[Logo of JASDAQ]
December 21, 2018

Company:

BroadBand Tower, Inc.

Representative:

HiroshiFujiwara,President,

Chairman of the Board of Directors and CEO(Company Code: 3776)
Contact person:

Mieko Nakagawa, Executive Director& Member of the Board, Legal & Accounting Group(Tel:+81-3-5202-4800 (Main switchboard))

Notice regarding the Change in Subsidiaries (through Share Transfer)
BroadBand Tower, Inc. (the "Company") has resolved at the Board of Director's meeting held on
December 21, 2018 that the Company will transfer all of the shares of IoT Square, Inc. ("IoT Square"), asubsidiary of the Company, held by the Company to Internet Research Institute, Inc. ("IRI") as described
below (the "Share Transfer").

As a result of the Share Transfer, IoT Square will be excluded from the scopeof consolidated subsidiaries of the Company beginning from the next fiscal year.

1.

Reason of the Share Transfer

As informed through the Company's Press Release "Notice regarding the Simplified Incorporationtype Company Split for the Establishment of a New Subsidiary" dated August 18, 2017, the Company havesplit up a part of its businesses, namely its global IoT business, consumer business and new business whichthe Company is developing, to establish a foundation of those businesses and to prepare for the future
expansion of the IoT market, etc., and established IoT Square through such split-up for the purpose ofdeveloping IoT (Internet of Things) business aimed at future generation and integrated business of IoT andAI (Artificial Intelligence).
However, IoT Square is under a difficult financial condition due to increases in necessary funds for
system development and sales and general administrative expenses, and its financial restructuring through anadditional fund injection from the Company is also difficult because the Company is applying its funds tothe new data center.

After considering potential transferees of IoT Square, the Company has decided totransfer the IoT Square shares to IRI based on a valuation by a third party, following a transfer of Minakami
solar power business, a part of IoT Square's assets, to the Company without compensation, seeking toreconstruct IoT Square thereafter through the injection of funds by IRI.

1

2.

Summary of the Changing Subsidiary

(1)

Name

IoT Square, Inc.

(2)

Address

2-1-6 Uchisaiwaicho, Chiyoda-ku, Tokyo(3)Name and Title of Representative

Hiroshi Fujiwara, President and CEO(4)

Business

IoT business, consumer business and new business, etc.

(5)

CapitalJPY 150 million(6)

Date of Establishment

October 2, 2017

(7)

Major

Shareholder

and100% owned by the Company

Shareholding Ratio(8)

Relationship between the listedCompanyand

theCapital relationship

Relevant

Company

100%

investedbytheCompany
Personnel relationship

The Company dispatches two(2) members to the Board ofDirectors of the relevantcompany.

Transactional relationshipIoT Square entrusts internalsystems to the Company andtheCompanyentrusts

operations and operations ofsolar power business to IoTSquare.

(9)

Status of relationship with100%

subsidiary

related parties

Companyof

theResults of Operations and Financial Condition of the Relevant Company in Past Three (3) years(Non-consolidated)
Fiscal Year

Period ended June 2018

Net Asset

JPY 360 million

Total Asset

JPY 715 million

Net Asset per ShareJPY 40,099.14

Sales

JPY 160 million

Operating Income (loss)(JPY 263 million)

Ordinary Income (loss)(JPY 270 million)

Net Income (loss)(JPY 270 million)

Net Income (loss) per Share(JPY 30,100.51)

Dividend per Share

JPY 0(Note) 1. The fiscal period ended June 2018 is 9 months period because IoT Square was established onOctober 2, 2017.
2. Minakami solar power business was transferred to the Company without compensation on2

November 2018 and its net asset as of the end of December 2018 was approximately JPY 36 million.

3.

Summary of Transferee of the Share Transfer

(1)

Name

Internet Research Institute, Inc.

(2)

Address

1-6-1 Nishishinjuku, Shinjuku-ku, Tokyo(3)

Name and Title of Representative

Hiroshi Fujiwara, President and CEO(4)Business

Consulting business, management of investee companies, etc.

(5)

CapitalJPY 100 million(6)

Establishment

October 5, 2017

(7)

Net Asset

JPY 1,107 million (end of September 2018, consolidated)(8)

Total Asset

JPY 1,339 million (end of September 2018, consolidated)

(9)

Major

Shareholder

andInternet Research Institute Ltd

100% (Note)

Capital relationshipThe relevant company is theShareholding Ratio(10)

Relationship between the listedCompanyand

theRelevant

largest shareholder of theCompanyCompany

holding

approximately 21% of theCompany's shares.
Personnel relationshipTwo (2) members of theBoard of Directors of theCompany

arefromtherelevant company.
Transactional relationship

The Company provides data
center services, etc. to therelevant company.

Status of relationship withThe Company is an affiliate

related partiesof the relevant company
accounted for by the equity
method.

* Internet Research Institute Ltd is listed on the Tel Aviv Stock Exchange of Israel.

4.

Number of Shares to be Transferred, Amount of Transfer and Status of Shareholding Before andAfter Transfer(1)

Number of Shares Held Before

9,000 shares

Transfer(Number of Voting Rights:9,000)(Ownership Ratio of Voting Rights: 100%)(2)

NumberofShares

tobe9,000 shares
3Transferred(Number of Voting Rights:(3)

Amount of Transfer

JPY 7,650,000(4)Number of Shares Held After0 shares

Transfer(Number of Voting Rights:9,000)

0)(Ownership Ratio of Voting Rights: 0%)

5.

6.

Schedule(1)

Date of Resolution of the Board of Directors

December 21, 2018(2)

Date of Execution of the Agreement

December 21, 2018(3)

Closing Date of Share Transfer

January 4, 2019 (scheduled)

Future Outlook

In the future, the Company expects to record a loss on valuation of shares of subsidiaries on its
non-consolidated results for the fiscal period ending December 2018.

Also, the effect on consolidated

results for the fiscal period ending December 2018 is currently under review and the Company will inform
promptly if such effect occurs.

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