Feedforce : Notice of Acquisition of Shares of FRACTA Inc.(Making it a Subsidiary)

About this update from Feedforce Group Inc.

Disclaimer: This document is an English translation of the original Japanese language document and has been prepared solely for reference purposes. In the event of any discrepancy between this English translation and the original Japanese language document, the original Japanese language document shall prevail in all respects. December 17, 2021 Corporate Name: Feedforce Group Inc. Representative: Koji Tsukada , Representative Director and President (Stock code: 7068 TSE-Mothers) Contact: Shingo Nishiyama , CFO （ TEL. +81-3-5846-7016 ） Notice of Acquisition of Shares of FRACTA Inc.(Making it a Subsidiary) Feedforce Group Inc. (hereinafter, the "Company" or simply "we") hereby announce that we made a resolution to acquire shares of FRACTA Inc. (hereinafter, "FRACTA") and make it a subsidiary at a meeting of the Board of Directors held on December 17, 2021 of which details are as follows: 1. Purposes for acquiring shares With the mission of " Feed a force for good and change." we have established a professional service business that builds data feeds according to individual needs and consigns advertisement distribution to platforms, and a SaaS-type data feed integrated management tool, In addition to the SaaS business, which provides login services using automated advertising tools and social accounts to websites, etc., we are developing DX business that supports digital transformation of companies mainly for e-commerce operators, mainly using Shopify, we are engaged in business activities to realize rich work styles through the creation of services and products that improve. On the other hand, FRACTA has set forth its vision of "Bring your brand to the culture of the future", and with the power of technology and design, we are developing our business as a total branding partner that supports the self-propelled of corporate brands, such as corporate branding strategy formulation, e- commerce site construction support, and creative production. FRACTA is certified as a Shopify Plus Partner and has a proven track record of branding and construction consulting in Shopify. Through the acquisition of the shares, in addition to providing Shopify apps and building e-commerce sites, the Company will provide e-commerce apps and build e-commerce sites, especially to e-commerce operators who are potential customers in the DX business, from branding strategy formulation provided by FRACTA to e-commerce site construction support, creative production, etc. We aim to further accelerate the growth of this business segment by providing one-stop services. As a result of the acquisition of the shares, we acquired 51.25% of FRACTA, and FRACTA became a consolidated subsidiary of the Company, In the business segment, all of FRACTA's businesses are scheduled to belong to the DX business. 2. Method of acquisition We plans to acquire 82 shares of FRACTA's 160 outstanding shares from existing shareholders on December 24, 2021. As a result, the Company will acquire 51.25% of FRACTA's shares, and FRACTA will become a consolidated subsidiary of the Company. 3. Overview of the subsidiary (FRACTA) to be transferred (1) Name FRACTA Inc. (2) Address 22-14,Sakuragaoka-cho,Shibuya-ku, Tokyo (3) Title/name of representative Representative Director , Takanobu Kouno Designing brand strategy , Support for building e-commerce sites (4) Description of Businesses and creative production in line with the brand's strategy , Shopify Consulting , Internet Service Business (5) Capital 48 million yen (6) Date of Establishment November 18, 2013 (7) Major shareholders and Takanobu Kouno 62.5% HARIZURY CO.,LTD. 28.1% percentage of shares Makuake, Inc. 9.4% Capital Not applicable. (8) Relationship between Personnel Not applicable. Feedforce Group Inc. and Business Not applicable. FRACTA Related party status Not applicable. (9) Operating results and financial position of FRACTA for the last three years (Note) Fiscal year end May 2019 May 2020 May 2021 Net assets 14 million yen 57 million yen 109 million yen Total assets 156 million yen 237 million yen 304 million yen Net assets per share 92,370.7 yen 357,419.59 yen 684,736.93 yen Net sales 480 million yen 527 million yen 486 million yen Operating profit 3 million yen 33 million yen 7 million yen Ordinary profit 2 million yen 32 million yen 8 million yen Profit 1 million yen 22 million yen 7 million yen Basic earnings per share 17,387.03 yen 184,610.01 yen 56,042.76 yen Dividend per share 0.00yen 0.00yen 0.00yen (Note) Operating results and financial position of FRACTA are not subject to audit by an auditing firm. 4. Overview of the counterparty regarding the acquisition of shares (1) Name Takanobu Kouno (2) Address Edogawa-ku, Tokyo (3) Relationship of the individual with the Company Capital Not applicable. Personnel Not applicable. Business Not applicable. (1) Name HARIZURY CO.,LTD. (2) Address 3-3-6,Nihonbashi-Honcho,Chuo-ku, Tokyo (3) Relationship between the listed company and the company concerned Capital Not applicable. Personnel Not applicable. Business Not applicable. (1) Name Makuake, Inc. (2) Address 2-16-1, Shibuya, Shibuya-ku, Tokyo (3) Relationship between the listed company and the company concerned Capital Not applicable. Personnel Not applicable. Business Not applicable. 5. Number of shares acquired and status of owned shares before and after the acquisition (1) Shares owned prior to the 0 shares (Number of voting rights : 0) transaction (Voting rights ownership percentage : 0%) (2) Shares acquired 82 shares (Number of voting rights : 82) Share transfer price 615 million yen (Note) (3) Acquisition cost Advisory and other costs (approximation) 4 million yen (Note) Total (approximation) 619 million yen 82 shares (4) Shares owned after change (Number of voting rights : 82) (Voting rights ownership percentage : 51.25%) (Note) In calculating the share acquisition price, due diligence was conducted by a third party organization of the company concerned, and the share value was calculated using the DCF method, and sufficient procedures were taken to verify the validity of the price. 6. Schedule (1) The date of Board of Directors' resolution December 17, 2021 (2) The date of contract execution December 17, 2021 (3) Expected date of share transfer December 24, 2021 (scheduled) 7. Future outlook We are currently examining the impact of this event on the results of the current period and will inform you of any matters that need to be disclosed in the future. (Reference)Consolidated earnings forecasts for the fiscal year ending May 31, 2022 (from June 1, 2021 to May 31, 2022) and Consolidated results for the previous fiscal year Operating Ordinary Profit attributable to Basic Net sales earnings profit profit owners of parent per share Earnings Forecast for Millions of yen Millions of yen Millions of yen Millions of yen Millions of yen the First Half of the Fiscal Year Ending May 31, 2022 1,415 478 474 295 11.39 (Cumulative) Fiscal year ending May 31, 2022 3,047 1,092 1,083 675 25.98 （ Forecast) Reference: Previous year's actual results 2,587 889 874 472 18.88 (FY2021/5) (note) The "Accounting Standard for Revenue Recognition" will be applied from the fiscal year ending May 31, 2022, and the above consolidated financial forecast for the current fiscal year is the figure after the application of the said standard. End

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