FreeBit Co., Ltd.
Q3 Financial Results Briefing for the Fiscal Year Ending April 2019
March 8, 2019

Presentation
Tanaka: Hello everyone. My name is Tanaka, the president of FreeBit Co., Ltd. Today, I would like to explain
the results of Q3 for the fiscal year ending April 31, 2019.

First of all, let's look at the financial results figures. We reported net sales of 34.118 billion, EBITDA of 2.750
billion, operating income of 1.628 billion, and ordinary income of 1.294 billion.
So far, sales have increased by 18.2% year-on-year. Operating income and ordinary income rose 68% and150%, respectively, showing very large year-on-year growth.
Net income was negative 23 million yen, an increase of 700 million yen compared to the previous year. It's in
the red, but, net income has increased significantly since last year.
We regret to report a loss of 23 million yen for this period. We plan to increase operating income significantlyin Q4. As a result of that, we expect to clear our full-year forecasts.
As for the content, I would like to mention a significant area. Sales grew significantly due to improved
apartment-building internet sales and mobile-business profits. Operating income jumped 68% in the fiscal
year under review.

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In terms of qualitative information and consolidated results, as I mentioned earlier, the increase in apartmentbuilding internet contributed significantly to the increase in sales. The health-tech business has also grown todouble the level of the previous year, and this has contributed significantly. To ALC Press Inc., which we
acquired last year. From this quarter, ALC Press Inc. has been consolidated in PL, and the increase in thosesales is also a very important factor.
In terms of quarter sales for this period, we have recorded record-high net sales for the second consecutive
quarter. The results for this period are shown here.

Let's look at the segment situation. In the broadband business, the apartment-building-internet business is
growing greatly and has become a big factor. However, sales of services for the original ISP business are
declining. Nevertheless, apartment-building internet's sales have increased significantly, and we are now able
to cover that, and more through its sales.
As I mentioned earlier, the health-tech business has more than doubled compared to the previous year, andits proportion has increased by 107.2%.
We acquired ALC Press Inc. And due to that, in this quarter, we launched a new business, an educational-techbusiness. I'll speak about this business in a moment. In the current consolidated fiscal year, sales and operating
income have begun to contribute to the Group's performance, and, as a key new growth segment in the Group,
it will likely develop into holding a significant position.

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As announced today, Full Speed Group, which is our consolidated subsidiary, announced that its performancehas been downwardly revised. However, the FreeBit Consolidated Group's performance forecasts are notaffected due to the growth of other businesses, even with this revision at Full Speed. As a result, the Group's
performance forecasts for the fiscal year under review are generally very favorable, and, at the same time,
we are confident that the outlook for the current period is proceeding steadily.

I mentioned that the current period's sales profit is progressing as planned. I think that the most importantconcern for shareholders and investors is whether we will really achieve this in the full fiscal year. I havecollated this information on this sheet. The full-year operating income target for the current period is 2.75
billion yen. In Q3 financial results, we need to accumulate about 1.1 billion yen up, and we expect things toprogress with no major concerns.
In terms of details, first, Giga Prize Co. Ltd. upwardly revised its earnings forecasts last month, and its earnings
were very steady. Let's look at the revision of earnings forecasts for Giga Prize. In terms of absolute amounts,
we have contributed significantly to the consolidated group, more than the revision, and we believe that thiswill make a significant contribution to our results in the current period.
In particular, with regard to Giga Prize, our business results have been growing through transactions withmajor developers and housing manufacturers. The major housing manufacturers and developers are planningto start and complete a large number of projects toward the end of this fiscal year, in March, and we believethat we will be able to successfully be part of those customers' business plans and achieve our results every
year. Therefore, we believe that we will continue to make progress without problems in this period.

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Let's look at the language-education producer called ALC, which has newly joined the Group. This business isbased on seasonal factors, with profits skewed very heavily to the season of entering university and enteringcompanies, March and April. In our fiscal year, March and April are at the end, so this situation will significantly
contribute to achieving performance in the current fiscal year.
Due to the very strong performance of other businesses as a whole and the new period starting in March,
April, there is a year-end budget, and many customers want to start a new business in the new business fiscal
year. Due to this, profits tend to concentrate in Q4. We believe that the accumulation of 1.1 billion yen in
operating income in Q4 will continue without any problems. Therefore, I believe that shareholders andinvestors can relax and watch our business results without anxiety.

The graph shows trends in quarterly results. As to the Q3 results, quarter sales reached 12.62 billion yen in
Q3, marking the third consecutive quarterly record high.

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4Sales are growing. The broadband business, mobile business, and advertising-technology business account for
the largest share. There are two areas that are growing: the health-tech business and the newly added
educational-tech business. These two areas are contributing significantly to the record-high net sales.

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In terms of items when comparing net sales year-on-year, the growth in apartment-building internet, which I
have been explaining, is the biggest in absolute terms. The newly added educational-tech business and healthtech business have more than doubled compared to the previous year, and that is the third biggest figure.
Advertising-technology business contributed significantly to sales growth every fiscal year, but in the current
fiscal year there were factors that I mentioned later, and there were some areas where the growth rate wasslightly lower. However, as this is also seeing a recovery trend, it is expected to contribute until the end of thecurrent period into the next period.

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The details for operating income are similar to sales described a moment ago. By contrast, mobile business's
profitability has improved compared to the previous year, so there has not been sales growth. Improvements
in management efficiencies in this business have contributed significantly to operating income.
In addition, health-tech and educational-tech business have been newly added, and their presence in theoverall business results is growing very strongly.
The result of that is, looking at the graph of net sales, the bars in the graph have grown compared to theprevious year. Operating income and absolute amounts also increased significantly from 900 million in theprevious fiscal year to 1.6 billion in the current fiscal year.

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Let's look at the trend in network-related expenses. As can be seen from the graph, in this business, mobileand fixed broadband have become more stable and costs are no longer increasing.

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9Next, let's look at the trend in selling, general, and administrative expenses. In the current period, ALC Press
Inc. is included in consolidated subsidiaries, so those selling, general, and administrative expenses areincluded. This is the same as the explanation on net sales given a moment ago. Sales for ALC Press Inc. arealso included, so from a structural point of view, of course, costs have also increased.

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In terms of personnel as well, the personnel at ALC Press Inc. have increased our number of personnel, and,in total, the number of employees is approximately 1,200. In term of existing business other than ALC Press
Inc., currently, we're past the phase of greatly increasing the number of personnel, and sales themselves will
greatly increase in the future. Personnel expenses will likely level off in the future, because we haveestablished a system from a short while back due to us no longer having to increase the number of personnel
by very much.

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Let's look at ordinary income. This goes without saying, but operating income has grown considerably, so
ordinary income has also been added. The absolute amount of investment loss in affiliates using the equity
method is still in the red. The loss decreased by 180 million yen compared to the previous year, which
contributed to the increase in profit, and ordinary income was 1.290 billion yen in this period.

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In 3Q, net income was more than 700 million in the red the previous year, and ordinary income for the current
period has exceeded that figure. Therefore, in this segment, we have turned this around to be positive.
However, taxes and other expenses have been incurred, the result of which is that we are slightly in the red.
This will increase due to the accumulation of operating income in Q4, so we will not go into the red throughout
the year, so please do not feel any anxiety with respect to this.

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As to the balance sheet, by combining ALC Press Inc., total assets increased. As to goodwill, the acquisition of
ALC Press Inc. increased this, and it increased by approximately 600 million yen. Net assets remained largely
unchanged.
I have, so far, explained the overall results, and I would now like to explain the segments in a little more detail.

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First of all, let's look at the progress made in the broadband business. Sales increased by 29% on a year-onyear basis. As to the segment profit and loss, there was a decline of 18%. Gross profit rose as apartmentbuilding internet sales increased, resulting in an additional 700 million yen.
On the other hand, sales of fixed broadband are now declining, and this is directly related to the decline inprofits. Nevertheless, apartment-building internet sales have increased by 700 million yen, which covers the
majority of that
Furthermore, as to Giga Prize, which is engaged in apartment-building internet, its business is expanding
dramatically now. As a result of that, SG&A expenses have increased, due in part to systemic enhancements,
compared to the previous year, and overall, there was a profit decrease. However, the trend of increasing
apartment-building internet sales will continue, and SG&A expenses will not increase as much as sales. I would
like you to understand that sales will grow significantly in the future and segment profits will trend upward.

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In terms of new services, in January we announced a next-generation WAN service as part of our broadband
business, and this service is aimed at major corporations. The graph shows that the number of apartmentbuilding internet units offered by broadband business has increased, as I've said several times, not only interms of sales but also in terms of the number of units sold. The number of households serviced exceeded
360,000 households, and the number of households serviced should exceeded 400,000 units in the current
period. As a result, the number of households serviced has reached the highest level in the industry.

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As to Giga Prize, which is included in the broadband business, we have released a number of services in related
businesses, and we are engaged in various initiatives with AEON. We have announced that we will engage inthe business of the AEON company housing agency; that we will continue to increase the network services of
AEON housing's affiliated stores, together with AEON; and that we will start providing Giga Prize apartmentbuilding internet for those network services. That's a summary of the broadband business.

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Next, let's look at the mobile business. Despite the fact that sales have declined slightly, even on a year-onyear basis, we have worked to improve profitability, resulting in an increase of 450 million from the previous
year. The business of Tone Mobile, an affiliate accounted for by the equity method, has also progressed, and,on March 1, it announced a new handset, which is now on the market.

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Next, let's look at the advertising-technology business. There has been a 5% year-on-year increase in sales.
Up until now, the growth rate was slightly higher, but in the current quarter, sales growth has somewhat
stopped. We will restrict third party's cookie, iOS ITP, which we have seen since last year. Therefore, theInternet advertising industry as a whole has somewhat stopped growing, and there are some areas that are
being affected by this, and, since last year, there have been a large ranking change for Google's search engine,
and we are responding to this change. In the short term, there are some things that have led to a decline in
the sales growth rate, and this quarter's sales have fallen compared to the previous quarter. In terms of theyear-on-year basis, the increase was limited.
However, while changes in Google search rankings are constantly occurring, our response to these changes inour sales activities have advanced, and our business performance has greatly improved. In terms of segment
profit/loss, there were some areas in which expenses, such as the launch of new businesses, were largely
incurred in the current period. However, as these expenses have come to a halt, the situation is that they will
become a positive factor for Q4 and in the next fiscal year.
As I mentioned at the beginning of this presentation, we have downwardly revised our Full Speed consolidated
financial statements. Regarding the decline in net sales being less than that anticipated, due to the change insearch engine ranking, which I mentioned a moment ago, and the impact of the iOS ITP, net sales were lower
than the forecast. Operating income and net income were also affected by these developments, and the
portion of upfront investments was carried out in line with our plans. As a result, we believe that these willlead to a revision to our forecasts.

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22However, as we have recently recovered, we are not concerned about the situation for the next period, andeven though we have revised our forecasts downward, our absolute amount of profits has been extremely
high within the Group, and we will continue to work hard to expand our advertising-technology business.
That's a summary of the ad-tech business.

In terms of individual initiatives, FORiT, an affiliate provider company in the Group, has continued to expand
into Asian markets. The size of the Asian internet advertising market is still different in size from that of Japan,
the U.S., and China, so the scale of the markets is not large. However, the market is growing at a considerable
rate, and we are entering the markets at an early stage of growth. In this way, we are working to increase ourshare of Asian platforms in affiliate business.

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As for Full Speed alone, there is currently a shortage of human resources in Japanese companies across almost
all industries. In particular, the feeling of labor shortages among medium-sized companies, which are clientsof Full Speed, is even larger than that of large companies, so there are search-engine-optimization services
for recruiting human resources. Google has started a new service called Google Job Search. There are SEO
services and advertisements by the recruiter indeed. Optimization in the search engine will be necessary, so
we are consulting about and selling that.

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I've spoken so far about advertising-tech, and, next, I will talk about the cloud business. Legacy services are
currently shrinking, and this has continued quietly for many years. There have been some fluctuations inperiods depending on how profit and loss is handled. However, the business size itself is not very large, andthe impact on the whole is negligible.

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Nevertheless, new initiatives are emerging in the cloud business. Alpine is now called AlpsAlpine. We are
currently working with AlpsAlpine to develop a digital key that utilizes block chain technology, and if we canconvert it into a suitable commercial service in the future, it will become an extremely large business. This isa new initiative. That's a summary of the cloud business.

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Next, let's look at the health-tech business. For FreeBit EPARK Health Care, which is a consolidated subsidiary,
its business is growing extremely rapidly, and its net sales grew by 107% year-on-year.
In terms of income, the previous fiscal year was in the red, so, in the current period, in terms of FreeBit EPARK
Health Care, we have almost returned things around to be in the black. There is also other health-techbusiness that is being brought about due to upfront investment, so, overall, segment profit/loss is still in the
red stage, but business growth is likely to contribute to profits in the future.

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Looking at another topic of conversation on progress in the health-tech business, we have FreeBit EPARK
Health Care. Dispensing pharmacies and drug stores are customers of this, and the number of bookings basedon these numbers is increasing every month, as shown in the graph.

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Electric drug history handbook. We are offering a drug-history handbook that can be used as an app. The
cumulative number of downloads is over 500,000, and it is possible that this app will spread throughout theentire population. Although it is still likely to grow, it has become a market share that is attracting attention
in the industry.

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Next, let's look at the educational-tech business. This business segment will be led by ALC, which we acquired
last year. As this year marks the 50th anniversary of ALC, it is a long-established content provider in language
education in Japan. ALC itself is a company with various customers, such as individuals, educational
institutions such as high schools or universities, companies that have English-language training, and local
governments.
Its name recognition is extremely well established. The content itself has built up over a 50-year period, and
ALC has its own method of educating. ALC is a highly reliable company. IT adoption has not progressed muchin the industry, and we are determined to continue to launch new services in the future, such as services thatwill further increase the results of learners through IT technology in our group. The group intends to further
leverage the content, methods, and credibility of ALC.
I'm talking about the near future and the next period onwards. In the current fiscal year, in March and April,sales and operating income will greatly increase for ALC Press Inc. The FreeBit Group will receive a significant
contribution to earnings and sales in a timely manner for the consolidated fiscal year of the Group. In the
educational-tech business, we will be able to, for the first time, start properly recording profits from the startof the project. In the future as well, we expect this business to be highly compatible with IT and grow.

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I have so far spoken about this period. In the remaining period, in terms of areas in which we will focus ourefforts, as is shown in the material and as I have just mentioned, apartment-building internet in the broadband
business will grow more and more, so the key point for us is that we complete construction speedily so that
our customers are satisfied.
In the mobile business, the industry has stabilized considerably compared to a while back, and we are working
on various initiatives, including new Tone Mobile handsets, to generate profits.
As to the advertising-technology business, we have seen a number of Google issues recently. These issues are
now being overcome, and we are at the stage of further improving our business results for the current andnext fiscal years and beyond by strengthening our affiliate business development and reviewing the
profitability of the business as a whole.
With regard to the cloud business, blockchain services with Alpine are the most recent topics of conversation,so we will tailor these services with an eye on the future.
In the health-tech business, the FreeBit EPARK Health Care is at a stage in which its business is growing very
rapidly, so we are expanding the market share more and more.
As I mentioned earlier, we are preparing for significant growth in educational-tech business from the next
fiscal year onwards, and we are now focusing on this area in the future.

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The rate of progress is shown by the figures in the table. Dividing by one-quarter is not equal. However, we
believe that the business structure is in place to significantly increase sales and profits in Q4, so we see that
there is extremely steady progress. We ask shareholders and investors as well to be conscious of this trend.

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Amid this favorable trend, our midterm management plan is progressing well, with the aim of being acompany with consolidated net sales of 50 billion and consolidated operating income of 5 billion for the next
fiscal year. As we are nearly on track to reach our goals in the fiscal year ending April 2019, we intend tocontinue working as one to reach our goals of 50 billion in net sales and 5 billion in operating income from thenext fiscal year onwards.
And that concludes my explanation of the current fiscal year's results. I ask you for your continued support.
[END]______________
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