# EDGAR Filing Document

**Accession Number:** 0002080845
**File Stem:** 0001193125-26-289382
**Filing Date:** 2026-6
**Character Count:** 1483930
**Document Hash:** 4795b51df58f36b56dbd4bf4f8b8c336
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001193125-26-289382.hdr.sgml**: 20260630

**ACCESSION NUMBER**: 0001193125-26-289382

**CONFORMED SUBMISSION TYPE**: 20-F

**PUBLIC DOCUMENT COUNT**: 217

**CONFORMED PERIOD OF REPORT**: 20260331

**FILED AS OF DATE**: 20260630

**DATE AS OF CHANGE**: 20260630

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** PayPay Corp
- **CENTRAL INDEX KEY:** 0002080845
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-BUSINESS SERVICES, NEC [7389]
- **ORGANIZATION NAME:** 07 Trade & Services
- **EIN:** 000000000
- **STATE OF INCORPORATION:** M0
- **FISCAL YEAR END:** 0331

**FILING VALUES:**
- **FORM TYPE:** 20-F
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-43184
- **FILM NUMBER:** 261137994

**BUSINESS ADDRESS:**
- **ADDRESS IS A NON US LOCATION:** YES
- **STREET 1:** YOTSUYA TOWER, 1-6-1
- **CITY:** YOTSUYA, SHINJUKU-KU
- **NON US STATE TERRITORY:** TOKYO
- **PROVINCE COUNTRY:** M0
- **ZIP:** 160-0004
- **BUSINESS PHONE:** 81-3-6885-8181

**MAIL ADDRESS:**
- **ADDRESS IS A NON US LOCATION:** YES
- **STREET 1:** YOTSUYA TOWER, 1-6-1
- **CITY:** YOTSUYA, SHINJUKU-KU
- **NON US STATE TERRITORY:** TOKYO
- **PROVINCE COUNTRY:** M0
- **ZIP:** 160-0004

?xml version='1.0' encoding='ASCII'? 20-F

[**<u>**Table of Contents**</u>**](#toc_page)

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

------

**FORM** 20-F

(Mark One)

☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended March 31, 2026

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report__________

**For the transition period from __________ to __________**

Commission file number: 001-43184

PayPay Corporation

(Exact name of Registrant as specified in its charter)

------

**Not Applicable**

(Translation of Registrant's name into English)

Japan

(Jurisdiction of incorporation or organization)

Yotsuya Tower1-6-1 YotsuyaShinjuku-kuTokyo 160-0004Japan **+81-3-6885-8181**

(Address of principal executive offices)

Kotaro Emae**,** +81-3**-**6885-8181**,** investor.relations@paypay-corp.co.jp**,** 1-6-1 Yotsuya**,** Shinjuku-ku**,** Tokyo**,** 160-0004**,** Japan

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

---

| | | |
|:---|:---|:---|
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| American Depositary Shares, each representing<br>one common share | PAYP | The Nasdaq Stock Market LLC |
| Common Shares,<br>no par value\* |  | The Nasdaq Stock Market LLC\* |

---

\* Not for trading, but only in connection with the listing of the American Depositary Shares on The Nasdaq Stock Market LLC.

Securities registered or to be registered pursuant to Section 12(g) of the Act.

None.

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

None.

Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report.

676,955,535 common shares as of March 31, 2026.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒ No

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. ☐ Yes ☒ No

Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

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Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of "large accelerated filer, "accelerated filer," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Emerging growth company ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐

† The term "new or revised financial accounting standard" refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive- based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP ☐ International Financial Reporting Standards as issued by the International Accounting Standards Board ☒ Other ☐

If "Other" has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. Item 17 ☐ Item 18 ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

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[**<u>**Table of Contents**</u>**](#toc_page)

**TABLE OF CONTENTS**

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| | |
|:---|:---|
| [**<u>Part I</u>**](#part_i) |  |
| [**<u>Item 1. Identity of Directors, Senior Management and Advisers</u>**](#item_1) | 1 |
| [**<u>Item 2. Offer Statistics and Expected Timetable</u>**](#item2_offer_statistics_and_expected) | 1 |
| [**<u>Item 3. Key Information</u>**](#item3_key_information) | 1 |
| [**<u>Item 4. Information on the Company</u>**](#item4_information_on_the_company) | 40 |
| [**<u>Item 4A. Unresolved Staff Comments</u>**](#item4a_unresolved_staff_comments) | 75 |
| [**<u>Item 5. Operating and Financial Review and Prospects</u>**](#item5_operating_and_financial_review) | 76 |
| [**<u>Item 6. Directors, Senior Management and Employees</u>**](#item6_directors_senior_management) | 98 |
| [**<u>Item 7. Major Shareholders and Related Party Transactions</u>**](#item7_major_shareholders_and_related) | 105 |
| [**<u>Item 8. Financial Information</u>**](#item8_financial_information) | 111 |
| [**<u>Item 9. The Offer and Listing</u>**](#item9_the_offer_and_listing) | 112 |
| [**<u>Item 10. Additional Information</u>**](#item10_additional_information) | 112 |
| [**<u>Item 11. Quantitative and Qualitative Disclosures About Market Risk</u>**](#item11_quantitative_and_qualitative) | 124 |
| [**<u>Item 12. Description of Securities Other than Equity Securities</u>**](#item12_description_of_securities_other) | 127 |
| [**<u>Part II</u>**](#part_ii) |  |
| [**<u>Item 13. Defaults, Dividend Arrearages and Delinquencies</u>**](#item13_defaults_dividend_arrearages) | 129 |
| [**<u>Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds</u>**](#item14_material_modifications) | 129 |
| [**<u>Item 15. Controls and Procedures</u>**](#item15_controls_and_procedures) | 129 |
| [**<u>Item 16A. Audit committee financial expert</u>**](#item16a_audit_committee_financial) | 130 |
| [**<u>Item 16B. Code of Ethics</u>**](#item16b_code_of_ethics) | 131 |
| [**<u>Item 16C. Principal Accountant Fees and Services</u>**](#item16c_principal_accountant_fees) | 131 |
| [**<u>Item 16D. Exemptions from the Listing Standards for Audit Committees</u>**](#item16d_exemptions_from_the_listing) | 132 |
| [**<u>Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers</u>**](#item16e_purchases_of_equity_securities) | 132 |
| [**<u>Item 16F. Change in Registrant's Certifying Accountant</u>**](#item16f_change_in_registrants) | 132 |
| [**<u>Item 16G. Corporate Governance</u>**](#item16g_corporate_governance) | 132 |
| [**<u>Item 16H. Mine Safety Disclosure</u>**](#item16h_mine_safety_disclosure) | 133 |
| [**<u>Item 16I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections</u>**](#item16i_disclosure_regarding_foreign) | 133 |
| [**<u>Item 16J. Insider trading policies</u>**](#item16j_insider_trading_policies) | 133 |
| [**<u>Item 16K. Cybersecurity</u>**](#item16k_cybersecurity) | 133 |
| [**<u>Part III</u>**](#part_iii) |  |
| [**<u>Item 17. Financial Statements</u>**](#item17_financial_statements) | 135 |
| [**<u>Item 18. Financial Statements</u>**](#item18_financial_statements) | 135 |
| [**<u>Item 19. Exhibits</u>**](#item19_exhibits) | 136 |
| [**<u>Signatures</u>**](#signatures) |  |
| [**<u>Selected Statistical and Other Information</u>**](#selected_statistical_and_other_info) | A-1 |
| [**<u>Index to Consolidated Financial Statements</u>**](#index_to_consolidated_statements) | F-1 |

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**CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS AND RISK FACTOR SUMMARY**

This annual report on Form 20-F ("Annual Report") contains forward-looking statements that involve risks and uncertainties, including statements based on our current expectations, assumptions, estimates and projections about us and our industry. All statements other than statements of current or historical facts are forward-looking statements. These forward-looking statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements. In some cases, these forward-looking statements can be identified by

words or phrases such as "may," "will," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to" or other similar expressions. The forward-looking statements relate to, among others:

• our ability to successfully execute our business and growth strategy;

• our future financial performance, including our expectations regarding our revenue, cost of revenue and operating expenses and our ability to achieve and maintain future profitability;

• industry landscape of, and trends in, Japan's market for electronic payment services and digital financial services;

• our ability to compete successfully against future and current competitors;

• our expectations regarding demand for, and market acceptance of, our services;

• our ability to retain and grow our relationships with users and merchants;

• our ability to obtain and maintain the necessary licenses to operate our business;

• our ability to partner with card networks, payment services providers and other participants in the payment ecosystem;

• our ability to maintain and improve our technological infrastructure and protect it from cyberattacks while simultaneously continuing to innovate and develop new technologies and services;

• our ability to manage risk associated with our business;

• our ability to comply with existing, amended or new laws, regulations and policies applicable to our business; and

• general economic and business conditions and uncertainties affecting the markets in which we operate, and economic volatility that could adversely impact our business.

The forward-looking statements made in this Annual Report relate only to events or information as of the date on which the statements are made in this Annual Report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date on which the statements are made or to reflect the occurrence of unanticipated events. You should read this Annual Report and the documents that we have referred to in this Annual Report and have filed as exhibits to this Annual Report in their entirety and with the understanding that our actual future results may be materially different from what we expect.

**Risk Factor Summary**

Investing in our ADSs or common stock involves significant risks. You should carefully consider all of the information in this Annual Report before making an investment decision. Below is a summary of the principal risks we face. These risks are discussed more fully in "Item 3. Key Information—D. Risk Factors."

**Risks Related to Our Business**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•If we fail to manage our growth effectively, we may be unable to execute our business plan or maintain high levels of service and satisfaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•If we fail to attract new users, retain our active users or expand the scope of our relationship with our active users, our business, results of operations, financial condition, cash flows and prospects could be materially and adversely affected.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We may be unable to attract new merchants to utilize our services, grow our relationships with our existing merchants, and increase transaction volumes across our payment settlement services.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We may face challenges in maintaining and expanding synergies between our code-based payment settlement services and our credit card payment services.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Our ability to continue to successfully operate and grow PayPay Credit is subject to several risks.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We may not be able to realize the anticipated benefits, synergies and efficiencies from the integration of PayPay Bank Corporation and PayPay Securities Corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We may not be able to maintain and strengthen the ecosystem effects of our platform.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•There is no assurance that our alliances with the shareholders of our consolidated subsidiaries and equity-method affiliates will be successful.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•If the cashless payments industry and the digital financial services industry in Japan do not continue to expand and develop as we expect, our business, financial condition and results of operations could be adversely affected.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We had a history of losses in the past and we only recently achieved profitability, which we may not be able to maintain, and we may record losses and negative cash flow in the future.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Our ability to increase revenue and profitability, particularly for our Payment segment, depends on our pricing strategy and the expansion of our service offerings, both of which we may not be able to implement successfully.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We participate in markets that are competitive with continuously evolving technology and consumer needs, and if we do not compete effectively with established companies and new market entrants, our business, results of operations, cash flows and financial condition could be materially and adversely affected.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Our business depends on a strong and trusted brand, and any failure to maintain, protect, and enhance our brand, or any unfavorable media coverage, could materially and adversely affect our reputation, business, financial condition, results of operations, cash flows and prospects.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We depend on key management, as well as our experienced and capable employees, and any failure to attract, motivate, and retain our employees could harm our ability to maintain and grow our business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Acquisitions, strategic investments and entries into new businesses could disrupt our business, divert our management's attention, result in additional dilution to our shareholders, and materially and adversely affect our financial performance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We identified material weaknesses in our internal control over financial reporting and may identify additional material weaknesses in the future or otherwise fail to maintain proper and effective internal control over financial reporting. If we fail to establish and maintain proper internal control over financial reporting, our ability to produce accurate financial statements or comply with applicable regulations could be impaired. As a result, shareholders could lose confidence in our financial reporting, which could result in litigation or regulatory enforcement actions and would harm our business and the trading price of the ADSs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We are exposed to credit risk and the ability of various counterparties to pay us.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We are exposed to interest rate risk and other market risks.

**Risks Related to the Proposed Acquisition of a Controlling Stake in T&D Financial Life Insurance Company**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Although we have entered into definitive agreements to acquire a controlling stake in T&D Financial Life Insurance Company, the transaction may not be completed on the expected terms or timeline, or at all, and, even if completed, it may not deliver the benefits we currently expect and could expose us to significant regulatory, operational and financial risks.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Following the acquisition, any failure to successfully integrate TDFL's operations with our group could adversely impact the price of our ADSs and future business and operations.

**Risks Related to the SoftBank Group Corp. and SoftBank Group Companies**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We collaborate with SoftBank Group companies in the provision of our services. Any failure by such companies to continue to support our services, or a material change in our relationship with such companies, could adversely impact our services and could impact our overall business, financial condition, cash flows and results of operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Our current shareholders will continue to collectively hold substantial shareholdings and exercise influence over our operations.

**Risks Related to Technology, Information Systems and Intellectual Property**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Failure to maintain or improve our technology infrastructure could harm our business and prospects and materially and adversely affect our business and reputation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We rely on mobile operating systems and application marketplaces to make the PayPay app available to participants that utilize our platform, and if we do not effectively operate with or receive favorable placements within such application marketplaces, our usage or brand recognition could decline and our business, financial results, cash flows and results of operations could be materially and adversely affected.

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**Risks Related to Laws, Regulations and Compliance**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Failure to comply with the existing laws and regulations applicable to our business could subject us, or our subsidiaries or our associates, as applicable, to enforcement actions and penalties and otherwise harm our business, as well as divert our management's attention and resources and result in increased costs.

**External Risks Related to Economic Conditions and Other Factors**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Unfavorable economic conditions in Japan could have a material adverse effect on our business, financial condition and results of operations.

**Risks Related to Shares of our Common Stock and the ADSs**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Investors holding less than one "unit" of shares of our common stock will have limited rights as shareholders.

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**PART I**

**Item 1. Identity of Directors, Senior Management and Advisers**

Not applicable.

**Item 2. Offer Statistics and Expected Timetable**

Not applicable.

**Item 3. Key Information**

**A.** **[Reserved]**

**B.** **Capitalization and indebtedness**

Not applicable.

**C.** **Reasons for the offer and use of proceeds**

Not applicable.

**D.** **Risk factors**

*Investing in our securities involves a high degree of risk. You should carefully consider the risks and uncertainties described in this section, together with all of the other information in this Annual Report before making a decision to invest.*

*The risks and uncertainties described below may not be the only ones we face. Our business, financial condition, results of operations or prospects could also be harmed by risks and uncertainties not currently known to us or that we currently do not believe are material. If any of these risks actually occurs, our business, financial condition and results of operations could be materially and adversely affected. In that event, the trading price of our securities could decline, and you could lose part or all of your investment.*

**Risks Related to Our Business**

***If we fail to manage our growth effectively, we may be unable to execute our business plan or maintain high levels of service and satisfaction, and our business, results of operations, financial condition, cash flows and prospects could be adversely affected.***

We have experienced significant expansion of our business since the launch of our PayPay app and anticipate that we will continue to grow our merchants and our user base and to launch new services to take advantage of market opportunities. Following our acquisition of PayPay Card Corporation in October 2022 and the consolidation of PayPay Bank Corporation and PayPay Securities Corporation in April 2025, we expect to achieve growth as we leverage newly gained synergies and expand our array of service offerings. We are investing in our operational capabilities, including by increasing our product development costs and expenses related to our internal IT systems, in order to support such growth and initiatives, but if we do not maintain our current rate of growth or realize our targeted growth, our business, results of operations, financial condition, cash flows and prospects could be materially and adversely affected. Many factors may contribute to a decline in our growth rates, including increased competition, slowing demand for our services from existing and new users, reduced market acceptance of our existing services, transaction volume and mix, lower sales by our merchants, our merchants seeking to reduce the fees we charge to them, general economic conditions, including a decline in consumer spending power as a result of rising interest rates, government actions and policies, or a failure by us to continue capitalizing on growth opportunities. With the development of our business, having captured a large market share for code-based payment settlement services, we may face challenges to continue growing the scale of our business and Total GMV (See "Item 5. Operating and Financial Review and Prospects" for the definition) as we have targeted with respect to our payment settlement services business and to grow our financial services business in line with our expectations. Even if we grow as targeted, we cannot assure you that our current and planned systems, policies, procedures and controls, personnel and third-party relationships will be adequate to support our future operations. It may become increasingly difficult to manage our growth as our operations continue to grow and become increasingly complex. Our failure to manage growth effectively could seriously harm our business, results of operations, cash flows and financial condition.

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To effectively manage operations and personnel growth, we will need to continue to grow and improve our operational, financial, and management controls and our reporting systems and procedures. We will require the allocation of valuable management resources to expand our systems and infrastructure, particularly in connection with hiring and training engineers and other personnel, without any assurances that our revenue will increase. We also believe our corporate culture has been and will continue to be a valuable component of our success. As we expand our business and mature as a listed company, we may find it difficult to maintain our corporate culture, including our innovative and entrepreneurial spirit. Failure to manage our anticipated growth and organizational changes while preserving our corporate culture could reduce our ability to recruit and retain personnel, innovate, operate effectively, and execute on our business strategy, potentially adversely affecting our business, results of operations, cash flows and financial condition.

***If we fail to attract new users, retain our active users or expand the scope of our relationship with our active users, our business, results of operations, financial condition, cash flows and prospects could be materially and adversely affected.***

Our success depends, in part, on our ability to attract new users to our payment settlement and other financial services, including for our PayPay app as well as our service offerings by PayPay Card Corporation, PayPay Bank Corporation and PayPay Securities Corporation, in order to increase revenue. Our success also depends on our ability to retain our active users. We generate revenue when users use our services, such as when they transact and pay for products and services using our PayPay app. If we are not able to continue to grow our user base and retain our active users, we will not be able to continue to grow our merchant network or our business effectively. The attractiveness of our platform and services to users depends upon, among other things: the number and variety of merchants and the mix of services available through our platform; our brand and reputation; user experience and satisfaction; consumer trust and perception of our solutions, including with respect to privacy and security; consumer trust and perception of payment applications and other financial products, including credit cards, loans and securities accounts; technological innovation; the rate of return to our users with respect to PayPay Points; and products and services offered by competitors. Our marketing efforts currently include digital and print marketing and the extensive use of promotional discounts and offers to our merchants and users. In order to increase revenue, we have aggressively used financial incentives to encourage customers to use our services. While our marketing and promotion expenses as a percentage of our revenue have been decreasing, decreases in the incentives we offer could negatively impact the use of our services by customers and result in a decrease in revenue. In that event, we may need to introduce new incentives or other marketing initiatives, and our marketing initiatives may become increasingly expensive and generating a meaningful return on these initiatives may become difficult. Some of our affiliated companies, our merchants and government entities also grant PayPay Points as incentives to increase sales of their own products and services or to promote cashless payment, and as a result, the majority of the costs of PayPay Point incentives are borne by third parties (principally affiliated companies but also our merchants and local governmental agencies in Japan). If in the future such third parties decrease their use of PayPay Points as consumer incentives, our user acquisition and retention could be adversely affected. See "—We may not be able to maintain and strengthen the ecosystem effects of our platform, which could have a material adverse effect on our business, financial condition, cash flows, results of operations and prospects." for a further discussion on the network effects and risks related to collaborations with our affiliated companies. With respect to our PayPay app, because we already have acquired a user base of approximately 73 million registered users as of March 31, 2026, we may not be able to continue increasing our number of users at the same rate as previously, which may also contribute to difficulty in generating a meaningful return on new marketing initiatives. If we do not continue to attract new users to our platform or services or are unable to retain our active users, our business, results of operations, financial condition, cash flows and prospects could be materially and adversely affected. As we continue to grow our business, we expect the rate at which we increase the number of new users to decrease as we shift our focus to our active users.

Our future growth also largely depends on our ability to generate increased usage across all of our services and higher transaction volume from our active users. If we are unable to successfully implement our latest initiatives to increase the value of transaction volume utilizing our services by existing users, including incentivizing PayPay Card holders to use their cards as their primary credit card and growing PayPay Bank deposit accounts and PayPay Securities investment accounts, our revenue growth may be adversely affected. From September 2023, we started to charge an additional fee to users that load their PayPay Balance through the SoftBank/Y! Mobile mobile carrier billing service twice or more per month. For example, we may receive negative user reviews as a result of our recently announced changes to our PayPay Points reward program, which will narrow some of the ways users will be able to earn PayPay Points from June 2026, and this could have an overall negative impact on user confidence and trust in our products and services. As a result of such changes and similar changes in the future, we may lose a certain percentage of our existing users that are inconvenienced by these changes in our services and our fee structure. Furthermore, other external factors, such as rising interest rates and as a result users electing to keep their funds in deposit accounts with other financial institutions which pay interest instead of deposited with us as PayPay Money may negatively affect our ability to increase our transaction volume.

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Our ability to retain and grow our user base depends on the willingness of users to continue using our platform and services. If we fail to retain our relationships with existing users or if we do not continually expand transaction volumes from users on our platform or services, our business, results of operations, financial condition, cash flows and prospects would be materially and adversely affected.

***If we are unable to attract new merchants to utilize our services, grow our relationships with our existing merchants, and increase transaction volumes across our payment settlement services, our business, results of operations, financial condition, cash flows and prospects could be materially and adversely affected.***

Our growth in payment settlement services substantially depends on our ability to acquire new merchants, maintain and grow our relationships with existing merchants and increase the volume of transactions processed using our services. We rely on the continuing growth of our merchant relationships and our distribution channels in order to expand our GMV and our operations. Additionally, having a diversified mix of merchants is important to mitigate risk associated with changing consumer spending behavior, economic conditions and other factors that may affect a particular type of merchant or industry. We derive revenue for our payment settlement business primarily from the fees earned from merchants for our payment settlement services. If we are not able to attract new merchants and retain existing merchants or increase transaction volumes of our payment settlement services, our payment platform may struggle to gain wider acceptance among new merchants, which in turn may impede our ability to grow our revenue. The attractiveness of our payment settlement services to merchants and their willingness to partner with us depend upon, among other things: the variety and quality of service offerings; payment options offered to users; the degree of consumer penetration; the strength of our brand and reputation; the amount of fees that we charge; our ability to sustain our value proposition to merchants for consumer acquisition by demonstrating higher conversion at checkout; the attractiveness to merchants of our technology and data-driven platform; and our competitors' offerings. Because our PayPay app is mostly used to purchase everyday items that are relatively low in price per transaction, it is critical that we continue to increase the volume of transactions processed with our services, including by leveraging revolving and installment payments provided by PayPay Card Corporation, in order to achieve our targeted GMV. In recent years, because the amount of online payments by consumers has increased as a result of the growth of e-commerce, we intend to focus in particular on increasing the volume of online transactions processed with our services. However, there is no guarantee that we will increase the volume of online transactions in the manner that we anticipate. In addition, if the average price per transaction and the frequency of transactions per user do not increase in line with our expectations, we also may not be able to achieve our targeted GMV.

Moreover, we may experience attrition of our merchant relationships due to several factors, some of which are outside our control, including business closures, bankruptcy, financial distress, transfers of merchants' accounts to our competitors, cancellations and account closures that we initiate due to heightened credit risks relating to contract breaches by merchants or a reduction in sales, which could have a material adverse effect on our business, financial condition, cash flows and results of operations. In addition, our results of operations and growth to date have been partially driven by the growth of our merchants' own businesses and the resulting growth in GMV. Should the rate of growth of our merchants' businesses slow or decline, this could have an adverse effect on transaction volumes and therefore an adverse effect on our financial condition, cash flows and results of operations.

Further, we acquire merchants both directly as well as through third-party agencies. Our contracts with merchants typically have a term of one year with automatic renewal, and the terms of such contracts allow these merchants to terminate the contracts without cause by giving notice as per the terms of the agreement. In addition, our contracts with merchants that sign up with us through third-party agencies are terminated if our agreement with the third-party agency is terminated. We have no guarantee of income under these agreements or minimum requirements for the use of our services. Merchants may seek price reductions when expanding or changing their products and services with us and/or when the merchants' businesses experience significant volume changes. In addition, because introduction costs of other payment settlement services are relatively low, and our contracts with merchants are non-exclusive, our merchants often have arrangements with multiple payment service providers, primarily in order to mitigate certain risks, such as downtime, delayed response time or default by a payment service provider, as well as to maximize conversion by offering a complete array of payment methods available. Therefore, these merchants could shift business away from us at any given time without necessarily terminating their contracts with us. If our contracts with our merchants are terminated or if these merchants shift business away from us, or if we are unsuccessful in achieving high renewal rates and favorable contract terms, our business, financial condition, cash flows and results of operations could be materially and adversely affected. In particular, our larger merchants, such as convenience store chains and major drug store chains, may develop and prioritize the use of their own payment services, or may terminate their contracts with us and exclusively use their own payment services, in the future, which could materially and adversely affect our results of operations. With respect to our contracts with merchants of our credit card merchant acquiring business, the term is typically one year with automatic renewal for an additional year, unless terminated. If we are unable to maintain high renewal rates as well as favorable terms for these contracts, our business, financial condition, cash flows and results could also be materially and adversely affected.

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If we fail to retain any of our larger merchants or a substantial number of our smaller merchants, if we do not acquire new merchants, if we do not increase transaction volumes on our platform, if merchants do not adopt payment settlement services we offer or if we do not attract and retain a diverse mix of merchants, our business, results of operations, financial condition, cash flows and prospects would be materially and adversely affected.

***We may face challenges in maintaining and expanding synergies between our code-based payment settlement services and our credit card payment services.***

As part of our efforts to increase the volume of transactions of our payment settlement services and grow our business overall, we acquired PayPay Card Corporation, including the credit card merchant acquiring business of Yahoo Japan, from Yahoo Japan Corporation (currently LY Corporation) in October 2022. PayPay Card Corporation was primarily focused on offering credit cards to users of Yahoo Japan's shopping platforms. We aim to continue expanding the synergies between our PayPay app payment settlement services and our credit card payment services. For example, upon successful completion of the application process, a virtual PayPay Card is made available to users directly on the PayPay app to give users the option of selecting credit card-based payment, and this has led to an increase in the use of our credit card payment services by PayPay app users. We expect our expanding PayPay app user base will enable us to continue increasing the number of users of PayPay Card. However, we may not be able to continue to maintain and expand these synergies or to expand our credit card business in line with our expectations or at all.

A significant portion of our targeted revenue growth is dependent on increasing consumer and business spending on credit cards issued by PayPay Card Corporation and growing the amount of revolving credit, installment sales, credit balances and cash advances. We have invested in a number of related growth initiatives, including to attract new card members, retain existing card members and capture a greater share of customers' total spending and borrowings. In order to fully execute such initiatives, for a period of time, we significantly increased the number of PayPay Card Corporation's employees. In addition, we changed our credit card approval criteria in order to increase the approval rate, and as a result, our current credit card approval rate for new applicants for PayPay Card has increased to over 80%. However, this increase in our credit approval rate could result in us extending credit to users with greater credit risk, and may increase our exposure to credit risk as well as increase the delinquency rates of our credit card receivables, which could materially and adversely affect our business, results of operations, cash flows and financial condition.

Despite our investments in growth initiatives, including the adoption of generative AI to increase our operational efficiency, there can be no assurance that our investments towards growing our credit card business will continue to be effective or that we will be able to achieve the targeted increase in Total GMV of our payment settlement services as a result of expanding our credit card business. In addition, if we develop new credit card products or offers that attract customers looking for short-term incentives rather than incentivize long-term loyalty, card member attrition and costs could increase. Further expanding our service offerings, maintaining cost synergies across all of our services, adding user acquisition channels and forming new partnerships or renewing current partnerships could increase in cost in the future, adversely impact our average discount rate or dilute our brand, any of which could have a material adverse effect on our results of business, results of operations, cash flows and financial condition.

***Our ability to continue to successfully operate and grow PayPay Credit is subject to several risks.***

PayPay Credit, our payment service integrated in our PayPay app, allows users to pay for goods and services at participating merchants by using credit extended through PayPay Card Corporation. Users of the PayPay app who have applied for and have been approved for PayPay Card can then access PayPay Credit directly in the PayPay app as one of their payment options. PayPay Credit users can opt to pay for their purchases made during a given month in a lump sum in the following month for no additional fee or can pay for their purchases on a revolving basis, in which case interest is charged to the user in the same manner as with other credit card balances. GMV of PayPay Credit accounted for 24.0% of our Total GMV for the year ended March 31, 2026, and we aim to increase the proportion of GMV generated with PayPay Credit as part of our growth initiatives to expand our credit portfolio and increase interest income. However, there can be no assurance that we will be able to continue to grow PayPay Credit and increase its contribution to total revenue in the long term.

Our ability to continue to successfully operate and grow PayPay Credit is subject to our exposure to credit risk, as described below in "—We are exposed to credit risk and the ability of various counterparties to pay us, which could have a material adverse effect on our results of operations, cash flows and financial condition" as well as the following risks:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•*Integration with the PayPay app*. Because PayPay Credit is integrated in our PayPay app, any issues with our PayPay app could prevent PayPay app users from using PayPay Credit, which would negatively affect our results of operations and could damage our reputation. A decrease in the number of users of our

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PayPay app, whether due to issues or concerns in the app itself or as a result of changes in user preferences, could also negatively impact our PayPay Credit user base and our results of operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•*Competition.* Our PayPay Credit payment service competes against credit card companies as well as providers of "buy-now-pay-later" services in Japan, and such competitors may offer more convenient or attractive services to their customers, including lower interest rates, longer installment payment periods or longer payment deferral periods. Intense competition could prevent us from attracting new users of PayPay Card, which is a condition to access PayPay Credit, which could have a direct impact on our ability to grow our PayPay Credit user base. See "—We participate in markets that are competitive with continuously evolving technology and consumer needs, and if we do not compete effectively with established companies and new market entrants, our business, results of operations, cash flows and financial condition could be materially and adversely affected."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•*Regulatory compliance risk.* In offering our PayPay Credit service, we must operate in compliance with applicable regulatory restrictions related to permissible interest rates and other terms relating to the extension of consumer credit. Ensuring compliance with such laws and regulations can be time consuming and costly. See "—Risks Related to Laws, Regulations and Compliance—Failure to comply with the existing laws and regulations applicable to our business could subject us, or our subsidiaries or our associates, as applicable, to enforcement actions and penalties and otherwise harm our business, as well as divert our management's attention and resources and result in increased costs."

***We may not be able to realize the anticipated benefits, synergies and efficiencies from the integration of PayPay Bank Corporation and PayPay Securities Corporation.***

The integration of PayPay Bank Corporation and PayPay Securities Corporation into our business is an integral part of our strategy to generate sustainable growth and expand our ability to deliver comprehensive financial services to our users. To that end, we aim to realize benefits, synergies and efficiencies related to, among other things, increases in cross-selling opportunities among our payment and financial services, increases in total revenue, increased user acquisition, the integration of the financial services offered by PayPay Bank Corporation and PayPay Securities Corporation directly in our app, and lower customer acquisition costs. However, there can be no assurance that we will be able to realize the benefits, synergies and efficiencies that we anticipate. Specifically, the expected benefits, synergies and efficiencies resulting from the integration of PayPay Bank Corporation and PayPay Securities Corporation are subject to, among other things, the following uncertainties:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•a gap between the needs of the users of our payment settlement services and the financial services offered by PayPay Bank Corporation and PayPay Securities Corporation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•our inability to market our financial services effectively to our payment services user base in order to grow our financial services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•issues with any of our payment or financial services, whether caused by us or third parties, which could adversely affect our users, negatively impact our reputation and discourage our users from using our other services, thereby diminishing cross-selling opportunities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•a lack of competitiveness of the services that we offer through our app, which could hinder cross-selling among our services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•our failure to or any difficulty in effectively promoting the adoption of our eKYC passport in order to drive user acquisition;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•our inability to fully leverage our proprietary data-driven credit model, which could hinder our ability to assess borrower risk in line with our expectations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•uncertainties regarding the growth of internet banking and securities brokerage services in Japan, which could negatively impact our ability to grow our financial services; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•our inability to effectively reduce customer acquisition costs, which could in turn negatively impact our profitability.

Our failure to successfully realize the anticipated benefits, synergies and efficiencies as expected or at all could have a material adverse effect on our future business and results of operations.

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***We may not be able to maintain and strengthen the ecosystem effects of our platform, which could have a material adverse effect on our business, financial condition, cash flows, results of operations and prospects.***

Our users and merchants interact with each other in our ecosystem to create very strong network effects, which drives our further growth. Our collaboration with LY Corporation, with respect to the LINE app as well as Yahoo! Japan's e-commerce platform, and other affiliated companies, such as SoftBank Corp., to extend PayPay Points to their user bases strengthens these effects. There can be no guarantee that these companies will maintain the same level of promotion and collaboration in the future. The extent to which we are able to maintain and strengthen these network effects depends on our ability to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•maintain a high level of engagement and activity of users and merchants on our platform;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•improve the quality of our consumer insights;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•consistently innovate and improve the services offered on our platform;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•increase the effectiveness of features enabling businesses and partners to engage with users on our platform, including by enabling merchants to offer coupons and incentives in the form of PayPay Points; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•provide users more opportunities to receive and use PayPay Points.

In addition, changes that we implement on our platform to improve the user and merchant experience may not have the intended effect, which could adversely impact certain groups of users or merchants. To the extent we are not able to address the needs and demands of any particular participant group, those participants may spend less time and resources on our platform and may conduct fewer transactions or use alternative platforms, any of which could have a material adverse effect on our business, financial condition, cash flows, results of operations and prospects. Changes in the level of our collaboration and cross-promotion with LY Corporation or other affiliated companies could also significantly affect user activity on our platform. See "—Risks Related to SoftBank Group Corp. and SoftBank Group Companies—We collaborate with SoftBank Group companies in the provision of our services. Any failure by such companies to continue to support our services, or a material change in our relationship with such companies, could adversely impact our services and could impact our overall business, financial condition, cash flows and results of operations."

***There is no assurance that our alliances with the shareholders of our consolidated subsidiaries and equity-method affiliates will be successful.***

We currently have alliances with the shareholders of PayPay Bank Corporation and PayPay Securities Corporation, which are both consolidated subsidiaries of ours, and the shareholders of PayPay SC Corporation, which is an equity-method affiliate of ours. Specifically, we currently hold 75.5% of the common shares of PayPay Bank Corporation, while Sumitomo Mitsui Banking Corporation, Fujitsu Ltd., Taiju Life Insurance Company Limited and Sumitomo Life Insurance Company hold 21.5%, 2.4%, 0.2% and 0.2% of the common shares, respectively. Similarly, we currently hold 75.2% of the common shares of PayPay Securities Corporation, while Mizuho Securities Co., Ltd. holds 24.8% of the common shares. In addition, we hold 34% of the common shares of PayPay SC Corporation, while SB Payment Service Corporation and SB C&S Corp. hold 33% and 33% of the common shares, respectively. PayPay SC Corporation is a joint venture that was established in 2024 to further expand the use of PayCAS, a unified cashless payment terminal with POS integration functionalities.

The success of our alliances depends on our ability to cooperate strategically with the other shareholders of PayPay Bank Corporation, PayPay Securities Corporation and PayPay SC Corporation. However, we may encounter difficulties in managing relationships with such shareholders. For example, they may have economic or business interests or goals that are inconsistent with ours; take actions contrary to our instructions, requests, policies or objectives; be unable or unwilling to fulfill their obligations; have financial difficulties; or have disputes with us as to their rights, responsibilities and obligations. In addition, because the other shareholders of PayPay Bank Corporation and PayPay Securities Corporation include major traditional financial institutions, they may be unable or unwilling to make decisions regarding our alliances quickly and efficiently. Any of these factors may have a material adverse effect on the performance of PayPay Bank Corporation or PayPay Securities Corporation. If relationships deteriorate to a level that is beyond repair, the affected alliance may need to be terminated or there may be a change in shareholding of the affected entity.

In addition, because PayPay Bank Corporation, PayPay Securities Corporation and PayPay SC Corporation are currently not wholly owned subsidiaries of ours, we may decide in the future to acquire additional shares of PayPay Bank Corporation, PayPay Securities Corporation or PayPay SC Corporation to make them wholly owned subsidiaries of ours. With respect to PayPay SC Corporation, we may first decide to acquire additional shares to make PayPay SC Corporation a consolidated subsidiary of ours, resulting in a business combination under common control, which may

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require retrospective consolidation, in which case we may need to restate our financial statements for prior periods. We may not be successful in completing such transactions to acquire additional shares of PayPay Bank Corporation, PayPay Securities Corporation and PayPay SC Corporation if negotiations with the other shareholders do not prove to be successful. In addition, such potential acquisitions with respect to PayPay Bank Corporation and PayPay Securities Corporation may be subject to strict scrutiny by regulators, which may make the acquisitions costly and time consuming.

***If the cashless payments industry and the digital financial services industry in Japan do not continue to expand and develop as we expect, our business, financial condition and results of operations could be adversely affected.***

Because we operate primarily in the cashless payments industry, the expansion of this industry, in terms of numbers of users using our services and numbers of and relationships with our merchants and other business partners, and the continued adoption of cashless payments by consumers and merchants are essential to our growth strategy and our ability to increase our revenue and expand our operations. Our business, financial condition and results of operations could be materially and adversely affected if the growth of the cashless payments industry in Japan does not continue in line with our expectations. In particular, the cashless payments industry may not expand or develop as we expect due to factors specific to Japan, including potentially higher resistance to the adoption of cashless payments by individual users or merchants in Japan as compared to other markets. Although the Japanese government and Japanese local governments have encouraged the use of cashless payments by both consumers and merchants and are promoting ways to further increase the adoption of cashless payments in order to promote a cashless society, some of the more significant measures implemented to promote the use of cashless payments such as MyNaPoint (a point redemption incentive to encourage the use of MyNumber social security cards—a government-issued social security card that can be used as, among other things, a health insurance card and for online income tax return filing, etc.—in Japan) have been discontinued, and Japanese users of cashless payments have generally had security concerns with respect to the adoption of such services and continue to rely on cash for a significant proportion of day-to-day transactions. As a result, Japan has a lower rate of adoption of cashless payment services as compared to other developed economies, such as South Korea, China, the United States or some countries in Europe, and there can be no guarantee that the use of cashless payment services in Japan will grow to the same extent as that seen in other advanced economies.

The termination of subsidies to promote cashless settlement may also result in a slowdown of the growth of the cashless payment industry in Japan. In addition, initiatives by the Japanese government and Japanese local governments to promote the use of cashless payments may also not result in or continue to result in the anticipated benefits. For example, the introduction of the payment of employees' wages by employers with cashless settlement may not become widely accepted. Furthermore, since April 2023, the Bank of Japan has been proceeding with a pilot program for the "digital yen," and if in the future the Bank of Japan decides to issue a central bank digital currency, this may significantly impact the cashless payments industry in Japan and force us to make significant changes to our business model. The Bank of Japan has already taken preliminary steps in considering the issuance of a central bank digital currency by establishing the Central Bank Digital Currency Forum in July 2023, which consists of 60 entities from various industries, including the banking, payment services and fintech industries. The forum held its fifth general meeting in January 2026 and continues to work on the development of a pilot program for a central bank digital currency system in Japan.

Moreover, the expansion of the digital financial services industry is also essential to our growth strategy and our ability to increase revenue. Our business, financial condition and results of operations could be adversely affected if the growth of the digital financial services industry as a whole decelerates. In particular, while we believe there is room for further growth in the digital financial services industry in Japan based on the growing number of users of the internet and smartphones generally, the industry may not expand or develop as we expect due to increasing saturation of online services markets or other factors. If growth of the digital financial services industry slows or ceases and we are unable to expand our business as a result, our results of operations and overall growth prospects could be materially and adversely affected.

The development and growth of the Japanese cashless payment industry and digital financial services industry could also be affected by regulations that inhibit the use of such services, growing concerns around information security and privacy issues, especially in relation to personal information, adverse economic trends, increasing competition, development of disruptive or competing technologies, costs incurred by merchants to introduce cashless payment systems or other factors.

***We had a history of losses and we only recently achieved profitability, which we may not be able to maintain, and we may record losses and negative cash flow in the future.***

We achieved profit for the year of ¥39.2 billion for the year ended March 31, 2025 and ¥117.8 billion for the year ended March 31, 2026. However, we had recorded a loss for the year every year since our inception through the

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year ended March 31, 2024. Historically, we invested in significant promotional expenses to expand our merchants and our user base and our business strategy is to continue to maintain a significant scale in terms of GMV, users and merchants and to achieve sustainable profitability through revenue diversification and effective cost management. Maintaining profitability will depend on our ability to continue our positive growth trajectory in terms of merchants, users and GMV while controlling our expenses, such as user acquisition costs. If we are unable to achieve our targeted GMV growth or adequately manage the level of our promotional and other expenses even if we achieve our GMV targets, there is no assurance that we will be able to maintain profitability in the future. Because the market for our payment and financial services is evolving, it is difficult for us to predict our future results of operations or the extent of our market opportunity. We expect our operating expenses to increase as we hire additional personnel, broaden our marketing efforts and promotional activities, expand our operations and infrastructure, continue to enhance our brand, expand our services, and expand and improve our interface. These initiatives may be more costly than we expect and may not succeed in achieving our targeted growth in GMV and revenue. In addition, because we have only recently acquired the shares of PayPay Bank Corporation and PayPay Securities Corporation to make them consolidated subsidiaries of ours, we are actively working on the integration of PayPay Bank Corporation and PayPay Securities Corporation with our existing operations. We have developed new initiatives in connection with the anticipated synergies from the integration of PayPay Bank Corporation and PayPay Securities Corporation, such as cross-selling opportunities, to further grow our business and increase our profitability, but these initiatives may not be successful. If these initiatives are unsuccessful, we may not be able to increase our revenue to exceed our increased operating expenses, which would have a negative impact on our overall profitability. Furthermore, as a listed company, we will incur additional significant legal, accounting and other expenses that we did not incur as an unlisted company. Any failure to increase our revenue sufficiently to keep pace with our initiatives, investments, and other expenses could prevent us from maintaining profitability or positive cash flow on a consistent basis in future periods and could have a material adverse effect on our ability to continue as a going concern. We cannot assure you that we will maintain our profitability and may record losses again in the future.

***Our ability to increase revenue and profitability, particularly for our Payment segment, depends on our pricing strategy and the expansion of our service offerings, both of which we may not be able to implement successfully.***

Our pricing strategy for our payment settlement services constitutes a key component of our business plan to achieve a significant scale to enable us to continue to achieve profitability. Our pricing strategy previously focused on aggressive marketing of our PayPay app in order to acquire new merchants by reducing or eliminating payment settlement fees that the merchants would normally remit to us during initial promotional periods. We allowed small- and medium-sized merchants to utilize our PayPay app payment settlement services without having to pay us any payment settlement fees until October 2021. Since then, we have started to collect payment settlement fees from all participating merchants, although we sometimes offer reduced fees to newly joining large merchants that are strategically important for our business through negotiations on a case-by-case basis, and this pricing strategy results in lower revenue than what we would recognize if we collected payment settlement fees without such reduction in fees from all newly joining merchants. Because we no longer offer the type of incentives we previously offered, higher payment settlement fees or lack of or reduced incentives upon becoming a new PayPay merchant could also negatively impact our ability to acquire new merchants, which may decide to opt for the cashless payment services of our competitors if they offer more incentives, lower payment settlement fees or are otherwise more broadly used by consumers. Some competitors, in particular those providing code-based payment settlement services similar to ours as well as those providing other forms of cashless payment services, may be able to offer lower prices to merchants for similar services by cross-subsidizing their payment services through other services they offer. Such competition may result in the need for us to alter the pricing we offer to our merchants and could reduce our potential revenue. In addition, as we grow, merchants may demand more customized and favorable pricing from us. Our competitors are continuously investing to innovate, grow their businesses and enhance consumer reach and engagement, and may outperform us in any of these areas. Increased investments made, lower prices or innovative services offered by our competitors, as well as the low barriers to entry prevailing in our industry, may require us to divert significant managerial, financial and human resources in order to remain competitive, and ultimately may reduce our market share and materially and adversely impact our revenue growth, profitability, cash flows and financial condition.

We derive a majority of total revenue from our payment settlement services in our Payment segment. For the year ended March 31, 2026, revenue from payment settlement services in the Payment segment accounted for 61.5% of total revenue of our Payment segment. Our efforts to expand our sources of revenue depend on, among other things, our ability to broaden the scope of the services we offer, develop new technologies, enhance the functionality of our services and respond to the needs of our merchants and users. One element of our business strategy is to target revenue growth from the provision of additional services to our merchants and from the provision of additional financial services to our users. In particular, we have expanded the financial services we offer to our users through PayPay Bank Corporation and PayPay Securities Corporation. We aim to grow our revenue by offering convenient services to our users, such as PayPay Debit, which allows accountholders to make payments with merchants that accept PayPay code-based payments directly from their PayPay Bank deposit accounts. We also aim to grow the balance of deposit accounts for PayPay Bank Corporation by offering competitive interest rates to our users as well as the balance of

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investments that PayPay app users hold with various offerings through PayPay Securities Corporation, but there can be no assurance that we will be able to successfully implement such initiatives. In addition, such expansion of our financial services will increase our operating costs, which may negatively impact our profitability.

New services we introduce may be subject to technological challenges, including a shortage of engineers to build them, or regulatory requirements that are different from those for our existing businesses and with which we have limited or no experience. If we are unable to respond to those challenges or meet those requirements or we experience service disruptions, failures, or other issues, our business may be materially and adversely affected. Our failure to broaden the scope of our services that are attractive may inhibit the growth of our business, as well as increase the vulnerability of our core payments business to competitors.

***We participate in markets that are competitive with continuously evolving technology and consumer needs, and if we do not compete effectively with established companies and new market entrants, our business, results of operations, cash flows and financial condition could be materially and adversely affected.***

We face significant competition from companies that operate in the cashless payments industry and digital financial services industry. As the number of internet and smartphone users increases, many companies are moving into internet-related services across a wide spectrum of product categories and service formats.

*Payment Segment*

Our code-based PayPay app had a user base of approximately 73 million registered users as of March 31, 2026 but we face intense competition from other code-based payment settlement services as well as other forms of cashless payments, including credit cards, "buy-now-pay-later" services and e-money services of major transportation companies and retailers. We believe the principal competitive factors in our markets include industry expertise, platform scale and service features and functionality, ability to build new technology and keep pace with innovation, scalability, extensibility, service pricing, security and reliability, brand recognition, agility and speed to market. We compete in markets characterized by vigorous competition, rapidly changing and disruptive technology, changing merchant and consumer needs, evolving industry standards and frequent introductions of new services. We strive to use our technical expertise in developing a high-quality user interface and user experience, or UI/UX, to remain competitive and expand our business. We expect competition to remain intense as existing and new market entrants seek to enhance their cashless payment services to take advantage of increasing penetration of such services in the Japanese economy. Within our industry, there are low barriers to entry and the cost of switching between offerings is low. Users may have a propensity to shift to the provider offering the largest incentives, including those engaged in aggressive promotional campaigns, or services with the best UI/UX and commonly use more than one payment service. We compete with domestic and international companies and some of these companies may have greater financial resources and broader business lines than we do, which may provide them with competitive advantages. These companies may devote greater resources to the development, promotion, and sale of services, and they may offer lower prices or more effectively introduce their own innovative services that adversely impact our growth. In addition, if major traditional financial institutions decide to pool their resources to develop a new technology that is more convenient than our code-based payment app and renders the services we offer obsolete, our business may suffer irreparable harm. Further, as we and our competitors introduce new offerings and as existing offerings evolve, we expect to become subject to additional competition. In addition, our current market position could change drastically if a new market entrant or any existing competitor were to introduce a new and attractive service incorporating more advanced technologies, such as biometric authentication or AI, that gains widespread acceptance. Increased competition could result in, among other things, a reduction of the revenue we generate from the use of our services, the number of participants on our platform or the frequency of use of our platform. Certain merchants have longstanding exclusive, or nearly exclusive, relationships with our competitors to accept payment cards and other services that we offer. These relationships may make it difficult or cost-prohibitive for us to conduct material amounts of business with them. On the other hand, our merchant agreements are non-exclusive, therefore allowing merchants to move to similar services offered by our competitors. Competing services tied to established brands may engender greater confidence in the safety and efficacy of their services. If we are unable to differentiate ourselves from and successfully compete with our competitors, our business, results of operations, cash flows and financial condition could be materially and adversely affected.

A major part of our business strategy is to grow the market share, GMV and Take Rate of our credit card business through PayPay Card Corporation, including through growth in use of PayPay Credit, but we face significant competition in Japan's credit card services market, including from competitors with a larger existing market share. Our competitors in the credit card services market are well-established and have strong existing customer bases and there is no assurance that we will be able to increase our market share and achieve our targeted synergies between our PayPay app payment settlement services and our credit card payment services to increase the number of PayPay Card holders and Total GMV of our credit card business. See "—We may face challenges in maintaining and expanding synergies between our code-based payment settlement services and our credit card payment services." Some of our

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competitors may be able to offer lower prices to merchants for similar services by cross-subsidizing their payment services through other services they offer, and such competitors may be engaged in a broader range of businesses than we are.

*Financial Service Segment*

Our internet banking business that we operate through PayPay Bank Corporation faces significant competition from other internet banking providers as well as from traditional Japanese banking institutions, including commercial banks and regional banks, that have expanded their internet banking services and broadened their retail asset management and retail lending services. Our competitors include Rakuten Bank, Ltd., SBI Sumishin Net Bank, Ltd., Sony Bank, Inc. and au Jibun Bank Corporation. These competitors may provide loans or other products with more attractive terms than we do, such as lower interest rates, or offer a more comprehensive range of banking products than we offer and may have stronger brand recognition, larger customer bases, greater financial resources, more effective online or physical networks and more developed marketing, asset management and risk management capabilities relative to us.

Our online securities intermediary business that we operate through PayPay Securities Corporation faces direct competition from several other online securities firms as well as from full-service securities firms in Japan, many of which are cooperating closely with their affiliated commercial banks. We consider our primary competitors to include other online securities firms in Japan, such as Rakuten Securities, Inc., SBI Securities Co., Ltd., Matsui Securities Co., Ltd., Monex, Inc. and Mitsubishi UFJ eSmart Securities Co., Ltd. The full-service securities firms that we compete with include Nomura Securities Co., Ltd., Daiwa Securities Co. Ltd. and SMBC Nikko Securities Inc. In order to maintain and expand our user base, we must compete with other securities firms on factors such as commission rates, fees, UI/UX and the strength and attractiveness of our lineup of products and services. These competitors may provide a more comprehensive range of services and may be able to offer more competitive products, such as products with lower brokerage commissions, than we are able to provide.

In addition, while we believe that our ecosystem provides tangible benefits to our financial services customers, certain of our banking and securities firm competitors are part of corporate groups that provide similarly attractive membership and loyalty programs including point programs, including Rakuten Group, Aeon Group and NTT Docomo Group, and competition based on the attractiveness of such ecosystems is fierce.

***Our business depends on a strong and trusted brand, and any failure to maintain, protect, and enhance our brand, or any unfavorable media coverage, could materially and adversely affect our reputation, business, financial condition, results of operations, cash flows and prospects.***

We have developed a prominent brand that has contributed significantly to the success of our business. We enable participants in commercial and financial activities, including users and customers, merchants and financial institution partners to build and strengthen trust among each other. Maintaining, protecting, enhancing and promoting the trust in us, our products and services and our brand is critical to expanding the base of users and customers, merchants and financial institution partners of our products and services, as well as increasing their engagement with our products and services. Any negative publicity about our industry or us, the quality and reliability of our products and services, our risk management processes, changes to products or services, our ability to effectively manage and resolve merchant and user complaints, our privacy and security practices, litigation, regulatory activity, and the experience of merchants and buyers with our products and services, could materially and adversely affect our reputation and the confidence in and use of our products and services. In addition, because the "PayPay" brand is owned by us but used by other SoftBank Group companies pursuant to licenses or sublicenses to promote and market certain product and service offerings, any issues encountered with the provision of such offerings could potentially adversely impact our brand and reputation. For example, PayPay Insurance Service Corporation is a wholly-owned subsidiary of LY Corporation and is not under our direct control. See "—Risks Related to SoftBank Group Corp. and SoftBank Group Companies—We collaborate with SoftBank Group companies in the provision of our services. Any failure by such companies to continue to support our services, or a material change in our relationship with such companies, could adversely impact our services and could impact our overall business, financial condition, cash flows and results of operations."

Many factors could undermine or damage the trust in us, our products and services or our brand, including failure by us or our partners to satisfy expectations of our product or service and quality; inadequate protection of sensitive information; compliance failures and claims; employee misconduct; and misconduct by our partners, service providers, or other counterparties. In addition, with respect to our credit card business (including users of PayPay Credit to whom credit is extended through PayPay Card Corporation as well as credit extended through PayPay Bank Corporation), our credit collection activities could results in reputational damage. Moreover, under the agreements with our merchants, the merchant is responsible for quality, quantity, timely delivery and price of the services offered by it and is further responsible for related customer support and dispute resolution services. However, instances of unsatisfactory services provided by one or more merchants may damage the trust that our users have in our brand and our services. We may receive negative reviews from users and become subject to legal notice and/or action, which may materially and adversely affect our reputation and the confidence in and use of our services. Such reputational

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damage can result even from incidents where we ultimately face no legal liability. If we do not successfully maintain the trust in us, our business, financial condition, results of operations, cash flows and prospects would be materially and adversely affected.

Unfavorable publicity could materially and adversely affect our reputation. Such negative publicity could also harm the size of our network and the engagement and loyalty of merchants, users and other participants that utilize our products and services, which could materially and adversely affect our business, cash flows, financial condition, and results of operations. As our products and services continue to scale and public awareness of our brand increases, any future issues that draw media coverage could have an amplified negative effect on our reputation and brand. In addition, negative publicity related to key brands we have partnered with or by any influencers may damage our reputation, even if the publicity is not directly related to us. For example, there have been news articles published about our PayPay app being used as part of certain fraud schemes. Although these fraudulent activities are completely unrelated to our business, any such negative publicity that we may receive could diminish confidence in, and the use of, our products and services and may result in increased regulation and legislative scrutiny of industry practices as well as increased litigation, which may further increase our costs of doing business and materially and adversely affect our brand. As a result, any impairment or damage to our brand, including as a result of these or other factors, could materially and adversely affect our business, reputation, cash flows, results of operations and financial condition. Many social media platforms publish their subscribers' or participants' content, often without filters on accuracy. The dissemination of inaccurate information regarding our business, brand and services online could materially and adversely affect our business, reputation, prospects, financial condition and operating results, regardless of the information's accuracy. The damage may be immediate without affording us an opportunity for redress or correction.

***We depend on key management, as well as our experienced and capable employees, and any failure to attract, motivate, and retain our employees could harm our ability to maintain and grow our business.***

Our future success is significantly dependent upon the continued service of our executives and other key employees. If we lose the services of any member of management or any key personnel, we may not be able to locate a suitable or qualified replacement, and we may incur additional expenses to recruit and train a replacement, which could severely disrupt our business and growth.

To maintain and grow our business, we will need to identify, hire, develop, motivate, and retain highly skilled employees. Identifying, recruiting, training, integrating, and retaining qualified individuals requires significant time, expense and attention. In addition, from time to time, there may be changes in our management team that may be disruptive to our business. If our management team, including any new hires that we make, fails to work together effectively and to execute our plans and strategies on a timely basis, our business could be harmed. Competition for highly skilled personnel, especially software engineers, is intense. We have established a subsidiary for product development in India, PayPay India Private Limited, in order to recruit talented software engineers, but there can be no assurance this initiative will succeed in securing qualified personnel over the long term. The rate of attrition of our software engineers is higher than that of our other employees, so we may need to invest significant amounts of cash and equity to attract and retain employees, particularly for software engineers, and we may never realize returns on these investments. As part of our efforts to attract and retain highly skilled employees, we have implemented a "Hybrid Style" policy, which in principle offers our employees the flexibility to work from anywhere in Japan. However, this remote work system may subject us to certain risks, including ineffective or inadequate training and supervision, reduced productivity, difficulty in maintaining our corporate culture and data security-related risks, among others. In addition, measures we take to reduce such risks may only be temporarily effective or not effective at all. If we are not able to add and retain employees effectively, our ability to achieve our strategic objectives will be adversely affected, and our business and growth prospects may be materially and adversely affected. Furthermore, compared to prior years, we have started to encourage our employees to return to the office to the extent possible, and this policy change could lead to an increase in our attrition rate if our employees or candidates are not amenable to the shift away from remote work.

One tool we use to attract and retain talented and high-performing employees, including members of our senior management, is the grant of stock options under a trust-type stock option plan, which our shareholders approved in August 2022. In light of the announcement on May 30, 2023 by the National Tax Agency of Japan regarding the tax treatment of stock options under trust-type stock option plans, stock options under such plans are subject to income tax upon the exercise of the options, which may result in a higher tax rate than originally expected, which could adversely affect the effectiveness of our stock option plan as a recruiting and retention tool. In light of such potential adverse effect on trust-type stock option plans, in April 2025, our shareholders approved plans to grant stock options to our directors, corporate officers and employees through tax-qualified stock options and one-yen-exercisable at retirement-type stock options.

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***The "part-time" status of a majority of our directors or their positions in other companies may prevent them from devoting full attention to our company's affairs, which could result in conflicts of interest and hinder our corporate governance.***

The vast majority of our directors serve on a part-time basis, which means that they are not required to be constantly available to work at the company during business hours, are not subject to a duty of exclusive devotion to the company, and are responsible for monitoring the actions of executive directors and officers rather than executing business operations. In addition, the vast majority of our directors maintain significant positions in other companies. Accordingly, they do not devote their full-time attention to our company's operations. This limited commitment could make them unavailable at critical times and may result in delays in making important business decisions. In addition, their involvement in other companies creates the potential for conflicts of interest in allocating time and effort between our company and their other obligations. There can be no assurance that any such conflicts, should they arise, will be resolved in our favor. Part-time directors might also be less able to effectively monitor management and provide oversight compared to full-time executives, which could weaken our governance practices. If our directors cannot dedicate sufficient time and focus to our affairs, our decision-making processes, strategic oversight, and overall business performance could suffer, potentially materially and adversely affecting our results of operations.

***We rely on our suppliers and partners for our hardware, software and cloud services and any impediment in procuring these in a timely manner and at competitive costs, or at all, may have a material adverse effect on our business, operations, financial condition, and cash flows. We could also be subject to monetary and other penalties from payment card networks with respect to high-risk merchants.***

Our ability to remain competitive depends, in part, on our ability to source and maintain a stable and sufficient supply of hardware, software and cloud services at desired prices. Many of our key hardware devices, key software services and cloud services come from a limited number of partners and suppliers located in Japan and overseas. We also rely on SoftBank Group companies in the provision of some of these services, which subjects us to certain risks. See "—Risks Related to SoftBank Group Corp. and SoftBank Group Companies—We collaborate with SoftBank Group companies in the provision of our services. Any failure by such companies to continue to support our services, or a material change in our relationship with such companies, could adversely impact our services and could impact our overall business, financial condition, cash flows and results of operations." For example, we collaborate with SB C&S Corp., a wholly-owned subsidiary of SoftBank Corp. and the supplier of PayCAS, a unified cashless payment terminal with point-of-sale, or POS, integration functionalities, which we began leasing to select merchants in 2022 and made available to all merchants in April 2023. We also outsource the printing and delivery of our credit cards to third parties, and any production or sourcing issues could have an adverse impact on our ability to grow our credit card business. Furthermore, PayPay Bank Corporation utilizes various vendor resources for its core banking and data warehouse systems, informed by our technical support and specialized knowledge. If such vendors unexpectedly increased the prices for their services, this would result in an increase in costs for us and we may not be able to find an alternative vendor that offers comparable services at a lower price, which may have a material adverse effect on our financial condition and cash flows. In the event these partners and suppliers fail to provide hardware, software and services adequately, including as a result of errors in their systems or events beyond their control, or refuse to provide hardware and services on terms acceptable to us or at all, and we are not able to find suitable alternatives, our business may be materially and adversely affected.

In addition, our credit card business is reliant on payment card networks, which establish their own rules and standards that allocate liabilities and responsibilities among the payment networks and their participants. These rules and standards, including the Payment Card Industry Data Security Standard, govern a variety of areas, including how users may use their cards, the security features of cards, security standards for processing, data protection and information security and allocation of liability for certain acts or omissions, including liability in the event of a data breach. The payment card networks could adopt new operating rules or interpret or reinterpret existing rules that we might find difficult or even impossible to follow or costly to implement. These changes may be made for any number of reasons, including as a result of changes in the regulatory environment, to maintain or attract new participants or to serve the strategic initiatives of the networks, and may impose additional costs and expenses on us or be disadvantageous to us. Such changes may impact our ongoing cost of doing business, and we may not, in every circumstance, be able to pass through such costs to our users. If we fail to make such changes or otherwise resolve the issue with the payment card networks, the networks could disqualify us from processing transactions if satisfactory controls are not maintained. If we are unsuccessful in establishing or maintaining mutually beneficial relationships with these payment card networks, banks, and acquiring processors, our business may be materially and adversely affected.

We could be subject to monetary and other penalties from payment card networks if we fail to detect that merchants are engaging in activities that are illegal, contrary to the payment card network operating rules, or considered "high risk." We must either prevent high-risk merchants from using our services or register such merchants with the payment card networks and conduct additional monitoring with respect to such merchants. Penalties could

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be material and could result in termination of our ability to accept payment cards or could require changes in our processes for registering new merchants. This could materially and adversely affect our business.

***Acquisitions, strategic investments and entries into new businesses could disrupt our business, divert our management's attention, result in additional dilution to our shareholders, and materially and adversely affect our financial performance.***

We have completed many acquisitions and strategic investments in the past in order to grow our business and will continue to actively acquire or invest in shares, businesses, apps, or technologies in financial services and other industries that we believe could complement or expand our services, enhance our technical capabilities, or otherwise offer growth opportunities. In the ordinary course of business, we consider a broad range of potential opportunities, which may result in our pursuing significant acquisitions or other strategic transactions, including as a means to expand our business into industries or regions in which we have limited or no prior experience. However, we may be unable to find suitable target candidates or co-investors or may be unable to complete acquisitions on favorable terms, or at all, in the future and thus be unable to achieve our strategic objectives. If we complete such acquisitions, we may not ultimately strengthen our competitive position or achieve our goals, and any acquisitions we complete could be viewed negatively by customers or investors. Moreover, an acquisition, investment or business relationship may result in unforeseen operating difficulties and expenditures, including disrupting our ongoing operations, diverting management from its primary responsibilities, subjecting us to additional liabilities, increasing our expenses and adversely impacting our business, results of operations, cash flows and financial condition. In addition, we may be exposed to unknown liabilities and the anticipated benefits of any acquisition, investment or business relationship may not be realized, if, for example, we fail to successfully integrate such acquisitions, or the technologies associated with such acquisitions, into our company. We also may not achieve the anticipated benefits from the acquired businesses due to a number of factors, including difficulties resulting from the integration of technologies, IT systems, accounting systems, culture or personnel; disagreements with or termination of relationships with co-investors; diversion of management's attention; litigation; use of resources; or other disruption of our operations. Regulatory constraints, particularly competition laws and regulations, may also affect the extent to which we can maximize the value of our acquisitions or investments. Acquisitions could also result in dilutive issuances of equity securities or the incurrence of debt. In general, the more significant a transaction is, including if we acquire shares or businesses of target companies with assets and liabilities that are substantial relative to our own, the more significant such challenges could become, and our results of operations and financial condition could be materially and adversely affected as a result. In addition, if an acquired business fails to meet our expectations, our business may be materially and adversely affected. From time to time, we may also explore potential strategic opportunities outside Japan. For example, we are currently in discussions with Visa Inc. ("Visa") to enter into a business alliance to explore collaboration in Japan and the United States by leveraging our QR code-based payment platform and Visa's global payment network and digital payment technologies. For more details, see "Item 4. Information on the Company—B. Business Overview—Alliances with our Partners." Though basic terms have been agreed upon, there can be no assurance that discussions will progress, that we will enter into any definitive agreements, or that any such collaboration, if pursued, will be implemented on terms favorable to us or at all. The business alliance relates to new strategic business initiatives, and the outcome of any implementation of such initiatives is highly uncertain. In the event such new strategic business initiatives are successful in their initial stages, we may require a sizable initial investment, and the potential expansion of our business abroad could divert our management's attention and resources, which may have a material adverse effect on our business and results of operations. In addition, because our current management's experience is focused in Japan, we may be unable to fully leverage our strengths and the know-how that we have accumulated towards operating a digital finance platform outside of Japan.

On September 16, 2025, we completed the acquisition of 40.0% of the issued and outstanding shares of common stock of Binance Japan Inc., or Binance Japan, through a third-party allotment of new shares. Prior to the acquisition, Binance Japan was a wholly owned subsidiary of Binance (AP) Holdings Limited, an affiliate of Binance, which is the operator of one of the largest cryptocurrency exchanges. Binance Japan operates a cryptocurrency exchange business in Japan based on the global infrastructure offered by Binance group. We may not be able to successfully realize the anticipated strategic benefits from the acquisition, including integrating Binance Japan's business into our ecosystem, and developing compliant crypto-related services in Japan. In addition, the high volatility and uncertainty of cryptocurrencies could result in losses in this business. Moreover, Binance, as a group, has been the subject of various legal and regulatory actions in multiple jurisdictions, including criminal proceedings involving its founder in the United States and fines imposed by U.S. and other regulators. Although the criminal case against the founder in the United States has ended due to the issuance of a pardon, such actions and proceedings may negatively affect us or subject us to increased regulatory attention, all of which could have an adverse impact on our results of operations. Furthermore, because our investment in Binance Japan currently represents a minority interest, we have limited control or influence over Binance Japan's operations, governance and compliance practices. Pursuant to the terms of the definitive agreement that we entered into with Binance Japan and Binance (AP) Holdings Limited, Binance Japan and Binance (AP) Holdings Limited are obligated to discuss with us in good faith for our acquisition of additional shares of common stock of Binance Japan, following which Binance Japan could become a consolidated subsidiary of ours,

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which would be subject to prior consultation with the FSA. There is no guarantee that we will acquire any additional shares of Binance Japan or that Binance Japan and Binance (AP) Holdings Limited would agree to such acquisition. As a result, our ability to monitor and influence Binance Japan's operations and protect our interests may be limited, and this could negatively affect the value of our investment and our results of operations.

***We may not be able to obtain financing on favorable terms or at all to support our operations and satisfy our cash requirements.***

We may require additional cash resources due to future growth and development of our business, including growth in our extension of credit to users through PayPay Card Corporation and PayPay Bank Corporation, or any investments or acquisitions we may decide to pursue. For example, by extending additional credit to credit cardholders of PayPay Card Corporation and users of PayPay Credit, our outflow of cash to merchants increases, which occurs before collecting those amounts from our users, which may result in us needing additional cash resources to cover such additional outflow of cash to merchants. If our cash resources are insufficient to satisfy our cash requirements, we may seek to issue additional equity or debt securities or obtain new or expanded credit facilities. With respect to PayPay Card Corporation, we consider the liquidation or securitization of receivables, the issuance of commercial paper, overdraft protection loans and short-term and long-term borrowings to supplement operating cash. With respect to PayPay Bank Corporation, we consider the issuance of corporate bonds and call money if deposits do not sufficiently cover its operating cash requirements.

Our ability to obtain external financing in the future is subject to a variety of uncertainties. Incurring indebtedness would subject us to increased debt service obligations and could result in operating and financial covenants that would restrict our operations. Our ability to access international and domestic capital and lending markets may be restricted at a time when we would like, or need, to do so, especially during times of increased volatility and reduced liquidity in global financial and equity markets, including due to policy changes and regulatory restrictions, or other financial market turmoil, which could limit our ability to raise funds. Our access to external financing may also be affected by developments with respect to affiliated companies. There can be no assurance that financing, including through an equity offering, will be available in a timely manner or in amounts or on terms acceptable to us, or at all. Any failure to raise needed funds on terms favorable to us, or at all, may impact our liquidity as well as have a material adverse effect on our business, cash flows, financial condition and results of operations. In addition, a portion of our borrowings has been and may be subject to market interest rates. If market interest rates increase, the applicable interest rate on our floating interest rate debt will increase, resulting in an increase in our interest expenses. On the other hand, when market interest rates increase, our interest income in connection with certain of PayPay Bank Corporation's assets could increase, which could partially offset increases in our interest expenses. However, because we are aiming to increase the amount of credit extended and revolving payments with PayPay Card Corporation as well as increase deposit balances and loans balances at PayPay Bank Corporation, our exposure to the volatility of interest rates may increase in the future. We maintain an appropriate balance between our floating interest rate debt and fixed interest rate debt, but market interest rates could fluctuate beyond the rates we anticipate. We also access liquidity, including securitization, backed by our credit card receivables, which also subjects us to interest rate risk. Furthermore, some of our borrowings are from SoftBank Group companies and external financing with similar terms in a timely manner may not be available to us. Developments with respect to other SoftBank Group companies could also affect the availability of financing to us from sources which monitor their exposure to SoftBank Group companies in the aggregate. See "Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions" for a discussion of our borrowings from SoftBank Group companies.

***Our indebtedness could limit the cash flow available for our operations and expose us to risks that could adversely affect our business, operating results, and financial condition.***

As of March 31, 2026, borrowings in our consolidated statement of financial position were ¥564,956 million (including ¥353,825 million of borrowings in the Payment segment mainly related to PayPay Card Corporation's credit card business operations). We may also incur additional indebtedness to meet future financing needs. Our indebtedness could have significant negative consequences for our shareholders and our business, operating results, and financial condition by, among other things: (i) increasing our vulnerability to adverse economic and industry conditions; (ii) limiting our ability to obtain additional financing; (iii) requiring the dedication of a substantial portion of our cash flow from operations to service our indebtedness, which will reduce the amount of cash available for other purposes; (iv) limiting our flexibility to plan for, or react to, changes in our business; and (v) placing us at a possible competitive disadvantage with competitors that are less leveraged than we are or have better access to capital.

Our business may not generate sufficient funds, and we may otherwise be unable to maintain sufficient cash reserves, to pay amounts due under our indebtedness, and our cash needs may increase in the future. In addition, future indebtedness that we may incur may contain financial and other restrictive covenants that limit our ability to operate our business, raise capital, or make payments under our other indebtedness. If we fail to comply with these covenants

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or to make payments under our indebtedness when due, we would be in default under that indebtedness, which could, in turn, result in that indebtedness and our other indebtedness becoming immediately payable in full.

***We may have to recognize impairment losses on our long-lived assets and goodwill or reverse deferred tax assets, which could materially and adversely affect our results of operations and financial condition.***

As of March 31, 2026, we had ¥66,466 million in intangible assets (including ¥58,718 million in software and ¥5,804 million in software in progress), ¥17,194 million in customer incentives, ¥12,077 million in incremental costs of obtaining a contract and ¥15,157 million in goodwill, representing 1.3%, 0.3%, 0.2% and 0.3%, respectively, of our total assets. Whenever events or changes in circumstances indicate that the carrying value of a particular long-lived asset, a group of long-lived assets and/or goodwill may not be recoverable, we are required to perform an impairment test to determine whether such particular asset, group of long-lived assets and/or goodwill have become impaired, and we conduct an impairment test every year with regard to long-lived assets and goodwill, regardless of any such indication. If the amount at which we carry a group of assets, including our long-lived assets or goodwill on our statement of financial position exceeds the recoverable amount related thereto, we would be required to recognize an impairment loss. Any impairment losses and/or additional amortization expenses for long-lived assets or goodwill we recognize will increase our expenses and could materially and adversely affect our results of operations and financial condition.

We recognize deferred tax assets to the extent that it is probable that future taxable income, which we estimate on a reasonable basis, will be available against which deductible temporary differences and net operating loss carryforwards can be utilized. As of March 31, 2026, we had recognized deferred tax assets of ¥107,275 million and unrecognized deferred tax assets of ¥79,857 million. If significant changes occur that affect the estimate of future taxable income, we may need to derecognize deferred tax assets and our results of operations would be materially and adversely affected.

***We are exposed to many types of operational risk, including the risk of misconduct and errors by our employees and other service providers.***

We are exposed to many types of operational risk, including the risk of misconduct, omissions and errors by our employees and other service providers. Our business depends on our employees and service providers to process a large number of transactions, including transactions that involve significant amounts and extensions of credit that involve the use and disclosure of personal and business information. We could be adversely affected if transactions are redirected, misappropriated, or otherwise improperly executed, personal and business information is disclosed to unintended recipients, or an operational breakdown or failure in the processing of other transactions occurs, whether as a result of human error, intentional sabotage or a fraudulent manipulation of our operations or systems. It is not always possible to identify and deter misconduct or errors by employees or service providers, and the precautions we take to detect and prevent such misconduct or errors may not be effective in controlling unknown or unmanaged risks or losses. Our resources, technologies and fraud prevention tools may be insufficient to accurately detect and prevent fraud. Any of these occurrences could diminish our ability to operate our business, increase our potential liabilities to users and merchants, and may lead to an inability to attract future users and merchants, cause reputational damage, attract regulatory intervention, and cause financial harm, any or all of which could materially and adversely affect our business, results of operations, cash flows, financial condition, and prospects.

***We track certain operational metrics with internal systems and tools. Certain of our operational metrics are subject to inherent challenges in measurement which may materially and adversely affect our business, reputation and results of operations.***

We track certain key operational metrics, such as Total GMV, Payment Segment GMV, Take Rate, Cost Rate, PayPay MTU and PayPay Number of Transactions, among others, using internal systems and tools, and these metrics may differ from estimates or similar metrics published by third parties due to differences in sources, methodologies, or the assumptions on which we rely. See also "Item 5. Operating and Financial Review and Prospects—A. Operating Results" for a discussion of certain operational metrics. Our internal systems and tools have a number of limitations, and our methodologies for tracking these metrics may change over time, which could result in unexpected changes to our metrics, including the metrics we publicly disclose, and we may revise or cease reporting metrics if we determine that such metrics are no longer appropriate measures of our performance. If the internal systems and tools we use to track these metrics undercount or overcount performance or contain algorithmic or other technical errors, the data we report may not be accurate. While these metrics are based on what we believe to be reasonable estimates of our metrics for the applicable period of measurement, there are inherent challenges in measuring how our products and services are used across large populations. For example, the accuracy of our operating metrics could be impacted by fraudulent use by users of our services, and further, we believe that there are users who have multiple accounts, even though this is prohibited in our terms of service and we implement measures to detect and prevent this behavior. Users

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using multiple accounts may cause us to overstate the number of users using our services. In addition, limitations or errors with respect to how we measure data or with respect to the data that we measure may affect our understanding of certain details of our business, which could affect our long-term strategies. If our operating metrics are not accurate representations of our business, if investors do not perceive our operating metrics to be accurate, if there are reports challenging the accuracy of our operating metrics, whether or not true, or if we discover material inaccuracies with respect to these figures, we expect that our business, reputation and results of operations would be materially and adversely affected.

***Our quarterly results of operations may fluctuate significantly and could fall below the expectations of analysts and investors, resulting in a decline in the trading price of the ADSs.***

Our quarterly results of operations fluctuate and may continue to fluctuate for a variety of reasons, many of which are beyond our control. These fluctuations may cause our quarterly results of operations to fall below the expectations of analysts or investors, which could cause the price of the ADSs to decline. As a result, you should not rely upon our past quarterly results of operations as indicators of our future performance. You should also take into account the risks and uncertainties frequently encountered by companies in rapidly evolving markets. Our financial results in any given quarter or fiscal period can be influenced by numerous factors, including the various risk factors described in this section, as well as the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•fluctuations in revenue generated by sales at the merchants that offer our payment settlement services, including as a result of the seasonal trends in consumer spending patterns in Japan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•our success in retaining existing users and attracting new users of our payment settlement services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the amount and timing of increases in our promotional and other expenses to promote our products and services and retain and add new users and customers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the timing and success of new services and features we introduce, as well as the timing and level of monetization;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the impact of changes in our competition and the effectiveness of our response;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•disruptions or defects in our services, including as a result of privacy or data security breaches;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•unforeseen legal developments affecting our business, such as changes in or the introduction of laws and regulations, adverse litigation judgments, settlements or other litigation-related expenses; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•economic and market conditions, particularly those affecting the cashless payments industry and the digital financial services industry.

***We identified material weaknesses in our internal control over financial reporting and disclosure controls and procedures and may identify additional material weaknesses in the future or otherwise fail to maintain effective internal control over financial reporting. If we fail to establish and maintain effective internal control over financial reporting, our ability to produce accurate financial statements or comply with applicable regulations could be impaired. As a result, shareholders could lose confidence in our financial reporting, which could result in litigation or regulatory enforcement actions and would harm our business and the trading price of the ADSs.***

Maintaining effective internal control over financial reporting and disclosure controls and procedures is critical to us as a public company. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements in accordance with applicable accounting standards. In addition, our disclosure controls and procedures are intended to ensure that information required to be disclosed in reports filed under the Exchange Act is appropriately recorded, processed, summarized and reported within the time periods specified by the SEC, and that such information is accumulated and communicated to management to allow timely decisions regarding required disclosure.

As a public company, we are required to report, among other things, control deficiencies that constitute a "material weakness" or changes in internal controls that, or that are reasonably likely to, materially affect internal controls over financial reporting. As defined in the standards established by the U.S. Public Company Accounting Oversight Board, or PCAOB, a "material weakness" is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. A "significant deficiency" is a deficiency, or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of our financial reporting.

As previously disclosed in our registration statement on Form F-1, while preparing our consolidated financial statements for the year ended March 31, 2025, we identified material weaknesses in our internal control over financial

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reporting. During the fiscal year ended March 31, 2026, we implemented remediation measures designed to address the identified material weaknesses, including enhancements to controls relating to information used in financial reporting processes, software capitalization, reliance on service organizations, and privileged access within our IT systems. Based on <u>such</u> remediation efforts undertaken and the operation of the enhanced controls, management believes that the previously identified material weaknesses have been remediated as of March 31, 2026.

However, while preparing our consolidated financial statements for the fiscal year ended March 31, 2026, we identified a new material weakness in our internal control over financial reporting. The material weakness was that we did not adequately design and maintain the effectiveness of the controls to ensure that sufficient instructions are provided by the parent company, PayPay Corporation, and that necessary information is accurately reported by subsidiaries for the preparation of the financial statement disclosures.

To address the newly identified material weaknesses, we plan to reassess and enhance the policies and procedures in order to prepare the consolidated financial statements, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Organizing regular Group-wide training, especially training related to subsidiary-specific disclosures.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Enhancing the guidelines that secure the accuracy and completeness of certain information used in the financial statement disclosures.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)Improving period end financial reporting reviews over the disclosures included in the consolidated financial statements.

We will not be able to fully remediate this material weakness until these actions have been completed and have been operating effectively for a sufficient period of time. The actions that we are taking are subject to ongoing review by our executive management and are subject to the oversight of the Audit and Supervisory Committee. Although we intend to complete this remediation plan as quickly as practicable, we provide no assurances to the timeline for implementing effective remedial measures, and our initiatives may not prove to be successful in remediating the material weaknesses or preventing additional material weaknesses or significant deficiencies in our internal control over financial reporting in the future.

If we fail to maintain effective internal control over financial reporting, we may not be able to accurately report our financial condition or results of operations on a timely basis. As a result, investors may lose confidence in our financial statements, the price of the ADSs could decline and we may be subject to litigation or regulatory enforcement actions.

***We are exposed to credit risk and the ability of various counterparties to pay us, which could have a material adverse effect on our results of operations, cash flows and financial condition.***

We engage in consumer credit and commercial lending activities, which exposes us to the risk that the creditworthiness of our various counterparties may deteriorate and that they may be unable to make principal or interest payments on their loans or debt securities.

*Payment Segment*

In our Payment segment, we are exposed to consumer credit risk, principally from revolving credit, installment sales credit and cash advances extended to PayPay Card holders, including users of PayPay Credit. A user's ability and willingness to repay us can be negatively impacted not only by economic, market, political and social conditions but also by a user's other payment obligations, and increasing leverage can result in a higher risk that users will default or become delinquent in their obligations to us. Other third parties may also default on their obligations to us due to bankruptcy, lack of liquidity, operational failure or other reasons. General economic factors, such as changes in gross domestic product, unemployment, inflation and interest rates, may result in greater delinquencies that lead to greater credit losses. Rising market interest rates may also lead to tighter lending conditions by financial institutions, which could impair our users' ability to refinance existing obligations, increasing the likelihood of defaults on amounts owed to us through our payment services, and thereby increase credit risk in our Payment segment.

We rely principally on users' creditworthiness for repayment of loans or receivables and therefore often have no other recourse for collection. Although users are subject to a credit check in order to be approved for PayPay Card and use our credit card and PayPay Credit payment services, the credit check may not be sufficient to accurately assess their creditworthiness, and users may be unable or unwilling to pay for the goods and services for which we have already provided payment to the merchants through such services. Our ability to assess creditworthiness may also be impaired as a result of changes in our underwriting practices or if the criteria or models we use to manage our credit risk prove inaccurate in predicting future losses, which could have a negative impact on our results of operations. This may be exacerbated to the extent information we have historically relied upon to make credit decisions does not accurately portray a user's creditworthiness, including as a result of increasing inflation or an economic slowdown. In addition, we have changed our approval criteria to increase our approval rate in connection with our growth initiatives, and this could result in us extending credit to users with greater credit risk, and may increase our exposure to credit

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risk as well as increase the delinquency rates of our credit card receivables. Any material increases in delinquencies and losses beyond our current estimates could have a material adverse impact on our results of operations, cash flows, financial condition and reputation. Although we record a loss allowance to provide for expected credit losses in our financial assets measured at amortized cost, including credit card receivables from cardholders, our loss allowance is based on credit risk associated with those financial instruments and, as a result, in the event that the rates of default and non-payment increase unexpectedly following initial recognition, our loss allowance for financial assets may not be sufficient to cover such losses. For example, if the financial condition of financial institutions in Japan worsens due to unforeseen circumstances, such as a global financial crisis, the financial situation of our borrowers is negatively affected such that they are unable to make timely payments on the loans we extended to them, this could cause rates of default and non-payment to increase. In addition, the information we use in managing our credit risk may prove inadequate to predict future losses. Furthermore, we expect our exposure to credit risk to increase over time as we expand our credit card business through PayPay Card Corporation and the proportion of payments using the PayPay app which utilize PayPay Credit.

We are also subject to credit risk in our Payment segment for PayPay Funding, which is a merchant financing service that allows selected PayPay merchants to receive future sales proceeds that they expect to earn in advance when they are in need of operating capital. For additional information on PayPay Funding, see "Item 4. Information on the Company—B. Business Overview—Our Products and Services—Other Value-Added Services—To Merchants." Because repayments from merchants for any financing received from PayPay Funding are deducted directly from merchant PayPay accounts and merchants must satisfy stringent criteria to receive PayPay Funding, we consider our exposure to credit risk related to our merchants to be relatively low.

*Financial Service Segment*

In our Financial service segment, our internet banking business operated through PayPay Bank Corporation is exposed to credit risk in connection with mortgage loans and consumer and commercial lending to retail borrowers as well as business borrowers, which largely represent loans and advances to customers of Financial service segment. As of March 31, 2026, the total loan amount and loss allowance of PayPay Bank Corporation were ¥1,238,617 million and ¥2,281 million, respectively. For our retail loans, we are exposed to credit risk only for the portion of the loans that is not guaranteed by a credit guarantee company, which accounted for 0.9% of the total outstanding retail loans as of March 31, 2026, and for our mortgages, we are exposed to credit risk only for the unsecured and unguaranteed portion, which accounted for 32.7% of the total outstanding mortgage loans as of March 31, 2026. However, as we expand our retail loan and mortgage business in the future, we may reduce the portion of our loans that is guaranteed by a credit guarantee company, which will increase our exposure to credit risk. We have established a loss allowance in connection with loans in our banking business based on our evaluation of borrowers' creditworthiness, our historical loan loss experience, the value of collateral and other factors. We are also exposed to credit risk in connection with our securitized credit card receivables of PayPay Card Corporation as part of the investment portfolio of PayPay Bank Corporation. We are also subject to the risk of unexpectedly high levels of fund outflows in the event of a deterioration in economic conditions. Similar liquidity risk may also affect our Payment segment, including at PayPay Card Corporation, particularly if adverse economic or market conditions increase funding needs or result in cash outflows beyond our expectations.

Although we review our credit exposure to specific counterparties that we believe may present credit concerns, default risk may arise from events or circumstances that are difficult to foresee or detect, such as fraud. In addition, our ability to manage credit risk or collect amounts owed to us may be adversely affected by legal or regulatory changes (such as restrictions on collections or changes in bankruptcy laws and minimum payment regulations). Increased credit risk, whether resulting from underestimating the credit losses inherent in our portfolio of receivables, deteriorating economic conditions, increases in the level of loan balances, changes in our mix of business or otherwise, could require us to increase our provisions for losses and could have a material adverse effect on our results of operations, cash flows and financial condition.

***We are exposed to interest rate risk and other market risks, including foreign exchange risk, that could materially and adversely affect our financial condition, cash flows and results of operations.***

We have certain financial assets and liabilities due to the nature of certain of our product and service offerings, which are affected considerably by interest rate fluctuations. We maintain an appropriate balance between our floating interest rate debt and fixed interest rate debt, but market interest rates could fluctuate beyond the rates we anticipate. In an effort to manage our exposure to interest rate risk and other market risks, including foreign exchange risk, due to our financial product and service offerings through PayPay Card Corporation and PayPay Bank Corporation, we engage in asset-liability management, or ALM, which considers the long-term balance between assets and liabilities in an effort to ensure stable returns. Our exposure to foreign exchange risk is relatively limited because our operations are primarily conducted in Japanese yen. Any failure to appropriately conduct our ALM activities, or any significant changes in market conditions beyond what our ALM could reasonably address, could have a material adverse effect on our financial condition, cash flows and results of operations. For PayPay Bank Corporation, rises in interest rates

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may require us to record a loss on sale or a fair value loss through either profit or loss or other comprehensive income, depending on the classification of assets, in connection with its securities portfolio. In addition, new applications for mortgage loans generally decrease when interest rates increase. For PayPay Card Corporation, because interest rates that we offer on our card loans are capped due to the legal maximum for credit card interest rates, whereas interest rates to fund our operations fluctuate with the market, in the event of a sharp increase in market interest rates, our margin could decrease significantly, which would result in a material and adverse impact on our financial condition, cash flows and results of operations. See "—Failure to comply with the existing laws and regulations applicable to our business could subject us, or our subsidiaries or our associates, as applicable, to enforcement actions and penalties and otherwise harm our business, as well as divert our management's attention and resources and result in increased costs." Furthermore, if the consumption tax rate increases, this could negatively impact the volume of transactions by our users due to the rise in overall costs of living of consumers resulting in an overall decrease in spending by our users.

***In the event that our payment processing charges payable to financial institutions increase significantly, and we are not able to pass on these higher processing charges to our merchants or users, we may not be able to improve our profitability and our business could be materially and adversely affected.***

We are required to pay payment processing charges to financial institutions, payment processing networks and card networks for processing transactions on our platform, including when our users transfer funds to their PayPay Balance or make payments using PayPay Card. These costs depend on the category of merchant and the payment instrument used by the user. From time to time, financial institutions, payment processing networks and card networks have increased, and may in the future increase, charges levied for processing transactions on our platform, or card networks may reduce the amount of interchange fees to be received by credit card issuers. These charges vary for each payment instrument and we may not be able to pass on these costs to our merchants or users. Accordingly, any increase in payment gateway charges could make our pricing less competitive, lead us to change our pricing model, or materially and adversely affect our margins and prevent us from improving our profitability. In addition, financial institutions may not agree to renew our agreements with them on commercially reasonable terms or at all, which could also adversely impact our financial condition, cash flows and results of operations. From September 2023, we started to charge an additional fee to users that load their PayPay Balance through the SoftBank/Y! Mobile mobile carrier billing service twice or more per month. The initiatives we have taken and other initiatives we may take in the future to reduce our payment-related costs may not have the desired effect of improving our profitability in the event that they result in the loss of users or a material reduction in the use of our payment settlement services.

***We are subject to compensation liability risk in case of fraud and chargeback and refund liability risk when our merchants refuse to or are unable to reimburse transactions that are charged back and refunds resolved in favor of their customers. Any increase in compensation we provide or chargebacks and refunds not paid by our merchants may adversely affect our business, financial condition, cash flows or results of operations.***

With respect to fraudulent payments made using our PayPay app, we have a compensation policy which provides that users will be fully reimbursed and merchants will be fully paid by us unless such fraudulent payments are attributable to users' or merchants' gross negligence or willful misconduct. We also have a compensation policy for fraudulent payments made using our credit cards, under which we will either refund or not process the fraudulent charge to cardholders and will not collect chargebacks from merchants provided that certain criteria are satisfied, including a condition that transactions are verified by 3D Secure, an online payment authentication standard maintained by various payment card servicers. Such compensation is not covered by any of our insurance policies and therefore there is a risk that the amount of compensation that we will bear the loss for will increase as we expand our business.

In addition, we are exposed to certain risks associated with chargebacks and refunds in connection with fraud or relating to the products or services provided by our merchants. The majority of fraud-related chargebacks and refunds in recent years have involved cases in which our user's PayPay app account, a user's credit card number, expiration date and security code, which are pre-registered for the PayPay app, or a PayPay Card holder's credit card number, expiration date and security code are improperly accessed and fraudulently used as a result of phishing scams.

In the event that a billing dispute between a user and a merchant is not resolved in favor of the merchant, including in situations in which the merchant is engaged in fraud, the transaction is typically "charged back" to the merchant and the purchase price is credited or otherwise refunded to the user. In certain circumstances where we are unable to collect transactions that are charged back to the merchant or refunds from the merchant's account, or if the merchant refuses to or is unable to reimburse us for a transaction charged back or refunds due to closure, bankruptcy, or other reasons, we may bear the loss for the amounts paid to the user. However, in a scenario where PayPay Card Corporation is the card issuer, but not the acquirer, we do not bear the loss for the amounts paid to the user because the acquirer reimburses us and bears the loss. The risk of transactions being charged back is typically greater with merchants that promise future delivery of products and services rather than delivering products or rendering services

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at the time of payment, and any customer disputes linked to rendering of such services from our merchants may adversely impact our ability to retain and attract our users.

We do not collect and maintain reserves from our merchants to cover these potential losses, including in the case of customer and merchant disputes. For our credit card merchant acquiring business, if we are unable to maintain fraudulent transactions, billing disputes or chargebacks at acceptable levels, the payment network providers could impose penalties on us or increase our transaction fees. Any increase in our transaction fees or liability for incorrect charges could damage our business, and if we were unable to accept payment cards, our business would be negatively affected. Any increase in chargebacks not paid by our merchants could have a material adverse effect on our business, financial condition, cash flows or results of operations. Furthermore, while we believe we have been able to maintain a relatively low rate of fraudulent payments, if the rate of fraudulent payments using our PayPay app increases in the future, this could damage our reputation and the trust our users and merchants have in our services, which could result in a material adverse effect on our business, financial condition, cash flows or results of operations.

***Our risk management policies and procedures may not adequately protect us from unidentified or unanticipated risks, which could result in a material and adverse effect on our business or result in losses.***

We have organized risk management policies and procedures to address a range of risks, including market risk, credit risk, liquidity risk, counterparty risk and a variety of other risks. Many of our methods of managing risks and exposures are based on our use of observed historical market behavior or statistics based on historical data. We may not be able to use those methods to accurately predict future losses, which could be significantly greater than indicated by the relevant historical data. Other risk management methods depend in part on our evaluation of publicly available information regarding markets, customers or other matters, and such information may not always be accurate, complete, up-to-date or properly evaluated. In addition, our risk management procedures depend in part on information gathered from numerous other sources, and errors may be introduced during the process of gathering and compiling such information. Moreover, operational risk is inherent in our business and can manifest itself in various ways, including inappropriate internal processes, human error, employee misconduct, system malfunctions and other internal or external factors. Management of operational risk requires, among other things, policies and procedures to properly record, verify and review a large number of transactions and events, and our policies and procedures may not be entirely effective. Any failure or ineffectiveness of our risk management policies or procedures could materially and adversely affect our business, financial condition and results of operations.

As we expand our product and service offerings, our user and merchant base and our GMV, we may have difficulty achieving the administrative, systems and risk management improvements necessary to manage the risks associated with new business activities and increased scale. The risk management policies and procedures we adopt may not be effective in preventing losses related to the various types of risks that we face in our businesses. Failure or ineffectiveness of these policies and procedures could materially and adversely affect our business or result in losses.

**Risks Related to the Proposed Acquisition of a Controlling Stake in T&D Financial Life Insurance Company**

***Although we have entered into definitive agreements to acquire a controlling stake in T&D Financial Life Insurance Company, the transaction may not be completed on the expected terms or timeline, or at all, and, even if completed, it may not deliver the benefits we currently expect and could expose us to significant regulatory, operational and financial risks.***

In June 2026, we entered into a share purchase agreement with T&D Holdings, Inc. ("T&D Holdings") to acquire 70.2% of the shares of T&D Financial Life Insurance Company ("TDFL") for total estimated consideration of approximately ¥134 billion (including acquisition-related expenses), which we expect to fund from cash on hand. Under the currently contemplated structure for the transaction, T&D Holdings is expected to retain 14.9% of the shares of TDFL, and OneIM Indigo Holdings Ltd, an affiliate of One Investment Management Ltd ("OneIM"), is expected to acquire 14.9% of the shares of TDFL.

The completion of the acquisition remains subject to customary closing conditions, including required regulatory approvals, contractual conditions and significant pre-closing preparations, including TDFL's transition to IFRS. The acquisition is expected to close in October 2027. During the period between signing and the expected closing, TDFL's business, financial condition or prospects could be adversely affected by factors outside our control, including changes in interest rates, capital markets conditions, policyholder behavior, or the regulatory environment applicable to the life insurance industry in Japan, any of which could materially alter the value of the business we are acquiring. Because a substantial period of time is expected to elapse between the signing of the definitive agreements and the closing of the acquisition, there can be no assurance that the conditions for the consummation of the acquisition will be satisfied on a timely basis or at all, or that the acquisition will be completed on the terms or within the timeframe currently contemplated. If the acquisition is not completed, or if completion is delayed, we may incur higher-than-expected acquisition, preparation or other related costs, liabilities, capital needs, charges, impairments or other unforeseen adverse consequences, and our business, financial condition, results of operations, cash flows, reputation

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and the market price of our ADSs could be adversely affected.

In addition, because the final acquisition price is subject to adjustment, the total consideration we pay at closing could exceed our current estimates.

***Following the acquisition, any failure to successfully integrate TDFL's operations with our group could adversely impact the price of our ADSs and future business and operations.***

If the acquisition is completed, the integration of TDFL's businesses into our operations is expected to be a complex and time-consuming process. We may be unable to retain key TDFL personnel, including management and employees with critical institutional knowledge, or to maintain TDFL's existing distribution relationships with financial institution agency partners, any of which could disrupt TDFL's business and diminish the value of the acquisition. Even if we successfully integrate TDFL's businesses into our operations, there can be no assurance that we will realize the anticipated strategic, financial or operational benefits within the anticipated timeframe, including due to unforeseen difficulties in integrating TDFL with our group or executing our post-acquisition strategy and related business initiatives. We also do not have prior experience operating an insurance business, and the acquisition would further expand our business into the highly regulated life insurance industry, which involves business, operational, regulatory, financial reporting and systems complexities and risks that differ from those of our existing businesses, including solvency margin requirements, reserve adequacy standards, regulatory capital requirements and policyholder protection rules applicable to life insurance companies in Japan.

In addition, our ownership and operation of TDFL will be subject to shareholder and other contractual arrangements with T&D Holdings and OneIM. These arrangements could affect important aspects of how we operate and manage TDFL and could limit our flexibility in running TDFL's business in the manner we currently expect. Disagreements among the shareholders could impede decision-making with respect to TDFL, even where we hold a controlling interest, to the extent that certain actions require the consent of one or more minority shareholders. We may also consider acquiring additional interests in TDFL over time, which would require additional funding and approvals, and be subject to execution risk. In particular, under the shareholders' agreement, T&D Holdings is expected to have the right to require us to purchase its remaining 14.9% stake in TDFL from and after the third anniversary of closing, which could require us to deploy additional capital at a time or on terms that may not be favorable to us.

**Risks Related to SoftBank Group Corp. and SoftBank Group Companies**

***We collaborate with SoftBank Group companies in the provision of our services. Any failure by such companies to continue to support our services, or a material change in our relationship with such companies, could adversely impact our services and could impact our overall business, financial condition, cash flows and results of operations.***

We collaborate with SoftBank Group companies in branding and marketing as well as for a variety of other services and arrangements, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•*Joint promotional activities*: we engage in joint promotions with SoftBank Group companies such as LY Corporation and SoftBank Corp. to encourage users to utilize the PayPay app, apply for PayPay Credit card accounts and open PayPay Bank accounts, including by offering PayPay Points and other incentives. Such promotional activities with affiliated companies are a major source of our customer referrals and help create network effects. Online shops utilizing the Yahoo! Japan e-commerce platform were also early adopters of our payment settlement services.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•*Outsourcing of services*: we partly outsource sales and marketing efforts targeting merchants nationwide to SoftBank Corp. and the provision of payment infrastructure and services to our participating merchants to its subsidiary, SB Payment Services. We also outsource sales and marketing efforts targeting merchants to PayPay SC Corporation, an equity-method affiliate of ours. We hold 34% of the common shares of PayPay SC Corporation, while SB Payment Service Corporation and SB C&S Corp., both subsidiaries of SoftBank Corp., hold 33% and 33% of the common shares, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•*Financial services*: we offer financial services operated by SoftBank Group companies, including PayPay Insurance Service Corporation, a wholly-owned subsidiary of LY Corporation, which have insurance agency and other licenses, to our users by entering into referral fee and revenue/profit-sharing arrangements with them. There are uncertainties as to how to implement these arrangements to provide both a secure operating environment and compliance by our partners, and our offerings made in collaboration with them, with all applicable financial regulations, including those related to policy opening procedures and marketing of financial products. It is possible that we will encounter

challenges and risks that impact our users and operations that we do not currently anticipate. If we do not adequately coordinate with PayPay Insurance Service Corporation to provide financial services in

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compliance with all applicable regulations, it is possible we or they could be subject to regulatory action and be held liable for damages to our users, which could delay our growth initiatives and adversely affect our results of operations and financial condition.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•*Loan agreements with LY Corporation*: PayPay Card Corporation and LY Corporation have entered into certain loan agreements in order to improve funding efficiency through group financing. As of March 31, 2026, PayPay Card Corporation had outstanding borrowings under two such loan agreements, with an aggregate outstanding principal amount of ¥20 billion. See "Business overview—Collaborations with SoftBank Group Companies—Loan Agreements with LY Corporation."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•*Secondments and directors dispatched from SoftBank Group companies*: PayPay Corporation, PayPay Card Corporation, PayPay Bank Corporation and PayPay Securities Corporation have employees seconded from SoftBank Group companies, including SoftBank Corp. and LY Corporation. Such seconded employees provide us with expertise in a range of areas and therefore the termination of such secondments could negatively affect our business. See "Item 4. Information on the Company—B. Business Overview— Employees." In addition, we have directors who are dispatched from SoftBank Group companies. As of the date of this Annual Report, we have four directors that were dispatched from SoftBank Group companies.

The joint promotions we engage in with SoftBank Group companies as well as the services, licenses and arrangements described above are critical to our operations and enable us to grow and retain our merchant base and user base in addition to accessing technology infrastructure, human resources and licensed financial services providers that we do not possess directly. Any change in the level of promotional activities engaged in by these affiliated companies or any failure by these affiliated companies to continue to provide services or licenses to us may impact the attractiveness of our services or interrupt our ability to provide some of the services to our merchants and users, which could have a material adverse impact on our operations and adversely affect our growth potential. In addition, because SoftBank Group Corp., SoftBank Corp. and LY Corporation are listed companies with minority shareholders, their obligations to their respective shareholders may not always be aligned with what is in our best interest. For additional information on related party transactions, see "Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions."

***Our current shareholders will continue to collectively hold substantial shareholdings and exercise influence over our operations.***

As of May 31, 2026, our current shareholders, B Holdings Corporation, SVF II Piranha (DE) LLC, SoftBank Corp. and LY Corporation, together owned 90.62% of our outstanding shares. Such shareholders, which are all ultimately controlled by SoftBank Group Corp., may continue to influence fundamental decisions such as the appointment and removal of our directors, the approval of mergers or other business combination transactions, the sale of material assets or businesses, amendments to our articles of incorporation and the declaration of dividends. Moreover, SoftBank Corp. and LY Corporation, each of which held 50% of the voting rights of B Holdings Corporation, which held 47.07% of our voting rights are public companies listed on the Tokyo Stock Exchange that have fiduciary duties to their own shareholders as well.

Pursuant to an agreement between SoftBank Corp. and LY Corporation, LY Corporation is entitled to nominate a majority of the directors of B Holdings Corporation. Furthermore, pursuant to an agreement between B Holdings Corporation and us, as long as we are a consolidated subsidiary of LY Corporation, the prior written approval of B Holdings Corporation is required for us to (a) take any action to issue or grant our shares, stock options, convertible bonds or any other rights to acquire our shares (including disposal of treasury shares or treasury stock acquisition rights) if as a result of such action the percentage of voting rights held by B Holdings Corporation would be 50% or less (on a fully diluted basis assuming the exercise of all outstanding stock options, convertible bonds and rights to acquire our shares) and (b) sell, transfer, assign, grant a security interest in or dispose of assets, including shares and businesses owned by us or our consolidated subsidiaries, which account for 20% or more of the book value of our total assets on a consolidated basis as of the latest fiscal year-end, to a third party. As a result, LY Corporation has substantial control over us by holding the majority of our voting rights directly and indirectly. The interests of such shareholders with respect to our operations and other matters over which they may have influence may differ from the interests of our other shareholders.

We have other ongoing business transactions with our shareholders and their affiliates as described above under "—We collaborate with SoftBank Group companies in the provision of our services. Any failure by such companies to continue to support our services, or a material change in our relationship with such companies, could adversely impact our services and could impact our overall business, financial condition, cash flows and results of operations." In the future, as their shareholding level decreases, it is possible there could be changes in our business relationships with our current shareholders and their affiliates that are adverse to us.

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SoftBank Group Corp. and funds it sponsors, including the SoftBank Vision Fund and SoftBank Vision Fund 2, invest in a broad range of companies, both in Japan and globally. Due to our ongoing business transactions with SoftBank Group companies, it is possible that events affecting SoftBank Group Corp. or its other investee companies, even if not directly related to our operations, could influence investor perception of us and the price of the ADSs.

**Risks Related to Technology, Information Systems and Intellectual Property**

***Failure to maintain or improve our technology infrastructure could harm our business and prospects and materially and adversely affect our business and reputation.***

It is critical to our success that users and merchants are able to access our platform at all times. Our systems, or those of third parties upon which we rely, may experience service interruptions or degradation or other performance problems because of hardware and software defects or malfunctions, unexpected high volume of transactions, distributed denial-of-service and other cyberattacks, infrastructure changes, human error, earthquakes, hurricanes, floods, fires, natural disasters, power losses, disruptions in telecommunications services, unauthorized access, fraud, military or political conflicts, terrorist attacks, computer viruses, ransomware, malware, or other events. Although we have a business continuity plan in place, which features the use of multiple data centers in Tokyo and redundancy provided by our backup data center in another region of Japan, there can be no assurance that our plan will be effective in the event we experience such service interruptions or degradation or other performance problems. Our systems also may be subject to break-ins, sabotage, theft and intentional acts of vandalism, including by our own employees, all of which would impact our ability to provide secure and seamless access to our platform, which would have an adverse impact on our operations and reputation. In the event we experience any such incidents, we may not be able to continue providing our services to our merchants and users.

The software underlying our platform as well as the various systems that support our financial services business is complex and may contain undetected errors or vulnerabilities, some of which may only be discovered at a subsequent stage or may not get discovered at all. Our practice is to release frequent software updates. However, any errors, vulnerabilities or infringements discovered in our code or from third-party software after release could result in negative publicity, a loss of users or loss of revenue, legal proceedings or regulatory action, and access or other performance issues. Such vulnerabilities could also be exploited by malicious actors and result in exposure of data of the users or merchants on our platform, or otherwise result in security breaches or other security incidents. Any failure to timely and effectively resolve any such errors, defects, or vulnerabilities could materially and adversely affect our business, reputation, brand, financial condition, cash flows and results of operations. We have experienced and will likely continue to experience system failures and other events or conditions from time to time that interrupt the availability or reduce or affect the speed or functionality of our platform. These system failures generally occur either as a result of software updates being deployed with unexpected errors or as a result of temporary infrastructure failures related to storage, network, or computing capacity being exhausted. However, they may be caused by other reasons. For example, in December 2018, a system overload occurred due to a large-scale promotional campaign that we were conducting, and as a result of that system overload, we experienced software failures, payment delays and some instances of duplicated payment processing. In addition, in May 2024, another system overload occurred with our relay server due to a high-intensity data verification process, and as a result of the system overload, we experienced system failures where certain users were unable to use their PayPay app for several hours. Further, in some instances, we may not be able to identify the cause or causes of these performance problems within an acceptable period of time.

Any failure to maintain and improve our technology infrastructure could result in unanticipated system disruptions, slower response times, impaired user experience, delays in reporting accurate operating and financial information and failures in risk management. The risks of these events occurring are even higher during certain periods of peak usage and activity, such as on or around various shopping festivals or other promotional events, when transaction volume is significantly higher on our payment network compared to other days of the year. If we experience problems with the functionality and effectiveness of our software, interfaces or platform, or are unable to maintain and continuously improve our technology infrastructure to handle our business needs, our business, financial condition, cash flows, results of operations and prospects, as well as our reputation and brand, could be materially and adversely affected. In addition, we could be subject to liability for damages as a result of system disruptions in certain scenarios.

Furthermore, our technology infrastructure and services, including our service offerings, incorporate third-party-developed software, systems and technologies, as well as hardware purchased or commissioned from outside and overseas suppliers. For example, Paytm Labs Inc., a subsidiary of One97 Communications Limited, has granted us licenses for its software, which enables us to provide our PayPay My Store Service, fraud prevention solutions for our operations and solutions for our marketing strategy while providing us with related software support services. We also intend to incorporate data-driven solutions to develop new services in collaboration with PayPay Card Corporation and incorporate AI as part of our cost reduction efforts. As our technology infrastructure and services expand and become increasingly complex, we face increasingly serious risks to the performance and security of our technology infrastructure and services that may be caused by these third-party-developed components, including risks

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relating to incompatibilities among these components, service failures or delays or back-end procedures on hardware and software. We also need to continuously enhance our existing technology. Otherwise, we face the risk of our technology infrastructure becoming unstable and susceptible to security breaches. This instability or susceptibility could create serious challenges to the security and uninterrupted operation of our platform and services, which would materially and adversely affect our business and reputation.

***Our use of artificial intelligence technologies may not achieve their intended benefits and may expose us to operational, legal and reputational risks.***

We increasingly integrate artificial intelligence ("AI") tools into our operations, including the use of AI-enabled coding assistants in our engineering processes, generative AI platforms to support corporate functions, such as translation and document summarization, and proprietary AI models trained on our proprietary datasets to enhance the accuracy of credit-decisioning. While these tools are intended to improve efficiency, productivity and decision-making, there can be no assurance that their use will produce consistent or reliable results. Generative AI may produce inaccurate or biased outputs, which could impair the quality of our services, increase operational risks or expose us to potential liability. In addition, our reliance on proprietary data to train AI models may raise data privacy, security and regulatory compliance concerns, particularly as laws and standards governing AI continue to evolve. The adoption of AI also introduces risks of overreliance on automated processes, potential misuse of confidential information, and heightened scrutiny from regulators, customers and other stakeholders. If we are unable to effectively manage these risks, our operations, reputation, and financial results could be materially and adversely affected.

***We rely on mobile operating systems and application marketplaces to make the PayPay app available to participants that utilize our platform, and if we do not effectively operate with or receive favorable placements within such application marketplaces, our usage or brand recognition could decline and our business, financial results, cash flows and results of operations could be materially and adversely affected.***

We are dependent on the ability of our services to integrate with a variety of third-party operating systems, as well as web browsers that we do not control. Any changes in these third-party systems that degrade the functionality of our services, impose additional costs or requirements on us, or give preferential treatment to competitive services, including their own services, could materially and adversely affect usage of our services. In addition, we rely on app marketplaces to drive downloads of our mobile app. App marketplaces regularly make changes to their marketplaces, and those changes may make access to our services more difficult. In the event that it is difficult for our merchants to access and use our services, our business may be materially and adversely affected.

We also depend, in large part, on search engines, social media platforms, digital app stores, content-based digital marketing and other online sources for traffic to our platform. Our ability to maintain and increase the number of users directed to our platform is not entirely within our control. Search engines, social media platforms and other online sources often revise their algorithms and introduce new advertising services based on data feedback. If one or more of the search engines or other online sources on which we rely for traffic to our platform were to modify its general algorithm for how it displays our advertisements or keyword search results, resulting in fewer users clicking through to our platform, our business or results of operations may suffer. In addition, if our online display advertisements are no longer able to reach certain users due to users' use of ad-blocking software, our business or results of operations could be materially and adversely affected.

As new mobile devices and mobile platforms are released, there is no guarantee that certain mobile devices will continue to support our platform or effectively roll out updates to our applications. Additionally, in order to deliver high-quality applications, we need to ensure that our platform is designed to work effectively with a range of mobile technologies, systems, networks, and standards. We may not be successful in developing or maintaining relationships with key participants in the mobile industry that enhance user experience. If participants that utilize our platform encounter any difficulty accessing or using our applications on their mobile devices or if we are unable to adapt to changes in popular mobile operating systems, we expect our user growth and engagement to be adversely affected, which may materially and adversely affect our business and results of operations.

***Any privacy or data security breach, cyber-attacks or internal misconducts could damage our reputation and brand and substantially harm our business and any actual or perceived failure by us to comply with laws or regulations or any other contractual obligations relating to privacy or the protection or transfer of data relating to individuals, could materially and adversely affect our business.***

As a technology-based platform and provider of digital financial services, our business generates and processes a large quantity of personal, transaction, billing, behavioral and demographic data. We face risks inherent in handling and protecting large volumes of data, including protecting the data hosted in our systems, detecting and prohibiting unauthorized data share and transfer, preventing attacks on our systems by outside parties or fraudulent behavior or improper use by our employees, preventing inadvertent access to, disclosure of, or loss of data due to human error,

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and maintaining and updating our database. We need to manage the risk of unauthorized and fraudulent access to user accounts for our PayPay app, with PayPay Card Corporation, with PayPay Bank Corporation and with PayPay Securities Corporation. Any system failures, security breaches or third-party attacks or attempts to illegally obtain data that result in any actual or perceived release of user data could damage our reputation and brand, deter current and potential users from using our services, damage our business, and expose us to potential legal liability. We currently do not have any cybersecurity insurance policies that are intended to mitigate financial losses resulting from such cyber-attacks or data breaches.

The techniques used to obtain unauthorized, improper, or illegal access to our systems, our or our users' data, or to disable or degrade service or sabotage systems, are constantly evolving, may be difficult to detect quickly, and may not be recognized until after they have been launched against a target. We may be unable to anticipate these techniques, react in a timely manner, or implement adequate preventative or remedial measures. Unauthorized parties may attempt to gain access to our systems or facilities through various means, including, among others, hacking into our or our partners' or users' systems or facilities, or attempting to fraudulently induce our employees, partners, users or others into disclosing usernames, passwords, or other sensitive information, which may in turn be used to access our information technology systems and gain access to our or our users' data or other confidential, proprietary, or sensitive information. Pursuant to our internal policy, we audit our security practices and procedures for handling sensitive personal data or information, and we evaluate the related risks as part of our internal audit procedures. If our internal audit reports identify such risks, we may incur costs for addressing them, suffer the diversion of management's attention or become subject to regulatory actions.

We are also required to comply with several international standards, including the Payment Card Industry Data Security Standard (PCI-DSS), Cross-Border Privacy Rules (CBPR), Information Security Management System (ISMS) and the standards imposed by the National Institute of Standards and Technology (NIST), as applicable to the transactions undertaken on our platform. Our failure, or the failure by our third-party providers or merchant partners on our platform, to comply with applicable laws or regulations or standards or any other contractual obligations relating to privacy, data protection, or information security, may cause a leak of users' data, materially and adversely affect our reputation and lead to termination of our agreements with the affected merchants. Under our agreements with our merchants, our merchants and we are required to ensure proper encryption and security measures at our respective websites, mobile applications and billing systems to prevent any hacking into information pertaining to transactions. We are also required to protect and keep confidential all information related to the credit/debit cards, online banking services or other payment data of users who are carrying out transactions with such merchants through our platform. We cannot assure you that our merchants or we will be able to prevent all attempts of hacking and/or unauthorized disclosures of user data. Any future compromise of security or cyberattack that results in unauthorized access to, or use or release of personally identifiable information or other data relating to users, or other individuals, or the perception that any of the foregoing types of failure or compromise has occurred, could damage our reputation, discourage new and existing users from using our platform, or result in fines, investigations, or proceedings by governmental agencies and private claims and litigation, any of which could materially and adversely affect our business, financial condition, cash flows and results of operations.

***We may be unable to sufficiently obtain, maintain, protect, or enforce our intellectual property and other proprietary rights, which could adversely affect our business, results of operations, financial condition and future prospects.***

Intellectual property and other proprietary rights are important to the success of our business. Our ability to compete effectively is dependent in part upon our ability to obtain, maintain, protect, and enforce our intellectual property and other proprietary rights, including our proprietary technology, and to obtain licenses to use the intellectual property and proprietary rights of others. We rely on a combination of trademarks, copyrights, patents, domain names, and agreements with employees and third parties to protect our intellectual property and other proprietary rights. Nonetheless, the steps we take to obtain, maintain, protect, and enforce our intellectual property and other proprietary rights may be inadequate. Despite our efforts to protect these rights, unauthorized third parties, including our competitors, may duplicate, mimic, reverse engineer, access, obtain, or use the proprietary aspects of our technology, processes or services without our permission. Our competitors and other third parties may also design around or independently develop similar technology or otherwise duplicate or mimic our services such that we would not be able to successfully assert our intellectual property or other proprietary rights against them. We cannot assure that any future patent, trademark, or service mark registrations will be issued for our pending or future applications or that any of our owned or licensed current or future patents, copyrights, trademarks, or service marks (whether registered or unregistered) will be valid, enforceable, sufficiently broad in scope, provide adequate protection of our intellectual property or other proprietary rights, or provide us with any competitive advantage.

We may be unable to prevent competitors or other third parties from acquiring or using trademarks, service marks, copyrights, patents or other intellectual property or other proprietary rights that are similar to, infringe upon, misappropriate, dilute, or otherwise violate or diminish the value of our owned or licensed trademarks, service marks, copyrights, patents and our other intellectual property and proprietary rights. The value of our owned or licensed

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intellectual property and other proprietary rights could diminish if others assert rights in or ownership of our intellectual property or other proprietary rights, or in trademarks or service marks that are similar to our trademarks or service marks. In addition, we cannot guarantee that we or our licensors have entered into agreements containing obligations of confidentiality with each party that has or may have had access to proprietary information, know-how, or trade secrets owned or held by us or our licensors. Moreover, our or our licensors' contractual arrangements may be breached or may otherwise not effectively prevent disclosure of, or control access to, our confidential or otherwise proprietary information or provide an adequate remedy in the event of an unauthorized disclosure. The measures we or our licensors have put in place may not prevent misappropriation, infringement, or other violation of our or our licensors' intellectual property or other proprietary rights or information and any resulting loss of competitive advantage, and we or our licensors may be required to litigate to protect our intellectual property or other proprietary rights or information from misappropriation, infringement, or other violation by others, which may be expensive, could cause a diversion of resources, and may not be successful, even when our or our licensors' rights have been infringed, misappropriated, or otherwise violated.

As the number of services in the software industry increases and the functionalities of these services further overlap, and as we acquire technology through acquisitions or licenses, we or our licensors may become increasingly subject to infringement claims, including patent, copyright, and trademark infringement claims. We or our licensors may be accused of infringing intellectual property or other proprietary rights of third parties, including serial trademark and patent individual squatters, including their copyrights, trademarks, or patents, or improperly using or disclosing their trade secrets, or otherwise infringing or violating their proprietary rights. Our success depends in part on our ability to conduct our business without infringing the intellectual property rights of third parties. However, as the features and content of our services continue to grow, there is an increasing possibility that we may be subject to litigation involving claims of patent, copyright or trademark infringement or other violations of intellectual property rights of third parties. Existing or future claims against us, whether valid or not, may be time consuming, distracting to management and expensive to defend. Any of the foregoing could adversely affect our business, results of operations, financial condition and prospects.

***Some aspects of our platform include open source software, and our use of open source software could negatively affect our business, results of operations, cash flows, financial condition, and prospects.***

Aspects of our platform include software covered by open source licenses. The terms of open source licenses are open to interpretation, and there is a risk that such licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our platform. In such an event, we could be required to re-engineer all or a portion of our technologies, seek licenses from third parties in order to continue offering our services, discontinue the use of our platform in the event re-engineering cannot be accomplished, or otherwise be limited in the licensing of our technologies, each of which could reduce or eliminate the value of our technologies and services. If portions of our proprietary software are determined to be subject to an open source license, we could also be required to, under certain circumstances, publicly release or license, at no cost, our services that incorporate the open source software or the affected portions of our source code, which could allow our competitors or other third parties to create similar services with lower development effort, time, and costs, and could ultimately result in a loss of transaction volume for us. We cannot ensure that we have not incorporated open source software in our software in a manner that is inconsistent with the terms of the applicable license or our current policies, and we may inadvertently use open source in a manner that we do not intend or that could expose us to claims for breach of contract or intellectual property infringement, misappropriation, or other violation. If we fail to comply, or are alleged to have failed to comply, with the terms and conditions of our open source licenses, we could be required to incur significant legal expenses defending such allegations, be subject to significant damages, be enjoined from the sale of our services, and be required to comply with onerous conditions or restrictions on our services, any of which could be materially disruptive to our business.

In addition to risks related to license requirements, usage of open source software can lead to risks because open source licensors generally do not provide warranties or other contractual protections regarding infringement, misappropriation, or other violations, the quality of code, or the origin of the software. Many of the risks associated with the use of open source software cannot be eliminated and could materially and adversely affect our business, results of operations, financial condition, and prospects. For instance, open source software is often developed by different groups of programmers outside of our control that collaborate with each other on projects. As a result, open source software may have security vulnerabilities, defects, or errors of which we are not aware. Even if we become aware of any security vulnerabilities, defects, or errors, it may take a significant amount of time for either us or the programmers who developed the open source software to address such vulnerabilities, defects, or errors, which could negatively impact our services, including, but not limited to, by adversely affecting the market's perception of our services, impairing the functionality of our services, delaying the launch of new services, or resulting in the failure of our services, any of which could result in liability to us or our service providers. Further, our adoption of certain policies with respect to the use of open source software may affect our ability to hire and retain employees, including engineers.

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**Risks Related to Laws, Regulations and Compliance**

***Failure to comply with existing laws and regulations applicable to our business could subject us, or our subsidiaries or our associates, as applicable, to enforcement actions and penalties and otherwise harm our business, as well as divert our management's attention and resources and result in increased costs.***

Our business is subject to regulation by various statutory and regulatory authorities, including, but not limited to, the FSA, METI and other authorities responsible for enforcing compliance with privacy and data protection-related laws, intellectual property laws, consumer protection laws, anti-money laundering laws and anti-corruption and anti-bribery laws. Some laws and regulations that we are subject to involve matters central to our business, including newer laws and regulations focused on our industry, internet, privacy, data protection and information security.

*Payment Segment*

Under the Payment Services Act of Japan (Act No. 59 of 2009, as amended), or the Payment Services Act, because we are registered as a fund transfer service provider to offer PayPay Money, a refundable type of PayPay Balance deposited by users, we are required to provide guarantee deposits to the Tokyo Legal Affairs Bureau for the higher of (i) ¥5 million and (ii) the amount calculated based on the sum of (a) the amount of outstanding obligations pertaining to funds transfer transactions borne by the funds transfer service provider and (b) the expenses associated with the exercise of rights as creditors of fund transfer services. Also under the Payment Services Act, because we are registered as an issuer of prepaid payment instruments for third-party businesses to offer PayPay Money Lite, a non-refundable type of PayPay Balance pre-loaded through advance payments by users, we are also required to provide guarantee deposits to the Tokyo Legal Affairs Bureau for an amount that is at least half of the total unused balance of PayPay Money Lite as of March 31 or September 30 every year if the balance of our PayPay Money Lite on such date exceeds ¥10 million. Such guarantee deposits totaled ¥219,466 million as of March 31, 2025. For details on the calculation of our required guarantee deposits, see Note 9 to our audited consolidated financial statements included elsewhere in this Annual Report. The Director of the Kanto Local Finance Bureau of the Ministry of Finance has the authority to issue a business improvement order or a business suspension order, or cancel our registration, if we fail to comply with these regulations. We may be also subject to criminal sanctions if we fail to comply with certain obligations under the Payment Services Act.

In addition, PayPay Corporation is registered as a financial instruments intermediary service provider, an electronic payment service provider and a credit card number, etc. handling contractor. Also, PayPay Corporation obtains a license of a bank agency service provider and is designated as a designated funds transfer service provider. Furthermore, PayPay Corporation and PayPay Card Corporation are designated as specified essential infrastructure service providers, in connection with our funds transfer business and third-party prepaid payment instruments issuing business under the Payment Services Act and in connection with PayPay Card Corporation's intermediation business of comprehensive credit purchases under the Installment Sales Act of Japan (Act No. 159 of 1961, as amended), or the Installment Sales Act, respectively.

PayPay Card Corporation is also registered as a money lender, a comprehensive credit purchase intermediary and a credit card number-handling contractor. Credit payment services provided by PayPay Card Corporation are classified as an intermediation of comprehensive credit purchases and providing cash advances requires registration as a money lender. PayPay Corporation, PayPay Card Corporation, PayPay Bank Corporation and PayPay Securities Corporation are required to perform certain verification procedures of customer identifications in accordance with the Act on Prevention of Transfer of Criminal Proceeds of Japan. Furthermore, because we have a dominant position in code-based payment settlement markets which is an important financial infrastructure in Japan, we need to comply with the Act on Prohibition of Private Monopolization and Maintenance of Fair Trade of Japan (Act No. 54 of 1947, as amended), or the Act on Prohibition of Private Monopolization and Maintenance of Fair Trade when we make changes to our operations and offer new services.

In Japan, both the Interest Rate Restriction Act of Japan (Act No. 100 of 1954, as amended), or the Interest Rate Restriction Act, and the Act Regulating the Receipt of Contributions, Receipt of Deposits and Interest Rates of Japan (Act No. 195 of 1954, as amended), or the Act Regulating the Receipt of Contributions, Receipt of Deposits and Interest Rates, regulate maximum interest rates, and any amounts exceeding these limits are deemed void and subject to sanctions. As a result of having two regulations that regulate maximum interest rates, there was a surge in cases where loans were made at interest rates that exceeded the maximum interest rate specified in the Interest Rate Restriction Act, but that did not exceed the maximum rate specified in the Act Regulating the Receipt of Contributions, Receipt of Deposits and Interest Rates, which became to be known as a social issue called "gray-zone interest rates." To address this social issue, the Japanese government gradually lowered the maximum interest rate specified in the Act Regulating the Receipt of Contributions, Receipt of Deposits and Interest Rates to eliminate gray-zone interest rates for newly issued card loans. PayPay Card Corporation provides cash advances services and revolving credit services. Cash advances services are regulated by the Interest Rate Restriction Act and the Act Regulating the Receipt of Contributions, Receipt of Deposits and Interest Rates, and while revolving credit services for purchases are not regulated by either the Interest Rate Restriction Act or the Act Regulating the Receipt of Contributions, Receipt of

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Deposits and Interest Rates, PayPay Card Corporation, through self-regulation, provides revolving credit services within the limits of the maximum interest rates specified in these regulations. The current maximum interest rate under the Act Regulating the Receipt of Contributions, Receipt of Deposits and Interest Rates is 20%, and there is no guarantee that the Japanese government will not lower the maximum interest rate in the future. If the maximum interest rate is lowered, our revenue growth, profitability, cash flows and financial condition may be adversely affected.

*Financial Service Segment*

PayPay Bank Corporation is a licensed bank and is subject to regulation by the FSA under the Banking Act of Japan (Act No. 59 of 1981, as amended), or the Banking Act. PayPay Bank Corporation's failure to comply with the terms of its banking license or applicable laws and regulations, including those for consumer protection, could lead to the cancellation of its banking license and other licenses and approvals to engage in its business, governmental inspections and enforcement actions, claims from or litigation with customers or business partners, including due to breach of contractual terms, or the inability to implement our business strategy.

PayPay Bank Corporation is also subject to the requirement that it maintain risk-adjusted capital adequacy ratios above the levels specified in the capital adequacy standards stipulated by the FSA, based on Basel III. As a Japanese bank that does not have overseas operations, PayPay Bank Corporation is subject to the domestic standard for capital adequacy. As of March 31, 2025, PayPay Bank Corporation's consolidated risk-adjusted capital adequacy ratio was 16.76% compared to the minimum risk-adjusted consolidated capital adequacy ratio of 4.0%. PayPay Bank Corporation may be unable to continue to satisfy the capital adequacy requirements if its core capital decreases or risk-weighted assets increase for any reason, including as a result of the realization of any of the risks described elsewhere in this "Risk Factors" section, or if capital adequacy standards are amended to be more stringent. If PayPay Bank Corporation's capital adequacy ratios fall below required limits, the FSA could require PayPay Bank Corporation to take corrective actions, including, depending upon the level of deficiency, submission of an improvement plan or suspension of a portion of its business operations. PayPay Bank Corporation may also need to alter its business strategy or operations if its capital adequacy ratios decline to unacceptable levels. In addition, we are subject to restrictions on the aggregate amount of loans to any single customer or customer group under the Banking Act. As a result, loans to SoftBank Group companies are subject to restrictions. For a discussion of our capital adequacy ratios and the related regulatory standards, see "Item 4. Information on the Company—B. Business Overview—Regulations" and "Item 5. Operating And Financial Review and Prospects—B. Liquidity and capital resources—Regulatory Capital Requirements." In addition, we voluntarily calculate metrics under certain international standards, including those related to leverage ratios, liquidity coverage ratios and interest rate risk in the banking book.

PayPay Securities Corporation is a registered financial instruments business operator and subject to extensive regulation by the FSA and self-regulatory organizations. Our online brokerage operations must comply with, among other rules, capital adequacy, customer protection and market conduct requirements. Securities regulatory agencies regularly review the operations of online brokerage companies, including PayPay Securities Corporation. Under the Financial Instruments and Exchange Act of Japan (Act No. 25 of 1948, as amended), or the FIEA, and related regulations, PayPay Securities Corporation is required to meet strict capital adequacy requirements. If PayPay Securities Corporation fails to maintain the required level of regulatory capital, the FSA may order changes in its operations or the deposit of assets, temporary suspension of its business or revocation of its registration as a securities company. As of March 31, 2025, PayPay Securities Corporation had a regulatory capital adequacy ratio of 301.7%, which was above the required minimum ratio of 120%.

We are also subject to certain regulatory restrictions as a bank's major shareholder with respect to PayPay Bank Corporation and as a principal shareholder of PayPay Securities Corporation, under which the FSA may request the submission of reports or materials from, or may conduct inspections of, us in certain circumstances, and may order us to take such measures as the FSA deems necessary, including resigning from our respective positions as shareholders of PayPay Bank Corporation and PayPay Securities Corporation, under certain limited circumstances. With respect to PayPay Bank Corporation, authorization by the FSA is required to become a bank's major shareholder so if our authorization is revoked, we will need to take measures so that we will no longer be the holder of a number of voting rights in the bank which is equal to or greater than the major shareholder threshold, within the period designated by the FSA. With respect to PayPay Securities Corporation, if it violates applicable rules and regulations, the regulatory authorities that oversee PayPay Securities Corporation's activities may exercise their broad powers to issue an order canceling PayPay Securities Corporation's registration or authorization or suspending or requiring changes in the manner of PayPay Securities Corporation's business, which may result in the removal of certain directors or corporate auditors of PayPay Securities Corporation from their positions. In addition, the Japanese government in the future may adopt new regulations that adversely affect our online banking or online securities intermediary business by

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imposing additional costs, exposing us to increased liability or additional supervision or monitoring. See "Item 4. Information on the Company—B. Business Overview—Regulations."

We have established a system of legal compliance including employee education and the establishment of a compliance system. There have been no events that cause revocation of our registration described above. However, if our registration were to be revoked, our overall business activities would be hindered, and our financial condition and results of operations could be materially affected. In addition, in the event that our business methods do not conform to laws and regulations, including, but not limited to, the Payment Services Act, the Installment Sales Act, the Act on Prevention of Transfer of Criminal Proceeds of Japan (Act No. 22 of 2007, as amended), or the Act on Prevention of Transfer of Criminal Proceeds, the Money Lending Business Act of Japan (Act No. 32 of 1983, as amended), or the Money Lending Business Act, the Banking Act and the FIEA, there is a possibility that we may be subject to administrative punishment or criminal punishment by the competent authorities. The laws and regulations related to financial services are complex, and our compliance with such laws and regulations may be subject to regular inspection by competent authorities, which may result in orders for improvement in the case of any non-compliance as well as regular reporting on the status of such improvement efforts. In particular, PayPay Bank Corporation was subject to an inspection by the FSA in 2021, which identified certain areas of improvement in PayPay Bank Corporation's anti-money laundering and countering the finance of terrorism, or AML/CFT, compliance system. PayPay Bank Corporation reported the implementation of improvement measures to the FSA and the FSA confirmed PayPay Bank Corporation's AML/CFT compliance system conformed with applicable guidelines in June 2024. However, due to the complex and evolving nature of AML/CFT compliance, there is a possibility we may face compliance issues in the future, which may result, among other things, in administrative inquiries or penalties.

We are required to spend significant costs, time and effort to comply with relevant laws and regulations. In addition, the introduction of new services or other offerings in our existing markets and the expansion of our business to other countries may subject us to additional laws and regulations. Furthermore, in Japan, financial authorities have significant discretion in financial administration. Therefore, we may sometimes be required to comply with management indicators that are not clearly defined in laws and regulations. There may also be new and increased regulation of our industry going forward. Other existing and future regulations and laws could impede the growth of our industry, internet and online services. Many of these laws and regulations are still evolving and could be interpreted or applied in ways that could limit our business, particularly in the new and rapidly evolving industry in which we operate. Unfavorable regulations and laws could diminish demand and increase our cost of doing business.

Any failure or alleged failure to comply, or failure by any of our third-party service providers or merchants to comply, with the applicable laws, regulations or requirements could subject us, or our subsidiaries, as applicable, to inspection, audit and enforcement actions by the relevant authority; suspension and revocation of the relevant license or approval; civil penalties including payment of damages; and criminal penalties including payment of fines. Also, we may in the future be subject to laws and regulations, that we currently believe do not apply to us, as a result of any amendment thereto or any changes in the interpretation of relevant regulatory authorities, which may increase our costs for compliance or otherwise materially and adversely affect our business or results of operations.

In addition, it is possible that a regulatory inquiry might force us to change our policies or practices, including those that may impact the user convenience or overall user experience of our services, or subject us to regulatory orders or consent decrees. If we were to violate such orders or decrees, we might be subject to fines or other penalties.

These actions or any failure to prevail in possible civil or criminal litigation may materially and adversely affect our business, results of operations, financial condition, cash flows and reputation. In addition, responding to any action or litigation may result in a diversion of our management's attention and resources and an increase in professional fees and compliance costs.

***We could be subject to regulatory scrutiny, enforcement actions or legal claims if there is unintentional loss, disclosure or misappropriation of our users' personal information or other breaches of our security.***

We make extensive use of online services and centralized data processing, including through the use of third-party service providers, so the secure maintenance and transmission of confidential information is a critical element of our operations. We also collaborate with affiliated companies that use our brand for the provision of financial services to users from whom personal and confidential information is collected. There can be no assurance that user information has not been and will not be lost or disclosed or taken without consent or that our information technology and other systems, or those of our third-party service providers or strategic business partners, will not be compromised. If we lose users' personal information or if a third party is able to penetrate our or our business partners' or service providers' network security or otherwise misappropriate our users' personal information, we could be subject to claims, we could be in violation of the Act on the Protection of Personal Information of Japan (Act No. 57 of 2003, as amended), or the Act on the Protection of Personal Information, and the Act on the Use of Numbers to Identify a Specific Individual in Administrative Procedures of Japan (Act No. 27 of 2013, as amended). Inadvertent loss, disclosure or misappropriation of user information by our own employees would subject us to similar risks. The

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Japanese media, regulators and consumers have intensified their scrutiny of incidents involving the loss, disclosure or misappropriation of personal information in recent years. Significant violations could result in a business improvement order or suspension of specific operations by regulators, among other consequences, which may materially and adversely affect our business and results of operations.

***We rely on third parties for certain aspects of our business, which creates additional risk, and the failure of third parties to comply with legal or regulatory requirements or to provide various products and services that are important to our operations could have a material and adverse effect on our business, results of operations, cash flows, financial condition, and prospects.***

We depend on third-party service providers for certain services, such as technology and other services to support our operations, including cloud-based data storage, data centers and other IT solutions, card networks, payment processing and the processing of users' and merchants' personal data. Our success depends on our ability to manage various service providers to provide reliable and satisfactory services to users on our platform. Our operations and business could be materially and adversely affected if our outsourced service providers face any operational or system interruptions. To the extent we are unable to effectively manage these partners to provide satisfactory services to our users to address their needs on commercially acceptable terms, or at all, or if we fail to retain existing or attract new quality partners to our platform, our ability to retain, attract or engage our users may be severely limited, which may have a material and adverse effect on our business, financial condition, cash flows and results of operations. In many cases, we utilize services of affiliated companies as described under "—We collaborate with SoftBank Group companies in the provision of our services. Any failure by such companies to continue to support our services, or a material change in our relationship with such companies, could adversely impact our services and could impact our overall business, financial condition, cash flows and results of operations."

Most of our agreements with third-party service providers are terminable by the service provider at a short or no notice, and if our current third-party service providers were to terminate their agreements with us or otherwise stop providing services to us on acceptable terms, we may be unable to procure service from alternative service providers in a timely and efficient manner and on acceptable terms or at all. Furthermore, some of our service agreements are fixed-term contracts or have short duration ranging from one year to three years and are not subject to automatic renewal. If any service provider fails to provide the services we require, fails to meet contractual requirements (including compliance with applicable laws and regulations), fails to maintain adequate data privacy controls, personal information protection and electronic security systems, or suffers a cyberattack or other security breach, we could be subject to regulatory enforcement actions, claims from third parties, including our users, and suffer economic and reputational harm that could have a material adverse effect on our business. Furthermore, we may incur significant costs to resolve any such disruptions in service, which could materially and adversely affect our business.

***We may be materially and adversely affected by the evolving laws and regulations governing our business and the introduction of any new laws and regulations which may become applicable to our business.***

The laws and regulations governing our businesses are evolving and may be amended, supplemented or changed at any time. As a result, we may be required to seek for and follow additional procedures, modify or adjust certain activities, restructure our ownership structure, obtain new and additional licenses and incur additional expenses to comply with such laws and regulations, which could adversely affect our future development and business. New laws and regulations may be enacted from time to time to require additional licenses and approvals other than those we currently have. In order to comply with evolving laws and regulations, we may need to devote significant resources and efforts, including restructuring affected businesses, changing our business practices and adjusting our activities, which may materially and adversely affect our business, growth prospects and reputation. We will be affected by such changes particularly with respect to PayPay Bank Corporation and PayPay Securities Corporation due to the highly regulated nature of the industry they operate in. We cannot assure you that the relevant regulatory authorities will not introduce further new laws and regulations in the future that may require us to restructure our business, obtain new licenses, comply with additional requirements and incur additional ongoing compliance costs which may materially and adversely affect our future development, business and results of operations.

***Any failure by us or our business partners and financial institution partners who work with us to comply with applicable anti-money laundering, counter-terrorist financing and economic sanction laws and regulations could lead to penalties and may damage our reputation.***

We and our partners who work with us are required to comply with certain anti-money laundering requirements in Japan, including those related to "anti-social forces" (a reference to organized crime in Japan), and economic sanctions regimes. These requirements include the establishment of a client identification program, the monitoring and reporting of suspicious transactions, the preservation of client information and transaction records, and the provision of assistance in investigations and proceedings in relation to money laundering matters. We and our financial

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institution partners are also subject to various counter-terrorist financing and economic sanctions laws and regulations that prohibit, among other things, any involvement in transferring the proceeds of criminal activities and any activities involving restricted countries, organizations, entities and persons that have been identified as unlawful actors or that are subject to U.S. sanctions imposed by the U.S. Department of the Treasury Office of Foreign Asset Control, or other international economic sanctions that prohibit us and our partners from engaging in trade or financial transactions with certain countries, businesses, organizations and individuals. These laws and regulations require us and our partners to establish sound internal control policies and procedures with respect to anti-money laundering, counter-terrorist financing and economic sanctions monitoring and reporting obligations.

The policies and procedures we and our partners have adopted may not be effectively implemented in protecting our services from being exploited for money laundering, terrorist financing and other illegal purposes. If we fail to comply with anti-money laundering, counter-terrorist and economic sanctions laws and regulations, we could be subject to fines, enforcement actions, regulatory sanctions, additional compliance requirements, increased regulatory scrutiny of our business, or other penalties levied by regulators, and damages to our reputation, all of which may materially and adversely affect our business operations, and results of operations. In particular, if we were publicly named as a sanctioned entity by relevant regulatory authorities or become subject to investigation, our business may be significantly interrupted and our reputation might be severely damaged. Similarly, if our partners fail to comply with applicable laws and regulations, it could disrupt our services and could result in potential liability for us and damage our reputation. We and our partners have been and will continue to be required to make changes to our and their respective compliance programs in response to any new or revised laws and regulations on anti-money laundering, counter-terrorist financing and economic sanctions, which could make compliance more costly and operationally difficult to manage.

**External Risks Related to Economic Conditions and Other Factors**

***Unfavorable economic conditions in Japan could have a material adverse effect on our business, financial condition and results of operations.***

Our revenue from the provision of payment settlement services and financial services is and will continue to be heavily influenced by the behavior of retail customers in Japan as well as market risks, including foreign exchange risk and interest rate risk. Accordingly, our business and future prospects are affected by general economic conditions in Japan and trends in Japanese household consumer spending. A downturn in the Japanese economy, whether due to intensifying international trade frictions, including tariffs, geopolitical risks, such as political tensions in Asia, including between mainland China and Taiwan and between North Korea and South Korea and the developing conflict between India and Pakistan, and geopolitical risks and military conflicts in the Middle East, including the conflicts between Israel and Hamas and between Israel, the United States and Iran, as well as escalating military tensions in Europe as a result of Russia's invasion of Ukraine, a fluctuating yen, rising interest rates, inflation, volatility in financial markets, global economic instability or other factors, or a significant deterioration in consumer confidence or other unfavorable market conditions could have a material adverse effect on our business, financial condition and results of operations.

The outlook for the Japanese economy remains uncertain. In particular, since 2013, the Bank of Japan, or the BOJ, had implemented quantitative and qualitative monetary easing measures to overcome deflation until March 2024, when it stated that its policy framework of quantitative and qualitative monetary easing with yield curve control and its negative interest rate policy had fulfilled their roles. As the consumer price index increased and inflation has occurred in Japan in recent years, based on its view that the functioning of Japanese bond markets had deteriorated due to increased volatility in overseas financial and capital markets, the BOJ decided to modify the conduct of yield curve control in December 2022 to expand the range of 10-year Japanese government bond yield fluctuations from the target level of between around plus and minus 0.25 percentage points to around plus and minus 0.5 percentage points. In March 2024, the BOJ stated that its theretofore effective policy framework of quantitative and qualitative monetary easing with yield curve control and its negative interest rate policy had fulfilled their roles and set the uncollateralized overnight call rate to around 0 to 0.1%. Subsequently, the BOJ further raised the target rate to around 0.25% on July 31, 2024, to around 0.5% on January 24, 2025 to around 0.75% on December 19, 2025, and to around 1.0% on June 16, 2026. Despite the Japanese yen's interest rate rising after the BOJ's modification of the yield curve control and short-term interest rates rising in Japan after the BOJ's raise, interest rates in Japan are still low relative to interest rates of other currencies, which may lead to continued or increased downward pressure on the Japanese yen and which, in turn, may adversely affect consumer borrowing or spending activities. Moreover, the recent increases or further increases in Japanese yen interest rates may also have negative effects on consumers, such as through increased interest rates on home loans or other loans, or other negative effects on economic activity in Japan, in turn materially and adversely affecting the businesses of PayPay Bank Corporation and PayPay Card Corporation. Although the BOJ stated in its "Review of Monetary Policy from a Broad Perspective," released in December 2024, that the overall effect of these measures on the Japanese economy has been positive, future side effects from a prolonged large-scale continuation of unconventional monetary policy measures remain possible. Over the long term,

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demographic trends leading to population decreases could serve to depress economic growth or lead to economic contraction in Japan.

In addition, NISA, a tax-deferred savings scheme targeted to significantly increase investment by Japanese individuals, was updated in January 2024 to increase the tax benefits available to Japanese taxpayers investing in both long-term mutual funds and stocks. Consumer investment has expanded significantly as a result of this update and is expected to continue to expand. This update to NISA is expected to have a positive impact on the business of PayPay Securities Corporation. However, if this tax-deferred savings scheme is further updated in the future such that consumer spending decreases as a result, this may similarly have a material and adverse impact on the financial results of PayPay Securities Corporation.

***Natural disasters, fires, epidemics, pandemics, acts of war, civil unrest and other events could materially and adversely affect our business.***

Natural disasters (such as typhoons, flooding and earthquakes), epidemics, pandemics, acts of war, terrorist attacks and other events, many of which are beyond our control, may lead to economic instability, including in Japan or globally, which may in turn materially and adversely affect our business, financial condition, cash flows and results of operations.

Our operations may be materially and adversely affected by fires, natural disasters and/or severe weather, which can result in damage to our technological infrastructure and generally reduce our productivity and may require us to evacuate personnel and suspend operations. In particular, such occurrences in the Tokyo area where our main data centers are located, which are supported by multiple AWS data centers, or in the area where our backup data center is located, could have a material adverse impact on our operations. Any terrorist attacks or civil unrest as well as other adverse social, economic and political events in Japan could have a negative effect on us.

**Risks Related to Shares of our Common Stock and the ADSs**

***The trading price of the ADSs is likely to be volatile, which could result in substantial losses to investors.***

The trading price of the ADSs is likely to be volatile and could fluctuate widely due to factors beyond our control or unrelated to our operating or financial performance. Factors that could cause fluctuations in the market prices and trading volume of the ADSs include the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•price and volume fluctuations in the global stock markets from time to time;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•general economic conditions and slow or negative growth of our markets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•new laws or regulations or new interpretations of existing laws or regulations applicable to our business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•changes in tax laws and regulations as well as accounting standards, policies, guidelines, interpretations or principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•actual or anticipated developments in our business, our competitors' businesses or the competitive landscape generally;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•rumors and market speculation involving us, our affiliated companies or other companies in our industry;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•failure of securities analysts and credit rating agencies to maintain coverage of us, changes in financial estimates by securities analysts and credit rating agencies who follow our company, or our failure to meet these estimates or the expectations of investors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•announcements by us or our competitors of new products and services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•announced or completed transactions affecting our businesses or technologies or those of our competitors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•actual or anticipated changes in our results of operations or fluctuations in our results of operations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•sales of shares of our common stock by us or our current shareholders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•litigation involving us, our industry or both, or investigations by regulators into our operations or those of our competitors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•developments or disputes concerning our intellectual property or other proprietary rights; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•any significant change in our management.

Any of the above or other factors, in addition to other risk factors described herein, may result in large and sudden changes in the volume and price at which the ADSs will trade.

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***Fluctuations in exchange rates may affect the U.S. dollar value of the ADSs and dividends payable to holders of the ADSs.***

The conversion of Japanese yen into foreign currencies, including the U.S. dollar, is based on market exchange rates. The Japanese yen has fluctuated against the U.S. dollar, at times significantly and unpredictably. The value of the Japanese yen against the U.S. dollar and other currencies is affected by changes in global political and economic conditions, among other things. We cannot assure you that the Japanese yen will not appreciate or depreciate significantly in value against the U.S. dollar in the future. It is difficult to predict how market forces or U.S. government policy may impact the exchange rate between the Japanese yen and the U.S. dollar in the future.

Any significant depreciation of the Japanese yen may materially and adversely affect the value of, and any dividends payable on, the ADSs in U.S. dollars. If we decide to convert our Japanese yen into U.S. dollars for the purpose of making payments for dividends on our shares of common stock or ADSs, appreciation of the U.S. dollar against the Japanese yen would have a negative effect on the U.S. dollar amount available to us. In addition, appreciation or depreciation in the value of the Japanese yen relative to the U.S. dollar would affect our financial results translated from Japanese yen into U.S. dollar terms regardless of any underlying change in our business or results of operations. As a result, fluctuations in exchange rates may have a material adverse effect on your investment.

***We may be classified as a passive foreign investment company for U.S. federal income tax purposes, which could subject U.S. investors in the ADSs or common shares to adverse tax consequences, which may be significant.***

In general, we will be a passive foreign investment company (a "PFIC") for any taxable year in which:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•at least 75% of our gross income is passive income, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•at least 50% of the value (generally determined based on a quarterly average) of our assets is attributable to assets that produce or are held for the production of passive income.

For this purpose, passive income generally includes dividends, interest, royalties and rents (other than certain interest derived in the active conduct of banking business). In addition, cash and other assets readily convertible into cash are generally considered passive assets. If we own at least 25% (by value) of the stock of another corporation, for purposes of determining whether we are a PFIC, we will be treated as owning our proportionate share of the other corporation's assets and receiving our proportionate share of the other corporation's income. We do not expect to be a PFIC for our current taxable year or in the foreseeable future. However, our PFIC status is a factual determination that is made annually, and thus may be subject to change due to changes in our income or asset composition or in the value of our assets. Because the value of our goodwill may be determined based on the expected market value of the ADSs from time to time, a decrease in the price of the ADSs may also result in our becoming a PFIC for any taxable year.

If we are a PFIC for any taxable year during which you hold the ADSs or common shares, our PFIC status could result in adverse United States federal income tax consequences to you if you are a United States investor. For example, if we are or become a PFIC, you may be subject to increased tax liabilities under United States federal income tax laws and regulations, and will be subject to reporting requirements. See "Item 10. Additional Information—E. Taxation—Certain United States Federal Income Tax Considerations to United States Holders—Passive Foreign Investment Company."

***Substantial future sales of our shares of common stock or ADSs, or the perception that these transactions could occur, could depress the market prices of the ADSs.***

Sales of the ADSs in the public market, including pursuant to registration rights provided to SoftBank Corp., LY Corporation, B Holdings Corporation and SVF II Piranha (DE) LLC (see "Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Registration Rights Agreement"), or the perception that these sales could occur, could cause the market price of the ADSs to decline.

As of March 31, 2026, there were 12,280,600 shares of our common stock issuable upon exercise of outstanding stock options, and holders of our stock options may choose to exercise their options and sell all or a portion of their shares. Our shareholders approved a plan to grant stock options to our directors, corporate officers and employees through trust-type stock options in August 2022, under which stock options to purchase 11,636,000 shares of our common stock were initially issued to and held by a trustee. For the year ended March 31, 2023, stock options to purchase 4,589,200 common shares were distributed to directors, corporate officers and employees. As of April 30, 2025, the remaining trust-type stock options to purchase 7,046,800 common shares were forfeited and extinguished, and by May 30, 2025, the trust-type stock options to purchase 580,000 common shares that were registered were forfeited and extinguished due to retirement. In addition, in April 2025, our shareholders approved a plan to grant stock options to our directors, corporate officers and employees through tax qualified-type stock options and one-yen-exercisable at retirement-type stock options. Under this plan, on May 31, 2025, we granted stock options to purchase

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8,729,400 common shares. See "Item 6. Directors, Senior Management and Employees—B. Compensation and Note 35 to our annual consolidated financial statements. Furthermore, we may require additional capital to support our operations and the growth of our business, and we cannot be certain that financing will be available on reasonable terms when required, or at all. Moreover, our board of directors will be able to issue and sell additional shares of our common stock within the unissued portion of our authorized share capital, generally without any shareholder vote. Any such sales could cause the prices of the ADSs to decline.

***If securities or industry analysts were to adversely change their recommendations regarding an investment in us, the prices of the ADSs or their trading volume could decline.***

The trading market for the ADSs will be influenced by the research and other reports that securities or industry analysts may publish about us, our business, our market, our shareholders or our competitors. If any of the analysts who may cover us adversely change their recommendation regarding an investment in us, or provide more favorable relative recommendations about our competitors, the price of the ADSs would likely decline. If any analyst who may cover us were to cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause the price of the ADSs or their trading volume to decline.

***We may not pay dividends for the foreseeable future.***

We have never declared or paid cash dividends on our capital stock. We currently intend to retain future earnings to finance the operation and expansion of our business, and as a result, we may not declare or pay any dividends in the foreseeable future. You may only receive a return on your investment if the market price of the ADSs increases.

***As a Japanese joint stock corporation, we are permitted to rely on exemptions from certain Nasdaq corporate governance standards applicable to public U.S. companies, as well as from certain disclosure requirements under the Exchange Act. This may afford less protection to holders of the ADSs than they would enjoy if we complied fully with the Nasdaq corporate governance listing standards.***

As a company listed on Nasdaq, we are subject to the Nasdaq corporate governance listing standards. However, as a Japanese joint stock corporation, we are exempted from certain Nasdaq corporate governance requirements by virtue of being a foreign private issuer and are permitted to follow the corporate governance practices of our home country. For a brief description of the significant differences between our corporate governance practices and the corporate governance practices required to be followed by U.S. companies listed on Nasdaq, see "Item 16G. Corporate Governance." The standards applicable to us are considerably different from the standards applied to public U.S. companies. For instance, we are not required to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•have a majority of our board of directors be independent; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•have a compensation committee or a nominating or corporate governance committee consisting entirely of independent directors.

We intend to rely on these exemptions for so long as we maintain our status as a foreign private issuer. For example, although we have established a compensation committee and a nominating committee, those committees do not consist entirely of independent directors. As a result, you may not be provided with the benefits of certain corporate governance standards applicable to public U.S. companies.

We are a "controlled company" as defined under the rules of Nasdaq, because the entities ultimately controlled by SoftBank Group Corp. own 90.62% of the aggregate voting power of our total issued and outstanding shares. As a controlled company, we are eligible to, and, in the event we no longer qualify as a foreign private issuer, we intend to, elect not to comply with certain of the Nasdaq corporate governance standards, including the requirement that a majority of directors on our board of directors are independent directors and the requirement that our compensation committee and our nominating and corporate governance committee consist entirely of independent directors. In the event that we cease to be a controlled company, we will not be eligible to elect not to comply with such Nasdaq corporate governance standards even when we no longer qualify as a foreign private issuer.

As a foreign private issuer, we are not subject to all of the disclosure requirements applicable to companies organized within the United States. For example, we are exempt from certain rules under the Exchange Act that regulate disclosure obligations and procedural requirements related to the solicitation of proxies, consents or authorizations applicable to a security registered under the Exchange Act. In addition, our directors and officers are exempt from the reporting and "short-swing" profit recovery provisions of Section 16 of the Exchange Act and related rules with respect to their purchases and sales of our securities. Moreover, we are not required to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. public companies. Accordingly, there may be less publicly available information concerning our company than there is for U.S. public companies.

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***We incur increased costs as a result of being a public company.***

As a public company we incur significant legal, accounting and other expenses that we did not incur prior to our IPO. These additional costs may negatively affect our financial results. The Sarbanes-Oxley Act of 2002, as well as rules subsequently implemented by the SEC and Nasdaq, impose various requirements on the corporate governance practices of public companies. We expect these rules and regulations to increase our legal and financial compliance costs and to make some corporate activities more time-consuming and costly. We expect to incur significant expenses and devote substantial management effort toward ensuring compliance with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 and the other rules and regulations of the SEC. For example, as a result of becoming a public company, we need to appoint a certain number of independent directors and adopt policies regarding internal controls and disclosure controls and procedures, both of which we have already begun to address. We also expect that operating as a public company make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. In addition, we incur additional costs associated with our public company reporting requirements. It may also be more difficult for us to find qualified persons to serve on our board of directors or as executive officers. We are currently evaluating and monitoring developments with respect to these rules and regulations, and we cannot predict or estimate with any degree of certainty the amount of additional costs we may incur or the timing of such costs.

In the past, shareholders of a public company often brought securities class action suits against the company following periods of instability in the market price of that company's securities. If we were involved in a class action suit, it could divert a significant amount of our management's attention and other resources from our business and operations, which could harm our results of operations and require us to incur significant expenses to defend the suit. Any such class action suit, whether or not successful, could harm our reputation and restrict our ability to raise capital in the future. In addition, if a claim is successfully made against us, we may be required to pay significant damages, which could have a material adverse effect on our financial condition and results of operations.

***Holders of ADSs have fewer rights than shareholders under Japanese law, their voting rights are limited by the terms of the deposit agreement, and they may not be able to exercise their rights to vote the underlying shares of common stock.***

The rights of shareholders under Japanese law to take actions, including voting their shares, receiving dividends and distributions, bringing derivative actions, examining our accounting books and records, exercising appraisal rights, requesting to call shareholders meetings and submitting proposals at shareholders meetings, are available only to shareholders of record. Holders of ADSs do not have the same rights as our registered shareholders. The depositary, through its custodian, is the record holder of the shares of our common stock underlying the ADSs. Holders of ADSs will not have any direct right to attend general meetings of our shareholders or to cast any votes at such meetings. ADS holders will not be able to bring a derivative action, examine our accounting books and records, or exercise appraisal rights through the depositary.

Holders of ADSs will only be able to exercise the voting rights with respect to the underlying shares of common stock represented by the ADSs indirectly by giving voting instructions to the depositary in accordance with the provisions of the deposit agreement. Under the deposit agreement, holders of ADSs may only vote by giving voting instructions to the depositary. If we request the depositary to solicit voting instructions, upon receipt of voting instructions from holders of ADSs in the manner set forth in the deposit agreement, the depositary will make efforts to vote the shares underlying the ADSs in accordance with the instructions of ADS holders. Holders of ADSs will not be able to directly exercise their right to vote with respect to the underlying shares unless they cancel their ADSs, withdraw the shares of common stock and become the registered holder of such shares of common stock prior to the record date for the general meeting. Under our articles of incorporation, the minimum notice period required for convening a general meeting is 14 days. When a general meeting is convened, holders of ADSs may not receive sufficient advance notice to cancel their ADSs, withdraw the shares underlying their ADSs to allow them to vote with respect to any specific matter or resolution to be considered and voted upon at the general meeting. In addition, under our articles of incorporation, for the purposes of determining those shareholders who are entitled to attend and vote at any general meeting, our directors may close our register of members and/or fix in advance a record date for such meeting, and such closure of our register of members or the setting of such a record date may prevent holders of ADSs from withdrawing the underlying shares of common stock represented by their ADSs and from becoming the registered holder of such shares prior to the record date, so that they would not be able to attend the general meeting or to vote directly. If we instruct the depositary to solicit instructions from holders of ADSs, the depositary will notify them of the upcoming vote and will arrange to deliver our voting materials to ADS holders. We cannot assure holders of ADSs that they will receive the voting materials in time to ensure that they can instruct the depositary to vote the underlying shares. In addition, the depositary and its agents are not responsible for failing to carry out voting instructions or for their manner of carrying out their voting instructions. This means that holders of ADSs may not be

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able to exercise their right to vote and they may have no legal remedy if the shares underlying their ADSs are not voted as they requested. We have agreed to give the depositary notice of a general meeting at least 30 days in advance.

***Holders of ADSs may not receive distributions on shares of our common stock or any value for them if it is illegal or impractical to make them available to such holders.***

The depositary has agreed, subject to the terms of the deposit agreement, to pay holders of ADSs the cash dividends or other distributions it or the custodian for the ADSs receives on shares of common stock or other deposited securities after deducting its fees and expenses and any taxes or other governmental charges. Holders of ADSs will receive these distributions in proportion to the number of shares of our common stock that such ADSs represent. However, the depositary is not responsible for making such payments or distributions if it is unlawful or impractical to make a distribution available to any holders of ADSs. For example, it would be unlawful to make a distribution to a holder of ADSs if it consists of securities that require registration under the Securities Act, but that are not properly registered or distributed pursuant to an applicable exemption from registration. The depositary is not responsible for making a distribution available to any holders of ADSs if any government approval or registration required for such distribution cannot be obtained after reasonable efforts made by the depositary. The depositary may also determine that it is not feasible to distribute certain property through the mail. Additionally, the value of certain distributions may be less than the cost of mailing them. In these cases, the depositary may determine not to distribute such property. We have no obligation to register under U.S. securities laws any ADSs, shares of common stock, rights or other securities received through such distributions. We also have no obligation to take any other action to permit the distribution of ADSs, shares of common stock, rights or anything else to holders of ADSs. This means that holders of ADSs may not receive distributions we make on our shares of common stock or any value for them if it is illegal or impractical for us to make them available to such holders. These restrictions may cause a material decline in the value of the ADSs.

***Rights of shareholders under Japanese law may be different from rights of shareholders in other jurisdictions.***

Our articles of incorporation and the Companies Act of Japan, or the Companies Act, govern our corporate affairs. Legal principles relating to matters such as the validity of corporate procedures, directors' and executive officers' fiduciary duties and obligations and shareholders' rights under Japanese law may be different from, less extensive as or less clearly defined than, those that would apply to a company incorporated in any other jurisdiction. If you surrender your ADSs to the depositary to withdraw the common shares underlying your ADSs, you would be subject to shareholders' rights under Japanese law, which may not be as extensive as shareholders' rights under the law of other countries. For example, under the Companies Act, only holders of 3% or more of our total voting rights or our outstanding shares are entitled to examine our accounting books and records. Furthermore, there is a degree of uncertainty as to what duties the directors of a Japanese joint stock corporation may have in response to an unsolicited takeover bid, and such uncertainty may be more pronounced than that in other jurisdictions.

***Investors holding less than one "unit" of shares of our common stock will have limited rights as shareholders.***

Our articles of incorporation provide that 100 shares of common stock constitute one "unit." Under the Companies Act and our articles of incorporation, shareholders are entitled to one voting right for each unit of shares, and shares constituting less than a full unit carry no voting rights and certain other shareholder rights are limited. As a result, if you surrender your ADSs to the depositary to withdraw the common shares underlying your ADSs and you hold shares constituting less than one unit, you will not have the right to vote with respect to those shares, and your ability to influence the outcome of matters submitted to shareholders (including the election of directors and other significant corporate actions) will be materially limited. In addition, there is no exchange-based market for odd-lot shares, and holders of shares constituting less than one unit may have limited liquidity. Under the Companies Act, holders of odd-lot shares have the right to require the company to purchase such shares, and we will comply with such request. However, our articles of incorporation do not provide holders of odd-lot shares with the right to acquire additional shares from the company in order to constitute a full unit. As a result, holders of shares constituting less than one unit may have limited methods available to dispose of such shares and may incur additional time, cost or uncertainty.

Further, although amendments to the articles of incorporation generally require approval by a special resolution of a general meeting of shareholders, pursuant to the Companies Act, our board of directors may reduce the number of shares constituting one unit or cease to use the unit share system by amendments to the articles of incorporation without shareholders' approval. Any such action could change the allocation of voting rights and other shareholder rights among holders of our common stock, including common stock underlying ADS, and could affect your ability to exercise voting rights (including through the depositary) and the relative influence of different shareholders. In addition, changes to the unit share system could require adjustments to the ADS-to-share ratio or other technical

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changes under the deposit agreement, which could create uncertainty for investors and may result in additional administrative steps, costs or fees.

***Holders of ADSs may be subject to limitations on transfer of their ADSs and on the ability to deposit or withdraw common shares.***

ADSs are transferable on the books of the depositary. However, the depositary may close its transfer books at any time or from time to time when it deems expedient in connection with the performance of its duties. In addition, the depositary may refuse to deliver, transfer or register transfers of ADSs or to accept surrenders of ADSs for the purpose of withdrawing common shares generally when our books or the books of the depositary are closed, or at any time if we or the depositary deems it advisable to do so because of any requirement of law or of any government or governmental body, or under any provision of the deposit agreement, or for any other reason. Moreover, even if the deposit agreement permits a withdrawal of common shares, your ability to effect such withdrawal may depend on the agreement with or operational practices of your broker, custodian or other intermediary, and in some cases you may not be able to withdraw common shares and hold them directly as a result.

***Holders of ADSs may experience dilution of their holdings due to inability to participate in rights offerings.***

We may, from time to time, distribute rights to our shareholders, including rights to acquire securities. Under the deposit agreement, the depositary will not distribute rights to holders of ADSs unless we indicate that we wish such rights to be made available to holders of ADSs and the distribution and sale of rights and the securities to which these rights relate are either exempt from registration under the Securities Act with respect to all holders of ADSs or are registered under the provisions of the Securities Act. The depositary will try to sell these undistributed rights to third parties, and may allow the rights to lapse. We may be unable to establish an exemption from registration under the Securities Act, and we are under no obligation to file a registration statement with respect to these rights or underlying securities or to endeavor to have a registration statement declared effective. Accordingly, holders of ADSs may be unable to participate in our rights offerings and may experience dilution of their holdings as a result.

***The depositary for the ADSs may give us a discretionary proxy to vote our shares of common stock underlying the ADSs to the extent holders of ADSs do not timely provide voting instructions to the depositary in accordance with the deposit agreement, which could adversely affect the interests of ADS holders.***

Under the deposit agreement for the ADSs, if we ask the depositary to solicit your instructions at least 30 days before the meeting date but the depositary does not receive voting instructions as to a question to be voted on from you by the specified date and we confirm to the depositary that

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•we wish to receive a discretionary proxy to vote uninstructed common shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•as of the instruction cutoff date we reasonably do not know of any substantial shareholder opposition to that question; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•that question is not materially adverse to the interests of our shareholders, then the depositary will consider you to have authorized and directed it to give a discretionary proxy to a person designated by us to vote the number of deposited common shares represented by your ADSs as to that question.

The effect of this discretionary proxy is that if holders do not provide voting instructions to the depositary in the manner required by the deposit agreement, we may acquire the right to vote the common shares underlying their ADSs. This may make it more difficult for ADS holders to influence the management of our company. Direct holders of our common shares are not subject to this discretionary proxy.

***ADS holders may not be entitled to a jury trial with respect to claims arising under the deposit agreement, which could result in less favorable outcomes to the plaintiff(s) in any such action.***

The deposit agreement governing the ADSs representing our shares of common stock provides that, to the fullest extent permitted by applicable law, holders and beneficial owners of ADSs irrevocably waive the right to a jury trial of any claim that they may have against us or the depositary arising from or relating to our shares of common stock, the ADSs or the deposit agreement, including any claim under the U.S. federal securities laws. The waiver continues to apply to claims that arise during the period when a holder holds the ADSs, even if the ADS holder subsequently withdraws the underlying shares of common stock. Purchasers of ADSs in secondary transactions will be subject to the jury trial waiver provision to the same extent as purchasers of the ADSs offered in our IPO. However, holders of ADSs will not be deemed, by agreeing to the terms of the deposit agreement, to have waived our or the depositary's compliance with U.S. federal securities laws and the rules and regulations promulgated thereunder. In fact, holders of

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ADSs cannot waive our or the depositary's compliance with U.S. federal securities laws and the rules and regulations promulgated thereunder.

If you or any other owners or holders of the ADSs bring a claim against us or the depositary in connection with matters arising under the deposit agreement or the ADSs, including claims under U.S. federal securities laws, you or such other owners or holders may not be entitled to a jury trial with respect to such claims, which may have the effect of limiting and discouraging lawsuits against us or the depositary, and may lead to increased costs to bring a claim. If a lawsuit is brought against us or the depositary under the deposit agreement, it may be heard only by a judge or justice of the applicable trial court, which would be conducted according to different civil procedures and may result in different outcomes than a trial by jury would have, including outcomes that could be less favorable to the plaintiff(s) in any such action.

If we or the depositary opposed a demand for jury trial relying on the above-mentioned jury trial waiver, it is up to the court to determine whether such waiver is enforceable considering the facts and circumstances of that case in accordance with the applicable state and federal law.

If this jury trial waiver provision is prohibited by applicable law, an action could nevertheless proceed under the terms of the deposit agreement with a jury trial. To our knowledge, the enforceability of a jury trial waiver under the federal securities laws has not been finally adjudicated by a federal court or by the United States Supreme Court. Nonetheless, we believe that a jury trial waiver provision is generally enforceable under the laws of the State of New York, which govern the deposit agreement, by a federal or state court in the City of New York. In determining whether to enforce a jury trial waiver provision, New York courts will consider whether the visibility of the jury trial waiver provision within the agreement is sufficiently prominent such that a party has knowingly waived any right to trial by jury. We believe that this is the case with respect to the deposit agreement and the ADSs. In addition, New York courts will not enforce a jury trial waiver provision in order to bar a viable setoff or counterclaim sounding in fraud or one which is based upon a creditor's negligence in failing to liquidate collateral upon a guarantor's demand, or in the case of an intentional tort claim, none of which we believe are applicable in the case of the deposit agreement or the ADSs. If holders or beneficial owners of ADSs bring a claim against us or the depositary relating to the matters arising under the deposit agreement or the ADSs, including claims under federal securities laws, such holder or beneficial owner may not have the right to a jury trial regarding such claims, which may limit and discourage lawsuits against us or the depositary. If a lawsuit is brought against us or the depositary according to the deposit agreement, it may be heard only by a judge or justice of the applicable trial court, which would be conducted according to different civil procedures and may have different outcomes compared to that of a jury trial, including results that could be less favorable to the plaintiff(s) in any such action.

Moreover, as the jury trial waiver relates to claims arising out of or relating to the ADSs or the deposit agreement, we believe that, as a matter of construction of the clause, the waiver would likely continue to apply to ADS holders who withdraw the shares of common stock from the ADS facility with respect to claims arising before the cancelation of the ADSs and the withdrawal of the shares of common stock, and the waiver would most likely not apply to ADS holders who subsequently withdraw the shares of common stock represented by ADSs from the ADS facility with respect to claims arising after the withdrawal. However, to our knowledge, there has been no case law on the applicability of the jury trial waiver to ADS holders who withdraw the shares of common stock represented by the ADSs from the ADS facility.

***We may amend the deposit agreement without consent from holders of ADSs, and, if such holders disagree with our amendments, their choices will be limited to selling the ADSs or withdrawing the underlying shares of our common stock.***

We may agree with the depositary to amend the deposit agreement without consent from holders of ADSs. If an amendment increases fees to be charged to ADS holders or prejudices a material right of ADS holders, it will not become effective until 30 days after the depositary notifies ADS holders of the amendment. At the time an amendment becomes effective, ADS holders are considered, by continuing to hold their ADSs, to have agreed to the amendment and to be bound by the amended deposit agreement. If holders of ADSs do not agree with an amendment to the deposit agreement, their choices will be limited to selling the ADSs or withdrawing the underlying shares of our common stock. No assurance can be given that a sale of ADSs could be made at a price satisfactory to the holder in such circumstances.

***We are incorporated in Japan, and it may be more difficult to enforce judgments obtained in courts outside Japan.***

We are incorporated in Japan as a joint stock corporation with limited liability. Most of our directors are non-U.S. residents, and a substantial portion of our assets and the personal assets of our directors and corporate officers are located outside the United States. As a result, when compared to a U.S. company, it may be more difficult for investors to effect service of process in the United States upon us or to enforce against us, our directors or corporate officers, judgments obtained in U.S. courts predicated upon civil liability provisions of the federal or state securities

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laws of the United States. or similar judgments obtained in other courts outside Japan. There is doubt as to the enforceability in Japanese courts, in original actions or in actions for enforcement of judgments of U.S. courts, of civil liabilities predicated solely upon the federal and state securities laws of the United States.

***Prior notification under the Foreign Exchange and Foreign Trade Act of Japan may be required in the case of acquisition by foreign investors of our shares.***

Because we are engaged in certain businesses designated by the Foreign Exchange and Foreign Trade Act of Japan (Act No. 228 of 1949, as amended), or the Foreign Exchange and Foreign Trade Act, and its related cabinet orders and ministerial ordinances, or collectively, the Foreign Exchange Regulations, such as the development of our PayPay app through which we collect certain types of personal information of one million or more people, if a foreign investor, as defined under the Foreign Exchange and Foreign Trade Act, intends to consummate an acquisition of shares of our common stock that constitutes an "inward direct investment," or IDI, under the Foreign Exchange Regulations, the foreign investor, in general, must file prior notification of such IDI with the Minister of Finance and any other competent minister, or the Ministers. IDI includes an acquisition by a foreign investor of one or more shares of our common stock. While certain exemptions from the prior notification requirements are provided for under the Foreign Exchange Regulations, foreign investors seeking to make any acquisition of shares of our common stock would not be eligible for such exemptions. If such prior notification is filed, the proposed acquisition may not be consummated until the prescribed screening period expires. In some cases, the Ministers may extend the screening period, and may recommend or order a modification or abandonment of such acquisition. In addition, if certain conditions including those prescribed in light of national security of Japan under the Foreign Exchange Regulations are met, the Ministers may order the disposal of the shares acquired or take other measures. Consequently, any foreign investor seeking to acquire shares of our common stock that constitutes an IDI may not consummate such acquisition on the expected timeframe, in accordance with an intended plan, or at all.

Additionally, if a foreign investor consents, at a general meeting of shareholders, to certain proposals having a material influence on our management such as the (i) election of such foreign investor or any of its related persons (as defined in the Foreign Exchange Regulations) as our directors or (ii) transfer or discontinuation of our business, such consent, subject to certain exemptions, also constitutes an "inward direct investment" requiring prior notification. If such prior notification is filed, such consent may not be given until the prescribed screening period expires. As a result, such foreign investors may have difficulties giving such consent in accordance with an intended plan, or at all.

Regarding the acquisition of ADSs, the Minister of Finance has expressed its view that, provided that it should be judged in accordance with the actual situation on a case-by-case basis, in general, in the case where a Japanese corporation that is not listed on any Japanese stock exchange, such as us, lists depositary receipts issued by a foreign depository bank backed by the shares of such Japanese corporation on any foreign stock exchange, it is considered that, while such a foreign depositary bank needs to submit a prior notification of IDI upon acquiring the shares, non-residents or foreign corporations that acquire such depositary receipts do not need to submit any prior notification of IDI because the foreign depositary bank that will acquire the shares of such Japanese corporation is required to submit a prior notification. However, there is no guarantee that the Minister of Finance will maintain this view in the future. If the Minister of Finance changes its view and requires non-residents or foreign corporations seeking to acquire the ADSs to submit a prior notification of IDI, foreign investors may not consummate such acquisition on the expected timeframe, in accordance with an intended plan, or at all. Also, foreign investors that intend to surrender the ADSs and thereby acquire the underlying shares of our common stock will be required to submit a prior notification to the Ministers.

The discussion above is not exhaustive of all possible foreign exchange controls considerations that may apply to a particular investor, and potential investors are advised to satisfy themselves as to the overall foreign exchange controls consequences of the acquisition, ownership and disposition of the ADSs, shares of our common stock or voting rights by consulting their own advisors. For a more detailed discussion on the requirements and procedures regarding the prior notifications under the Foreign Exchange Regulations, see "Item 10. Additional Information—D. Exchange controls."

***We may lose our foreign private issuer status in the future, which would then require us to comply with U.S. domestic reporting requirements and could impose additional regulatory burdens and costs on us.***

We currently qualify as a foreign private issuer under U.S. securities laws, which allows us to follow certain reduced reporting and governance requirements. See "—As a Japanese joint stock corporation, we are permitted to rely on exemptions from certain Nasdaq corporate governance standards applicable to public U.S. companies, as well as from certain disclosure requirements under the Exchange Act. This may afford less protection to holders of the ADSs than they would enjoy if we complied fully with the Nasdaq corporate governance listing standards." These and other accommodations available to us as a foreign private issuer help reduce our compliance burdens. However, U.S. securities regulations require us to reassess our foreign private issuer status annually, and we will lose foreign private

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issuer status if more than 50% of our voting shares are held by U.S. residents and we fail to meet additional requirements regarding the nationality of our officers or directors, the location of our assets, or the primary place of administration of our business.

If we cease to qualify as a foreign private issuer, we will become subject to the full reporting and regulatory regime applicable to U.S. domestic issuers. This change would require us, among other things, to file periodic reports with the SEC on the domestic forms (Form 10-K for annual reports and Form 10-Q for quarterly reports) with more detailed disclosures and on accelerated timelines, instead of the streamlined forms we are allowed to use as a foreign private issuer. We would also have to comply with U.S. federal proxy rules and regulations, including the requirement to distribute proxy statements for shareholder meetings and to comply with U.S. executive compensation disclosure standards, from which we are currently exempt. Furthermore, our directors, officers and principal shareholders would become subject to the reporting and short-swing profit recovery provisions of Section 16 of the Exchange Act, which would require them to file reports disclosing their ownership and transactions in our stock and could expose them to liability for short-swing profits. We may also no longer be able to rely on home-country governance practices.

We would likely also need to transition our financial reporting to comply with U.S. accounting principles and standards. As a foreign private issuer, we are permitted to report our financial statements in accordance with IFRS or other home-country accounting standards, but if we lose foreign private issuer-status we would be required to prepare our financial statements in accordance with U.S. GAAP for all historical and future periods. Adopting U.S. GAAP could be costly and time-consuming, potentially requiring us to adjust our accounting processes, systems, and personnel to address the differences between IFRS and U.S. GAAP.

In general, complying with the U.S. domestic issuer requirements, including the more stringent reporting, disclosure and governance rules, is expected to significantly increase our legal, accounting and administrative costs. We may need to hire additional finance and legal personnel, upgrade our systems, and engage outside advisors to meet these new obligations. Management's attention may also be diverted from other business matters to focus on compliance with the additional regulatory requirements. These changes could materially and adversely affect our business, financial condition and results of operations, by increasing our expenses and regulatory risks and by imposing constraints on how we manage our corporate affairs.

**Item 4. Information on the Company**

 **A History and development of the company**

PayPay Corporation is our legal and commercial name. We were incorporated in Japan on June 15, 2018 under the corporate name Pay Corporation and changed our corporate name to PayPay Corporation in July 2018. We are a joint stock corporation, or kabushiki kaisha, incorporated under the laws of Japan, including the Companies Act of Japan. Our corporate existence is indefinite unless dissolved in accordance with our articles of incorporation or applicable Japanese law.

Our principal executive offices are located at Yotsuya Tower, 1-6-1 Yotsuya, Shinjuku-ku, Tokyo 160-0004, Japan, and our telephone number is +81-3-6885-8181. Our agent for service of process in the United States is Cogency Global Inc., located at 122 East 42nd Street, 18th Floor, New York, NY 10168.

The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at http://www.sec.gov. Our main website is www.paypay.ne.jp, and the information contained on, or that can be accessed through, our website is not a part of, or incorporated by reference into, this Annual Report.

**Important Events in the Development of Our Business**

The following is a summary of the important events in the development of our business from April 1, 2025 through the latest practicable date:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•In April 2025, we acquired additional shares in PayPay Securities Corporation from SoftBank Corp. and LY Corporation and subscribed for new shares issued by PayPay Securities Corporation through a third-party allotment, making PayPay Securities Corporation our consolidated subsidiary. Upon completion of the transactions, we held 75.2% of the shares of PayPay Securities Corporation, while Mizuho Securities Co., Ltd. held 24.8%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•In April 2025, we completed the acquisition of common shares and non-voting Class A preferred shares of PayPay Bank Corporation from Z Financial Corporation(currently LY Corporation), and common shares of PayPay Bank Corporation from Mitsui Sumitomo Insurance Co., Ltd. Upon the conversion of the non-voting Class A preferred shares of PayPay Bank Corporation into common shares, effective April 28,

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2025, we held 75.5% of the common shares of PayPay Bank Corporation, making PayPay Bank Corporation our consolidated subsidiary. In September 2025, we acquired 40% of the shares of Binance Japan Inc., a cryptocurrency exchange operator, making it an equity-method affiliate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•In November 2025, we effected a stock split of one share into 200 shares. The stock split did not affect our total equity or the proportional interests of our shareholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•In March 2026, we closed our initial public offering of ADSs representing our common shares. Our ADSs began trading on the Nasdaq Global Select Market under the symbol "PAYP" on March 12, 2026, U.S. time. On March 27, 2026, U.S. time, the underwriters fully exercised their option to purchase additional ADSs. This offering included a public offering without listing in Japan of the ADSs (the "POWL").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•In June 2026, we entered into a share purchase agreement with T&D Holdings, Inc. to acquire shares representing 70.2% of the voting rights of T&D Financial Life Insurance Company, with the aim of adding life insurance to our financial services offerings. The acquisition is expected to close in October 2027.

**Principal Capital Expenditures and Divestitures**

Since April 1, 2023, our principal capital expenditures have consisted primarily of software development and other investments to support our payment and financial services platform. In our consolidated statements of cash flows, these capital expenditures are recorded as purchases of property and equipment and purchases of intangible assets (largely attributable to customer-facing tangible and intangible assets such as capitalized system development costs and physical credit cards). For the fiscal years ended March 31, 2024, 2025, and 2026, Purchases of property and equipment were ¥4,584 million, ¥4,822 million, and ¥6,369 million, respectively, while Purchases of intangible assets were ¥17,911 million, ¥17,264 million, and ¥17,823 million, respectively.

During the same period, our principal investments in interests in other companies were as follows: in April 2023, we invested ¥6,597 million in PayPay Securities Corporation through a third-party allotment; in November 2024, we acquired Credit Engine Group, Inc. (currently Credit Engine, Inc.), with cash outflows of ¥5,759 million; in April 2025, we acquired additional interests in, and made related investments in, PayPay Securities Corporation and PayPay Bank Corporation for aggregate consideration of ¥130,185 million; and in September 2025, we acquired a 40.0% interest in Binance Japan Inc., with cash outflows for the acquisition of investments accounted for using the equity method of ¥11,655 million.

We have not made any principal divestitures during this period. From April 1, 2026 through the date of this Annual Report, we have not made any principal capital expenditures or divestitures, other than ordinary-course capital expenditures.

**Principal Capital Expenditures and Divestitures Currently in Progress**

As of the date of this Annual Report, our principal capital expenditures currently in progress include the following:

We are evaluating a potential rollout of a digital wallet in the United States through a new company to be established under our leadership. This investment would be located outside Japan, in the United States, and is expected to be financed through a combination of our internal funds and external contributions from Visa, although the scope, timing and amount of any capital expenditures have not yet been finalized.

We have also entered into a share purchase agreement to acquire shares representing 70.2% of the voting rights of T&D Financial Life Insurance Company from T&D Holdings, Inc. The proposed acquisition is a domestic investment in Japan and is expected to be financed with cash on hand. The estimated total acquisition cost, including the currently expected acquisition price for the shares and acquisition-related expenses, is ¥134,338 million, although the final acquisition price may differ. The acquisition is expected to close on October 1, 2027, subject to customary closing conditions, including required regulatory approvals and other conditions precedent.

 **B Business overview**

PayPay is a leading FinTech company in Japan that operates a digital finance platform centered on payments, offering a range of payment and financial services to users and merchants. Our platform is built on a two-sided network connecting tens of millions of users and millions of merchants, and provides code-based payment, credit card, banking, investments, and other related services which are accessible primarily through smartphones.

Our payment services are integrated into the daily lives of our users, supporting a broad range of transaction scenarios and contributing to user engagement. We also provide merchants with promotional tools such as PayPay Coupons, PayPay Stamp Cards and PayPay Funding solutions designed to enhance retail productivity. As of March

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31, 2026, we had approximately 73 million PayPay registered users, accounting for 78% of smartphone users in Japan <sup>(1)</sup>.

Our financial services are still relatively new, and were established through the acquisitions of PayPay Bank Corporation and PayPay Securities Corporation in April 2025. As of March 31, 2026, the number of accounts at PayPay Bank Corporation and PayPay Securities Corporation were 9.98 million and 1.73 million, respectively. Our offerings include savings and borrowings services through PayPay Bank Corporation and investment services through PayPay Securities Corporation.

Our business consists of two domains:

<u>Financial service business:</u> Our financial service business, anchored by PayPay Bank Corporation and PayPay Securities Corporation, complements our payment platform by offering seamless, app-based banking and investing services. As of March 31, 2026, the number of PayPay Bank Deposit Accounts reached approximately 10 million, and the Balance of Deposits grew 23% year-over-year to ¥2.3 trillion. Building on this solid funding base, the Balance of Loans including card loans, business loans and mortgages reached ¥1.2 trillion, up 34% year-over-year primarily driven by growth in mortgage loans. In April 2026, PayPay Bank Corporation launched a data lending service exclusively for PayPay's merchants. This is an invite-only lending which provides financing of up to ¥10 million, and the terms are presented in advance based on the daily payment transaction data of PayPay merchants. This allows merchants to finance as early as the day of application via smartphone. PayPay Securities Corporation serves a broad base of primarily first-time investors through user-friendly features, such as micro-investing via "PayPay Invest" which allows users to begin investing with as little as ¥100. The feature is often used as a sub-account for casual securities investment and has become a gateway for users to experience investing in a simpler and more accessible format. In March 2026, PayPay Corporation facilitated the domestic retail offering of PayPay's IPO shares (PayPay ADS) through PayPay Securities, boosting PayPay Securities brokerage accounts to 1.73 million as of March 31, 2026, representing a year-over-year increase of 0.36 million accounts. We seek to further integrate our financial services offerings with the PayPay platform and provide users with access to payment, banking, lending and investment services within a single mobile experience.

We have expanded our revenue base through growth in payment transaction volumes and increased adoption of financial services by existing users. Cross-selling between our payment and financial service businesses has contributed to revenue diversification across the platform.

(1)Calculated by using 78.9% from the Ministry of Internal Affairs and Communications' "2025 Survey on Communication Usage Trends (announced May 29, 2026)," Materials 2 "Mobile Device Ownership (Individual)" and "Smartphone Ownership (Individual)," applied to the Japanese population aged five and over as of April 1, 2026, from the Ministry of Internal Affairs and Communications and Statistics Bureau's "Population Estimates (estimates as of April 2026 (Reiwa 8))."

(2)Net additions are calculated based on the year-on-year increase in the number of active cards or contracts as of December 31, 2025. Figures are derived from publicly available financial results and disclosure materials of three peer companies for the period ended December 31, 2025.

**Market Opportunity**

Japan has historically been a cash-centric economy, with cash accounted for approximately ¥173 trillion, or 70.2%, of domestic household final consumption payments in 2018 calculated based on statistics released by the Ministry of Economy, Trade and Industry (the "METI") on March 31, 2026. Although cashless payment adoption has increased in recent years, the Japanese market continues to present significant opportunities for digital payment and financial services providers. According to a survey by the METI, the cashless payment ratio in 2025 reached 58.0% compared to approximately 29.8% in 2018. The Japanese government has also introduced various policy initiatives

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intended to promote cashless payments and digital financial services and in January 2026, it reiterated its long-term policy objective of increasing Japan's cashless payment ratio to 80%, including an interim target of 65% by year 2030.

Our shares in the code-based payments are as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We accounted for 65% of code-based payment gross merchandise value in Japan in CY2025 <sup>(1)</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Our code-based payment accounted for 20% of the total of the approximately 43.5 billion cashless transactions completed in Japan in 2025 <sup>(2)</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We had approximately 523 million transfers, accounting for 98% of code-based P2P money transfers in CY 2025 <sup>(3)</sup>

Opportunities for digitalization also extend beyond payments into banking and investment-related services. According to the Bank of Japan's report entitled "Flow of Funds", Japan's household financial assets totaled ¥2,351 trillion as of the end of December 2025.

According to the Japanese Bankers Association and public disclosures by Japan Post Bank, total deposits held by Japanese banks amounted to approximately ¥1,202 trillion as of March 31, 2026. Of this amount, deposits held by Japan's internet-only banks totaled approximately ¥44 trillion as of March 31, 2026, according to company disclosures.

According to the Japan Financial Services Association and the Bank of Japan, unsecured consumer loans, including credit card loans, card loans and personal loans, totaled approximately ¥10.2 trillion as of March 31, 2026.

Japan is also shifting "from savings to investment." This is being reinforced by the government's expansion of the NISA program, a Japanese government tax-free stock investment program for individuals, which has contributed to record growth in individual investment account openings. According to the Japan Securities Dealers Association, assets under management across Japanese securities firms totaled approximately ¥431 trillion as of March 31, 2025.

These developments reflect the continued expansion of digital payment, banking and investment services in Japan and provide opportunities for companies offering integrated digital financial services platforms.

(1)Calculated based on the PayPay App GMV divided by the GMV for code-based payments from the Payments Japan Association's "Code-based Payment Usage Trends Survey" (Released March 30, 2026).

(2)Calculated by summing the number of credit card contracts from "Monthly Survey: Credit Card Activity Survey," a document released by the Japan Credit Association; debit card and electronic money transaction counts from "Payment Trends January 2026," a document released by the Bank of Japan; and code-based payment transaction counts from "Code-based Payment Usage Trends Survey," a document released by the Payments Japan Association on March 30, 2026. PayPay's share is calculated from its transactions within the PayPay App for CY2025.

(3)The total number of transactions made using PayPay Balance's "Send and Receive"(= P2P money transfers) feature in CY2025. PayPay Balance includes PayPay Money, PayPay Money (Salary), and PayPay Money Lite.

**Our Competitive Advantages**

***Integrated Digital Finance Platform Supported by a Proprietary Two-Sided Network***

We operate an integrated digital finance platform serving users and merchants through a two-sided network connecting tens of millions of users and millions of merchants. Our platform includes payment, banking, credit card and investment services that are accessible primarily through smartphones.

Our payment service forms the foundation of our platform and supports user and merchant engagement through network effects. As our user base and payment usage increase, additional merchants are incentivized to adopt PayPay, which expands the number of payment acceptance locations available to users. Growth in users and merchants has contributed to the expansion of both sides of our network.

In addition, because of our two-sided network, we are able to process payments with reduced reliance on traditional third-party payment processors, external acquirers or brand / network providers. This structure allows us to retain a share of payment economics and minimize settlement outflows.

Our strong network effects have also driven the expansion of our financial services offerings. Greater engagement with our payment service creates opportunities to promote our internet banking and securities brokerage services, while generating cross-service synergies—users who adopt multiple services across our ecosystem exhibit higher average payment volume per user and stronger long-term engagement.

As our ecosystem has expanded, we have developed an integrated digital finance platform designed to support a broad range of financial activities for users and merchants. For example, users can receive their salary through PayPay Bank Corporation, make everyday purchases using PayPay code-based payments and invest through PayPay

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Securities Corporation. Merchants may also use our platform for payment collection and banking-related services such as payroll and financing.

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**Two-Sided Network**

**Simple Transaction Structure which Translates into Strategic Pricing**

![img261977339_0.jpg](img261977339_0.jpg)

1. PayPay registered users as of end of December 2025.

2. Solid arrows represent direct payments (i.e. payments not sent via a PSP), which are limited to PayPay app payments via MPM (Merchant-Presented Mode) and payments made with PayPay Balance.

3. The standard rate for small and medium-sized PayPay merchants.

4. Excerpt from the model case of "Small and Medium-sized Merchants with Average-priced transactions (Off-us Transactions)," from the "Study Group on Promoting a Better Environment for the Further Adoption of Cashless Payments by Small and Medium-Sized Businesses," 3rd Meeting Materials, published by the Ministry of Economy, Trade and Industry (August 27, 2021).

***Broad User and Merchant Offering***

Our platform provides payment and financial services to both users and merchants.

For users, our platform delivers a seamless financial experience built around smartphone-based payments. Since the launch of our service, we have expanded the payment use cases and services available through our platform, including code-based payments, credit card payments, online payments, bill payments and P2P money transfers, banking and investment through a single mobile application.

For merchants, we provide compelling services centered on low-friction adoption and high-impact tools for business growth. Onboarding is fast and cost-efficient, with no upfront installation fees and competitively priced payment service charges level. We also offer digital marketing tools—such as in-app coupons, promotions, and loyalty programs—designed to encourage user spending. Additional solutions like PayPay for Business (our merchant-facing platform that provides onboarding, sales tracking and marketing campaign tools) streamlined settlement and reporting features, and data analytics tools further enable merchants to improve operational efficiency.

***Penetration of eKYC within our User Base***

The number of eKYC (electronic Know-Your-Customer)-verified users surpassed 40 million as of the end of March 2026, representing more than half of PayPay's 73 million registered users. eKYC is an important component of prevention of fraudulent activities and reinforcing Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) measures. Furthermore, eKYC acts as a critical enabler for seamless cross-use across our expanding financial ecosystem. By leveraging verified identity information, the friction typically associated with onboarding for new services—such as bank account opening or securities brokerage—is reduced, offering users a streamlined and frictionless experience.

Our eKYC infrastructure also supports cross-use across our financial services ecosystem by simplifying onboarding for banking, securities brokerage and other financial services. We have implemented a unified eKYC that allows users who have already completed identity verification in PayPay to bypass part of the identity verification process when accessing services provided by PayPay Bank Corporation and PayPay Securities Corporation. For example, users can open a PayPay Bank account in just two steps, compared to the standard of seven steps through traditional channels. These frictionless entry points eliminate redundancies such as repetitive document uploads and identity verification processes, providing us with an advantage to cross sell our services on the platform.

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Our unified identity verification infrastructure reduces the need for repeated document submission and verification procedures across services and supports cross-service adoption within our ecosystem.

***User Experience and Platform Design***

Our payment, banking and investment services are available through mobile applications and integrated user interfaces. We continuously refine our UI/UX to deliver an intuitive, responsive and seamless app experience, utilizing data from our large user base and applying our technology. Improving our UI/UX enables us to deepen user engagement, and the large user base we have cultivated through our PayPay app can be guided to adopt additional services throughout our broader ecosystem.

Users can access a range of services within the PayPay application and key utilities such as P2P money transfers, real-time balance tracking, and payment notifications enhance the day-to-day usability of our ecosystem, while our app-based integration of financial products allows users to access deposits, loans, and investment services without leaving the PayPay environment.

Our platform also supports multiple financial and non-financial mini apps within the PayPay environment, enabling users to access multiple services within a single digital environment, while still allowing users who wish to use dedicated apps with advanced features for PayPay Bank services and PayPay Securities services.

![img261977339_1.jpg](img261977339_1.jpg)

***Technology Infrastructure Supporting Continuous Innovation and Growth***

Our payment business is supported by a vertically integrated and horizontally scalable technology platform that supports high performance, low-cost operations at scale. Our infrastructure utilizes a cloud-native and microservice-based architecture that enables us to handle vast transaction volumes with speed and reliability, while delivering a flexible foundation for rapid product development, personalization and risk management, and horizontal scalability that enables feature expansion supporting continued business growth.

We also maintain in-house engineering and technology development capabilities. As of March 31, 2026, approximately 48% of the combined employees of PayPay Corporation and PayPay India Private Limited were engaged in product and technology development activities, representing employees across 48 countries.

We are accelerating product development through the adoption of generative AI, particularly in coding workflows. We are actively expanding AI-assisted tooling across additional functions to further enhance speed, efficiency, and innovation in our product development. For example, we are leveraging proprietary AI to accumulate and refine product development data over time, enabling further differentiation in tooling optimization and code quality.

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This technology infrastructure supports transaction processing, product development and platform expansion across our ecosystem.

***Effective Security and Fraud Prevention***

We have established a reputation for cybersecurity and fraud prevention, supported by a layered defense architecture, proprietary risk controls, and continuous investment in system integrity. Our platform is designed to meet the highest standards of security while maintaining the seamless user experience expected in modern digital finance. In addition to detecting transaction-level fraud, our system incorporates advanced anti-money laundering protocols and behavioral risk modeling to prevent misuse by bad actors, including impersonation and unauthorized use.

**Our Products and Services** 

We provide payment and financial services to users and merchants through our PayPay ecosystem. Our offerings include code-based payments, credit and debit payments, revolving, installment payment and cash advances, internet banking, security brokerage, PayPay Point investment-related services and loan management services. In addition, we offer other value-added services for users and enterprises such as insurance services and marketing services that merchants have the option to subscribe to.

***Payment Business***

*PayPay Settlement Services*

Our payment settlement service offered through our PayPay code-based payment app is core to our financial platform. The app is free to download, and users can access our code-based payment feature with a simple registration process. Users can make payments at participating merchant stores by launching the PayPay app, showing their app-generated code and having the merchant scan it or by scanning the merchant's PayPay code.

Merchants can introduce our payment settlement services with a thorough screening process and will receive a welcome package tailored to their use-cases after approval. We offer customer service support for our merchants 24 hours a day and 365 days a year. Merchants can adopt PayPay's payment settlement service without upfront hardware costs by using Merchant-Presented Mode, a printed payment format where a user uses their smartphone to read a QR-code presented by the merchant.

*PayPay Balance*

PayPay Balance is a pre-loaded balance that users can make payments through the PayPay application. Users can fund their account from their smartphone in several ways - by linking their bank account or their PayPay Card account, through Seven Bank or Lawson Bank ATMs, P2P money transfer, or through SoftBank Corp.'s cellphone billing. In addition, users can charge their balance with sales proceeds received through Yahoo! JAPAN Auction and Yahoo! JAPAN Flea Market. Furthermore, users can also transfer withdrawals from investment-related services such as PayPay Invest, a mini-app within our PayPay app, LINE BITMAX, a cryptocurrency asset trading service operated by LINE Xenesis Corporation , and Binance Japan, a joint venture between of Binance and PayPay, to PayPay Balance.. We do not handle crypto assets or provide crypto-related services, and our role is limited solely to yen transfer connectivity.

PayPay Balance can also be used for digital wage payments through PayPay Payroll, donations to certain non-profit organizations and other permitted use cases.

*PayPay Credit*

PayPay Credit allows users of our PayPay app who have been approved for PayPay Card to make code-based payments on the app, leveraging credit extended by PayPay. All payments using PayPay Credit are accumulated each month, where users' bank accounts registered to their PayPay Card are debited in the following month as a lump sum if the user chooses to do so. Users also have the option to cover the prior month's payments made with revolving credit that we extend to the user.

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*Payments Using Linked Services*

In addition to PayPay Balance and PayPay Credit, users can also utilize our PayPay code-based payments with our merchants by linking their credit cards to the PayPay app. Users can create a credit card-linked payment option by adding credit cards issued by PayPay Card Corporation or other credit card companies to the PayPay app. We limit transactions using linked credit cards issued by other credit card companies to a maximum total of ¥20,000 in a single 24-hour period and ¥50,000 in a single 30-day period. Transactions using linked credit cards issued by other credit card companies do not accrue PayPay Points.

*Payments Using PayPay Bank App (PayPay Debit)*

Using our Debit Payment Settlement Services, our PayPay Bank accountholders are able to make payments with merchants that accept PayPay code-based payments directly from their PayPay Bank yen-denominated deposit accounts using an app operated by PayPay Bank Corporation.

*Utility Bill and Tax Payments*

We have partnered with major Japanese public and private electricity, gas and water companies, as well as cellphone carriers and insurance companies, to further expand our reach of companies where users can use PayPay as a payment option. Users can pay for utilities by scanning the payment barcodes or QR codes on bills issued by utility companies we have partnered with and use their PayPay Balance or PayPay Credit to make payments. We have also introduced compatibility with online bills, where users can receive notifications that a bill is due and pay the bill entirely within the app. In addition, we have partnered with government agencies in various prefectures across Japan to enable users to make resident tax, property tax, automobile tax, or national insurance tax payments using PayPay in participating prefectures.

Furthermore, in connection with the tax donation program in Japan called *Furusato Nozei*, where taxpayers have the option to redirect a certain portion of their yearly residence tax to local municipalities and in turn receive rewards from donee municipalities, some municipalities issue rewards in the form of *PayPay Gift Vouchers* when donations are performed through our partner Satofull Co., Ltd., a wholly-owned subsidiary of SoftBank Corp. These vouchers can be used across a variety of local stores designated by the issuing municipalities. See "—Sales and Marketing."

*Overseas Payment Mode*

Our eKYC verified users can use the PayPay app overseas. In September 2025, we launched overseas payment mode in South Korea, enabling PayPay users to pay at stores affiliated with Alipay+ and ZeroPay (a payment service introduced by the Seoul Metropolitan Government) and to make P2P payments while in South Korea. In April 2026, we launched the same service in Taiwan, allowing users to utilize key PayPay functions such as balance top-ups and payment at stores affiliated with HIVEX®.

*Credit Payment Settlement Services*

PayPay Card Corporation issues PayPay Card and PayPay Card Gold under the JCB, Visa and Mastercard brands. These cards provide credit card payment functionality, contactless payment capability, instant transaction history through the PayPay app, and PayPay Point rewards. Our current main offering consists of the following two types of PayPay Cards:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•*PayPay Card*. Our basic-level PayPay Card has no annual fee. Cardholders earn PayPay Points equivalent to 1% of total amounts charged on the card, and up to an additional 0.5% of the total amounts charged if users make 30 or more purchases of at least ¥200 each and spend at least ¥100,000 in total over a particular month. This additional reward is one of the benefits of a customer retention program called PayPay STEP. Additional cards can be issued to family members upon the request of cardholders, and individual cardholders can request more than one card to be issued for them. SoftBank Points, which are issued by SoftBank Corp. and convertible into PayPay Points, of up to 1.5% of the total amounts charged can also be earned when cardholders use this card to pay their cellphone bills with SoftBank Corp.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•*PayPay Card Gold*. Our PayPay Card Gold has an annual fee of ¥11,000 (including consumption tax). Cardholders can maximize their point earnings, with PayPay Points from 1.5% of total amounts charged up to 2.0% of total amounts charged on the card if users make 30 or more than 30 purchases of at least ¥200 each and spend at least ¥100,000 in total over a particular month. This additional 0.5% reward is one of the benefits of PayPay STEP. In addition to overseas and domestic travel insurance benefits and access to domestic airport lounges, PayPay Card Gold cardholders can earn SoftBank Points of up to 10% of total amounts charged to pay cellphone bills with SoftBank Corp. as well as time-limited PayPay Points (a special type of PayPay Points that expire after a set period of time) of an additional up to 2% of total amounts charged for purchases made via Yahoo! JAPAN Shopping or at LOHACO. Additional cards can be issued to family members upon the request of cardholders.

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*Revolving and Installment Payment Options*

PayPay Card Corporation also offers revolving payment options, installment payment options and cash advances to eligible cardholders. Under our revolving payment option, we have two options, *Marugoto Flat Revo* and *Koredake Skip Revo*. After a cardholder makes purchases, the cardholder selects to automatically convert all of their credit card purchases (*Marugoto Flat Revo*) or selectively convert specific purchases (*Koredake Skip Revo*) into a revolving payment with a commission rate of 18% per annum. Our revolving payment option is available for purchases made using PayPay Credit as well. Although our installment payment option is only available for payments made using PayPay Card with merchants that have accepted installment payments as a payment option, our Pay in Installments Later (*Ato Kara Bunkatsu*) service allows cardholders to convert payments they had elected to pay in full at the time of purchase to an installment payment from the PayPay Card app or the mini-app.

*Cash Advances*

We also offer cash advances to cardholders, who can apply for cash advances on the PayPay app or via an internet browser, whereby we allow approved cardholders to withdraw cash from ATMs or transfer loaned funds to their bank accounts. The interest rate is currently 18.0% per annum and 15.0% per annum for additional advances when the total outstanding amount of cash advances extended to a cardholder totals ¥1 million or more.

*Acquiring Services*

On the merchant side, we also operate a credit card merchant acquiring business, through which we offer processing services for merchants to accept credit card payments. The majority of our merchants that utilize this service were grandfathered in through referrals from our payment settlement services, LY Corporation (previously Yahoo Japan Corporation) and SB Payment Service Corporation.

***Financial Service Business***

*Internet Banking Services*

PayPay Bank Corporation provides internet banking services to individual and corporate customers. Its principal products and services include deposit accounts, domestic and foreign exchange transactions, debit card services, mortgage loans, consumer loans, business loans and securities intermediary services. Customers can open accounts digitally and access transfers, deposits, bill payments, balance inquiries and other banking services online. PayPay Bank accounts are integrated with the PayPay application, enabling transfers between PayPay Balance and PayPay Bank accounts. We also provide integration between PayPay Bank accounts and PayPay app, enabling instant transfers between PayPay Balance and PayPay Bank accounts without fees.

Accountholders receive a PayPay Bank Visa Debit Card, which can be used Visa-affiliated merchants and ATMs in Japan and overseas. We also provide ATM access and cardless cash withdrawal functionality through partnerships with major ATM networks. Customers can withdraw funds using their PayPay Bank Visa Debit Card or conduct cardless cash withdrawals using the Smartphone ATM feature. When accountholders are abroad, they can also withdraw cash at Visa or PLUS network ATMs worldwide.

*Deposit Accounts and Remittances*

We offer a full range of deposit account services spanning yen-denominated products including ordinary deposits and time deposits and foreign currency products including ordinary deposits and time deposits denominated in nine different currencies. As an internet bank, PayPay Bank Corporation does not have the high fixed costs associated with maintaining a network of physical branches, which enables us to offer competitively-priced deposit interest rates. We also refer our accountholders to PayForex, a service offered by Queen Bee Capital Co., Ltd., which offers our accountholders the ability to send and receive remittances to and from over 200 countries with no transaction fees.

*Lending Services*

PayPay Bank Corporation offers lending products to individual and corporate customers, including mortgage loans, consumer loans, and business loans.

Mortgage loans, durations from 1 to 50 years, amount from anywhere between ¥5 million and ¥200 million to home buyers through the PayPay Bank app or our website, enabling borrowers to submit the necessary paperwork from their smartphones. As of May 2026, variable rate starts from 0.980% yearly. Our mortgage offering includes the followings:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•"Pair loan" product which enables two borrowers to co-sign for a mortgage, with the loan forgiven in the event that one of the two passes away before the end of the term.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We offer SoftBank users a 0.910% loan benefit for loan refinancing. Additionally if the SoftBank users pay for smartphone, internet and electricity provided by SoftBank Corporation, they will receive a benefit of 0.850% variable rate

Consumer loans are available to customers that have an ordinary savings account and can be borrowed through PayPay Bank app or by participating ATMs 24 hours a day, 365 days a year. Interest rates vary depending on the borrowing amount, ranging from 1.59% to 18.0% per annum..

In addition, we offer business loans for corporations and sole proprietors. These include business loan of up to ¥10 million, with competitive interest rates ranging from 1.8% to 13.8% per annum as well as loans guaranteed by credit guarantee corporations of up to ¥80 million with interest rates ranging from 1.4% to 3.4% per annum. In April 2026, PayPay Bank Corporation launched a data lending service exclusively for PayPay's merchants. This invite-only financing service provides loans of up to ¥10 million, with lending terms determined based on merchants' daily payment transaction data. This allows merchants to finance as early as the application date via smartphone.

*Foreign Exchange Transaction Services*

We also offer a standalone app for foreign exchange transactions to accountholders, allowing trades for 24 currency pairs. The app also contains features to help our users such as stop loss features and rate alerts. The app offers two types of accounts, the general type and the beginner type. The general type allows accountholders to conduct leveraged trades, while the beginner type does not permit leveraged trading. There are no transaction fees charged for foreign exchange transactions beyond the spread charged.

*Digital Securities Services*

We offer a wide range of digital securities intermediary services through PayPay Securities Corporation, a financial services provider focused on digital securities brokerage services. We provide a platform for users to buy and sell mutual funds, stocks and ETFs where trades can be made using PayPay Invest, a mini app integrated into our main PayPay app, built for first-time investors. We also operate a standalone app that offers additional and more advanced investment options for our more experienced users allowing for larger amounts to be invested. In addition, we also offer a platform for trading contracts for difference, or CFDs.

*App-Based Investment Services*

We offer simplified investment services on PayPay app as mini apps. Through PPSC Investment Services Co., Ltd., a wholly owned subsidiary of PayPay Securities Corporation, we offer a PayPay Point investment service that allows users to utilize over ten different simulated asset management courses to manage their PayPay Points. Users can utilize this service starting from just one PayPay Point. Users can monitor, invest and withdraw their managed PayPay Points through the PayPay Point management screen in the PayPay app.

We also offer PayPay Securities (formerly PayPay Invest) a mini app that serves as an entry point into financial markets. PayPay users who have completed eKYC can open an account using PayPay Invest in as little as three minutes. Users can open both regular investment accounts as well as NISAs using the mini app, starting with a minimum of ¥100 using PayPay Money. Users can use PayPay Money to make investments, as well as PayPay Points and available funds in a PayPay Bank account. Users can also charge the invested amount to their PayPay Card or withdraw funds from PayPay Invest as PayPay Money and transfer them into their PayPay Balance without a transaction fee. Users can also invest in U.S. and Japanese stocks and ETFs, as well as in investment trusts, using PayPay Securities. We allow users to trade U.S. stocks and ETFs on a continuous basis, while Japanese stocks and ETFs can be traded during the Tokyo Stock Exchange's operating hours, with the option for flexible trading by scheduling recurring daily, weekly and monthly investments. Securities purchased using PayPay Invest are purchased at an "offered price" by users, which is calculated by adding a spread of 0.5% to the "unit price" provided to us by our information provider

*PayPay Securities App*

The PayPay Securities app is available to any investor, offering a broader set of investment products and trading functionality compared to PayPay Invest. Users of the PayPay Securities app can invest in U.S. stocks and ETFs, Japanese stocks and ETFs as well as mutual funds, just like PayPay Invest, in addition to Japanese REITs with a minimum investment amount of ¥1,000. Accounts can be funded with PayPay Money as well as through bank transfers from designated financial institutions. The app provides enhanced features such as reservation orders for Japanese equities outside of the Tokyo Stock Exchange operating hours, as well as the "*Oitamama Kaitsuke*" feature, which enables users to purchase securities using their deposits with designated financial institutions, including with PayPay Bank Corporation, without having to transfer any funds or pay transfer fees.

*Automated Investing Services*

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We offer certain automated investing solutions in order to make investment as convenient and easy as possible for new investors. We offer two automated investment services tailored to different needs:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•*PayPay Invest Easy*. *PayPay Invest Easy* is a simplified investment service integrated as a mini app within the PayPay app, which allows investors to invest on a recurring basis in one of two index funds using PayPay Money, PayPay Points or their credit card, starting at ¥500 per day. This service is also compatible with NISA, offering tax benefits to users.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•*Robot Accumulation Plan. Robot Accumulation Plan* is a standalone app, which facilitates automatic, recurring investments in U.S. equities, starting at ¥1,000. This service is not compatible with NISA.

*CFD Trading Services*

Through PayPay Securities Corporation, we offer CFD trading services, a type of financial agreement which enables traders to trade on the direction of securities in the very short term. Our services enable customers to engage in leveraged trading using two different standalone apps, the 10x CFD app and the Japanese Equity CFD app. The 10x CFD app allows trading in stock index futures, such as the Nikkei 225 and the E-mini S&P 500, with leverage up to ten times the deposited margin. The Japanese Equity CFD app allows customers to trade in selected Tokyo Stock Exchange-listed equities during regular exchange hours with leverage up to five times the deposited margin amount. Both of these apps offer real-time pricing, margin monitoring and loss-cut functionality while participation in our CFD trading services requires a deposit margin of over ¥10,000.

*Loan Management Services Through Credit Engine*

In November 2024, we acquired Credit Engine Group, Inc. (currently Credit Engine, Inc.), making it our wholly-owned subsidiary. Credit Engine Group, Inc. provides online loan management systems that aid in the digitalization of lending and debt collection operations as well as SaaS lending products for small and medium-sized businesses and automated calls and messaging for debt collection.

***Other Value-Added Services***

*To Users*

We refer our users to PayPay Insurance Service Corporation, a PayPay-branded insurance agency. Our PayPay app provides users with access to a mini app operated by PayPay Insurance Service Corporation, through which users can apply for an array of insurance policies offered by PayPay Insurance Service Corporation.

PayPay Insurance Service Corporation is a wholly-owned subsidiary of LY Corporation. PayPay Insurance Service Corporation was formerly known as Wise Insurance and adopted the "PayPay" brand in February 2021. PayPay Insurance Service Corporation is not a subsidiary or affiliate of ours and we have no profit-sharing arrangement with them.

*To Merchants*

Our platform for merchants offers a user-friendly dashboard from which merchants can easily manage all of their PayPay transactions.

We offer our *PayPay My Store* service on our platform for merchants without a subscription fee. Through *PayPay My Store*, our merchants are able to create and publish a webpage with their business information within our PayPay app. On their personalized webpage, merchants can add information such as their store address and hours of operation as well as pictures of their shops and the products they sell. Event and promotional campaign information can also be posted, functioning as a marketing tool. Merchant webpages have the ability to be followed by users, who can give ratings and reviews enabling merchants to monitor and analyze users' shopping behavior.

We also offer the *PayPay My Store Lite Plan* to our merchants that wish to expand their marketing to our users and/or wish to enjoy a discount on settlement fees. Merchants can sign-up to this service for a fee of just ¥1,980 and pay a monthly per store subscription fee of the same ¥1,980 for the *PayPay My Store Lite Plan*. Merchants that subscribe to our *PayPay My Store Lite Plan* receive a discounted settlement fee rate of 1.60%, compared to our standard rate of 1.98%. We also offer other sales and promotional services with additional fees to our merchants that enroll in our *PayPay My Store Lite Plan*, including the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•*PayPay Coupon.* Our *PayPay Coupon* is an add-on service we offer on commission through which merchants can issue and distribute coupons for their stores to our PayPay app users. This is a convenient tool for merchants to conduct targeted marketing to either acquire new customers or increase repeat customers.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•*PayPay Coupon (Item-Specific). PayPay Coupon (Item-Specific)* is a sales promotion service we offer to manufacturers to issue coupons within the PayPay app on a per-product basis that can be used with certain PayPay merchants that carry POS terminals. This tool assists manufacturers in targeting promotions and gathering market data across national and local drugstore, convenience store and supermarket chains, among other retailers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•*PayPay Stamp Card. PayPay Stamp Card* is another add-on service we offer on commission through which merchants can issue store loyalty cards as a sales promotion tool to grant rewards to users whose payments satisfy pre-determined criteria.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•*PayPay Funding. PayPay Funding* is an invite-only merchant financing service that allows selected PayPay merchants to receive future sales proceeds in advance when they require operating capital. We utilize machine learning to estimate merchants' future sales and provide advances of up to ¥1 million, which is then deducted from the merchant's subsequent sales proceeds earned via PayPay transactions over a period determined by us. We charge a usage fee of between 3.0% and 18.0% per annum, averaging 15%, for the use of this service. Using our data-driven credit model, we can conduct instantaneous, fully-online risk assessments based on merchants' sales history, transaction patterns, and growth trends, without the need for the cumbersome screening and documentation typically required by traditional banks.

*PayCAS (PayPay Multi-Payment Unit)*

In 2022, we began leasing PayCAS, a unified cashless payment terminal with POS integration functionalities, to select merchants by collaborating with SB C&S Corp., a wholly owned subsidiary of SoftBank Corp. and the supplier of PayCAS, and SB Payment Service Corp, another subsidiary of SoftBank Corp. We made PayCAS available to all merchants starting April 2023.

**PayPay Points**

PayPay Points are our loyalty and rewards points which can be used not only as a traditional loyalty program but also as a form of cash equivalent across a wide range of services within our ecosystem.

The principal uses of PayPay Points include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Payments at merchants and online services: Users may use PayPay Points for payments at participating merchants nationwide, as well as through online services that support PayPay Points, with one point redeemable for one Japanese yen.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Payment of utilities and taxes: Through our PayPay billing platform, users may apply PayPay Points toward payments for electricity, gas, water and other public utility charges, as well as certain tax obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Financial services: Users may apply PayPay Points directly when purchasing investment trusts through PayPay Securities Corporation. In addition, through the "Point Management" service offered by PayPay SC Investment Service Corporation, users may manage and invest their PayPay Points.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Other services: PayPay Points may also be used within our PayPay app for a variety of other services, including remittances and related offerings.

We offer our users two primary ways to earn PayPay Points: our standard rewards and bonus rewards through the PayPay STEP program.

*Standard Rewards*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Users earn a 0.5% base reward rate on payments made with their PayPay Balance, and a 1.0% base reward rate on payments made with PayPay Credit or PayPay Card (physical card).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Users earn a 0.2% base reward rate on payments made with their PayPay Debit or PayPay Bank Visa Debit Card.

For all standard rewards, PayPay Points accrue for every ¥200 transacted. No PayPay Points are awarded for some types of transactions, including when payments are made with credit cards issued by other credit card companies linked to the PayPay app. As regular PayPay Points do not expire, the company does not record any breakage associated with these points.

*PayPay STEP (Bonus Rewards)*

The PayPay STEP program allows users to boost their reward rate with two types of bonuses as part of our user retention program:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•*Achievement Bonus*: Users earn an extra 0.5% to their reward rate by meeting the following two conditions in the previous month:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Make 30 or more payments of at least ¥200 each.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Spend a total of ¥100,000 or more.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•PayPay Debit, PayPay Bank Visa Debit Card and payments made with credit cards issued by other credit card companies linked to the PayPay app are excluded from the PayPay STEP program.

Effective June 2, 2026, we implemented certain changes to our PayPay Points rewards program. These changes are intended to strengthen our eKYC foundation, enhance user engagement, and facilitate smoother referrals of users of our payments services to our financial services. These changes include the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Users who have not completed eKYC registration with us will no longer be eligible to earn PayPay Points under the PayPay STEP program

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•When payments are made using PayPay Points, only the portion of the payment made without using PayPay Points will accrue PayPay Points for every ¥200 transacted (but the entire payment amount will continue to count towards the Achievement Bonus criteria of our PayPay STEP program)

We also provide merchant marketing and loyalty solutions, including Extra PayPay Points Stores and customized PayPay Points programs, which enable merchants to design targeted promotional campaigns and reward programs to support customer acquisition, retention and sales growth.

**Alliances with our Partners**

We have entered into partnerships with third-party companies, including Seven-Eleven Japan Co., Ltd., Monteroza Co., Ltd. and MINISTOP Co., Ltd. to integrate their various services with our PayPay app. For example, our users who download the Seven-Eleven app and complete the registration process are able to link their PayPay accounts to the Seven-Eleven app. When users make payments using PayPay in the Seven-Eleven app, users can earn points for both their PayPay and Seven-Eleven accounts, augmenting the financial benefit from making payments with PayPay. Our users that download the Monte app and make payments using PayPay in the Monte app earn PayPay Points as well.

In addition, when LINE Corporation (currently LY Corporation), the operator of the LINE messaging app, which had approximately 98 million monthly active users in Japan in the month of March 2025, became an indirect subsidiary of SoftBank Group Corp. in March 2021, we implemented interoperability between the code-based on-premise payment systems of LINE Pay and PayPay by enabling the use of LINE Pay at PayPay merchants that use the merchant-generated code-based payment method starting August 17, 2021. In October 2024, we added a shortcut function in the LINE app enabling LINE users that are registered users of ours to easily initiate the sending and receiving of P2P money transfers with other PayPay users without leaving the LINE app. Although LINE Pay ended service on April 30, 2025, PayPay continues to remain embedded in the LINE app providing a convenient function for LINE users.

To match this integration with overseas partners to benefit inbound travelers, on September 16, 2025, we launched PayPay's Overseas Payment Mode, which enables our eKYC verified users to use the PayPay app overseas. The service started in South Korea from late September 2025, enabling PayPay users to pay at stores in South Korea affiliated with Alipay+ and ZeroPay (a payment service introduced by the Seoul Metropolitan Government) and to make P2P payments while in South Korea. We plan to expand our outbound partnership to more countries and regions going forward. On May 15, 2025, SoftBank Corp. announced its entry into a comprehensive business alliance with Sumitomo Mitsui Card Co., Ltd., intended to integrate the diverse functionalities of Olive, the SMBC Group's comprehensive personal financial service, with SoftBank's range of digital technology-based services. As part of this alliance, we announced the launch of initiatives in collaboration with Sumitomo Mitsui Card Co., Ltd. Specifically, we announced:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•that, regardless of any changes in the PayPay app's approach to payment with credit cards issued by other companies, credit cards issued by Sumitomo Mitsui Card Co., Ltd. would continue to be available without any usage fees;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•that the Olive app would be updated to enable PayPay users to check their PayPay Balance and perform top-up and withdrawal transactions between their Sumitomo Mitsui Banking Corporation (SMBC) account and PayPay Balance via the Olive app, and that PayPay Balance would be added as a payment method under Olive's Flexible Pay mode. Payments using PayPay Balance would be available at Visa-affiliated merchants worldwide through Olive; and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•that users would be able to mutually exchange points between PayPay Points and V Points, a point service operated by CCC MK Holdings Co., Ltd., which will enable users to earn and use points with both PayPay and Visa-affiliated merchants.

On September 16, 2025, we acquired a 40.0% stake in Binance Japan, an affiliate of Binance, which operates one of the world's largest cryptocurrency exchanges. As the first phase of our strategic partnership with Binance Japan, we have integrated our platforms, enabling our PayPay users to purchase cryptocurrency using their PayPay Money balance and seamlessly convert crypto assets back into PayPay Money within the app. We aim to create a seamless integration of digital payments and cryptocurrency by connecting a leading global crypto exchange with our extensive user and merchant network.

In order to expand payment options for users and merchants in Japan and overseas, we have agreed upon the basic terms of a business alliance with Visa to explore collaboration in Japan and the United States by leveraging our QR code-based payment platform and Visa's global payment network and digital payment technologies. PayPay intends to establish and control an entity to develop a digital wallet that supports both Near Field Communication ("NFC") and QR code payments in the United States. Both PayPay and Visa will contribute capital in the form of investment, technology, and people to this new partnership, with Visa providing additional support through consulting services and embedded expertise delivered via Visa Managed Services or similar programs.

We also intend to collaborate with Visa to integrate new payment experiences into our existing ecosystem in Japan, including enhancing card services through Visa Flexible Credential, to enable multiple funding sources to be linked to a single card, expanding credit card acceptance at PayPay merchants, and strengthening cross-border payment capabilities for both domestic and international users. Details of the potential collaboration have not yet been decided.

**Collaborations with SoftBank Group Companies**

We collaborate with SoftBank Group companies in branding and marketing as well as for a variety of other services and arrangements, including for joint promotional activities, outsourcing of services, financial services, loan agreements with LY Corporation and secondments and directors dispatched from SoftBank Group companies. Descriptions of the primary agreements under each category are below. See "Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions" for additional details.

*Joint Promotional Activities*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Basic Agreement (Sales Promotion Measures, Advertising, Earn and Use of Incentives) between us and SoftBank Corp., dated September 16, 2021, stipulates the cooperation and cost-sharing agreement between us and SoftBank Corp., for the purpose of expanding the user base of PayPay payment settlement services as well as the subscriber base for telecommunication services of SoftBank Corp., through "Y!mobile" telecommunication service campaigns, Yahoo! Premium e-shopping mall, PayPay Point incentives and advertisement for such promotional measures. The term of this agreement was from the date of execution through March 31, 2022, but has been extended through several amendments, and following the latest of such amendments, the agreement is currently scheduled to expire on March 31, 2026. This agreement may be terminated by the parties to the agreement for breach of all or part of its respective obligations under the agreement as well as for certain conditions set forth in the agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Service Outsourcing Agreement for Issuance of PayPay Bonus (currently PayPay Points) between Yahoo Japan Corporation (currently LY Corporation) and us, dated August 21, 2019, stipulates the outsourcing of the issuance of PayPay Points based on the settlement amount of goods and services purchased by members on LY Corporation's e-commerce platform. LY Corporation pays us an amount equal to one Japanese yen multiplied by the number of PayPay Points issued to Yahoo!JAPAN members for the services we provide. The term of this agreement was from the date of the agreement to March 31, 2020, but provides that unless either party gives written notice at least three months prior to the expiration of the agreement of its intention to terminate the agreement, the agreement automatically renews for one year from the expiration date and the same applies thereafter. This agreement may be terminated by the parties to the agreement for breach of all or part of its respective obligations under the agreement as well as for certain conditions set forth in the agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Basic Agreement for Provision of "Pay-Toku" Fee Plan between us and SoftBank Corp., dated September 5, 2023, stipulates the mutual cooperation pursuant to a specific fee rate plan for mobile communication services offered by SoftBank Corp. utilizing PayPay Points aiming at the expansion of the customer base for PayPay's payment settlement services. The "Pay-Toku" Fee Plan sets forth the PayPay Point-related benefits SoftBank mobile service users can receive. SoftBank Corp. bears the cost equivalent to the amount obtained by multiplying the PayPay Points granted to SoftBank mobile service users by one Japanese yen. The term of this agreement is from the date of execution until such time when SoftBank Corp. ceases to provide Pay-Toku. This agreement may be terminated by the parties to the agreement for breach of all or part of its respective obligations under the agreement as well as for certain conditions set forth in the agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Service Outsourcing Agreement for Issuance of PayPay Money Lite and PayPay Points between SoftBank Corp. and us, dated July 31, 2019, stipulates the outsourcing of the issuance of PayPay Money Lite or PayPay Points to certain current and potential customers of services provided by SoftBank Corp. and certain current and potential customers of services provided with SoftBank Corp. SoftBank Corp. pays us an amount equal to one Japanese yen multiplied by the number of PayPay Money Lite or PayPay Points units issued to current and potential customers of services provided by or with SoftBank Corp. The term of this agreement was from August 1, 2019 to July 31, 2020, but provides that unless either party gives written notice at least six months prior to the expiration of the agreement of its intention to terminate the agreement, the agreement automatically renews for one year from the expiration date and the same applies thereafter. This agreement may be terminated by the parties to the agreement for breach of all or part of its respective obligations under the agreement as well as for certain conditions set forth in the agreement.

*Outsourcing of Services*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Business Alliance Agreement for PayCAS between us, SB C&S Corp. and SB Payment Service Corporation, dated August 1, 2024, sets forth the agreement among the parties with respect to the role of each party in connection with the provision of services related to PayCAS. The revenue share among us, SB C&S Corp. and SB Payment Service Corporation is 34%, 33% and 33%, respectively. The term of this agreement was for one year from August 1, 2024, but provides that unless either party gives written notice to the contrary at least six months prior to the expiration of the agreement, the agreement automatically renews for one year upon expiration and the same applies thereafter. This agreement may be terminated by any of the parties to the agreement for another party's failure to perform under the agreement as well as for certain conditions set forth in the agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Business Outsourcing Agreement between us and PayPay SC Corporation, dated August 1, 2024, for the outsourcing of the following services: (1) signing up merchants for PayCAS and related merchant support, (2) signing of new PayPay merchants, (3) PayPay merchant support related to PayPay payment settlement services and (4) acquisition through sales promotion activities. The term of this agreement was from August 1, 2024 to March 31, 2025, but provides that unless either party gives written notice to the contrary at least six months prior to the expiration of the agreement, the agreement automatically renews for one year upon expiration and the same applies thereafter, except with respect to the service of signing up merchants for PayCAS and related merchant support, which ends upon the expiration of the Business Alliance Agreement for PayCAS between us, SB C&S Corp. and SB Payment Service Corporation. This agreement provides for early termination and may be terminated by the parties to the agreement for any breach of the agreement or default on all or part of its respective obligations under the agreement as well as for certain conditions set forth in the agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•General Agency Agreement between us and SB Payment Service Corporation, dated December 13, 2019, under which SB Payment Service Corporation acts as our payment service provider and assists our online merchants using our payment settlement services. We pay SB Payment Service Corp. a fee, which is calculated based on a percentage applied to the value of transactions made through SB Payment Service Corp.'s systems. The term of this agreement was one year from December 13, 2019, but provides that unless either party gives written notice at least three months prior to the expiration of the agreement of its intention to terminate the agreement, the agreement automatically renews for one year upon expiration and the same applies thereafter. This agreement may be terminated by the parties to the agreement for breach of all or part of its respective obligations under the agreement as well as for certain conditions set forth in the agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Sales Alliance and Partner Agreement between us and SB Payment Service Corporation, dated December 3, 2018, under which SB Payment Service Corporation provides us with various services, such as access to a payment gateway which connects merchants to our payment system, and supports our relations with the merchants by checking information provided by the merchants and by communicating with the merchants on our behalf. The term of this agreement was one year from December 3, 2018, but provides that if neither party notifies the other party in writing that it intends to terminate the agreement upon expiration at least three months prior to the expiration date, the agreement automatically renews for one year and the same applies thereafter. This agreement may be terminated by the parties to the agreement for breach of all or part of its respective obligations under the agreement as well as for certain conditions set forth in the agreement.

*Financial Services*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Memorandum on PayPay Merchant Terms for Mini-apps between us and PayPay Insurance Corporation, dated December 1, 2021, provides the terms of the agreement under which PayPay Insurance Corporation operates a mini-app, through which users can apply for an array of insurance policies offered by PayPay Insurance Service Corporation and make purchases using our PayPay payment settlement services. The mini-app usage fee is calculated as an agreed amount between 2.22% and 5% of the purchases made using the mini-app. The term of this agreement was one year from execution, but provides that if the parties do not notify the other party of its intention to not renew the agreement at least 30 days prior to expiration, the agreement automatically renews for one year and same applies thereafter. This agreement may be terminated by us without any notice or other procedures for certain conditions set forth in the agreement.

*Loan Agreements with LY Corporation*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•In February 2018, PayPay Card Corporation (then YJ Card Corporation) entered into an agreement with LY Corporation (then Yahoo Japan Corporation), pursuant to which LY Corporation (then Yahoo Japan Corporation) agreed to provide loans of up to ¥70 billion to PayPay Card Corporation and PayPay Card Corporation agreed to grant a security interest at the request of LY Corporation (then Yahoo Japan Corporation) with respect to any contractual obligation between PayPay Card Corporation and LY Corporation (then Yahoo Japan Corporation). In April 2019, PayPay Card Corporation entered into a ¥10 billion loan agreement with LY Corporation (then Yahoo Japan Corporation) due in December 2027, with a fixed interest rate of 0.5%, for general business purposes, including working capital. As of March 31, 2026, the amount outstanding under this loan agreement was ¥10 billion. The term of the master agreement, which applies to all such individual loans, is from the execution date of February 15, 2018 to December 7, 2027. However, there is no remaining committed availability under this loan agreement. PayPay Card Corporation's obligations to LY Corporation are subject to automatic acceleration for certain conditions set forth in the agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•In December 2019, PayPay Card Corporation entered into an agreement with LY Corporation (then Z Holdings Corporation), pursuant to which LY Corporation (then Z Holdings Corporation) agreed to provide loans of up to ¥25 billion to PayPay Card Corporation and PayPay Card Corporation agreed to grant a security interest at the request of LY Corporation (then Z Holdings Corporation) with respect to any contractual obligation between PayPay Card Corporation and LY Corporation (then Z Holdings Corporation). In December 2019, LY Corporation (then Z Holdings Corporation) provided a ¥10 billion loan to PayPay Card Corporation due in December 2028, with a fixed interest rate of 0.6%, for general business purposes, including working capital. As of March 31, 2026, the amount outstanding of this loan was ¥10 billion. The term of the master agreement, which applies to all such individual loans, is from the execution date of December 18, 2019 to December 6, 2028. However, there is no remaining committed availability under this loan agreement. PayPay Card Corporation's obligations to LY Corporation are subject to automatic acceleration for certain conditions set forth in the agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•In February 2024, PayPay Card Corporation entered into a ¥15 billion term loan agreement with LY Corporation due in February 2026, with a fixed interest rate of 0.7%, for general business purposes, including working capital. This loan was repaid in full in February 2026, and as of March 31, 2026, no amount was outstanding under this loan agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•In December 2024, LY Corporation and PayPay Card Corporation executed a memorandum of understanding pursuant to which the permitted use of proceeds for the intercompany loans described above was broadened to include business investments (including the provision of working capital and loans to PayPay Corporation for its business investments). The other principal terms of the loan agreements remain the same. The memorandum of understanding provides that the parties may agree from time to time to renew or extend the maturity of the loans described above. In the event of such renewal, the date of maturity is extendable unless LY Corporation provides one month of notice that the repayment date will not be extended, with the final maturity being no later than March 29, 2030. Any such renewal bears interest at a rate equal to LY Corporation's average funding cost as of the day after the repayment date prior to the extension plus a spread of 0.1.As of March 31, 2026, the aggregate outstanding principal amount of the loans described above was ¥20 billion, consisting of the April 2019 and December 2019 loans, and the February 2024 term loan had been repaid in full in February 2026.

*Secondments and Directors Dispatched from SoftBank Group Companies*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Basic Contract of Secondment between SoftBank Group Corp. and us, dated March 23, 2022, under which employees of SoftBank Group Corp. are seconded to us. The term of this agreement was until March 31, 2023, but provides that it will be renewed for another year if neither party requests termination of the agreement no later than one month prior to expiration and the same applies thereafter. This agreement may be terminated by the parties for certain conditions related to anti-social forces (a reference to organized crime in Japan) as set forth in the agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Basic Contract of Secondment between LY Corporation and us, dated October 1, 2023, under which employees of LY Corporation are seconded to us. The term of this agreement was from October 1, 2023 through March 31, 2024, but provides that if neither party requests to terminate the agreement or amend the terms of the agreement one month prior to expiration, the term is extended for a further six-month period and the same applies thereafter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Basic Contract of Secondment between SoftBank Corp. and us, dated July 1, 2018, under which employees of SoftBank Corp. are seconded to us. The term of this agreement was until June 14, 2019, but provides that it will renew for another year if neither party requests to terminate the agreement no later than one month prior to expiration. This agreement may be terminated by the parties for certain conditions related to anti-social forces as set forth in the agreement.

**Sales and Marketing**

Our sales and marketing activities are designed to support user acquisition, merchant acquisition and user engagement across our platform. Since the launch of PayPay, we have conducted promotional campaigns, loyalty programs and merchant initiatives in collaboration with SoftBank Group companies, merchants, municipalities and strategic partners. The recent marketing activities are as follows:

*Super PayPay Festival*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We continue to launch a series of large-scale promotional campaigns, known as the "Super PayPay Festival." A key feature of these campaigns is the strategic integration of gamification elements to transform the payment process from a purely transactional interaction into an engaging and enjoyable experience. For example, we have introduced an instant-win scratch-off lottery, which replaced a prior virtual darts game. This gamification is designed with two primary objectives: first, to randomly award additional benefits to users, and, second, to create opportunities for social interaction among family and friends, making the act of payment a shareable and enjoyable moment.

*Utilizing PayPay Points Supported by Third Parties*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•PayPay Points are also utilized in connection with promotional programs conducted by SoftBank Group companies including SoftBank Corp. and LY Corporation, merchants, municipalities and other partners. In many cases, these partners bear the associated promotional costs. For example, SoftBank Corp. grants PayPay Points to its long-term smartphone users and LY Corporation conducts promotional campaigns in which customers earn PayPay Points equivalent to a certain percentage of purchases made via PayPay on its e-commerce platforms. In these arrangement, participating companies generally provide us a cash amount, which we record under our assets, corresponding to the PayPay Points they grant to their customers, which are recorded as PayPay Users' deposits under our liabilities. We also participate in government and municipality programs intended to promote adoption of cashless payment services in Japan. We have expended sales and marketing efforts so that merchants applying for subsidized government programs select us as a payment service company among other service providers, enabling us to leverage these government policies to further encourage use of our payment settlement services.

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These programs have contributed to our expansion of our user base, merchant acquisition and increase in users' balance of PayPay Points to be used for future payments.

We have strategically executed several key marketing campaigns to drive user acquisition, engagement, and transaction volume. Our campaigns are designed not only to provide monetary incentives but also to make the payment experience itself more engaging and interactive.

**Competition**

The cashless payment industry in Japan remains fragmented, continuously changing, while consistently receiving government support to promote cashless payment and the digitalization of financial services. Many of the areas in which we compete evolve rapidly with innovative and disruptive technologies, shifting user preferences and needs, price sensitivity of merchants and consumers, and frequent introductions of new products and services. Competition may also intensify as new competitors emerge, businesses enter into business combination and partnerships, and established companies in other segments expand to become competitive with various aspects of our business.

*Payment Service*

The main competitors for our code-based payment services include providers of traditional credit and debit cards, e-money services such as East Japan Railway Company's Suica and other smartphone-based payment apps such as Rakuten Payment, Inc.'s Rakuten Pay and d Payment offered by NTT DOCOMO, INC. We also compete with contactless NFC credit card payment offered by credit card companies as well as smartphone contactless payments such as Apple Pay, Google Pay, QUICPay and iD. In light of the relatively high ratio of cash payments in Japan, the market for cashless settlement is still expected to expand significantly and competition in the industry is expected to remain intense.

Our competitors for PayPay Card Corporation's services consist primarily of large Japanese consumer finance companies, a number of major Japanese banks, Japanese subsidiaries of foreign financial institutions, Japanese internet companies that have entered into the consumer finance industry by acquiring existing consumer finance companies, bank-affiliated credit card companies, retailer-affiliated credit card companies, cellphone carriers and shopping credit companies that issue credit cards, such as Rakuten Card Co., Ltd., Sumitomo Mitsui Card Company, Limited, JCB Co., Ltd., Mitsubishi UFJ NICOS Co., Ltd., Credit Saison Co., Ltd., AEON Financial Service Co., Ltd. and NTT DOCOMO, INC.

*Financial Services Service*

PayPay Bank Corporation faces competition in Japan's banking market. We compete with various types of financial services companies, including Japan's major banking groups, government-controlled and government-affiliated entities, regional banking institutions, non-bank financial institutions and other firms that are engaged in providing similar products and services. In particular, we compete with other internet banks, including Rakuten Bank, Ltd., SBI Sumishin Net Bank, Ltd., Sony Bank, Inc. and au Jibun Bank Corporation, as well as traditional banking institutions which have expanded their internet banking services. In addition, the development of new technologies in the "Fintech" and other sectors, along with the corresponding rise of new entrants from these sectors into the financial services industry may lead to the development of other competing business models and further intensify competition.

Our main competitors for PayPay Securities Corporation are other online securities firms, such as Rakuten Securities, Inc., SBI Securities Co., Ltd., Matsui Securities Co., Ltd., Monex, Inc. and Mitsubishi UFJ eSmart Securities Co., Ltd. We also face competition from full-services securities firms in Japan, such as Nomura Securities Co., Ltd., Daiwa Securities Co. Ltd. and SMBC Nikko Securities Inc. Since the NISA program was updated in January 2024 to increase the tax benefits available to Japanese taxpayers investing in both long-term investment trusts and stocks, consumer investment has expanded significantly and is expected to continue to expand, resulting in an expected increase in both the size of the market for online securities firms as well as competition.

**Information Technology**

With our smartphone-based payment service at our core, we rely heavily on information technology and communication systems to operate our business. We utilize a proprietary technology platform on the back end within our company that enables us to operate our business effectively. Our app is backed up by a microservices architecture that makes our platform more reliable, scalable and flexible. We also utilize a data platform to make our back-end better able to handle large transaction volumes and scale to meet future growth. Our infrastructure is cloud native.

It is also critical that we create a secure environment to attract and retain users and merchants. We have robust systems in place to process the identity verification of our users, merchants and cardholders through eKYC procedures. We conduct identity verification through smartphones by either certifying a MyNumber social security card and

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scanning the IC chip on it, scanning the IC chip on a driver license and taking a face photo or taking a photo of an identity verification document in addition to taking a face photo. Thanks to our "eKYC Passport," users who are verified through our PayPay app are able to open accounts with other services and apps in our ecosystem through a streamlined process, which allows them to skip verification of name, date of birth, address, telephone number, e-mail address, identity verification documents and facial photos by using the information already processed.

We maintain information security measures as part of our operations. We have established our own security system which we continually work to strengthen. We maintain a dedicated Security Operation Center, or SOC, in charge of monitoring and analyzing threats to information systems, with a focus on incident detection. We also maintain a Computer Security Incident Response Team, or CSIRT, that focuses on responding when an incident occurs. We conduct red teaming on a regular basis to test our security and employ white hat hackers to conduct red teaming, penetration testing and vulnerability diagnosis so we can quickly evaluate information security amidst our frequent release cycle of new features. This helps protect our systems from breach and protect our users' privacy.

In addition, Paytm Labs Inc. has granted us licenses to their software used for our PayPay My Store Service and fraud prevention and marketing solutions.

LY Corporation has granted PayPay Card Corporation a license to use the software necessary to operate our credit card merchant acquiring business.

**Intellectual Property**

Our success depends in part on our ability to protect our intellectual property and proprietary technologies. To protect our proprietary rights, we rely on a combination of intellectual property rights in Japan and other jurisdictions, including patents, trademarks, copyrights, trade secret laws, license agreements, internal procedure, and contractual provisions. We also enter into confidentiality and invention assignment agreements with our employees and contractors, and sign confidentiality agreements with third parties. Our internal controls restrict access to proprietary technology.

Our patent portfolio includes technologies relating to digital payments, credit services, fraud prevention, risk management and data analytics. We continue to develop and seek protection for technologies that support our payment and financial services ecosystem.

***PayPay Brand***

LY Corporation has transferred to us trademarks, design rights, domain names and copyrights of logos, which contain or relate to the name "PayPay" such as, but not limited to, the trademarks and logos of PayPay, PayPay Card, PayPay Bank, PayPay Insurance Service and PayPay Securities, as well as various domain names including paypay.ne.jp and paypay-card.co.jp. We have granted to LY Corporation a perpetual, non-exclusive, non-transferable license to use those transferred intellectual property rights as well as the right to sublicense them to certain of its subsidiaries, including PayPay Insurance Service Corporation.

**Facilities**

Our corporate headquarters is located in Tokyo, Japan, where we currently lease 17,234 square meters under a lease agreement that expires in January 2030. We do not own any real property. We believe that these facilities are suitable to meet our needs.

**Employees**

For information regarding our employees, see "Item 6. Directors, Senior Management and Employees

—D. Employees."

**Legal Proceedings**

We are involved in litigation and other legal proceedings from time to time in connection with the ordinary course of our business. We are not currently involved in any litigation or other legal proceedings that, if determined adversely to us, may have, or have had in the recent past, significant effects on the company's financial position or profitability, individually or in the aggregate.

**Information required by subpart 1400 of Regulation S-K**

See "Selected Statistical and Other Information" for information required by subpart 1400 of SEC Regulation S-K.

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**Regulations**

We are subject to various laws and regulations in Japan, where we primarily conduct our business. These include requirements to obtain governmental approvals for conducting business, as well as laws and regulations such as the Payment Services Act, the Banking Act, the FIEA, the Labor Standards Act (Act No. 49 of 1947, as amended), or the Labor Standards Act, the Ordinance for Enforcement of the Labor Standards Act (Act No. 23 of 1947, as amended), or the Ordinance for Enforcement of the Labor Standards Act, the Money Lending Business Act, the Act Regulating the Receipt of Contributions, Receipt of Deposits and Interest Rates, the Interest Rate Restriction Act, the Installment Sales Act, the Deposit Insurance Act (Act No. 34 of 1971, as amended), or the Deposit Insurance Act, the Act on Special Measures for Strengthening Financial Functions of Japan (Act No. 128 of 2004, as amended), or the Act on Special Measures for Strengthening Financial Functions of Japan, the Act on Emergency Measures for the Revitalization of the Financial Functions (Act No. 132 of 1998, as amended), or the Act on Emergency Measures for the Revitalization of the Financial Functions, the Act on Limitation on Shareholding by Banks and Other Financial Institutions of Japan (Act No. 131 of 2001, as amended), or the Act on Limitation on Shareholding by Banks and Other Financial Institutions of Japan, the Act on the Provision and the Improvement of the Environment of Financial Services (Act No. 101 of 2000, as amended), or the Act on the Provision and the Improvement of the Environment of Financial Services, the Act on the Promotion of Ensuring National Security Through Integrated Implementation of Economic Measures (Act No. 43 of 2022, as amended), or the Act on the Promotion of Ensuring National Security Through Integrated Implementation of Economic Measures, the Foreign Exchange and Foreign Trade Act, the Act on Prevention of Transfer of Criminal Proceeds, the Act on the Protection of Personal Information and the Act on Prohibition of Private Monopolization and Maintenance of Fair Trade. Below are summaries of key Japanese regulations applicable to our business.

**PayPay Corporation**

***Payment Services Act***

*Regulations on Prepaid Payment Instruments*

In Japan, the Payment Services Act regulates issuers of prepaid payment instruments, such as prepaid cards and e-money. Issuers of prepaid payment instruments must register with the Director of the relevant Local Finance Bureau if the prepaid payment instruments can be used to purchase goods or services that are offered not only by the issuer or its closely related parties, including its subsidiaries, but also by third parties. Since PayPay Corporation offers PayPay Money Lite, a non-refundable type of PayPay Balance, which qualifies as a prepaid payment instrument and can be used to purchase goods and services offered by third parties, PayPay Corporation has registered with the Director of the Kanto Local Finance Bureau and must comply with certain regulations under the Payment Services Act. Such regulations include: (i) an obligation to deposit an amount not less than 50% of the total unused balance arising from all issued prepaid payment instruments, which corresponds to the balance of PayPay Money Lite, as of the relevant reference date (March 31 and September 30 every year) (the "Unused Balance as of the Reference Date"); if the Unused Balance as of the Reference Date is more than JPY 10 million, then the deposit must be made within two months after the date immediately following the reference date, or issuers of prepaid payment instruments must enter into certain guarantee or trust agreements with a financial institution or a trust company to provide the security deposits when required under the Payment Services Act and such agreements must be notified to the Director of the relevant Local Finance Bureau; (ii) an obligation to refund the outstanding balance of prepaid payment instruments if certain events specified under the Payment Services Act, including discontinuation of all or part of the business of issuing prepaid payment instruments, occur; (iii) general restrictions on refunds except for the mandatory refund described in the foregoing item (ii); and (iv) an obligation to secure any private information obtained in connection with prepaid payment instruments. The Director of the Kanto Local Finance Bureau is authorized to issue a business improvement or suspension order, or cancel PayPay Corporation's registration, if PayPay Corporation fails to comply with these regulations. PayPay Corporation may also be subject to criminal sanctions if it fails to fulfill certain obligations under the Payment Services Act.

In addition, the Payment Services Act regulates issuers of high-value, electronically transferable prepaid payment instrument. These instruments are designed to be transferred by electronic means, exceeding a certain amount either at one time or over the course of a month. Since PayPay Money Lite (High Amount) falls within the definition of a high-value, electronically transferable prepaid payment instrument, PayPay Corporation is required to (i) submit a business implementation plan that states certain matters, such as measures to protect users of PayPay Money Lite (High Amount), and ensure the sound and appropriate management of the business of issuing PayPay Money Lite (High Amount) to the Director of the Kanto Local Finance Bureau, and (ii) conduct the necessary identification procedures for users of PayPay Money Lite (High Amount) as required under the Act on Prevention of Transfer of Criminal Proceeds as described below.

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*Regulations on Funds Transfer Services*

The Payment Services Act also regulates funds transfer service providers. A "funds transfer service" is the business of transferring funds carried out by persons other than banks and other deposit-taking institutions. Under the Payment Services Act, funds transfer services are, in general, classified into three types, one of which is a type II funds transfer service, which permits the transfer of JPY 1 million or less and requires registration with the Director of the relevant Local Finance Bureau. Since PayPay Corporation offers PayPay Money, a refundable type of PayPay Balance deposited by users, which falls within the definition of a type II funds transfer service, PayPay Corporation has registered with the Director of the Kanto Local Finance Bureau as a type II funds transfer service provider and must comply with certain regulations under the Payment Services Act. Under these regulations, type II funds transfer service providers are obligated to deposit a specific amount (the "Deposit") (the calculation of which is described below), and the Deposit must be made within three business days after the end of a period designated as a week or shorter by the funds transfer service provider, or type II funds transfer service providers must enter into certain guarantee or trust agreements with a financial institution or a trust company to provide the Deposits when required under the Payment Services Act and such agreements must be notified to the Director of the relevant Local Finance Bureau. The amount of Deposit is the higher of (i) JPY 5 million and (ii) the amount calculated based on the sum of (a) the amount of outstanding obligations pertaining to funds transfer transactions borne by the funds transfer service provider and (b) the expenses associated with the exercise of rights as creditors of fund transfer service.

In addition, type II funds transfer service providers are obligated to take necessary measures for the safe management of information related to funds transfer services, or provide explanations to prevent users from mistaking these services for exchange transactions conducted by banks.

The Director of the Kanto Local Finance Bureau is authorized to issue a business improvement or suspension order, or cancel PayPay Corporation's registration, if PayPay Corporation fails to comply with these regulations. PayPay Corporation may be also subject to criminal sanctions if it fails to comply with certain obligations as a funds transfer service provider.

***Banking Act***

*Regulations on Electronic Payment Services*

The Banking Act regulates electronic payment services. "Electronic payment services" is the business of performing any of the following activities using an electronic data processing system as entrusted by a depositor that has opened an account for deposits with a bank: (i) receiving instructions to execute funds transfer transactions for transferring funds in the depositor's account and providing such instructions to the bank; or (ii) acquiring information on the depositor's account from the bank and providing it to the depositor. Electronic payment service providers must: (a) register with the Director of the relevant Local Finance Bureau; (b) enter into a contract with the bank for electronic payment services, stipulating, among other things, the allocation of liability with the bank for any losses or damages incurred by users arising from electronic payment services; (c) conduct electronic payment services pertaining to that bank in accordance with the contract; and (d) disclose certain information contained in the above contract from among the conditions of that contract using the internet or by any other means. PayPay Corporation, which acquires information on user accounts from PayPay Bank Corporation and provides it to those users, has registered with the Director of the Kanto Local Finance Bureau as an electronic payment service provider.

The Director of the Kanto Local Finance Bureau is authorized to issue a business improvement or suspension order, or cancel PayPay Corporation's registration, if PayPay Corporation fails to comply with these regulations.

*Regulations on Bank Agency Services*

The Banking Act regulates bank agency services. "Bank agency services" is the business of acting as an agent or intermediary for a bank to enter into a contract for: (i) the acceptance of deposits, installment savings, etc.; (ii) the lending of funds or the discounting of bills and notes; or (iii) funds transfer transactions. The bank agent must obtain a license from the Director of the relevant Local Finance Bureau. PayPay Corporation, which acts as an intermediary to enter into contracts for the acceptance of yen ordinary deposits, foreign currency ordinary deposits, the lending of yen funds, and funds transfer transactions with PayPay Bank Corporation as its principal bank, has obtained a license from the Director of the Kanto Local Finance Bureau. The Director is authorized to issue a business improvement or suspension order, or cancel PayPay Corporation's license, if PayPay Corporation fails to comply with the regulations applicable to bank agents under the Banking Act.

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***The FIEA***

*Regulations on Financial Instruments Intermediary Services*

The FIEA regulates financial instruments intermediary services. "Financial instruments intermediary services" are services that fall under any of the following acts, which are provided for and under entrustment from financial instruments business operators or registered financial institutions: (i) intermediation for the purchase or sale of securities; (ii) intermediation for the purchase or sale of securities or market derivatives transactions on domestic or foreign financial instruments exchange markets; (iii) the handling of public offerings or secondary distributions of securities, or the handling of a private placement of securities or solicitation for selling, etc. only for professional investors; or (iv) intermediation for the conclusion of investment advisory or discretionary investment contracts. Financial instruments intermediary service providers must register with the Director of the relevant Local Finance Bureau. PayPay Corporation provides various intermediary services, including the opening of PayPay Securities accounts, through its PayPay mini-app. Therefore, PayPay Corporation has registered with the Director of the Kanto Local Finance Bureau as an intermediary with PayPay Securities Corporation as its entrusting financial instruments business operator.

The Director of the Kanto Local Finance Bureau is authorized to issue a business suspension order, or cancel PayPay Corporation's registration, if PayPay Corporation fails to comply with the regulations applicable to financial instruments intermediary services under the FIEA.

***Ordinance for Enforcement of the Labor Standards Act***

*Regulations on Payroll Services*

Under the Labor Standards Act, wages must, in principle, be paid in cash. However, with the consent of the employee, an employer may pay wages by transferring funds to the employee's account with a funds transfer service provider designated by the Minister of Health, Labour and Welfare (the "Designated Funds Transfer Service Provider"). PayPay Corporation has been designated by the Minister of Health, Labour and Welfare and provides PayPay Payroll service.

To be designated by the Minister of Health, Labour and Welfare, a funds transfer service provider must, among other things, meet the following requirements:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Setting the maximum wages that can be received in an employee-designated account at JPY 1 million or less. If the balance exceeds JPY 1 million, the excess must be transferred to another account designated by the employee within the same day, taking measures to ensure that the balance in the employee-designated account remains at or below JPY 1 million.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Establishing a system to reimburse employees for the full amount of any debt (including amounts other than wages) related to the balance of the employee-designated account in a timely manner (within six business days of the employee filing a claim with the Designated Funds Transfer Service Provider or guarantee institution following the bankruptcy filing) if a filing is made for commencement of bankruptcy proceedings for the Designated Funds Transfer Service Provider or if the Designated Funds Transfer Service Provider becomes unable to fulfill its obligations related to funds transfer transactions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)Implementing a mechanism to compensate employees for any losses resulting from unauthorized use of the balance in the employee-designated account contrary to the employees' intent or from other causes not attributable to the employees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)Taking measures to ensure that the debt related to the employee-designated account can be fulfilled for at least 10 years from the date of the last funds transfer related to the account, unless there are exceptional circumstances.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)Taking measures to enable funds transfers to the employee-designated account, including wage payments, to be made in increments of one yen.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)Establishing a system to enable employees to withdraw the balance of their employee-designated accounts in increments of one yen through ATMs or other means and to enable employees to make such withdrawal by such method without bearing any fees or other charges at least once a month.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii)Establishing a system to report to the Minister of Health, Labour and Welfare on the status of operations related to wage payments and the financial condition, including businesses other than funds transfer services, regularly or upon request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii)Possessing the technical capability to properly and reliably perform operations related to wage payments and having sufficient social credibility.

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The Minister of Health, Labour and Welfare is authorized to cancel PayPay Corporation's designation if PayPay Corporation fails to meet these requirements.

**PayPay Card Corporation**

***The Money Lending Business Act***

In Japan, the Money Lending Business Act regulates the business of lending money or acting as an intermediary for the lending or borrowing of money on a regular basis (the "money lending business"). A money lending business provider must register with the Director of the relevant Local Finance Bureau or the relevant prefectural governor. Because PayPay Card Corporation extends cash advances to cardholders, PayPay Card Corporation has registered with the Director of the Kanto Local Finance Bureau. Under the Money Lending Business Act, PayPay Card Corporation is supervised by the FSA, which has the authority to review the operation of PayPay Card Corporation and inspect its records to monitor compliance. The Director of the Kanto Local Finance Bureau has the authority under the Money Lending Business Act to issue a business improvement order when it deems it necessary to do so, and, upon PayPay Card Corporation's substantial non-compliance with the Money Lending Business Act or a failure to comply with certain administrative orders, to suspend its money lending business and cancel its registration as a money lending business provider.

In respect of the money lending business of PayPay Card Corporation, the Money Lending Business Act requires it to provide borrowers (and any guarantor) with a written or electronic notice of: (a) the terms and conditions of the loan at the time of, or promptly after, execution of the loan agreement or any guarantee agreement; and (b) the amounts received from a borrower for repayment and the respective amounts of the principal and the interest which were repaid by the amounts received as well as the borrower's remaining balance at the time of, or immediately after each repayment.

Prior to extending a loan, a money lending business provider is required to investigate the ability of borrowers to repay the loan. In granting a loan to an individual borrower, a money lending business provider is required to use credit information (*shinyou jouhou*) available from a designated credit bureau (*shitei shinyou jouhou kikan*) in conducting the above-mentioned investigation. A money lending business provider is generally not permitted to extend a loan to an individual borrower if the aggregate outstanding amount of the borrower's loans from all money lending business providers, after the extension of the loan, will exceed one-third of the borrower's annual income.

***Regulation on Interest Rate***

In Japan, the Interest Rate Restriction Act and the Act Regulating the Receipt of Contributions, Receipt of Deposits and Interest Rates regulate the imposition of interest on a loan. Thus, the interest charged for cash advances extended by PayPay Card Corporation is regulated under these acts. Both acts set limits on the maximum interest rates permissible on loans. Any loan agreement with an interest rate exceeding the statutory limits under the Interest Rate Restriction Act is void with respect to the portion of any interest in excess of such limits, without any exemption. In addition, a money lending business provider, who has concluded a loan agreement at more than 20% interest rate, may be subject to criminal penalty under the Act Regulating the Receipt of Contributions, Receipt of Deposits and Interest Rates.

***The Installment Sales Act***

In Japan, the Installment Sales Act regulates the intermediation of comprehensive credit purchases, such as a credit card business. A comprehensive credit purchase intermediary must register with the Director of the relevant Bureau of Economy, Trade and Industry. Because PayPay Card Corporation offers credit payment services, PayPay Card Corporation has registered with the Director of the Kyushu Bureau of Economic, Trade and Industry as a comprehensive credit purchase intermediary. To maintain its registration, PayPay Card Corporation must continue to meet certain requirements, including a capital requirement of having a capital amount of ¥20 million or more. Under the Installment Sales Act, there are no regulations on the amount of fees for the intermediation of credit purchases, including any maximum limit, but the METI requires credit purchases intermediaries to set a fee rate within the maximum interest rates specified under the Act Regulating the Receipt of Contributions, Receipt of Deposits and Interest Rates. Under the Installment Sales Act, PayPay Card Corporation is supervised by the METI and the Director of the Kyushu Bureau of Economy, Trade and Industry, which have the authority to issue a business improvement order if it deems that PayPay Card Corporation has violated the Installment Sales Act and to suspend its credit payment services and cancel the registration of PayPay Card Corporation as a comprehensive credit purchase intermediary under certain circumstances set forth in the Installment Sales Act.

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*Regulations on Intermediation of Comprehensive Credit Purchases*

Under the Installment Sales Act, before delivering a credit card to an individual customer or increasing the credit limit of a credit card of an individual customer in respect of the intermediation of comprehensive credit purchases, a registered comprehensive credit purchase intermediary must investigate the individual customer's payment capacity by reviewing certain matters as specified under the Ordinance for Enforcement of the Installment Sales Act (the "Enforcement Ordinance"). These include the individual customer's annual income, bank deposits, payment status of debts involving the intermediation of credit purchases, etc. (the "Customer Information"), using specified credit information (*tokutei shinyou jouhou*) available from a designated credit bureau (*shitei shinyou jouhou kikan*). A registered comprehensive credit purchase intermediary is generally prohibited from delivering a credit card or increasing a credit limit if the credit limit of the credit card to be delivered or the credit limit after the increase exceeds a certain amount calculated based on the Customer Information.

*Regulations on Credit Card Number, etc. Handling Contractors*

In addition, the Installment Sales Act regulates persons who enter into contracts with merchants involving the handling of credit card number, etc. Because PayPay Corporation and PayPay Card Corporation have entered into such contracts with merchants, PayPay Corporation has registered with and is supervised by the Director of the Kanto Bureau of Economy, Trade and Industry and PayPay Card Corporation has registered with and is supervised by the Director of the Kyushu Bureau of Economy, Trade and Industry as a credit card number, etc. handling contractor. A credit card number, etc. handling contractor is required to investigate merchants on certain matters specified in the Enforcement Ordinance as necessary to prevent the unauthorized use of credit card numbers, etc. by the merchants prior to entering into the contracts involving the handling of credit card number, etc. with them, and is prohibited from entering into any such contract if it is found that the merchant's management of credit card numbers, etc. may be inappropriate. A credit card number, etc. handling contractor is also required to investigate merchants periodically and as necessary, and to take necessary measures to prevent the unauthorized use of credit card numbers, etc. by merchants, including the cancellation of contracts with the merchants involving the handling of credit card number, etc.

**PayPay Bank Corporation**

***Supervision of Banks in Japan***

*Financial Services Agency*

Although the Prime Minister has supervisory authority over banks and bank's major shareholders in Japan, except for matters prescribed by cabinet order, this authority is generally entrusted to the Commissioner of the FSA.

Under the Banking Act, the Prime Minister's authority over banks and bank's major shareholders in Japan extends to various areas, including granting and cancellation of licenses, ordering banks to suspend business in whole or in part, requiring submission of business reports or materials regarding banks and approval and cancellation of approval, ordering bank's major shareholders to ensure compliance with certain criteria and requiring submission of business reports or materials regarding bank's major shareholders.

Under the prompt corrective action system, the Commissioner of the FSA may take corrective actions in the case of deterioration of the capital adequacy ratios of banks and their subsidiaries and affiliates. These actions include requiring a bank to formulate and implement reform measures, requiring a bank to reduce assets or take other specific actions and ordering a bank to suspend all or part of its business operations.

Under the prompt warning system, the FSA may take precautionary measures to maintain and promote the sound operations of banks, even before those banks become subject to the prompt corrective action. These measures include requiring a bank to improve its sustainable profitability, credit risk management, stability and cash flow.

*The Bank of Japan*

The BOJ is Japan's central bank and serves as the main instrument for the execution of Japan's monetary policy. The principal measures by which the BOJ implements monetary policy include adjustment of the basic discount rate and basic loan rate, open market operations and imposition of deposit reserve requirements. Banks in Japan are allowed to obtain borrowings from the BOJ. Moreover, most banks in Japan maintain current accounts under agreements with the BOJ pursuant to which the BOJ is entitled to carry out examinations of the banks. The functions of examinations by the BOJ are intended to enable settlement of funds to be smooth among banks and other financial institutions, thereby contributing to the maintenance of an orderly financial system, whereas the supervisory authority of the Prime Minister or the Commissioner of the FSA is intended to maintain the sound operations of banks and promote the security of depositors.

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*Licensing and Authorization*

Under the Banking Act, obtaining a license from the Prime Minister is required in order to engage in banking activities such as (i) acceptance of deposits or installment savings, as well as the lending of funds or the discounting of bills and notes and (ii) dealing in funds transfer transactions. Since PayPay Bank Corporation engages in activities such as accepting deposits or time deposits, lending funds or discounting bills, conducting foreign exchange transactions, and offering online betting services for public competitions, it obtained a banking license from the Financial Reconstruction Commission before its merger with the FSA on September 26, 2000.

Under the FIEA, a financial institution must be registered with the Director of the relevant Local Finance Bureau to engage in any of the (i) brokerage with written orders, (ii) securities business related to government bonds, etc., (iii) mutual fund business, (iv) a business related to foreign securities that have the characteristics of government bonds, (v) Business related to other securities on a regular basis, or if it seeks to provide investment advisory and agency business or engage in securities, etc. management. Since PayPay Bank Corporation conducts over-the-counter derivative transactions, it is registered as a financial institution.

***Certain Restrictions and Regulations under the Banking Act***

As a Japanese banking institution, PayPay Bank Corporation is subject to restrictions and regulations under the Banking Act on various aspects of our banking business, including restrictions on the scope of PayPay Bank Corporation's business, PayPay Bank Corporation's shareholdings of other companies, corporate restructuring and credit limits, and capital adequacy ratio requirements. Certain of the provisions of and regulations under the Banking Act are briefly described below.

*Restrictions on Scope of Business*

Under the Banking Act, banks in Japan are permitted to engage only in the business of acceptance of deposits or installment savings, loans of funds or discounting of bills, and exchange transactions (such businesses are referred to as the "Primary Business"), certain businesses incidental to the Primary Business (such businesses other than the Primary Business are referred to as the "Incidental Business"), and certain other businesses permitted under the Banking Act and other acts.

*Restrictions on Scope of Business of Subsidiaries*

The Banking Act restricts the types of businesses in which Japanese banks may engage through their subsidiaries to, among other things, banking businesses, certain securities businesses and certain financial-related and other Incidental Businesses, with the prior authorization of, or prior notice to, the Commissioner of the FSA. The FSA requires the similar restrictions for (i) a company in which another company holds the majority of voting rights, in addition to a domestic company in which a bank or its subsidiary holds more than 5% of the voting rights in aggregate, (ii) a substance standard subsidiaries and (iii) a related company under the Companies Act and accounting through non-legally binding guidelines.

*Restrictions on Shareholdings of Other Companies*

With the exception of certain companies that banks are permitted to hold as subsidiaries as described under "—Restrictions on Scope of Business of Subsidiaries" above, the Banking Act generally prohibits a bank and/or its subsidiaries from acquiring or holding in the aggregate more than 5% of the total voting rights of all shareholders of another domestic company. Similarly, the Act on Prohibition of Private Monopolization and Maintenance of Fair Trade generally prohibits a bank from acquiring or holding more than 5% of the total voting rights of all shareholders of another domestic company without obtaining prior authorization of the Fair Trade Commission, pursuant to standards established by the Fair Trade Commission.

*Corporate Restructuring*

Under the Banking Act, if PayPay Bank Corporation engage in the following acts without obtaining prior authorization from the Commissioner of the FSA, with certain exceptions, such acts will not be effective:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•any merger involving a bank as a party where the surviving company or the company established by the merger is a bank;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•any corporate split to which a bank is a party; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•a transfer or acquisition of all or part of a business to which a bank is a party.

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*Credit Limits*

The Banking Act restricts the aggregate amount of loans to any single customer or customer group for the purposes of avoiding excessive concentration of credit risks and promoting the fair and extensive utilization of bank credit. The current limits are 25% of the total qualifying capital of the bank and its subsidiaries, including subsidiaries whose decision making organization, organization which determines policies of finance and operation or business, is controlled by the bank and/or its subsidiaries, with respect to a single customer or customer group.

*Matters Required to be Reported*

The Banking Act provides for matters required to be reported to the Commissioner of the FSA, which include the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•planned issuance of stock acquisition rights or bonds with stock acquisition rights;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•planned early redemption of bonds with stock acquisition rights;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•planned repurchase of shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•planned increase of the amount of stated capital; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•implementation of the matters for which a bank had obtained authorization pursuant to the Banking Act.

*Restrictions Applicable to Shareholders of Banks*

Under the Banking Act, a holding company which intends to hold a bank as its subsidiary is required to obtain prior approval of the Commissioner of the FSA. Such a holding company which has obtained such approval is, as a bank holding company under the Banking Act, subject to restrictions and regulations on various aspects of its banking business, including restrictions on the scope of businesses of the bank holding company and its subsidiaries, the shareholdings of other companies by the bank holding company's group, corporate restructuring activities, credit limits on the bank holding company's group, and consolidated capital adequacy ratio requirements, as well as the supervisory authority of the Prime Minister (which is generally entrusted to the Commissioner of the FSA, similar to its supervisory authority over banks).

Under the Banking Act, a person who intends to hold 20% (in certain cases, 15%) or more of the voting rights of a bank is required to obtain prior approval of the Commissioner of the FSA. In addition, the Commissioner of the FSA may request reports or submission of materials from, or inspect, any principal shareholder who holds 20% (in certain cases, 15%) or more of the voting rights of a bank, if necessary in order to secure the sound and appropriate operation of the business of such bank. The Commissioner of the FSA may order such principal shareholder to take such measures as it deems necessary. Also, the Commissioner of the FSA may request any principal shareholder who holds 50% or more of the voting rights of a bank to submit an improvement plan if necessary in order to ensure the sound and appropriate management of a bank and order such principal shareholder to take the measures necessary to ensure such sound and appropriate management of a bank as it deems necessary.

Furthermore, under the Banking Act, any person who becomes a holder of more than 5% of the voting rights of a bank must report its ownership of voting rights to the Commissioner of the FSA or the Director of the relevant Local Finance Bureau, as the case may be, within five business days. In addition, a similar report must be made in respect of any subsequent change of 1% or more in any previously reported holding or any change in material matters set forth in reports previously filed, with some exceptions.

*Capital Adequacy Ratios*

*Overview*

The FSA has taken actions to implement new capital adequacy ratio requirements in accordance with the approach adopted in Basel III. Following the amendments to the capital adequacy ratio requirements applicable only to international standard banks (i.e., banks with international operations) (which came into effect in March 2013 with certain transitional measures), the FSA further enacted certain amendments to the capital adequacy ratio requirements applicable to domestic standard banks (i.e., banks with no international operations), including us, with the aim of improving quality of their capital. As a result of these amendments, regulatory capital used in calculating the capital adequacy ratio of domestic standard banks under Basel III is basically limited to common stock and preferred stock that is mandatorily convertible into common stock, while other preferred securities and subordinated debt are excluded. In addition, the amendments in order to implement the finalized capital adequacy ratio requirements under Basel III including with respect to credit risks, credit valuation adjustment (CVA) risks, market risks and operational risks have been applied from March 31, 2024 in respect of international standard banks and domestic standard banks

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which use internal models to calculate the amount of risk, and have been applied from March 31, 2025 in respect of other domestic standard banks including PayPay Bank Corporation (in both cases, banks that have notified the FSA that they wish to apply finalized Basel III standards earlier have applied the amendments from March 31, 2023 at the earliest).

*Capital Adequacy Ratio Requirements for Domestic Standard Banks*

Under the current capital adequacy ratio requirements for domestic standard banks, including PayPay Bank Corporation, the FSA requires a minimum capital adequacy ratio of 4.0% on both a consolidated and a non-consolidated basis for banks, which is calculated by dividing the amount of Core Capital (as defined below) by the amount of risk-weighted assets.

Core Capital is generally defined as the sum of the amount of common stock and retained earnings, which have high loss-absorbing capacity, and preferred stock that is mandatorily convertible into common stock, general reserve for possible loan losses (up to an amount not more than 1.25% of credit risk-weighted assets) and certain other items, less the amount of adjustment items including certain deferred tax assets.

The amount of risk-weighted assets is calculated as the sum of credit risk-weighted assets (the amounts of the relevant assets multiplied by risk weights applicable thereto), an amount calculated by dividing the market risk (the amount of risk of loss due to market fluctuations, such as fluctuations in interest rates, stock prices and currency rates) by 8% and an amount calculated by dividing the operational risk (the amount of risk of loss due to various accidents, such as operational accidents, internal operating system troubles, fraudulent activities and troubles arising from external factors) by 8%. We have, however, adopted special exemptions for market risk amount under which we have not included the amount calculated by dividing the market risk by 8% in our risk-weighted assets.

The amended capital adequacy ratio requirements for domestic standard banks are being phased-in over a transitional period, which began on March 31, 2014, or the Applicable Date. Depending on the matters subject to the transitional arrangements, transitional periods were established. The first period ended in 2019, and other periods ended in 2024 and will end in 2029, respectively.

*Leverage Ratio*

To prevent the occurrence of deleveraging and of resulting damage to the broader financial system and economy and to reinforce the risk based capital adequacy ratio requirements, the Basel Committee introduced the non-risk based leverage ratio requirements in the Basel III framework in December 2010. The text of the leverage ratio has been revised several times, including in June 2013, January 2014 and December 2017.

Under the revised text of the leverage ratio, leverage ratio is defined as the ratio of the capital measure to the exposure measure. In Japan, the relevant FSA regulations have been promulgated to require international standard banks to publicly disclose their consolidated and non-consolidated leverage ratios from March 31, 2015. Furthermore, international standard banks have been required to maintain a leverage ratio of at least 3% on both a consolidated basis and a non-consolidated basis from March 31, 2019. The FSA implemented G-SIB surcharge from March 31, 2023 in respect of international standard banks and amended the leverage ratio requirements under the Basel III finalization framework, which have been applied to international standard banks from March 31, 2024 (banks that have notified the FSA that they wish to apply finalized Basel III standards earlier have applied the amendments from March 31, 2023 at the earliest). The FSA raised the minimum leverage ratio to 3.15% from April 1, 2024.

Although, as of the date of this Annual Report, specific regulations in respect of the leverage ratio applicable to Japanese domestic standard banks, including PayPay Bank Corporation, have yet to be issued in Japan, the FSA may introduce such regulations in the future.

*Liquidity*

The Basel III framework is aimed at strengthening global liquidity regulations. In December 2010, the Basel Committee announced the liquidity portion of the Basel III framework. This framework is intended to set out requirements for holding more qualified capital and better risk coverage, and it introduced two global liquidity standards.

The first of the two new global liquidity standards is the Liquidity Coverage Ratio, or the LCR, intended to promote short-term resilience in the liquidity risk profile of banks by ensuring that they have sufficient high-quality liquid assets to survive a significant stress scenario lasting 30 calendar days. The second is the Net Stable Funding Ratio, or the NSFR, which has been developed to ensure a sustainable structure of assets and liabilities, taking into

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account their maturities, with the goal of promoting resilience over longer time horizon by creating additional incentives for banks to secure funds from more stable sources of funding on an ongoing basis.

The Basel Committee revised the text of the LCR and NSFR in January 2013 and October 2014, respectively, which provide the framework to require banks to maintain minimum LCR and NSFR of 100%, which is the minimum requirement in normal conditions.

In Japan, the LCR requirements applicable to international standard banks were introduced on March 31, 2015 and was fully implemented on January 1, 2019. The NSFR requirements applicable to international standard banks were also introduced on September 30, 2021. With respect to sound management of liquidity, international standard banks are required to (i) disclose quantitative information regarding the LCR and NSFR on a quarterly basis, (ii) disclose qualitative information regarding the NCR and NSFR on a semi-annual basis and (iii) disclose matters relating to management of liquidity risk annually, as well as maintain minimum LCR and NSFR of 100%.

Although, as of the date of this Annual Report, specific regulations in respect of the LCR or the NSFR applicable to Japanese domestic standard banks, including PayPay Bank Corporation, have yet to be issued in Japan, the FSA may introduce such regulations in the future.

*Duty to provide information*

In relation to acceptance of deposits or installment savings, a bank is required to provide depositors with the information by clearly indicating interest rates for principal deposits, fees pertaining to handling the deposits and deposits which are subject to receive payment of insurance as prescribed in Article 53 of the Deposit Insurance Act, explaining corresponding to a request of depositor by using a document stating, among others, name of financial instruments, scope of persons subject to acceptance, period of deposit, minimum amount of deposit, unit of deposit method of payment, matters concerning interest and fees. In addition, if a bank concludes an agreement regarding deposits or installments savings that may incur losses on their principal due to fluctuations related to the indicators, such a bank must comply with the regulation under the Financial Instruments and Exchange Act such as (i) advertising restrictions, (ii) obligations to provide written documents prior to contract conclusion, (iii) obligations to provide written documents at the time of contract conclusion, (iv) prohibitions on compensation for losses, and (v) the principle of suitability.

As part of its information management system for customer-related data, banks are required to implement necessary and appropriate measures to secure information pertaining to individual customers. This includes supervising employees and third parties to whom the handling of such information is outsourced, in order to prevent any leakage, loss, or damage. In the event of any leakage, loss, or damage, or if there is a risk of such an event, a bank must promptly report the incident to the Commissioner of the FSA etc. and take other appropriate actions.

*Inspection and Examination of Banks*

The Banking Act authorizes the Commissioner of the Director of the relevant Local Finance Bureau (the Commissioner of the FSA shall not be prevented from conducting inspections) to inspect banks in Japan at any time. The FSA inspects the soundness and appropriateness of banks' operations, including the status and performance of their control systems for business activities, by inspecting evaluations performed by banks' self-assessment systems, and reviewing their compliance with laws and regulations. The inspections of banks are performed pursuant to "the approach and procedures for the inspection and supervision of loans after the abolition of the Manual" published on December 18, 2019.

Currently, the FSA takes the "better regulation" approach in its financial regulation and supervision in pursuit of improvement of the quality of financial regulation and supervision. This consists of four pillars: optimal combination of rules-based and principles-based supervisory approaches; timely recognition of priority issues and effective response; encouraging voluntary efforts by financial institutions and placing greater emphasis on providing them with incentives; and improving the transparency and predictability of regulatory actions.

The BOJ also conducts examinations of banks separated from the inspection of banks undertaken by the FSA. The examinations involve reviewing actual conditions of operation and risk management systems. Through these examinations, the BOJ seeks to identify problems at an early stage and give corrective guidance where necessary.

In addition, the Securities and Exchange Surveillance Commission examines banks in connection with their financial instruments business activities in accordance with the FIEA.

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***Deposit Insurance Act***

Under the Deposit Insurance Act of Japan, or the Deposit Insurance Act, depositors are protected through the Deposit Insurance Corporation of Japan, or the DIC, in cases where financial institutions fail to fulfill their obligations. The DIC is supervised by the Commissioner of the FSA and the Minister of Finance.

The DIC receives annual insurance premiums from insured financial institutions. For the year ended March 31, 2026, a premium rate of 0.022% for the deposits that bear no interest and are used primarily for payment which were raised from the rates applicable for the year ended March 31, 2025 of 0.021% and settlement purposes and a premium rate of 0.014% for other ordinary deposits were applied.

The insurance money may be paid out to depositors in the case of a suspension of deposit repayments, license revocation, dissolution or bankruptcy of a financial institution. For each depositor, pay-outs are generally limited to a maximum of ¥10 million of principal amount covered by the deposit insurance with any interest accrued thereon. Only non-interest bearing deposits, redeemable on demand and used by depositors primarily for payment and settlement functions are protected in full.

Participation in the deposit insurance system is compulsory for city banks, regional banks, trust banks, shinkin banks and credit co-operatives, labor banks and other financial institutions.

***Governmental Measures to Treat Troubled Institutions***

*General Framework of Resolution Procedure*

The basic method of resolution for a failed financial institution under the Deposit Insurance Act is cessation of the business by paying insurance money to the depositors up to the principal amount of ¥10 million plus accrued interest per depositor, the so-called "pay-off," or transfer of the business to another financial institution with financial "aid provided within the cost of pay-off." Generally, transfer of the business is regarded as the primary method. In order to enable a prompt transfer of the business, the following framework has been established.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•A Financial Reorganization Administrator will be appointed by the Commissioner of the FSA and will take control of the management and assets of the failed financial institution. Such Financial Reorganization Administrator is expected to efficiently search for a financial institution that will succeed to the business of such failed institution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•In the case where no successor financial institution can be immediately found, a "bridge bank" will be established by the DIC for the purpose of the temporary maintenance and continuation of the failed financial institution's operations, and the bridge bank will seek to transfer the failed financial institution's assets to another financial institution or dissolve the failed financial institution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•In order to facilitate or encourage a financial institution to succeed a failed business, the DIC may provide financial aid such as (i) donation of money, (ii) loans or depositing of funds, (iii) purchase of assets, (iv) guarantees of obligations, (v) assumption of obligations, (vi) subscription for preferred shares, etc., and (vii) collateralization of damage or indemnify any loss incurred as a result of such succession. In addition, the DIC may provide loans in order to protect depositors and promote equity among creditors of failed financial institutions.

*Addressing Potential Financial Crises*

If the Commissioner of the FSA recognizes that the failure of a bank falling within any of the circumstances described in (i) through (iii) below has the potential to cause significant problems in maintaining the financial order in Japan or the region where such bank is operating ("systemic risk"), unless the measures described in (i) through (iii) below are taken, the Commissioner of the FSA may confirm the taking of any of such measures, following deliberations by the Financial Crisis Management Meeting: (i) if the bank is not a bank described in (ii) or (iii), the DIC may subscribe for shares or subordinated bonds of or extend subordinated loans to the bank, or subscribe for shares of the holding company of the bank, in order to enhance the bank's capital adequacy; (ii) if the bank is at risk of suspending or has suspended repayment of deposits or its liabilities exceed its assets, financial aid necessary to meet obligations to depositors in excess of deposit insurance may be made available to such bank; and (iii) if the bank is at risk of suspending or has suspended repayment of deposits and its liabilities exceed its assets, and systemic risk cannot be avoided through measures described in (ii) above, the DIC may acquire all of the bank's shares. Expenses for the implementation of the above measures will be borne by the banking industry, with an exception under which the government may provide partial subsidies for such expenses.

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Pursuant to certain amendments to the Deposit Insurance Act that were promulgated in June 2013 and became effective on March 6, 2014, a resolution regime for financial institutions was introduced in Japan. Under these amendments and related implementing ordinances, this regime is applicable to financial institutions including banks, insurance companies and securities firms and their holding companies.

The resolution regime provides, among other things, that if the Commissioner of the FSA recognizes that failure of a financial institution falling within either (a) or (b) below may cause significant disruption in financial markets or other financial systems in Japan, unless measures described in (a) or measures described in (b) are taken, the Commissioner of the FSA may confirm the taking of any of such measures, following deliberations by the Financial Crisis Management Meeting: (a) if the financial institution's liabilities do not exceed its assets, the DIC shall supervise the operations of, and the management and disposal of assets of, such financial institution, and may provide it with loans or guarantees necessary to avoid the risk of significant disruption in financial systems in Japan, or subscribe for shares or subordinated bonds of or extend subordinated loans to such financial institution, in each case as necessary taking into consideration the financial condition of the financial institution; and (b) if the financial institution's liabilities exceed or are likely to exceed its assets, or the financial institution has suspended or is likely to suspend repayment of its obligations, the DIC shall supervise such financial institution, and may provide financial aid necessary to assist a merger, business transfer, corporate split or other reorganization in respect of such financial institution. The expenses for the implementation of the measures under this regime will be borne by the financial industry, with an exception under which the government may provide partial subsidies for such expenses.

If the taking of measures described in (b) above is determined with respect to a financial institution, the Commissioner of the FSA may order that such financial institution's operations and assets be placed under the control of the DIC. The business or liabilities of a financial institution subject to supervision of the DIC as set forth in (b) above may also be transferred to a "bridge bank" established by the DIC for the purpose of the temporary maintenance and continuation of operations of, or repayment of the liabilities of, such financial institution; and the bridge bank will seek to transfer the financial institution's business or liabilities to another financial institution or dissolve the financial institution. Financial aid provided by the DIC to assist a merger, business transfer, corporate split or other reorganization in respect of a financial institution, as described in (b) above, may take the form of purchase of assets, subscription of preferred stock or subordinated bonds, extension of subordinated loan, or loss sharing.

***Act on Special Measures for Strengthening Financial Functions***

The Act on Special Measures for Strengthening Financial Functions of Japan, or the Strengthening Financial Functions Act, was enacted in 2004 in order to establish a scheme of public money injection into financial institutions and thereby enhance the soundness of such financial institutions on or prior to March 31, 2008 and revitalize economic activities in the regions where they do business. In 2008, certain amendments to the Strengthening Financial Functions Act took effect. These amendments relaxed certain requirements for public money injection into Japanese banks and other financial institutions under the prior scheme and extended the period of application therefor, which had expired on March 31, 2008, to March 31, 2012. These amendments aimed to promote not only the soundness of such financial institutions but also loans or other forms of credit extended to SMEs in order to revitalize local economies. In 2011, in response to the March 2011 Great East Japan Earthquake, an amendment to the Strengthening Financial Functions Act was enacted to further extend the expiration date described above to March 31, 2017. This amendment was also intended to facilitate capital injections into financial institutions affected by the March 2011 Great East Japan Earthquake that required capital enhancement in order to smoothly extend loans in their principal business regions. In 2016, an amendment to the Strengthening Financial Functions Act was enacted that further extended the expiration date to March 31, 2022. In 2020, in the wake of the COVID-19 pandemic, the expiration date was further extended to March 31, 2026, after relaxing the requirements for applications and removing the deadline for repayment of the injected public money. In 2021, an amendment to the Strengthening Financial Functions Act was enacted to maintain financial functions that support the post COVID-19 recovery and revitalization of the regional economy in areas with declining populations.

***Act on Emergency Measures for the Revitalization of the Financial Functions***

The prompt corrective action system requires financial institutions to establish a self-assessment program that complies with related acts such as the Financial Revitalization Act. Under "the approach and procedures for the inspection and supervision of loans after the abolition of the Manual," financial institutions are required to establish a self-assessment program reflecting their own policies based on their business strategy and business environment. The results of self-assessment should be reflected in the amount of write-offs and reserves according to the standard established by financial institutions pursuant to the guidelines issued by the Japanese Institute of Certified Public Accountants. Based on the results of the self-assessment, financial institutions may establish reserve amounts for their loan portfolio at the relevant balance sheet reference date, even if all or part of such reserves may not be immediately tax deductible under Japanese tax law.

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***Act on Limitation on Shareholding by Banks and Other Financial Institutions***

The Act on Limitation on Shareholding by Banks and Other Financial Institutions of Japan requires Japanese banks and their subsidiaries to limit the aggregate market value (excluding unrealized gains, if any) of their holdings in equity securities (excluding certain equity securities prescribed by the related cabinet order) to an amount equal to 100% of their consolidated capital (calculated according to the formula provided for calculating the numerator of the capital adequacy ratio stated in "—Certain Restrictions and Regulations under the Banking Act—Capital Adequacy Ratios" above) in order to reduce exposure to stock price fluctuations.

***Other Regulations***

PayPay Bank Corporation is also subject to certain regulations concerning registered financial institutions under the FIFA (see "—PayPay Corporation—The FIEA"), the Interest Rate Restriction Act (see "—PayPay Card Corporation—Regulation on Interest Rate") and the Act on the Provision and the Improvement of the Environment of Financial Services (see "—PayPay Securities Corporation—The Act on the Provision and the Improvement of the Environment of Financial Services").

**PayPay Securities Corporation**

***The FIEA***

The FIEA regulates most aspects of transactions and businesses that relate to financial instruments in Japan, including public offerings, private placements, and the secondary trading of securities; ongoing disclosure by securities issuers; tender offers for securities; the organization and operation of securities exchanges and self-regulatory associations; and the registration of financial instruments business operators (the "FIBOs"), such as PayPay Securities Corporation. The Commissioner of the FSA has the authority to regulate financial instruments businesses. The Securities and Exchange Surveillance Commission is vested with the authority to conduct day-to-day monitoring of the securities markets, and to investigate irregular activities that hinder the fair trading of securities, including the authority to inspect FIBOs. Furthermore, the Commissioner of the FSA delegates certain authority to the Director of the relevant Local Finance Bureau, to inspect local FIBOs and branches. A violation of the applicable laws and regulations may result in various administrative sanctions, including the revocation of a registration or authorization, a suspension of business operations, or an order to discharge any director or audit and supervisory board member who has failed to comply with applicable laws and regulations. In addition, PayPay Securities Corporation is subject to the rules and regulations of the Japanese stock exchanges and the rules and regulations of self-regulatory associations, including the Japan Securities Dealers Association.

Any person seeking to engage in any of the following businesses must obtain registration as a Type I FIBO: (i) businesses related to highly liquid securities; (ii) businesses related to commodity-related market derivatives transactions; (iii) businesses related to over-the-counter derivative transactions; (iv) businesses related to the underwriting of securities; (v) businesses related to private trading systems (PTS); or (vi) businesses related to the receipt of deposits of securities or money, the opening of accounts, and the transfer of bonds or other securities. PayPay Securities Corporation handles Japanese stocks, U.S. stocks, and investment trusts, supports users' transactions, and conducts business related to highly liquid securities, over-the-counter derivative transactions, and securities management. As such, PayPay Securities Corporation is registered with the Kanto Local Finance Bureau as a Type I FIBO.

A Type I FIBO, such as PayPay Securities Corporation, is required to maintain adjusted capital at specified levels, as compared with the quantified total of its business risks, on a non-consolidated basis. PayPay Securities Corporation as a Type I FIBO is required to calculate its capital adequacy ratio and notify the Director of the Kanto Local Finance Bureau of the capital adequacy ratio at the end of each month. In addition, PayPay Securities Corporation as a Type I FIBO is required to calculate its capital adequacy ratio and immediately notify the Commissioner of the FSA of the capital adequacy ratio whenever the ratio falls below 140%, and to prepare a notification of its capital adequacy ratio for each business day and submit it to the Director of the Kanto Local Finance Bureau without delay. If a Type I FIBO's capital adequacy ratio falls below 120%, the Commissioner of the FSA may order it to take certain measures to rectify the situation. A Type I FIBO whose capital adequacy ratio falls below 100% may be subject to additional proceedings, including, in certain circumstances, the temporary suspension of its business, or the revocation of its registration as a Type I FIBO.

In addition, each of the minimum amount of stated capital and the minimum net assets of a Type I FIBO is 50 million yen.

A Type I FIBO may not conduct any business other than the financial instruments business and other businesses stipulated by the FIEA.

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In addition, Mizuho Securities Co., Ltd. holds 24.8% of the shares of PayPay Securities Corporation, and since Mizuho Financial Group, Inc. (a bank holding company under the Banking Act) is the parent company of Mizuho Securities Co., Ltd., PayPay Securities Corporation falls under the category of "affiliated corporation, etc." of a bank holding company under the Banking Act. Under the Banking Act, PayPay Securities Corporation is required to be classified as a company specialized in securities, and the scope of PayPay Securities Corporation' business is limited to the scope of business permitted for a company specialized in securities under the Banking Act.

Prior to entering into a financial instruments transaction contract, FIBOs are generally required to provide customers with information such as their trade name, registration number, an outline of the relevant contract to be entered into, the fees to be paid by the customer, matters related to market risks, and other material matters of the relevant financial instruments business that may have an impact on customers' judgment. In addition, FIBOs are generally obligated to provide explanations in a manner and to the extent necessary for the customer to understand the information provided. FIBOs are also generally obligated to provide customers with information regarding matters related to financial instruments transaction contracts at the time of contract conclusion.

As a Type I FIBO, PayPay Securities Corporation is subject to firewall regulations. Specifically, PayPay Securities Corporation is generally prohibited from conducting a purchase and sale or other transaction of securities or an over-the-counter derivative transaction under terms and conditions which differ from ordinary ones and are likely to be detrimental to the fairness of transactions with its parent corporation, etc., including PayPay Corporation, or subsidiary corporation, etc., including PPSC Investment Service Corporation (Arm's Length Rule). In addition, receiving or providing non-public information about customers from parent corporation, etc. or subsidiary corporation, etc., or soliciting the conclusion of financial instruments transaction contracts by using non-public information about customers obtained from parent corporation, etc. or subsidiary corporation, etc. is generally prohibited, except in cases where there are statutory exceptions.

Moreover, PayPay Securities Corporation, as a Type I FIBO, is required to establish an appropriate conflict of interest management system within the company.

A shareholder who has acquired 20% (or 15%, if there are certain facts indicative of material influence over the decisions of the company in relation to its financial and operational policies) or more of the voting rights of a Type I FIBO, or a Type I FIBO Principal Shareholder, such as PayPay Corporation, is required to submit a notification describing, among other things, the ownership of the shares and the purpose of the acquisition, to the Director of the relevant Local Finance Bureau. In limited circumstances, the Commissioner of the FSA may order a Type I FIBO Principal Shareholder to take actions to resign from the position as a Type I FIBO Principal Shareholder, including requiring the disposition of such shares as are held by the Type I FIBO Principal Shareholder. A prompt filing with the Director of the relevant Local Finance Bureau is also required when a person or entity ceases to be a Type I FIBO Principal Shareholder. In addition, the Commissioner of the FSA may request the submission of reports or materials from, or may conduct inspections of, any Type I FIBO Principal Shareholder as well as Type I FIBOs.

***The Act on the Provision and the Improvement of the Environment of Financial Services***

The Act on the Provision of Financial Services imposes a duty of good faith on financial service providers (including PayPay Securities Corporation) to conduct their business fairly and in good faith toward their customers, taking into consideration the best interests of their customers. The Act on the Provision of Financial Services also provides for measures to protect customers by (i) requiring financial instruments providers to explain adequately to customers certain material matters such as risks of losses incurred by customers, and the mechanisms of financial products causing losses and (ii) requiring financial instruments providers to ensure that their solicitation of customers to purchase financial products are made in a fair manner, taking into account the customer's knowledge, experience, financial condition, and purpose; and prohibiting financial instruments providers from providing deceptive or misleading information in respect of uncertain matters in connection with the sale of financial products. Further, this Act holds financial instruments providers liable for damages caused by a failure to follow these requirements. The amount of damages is refutably presumed by this Act to be the loss of principal.

**Other Regulations**

***Act on the Promotion of Ensuring National Security Through Integrated Implementation of Economic Measures***

*Regulations on Specified essential infrastructure business*

Under the Act on the Promotion of Ensuring National Security Through Integrated Implementation of Economic Measures, the competent minister may designate those who engage in specified essential infrastructure businesses as specified essential infrastructure service providers. This designation applies when the suspension or degradation of the function of the specified critical facilities in use is highly likely to cause a situation that undermines the security

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of Japan. "Specified essential infrastructure business" is the provision of certain specified services forming the basis of the lives of the Japanese citizenry or economic activity, and the hindrance of stable provision of such services is likely to cause a situation that undermines the security of Japan. "Specified critical facilities" are facilities, devices, equipment or programs that are critical for the stable provision of specified essential infrastructure services and are likely to be used as a means for interference, originating outside Japan, with the stable provision of these services.

PayPay Corporation is designated in connection with its funds transfer business and third-party prepaid payment instruments issuing business under the Payment Services Act, and PayPay Card Corporation is designated in connection with its intermediation business of comprehensive credit purchases under the Installment Sales Act as specified essential infrastructure service providers, respectively. In principle, when a specified essential infrastructure service provider introduces specified critical facilities from third parties or outsources material maintenance, management or operation of specified critical facilities to third parties, the specified essential infrastructure service provider must, in advance, notify the competent minister of a plan regarding such planned introduction or outsourcing. Specified essential infrastructure service providers that have made such notification may not carry out such plan until 30 days have passed since the day on which the competent minister receives the relevant notification; provided, however, that this period may be shortened when the competent minister finds that a screening is not necessary or, as a result of a screening, that the relevant specified critical facilities are not highly likely to be used as a means for interference actions. During the screening process, the competent minister may recommend the specified essential infrastructure service provider to take measures necessary to prevent interference actions or to suspend the notified activities. In addition, even after a screening has been completed and a specified essential infrastructure service provider is authorized to proceed with the relevant plan, the competent minister retains the authority to recommend that the specified essential infrastructure service provider implement inspections or maintenance checks, change the outsource, or take other necessary measures to prevent interference actions.

In connection with funds transfer business and third-party prepaid payment instruments issuing business, information processing systems designed to perform all or part of the data processing related to funds transfer services and the issuance of third-party prepaid payment instruments under the Payment Services Act (limited to cases where the suspension of such processing would likely cause significant disruption to the relevant business) and the information processing systems that operate such information processing systems are designated as specified critical facilities. In connection with intermediation business of comprehensive credit purchases, information processing systems that (i) handle matters related to credit card, etc. membership agreements, or centrally manage information related to credit card, etc. membership agreements, (ii) confirm the identity of persons who have received cards or other items prior to concluding comprehensive credit purchase brokerage agreements, (iii) send and receive information related to applications for comprehensive credit purchase brokerage agreements, (iv) detect unauthorized use of credit card numbers, etc., or the possibility thereof based on the information referred to in (iii), (v) confirm whether to accept applications for comprehensive credit purchase brokerage agreements based on information referred to in (i) and (iii), or (vi) replace the system referred to in (v) in the event of temporary suspension of the system or in other cases are designated as specified critical facilities. Therefore, if PayPay Corporation or PayPay Card Corporation intend to introduce or entrust the critical maintenance and management of such systems, PayPay Corporation or PayPay Card Corporation must comply with the above regulations.

***Regulations under the Foreign Exchange and Foreign Trade Act***

We comply with the following regulations under the Foreign Exchange and Foreign Trade Act for the purpose of preventing money laundering and terrorist financing:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•PayPay Corporation, a funds transfer service provider, and PayPay Bank Corporation, as a bank, are classified as foreign exchange transaction operators. Therefore, they are required to set certain standards and comply with the standards when making a payment or receiving payment (collectively, "payments" in this paragraph), conducting foreign exchange transactions related to such payments of customers, or conducting capital transactions or specific capital transactions (collectively, "foreign exchange transactions" in this paragraph). The content of these standards includes, for example: (i) identifying various risks, including the risk such as the possibility of conducting transactions that may fall under regulated transactions as defined in the Foreign Exchange and Foreign Trade Act, analyzing and evaluating the degree of such risks, and preparing a document containing the results of the analysis and evaluation; (ii) preparing a procedure manual that specifies policies and measures to sufficiently reduce the risks described in a document created in (i) and conducting foreign exchange transactions in accordance with such manual.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•PayPay Corporation, a funds transfer service provider, and PayPay Bank Corporation, as a bank, are required to confirm in advance, prior to conducting foreign exchange transactions, that either (i) the payments made by customers do not fall under (a) the payments requiring the approval of the Minister of Finance or (b) the payments related to capital transactions requiring the approval of the Minister of Finance, or (ii) they have obtained such approval.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•PayPay Corporation, a funds transfer service provider, and PayPay Bank Corporation, as a bank, are required to verify the identity of customers (excluding Exchange non-residents) when conducting foreign exchange transactions related to payments from Japan to foreign countries or the payments with Exchange non-residents (limited to amounts exceeding JPY 100,000).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•PayPay Bank Corporation, as a bank, and PayPay Securities Corporation, as a financial instruments business operator, are required to verify the identity of customers when conducting capital transactions with customers.

***The Act on Prevention of Transfer of Criminal Proceeds***

Under the Act on Prevention of Transfer of Criminal Proceeds, fund transfer service providers, issuers of high-value, electronically transferable prepaid payment instruments, credit card providers, money lending business providers, banks, financial instruments business operators and other entities, including PayPay Corporation, PayPay Card Corporation, PayPay Bank Corporation and PayPay Securities Corporation, are required to perform verification procedures of customer identifications and keep records of customer identifications and transactions with customers as prescribed by a ministerial ordinance. The Act on Prevention of Transfer of Criminal Proceeds also requires fund transfer service providers, issuers of high-value, electronically transferable prepaid payment instruments, credit card providers, money lending business providers, banks, financial instruments business operators and other entities, including PayPay Corporation, PayPay Card Corporation, PayPay Bank Corporation and PayPay Securities Corporation, to report to a competent authority if they determine that there is suspicion that any property received from a customer has been obtained illegally or the customer conducts certain criminal acts.

***The Act on the Protection of Personal Information***

The Act on the Protection of Personal Information and related guidelines cover all business operators that utilize or maintain databases containing personal information, and thus apply to PayPay Corporation, PayPay Card Corporation, PayPay Bank Corporation and PayPay Securities Corporation. Pursuant to this Act, business operators are required to (i) specify the purpose for which personal information will be used prior to handling the information, (ii) save for cases expressly permitted under the Act, refrain from using such personal information beyond the purpose specified without obtaining the prior consent of the person to whom such information relates, (iii) save for cases expressly permitted under the Act, refrain from disclosing such personal information to a third party without obtaining the prior consent of the person to whom such information relates, and (iv) take necessary and appropriate measures to securely manage and prevent leakage, damage and loss of the personal information.

***The Act on Prohibition of Private Monopolization and Maintenance of Fair Trade***

Since PayPay Corporation has a large market share in the code-based payment service, changes to our operations and offerings of new services may be limited in order to comply with the Act on Prohibition of Private Monopolization and Maintenance of Fair Trade.

 **C Organizational structure**

We are part of the corporate group headed by SoftBank Group Corp. (the "SoftBank Group"). Within the SoftBank Group, we operate a digital financial services platform business in Japan. As of the date of this annual report, the principal SoftBank Group entities with equity interests in us are: B Holdings Corporation, which is jointly owned by SoftBank Corp. and LY Corporation; SVF II Piranha (DE) LLC, an investment fund ultimately controlled by SoftBank Group Corp.; and SoftBank Corp. and LY Corporation, each of which also holds a direct equity interest in us.

Our significant subsidiaries are PayPay Bank Corporation, PayPay Securities Corporation, and PayPay Card Corporation, all of which are incorporated in Japan.

The following diagram illustrates our corporate structure as of May 31, 2026, including our significant subsidiaries and the proportion of ownership interest and, unless otherwise indicated, voting power held by us in each such subsidiary. Certain entities that are immaterial to our results of operations, business and financial condition are omitted.

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**Corporate Structure**

![img261977339_2.jpg](img261977339_2.jpg)

Note: As of May 31, 2026

**D Property, plants and equipment**

Refer to "Item 4. Information on the Company—B. Business Overview—Facilities" for information about material tangible fixed assets.

**Item 4A. Unresolved Staff Comments**

None.

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**Item 5. Operating and Financial Review and Prospects**

**A.** **Operating results**

**Key Components of Results of Operations**

***Transaction and Service Income***

Transaction and service income represents revenue earned from contracts with customers after deducting certain promotional incentives and rewards extended to our merchants and credit card holders and consists primarily of payment processing fees, merchant discount fees, and service charges associated with our payment settlement services, credit card issuing and acquiring, securities brokerage, and other customer-facing financial services.

For the years ended March 31, 2024, 2025 and 2026, transaction and service income was ¥174,127 million, ¥203,595 million, and ¥251,041 million, respectively, representing year-over-year growth of 16.9% in the year ended March 31, 2025 and 23.3% in the year ended March 31, 2026. The increase in transaction and service income was driven by strong growth in both the Payment and Financial service segments, reflecting expansion in user engagement, merchant adoption, and product uptake.

<u>Payment Segment</u>

In the Payment segment, transaction and service income is primarily derived from: (i) code-based PayPay Settlement Services, in which we earn a transaction fee by acting as a principal between the merchant and the user; (ii) Credit Payment Services, including interchange fees from PayPay Card usage and merchant acquiring activity; and (iii) Subscription revenue and value-added services, including promotions and marketing support to PayPay merchants, which are companies that our group provides the PayPay Settlement Services platform to as a method of payment in their stores, based on a contract between our group and such merchants.

For the year ended March 31, 2026, transaction and service income from external customers in the Payment segment totaled ¥220,770 million, up from ¥176,597 million in the year ended March 31, 2025 and ¥149,310 million in the year ended March 31, 2024. Revenue has continued to grow steadily over the past three fiscal years primarily driven by growth in Payment Segment GMV supported by increased adoption of PayPay Credit and PayPay Card as well as continued increase in Payment Segment Monthly GMV per MTU.

<u>Financial Service Segment</u>

In the Financial service segment, transaction and service income primarily includes: (i) Ancillary internet banking and platform usage fees through PayPay Bank Corporation; and (ii) Commissions and service fees earned through digital securities intermediary services from PayPay Securities Corporation, including revenues generated through the PayPay Invest platform (PayPay point management system).

Transaction and service income from external customers in the Financial service segment totaled ¥30,271 million in the year ended March 31, 2026, up from ¥26,998 million in the year ended March 31, 2025 and ¥24,817 million in the year ended March 31, 2024. These increase were primarily driven by increase in the number of PayPay Bank Deposit accounts and PayPay Securities accounts.

***Interest Income***

Interest income consists primarily of interest earned on loans and advances to customers and other interest-bearing financial assets. Interest income is generated across both our Payment and Financial service segments, with distinct asset sources and yield dynamics.

For the years ended March 31, 2024, 2025 and 2026, total interest income was ¥73,884 million, ¥88,442 million, and ¥116,488 million, respectively, representing year-over-year growth of 19.7% in the year ended March 31, 2025 and 31.7% in the year ended March 31, 2026. The increase in each period was driven by expansion in our loan and credit receivable balances, as well as improved loan-to-deposit efficiency within PayPay Bank Corporation.

<u>Payment Segment</u>

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In the Payment segment, interest income is primarily generated from: (i) Revolving credit, installment payments, and cash advances provided through PayPay Card Corporation; and (ii) Treasury investments and short-term placements related to settlement operations.

For the year ended March 31, 2026, interest income attributable to the Payment segment was ¥84,574 million, compared to ¥68,623 million in the year ended March 31, 2025 and ¥59,013 million in the year ended March 31, 2024. The year-over-year growth reflects the expansion of our credit card receivables including revolving, installment and cash advances, which increased from ¥1,001.9 billion as of March 31, 2025 to ¥1,276.5 billion as of March 31, 2026, net of allowances. As credit usage and repayment data accumulated, we were able to refine credit segmentation and set annual percentage rates, or APRs, based on more tailored risk assessments. From the second half of 2024, additional measures we took to optimize credit limits contributed to increased loan adoption and user engagement, supporting stable growth in interest income.

<u>Financial Service Segment</u>

Interest income in the Financial service segment is derived from loan management services: (i) Overdrafts (for consumers and businesses), business loans, and mortgage loans offered by PayPay Bank Corporation; and (ii) Liquidity investments and other interest-bearing assets, including government and corporate bonds.

Interest income for the Financial service segment was ¥32,674 million in the year ended March 31, 2026, up from ¥19,819 million in the year ended March 31, 2025 and ¥14,871 million in the year ended March 31, 2024. Growth in this segment reflects the increase in total loans and advances from ¥925.7 billion in the year ended March 31, 2025 to ¥1,236.3 billion in the year ended March 31, 2026, net of allowance. The increase in interest income was driven primarily by the expansion of loan balances of consumers, as well as the end of the Bank of Japan's negative interest rate policy in early 2024 and the subsequent rise in benchmark rates and bond yields.

Across both segments, our NIM was 2.70% in the year ended March 31, 2026, compared to 2.61% in the year ended March 31, 2025, supported by low funding costs and disciplined pricing. As we continue to scale our lending activities and optimize the mix between payment-related credit and banking loans, we believe interest income will remain a key driver of revenue and operating leverage.

***Gains (Losses) on Financial Instruments***

Gains (losses) on financial instruments primarily reflect realized and unrealized fair value movements in our investment securities, derivatives, and other financial instruments measured at fair value through profit or loss , or FVTPL, as well as dividends received on equity investments. This line item also includes gains or losses on trading portfolios for client facilitation trading at PayPay Securities Corporation and foreign exchange gains or losses and valuation adjustments on trading portfolios mainly held by PayPay Bank Corporation.

For the years ended March 31, 2024, 2025 and 2026, we recognized gains (losses) on financial instruments of ¥4,641 million, ¥5,529 million, and ¥10,250 million, respectively. The steady increase over the period reflects both the expansion of our investment portfolio and changes in market conditions impacting valuation of financial assets held at fair value.

This line item is more volatile and sensitive to market dynamics than our core revenue streams. We actively manage our investment risk exposures through asset diversification, duration management, and daily monitoring, with most instruments held within risk limits established by our risk management and treasury functions.

***Other Operating Income***

Other operating income consists of ancillary income items not included in transaction and service income, interest income, or gains on financial instruments, including income that is non-recurring in nature. The items primarily include income recognized from the expiration of contractual obligations (such as unused balances and expired PayPay Point Code), government grants, and other miscellaneous items.

For the years ended March 31, 2024, 2025 and 2026, other operating income was ¥1,959 million, ¥1,512 million, and ¥2,883 million, respectively. The year-over-year increase in the year ended March 31, 2026 was due primarily to an increase in income recognized from the expiration of contractual obligations.

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***IFRS Revenue — additional reference context***

We present IFRS revenue as our primary revenue measure. To enhance transparency regarding items that affect period-to-period comparability, we include reference disclosures in the notes to our consolidated financial statements for amounts that are recorded as reductions of revenue under IFRS 15 or, in certain cases, are accounted for under IFRS 9. These disclosures are provided for context only and do not represent an alternative basis of revenue recognition or measurement under IFRS.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•*Payment settlement service deduction* – recognized as a reduction of revenue under IFRS 15. See Note 30 to our audited consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•*Interchange fees* – revenue from Credit Payment Settlement Services and Acquiring Services is presented net of interchange fees. See Note 30 to our audited consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•*Guarantee fees (loan customers)* – within the scope of IFRS 9 and recognized using the effective interest method, and not revenue under IFRS 15. See Note 30 to our audited consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•*Consideration payable to customers related to annual membership programs* – recognized as a reduction of revenue under IFRS 15 (mainly benefits linked to annual membership fees). See Note 30 to our audited consolidated financial statements.

***Operating Expenses***

Operating expenses primarily consist of settlement related cost, provision for loss allowance and interest expenses (the sum of which we define as "Total Transaction Cost"), point expenses, employee benefit expenses, professional and outsourcing services expenses, as well as other operating expenses such as depreciation and amortization, license fees, advertising and promotion expenses and others. Technology related expenses are another key component of our operating expenses, depending on the nature of the systems and services, our technology-related expenses are recorded under various categories within operating expenses—such as license fees, professional and outsourcing services expenses, and depreciation and amortization. Typically, subscription-based services (such as cloud services) are classified under license fees. On the other hand, software that requires internal or external development is recorded under professional and outsourcing services expenses or, if capitalized, under depreciation and amortization. Our cost structure has improved with our business expansion, and we continue to benefit from operating leverage as our revenue base grows.

For the years ended March 31, 2024, 2025, and 2026, total operating expenses were ¥254,600 million, ¥263,568 million and ¥300,580 million, respectively. The year-over-year increase of 14.0% in the year ended March 31, 2026 was significantly lower than our 27.3% revenue growth over the same period, highlighting increased cost efficiency and margin expansion.

The following are key components of our operating expenses:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•*Point Expenses*: We recorded point expenses of ¥60,195 million in the year ended March 31, 2026, up from ¥50,362 million in the year ended March 31, 2025 and ¥45,402 million in the year ended March 31, 2024. Point expenses are promotional in nature and used as a mechanism to drive user acquisition, cross-selling and platform engagement. We can decide at our discretion the timing, targeted user groups and magnitude of the points we grant as rewards for code-based payment transactions. This discretionary nature and strategic purpose align more closely with marketing spend than with direct revenue generation. Although the total amount of point expenses increased, we have strategically moderated the distribution of broad-based incentives, reallocating towards targeted and performance-based campaigns to lower customer acquisition costs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•*Settlement Related Cost*: These expenses include fees paid to banks for users to charge their PayPay Balance from their bank accounts (charge costs), withdrawal fees incurred when funds are debited from users' bank accounts, and brand or network fees paid to international card brands. Total settlement related cost was ¥48,731 million in the year ended March 31, 2026, compared to ¥43,662 million in the year ended March 31, 2025 and ¥39,992 million in the year ended March 31, 2024. The increases are consistent with rising transaction volume and expansion of financial service offerings, including increased charge costs (funding source costs) on PayPay Balance transactions, higher bank withdrawal fees associated with PayPay Card volume growth, and increased brand and network fees paid to international brands.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•*Employee Benefit Expenses*: Our workforce expenses, including salaries, bonuses, welfare contributions, and share-based payments totaled ¥47,641 million in the year ended March 31, 2026, up from ¥41,483 million in the year ended March 31, 2025 and ¥37,764 million in the year ended March 31, 2024. This increase reflects headcount growth driven by business expansion, including engineers and corporate personnel, as well as personnel related to our banking operations. In addition, the increase in the year ended March 31, 2026 was driven by the commencement of share-based payment expenses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•*Professional and Outsourcing Services Expenses*: Professional and outsourcing services expenses were ¥28,099 million in the year ended March 31, 2026, down from ¥28,767 million in the year ended March 31, 2025 and ¥34,800 million in the year ended March 31, 2024. The decline is primarily attributable to a reduction in outsourcing services expenses achieved through organizational restructuring as part of our broader cost optimization efforts including moving a part of the sales personnel to PayPay SC Corporation in the year ended March 31, 2025, as well as further cost savings in the year ended March 31, 2026 driven by the insourcing of operations and operational efficiencies. In addition, this also reflects a decrease in outsourcing services expenses in the year ended March 31, 2025 following the completion of PayPay Card Corporation's core system development in the year ended March 31, 2024.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•*Provision for Loss Allowance*: We recognized ¥24,923 million in provision expenses in the year ended March 31, 2026, compared to ¥23,942 million in the year ended March 31, 2025 and ¥23,006 million in the year ended March 31, 2024, primarily related to expected credit losses on credit card receivables and banking loans. Provision for loss allowance generally fluctuates in tandem with changes in credit limits, and since the acquisition of PayPay Card Corporation in 2022, we have continuously adjusted credit limits in line with business conditions. Credit risk remains within expected ranges, supported by our proprietary data-driven credit model. The provision for loss allowance has slightly increased from the year ended March 31, 2025 to the year ended March 31, 2026, primarily due to an increase in both credit card receivables driven by higher transaction volumes and banking loans.

The following components are included within "Other operating expenses" in our Consolidated Statements of Profit or Loss:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•*Depreciation and Amortization*: We recorded ¥23,758 million in depreciation and amortization expenses in the year ended March 31, 2026, up from ¥20,093 million in the year ended March 31, 2025 and ¥17,549 million in the year ended March 31, 2024. These increases are primarily related to continued investment in internally developed software supporting both core payments and financial services platforms.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•*License Fees*: License fees mainly consist of subscription-based services (such as cloud services). For the year ended March 31, 2026, license fee expenses totaled ¥18,899 million, an increase from ¥18,027 million in the year ended March 31, 2025 and ¥15,899 million in the year ended March 31, 2024. License fees primarily relate to payments made under contractual arrangements for technology infrastructure and service platforms.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•*Interest expenses*: Interest expenses were ¥10,590 million in the year ended March 31, 2026, up from ¥4,254 million in the year ended March 31, 2025 and ¥1,931 million in the year ended March 31, 2024. This increase was primarily attributable to steady growth in our deposit balances, combined with a general rise in market interest rates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•*Advertising and Promotion Expenses*: These expenses declined to ¥10,006 million in the year ended March 31, 2026 from ¥10,731 million in the year ended March 31, 2025 and ¥11,458 million in the year ended March 31, 2024. The reduction reflects a deliberate shift from mass-market incentive campaigns toward lower-cost marketing channels and in-app promotional tools and ecosystem-based cross-marketing, consistent with our user engagement and monetization maturity. In addition, we have enhanced cost effectiveness by focusing on high LTV user groups and efficient promotional campaigns. Further, certain promotions for merchants were subsidized by us only for the first transaction, thereby controlling recurring costs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•*Other items*: Other items recorded as operating expenses include taxes and charges, amortization of contract cost, and other. While these expense items were not substantial for the year ended March 31, 2026, the intere**st** expenses increase accompanying the growth of the deposit balance in internet banking business.

Our ability to drive top-line growth while maintaining disciplined cost control has resulted in sustained improvement in operating profitability. Our operating profit margin improved from 0.0% in the year ended March 31, 2024 to 11.9% in the year ended March 31, 2025, and to 21.0% in the year ended March 31, 2026.

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**Acquisition of PayPay Securities**

On April 10, 2023, we acquired newly issued shares of PayPay Securities Corporation with the aim to increase revenue and profit through synergies, including our track record of having over 20 million users (on a cumulative basis to date) having used PayPay Points to effect transactions with PayPay Securities Corporation. On April 1, 2025, we acquired additional shares in PayPay Securities Corporation from SoftBank Corp. and LY Corporation, as well as subscribed to a third-party allocation of shares conducted by PayPay Securities Corporation, making it our consolidated subsidiary. Upon the completion of the transaction, we held 75.2% of the total number of issued shares, while Mizuho Securities Co., Ltd. held 24.8%.

The acquisition of PayPay Securities Corporation was accounted for as a business combination under common control. As a business combination under common control, we accounted for this transaction based on the book value of SoftBank Group Corp. and, regardless of the actual date we acquired PayPay Securities Corporation, retrospectively consolidated the financial statements of PayPay Securities Corporation, whereby we reflected the operating results and financial condition of PayPay Securities Corporation in our consolidated financial statements as if the acquisition had been completed on the opening balance sheet date of the comparative period. See Note 7 to our audited consolidated financial statements included elsewhere in this Annual Report.

**Acquisition of PayPay Bank**

On April 11, 2025, we completed the acquisition of 47.1% of the common shares and all of the non-voting Class A preferred shares of PayPay Bank Corporation, Japan's first internet bank, from Z Financial Corporation (currently LY Corporation) and Mitsui Sumitomo Insurance Co., while Sumitomo Mitsui Banking Corporation, Fujitsu Ltd., Taiju Life Insurance Company Limited and Sumitomo Life Insurance Company held 46.6%, 5.3%, 0.5% and 0.5% of the common shares, respectively, upon completion of the transaction.

After the conversion of the non-voting Class A preferred shares of PayPay Bank Corporation into common shares, effective April 28, 2025, we held 75.5% of the common shares, making PayPay Bank Corporation our consolidated subsidiary. Other than the non-voting Class A preferred shares, to our knowledge, there are no outstanding potential equity interests that would dilute our ownership in PayPay Bank Corporation. Sumitomo Mitsui Banking Corporation remains a significant minority shareholder, holding 21.5% of the common shares as of December 31, 2025, and we continue to maintain a cooperative relationship with them.

The acquisition of PayPay Bank Corporation was accounted for as a business combination under common control. As a business combination under common control, we accounted for this transaction based on the book value of SoftBank Group Corp. and, regardless of the actual date we acquired PayPay Bank Corporation, retrospectively consolidated the financial statements of PayPay Bank Corporation, whereby we reflected the operating results and financial condition of PayPay Bank Corporation in our consolidated financial statements as if the acquisition had been completed on the opening balance sheet date of the comparative period. See Note 7 to our audited consolidated financial statements included elsewhere in this Annual Report.

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**Historical Results of Operations**

The following table shows summary consolidated statements of profit or loss data for the years ended March 31, 2024, 2025 and 2026:

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| | | | |
|:---|:---|:---|:---|
|  | **For the year ended March 31,** | **For the year ended March 31,** | **For the year ended March 31,** |
|  | **2024** | **2025** | **2026** |
|  | **(in millions of yen)** | **(in millions of yen)** | **(in millions of yen)** |
| **Transaction and service income:** |  |  |  |
| &nbsp;&nbsp;&nbsp;Revenue from external customers in Payment<br> segment | 149310 | 176597 | 220770 |
| &nbsp;&nbsp;&nbsp;Revenue from external customers in Financial<br> service segment | 24817 | 26998 | 30271 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total transaction and service income (Consolidated) | 174127 | 203595 | 251041 |
| Interest income | 73884 | 88442 | 116488 |
| Gains (losses) on financial instruments | 4641 | 5529 | 10250 |
| Other operating income | 1959 | 1512 | 2883 |
| Total revenue | 254611 | 299078 | 380662 |
| Operating expenses | (254600) | (263568) | (300580) |
| Operating profit | 11 | 35510 | 80082 |
| &nbsp;&nbsp;&nbsp;Share of loss of investments accounted for using <br> the equity method <sup>(1)</sup> |  | (549) | (137) |
| Profit before tax | 11 | 34961 | 79945 |
| &nbsp;&nbsp;&nbsp;Income tax (expense) benefit | (841) | 4196 | 37865 |
| Profit (loss) for the year | (830) | 39157 | 117810 |
| Attributable to: |  |  |  |
| &nbsp;&nbsp;&nbsp;Owners of the parent company | (3350) | 36170 | 115034 |
| &nbsp;&nbsp;&nbsp;Non-controlling interests | 2520 | 2987 | 2776 |

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&nbsp;&nbsp;&nbsp;&nbsp;(1) Share of loss of investments accounted for using the equity method includes share of loss of a joint venture accounted for using the equity method.

***Comparison of the Year Ended March 31, 2026 with the Year Ended March 31, 2025***

*Total revenue*. Total revenue increased by ¥81,584 million, or 27.3%, from ¥299,078 million for the year ended March 31, 2025 to ¥380,662 million for the year ended March 31, 2026. Total revenue consists of the following: transaction and service income, interest income, gains (losses) on financial instruments and other operating income.

*Transaction and service income*. Transaction and service income was ¥251,041 million for the year ended March 31, 2026, an increase of ¥47,446 million, or 23.3%, from ¥203,595 million for the year ended March 31, 2025. The increase was due mainly to an increase in revenue from external customers for the Payment segment of ¥44,173 million, or 25.0%, from ¥176,597 million for the year ended March 31, 2025 to ¥220,770 million for the year ended March 31, 2026. The increase was mainly driven by growth in Payment Segment GMV supported by increased adoption of PayPay Credit and PayPay Card as well as continued increase in Payment Segment Monthly GMV per MTU. The number of users increased steadily as our services continued to gain broader recognition, and Monthly GMV per MTU increased as users integrated our services into their daily payment habits. PayPay MTU reached 41.0 million as of March 2026, an increase of 3.74 million from March 2025, representing 56% of PayPay registered users. The year-over-year growth also reflected an improved Take Rate driven by a higher mix of high-margin online payments as well as continued improvements across both offline and online payment. Payment Segment GMV reached ¥19.03 trillion in the year ended March 31, 2026, up from ¥15.39 trillion in the year ended March 31, 2025. The increase in transaction and service income also resulted from an increase in revenue from external customers for the Financial service segment of ¥3,273 million, or 12.1%, from ¥26,998 million in the year ended March 31, 2025 to ¥30,271 million in the year ended March 31, 2026. The increase in the Financial service segment was due primarily to an increase in the volume of transactions in the banking business associated with an increased number of accounts, as well as the introduction of maintenance fees for accounts inactive for two years or more. The number of PayPay Bank deposit accounts was 9.98 million as of March 31, 2026, up from 8.95 million as of March 31, 2025, and the number of PayPay Securities accounts was 1.73 million as of March 31, 2026, up from 1.37 million as of March 31, 2025, reflecting an effective cross- selling strategy within our ecosystem and facilitating the domestic retail offering of PayPay's IPO shares (PayPay ADS) through PayPay Securities respectively.

*Interest income*. Interest income was ¥116,488 million in the year ended March 31, 2026, an increase of ¥28,046 million, or 31.7%, from ¥88,442 million in the year ended March 31, 2025. This increase was due mainly to

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an upward trend in effective interest rates and an increase in the balance of credit card receivables as well as loans offered by PayPay Bank Corporation. The increase also reflected the reduction in the external guarantee fee rate which is deducted from interest income in the Financial Service Segment, effective from the third quarter ended December 31, 2025, which contributed to the increase in interest income in the year ended March 31, 2026.

While gains on financial instruments and other operating income do not account for a significant portion of total revenue, gains on financial instruments increased by ¥4,721 million, or 85.4%, from ¥5,529 million for the year ended March 31, 2025 to ¥10,250 million for the year ended March 31, 2026. The increase was due mainly to an upward trend in effective interest rates and an increase in fair value of financial instruments recorded in the Financial service segment. Other operating income primarily comprises income recognized from the expiration of contractual obligations, including unused PayPay balances and expired gift cards. Other operating income increased by ¥1,371 million, or 90.7%, from ¥1,512 million for the year ended March 31, 2025 to ¥2,853 million for the year ended March 31, 2026. The increase was due mainly to the expiration of contractual obligations, such as unused balances and expired gift cards.

*Operating expenses*. Operating expenses were ¥300,580 million for the year ended March 31, 2026, an increase of ¥37,012 million, or 14.0%, from ¥263,568 million for the year ended March 31, 2025. The following table presents a breakdown of operating expenses for the years ended March 31, 2025 and 2026. Due to our continuous cost control efforts, the increase in variable costs was only marginal compared to the revenue growth.

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| | | |
|:---|:---|:---|
|  | **For the year ended March 31,** | **For the year ended March 31,** |
|  | **2025** | **2026** |
|  | **(in millions of yen)** | **(in millions of yen)** |
| Settlement related cost | 43662 | 48731 |
| Provision for loss allowance | 23942 | 24923 |
| Interest expenses | 4254 | 10590 |
| &nbsp;&nbsp;&nbsp;Total Transaction Cost | 71858 | 84244 |
| Point expenses | 50362 | 60195 |
| Employee benefit expenses | 41483 | 47641 |
| Professional and outsourcing services expenses | 28767 | 28099 |
| Depreciation and amortization | 20093 | 23758 |
| License fees | 18027 | 18899 |
| Advertising and promotion expenses | 10731 | 10006 |
| Tax and charges | 5052 | 5943 |
| Amortization of contract cost | 1297 | 1724 |
| Other | 15898 | 20071 |
| &nbsp;&nbsp;&nbsp;Total | 263568 | 300580 |

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The increase in operating expenses was primarily attributable to the following major expense categories: settlement related cost, interest expenses, point expenses, employee benefit expenses, depreciation and amortization. The increase in these expenses were partially offset by a decrease in professional and outsourcing services expenses. The following provides a detailed background on the year-over-year fluctuations by expense category:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Settlement related cost: Settlement related cost increased by ¥5,069 million, or 11.6%, from ¥43,662 million for the year ended March 31, 2025 to ¥48,731 million for the year ended March 31, 2026. Settlement related cost includes fees paid to banks when users top up their PayPay Balance from their bank accounts, withdrawal fees incurred when funds are debited from users' bank accounts, and brand or network fees paid to international card brands. While settlement related cost increased in line with the growth in Payment Segment GMV, settlement related cost as a percentage of the total revenue decreased to 13% for the year ended March 31, 2026 from 15% for the year ended March 31, 2025, reflecting our continued efforts to optimize funding costs paid to banks.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Interest expenses: Interest expenses increased by ¥6,336 million, or 148.9%, from ¥4,254 million for the year ended March 31, 2025 to ¥10,590 million for the year ended March 31, 2026. The increase in interest expenses was due mainly to an increase in funding costs at PayPay Card Corporation resulting from an increase in the effective interest rates, as well as higher interest expenses at PayPay Bank Corporation associated with growth in deposit balances.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Point expenses: Point expenses increased by ¥9,833 million, or 19.5%, from ¥50,362 million for the year ended March 31, 2025 to ¥60,195 million for the year ended March 31, 2026. The increase was primarily attributable to growth in PayPay Balance GMV. Although the number of transactions subject to the point rewards increase as the PayPay Balance GMV grows, we strategically determine, at our discretion, the timing, target user segments, and amount of points granted as rewards for code-based payment transactions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Employee benefit expenses: Employee benefit expenses increased by ¥6,158 million, or 14.8%, from ¥41,483 million for the year ended March 31, 2025 to ¥47,641 million for the year ended March 31, 2026. The increase in employee benefit expenses resulted from the revenue growth as well as the share-based payment expenses recognized in the current year, which amounts to ¥1,847 million.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Depreciation and amortization: Depreciation and amortization increased by ¥3,665 million, or 18.2%, from ¥20,093 million for the year ended March 31, 2025 to ¥23,758 million for the year ended March 31, 2026. The increase in depreciation and amortization was attributable to the higher depreciable basis of the PayPay app, which has been capitalized through its continuous development.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Other operating expenses: Other operating expenses increased by ¥4,173 million, or 26.2%, from ¥15,898 million for the year ended March 31, 2025 to ¥20,071 million for the year ended March 31, 2026. The increase was primarily attributable to higher professional fees, such as audit fees and legal advisory fees, incurred in connection with preparations for our initial public offering.

*Operating profit*. As a result of the foregoing, operating profit was ¥80,082 million for the year ended March 31, 2026, an increase of ¥44,572 million from ¥35,499 million for the year ended March 31, 2025.

*Share of loss of investments accounted for using the equity method*. Share of loss of investments accounted for using the equity method was ¥137 million for the year ended March 31, 2026, a decrease of ¥412 million from ¥549 million for the year ended March 31, 2025.

*Profit before tax*. As a result of the foregoing, profit before tax was ¥79,945 million for the year ended March 31, 2026, an increase of ¥44,984 million from ¥34,961 million for the year ended March 31, 2025.

*Income tax (expense) benefit*. Income tax (expense) benefit increased by ¥33,669 million, or 802.4%, from ¥4,196 million for the year ended March 31, 2025 to ¥37,865 million for the year ended March 31, 2026. The increase was due mainly to the recognition of additional deferred tax assets relating to deductible temporary differences and carryforward of unused tax losses that had not been previously recognized, following a reassessment of their recoverability in light of projections of future taxable profit.

*Profit (loss) for the year*. As a result of the foregoing, we recorded a profit for the year of ¥117,810 million for the year ended March 31, 2026, an increase of ¥78,653 million from ¥39,157 million for the year ended March 31, 2025.

***Comparison of the Year Ended March 31, 2025 with the Year Ended March 31, 2024***

*Total revenue*. Total revenue increased by ¥44,467 million, or 17.5%, from ¥254,611 million for the year ended March 31, 2024 to ¥299,078 million for the year ended March 31, 2025. Total revenue consists of the following: transaction and service income, interest income, gains (losses) on financial instruments and other operating income.

*Transaction and service income*. Transaction and service income was ¥203,595 million for the year ended March 31, 2025, an increase of ¥29,468 million, or 16.9%, from ¥174,127 million for the year ended March 31, 2024. The increase was due mainly to an increase in revenue from external customers for the Payment segment of ¥27,287 million, or 18.3%, from ¥149,310 million for the year ended March 31, 2024 to ¥176,597 million for the year ended March 31, 2025, which was driven mainly by the steady expansion of revenue from PayPay Balance payments. Because the PayPay Balance payment service was in a steady growth stage, the number of users increased at a steady rate as the service attained wider recognition, and the total amount used by a user increased as people integrated the service into their daily payment habits. As a consequence, PayPay Balance GMV increased, and GMV per MTU also rose, leading to higher revenue from PayPay Balance payments. The increase in transaction and service income also resulted from an increase in revenue from external customers for the Financial service segment of ¥2,181 million, or 8.8%, from ¥24,817 million in the year ended March 31, 2024 to ¥26,998 million in the year ended March 31, 2025. The increase in the Financial service segment was due mainly to an increase in the volume of transactions in the banking business.

*Interest income*. Interest income was ¥88,442 million in the year ended March 31, 2025, an increase of ¥14,558 million, or 19.7%, from ¥73,884 million in the year ended March 31, 2024. This increase was due mainly to

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an upward trend in effective interest rates and an increase in the balance of PayPay Card credit issued as well as loans offered by PayPay Bank Corporation.

While gains on financial instruments and other operating income do not account for a significant portion of total revenue, gains on financial instruments increased by ¥888 million, or 19.1%, from ¥4,641 million for the year ended March 31, 2024 to ¥5,529 million for the year ended March 31, 2025. The increase was due mainly to an upward trend in effective interest rates and an increase in fair value of financial instruments recorded in the Financial service segment. Other operating income primarily comprises income recognized from the expiration of contractual obligations, including unused PayPay balances and expired gift cards.

*Operating expenses*. Operating expenses were ¥263,568 million for the year ended March 31, 2025, an increase of ¥8,968 million, or 3.5%, from ¥254,600 million for the year ended March 31, 2024. The following table presents a breakdown of operating expenses for the years ended March 31, 2024 and 2025. Due to our continuous cost control efforts, the increase in variable costs was only marginal compared to the revenue growth

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| | | |
|:---|:---|:---|
|  | **For the year ended March 31,** | **For the year ended March 31,** |
|  | **2024** | **2025** |
|  | **(in millions of yen)** | **(in millions of yen)** |
| Settlement related cost | 39992 | 43662 |
| Provision for loss allowance | 23006 | 23942 |
| Interest expenses | 1931 | 4254 |
| &nbsp;&nbsp;&nbsp;Total Transaction Cost | 64929 | 71858 |
| Point expenses | 45402 | 50362 |
| Employee benefit expenses | 37764 | 41483 |
| Professional and outsourcing services expenses | 34800 | 28767 |
| Depreciation and amortization | 17549 | 20093 |
| License fees | 15899 | 18027 |
| Advertising and promotion expenses | 11458 | 10731 |
| Tax and charges | 6518 | 5052 |
| Amortization of contract cost | 1043 | 1297 |
| Other | 19238 | 15898 |
| &nbsp;&nbsp;&nbsp;Total | 254600 | 263568 |

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The increase in operating expenses was primarily attributable to the following major expense categories: settlement related cost, interest expenses, point expenses, employee benefit expenses, depreciation and amortization and license fees. The increase in these expenses were partially offset by a decrease in professional and outsourcing services expenses. The following provides a detailed background on the year-over-year fluctuations by expense category:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Settlement related cost: Settlement related cost increased by ¥3,670 million, or 9.2%, from ¥39,992 million for the year ended March 31, 2024 to ¥43,662 million for the year ended March 31, 2025. Settlement related cost includes fees paid to banks when users top up their PayPay Balance from their bank accounts, withdrawal fees incurred when funds are debited from users' bank accounts, and brand or network fees paid to international card brands. Settlement related cost increased due to higher PayPay Balance GMV, PayPay Credit GMV and PayPay Card GMV.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Interest expenses: Interest expenses increased by ¥2,323 million, or 120.3%, from ¥1,931 million for the year ended March 31, 2024 to ¥4,254 million for the year ended March 31, 2025. The significant increase in interest expenses was due to an increase in the effective interest rate and an increased balance of deposits from PayPay Bank users.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Point expenses: Point expenses increased by ¥4,960 million, or 10.9%, from ¥45,402 million for the year ended March 31, 2024 to ¥50,362 million for the year ended March 31, 2025. We can decide at our discretion the timing, targeted user groups and magnitude of the points we grant as rewards for code-based payment transactions. Over time, the promotional rate has declined as the Company has strengthened its market position.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Employee benefit expenses: Employee benefit expenses increased by ¥3,719 million, or 9.8%, from ¥37,764 million for the year ended March 31, 2024 to ¥41,483 million for the year ended March 31, 2025. Due to business expansion, employee benefit expenses increased by 23.9% from the year ended March 31, 2023 to the year ended March 31, 2024. While our business continued to grow from the year ended March 31, 2024 to the year ended March 31, 2025, the increase in the year ended March 31, 2025 was largely offset by a personnel transfer for the establishment of PayPay SC Corporation, resulting in a modest increase of 9.8%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Depreciation and amortization: Depreciation and amortization increased by ¥2,544 million, or 14.5%, from ¥17,549 million for the year ended March 31, 2024 to ¥20,093 million for the year ended March 31, 2025. The increase in depreciation and amortization was attributable to the higher depreciable basis of the PayPay app, which has been capitalized through its continuous development.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•License fees: License fees increased by ¥2,128 million, or 13.4%, from ¥15,899 million for the year ended March 31, 2024 to ¥18,027 million for the year ended March 31, 2025. The increase in license fees was primarily attributable to the increased volume of cloud service usage driven by the increase in GMV.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Professional and outsourcing services expenses: Professional and outsourcing service expenses decreased by ¥6,033 million, or 17.3%, from ¥34,800 million for the year ended March 31, 2024 to ¥28,767 million for the year ended March 31, 2025. This decline was primarily attributable to (i) a decline in outsourcing services expenses following the completion of PayPay Card Corporation's core system development in the year ended March 31, 2024, and (ii) a reduction in outsourcing services expenses achieved through organizational restructuring as part of our broader cost optimization efforts including transferring part of the sales personnel to PayPay SC Corporation.

Management also noted that while the balance of revolving payment by PayPay Card users increased from the year ended March 31, 2024, provision for loss allowance has been relatively consistent year-over-year because of credit limit optimization. Provision for loss allowance increased slightly by ¥936 million, or 4.1%, from ¥23,006 million for the year ended March 31, 2024 to ¥23,942 million for the year ended March 31, 2025. Provision for loss allowance consists primarily of loss allowance provisions related to PayPay Card advances, and are largely influenced by credit risk of PayPay Card users as well as the outstanding balance owed by such users. Shortly after the acquisition of PayPay Card Corporation in October 2022, we undertook an initiative to increase users' credit limits and assume greater credit risk, with the objective of driving higher purchase volumes and enhancing PayPay Card Corporation's market share. As a consequence, we recognized a relatively higher provision for loss allowance for the year ended March 31, 2024 due to bad debts. Having achieved sufficient market share and in light of concerns regarding excessive credit risk, we optimized users' credit limits, which resulted in a relatively mild increase in loss allowance provisions for the year ended March 31, 2025.

*Operating profit*. As a result of the foregoing, operating profit was ¥35,510 million for the year ended March 31, 2025, an increase of ¥35,499 million from ¥11 million for the year ended March 31, 2024.

*Share of loss of investments accounted for using the equity method*. Share of loss of investments accounted for using the equity method was ¥549 million for the year ended March 31, 2025, compared with none recorded for the year ended March 31, 2024.

*Profit before tax*. As a result of the foregoing, profit before tax was ¥34,961 million for the year ended March 31, 2025, an increase of ¥34,950 million from ¥11 million for the year ended March 31, 2024.

*Income tax (expense) benefit*. Income tax benefit was ¥4,196 million for the year ended March 31, 2025 compared to income tax expense of ¥841 million for the year ended March 31, 2024. Because we did not generate profits in prior fiscal years, deferred tax assets were not recognized. Because we achieved profitability in the year ended March 31, 2025, we recognized deferred tax assets, leading to the recognition of substantial deferred income tax benefit.

*Profit (loss)* for the year. As a result of the foregoing, we recorded a profit for the year of ¥39,157 million for the year ended March 31, 2025, compared to a loss for the year of ¥830 million for the year ended March 31, 2024.

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**Results by Segment**

The following tables show revenue and profit and loss information by segment for the years ended March 31, 2024, 2025 and 2026:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the year ended March 31, 2024** | **For the year ended March 31, 2024** | **For the year ended March 31, 2024** | **For the year ended March 31, 2024** |
|  | **Payment<br>segment** | **Financial service<br>segment** | **Inter-segment<br>eliminations** | **Consolidated** |
|  | **(in millions of yen)** | **(in millions of yen)** | **(in millions of yen)** | **(in millions of yen)** |
| Transaction and service income |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Revenue from external customers | 149310 | 24817 |  | 174127 |
| &nbsp;&nbsp;&nbsp;Inter-segment revenue | 823 | 2081 | (2904) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total transaction and service income | 150133 | 26898 | (2904) | 174127 |
| Interest income | 59013 | 14871 |  | 73884 |
| Gains (losses) on financial instruments | 405 | 4236 |  | 4641 |
| Other operating income | 1756 | 203 |  | 1959 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total revenue | 211307 | 46208 | (2904) | 254611 |
| Operating expenses | (215084) | (42420) | 2904 | (254600) |
| Segment (loss) profit | (3777) | 3788 |  | 11 |

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the year ended March 31, 2025** | **For the year ended March 31, 2025** | **For the year ended March 31, 2025** | **For the year ended March 31, 2025** |
|  | **Payment<br>segment** | **Financial service<br>segment** | **Inter-segment<br>eliminations** | **Consolidated** |
|  | **(in millions of yen)** | **(in millions of yen)** | **(in millions of yen)** | **(in millions of yen)** |
| Transaction and service income |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Revenue from external customers | 176597 | 26998 |  | 203595 |
| &nbsp;&nbsp;&nbsp;Inter-segment revenue | 1454 | 1362 | (2816) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total transaction and service income | 178051 | 28360 | (2816) | 203595 |
| Interest income | 68623 | 19819 |  | 88442 |
| Gains (losses) on financial instruments | 276 | 5253 |  | 5529 |
| Other operating income | 1304 | 208 |  | 1512 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total revenue | 248254 | 53640 | (2816) | 299078 |
| Operating expenses | (217898) | (48486) | 2816 | (263568) |
| Segment profit | 30356 | 5154 |  | 35510 |

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the year ended March 31, 2026** | **For the year ended March 31, 2026** | **For the year ended March 31, 2026** | **For the year ended March 31, 2026** |
|  | **Payment<br>segment** | **Financial service<br>segment** | **Inter-segment<br>eliminations** | **Consolidated** |
|  | **(in millions of yen)** | **(in millions of yen)** | **(in millions of yen)** | **(in millions of yen)** |
| Transaction and service income |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Revenue from external customers | 220770 | 30271 |  | 251041 |
| &nbsp;&nbsp;&nbsp;Inter-segment revenue | 1124 | 870 | (1994) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total transaction and service income | 221894 | 31141 | (1994) | 251041 |
| Interest income | 84574 | 32674 | (760) | 116488 |
| Gains (losses) on financial instruments | 2327 | 7923 |  | 10250 |
| Other operating income | 2422 | 628 | (167) | 2883 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total revenue | 311217 | 72366 | (2921) | 380662 |
| Operating expenses | (246722) | (56779) | 2921 | (300580) |
| Segment profit | 64495 | 15587 |  | 80082 |

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***Comparison of the Year Ended March 31, 2026 with the Year Ended March 31, 2025***

*Payment Segment*

Total revenue for the Payment segment increased by ¥62,963 million, or 20.2%, from ¥248,254 million for the year ended March 31, 2025 to ¥311,217 million for the year ended March 31, 2026. The increase in total revenue was primarily driven by transaction and service income from external customers, which increased by ¥44,173 million, or 20.0%, from ¥176,597 million for the year ended March 31, 2025 to ¥220,770 million for the year ended March 31, 2026. The increase was supported by the steady growth in GMV, which increased by 23.7% year over year, supported by the increase in MTUs and higher GMV per MTU. Revenue growth also reflected an improved take rate driven by an increase in the proportion of high-margin online payments from 14% to 17% as a percentage of combined PayPay Balance and PayPay Credit GMV, as well as continued improvements across both offline and online payment. In addition, interest income increased as a result of expansion of PayPay Credit Card Financing Balance including revolving, installment and cash advance.

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Operating expenses for the Payment segment increased by ¥28,824 million, or 13.2%, from ¥217,898 million for the year ended March 31, 2025 to ¥246,722 million for the year ended March 31, 2026. The increase in operating expenses was lower than the rate of revenue growth, reflecting operating leverage in our business model. While point expenses, settlement related cost, employee benefit expenses, and other operating expenses increased by ¥9,833 million, ¥4,172 million, ¥3,806 million, and 4,770 million respectively. The increase of point expense as well as settlement related cost of payment segment resulted from increase in Payment Segment GMV. The increase in employee benefit expenses is due to higher average number of headcounts for the year ended March 31, 2026.

As a result of the foregoing, segment profit for the Payment segment amounted to ¥64,495 million for the year ended March 31, 2026, compared with a segment profit of ¥30,356 million for the year ended March 31, 2025.

*Financial Service Segment*

Total revenue for the Financial service segment increased by ¥18,726 million, or 25.9%, from ¥53,640 million for the year ended March 31, 2025 to ¥72,366 million for the year ended March 31, 2026. The increase was due mainly to an increase in transaction and service income from external customers of ¥3,273 million, or 12.1%, to ¥30,271 million for the year ended March 31, 2026, from ¥26,998 million for the year ended March 31, 2025, which reflected an increase in the number of deposit accounts and increase of ancillary banking and platform usage fees from PayPay Bank Corporation. Interest income increased by ¥12,855 million, or 64.9%, to ¥32,674 million for the year ended March 31, 2026, compared to ¥19,819 million for the year ended March 31, 2025, reflecting primarily the expansion of loan balances, the end of the Bank of Japan's negative interest rate policy in early 2024 and the subsequent rise in benchmark rates and bond yields, as well as a reduction in the external guarantee fee rate effective from the quarter ended December 31, 2025.

Operating expenses for the Financial service segment increased by ¥8,293 million, or 17.1%, from ¥48,486 million for the year ended March 31, 2025 to ¥56,779 million for the year ended March 31, 2026. The increase was due mainly to an increase of ¥4,719 million in interest expenses due to higher interest rate and the increased balance of deposits. Employee benefit expenses also increased by ¥2,366 million due to an increase in headcount.

As a result of the foregoing, segment profit for the Financial service segment amounted to ¥15,587 million for the year ended March 31, 2026, compared with a segment profit of ¥5,154 million for the year ended March 31, 2025.

***Comparison of the Year Ended March 31, 2025 with the Year Ended March 31, 2024***

*Payment Segment*

Total revenue for the Payment segment increased by ¥36,947 million, or 17.5%, from ¥211,307 million for the year ended March 31, 2024 to ¥248,254 million for the year ended March 31, 2025. The increase in total revenue was primarily driven by transaction and service income from external customers, which increased by ¥27,287 million, or 18.3%, from ¥149,310 million for the year ended March 31, 2024 to ¥176,597 million for the year ended March 31, 2025. This increase was supported by the steady growth of GMV associated with PayPay Balance payments, which in turn reflected both an increase in MTUs and higher GMV per MTU.

Operating expenses for the Payment segment increased by ¥2,813 million, or 1.3%, from ¥215,084 million for the year ended March 31, 2024 to ¥217,898 million for the year ended March 31, 2025. The moderate increase in operating expenses resulted from our continuous efforts on cost control. While point expenses, settlement related cost and employee benefit expenses increased by ¥4,960 million, ¥2,985 million and ¥2,003 million, respectively, in line with business growth, these increases were offset by a decrease of ¥6,569 million in professional and outsourcing services expenses, due primarily to reduced outsourcing of sales and system development service. Instead, we utilized our own resources.

As a result of the foregoing, segment profit for the Payment segment amounted to ¥30,356 million for the year ended March 31, 2025, compared with a segment loss of ¥3,777 million for the year ended March 31, 2024.

*Financial Service Segment*

Total revenue for the Financial service segment increased by ¥7,432 million, or 16.1%, from ¥46,208 million for the year ended March 31, 2024 to ¥53,640 million for the year ended March 31, 2025. The increase was due mainly to (a) an increase in transaction and service income from external customers of ¥2,181 million, or 8.8%, to ¥26,998 million for the year ended March 31, 2025, from ¥24,817 million for the year ended March 31, 2024, which reflected an increase of ancillary banking and platform usage fees from PayPay Bank Corporation, and (b) an increase in interest income of ¥4,948 million, or 33.3%, to ¥19,819 million for the year ended March 31, 2025, compared to ¥14,871 million for the year ended March 31, 2024, reflecting primarily the expansion of loan balances, as well as the

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end of the Bank of Japan's negative interest rate policy in early 2024 and the subsequent rise in benchmark rates and bond yields.

Operating expenses for the Financial service segment increased by ¥6,066 million, or 14.3%, from ¥42,420 million for the year ended March 31, 2024 to ¥48,486 million for the year ended March 31, 2025. The increase was due mainly to an increase of ¥1,734 million in interest expenses due to higher interest rate and the increased balance of deposits. Employee benefit expenses also increased by ¥1,716 million due to an increase in headcount.

As a result of the foregoing, segment profit for the Financial service segment amounted to ¥5,154 million for the year ended March 31, 2025, compared with a segment profit of ¥3,788 million for the year ended March 31, 2024.

**B Liquidity and capital resources**

***Cash and Capital Requirements***

As a company with all of its main operations in Japan, our cash and capital requirements are principally denominated in Japanese yen. Our cash and capital requirements are related mainly to our operating cash requirements, including operating expenses, such as advertising and promotion expenses, debt service and repayments, as well as other investments. We launched our PayPay app in 2018 and incurred operating losses in every fiscal year since our inception through the year ended March 31, 2023, but have recorded operating profit since the year ended March 31, 2024, and we recorded losses for the year in every fiscal year since our inception through the year ended March 31, 2024, but recorded profit since the year ended March 31, 2025. We have primarily funded our operations through the issuance of equity to our shareholders as well as with borrowings from various lenders. We expect to increasingly fund our operations from cash flow from operating activities due to the increased scale of our user base and revenue, in particular since we ended our initial waiver of small- and medium-sized merchant payment settlement fees in our Payment segment in October 2021.

*Operating Cash Requirements*

We require cash on an ongoing basis to finance our regular operations. In our Payment segment, when users of our PayPay app charge their PayPay Balance, we receive cash from the users prior to our paying accounts payable to merchants. Generally, at the end of a given fiscal period, the balance of accounts payable related to code-based payments tends to exceed the balance of accounts receivable, and the difference is linked to an increase in cash and deposits to ensure operating cash.

We are required to comply with the Payment Services Act because we engage in business activities that involve advance payments from users using prepaid payment instruments, namely our offering of PayPay Money and PayPay Money Lite as summarized below.

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| | | |
|:---|:---|:---|
|  | **PayPay Money** | **PayPay Money Lite** |
| &nbsp;&nbsp;eKYC | Required | Not required |
| &nbsp;&nbsp;Governing Law and Relevant Regulations | Payment Services Act (Funds Transfer) | Payment Services Act (Prepaid Payment Instruments) |
| &nbsp;&nbsp;Required Guarantee Deposits | &nbsp;&nbsp;&nbsp;Must cover 100% of the total unused prepaid balance of PayPay Money.<br>Note: For PayPay Money for digital wages payment, however, we are not required to provide guarantee deposits as we have entered into a Guarantee Contract of Security Deposit of Providing Funds Transfer Service for PayPay Money for digital wages payments. | Must cover 50% of the total unused prepaid balance of PayPay Money Lite. |
| &nbsp;&nbsp;Key Features | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- Can be withdrawn in the form of cash.<br>- Can be charged via bank account transfer, partner ATMs, proceeds or rewards from Yahoo! JAPAN services, insurance proceeds, withdrawals from securities or financial accounts, share sale proceeds, salary deposits, loan-linked services,  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- Withdrawals are not permitted in principle.<br>- Can be charged by PayPay Card or SoftBank/Y!mobile Carrier Billing.<br>- Can be transferred between accounts via P2P money transfer. |

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| | | |
|:---|:---|:---|
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PayPay Bank loans, or bank transfers from partner services.<br>- Can be transferred between accounts via P2P money transfer. | &nbsp;&nbsp;&nbsp;Note: If eKYC verification is not completed, any funds charged via bank account transfer, partner ATMs, proceeds from Yahoo! JAPAN services, or receiving PayPay Money via P2P money transfer, will be classified as PayPay Money Lite. |
| &nbsp;&nbsp;Typical Use Cases | PayPay payments, transfers and withdrawals | PayPay payments and transfers |

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Under the Payment Services Act, we are registered as a fund transfer service provider to offer PayPay Money, a refundable type of PayPay Balance deposited by users. As a fund transfer service provider, we are required to secure, by one or more methods permitted under the Payment Services Act, including guarantee deposits with the Tokyo Legal Affairs Bureau, guarantee contracts and trust arrangements, an amount equal to the full outstanding balance of PayPay Money, plus the costs associated with the exercise of our users' rights as creditors of our fund transfer service.

Also under the Payment Services Act, because we offer PayPay Money Lite, a non-refundable type of PayPay Balance pre-loaded through advance payments by users, we are required to secure, by one or more methods permitted under the Payment Services Act, including guarantee deposits with the Tokyo Legal Affairs Bureau and trust arrangements, an amount that is at least half of the outstanding balance of PayPay Money Lite as of March 31 or September 30 every year if such balance exceeds ¥10 million.

For details on the calculation of our required guarantee deposits, see Note 9 to our audited consolidated financial statements included elsewhere in this Annual Report. We are required to deposit the amount for guarantee deposits in cash or bonds, or enter into a guarantee contract or trust arrangement with a financial institution for the amount required. The deposited amounts are recorded as guarantee deposits in our consolidated statements of financial position and are not available for our use in accordance with the Payment Services Act, while amounts of PayPay Balance that do not require a guarantee deposit are included in cash and cash equivalents in our consolidated statements of financial position. See Note 8 to our audited consolidated financial statements included elsewhere in this Annual Report. As of March 31, 2026, cash and cash equivalents were ¥363,083 million and guarantee deposits were ¥74,139 million. As of March 31, 2025, cash and cash equivalents were ¥369,811 million and guarantee deposits were ¥244,229 million.

In our Payment segment, when PayPay Card holders use our credit payment services (including PayPay Credit), we extend credit to our cardholders and require cash to settle credit payments with merchants prior to collecting receivables from our cardholders. Through liquidation arrangements for credit card receivables, PayPay Card Corporation obtains financing from financial institutions, including PayPay Bank Corporation, as a funding method backed by such receivables. The credit card receivables subject to these arrangements are recorded as loans and advances to customers under our assets, and the related financing is recorded as borrowings under our liabilities on our consolidated statements of financial position. See Note 36 to our audited consolidated financial statements included elsewhere in this Annual Report. However, in the case of PayPay Credit, we will make the advance payment to the merchant, and PayPay Card Corporation will liquidate the card receivables and collect them from the user. See "Item 4. Information on the Company—B. Business Overview—Our Products and Services—Payment Services" for a description of the payment flows.

Our cash outlays include principally the costs related to the promotion and marketing of our services to acquire new merchants and registered users, the development of our software and services, as well as selling, general and administrative expenses.

*Capital Expenditures*

For the year ended March 31, 2026, we invested ¥24,192 million in capital expenditures, principally towards in-house and outsourced software development. Capital expenditures are recorded as purchases of property and equipment and purchases of intangible assets (largely attributable to customer-facing tangible and intangible assets such as capitalized system development costs and physical cards) in our consolidated statements of cash flows, which were ¥6,369 million and ¥17,823 million, respectively, in the year ended March 31, 2026, compared to ¥4,822 million and ¥17,264 million, respectively, in the year ended March 31, 2025 and ¥4,584 million and ¥17,911 million, respectively, in the year ended March 31, 2024.

We currently expect our capital expenditures to continue to consist primarily of investments in intangible assets, including capitalized software development costs and certain capitalized customer acquisition costs, mainly for PayPay Corporation and PayPay Card Corporation, as well as software investments at PayPay Bank Corporation and PayPay Securities Corporation. We currently do not expect future capital expenditures to be driven by any single large-scale project, but rather by ongoing development, maintenance and enhancement of our existing services, new

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features and investments to support the continued growth and scaling of our payment and financial services businesses. We expect to fund these capital expenditures primarily through cash and cash equivalents and cash flows from operating activities.

In addition, as of March 31, 2026, we had certain commitments for capital expenditures and other purchase obligations, primarily related to software, cloud and other system-related investments. We expect to fund these commitments primarily through cash and cash equivalents and cash flows from operating activities and, as needed, available credit facilities and other borrowings. For commitments, see Note 39 to our audited consolidated financial statements included elsewhere in this Annual Report.

*Strategic Investments and Other Material Cash Requirements Relating to the Acquisition of T&D Financial Life Insurance Company*

We may incur cash requirements in connection with our publicly announced strategic acquisition transaction involving the acquisition of a controlling interest in T&D Financial Life Insurance Company. Based on our current evaluation, the aggregate consideration for such transaction, if consummated, may require us to use a combination of internal funds and external financing.

We currently expect to prioritize the use of internally generated funds and available proceeds from our recent equity financing, and to supplement any funding shortfall with additional debt financing, depending on transaction structure, timing and market conditions. If the transaction is consummated, it could materially affect our liquidity, capital resources and indebtedness profile. See "Item 4. Information on the Company—History and development of the company—Principal Capital Expenditures and Divestitures for the expected capital requirement.

The timing and amount of any related cash outflows remain subject to the execution of definitive agreements, the satisfaction of closing conditions and the final financing structure. Accordingly, there can be no assurance that such transaction will be consummated on the currently contemplated terms or timetable, or at all.

*Debt Service and Contractual Obligations*

As of March 31, 2026, loan payables and commercial papers on our consolidated statement of financial position was ¥564,956 million. As of March 31, 2025, loan payables and commercial papers on our consolidated statement of financial position was ¥399,578 million. The increase from March 31, 2025 to March 31, 2026 was due mainly to an increase in the balance of securitization of loans and advances to customers by PayPay Card Corporation and an increase in the balance of repurchase agreements by PayPay Bank Corporation. All our loan payables and commercial paper are denominated in Japanese yen.

As of March 31, 2026, the weighted average interest rate of the outstanding loan payables was 0.80% and the weighted average interest rate of the outstanding commercial paper was 0.95%. Commercial paper, intercompany loans and a portion of our borrowings from financial institutions are in part subject to fixed interest rates, while a portion of our borrowings from financial institutions and the liquidation arrangements for credit card receivables are subject to floating interest rates based on a spread over yen Tokyo InterBank Offered Rate. A portion of the liquidation arrangements for credit card receivables is subject to fixed interest rates based on the Tokyo Overnight Average rate. As of March 31, 2026, ¥271,331 million, or 55.2%, of the outstanding loan payables bore fixed interest rates, and ¥220,625 million, or 44.8%, bore floating interest rates.

Certain of our loan payables, including those arising from PayPay Card Corporation's liquidation arrangements for credit card receivables, special overdraft facility agreements and a term loan, are subject to certain covenants as described below. As of March 31, 2026, ¥269,200 million of our loan payables were from such borrowings.

*Liquidation Arrangements*

Under the terms of PayPay Card Corporation's liquidation arrangements for credit card receivables, the following events are specified as triggering cancellation of the relevant agreements:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•PayPay Card Corporation ceases to be a subsidiary of LY Corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The amount of total net assets on the non-consolidated balance sheet of PayPay Card Corporation must be maintained at a level higher than 75% of that for the immediately preceding fiscal year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•PayPay Card Corporation records an operating loss on its non-consolidated profit and loss statements for two consecutive years.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•PayPay Card Corporation records an ordinary loss, which generally corresponds to operating profit/loss and non-operating profit/loss excluding certain extraordinary profit/loss, for two consecutive fiscal years.

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In addition, under the terms of PayPay Card Corporation's liquidation arrangements for credit card receivables, early redemption or pro-rata redemption is triggered if certain indicators, including the indicator calculated based on the amount of securitized receivables collected over a given period, do not meet the requirements specified under the agreements.

In addition, under the terms of the liquidation arrangements, a backup servicer takes over PayPay Card Corporation's role as a servicer of collecting receivables and is required to pay collected money pursuant to the relevant agreements if certain events occur, including the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•PayPay Card Corporation has ceased to be a consolidated subsidiary of LY Corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•PayPay Card Corporation's issuer rating falls below BB+ or PayPay Card Corporation is placed on negative watch by a designated rating agency.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•LY Corporation's issuer rating falls below BBB+ or LY Corporation is placed on negative watch by a designated rating agency, or the entrustor has ceased to be a consolidated subsidiary of LY Corporation, if PayPay Card Corporation does not have an issuer rating provided by a designated rating agency.

None of the events described above occurred for the years ended March 31, 2023, 2024, 2025 and 2026.

*Special Overdraft Facility*

Pursuant to a special overdraft facility agreement with Mizuho Bank, Ltd., mandatory repayment is triggered if PayPay Corporation ceases to be a consolidated subsidiary of LY Corporation. Under a special overdraft facility agreement with PayPay Card Corporation, PayPay Card Corporation is required to maintain its status as a consolidated subsidiary of LY Corporation. PayPay Corporation and PayPay Card Corporation were in compliance with these requirements for the years ended March 31, 2023, 2024, 2025, and 2026.

*Term Loan*

Under the terms of a term loan, PayPay Card Corporation is subject to certain covenants including the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•PayPay Card Corporation and Yahoo Japan Corporation (currently LY Corporation after its merger with Z Holdings Corporation) must maintain their status as consolidated subsidiaries of Z Holdings Corporation (currently LY Corporation after its merger with Yahoo Japan Corporation).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The total amount of net assets on the non-consolidated balance sheet as of the last day of each fiscal year must be higher than (i) 75% of that of the immediately preceding fiscal year or (ii) 75% of that of the year ended March 31, 2021, whichever is higher.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•PayPay Card Corporation must not record an operating loss on its non-consolidated statements of profit or loss for two consecutive fiscal years.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•PayPay Card Corporation was in compliance with all of the above covenants for the years ended March 31, 2023, 2024, 2025 and 2026.

For additional information on the borrowing arrangements of PayPay Card Corporation, see Note 22 to our audited consolidated financial statements included elsewhere in this Annual Report.

*Financial Liabilities*

The following table details the balance of our financial liabilities by repayment date as of March 31, 2026. The contractual cash flow amounts below reflects cash flows presented on an undiscounted cash flow basis, including interest expense.

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|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Book value** | **Contractual<br>cash flow** | **Within<br>1 year** | **Within<br>1-2 years** | **Within<br>2-3 years** | **Within<br>3-4 years** | **Within<br>4-5 years** | **More than<br>5 years** |
| **Non-derivative financial liabilities** | **(in millions of yen)** | **(in millions of yen)** | **(in millions of yen)** | **(in millions of yen)** | **(in millions of yen)** | **(in millions of yen)** | **(in millions of yen)** | **(in millions of yen)** |
| Deposits | 2952495 | 2952536 | 2935149 | 5118 | 4540 | 1204 | 2222 | 4303 |
| Accounts payable | 1122338 | 1122338 | 1122338 |  |  |  |  |  |
| Borrowings | 564956 | 566243 | 392273 | 67883 | 92747 | 11813 | 1376 | 151 |
| Other financial liabilities | 46748 | 46748 | 46430 | 106 | 106 | 106 |  |  |
| Lease liabilities | 9549 | 9924 | 2475 | 2353 | 2257 | 1823 | 770 | 246 |
| **Derivative financial liabilities** |  |  |  |  |  |  |  |  |
| Other financial liabilities | 1368 | 1368 | 1368 |  |  |  |  |  |
| Total financial liabilities | 4697454 | 4699157 | 4500033 | 75460 | 99650 | 14946 | 4368 | 4700 |
| **Off-balance sheet item** |  |  |  |  |  |  |  |  |
| Undrawn loan commitments |  | 10622322 | 10622322 |  |  |  |  |  |

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*Lines of Credit*

We have lines of credit with financial institutions for borrowing arrangements. As of March 31, 2026, our lines of credit totaled ¥803,973 million, and the remaining amounts available under our lines of credit as of March 31, 2026 were ¥823,724 million.

*Funding and Treasury Policy*

We manage liquidity and funding risks at both PayPay Corporation and the relevant subsidiary level, taking into account the nature of our businesses and applicable regulatory and contractual requirements. PayPay Corporation's Risk Management Department monitors our group-level liquidity risk status on a monthly basis. Our cash and capital requirements are principally denominated in Japanese yen, and our cash and cash equivalents are held principally in Japanese yen. As of March 31, 2026, substantially all of our loan payables and commercial paper were denominated in Japanese yen.

We use certain financial instruments for hedging or risk management purposes in the ordinary course of business. We do not use financial instruments for speculative purposes. For additional information, see Note 36 to our audited consolidated financial statements included elsewhere in this Annual Report.

Certain funds held by our regulated subsidiaries may be subject to legal, regulatory or contractual restrictions and may not be readily available for transfer to PayPay Corporation in the form of dividends, loans, advances or other distributions. These restrictions include capital adequacy, capital maintenance and other regulatory requirements applicable to PayPay Bank Corporation, PayPay Card Corporation and PayPay Securities Corporation. As a result, a portion of cash and net assets at these subsidiaries is not freely distributable to the parent, PayPay Corporation. Nevertheless, we believe that parent-level liquidity, expected cash flows from operations and available credit facilities are sufficient to meet our cash obligations for the next twelve months.

**Cash Flows**

We believe that our current available cash and cash equivalents and our credit facilities will be sufficient to meet our working capital requirements and capital expenditures in the ordinary course of business for a period of at least twelve months from March 31, 2026.

Over the longer term, beyond the next twelve months, we expect our principal cash requirements to include funding for growth in loans and advances to customers and credit card receivables, investments in software and system development, regulatory capital and guarantee deposit requirements, repayment or refinancing of borrowings and commercial paper, and potential strategic investments. We expect to fund these requirements primarily through cash flow from operating activities, existing credit facilities, liquidation arrangements for credit card receivables, borrowings, commercial paper and, if necessary, additional debt or equity financing.

The following tables show our consolidated cash flow data for the years ended March 31, 2024, 2025 and 2026:

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| | | | |
|:---|:---|:---|:---|
|  | **For the year ended** | **For the year ended** | **For the year ended** |
|  | **March 31, 2024** | **March 31, 2025** | **March 31, 2026** |
|  | **(in millions of yen)** | **(in millions of yen)** | **(in millions of yen)** |
| Cash and cash equivalents at the beginning of the period | 859313 | 744323 | 369811 |
| Net cash provided by (used in) operating activities | 49975 | 155849 | 375297 |
| Net cash provided by (used in) investing activities | (273383) | (319977) | (628827) |
| Net cash provided by (used in) financing activities | 107930 | (210325) | 246752 |
| Effect of exchange rate changes on cash and cash equivalents | 488 | (59) | 50 |
| Increase (decrease) in cash and cash equivalents | (114990) | (374512) | (6728) |
| Cash and cash equivalents at the end of the period | 744323 | 369811 | 363083 |

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*Operating Activities*

Net cash provided by operating activities was ¥375,297 million in the year ended March 31, 2026, primarily attributable to profit before tax of ¥74,495 million, adjusted for positive non-cash items consisting of depreciation and amortization of ¥25,482 million, loss on disposal of property and equipment and intangible assets of ¥1,338 million and share-based payment expenses of ¥1,847 million, partially offset by negative non-cash items consisting of other income and costs of ¥1,517 million. The amount was further adjusted for changes in itemized balances of assets and liabilities that had a negative effect on operating cash flow, which primarily consisted of an increase in loans and advances to customers of ¥585,244 million, as well as certain changes in itemized balances of assets and liabilities that had a positive effect on operating cash flow, including primarily an increase in deposits of ¥566,556 million, an increase in accounts payable of ¥173,856 million and a decrease in guarantee deposits of ¥170,090 million.

Net cash provided by operating activities was ¥155,849 million in the year ended March 31, 2025, primarily attributable to profit before tax of ¥34,961 million, adjusted for positive non-cash items consisting of depreciation and

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amortization of ¥21,391 million, loss on disposal of property and equipment and intangible assets of ¥696 million and other income and costs of ¥618 million. The amount was further adjusted for changes in itemized balances of assets and liabilities that had a negative effect on operating cash flow, which primarily consisted of an increase in loans and advances to customers of ¥399,055 million, as well as certain changes in itemized balances of assets and liabilities that had a positive effect on operating cash flow, including primarily an increase in deposits of ¥249,362 million, an increase in accounts payable of ¥145,558 million and a decrease in guarantee deposits of ¥77,656 million.

Net cash provided by operating activities was ¥49,975 million in the year ended March 31, 2024, primarily attributable to profit before tax of ¥11 million, adjusted for positive non-cash items consisting of depreciation and amortization of ¥18,591 million and loss on disposal of property and equipment and intangible assets of ¥1,495 million, partially offset by negative non-cash items consisting of other income and costs of ¥1,552 million. The amount was further adjusted for changes in itemized balances of assets and liabilities that had a negative effect on operating cash flow, which primarily consisted of an increase in loans and advances to customers of ¥311,125 million and an increase in securities of ¥45,476 million, as well as certain changes in itemized balances of assets and liabilities that had a positive effect on operating cash flow, including primarily an increase in deposits of ¥260,400 million and an increase in accounts payable of ¥130,744 million.

*Investing Activities*

Net cash used in investing activities was ¥628,827 million in the year ended March 31, 2026, which was primarily attributable to purchase of securities of ¥779,962 million, purchase of intangible assets of ¥17,823 million, purchases of investments accounted for using the equity method of ¥11,655 million, purchase of property and equipment of ¥6,369 million and other of ¥2,302 million, partially offset by proceeds from sales/redemption of securities of ¥189,284 million.

Net cash used in investing activities was ¥319,977 million in the year ended March 31, 2025, which was primarily attributable to purchase of securities of ¥463,314 million, purchase of intangible assets of ¥17,264 million, payments for acquisition of subsidiaries of ¥5,759 million, other of ¥5,343 million, purchase of property and equipment of ¥4,822 million and purchases of investments accounted for using the equity method of ¥1,360 million, partially offset by proceeds from sales/redemption of securities of ¥177,885 million.

Net cash used in investing activities was ¥273,383 million in the year ended March 31, 2024, which was primarily attributable to payments of deposits with a related party of ¥600,000 million, purchase of securities of ¥437,408 million, purchase of intangible assets of ¥17,911 million and purchase of property and equipment of ¥4,584 million and other of ¥3,316 million, partially offset by proceeds from withdrawal of deposits with a related party of ¥600,000 million and proceeds from sales/redemption of securities of ¥189,836 million.

*Financing Activities*

Net cash provided by financing activities was ¥246,752 million in the year ended March 31, 2026, which was primarily attributable to proceeds from long-term borrowings of ¥722,600 million, proceeds from issuance of new common shares of ¥217,522 million and net increase in short-term borrowings of ¥199,982 million, partially offset by repayments of long-term borrowings of ¥757,203 million and payment for the purchase of the equity interest of a subsidiary, through business combinations of entities under common control of ¥130,185 million.

Net cash used in financing activities was ¥210,325 million in the year ended March 31, 2025, which was primarily attributable to repayment of long-term borrowings of ¥917,898 million, net decrease in short-term borrowings of ¥128,700 million and partially offset by proceeds from long-term borrowings of ¥842,300 million.

Net cash provided by financing activities was ¥107,930 million in the year ended March 31, 2024, which was primarily attributable to proceeds from long-term borrowings of ¥595,100 million and net increase in short-term borrowings of ¥30,000 million and partially offset by repayment of long-term borrowings of ¥516,422 million.

**Regulatory Capital Requirements**

The Basel Committee has issued "A global regulatory framework for more resilient banks and banking systems," or Basel III, outlining the global regulations for stronger bank capital adequacy. Under Basel III requirements, the capital adequacy ratio is calculated by dividing adjusted capital by risk-weighted assets.

Core capital is calculated based on the amount of qualifying instruments and reserves, with certain regulatory adjustments. Risk-weighted assets generally include credit risk-weighted assets, the equivalent amount of market risk divided by 8% and the equivalent amount of operational risk divided by 8%. In calculating the capital adequacy ratio of PayPay Bank Corporation, we have adopted the standardized approach to calculate the amount of the credit risk weighted assets of PayPay Bank Corporation, as well as the standardized approach to assess the equivalent amount of

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operational risk. We have adopted exemptions for market risk amounts because we are not proactively taking market risk and fulfill the requirements for such exemptions.

If the capital adequacy ratio of a financial institution falls below the required level, the FSA may, depending upon the extent of capital deterioration, take certain corrective actions, including requiring the financial institution to submit an improvement plan to strengthen its capital base, reduce its total assets, restrict its business operations or other actions that could have a material effect on its financial statements. The minimum capital adequacy ratio applicable to Japanese banks without certain international operations is 4%.

The table below presents the capital adequacy ratio, core capital, total capital and risk-weighted assets of PayPay Bank Corporation under Japanese GAAP.

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| | | |
|:---|:---|:---|
|  | **As of and for the year ended March 31,** | **As of and for the year ended March 31,** |
|  | **2025** | **2026** |
|  | **(in millions of yen, except ratios)** | **(in millions of yen, except ratios)** |
| Capital adequacy ratio | 16.76% | 14.04% |
| Core capital | 145215 | 157147 |
| Total capital | 132575 | 144202 |
| Risk-weighted assets | 790957 | 1026786 |

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We, PayPay Card Corporation and PayPay Securities Corporation are also required to maintain capital-related ratios and equity balances as defined by the capital regulations presented below.

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| | | |
|:---|:---|:---|
| **Company** | **Laws and regulations** | **Requirements** |
| PayPay Corporation | Payment Services Act | Maintenance of minimum required equity amount |
| PayPay Card Corporation | Installment Sales Act | Maintenance of minimum required equity ratio |
| PayPay Securities Corporation | Financial Instruments and Exchange Act | Maintenance of minimum required capital-to-risk ratio |

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We, PayPay Card Corporation and PayPay Securities Corporation are in compliance with the capital requirements under the relevant laws and regulations.

**C Research and development, patents and licenses, etc.**

The Company invests in the development and enhancement of its payment settlement platform and related software applications to support its services. Software development is conducted both by the Company's employees and through engagements with third-party service providers.

For information regarding research and development expenses, see Note 16 to the consolidated financial statements included elsewhere in this Annual Report.

**D Trend information**

Other than as disclosed elsewhere in this Annual Report, we are not aware of any trends, uncertainties, demands, commitments or events for the fiscal year ended March 31, 2026 that are reasonably likely to have a material and adverse effect on our revenue, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future results of operations or financial conditions.

**E Critical Accounting Estimates**

The preparation of our consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements as well as the reported amounts of revenue and expenses during the reporting period. We base our estimates and assumptions on historical experiences and on various other factors that are believed to be reasonable under the circumstances, the result of which form the basis for making judgments about the carrying values of assets and liabilities and the reported amounts of revenue and expenses that are not readily apparent from other sources. Actual results may differ from these estimates and assumptions. Refer to Note 4, *Critical Accounting Judgments and Key Sources of Estimation Uncertainty* to our audited consolidated financial statements included in this Annual Report for further details on our critical accounting estimates and judgments.

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Our significant accounting policies are provided in Note 3 to our audited consolidated financial statements included in this Annual Report.

**Recent Accounting Pronouncements**

There were no new or amended IFRS that became effective during the year ended March 31, 2026 that had a material impact on our consolidated financial statements.

We assess the potential impact of new and revised accounting standards on an ongoing basis. As of the date of this Annual Report, no issued but not yet effective IFRS standards are expected to have a material effect on our financial condition, results of operations, or cash flows upon adoption. For a detailed discussion of accounting standards issued but not yet effective, see Note 5 to our audited consolidated financial statements included in this Annual Report.

**Non-IFRS Financial Measures**

In evaluating our business, we consider and use Adjusted EBITDA and Adjusted EBITDA Margin, which are non-IFRS financial measures, as supplemental measures to review and assess our operating performance. The presentation of these non-IFRS financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with IFRS. We define Adjusted EBITDA as profit (loss) for the year (period) plus income tax expense (benefit), share of profit (loss) of investments accounted for using the equity method, depreciation and amortization, share-based payment expenses, amortization of contract cost, loss on disposal of property and equipment and intangible assets, listing-related expenses, M&A-related expenses and net interest expense (income) from corporate borrowings and treasury assets. Share of profit (loss) of investments accounted for using the equity method includes share of loss of a joint venture accounted for using the equity method.

These non-IFRS financial measures enable our management to assess our operating results without considering the impact of items that we do not consider to be indicative of the results of our ongoing operations, such as certain non-cash items. We also believe that the use of these non-IFRS measures facilitate investors' assessment of our operating performance and is useful to facilitate comparisons to historical performance.

These non-IFRS financial measures are not defined under IFRS and are not presented in accordance with IFRS. These non-IFRS financial measures have limitations as an analytical tool. These non-IFRS financial measures do not reflect all items of expense that affect our operations. Further, these non-IFRS measures may differ from the non-IFRS information used by other companies, including peer companies, and therefore the comparability may be limited.

We compensate for these limitations by reconciling these non-IFRS financial measures to the most directly comparable IFRS performance measure, which should be considered when evaluating our performance. We encourage you to review our financial information in its entirety and not rely on a single financial measure.

The following tables reconcile Adjusted EBITDA from profit (loss) for the year, which is the most directly comparable financial measure calculated and presented in accordance with IFRS, for the periods presented. The adjustments presented below are primarily depreciation expenses that do not result in a cash outflow, temporary expenses and non-operating income and expenses.

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| | | | |
|:---|:---|:---|:---|
|  | **For the year ended March 31,** | **For the year ended March 31,** | **For the year ended March 31,** |
|  | **2024** | **2025** | **2026** |
|  | **(in millions of yen, except percentages)** | **(in millions of yen, except percentages)** | **(in millions of yen, except percentages)** |
| Profit (loss) for the year (period) | ¥(830) | ¥39,157 | ¥117,810 |
| &nbsp;&nbsp;&nbsp;Add: Income tax expense (benefit) | 841 | (4196) | (37865) |
| &nbsp;&nbsp;&nbsp;Add: Share of loss of investments accounted<br> for using the equity method <sup>(1)</sup> |  | 549 | 137 |
| &nbsp;&nbsp;&nbsp;Add: Depreciation and amortization | 17549 | 20093 | 23758 |
| &nbsp;&nbsp;&nbsp;Add: Share-based payment expenses <sup>(2)</sup> |  |  | 1730 |
| &nbsp;&nbsp;&nbsp;Add: Amortization of contract cost | 1043 | 1297 | 1724 |
| &nbsp;&nbsp;&nbsp;Add: Loss on disposal of property and equipment and<br> intangible assets | 1674 | 702 | 1356 |
| &nbsp;&nbsp;&nbsp;Add: Listing-related expenses <sup>(3)</sup> | 286 | 302 | 2202 |
| &nbsp;&nbsp;&nbsp;Add: M&A-related expenses <sup>(4)</sup> | 17 | 330 | 593 |
| &nbsp;&nbsp;&nbsp;Add: Net interest expense (income) from corporate<br> borrowings and treasury assets <sup>(5)</sup> | 498 | 416 | (316) |
| Adjusted EBITDA | ¥21,078 | ¥58,650 | ¥111,130 |
| &nbsp;&nbsp;&nbsp;Divided by: Total revenue | 254611 | 299078 | 380662 |
| Adjusted EBITDA Margin <sup>(6)</sup> | 8% | 20% | 29% |

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&nbsp;&nbsp;&nbsp;&nbsp;(1) Share of loss of investments accounted for using the equity method includes share of loss of a joint venture accounted for using the equity method.

&nbsp;&nbsp;&nbsp;&nbsp;(2) Share-based payment expenses represent compensation granted to directors, officers, and employees in exchange for their services, consisting of equity-settled awards (non-cash expenses) and cash-settled awards (expenses involving future cash outflows). These expenses are recognized by allocating the fair value of each award over its respective vesting period. Prior to the IPO on March 12, 2026, no share-based payment expenses were recognized as the vesting conditions had not been met. Following the completion of PayPay's IPO, the cumulative expense recognition commenced in the fourth quarter ended March 31, 2026. Notably, in the calculation of Adjusted EBITDA, only equity-settled share-based payment expenses are adjusted as non-cash items, while cash-settled expenses are not adjusted.

&nbsp;&nbsp;&nbsp;&nbsp;(3) Listing-related expenses consist of the fees and expenses of the professional advisors that we hired in connection with the preparations for our initial public offering.

&nbsp;&nbsp;&nbsp;&nbsp;(4) M&A-related expenses, which consist of the fees and expenses of the professional advisors that we hired in connection with acquisitions and investments, such as our acquisition of PayPay Bank Corporation and PayPay Securities Corporation and accrued expenses related to holdbacks in connection with a prior acquisition.

&nbsp;&nbsp;&nbsp;&nbsp;(5) Net interest expense (income) from corporate borrowings and treasury assets comprises interest expense on borrowings from LY Corporation, offset by interest income derived from guarantee deposits, cash and cash equivalents, and Japanese government securities within the payment segment.

&nbsp;&nbsp;&nbsp;&nbsp;(6) Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by total revenue.

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**Other Key Metrics**

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| | | | |
|:---|:---|:---|:---|
|  | **For the year ended March 31,** | **For the year ended March 31,** | **For the year ended March 31,** |
|  | **2024** | **2025** | **2026** |
|  | **(in millions of yen, unless otherwise indicated)** | **(in millions of yen, unless otherwise indicated)** | **(in millions of yen, unless otherwise indicated)** |
| Operating profit | ¥11 | ¥35,510 | ¥80,082 |
| Operating profit margin | —% | 12% | 21% |
| Profit (loss) for the year (period) | ¥(830) | ¥39,157 | ¥117,810 |
| Profit (loss) for the year (period) margin | —% | 13% | 31% |
| **Non-IFRS Financial Measure:** |  |  |  |
| Adjusted EBITDA <sup>(1)</sup> | ¥21,078 | ¥58,650 | ¥111,130 |
| Adjusted EBITDA Margin <sup>(2)</sup> | 8% | 20% | 29% |
|  | **(in trillions of yen, unless otherwise indicated)** | **(in trillions of yen, unless otherwise indicated)** | **(in trillions of yen, unless otherwise indicated)** |
| **Operating Metrics:** |  |  |  |
| ***Consolidated*** |  |  |  |
| Total GMV <sup>(3)</sup> | ¥12.73 | ¥15.68 | ¥19.36 |
| ***Payment segment*** |  |  |  |
| Payment Segment GMV <sup>(4)</sup> | ¥12.46 | ¥15.39 | ¥19.03 |
| Take Rate <sup>(5)</sup> | 1.70% | 1.61% | 1.64% |
| Cost Rate <sup>(6)</sup> | 1.73% | 1.42% | 1.30% |
| PayPay MTU (millions of users) <sup>(7)</sup> | 33.2 | 37.2 | 41.0 |
| PayPay Number of Transactions (millions of<br> transactions) <sup>(8)</sup> | 6367.7 | 7806.6 | 9243.4 |
| ***Financial service segment*** |  |  |  |
| PayPay Bank Balance of Deposits (billions of yen) <sup>(9)</sup> | ¥1,685.2 | ¥1,841.0 | ¥2,269.1 |
| PayPay Bank Balance of Loans (billions of yen) <sup>(10)</sup> | ¥723.8 | ¥926.9 | ¥1,238.6 |

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&nbsp;&nbsp;&nbsp;&nbsp;(1) Adjusted EBITDA is defined as profit for the year (period) plus income tax expense (benefit), share of loss of investments accounted for using the equity method, depreciation and amortization, loss on disposal of property and equipment and intangible assets, share-based payment expense, amortization of contract cost, listing-related expenses, M&A-related expenses and net interest expense (income) from corporate borrowings and treasury assets. Share of profit (loss) of investments accounted for using the equity method includes share of loss of a joint venture accounted for using the equity method.

&nbsp;&nbsp;&nbsp;&nbsp;(2) Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by Total Revenue.

&nbsp;&nbsp;&nbsp;&nbsp;(3) Total GMV, or gross merchandise value, is defined as the total of PayPay Balance GMV, PayPay Credit GMV, PayPay Card GMV and PayPay Bank Visa Debit Card GMV, excluding the GMV of cancelled transactions. PayPay Bank Visa Debit Card GMV is defined as payments made using PayPay Bank Visa Debit Card (physical card) and Cardless Visa Debit transaction volume for both personal and corporate use, excluding the GMV of PayPay Debit GMV and ATM withdrawal amounts when using the cash card function, excluding the GMV of any cancelled transactions.

&nbsp;&nbsp;&nbsp;&nbsp;(4) Payment Segment GMV is defined as the total of PayPay Balance GMV, PayPay Credit GMV and PayPay Card GMV, excluding the GMV of cancelled transactions.

&nbsp;&nbsp;&nbsp;&nbsp;(5) Take Rate is defined as Payment segment's Total Revenue divided by Payment Segment GMV (which includes PayPay Balance, PayPay Credit, and PayPay Card GMV).

&nbsp;&nbsp;&nbsp;&nbsp;(6) Cost Rate is defined as Payment segment's operating expenses divided by Payment Segment GMV (which includes PayPay Balance, PayPay Credit, and PayPay Card GMV).

&nbsp;&nbsp;&nbsp;&nbsp;(7) PayPay MTU is defined as the number of unique users who completed at least one payment per month that contributes to PayPay Balance or PayPay Credit GMV, but excluding P2P (peer-to-peer) money transfers and cancelled transactions. PayPay MTU over a quarterly or annual period represents the figure from the last month in the relevant period.

&nbsp;&nbsp;&nbsp;&nbsp;(8) PayPay Number of Transactions is defined as the total number of completed transactions that contribute to PayPay Balance GMV or PayPay Credit GMV, but excluding P2P (peer-to-peer) money transfers and cancelled transactions.

&nbsp;&nbsp;&nbsp;&nbsp;(9) PayPay Bank Balance of Deposits is defined as the sum of demand deposit and time deposit.

&nbsp;&nbsp;&nbsp;&nbsp;(10) PayPay Bank Balance of Loans is defined as the sum of mortgage loans, overdraft and other.

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**Item 6. Directors, Senior Management and Employees**

**A Directors and senior management**

The following table sets forth certain information relating to our directors and executive officers as of the date of this Annual Report.

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| | | | | |
|:---|:---|:---|:---|:---|
| **Name** | **Position** | **Date of Birth** | **Date of<br>appointment as<br>director or<br>executive officer** | **Date of joining<br>our Company** |
| Ichiro Nakayama | President, Representative Director, CEO and Corporate Officer | September 21, 1969 | June 2018 | June 2018 |
| Takeshi Idezawa | Director (Part-time) | June 9, 1973 | June 2023 | June 2023 |
| Yoshimitsu Goto | Director (Part-time) | February 15, 1963 | June 2019 | June 2019 |
| Junichi Miyakawa | Director (Part-time) | December 1, 1965 | June 2025 | June 2025 |
| Fumiya Takasu | Director (Part-time) | November 18, 1972 | June 2026 | June 2026 |
| Yasuyoshi Karasawa | Independent Outside Director (Part-time), Audit and Supervisory Committee Member | October 27, 1950 | June 2023 | June 2023 |
| Paul Yonamine | Independent Outside Director (Part-time), Audit and Supervisory Committee Member | August 20, 1957 | June 2023 | June 2023 |
| Hiroko Kono | Independent Outside Director (Part-time), Audit and Supervisory Committee Member | May 8, 1965 | June 2023 | June 2023 |
| Hiroto Kaneko | Independent Outside Director (Part-time), Audit and Supervisory Committee Member | February 26, 1957 | June 2023 | June 2023 |
| Hajime Baba | Executive Vice President, Co-COO and Corporate Officer | September 7, 1965 | June 2023 | June 2018 |
| Masamichi Yasuda | Executive Vice President, Co-COO and Corporate Officer | August 22, 1960 | June 2023 | October 2021 |
| Masanori Sode | Managing Corporate Officer, CAO and CHRO | August 27, 1963 | June 2023 | June 2018 |
| Wataru Kagechika | Managing Corporate Officer and CFO | June 4, 1974 | July 2023 | January 2022 |

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(1)Yasuyoshi Karasawa, Paul Yonamine, Hiroko Kono, and Hiroto Kaneko satisfy the requirements for outside directors under the Companies Act.

(2)The terms of office of all current directors will expire at the close of the ordinary general meeting of shareholders relating to the fiscal year 2026.

**Biographical Information**

The following is a summary of certain biographical information concerning our executive officers and directors.

*Ichiro Nakayama* joined our predecessor, Pay Corporation, in June 2018, and has since served as our President, Representative Director, Corporate Officer and Chief Executive Officer. He received his bachelor's degree in economics from Meiji Gakuin University in 1994, and started his career at International Digital Communication Inc. (currently IDC Frontier Inc.) in April 1994. Mr. Nakayama served in various key positions, including Representative Director and President of IDC Frontier Inc. and Representative Director and Executive Vice President of Ikyu Corporation prior to joining us. He also served as Director of Z Financial Corporation (currently LY Corporation). He concurrently serves as Director of Fukuoka SoftBank HAWKS Corp., Representative Director of PayPay SC Corporation, and Director of SoftBank Corp.

*Takeshi Idezawa* joined us as our Director in June 2023. He received his bachelor's degree in political science and economics from Waseda University in 1996 and started his career at Asahi Mutual Life Insurance Company in April 1996. He served various key positions, including President and Representative Director of livedoor Co., Ltd. (currently NHN Techorus Corp.), President, Representative Director and CEO of LINE Corporation (currently A Holdings Corporation), Representative Director of LINE Book Distribution Corporation, Representative Director of LINE Digital Frontier Corporation and Representative Director and Co-CEO of Z Holdings Corporation (currently LY Corporation). He concurrently serves as President and Representative Director and CEO of LY Corporation, President and Representative Director of B Holdings Corporation, and Director of SoftBank Corp.

*Yoshimitsu Goto* joined us as our Director in June 2019. He received his bachelor's degree in social sciences from Hitotsubashi University in 1987, and he started his career at The Yasuda Trust and Banking Co., Ltd. (currently Mizuho Trust & Banking Co., Ltd.) in April 1987, and joined SoftBank Corp. (currently SoftBank Group Corp.) in June 2000. Mr. Goto served in various key positions, including Director of Vodafone K.K. (currently SoftBank Corp.) and Director of SoftBank Payment Service Corp. (currently SB Payment Service Corp.). He concurrently serves as Representative Director, President, CEO & Acting Owner of Fukuoka SoftBank HAWKS Corp. and Board Director,

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Corporate Officer, Senior Vice President, CFO & CISO of SoftBank Group Corp., in addition to serving as an officer or director at several other SoftBank Group companies.

*Junichi Miyakawa* joined us as our Director in June 2025. He received his bachelor's degree in Buddhist studies from Hanazono University in 1988, and started his career as the Representative Director and President of KK Momotaro Internet and has served in various key positions with our parent company, including Representative Director & President of DTH Marketing Corp. (currently SoftBank Corp.), and Representative Director & CTO, Technology Unit Head and Technology Strategy Unit Head of SoftBank Corp. prior to joining us. Mr. Miyakawa concurrently serves as the President, Managing Executive Officer and CEO of SoftBank Corp. and Representative Director & Chairman of B Holdings Corporation.

*Fumiya Takasu* joined us as our Director in June 2026. He received his bachelor's degree in business administration from Chuo University in 1996, and started his career at OMRON Microcomputer Systems, Inc. (currently SoftBank Group Corp.) in April of the same year. He served in various key positions, including President and CEO of SB Mobile Service Corp. and President and CEO of SB Power Corp. Mr. Takasu currently serves as Senior Vice President of SoftBank Corp., Director of RBJ Corp., and Director of SB Power Corp.

*Yasuyoshi Karasawa* joined us as our Independent Outside Director and Audit and Supervisory Committee Member in June 2023. He received his bachelor's degree in economics from Kyoto University in 1975, and he started his career at Sumitomo Marine and Fire Insurance Co., Ltd. (currently Mitsui Sumitomo Insurance Co., Ltd.) in April 1975. He served in various key positions in the company, eventually becoming their Representative Director, President & CEO in April 2010, and also served as the Representative Director and Executive Officer of MS&AD Insurance Group Holdings prior to joining us. Mr. Karasawa concurrently serves as Special Advisor of Mitsui Sumitomo Insurance Co., Ltd.

*Paul Yonamine* joined us as our Independent Outside Director and Audit and Supervisory Committee Member in June 2023. He received his bachelor's degree in science in business administration from the University of San Francisco in 1979, and started his career at Peat, Marwick, Mitchell & Co. (currently KPMG LLP) in June 1979. He served in various key positions, including Managing Partner of KPMG LLP Hawaii, Chairman and CEO of KPMG Global Solutions LLC (currently PwC Advisory LLC), Representative Director, President & CEO of Hitachi Consulting Co., Ltd., Representative Director, President and CEO of IBM Japan, Ltd., Director and Chairman of GCA Corporation, Chairman and CEO of Central Pacific Bank, and Representative Director & Chairman of Central Pacific Financial Corp. Mr. Yonamine concurrently serves as Outside Director of Sumitomo Mitsui Banking Corporation, Outside Director of Seven & i Holdings Co., Ltd. and Chairman Emeritus of Central Pacific Bank.

*Hiroko Kono* joined us as our Independent Outside Director and Audit and Supervisory Committee Member in June 2023. She received her bachelor's degree in philosophy from Waseda University in 1989, started her career at Mitsubishi Corporation in April 1989 and joined Capital International Research, Inc. in July 1992 where she worked in its Tokyo Office, Los Angeles Headquarters and Washington, D.C. Office. Ms. Kono also served as Executive Director and Head of Operations of International School of Asia, Karuizawa and Head of Operations of UWC ISAK Japan. She concurrently serves as Senior Executive Coach of COACH A Co., Ltd., Outside Director of Life Corporation, and Outside Director and Audit and Supervisory Committee Member of Satudora Holdings Co., Ltd.

*Hiroto Kaneko* joined us as our Independent Outside Director and Audit and Supervisory Committee Member in June 2023. He received his bachelor's degree in economics from Waseda University in 1980, and started his career at Arthur Andersen & Co in Japan (currently KPMG AZSA LLC) in April 1980 as Japanese Certified Public Accountant. Mr. Kaneko served as audit partner of many Japanese global public companies and played various key roles, including the Board Member of KPMG AZSA LLC. He is now running his own CPA office and concurrently serves as Audit and Supervisory Committee Member of H.I.S. Co., Ltd. and Outside Corporate Auditor of Oriental Yeast Co., Ltd., respectively.

*Hajime Baba* joined our predecessor, Pay Corporation, in June 2018 and currently serves as our Vice President, Corporate Officer and Co-Chief Operating Officer. Mr. Baba started his career at Nihon SoftBank (currently SoftBank Group Corp.) in April 1988, and has since served various key positions within the organization, including President and Representative Director of SB Power Corp. and Corporate Officer and Advisor of SoftBank Corp.

*Masamichi Yasuda* joined us in October 2021 and currently serves as our Vice President, Corporate Officer and Co-Chief Operating Officer. He started his career at The Bank of Tokyo, Ltd. (currently MUFG Bank, Ltd.) in April 1983, and has served various key positions, including US Treasurer and Deputy CFO at Union Bank, Director, CRO and Chief Executive of Global Markets at Mitsubishi UFJ Financial Group, and Deputy President of Mitsubishi UFJ Morgan Stanley Securities., prior to joining us. Mr. Yasuda concurrently serves as Director of PayPay Securities Corporation, Director of Credit Engine, Inc. and Director of PayPay Bank Corporation.

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*Masanori Sode* joined our predecessor, Pay Corporation in June 2018 and currently serves as our Managing Corporate Officer, Chief Administrative Officer and Chief Human Resource Officer. He started his career at The Nippon Credit Bank, Ltd. (currently Aozora Bank, Ltd.) in April 1986, and served in various key positions, including Representative Director of Netrust, Ltd. (currently LY Corporation) and Executive Vice President and Representative Director of The Japan Net Bank, Limited (currently PayPay Bank Corporation). Mr. Sode concurrently serves as Director of PayPay Card Corporation and PayPay India Private Limited, as well as Person Responsible for Execution of Duties for Kioicho First LLC, Kioicho Second LLC and Kioicho Third LLC.

*Wataru Kagechika* joined us in January 2022 and currently serves as our Managing Corporate Officer and Chief Financial Officer. He started his career at Industrial Bank of Japan (currently Mizuho Bank, Ltd.) in April 1998. Before joining PayPay, he served as Deputy General Manager of the Financial Planning Dept. and Strategic Planning Dept. of Mizuho Financial Group, Inc. He was seconded as a General Manager of Corporate Planning Dept. and IR Office at SoftBank Corp., after Director at Americas Department of Mizuho Bank, Ltd. and Senior IR officer at Mizuho Financial Group, Inc. Mr. Kagechika concurrently serves as Director of PayPay India Private Limited.

**B Compensation**

The aggregate compensation, including bonuses, paid to our directors, members of the Audit and Supervisory Committee and executive officers as a group for the fiscal year ended March 31, 2026 was ¥1,008 million. Such compensation consisted of fixed remuneration and performance-based remuneration. Fixed remuneration is determined based on the position and responsibilities of each individual, while performance-based remuneration is linked to our financial performance and individual contributions.

We also grant stock-based compensation, including stock options, to certain of our directors and executive officers in order to align their interests with those of our shareholders and to incentivize long-term value creation. The details of these stock option plans are described under "Stock Options" below.

For the fiscal year ended March 31, 2026, we did not pay any other material cash compensation or benefits in kind to our directors and executive officers. We have not set aside or accrued any amounts to provide pension, retirement or similar benefits to our directors and executive officers.

We have adopted a Clawback Policy that complies with applicable SEC and Nasdaq rules. In the event that an accounting restatement is required, following review and deliberation by the Compensation Committee pursuant to such policy, we will seek recovery of any incentive-based compensation determined to have been erroneously awarded and take such other actions as may be required under the policy.

**Stock Options**

On November 15, 2025, we effected a stock split of one share into 200 shares. Unless otherwise indicated, all numbers of shares underlying stock options and the corresponding exercise prices presented below in this subsection have been retroactively adjusted to reflect the Stock Split.

The principal terms of our stock options are summarized below. The exercise price, number of shares underlying the options, grant date, exercise period, purchase price and applicable performance conditions are described in the tables below. Except as otherwise determined by our board of directors, the stock options are generally subject to continued service conditions and, for certain series, performance-based conditions, including market capitalization thresholds.

***2nd Series Stock Option–46th Series Stock Option (Trust-type Stock Options)***

In August 2022, our shareholders approved a plan to grant stock options to our directors, corporate officers and employees through trust-type stock options. Under this plan, we issued stock options to purchase 11,636,000 common shares on August 29, 2022, which were initially held by a trustee. On December 5, 2022, we granted a portion of those stock options to certain of our directors, corporate officers and employees, whereby the trustee transferred stock options to purchase 4,589,200 common shares to our directors, corporate officers and employees pursuant to a resolution of our board of directors. As of April 30, 2025, the remaining trust-type stock options to purchase 7,046,800 common shares were forfeited and extinguished, and by May 30, 2025, the trust-type stock options to purchase 580,000 common shares that were registered were forfeited and extinguished due to retirement.

For the issuance of the stock options under this plan, funds were entrusted to the trustee by Z Holdings Corporation (currently LY Corporation) and SoftBank Corp., each in equal amounts, based on which the trustee paid the purchase price of the stock options to us. We account for share-based compensation in accordance with IFRS 2, "Share-based Payment." The fair value of stock options is measured at the grant date and recognized over the applicable vesting period. See Notes 28 and 35 to our audited consolidated financial statements included elsewhere in this Annual Report.

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Transfer of the stock options required an approval by our board of directors. A stock option holder generally could not exercise stock options if they were no longer a director, corporate officer or employee of us, except under limited circumstances or as otherwise determined by our board of directors. In addition, a stock option holder generally could not exercise stock options unless our common shares or depository receipts or other securities representing our common shares were listed on any financial instrument exchanges. Moreover, certain of our stock options could not be exercised unless the amount of our market capitalization exceeded a certain threshold, which constituted a performance-based vesting condition. Unvested or unexercisable stock options were generally forfeited upon termination of service. The amount of our market capitalization was the product of (a) the number of our outstanding common shares excluding treasury shares we may hold and (b) a price per share that was calculated based on a market price of our common shares or depository receipts or other securities representing our common shares listed on a financial instrument exchange. On June 11, 2026, the knockout condition applicable to the trust-type stock option plan was triggered. As a result, all remaining outstanding stock options under the 2nd through 46th Series Stock Option plan were automatically extinguished pursuant to the terms of the applicable award agreements. As of June 15, 2026, no stock options remained outstanding under this plan.

The following table summarizes the stock options we have issued under the trust-type stock option plan.

***Restricted Stock Units***

In October 2025 and November 2025, our Board of Directors and extraordinary general meeting of shareholders, respectively, approved resolutions to introduce a framework for stock-based compensation in the form of restricted stock units ("RSUs") for our directors, including separate frameworks for (i) director(s) other than members of the Audit and Supervisory Committee and (ii) members of the Audit and Supervisory Committee.

For director(s) other than members of the Audit and Supervisory Committee, the resolutions approved an annual maximum remuneration limit for RSU-based compensation of up to ¥1.0 billion in value and up to 500,000 shares per fiscal year in the aggregate. For members of the Audit and Supervisory Committee, the resolutions approved an annual maximum remuneration limit for RSU-based compensation of up to ¥500 million in value and up to 250,000 shares per fiscal year in the aggregate.

These resolutions were adopted solely to establish the upper limits and general framework for RSU-based compensation as required under the Companies Act of Japan. At this time, the substantive design and operational details of any RSU program, including grant timing, vesting conditions, performance criteria (if any), individual allocation amounts and other terms, have not been determined. Any such details will be resolved separately by our Board of Directors or through discussions among the Audit and Supervisory Committee members, as applicable. There can be no assurance that RSUs will be granted up to the approved limits, or at all.

***47th Series Stock Option (Tax qualified-type Stock Options)***

In April 2025, our shareholders approved a plan to grant stock options to our directors, corporate officers and employees through tax qualified-type stock options. Under this plan, on May 31, 2025, we granted stock options to purchase 7,625,400 common shares. By June 15, 2026, stock options to purchase 309,800 common shares had been forfeited and extinguished due to employee departures.

***48th Series Stock Option (Tax qualified-type Stock Options)***

In April 2025, our shareholders approved a plan to grant stock options to our directors and corporate officers through tax qualified-type stock options. Under this plan, on May 31, 2025 we granted stock options to purchase 535,000 common shares.

***49th Series Stock Option (One-yen-exercisable at retirement-type Stock Options)***

In April 2025, our shareholders approved a plan to grant stock options to our directors, corporate officers through one-yen-exercisable at retirement-type stock options. Under this plan, on May 31, 2025, we granted stock options to purchase 569,000 common shares.

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The following table summarizes stock options granted under our stock option plans.

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Series** | **Type** | **Number of<br>common<br>shares<br>underlying<br>stock options** | **Exercise<br>price<br>(per share)** | **Beginning of<br>exercise period** | **Expiration date** | **Minimum of market<br>capitalization to<br>exercise stock<br>options** | **Purchase price** |
| 2nd | Trust-type |  | ¥1300 | April 1, 2024 | March 31, 2033 |  | ¥106133700 |
| 3rd | Trust-type |  | ¥1300 | April 1, 2025 | March 31, 2033 |  | ¥95638350 |
| 4th | Trust-type |  | ¥1300 | April 1, 2026 | March 31, 2033 |  | ¥91044000 |
| 5th | Trust-type |  | ¥1300 | April 1, 2027 | March 31, 2033 |  | ¥88009200 |
| 6th | Trust-type |  | ¥1300 | April 1, 2028 | March 31, 2033 |  | ¥84892080 |
| 7th | Trust-type |  | ¥1300 | April 1, 2024 | March 31, 2033 | ¥3 trillion | ¥50211200 |
| 8th | Trust-type |  | ¥1300 | April 1, 2025 | March 31, 2033 | ¥3 trillion | ¥43537530 |
| 9th | Trust-type |  | ¥1300 | April 1, 2026 | March 31, 2033 | ¥3 trillion | ¥41647110 |
| 10th | Trust-type |  | ¥1300 | April 1, 2027 | March 31, 2033 | ¥3 trillion | ¥40277520 |
| 11th | Trust-type |  | ¥1300 | April 1, 2028 | March 31, 2033 | ¥3 trillion | ¥39120120 |
| 12th | Trust-type |  | ¥1300 | April 1, 2024 | March 31, 2033 | ¥4 trillion | ¥39633600 |
| 13th | Trust-type |  | ¥1300 | April 1, 2025 | March 31, 2033 | ¥4 trillion | ¥35598560 |
| 14th | Trust-type |  | ¥1300 | April 1, 2026 | March 31, 2033 | ¥4 trillion | ¥34499940 |
| 15th | Trust-type |  | ¥1300 | April 1, 2027 | March 31, 2033 | ¥4 trillion | ¥32027340 |
| 16th | Trust-type |  | ¥1300 | April 1, 2028 | March 31, 2033 | ¥4 trillion | ¥31179240 |
| 17th | Trust-type |  | ¥1300 | April 1, 2024 | March 31, 2033 | ¥5 trillion | ¥25746660 |
| 18th | Trust-type |  | ¥1300 | April 1, 2025 | March 31, 2033 | ¥5 trillion | ¥25634880 |
| 19th | Trust-type |  | ¥1300 | April 1, 2026 | March 31, 2033 | ¥5 trillion | ¥19778720 |
| 20th | Trust-type |  | ¥1300 | April 1, 2027 | March 31, 2033 | ¥5 trillion | ¥10997180 |
| 21st | Trust-type |  | ¥1300 | April 1, 2028 | March 31, 2033 | ¥5 trillion | ¥10812900 |
| 22nd | Trust-type |  | ¥1300 | April 1, 2024 | March 31, 2033 | ¥6 trillion | ¥17106440 |
| 23rd | Trust-type |  | ¥1300 | April 1, 2025 | March 31, 2033 | ¥6 trillion | ¥17054180 |
| 24th | Trust-type |  | ¥1300 | April 1, 2026 | March 31, 2033 | ¥6 trillion | ¥15781480 |
| 25th | Trust-type |  | ¥1300 | April 1, 2027 | March 31, 2033 | ¥6 trillion | ¥15717000 |
| 26th | Trust-type |  | ¥1300 | April 1, 2028 | March 31, 2033 | ¥6 trillion | ¥12094320 |
| 27th | Trust-type |  | ¥1300 | April 1, 2024 | March 31, 2033 | ¥7 trillion | ¥6759800 |
| 28th | Trust-type |  | ¥1300 | April 1, 2025 | March 31, 2033 | ¥7 trillion | ¥6745200 |
| 29th | Trust-type |  | ¥1300 | April 1, 2026 | March 31, 2033 | ¥7 trillion | ¥6748850 |
| 30th | Trust-type |  | ¥1300 | April 1, 2027 | March 31, 2033 | ¥7 trillion | ¥6737900 |
| 31st | Trust-type |  | ¥1300 | April 1, 2028 | March 31, 2033 | ¥7 trillion | ¥6719650 |
| 32nd | Trust-type |  | ¥1300 | April 1, 2024 | March 31, 2033 | ¥8 trillion | ¥7362600 |
| 33rd | Trust-type |  | ¥1300 | April 1, 2025 | March 31, 2033 | ¥8 trillion | ¥7337400 |
| 34th | Trust-type |  | ¥1300 | April 1, 2026 | March 31, 2033 | ¥8 trillion | ¥7358400 |
| 35th | Trust-type |  | ¥1300 | April 1, 2027 | March 31, 2033 | ¥8 trillion | ¥7008000 |
| 36th | Trust-type |  | ¥1300 | April 1, 2028 | March 31, 2033 | ¥8 trillion | ¥7016000 |
| 37th | Trust-type |  | ¥1300 | April 1, 2024 | March 31, 2033 | ¥9 trillion | ¥8693230 |
| 38th | Trust-type |  | ¥1300 | April 1, 2025 | March 31, 2033 | ¥9 trillion | ¥8655920 |
| 39th | Trust-type |  | ¥1300 | April 1, 2026 | March 31, 2033 | ¥9 trillion | ¥8438220 |
| 40th | Trust-type |  | ¥1300 | April 1, 2027 | March 31, 2033 | ¥9 trillion | ¥8474480 |
| 41st | Trust-type |  | ¥1300 | April 1, 2028 | March 31, 2033 | ¥9 trillion | ¥8484840 |
| 42nd | Trust-type |  | ¥1300 | April 1, 2024 | March 31, 2033 | ¥10 trillion | ¥12774080 |
| 43rd | Trust-type |  | ¥1300 | April 1, 2025 | March 31, 2033 | ¥10 trillion | ¥12749000 |
| 44th | Trust-type |  | ¥1300 | April 1, 2026 | March 31, 2033 | ¥10 trillion | ¥12782440 |
| 45th | Trust-type |  | ¥1300 | April 1, 2027 | March 31, 2033 | ¥10 trillion | ¥12916200 |
| 46th | Trust-type |  | ¥1300 | April 1, 2028 | March 31, 2033 | ¥10 trillion | ¥12916200 |
| 47th | Tax qualified | 7315600 | ¥1300 | April 25, 2027 | April 23, 2035 | ¥— | ¥Nil |
| 48th | Tax qualified | 535000 | ¥1300 | April 25, 2027 | April 23, 2035 | ¥— | ¥Nil |
| 49th | One-yen exercisable | 569000 | ¥1 | June 1, 2025 | May 31, 2045 | ¥— | ¥Nil |

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The following table summarizes the outstanding 48th and 49th Series Stock Options held by our directors and executive officers as of June 15, 2026.

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| | | | |
|:---|:---|:---|:---|
| **Name** | **Title** | **Number of Common<br>Shares Underlying<br>Stock Options Granted** | **Grant Date** |
| Ichiro Nakayama | President, Representative Director, CEO and Corporate Officer | \* | May 31, 2025 |
| Hajime Baba | Executive Vice President, Co-COO and Corporate Officer | \* | May 31, 2025 |
| Masamichi Yasuda | Executive Vice President, Co-COO and Corporate Officer | \* | May 31, 2025 |
| Masanori Sode | Managing Corporate Officer, CAO and CHRO | \* | May 31, 2025 |
| Wataru Kagechika | Managing Corporate Officer and CFO | \* | May 31, 2025 |

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\* We have not disclosed the number of common shares underlying the stock options granted to each individual where such amount is less than 1% of our total outstanding shares and such information is not otherwise individually required to be disclosed under Japanese law or publicly disclosed by us. We believe that such individual information is not material to investors.

**Dilution**

As of June 15, 2026 the total number of common shares underlying outstanding stock options represented approximately 1.24% of our total outstanding common shares. If all outstanding stock options were exercised, such exercises would result in dilution to existing shareholders.

 **C Board Practices**

See "Item 6. Directors, Senior Management and Employees—A. Directors and Senior Management" for information about the terms of service of the members of our Board of Directors, including the period during which each director has served in that office and the expiration of their current term.

**Board of Directors**

All directors are elected by our shareholders at a general meeting of shareholders, with directors who are Audit and Supervisory Committee members being elected separately from other directors. Our articles of incorporation provide for a board of directors consisting of at most ten directors who are not Audit and Supervisory Committee members and at most five directors who are members of the Audit and Supervisory Committee. The term of office for directors who are not Audit and Supervisory Committee members expires at the close of the ordinary general meeting of shareholders held relating to the last fiscal year ending within one year after their election, and the term of office for directors who are members of the Audit and Supervisory Committee expires at the close of the ordinary general meeting of shareholders held relating to the last fiscal year ending within two years after their election. As of the date of this Annual Report, our board of directors is comprised of nine directors, including four Audit and Supervisory Committee members. Directors and Audit and Supervisory Committee members may serve any number of consecutive terms.

**Audit and Supervisory Committee**

We have adopted the audit and supervisory committee system under the Companies Act. Regarding our directors who are Audit and Supervisory Committee members, all must be financially literate, and at least one must qualify as an "audit committee financial expert" under the Sarbanes-Oxley Act. (For disclosure regarding our financial expert, see "Item 16A. Audit committee financial expert".) They may not serve concurrently as executive directors, managers, or any other type of employee for us or our subsidiaries. In addition, more than half of the committee members must be outside directors as defined under the Companies Act. The Audit and Supervisory Committee has a statutory duty to audit the performance of duties by directors and prepare an annual audit report. The committee's duties also include, among others, assuming direct responsibility for the appointment and oversight of the independent registered public accounting firm, consenting to such firm's fees, and deciding the committee's opinion regarding the appointment, dismissal, and compensation of directors who are not committee members. As of the date of this Annual Report, the members of our Audit and Supervisory Committee are Yasuyoshi Karasawa, Paul Yonamine, Hiroko Kono, and Hiroto Kaneko, with Yasuyoshi Karasawa serving as the chairperson.

**Nominating Committee and Compensation Committee**

We voluntarily established a Nominating Committee and a Compensation Committee in July 2023 to enhance the independence, objectivity, and accountability of our board of directors. Each committee is comprised of at least

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three directors, at least two of whom are Audit and Supervisory Committee members that meet the definition of outside director under the Companies Act. The Nominating Committee must convene at least once a year to assess the competencies and diversity of directors, review the President's succession plan, and review the qualifications of director candidates to be proposed for election at the general meeting of shareholders. The Compensation Committee is required to meet at least once a year to advise on the implementation of the Clawback Policy, the policy for determining individual compensation of directors (excluding Audit and Supervisory Committee members) and the content of that compensation. As of the date of this Annual Report, the members of our Nominating Committee are Paul Yonamine, Hiroko Kono, and Ichiro Nakayama. The members of our Compensation Committee are Yasuyoshi Karasawa, Hiroto Kaneko, and Ichiro Nakayama.

**Service Contracts**

None of our directors has a service contract with us or any of our subsidiaries providing for benefits upon termination of employment. Directors participate in our shareholder-approved equity plans; any post-termination vesting or exercise provisions are plan-based and described in "Items 6. Directors, Senior Management and Employees—B. Compensation".

 **D Employees**

As of March 31, 2026, we had 4,567 employees, compared to 4,062 and 3,829 employees as of March 31, 2025 and 2024, respectively. The number of employees presented above represents the number of full-time employees on a consolidated basis and excludes temporary employees, including contract employees, dispatched workers and part-time employees. The change in the number of employees over the periods presented was primarily attributable to the expansion of our product and engineering functions, as well as growth in our sales and merchant support operations in connection with the continued increase in the number of registered users and merchants on our platform.

The following tables set forth a breakdown of our employees by employee category, business segment and geographic region as of March 31, 2026.

By employee category:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **PayPay<br>Corporation<br>(non-<br>consolidated)** | **PayPay Card<br>Corporation** | **PayPay Bank<br>Corporation** | **PayPay<br>Securities<br>Corporation<br>(non-<br>consolidated)** |
| Total employees<sup>(1)</sup> | 2159 | 1645 | 1137 | 147 |
| &nbsp;&nbsp;&nbsp;Full-time, regular employees | 1994 | 1357 | 768 | 134 |
| &nbsp;&nbsp;&nbsp;Fixed-term contract employees | 54 | 73 | 37 | 1 |
| &nbsp;&nbsp;&nbsp;Temporary agency employees | 111 | 215 | 332 | 12 |
| Total employees seconded from<br> SoftBank Group companies <sup>(1)</sup> | 60 | 63 | 232 | 54 |
| &nbsp;&nbsp;&nbsp;Seconded from SoftBank Corp. | 9 | 2 | 1 |  |
| &nbsp;&nbsp;&nbsp;Seconded from LY Corporation | 26 | 11 | 42 |  |

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(1)The number of total employees seconded from SoftBank Group companies is included in the number of total employees.

By business segment:

Payment: 3,529

Financial Services: 1,038

By geographic region:

Japan: 4,389

India: 178 (primarily supporting technology development and operations)

A significant portion of our employees are engaged in engineering and product development, as well as customer support and operational functions supporting our platform.

We are not subject to any collective bargaining agreements, and none of our employees are represented by labor unions. We have not experienced any material labor disputes, and we believe that our relationship with our employees is good.

 **E Share ownership**

As of the date of this Annual Report, our directors and executive officers as a group beneficially owned 97,035 common shares represented by American Depositary Shares, or ADSs, representing 0.01% of our outstanding

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common shares.

Beneficial ownership is determined in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended, and includes shares issuable upon the exercise of stock options. The percentage ownership is based on the number of common shares outstanding. Unless otherwise indicated, beneficial ownership is direct.

Holders of ADSs are not entitled to exercise voting rights directly with respect to the underlying common shares, and none of the ADSs held by our directors and executive officers carries voting rights that are different from those of other ADS holders. Information regarding stock options held by our directors and executive officers is disclosed in "Item 6.B. Compensation—Stock Options."

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| | | |
|:---|:---|:---|
|  | **Number of Common Shares Beneficially Owned** | **Percentage of Outstanding Common Shares Beneficially Owned** |
| **Directors and Executive Officers**<sup>(1)</sup> |  |  |
| Ichiro Nakayama | 57078 | \* |
| Takeshi Idezawa |  |  |
| Yoshimitsu Goto |  |  |
| Junichi Miyakawa |  |  |
| Fumiya Takasu |  |  |
| Yasuyoshi Karasawa |  |  |
| Paul Yonamine |  |  |
| Hiroko Kono |  |  |
| Hiroto Kaneko |  |  |
| Hajime Baba |  |  |
| Masamichi Yasuda | 14400 | \* |
| Masanori Sode | 15278 | \* |
| Wataru Kagechika | 10278 | \* |
| All Directors and Executive Officers as a Group | 97035 | \* |

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\* Represents beneficial ownership of less than 1% of our outstanding common shares.

Owned shares and percentages are rounded to the nearest whole percentage or decimal place, as applicable.

 **F Disclosure of a registrant's action to recover erroneously awarded compensation**

None.

See "Item 6. Directors, Senior Management and Employees—B. Compensation" for a description of our Clawback Policy.

**Item 7. Major Shareholders and Related Party Transactions**

 **A Major shareholders**

The following table sets forth information regarding the beneficial and record ownership of our common shares as of May 31, 2026, by each person known to us to beneficially or of record own 5% or more of our outstanding common shares.

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| | | |
|:---|:---|:---|
| **Shareholder** | **Number of<br>Shares Owned** | **Percentage of Total Shares<br>Outstanding** |
| B Holdings Corporation | 318721600 | 47.07% |
| SVF II Piranha (DE) LLC | 192829840 | 28.48% |
| The Bank of New York Mellon as Depositary Bank for Depositary Receipt Holders<br>(Standing proxy: Settlement & Clearing Services Department, Mizuho Bank, Ltd.) | 63504895 | 9.38% |
| SoftBank Corp. | 51043400 | 7.54% |
| LY Corporation | 51043400 | 7.54% |
| Total | 677143135 | 100.00% |

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The Bank of New York Mellon holds these shares of record solely in its capacity as the depositary for our American Depositary Receipt program and does not exercise beneficial ownership over these shares in its own right.

None of our shares of common stock entitles the holder to any preferential voting rights.

During the past three years, the percentage ownership of our major shareholders changed as follows. Based on our shareholder register and related transfer records, B Holdings Corporation, SVF II Piranha (DE) LLC, SoftBank Corp. and LY Corporation held approximately 54.78%, 34.00%, 5.61% and 5.61%, respectively, of our outstanding common shares as of March 31, 2023, and approximately 49.99%, 34.00%, 8.01% and 8.01%, respectively, after giving effect to the capital increase on April 10, 2025. The subsequent changes to the percentages shown in the table above primarily resulted from SVF II Piranha (DE) LLC's sale of common shares in our initial public offering and

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our issuances of common shares in connection with the initial public offering, the exercise of the over-allotment option and stock option exercises. The 200-for-1 stock split effected on November 15, 2025 did not affect their percentage ownership.

As of May 31, 2026, 256,334,735 common shares, or 37.86% of our outstanding common shares, were held of record in the United States by two record holders: The Bank of New York Mellon, as depositary for our ADR program, which held 63,504,895 common shares, or 9.38% of our outstanding common shares, and SVF II Piranha (DE) LLC, which held 192,829,840 common shares, or 28.48% of our outstanding common shares. The Bank of New York Mellon holds such shares solely in its capacity as depositary and does not beneficially own them in its own right.

As of May 31, 2026, except for The Bank of New York Mellon, all of our major shareholders listed above were directly or indirectly controlled by SoftBank Group Corp., a Japanese public company listed on the Tokyo Stock Exchange. Accordingly, SoftBank Group Corp. may be deemed to beneficially own 90.62% of the aggregate voting power of our issued and outstanding shares. To our knowledge, there are no arrangements that may, at a subsequent date, result in a change in control of the company.

 **B Related party transactions**

Our material related party transactions since April 1, 2022 are summarized below.

**Our Related Party Transaction Policy**

Under our current policies, transactions that fall within the scope of Article 356, paragraph (1), item (ii) and (iii) of the Companies Act, which may include transactions between PayPay and SoftBank Corp., LY Corporation, SB Payment Service Corporation, Fukuoka SoftBank HAWKS Corp., PayPay SC Corporation or B Holdings Corporation, for which any of our directors serve as a representative director, are subject to approval by both our Audit and Supervisory Committee and our board of directors regardless of the expected transaction amount. In addition, related party transactions with our controlling shareholders, such as SoftBank Group Corp., that are expected to exceed ¥1 billion are subject to approval by our Audit and Supervisory Committee and by our board of directors. All other transactions that are expected to exceed ¥1 billion are subject to approval by our Audit and Supervisory Committee.

**Relationship with SoftBank Group companies**

As of May 31, 2026, our principal shareholders were B Holdings Corporation (47.07%), SVF II Piranha (DE) LLC (28.48%), SoftBank Corp. (7.54%) and LY Corporation (7.54%).

SoftBank Group Corp. is the parent company of SoftBank Corp. and LY Corporation. With respect to B Holdings Corporation, SoftBank Corp. holds 50% of its shares and LY Corporation indirectly holds the other 50% of its shares. SoftBank Group Corp. is also a beneficial owner of a majority of shares in SVF II Piranha (DE) LLC. SoftBank Group Corp., SoftBank Corp. and LY Corporation are listed on the Tokyo Stock Exchange.

Since the launch of our PayPay app in 2018, we have had extensive business dealings with affiliated companies ultimately controlled by SoftBank Group Corp., including with respect to promoting and marketing our services, the secondment of employees and outsourcing of services as well as joint branding.

**Management Agreement with B Holdings Corporation**

On June 16, 2023, we entered into a management agreement with B Holdings Corporation, pursuant to which, as long as we are a consolidated subsidiary of LY Corporation, the prior written approval of B Holdings Corporation is required for us to (a) take any action to issue or grant our shares, stock options, convertible bonds or any other rights to acquire our shares (including disposal of treasury shares and treasury stock acquisition rights) if as a result of such action the percentage of voting rights held by B Holdings Corporation would be 50% or less (on a fully diluted basis assuming the exercise of all outstanding stock options, convertible bonds and rights to acquire our shares) and (b) sell, transfer, assign, grant a security interest in or dispose of assets, including shares, and business owned by us or our consolidated subsidiaries, which account for 20% or more of the book value of our total assets on a consolidated basis as of the latest fiscal year-end, to a third party other than our subsidiaries.

**Registration Rights Agreement**

In connection with our IPO, we have entered into a registration rights agreement (the "Registration Rights Agreement") with certain of our principal shareholders identified on the signature pages thereto. The Registration Rights Agreement grants certain demand registration rights, short-form registration rights and piggyback registration rights in respect of our common shares and related indemnification rights from us, subject to customary restrictions and exceptions. All fees, costs and expenses of registrations, other than underwriting discounts and commissions, are expected to be borne by us. The form of the Registration Rights Agreement is filed as an exhibit to this Annual Report.

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**Private Placement**

We have historically funded our operations through the issuance of shares to entities affiliated with SoftBank Group Corp. The following is a history of our securities issuances since April 1, 2022. On November 15, 2025, we effected a stock split of one share into 200 shares. The historical issuances of preferred shares and common shares described in this subsection have not been retroactively adjusted to reflect the Stock Split. The numbers of shares underlying stock options and the corresponding exercise prices presented in this subsection have been retroactively adjusted to reflect the Stock Split.

*Common Shares*

On April 1, 2022, we issued 140,000 common shares to SoftBank Corp., 280,000 common shares to SVF II Piranha (DE) LLC and 140,000 common shares to Yahoo Japan Corporation in exchange of the same number of Class A preferred shares held by them, respectively.

On October 1, 2022, we issued 545,000 common shares to SoftBank Corp. and 545,000 common shares to Z Intermediate Holdings Corporation in exchange of the same number of Class A preferred shares held by them, respectively.

On April 4, 2025, SVF II Piranha (DE) LLC exercised the stock options it purchased from One97 Communications Singapore Private Limited in December 2024 and we issued 159,012 common shares.

On April 10, 2025, we issued 94,802 common shares to SVF II Piranha (DE) LLC, 92,021 common shares to SoftBank Corp. and 92,021 common shares to LY Corporation for an aggregate consideration of JPY 105,722,866,068.

*Stock Options*

See "Item 6. Directors, Senior Management and Employees—B. Compensation—Stock Options" above.

*Plan-related issuance*

On August 29, 2022, we issued 4,215 2nd series stock options, 4,215 3rd series stock options, 4,215 4th series stock options, 4,215 5th series stock options, 4,186 6th series stock options, 2,080 7th series stock options, 1,929 8th series stock options, 1,929 9th series stock options, 1,929 10th series stock options, 1,929 11th series stock options, 1,795 12th series stock options, 1,642 13th series stock options, 1,622 14th series stock options, 1,542 15th series stock options, 1,542 16th series stock options, 1,242 17th series stock options, 1,242 18th series stock options, 962 19th series stock options, 542 20th series stock options 542 21st series stock options, 871 22nd series stock options, 871 23rd series stock options, 806 24th series stock options, 806 25th series stock options, 626 26th series stock options, 365 27th series stock options, 365 28th series stock options, 365 29th series stock options, 365 30th series stock options, 365 31st series stock options, 420 32nd series stock options, 420 33rd series stock options, 420 34th series stock options, 400 35th series stock options, 400 36th series stock options, 533 37th series stock options, 533 38th series stock options, 518 39th series stock options, 518 40th series stock options, 518 41st series stock options, 836 42nd series stock options, 836 43rd series stock options, 836 44th series stock options, 836 45th series stock options and 836 46th series stock options, upon exercise of which an aggregate of the number of shares of our common stock adjusted for the Stock Split, will be acquired at an exercise price of JPY 1,300 per share respectively, and allocated them to Kotaeru Trust Co., Ltd., for future delivery of such stock options in accordance with the trust agreement between Kotaeru Trust Co., Ltd. and SoftBank Corp. and the trust agreement between Kotaeru Trust Co., Ltd. and LY Corporation to directors, corporate officers and employees of us and our subsidiaries designated by us as beneficiaries of the trusts in accordance with the trust management agreement between us, Kotaeru Trust Co., Ltd. and Kotaeru Holdings Co., Inc.

On May 31, 2025, we granted 38,127 47th series stock options and 2,675 48th series stock options through tax qualified-type stock options and 2,845 49th series stock options through one-yen-exercisable at retirement-type stock options. These stock options entitle the holders, upon exercise, to purchase the number of shares of our common stock, adjusted for the Stock Split, at an exercise price of JPY 1,300 per share for the 47th and 48th series stock options and JPY 1 per share for the 49th series stock options, respectively. These stock options were allocated to our directors, corporate officers and other employees.

**Transactions in connection with reorganization of PayPay Card Corporation**

*Company Split*

Yahoo Japan Corporation was a wholly-owned subsidiary of Z Holdings Corporation before they merged to form LY Corporation. On October 1, 2022, PayPay Card Corporation took over LY Corporation's (then Yahoo Japan Corporation) credit card merchant acquiring business for PayPay Card by means of a company split and PayPay Card Corporation issued 5,426 of its shares to LY Corporation (then Yahoo Japan Corporation) as consideration.

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*Share Purchase*

On October 1, 2022, upon completion of the company split, we purchased all shares in PayPay Card Corporation from LY Corporation (then Yahoo Japan Corporation) for ¥63 billion pursuant to a share purchase agreement, whereby PayPay Card Corporation became our wholly-owned subsidiary.

*Distribution of Dividend*

On September 30, 2022, prior to the above acquisition, PayPay Card Corporation, which was LY Corporation's (then Yahoo Japan Corporation) wholly-owned subsidiary at the time, distributed dividends of ¥37 billion to LY Corporation (then Yahoo Japan Corporation) pursuant to the share purchase agreement between LY Corporation (then Yahoo Japan Corporation) and us.

*Issuance of Shares*

On October 7, 2022, PayPay Card Corporation issued 5,018 of its shares to us and we paid ¥37 billion to PayPay Card Corporation as consideration.

**Transactions in connection with acquisition of shares in PayPay Securities Corporation**

*Purchase of Newly Issued Shares*

On April 10, 2023, we purchased 65,560 newly issued shares of PayPay Securities Corporation at a price of ¥100,000 per share while SoftBank Corp. and Mizuho Securities Co., Ltd. purchased 13,536 and 20,904 such shares, respectively. Upon the completion of this transaction, we held 35.0% shares in PayPay Securities Corporation while SoftBank Corp., Mizuho Securities Co., Ltd. and Z Holdings Corporation held 30.6%, 34.0% and 0.4%, respectively, whereby PayPay Securities Corporation remained a subsidiary of SoftBank Corp.

*Share Purchase and Third-Party Allotment of New Shares*

On April 1, 2025, we purchased 57,265 shares of PayPay Securities Corporation at a price of ¥100,000 per share from SoftBank Corp. and 800 shares from LY Corporation, as well as acquired 70,000 new shares through a third-party allotment at the same price. Upon completion of this transaction, we held 75.2% of PayPay Securities Corporation while Mizuho Securities Co., Ltd. held 24.8%, making PayPay Securities Corporation our consolidated subsidiary.

**Transactions in connection with acquisition of shares in PayPay Bank Corporation**

On December 13, 2022, PayPay Bank Corporation conducted a third-party allotment of 883,000 new shares of non-voting Class A preferred shares at a price of ¥79,200 per share, which were purchased by Z Financial Corporation (currently LY Corporation).

In April 2025, we completed the acquisition of 47.1% of the common shares and 100% of the non-voting Class A preferred shares of PayPay Bank Corporation from Z Financial Corporation (currently LY Corporation) and Mitsui Sumitomo Insurance Co., Ltd. Upon completion of this transaction, Sumitomo Mitsui Banking Corporation, Fujitsu Ltd., Taiju Life Insurance Company Limited and Sumitomo Life Insurance Company held 46.6%, 5.3%, 0.5% and 0.5% of the common shares, respectively. Upon the conversion of the non-voting Class A preferred shares of PayPay Bank Corporation into common shares, effective April 28, 2025, we held 75.5% of the common shares, making PayPay Bank Corporation our consolidated subsidiary. Sumitomo Mitsui Banking Corporation, Fujitsu Ltd., Taiju Life Insurance Company Limited and Sumitomo Life Insurance Company held 21.5%, 2.4%, 0.2% and 0.2%, respectively, of the common shares upon the conversion of the non-voting Class A preferred shares of PayPay Bank Corporation into common shares.

Following the conversion of all non-voting Class A preferred shares of PayPay Bank Corporation into common shares, no non-voting Class A preferred shares remain outstanding as of the date of this Annual Report.

**Loans to PayPay Card Corporation from LY Corporation**

In February 2018, PayPay Card Corporation (then YJ Card Corporation) entered into an agreement with LY Corporation (then Yahoo Japan Corporation), pursuant to which LY Corporation (then Yahoo Japan Corporation) agreed to provide loans of up to ¥70 billion to PayPay Card Corporation and PayPay Card Corporation agreed to grant a security interest at the request of LY Corporation (then Yahoo Japan Corporation) with respect to any contractual obligation between PayPay Card Corporation and LY Corporation (then Yahoo Japan Corporation). In April 2019, PayPay Card Corporation entered into a ¥10 billion loan agreement with LY Corporation (then Yahoo Japan Corporation) due in December 2027, with a fixed interest rate of 0.5%, for general business purposes, including working capital. As of March 31, 2026, the amount outstanding under this loan agreement was ¥10 billion. There is

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no remaining committed availability under this loan agreement.

In December 2019, PayPay Card Corporation entered into an agreement with LY Corporation (then Z Holdings Corporation), pursuant to which LY Corporation (then Z Holdings Corporation) agreed to provide loans of up to ¥25 billion to PayPay Card Corporation and PayPay Card Corporation agreed to grant a security interest at the request of LY Corporation (then Z Holdings Corporation) with respect to any contractual obligation between PayPay Card Corporation and LY Corporation (then Z Holdings Corporation). In December 2019, LY Corporation (then Z Holdings Corporation) provided a ¥10 billion loan to PayPay Card Corporation due in December 2028, with a fixed interest rate of 0.6%, for general business purposes, including working capital. As of March 31, 2026, the amount outstanding under this loan agreement was ¥10 billion. There is no remaining committed availability under this loan agreement.

In February 2024, PayPay Card Corporation entered into a ¥15 billion term loan agreement with LY Corporation due in February 2026, with a fixed interest rate of 0.7%, for general business purposes, including working capital. Under the agreement, PayPay Card Corporation agreed to grant a security interest at the request of LY Corporation with respect to any contractual obligation between PayPay Card Corporation and LY Corporation. This loan was repaid in full in February 2026, and as of March 31, 2026, no amount was outstanding under this loan agreement.

In December 2024, LY Corporation and PayPay Card Corporation executed a memorandum of understanding pursuant to which the permitted use of proceeds for the intercompany loans described above was broadened to include business investments (including the provision of working capital and loans to PayPay Corporation for its business investments). The other principal terms of the loan agreements remain the same. The memorandum of understanding provides that the parties may agree from time to time to renew or extend the maturity of the loans described above. In the event of such renewal, the date of maturity is extendable unless LY Corporation provides one month of notice that the repayment date will not be extended, with the final maturity being no later than March 29, 2030. Any such renewal bears interest at a rate equal to LY Corporation's average funding cost as of the day after the repayment date prior to the extension plus a spread of 0.1. As of March 31, 2026, the aggregate outstanding principal amount of the loans described above was ¥20 billion, consisting of the April 2019 and December 2019 loans, and the February 2024 term loan had been repaid in full in February 2026.

**Cash Deposits by PayPay Card Corporation with LY Corporation**

In October 2021, PayPay Card Corporation entered into a cash deposit agreement with LY Corporation (then Z Holdings Corporation) with a floating interest rate to be monthly agreed at no more than 2% per annum in order to improve funding efficiency through group financing, pursuant to which PayPay Card Corporation has deposited cash to LY Corporation (previously Z Holdings Corporation). Under the agreement, the deposits can be withdrawn by PayPay Card Corporation based on its financial and business needs, after discussing with LY Corporation. In addition, the agreement may be terminated based on PayPay Card Corporation's financial and business needs only upon discussion with LY Corporation.

**Transactions with LY Corporation**

Yahoo Japan Corporation was a wholly-owned subsidiary of Z Holdings Corporation before they merged to form LY Corporation.

*Settlement Fee for e-commerce*

On January 9, 2019, we entered into an agency agreement with LY Corporation (then Yahoo Japan Corporation), pursuant to which LY Corporation acts as an agent for its merchants using our payment settlement services on e-commerce platforms operated by LY Corporation, whereby LY Corporation pays settlement fees to us on behalf of the merchants.

*Collaborative Promotion*

LY Corporation (previously Yahoo Japan Corporation) has utilized PayPay Points as its loyalty points offered to its customers. For instance, LY Corporation (previously Yahoo Japan Corporation) has offered promotional campaigns from time to time to customers of its e-commerce platforms such as Yahoo! JAPAN Shopping. LY Corporation pays to us cash amounts, which we record under our assets, corresponding to PayPay Points granted to its customers which are recorded as PayPay Users' deposits under our liabilities, helping us to add LY Corporation's customers to our user base.

In October 2022, we entered into an agreement with LY Corporation (then Yahoo Japan Corporation) on promotion, advertising, user acquisition and user incentives, pursuant to which LY Corporation (then Yahoo Japan Corporation) produced and placed advertisements for promotional campaigns to grant PayPay Points to customers using our payment settlement services on its e-commerce platform by allocating expenses between LY Corporation (then Yahoo Japan Corporation) and us.

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*Agency Agreement for PayPay Card's Merchant Acquisition*

On July 30, 2018, we entered into an agency agreement with LY Corporation (then Yahoo Japan Corporation) for the PayPay Card (then YJ Card) credit card merchant acquiring business operated by LY Corporation (then Yahoo Japan Corporation) as the acquirer at that time. Under the agreement, we have been acting as an agent for PayPay merchants who applied for PayPay Card membership, whereby we receive merchants' receivables generated from payments using PayPay Cards at their shops from the acquirer and pay settlement fees to the acquirer on behalf of the merchants. On October 1, 2022, PayPay Card Corporation succeeded the status as a party to this agreement, or the status as the acquirer, from LY Corporation (then Yahoo Japan Corporation).

*Settlement Fee for e-commerce (PayPay Card Corporation)*

Since October 2022, LY Corporation (previously Yahoo Japan Corporation) has been acting as an agent for merchants using its e-commerce platforms, where PayPay Card (previously YJ Card) can be used as a payment method, whereby LY Corporation pays settlement fees on behalf of the merchants to PayPay Card Corporation (previously YJ Card Corporation).

For the transactions described above, we recorded revenue for the years ended March 31, 2024, 2025 and 2026 of ¥15.7 billion, ¥18.3 billion and ¥21.9 billion, respectively. In addition, the volume of rendering settlement service for the years ended March 31, 2024, 2025 and 2026 were ¥1,769.0 billion, ¥1,825.1 billion and ¥2,097.8 billion, respectively.

*PayPay Points Arrangements Paid to LY Corporation (previously Yahoo Japan Corporation) (PayPay Card Corporation)*

PayPay Card holders who use PayPay Card to make purchases on LY Corporation's (previously Yahoo Japan Corporation) e-commerce platforms are granted PayPay Points equivalent to a percentage of the value of such purchases. PayPay Card Corporation pays to LY Corporation cash amounts corresponding to the PayPay Points granted through the purchases described above.

We award PayPay Points to new PayPay Card holders in exchange for the issuance of PayPay Card and additional PayPay Points when a certain number of purchases are made with PayPay Card following such issuance as an incentive to increase our PayPay Card holder base and the use of PayPay Card. When new cardholders apply for PayPay Card through LY Corporation's e-commerce platforms, PayPay Card Corporation pays to LY Corporation cash amounts, corresponding to the PayPay Points awarded as a result of the application and subsequent purchases described above.

For the transactions described above, we recorded expenses of user incentives as transaction and service deductions for the years ended March 31, 2024, 2025 and 2026 of ¥6,573 million, ¥2,814 million and ¥2,897 million, respectively.

**Transactions with SoftBank Corp.**

*Collaborative Promotion*

SoftBank Corp. has utilized PayPay Points, PayPay Point Code with which users can pre-load their PayPay Balance and PayPay Coupons with which users can earn additional PayPay Points for payments using our payment settlement services as part of its loyalty programs offered to its customers. SoftBank Corp. pays to us cash amounts, which we record under our assets, corresponding to PayPay Points, PayPay Point Code and PayPay Coupons granted to its customers, which we record as PayPay User's deposits under our liabilities, helping us to add SoftBank Corp.'s customers to our user base.

For the transactions described above, the volume of settlement amounts for Granting PayPay points to users on behalf of SoftBank Corp. for the year ended March 31, 2024, 2025 and 2026 were ¥19,888 million, ¥36,385 million and ¥55,699 million, respectively.

*Securitization of SoftBank Corp.'s Receivables*

SoftBank Corp. has securitized its receivables from installment sales of mobile devices for funding and PayPay Bank Corporation has purchased certain beneficiary interest in those securitized installment receivables from SoftBank Corp. Securitized installment receivables are recorded as securities under our assets on our consolidated statements of financial position.

For the transactions described above, we recorded on securities for the years ended March 31, 2024, 2025 and 2026 of ¥80,278 million, ¥123,050 million and ¥139,630 million, respectively.

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**Transactions with SB Payment Service Corp.**

SB Payment Service Corp. is a wholly-owned subsidiary of SoftBank Corp.

*Settlement Fee*

SB Payment Service Corp. acts as our payment service provider, among others, and assists our merchants using our payment settlement services. Under a general agency agreement with SB Payment Service Corp., we transfer funds to SB Payment Service Corp. corresponding to the amount of purchases our users make with our PayPay app at merchants' stores less settlement fees we charge the merchants. SB Payment Service Corp. is then responsible for paying merchants from the transferred funds. SB Payment Service Corp. also provides us with various services, such as access to a payment gateway which connects the merchants to our payment system, and supports our relations with the merchants by checking information provided by the merchants and by communicating with the merchants on our behalf. We pay SB Payment Service Corp. a fee for merchants that connect to our payment system using the payment gateway, which is calculated based on a percentage applied to the value of transactions made through SB Payment Service Corp.'s systems.

For the transactions described above, the volume of settlement amounts for the years ended March 31, 2024, 2025 and 2026 were ¥419.1 billion, ¥721.4 billion and ¥1,011.2 billion, respectively.

*Fund Source Cost*

When users increase their PayPay Balance by carrier billing or SoftBank Card, a prepaid payment instrument, SB Payment Service Corp. transfers funds to the users' PayPay Balance as a payment agent and we pay SB Payment Service Corp. a Fund Source Cost and expenses relating to uncollectible receivables. In addition, when SB Payment Service Corp. transfers funds to the users' PayPay Balance, we record accounts receivable for SB Payment Service Corp. of an equal amount to the amount of funds transferred.

For the transactions described above, we recorded such expenses for the years ended March 31, 2024, 2025 and 2026 of ¥10.2 billion, ¥8.8 billion and ¥8.7 billion, respectively. In addition, the volume of settlement amounts for the years ended March 31, 2024, 2025 and 2026 were ¥912,322 million, ¥615,825 million and ¥591,330 million, respectively.

**C Interests of experts and counsel**

None.

**Item 8. Financial Information**

 **A Consolidated Statements and Other Financial Information**

See "Item 18. Financial Statements" for our consolidated financial statements included in this document.

**Legal Proceedings**

See "Item 4 Information on the Company—B. Business Overview—Legal Proceedings" for information about legal proceedings.

**Dividend Policy**

Declaration of cash dividends will be made by resolution of our board of directors, subject to applicable laws, and will depend on a number of factors, including our financial condition, results of operations, capital requirements, any contractual restrictions, general business conditions and other factors that our board of directors may deem relevant.

If we pay any dividends on our common shares, we will pay those dividends which are payable in respect of the common shares underlying the ADSs to the depositary, as the registered holder of such common shares, and the depositary then will pay such amounts to the ADS holders in proportion to the common shares underlying the ADSs held by such ADS holders, less the fees and expenses payable under the deposit agreement in respect of, and any Japanese tax applicable to, such dividends. See "Item 10 Additional Information—E. Taxation—Japanese Taxation" and "Item 12 Description of Securities Other than Equity Securities— D. American Depositary Shares." The depositary will generally convert the Japanese yen it receives into U.S. dollars and distribute the U.S. dollar amounts to holders of ADSs. See "Description of American Depositary Shares."

 **B Significant changes**

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Except as disclosed elsewhere in this Annual Report, we have not experienced any significant changes since the date of our audited consolidated financial statements included in this Annual Report.

**Item 9. The Offer and Listing**

 **A Offer and listing details**

PayPay Corporation's ADSs have been listed on the Nasdaq Global Select Market under the symbol "PAYP" since March 12, 2026. Prior to that date, there was no public trading market for our ADSs.

A part of the ADSs offered in our IPO was allocated to the POWL. All of the ADSs offered in the POWL were offered by Mizuho Securities Co., Ltd. and PayPay Securities Corporation, acting as agent and sub-agent respectively.

 **B Plan of distribution**

Not applicable

 **C Markets**

See "Item 9. The Offer and Listing—A. Offer and listing details" above.

 **D Selling shareholders**

Not applicable

 **E Dilution**

Not applicable

 **F Expenses of the issue**

Not applicable

**Item 10. Additional Information**

 **A Share capital**

Not applicable.

 **B Memorandum and articles of association**

**Objects and Purposes** 

Article 2 of our articles of incorporation provides that our purposes are to engage in various businesses, including planning, sales, consultancy, and customer support services related to settlement business and O2O business, information processing and provision services, financial services, including the issuance of prepaid payment instruments and funds transfer services, bank agency business, electronic payment services, money lending, credit card-related services, financial instruments intermediary business, and Type I and Type II financial instruments business and any other business incidental or relating to these activities.

**General** 

We are registered in the commercial register maintained by the Tokyo Legal Affairs Bureau under registry number 0100-01-192707. Our registered head office is located in Chiyoda-ku, Tokyo. Our articles of incorporation provide for a total number of authorized shares of 1,600,000,00 shares. As of May 31, 2026, 677,143,135 common shares were issued and outstanding. All issued common shares are fully-paid and non-assessable and generally transferable.

Our common shares are not subject to redemption or sinking fund provisions, and holders of our common shares are not liable to further capital calls by us. Our articles of incorporation do not contain any provision that discriminates against any existing or prospective holder of our common shares as a result of such holder owning a substantial number of shares.

**Directors** 

Our articles of incorporation provide for a board of directors consisting of at most ten directors who are not Audit and Supervisory Committee members and at most five directors who are Audit and Supervisory Committee members. The term of office for directors who are not Audit and Supervisory Committee members expires at the close

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of the ordinary general meeting of shareholders held relating to the last fiscal year ending within one year after their election. The term of office for directors who are Audit and Supervisory Committee members expires at the close of the ordinary general meeting of shareholders held relating to the last fiscal year ending within two years after their election. The election of directors shall not be based on cumulative voting. Under our Board of Directors Rules, directors with any special interest in a resolution of the board of directors may not participate in the vote on such resolution. The aggregate amount of compensation payable to directors is determined by a resolution of the general meeting of shareholders, separately for directors who are Audit and Supervisory Committee members and directors who are not Audit and Supervisory Committee members. Within the applicable aggregate amount approved by shareholders, individual compensation of directors who are not Audit and Supervisory Committee members, is determined by the President and Representative Director pursuant to delegation by the board of directors and based on recommendations of the Compensation Committee described under "Item 6. Directors, Senior Management and Employees—C. Board Practices" while individual compensation of directors who are Audit and Supervisory Committee members is determined through consultation among such directors. Our articles of incorporation do not set any specific borrowing powers or borrowing limits for directors and do not impose any retirement age or shareholding qualification for directors. Under the Companies Act and our articles of incorporation, we may, by resolution of the board of directors, exempt our directors (including former directors) from liability to us arising from neglect of their duties, if they acted in good faith and without gross negligence, within the limits permitted by applicable laws and regulations. In addition, pursuant to the Companies Act and our articles of incorporation, we have entered into agreements with each of our non-executive directors limiting such directors' liability to us arising from neglect of their duties, if they acted in good faith and without gross negligence, to the minimum liability amount permitted by applicable laws and regulations.

**Distribution of Surplus** 

Under our articles of incorporation, the board of directors has the authority to decide to make distributions of surplus without requiring a resolution of the general meeting of shareholders, unless otherwise provided by law. The record dates for year-end and interim dividends are March 31 and September 30 of each year, respectively. We are relieved of our obligation to pay any monetary dividends that remain unclaimed for three years after the date of the commencement of payment.

**Unit Share System** 

Our articles of incorporation provide that 100 shares constitute one unit of shares. Shareholders may not exercise any rights pertaining to shares constituting less than one unit other than certain specific rights stipulated in the Companies Act and our articles of incorporation.

Holders of our common shares are entitled to one voting right for each unit of shares they hold, and shares constituting less than one full unit do not carry voting rights. Under the Companies Act and our articles of incorporation, holders of shares constituting less than one unit may not exercise rights with respect to such shares, other than rights specified in the Companies Act and our articles of incorporation, including rights listed in each item of Article 189, Paragraph 2 of the Companies Act (such as the right to receive dividends, and the right to receive cash or other assets in the case of a consolidation of shares, stock split, share exchange, share transfer, or merger) and the right to receive allotments of offered shares and offered stock acquisition rights in proportion to the number of shares they hold.

Holders of shares constituting less than one unit may require us to purchase such shares in accordance with the Companies Act and our Share Handling Regulations. Our articles of incorporation do not provide holders of shares constituting less than one unit with the right to require us to sell additional shares to them in order to make their holdings constitute one full unit.

For risks relating to the limited rights and limited liquidity of holders of shares constituting less than one unit, see "Item 3. Key Information—D. Risk Factors—Investors holding less than one "unit" of shares of our common stock will have limited rights as shareholders."

**General Meetings of Shareholders** 

Our ordinary general meeting of shareholders is convened in June of each year by our President and Representative Director pursuant to a resolution of the board of directors, unless otherwise provided by law. The record date for determining the shareholders entitled to exercise their rights at the ordinary general meeting of shareholders is March 31 of each year.

Extraordinary general meetings of shareholders may be convened whenever necessary pursuant to a resolution of the board of directors, unless otherwise provided by law. In addition, if it is necessary to determine shareholders or registered share pledgees entitled to exercise rights, we may set a temporary record date by public notice in advance pursuant to a resolution of the board of directors.

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Other than being recorded as a shareholder entitled to exercise voting rights as of the applicable record date and complying with the proxy requirements described below, our articles of incorporation and Share Handling Regulations do not impose any special conditions of admission to general meetings of shareholders

**Voting Rights**

Shareholders have one voting right for each unit of shares held. Unless otherwise provided by law or our articles of incorporation, a resolution of the general meeting of shareholders is adopted by a majority of the voting rights of the shareholders present who are entitled to exercise their voting rights. Resolutions of the general meeting of shareholders requiring a "special resolution" under the Companies Act (such as amendments to the articles of incorporation) require the attendance of shareholders holding one-third or more of the voting rights and must be adopted by two-thirds or more of the voting rights of the shareholders present. The quorum for the election of directors is one-third or more of the voting rights of shareholders entitled to exercise their voting rights. A shareholder may exercise voting rights by proxy only by appointing another shareholder having voting rights in our company. In such case, the shareholder or proxy must submit a document certifying the authority of representation at each general meeting of shareholders.

**Changes in Shareholders' Rights**

Our articles of incorporation may be amended by a special resolution of a general meeting of shareholders. Under the Companies Act and our articles of incorporation, a special resolution generally requires the attendance of shareholders holding one-third or more of the voting rights of shareholders entitled to exercise voting rights and approval by two-thirds or more of the voting rights of the shareholders present. As we have only one class of shares outstanding, no separate class meeting is currently required to change the rights of holders of our common shares. If we were to issue different classes of shares in the future, changes that would prejudice the rights of shareholders of a class may require approval at a class meeting to the extent required by the Companies Act. Our articles of incorporation do not impose any conditions to change the rights of holders of our common shares that are more significant than those required under the Companies Act.

**Liquidation Rights**

In the event of our liquidation, the assets remaining after payment of all debts, liquidation expenses, and taxes will be distributed among holders of our common shares in proportion to the respective numbers of shares held by them.

**Pre-emptive Rights**

Holders of our common shares have no pre-emptive rights under our articles of incorporation. Under the Companies Act, the board of directors may, however, determine that shareholders be given subscription rights in connection with a particular issue of new shares. In this case, such rights must be given on uniform terms to all shareholders as of a specified record date.

**Acquisition of Own Shares**

Our articles of incorporation provide that we may acquire our own shares through market transactions or other methods by a resolution of the board of directors, pursuant to the Companies Act. This provision is intended to allow us to implement a flexible capital policy.

**Shareholder Registry Administrator**

Mizuho Trust & Banking Co., Ltd. is the shareholder registry administrator for our common shares.

The shareholder registry administrator maintains our register of shareholders and handles other business with respect to our shares.

**Limitations on the Rights to Own Securities**

Our articles of incorporation do not impose any limitations on the rights of non-resident or foreign shareholders to hold our common shares or exercise voting rights attached thereto. Under our Share Handling Regulations, however, shareholders resident outside Japan are required to appoint a standing proxy in Japan or provide us with a temporary mailing address in Japan. In addition, non-resident and foreign investors may be subject to certain reporting, prior notification and other requirements under Japanese laws and regulations, as described under "Item 10. Additional Information—D. Exchange Controls".

**Provisions That Could Delay, Defer or Prevent a Change in Control**

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Our articles of incorporation do not contain any provision that would have the effect of delaying, deferring or preventing a change in control of us and that would operate only with respect to a merger, acquisition or corporate restructuring involving us or any of our subsidiaries.

**Ownership Threshold Disclosure**

Our articles of incorporation and Share Handling Regulations do not contain any provision governing an ownership threshold above which shareholder ownership must be disclosed.

**Changes in Capital**

Our articles of incorporation do not impose conditions governing changes in our capital that are more stringent than those required under the Companies Act.

 **C Material contracts**

Other than the material contract described below, there were no material contracts entered into by us for the two years preceding the filing of this Annual Report that were not entered into in the ordinary course of business beyond those described in Item 7 or elsewhere in this Annual Report or filed as exhibits.

**Share Purchase Agreement with T&D Holdings**

On June 4, 2026, we entered into a share purchase agreement with T&D Holdings, Inc. ("T&D Holdings") in connection with our acquisition of 70.2% of the shares of T&D Financial Life Insurance Company ("T&D Financial Life") from T&D Holdings (the "Share Acquisition").

As of June 4, 2026, the estimated acquisition price for the shares of T&D Financial Life was ¥131,985 million, excluding estimated acquisition-related expenses of ¥2,352 million, and the final acquisition price is subject to change. The estimated acquisition-related expenses include advisory fees related to the adoption of IFRS by T&D Financial Life that will be required by the date of the closing of the Share Acquisition. The Share Acquisition is expected to be funded from PayPay's cash on hand.

One Investment Management Ltd ("OneIM"), an asset management company, intends to acquire 14.9% of the shares of T&D Financial Life from T&D Holdings for cash consideration through OneIM Indigo Holdings Ltd ("OneIM Indigo"), an affiliate of OneIM. As of June 4, 2026, there was no agreement, arrangement or understanding between us and OneIM Indigo to jointly exercise voting rights or other rights as shareholders of T&D Financial Life, or to jointly acquire or transfer shares of T&D Financial Life.

The consummation of the Share Acquisition is subject to obtaining required approvals and permits from the relevant authorities, the implementation of an IFRS transition plan at T&D Financial Life, and the satisfaction of other conditions precedent set forth in the share purchase agreement. The closing of the Share Acquisition is scheduled for October 1, 2027, although the timing is subject to change depending on the status of satisfaction of these conditions.

With respect to the 238,400 shares (14.9%) of T&D Financial Life that will continue to be held by T&D Holdings, pursuant to a shareholders' agreement that we plan to enter into with T&D Holdings and OneIM Indigo on the date of the closing of the Share Acquisition, it is expected that we will have a call option exercisable from and after the date of the closing of the Share Acquisition and that T&D Holdings will have a put option exercisable from and after the date that is three years from the date of the closing of the Share Acquisition.

 **D Exchange controls**

**Japanese Foreign Exchange Controls**

***General***

The Foreign Exchange Regulations govern certain aspects, in particular, relating to the acquisition and holding of shares of our common stock by "exchange non-residents" and by "foreign investors" (each as defined below).

"Exchange residents" are defined in the Foreign Exchange Regulations as:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)individuals having domicile or residence within Japan; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)corporations whose principal offices are located within Japan.

"Exchange non-residents" are defined in the Foreign Exchange Regulations as any individuals or corporations other than exchange residents.

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Generally, branches and other offices of non-resident corporations that are located within Japan are regarded as exchange residents. Conversely, branches and other offices of Japanese corporations located outside Japan are regarded as exchange non-residents.

"Foreign investors" are defined in the Foreign Exchange Regulations as:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)individuals who are exchange non-residents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)corporations or other entities that are organized under the laws of foreign countries or whose principal offices are located outside Japan (excluding partnerships falling within the definition (iv) below);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)corporations of which 50% or more of the total voting rights are held, directly or indirectly, by individuals and/or corporations falling within the definition(s) (i) and/or (ii);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)general partnerships under the Civil Code of Japan (Act No. 89 of 1896, as amended) established to invest in corporations, limited partnerships for investment under the Limited Partnership Act for Investment of Japan (Act No. 90 of 1998, as amended), or any other similar partnerships under the laws of foreign countries, where either (a) 50% or more of the total contributions are made by exchange non-residents or certain other foreign investors prescribed by the Foreign Exchange Regulations or (b) a majority of the general partners who are delegated to execute the business of such general partnerships, general partners of such limited partnerships or other similar partners of the other similar partnerships are exchange non-residents or certain other foreign investors prescribed by the Foreign Exchange Regulations; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)corporations or other entities where a majority of either (a) directors or other officers (including those who have the same degree or more control over such corporations or such other entities as directors or other officers) or (b) directors or other officers (including those who have the same degree or more control over such corporations or such other entities as directors or other officers) having the power of representation are individuals who are exchange non-residents.

***Acquisition of Shares***

In general, the acquisition by an exchange non-resident of shares of a Japanese corporation, such as the shares of our common stock, is not subject to any prior filing requirements. However, in the case where such acquisition constitutes an IDI the exchange non-resident may be required to file a prior notification (see "Prior Notification Requirements on Inward Direct Investment in Shares of Non-Listed Corporations" below). Also, in the case where an exchange resident transfers shares of a Japanese corporation, such as the shares of our common stock, for consideration exceeding ¥100 million, to an exchange non-resident, the exchange resident who transfers the shares is required to report the transfer to the Minister of Finance within 20 days after the later of (a) the date of the transfer or (b) the date of payment for the transfer, unless (i) the transfer was made through a bank or financial instruments business operator registered under the FIEA acting as an agent or intermediary or (ii) the transfer constitutes an IDI.

***Prior Notification Requirements on Inward Direct Investment in Shares of Non-Listed Corporations***

If a foreign investor acquires shares of a Japanese corporation that is not listed on any Japanese stock exchange, such as the shares of our common stock, such acquisition constitutes an IDI. In general, any foreign investor intending to make an IDI in a Japanese corporation that is (whether itself or by any of its subsidiaries or certain related corporations in Japan) engaged in certain business sectors designated under the Foreign Exchange Regulations and the relevant public notice (*Shitei-Gyoshu*) (in which our business sectors are currently included), or the Designated Business Sectors, must, except where any of certain exemptions apply, file a prior notification of the acquisition with the Ministers.

If such prior notification is filed, the proposed acquisition may not be consummated until 30 days have passed from the date of the filing, although this period may be shortened if the proposed acquisition is determined not to raise concerns from a perspective of national security or certain other factors. On the other hand, if any concerns are recognized in the proposed acquisition from a perspective of national security or certain other factors, the Ministers may extend such period up to five months to ensure there is time for examination. The Ministers may recommend any modification or abandonment of the proposed acquisition and, if such recommendation is not accepted by the acquiring foreign investor, they may order the modification or abandonment of such acquisition.

Acquisition of one or more shares of our common stock by a foreign investor from other foreign investor is also subject to similar prior notification requirements. Acquisitions of shares by foreign investors by way of stock split are not subject to the prior notification requirements.

***Exemption for Prior Notification Requirements***

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Under the Foreign Exchange Regulations, any foreign investors, excluding disqualified investors such as those with a record of sanctions for violation of the Foreign Exchange and Foreign Trade Act, state-owned enterprises (except those who are accredited by the authorities), and "Type-A investors," (as defined below) (except those who are accredited by the authorities) or Eligible Foreign Investors, will be exempted from the prior notification requirements without any upper limit on the number of shares to be acquired or held, on the condition that they comply with the following exemption conditions, or the Common Exemption Conditions, unless the investment intended to be conducted by them constitutes an IDI in a Japanese corporation engaging, or its subsidiaries or certain related corporations in Japan are engaging, in certain types of the Designated Business Sectors designated under the Foreign Exchange Regulations and the relevant public notice as being a substantial threat to national security (*Core-Gyoshu*) (in which our business sectors are currently included), or the Core Sectors.

Foreign investors falling within either of the following categories are regarded as "Type-A investors":

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)organizations or individuals who have obligations to cooperate with foreign governments, foreign government agencies, foreign local public entities, foreign central banks, or foreign political parties or other political organizations, or collectively, Foreign Governments, in collecting information related to Japan's national security based on agreements with such Foreign Governments or foreign laws and regulations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)organizations controlled by foreign investors falling within the category (i) or by Foreign Governments imposing those obligations on these investors. This control is established through (a) holding 50% or more of the total issued shares or the total voting rights of such organizations, (b) holding class shares that grant the right to veto matters to be resolved at general meetings of shareholders or by the board of directors of such organizations, (c) the appointment of one-third or more of (x) such organizations' directors or other officers or (y) those having the power of representation, or (d) holding the right to direct such organizations regarding their IDIs or their exercise of voting rights in connection with IDIs; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)directors or other officers of organizations falling within the category (i) or (ii).

In general, the "Common Exemption Conditions" are set out in the relevant public notice as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)foreign investors or their related persons are not to become directors of the investee corporation or its certain related corporation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)foreign investors will not propose by themselves or through other shareholders to the general meeting of shareholders certain matters such as the transfer or disposition of the investee corporation's business activities in the Designated Business Sectors; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)foreign investors will not access non-public information about the investee corporation's or its certain related corporation's technology in relation to business activities in the Designated Business Sectors.

However, Eligible Foreign Investors who intend to invest in a Japanese corporation engaging, or a Japanese corporation which subsidiary or certain related corporation is engaging, in the Core Sectors, which is not listed in Japan, such as us, would not be exempted from the prior notification requirements.

***Consent at General Meeting of Shareholders***

In addition to the acquisition of shares mentioned above, if a foreign investor who holds one or more voting rights of a Japanese corporation that engages in the Designated Business Sectors intends to consent, at the general meeting of shareholders, to certain proposals having material influence on the management of such corporation, such as (i) election of such foreign investor or its related persons as directors or audit and supervisory board members of the investee corporation or (ii) transfer or discontinuation of its business activities in the Designated Business Sectors, such consent also constitutes an IDI that generally requires the filing of a prior notification with the Ministers; provided, however, that in the case of proposal (ii), the prior notification is required only where such proposal is made by such foreign investor by itself or through other shareholders. In such cases, the exemptions from the prior notification requirements described in "Exemption for Prior Notification Requirements" above are not available.

***Post-Investment Reports***

Further to the prior notifications, under the Foreign Exchange Regulations, foreign investors conducting IDIs may be required to submit post-investment reports to the Ministers within 45 days after the transaction settlement date, once the IDIs for which prior notifications have been filed are actually made, or even if such IDIs are not subject to the prior notification requirements or are exempted from such requirements.

Acquisitions of shares by foreign investors by way of stock split are not subject to the post-investment report requirements.

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***Dividends and Proceeds from Sales of Shares***

Under the Foreign Exchange Regulations, dividends paid on and the proceeds from sales in Japan of shares of our common stock held by exchange non-residents may generally be converted into any foreign currency and repatriated abroad. However, under the Foreign Exchange Regulations, certain procedures may be required for the transfer of funds out of Japan or such transfer of funds may be prohibited, depending on the location of the recipient, the purpose of such fund transfer and other factors.

***Acquisition of ADSs, Surrender of ADSs***

Regarding the acquisition of ADSs, the Minister of Finance has expressed its view that, provided that it should be judged in accordance with the actual situation on a case-by-case basis, in general, in the case where a Japanese corporation that is not listed on any Japanese stock exchange, such as us, lists depositary receipts issued by a foreign depository bank backed by the shares of such Japanese corporation on any foreign stock exchange, it is considered that, while such a foreign depositary bank needs to submit a prior notification of IDI upon acquiring the shares, non-residents or foreign corporations that acquire such depositary receipts do not need to submit any prior notification of IDI because the foreign depositary bank that will acquire the shares of such Japanese corporation is required to submit a prior notification. However, there is no guarantee that the Minister of Finance will maintain this view in the future. See "Item 3. Key Information—D. Risk Factors—Prior notification under the Foreign Exchange and Foreign Trade Act of Japan may be required in the case of acquisition by foreign investors of our shares."

Foreign investors that intend to surrender the ADSs and thereby acquire the underlying shares of our common stock will be required to submit a prior notification to the Ministers.

The discussion above is not exhaustive of all possible foreign exchange controls considerations that may apply to a particular investor, and potential investors are advised to satisfy themselves as to the overall foreign exchange controls consequences of the acquisition, ownership and disposition of the ADSs, shares of our common stock or voting rights by consulting their own advisors.

**E Taxation**

The following is a general summary of certain Japan and United States federal income tax consequences relevant to an investment in the ADSs and common shares. The discussion is not intended to be, nor should it be construed as, legal or tax advice to any particular prospective purchaser. The discussion is based on laws and relevant interpretations thereof in effect as of the date of this Annual Report, all of which are subject to change or different interpretations, possibly with retroactive effect. The discussion does not address U.S. state or local tax laws, or tax laws of jurisdictions other than Japan and the United States. You should consult your own tax advisors with respect to the consequences of acquisition, ownership and disposition of the ADSs and common shares.

**Japanese Taxation**

The following is a general summary of the principal Japanese tax consequences (limited to national tax) to owners of the ADSs and common shares, who are non-resident individuals of Japan or who are non-Japanese corporations without a permanent establishment in Japan (collectively, "non-resident holders"). The statements below regarding Japanese tax laws are based on the laws and treaties in force and as interpreted by the Japanese tax authorities as of the date of this Annual Report, and are subject to changes in applicable Japanese laws, tax treaties, conventions or agreements, or in the interpretation of them, occurring after that date. This summary is not exhaustive of all possible tax considerations that may apply to a particular investor, and potential investors are advised to satisfy themselves as to the overall tax consequences of the acquisition, ownership and disposition of the ADSs and common shares, including, specifically, the tax consequences under Japanese law, under the laws of the jurisdiction of which they are resident and under any tax treaty, convention or agreement between Japan and their country of residence, by consulting their own tax advisors.

Generally, a non-resident holder will be subject to Japanese income tax collected by way of withholding on dividends (meaning in this section distributions made from our retained earnings for the Companies Act purposes) we pay with respect to the ADSs and common shares and such tax will be withheld prior to payment of dividends. Stock splits generally are not subject to Japanese income or corporation tax.

In the absence of any applicable tax treaty, convention or agreement reducing the maximum rate of Japanese withholding tax or allowing exemption from Japanese withholding tax, the rate of the Japanese withholding tax applicable to dividends paid by Japanese corporations on their shares of stock to non-resident holders is generally 20.42% (or 20% for dividends due and payable on or after January 1, 2038) under Japanese tax law. However, with respect to dividends paid by a Japanese corporation on listed shares (the ADSs are treated as listed shares once they are listed on the Nasdaq as planned; and our common shares are treated as listed shares if they are listed on a stock exchange) to non-resident holders, other than any non-resident holder who is an individual shareholder holding 3% or

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more of the total number of shares issued by the relevant Japanese corporation (to whom the aforementioned withholding tax rate will still apply), the aforementioned withholding tax rate is reduced to (i) 15.315% for dividends due and payable up to and including December 31, 2037 and (ii) 15% for dividends due and payable on or after January 1, 2038. The withholding tax rates described above include the special reconstruction surtax (2.1% multiplied by the original applicable withholding tax rate, i.e., 15% or 20%, as the case may be), which is imposed during the period from and including January 1, 2013 to and including December 31, 2037, to fund the reconstruction from the great earthquake that occurred in Japan in 2011.

If distributions were made from our capital surplus, rather than retained earnings, for the Companies Act purposes, the portion of such distributions in excess of the amount corresponding to a pro rata portion of return of capital as determined under Japanese tax laws would be deemed dividends for Japanese tax purposes, while the rest would be treated as return of capital for Japanese tax purposes. The deemed dividend portion, if any, would generally be subject to the same tax treatment as dividends as described above, and the return of capital portion would generally be treated as proceeds derived from the sale of shares and subject to the same tax treatment as sale of ADSs and common shares as described below. Distributions made in consideration of repurchase by us of our own common shares or in connection with certain reorganization transactions will, in general, be treated substantially in the same manner.

As of the date of this Annual Report, Japan has income tax treaties whereby the withholding tax rate (including the special reconstruction surtax) may be reduced, generally to 15%, for portfolio investors, with, among others, Canada, Denmark, Finland, Germany, Ireland, Italy, Luxembourg, New Zealand, Norway and Singapore, while the income tax treaties with, among others, Australia, Belgium, France, Hong Kong, the Netherlands, Portugal, Sweden, Switzerland, the United Kingdom and the United States generally reduce the withholding tax rate to 10% for portfolio investors and the income tax treaties with, among others, Spain generally reduce the withholding tax rate to 5% for portfolio investors. In addition, under the income tax treaty between Japan and the United States, dividends paid to pension funds which are qualified United States residents eligible to enjoy treaty benefits are exempt from Japanese income taxation by way of withholding or otherwise unless the dividends are derived from the carrying on of a business, directly or indirectly, by the pension funds. Similar treatment is applicable to dividends paid to pension funds under the income tax treaties between Japan and, among others, Belgium, Denmark, the Netherlands, Spain, Switzerland and the United Kingdom. Under Japanese tax law, any reduced maximum rate applicable under a tax treaty shall be available when such maximum rate is below the rate otherwise applicable under the Japanese tax law referred to in the second preceding paragraph with respect to the dividends to be paid by us on the ADSs and common shares.

Non-resident holders who are entitled under an applicable tax treaty to a reduced rate of, or exemption from, Japanese withholding tax on any dividends on common shares, in general, are required to submit, through the withholding agent to the relevant tax authority prior to the payment of dividends, an Application Form for Income Tax Convention regarding Relief from Japanese Income Tax and Special Income Tax for Reconstruction on Dividends together with any required forms and documents. A standing proxy for a non-resident holder may be used in order to submit the application on a non-resident holder's behalf. In this regard, a certain simplified special filing procedure is available for non-resident holders to claim treaty benefits of reduction of or exemption from Japanese withholding tax by submitting a Special Application Form for Income Tax Convention regarding Relief from Japanese Income Tax and Special Income Tax for Reconstruction on Dividends of Listed Stocks together with any required forms and documents. With respect to ADSs, where the depositary needs investigation to identify whether any non-resident holders of ADSs are entitled to claim treaty benefits of exemption from or reduction of Japanese withholding tax, the depositary or its agent is required to submit an application form before payment of dividends so that the withholding will be suspended in connection with such holders for eight months after the record date concerning such payment of dividends. If it is proved that such holders are entitled to claim treaty benefits of exemption from or reduction of Japanese withholding tax within the foregoing eight-month period, the depositary or its agent is required to submit another application form together with certain other documents so that such holder can claim exemption from or reduction of Japanese withholding tax. To claim this reduced rate or exemption, such non-resident holder of ADSs will be required to file a proof of taxpayer status, residence, and beneficial ownership, as applicable, and to provide other information or documents as may be required by the depositary. Non-resident holders who are entitled, under any applicable tax treaty, to a reduced rate of Japanese withholding tax below the rate otherwise applicable under Japanese tax law, or exemption therefrom, as the case may be, but fail to submit the required application in advance may nevertheless be entitled to claim a refund from the relevant Japanese tax authority of withholding taxes withheld in excess of the rate under an applicable tax treaty (if such non-resident holders are entitled to a reduced treaty rate under the applicable tax treaty) or the full amount of tax withheld (if such non-resident holders are entitled to an exemption under the applicable tax treaty), as the case may be, by complying with a certain subsequent filing procedure. We do not assume any responsibility to ensure withholding at the reduced treaty rate, or exemption therefrom, for shareholders who would be eligible under an applicable tax treaty but who do not follow the required procedures as stated above.

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Gains derived from the sale of the ADSs and common shares outside Japan by a non-resident holder that is a portfolio investor will generally not be subject to Japanese income or corporation tax.

Japanese inheritance and gift taxes, at progressive rates, may be payable by an individual who has acquired the ADSs and common shares from another individual as a legatee, heir or donee, even if none of the acquiring individual, the decedent or the donor is a Japanese resident.

**Certain United States Federal Income Tax Considerations to United States Holders**

The following discussion describes certain United States federal income tax consequences of the purchase, ownership and disposition of the ADSs and common shares. This discussion is applicable only to United States Holders (as defined below) (i) who are residents of the United States for purposes of the Convention between the Government of the United States of America and the Government of Japan for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion With Respect to Taxes on Income (the "Treaty"), (ii) whose ADSs or common shares are not, for purposes of the Treaty, effectively connected with a permanent establishment in Japan and (iii) who otherwise qualify for the full benefits of the Treaty. In addition, this discussion deals only with United States Holders that hold the ADSs or common shares as capital assets for United States federal income tax purposes (generally, property held for investment).

As used herein, the term "United States Holder" means a beneficial owner of the ADSs or common shares that is, for United States federal income tax purposes, any of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•an individual who is a citizen or resident of the United States;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•a corporation (or other entity treated as a corporation for United States federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•an estate the income of which is subject to United States federal income taxation regardless of its source; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•a trust if it (1) is subject to the primary supervision of a court within the United States and one or more United States persons have the authority to control all substantial decisions of the trust or (2) has a valid election in effect under applicable United States Treasury regulations to be treated as a United States person.

This discussion is based upon provisions of the Internal Revenue Code of 1986, as amended (the "Code"), and regulations, rulings and judicial decisions thereunder, as well as the Treaty, all as of the date hereof. Those authorities may be changed, perhaps retroactively, so as to result in United States federal income tax consequences different from those summarized below. In addition, this discussion assumes that the deposit agreement, and all other related agreements, will be performed in accordance with their terms.

This summary does not represent a detailed description of the United States federal income tax consequences applicable to you if you are subject to special treatment under the United States federal income tax laws, including if you are:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•a dealer or broker in securities or currencies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•a financial institution;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•a regulated investment company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•a real estate investment trust;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•an insurance company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•a tax-exempt organization;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•a person holding the ADSs or common shares as part of a hedging, integrated or conversion transaction, a constructive sale or a straddle;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•a trader in securities that has elected the mark-to-market method of accounting for your securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•a person liable for alternative minimum tax;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•a person required to accelerate the recognition of any item of gross income with respect to the ADSs or common shares as a result of such income being recognized on an applicable financial statement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•a person who owns or is deemed to own 10% or more of our stock (by vote or value);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•a partnership or other pass-through entity for United States federal income tax purposes; or

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•a person whose "functional currency" is not the U.S. dollar.

If a partnership (or other entity or arrangement treated as a partnership for United States federal income tax purposes) holds the ADSs or common shares, the tax treatment of a partner will generally depend upon the status of the partner and the activities of the partnership. If you are a partnership or a partner of a partnership holding the ADSs or common shares, you should consult your tax advisors.

This discussion does not contain a detailed description of all the United States federal income tax consequences to you in light of your particular circumstances and does not address the Medicare tax on net investment income, United States federal estate and gift taxes or the effects of any state, local or non-United States tax laws.

**If you are considering the purchase of the ADSs or common shares, you should consult your own tax advisors concerning the particular United States federal income tax consequences to you of the purchase, ownership and disposition of the ADSs or common shares, as well as the consequences to you arising under other United States federal tax laws and the laws of any other taxing jurisdiction.**

***ADSs***

If you hold ADSs, for United States federal income tax purposes, you generally will be treated as the owner of the underlying common shares that are represented by such ADSs. Accordingly, deposits or withdrawals of common shares for ADSs will not be subject to United States federal income tax.

***Taxation of Dividends***

Subject to the discussion under "—Passive Foreign Investment Company" below, the gross amount of distributions on the ADSs or common shares (including any amounts withheld on account of Japanese withholding taxes) will be taxable as dividends to the extent paid out of our current or accumulated earnings and profits, as determined under United States federal income tax principles. To the extent that the amount of any distribution exceeds our current and accumulated earnings and profits for a taxable year, the distribution will first be treated as a tax-free return of capital, causing a reduction in your tax basis in the ADSs or common shares, and to the extent the amount of the distribution exceeds your tax basis, the excess will be taxed as capital gain recognized on a sale or exchange (see "—Taxation of a Sale, Exchange or Other Disposition of ADSs or Common Shares" below). We do not, however, expect to determine earnings and profits in accordance with United States federal income tax principles. Therefore, you should expect that a distribution will generally be reported as a dividend.

Any dividends that you receive (including any withheld taxes) will be includable in your gross income as ordinary income on the day actually or constructively received by you, in the case of common shares, or by the depositary, in the case of ADSs. Such dividends will not be eligible for the dividends received deduction generally allowed to corporations under the Code.

Subject to applicable limitations (including a minimum holding period requirement), dividends received by non-corporate United States Holders from a qualified foreign corporation may be treated as "qualified dividend income" that is subject to reduced rates of taxation. A qualified foreign corporation includes a foreign corporation that is eligible for the benefits of a comprehensive income tax treaty with the United States which the United States Treasury Department determines to be satisfactory for these purposes and which includes an exchange of information provision. The United States Treasury Department has determined that the Treaty meets these requirements, and we believe we will be eligible for the benefits of the Treaty. However, dividends received by non-corporate United States Holders will not be treated as "qualified dividend income" that is subject to reduced rates of taxation if we are a PFIC in the taxable year in which such dividends are paid or in the preceding taxable year. You should consult your own tax advisors regarding the application of these rules to your particular circumstances.

The amount of any dividend paid in yen will equal the U.S. dollar value of the yen received calculated by reference to the exchange rate in effect on the date the dividend is actually or constructively received by you, in the case of common shares, or by the depositary, in the case of ADSs, regardless of whether the yen are converted into U.S. dollars. If the yen received as a dividend are converted into U.S. dollars on the date of receipt, you generally will not be required to recognize foreign currency gain or loss in respect of the dividend income. If the yen received as a dividend are not converted into U.S. dollars on the date of receipt, you will have a tax basis in the yen equal to their U.S. dollar value on the date of receipt. Any gain or loss realized on a subsequent conversion or other disposition of the yen will be treated as United States source ordinary income or loss.

The maximum rate of withholding tax on dividends paid to you pursuant to the Treaty is 10%. You will generally be required to properly demonstrate to the Japanese tax authorities your entitlement to the reduced rate of withholding under the Treaty. See "—Japanese Taxation" above for a discussion of the requirements for obtaining a reduced rate under the Treaty. Subject to certain conditions and limitations (including a minimum holding period requirement) and

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the Foreign Tax Credit Regulations (as defined below), Japanese withholding taxes on dividends (at a rate not exceeding the applicable Treaty rate) may be treated as foreign taxes eligible for credit against your United States federal income tax liability. For purposes of calculating the foreign tax credit, dividends paid on the ADSs or common shares will be treated as income from sources outside the United States and will generally constitute passive category income. However, Treasury regulations addressing foreign tax credits (the "Foreign Tax Credit Regulations") impose additional requirements for foreign taxes to be eligible for a foreign tax credit if the relevant taxpayer does not elect to apply the benefits of an applicable income tax treaty, and there can be no assurance that those requirements will be satisfied. The Department of the Treasury and the Internal Revenue Service (the "IRS") are considering proposing amendments to the Foreign Tax Credit Regulations. In addition, recent notices from the IRS provide temporary relief by allowing taxpayers that comply with applicable requirements to apply many aspects of the foreign tax credit regulations as they previously existed (before the release of the current Foreign Tax Credit Regulations) for taxable years ending before the date that a notice or other guidance withdrawing or modifying the temporary relief is issued (or any later date specified in such notice or other guidance). Instead of claiming a foreign tax credit, you may be able to deduct Japanese withholding taxes on dividends in computing your taxable income, subject to generally applicable limitations under United States law (including that you will not be eligible for a deduction for otherwise creditable foreign income taxes paid or accrued in a taxable year if you claim a foreign tax credit for any foreign income taxes paid or accrued in the same taxable year). The rules governing the foreign tax credit and deductions for foreign taxes are complex. You are urged to consult your tax advisors regarding the Foreign Tax Credit Regulations (and the related temporary relief in the IRS notices) and the availability of a foreign tax credit or a deduction under your particular circumstances.

***Passive Foreign Investment Company***

In general, we will be a PFIC for any taxable year in which:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•at least 75% of our gross income is passive income, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•at least 50% of the value (generally determined based on a quarterly average) of our assets is attributable to assets that produce or are held for the production of passive income.

For this purpose, passive income generally includes dividends, interest, royalties and rents (other than certain interest derived in the active conduct of a banking business). In addition, cash and other assets readily convertible into cash are generally considered passive assets. If we own at least 25% (by value) of the stock of another corporation, for purposes of determining whether we are a PFIC, we will be treated as owning our proportionate share of the other corporation's assets and receiving our proportionate share of the other corporation's income.

We do not expect to be a PFIC for our current taxable year or in the foreseeable future. However, our PFIC status is a factual determination that is made annually, and thus may be subject to change due to changes in our income or asset composition or in the value of our assets. Because the value of our goodwill may be determined based on the expected market value of the ADSs from time to time, a decrease in the price of the ADSs may also result in our becoming a PFIC for any taxable year. If we are a PFIC for any taxable year during which you hold the ADSs or common shares, you will be subject to special tax rules discussed below.

If we are a PFIC for any taxable year during which you hold the ADSs or common shares and you do not make a timely mark-to-market election, as described below, you will be subject to special tax rules with respect to any "excess distribution" received and any gain realized from a sale or other disposition, including a pledge, of the ADSs or common shares. Distributions received in a taxable year will be treated as excess distributions to the extent that they are greater than 125% of the average annual distributions received during the shorter of the three preceding taxable years or your holding period for the ADSs or common shares. Under these special tax rules:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the excess distribution or gain will be allocated ratably over your holding period for the ADSs or common shares,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the amount allocated to the current taxable year, and any taxable year prior to the first taxable year in which we were a PFIC, will be treated as ordinary income, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the amount allocated to each other year will be subject to tax at the highest tax rate in effect for that year for individuals or corporations, as applicable, and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year.

Although the determination of whether we are a PFIC is made annually, if we are a PFIC for any taxable year in which you hold the ADSs or common shares, you will generally be subject to the special tax rules described above for that year and for each subsequent year in which you hold the ADSs or common shares (even if we do not qualify as a PFIC in such subsequent years). However, if we cease to be a PFIC, you can avoid the continuing impact of the PFIC rules by making a special election to recognize gain as if your ADSs or common shares had been sold on the

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last day of the last taxable year during which we were a PFIC. You are urged to consult your own tax advisor about this election.

In lieu of being subject to the special tax rules discussed above, you may make a mark-to-market election with respect to your ADSs or common shares provided such ADSs or common shares are treated as "marketable stock." The ADSs or common shares generally will be treated as marketable stock if the ADSs or common shares are regularly traded on a "qualified exchange or other market" (within the meaning of the applicable Treasury regulations). Under current law, the mark-to-market election may be available to holders of ADSs because the ADSs will be listed on Nasdaq which constitutes a qualified exchange, although there can be no assurance that the ADSs will be "regularly traded" for purposes of the mark-to-market election. It should also be noted that it is intended that only the ADSs and not the common shares will be listed on Nasdaq. Consequently, if you are a holder of common shares that are not represented by ADSs, you generally will not be eligible to make a mark-to-market election.

If you make an effective mark-to-market election, for each taxable year that we are a PFIC you will include as ordinary income the excess of the fair market value of your ADSs or common shares at the end of the year over your adjusted tax basis in the ADSs or common shares. You will be entitled to deduct as an ordinary loss in each such year the excess of your adjusted tax basis in the ADSs or common shares over their fair market value at the end of the year, but only to the extent of the net amount previously included in income as a result of the mark-to-market election. Your adjusted tax basis in the ADSs or common shares will be increased by the amount of any income inclusion and decreased by the amount of any deductions under the mark-to-market rules. In addition, upon the sale or other disposition of your ADSs or common shares in a taxable year that we are a PFIC, (i) any gain will be treated as ordinary income and (ii) any loss will be treated as ordinary loss, but only to the extent of the net amount of previously included income as a result of the mark-to-market election, with any excess treated as a capital loss.

If you make a mark-to-market election, it will be effective for the taxable year for which the election is made and all subsequent taxable years unless the ADSs or common shares are no longer regularly traded on a qualified exchange, or the IRS consents to the revocation of the election. However, because a mark-to-market election cannot be made for any lower-tier PFICs that we may own (as discussed below), you may continue to be subject to the general PFIC rules discussed above with respect to your indirect interest in any such lower-tier PFIC. You are urged to consult your tax advisor about the availability of the mark-to-market election, and whether making the election would be advisable in your particular circumstances.

Alternatively, United States persons can sometimes avoid the special tax rules described above by electing to treat a PFIC as a "qualified electing fund" under Section 1295 of the Code. However, this option is not available to you with respect to the ADSs or common shares because we do not intend to comply with the requirements necessary to permit you to make this election.

If we are a PFIC for any taxable year during which you hold the ADSs or common shares and any of our non-United States subsidiaries is also a PFIC, you will be treated as owning a proportionate amount (by value) of the ADSs or common shares of the lower-tier PFIC for purposes of the application of the PFIC rules. You are urged to consult your tax advisors about the application of the PFIC rules to any of our subsidiaries.

You will generally be required to file IRS Form 8621 if you hold the ADSs or common shares in any year in which we are classified as a PFIC. You are urged to consult your tax advisors concerning the United States federal income tax consequences of holding ADSs or common shares if we are considered a PFIC in any taxable year.

***Taxation of a Sale, Exchange or Other Disposition of ADSs or Common Shares***

For United States federal income tax purposes, you will recognize taxable gain or loss on any sale, exchange or other taxable disposition of the ADSs or common shares in an amount equal to the difference between the amount realized for the ADSs or common shares and your adjusted tax basis in the ADSs or common shares, both determined in U.S. dollars. Subject to the discussion under "—Passive Foreign Investment Company" above, such gain or loss will generally be capital gain or loss and will generally be long-term capital gain or loss if you have held the ADSs or common shares for more than one year. Long-term capital gains of non-corporate United States Holders (including individuals) are eligible for reduced rates of taxation. The deductibility of capital losses is subject to limitations. Any gain or loss recognized by you will generally be treated as United States source gain or loss for United States foreign tax credit purposes.

***Information Reporting and Backup Withholding***

In general, information reporting will apply to dividends in respect of the ADSs or common shares and the proceeds from the sale, exchange or other disposition of the ADSs or common shares that are paid to you within the United States (and in certain cases, outside the United States), unless you establish that you are an exempt recipient. A backup withholding tax may apply to such payments if you fail to provide a correct taxpayer identification number and a certification that you are not subject to backup withholding or if you fail to report in full dividend and interest

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income.

Backup withholding is not an additional tax and any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against your United States federal income tax liability, provided that the required information is timely furnished to the IRS.

**The above description is not intended to constitute a complete analysis of all tax consequences relating to the purchase, ownership or disposition of the ADSs or common shares. Each holder should consult such holder's own tax advisors concerning the overall tax consequences to it, including the consequences under laws other than United States federal income tax laws, of an investment in the ADSs or common shares.**

**F Dividends and paying agents**

Not applicable.

**G Statement by experts**

Not applicable.

**H Documents on display**

We are subject to periodic reporting and other informational requirements of the Exchange Act as applicable to foreign private issuers, and are required to file reports and other information with the SEC. Specifically, we are required to file annually an Annual Report on Form 20-F within four months after the end of each fiscal year, which is March 31. All information filed with the SEC can be obtained over the internet at the SEC's website at www.sec.gov. As a foreign private issuer, we are exempt from the rules under the Exchange Act prescribing the furnishing and content of quarterly reports and proxy statements, and officers, directors and principal shareholders are exempt from the short-swing profit recovery provisions contained in Section 16 of the Exchange Act.

We will furnish the depositary of the ADSs with our Annual Reports, which will include a review of operations and annual audited consolidated financial statements prepared in conformity with IFRS, and all notices of shareholders' meetings and other reports and communications that are made generally available to our shareholders. The depositary will make such notices, reports and communications available to holders of ADSs and, upon our request, will mail to all record holders of ADSs the information contained in any notice of a shareholders' meeting received by the depositary from us.

In accordance with Nasdaq Stock Market Rule 5250(d), we will post this Annual Report on Form 20-F on our website at https://about.paypay.ne.jp/en/. In addition, we will provide hard copies of our Annual Report free of charge to shareholders and ADS holders upon request.

**I Subsidiary Information**

Not Applicable.

**J Annual Report to Security Holders**

Not applicable

**Item 11. Quantitative and Qualitative Disclosures About Market Risk**

**Market Risks**

Our consolidated financial statements are prepared in accordance with IFRS as issued by the IASB. Accordingly, the following disclosure is intended to satisfy the objective of Item 11 of Form 20-F and should be read together with Note 36 to our audited consolidated financial statements included elsewhere in this Annual Report. We have selected the sensitivity analysis disclosure alternative for our quantitative market risk disclosures.

We assess market risk exposure separately for market risk sensitive instruments entered into for trading purposes and those entered into for purposes other than trading. We do not hold material market risk sensitive instruments for trading purposes. Therefore, unless otherwise indicated, the market risk disclosures in this Item 11 relate to instruments entered into for purposes other than trading.

In preparing our market risk disclosures, we considered interest rate risk, foreign currency exchange rate risk, commodity price risk, equity price risk and other relevant market price risks. Based on our assessment, our primary market risk exposures are foreign exchange risk and interest rate risk. We did not have material exposure to commodity price risk or derivative commodity instruments. Our exposure to equity price risk and other market price risk, including

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price risk associated with equity instruments, exchange-traded funds and other marketable securities, was not material for purposes of Item 11.

***Foreign Exchange Risk***

We have exposure to foreign exchange risks on transactions denominated in currencies other than the functional currencies. The main foreign currency we use is the U.S. dollar. We enter into forward exchange contracts, foreign exchange futures and other contracts in response to currency exposures resulting from on-balance sheet assets and liabilities denominated in foreign currencies in order to limit the net foreign exchange position by currency to an appropriate level.

For PayPay Bank Corporation, we identify assets and liabilities subject to foreign exchange risk and set a risk limit for the investment amount and the present value fluctuation amount arising from that portfolio, and we manage its compliance with the limit on a daily basis. In addition, we regularly analyze the changes in present value due to exchange rate fluctuations and monitor the impact on assets and liabilities.

Through the risk management procedures described above, our net foreign exchange risk exposure and the effects on profit or loss before tax and shareholders' equity are not material. In assessing the materiality of our foreign exchange risk, we considered our aggregate exposure to foreign currency-denominated assets and liabilities, derivative instruments used to manage such exposure and, to the extent applicable, both transactional currency/functional currency and functional currency/reporting currency exchange rate exposures. Because our net foreign exchange risk exposure after taking into account these risk management activities was not material as of March 31, 2026, we have not presented separate quantitative sensitivity analysis for foreign exchange risk.

***Interest Rate Risk***

We raise capital through interest-bearing loans, including those with floating interest rates, and therefore we are exposed to the risk of an increase in our interest payments resulting from rising interest rates. On the other hand, PayPay Bank Corporation may see an increase in investment income in the event of a rise in interest rates. In order to prevent or reduce any risk tied to interest rate fluctuations, we maintain an appropriate mix of interest-bearing debt with fixed and floating interest rates to hedge the risk of interest rate fluctuations. For floating interest rate debt, we also continuously monitor interest rate fluctuations.

For PayPay Bank Corporation, we identify assets and liabilities subject to interest rate risk management and set a risk limit for the amount of fluctuation in the present value arising from the portfolio, and we manage compliance with the limit on a daily basis. In addition, we regularly analyze the change in present value in response to changes in the shape of the yield curve (flattening and steepening) and monitor the impact on assets and liabilities.

At PayPay Bank Corporation, financial assets exposed to interest rate risk are mainly debt instruments, including bonds and other debt securities measured at amortized cost or at fair value through other comprehensive income, purchased monetary claims and loans, including both general loan assets and interbank short-term loans. Financial liabilities exposed to interest rate risk are mainly deposits from customers. The fluctuation of the fair value of these financial assets and liabilities, given certain fluctuations in interest rates, is used in quantitative analysis as part of the process to manage interest rate risk.

The quantitative sensitivity analysis for interest rate risk disclosed in Note 36 to our audited consolidated financial statements has been prepared using selected hypothetical changes in interest rates that management believes are reasonably possible in the near term, which for this purpose means a period of up to one year from the date of the consolidated statement of financial position. The analysis assumes that the relevant interest-rate-sensitive financial assets and liabilities outstanding as of the end of the fiscal year remained outstanding for the full year, that the hypothetical change in interest rates occurs instantaneously, and that all other variables remain constant.

For financial instruments measured at amortized cost, including certain debt instruments, loans and deposits, changes in market interest rates may affect their fair values but generally do not affect profit before tax or shareholders' equity unless such instruments are sold, impaired or otherwise remeasured. Fair value information for such financial instruments is disclosed in Note 36 to our audited consolidated financial statements.

The year-over-year changes in our quantitative interest rate sensitivities disclosed in Note 36 were primarily attributable to changes in the volume and composition of interest-bearing liabilities, including deposits and borrowings, and interest-rate-sensitive assets, including debt instruments held by PayPay Bank Corporation, as our financial services businesses expanded.

Except as described above and in Note 36 to our audited consolidated financial statements, there were no material changes in our primary market risk exposures or in the manner in which such exposures were managed during the year ended March 31, 2026, and we are not aware of any material changes that are currently expected to affect our primary market risk exposures or risk management practices in future reporting periods.

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For more information on market risks, see Note 36 to our audited consolidated financial statements included elsewhere in this annual report.

**Limitations of Quantitative Market Risk Disclosures**

The sensitivity analyses described above and in Note 36 to our audited consolidated financial statements are hypothetical and should not be considered predictive of actual future results. These analyses do not represent the maximum possible loss that we could incur from changes in market rates or prices.

The analyses are based on market risk sensitive instruments outstanding as of the applicable fiscal year-end and do not reflect changes in the composition of our portfolio after such date, future transactions, changes in business volumes, changes in funding sources, management actions that may be taken to mitigate market risk, or changes in customer behavior. In addition, except as otherwise described, the analyses assume that all other variables remain constant and do not fully reflect correlations among interest rates, foreign exchange rates, market prices, credit spreads, liquidity spreads, or other risk variables. Accordingly, the quantitative market risk information may not fully reflect our net market risk exposure.

There were no material changes in the disclosure alternative, key model characteristics, assumptions or parameters used to provide quantitative information about market risk during the year ended March 31, 2026.

**Credit Risk**

We are exposed to the debtors' credit risk arising from our operating activities. Generally, the credit risk is related to accounts receivable from cardholders, payment service providers and PayPay merchants, loan arrangements, such as housing loans and card loans, to banking customers, and loan commitments for cardholders.

For cardholders' credit risk, we conduct a screening in accordance with internal policy upon entering into an agreement with a cardholder. We also monitor mainly the collection status of each cardholder to manage potential uncollectible amounts. As for the credit card receivables from cardholders, in the event of delinquency, the terms of the contract may be modified for the purpose of facilitating collections, and the original contractual cash flow would change. While most of the credit card receivables are from cardholders based in Japan, we are working to prevent or reduce credit risk through the risk management procedures described above.

For PayPay Bank Corporation customers' credit risk, we have established a credit risk management system in our internal regulations and strive to control credit risk in accordance with our internal credit policy. In addition, we have established regulations for credit review, concentration risk and write-off of bad debts. In order to avoid excessive concentrations of risk, our banking policies and procedures include specific guidelines to focus on maintaining a diversified portfolio by establishing an adequate credit limit. Also, PayPay Bank Corporation is subject to the regulations relating to single party exposure. We use collateral and guarantees to reduce counterparty credit risk and set limits for both individual subsidiaries and the group as a whole. Our portfolio is built around a core of market securities with high creditworthiness and small loans with low concentration risk. Our audit department, which is independent from any department of ours, regularly audits our credit risk management status, checks our credit operations and reports the results of the audits it conducts to our board of directors.

PayPay Securities Corporation holds certain deposits of its customers in segregated trust accounts deposited with trust banks and other financial institutions. These accounts are exposed to the credit risk of the financial institutions in which they are deposited. PayPay Securities Corporation manages this credit risk by keeping the amount of assets exposed to risk from any particular counterparty within a specified amount.

We derecognized financial assets for which the contractual cash flows have been modified and recognized, purchased or originated credit-impaired financial assets, where the change in the discounted present value of the cash flows under the new terms of these financial assets changed by more than 10% from the discounted present value of the remaining cash flows of the original terms. There were no financial assets with modification of contractual cash flows that did not meet such criteria of derecognition as of March 31, 2025 and 2026.

For general credit risks other than those mentioned above, we conduct credit investigations and establish a credit line in order to manage credit risks. We periodically monitor the status of debtors, past dues and outstanding balances in accordance with our internal credit management regulations.

For more information on credit risk, see Note 36 to our audited consolidated financial statements included elsewhere in this Annual Report.

**Liquidity Risk**

Liquidity risk is the risk that we will encounter difficulty in meeting our obligations associated with our financial liabilities that are settled by delivering cash or another financial asset. We are exposed to liquidity risk in funding and use and repayment of cash in relation to our business operations. In order to prevent and reduce liquidity risk, we

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invest, in principle, in highly liquid and low-risk financial instruments. We hold a sufficient amount of cash and cash equivalents, and receivables with maturities of mainly two months so that our liquidity and stability can be ensured.

For PayPay Bank Corporation, in order to prevent excessive reliance on short-term funds in financing (i.e., overnight to one month), we set an upper limit on the amount of short-term financing permitted and monitor compliance with this limit on a daily basis. In addition, we monitor the balance of assets that can be converted into cash in order to secure liquidity in case of an emergency, for example, if there are large withdrawals of customers' deposits. We define such an emergency based on the ratio of deposit outflows to our primary reserves (our BOJ current account deposits and call loans).

PayPay Bank Corporation and PayPay Card Corporation have prepared advance measures to procure liquidity in the event of an emergency. PayPay Bank Corporation finances its funds through deposits from customers and PayPay Card Corporation finances its funds through direct financing such as bank loans, commercial paper and financing through liquidation of receivables.

For more information on liquidity risk, see Note 36 to our audited consolidated financial statements included elsewhere in this Annual Report.

**Item 12. Description of Securities Other than Equity Securities**

**A. Debt Securities**

Not applicable.

**B. Warrants and Rights**

Not applicable.

**C. Other Securities**

Not applicable.

**D. American Depositary Shares**

**Fees, charges and other payments relating to ADSs**

As a holder of our ADSs, you will be required to pay The Bank of New York Mellon, as depositary for the ADRs, or the Depositary, either directly or indirectly, the following fees or charges. The Depositary may collect any of its fees by deduction from any cash distribution payable, or by selling a portion of any securities to be distributed, to Owners that are obligated to pay those fees.

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| | |
|:---|:---|
| &nbsp;&nbsp;**ADS holders must pay:** | &nbsp;&nbsp;**For:** |
| &nbsp;&nbsp;$10.00 or less per 100 ADSs, or portion thereof | &nbsp;&nbsp;Each issuance or delivery of ADSs, including as a result of a stock dividend, stock split or other distribution |
| &nbsp;&nbsp;$10.00 or less per 100 ADSs, or portion thereof | &nbsp;&nbsp;Each cancellation or surrender of ADSs, including for withdrawal of deposited securities or termination of the deposit agreement |
| &nbsp;&nbsp;$0.10 or less per ADS | &nbsp;&nbsp;Any cash distribution |
| &nbsp;&nbsp;$0.10 or less per ADS per calendar year | &nbsp;&nbsp;Depositary services |
| &nbsp;&nbsp;A fee equivalent to the fee that would be payable if securities distributed to ADS holders had been Shares and those Shares had been deposited for issuance of ADSs | &nbsp;&nbsp;Distribution of securities or rights distributed to holders of deposited securities |
| &nbsp;&nbsp;Registration fees | &nbsp;&nbsp;Transfer and registration of shares on the share register upon deposit or withdrawal of shares |
| &nbsp;&nbsp;Expenses of The Bank of New York Mellon | &nbsp;&nbsp;Conversion of foreign currency to U.S. dollars, as well as cable, including SWIFT, and facsimile transmission expenses |
| &nbsp;&nbsp;Taxes and other governmental charges  | &nbsp;&nbsp;As necessary |

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that The Bank of New York Mellon or Mizuho Bank, Ltd., as custodian, must pay on any ADS or deposited securities underlying an ADS <br> Any other charges payable by the Depositary, the Custodian or their agents Servicing of shares or other deposited securities

**Fees Waived or Paid by the Depositary**

The Depositary has agreed to waive or pay certain standard out-of-pocket establishment, administrative, maintenance and other expenses for providing services to the registered holders of our ADSs, which include expenses relating to the delivery of annual reports and other reports, dividend fund remittances, registered shareholder account maintenance, registered shareholder correspondence assistance, stationery, postage and photocopying.

The Depositary has also agreed to reimburse or otherwise pay us for certain expenses related to the establishment, administration and maintenance of the ADS program, including legal fees and other program-related expenses. There is a limit on the amount of payments the Depositary will make to us based and conditioned on the terms of our agreement with the Depositary, including the amount of issuance fees and depositary service fees collected by the Depositary. For the fiscal year ended March 31, 2026, the Depositary reimbursed $0 of such standard out-of-pocket expenses.

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**Part II**

**Item 13. Defaults, Dividend Arrearages and Delinquencies**

None.

**Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds**

**Material Modifications to the Rights of Security Holders**

There were no material modifications to the rights of holders of our registered securities during the fiscal year

**Use of Proceeds**

The following "Use of Proceeds" information relates to the registration statement on Form F-1, as amended, for our initial public offering (the "IPO") (File Number 333-293410), which was declared effective by the SEC on March 11, 2026.

Our IPO closed in March 2026, and the underwriters exercised their option to purchase additional ADSs from us at the initial public offering price in the same month. Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, Mizuho Securities USA LLC and Morgan Stanley & Co. LLC (in alphabetical order) acted as the representatives of the underwriters for the IPO. A total of 63,235,295 ADSs were offered in the IPO, including 23,932,960 ADSs by the selling shareholder, SVF II Piranha (DE) LLC, an investment fund ultimately controlled by SoftBank Group Corp., at a price to the public of $16 per ADS. Our IPO included a public offering without listing in Japan of the ADSs (the "POWL"). Approximately 8,653,079 ADSs were allocated to the POWL. All of the ADSs offered in the POWL were offered by Mizuho Securities Co., Ltd. and PayPay Securities Corporation, acting as agent and sub-agent, respectively.

PayPay raised approximately JPY94.6 billion ($603 million) in net proceeds from the IPO, after deducting underwriting commissions and the offering expenses payable by PayPay. None of the transaction expenses included payments to directors or officers of our company or their associates, persons owning more than 10% or more of our equity securities or our affiliates.

For the period from March 11, 2026, the date that the registration statement was declared effective by the SEC, to March 31, 2026, the net proceeds received from our IPO were used for general corporate purposes, including working capital, sales and marketing activities, product development, general and administrative expenses, and capital expenditures. None of the net proceeds we received from the IPO were paid, directly or indirectly, to any of our directors or officers or their associates, persons owning 10% or more of our equity securities or our affiliates.

**Item 15. Controls and Procedures**

**Disclosure Controls and Procedures**

Our management, with the participation of the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2026.

Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of March 31, 2026, to provide reasonable assurance that information required to be disclosed by us in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. This conclusion was based on the identification of a new material weakness during the fiscal year ended March 31, 2026. The material weakness is that we did not adequately design and maintain the effectiveness of the controls to ensure that sufficient instructions are provided by the parent company, PayPay Corporation, and that necessary information is accurately reported by subsidiaries for the preparation of the financial statement disclosures.

To address this newly identified material weakness, we plan to reassess and enhance the policies and procedures in order to prepare the consolidated financial statements, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Organizing regular Group-wide training, especially training related to subsidiary-specific disclosures.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Enhancing the guidelines that secure the accuracy and completeness of certain information used in the financial statement disclosures.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)Improving period end financial reporting reviews over the disclosures included in the consolidated financial statements.

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Our management, including our Chief Executive Officer and Chief Financial Officer, recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

**Management's Annual Report on Internal Control Over Financial Reporting**

This Annual Report does not include a report of management's assessment regarding internal control over financial reporting due to a transition period established by rules of the SEC for newly public companies.

**Attestation Report of the Registered Public Accounting Firm**

This Annual Report does not include an attestation report of our company's registered public accounting firm due to a transition period established by rules of the SEC for newly public companies.

**Changes in Internal Control Over Financial Reporting**

As previously disclosed in our registration statement on Form F-1, while preparing our consolidated financial statements for the year ended March 31, 2025, we identified material weaknesses in our internal control over financial reporting as disclosed in our registration statement on Form F-1, which related to (1) the control that secures the accuracy and completeness of certain information used for financial reporting processes at PayPay Bank Corporation and PayPay Securities Corporation; (2) the control over assessment in capitalization of intangible assets arising from software development at PayPay Bank Corporation; (3) the controls that evaluate the effectiveness of controls maintained by certain service organizations we relied on in our internal controls over the financial reporting processes at PayPay Bank Corporation; and (4) the control over privileged-level access, which manages configuration and security administrations within the IT system at PayPay Securities Corporation.

To address the material weaknesses identified above, we took the following actions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)For the material weakness relating to the data accuracy in financial reporting, we enhanced the related guidelines and controls designed to ensure the accuracy and completeness of information used in financial reporting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)For the material weakness relating to the software capitalization, while we had already designed and implemented the enhanced controls over the review and assessment of software development costs for capitalization purposes as of March 31, 2025, we operated such controls throughout the fiscal year as designed..

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)For the material weakness relating to the oversight of third-party service organizations, we changed a third-party service organization which can provide a SOC 1 report, and also newly implemented compensating controls where a SOC 1 report is unavailable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)For the material weakness relating to privileged-level access within our IT systems, we enhanced controls over privileged-level access, including controls relating to configuration management and security administration.

Management believes that the previously identified material weaknesses have been remediated as of March 31, 2026, based on the remediation efforts undertaken and the operation of the enhanced controls during the fiscal year.

Other than as described above, there were no changes in our internal control over financial reporting that occurred during the period covered by this annual report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

For risks relating to our internal control over financial reporting, see "Item 3. Key Information—D. Risk Factors— We identified material weaknesses in our internal control over financial reporting and may identify additional material weaknesses in the future or otherwise fail to maintain proper and effective internal control over financial reporting. If we fail to establish and maintain proper internal control over financial reporting, our ability to produce accurate financial statements or comply with applicable regulations could be impaired. As a result, shareholders could lose confidence in our financial reporting, which could result in litigation or regulatory enforcement actions and would harm our business and the trading price of the ADSs".

**Item 16A. Audit committee financial expert**

The Company, a foreign private issuer organized under the Companies Act of Japan as a company with an Audit and Supervisory Committee, does not have a separately constituted U.S.-style audit committee. The Audit and

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Supervisory Committee serves as the Company's audit committee for purposes of Item 16A of Form 20-F, Rule 10A-3 under the Exchange Act and applicable Nasdaq listing standards, including Nasdaq Rule 5605(c)(3).

The Company's board of directors has determined that Hiroto Kaneko, a member of the Audit and Supervisory Committee, qualifies as an "audit committee financial expert" as defined in Item 16A of Form 20-F. Mr. Kaneko satisfies the applicable audit committee independence criteria under the Nasdaq listing standards, including Rule 10A-3(b)(1) under the Exchange Act, and is independent for purposes of Item 16A of Form 20-F.

**Item 16B. Code of Ethics**

We have adopted a Code of Ethics & Business Conduct (the "Code") applicable to all directors, employees and officers (including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar function). The Code is available on our website at https://about.paypay.ne.jp/en/. We expect that any amendments to the Code, or any waivers of its requirements, will be disclosed on our website to the extent required by applicable SEC and Nasdaq rules. The Code is designed to deter wrongdoing and to promote, among other things, honest and ethical conduct, full, fair, accurate, timely, and understandable disclosure in reports and documents that we file with or submit to the SEC, compliance with applicable laws, internal reporting of violations of the Code and accountability to the Code.

**Item 16C. Principal Accountant Fees and Services**

Deloitte Touche Tohmatsu LLC has served as PayPay Corporation's independent registered public accounting firm for each of the fiscal years in the three-year period ended March 31, 2026, for which audited financial statements appear in this Annual Report.

The following table presents the aggregate fees for professional services and other services rendered by Deloitte Touche Tohmatsu LLC and the various member firms of Deloitte Touche Tohmatsu Limited to PayPay in the fiscal years ended March 31, 2025 and 2026:

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| | | |
|:---|:---|:---|
|  |  | *(In millions of yen)* |
|  | **For the year ended** | **For the year ended** |
|  | **March 31, 2025** | **March 31, 2026** |
| Audit Fees | 2067 | 1741 |
| Audit-Related Fees |  | 214 |
| Tax Fees | 16 | 6 |
| All Other Fees | 18 | 10 |
| Total | 2101 | 1971 |

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"Audit Fees" means fees for audit services, which are professional services provided by independent auditors of our annual financial statements or for services that are normally provided by independent auditors with respect to any submission required under applicable laws and regulations.

"Audit-Relate Fees" means fees for audit-related services, which are assurance services provided by independent auditors that are reasonably related to the carrying out of auditing or reviewing of our financial reports and other related services. This category includes fees for agreed-upon or expanded audit procedures related to accounting and/or other records.

**Pre-approval policies and procedures of the Audit and Supervisory Committee**

Under applicable SEC rules, our Audit and Supervisory Committee must pre-approve audit services, audit-related services, tax services and other services to be provided by the principal accountant to ensure that the independence of the principal accountant under such rules is not impaired as a result of the provision of any of these services.

While, as a general rule, specific pre-approval must be obtained for these services to be provided, our Audit and Supervisory Committee has adopted pre-approval policies and procedures which requires pre-approval of all audit and non-audit services that may be provided. Our Audit and Supervisory Committee reviews the list of services on a regular basis, and is informed of each service that is actually provided.

All services to be provided to us by the principal accountant and its affiliates must be specifically pre-approved by our Audit and Supervisory Committee.

None of the services described above in this Item 16C. were waived from the pre-approval requirements pursuant to Rule 2-01 (c)(7)(i)(C) of Regulation S-X.

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**Item 16D. Exemptions from the Listing Standards for Audit Committees**

Not applicable.

**Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers**

We did not repurchase any of our equity securities during the year.

**Item 16F. Change in Registrant's Certifying Accountant**

Not applicable.

**Item 16G. Corporate Governance** 

As a foreign private issuer whose securities are listed on The Nasdaq Stock Market LLC, we are permitted under Nasdaq Rule 5615(a)(3) to follow Japanese law and corporate practice in lieu of certain corporate governance requirements otherwise applicable to U.S. domestic companies listed on Nasdaq, subject to specified exceptions. We follow Japanese law and corporate practice in lieu of Nasdaq Rules 5605(b)(1), 5605(d)(1), 5605(d)(2), 5605(e)(1), 5605(e)(2), 5620(c), 5250(b)(3) and 5250(d). The significant ways in which our corporate governance practices differ from those followed by U.S. domestic companies under the Nasdaq listing standards are summarized below. We comply with certain Nasdaq requirements that remain applicable to foreign private issuers, including Nasdaq Rules 5625 and 5640, the requirement to have an audit committee or similar body that satisfies Nasdaq Rule 5605(c)(3), and the requirement that the members of such committee satisfy the independence requirements of Rule 10A-3 under the Exchange Act.

**Majority Independent Board**

Nasdaq Rule 5605(b)(1) requires a majority of a listed company's board of directors to be independent directors. Japanese law and corporate practice do not require us to have a majority-independent board. As of the date of this Annual Report, our board of directors consisted of nine directors, of whom Yasuyoshi Karasawa, Paul Yonamine, Hiroko Kono and Hiroto Kaneko have been determined by our board of directors to be independent under Nasdaq Rule 5605(a)(2). Accordingly, we follow Japanese law and corporate practice in lieu of Nasdaq Rule 5605(b)(1). Our independent directors regularly meet in executive sessions at which only independent directors are present.

**Compensation Committee**

Nasdaq Rules 5605(d)(1) and 5605(d)(2) require a listed company to have a formal written compensation committee charter and a compensation committee composed of at least two independent directors. We have voluntarily established a Compensation Committee, which is an advisory body, does not have decision-making authority over compensation, and is not composed solely of independent directors. We have not adopted a compensation committee charter that satisfies Nasdaq Rule 5605(d)(1).

Under the Companies Act of Japan and our Articles of Incorporation, shareholders determine the maximum aggregate annual compensation for our directors who are not Audit and Supervisory Committee members and for our directors who are Audit and Supervisory Committee members. Subject to such shareholder-approved limits, our board of directors delegates to our Representative Director the authority to determine, in consultation with the Compensation Committee, the specific amount of compensation for each director who is not an Audit and Supervisory Committee member. The specific amount of compensation for each director who is an Audit and Supervisory Committee member is determined through consultation among the directors who are Audit and Supervisory Committee members within the shareholder-approved maximum aggregate amount applicable to such directors.

Because Japanese law and corporate practice do not require an independent compensation committee, and director compensation is governed by the shareholder-approved compensation limits and Japanese-law process described above, we follow Japanese law and corporate practice in lieu of Nasdaq Rules 5605(d)(1) and 5605(d)(2).

**Director Nominations**

Nasdaq Rule 5605(e) requires director nominees to be selected or recommended either by independent directors constituting a majority of the board's independent directors or by a nominations committee composed solely of independent directors, and requires a formal written charter or board resolution addressing the nominations process. Japanese law and corporate practice do not impose these requirements. We have voluntarily

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established a Nominating Committee, which is an advisory body and is not composed solely of independent directors. Our board of directors is responsible for the nomination process for director candidates, in consultation with the Nominating Committee, and we have not adopted a formal written charter or board resolution addressing the nominations process that satisfies Nasdaq Rule 5605(e)(2). Accordingly, we follow Japanese law and corporate practice in lieu of Nasdaq Rules 5605(e)(1) and 5605(e)(2).

**Shareholder Meeting Quorum**

Nasdaq Rule 5620(c) requires that the quorum for any meeting of holders of common stock be not less than 33 1/3% of the outstanding shares of a company's common voting stock. Under the Companies Act of Japan and our Articles of Incorporation, there is no quorum requirement for ordinary resolutions at a general meeting of shareholders, except as otherwise provided by the Companies Act of Japan or our Articles of Incorporation. A quorum of not less than one-third of the total number of voting rights is required for the election of directors and certain other matters. Accordingly, we follow Japanese law and corporate practice in lieu of Nasdaq Rule 5620(c).

**Third-Party Director and Nominee Compensation Disclosure**

Nasdaq Rule 5250(b)(3) requires a listed company to disclose the material terms of certain compensation or other payment arrangements between a director or nominee for director and any person or entity other than the company in connection with such person's candidacy or service as a director. Japanese law and corporate practice do not require the same disclosure in the manner prescribed by Nasdaq Rule 5250(b)(3). Accordingly, we follow Japanese law and corporate practice in lieu of Nasdaq Rule 5250(b)(3), and we disclose such arrangements to the extent required under applicable Japanese law, SEC rules applicable to foreign private issuers and our internal policies.

**Distribution of Annual and Interim Reports**

Nasdaq Rule 5250(d) requires a listed company to distribute or otherwise make available annual and interim reports to shareholders in the manner specified by Nasdaq. Japanese law and corporate practice do not require us to distribute or make available annual and interim reports to shareholders in the same manner as Nasdaq Rule 5250(d). We make annual and interim financial information available in accordance with applicable Japanese law and SEC reporting requirements, including through reports filed with or furnished to the SEC and, as appropriate, through our investor relations website. Accordingly, we follow Japanese law and corporate practice in lieu of Nasdaq Rule 5250(d). This reliance does not affect our obligation to file or furnish reports with the SEC or our obligation under Nasdaq Rule 5250(c)(2) to submit interim financial information on Form 6-K to the extent applicable.

**Item 16H. Mine Safety Disclosure** 

Not applicable.

**Item 16I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections**

Not applicable.

**Item 16J. Insider trading policies**

We have adopted an Insider Trading Policy governing the purchase, sale, and other dispositions of our securities by directors, senior management, and employees. A copy of the Insider Trading Policy is attached as an exhibit to this Annual Report.

**Item 16K. Cybersecurity**

**Risk Management and Strategy**

The Company recognizes the importance of safeguarding the security of its information systems, networks, and other technology assets. The Company has established measures and processes for assessing, identifying, and managing material risks arising from cybersecurity threats, and these measures and processes operate within the framework of the Company's overall risk management. These processes are continuously reviewed and improved in accordance with the Company's business operations and evolving risk environment. The Company maintains internal cybersecurity capabilities, including a Computer Security Incident Response Team (CSIRT), a Security Operations Center (SOC), red team functions, and product security functions. These teams are responsible for incident response, continuous monitoring and alert management, proactive security testing, and product-related security, respectively. The Company conducts ongoing risk assessments through continuous vulnerability assessments and annual threat-led penetration testing (TLPT). In addition, the Company continuously utilizes threat intelligence and conducts post-incident reviews following significant incidents to strengthen its cybersecurity posture. Identified risks are prioritized, and where prioritization is not clear, decisions are escalated

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to the Chief Information Security Officer (CISO). The Company monitors its systems using tools such as Security Information and Event Management (SIEM) and Endpoint Detection and Response (EDR) solutions. Initial analysis of alerts is partially automated, including through the use of AI-based processes, with further analysis conducted by internal teams. While the Company primarily manages its cybersecurity operations in-house, it engages third-party service providers for limited operational support, including certain 24/7/365 SOC monitoring activities. The Company does not materially rely on external assessors, consultants, or auditors for its core cybersecurity risk management processes, but may engage external specialists with relevant expertise as necessary. Risks associated with such third parties are appropriately managed through contractual controls, due diligence, and ongoing oversight. The Company maintains company-wide cybersecurity policies and provides ongoing security training to its employees.

As of the date of this report, the Company has not identified any cybersecurity incidents that have materially affected, or are reasonably likely to materially affect, its business strategy, results of operations, or financial condition. However, cybersecurity threats continue to evolve, and such threats may affect the Company in the future. For additional information regarding cybersecurity-related risks, see "Item 3.D. Risk Factors."

**Governance**

The board of directors oversees the Company's cybersecurity risks as part of its overall risk oversight responsibilities. The Company's Audit and Supervisory Committee members and independent directors provide independent oversight and supervision of the Company's risk management framework, including cybersecurity-related risks. The Company reports cybersecurity matters to the board of directors through its Risk and Compliance Committee, which is responsible for reviewing and reporting on risk-related matters. Written reports are provided on a monthly basis, and oral briefings are conducted on a quarterly basis. Management is responsible for assessing and managing the Company's cybersecurity risks. The Company has designated a Chief Information Security Officer (CISO), who has ultimate responsibility for cybersecurity-related decision-making. In the event of a material cybersecurity incident, the CISO is responsible for promptly notifying the board of directors. The CISO has relevant experience and expertise in cybersecurity, information security risk management, and incident response. In addition, the CISO has a background in system development and possesses deep knowledge of system architecture and development processes, and leads the development and operation of the Company's cybersecurity framework. The CISO regularly reports cybersecurity risks, incidents, and response activities to the Risk and Compliance Committee, the Audit and Supervisory Committee, and the board of directors in accordance with the Company's governance and reporting processes. Operational responsibility for cybersecurity activities, including prevention, detection, response, and remediation, is carried out by the Company's internal security teams under the direction of the CISO. The Company also maintains a Risk and Compliance Committee, which meets on a monthly basis to review risk matters, including cybersecurity-related risks.

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**Part III**

**Item 17. Financial Statements**

See "Item 18. Financial Statements"

**Item 18. Financial Statements**

The audited Consolidated Financial Statements as required under Item 18 are attached hereto starting on page F-1 of this Annual Reports.

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**Item 19. Exhibits**

**EXHIBIT INDEX**

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| | |
|:---|:---|
| **Exhibit<br>No.** | **Description of Exhibit** |
| 1.1 | [<u>Articles of Incorporation of the Registrant (English translation)</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex31.htm) (incorporated by reference to Exhibit 3.2 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 1.2 | [<u>Share Handling Regulations of the Registrant (English translation)</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex34.htm) (incorporated by reference to Exhibit 3.4 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 1.3 | [<u>Regulations of Board of Directors of the Registrant (English translation)</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex36.htm) (incorporated by reference to Exhibit 3.6 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 2.1 | [<u>Deposit Agreement among the Registrant, The Bank of New York Mellon, as depositary, and the holders and beneficial owners of ADSs issued thereunder</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526103096/d105772dex42.htm) (incorporated by reference to Exhibit 4.2 of the registration statement on Form S-8 (file no. 333-294226) filed with the SEC on March 12, 2026) |
| 2.2 | Form of American Depositary Receipt evidencing American Depositary Shares (included in Exhibit 2.1)  |
| 2.3\* | [<u>Description of Securities</u>](payp-ex2_3.htm) |
| 4.1 | [<u>Novation Agreement among PayPay Card Corporation, Yahoo Japan Corporation and Visa Worldwide Pte Limited, dated September 30, 2022</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex101.htm) (incorporated by reference to Exhibit 10.1 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026)  |
| 4.2† | [<u>English translation of Share Purchase Agreement between PayPay Corporation and Z Financial Corporation, dated December 17, 2024</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex102.htm) (incorporated by reference to Exhibit 10.2 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.3† | [<u>English translation of Share Purchase Agreement between PayPay Corporation and SoftBank Corp., dated February 10, 2025</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex103.htm) (incorporated by reference to Exhibit 10.3 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.4+ | [<u>English translation of Management Agreement between PayPay Corporation and B Holdings Corporation, dated June 16, 2023</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex104.htm) (incorporated by reference to Exhibit 10.4 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.5 | [<u>English translation of Basic Agreement (Sales Promotion Measures, Advertising, Earn and Use of Incentives) between PayPay Corporation and SoftBank Corp., dated September 16, 2021</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex105.htm) (incorporated by reference to Exhibit 10.5 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.6 | [<u>English translation of Memorandum on Amendment of Master Agreement (Sales Promotion Measures, Advertising, Earn and Use of Incentives) between PayPay Corporation and SoftBank Corp., dated May 9, 2022</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex106.htm) (incorporated by reference to Exhibit 10.6 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.7 | [<u>English translation of Memorandum on Amendment of Master Agreement (Sales Promotion Measures, Advertising, Earn and Use of Incentives) between PayPay Corporation and SoftBank Corp., dated September 15, 2022</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex107.htm) (incorporated by reference to Exhibit 10.7 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.8 | [<u>English translation of Memorandum on Amendment of Master Agreement (Sales Promotion Measures, Advertising, Earn and Use of Incentives) between PayPay Corporation and SoftBank Corp., dated May 23, 2022</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex108.htm) (incorporated by reference to Exhibit 10.8 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |

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|:---|:---|
| 4.9 | [<u>English translation of Memorandum on Amendment of Master Agreement (Sales Promotion Measures, Advertising, Earn and Use of Incentives) between PayPay Corporation and SoftBank Corp., dated September 22, 2023</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex109.htm) (incorporated by reference to Exhibit 10.9 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.10 | [<u>English translation of Memorandum on Amendment of Master Agreement (Sales Promotion Measures, Advertising, Earn and Use of Incentives) between PayPay Corporation and SoftBank Corp., dated March 5, 2024</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1010.htm) (incorporated by reference to Exhibit 10.10 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.11 | [<u>English translation of Memorandum on Amendment of Master Agreement (Sales Promotion Measures, Advertising, Earn and Use of Incentives) between PayPay Corporation and SoftBank Corp., dated March 11, 2025</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1011.htm) (incorporated by reference to Exhibit 10.11 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.12 | [<u>English translation of Service Outsourcing Agreement for Issuance of PayPay Bonus (currently PayPay Points) between Yahoo Japan Corporation (currently LY Corporation) and PayPay Corporation, dated August 21, 2019</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1012.htm) (incorporated by reference to Exhibit 10.12 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.13 | [<u>English translation of Basic Agreement for Provision of "Pay-Toku" Fee Plan between PayPay Corporation and SoftBank Corp., dated September 5, 2023</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1013.htm) (incorporated by reference to Exhibit 10.13 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.14 | [<u>English translation of Service Outsourcing Agreement for Issuance of PayPay Money Lite and PayPay Points between SoftBank Corp. and PayPay Corporation, dated July 31, 2019</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1014.htm) (incorporated by reference to Exhibit 10.14 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.15 | [<u>English translation of Business Alliance Agreement for PayCAS between PayPay Corporation, SB C&S Corp. and SB Payment Service Corporation, dated August 1, 2024</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1015.htm) (incorporated by reference to Exhibit 10.15 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.16 | [<u>English translation of Business Outsourcing Agreement between PayPay Corporation and PayPay SC Corporation, dated August 1, 2024</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1016.htm) (incorporated by reference to Exhibit 10.16 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.17† | [<u>English translation of General Agency Agreement between PayPay Corporation and SB Payment Service Corporation, dated December 13, 2019</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1017.htm) (incorporated by reference to Exhibit 10.17 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.18† | [<u>English translation of Sales Alliance and Partner Agreement between PayPay Corporation and SB Payment Service Corporation, dated December 3, 2018</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1018.htm) (incorporated by reference to Exhibit 10.18 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.19 | [<u>English translation of Memorandum on PayPay Merchant Terms for Mini-apps between PayPay Corporation and PayPay Insurance Corporation, dated December 1, 2021</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1019.htm) (incorporated by reference to Exhibit 10.19 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.20† | [<u>English translation of Basic Loan Agreement between PayPay Card Corporation (then YJ Card Corporation) and Z Holdings Corporation (then Yahoo Japan Corporation), dated February 15, 2018</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1020.htm) (incorporated by reference to Exhibit 10.20 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026)  |
| 4.21 | [<u>English translation of Loan Drawdown Application between and Yahoo Japan Corporation (currently LY Corporation) and YJ Card Corporation (currently PayPay Card Corporation), dated April 8, 2019</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1021.htm) (incorporated by reference to Exhibit 10.21 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.22† | [<u>English translation of Basic Loan Agreement between PayPay Card Corporation (then YJ Card Corporation) to Z Holdings Corporation, dated December 18, 2019</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1022.htm) (incorporated by reference to Exhibit 10.22 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |

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| | |
|:---|:---|
| 4.23 | [<u>English translation of Loan Drawdown Application between Z Holdings Corporation (currently LY Corporation) and YJ Card Corporation (currently PayPay Card Corporation)</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1023.htm) (incorporated by reference to Exhibit 10.23 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.24 | [<u>English translation of Basic Loan Agreement between LY Corporation and PayPay Card Corporation, dated December 6, 2023</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1024.htm) (incorporated by reference to Exhibit 10.24 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.25 | [<u>English translation of Basic Loan Agreement between LY Corporation and PayPay Card Corporation, dated February 29, 2024</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1025.htm) (incorporated by reference to Exhibit 10.25 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.26 | [<u>English translation of Memorandum of Understanding between LY Corporation and PayPay Card Corporation, dated December 24, 2024</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1026.htm) (incorporated by reference to Exhibit 10.26 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.27 | [<u>English translation of Basic Contract of Secondment between SoftBank Group Corp. and PayPay Corporation, dated March 23, 2022</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1027.htm) (incorporated by reference to Exhibit 10.27 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.28† | [<u>English translation of Basic Contract of Secondment between Z Holdings Corporation (currently LY Corporation) and PayPay Corporation, dated May 1, 2022</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1028.htm) (incorporated by reference to Exhibit 10.28 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.29 | [<u>English translation of Basic Contract of Secondment between SoftBank Corp. and PayPay Corporation, dated July 1, 2018</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1029.htm) (incorporated by reference to Exhibit 10.29 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.30† | [<u>English translation of Monetary Deposit for Consumption Agreement between Z Holdings Corporation (currently LY Corporation) and PayPay Card Corporation, dated October 2021</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1030.htm) (incorporated by reference to Exhibit 10.30 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.31 | [<u>English translation of Trademark Transfer Agreement between Z Holdings Corporation (currently LY Corporation) and PayPay Corporation, dated August 31, 2022</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1031.htm) (incorporated by reference to Exhibit 10.31 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.32 | [<u>English translation of Trademark License Agreement between PayPay Corporation and Z Holdings Corporation (currently LY Corporation), dated August 31, 2022</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1032.htm) (incorporated by reference to Exhibit 10.32 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.33† | [<u>English translation of Basic Loan Agreement between Yahoo Japan Corporation and YJ Card Corporation (currently PayPay Card Corporation), dated April 1, 2015</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1033.htm) (incorporated by reference to Exhibit 10.33 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.34† | [<u>English translation of Memorandum on Contract Amendment between Z Holdings Corporation (then Yahoo Japan Corporation and currently LY Corporation) and YJ Card Corporation (currently PayPay Card Corporation), dated December 22, 2020</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1034.htm) (incorporated by reference to Exhibit 10.34 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.35 | [<u>English translation of Memorandum between Z Holdings Corporation (currently LY Corporation) and PayPay Card Corporation, dated October 31, 2022</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1035.htm) (incorporated by reference to Exhibit 10.35 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.36 | [<u>English translation of PayPay Money General Agency Agreement between PayPay Corporation and Yahoo Japan Corporation (currently LY Corporation), dated January 9, 2019</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1035.htm) (incorporated by reference to Exhibit 10.36 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |

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| 4.37 | [<u>English translation of Services Agreement on Acquiring Business and Payment Processing Business between Yahoo Japan Corporation (currently LY Corporation) and PayPay Card Corporation, dated September 29, 2022</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1037.htm) (incorporated by reference to Exhibit 10.37 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.38 | [<u>English translation of Memorandum on Contract Amendment between Yahoo Japan Corporation (currently LY Corporation) and PayPay Card Corporation, dated April 1, 2023</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1038.htm) (incorporated by reference to Exhibit 10.38 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.39 | [<u>English translation of PayPay Card General Payment Agency Agreement between PayPay Card Corporation and Yahoo Japan Corporation (currently LY Corporation), dated October 1, 2022</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1039.htm) (incorporated by reference to Exhibit 10.39 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.40 | [<u>English translation of Memorandum on PayPay Card Payment Agency Agreement between PayPay Card Corporation and Yahoo Japan Corporation (currently LY Corporation), dated October 1, 2022</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1040.htm) (incorporated by reference to Exhibit 10.40 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.41 | [<u>English translation of Memorandum on PayPay Card Merchant Agreement among PayPay Card Corporation, Yahoo Japan Corporation (currently LY Corporation) and SB Payment Service Corporation, dated September 30, 2022</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1041.htm) (incorporated by reference to Exhibit 10.41 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.42 | [<u>English translation of Memorandum on PayPay Card Merchant Agreement among PayPay Card Corporation, Yahoo Japan Corporation (currently LY Corporation) and SB Payment Service Corporation, dated September 30, 2022</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1042.htm) (incorporated by reference to Exhibit 10.42 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.43 | [<u>English translation of Agreement on Card Merchant between SoftBank Payment Service Corporation and YJ Card Corporation (currently PayPay Card Corporation), dated March 20, 2015</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1043.htm) (incorporated by reference to Exhibit 10.43 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.44† | [<u>English translation of Memorandum on Merchant Fees between SB Payment Service Corporation and PayPay Card Corporation, dated August 25, 2022</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1044.htm) (incorporated by reference to Exhibit 10.44 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.45 | [<u>English translation of Gift Cards Master Agreement between Yahoo Japan Corporation (currently LY Corporation) and PayPay Corporation, dated February 1, 2020</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1045.htm) (incorporated by reference to Exhibit 10.45 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.46 | [<u>English translation of Gift Card Projects Master Agreement between SoftBank Corp. and PayPay Corporation, dated August 28, 2019</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1046.htm) (incorporated by reference to Exhibit 10.46 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.47 | [<u>English translation of SB Crew Projects Master Agreement between SoftBank Corp. and PayPay Corporation, dated January 11, 2019</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1047.htm) (incorporated by reference to Exhibit 10.47 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.48 | [<u>English translation of Agreement on Issuance of PayPay Coupons between PayPay Corporation and SoftBank Corp., dated October 15, 2021</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1048.htm) (incorporated by reference to Exhibit 10.48 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.49 | [<u>English translation of Service Outsourcing Agreement on Issuance of PayPay Lite between SoftBank Corp. and PayPay Corporation, dated July 31, 2019</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1049.htm) (incorporated by reference to Exhibit 10.49 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.50 | [<u>English translation of Memorandum on Terms of Service of Carrier Billing among SoftBank Corp., SB Payment Service Corporation and PayPay Corporation, dated July 29, 2019</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1050.htm) (incorporated by reference to Exhibit 10.50 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |

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[**<u>**Table of Contents**</u>**](#toc_page)

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| | |
|:---|:---|
| 4.51 | [<u>English translation of SoftBank Pay In A Lump Sum (B) Merchant Terms between SoftBank Corp. and SB Payment Service Corporation, as of March 1, 2019</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1051.htm) (incorporated by reference to Exhibit 10.51 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.52 | [<u>English translation of SoftBank Card Agency Agreement between SB Payment Service Corporation and the Company, dated October 1, 2020</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1052.htm) (incorporated by reference to Exhibit 10.52 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.53† | [<u>License and Services Agreement between Paytm Labs Inc. and PayPay Corporation, dated July 1, 2022</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1053.htm)(incorporated by reference to Exhibit 10.53 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.54† | [<u>English translation of Software License Agreement relating to credit card merchant acquiring business between Yahoo Japan Corporation (currently LY Corporation) and PayPay Card Corporation, dated September 28, 2022</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1054.htm) (incorporated by reference to Exhibit 10.54 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.55 | [<u>English translation of Memorandum on Addition of Payment Method (PayPay Atobarai) to PayPay Money General Agent Agreement between PayPay Corporation and Yahoo Japan Corporation (currently LY Corporation), dated January 28, 2022</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1055.htm) (incorporated by reference to Exhibit 10.55 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.56 | [<u>English translation of Memorandum on Mini App Merchant Terms (PayPay Mall and PayPay Flea Market) between Yahoo Japan Corporation (currently LY Corporation) and PayPay Corporation, dated March 31, 2020</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1056.htm) (incorporated by reference to Exhibit 10.56 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.57 | [<u>English translation of Memorandum on Amendment of Merchant Fee Rate, Etc. of PayPay Money General Agency Agreement between PayPay Corporation and Yahoo Japan Corporation (currently LY Corporation), dated March 31, 2020</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1057.htm) (incorporated by reference to Exhibit 10.57 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.58 | [<u>English translation of Memorandum on PayPay General Agency Agreement between PayPay Corporation and SB Payment Service Corporation, dated February 25, 2022</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1058.htm) (incorporated by reference to Exhibit 10.58 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.59† | [<u>PAI SHIELD License and Implementation Statement of Work between Paytm Labs Inc. and PayPay Corporation, dated April 1, 2022</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1059.htm) (incorporated by reference to Exhibit 10.59 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.60 | [<u>Master Service Agreement between PayPay Corporation and Paytm Labs Inc., dated October 1, 2018</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1060.htm) (incorporated by reference to Exhibit 10.60 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.61 | [<u>English translation of PayPay Card General Agency Agreement between PayPay Card Corporation and Yahoo Japan Corporation (currently LY Corporation), dated April 1, 2023</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1061.htm) (incorporated by reference to Exhibit 10.61 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.62 | [<u>English translation of Memorandum on PayPay Card General Agency Agreement between PayPay Card Corporation and Yahoo Japan Corporation (currently LY Corporation), dated April 1, 2023</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1062.htm) (incorporated by reference to Exhibit 10.62 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.63 | [<u>English translation of Agreement on Loyalty Program (PayPay Step) between PayPay Corporation and Yahoo Japan Corporation (currently LY Corporation), dated June 30, 2021</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1063.htm) (incorporated by reference to Exhibit 10.63 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.64 | [<u>English translation of Fixed-Term Building Lease Agreement among MITSUBISHI ESTATE CO., LTD, MITSUBISHI JISHO PROPERTY MANAGEMENT Co., Ltd., and PayPay Corporation, dated April 30, 2024</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1064.htm) (incorporated by reference to Exhibit 10.64 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |

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[**<u>**Table of Contents**</u>**](#toc_page)

---

| | |
|:---|:---|
| 4.65 | [<u>English translation of Basic Loan Agreement between LY Corporation and PayPay Card Corporation, dated December 24, 2024</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1065.htm) (incorporated by reference to Exhibit 10.65 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.66 | [<u>English translation of Agreement regarding PayPay Step between PayPay Corporation and PayPay Card Corporation, dated April 29, 2023</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1066.htm) (incorporated by reference to Exhibit 10.66 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.67† | [<u>English translation of Guarantee Business Alliance Agreement between PayPay Bank Corporation and SMBC Consumer Finance Co., Ltd., dated October 1, 2025</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1067.htm) (incorporated by reference to Exhibit 10.67 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.68 | [<u>English translation of Memorandum on PayPay Card Merchant Agreement between PayPay Card Corporation and Yahoo Japan Corporation, dated April 1, 2013</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1068.htm) (incorporated by reference to Exhibit 10.68 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.69 | [<u>English translation of PayPay Card Payment Facilitator Agreement between PayPay Card Corporation and Yahoo Japan Corporation, dated April 1, 2013</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1069.htm) (incorporated by reference to Exhibit 10.69 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.70 | [<u>English translation of Memorandum on PayPay Card Merchant Agreement between PayPay Card Corporation and LY Corporation, dated October 1, 2024</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1070.htm) (incorporated by reference to Exhibit 10.70 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.71 | [<u>English translation of Amendments to Memorandum among SoftBank Corp., SB Payment Service Corporation and PayPay Corporation, dated August 31, 2023</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1071.htm) (incorporated by reference to Exhibit 10.71 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.72 | [<u>English translation of Memorandum on Amendment to PayPay Money Payment Facilitator Agreement between PayPay Corporation and Yahoo Japan Corporation, dated May 31, 2019</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1072.htm) (incorporated by reference to Exhibit 10.72 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.73 | [<u>English translation of Memorandum on Amendment to PayPay Money Payment Facilitator Agreement between PayPay Corporation and Yahoo Japan Corporation, dated April 5, 2021</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1073.htm) (incorporated by reference to Exhibit 10.73 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.74† | [<u>English translation of Share Purchase Agreement between Mitsui Sumitomo Insurance Company, Limited and PayPay Corporation, dated March 25, 2025</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1074.htm) (incorporated by reference to Exhibit 10.74 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.75† | [<u>English translation of Service Agreement between PayPay Card Corporation and Yahoo Japan Corporation, dated June 30, 2023</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526047933/d941409dex1075.htm) (incorporated by reference to Exhibit 10.75 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.76 | [<u>Form of Registration Rights Agreement</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526085389/d941409dex1076.htm) (incorporated by reference to Exhibit 10.76 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.77+ | [<u>Form of Terms and Conditions of Issuance of Stock Acquisition Rights (Trust-type Stock Options) (English translation)</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526085389/d941409dex1077.htm) (incorporated by reference to Exhibit 10.77 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.78+ | [<u>Form of Terms and Conditions of Issuance of Stock Acquisition Rights (Tax qualified-type Stock Options) (English translation)</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526085389/d941409dex1078.htm) (incorporated by reference to Exhibit 10.78 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.79+ | [<u>Form of Terms and Conditions of Issuance of Stock Acquisition Rights (One-yen-exercisable at retirement-type Stock Options) (English translation)</u>](https://www.sec.gov/Archives/edgar/data/2080845/000119312526085389/d941409dex1079.htm) (incorporated by reference to Exhibit 10.79 of the registration statement on Form F-1, as amended (file no. 333-293410) filed with the SEC on March 2, 2026) |
| 4.80\*† | [<u>Share Purchase Agreement by and between T&D Holdings, Inc. and PayPay Corporation</u>](payp-ex4_80.htm) |
| 8.1\* | [<u>List of Subsidiaries of Registrant</u>](payp-ex8_1.htm) |

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[**<u>**Table of Contents**</u>**](#toc_page)

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| | |
|:---|:---|
| 11.1\* | [<u>Rules on Insider Trading of Registrant</u>](payp-ex11_1.htm) |
| 12.1\* | [<u>Certification by Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002</u>](payp-ex12_1.htm) |
| 12.2\* | [<u>Certification by Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002</u>](payp-ex12_2.htm) |
| 13.1\*\* | [<u>Certification by Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002</u>](payp-ex13_1.htm) |
| 13.2\*\* | [<u>Certification by Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002</u>](payp-ex13_2.htm) |
| 15.1\* | [<u>Consent of Deloitte Touche Tohmatsu LLC</u>](payp-ex15_1.htm) |
| 97.1\* | [<u>Clawback Policy of Registrant</u>](payp-ex97_1.htm) |
| 101.INS\* | Inline XBRL Instance Document — the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
| 101.SCH\* | Inline XBRL Taxonomy Extension Schema Document |
| 101.CAL\* | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF\* | Inline XBRL Taxonomy Extension Definition Linkbase Document |
| 101.LAB\* | Inline XBRL Taxonomy Extension Label Linkbase Document  |
| 101.PRE\* | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| 104\* | Cover Page Interactive Data File — the cover page XBRL tags are embedded within the Exhibit 101 Inline XBRL document set  |

---

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| | |
|:---|:---|
| \* | Filed herewith.  |
| \*\* | Furnished herewith. |
| + | Indicates management contract or compensatory plan or arrangement.  |
| † | Portions of this exhibit (indicated by asterisks) have been omitted as the registrant has determined that (i) the omitted information is not material and (ii) the omitted information is the type that the registrant treats as private or confidential.  |

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**SIGNATURES**

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this Annual Report on its behalf.

---

| | |
|:---|:---|
|  | PayPay Corporation |
| By:  | /s/ Ichiro Nakayama |
|  | Name: Ichiro Nakayama |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title: President, Representative Director, <br>CEO and Corporate Officer |

---

Date: <u>June 30, 2026</u>  

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[**<u>**Table of Contents**</u>**](#toc_page)

**Selected Statistical and Other Information**

The following tables present selected statistical information as required by subpart 1400 of Regulation S-K.

In this section, averages are based on quarterly averages. Those averages are calculated as the average of the beginning balance and each quarter-end balance for the applicable year unless otherwise indicated. The presentation of historical averages in this section on a daily basis would involve unreasonable effort and expense. We do not believe that quarterly averages present trends materially different from those that would be presented by daily averages. We have not recalculated tax-exempt income on a tax-equivalent basis because the effect of doing so would not be significant.

***I. Distribution of assets, liabilities and stockholders' equity; interest rates and interest differential***

**Distribution of Assets, Liabilities and Stockholders' Equity**

The return (or yield) was calculated by the amount of interest income or expense in the period divided by the average balance.

The following tables show average balances, interest amounts and yields for our interest-earning assets and interest-bearing liabilities for the years ended March 31, 2024, 2025, and 2026.

---

| | | | |
|:---|:---|:---|:---|
| **For the year ended March 31, 2024** |  |  |  |
|  | **Average<br>Balances** | **Interest income<br>/ expense** | **Average yield<br>(assets) /<br>rate paid<br>(liabilities)** |
| **Assets** | **(in millions of yen)** | **(in millions of yen)** | **%** |
| **Interest-earning assets** |  |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | 749246 | 225 | 0.03% |
| &nbsp;&nbsp;&nbsp;Call loans | 112838 | 4 | 0.00% |
| &nbsp;&nbsp;&nbsp;Loans and advances to customers | 1376117 | 70841 | 5.15% |
| &nbsp;&nbsp;&nbsp;**Payment:** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Credit card receivables | 721912 | 58583 | 8.11% |
| &nbsp;&nbsp;&nbsp;**Financial service:** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mortgage loans | 453308 | 1673 | 0.37% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Overdraft | 192799 | 10575 | 5.48% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other | 8098 | 10 | 0.12% |
| &nbsp;&nbsp;&nbsp;Securities | 541286 | 2330 | 0.43% |
| &nbsp;&nbsp;&nbsp;**Payment:** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Japanese government securities<sup>(1)</sup> | 2879 | 3 | 0.10% |
| &nbsp;&nbsp;&nbsp;**Financial service:** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Japanese government securities<sup>(2)</sup> | 120632 | 388 | 0.32% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Corporate and other debt securities<sup>(2)</sup> | 213113 | 1301 | 0.61% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Asset backed securities | 196158 | 638 | 0.33% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exchange traded funds<sup>(3)</sup> | 8504 |  |  |
| &nbsp;&nbsp;&nbsp;Guarantee deposits | 7732 | 428 | 5.54% |
| &nbsp;&nbsp;&nbsp;Other financial assets | 222 | 56 | 25.23% |
| **Total interest-earning assets** | 2787441 | 73884 | 2.65% |
| **Total non-interest-earning assets** | 696223 |  |  |
| **Total assets** | 3483664 |  |  |
| **Liabilities** |  |  |  |
| **Interest-bearing liabilities** |  |  |  |
| &nbsp;&nbsp;&nbsp;Deposits | 1408251 | 412 | 0.03% |
| &nbsp;&nbsp;&nbsp;Borrowing | 514906 | 1452 | 0.28% |
| &nbsp;&nbsp;&nbsp;Lease liabilities | 8155 | 65 | 0.80% |
| &nbsp;&nbsp;&nbsp;Other financial liabilities | 102 | 2 | 1.96% |
| **Total Interest-bearing liabilities** | 1931414 | 1931 | 0.10% |
| **Total non-interest-bearing liabilities** | 1361154 |  |  |
| **Equity** | 191096 |  |  |
| **Equity and non-interest-bearing liabilities** | 1552250 |  |  |
| **Equity and liabilities** | 3483664 |  |  |

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[**<u>**Table of Contents**</u>**](#toc_page)

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| | | | |
|:---|:---|:---|:---|
| **For the year ended March 31, 2025** |  |  |  |
|  | **Average<br>Balances** | **Interest income<br>/ expense** | **Average yield<br>(assets) /<br>rate paid<br>(liabilities)** |
| **Assets** | **(in millions of yen)** | **(in millions of yen)** | **%** |
| **Interest-earning assets** |  |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | 568734 | 901 | 0.16% |
| &nbsp;&nbsp;&nbsp;Call loans | 91817 | 196 | 0.21% |
| &nbsp;&nbsp;&nbsp;Loans and advances to customers | 1743830 | 83557 | 4.79% |
| &nbsp;&nbsp;&nbsp;**Payment:** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Credit card receivables | 926077 | 68395 | 7.39% |
| &nbsp;&nbsp;&nbsp;**Financial service:** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mortgage loans | 580095 | 2201 | 0.38% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Overdraft | 237362 | 12951 | 5.46% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other | 296 | 10 | 3.38% |
| &nbsp;&nbsp;&nbsp;Securities | 811660 | 3710 | 0.46% |
| &nbsp;&nbsp;&nbsp;**Payment:** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Japanese government securities<sup>(1)</sup> | 31641 | 77 | 0.24% |
| &nbsp;&nbsp;&nbsp;**Financial service:** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Japanese government securities<sup>(2)</sup> | 271501 | 1153 | 0.42% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Corporate and other debt securities<sup>(2)</sup> | 269136 | 1426 | 0.53% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Asset backed securities | 234259 | 1201 | 0.51% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exchange traded funds<sup>(3)</sup> | 5123 | (147) | (2.87%) |
| &nbsp;&nbsp;&nbsp;Guarantee deposits | 9292 | 7 | 0.08% |
| &nbsp;&nbsp;&nbsp;Other financial assets | 426 | 71 | 16.67% |
| **Total interest-earning assets** | 3225759 | 88442 | 2.74% |
| **Total non-interest-earning assets** | 709203 |  |  |
| **Total assets** | 3934962 |  |  |
| **Liabilities** |  |  |  |
| **Interest-bearing liabilities** |  |  |  |
| &nbsp;&nbsp;&nbsp;Deposits | 1559883 | 2013 | 0.13% |
| &nbsp;&nbsp;&nbsp;Borrowing | 511009 | 2147 | 0.42% |
| &nbsp;&nbsp;&nbsp;Lease liabilities | 8375 | 92 | 1.10% |
| &nbsp;&nbsp;&nbsp;Other Financial liabilities | 119 | 2 | 1.68% |
| **Total Interest-bearing liabilities** | 2079386 | 4254 | 0.20% |
| **Total non-interest-bearing liabilities** | 1650379 |  |  |
| **Equity** | 205197 |  |  |
| **Equity and non-interest-bearing liabilities** | 1855576 |  |  |
| **Equity and liabilities** | 3934962 |  |  |

---

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---

| | | | |
|:---|:---|:---|:---|
| **For the year ended March 31, 2026** |  |  |  |
|  | **Average<br>Balances** | **Interest income<br>/ expense** | **Average yield<br>(assets) /<br>rate paid<br>(liabilities)** |
| **Assets** | **(in millions of yen)** | **(in millions of yen)** | **%** |
| **Interest-earning assets** |  |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | 405861 | 2095 | 0.52% |
| &nbsp;&nbsp;&nbsp;Call loans | 69003 | 344 | 0.50% |
| &nbsp;&nbsp;&nbsp;Loans and advances to customers | 2213602 | 105130 | 4.75% |
| &nbsp;&nbsp;&nbsp;**Payment:** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Credit card receivables | 1162605 | 83276 | 7.16% |
| &nbsp;&nbsp;&nbsp;**Financial service:** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mortgage loans | 758323 | 5276 | 0.70% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Overdraft | 287168 | 16522 | 5.75% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other | 5506 | 56 | 1.02% |
| &nbsp;&nbsp;&nbsp;Securities | 1222463 | 8868 | 0.73% |
| &nbsp;&nbsp;&nbsp;**Payment:** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Japanese government securities<sup>(1)</sup> | 63958 | 343 | 0.54% |
| &nbsp;&nbsp;&nbsp;**Financial service:** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Japanese government securities<sup>(2)</sup> | 497003 | 3491 | 0.70% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Corporate and other debt securities<sup>(2)</sup> | 359941 | 2630 | 0.73% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Asset backed securities | 299467 | 2398 | 0.80% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exchange traded funds<sup>(3)</sup> | 2094 | 6 | 0.29% |
| &nbsp;&nbsp;&nbsp;Guarantee deposits | 7650 | 3 | 0.04% |
| &nbsp;&nbsp;&nbsp;Other financial assets | 524 | 48 | 9.16% |
| **Total interest-earning assets** | 3919103 | 116488 | 2.97% |
| **Total non-interest-earning assets** | 767360 |  |  |
| **Total assets** | 4686463 |  |  |
| **Liabilities** |  |  |  |
| **Interest-bearing liabilities** |  |  |  |
| &nbsp;&nbsp;&nbsp;Deposits | 1876142 | 6346 | 0.34% |
| &nbsp;&nbsp;&nbsp;Borrowing | 538682 | 4047 | 0.75% |
| &nbsp;&nbsp;&nbsp;Lease liabilities | 10824 | 195 | 1.80% |
| &nbsp;&nbsp;&nbsp;Other financial liabilities | 128 | 2 | 1.56% |
| **Total Interest-bearing liabilities** | 2425776 | 10590 | 0.44% |
| **Total non-interest-bearing liabilities** | 1958797 |  |  |
| **Equity** | 301890 |  |  |
| **Equity and non-interest-bearing liabilities** | 2260687 |  |  |
| **Equity and liabilities** | 4686463 |  |  |

---

(1)Japanese government securities within Payment segment are purchased for the purpose of meeting the deposit requirement under the Payment Services Act.

(2)These securities include assets pledged as collateral at the Bank of Japan and Japanese Banks' Payment Clearing Network.

(3)Exchange traded funds are mainly held for PayPay Point investment-related business.

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**Changes in Interest Income and Interest Expenses; Volume and Rate Analysis**

The following tables present the variations in our financial income and expenses as a result of the variations in the average volume of interest-earning assets and interest-bearing liabilities and changes in average interest rates occurred for the years ended March 31, 2025 and 2026, compared to their respective prior years.

Changes attributable to the combined impact of changes in rate and volume have been allocated proportionately to the changes due to volume changes and changes due to rate changes.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  |  |  |  | ***(in millions of yen)*** | ***(in millions of yen)*** |
|  | **For the year<br>ended<br>March 31,<br>2024** | **Fiscal year ended March 31, 2025<br>versus<br>fiscal year ended March 31, 2024** | **Fiscal year ended March 31, 2025<br>versus<br>fiscal year ended March 31, 2024** | **Fiscal year ended March 31, 2025<br>versus<br>fiscal year ended March 31, 2024** | **For the year<br>ended<br>March 31,<br>2025** |
| **Assets** |  | **Volume** | **Yield** | **Net Change** |  |
| **Interest-earning assets** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | 225 | (67) | 743 | 676 | 901 |
| &nbsp;&nbsp;&nbsp;Call loans | 4 | (1) | 193 | 192 | 196 |
| &nbsp;&nbsp;&nbsp;Loans and advances to customers | 70841 | 17889 | (5173) | 12716 | 83557 |
| &nbsp;&nbsp;&nbsp;Securities | 2330 | 1228 | 152 | 1380 | 3710 |
| &nbsp;&nbsp;&nbsp;Guarantee deposits | 428 | 72 | (493) | (421) | 7 |
| &nbsp;&nbsp;&nbsp;Other financial assets | 56 | 39 | (24) | 15 | 71 |
| **Total interest-earning assets** | 73884 | 19160 | (4602) | 14558 | 88442 |
| **Liabilities** |  |  |  |  |  |
| **Interest-bearing liabilities** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Deposits | 412 | 49 | 1552 | 1601 | 2013 |
| &nbsp;&nbsp;&nbsp;Borrowing | 1452 | (11) | 706 | 695 | 2147 |
| &nbsp;&nbsp;&nbsp;Lease liabilities | 65 | 2 | 25 | 27 | 92 |
| &nbsp;&nbsp;&nbsp;Other financial liabilities | 2 | 0 | (0) | 0 | 2 |
| **Total interest-bearing liabilities** | 1931 | 40 | 2283 | 2323 | 4254 |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  |  |  |  | ***(in millions of yen)*** | ***(in millions of yen)*** |
|  | **For the year<br>ended<br>March 31,<br>2025** | **Fiscal year ended March 31, 2026<br>versus<br>fiscal year ended March 31, 2025** | **Fiscal year ended March 31, 2026<br>versus<br>fiscal year ended March 31, 2025** | **Fiscal year ended March 31, 2026<br>versus<br>fiscal year ended March 31, 2025** | **For the year<br>ended<br>March 31,<br>2026** |
| **Assets** |  | **Volume** | **Yield** | **Net Change** |  |
| **Interest-earning assets** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | 901 | (324) | 1518 | 1194 | 2095 |
| &nbsp;&nbsp;&nbsp;Call loans | 196 | (59) | 207 | 148 | 344 |
| &nbsp;&nbsp;&nbsp;Loans and advances to customers | 83557 | 22317 | (744) | 21573 | 105130 |
| &nbsp;&nbsp;&nbsp;Securities | 3710 | 2388 | 2770 | 5158 | 8868 |
| &nbsp;&nbsp;&nbsp;Guarantee deposits | 7 | (1) | (3) | (4) | 3 |
| &nbsp;&nbsp;&nbsp;Other financial assets | 71 | 14 | (37) | (23) | 48 |
| **Total interest-earning assets** | 88442 | 24335 | 3711 | 28046 | 116488 |
| **Liabilities** |  |  |  |  |  |
| **Interest-bearing liabilities** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Deposits | 2013 | 482 | 3851 | 4333 | 6346 |
| &nbsp;&nbsp;&nbsp;Borrowing | 2147 | 122 | 1778 | 1900 | 4047 |
| &nbsp;&nbsp;&nbsp;Lease liabilities | 92 | 32 | 71 | 103 | 195 |
| &nbsp;&nbsp;&nbsp;Other financial liabilities | 2 | 0 | (0) | 0 | 2 |
| **Total interest-bearing liabilities** | 4254 | 636 | 5700 | 6336 | 10590 |

---

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**Interest-earning Assets-Margin**

The following table presents our levels of average interest-earning assets and illustrates the comparative gross and net yields obtained for the indicated periods.

---

| | | | |
|:---|:---|:---|:---|
|  | **(in millions of yen, except<br>percentages)** | **(in millions of yen, except<br>percentages)** | **(in millions of yen, except<br>percentages)** |
|  | **For the year ended March 31,** | **For the year ended March 31,** | **For the year ended March 31,** |
|  | **2024** | **2025** | **2026** |
| Average total interest-earning assets | 2787441 | 3225759 | 3919103 |
| Interest income | 73884 | 88442 | 116488 |
| Interest expense | 1931 | 4254 | 10590 |
| Net interest income<sup>(1)</sup> | 71953 | 84188 | 105898 |
| Net interest margin<sup>(2)</sup> | 2.58% | 2.61% | 2.70% |
| **Payment:** |  |  |  |
| Average total interest-earning assets | 1172964 | 1215717 | 1348549 |
| Interest income | 59013 | 68623 | 84013 |
| Interest expense | 1387 | 1994 | 3720 |
| Net interest income<sup>(1)</sup> | 57626 | 66629 | 80293 |
| Net interest margin<sup>(2)</sup> | 4.91% | 5.48% | 5.95% |
| **Financial service:** |  |  |  |
| Average total interest-earning assets | 1614477 | 2010042 | 2570554 |
| Interest income | 14871 | 19819 | 32475 |
| Interest expense | 544 | 2260 | 6870 |
| Net interest income<sup>(1)</sup> | 14327 | 17559 | 25605 |
| Net interest margin<sup>(2)</sup> | 0.89% | 0.87% | 1.00% |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **(in millions of yen, except<br>percentages)** | **(in millions of yen, except<br>percentages)** | **(in millions of yen, except<br>percentages)** |
|  | **For the year ended March 31,** | **For the year ended March 31,** | **For the year ended March 31,** |
|  | **2024** | **2025** | **2026** |
| **(PayPay Bank Corporation of financial service segment)** |  |  |  |
| Average total interest-earning assets | 1600103 | 1996699 | 2557553 |
| Interest income | 14811 | 19759 | 32426 |
| Interest expense | 542 | 2248 | 6855 |
| Net interest income<sup>(1)</sup> | 14269 | 17511 | 25571 |
| Net interest margin<sup>(2)</sup> | 0.89% | 0.88% | 1.00% |

---

(1)Net interest income is the difference between interest income and interest expense.

(2)Net interest margin is net interest income divided by average total interest-earning assets.

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***II. Investments in debt securities***

**Maturity Composition of Investment in Securities Not Carried at Fair Value through Earnings**

The following table presents our weighted average yield of each category of debt securities not carried at fair value through earnings as of March 31, 2026.

The weighted average yield for each range of maturities is calculated by dividing the interest income for the year ended March 31, 2026 by the book amount of debt securities as of March 31, 2026.

---

| | | | | |
|:---|:---|:---|:---|:---|
| **As of March 31, 2026** |  |  |  |  |
|  | **Maturing** | **Maturing** | **Maturing** | **Maturing** |
|  | **In 1 year or<br>less** | **After 1 year<br>through<br>5 years** | **After 5 years<br>through<br>10 years** | **After<br>10 years** |
|  | **%** | **%** | **%** | **%** |
| **Debt securities measured at fair value through other<br> comprehensive income** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Japanese government bonds and municipal bonds | 0.17% | 0.38% | 0.54% | 0.11% |
| &nbsp;&nbsp;&nbsp;Corporate and other debt securities | 0.28% | 0.39% | 0.44% | 0.41% |
| &nbsp;&nbsp;&nbsp;Asset-backed securities | 0.80% | 0.70% | 0.60% | 0.51% |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| **As of March 31, 2026** |  |  |  |  |
|  | **Maturing** | **Maturing** | **Maturing** | **Maturing** |
|  | **In 1 year or<br>less** | **After 1 year<br>through<br>5 years** | **After 5 years<br>through<br>10 years** | **After<br>10 years** |
|  | **%** | **%** | **%** | **%** |
| **Debt securities measured at amortized cost** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Japanese government bonds and municipal bonds | 0.41% | 0.50% | 0.25% |  |
| &nbsp;&nbsp;&nbsp;Corporate and other debt securities | 0.78% | 0.61% | 0.43% | 0.41% |
| &nbsp;&nbsp;&nbsp;Asset-backed securities | 0.41% | 0.41% | 0.41% | 0.41% |

---

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***III. Loan portfolio***

**Maturity and Composition of Loan Portfolio**

The following table presents our loans and advances to customers' portfolio by the time remaining to maturity as of March 31, 2026. Loans and advances to customers are presented before deduction of allowance for losses. Of these, the majority of the categories, In 1 year or less and After 1 year through 5 years, comprises credit card receivables and overdrafts. The most balance the other two categories represents mortgage loans.

---

| | | | | |
|:---|:---|:---|:---|:---|
| **As of March 31, 2026** |  |  |  |  |
|  | **(in millions of yen)** | **(in millions of yen)** | **(in millions of yen)** | **(in millions of yen)** |
|  | **Maturing** | **Maturing** | **Maturing** | **Maturing** |
|  | **In 1 year or<br>less** | **After 1 year<br>through<br>5 years** | **After 5 years<br>through<br>15 years** | **After 15 years** |
| Loans and advances to customers | 1453280 | 196676 | 139610 | 723285 |
| &nbsp;&nbsp;&nbsp;Fixed interest rate |  | 196254 | 119338 | 7758 |
| &nbsp;&nbsp;&nbsp;Variable interest rate |  | 422 | 20271 | 715527 |
| **Total Loans** | 1453280 | 196676 | 139610 | 723285 |

---

***IV. Allowance for Credit Losses (Loss Allowance)***

**Summary of Loan Loss Experience**

Allocation of Loss Allowance

The following table presents impairment losses and sets forth the percentage distribution of the loss allowance as of March 31, 2024, 2025, and 2026.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **(in millions of yen, except percentages)** | **(in millions of yen, except percentages)** | **(in millions of yen, except percentages)** | **(in millions of yen, except percentages)** | **(in millions of yen, except percentages)** | **(in millions of yen, except percentages)** |
|  | **March 31, 2024** | **March 31, 2024** | **March 31, 2025** | **March 31, 2025** | **March 31, 2026** | **March 31, 2026** |
|  | **Amount** | **% of total<br>loan<br>portfolio** | **Amount** | **% of total<br>loan<br>portfolio** | **Amount** | **% of total<br>loan<br>portfolio** |
| Total loan portfolio<sup>(1)</sup> | 1560487 |  | 1972601 |  | 2560444 |  |
| Total losses allowance | (31935) | 2.05% | (44994) | 2.28% | (47593) | 1.86% |
| Total loan portfolio, net of loss allowance | 1528552 |  | 1927607 |  | 2512851 |  |

---

(1)Total loan portfolio represents our total loans and advances to customers.

The ratio of total losses allowance to total loan portfolio has been relatively consistent as of March 31 for the years 2024 through 2026.

Allocation of Net Write-offs

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **(in millions of yen, except percentages)** | **(in millions of yen, except percentages)** | **(in millions of yen, except percentages)** | **(in millions of yen, except percentages)** | **(in millions of yen, except percentages)** | **(in millions of yen, except percentages)** |
|  | **March 31, 2024** | **March 31, 2024** | **March 31, 2025** | **March 31, 2025** | **March 31, 2026** | **March 31, 2026** |
|  | **Amount** | **% of total<br>average<br>loans<br>outstanding** | **Amount** | **% of total<br>average<br>loans<br>outstanding** | **Amount** | **% of total<br>average<br>loans<br>outstanding** |
| Loans and advances to customers | 1410585 |  | 1789673 |  | 2213613 |  |
| **Total average loans outstanding**<sup>(1)</sup> | 1410585 |  | 1789673 |  | 2213613 |  |
| **Net write-offs:** |  |  |  |  |  |  |
| Loans and advances to customers<sup>(2)</sup> | 7606 | 0.54% | 15263 | 0.85% | 14307 | 0.65% |
| **Total net write-offs** | 7606 | 0.54% | 15263 | 0.85% | 14307 | 0.65% |

---

(1)Average amounts are based on the average of the quarterly balances within each applicable year, unless otherwise indicated.

(2)We identified a calculation error in prior period figures and restated the amounts as of March 31, 2024 and 2025.

The ratio of net write-offs to total average loans to customers was 0.54%, 0.85% and 0.65% for the years ended March 31, 2024, 2025 and 2026, respectively, and preserved on levels around 1% as a result of high quality of loan origination and continuing improvements in loan collection process.

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***V. Deposits***

**Composition of Deposits per Type and Yield**

The following table presents, with average balances, the breakdown of deposits by category as of March 31, 2024, 2025, and 2026.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **(in millions of yen, except percentages)** | **(in millions of yen, except percentages)** | **(in millions of yen, except percentages)** | **(in millions of yen, except percentages)** | **(in millions of yen, except percentages)** | **(in millions of yen, except percentages)** |
|  | **March 31, 2024** | **March 31, 2024** | **March 31, 2025** | **March 31, 2025** | **March 31, 2026** | **March 31, 2026** |
|  | **Average<br>Balance** | **Average rate<br>paid** | **Average<br>Balance** | **Average rate<br>paid** | **Average<br>Balance** | **Average rate<br>paid** |
| Demand deposits |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest bearing | 1288422 | 0.00% | 1407522 | 0.09% | 1705877 | 0.33% |
| &nbsp;&nbsp;&nbsp;Non-interest bearing | 197140 |  | 226096 |  | 222309 |  |
| Time deposits | 119829 | 0.32% | 152361 | 0.48% | 170265 | 0.45% |
| Other<sup>(1)</sup> | 392147 |  | 503936 |  | 630311 |  |
| Total | 1997538 |  | 2289915 |  | 2728762 |  |

---

(1)Other includes mainly PayPay Users' deposits. For further details on the remaining components of "Other", see Note 20 to our audited consolidated financial statements.

**Uninsured deposits**

Uninsured deposits refer to the amounts of deposit accounts under certain categories that are not covered by the relevant insurance regimes and the aggregate amounts of the uninsured deposit accounts that exceed the respective limits of the insurance regime.

In Japan, categories such as deposits denominated in foreign currency and certificates of deposits are uninsured, and, for all other types of deposits, the insurance limit per client is ¥10 million. For further details of the regime, see "Item 4. Information on the Company—B. Business Overview—Regulations—PayPay Bank Corporation—Deposit Insurance Act".

Prior period amounts have been revised to reflect updated calculations for uninsured deposits.

Our uninsured deposits were ¥1,134,797 million and ¥1,470,473 million as of March 31, 2025 and 2026, respectively.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **As of March 31, 2026** |  |  |  |  |  |
|  | **(in millions of yen)** | **(in millions of yen)** | **(in millions of yen)** | **(in millions of yen)** | **(in millions of yen)** |
|  | **In 3 months<br>or less** | **After<br>3 months<br>but within 6<br>months** | **After<br>6 months<br>but within 12<br>months** | **After 12<br>months** | **Total** |
| Uninsured Time Deposits | 84619 | 6269 | 9675 | 10416 | 110979 |

---

Uninsured time deposits are uninsured deposits which are subject to contractual maturity requirements prior to withdrawal.

Amounts are presented on a residual contractual maturity basis and exclude overnight deposits where contractual requirements are imminently satisfied.

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**PAYPAY CORPORATION**

**INDEX TO CONSOLIDATED FINANCIAL STATEMENTS**

---

| | |
|:---|:---|
| **Audited Consolidated Financial Statements** | Page |
| [<u>Report of Deloitte Touche Tohmatsu LLC (PCAOB ID No.</u> 1044<u>), Independent Registered Public Accounting Firm</u>](#report_of_independent_accounting_firm) | F-2 |
| [<u>Consolidated Statements of Financial Position as of March 31, 2025 and 2026</u>](#consolidated_stmt_of_financial_position) | F-5 |
| [<u>Consolidated Statements of Profit or Loss for the years ended March 31, 2024, 2025 and 2026</u>](#consolidated_stmt_of_profit_or_loss) | F-6 |
| [<u>Consolidated Statements of Comprehensive Income for the years ended March 31, 2024, 2025 and 2026</u>](#statements_of_comprehensive_income) | F-7 |
| [<u>Consolidated Statements of Changes in Equity for the years ended March 31, 2024, 2025 and 2026</u>](#statements_of_changes_in_equity) | F-8 |
| [<u>Consolidated Statements of Cash Flows for the years ended March 31, 2024, 2025 and 2026</u>](#statements_of_cash_flows) | F-11 |
| [<u>Notes to Consolidated Financial Statements</u>](#notes) | F-13 |

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**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

To the shareholders and the Board of Directors of PayPay Corporation

**Opinion on the Financial Statements**

We have audited the accompanying consolidated statements of financial position of PayPay Corporation and subsidiaries (the "Group") as of March 31, 2026 and 2025, the related consolidated statements of profit or loss, comprehensive income, changes in equity, and cash flows, for each of the three years in the period ended March 31, 2026, and the related notes and the Schedule I (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Group as of March 31, 2026 and 2025, and the results of its operations and its cash flows for each of the three years in the period ended March 31, 2026, in conformity with IFRS Accounting Standards as issued by the International Accounting Standards Board.

**Basis for Opinion**

These financial statements are the responsibility of the Group's management. Our responsibility is to express an opinion on the Group's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Group in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Group is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

**Critical Audit Matters**

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the Audit and Supervisory Committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below,

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providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

***Revenue – Transaction and service income – PayPay Settlement Services and corresponding PayPay Points deduction— Refer to Notes 3 and 30 to the financial statements***

*Critical Audit Matter Description*

The Group's revenue from the PayPay Settlement Services is based on the settlement amount and the predetermined rates. The processing of transactions and recording of revenue is based on contractual terms in multiple agreements with PayPay Merchants and PayPay Users. Revenue from PayPay Settlement Services also involves manual entries to record PayPay Points, which is accounted for as consideration payable to customers and, therefore, as a deduction from revenue.

We identified revenue from the PayPay Settlement Services, together with the PayPay Points accounted for as reduction in such revenue, as a critical audit matter given the Group's processes to record revenue are highly automated, involves multiple systems, databases, and tools, and the underlying data used to manually record consideration payable to customers are also highly dependent on Group's technology infrastructure. This required an increased extent of effort, including the need for us to involve professionals with expertise in information technology ("IT"), to understand the process flow and data flow; to identify, test, and evaluate the relevant systems (including software applications) and automated controls; as well as to test and evaluate the underlying data used in the manual entries recorded as a deduction from revenue. Significant auditor judgment was required to design and execute the audit procedures and to assess the sufficiency of the procedures performed and evidence obtained due to the complexity of the Group's technology infrastructure to recognize revenue.

*How the Critical Audit Matter Was Addressed in the Audit*

• With the assistance of our IT specialists, we:

– identified the relevant systems and databases used to process revenue transactions and tested the general IT controls over each of these systems and databases, including testing of user access controls, change management controls, and system operation controls.

– tested the design, implementation, and operating effectiveness of interface controls and automated controls within the PayPay Settlement Services revenue stream, as well as the controls designed to ensure the accuracy and completeness of revenue and the settlement amount.

– evaluated the integrity of underlying data used for the deduction from revenue and the settlement amount in terms of access logs in these systems.

• We tested internal controls within the relevant revenue business processes, including those in place to reconcile the various reports extracted from various systems and databases to the Group's general ledger.

• We performed analytical procedures based on the settlement amounts and the historical revenue.

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• We tested the underlying data used for the deduction from revenue by agreeing the PayPay Points granted with the respective contracts and tested the mathematical accuracy.

***Income Taxes: Recognition and Recoverability of Deferred Tax Assets —Refer to Notes 3 and 18 to the financial statements***

*Critical Audit Matter Description*

The Group recognizes deferred taxes for differences between the financial statement and tax basis of assets and liabilities at enacted statutory tax rates in effect for the years in which the deferred tax asset or liability is expected to be settled or utilized. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which deductible temporary differences and tax loss carry forwards can be utilized. Taxable profit includes future reversals of deductible and taxable temporary differences and expected future taxable profit to the extent permitted under the tax law.

We identified management's determination that it is probable that sufficient taxable profit will be generated in the future to recognize its deferred tax assets as a critical audit matter because of the significant judgments and estimates management makes related to the ability to generate future taxable profit. This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our income tax specialists, when performing audit procedures to evaluate the reasonableness of management's estimates.

*How the Critical Audit Matter Was Addressed in the Audit*

Our audit procedures related to management's determination that it is probable that sufficient taxable profit will be generated in the future to realize deferred tax assets included the following, among others:

• We tested the reasonableness of the methods, assumptions, and judgments used by management to determine that it is probable that sufficient taxable profit will be generated in the future to recognize the deferred tax assets.

• We evaluated whether the inputs used in estimating the future taxable profit were consistent with evidence obtained in other areas of the audit.

• With the assistance of our income tax specialists, we evaluated whether the sources of management's estimated taxable profit were of the appropriate character and sufficient to utilize the deferred tax assets under the relevant tax law.

• We tested the mathematical accuracy of the calculations of deferred tax assets and used historical information to evaluate the reasonableness of management's inputs used in the estimation of future taxable profit.

/s/Deloitte Touche Tohmatsu LLC

Tokyo, JAPAN

June 30, 2026

We have served as the Group's auditor since 2019.

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***PayPay Corporation***

**Consolidated Statements of Financial Position**

---

| | | | |
|:---|:---|:---|:---|
|  |  | *(In millions of yen)* | *(In millions of yen)* |
|  | **Notes** | **March 31,<br>2025** | **March 31, <br>2026** |
| **Assets** |  |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | 8, 36 | 369811 | 363083 |
| &nbsp;&nbsp;&nbsp;Guarantee deposits | 9, 36 | 244229 | 74139 |
| &nbsp;&nbsp;&nbsp;Call loans | 36 | 63000 | 40014 |
| &nbsp;&nbsp;&nbsp;Accounts receivable | 10, 36 | 141054 | 150372 |
| &nbsp;&nbsp;&nbsp;Loans and advances to customers | 11, 36 | 1927607 | 2512851 |
| &nbsp;&nbsp;&nbsp;Securities | 12, 36 | 1075748 | 1736835 |
| &nbsp;&nbsp;&nbsp;Other financial assets | 13, 36 | 23130 | 32293 |
| &nbsp;&nbsp;&nbsp;Property and equipment | 14 | 14493 | 14879 |
| &nbsp;&nbsp;&nbsp;Right-of-use assets | 15 | 14799 | 12175 |
| &nbsp;&nbsp;&nbsp;Intangible assets | 16 | 65672 | 66466 |
| &nbsp;&nbsp;&nbsp;Goodwill | 16, 17 | 15157 | 15157 |
| &nbsp;&nbsp;&nbsp;Investments accounted for using the equity method | 37 | 1012 | 12762 |
| &nbsp;&nbsp;&nbsp;Deferred tax assets | 18 | 49392 | 107275 |
| &nbsp;&nbsp;&nbsp;Other assets | 19 | 37001 | 37711 |
| **Total assets** |  | 4042105 | 5176012 |
| **Liabilities** |  |  |  |
| &nbsp;&nbsp;&nbsp;Deposits | 20, 36 | 2385939 | 2952495 |
| &nbsp;&nbsp;&nbsp;Accounts payable | 21, 36 | 949397 | 1122338 |
| &nbsp;&nbsp;&nbsp;Income tax payables |  | 6477 | 13073 |
| &nbsp;&nbsp;&nbsp;Borrowings | 22, 36 | 399578 | 564956 |
| &nbsp;&nbsp;&nbsp;Other financial liabilities | 23, 36 | 34207 | 48116 |
| &nbsp;&nbsp;&nbsp;Provisions | 24 | 7041 | 7403 |
| &nbsp;&nbsp;&nbsp;Lease liabilities | 15, 22, 36 | 12097 | 9549 |
| &nbsp;&nbsp;&nbsp;Deferred tax liabilities | 18 | 377 | 206 |
| &nbsp;&nbsp;&nbsp;Other liabilities | 25 | 23261 | 27115 |
| **Total liabilities** |  | 3818374 | 4745251 |
| **Shareholders' equity** |  |  |  |
| &nbsp;&nbsp;&nbsp;Issued capital | 28 | 91434 | 200635 |
| &nbsp;&nbsp;&nbsp;Share premium | 28 | 13727 | 86730 |
| &nbsp;&nbsp;&nbsp;Retained earnings (Accumulated deficit) | 28 | (4887) | 109869 |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss | 28 | (379) | (3055) |
| **Equity attributable to owners of the parent company** |  | 99895 | 394179 |
| Non-controlling interests | 37 | 123836 | 36582 |
| **Total shareholders' equity** |  | 223731 | 430761 |
| **Total liabilities and shareholders' equity** |  | 4042105 | 5176012 |

---

*See Notes to Consolidated Financial Statements*

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**Consolidated Statements of Profit or Loss**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  |  |  | *(In millions of yen)* | *(In millions of yen)* |
|  |  | **For the year ended** | **For the year ended** | **For the year ended** |
|  | **Notes** | **March 31,<br>2024** | **March 31,<br>2025** | **March 31, <br>2026** |
| Transaction and service income |  | 174127 | 203595 | 251041 |
| Interest income |  | 73884 | 88442 | 116488 |
| Gains (losses) on financial instruments |  | 4641 | 5529 | 10250 |
| Other operating income |  | 1959 | 1512 | 2883 |
| **Total revenue** | 6, 30, 31, 32 | 254611 | 299078 | 380662 |
| Point expenses |  | (45402) | (50362) | (60195) |
| Settlement related cost |  | (39992) | (43662) | (48731) |
| Employee benefit expenses |  | (37764) | (41483) | (47641) |
| Professional and outsourcing services expenses |  | (34800) | (28767) | (28099) |
| Provision for loss allowance |  | (23006) | (23942) | (24923) |
| Other operating expenses |  | (73636) | (75352) | (90991) |
| **Total operating expenses** | 6, 26, 33 | (254600) | (263568) | (300580) |
| **Operating profit** | 6 | 11 | 35510 | 80082 |
| Share of loss of investments accounted for using <br> the equity method | 37 |  | (549) | (137) |
| **Profit before tax** |  | 11 | 34961 | 79945 |
| Income tax (expense) benefit | 18 | (841) | 4196 | 37865 |
| **Profit (loss) for the year** |  | (830) | 39157 | 117810 |
| &nbsp;&nbsp;Attributable to |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Owners of the parent company |  | (3350) | 36170 | 115034 |
| &nbsp;&nbsp;&nbsp;Non-controlling interests | 37 | 2520 | 2987 | 2776 |
| **Earnings (loss) per share** |  |  |  | *(In yen)* |
| &nbsp;&nbsp;&nbsp;Earnings (loss) per share attributable to owners of the<br> parent company <sup>(1)</sup> |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic earnings (loss) per share | 34 | (6.09) | 65.76 | 180.42 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Diluted earnings (loss) per share | 34 | (6.09) | 65.76 | 178.55 |

---

(1)The share split occurred and became effective on November 15, 2025 and earnings per share has been retrospectively adjusted. Refer to Note 28, *Issued Capital and Reserves* for details of share split*.*

*See Notes to Consolidated Financial Statements*

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**Consolidated Statements of Comprehensive Income**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  |  |  | *(In millions of yen)* | *(In millions of yen)* |
|  |  | **For the year ended** | **For the year ended** | **For the year ended** |
|  | **Notes** | **March 31, 2024** | **March 31, 2025** | **March 31, 2026** |
| **Profit (loss) for the year** |  | (830) | 39157 | 117810 |
| Other comprehensive income (loss) for the year, net of tax |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Items that may be reclassified subsequently to profit or loss |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in the fair value of debt instruments at FVTOCI |  | (1110) | (3525) | (3342) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reclassification to profit or loss of debt instruments at<br> FVTOCI on derecognition |  | (21) | 71 | (58) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exchange differences on translation of foreign operations | 28 | 11 | (10) | (10) |
| **Total other comprehensive income (loss) for the year, net of tax** |  | (1120) | (3464) | (3410) |
| **Total comprehensive income (loss) for the year, net of tax** |  | (1950) | 35693 | 114400 |
| **Total comprehensive income (loss) for the year, net of<br> tax attributable to** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Owners of the parent company |  | (3361) | 35910 | 112390 |
| &nbsp;&nbsp;&nbsp;Non-controlling interests |  | 1411 | (217) | 2010 |

---

*See Notes to Consolidated Financial Statements*

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**Consolidated Statements of Changes in Equity**

**For the year ended March 31, 2024**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  |  |  |  |  |  | *(In millions of yen)* | *(In millions of yen)* |
|  |  | **Equity attributable to owners of the parent company** | **Equity attributable to owners of the parent company** | **Equity attributable to owners of the parent company** | **Equity attributable to owners of the parent company** | **Equity attributable to owners of the parent company** |  |  |
|  | **Notes** | **Issued<br>capital** | **Share<br>premium** | **Accumulated<br>deficit** | **Accumulated<br>other<br>comprehensive<br>loss** | **Total** | **Non-<br>controlling <br>interests** | **Total<br>shareholders'<br>equity** |
| **Balance as of April 1, 2023** |  | 116452 | 17972 | (62259) | (108) | 72057 | 119483 | 191540 |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss for the year |  |  |  | (3350) |  | (3350) | 2520 | (830) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other comprehensive loss | 28 |  |  |  | (11) | (11) | (1109) | (1120) |
| **Total comprehensive income (loss) for the year** |  |  |  | (3350) | (11) | (3361) | 1411 | (1950) |
| &nbsp;&nbsp;&nbsp;&nbsp;Dividends paid to non-controlling interests <sup>(1)</sup> | 29 |  |  |  |  |  | (1604) | (1604) |
| &nbsp;&nbsp;&nbsp;&nbsp;Dividends paid to the ultimate parent company <sup>(1)</sup> | 29 |  |  | (179) |  | (179) |  | (179) |
| &nbsp;&nbsp;&nbsp;&nbsp;Transfer from issued capital to share premium <sup>(2)</sup> |  | (22272) | 22272 |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Transfer from share premium<br> to accumulated deficit <sup>(2)</sup> |  |  | (22272) | 22272 |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Changes in interests in subsidiaries <sup>(1)</sup> |  |  | (3355) |  |  | (3355) | 6799 | 3444 |
| **Total transactions with owners and other transactions** |  | (22272) | (3355) | 22093 |  | (3534) | 5195 | 1661 |
| **Balance as of March 31, 2024** |  | 94180 | 14617 | (43516) | (119) | 65162 | 126089 | 191251 |

---

(1)In relation to business combination of entities under common control, any equity transactions undertaken by subsidiaries under common control with entities outside of the Company and its subsidiaries before the date of the actual transaction by the Company are included within "Dividends paid to the ultimate parent company", "Dividends paid to non-controlling interests" and "Changes in interests in subsidiaries".

(2)These transfers were carried out to offset the accumulated deficit of the Company. Refer to Note 28, *Issued Capital and Reserves* for details.

*See Notes to Consolidated Financial Statements*

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**For the year ended March 31, 2025** 

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  |  |  |  |  |  | *(In millions of yen)* | *(In millions of yen)* |
|  |  | **Equity attributable to owners of the parent company** | **Equity attributable to owners of the parent company** | **Equity attributable to owners of the parent company** | **Equity attributable to owners of the parent company** | **Equity attributable to owners of the parent company** |  |  |
|  | **Notes** | **Issued<br>capital** | **Share<br>premium** | **Accumulated<br>deficit** | **Accumulated<br>other<br>comprehensive<br>loss** | **Total** | **Non-<br>controlling<br>interests** | **Total<br>shareholders'<br>equity** |
| **Balance as of April 1, 2024** |  | 94180 | 14617 | (43516) | (119) | 65162 | 126089 | 191251 |
| &nbsp;&nbsp;&nbsp;&nbsp;Profit for the year |  |  |  | 36170 |  | 36170 | 2987 | 39157 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other comprehensive loss | 28 |  |  |  | (260) | (260) | (3204) | (3464) |
| **Total Comprehensive income (loss) for the year** |  |  |  | 36170 | (260) | 35910 | (217) | 35693 |
| &nbsp;&nbsp;&nbsp;&nbsp;Dividends paid to non-controlling interests <sup>(1)</sup> | 29 |  |  |  |  |  | (2519) | (2519) |
| &nbsp;&nbsp;&nbsp;&nbsp;Dividends paid to the ultimate parent company <sup>(1)</sup> | 29 |  |  | (283) |  | (283) |  | (283) |
| &nbsp;&nbsp;&nbsp;&nbsp;Transfer from issued capital to share premium <sup>(2)</sup> |  | (2746) | 2746 |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Transfer from share premium<br> to accumulated deficit <sup>(2)</sup> |  |  | (2746) | 2746 |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Changes in interests in subsidiaries <sup>(1)</sup> |  |  | (485) |  |  | (485) | 485 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Other |  |  | (405) | (4) |  | (409) | (2) | (411) |
| **Total transactions with owners and other transactions** |  | (2746) | (890) | 2459 |  | (1177) | (2036) | (3213) |
| **Balance as of March 31, 2025** |  | 91434 | 13727 | (4887) | (379) | 99895 | 123836 | 223731 |

---

(1)In relation to business combination of entities under common control, any equity transactions undertaken by subsidiaries under common control with entities outside of the Company and its subsidiaries before the date of the actual transaction by the Company are included within "Dividends paid to the ultimate parent company", "Dividends paid to non-controlling interests" and "Changes in interests in subsidiaries".

(2)These transfers were carried out to offset the accumulated deficit of the Company. Refer to Note 28, *Issued Capital and Reserves* for details.

*See Notes to Consolidated Financial Statements*

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**For the year ended March 31, 2026**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  |  |  |  |  | *(In millions of yen)* | *(In millions of yen)* | *(In millions of yen)* |
|  |  | **Equity attributable to owners of the parent company** | **Equity attributable to owners of the parent company** | **Equity attributable to owners of the parent company** | **Equity attributable to owners of the parent company** |  |  |  |
|  | **Notes** | **Issued<br>capital** | **Share<br>premium** | **Retained<br>earnings** | **Accumulated<br>other<br>comprehensive<br>loss** | **Total** | **Non-<br>controlling<br>interests** | **Total<br>shareholders'<br>equity** |
| **Balance as of April 1, 2025** |  | 91434 | 13727 | (4887) | (379) | 99895 | 123836 | 223731 |
| &nbsp;&nbsp;&nbsp;&nbsp;Profit for the year |  |  |  | 115034 |  | 115034 | 2776 | 117810 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other comprehensive loss |  |  |  |  | (2644) | (2644) | (766) | (3410) |
| **Total Comprehensive income (loss) for the year** |  |  |  | 115034 | (2644) | 112390 | 2010 | 114400 |
| &nbsp;&nbsp;&nbsp;&nbsp;Dividends paid to non-controlling interests <sup>(1)</sup> | 29 |  |  |  |  |  | (2909) | (2909) |
| &nbsp;&nbsp;&nbsp;&nbsp;Dividends paid to the ultimate parent company <sup>(1)</sup> | 29 |  |  | (311) |  | (311) |  | (311) |
| &nbsp;&nbsp;&nbsp;&nbsp;Issuance of new shares | 28 | 109201 | 107818 |  |  | 217019 |  | 217019 |
| &nbsp;&nbsp;&nbsp;&nbsp;Issuance of share acquisition rights |  |  | 2014 |  |  | 2014 |  | 2014 |
| &nbsp;&nbsp;&nbsp;&nbsp;Changes due to business combinations of entities<br> under common control - PayPay Securities<br> Corporation and PayPay Bank Corporation | 7 |  | (36827) |  |  | (36827) | (86358) | (123185) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other |  |  | (2) | 33 | (32) | (1) | 3 | 2 |
| **Total transactions with owners and other transactions** |  | 109201 | 73003 | (278) | (32) | 181894 | (89264) | 92630 |
| **Balance as of March 31, 2026** |  | 200635 | 86730 | 109869 | (3055) | 394179 | 36582 | 430761 |

---

*See Notes to Consolidated Financial Statements*

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**Consolidated Statements of Cash Flows**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  |  | *(In millions of yen)* | *(In millions of yen)* | *(In millions of yen)* |
|  |  | **For the year ended** | **For the year ended** | **For the year ended** |
|  | **Notes** | **March 31, 2024** | **March 31, 2025** | **March 31, 2026** |
| **Cash flows from (used in) operating activities** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Profit before tax |  | 11 | 34961 | 79945 |
| &nbsp;&nbsp;&nbsp;&nbsp;Adjustments for: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 14, 15, 16, 30 | 18591 | 21391 | 25482 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss on disposal of property and equipment and intangible assets | 14, 16 | 1495 | 696 | 1338 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Share-based payment expenses | 35 |  |  | 1847 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other income and costs |  | (1552) | 618 | (1517) |
| &nbsp;&nbsp;&nbsp;&nbsp;Changes in assets and liabilities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Guarantee deposits | 9 | (39594) | 77656 | 170090 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Call loans |  | (18083) | 53083 | 22986 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | 10 | 50350 | (3266) | (9327) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loans and advances to customers | 11 | (311125) | (399055) | (585244) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Securities | 12 | (45476) | (31256) | (72277) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deposits | 20 | 260400 | 249362 | 566556 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | 21 | 130744 | 145558 | 173856 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other financial assets |  | (4204) | 1890 | (7005) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other financial liabilities | 23 | 9759 | 2327 | 13393 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provisions | 24 | 4438 | (1864) | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other |  | (1913) | 10030 | 6865 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Cash provided by operations** |  | 53841 | 162131 | 386994 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income tax paid |  | (4472) | (6870) | (12573) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income tax refunded |  | 606 | 588 | 876 |
| **Net cash provided by operating activities** |  | 49975 | 155849 | 375297 |
| **Cash flows from (used in) investing activities** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchases of securities | 12 | (437408) | (463314) | (779962) |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from sales/redemption of securities | 12 | 189836 | 177885 | 189284 |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchases of property and equipment | 14 | (4584) | (4822) | (6369) |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchases of intangible assets | 16 | (17911) | (17264) | (17823) |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from withdrawal of deposits with a related party | 38 | 600000 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Payments of deposits with a related party | 38 | (600000) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Payment for acquisition of subsidiaries | 7 |  | (5759) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchase of investment accounted for using the equity method |  |  | (1360) | (11655) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other |  | (3316) | (5343) | (2302) |
| **Net cash used in investing activities** |  | (273383) | (319977) | (628827) |

---

*See Notes to Consolidated Financial Statements*

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---

| | | | | |
|:---|:---|:---|:---|:---|
| **Cash flows from (used in) financing activities** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net increase (decrease) in short-term borrowings | 22 | 30000 | (128700) | 199982 |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from long-term borrowings | 22 | 595100 | 842300 | 722600 |
| &nbsp;&nbsp;&nbsp;&nbsp;Repayments of long-term borrowings | 22 | (516422) | (917898) | (757203) |
| &nbsp;&nbsp;&nbsp;&nbsp;Repayments of lease liabilities | 22 | (2409) | (2820) | (2744) |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from issuance of new common shares |  | 3444 |  | 217522 |
| &nbsp;&nbsp;&nbsp;&nbsp;Payments for the purchase of the equity interest of subsidiaries,<br> through business combinations of entities under common control | 7 |  |  | (130185) |
| &nbsp;&nbsp;&nbsp;&nbsp;Dividends paid to non-controlling interests | 29 | (1604) | (2519) | (2909) |
| &nbsp;&nbsp;&nbsp;&nbsp;Dividends paid to the ultimate parent company | 29 | (179) | (283) | (311) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other |  |  | (405) |  |
| **Net cash provided by (used in) financing activities** |  | 107930 | (210325) | 246752 |
| **Effect of exchange rate changes on cash and cash equivalents** |  | 488 | (59) | 50 |
| **Decrease in cash and cash equivalents** |  | (114990) | (374512) | (6728) |
| **Cash and cash equivalents at the beginning of the year** | 8 | 859313 | 744323 | 369811 |
| **Cash and cash equivalents at the end of the year** | 8 | 744323 | 369811 | 363083 |

---

*See Notes to Consolidated Financial Statements*

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Notes to Consolidated Financial Statements

**1. Reporting Entity**

PayPay Corporation (the "Company", "we", "us", or "our") was incorporated in June 2018 in Japan as a corporation (*kabushiki kaisha*) in accordance with the Companies Act of Japan (the "Companies Act"). The Company's registered office is located at 1-3, Kioicho, Chiyoda-ku, Tokyo, Japan. The Company's consolidated financial statements are comprised of the Company and its subsidiaries (collectively, the "Group"). The Group is composed of two reportable segments: Payment segment and Financial service segment. Payment segment includes payment settlement services and related services through our PayPay app, and credit payment settlement services such as revolving and installment payment options and cash advances. Financial service segment includes internet banking services, securities intermediary services and PayPay Point investment-related services, and loan management services.

On October 1, 2023, Z Holdings Corporation, a shareholder of the Company, carried out intra-group reorganizations with its wholly owned subsidiaries mainly including LINE Corporation and Yahoo Japan Corporation, and changed its name to LY Corporation. All the transactions and events pertaining to LY Corporation including those which occurred prior to the name change are referred to as those of LY Corporation in the following notes.

The Company is 47.1% owned directly by B Holdings Corporation, 28.5% by SVF II Piranha (DE) LLC, 7.5% by LY Corporation and 7.5% by SoftBank Corp. The ultimate parent company of the Company is SoftBank Group Corp. ("SBG").

The intermediate parent of the Company is B Holdings Corporation, which is owned by SBG through the following entities: LY Corporation, A Holdings Corporation, and SoftBank Corp.

The following diagram illustrates our corporate structure as of March 31, 2026. Certain entities that are immaterial to our results of operations, business and financial condition are omitted.

![img261977339_3.jpg](img261977339_3.jpg)

In April 2025, the Company acquired shares of PayPay Securities Corporation and PayPay Bank Corporation, which had been under common control of SBG and made both subsidiaries of the Company. The acquisitions of PayPay Securities Corporation and PayPay Bank Corporation were accounted for by the pooling of interests method as business combinations under common control. The Group's consolidated financial statements are retrospectively adjusted to reflect the consolidation of PayPay Bank Corporation and PayPay Securities Corporation from April 1, 2022. Refer to Note 7, *Business Combinations* for further details.

**2. Basis of Preparation**

(1)Compliance with IFRS<sup>®</sup> Accounting Standards

The Group's consolidated financial statements have been prepared on a going concern basis in accordance with IFRS® Accounting Standards ("IFRS") issued by the International Accounting Standards Board ("IASB"). The term "IFRS" also includes International Accounting Standards ("IASs") and the related interpretations of the interpretations committees (Standing Interpretations Committee ("SIC") and IFRS Interpretations Committee ("IFRIC")).

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(2)Basis of Measurement

The Group's consolidated financial statements have been prepared on a historical cost basis except for items such as financial instruments measured at fair value as described in Note 3, *Material Accounting Policies,* and business combinations under common control accounted for using the book value in the ultimate parent company's consolidated financial statements.

(3)Functional Currency and Presentation Currency

Unless otherwise indicated, the Group's consolidated financial statements are presented in Japanese yen, which is both the functional currency of the Company and presentation currency of the Group, and amounts are rounded to the nearest million Japanese yen.

**3. Material Accounting Policies**

(1)Basis of Consolidation

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Subsidiaries

Subsidiaries are entities controlled by the Company. The consolidated financial statements include the accounts of the Group, which are directly or indirectly controlled by the Company (or the Group). Control is generally conveyed by ownership of the majority of voting rights. The Group controls an entity when the Group has power over the entity, is exposed, or has rights, to variable returns from the involvement with the entity and has the ability to affect those returns through its power over the entity. The Group reassesses whether it controls an entity if facts and circumstances indicate that there are changes to one or more of the elements of control.

The subsidiaries' financial statements are consolidated from the date when control is acquired (the "acquisition date") until the date when control is lost. For the accounting policies for business combinations of entities under common control, refer to the section below (2) *Business Combinations*.

When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with the Group's accounting policies. Non-controlling interests in a subsidiary are accounted for separately from the parent's ownership interests in a subsidiary. Profit or loss and each component of other comprehensive income are attributed to the owners of the parent company and non-controlling interests, even if this results in the non-controlling interests having a deficit balance. A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. Any difference between the adjustment to the non-controlling interests and the fair value of the consideration paid or received is recognized directly in shareholders' equity as equity attributable to the owners of the parent company.

Inter-company balances and transactions have been eliminated upon consolidation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Associates

Associates are entities over which the Group has a significant influence over the decisions on financial and operating policies, but does not have control. Investments in associates are accounted for using the equity method. Under the equity method, the investment is initially recognized at cost from the date of acquisition and adjusted thereafter to recognize the Group's interest in profit or loss and other comprehensive income. When necessary, adjustments are made to the financial statements of associates to bring their accounting policies in line with the Group's accounting policies.

If the share of losses of associates equals or exceeds the interest in the associates, the Group discontinues recognizing its share of further losses. The interest in associates is the carrying amount of the investment in the associates determined using the equity method together with any long-term interests that, in substance, form part of the net investment in the associates.

After the interest is reduced to zero, additional losses are provided for, and a liability is recognized, only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associates. If the associate subsequently reports profits, the Group resumes recognizing its share of those profits only after its share of the profits equals the share of losses not recognized.

Gains and losses resulting from "upstream" and "downstream" transactions between the Group and its associate are recognized only to the extent of unrelated investors' interests in the associates.

Any excess in the cost of the acquisition of associates over the Group's interest of the net fair value of the identifiable assets and liabilities recognized at the date of acquisition is recognized as goodwill and included in the carrying amount of the investments in the associates.

Since goodwill is not separately recognized, it is not tested for impairment separately. Instead, the entire carrying amount of investments in associates, including goodwill, is tested for impairment test as a single asset whenever objective evidence indicates that the investment may be impaired.

When use of the equity method is discontinued from the date when the investees are determined to be no longer associates, any gain or loss on such disposal of the investment is recognized in profit or loss.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)Structured Entities

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Structured entities are entities designed so that voting or similar rights are not the dominant factor in determining who controls the entity. The Company has control and, therefore, consolidates structured entities when the Company has exposure or rights to variable returns and has the ability to use its power over the structured entity to affect returns.

(2)Business Combinations

Business combinations are accounted for using the acquisition method at the acquisition date, except acquisitions under common control which are outside the scope of IFRS 3 "Business Combinations" ("IFRS 3").

The consideration transferred in business combinations is measured at fair value, which is calculated as the sum of the acquisition-date fair values of assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree, and the equity interest issued by the Group in exchange for control of the acquiree. Acquisition-related costs are recognized in profit or loss as incurred.

At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognized at their fair value, except for the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•deferred tax assets or liabilities and assets or liabilities related to employee benefits are recognized and measured in accordance with IAS 12 "Income Taxes" and IAS 19 "Employee Benefits," respectively;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•liabilities or equity instruments related to share-based payment arrangements of the acquiree or share-based payment arrangements of the Group entered into to replace share-based payment arrangements of the acquiree are measured in accordance with IFRS 2 "Share-based Payment," at the acquisition date; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•assets or disposal groups that are classified as held for sale are measured in accordance with IFRS 5 "Non-current Assets Held for Sale and Discontinued Operations."

The excess of the consideration transferred and the amount of any non-controlling interest in the acquiree over the fair value of the identifiable net assets acquired at the acquisition date is recorded as goodwill. If the consideration transferred and the amount of any non-controlling interest in the acquiree is less than the fair value of the identifiable net assets of the acquired subsidiary, the difference is immediately recognized in profit or loss.

On an acquisition-by-acquisition basis, the Group chooses a measurement basis of non-controlling interests at either fair value or the proportionate share of the recognized amount of the acquiree's identifiable net assets. When a business combination is achieved in stages, the Group's previously held interest in the acquiree is remeasured at fair value at the acquisition date and is accounted for in the same way that the Group has disposed of the interest in the acquiree. The amounts arising from changes in the value of interests in the acquiree prior to the acquisition date that have previously been recognized in other comprehensive income are accounted for in the same way that the Group has disposed of the interest in the acquiree.

If the initial accounting for a business combination is incomplete by the end of the fiscal year, the Group reports in its consolidated financial statements provisional amounts for the items for which the accounting is incomplete. The Group retrospectively adjusts the provisional amounts recognized at the acquisition date as an adjustment during the measurement period when it acquires new information about facts and circumstances that existed as of the acquisition date that, if known, would have affected the recognized amounts for the business combination. The measurement period shall not exceed one year from the acquisition date.

Business combinations under common control are not under the scope of IFRS 3. In accordance with IAS 8 "Accounting Policies, Changes in Accounting Estimates and Errors", management is required to develop an accounting policy in the absence of an IFRS that specifically applies to such transactions. The Group elected to apply the pooling of interests method, recognizing the effects of the business combination under common control. For business combinations between entities under common control (all of the combining companies or businesses are ultimately controlled by the same party or parties both before and after the business combination, and the control is not transitory), the Group accounts for those transactions based on the book value of the ultimate parent company, and regardless of the actual date of the transaction under common control, retrospectively consolidates the financial statements of the acquired companies as if they had always been combined to the earliest comparative period or from the date in which the ultimate parent company acquired those businesses, if later than the beginning of the earliest comparative period. Non-controlling interest is calculated for all periods presented using the same percentage of ownership calculated by our ultimate parent. Payment for the purchase of the equity interest of subsidiary, through business combinations under common control, is presented in cash flows from financing activities in the Consolidated Statement of Cash Flows.

(3)Foreign Currency Translation

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Transactions denominated in foreign currencies

Transactions in currencies other than the functional currency (foreign currencies) are recognized at the rates of exchange prevailing on the dates of the transactions. At each reporting date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Exchange differences are recognized in profit or loss in the period in which they arise.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Foreign operations

For the purposes of presenting these consolidated financial statements, the assets and liabilities of the Group's foreign operations are translated into Japanese yen using exchange rates prevailing at the dates of the consolidated statements of financial position presented. Income and expense items are translated into Japanese yen using the rates at the dates of the transaction or the average exchange rates for the period. Exchange differences arising from translating the financial statements of foreign operations are recognized in other comprehensive income and cumulative differences are included in accumulated other comprehensive income.

(4)Financial Instruments

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Recognition

Financial assets and financial liabilities are recognized in the Group's Consolidated Statements of Financial Position when the Group becomes a party to the contractual provisions of the instrument.

Financial assets and financial liabilities are initially measured at fair value, except for accounts receivable that do not have a significant financing component, which are measured at the transaction price. Transaction costs that are directly attributable to the acquisition or issuance of financial assets and financial liabilities (other than financial assets and financial liabilities measured at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities measured at fair value through profit or loss are recognized immediately in profit or loss.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Non-derivative Financial Assets

Non-derivative financial assets are classified as either financial assets measured at amortized cost, debt instruments measured at fair value through other comprehensive income ("FVTOCI") or financial assets measured at fair value through profit or loss ("FVTPL"). The classification of financial assets is determined at the date of initial recognition, depending on the nature and characteristics as well as the purpose of obtaining those financial assets.

All regular way purchases or sales of financial assets are recognized and derecognized using trade date accounting. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)Financial assets measured at amortized cost

Financial assets that meet the following conditions are measured subsequently at amortized cost:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

The amortized cost of a financial asset is the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus the cumulative amortization using the effective interest method of any difference between that initial amount and the maturity amount.

The effective interest method is a method of calculating the amortized cost of a financial instrument and of allocating interest income or expense over the relevant period. The effective interest rate is the rate that discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial instrument, or (where appropriate) a shorter period, to the amortized cost of a financial instrument.

The gross carrying amount of a financial asset is the amortized cost of a financial asset before adjusting for any loss allowance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)Debt instruments measured at FVTOCI

Debt instruments that meet the following conditions are measured subsequently at FVTOCI:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling the financial assets; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

After initial recognition, debt instruments measured at FVTOCI are measured at fair value and the valuation gains and losses resulting from changes in fair value are recognized in other comprehensive income. Subsequently, changes in the carrying amount because of foreign exchange gains and losses, impairment gains or losses are recognized in profit or loss.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C)Financial assets measured at FVTPL

Financial assets that are not classified as financial assets measured at amortized cost or debt instruments measured at FVTOCI are measured at FVTPL. Financial assets measured at FVTPL are measured at fair value at the end of each reporting period, with gains or losses from change in fair value recognized in profit or loss.

Dividend from equity instruments is recognized in Gains (losses) on financial instruments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D)Impairment of financial assets

The Group recognizes a loss allowance for financial assets measured at amortized cost, debt instruments measured at FVTOCI and undrawn loan commitments. At each reporting date, the Group assesses whether credit risk associated with financial assets has increased significantly since initial recognition. Whether the credit risk associated with a financial asset has increased significantly since initial recognition is determined by reviewing the risk of default each reporting date and comparing it with the risk of default at the time of initial recognition. If the credit risk on the financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month expected credit losses ("ECL") (Stage 1). In addition, the Group recognizes lifetime ECL when there has been a significant increase in credit risk since initial recognition (Stage 2 and Stage 3). For accounts receivable arising from transactions that are within the scope of IFRS 15 "Revenue from Contracts with Customers" ("IFRS 15") and that do not contain significant financing components, the Group applies the simplified approach under IFRS 9 "Financial Instruments" ("IFRS 9"), which requires expected lifetime ECL to be measured from initial recognition.

The Group considers that default has occurred mainly when a financial asset is more than 90 days past due, when the contractual conditions have been modified, or when the obligor is experiencing significant financial difficulty unless the Group has reasonable and supportable information to demonstrate that a more stringent default criterion is more appropriate.

ECLs are estimated in a way that reflects the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•An unbiased, probability-weighted amount calculated by evaluating a range of possible outcomes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The time value of money; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Reasonable and supportable information that is available without undue cost or effort at the reporting date about past events, current conditions, and forecasts of future economic conditions.

The Group takes into account not only historical information but also reasonably expected future events and other factors. Specifically, the Group calculates the ECLs by using the average probability of default ("PD") and loss given default ("LGD") based on the historical data of PD and LGD during certain past periods, where PD and LGD are expected to remain at levels approximately consistent with those observed during such past periods. In addition, when various macroeconomic indicators are expected to deteriorate in the future and the PD and LGD are expected to increase, the Group adjusts PD and LGD by using macroeconomic indicators, such as unemployment rates, which are correlated with ECL.

The amount of ECL is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument. The Group recognizes an impairment gain or loss in profit or loss for financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account. The amount of reversal with respect to previously recorded impairment loss is also recognized in profit or loss.

The carrying amount of a financial asset is written off against the allowance for doubtful accounts when the Group has no reasonable expectations of recovering the financial asset in its entirety or a portion thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(E)Derecognition of financial assets

The Group derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred to another entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred financial asset, the Group recognizes its retained interest in the financial asset and its associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognize the financial asset and recognizes a collateralized borrowing for the proceeds received.

When derecognizing a financial asset measured at amortized cost, the difference between the asset's carrying amount and the sum of the consideration received and receivable is recognized in profit or loss. In addition, when derecognizing an investment in a debt instrument classified as at FVTOCI, the cumulative gain or loss previously recorded in the investment's revaluation reserve in accumulated other comprehensive income is reclassified to profit or loss.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)Non-derivative Financial Liabilities

Non-derivative financial liabilities are classified as either financial liabilities measured at FVTPL or financial liabilities measured at amortized cost. Classification of non-derivative financial liabilities is determined at the date of initial recognition. When the transaction price of the non-derivative financial liabilities differs from the fair value at initial recognition and the fair value is based on a valuation technique that uses only observable market data, the Group recognizes the difference between the fair value at initial recognition and the transaction price as a gain or loss.

After initial recognition, the Group measures financial liabilities measured at FVTPL at fair value. Any gains and losses resulting from changes in fair value as well as interest expenses are recognized in profit or loss.

Financial liabilities measured at amortized cost are subsequently measured at amortized cost using the effective interest rate method.

The Group derecognizes financial liabilities when, and only when, the obligations are discharged, cancelled, or expired. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in profit or loss.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)*PayPay Balance and Other Items*

PayPay Balance and Other Items refers to deposits by users of PayPay Settlement Services (the "PayPay Users") and points accrued by PayPay Users in our PayPay Points program.

The Group records financial liabilities related to PayPay Balance and Other Items as Deposits on the Group's Consolidated Statements of Financial Position because they represent a current obligation to return the cash deposited or to pay for purchases made by PayPay Users.

There are four types of transactions included as part of PayPay Balance and Other Items: PayPay Money, PayPay Money Lite, PayPay Points, and PayPay Gift Voucher.

PayPay Money and PayPay Money Lite are topped up with cash by PayPay Users whereas PayPay Points are awarded through promotions and campaigns rather than topped up by PayPay Users. PayPay Gift Voucher is granted to PayPay Users in accordance with the contracts made between the Group and certain merchants.

PayPay Users can withdraw the balance in PayPay Money, but not balances in PayPay Money Lite, PayPay Points and PayPay Gift Voucher. PayPay Money and PayPay Money Lite are deemed deposits in accordance with the Act on Settlement of Funds (Act No. 59 of June 24, 2009, hereinafter referred to as the "Payment Services Act") of Japan.

When an entity becomes subject to the Payment Services Act, it is legally required to make a deposit, and as a result, guarantee deposits are recorded on the Group's Consolidated Statements of Financial Position. Refer to Note 9, *Guarantee Deposits* for details.

In the event that the Group discontinues its operations, it is required to refund the balance of PayPay Money, PayPay Money Lite and PayPay Gift Voucher in cash.

When PayPay Points are granted to PayPay Users, the Group accounts for those either as point expenses or as a deduction of revenue, based on the judgment on whether those are consideration payable to a customer. Refer to revenue recognition policy section below at (15) *Revenue* for further details.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)*PayPay Point Investment Service*

PayPay Users can choose to convert their PayPay Points to "PayPay Investment Points." PayPay Investment Points are financial obligations indexed to the performance of certain exchange traded funds ("ETFs"). Whenever a PayPay User sells a part or the whole of their PayPay Investment Points, the consideration is immediately converted back to PayPay Points.

PayPay Investment Points are accounted for as hybrid financial liabilities and the embedded derivatives related to the indexation to ETFs are bifurcated from the host contracts. The host deposit contracts are measured at amortized cost while the embedded derivatives are measured at FVTPL.

PayPay Investment Points are included in Deposits in the Group's Consolidated Statements of Financial Position and changes in the value of PayPay Investment Points based on the chosen index are recognized in Gains (losses) on financial instruments in the Group's Consolidated Statements of Profit or Loss.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)Derivative instruments

Derivative instruments are financial instruments whose value is derived from underlying variables such as equity prices, interest rates, foreign exchange rates, or other indices. The Group utilizes derivative instruments, including foreign exchange margin trading, forward contracts and futures, primarily to manage exposure to interest rate risk and foreign exchange risk.

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Derivatives are initially recognized at fair value and are subsequently measured at FVTPL, as the Group does not apply hedge accounting. Derivatives are presented as assets when their fair value is positive and as liabilities when their fair value is negative. Embedded derivatives in financial liabilities are separated from the host contract and accounted for as derivatives when they are not closely related to the host contract and meet the definition of derivative.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)Offsetting Financial Assets and Financial Liabilities

Financial assets and financial liabilities are offset, and the net amount is presented in the Group's Consolidated Statements of Financial Position when and only when the Group has a legally enforceable right to offset the recognized amounts and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)Call loans

Call loans represent inter-bank loans, measured at amortized cost. The fair values of call loans are considered to approximate the carrying amount. Impairment is assessed at each reporting date, with any losses recognized in profit or loss.

(5)Cash and Cash Equivalents

Cash and cash equivalents comprise cash in hand, demand deposits, and short-term investments with an original maturity of three months or less that are readily convertible to a known amount of cash, and which are subject to an insignificant risk of changes in value. Cash deposits for group financing are not classified as cash equivalents because they can be withdrawn only upon the consent of LY Corporation.

(6)Property and Equipment (Excluding Right-of-use Assets)

Property and equipment are recorded and measured at cost and carried at its cost less accumulated depreciation and accumulated impairment losses, if any. The cost of an item of property and equipment includes any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. The cost includes borrowing costs directly attributed to the acquisition, construction, or production of a qualifying asset, if any. Refer to the section below (8) *Borrowing Costs* for details of borrowing cost capitalization policy.

The depreciable amount of property and equipment is determined after deducting its estimated residual value from the historical cost, and it is depreciated using the straight-line method over the useful life. The estimated useful lives of major assets owned by the Group are as follows:

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| | |
|:---|:---|
|  | **Estimated<br>useful lives<br>(years)** |
| Leasehold improvements | 1-18 |
| Furniture and fixtures | 1-20 |

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The residual values and estimated useful lives are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

(7)Intangible Assets

Intangible assets with finite useful lives that are acquired separately and internally generated intangible assets are carried at cost less accumulated amortization and accumulated impairment losses, if any. Intangible assets also include the asset that is related to customer relationships which is acquired in a business combination, and such asset is recognized only when it is probable that the future economic benefits that are attributed to the asset will flow to the Group and the cost of the asset can be reliably measured. The amount of initial recognition for internally generated intangible assets is the sum of the expenditures incurred during the development period, where the development period starts from the date when technical and commercial feasibility of the asset have been established, and ends when the development is completed. The costs include borrowing costs directly attributable to the acquisition, construction, or production of a qualifying asset, if any. Refer to the section below (8) *Borrowing Costs* for details of borrowing cost capitalization policy. Amortization is recognized on a straight-line basis over their estimated useful lives.

The estimated useful lives of the major intangible assets owned by the Group are as follows:

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| | |
|:---|:---|
|  | **Estimated<br>useful lives<br>(years)** |
| Internally generated software | 1-15 |
| Externally acquired software | 1-5 |
| Customer relationship intangible assets | 10-15 |

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The estimated useful lives are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired separately are carried at cost less accumulated impairment losses, if any. There are no intangible assets with indefinite useful lives.

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*Research and development*

Expenditures on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, are recognized in profit or loss as incurred. Development expenditures are capitalized only if development costs can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable, and the Group intends to and has sufficient resources to complete development and to use or sell the asset. Other development expenditures are recognized in profit or loss as incurred.

(8)Borrowing Costs

The Group capitalizes borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset as part of the cost of that asset. Other borrowing costs are expensed as incurred. A qualifying asset is an asset that requires a substantial period of time to get ready for its intended use or sale.

When the Group borrows funds specifically for the purpose of acquiring a qualifying asset, the Group determines the amount of borrowing costs eligible for capitalization as the actual borrowing costs incurred on that borrowing during the period less any investment income on the temporary investment of those borrowings.

When the Group borrows funds generally and uses them for the purpose of acquiring a qualifying asset, the Group determines the amount of borrowing costs eligible for capitalization by applying a capitalization rate to the expenditures on that asset, which is the effective interest rate of the general borrowing. The capitalization rate is the weighted average of the borrowing costs applicable to all the borrowings of the Group that are outstanding during the period, other than borrowings made specifically for the purpose of acquiring other qualifying assets until substantially all the activities necessary to prepare that asset for its intended use or sale are complete. The amount of borrowing costs that the Group capitalizes during a period does not exceed the amount of borrowing costs incurred during that period.

(9)Leases

The Group assesses whether a contract is, or contains, a lease, at inception. If the contract transfers the right to control the use of the identified assets in exchange for consideration for a period of time, the contract is, or contains, a lease.

*Group as lessee*

The Group recognizes a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for those with a term of one year or less (the "short-term leases"), and leases of low-value assets.

For leases or contracts that include leases, the Group accounts for the lease components separately from the non-lease components by allocating the consideration in the contract based on the ratio of the independent price of the lease component to the aggregate independent prices of the lease and non-lease components.

The right-of-use assets comprise the initial measurement of the corresponding lease liabilities, lease payments made at or before the commencement days, less any lease incentives received and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses, if any. Depreciation begins at the commencement date of the lease and is generally calculated using the straight-line method over the shorter of the lease term and the estimated useful life of the right-of-use asset. However, if the transfer of ownership of the underlying asset is certain, or if it is reasonably certain that a purchase option will be exercised, depreciation is calculated using the straight-line method over the estimated useful life of the underlying asset.

Whenever the Group incurs an obligation for costs to dismantle and remove a leased asset, restore the site on which it is located or restore the underlying asset to the condition required by the terms and conditions of the lease, a provision is recognized and measured in accordance with IAS 37 "Provisions, Contingent Liabilities and Contingent Assets." To the extent that the costs relate to a right-of-use asset, the costs are included in the related right-of-use asset.

The Group does not recognize right-of-use assets for intangible asset leases.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses its incremental borrowing rate.

The lease liability is presented as a separate line in the Group's Consolidated Statements of Financial Position.

The total amount of lease payments included in the measurement of lease liabilities consists of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Fixed payments (including in-substance fixed payments), less any lease incentives receivable;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Amounts expected to be payable by the lessee under residual value guarantees;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The exercise price of a purchase option if the lessee is reasonably certain to exercise that option;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The lease payment for the option term if it is reasonably certain that the extension option will be exercised; and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease.

The lease liability is subsequently measured using the effective interest method by increasing the carrying amount to reflect interest on the lease liability and by reducing the carrying amount to reflect the lease payments made.

The Group remeasures the lease liability whenever:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The lease term has changed or there is a significant event or change in circumstances resulting in a change in the assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used), or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•A lease contract is modified, and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the effective date of the modification.

For short-term leases and leases of low value assets, the Group recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed.

(10)Impairment of Non-financial Assets

*Non-financial assets other than goodwill*

At the end of each reporting period, the Group reviews the carrying amounts of its non-financial assets to determine whether there is any indication that those assets have suffered an impairment loss. If such indication exists, the recoverable amount of the asset is estimated to determine the extent of the impairment loss if any.

Recoverable amount is the higher of fair value less costs of disposal and value in use. Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash-generating unit ("CGU") to which the asset belongs. A CGU is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or a CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or a CGU) is reduced to its recoverable amount. An impairment loss is recognized immediately in profit or loss.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or a CGU) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or a CGU) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss to the extent that it eliminates the impairment loss which has been recognized for the asset in prior years. Any increase in excess of original carrying amount is treated as a revaluation increase.

*Goodwill*

Goodwill acquired in a business combination is, from the acquisition date, allocated to each CGU or CGU group that is expected to benefit from the synergies arising from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to that CGU or CGU group. A CGU or CGU group to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the CGU or CGU group may be impaired. If the recoverable amount of the CGU or CGU group is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the CGU or CGU group and then to the other assets pro rata based on the carrying amount of each asset in the CGU or CGU group. Impairment losses are recognized in profit or loss, and impairment losses recognized for goodwill are not reversed in subsequent periods. On disposal of the relevant CGU or CGU group, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.

(11)Provisions

Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the reporting date, considering the risks and uncertainties surrounding the obligation. Where a provision is measured using

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the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows when the effect of the time value of money is material. The discount amount over time is recognized as a finance cost.

The Group's provisions include loss allowance for undrawn loan commitments. Refer to the section above (4) *Financial Instruments* for further details of loss allowance for undrawn loan commitments.

(12)Employee Benefits

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Short-term Employee Benefits

Short-term employee benefits are benefits that are expected to be settled wholly before twelve months after the end of the reporting period in which the employee provided services. A liability is recognized for short-term employee benefits on an accrual basis in the reporting period in which the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Other Long-term Employee Benefits

Liabilities recognized in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows in respect of services provided by employees up to the reporting date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)Post-employment Benefits

For defined contribution plans, when the employees render services, the contribution payables are recognized in profit or loss.

(13)Issued Capital and Share Premium

Common shares issued by the Company are recognized at the issue price in shareholders' equity. In addition, transaction costs directly attributable to the issuance of such equity instruments are deducted from shareholders' equity.

(14)Share-Based Payments

The Group has stock option plans and phantom stock awards as share-based payment awards. The stock option plans are classified as equity-settled share-based payments, whereas the phantom stock awards are classified as cash-settled share-based payments. These awards are conditional upon the achievement of business performance and service period of the employees until the performance condition is satisfied.

Equity-settled share-based compensation is measured at fair value at the grant date. The fair value of stock options is calculated using the Black-Scholes model, the Binomial model, Monte Carlo simulation and other methods. The expenses for share-based payments are charged based on the fair value determined at the grant date to operating expenses in the Group's Consolidated Statements of Profit or Loss based on most likely outcome of the performance condition, net of estimated forfeitures, over the vesting period for the services received as consideration for the stock option. At each reporting date, the Group revises its estimate of the number of stock options expected to vest because of the effect of non-market-based vesting conditions. The impact of the revision of the original estimates, if any, is recognized in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to share premium.

Cash-settled share-based payment is measured at the fair value of the liability incurred. The fair value of such liabilities is remeasured at the end of fiscal year and at the settlement date, utilizing valuation techniques such as the Black-Scholes model, the Binomial model, and Monte Carlo simulations, and changes in fair value are recognized in the Consolidated Statements of Profit or Loss.

(15)Revenue

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Major Revenue Streams

The Group's major revenue streams are as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)Transaction and service income

Transaction and service income represents Revenue from contracts with customers. This revenue mainly consists of a. Payment Settlement Services and b. Financial Services. The Group applies the five-step process in accordance with IFRS 15 to determine the appropriate manner and timing of revenue recognition.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Identify the contract with a customer (step 1)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Identify the performance obligations in the contract (step 2)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Determine the transaction price (step 3)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Allocate the transaction price to the performance obligations in the contract (step 4)

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Recognize revenue when the Group satisfies a performance obligation (step 5)

The Group recognizes revenue for the transfer of services that reflects the consideration to which the Group expects to be entitled to receive in exchange for the promised services. Revenue is measured based on the consideration promised for services provided in the ordinary course of business, less applicable consumption tax and other taxes, as well as consideration payable to a customer. Revenue of the Group does not include estimates of significant variable considerations or significant financing components. For most of the Group's principal revenue streams described below, revenue is recognized at a point in time and no material advance consideration is received from customers. Accordingly, transactions that give rise to contract liabilities are limited.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.Payment Settlement Services

Payment Settlement Services are composed of PayPay Settlement Services, Credit Payment Settlement Services and Acquiring Services, and Debit Payment Settlement Services.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•PayPay Settlement Services

The Group enters into Payment and Settlement Service Agreements with PayPay Merchants <sup>(1)</sup> who are determined to be our customer under IFRS 15 (step 1). PayPay Settlement Services generally include the following transactions and procedures within the Group, PayPay Merchant and PayPay User:

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| |
|:---|
| PayPay User funds their PayPay Balance and Other Items by various methods including ATM, bank transfer, and credit card issued by the Group. |
| PayPay User makes a purchase transaction and makes a payment to a PayPay Merchant by utilizing their PayPay Balance and Other Items or PayPay Credit <sup>(2)</sup> through our PayPay app. |
| PayPay Merchant provides the record of the purchase transaction between the PayPay Merchant and PayPay Users to the Group and the Group approves of the purchase transaction. |
| The Group is entitled to the settlement fee upon approval of each purchase transaction. The Group retains the fee and remits the net purchase transaction amount to the PayPay Merchant. |

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The Group's performance obligation is to provide payment settlement platform for transactions and support settlements of purchase transactions between PayPay Merchants and the PayPay Users in which the Group acts as the principal providing the payment settlement service (step 2). The Group charges settlement fee for a purchase transaction settled through our PayPay app based on the transaction amount and predetermined rate in accordance with the Payment and Settlement Services Agreement (step 3), which is applied to the single performance obligation noted above (step 4). The performance obligation is fulfilled upon approval of the purchase transaction and settlement of purchase transaction amount to the PayPay Merchant, in which the Group determines whether the settlement should be completed on our platform. The revenue is then recognized at a point in time when the performance obligation is fulfilled (step 5).

PayPay Settlement Services are included in the Payment segment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)PayPay Merchants are companies that the Group provides the PayPay Settlement Services platform to as a method of payment in their stores based on Payment and Settlement Service Agreements between the Group and the PayPay Merchants.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Under PayPay Credit, PayPay Users link and register their PayPay Card in our PayPay app. PayPay Users make payment by PayPay Credit to the PayPay Merchants, and PayPay Users will pay the transaction amount to PayPay Card due to the credit card closing date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Credit Payment Settlement Services and Acquiring Services

A credit card transaction generally includes the following procedures between credit card issuers, cardholders, credit card merchants, acquirers and payment processing networks such as VISA, Mastercard and JCB:

- A cardholder uses their credit card at a credit card merchant with the credit card issuer's authorization in a purchase transaction.

- The credit card merchant presents the purchase transaction data to an acquirer.

- The acquirer presents the purchase transaction data to the credit card issuer via the payment processing networks.

- The credit card issuer authorizes the purchase transaction and delivers funds for the settlement of the transaction amount to the acquirer, minus the interchange fee, via the payment processing networks.

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- The acquirer delivers funds received from the credit card issuer to settle the transaction amount to the credit card merchant, minus the merchant fee.

- The credit card issuer collects funds from the cardholder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(a) Credit Payment Settlement Services*

The Group, as the credit card issuer, enters into PayPay Card Comprehensive Merchant Agreements with credit card merchants, Credit Merchants Terms and Conditions with cardholders, and various credit card license agreements with payment processing networks (step 1). In accordance with these agreements, the Group agrees to provide credit card payment settlement services to credit card merchants, payment processing network, and cardholders so that cardholders can make purchases at the credit card merchants by using their credit card.

The Group issues a credit card, known as PayPay Card, in accordance with the license agreements with payment processing networks. When PayPay Card is used in a purchase transaction at a credit card merchant, the Group is involved in a purchase transaction as the credit card issuer and the Group provides Credit Payment Settlement Services.

For Credit Payment Settlement Services, the Group's performance obligation is to provide credit card payment settlement services, including transfer of purchase transaction data and authorization for a purchase transaction (step 2), to the credit card merchants, payment processing networks, and cardholders who are determined to be our customer under IFRS 15.

The Group charges settlement fee to credit card merchants and payment processing networks based on the transaction amount and the predetermined rate (step 3), which is applied to the single performance obligation above (step 4).

The performance obligation is fulfilled when the credit card settlement service is completed, specifically upon receipt of purchase transaction data from an acquirer and the purchase transaction is authorized (step 5). The settlement fee recognized by the Group as revenue pursuant to IFRS 15 under contracts related to Credit Payment Settlement Services is paid to the Group approximately within two months from the satisfaction of the performance obligation.

Credit Payment Settlement Services are included in the Payment segment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(b) Acquiring Services*

The Group enters into an Acquiring Services Agreement with credit card merchants who are determined to be our customer under IFRS 15 (step 1).

When a credit card issued by another credit card issuer is used to purchase goods or services at a credit card merchant, the Group is involved in such a purchase transaction as the acquirer and the Group provides Acquiring Services to the credit card merchant. The Group assists the credit card merchant to obtain the credit card issuer's authorization through the payment processing networks to process the purchase transaction by transferring purchase transaction data. The credit card merchant who receives a benefit from the service pays consideration to the Group in exchange.

The Group has a performance obligation to provide Acquiring Services by obtaining credit card issuer's authorization, transferring purchase transaction data, and processing the purchase transaction (step 2). The amount of revenue recognized by the Group is calculated based on the settlement amount of the purchase transaction and the predetermined rate, less interchange fees charged by the credit card issuer (step 3), which is applied to the single performance obligation above (step 4).

This performance obligation is fulfilled when the credit card issuer's authorization is obtained by the Group, after the receipt of the purchase transaction data from the credit card merchant (step 5).

The fee recognized by the Group as revenue pursuant to IFRS 15 under contracts related to Acquiring Services is paid approximately two business days after the time of satisfying the performance obligation. The cost of Acquiring Services, such as brand fee, charged by the payment processing networks, is recorded as commission fees within operating expenses.

Acquiring Services are included in the Payment segment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Debit Payment Settlement Services

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Debit card payment is a payment method where the amount is immediately deducted from the bank account at the time the payment is confirmed with the card.

Unlike credit card payments, there is no deferred payment element, and the amount used can only be paid within the balance available in the account.

A debit card transaction generally includes the following procedures between debit card issuers, cardholders, debit card merchants, acquirers and payment processing networks such as VISA.

- A cardholder uses their debit card at a debit card merchant with the debit card issuer's authorization in a purchase transaction. 

- The debit card merchant presents the purchase transaction data to an acquirer. 

- The acquirer presents the purchase transaction data to the debit card issuer via the payment processing networks. 

- The debit card issuer authorizes the purchase transaction and delivers funds for the settlement of the transaction amount to the acquirer, minus the interchange fee, via the payment processing networks. 

- The acquirer delivers funds received from the debit card issuer to settle the transaction amount to the debit card merchant, minus the merchant fee. 

- The debit card issuer collects funds from the cardholder at the same time as the withdrawal from the bank account immediately. 

The Group, as the debit card issuer, enters into License Agreements with payment processing networks (step 1). In accordance with the agreements, the Group agrees to provide debit card payment settlement services, which enable the debit card user to make a purchase transaction and payment by the debit card at merchant.

For Debit Payment Settlement Services, the Group's performance obligation is to provide debit card payment settlement services to payment processing networks who are determined to be customer under IFRS 15, including authorization for a purchase transaction and transfer of purchase transaction data (step 2).

The Group charges a fee for debit card payment settlement services arising from a purchase transaction settled by debit card, and the fee is calculated by multiplying the transaction amount by the predetermined rate (step 3), which is applied to the single performance obligation above (step 4).

The performance obligation is fulfilled when the service is completed, specifically upon receipt of transaction data from an acquirer (step 5). The fee recognized by the Group as revenue pursuant to IFRS 15 under contracts related to Debit Payment Settlement Services is paid to the Group approximately within two months from the satisfaction of the performance obligation.

Debit Payment Settlement Services are included in the Financial service segment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.Financial Services

Financial Services mainly consists of remittances and bank transfer transactions. Users, companies, and other institutions request various remittances and bank transfer transactions based on the terms and conditions (step 1). The Group has a performance obligation to provide the service of depositing the money into the specified bank account as requested by the customer (step 2). Remittance and bank transfer fees are calculated at a prescribed rate or unit price according to the transaction amount and number of transactions (step 3) related to the single performance obligation (step 4). The Group recognizes revenue associated with these transactions at the point in time the service is provided (step 5).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)Interest Income

The Group earns interest income from revolving, installment, cash advance services rendered to cardholders, loan arrangements entered with customers and treasury investments made for the provision of securities intermediary services and investment trust-related services.

In recognition of interest income, the Group uses the effective interest rate method. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial instrument to the gross carrying amount of the financial asset (before adjusting for expected credit losses).

Interest income from non-credit impaired financial assets is recognized by applying the effective interest rate to the gross carrying amount of the asset; for credit impaired financial assets, the effective interest rate is applied to the net carrying amount after deducting the allowance for expected credit losses. The interest rate is set as a fixed rate or is determined based on the length of repayment period.

Interest income is included in both the Payment segment and the Financial service segment.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C)Gains (losses) on financial instruments

Financial income mainly comprises of changes in fair value of financial instruments measured at FVTPL and dividend income. For further details, refer to the section above (4) *Financial Instruments*.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D)Other operating income

Other operating income consists primarily of expired income associated with PayPay Points Code, and other incidental fees. The Group issues PayPay Points Code to PayPay Merchants and other institutions for PayPay Users. By using PayPay Points Code granted by these PayPay Merchants and other institutions, PayPay Users can fund their PayPay Balance and Other Items on our PayPay app. As PayPay Points Code expires over periods of inactivity, the Group recognizes income when it expires.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Consideration Payable to a Customer

The Group has consideration payable to a customer which includes PayPay Points to cardholders through which the Group intends to increase the number of customers and payment transactions. Refer to the section above (4) *Financial Instruments* for further details of non-derivative financial liabilities.

The Group concluded that PayPay Points do not represent a material right under IFRS 15 because these do not include an option to the cardholders to acquire any distinct services or goods from the Group in the future. The accumulated PayPay Points can be used to acquire additional goods or services from third parties or to convert into PayPay Investment Points which represent investments in third parties. Therefore, consideration payable to a customer is accounted for as a reduction of revenue unless the payment to the customer is in exchange for a distinct good or service, which could result in the consideration payable to a customer exceeding the corresponding revenue, and is recognized on the later of when revenue for the transfer of the services or goods is recognized or the consideration is paid or promised to pay.

If a consideration payable to a customer is an upfront payment, the Group recognizes it as an asset to the extent that the Group reasonably expects to generate future revenue associated with the payment, and, in such case, subsequently reduces revenue when or as the related services are rendered to the customer. Refer to Note 19, *Other Assets* for further details of an asset with respect to the consideration payable to a customer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)Incremental Costs of Obtaining a Contract

Incremental costs of obtaining a contract are recognized as assets when the Group expects to recover such costs by generating future revenue associated with the payment. The incremental costs of obtaining a contract are those costs that would not have been incurred if the contract had not been obtained. The portion of incremental costs that is not recoverable is expensed when it is incurred. The Group recognizes an asset for the incremental costs of obtaining a contract with a customer for the amount that the Group expects to recover, which is recorded in other assets on the Group's Consolidated Statements of Financial Position. The asset is amortized over the estimated period that services to which the asset relates are transferred to the customer on a straight-line basis. If the amortization period that the Group otherwise would have recognized is one year or less, the Group applies practical expedient recognizing incremental costs of obtaining a contract as an expense. Refer to Note 19, *Other Assets* and Note 30, *Revenue*.

(16)Income Tax

Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognized in profit or loss, except to the extent that they relate to business combinations and items recognized directly in equity or in other comprehensive income.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Current Tax

Current tax is measured at the amount expected to be paid to or recovered from the taxation authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Deferred Tax

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Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using balance sheet liability method. Deferred tax liabilities are generally recognized for all taxable temporary differences and deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which deductible temporary differences can be utilized, except for the following temporary differences:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Taxable temporary differences arising from initial recognition of goodwill.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Taxable temporary differences arising from the initial recognition of assets or liabilities in a transaction which is not a business combination, affects neither accounting profit or loss nor taxable profit or tax loss and does not give rise to equal taxable and deductible temporary differences.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Deductible temporary differences associated with investments in subsidiaries and associates, where it is not probable that the temporary difference will reverse in the foreseeable future or there will be taxable profit against which the temporary differences can be utilized.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Taxable temporary differences associated with investments in subsidiaries and associates, where the Group is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax assets are recognized by considering whether it is probable that part or all of deductible temporary differences and tax loss carry forwards can be deducted against future taxable profit and income taxes based on projected future taxable profit and tax planning. The estimation of future taxable profit is calculated based on financial budgets and it is based on management's judgments and assumptions. Deferred tax assets related to operating loss carry forwards and in excess of deferred tax liabilities have been recognized as it is estimated that future taxable profits will be available to realize such assets.

Deferred tax is measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the end of the reporting date.

Deferred tax assets and liabilities are offset, only when the Group has a legally enforceable right to set off current tax assets against current tax liabilities, and the same taxation authority levies income taxes either on the same taxable entity or on different taxable entities which intend either to settle current tax liabilities and assets on a net basis or to realize the assets and settle the liabilities simultaneously.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the asset to be recovered.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)Uncertainty over Income Tax Treatments

Uncertain tax positions as of each reporting date have been analyzed by the Group in accordance with IFRIC 23 "Uncertainty over Income Tax Treatments." The Company recognizes the effect of uncertain income tax positions only if those positions are more likely than not of being sustained.

The Group records a provision for uncertain tax positions if it is probable that the Group will have to make a payment to tax authorities upon their examination of a tax position. This provision is measured at the Group's best estimate of the amount expected to be paid. Provisions are reversed as a reduction of income tax expense in the period in which management determines they are no longer required or as determined by statute.

(17)Earnings Per Share

Basic earnings per share ("EPS") is calculated by dividing profit or loss attributable to the holders of common shares of the Company by the weighted average number of common shares outstanding for each reporting period. Profit or loss attributable to the holders of common shares of the Company is the same as the profit or loss for the year attributable to owners of the parent company.

Diluted EPS is calculated by dividing profit or loss attributable to the holders of common shares of the Company by the weighted average number of common shares outstanding for each reporting period plus the weighted average number of common shares assuming the conversion of all dilutive potential common shares into common shares. Profit or loss attributable to holders of common shares increased by the after-tax amount of dividends recognized in the period in respect of the dilutive potential common shares and is adjusted for any other changes in income or expense that would result from the conversion of the dilutive potential common shares. Potential common shares are antidilutive when their conversion to common shares would increase earnings per share or decrease loss per share. The calculation of diluted earnings per share does not assume conversion, exercise, or other issue of potential common shares that would have an antidilutive effect on earnings per share.

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**4. Critical Accounting Judgments and Key Sources of Estimation Uncertainty**

The preparation of the Group's consolidated financial statements requires the management to make judgments, estimates, and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures. These estimates and assumptions are based on the best judgment of the management considering historical experience and various factors deemed to be reasonable as of the end of reporting period. Given their nature, uncertainty about these estimates and assumptions could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

The estimates and assumptions are continuously reviewed by the management, as these estimates may change as new events occur. The effects of a change in estimates and assumptions are recognized in the period of the change and in any future periods effected.

The Group has following areas of critical accounting judgments made and accounting estimates and assumptions made that have significant effects on the reported amount in the consolidated financial statements:

(1)Business combinations under common control

As disclosed in Note 3, *Material Accounting Policies*, for business combinations between entities under common control, the Group accounts for such transactions based on the book values of the ultimate parent company, SBG, and regardless of the actual date of the transactions under common control, retrospectively consolidates the financial statements of the acquired companies as if they had always been combined to the earliest comparative period or from the date in which the ultimate parent company acquired those businesses, if later than the beginning of the earliest comparative period.

(2)Impairment

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Assets

*Non-financial assets other than goodwill*

Assets, such as property and equipment, right-of-use assets, intangible assets with definite useful lives disclosed in Note 14, *Property and Equipment*, Note 15, *Leases*, Note 16, *Goodwill and Intangible Assets*, are assessed for indications of impairment at the end of the reporting period. The Group evaluates both internal and external sources of information to assess whether impairment indicators exist. Some of the impairment indicators are evidence of obsolescence or significant adverse changes in the technological, market, economic or legal environment in which the Group (or an associate) operates, or in the market to which the asset is dedicated. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent, if any, of the impairment loss. The recoverable amount is the greater of its value in use and its fair value less cost to sell. An impairment loss is recognized and the carrying amount is adjusted to be equal to its recoverable amount, if the carrying amount of an asset or a CGU exceeds its recoverable amount. The Group identified no impairment indicators for property and equipment, right-of-use assets, and intangible assets as of March 31, 2025 and 2026, except for the assets held by PayPay Securities Corporation.

*Goodwill*

A goodwill impairment test requires the Group to exercise judgment and assess whether the carrying value of the CGU or CGU group to which goodwill has been allocated can be supported by the recoverable amount of such CGU or CGU group to which goodwill has been allocated.

The recoverable amount of a CGU or CGU group has been determined based on a value in use calculation which involves the use of estimates. The main assumptions used in the value in use calculation include the discount rate, terminal growth rate and expected future cash flow projections for a period of up to five years from financial budgets approved by the management. Cash flow projections beyond the planning period are extrapolated using terminal growth rates. Cash flow projections take into account past experience and represent management's best estimates. These assumptions can be subject to significant adjustments from such factors as user trend, spending on marketing, IT spending of corporations, and market conditions, such as competitors. The key assumptions used to determine the recoverable amounts of the different CGU or CGU group to which goodwill has been allocated are disclosed and further explained in Note 17, *Impairment of Goodwill*.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Financial assets measured at amortized cost, debt instruments measured at FVTOCI, and undrawn loan commitments

The Group assesses ECLs associated with financial assets measured at amortized cost, debt instruments measured at FVTOCI, and undrawn loan commitments. The impairment methodology depends on whether there has been a significant increase in the credit risk associated with the individual financial asset or the group of financial assets. A significant increase in the credit risk associated with the respective financial asset is assessed by considering default risk at the reporting date and comparing it to that at the date of initial recognition. In particular, the financial asset is deemed to be in default when contractual payments are 90 days or more past due, the contractual conditions have been modified, or the obligor is experiencing significant financial difficulty. The ECL estimation is performed based on unbiased, probability-weighted cash flows calculated by evaluating a range of possible outcomes and the time value of money. The estimation also considers the forecasts of future economic conditions and reasonably expected future events, expected increases in default probabilities and deterioration in macroeconomic indicators, such as unemployment rate. Refer to Note 3, *Material Accounting Policies* and Note 36, *Financial Instruments* for further details.

(3)Recoverability of Deferred Tax Assets

Regarding temporary differences, which are differences between carrying value of an asset or liability in the Group's Consolidated Statements of Financial Position and its tax base, the Group recognizes deferred tax assets and deferred tax liabilities. In considering their recoverability, the Group assesses the likelihood of their deferred tax assets being recovered within a reasonably foreseeable timeframe. Refer to Note 3, *Material Accounting Policies* and Note 18, *Income Tax* for further details.

**5. Standards Issued but Not Yet Effective**

On April 9, 2024, the IASB published IFRS 18 "Presentation and Disclosure in Financial Statements" ("IFRS 18"). IFRS 18, which replaces IAS 1, "Presentation of Financial Statements", introduces new disclosure requirements regarding the required presentation of operating, investing, financing, income taxes, and discontinued operations categories, management performance measures and improvement on grouping information within the financial statements. IFRS 18 is effective for annual reporting periods beginning on or after January 1, 2027, with early adoption permitted.

The impact of the adoption of IFRS 18 is still under consideration, and the impact upon adoption on the Group's consolidated financial statements cannot be reasonably estimated at this time.

Other than noted above, the Group reviewed the following standards and concluded that the standards do not materially affect its financial reporting.

---

| | | |
|:---|:---|:---|
| **Standards and amendments** | **Effective date** | **Date of adoption <br>by the Group** |
| The Classification and Measurement of Financial Instruments<br> (Amendments to IFRS 9 and IFRS 7 "Financial Instruments:<br> Disclosures" ("IFRS 7")) | January 1, 2026 | April 1, 2026 |
| Annual Improvements to IFRS Accounting Standards - Volume 11 | January 1, 2026 | April 1, 2026 |
| Contracts Referencing Nature-dependent Electricity <br> (Amendments to IFRS 9 and IFRS 7) | January 1, 2026 | April 1, 2026 |
| IFRS 19 "Subsidiaries without Public Accountability: Disclosures" | January 1, 2027 | April 1, 2027 |
| IAS 21 "Translation to a Hyperinflationary Presentation Currency" | January 1, 2027 | April 1, 2027 |

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**6. Segment Information**

(1)Overview of Reportable Segments

The Group's operating segments are components of the Group that engage in business activities from which they may earn revenues and incur expenses, and those components' discrete financial information is available. Such operating segments engage in business activities that earn revenues and incur expenses and the operating segments are subject to regular review by the Chief Executive Officer ("CEO"), who is the Group's Chief Operating Decision Maker ("CODM"), in deciding how to allocate resources and in assessing performance.

Accordingly, the Group has two operating segments, Payment segment and Financial service segment, which are also reportable segments that are determined based on the nature of services as described below. The reportable segments were revised from PayPay segment and PayPay Card segment to Payment segment and Financial service segment due to the change of segment management classifications triggered by the business combinations of PayPay Securities Corporation and PayPay Bank Corporation, which are described in Note 7, *Business Combinations*.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Payment segment

The Payment segment mainly consists of PayPay Corporation and PayPay Card Corporation. This segment includes payment settlement services and related services offered through our PayPay app and credit payment settlement services such as revolving and installment payment options and cash advances.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Financial service segment

The Financial service segment mainly consists of PayPay Bank Corporation, PayPay Securities Corporation, and Credit Engine, Inc. This segment includes financial service such as internet banking services, securities intermediary services and PayPay Point investment-related services, and loan management services.

(2)Profit or Loss for the Group's Reportable Segments

The Group's CODM primarily uses revenue and operating profit or loss to allocate resources and assess performance. The Group's segment profit or loss for each reportable segment is prepared in the same basis as the Group's consolidated financial statements. The total of individual segment profit or loss is equivalent to operating profit or loss presented on the Group's Consolidated Statements of Profit or Loss.

Segment financial information presented below does not include assets or liabilities, as the Group's CODM does not allocate resources or assess performance based on such information.

Inter-segment transaction prices are determined in the same manner as arm's length transactions with external customers.

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| | | | | |
|:---|:---|:---|:---|:---|
| **For the year ended March 31, 2024** |  |  |  |  |
|  | *(In millions of yen)* | *(In millions of yen)* | *(In millions of yen)* | *(In millions of yen)* |
|  | **Payment** | **Financial<br>service** | **Inter-segment<br>eliminations** | **Consolidated** |
| Transaction and service income |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Revenue from external customers | 149310 | 24817 |  | 174127 |
| &nbsp;&nbsp;&nbsp;Inter-segment revenue | 823 | 2081 | (2904) |  |
| Total transaction and service income | 150133 | 26898 | (2904) | 174127 |
| Interest income | 59013 | 14871 |  | 73884 |
| Gains (losses) on financial instruments | 405 | 4236 |  | 4641 |
| Other operating income | 1756 | 203 |  | 1959 |
| Total revenue | 211307 | 46208 | (2904) | 254611 |
| Operating expenses <sup>(1)</sup> | (215084) | (42420) | 2904 | (254600) |
| Segment profit (loss) <sup>(2)</sup> | (3777) | 3788 |  | 11 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)For information on depreciation and amortization expenses, see Note 33, *Operating Expenses.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)The total of segment profit (loss) is equivalent to profit before tax in the Consolidated Statements of Profit or Loss for the year ended March 31, 2024.

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| | | | | |
|:---|:---|:---|:---|:---|
| **For the year ended March 31, 2025** |  |  |  |  |
|  | *(In millions of yen)* | *(In millions of yen)* | *(In millions of yen)* | *(In millions of yen)* |
|  | **Payment** | **Financial<br>service** | **Inter-segment<br>eliminations** | **Consolidated** |
| Transaction and service income |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Revenue from external customers | 176597 | 26998 |  | 203595 |
| &nbsp;&nbsp;&nbsp;Inter-segment revenue | 1454 | 1362 | (2816) |  |
| Total transaction and service income | 178051 | 28360 | (2816) | 203595 |
| Interest income | 68623 | 19819 |  | 88442 |
| Gains (losses) on financial instruments | 276 | 5253 |  | 5529 |
| Other operating income | 1304 | 208 |  | 1512 |
| Total revenue | 248254 | 53640 | (2816) | 299078 |
| Operating expenses <sup>(1)</sup> | (217898) | (48486) | 2816 | (263568) |
| Segment profit | 30356 | 5154 |  | 35510 |
| (Reconciliation to profit before tax) |  |  |  |  |
| Share of loss of investments accounted for using the equity method |  |  |  | (549) |
| Profit before tax |  |  |  | 34961 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)For information on depreciation and amortization expenses, see Note 33, *Operating Expenses.*

---

| | | | | |
|:---|:---|:---|:---|:---|
| **For the year ended March 31, 2026** |  |  |  |  |
|  | *(In millions of yen)* | *(In millions of yen)* | *(In millions of yen)* | *(In millions of yen)* |
|  | **Payment** | **Financial<br>service** | **Inter-segment<br>eliminations** | **Consolidated** |
| Transaction and service income |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Revenue from external customers | 220770 | 30271 |  | 251041 |
| &nbsp;&nbsp;&nbsp;Inter-segment revenue | 1124 | 870 | (1994) |  |
| Total transaction and service income | 221894 | 31141 | (1994) | 251041 |
| Interest income | 84574 | 32674 | (760) | 116488 |
| Gains (losses) on financial instruments | 2327 | 7923 |  | 10250 |
| Other operating income | 2422 | 628 | (167) | 2883 |
| Total revenue | 311217 | 72366 | (2921) | 380662 |
| Operating expenses <sup>(1)</sup> | (246722) | (56779) | 2921 | (300580) |
| Segment profit | 64495 | 15587 |  | 80082 |
| (Reconciliation to profit before tax) |  |  |  |  |
| Share of loss of investments accounted for using the equity method |  |  |  | (137) |
| Profit before tax |  |  |  | 79945 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)For information on depreciation and amortization expenses, see Note 33, *Operating Expenses.*

(3)Geographical Information

Almost all revenues from external customers of the Group were generated in Japan, which is the Company's country of domicile, for the years ended March 31, 2024, 2025 and 2026. In addition, the assets of the Group were primarily located in Japan, as of March 31, 2025 and 2026.

(4)Service Information

The services provided and the amount of revenue are described in revenue section within Note 3, *Material Accounting Policies* and Note 30, *Revenue*.

(5)Information about Major Customers

There are no customers that individually accounted for more than 10% of the Group's revenues during the year ended March 31, 2024, 2025 and 2026.

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**7. Business Combinations**

**For the year ended March 31, 2024**

There were no significant business combinations.

**For the year ended March 31, 2025**

There were no significant business combinations.

**For the year ended March 31, 2026**

**Acquisition of PayPay Securities Corporation and PayPay Bank Corporation**

The Company entered a series of transactions and acquired PayPay Securities Corporation and PayPay Bank Corporation from SBG in April 2025.

On April 1, 2025, the Company acquired an additional 31.0% of the common shares of PayPay Securities Corporation, in which the Company had originally held 35.0% of the common shares prior to the transactions. The common shares were acquired from SoftBank Corp. and LY Corporation, subsidiaries of SBG. PayPay Securities Corporation also issued additional common shares to the Company on April 1, 2025 for a total cash consideration of 12,807 million yen. As a result of the transactions, the Company held 75.2% of the common shares of PayPay Securities Corporation as of April 1, 2025. Also, on April 11, 2025, the Company acquired 47.1% of the common shares and all the non-voting Class A preferred shares of PayPay Bank Corporation from Z Financial Corporation (currently LY Corporation after a merger on August 1, 2025), a subsidiary of SBG, and Mitsui Sumitomo Insurance Co., Ltd. for a cash consideration of 117,378 million yen. After the conversion of the non-voting Class A preferred shares of PayPay Bank Corporation into common shares, effective April 28, 2025, the Company held 75.5% of the common shares of PayPay Bank Corporation.

PayPay Securities Corporation is engaged in the securities intermediary business and PayPay Point investment service related business, and PayPay Bank Corporation is engaged in the internet banking business. Through the transactions, the Group aims to create synergies in the Payment Settlement Services and plans to further expand its market share in the cashless services market by providing PayPay Settlement Services and internet banking and securities intermediary services.

Those transactions were accounted for as business combinations of entities under common control as the Company and PayPay Securities Corporation as well as PayPay Bank Corporation were controlled by SBG before and after the transactions. As business combinations of entities under common control, the Group applied the pooling of interests method recognizing the effects of the business combination from April 1, 2022. In all periods presented in these consolidated financial statements, the Group recognized the assets, liabilities, and results of operations of PayPay Securities Corporation and PayPay Bank Corporation at the historical book values recorded by SBG in its consolidated financial statements. On April 1 and 11, 2025, the Company acquired common shares of PayPay Securities Corporation and common shares and Class A preferred shares of PayPay Bank Corporation, respectively, increasing the Company's ownership interests. As a result, the Group derecognized a portion of Non-controlling interests of those entities in Total shareholder's equity, which resulted in 86,358 million yen decrease in Non-controlling interests and 36,827 million yen decrease in Share premium in the Consolidated Statements of Financial Position as of March 31, 2026. Also, the Group recognized 130,185 million yen cash used in Payments for the purchase of the equity interest of subsidiaries, through business combinations of entities under common control in the Consolidated Statements of Cash Flows.

As a result of the application of the pooling of interests method, the Group recognized its share of the corresponding goodwill previously recognized by SBG based on historical cost. This goodwill has been allocated to the Group's cash generating unit in which PayPay Securities Corporation's operations are included. There is no goodwill recognized arising from the acquisition of PayPay Bank Corporation.

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**8. Cash and Cash Equivalents**

Cash and cash equivalents are as follows:

---

| | | |
|:---|:---|:---|
|  | *(In millions of yen)* | *(In millions of yen)* |
|  | **March 31, 2025** | **March 31, 2026** |
| **Payment:** |  |  |
| &nbsp;&nbsp;&nbsp;Cash and demand deposits | 141289 | 53439 |
| &nbsp;&nbsp;&nbsp;Restricted cash related to transfers of credit card receivables | 734 | 697 |
| &nbsp;&nbsp;&nbsp;Subtotal | 142023 | 54136 |
| **Financial service:** |  |  |
| &nbsp;&nbsp;&nbsp;Cash and demand deposits | 15530 | 16322 |
| &nbsp;&nbsp;&nbsp;Deposits with the Bank of Japan <sup>(1)</sup> | 212258 | 292622 |
| &nbsp;&nbsp;&nbsp;Other |  | 3 |
| &nbsp;&nbsp;&nbsp;Subtotal | 227788 | 308947 |
| Total | 369811 | 363083 |

---

(1)The Company's banking subsidiary, PayPay Bank Corporation, is required by the Act on the Reserve Deposit Requirement System to deposit with the Bank of Japan an amount exceeding a certain ratio of deposits (legal reserve), and it deposits an amount exceeding the legal reserve.

**9. Guarantee Deposits**

Guarantee deposits are as follows:

---

| | | |
|:---|:---|:---|
|  | *(In millions of yen)* | *(In millions of yen)* |
|  | **March 31, 2025** | **March 31, 2026** |
| **Payment:** |  |  |
| &nbsp;&nbsp;&nbsp;Guarantee deposits under Payment Services Act <sup>(1)(2)(3)(4)(5)</sup> | 219466 | 49734 |
| &nbsp;&nbsp;&nbsp;Subtotal | 219466 | 49734 |
| **Financial service:** |  |  |
| &nbsp;&nbsp;&nbsp;Other <sup>(5)(6)</sup> | 24763 | 24405 |
| &nbsp;&nbsp;&nbsp;Subtotal | 24763 | 24405 |
| Total | 244229 | 74139 |

---

(1)In accordance with the Payment Services Act of Japan, the Group is required to safeguard unused prepaid balances held by users of PayPay settlement services through prescribed measures, including making a security deposit (the "guarantee deposit") or investing in Japanese government securities with the Legal Affairs Bureau. The balance is required to cover 100% of the total unused prepaid balance of PayPay Money and 50% of the total unused prepaid balance of PayPay Money Lite.

(2)In addition to guarantee deposits and Japanese government securities reserved with the Legal Affairs Bureau, the Group adopted an additional method for safeguarding the unused prepaid balances through the establishment of a consolidated trust during the year ended March 31, 2026, and the Group reported the trust arrangement to the Kanto Local Finance Bureau. Through this trust arrangement, the consolidated trust deposits the funds with PayPay Bank Corporation and the funds are managed in the normal course of the banking business. For details of the trust arrangement, refer to Note 37. *Subsidiaries and Investments Accounted for Using the Equity Method*.

(3)The total balance of cash held by the trust, the guarantee deposits, and the Japanese government securities amounts to 250,329 million yen and 306,747 million yen as of March 31, 2025 and 2026, respectively. The Company has deposited 196,500 million yen to PayPay Bank Corporation under the trust arrangement as of March 31, 2026.

(4)The balance also includes regulatory safeguarding assets maintained in connection with digital wage payment services pursuant to the Ordinance for Enforcement of the Labor Standards Act of Japan. The balance was 5,002 million yen and 5,011 million yen as of March 31, 2025 and 2026, respectively.

(5)Guarantee deposits are classified as financial assets measured at amortized cost.

(6)These are mainly cash segregated as reserve deposits for customers.

**10. Accounts Receivable**

Accounts receivable are as follows:

---

| | | |
|:---|:---|:---|
|  | *(In millions of yen)* | *(In millions of yen)* |
|  | **March 31, 2025** | **March 31, 2026** |
| Settlement receivables <sup>(1)(2)</sup> | 94087 | 91343 |
| Other receivables <sup>(2)(3)</sup> | 47819 | 59815 |
| Loss allowance <sup>(4)</sup> | (852) | (786) |
| Total | 141054 | 150372 |

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(1)Receivables are primarily due from external payment service providers, who collect the amount equivalent to PayPay Balance and Other Items charged by PayPay Users through their payment methods on behalf of the Group.

(2)These assets are classified as financial assets measured at amortized cost.

(3)Other receivables include mainly cash deposits collected by financial institutions from PayPay Users, but not yet paid out to the Group. The balance of such items were 28,054 million yen and 34,872 million yen as of March 31, 2025 and 2026, respectively.

(4)The changes in loss allowance for accounts receivable are shown in Note 36, Financial Instruments.

**11. Loans and Advances to Customers**

Loans and advances to customers are as follows:

---

| | | |
|:---|:---|:---|
|  | *(In millions of yen)* | *(In millions of yen)* |
|  | **March 31, 2025** | **March 31, 2026** |
| **Payment:** |  |  |
| &nbsp;&nbsp;&nbsp;Credit card receivables | 1045681 | 1321827 |
| &nbsp;&nbsp;&nbsp;Loss allowance <sup>(1)</sup> | (43739) | (45312) |
| &nbsp;&nbsp;&nbsp;Subtotal | 1001942 | 1276515 |
| **Financial service:** |  |  |
| &nbsp;&nbsp;&nbsp;Mortgage loans <sup>(2)</sup> | 664594 | 909483 |
| &nbsp;&nbsp;&nbsp;Overdraft | 261943 | 312255 |
| &nbsp;&nbsp;&nbsp;Other | 383 | 16879 |
| &nbsp;&nbsp;&nbsp;Loss allowance <sup>(1)</sup> | (1255) | (2281) |
| &nbsp;&nbsp;&nbsp;Subtotal | 925665 | 1236336 |
| Total | 1927607 | 2512851 |

---

(1)For further details of loss allowance, refer to credit risk management section within Note 36, *Financial Instruments*.

(2)Mortgage loans include the loans acquired from a financial institution with a guarantee provided by the seller up to 1% of the initial principal balance, the balance of which amounts to 187,471 million yen and 175,950 million yen as of March 31, 2025 and 2026, respectively.

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**12. Securities**

Securities are as follows:

---

| | | |
|:---|:---|:---|
|  | *(In millions of yen)* | *(In millions of yen)* |
|  | **March 31, 2025** | **March 31, 2026** |
| **Payment:** |  |  |
| &nbsp;&nbsp;&nbsp;Japanese government securities <sup>(1)</sup> | 35953 | 65612 |
| &nbsp;&nbsp;&nbsp;Subtotal | 35953 | 65612 |
| **Financial service:** |  |  |
| &nbsp;&nbsp;&nbsp;Japanese government securities <sup>(2)</sup> | 329062 | 713244 |
| &nbsp;&nbsp;&nbsp;Corporate and other debt securities <sup>(2)</sup> | 295707 | 416121 |
| &nbsp;&nbsp;&nbsp;Asset backed securities | 282333 | 337685 |
| &nbsp;&nbsp;&nbsp;Exchange traded funds <sup>(3)</sup> | 132509 | 202879 |
| &nbsp;&nbsp;&nbsp;Equity securities | 184 | 1294 |
| &nbsp;&nbsp;&nbsp;Subtotal | 1039795 | 1671223 |
| Total | 1075748 | 1736835 |

---

(1)Japanese government securities within Payment segment are purchased for the purpose of meeting the deposit requirement under the Payment Services Act. Refer to Note 9, *Guarantee Deposits* for details.

(2)These securities include assets pledged as collateral at the Bank of Japan and Japanese Banks' Payment Clearing Network. Refer to Note 36, *Financial Instruments* for further details.

(3)Exchange traded funds are mainly held for PayPay Point investment-related business.

**13. Other Financial Assets**

Other financial assets are as follows:

---

| | | |
|:---|:---|:---|
|  | *(In millions of yen)* | *(In millions of yen)* |
|  | **March 31, 2025** | **March 31, 2026** |
| Receivables from third party operators of deposit machines <sup>(1)(2)</sup> | 5744 | 5239 |
| Time deposits pledged as collateral <sup>(1)(3)(4)</sup> | 3677 | 5128 |
| Accrued interest <sup>(1)</sup> | 2177 | 3792 |
| Trade date accrual <sup>(1)</sup> | 1903 | 3534 |
| Office security deposits <sup>(1)</sup> | 3725 | 2946 |
| Receivables from customers and other parties in the securities intermediary business <sup>(1) (5)</sup> | 1118 | 2740 |
| Receivables from third parties for PayPay Gift Vouchers <sup>(1)(5)</sup> | 3 | 2400 |
| Derivative assets <sup>(6)</sup> | 2234 | 2310 |
| Accrued income <sup>(1)</sup> | 1741 | 1949 |
| Other | 808 | 2255 |
| Total | 23130 | 32293 |

---

Certain comparative information for the previous fiscal year has been reclassified to the current fiscal year presentation.

(1)These assets are classified as financial assets measured at amortized cost.

(2)The balance mainly consists of the deposits made by customers of PayPay Bank Corporation which are retained at third party operators of deposit machines.

(3)The name of the line item previously presented as "Time deposits" has been changed to "Time deposits pledged as collateral" to clarify that the deposits are pledged as collateral.

(4)Refer to Note 36, *Financial Instruments* for further details.

(5)The comparative amounts of 1,118 million yen for "Receivables from customers and other parties in the securities intermediary business" and 3 million yen for "Receivables from third parties for PayPay Gift Vouchers" have been reclassified from "Other" and "Receivables from third party operators of deposit machines", respectively. This reclassification was made because the financial significance of these items has increased due to the expansion of transaction volumes during the current fiscal year.

(6)These assets are classified as financial assets measured at FVTPL.

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**14. Property and Equipment**

Changes in property and equipment are as follows:

(1)Acquisition Cost

---

| | | | | |
|:---|:---|:---|:---|:---|
|  |  |  | *(In millions of yen)* | *(In millions of yen)* |
|  | **Leasehold<br>improvements** | **Furniture<br>and<br>fixtures** | **Construction<br>in progress** | **Total** |
| Balance as of April 1, 2024 | 2746 | 19441 | 806 | 22993 |
| &nbsp;&nbsp;&nbsp;Additions | 432 | 3222 | 1676 | 5330 |
| &nbsp;&nbsp;&nbsp;Transfer from construction in progress | 6 | 1264 | (1270) |  |
| &nbsp;&nbsp;&nbsp;Disposals | (35) | (1592) | (9) | (1636) |
| &nbsp;&nbsp;&nbsp;Other | (112) | (86) | (647) | (845) |
| Balance as of March 31, 2025 | 3037 | 22249 | 556 | 25842 |
| &nbsp;&nbsp;&nbsp;Additions | 418 | 3232 | 2371 | 6021 |
| &nbsp;&nbsp;&nbsp;Transfer from construction in progress | 11 | 1858 | (1869) |  |
| &nbsp;&nbsp;&nbsp;Disposals | (468) | (1782) | (3) | (2253) |
| &nbsp;&nbsp;&nbsp;Other | 6 | (61) | (292) | (347) |
| Balance as of March 31, 2026 | 3004 | 25496 | 763 | 29263 |

---

(2)Accumulated Depreciation and Impairment Losses

---

| | | | | |
|:---|:---|:---|:---|:---|
|  |  |  | *(In millions of yen)* | *(In millions of yen)* |
|  | **Leasehold<br>improvements** | **Furniture<br>and<br>fixtures** | **Construction<br>in progress** | **Total** |
| Balance as of April 1, 2024 | 877 | 7581 | ― | 8458 |
| &nbsp;&nbsp;&nbsp;Depreciation | 455 | 3658 | ― | 4113 |
| &nbsp;&nbsp;&nbsp;Disposals | (24) | (1018) | ― | (1042) |
| &nbsp;&nbsp;&nbsp;Impairment Losses | (100) | (80) | ― | (180) |
| Balance as of March 31, 2025 | 1208 | 10141 | ― | 11349 |
| &nbsp;&nbsp;&nbsp;Depreciation | 374 | 4344 | ― | 4718 |
| &nbsp;&nbsp;&nbsp;Disposals | (462) | (1198) | ― | (1660) |
| &nbsp;&nbsp;&nbsp;Other | (2) | (21) | ― | (23) |
| Balance as of March 31, 2026 | 1118 | 13266 | ― | 14384 |

---

(3)Book Value

---

| | | | | |
|:---|:---|:---|:---|:---|
|  |  |  | *(In millions of yen)* | *(In millions of yen)* |
|  | **Leasehold<br>improvements** | **Furniture<br>and<br>fixtures** | **Construction<br>in progress** | **Total** |
| Balance as of March 31, 2025 | 1829 | 12108 | 556 | 14493 |
| Balance as of March 31, 2026 | 1886 | 12230 | 763 | 14879 |

---

Amounts related to property and equipment under construction are shown as construction in progress. There were no property and equipment with restrictions on ownership or pledged as a collateral. Depreciation is included in operating expenses in the Group's Consolidated Statements of Profit or Loss. There was no borrowing cost capitalized on property and equipment. For commitments regarding the acquisition of property and equipment, refer to Note 39, *Commitments*.

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**15. Leases**

The Group has no significant sublease arrangements. For cash flows related to leases, refer to Note 22, *Borrowings and Lease Liabilities*.

*Group as a lessee*

(1)Nature of the Leases

The Group enters into lease contracts primarily for the use of rental offices as well as company housing for employees. Some of the lease agreements include extension and termination options, but there are no purchase options, escalation clauses, or significant restrictions on additional borrowings or additional leases imposed by the lease agreement.

The majority of the extension options are for the same period as the original lease contract, and termination options are for early termination with advance notification of three or six months. These options are exercised as necessary to enable the Group to utilize the underlying asset in its business. In determining the lease term, all relevant facts and circumstances that create an economic incentive for the lessee to exercise the option to extend the lease, or not to exercise the option to terminate the lease are considered. Right-of-use assets and lease liabilities are measured reflecting the lease term based on the management's best estimate about whether an extension or termination option will be exercised at the lease commencement date or when the management reassess the lease terms.

(2)Lease-related Expenses

Lease-related expenses are as follows:

---

| | | | |
|:---|:---|:---|:---|
|  |  | *(In millions of yen)* | *(In millions of yen)* |
|  | **For the year ended** | **For the year ended** | **For the year ended** |
|  | **March 31, 2024** | **March 31, 2025** | **March 31, 2026** |
| Depreciation expenses on right-of-use assets –Buildings | 2541 | 2732 | 3045 |
| Depreciation expenses on right-of-use assets – Other | 64 | 90 | 83 |
| Interest expenses on lease liabilities | 72 | 92 | 195 |
| Expenses relating to short-term leases | 208 | 167 | 130 |
| Expenses relating to leases of low-value assets excluding<br> short-term lease expenses | 186 | 176 | 138 |
| Total lease-related expenses | 3071 | 3257 | 3591 |
| Total cash outflow | 2832 | 3038 | 3207 |

---

Refer to Note 36, *Financial Instruments* for the maturity analysis of the financial liabilities including lease liabilities.

(3)Book Value of Right-of-use Assets

The movements of the book value of right-of-use assets are as follows:

---

| | | | |
|:---|:---|:---|:---|
|  |  | *(In millions of yen)* | *(In millions of yen)* |
|  | **Buildings** | **Other** | **Total** |
| Balance as of April 1, 2024 | 8440 | 412 | 8852 |
| &nbsp;&nbsp;&nbsp;Increase due to new lease agreements and<br> remeasurement of lease liabilities | 9026 | 43 | 9069 |
| &nbsp;&nbsp;&nbsp;Decrease due to termination of lease agreements and<br> remeasurement of lease liabilities | (207) |  | (207) |
| &nbsp;&nbsp;&nbsp;Depreciation | (2732) | (90) | (2822) |
| &nbsp;&nbsp;&nbsp;Other | (61) | (32) | (93) |
| Balance as of March 31, 2025 | 14466 | 333 | 14799 |
| &nbsp;&nbsp;&nbsp;Increase due to new lease agreements and<br> remeasurement of lease liabilities | 577 |  | 577 |
| &nbsp;&nbsp;&nbsp;Decrease due to termination of lease agreements and<br> remeasurement of lease liabilities | (104) |  | (104) |
| &nbsp;&nbsp;&nbsp;Depreciation | (3045) | (83) | (3128) |
| &nbsp;&nbsp;&nbsp;Other | 31 |  | 31 |
| Balance as of March 31, 2026 | 11925 | 250 | 12175 |

---

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**16. Goodwill and Intangible Assets**

Changes in goodwill and intangible assets are as follows:

(1)Acquisition Cost

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  |  |  |  | *(In millions of yen)* | *(In millions of yen)* |
|  |  | **Intangible Assets** | **Intangible Assets** | **Intangible Assets** | **Intangible Assets** |
|  | **Goodwill** | **Software** | **Software in<br>progress** | **Customer<br>relationship** | **Total** |
| Balance as of April 1, 2024 | 9919 | 110198 | 3582 | 4527 | 118307 |
| &nbsp;&nbsp;&nbsp;Acquisitions | 5238 | 4794 | 4082 | 1097 | 9973 |
| &nbsp;&nbsp;&nbsp;Internal development |  | 193 | 7373 |  | 7566 |
| &nbsp;&nbsp;&nbsp;Transfer from software in progress |  | 11767 | (11767) |  |  |
| &nbsp;&nbsp;&nbsp;Disposals |  | (3047) | (79) |  | (3126) |
| &nbsp;&nbsp;&nbsp;Other |  | (83) | (187) |  | (270) |
| Balance as of March 31, 2025 | 15157 | 123822 | 3004 | 5624 | 132450 |
| &nbsp;&nbsp;&nbsp;Acquisitions |  | 4382 | 3809 |  | 8191 |
| &nbsp;&nbsp;&nbsp;Internal development |  |  | 9373 |  | 9373 |
| &nbsp;&nbsp;&nbsp;Transfer from software in progress |  | 10045 | (10045) |  |  |
| &nbsp;&nbsp;&nbsp;Disposals |  | (7282) | (75) |  | (7357) |
| &nbsp;&nbsp;&nbsp;Other |  | (75) | (38) |  | (113) |
| Balance as of March 31, 2026 | 15157 | 130892 | 6028 | 5624 | 142544 |

---

(2)Accumulated Amortization and Impairment Losses

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  |  |  |  | *(In millions of yen)* | *(In millions of yen)* |
|  |  | **Intangible Assets** | **Intangible Assets** | **Intangible Assets** | **Intangible Assets** |
|  | **Goodwill** | **Software** | **Software in<br>progress** | **Customer<br>relationship** | **Total** |
| Balance as of April 1, 2024 |  | 53633 | 224 | 2760 | 56617 |
| &nbsp;&nbsp;&nbsp;Amortization |  | 12733 |  | 438 | 13171 |
| &nbsp;&nbsp;&nbsp;Disposals |  | (3024) |  |  | (3024) |
| &nbsp;&nbsp;&nbsp;Other |  | 14 |  |  | 14 |
| Balance as of March 31, 2025 |  | 63356 | 224 | 3198 | 66778 |
| &nbsp;&nbsp;&nbsp;Amortization |  | 15430 |  | 482 | 15912 |
| &nbsp;&nbsp;&nbsp;Disposals |  | (6612) |  |  | (6612) |
| &nbsp;&nbsp;&nbsp;Other |  |  |  |  |  |
| Balance as of March 31, 2026 |  | 72174 | 224 | 3680 | 76078 |

---

(3)Book Value

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  |  |  |  | *(In millions of yen)* | *(In millions of yen)* |
|  |  | **Intangible Assets** | **Intangible Assets** | **Intangible Assets** | **Intangible Assets** |
|  | **Goodwill** | **Software** | **Software in<br>progress** | **Customer<br>relationship** | **Total** |
| Balance as of March 31, 2025 | 15157 | 60466 | 2780 | 2426 | 65672 |
| Balance as of March 31, 2026 | 15157 | 58718 | 5804 | 1944 | 66466 |

---

There were no intangible assets with restrictions on ownership or pledged as a collateral. Amortization of intangible assets is included in operating expenses in the Group's Consolidated Statements of Profit or Loss. For commitments regarding the acquisition of intangible assets, refer to Note 39, *Commitments*.

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**17. Impairment of Goodwill**

(1)Goodwill Allocated to CGU or CGU group

Annual impairment testing for goodwill was performed as of January 1, 2025 and 2026 for the years ended March 31, 2025 and 2026, respectively.

Goodwill resulting from the acquisition of PayPay Card Corporation was allocated to one CGU, PayPay Card CGU, which is included in the Payment segment, for impairment testing purposes. PayPay Card CGU includes PayPay Card Corporation acquired on October 1, 2022, which is retrospectively consolidated as if such transaction was executed by the Group prior to the transfer or April 1, 2021. On October 1, 2022, we acquired all of the shares of PayPay Card Corporation from Yahoo Japan Corporation (currently LY Corporation). Immediately prior to the acquisition, Yahoo Japan Corporation transferred its credit card merchant acquiring business to PayPay Card Corporation. The acquisition of PayPay Card Corporation was accounted for as a transaction under common control since we, Yahoo Japan Corporation and PayPay Card Corporation are all controlled by SBG.

The carrying amounts of goodwill allocated to the CGU or CGU group for impairment testing are as follows:

---

| | | |
|:---|:---|:---|
|  | *(In millions of yen)* | *(In millions of yen)* |
|  | **March 31, 2025** | **March 31, 2026** |
| PayPay Card CGU | 9176 | 9176 |
| Other CGUs or CGU groups | 5981 | 5981 |
| Total | 15157 | 15157 |

---

(2)Measurement Method for Recoverable Amounts of Goodwill

*PayPay Card CGU*

The recoverable amount of the CGU was determined based on a value in use calculation using cash flow projections and dividend projections for a period of up to five years from financial budgets approved by the Group's management.

Cash flow projections and dividend projections take into account past experience and represent management's best estimates.

The main assumptions used in the value in use calculation include the pre-tax discount rate, terminal growth rate and expected future dividends. These assumptions can be subject to significant adjustments due to factors such as marketing budgets and market conditions, such as competitors. Dividends beyond the planning periods were extrapolated using terminal growth rates. To estimate the pre-tax discount rate that reflects the time value of money and the risks specific to the CGU, the Group has assumed a risk-free rate equal to one-month average market yield on 10-year Japanese government bonds at the date of performing the annual impairment test. The Group also incorporates risk premiums, such as company specific premium including size risk premium and equity premium, in the pre-tax discount rate. The terminal growth rates are based on the long-term average inflation rates of Japan, which take into consideration external macroeconomic sources of data.

The significant assumptions used in the value in use calculations are as follows:

---

| | | |
|:---|:---|:---|
|  | **For the year ended<br> March 31, 2025** | **For the year ended<br> March 31, 2025** |
|  | **Pre-tax<br>discount rate** | **Terminal<br>growth rate** |
| PayPay Card CGU | 10.2% | 1.5% |

---

---

| | | |
|:---|:---|:---|
|  | **For the year ended<br> March 31, 2026** | **For the year ended<br> March 31, 2026** |
|  | **Pre-tax<br>discount rate** | **Terminal<br>growth rate** |
| PayPay Card CGU | 9.8% | 1.4% |

---

No impairment losses were recognized for goodwill for the years ended March 31, 2025 and 2026, as a result of the annual impairment testing.

(3)Sensitivity to Changes in Assumptions

The Group conducted an analysis of the sensitivity of the impairment test to changes in the significant assumptions used

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to determine the recoverable amount for the CGU or CGU group.

For all the CGUs or CGU groups, in the opinion of the Group's management, the recoverable amount has considerably exceeded the carrying amount of the CGU or CGU group, and the outcomes of the impairment tests are not sensitive to cause material changes in any of the assumptions underlying the cash flow projections, including discount rates, for the periods presented for the CGU or CGU group.

**18. Income Tax**

(1)Deferred Tax

The major movements of deferred tax assets and liabilities are as follows:

**For the year ended March 31, 2025** 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  |  |  |  | *(In millions of yen)* | *(In millions of yen)* |
|  | **Balance as of<br>April 1, 2024** | **Amounts<br>recorded<br>under profit<br>or loss** | **Amounts<br>recognized<br>under other<br>comprehensive<br>loss** | **Other** | **Balance as of<br>March 31, 2025** |
| Deferred tax assets |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Operating loss carryforwards | 4846 | (2052) |  |  | 2794 |
| &nbsp;&nbsp;&nbsp;Loss allowance | 15378 | 6191 |  |  | 21569 |
| &nbsp;&nbsp;&nbsp;Impairment | 2184 | (819) |  |  | 1365 |
| &nbsp;&nbsp;&nbsp;Assets revaluation of acquired business | 9258 | (2647) |  |  | 6611 |
| &nbsp;&nbsp;&nbsp;Lease liabilities | 2456 | 2789 |  |  | 5245 |
| &nbsp;&nbsp;&nbsp;Accrued liabilities | 1000 | (567) |  |  | 433 |
| &nbsp;&nbsp;&nbsp;Deposits | 65 | 12668 |  |  | 12733 |
| &nbsp;&nbsp;&nbsp;Securities | 1098 | 184 | 1501 |  | 2783 |
| &nbsp;&nbsp;&nbsp;Asset retirement obligation | 564 | 494 |  |  | 1058 |
| &nbsp;&nbsp;&nbsp;Loans and advances to customers | 1872 | 1004 |  |  | 2876 |
| &nbsp;&nbsp;&nbsp;Other | 1495 | 822 |  | 10 | 2327 |
| Subtotal | 40216 | 18067 | 1501 | 10 | 59794 |
| Deferred tax liabilities |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Capitalized card acquisition cost | 1359 | (492) |  |  | 867 |
| &nbsp;&nbsp;&nbsp;Right-of-use assets | 2841 | 1961 |  |  | 4802 |
| &nbsp;&nbsp;&nbsp;Lease receivables |  | 1422 |  |  | 1422 |
| &nbsp;&nbsp;&nbsp;Accounts receivable | 540 | 1472 |  |  | 2012 |
| &nbsp;&nbsp;&nbsp;Other | 1313 | (570) |  | 933 | 1676 |
| Subtotal | 6053 | 3793 |  | 933 | 10779 |
| Deferred tax, net | 34163 | 14274 | 1501 | (923) | 49015 |

---

The amounts of deferred tax assets and deferred tax liabilities on the Consolidated Statements of Financial Position are as follows:

---

| | | |
|:---|:---|:---|
|  | *(In millions of yen)* | *(In millions of yen)* |
|  | **March 31, 2025** | **March 31, 2025** |
| Deferred tax assets |  | 49,392 |
| Deferred tax liabilities |  | 377 |
| Deferred tax, net |  | 49,015 |

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**For the year ended March 31, 2026**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  |  |  |  | *(In millions of yen)* | *(In millions of yen)* |
|  | **Balance as of<br>April 1, 2025** | **Amounts<br>recorded<br>under profit<br>or loss** | **Amounts<br>recognized<br>under other<br>comprehensive<br>loss** | **Other** | **Balance as of<br>March 31, 2026** |
| Deferred tax assets |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Operating loss carryforwards | 2794 | 29196 |  |  | 31990 |
| &nbsp;&nbsp;&nbsp;Loss allowance | 21569 | (325) |  |  | 21244 |
| &nbsp;&nbsp;&nbsp;Impairment | 1365 | (488) |  |  | 877 |
| &nbsp;&nbsp;&nbsp;Assets revaluation of acquired business | 6611 | (2752) |  |  | 3859 |
| &nbsp;&nbsp;&nbsp;Lease liabilities | 5245 | (2430) |  |  | 2815 |
| &nbsp;&nbsp;&nbsp;Accrued liabilities | 433 | 2624 |  | 0 | 3057 |
| &nbsp;&nbsp;&nbsp;Deposits | 12733 | 19593 |  |  | 32326 |
| &nbsp;&nbsp;&nbsp;Securities | 2783 |  | 1751 |  | 4534 |
| &nbsp;&nbsp;&nbsp;Asset retirement obligation | 1058 | (39) |  |  | 1019 |
| &nbsp;&nbsp;&nbsp;Loans and advances to customers | 2876 | 1432 |  |  | 4308 |
| &nbsp;&nbsp;&nbsp;PayPay Trademark |  | 5142 |  |  | 5142 |
| &nbsp;&nbsp;&nbsp;Other | 2327 | 1749 |  | (53) | 4023 |
| Subtotal | 59794 | 53702 | 1751 | (53) | 115194 |
| Deferred tax liabilities |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Capitalized card acquisition cost | 867 | (453) |  |  | 414 |
| &nbsp;&nbsp;&nbsp;Right-of-use assets | 4802 | (919) |  |  | 3883 |
| &nbsp;&nbsp;&nbsp;Lease receivables | 1422 | (1422) |  |  |  |
| &nbsp;&nbsp;&nbsp;Accounts receivable | 2012 | 194 |  |  | 2206 |
| &nbsp;&nbsp;&nbsp;Other | 1676 | (54) |  |  | 1622 |
| Subtotal | 10779 | (2654) |  |  | 8125 |
| Deferred tax, net | 49015 | 56356 | 1751 | (53) | 107069 |

---

The amounts of deferred tax assets and deferred tax liabilities on the Consolidated Statements of Financial Position are as follows:

---

| | | |
|:---|:---|:---|
|  | *(In millions of yen)* | *(In millions of yen)* |
|  | **March 31, 2026** | **March 31, 2026** |
| Deferred tax assets |  | 107,275 |
| Deferred tax liabilities |  | 206 |
| Deferred tax, net |  | 107,069 |

---

Deferred tax assets which belong to each company in the Group that recorded losses as of March 31, 2025 were 12,772 million yen, while there were no such deferred tax assets as of March 31, 2026. The Group recognizes deferred tax assets to the extent that it is probable that future taxable profit will be available.

(2)Deductible Temporary Differences and Carryforward of Unused Tax Losses for Which No Deferred Tax Asset is Recognized in the Group's Consolidated Statements of Financial Position

Deductible temporary differences and carryforward of unused tax losses for which deferred tax assets are not recognized are as follows:

---

| | | |
|:---|:---|:---|
|  | *(In millions of yen)* | *(In millions of yen)* |
|  | **March 31, 2025** | **March 31, 2026** |
| Deductible temporary differences | 135389 | 59507 |
| Carryforward of unused tax losses | 141868 | 20350 |
| Total | 277257 | 79857 |

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Breakdown of carryforward of unused tax losses by expiry date for which deferred tax assets are not recognized are as follows:

---

| | | |
|:---|:---|:---|
|  | *(In millions of yen)* | *(In millions of yen)* |
|  | **March 31, 2025** | **March 31, 2026** |
| Within 1 year | 315 | 1529 |
| Between 1 year and 2 years | 887 |  |
| Between 2 years and 3 years | 1529 | 1559 |
| Between 3 years and 4 years |  | 1882 |
| Between 4 years and 5 years |  | 1829 |
| 5 years and after | 139137 | 13551 |
| Total | 141868 | 20350 |

---

The Company and certain of its domestic subsidiaries apply the Japanese Group Relief System effective from the year ended March 31, 2024. However, the deductible temporary differences and carryforward of unused tax losses for which deferred tax assets are not recognized that are presented in the above table do not include the amounts related to local taxes (inhabitant tax and enterprise tax), which are not subject to the Japanese Group Relief System.

As of March 31, 2025 and 2026, the amounts of deductible temporary differences related to local taxes (inhabitant tax and enterprise tax) were 103,230 million yen and 20,194 million yen, and the amounts of carryforward of unused tax losses were 142,730 million yen and 23,268 million yen, respectively,

(3)Taxable Temporary Differences Relating to Investments in Subsidiaries for which Deferred Tax Liabilities have not been Recognized

There were no material taxable temporary differences relating to investments in subsidiaries for which deferred tax liabilities have not been recognized as of March 31, 2025 and 2026.

(4)Income Tax Expense (Benefit)

The components of income tax expense (benefit) are as follows:

---

| | | | |
|:---|:---|:---|:---|
|  |  | *(In millions of yen)* | *(In millions of yen)* |
|  | **For the year ended** | **For the year ended** | **For the year ended** |
|  | **March 31, 2024** | **March 31, 2025** | **March 31, 2026** |
| Current tax expense <sup>(1)</sup> | 5306 | 10078 | 18491 |
| Deferred tax expense (benefit) | (4465) | (14274) | (56356) |
| &nbsp;&nbsp;&nbsp;Changes related to origination and reversal<br> of temporary differences <sup>(2)(3)</sup> | (4628) | (13095) | (57017) |
| &nbsp;&nbsp;&nbsp;Changes in the tax rate <sup>(4)</sup> | 163 | (1179) | 661 |
| Total | 841 | (4196) | (37865) |

---

---

| | | | |
|:---|:---|:---|:---|
|  |  | *(In millions of yen)* | *(In millions of yen)* |
|  | **For the year ended** | **For the year ended** | **For the year ended** |
|  | **March 31, 2024** | **March 31, 2025** | **March 31, 2026** |
| Income tax recognized directly in equity |  |  | (460) |
| Income tax recognized in other comprehensive income | (521) | (1501) | (1751) |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)For the years ended March 31, 2024, 2025 and 2026, current tax expense includes benefits arising from tax losses and temporary differences of prior periods that had not previously been recognized. As a result, current tax expense decreased by nil, 37,159 million yen and 32,504 million yen, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)For the year ended March 31, 2026, the Company reassessed the recoverability of its deferred tax assets in light of projections of future taxable profit. As a result, the Company recognized additional deferred tax assets relating to deductible temporary differences and carryforward of unused tax losses that had not been previously recognized. The basis for this conclusion is as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•It has become probable that taxable profit will be generated for two consecutive fiscal years at the end of the current fiscal year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The unused tax losses resulted from identifiable causes that are unlikely to recur in the future.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Based on a critical assessment of historical performance and approved business plans for the next three years, the Company concluded that sufficient taxable profit is expected to be generated during the periods in which the carryforward of unused tax losses can be utilized.

For the years ended March 31, 2025 and 2026, deferred tax expense includes benefits arising from the recognition of deferred tax assets related to tax losses and temporary differences of prior periods following the reassessment of their recoverability. As a result, deferred tax expense decreased by 12,737 million yen and 57,536 million yen, respectively. No such benefits were recognized for the year ended March 31, 2024, as the recognition criteria for deferred tax assets were not met.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)For details, refer to the changes in deferred tax assets and liabilities at the section (1) above.

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(4)Amendments to the Japanese tax regulations were enacted into law on March 31, 2025. As a result of these amendments, the Japanese statutory effective tax rate is scheduled to be increased from 31.46% to approximately 32.34% effective from the year ending March 31, 2027. The Group measured deferred tax assets and deferred tax liabilities at the tax rates that are expected to apply to the period when the assets are realized or the liabilities are settled.

(5)Reconciliation of the Statutory Effective Tax Rate and the Actual Effective Tax Rate

The reconciliation of the statutory effective tax rate and the actual effective tax rate are as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended** | **For the year ended** | **For the year ended** |
|  | **March 31, 2024** | **March 31, 2025** | **March 31, 2026** |
| Japanese statutory effective tax rate <sup>(1)</sup> | 31.46% | 31.46% | 31.46% |
| &nbsp;&nbsp;&nbsp;Permanent non-deductible items | 877.15 | (0.46) | (0.05) |
| &nbsp;&nbsp;&nbsp;Assessment of the recoverability of deferred<br> tax assets | 10522.38 | (41.39) | (79.80) |
| &nbsp;&nbsp;&nbsp;Additional taxable profit <sup>(2)</sup> | 341.31 | 1.23 | 0.46 |
| &nbsp;&nbsp;&nbsp;Change in tax rate <sup>(3)</sup> | 1441.10 | (3.37) | 0.83 |
| &nbsp;&nbsp;&nbsp;Tax credits | (2773.17) | (0.92) | (0.65) |
| &nbsp;&nbsp;&nbsp;Share of loss of investments accounted<br> for using the equity method |  | 0.49 | 0.05 |
| &nbsp;&nbsp;&nbsp;Tax rate difference between subsidiaries | (989.88) | 0.58 | 0.30 |
| &nbsp;&nbsp;&nbsp;Other | (2004.09) | 0.38 | 0.04 |
| Actual effective tax rate | 7446.26% | (12.00)% | (47.36)% |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Japanese statutory effective tax rate is calculated based on corporate tax, inhabitant tax and enterprise tax applicable to the Group.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)For added value component of the enterprise tax, there are certain additional taxable items such as employee benefit expenses that are included in taxable profit and loss carryforward cannot be utilized.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)Due to tax reform enacted during the year ended March 31, 2024, a certain subsidiary will apply the size-based enterprise tax from the year ending March 31, 2027. Amendments to the Japanese tax regulations were enacted into law on March 31, 2025. As a result of these amendments, the Japanese statutory effective tax rate is scheduled to be increased from 31.46% to approximately 32.34% effective from the year ending March 31, 2027. The Group measured deferred tax assets and deferred tax liabilities at the tax rates that are expected to apply to the period when the assets are realized or the liabilities are settled.

**19. Other Assets**

Other assets are as follows:

---

| | | |
|:---|:---|:---|
|  |  | *(In millions of yen)* |
|  | **March 31, 2025** | **March 31, 2026** |
| Customer incentives <sup>(1)</sup> | 20504 | 17194 |
| Incremental costs of obtaining a contract <sup>(2)</sup> | 8882 | 12077 |
| Prepaid expenses | 6497 | 6905 |
| Income tax receivables | 328 | 604 |
| Other | 790 | 931 |
| Total | 37001 | 37711 |

---

(1)The Group has consideration payable to a customer for PayPay Points for cardholders. PayPay Points for cardholders are capitalized based on recoverability and those that are not recoverable are expensed as incurred. Capitalized points are amortized on a straight-line basis over the period of ten years from which the related revenue is expected to be recognized when cardholders use their credit cards.

The amortization expenses recorded as a reduction of revenue for the years ended March 31, 2025 and 2026 were 4,464 million yen, and 4,473 million yen, respectively.

(2)Refer to Note 30, *Revenue* for further details of incremental costs of obtaining a contract.

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**20. Deposits**

Deposits are as follows:

---

| | | |
|:---|:---|:---|
|  |  | *(In millions of yen)* |
|  | **March 31, 2025** | **March 31, 2026** |
| **Payment:** |  |  |
| &nbsp;&nbsp;&nbsp;PayPay Users' deposits <sup>(1)(2)</sup> | 391595 | 451263 |
| &nbsp;&nbsp;&nbsp;Subtotal | 391595 | 451263 |
| **Financial service:** |  |  |
| &nbsp;&nbsp;&nbsp;Deposits from customers in the banking business |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Demand deposits | 1688643 | 2090486 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Time deposits | 152393 | 178594 |
| &nbsp;&nbsp;&nbsp;Deposits from customers in the securities intermediary business | 142236 | 221374 |
| &nbsp;&nbsp;&nbsp;Other | 11072 | 10778 |
| &nbsp;&nbsp;&nbsp;Subtotal | 1994344 | 2501232 |
| Total | 2385939 | 2952495 |

---

(1)PayPay Users' deposits are PayPay Balance and Other Items held by PayPay Users in PayPay Settlement Services. For further details of PayPay Balance and Other Items, refer to financial instruments section within Note 3, *Material Accounting Policies*.

(2)PayPay Users' deposits include PayPay Money which PayPay Users can withdraw at users' discretion. The balance of PayPay Money amounts to 170,030 million yen and 212,179 million yen as of March 31, 2025 and 2026, respectively.

**21. Accounts Payable**

Accounts payable are as follows:

---

| | | |
|:---|:---|:---|
|  |  | *(In millions of yen)* |
|  | **March 31, 2025** | **March 31, 2026** |
| Settlement payable <sup>(1)</sup> | 902682 | 1069525 |
| Credit card payable <sup>(1)</sup> | 27913 | 30867 |
| Other payables <sup>(1)</sup> | 18802 | 21946 |
| Total | 949397 | 1122338 |

---

(1)These accounts payable are classified as financial liabilities measured at amortized cost.

**22.** Borrowings and Lease Liabilities

(1)Components of Borrowings and Lease Liabilities

Components of borrowings and lease liabilities are as follows:

---

| | | |
|:---|:---|:---|
|  | *(In millions of yen)* | *(In millions of yen)* |
|  | **March 31, 2025** | **March 31, 2026** |
| **Borrowings** |  |  |
| &nbsp;&nbsp;&nbsp;**Payment:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loan payables <sup>(1)</sup> | 213050 | 280825 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commercial papers <sup>(2)</sup> | 84000 | 73000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subtotal | 297050 | 353825 |
| &nbsp;&nbsp;&nbsp;**Financial service:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loan payables <sup>(1)</sup> | 102528 | 211131 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subtotal | 102528 | 211131 |
| &nbsp;&nbsp;&nbsp;Total | 399578 | 564956 |
| **Lease liabilities** |  |  |
| &nbsp;&nbsp;&nbsp;Payment | 11121 | 9096 |
| &nbsp;&nbsp;&nbsp;Financial service | 976 | 453 |
| &nbsp;&nbsp;&nbsp;Total | 12097 | 9549 |

---

(1)The weighted average interest rates of the outstanding loan payables as of March 31, 2025 and 2026 were 0.55% and 0.80%, respectively.

(2)The weighted average interest rates of the outstanding commercial papers as of March 31, 2025 and 2026 were 0.59% and 0.95%, respectively.

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*Significant financial covenants on the loan payables of PayPay Card Corporation*

PayPay Card Corporation is subject to the following financial covenants with respect to a portion of its loan payables from financial institutions and was in compliance with such covenants for the years ended March 31, 2025 and 2026. All financial covenants are determined based on PayPay Card Corporation stand-alone financial information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Net assets as of each fiscal year-end should be equal to or greater than 75% of the net assets as of the end of the previous fiscal year or March 31, 2021, whichever is higher.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Should not incur operating losses or ordinary losses for two consecutive fiscal years.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)Required to remain a subsidiary of LY Corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)Must maintain a minimum issuer rating of BBB- by a rating agency, and in absence of such rating, LY Corporation must maintain a minimum issuer rating of BBB+.

(2)Changes in Liabilities Arising from Financing Activities

The table below details changes in the Group's liabilities arising from financing activities, including both cash flows and non-cash transactions. Liabilities arising from financing activities are those for which cash flows were, or future cash flows will be, classified as cash flows from financing activities in the Group's Consolidated Statements of Cash Flows.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **For the year ended March 31, 2024** |  |  | *(In millions of yen)* | *(In millions of yen)* | *(In millions of yen)* |
|  |  |  | **Non-cash transactions** | **Non-cash transactions** |  |
|  | **Carrying amount<br>as of April 1,<br>2023** | **Cash flows** | **Addition** <sup>(1)</sup> | **Decrease** | **Carrying amount<br>as of March 31, <br>2024** |
| Loan payables | 361540 | 129678 |  |  | 491218 |
| Commercial papers | 133000 | (21000) |  |  | 112000 |
| Lease liabilities | 8698 | (2409) | 1837 | (392) | 7734 |
| Total | 503238 | 106269 | 1837 | (392) | 610952 |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **For the year ended March 31, 2025** |  |  | *(In millions of yen)* | *(In millions of yen)* | *(In millions of yen)* |
|  |  |  | **Non-cash transactions** | **Non-cash transactions** |  |
|  | **Carrying amount<br>as of April 1,<br>2024** | **Cash flows** | **Addition** <sup>(1)</sup> | **Decrease** | **Carrying amount<br>as of March 31, <br>2025** |
| Loan payables | 491218 | (176298) | 658 |  | 315578 |
| Commercial papers | 112000 | (28000) |  |  | 84000 |
| Lease liabilities | 7734 | (2820) | 7204 | (21) | 12097 |
| Total | 610952 | (207118) | 7862 | (21) | 411675 |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **For the year ended March 31, 2026** |  |  | *(In millions of yen)* | *(In millions of yen)* | *(In millions of yen)* |
|  |  |  | **Non-cash transactions** | **Non-cash transactions** |  |
|  | **Carrying amount<br>as of April 1,<br>2025** | **Cash flows** | **Addition** | **Decrease** | **Carrying amount<br>as of March 31,<br>2026** |
| Loan payables | 315578 | 176378 |  |  | 491956 |
| Commercial papers | 84000 | (11000) |  |  | 73000 |
| Lease liabilities | 12097 | (2744) | 307 | (111) | 9549 |
| Total | 411675 | 162634 | 307 | (111) | 574505 |

---

(1) Addition of lease liabilities and loan payables mainly resulted from new contracts.

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**23. Other Financial Liabilities**

Other financial liabilities are as follows:

---

| | | |
|:---|:---|:---|
|  | *(In millions of yen)* | *(In millions of yen)* |
|  | **March 31, 2025** | **March 31, 2026** |
| Advances received <sup>(1)</sup> | 12016 | 22158 |
| Suspense receipt <sup>(1)(2)</sup> | 12826 | 14699 |
| Accrued expenses | 6840 | 7128 |
| Trade date accrual <sup>(1)</sup> | 1336 | 2440 |
| Derivative liabilities <sup>(3)</sup> | 1186 | 1368 |
| Other | 3 | 323 |
| Total | 34207 | 48116 |

---

(1)These liabilities are classified as financial liabilities measured at amortized cost.

(2)Suspense receipt primarily consists of PayPay Points Code, which can be used by PayPay Users to fund their PayPay Balance and Other Items.

(3)These liabilities are classified as financial liabilities measured at FVTPL.

**24. Provisions**

Changes in provisions are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  |  |  |  | *(In millions of yen)* |
|  | **Loss allowance for<br>undrawn loan<br>commitments** | **Asset<br>retirement<br>obligations** | **Other** | **Total** |
| **Balance as of April 1, 2024** | 5166 | 2102 | 27 | 7295 |
| &nbsp;&nbsp;&nbsp;Changes in ECL | (1836) |  |  | (1836) |
| &nbsp;&nbsp;&nbsp;Additions |  | 1841 |  | 1841 |
| &nbsp;&nbsp;&nbsp;Unwinding of discount |  | 3 |  | 3 |
| &nbsp;&nbsp;&nbsp;Utilized |  | (83) | (27) | (110) |
| &nbsp;&nbsp;&nbsp;Other |  | (152) |  | (152) |
| **Balance as of March 31, 2025** | 3330 | 3711 |  | 7041 |
| &nbsp;&nbsp;&nbsp;Changes in ECL | 22 |  |  | 22 |
| &nbsp;&nbsp;&nbsp;Additions |  | 19 | 1 | 20 |
| &nbsp;&nbsp;&nbsp;Unwinding of discount |  | 22 |  | 22 |
| &nbsp;&nbsp;&nbsp;Utilized |  | (282) |  | (282) |
| &nbsp;&nbsp;&nbsp;Other |  | 580 |  | 580 |
| **Balance as of March 31, 2026** | 3352 | 4050 | 1 | 7403 |

---

*Loss allowance for undrawn loan commitments*

The lending commitments of the Group mainly consist of the shopping limits and cashing limits that are granted to customers in the Group's credit card business.

The total amount of the undrawn balances as of year end is as follows:

---

| | | |
|:---|:---|:---|
|  | *(In millions of yen)* | *(In millions of yen)* |
|  | **March 31, 2025** | **March 31, 2026** |
| &nbsp;&nbsp;&nbsp;Undrawn loan commitments | 9,954,633 | 10,622,322 |

---

The undrawn balance of the shopping limit and cash advance limit does not indicate that the total amount of the balance will be used in the future because customers may use the credit card up to the limit at any time and do not always use the full amount of the limit and the Group may change the limit at its discretion. Also, since any amounts drawn by customers are repayable on demand, the Company considers the undrawn lending commitments are due within one year.

*Asset retirement obligations*

The Group recognizes asset retirement obligations for restoring leased properties to their original conditions upon termination of the lease contract based on contracts and agreements. The asset retirement obligations are measured using a discounted cash flow model at a pre-tax discount rate which can be reasonably estimated. The estimated future cash flow represents the management's best estimates of the expenses expected to be incurred for restoring an asset to its original condition specified in the lease contracts.

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These expenses are expected to be paid after the estimated period of use. However, the amounts will be affected by future business plans including extension or termination of lease contracts.

**25. Other Liabilities**

Other liabilities are as follows:

---

| | | |
|:---|:---|:---|
|  |  | *(In millions of yen)* |
|  | **March 31, 2025** | **March 31, 2026** |
| Consumption tax payables | 9118 | 8474 |
| Accrued bonuses | 4647 | 6327 |
| Accrued paid leave | 4105 | 4968 |
| Contract liabilities | 2900 | 4295 |
| Other tax payables | 819 | 1484 |
| Other | 1672 | 1567 |
| Total | 23261 | 27115 |

---

**26. Employee Benefits**

(1)Defined Contribution Plan

The amounts recognized as operating expenses in the Group's Consolidated Statements of Profit or Loss in respect of the defined contribution plans, including publicly provided plans, are as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  |  |  |  |  | *(In millions of yen)* | *(In millions of yen)* |
|  | **For the year ended** | **For the year ended** | **For the year ended** | **For the year ended** | **For the year ended** | **For the year ended** |
|  | **March 31, 2024** | **March 31, 2024** | **March 31, 2025** | **March 31, 2025** | **March 31, 2026** | **March 31, 2026** |
| Contribution |  | 3,459 |  | 3,910 |  | 4,266 |

---

(2)Employee Benefit Expenses

Employee benefit expenses included in operating expenses in the Group's Consolidated Statements of Profit or Loss are 37,764 million yen, 41,483 million yen and 47,641 million yen for the years ended March 31, 2024, 2025 and 2026, respectively. For further details, refer to Note 33, *Operating Expenses*.

Employee benefit expenses include salaries, bonuses, statutory welfare expenses. Refer to Note 38, *Related Party Transactions* for details of compensation of key management personnel.

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**27. Classification of Current and Non-current**

**As of March 31, 2025**

---

| | | | |
|:---|:---|:---|:---|
|  |  |  | *(In millions of yen)* |
|  | **Collection or settlement period** | **Collection or settlement period** |  |
|  | **12 months or less** | **Over 12 months** | **Total** |
| **Asset**s |  |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | 369811 |  | 369811 |
| &nbsp;&nbsp;&nbsp;Guarantee deposits | 244229 |  | 244229 |
| &nbsp;&nbsp;&nbsp;Call loans | 63000 |  | 63000 |
| &nbsp;&nbsp;&nbsp;Accounts receivable | 141054 |  | 141054 |
| &nbsp;&nbsp;&nbsp;Loans and advances to customers | 794538 | 1133069 | 1927607 |
| &nbsp;&nbsp;&nbsp;Securities | 225867 | 849881 | 1075748 |
| &nbsp;&nbsp;&nbsp;Other financial assets | 19372 | 3758 | 23130 |
| &nbsp;&nbsp;&nbsp;Property and equipment |  | 14493 | 14493 |
| &nbsp;&nbsp;&nbsp;Right-of-use assets |  | 14799 | 14799 |
| &nbsp;&nbsp;&nbsp;Intangible assets |  | 65672 | 65672 |
| &nbsp;&nbsp;&nbsp;Goodwill |  | 15157 | 15157 |
| &nbsp;&nbsp;&nbsp;Investment accounted for using the equity method |  | 1012 | 1012 |
| &nbsp;&nbsp;&nbsp;Deferred tax assets |  | 49392 | 49392 |
| &nbsp;&nbsp;&nbsp;Other assets | 5742 | 31259 | 37001 |
| **Total assets** | 1863613 | 2178492 | 4042105 |
| **Liabilitie**s |  |  |  |
| &nbsp;&nbsp;&nbsp;Deposits | 2371052 | 14887 | 2385939 |
| &nbsp;&nbsp;&nbsp;Accounts payable | 949396 | 1 | 949397 |
| &nbsp;&nbsp;&nbsp;Income tax payables | 6477 |  | 6477 |
| &nbsp;&nbsp;&nbsp;Borrowings | 201978 | 197600 | 399578 |
| &nbsp;&nbsp;&nbsp;Other financial liabilities | 34203 | 4 | 34207 |
| &nbsp;&nbsp;&nbsp;Provisions | 3662 | 3379 | 7041 |
| &nbsp;&nbsp;&nbsp;Lease liabilities | 2739 | 9358 | 12097 |
| &nbsp;&nbsp;&nbsp;Deferred tax liabilities |  | 377 | 377 |
| &nbsp;&nbsp;&nbsp;Other liabilities | 22610 | 651 | 23261 |
| **Total liabilities** | 3592117 | 226257 | 3818374 |

---

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**As of March 31, 2026**

---

| | | | |
|:---|:---|:---|:---|
|  |  |  | *(In millions of yen)* |
|  | **Collection or settlement period** | **Collection or settlement period** |  |
|  | **12 months or less** | **Over 12 months** | **Total** |
| **Assets** |  |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | 363083 |  | 363083 |
| &nbsp;&nbsp;&nbsp;Guarantee deposits | 74139 |  | 74139 |
| &nbsp;&nbsp;&nbsp;Call loans | 40014 |  | 40014 |
| &nbsp;&nbsp;&nbsp;Accounts receivable | 150372 |  | 150372 |
| &nbsp;&nbsp;&nbsp;Loans and advances to customers | 1045113 | 1467738 | 2512851 |
| &nbsp;&nbsp;&nbsp;Securities | 344867 | 1391968 | 1736835 |
| &nbsp;&nbsp;&nbsp;Other financial assets | 29324 | 2969 | 32293 |
| &nbsp;&nbsp;&nbsp;Property and equipment |  | 14879 | 14879 |
| &nbsp;&nbsp;&nbsp;Right-of-use assets |  | 12175 | 12175 |
| &nbsp;&nbsp;&nbsp;Intangible assets |  | 66466 | 66466 |
| &nbsp;&nbsp;&nbsp;Goodwill |  | 15157 | 15157 |
| &nbsp;&nbsp;&nbsp;Investments accounted for using the equity method |  | 12762 | 12762 |
| &nbsp;&nbsp;&nbsp;Deferred tax assets |  | 107275 | 107275 |
| &nbsp;&nbsp;&nbsp;Other assets | 6668 | 31043 | 37711 |
| **Total assets** | 2053580 | 3122432 | 5176012 |
| **Liabilities** |  |  |  |
| &nbsp;&nbsp;&nbsp;Deposits | 2935149 | 17346 | 2952495 |
| &nbsp;&nbsp;&nbsp;Accounts payable | 1122338 |  | 1122338 |
| &nbsp;&nbsp;&nbsp;Income tax payables | 13073 |  | 13073 |
| &nbsp;&nbsp;&nbsp;Borrowings | 391681 | 173275 | 564956 |
| &nbsp;&nbsp;&nbsp;Other financial liabilities | 47793 | 323 | 48116 |
| &nbsp;&nbsp;&nbsp;Provisions | 3412 | 3991 | 7403 |
| &nbsp;&nbsp;&nbsp;Lease liabilities | 2322 | 7227 | 9549 |
| &nbsp;&nbsp;&nbsp;Deferred tax liabilities |  | 206 | 206 |
| &nbsp;&nbsp;&nbsp;Other liabilities | 26701 | 414 | 27115 |
| **Total liabilities** | 4542469 | 202782 | 4745251 |

---

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**28. Issued Capital and Reserves**

(1)Authorized Shares and Issued Capital

The movement of authorized shares and shares issued is as follows:

---

| | | |
|:---|:---|:---|
|  | *(In thousands of shares)* | *(In thousands of shares)* |
|  | **Number of<br>authorized shares** | **Number of <br>shares issued**<br> <sup>(3)(4)</sup> |
| Common shares <sup>(1)(2)</sup> |  |  |
| &nbsp;&nbsp;&nbsp;April 1, 2023 | 1600000 | 550000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Increase during the year |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Decrease during the year |  |  |
| &nbsp;&nbsp;&nbsp;March 31, 2024 | 1600000 | 550000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Increase during the year |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Decrease during the year |  |  |
| &nbsp;&nbsp;&nbsp;March 31, 2025 | 1600000 | 550000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Increase during the year <sup>(3)</sup> |  | 126956 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Decrease during the year |  |  |
| &nbsp;&nbsp;&nbsp;March 31, 2026 <sup>(4)</sup> | 1600000 | 676956 |
|  | **Number of<br>authorized shares** | **Number of <br>shares issued** |
| Class A preferred shares <sup>(5)</sup> |  |  |
| &nbsp;&nbsp;&nbsp;April 1, 2023 | 400000 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Increase during the year |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Decrease during the year <sup>(6)</sup> | (400000) |  |
| &nbsp;&nbsp;&nbsp;March 31, 2024 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Increase during the year |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Decrease during the year |  |  |
| &nbsp;&nbsp;&nbsp;March 31, 2025 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Increase during the year |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Decrease during the year |  |  |
| &nbsp;&nbsp;&nbsp;March 31, 2026 |  |  |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Holders of common shares are entitled to receive dividends. Each common share carries one vote at general meetings of shareholders. All shares issued by the Group have no par value and the Group holds no Treasury Shares of the Company. Common shares are reserved for issue under outstanding share options. Refer to Note 35, *Share-based Payments* for details of the number of common shares and the relevant terms.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)The Company conducted a share split, which became effective on November 15, 2025. Under the share split, the Company's common shares were split at a ratio of 200 shares for one share. The number of shares presented above are retrospectively adjusted in respect of the share split.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)In April 2025, the Company implemented a third-party allotment of new shares to SoftBank Corp., LY Corporation, and SVF II Piranha (DE) LLC, and all of the 1st Stock Options issued by the Company and held by SVF II Piranha (DE) LLC were exercised. Additionally, in March 2026, in conjunction with the initial public offering on the Nasdaq Global Select Market, the Company implemented an allotment of new shares, and a portion of the stock options were exercised. Refer to Note 35, *Share-based Payments* and Note 38, *Related Party Transactions* for further detail.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)All common shares are fully paid as of March 31 2026, except for 82,000 common shares issued upon the exercise of stock options in March 2026, for which payment had not yet been received.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)Class A preferred shares have no voting rights, and have preference in dividend payments, while both of Class A preferred shares and common shares have the same rights to residual assets of the Group. The holders of Class A preferred shares have right of conversion of one Class A preferred share to one common share on and after April 1, 2022.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6)Decrease due to the abolishment of the provision in the articles of incorporation related to Class A preferred shares.

(2)Share Premium and Retained Earnings

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Share Premium

<u>Legal capital reserve</u>

Under the Companies Act, at least 50% of the proceeds of certain issuances of share capital shall be credited to issued capital. The remaining proceeds shall be credited to share premium. The Companies Act permits, upon approval at the general shareholders' meeting, the transfer of amounts from share premium to issued capital.

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<u>Transaction costs of equity transaction</u>

Transaction costs of an equity transaction are directly deducted from share premium. The amount deducted for the year ended March 31, 2026 was 1,002 million yen.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Retained Earnings

<u>Legal earnings reserve</u>

The Companies Act requires that an amount equal to at least 10% of dividends from surplus, as defined under the Companies Act, shall be appropriated as capital reserve (part of share premium), or appropriated for legal earnings reserve (part of retained earnings) until the aggregate amount of capital reserve and legal earnings reserve is equal to 25% of share capital. The legal earnings reserve may be used to eliminate or reduce a deficit or be transferred to other retained earnings upon approval at the general shareholders' meetings.

(3)Accumulated other comprehensive income (loss)

Changes in accumulated other comprehensive income (loss) are as follows:

---

| | | |
|:---|:---|:---|
|  |  | *(In millions of yen)* |
|  | **Changes in debt<br>instruments<br>measured at<br>FVTOCI** | **Exchange<br>differences on<br>translation of<br>foreign<br>operations** |
| Balance as of April 1, 2024 | (123) | 4 |
| &nbsp;&nbsp;&nbsp;Other comprehensive income (loss) (attributable to<br> owners of the parent company) | (250) | (10) |
| Balance as of March 31, 2025 | (373) | (6) |
| &nbsp;&nbsp;&nbsp;Other comprehensive income (loss) (attributable to<br> owners of the parent company) | (2634) | (10) |
| &nbsp;&nbsp;&nbsp;Other | (32) |  |
| Balance as of March 31, 2026 | (3039) | (16) |

---

**29. Dividends**

The following dividends paid by the Group were included in the Group's Consolidated Statements of Changes in Equity for the years ended March 31, 2024, 2025 and 2026.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Class of shares** | **Amount of<br>dividends<br>(In millions of yen)** | **Dividends per<br>share<br>(Yen)** | **Effective date** |
| **For the year ended March 31, 2024** |  |  |  |  |
| PayPay Bank Corporation June 22, 2023,<br> general meeting of shareholders | Common shares | 783 | 1030 | June 23, 2023 |
|  | Class A preferred stock | 1000 | 1133 | June 23, 2023 |
| **For the year ended March 31, 2025** |  |  |  |  |
| PayPay Bank Corporation June 21, 2024,<br> general meeting of shareholders | Common shares | 1228 | 1616 | June 24, 2024 |
|  | Class A preferred stock | 1574 | 1782 | June 24, 2024 |
| **For the year ended March 31, 2026** |  |  |  |  |
| PayPay Bank Corporation June 24, 2025,<br> general meeting of shareholders | Common shares | 1413 | 1860 | &nbsp;&nbsp;&nbsp;&nbsp;June 25, 2025 |
|  | Class A preferred stock | 1806 | 2046 | &nbsp;&nbsp;&nbsp;&nbsp;June 25, 2025 |

---

Dividends applicable to the owners of the parent company included in the total cash dividends for the years ended March 31, 2024, 2025 and 2026 were 179 million yen, 283 million yen and 311 million yen, respectively.

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**30. Revenue**

(1)Disaggregation of Revenue

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Revenue recognized from contracts with customers and other sources

---

| | | | |
|:---|:---|:---|:---|
|  |  | *(In millions of yen)* | *(In millions of yen)* |
|  | **For the year ended** | **For the year ended** | **For the year ended** |
|  | **March 31, 2024** | **March 31, 2025** | **March 31, 2026** |
| Revenue from contracts with customers |  |  |  |
| &nbsp;&nbsp;&nbsp;Transaction and service income | 174127 | 203595 | 251041 |
| Revenue from other sources |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest income <sup>(1)</sup> | 73884 | 88442 | 116488 |
| &nbsp;&nbsp;&nbsp;Gains (losses) on financial instruments | 4641 | 5529 | 10250 |
| &nbsp;&nbsp;&nbsp;Other operating income | 1959 | 1512 | 2883 |
| Total | 254611 | 299078 | 380662 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)The Group pays guarantee fees to third-party financial institutions to mitigate the credit risk of loans and advances to customers. These guarantee fees are an integral part of the loan arrangement. In accordance with IFRS 9, these guarantee fees are included in the calculation under the effective interest rate method and therefore reduce interest income. The guarantee fees were 14,707 million yen, 18,163 million yen and 20,747 million yen for the years ended March 31, 2024, 2025 and 2026, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Disaggregation of revenue from contracts with customers by type of service

---

| | | | |
|:---|:---|:---|:---|
| **For the year ended March 31, 2024** |  |  |  |
|  |  | *(In millions of yen)* | *(In millions of yen)* |
|  | **Payment** | **Financial<br>service** | **Total** |
| Payment Settlement Services |  |  |  |
| &nbsp;&nbsp;&nbsp;PayPay Settlement Services | 151673 |  | 151673 |
| &nbsp;&nbsp;&nbsp;Credit Payment Settlement Services and Acquiring<br> Services <sup>(1)</sup> | 31917 |  | 31917 |
| &nbsp;&nbsp;&nbsp;Debit Payment Settlement Services |  | 4731 | 4731 |
| &nbsp;&nbsp;&nbsp;Payment settlement services deduction <sup>(2)</sup> | (52669) | (1171) | (53840) |
| &nbsp;&nbsp;&nbsp;Subtotal | 130921 | 3560 | 134481 |
| Financial Services |  | 20867 | 20867 |
| Other <sup>(3)(4)</sup> | 18389 | 390 | 18779 |
| Total <sup>(5)(6)</sup> | 149310 | 24817 | 174127 |

---

---

| | | | |
|:---|:---|:---|:---|
| **For the year ended March 31, 2025** |  |  |  |
|  |  | *(In millions of yen)* | *(In millions of yen)* |
|  | **Payment** | **Financial<br>service** | **Total** |
| Payment Settlement Services |  |  |  |
| &nbsp;&nbsp;&nbsp;PayPay Settlement Services | 193237 |  | 193237 |
| &nbsp;&nbsp;&nbsp;Credit Payment Settlement Services and Acquiring Services <sup>(1)</sup> | 37192 |  | 37192 |
| &nbsp;&nbsp;&nbsp;Debit Payment Settlement Services |  | 5077 | 5077 |
| &nbsp;&nbsp;&nbsp;Payment settlement services deduction <sup>(2)</sup> | (77161) | (1309) | (78470) |
| &nbsp;&nbsp;&nbsp;Subtotal | 153268 | 3768 | 157036 |
| Financial Services |  | 22269 | 22269 |
| Other <sup>(3)(4)</sup> | 23329 | 961 | 24290 |
| Total <sup>(5)(6)</sup> | 176597 | 26998 | 203595 |

---

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---

| | | | |
|:---|:---|:---|:---|
| **For the year ended March 31, 2026** |  |  |  |
|  |  | *(In millions of yen)* | *(In millions of yen)* |
|  | **Payment** | **Financial<br>service** | **Total** |
| Payment Settlement Services |  |  |  |
| &nbsp;&nbsp;&nbsp;PayPay Settlement Services | 245799 |  | 245799 |
| &nbsp;&nbsp;&nbsp;Credit Payment Settlement Services and Acquiring Services <sup>(1)</sup> | 46019 |  | 46019 |
| &nbsp;&nbsp;&nbsp;Debit Payment Settlement Services |  | 5468 | 5468 |
| &nbsp;&nbsp;&nbsp;Payment settlement services deduction <sup>(2)</sup> | (100358) | (1413) | (101771) |
| &nbsp;&nbsp;&nbsp;Subtotal | 191460 | 4055 | 195515 |
| Financial Services |  | 24706 | 24706 |
| Other <sup>(3)(4)</sup> | 29310 | 1510 | 30820 |
| Total <sup>(5)(6)</sup> | 220770 | 30271 | 251041 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Revenue from Credit Payment Settlement Services and Acquiring Services is presented net of interchange fees charged by the credit card issuer in respect of Acquiring Services, as the Group recognizes revenue based on the settlement amount of the purchase transaction and the predetermined rate, less such interchange fees. The interchange fees were 12,427 million yen, 10,819 million yen and 11,023 million yen for the years ended March 31, 2024, 2025 and 2026, respectively. Refer to the major revenue streams section within Note 3, *Material Accounting Policies* for more details.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Payment settlement services deduction mainly consists of rewards given to customers, all the deduction is related to the Payment Settlement Services only.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)Other in the Payment segment includes revenues primarily earned from a monthly paid subscription plan for PayPay Merchants, and is presented net of a revenue deduction, which amounts to 1,870 million yen, 3,408 million yen and 4,554 million yen for the years ended March 31, 2024, 2025 and 2026, respectively. These deductions mainly relate to consideration payable to customers in connection with annual membership fees for a certain type of PayPay Card.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)Other in the Financial service segment includes revenues primarily earned from system platform services provided by Credit Engine, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)Almost all revenues from external customers of the Group were generated in Japan, which is the Company's country of domicile, for the years ended March 31, 2024, 2025 and 2026.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6)For further details of each service category, refer to major revenue streams section within Note 3, *Material Accounting Policies*.

(2)Assets Recognized from the Incremental Costs of Obtaining a Contract

Contract costs are incurred mainly in the PayPay Card's business.

The Group outsources marketing activities to third-party companies to promote card membership and pays commissions to the third-party companies based on the number of new cardholders acquired by the Group through the third-party companies' promotions. The commission payment represents an incremental cost of obtaining a contract, because it is a cost that would not have been incurred if the contract for the Credit Payment Settlement Services had not been obtained.

Since August 2024, the Group also outsources marketing activities to a joint venture, PayPay SC Corporation to promote PayPay Settlement Services and pays commissions to the joint venture based on the number of new merchants acquired by the Group through the joint venture's promotions. The commission payment represents an incremental cost of obtaining a contract, because it is a cost that would not have been incurred if the contract for the PayPay Settlement Services had not been obtained.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | *(In millions of yen)* | *(In millions of yen)* | *(In millions of yen)* | *(In millions of yen)* |
|  | **March 31, 2025** | **March 31, 2025** | **March 31, 2026** | **March 31, 2026** |
| Assets recognized from the costs to obtain contracts with customers |  | 8,882 |  | 12,077 |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  |  |  | *(In millions of yen)* | *(In millions of yen)* | *(In millions of yen)* | *(In millions of yen)* |
|  | **For the year ended** | **For the year ended** | **For the year ended** | **For the year ended** | **For the year ended** | **For the year ended** |
|  | **March 31, 2024** | **March 31, 2024** | **March 31, 2025** | **March 31, 2025** | **March 31, 2026** | **March 31, 2026** |
| Amortization expenses of assets recognized<br> from the costs to obtain contracts with<br> customers |  | 1,043 |  | 1,297 |  | 1,724 |

---

(3)Consideration Payable to a Customer

For consideration payable to a customer accounted for as an asset, refer to customer incentives in Note 19, *Other Assets*.

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**31. Income and Expenses on Financial Instruments**

## Income and Expenses on Financial Instruments are as follows:
**For the year ended March 31, 2024**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  |  |  |  |  | *(in millions of yen)* | *(in millions of yen)* |
|  | **Financial<br>assets<br>measured<br>at FVTPL** | **Debt<br>instruments<br>measured at<br>FVTOCI** | **Equity<br>instruments<br>measured at<br>FVTOCI** | **Financial<br>assets<br>measured at<br>amortized<br>cost** | **Financial<br>liabilities<br>measured at<br>amortized<br>cost** | **Derivative<br>instruments** | **Total** |
| **Income** |  |  |  |  |  |  |  |
| Gains (losses) on financial<br> instruments |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net gains (losses) recognized in<br> profit or loss | 42073 | 43 |  | 33 | 412 | (38612) | 3949 |
| &nbsp;&nbsp;&nbsp;&nbsp;Dividend income | 692 |  | 0 |  |  |  | 692 |
| Subtotal | 42765 | 43 | 0 | 33 | 412 | (38612) | 4641 |
| Interest income |  | 1577 |  | 72247 |  | 60 | 73884 |
| **Expenses** |  |  |  |  |  |  |  |
| Interest expenses <sup>(1)</sup> |  |  |  |  | 1930 | 1 | 1931 |
| Impairment losses (gains) on<br> financial assets <sup>(2)(3)</sup> |  |  |  | 18881 |  |  | 18881 |

---

**For the year ended March 31, 2025**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  |  |  |  |  | *(in millions of yen)* | *(in millions of yen)* |
|  | **Financial<br>assets<br>measured<br>at FVTPL** | **Debt<br>instruments<br>measured at<br>FVTOCI** | **Equity<br>instruments<br>measured at<br>FVTOCI** | **Financial<br>assets<br>measured at<br>amortized<br>cost** | **Financial<br>liabilities<br>measured at<br>amortized<br>cost** | **Derivative<br>instruments** | **Total** |
| **Income** |  |  |  |  |  |  |  |
| Gains (losses) on financial<br> instruments |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net gains (losses) recognized in<br> profit or loss | 7401 | (90) |  | 667 | (3) | (3680) | 4295 |
| &nbsp;&nbsp;&nbsp;&nbsp;Dividend income | 1234 |  | 0 |  |  |  | 1234 |
| Subtotal | 8635 | (90) | 0 | 667 | (3) | (3680) | 5529 |
| Interest income | (147) | 1850 |  | 86689 |  | 50 | 88442 |
| **Expenses** |  |  |  |  |  |  |  |
| Interest expenses <sup>(1)</sup> |  |  |  |  | 4253 | 1 | 4254 |
| Impairment losses (gains) on<br> financial assets <sup>(2)(3)</sup> |  |  |  | 26468 |  |  | 26468 |

---

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**For the year ended March 31, 2026**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  |  |  |  |  | *(in millions of yen)* | *(in millions of yen)* |
|  | **Financial<br>assets<br>measured<br>at FVTPL** | **Debt<br>instruments<br>measured at<br>FVTOCI** | **Equity<br>instruments<br>measured at<br>FVTOCI** | **Financial<br>assets<br>measured at<br>amortized<br>cost** | **Financial<br>liabilities<br>measured at <br>amortized<br>cost** | **Derivative<br>instruments** | **Total** |
| **Income** |  |  |  |  |  |  |  |
| Gains (losses) on financial<br> instruments |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net gains (losses) recognized in<br> profit or loss | 58250 | 66 |  | 2524 | (154) | (51524) | 9162 |
| &nbsp;&nbsp;&nbsp;&nbsp;Dividend income | 1088 |  | 0 |  |  |  | 1088 |
| Subtotal | 59338 | 66 | 0 | 2524 | (154) | (51524) | 10250 |
| Interest income | 6 | 3218 |  | 113237 |  | 27 | 116488 |
| **Expenses** |  |  |  |  |  |  |  |
| Interest expenses <sup>(1)</sup> |  |  |  |  | 10588 | 2 | 10590 |
| Impairment losses (gains) on<br> financial assets <sup>(2)(3)</sup> | 1 |  |  | 25640 |  |  | 25641 |

---

(1)Interest expenses are included in other operating expenses presented in the Consolidated Statements of Profit or Loss.

(2)Impairment losses (gains) on financial assets are included in provision for loss allowance presented in the Consolidated Statements of Profit or Loss.

(3)The following adjustments would reconcile impairment losses (gains) on financial assets with provision for loss allowance presented in the Consolidated Statements of Profit or Loss:

---

| | | | |
|:---|:---|:---|:---|
|  |  | *(in millions of yen)* | *(in millions of yen)* |
|  | **For the year ended** | **For the year ended** | **For the year ended** |
|  | **March 31, 2024** | **March 31, 2025** | **March 31, 2026** |
| Impairment losses (gains) on financial assets | 18881 | 26468 | 25641 |
| &nbsp;&nbsp;&nbsp;Provisions for credit losses on loan commitments | 4740 | (1836) | 24 |
| &nbsp;&nbsp;&nbsp;Write-offs | (615) | (690) | (742) |
| Provision for loss allowance | 23006 | 23942 | 24923 |

---

**32. Other Operating Income**

Other operating income is as follows:

---

| | | | |
|:---|:---|:---|:---|
|  |  | *(In millions of yen)* | *(In millions of yen)* |
|  | **For the year ended** | **For the year ended** | **For the year ended** |
|  | **March 31, 2024** | **March 31, 2025** | **March 31, 2026** |
| Gain on expiration of contractual obligation <sup>(1)</sup> | 1258 | 1216 | 1752 |
| Received secondment and expense contributions |  | 276 | 330 |
| Grants and contributions from non-governmental entities |  |  | 328 |
| Government grants | 574 |  |  |
| Other | 127 | 20 | 473 |
| Total | 1959 | 1512 | 2883 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)The gain on expiration of contractual obligation mainly consists of gains from expiration of PayPay Points Code. For further details, refer to other operating income section within Note 3, *Material Accounting Policie*s.

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**33. Operating Expenses**

Operating expenses by nature are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **For the year ended March 31, 2024** |  |  |  |  |
|  |  |  |  | *(In millions of yen)* |
|  | **Payment** | **Financial<br>service** | **Inter-segment<br>eliminations** | **Consolidated** |
| Point expenses <sup>(1)</sup> | 45402 | ― | ― | 45402 |
| Settlement related cost <sup>(2)</sup> | 30660 | 9832 | (500) | 39992 |
| Employee benefit expenses <sup>(3)</sup> | 30981 | 6783 | ― | 37764 |
| Professional and outsourcing services<br> expenses <sup>(4)</sup> | 26456 | 8516 | (172) | 34800 |
| Provision for loss allowance | 22650 | 356 | ― | 23006 |
| Other operating expenses |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 12849 | 4700 | ― | 17549 |
| &nbsp;&nbsp;&nbsp;License fees | 15899 | ― | ― | 15899 |
| &nbsp;&nbsp;&nbsp;Interest expenses | 2814 | 544 | (1427) | 1931 |
| &nbsp;&nbsp;&nbsp;Advertising and promotion expenses | 7955 | 4050 | (547) | 11458 |
| &nbsp;&nbsp;&nbsp;Tax and charges | 4270 | 2248 | ― | 6518 |
| &nbsp;&nbsp;&nbsp;Amortization of contract cost | 1043 | ― | ― | 1043 |
| &nbsp;&nbsp;&nbsp;Other | 14105 | 5391 | (258) | 19238 |
| &nbsp;&nbsp;&nbsp;Subtotal | 58935 | 16933 | (2232) | 73636 |
| Total | 215084 | 42420 | (2904) | 254600 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| **For the year ended March 31, 2025** |  |  |  |  |
|  |  |  |  | *(In millions of yen)* |
|  | **Payment** | **Financial<br>service** | **Inter-segment<br>eliminations** | **Consolidated** |
| Point expenses <sup>(1)</sup> | 50362 | ― | ― | 50362 |
| Settlement related cost <sup>(2)</sup> | 33645 | 10592 | (575) | 43662 |
| Employee benefit expenses <sup>(3)</sup> | 32984 | 8499 | ― | 41483 |
| Professional and outsourcing services expenses <sup>(4)</sup> | 19887 | 8997 | (117) | 28767 |
| Provision for loss allowance | 23368 | 574 | ― | 23942 |
| Other operating expenses |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 14705 | 5388 | ― | 20093 |
| &nbsp;&nbsp;&nbsp;License fees | 18027 | ― | ― | 18027 |
| &nbsp;&nbsp;&nbsp;Interest expenses | 2628 | 2278 | (652) | 4254 |
| &nbsp;&nbsp;&nbsp;Advertising and promotion expenses | 6896 | 4528 | (693) | 10731 |
| &nbsp;&nbsp;&nbsp;Tax and charges | 3038 | 2014 | ― | 5052 |
| &nbsp;&nbsp;&nbsp;Amortization of contract cost | 1297 | ― | ― | 1297 |
| &nbsp;&nbsp;&nbsp;Other | 11061 | 5616 | (779) | 15898 |
| &nbsp;&nbsp;&nbsp;Subtotal | 57652 | 19824 | (2124) | 75352 |
| Total | 217898 | 48486 | (2816) | 263568 |

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| | | | | |
|:---|:---|:---|:---|:---|
| **For the year ended March 31, 2026** |  |  |  |  |
|  |  |  |  | *(In millions of yen)* |
|  | **Payment** | **Financial<br>service** | **Inter-segment<br>eliminations** | **Consolidated** |
| Point expenses <sup>(1)</sup> | 60195 |  |  | 60195 |
| Settlement related cost <sup>(2)</sup> | 37817 | 11713 | (799) | 48731 |
| Employee benefit expenses <sup>(3)</sup> | 36790 | 10865 | (14) | 47641 |
| Professional and outsourcing services expenses <sup>(4)</sup> | 20336 | 8120 | (357) | 28099 |
| Provision for loss allowance | 23861 | 1062 |  | 24923 |
| Other operating expenses |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 17018 | 6740 |  | 23758 |
| &nbsp;&nbsp;&nbsp;License fees | 18060 | 839 |  | 18899 |
| &nbsp;&nbsp;&nbsp;Interest expenses | 3920 | 6997 | (327) | 10590 |
| &nbsp;&nbsp;&nbsp;Advertising and promotion expenses | 7281 | 3028 | (303) | 10006 |
| &nbsp;&nbsp;&nbsp;Tax and charges | 3889 | 2054 |  | 5943 |
| &nbsp;&nbsp;&nbsp;Amortization of contract cost | 1724 |  |  | 1724 |
| &nbsp;&nbsp;&nbsp;Other | 15831 | 5361 | (1121) | 20071 |
| &nbsp;&nbsp;&nbsp;Subtotal | 67723 | 25019 | (1751) | 90991 |
| Total | 246722 | 56779 | (2921) | 300580 |

---

(1)Point expenses are incurred primarily when the Group grants reward points to a PayPay User through various reward programs, which the PayPay User can use such reward points at the merchants to pay off balance due in a purchase transaction.

(2)Settlement related cost includes fees paid to banks for users to charge their PayPay Balance from their bank accounts and brand or network fees paid to international card brands. Settlement related cost also includes interbank transaction fees.

(3)Refer to Note 26, *Employee Benefits* for details.

(4)Professional and outsourcing services expenses include customer service related costs, system development labor, and other professional services.

**34. Earnings Per Share**

(1)Basis for Calculation of Basic Earnings Per Share

The profit (loss) for the year and the weighted average number of shares used in the calculation of basic earnings per share ("EPS") are as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended** | **For the year ended** | **For the year ended** |
|  | **March 31, 2024** | **March 31, 2025** | **March 31, 2026** |
| Profit (loss) for the year attributable to owners of<br> the parent company (Million yen) | (3350) | 36170 | 115034 |
| Weighted average number of issued common shares<br> for the year (Thousand shares) <sup>(1)</sup> | 550000 | 550000 | 637577 |
| Basic earnings (loss) per share (Yen) <sup>(1)</sup> | (6.09) | 65.76 | 180.42 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)The share split occurred and became effective on November 15, 2025 and earnings per share has been retrospectively adjusted. Refer to Note 28, *Issued Capital and Reserves* for details of share split.

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(2)Basis for Calculation of Diluted Earnings Per Share

The calculation of the diluted earnings per share is based on the following data:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended** | **For the year ended** | **For the year ended** |
|  | **March 31, 2024** | **March 31, 2025** | **March 31, 2026** |
| Profit (loss) for the year attributable to owners of<br> the parent company (Million yen) | (3350) | 36170 | 115034 |
| Weighted average number of issued common shares<br> for the year (Thousand shares) <sup>(1)</sup> | 550000 | 550000 | 637577 |
| Effects of dilutive potential common shares (Thousand shares) <sup>(2)</sup> | - | - | 6682 |
| Weighted average number of common shares<br> adjusted for the effect of dilution (Thousand<br> shares) <sup>(1)</sup> | 550000 | 550000 | 644259 |
| Diluted earnings (loss) per share (Yen) <sup>(1)</sup> | (6.09) | 65.76 | 178.55 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)The share split occurred and became effective on November 15, 2025 and earnings per share has been retrospectively adjusted. Refer to Note 28, *Issued Capital and Reserves* for details of share split.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)The potential dilutive effect of the 1st series of Stock Options is not disclosed as the estimated difference between basic and diluted earnings per share was determined not to be material. Regarding the 2nd to 49th series of Stock Options, the IPO condition was satisfied during the current fiscal year, and they were included in the computation of diluted earnings per share. Refer to Note 35, *Share-based Payments*.

**35. Share-based Payments**

Note that the number of the shares or stock options, the exercise price, and the fair value of shares on the grant date presented below have been retrospectively adjusted in respect of the share split that occurred on November 15, 2025. Refer to Note 28, *Issued Capital and Reserves,* for further details.

(1)Overview of the Stock Option

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)1st stock options

The Group has granted stock options as share-based payment awards to non-employees for the software development service provided to the Group. The option holder has the right to acquire the Company's common shares upon exercise. The option holder may exercise the options at any time subsequent to vesting and no later than the expiration date. On April 4, 2025, all of the 1st stock options held by SVF II Piranha (DE) LLC were exercised. Refer to Note 28, *Issued Capital and Reserves* and Note 38, *Related Party Transactions*.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)2nd to 46th trust-type of stock options

The Group has a trust-type stock option plan for directors, corporate officers, and employees ("the trust-type plan") to attract and retain exceptionally qualified and talented human resources to achieve the Group's business goals. Under the trust-type plan, SoftBank Corp. and LY Corporation, which are the owners of the parent company, contributed their funds to the trust and the trust acquired a total of 11,636 thousand shares of the 2nd to 46th series of the stock options ("the trust-type stock options") from the Company on August 29, 2022. In addition, on a predetermined date, according to the instructions of the Company, the trust-type stock options will be granted to the directors, corporate officers, and other employees of the Company or its subsidiaries.

The number of trust-type stock options issued to the trust is shown in the table below.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | *(In thousands of shares)* | *(In thousands of shares)* | *(In thousands of shares)* | *(In thousands of shares)* | *(In thousands of shares)* |
|  | **Exercisable period<br>(Five periods)** | **Exercisable period<br>(Five periods)** | **Exercisable period<br>(Five periods)** | **Exercisable period<br>(Five periods)** | **Exercisable period<br>(Five periods)** |
| **Market condition<br>(Nine conditions)** | **From April 1, 2024<br>to March 31, 2033** | **From April 1, 2025<br>to March 31, 2033** | **From April 1, 2026<br>to March 31, 2033** | **From April 1, 2027<br>to March 31, 2033** | **From April 1, 2028<br>to March 31, 2033** |
|  | 843 | 843 | 843 | 843 | 838 |
| &nbsp;&nbsp;&nbsp;3 trillion yen | 416 | 387 | 387 | 386 | 386 |
| &nbsp;&nbsp;&nbsp;4 trillion yen | 359 | 328 | 324 | 308 | 308 |
| &nbsp;&nbsp;&nbsp;5 trillion yen | 248 | 248 | 192 | 108 | 108 |
| &nbsp;&nbsp;&nbsp;6 trillion yen | 174 | 174 | 161 | 161 | 125 |
| &nbsp;&nbsp;&nbsp;7 trillion yen | 73 | 73 | 73 | 73 | 73 |
| &nbsp;&nbsp;&nbsp;8 trillion yen | 84 | 84 | 84 | 80 | 80 |
| &nbsp;&nbsp;&nbsp;9 trillion yen | 107 | 107 | 104 | 104 | 104 |
| &nbsp;&nbsp;&nbsp;10 trillion yen | 167 | 167 | 167 | 167 | 167 |
| Total | 2471 | 2411 | 2335 | 2230 | 2189 |

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For the year ended March 31, 2023, a total of 4,589 thousand shares of trust-type stock options were granted to directors, corporate officers and other employees. In addition, the trust was consolidated to the Group's Consolidated Statements of Financial Position and Consolidated Statements of Profit or Loss. As of April 30, 2025, remaining 7,047 thousand shares of trust-type stock options which the trust held were forfeited and extinguished, and the trust had been terminated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)47th and 48th tax qualified-type, and 49th one-yen-exercisable at retirement-type of stock options

The Group has tax qualified-type and one-yen-exercisable at retirement-type of stock option plans for directors, corporate officers, and other employees for the purpose of attracting and retaining exceptionally qualified and talented human resources to achieve the Group's business goals.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)Phantom stock awards

The Group grants phantom stock awards to certain employees, which are accounted for as cash-settled share-based payment arrangements. A phantom stock award is an award of a theoretical number of units (phantom units) operating in substance as a phantom option, whose value is based on the appreciation of the Company's common stock over a specified exercise price. The value of each phantom unit is based on the excess of the Company's common stock price over the exercise price and, therefore, appreciates and depreciates on the basis of fluctuations in the value of the Company's common stock.

(2)Stock Options Outstanding

The Group's stock options outstanding as of March 31, 2026 are as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)2nd to 46th trust-type stock options

---

| | | |
|:---|:---|:---|
| **Name** | **2nd to 6th stock options** | **7th to 46th stock options** |
| Grant date | December 5, 2022 | December 5, 2022 |
| Grantee | Directors, corporate officers<br>and other employees | Directors, corporate officers and other employees |
| Number of options granted | See the table below <sup>(4)</sup> | See the table below <sup>(4)</sup> |
| Settlement method | Equity-settled | Equity-settled |
| Exercisable period | See the table below <sup>(4)</sup> | See the table below <sup>(4)</sup> |
| Conditions of vesting | Service condition <sup>(1)</sup><br>IPO condition <sup>(2)</sup> | Service condition <sup>(1)</sup><br>IPO condition <sup>(2)</sup><br>Market condition <sup>(3)</sup> |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Service condition

Holders of stock options must be directors, corporate officers, or other permanent employees of the Company or its subsidiaries at the time of exercising the rights. The stock options are forfeited upon resignation from the Group. However, this shall not apply in cases where the Board of Directors approves the condition such as retirement due to expiration of term of office or mandatory retirement age.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)IPO condition

Holders of stock options may exercise their stock options only when the Company's shares are listed on a financial instruments exchange market.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)Market condition

Holders of stock options may not exercise their stock options unless the market capitalization exceeds a certain threshold <sup>(4)</sup> on a specific date at least once during the period from the listing of the Company's shares on a financial instruments exchange market to the last day of the exercisable period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)Number of 2nd to 46th trust-type stock options granted, exercisable period and market condition

There are five exercisable periods and nine market capitalization conditions, therefore, the Group has a total of 45 types of stock options. The number of trust-type stock options is as follows.

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---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | *(In thousands of shares)* | *(In thousands of shares)* | *(In thousands of shares)* | *(In thousands of shares)* | *(In thousands of shares)* |
|  | **Exercisable period<br>(Five periods)** | **Exercisable period<br>(Five periods)** | **Exercisable period<br>(Five periods)** | **Exercisable period<br>(Five periods)** | **Exercisable period<br>(Five periods)** |
| **Market condition<br>(Nine conditions)** | **From April 1, 2024<br>to March 31, 2033** | **From April 1, 2025<br>to March 31, 2033** | **From April 1, 2026<br>to March 31, 2033** | **From April 1, 2027<br>to March 31, 2033** | **From April 1, 2028<br>to March 31, 2033** |
|  | 444 | 444 | 442 | 376 | 342 |
| &nbsp;&nbsp;&nbsp;3 trillion yen | 187 | 165 | 152 | 144 | 136 |
| &nbsp;&nbsp;&nbsp;4 trillion yen | 123 | 115 | 107 | 98 | 89 |
| &nbsp;&nbsp;&nbsp;5 trillion yen | 82 | 74 | 63 | 51 | 38 |
| &nbsp;&nbsp;&nbsp;6 trillion yen | 52 | 50 | 47 | 44 | 31 |
| &nbsp;&nbsp;&nbsp;7 trillion yen | 28 | 28 | 27 | 26 | 26 |
| &nbsp;&nbsp;&nbsp;8 trillion yen | 27 | 27 | 26 | 25 | 25 |
| &nbsp;&nbsp;&nbsp;9 trillion yen | 36 | 35 | 35 | 35 | 33 |
| &nbsp;&nbsp;&nbsp;10 trillion yen | 52 | 52 | 51 | 50 | 49 |
| &nbsp;&nbsp;&nbsp;Total | 1031 | 990 | 950 | 849 | 769 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)47th and 48th tax qualified-type and 49th one-yen-exercisable at retirement-type of stock options

---

| | | | |
|:---|:---|:---|:---|
| **Name** | **47th stock option** | **48th stock options** | **49th stock options** |
| Grant date | April 28, 2025 | April 28, 2025 | April 28, 2025 |
| Grantee | Employees | Directors and corporate officers | Directors and corporate officers |
| Number of options granted | See the table below <sup>(3)</sup> | See the table below <sup>(3)</sup> | 569 thousand shares |
| Settlement method | Equity-settled | Equity-settled | Equity-settled |
| Exercisable period | See the table below <sup>(3)</sup> | See the table below <sup>(3)</sup> | From June 1, 2025<br>to May 31, 2045 |
| Conditions of vesting | Service condition <sup>(1)</sup><br>IPO condition <sup>(2)</sup> | Service condition <sup>(1)</sup><br>IPO condition <sup>(2)</sup> | IPO condition <sup>(2)</sup> |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Service condition

Holders of stock options must be directors, corporate officers, or other permanent employees of the Company or its subsidiaries at the time of exercising the rights. The stock options are forfeited upon resignation from the Group. However, this shall not apply in cases where the Board of Directors approves the condition such as retirement due to expiration of term of office or mandatory retirement age.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)IPO condition

Holders of stock options may exercise their stock options only when the Company's shares are listed on a financial instruments exchange market.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)Number of stock options granted, exercisable period

The number of 47th and 48th tax qualified-type stock options by exercisable period is as follows.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | *(In thousands of shares)* | *(In thousands of shares)* | *(In thousands of shares)* | *(In thousands of shares)* | *(In thousands of shares)* | *(In thousands of shares)* |
|  | **Exercisable period<br>(Five periods)** | **Exercisable period<br>(Five periods)** | **Exercisable period<br>(Five periods)** | **Exercisable period<br>(Five periods)** | **Exercisable period<br>(Five periods)** | **Exercisable period<br>(Five periods)** |
|  | **From<br>April 25, 2027<br>to April 23, 2035** | **From<br>April 29, 2028<br>to April 23, 2035** | **From<br>April 29, 2029<br>to April 23, 2035** | **From<br>April 29, 2030<br>to April 23, 2035** | **From<br>April 29, 2031<br>to April 23, 2035** | **Total** |
| 47th stock options | 1625 | 1582 | 1529 | 1472 | 1417 | 7625 |
| 48th stock options | 107 | 107 | 107 | 107 | 107 | 535 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)Phantom stock awards

The awards become exercisable upon satisfaction of all conditions, including service conditions, an IPO condition, and market conditions. Upon exercise, the Group settles the awards in cash based on the difference between the exercise price and the share price at the exercise date. The maximum term of the phantom stock awards granted under this plan is 11.9 years, which represents the period from the grant date to the expiration of the exercise period.

(3)Expenses and Liabilities Arising from Share-based Payments

Operating expenses and liabilities recognized in the Group's Consolidated Statements of Profit or Loss and Consolidated Statements of Financial Position in connection with share-based payments were as follows:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Operating expenses

---

| | | | |
|:---|:---|:---|:---|
|  | *(In millions of yen)* | *(In millions of yen)* | *(In millions of yen)* |
|  | **For the year ended** | **For the year ended** | **For the year ended** |
|  | **March 31, 2024** | **March 31, 2025** | **March 31, 2026** |
| Equity-settled | ― | ― | 1730 |
| Cash-settled | ― | ― | 117 |
| Total | ― | ― | 1847 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Liabilities

Liabilities recognized in connection with share-based payments solely relate to phantom stock awards, which are classified as cash-settled share-based payment arrangements.

---

| | | |
|:---|:---|:---|
|  | *(In millions of yen)* | *(In millions of yen)* |
|  | **March 31, 2025** | **March 31, 2026** |
| Total carrying amount of liabilities | ― | 130 |
| Total intrinsic value of vested liabilities | ― | 20 |

---

As the Group completed its initial public offering on March 12, 2026 and satisfied the IPO condition, the Group commenced the recognition of share-based payment expenses and liabilities in the Consolidated Statements of Profit or Loss for the year ended March 31, 2026 and Consolidated Statements of Financial Position as of March 31, 2026.

(4)Details of the stock options and awards

Details of the stock options and awards are as follows:

**For the year ended March 31, 2024**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **1st stock options** | **1st stock options** | **2nd to 46th stock options** | **2nd to 46th stock options** | **Phantom stock awards** | **Phantom stock awards** |
|  | **Number<br>of stock<br>options<br>(Thousand<br>shares)** | **Weighted<br>average<br>exercise<br>price<br>(Yen)** | **Number<br>of stock<br>options<br>(Thousand<br>shares)** | **Weighted<br>average<br>exercise<br>price<br>(Yen)** | **Number<br>of stock<br>options<br>(Thousand<br>shares)** | **Weighted<br>average<br>exercise<br>price<br>(Yen)** |
| Outstanding at the beginning<br> of the year | 31802 | 500 | 4516 | 1300 | 79 | 1300 |
| Granted | ― | ― | ― | ― | ― | ― |
| Exercised | ― | ― | ― | ― | ― | ― |
| Forfeited | ― | ― | (217) | 1300 | ― | ― |
| Expired | ― | ― | ― | ― | ― | ― |
| Outstanding at the end of the<br> year <sup>(1)</sup> | 31802 | 500 | 4299 | 1300 | 79 | 1300 |
| Exercisable at the end of the<br> year | 31802 | 500 | ― | ― | ― | ― |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)The weighted average remaining contractual lives in relation to 1st stock options, 2nd to 46th stock options, and phantom stock awards outstanding as of March 31, 2024 were 6.5 years, 9.0 years, and 9.0 years, respectively.

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**For the year ended March 31, 2025**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **1st stock options** | **1st stock options** | **2nd to 46th stock options** | **2nd to 46th stock options** | **Phantom stock awards** | **Phantom stock awards** |
|  | **Number<br>of stock<br>options<br>(Thousand<br>shares)** | **Weighted<br>average<br>exercise<br>price<br>(Yen)** | **Number<br>of stock<br>options<br>(Thousand<br>shares)** | **Weighted<br>average<br>exercise<br>price<br>(Yen)** | **Number<br>of stock<br>options<br>(Thousand<br>shares)** | **Weighted<br>average<br>exercise<br>price<br>(Yen)** |
| Outstanding at the beginning<br> of the year | 31802 | 500 | 4299 | 1300 | 79 | 1300 |
| Granted | ― | ― | ― | ― | ― | ― |
| Exercised | ― | ― | ― | ― | ― | ― |
| Forfeited | ― | ― | (288) | 1300 | ― | ― |
| Expired | ― | ― | ― | ― | ― | ― |
| Outstanding at the end of the<br> year <sup>(1)</sup> | 31802 | 500 | 4011 | 1300 | 79 | 1300 |
| Exercisable at the end of the<br> year | 31802 | 500 | ― | ― | ― | ― |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)The weighted average remaining contractual lives in relation to 1st stock options, 2nd to 46th stock options outstanding, and Phantom stock awards as of March 31, 2025 were 5.5 years, 8.0 years, and 8.0 years, respectively.

**For the year ended March 31, 2026**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **1st stock options** | **1st stock options** | **2nd to 46th stock options** | **2nd to 46th stock options** | **47th stock options** | **47th stock options** |
|  | **Number<br>of stock<br>options<br>(Thousand<br>shares)** | **Weighted<br>average<br>exercise<br>price<br>(Yen)** | **Number<br>of stock<br>options<br>(Thousand<br>shares)** | **Weighted<br>average<br>exercise<br>price<br>(Yen)** | **Number<br>of stock<br>options<br>(Thousand<br>shares)** | **Weighted<br>average<br>exercise<br>price<br>(Yen)** |
| Outstanding at the beginning<br> of the year | 31802 | 500 | 4011 | 1300 |  | ― |
| Granted | ― | ― |  | ― | 7625 | 1300 |
| Exercised <sup>(1)</sup> | (31802) | 500 | (82) | 1300 |  | ― |
| Forfeited | ― | ― | (122) | 1300 | (255) | 1300 |
| Expired | ― | ― |  | ― |  | ― |
| Outstanding at the end of the<br> year <sup>(2)</sup> | ― | ― | 3807 | 1300 | 7370 | 1300 |
| Exercisable at the end of the<br> year | ― | ― | 633 | 1300 |  | ― |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **48th stock options** | **48th stock options** | **49th stock options** | **49th stock options** | **Phantom stock awards** | **Phantom stock awards** |
|  | **Number<br>of stock<br>options<br>(Thousand<br>shares)** | **Weighted<br>average<br>exercise<br>price<br>(Yen)** | **Number<br>of stock<br>options<br>(Thousand<br>shares)** | **Weighted<br>average<br>exercise<br>price<br>(Yen)** | **Number<br>of awards<br>(Thousand)** | **Weighted<br>average<br>exercise<br>price<br>(Yen)** |
| Outstanding at the beginning<br> of the year | ― | ― | ― | ― | 79 | 1300 |
| Granted | 535 | 1300 | 569 | 1 | 155 | 1327 |
| Exercised <sup>(1)</sup> | ― | ― | ― | ― | ― | ― |
| Forfeited | ― | ― | ― | ― | ― | ― |
| Expired | ― | ― | ― | ― | ― | ― |
| Outstanding at the end of the<br> year <sup>(2)</sup> | 535 | 1300 | 569 | 1 | 234 | 1318 |
| Exercisable at the end of the<br> year | ― | ― | ― | ― | 10 | 1300 |

---

(1)The weighted average share price at the date of exercise was 1,305 yen.

(2)The weighted average remaining contractual lives in relation to the stock options and awards outstanding as of March 31, 2026 were as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **2nd to 46th<br>stock options** | **2nd to 46th<br>stock options** | **47th stock<br>options** | **48th stock<br>options** | **49th stock<br>options** | **Phantom<br>stock awards** |
| Weighted average remaining<br> contractual lives (years) |  | 7.0 | 9.1 | 9.1 | 19.2 | 8.4 |

---

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(5)Fair Value Measurement

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Fair value measurement of the equity-settled share-based payments issued during the reporting periods

**For the years ended March 31, 2024 and 2025**

There were no stock options granted during the years ended March 31, 2024, and 2025, respectively.

**For the year ended March 31, 2026**

Fair value of stock options granted during the year ended March 31, 2026 was measured as follows:

---

| | | | |
|:---|:---|:---|:---|
| **Grant and name** | **47th stock<br>options** | **48th stock<br>options** | **49th stock<br>options** |
| Weighted average fair value | 488 yen | 409 yen | 472 yen |
| Valuation method used | Monte-Carlo<br>simulation <sup>(1)</sup> | Monte-Carlo<br>simulation <sup>(1)</sup> | Monte-Carlo<br>simulation <sup>(1)</sup> |
| Key inputs and assumptions |  |  |  |
| &nbsp;&nbsp;&nbsp;Exercise price | 1,300 yen | 1,300 yen | 1 yen |
| &nbsp;&nbsp;&nbsp;Fair value of share on<br> grant date | 1,300 yen | 1,300 yen | 1,300 yen |
| &nbsp;&nbsp;&nbsp;Exercise period | 10 years | 10 years | 20 years |
| &nbsp;&nbsp;&nbsp;Expected dividend yield | 3.4% | 3.4% | 3.4% |
| &nbsp;&nbsp;&nbsp;Expected volatility <sup>(2)</sup> | 38.6% | 38.6% | 37.6% |
| &nbsp;&nbsp;&nbsp;Risk-free interest rate | 1.3% | 1.3% | 2.1% |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Monte-Carlo simulation requires various highly subjective assumptions, including expected volatility, expected life of stock options, expected dividend yield, and fair value of common share at the time of option grants.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)The expected volatility was derived from the historical volatility over a period similar to the expected life of the stock options for publicly listed companies that are comparable to the Group.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Fair value measurement of cash-settled share-based payments at the end of the year

---

| | |
|:---|:---|
|  | **March 31, 2026** |
| Weighted average fair value | 1,998 yen |
| Valuation method used | Monte-Carlo simulation <sup>(1)</sup> |
| Key inputs and assumptions |  |
| &nbsp;&nbsp;&nbsp;Exercise price | 1,300 yen or 1,750 yen |
| &nbsp;&nbsp;&nbsp;Fair value of share at the end of the<br> period | 3,393 yen |
| &nbsp;&nbsp;&nbsp;Exercise period | 7.0 years - 9.1 years |
| &nbsp;&nbsp;&nbsp;Expected dividend yield | See below <sup>(2)</sup> |
| &nbsp;&nbsp;&nbsp;Expected volatility <sup>(3)</sup> | 39.9% - 41.6% |
| &nbsp;&nbsp;&nbsp;Risk-free interest rate | 2.1% - 2.3% |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Monte-Carlo simulation requires various highly subjective assumptions, including expected volatility, expected life of the awards, expected dividend yield, and fair value of common share at the end of the year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)The expected dividend yield was estimated to be zero for the first five years following the IPO and 1.6 % from the sixth year onward.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)The expected volatility was derived from the historical volatility over a period similar to the expected life of the awards for publicly listed companies that are comparable to the Group.

**36. Financial Instruments**

(1) Capital Management

The Group's capital management policy is to realize and maintain the capital composition at optimized levels in order to sustain mid-term and long-term growth and maximize the corporate value.

The main indicators used by the Group in capital management are as follows:

---

| | | |
|:---|:---|:---|
|  | *(In millions of yen)* | *(In millions of yen)* |
|  | **March 31, 2025** | **March 31, 2026** |
| Total shareholders' equity | 223731 | 430761 |
| Equity capital ratio <sup>(1) (%)</sup> | 5.54% | 8.32% |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Equity capital ratio is calculated as total shareholders' equity divided by total liabilities and shareholders' equity.

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PayPay Bank Corporation, the Company's banking subsidiary in Japan, is subject to the capital adequacy guidelines set by the Financial Services Agency of Japan, which are based on the Basel Capital Accord. Under the guidelines, PayPay Bank Corporation is classified as a Domestically Active Bank and required to maintain a minimum capital adequacy ratio, namely no less than 4.0%, of capital against the amount of risk weighted assets.

The table below presents PayPay Bank Corporation's capital adequacy ratio, core capital, total capital and risk-weighted assets under Japanese GAAP.

---

| | | |
|:---|:---|:---|
|  | *(In millions of yen)* | *(In millions of yen)* |
|  | **March 31, 2025** | **March 31, 2026** |
| Capital adequacy ratio | 16.76% | 14.04% |
| Core capital | 145215 | 157147 |
| Total capital | 132575 | 144202 |
| Risk-weighted assets | 790957 | 1026786 |

---

Other companies below in the Group are also required to maintain their own capital-related ratio and equity balance defined by the capital regulations as follows:

---

| | | |
|:---|:---|:---|
| **Company** | **Laws and regulations** | **Requirements** |
| PayPay Corporation | Payment Services Act | Maintenance of minimum required equity amount |
| PayPay Card Corporation | Installment Sales Act | Maintenance of minimum required equity ratio |
| PayPay Securities Corporation | Financial Instruments and Exchange Act | Maintenance of minimum required capital-to-risk ratio |

---

Each company in the Group adequately meets the capital requirements under the laws and regulations.

(2) Financial Risk Management

The Group is exposed to financial risks, including credit risk, liquidity risk, and market risk, relating to its operations. Therefore, we regularly monitor such financial risks and follow policies implemented to mitigate risk exposures.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Credit Risk

The Group is exposed to the debtors' credit risk arising from its operating activities. Generally, the credit risk is related to accounts receivable from cardholders, payment service providers and PayPay Merchants, loan arrangements to banking customers, and loan commitments for cardholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)Credit risk management

The Group assesses credit cardholders' credit risk in accordance with internal policy upon entering into an agreement with cardholders. The Group also monitors mainly collection status of each cardholder to manage potential uncollectible amounts.

As for the credit card receivables from cardholders, in the event of delinquency, the terms of the contracts may be modified for the purpose of facilitating collections, and the original contractual cash flows would change.

While most of the credit card receivables are from cardholders based in Japan, the Group is working to prevent or reduce credit risk through the risk management procedures described above.

For banking customers' credit risk, the Group has established a credit risk management system in its internal regulations and strives to control credit risk in accordance with the internal "Credit Policy." In addition, the Group has established regulations for credit review, concentration risk and write off. In order to avoid excessive concentrations of risk, the Group's policies and procedures include specific guidelines to focus on maintaining a diversified portfolio by establishing an adequate credit limit. The Audit Department, which is independent from each division, regularly audits the credit risk management status, checks credit operations, and reports the results of the audit to the Board of Directors.

The Group derecognized these financial assets for which the contractual cash flows have been modified and recognized purchased or originated credit-impaired financial assets, where the change in the discounted present value of the cash flows under the new terms of these financial assets changed by more than 10% from the discounted present value of the remaining cash flows of the original terms.

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As of March 31, 2025 and 2026, there were no modifications of the contractual cash flows of financial assets where the modification did not result in derecognition.

For general credit risks other than the credit risk above, the Group conducts credit investigations and establishes a credit line in order to manage credit risks. The Group periodically monitors the status of debtors, past dues and outstanding balances in accordance with the internal Credit Management Regulations.

The maximum exposure to credit risk as of March 31, 2025 and 2026 represents the carrying amounts, net of impairment losses, of the respective financial assets recognized in the Group's Consolidated Statements of Financial Position.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) Analysis by credit risk rating grades

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Businesses other than banking business

The following table details the gross carrying amounts of financial assets for the businesses other than banking business subsequently measured at amortized cost<sup>(1)</sup>by due date:

**As of March 31, 2025** 

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  |  |  |  |  | *(In millions of yen)* | *(In millions of yen)* |
|  |  | **Financial assets with loss allowance <br>measured at lifetime ECL** | **Financial assets with loss allowance <br>measured at lifetime ECL** | **Financial assets with loss allowance <br>measured at lifetime ECL** |  |  |
|  | **Financial assets<br>with loss<br>allowance<br>measured at<br>12-month ECL** | **Accounts<br>receivables for<br>which<br>simplified<br>approach is<br>applied** | **Financial <br>assets with <br>significant <br>increase in <br>credit risk <br>since initial <br>recognition** | **Credit-<br>impaired<br>financial assets** | **Financial <br>assets that are <br>purchased or <br>originated <br>credit-<br>impaired** | **Total** |
| Not past due | 1479394 | 1914 |  |  |  | 1481308 |
| Within 30 days | 66830 | 28 | 2781 | 948 | 95 | 70682 |
| Within 31 to 90 days |  | 3 | 4486 | 3250 | 1383 | 9122 |
| Over 90 days |  | 494 |  | 36389 | 10103 | 46986 |
| Total | 1546224 | 2439 | 7267 | 40587 | 11581 | 1608098 |

---

**As of March 31, 2026**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  |  |  |  |  | *(In millions of yen)* | *(In millions of yen)* |
|  |  | **Financial assets with loss allowance <br>measured at lifetime ECL** | **Financial assets with loss allowance <br>measured at lifetime ECL** | **Financial assets with loss allowance <br>measured at lifetime ECL** |  |  |
|  | **Financial assets<br>with loss<br>allowance<br>measured at<br>12-month ECL** | **Accounts<br>receivables for<br>which<br>simplified<br>approach is<br>applied** | **Financial <br>assets with <br>significant <br>increase in <br>credit risk <br>since initial <br>recognition** | **Credit-<br>impaired<br>financial assets** | **Financial <br>assets that are <br>purchased or <br>originated <br>credit-<br>impaired** | **Total** |
| Not past due | 1522485 | 2789 |  |  |  | 1525274 |
| Within 30 days | 86713 | 74 | 3128 | 1159 | 82 | 91156 |
| Within 31 to 90 days |  | 28 | 5944 | 3519 | 1673 | 11164 |
| Over 90 days |  | 378 |  | 37277 | 13210 | 50865 |
| Total | 1609198 | 3269 | 9072 | 41955 | 14965 | 1678459 |

---

(1)These assets include cash and cash equivalents, guarantee deposits, accounts receivable, loans and advances to customers, securities and other financial assets on the Group's Consolidated Statements of Financial Position. All of the loss allowance for the financial assets other than credit card receivables and settlement receivables in the tables are measured at 12-month ECL as of March 31, 2025 and 2026. In addition, all of those financial assets except for credit card receivables and settlement receivables were not past due as of March 31, 2025 and 2026.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Banking business

For the banking business, financial assets are segregated into following credit qualities based on internal risk assessments by debtors.

---

| | |
|:---|:---|
| **Classification of debtors** | **Basis of classification** |
| Performing | Account not classified as either |
| Credit Watch | Account designated for elevated attention  |
| At Risk or Default | Account where there is an increased likelihood that default may exist based on qualitative and quantitative factors |

---

**As of March 31, 2025** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  |  |  | *(In millions of yen)* | *(In millions of yen)* |
|  |  | **Financial assets with loss allowance<br>measured at lifetime ECL** | **Financial assets with loss allowance<br>measured at lifetime ECL** |  |
|  | **Financial assets<br>with loss<br>allowance<br>measured at<br>12-month ECL** | **Financial <br>assets with <br>significant <br>increase in <br>credit risk <br>since initial <br>recognition** | **Credit-<br>impaired<br>financial assets** | **Total** |
| Performing | 2143066 |  |  | 2143066 |
| Credit Watch |  | 1849 |  | 1849 |
| At Risk or Default |  |  | 1680 | 1680 |
| Total | 2143066 | 1849 | 1680 | 2146595 |

---

**As of March 31, 2026**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  |  |  | *(In millions of yen)* | *(In millions of yen)* |
|  |  | **Financial assets with loss allowance<br>measured at lifetime ECL** | **Financial assets with loss allowance<br>measured at lifetime ECL** |  |
|  | **Financial assets<br>with loss<br>allowance<br>measured at<br>12-month ECL** | **Financial <br>assets with <br>significant <br>increase in <br>credit risk <br>since initial <br>recognition** | **Credit-<br>impaired<br>financial assets** | **Total** |
| Performing | 3065985 |  |  | 3065985 |
| Credit Watch |  | 2279 |  | 2279 |
| At Risk or Default |  |  | 3023 | 3023 |
| Total | 3065985 | 2279 | 3023 | 3071287 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) Measurement in loss allowances

The amount of loss allowances is calculated based on PD, LGD and the exposure at default ("EAD") as well as other reasonably available forward-looking information, and measured on a collective basis after grouping the accounts receivable, debt instruments measured at FVTOCI, loans and loan commitments by product and duration of past due.

The Group considers that there has been a significant increase in credit risk mainly when payments are more than 30 days past due. For loans in the banking business, the Group considers there has been a significant increase in credit risk when payments are more than 10 days past due or when multiple late payments have occurred. In assessing whether credit risk has increased significantly, the Group considers reasonably available and supportable information in addition to past due information.

The Group defines a receivable to be in default mainly when the contractual payment is 90 days or more past due, the contractual conditions have been modified, or the obligor is experiencing significant financial difficulty. Credit impairment is considered to have occurred for receivables that are judged to be in default.

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The Group measures the loss allowances of the financial assets at an amount equal to the amount of expected credit losses from possible defaults in the next 12 months after the end of the reporting period if the credit risk has not increased significantly since the initial recognition (12-month expected credit losses). If credit risk on the financial assets at the end of the reporting period have increased significantly since the initial recognition, the loss allowances are measured at an amount equal to the expected credit losses that result from all possible default events over the expected life (lifetime expected credit losses).

However, for accounts receivable result from transactions that are within the scope of IFRS 15, and that do not contain significant financing components, the amount of loss allowances is measured at an amount equal to lifetime expected credit losses, regardless of whether or not there is a significant increase in credit risk from the time of initial recognition.

There was collateral for mortgage loans and guarantee contracts for some loans.

The movements in loss allowances for the financial assets are as follows:

**For the year ended March 31, 2025**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  |  |  |  | *(In millions of yen)* | *(In millions of yen)* |
|  |  | **Financial assets with loss allowance <br>measured at lifetime ECL** | **Financial assets with loss allowance <br>measured at lifetime ECL** | **Financial assets with loss allowance <br>measured at lifetime ECL** |  |
|  | **Financial<br>assets with<br>loss allowance<br>measured at<br> 12-month ECL** | **Accounts<br>receivables for<br>which<br>simplified<br>approach is<br>applied** | **Financial<br>assets with<br>significant<br>increase in<br>credit risk<br>since initial<br>recognition** | **Credit-impaired<br>financial assets** | **Total** |
| Balance as of April 1, 2024 | 8822 | 589 | 1308 | 22190 | 32909 |
| &nbsp;&nbsp;&nbsp;Provision for loss allowance, net of reversal | 3851 | (84) | 81 |  | 3848 |
| &nbsp;&nbsp;&nbsp;Write-offs | (1621) | (1) | (709) | (13622) | (15953) |
| &nbsp;&nbsp;&nbsp;Transfer between stages | (205) |  | (647) | 852 |  |
| &nbsp;&nbsp;&nbsp;Changes in risk variables | (142) |  | 1539 | 23661 | 25058 |
| &nbsp;&nbsp;&nbsp;Other | (45) |  |  | 29 | (16) |
| Balance as of March 31, 2025 | 10660 | 504 | 1572 | 33110 | 45846 |

---

**For the year ended March 31, 2026**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  |  |  |  | *(In millions of yen)* | *(In millions of yen)* |
|  |  | **Financial assets with loss allowance <br>measured at lifetime ECL** | **Financial assets with loss allowance <br>measured at lifetime ECL** | **Financial assets with loss allowance <br>measured at lifetime ECL** |  |
|  | **Financial<br>assets with<br>loss allowance<br>measured at<br> 12-month ECL** | **Accounts<br>receivables for<br>which<br>simplified<br>approach is<br>applied** | **Financial<br>assets with<br>significant<br>increase in<br>credit risk<br>since initial<br>recognition** | **Credit-impaired<br>financial assets** | **Total** |
| Balance as of April 1, 2025 | 10660 | 504 | 1572 | 33110 | 45846 |
| &nbsp;&nbsp;&nbsp;Provision for loss allowance, net of reversal | 4838 | (69) | 27 | 2 | 4798 |
| &nbsp;&nbsp;&nbsp;Write-offs | (1679) | (12) | (696) | (12661) | (15048) |
| &nbsp;&nbsp;&nbsp;Transfer between stages | (126) |  | (782) | 908 |  |
| &nbsp;&nbsp;&nbsp;Changes in risk variables | (448) |  | 1864 | 22006 | 23422 |
| &nbsp;&nbsp;&nbsp;Derecognition of receivables upon sale |  |  |  | (10598) | (10598) |
| &nbsp;&nbsp;&nbsp;Other | 6 |  |  | (47) | (41) |
| Balance as of March 31, 2026 | 13251 | 423 | 1985 | 32720 | 48379 |

---

Loss allowances mainly relate to credit card receivables and loans.

The total amount of undiscounted expected credit losses at initial recognition on financial assets that were purchased or originated credit-impaired as of March 31, 2025 and 2026 were 14,881 million yen and 13,851 million yen, respectively.

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There was no significant increase or decrease in the loss allowance relating to financial assets that are purchased or originated credit-impaired.

There was no financial asset that the credit risk that has been modified while the loss allowance was measured at an amount equal to lifetime expected credit losses, has improved to the extent that the loss allowance reverted to being measured at an amount equal to 12-month expected credit losses for the years ended March 31, 2025 and 2026.

There were no significant changes in the gross carrying amount that affected changes in the loss allowance for the years ended March 31, 2025 and 2026.

The amount of financial assets which has been written off but subject to ongoing collection activity was not material for the years ended March 31, 2025 and 2026.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Liquidity Risk

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)Management of liquidity risk related to financing

Liquidity risk is the risk that the Group may encounter difficulty in meeting its obligations associated with financial liabilities, including derivative instruments that are settled by delivering cash or another financial asset. The Group is exposed to liquidity risk in relation to funding, utilization, and repayment of cash arising from its business operation. In order to prevent and reduce the liquidity risk, the Group, in principle, invests in highly liquid and low-risk financial instruments. The Group maintains a sufficient level of cash and cash equivalents and receivables with maturities of primarily up to two months, in order to ensure its liquidity and stability.

In its banking business, in order to prevent excessive reliance on short-term funding (ranging from overnight to one month), the Group sets an upper limit on the amount of such funding and monitors compliance with this limit on a daily basis. In addition, the Group monitors the balance of assets that can be readily converted into cash to ensure liquidity in emergency situations, such as large withdrawals of customers' deposits in its financial businesses.

The Group finances its operations through customer deposits in the financial businesses, loan payables, commercial papers and financing through liquidation of receivables.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)The balance of financial liabilities by repayment date

The following table details the balance of financial liabilities by repayment date. The contractual cash flow amount below reflects cash flow presented on an undiscounted cash flow basis, including interest expense.

**As of March 31, 2025** 

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  |  |  |  |  |  | *(In millions of yen)* | *(In millions of yen)* |
|  | **Book value** | **Contractual<br>cash flow** | **Within<br>1 year** | **Within <br>1-2 years** | **Within <br>2-3 years** | **Within <br>3-4 years** | **Within <br>4-5 years** | **More than <br>5 years** |
| **Non-derivative financial<br> liabilities** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Deposits | 2385939 | 2386132 | 2371106 | 3531 | 4065 | 695 | 1761 | 4974 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | 949397 | 949397 | 949396 | 1 |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Borrowings | 399578 | 401819 | 202992 | 59136 | 37083 | 91446 | 11012 | 150 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other financial liabilities | 33021 | 33021 | 33017 | 4 |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Lease liabilities | 12097 | 12661 | 2933 | 2373 | 2288 | 2247 | 1805 | 1015 |
| **Derivative financial<br> liabilities** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Other financial liabilities | 1186 | 1186 | 1186 |  |  |  |  |  |
| **Total liabilities** | 3781218 | 3784216 | 3560630 | 65045 | 43436 | 94388 | 14578 | 6139 |
| **Off-balance sheet item** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Undrawn loan<br> commitments |  | 9954633 | 9954633 |  |  |  |  |  |

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**As of March 31, 2026**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  |  |  |  |  |  | *(In millions of yen)* | *(In millions of yen)* |
|  | **Book value** | **Contractual<br>cash flow** | **Within<br>1 year** | **Within <br>1-2 years** | **Within <br>2-3 years** | **Within <br>3-4 years** | **Within <br>4-5 years** | **More than <br>5 years** |
| **Non-derivative financial<br> liabilities** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Deposits | 2952495 | 2952536 | 2935149 | 5118 | 4540 | 1204 | 2222 | 4303 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | 1122338 | 1122338 | 1122338 |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Borrowings | 564956 | 566243 | 392273 | 67883 | 92747 | 11813 | 1376 | 151 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other financial liabilities | 46748 | 46748 | 46430 | 106 | 106 | 106 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Lease liabilities | 9549 | 9924 | 2475 | 2353 | 2257 | 1823 | 770 | 246 |
| **Derivative financial<br> liabilities** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Other financial liabilities | 1368 | 1368 | 1368 |  |  |  |  |  |
| **Total liabilities** | 4697454 | 4699157 | 4500033 | 75460 | 99650 | 14946 | 4368 | 4700 |
| **Off-balance sheet item** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Undrawn loan<br> commitments |  | 10622322 | 10622322 |  |  |  |  |  |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C)Lines of credit

The Group has lines of credit with financial institutions for borrowing arrangements and liquidation arrangements of credit card receivables. The remaining lines of credit available are as follows:

---

| | | |
|:---|:---|:---|
|  | *(In millions of yen)* | *(In millions of yen)* |
|  | **March 31, 2025** | **March 31, 2026** |
| Committed lines of credit |  |  |
| &nbsp;&nbsp;&nbsp;Total | 3673 | 5124 |
| &nbsp;&nbsp;&nbsp;Used |  |  |
| &nbsp;&nbsp;&nbsp;Remaining | 3673 | 5124 |
| Uncommitted lines of credit |  |  |
| &nbsp;&nbsp;&nbsp;Total | 910200 | 1024200 |
| &nbsp;&nbsp;&nbsp;Used | (109900) | (205600) |
| &nbsp;&nbsp;&nbsp;Remaining | 800300 | 818600 |
| Total remaining lines of credit available | 803973 | 823724 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Market Risk

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)Foreign exchange risk management

The Group has exposure to foreign exchange risks on transactions denominated in currencies other than the functional currencies. The main foreign currency used for transactions of the Group is the U.S. dollar ("USD").

The Group enters into forward exchange contracts, foreign exchange futures and other contracts in response to currency exposures resulting from on-balance sheet assets and liabilities denominated in foreign currencies in order to limit the net foreign exchange position by currency to an appropriate level.

For the banking business, identifying assets and liabilities subject to foreign exchange risk, the Group sets a risk limit for the investment amount and the present value fluctuation amount arising from that portfolio, and manages its compliance with the limit on a daily basis. In addition, the Group regularly analyzes the changes in present value due to exchange rate fluctuations and monitors the impact on assets and liabilities.

Through the risk management procedures described above, the Group's net foreign exchange risk exposure and the effects on profit or loss before tax and shareholders' equity are not material.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)Interest rate risk management

The Group raises capital through interest-bearing borrowings and deposits, including those with floating interest rates, and hence is exposed to the risk of an increase in the interest payments resulting from rising interest rates. In order

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to prevent or reduce the risk of interest rate fluctuations, the Group maintains an appropriate mix of interest-bearing debt with fixed and floating interest rates to hedge the risk of interest rate fluctuations. For floating interest rate debt, the Group also continuously monitors interest rate fluctuations.

The sensitivity analysis was performed by using balances of the outstanding financial liabilities, including deposits and borrowings bearing floating interest rates, as of March 31, 2025 and 2026, assuming such liabilities were outstanding for the full fiscal year immediately before the respective dates, while holding all other variables constant.

The table below presents the impact of a 1% increase in market interest rates, which would reduce profit or loss before tax and shareholders' equity. A corresponding 1% decrease in market interest rates would result in an equal and opposite impact.

---

| | | |
|:---|:---|:---|
|  | *(In millions of yen)* | *(In millions of yen)* |
|  | **For the year ended** | **For the year ended** |
|  | **March 31, 2025** | **March 31, 2026** |
| Impact on profit or loss before tax | 18,085 | 23,111 |
| Impact on shareholders' equity | 12,500 | 15,947 |

---

For the banking business, identifying assets and liabilities subject to interest rate risk management, the Group sets a risk limit for the amount of fluctuation in the present value arising from the portfolio and manages compliance with the limit on a daily basis. In addition, the Group regularly analyzes the change in present value in response to changes in the shape of the yield curve (flattening and steepening) and monitors the impact on assets and liabilities. Risk monitoring is carried out by the Risk Management Department, which is independent from the business division, after organizationally separating the front, middle and back offices. Monitoring results are reported internally on a daily basis and regularly to the Asset Liability Management Committee and the Board of Directors.

At PayPay Bank Corporation, financial assets exposed to interest rate risk are mainly debt instruments. The fluctuation of the fair value of these financial assets, given certain fluctuations in interest rates, is used in quantitative analysis as part of the process to manage interest rate risk. As the debt instruments are measured at FVTOCI, the change in interest rate only affects the shareholders' equity but not profits before tax.

PayPay Bank Corporation calculates the "BPV" (Basis Point Value: the change in market value when interest rates change by 0.01%) for these financial instruments as the change in the present value of the portfolio due to interest rate fluctuations, and uses this for quantitative analysis in interest rate risk management. When calculating BPV, PayPay Bank Corporation breaks down the target financial instruments into appropriate cash flows for each product classification by characteristics of the financial instruments, and applies the change rates derived from interest rate fluctuations for each period determined by the PayPay Bank Corporation.

The fluctuation is based on the assumption that risk variables other than interest rates remain constant, and does not take into account the correlation between interest rates and other risk variables. In general, an increase in market interest rates results in a decrease in the fair value of debt instruments, while a decrease in market interest rates results in an increase in their fair value. The following table presents the sensitivity of the fair value to the fluctuation of interest by 100 basis points.

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| | | |
|:---|:---|:---|
|  | *(In millions of yen)* | *(In millions of yen)* |
|  | **As the date of** | **As the date of** |
|  | **March 31, 2025** | **March 31, 2026** |
| Change of fair value | 9,225 | 11,155 |

---

In the calculation of the above table, debt securities held to maturity are excluded as they are not affected by changes in market interest rates.

(3) Fair Value of Financial Instruments

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Group refers to the levels of the fair value hierarchy for financial instruments measured at fair value in the consolidated financial statements based on the following inputs:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Level 1 inputs are quoted prices in active markets for identical assets or liabilities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Level 2 inputs are quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Level 3 inputs are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable, which reflect the reporting entity's own assumptions that market participants would use in establishing a price.

Transfers between levels of fair value hierarchy are recognized as if they occurred at each reporting date. There were no material transfers between the levels for the years ended March 31, 2025 and 2026.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The following table presents financial instruments measured at fair value on a recurring basis by level within the fair value hierarchy.

**As of March 31, 2025**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  |  |  | *(In millions of yen)* | *(In millions of yen)* |
|  | **Fair value** | **Fair value** | **Fair value** | **Fair value** |
|  | **Level 1** | **Level 2** | **Level 3** | **Total** |
| **Securities** |  |  |  |  |
| **Financial assets measured at FVTPL** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Debt instruments |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exchange traded funds | 132509 |  |  | 132509 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Equity instruments |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Equity securities | 184 |  |  | 184 |
| &nbsp;&nbsp;&nbsp;Financial assets measured at FVTOCI |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Debt instruments |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Japanese government bonds and municipal bonds | 4639 | 6786 |  | 11425 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Corporate and other debt securities |  | 87492 | 8200 | 95692 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Asset backed securities |  |  | 279442 | 279442 |
| Other financial assets |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Financial assets measured at FVTPL |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Derivative assets | 228 | 2006 |  | 2234 |
| Total | 137560 | 96284 | 287642 | 521486 |
| Other financial liabilities |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Financial liabilities measured at FVTPL |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Derivative liabilities | 102 | 1084 |  | 1186 |
| Total | 102 | 1084 |  | 1186 |

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**As of March 31, 2026**

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| | | | | |
|:---|:---|:---|:---|:---|
|  |  |  | *(In millions of yen)* | *(In millions of yen)* |
|  | **Fair value** | **Fair value** | **Fair value** | **Fair value** |
|  | **Level 1** | **Level 2** | **Level 3** | **Total** |
| **Securities** |  |  |  |  |
| **Financial assets measured at FVTPL** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Debt instruments |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exchange traded funds | 202879 |  |  | 202879 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Equity instruments |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Equity securities | 306 | 24 | 964 | 1294 |
| &nbsp;&nbsp;&nbsp;Financial assets measured at FVTOCI |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Debt instruments |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Japanese government bonds and municipal bonds | 55949 | 2725 |  | 58674 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Corporate and other debt securities | 3118 | 77736 | 6732 | 87586 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Asset backed securities |  |  | 335214 | 335214 |
| Other financial assets |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Financial assets measured at FVTPL |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Derivative assets | 203 | 2107 |  | 2310 |
| Total | 262455 | 82592 | 342910 | 687957 |
| Other financial liabilities |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Financial liabilities measured at FVTPL |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Derivative liabilities | 100 | 1268 |  | 1368 |
| Total | 100 | 1268 |  | 1368 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The following table compares the fair value and carrying amount of the financial assets and financial liabilities. These are not measured at fair values in the Group's Consolidated Statements of Financial Position, but for which fair values are disclosed. Certain financial instruments with short-term maturities are not included as their carrying amounts approximate their fair value.

**As of March 31, 2025**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  |  |  |  | *(In millions of yen)* | *(In millions of yen)* |
|  | **Book <br> value** | **Fair value** | **Fair value** | **Fair value** | **Fair value** |
|  |  | **Level 1** | **Level 2** | **Level 3** | **Total** |
| Financial assets measured at amortized cost |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Loan and advances |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mortgage loans | 664594 |  |  | 673236 | 673236 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Overdraft | 261943 |  |  | 327971 | 327971 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other | 383 |  |  | 383 | 383 |
| &nbsp;&nbsp;&nbsp;Securities |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Debt instruments |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Japanese government bonds and municipal bonds | 353590 | 126188 | 220256 |  | 346444 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Corporate and other debt securities | 200015 |  | 195886 |  | 195886 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Asset backed securities | 2891 |  |  | 2866 | 2866 |
| Total | 1483416 | 126188 | 416142 | 1004456 | 1546786 |
| Financial liabilities measured at amortized<br> cost |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Deposits |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Demand deposits | 1688643 |  | 1688643 |  | 1688643 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Time deposits | 152393 |  | 152222 |  | 152222 |
| &nbsp;&nbsp;&nbsp;Borrowings |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loan payables | 315578 |  | 99354 | 210907 | 310261 |
| Total | 2156614 |  | 1940219 | 210907 | 2151126 |

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**As of March 31, 2026**

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  |  |  |  | *(In millions of yen)* | *(In millions of yen)* |
|  |  | **Fair value** | **Fair value** | **Fair value** | **Fair value** |
|  | **Book <br> value** | **Level 1** | **Level 2** | **Level 3** | **Total** |
| Financial assets measured at amortized cost |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Loan and advances |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mortgage loans | 909483 |  |  | 908513 | 908513 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Overdraft | 312255 |  |  | 337479 | 337479 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other | 16879 |  |  | 16841 | 16841 |
| &nbsp;&nbsp;&nbsp;Securities |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Debt instruments |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Japanese government bonds and municipal bonds | 720182 | 264985 | 439089 |  | 704074 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Corporate and other debt securities | 328535 |  | 319545 |  | 319545 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Asset backed securities | 2471 |  |  | 2480 | 2480 |
| Total | 2289805 | 264985 | 758634 | 1265313 | 2288932 |
| Financial liabilities measured at amortized<br> cost |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Deposits |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Demand deposits | 2090486 |  | 2090486 |  | 2090486 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Time deposits | 178594 |  | 178319 |  | 178319 |
| &nbsp;&nbsp;&nbsp;Borrowings |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loan payables | 491956 |  | 208150 | 278056 | 486206 |
| Total | 2761036 |  | 2476955 | 278056 | 2755011 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) Fair value of financial instruments is measured as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)Debt instruments

Fair values of the debt instruments that mainly consist of Japanese government bonds and municipal bonds are evaluated at quoted prices for the identical assets in active markets. When these prices are available, the fair values are classified as Level 1. When these prices are not available, the fair values are evaluated using observable inputs based on available information such as reference statistical prices, and those are classified as Level 2.

Fair values of the debt instruments that consist of exchange traded funds are evaluated at quoted prices for the identical assets in active markets and those are classified as Level 1. Fair values of the debt instruments that consist of corporate bonds are calculated by each contract using discounted future cash flows according to the contract period using an interest rate that reflects the credit risk. Those that are measured using market-observable inputs such as interest rates reflecting external credit ratings are classified as Level 2, and those that use unobservable inputs such as unobservable credit spread of the issuers of the debt instruments are classified as Level 3. The Risk Management Department quarterly evaluates whether the quoted price meets the eligibility of fair value under IFRS 13 by determining whether there is a certain discrepancy between the quoted price and the price calculated by the Financial Planning Department on a sample basis by type of debt instruments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)Equity instruments

These securities include listed shares and private investment trust. Fair values of listed shares are evaluated at quoted prices for the identical assets in active markets and those are classified as Level 1. Fair values of private investment trust that are measured using market-observable inputs such as interest rates reflecting external credit ratings are classified as Level 2, and those that use significant unobservable inputs such as unobservable real estate risk premium are classified as Level 3.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C)Asset backed securities

These securities include residential mortgage backed, credit card asset backed, installment receivables backed, and other asset backed securities. The markets for these securities are not active, and fair values of the asset backed securities are evaluated using broker or dealer quotations of identical or similar securities where the significant inputs are yields, prepayment rates, default probabilities and loss severities. Because such significant inputs are unobservable, these are classified as Level 3.

The Group monitors whether there is a continuing discrepancy between the quotations from brokers or

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dealers and the value calculated by the Risk Management Department on a daily basis using discounted future cash flows. In addition, the Risk Management Department quarterly evaluates whether the quoted price meets the eligibility of fair value under IFRS 13 by determining whether there is a certain discrepancy between the quoted price and the price calculated by the Financial Planning Department on a sample basis by type of asset backed securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D)Derivative instruments

Fair values of the derivative instruments that consist of listed derivatives are evaluated at quoted prices for the identical derivatives in active markets and those are classified as Level 1. Fair values of the derivative instruments that consist of over-the-counter foreign currency derivatives are evaluated using broker or dealer quotations derived by discounted future cash-flow method where the significant inputs are future foreign exchange rates and interest rates. These are classified as Level 2.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(E)Loans and advances

Fair values of the loans and advances are measured based on the discounted cash flow model using an interest rate considering the credit spread that is based on the internal rating and loan terms. Because the credit spread is a significant unobservable input, these are classified as Level 3.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(F)Deposits

Fair values of the on-demand deposits that are paid immediately upon demand on the statement of financial position date are measured at fair value at that amount. Fair values of the time deposits are measured based on the discounted present value obtained by discounting future cash flows applying current rates for deposits of similar remaining maturities. For those with a short remaining maturity (six months or less), fair value is approximately equal to book value, so the book value is recorded as fair value. These are classified as Level 2.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(G)Borrowings

Fair values of the borrowings are measured based on the discounted cash flow model using an interest rate considering the Group's own credit spread that would be used for borrowing with the same terms and maturity. The borrowings mainly consist of those classified as Level 3 since the Group's own credit spread is used for fair value measurement which is unobservable. Other financial instruments not listed above, such as call loans, are settled mainly within one year and book value approximates their fair value.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) The changes in financial instruments categorized as Level 3

The changes in financial instruments categorized as Level 3 are as follows:

**For the year ended March 31, 2025**

---

| | | | |
|:---|:---|:---|:---|
|  |  | *(in millions of yen)* | *(in millions of yen)* |
|  | **Financial assets measured at FVTOCI** | **Financial assets measured at FVTOCI** | **Financial assets measured at FVTOCI** |
|  | **Asset backed<br>securities** | **Corporate and other debt securities** | **Total** |
| Fair value as of April 1, 2024 | 204271 | 9663 | 213934 |
| &nbsp;&nbsp;&nbsp;Purchases | 138261 |  | 138261 |
| &nbsp;&nbsp;&nbsp;Total gains (losses) for the year: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Included in other comprehensive income (loss) | (1964) | (63) | (2027) |
| &nbsp;&nbsp;&nbsp;Sales and settlements | (61126) | (1400) | (62526) |
| Fair value as of March 31, 2025 | 279442 | 8200 | 287642 |

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**For the year ended March 31, 2026**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  |  |  | *(in millions of yen)* | *(in millions of yen)* |
|  | **Financial assets measured at FVTPL** | **Financial assets measured at FVTOCI** | **Financial assets measured at FVTOCI** | **Financial assets measured at FVTOCI** |
|  | **Equity Securities** | **Asset backed<br>securities** | **Corporate and other debt securities** | **Total** |
| Fair value as of April 1, 2025 | - | 279442 | 8200 | 287642 |
| &nbsp;&nbsp;&nbsp;Purchases | 964 | 135968 | - | 136932 |
| &nbsp;&nbsp;&nbsp;Total gains (losses) for the year: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Included in other comprehensive income (loss) | - | (192) | (68) | (260) |
| &nbsp;&nbsp;&nbsp;Sales and settlements | - | (80004) | (1400) | (81404) |
| Fair value as of March 31, 2026 | 964 | 335214 | 6732 | 342910 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) Valuation techniques and inputs

The valuation techniques used to measure the fair value of major assets classified as Level 3 and significant unobservable inputs are as follows:

---

| | | |
|:---|:---|:---|
| **Financial assets** | **Valuation technique** | **Significant unobservable inputs** |
| Asset backed securities | Discounted cash flows | Discount margin/spreads<br>Constant prepayment rate<br>Constant default rate |
| Equity securities | Discounted cash flows | Real estate risk premium |
| Loan and advances<br>Debt instruments | Discounted cash flows | Credit spread |

---

The fair values of the asset backed securities were measured using broker or dealer quotes. These quotes are derived using discounted cash flow models. The broker or dealer quotes used are non-binding and reflect indicative pricing based on proprietary models and assumptions. The Group reviews the significant inputs used in the calculation of the quoted price. The Group believes that no adjustments are required for the broker or dealer quotes, and the use of broker or dealer quotes represents the best estimate of fair value, given the lack of active markets and observable inputs for asset backed securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)Discount margin/spreads

Discount margin/spreads represent the discount rates used when calculating the present value of future cash flows. In discounted cash flow models, such spreads are added to the benchmark rate when discounting the future expected cash flows. Hence, these spreads reduce the net present value of an asset. They generally reflect the premium an investor expects to achieve over the benchmark interest rate to compensate for the higher risk driven by the uncertainty of the cash flows caused by the credit quality of the asset.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)Constant prepayment rate

The constant prepayment rates represent the expected future speed at which a loan portfolio will be repaid ahead of the contractual terms of the underlying loans. Hence, this rate reduces the net present value of the asset backed securities when it is high.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C)Constant default rate

The constant default rate reflects the percentage of loans within a pool of loans on which the borrowers have fallen behind in making payments to their lender by more than 90 days. Hence, this rate reduces the net present value of the asset backed securities when it is high.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D)Real estate risk premium

Real estate risk premium reflects terminal capitalization rates which are used in calculating reversionary value of real estate, and discount margin/spreads of real estate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(E)Credit spread

The credit spread represents the discount rate used when calculating the present value of future cash flows. In discounted cash flow models, such a spread is added to the benchmark rate when discounting the future expected cash flows. Hence, this spread reduces the net present value of debt instruments. The credit spread

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reflects the additional net yield an investor can earn from a security with more credit risk relative to one with less credit risk.

(4) Transfers of financial assets that do not meet the requirements for derecognition

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Transfer of financial assets pertaining to Code-based Payment Business

The Group transfers certain settlement receivables included in accounts receivable to an external payment service provider. These transferred receivables subject to recourse obligation that makes the Group obligated to pay in the case of the debtor's default and other specific conditions. As the Group bears credit risks arising from such transactions until collection of receivables, the Group has not substantially transferred all risks and rewards and therefore, such receivables are not derecognized.

The balances of transferred receivables that did not meet the requirement for derecognition of financial assets were 21,615 million yen and 20,494 million yen, which were included in accounts receivable in the Group's Consolidated Statements of Financial Position, as of March 31, 2025 and 2026, respectively. The amounts received due to the transfer were 3,269 million yen and 1,694 million yen, which were included in other financial liabilities in the Group's Consolidated Statements of Financial Position, as of March 31, 2025 and 2026, respectively. As these financial instruments are settled in a short period of time, the carrying amounts are equal to or reasonably approximate to their fair values, and consequently net positions are equal to or reasonably approximate to the difference between the fair value of the transferred assets and the associated liabilities.

This liability will be settled when the payment for the transferred assets by the original debtors is made and the Group is unable to utilize the transferred assets until the settlement is made. The difference between the amount of transferred assets and related liabilities as of March 31, 2025 and 2026 are because of timing difference between the transfer and the collection.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Transfers of receivables arising from the credit card business

The Group transfers certain credit card receivables included in loans and advances to customers to financial institutions. Certain transferred receivables are subject to recourse obligation that makes the Group obligated to pay the transferee in the case of the debtor's default and other conditions. As the Group bears credit risks arising from such transfers until the collection of such receivables, the Group has not substantially transferred all risks and rewards and therefore, such receivables are not derecognized.

The balances of receivables transferred that did not meet the requirement for derecognition of financial assets were 1,144 million yen and 7,133 million yen which were included in loans and advances to customers in the Group's Consolidated Statements of Financial Position, as of March 31, 2025 and 2026, respectively. The amounts received from the transferee were 70,000 million yen and 160,000 million yen, which were included in borrowings in the Consolidated Statements of Financial Position, as of March 31, 2025 and 2026, respectively.

This borrowing will be derecognized when the payment for the transferred receivables by the original debtors received is executed and until such payment is received the Group is unable to utilize the transferred receivables. The difference between the amount of transferred receivables and related borrowing for the years ended March 31, 2025 and 2026 are due to collection of credit card receivables.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)Transfers of securities arising from repurchase agreements

For the year ended March 31, 2026, the Group transfers certain debt instruments measured at amortized cost included in securities to money market dealers. While the Group transfers the debt instruments, the Group enters into agreements to repurchase them at fixed prices in the future, and therefore the Group bears the price fluctuation risks of such debt instruments. As the Group bears the price fluctuation risks arising from such transactions until the repurchase is executed, the Group has not substantially transferred all risks and rewards and therefore, such securities are not derecognized.

The balance of transferred securities that did not meet the requirement for derecognition of financial assets was 111,360 million yen, which was included in securities in the Group's Consolidated Statements of Financial Position, as of March 31, 2026. The amount received from the transferee was 108,981 million yen, which was included in borrowings in the Group's Consolidated Statements of Financial Position, as of March 31, 2026.

This borrowing will be derecognized when the repurchase by the Group is executed, and until the repurchase is executed, the Group is unable to utilize the transferred debt instruments. In addition, the carrying amounts of the transferred debt instruments and the associated borrowings reasonably approximate their fair values as of March 31, 2026.

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(5) Assets Pledged as Collateral

The carrying amounts of assets pledged as collateral are as follows:

---

| | | |
|:---|:---|:---|
|  | *(In millions of yen)* | *(In millions of yen)* |
|  | **March 31, 2025** | **March 31, 2026** |
| Guarantee deposits <sup>(1)</sup> | 2133 | 1980 |
| Loans and advances to customers <sup>(2)</sup> | 30982 | 30999 |
| Securities <sup>(1)(3)</sup> | 249056 | 605904 |
| Other <sup>(1)</sup> | 3713 | 5162 |
| Total | 285884 | 644045 |

---

(1)Financial institutions have the right to dispose of the assets pledged as collateral and apply the proceeds to satisfy the outstanding debt or offset the amount due in the event of a default.

(2)The Group does not derecognize credit card receivables that are transferred to securitization trusts. The amounts of borrowings from securitization backed by pledged loans and advances to customers was 55,000 million yen as of March 31, 2025 and 2026. The transfers of credit card receivables that do not meet the requirements for derecognition are shown in (ii) Transfers of receivables arising from the credit card business above.

(3)PayPay Bank Corporation pledges securities as collateral with the Bank of Japan and the Japanese Banks' Payment Clearing Network for funding and for settlement purposes.

(6) Offsetting of Financial Assets and Financial Liabilities

The offsetting information regarding financial assets and financial liabilities is as follows:

**As of March 31, 2025**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  |  |  | *(In millions of yen)* | *(In millions of yen)* |
|  | **Gross amounts<br>of recognized<br>financial assets<br>and financial<br>liabilities** | **Amounts offset in Consolidated<br>Statements of<br>Financial<br>Position** | **Net amounts<br>presented in Consolidated<br>Statements of<br>Financial<br>Position** | **Net amounts** |
| **Financial assets** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Accounts receivable |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Settlement receivables | 54611 | (21904) | 32707 | 32707 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other receivables | 15396 | (15396) |  |  |
| &nbsp;&nbsp;&nbsp;Loans and advances to customers |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Credit card receivables | 1 | (1) |  |  |
| &nbsp;&nbsp;&nbsp;Other financial assets |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Receivables from third party operators of<br> deposit machines | 21418 | (16075) | 5343 | 5343 |
| **Financial liabilities** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Settlement payables | 934212 | (36473) | 897739 | 897739 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Credit card payables | 27742 | (373) | 27369 | 27369 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other payables | 545 | (1) | 544 | 544 |
| &nbsp;&nbsp;&nbsp;Other financial liabilities |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses | 454 | (454) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Suspense receipts | 19496 | (16075) | 3421 | 3421 |

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**As of March 31, 2026**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  |  |  | *(In millions of yen)* | *(In millions of yen)* |
|  | **Gross amounts<br>of recognized<br>financial assets<br>and financial<br>liabilities** | **Amounts offset in<br>Consolidated<br>Statements of<br>Financial<br>Position** | **Net amounts<br>presented in<br>Consolidated<br>Statements of<br>Financial<br>Position** | **Net amounts** |
| **Financial assets** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Accounts receivable |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Settlement receivables | 55361 | (25674) | 29687 | 29687 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other receivables | 18676 | (18676) |  |  |
| &nbsp;&nbsp;&nbsp;Loans and advances to customers |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Credit card receivables | 1 | (1) |  |  |
| &nbsp;&nbsp;&nbsp;Other financial assets |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Receivables from third party operators of<br> deposit machines | 22201 | (17547) | 4654 | 4654 |
| **Financial liabilities** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Settlement payables | 1108070 | (43533) | 1064537 | 1064537 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Credit card payables | 30684 | (404) | 30280 | 30280 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other payables | 589 | (2) | 587 | 587 |
| &nbsp;&nbsp;&nbsp;Other financial liabilities |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses | 412 | (412) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Suspense receipts | 20681 | (17547) | 3134 | 3134 |

---

The Group has no enforceable master netting arrangement or similar agreement.

**37. Subsidiaries and Investments Accounted for Using the Equity Method**

(1) Information on Subsidiaries

The Group's consolidated financial statements include the following subsidiaries.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  |  |  | **Percentage of ownership** | **Percentage of ownership** |
| **Name** | **Primary business activities** | **Country of<br>incorporation** | **March 31, 2025** | **March 31, 2026** |
| PayPay Card Corporation | Credit card business | Japan | 100 | 100 |
| PayPay India Private Limited | Software development | India | 100 | 100 |
| PayPay Bank Corporation <sup>(1)</sup> | Banking business | Japan | 6 | 76 |
| PayPay Securities Corporation <sup>(2)</sup> | Security intermediary business | Japan | 29 | 75 |
| PPSC Investment Service Corporation <sup>(3)</sup> | PayPay Point investment-related business | Japan | 29 | 75 |
| Credit Engine, Inc. <sup>(4)</sup> | Software development | Japan | 100 | 100 |
| LENDY Servicing, Inc. <sup>(5)</sup> | Servicer | Japan | 100 | 100 |
| CE Asset, Inc. <sup>(5)</sup> | Servicer | Japan | 100 | 100 |
| Credit Engine Asia Pte. Ltd. <sup>(6)</sup> | Servicer | Singapore | 100 |  |

---

(1)The Group consolidated the financial statements of PayPay Bank Corporation retrospectively from April 1, 2022 as PayPay Bank Corporation was acquired through a business combination of entities under common control with Z Financial Corporation (currently LY Corporation), a subsidiary of SBG. Refer to Note 7, *Business Combinations*, for details.

(2)The Group consolidated the financial statements of PayPay Securities Corporation retrospectively from April 1, 2022 as PayPay Securities Corporation was acquired through a business combination of entities under common control with SoftBank Corp. and LY Corporation, subsidiaries of SBG. Refer to Note 7, *Business Combinations*, for details.

(3)PPSC Investment Service Corporation is a subsidiary of PayPay Securities Corporation.

(4)Effective April 1, 2025, Credit Engine Group, Inc. absorbed Credit Engine, Inc., its wholly owned subsidiary, with Credit Engine Group, Inc. as the surviving company and Credit Engine, Inc. as the disappearing company.

(5)These companies are subsidiaries of Credit Engine, Inc. (formerly Credit Engine Group, Inc.).

(6) The liquidation of Credit Engine Asia Pte. Ltd. was completed, effective September 1, 2025.

(2) Summarized Financial Information and Other Information on a Subsidiary with Significant Non-controlling Interests

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The summarized financial information and other information on subsidiaries with significant non-controlling interests for the years ended March 31, 2024, 2025 and 2026 are as follows.

*PayPay Bank Corporation*

General Information

---

| | | | |
|:---|:---|:---|:---|
|  | **March 31, 2024** | **March 31, 2025** | **March 31, 2026** |
| Ownership of the non-controlling interests (%) <sup>(1)(2)</sup> | 94 | 94 | 24 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Non-controlling interests of PayPay Bank Corporation represent the share of PayPay Bank Corporation not owned by the Company's ultimate parent company, SBG, prior to the actual date of the business combination of entities under common control on April 11, 2025. Such interests arise as the Company applied the pooling of interests method of accounting for the acquisition of PayPay Bank Corporation retrospectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)On April 11, 2025, the Company acquired 47.1% of the common shares and all non-voting Class A preferred shares of PayPay Bank Corporation from Mitsui Sumitomo Insurance Co., Ltd. and SBG's subsidiary, Z Financial Corporation (currently LY Corporation), with such preferred shares subsequently converted into common shares on April 28, 2025, resulting in an ownership interest of 75.5%. Refer to Note 7, *Business Combinations* for further details.

---

| | | |
|:---|:---|:---|
|  |  | *(In millions of yen)* |
|  | **March 31, 2025** | **March 31, 2026** |
| Accumulated amount attributable to non-controlling <br> interests in PayPay Bank Corporation | 119,427 | 33,249 |

---

---

| | | | |
|:---|:---|:---|:---|
|  |  |  | *(In millions of yen)* |
|  | **For the year ended** | **For the year ended** | **For the year ended** |
|  | **March 31, 2024** | **March 31, 2025** | **March 31, 2026** |
| Profit for the year attributable to non-controlling<br> interests in PayPay Bank Corporation | 5,037 | 5,052 | 2,745 |

---

Summarized financial information

---

| | | |
|:---|:---|:---|
|  |  | *(In millions of yen)* |
|  | **March 31, 2025** | **March 31, 2026** |
| Total assets | 2179939 | 3155448 |
| Total liabilities | 2048079 | 3019577 |
| Total shareholders' equity | 131860 | 135871 |

---

---

| | | | |
|:---|:---|:---|:---|
|  |  |  | *(In millions of yen)* |
|  | **For the year ended** | **For the year ended** | **For the year ended** |
|  | **March 31, 2024** | **March 31, 2025** | **March 31, 2026** |
| Total revenue | 43322 | 49658 | 65745 |
| Profit for the year | 5483 | 5368 | 10844 |
| Total comprehensive income for the year, net of tax | 4351 | 1915 | 7444 |

---

---

| | | | |
|:---|:---|:---|:---|
|  |  |  | *(In millions of yen)* |
|  | **For the year ended** | **For the year ended** | **For the year ended** |
|  | **March 31, 2024** | **March 31, 2025** | **March 31, 2026** |
| Net cash provided by operating activities | 38709 | 82238 | 592220 |
| Net cash used in investing activities | (238302) | (102940) | (618910) |
| Net cash provided by (used in) financing activities | 77686 | (3645) | 104578 |
| Effect of exchange rate changes on cash and cash<br> equivalents | 392 | (11) |  |
| Increase (decrease) in cash and cash equivalents | (121515) | (24358) | 77888 |

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(3) Investments Accounted for Using the Equity Method

The consolidated financial statements of the Group include the following investments accounted for using the equity method:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  |  |  | **Percentage of ownership** | **Percentage of ownership** |
| **Name** | **Primary business activities** | **Country of<br>incorporation** | **March 31, 2025** | **March 31, 2026** |
| PayPay SC Corporation | Merchant acquisition agent | Japan | 34 | 34 |
| Binance Japan Inc.<sup>(1)</sup> | Cryptocurrency exchange business | Japan |  | 40 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)The Group acquired shares of Binance Japan Inc. in September 2025.

Financial information of individually immaterial investments accounted for using the equity method is as follows:

Information on investments accounted for using the equity method as of March 31, 2025 is omitted as it is immaterial.

---

| | |
|:---|:---|
|  | *(In millions of yen)* |
|  | **March 31, 2026** |
| Carrying amounts | 12,762 |

---

---

| | |
|:---|:---|
|  | *(In millions of yen)* |
|  | **For the year ended** |
|  | **March 31, 2026** |
| Share of loss | (137) |
| Share of total comprehensive loss | (137) |

---

(4) Structured Entities

The Group's consolidated structured entities include money trusts established and operated for specific purposes, and trusts established to facilitate securitization transactions for the Group's receivables. Although the Group does not hold voting rights or similar rights in these trusts, the Group has the power to direct the relevant activities under the trust agreements and other contractual arrangements. In addition, the Group is exposed to variable returns associated with income and other economic benefits generated by these trusts. Furthermore, the Group has the ability to affect the amount of such variable returns through its power over these trusts. Accordingly, the Group has determined that it controls these trusts and consolidates them. Except for additional trust contributions required to satisfy safeguarding obligations under the Payment Services Act, and for subordinated beneficial interests in securitization trusts, the Group has no contractual obligation to provide significant financial or other support to any of these trusts. In addition, the Group has not provided, and does not intend to provide, significant financial or other support to its consolidated structured entities. Additionally, the Group has no material unconsolidated structured entities.

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**38. Related Party Transactions**

The following tables provide significant balances and related party transactions for the years ended March 31, 2024, 2025 and 2026. For information about the Group's structure, including the parent companies, refer to Note 1, *Reporting Entity*.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Transactions with Related Parties

**For the year ended March 31, 2024**

Significant balances and transactions between the Group and related parties are as follows:

**<u>Settlement and Other Operating Transactions</u>**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  |  |  |  |  | *(In millions of yen)* |
| **Relationship** | **Name** | **Transactions** | **Profit or<br>loss** <sup>(1)</sup> | **Settlement<br>amounts** <sup>(2)</sup> | **Outstanding <br>receivable<br>(payable)<br>balances** <sup>(3)</sup> |
| Parent company | SoftBank Corp. | Granting PayPay Points to users<br>on behalf of SoftBank Corp. <sup>(4)</sup> |  | 19888 | 3350 |
|  |  |  |  |  | (184) |
|  |  | Securitization transaction involving<br>receivables |  | 51543 | 80278 |
| Parent company | LY Corporation | Rendering settlement service <sup>(5)</sup> | 15701 | 1768955 | (138749) |
|  |  | Bearing expenses of user incentives awarded by LY Corporation <sup>(6)</sup> | 6573 |  | (844) |
| Subsidiary of parent company | SB Payment Service<br>Corporation | Utilizing settlement system for<br>merchants <sup>(7)</sup> | 10245 | 912322 | 36144 |
|  |  |  |  |  | (4471) |
|  |  | Rendering settlement service <sup>(7)</sup> |  | 419058 | (22240) |

---

(1)Profit or loss shows the amount that is recorded in the Group's Consolidated Statements of Profit or Loss.

(2)Settlement amounts show the volume of settlements in millions of yen for settlement related services that are recorded as items in the Consolidated Statements of Financial Position and not recorded as profit or loss.

(3)The receivable and payable amounts outstanding are unsecured and will be settled in cash.

(4)The Group grants PayPay Points to users on behalf of SoftBank Corp. and claims those amounts from SoftBank Corp.

(5)The Group renders settlement services such as for LY Corporation's e-commerce businesses. The amounts of profit or loss and settlement amount are total of those with Yahoo Japan Corporation on and before September 30, 2023 and those with LY Corporation after September 30, 2023, due to the intra-group reorganizations of LY Corporation on October 1, 2023. Refer to Note 1, *Reporting Entity* for further details of the intra-group reorganizations of LY Corporation.

(6)The Group pays for user incentives awarded mainly by making purchases on LY Corporation's e-commerce platform.

(7)The Group utilizes SB Payment Service Corporation's settlement system for merchants, which enables users to top up the PayPay Balance and Other Items and billings of telecommunication services of SoftBank Corp.

**<u>Financial Transaction</u>**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  |  |  |  | *(In millions of yen)* |
| **Relationship** | **Name** | **Transactions** | **Interest amounts** | **Outstanding<br>receivable<br>(payable)<br>balances** |
| Parent company | LY Corporation | Loan payables and interest expenses <sup>(1)</sup> | 502 | (95100) |
|  |  | Deposits and interest received <sup>(1)</sup> | 428 |  |

---

(1)Interest amount is total of those with Z Holdings Corporation on and before September 30, 2023 and those with LY Corporation after September 30, 2023, due to the intra-group reorganizations of LY Corporation on October 1, 2023. Refer to Note 1, *Reporting Entity* for further details of the intra-group reorganizations of LY Corporation.

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**For the year ended March 31, 2025**

Significant balances and transactions between the Group and related parties are as follows:

**<u>Settlement and Other Operating Transactions</u>**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  |  |  |  |  | *(In millions of yen)* |
| **Relationship** | **Name** | **Transactions** | **Profit<br> or loss** <sup>(1)</sup> | **Settlement<br>amounts** <sup>(2)</sup> | **Outstanding<br>receivable<br>(payable)<br>balances** <sup>(3)</sup> |
| Parent company | SoftBank Corp. | Granting PayPay Points to users<br>on behalf of SoftBank Corp. <sup>(4)</sup> |  | 36385 | 4546 |
|  |  |  |  |  | (259) |
|  |  | Securitization transaction<br>involving receivables |  | 72914 | 123050 |
| Parent company | LY Corporation | Rendering settlement service <sup>(5)</sup> | 18253 | 1825130 | (148646) |
|  |  | Bearing expenses of user incentives awarded by LY Corporation <sup>(6)</sup> | 2814 |  | (474) |
| Subsidiary of parent company | SB Payment Service<br>Corporation | Utilizing settlement system<br>for merchants <sup>(7)</sup> | 8806 | 615825 | 32275 |
|  |  |  |  |  | (3531) |
|  |  | Rendering settlement service <sup>(7)</sup> |  | 721382 | (39036) |

---

(1)Profit or loss shows the amount that is recorded in the Group's Consolidated Statements of Profit or Loss.

(2)Settlement amounts show the volume of settlements in millions of yen for settlement related services that are recorded as items in the Consolidated Statements of Financial Position and not recorded as profit or loss.

(3)The receivable and payable amounts outstanding are unsecured and will be settled in cash.

(4)The Group grants PayPay Points to users on behalf of SoftBank Corp. and claims those amounts from SoftBank Corp.

(5)The Group renders settlement services such as for LY Corporation's e-commerce businesses.

(6)The Group pays for user incentives awarded mainly by making purchases on LY Corporation's e-commerce platform.

(7)The Group utilizes SB Payment Service Corporation's settlement system for merchants, which enables users to top up the PayPay Balance and Other Items and billings of telecommunication services of SoftBank Corp.

**<u>Financial Transactions</u>**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  |  |  |  | *(In millions of yen)* | *(In millions of yen)* |  |
| **Relationship** | **Name** | **Transactions** | **Interest amounts** | **Interest amounts** | **Outstanding<br>receivable<br>(payable)<br>balances** | **Outstanding<br>receivable<br>(payable)<br>balances** |  |
| Parent company | LY Corporation | Loan payables and interest expenses |  | 493 |  | (50,052 |) |

---

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**For the year ended March 31, 2026**

Significant balances and transactions between the Group and related parties are as follows:

**<u>Settlement and Other Operating Transactions</u>**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  |  |  |  |  | *(In millions of yen)* |
| **Relationship** | **Name** | **Transactions** | **Profit or<br>loss** <sup>(1)</sup> | **Settlement<br>amounts** <sup>(2)</sup> | **Outstanding<br>receivable<br>(payable)<br>balances** <sup>(3)</sup> |
| Parent company | SoftBank Corp. | Granting PayPay Points to users<br>on behalf of SoftBank Corp. <sup>(4)</sup> |  | 55699 | 5200 |
|  |  |  |  |  | (459) |
|  |  | Securitization transaction<br>involving receivables |  | 62916 | 139630 |
| Parent company | LY Corporation | Rendering settlement service <sup>(5)</sup> | 21947 | 2097781 | (167738) |
|  |  | Bearing expenses of user incentives awarded by LY Corporation <sup>(6)</sup> | 2897 |  | (358) |
| Subsidiary of parent company | SB Payment Service<br>Corporation | Utilizing settlement system for<br>merchants <sup>(7)</sup> | 8697 | 591330 | 29368 |
|  |  |  |  |  | (1963) |
|  |  | Rendering settlement service <sup>(7)</sup> |  | 1011159 | (53688) |

---

(1)Profit or loss shows the amount that is recorded in the Group's Consolidated Statements of Profit or Loss.

(2)Settlement amounts show the volume of settlements in millions of yen for settlement related services that are recorded as items in the Consolidated Statements of Financial Position and not recorded as profit or loss.

(3)The receivable and payable amounts outstanding are unsecured and will be settled in cash.

(4)The Group grants PayPay Points to users on behalf of SoftBank Corp. and claims those amounts from SoftBank Corp.

(5)The Group renders settlement services such as for LY Corporation's e-commerce businesses.

(6)The Group pays for user incentives awarded mainly by making purchases on LY Corporation's e-commerce platform.

(7)The Group utilizes SB Payment Service Corporation's settlement system for merchants, which enables users to top up the PayPay Balance and Other Items and billings of telecommunication services of SoftBank Corp.

**<u>Financial Transactions</u>**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  |  |  |  | *(In millions of yen)* |
| **Relationship** | **Name** | **Transactions** | **Interest<br>amounts** | **Outstanding receivable<br>(payable) balances** |
| Parent company | LY Corporation | Loan payables and interest<br>expenses | 278 | (20035) |

---

**<u>Equity Transactions</u>**

There are no significant impacts either on assets or liabilities as of March 31, 2026 or profit or loss for the year ended March 31, 2026 arising from the transactions listed in the table below.

---

| | | | |
|:---|:---|:---|:---|
|  |  |  | *(In millions of yen)* |
| **Relationship** | **Name** | **Transactions** | **Amount** |
| Parent company | SoftBank Corp. | Acquisition of shares <sup>(1)</sup> | 5727 |
|  |  | Issuance of new shares <sup>(3)</sup> | 34889 |
| Parent company | LY Corporation | Acquisition of shares <sup>(1)</sup> | 80 |
|  |  | Issuance of new shares <sup>(3)</sup> | 34889 |
| Other affiliated company | SVF II Piranha (DE) LLC | Exercise of stock options <sup>(2)</sup> | 15901 |
|  |  | Issuance of new shares <sup>(3)</sup> | 35944 |
| Subsidiary of parent company | Z Financial Corporation <sup>(5)</sup><br>(currently LY Corporation) | Acquisition of shares <sup>(4)</sup> | 117000 |

---

(1)On April 1, 2025, the Company acquired common shares of PayPay Securities Corporation at 100,000 yen per share.

(2)On April 4, 2025, all of the 1st Stock Options issued by the Company and held by SVF II Piranha (DE) LLC were exercised.

(3)On April 10, 2025, the Company issued common shares through a third-party allotment.

(4)On April 11, 2025, the Company acquired common and Class A preferred shares of PayPay Bank Corporation at 94,584 yen per share.

(5)Z Financial Corporation was merged into LY Corporation on August 1, 2025.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Compensation for Key Executives

The compensation for our key executives (directors) is as follows:

---

| | | | |
|:---|:---|:---|:---|
|  |  | *(In millions of yen)* | *(In millions of yen)* |
|  | **For the year ended** | **For the year ended** | **For the year ended** |
| **Types of compensation** | **March 31, 2024** | **March 31, 2025** | **March 31, 2026** |
| &nbsp;&nbsp;&nbsp;Remuneration and bonuses | 231 | 262 | 379 |
| &nbsp;&nbsp;&nbsp;Share-based payments <sup>(1)</sup> |  |  | 189 |
| Total | 231 | 262 | 568 |

---

(1)As the Group completed its initial public offering on March 12, 2026 and satisfied the IPO condition, the Group commenced the recognition of share-based payment expenses in the Consolidated Statements of Profit or Loss for the year ended March 31, 2026

**39. Commitments**

Significant commitments for the purchase of goods and services are as follows:

---

| | | |
|:---|:---|:---|
|  |  | *(In millions of yen)* |
|  | **March 31, 2025** | **March 31, 2026** |
| Purchase contracts for services | 3738 | 25175 |
| Intangible assets | 1138 | 515 |
| Property and equipment | 192 | 494 |
| Total | 5068 | 26184 |

---

**40. Supplemental Cash Flow Information**

(1)Classification of cash flows in Financial Services segment

The Group classifies the cash flows from changes in assets and liabilities associated with its banking business, such as loans and advances and deposits from customers, as cash flows from operating activities in the Consolidated Statements of Cash Flows because the changes are derived from the principal revenue-producing activities.

(2)Interests received and Interests paid

Cash flows from operating activities include the following amounts of interest received and interest paid (negative figures indicate payments).

---

| | | | |
|:---|:---|:---|:---|
|  |  |  | *(In millions of yen)* |
|  | **For the year ended** | **For the year ended** | **For the year ended** |
|  | **March 31, 2024** | **March 31, 2025** | **March 31, 2026** |
| Interests received | 74962 | 89771 | 115524 |
| Interests paid | (2246) | (4463) | (10466) |

---

(3)Significant Non-cash Transactions

Significant non-cash transactions are as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Issuance of stock options

The Company granted stock options to the Group's directors and employees for the year ended March 31, 2026. The stock options granted with no cash consideration are non-cash transactions. Refer to Note 35, *Share-based Payments* for further detail.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Lease transactions

---

| | | | |
|:---|:---|:---|:---|
|  |  |  | *(In millions of yen)* |
|  | **For the year ended** | **For the year ended** | **For the year ended** |
|  | **March 31, 2024** | **March 31, 2025** | **March 31, 2026** |
| Increase in right-of-use assets | 1,852 | 8,862 | 504 |

---

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**41. Subsequent Events**

**Agreement to acquire T&D Financial Life Insurance Company**

On June 4th, 2026, the Company entered into the Share Purchase Agreement to purchase 70.2% of shares of T&D Financial Life Insurance Company. The consideration for the shares is expected to be approximately 132 billion yen. The acquisition is intended to add life insurance services to the Company's financial services offering and to combine T&D Financial Life Insurance Company's business platform with the Company's digital platform and customer base. The consummation of the share acquisition is subject to regulatory approval and permits from the relevant authorities, the implementation of an IFRS transition plan at T&D Financial Life Insurance Company and other customary closing conditions.

As of the date of approval of these consolidated financial statements, the financial impact of the transaction cannot be reasonably estimated because the transaction has not yet been completed and the purchase price allocation and related assessments have not been finalized.

**Extinguishment of Stock Options under the Trust-Type Stock Option Plan**

On June 11, 2026, the knockout condition applicable to the trust-type stock option plan was triggered, resulting in the automatic extinguishment of all remaining outstanding stock options under the 2nd through 46th Series Stock Option plan. This was a non-adjusting subsequent event and had no material impact on the consolidated financial statements. In addition, the extinguishment of these stock options had no material impact on the calculation of diluted earnings per share.

**42. Approval of Consolidated Financial Statements**

The consolidated financial statements have been approved by Wataru Kagechika, Managing Corporate Officer and Chief Financial Officer, on June 30, 2026.

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# Schedule I—Condensed Financial Information

# In accordance with Rule 5-04 of Regulation S-X, management concluded that the Group is required to present Condensed Financial Information as of March 31, 2025 and 2026, and for each of the three years ended March 31, 2026.

# Management calculated the restricted net assets, as defined in Rule 1-02(dd) of Regulation S-X, for each consolidated subsidiary. As of March 31, 2026, the restricted net assets of PayPay Card Corporation and PayPay Bank Corporation were 724,001 million yen and 41,071 million yen, respectively. In the aggregate, these restricted net assets exceeded 25 % of the Group's consolidated net assets of 430,761 million yen.
**PayPay Corporation**

**Condensed Statements of Financial Position**

---

| | | |
|:---|:---|:---|
|  |  | (*In millions of yen*) |
|  | **March 31, 2025** | **March 31, 2026** |
| **Assets** |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | 133350 | 308218 |
| &nbsp;&nbsp;&nbsp;Guarantee deposits | 590878 | 624995 |
| &nbsp;&nbsp;&nbsp;Accounts receivable | 472813 | 579421 |
| &nbsp;&nbsp;&nbsp;Loans and advances to customers | 51 | 50 |
| &nbsp;&nbsp;&nbsp;Securities | 35953 | 65612 |
| &nbsp;&nbsp;&nbsp;Other financial assets | 11264 | 15271 |
| &nbsp;&nbsp;&nbsp;Property and equipment | 1666 | 1814 |
| &nbsp;&nbsp;&nbsp;Right-of-use assets | 2959 | 4366 |
| &nbsp;&nbsp;&nbsp;Intangible assets | 18958 | 20883 |
| &nbsp;&nbsp;&nbsp;Investments in subsidiaries and associates | 115165 | 257536 |
| &nbsp;&nbsp;&nbsp;Deferred tax assets | 12737 | 70273 |
| &nbsp;&nbsp;&nbsp;Other assets | 5126 | 5036 |
| **Total assets** | 1400920 | 1953475 |
| **Liabilities** |  |  |
| &nbsp;&nbsp;&nbsp;Deposits | 391595 | 451263 |
| &nbsp;&nbsp;&nbsp;Accounts payable | 842956 | 1008463 |
| &nbsp;&nbsp;&nbsp;Income tax payables | 2995 | 4872 |
| &nbsp;&nbsp;&nbsp;Other financial liabilities | 21099 | 32485 |
| &nbsp;&nbsp;&nbsp;Provisions | 745 | 1466 |
| &nbsp;&nbsp;&nbsp;Lease liabilities | 6744 | 6166 |
| &nbsp;&nbsp;&nbsp;Other liabilities | 14523 | 15371 |
| **Total liabilities** | 1280657 | 1520086 |
| **Shareholders' equity** |  |  |
| &nbsp;&nbsp;&nbsp;Issued capital | 91434 | 200635 |
| &nbsp;&nbsp;&nbsp;Share premium | 968 | 110799 |
| &nbsp;&nbsp;&nbsp;Retained earnings | 27861 | 121955 |
| **Total shareholders' equity** | 120263 | 433389 |
| **Total liabilities and shareholders' equity** | 1400920 | 1953475 |

---

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**Condensed Statements of Profit or Loss**

---

| | | | |
|:---|:---|:---|:---|
|  |  |  | (*In millions of yen*) |
|  | **For the year ended** | **For the year ended** | **For the year ended** |
|  | **March 31, 2024** | **March 31, 2025** | **March 31, 2026** |
| Transaction and service income | 167871 | 217432 | 273939 |
| Interest income | 36 | 325 | 1783 |
| Gains (losses) on financial instruments | (59) | 105 | 882 |
| Other operating income | 1740 | 1439 | 2562 |
| **Total revenue** | 169588 | 219301 | 279166 |
| Point expenses | (65078) | (86424) | (110416) |
| Settlement related cost | (41872) | (46894) | (52816) |
| Employee benefit expenses | (21853) | (20972) | (23673) |
| Professional and outsourcing services expenses | (15480) | (12757) | (14081) |
| Provision for loss allowance | (536) | 93 | 67 |
| Other operating expenses | (30416) | (30899) | (34890) |
| **Total operating expenses** | (175235) | (197853) | (235809) |
| **Operating profit (loss)** | (5647) | 21448 | 43357 |
| **Profit (loss) before tax** | (5647) | 21448 | 43357 |
| Income tax (expense) benefit | 2506 | 9651 | 50710 |
| **Profit (loss) for the year** | (3141) | 31099 | 94067 |

---

**Condensed Statements of Cash Flows**

---

| | | | |
|:---|:---|:---|:---|
|  |  |  | (*In millions of yen*) |
|  | **For the year ended** | **For the year ended** | **For the year ended** |
|  | **March 31, 2024** | **March 31, 2025** | **March 31, 2026** |
| **Net cash provided by (used in) operating activities** | (254620) | (133687) | 140554 |
| **Cash flows from (used in) investing activities** |  |  |  |
| &nbsp;&nbsp;&nbsp;Purchases of securities | (14394) | (21555) | (43943) |
| &nbsp;&nbsp;&nbsp;Proceeds from sales/redemption of securities |  |  | 14400 |
| &nbsp;&nbsp;&nbsp;Purchases of intangible assets | (9235) | (8360) | (8101) |
| &nbsp;&nbsp;&nbsp;Purchases of shares of subsidiaries and associates | (6596) | (8543) | (11655) |
| &nbsp;&nbsp;&nbsp;Payments into term deposits | (1740) | (1861) |  |
| &nbsp;&nbsp;&nbsp;Others | (588) | (3641) | (2181) |
| **Net cash used in investing activities** | (32553) | (43960) | (51480) |
| **Cash flows from (used in) financing activities** |  |  |  |
| &nbsp;&nbsp;&nbsp;Repayments of lease liabilities | (714) | (1075) | (1531) |
| &nbsp;&nbsp;&nbsp;Proceeds from issuance of new shares | ― | ― | 217522 |
| &nbsp;&nbsp;&nbsp;Payment for the purchase of the equity interest of subsidiaries, through transactions under common control | ― | ― | (130185) |
| **Net cash provided by (used in) financing activities** | (714) | (1075) | 85806 |
| **Effect of exchange rate changes on cash and cash equivalents** |  |  | (12) |
| **Increase (decrease) in cash and cash equivalents** | (287887) | (178722) | 174868 |
| **Cash and cash equivalents at the beginning of the year** | 599959 | 312072 | 133350 |
| **Cash and cash equivalents at the end of the year** | 312072 | 133350 | 308218 |

---

**Note to Condensed Financial Statements - Basis of presentation**

The condensed financial statements have been prepared on a going concern basis in accordance with IFRS Accounting Standards issued by the IASB.

The Company's condensed financial information includes inter-company revenue or expenses, which is eliminated in the Group's Consolidated Statements of Profit or Loss. The Company's condensed financial information should be read in conjunction with the Group's consolidated financial statements.

------

## Exhibit 2.3

**Exhibit 2.3**

# Description of rights of each class of securities<br>registered under Section 12 of the Securities Exchange Act of 1934
American Depositary Shares, or ADSs, each representing one common share, no par value, of PayPay Corporation, are listed and traded on the Nasdaq Global Select Market. Our common shares are registered under Section 12(b) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, not for trading, but only in connection with the registration of the ADSs. This exhibit contains a description of the rights of (i) holders of our common shares and (ii) holders of ADSs. The Bank of New York Mellon acts as depositary for our ADS program. The common shares underlying the ADSs are held by the depositary, directly or through Mizuho Bank, Ltd., as its custodian in Japan, in accordance with the deposit agreement. Holders of ADSs will not be treated as holders of the underlying common shares unless they surrender their ADSs and withdraw the common shares represented by the ADSs.

I. Description of Common Shares

Set forth below is a summary of certain information concerning our common shares, including brief summaries of relevant provisions of our Articles of Incorporation, our Share Handling Regulations and the Companies Act of Japan, or the Companies Act, and certain related laws and regulations, each as currently in effect unless otherwise indicated. This summary does not purport to be complete and is qualified in its entirety by reference to our Articles of Incorporation, our Share Handling Regulations and applicable Japanese law.

**General**

Our Articles of Incorporation provide for a total number of authorized shares of 1,600,000,000 shares. Our common shares are registered shares, not bearer shares, and have no par value. The number of issued and outstanding common shares as of the end of the fiscal year is set forth on the cover page of this annual report. We have only one class of shares outstanding, and the rights of holders of our common shares are not materially limited or qualified by the rights of any other class of shares. All issued common shares are fully paid and non-assessable and generally transferable. Our common shares are not listed on any stock exchange in Japan.

Our common shares are not subject to redemption or sinking fund provisions, and holders of our common shares are not liable to further capital calls by us. Our Articles of Incorporation do not contain any provision that discriminates against any existing or prospective holder of our common shares as a result of such holder owning a substantial number of shares.

We do not issue share certificates for our common shares. Under the Companies Act, a transfer of shares of a company that does not issue share certificates generally becomes effective between the transferor and the transferee by agreement between them. However, a transferee may not assert shareholder rights against us or, in general, third parties unless and until the transfer is duly recorded in our register of shareholders.

Mizuho Trust & Banking Co., Ltd. is the shareholder registry administrator for our common shares and maintains our register of shareholders. In order to assert against us shareholder rights to which shareholders as of a given record date are entitled, such as the right to vote at a general meeting of shareholders or to receive dividends, a shareholder must have its name and address registered in our register of shareholders, except in limited circumstances.

**Distribution of Surplus**

Under the Companies Act, dividends and other distributions to shareholders by a joint stock corporation take the form of distributions of surplus. Under our Articles of Incorporation, our board of directors has the authority to decide to make distributions of surplus without requiring a resolution of the general meeting of shareholders, unless otherwise provided by law.

Holders of our common shares are entitled to receive distributions of surplus, if any, in proportion to the number of common shares held by them, subject to the limitations under the Companies Act and our Articles of Incorporation. The aggregate book value of distributions of surplus may not exceed the distributable amount calculated in accordance with the Companies Act.

Distributions of surplus may be made in cash or in kind. If a distribution of surplus is to be made in kind, we may grant shareholders the right to require us to make such distribution in cash instead of in kind. If no such right is granted to shareholders, the distribution of surplus in kind must be approved by a special resolution of a general meeting of shareholders.

The record dates for year-end and interim dividends are March 31 and September 30 of each year, respectively. We are relieved of our obligation to pay any monetary dividends that remain unclaimed for three years after the date of commencement of payment.

------

**Unit Share System**

Our Articles of Incorporation provide that 100 shares constitute one unit of shares. Holders of our common shares are entitled to one voting right for each unit of shares they hold, and shares constituting less than one full unit do not carry voting rights.

Under the Companies Act and our Articles of Incorporation, holders of shares constituting less than one unit may not exercise rights with respect to such shares, other than rights specified in the Companies Act and our Articles of Incorporation. These rights include, among others, rights listed in each item of Article 189, Paragraph 2 of the Companies Act (such as the right to receive dividends, and the right to receive cash or other assets in the case of a consolidation of shares, stock split, share exchange, share transfer, or merger) and the right to receive allotments of offered shares and offered stock acquisition rights in proportion to the number of shares they hold.

Holders of shares constituting less than one unit may require us to purchase such shares by submitting a request to the shareholder registry administrator in accordance with the Companies Act and our Share Handling Regulations. Neither our Articles of Incorporation nor our Share Handling Regulations provide holders of shares constituting less than one unit with the right to require us to sell additional shares to them in order to make their holdings constitute one full unit.

**General Meetings of Shareholders**

Our ordinary general meeting of shareholders is convened in June of each year by our President and Representative Director pursuant to a resolution of the board of directors, unless otherwise provided by law. Extraordinary general meetings of shareholders may be convened whenever necessary pursuant to a resolution of the board of directors, unless otherwise provided by law.

The record date for determining shareholders entitled to exercise their rights at the ordinary general meeting of shareholders is March 31 of each year. We may also set a temporary record date whenever necessary by a resolution of the board of directors and after giving at least two weeks' prior public notice.

Notice of a general meeting of shareholders must generally be given to shareholders entitled to exercise voting rights at least two weeks prior to the date of the meeting, unless otherwise permitted under applicable law.

**Voting Rights**

Shareholders have one voting right for each unit of common shares held. Unless otherwise provided by law or our Articles of Incorporation, a resolution of a general meeting of shareholders is adopted by a majority of the voting rights of the shareholders present who are entitled to exercise voting rights.

Certain important matters requiring a "special resolution" under the Companies Act, such as amendments to our Articles of Incorporation, require the attendance of shareholders holding one-third or more of the voting rights of shareholders entitled to exercise voting rights and approval by two-thirds or more of the voting rights of the shareholders present. Such matters include, among others, dismissal of directors who are Audit and Supervisory Committee members, dissolution, mergers and other corporate reorganizations requiring shareholder approval, transfers of all or a substantial part of our business, consolidation of shares, acquisition of our common shares from a specific shareholder and issuances of shares or stock acquisition rights on specially favorable terms.

The quorum for the election of directors is one-third or more of the voting rights of shareholders entitled to exercise voting rights. Our shareholders are not entitled to cumulative voting in the election of directors. Other than the different terms of office for Audit and Supervisory Committee members and other directors, our Articles of Incorporation do not establish a staggered board or a staggered reelection schedule. Specifically, the term of office expires at the close of the ordinary general meeting of shareholders for the last fiscal year ending within one year after election for directors who are not Audit and Supervisory Committee members, and within two years for directors who are Audit and Supervisory Committee members. A shareholder may exercise voting rights by proxy, provided that the proxy is also a shareholder having voting rights in our company. In such case, the shareholder or proxy must submit a document certifying the authority of representation at each general meeting of shareholders.

**Liquidation Rights**

In the event of our liquidation, any residual assets remaining after payment of all debts, liquidation expenses and taxes will be distributed among holders of our common shares in proportion to the number of common shares held by them.

**Issue of Additional Shares and Pre-emptive Rights**

Holders of our common shares have no pre-emptive rights under our Articles of Incorporation. Authorized but unissued common shares may be issued, and common shares held by us as treasury shares may be sold, at such times and upon such terms as our board of directors determines, subject to the limitations under the Companies Act, including shareholder approval requirements for

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issuances or sales on specially favorable terms.

Our board of directors may, however, determine that shareholders shall be given subscription rights regarding a particular issuance of common shares or sale of treasury shares. In such case, such rights must be granted on uniform terms to all shareholders as of a record date publicly announced in accordance with the Companies Act.

**Record Date**

The record date for year-end dividends and the determination of shareholders entitled to vote at the ordinary general meeting of shareholders is March 31 of each year. The record date for interim dividends is September 30 of each year. In addition, by a resolution of our board of directors and after giving at least two weeks' prior public notice, we may set a temporary record date in order to determine shareholders entitled to exercise certain rights.

**Acquisition of Our Common Shares**

Under our Articles of Incorporation and the Companies Act, we may acquire our own common shares by resolution of the board of directors through methods permitted under applicable law. We may also acquire our own common shares from a specific shareholder other than any of our subsidiaries pursuant to a special resolution of a general meeting of shareholders, subject to the requirements of the Companies Act. We may hold common shares acquired by us as treasury shares and may generally dispose of or cancel such treasury shares by resolution of the board of directors.

**Request by a Controlling Shareholder to Sell All Shares**

Under the Companies Act, a shareholder holding, directly or indirectly, 90% or more of the voting rights of all shareholders has the right to request, subject to approval by our board of directors, that all other shareholders and, if the controlling shareholder so determines, holders of stock acquisition rights sell to the controlling shareholder all shares and stock acquisition rights held by them, except for shares and stock acquisition rights held by us and, if the controlling shareholder so determines, the controlling shareholder's wholly owned subsidiaries. If approval is granted by a resolution of our board of directors, we are required to give a notice or public notice thereof to the relevant holders and registered pledgees not later than 20 days prior to the effective date of such sales.

**Changes in Shareholders' Rights**

Our Articles of Incorporation may be amended by a special resolution of a general meeting of shareholders. As we have only one class of shares outstanding, no separate class meeting is currently required to change the rights of holders of our common shares. If we were to issue different classes of shares in the future, changes that would prejudice the rights of shareholders of a class may require approval at a class meeting to the extent required by the Companies Act. Our Articles of Incorporation do not impose any conditions to change the rights of holders of our common shares that are more significant than those required under the Companies Act.

**Limitations on the Rights to Own Securities**

Our Articles of Incorporation do not impose any limitations on the rights of non-resident or foreign shareholders to hold our common shares or exercise voting rights attached thereto. Our Share Handling Regulations require shareholders residing outside Japan to notify us of a temporary address for service of notices in Japan or, if an agent is appointed in Japan, the name and address of such agent. Non-resident and foreign investors may, however, be subject to certain reporting or prior notification requirements under Japanese laws and regulations, including the Foreign Exchange and Foreign Trade Act of Japan.

**Provisions That Could Delay, Defer or Prevent a Change in Control**

Our Articles of Incorporation do not contain any provision that would have the effect of delaying, deferring or preventing a change in control of us and that would operate only with respect to a merger, acquisition or corporate restructuring involving us or any of our subsidiaries.

**Ownership Threshold Disclosure**

Our Articles of Incorporation and Share Handling Regulations do not contain any provision governing an ownership threshold above which shareholder ownership must be disclosed.

**Changes in Capital**

Changes in our capital are governed by the Companies Act and our Articles of Incorporation. Our Articles of Incorporation do not impose conditions governing changes in our capital that are more stringent than those required under the Companies Act.

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II. Description of American Depositary Shares

The Bank of New York Mellon, as depositary, will register and deliver American Depositary Shares, also referred to as ADSs. Each ADS will represent one common share (or a right to receive one common share) deposited with Mizuho Bank, Ltd., as custodian for the depositary in Japan. Each ADS will also represent any other securities, cash or other property that may be held by the depositary. The deposited shares together with any other securities, cash or other property held by the depositary are referred to as the deposited securities. The depositary's office at which the ADSs will be administered and its principal executive office are located at 240 Greenwich Street, New York, New York 10286.

You may hold ADSs either (A) directly (i) by having an American Depositary Receipt, also referred to as an ADR, which is a certificate evidencing a specific number of ADSs, registered in your name, or (ii) by having uncertificated ADSs registered in your name, or (B) indirectly by holding a security entitlement in ADSs through your broker or other financial institution that is a direct or indirect participant in The Depository Trust Company, also called DTC. If you hold ADSs directly, you are a registered ADS holder, also referred to as an ADS holder. This description assumes you are an ADS holder. If you hold the ADSs indirectly, you must rely on the procedures of your broker or other financial institution to assert the rights of ADS holders described in this section. You should consult with your broker or financial institution to find out what those procedures are.

Registered holders of uncertificated ADSs will receive statements from the depositary confirming their holdings.

As an ADS holder, we will not treat you as one of our shareholders and you will not have shareholder rights. Japanese law governs shareholder rights. The depositary will be the holder of the common shares underlying your ADSs. As a registered holder of ADSs, you will have ADS holder rights. A deposit agreement among us, the depositary, ADS holders and all other persons indirectly or beneficially holding ADSs sets out ADS holder rights as well as the rights and obligations of the depositary. New York law governs the deposit agreement and the ADSs.

The following is a summary of the material provisions of the deposit agreement. For more complete information, you should read the entire deposit agreement and the form of ADR.

**Dividends and Other Distributions**

***How will you receive dividends and other distributions on the shares?***

The depositary has agreed to pay or distribute to ADS holders the cash dividends or other distributions it or the custodian receives on common shares or other deposited securities, upon payment or deduction of its fees and expenses. You will receive these distributions in proportion to the number of common shares your ADSs represent.

***Cash***. The depositary will convert any cash dividend or other cash distribution we pay on the common shares into U.S. dollars, if it can do so on a reasonable basis and can transfer the U.S. dollars to the United States. If that is not possible or if any government approval is needed and cannot be obtained, the deposit agreement allows the depositary to distribute the foreign currency only to those ADS holders to whom it is possible to do so. It will hold the foreign currency it cannot convert for the account of the ADS holders who have not been paid. It will not invest the foreign currency and it will not be liable for any interest.

Before making a distribution, any withholding taxes or other governmental charges that must be paid will be deducted. The depositary will distribute only whole U.S. dollars and cents and will round fractional cents to the nearest whole cent. If the exchange rates fluctuate during a time when the depositary cannot convert the foreign currency, you may lose some of the value of the distribution.

***Shares***. Unless we agree otherwise with the depositary, the depositary will distribute additional ADSs representing any common shares we distribute as a dividend or free distribution. The depositary will only distribute whole ADSs. It will sell common shares which would require it to deliver a fraction of an ADS (or ADSs representing those common shares) and distribute the net proceeds in the same way as it does with cash. If the depositary does not distribute additional ADSs, the outstanding ADSs will also represent the new common shares. The depositary may sell a portion of the distributed common shares (or ADSs representing those common shares) sufficient to pay its fees and expenses in connection with that distribution.

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***Rights to purchase additional shares***. If we offer holders of our securities any rights to subscribe for additional shares or any other rights, the depositary will, to the extent it deems lawful and practical, (i) exercise those rights on behalf of ADS holders, (ii) distribute those rights to ADS holders or (iii) sell those rights and distribute the net proceeds to ADS holders, in each case after deduction or upon payment of its fees and expenses. To the extent the depositary does not do any of those things, it will allow the rights to lapse. In that case, you will receive no value for them. The depositary will exercise or distribute rights only if we ask it to and provide satisfactory assurances to the depositary that it is legal to do so. If the depositary will exercise rights, it will purchase the securities to which the rights relate and distribute those securities or, in the case of shares, new ADSs representing the new shares, to subscribing ADS holders, but only if ADS holders have paid the exercise price to the depositary. U.S. securities laws may restrict the ability of the depositary to distribute rights or ADSs or other securities issued on exercise of rights to all or certain ADS holders, and the securities distributed may be subject to restrictions on transfer.

***Other Distributions***. The depositary will send to ADS holders anything else we distribute on deposited securities by any means it thinks is legal, fair and practical. If it cannot make the distribution in that way, the depositary has a choice. It may decide to sell what we distributed and distribute the net proceeds, in the same way as it does with cash. Or, it may decide to hold what we distributed, in which case ADSs will also represent the newly distributed property. However, the depositary is not required to distribute any securities (other than ADSs) to ADS holders unless it receives satisfactory evidence from us that it is legal to make that distribution. The depositary may sell a portion of the distributed securities or property sufficient to pay its fees and expenses in connection with that distribution. U.S. securities laws may restrict the ability of the depositary to distribute securities to all or certain ADS holders, and the securities distributed may be subject to restrictions on transfer.

The depositary is not responsible if it decides that it is unlawful or impractical to make a distribution available to any ADS holders. We have no obligation to register ADSs, shares, rights or other securities under the Securities Act. We also have no obligation to take any other action to permit the distribution of ADSs, shares, rights or anything else to ADS holders. This means that you may not receive the distributions we make on our sha*res or any value for them if it is illegal or impractical for us to make them available to you*.

**Deposit, Withdrawal and Cancellation**

Your ability to deposit shares for delivery of ADSs or to surrender ADSs and receive delivery of the deposited shares may be subject to special pre-notification and preclearance requirements under Japanese law and regulations.

***How are ADSs issued?***

The depositary will deliver ADSs if you or your broker deposits common shares or evidence of rights to receive common shares with the custodian. Upon payment of its fees and expenses and of any taxes or charges, such as stamp taxes or stock transfer taxes or fees, the depositary will register the appropriate number of ADSs in the names you request and will deliver the ADSs to or upon the order of the person or persons that made the deposit.

***How can ADS holders withdraw the deposited securities?***

You may surrender your ADSs to the depositary for the purpose of withdrawal. Upon payment of its fees and expenses and of any taxes or charges, such as stamp taxes or stock transfer taxes or fees, the depositary will deliver the common shares and any other deposited securities underlying the ADSs to the ADS holder or a person the ADS holder designates at the office of the custodian. Or, at your request, risk and expense, the depositary will deliver the deposited securities at its office, if feasible. However, the depositary is not required to accept surrender of ADSs to the extent it would require delivery of a fraction of a deposited share or other security. The depositary may charge you a fee and its expenses for instructing the custodian regarding delivery of deposited securities.

However, your ability to deposit common shares for delivery of ADS will be, and your right to receive delivery of common shares upon surrender of ADSs may be, subject to obtaining required pre-clearance under the Japanese Foreign Exchange and Foreign Trade Act. Therefore, if you intend to deposit shares, you should notify the depositary at least 30 days in advance. If you intend to surrender ADSs for delivery of common shares, you should contact Japanese legal counsel to determine if you will need to obtain pre-clearance for that transaction.

***When can ADSs be cancelled by the depositary?***

The depositary may cancel ADSs if there are no underlying deposited securities, or those deposited securities have become apparently worthless or to the extent there are insufficient underlying deposited securities because of an increase in the number of shares represented by one ADS.

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***How do ADS holders interchange between certificated ADSs and uncertificated ADSs?***

You may surrender your ADR to the depositary for the purpose of exchanging your ADR for uncertificated ADSs. The depositary will cancel that ADR and will send to the ADS holder a statement confirming that the ADS holder is the registered holder of uncertificated ADSs. Upon receipt by the depositary of a proper instruction from a registered holder of uncertificated ADSs requesting the exchange of uncertificated ADSs for certificated ADSs, the depositary will execute and deliver to the ADS holder an ADR evidencing those ADSs.

**Voting Rights**

***How do you vote?***

ADS holders may instruct the depositary how to vote the number of deposited common shares their ADSs represent. If we request the depositary to solicit your voting instructions (and we are not required to do so), the depositary will notify you of a shareholders' meeting and send or make voting materials available to you. Those materials will describe the matters to be voted on and explain how ADS holders may instruct the depositary how to vote. For instructions to be valid, they must reach the depositary by a date set by the depositary. If we asked the depositary to solicit voting instructions, the depositary will try, as far as practical, subject to the laws of Japan and the provisions of our articles of incorporation or similar documents, to vote or to have its agents vote the deposited shares as instructed by ADS holders. If we do not request the depositary to solicit your voting instructions, you can still send voting instructions, and, in that case, the depositary may try to vote as you instruct, but it is not required to do so.

*Except by instructing the depositary as described above, you will not be able to exercise voting rights unless you surrender your ADSs and withdraw the common shares. However, you may not know about the meeting enough in advance to withdraw the common shares.* In any event, the depositary will not exercise any discretion in voting deposited securities and it will only vote or attempt to vote as instructed or as described in the following sentence. If we asked the depositary to solicit your instructions at least 30 days before the meeting date but the depositary does not receive voting instructions from you by the specified date as to a particular question to be voted on and we confirm to the depositary that

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•we wish to receive a discretionary proxy to vote uninstructed common shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•as of the instruction cutoff date we reasonably do not know of any substantial shareholder opposition to that question; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•that question is not materially adverse to the interests of our shareholders,

then the depositary will consider you to have authorized and directed it to give a discretionary proxy to a person designated by us to vote the number of deposited common shares represented by your ADSs as that question.

We cannot assure you that you will receive the voting materials in time to ensure that you can instruct the depositary to vote the common shares represented by your ADSs. In addition, the depositary and its agents are not responsible for failing to carry out voting instructions or for the manner of carrying out voting instructions. This means that you may not be able to exercise voting rights and there may be nothing you can do if the common shares represented by your ADSs are not voted as you requested.

In order to give you a reasonable opportunity to instruct the depositary as to the exercise of voting rights relating to Deposited Securities, if we request the depositary to act, we agree to give the depositary notice of any such meeting and details concerning the matters to be voted upon at least 30 days in advance of the meeting date.

Under the deposit agreement, we and the depositary may modify the voting procedures described above or adopt additional voting procedures not described above as we determine may be necessary or appropriate to comply with applicable law or regulation.

**Fees and Expenses**

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| | |
|:---|:---|
| ***Holders or persons depositing or withdrawing shares, surrendering ADSs, or to whom or from whom ADSs are delivered or cancelled, must pay:*** | ***For:*** |
| $10.00 (or less) per 100 ADSs (or portion of 100 ADSs) | Issuance of ADSs, including issuances resulting from a distribution of shares or rights or other property or in relation to a change in the number of shares represented by ADSs<br>Surrender of ADSs for the purpose of withdrawal or cancellation of ADSs, including if the deposit agreement terminates or in relation to a change in the number of shares represented by ADSs |

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| | |
|:---|:---|
| $.10 (or less) per ADS | Any cash distribution to ADS holders |
| A fee equivalent to the fee that would be payable if securities distributed to you had been common shares and the common shares had been deposited for issuance of ADSs | Distribution of securities distributed to holders of deposited securities (including rights) that are distributed by the depositary to ADS holders |
| Fees assessed from time to time, but not exceeding $.10 per ADS during any calendar year | Depositary services |
| Registration or transfer fees | Transfer and registration of common shares on our share register to or from the name of the depositary or its agent when you deposit or withdraw shares |
| Expenses of the depositary | Cable (including SWIFT) and facsimile transmissions (when expressly provided in the deposit agreement) |
|  | Converting foreign currency to U.S. dollars |
| Taxes and other governmental charges the depositary or the custodian has to pay on any ADSs or common shares underlying ADSs, such as stock transfer taxes, stamp duty or withholding taxes | As necessary |
| Any charges incurred by the depositary or its agents for servicing the deposited securities | As necessary |

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The depositary collects its fees for delivery and surrender of ADSs directly from investors depositing common shares or surrendering ADSs for the purpose of withdrawal or from intermediaries acting for them. The depositary collects its annual fee for making distributions to investors by deducting those fees from the amounts distributed or by selling a portion of distributable property to pay the fees. The depositary may collect its annual fee for depositary services by deduction from cash distributions or by directly billing investors or by charging the book-entry system accounts of participants acting for them. While aggregate fees for depositary services will not exceed $.10 per ADS in a calendar year, an investor may be charged more than one such fee in a consecutive twelve-month period. The depositary may collect any of its fees by deduction from any cash distribution payable (or by selling a portion of securities or other property distributable) to ADS holders that are obligated to pay those fees. The depositary may generally refuse to provide fee-attracting services until its fees for those services are paid.

From time to time, the depositary may make payments to us to reimburse us for costs and expenses generally arising out of establishment and maintenance of the ADS program, waive fees and expenses for services provided to us by the depositary or share revenue from the fees collected from ADS holders. In performing its duties under the deposit agreement, the depositary may use brokers, dealers, foreign currency dealers or other service providers that are owned by or affiliated with the depositary and that may earn or share fees, spreads or commissions.

The depositary may convert currency itself or through any of its affiliates, or the custodian or we may convert currency and pay U.S. dollars to the depositary. Where the depositary converts currency itself or through any of its affiliates, the depositary acts as principal for its own account and not as agent, advisor, broker or fiduciary on behalf of any other person and earns revenue, including, without limitation, transaction spreads, that it will retain for its own account. The revenue is based on, among other things, the difference between the exchange rate assigned to the currency conversion made under the deposit agreement and the rate that the depositary or its affiliate receives when buying or selling foreign currency for its own account. The depositary makes no representation that the exchange rate used or obtained by it or its affiliate in any currency conversion under the deposit agreement will be the most favorable rate that could be obtained at the time or that the method by which that rate will be determined will be the most favorable to ADS holders, subject to the depositary's obligation to act without negligence or bad faith. The methodology used to determine exchange rates used in currency conversions made by the depositary is available upon request. Where the custodian converts currency, the custodian has no obligation to obtain the most favorable rate that could be obtained at the time or to ensure that the method by which that rate will be determined will be the most favorable to ADS holders, and the depositary makes no representation that the rate is the most favorable rate and will not be liable for any direct or indirect losses associated with the rate. In certain instances, the depositary may receive dividends or other distributions from us in U.S. dollars that represent the proceeds of a conversion of foreign currency or translation from foreign currency at a rate that was obtained or determined by us and, in such cases, the depositary will not engage in, or be responsible for, any foreign currency transactions and neither it nor we make any representation that the rate obtained or determined by us is the most favorable rate and neither it nor we will be liable for any direct or indirect losses associated with the rate.

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**Payment of Taxes**

You will be responsible for any taxes or other governmental charges payable on your ADSs or on the deposited securities represented by any of your ADSs. The depositary may refuse to register any transfer of your ADSs or allow you to withdraw the deposited securities represented by your ADSs until those taxes or other charges are paid. It may apply payments owed to you or sell deposited securities represented by your ADSs to pay any taxes owed and you will remain liable for any deficiency. If the depositary sells deposited securities, it will, if appropriate, reduce the number of ADSs to reflect the sale and pay to ADS holders any proceeds, or send to ADS holders any property, remaining after it has paid the taxes.

**Tender and Exchange Offers; Redemption, Replacement or Cancellation of Deposited Securities**

The depositary will not tender deposited securities in any voluntary tender or exchange offer unless instructed to do so by an ADS holder surrendering ADSs and subject to any conditions or procedures the depositary may establish.

If deposited securities are redeemed for cash in a transaction that is mandatory for the depositary as a holder of deposited securities, unless we and the depositary agree otherwise, the depositary will call for surrender of a corresponding number of ADSs and distribute the net redemption money to the holders of called ADSs upon surrender of those ADSs.

If there is any change in the deposited securities such as a sub-division, combination or other reclassification, or any merger, consolidation, recapitalization or reorganization affecting the issuer of deposited securities in which the depositary receives new securities in exchange for or in lieu of the old deposited securities, the depositary will hold those replacement securities as deposited securities under the deposit agreement. However, if the depositary decides it would not be lawful and practical to hold the replacement securities because those securities could not be distributed to ADS holders or for any other reason, the depositary may instead sell the replacement securities and distribute the net proceeds upon surrender of the ADSs.

If there is a replacement of the deposited securities and the depositary will continue to hold the replacement securities, the depositary may distribute new ADSs representing the new deposited securities or ask you to surrender your outstanding ADSs in exchange for new ADSs identifying the new deposited securities.

If there are no deposited securities underlying ADSs, including if the deposited securities are cancelled, or if the deposited securities underlying ADSs have become apparently worthless, the depositary may call for surrender of those ADSs or cancel those ADSs upon notice to the ADS holders.

**Amendment and Termination**

***How may the deposit agreement be amended?***

We may agree with the depositary to amend the deposit agreement and the ADRs without your consent for any reason. If an amendment adds or increases fees or charges, except for taxes and other governmental charges or expenses of the depositary for registration fees, facsimile costs, delivery charges or similar items, or prejudices a substantial right of ADS holders, it will not become effective for outstanding ADSs until 30 days after the depositary notifies ADS holders of the amendment. *At the time an amendment becomes effective, you are considered, by continuing to hold your ADSs, to agree to the amendment and to be bound by the ADRs and the deposit agreement as amended*.

***How may the deposit agreement be terminated?***

The depositary will initiate termination of the deposit agreement if we instruct it to do so. The depositary may initiate termination of the deposit agreement if

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•60 days have passed since the depositary told us it wants to resign but a successor depositary has not been appointed and accepted its appointment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•we delist the ADSs from an exchange in the United States on which they were listed and do not list the ADSs on another exchange in the United States or make arrangements for trading of ADSs on the U.S. over-the-counter market;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the depositary has reason to believe the ADSs have become, or will become, ineligible for registration on Form F-6 under the Securities Act of 1933;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•we appear to be insolvent or enter insolvency proceedings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•all or substantially all the value of the deposited securities has been distributed either in cash or in the form of securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•there are no deposited securities underlying the ADSs or the underlying deposited securities have become apparently worthless; or

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•there has been a replacement of deposited securities.

If the deposit agreement will terminate, the depositary will notify ADS holders at least 90 days before the termination date. At any time after the termination date, the depositary may sell the deposited securities. After that, the depositary will hold the money it received on the sale, as well as any other cash it is holding under the deposit agreement, unsegregated and without liability for interest, for the pro rata benefit of the ADS holders that have not surrendered their ADSs. Normally, the depositary will sell as soon as practicable after the termination date.

After the termination date and before the depositary sells, ADS holders can still surrender their ADSs and receive delivery of deposited securities, except that the depositary may refuse to accept a surrender for the purpose of withdrawing deposited securities or reverse previously accepted surrenders of that kind that have not settled if it would interfere with the selling process. The depositary may refuse to accept a surrender for the purpose of withdrawing sale proceeds until all the deposited securities have been sold. The depositary will continue to collect distributions on deposited securities, but, after the termination date, the depositary is not required to register any transfer of ADSs or distribute any dividends or other distributions on deposited securities to ADS holders (until they surrender their ADSs) or give any notices or perform any other duties under the deposit agreement except as described in this paragraph.

**Limitations on Obligations and Liability**

***Limits on our Obligations and the Obligations of the Depositary; Limits on Liability to Holders of ADSs***

The deposit agreement expressly limits our obligations and the obligations of the depositary. It also limits our liability and the liability of the depositary. We and the depositary:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•are only obligated to take the actions specifically set forth in the deposit agreement without negligence or bad faith, and the depositary will not be a fiduciary or have any fiduciary duty to holders of ADSs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•are not liable if we are or it is prevented or delayed by law or by events or circumstances beyond our or its ability to prevent or counteract with reasonable care or effort from performing our or its obligations under the deposit agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•are not liable if we or it exercises discretion permitted under the deposit agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•are not liable for the inability of any holder of ADSs to benefit from any distribution on deposited securities that is not made available to holders of ADSs under the terms of the deposit agreement, or for any special, consequential or punitive damages for any breach of the terms of the deposit agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•have no obligation to become involved in a lawsuit or other proceeding related to the ADSs or the deposit agreement on your behalf or on behalf of any other person;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•may rely upon any documents we believe or it believes in good faith to be genuine and to have been signed or presented by the proper person;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•are not liable for the acts or omissions of any securities depository, clearing agency or settlement system; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the depositary has no duty to make any determination or provide any information as to our tax status. We and the depositary have no liability for any tax consequences that may be incurred by ADS holders as a result of owning or holding ADSs or be liable for the inability or failure of an ADS holder to obtain the benefit of a foreign tax credit, reduced rate of withholding or refund of amounts withheld in respect of tax or any other tax benefit.

In the deposit agreement, we and the depositary agree to indemnify each other under certain circumstances.

**Requirements for Depositary Actions**

Before the depositary will deliver or register a transfer of ADSs, make a distribution on ADSs, or permit withdrawal of common shares, the depositary may require:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•payment of stock transfer or other taxes or other governmental charges and transfer or registration fees charged by third parties for the transfer of any common shares or other deposited securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•satisfactory proof of the identity and genuineness of any signature or other information it deems necessary; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•compliance with regulations it may establish, from time to time, consistent with the deposit agreement, including presentation of transfer documents.

The depositary may refuse to deliver ADSs or register transfers of ADSs when the transfer books of the depositary or our transfer books are closed or at any time if the depositary or we think it advisable to do so.

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**Your Right to Receive the Shares Underlying your ADSs**

ADS holders have the right to cancel their ADSs and withdraw the underlying common shares at any time except:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•when temporary delays arise because: (i) the depositary has closed its transfer books or we have closed our transfer books; (ii) the transfer of common shares is blocked to permit voting at a shareholders' meeting; or (iii) we are paying a dividend on our common shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•when you owe money to pay fees, taxes and similar charges; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•when it is necessary to prohibit withdrawals in order to comply with any laws or governmental regulations that apply to ADSs or to the withdrawal of common shares or other deposited securities.

This right of withdrawal may not be limited by any other provision of the deposit agreement.

**Direct Registration System**

In the deposit agreement, all parties to the deposit agreement acknowledge that the Direct Registration System, also referred to as DRS, and Profile Modification System, also referred to as Profile, will apply to the ADSs. DRS is a system administered by DTC that facilitates interchange between registered holding of uncertificated ADSs and holding of security entitlements in ADSs through DTC and a DTC participant. Profile is a feature of DRS that allows a DTC participant, claiming to act on behalf of a registered holder of uncertificated ADSs, to direct the depositary to register a transfer of those ADSs to DTC or its nominee and to deliver those ADSs to the DTC account of that DTC participant without receipt by the depositary of prior authorization from the ADS holder to register that transfer.

In connection with and in accordance with the arrangements and procedures relating to DRS/Profile, the parties to the deposit agreement understand that the depositary will not determine whether the DTC participant that is claiming to be acting on behalf of an ADS holder in requesting registration of transfer and delivery as described in the paragraph above has the actual authority to act on behalf of the ADS holder (notwithstanding any requirements under the Uniform Commercial Code). In the deposit agreement, the parties agree that the depositary's reliance on and compliance with instructions received by the depositary through the DRS/Profile system and in accordance with the deposit agreement will not constitute negligence or bad faith on the part of the depositary.

**Shareholder Communications; Inspection of Register of Holders of ADSs**

The depositary will make available for your inspection at its office all communications that it receives from us as a holder of deposited securities that we make generally available to holders of deposited securities. The depositary will send you copies of those communications or otherwise make those communications available to you if we ask it to. You have a right to inspect the register of holders of ADSs, but not for the purpose of contacting those holders about a matter unrelated to our business or the ADSs.

**Jury Trial Waiver**

The deposit agreement provides that, to the extent permitted by law, ADS holders waive the right to a jury trial of any claim they may have against us or the depositary arising out of or relating to our shares, the ADSs or the deposit agreement, including any claim under the U.S. federal securities laws. The waiver continues to apply to claims that arise during the period when a holder holds the ADSs, even if the ADS holder subsequently withdraws the underlying common shares. Purchasers of ADSs in secondary transactions will be subject to the jury trial waiver provision to the same extent as purchasers of the ADSs offered in this offering. If we or the depositary opposed a jury trial demand based on the waiver, the court would determine whether the waiver was enforceable in the facts and circumstances of that case in accordance with applicable case law. You will not, by agreeing to the terms of the deposit agreement, be deemed to have waived our or the depositary's compliance with U.S. federal securities laws or the rules and regulations promulgated thereunder.

------

## Exhibit 4.80

***Certain confidential information contained in this document, marked by [\*\*\*], has been omitted pursuant to Regulation S-K, Item 601(b) because the registrant has determined that the omitted information (i) is not material and (ii) is the type that the registrant treats as private or confidential.***

**Exhibit 4.80**

**SHARE PURCHASE AGREEMENT**

**BY AND BETWEEN**

**T&D HOLDINGS, INC.**

**AND**

**PAYPAY CORPORATION**

**DATED AS OF JUNE 4, 2026**

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| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Article 1 DEFINITIONS | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Article 1 DEFINITIONS | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 1.1 | Definitions | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Article 2 CLOSING | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Article 2 CLOSING | 14 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 2.1 | Share Sale | 14 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 2.2 | Closing Transactions | 14 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 2.3 | Closing | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 2.4 | Purchase Price | 16 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 2.5 | Leakage | 16 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Article 3 REPRESENTATIONS AND WARRANTIES OF BUYER | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Article 3 REPRESENTATIONS AND WARRANTIES OF BUYER | 17 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 3.1 | Incorporation and Authority of Buyer | 17 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 3.2 | No Conflict | 17 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 3.3 | Consents and Approvals | 18 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 3.4 | Absence of Litigation | 18 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 3.5 | Anti-Corruption Laws; Anti-Money Laundering Laws; Anti-Social Forces | 18 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 3.6 | Sufficiency of Funds | 19 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 3.7 | Solvency | 19 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 3.8 | Brokers | 19 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 3.9 | Acknowledgement | 19 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Article 4 REPRESENTATIONS AND WARRANTIES RELATING TO THE COMPANY | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Article 4 REPRESENTATIONS AND WARRANTIES RELATING TO THE COMPANY | 20 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 4.1 | Incorporation and Authority | 20 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 4.2 | Capital Structure | 21 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 4.3 | No Conflict | 21 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 4.4 | Solvency | 21 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 4.5 | Consents and Approvals | 22 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 4.6 | Organizational Documents and Shareholder Register | 22 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 4.7 | Financial Statements; Absence of Undisclosed Liabilities | 22 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 4.8 | Absence of Certain Changes | 23 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 4.9 | Absence of Litigation | 23 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 4.10 | Anti-Social Forces | 23 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 4.11 | Anti-Corruption Laws; Anti-Money Laundering Laws | 23 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 4.12 | Compliance with Applicable Laws | 24 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 4.13 | Governmental Approvals | 24 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 4.14 | Intellectual Property | 24 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 4.15 | IT Systems | 24 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 4.16 | Material Contracts | 25 |

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| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 4.17 | Real Property | 25 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 4.18 | Tangible Assets | 26 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 4.19 | Investments | 26 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 4.20 | Sufficiency of Assets | 26 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 4.21 | Taxes | 26 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 4.22 | Insurance | 27 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 4.23 | Related Person Arrangements | 27 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 4.24 | Employees | 27 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 4.25 | Data Privacy and Protection | 28 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 4.26 | Insurance Products | 28 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 4.27 | Full Disclosure | 29 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Article 5 REPRESENTATIONS AND WARRANTIES OF SELLER | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Article 5 REPRESENTATIONS AND WARRANTIES OF SELLER | 29 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 5.1 | Incorporation and Authority of Seller | 29 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 5.2 | No Conflict | 29 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 5.3 | Consents and Approvals | 30 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 5.4 | Absence of Litigation | 30 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 5.5 | Anti-Corruption Laws; Anti-Money Laundering Laws; Anti-Social Forces | 30 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 5.6 | Solvency | 31 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 5.7 | Brokers | 31 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Article 6 COVENANTS | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Article 6 COVENANTS | 31 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 6.1 | Conduct of Business Prior to the Closing | 31 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 6.2 | Access to Information | 36 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 6.3 | Confidentiality | 37 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 6.4 | Consents, Approvals and Filings | 38 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 6.5 | Third Party Consents and Board Approvals. | 40 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 6.6 | Public Announcements | 41 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 6.7 | Other Transaction Documents | 41 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 6.8 | Employee Matters | 41 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 6.9 | Waiver of Claims | 43 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 6.10 | Non-Solicitation | 43 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 6.11 | Exclusivity | 44 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 6.12 | Discontinuance of Use of Brand | 44 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 6.13 | Directors and Officers Liability; Indemnification | 45 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 6.14 | Notification | 45 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 6.15 | Further Assurances | 46 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 6.16 | Termination of Related Person Arrangements | 46 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 6.17 | IFRS Conversion Plan. | 47 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 6.18 | Host Migration Development Plan | 48 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 6.19 | Data Processing Arrangements | 50 |

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| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Article 7 CONDITIONS PRECEDENT | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Article 7 CONDITIONS PRECEDENT | 50 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 7.1 | Conditions to Each Party's Obligations | 50 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 7.2 | Conditions to Obligations of Seller | 51 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 7.3 | Conditions to Obligations of Buyer | 52 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 7.4 | Frustration of Closing Conditions | 53 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Article 8 INDEMNIFICATION | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Article 8 INDEMNIFICATION | 53 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 8.1 | Survival | 53 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 8.2 | Indemnification by Seller | 53 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 8.3 | Indemnification by Buyer | 54 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 8.4 | Certain Limitations | 54 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 8.5 | Indemnification Procedures | 56 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 8.6 | Third Party Claim | 56 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 8.7 | Mitigation | 57 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 8.8 | Exclusive Remedies | 57 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 8.9 | Tax Treatment of Indemnification Payments | 57 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 8.10 | Special Indemnity by Seller Relating to Host Migration | 58 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Article 9 TAX MATTERS | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Article 9 TAX MATTERS | 59 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 9.1 | Cooperation and Exchange of Information | 59 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 9.2 | Matters Regarding Group Tax Consolidation | 59 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Article 10 TERMINATION PRIOR TO CLOSING | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Article 10 TERMINATION PRIOR TO CLOSING | 60 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 10.1 | Termination of Agreement | 60 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 10.2 | No Termination after Closing | 61 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 10.3 | Effect of Termination | 61 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Article 11 GENERAL PROVISIONS | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Article 11 GENERAL PROVISIONS | 62 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 11.1 | Fees and Expenses | 62 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 11.2 | Notice | 62 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 11.3 | Interpretation | 63 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 11.4 | Entire Agreement; Third Party Beneficiaries | 64 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 11.5 | Governing Law; Jurisdiction | 64 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 11.6 | Assignment | 64 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 11.7 | Severability; Amendment; Modification; Waiver | 64 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 11.8 | Specific Performance | 65 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 11.9 | Counterparts | 65 |

---

&nbsp;&nbsp;-iii-<br>

------

**Exhibits and Schedules**

Exhibit A IFRS Conversion Plan

Exhibit B TSA Term Sheet

Exhibit C-1 Form of Tripartite Shareholders Agreement

Exhibit C-2 Form of Bilateral Shareholders Agreement

Schedule 6.5(a) Third Party Consents

Schedule 7.1(a) Required Governmental Approvals

&nbsp;&nbsp;-iv-<br>

------

**Exhibit 4.80**

**SHARE PURCHASE AGREEMENT**

This Share Purchase Agreement, dated as of June 4, 2026 (this "<u>Agreement</u>"), is made and entered into by and among T&D Holdings, Inc., a joint stock company (*kabushiki kaisha*) incorporated under the laws of Japan ("<u>Seller</u>") and PayPay Corporation, a joint stock company (*kabushiki kaisha*) incorporated under the laws of Japan ("<u>Buyer</u>"). Buyer and Seller are sometimes individually referred to in this Agreement as a "<u>Party</u>" and, collectively, as the "<u>Parties</u>."

WITNESSETH:

WHEREAS, Seller directly owns 1,600,000 common shares of T&D FINANCIAL LIFE INSURANCE COMPANY (the "<u>Company</u>"), representing one hundred percent (100%) of the total issued and outstanding common shares (for the avoidance of doubt, for the purposes of this Agreement, "outstanding" shares do not include treasury shares) of the Company as of the date hereof; and

WHEREAS, Buyer desires to purchase from Seller, and Seller desires to sell to Buyer, all of Seller's right, title and interest in and to the Target Shares (as defined below), upon the terms and subject to the conditions hereinafter set forth.

NOW, THEREFORE, the Parties, intending to be legally bound, agree as follows:

# Article 1 <br>DEFINITIONS

## Section 1.1 <u>Definitions</u> 
For purposes of this Agreement, the following terms have the respective meanings set forth below:

"<u>Action</u>" means (a) any civil, criminal, judicial, investigative, regulatory or administrative action, suit, claim, complaint, inquiry, litigation, arbitration or other proceeding, in each case before, or brought by, a Governmental Entity or (b) any examination, audit, investigation or inquiry by a Governmental Entity, including a Tax audit.

"<u>Affiliate</u>" of any Person means another Person that directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such first Person.

"<u>Agreement</u>" has the meaning set forth in the Preamble.

"<u>Anticipated Closing Date</u>" means a date reasonably anticipated by the Parties to be the Closing Date based on facts known to the Parties with respect to satisfaction or waiver of the conditions set forth in <u>Article 7</u>, including communications with applicable Governmental Entities with respect to the timing of receipt of the Required Governmental Approvals.

"<u>Anti-Corruption Laws</u>" means all Applicable Laws relating to bribery or corruption (governmental or commercial), including (a) Japan's Unfair Competition Prevention Act 1993, (b) the US Foreign Corrupt Practices Act 1977, (c) the UK Bribery Act 2010 and (d) any other Applicable Laws that prohibit the corrupt payment, offer, promise, or authorisation of the

------

**Exhibit 4.80**

payment or transfer of anything of value (including gifts or entertainment), directly or indirectly, to any government official to: (i) obtain a (business) advantage; or (ii) improperly influence them or reward them for improper performance of a duty.

"<u>Anti-Social Force</u>" means any of the following: (a) an organized crime group (*bouryokudan*), (b) a member of an organized crime group (*bouryokudan-in*), (c) a Person for whom five years have not passed since the day on which such Person ceased to be a member of an organized crime group, (d) a quasi-member of an organized crime group (*bouryokudan-jun-kouseiin*), (e) a Person associated with an organized crime group (*bouryokudan-kankei-kigyou*), including any Person that is directly or indirectly controlled or substantially influenced by, acts for the benefit of, provides funds or other benefits to, or makes use of for its own benefit, any organized crime group or any member or quasi-member thereof, (f) a corporate extortionist (*soukai-ya*), (g) a social/political movement racketeer (*shakaiundou-tou-hyoubou-goro*), (h) a highly-sophisticated crime syndicate (*tokushu-chinou-bouryoku-shuudan*), or (i) any other Person similar to any of the foregoing.

"<u>Anti-Money Laundering Laws</u>" means (a) Japan's Prevention of Transfer of Criminal Proceeds Act 2007, (b) the US Bank Secrecy Act 1970, as amended, among others, by the Money Laundering Control Act 1986, the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act 2001 (also known as the USA PATRIOT Act) and the Anti-Money Laundering Act 2020, (c) the UK Proceeds of Crimes Act 2002 and (d) any other Applicable Laws relating to money laundering, the proceeds of criminal activity or similar matters.

"<u>Applicable Law</u>" with respect to any Person means any domestic, foreign, national, federal, state or local law, statute, ordinance, administrative ruling, rule or regulation, order, injunction, judgment, decree, code, constitution or treaty or other requirement or rule of law enacted, promulgated, issued, enforced or entered by any Governmental Entity applicable to such Person or such Person's businesses, properties, assets or rights, as may be amended from time to time, including any rules or regulations of any stock exchange.

"<u>Base Purchase Price</u>" means one hundred fifteen billion eight hundred thirty million Japanese yen (¥115,830,000,000); <u>provided</u>, <u>however</u>, that upon the occurrence of the OneIM Non-Closing Event, this definition shall be automatically amended in its entirety to read as follows: "<u>Base Purchase Price</u>" means one hundred forty billion four hundred fifteen million Japanese yen (¥140,415,000,000).

"<u>Basket</u>" has the meaning set forth in <u>Section 8.4(a)(ii)</u>.

"<u>Brand Transition Plan</u>" has the meaning set forth in <u>Section 6.12(b)</u>.

"<u>Burdensome Condition</u>" means any condition, action, limitation, restriction, requirement or qualification imposed by a Governmental Entity in connection with its grant of any Governmental Approval that would: (a) require Buyer or any of its Affiliates to take any action that would violate any Applicable Law or Governmental Order; (b) require Buyer to divest, dispose or sell any assets or business of the Company if the compliance with such requirement would result in a Company Material Adverse Effect following the Closing; (c) require Buyer to limit, restrict or modify, or discontinue, any business or operations of the Company if the compliance with such requirement would result in a Company Material Adverse Effect following the Closing; or (d) require Buyer to terminate, assign, or substantially amend any existing contractual relationships or contractual rights or obligations of the

------

**Exhibit 4.80**

Company if the compliance with such requirement would result in a Company Material Adverse Effect following the Closing; <u>provided</u>, that nothing herein shall restrict the Company from taking any actions that are not expressly prohibited under this Agreement to eliminate a Burdensome Condition; <u>provided</u>, <u>further</u>, that, solely to the extent that Buyer is in compliance with its obligations under <u>Section 6.4(e)</u>, a Burdensome Condition shall also include any condition, action, limitation, restriction, requirement or qualification imposed by a Governmental Entity in connection with its grant of any Governmental Approval that would: (A) require Buyer or any of its Affiliates (limited to those that are Affiliates of Buyer as of the date hereof; the same applies to the reference to Buyer's Affiliates in this proviso) to divest, dispose or sell any material assets or business (excluding any investments or interests in any Person that is not an Affiliate of Buyer) of Buyer or any of its Affiliates if the compliance with such requirement would result in a material adverse effect on the business, assets, liabilities, condition (financial or otherwise) or results of operation of (i) Buyer and its Subsidiaries, taken as a whole, or (ii) those Affiliates of Buyer that are within any single business segment (as objectively determined in accordance with generally accepted commercial standards), taken as a whole, in each case of clauses (i) and (ii), which is equivalent in scope to a Company Material Adverse Effect (a "<u>Buyer Group Material Adverse Effect</u>"); (B) require Buyer or any of its Affiliates to limit, restrict or modify in any material respect, or discontinue, any material business or operations of Buyer or any of its Affiliates (which, for the avoidance of doubt, shall not include any business or operations of any Person that is not an Affiliate of Buyer) if the compliance with such requirement would result in a Buyer Group Material Adverse Effect; (C) require Buyer or any of its Affiliates to terminate, assign, or substantially amend any material existing contractual relationships or contractual rights or obligations of Buyer or any of its Affiliates with any third party (excluding any contractual relationships or contractual rights or obligations solely among Buyer, any of its Affiliates and any of their respective Affiliates) if the compliance with such requirement would result in a Buyer Group Material Adverse Effect.

"<u>Business Day</u>" means any day other than a Saturday, a Sunday or any other day on which banking institutions in (a) Tokyo, Japan, and solely for the purposes of <u>Section 2.2(a)</u> or <u>Section 2.3</u>, (b) London, United Kingdom, (c) New York City, New York or (d) Abu Dhabi, United Arab Emirates, are required or authorized by Applicable Law to be closed.

"<u>Buyer</u>" has the meaning set forth in the Preamble.

"<u>Buyer Benefit Plans</u>" has the meaning set forth in <u>Section 6.8(c)</u>.

"<u>Buyer Disclosure Schedule</u>" means the disclosure schedule (including any attachments thereto) delivered by Buyer to Seller on the date hereof in connection with, and constituting part of, this Agreement.

"<u>Buyer Fundamental Representations</u>" means the representations and warranties contained in <u>Section 3.1</u>, <u>Section 3.2</u>, <u>Section 3.3</u>, <u>Section 3.4</u>, <u>Section 3.5</u>, and <u>Section 3.7</u>.

"<u>Buyer Group Material Adverse Effect</u>" has the meaning set forth in the definition of Burdensome Condition.

"<u>Buyer Material Adverse Effect</u>" means any material adverse effect on the ability of Buyer to consummate the transactions contemplated by this Agreement or the other Transaction Documents and to perform its obligations under this Agreement or the other Transaction Documents in accordance with this Agreement or the other Transaction Documents.

------

**Exhibit 4.80**

<u>"Buyer Required Governmental Approvals"</u> has the meaning set forth in <u>Section 10.3(b)</u>.

"<u>Cap</u>" has the meaning set forth in <u>Section 8.4(a)</u>.

"<u>Capital Stock</u>" means capital stock, shares, membership interests, partnership interests or other type of equity interest, as applicable, in a Person.

"<u>Claim Notice</u>" has the meaning set forth in <u>Section 8.5(a)</u>.

"<u>Clean Team Agreement</u>" means the clean team agreement dated February 20, 2026, delivered from Buyer to Seller.

"<u>Closing</u>" has the meaning set forth in <u>Section 2.3</u>.

"<u>Closing Date</u>" has the meaning set forth in <u>Section 2.3</u>.

"<u>Company</u>" has the meaning set forth in the Recitals.

"<u>Company Distribution Contract</u>" means any Contract to which the Company is a party with any bank, financial institution or other distributor or intermediary pursuant to which such Person markets, offers, sells, distributes or services any Product, including any bancassurance agreement, distribution or marketing agreement, or referral agreement.

"<u>Company Financial Statements</u>" has the meaning set forth in <u>Section 4.7(a)</u>.

"<u>Company Information</u>" has the meaning set forth in <u>Section 6.3(b)</u>.

"<u>Company Material Adverse Effect</u>" means any Effect that, individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect on the business, assets, liabilities, condition (financial or otherwise) or results of operation of the Company, but excluding any Effect to the extent resulting from or arising out of: (A) changes in general political, regulatory, economic or securities, currency, capital, credit or financial market conditions (including changes in interest rates and changes in equity prices), including hostilities, acts of war or terrorism, or any escalation or worsening thereof; (B) any occurrence or condition generally affecting participants in the industry in which the Company operates, whether international, national, regional, state, provincial or local; (C) any change or proposed change in Japanese GAAP, IFRS or Applicable Law or regulatory policy, or the interpretation or enforcement thereof; (D) weather, meteorological events or other natural disasters or natural occurrences; (E) any Contagion Event; (F) any actions taken (or omitted to be taken) by or at the written request of Buyer; (G) the execution and delivery of, or compliance with the terms of, or the taking of any action required by, this Agreement, the other Transaction Documents and, unless the OneIM Non-Closing Event has occurred, the OneIM SPA, the failure to take any action prohibited by this Agreement or the other Transaction Documents or, unless the OneIM Non-Closing Event has occurred, the OneIM SPA, or the public announcement of, or consummation of, any of the transactions contemplated hereby or thereby; or (H) any failure of the business of the Company to meet any financial projections or targets (provided that the underlying causes of such failures (subject to the other provisions of this definition) shall not be excluded); provided further, however, that any Effect to the extent resulting from or arising out of clauses (A) through (E) immediately above shall be taken into account in determining whether a Company Material Adverse Effect has occurred or could reasonably be expected to

------

**Exhibit 4.80**

occur to the extent that such Effect has a disproportionate effect on the Company compared to other participants in the industries in which the Company conducts its businesses.

"<u>Company Material Contracts</u>" means the following Contracts in effect to which the Company is a party (other than Contracts (a) with respect to which the Company will not be bound or have any liability after the Closing or (b) which are terminable on notice of ninety (90) or fewer days without material penalty):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Contracts containing any provision limiting the ability of the Company to compete with any Person, solicit customers or suppliers, or engage in any line of business in any geographic area in which the Company operates its business, other than limitations not material to the business of the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Contracts containing any exclusive distribution, marketing, license, or other exclusivity arrangements binding the Company in any geographic area in which the Company operates its business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Contracts for the acquisition, transfer, lease, license or disposition by the Company of (A) any company or business or (B) any asset (including any Intellectual Property) involving consideration in excess of three hundred million Japanese yen (¥300,000,000), in each case other than any Company Distribution Contracts, Insurance Contracts or Company Reinsurance Contracts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) Contracts involving obligations or liabilities of the Company or any counterparty in excess of three hundred million Japanese yen (¥300,000,000) annually, except for (A) Company Distribution Contracts, (B) Insurance Contracts or (C) Company Reinsurance Contracts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) Company Material Distributor Contracts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) Company Material Reinsurance Contracts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) Contracts relating to the Company's indebtedness for borrowed money or guarantees of the obligations of any other Person involving the Company's liability in excess of one billion Japanese yen (¥1,000,000,000);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) Contracts with any Governmental Entity;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) Contracts that provide for any joint venture, capital or business alliance or partnership that are material to the business of the Company (excluding, for the avoidance of doubt, any Company Reinsurance Contracts and Company Distribution Contracts);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) collective bargaining agreements or Contracts with any labor union, other than labor-management agreements (*roshi kyotei*);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) Contracts between the Company, on the one hand, and Seller or any of its Affiliates, on the other hand (each, a "<u>Related Person Arrangement</u>");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii) Contracts for the lease of any real property that are material to the business of the Company.

------

**Exhibit 4.80**

"<u>Company Material Distributor Contracts</u>" means the Contracts listed in <u>Section 1.1(a)</u> of the Seller Disclosure Schedule.

"<u>Company Material Governmental Approvals</u>" has the meaning set forth in <u>Section 4.13</u>.

"<u>Company Material IT Systems</u>" has the meaning set forth in <u>Section 4.15(a)</u>.

"<u>Company Material Reinsurance Contracts</u>" means the Contracts listed in <u>Section 1.1(b)</u> of the Seller Disclosure Schedule.

"<u>Company Reinsurance Contract</u>" means any Contract to which the Company is a party that provides for the assumption, cession, indemnification, or sharing of insurance or annuity liabilities or risks by or with any reinsurer or other risk-taking counterparty, including any treaty, facultative, coinsurance, or modified coinsurance arrangement, and any side letters, trust agreements, funds withheld agreements, letters of credit, collateral agreements, experience accounts, or other Contracts entered into in connection therewith.

"<u>Condition Satisfaction</u>" has the meaning set forth in <u>Section 2.3</u>.

"<u>Connected Person</u>" means, in relation to any Person:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) any Affiliate of such Person;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) any director, officer or employee of such Person or any Affiliate of such Person;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) any trust or other arrangement under which such Person or any Person described in clause (a) or (b) is a beneficiary; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) any company, partnership or other entity which is controlled by such Person or any Person described in clauses (a) to (c).

"<u>Contagion Event</u>" means the outbreak and ongoing effects of contagious disease, epidemic or pandemic (including COVID-19) or any worsening of such matters, any declaration of martial law, quarantine or similar directive or policy or guidance by any Governmental Entity in response thereto and any changes in Applicable Law in response to any of the foregoing.

"<u>Continuing Employees</u>" means the employees who are employed by the Company as of immediately prior to the Closing.

"<u>Contract</u>" means, with respect to any Person, any legally binding contract, lease, license, sublicense, commitment, loan or credit agreement, indenture, note, bond, instrument, agreement or other legally binding commitment or obligation to which such Person is a party or is otherwise subject or bound, whether written or oral.

"<u>control</u>" means, when used with respect to any Person, the power to direct the management and policies of such Person, directly or indirectly through the ownership of voting securities, by contract, or otherwise, and the terms "<u>controlling</u>" and "<u>controlled</u>" have the meanings correlative to the foregoing.

"<u>Corporation Tax Act</u>" means the Corporation Tax Act of Japan (Act No. 34 of 1965).

------

**Exhibit 4.80**

"<u>Counterparty Information</u>" has the meaning set forth in <u>Section 6.3(b)</u>.

"<u>D&O Indemnified Parties</u>" has the meaning set forth in <u>Section 6.13(a)</u>.

"<u>Data Privacy Law</u>" means all Applicable Law relating to the collection, use, storage, processing, disclosure, transfer (including cross-border transfer), or protection of personal data, including Japan's Act on the Protection of Personal Information (Act No. 57 of 2003), any data breach notification laws, and any other Applicable Law governing privacy, data protection, or information security.

"<u>De minimis Amount</u>" has the meaning set forth in <u>Section 8.4(a)(i)</u>.

"<u>Disclosed Information</u>" means the facts, matters or other information disclosed in any written information made available to Buyer by Seller or on behalf of Seller in the Electronic Data Room or in the Seller Disclosure Schedule, in each case, in such detail as would enable a reasonable buyer, with the advice of professional advisors in the relevant field, to identify the nature, scope and significance of the matter disclosed.

"<u>Effect</u>" means any event, development, occurrence, fact, circumstance, condition, change or effect.

"<u>Electronic Data Room</u>" means the electronic data rooms established by Seller at www.dfsvenue.com entitled "Pj Flower" as of June 2, 2026.

"<u>Excluded Disclosure</u>" means the facts, matters or other information disclosed in <u>Section 1.1(e)</u> of the Seller Disclosure Schedule.

"<u>Existing Seconded Employees</u>" has the meaning set forth in <u>Section 6.8(b)</u>.

"<u>Fraud</u>" means a knowing or intentional misrepresentation by a Person in respect of its representations and warranties in this Agreement or any certificate delivered pursuant hereto; <u>provided</u>, <u>however</u>, that "Fraud" shall not include any claim based on constructive knowledge, recklessness or negligence. For the avoidance of doubt, no fact, matter or circumstance disclosed in the Disclosed Information shall constitute Fraud to the extent Seller has not made a knowing or intentional misrepresentation in the Disclosed Information.

"<u>Fundamental Representations</u>" means the representations and warranties contained in <u>Section 4.1</u>, <u>Section 4.2</u>, <u>Section 4.3</u> (except for clause (c) of <u>Section 4.3</u>), <u>Section 4.4</u>, <u>Section 4.5</u>, <u>Section 4.10</u>, <u>Section 4.11</u>, <u>Section 5.1</u>, <u>Section 5.2</u>, <u>Section 5.3</u>, <u>Section 5.4</u>, <u>Section 5.5</u>, and <u>Section 5.6</u>.

"<u>Governmental Approval</u>" means any permit, filing, license, certificate, concession, order, consent, approval, permission, clearance, confirmation, exemption, waiver, registration, qualification, accreditation or authorization issued, granted, given or otherwise made available or required by any Governmental Entity or any Applicable Law.

"<u>Governmental Entity</u>" means any supranational, national, state, provincial, city, municipal, county, local or other governmental, legislative, judicial, administrative or regulatory authority, agency, commission, board, body, court or entity or any instrumentality thereof, stock exchange, or any self-regulatory organization or body or any arbitral body or arbitrator.

------

**Exhibit 4.80**

"<u>Governmental Order</u>" means any order, writ, judgment, injunction, declaration, decree, stipulation, direction, requirement, determination or award issued or entered by any Governmental Entity.

"<u>Group Management Agreement</u>" means, collectively, (i) "経営管理に関する契約書" dated April 1, 2024 between Seller, the Company and certain members of the Seller Group, and (ii) "経営管理料の算定および支払に関する覚書" dated April 1, 2026 between Seller, the Company and certain members of the Seller Group.

"<u>Host Migration</u>" has the meaning set forth in <u>Section 4.15(b)</u>.

"<u>Host Migration Adjustment Amount</u>" has the meaning set forth in <u>Section 8.10(a)</u>.

"<u>Host Migration Completion Date</u>" has the meaning set forth in <u>Section 8.10(a)</u>.

"<u>Host Migration Completion Notice</u>" has the meaning set forth in <u>Section 8.10(c)</u>.

"<u>Host Migration Development Plan</u>" has the meaning set forth in <u>Section 4.15(b)</u>.

"<u>Host Migration Long Stop Date</u>" has the meaning set forth in <u>Section 6.18(a)</u>.

"<u>IFRS</u>" means International Financial Reporting Standards as issued by the International Accounting Standards Board.

"<u>IFRS Conversion Plan</u>" means the framework for the actions, including the contemplated approach, milestones and implementation timeline, required for Buyer to consolidate the Company as a subsidiary in Buyer's consolidated financial statements to be prepared in accordance with IFRS after the Closing, as set forth in <u>Exhibit A</u>.

"<u>Indemnified Party</u>" has the meaning set forth in <u>Section 8.5</u>.

"<u>Indemnifying Party</u>" has the meaning set forth in <u>Section 8.5</u>.

"<u>Insurance Business Act</u>" means the Insurance Business Act of Japan (Act No. 105 of 1995).

"<u>Insurance Contracts</u>" means any Contracts for insurance policies or other Products issued by the Company; <u>provided</u>, that "Insurance Contracts" shall not include any reinsurance contract.

"<u>Intellectual Property</u>" means all intellectual property and intellectual property rights, however arising, pursuant to the Applicable Laws of any jurisdiction throughout the world, including patents, utility model rights, copyrights, trademarks, trade names, logos, service marks, Internet domain names, trade secrets and all other intellectual property rights of any type or nature, whether registered or unregistered, and any application for the foregoing.

"<u>Investments</u>" means all investments and investment assets of the Company held in connection with its business relating to Products, including cash and cash equivalents, deposits, securities and other financial instruments (including loans, notes and bonds), interests in investment funds or similar vehicles, derivatives and hedging instruments, and real estate and interests therein, in each case whether held directly or indirectly and together with all related rights and proceeds.

------

**Exhibit 4.80**

"<u>IT Systems</u>" means any communications systems and computer systems used by or on behalf of the Company, including all software, firmware, middleware, websites, hardware, servers, computers, notebooks, workstations, printers, routers, hubs, switches, data communication lines, ports, telephone-systems and other information technology and/or telecommunication equipment and systems and all associated documentation, but excluding networks generally available to the public.

"<u>Japanese GAAP</u>" means generally accepted accounting principles in Japan as in effect from time to time.

"<u>JFSA</u>" means the Japanese Financial Services Agency.

"<u>Knowledge</u>" means (a) with respect to Buyer, the actual knowledge of those Persons listed in <u>Section 1.1(a)</u> of the Buyer Disclosure Schedule and the knowledge obtainable by such Persons after reasonable inquiry to their respective direct reports in charge of the matter in question, and (b) with respect to the Seller, the actual knowledge of those Persons listed in <u>Section 1.1(c)</u> of the Seller Disclosure Schedule and the knowledge obtainable by such Persons after reasonable inquiry to their respective direct reports in charge of the matter in question.

"<u>Leakage</u>" means, without duplication, any of the following payments, liabilities, obligations, or actions by the Company to or for the benefit of any member of the Seller Group or any of their respective Connected Persons that occur after the Locked Box Date and at or prior to the Closing, other than any amounts that constitute Permitted Leakage:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) any dividend or distribution, whether in cash or in kind, declared and payable, paid or made;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) any payment for the purchase, redemption or repayment of any shares, loan capital or other securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) any assumption or incurrence of liability for any out-of-pocket fees, costs or expenses in connection with the transactions contemplated by this Agreement and the other Transaction Documents (including professional advisers' fees, consultancy fees, transaction bonuses, finders' fees, brokerage or other commission);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) any payment of any other nature (including any payment or repayment to terminate any Related Person Arrangements, royalty payments, license fees, management fees, monitoring fees, consulting fees, interest payments, loan payments, service or directors' fees, bonuses or other compensation of any kind);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) any waiver, discount, forgiveness, discharge or release of any amount, obligation or liability owed to the Company or any claim;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) the assumption of, incurrence of or agreement to assume or incur any liability or obligation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) the transfer of any value, assets, rights or benefits of any other nature; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) any agreement or arrangement to give effect to any of the matters referred to in the foregoing subclauses (a) to (g),

together with any Taxes that may be due, payable or owing by the Company as a result of any

------

**Exhibit 4.80**

of the matters referred to in the foregoing subclauses (a) to (h), <u>provided</u> that amounts included in Leakage shall be reduced by any cash Tax benefits actually realized by the Company to the extent Seller reasonably demonstrates such Tax benefit has resulted from any of the matters referred to in the foregoing subclauses (a) to (h), provided, further, that such reduction shall not include any deferred tax assets, uncertain tax positions, or other Tax benefits that have not been actually realized by the Company on or prior to the Closing Date.

"<u>Liens</u>" means pledges, mortgages, liens, charges, security interests or encumbrances, imperfections of title, rights of first refusal, or restrictions of any kind, including any restriction on use, voting, transfer, receipt of income or exercise of any other attribute of ownership.

"<u>Locked Box Date</u>" means March 31, 2025.

"<u>Losses</u>" means losses, damages, liabilities, deficiencies, Actions, judgments, interest, awards, penalties, fines, costs or expenses of whatever kind, including reasonable attorneys' fees and the cost of enforcing any right to indemnification hereunder; <u>provided</u>, <u>however</u>, that "Losses" shall not include punitive damages, except to the extent actually awarded to a Governmental Entity or other third party.

"<u>Material Host Migration Change</u>" has the meaning set forth in <u>Section 6.18(a)</u>.

"<u>Non-Disclosure Agreement</u>" means the non-disclosure agreement, dated February 2, 2026, by and between Seller and Buyer, as amended or modified from time to time.

"<u>Notified Leakage</u>" has the meaning set forth in <u>Section 2.5(c)</u>.

"<u>Notified Party</u>" has the meaning set forth in <u>Section 8.6(a)</u>.

"<u>Notifying Party</u>" has the meaning set forth in <u>Section 8.6(a)</u>.

"<u>OneIM</u>" means OneIM Indigo Holdings Ltd.

"<u>OneIM Non-Closing Event</u>" means the termination of the OneIM SPA, except where the right to terminate the OneIM SPA is not available to Seller under the OneIM SPA at the time of the termination of the OneIM SPA.

"<u>OneIM SPA</u>" means that certain share purchase agreement entered into between Seller and OneIM as of the date hereof with respect to the sale of the shares of the Company.

"<u>Ordinary Course of Business</u>" with respect to a Person means the ordinary course of business of such Person, consistent with past practice.

"<u>Organizational Documents</u>" means, with respect to any Person, the articles or certificate of incorporation or organization and by-laws, the equity holders' agreement, the limited partnership agreement, the partnership agreement or the limited liability company agreement, operating agreement, or such other organizational documents of such Person.

"<u>Outside Time</u>" has the meaning set forth in <u>Section 10.1(c)</u>.

"<u>Outsourcing Agreement</u>" has the meaning set forth in <u>Section 6.18(b)</u>.

"<u>Outsourcing Agreement Termination Date</u>" has the meaning set forth in <u>Section</u> 

------

**Exhibit 4.80**

<u>8.10(a)(i)</u>.

"<u>Parties</u>" has the meaning set forth in the Preamble.

"<u>Permitted Leakage</u>" means, without duplication, any of the following payments, liabilities or obligations:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) any Leakage payable, paid, made, assumed or incurred in accordance with the terms of any Contracts between the Company, on the one hand, and any Connected Person of any member of the Seller Group, on the other hand, to the extent such Contracts are entered into on arm's length or better terms for the Company, except in respect of the Group Management Fees;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) any Leakage payable, paid, made, assumed or incurred in accordance with the terms of any Contracts between the Company on the one hand, and any member of the Seller Group, on the other hand, to the extent such Contracts are entered into on arm's length or better terms for the Company, except in respect of the Group Management Fees;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) any Leakage payable, paid, made, assumed or incurred in accordance with the terms of the Group Management Agreement, and any other Contracts or documents relating to the implementation of the Group Management Agreement (the "<u>Group Management Fees</u>"), except to the extent that the aggregate amount of the Group Management Fees payable, paid, made, assumed or incurred during any consecutive twelve (12) month period exceeds eight hundred million Japanese yen (¥800,000,000); provided, that notwithstanding anything to the contrary in this Agreement, Buyer agrees that its sole and exclusive remedy in respect of any Group Management Fees payable, paid, made, assumed or incurred during the period after the Locked Box Date and at or prior to the Closing (including in respect of any claim in respect of a breach of any representation or warranty) shall be the adjustment to the Purchase Price pursuant to this clause (c), and Buyer shall not be entitled to seek any other remedy or make any other claim (whether in contract, tort or otherwise) in respect thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) any Leakage set forth in <u>Section 1.1(d)</u> of the Seller Disclosure Schedule;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) any Leakage actually refunded or paid in cash to the Company prior to Closing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) any amounts in respect of which a provision, reserve or accrual has been expressly included in the Company Financial Statements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) any Leakage consented to in writing by Buyer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) any payment of the Secondment Costs in an amount substantially consistent with the level of payments made in the Ordinary Course of Business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) any payment, liability or obligation expressly required to be made by the Company before the Closing pursuant to the terms of this Agreement or any other Transaction Documents; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) any assumption or incurrence by the Company of liability for any out-of-pocket fees, costs or expenses in connection with the implementation of the IFRS Conversion Plan, and any payment of such liability,

------

**Exhibit 4.80**

together with any Taxes that may be due, payable or owing by the Company as a result of any of the matters referred to in the foregoing subclauses (a) to (j).

"<u>Person</u>" means an individual, corporation, partnership, joint venture, limited liability company, association, trust, unincorporated organization, Governmental Entity or other entity.

"<u>Products</u>" means insurance policies, annuities and other insurance, investment or financial products directly or indirectly marketed, issued, sold or underwritten by the Company.

"<u>Purchase Price</u>" has the meaning set forth in <u>Section 2.4(a)</u>.

"<u>Related Person Arrangement</u>" has the meaning set forth in clause (xi) of the definition of Company Material Contract.

"<u>Representative</u>" means, with respect to any Person, (i) such Person's Affiliates or (ii) directors, officers, employees, agents, advisors, attorneys, accountants, consultants and representatives of such Person or such Person's Affiliates.

"<u>Required Governmental Approvals</u>" has the meaning set forth in <u>Section 7.1(a)</u>.

"<u>Resigning Directors</u>" has the meaning set forth in <u>Section 2.2(a)(iii)(C)</u>.

"<u>Reverse Termination Fee</u>" has the meaning set forth in <u>Section 10.3(b)</u>.

"<u>Sanctioned Country</u>" means a country or region that is the subject or target of any Sanctions, including, as of the date of this Agreement, Cuba, Iran, North Korea, Syria and the Crimea, Donetsk, and Luhansk regions of Ukraine.

"<u>Sanctioned Person</u>" means at any time any Person: (i) listed on any applicable Sanctions-related list of specially designated or blocked persons, (ii) resident in or organized under the laws of a Sanctioned Country, or (iii) majority-owned (in the aggregate) or controlled by any of the foregoing.

"<u>Sanctions</u>" means any sanctions laws, trade embargoes and export controls administered or enforced from time to time by the Office of Foreign Assets Control of the United States Department of the Treasury, the U.S. Department of State, the U.S. Department

------

**Exhibit 4.80**

of Commerce, the United Kingdom (including His Majesty's Treasury), the European Union and its member states, the United Nations Security Council, Japan, or any other similar applicable foreign Governmental Entity.

"<u>Secondment Costs</u>" has the meaning set forth in <u>Section 6.8(b)</u>.

"<u>Seller</u>" has the meaning set forth in the Preamble.

"<u>Seller Disclosure Schedule</u>" means the disclosure schedule (including any attachments thereto) delivered by Seller to Buyer on the date hereof in connection with, and constituting part of, this Agreement.

"<u>Seller Group</u>" means Seller and each of its Affiliates, but excluding the Company.

"<u>Seller Material Adverse Effect</u>" means any material adverse effect on the ability of Seller to consummate the transactions contemplated by this Agreement or the other Transaction Documents and to perform its obligations under this Agreement or the other Transaction Documents in accordance with this Agreement or the other Transaction Documents.

"<u>Sensitive Information</u>" has the meaning set forth in <u>Section 6.4(b)</u>.

"<u>Share Sale</u>" has the meaning set forth in <u>Section 2.1</u>.

"<u>Shareholders Agreement</u>" has the meaning set forth in <u>Section 6.7(b)</u>.

"<u>Strategic Partnership Agreement</u>" means "包括業務提携に関する基本合意書" entered into between Seller, Buyer and SoftBank Corp. as of the date hereof.

"<u>Subsidiary</u>" of any Person at the time in question means another Person who is controlled by such first Person.

"<u>Target Shares</u>" means 1,123,200 common shares of the Company, representing 70.2% of the total issued and outstanding common shares of the Company; <u>provided</u>, <u>however</u>, that upon the occurrence of the OneIM Non-Closing Event, this definition shall be automatically amended in its entirety to read as follows: "<u>Target Shares</u>" means 1,361,600 common shares of the Company, representing 85.1% of the total issued and outstanding common shares of the Company.

"<u>Tax</u>" means any and all Japanese national or local, or foreign income, sales and use, employment, unemployment, disability, payroll, withholding, goods and services, stamp, customs, profits, registration or other similar tax (or charge or assessment in the nature of a tax), as well as such taxes based on secondary tax liability or joint and several liability, including any interest, penalty, or addition thereto and Transfer Taxes.

"<u>Tax Authority</u>" means any Governmental Entity having jurisdiction over the assessment, determination, collection or other imposition of any Taxes.

"<u>Tax Contest</u>" has the meaning set forth in <u>Section 9.1</u>.

"<u>Tax Refund</u>" means any Tax refund, whether received in cash or as a credit against Tax liability (including any interest paid or credited with respect thereto).

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**Exhibit 4.80**

"<u>Tax Return</u>" means any return, report, claim for refund or other similar statement required to be filed with a Tax Authority in connection with any Tax, including any schedule or attachment thereto, and any amendment thereof.

"<u>TDS</u>" has the meaning set forth in <u>Section 6.18(b)</u>.

"<u>Third Party Claim Notice</u>" has the meaning set forth in <u>Section 8.6(a)</u>.

"<u>Ticking Fee Amount</u>" means an amount calculated as interest on an amount equal to (a) the Base Purchase Price minus (b) any Leakage other than Permitted Leakage. For the avoidance of doubt, the Ticking Fee Amount shall be included in the value of the Company for Tax purposes and shall accrue from (and including) April 1, 2025, to (and including) the Closing Date at an interest rate per annum of 5.57%.

"<u>Transaction Documents</u>" means this Agreement, the Shareholders Agreement and the Strategic Partnership Agreement and the Transitional Services Agreement.

"<u>Transfer Taxes</u>" means any sales, use, goods and services, stock transfer, real property transfer, transfer, stamp, registration, documentary, recording or similar duties or taxes together with any interest thereon, penalties, fines, fees, additions to tax or additional amounts with respect thereto incurred in connection with the transactions contemplated hereby; <u>provided</u>, for the avoidance of doubt, that Taxes incurred on capital gains or income generated as a result of the Share Sale shall not be included in the Transfer Taxes.

"<u>Transitional Services Agreement</u>" means that certain transitional services agreement to be entered into between Seller and the Company on or prior to the Closing Date with terms consistent with those set forth in the TSA Term Sheet.

"<u>TSA Term Sheet</u>" means that term sheet attached hereto as <u>Exhibit B</u>.

# Article 2 <br>CLOSING

## Section 2.1 <u>Share Sale</u> 
On the terms and subject to the conditions set forth in this Agreement, at the Closing, Seller shall transfer and deliver to Buyer, free and clear of all Liens (other than any restrictions on subsequent transfer generally imposed on equity securities under Applicable Law), and Buyer shall purchase from Seller, all of Seller's right, title and interest in and to the Target Shares, in exchange for the payment of the Purchase Price (the "<u>Share Sale</u>").

## Section 2.2 <u>Closing Transactions</u> 
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) On the terms and subject to the conditions set forth in this Agreement, at the Closing:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Seller shall transfer to Buyer the Target Shares and Buyer shall purchase from Seller the Target Shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Buyer shall, in exchange for the receipt of the documents pursuant to <u>Section 2.2(a)(iii)</u>:

------

**Exhibit 4.80**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) pay, or cause to be paid, to Seller the Purchase Price in cash, in lump sum, by wire transfer of immediately available funds to the account designated by written notice from Seller to Buyer at least five (5) Business Days prior to the Closing Date (for which Buyer shall bear the fees and expenses incurred for the wire transfer); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) deliver to Seller reasonable evidence demonstrating receipt of the Buyer Required Governmental Approvals.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Seller shall, in exchange for the receipt of the Purchase Price pursuant to <u>Section 2.2(a)(ii)</u>, deliver to Buyer:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) a signed instruction letter instructing the Company to register Buyer as the holder of the Target Shares in the shareholder registry (*kabunushi meibo*) of the Company (*kabunushi meibo meigi kakikae seikyu sho*) duly signed by Seller;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) deliver to Buyer reasonable evidence demonstrating receipt of the Required Governmental Approvals (other than the Buyer Required Governmental Approvals) (to the extent required); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) written resignations, in form and substance reasonably acceptable to Buyer and effective as of the Closing, of the directors of the Company as may be agreed in writing between the Parties (the "<u>Resigning Directors</u>").

All documents and items delivered and payments made in connection with the Closing shall be held by the recipient to the order of the Person delivering them until such time as the Closing takes place.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Parties shall (i) on the Closing Date, cause a shareholders' meeting of the Company to be held or a written resolution in lieu of such meeting to be passed, with effect from the Closing, to appoint directors of the Company as is necessary to ensure that the number and composition of the directors of the Company comply with the requirements under the Shareholders Agreement, and (ii) as promptly as reasonably practicable following the Closing Date (but in any event within two (2) weeks of the Closing Date), cause the Company to make an application for commercial registration reflecting the resignation of the Resigning Directors and appointment of such newly appointed directors.

## Section 2.3 <u>Closing</u> 
The closing of the Share Sale in accordance with the terms of this Agreement shall take place at a closing (the "<u>Closing</u>") that shall be held at 10:00 am, Tokyo time, at the office of Nishimura & Asahi (Gaikokuho Kyodo Jigyo) at Otemon Tower, 1-1-2 Otemachi, Chiyoda-ku, Tokyo, Japan, or through delivery and exchange by email among the Parties of all documents required to consummate the Closing, (a) on the first Business Day of the calendar quarter (i.e., the calendar quarter commencing on April 1, July 1, October 1 and January 1) immediately following the day on which all of the conditions set forth in <u>Article 7</u> have been satisfied or waived (other than those conditions that by their nature are to be satisfied at the Closing) in accordance with this Agreement (the "<u>Condition Satisfaction</u>"), (b) if the Condition Satisfaction occurs less than fifteen (15) Business Days before the last Business Day of a

------

**Exhibit 4.80**

calendar quarter, on the first Business Day of the calendar quarter that is two (2) calendar quarters after the calendar quarter in which the Condition Satisfaction occurs, or (c) at such other date, time or place as the Parties may agree in writing (the date on which the Closing takes place being the "<u>Closing Date</u>"), <u>provided</u> that, on any such date, all of the conditions set forth in <u>Article 7</u> continue to be satisfied or waived.

## Section 2.4 <u>Purchase Price</u> 
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The purchase price (the "<u>Purchase Price</u>") for the Target Shares shall be an amount equal to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the Base Purchase Price; *plus*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the Ticking Fee Amount; *minus*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the amount of Notified Leakage (if any).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Purchase Price shall be paid in full by Buyer to Seller in accordance with the provisions of this Agreement free and clear of any deductions or withholding incurred in connection with the transactions contemplated under this Agreement.

## Section 2.5 <u>Leakage</u> 
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Seller warrants to Buyer that, from (and excluding) the Locked Box Date up to (and including) the date of this Agreement, there has been no Leakage other than Permitted Leakage. Seller further undertakes to Buyer that it shall procure that from (and excluding) the date of this Agreement up to the Closing, there will be no Leakage other than Permitted Leakage. Notwithstanding the foregoing, Seller shall have no liability to Buyer under this <u>Section 2.5</u> if the Closing does not occur.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Subject to Closing occurring, in the event of any breach of <u>Section 2.5(a)</u>, Seller shall pay to Buyer on demand on a yen-for-yen basis an amount equal to (i) the aggregate amount of Leakage multiplied by 70.2% (if the OneIM Non-Closing Event occurs, 85.1%), to the extent that the relevant Leakage has not already been deducted from the amount paid by Buyer on the Closing Date, *plus* (ii) any reasonable and documented out-of-pocket costs and expenses (including reasonable attorneys' fees) actually incurred by Buyer solely in recovering such Leakage, to the extent that such Leakage is finally determined or agreed between the Parties to have occurred; <u>provided</u>, that any claim to be made by Buyer pursuant to this <u>Section 2.5(b)</u> must be made in writing and delivered to Seller within twelve (12) months following the Closing Date setting out Buyer's calculation of the amount and all reasonably available details and Seller shall cease to be under any liability to Buyer or any other Person in respect of all and any such claims not so notified to Seller within such period. For the avoidance of doubt, Buyer acknowledges that the only remedy available to it for breach of the provisions of <u>Section 2.5(a)</u> is contained in this <u>Section 2.5(b)</u>. All payments made pursuant to this <u>Section 2.5(b)</u> shall be treated by the Parties as an adjustment to the Purchase Price for Tax purposes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) If, prior to the Closing, Seller becomes aware of any Leakage, Seller shall promptly notify Buyer in writing, the amount of such Leakage and all reasonably available details. The amount of Leakage notified hereunder (the "<u>Notified Leakage</u>") shall be deducted for the purposes of calculating the Purchase Price pursuant to <u>Section 2.4</u> and, accordingly, shall not be recoverable after the Closing as Leakage pursuant to <u>Section 2.5(b)</u>. For the

------

**Exhibit 4.80**

avoidance of doubt, any Leakage notified by Seller pursuant to this <u>Section 2.5(c)</u> shall be treated as Notified Leakage and shall not constitute a breach of <u>Section 2.5(a)</u> by Seller, except where such Leakage causes or is reasonably expected to cause material disruption to the business of the Company.

# Article 3 <br>REPRESENTATIONS AND WARRANTIES OF BUYER
Subject to and as qualified by the matters set forth in the corresponding sections or subsections of the Buyer Disclosure Schedule (it being understood and agreed by the Parties that disclosure of any item in any section or subsection of the Buyer Disclosure Schedule shall be deemed disclosure with respect to any other section or subsection of the Buyer Disclosure Schedule to which the relevance of such item is reasonably apparent on the face of such disclosure, notwithstanding the omission of a reference or cross-reference thereto), Buyer represents and warrants to Seller as of the date hereof and as of the Closing Date as follows; <u>provided</u>, <u>however</u>, that any representations and warranties that are made as of a specific date or as of the date hereof are made only as of such date:

## Section 3.1 <u>Incorporation and Authority of Buyer</u> 
Buyer is an entity duly organized, validly existing and in good standing to the extent applicable under the laws of its jurisdiction of organization. Buyer has all necessary power and authority to enter into, consummate the transactions contemplated by and carry out its obligations under, each of the Transaction Documents to which it is a party. The execution and delivery by Buyer of each of the Transaction Documents to which it is a party, the consummation by Buyer of the transactions contemplated by each of the Transaction Documents to which it is a party and the performance by Buyer of its obligations under each of the Transaction Documents to which it is a party have been or will be prior to the Closing (as applicable) duly authorized by all requisite corporate action of Buyer. Each of the Transaction Documents to which Buyer is a party has been, or upon execution and delivery thereof will be, duly executed and delivered by Buyer. Assuming due authorization, execution and delivery by the other parties hereto or thereto, each of the Transaction Documents to which Buyer is a party constitutes, or upon execution and delivery thereof will constitute, the legal, valid and binding obligation of Buyer, enforceable against it in accordance with its terms, subject in each case to the effect of any applicable bankruptcy, corporate reorganization, civil rehabilitation, fraudulent conveyance, preferential transfer or similar Applicable Laws now or hereafter in effect relating to or affecting creditors' rights and remedies generally and subject, as to enforceability, to the effect of general equitable principles.

## Section 3.2 <u>No Conflict</u> 
Provided that all Required Governmental Approvals have been obtained or taken, the execution, delivery and performance by Buyer of and the consummation by Buyer of the transactions contemplated by this Agreement and the other Transaction Documents to which it is a party do not and will not (a) violate the Organizational Documents of Buyer, (b) violate any Applicable Law or other Governmental Order applicable to Buyer or by which any of its properties or assets is bound or subject to, or (c) result in any breach of any material Governmental Approvals or Contract to which Buyer is a party or by which it or any of its properties or assets is bound or subject to, in each case, as in effect or in force as of the date hereof or as of the Closing Date, other than, in each case, any such violations or breaches that,

------

**Exhibit 4.80**

individually or in the aggregate, would not, and would not reasonably be expected to, be material to the ability of Buyer to consummate the transactions contemplated by this Agreement or the other Transaction Documents and to perform its obligations under this Agreement or the other Transaction Documents in accordance with this Agreement or the other Transaction Documents.

## Section 3.3 <u>Consents and Approvals</u> 
The execution and delivery by Buyer of this Agreement and the other Transaction Documents do not, and the performance by Buyer of, and the consummation by Buyer of, the transactions contemplated by this Agreement and the other Transaction Documents do not, require any Governmental Approval to be obtained or made by Buyer prior to the Closing, except for Required Governmental Approvals and such other Governmental Approvals the failure of which to be obtained or made would not, and would not reasonably be expected to, be material to the ability of Buyer to consummate the transactions contemplated by this Agreement or the other Transaction Documents and to perform its obligations under this Agreement or the other Transaction Documents in accordance with this Agreement or the other Transaction Documents.

## Section 3.4 <u>Absence of Litigation</u> 
There are no Actions pending against Buyer that question the validity of, or seek injunctive relief with respect to, this Agreement or the other Transaction Documents to which it is a party or the right of Buyer to enter into this Agreement or the other Transaction Documents to which it is a party. There are no Actions involving Buyer that are pending or, to the Knowledge of Buyer, threatened that would reasonably be expected to materially prevent, impede or materially delay the ability of Buyer to perform Buyer's obligations under this Agreement or the other Transaction Documents to which it is a party, or timely consummate the transactions contemplated by this Agreement or the other Transaction Documents to which it is a party.

## Section 3.5 <u>Anti-Corruption Laws; Anti-Money Laundering Laws; Anti-Social Forces</u> 
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Neither Buyer nor, to the Knowledge of Buyer, any of its directors, officers or employees, is a Sanctioned Person or is owned or controlled, directly or indirectly, by one or more Sanctioned Persons.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Neither Buyer nor, to the Knowledge of Buyer, any of its directors, officers or employees, has taken any action, in connection with this Agreement or the other Transaction Documents, that is in violation of any Anti-Corruption Laws, Anti-Money Laundering Laws or Sanctions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) None of the funds used for the payment of the Purchase Price or otherwise to satisfy any payment obligation of Buyer hereunder have been derived or otherwise obtained from illegal sources or otherwise by illegal means, including (i) in violation of any Anti-Money Laundering Laws or Sanctions or (ii) from or with any Sanctioned Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) No Action involving Buyer or, to the Knowledge of Buyer, any of its directors, officers or employees, with respect to Anti-Corruption Laws, Anti-Money Laundering Laws or Sanctions is pending or, to the Knowledge of Buyer, threatened in writing.

------

**Exhibit 4.80**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Neither Buyer nor any of its directors, officers or employees is an Anti-Social Force. Neither Buyer, nor any of its directors, officers or employees maintains (i) any relationship whereby it is deemed to be controlled by an Anti-Social Force, (ii) any relationship whereby an Anti-Social Force is deemed to be involved in its management in a substantial way, (iii) any relationship whereby it is deemed to be using an Anti-Social Force in a wrongful way, including, for the purpose of gaining illegal profit for itself or any third party or causing damage to any third party, or (iv) any relationship whereby it is deemed to be providing funds or favors to an Anti-Social Force. Neither Buyer nor any of its directors, officers or employees has engaged in any activity that would benefit or assist the operation or preservation of an Anti-Social Force, including by providing funds or other benefits to, or receiving any improper benefit from, an Anti-Social Force.

## Section 3.6 <u>Sufficiency of Funds</u> 
As of the date of this Agreement, Buyer has sufficient financial resources, and, as of the Closing, Buyer will have sufficient funds on hand, in each case, to enable Buyer to satisfy all of Buyer's obligations under this Agreement, including to pay the Purchase Price.

## Section 3.7 <u>Solvency</u> 
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Buyer is not insolvent or bankrupt or unable to pay its debts as they fall due.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Buyer has not, by reason of actual financial distress of Buyer, stopped or suspended payment of its debts or indicated its intention to do so nor has Buyer taken any analogous procedure or step in any jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Buyer has not, by reason of actual financial distress of Buyer, commenced negotiations with one or more of its creditors with a view to rescheduling or restructuring any of its indebtedness.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) No Governmental Order has been made, petition or other Action presented, resolution passed or meeting convened for the winding up or dissolution of, or making of any administration order for, Buyer. No receiver or examiner or other analogous or similar officer has been appointed, by reason of actual financial distress of Buyer, over the whole or any part of the property, assets or undertaking of Buyer.

## Section 3.8 <u>Brokers</u> 
No broker, investment banker, financial adviser or other intermediary is entitled to any broker's, finder's, financial advisor's, investment banker's fee or commission for which Seller or its Affiliates or the Company would become liable or obligated to pay in connection with the transactions contemplated by this Agreement or any other Transaction Documents based upon arrangements made by or on behalf of Buyer.

## Section 3.9 <u>Acknowledgement</u> 
Notwithstanding anything contained in this Agreement to the contrary, Buyer acknowledges and agrees that Seller is not making any representations or warranties whatsoever, express or implied, beyond those expressly given by Seller in <u>Section 2.5(a)</u>, <u>Article 4</u> or <u>Article 5</u> (in each case of <u>Article 4</u> or <u>Article 5</u>, as modified by the Seller Disclosure

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**Exhibit 4.80**

Schedule) or any other Transaction Documents and subject to the limitations set forth herein, with respect to Seller, the Company or their respective businesses or the subject matter of this Agreement or any other Transaction Documents. In entering into this Agreement and the other Transaction Documents to which Buyer is a party, Buyer has conducted its own investigation and analysis, and Buyer acknowledges that, except as otherwise set forth in <u>Section 2.5(a)</u>, <u>Article 4</u> or <u>Article 5</u>, or any other Transaction Documents, none of Seller, nor any of its Affiliates or other Representatives, makes or has made any representation or warranty, either express or implied, with respect to Seller, the Company or their respective businesses, including with respect to any projections, forecasts, estimates, plans or budgets of future revenues, expenses or expenditures, future results of operations (or any component thereof), prospects, future cash flows (or any component thereof) or future financial condition (or any component thereof) of the Company (for the avoidance of doubt, the underlying causes of failure to meet the foregoing may constitute a breach of representations and warranties set forth in <u>Section 2.5(a)</u>, <u>Article 4</u> or <u>Article 5</u>, or any other Transaction Documents), in each case heretofore or hereafter delivered to or made available to Buyer or its Representatives. Nothing in this Section shall limit Buyer's rights or remedies with respect to the express representations, warranties, covenants, and agreements of Seller set forth in this Agreement or any other Transaction Documents.

# Article 4 <br>REPRESENTATIONS AND WARRANTIES RELATING TO THE COMPANY
Subject to and as qualified by the matters set forth in the corresponding sections or subsections of the Seller Disclosure Schedule (other than matters described in the Excluded Disclosure) (it being understood and agreed by the Parties that disclosure of any item in any section or subsection of the Seller Disclosure Schedule (excluding the Excluded Disclosure) shall be deemed disclosure with respect to any other section or subsection of the Seller Disclosure Schedule to which the relevance of such item is reasonably apparent on the face of such disclosure, notwithstanding the omission of a reference or cross-reference thereto) and the Disclosed Information (excluding the Excluded Disclosure), Seller represents and warrants to Buyer as of the date hereof and as of the Closing Date as follows; <u>provided</u>, <u>however</u>, that any such representations and warranties that are made as of a specific date or as of the date hereof are made only as of such date:

## Section 4.1 <u>Incorporation and Authority</u> 
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company is a stock corporation (*kabushiki kaisha*) duly organized and validly existing under the laws of Japan. The Company has all necessary power and authority to enter into, consummate the transactions contemplated by and carry out its obligations under, each of the Transaction Documents to which it is a party. The execution and delivery by the Company of each of the Transaction Documents to which it is a party, the consummation by the Company of the transactions contemplated by each of the Transaction Documents to which it is a party and the performance by the Company of its obligations under each of the Transaction Documents to which it is a party have been or will be prior to the Closing (as applicable) duly authorized by all requisite corporate action of the Company. Each of the Transaction Documents to which the Company is a party has been, or upon execution and delivery thereof will be, duly executed and delivered by the Company. Assuming due authorization, execution and delivery by the other parties hereto or thereto, each of the Transaction Documents to which the Company is a party constitutes, or upon execution and delivery thereof will constitute, the legal, valid and binding obligation of the Company,

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**Exhibit 4.80**

enforceable against it in accordance with its terms, subject in each case to the effect of any applicable bankruptcy, corporate reorganization, civil rehabilitation, fraudulent conveyance, preferential transfer or similar Applicable Laws now or hereafter in effect relating to or affecting creditors' rights and remedies generally and subject, as to enforceability, to the effect of general equitable principles.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Company has the requisite corporate power and authority to own, lease or otherwise hold and operate its assets and properties and to conduct its business as presently conducted.

## Section 4.2 <u>Capital Structure</u> 
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company does not have any Subsidiary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The authorized Capital Stock of the Company consists solely of 3,200,000 shares of common stock, of which 1,600,000 shares are issued and outstanding. All the outstanding shares of Capital Stock in the Company have been duly authorized and validly issued in compliance in all material respects with Applicable Law. There are no shares of Capital Stock or outstanding options, warrants or convertible securities, or other rights or Contracts, in any such case, obligating the Company to issue, sell, transfer, purchase or redeem any shares of its Capital Stock. Seller owns, beneficially and of record, all of the issued and outstanding shares of Capital Stock of the Company, free and clear of all Liens. Upon the consummation of the Closing, Seller will convey good and valid title to the Target Shares to Buyer, and Buyer will be the legal and beneficial owner of the Target Shares, free and clear of all Liens (except for any Liens created, directly or indirectly, by or on behalf of Buyer, if any).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Except for this Agreement, the Shareholders Agreement and, unless the OneIM Non-Closing Event has occurred, the OneIM SPA, neither the Company nor Seller is a party to any Contracts with respect to the voting, transfer or dividend rights of the shares of any Capital Stock in the Company.

## Section 4.3 <u>No Conflict</u> 
The execution, delivery and performance by the Company of, and the consummation by the Company of the transactions contemplated by, this Agreement and the other Transaction Documents to which it is a party do not and will not (a) violate the Organizational Documents of the Company, (b) violate any Applicable Law or other Governmental Order applicable to the Company or by which any of its properties or assets is bound or subject to, in any material respect, or (c) result in any material breach of any requirements or provisions of any Company Material Governmental Approval or Company Material Contract, in each case, as in effect or in force as of the date hereof or as of the Closing Date.

## Section 4.4 <u>Solvency</u> 
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company is not insolvent or bankrupt or unable to pay its debts as they fall due.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Company has not, by reason of actual financial distress of the Company, stopped or suspended payment of its debts or indicated its intention to do so nor has the Company taken any analogous procedure or step in any jurisdiction.

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**Exhibit 4.80**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Company has not, by reason of actual financial distress of the Company, commenced negotiations with one or more of its creditors with a view to rescheduling or restructuring any of its indebtedness.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) No Governmental Order has been made, petition or other Action presented, resolution passed or meeting convened for the winding up or dissolution of, or making of any administration order for, the Company. No receiver or examiner or other analogous or similar officer has been appointed, by reason of actual financial distress of the Company, over the whole or any part of the property, assets or undertaking of the Company.

## Section 4.5 <u>Consents and Approvals</u> 
The execution and delivery by the Company of this Agreement and the other Transaction Documents do not, and the performance by the Company of, and the consummation by the Company of, the transactions contemplated by this Agreement and the other Transaction Documents do not, require any Governmental Approval to be obtained or made by the Company prior to the Closing, except for such Governmental Approvals the failure of which to be obtained or made would not, and would not reasonably be expected to, individually or in the aggregate, be material to the Company.

## Section 4.6 <u>Organizational Documents and Shareholder Register</u> 
Seller has made available to Buyer true and complete copies of (a) the current articles of incorporation and (b) the current register of shareholders (*kabunushi meibo*), of the Company. The information contained in such register of shareholders (*kabunushi meibo*) is true and complete in all material respects.

## Section 4.7 <u>Financial Statements; Absence of Undisclosed Liabilities</u> 
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Seller has made available to Buyer copies of (i) the Company's annual audited non-consolidated balance sheet as of March 31, 2025 and (ii) the Company's annual audited non-consolidated income statement for the fiscal year ended March 31, 2025 (the "<u>Company Financial Statements</u>"). Each of the Company Financial Statements (i) has been prepared in accordance with Japanese GAAP in all material respects and (ii) fairly present, in all material respects, the financial position or results of operations of the Company as of the date or for the period indicated therein, in each case of (i) and (ii) above, except as otherwise expressly noted therein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Company has no liabilities, other than liabilities (i) reflected or reserved against in the Company Financial Statements, (ii) that were incurred since the date of the Company Financial Statements in the Ordinary Course of Business, (iii) that were incurred in connection with the transactions contemplated by this Agreement or the other Transaction Documents or (iv) that would not be required to be reflected in, reserved against or otherwise described on the face of its financial statements in accordance with Japanese GAAP, or (v) that would not, and would not reasonably be expected to, individually or in the aggregate, result in a Company Material Adverse Effect.

## Section 4.8 <u>Absence of Certain Changes</u> 
Except as required by Applicable Law, since the Locked Box Date until the date of this Agreement, (i) the Company has in all material respects conducted its business in the Ordinary

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**Exhibit 4.80**

Course of Business and (ii) no Effect has occurred that has had or would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.

## Section 4.9 <u>Absence of Litigation</u> 
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Other than with respect to any claims under Insurance Contracts arising in the Ordinary Course of Business or routine or periodic inspections or reviews, there are no Actions pending against the Company, and, to the Knowledge of Seller, no such Actions are threatened in writing against the Company, in each case that (i) are, individually or in the aggregate, material to the Company, or (ii) would reasonably be expected to have the effect of preventing any of the transactions contemplated by this Agreement or any other Transaction Document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Except for limitations imposed by Applicable Law that are applicable to the industries in which the Company operates generally and not specifically directed at the Company, there are no Governmental Orders against or involving the Company outstanding that (i) are, individually or in the aggregate, material to the Company, or (ii) enjoin or would reasonably be expected to have the effect of preventing any of the transactions contemplated by this Agreement or any other Transaction Document.

## Section 4.10 <u>Anti-Social Forces</u> 
Neither the Company nor any of its directors, officers or employees is an Anti-Social Force. Neither the Company nor any of its directors, officers or employees maintains (a) any relationship whereby it is deemed to be controlled by an Anti-Social Force, (b) any relationship whereby an Anti-Social Force is deemed to be involved in its management in a substantial way, (c) any relationship whereby it is deemed to be using an Anti-Social Force in a wrongful way, including, for the purpose of gaining illegal profit for itself or any third party or causing damage to any third party, or (d) any relationship whereby it is deemed to be providing funds or favors to an Anti-Social Force. Neither the Company nor any of its directors, officers or employees has engaged in any activity that would benefit or assist the operation or preservation of an Anti-Social Force, including by providing funds or other benefits to, or receiving any improper benefit from, an Anti-Social Force.

## Section 4.11 <u>Anti-Corruption Laws; Anti-Money Laundering Laws</u> 
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Neither the Company nor, to the Knowledge of Seller, any of its directors, officers or employees, is a Sanctioned Person or is owned or controlled, directly or indirectly, by one or more Sanctioned Persons.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Neither the Company nor, to the Knowledge of Seller, any of its directors, officers or employees has taken any action that is in violation of any Anti-Corruption Laws, Anti-Money Laundering Laws or Sanctions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) No Action involving the Company or, to the Knowledge of Seller, any of its directors, officers or employees, with respect to Anti-Corruption Laws, Anti-Money Laundering Laws or Sanctions is pending or, to the Knowledge of Seller, threatened in writing.

## Section 4.12 <u>Compliance with Applicable Laws</u> 
The Company is in compliance with all Applicable Laws in all material respects and

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**Exhibit 4.80**

the Company has not violated in any material respect any Governmental Order or Governmental Approval. Since the date three years before the date of this Agreement, the Company has not received any written notice alleging any material violation of Applicable Laws from any Governmental Entity having jurisdiction over the Company in respect of, and authority to enforce such Applicable Laws.

## Section 4.13 <u>Governmental Approvals</u> 
The Company has all material Governmental Approvals that are required for it to operate its business as conducted (collectively, "<u>Company Material Governmental Approvals</u>"), except for any approvals required in connection with insurance products prior to solicitation that have not yet been obtained. (i) Each such Company Material Governmental Approval is valid and in full force and effect in accordance with their terms and, to the Knowledge of Seller, there is no matter or fact that would reasonably be expected to result in any such Company Material Governmental Approval being suspended, cancelled, modified, revoked or non-renewed, and (ii) the Company is not in default or violation, in any material respect, of any of such Company Material Governmental Approvals. Since the date three years before the date of this Agreement, the Company has not received any written notice from any Governmental Entity having jurisdiction over the Company in respect of, and authority to enforce, Applicable Laws relating to any such Company Material Governmental Approval alleging any material default or violation thereof.

## Section 4.14 <u>Intellectual Property</u> 
Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, (i) the Company owns or has the right to use all Intellectual Property that is required for its business as presently conducted free from Liens other than Permitted Liens, (ii) such use does not infringe, misappropriate or otherwise conflict with any Intellectual Property of any Person, and (iii) there is no Action pending (A) challenging the ownership, validity or enforceability of any such Intellectual Property owned by the Company or the Company's right to use any such Intellectual Property or (B) claiming that the operation of the business of the Company infringes, misappropriates, or violates any Intellectual Property of any Person.

## Section 4.15 <u>IT Systems</u> 
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All IT Systems that are (A) material to the business of the Company, (B) not readily replaceable on commercially reasonable terms and (C) required for the business of the Company as presently conducted (the "<u>Company Material IT Systems</u>") are (i) in good working condition to perform the functions for which they are presently used in all material respects, (ii) sufficient for the conduct of the business of the Company as currently conducted in all material respects, and (iii) validly licensed to the extent applicable. In the three years before the date of this Agreement, there has been no material failure, breakdown, continued substandard performance, or other adverse event affecting the Company Material IT Systems that has caused a material disruption or interruption in or to the conduct of the business of the Company, and to the Knowledge of Seller, there is no matter or fact that would reasonably be expected to result in any such failure or adverse event. The Company has implemented commercially reasonable measures to safeguard the confidentiality, availability, integrity, and security of the Company Material IT Systems, including (i) protection against unauthorized access and the introduction of viruses, malware, or other malicious code, (ii) reasonable access controls, (iii) encryption of data, where commercially reasonable and practicable, (iv) backup

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**Exhibit 4.80**

and data restoration procedures, and (v) disaster recovery and business continuity plans.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) As of the Closing Date, the Company has adopted a documented plan that sets forth the material steps reasonably required to complete the migration of the Company's host computer system, developed by Hitachi, Ltd., to a new system by no later than December 31, 2030 (the "<u>Host Migration</u>," and such plan, the "<u>Host Migration Development Plan</u>"), and to the Knowledge of Seller, there is no fact or circumstance that would reasonably be expected to materially impair or delay the completion of such migration by such date.

## Section 4.16 <u>Material Contracts</u> 
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Seller has made available to Buyer true and complete copies of each Company Material Contract (including any material amendments or material supplements thereto).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) (i) Each Company Material Contract is a legal, valid and binding obligation of the Company and, to the Knowledge of Seller, each counterparty thereto, and in full force and effect, subject to the effect of any applicable bankruptcy, corporate reorganization, civil rehabilitation, fraudulent conveyance, preferential transfer or similar Applicable Laws now or hereafter in effect relating to or affecting creditors' rights and remedies generally and subject, as to enforceability, to the effect of general equitable principles, (ii) the Company is not in material default or material breach under any Company Material Contract, (iii) no event or circumstance has occurred that, with notice or lapse of time or both, would constitute a material default on the part of the Company under any Company Material Contract or result in a right of termination by the counterparty thereof or would cause or permit the acceleration of any material obligation or loss of any material benefit of the Company thereunder, (iv) to the Knowledge of Seller, no counterparty is in material default or material breach under, or has delivered in writing its intention to terminate or not renew, any Company Material Contract, and (v) since the date three years before the date of this Agreement, the Company has not received or given any written notice of any material default or material violation of any such Company Material Contract that remains outstanding as of such relevant date (being the date of this Agreement or the Closing Date, as applicable).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Section 1.1(b)</u> of the Seller Disclosure Schedule sets forth a correct and complete list of all Company Reinsurance Contracts that are material to the Company.

## Section 4.17 <u>Real Property</u> 
Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, (i) the Company has good title to all owned real property free from Liens other than Permitted Liens and (ii) the Company has valid leasehold interests in all material real property leased by the Company pursuant to leases that are valid and in full force and effect, in each case (i) and (ii) free from Liens other than Permitted Liens, subject to the effect of any applicable bankruptcy, corporate reorganization, civil rehabilitation, fraudulent conveyance, preferential transfer or similar Applicable Laws now or hereafter in effect relating to or affecting creditors' rights and remedies generally and subject, as to enforceability, to the effect of general equitable principles and the Company is not in default or breach under any such lease.

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**Exhibit 4.80**

## Section 4.18 <u>Tangible Assets</u> 
The Company has good title to, or a valid leasehold interest in or license to use, all of the tangible assets material to the business of the Company, free from Liens other than Permitted Liens. Such assets are in reasonable operating condition and repair for their current use, subject to ordinary wear and tear.

## Section 4.19 <u>Investments</u> 
The Company does not hold any Capital Stock in any other Person, other than (i) by way of investments in Capital Stock of publicly listed companies made in the Ordinary Course of Business in connection with the Company's ordinary asset management activities or (ii) the shares of Capital Stock listed in <u>Section 4.19</u> of the Seller's Disclosure Schedule.

## Section 4.20 <u>Sufficiency of Assets</u> 
The property, rights and assets owned, leased or otherwise for which there is a right of use by the Company immediately after the Closing, together with any assets, services and rights to be provided under the Related Person Arrangements that will be in effect immediately following the Closing in accordance with the terms thereof and the TSA (subject to any termination or expiry of such arrangements in accordance therewith), comprise all the property, rights and assets reasonably necessary to operate the business of the Company substantially in the same manner as conducted immediately before the Closing in all material respects.

## Section 4.21 <u>Taxes</u> 
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company has timely filed, in all material respects, all Tax Returns required to be filed by it (after giving effect to any valid extensions of time in which to make such filings), and such Tax Returns are true and correct in all material respects, and all Taxes required to be paid or withheld by it have been, in all material respects, paid or withheld in accordance with Applicable Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) (i) No material deficiencies for any Taxes have been proposed, asserted or assessed in writing against the Company by any Tax Authority that are still pending, (ii) there are no outstanding agreements, waivers or arrangements extending the statutory period of limitation applicable to any claim for, or the period for the collection or assessment of, any material amount of Taxes due from or with respect to the Company for any taxable period and (iii) there is no current examination or outstanding audit or assessment by any Tax Authority concerning any Tax liability of the Company, other than any examination or audit that has not resulted, and is not reasonably expected to result, in any material Tax liability.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Company has, in all material respects, made all deductions, withholdings and retentions required to be made under Applicable Law in respect of any actual or deemed payment made or benefit provided and has timely accounted for, in all material respects, all such deductions, withholdings and retentions to each relevant Tax Authority.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Company is not subject to Tax in any jurisdiction other than Japan, by virtue of having a permanent establishment or other place of business in such jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Nothing in this Agreement shall be construed as providing a representation or warranty with respect to (x) any taxable period (or portion thereof) ending

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**Exhibit 4.80**

after the Closing Date or (y) the existence, amount, expiration date or limitations on (or availability of) any Tax attributable to any taxable period ending after the Closing Date.

## Section 4.22 <u>Insurance</u> 
All material insurance policies (which, for the avoidance of doubt, shall not include any Insurance Contract or Company Reinsurance Contract; the same applies to the reference to the insurance policies in this <u>Section 4.22</u>) maintained by the Company are in full force and effect, all premiums due and payable thereon have been paid in all material respects and the Company is not in material breach or material default of any such policy. The Company has not received any written notice of cancellation or termination, denial of coverage or material change in premium with respect to the insurance policies described in the preceding sentence, except as would not be material to the Company. There are no outstanding claims that have been denied or disputed by the insurer other than denials and disputes in the Ordinary Course of Business.

## Section 4.23 <u>Related Person Arrangements</u> 
Each Related Person Arrangement has been entered into on arm's length terms in all material respects.

## Section 4.24 <u>Employees</u> 
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company is and, since the date three years before the date of this Agreement, has been in compliance in all material respects with all Applicable Laws relating to employment. (i) The Company has no material liability or obligation with respect to a violation of any such Applicable Law related to employment and (ii) there are no material labor disputes pending against the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) There is no material amount of unpaid compensation, including wages, bonuses, pension benefits and other compensation, due and payable to employees of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) There is no material pending strike, slowdown, work stoppage, lockout or other collective labor action by or with respect to its employees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Since the Locked Box Date, there has been no material change in terms of employment or engagement and benefits of each of the Company's directors, officers, employees and statutory auditors, other than any change (i) in the Ordinary Course of Business, (ii) for which a provision, reserve or accrual has been included in the Company Financial Statements or (iii) disclosed in <u>Section 4.24(d)</u> of the Seller Disclosure Schedule.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Except to the extent required by Applicable Law or provided in Contracts entered into in the Ordinary Course of Business (including any Insurance Contract), the Company is not a party to any agreement or arrangement for the provision of pensions, allowances, lump sums or other like benefits on retirement, death or long-term ill health for the benefit of any current or former director, officer, employee or statutory auditor of the Company or their dependents, and has not been a party to any such agreement or arrangement that would reasonably be expected to result in any material Liability to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The Company is and has been in compliance in all material respects, except where any failure to so comply would not reasonably be expected to result in any

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**Exhibit 4.80**

material Liability of the Company, with its own written policies, handbooks, work rules or similar documents relating to labor and employment matters, including fair employment practices, terms and conditions of employment, data privacy, contractual obligations, equal employment opportunity, nondiscrimination, disability rights, leaves of absence, immigration, wages, hours, benefits, classification of independent contractors or other contingent workers, classification of employees, workers' compensation, unemployment insurance, the payment of social security and similar Taxes, employee termination (actual or constructive), occupational safety and changes in operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) The Company has disclosed to Buyer the existence of its labor union and all collective bargaining agreements with such labor union to which it is a party. Except as disclosed in <u>Section 4.24(g)</u> of the Seller Disclosure Schedule, the Company is not engaged in any material labor dispute. The Company is not subject to any obligation under any collective bargaining agreement with any labor union to obtain consent, conduct consultation or otherwise follow any procedure in connection with the transactions contemplated by this Agreement or the other Transaction Documents.

## Section 4.25 <u>Data Privacy and Protection</u> 
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company has been in material compliance with (i) Data Privacy Law, (ii) all material contractual obligations relating to the collection, use, storage, processing, disclosure, transfer, or protection of personal data, and (iii) all material published privacy policies of the Company. (i) No written notice, written complaint, written claim or Action alleging non-compliance with Data Privacy Law or breach of any such contractual obligations or policies (including any enforcement notice or monetary penalty notice) has been received by the Company from any Governmental Entity or other Person, and (ii) to the Knowledge of Seller, no such notice, complaint, claim or Action is threatened.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) During the three (3) years before the date hereof, except as disclosed in <u>Section 4.25(b)</u> of the Seller Disclosure Schedule, (i) the Company has not experienced any Security Incident, (ii) no Person has made any written claim against the Company arising out of or in connection with any Security Incident, and (iii) no material circumstances exist that would require notification by the Company under any Data Privacy Law. For purposes of this Agreement, "Security Incident" means any (A) material unauthorized access to, acquisition of, use of, disclosure of, or loss of any personal data in the possession or control of the Company or any of its service providers, (B) material unauthorized access to, or disruption of, the IT Systems, or (C) any other data or information security incident that triggers notification obligations under Data Privacy Law.

## Section 4.26 <u>Insurance Products</u> 
All of the Products marketed, sold or underwritten by the Company are, and at all times have been, in compliance with Applicable Law in all material respects. Without limiting the generality of the foregoing, to the Knowledge of Seller, there are no errors, omissions or inconsistencies in the terms and conditions of the Products (including policy terms, riders and related documentation), including any typographical errors, clerical errors or incorrect cross-references, that would reasonably be expected to (i) directly result in any material financial loss to policyholders or the Company in a manner inconsistent with the Company's intended design of such Products, or (ii) require any material remediation, or result in any formal investigation or enforcement action by any Governmental Entity, excluding any routine or informal inquiry, request for information or non-binding guidance.

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**Exhibit 4.80**

## Section 4.27 <u>Full Disclosure</u> 
No representation or warranty by Seller in this <u>Article 4</u>, and no statement relating to the Company furnished by Seller or on behalf of Seller to Buyer before the date of this Agreement in the Electronic Data Room, the Seller Disclosure Schedule or the certificate furnished to Buyer pursuant to <u>Section 7.3(c)</u>, contains any untrue statement of a material fact, or omits to state a material fact reasonably necessary to make the statements contained therein, in light of the circumstances in which they were made, not materially misleading (provided that any such information that is as of or speaks as to any date or any period shall be judged only as of such date or such period).

# Article 5 <br>REPRESENTATIONS AND WARRANTIES OF SELLER
Subject to and as qualified by the matters set forth in the corresponding sections or subsections of the Seller Disclosure Schedule (it being understood and agreed by the Parties that disclosure of any item in any section or subsection of the Seller Disclosure Schedule shall be deemed disclosure with respect to any other section or subsection of the Seller Disclosure Schedule to which the relevance of such item is reasonably apparent on the face of such disclosure, notwithstanding the omission of a reference or cross-reference thereto), Seller represents and warrants to Buyer as of the date hereof and as of the Closing Date as follows; <u>provided</u>, <u>however</u>, that any such representations and warranties that are made as of a specific date or as of the date hereof are made only as of such date:

## Section 5.1 <u>Incorporation and Authority of Seller</u> 
Seller is a stock corporation (*kabushiki kaisha*) duly organized, validly existing under the laws of Japan. Seller has all necessary power and authority to enter into, consummate the transactions contemplated by and carry out its obligations under, each of the Transaction Documents to which it is a party. The execution and delivery by Seller of each of the Transaction Documents to which it is a party, the consummation by Seller of the transactions contemplated by each of the Transaction Documents to which it is a party and the performance by Seller of its obligations under each of the Transaction Documents to which it is a party have been or will be prior to the Closing (as applicable) duly authorized by all requisite corporate action of Seller. Each of the Transaction Documents to which Seller is a party has been, or upon execution and delivery thereof will be, duly executed and delivered by Seller. Assuming due authorization, execution and delivery by the other parties hereto or thereto, each of the Transaction Documents to which Seller is a party constitutes, or upon execution and delivery thereof will constitute, the legal, valid and binding obligation of Seller, enforceable against it in accordance with its terms, subject in each case to the effect of any applicable bankruptcy, corporate reorganization, civil rehabilitation, fraudulent conveyance, preferential transfer or similar Applicable Laws now or hereafter in effect relating to or affecting creditors' rights and remedies generally and subject, as to enforceability, to the effect of general equitable principles.

## Section 5.2 <u>No Conflict</u> 
Provided that all Required Governmental Approvals have been obtained or taken, the execution, delivery and performance by Seller of, and the consummation by Seller of the transactions contemplated by this Agreement and the other Transaction Documents to which it is a party do not and will not (a) violate the Organizational Documents of Seller, (b) violate

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**Exhibit 4.80**

any Applicable Law or other Governmental Order applicable to Seller or by which any of its properties or assets is bound or subject to, or (c) result in any breach of any material Governmental Approvals or Contract to which Seller is a party or by which it or any of its properties or assets is bound or subject to, in each case, as in effect or in force as of the date hereof or as of the Closing Date, other than, in each case, any such violations or breaches that, individually or in the aggregate, would not, and would not reasonably be expected to, be material to the ability of Seller to consummate the transactions contemplated by this Agreement or the other Transaction Documents and to perform its obligations under this Agreement or the other Transaction Documents in accordance with this Agreement or the other Transaction Documents.

## Section 5.3 <u>Consents and Approvals</u> 
The execution and delivery by Seller of this Agreement and the other Transaction Documents do not, and the performance by Seller of, and the consummation by Seller of the transactions contemplated by this Agreement and the other Transaction Documents do not, require any Governmental Approval to be obtained or made by Seller prior to the Closing, except for Required Governmental Approvals and such other Governmental Approvals the failure of which to be obtained or made would not, and would not reasonably be expected to, individually or in the aggregate, be material to the ability of Seller to consummate the transactions contemplated by this Agreement or the other Transaction Documents and to perform its obligations under this Agreement or the other Transaction Documents in accordance with this Agreement or the other Transaction Documents.

## Section 5.4 <u>Absence of Litigation</u> 
There are no Actions pending against Seller that question the validity of, or seek injunctive relief with respect to, this Agreement or the other Transaction Documents to which it is a party or the right of Seller to enter into this Agreement or the other Transaction Documents to which it is a party. There are no Actions involving Seller that are pending or, to the Knowledge of Seller, threatened that would reasonably be expected to materially prevent, impede or materially delay the ability of Seller to perform Seller's obligations under this Agreement or the other Transaction Documents to which it is a party or timely consummate the transactions contemplated by this Agreement or the other Transaction Documents to which it is a party.

## Section 5.5 <u>Anti-Corruption Laws; Anti-Money Laundering Laws; Anti-Social Forces</u> 
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Neither Seller nor, to the Knowledge of Seller, any of its directors, officers or employees, is a Sanctioned Person or is owned or controlled, directly or indirectly, by one or more Sanctioned Persons.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Neither Seller nor, to the Knowledge of Seller, any of its directors, officers or employees has taken any action, in connection with this Agreement or the other Transaction Documents, that is in violation of any Anti-Corruption Laws, Anti-Money Laundering Laws or Sanctions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) No Action involving Seller or, to the Knowledge of Seller, any of its directors, officers or employees, with respect to Anti-Corruption Laws, Anti-Money Laundering Laws or Sanctions is pending or, to the Knowledge of Seller, threatened in writing.

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**Exhibit 4.80**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Neither Seller nor any of its directors, officers or employees is an Anti-Social Force. Neither Seller nor any of its directors, officers or employees maintains (i) any relationship whereby it is deemed to be controlled by an Anti-Social Force, (ii) any relationship whereby an Anti-Social Force is deemed to be involved in its management in a substantial way, (iii) any relationship whereby it is deemed to be using an Anti-Social Force in a wrongful way, including, for the purpose of gaining illegal profit for itself or any third party or causing damage to any third party, or (iv) any relationship whereby it is deemed to be providing funds or favors to an Anti-Social Force. Neither Seller nor any of its directors, officers or employees has engaged in any activity that would benefit or assist the operation or preservation of an Anti-Social Force, including by providing funds or other benefits to, or receiving any improper benefit from, an Anti-Social Force.

## Section 5.6 <u>Solvency</u> 
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Seller is not insolvent or bankrupt or unable to pay its debts as they fall due.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Seller has not, by reason of actual financial distress of Seller, stopped or suspended payment of its debts or indicated its intention to do so nor has Seller taken any analogous procedure or step in any jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Seller has not, by reason of actual financial distress of Seller, commenced negotiations with one or more of its creditors with a view to rescheduling or restructuring any of its indebtedness.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) No Governmental Order has been made, petition or other Action presented, resolution passed or meeting convened for the winding up or dissolution of, or making of any administration order for, Seller. No receiver or examiner or other analogous or similar officer has been appointed, by reason of actual financial distress of Seller, over the whole or any part of the property, assets or undertaking of Seller.

## Section 5.7 <u>Brokers</u> 
Except for costs and expenses incurred in connection with external advisors engaged to implement the IFRS Conversion Plan (as provided in <u>Section 6.17(e)</u>), no broker, investment banker, financial adviser or other intermediary is entitled to any broker's, finder's, financial advisor's, investment banker's fee or commission for which Buyer, its Affiliates or the Company would become liable or obligated to pay in connection with the transactions contemplated by this Agreement or any other Transaction Documents based upon arrangements made by or on behalf of the Company or Seller.

# Article 6 <br>COVENANTS

## Section 6.1 <u>Conduct of Business Prior to the Closing</u> 
During the period from the date of this Agreement through the Closing, except (i) as otherwise expressly contemplated or required by this Agreement or any other Transaction Document (including any actions contemplated by the Host Migration Development Plan), (ii) for matters identified in <u>Section 6.1</u> of the Seller Disclosure Schedule, (iii) to the extent

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**Exhibit 4.80**

required or prohibited by Applicable Law, Governmental Order or Governmental Entity (including by Applicable Law or Governmental Order issued in connection with a Contagion Event) or (iv) as Buyer otherwise consents in writing in advance (which consent (1) shall not be unreasonably withheld, delayed or conditioned and (2) shall be deemed granted if Buyer does not respond to a written request of Seller (email to the addresses set forth in <u>Section 11.2</u> being sufficient for such request) within ten (10) Business Days after receipt thereof; and if such consent is not granted or deemed granted, at the request of Seller, Buyer shall discuss the Seller's request in good faith with Seller with a view to maintaining the corporate value of the Company), (A) Seller shall cause the Company to conduct its business in the Ordinary Course of Business and to use commercially reasonable efforts to maintain and preserve, in all material respects and to the extent within Seller's reasonable control, the Company Material Governmental Approvals and the current organization and business of the Company, and to preserve, in all material respects and to the extent within Seller's reasonable control, the rights, franchises, goodwill and relationships with its employees, Governmental Entities and other Persons who have material business relations with the Company, including material distributors; <u>provided</u>, <u>however</u>, that the foregoing shall not require Seller or the Company to guarantee the preservation or continuation of any particular relationship or to achieve any specific outcome, and (B) Seller shall cause the Company not to do any of the following, in each case directly or indirectly:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) (A) enter into any new line of business outside of the business conducted by the Company as of the date of this Agreement, (B) abandon or discontinue the conduct of any business conducted by the Company as of the date of this Agreement, or (C) incorporate any Subsidiary; <u>provided</u>, for the avoidance of doubt with respect to clause (A), that entry into any reinsurance contracts or the launch of new products within the Ordinary Course of Business shall not constitute a new line of business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) adopt, amend or repeal its articles of incorporation, except for any such amendments as may be required in connection with any change to Applicable Law or as would not have any material adverse effect on shareholders' rights and entitlements, governance or business operations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) merge with any other Person, or acquire all or substantially all of the assets of any other Person, or implement any corporate split (*kaisha bunkatsu*), share-to-share transfer (*kabushiki kokan*), share delivery (*kabushiki kofu*), or share exchange (*kabushiki iten*) or other similar transaction having substantially the same effect as any of the foregoing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) dissolve or liquidate, or file for the commencement of bankruptcy proceedings, civil rehabilitation proceedings, corporate reorganization proceedings, special liquidation or other similar proceedings having substantially the same effect as any of the foregoing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) acquire, transfer, sell, lease, license or otherwise dispose of any assets (including any business, shares or other equity interest), other than (A) sales, leases or other disposals of assets in the Ordinary Course of Business which, in the aggregate, do not exceed three hundred million Japanese yen (¥300,000,000), (B) disposals of investment assets in the Ordinary Course of Business in connection with the Company's ordinary asset management activities, or (C) any transfer of assets to the Company from any reinsurer in connection with the recapture, termination or commutation of any Company Reinsurance Contract, including any release or transfer

------

**Exhibit 4.80**

of assets held in any trust or other collateral account established in connection therewith, to the extent such transfer (1) would not materially deviate from the forecasts, projections or financial simulations made available to Buyer in the Disclosed Information and (2) has been discussed in good faith with Buyer prior to taking such action; <u>provided</u>, for the avoidance of doubt, that (i) the receipt of any premium payments or policyholder deposits or reserves, and the payment of any insurance benefits, including claims, annuities or surrender values, in each case under any Insurance Contract, (ii) the payment of any reinsurance premiums and the receipt of any claims recoveries, in each case under any Company Reinsurance Contract, or (iii) the payment of commissions, brokerage fees, service fees or other remuneration or compensation payable pursuant to any Company Distribution Contract shall not constitute, and shall be deemed not to constitute, any of the actions restricted under this <u>Section 6.1(v)</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) create any Lien other than a Permitted Lien on any assets or properties, other than in the Ordinary Course of Business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) take any action that would reasonably be expected to materially affect the integrity or continuity of the Company's IT Systems or accounting processes involved in the generation, storage, and extraction of financial reporting data, other than any actions taken (A) in the Ordinary Course of Business that would not reasonably be expected to result in a material disruption of any Company Material IT Systems or (B) to comply with any Applicable Law or respond to any requirement or request of any Governmental Entity;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) other than with respect to Investments, make any investments or expenditures (whether in cash or other assets) (A) with respect to IT Systems exceeding three hundred million Japanese yen (¥300,000,000) in any single transaction or series of related transactions, or (B) with respect to other matters, exceeding one hundred million Japanese yen (¥100,000,000) in any single transaction or series of related transactions, other than any investments or expenditures that (1) are made in the Ordinary Course of Business, (2) are specifically identified in and would not materially deviate from the forecasts, projections or financial simulations made available to Buyer in the Disclosed Information, or (3) are made to respond to any requirement or request of any Governmental Entity;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) (A) make, sell, or dispose of Investments other than in the Ordinary Course of Business, or (B) amend or modify in any material respect the Company's policies or guidelines with respect to Investments, other than any such amendments or modifications made (1) in the Ordinary Course of Business or (2) to comply with Applicable Law or any requirement or request of any Governmental Entity;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) issue, transfer, grant, pledge, encumber or dispose of (A) any shares of Capital Stock or other equity securities of the Company or (B) any stock options, warrants or other rights to purchase or otherwise acquire any shares of Capital Stock or other equity securities of the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) declare or pay any dividends or distributions on or in respect of any shares of Capital Stock or other equity securities of the Company, or redeem, purchase or acquire any shares of Capital Stock or other equity securities of the

------

**Exhibit 4.80**

Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii) reduce the stated capital (*shihonkin*) or capital reserves (*shihon junbikin*) of the Company, or conduct any share split (*kabushiki bunkatsu*) or share consolidation (*kabushiki heigo*) of any shares of Capital Stock or other equity securities of the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiii) make material change in any method of accounting or accounting practice of the Company, except (A) as required by Japanese GAAP (including any change in interpretation or application thereof), (B) as required by any Applicable Law, (C) as disclosed in the notes to the Company Financial Statements, or (D) in the Ordinary Course of Business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiv) enter into, amend in any material respect or terminate any Company Material Contract (other than Contracts specified in clauses (vi), (vii) or (xi) of the definition thereof, or investment management agreements relating to the Company's general accounts) or Contract that would have been a Company Material Contract (other than Contracts specified in clauses (vi), (vii) or (xi) of the definition thereof) had it been in effect as of the date hereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xv) enter into, amend in any material respect, terminate or extend (other than pursuant to its current terms), any Contract, transaction, or arrangement that would constitute a Related Person Arrangement, other than (A) any actions that are taken on arm's-length or better terms, or otherwise specifically identified in the forecasts, projections or financial simulations made available to Buyer in the Disclosed Information or (B) any termination expressly contemplated by <u>Section 6.16</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xvi) enter into, materially amend or modify, or terminate any joint venture, capital alliance, business alliance or similar material arrangement with any Person, other than in the Ordinary Course of Business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xvii) enter into, materially amend or modify, or terminate any Company Reinsurance Contracts, other than any actions that (A) are in the Ordinary Course of Business, (B) would not materially deviate from the forecasts, projections or financial simulations made available to Buyer in the Disclosed Information and (C) have been discussed in good faith with Buyer prior to taking such actions; provided that the foregoing exception shall not apply to any block reinsurance transaction relating to existing Insurance Contracts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xviii) (A) enter into, materially amend or modify any investment management agreement relating to the Company's general accounts or (B) materially amend the Company's investment policies and management guidelines applicable to any such investment management agreement, in each case with respect to any investment management agreement under which assets in excess of ten billion Japanese yen (¥10,000,000,000) are expected to be managed; provided that this <u>Section 6.1(xviii)</u> shall not apply to any actions that (1) are made in the Ordinary Course of Business, (2) are specifically identified in and would not materially deviate from the forecasts, projections or financial simulations made available to Buyer in the Disclosed Information, or (3) are made to comply with any Applicable Law or respond to any requirement or request of any Governmental Entity; and provided further that, for the avoidance of doubt, this <u>Section 6.1(xviii)</u> shall not apply to (i) any investments made,

------

**Exhibit 4.80**

disposals effected or other transactions conducted pursuant to any such investment management agreement, or (ii) any fluctuation in the amount of assets managed under such agreement, to the extent that (x) the aggregate amount of assets managed under such agreement does not exceed ten billion Japanese yen (¥10,000,000,000) and (y) no amendment of such agreement is involved;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xix) forgive, cancel or compromise any material debt or claim, or waive or release any material right, without receiving a realizable benefit of similar or greater value other than in connection with any Company Material Reinsurance Contracts or other Company Reinsurance Contracts in the Ordinary Course of Business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xx) incur, assume or guarantee any indebtedness for borrowed money or otherwise become responsible for the obligations of another Person that would be liabilities of the Company after the Closing, other than (A) indebtedness which, in the aggregate, does not exceed one billion Japanese yen (¥1,000,000,000), (B) pursuant to Contracts existing as of the date hereof, including any Company Reinsurance Contracts, in the Ordinary Course of Business, or (C) pursuant to any other reinsurance contracts that may be entered into after the date hereof in the Ordinary Course of Business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxi) settle or compromise any Action or threatened Action, other than (A) any settlements or compromises of claims under Insurance Contracts made in the Ordinary Course of Business, provided that the amount of such settlements or compromises does not exceed one hundred million Japanese yen (¥100,000,000) per Action or 110% of the applicable benefit amount under such Insurance Contract, whichever is greater, and (B) any other settlements or compromises of Actions that involve solely monetary damages not exceeding one hundred million Japanese yen (¥100,000,000) per Action;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxii) (A) appoint, engage, hire, remove or terminate any director, statutory auditor or officer of the Company; or (B) determine or promise, or make any material change in, compensation or other benefits payable to any director, statutory auditor or officer of the Company; other than: (1) the (re-)appointment of any Person who is serving as a director, statutory auditor or officer of the Company as of the date of this Agreement (or who was nominated or approved prior to the date of this Agreement); (2) the appointment of any officer from among the existing employees of the Company in the Ordinary Course of Business, other than any appointment of a chief executive officer, chief financial officer or similar senior management position; (3) the removal of, or termination of employment of, any director, statutory auditor or officer resulting from (i) physical or mental incapacity, (ii) disqualification or ineligibility under Applicable Law, (iii) a violation of Applicable Law or any Organizational Documents or other internal regulations of the Company, and, to the extent reasonably necessary to comply with Applicable Law or the Company's Organizational Documents, the appointment of any replacement in connection therewith; and (4) any determination, promise, payment or change of compensation or other benefits as specifically identified in the Disclosed Information;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxiii) grant any material increase in the base salary or wages, bonus opportunity, or other compensation or benefits payable to any employees, directors, officers or statutory auditors of the Company, except (A) as disclosed as part of the Electronic Data Room, (B) as required by Applicable Law, (C) pursuant to the terms of

------

**Exhibit 4.80**

any employment contracts or other Contracts with any such employees, directors, officers or statutory auditors of the Company, collective bargaining agreements or labor-management agreements (*roshi kyotei*)), in each case existing as of the date hereof and to the extent disclosed in the Electronic Data Room (it being understood that disclosure of standard forms or templates of such Contracts shall be deemed sufficient disclosure for purposes of this clause to the extent the applicable actual Contracts are substantially consistent with such forms or templates), (D) any increase based on modification of job responsibilities or job descriptions, or performance evaluation in accordance with Applicable Laws and the Company's internal regulations, or (E) any increase that is specifically identified in and would not materially deviate from the forecasts, projections or financial simulations disclosed in the Disclosed Information;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxiv) except as required by Applicable Law or in the Ordinary Course of Business, (A) make, change or rescind any Tax election, (B) amend any Tax Return or take any position on any Tax Return, or (C) take any action, omit to take any action or enter into any other transaction, in each case to the extent that such action would have the effect of materially increasing the Tax liability or materially reducing any Tax asset of the Company; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxv) agree or commit to do any of the foregoing.

## Section 6.2 <u>Access to Information</u> 
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Prior to the Closing, Buyer and its Representatives may only contact and communicate with the employees, customers, service providers, suppliers and any other Person who has material business relations with the Company, in each case to the extent such contact or communications relate to the transactions contemplated by this Agreement or the other Transaction Documents, only after prior consultation with and written approval of Seller (which approval shall not be unreasonably withheld, conditioned or delayed). Notwithstanding the foregoing, Seller agrees that, from the date hereof until the Closing Date, upon reasonable prior notice from Buyer, it shall provide Buyer, and subject in all respects to Applicable Law, with reasonable access, during normal business hours, to information, data, properties, books and records, and assets and personnel of the Company (in each case to the extent existing and readily available at that time) as reasonably required to prepare for the Closing or the transition after the Closing; <u>provided</u>, that nothing herein shall require Seller to, or to cause the Company to, (i) disclose or provide Buyer or the Representatives of Buyer that part of any information or materials that (A) are commercially or competitively sensitive (except to the extent Buyer agrees to be bound by the terms of the Clean Team Agreement in respect of the information or materials disclosed or provided to Buyer or its Representatives), (B) contain personal information or other personally identifiable information about an officer, director or employee of Seller or any of its Affiliates, or (C) are legally privileged or subject to confidentiality obligations owed to any third party who is not an Affiliate of Seller, or (ii) take any action that would constitute a violation of Applicable Law; <u>provided</u>, <u>further</u>, that such access shall be coordinated through, and subject to the supervision of, Seller and, where applicable, the Company, and shall not unreasonably interfere with the businesses or operations of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) From and after the Closing Date until the seventh (7<sup>th</sup>) anniversary thereof, Buyer shall, and shall cause the Company to, (i) retain the Company's books and records (including Tax records) in accordance with the requirements of Applicable Law and in a manner consistent with its ordinary document retention policies or practices, and (ii) at

------

**Exhibit 4.80**

Seller's reasonable request, afford Seller reasonable access during normal business hours to such books and records and personnel of the Company related to the conduct of the business of the Company prior to the Closing, to the extent reasonably necessary for Seller in connection with (A) preparation of financial statements required under Applicable Law, (B) preparation of filings and submissions to Governmental Entities, (C) the conduct of any Action against a party that is not Buyer or its Affiliates, (D) compliance with any applicable Governmental Orders, (E) compliance with Applicable Law, or (F) any Tax filings in accordance with <u>Section 9.1</u> with respect to Seller's interest in the Company; <u>provided</u>, that the exceptions and qualifications contained in the provisos to <u>Section 6.2(a)</u> shall apply *mutatis mutandis*.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) From and after the Closing Date until the seventh (7<sup>th</sup>) anniversary thereof, Seller shall, and shall cause its Affiliates to (i) retain their respective books and records (including Tax records) related to the Company and its business and affairs prior to the Closing, only if they are in their possession, in accordance with the requirements of Applicable Law and in a manner consistent with their ordinary document retention policies or practices, and (ii) at Buyer's reasonable request, afford Buyer reasonable access during normal business hours to such books and records and relevant personnel of Seller and its Affiliates, to the extent reasonably necessary for Buyer in connection with (A) preparation of financial statements required under Applicable Law, (B) preparation of filings and submissions to Governmental Entities, (C) compliance with any applicable Governmental Orders, (D) the conduct of any Action against a party that is not Seller or its Affiliates, (E) compliance with Applicable Law, or (F) any Tax filings in accordance with <u>Section 9.1</u>; <u>provided</u>, that the exceptions and qualifications contained in the provisos to <u>Section 6.2(a)</u> shall apply *mutatis mutandis*.

## Section 6.3 <u>Confidentiality</u> 
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The terms of the Non-Disclosure Agreement shall continue in full force and effect in accordance with its terms. Notwithstanding anything to the contrary in the Non-Disclosure Agreement, the Parties agree that (i) the "Purpose" applicable to Seller and Buyer under the Non-Disclosure Agreement shall be, and hereby is, modified such that it includes the purposes relating to the performance of the obligations or the exercise of rights under this Agreement or the other Transaction Documents, and (ii) the term of the Non-Disclosure Agreement shall be, and hereby is, modified such that the Non-Disclosure Agreement continues in full force and effect until the termination of the Shareholders Agreement as it relates to either Party. If, for any reason, the transactions contemplated by this Agreement are not consummated, the Non-Disclosure Agreement shall nonetheless continue in full force and effect in accordance with its terms until the first (1<sup>st</sup>) anniversary of the date of valid termination of this Agreement in accordance with the terms hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Parties acknowledge and agree that (i) the terms and contents of this Agreement and the other Transaction Documents, (ii) any information with respect to the negotiation, execution or performance of this Agreement or the other Transaction Documents, (iii) any information relating to the Company (the "<u>Company Information</u>"), and (iv) any information relating to the other Party or its Affiliates (other than the Company) (the "<u>Counterparty Information</u>"), which, in each case of (iii) and (iv), is obtained from the Company, such other Party or its Affiliates in connection with the negotiation, execution or performance of this Agreement or the other Transaction Documents, shall constitute "Confidential Information" under the Non-Disclosure Agreement, subject to the limitations set forth therein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Notwithstanding anything to the contrary in the Non-Disclosure

------

**Exhibit 4.80**

Agreement, Company Information shall be deemed as Seller's Confidential Information (as defined in the Non-Disclosure Agreement) before the Closing Date. On and after the Closing Date, the confidentiality obligations of the Parties with respect to Company Information and Counterparty Information shall be exclusively governed by the Shareholders Agreement. For the avoidance of doubt, the Non-Disclosure Agreement shall continue to apply on and after the Closing Date with respect to Confidential Information referred to in <u>Section 6.3(b)</u>(i) and (ii) above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Notwithstanding anything to the contrary in the Clean Team Agreement, the Parties agree that such agreement shall remain effective until the Closing Date and terminate and cease to have any effect on and from the Closing Date.

## Section 6.4 <u>Consents, Approvals and Filings</u> 
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Subject to the provisions of this <u>Section 6.4</u>, each Party shall use its reasonable best efforts, and shall cooperate (and, where applicable, cause each of their respective Affiliates and, in the case of Seller, including the Company, to cooperate) with each other to (i) comply as promptly as practicable after the date hereof with all requirements of Governmental Entities applicable to the transactions contemplated by this Agreement or any other Transaction Document and (ii) obtain as promptly as practicable after the date hereof all necessary Governmental Approvals (including the Required Governmental Approvals) in connection with the consummation of the transactions contemplated by this Agreement and the other Transaction Documents. Each Party shall be responsible for all costs related to each of its own (or its Affiliates') required filings with and approvals of Governmental Entities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) In connection with the obligations of the Parties pursuant to <u>Section 6.4</u>, (i) each Party shall, as promptly as practicable after the date hereof, commence pre-notification, prior consultation or similar process customarily conducted with Governmental Entities (including the JFSA) with respect to the filings in connection with the approval by and the notification necessary in connection with the consummation of the transactions contemplated by this Agreement, the other Transaction Documents and the OneIM SPA, and (ii) each Party shall, as promptly as practicable after the date hereof, (A) make all other filings with, and requests for approvals by, all applicable Governmental Entities that are legally required in connection with this Agreement or the other Transaction Documents, and (B)(1) take all steps that are reasonably necessary to avoid any adverse or unusual Action by any Governmental Entity with respect to the transactions contemplated by this Agreement or the other Transaction Documents, (2) defend or contest in good faith any Action by any third party (including any other Governmental Entity), whether judicial or administrative, challenging any of this Agreement or the other Transaction Documents, or the transactions contemplated hereby or thereby, or that could otherwise prevent, impede, interfere with, hinder or delay in any material respect the consummation of the transactions contemplated hereby or thereby, and use its commercially reasonable efforts to have vacated or reversed any Governmental Order that could prevent, impede, interfere with, hinder or delay in any material respect the transactions contemplated by any of this Agreement or the other Transaction Documents, and (3) consent to and comply with any condition, limitation or qualification imposed by any Governmental Entity on its grant of any such Governmental Approval, in each case with respect to clause (B), other than (x) as would constitute or would reasonably be expected to result in a Burdensome Condition or (y) in respect of defense against an Action or potential Action that outside counsel of Buyer advises in writing to Buyer is "frivolous". Except as may be prohibited by the applicable Governmental Entities or Applicable Law, each Party shall provide to the other Party copies of all applications or other substantive communications to Governmental Entities in

------

**Exhibit 4.80**

connection with this Agreement or any other Transaction Document in advance of the filing or submission thereof; <u>provided</u> that neither Party shall be required to provide the other Party with any information or materials that (1) are commercially or competitively sensitive, (2) contain personal information or other personally identifiable information about an officer, director or employee of Buyer or any of its Affiliates, or (3) that are legally privileged (collectively, "<u>Sensitive Information</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Without limiting the generality of the foregoing, as promptly as practicable following the date hereof, each Party shall make the applicable filings required in connection with each Required Governmental Approval; <u>provided</u>, that the filings in connection with the approval by and the notification to the JFSA shall be made as promptly as practicable after the JFSA has indicated Buyer may proceed with such filings in the prior consultation process (it being understood that Buyer shall continue to engage in the prior consultation process with the JFSA and use its reasonable best efforts to obtain such indication to proceed with such filings as promptly as practicable following the date hereof).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Except as may be prohibited by the JFSA or Applicable Law, each Party shall:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) (A) within a reasonable time prior to furnishing any written materials to, or having any communications with the JFSA (other than a telephone call initiated by the JFSA and not scheduled in advance or *de minimis* communications not involving substantive discussions), whether formal or informal, in connection with the transactions contemplated by this Agreement or the other Transaction Documents, furnish the other Party with a copy (in connection with any written materials or communications) and reasonably detailed agenda items (in connection with any oral communications) thereof, and such other Party shall have a reasonable opportunity to provide comments thereon, and (B) promptly after having engaged any such communications with the JFSA, provide the other Party with a reasonable summary of such communications and respond to any reasonable inquiry from the other Party;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) not engage in any meetings (including telephone conferences) with the JFSA in connection with the transactions contemplated by this Agreement or the other Transaction Documents without first providing the other Party with reasonable prior notice thereof. If the other Party reasonably determines that its attendance or participation in any such meeting is necessary or appropriate in light of its knowledge or involvement relating to the transactions contemplated by this Agreement or the other Transaction Documents, the Parties shall discuss in good faith whether and to what extent such other Party may attend or otherwise participate in such meeting. Notwithstanding the foregoing, if, at any meeting or discussion with the JFSA that is not intended for the purpose of discussions relating to the transactions contemplated by this Agreement or the other Transaction Documents, either Party is requested by the JFSA to provide explanations or engage in discussions regarding matters relating to such transactions, such Party may provide such explanations or engage in such discussions to the extent reasonably and practically necessary to preserve the relationship with the JFSA without giving prior notice to the other Party; <u>provided</u>, that, except as may be prohibited by the JFSA or Applicable Law, such Party shall promptly provide the other Party with the details of such explanations or discussions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) if it receives any substantive notice or other substantive communication from the JFSA in connection with the transactions contemplated by this

------

**Exhibit 4.80**

Agreement or the other Transaction Documents, give to the other Party prompt written notice together with a copy (in connection with any written notice or communications) or a reasonable summary (in connection with any oral communications) thereof; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) if the JFSA requires that a hearing be held in connection with the transactions contemplated by this Agreement or the other Transaction Documents, (A) use its commercially reasonable efforts to arrange for such hearing to be held as promptly as practicable after the notice that such hearing is required has been received by such Party, (B) give to the other Party reasonable prior written notice of the time and place when any substantive meetings, or substantive telephone conferences may be held by it with the JFSA in connection with the transactions contemplated by this Agreement or the other Transaction Documents, and, to the extent permitted by the JFSA and Applicable Law, the other Party shall have the right to have a Representative or Representatives attend or otherwise participate in any such meeting or telephone conference.

Notwithstanding the foregoing, nothing in this <u>Section 6.4(d)</u> shall require either Party to provide to the other Party any information or materials (including information or materials that may be shared prior to or during telephone calls or conferences with the JFSA) that constitute Sensitive Information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) From the date hereof until the Closing, Buyer shall not, and shall cause its controlled Affiliates not to, acquire or agree to acquire, by merging with or into or consolidating with, or by purchasing a substantial portion of the assets of or any equity in, or by any other manner, any assets or Person, to the extent such acquisition would reasonably be expected to: (i) impose any material delay in obtaining, or materially increase the risk of not obtaining, any Required Governmental Approvals or the expiration or termination of any applicable waiting period, (ii) materially increase the risk of a Governmental Entity seeking or entering a Governmental Order prohibiting the consummation of the transactions contemplated by this Agreement or the other Transaction Documents, (iii) materially increase the risk of not being able to remove any such Governmental Order on appeal or otherwise, or (iv) otherwise materially prevent or delay the consummation of the transactions contemplated by this Agreement or the other Transaction Documents. Buyer shall use reasonable best efforts to cause its Affiliates that are not controlled by it not to take such actions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Buyer shall, and shall cause its controlled Affiliates to, promptly cease, terminate or withdraw from any existing negotiations, discussions, agreements or plans as of the date hereof to the extent that continuing such activities would reasonably be expected to give rise to any of the matters set forth in <u>Section 6.4(e)(i)</u>. Buyer shall use commercially reasonable efforts to cause its Affiliates that are not controlled by it to take the foregoing actions.

## Section 6.5 <u>Third Party Consents and Board Approvals.</u> 
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Prior to the Closing, Seller shall cause the Company to use its commercially reasonable efforts to obtain the consents, approvals and waivers of third parties set forth in <u>Schedule 6.5(a)</u>, and Buyer shall reasonably cooperate with Seller and the Company in connection with the foregoing. Prior to the Closing, Seller shall cause the Company to give

------

**Exhibit 4.80**

notices to counterparties to the Contracts set forth in <u>Schedule 6.5(a)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Seller shall, and shall cause the Company to, take all actions necessary to duly adopt, prior to the Closing, all resolutions of the board of directors of the Company approving the transfer of the Target Shares to Buyer and the consummation of the transactions contemplated by this Agreement. Seller shall further cause such resolutions to remain in full force and effect as of the Closing.

## Section 6.6 <u>Public Announcements</u> 
The Parties shall agree on a press release announcing the entering into of this Agreement or the other Transaction Documents and the transactions contemplated hereby or thereby. Thereafter, each Party shall, and shall cause its Affiliates to, consult with the other Party before issuing, and provide each other the opportunity to review and comment upon, any press release or other public statement with respect to the transactions contemplated by this Agreement or the other Transaction Documents and shall not and shall cause its Affiliates not to issue any such press release or make any such public statement with respect to such matters without the advance approval of the other Party following such consultation (such approval not to be unreasonably withheld, conditioned or delayed), except as may be required by Applicable Law or by the requirements of any securities exchange; <u>provided</u> that, in the event that any Party is required under Applicable Law to issue any such press release or make any public statement and it is not reasonably practicable to obtain the advance approval of the other Party as required by this <u>Section 6.6</u>, the Party that issues such press release or makes such statement shall provide the other Party with notice and a copy of such press release or statement as soon as reasonably practicable; <u>provided</u>, <u>however</u>, that none of the foregoing shall apply to any press release or other public statement to the extent the statements therein with respect to this Agreement or the transactions contemplated hereby are consistent in all material respects with, and do not contain additional material information to, the statements previously issued in compliance with this <u>Section 6.6</u>.

## Section 6.7 <u>Other Transaction Documents</u> 
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) From the date of this Agreement until the Closing, the Parties shall negotiate in good faith and prepare, supplement and finalize the Transitional Services Agreement, consistent with the TSA Term Sheet, and Seller shall, and shall cause the Company to enter into such Transitional Services Agreement finalized in accordance with the foregoing in form and substance reasonably acceptable to Buyer, acting as a reasonable buyer, at or prior to the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) At the Closing, the Parties shall enter into a shareholders agreement (the "<u>Shareholders Agreement</u>") with regard to the matters concerning the operation and shares of the Company after the Closing, which shall be in the form attached hereto as <u>Exhibit C-1</u>; <u>provided</u>, that in the event that a OneIM Non-Closing Event has occurred on or prior to the Closing, such Shareholders Agreement shall instead be in the form attached hereto as <u>Exhibit C-2</u>.

## Section 6.8 <u>Employee Matters</u> 
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) From and after the Closing Date until the third (3<sup>rd</sup>) anniversary of the Closing Date with respect to each employee who is employed by the Company as of immediately prior to the Closing (each, a "<u>Continuing Employee</u>"):

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**Exhibit 4.80**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Buyer shall cause the Company to continue to employ each Continuing Employee, except for (A) voluntary resignation, retirement and disciplinary dismissal in accordance with Applicable Laws and the Company's internal regulations, and (B) any transfer of such Continuing Employee to Buyer or any of its Affiliates, or Seller or any of its Affiliates, subject to the prior consent of such Continuing Employee being validly obtained in accordance with Applicable Laws; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Buyer shall cause the Company to maintain at least the same level of the compensation, benefits and other employment conditions of each Continuing Employee, taken as a whole, such that they are no less favorable than those in effect immediately prior to the Closing, except for (A) changes based on modification of job responsibilities or job descriptions, performance evaluation or disciplinary actions in accordance with Applicable Laws and the Company's internal regulations, and (B) any transfer of such Continuing Employee to Buyer or any of its Affiliates, or Seller or any of its Affiliates, subject to the prior consent of such Continuing Employee being validly obtained in accordance with Applicable Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) From the date of this Agreement until the date on which Seller ceases to hold any shares in the Company, Seller shall not, and shall cause its Affiliates not to, terminate, withdraw or replace employees seconded from the Seller Group to the Company as of the date hereof (the "<u>Existing Seconded Employees</u>") in a manner that would reasonably be expected to cause material disruption to the operations of the Company without the prior written consent of Buyer (not to be unreasonably withheld, conditioned or delayed), except for (i) resignations, (ii) any leave of absence due to physical or mental illness or injuries, or return of any Existing Seconded Employee to the Seller Group in connection with such circumstances, (iii) any termination or suspension for cause as determined by the Seller Group in accordance with applicable employment contracts or the Company's employment policies and consistent with their past employment practices, (iv) any return of any Existing Seconded Employee to the Seller Group due to such employee's misconduct, or (v) any termination or withdrawal of any Existing Seconded Employee as agreed in writing by Buyer in advance, and in each case of clauses (i) through (v), none of the Seller or the Seller Group shall be obligated to replace such Existing Seconded Employee with another employee; <u>provided</u>, that Buyer shall, and shall cause the Company to, use commercially reasonable efforts to enable the Company to independently perform such functions as promptly as reasonably practicable following the Closing, without reliance on any such seconded employees from the Seller Group, it being understood that the continuation of any such secondment arrangements is conditioned upon Buyer's compliance with the foregoing obligation. All costs and expenses (including any payments to such seconded employees) relating to such secondment arrangements (the "<u>Secondment Costs</u>") shall be borne by the Company unless otherwise agreed in writing between Seller and Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) With respect to any employee benefit plan maintained by Buyer or its Affiliates (including the Company following the Closing) (collectively, "<u>Buyer Benefit Plans</u>") and any Continuing Employee who participates in such plans, Buyer shall use commercially reasonable efforts to, or shall cause its Affiliates (including the Company following the Closing) to use commercially reasonable efforts to, recognize all service of such Continuing Employee with the Company, Seller or any other member of the Seller Group, as applicable, prior to the Closing, as if such service were with Buyer or its applicable Affiliates for vesting and eligibility purposes in any Buyer Benefit Plan in which such Continuing Employee participates after the Closing Date; <u>provided</u>, <u>however</u>, that such service shall not be recognized

------

**Exhibit 4.80**

to the extent that (i) such recognition would result in a duplication of benefits, (ii) is not permitted under Applicable Law, or (iii) would not be feasible under the terms of the relevant Buyer Benefit Plan as in effect on the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The provisions of <u>Section 6.8(a)</u> and <u>Section 6.8(c)</u> are for the sole benefit of Seller, and nothing herein, expressed or implied, is intended or shall be construed to confer upon or give to any Continuing Employee or any other Person other than Seller and their respective permitted successors and assigns, any legal or equitable or other rights or remedies under or by reason of any such provision of this Agreement. Nothing contained herein, express or implied, shall be construed to establish, amend or modify any benefit plan, program, agreement or arrangement. Nothing in this <u>Section 6.8</u> shall require the continued employment of any Continuing Employee, or create any right in any Continuing Employee to any continued employment with Seller, the Company, Buyer or any of their respective Affiliates or compensation or benefits of any nature or kind whatsoever.

## Section 6.9 <u>Waiver of Claims</u> 
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Seller hereby waives as of the Closing, and shall not make or pursue after the Closing, any claim or Action against the Company or any of its present or past directors, officers or employees (excluding any employees seconded from the Seller Group to the Company) in respect of any Losses that Seller may incur under this Agreement or otherwise in connection with the transactions contemplated by this Agreement; <u>provided</u>, <u>however</u>, that nothing in this Section 6.9(a) shall limit or restrict (i) any claim arising under the Transitional Services Agreement, (ii) any claim arising under any Related Person Arrangements, or (iii) any claim arising out of fraud, willful misconduct, gross negligence, breach of fiduciary duty, violation of Applicable Law or material violation of internal policies or regulations of the Company by such individuals.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Buyer hereby waives as of the Closing, and shall not, and shall not cause or permit the Company to, make or pursue after the Closing, any claim or Action against the Company or any of its present or past directors, officers or employees in respect of or arising out of or pertaining to matters existing or occurring prior to the Closing (including such matters in connection with this Agreement and the other Transaction Documents and, unless the OneIM Non-Closing Event has occurred, the OneIM SPA, and the transactions contemplated hereby and thereby), whether asserted or claimed prior to, at or after the Closing, to the fullest extent permitted by Applicable Law; <u>provided</u>, <u>however</u>, that nothing in this Section 6.9(b) shall limit or restrict any claim arising out of fraud, willful misconduct, gross negligence, breach of fiduciary duty, violation of Applicable Law or material violation of internal policies or regulations of the Company by such individuals.

## Section 6.10 <u>Non-Solicitation</u> 
From and after the Closing Date until the second (2<sup>nd</sup>) anniversary thereof, neither Party shall, and each Party shall cause its Affiliates (in the case of Buyer, including the Company) not to, directly or indirectly, solicit or cause to be solicited, for purposes of employment by, or engagement in the business of, such Party or any of its Affiliates, any director, officer or employee of the other Party or any of its Affiliates; <u>provided</u>, <u>however</u>, that the foregoing restriction (i) shall not prevent either Party or its Affiliates from entering into discussions with, employing, engaging or entering into any Contract with any individual (A) who responds to placements of general solicitation, job posting or advertisements not targeted at directors, officers or employees of the other Party or any of its Affiliates, (B) who is contacted by a

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**Exhibit 4.80**

recruitment agency (provided that none of such Party or its Affiliates instruct such agency to target any directors, officers or employees of the other Party or any of its Affiliates) and is introduced to such Party or its Affiliates by such agency, or (C) who contacts such Party or its Affiliates in search of employment or engagement without having first received encouragement or invitation to do so from such Party or its Affiliates, and (ii) shall not prevent Buyer or its Affiliates from (A) engaging, pursuant to and in accordance with any secondment agreement between Seller or its Affiliates (for the avoidance of doubt, other than the Company) on the one hand, and the Company on the other hand, the employees of Seller or any of its Affiliates as secondees from the Seller Group to the Company, (B) soliciting any Existing Seconded Employee who is, at the time of such solicitation, seconded to the Company for purposes of employment by, or engagement in the business of the Company, or (C) taking any such actions as otherwise agreed in writing between Seller and Buyer in advance of any solicitation of such employment (and, for the avoidance of doubt, in the case of any transfer (*tenseki*), subject to the prior consent of the relevant individual being validly obtained in accordance with Applicable Laws).

## Section 6.11 <u>Exclusivity</u> 
From the date hereof until the earliest of (x) the Closing, (y) the termination of this Agreement in accordance with its terms and (z) April 1, 2028, Seller shall not, and shall not authorize or permit any of its Affiliates (including the Company) or any of its or their Representatives to, directly or indirectly, (a) solicit, initiate or knowingly facilitate or encourage the making of an Acquisition Proposal; (b) enter into discussions or negotiations with, or provide any information to, any Person concerning a possible Acquisition Proposal; or (c) enter into any agreements or other instruments (whether or not binding) regarding an Acquisition Proposal. Seller shall promptly cease and cause to be terminated, and shall cause its Affiliates (including the Company) and all of its and their Representatives to promptly cease and cause to be terminated, all existing discussions or negotiations with any Persons conducted heretofore with respect to an Acquisition Proposal. For purposes hereof, "Acquisition Proposal" means any inquiry, proposal or offer from any Person (other than Buyer, OneIM or any of their respective Affiliates) concerning (i) a merger, consolidation, liquidation, recapitalization, share exchange or other business combination transaction involving the Company; (ii) the issuance or acquisition of shares of capital stock or other equity securities of the Company; or (iii) the sale, lease, exchange or other disposition of all or any significant portion of the Company's properties or assets; provided, for the avoidance of doubt, that "Acquisition Proposal" shall not include any reinsurance transactions, asset management transactions or other activities taken in the Ordinary Course of Business.

## Section 6.12 <u>Discontinuance of Use of Brand</u> 
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Parties agree to take, and shall cause the Company to take, all actions necessary to change the corporate name of the Company as of the Closing Date to such corporate name as separately designated by Buyer (which shall not include, and shall not be similar to, "T&D" and shall not infringe or reasonably be expected to infringe any Intellectual Property of any third party), including causing the Company to adopt the necessary resolutions at a shareholders' meeting to amend its articles of incorporation in connection with such change of corporate name, and exercising their voting rights in favor of such resolutions at such shareholders' meeting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Following the date hereof, the Parties shall cooperate in good faith to develop a plan for the Company to discontinue the use of the "T&D" brand as soon as

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**Exhibit 4.80**

practicable after the Closing Date, including in connection with solicitation materials and other materials relating to Products, with the aim of minimizing any disruption to the business of the Company following the Closing (the "<u>Brand Transition Plan</u>"), and the Parties shall take (and, prior to the Closing, Seller shall cause the Company to take, and from or after the Closing, Buyer shall cause the Company to take) all actions agreed by the Parties in the Brand Transition Plan. Subject to Seller's compliance with the foregoing sentence, and except as otherwise provided in the Brand Transition Plan or otherwise agreed by the Parties, Buyer shall cause the Company to discontinue the use of the "T&D" brand as soon as practicable after the Closing Date.

## Section 6.13 <u>Directors and Officers Liability; Indemnification</u> 
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) From and after the Closing, Buyer shall cause the Company to indemnify, defend and hold harmless all past and present directors, statutory auditors and officers of the Company (the "<u>D&O Indemnified Parties</u>") from and against all Losses incurred in connection with any Action, whether civil, criminal, administrative or investigative, arising out of or pertaining to matters existing or occurring prior to the Closing (including such matters in connection with this Agreement and the other Transaction Documents and, unless the OneIM Non-Closing Event has occurred, the OneIM SPA, and the transactions contemplated hereby and thereby), whether asserted or claimed prior to, at or after the Closing, to the fullest extent permitted by Applicable Law, except in the case of fraud, willful misconduct or gross negligence or violation of Applicable Law committed by such D&O Indemnified Parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) From the Closing Date and for a period of six (6) years thereafter, Buyer shall not cause or permit the Company to amend, modify or otherwise repeal any rights to indemnification and exculpation from liabilities for acts or omissions occurring at or prior to the Closing (and rights for advancement of expenses) to be less favorable as compared to those existing in favor of the D&O Indemnified Parties as provided in their respective Organizational Documents and any indemnification or other agreements of the Company as in effect on the date this Agreement, and all such rights shall survive the Closing and shall continue in full force and effect in accordance with their terms.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The provisions of this <u>Section 6.13</u> are for the sole benefit of Seller, and nothing herein, expressed or implied, is intended or shall be construed to confer upon or give to any D&O Indemnified Party or any other Person other than Seller and their respective permitted successors and assigns, any legal or equitable or other rights or remedies under or by reason of any such provision. Nothing contained herein, express or implied, shall be construed to establish, amend or modify any benefit plan, program, agreement or arrangement. Nothing in this <u>Section 6.13</u> shall create any right in any D&O Indemnified Party to any continued employment with Seller, the Company, Buyer or any of their respective Affiliates or compensation or benefits of any nature or kind whatsoever.

## Section 6.14 <u>Notification</u> 
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Between the date hereof and the Closing Date, each Party shall use commercially reasonable efforts to promptly notify the other Party of the occurrence or non-occurrence of any event that is reasonably likely to result in the failure of any of the conditions set forth in <u>Article 7</u>, as applicable upon having actual Knowledge of any such occurrence or non-occurrence; <u>provided</u>, <u>however</u>, that in each case, such notice shall not be deemed to cure any breach of a representation, warranty, covenant or agreement or any failure to satisfy any condition to the Closing, or to otherwise limit or affect in any way the remedies available

------

**Exhibit 4.80**

hereunder to the Party receiving such notice as set forth in this Agreement, or any of the conditions to the obligations of the Parties; and <u>provided</u>, <u>further</u>, that failure to deliver any notice pursuant to this <u>Section 6.14(a)</u> shall not (i) result in a failure of any condition set forth in <u>Section 7.2(b)</u> (in the case of the failure to deliver such notice by Buyer) or <u>Section 7.3(b)</u> (in the case of the failure to deliver such notice by Seller) or (ii) give rise to any termination right under <u>Section 10.1(d)</u> (in the case of the failure to deliver such notice by Buyer) or <u>Section 10.1(e)</u> (in the case of the failure to deliver such notice by Seller), unless the underlying event or breach would independently result in the failure of such condition or independently give rise to such termination right.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Each Party shall promptly notify the other Party of any Action that shall be instituted or threatened against such Party to restrain, prohibit or otherwise challenge the legality of any transaction contemplated by this Agreement or the other Transaction Documents upon having actual Knowledge of any such Action; <u>provided</u>, <u>however</u>, that in each case, such notice shall not be deemed to cure any breach of a representation, warranty, covenant or agreement or any failure to satisfy any condition to the Closing, or to otherwise limit or affect in any way the remedies available hereunder to the Party receiving such notice as set forth in this Agreement, or any of the conditions to the obligations of the Parties; and <u>provided</u>, <u>further</u>, that failure to deliver any notice pursuant to this <u>Section 6.14(b)</u> shall not (i) result in a failure of any condition set forth in <u>Section 7.2(b)</u> (in the case of the failure to deliver such notice by Buyer) or <u>Section 7.3(b)</u> (in the case of the failure to deliver such notice by Seller) or (ii) give rise to any termination right under <u>Section 10.1(d)</u> (in the case of the failure to deliver such notice by Buyer) or <u>Section 10.1(e)</u> (in the case of the failure to deliver such notice by Seller), unless the underlying event or breach would independently result in the failure of such condition or independently give rise to such termination right.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Each Party shall notify the other Party, to the extent permitted by Applicable Law, of any information that such Party receives (including communications with applicable Governmental Entities) that the final outstanding condition to Closing set forth in <u>Article 7</u> (other than those conditions that by their nature are to be satisfied at the Closing) is reasonably expected to be satisfied or waived, so that the Parties can discuss and identify an Anticipated Closing Date in a manner consistent with the provisions of <u>Section 2.3</u>.

## Section 6.15 <u>Further Assurances</u> 
Without limiting the other provisions hereof, from the date hereof until the Closing, each Party shall, and Seller shall cause the Company to, use commercially reasonable efforts to take such actions as are necessary to expeditiously satisfy the conditions to Closing set forth in <u>Article 7</u>. After the Closing Date, the Parties and their respective Affiliates shall execute and deliver, and shall cause to be executed and delivered, such documents, certificates, agreements and other instruments and shall take, and shall cause to be taken, such further actions as may be reasonably required or requested to carry out the provisions of this Agreement and give effect to the transactions contemplated hereby.

## Section 6.16 <u>Termination of Related Person Arrangements</u> 
At or prior to the Closing, and pursuant to documentation reasonably acceptable to Buyer, Seller shall terminate, or cause to be terminated, all Related Person Arrangements set forth on <u>Section 6.16</u> of the Seller Disclosure Schedule and any other Related Person Arrangements that Seller and Buyer agree in writing to terminate, with no further liability of the Company following the Closing except for liabilities pursuant to arrangements expressly

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**Exhibit 4.80**

permitted or contemplated to continue under this Agreement. Following the date hereof, Seller and Buyer shall, upon Buyer's request, discuss in good faith the potential termination of any remaining Related Person Arrangements (other than the Outsourcing Agreement, which shall be subject to <u>Section 6.18(b)</u>), it being understood that Seller shall not be obligated to effect any such termination unless mutually agreed between the Parties.

## Section 6.17 <u>IFRS Conversion Plan.</u> 
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Buyer agrees that it shall be solely responsible and shall take all reasonable actions for the design, planning, project management and overall implementation of the IFRS Conversion Plan in accordance with the approach, milestones and implementation timeline as set forth therein, including taking, or causing to be taken, any actions necessary to obtain any confirmation or other sign-off from the relevant accounting firm required for, or otherwise necessary to achieve, completion of the IFRS Conversion Plan. Following the date hereof and until the completion of the IFRS Conversion Plan, Buyer shall provide to Seller and the Company sufficiently detailed and actionable instructions, guidance, workplans, specifications and timelines (including clear allocation of responsibilities, dependencies, prerequisites and acceptance criteria) reasonably necessary for Seller and the Company to perform the actions and tasks expressly assigned to them (collectively, the "<u>IFRS Buyer Instructions</u>"). Seller and Company shall not be required to comply with the IFRS Buyer Instructions if the IFRS Buyer Instructions (i) allocate or assign actions or tasks to Seller or the Company that are not reasonably necessary for the implementation of the IFRS Conversion Plan, (ii) assume any resources, capabilities, systems access, data, tooling or personnel other than those already possessed by, available to or readily accessible in the ordinary course by Seller or the Company, or those made available to the Company by Buyer or its Representatives, or (iii) adversely impact the Company's ability to complete the Host Migration Development Plan by the Host Migration Long Stop Date. Any material changes to scope, milestones, approach, implementation timeline or responsibilities under the IFRS Conversion Plan shall be subject to Seller's prior written consent (not to be unreasonably withheld, delayed or conditioned).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Following the date hereof and until the completion of the IFRS Conversion Plan, Seller shall, and shall cause the Company to, use commercially reasonable efforts to perform those actions and tasks that are expressly assigned to Seller or the Company in accordance with the IFRS Buyer Instructions, and otherwise comply and cooperate with the IFRS Buyer Instructions, to the extent practically and reasonably feasible in light of Seller's and the Company's resources, capabilities, systems, ordinary course operations and other applicable constraints. Seller and the Company shall not unreasonably refuse, condition or delay the performance of, or cooperation with respect to, any actions or tasks expressly assigned to Seller or the Company under the IFRS Buyer Instructions, to the extent such IFRS Buyer Instructions comply with <u>Section 6.17(a)</u>. For the avoidance of doubt, Seller and the Company shall have no obligation to determine, design, interpret, supplement, correct or complete the IFRS Conversion Plan or any IFRS Buyer Instructions. Nothing in this <u>Section 6.17</u> shall require Seller or the Company to take any action that would, or would reasonably be expected to, (i) unreasonably and materially interfere with the conduct of any of the businesses or operations of the Company in the ordinary course or (ii) adversely impact the Company's ability to complete the Host Migration Development Plan by the Host Migration Long Stop Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Buyer shall be responsible for, and shall bear the risk of, any deficiencies, errors, omissions, impracticability or incompleteness in the IFRS Conversion Plan

------

**Exhibit 4.80**

or the IFRS Buyer Instructions. Buyer shall make available (directly or through external advisors acting under Buyer's direction) sufficient personnel with appropriate expertise to direct and support the Company's execution of the IFRS Conversion Plan, and Buyer shall remain responsible for all outcomes relating to the IFRS Conversion Plan, subject to Seller's compliance with <u>Section 6.17(b)</u>. To the extent that any delay, failure, rework, deficiency, shortfall or non-achievement of any milestone, timeline or deliverable is caused by or attributable to any delay or failure by Buyer to provide complete IFRS Buyer Instructions, decisions, approvals or resources when required, Seller shall have no Liability for any of the foregoing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) During the period from the date hereof and until the completion of the IFRS Conversion Plan, Buyer and Seller shall hold regular progress update meetings regarding the implementation status of the IFRS Conversion Plan, at least monthly or at such higher frequency as may be reasonably requested by either Party or otherwise agreed between the Parties, and shall discuss in good faith any actions, cooperation or support reasonably necessary to facilitate the smooth and timely implementation of the IFRS Conversion Plan. Each Party shall, and Seller shall cause the Company to, promptly upon the other Party's reasonable request, apprise the other Party of the status and progress of the implementation of the IFRS Conversion Plan or IFRS Buyer Instructions in reasonable detail.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Regardless of whether the Closing occurs or not, Buyer shall be responsible for all of its costs and expenses related to the implementation of the IFRS Conversion Plan and shall reimburse Seller and the Company for their respective costs and expenses reasonably incurred in connection with the implementation of the IFRS Conversion Plan, including reasonable costs and expenses associated with the use of external advisors for purposes of implementing the IFRS Conversion Plan. This <u>Section 6.17(e)</u> is intended to be for the benefit of, and shall be enforceable by, the Company, OneIM and their respective successors and assigns. The reimbursement provided for in this <u>Section 6.17(e)</u> shall not be deemed exclusive of any other rights to which the Company and its successors and assigns are entitled, whether pursuant to law, contract or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Buyer agrees that, notwithstanding anything to the contrary in this Agreement or the other Transaction Documents, no matters or circumstances arising from or in connection with the implementation of, or the cooperation with, the IFRS Conversion Plan shall constitute a breach of any representation or warranty under <u>Article 6</u> or any covenant, obligation or undertaking of Seller in this Agreement or the other Transaction Documents, except for any obligation expressly set forth in this <u>Section 6.17</u> subject to the qualifications thereof, and Buyer shall not be entitled to make any claim against Seller or the Company in respect thereof.

## Section 6.18 <u>Host Migration Development Plan</u> 
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) In order to complete the Host Migration, as promptly as reasonably practicable following the date hereof but in any event prior to the Closing, Seller shall cause the Company to develop the Host Migration Development Plan, and promptly after the completion of the development of the Host Migration Development Plan, shall notify Buyer and deliver a copy thereof; <u>provided</u>, that, Seller shall discuss with Buyer in good faith prior to adopting the Host Migration Development Plan if it intends to materially change the migration methodology, development approach, timeline or estimated total project cost from what had been disclosed in the Disclosed Information (collectively, "<u>Material Host Migration Change</u>", and (1) any selection of vendors other than Accenture Japan Ltd. or its Affiliates as the primary

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**Exhibit 4.80**

development vendor for the Host Migration, (2) any material change in the migration methodology (such as a change from "re-writing method" to "re-hosting method"), and (3) selection of any cloud system other than Azure, AWS or Google Cloud shall be regarded as a Material Host Migration Change). After the adoption of the initial Host Migration Development Plan, neither Seller nor the Company shall be required to obtain consent from Buyer for supplementing, updating, amending or modifying the Host Migration Development Plan, including to comply with any requirements or requests from the JFSA, so long as such supplementation, update, amendment or modification would not (i) be a Material Host Migration Change, or (ii) reasonably be expected to materially increase the cost or prevent the completion of such migration by December 31, 2030 (the "<u>Host Migration Long Stop Date</u>") (it being understood that in the case of (i) or (ii), Buyer's prior written consent shall be required); <u>provided</u>, that Seller shall, and shall cause the Company to, (A) consult with Buyer in good faith in advance of making any supplementation, update, amendment or modification to the Host Migration Development Plan in response to any requirements or requests from the JFSA, (B) provide Buyer with a reasonable summary of any material communications with the JFSA relating to the Host Migration Development Plan, except for any information or materials that constitute Sensitive Information, and (C) use reasonable best efforts to ensure that any such supplementation, update, amendment or modification does not materially deviate from the scope, timeline or key assumptions of the Host Migration Development Plan as initially adopted, except to the extent required by Applicable Law or the JFSA.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Following the Closing, Buyer shall not, and shall not cause the Company to, directly or indirectly, take or omit to take any action, or cause or permit anything to be done, that would reasonably be expected to prevent the completion of the Host Migration contemplated by the Host Migration Development Plan as adopted immediately prior to the Closing, by the Host Migration Long Stop Date, or to delay such completion beyond such date, including by way of any amendment, delay, suspension or abandonment of the Host Migration Development Plan. Notwithstanding the foregoing, (i) following the Host Migration Long Stop Date, Buyer may cause the Company to terminate the basic outsourcing agreement (業務委託基本契約書) dated April 1, 2014 between the Company and T&D Information System Ltd. ("<u>TDS</u>"), including any agreements ancillary thereto (collectively, the "<u>Outsourcing Agreement</u>"), and (ii) prior to the Host Migration Long Stop Date, if the completion of the Host Migration is reasonably expected to delay, Buyer may cause the Company to terminate the Outsourcing Agreement in accordance with its terms, in each case of clauses (i) and (ii), only if all of the following conditions are met: (A) Buyer and the Company have consulted in good faith with Seller and TDS and have mutually agreed with Seller and TDS on a transition plan reasonably designed to ensure the continued operation of the Company's business without material disruption thereto; and (B) in the case of clause (ii), Buyer and the Company have consulted in good faith with the JFSA regarding an alternative arrangement or plan reasonably necessary or appropriate to implement the Host Migration Development Plan. Subject to Buyer's compliance with the foregoing, Seller shall provide reasonably necessary cooperation in connection with the implementation of the Host Migration Development Plan, to the Company and Buyer upon reasonable request by Buyer or the Company. For the purpose of this Agreement, "completion" and other equivalent terms of the Host Migration Development Plan means the state in which the Company's operation is reasonably determined not dependent on the Company's host computer system developed by Hitachi, Ltd. As soon as reasonably practicable after completion of the Host Migration Development Plan, Buyer shall (or shall cause the Company to) notify Seller in writing of such completion, specifying the date on which such completion occurred.

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**Exhibit 4.80**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) If there is any Material Host Migration Change to the initial Host Migration Development Plan or if such change is made subsequently, Seller and Buyer shall promptly discuss in good faith and agree on: (i) any appropriate adjustment to the amount specified in <u>Section 8.10(a)(i)</u> (being ¥2,800,000,000 per annum as of the date of this Agreement), taking into account the expected impact of the Material Host Migration Change, (ii) any appropriate additional cost-sharing or reimbursement arrangements in respect of the increased costs associated with the Host Migration, and (iii) any other appropriate amendments to the framework set forth in <u>Section 6.18</u> or <u>Section 8.10</u> in light of the Material Host Migration Change; <u>provided</u>, <u>however</u>, that after the Closing, this provision shall apply only to any Material Host Migration Change within 12 months from the Closing if: (1)(A) such Material Host Migration Change became reasonably required due to any grounds that existed before the Closing, (B) Seller was aware of such requirement of making Material Host Migration Change before the Closing, and (C) Seller nonetheless did not implement such change by the Closing; or if (2) such Material Host Migration Change became reasonably required for any reason directly attributable to a material breach of the Outsourcing Agreement by TDS or willful misconduct or gross negligence of TDS.

## Section 6.19 <u>Data Processing Arrangements</u> 
Seller shall, and shall cause the Company to, as promptly as reasonably practicable after the date of this Agreement but in any event prior to the Closing, (i) cause InfoDeliver Corporation to cease using 益徳穿梭科技(大連)有限公司 as a subcontractor for the handling of Company's personal data, with no liability of the Company following the Closing as a direct result of such cessation, and (ii) ensure that such subcontracted services are (A) provided by any location of InfoDeliver Corporation within Japan or (B) replaced with services provided by another service provider located in Japan, designated by Seller, acting reasonably; <u>provided</u>, that such replacement service provider shall be subject to Buyer's prior written consent, not to be unreasonably withheld, conditioned or delayed; <u>provided</u>, <u>further</u>, that it shall be presumed to be unreasonable for Buyer to withhold, condition or delay such consent unless Buyer reasonably demonstrates that the engagement of such replacement service provider would (1) result in, or reasonably be expected to result in, a violation of Applicable Laws, (2) raise economic or national security concerns, or (3) be reasonably necessary in light of communications with any Governmental Entity. For the avoidance of doubt, nothing in this Section shall require the termination of the Company's agreements with InfoDeliver Corporation, except to the extent necessary to give effect to the termination of the subcontracting arrangements described in clause (i). Seller shall ensure that, from and after such replacement until the Closing, the Company shall not permit access to personal data of the Company from outside Japan.

# Article 7 <br>CONDITIONS PRECEDENT

## Section 7.1 <u>Conditions to Each Party's Obligations</u> 
The obligations of the Parties to consummate the sale of the Target Shares by Seller to Buyer and the other transactions contemplated to be consummated at the Closing hereby shall be subject to the satisfaction or waiver in writing at or prior to the Closing of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Approvals</u>. All Governmental Approvals required to consummate the

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**Exhibit 4.80**

transactions contemplated by this Agreement or the other Transaction Documents or, unless the OneIM Non-Closing Event has occurred, the OneIM SPA, in each case that are set forth in <u>Schedule 7.1(a)</u> ("<u>Required Governmental Approvals</u>"), shall have been obtained or made, and shall be in full force and effect, and all waiting periods required by Applicable Law with respect thereto shall have expired or been terminated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>No Injunctions, Restraints or Actions</u>. (i) No temporary restraining order, preliminary or permanent injunction or other order or decree issued or threatened by any court of competent jurisdiction, and (ii) no statute, rule or regulation of any Governmental Entity shall be in effect, and no order, decision or other action of any Governmental Entity shall have been issued, in each case preventing the consummation of the transactions contemplated by this Agreement or any other Transaction Document or, unless the OneIM Non-Closing Event has occurred, the OneIM SPA.

## Section 7.2 <u>Conditions to Obligations of Seller</u> 
The obligations of Seller to consummate the sale of the Target Shares by Seller to Buyer and the other transactions contemplated to be consummated at the Closing hereby shall be subject to the satisfaction or waiver in writing at or prior to the Closing of the following additional conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Representations and Warranties of Buyer</u>. The representations and warranties of Buyer set forth in this Agreement other than the Buyer Fundamental Representations (without giving effect to any limitation set forth therein as to materiality or Buyer Material Adverse Effect) shall be true and correct in all material respects as of the Closing Date (except to the extent any such representation or warranty speaks only as of an earlier date, in which event such representation or warranty shall have been true and correct as of such date), except where the failure of all such representations and warranties to be so true and correct has not had, and would not, individually or in the aggregate, reasonably be expected to have, a Buyer Material Adverse Effect. The Buyer Fundamental Representations shall be true and correct in all respects as of the Closing Date, except for *de minimis* inaccuracies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Performance of Obligations of Buyer</u>. Buyer shall have performed and complied in all material respects with all agreements, obligations and covenants required to be performed or complied with by Buyer under this Agreement on or prior to the Closing Date, except where the failure of Buyer to perform or comply with such agreements, obligations or covenants has not had, and would not reasonably be expected to have, a Buyer Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Closing Deliveries of Buyer</u>. Buyer shall have delivered or caused to be delivered to Seller a certificate, duly executed by an executive officer of Buyer, dated as of the Closing Date, certifying as to the satisfaction of the conditions set forth in <u>Section 7.2(a)</u> and <u>Section 7.2(b)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Simultaneous Closing of the OneIM SPA</u>. The Closing (as defined under the OneIM SPA) of the OneIM SPA shall be reasonably expected to occur simultaneously with the Closing, and OneIM has not committed any material breach of, or is not in material default under, the OneIM SPA; <u>provided</u> that, this condition shall not apply if the OneIM Non-Closing Event has occurred.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Shareholders Agreement</u>. The Shareholders Agreement shall have been

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**Exhibit 4.80**

duly entered into by the Parties and remain in full force and effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Strategic Partnership Agreement</u>. The Strategic Partnership Agreement shall have been duly entered into by the parties thereto and remain in full force and effect.

## Section 7.3 <u>Conditions to Obligations of Buyer</u> 
The obligations of Buyer to consummate the sale of the Target Shares by Seller to Buyer and the other transactions contemplated to be consummated at the Closing hereby shall be subject to the satisfaction or waiver in writing at or prior to the Closing of the following additional conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Representations and Warranties of Seller</u>. The representations and warranties of Seller set forth in this Agreement other than the Fundamental Representations (without giving effect to any limitation set forth therein as to materiality including Company Material Adverse Effect) shall be true and correct in all material respects as of the Closing Date (except to the extent any such representation or warranty speaks only as of an earlier date, in which event such representation or warranty shall have been true and correct as of such date), except where the failure of all such representations and warranties to be so true and correct has not had, and would not, individually or in the aggregate, reasonably be expected to have, a Seller Material Adverse Effect or a Company Material Adverse Effect. The Fundamental Representations shall be true and correct in all respects as of the Closing Date, except for *de minimis* inaccuracies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Performance of Obligations of Seller</u>. Seller shall have performed and complied in all material respects with all agreements, obligations and covenants required to be performed or complied with by it (including <u>Section 2.5(a)</u>) under this Agreement on or prior to the Closing Date, except where the failure of Seller to perform or comply with such agreements, obligations or covenants has not had, and would not reasonably be expected to have, a Seller Material Adverse Effect or a Company Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Closing Deliveries of Seller</u>. Seller shall have delivered or caused to be delivered to Buyer a certificate, duly executed by an executive officer of Seller, dated as of the Closing Date, certifying as to the satisfaction of the conditions set forth in <u>Section 7.3(a)</u> and <u>Section 7.3(b)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Simultaneous Closing of the OneIM SPA</u>. The Closing (as defined under the OneIM SPA) of the OneIM SPA shall be reasonably expected to occur simultaneously with the Closing, and OneIM has not committed any material breach of, or is not in material default under, the OneIM SPA; <u>provided</u> that, this condition shall not apply if the OneIM Non-Closing Event has occurred.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Shareholders Agreement</u>. The Shareholders Agreement shall have been duly entered into by the Parties and remain in full force and effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Transitional Services Agreement</u>. The Transitional Services Agreement shall have been duly entered into by Seller and the Company and remain in full force and effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Strategic Partnership Agreement</u>. The Strategic Partnership Agreement shall have been entered into by the parties thereto and be in full force and effect.

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**Exhibit 4.80**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>IFRS Conversion Plan</u>. The IFRS Conversion Plan shall have been implemented to Buyer's reasonable satisfaction, acting as a reasonable buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Third Party Consents</u>. All consents, approvals and waivers of third parties set forth in <u>Schedule 6.5(a)</u> shall have been received, and executed counterparts thereof shall have been delivered to Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) <u>Company Corporate Approval</u>. The Company shall have duly adopted all necessary resolutions of its board of directors approving the transfer of the Target Shares to Buyer and the consummation of the transactions contemplated hereby, and such resolutions shall remain in full force and effect as of the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) <u>Termination of Related Person Arrangements</u>. Seller shall have delivered evidence reasonably satisfactory to Buyer that Seller has performed and complied with <u>Section 6.16</u>.

## Section 7.4 <u>Frustration of Closing Conditions</u> 
Neither Party may rely, as a basis for either not consummating the transactions contemplated hereby or terminating this Agreement, on the failure of any condition set forth in <u>Section 7.1</u>, <u>Section 7.2</u> or <u>Section 7.3</u>, as applicable, to be satisfied if such failure was caused by such Party's breach in any material respect of any provision of this Agreement (including any failure to comply with <u>Section 6.4</u> or <u>Section 6.17</u>).

# Article 8 <br>INDEMNIFICATION

## Section 8.1 <u>Survival</u> 
The covenants to be performed by either Party prior to the Closing that do not apply after the Closing shall terminate at, and not survive, the Closing (for the avoidance of doubt, any rights to indemnification pursuant to <u>Section 8.2</u> and <u>Section 8.3</u> in respect of breach of such covenants before the Closing shall not be limited or otherwise affected by the Closing). The other covenants and agreements contained in this Agreement, including with respect to Leakage, shall survive the Closing until fully performed in accordance with their respective terms. Notwithstanding anything to the contrary, this <u>Section 8.1</u> shall not limit, restrict or prohibit any rights, remedies, claims or causes of action (or recovery in connection therewith) in respect of (a) Fraud against the applicable Party committing such Fraud or (b) <u>Section 2.5(b)</u>.

## Section 8.2 <u>Indemnification by Seller</u> 
Subject to the other terms and conditions of this <u>Article 8</u>, (1) from and after the date hereof or (2) in the case of any inaccuracy in or breach of any representation or warranty under <u>Article 4</u> other than the Fundamental Representations, from and after Closing, Seller shall indemnify Buyer against, and shall hold Buyer harmless from and against, and shall pay and reimburse Buyer for, any and all Losses incurred or sustained by Buyer to the extent arising out of or resulting from, within a proximate cause (*soutou ingakankei*):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) any inaccuracy in or breach of any of the representations or warranties of Seller set forth in <u>Article 4</u> or <u>Article 5</u> or the certificate furnished to Buyer pursuant to Section

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**Exhibit 4.80**

7.3(c); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) any breach or non-fulfillment of any covenant, agreement or obligation to be performed by Seller pursuant to this Agreement;

<u>provided</u>, that for the purposes of this <u>Article 8</u>, (i) 70.2% (if the OneIM Non-Closing Event occurs, 85.1%) of the Losses incurred or sustained by the Company shall be deemed to constitute Losses incurred or sustained by Buyer, and (ii) Buyer shall be entitled, in its sole discretion, to direct that any indemnification payment owed by Seller to Buyer be paid to the Company; <u>provided</u>, <u>further</u>, that if Buyer or the Company has actually received, or becomes entitled to actually receive, any insurance proceeds or other recovery from any Person in respect of any Losses for which Seller is obligated to indemnify Buyer, such amounts (net of any reasonable and documented costs and expenses incurred by Buyer or the Company in recovering such amounts) shall be deducted from the amount of such Losses, and provided that any such amounts actually received after Seller has made payment in respect of such Losses shall be promptly refunded to Seller; and <u>provided</u>, <u>further</u>, that to the extent that Seller has indemnified Buyer in respect of any Losses, Seller shall be subrogated to all rights of Buyer and the Company to recover against any third party in respect thereof.

## Section 8.3 <u>Indemnification by Buyer</u> 
Subject to the other terms and conditions of this <u>Article 8</u>, from and after the date hereof, Buyer shall indemnify Seller against, and shall hold Seller harmless from and against, and shall pay and reimburse Seller for, any and all Losses incurred or sustained by Seller to the extent arising out of or resulting from, within a proximate cause (*soutou ingakankei*):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) any inaccuracy in or breach of any of the representations or warranties of Buyer set forth in <u>Article 3</u> or the certificate furnished to Seller pursuant to <u>Section 7.2(c)</u>; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) any breach or non-fulfillment of any covenant, agreement or obligation to be performed by Buyer pursuant to this Agreement;

<u>provided</u>, that if Seller has actually received, or becomes entitled to actually receive, any insurance proceeds or other recovery from any Person in respect of any Losses for which Buyer is obligated to indemnify Seller, such amounts (net of any reasonable and documented costs and expenses incurred by Seller in recovering such amounts) shall be deducted from the amount of such Losses, and provided that any such amounts actually received after Buyer has made payment in respect of such Losses shall be promptly refunded to Buyer; <u>provided</u>, <u>further</u>, that to the extent that Buyer has indemnified Seller in respect of any Losses, Buyer shall be subrogated to all rights of Seller to recover against any third party in respect thereof.

## Section 8.4 <u>Certain Limitations</u> 
The indemnification provided for in <u>Section 8.2</u> and <u>Section 8.3</u> shall be subject to the following provisions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Seller shall not be liable to Buyer for indemnification under <u>Section 8.2</u> unless and until:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the amount of the Losses for any single claim exceeds 0.1% of the Base Purchase Price (the "<u>De minimis Amount</u>"), and any Losses equal to or below

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**Exhibit 4.80**

the De minimis Amount shall be disregarded and shall not be counted toward the Basket; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the aggregate amount of all Losses for such claims exceeding the De minimis Amount exceeds an amount equal to 1% of the Base Purchase Price (the "<u>Basket</u>"),

in which event Seller shall be required to pay or be liable for all such Losses only for the amount of such Losses in excess of the Basket.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) In addition, the aggregate amount of all Losses for which Seller shall be liable pursuant to <u>Section 8.2</u> shall not exceed an amount equal to 10% of the Base Purchase Price (the "<u>Cap</u>"); provided, however, that (i) the Cap shall not apply to any Losses based upon, arising out of, with respect to or by reason of any inaccuracy in or breach of any Fundamental Representations or any breach or non-fulfillment of any covenant, agreement or obligation, and (ii) the aggregate liability of Seller for such Losses (other than in the case of Fraud) shall not exceed an amount equal to 100% of the Base Purchase Price.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Buyer shall not be liable to Seller for indemnification under <u>Section 8.3</u> unless and until:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the amount of the Losses for any single claim exceeds the De minimis Amount, and any Losses equal to or below the De minimis Amount shall be disregarded and shall not be counted toward the Basket; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the aggregate amount of all Losses for any such claims exceeding the De minimis Amount exceeds the Basket,

in which event Buyer shall be required to pay or be liable for all such Losses only for the amount of such Losses in excess of the Basket.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) In addition, the aggregate amount of all Losses for which Buyer shall be liable pursuant to <u>Section 8.3</u> shall not exceed an amount equal to 100% of the Base Purchase Price.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Notwithstanding the foregoing, the limitations set forth in <u>Section 8.4(a)</u> and <u>Section 8.4(b)</u> shall not apply to claims for Fraud.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Without limiting the generality of the proximate cause limitation set forth in <u>Section 8.2</u>, Seller shall not be liable under this Agreement in respect of any matter to the extent that the same would not have occurred but for:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) any action taken or omitted to be taken pursuant to the requirements of this Agreement or the other Transaction Documents and, unless the OneIM Non-Closing Event has occurred, the OneIM SPA, or otherwise at the written request or written approval of Buyer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the passing of, or any change in, any Applicable Law after the Closing Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) any increase in the rates of Taxes or any imposition of Taxes or any withdrawal of relief from Taxes not actually (or prospectively) in effect at the

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**Exhibit 4.80**

Closing Date; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) any change after the Closing Date of any generally accepted interpretation or application of any Applicable Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) For purposes of this <u>Article 8</u>, notwithstanding any other provision in this Agreement to the contrary, any inaccuracy in or breach of any representation or warranty and the amount of any Loss indemnifiable with respect thereto shall be determined without regard to any Company Material Adverse Effect or other similar material adverse effect qualification contained in or otherwise applicable to such representation or warranty and Buyer's knowledge of any fact, matter or circumstance described in the Excluded Disclosure.

## Section 8.5 <u>Indemnification Procedures</u> 
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Whenever any claim shall arise for indemnification hereunder, the Party making such claim (the "<u>Indemnified Party</u>") shall provide written notice of such claim (a "<u>Claim Notice</u>") to the other Party (the "<u>Indemnifying Party</u>"). The Claim Notice shall specify in reasonable detail the legal and factual basis of the claim together with the then-available evidence thereof and, to the extent then known, an estimate of the amount of the Losses claimed together with the basis for the calculation thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) A Claim Notice must be delivered to the Indemnifying Party from the Indemnified Party:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) in the case of any claims in respect of a breach of any Fundamental Representation: within five (5) years from the Closing Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) in the case of any claims in respect of a breach of the representations and warranties contained in <u>Section 4.21</u> (Taxes): within five (5) years from the Closing Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) in the case of any claims in respect of a breach of any representations and warranties contained herein other than Fundamental Representations and <u>Section 4.21</u> (Taxes): within twelve (12) months from the Closing Date; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) in the case of any claims in respect of a breach of any covenant, agreement or obligation: within twelve (12) months from the Closing Date, other than those which by their terms contemplate performance after the Closing Date.

Neither Seller nor Buyer shall have any obligation to indemnify the other Party pursuant to <u>Section 8.2</u> or <u>Section 8.3</u> in relation to any claim for which a Claim Notice is made after the applicable date set forth in this <u>Section 8.5(b)</u>.

## Section 8.6 <u>Third Party Claim</u> 
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) If either Party (or in the case of Buyer, the Company) becomes subject to, or receives, the filing, demand or notice of, any Action initiated by a third party that may give rise to a claim against the other Party for indemnification under <u>Section 8.2</u> or <u>Section 8.3</u>, such Party (in such capacity, the "<u>Notifying Party</u>") shall promptly notify the other Party (in such capacity, the "<u>Notified Party</u>") of such Action in writing (a "<u>Third Party Claim Notice</u>") identifying the substance and situation of that Third Party Claim in reasonable detail; <u>provided</u>,

------

**Exhibit 4.80**

that failure to give a Third Party Claim Notice pursuant to this <u>Section 8.6(a)</u> shall not relieve the Indemnifying Party except to the extent the Indemnified Party is prejudiced by such failure. The Notified Party, at its own cost and expense and upon written notice to the Notifying Party, may, to the extent permissible under Applicable Law, assume the defense of any such Action with counsel reasonably satisfactory to the Notifying Party. If the Notified Party elects to defend such Action, (i) the Notifying Party shall make available to the Notified Party or its Representatives all records and other materials reasonably required by them for use in contesting such Action and shall reasonably cooperate with the Notified Party in the defense thereof at the cost and expense of the Notified Party (provided, that the Notifying Party shall use commercially reasonable efforts to minimize such costs and expenses), (ii) the Notifying Party shall be entitled to participate in the defense of any such Action, with its counsel and at its own cost and expense, and (iii) the Notified Party shall not make any admission of liability, agreement, settlement or compromise in respect of any Action without the Notifying Party's prior written consent (which consent shall not be unreasonably withheld, delayed or conditioned).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If the Notified Party does not assume the defense of any such Action within 30 days after receipt of the Third Party Claim Notice, the Notifying Party may, but shall not be obligated to, defend against such Action in such manner as it may deem appropriate; provided, that the Notifying Party shall not make any admission of liability, agreement, settlement or compromise in respect of any Action without the Notified Party's prior written consent (which consent shall not be unreasonably withheld, delayed or conditioned). No action taken by the Notifying Party in accordance with such defense and settlement shall relieve the Notified Party of its indemnification obligations herein provided with respect to any Losses resulting therefrom; <u>provided</u>, <u>however</u>, that (i) the Notified Party shall not be liable for any Losses to the extent such Losses are increased by the Notifying Party's failure to take commercially reasonable measures to mitigate such Losses, and (ii) the Notified Party shall not be liable for any Losses to the extent resulting from the Notifying Party's gross negligence or willful misconduct in connection with such defense or settlement.

## Section 8.7 <u>Mitigation</u> 
The Indemnified Party shall use commercially reasonable efforts to take, and cause the Company to use its commercially reasonable efforts to take, commercially reasonable steps to mitigate any Losses upon becoming aware of any event or circumstance that would be reasonably expected to, or does, give rise thereto, including incurring costs only to the minimum extent necessary to remedy the breach that gives rise to such Losses.

## Section 8.8 <u>Exclusive Remedies</u> 
Each Party acknowledges and agrees that following the Closing, the indemnification provisions of this <u>Article 8</u> shall be the sole and exclusive remedies of the Parties with respect to this Agreement; provided that this <u>Section 8.8</u> shall not apply to limit any Leakage claim under <u>Section 2.5(b)</u>, specific performance under <u>Section 11.8</u>, or claims of Fraud.

## Section 8.9 <u>Tax Treatment of Indemnification Payments</u> 
All indemnification payments made under this Agreement (including payments under <u>Section 8.10</u>, if applicable) shall be treated by the Parties as an adjustment to the Purchase Price for Tax purposes, unless otherwise required by Applicable Law.

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**Exhibit 4.80**

## Section 8.10 <u>Special Indemnity by Seller Relating to Host Migration</u> 
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) If the Host Migration Development Plan has not been completed on or before the Host Migration Long Stop Date, Seller shall indemnify Buyer for an amount equal to the product of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) 2.8 billion Japanese yen (¥2,800,000,000) per annum, accruing from the day immediately following such date until the earlier of (x) the Host Migration Completion Date and (y) the date on which the Company terminates the Outsourcing Agreement (the "<u>Outsourcing Agreement Termination Date</u>"); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the Host Migration Indemnified Percentage,

rounded down to the nearest whole Japanese yen (such amount, the "<u>Host Migration Adjustment Amount</u>");

provided, that Seller shall have no obligation to indemnify Buyer under this <u>Section 8.10(a)</u> to the extent such failure or delay (1) is primarily caused by or attributable to any breach by Buyer of <u>Section 6.18(b)</u> or (2) is primarily caused by or attributable to the IFRS Buyer Instructions.

For the purpose of this Agreement, "<u>Host Migration Completion Date</u>" means the date on which completion of the Host Migration Development Plan occurs, as notified by Buyer (or the Company) pursuant to <u>Section 6.18(b)</u> or deemed to have occurred pursuant to <u>Section 8.10(c)</u>, and "<u>Host Migration Indemnified Percentage</u>" means a fraction, the numerator of which is the Target Shares (as defined in this Agreement), and the denominator of which is the sum of (i) the Target Shares (as defined in this Agreement) and (ii) the Target Shares as defined in the OneIM SPA; provided that, upon the occurrence of the OneIM Non-Closing Event, such denominator shall be equal to the Target Shares (as defined in this Agreement).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Unless otherwise agreed in writing between the Parties, Seller shall pay the Host Migration Adjustment Amount to Buyer:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) within ten (10) Business Days after the end of each successive one-year period, the first such period commencing on the day immediately following the Host Migration Long Stop Date, provided that the Host Migration Completion Date or the Outsourcing Agreement Termination Date has not occurred prior to the end of the applicable period; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) within ten (10) Business Days after the earlier of (x) the Host Migration Completion Date and (y) the Outsourcing Agreement Termination Date, in respect of any period of less than one year that is not covered by clause (i), calculated on a pro rata daily basis.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) If Seller reasonably believes that the Host Migration Development Plan has been completed, Seller may deliver a written notice (a "<u>Host Migration Completion Notice</u>") to Buyer specifying the date on which, in Seller's reasonable belief, the Host Migration Development Plan has been completed. Unless Buyer reasonably objects to such notice within 10 Business Days after receipt thereof by giving written notice to Seller, specifying the basis for such objection in reasonable detail, such date shall be deemed to be the Host Migration Completion Date for the purposes of this Agreement. If Buyer delivers a notice

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**Exhibit 4.80**

of objection within the applicable objection period, Seller's obligation to make any payments pursuant to this <u>Section 8.10</u> shall be suspended from the day immediately following the date specified in the Host Migration Completion Notice as the date on which, in Seller's reasonable belief, the Host Migration Development Plan has been completed until the resolution of such dispute.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Notwithstanding anything to the contrary in this Agreement, after the Closing, the indemnification provided under this <u>Section 8.10</u> shall be the sole and exclusive remedy of Buyer and the Company, and Buyer shall not, and shall not cause or permit the Company to, seek any other remedy or claim (whether at law, in equity, in contract, in tort or otherwise), in each case in respect of any failure or delay in the completion of the Host Migration or the Host Migration Development Plan.

# Article 9 <br>TAX MATTERS

## Section 9.1 <u>Cooperation and Exchange of Information</u> 
The Parties shall provide each other with such cooperation and information as either of them or their respective Affiliates may reasonably request of the other in filing any Tax Return, amended Tax Return or claim for Tax Refund, determining a liability for Taxes or a right to a Tax Refund, or participating in or conducting any contest in respect of Taxes (a "<u>Tax Contest</u>"). Such cooperation and information shall include making employees and accountants reasonably available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder and providing copies of relevant Tax Returns or portions thereof, together with accompanying schedules, related work papers and documents relating to rulings or other determinations by any Tax Authority. Buyer shall reasonably promptly notify Seller in writing in the event that the Company receives notice of a Tax Contest with respect to the Company (or Seller, as successor thereof) for any taxable period (or portion thereof) ending on or prior to the Closing Date.

## Section 9.2 <u>Matters Regarding Group Tax Consolidation</u> 
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) If, after the Closing, Buyer causes the Company to file any Tax Return in respect of any period during which the Company was a Consolidated Subsidiary (as defined in Article 2, paragraph (1), item (12-7) of the Corporation Tax Act) of a group with Seller as the Consolidated Parent Company (as defined in Article 2, paragraph (1), item (12-6-7) of the Corporation Tax Act) (such period, the "<u>Consolidated Tax Period</u>", which shall include any Tax Return filed by the Company on a standalone basis as a Consolidated Subsidiary in connection with the Group Tax Consolidation of Seller, with the day immediately preceding the Closing Date treated as the end of the relevant fiscal year), Buyer shall, prior to the filing of any such Tax Return, give Seller written notice of the contents thereof, consult with Seller in good faith with respect to such contents, and consider in good faith Seller's reasonable requests in relation thereto. If the Company has filed any such Tax Return, Buyer shall provide Seller with a copy thereof promptly following such filing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Following the Closing, if the amount of corporation tax and local corporation tax attributable to the Company calculated in accordance with Article 81-18 of the Corporation Tax Act prior to its amendment by Act No. 8 of March 31, 2020 and Article 15 of the Local Corporation Tax Act prior to its amendment by such Act (the "<u>Separate Attributable</u> 

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**Exhibit 4.80**

<u>Tax Amount</u>") with respect to any period during which the Company was a Consolidated Subsidiary of a group with Seller as the Consolidated Parent Company increases or decreases, the Parties agree that settlement or adjustment of such Separate Attributable Tax Amount shall be made between Seller and the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Parties agree that, if, as of the Closing, there exists any unsettled amount of consolidated tax effect amount (*tsusan zei koka gaku*) (as defined in Article 26, paragraph 4 of the Corporation Tax Act) with respect to the Consolidated Tax Period, calculated by a reasonable method, between Seller or any of its Consolidated Subsidiaries (other than the Company), on the one hand, and the Company, on the other hand, settlement thereof shall be made between Seller or any of its Consolidated Subsidiaries (other than the Company), on the one hand, and the Company, on the other hand.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Parties agree that, following the Closing, if any increase or decrease occurs in any consolidated tax effect amount in respect of which settlement has been made with respect to the Group Tax Consolidation Period, settlement with respect to such increase or decrease shall be made between Seller or any of its Consolidated Subsidiaries (other than the Company), on the one hand, and the Company, on the other hand.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Following the Closing, (i) prior to making any filing that would result in an increase in the Separate Attributable Tax Amount, Buyer shall cause the Company to provide Seller with a draft of such filing and other information relating to such increase in the Separate Attributable Tax Amount, and shall cause the Company to make such filing in accordance with Seller's reasonable instructions, and (ii) if the Company (a) makes any other filing relating to any change in the Separate Attributable Tax Amount or (b) files any amended Tax Return or made any claim for correction that would result in a change in any consolidated tax effect amount relating to Seller or any of its Consolidated Subsidiaries (other than the Company), Buyer shall promptly notify Seller of the details thereof. Following the Closing, if (1) Seller files any amended Tax Return or made any claim for correction that would result in an increase in the Separate Attributable Tax Amount, or (2) Seller or any of its Consolidated Subsidiaries (other than the Company) files any amended Tax Return or made any claim for correction that would result in an increase in any consolidated tax effect amount relating to the Company, Seller shall promptly notify Buyer of the details thereof.

# Article 10 <br>TERMINATION PRIOR TO CLOSING

## Section 10.1 <u>Termination of Agreement</u> 
This Agreement may be terminated at any time prior to the Closing:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) by mutual written consent of Seller and Buyer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) by either Seller or Buyer by giving notice to the other Party, if there shall be any Governmental Order that prohibits or restrains any Party from consummating the transactions contemplated hereby, and such Governmental Order shall have become final and non-appealable; <u>provided</u> that, the right to terminate this Agreement pursuant to this <u>Section 10.1(b)</u> shall not be available to a Party if the issuance of such final, non-appealable Governmental Order was primarily due to the failure of such Party to perform any of its obligations under this Agreement;

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**Exhibit 4.80**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) by either Seller or Buyer by giving notice to the other Party, if the Closing has not occurred on or prior to 5:00 p.m., Tokyo time, on April 1, 2028 (the "<u>Outside Time</u>"); <u>provided</u> that, the right to terminate this Agreement pursuant to this <u>Section 10.1(c)</u> shall not be available to a Party if such Party is in material breach of any obligations under this Agreement and such material breach causes, or results in, either (i) the failure to satisfy the conditions to the obligations of such Party set forth in <u>Article 7</u> prior to the Outside Time or (ii) the failure of the Closing to have occurred prior to the Outside Time; <u>provided</u>, <u>further</u>, that the right to terminate this Agreement pursuant to this <u>Section 10.1(c)</u> shall not be available to Buyer if all of the conditions set forth in <u>Article 7</u> have been satisfied or waived (other than those conditions that by their nature are to be satisfied at the Closing), except for the condition set forth in <u>Section 7.3(h)</u>, in which case, the Outside Time shall automatically be extended for an additional 90 days (and, if the condition set forth in <u>Section 7.3(h)</u> is not satisfied or waived by the end of such 90 day period, the Parties shall discuss further extension of the Outside Time in good faith), Buyer is obligated to consummate the Closing once the condition set forth in <u>Section 7.3(h)</u> is satisfied or waived, on the date the Closing is required to occur pursuant to <u>Section 2.3</u>, provided that all of the conditions set forth in <u>Article 7</u> continue to be satisfied or waived on such date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) by Seller (but only so long as it is not in material breach of its obligations under this Agreement) by giving notice to Buyer, if Buyer is in material breach of any provision of this Agreement that would render any condition set forth in <u>Section 7.2(b)</u> not to be satisfied, and such breach is not capable of being cured or is not cured within twenty (20) Business Days after the giving of written notice by Seller to Buyer that Seller intends to terminate this Agreement pursuant to this <u>Section 10.1(d)</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) by Buyer (but only so long as it is not in material breach of its obligations under this Agreement) by giving notice to Seller, if Seller is in material breach of any provision of this Agreement that would render any condition set forth in <u>Section 7.3(b)</u> not to be satisfied, and such breach is not capable of being cured or is not cured within twenty (20) Business Days after the giving of written notice by Buyer to Seller that Buyer intends to terminate this Agreement pursuant to this <u>Section 10.1(e)</u>; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) by either Seller or Buyer by giving notice to the other Party, if (i) any bankruptcy or insolvency proceedings or any other proceedings in or out of court analogous in nature or effect are instituted by or against the other Party, (ii) the other Party is dissolved or liquidated, whether voluntarily or involuntarily, (iii) a receiver or trustee is appointed for all or a substantial part of the assets of the other Party or (iv) the other Party makes an assignment for the benefit of creditors.

## Section 10.2 <u>No Termination after Closing</u> 
After the Closing, neither Party shall have the right to terminate this Agreement, and this Agreement shall not terminate for any reason whatsoever, unless the Parties otherwise agree in writing.

## Section 10.3 <u>Effect of Termination</u> 
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) If this Agreement is terminated pursuant to <u>Section 10.1</u>, this Agreement shall become null and void and of no further force and effect without liability of any Party (or any Representative of such Party) to the other Party to this Agreement; <u>provided</u> that no such termination shall relieve a Party committing Fraud from liability for such Fraud, or relieve a

------

**Exhibit 4.80**

Party from liability for any breach of this Agreement arising prior to the termination of this Agreement. Notwithstanding the foregoing, <u>Section 1.1</u> (as applicable), the last sentence of <u>Section 6.3(a)</u>, <u>Section 6.3(b)</u>, <u>Section 6.17(e)</u>, this <u>Section 10.3</u> and <u>Article 11</u> shall survive termination hereof pursuant to <u>Section 10.1</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If this Agreement is terminated (i) by Seller pursuant to <u>Section 10.1(c)</u> and any of the Required Governmental Approvals listed in item 1 and item 3 of <u>Schedule 7.1(a)</u> ("<u>Buyer Required Governmental Approvals</u>") has not been obtained prior to the Outside Time, (ii) by Seller pursuant to <u>Section 10.1(c)</u>, if the condition set forth in <u>Section 7.3(h)</u> has not been satisfied prior to the Outside Time primarily as a result of Buyer's material breach of <u>Section 6.17(a) or Section 6.17(c) and</u> Seller and the Company complied in all material respects with their obligations under Section 6.17(b), or (iii) by Seller pursuant to <u>Section 10.1(f)</u>, then Buyer shall pay or cause to be paid to Seller a fee in an amount equal to five percent (5%) of the Base Purchase Price (the "<u>Reverse Termination Fee</u>"), in cash, by wire transfer of immediately available funds within ten (10) Business Days following such termination (for which Buyer shall bear the fees and expenses incurred for the wire transfer). Notwithstanding anything to the contrary in this Agreement, the Reverse Termination Fee shall be the sole and exclusive remedy of Seller against Buyer for any damages suffered, any breach of any covenant in this Agreement, or the failure of the transactions contemplated hereby to be consummated, except for Buyer's indemnification obligation pursuant to Section 6.17(e). Upon receipt by Seller of the Reverse Termination Fee, Buyer shall not have any further liability relating to or arising out of this Agreement.

# Article 11 <br>GENERAL PROVISIONS

## Section 11.1 <u>Fees and Expenses</u> 
Except as otherwise expressly provided in this Agreement, whether or not the transactions contemplated by this Agreement and the other Transaction Documents are consummated, each Party shall pay its own costs and expenses incident to preparing for, entering into and carrying out the Transaction Documents and the consummation of the transactions contemplated thereby.

## Section 11.2 <u>Notice</u> 
All notices, requests, claims, demands and other communications under this Agreement shall be in writing and shall be delivered personally, by overnight courier (providing proof of delivery) or by email, to the Parties at the following addresses (or at such other address for a Party as shall be specified by like notice):

if to Seller:

T&D Holdings, Inc.

2-7-1 Nihonbashi

Chuo-ku, Tokyo 103-6031, Japan

Attention: [\*\*\*]

Email: [\*\*\*]

with a copy (which shall not constitute notice) to:

------

**Exhibit 4.80**

Nishimura & Asahi (Gaikokuho Kyodo Jigyo)<br>Otemon Tower<br>1-1-2 Otemachi, Chiyoda-ku<br>Tokyo 100-8124, Japan<br>Attention: [\*\*\*]<br>Email: [\*\*\*]

if to Buyer:

PayPay Corporation

YOTSUYA TOWER 1-6-1, Yotsuya, Shinjuku-ku, Tokyo 160-0004, Japan

Attention: [\*\*\*]

Email: [\*\*\*]

with a copy (which shall not constitute notice) to:

Mori Hamada & Matsumoto<br>16th Floor, Marunouchi Park Building<br>2-6-1 Marunouchi, Chiyoda-ku<br>Tokyo 100-8222, Japan<br>Attention: [\*\*\*]<br>Email: [\*\*\*]

Notice given by personal delivery, overnight courier or email shall be effective upon actual receipt.

## Section 11.3 <u>Interpretation</u> 
When a reference is made in this Agreement to a Section, Exhibit or Schedule, such reference shall be to a Section of, or an Exhibit or Schedule to, this Agreement unless otherwise indicated. All references herein to any agreement, instrument, statute, rule or regulation are to the agreement, instrument, statute, rule or regulation as amended, modified, supplemented or replaced from time to time (and, in the case of statutes, includes any rules, regulations and guidance promulgated under said statutes) and to any section of any statute, rule or regulation including any successor to said section. Disclosure of any item in the Seller Disclosure Schedule, as the case may be, shall not be deemed an admission that such item represents a material item, fact, exception of fact, event or circumstance or that occurrence or non-occurrence of any change or Effect related to such item has had or would, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. The word "or" shall not be exclusive except where the context otherwise requires. Whenever the words "include", "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation." Whenever the singular is used herein, the same shall include the plural, and whenever the plural is used herein, the same shall include the singular, where appropriate. Whenever the word "Japanese yen" or the "¥" sign appear in this Agreement, they shall be construed to mean the lawful currency of Japan. This Agreement has been fully negotiated by the Parties and shall not be construed by any Governmental Entity against either Party by virtue of the fact that such Party was the drafting Party. The words "herein", "hereof", "hereunder", or "hereby" and similar terms are to be deemed to refer to this Agreement as a

------

**Exhibit 4.80**

whole and not to any specific Section. The word "will" shall be construed to have the same meaning and effect as the word "shall." Any term of this Agreement providing that Seller or the Company has "made available", "provided" or "delivered" any document or information to Buyer means that such document or information was uploaded in full to the Electronic Data Room, as applicable, at least five (5) Business Days prior to the date hereof.

## Section 11.4 <u>Entire Agreement; Third Party Beneficiaries</u> 
This Agreement (including all exhibits and schedules hereto), together with the Non-Disclosure Agreement, constitutes the entire agreement, and supersedes all prior agreements, understandings, representations and warranties, both written and oral, between the Parties with respect to the subject matter hereof. Subject to the rights of the Company and OneIM under Section 6.17(e), nothing in this Agreement, express or implied, is intended to confer upon any Person other than the Parties and their respective successors and permitted assigns any rights or remedies.

## Section 11.5 <u>Governing Law; Jurisdiction</u> 
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) This Agreement and any dispute arising out of or relating to this Agreement shall be governed by, and construed in accordance with, the laws of Japan, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) All disputes arising out of or relating to this Agreement, including the existence, validity, interpretation, performance, breach or termination thereof or any dispute regarding non-contractual obligations arising out of or relating to it, shall be subject to the exclusive jurisdiction of the Tokyo District Court of Japan as the court of first instance.

## Section 11.6 <u>Assignment</u> 
Neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned, in whole or in part, by either Party without the prior written consent of the other Party, and any such assignment that is not consented to shall be null and void; <u>provided</u>, that Buyer may, from and after the Closing, assign its rights or claims hereunder to SoftBank Group Corp. or any of its Subsidiaries. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the Parties and their respective successors and assigns.

## Section 11.7 <u>Severability; Amendment; Modification; Waiver</u> 
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Whenever possible, each provision or portion of any provision of this Agreement will be interpreted in such manner as to be effective and valid under Applicable Law, but if any provision or portion of any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any Applicable Law in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or portion of any provision in such jurisdiction, and this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision or portion of any provision had never been contained herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) This Agreement may be amended or a provision hereof waived only by a written instrument signed by each of the Parties in the case of an amendment, or in the case of

------

**Exhibit 4.80**

a waiver, by the Party entitled to make such a waiver.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) No delay on the part of any Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of any Party of any right, power or privilege, nor any single or partial exercise of any such right, power or privilege, preclude any further exercise thereof or the exercise of any other such right, power or privilege.

## Section 11.8 <u>Specific Performance</u> 
The Parties agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the Parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy to which they are entitled at law or in equity.

## Section 11.9 <u>Counterparts</u> 
This Agreement may be executed in counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each of the Parties and delivered to the other Party. Each Party may deliver its signed counterpart of this Agreement to the other Party by means of electronic mail or any other electronic medium utilizing image scan technology, and such delivery will have the same legal effect as hand delivery of an originally executed counterpart.

[*Remainder of page intentionally left blank.*]

------

**Exhibit 4.80**

IN WITNESS WHEREOF, the Parties have caused this Agreement to be signed by their respective duly authorized officers, all as of the date first written above.

**T&D HOLDINGS, INC.**

By: <u>/s/ Masahiko Moriyama</u>

Name: Masahiko Moriyama

Title: Representative Director and President

[*Signature Page to Share Purchase Agreement*]

------

**Exhibit 4.80**

**PAYPAY CORPORATION**

By: <u>/s/ Ichiro Nakayama</u>

Name: Ichiro Nakayama

Title: President and Representative Director

[*Signature Page to Share Purchase Agreement*]

------

**Exhibit 4.80**

**<u>Exhibit A</u><br> IFRS Conversion Plan**

[*\*\*\**]

------

**Exhibit 4.80**

**<u>Exhibit B</u><br>TSA Term Sheet**

[*\*\*\**]

------

**Exhibit 4.80**

**<u>Exhibit C-1</u><br> Form of Tripartite Shareholders Agreement**

[*\*\*\**]

------

**Exhibit 4.80**

**<u>Exhibit C-2</u><br> Form of Bilateral Shareholders Agreement**

[*\*\*\**]

------

**Exhibit 4.80**

**<u>Schedule 6.5(a)</u><br> Third Party Consents**

1. Lease Agreement (貸室賃貸借契約書) dated February 28, 2006, between the Company and Daido Life Insurance Company (大同生命南館).

2. Lease Agreement (貸室賃貸借契約書) dated February 28, 2006, between the Company and Daido Life Insurance Company (福岡大同生命ビル).

------

**Exhibit 4.80**

**<u>Schedule 7.1(a)</u><br> Required Governmental Approvals**

1. the approval from the Commissioner of the JFSA for Buyer to be a Major Shareholder of Insurance Company in respect of Buyer's holding of the Target Shares (which, for the avoidance of doubt, shall be 1,361,600 common shares of the Company, representing 85.1% of the total issued and outstanding common shares of the Company as of the date hereof, if the OneIM Non-Closing Event has occurred) pursuant to Article 271-10 of the Insurance Business Act.

2. the approval from the Commissioner of the JFSA for Seller to be a Major Shareholder of Insurance Company in respect of Seller's holding of the common shares of the Company (other than the Target Shares and the common shares of the Company to be sold by Seller to OneIM under the OneIM SPA) (the "<u>Seller's Holding</u>") pursuant to Article 271-10 of the Insurance Business Act (the "<u>Seller Major Shareholder Approval</u>"); <u>provided</u>, <u>however</u>, that, if confirmation or no objection has been obtained from the JFSA in a manner reasonably satisfactory to both Parties, that the Seller Major Shareholder Approval is not required with respect to the Seller's Holding, the Seller Major Shareholder Approval shall not be included in the Required Governmental Approvals.

3. the antitrust filing with respect to the Share Sale with the Japanese Fair Trade Commission pursuant to Article 10(2) of the Act on Prohibition of Private Monopolization and Maintenance of Fair Trade, and the lapse of the statutory waiting period in connection with the antitrust filing with no further action requested by the Japanese Fair Trade Commission.

------

## Exhibit 8.1

**Exhibit 8.1**

**SUBSIDIARIES OF PAYPAY CORPORATION**

---

| | |
|:---|:---|
| **<u>Name of Subsidiary</u>** | **Jurisdiction of<br>Incorporation or<br><u>Organization</u>** |
| PayPay Bank Corporation | Japan |
| PayPay Card Corporation | Japan |
| PayPay Securities Corporation | Japan |

---

------

## Exhibit 11.1

**Exhibit 11.1**

Rules on Insider Trading

PayPay Corporation

<u>Established</u> <u>25 December, 2019</u> <br> <u>Effective date of last amendment</u> <u>1 June, 2026</u>

------

Of Contents

---

| | |
|:---|:---|
| Chapter 1 General Provisions | 3 |
| &nbsp;&nbsp;&nbsp;Article 1 (Purpose) | 3 |
| &nbsp;&nbsp;&nbsp;Article 2 (Compliance with Laws and Regulations) | 3 |
| &nbsp;&nbsp;&nbsp;Article 3 (Definitions) | 3 |
| &nbsp;&nbsp;&nbsp;Article 4 (Scope of Application) | 4 |
| Chapter 2 Handling of Material Facts, etc. | 4 |
| &nbsp;&nbsp;&nbsp;Article 5 (Prohibition of Communication of Material Facts, etc.) | 4 |
| &nbsp;&nbsp;&nbsp;Article 6 (Measures to be taken when outsourcing) | 4 |
| Chapter 3 Restrictions on Buying and Selling, etc. | 4 |
| &nbsp;&nbsp;&nbsp;Article 7 (Prohibition of Insider Trading and its Duration) | 4 |
| &nbsp;&nbsp;&nbsp;Article 8 (Restriction on Short Selling, etc. of Shares, etc. of Group Companies) | 4 |
| &nbsp;&nbsp;&nbsp;Article 9 (Setting of Prohibited Period for Trading of Group Company Shares, etc.) | 4 |
| &nbsp;&nbsp;&nbsp;Article 10 (Permission of Officers and Employees to Purchase and Sell Shares of Group Companies) | 5 |
| Chapter 4 More | 5 |
| &nbsp;&nbsp;&nbsp;Article 11 (Regulations under Foreign Laws, etc.) | 5 |
| &nbsp;&nbsp;&nbsp;Article 12 (Development of Procedures, etc.) | 5 |
| &nbsp;&nbsp;&nbsp;Article 13 (Education and Training, etc.) | 5 |
| Chapter 5 Miscellaneous Provisions | 5 |
| &nbsp;&nbsp;&nbsp;Article 14(Administrator) | 5 |
| &nbsp;&nbsp;&nbsp;Article 15 (Interpretation) | 5 |
| &nbsp;&nbsp;&nbsp;Article 16 (Revision and Abolition) | 5 |
| Appendix 1 (List of Group Companies) | 6 |
| Appendix 2 (List of Material Facts, etc.) | 6 |

---

------

# Chapter 1 General Provisions

## Article 1 (Purpose)
The purpose of these Rules is to prevent insider trading by establishing a system for the management of the buying and selling of shares and other securities by Employees, etc., in addition to the management of material facts.

## Article 2 (Compliance with Laws and Regulations)
In order to achieve the objectives set forth in the preceding article, Employees, etc. shall comply with the Financial Instruments and Exchange Act and other relevant laws and regulations, as well as these Rules and other rules and regulations governing the performance of their duties. If an Employees, etc. causes damage to the company by violating these related laws and regulations, such Employees, etc. may be required to compensate the Company for all or part of the damages.

## Article 3 (Definitions)
The definitions of terms used in these Rules shall be as set forth in the following items.

&nbsp;&nbsp;&nbsp;&nbsp;(1) "Insider trading" means that an Employee, etc., while having knowledge of undisclosed material facts about the Company, a subsidiary of the Company, a parent company or a subsidiary of a parent company, or another listed company or its parent company or subsidiary in connection with duties, buys or sells shares of such listed company, or otherwise engages in similar transactions.

&nbsp;&nbsp;&nbsp;&nbsp;(2) "Securities, etc." means the following securities

(i)Share certificates, corporate bonds (including corporate bonds issued by mutual entities), bonds with stock acquisition rights, certificates with stock acquisition rights, preferred securities

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Securities, certificates or depository receipts issued by a foreign corporation that fall under (i) above and have these characteristics

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Securities and certificates (covered warrants), depositary receipts, etc., representing options related to (i) and (ii)

&nbsp;&nbsp;&nbsp;&nbsp;(3) "Listed company" means a company whose securities, etc. issued are listed on a financial instruments exchange including the NASDAQ Stock Market and The New York Stock Exchange in the United States, as well as any company that issues securities, etc. that are the subject of investment solicitation by a financial instruments business operator in Japan.

&nbsp;&nbsp;&nbsp;&nbsp;(4) "Group Company Shares, etc." means securities, etc. of the Company, its subsidiaries, parent companies or subsidiaries of parent companies that are listed companies and are designated in Schedule 1.

&nbsp;&nbsp;&nbsp;&nbsp;(5) "Trading, etc." means the buying and selling of securities, etc., other paid transfers or acquisitions (including collateral offerings, short sales, and speculative transactions), or derivative transactions (including hedging transactions), regardless of the name used, for the account of interest.

------

&nbsp;&nbsp;&nbsp;&nbsp;(6) "Employees, etc." means officers, employees, contract employees, continuing employees, part-time employees, temporary employees, and service agreement employees.

&nbsp;&nbsp;&nbsp;&nbsp;(7) "Knowledge with respect to duties" means knowledge by the act of duty itself and by acts closely related to the duties, whether or not during working hours.

&nbsp;&nbsp;&nbsp;&nbsp;(8) "Material Facts, etc." means the information listed in Schedule 2 pertaining to the Company, its subsidiaries, its parent company or subsidiaries of its parent company, and other listed companies or their parent companies or subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;(9) "Public announcement" means when any of the following actions are taken. However, if the company that is the subject of the material information is listed on a securities exchange in the United States, a reasonable waiting period of two (2) trading days must have elapsed after the information is widely distributed in a form available to investors in the U.S. market.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Securities registration statements, securities reports, annual reports, semi-annual reports, quarterly reports, current reports, or any other disclosure documents based on the U.S. Securities Act of 1933 and the U.S. Securities Exchange Act of 1934, containing material facts have been made available for public inspection.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Publication of material facts, etc. to two or more media outlets and more than 12 hours have elapsed since publication.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Notification of material facts, etc. to the financial instruments exchange on which the company is listed, and the financial instruments exchange has made such material facts, etc. available for public inspection by electronic means.

## Article 4 (Scope of Application)
1. These Rules shall apply to all Employees, etc. of the Company.

2. Article 5 and Article 7 shall apply to Employees, etc. who have resigned, retired, transferred, or been unlinked (with external service) until one year has elapsed after their resignation, retirement, transfer, or secondeeship.

3. Executives and employees shall be responsible for ensuring that with respect to the business owner who performs certain outsourced services for our company under a subcontractor contract or similar service contract with our company, such subcontracted employees comply with Articles 5 and 7 of these regulations.

4. Executives and employees shall be responsible for ensuring that their spouses, parents, children, siblings, other family members, or persons living in the same household (including any trusts for which they serve as trustees, trusts in which they have a substantial or financial interest, and other companies or other business entities under them or their control) comply with Articles 5 and 7 of these regulations.

# Chapter 2 Handling of Material Facts, etc.

## Article 5 (Prohibition of Communication of Material Facts, etc.)

------

No Employee, etc. shall communicate, divulge, disclose, etc. any undisclosed material facts, etc. of the Company or its subsidiaries, or of other listed companies or their parent companies or subsidiaries, to any other third party (including family members or persons living with such officer or employee), except as required in connection with respective duties. This prohibition includes recommending transactions or expressing opinions on transactions based on such undisclosed material facts, etc.

## Article 6 (Measures to be taken when outsourcing)
Whenever it is necessary to disclose undisclosed material facts, etc. of the Company, its subsidiaries, its parent company or its parent company's subsidiaries, or other listed companies or their parent companies or subsidiaries to parties outside the Company as required in connection with their respective duties, Employees, etc. shall take necessary measures to prevent unauthorized use and disclosure of undisclosed material facts, etc., including the conclusion of confidentiality agreements and submission of written pledges concerning information management.

# Chapter 3 Restrictions on Buying and Selling, etc.

## Article 7 (Prohibition of Insider Trading and its Duration)
When an Employee, etc. becomes aware of an undisclosed material fact, etc. of the Company, a subsidiary of the Company, a parent company or a subsidiary of a parent company, or another listed company or its parent company or subsidiary, shall not trade in the securities, etc. of such listed company from that time until such material fact, etc. is made public.

## Article 8 (Restriction on Short Selling, etc. of Shares, etc. of Group Companies)
1. In principle, Employees, etc. shall not engage in short selling or options transactions in the shares of Group companies.

2. Employees, etc. shall be prohibited from investing in a special purpose acquisition company (SPAC) to be established by a company specified in Schedule 1 and from investing in a new company following a business combination of such SPAC, as long as they hold an equity interest in such company.

## Article 9 (Setting of Prohibited Period for Trading of Group Company Shares, etc.)
1. Employees, etc. shall not trade in the shares of Group companies during the period during which trading, etc. is prohibited.

2. The period of prohibition of trading, etc. prescribed in the preceding paragraph shall be the period specified in each of the following items for the categories of officers and employees listed in the respective items

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Management (refers to persons in the position of Deputy Division Head or above) and staff who may handle information related to financial results

------

From the 16th day of the last month of each quarter (June, September, December and March) until two (2) trading days have elapsed after the announcement of the financial results for that quarter (or the current fiscal year in the case of the end of the fiscal year)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Employees, etc. other than those in the preceding item

From the first day of the first month of each quarter (April, July, October and January) until two (2) trading days have elapsed since the announcement of financial results for the previous quarter (or the previous fiscal year in the case of the first month of the fiscal year)

## Article 10 (Permission of Officers and Employees to Purchase and Sell Shares of Group Companies)
1. When an Employee, etc. intends to buy or sell shares, etc. of a Group company, shall submit an application at least three business days (excluding the day of application) prior to the day on which employee intends to place the order for such purchase or sale and obtain the necessary approval in advance.

2. The application procedures, etc. prescribed in the preceding paragraph shall be in accordance with the Detailed Regulations on Insider trading.

# Chapter 4 More

## Article 11 (Regulations under Foreign Laws, etc.)
In addition to the Rules, any transactions that are subject to insider trading by foreign laws and regulations shall be handled in accordance with such foreign laws and regulations.

## Article 12 (Development of Procedures, etc.)
In order to appropriately implement the matters stipulated in Chapters 2 and 3 of these Rules, "Detailed Regulations of Insider trading" shall be separately established.

## Article 13 (Education and Training, etc.)
In order to achieve the purpose of these Rules, the Compliance Department shall take necessary initiatives to ensure that all officers and employees are informed of the contents of these Rules.

# Chapter 5 Miscellaneous Provisions

## Article 14(Administrator)
These Rules shall be administered by the Compliance Department of the Risk & Compliance Division.

------

## Article 15 (Interpretation)
In the event that any matter is not provided for in these Rules or any question arises concerning the provisions of these Rules, the interpretation shall be made by the CCO.

## Article 16 (Revision and Abolition)
1. The revision or abolition of these Rules shall be decided by President.

2. The revision or abolition of the Appendix shall be decided by the CCO.

End

------

# Appendix 1 (List of Group Companies)

---

| |
|:---|
| &nbsp;&nbsp;PayPay Corporation |
| &nbsp;&nbsp;SoftBank Group Corp. |
| &nbsp;&nbsp;LY Corporation |
| &nbsp;&nbsp;SoftBank Corp. |

---

# Appendix 2 (List of Material Facts, etc.)
Material facts are important corporate information that may affect the investment decisions of investors, specifically, the matters described below.

(\*Except for those that meet the criteria specified by relevant laws and regulations as having a negligible impact on investors' investment decisions.)

1. Established (existing) fact

The organization that decides on the execution of business of a listed company, etc., wishes to decide to start the following matters itself or preparatory work for the realization of such matters, or such organization decides not to do the matters pertaining to such decision (limited to those that have been publicly announced). The decision by the listed company, etc. to refrain from performing any of the matters listed in above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Public offering for subscribers of shares (including disposal of treasury shares) and subscription rights for new shares

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Decrease in capital

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Reduction of capital or legal reserve

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Acquisition of treasury stock

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) Gratis allotment of shares

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) Stock Split

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) Surplus fund

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8) Stock swap

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9) Share transfer

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10) Merger

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(11) Company Split

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(12) Transfer or acquisition of all or part of a business

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(13) Dissolution (excluding dissolution due to merger)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(14) Commercialization of new products or technologies

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(15) Business Alliance or Termination of Alliance

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(16) Transfer or acquisition of shares of a subsidiary involving a change in the subsidiary

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(17) Transfer or acquisition of fixed assets

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(18) Closure or discontinuance of all or part of a business

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(19) Application for Delisting, etc.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(20) Petition for commencement of bankruptcy, rehabilitation or reorganization proceedings

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(21) Start a new business

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(22) Request for Counteroffer for Public Tender Offer

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(23) Filing pursuant to the provisions of Article 74, Paragraph 5 of the Deposit Insurance Act

2. Fact of occurrence

The following events have occurred to the listed company, etc.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Damage resulting from a disaster or damage incurred in the course of performing business

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Change in Major Shareholders

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Facts causing delisting, etc.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Filing of lawsuit or judgment, etc.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) Petition for Order of Provisional Disposition or Judicial Decision, etc.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) Disposition by Administrative Agency

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) Change in parent company

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8) Petition for Commencement of Bankruptcy Proceedings by Person Other Than Company, etc.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9) Dishonored bills, etc.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10) Petition for Commencement of Bankruptcy Proceedings, etc. Relating to Parent Company

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(11) Possible irrecoverability or delay in collection of credits

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(12) Suspension of transactions with major business partners

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(13) Debt forgiveness and other financial support

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(14) Resource Discovery

3. Financial Results

The following differences in sales, ordinary income or net income, or dividends of the listed company, etc., compared to the most recently announced forecasts, have occurred in the newly calculated forecasts or in the financial results for the current fiscal year

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Sales

The rate of change in the newly calculated forecast or the financial results for the current business year compared to the most recent forecast\* that has been publicly announced is more than 10% up or down.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Ordinary profit

The rate of change of the newly calculated forecast or the financial results for the current business year against the most recently announced forecast\* is 30% or more, or the range of change of the newly calculated forecast or the financial results for the current business year against the most recently

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announced forecast\* is 5% or more of either net assets or capital as of the end of the previous business year, whichever is less. 5% or more of the lesser of the amount of net assets or the amount of capital stock at the end of the previous fiscal year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Net income

The rate of change of the newly calculated forecast or the financial results for the current business year against the most recently announced forecast\* is 30% or more, or the range of change of the newly calculated forecast or the financial results for the current business year against the most recently announced forecast\* is 2.5% or more of either net assets or capital as of the last day of the previous business year, whichever is less. 2.5% or more of the lesser of the amount of net assets or the amount of capital stock at the end of the previous fiscal year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Dividends from surplus

The rate of change of the newly calculated forecast or the financial figures for the current business year (including figures determined without settlement of accounts) against the most recently published forecast (or, if there is no such forecast, the actual figures for the corresponding period of the previous business year in which the announcement was made) is 20% or more. The rate of change of the newly calculated forecast figures or the financial results for the current fiscal year (including figures determined without settlement of accounts) compared to the most recently announced forecast figures (or, if no such forecast figures are available, the results for the corresponding period of the previous business year in which the announcement was made) is 20% or more, either up or down.

4. More Information

Facts related to the operation, business, or assets of the listed company, etc. that have a significant impact on investor's investment decisions, except for the facts listed in 1. through 3. above.

5. Subsidiary Decision Facts

Subsidiaries of a listed company, etc. (including PayPay) The body that decides on the execution of business of a subsidiary of a listed company, etc. (including the Company) wants to decide to start the following matters itself or preparatory work for the realization of such matters, or the body decides not to do the matters pertaining to such decision (limited to those that have been publicly announced), the decision not to carry out any of the matters listed in above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) stock swap

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) share transfer

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) merger

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) company split-up

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) Transfer or Acquisition of Business

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) Dissolution (excluding dissolution due to merger)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) Commercialization of new products or technologies

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8) Business alliance or termination of business alliance

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9) Transfer or acquisition of shares involving a change in a sub-subsidiary

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10) Transfer or acquisition of fixed assets

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(11) Closure or discontinuance of all or part of a business

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(12) Petition for commencement of bankruptcy, rehabilitation or reorganization proceedings

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(13) Start a new business

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(14) Application pursuant to the provisions of Article 74, Paragraph 5 of the Deposit Insurance Act

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(15) Dividends from retained earnings of interlocking subsidiaries

6. Fact of occurrence of subsidiary

A subsidiary of a listed company, etc. (including the Company) The following events have occurred in the listed company, etc.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Damage resulting from a disaster or damage incurred in the course of performing business

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Filing of lawsuit or judgment, etc.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Petition for Order of Provisional Disposition or Judicial Decision, etc.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Disposition by Administrative Agency

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) A petition for bankruptcy, etc. filed by a creditor or any other person other than the Subsidiary

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) Dishonored bills, etc.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) Petition for Commencement of Bankruptcy Proceedings, etc. Pertaining to Sub-subsidiary Company

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8) Possible irrecoverability or delay in collection of credits

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9) Suspension of transactions with major business partners

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10) Debt forgiveness and other financial support

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(11) Resource Discovery

7. Financial Information of Subsidiaries

Subsidiaries of listed companies, etc. (including the Company) (iii) The occurrence of any of the events listed in 3.(1) through (4) above with respect to sales, ordinary profit or net income, or dividends of the listed company, etc. (including the Company), in comparison with the most recently announced forecast, either in the newly calculated forecast or in the settlement of accounts for the current business year.

8. More Information on Subsidiaries

Facts related to the operation or business or property of subsidiaries of listed companies, etc., that have a significant effect on investor's investment decisions, except for the facts listed in 5 through 7 above.

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## Exhibit 12.1

**Exhibit 12.1**

**Certification by the Principal Executive Officer**

**Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002**

I, Ichiro Nakayama, certify that:

1. I have reviewed this Annual Report on Form 20-F of PayPay Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) [reserved];

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the period covered by the Annual Report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: June 30, 2026

By: <u>/s/ Ichiro Nakayama</u>

Name: Ichiro Nakayama

Title: President, Representative Director, CEO and Corporate Officer

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## Exhibit 12.2

**Exhibit 12.2**

**Certification by the Principal Financial Officer**

**Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002**

I, Wataru Kagechika, certify that:

1. I have reviewed this Annual Report on Form 20-F of PayPay Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) [reserved];

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the period covered by the Annual Report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: June 30, 2026

By: <u>/s/ Wataru Kagechika</u>

Name: Wataru Kagechika

Title: Managing Corporate Officer and CFO

------

## Exhibit 13.1

**Exhibit 13.1**

**Certification by the Principal Executive Officer**

**Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**

In connection with the Annual Report of PayPay Corporation (the "Company") on Form 20-F for the fiscal year ended March 31, 2026 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Ichiro Nakayama, President, Representative Director, CEO and Corporate Officer of the Company, certify to the best of my knowledge, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the Report.

Date: June 30, 2026

By: <u>/s/ Ichiro Nakayama</u>

Name: Ichiro Nakayama

Title: President, Representative Director, CEO and Corporate Officer

\* The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.

------

## Exhibit 13.2

**Exhibit 13.2**

**Certification by the Principal Financial Officer**

**Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**

In connection with the Annual Report of PayPay Corporation (the "Company") on Form 20-F for the fiscal year ended March 31, 2026 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Wataru Kagechika, Managing Corporate Officer and CFO of the Company, certify to the best of my knowledge, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the Report.

Date: June 30, 2026

By: <u>/s/ Wataru Kagechika</u>

Name: Wataru Kagechika

Managing Corporate Officer and CFO

\* The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.

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## Exhibit 15.1

**Exhibit 15.1**

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement No. 333- 294226 on Form S-8 of our report dated June 30, 2026, relating to the financial statements of PayPay Corporation appearing in this Annual Report on Form 20-F for the year ended March 31, 2026.

/s/ Deloitte Touche Tohmatsu LLC

Tokyo, Japan

June 30, 2026

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## Exhibit 97.1

**Exhibit 97.1**

**PayPay Corporation**

**<u>Incentive Compensation <br>Clawback Policy</u>**

<u>(Effective as of Pursuant to Nasdaq Rule<br>5608)</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.** **Overview**. The Board of Directors (the "***Board***") of PayPay Corporation (the "***Company***") has adopted this Incentive Compensation Clawback Policy (the "***Policy***") which requires the recoupment of certain incentive-based compensation in accordance with the terms herein and is intended to comply with Listing Rule 5608, as promulgated by The Nasdaq Stock Market LLC, as such rule may be amended from time to time (the "***Listing Rules***"). Capitalized terms not otherwise defined herein shall have the meanings assigned to such terms under Section 12 of this Policy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.** **Interpretation and Administration**. The Remuneration Committee of the Board shall have full authority to interpret and enforce the Policy; provided, however, that the Policy shall be interpreted in a manner consistent with its intent to meet the requirements of the Listing Rules. As further set forth in Section 10 below, this Policy is intended to supplement any other clawback policies and procedures that the Company may have in place from time to time pursuant to other applicable law, plans, policies or agreements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.** **Covered Executives**. The Policy applies to each current and former Executive Officer of the Company who serves or served as an Executive Oﬃcer at any time during a performance period in respect of which Incentive Compensation is Received, to the extent that any portion of such Incentive Compensation is (a) Received by the Executive Officer during the last three completed Fiscal Years or any applicable Transition Period preceding the date that the Company is required to prepare a Restatement (regardless of whether any such Restatement is actually filed) and (b) determined to have included Erroneously Awarded Compensation. For purposes of determining the relevant recovery period referenced in the preceding clause (a), the date that the Company is required to prepare a Restatement under the Policy is the earlier to occur of (i) the date that the Board, a committee of the Board, or the officer or officers of the Company authorized to take such action if Board action is not required, concludes, or reasonably should have concluded, that the Company is required to prepare a Restatement or (ii) the date a court, regulator, or other legally authorized body directs the Company to prepare a Restatement. Executive Officers subject to this Policy pursuant to this Section 3 are referred to herein as "***Covered Executives***."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.** **Recovery of Erroneously Awarded Compensation**. If any Erroneously Awarded Compensation is Received by a Covered Executive, the Company shall reasonably promptly take steps to recover such Erroneously Awarded Compensation in a manner described under Section 5 of this Policy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.** **Forms of Recovery**. The Remuneration Committee shall determine, in its sole discretion and in a manner that effectuates the purpose of the Listing Rules, one or more methods for recovering any Erroneously Awarded Compensation hereunder in accordance with Section 4 above, which may include, without limitation: (a) requiring cash reimbursement; (b) seeking recovery or forfeiture of any gain realized on the vesting, exercise, settlement, sale, transfer or other disposition of any equity-based awards; (c) offsetting the amount to be recouped from any compensation otherwise owed by the Company to the Covered Executive; (d) cancelling outstanding vested or unvested equity awards; or (e) taking any other remedial and recovery action permitted by law, as determined by the Remuneration Committee. To the extent the Covered Executive refuses to pay to the Company an amount equal to the Erroneously Awarded Compensation, the Company shall have the right to sue for repayment and/or enforce the Covered Executive's obligation to make payment through the reduction or

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cancellation of outstanding and future compensation. Any reduction, cancellation or forfeiture of compensation shall be done in compliance with Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.** **No Indemnification**. The Company shall not indemnify any Covered Executive against the loss of any Erroneously Awarded Compensation for which the Remuneration Committee has determined to seek recoupment pursuant to this Policy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.** **Exceptions to the Recovery Requirement**. Notwithstanding anything in this Policy to the contrary, Erroneously Awarded Compensation need not be recovered pursuant to this Policy if the Remuneration Committee (or, if the Remuneration Committee is not composed solely of Independent Directors, a majority of the Independent Directors serving on the Board), determines that recovery would be impracticable as a result of any of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)the direct expense paid to a third party to assist in enforcing the Policy would exceed the amount to be recovered; provided that, before concluding that it would be impracticable to recover any amount of Erroneously Awarded Compensation based on expense of enforcement, the Company must make a reasonable attempt to recover such Erroneously Awarded Compensation, document such reasonable attempt(s) to recover, and provide that documentation to the Exchange;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)recovery would violate home country law where that law was adopted prior to November 28, 2022; provided that, before concluding that it would be impracticable to recover any amount of Erroneously Awarded Compensation based on violation of home country law, the Company must obtain an opinion of home country counsel, acceptable to the Exchange, that recovery would result in such a violation, and must provide such opinion to the Exchange; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)recovery would likely cause an otherwise tax-qualified retirement plan, under which benefits are broadly available to employees of the Company, to fail to meet the requirements of 26 U.S.C. 401(a)(13) or 26 U.S.C. 411(a) and the regulations thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.** **Remuneration Committee Determination Final**. Any determination by the Remuneration Committee with respect to the Policy shall be final, conclusive and binding on all interested parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.** **Amendment**. The Policy may be amended by the Board from time to time, to the extent permitted under the Listing Rules.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.** **Non-Exclusivity**. Nothing in the Policy shall be viewed as limiting the right of the Company or the Board to pursue additional remedies or recoupment under or as required by any similar policy adopted by the Company or under the Company's compensation plans, award agreements, employment agreements or similar agreements or the applicable provisions of any law, rule or regulation which may require or permit recoupment to a greater degree or with respect to additional compensation as compared to this Policy (but without duplication as to any recoupment already made with respect to Erroneously Awarded Compensation pursuant to this Policy). This Policy shall be interpreted in all respects to comply with the Listing Rules.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.** **Successors**. The Policy shall be binding and enforceable against all Covered Executives and their beneficiaries, heirs, executors, administrators or other legal representatives.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12.** **Defined Terms**.

"***Covered Executives***" shall have the meaning set forth in Section 3 of this Policy.

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"***Erroneously Awarded Compensation***" shall mean the amount of Incentive Compensation actually Received that exceeds the amount of Incentive Compensation that otherwise would have been Received had it been determined based on the restated amounts, and computed without regard to any taxes paid. For Incentive Compensation based on stock price or total shareholder return, where the amount of erroneously awarded Incentive Compensation is not subject to mathematical recalculation directly from the information in a Restatement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)The calculation of Erroneously Awarded Compensation shall be based on a reasonable estimate of the effect of the Restatement on the stock price or total shareholder return upon which the Incentive Compensation was Received; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)The Company shall maintain documentation of the determination of that reasonable estimate and provide such documentation to the Exchange.

"***Exchange***" shall mean The Nasdaq Stock Market.

"***Executive Officer***" shall mean the Company's president, principal financial officer, principal accounting officer (or if there is no such accounting officer, the controller), any vice-president of the Company in charge of a principal business unit, division, or function (such as sales, administration, or finance), any other officer who performs a policy-making function, or any other person who performs similar policy-making functions for the Company. Executive officers of the Company's parent(s) or subsidiaries shall be deemed executive officers of the Company if they perform such policy-making functions for the Company.

"***Financial Reporting Measures***" shall mean measures that are determined and presented in accordance with the accounting principles used in preparing the Company's financial statements, and any measures that are derived wholly or in part from such measures, including, without limitation, stock price and total shareholder return (in each case, regardless of whether such measures are presented within the Company's financial statements or included in a filing with the Securities and Exchange Commission).

"***Fiscal Year***" shall mean the Company's fiscal year; provided that a Transition Period between the last day of the Company's previous fiscal year end and the first day of its new fiscal year that comprises a period of nine to 12 months will be deemed a completed fiscal year.

"***Incentive Compensation***" shall mean any compensation (whether cash or equity-based) that is granted, earned, or vested based wholly or in part upon the attainment of a Financial Reporting Measure, and may include, but shall not be limited to, performance bonuses and long-term incentive awards such as stock options, stock appreciation rights, restricted stock, restricted stock units, performance share units or other equity-based awards. For the avoidance of doubt, Incentive Compensation does not include (i) awards that are granted, earned and vested exclusively upon completion of a specified employment period, without any performance condition, and (ii) bonus awards that are discretionary or based on subjective goals or goals unrelated to Financial Reporting Measures. Notwithstanding the foregoing, compensation amounts shall not be considered "Incentive Compensation" for purposes of the Policy unless such compensation is Received (1) while the Company has a class of securities listed on a national securities exchange or a national securities association and (2) on or after October 2, 2023, the effective date of the Listing Rules.

"***Independent Director***" shall mean a director who is determined by the Board to be "independent" for Board or Remuneration Committee membership, as applicable, under the rules of the Exchange, as of any determination date.

"***Listing Rules***" shall have the meaning set forth in Section 1 of this Policy.

------

Incentive Compensation shall be deemed "***Received***" in the Company's fiscal period during which the Financial Reporting Measure specified in the Incentive Compensation award is attained, even if the payment or grant of the Incentive Compensation occurs after the end of that period.

"***Restatement***" shall mean an accounting restatement due to the material noncompliance of the Company with any financial reporting requirement under the securities laws, including any required accounting restatement to correct an error in previously issued financial statements that is material to the Company's previously issued financial statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period.

"***Transition Period***" shall mean any transition period that results from a change in the Company's Fiscal Year within or immediately following the three completed Fiscal Years immediately preceding the Company's requirement to prepare a Restatement.

**Adopted on: Feb. 27, 2026**

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