FinTech Global Incorporated : Notice regarding change in status of affiliate accounted for by equity method (…

UNOFFICIAL TRANSLATION

The official press release is in Japanese.

Company Name:	FinTech Global Incorporated
Representative:	Nobumitsu Tamai, President and CEO
Stock Listing:	Tokyo Stock Exchange Standard Market
Stock Code:	8789
Inquiries:	Takashi Senda, Director,
	Senior Executive Officer
Tel:	03-6456-4600

Notice regarding change in status of affiliate accounted for by equity method

(share transfer) and booking of gain on sales of shares of subsidiaries and associates

Tokyo, July 13, 2023-The Board of Directors at FinTech Global Incorporated (hereafter, "FGI" and "the Company") resolved at its meeting on this date that the FGI consolidated subsidiary Moomin Monogatari Ltd. (hereafter, "Moomin Monogatari") will transfer all shares held in Rights and Brands Japan Co., Ltd. (hereafter, "RBJ"), the FGI affiliate accounted for by the equity method. Details are provided below.

Paralleling this share transfer, RBJ will be removed from FGI's scope of affiliates accounted for by the equity method.

Particulars

1. Background to and purpose of share transfer

With a decline in guest count at Moominvalley Park caused by the prolonged COVID-19 pandemic, Moomin Monogatari has booked losses and, as of March 31, 2023, carried excess liabilities of ¥974 million, heightening the urgency of a radical review of the company's financial status. In addition, for Moominvalley Park to be a more distinctively appealing destination, Moomin Monogatari has to invest in on-site facilities and promote events, campaigns and other crowd-attracting activities, all of which require access to new capital.

Given this situation, FGI converted loan receivables of ¥500 million-extended to Moomin Monogatari to rebuild its financial base-into stock through a debt/equity swap in May 2023. The Company is also considering additional support through a debt/equity swap for trade receivables of about ¥150 million in the current fiscal year. Along with the above, Moomin Monogatari will book ¥671 million in gains from the share transfer on a non-consolidated basis, thereby erasing excess liabilities.

In addition, Moomin Monogatari and Hanno Local Resource Utilization LLC (hereafter, "the SPC"), which leases Moominvalley Park real estate to Moomin Monogatari, along with the latter's lenders have agreed to review the rent that Moomin Monogatari pays to the SPC and are also discussing reevaluation of loan repayment conditions. These measures and responses should enable Moomin Monogatari to realize a huge improvement in cash flow and a big reduction in expenses, leading to a better ordinary profit/loss position.

Furthermore, the ¥942 million lease balance derived through Moomin Monogatari's sale and lease-back of fixed assets when Moominvalley Park opened had dropped to ¥266 million as of March 31, 2023, through steady repayment efforts. The remainder should be paid off in the next fiscal year, leading to improved profitability and cash flow.

Moomin Monogatari aims to rebuild its financial base through the above series of financial allowances. At the same time, the company will use the share transfer to secure a level of capital that supports significant capital spending, emphasizing investments that enhance the appeal of Moominvalley Park and drive its profile higher, which will attract more visitors, while reinforcing the content of events, campaigns and other crowd-drawing activities.

The share transfer will remove the capital relationship between Moomin Monogatari and RBJ, but both companies will continue to work together to broaden the Moomin fan base and create and expand Moomin demand. Roleff Kråkström, managing director at Moomin Characters Oy Ltd, serves as chairman of the board at both Moomin Monogatari and RBJ, and Kumiko Ito serves as representative director and president of both companies. Mr. Kråkström and Ms. Ito will maintain these appointments even after the share transfer to ensure that the collaborative structure remains intact.

2. Outline of consolidated subsidiary implementing share transfer

(1)	Name	Moomin Monogatari Ltd.
(2)	Address	327-6, Oaza Miyazawa, Hanno, Saitama Prefecture
(3)	Name and title of	Kumiko Ito, President and Representative Director
representative
(4)	Business activities	Theme park operation
(5)	Paid-in capital	¥50 million
(6)	Date of establishment	November 11, 2013
	Major shareholders
(7)	and shareholding	FGI	77.0% (as of June 30, 2023)
	ratios

3. Outline of affiliate accounted for by equity method undergoing change in status

(1)	Name	Rights and Brands Japan Co., Ltd.
(2)	Address	Meguro Central Square, 15th Floor, 3-1-1, Kamiosaki, Shinagawa-ku,
Tokyo
(3)	Name and title of	Kumiko Ito, President and Representative Director
representative
(4)	Business activities	Moomin licensing in Japan, distribution of animated TV series
"Moominvalley"
(5)	Paid-in capital	¥45 million
(6)	Date of establishment	March 16, 2018
	Major shareholders
(7)	and shareholding	Moomin Monogatari, Ltd.	42.3％
	ratios

4. Outline of counterparty to share transfer

(1)	Name	Matsuya Co., Ltd.
(2)	Address	3-6-1 Ginza, Chuo-ku, Tokyo
(3)	Name and title of	Takehiko Furuya, Representative Director, President and Executive
representative	Operating Officer
(4)	Business activities	Department store operations

5. Number of shares transferred and shareholding status after transfer

(1)	Number of shares before change	178 shares (number of voting rights: 178)
(percentage of voting rights held: 42.3%)
(2)	Number of shares transferred	178 shares (number of voting rights: 178)
(3)	Number of shares after change	- shares (number of voting rights: -)
(percentage of voting rights held: -)

Note: The transfer price has not been disclosed due to an obligation of confidentiality among the parties involved.

6. Schedule
(1)	Decision by FGI Board of Directors
	Decision by Moomin Monogatari	July 13, 2023
	Board of Directors
(2)	Signing of share transfer agreement	July 13, 2023
(3)	Execution of share transfer	July 14, 2023 (planned)

7. Outlook

Through this share transfer, FGI expects to book ¥390 million in gain on sales of shares of subsidiaries and associates under extraordinary profit. For an update on the consolidated performance forecast for fiscal 2023, ending September 30, 2023, please look at "Notice regarding changes to fiscal 2023 consolidated performance forecast," released today.

END