Evolable Asia Corp. (6191) Financial Results for the Third Quarter of FY9/18

Consolidated Financial Results
for the Third Quarter of the Fiscal Year Ending September 2018 (FY9/18)(Nine Months Ended June 30, 2018) [Japanese GAAP]
August 14, 2018
Stock Exchange Listing: TSE
URL http://www.evolableasia.com

Company name:
Evolable Asia Corp.
Stock code:
6191
Representative:
Hideki Yoshimura, CEOContact:
Yusuke Shibata, Director and CFO
Scheduled date of filing of Quarterly
August 14, 2018
Report:

TEL: +81-(0)3-3431-6191
Scheduled date of payment of―dividend:

Preparation of supplementary materials for quarterly financial results: Yes
Holding of quarterly financial results briefing: Yes (for institutional investors and securities analysts)(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the Third Quarter (October 1, 2017 to June 30, 2018) of FY9/18(1) Consolidated results of operations
Net sales(Percentages represent year-on-year changes)
Profit attributable toOrdinary income
owners of parent

Operating income

Millions of yen% Millions of yen

Nine months ended June
6,319
30, 2018
Nine months ended June
3,968
30, 2017
Comprehen Nine months ended June
Note:sive income
30, 2018% Millions of yen

%

-449

―

-459

―

-466

―

581

―

553

―

354

―

Million(s of yen

－%)

―
223

Million(s of yen

35%)

Nine months ended June30, 2017

452

Fully diluted profit per
share

Profit per share
Nine months ended June30, 2018
Nine months ended June30, 2017% Millions of yen

Yen

Yen

-26.92

―

21.17

20.04

(2) Consolidated financial position
Total assets

Equity ratio

Millions of yen

Millions of yen%

22,901
7,547

4,450
3,294

17.8
37.7

As of June 30, 2018
As of September 30, 2017
Referen Shareholderce:s’ equity

Net assets

As of June 30, 2018

2,852

Millions of yen

As of September
30, 2017

2,371

Millions of yen

2. Dividends
Dividend per share
1Q-end2Q-endYen

3Q-endYen

Fiscal year ended―
0.00
Sep. 30, 2017
Fiscal year ending―
0.00
Sep. 30, 2018
Fiscal year ending Sep. 30,
2018 (Estimated)
Note: Revision to the most recently announced dividend forecast: None―1―Year-end

Total

Yen

Yen

Yen

―

7.00

7.00

10.00

10.00

―

Evolable Asia Corp. (6191) Financial Results for the Third Quarter of FY9/18

3. Consolidated Forecast for FY9/18 (October 1, 2017 to September 30, 2018)
Net sales
Millions of yen

Operating income% Millions of yen(Percentages represent year-on-year changes)
Profit attributable toProfit per shareowners of parent% Millions of yen%

Yen

Full year
11,000
―
1,500
―
881
Note: Revision to the most recently announced consolidated forecast: Yes

―

52.09

―2―

Evolable Asia Corp. (6191) Financial Results for the Third Quarter of FY9/18* Notes(1) Changes in significant subsidiaries during the period:

Yes(Changes in specified subsidiaries resulting in changes in scope of consolidation)
Newly included:

1 company Airtrip Corp.

Excluded– companies(2) Application of special accounting methods for presenting quarterly
consolidated financial statements:

Yes(3) Changes in accounting policies and accounting-based estimates, and restatements
1) Changes in accounting policies due to revisions in accounting

:

None

2) Changes in accounting policies other than 1) above

:

None

3) Changes in accounting-based estimates

:

None

4) Restatements

:

None

standards, others(4) Number of outstanding shares (common stock)1) Number of shares outstanding as of the end of the As of Jun. 30,
period (including treasury shares)
2) Number of treasury shares as of the end of the period

2018:

shares

As of Jun. 30,

As of Sep. 30,
2017:
As of Sep. 30,

2018:― shares2017:

monthsNinemonths

16,763,493
ended

16,919,100
shares― sharesNine

3) Average number of shares issued during the period

17,679,500

June

30,

16,763,493
endedshares
2018:

June

30,
shares2017:* The current quarterly financial report is exempt from the quarterly review procedures performed by certified public accountants or
audit corporations.
* Explanation of appropriate use of earnings forecasts, and other special items
Forecasts of future performance in these materials are based on information currently available to the Company. Consequently, thesestatements incorporate many uncertainties. Please note that actual performance may differ from these forecasts due to changes ininternal or external factors affecting business operations and other factors.

―3―

Evolable Asia Corp. (6191) Financial Results for the Third Quarter of FY9/18○Contents of Attachments

1. Qualitative Information on Quarterly Consolidated Financial Performance…………………………………4(1) Explanation of Results of Operations ………………………………………………………………………………4(2) Explanation of Financial Position ………………………………………………………………………………5(3) Explanation of Consolidated Forecast and Other Forward-looking Statements ……………………………………5
2. Quarterly Consolidated Financial Statements ……………………………………………………………………6(1) Consolidated Balance Sheet ………………………………………………………………………………6(2) Consolidated Statements of Income and Comprehensive Income …………………………………………8(3) Notes to Quarterly Consolidated Financial Statements ……………………………………………………………10(Notes on going concern assumptions) ……………………………………………………………………10(Significant changes in shareholders’ equity) ……………………………………………10(Application of special accounting methods for presenting quarterly consolidated financial statements)…………………………………………10(Changes in accounting policies) ……………………………………………………………………………………10(Changes in accounting estimates) ……………………………………………………………………………10(Segment information, etc.) …………………………………………………………………………………11(Important subsequent events) ……………………………………………………………………………………13―4―

Evolable Asia Corp. (6191) Financial Results for the Third Quarter of FY9/18

1. Qualitative Information on Quarterly Consolidated Financial Performance(1) Explanation of Results of Operations
During the first six months of the fiscal year under review, the Japanese economy showed a moderate economic recovery, partly due
to the effects of various policies amid the improved employment and income conditions, while the uncertainty of the global economy
and the impact of fluctuations in the financial and capital market demanded attention. The economy continued to expand at a steadypace, supported by increased domestic demand and inbound tourist demand against the background of the upcoming Tokyo Olympics
in 2020.
In the travel industry, the number of Japanese citizens who left Japan in the period from January to June 2018 totaled 8,780,000,
increasing about 360,000 from the same period of the previous fiscal year according to the statistics released by the Japan National
Tourism Organization (JNTO). In addition, the number of foreigners who visited Japan from January to June 2018 surpassed
15,890,000. The number is rising steadily toward 40 million, the target for 2020 set in the Tourism Vision to Support the Future ofJapan, which the Japanese government adopted in March 2016.
Under these conditions, Evolable Asia Corp. (hereinafter the “Company”) continued expanding its operations and diversifying its
service lines with a focus on sales of domestic airline tickets as an online travel agency. In particular, the Company worked onincreasing the recognition of its brand AirTrip and the acquisition of customers. The Company also continued to enhance its services
for foreign visitors, making the most of its online travel business expertise.
In the IT Offshore Development Business, which was launched in 2012, the Company steadily won customers in numerous businesscategories and increased the number of engineers employed, focusing on the development of lab-type facilities in Vietnam. The
number of engineers hired grew to 914 as of the end of June 2018. In the Investment Business, which has been developing in earnest
since the stock was listed, the Company has been investing in growing companies. As of the end of June 2018, the Company has
invested in 38 companies.
In this business environment, the Company and its consolidated subsidiaries (the Group) achieved consolidated net sales of
6,319,490 thousand yen (up 59.2% year on year), consolidated operating loss of 449,377 thousand yen (down 177.3% year on year),consolidated ordinary loss of 459,705 thousand yen (down 182.9% year on year), consolidated loss before income taxes of 469,613
thousand yen (down 184.8% year on year), and consolidated loss attributable to owners of parent of 466,623 thousand yen (down231.7% year on year) in the nine months of the fiscal year under review.
The Company plans to adopt the IFRS in the fiscal year ending September 30, 2018. Under the IFRS, in the nine months underreview, the Group recorded consolidated net sales of 6,340,533 thousand yen, consolidated operating income of 1,037,38 thousand yen,
and consolidated profit attributable to owners of parent of 716,712 thousand yen (unaudited reference values).
Operating results by segment are as follows.
(1) Online Travel Agency Business
The Group offers the following four services in the Online Travel Agency Business segment.
・BtoC services (operation of PC and smartphone websites for selling travel commodities directly to general consumers)
The Company improved mass marketing and search engine marketing and renewed mission-critical systems significantly to acquire
new customers. The Company also improved user interfaces to increase the number of repeat customers. These contributed to a steadyincrease in the number of service users.
The recognition of the Company’s brand AirTrip increased, and strategic pricing and the active input of branding costs wereconducted to acquire customers.
・BtoBtoC services (travel content provision under brands owned by business partners)
The enhanced development of alliances with major partners, the provision of services to match the needs of major partners, andenhanced communication with partners contributed to an increase in service use. In addition, like the BtoC services, measures formarketing and alliances with an emphasis on increasing customer numbers were promoted.
・BtoB services (wholesale to other travel agencies)
Trends in the airline industry and policies enforced by business partners affect these services to a certain extent. The online travel
agency business for operators handling domestic airline tickets grew dynamically as a whole, with an increase in the number ofdomestic air routes in service. As a result, net sales for these services increased strongly.

―5―Evolable Asia Corp. (6191) Financial Results for the Third Quarter of FY9/18

・BTM services (centralized management of internal approval procedures and arrangements associated with corporate businesstrips)
These services basically adopt a business model under which net sales expand in a manner that is linked with an increase in thenumber of corporate customers and a rise in their usage rate. The services achieved growth attributable to initiatives taken by theGroup, including the addition of salespeople and the identification of existing customers who used the services at a relatively low rate.
As a result of the factors stated above, net sales for the Online Travel Agency Business segment amounted to 4,620,476 thousand
yen and segment loss came to 319,734 thousand yen in the nine months of the fiscal year under review.
(2) IT Offshore Development BusinessIn the IT Offshore Development Business segment, the Group offers lab-type facility development services to customers consisting
mainly of e-commerce operators, web solution providers, and game and system developers in Ho Chi Minh, Hanoi and Da Nang in
Vietnam.
The Company’s lab-type facility development model is distinctive in that a team is formed with new dedicated staff members hired
for each customer. The model also enables customers to confirm the state of lab-type facility development on demand. The Company
assumes the assignment of dedicated staff members to each team on a medium- to long-term basis. For that reason, the success or
failure of development depends on employing workers suited to customer demands and motivating the respective engineers more.
In addition, these services basically adopt a business model under which customers are billed on the basis of man-months and thenumber of workers. The number of engineers supplied to clients and the man-months affect net sales for them significantly. An
increase in the number of engineers and a rise in the unit cost due to development streamlining contributed to sales growth in the fiscal
year under review.
As a result of the factors stated above, net sales for the IT Offshore Development Business segment reached 1,732,699 thousand yen,and segment income totaled 137,646 thousand yen.
(3) Investment BusinessIn the Investment Business segment, the Group emphasizes synergies with the existing businesses and expands service lines
through aggressive M&A and capital alliances. The Group is pursuing investment in growing companies to improve profitability. At
the end of the third quarter under review, the Group had increased the number of companies in which it invests to 38.
As a result, net sales for the Investment Business segment stood at 101,669 thousand yen, and segment income was 75,463 thousandyen.

(2) Explanation of Financial Position(Assets)
Total assets increased 15,422,797 thousand yen from the end of the previous fiscal year, to 22,901,437 thousand yen at the endof the third quarter under review. This result was mainly due to an increase of 2,502,053 thousand yen in cash and deposits, a riseof 3,254,751 thousand yen in notes and accounts receivable - trade, an increase of 1,531,793 thousand yen in operational
investment securities, a climb of 4,082,230 thousand yen in goodwill.
(Liabilities)
Liabilities increased 14,198,327 thousand yen from the end of the previous fiscal year, to 18,450,545 thousand yen at the end of
the third quarter under review. This result primarily reflected an increase of 1,677,164 thousand yen in notes and accounts payable- trade, an increase of 3,456,139 thousand yen in short-term loans payable and a rise of 4,918,817thousand yen in long-term loans
payable.
(Net Assets)
Net assets rose 1,224,469 thousand yen from the end of the previous fiscal year, to 4,450,891 thousand yen at the end of thethird quarter under review. This result was mainly attributable to an increase of 1,261,943 thousand yen in capital surplus.

(3) Explanation of Consolidated Forecast and Other Forward-looking Statements
In the business results for the first nine months of the fiscal year ending September 30, 2018, both handling volume and net sales
were stronger than the Company’s initial estimates, mainly due to the success of marketing measures on the Company’s―6―Evolable Asia Corp. (6191) Financial Results for the Third Quarter of FY9/18

Integrated Traveling Service Platform, AirTrip and website improvements in the Online Travel Agency Business.
In addition, Airtrip Corp. became a consolidated subsidiary of the Company from June, through the acquisition of the shares ofDeNA Travel Co., Ltd. (now Airtrip Corp.), which is the largest domestic OTA for overseas air tickets and traveling abroad, on
May 31, 2018. Since then. the Company has carefully examined the impact of this acquisition of shares.
Taking the impact of this acquisition of shares into consideration, in addition to the strongly performing existing businesses
described above, the Company raised the full-year consolidated business forecasts announced at the beginning of the fiscal year.
The business forecasts for the current fiscal year (ending September 30, 2018) are consolidated net sales of 11,000 million yen,consolidated operating income of 1,500 million yen, and profit attributable to owners of the parent of 881 million yen.
(Note) The Company decided to voluntarily adopt the International Financial Reporting Standards (IFRS) from the financial results
for the fiscal year ending September 30, 2018. The above business forecasts have been prepared in accordance with IFRS.

―7―

Evolable Asia Corp. (6191) Financial Results for the Third Quarter of FY9/18

2. Quarterly Consolidated Financial Statements and Major Notes(1) Consolidated Balance Sheet(Thousands of yen)
FY9/17(As of Sep. 30, 2017)

Third quarter of FY9/18(As of Jun. 30, 2018)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade

2,139,151
1,386,136

4,641,204
4,640,887

Operational investment securities
Merchandise and finished goods

1,100,489
45,032

2,632,282
55,972

Deferred tax assets
Accounts receivable - other78,166
181,394

22,526800,949

Other
Allowance for doubtful accounts

227,716-16

1,688,761-1,381

5,158,070

14,481,202

153,550

220,369

105,372
100,864

113,878
191,677

7,123–

366,910

525,926

724,820
609,762

4,807,051
1,895,510-

181,707

1,334,582

6,884,269

31,801
12,59763,56824,270548,921859,507

25,43036,99725,756-25,430

56,392-30,697

Total current assets
Non-current assets
Property, plant and equipment
Buildings, net
Vehicles, net
Tools, furniture and fixtures, net
Construction in progress
Total property, plant and equipment
Intangible assets
Goodwill
Software
Other
Total intangible assets
Investments and other assets
Investment securities
Deferred tax assets
Guarantee deposits
Claims provable in bankruptcy,
provable in rehabilitation and other
Other
Allowance for doubtful accounts

claimsTotal investments and other assets
Total non-current assets
Total assets―8―619,075

1,010,039

2,320,569

8,420,234

7,478,640

22,901,437

Evolable Asia Corp. (6191) Financial Results for the Third Quarter of FY9/18(Thousands of yen)
FY9/17(As of Sep. 30, 2017)

Third quarter of FY9/18(As of Jun. 30, 2018)

Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term loans payable

1,558,350
655,159

3,235,515
4,111,298

Accounts payable - otherAccrued expenses

487,496
155,181

1,397,207
124,662

Advances received
Income taxes payable

67,342
188,7273,000,925
76,287

Provision for bonuses
Provision for point card certificates

46,852
4,367

51,08518,740

Provision for shareholder benefit program
Current portion of long-term loans payable

26,394
122,258

4,702
3,269,039

5,574
–

8,185
227,711

Lease obligations
Deferred tax liabilities
Other

201,305

413,554

Total current liabilities

3,519,009

15,938,917

Non-current liabilities
Long-term loans payable

622,780

2,394,816

Long-term guarantee deposited
Net defined benefit liability

81,5285,094

17,367
12,329Deferred tax liabilities
Lease obligations

9,534
14,27061,76025,355

Total non-current liabilities

733,208

2,511,628

4,252,217

18,450,545

Shareholders’ equity
Capital stock

1,031,127

1,067,860

Capital surplus
Retained earnings

837,092
865,064

2,099,035
280,006

2,733,284

3,446,902

39,718636,361

446
-216

663
-5,65539,948631,369

48,72949,449Total liabilities
Net assets

Total shareholders’ equity
Accumulated other comprehensive income
Valuationdifferenceonavailable-for-salesecurities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Total accumulated other comprehensive income
Subscription rights to shares
Non-controlling interests
Total net assets
Total liabilities and net assets―9―404,459

323,170

3,226,422

4,450,891

7,478,640

22,901,437

Evolable Asia Corp. (6191) Financial Results for the Third Quarter of FY9/18(2) Consolidated Statements of Income and Comprehensive Income
Consolidated Statement of Income
For the Nine-month Period(Thousands of yen)
Nine months of FY9/17(Oct. 1, 2016 – June 30, 2017)

Nine months of FY9/18(Oct. 1, 2017 – June 30, 2018)

Net sales
Cost of sales

3,968,345
635,725

6,319,490
2,260,465

Gross profit

3,332,620

4,059,024

Selling, general and administrative expenses

2,751,418

4,508,401

Operating income (loss)

581,201-449,377

Non-operating income
Interest income

3,949

3,991

Foreign exchange gains
Other

5,589
2,200

9,890
5,977

Total non-operating income

11,73919,8597,320

25,626

1,947
21,900––Non-operating expenses
Interest expenses
Provision of allowance for doubtful accounts
Listing expenses
Other

7,779

4,561

Total non-operating expenses

38,94630,188553,993-459,705–

9,907

Ordinary income (loss)
Extraordinary losses
Loss on sales of non-current assets
Other

679

–

Total extraordinary losses

679

9,907

Profit (loss) before income taxes

553,314-469,613

Income taxes

126,736-107,108

Profit (loss)

426,577-362,504

Profit (loss) attributable to non-controlling interests

72,433

104,119

Profit (loss) attributable to owners of parent

354,143-466,623―10―

Evolable Asia Corp. (6191) Financial Results for the Third Quarter of FY9/18

Consolidated Statement of Comprehensive Income
For the Nine-month Period(Thousands of yen)
Nine months of FY9/17(Oct. 1, 2016 – June 30, 2017)

Nine months of FY9/18(Oct. 1, 2017 – June 30, 2018)

426,577-362,504

Valuation difference on available-for-sale securities
Deferred gains or losses on hedges

6,061
3,107

596,643
216

Foreign currency translation adjustment

17,097-10,664

Profit (loss)
Other comprehensive income

26,267586,195

Comprehensive income

Total other comprehensive income

452,844

223,691

Comprehensive income attributable toComprehensive income attributable to owners ofparentComprehensive income attributable to non-controllinginterests

372,032

124,797

80,811

98,893―11―

Evolable Asia Corp. (6191) Financial Results for the Third Quarter of FY9/18(3) Notes to Quarterly Consolidated Financial Statements(Notes on going concern assumptions)Not applicable.
(Significant changes in shareholders’ equity)
The Company acquired the shares of EA1 Corp. through a share exchange and made it a subsidiary on October 6, 2017. As aresult of this share exchange, capital surplus increased 349,934 thousand yen. In addition, the Company acquired the shares of N’s
Enterprise Inc. through a share exchange and made it a subsidiary on November 6, 2017. As a result of the said share exchange,
capital surplus increased 459,400 thousand yen. The Company also acquired the shares of Destination Japan Inc.. through ashare exchange and made it a subsidiary on May 31, 2018. As a result of the said share exchange, capital surplus increased
500,000 thousand yen.
Consequently, at the end of the third quarter under review, capital stock stood at 1,067,860 thousand yen and capital surplus
came to 2,099,035 thousand yen.
(Application of special accounting methods for presenting quarterly consolidated financial statements)(Calculation of tax expenses)
The tax expenses are calculated by obtaining a reasonable estimate of the effective tax rate on profit before income taxes forthe fiscal year, which includes the third quarter under review, after the application of the tax effect accounting, and multiplying
the profit before income taxes by the said estimated effective tax rate.

(Changes in accounting policies)
Not applicable.
(Changes in accounting estimates)
Not applicable.

―12―Evolable Asia Corp. (6191) Financial Results for the Third Quarter of FY9/18(Segment information, etc.)[Segment Information]
Nine months ended March 31, 2017 (Oct. 1, 2016 – Jun. 30, 2017)
1. Information related to net sales and profits (losses) for the respective reportable segments(Thousands of yen)
Reportable segment
Online Travel
AgencyBusiness

IT Offshore
Development Other businesses
Business

Adjustment(Note 1)

Total

Amount onquarterly
consolidated
statement of income(Note 2)

Net sales
Sales
toexternalcustomers
Intersegment sales andtransfers

2,918,448

1,048,518

1,378

3,968,345―

3,968,345―

82,867―82,867-82,867―

Total

2,918,448

1,131,385

1,378

4,051,212-82,867

3,968,345

Segment profits (losses)

838,568

124,706-11

963,263-382,061

581,201

Notes: 1

The adjustment of -382,061 thousand yen to the segment profits (losses) includes corporate expenses which mainly
consist of general and administrative expenses that are not attributable to the reportable segments

2

The segment profit or loss has been adjusted to the operating income stated in the quarterly consolidated statement ofincome.

2. Information about impairment loss of property, plant and equipment or goodwill, etc. by reportable segment(Material impairment loss related to property, plant and equipment)
Not applicable.
(Material change in the amount of goodwill)
Not applicable.
(Material gain on bargain purchase)
Not applicable.

Nine months ended March 31, 2018 (Oct. 1, 2017 – Jun. 30, 2018)
1. Information related to net sales and profits (losses) for the respective reportable segments(Thousands of yen)
Adjustment(Note 2)

Amount onquarterly
consolidated
statement ofincome(Note 3)

Reportable segment
Online Travel IT Offshore
Investment
AgencyDevelopBusinessBusiness ment Business

Total

Other
(Note 1)Total

Net sales
Sales
toexternalcustomers
Intersegment
sales
and
transfers

4,620,476

1,597,300

101,669

6,319,446

446,319,490－

6,319,490－

135,398－

135,398－

135,398-135,398－

Total

4,620,476

1,732,699

101,669

6,454,845

44

6,454,889-135,398

6,319,490

Segment profits(losses)-319,734

137,646

75,463-106,624

0-106,624-342,752-449,377

Notes: 1 The category “Other” includes the business segments not included in the reportable segments, such as advertising revenue.
2

The adjustment of -342,752 thousand yen to the segment profits (losses) includes corporate expenses which mainly―13―Evolable Asia Corp. (6191) Financial Results for the Third Quarter of FY9/18

consist of general and administrative expenses that are not attributable to the reportable segments.
3

The segment profit or loss has been adjusted to the operating income stated in the quarterly consolidated statement ofincome.

2. Matters regarding change of reportable segments
The Company launched the Investment Business in the previous consolidated fiscal year under review, and the reportablesegments were changed from the Online Travel Agency Business, the IT Offshore Development Business, and Other Businesses to
the Online Travel Agency Business, the IT Offshore Development Business, and the Investment Business.
Because of the lack of importance of the Investment Business for the first nine months of the previous fiscal year, no
reclassification was carried out.
3. Information about impairment loss of property, plant and equipment or goodwill, etc. by reportable segment(Material impairment loss related to property, plant and equipment)
Not applicable.
(Material change in the amount of goodwill)In the Online Travel Agency Business, goodwill was posted upon the acquisition of the shares of consolidated subsidiaries, N’s
Enterprise Inc., EA1 Corp., Destination Japan and Airtrip Corp.

The goodwill posted upon these events was 997,395 thousand

yen, 237,887 thousand yen, 393,761 thousand yen and 2,628,248 thousand yen respectively. These amounts of goodwill weretentatively determined because the appropriation of the acquisition cost is not completed.
(Material gain on bargain purchase)
Not applicable.

―14―Evolable Asia Corp. (6191) Financial Results for the Third Quarter of FY9/18(Important subsequent events)
At the meeting of the Board of Directors held on August 14, 2018, the Company resolved to issue the 13th stock acquisition rights(third party allotment) (hereinafter referred to as the “Stock Acquisition Rights”) and to conclude a third-party allotment agreementwith a commitment clause, which includes the following information, after notification under the Financial Instruments and Exchange
Act has taken effect. As stated in the Notification Concerning Acquisition and Cancellation of the 9th and 10th Stock Acquisition Rights
which the Company announced today, the Company resolved to acquire and cancel all of the remaining 9th Stock Acq1uisition Rights
and 10th Stock Acquisition Rights issued on July 24, 2017 with effect August 29, 2018.

(1)

Date of allotment

September 6, 2018(2)

Total number of stockacquisition rights to beissued1,767(3)

Issue price(4)

Dilutive number ofshares due to thisissuance(5)

Amountprovided

(6)

(7)
(8)

(9)

of

funds

Strikeprice
andconditions for revisionof strike price

Method of solicitation or
allotment
Scheduled holders ofsubscription rights

Other

24,700 yen per stock acquisition right (total amount of the issue price: 43,644,900
yen)Provided, however, that if the result calculated by the same method used todetermine the above issue price on any of the days in the period from August 20,
2018 to August 22, 2018 (inclusive) to be determined by the Board of Directors of
the Company as the date for determining the final conditions for the Stock
Acquisition Rights based upon consideration of general circumstances including
stock price fluctuation (hereinafter referred to as the “condition determinationdate”) exceeds the above amount (24,000 yen), the issue price shall be the amountdetermined based on the calculation result on the condition determination date.
The total amount of the issue price is the amount obtained by multiplying theamount per stock acquisition right by 1,767, which is the total number of theStock Acquisition Rights.
Number of dilutive shares: 1,767,000
There is no upper limit to the strike price.
The lower limit to the strike price will be determined on the condition
determination date but the number of dilutive shares is 1,767,000 shares even at
the minimum strike price.
4,681,587,900 yen (approximate net amount)
The initial strike price will be the closing price of the Company’s common sharesin regular trading on the Tokyo Stock Exchange on the day of trading directly
preceding the condition determination date (hereinafter referred to as the“condition determination base price”).
The strike price will be revised to the amount equivalent to [92%] of the closing
price of the Company’s common shares in regular trading on the Tokyo Stock
Exchange on the day of trading directly preceding the effective date of each
exercise request of the Stock Acquisition Rights, but if the revised strike price islower than the lower limit of the strike price, the lower limit of the strike pricewill be used as the revised strike price.
Third-party allotment
Merrill Lynch Japan Securities
After notification under the Financial Instruments and Exchange Act has taken
effect, the Company plans to conclude a third-party allotment agreement with acommitment clause with Merrill Lynch Japan Securities Co., Ltd. (hereinafterreferred to as “Merrill Lynch Japan Securities”). The third-party allotment
agreement will provide for the following:・ Designation of exercise of the Stock Acquisition Rights by the Company
・ Suspension of exercise of the Stock Acquisition Rights by the Company
・ Request for purchase of the Stock Acquisition Rights by Merrill Lynch Japan
Securities
・The Company shall take measures to restrict the exercise of stock acquisitionrights pursuant to Rule 434, Paragraph 1 of the Securities Listing Regulations
established by the Tokyo Stock Exchange, Rule 436, Paragraph 1 through 5 of
Enforcement Rules for Securities Listing Regulations established by the
Tokyo Stock Exchange, and the “Regulations concerning Handling of
Allocation of New Shares to a Third Party, etc.” as defined by the Japan
Securities Dealers Association
The agreement states that Merrill Lynch Japan Securities cannot transfer the Stock
Acquisition Rights to another party without the approval of the Board of Directorsof the Company and that, even if the Stock Acquisition Rights are transferred, thetransferee shall succeed to the rights and obligations of Merrill Lynch Japan―15―

Evolable Asia Corp. (6191) Financial Results for the Third Quarter of FY9/18

Securities.
Note: The amount of funds raised is the amount calculated by subtracting the approximate amount of expenses required for the issuanceof the Stock Acquisition Rights from the sum total of the total amount paid for the Stock Acquisition Rights and the total value of assets
invested when exercising the Stock Acquisition Rights. The total amount paid for the Stock Acquisition Rights is the expected amountcalculated on the assumption of figures such as the closing price on the day of trading immediately preceding August 14, 2018
(hereinafter referred to as the “issuance resolution date”), and the total value of assets invested when exercising the Stock Acquisition
Rights is the amount on the assumption that all of the Stock Acquisition Rights are exercised at the initial strike price, but the final
amount paid for the Stock Acquisition Rights and the initial strike price will be determined on the condition determination date. If thestrike price is revised or adjusted, the amount of funds raised will increase or decrease. In addition, if the Stock Acquisition Rights are
not exercised within the exercise period or if the Company has canceled the Stock Acquisition Rights that it has acquired, the amount offunds raised will decrease.

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