Istyle : Notice Concerning the Capital and Business Alliance with, the Issuance of the 1st Series of Unsecured Bonds with Convertible Bond Type Warrants and the 24th Series of Warrants to Amazon.com, Inc.; the Capital and Business Alliance with, and the Issuance of the 2nd Series of Unsecured Bonds with Convertible Bond Type Warrants to Mitsui & Co., Ltd.; etc.

Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. The Company assumes no responsibility for this translation or for direct, indirect or any other forms of damages arising from the translation.

	August 15, 2022
To whom it may concern,
Company name	istyle Inc.
Representative	Tetsuro Yoshimatsu, President and CEO
	(Stock Exchange Code: 3660)
Contact	Kei Sugawara, Director and CFO
	(TEL.[phone])

[Summary] Notice Concerning the Capital and Business Alliance with, the Issuance of the 1st Series of Unsecured Bonds with Convertible Bond Type Warrants and the 24th Series of Warrants to Amazon.com, Inc.; the Capital and Business Alliance with, and the Issuance of the 2nd Series of Unsecured Bonds with Convertible Bond Type Warrants to Mitsui & Co., Ltd.; the Issuance of the 3rd Series of Unsecured Bonds with Convertible Bond Type

Warrants to Triple Four Investment Partnership; and the Issuance of the 25th Series of Warrants to Y Corporation

istyle Inc. ("the Company"), at its Board of Directors meeting held today, has resolved to enter into a Capital and Business Alliance Agreement (the "Capital and Business Alliance Agreement"), dated as of today, with Amazon.com, Inc. ("Amazon"), and to issue to Amazon the 1st Series of Unsecured Bonds with Convertible Bond Type Warrants (the "1st Series of Bonds with Warrants") and 24th Series of Warrants (the "24th Series of Warrants") through a third-party allotment (the "Third-party Allotment (Amazon)") as described below. (The Capital and Business Alliance and the Third-party Allotment pursuant to the Capital and Business Alliance Agreement (Amazon) are hereinafter referred to as the "Capital and Business Alliance (Amazon)".)

The Company has also resolved to sign a Memorandum of Understanding of Business Alliance (the "MOU of Business Alliance"), dated as of today, with Mitsui & Co., Ltd. ("Mitsui & Co."), and to issue to Mitsui & Co. the 2nd Series of Unsecured Bonds with Convertible Bond Type Warrants (the "2nd Series of Bonds with Warrants") through a third-party allotment (the "Third-party Allotment (Mitsui & Co.)") as described below. (The Business Alliance and the Third-party Allotment pursuant to the MOU of Business Alliance (Mitsui & Co.) are hereinafter referred to as the "Capital and Business Alliance (Mitsui & Co.)".)

In addition, as described below, the Company has resolved to issue to Triple Four Investment Partnership ("Triple Four") the 3rd Series of Unsecured Bonds with Convertible Bond Type Warrants (the "Third Series of Bonds with Warrants") through a third-party allotment (the "Third-party Allotment (Triple Four)") (together with the 1st Series of Bonds with Convertible Bond Type Warrants the 2nd Series of Bonds with Convertible Bond Type Warrants, individually or collectively, the "Bonds with Warrants").

In addition, as described below, the Company has resolved to issue to Y Corporation, an asset management company of Tetsuro Yoshimatsu, the Company's Representative Director, (hereinafter referred to as "Y" and collectively with Amazon, Mitsui & Co. and Triple Four as the "Scheduled Subscribers") the 25th Series of Warrants (the "25th Series of Warrants" and, together with the 24th Series of Warrants, individually or collectively, the "Warrants".) through a third-party allotment (the "Third-party Allotment (Y)" and collectively with Third-party Allotment (Amazon), Third-party Allotment (Mitsui & Co.) and Third-party Allotment (Triple Four), hereinafter "Third-party Allotment").

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I. Capital and Business Alliance (Amazon)

1.Purpose and Rationale for the Capital and Business Alliance (Amazon)

1. Background and purpose of the Capital and Business Alliance (Amazon) and the Third-party Allotment (Amazon)
   Our group plans and operates @cosme, a comprehensive cosmetics and beauty website. The Company was founded in 1999 with the vision of "creating a consumer-centric marketplace" in the early days of the Internet before it began to spread throughout society. In an era when information was mainly provided from companies through the mass media, we were among the first to focus on the live voices of consumers ("word-of-mouth"), and our service has grown to be used by many women today as a place where consumers can exchange their real voices.
   In 2002, we opened an e-commerce (EC) site called @cosme SHOPPING (cosme.com at that time) to expand the

purchasing behavior of consumers. In 2007, in order to reflect the voices of consumers in the actual store distribution, with the slogan "integration of the Internet and the physical world (fusing online and offline / digital and physical)," we entered into the operation of physical stores, @cosme STOREs, which is rare for an Internet company. Since beauty products are applied to the skin, it is especially important for consumers to be able to actually try the products to understand and purchase the product. By combining EC and physical stores, we provide consumers with more opportunities to purchase products, and at the same time, for brands, we support the encounter between consumers and brands through this service integrating media, EC and stores, that has evolved into a marketing solution. We are proud to have developed such comprehensive beauty-related service.

In January 2020, we opened @cosme TOKYO in front of Harajuku Station as one of the largest cosmetics specialty stores in Japan, offering a product lineup that transcends conventional distribution barriers. It is attracting attention as a new type of store that evolves the integration of the Internet and the physical world.

Currently, the number of users of Internet media focusing on cosmetics information and the scale of sales at cosmetics- specialized e-commerce and cosmetics-specialized stores are among the largest in Japan.

Since our listing on Mothers in 2012 and transfer to the First Section of the Tokyo Stock Exchange in the same year, with the expansion of the global cosmetics market, the Company has been strongly promoting its global business. The global cosmetics market has been expanding in recent years, particularly in Asia, and we aim to support the encounter of Japanese cosmetics and other cosmetics products with consumers around the world, and the Global business now accounts for approximately 12.3% of our sales (as of fiscal year ended June 30, 2022).

However, although we have been investing in the Global business to expand the potential for business growth in overseas markets, we were forced to scale back or withdraw from unprofitable businesses overseas due to rapid changes in the environment, such as intensified competition in the cross-border EC market following the enforcement of the new EC law in China and demonstrations in Hong Kong. And from the fourth quarter of the fiscal year ended June 30, 2020, the impact of COVID-19 has been seen in the form of a sales decline due to conservatism in client budgets in the domestic advertising business, which had been a pillar of earnings, and a slump in the storefront business due to a decline in the number of customers visiting stores. Currently, the cosmetics industry still faces an uncertain outlook due to a decline in consumers' willingness to purchase, fewer opportunities to wear makeup due to self-restraint in going out, and evaporation of inbound demand.

On the financial side, although we are focusing on liquidating and withdrawing from unprofitable businesses and reinforcing profitable divisions, the extraordinary loss due to impairment of goodwill and other assets associated with the withdrawal from overseas businesses and the loss associated with the impact of COVID-19 have caused the equity ratio to decline and the debt-to-equity ratio to increase. (As of June 30, 2022, equity ratio 38.1%, DE ratio 1.16x)

On the funding side, a lump-sum repayment of 6 billion yen in long-term loans from two financial institutions, which was executed in October 2019 for the repayment of loans and the appropriation of working capital for business expansion, is scheduled at the end of October 2022.

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At the same time, the trend to promote digital transformation (DX), such as the digital shift of advertising media and strengthening of EC sales, is accelerating. In particular, as the demand for cosmetics EC expands, the Group has accumulated experience and expertise in the "integration of the Internet and the physical world (connecting online and offline)," including how to sell in stores and how data should be linked, and we expect opportunities for business and service growth by integrating media, EC, and stores to increase. In addition to the recent return of human flow, there are positive signs, such as the gradual easing of entry restrictions on overseas travelers. We believe it is essential to further strengthen the synergistic linkages between media, stores, and EC and develop solutions centered on sales promotion. In addition, in light of the business environment, including the promotion of DX and growing customer interest in the protection of personal information, it is becoming increasingly important to strengthen IT infrastructure and information security, which will require funds for technology investment.

As competition in Internet services and e-commerce also intensified, with competitors competing on price and service, in order for us to grow further, it is essential for us to work together with players who could further enhance our strengths in terms of capital, technology, customer base, brand, and network, while maintaining our vision of "creating a consumer- centric marketplace" to increase value to consumers.

(2) Rationale for the Capital and Business Alliance (Amazon)

Amazon's, the partner of this Capital and Business Alliance (Amazon), mission is "to be Earth's most customer-centric company", and has always been customer-focused, developing online stores such as Amazon.com and Amazon.co.jp to provide customers with the widest selection on Earth, as well as a variety of services to improve convenience for customers. We, with a vision of "creating a consumer-centric marketplace", also provide comprehensive beauty-related services that connect online and offline; operating "@cosme," a comprehensive site for cosmetics and beauty that focuses on customer word-of-mouth reviews, and developing e-commerce and physical stores with product lineups that reflect customer word-of-mouth reviews and rankings.

In addition to the similarities in corporate vision, there are other similarities in the way we provide value to our customers and create business opportunities, and we believe that we are well-situated partners to grow mutually while providing services of greater value to our customers, and therefore have agreed to enter into this Capital and Business Alliance (Amazon).

2. Details of the Capital and Business Alliance (Amazon)

The Company has entered into the Capital and Business Alliance Agreement with Amazon, and based on the agreement, the Company plans to proceed with the following measures with Amazon Japan G. K. ("Amazon Japan"), a subsidiary of Amazon, as outlined below.

Through this Capital and Business Alliance, Amazon Japan and the Company aim to further improve convenience and customer satisfaction in cosmetics and beauty-related shopping by leveraging the various services and technologies that Amazon Japan offers to selling partners in Japan on Amazon.co.jp, and the Company's expertise in word-of-mouth, product assortment, and store development specialized in cosmetics and beauty.

As one of the specific initiatives in the Capital and Business alliance, we plan to open the "@cosme SHOPPING" (tentative name) store on Amazon.co.jp. The store will provide all customers who have an Amazon.co.jp account with a variety of information on cosmetics and beauty, which is a feature of "@cosme SHOPPING," and will sell cosmetics under a wide range of brands and in various categories.

In the future, we will consider collaboration between "@cosme SHOPPING" (tentative name) on Amazon.co.jp and our various online and offline measures to provide customers with an even more attractive shopping experience.

For details of the Third-party Allotment (Amazon) out of the Capital and Business Alliance (Amazon), please refer to "III. Third-party Allotment" below.

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3. Outline of the Capital and Business Alliance (Amazon) Partner

					(As of: December 31, 2021, unless otherwise noted)
(1)	Company Name:	Amazon.com, Inc.
(2)	Location:	410 Terry Avenue North, Seattle, Washington, USA 98109
(3)	Name and Title of	Andrew R. Jassy, CEO
	Representative:
(4)	Business:	Holding company and parent corporation
(5)	Shihon-kin :	US$ 55,538 million (JPY 7,477,081 million)
(6)	Date of Incorporation:	May 28, 1996
(7)	The number of shares of	508,623,592 (excluding treasury stock; as of February 22, 2022)
	common stock outstanding
(8)	Fiscal Year End:	December 31
(9)	Number of Employees:	Approximately 1,608,000 full-time and part-time employees
(10)	Major Suppliers /	None
	Customers:
(11)	Primary Bank:	Multiple banks
(12)	Major Shareholders and	Jeffrey P. Bezos	12.7% (As of: February 22, 2022)
	Ownership Percentages:
(13)	Relationship Between
	Parties
		There is no capital relationship between the Company and Amazon which
	Capital Relationship:	must be noted. Further, there are no capital relationships to specifically
	note between the Company's affiliates or its relevant persons and
		Amazon's affiliates or its relevant persons.
		There is no personnel relationship between the Company and Amazon
	Personnel Relationship:	which must be noted. Further, there are no personnel relationships to
	specifically note between the Company's affiliates or its relevant persons
		and Amazon's affiliates or its relevant persons.
		istyle retail Inc. (which is one of the Company's affiliates) has been
		registered as a third-party seller on the Amazon.co.jp website, which is
	Business Relationship:	provided by Amazon and its affiliates (but is not currently selling
	products on the website).
		Also, the Company is a customer of AWS and Amazon DSP services
		provided by Amazon and its affiliates.
	Circumstances Relevant to	Amazon does not fall within the scope of related parties of the Company.
	the Related Parties	Further, neither Amazon's relevant persons nor Amazon's affiliates fall
	(kanren-toujisha):	within the scope of related parties of the Company.
(14)	Business Results & Financial Status for Preceding 3 Years (Unit: 1M; except for per share data)
Fiscal Year:	Fiscal Year Ended			Fiscal Year Ended		Fiscal Year Ended
December 31, 2019		December 31, 2020		December 31, 2021
Consolidated Total Shareholders'	US$ 62,060		US$ 93,404		US$ 138,245
Equity:		(JPY 8,355,138 million)		(JPY 12,574,981 million)		(JPY 18,611,924 million)
Consolidated Total Assets:	US$ 225,248		US$ 321,195		US$ 420,549
(JPY 30,325,138 million)		(JPY 43,242,483 million)		(JPY 56,618,512 million)
Consolidated Total Net Sales:	US$ 280,522		US$ 386,064		US$ 469,822
(JPY 37,766,677 million)		(JPY 51,975,796 million)		(JPY 63,252,136 million)
Consolidated Operating Income:	US$ 14,541		US$ 22,899		US$ 24,879
(JPY 1,957,655 million)		(JPY 3,082,892 million)		(JPY 3,349,460 million)
Consolidated Net Income:	US$ 11,588		US$ 21,331		US$ 33,364
(JPY 1,560,092 million)		(JPY 2,871,793 million)		(JPY 4,491,795 million)
Basic Earnings Per Share:	US$ 23.46		US$ 42.64		US$ 65.96
(JPY 3,158.42)		(JPY 5,740.62)		(JPY 8,880.19)

※1. The amount described in the table (5) above (shihon-kin) is the amount of Additional Paid in Capital based on Amazon's disclosed financial information.

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※2. The information in the table (12) above shows the beneficial ownership of common stock. Also, Mr. Bezos' ownership percentage includes 14,655,736 shares as to which Mr. Bezos has sole voting power and no investment power.

※3. The figures in JPY described in the table (5) and (14) above are based on the TTM conversion rate of USD 1 equals to JPY 134.63, as of July 29 2022.

※4. The information in the table (14) above is based on, and only to the extent of, Amazon's disclosed financial information, which is based on US Generally Accepted Accounting Principles, as of December 31, 2021.

4. Schedule for the Capital and Business Alliance (Amazon)

1. Date of resolution by the Board of

August 15, 2022

Directors

1. Date of the Capital and Business

August 15, 2022

Alliance Agreement

(3) Commencement Date of the

Date separately agreed upon by the Company and Amazon prior to

Capital and Business Alliance

the payment date of the Third-party Allotment (Amazon)

(Amazon)

(4) Payment date of the Third-party

September 6, 2022 (scheduled)

Allotment (Amazon)

5. Future outlook

The impact of the Capital and Business alliance (Amazon) on our business performance is undetermined at this time and will be disclosed promptly if it becomes clear that it will have a material impact that should be disclosed.

II. The Capital and Business Alliance (Mitsui & Co.)

1.Purpose and Rationale for the Capital and Business Alliance (Mitsui & Co.)

1. Background and Purpose of the Capital and Business Alliance (Mitsui & Co.) and the Third-party Allotment (Mitsui & Co.)
   As described above in "I. Capital and Business Alliance (Amazon) 1. Purpose and Rationale for the Capital and Business Alliance (Amazon) (1) Background and Purpose of the Capital and Business Alliance (Amazon) and the Third- party Allotment (Amazon)", in realizing our vision of "creating a consumer-centric marketplace," we believe it is essential to collaborate with global players that can further enhance our strengths in terms of capital, technology, customer base, brands, and network in order to further increase value to consumers. From this perspective, we have concluded that a Capital and Business Alliance with Mitsui & Co., which operates in a wide range of fields including overseas, will enable us to utilize its network and knowledge, and will bring many benefits to our future business growth.
2. Rationale for the Capital and Business Alliance (Mitsui & Co.)

Mitsui & Co.'s Retail Business Unit promotes investment and business development in sectors such as retail, product development, and logistics, focusing on e-commerce and stores, and has a network not only in Japan but also in Asia and other parts of the world. Amid global changes in the consumption patterns due to the expansion of the middle class and changing lifestyles, it builds businesses that are market- and consumer-centric. We have selected Mitsui & Co. as our Capital and Business Alliance partner as we believe that we can expect to utilize Mitsui & Co.'s network and knowledge in the product, distribution, and retail fields in a wide range of areas, such as building supply chains in e-commerce and storefront businesses and finding partners in the Global business.

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