains forward-looking statements. These forward-looking statements do not constitute any guarantee of future performance.
- We take all possible measures to ensure that the contents of this document are as accurate as possible. However, we make no guarantee of theaccuracy or reliability of the information herein. Please also note that the contents of this document are subject to change or cancellation
without prior notice.

<For inquiries regarding this document>
Sun Frontier Fudousan Co., Ltd.
Corporate Planning Department
Telephone : 03-5521-1551
Website : https://www.sunfrt.co.jp/
Email : ir-contact@sunfrt.co.jp