Proto : Regarding Transfer of Shares of a Subsidiary

(TRANSLATION FOR REFERENCE ONLY) May 10, 2021

To Our Shareholders:

Corporate Name: PROTO CORPORATION

Representative: Kenji Kamiya, President

Securities Code: 4298 (TSE and NSE 1st Section)

Contact: Takehito Suzuki, Executive Officer

Tel: [phone]

Regarding Transfer of Shares of a Subsidiary

At the Board of Directors Meeting held today, PROTO CORPORATION (the Company) resolved to transfer all shares of PROTO MEDICAL CARE (Headquartered in Chiyoda-ku, Tokyo, President: Naoki Fujisawa; hereinafter referred to as "PROTO MEDICAL CARE"), a consolidated subsidiary of the Company, to Benesse Holdings, Inc. (Headquartered in Okayama-shi, Okayama, Representative Director and President, COO: Hitoshi Kobayashi, hereinafter referred to as "Benesse Holdings") (hereinafter referred to as "the Share Transfer"), and a share transfer agreement was concluded. As a result of the Share Transfer, PROTO MEDICAL CARE and its wholly-owned subsidiaries MARUFUJI and SILVER HEART are excluded from the scope of the Company's consolidated subsidiaries.

1．Reasons for the Share Transfer

In the lifestyle-related information segment, the Company started the operation of the nursing care portal site "Oasis Navi" in October 2006. Since then, the Company has been operating advertising-related business, welfare equipment rental/sales business, recruitment agency business and temporary staffing business in the fields of nursing care, welfare and medical care, including the purchase of Medical CUBIC (current PROTO MEDICAL CARE) in October 2009.

Although the business performance of PROTO MEDICAL CARE has been steady since the launch of the business, it has not yet achieved significant results that contribute to the business growth of both segments as the Company pursues synergies between the automobile-related information segment and the lifestyle-related information segment, which are the core businesses of the Group. Against this backdrop, the Company has decided to transfer the shares of PROTO MEDICAL CARE to Benesse Holdings as part of the selection and concentration of its business portfolio.

2．Overview of the target company

(1)	Name	PROTO MEDICAL CARE
(2)	Address	2-4 Kanda Jimbocho, Chiyoda-ku, Tokyo, Japan
(3)	Representative's	President Naoki Fujisawa
position and name
		Advertising-related business, welfare equipment rental/sales business,
(4)	Business fields	recruitment and temporary staffing business in the fields of nursing care,
		welfare and medical care
(5)	Capital	498 million yen
(6)	Year of establishment	December 7, 2004
	Major shareholder and
(7)	shareholding ratio (As	PROTO CORPORATION	100％
of the end of
	December 2020)

1

		Capital	It is a consolidated subsidiary of the Company. 100% owned
		relationships	by PROTO CORPORATION.
	Relationship between		The Company's director concurrently serves as a director of
	Human	the company, and 1 corporate auditor of the Company
(8)	the listed company
relationships	concurrently serves as a corporate auditor. In addition, 1
	and the company
		employees of the Company are seconded.
		Business	The Company has entered into a real estate lease agreement
		relationships	with the company.
(9)	Operating results and financial position of the company and its subsidiaries over the last 3 years
(consolidated)
Closing period	FY March 2018	FY March 2019		FY March 2020
Net assets		1,705 million yen	1,822 million yen		1,894 million yen
Total assets	2,446 million yen	2,450 million yen		2,390 million yen
Net assets per share	152,307.66 yen	162,686.51 yen		169,118.52 yen
Sales		3,879 million yen	3,869 million yen		3,846 million yen
Operating income	324 million yen	220 million yen		177 million yen
Ordinary income	323 million yen	208 million yen		175 million yen
Profit attributable to owners of	197 million yen	116 million yen		72 million yen
parent
Net income per share	17,641.26 yen	10,378.85 yen		6,432.01 yen
Dividend per share		- yen	- yen		- yen

*"(9) Operating results and financial position of the company and its subsidiaries over the last 3 years (consolidated)" indicates the consolidated results of PROTO MEDICAL CARE and its wholly-owned subsidiaries, MARUFUJI and

SILVER HEART.

(1)	Name	MARUFUJI
(2)	Address	2-20-7 Minamikamata, Ota-ku, Tokyo, Japan
(3)	Representative's	President Naoki Fujisawa
position and name
(4)	Business fields	Welfare equipment rental/sales business
(5)	Capital	5 million yen
(6)	Year of establishment	April 14, 1999
	Major shareholder and
(7)	shareholding ratio (As	PROTO MEDICAL CARE	100％
of the end of
	December 2020)
		Capital	It is a consolidated subsidiary of the Company. 100% owned
	Relationship between	relationships	by PROTO MEDICAL CARE.
	Human	The Company's auditor concurrently serves as an auditor of
(8)	the listed company
relationships	the company.
	and the company
	Business	N/A
		relationships
(1)	Name	SILVER HEART
(2)	Address	740-1 Shobucho Sanga, Kuki-city, Saitama, Japan
(3)	Representative's	President Naoki Fujisawa
position and name
(4)	Business fields	Welfare equipment rental/sales business
(5)	Capital	10 million yen
(6)	Year of establishment	October 3, 1994

2

Major shareholder and

(7)

shareholding ratio (As

PROTO MEDICAL CARE

100％

of the end of

December 2020)

Capital

It is a consolidated subsidiary of the Company. 100% owned

Relationship between

relationships

by PROTO MEDICAL CARE.

Human

The Company's auditor concurrently serves as an auditor of

(8)

the listed company

relationships

the company.

and the company

Business

N/A

relationships

3．Overview of the transferee

(1)

Name

Benesse Holdings, Inc.

(2)

Address

3-7-17 Minamigata, Kita-ku,Okayama-shi, Okayama, Japan

(3)

Representative's position and

Representative Director and President, COO Hitoshi Kobayashi

name

(4)

Business fields

Holding company, overall Group management strategy formulation

and management oversight, etc.

(5)

Capital

13,700 million yen (As of March 31, 2020)

(6)

Year of establishment

January 28, 1955

(7)

Net asset

175,339 million yen (FY March 2020)

(8)

Total asset

517,425 million yen (FY March 2020)

Major shareholders and

The Master Trust Bank of Japan ,Ltd.

12.48%

(9)

shareholding ratios (As of

Custody Bank of Japan, Ltd.

9.61%

September 30, 2020)

efu Investment Limited

8.15%

Capital relationships

N/A

Relationship between the listed

Human relationships

N/A

(10)

company and the company

Business relationships

N/A

Status of related parties

N/A

4． Number of shares acquired, acquisition price, and status of shares held before and after acquisition

(1) Number of shares held

before

11,200

(Number of voting rights: 11,200)

transfer

(Ownership ratio: 100%)

(2) Number of shares to be transferred

11,200

(Number of voting rights: 11,200)

(3) Transfer price

4,250 million yen

(4)

Number of shares held

after

0

(Number of voting rights: 0)

transfer

(Ownership ratio: 0%)

5．Schedule

Date of board resolution

May 10, 2021

Date of share transfer agreement

May 10, 2021

Date of stock transfer execution

June 1, 2021 (plan)

3

6．Future outlook

As a result of this share transfer, we expect to record an extraordinary gain in the fiscal year ending March 31, 2022.The impact of this share transfer, including this amount, on our group's business performance is currently under scrutiny and will be disclosed as soon as it is determined.

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