Tokyo Lifestyle Enters Into 5-Yr Subordinated Unsecured Loan Agreement For ~$1.92M With Tokushin G. K.

Tokyo Lifestyle Co., Ltd. ("Tokyo Lifestyle" or the "Company") (NASDAQ:TKLF), a retailer and wholesaler of Japanese beauty and health products, sundry products, luxury products, electronic products, collectible cards, trendy toys as well as other products in Hong Kong, Japan, North America, Thailand, Vietnam, the United Kingdom and Australia, today announced that it entered into a five-year subordinated unsecured loan agreement for JPY 300 million (approximately US$1.92 million) (the "Loan Agreement") with its controlling shareholder, Tokushin G. K. ("Tokushin"), a limited liability entity owned by the Company's Representative Director and Principal Executive Officer, Mr. Mei Kanayama, and his family, on November 27, 2025. The funding is intended to support the Company's future growth and development initiatives.

Pursuant to the Loan Agreement, Tokyo Lifestyle received the loan proceeds from Tokushin on February 1, 2026. The loan term commenced on the same date and will mature on January 31, 2031. Repayment will follow a schedule mutually agreed upon by both parties. Tokyo Lifestyle will pay interest monthly and will settle the principal in a lump sum upon maturity. The loan bears a fixed annual interest rate of 2.0%, which is slightly higher than prevailing commercial lending rates in Japan in the current high-interest-rate environment.

A subordinated loan ranks below other forms of indebtedness in terms of claims on assets in the event of default. In bankruptcy or liquidation, it is repaid only after all senior indebtedness has been satisfied. Unlike equity financing, a subordinated loan does not dilute shareholders' equity, yet it can achieve a similar financial effect to a capital infusion by strengthening the borrower's financial profile while preserving its existing equity structure.

Tokyo Lifestyle is currently advancing its global expansion strategy, aiming to establish a robust network integrating direct-operated stores, franchise locations, online platforms, and wholesale customers. For its 2026 business strategy, the Company aims to focus on expanding its global footprint and achieving superior operational efficiency, both of which require more abundant and stable financial resources.