Kobayashi Pharmaceutical: Financial Overview for Second Quarter of Fiscal 2024(Fiscal Year Ending December 31, 2024)

Statement Regarding Our Benikoji (Red Yeast Rice)-related Products

We deeply apologize again for the significant concerns and distress felt by our customers, business partners, and all those associated with us, in connection with our benikoji-related products.

We extend our prayers for the souls of those who have tragically passed away, and offer our sincere condolences to their families. We express our hopes for the swift recovery of all those currently hospitalized or undergoing treatment.

Changes in Representative Directors (announced on July 23, 2024)

• Kazumasa Kobayashi (former Chairman and Chief Executive Officer)
  Resigned as Chairman and Chief Executive Officer and Director and assumed the position of Special Advisor on July 23.
• Akihiro Kobayashi (former President and Chief Operating Officer)
  Resigned as President and Chief Operating Officer and assumed the position of Director in charge of compensation on August 8.
• Satoshi Yamane (former Senior Executive Director)
  Assumed the position of President and Chief Operating Officer on August 8.

In consideration of the matters pointed out in the press release dated July 23, 2024, "Summary by

the Board of Directors Based on the Investigation Report of the Fact-Finding Committee," we will make company-wide efforts to work on the following five issues:

1. Apology and compensation to the victims
2. Confirmation of quality and safety and prevention of recurrence
3. Review of corporate philosophy and culture
4. Fundamental reform of management structure
5. Dialogue with employees

In order to further increase awareness of and sensitivity to the need to "put quality and safety first," we will implement the following measures:

• Ensure diverse viewpoints in our decision-making process.
• Eliminate homogeneity.
• Re-establishthe risk management system.

• Strengthen collaboration between the Board of Executive Officers and the Board of Directors.
• Review and reorganize the organization to put quality and safety first.
• Review the role of the Board of Executive Officers.
• Select the chairperson of the Board of Directors from among outside directors.

We will begin offering compensation to customers who have suffered health damage as a result of the intake of our products.

• Applicable products
  Among our products (such as our Beni-koji Choleste-Help) for which we received a recall order from the Osaka City Public Health Center on March 27, 2024, those products that have been confirmed to contain or may possibly contain puberulic acid
• Applicable customers
  Customers for whom a causal relationship is found between the intake of applicable products and renal-related diseases or other symptoms, based on comprehensive consideration of such factors as the details of a physician's medical certificate to be submitted by customers
• Scheduled start date of compensation / contact information Scheduled to start accepting applications from August 19, 2024
  Customer Support Center for Red Yeast Rice-Related Products: 0120-663-272
• • Reception hours: 9:00 a.m. to 9:00 p.m. (including Saturdays, Sundays, and public holidays)

We will provide sincere and appropriate compensation to customers who have suffered health damage as a result of the intake of our products.

• Lost profits caused by will calculate and pay the amount individually in accordance with our prescribed procedures,
  permanent disease based on the standards that are set in reference to past court decisions, etc. and in consideration of the opinions of legal experts, after comprehensively examining the customers' symptoms and other relevant factors.

As announced in a press release today, we have decided to withdraw from the red yeast rice business.

(Reason for withdrawal)

• Since we have caused serious health damage and inconvenience to society through the red yeast rice business, we resolved to withdraw from this business at the Board of Directors meeting held on August 8, 2024.
• Even after the withdrawal, we will continue to take such measures as compensation to the affected customers and business partners and investigation of the causes. In addition, as we believe that it is our mission as a company to identify all problems on the production line for red yeast rice related products and to take measures to prevent recurrence, we will continually implement these efforts.