Notice Regarding Business Succession through Company Split (Simplified Absorption-type Company Split)

Internet Initiative Japan, Inc.

TOKYO, Aug. 04, 2022 (GLOBE NEWSWIRE) — Internet Initiative Japan Inc. (hereinafter “IIJ”, TSE Prime Market: 3774) hereby announces that at the IIJ’s Board of Directors today resolved to succeed Internet service provider business for enterprises and reseller business of Cloud computing services from Internet Revolution, Inc. (hereinafter “i-revo”), through company split (simplified absorption-type company split).

The company split which is an absorption-type is expected to result in an increase or a decrease in IIJ’s total assets of no greater than 10% of net assets as of the last day of the previous fiscal year, and an increase in revenues of no greater than 3% of revenues in the previous fiscal year. Therefore, some disclosure items and details are partially omitted.

1. Purpose of the company split
Internet service provider business for enterprises (providing Internet connectivity services for enterprises, etc.) and reseller business of Cloud computing services (reselling public Cloud services) of i-revo are highly compatible with IIJ’s business. Based on discussions with i-revo, IIJ is to succeed these businesses through a simplified absorption-type company split and expects to expand those businesses.

2. Summary of the company split
(1) Schedule for the company split

Board of Directors’ Resolution Date

August 4, 2022

Contract Date

August 8, 2022 (scheduled)

Effective Date

October 1, 2022 (scheduled)

Note: This company split is regarded as a simplified absorption-type company split under Article 796, Paragraph 2 of the Companies Act. Accordingly, an approval by a general meeting of shareholders is not required at either company.

(2) Method of the company split
An absorption-type company split in which IIJ will be the succeeding company and i-revo will be the splitting company.

(3) Allotments relating to the company split
IIJ is scheduled to deliver i-revo with JPY249,000,000 in cash as compensation for the company split.

(4) Treatment of new share subscription rights and new share subscription bonds in relation to the company split
Not applicable.

(5) Change in capital due to the company split
The company split will not result in an increase/decrease in capital.

(6) Rights and obligations to be succeeded by the succeeding company
Among the contractual positions, other rights and obligations in relation to the succeeding businesses, IIJ will succeed to those stipulated in the absorption-type company split agreement.

(7) Prospects for performance of debt obligations
IIJ has determined that no issues are to be expected in regard to the performance of its obligations that it would bear on and after the effective date of the company split.

3. Basis of allotment related to the company split, etc.
In regards to calculating the value of the businesses to be succeeded, IIJ adopted the discounted cash flow method (hereinafter “DCF method”) in order to reflect the future business activities. The amount of cash to be delivered was determined through negotiations based on the valuation using the DCF method, which is premised on financial forecasts of the business to be succeeded based on the business plan of i-revo. The business plan does not include any significant increase or decrease in profit.

4. Overview of the companies involved in the company split (As of March 31, 2022)

Succeeding Company

Splitting Company

1. Name of the company

Internet Initiative Japan Inc.

Internet Revolution, Inc.

2. Address

2-10-2, Fujimi, Chiyoda-ku, Tokyo

1-11-1, Ginza, Chuo-ku, Tokyo

3. Name and position of

Representative Director and President,
Eijiro Katsu

Representative Director and President,
Mitsuhiro Masanobu

4. Business objectives

Provision of Internet connectivity and outsourcing services, provision of systems integration and equipment sales

Systems operation for digital entertainment business, development and operation of internet services

5. Share capital

JPY23.023 million

JPY100 million

6. Establishment

December 3, 1992

February 1, 2006

7. Number of shares issued



8. Fiscal year end

March 31

March 31

9. Major shareholders and
shareholding ratios

Nippon Telegraph and Telephone
Corporation 22.4%
The Master Trust Bank of Japan,
Ltd. (Trust account) 9.7%

Konami Digital Entertainment Co., Ltd. 100%

10. Financial position and results of operations for the most recent fiscal year

Fiscal year

Fiscal year ended March 31, 2022
(Consolidated, IFRS)

Fiscal year ended March 31, 2022
(Non-consolidated, Japanese GAAP)

Equity attributable to owners of
the parent or net assets

JPY103.528 million

JPY2.660 million

Total assets

JPY231.805 million

JPY2.899 million

Owner’s equity per share or
net assets per share




JPY226.335 million

JPY1.106 million

Operating profit or ordinary

JPY23.547 million

JPY40 million

Profit attributable to owners of the parent or net income

JPY15.672 million

JPY25 million

Basic earnings per share or net
Income per share



5. Overview of the business succession
(1) Details of business to be split
Internet service provider business for enterprises and reseller business of Cloud computing services by i-revo.

(2) Business results of the business to be succeeded (As of March 31, 2022)
Revenues JPY691 million

(3) Assets and liabilities to be succeeded
IIJ will succeed to the contractual positions, other rights and obligations relating to the businesses to be succeeded that are stipulated in the absorption-type company split agreement. There are no assets and debts to be succeeded.

6. Status following the Company Split
There will be no change in the name, address, name and position of representative, business objectives, share capital, and fiscal year end of IIJ, as a result of this company split.

7. Forecasts
The company split is not expected to have a material impact on the consolidated financial targets of IIJ.

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



before tax

Net income
attributable to
owners of the parent

Consolidated financial targets (Fiscal year ending March 31, 2023)





Consolidated financial results (Fiscal year ended March 31, 2022)





< About Internet Initiative Japan Inc. >
Founded in 1992, IIJ is one of Japan’s leading Internet-access and comprehensive network solutions providers. IIJ and its group companies provide total network solutions that mainly cater to high-end corporate customers. 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 that is connected to the United States, the United Kingdom and Asia. IIJ listed on the First Section of the Tokyo Stock Exchange (“TSE”) in 2006 and transitioned to the Prime Market of TSE from April, 2022.

< IIJ Investor Relations >

Tel: +81-3-5205-6500 E-mail: [email protected] URL:

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