Notice concerning Completion of Payment for Issuance of Preferred Shares through Third-Party Allotment and Coming into Effect of Reduction of Amounts of Capital and Capital ReservesMar. 6, 2019

Toyo Engineering Corporation (hereafter “TOYO”) hereby announces that, as of today, the payment for the issuance of the Class A preferred shares, which was announced in the “Notice concerning Issuance of Preferred Shares through Third-Party Allotment, Partial Amendments to the Articles of Incorporation, Reduction of Amounts of Capital and Capital Reserves” dated November 28, 2018(*), has been completed. A member from Integral Corporation is inaugurated as Outside Director in accordance with the resolution of the extraordinary meeting of general shareholders held on February 12, 2019. TOYO will effectively use the fund paid as above for enhancing its corporate value by utilizing knowledge and strength of Integral Corporation.

In addition, TOYO also announces that, with the issuance, the reduction of amounts of capital and capital reserves, which were announced in the above press release, have come into effect.

(*) That announcement was made in Japanese only.

I. Issuance of Class A Preferred Shares
1. Outlines of Issuance of Class A Preferred Shares

(1) Payment period From February 13, 2019 to March 29, 2019
(2) Number of shares to be newly issued 20,270,300 shares
(3) Amount to be paid in 740 yen per share
(4) Total amount to be paid in 15,000,022,000 yen
(5) Capital and capital reserves to be increased Capital:7,500,011,000 yen (370 yen per share)
Capital reserves:7,500,011,000 yen (370 yen per share)
(6) Method of offering or allotment (Allottees) Third-party allotment
Integral Team Limited Partnership:17,576,600 shares
Innovation Alpha Team L.P.:2,693,700 shares

2. Changes in Total Number of Issued Shares and Amounts of Capital as a result of Third-Party Allotment

Total number of issued Common shares Total number of issued
Class A preferred shares
Amount of Capital (Note)
Prior to issuance 38,558,507 shares 0 shares 18,198,978,851 yen
After issuance 38,558,507 shares 20,270,300 shares 25,698,989,851 yen
(Note) As indicated belowⅡ., although the reduction of amounts of stated capital has come into effect, the amount of capital after the issuance as indicated above is the amount prior to the reduction of amounts of capital come into effect.

II. Reduction of amounts of Capital and Capital Reserves
1. Reduction of amounts of Capital and Increase of Other Capital Surplus
TOYO reduced capital of 7,500,011,000 yen and transferred the reduced amount to other capital surplus in accordance with the provision of Article 447, Paragraph 1 and paragraph 3, of the Companies Act.
2. Reduction of amount of Capital Reserves and Increase of Other Capital Surplus
TOYO reduced capital reserves of 11,368,886,000 yen and transferred the reduced amount to other capital surplus in accordance with the provision of Article 448, Paragraph 1, of the Companies Act.

After the reduction of amounts of capital and capital reserves as indicated above coming into effect, the amount of capital, capital reserves and other capital surplus have become 18,198,978,851 yen, 4,549,744,713 yen, and 21,182,193,655 yen.

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