Announcement of Overhaul of Operating Structure for Real Estate Crowdfunding Business

GATES Inc. (Headquarters: Shinjuku-ku, Tokyo; President: Yushi Sekino; hereinafter "our company") hereby reports that we will be completely overhauling the operating structure of our real estate crowdfunding business. We once again deeply apologize to our past investors, business partners, and affiliated financial institutions for the concern and inconvenience caused. ■ Background and Report on Completed Actions In our real estate crowdfunding business, an incident occurred where erroneous dividend distributions were made due to a system malfunction during the operational period, causing great anxiety and inconvenience to our investors. Our company has taken this matter seriously and has completed the following actions: ・ Completed the refund and redemption of all deposited funds and dividends to all investors. ・ Completed reporting and response to the competent authorities. ・ Completed internal investigation of the cause and establishment of recurrence prevention measures for the operational issues that occurred. While we have completed our response to this matter as described above, we take the fact that our operating structure was not sufficient to meet the trust placed in us by our investors extremely seriously. ■ Overhaul of Operating Structure Based on this incident, we will completely overhaul the operating structure of our real estate crowdfunding business as follows: 1. Fundamental Review of the Distribution Process To prevent the recurrence of erroneous transfers, we will redesign the process from both a system and operational perspective. Specifically, we will introduce a multi-stage check system for distribution processing, strengthen the verification flow on the system, and establish a monitoring system by external experts. 2. Reorganization of Organizational Structure We will review the responsibility structure and staffing of the department in charge of the real estate crowdfunding business and transition to an operating structure that strengthens collaboration with our group's core business of investment real estate. 3. Strengthening of Internal Management Structure We will strengthen our compliance and internal audit functions and build a system for the management and protection of our investors' assets and rights. 4. Review of Sourcing and Product Design Process In conjunction with the overhaul of the operating structure, we will strengthen collaboration with our group's core business of investment real estate to re-engineer the process from deal sourcing to product design, establishing a system for continuous and stable provision. ■ Future Plans Our company will strive to further enhance the quality of value we provide to investors through real estate crowdfunding. This overhaul of the operating structure is the first step. We will report again on the further evolution of the entire service as soon as the operating structure is in place. We sincerely ask for the continued understanding and support of our past investors and all parties who have engaged in business with and supported our company. ■ Company Profile GATES Inc. Headquarters: 34F Shinjuku Grand Tower, 8-17-1 Nishi-Shinjuku, Shinjuku-ku, Tokyo Representative: President Yushi Sekino Founded: December 2012 Capital: 100 million yen Business: ■ Financial Domain: Crowdfunding, RWA, Lending ■ Renewable Energy Domain: Development/operation of grid-scale storage batteries, Structured finance for grid-scale storage batteries, Solar power investment ■ Real Estate Investment Domain: Sales of single-room investment properties, Sales of single-room investment properties (resale), Whole building investment, Overseas real estate investment Website: https://gatestokyo.co.jp/