February 18, 2022

Company name:

DIGITAL HEARTS HOLDINGS Co., Ltd.

President and CEO

Yasumasa Ninomiya

Name of representative:

(Code number: 3676, First Section of the Tokyo

Stock Exchange)

Executive Vice President

Toshiya Tsukushi

Contact:

and CFO, Director

(TEL: +81-3-3373-0081)

Notice of the Stock Acquisition of CEGB Co., Ltd.

(Conversion into a Consolidated Subsidiary)

DIGITAL HEARTS HOLDINGS Co., Ltd. (hereinafter referred to as the "Company") announces that it passed a resolution at its Board of Directors' Meeting held today to convert CEGB Co., Ltd. ("CEGB") to a subsidiary through the acquisition of all shares of CEGB.

Details are as follows:

1. Reason for stock acquisition

To provide comprehensive service for software "quality improvement," our group is currently focused on expanding our System Testing business to detect defects of enterprise systems and provide a variety of services, including manual testing by leveraging our human resource pools, test automation services, and security testing. In particular, in the ERP (Enterprise Resources Planning) field, as a service partner of SAP, to support the introduction and operation of SAP in client companies, we provide comprehensive testing solutions for SAP by utilizing tools such as 'Panaya' for impact analysis and 'Worksoft' for test automation.

In recent years, SAP-related demand has spiked with the fact that the maintenance period for existing SAP ERP ends at the end of 2027, and the number of companies moving toward the successor product 'SAP S/4HANA®' has increased. We have decided to acquire CEGB as a group company to further strengthen our comprehensive testing solutions for SAP and to develop a broad range of services flexibly meeting clients' needs for upgrades in SAP's conversion, such as consulting, impact analysis, customization, and operation supports.

CEGB is a company that provides consultation on the SAP introduction and operation, which was founded in 2005. They have a wealth of achievements and know-how under the leadership of its experienced Project Managers, including the implementation of numerous SAP deployment projects. Specifically, through collaboration with partners including those in India, they have provided direct support for SAP introduction and operation in a variety of industries. They have also been involved in the introduction of 'SAP Business ByDesign', a cloud-based ERP for small and medium-sized businesses. In this way, they have developed creative services for SAP ERP as a business partner of clients. They are also focusing on training SAP engineers, and about 60% of their employees are certified by SAP and have many engineers, including foreign employees, with specialized knowledge.

With the addition of CEGB to our group, we will expand our SAP businesses capabilities by combining the existing testing solutions such as the Group's test automation services including tools of 'Panaya' and 'Worksoft' in the ERP field, with newly joining CEGB's specialized SAP engineers and its extensive knowledge. We will aim to provide solutions to SAP's users who will have challenges in 2027.

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2. Overview of the company to be acquired as a subsidiary

(1)

Company name

CEGB Co., Ltd.

(2)

Location

5-29-20 Shiba, Minato-ku, Tokyo, Japan

(3)

Position and name of

President Tetsuo SERIZAWA

representative

(4)

Business activities

SAP introduction and operation consulting, system development support, etc.

(5)

Share capital

15 million yen

(6)

Date established

November 9, 2005

(7)

Major shareholders and

Tetsuo SERIZAWA

100%

its shareholding ratios

There are no notable capital ties between the Company and the

Capital ties

said company. There are no notable capital ties between related

parties/affiliates of the Company and related parties/affiliates of

the said company.

Relationship between

There are no notable personnel relations between the Company

and the said company. There are no notable personnel relations

(8)

the listed company and

Personnel relations

between related parties/affiliates of the Company and related

the said company

parties/affiliates of the said company.

There are no notable business relations between the Company

Business relations

and the said company. There are no notable business relations

between related parties/affiliates of the Company and related

parties/affiliates of the said company.

  • As this transaction does not meet the timely disclosure standards stipulated by the Tokyo Stock Exchange, CEGB's results of operations and financial position for the past three years have been omitted.

3. Number of shares to be acquired, and status of stock ownership before and after acquisition

Number of shares

Zero

(1)

(Number of voting rights: Zero)

owned before transfer

(Ownership percentage of voting rights: 0%)

(2)

Number of shares to be

300 shares

acquired

(Number of voting rights: 300)

Number of shares

300 shares

(3)

(Number of voting rights: 300)

owned after transfer

(Ownership percentage of voting rights: 100%)

  • Since this case does not meet the timely disclosure standards set forth by the Tokyo Stock Exchange, the acquisition price is not disclosed. However, the acquisition price is calculated in a fair manner by referring to due diligence by a third party.

4. Schedule

(1)

Date of the Board of Directors' resolution

: February 18, 2022

(2)

Date of conclusion of the share transfer agreement

: February 18, 2022

(3)

Date of the stock acquisition

: March 31, 2022 (Scheduled)

5. Future prospects

We expect the stock acquisition to have a minor effect on our business results for the fiscal year ending March 31, 2022.

However, we will promptly make an announcement if it is necessary to revise our results forecast or if any matter requiring

disclosure is generated in the future.

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Hearts United Group Co. Ltd. published this content on 18 February 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 18 February 2022 07:20:04 UTC.