Notice regarding changes in consolidated subsidiaries (stock transfer), recording of extraordinary profits, and revisions to business forecasts

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At the board of directors meeting held today, the Company announced that it would transfer the shares held by the Company of Fontworks, Inc. (hereinafter referred to as "Fontworks"), a consolidated subsidiary of the Company, to Monotype Co., Ltd. (Headquarters: Chiyoda-ku, Tokyo, Japan) as follows. (hereinafter referred to as "Monotype Japan Corporation") (hereinafter referred to as "Share Transfer"), and intangible fixed assets related to Fontworks' business to Monotype Imaging Inc. (Headquarters: Massachusetts, USA, hereinafter referred to as "Monotype U.S. Headquarters"). We would like to inform you that we have passed a resolution regarding the transfer (hereinafter referred to as the "Asset Transfer" and collectively referred to as the "Transfer" together with the Share Transfer). As a result, Fontworks will no longer be a consolidated subsidiary of our company.
In addition, in line with the above, we plan to record extraordinary profits in the second quarter of the fiscal year ending March 2024. We would like to inform you that the consolidated business forecast for the period from March 31, 2024) has been revised as follows.

Record

I. Regarding the recording of extraordinary profits and revisions to business forecast figures

1. Regarding recording of extraordinary profits

As a result of this transfer, we plan to record 6,200 million yen (approximately) as a gain on the sale of subsidiary stocks and a gain on the transfer of intangible fixed assets as extraordinary income in the second quarter of the fiscal year ending March 2024.

2. Regarding revisions to full-year consolidated earnings forecasts

(1) Revision of consolidated performance forecast figures for the full year ending March 2024 (April 1, 2023 to March 31, 2024)

(2) Reasons for revision of earnings forecasts

Regarding the consolidated business forecast for the fiscal year ending March 2024 announced on April 27, 2023, due to Fontworks being removed from the scope of consolidation, business results after October 2023 are no longer expected, and due to this transfer. Due to the impact of extraordinary profits that are scheduled to be recorded, the above revisions have been made. Furthermore, we are continuing to closely examine future trends on the business front.

*The above forecasts were created based on information available as of the date of publication of this material, and actual results may differ from forecasts due to various factors.

II. Regarding changes in consolidated subsidiaries (stock transfer) and transfer of intangible fixed assets

1. Reason for this transfer

Our group's management policy is to "grow significantly," and in June 2013 we consolidated Fontworks, which plans, develops, and sells digital fonts (typefaces), as well as provides software development, technical services, OEM, etc. It became a subsidiary. Fontworks has contributed to the expansion of our group's business in the e-commerce field, but business growth through synergy with our company in the digital font business and e-commerce field has run its course, and our group's strategy is to focus on cloud security. We are shifting our focus to
Under these circumstances, we decided that business operations under Monotype's U.S. headquarters and Monotype Japanese subsidiary would be beneficial for both sides, providing an environment in which Fontworks could pursue business synergies, including further growth and global expansion, and decided on this project. We have agreed to the transfer.
The shares of Fontworks held by our company will be transferred to Monotype's Japanese corporation, and some of the intangible fixed assets such as patents and trademarks related to Fontworks' business will be transferred to Monotype's U.S. headquarters.

2. Overview of the subsidiary to be transferred (Fontworks, Inc.)

3. Overview of the recipient of this stock transfer

4. Overview of the party to whom the Assets will be transferred

5. Number of shares to be transferred, transfer price, and status of owned shares before and after transfer

• * Regarding the transfer price of shares and the transfer price of intangible fixed assets, we will refrain from disclosing them based on the confidentiality obligation in the transfer agreement. The decision was made through negotiations.

6. schedule

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• *The company names, product names, and service names mentioned in this release are trademarks or registered trademarks of our company or each company or organization.
• *The contents, service/product prices, specifications, contact information, and other information published in the press release are current at the time of announcement. Thereafter, the information may be subject to change without prior notice. In addition, the plans, goals, etc. in press releases are subject to various risks and uncertainties, and actual results may differ from expectations. Please note.