The purpose of our issuing corporate bonds is not because borrowing from banks has become difficult, but rather to diversify our financing sources.

Currently, we are executing borrowings from banks for “working capital” or “M&A funding.”

In raising the latter “M&A funding,” we have been executing “short-term” borrowings limited to our main transaction banks in order to prioritize the speed of deal execution and information management.

Typically, these “short-term” borrowings have a repayment period of about one year, and they are often converted into long-term/permanent debt within that year. However, we proactively utilize corporate bonds to achieve this long-term conversion before the borrowing term matures.

The entire proceeds of the First Bond Issuance were allocated to the long-term/permanent funding conversion related to the equity acquisition of National Entertainment Network, LLC, which completed in November 2024. A portion of the Second Bond Issuance, which was issued in November 2025, is scheduled to be applied toward the long-term/permanent funding conversion for the share acquisition of Player One, a North American amusement arcade operator.

For our company, which has a credit rating of “BBB+,” although the cost of funding through corporate bonds tends to be relatively higher compared to bank borrowings, we deem it acceptable when considering

• The difference from the expected return of M&A, which is the use of funds, and
• The fact that we can develop investor segments that we could not previously access

Furthermore, we believe that if our company’s credit rating improves in the future, it will be possible to reduce our financing costs. In this manner, by utilizing corporate bonds as a financing tool and converting short-term bank borrowings into long-term/permanent funding at an early stage, we will establish a financial structure that enables us to continue transformational growth while maintaining an appropriate level of leverage.