February 27, 2008 (Tokyo, Japan)—The board of directors of Acrodea, Inc. (CEO and President: Junya Tsutsumi), headquartered in Meguro-ku, Tokyo, has passed resolutions concerning a business alliance with NTT DoComo, Inc., and the related issuance of new stock in a private placement by NTT DoComo, as follows:
Acrodea and NTT DoCoMo are entering into a comprehensive business alliance to deploy various mobile phone services jointly as set forth below.
Aiming to offer enriched lifestyles to consumers, the Acrodea group of companies is engaged in the development of highly fitting new services and new technologies, principally by employing the mobile handset as the proximate device of choice. The company’s products are licensed to telecom companies and mobile phone handset makers in Japan, while overseas market development is also active. Amidst such activities, Acrodea and NTT DoCoMo executed master license agreements in August 2007 for Acrodea products VIVID UI and VIVID Movie, whose implementations began with the 905i series handsets under current release and are expected to continue successively for future models alongside the service platform that supports Kisekae Tool® by NTT DoCoMo. In this way, Acrodea has accommodated heightened functionality and service diversification for models released by NTT DoCoMo, supplied our technology steadily and continually in the evolution of these products, and put forward recommendations for new products and technologies to propel joint development by both companies.
Acrodea has decided to embark on the planning, development, and distribution of highly convenient residential intercom-security systems that utilize mobile handsets, and has recently started with NTT DoCoMo research and development of MDU (multiple dwelling unit) intercom systems employing mobile handsets.
Date of board of directors resolution (approval): February 27, 2008
Date of business alliance agreement (execution): February 27, 2008
The impact on the business performance of the Acrodea group is under careful review currently. Any details will be disclosed at the time they become definite.
This private placement rests on the reinforced collaboration between Acrodea and NTT DoComo, who embark on joint development based on the executed business alliance agreement, and responds to a need for development funds.
Acrodea has selected the method of a private placement, because the funding comprises a business investment for the purpose of creating a service operated jointly by Acrodea and NTT DoComo, and because a reinforced equity relationship with NTT DoCoMo, who is the operating partner of the alliance, clarifies the positioning of the business as a joint operation.
From the proceeds obtained through the new issuance of shares, plans call for allocating 1 billion yen to operating cash for the new product development contemplated under the current business and equity alliances, 500 million yen to funds associated with the development of mobile phone services for MDUs, and the balance to operating capital for the expansion of business operations, such as compensation expenses.
Acrodea expects to disburse in April 2008 and beyond, but the detailed timetable has not been decided yet. Details will be released, as soon as they are available.
Through the activation of existing products and technologies belonging to the company, the current alliance targets the deployment of enriched lifestyles that Acrodea aims for and that consumers seek, and is believed to lead to improved enterprise value. The financing at this time applies to the technology development, service planning, and distribution to fulfill such an environment, and is considered reasonable by Acrodea.
| Year Ended | Mar. 31, 2005 | Mar. 31, 2006 | Mar. 31, 2007 |
|---|---|---|---|
| Net Sales | 205 | 1,077 | 2,237 |
| Operating Income | 12 | 81 | 408 |
| Ordinary Income | 11 | 84 | 360 |
| Net Income | 1 | 69 | 263 |
| Earnings per share (yen) | 185 | 2,054 | 4,428 |
| Dividend per share (yen) | - | - | - |
| Net Assets per Share (yen) | 10,098 | 17,675 | 31,668 |
| Type of Share | Number of Shares | Proportion versus Shares Issued |
|---|---|---|
| Shares issued | 74,370 | 100.00% |
| Potentially diluting shares at current conversion price (exercise price) | 7,170 | 9.64% |
| Potentially diluting shares at lower limit of conversion price (exercise price) | － | －% |
| Potentially diluting shares at upper limit of conversion price (exercise price) | － | －% |
1)Conditions for the past three years
| Year Ended | Mar. 31, 2005 | Mar. 31, 2006 | Mar. 31, 2007 |
|---|---|---|---|
| Starting price | - | - | 201,000 yen |
| High price | - | - | 517,000 yen |
| Low price | - | - | 136,000 yen |
| Ending price | - | - | 489,000 yen |
2)Conditions for the last six months
| Aug | Sep | Oct | Nov | Dec | Jan | |
| Starting price | 412,000 | 257,000 | 243,000 | 361,000 | 360,000 | 335,000 |
| High price | 424,000 | 260,000 | 398,000 | 375,000 | 395,000 | 453,000 |
| Low price | 210,000 | 167,000 | 240,000 | 245,000 | 291,000 | 311,000 |
| Ending price | 253,000 | 239,000 | 356,000 | 352,000 | 342,000 | 422,000 |
3)Share price on business day prior to board resolution for issuance
| February 26, 2008 | |
|---|---|
| Starting price | 469,000 yen |
| High price | 473,000 yen |
| Low price | 437,000 yen |
| Ending price | 442,000 yen |
New share issuance for private placement
| Issue date | March 13, 2008 |
|---|---|
| Proceeds | 1,809,990,000 yen (Est. amount after deductions 1,809,490,000 yen) |
| Total shares issued as of offering | 74,370 |
| Total shares issued at capital increase | 4,500 |
| Total shares issued after offering | 78,870 |
| Placement party | NTT DoCoMo, Inc. |
Public offering for capital increase
| Issue date | October 19, 2006 |
|---|---|
| Proceeds | 717,600,000 yen |
| Shares issued at time of offering | 64,910 |
| Shares issued for capital increase | 6,000 |
| Initial purpose of funds | R&D expenses 108,607,000 yen, capital expenditures 26,346,000 yen, and balance as working capital for business operations expansion. |
| Planned disbursement date | March 31, 2009 |
| Current allocation conditions | VIVID UI-related R&D expenses of 43,080,000 yen and capital expenditures of 23,320,000 yen have been applied according to initial purpose. The other funds are working capital in accordance with business operations expansion. |
| Before Financing (As of Sep. 30, 2007) | After Financing (Not including ??? shares) | ||
|---|---|---|---|
| Junya Tsutsumi | 22.06% | Junya Tsutsumi | 19.48% |
| KDDI Corporation | 6.17% | NTT DoCoMo, Inc. | 5.70% |
| Yoshio Kuniyoshi | 5.02% | KDDI Corporation | 5.45% |
| JAIC Advanced Tech No. 1 Venture Capital Investment, L.P. Unlimited liability member Japan Asia Investment Company, Ltd. | 5.02% | Yoshio Kuniyoshi | 4.43% |
| Morgan Stanley & Co. plc | 4.80% | JAIC Advanced Tech No. 1 Venture Capital Investment, L.P. Unlimited liability member Japan Asia Investment Company, Ltd. | 4.43% |
| Bandai Networks Co., Ltd. | 4.31% | Morgan Stanley & Co. plc | 4.23% |
| DoCoMo.com Co., Ltd. | 4.31% | Bandai Networks Co., Ltd. | 3.80% |
| Nippon Securities Finance Co., Ltd. | 2.27% | DoCoMo.com Co., Ltd. | 3.80% |
| Megachips Corporation | 2.15% | Nippon Securities Finance Co., Ltd. | 2.00% |
| Tomoaki Nitta | 1.44% | Megachips Corporation | 1.90% |
The current financing has no impact on the current business performance of the Acrodea group, but is believed to contribute to business performance of the group in the future.
he issue price valuation for the private placement takes into consideration comprehensively the volatile environment of the recent stock market, and the share price fluctuation and trading volume of Acrodea shares. Based on the closing price of Acrodea common shares (442,000 yen) quoted by Tokyo Stock Exchange (Mothers) on the business day (February 26, 2008) previous to the board resolution date, the share price was established at 402,220 yen. This price represents a nine percent (9%) discount, compared to the closing price on the day before the board resolution, and a 3.4% discount, compared to the average of closing prices quoted by Tokyo Stock Exchange (Mothers) for one month retroactively from the day before the board resolution (January 28 – February 26, 2008). This decision considered the benefits of the current business alliance on future business performance and on improved enterprise value, and deemed the price reasonable as a consequence of negotiations with the party entering into the placement.
The shares issued under the current financing total 4,500, or 5.70% of total shares issued by Acrodea. The new share issuance advances dilution temporarily; nevertheless, business operations expansion through the private placement and capital increase at this time is believed to contribute to an increase in enterprise value. Consequently, management deemed the scale to be reasonable for existing shareholders.
| 1 | Company name | NTT DoCoMo, Inc. | |||
| 2 | Business operations | Mobile telephone operations, other operations | |||
| 3 | Date of establishment | August 14, 1991 | |||
| 4 | Head office | 11-1 Nagata-cho 2-chome, Chiyoda-ku, Tokyo | |||
| 5 | Title/name representative |
CEO and President: Masao Nakamura | |||
| 6 | Paid-in capital | Paid-in capital | |||
| 7 | Shares issued | 45,880,000 (As of September 30, 2007) | |||
| 8 | Net assets | ¥4,161,303 million (As of March 31, 2007, consolidated) | |||
| 9 | Total assets | ¥6,116,215 million (As of March 31, 2007, consolidated) | |||
| 10 | Fiscal year closing | March 31 | |||
| 11 | Employees | 5,947 (As of March 31, 2007) | |||
| 12 | Large shareholders and holdings |
Nippon Telephone and Telegraph 60.24% Japan Trustee Services Bank. Ltd. (Trust Acct) 2.09% Master Trust Bank of Japan (Trust Acct) 1.91% |
|||
| 13 | Relationship between listed company and placement party |
Equity relations | Equity relations | ||
| Business relations | Business relations exist, such as distribution of company’s products. | ||||
| Personal relations | Not applicable | ||||
| Applicability to parties | Not applicable | ||||
| 14 | Business performance of past three years |
(Consolidated) | |||
| Fiscal year ended | March 2005 | March 2006 | March 2007 | ||
| Operating revenues | 4,844,610百万 yen | 4,765,872百万 yen | 4,788,093百万 yen | ||
| Operating income | 784,166百万 yen | 832,639百万 yen | 773,524百万 yen | ||
| Pre-tax income | 1,288,221百万 yen | 952,303百万 yen | 772,943百万 yen | ||
| Net income | 747,564百万 yen | 610,481百万 yen | 457,278百万 yen | ||
The placement party NTT DoCoMo is Japan’s largest mobile telecommunications company, and a pioneer of various telecommunication services provided by mobile phones, such as i-Mode®. Reinforcing an equity relationship with NTT DoCoMo as a business alliance and equity alliance partner not only devises stability in joint business operations, but also represents the most suited counterpart for attaining maximum business synergy for the Acrodea group that pursues mobile telephone services towards comfortable lifestyles for consumers.
There is no continual retention or depository agreement between Acrodea and placement party NTT DoCoMo to lock up the newly appointed shares. As a premise to the business alliance, however, the placement party has indicated intentions to hold the shares continually. If all or part of the newly issued and placed shares are transferred within two years after the issue date, Acrodea has received an understanding that the name and address of the transferee, number of shares transferred, transfer date, transfer price, transfer reason, transfer method, etc., are to be provided in a written report.
| (1) New shares issued | 4,500 common shares | |
| (2) Issue price | 402,220 yen per share | |
| (3) Total issue price | 1,809,990,000 yen | |
| (4) Amount apportioned to capital | 201,110 yen per share | |
| (5) Method of offering or placement | Private placement | |
| (6) Application period | March 31, 2008 | |
| (7) Payment date | March 31, 2008 | |
| (8) New stock issue date | March 31, 2008 | |
| (9) Each item above is subject to the effectiveness of filings in accordance with the financial products transaction law. | ||
Marketing Department at Acrodea, Inc.
TEL：+81 3-5768-8603 email: pr@acrodea.co.jp
Public Relations Officer Meguro at SUN, Inc.
SUN Annex Building, 2-7-3 Iwamoto-cho, Chiyoda-ku, Tokyo 101-0032 Japan
Tel: +81 3-4530-3150 Fax: +81 3-3864-1280
Email: meguro@suninc.jp
