Freee K K : Announcement Regarding Acquisition of Shares of Sight Visit Inc. (Subsidiary Acquisition)

March 10, 2021

Company Name	freee K.K.
Representative	Daisuke Sasaki,
CEO and Representative Director
Code No.	4478, Tokyo Stock Exchange
Mothers
Contact	Sumito Togo, CFO and Director
(TEL. [phone])

Announcement Regarding Acquisition of Shares of Sight Visit Inc. (Subsidiary Acquisition)

freee K.K. (the "Company") hereby announces that the Company resolved at the Board of Directors Meeting held today, to acquire a part of the outstanding shares of Sight Visit Inc. ("Sight Visit") to make Sight Visit the Company's subsidiary (hereinafter referred to as the "Share Acquisition").

• 1. Purpose of the Acquisition

  In line with its corporate mission "Empower Small Businesses to Take Center Stage," the Company has developed and offered services centered around integrated cloud ERP aimed at realization of "a platform that allows anyone with ideas, passion, and skills to easily grow a robust and streamlined business." The Company believes that small businesses have the ability to act quickly and boldly to put ideas into action, positioning them to achieve innovation in various areas, push big businesses to evolve and inspire new movements and ideas in society.

  Under its vision of "becoming a social infrastructure with legal and technological competencies," Sight Visit offers electronic contract signing services for business users and online learning services for law experts. Particularly, its electronic contract service "NINJA SIGN" has grown rapidly since its launch in December 2019, with its unique strengths in UX offering an integrated workflow covering processes including contract signing and management, as well as contract drafting.

  The Share Acquisition will enable freee to enter the rapidly growing electronic contract market and cover the legal and contract operations with the integrated cloud ERP while aiming to establish a scheme for unified and efficient management of accounting, workflow management, HR, and contracting operations. Furthermore, by adding the electronic contract service to the Company's service portfolio, the Company will strengthen its pursuit of realization of a cloud-based B2B platform.

• 2. Method to Make Sight Visit a Subsidiary of the Company

  The Company entered into a share purchase agreement dated today with Mr. Masato Kito, the Representative Director of Sight Visit ("Mr. Kito"), RISO Inc. ("RISO"), and other 3 shareholders of Sight Visit (hereinafter collectively referred to as "Agreeing Shareholders," including Mr. Kito and RISO) to acquire 2,491 shares owned by the Agreeing Shareholders out of 6,633 outstanding shares (as of March 10, 2021) of Sight Visit (hereinafter referred to as the "Share Purchase Agreement"). For the rest 2,153 shares (as of March 10, 2021) , the Company will make efforts to reach an agreement with Sight Visit's shareholders other than the Agreeing Shareholders (hereinafter referred to as "Remaining Shareholders") and enter into a purchase agreement with each of the Remaining Shareholders (hereinafter referred to as an "Additional Share Purchase Agreement(s)") by late March 2021. The Company will make Sight Visit a consolidated subsidiary of the Company (approximately 70% stake to be owned by the Company) by means of the Share Acquisition through the Share Purchase Agreement, Additional Share Purchase Agreements and other necessary procedures.

  Mr. Masato Kito, the current Representative Director of Sight Visit, will continue holding

approximately 30% shares of Sight Visit and serving as the Representative Director after the Share Acquisition.

• 3. A Shareholders' Agreement with Mr. Kito

  The Company and Mr. Kito entered into a shareholders' agreement dated today with regard to the Share Acquisition. The shareholders' agreement stipulates provisions regarding corporate management of Sight Visit and a right of the Company to request Mr. Kito to sell his Sight Visit shares (approximately 30%) within three to five years since the completion of the Share Acquisition, under certain conditions, etc.

• 4. Overview of Sight Visit

Name	Sight Visit Inc.
Address	3-1 Kanda-Nishikicho, Chiyoda-ku, Tokyo
Name and title of representative	Masato Kito, Representative Director
Description of business	Electronic signing and agreement service "NINJA SIGN" Online learning service "Shikaku Square"
Capital	JPY 66,310,000
Date of establishment	April 24, 2013
Shareholders and their shareholding ratio	RISO Inc. (34.68%) Masato Kito (31.51%) Other shareholders (33.81%)
Relationship between the Company and Sight Visit Capital Not applicablerelationship Personnel relationshipNot applicableBusiness relationship The Company uses Sight Visit's electronic contract service. Sight Visit uses the Company's cloud ERP service.
Operating results and financial position over the past 3 years (in JPY MM)
Fiscal year	Fiscal year ended March 31, 2018 (12 months)	Fiscal year ended December 31, 2018 (9 months)	Fiscal year ended December 31, 2019 (12 months)
Net assets	2	-50	-190
Total assets	276	455	859
Net assets per share (JPY)	382.93	-7,616.80	-28,672.34
Net sales	360	383	782
Operating profit (loss)	14	-47	-136
Ordinary profit (loss)	21	-44	-135
Net profit (loss)	18	-53	-139
Net profit (loss) per share (JPY)	2,811.16	-7,999.73	-21,055.54
Dividend per share (JPY)	-	-	-

5. Schedule of the Share Acquisition

(1)Date of resolution of the Share Acquisition by the Board of Directors	March 10, 2021
(2)Signing date of the Share Agreement Purchase (with the Agreeing Shareholders)	March 10, 2021
(3)Signing date of the Additional Purchase Agreement Share (with the Remaining Shareholders)	Late March 2021 (scheduled)
(4)Closing date of share purchase pursuant to the agreements referred to in (2) and (3) above	April 1, 2021 (scheduled)

6. Overview of the Sellers of the Shares

(1) Masato Kito (number of shares to be acquired:101 shares)

(1)Name	Masato Kito
(2)Address	Kita-ku, Tokyo
(3)Relationship between the Company and the individual	There is no particular capital, personnel, and/or business relation between the Company and the individual and his close relatives.

(2) RISO Inc. (number of shares to be acquired: 2,300 shares)

(1)Name	RISO Inc.
(2)Address	Bunkyo-ku, Tokyo
(3)Name and title of representative	Masato Kito, Representative Director
(4)Description of business	Owning, managing, trading and investing of securities
(5)Capital	JPY 500,000
(6)Date of establishment	March 20, 2018
(7)Net assets	JPY 252,000 (as of May 31, 2020)
(8)Total assets	JPY 1,232,000 (as of May 31, 2020)
(9)Major shareholders and their shareholding ratio	Masato Kito (100%)
(10)Relationship between the Company and RISO Inc.
Capital relationship	Not applicable
Personnel relationship	Not applicable
Business relationship	Not applicable
Related relationshipparty	Not applicable

(3) 3 minority shareholders (number of shares to be acquired: 90 shares)

(1)Name	Minority shareholders
(2)Relationship between the Company and the individuals	There is no particular capital, personnel, and/or business relation between the Company and the individuals and their close relatives.

* In addition to (3) above, the Company plans to acquire additional shares from the remaining 24 shareholders by means of the Additional Share Transfer Agreement and other necessary procedures.

7. Number of Shares to Be Acquired and Number of Shares Held Before and After the Acquisition *1. As of March 10, 2021, the Share Acquisition Agreement has been concluded with the Agreeing

(1)Number of shares held before the share transfer	0 shares (Number of voting rights: 0 rights) (Percentage of voting rights: 0.0％)
(2)Number of shares to be acquired	4,644 shares*１ (Number of voting rights: 4,644 rights)
(3)Acquisition costs	Share acquisition cost: JPY 2,756MM*2,3 Consulting fees (approximate):JPY 32MM Total (approximate): JPY2,788MM
(4)Number of shares held after the share transfer	4,644 shares*1 (Number of voting rights: 4,644 rights) (Percentage of voting rights: approximately 70.0%)

Shareholders for acquisition of 2,491 shares (number of voting rights: 2,491 rights; percentage of voting rights: 37.6%). The Company plans to acquire additional 2,153 shares by means of Additional Share Acquisition Agreements to be concluded with the Remaining Shareholders and other necessary procedures by late March 2021. In addition, in the event that the stock options of Sight Visit are exercised, the Company may also acquire shares that are to be issued upon the exercise of such stock options.

*2. Acquisition costs above include share acquisition costs to be acquired through the Additional

Share Acquisition Agreements and other necessary procedures.

*3. A part of the share acquisition costs payable to RISO Inc. will be reserved. The reserved amount will be paid after deduction of costs incurred for any measures taken for the unauthorized use of books at the Shikaku Square business.

8. Outlook

As a result of the Share Acquisition, Sight Visit will be a consolidated subsidiary of the Company. However, the deemed acquisition date applied for consolidation accounting will be June 30, 2021. Therefore, only the balance sheet of Sight Visit will be consolidated for the fiscal year ending June 30, 2021 and the impact of the Share Acquisition on the Company's consolidated financial results for the fiscal year ending June 30, 2021 is expected to be limited.