Air Water : Notice of 2026 Annual General Meeting and Meeting Materials

(Mailing date) June 12, 2026

(Start date for electronic provision measures) June 5, 2026 Securities code: 4088

Ryosuke Matsubayashi

President and Representative Director

Grand Green Osaka South Building Park Tower 13F 5-54 Ofukacho, Kita-ku, Osaka-shi, Osaka

To Our Shareholders:

We are pleased to inform you that the 26th Annual General Meeting of Shareholders of AIR WATER INC. (hereinafter referred to as the "Company") will be held as set forth below.

Regarding the convocation of this General Meeting of Shareholders, measures for electronic provision have been taken for the information contained in the Reference Materials for the General Meeting of Shareholders, etc. (Electronic Provision Measures Matters), and the information has been posted on the website below.

• The Company's website https://www.awi.co.jp/en/ir/stock/investor.html

  In addition to the above, the information is also posted on the following website.

• The Tokyo Stock Exchange website (TSE Listed Company Search) https://www2.jpx.co.jp/tseHpFront/JJK020010Action.do?Show=Show

Please access the TSE website above, enter the Company name or securities code "4088" to conduct the search, select "Basic information" and "Documents for public inspection/PR information" in that order, and view the information from "Notice of General Shareholders Meeting /Informational Materials for a General Shareholders Meeting" under "Filed information available for public inspection."

If you do not attend the meeting, you may exercise your voting rights either via postal mail, or via electronic means such as the Internet, in which case we ask that you carefully peruse "Reference Materials for General Meeting of Shareholders," and submit your votes no later than 5:40 p.m. on Friday, June 26, 2026 by following the instructions on pages 7-8 (Japanese version).

1. Date & Time: Monday, June 29, 2026, at 10:00 a.m. (Reception starts at 9:00 a.m.)
2. Venue: 1-1, Kita-nijo-nishi 1-chome, Chuo-ku, Sapporo

   (Banquet Room "TSURU" on the second floor of New Otani Inn Sapporo)

3. Agenda

Reporting matters:

1. Report Concerning the Incidents of Inappropriate Accounting Practices in the Group

2. The Business Report, the Consolidated Financial Statements for the 26th term (For the year ended March 31, 2026), and reports of the audit results on the Consolidated Financial Statements by the Accounting Auditors and the Board of Corporate Auditors.

3. The Non-Consolidated Financial Statements for the 26th term (For the year ended March 31, 2026).

   Note: Please refer to "Notice Concerning the Convening of an Adjourned Session of the 26th Annual General Meeting of Shareholders" on page 3 regarding the treatment of reporting matters 2 and 3.

   Proposals:

   Proposal 1: Election of Eight (8) Directors Proposal 2: Election of Four (4) Corporate Auditors

   • Among Electronic Provision Measures Matters, the following matters are not included in the documents sent to shareholders in accordance with laws and regulations and provisions of the Company's Articles of Incorporation. However, the Corporate Auditors and the Accounting Auditors conduct audits of documents that include the following.

     ・Matters concerning stock acquisition rights, etc. of the Company in the Business Report, systems to ensure the appropriateness of operations, and an overview of the status of operation of systems to ensure the appropriateness of operations

     ・Consolidated Statement of Changes in Equity and Notes to Consolidated Financial Statements in the Consolidated Financial Statements

     ・Non-Consolidated Statement of Changes in Equity and Notes to Non-Consolidated Financial Statements in the Non-Consolidated Financial Statements

   • Should Electronic Provision Measures Matters require revisions, the items before and after revision will be posted on each of the websites indicated above.

Please refer to "Notice Concerning the Convening of an Adjourned Session of the 26th Annual General Meeting of Shareholders" on page 3 for the handling of Electronic Provision Measures Matters for reporting matters 2 and 3.

Of the agenda for the 26th Annual General Meeting of Shareholders (hereinafter referred to as the "Meeting"), the Company plans to report "The Business Report, the Consolidated Financial Statements for the 26th term (For the year ended March 31, 2026), and reports of the audit results on the Consolidated Financial Statements by the Accounting Auditors and the Board of Corporate Auditors" and "The Non-Consolidated Financial Statements for the 26th term (For the year ended March 31, 2026)" (hereinafter referred to collectively as the "Reporting Matters") to shareholders at the Meeting.

However, as the Company announced in "Notice Concerning the Publication of the Investigating Report by the Special Investigation Committee" dated April 3, 2026, and other notices, inappropriate accounting practices were discovered at the Company and several subsidiaries within the Group. As a result, the financial closing procedures and the audit procedures conducted by the Accounting Auditors for the fiscal year ended March 31, 2026, have not yet been completed. Consequently, the Company is unable to present the Reporting Matters at this General Meeting of Shareholders.

Accordingly, the Company plans to hold a separate session of the Meeting (hereinafter referred to as the "Adjourned Session") to present the Reporting Matters. The Company also intends to seek the approval of shareholders on the day of the Meeting for a proposal (hereinafter referred to as the "Proposal") to leave decisions regarding the date, time, and venue of the Adjourned Session to the discretion of the Board of Directors.

Once the Proposal has been approved at the Meeting, the Company intends to send a separate notice to all shareholders regarding the arrangements for the Adjourned Session before convening the Adjourned Session.

The Adjourned Session is part of the Meeting; therefore, the shareholders eligible to attend the Adjourned Session are the same as those eligible to exercise their voting rights at the Meeting.

We deeply and sincerely apologize for the great inconvenience and concern caused to our shareholders.

In July 2025, the Company discovered, through a voluntary review, inappropriate accounting practices (deferral of loss recognition) related to inventories at a consolidated subsidiary. The Company subsequently undertook an internal investigation and, in September 2025, discovered inappropriate accounting treatment regarding inventory, supplies, and other items at several consolidated subsidiaries, as well as in a business division of the Company, and these accounting treatments were also pointed out in the course of audits by the Accounting Auditors.

The Company proceeded to establish the Special Investigating Committee composed of independent external experts in October 2025, and the Management Reform Committee, which includes external experts, in November 2025. These committees implemented a Group-wide investigation and a partial revision of management systems. As stated in "Notice Concerning the Publication of the Investigating Report by the Special Investigation Committee," announced on April 3, 2026, the investigation by the Special Investigating Committee found that inappropriate accounting practices had been conducted within the Group during the period from fiscal 2019 to the first half of fiscal 2025; moreover, that members of top management and senior management had been involved in some of these practices. As a result of these incidents, the Company's stock was designated by the Tokyo Stock Exchange as a Security on Alert, effective May 1, 2026. The Company is currently proceeding with the formulation of an improvement plan. In such cases, the establishment and operational status of internal management systems are examined one year after this designation is applied, as a rule, and a decision is made on whether or not to delist the company, based on the improvements made.

The Company has taken disciplinary action against the relevant parties, including a full or partial reduction of

monthly remuneration for the incumbent Directors and Corporate Auditors. Strict disciplinary action has also been taken against all officers and employees of the Group involved in these incidents.

The former Chairman and Representative Director and the former Director and Executive Vice President have resigned.

The Company sincerely accepts the analysis of causes and recommendations set forth in the Investigation Report, and will implement measures to prevent recurrence with unwavering determination as its highest management priority, making every effort Group-wide to restore public trust.

1. Overview of the investigation by the Special Investigating Committee

   The Special Investigating Committee conducted an investigation with the aims of clarifying the facts relating to the inappropriate accounting practices, checking for the presence of similar incidents and their impact across the entire Group, calculating the financial impact, analyzing the causes, and making recommendations for measures to prevent any future recurrence. The investigation was conducted using methods such as interviews with relevant parties, examination of documents, and digital forensics. The Company received the committee's Investigation Report on March 31, 2026.

2. Main findings of the investigation

   The investigation confirmed multiple instances of inappropriate accounting practices, including the overstatement of inventory (including recording non-existent inventory), deferral of loss recognition related to asset impairment, inventory discrepancies, and other losses, premature revenue recognition, and the overstatement of sales, at the Company and several Group companies.

3. Analysis of causes

   Over a prolonged period, an environment had been formed in which inappropriate accounting practices were likely to go undetected. This was the combined result of multiple causes, including a corporate culture and top-down organizational management that placed the highest priority on achieving performance targets, insufficient development of accounting and administrative functions, inadequate effectiveness of the internal control system, low accounting literacy, and a lack of ethical awareness required of a listed company group.

   *Multiple reasons why the inappropriate accounting practices occurred:

   1. Under a corporate culture that placed the highest priority on achieving performance targets, excessive performance-related pressure was imposed on frontline operations, making it difficult to express opinions or concerns frankly.

   2. The management control systems and rules failed to adequately keep pace with the progress of growth strategies and M&A.

   3. There were issues with how top management and senior management were involved in accounting processes and with the effectiveness of internal controls.

   4. The structure of the business workflow made it difficult to correct the inappropriate accounting practices.

   5. There was insufficient sharing of knowledge and awareness relating to accounting and compliance (accounting literacy), as well as the consciousness and understanding required of a listed company group.

   6. Monitoring by the administrative departments and internal audit department, and oversight by the Board of Directors and the Board of Corporate Auditors, were not functioning adequately.

   7. There were awareness and structural issues concerning responsibility for financial reporting.

4. Measures to prevent recurrence

Based on this analysis of the causes of these incidents, the Company has established recurrence prevention measures centered on four pillars: "Reform of Corporate Culture," "Governance Reform," "Rebuilding of the Management Infrastructure and Internal Control," and "Review of Group-wide Strategy (Business Portfolio)."

As part of the "Corporate Culture Reform" pillar, the Company is working to eradicate improper accounting practices by prioritizing "appropriate conduct" and fostering a corporate culture that places the highest value on compliance. The Company's top management will clearly demonstrate its own commitment to reform, instill a Group-wide mindset that prioritizes compliance through direct dialogue with employees, and revise goal-setting based on actual frontline conditions. At the same time, the Company will ensure psychological safety, improve the effectiveness of the internal whistleblowing systems, and strengthen training in corporate ethics and accounting for officers and employees.

As part of the "Governance Reform" pillar, the Company will prioritize external oversight and advance the strengthening of governance by reinforcing the supervisory function of the Board of Directors and the auditing function of the Board of Corporate Auditors. In January 2026, an Outside Director was appointed as Chairperson of the Board of Directors to enhance the transparency of Board deliberations. Moreover, in April 2026, the composition of the Nomination and Compensation Committee was changed to consist solely of Outside Directors to further enhance the fairness and objectivity of the process for nominating candidates for Director.

As part of the "Rebuilding of the Management Infrastructure and Internal Control" pillar, the Company is working to strengthen its organizational systems to ensure effective management of the expanded Group, in light of the challenges to management and oversight functions that have emerged due to rapid business expansion. In March 2026, the Company appointed a Chief Accounting and Finance Officer, and will engage in the review and monitoring of business processes and subsidiary management to ensure that any issues are addressed promptly.

As part of the "Review of Group-wide Strategy (Business Portfolio)" pillar, the Company will redefine its core competencies and restructure its business portfolio, focusing resources on core businesses and progressively restructuring non-core businesses.

The Company will drive the Group-wide implementation of these four-pillar measures to prevent recurrence, and will make every effort to enhance the transparency and soundness of management and restore public trust.

Please refer to the dedicated page on the Company's website for detailed information, including the incidents of inappropriate accounting practices and measures to prevent recurrence: https://www.awi.co.jp/ja/company/management-reform.html (in Japanese only)