Japan Display Inc. Comments on its Fund Procurement

As announced in the disclosure made on September 26, 2019, titled "(Update and Progress of a Disclosure Matter) Concerning the Disclosure as of April 12, 2019" (the "Disclosure as of September 26"), Japan Display Inc. ("JDI") has received a notice as of September 26, 2019 from Harvest Tech Investment Management Co., Ltd. ("Harvest Tech") stating that the fund to be organized by Harvest Tech will withdraw from its position as an expected investor in Suwa Investment Holdings, LLC ("Suwa"), regarding the planned issuance of new shares and bonds with stock acquisition rights through third-party allotment to Suwa (the "Third-party Allotment"). JDI deeply apologizes for any concerns and inconvenience JDI has caused to its shareholders, business partners, and all other stakeholders.

JDI had received a commitment letter (USD 300 million and JPY 20 billion) from Harvest Tech as stated in the Disclosure as of September 26, stating the company's firm commitment to implementing investments in Suwa. JDI will continue to hold discussions and negotiations with Suwa and Harvest Tech so that Suwa will be able to obtain investment from Harvest Tech pursuant to the commitment letter.

JDI had been informed by Harvest Tech that USD 100 million out of the expected investment amount to be provided by a fund to be formed by Harvest Tech will be secured by receiving relevant support from JDI's customer (the "Customer"). On September 26, 2019, JDI received a letter from the Customer stating that the Customer intends to invest USD 200 million in JDI through Suwa or in other ways if Harvest Tech does not directly or indirectly invest in JDI.

JDI interviewed Oasis Management Company Ltd. ("Oasis"), another investor who had committed to investing USD 150-180 million in JDI, after receiving the notice that Harvest Tech had withdrawn from its position as an expected investor in Suwa, and confirmed that their intention to invest remains unchanged. The commitment letter received from Oasis states that the commitment is subject to the satisfaction of certain conditions precedent, including the total new capital (including the investment amount to be provided by Oasis) to be raised by JDI through the issuance of common stocks and bonds with stock acquisition rights is JPY 60 billion or more. However, JDI recognizes that Oasis remains positive about investing in JDI due in part to the increase in support from the Customer as stated above. In addition, JDI has been informed by a certain company that it has begun full-fledged consideration of a USD 50 million investment and JDI is in negotiations with several companies interested in investing in JDI. If commitments to invest in JDI are received, it will enable us to raise funds totaling between USD 400 to 430 million or more.

JDI believes that even if Suwa is unable to obtain investment from Harvest Tech, its cash flow concerns will be resolved (i) by realizing the above financing, (ii) with the borrowings from INCJ, Ltd. ("INCJ") for JPY 20 billion in August and September, 2019, respectively (total amount of JPY 40 billion), (iii) by the Customer stating in its letter that it will alleviate payment terms for the transactions with JDI as announced in the Disclosure as of September 26, and (iv) by reducing spending through the implementation of major reductions in fixed costs, including large-scale personnel reductions. Taking these circumstances into consideration, JDI will finalize the scheme for securing JPY 50 billion by the end of November 2019.

If JDI is able to raise the above JPY 50 billion funds, JDI will be able to meet the necessary funding requirements for now in addition to borrowings from INCJ. Therefore, JDI will carefully discuss the necessity and timing of the issuance of the 3rd series bonds with stock acquisition rights (total issue amount of JPY 30 billion) with related parties, the necessity of which JDI had announced that it will determine based on JDI's funding requirements.

In addition, as announced in the press release dated August 27, 2019 titled "Notice Concerning Borrowing of Funds, Issuance of Preferred Shares through Third-party Allotment, and Partial Amendment of Articles of Incorporation", JDI plans to issue class A preferred shares of JDI of JPY 102 billion through third-party allotment to INCJ as part of its refinancing by INCJ, which is subject to the issuance of new shares and bonds with stock acquisition rights. JDI aims to eliminate the negative net worth in the third quarter of fiscal year 2019 ending March 2019 by increasing capital through the issuance of such class A preferred shares and the above-mentioned issuance of new shares and bonds with stock acquisition rights. After that, JDI will engage in ordinary transactions with financial institutions based on the sound balance sheet.

Takahisa Hashimoto, who became Chairman and Representative Director on September 27, 2019, and Minoru Kikuoka, who became President, Representative Director and CEO on the same day, are the leaders of the JDI Group as a whole working together to dispel concerns among all concerned parties as early as possible under the renewed operating structure. JDI will immediately keep you updated if any specific progress occurs.