Solasia Pharma K K : Announcement of the matters to be resolved at the Ordinary General Meeting of Shareholders (March 24, 2022.)

February 21, 2022

To: All Concerned Parties

Company Name: Solasia Pharma K.K.

Representative: Yoshihiro Arai, President & CEO

(Code number: 4597, TSE Mothers Section)

Contact: Toshio Miyashita, CFO, Director

Tel:[phone]

Announcement of the matters to be resolved

at the Ordinary General Meeting of Shareholders (March 24, 2022.)

Solasia Pharma K.K. (hereinafter "the Company") hereby announces that its Board of Directors' meeting today, has resolved to reduce the Company's legal capital surplus, submit a proposal to reduce the amount of its capital stock to the 14th General Meeting of Shareholders of the Company which will be held on March 24, 2022 (hereinafter "the General Meeting"), and subject to such a reduction becoming effective, make an appropriation of surplus as follows. In addition, the Company has resolved to submit partial amendment to the Articles of Incorporation and a proposal of the election of the Directors to the General Meeting as follows.

The reduction in amounts of its capital stock and legal capital surplus, and an appropriation of surplus will not affect the total number of issued shares and will not affect the number of shares owned by shareholders. In addition, these represent an accounting transfer within the net assets category and will not cause changes to net assets.

1. Reduction in amounts of capital stock and legal capital surplus and appropriation of surplus (deficit disposition of retained earnings brought forward)

(1) Purpose

The Company is both a specialty pharma company, specializing in the development and commercialization of products in oncology area, and a type of biotechnology venture company. Clinical trials and other evaluations associated with research and development for pharmaceutical and other related products require a large amount of upfront investment. They also tend to be conducted over medium to long periods of time, requiring equivalent periods for the securing of revenue and the collection of investment capital. As a result of investments made thus far, the Company has successfully developed and brought to market two pipeline products SP-01 and SP-

03. Further, with the scheduled launch of SP-02 in 2022, the Company understands that it is very close to starting to recover investments. However, because the Company has multiple pipeline products in the final stage of development that requires the most amount of funds in the process of pharmaceutical R&D, overall business is still in the investment phase. As of December 31, 2021, the Company reported a retained loss brought forward of 7,529 million yen in Non-consolidated financial condition due to such upfront investment.

With the aforementioned success of the development products and product launches, the Company resolved to implement the reduction in amounts of capital stock and legal capital surplus and appropriation of surplus (deficit disposition of retained earnings brought forward) in order to return financial conditions to a state in which shareholder return policies in the future, such as the distribution of surplus funds as dividends and share buybacks, are possible; and aim for increased flexibility and maneuverability in its capital policy.

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In addition, if the share acquisition rights issued by the Company are exercised by the effective date, the amount of capital stock and the amount of legal capital surplus after the effective date may fluctuate.

(2) Outline of reduction in capital stock

The Company will reduce a portion of its capital stock 2,110,416,906 yen (as of December 31, 2021), and post it to other capital surplus.

Amounts by which capital stock will be reduced:

Capital stock	2,010,416,906 yen
Remaining capital stock	100,000,000 yen

(3) Outline of reduction in legal capital surplus

The Company will reduce a portion of legal capital surplus 5,519,053,413 yen (as of December 31, 2021), and post it to other capital surplus.

Amounts by which legal capital surplus will be reduced:

Legal capital surplus	5,929,867,233 yen
Remaining legal capital surplus	410,813,820 yen

(4) Outline of appropriation of surplus (deficit disposition of retained earnings brought forward)

The Company will reduce all amount of other capital surplus (as increased by both (2) and (3) above) and post it to Retained earnings brought forward in accordance with stipulations contained in Article 452 of the Companies Act.

1. Item of surplus to be reduced and amount by which it will be reduced:

Other capital surplus

7,529,470,319 yen

1. Item of surplus to be increased and amount by which it will be increased:

Retained earnings brought forward	7,529,470,319 yen
When (2) through (4) above become effective, the amounts will be as follows,
					(All amounts are in yen)
	Amount as of		Amount of	Amount after becoming
	end of December, 2021	decrease/increase	effective (planned)
Capital stock		2,110,416,906	2,010,416,906)	100,000,000
Legal capital surplus		5,929,867,233	ሺ5,519,053,413)	410,813,820
Retained earnings	ሺ	7,529,470,319)	ሺ 7,529,470,319	0
brought forward
Treasury stock	(70,874,650)	－	(70,874,650)
Stock acquisition rights		3,404,800	－	3,404,800

*The above table does not include transactions in fiscal year 2022 other than those mentioned in this notice

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(5) Schedule

1. Date of resolution by Board of Directors: February 21, 2022
2. Date of resolution at General Meeting of Shareholders (for reduction in capital stock): March 24, 2022 (planned)
3. Notice to creditors on submission of objections : April 8, 2022 (planned)
4. End of creditors on submission of objections: May 9, 2022 (planned)
5. Effective date: May 10, 2022 (planned)

(6) Outlook

These represent an accounting transfer within the net assets category and will not cause changes to net assets or not affect the total number of issued shares and have only minor impact on the business results of the Company. Furthermore, the Company will not change the consolidated earnings forecast for the fiscal year ending December 31, 2022 announced on February 9, 2022.

2. Partial amendments to the Articles of Incorporation

(1) Purpose for amendments to the Articles of Incorporation

The amended provisions of the proviso to Article 1 of the Supplementary Provisions of the Act for Partially Amending the Companies Act (Act No. 70 of 2019) will take effect on September 1, 2021. Accordingly, to prepare for the implementation of measures for providing reference materials, etc. for the General Meeting of Shareholders in an electronic format, the Company proposes to make the following amendments to the Articles of Incorporation.

1. Article 15, Paragraph 1 in the proposed amendments stipulates that the Company shall take measures to provide the contents of reference materials, etc. for the General Meeting of Shareholders in an electronic format.
2. Article 15, Paragraph 2 in the proposed amendments is a provision for limiting the scope of matters to be included in the written document issued to shareholders who request the issue of such a document.
3. Current Article 15 (Deemed provision of disclosure via the Internet of reference materials, etc. for the General Meeting of Shareholders) will be deleted as it will no longer be necessary.
4. As a result of the abovementioned new provisions and deletions, supplementary provisions regarding the effective date, etc., of the partial amendments will be provided.

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(2) Details of the amendments

The details of the amendments are as follows.

	(Portions to be amended are underlined)
Current Article	Proposed Amended Article
Article 15 (Deemed provision of disclosure via	(Deleted)
the Internet of reference materials, etc. for the
General Meeting of Shareholders)
When convening a General Meeting of
Shareholders, the Company may be
deemed to have provided shareholders
with information that should be disclosed
or included in reference materials for the
General Meeting of shareholders,
business reports, and non-consolidated
and consolidated financial statements, if
the Company has disclosed such
information via the Internet in accordance
with the ministerial ordinance of the
Ministry of Justice.
(Newly established)	Article 15 (Electronic provision measures, etc.)
1. When convening a General Meeting of
	Shareholders, the Company shall take
	measures to provide the contents of the
	reference materials, etc. for the Meeting in
	an electronic format.
	2. Of the contents provided in an electronic
	format, the Company may exclude all or
	part of matters prescribed by the
	ministerial ordinance of the Ministry of
	Justice from the written document to be
	issued to shareholders who have
	requested the issue of such a document
	by the record date for voting rights.
	(Supplementary provisions)
	1. The deletion of the current Article 15 of the
	Articles of Incorporation (Deemed provision
	of disclosure via the Internet of reference
	materials, etc. for the General Meeting of
	Shareholders) and the establishment of
	Article 15 (Electronic provision measures,
	etc. ) in the proposed amendments will take
	effect from September 1,2022, the date of
	enactment ("Enactment Date") of the
	amended provisions of the proviso to Article
	1 of the Supplementary Provisions of the
	Act for Partially Amending the Companies
	Act (Act No. 70 of 2019).
	2. Notwithstanding the preceding paragraph,
	the current Article 15 of the Articles of
	Incorporation shall remain in effect for the
	General Meeting of Shareholders held
	within six months from the Enactment Date.

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3. The supplementary provisions shall be deleted on the later of 1) the date six months after the Enactment Date or 2) three months after the General Meeting of Shareholders referred to in the preceding paragraph.

3. Election of Five (5) Directors

The terms of office of all five (5) incumbent Board Directors of the Company will expire at the conclusion of this Annual General Meeting of Shareholders. Therefore, the Company proposes the election of five (5) Board Directors as reappointment of all Directors.

The candidates for Board Director are as follows:

No.		Name	Current position and responsibility in
	the Company
1	Yoshihiro Arai		President and Chief Executive Officer,
(Reelection)		Board Director
2	Toshio Miyashita		CFO and Head of Administration
(Reelection)		Division, Board Director
3	Stanley Lau		Board Director
(Reelection/Outside/Independent)
4	Norikazu Eiki		Board Director
(Reelection/Outside/Independent)
5	Jiro Mizukawa		Board Director
(Reelection/Outside/Independent)

Disclaimer:

The forward-looking statements, including earnings forecasts, contained in this press release are based on information currently available to the Company and on certain assumptions deemed to be reasonable. Such statements should not be construed as representing commitments on the part of the Company. Please be aware that actual performance may differ for a variety of reasons. Major factors affecting the Company's actual performance include the economic conditions in which it operates, exchange rate fluctuations, the competitive situation and other factors. Information contained in this press release with regard to pharmaceuticals and medical devices (including products under development) is not provided for the purposes of advertising or medical advice.

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