These documents have been translated from Japanese originals for reference purposes only. In the event of any
discrepancy between these translated documents and the Japanese originals, the originals shall prevail.
September 12, 2024

NIHON KOHDEN CORPORATION (6849)
Stock Exchange Listing:
Head Office:Representative:
Contact:

Prime Market, Tokyo Stock Exchange
Tokyo
Hirokazu Ogino, Representative Director, President and Chief Executive Officer
Fumio Izumida, Operating Officer, General Manager of Corporate Strategy Division
Phone: +81 / 3-5996-8003

Notice regarding Acquisition of Shares of
NeuroAdvanced Corp. (U.S. Company)
Nihon Kohden today announced that on September 12, 2024, its Board of Directors passed a resolution toacquire 71.4% shares of NeuroAdvanced Corp. (“NAC”), which is the parent company of Ad-Tech Medical
Instrument Corporation (“Ad-Tech”) in the U.S. NAC and Ad-Tech will become consolidated and specified
subsidiaries of Nihon Kohden as their capital will be equivalent to 10% or more of Nihon Kohden’s capital,respectively.
Nihon Kohden today concludes a stock purchase agreement with NeuroNewCo, LP (“NNC-LP”), a fund thatowns 100% shares of NAC. The Company will also conclude a shareholders agreement with NNC-LP regarding
Ad-Tech’s business operations under the new capital structure (Nihon Kohden: 71.4%, NNC-LP: 28.6%) andfuture acquisition of shares of NAC by Nihon Kohden.
1. Reason for Acquisition of Shares
Nihon Kohden aims to create a better future for people and healthcare by solving global medical issues in its
Long-term Vision, BEACON 2030. In its Three-year Business Plan, BEACON 2030 Phase II, starting fromApril 2024, the Company focuses on enhancing product competitiveness and expanding consumables andservices business. In North America, the Company also aims to grow its business by prioritizing allocationof resources.
Since its founding in 1951, Nihon Kohden has continued R&D, production, and sales of EEGs used for theexamination and diagnosis of brain diseases such as epilepsy, resulting in gaining a high reputation andmarket share globally. Ad-Tech has also continued R&D, production, and sales of intracranial electrodes
such as depth electrodes and subdural electrodes, which are used for surgical treatment of drug-resistantepilepsy, since its founding in 1983. They have gained an excellent reputation among neurosurgeons in 60 or
more countries around the world. For more than 30 years, Nihon Kohden has provided Ad-Tech productswith exclusive distribution rights to medical institutions in Japan.
Both Nihon Kohden and NNC-LP reached an agreement on this transaction because there is a high affinity
between the Company’s neurology products and Ad-Tech’s intracranial electrodes, and because theCompany expects to further strengthen its core human machine interface (HMI) technology by acquiring
Ad-Tech’s know-how for technology and production of consumables used in invasive testing and treatment.
The Company also expects that the expansion of its consumable portfolio will lead to a stable and consistentrevenue base and growth.

1Globally, it is estimated that there are 50 million patients with epilepsy, of which patients with drug-resistantare 15 million and surgical treatment is required for 5 million patients. In the U.S., as cutting-edge researchon diagnosis and treatment of epilepsy is conducted, Nihon Kohden will strengthen collaboration with not
only Ad-Tech but also medical institutions and research institutions. Nihon Kohden aims to provide theoptimal care cycle solution for each patient, from examination, diagnosis, and treatment to prognosis inneurology area.
2. Outline of Shareholders Agreement
NNC-LP, a counterparty to the acquisition of shares, is one of the Limited Partnership Funds advised by
ARCHIMED SAS (“ARCHIMED”), which is a global leading investment firm specializing in thehealthcare industry. Since acquiring Ad-Tech in 2020, ARCHIMED has contributed to strengthening AdTech’s business foundation and sustainable growth by deep involvement in their management, including theappointment of Brian Smith as CEO. Nihon Kohden highly appreciates the management capabilities of AdTech by ARCHIMED over the past few years.
Under the shareholders agreement to be concluded between the Company and NNC-LP, in anticipation ofthe possibility of changes in the management structure of Ad-Tech in the future, a put option (NNC-LP has
the right to sell NAC shares to the Company) will be included. If this option is exercised, NAC will become
a 100% subsidiary of the Company by Nihon Kohden’s acquiring an additional 28.6% shares of NAC. Theshareholders agreement will also include an earn-out clause based on the achievement of Ad-Tech’sperformance targets, which is subject to the exercise of this put option.
3.1 NAC’s Profile
(1)
(2)
(3)

NameLocation
Name and title ofrepresentative(4)

Business(5)(6)

CapitalDate of establishment
Major shareholders andownership ratios(7)

NeuroAdvanced Corp.
251 Little Falls Drive, Wilmington, DE 19808, U.S.A.
Brian P. Smith, CEO
Holding company of companies that are engaged in R&D, production, andsales of medical equipment$29.7 million
October 12, 2020
NeuroAdvanced Corp. is wholly owned by NeuroNewCo, LP.
Capital(8)

Relationship between
Nihon Kohden
and NAC

PersonnelBusiness

There is no significant relationship between Nihon Kohden
and NAC.
There is no significant relationship between Nihon Kohden
and NAC.
Nihon Kohden has exclusive distribution rights in Japan for
products of Ad-Tech, a 100% subsidiary of NAC.

3.2 Ad-Tech’s Profile
(1)

Name

(2)

Location(3)

Name and title ofrepresentative

Ad-Tech Medical Instrument Corporation
Registration: 251 Little Falls Drive, Wilmington, DE 19808, U.S.A.
R&D, production, sales: 400 West Oakview Parkway, Oak Creek, WI
53154, U.S.A.
Brian P. Smith, CEO2

(4)
(5)
(6)
(7)

Business
CapitalDate of establishment
Major shareholders andownership ratios

R&D, production, and sales of medical equipment$29.7 million
August 10, 1983
Ad-Tech is wholly owned by NeuroAdvanced Corp.

There is no significant relationship between Nihon Kohdenand Ad-Tech.
Relationship between
There is no significant relationship between Nihon Kohden(8)
Nihon Kohden
Personnel
and Ad-Tech.
and Ad-Tech
Nihon Kohden has exclusive distribution rights in Japan for
Business
products of Ad-Tech.
(9)
Operating results and financial conditions for the last three years*(Millions of dollars)
As of fiscal years ended
December 31, 2021
December 31, 2022
December 31, 2023
Net assets
$24.4
$24.0
$24.5
Total assets
$53.8
$55.0
$52.8
Net sales
$21.2
$24.5
$28.0
Operating income (loss)($0.2)($1.2)$2.8
Ordinary income (loss)($1.1)($2.8)$0.4
Income (loss) attributable to($0.4)($1.9)$0.4
owners of parent* There are two special purpose companies (SPCs) between NAC and Ad-Tech. The above numbers are theconsolidated financial statements of the two SPCs and Ad-Tech.
Capital4

NNC-LP’s Profile
(1)

Name

(2)

Location(3)

Basis of establishment(4)

Purpose of formation(9)

Relationship between
Nihon Kohden andNNC-LP

NeuroNewCo, LP
Carnegie Hall Tower 152 W. 57th Street, Floor 57 New York, NY 10019,
U.S.A.
A Limited Partnership Fund under the Delaware LPs Act
Formed by ARCHIMED SAS, a French investment firm, to invest inMedTech industry, which is one of their investment sectors
Relationship between Nihon Kohden and NNC-LP
N/A
Relationship between Nihon Kohden and NNC-LP’s operating
N/A
partners
Relationship between Nihon Kohden and NNC-LP’s Japanese
N/Aagents5. Number of shares to be acquired, acquisition costs, and shareholding before and after acquisition(1)(2)

Number of shares held
before the change
Number of shares to beacquired

0 shares (Number of voting rights: 0 units)(Ratio of voting rights held: 0%)
227.766 shares (Number of voting rights: 227.766 units)

Approx. ¥16.0 billion (estimated amount including advisory fees, etc.)* Based on an exchange rate of 145 yen to the U.S. dollar.
Number of shares to be
227.766 shares (Number of voting rights: 227.766 units)(4)
held after the change(Ratio of voting rights held: 71.4%)* With respect to the acquisition price, appropriate due diligence has been conducted by third party
organizations and sufficient procedures have been implemented to verify the appropriateness of the price.
The funds required for the share acquisition are expected to be provided by cash on hand and debts fromfinancial institutions.
(3)

Acquisition costs

36. Schedule(1)
Date of resolution at the meeting of the Board of Directors
September 12, 2024
(2)
Date of conclusion of the agreement
September 12, 2024
(3)
Date of share transfer
November 29, 2024 (scheduled)** The execution of the share transfer is subject to the fulfillment of the preconditions stipulated in the stock
purchase agreement as well as regulatory approval under the antitrust law in the U.S. The Company plans
to conclude a shareholders agreement with NNC-LP by the date of the share transfer.
7. Effect on Operating Results of Nihon Kohden
The effect of this share transfer on the consolidated results for the fiscal year ending March 31, 2025 iscurrently under review. If an event which is required to be disclosed arises, the Company will immediatelyannounce such event.
(Reference) Consolidated forecast for FY2024 announced on May 13, 2024 and FY2023 result
Operating income

Ordinary income

Income attributable toowners of parent

229,000

23,00023,00016,000221,98619,591

25,58917,026

Net sales
Forecast for fiscal year
ending March 31, 2025
Result for fiscal year
ended March 31, 2024

(Millions of yen)4