May 12, 2021 [Translation] Company Name: Prospect Co., Ltd. Representative: Representative Director and President Nobuhiko Izumi ( Code: 3528 TSE 2nd Section) Contact: Chief of General Affairs Jiro Taketani (TEL: +81-03-3470-8411)

Notice regarding reverse split

At the Board of Directors meeting held today, the Company resolved to submit the following proposals regarding the reverse to the 120th Ordinary General Meeting of Shareholders scheduled to be held on June 29, 2021.

Record

1. Purpose of We will carry out a reverse stock split from 10 shares of the Company's to 1 . The total number of of the Company is 500,810,984 shares as of March 31, 2021. In addition, if the unexercised stock acquisition rights issued by the Company (the Company's common stock: 201,971,928 shares) are added, the total will be 702,782,912 shares. We believe that this number of shares is high in view of the scale of our business and the situation of other companies in the same industry. In addition, at the closing price of the Company's stock price (36 yen) as of May 11, 2021, the amount per investment unit (100 shares per unit) is 3,600 yen, which is far below the level of 50,000 yen or more and less than 500,000 yen desirable investment unit under the securities regulations of the Tokyo . We recognize that if the current stock price level, which has a relatively large price fluctuation rate per yen, continues, it is likely that the stock price will fluctuate significantly as a speculative target, which will have a large effect on general . Considering these circumstances, we have decided to carry out a reverse stock split to consolidate 10 shares into 1 share on the premise of obtaining approval from shareholders at the Ordinary General Meeting of Shareholders.

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2. Details of reverse stock split (1) Types of shares to be merged Common stock (2) Merger ratio 1 share for every 10 (The number of shares owned by shareholders recorded or recorded in the shareholder registry on September 30, 2021 will be the standard.) (3) Effective date October 1, 2021

(4) Number of shares to decrease due to merger Total number of issued shares before the merger 500,810,984

① (as of March 31, 2021) Number of shares to decrease due to merger 450,729,886

② Total number of issued shares after the merger 50,081,098 (Note)③ “Number of shares to be reduced due to merger” and “Total number of issued shares after merger” are the figures before the consolidation of shares. This is a theoretical value calculated based on the total number of issued shares and the consolidation ratio.

(5) Total number of issuable shares after the merger Total number of issuable shares before the merger (as of 870,000,000

①March 31, 2021) Total number of issuable shares after the merger 87,000,000

(Note)② The Articles of Incorporation regarding the total number of issuable shares will be changed on the effective date of the reverse stock split based on Article 182, Paragraph 2 of the Companies Act.

3. Number of shareholders decreasing due to merger

The shareholder composition based on the shareholder list as of March 31, 2021 is as follows. Number of shareholders Number of shares owned (percentage) (percentage) Total number of 22,769 （100.00%） 500,810,984 （100.00%） shareholders Shareholders who own less 742 （ 3.26%） 1,489 （ 0.00%） than 10 shares Shareholders owning 10 or more and 259 （ 1.14%） 8,220 （ 0.00%） less than 100 shares Shareholders owning 100 shares or 5,259 （ 23.09%） 1,219,968 （ 0.24%） more and less than 1,000 shares Shareholders owning 1,000 16,509 （ 72.51%） 499,581,307 （ 99.75%）

2 shares or more If the Reverse Stock Split is carried out, 742 shareholders who own less than 10 shares will lose their shareholder status. In addition, 5,259 shareholders who own 100 or more shares and less than 1,000 shares will become new owners of shares less than one unit and will lose trading opportunities in the exchange and voting rights at general meetings of shareholders. Shareholders who will own shares less than one unit of the Company shall be subject to the number of shares less than one unit owned by the shareholders in accordance with the provisions of Article 194, Paragraph 1 of the Companies Act and Article 10 of the Articles of Incorporation of the Company. You can request the Company to sell up to the number of shares constituting one unit together with the number of shares less than one unit owned by the shareholders. In addition, pursuant to the provisions of Article 192, Paragraph 1 of the same Act, the Company may be requested to purchase the shares less than one unit. For specific procedures, please contact the securities company that deals with the Company's shares or the administrator of the Company's shareholder registry.

4. Processing when fractions less than 1 share occur If a fraction less than one share is generated because of the reverse stock split, it will be disposed of in a lump sum in accordance with the provisions of the Companies Act, and the price will be paid according to the ratio of the fraction to the shareholders who generated the fraction.

5. Conditions for merging It is subject to the approval and approval of the proposal for the reverse stock split at the Ordinary General Meeting of Shareholders.

6. Adjustment of strike price of stock acquisition rights With the consolidation of shares, the exercise price per share of stock acquisition rights issued by the Company will be adjusted as follows from October 1, 2021. Issuance resolution date (classification of grantees) Before After adjustment adjustment Strike price Strike price 2nd Stock Acquisition Rights (Stock Options) June 26, 2013 Ordinary General Meeting of Shareholders and October 18, 2013 Resolution of the Board of Directors (Directors, Audit & 55 円 550 円 Supervisory Board Members and Employees of the Company)

3rd Stock Acquisition Rights 49.2 円 492 円 November 17, 2015 Resolution of the Board of Directors 4th Stock Acquisition Rights (Stock Options) 48 円 480 円

3 December 16, 2015 Resolution of the Board of Directors (Directors and Employees of the Company) 5th Stock Acquisition Rights (Stock Options) June 28, 2018 Resolution of the Board of Directors (Directors, 49 円 490 円 Employees of the Company and Officers of Subsidiaries)

７．Main dates May 12, 2021 Board resolution June 29, 2021 Resolution of the General Meeting of Shareholders October 1, 2021 Effective date of the reverse stock split Early November 2021 (planned) Sending a notice of reverse stock split to shareholders Early December 2021 (planned) Payment of fractional stock disposal price

8. Other The number of shares constituting one unit of the Company remains 100, and there is no change.

End

[Reference] Q & A regarding reverse stock split

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Q1: What is a reverse stock split? A1: A reverse stock split is to combine multiple shares into a smaller number of shares. This time, we will merge 10 shares into 1 share.

Q2: What is the purpose of the reverse stock split? A2: The purpose is to bring the investment unit of the Company's shares closer to the desirable investment unit level specified by the and adjust it to an appropriate level commensurate with the scale of the Company.

Q3: What will happen to the number of shares owned and the number of voting rights of shareholders? A3: The number of shares owned by shareholders after the reverse stock split is the number of shares recorded in the final shareholder registry on September 30, 2021 multiplied by one tenth (fractions less than one share will be truncated.) In addition, the number of voting rights will be one for every 100 shares held after the merger. Specifically, the number of shares owned and the number of voting rights of shareholders will be as follows before and after the effective date of the reverse stock split. Before After No. of No. of voting No. of shares No. of voting Fractional shares rights owned rights shares owned Example 1 10,000 100 1,000 10 None Example 2 5,500 55 550 ５ None Example 3 1,909 19 190 １ 0.9 Example 4 1,000 10 100 １ None Example 5 125 １ 12 None 0.5 Example 6 １ None None None 0.1 If less than one fractional share is generated as a result of the reverse stock split (as in Examples 3, 5 and 6 above), the Company will collectively dispose of all the fractional shares and the price will be rounded down. We will pay the shareholder who has the problem according to the fractional ratio. The disposal price of these fractional shares is scheduled to be sent in early December 2021. In addition, if the number of shares owned before the effect becomes less than 10 shares (as in Example 6 above), all the shares owned will become fractional shares due to the reverse stock split, and the company will lose its as a shareholder. Thank you for your understanding.

Q4: Is there a way to prevent fractional shares from being generated? A4: Before the consolidation of shares becomes effective (October 1, 2021), it is possible to prevent fractional shares from being generated by purchasing shares less than one unit or using the additional purchase system. For specific procedures, please contact the securities company with which you are dealing or the administrator

5 of the Company's shareholder registry described below.

Q5: The reverse stock split will result in shares less than one unit. Is it possible to purchase or increase the purchase even after the merger? A5: Even after the reverse stock split (October 1, 2021), it is possible to purchase shares less than one unit and use the additional purchase system. For specific procedures, please contact the securities company with which the shareholders are dealing or the administrator of the Company's shareholder registry described below. By law, even if a shareholder uses the additional purchase system for shares less than one unit and requests the Company to purchase additional shares, if the Company does not hold treasury stock at that time, Please note that we are not obligated to transfer treasury stock.

Q6: The number of shares owned will decrease due to the reverse stock split. Is there any impact on the asset value? A6: Due to the reverse stock split, the number of shares held will be reduced to one tenth, but net assets will not change, so the amount of net assets per share will increase tenfold, and other factors such as fluctuations in conditions will be a factor. Except for this, there is no change in the asset value of our shares. The stock price after the reverse stock split will theoretically be 10 times that before the reverse stock split.

Q7: Do shareholders have to take any steps? A7: There are no special procedures required. * Inquiries * If you have any questions regarding the reverse stock split, please contact the securities company with which you are dealing or the administrator of the Company's shareholder registry below.

Stock List Manager Mizuho Trust & Banking Co., Ltd. Contact information: Securities Agency Department Phone: 0120-288-324 (toll free) Reception hours: Weekdays 9:00 to 17:00 (excluding Saturdays, Sundays, and holidays)

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