(This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy
between this document and the Japanese original, the latter shall prevail.)
Summary of Non-consolidated Financial Results for the Nine Months ended December 31, 2019 (Japanese GAAP)
February 12, 2020
Company name: Digital Media Professionals Inc.
Listing: Tokyo Stock Exchange
Code number: 3652
URL: https://www.dmprof.com/en
Representative: Tatsuo Yamamoto, President and CEO
Contact person: Tsuyoshi Osawa, General Manager, Corporate Planning Department
Tel. (03) 6454 - 0450
Scheduled date of filing Quarterly Securities Report: February 13, 2020
Scheduled date of payment of cash dividends: Supplementary materials for the quarterly financial results: Yes
Briefing session on the quarterly financial results: No
1. Non-consolidated financial results for the nine months ended December 31, 2019 (April 1, 2019 through December 31, 2019)(1) Non-consolidated operating results
Net sales

Operating income
%
34.1
△21.3

Millions of yen

661
493

9 months ended December 31, 2019
9 months ended December 31, 2018

Net income per shareyen△54.62△17.779 months ended December 31, 2019
9 months ended December 31, 2018

Millions of yen

△159
△53

(Percentages indicate year-on-year changes)
Ordinary income
Net income% Millions of yen% Millions of yen
%
△166
△167
－
－
－
△49
△49
－
－
－

Net income per sharedilutedyen－－(2) Non-consolidated financial position
Total assets
Millions of yen

Net assets

Equity ratio

Millions of yen

As of December 31, 2019
3,545
3,312
As of March 31, 2019
2,383
1,998
Reference) Net assets: 3,312 million yen as of December 31, 2019; 1,998 million yen as of March 31, 2019

%
93.4
83.8

Net assets per shareYen
1,057.99
710.702. Cash dividends
Annual dividends per share
2Q-end3Q-endYear-end
yen
yen
yen
Year ended March 2019
0.00
0.00
Year ending March 2020
0.00
Year ending March 2020 (Forecast)
0.00Note) Revision of dividends forecast during the period: None
1Q-end
yen
-

Total
yen
0.00
0.00

3. Forecasts of non-consolidated operating results for the year ending March 31, 2020 (April 1, 2019 through March 31, 2020)(Percentages indicate year-on-year changes.)
Net income
Net Sales
Operating income
Ordinary income
Net income
per share
Millions of yen% Millions of yen% Millions of yen% Millions of yen%
Yen
Full year
1,300
19.6
30
3.6
30
△9.9
20
△43.1
6.49
Note) Revision of forecasts during the period: None

Notes:1. Application of accounting treatments specific to the preparation of quarterly financial statements: None
2. Changes in accounting policies(1) Changes in accounting policies resulting from revisions of accounting standards: None
(2) Changes in accounting policies except (1): None
(3) Changes in accounting estimation: None
(4) Restatement: None
3. Number of shares issued(1) Number of shares issued at the end of the period (including treasury shares)
As of December 31, 2019

3,131,700 shares

As of March 31, 2019

2,811,700 shares

As of March 31, 2019369 shares(2) Number of treasury shares at the end of the period
As of December 31, 2019

1,069 shares(3) Average number of shares issued during the period
9 months ended December 31, 2019

3,065,590 shares

9 months ended December 31, 2018

2,800,182 shares

Note: Explanation regarding the appropriate use of business forecasts and other special notes
The forward-looking statements such as business forecast in this document are based on information currently available to
the Company and on certain assumptions deemed to be reasonable. The Company does not guarantee the achievementof the forecasts. Actual results may differ significantly for a number of reasons.
For the conditions and notes on the use of business forecast, please refer to the attached document page 4"1. Quarterly financial results (3) Forecasts information such as business forecast".

Table of contents of attached materials

1. Quarterly financial results ················································································································· 2(1) Business results ··························································································································· 2(2) Financial position ························································································································· 3(3) Forecasts information such as business forecast ················································································ 4
2. Non-consolidated quarterly financial statements ···················································································· 5(1) Non-consolidated quarterly balance sheets ························································································ 5(2) Non-consolidated quarterly statements of income (nine months ended December 31, 2019) ························ 6(3) Notes on non-consolidated quarterly financial statements ····································································· 7(Note on the premise of a going concern) ··························································································· 7(Note on significant changes in the amount of shareholders' equity) ························································· 7-1-1. Quarterly financial results(1) Business results
The Japanese economy during the third quarter cumulative period has been on a moderate recovery track backed byfirm corporate profits and employment conditions despite rather weak production and exports. However, there aresmoldering concerns about economic slowdown and the downturn in corporate performance partly due to theconsumption tax hike and frequent natural disasters. On the other hand, the world economy has remained in an
uncertain situation with a concern of economic slowdown from the Brexit and effects of geopolitical risks in the Middle
East in addition to trade issues and the prospects for the Chinese economy. Most recently in addition, the spread of
the new type of pneumonia has increased the risk of the global recession.
In the semiconductor industry to which the Company belongs, the prolonged friction between the US and China overadvanced technologies has given negative impacts in specific fields. However, businesses related to Internet of things(IoT), AI (artificial intelligence), big data, next generation high-speed communication standard, and autonomous driving
are steadily expanding, and are booming due to strong demand in these fields.
In the AI / visual computing field, which is the business area of the Company, there has been a competitive environment
where entries from different industries and the movement of existing players to strengthen the business are remarkable
due to the expansion of the AI-related market. In this business environment, it is required to develop products andservices that accurately capture market needs and to bring them to market quickly.
Under such circumstances, the Company aims to evolve into the world's leading "AI Computing Company" that solves
social problems such as a declining birthrate, an aging population, and an accompanying increase in medical expenses,
and realizes a safe and secure society by providing AI solutions backed by the Company’s strength of the integrated
development system of AI algorithm, software and hardware.
During the third quarter, the Company has continued to focus on the AI field and has been developing its business.
Especially in the mobility field, the image recognition engine "ZIA™ Classifier" has been adopted for hiyari-hatto (nearmiss) image analysis service of drive recorders of DENSO TEN Limited. In addition, the Company has launched “ZIA™
SAFE”, an AI platform evolved from ZIA™ Classifier and systematized as a collection of necessary functions andmodules to realize safe driving support systems and is accelerating the response to social issues such as tailgating
and dangerous driving by the elderly. Moreover, with the aim of strengthening partnerships with leading autonomous
driving companies and increasing the ability to provide solutions for autonomous driving technology by acquiring
cutting-edge technology and participating in specification development, the Company joined “The Autoware
Foundation”, an international industry organization that aims at the industry standard for autonomous driving OS.
In areas other than mobility, the Company has promoted a technical tie-up with Computermind Corp. to jointly build AI
and deep learning solutions that support labor-saving and automation of product visual inspection. In addition, in order
to contribute to the development and enhancement of human resources related to edge AI technology and the discoveryof ideas, the Company applied and was successfully adopted for the commissioned project “Survey of issues for finding
ideas regarding Technology Development for AI Chip and Next-generation Computing for High-efficiency and Highspeed Processing” led by the New Energy and Industrial Technology Development Organization (NEDO), and has
started the operation of “AI Edge Contest”. Furthermore, in areas other than the AI field, amusement machines
equipped with imaging processor "RS1" have started operation, and it is expected that shipments of "RS1" will increasein line with an increase in released titles in the future.
In the third quarter cumulative period, mass production shipments of the image processor "RS1" have been steady in
the LSI product business. On the other hand, running royalties mainly from game consoles decreased in the IP core
license business. In the professional services business, there was an increase in mobility-related contract development-2-

projects, including those from Yamaha Motor Co., Ltd., a business and capital partner, despite the fall-off of NEDO
commissioned revenue (125 million yen in the same period of the previous year) related to "An Energy Efficient AI
Engine and an Integrated Cloud of Heterogeneous AI engines".
As a result, net sales for the third quarter cumulative period were 661 million yen (up 34.1% year on year). Operating
loss worsened to 159 million yen (operating loss of 53 million yen in the same period last year) due to an increase in
expenses for strengthening the development system as well as a lower profitability due to the business mix. As a resultof recording share issuance cost of 56 million yen as non-operating expenses regarding the business and capitalalliance with and the implementation of the third-party allotment to Yamaha Motor Co., Ltd. and recording subsidy
income of 47 million yen as non-operating income regarding the NEDO projects, ordinary loss worsened to 166 million
yen (ordinary loss of 49 million yen in the same period last year). Net loss was 167 million yen (net loss of 49 million
yen in the same period last year).
Although net sales were up but losses worsened year on year, the Company has set up a sustainable earningsgenerating system by the stabilization of the management base due to the increase in sales of the amusement LSI
RS1 and the expansion of AI business line.

Although the Company has a single business segment, each business result is shown below in order to show businesstrends.
1) IP core license businessNet sales were 114 million yen attributable to new AI IP license fee, running royalty income from existing customers
and revenue from maintenance support.
2) LSI product businessNet sales were 333 million yen attributable to the sales of RS1 and AI FPGA module "ZIA C3".
3) Professional service businessNet sales were 214 million yen attributable to the revenue of commissioned development mainly related to mobility.

(2) Financial position(Assets)
Current assets at the end of the third quarter amounted to 2,667 million yen, up 604 million yen from the end of theprevious fiscal year mainly attributable to an increase in cash and deposits (up 902 million yen) and a decrease inaccounts receivable (down 335 million yen). Noncurrent assets amounted to 879 million yen, up 559 million yen fromthe end of the previous fiscal year mainly attributable to an increase in investment securities (up 600 million yen).
(Liabilities)
Current liabilities and noncurrent liabilities at the end of the third quarter amounted to 235 million yen, down 149 million
yen from the end of the previous fiscal year mainly attributable to decreases in accounts payable (down 136 million
yen) and other current liabilities (down 21 million yen).
(Net assets)
Net assets at the end of the third quarter amounted to 3,312 million yen, up 1,314 million yen from the end of theprevious fiscal year mainly attributable to increases in capital stock (up 742 million yen) and capital surplus (up 742
million yen) as a result of receiving payment for the third-party allotment of new shares from Yamaha Motor Co., Ltd.
on May 27, 2019 as well as a decrease in retained earnings due to net loss (down 167 million yen).

-3-

(3) Forecasts information such as business forecast
There are no changes in the forecasts of the full fiscal year. For the fourth quarter, the Company expects good progressof RS1 shipment as well as large projects in the IP core licensing business. As for AI-related professional services,
revenues from Yamaha Motor, drive recorder-related customers, license plate-related customers and industrial
customers are expected to grow in addition to the revenue from contracted operation of NEDO’s AI Edge Contest.
Actual performance may differ significantly from the forecast figures due to various factors.

-4-2. Non-consolidated quarterly financial statemen(1) Non-consolidated quarterly balance sheets
Previous year
(As of Mar 31, 2019)(Thousands of yen)
Current Q3 period(As of Dec 31, 2019)

1,096,810
566,997345,372
7,472
46,3872,063,041

1,998,979
231,938
345,216
30,694
61,144
2,667,973

27,75037,551

204,93725
204,963

165,956
25
165,982

87,60487,604
320,318
2,383,359

600,460
75,911
676,371879,905
3,547,878

293,237
2,252
71,271
366,761

156,498
9,843
50,774217,116

1,932
16,656
18,588385,350

1,739
16,842
18,582
235,699

1,062,032
1,081,243△141,191△1,4822,000,603

1,804,592
1,823,803△308,643△1,482
3,318,270△2,594△2,594△6,091△6,091

1,998,008
2,383,359

3,312,179
3,547,878

AssetsCurrent assets
Cash and deposits
Accounts receivable - trade
Securities
Inventories
Other
Total current assets
Non-current assets
Property, plant and equipment
Intangible assets
Software
Other
Total intangible assets
Investments and other assets
Investment securities
Other
Total investments and other assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Accounts payable - trade
Income taxes payable
Other
Total current liabilities
Non-current liabilities
Deferred tax liabilities
Asset retirement obligations
Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders' equity
Valuation and translation adjustments
Valuation difference on available-for-sale securities
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets-5-(2) Non-consolidated quarterly statements of income (nine months ended December 31, 2019)(Thousands of yen)Previous Q3 period (YTD)

Current Q3 period (YTD)(From Apr 1, 2018

(From Apr 1, 2019

To Dec 31, 2018)

To Dec 31, 2019)

Net sales

493,314661,522

Cost of sales

239,145366,915Gross profit

254,168

294,607

Selling, general and administrative expenses

307,563453,610

Operating loss (△)△53,394△159,003

Non-operating income
Interest income
Foreign exchange gains
Subsidy income
Other
Total non-operating income

834

2,083

4,868

-

-

47,200

-

36

5,702

49,320Non-operating expenses
Share issuance cost

1,592

-

-

56,162Foreign exchange losses-

907

Commission for purchase of treasury shares

2-

New share issuance cost

Total non-operating expenses

1,595

57,069△49,287△166,752

Gain on reversal of share acquisition rights

19-

Total extraordinary income

19

-

-

180

Ordinary loss (△)
Extraordinary income

Extraordinary loss
Loss on retirement of non-current assets
Total extraordinary loss (△)
Loss before income taxes-

180△49,268△166,932

Income taxes - current

712

712

Income taxes - deferred

△222

△192

Total income taxes (△)
Net loss (△)

-6-

490

519

△49,758△167,452

(3) Notes on non-consolidated quarterly financial statements(Note on the premise of a going concern)
Not applicable.

(Note on significant changes in the amount of shareholders' equity)
As of May 27, 2019, the Company received payment for a third-party allotment of new shares from Yamaha Motor Co.,
Ltd. As a result, the capital stock is 1,804,592 thousand yen, up 742,560 thousand yen and the capital surplus is1,823,803 thousand yen, up 742,560 thousand yen at the end of the third quarter.

-7-