FreeBit Co., Ltd.
Financial Result Briefing for the Fiscal Year Ending April 2018
June 8, 2018

Presentation
Wada: Thank you very much for your patience. Now we would like to start the financial results briefing for
FreeBit's fiscal year ending April 2018. I am Wada from the group management division, and I will be the MCof this briefing. I would like to introduce the speakers: from the right, Mr. Nobuaki Tanaka, representative
director and president.
Tanaka: Hello, nice to meet you.
Wada: Next is Mr. Takashi Shimizu, director and Executive Vice President.
About today's agenda, Mr. Tanaka will give a presentation on the financial highlights and progress in ourbusiness. That will be followed by a Q&A session. We have distributed questionnaires and we appreciate yourcooperation. Now Mr. Tanaka will give a presentation. Mr. Tanaka, please.
Tanaka: Ladies and gentlemen, thank you very much for attending our financial results briefing. Today we will
see the full year results of the fiscal year ending April 2018. I will first to talk about the results followed by thisfiscal year’s business plan.

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First of all, I would like to report on the full-year results of the fiscal year ending April 2018. Net sales was
38.653 billion yen, up 9.7% y-o-y. Operating profit was 1.851 billion yen, up 40% y-o-y. Ordinary profit was
1.426 billion yen, up 76% y-o-y. Up to here, in the ordinary profit we had some unexpected expenses at the
beginning of the fiscal year, but net sales and operating profit were more or less in line with our plan.
However, due to several factors which we will explain in detail later, we had a net loss of 567 million yen.
Unfortunately, I have to report that the fiscal year ended in a net loss.

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Looking at the topics of the fiscal year, operating profit increased by 40% year-on-year. Just looking at the
fourth quarter, operating profit was a historical high. Regarding the factors of the increase in sales and profit,
first is the very strong growth of the internet service provided to condominiums by our group company Giga
Prize.
Next in the health tech business, which we have established as a new segment from 2 years ago, we saw verystrong growth in the fiscal year. Those were factors that contributed to an increase of 9.7% y-o-y in net sales.
Looking at individual businesses, as I just said, internet service targeting condos increased sales significantly
from the previous year. Also, the ad technology business, including affiliate ads and DSP, delivered very solid
results. We also saw an increase in the marketing business targeting social media. This business also
contributed to our profit.
Sales from the health tech business centered on FreeBit EPARK Healthcare was also strong, and become
profitable on a single month basis. We were aiming for this from the beginning of the fiscal year, and we finallyachieved this in the fourth quarter. This was a fiscal year in which our new business segments started making
steady contributions to the overall group.

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3This graph shows the historical operating profits together with net sales. As I just mentioned, in the fourth
quarter of last fiscal year we generated 885 million yen in operating profit, which was a historical high in termsof quarterly operating profit basis.

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4Next is the breakdown of net sales. The three businesses: broadband, mobile, and ad technology accounted
for a very large part of the overall figure. The broadband business generated 2 billion yen in segment profit,
while the mobile business is still making some losses, but it has grown to generate a very large part of net
sales. In the ad technology business, net sales was 15 billion yen, accounting for the largest part in our group.
The health tech business has just been established, but it generated net sales of 1.6 billion yen. On a full year
basis, it ended in a loss, but in the second half of the year it turned profitable.

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Looking at changes in net sales, this will be a repetition, but the internet service targeting condos operated
by Giga Prize group grew significantly. The health tech business revenue also saw major growth compared tolast fiscal year.

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The internet service targeting condos also contributed greatly to operating profits. The ad technology business
operated by Full Speed group also made a major contribution. Apart from extraordinary factors, profit grew
to about 2.7 billion yen, and the figures are shown on the right hand side including upfront investments andtemporary factors. The full-year operating profit was 1.85 billion yen in the end.

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Gross profit grew by 29.8%. Currently our group is strategically focusing on growing the top line, and as aresult, the actual amount of gross profit has been growing fully in line with our plan.
In order to grow our business, we are increasing overall SG&A expenses, although the situation differs foreach business. There are some businesses where we are increasing expenses in an early stage of new businessareas, while with Giga Prize group, SG&A expenses are increasing in order to establish a structure capable ofresponding to the extremely strong need from the market. As a result compared to the previous year, SG&A
expenses increased from 6.8 billion to 8.8 billion yen.
However, since the gross profit is growing even more, the operating profit is also growing, and as we raise
efficiency of the business going forward, we expect that our operating margin will rise as well.

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In addition, our company has a very large amount of network related expenses, which stands out as a cost,
but the fixed network cost on the bottom part is not changing very much. However, as I will explain in moredetail, we are looking to actively make new investments to update the network. In the current fiscal year, weare planning to make new investments in the fixed network, so this bar chart of the network-related costs
may change its composition according to our current plan.
In mobile, we pay network expenses to NTT Docomo. Their service is provided to all businesses operators at
the same price, but the connection fee changes each year. The change may be applied to the previous fiscal
year in some cases. As shown in the light blue part, the adjustment for this fiscal year happened to be a bit
larger than in the past. This happens because each year, the network expense is adjusted according to the
supply and demand trends of the overall mobile market, so we appreciate your understanding that this kindof adjustment may happen in the future as well.

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9For SG&A expenses, as I just mentioned, we have various areas where we are strategically increasing theamount. In particular, labor costs are increasing from the previous fiscal year, due to the increase in personnel
at companies including EPARK Healthcare, Giga Prize, and a company called FORiT which operates the group's
affiliate business, in order to strengthen their sales capacity. Therefore, the overall graph is becoming a higher
mainly because of the growth in labor costs.

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10This is the graph that shows the number of employees, and we can see a clear trend. The growth curve isflattening out, with our structure becoming increasingly established, but we are taking ongoing efforts tosecure personnel to respond to demand at companies including Giga Prize Group.

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11Ordinary profit increased in line with the increase in operating profit by 530 million yen from the previous
year. In addition, losses from investments in companies under the equity method were reduced. As a result,
we ended the year with ordinary profit of 1.426 billion yen.

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12Next is the net profit/loss. Although ordinary profit increased, there were some impairment losses. In the adtech business, we have software for developing various new services, and alongside the development of new
software, we have written down some of the old parts in the fiscal year.
There was also an increase in the amount of corporate taxes, and the final figure was a negative 560 million
yen. However, this reflects our actions towards the next fiscal year: we wrote down unnecessary assets, orrather assets that would not raise efficiency, at an early timing. I’m referring to impairment loss in the ad techbusiness and the cost related to business withdrawal, accounting for 160 million yen, shown on the right side.
This reflects our intention to restructure the business and actively improve the structure of the balance sheet.

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Looking at the balance sheet itself, total assets have grown quite significantly compared to the previous fiscal
year. We are strategically rising our liquidity on hand, and since we are currently able to procure funds at a
low interest rate, we increased liabilities and cash/deposits to secure funds that would be needed for our next
initiative. Therefore, the total assets grew to about 30 billion yen.

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14That was the overall summary. From here, I would like to talk more in detail about each business. In the
broadband business, the current factor for sales growth is mainly the internet service targeting condominiums
provided by Giga Price Group.
In the segment profit there were several factors for a decrease. One is the effort to strengthen the structure
at Giga Price Group, which is causing an increase in SG&A expenses, and in order to expand the internet
service and IoT service targeting condos, we are building a sales network in partnership with Aeon. We haveinitial expenses coming before the results, so this is also a cause for decreased profit. As a result, the segment
profit was 2 billion yen.
The increase in SG&A expenses will be absorbed by increased net sales going forward. In the Aeon Housingbusiness, currently we are making losses in the early stage, but this loss will be reduced over time to breakeven, and we plan to turn profitable and increase profits in the future. Therefore, although we are still making
losses in this fiscal year, over a 2 to 3 year term, this business will start generating profits. Rather than directly
earning revenue, by acquiring users in the condo internet service, we expect that they will become a channel
to expand sales of our new IoT services.

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Looking at the internet service targeting condos, subscriptions have been increasing to exceed 250,000
households as of March 2018. As you can see in the graph, the number has surged since around 2015, and in
the current fiscal year we are still expecting strong growth, as shown in information disclosed by Giga Price.
In the current fiscal year, we are aiming to reach nearly 400,000 households in total subscription.

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As we increase the number of users, we will have an increased number of contact points with users. We arenow engaging in several next-generation real estate tech services. As an IoT platform, we have invested inLive Smart's technical device that can control electrical appliances in the house, as well as a company thatprovides smart locks that can remotely open and lock keys. Through such business partnerships, we areoffering services to major property developers and house makers.
As a result, our services have been selected for a joint project by Daito Kentaku and Tepco. We are disclosing
various experiments that we have started in relation with this project with expectations for increasing sales
going forward.

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Next is the mobile business. Since we have various upfront expenses, the segment made a net loss. There aresome difficulties in increasing net sales despite the price decline of Docomo connection fees, but the efficiencyof the business has been improving, so for the current fiscal year, we are ready to generate profits. I would
like to elaborate on this part later on.

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In the mobile business, the main part of the net sales is currently OEM. Our main business is to provide
networks to MVNO businesses as MVNE, but we have launched several additional services. One of them is theIP phone service, and we provide a business phone service called Mobabij, which combines an IP phoneservice and our server/cloud development and operation technologies to provide directly to corporate clients.
Although we took time in technological development due to various factors, recently it is selling very well,and since we provide this service directly to companies at end-user price, the profitability keeps increasingalongside the increase in the number of users. Therefore, we are expanding sales of this service with the aim
to build a high-earning business. Today I just introduced you to the service, but through services like this, weare moving forward with raising efficiency in generating profit in the mobile business segment.

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Next is the ad technology business. On a year-on-year basis, net sales was up 5.1% and segment profit was up
53%. Due to the sales growth, the gross profit of the business is also growing. However, due to several factors
including the change in ITP and other technologies by Apple in December of last fiscal year, which impacted
the affiliate service, we were not able to grow as much as planned. However, we are currently dealing theseissues, and this ad technology business segment is now expected to achieve growth in the current fiscal year,
and as a result, we were able to grow both revenue and profit.

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Looking at the progress of initiatives in the ad technology business, we have spun off the video ad network
business before, and as we announced, we have added DSP and gathered other ad tech-related businesses inthis company.

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The affiliate service company FORiT has expanded outside of Japan into Asian markets. Currently the
Taiwanese market is growing significantly, and as Taiwanese users are willing to purchase Japanese products,
we act as a bridge between clients that sell Japanese products and Taiwanese media, and we currently run abusiness as affiliate service provider. The same model seems to be viable in other Asian markets, as there
seems to be steady demand for Japanese products. However, we have been finding that the countries tend
to lack sufficient channels or frameworks to purchase such products, so we are currently preparing to expand
such sales channels.

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Also, the marketing service for social media is showing very strong performance. This is about the Japanesemarket, but in the domestic market there is a very large number of foreign visitors, so we are working tooperate our social media related business targeting non-Japanese users as well. We operate services both forJapanese users and foreign visitors, and we just have captured a huge demand to grow sales.
However, one issue is securing human resources and education, and our structure has not caught up with thestrong demand, therefore we recognize the need to have a robust framework to enable speedy education.
We are working on these issues, which actually is a struggle to deal with a fortunate situation.

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The cloud business is being operated efficiently, and rather than achieving high growth in net sales, we arefocusing on taking care of our existing customers and improving management efficiency and operating thebusiness in a solid manner.

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The health tech business, centering on FreeBit EPARK Healthcare, has kept growing net sales as shown in thegraph. On the right we show the services provided by FreeBit EPARK Healthcare, including ”Kusurino
Madoguchi” "Shohoubin" "Okusuri Techo" "Minnnano Okusuribako" which generate the main sales. As a newservice, MEDIP P is a digital signage service provided to medical facilities. We acquired the core part of thisbusiness last year from Kosaido, and from this month we have started the services "Comet Care" and "Kaigo
Sapuri". We acquired "Comet Care" from TEAC ONKYO.
Although we do not disclose the name of the company, there is a nursing care facility business run by a major
corporate group and "Comet Care" is the nursing care system/application that this group has installed in allof its facilities.
"Kaigo Sapuri" targets relatively small-scale facilities and group homes to enable the caregivers to take records
on tablets such as iPads instead of handwriting. Currently we are working to strengthen the business targeting
nursing facilities, and now that we have both businesses, one with a major client and another with the clientbase in small to midsized entities, we are poised to expand our market share in this area.
We are also moving forward with linking the services with the businesses targeting pharmacies run by EPARK
Healthcare, with the aim to accelerate growth in this health tech business.

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As I just mentioned, the upper half of this slide shows "Comet Care", which we acquired from TEAC ONKYO,
effective June 1. Its service is used in all of the facilities run by a major player ranking number 2 in sales in thenursing care facility industry. Of course this service is provided in other facilities as well, and we are looking
to keep expanding this "Comet Care" service to large and mid-sized operators.
As shown the lower part, Kobe Digital Labo is our partner in providing the service "Kaigo Sapuri", which targets
stand-alone nursing care facilities instead of major facility chains. We have decided to operate this "Kaigo
Sapuri" business as a joint venture.
With these two businesses, we can cover large and mid-sized clients with "Comet Care" and small to mid-sized
operators with "Kaigo Sapuri", and we want to expand both to achieve a leading market share in the market
for care service apps.

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We have been originally operating the "Okusuri Techo" service, and there has been strong growth in thenumber of downloads. We haven't disclosed the actual number of pharmacies, but the number of pharmacy
reservations has also kept growing. The reason for the slight decline from a very high point is that the peak
was the pollen allergy season, so it was a spike due to a seasonal factor, but basically the trend is consistent
growth. We are seeing very strong growth in the current fiscal year as well.

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Those were the results of the last fiscal year, and from here I would like to talk about the forecast for thecurrent fiscal year ending April 2019.

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Our corporate philosophy is “We work to expand the internet to contribute to society”. We have kept growing
our internet services, and our target as a group is to achieve consolidated net sales of 50 billion yen andconsolidated operating profit of 5 billion yen in the fiscal year ending April 2020. We are already in the fiscal
year just before the target year.

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We are working towards net sales 50 billion yen with focus on our current growing businesses: health tech,real estate technology, and IoT.

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These are the figures. In the fiscal year ending April 2019, our forecast for net sales is 45 billion yen, and since
the results of the last fiscal year was 38.6 billion yen, we expect an increase of 16.4% y-o-y. The operating
profit is forecast at 2.5 billion yen, an increase of 35% y-o-y. Ordinary profit is forecast at 2.35 billion yen, an
increase of 64%. Since we made a net loss last fiscal year, for the current fiscal year forecast is 250 million yen,
for an increase of 810 million yen.
Topics to expand sales: in the internet service for condominiums, we expect even stronger growth than last
fiscal year. This is a plan based on a very strong demand, so we have secured a structure to enable this byincreasing SG&A expenses, and we are working towards achieving this growth within this structure.
Another factor for sales growth is our Mobabiji service targeting corporate clients, which is growing into amajor contributor to our revenue. The ad technology-related services have kept growing both in sales andprofits. In the current fiscal year, we continue to expect further growth. We are also working to expand ourhealth tech business, of which the largest is EPARK Healthcare.
In terms of investments towards these targets, we are developing new services, particularly IoT services in
the real estate field, and we are planning to secure sufficient resources with some of the expenses happening
at the early stage.
Sales in the health tech business is growing significantly, and we are in a position without many competitors.
This means we can just keep on our current activity to increase operating profit in the current fiscal year, but
we have decided to aggressively move forward this business: within the scope of controllable operating profit,
we are going to increase SG&A expenses in an effort to capture even more market share. We want to secure
our dominance before newcomers enter the and grow into competitors. Therefore, we are planning toincrease sales and promotional expenses.
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The third line, about traffic not in mobile but the broadband business, we are planning to renew our network.
We're expecting to break even around next fiscal year, but in this fiscal year we will have some upfront
expenses, or rather there is a certain period where the network expenses will overlap. Therefore, we expecta loss in the broadband business this fiscal year, but this is an intentional loss in order to expand revenue fromnext fiscal year onwards.

Looking at each segment: our forecast for net sales in the broadband business is 14.97 billion yen, increasing
by 20%, but the profit is expected to be cut in half. The internet service for condos provided by Giga PrizeGroup will increase both sales and profit, the conventional fixed network broadband business for ISPs will
have a large amount of upfront expenses, resulting in this figure.
In the mobile business, we expect 7.3 billion yen. While a decline in the network expense paid to Docomo isa positive factor, there are some factors that give difficulty to grow net sales. Our forecast is 7.3 billion yen,down 9.5% from the previous fiscal year.
Nevertheless, the decline in Docomo-related expense is a positive effect to the profit, and we are providing
and growing other services with high added value, so we expect that the overall mobile business will generatea profit.
In the ad technology business, we are planning for solid growth both in net sales and profit, with 16% sales
growth and 27% growth in operating profit. In the cloud business, we do not expect a large change in thisfiscal year.

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Lastly, the health tech business is in the midst of growth. The net sales forecast is 3.5 billion yen, more thandoubling y-o-y. In terms of profit, this business just turned profitable from the first quarter of last fiscal year,
and for the current fiscal year we expect a profit of 150 million yen, increasing by 680 million yen y-o-y.
Regarding the pace of sales growth, we will be able to deliver more profits if we do not spend as much
expenses, but as I just mentioned, we are strategically spending an aggressive amount of expenses in orderto capture market share.

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The sales and profit trajectory will look like this in the graph. We included our forecast for the fiscal year
ending April 2020, and the second bar from the right shows the current fiscal year. Compared to the previous
fiscal year, we expect high growth towards the 50 billion mark in next fiscal year's net sales.
For the current fiscal year, operating profit is forecasted at 2.5 billion yen. However, we have upfront
investments in the health tech and real estate tech businesses. Also, there is the overlapping fee due to therenewal of the network in the broadband business. These are upfront investment towards profit growth forthe fiscal year ending April 2020 and the following years. Without such investments, we will be able to deliver
more operating profit in the current fiscal year, but we are spending additional expenses in order to deliversolid results against our commitment to the figures in the fiscal year ending April 2020 and growth for the
coming years. We appreciate your understanding for our policy.

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We have several focus businesses, and we have been presenting this graph from the last fiscal year, where
you can see that the health tech business started off with large amounts of losses before turning profitable.
However, some businesses, including those related to Aeon Housing in the real estate tech business, are still
expected to make a loss in the current fiscal year. However, the amount of loss will keep declining, so that by
the fiscal year ending April 2020, they will either break even or remain with an almost negligible amount ofloss.

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On a qualitative basis, as I have already mentioned, the focus in the health tech business is how to grow thebusiness operated by FreeBit EPARK Healthcare. We're aiming to significantly increase the traffic to a media
service called "Kusurino Madoguchi". If we continue this, partner pharmacies will naturally keep increasing.
We will also take efforts in sales activities, but we believe this is a very important way in which we realize
growth.
We also have new health tech related businesses. Especially in the nursing care field, in June we suddenly
gained the position to aim for a number one market share. Therefore by growing this area, we want tostrengthen profitability of the overall health tech business.
In the ad technology business, we will continue consolidating tech companies and strengthening our humanresources to further increase revenues, and in the affiliate service, despite various changes in the environment,
we have been steadily increasing our revenue and profit. We would like to maintain this growth in the current
fiscal year as well.
In the broadband business - even with the overlap in network expenses that I have mentioned several times- we have included network renewal in this fiscal year’s plan. We are working towards improving revenue andquality in our existing legacy businesses.

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In the mobile business, despite various issues brought up by the media, the MVNO market itself is steadily
growing. Compared to the peak period when this field was gaining media attention, the market seems to havematured quite a bit. In any case, it is a very large market, in which we are one of the main players, and we areseeing steady growth in our customer base.
However, the competition is also intense, so it is hard to improve profitability if we only continue this business.
Therefore in the mobile business, we are launching various IoT services and in-house services, including the
expansion of sales in Mobabiji targeting corporate clients.
In the cloud business, this fiscal year's focus is to steadily continue the provision of the virtual cloud service,
which we call VDC, in collaboration with major system integrators to cater to the Japanese market.
In this fiscal year, we want to continue improving our revenue and profit. In terms of net profit, we booked
impairment losses for old software including those related to ad technology, and by doing so we have cleared
up our financial structure and balance sheet in the last fiscal year. Now that we no longer have such
impairment loss factors, we are making a fresh start in the new fiscal year. We appreciate your continuous
understanding and support to our business. With this I would like to close my presentation. Thank you verymuch.

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Question & Answer
Wada: Now we would like to open the Q&A session. If you have a question, please raise your hand. Pleaseraise your hand so that the staff can bring you a mic. Does anyone have a question? Yes, to the attendee inthe second row.
Kakuta: Thank you for the presentation. This is Kakuta from Fisco.
I have two questions. About newly acquired "Comet Care", I heard it is a system for nursing care, while EPARK
is for medical facilities or pharmacies. I think you mentioned you are pursuing synergies, so I’d appreciate if
you can talk about what kind of collaboration or benefit will be born in the future.
Tanaka: I will answer this question. Actually, we already started collaboration with "Kaigo Sapuri". After all,residents of nursing care facilities usually have some medicine prescribed from the hospital, and theircaregivers provide support according to the instructions of the doctor. In many cases, the caregiver divides
the medicine into smaller portions, or provides other manual support in various ways.
In short, caregivers carry out very burdensome work, and not being pharmacists, they are worried of risks
such as the patient accidentally swallowing something. To deal with this situation, the medication history inthis app can be linked with the "Okusuri Techo" which EPARK Healthcare offers. By linking the medication
history, managing medication will no longer be manual work, but can be kept in a properly recorded form.
We have about 11,000 pharmacies tied up with FreeBit EPARK Healthcare, so it is possible to take in those
pharmacies in any area. So FreeBit EPARK Healthcare works as an intermediary, and earns fees like system
contract fees as well as fees for various types of assistance.
"Comet Care" is also a company that serves bigger facilities, but the same situation is occurring in the field ofnursing care. By combining the two, we can help improve convenience for caregivers, so we believe thiscreates a business synergy.
Kakuta: Thank you. Another question is about investments in real estate tech going forward. In your businessmodel, I understand that you operate real estate stores called Aeon Housing, and you also sell smart keys and
IoT conversion systems for houses and apartments. So where are you actually investing, and is the growthmodel to increase the number of stores or to expand sales of such systems? I’d like to get organized on yourapproach in this area.
Tanaka: The purpose of the Aeon Housing business is not to create a real estate brokerage network, but tocreate a sales channel for our services. We are currently working on the launch of the Aeon Housing business,
and we have more than 10 directly operated stores, but as we build the business model, we assume that store
management will gradually change into a business that we do not need to engage directly in.
However, if that store network grows bigger and bigger within Aeon, it will become an entrance to sell our
condo internet service, as well as a direct contact point with customers for IoT equipment. It is a chance tocapitalize on Aeon’s very high brand recognition among consumers, with malls that attract extremely hightraffic. We are planning to launch this structure by ourselves, while taking some costs and risks, but we assume
that this will gradually become less of our main business, and more of a sales channel for our core businesses.

Kakuta: Thank you very much.

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Wada: Any other questions? Then, to the attendee in the front.
Murakami: My name is Murakami, from SMBC Nikko Securities.
I have a couple of questions. The first one is about upfront investment. In the current fiscal year, you said that
expenses will increase due to upfront investment. However, for example, looking at the segment profit planin p38, I have the impression that such upfront investment will end in the current term. Is it right to expectthat the current pace of business scope expansion will end in the current term? Naturally I think you willcontinue investments, but please let me know whether the current term would be the last to see this level of
expense.
Tanaka: As we move forward with our business, we don’t expect the number of businesses incurring upfront
expenses to reach zero. However, for the current fiscal year - this pink part adds up to around 3.5 billion yen
in operating profit - breaking down this additional one billion in upfront costs, the overlapping fee for thebroadband-related new network accounts for a significant portion, around 500-600 million. Furthermore, thepart for additional advertising expenses in the health tech business is in the hundreds of millions of yen.
Moreover, in the health tech business, the digital signage business is still making losses, although the amountis not bigger than the level I just mentioned. The business related to Aeon Housing is also making losses in thehundreds of millions of yen. Because of these factors, the pink area is about 1 billion.
This double cost of network expenses is related to network construction, so this is a cost of which the schedulecan be set. In our current schedule, we expect that this overlapping situation will no longer remain in the next
fiscal year. Meanwhile in the healthcare business, we are intentionally building up promotion expenses, so as
we expand market share and gain more controlling power, we may no longer need to spend such an amount.
Also, if our profitability improves, even if we spend the same level of promotion expenses next fiscal year, as
we are trying to increase sales this fiscal year, we may be able to absorb that amount in the next fiscal year.
In addition, although the Aeon Housing business related to the real estate tech business is still likely to makea loss this fiscal year, we expect that the loss will be significantly reduced in the next fiscal year, as I mentioned
in the previous explanation. As a result, although it is not written in the pink part, we are looking to spend thiscost to ensure achieving the 5 billion yen target in the next fiscal year.
Murakami: Regarding my second question: in the explanation at the beginning, I think you said you were
trying to keep a certain amount of cash even by borrowing some money, but is this because you have any
specific demand for cash, such as for M&A? Of course it may be impossible to say the contents, but can you
share something about your M&A strategy, such as the potential scale of business you are willing to acquire?
Tanaka: As far as M&A is concerned, whenever there is some benefit to our business, we recognize an
opportunity. We have taken actions in the past, and we are planning to engage in M&A activities in the future
as well. We are increasing cash on hand not because of any specific case, but as we expand various businesses,
we will be able to make quicker decisions when we have sufficient liquidity on hand. In case of an M&A
opportunity, in the current market, the speed of decision-making is also a very big advantage in a competition.
Therefore we want to be ready to take on new challenges with sufficient cash on hand. Since we are able toprocure funds at a very low cost in the current market, we are increasing cash on hand by increasing
borrowings.

Murakami: This is my last question: I think promotion, or sales activities, are quite important in order to seek
expansion of sales in all, or most of, your businesses. In order to find new customers in nursing care or mobile,
I imagine that a strong sales force would be essential. However, in the absence of synergies across those
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businesses, do you take a strategy of holding salespersons in each division in the company, or are you looking
to other ways like appointing sales agencies? Could you tell me about your sales strategy, including how you
hire people?
Tanaka: It depends on the business, but for the broadband business and the mobile business, the majority ofcustomers are MVNO business operators or ISP companies. In these businesses, our salesforce requires
advanced knowledge, but we do not need a large number of people here. If we succeed in signing contracts,
the business structure works in a way that the client spends SG&A expenses to acquire users. In terms of sales
personnel, we have not struggled to keep up with the demand so far, and the current structure is to be
maintained.
In the ad technology business, for example the Full Speed group has quite a large salesforce of more than 100
people. The competition over human resources is very intense in this area, so it is hard to secure personnel,
but we are making efforts to convey our strengths and attract talent.
As for the health tech business, manpower is also needed to expand sales activities to pharmacies, as well as
nursing care facilities going forward. Due to the nature of this industry, expert knowledge is required.
Therefore, with the lack of synergies with the other businesses, we will be organizing a specialized sales force.
In the consumer media business, such as “Kusurino Madoguchi”, we need to secure people with high skills in
media management, rather than hire a large number of people. While controlling advertising and promotional
expenses, we will need to spend substantial amounts for this purpose. Although each business faces adifferent situation, the conclusion is that each of them has to keep securing human resources by themselves.
Akagi: I am Akagi, from Mizuho Securities.
I have two questions. The first is about the operating margin forecast for the current term. The operating
profit margin in the previous term was 4.7%, and this term it is improving to 5.5%. Even with the decrease in
Docomo’s usage fee, I assume that there is a part where cost is reduced compared to the previous term, evenas you increase upfront investment and others costs in the current term. I’d like to know what the potential
factors are.
Tanaka: Comparing the previous term and current term, a big improvement is the performance of FreeBit
EPARK Healthcare on a standalone basis: a loss over 450 million yen will turn to a profit on a full-year basis,so this improvement is quite considerable. Another factor is mobile devices: because in the previous term wewrote down the stock of smartphones by about 160 million, and that would not happen in the current term,
the operating income will improve significantly from this aspect. In addition, the amortization of goodwill in
the consolidation adjustment account is going to finish, so in terms of the business structure, compared tothe previous term, it has become much easier to generate operating profit. With that structure, we are taking
several measures to increase it further to 5 billion yen.
Akagi: Thank you. My second point is about the health tech business: this might be a bit abstract, but in thecurrent fiscal year you are doing promotions to increase PV, customer traffic and contracts in your media.
Regarding ways to earn revenue, I think that the current source is system fee, etc. I’d like to hear about whatkind of revenue potential can be expected when this media grows further in the future.

Tanaka: Currently we are managing this media while specializing in enabling patients to have prescribed
medicine quickly dispensed. So it’s all about partnering with the pharmacies, and the business model is tokeep gaining system usage fees paid by the pharmacies, and this structure is likely to continue for several
years. However, the PV and number of unique users has become quite large, so as a future potential of thisSupportJapan
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media, we may be able to place ads for OTC drugs, or operate e-commerce. Currently, before going there, we
are working on further penetration of the service. The number of partner pharmacies has exceeded 10,000,
but there are 58,000 in the whole country, so currently we are managing the media with the aim to increase
the number of contracts.
Akagi: Thank you.
Wada: Are there any other questions? If not, we would like to close FreeBit’s financial result briefing for the
fiscal year ended April 2018. Thank you very much for your participation.
[END]______________
Document Notes
1. Portions of the document where the audio is unclear are marked as follows: [Inaudible].
2. This document has been translated by SCRIPTS Asia

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