March 16, 2017
For Immediate Release:
MTI Ltd.
Toshihiro Maeta,
President and Chief Executive Officer
Listing: Tokyo Stock exchange(First Section) [9438]
Contact: Hiroshi Matsumoto, Managing Director
Tel: +81-3-5333-6323

Notice Concerning Change in the Status of an Equity Method Affiliate to a Consolidated Subsidiary
MTI Ltd. (hereinafter the “Company”) announces that the Board of Directors of the Company
resolved to acquire additional shares in Video Market Corporation (hereinafter “Video Market”),
its equity method affiliate, at its meeting held on March 16, 2017. For your information, theCompany’s investment ratio in Video Market will rise to 57.57% and Video Market will
become a consolidated subsidiary of the Company through the additional share acquisition.
Details are as follows.

1.Reasons for share acquisition
The Company formed a capital tie-up with Video Market, a company undertaking the video
content distribution business, and converted Video Market into its equity method affiliate inMay 2013. The Company has since advanced cooperation with Video Market in areas including
joint sales promotion activities aimed at gaining paying subscribers to Video Market’s
services and the supply of the affiliate’s popular video content to “music jp,” a mobile content
distribution site of the Company.
On the latest occasion, the Board of Directors of the Company resolved to receive an allotmentof new shares placed privately by Video Market and acquire additional shares from thesubsidiary’s executives by means of share transfer to step up mutual cooperation with Video
Market and strengthen cooperative relationships in the video content distribution business.
2. Overview of the subsidiary that will undergo the status change (Video Market) as of September 30, 2016
（1） NameVideo Market Corporation（2） Address

7F Sankaido Bldg., 9-13 Akasaka 1-chome, Minato-ku, Tokyo（3） Name and title of representative

Toshiki Takahashi, President and Chief Executive Officer（4） Business description

Video content distribution（5） Capital stock

90,000 thousand yen（6） Date of establishment

June 17, 2005

（7）Major shareholders and theirshareholding ratios

Toshiki Takahashi: 39.82%
MTI Ltd.: 33.34%（8）Relationships between theCompany and the listed company

Capital relationships

The Company owns 2,877 common shares(33.34% of such outstanding shares) and 3,333
Class A preferred shares of the company

concerned.
The Company dispatches one director and one
corporate auditor to the company concerned. In
Personnel relationships
addition, the Company loans several employees tothe company concerned.
There are business transactions between thecompany concerned and the Life Entertainment
Business relationships
Business Division and the Pit Through Business
Division of the Company.
The company concerned is an equity method
Correspondence to aaffiliate of the Company. As such, it corresponds torelated partya related party.
（9）Consolidated operating results and financial position in the past 3 years
Fiscal year end

For the fiscal year ended For the fiscal year ended For the fiscal year ended
December 31, 2014
December 31, 2015
December 31, 2016

Net assets

142 millions of yen,

177 millions of yen

352 millions of yen

Total asset

684 millions of yen

829 millions of yen

1,057 millions of yen

16,545.26 yen

20,528.86 yen

40,858.94 yen

Net sales

1,656 millions of yen

2,146 millions of yen

2,343 millions of yen

Operating income(125)millions of yen

39 millions of yen

177 millions of yen

Ordinary income(126)millions of yen

36 millions of yen

178 millions of yen

Income Profit(135)millions of yen

34 millions of yen

175 millions of yen(16,484.22) yen

3,259.29 yen

19,605.77 yen

Net assets per share

Income Profit per share

3. Number of shares to be acquired and state of owned shares before and after their acquisition（1） Number of owned shares before
the status change（2） Numbers of shares to be acquired（3） Number of owned shares after
the status change

2,877 shares(Number of voting rights: 2,877 rights) (Ratio of owned voting rights: 33.34%)(1) Allotment of new shares to be placed privately for capital increase
3,000 common shares(Number of voting rights: 3,000 rights)(2) Share transfer
1,450 common shares(Number of voting rights: 1,450 rights)
7,327 shares(Number of voting rights: 7,327 rights) (Ratio of owned voting rights: 57.57%)* Acquisition value is not stated in this release based on consultations with the company concerned.

4. Schedule（1） Date of resolution by the Board ofDirectors

March 16, 2017（2） Payment for shares to beacquired through private
placement for capital increase

March 27, 2017 (Planned)（3） Share transfer execution date

March 29, 2017 (Planned)2

5. Outlook for the future
The Company is currently closely examining the effects this status change may have on theconsolidated results for the fiscal year ending September 30, 2017. The Company willpromptly disclose any matters that should be disclosed when such matters arise.

（Reference）Consolidated financial results forecast for the current fiscal year (Announced on October 31, 2016) andConsolidated results for the previous fiscal year

Forecasts forconsolidated financialresults（September30, 2017）
Consolidated results forthe Early（September 30, 2017）

Consolidated
Net sales

Consolidated
Operating income

Consolidated
Ordinary income

Consolidated
Profit attributable toowners of parent

32,000

4,060

4,000

2,500

millions of yen

millions of yen

millions of yen

millions of yen

32,844

5,355

5,310

3,317

millions of yen

millions of yen

millions of yen

millions of yen＜Points to consider concerning forecasts＞
Matters stated in this material concerning results forecasts are based on assessments, assumptions and convictions derived
from information available to the Company at the time when this material is published. They may differ significantly from
actual results due to a variety of factors, including future economic conditions in Japan and overseas, changes in conditions
for business operations in Japan and overseas, or uncertain factors and potential risks inherent in forecasts. Those risks anduncertain factors include unpredictable effects on results that may arise from future events.

Note: This document has been translated from a part of the Japanese original for reference purposes only. In
the event of any discrepancy between this translated document and the Japanese original, the original shallprevail. The Company assumes no responsibility for this translation or for direct, indirect or any other formsof damages arising from the translation.

【Contact information for inquiries】
Investor Relations Office
MTI Ltd.
Tel : +81-3-5333-6323
Fax : +81-3-3320-0189
E-mail： ir@mti.co.jp URL： http://www.mti.co.jp

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