Company-divided (simple absorption-type company division) notification of business success

TOKYO, Aug. 04, 2022 (GLOBE NEWSWIRE) — Internet Initiative Japan Inc. (hereinafter “IIJ”, TSE Prime Market: 3774) today announces the decision by IIJ’s board of directors to successfully continue the enterprise and enterprise Internet service provider business. From Internet Revolution Inc. (hereinafter “i-revo”), a reseller of cloud computing services through a company spin-off (simplified absorption-type company spin-off).

The Company’s demerger is expected to result in an increase or decrease of no more than 10% in IIJ’s total assets and earnings as of the last day of the previous fiscal year. 3 percent more revenue than last fiscal year. Therefore, some disclosures and details have been partially omitted.

1. Purpose of division of the company
The enterprise Internet service provider business (providing Internet connection services for enterprises, etc.) and i-revo’s cloud computing service (reselling public cloud services) vendor are closely aligned with IIJ’s business. Based on discussions with i-revo, IIJ is expected to demerge these businesses into a simple absorption-type company and expand businesses.

2. Summary of the company’s division
(1) Schedule of company’s division

Note: This demerger of a company is treated as a simple absorption type company as demerged under Article 796 Clause 2 of the Companies Act. Accordingly, the approval of the general meeting of shareholders is not required in both companies.

(2) Method of division of the company
IIJ is a successor company and i-revo is split into an absorption type company.

(3) Areas distributed about the association
IIJ is scheduled to provide i-revo with JPY249,000,000 in cash as compensation for the company’s dividend.

(4) Management of new share subscription rights and new share subscription bonds in connection with the division of the company
not applicable.

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(5) Change of capital due to division of the company
The division of the company does not result in increase/decrease of capital.

(6) Rights and obligations to be followed by the successor organization
From the contractual positions, other rights and obligations in relation to the subsidiary businesses, IIJ succeeds to those stipulated in the absorption-type company demerger agreement.

(7) Promises to perform debt obligations
IIJ has decided that no issues are expected regarding the performance of the obligations and the company after the date of division.

3. Basis of allocation related to division of the company, etc.
In calculating the value of successful businesses, IIJ adopted the Discounted Cash Flow Method (hereinafter the “DFF Method”) to reflect future business activities. The amount of cash is determined by negotiation based on the i-revo business plan based on a valuation using the DCF method based on the financial forecasts of the business. The business plan does not include any significant increase or decrease in profits.

4. Overview of companies involved in the demerger (as of March 31, 2022)

5. Overview of business succession
(1) Details of the business to be distributed
Enterprises and reseller cloud computing services Internet service provider business at i-revo.

(2) Successful business results (as of March 31, 2022);
Revenues JPY691 million

(3) Assets and liabilities to succeed
IIJ will succeed to the positions, other rights and obligations relating to the business activities specified in the agreement-type company demerger agreement. There is no wealth or debt that will succeed.

6. The situation following the division of the company
As a result of this company separation, there will be no change in IIJ’s name, address, name and location of representative, business objectives, share capital and fiscal year end.

7. Predictions
The Company’s spin-off is not expected to have a material impact on IIJ’s consolidated financial targets.

Reference: Consolidated financial targets for the fiscal year ending March 31, 2023 (JPY million)

< ስለ ኢንተርኔት ኢኒሼቲቭ ጃፓን Inc. >
In the year Founded in 1992, IIJ is one of Japan’s leading providers of Internet access and comprehensive network solutions. IIJ and its group companies provide comprehensive network solutions primarily serving high-end corporate clients. IIJ’s services include high quality internet connectivity services, mobile services, security services, cloud computing services and systems integration. Moreover, IIJ operates one of the largest Internet backbone networks in Japan, connected to the United States, the United Kingdom, and Asia. IIJ was listed on the first section of the Tokyo Stock Exchange (“TSE”) in 2006 and moved to the TSE Main Market from April 2022.

< IIJ ባለሀብቶች ግንኙነት >

Phone: +81-3-5205-6500 E-mail: ir@iij.ad.jp URL: https://www.iij.ad.jp/en/ir